1
Exhibit 4.6(i)
[EXECUTION COPY]
U.S. $115,000,000
CREDIT AGREEMENT
Dated as of July 1, 1997
among
NATIONAL EQUIPMENT SERVICES, INC.,
and
Certain of its U.S. Subsidiaries,
as Borrowers,
EACH OF THE FINANCIAL INSTITUTIONS
INITIALLY A SIGNATORY HERETO,
TOGETHER WITH THOSE ASSIGNEES
PURSUANT TO SECTION 14.6 HEREOF,
as Lenders,
and
FIRST UNION COMMERCIAL CORPORATION,
as Agent
2
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS 1
1.1 General Definitions. 1
1.2 Accounting Terms and Determinations 27
1.3 Other Definitional Terms. 28
ARTICLE II LOANS 28
2.1 Revolving Loans. 28
2.2 Term Loans. 34
2.3 Optional and Mandatory Prepayments; Reduction of Commitments 35
2.4 Payments and Computations; Cash Management. 37
2.5 Maintenance of Account. 39
2.6 Statement of Account. 39
2.7 Taxes. 40
2.8 Sharing of Payments. 41
2.9 Pro Rata Treatment. 42
2.10 Extensions and Conversions. 42
ARTICLE III LETTERS OF CREDIT 43
3
3.1 Issuance. 43
3.2 Notice and Reports. 43
3.3 Participation. 43
3.4 Reimbursement. 44
3.5 Repayment with Revolving Loans. 45
3.6 Renewal, Extension. 46
3.7 Uniform Customs and Practices. 46
3.8 Indemnification; Nature of Issuing Bank's Duties. 46
3.9 Responsibility of Issuing Bank. 47
3.10 Conflict with Letter of Credit Documents. 47
ARTICLE IV INTEREST AND FEES 48
4.1 Interest on Loans. 48
4.2 Interest After Event of Default. 48
4.3 Unused Line Fee 48
4.4 Lenders' Fees/Agent's Fees. 48
4.5 Letter of Credit Fees. 49
ii
4
4.6 Authorization to Charge Account. 49
4.7 Indemnification in Certain Events. 49
4.8 Inability To Determine Interest Rate. 50
4.9 Illegality. 50
4.10 Funding Indemnity. 51
5
ARTICLE V CONDITIONS PRECEDENT 51
5.1 Closing Conditions. 51
5.2 Material Adverse Change. 52
5.3 Fees. 52
5.4 Representations and Warranties; No Default. 52
5.5 Notice of Borrowing. 52
5.6 Borrowing Base Certificate. 52
5.7 Additional Documents. 53
ARTICLE VI REPRESENTATIONS AND WARRANTIES 53
6.1 Organization and Qualification. 53
6.2 Solvency. 53
6.3 Liens; Inventory. 53
6.4 No Conflict. 54
6.5 Enforceability. 54
6.6 Financial Data 54
6.7 Locations of Offices, Records and Inventory. 55
6.8 Fictitious Business Names. 55
6.9 Subsidiaries. 56
iv
6
6.10 No Judgments or Litigation. 56
6.11 No Defaults. 56
6.12 No Employee Disputes. 56
6.13 Compliance with Law. 56
6.14 ERISA. 57
6.15 Compliance with Environmental Laws. 57
6.16 Use of Proceeds. 58
6.17 Intellectual Property. 58
6.18 Licenses and Permits. 59
6.19 Title to Property. 59
6.20 Labor Matters. 60
6.21 Investment Company. 60
6.22 Margin Security. 60
6.23 No Event of Default. 60
6.24 Taxes and Tax Returns. 60
6.25 No Other Indebtedness. 61
6.26 Status of Accounts. 61
6.27 Representations and Warranties. 62
6.28 Material Contracts. 62
7
6.29 Survival of Representations. 62
6.30 Affiliate Transactions. 62
6.31 Accuracy and Completeness of Information. 62
ARTICLE VII AFFIRMATIVE COVENANTS 63
7.1 Financial Information. 63
7.2 Inventory. 65
7.3 Corporate Existence. 65
7.4 ERISA. 65
7.5 Proceedings or Adverse Changes. 67
7.6 Environmental Matters. 67
7.7 Books and Records. 68
7.8 Collateral Records. 69
7.9 Security Interests. 69
7.10 Insurance; Casualty Loss. 70
7.11 Taxes. 71
7.12 Compliance With Laws. 71
7.13 Use of Proceeds. 72
7.14 Fiscal Year. 72
vi
8
7.15 Notification of Certain Events. 72
7.16 Additional Borrowers. 72
7.17 Schedules of Accounts and Purchase Orders. 73
7.18 Collection of Accounts. 73
7.19 Notice; Credit Memoranda; and Returned Goods. 74
7.20 Acknowledgment Agreements. 74
7.21 Trademarks. 74
7.22 Maintenance of Property. 74
7.23 Annual Appraisal of Rental Equipment. 74
7.24 Pledged Real Estate Assets. 75
7.25 Revisions or Updates to Schedules. 75
ARTICLE VIII FINANCIAL COVENANTS 76
8.1 Consolidated Net Worth. 76
8.2 Leverage Ratio. 76
8.3 Fixed Charge Coverage Ratio. 76
8.4 Interest/Rental Expense Coverage Ratio. 76
9
8.5 Consolidated Capital Expenditures. 76
ARTICLE IX NEGATIVE COVENANTS 77
9.1 Restrictions on Liens. 77
9.2 Restrictions on Additional Indebtedness. 77
9.3 Restrictions on Sale of Assets. 77
9.4 No Corporate Changes. 77
9.5 No Guarantees. 78
9.6 No Restricted Payments. 78
9.7 No Investments. 78
9.8 No Affiliate Transactions. 78
9.9 No Prohibited Transactions Under ERISA. 79
9.10 Restrictions on the Company. 79
9.11 Issuance of Stock. 80
9.12 Material Amendments of Material Contracts. 80
9.13 Additional Negative Pledges. 80
9.14 Subordinated Debt. 80
9.15 Sale and Leaseback. 81
viii
10
9.16 Licenses, Etc. 81
9.17 Limitations. 81
ARTICLE X POWERS 81
10.1 Appointment as Attorney-in-Fact. 81
10.2 Limitation on Exercise of Power. 82
ARTICLE XI EVENTS OF DEFAULT AND REMEDIES 82
11.1 Events of Default. 82
11.2 Acceleration. 84
ARTICLE XII TERMINATION 85
ARTICLE XIII THE AGENT 85
13.1 Appointment of Agent. 85
13.2 Nature of Duties of Agent. 86
13.3 Lack of Reliance on Agent. 86
13.4 Certain Rights of the Agent. 86
13.5 Reliance by Agent. 87
11
13.6 Indemnification of Agent. 87
13.7 The Agent in its Individual Capacity. 87
13.8 Holders of Notes. 88
13.9 Successor Agent. 88
13.10 Collateral Matters. 88
13.11 Actions with Respect to Defaults. 90
13.12 Delivery of Information. 90
ARTICLE XIV MISCELLANEOUS 90
14.1 Waivers. 90
14.2 JURY TRIAL. 91
14.3 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE. 91
14.4 Arbitration. 91
14.5 Notices. 93
14.6 Assignability. 93
14.7 Information. 96
14.8 Payment of Expenses; Indemnification. 96
14.9 Entire Agreement, Successors and Assigns. 97
14.10 Amendments, Etc. 97
x
12
14.11 Nonliability of Agent and Lenders. 98
14.12 Independent Nature of Lenders' Rights. 98
14.13 Counterparts. 98
14.14 Effectiveness. 98
14.15 Severability. 99
14.16 Headings Descriptive. 99
14.17 Maximum Rate. 99
14.18 Right of Setoff. 100
14.19 Concerning Joint and Several Liability of the Borrowers. 100
13
EXHIBITS AND SCHEDULES
EXHIBITS
Exhibit A Form of Acknowledgment Agreement
Exhibit B Form of Assignment and Acceptance
Exhibit C Form of Solvency Certificate
Exhibit D Form of Landlord Agreement
Exhibit E Form of Pledge Agreement
Exhibit F Form of Security Agreement
Exhibit G-1 Form of Revolving Note
Exhibit G-2 Form of Term Loan Note
Exhibit H Form of Notice of Borrowing
Exhibit I Form of Lockbox Agreement
Exhibit J Form of Notice of Extension/Conversion
Exhibit K Form of Compliance Certificate
Exhibit L Form of Borrowing Base Certificate
Exhibit M Form of Joinder Agreement
Exhibit N Form of Subordinated Note
SCHEDULES
Schedule 1.1A Lenders and Commitments
Schedule 1.1B Closing Conditions
Schedule 1.1C Liens
Schedule 1.1D Indebtedness
Schedule 1.1E Investments
Schedule 6.1 Jurisdictions of Organization
Schedule 6.7 Collateral Locations
Schedule 6.8 Fictitious Business Names
Schedule 6.9 Subsidiaries
Schedule 6.10 Litigation
Schedule 6.14 ERISA
Schedule 6.15 Environmental Disclosures
Schedule 6.17 Intellectual Property
Schedule 6.19 Real Estate
Schedule 6.24 Taxes
Schedule 6.28 Material Contracts
Schedule 6.30 Affiliate Transactions
xii
14
CREDIT AGREEMENT
THIS CREDIT AGREEMENT is entered into as of July 1, 1997 by and among
NATIONAL EQUIPMENT SERVICES, INC., a Delaware corporation (the
"Company"), NES ACQUISITION CORP., a Delaware corporation, BAT
ACQUISITION CORP., a Delaware corporation, and AERIAL PLATFORMS,
INC., a Georgia corporation (collectively referred to as the
"Subsidiary Borrowers" or individually referred to as a "Subsidiary
Borrower") (hereinafter, the Company and the Subsidiary Borrowers
collectively referred to as the "Borrowers" or individually referred
to as a "Borrower"), each of those financial institutions identified
as Lenders on Schedule 1.1A hereto (together with each of their
successors and assigns, referred to individually as a "Lender" and,
collectively, as the "Lenders"), and FIRST UNION COMMERCIAL
CORPORATION ("FUCC"), acting in the manner and to the extent
described in Article XIII hereof (in such capacity, the "Agent").
W I T N E S S E T H:
WHEREAS, the Borrowers wish to obtain a revolving credit facility and a
term loan facility to provide for the working capital, letter of
credit and general corporate needs of the Borrowers, including
financing for the Closing Date Acquisitions and Future Acquisitions
and to repay the Bridge Loan (as such terms are defined below); and
WHEREAS, upon the terms and subject to the conditions set forth herein,
the Lenders are willing to make loans and advances to the Borrowers;
NOW, THEREFORE, the Borrowers, the Lenders and the Agent hereby agree as
follows:
ARTICLE I
DEFINITIONS
1.1 GENERAL DEFINITIONS.
As used herein, the following terms shall have the meanings herein
specified:
"Accounts" shall mean all of each Borrower's accounts, whether now
existing or existing in the future, including, without limitation, all (i)
accounts receivable (whether or not specifically listed on schedules
furnished to the Agent), including without limitation, all accounts created
by or arising from all of each Borrower's sales or leases of goods or
rendition of services made under any of each Borrower's trade names or
styles, or through any of each Borrower's divisions; (ii) unpaid seller's
or lessor's rights (including rescission, replevin, reclamation and
stopping in transit) relating to the foregoing or arising therefrom; (iii)
rights to any goods represented by any of the foregoing, including returned
or repossessed goods; (iv) reserves and credit balances held by each
Borrower
15
with respect to any such accounts receivable or account debtors; (v)
guarantees or collateral for any of the foregoing; and (vi) insurance
policies or rights relating to any of the foregoing.
"Acknowledgment Agreements" shall mean (i) the Acknowledgment
Agreements, substantially in the form of Exhibit A hereto, between each
Borrower's warehousemen, fillers, packers and processors and the Agent, in
each case acknowledging and agreeing, among other things, (A) that such
warehousemen, fillers, packers and processors do not have any Liens on any
of the property of any Borrower or any Subsidiary and (B) to the collateral
assignment by each Borrower to the Agent of each such Borrower's interest
in the contracts with each of such warehousemen, fillers, packers and
processors and (ii) Landlord Agreements.
"Acquired Company" shall mean the Person (or the assets thereof) which
is acquired pursuant to an Acquisition.
"Acquisition" shall mean the purchase of a business unit as a going
concern which purchase may be of (i) the Capital Stock of a Person, (ii)
the assets of such Person through merger or consolidation with such Person
or (iii) the plant, property and equipment of such Person, or a portion
thereof, together with the related current assets and intangible assets of
such Person.
"Acquisition Documents" shall mean a purchase agreement pursuant to
which a Future Acquisition is made in accordance with the terms hereof,
including the exhibits and schedules thereto, and all agreements, documents
and instruments executed and delivered pursuant thereto or in connection
therewith.
"Affiliate" shall mean any entity which directly or indirectly
controls, is controlled by, or is under common control with, any Borrower
or any Subsidiary. For purposes of this definition, "control" shall mean
the possession, directly or indirectly, of the power to (i) vote ten
percent (10%) or more of the securities having ordinary voting power for
the election of directors of such Person, or (ii) direct or cause the
direction of management and policies of a business, whether through the
ownership of voting securities, by contract or otherwise and either alone
or in conjunction with others or any group.
"Agency and Custodian Agreement" shall mean the Agency and Custodian
Agreement, of even date herewith, among the Agent, the Company, on behalf
of itself and the other Borrowers, and Xxxx Xxxxxxxxx.
"Agent" shall mean FUCC as provided in the preamble to this Credit
Agreement or any successor to FUCC.
"Agent's Fees" shall mean the fees payable by the Borrowers to the
Agent as described in the Fee Letter.
2
16
"Applicable Percentage" shall mean for Eurodollar Loans, Base Rate
Loans and Unused Line Fees, the appropriate applicable percentages
corresponding to the Leverage Ratio in effect as of the most recent
Calculation Date as shown below:
Applicable Applicable Applicable
Percentage for Percentage for Base Percentage for
Tier Levels Leverage Ratio Eurodollar Loans Rate Loans Unused Line Fee
1 > 2.5 to 1.0 2.75% 1.25% .50%
2 > 2.25 to 1.0 but 2.50% 1.00% .50%
< 2.5 to 1.0
3 > 2.0 to 1.0 but 2.25% .75% .375%
< 2.25 to 1.0
4 < 2.0 to 1.0 2.00% .50% .375%
The Applicable Percentages shall be determined and adjusted quarterly on
the date (each a "Calculation Date") five Business Days after the
date on which the Company provides the quarterly officer's
certificate in accordance with the provisions of Section 7.1(c);
provided, however, that (i) the initial Applicable Percentages shall
be based on Tier Level 1 (as shown above) and shall remain at Tier
Level 1 until the first Calculation Date subsequent to September 30,
1997, and, thereafter, the Tier Level shall be determined by the then
current Leverage Ratio, and (ii) if the Company fails to provide the
officer's certificate to the Agent for any fiscal quarter as required
by and within the time limits set forth in Section 7.1(c), the
Applicable Percentages from the applicable date of such failure shall
be based on Tier Level 1 until five Business Days after an
appropriate officer's certificate is provided, whereupon the Tier
Level shall be determined by the Leverage Ratio set forth in such
certificate. Except as set forth above, each Applicable Percentage
shall be effective from one Calculation Date until the next
Calculation Date. The Applicable Percentages set forth above for all
Eurodollar Loans and Base Rate Loans shall be reduced by .25% at such
time as the outstanding principal balance of the Term Loans has been
reduced to an amount equal to or less than $7,500,000.
"Asset Disposition" shall mean the disposition (other than a
disposition made in the ordinary course of business) of any or all of the
assets (including without limitation the Capital Stock of a Subsidiary) of
any Borrower or any of its Subsidiaries whether by sale, lease, transfer or
otherwise.
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by an assigning Lender and an assignee Lender, accepted by the
Agent, in accordance with Section 14.6(f), in the form attached hereto as
Exhibit B.
"Base Rate" shall mean, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest whole multiple of 1/100 of 1%) equal
to the greater of (i) the Federal Funds Rate in effect on such day plus 1/2
of 1% or (ii) the Prime Rate in effect on such day. If for any reason the
Agent
17
shall have determined in good faith (which determination shall be
conclusive absent manifest error) that it is unable after due inquiry
to ascertain the Federal Funds Rate for any reason, including the
inability or failure of the Agent to obtain sufficient quotations in
accordance with the terms hereof, the Base Rate shall be determined
without regard to clause (i) of the first sentence of this definition
until the circumstances giving rise to such inability no longer
exist. Any change in the Base Rate due to a change in the Prime Rate
or the Federal Funds Rate shall be effective on the effective date of
such change in the Prime Rate or the Federal Funds Rate, respectively.
"Base Rate Loan" shall mean any Loan bearing interest at a rate
determined by reference to the Base Rate.
"Benefit Plan" shall mean a defined benefit plan as defined in
Section 3(35) of ERISA (other than a Multiemployer Plan) in respect of
which any Borrower, any Subsidiary or any ERISA Affiliate is, or within
the immediately preceding six (6) years was, an "employer" as defined in
Section 3(5) of ERISA.
"Borrower" and "Borrowers" shall have the meaning given such terms
in the preamble of this Credit Agreement.
"Borrowing Base" shall have the meaning given to such term in
Section 2.1(b)(i) hereof.
"Borrowing Base Certificate" shall have the meaning given to such
term in Section 7.1(d) hereof.
"Bridge Loan" shall mean the loan evidenced by that certain Secured
Promissory Note dated April 28, 1997 issued by the Borrowers in favor
of First Union Commercial Corporation in the amount of $20,000,000.
"Business Day" shall mean any day other than a Saturday, a Sunday,
a legal holiday or a day on which banking institutions are authorized or
required by law or other governmental action to close in Charlotte,
North Carolina or New York, New York; provided, that in the case of
Eurodollar Loans, such day is also a day on which dealings between
banks are carried on in U.S. dollar deposits in the London interbank
market.
"Capital Lease" shall mean, as applied to any Person, any lease of
any property (whether real, personal or mixed) by that Person as lessee
which, in accordance with GAAP, is or should be accounted for as a
capital lease on the balance sheet of that Person.
"Capital Lease Liens" shall mean Liens on fixed assets arising under
Capital Leases entered into after the date of this Credit Agreement,
provided that: (i) each such lien shall attach only to the property
to be acquired and (ii) a description of the property so acquired is
furnished to the Agent.
4
18
"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, as to any Person, (i) securities issued or
directly and fully guaranteed or insured by the United States or any
agency or instrumentality thereof (provided, that the full faith and
credit of the United States is pledged in support thereof) having
maturities of not more than one year from the date of acquisition,
(ii) time deposits or certificates of deposit of any commercial bank
incorporated under the laws of the United States or any state
thereof, of recognized standing having capital and unimpaired surplus
in excess of $1,000,000,000 and whose short-term commercial paper
rating at the time of acquisition is at least A-1 or the equivalent
thereof by Standard & Poor's Corporation or at least P-1 or the
equivalent thereof by Xxxxx'x Investors Services, Inc. (any such
bank, an "Approved Bank"), with such deposits or certificates having
maturities of not more than one year from the date of acquisition,
(iii) repurchase obligations with a term of not more than seven days
for underlying securities of the types described in clauses (i) and
(ii) above entered into with any Approved Bank, (iv) commercial paper
or finance company paper issued by any Person incorporated under the
laws of the United States or any state thereof and rated at least A-1
or the equivalent thereof by Standard & Poor's Corporation or at
least P-1 or the equivalent thereof by Xxxxx'x Investors Service,
Inc., and in each case maturing not more than one year after the date
of acquisition, and (v) investments in money market funds that are
registered under the Investment Company Act of 1940, which have net
assets of at least $1,000,000,000 and at least 85% of whose assets
consist of securities and other obligations of the type described in
clauses (i) through (iv) above. All such Cash Equivalents must be
denominated solely for payment in U.S. Dollars.
"Cash Management Event" shall have the meaning given to such term in
Section 7.18 hereof.
"Casualty Loss" shall have the meaning given to such term in Section 7.10
hereof.
"Change of Control" shall mean the occurrence of either of the following:
(i) the failure of the Company to own 100% of the issued and
outstanding Capital Stock of any of its Subsidiaries or (ii) the
failure of Xxxxxx Xxxxx and/or its Affiliates to own beneficially,
directly or indirectly, an amount of the outstanding Capital Stock of
the Company which is entitled to more than 50% of the voting power of
all, and represents not less than 50% of the value of all,
outstanding Capital Stock of the Company.
"Closing" shall mean the consummation of the making of the initial loan or
advance by the Lenders to the Borrowers under this Credit Agreement.
19
"Closing Conditions" shall mean the list of Closing Conditions attached
hereto as Schedule 1.1B.
"Closing Date" shall mean the date on which the Closing occurs.
"Closing Date Acquisitions" shall mean the Acquisitions of the Company and
its Subsidiaries occurring on or prior to the Closing Date pursuant
to the Closing Date Acquisition Documents.
"Closing Date Acquisition Documents" shall mean (a) the Stock Purchase
Agreement dated as of February 18, 1997 by and among National
Equipment Services, Inc., Aerial Platforms, Inc. and Xxxxxx X.
Xxxxxx; (b) the Asset Purchase Agreement dated as of March 17, 1997
by and among NES Acquisition Corp., Lone Star Rentals, Inc. and Xxxxx
Xxxxxxx; (c) the Asset Purchase Agreement dated as of January 6, 1997
by and among NES Acquisition Corp., Industrial Crane Maintenance
Systems, Inc., Brazos Rental & Tool, Inc., Safe Work Load Products,
Inc. and the Stockholders referred to therein; (d) the Asset Purchase
Agreement dated as of April 1, 1997 by and among BAT Acquisition
Corp., BAT Rentals, Inc. and Xxxx X. Xxxxxxx, and (e) the Sprintank
Purchase Agreement including the exhibits and schedules thereto, and
all agreements, documents and instruments executed and delivered
pursuant thereto or in connection therewith.
"Collateral" shall mean any and all assets and rights and interests in or
to property of the Borrowers pledged from time to time as security
for the Obligations pursuant to the Security Documents whether now
owned or hereafter acquired, including, without limitation, (i) all
of the Accounts, Chattel Paper, Deposit Accounts, Documents,
Equipment, Fixtures, General Intangibles (including all intellectual
property), Inventory, Instruments and Proceeds of each Borrower, as
defined in the Security Agreement and (ii) all Pledged Stock and all
Proceeds thereof pledged pursuant to the Pledge Agreement.
"Collateral Warranties" shall mean the representations and warranties made
herein pursuant to Sections 6.3, 6.7, 6.11, 6.19, 6.26 and 6.31.
"Commitment" of any Lender shall mean the Revolving Credit Commitment and
the Term Loan Commitment of such Lender.
"Consolidated" or "consolidated" with reference to any term defined
herein, shall mean that term as applied to the accounts of the
Company and all Subsidiaries, consolidated in accordance with GAAP.
"Consolidated Capital Expenditures" with respect to any fiscal period,
shall mean an amount equal to the consolidated aggregate expenditures
of the Company and its Subsidiaries during such fiscal period for the
acquisition (including the acquisition by capitalized lease) or
improvement of (i) capital assets, as determined in accordance with
GAAP, or (ii) Rental Equipment.
6
20
"Consolidated Cash Taxes" shall mean, for any period of computation, the
aggregate of all taxes of the Company and its Subsidiaries on a
consolidated basis, as determined in accordance with GAAP, to the
extent the same are paid in cash during such period (whether such
taxes are due in such period or any other period).
"Consolidated EBITDA" shall mean for any applicable period of computation,
the sum of (i) Consolidated Net Income for such period, but excluding
therefrom all extraordinary non-recurring items of income or loss,
plus (ii) the aggregate amount of depreciation and amortization
charges made in calculating Consolidated Net Income for such period,
plus (iii) aggregate consolidated interest expense for such period,
plus (iv) the aggregate amount of all income taxes reflected on the
consolidated statements of income of the Company and its Subsidiaries
for such period.
"Consolidated EBITDAR" shall mean for any applicable period of
computation, the sum of (i) Consolidated EBITDA for such period plus
(ii) Consolidated Rental Expense for such period.
"Consolidated Fixed Charges" shall mean, for any period of computation,
the sum of (i) Consolidated Interest Expense for the applicable
period plus (ii) Consolidated Funded Debt Payments for the applicable
period.
"Consolidated Funded Debt Payments" shall mean, as of the end of each
fiscal quarter of the Company and its Subsidiaries on a consolidated
basis, the sum of all scheduled payments of principal on Consolidated
Funded Indebtedness (including the principal component of payments
due on Capital Leases during the applicable period ending on such
date); it being understood that Consolidated Funded Debt Payments
shall not include voluntary prepayments or mandatory prepayments of
the Term Loans required pursuant to Section 2.3.
"Consolidated Funded Indebtedness" shall mean, as of the date of
determination, all Funded Indebtedness of the Company and its
Subsidiaries, determined on a consolidated basis in accordance with
GAAP.
"Consolidated Interest Expense" shall mean, for any period of computation,
interest expense on Consolidated Funded Indebtedness of the Company
and its Subsidiaries for such period, as determined in accordance
with GAAP.
"Consolidated Net Income" shall mean the consolidated net income (or net
deficit) of the Company and its Subsidiaries for any period, after
deduction of all expenses, taxes and other proper charges, all as
determined in accordance with GAAP.
"Consolidated Net Worth" shall mean, as of any date, shareholders' equity
or net worth of the Company and its Subsidiaries on a consolidated
basis, as determined in accordance with GAAP.
21
"Consolidated Rental Expense" shall mean, for any period of computation,
the sum of all real property rental expense of the Company and its
Subsidiaries on a consolidated basis for such period, determined in
accordance with GAAP.
"Contractual Obligations" shall mean, with respect to any Person, any term
or provision of any securities issued by such Person, or any
indenture, mortgage, deed of trust, contract, undertaking, document,
instrument or other agreement to which such Person is a party or by
which it or any of its properties is bound or to which it or any of
its properties is subject.
"Credit Agreement" shall mean this credit agreement, dated as of the date
hereof, as the same may be modified, amended, extended, restated or
supplemented from time to time.
"Credit Documents" shall mean, collectively, this Credit Agreement, the
Revolving Notes, the Term Loan Notes, the Letters of Credit, each of
the Security Documents and all other documents, agreements,
instruments, opinions and certificates executed and delivered in
connection herewith or therewith, as the same may be modified,
amended, extended, restated or supplemented from time to time.
"Default" shall mean an event, condition or default which, with the giving
of notice, the passage of time or both would be an Event of Default.
"Defaulting Lender" shall have the meaning given to such term in Section
2.1(d)(iii) hereof.
"DOL" shall mean the United States Department of Labor and any successor
department or agency.
"Dollars" and "$" shall mean dollars in lawful currency of the United
States of America.
"Eligible Accounts Receivable" shall mean the aggregate face amount of the
Borrowers' Accounts that conform to the warranties contained in this
definition and to the Collateral Warranties. Unless otherwise
approved in writing by the Agent (such approval not to be
unreasonably withheld), no Account shall be deemed to be an Eligible
Account Receivable if:
(i) it arises out of a sale or lease made by any Borrower to an
Affiliate unless such Affiliate is a Portfolio Company and such sale
or lease is made on an arm's length basis; or
(ii) the Account is unpaid 90 days or more from the original
invoice date; or
(iii) such Account is from the same account debtor (or any
affiliate thereof) and fifty percent (50%) or more, in face amount,
of other Accounts from such account debtor (or any affiliate thereof)
are unpaid 90 days or more after the original invoice date; or
8
22
(iv) the Account, when aggregated with all other Accounts of
such account debtor, exceeds fifteen percent (15%) in face value of
all Accounts of the Borrowers in the aggregate then outstanding, to
the extent of such excess; or
(v) (A) the account debtor is also a creditor of any Borrower,
to the extent of the amount owed by such Borrower to the account
debtor, (B) the account debtor has disputed its liability on, or the
account debtor has made any claim with respect to, such Account or
any other Account due from such account debtor to such Borrower,
which has not been resolved or (C) the Account otherwise is or may
become subject to any right of setoff by the account debtor, to the
extent of the amount of such setoff; or
(vi) the account debtor has commenced a voluntary case under the
federal bankruptcy laws, as now constituted or hereafter amended, or
made an assignment for the benefit of creditors, or if a decree or
order for relief has been entered by a court having jurisdiction in
the premises in respect to the account debtor in an involuntary case
under the federal bankruptcy laws, as now constituted or hereafter
amended, or if any other petition or other application for relief
under the federal bankruptcy laws has been filed by or against the
account debtor, or if the account debtor has failed, suspended
business, ceased to be solvent, or consented to or suffered a
receiver, trustee, liquidator or custodian to be appointed for it or
for all or a significant portion of its assets or affairs; or
(vii) the sale is to an account debtor outside the continental
United States or Canada, unless the sale is (A) on letter of credit,
guaranty or acceptance terms, in each case acceptable to the Agent in
its sole discretion, or (B) otherwise approved by and acceptable to
the Agent in its reasonable discretion; or
(viii) the sale to the account debtor is on a xxxx-and-hold,
guaranteed sale, sale-and-return, sale on approval or consignment
basis or made pursuant to any other written agreement providing for
repurchase or return; or
(ix) the account debtor is the United States of America or any
department, agency or instrumentality thereof, unless the applicable
Borrower duly and effectively assigns its rights to payment of such Account
to the Agent pursuant to the Assignment of Claims Act of 1940, as amended
(31 U.S.C. Section 3727 et seq.); or
(x) the goods giving rise to such Account have not been shipped
and delivered to and accepted by the account debtor or the services
giving rise to such Account have not been performed by the applicable
Borrower and accepted by the account debtor or the Account otherwise
does not represent a final sale; or
(xi) the Account is not subject to a valid, enforceable and
first priority perfected Lien, subject only to Non-Priority Liens, in
favor of the Agent; or
23
(xii) the Agent, in the exercise of its reasonable discretion,
determines it to be ineligible.
In addition to the foregoing, Eligible Accounts Receivable shall
include such Accounts as the Borrowers shall request and that the Agent
approves in advance, in writing and in its reasonable judgment.
"Eligible New Equipment" shall mean (A) the gross amount of each
Borrower's New Equipment, valued at the delivered cost of such New
Equipment, which (i) is owned solely by such Borrower and with respect to
which such Borrower has good, valid and marketable title; (ii) is stored
on property that is either owned or leased by such Borrower when not
rented to an account debtor pursuant to an equipment lease (provided,
that, with respect to New Equipment stored on property leased by such
Borrower, such Borrower shall have delivered in favor of the Agent an
Acknowledgment Agreement from the landlord of such leased property); (iii)
is subject to a valid, enforceable and first priority perfected Lien (and
no other Liens other than Non-Priority Liens) in favor of the Agent
(except for any titled equipment, the title to which has not been modified
to name the Agent as lienholder, which equipment may be included as
Eligible New Equipment for a period of sixty (60) days following the
Closing Date, provided such equipment otherwise complies with the
requirements of this definition); (iv) is located in the United States;
and (v) is not obsolete or slow moving, and which otherwise conforms to
the warranties contained in this definition and to the Collateral
Warranties; and (B) less any New Equipment that the Agent determines in
its reasonable judgment to be ineligible. In addition to the foregoing,
Eligible New Equipment shall include such items of such Borrower's New
Equipment as such Borrower shall request and that the Agent approves in
advance, in writing and in its reasonable judgment.
"Eligible Parts and Supplies Inventory" shall mean (A) the gross amount of
each Borrower's Parts and Supplies Inventory, valued at the lower of cost (on a
FIFO basis) or market, which (i) is owned solely by such Borrower and with
respect to which such Borrower has good, valid and marketable title; (ii) is
stored on property that is either owned or leased by such Borrower (provided,
that, with respect to Parts and Supplies Inventory stored on property leased by
such Borrower, such Borrower shall have delivered in favor of the Agent an
Acknowledgment Agreement from the landlord of such leased property); (iii) is
subject to a valid, enforceable and first priority perfected Lien (and no other
Liens other than Non-Priority Liens) in favor of Agent; (iv) is located in the
United States; and (v) is not obsolete or slow moving, and which otherwise
conforms to the warranties contained in this definition and to the Collateral
Warranties; and (B) less any Parts and Supplies Inventory that the Agent
determines in its reasonable judgment to be ineligible. In addition to the
foregoing, Eligible Parts and Supplies Inventory shall include such items of
such Borrower's Parts and Supplies Inventory as such Borrower shall request and
that the Agent approves in advance, in writing and in its reasonable judgment.
"Eligible Rental Equipment" shall mean (A) the Orderly Liquidation
Value of the gross amount of each Borrower's Rental Equipment, which (i)
is owned solely by such Borrower and with
10
24
respect to which such Borrower has good, valid and marketable title, (ii)
is located on property of a customer of such Borrower or is stored on
property that is either owned or leased by such Borrower (provided, that,
with respect to Rental Equipment stored on property leased by such
Borrower, such Borrower shall have delivered in favor of the Agent an
Acknowledgment Agreement from the landlord of such leased property); (iii)
is subject to a valid, enforceable and first priority perfected Lien (and
no other Liens other than Non-Priority Liens) in favor of the Agent
(except for any titled equipment, the title to which has not been modified
to name the Agent as lienholder, which equipment may be included as
Eligible Rental Equipment for a period of sixty (60) days following the
Closing Date, provided such equipment otherwise complies with the
requirements of this definition); (iv) is located in the United States or
Canada; and (v) is not obsolete or slow moving, and which otherwise
conforms to the warranties contained in this definition and to the
Collateral Warranties; and (B) less any Rental Equipment that the Agent
determines in its reasonable judgment to be ineligible. In addition to
the foregoing, Eligible Rental Equipment shall include such items of such
Borrower's Rental Equipment as such Borrower shall request and that the
Agent approves in advance, in writing and in its reasonable judgment.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute.
"ERISA Affiliate" shall mean any (i) corporation which is a member of
the same controlled group of corporations (within the meaning of Section
414(b) of the Internal Revenue Code) as the Borrowers or any of their
Subsidiaries; (ii) partnership or other trade or business (whether or not
incorporated) which is under common control (within the meaning of Section
414(c) of the Internal Revenue Code) with the Borrowers or any of their
Subsidiaries; and (iii) member of the same affiliated service group
(within the meaning of Section 414(m) of the Internal Revenue Code) as the
Borrowers or any of their Subsidiaries, any corporation described in
clause (i) above, or any partnership or trade or business described in
clause (ii) above.
"Eurodollar Loan" shall mean a Loan bearing interest based at a rate
determined by reference to the Eurodollar Rate.
"Eurodollar Rate" shall mean, for the Interest Period for each
Eurodollar Loan comprising part of the same borrowing (including
conversions, extensions and renewals), a per annum interest rate
determined pursuant to the following formula:
Eurodollar Rate = London Interbank Offered Rate
--------------------------------------
1 - Eurodollar Reserve Percentage
"Eurodollar Reserve Percentage" shall mean for any day, that
percentage (expressed as a decimal) which is in effect from time to time
under Regulation D of the Board of Governors of the Federal Reserve System
(or any successor), as such regulation may be amended from time to time or
any successor regulation, as the maximum reserve requirement (including,
without limitation, any basic, supplemental, emergency, special, or
marginal reserves) applicable with respect to
25
Eurocurrency liabilities as that term is defined in Regulation D (or
against any other category of liabilities that includes deposits by
reference to which the interest rate of Eurodollar Loans is determined),
whether or not any Lender has any Eurocurrency liabilities subject to such
reserve requirement at that time. Eurodollar Loans shall be deemed to
constitute Eurocurrency liabilities and as such shall be deemed subject to
reserve requirements without benefits of credits for proration, exceptions
or offsets that may be available from time to time to a Lender. The
Eurodollar Rate shall be adjusted automatically on and as of the effective
date of any change in the Eurodollar Reserve Percentage.
"Event(s) of Default" shall have the meaning provided for in Article
XI of this Credit Agreement.
"Excess Cash Flow" shall mean, with respect to any fiscal year period
of the Company and its Subsidiaries on a consolidated basis, an amount
equal to (i) Consolidated EBITDA for such period minus (ii) Unfinanced
Consolidated Capital Expenditures for such period minus (iii) Consolidated
Interest Expense for such period minus (iv) Consolidated Cash Taxes
actually paid during such period minus (v) Consolidated Funded Debt
Payments made during such period minus (vi) voluntary prepayments of the
Term Loan made during such period minus (vii) distributions and other
payments made during such period to shareholders of the Company permitted
to be made hereunder to the extent not deducted in determining
Consolidated EBITDA for such period.
"Excluded Taxes" shall have the meaning provided for in Section
2.7(a).
"Existing Subordinated Notes" shall mean the promissory notes
described on Schedule 1.1D attached hereto.
"Federal Funds Rate" shall mean, for any period, a fluctuating
interest rate per annum equal, for each day during such period, to 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 for such day (or, if such day is not a Business Day, for the
next preceding Business Day) by the Federal Reserve Bank of New York, or,
if such rate is not so published for any day that is a Business Day, the
average of the quotations for such day on such transactions received by
the Agent from three Federal Funds brokers of recognized standing selected
by it.
"Fee Letter" shall mean the letter agreement, dated May 12, 1997, by
and between the Agent and the Borrowers regarding the fees to be paid by
the Borrowers to the Agent.
"Fees" shall mean, collectively, the Agent's Fees, the Lenders' Fees,
the Unused Line Fee, the Standby Letter of Credit Fee and the Issuing Bank
Fees payable hereunder.
"Financials" shall have the meaning given to such term in Section
6.6.
12
26
"First Union" shall mean First Union National Bank, having its
principal offices in Charlotte, North Carolina, and its successors and
permitted assigns.
"Fixed Charge Coverage Ratio" shall mean (i) as of September 30,
1997, the ratio of Consolidated EBITDA minus Consolidated Cash Taxes, cash
dividends and Unfinanced Consolidated Capital Expenditures (each computed
for the fiscal quarter then ending) to Consolidated Fixed Charges
(computed for the fiscal quarter then ending), (ii) as of December 31,
1997, the ratio of Consolidated EBITDA minus Consolidated Cash Taxes, cash
dividends and Unfinanced Consolidated Capital Expenditures (each computed
for the two fiscal quarters then ending) to Consolidated Fixed Charges
(computed for the two fiscal quarters then ending), (iii) as of March 31,
1998, the ratio of Consolidated EBITDA minus Consolidated Cash Taxes, cash
dividends and Unfinanced Consolidated Capital Expenditures (each computed
for the three fiscal quarters then ending) to Consolidated Fixed Charges
(computed for the three fiscal quarters then ending) and (iv) as of June
30, 1998 and as of the last day of each fiscal quarter ending thereafter,
the ratio of Consolidated EBITDA minus Consolidated Cash Taxes, cash
dividends and Unfinanced Consolidated Capital Expenditures (each computed
for the four fiscal quarters then ending) to Consolidated Fixed Charges
(computed for the four fiscal quarters then ending).
"Foreign Lender" shall have the meaning given to such term in Section
2.7(a).
"FUCC Account" shall mean the deposit account, established and
maintained in the name of the Agent at First Union, for the benefit of the
Lenders, in connection with this Agreement and the other Credit Documents.
"Funded Indebtedness" shall mean, with respect to any Person, without
duplication, (a) all Indebtedness of such Person other than Indebtedness of the
types referred to in clause (e), (f), (g), (i), (k), (l) and (m) of the
definition of "Indebtedness" set forth in this Section 1.1, (b) all Indebtedness
of another Person of the type referred to in clause (a) above secured by (or for
which the holder of such Funded Indebtedness has an existing right, contingent
or otherwise, to be secured by) any Lien on, or payable out of the proceeds of
production from, property owned or acquired by such Person, whether or not the
obligations secured thereby have been assumed, (c) all guaranties of such Person
with respect to Indebtedness of the type referred to in clause (a) above of
another Person and (d) Indebtedness of the type referred to in clause (a) above
of any partnership or unincorporated joint venture in which such Person is
legally obligated or has a reasonable expectation of being liable with respect
thereto.
"Funding Bank" shall have the meaning given to such term in Section
4.7 hereof.
"Future Acquisitions" shall mean Permitted Acquisitions occurring
after the Closing Date.
"GAAP" shall mean generally accepted accounting principles in the
United States of America, as in effect on the date hereof and applied on a
consistent basis with the Financials.
27
"Xxxxxx Xxxxx" shall mean Golder, Thoma, Cressey, Rauner, Inc., and
its successors and permitted assigns.
"Governmental Authority" shall mean any Federal, state, local or
foreign court or governmental agency, authority, instrumentality or
regulatory body.
"Xxxxxx Note" shall mean the promissory note from the Company in
favor of Xxxxxx Trust and Savings Bank dated April 27, 1997 in the
principal amount of $13,000,000.
"Highest Lawful Rate" shall mean, at any given time during which any
Obligations shall be outstanding hereunder, the maximum nonusurious
interest rate, if any, that at any time or from time to time may be
contracted for, taken, reserved, charged or received on the indebtedness
under this Credit Agreement, under the laws of the State of North Carolina
(or the law of any other jurisdiction whose laws may be mandatorily
applicable notwithstanding other provisions of this Credit Agreement and
the other Credit Documents), or under applicable federal laws which may
presently or hereafter be in effect and which allow a higher maximum
nonusurious interest rate than under North Carolina or such other
jurisdiction's law, in any case after taking into account, to the extent
permitted by applicable law, any and all relevant payments or charges
under this Credit Agreement and any other Credit Documents executed in
connection herewith, and any available exemptions, exceptions and
exclusions.
"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
guaranties of such Person with respect to Indebtedness of the type referred in
this definition of another Person, (h) the principal portion of all obligations
of such Person under Capital Leases, (i) all obligations of such Person under
Interest Rate Protection Agreements, (j) the maximum amount of all standby
letters of credit issued or bankers' acceptances facilities created for the
account of such Person and, without duplication, all drafts drawn thereunder (to
the extent unreimbursed), (k) all preferred Capital Stock issued by such Person
and required by the terms thereof to be redeemed, or for which mandatory sinking
fund payments are due, by a fixed date, (l) with respect to the Borrowers or any
of their Subsidiaries, the principal portion of all obligations of such Person
under off-balance sheet financing arrangements in the nature of
14
28
"synthetic leases," asset securitizations and other similar financings and
(m) the Indebtedness of any partnership or unincorporated joint venture in
which such Person is a general partner or a joint venturer.
"Independent Accountant" shall mean a firm of independent public
accountants of nationally recognized standing selected by the Board of
Directors of the Company, which is "independent" as that term is defined
in Rule 2-01 of Regulation S-X promulgated by the Securities and Exchange
Commission.
"Interest Period" shall mean, as to Eurodollar Loans, a period of one
month, two months, three months or six months, as selected by the
Borrowers, commencing on the date of the borrowing (including
continuations and conversions thereof); provided, however, (i) if any
Interest Period would end on a day which is not a Business Day, such
Interest Period shall be extended to the next succeeding Business Day
(except that where the next succeeding Business Day falls in the next
succeeding calendar month, then on the next preceding Business Day), (ii)
no Interest Period shall extend beyond the Expiration Date, (iii) any
Interest Period with respect to a Eurodollar Loan that begins on the last
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of the relevant
calendar month at the end of such Interest Period and (iv) if the Loans
and Commitments hereunder have not been fully syndicated by the Closing
Date, during the 60-day period immediately following the Closing Date, the
Borrowers shall only be permitted to select Base Rate Loans.
"Interest Rate Protection Agreement" shall mean any interest rate
protection agreement, foreign currency exchange agreement, commodity
purchase or option agreement or other interest or exchange rate or
commodity price hedging agreements between any Borrower and any Lender, or
any Affiliate of a Lender.
"Interest/Rental Expense Coverage Ratio" shall mean (i) as of September 30,
1997, the ratio of Consolidated EBITDAR (computed for the fiscal quarter then
ending) to Consolidated Interest Expense and Consolidated Rental Expense (each
computed for the fiscal quarter then ending), (ii) as of December 31, 1997, the
ratio of Consolidated EBITDAR (computed for the two fiscal quarters then ending)
to Consolidated Interest Expense and Consolidated Rental Expense (each computed
for the two fiscal quarters then ending), (iii) as of March 31, 1998, the ratio
of Consolidated EBITDAR (computed for the three fiscal quarters then ending) to
Consolidated Interest Expense and Consolidated Rental Expense (each computed for
the three fiscal quarters then ending) and (iv) as of June 30, 1998 and as of
the last day of each fiscal quarter ending thereafter, the ratio of Consolidated
EBITDAR (computed for the four fiscal quarters then ending) to Consolidated
Interest Expense and Consolidated Rental Expense (each computed for the four
fiscal quarters then ending).
"Internal Revenue" shall mean the Internal Revenue Service and any
successor agency.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986,
as amended from time to time, and any successor statute thereto and all
rules and regulations promulgated thereunder.
29
"Inventory" shall mean all of each Borrower's inventory, including
without limitation, (i) all raw materials, work in process, parts,
components, assemblies, supplies and materials used or consumed in the
Borrowers' business; (ii) all goods, wares and merchandise, finished or
unfinished, held for sale or lease or leased or furnished or to be
furnished under contracts of service; and (iii) all goods returned to or
repossessed by the Borrowers.
"Investment" in any Person shall mean (i) the acquisition (whether
for cash, property, services, assumption of Indebtedness, securities or
otherwise, but exclusive of the acquisition of inventory, supplies,
equipment and other assets used or consumed in the ordinary course of
business of the applicable Borrower and Consolidated Capital Expenditures
not otherwise prohibited hereunder) of assets, shares of capital stock,
bonds, notes, debentures, partnership, joint ventures or other ownership
interests or other securities of such Person, (ii) any deposit (other than
deposits made in connection with the purchase of equipment or other assets
in the ordinary course of business) with, or advance, loan or other
extension of credit (other than sales of inventory on credit in the
ordinary course of business and payable or dischargeable in accordance
with customary trade terms) to, such Person or (iii) any other capital
contribution to or investment in such Person, including, without
limitation, any obligation incurred for the benefit of such Person. In
determining the aggregate amount of Investments outstanding at any
particular time, (i) the amount of any Investment represented by a
guaranty shall be taken at not less than the principal amount of the
obligations guaranteed and still outstanding; (ii) there shall be deducted
in respect of each such Investment any amount received as a return of
capital (but only by repurchase, redemption, retirement, repayment,
liquidating dividend or liquidating distribution); (iii) there shall not
be deducted in respect of any Investment any amounts received as earnings
on such Investment, whether as dividends, interest or otherwise; and (iv)
there shall not be deducted from the aggregate amount of Investments any
decrease in the market value thereof.
"Issuing Bank" shall mean First Union or any other Lender that is
acceptable to the Agent which shall issue a Letter of Credit for the
account of the Borrowers.
"Issuing Bank Fees" shall have the meaning given to such term in
Section 4.5(b) hereof.
"Landlord Agreements" shall mean the Landlord Lien Waiver Agreements,
substantially in the form of Exhibit D hereto, between each of the Borrowers'
landlords and the Agent, in each case acknowledging and agreeing, among other
things, (i) that such landlords do not have any Liens on any of the property of
any Borrower or any Subsidiary and (ii) to permit the Agent access to the
property for the purposes of exercising its remedies under the Security
Agreement.
"Leases" shall have the meaning given to such term in Section 6.19
hereof.
"Lender" shall have the meaning given to such term in the preamble of
this Credit Agreement.
16
30
"Lenders' Fees" shall mean the non-refundable fees payable to each of
the Lenders as set forth in each of the Lender's respective fee letter
with the Agent.
"Letter of Credit 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
at risk or (ii) any collateral security for such obligations.
"Letter of Credit Committed Amount" shall have the meaning given to
such term in Section 3.1 hereof.
"Letter of Credit Obligations" shall mean, at any time, the sum of
(i) the aggregate undrawn amount of all Letters of Credit outstanding at
such time, plus (ii) the aggregate amount of all drawings under Letters of
Credit for which the Issuing Bank has not at such time been reimbursed,
plus (iii) without duplication, the aggregate amount of all payments made
by each Lender to the Issuing Bank with respect to such Lender's
participation in Letters of Credit as provided in Section 3.3 for which
the Borrowers have not at such time reimbursed the Lenders, whether by way
of a Revolving Loan or otherwise.
"Letters of Credit" shall mean all letters of credit (whether
documentary or stand-by and whether for the purchase of inventory,
equipment or otherwise) issued by an Issuing Bank for the account of the
Borrowers, and all amendments, renewals, extensions or replacements
thereof.
"Leverage Ratio" shall mean (i) as of September 30, 1997, the ratio of
Consolidated Funded Indebtedness (computed as of the last day of such fiscal
quarter) to Consolidated EBITDA multiplied by four (4) (computed for the fiscal
quarter then ending), (ii) as of December 31, 1997, the ratio of Consolidated
Funded Indebtedness (computed as of the last day of such fiscal quarter) to
Consolidated EBITDA multiplied by two (2) (computed for the two fiscal quarters
then ending), (iii) as of March 31, 1998, the ratio of Consolidated Funded
Indebtedness (computed as of the last day of such fiscal quarter) to
Consolidated EBITDA multiplied by one and one-third (1-1/3) (computed for the
three fiscal quarters then ending) and (iv) as of June 30, 1998 and as of the
last day of each fiscal quarter ending thereafter, the ratio of Consolidated
Funded Indebtedness (computed as of the last day of each such fiscal quarter) to
Consolidated EBITDA (computed for the four fiscal quarters then ending).
"Lien(s)" shall mean any lien, claim, charge, pledge, security
interest, deed of trust, mortgage, or other encumbrance.
"Loan" or "Loans" shall mean the Revolving Loans and/or the Term
Loans (or a portion of any Revolving Loan or Term Loan), individually or
collectively, as appropriate.
31
"Lockbox Accounts" shall have the meaning given to such term in
Section 2.4(b) hereof.
"Lockbox Agreement" shall have the meaning given to such term in
Section 2.4(b) hereof.
"Lockbox Bank" shall have the meaning given to such term in Section
2.4(b) hereof.
"Lockboxes" shall have the meaning given to such term in Section
2.4(b) hereof.
"London Interbank Offered Rate" shall mean, with respect to any
Eurodollar Loan for the Interest Period applicable thereto, the rate of
interest per annum (rounded upwards, if necessary, to the nearest 1/100 of
1%) appearing on Telerate Page 3750 (or any successor page) as the London
interbank offered rate for deposits in Dollars at approximately 11:00 A.M.
(London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period; provided, however,
if more than one rate is specified on Telerate Page 3750, the applicable
rate shall be the arithmetic mean of all such rates. If, for any reason,
such rate is not available, the term "London Interbank Offered Rate" shall
mean, with respect to any Eurodollar Loan for the Interest Period
applicable thereto, the rate of interest per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO
Page as the London interbank offered rate for deposits in Dollars at
approximately 11:00 A.M. (London time) two Business Days prior to the
first day of such Interest Period for a term comparable to such Interest
Period; provided, however, if more than one rate is specified on Reuters
Screen LIBO Page, the applicable rate shall be the arithmetic mean of all
such rates.
"Material Adverse Change" shall mean a material adverse change in (a)
the business, prospects, operations, results of operations, assets,
liabilities or condition (financial or otherwise) of the Borrowers, taken
as a whole, (b) the Collateral taken as a whole, (c) the Borrowers'
ability to perform their respective obligations under the Credit
Documents, or (d) the rights and remedies of the Lenders hereunder, in
each case as determined by the Agent in its reasonable discretion.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the business, prospects, operations, results of operations, assets,
liabilities or condition (financial or otherwise) of the Borrowers, taken
as a whole, (b) the Collateral taken as a whole, (c) the Borrowers'
ability to perform their respective obligations under the Credit
Documents, or (d) the rights and remedies of the Lenders hereunder, in
each case as determined by the Agent in its reasonable discretion.
"Material Contract" shall mean any contract or other arrangement
(other than any of the Leases or the Credit Documents), whether written or
oral, to which any Borrower or any Subsidiary 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.
18
32
"Maturity Date" shall mean (a) as to the Revolving Loans and Letters
of Credit (and the related Letter of Credit Obligations), the fifth
anniversary of the Closing Date and (b) as to the Term Loan, the date of
the final maturity thereof.
"Merchandise Returns" shall mean any of the products manufactured and
sold by the Borrowers or any of their Subsidiaries that are returned.
"Multiemployer Plan" shall mean a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA and (i) which is, or within the immediately
preceding six (6) years was, contributed to by any Borrower, any
Subsidiary or any ERISA Affiliate or (ii) with respect to which any
Borrower or any Subsidiary may incur any liability.
"Net Cash Proceeds" shall mean the aggregate cash proceeds received
by the Borrowers in respect of any Asset Disposition, 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 the Borrowers in any
Asset Disposition net of amounts described in clauses (a) and (b) above.
"New Equipment" shall mean all of each Borrower's Inventory
consisting of equipment less than one year old which is held for resale or
held for lease by such Borrower; provided, however, such equipment held
for lease by such Borrower shall become "Rental Equipment" and no longer
be "New Equipment" upon the leasing of such Equipment by such Borrower.
"Non-Priority Liens" shall mean Permitted Liens described in clauses
(iv), (v), (vi), (ix) and (xi) of the definition of Permitted Liens
herein.
"Note" or "Notes" shall mean the Revolving Notes and/or the Term Loan
Notes, individually or collectively, as appropriate.
"Notice of Borrowing" shall have the meaning given to such term in
Section 2.1(d)(i) hereof.
"Notice of Extension/Conversion" shall have the meaning given to such
term in Section 2.10 hereof.
"Obligations" shall mean the Loans, any other loans and advances or
extensions of credit made or to be made by any Lender to any Borrower, or to
others for any Borrower's account in each case pursuant to the terms and
provisions of this Credit Agreement, together with interest thereon (including
interest which would be payable as post-petition interest in connection with any
bankruptcy or similar proceeding) and, including, without limitation, any
reimbursement obligation or indemnity of the Borrowers on account of Letters of
Credit and all other Letter of Credit Obligations, and all indebtedness, fees,
liabilities and obligations which may at any time be owing by any Borrower to
any Lender in each case pursuant to this Credit Agreement or any other Credit
33
Document, whether now in existence or incurred by a Borrower from time to
time hereafter, whether unsecured or secured by pledge, Lien upon or
security interest in any of a Borrower's assets or property or the assets
or property of any other Person, whether such indebtedness is absolute or
contingent, joint or several, matured or unmatured, direct or indirect and
whether such Borrower is liable to such Lender for such indebtedness as
principal, surety, endorser, guarantor or otherwise. Obligations shall
also include any other indebtedness owing to any Lender by any Borrower
under this Credit Agreement and the other Credit Documents, any Borrower's
liability to any Lender pursuant to this Credit Agreement as maker or
endorser of any promissory note or other instrument for the payment of
money, any Borrower's liability to any Lender pursuant to this Credit
Agreement or any other Credit Document under any instrument of guaranty or
indemnity, or arising under any guaranty, endorsement or undertaking which
any Lender may make or issue to others for any such Borrower's account
pursuant to this Credit Agreement, including any accommodation extended
with respect to applications for Letters of Credit, and all liabilities
and obligations owing from any Borrower to any Lender, or any Affiliate of
a Lender, arising under Interest Rate Protection Agreements entered into
for the purpose of hedging interest rate risk under this Credit Agreement
and the other Credit Documents.
"Operative Documents" shall mean the Credit Documents, the Security
Documents, the Acquisition Documents, any employment contracts, and any
documents or instruments evidencing Subordinated Debt.
"Orderly Liquidation Value" shall mean with respect to the Rental
Equipment, the orderly liquidation value of the Rental Equipment as set
forth in the most recent appraisal relating thereto delivered to and
accepted by the Agent in accordance with the terms of this Credit
Agreement; provided, however, the orderly liquidation value of each item
of Rental Equipment acquired subsequent to the Closing Date shall be its
delivered cost until such item is appraised in accordance with Section
7.23 hereof.
"Other Taxes" shall have the meaning given to such term in Section
2.7(c) hereof.
"Parts and Supplies Inventory" shall mean all of each Borrower's
Inventory consisting of parts and supplies.
"Payment Direction Notice" shall have the meaning given to such term
in Section 2.4(b) hereof.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any
Person succeeding to the functions thereof.
"Permitted Acquisition" shall mean an Acquisition by any Borrower of
an Acquired Company which Acquisition complies with the following
requirements (in each case to the reasonable satisfaction of the Agent)
(i) the Acquired Company shall be an operating company that engages in a
line of business
20
34
substantially similar to the business of the Borrowers engaged in on the
Closing Date (or a holding company which owns such an operating company),
(ii) the Purchase Price for the Acquired Company shall not exceed
$20,000,000 or such greater amount approved by the Required Lenders, (iii)
the ratio of the purchase price for the Acquired Company to the net income
of the Acquired Company before interest, taxes, depreciation and
amortization (computed for the most recently ended 12-month period) shall
not exceed 4.5 to 1.0 or such greater ratio as approved by the Required
Lenders, (iv) the Agent shall have received the "Board Paper" for the
Acquired Company (i.e. a short memo prepared by the applicable Borrower
with respect to the Acquired Company), (v) the Agent shall have received a
review of the financial condition of the Acquired Company conducted by a
firm of independent certified public accountants of nationally recognized
standing reasonably acceptable to the Agent, (vi) the Agent shall have
received an appraisal from an appraiser satisfactory to the Agent setting
forth the orderly liquidation value of the Rental Equipment and New
Equipment of the Acquired Company to be included in the Borrowing Base,
(vii) the Agent shall have completed a field examination with respect to
the working capital assets of the Acquired Company to be included in the
Borrowing Base, (viii) the Agent shall have received all items required by
Sections 7.9 and 7.16 in connection with the Acquired Company, (ix) in the
case of an Acquisition of the Capital Stock of another Person, the board
of directors (or other comparable governing body) of such other Person
shall have duly approved such Acquisition, (x) the Company shall have
delivered to the Agent (A) financial projections demonstrating that, after
giving effect to such Acquisition, the Company and its Subsidiaries would
be in compliance with all of the covenants contained herein including,
without limitation, the covenants set forth in Article VIII hereof, during
the four fiscal quarters following such Acquisition and (B) a Pro Forma
Compliance Certificate demonstrating that, upon giving effect to such
Acquisition, the Company and its Subsidiaries shall be in compliance on a
Pro Forma Basis with all of the covenants contained herein including,
without limitation, the covenants set forth in Article VIII hereof, (xi)
no Default or Event of Default shall exist immediately prior to or
immediately after the consummation of the Acquisition, (xii) immediately
after giving effect to the Acquisition, the lesser of (A) the Revolving
Credit Committed Amount or (B) the Borrowing Base shall be at least
$3,000,000 greater than the sum of the Revolving Loans outstanding plus
Letter of Credit Obligations outstanding and (xiii) in the case of the
Company, it may only effect a direct Acquisition of a Person through the
purchase of the Capital Stock of such Person.
"Permitted Indebtedness" shall mean:
(i) Indebtedness to the Lenders with respect to the Revolving
Loans, the Term Loans and the Letters of Credit pursuant to the
Credit Documents;
(ii) trade payables incurred in the ordinary course of the
Borrowers' business;
(iii) Indebtedness secured by Purchase Money Liens or Capital
Lease Liens, provided that (i) the total of all such Indebtedness for
all the Borrowers and their Subsidiaries taken together shall not
exceed an aggregate principal amount of $10,000,000 at any one time
outstanding; (ii) such Indebtedness when incurred shall not exceed
the purchase price of the asset(s) financed; and (iii) no such
Indebtedness shall be refinanced for a principal amount in excess of
the principal balance outstanding thereon at the time of such
refinancing;
35
(iv) Indebtedness described on Schedule 1.1D attached hereto and
any refinancings of such Indebtedness; provided that the aggregate
principal amount of such Indebtedness is not increased, the scheduled
maturity dates of such Indebtedness are not shortened and such
refinancing is on terms and conditions no more restrictive than the
terms and conditions of the Indebtedness being refinanced;
(v) Subordinated Debt;
(vi) guaranty obligations of any Borrower with respect to any
Permitted Indebtedness of another Borrower;
(vii) indemnity obligations of any Borrower arising in
connection with the representations and warranties made by such
Borrower with respect to the sale or acquisition by such Borrower of
a Person or a business unit of such Person sold or purchased as a
going concern;
(viii) Indebtedness in connection with attachment or judgment
Liens which are Permitted Liens, provided that the total of all such
Indebtedness for all the Borrowers and their Subsidiaries taken
together shall not exceed $250,000 in the aggregate at any one time
outstanding; and
(ix) intercompany loans and advances made by the Company to any
Subsidiary Borrower or by any Subsidiary Borrower to the Company.
"Permitted Investments" shall mean:
(i) Cash Equivalents;
(ii) interest-bearing demand or time deposits (including
certificates of deposit) having maturities of not more than one year
which are insured by the Federal Deposit Insurance Corporation
("FDIC") or a similar federal insurance program; provided, however,
that the Borrowers may, in the ordinary course of their respective
businesses, maintain in their disbursement accounts from time to time
amounts in excess of then applicable FDIC or other program insurance
limits;
(iii) Investments existing on the Closing Date and set forth on
Schedule 1.1E attached hereto;
(iv) (A) advances to officers, directors and employees for
travel, entertainment or other business-related expenses incurred or
anticipated to be incurred in the ordinary course of business and (B)
advances to officers and directors for purchases of Capital Stock of
the Company not exceeding $500,000 in the aggregate at any one time
outstanding;
22
36
(v) intercompany loans and advances described in clause (ix) of
the definition of Permitted Indebtedness;
(vi) promissory notes and other instruments received by a
Borrower as consideration in connection with an Asset Disposition
permitted hereunder; and
(vii) Permitted Acquisitions.
"Permitted Liens" shall mean:
(i) Liens granted to the Agent by the Borrowers pursuant to any
Credit Document;
(ii) Liens listed on Schedule 1.1C attached hereto;
(iii) Purchase Money Liens and Capital Lease Liens, in each case
securing Indebtedness described in clause (iii) of the definition of
Permitted Indebtedness;
(iv) Liens of warehousemen, mechanics, materialmen, workers,
repairmen, fillers, packagers, processors, common carriers, landlords
and other similar Liens arising by operation of law or otherwise, not
waived in connection herewith, for amounts that are not yet due and
payable or which are being diligently contested in good faith by the
Borrowers by appropriate proceedings, provided that in any such case
an adequate reserve is being maintained by such Borrower for the
payment of same;
(v) attachment or judgment Liens securing judgments not
constituting an Event of Default hereunder (exclusive of (a) any
amounts that are duly bonded to the satisfaction of the Agent in its
commercially reasonable judgment or (b) any amount adequately covered
by insurance (i) as to which the insurance company has acknowledged
its obligations for coverage or (ii) as determined by the Agent in
its reasonable discretion);
(vi) Liens for taxes, assessments or other governmental charges
not yet due and payable or which are being contested in good faith by
a Borrower by appropriate proceedings, provided that in any such case
an adequate reserve is being maintained by such Borrower for the
payment of same;
(vii) deposits or pledges to secure obligations under workmen's
compensation, social security or similar laws, or under unemployment
insurance;
(viii) deposits or pledges to secure bids, tenders, contracts
(other than contracts for the payment of money), leases, statutory
obligations, surety and appeal bonds and other obligations of like
nature arising in the ordinary course of business;
37
(ix) easements, rights-of-way, restrictions (including zoning
restrictions), minor defects or irregularities in title and other
similar charges or encumbrances not, in any material respect,
impairing the use of the encumbered Property for its intended
purposes;
(x) any interest of title of a lessor under, and Liens arising
from UCC financing statements (or equivalent filings, registrations
or agreements in foreign jurisdictions) relating to, leases permitted
by this Credit Agreement; and
(xi) the lien in favor of Koehring Cranes, Inc. on certain
assets of Aerial Platforms, Inc. filed in the State of Georgia for a
period of ninety (90) days following the Closing Date.
"Person" shall mean any individual, sole proprietorship, partnership,
joint venture, limited liability company, trust, unincorporated
organization, association, corporation, institution, entity, party or
government (including any division, agency or department thereof), and, as
applicable, the successors, heirs and assigns of each.
"Plan" shall mean any employee benefit plan, program or arrangement,
whether oral or written, maintained or contributed to by any Borrower or
any Subsidiary, or with respect to which any Borrower or any such
Subsidiary may incur liability.
"Pledge Agreement" shall mean the Pledge Agreement, of even date
herewith, between the Agent and the Borrowers, in the form attached hereto
as Exhibit E .
"Portfolio Company" shall mean any Affiliate of Xxxxxx Xxxxx which is
not in the chain of ownership between the Company and any of its
Subsidiaries and is not part of the Company's consolidated financial
group.
"Prime Rate" shall mean the rate which First Union announces from
time to time as its prime lending rate, as in effect from time to time.
The Prime Rate is a reference rate and does not necessarily represent the
lowest or best rate actually charged to any customer. First Union (and
its affiliates) may make commercial loans or other loans at rates of
interest at, above or below the Prime Rate.
"Principal Amortization Payment" shall mean a principal payment on
the Term Loans as set forth in Section 2.2(d).
"Principal Amortization Payment Date" shall mean the date a Principal
Amortization Payment is due.
"Pro Forma Basis" shall mean, with respect to any Permitted
Acquisition, that such Permitted Acquisition shall be deemed to have
occurred as of the first day of the four fiscal-quarter period ending as
of the most recent fiscal quarter end preceding the date of such Permitted
Acquisition with respect to which the Agent has received the related
required financial information described in the
24
38
definition of "Permitted Acquisition" herein. Any Indebtedness incurred
by the Borrowers or any of their Subsidiaries in order to consummate such
transaction (a) shall be deemed to have been incurred on the first day of
the applicable four fiscal-quarter period and (b) if such Indebtedness has
a floating or formula rate, then the implied rate of interest for such
Indebtedness for the applicable period for purposes of this definition
shall be determined by utilizing the rate which is or would be in effect
with respect to such Indebtedness as at the relevant date of
determination. In connection with any calculation of the financial
covenants set forth in Article VIII, balance sheet and income statement
items (whether positive or negative) attributable to the Acquired Company
acquired in such transaction shall be included to the extent relating to
the relevant period and for purposes of any such calculation, the
principles set forth in the second paragraph of Section 1.2 shall be
applicable.
"Pro Forma Compliance Certificate" shall mean a certificate of the
chief financial officer of the Company delivered to the Agent in
connection with any Permitted Acquisition and containing reasonably
detailed calculations, upon giving effect to such Permitted Acquisition on
a Pro Forma Basis, of the financial covenants set forth in Article VIII as
of the most recent fiscal quarter end preceding the date of such Permitted
Acquisition with respect to which the Agent has received the related
required financial information described in the definition of "Permitted
Acquisition" herein.
"Property" shall mean any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"Proprietary Rights" shall have the meaning given to such term in
Section 6.17 hereof.
"Purchase Money Liens" shall mean Liens on any item of equipment or
item of New Equipment acquired after the date of this Credit Agreement,
provided that: (i) each such lien shall attach only to the property to be
acquired and (ii) a description of the property so acquired is furnished
to the Agent.
"Purchase Price" shall mean all cash paid, notes issued and/or
Indebtedness assumed by a Borrower as the consideration paid by such
Borrower in connection with the purchase of an Acquired Company.
"Real Estate" shall mean the real property owned or leased by the
Borrowers described in Schedule 6.19 attached hereto, together with all
Structures thereon.
"Rental Equipment" shall mean all of each Borrower's Inventory
consisting of equipment which is rented by such Borrower in the ordinary
course of business or is held for lease by such Borrower.
"Reportable Event" shall mean any of the events described in Section
4043 of ERISA and the regulations thereunder for which notice has not been
waived by regulation.
39
"Required Lenders" shall mean, at any time, Lenders which are then in
compliance with their obligations hereunder (as determined by the Agent)
and holding in the aggregate at least 51% of (i) the Revolving Credit
Commitments (and participation interests therein) and the outstanding Term
Loans (and participation interests therein) or (ii) if the Commitments
have been terminated, the outstanding Loans and participation interests
(including the participation interests of the Issuing Bank in any Letters
of Credit).
"Responsible Officer" shall mean any Chairman, President, CEO, CFO or
Vice President of a Borrower.
"Restricted Payment" shall mean (i) any cash dividend or other cash
distribution, direct or indirect, on account of any shares of any class of
Capital Stock of any Borrower or any Subsidiary, as the case may be, now
or hereafter outstanding, (ii) any redemption, retirement, sinking fund or
similar payment, purchase or other acquisition for value, direct or
indirect, of any shares of any class of Capital Stock of any Borrower or
any Subsidiary now or hereafter outstanding by such Borrower or any
Subsidiary, as the case may be, except for any redemption, retirement,
sinking funds or similar payment payable solely in such shares of that
class of stock or in any class of stock junior to that class, (iii) any
cash payment made to redeem, purchase, repurchase or retire, or to obtain
the surrender of, any outstanding warrants, options or other rights to
acquire any shares of any class of Capital Stock of any Borrower or any
Subsidiary now or hereafter outstanding, or (iv) any payment to any
Affiliate of any Borrower except to the extent expressly permitted in this
Credit Agreement.
"Revolving Credit Commitment" shall mean, with respect to each
Lender, the commitment of such Lender to make its portion of the Revolving
Loans in a principal amount up to such Lender's Revolving Credit
Commitment Percentage of the Revolving Credit Committed Amount.
"Revolving Credit Commitment Percentage" shall mean, for any Lender,
the percentage identified as its Revolving Credit Commitment Percentage on
Schedule 1.1A, as such percentage may be modified in connection with any
assignment made in accordance with the provisions of Section 14.6.
"Revolving Credit Committed Amount" shall mean the aggregate revolving
credit line extended by the Lenders to the Borrowers for Revolving Loans and
Letters of Credit pursuant to and in accordance with the terms of this Credit
Agreement, in an amount up to $100,000,000, as such revolving credit line may be
reduced from time to time in accordance with Section 2.3(d).
"Revolving Loans" shall have the meaning given to such term in
Section 2.1(b) and shall include Base Rate Loans and Eurodollar Loans.
"Revolving Notes" shall have the meaning given to such term in
Section 2.1(c) hereof.
"Security Agreement" shall mean the Security Agreement, of even date
herewith, between the Agent and the Borrowers, in the form attached hereto
as Exhibit F.
26
40
"Security Documents" shall mean, collectively, the Pledge Agreement,
the Security Agreement, the Agency and Custodian Agreement, any
Acknowledgment Agreement and any Lockbox Agreement.
"Sellers" shall have the meaning given such term in the first WHEREAS
clause hereof.
"Settlement Period" shall have the meaning given to such term in
Section 2.1(d)(ii) hereof.
"Sprintank Acquisition" shall mean the acquisition by NES Acquisition
Corp. of substantially all of the assets of the Sprintank Division and the
Sprint Mobile Storage Division from Sprint Industrial Services, Inc.
pursuant to the Sprintank Purchase Agreement.
"Sprintank Purchase Agreement" shall mean the Asset Purchase
Agreement, dated as of July 1, 1997 by and among NES Acquisition Corp.,
Sprint Industrial Services, Inc. and certain other persons named therein.
"Standby Letter of Credit Fee" shall have the meaning given to such
term in Section 4.5(a) hereof.
"Structures" shall mean all plants, offices, manufacturing
facilities, warehouses, administration buildings and related facilities of
the Borrowers located in the Real Estate described on Schedule 6.19
attached hereto.
"Subordinated Debt" shall mean (a) the indebtedness evidenced by the
Existing Subordinated Notes and (b) any other unsecured Indebtedness
incurred by any Borrower, which, in each case, is expressly subordinated
and made junior to the payment and performance in full of the Obligations
and contains terms and conditions reasonably satisfactory to the Required
Lenders, provided that the Lenders acknowledge that subordination and
other terms and conditions substantially identical, in the sole judgment
of the Agent, to those contained in the form of Subordinated Note attached
hereto as Exhibit N are satisfactory.
"Subordinated Payments" shall mean any fees, expenses or other
payments incurred or owing by any Borrower or any of its Subsidiaries,
which, in each case, are specifically subordinated in right of payment to
the prior payment of the Obligations on terms and conditions satisfactory
to the Required Lenders.
"Subsidiary" of a Person shall mean (i) any corporation, association,
liability company or other business entity of which in excess of 50% of
the voting stock, or other ownership interests in the case of a Person
that is not a corporation, is owned or controlled directly or indirectly
by such Person, or one or more of the Subsidiaries of such Person, or a
combination thereof and (ii) any partnership in which such Person is a
general partner.
41
"Subsidiary Borrower" and "Subsidiary Borrowers" shall have the
meaning given such terms in the preamble of this Credit Agreement.
"Taxes" shall mean any federal, state, local or foreign income,
sales, use, transfer, payroll, personal, property, occupancy, franchise or
other tax, levy, impost, fee, imposition, assessment or similar charge,
together with any interest or penalties thereon.
"Termination Event" shall mean (i) a Reportable Event with respect to
any Benefit Plan or Multiemployer Plan; (ii) the withdrawal of any
Borrower, any Subsidiary or any ERISA Affiliate from a Benefit Plan during
a plan year in which such entity was a "substantial employer" as defined
in Section 4001(a)(2) of ERISA; (iii) the providing of notice of intent to
terminate a Benefit Plan pursuant to Section 4041 of ERISA; (iv) the
institution by the PBGC of proceedings to terminate a Benefit Plan or
Multiemployer Plan; (v) any event or condition (a) which might constitute
grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Benefit Plan or Multiemployer
Plan, or (b) that may result in termination of a Multiemployer Plan
pursuant to Section 4041A of ERISA; or (vi) the partial or complete
withdrawal within the meaning of Sections 4203 and 4205 of ERISA, of any
Borrower, any Subsidiary or any ERISA Affiliate from a Multiemployer Plan.
"Term Loans" shall have the meaning given to such term in Section
2.2(a) and shall include Base Rate Loans and Eurodollar Loans.
"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.
"Term Loan Commitment Percentage" shall mean, for any Lender, the
percentage identified as its Term Loan Commitment Percentage on Schedule
1.1A, as such percentage may be modified in connection with any assignment
made in accordance with the provisions of Section 14.6.
"Term Loan Committed Amount" shall mean the aggregate term loan
facility extended by the Lenders to the Borrowers for Term Loans pursuant
to and in accordance with the terms of this Credit Agreement, in an amount
up to $15,000,000, as such term loan facility shall be reduced in
accordance with Section 2.2(b).
"Term Loan Notes" shall have the meaning given to such term in
Section 2.2(e) hereof.
"Unfinanced Consolidated Capital Expenditures" shall mean, for any
period, the sum of (a) twenty percent (20%) of all Consolidated Capital
Expenditures made for Eligible Rental Equipment and Eligible New Equipment
during such period and (b) one hundred percent (100%) of all other
Consolidated Capital Expenditures made during such period.
28
42
"Unused Line Fee" shall mean the fee required to be paid to the Agent
for the benefit of the Lenders at the end of each calendar month as
partial compensation for extending the Revolving Credit Committed Amount
to the Borrowers, and shall be determined by multiplying (i) the positive
difference, if any, between (A) the Revolving Credit Committed Amount in
effect at such time and (B) the average daily Revolving Loans of the
Borrowers and the Letter of Credit Obligations outstanding during such
calendar month by (ii) the Applicable Percentage then in effect.
"Voting Stock" shall mean, 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.
1.2 ACCOUNTING TERMS AND DETERMINATIONS
-----------------------------------
Unless otherwise defined or specified herein, all accounting terms
shall be construed herein and all accounting determinations for purposes
of determining compliance with Sections 8.1 through 8.5 hereof and
otherwise to be made under this Credit Agreement shall be made in
accordance with GAAP applied on a basis consistent in all material
respects with the Financials. All financial statements required to be
delivered hereunder from and after the Closing Date and all financial
records shall be maintained in accordance with GAAP as in effect as of the
date of the Financials. If GAAP shall change from the basis used in
preparing the Financials, the certificates required to be delivered
pursuant to Section 7.1 demonstrating compliance with the covenants
contained herein shall include calculations setting forth the adjustments
necessary to demonstrate how the Borrowers are in compliance with the
financial covenants based upon GAAP as in effect on the Closing Date. If
the Borrowers shall change their method of inventory accounting, all
calculations necessary to determine compliance with the covenants
contained herein shall be made as if such method of inventory accounting
had not been so changed.
Notwithstanding the above, the parties hereto acknowledge and agree
that, for purposes of all calculations made in determining compliance for
any applicable period with the financial covenants set forth in Sections
8.1 through 8.5 hereof (including without limitation for purposes of the
definitions of "Applicable Percentage" and "Pro Forma Basis" set forth in
Section 1.1), balance sheet and income statement items (whether positive
or negative) attributable to any Acquired Company acquired in any
Permitted Acquisition shall be included in such calculations to the extent
relating to such applicable period (and, notwithstanding the foregoing,
during the first four fiscal quarters ending after the date of such
transaction, income statement items shall be included on an annualized basis).
1.3 OTHER DEFINITIONAL TERMS.
-------------------------
Terms not otherwise defined herein which are defined in the Uniform
Commercial Code as in effect in the State of North Carolina (the "Code")
shall have the meanings given them in the Code. The words "hereof",
"herein" and "hereunder" and words of similar import when used in this
Credit Agreement shall refer to the Credit Agreement as a whole and not to
any particular provision of this Credit Agreement unless otherwise
specifically provided. References
43
in this Credit Agreement to "Articles", "Sections", "Schedules" or
"Exhibits" shall be to Articles, Sections, Schedules or Exhibits of or to
this Credit Agreement unless otherwise specifically provided. Any of the
terms defined in Section 1.1 may, unless the context otherwise requires,
be used in the singular or plural depending on the reference. "Include",
"includes" and "including" shall be deemed to be followed by "without
limitation" whether or not they are in fact followed by such words or
words of like import. "Writing", "written" and comparable terms refer to
printing, typing and other means of reproducing words in a visible form.
References to any agreement or contract are to such agreement or contract
as amended, modified or supplemented from time to time in accordance with
the terms hereof and thereof. References to any Person include the
successors and permitted assigns of such Person. References "from" or
"through" any date mean, unless otherwise specified, "from and including"
or "through and including", respectively. References to any times herein
shall refer to Eastern Standard time.
ARTICLE II
LOANS
-----
2.1 REVOLVING LOANS.
----------------
(a) Revolving Credit Commitment. Subject to the terms and
conditions hereof and in reliance upon the representations and
warranties set forth herein each of the Lenders severally agrees to
lend to the Borrowers at any time or from time to time on or after
the Closing Date and before the Maturity Date, such Lender's
Revolving Credit Commitment Percentage of the Revolving Loans as may
be requested or deemed requested by the Borrowers.
30
44
(b) Determination of Borrowing Base.
(i) The Lenders agree, subject to the terms and conditions of
this Credit Agreement, from time to time, to make loans and
advances to the Borrowers hereunder on a revolving basis. Such
loans and advances to the Borrowers (each a "Revolving Loan";
collectively the "Revolving Loans") shall not in the aggregate
exceed the lesser of (A) the Revolving Credit Committed Amount
then in effect minus the Letter of Credit Obligations, and (B)
an amount equal to the sum of (1) eighty-five percent (85%) of
the then Eligible Accounts Receivable, plus (2) fifty percent
(50%) of the then Eligible Parts and Supplies Inventory, plus
(3) eighty percent (80%) of the then Eligible Rental Equipment
(provided, however, on the last day of each month (other than
the last day of any month during which an appraisal of the
Rental Equipment was delivered pursuant to Section 7.23 hereof),
the aggregate amount of Eligible Rental Equipment as of such
date shall be reduced by an amount equal to 1/60th of such
amount), plus (4) eighty percent (80%) of the then Eligible New
Equipment, minus (5) the Letter of Credit Obligations, minus (6)
reserves established by the Agent from time to time in its
reasonable discretion; provided, that the Agent shall give the
Borrowers prior written notice describing in reasonable detail
the basis for and calculation of any reserves described above.
The amount calculated in accordance with clauses (B)(1)-(6)
above is hereinafter referred to as the "Borrowing Base."
(ii) No Lender shall be obligated at any time to make available to the
Borrowers its Revolving Credit Commitment Percentage of any requested
Revolving Loan if such amount plus its Revolving Credit Commitment
Percentage of all Revolving Loans and its Revolving Credit Commitment
Percentage of all Letter of Credit Obligations then outstanding would
exceed such Lender's Revolving Credit Commitment at such time. The
aggregate balance of Revolving Loans and the aggregate amount of all
Letter of Credit Obligations outstanding shall not at any time exceed
the Revolving Credit Committed Amount. No Lender shall be obligated
to make available, nor shall the Agent make available, any Revolving
Loans to any of the Borrowers to the extent such Revolving Loan when
added to the then outstanding Revolving Loans and all Letter of Credit
Obligations would cause the aggregate outstanding Revolving Loans and
all Letter of Credit Obligations to exceed the Borrowing Base. The
Borrowers shall promptly repay to the Agent for the account of the
Lenders from time to time the full amount of the excess, if any of (A)
the amount of all Revolving Loans and Letter of Credit Obligations
outstanding over (B) the lesser of (1) the Revolving Credit Committed
Amount and (2) the Borrowing Base.
(c) Revolving Notes. The obligations to repay the Revolving Loans and to
pay interest thereon shall be evidenced by separate promissory notes of the
Borrowers to each Lender in substantially the form of Exhibit G-1 attached
hereto (the "Revolving Notes"),
45
with appropriate insertions, one Revolving Note being payable to the
order of each Lender in a principal amount equal to such Lender's
Revolving Credit Commitment and representing the obligations of the
Borrowers to pay such Lender the amount of such Lender's Revolving
Credit Commitment or, if less, the aggregate unpaid principal amount
of all Revolving Loans made by such Lender hereunder, plus interest
accrued thereon, as set forth herein. The Borrowers irrevocably
authorize each Lender to make or cause to be made appropriate
notations on its Revolving Note, or on a record pertaining thereon,
reflecting Revolving Loans and repayments thereof. The outstanding
amount of the Revolving Loans set forth on such Lender's Revolving
Note or record shall be prima facie evidence of the principal amount
thereof owing and unpaid to such Lender, but the failure to make such
notation or record, or any error in such notation or record shall not
limit or otherwise affect the obligations of the Borrowers hereunder
or under any Revolving Note to make payments of principal of or
interest on any Revolving Note when due.
32
46
(d) Borrowings under Revolving Notes.
(i) Each request for borrowings hereunder shall be made by
notice in the form attached hereto as Exhibit H from the
Company, acting on behalf of the Borrowers, to the Agent (the
"Notice of Borrowing"), given not later than 12:00 noon (A) on
the Business Day on which the proposed borrowing is requested to
be made for Revolving Loans that will be Base Rate Loans and (B)
three Business Days prior to the date of the requested borrowing
of Revolving Loans that will be Eurodollar Loans. Each Notice
of Borrowing shall be given by either telephone, telecopy, telex
or cable, and, if requested by the Agent, confirmed in writing
if by telephone, setting forth (1) the requested date of such
borrowing, (2) the aggregate amount of such requested borrowing,
(3) whether such Revolving Loans will be Base Rate Loans or
Eurodollar Rate Loans, and if appropriate, the applicable
Interest Period, (4) certification by the Company, on behalf of
the Borrowers, that they have complied in all respects with
Article V hereof, all of which shall be specified in such manner
as is necessary to comply with all limitations on Revolving
Loans outstanding hereunder (including, without limitation,
availability under the Borrowing Base) and (5) the account at
which such requested funds should be made available. Each
Notice of Borrowing shall be irrevocable by and binding on the
Borrowers. The Company, on behalf of itself and the other
Borrowers shall be entitled to borrow Revolving Loans in a
minimum principal amount of $100,000 and integral multiples of
$50,000 (or the remaining amount of the Revolving Credit
Committed Amount, if less) and shall be entitled to borrow Base
Rate Loans or Eurodollar Loans, or a combination thereof, as the
Borrowers may request; provided, that no more than six (6)
Eurodollar Loans (including Term Loans which are Eurodollar
Loans) shall be outstanding hereunder at any one time; and
provided, further, that Eurodollar Loans shall be in minimum
principal amounts of $1,000,000 and integral multiples of
$1,000,000. Revolving Loans may be repaid and reborrowed in
accordance with the provisions hereof.
The Agent shall give to each Lender prompt notice (but in no event
later than 2:00 p.m. on the date of the Agent's receipt of notice from
the Borrowers) of each Notice of Borrowing by telecopy, telex or cable
(other than any Notice of Borrowing which will be funded by the Agent
in accordance with subsection (d)(ii) below). No later than 3:00 p.m.
on the date on which a borrowing is requested to be made pursuant to
the applicable Notice of Borrowing, each Lender will make available to
the Agent at the address of the Agent set forth on the signature pages
hereto, in immediately available funds, its Revolving Credit
Commitment Percentage of such borrowing requested to be made. Unless
the Agent shall have been notified by any Lender prior to the date of
borrowing that such Lender does not intend to make available to the
Agent its portion of the borrowing to be made on such date, the Agent
may assume that such Lender will make such amount available to the
Agent at the end of the Settlement Period and the Agent may, in
reliance upon such
47
assumption, make available the amount of the borrowing to be
provided by such Lender. Upon fulfillment of the conditions set
forth in Article V hereof for such borrowing, the Agent will
make such funds available to the Borrowers at the account
specified by the Borrowers in such Notice of Borrowing.
(ii) Because the Borrowers anticipate requesting borrowings of
Revolving Loans on a daily basis and repaying Revolving Loans on a
daily basis through the collection of Accounts and the proceeds of
other Collateral, resulting in the amount of outstanding Revolving
Loans fluctuating from day to day, in order to administer the
Revolving Loans in an efficient manner and to minimize the transfer of
funds between the Agent and the Lenders, the Lenders hereby instruct
the Agent, and the Agent may (but is not obligated to) (A) make
available, on behalf of the Lenders, the full amount of all Revolving
Loans requested by the Borrowers not to exceed $10,000,000 in the
aggregate at any one time outstanding without requiring that the
Borrowers give the Agent a Notice of Borrowing with respect to such
borrowing and without giving each Lender prior notice of the proposed
borrowing, of such Lender's Revolving Credit Commitment Percentage
thereof and the other matters covered by the Notice of Borrowing and
(B) if the Agent has made any such amounts available as provided in
clause (A), upon repayment of Revolving Loans by the Borrowers, apply
such amounts repaid directly to the amounts made available by the
Agent in accordance with clause (A) and not yet settled as described
below; provided, that the Agent shall not advance funds as described
in clause (A) above if the Agent has actually received prior to such
borrowing (1) an officers' certificate from the Company or any other
Borrower pursuant to and in accordance with Section 7.1(h) that a
Default or Event of Default is in existence or (2) a Notice of
Borrowing from any Borrower wherein the certification provided therein
states that the conditions to the making of the requested Revolving
Loans have not been satisfied or (3) a written notice from any Lender
that the conditions to such borrowing have not been satisfied, which
officers' certificate, Notice of Borrowing or notice, in each case,
shall not have been rescinded. If the Agent advances Revolving Loans
on behalf of the Lenders, as provided in the immediately preceding
sentence, the amount of outstanding Revolving Loans and each Lender's
Revolving Credit Commitment Percentage thereof shall be computed
weekly rather than daily and shall be adjusted upward or downward on
the basis of the amount of outstanding Revolving Loans as of 5:00 p.m.
on the Business Day immediately preceding the date of each
computation; provided, however, that the Agent retains the absolute
right at any time or from time to time to make the aforedescribed
adjustments at intervals more frequent than weekly. The Agent shall
deliver to each of the Lenders after the end of each week, or such
lesser period or periods as the Agent shall determine, a summary
statement of the amount of outstanding Revolving Loans for such period
(such week or lesser period or periods being hereafter referred to as
a "Settlement Period"). If the summary statement is sent by the Agent
and received by the Lenders
34
48
prior to 12:00 Noon on any Business Day each Lender shall make
the transfers described in the next succeeding sentence no later
than 3:00 p.m. on the day such summary statement was sent; and
if such summary statement is sent by the Agent and received by
the Lenders after 12:00 Noon on any Business Day, each Lender
shall make such transfers no later than 3:00 p.m. on the next
succeeding Business Day. If in any Settlement Period, the
amount of a Lender's Revolving Credit Commitment Percentage of
the Revolving Loans is in excess of the amount of Revolving
Loans actually funded by such Lender, such Lender shall
forthwith (but in no event later than the time set forth in the
next preceding sentence) transfer to the Agent by wire transfer
in immediately available funds the amount of such excess; and,
on the other hand, if the amount of a Lender's Revolving Credit
Commitment Percentage of the Revolving Loans in any Settlement
Period is less than the amount of Revolving Loans actually
funded by such Lender, the Agent shall forthwith transfer to
such Lender by wire transfer in immediately available funds the
amount of such difference. The obligation of each of the
Lenders to transfer such funds shall be irrevocable and
unconditional and without recourse to or warranty by the Agent.
Each of the Agent and the Lenders agree to xxxx their respective
books and records at the end of each Settlement Period to show
at all times the dollar amount of their respective Revolving
Credit Commitment Percentages of the outstanding Revolving
Loans. Because the Agent on behalf of the Lenders may be
advancing and/or may be repaid Revolving Loans prior to the time
when the Lenders will actually advance and/or be repaid
Revolving Loans, interest with respect to Revolving Loans shall
be allocated by the Agent to each Lender (including the Agent)
in accordance with the amount of Revolving Loans actually
advanced by and repaid to each Lender (including the Agent)
during each Settlement Period and shall accrue from and
including the date such Revolving Loans are advanced by the
Agent to but excluding the date such Revolving Loans are repaid
by the Borrowers in accordance with Section 2.4 or actually
settled by the applicable Lender as described in this Section
2.1(d)(ii). All such Revolving Loans shall be made as Base Rate
Loans.
(iii) If the amounts described in subsection (d)(i) or (d)(ii) of this
Section 2.1 are not in fact made available to the Agent by a Lender
(such Lender being hereinafter referred to as a "Defaulting Lender")
and the Agent has made such amount available to the Borrowers, the
Agent shall be entitled to recover such corresponding amount on demand
from such Defaulting Lender. If such Defaulting Lender does not pay
such corresponding amount forthwith upon the Agent's demand therefor,
the Agent shall promptly notify the Borrowers and the Borrowers shall
immediately (but in no event later than five Business Days after such
demand) repay such corresponding amount to the Agent. The Agent shall
also be entitled to recover from such Defaulting Lender and the
Borrowers, (A) interest on such corresponding amount in respect of
each day from the date such corresponding amount was made available by
the Agent to the Borrowers to the date such corresponding amount is
recovered by the Agent, at a rate per annum equal to either (1) if
paid by such
49
Defaulting Lender, the overnight Federal Funds Rate or (2) if
paid by the Borrowers, the then applicable rate of interest,
calculated in accordance with Section 4.1 hereof, plus (B) in
each case, an amount equal to any costs (including legal
expenses) and losses incurred as a result of the failure of such
Defaulting Lender to provide such amount as provided in this
Credit Agreement. Nothing herein shall be deemed to relieve any
Lender from its obligation to fulfill its commitments hereunder
or to prejudice any rights which the Borrowers may have against
any Lender as a result of any default by such Lender hereunder,
including, without limitation, the right of the Borrowers to
seek reimbursement from any Defaulting Lender for any amounts
paid by the Borrowers under clause (B) above on account of such
Defaulting Lender's default.
(iv) The failure of any Lender to make the Revolving Loan to be
made by it as part of any borrowing shall not relieve any other
Lender of its obligation, if any, hereunder to make its
Revolving Loan on the date of such borrowing, but no Lender
shall be responsible for the failure of any other Lender to make
the Revolving Loan to be made by such other Lender on the date
of any borrowing.
(v) Each Lender shall be entitled to earn interest at the then
applicable rate of interest, calculated in accordance with
Article IV hereof, on outstanding Revolving Loans which it has
funded to the Agent from the date such Lender funded such
Revolving Loan to, but excluding, the date on which such Lender
is repaid with respect to such Revolving Loan.
(vi) Notwithstanding the obligation of the Borrowers to send written
confirmation of a Notice of Borrowing made by telephone if and when
requested by the Agent, in the event that the Agent agrees to accept a
Notice of Borrowing made by telephone, such telephonic Notice of
Borrowing shall be binding on the Borrowers whether or not written
confirmation is sent by the Borrowers or requested by the Agent. The
Agent may act prior to the receipt of any requested written
confirmation, without any liability whatsoever, based upon telephonic
notice believed by the Agent in good faith to be from a Borrower or
its agents. The Agent's records of the terms of any telephonic
Notices of Borrowing shall be conclusive on the Borrowers in the
absence of gross negligence or willful misconduct on the part of the
Agent in connection therewith.
2.2 TERM LOANS.
(a) Term Loan Commitment. Subject to the terms and conditions hereof
and in reliance upon the representations and warranties set forth
herein each Lender severally agrees to make available to the
Borrowers on the Closing Date a term loan in Dollars (each a "Term
36
50
Loan"; collectively the "Term Loans") equal to such Lender's Term
Loan Commitment Percentage of the Term Loan Committed Amount for the
purposes hereinafter set forth. The Term Loans may consist of Base
Rate Loans or Eurodollar Loans, or a combination thereof, as the
Borrowers may request; provided, however, that no more than six (6)
Eurodollar Loans (including Revolving Loans which are Eurodollar
Loans) shall be outstanding hereunder at any time. For purposes
hereof, Eurodollar Loans with different Interest Periods shall be
considered as separate Eurodollar Loans, even if they begin on the
same date, although borrowings, extensions and conversions may, in
accordance with the provisions hereof, be combined at the end of
existing Interest Periods to constitute a new Eurodollar Loan with a
single Interest Period. Amounts repaid on the Term Loans may not be
reborrowed.
(b) Borrowing Procedures. The full amount of the Term Loans shall be
disbursed on the Closing Date as Base Rate Loans (subject, in all
events, to the closing conditions contained in Article V). Each
Lender shall make its Term Loan Commitment Percentage of the Term
Loan Committed Amount available to the Agent for the account of the
Borrower at the office of the Agent specified in Section 14.5, or at
such other office as the Agent may designate in writing, by 1:00 P.M.
on the Closing Date in Dollars and in funds immediately available to
the Agent. The Term Loan Commitments of the Lenders shall
automatically terminate at the close of business on the Closing Date.
(c) Minimum Amounts. Each Eurodollar Loan or Base Rate Loan that is
part of the Term Loans shall be in an aggregate principal amount that
is not less than $3,000,000 and integral multiples of $1,000,000 (or
the then remaining principal balance of the Term Loans, if less).
(d) Repayment of Term Loans. The principal amount of the Term Loans
shall be repaid in sixteen (16) consecutive quarterly installments as
follows, unless accelerated sooner pursuant to Section 11.2:
51
Principal Amortization Term Loan Principal
Payment Dates Amortization Payment
------------------------- ------------------------
September 1, 1997 $625,000
December 1, 1997 625,000
March 1, 1998 625,000
June 1, 1998 625,000
September 1, 1998 875,000
December 1, 1998 875,000
March 1, 1999 875,000
June 1, 1999 875,000
September 1, 1999 1,125,000
December 1, 1999 1,125,000
March 1, 2000 1,125,000
June 1, 2000 1,125,000
September 1, 2000 1,125,000
December 1, 2000 1,125,000
March 1, 2001 1,125,000
June 1, 2001 1,125,000
========================
TOTAL $15,000,000
(e) Term Notes. The obligations to repay the Term Loans and to pay
interest thereon shall be evidenced by separate promissory notes of
the Borrowers to each Lender in substantially the form of Exhibit G-2
attached hereto (the "Term Loan Notes"), with appropriate insertions,
one Term Loan Note being payable to the order of each Lender in a
principal amount equal to such Lender's Term Loan Commitment and
representing the obligations of the Borrowers to pay such Lender the
amount of such Lender's Term Loan Commitment or, if less, the
aggregate unpaid principal amount of the Term Loan made by such
Lender hereunder, plus interest accrued thereon, as set forth herein.
The Borrowers irrevocably authorize each Lender to make or cause to
be made appropriate notations on its Term Loan Note, or on a record
pertaining thereon, reflecting Term Loans and repayments thereof.
The outstanding amount of the Term Loan set forth on such Lender's
Term Loan Note or record shall be prima facie evidence of the
principal amount thereof owing and unpaid to such Lender, but the
failure to make such notation or record, or any error in such
notation or record shall not limit or otherwise affect the
obligations of the Borrowers hereunder or under any Term Loan Note to
make payments of principal of or interest on any Term Loan Note when
due.
2.3 OPTIONAL AND MANDATORY PREPAYMENTS; REDUCTION OF COMMITMENTS.
38
52
(a) Voluntary Prepayments. The Borrowers shall have the right to
prepay Loans in whole or in part from time to time, but otherwise without
premium or penalty; provided, however, that (i) Loans that are Eurodollar
Loans may only be prepaid on three Business Days' prior written notice to
the Agent specifying the applicable Loans to be prepaid; (ii) any
prepayment of Loans that are Eurodollar Loans will be subject to Section
4.10; (iii) each such partial prepayment of Loans shall be in a minimum
principal amount of $1,000,000 and integral multiples of $1,000,000.
Subject to the foregoing terms, amounts prepaid under this Section 2.3(a)
shall be applied first to Revolving Loans and then to the Term Loans.
Prepayments on Revolving Loans shall be applied first to Base Rate Loans
and then to Eurodollar Loans in direct order of Interest Period maturities.
Prepayments on Term Loans shall be applied to the remaining Principal
Amortization Payments thereof in the inverse order of maturity thereof.
(b) Mandatory Prepayments.
(i) Revolving Credit Committed Amount. If at any time, the sum
of the aggregate principal amount of outstanding Revolving Loans
plus Letter of Credit Obligations outstanding shall exceed the
lesser of (A) the Revolving Credit Committed Amount and (B) the
Borrowing Base, the Borrowers immediately shall prepay the
Revolving Loans and (after all Revolving Loans have been repaid)
cash collateralize the Letter of Credit Obligations, in an
amount sufficient to eliminate such excess.
(ii) Excess Cash Flow. Within ninety (90) days after the end of
each fiscal year (commencing with the fiscal year ending
December 31, 1997), the Borrowers shall prepay the Loans in an
amount equal to the lesser of (x) 25% of the Excess Cash Flow
earned during such prior fiscal year and (y) $1,000,000. Any
payments of Excess Cash Flow shall be applied as set forth in
clause (iv) below.
(iii) Asset Dispositions. Promptly and in any event within five
(5) days following the occurrence of any Asset Disposition, the
Borrowers shall prepay the Loans in an aggregate amount equal to
the Net Cash Proceeds of the related Asset Disposition. Such
prepayment shall be applied as set forth in clause (iv) below.
(iv) Application of Mandatory Prepayments. All amounts required
to be paid pursuant to this Section 2.3(b) shall be applied as
follows: (A) with respect to all amounts prepaid pursuant to
Section 2.3(b)(i), to Revolving Loans and (after all Revolving
Loans have been repaid) to a cash collateral account in respect
of Letter of Credit Obligations and (B) with respect to all
amounts prepaid pursuant to Section 2.3(b)(ii) or (iii), (1)
first to the Term Loans to be applied pro rata to the remaining
Principal Amortization Payments thereof and (2) second to the
Revolving Loans and (after all Revolving Loans have been repaid)
to a cash collateral account in respect of Letter of Credit
Obligations. Within the parameters of the applications set
forth above for Revolving Loans, prepayments shall be applied
first to Base Rate Loans and then to
53
Eurodollar Loans in direct order of Interest Period maturities.
All prepayments under this Section 2.3(b) shall be subject to
Section 4.10.
(c) Voluntary Reductions. The Borrowers may from time to time
permanently reduce or terminate the Revolving Credit Committed Amount
in whole or in part (in minimum aggregate amounts of $5,000,000 or in
integral multiples of $5,000,000 in excess thereof (or, if less, the
full remaining amount of the then applicable Revolving Credit
Committed Amount)) upon three Business Days' prior written notice to
the Agent; provided, however, no such termination or reduction shall
be made which would cause the aggregate principal amount of
outstanding Revolving Loans plus Letter of Credit Obligations
outstanding to exceed the lesser of (A) the Revolving Credit
Committed Amount and (B) the Borrowing Base, unless, concurrently
with such termination or reduction, the Revolving Loans are repaid to
the extent necessary to eliminate such excess. The Agent shall
promptly notify each affected Lender of receipt by the Agent of any
notice from the Borrowers pursuant to this Section 2.3(c).
(d) Maturity Date. The Revolving Commitments of the Lenders and the
Letter of Credit Commitment of the Issuing Bank shall automatically
terminate on the Maturity Date.
(e) General. The Borrowers shall pay to the Agent for the account of
the Lenders in accordance with the terms of Section 4.3, on the date
of each termination or reduction of the Revolving Credit Committed
Amount, the Unused Line Fee accrued through the date of such
termination or reduction on the amount of the Revolving Credit
Committed Amount so terminated or reduced.
2.4 PAYMENTS AND COMPUTATIONS; CASH MANAGEMENT.
(a) Payments and Computations. The Borrowers shall make each payment
hereunder and under the Notes not later than 2:00 p.m. on the day
when due. Payments made by the Borrowers shall be in Dollars to the
Agent at its address referred to in Section 14.5 hereof in
immediately available funds. Payments made with respect to the
Revolving Loans shall be applied to repay Revolving Loans consisting
of Base Rate Loans first and then Revolving Loans consisting of
Eurodollar Loans. As soon as practicable after the Agent receives
payment from the Borrowers, but in no event later than one Business
Day after such payment has been made, subject to Section 2.1(d)(ii),
the Agent will cause to be distributed like
funds relating to the payment of principal, interest, or Fees (other
than amounts payable to the Agent to reimburse the Agent and the
Issuing Bank for fees and expenses payable solely to them pursuant to
Article IV hereof) or expenses payable to the Agent and the Lenders
in accordance with Section 14.8 hereof ratably to the Lenders, and
like funds relating to the payment of any other amounts payable to
such Lender, in each case to be distributed and applied in accordance
with the terms of subsection (b) or (c) of this Section 2.4. The
Borrowers' obligations to the Lenders with respect to such payments
shall be discharged by making such payments to the Agent pursuant to
this Section 2.4(a) or if not timely paid or
40
54
any Event of Default then exists, may be added to the principal
amount of the Revolving Loans outstanding.
(b) Cash Management. Unless a Cash Management Event shall have
occurred, the Borrowers shall be permitted to receive directly for
their own account all payments or other remittances of Accounts of
the Borrowers and other proceeds of the Collateral. Upon the
occurrence of a Cash Management Event, the Agent may in its sole
discretion give to the Borrowers and the Lockbox Banks (as defined
hereinafter) a written payment direction notice (a "Payment Direction
Notice") (which notice in the case of an Event of Default described
in Section 11.1(e) or (f) shall be deemed given to the Borrowers
without any further act by the Agent or any Lender) directing that
(x) the Borrowers, individually or through the Company, each (A)
establish and maintain lockboxes (the "Lockboxes") with financial
institutions, including First Union, selected by the Company and
approved by the Agent (the "Lockbox Banks") and (B) instruct all
account debtors on the Accounts of each Borrower to remit all
payments to its respective Lockboxes and (y) all such payments or
other remittances received in the Lockboxes be deposited by the
Lockbox Banks into the Lockbox Accounts (as defined hereinafter)
pursuant to the terms of the Lockbox Agreements (as defined
hereinafter). Each Borrower, individually or through the Company,
the Agent and each Lockbox Bank shall enter into three party
agreements in the form of Exhibit I hereto (the "Lockbox
Agreements"), providing, among other things, for the following:
(i) The Borrowers, individually or through the Company,
will open and establish for the benefit of the Agent on
behalf of the Lenders an account at each Lockbox Bank (each
a "Lockbox Account"). Notwithstanding the foregoing, in
lieu of establishing a Lockbox Account with First Union,
the FUCC Account will serve as the Borrowers' Lockbox
Account with respect to the Lockboxes opened with First
Union.
(ii) All receipts held in the Lockboxes shall be remitted
daily to the appropriate Lockbox Account or the FUCC
Account, as applicable. Upon the terms and subject to the
conditions set forth in the Lockbox Agreements, all amounts
held in the Lockbox Accounts with Lockbox Banks other than
First Union shall be deposited daily into the FUCC Account.
(iii) All good funds deposited into the FUCC Account on any
Business Day shall be applied by the Agent on such Business
Day to the payment of the Obligations. All amounts
received directly by the Borrowers from any account debtor,
in addition to all other cash received from any other
source including but not limited to proceeds from asset
sales and judgments, shall be held in trust by the
Borrowers and promptly deposited into the applicable
Lockbox Account (as defined below) or, if made by wire
transfer, directly to the FUCC Account.
55
(iv) All funds deposited into the FUCC Account shall
immediately become the property of the Agent and each of
the Borrowers shall obtain the agreement by the Lockbox
Banks to waive any offset rights against the funds so
deposited. The Agent assumes no responsibility for the
Lockbox arrangements, including without limitation, any
claim of accord and satisfaction or release with respect to
deposits accepted by the Lockbox Banks thereunder.
(v) The Borrowers may close Lockboxes and/or open new
lockboxes with the prior written consent of the Agent and
subject to prior execution and delivery to the Agent of
lockbox agreements consistent with the provisions of this
Section 2.4(b) and in form and substance satisfactory to
the Agent and its counsel.
(c) The Borrowers hereby authorize each Lender to charge from time to
time against any or all of the Borrowers' accounts with such Lender
any of the Obligations which are then due and payable. Each Lender
receiving any payment as a result of charging any such account shall
promptly notify the Agent thereof and make such arrangements as the
Agent shall request to share the benefit thereof in accordance with
Section 2.8 hereof.
(d) Interest shall accrue from and include the date of borrowing, but
exclude the date of payment. Except as expressly provided otherwise
herein with respect to Eurodollar Loans, any payments falling due
under this Credit Agreement on a day other than a Business Day shall
be due and payable on the next succeeding Business Day and shall
accrue interest at the applicable interest rate provided for in this
Credit Agreement to but excluding such Business Day. Except as
expressly provided otherwise herein, all computations of interest and
fees shall be made on the basis of actual number of days elapsed over
a year of 360 days.
2.5 MAINTENANCE OF ACCOUNT.
The Agent shall maintain an account on its books in the name of the
Borrowers in which the Borrowers will be charged with all loans and
advances made by the Lenders to the Borrowers or for the Borrowers'
account, including the Revolving Loans, the Term Loans, the Letter of
Credit Obligations and any other Obligations, including any and all costs,
expenses and reasonable attorney's fees which the Agent may incur,
including, without limitation, in connection with the exercise by or for
the Lenders of any of the rights or powers herein conferred upon the Agent
(other than in connection with any assignments or participations by any
Lender) or in the prosecution or defense of any action or proceeding by or
against the Borrowers or the Lenders concerning any matter arising out of,
connected with, or relating to this Credit Agreement or the Accounts, or
any Obligations owing to the Lenders by the Borrowers. The Borrowers will
be credited in accordance with Section 2.4(b) above, with all amounts
received by the Lenders from the Borrowers or from
42
56
others for the Borrowers' account, including, as above set forth, all
amounts received by the Agent in payment of Accounts. In no event shall
prior recourse to any Accounts or other Collateral be a prerequisite to
the Agent's right to demand payment of any Obligation upon its maturity.
Further, it is understood that the Agent shall have no obligation
whatsoever to perform in any respect any of the Borrowers' contracts or
obligations relating to the Accounts.
2.6 STATEMENT OF ACCOUNT.
After the end of each month the Agent shall send the Borrowers a statement
showing the accounting for the charges, loans, advances and other
transactions occurring between the Lenders and the Borrowers during that
month. The monthly statements shall be deemed correct and binding upon
the Borrowers and shall constitute an account stated between the Borrowers
and the Lenders unless the Agent receives a written statement of the
Borrowers' exceptions within thirty (30) days after same is mailed to the
Borrowers.
2.7 TAXES.
(a) Any and all payments by the Borrowers hereunder or under the Notes
to or for the benefit of any Lender shall be made, in accordance with
Section 2.4 hereof, free and clear of and without deduction for any and all
present or future Taxes, deductions, charges or withholdings and all
liabilities with respect thereto, excluding, in the case of each such
Lender and the Agent, Taxes imposed on or measured by the Agent's or any
Lender's net income or receipts (any such excluded Taxes, collectively
"Excluded Taxes"). If any Borrower shall be required by law to deduct any
Taxes (other than Excluded Taxes) from or in respect of any sum payable
hereunder or under any Note to or for the benefit of any Lender or the
Agent, (i) the sum payable shall be increased as may be necessary so that
after making all required deductions of Taxes (including deductions of
Taxes applicable to additional sums payable under this Section 2.7) such
Lender or the Agent, as the case may be, receives an amount equal to the
sum it would have received had no such deductions been made, (ii) such
Borrower shall make such deductions and (iii) such Borrower shall pay the
full amount so deducted to the relevant taxation authority or other
authority in accordance with applicable law; provided, however, that such
Borrower shall be under no obligation to increase the sum payable to any
Lender not organized under the laws of the United States or a state thereof
(a "Foreign Lender") by an amount equal to the amount of the United States
Tax required to be withheld under United States law from the sums paid to
such Foreign Lender, if such withholding is caused by the failure of such
Foreign Lender to be engaged in the active conduct of a trade or business
in the United States or all amounts of interest and fees to be paid to such
Foreign Lender hereunder are not effectively connected with such trade or
business within the meaning of United States Treasury Regulation
1.1441-4(a).
(b) Each Foreign Lender agrees that it will deliver to the Borrowers
and the Agent (i) two duly completed copies of United States Internal
Revenue Service Form 1001 or 4224 or successor applicable form, as
the case may be, and (ii) an Internal Revenue Service Form W-8 or W-9
or successor applicable form, together with any other certificate or
statement of
57
exemption required under the Code or regulations issued thereunder.
Each such Lender also agrees to deliver to the Borrowers and the
Agent two further copies of the said Form 1001 or 4224 and Form W-8
or W-9, or successor applicable forms or other manner of
certification, as the case may be, on or before the date that any
such form expires or becomes obsolete or after the occurrence of any
event requiring a change in the most recent form previously delivered
by it to the Borrowers, and such extensions or renewals thereof as
may reasonably be requested by the Borrowers or the Agent, unless in
any such case an event (including, without limitation, any change in
treaty, law or regulation) has occurred prior to the date on which
any such delivery would otherwise be required which renders all such
forms inapplicable or which would prevent such Lender from duly
completing and delivering any such form with respect to it and such
Lender so advises the Borrowers and the Agent. Such Lender shall
certify (A) in the case of a Form 1001 or 4224, that it is entitled
to receive payments under this Credit Agreement without deduction or
withholding of any United States federal income taxes and (B) in the
case of a Form W-8 or W-9, that it is entitled to an exemption from
United States backup withholding tax.
(c) The Borrowers agree to pay any present or future stamp,
documentary, privilege, intangible or similar Taxes or any other
excise or property Taxes, charges or similar levies that arise at any
time or from time to time (other than Excluded Taxes) (i) from any
payment made under any and all Credit Documents, (ii) from the
transfer of the rights of any Lender under any Credit Documents to
any other Lender or Lenders or (iii) from the execution or delivery
by any Borrower of, or from the filing or recording or maintenance
of, or otherwise with respect to, any and all Credit Documents
(hereinafter referred to as "Other Taxes").
(d) The Borrowers will indemnify each Lender and the Agent for the full
amount of Taxes described in Section 2.7(a) (including, without limitation
and without duplication, any Taxes imposed by any jurisdiction on amounts
payable under this Section 2.7), subject to (i) the exclusion set out in
the first sentence of Section 2.7(a), (ii) the provisions of Section
2.7(b), and (iii) the provisions of the proviso set forth in Section
2.7(a), and will indemnify each Lender and the Agent for the full amount of
Other Taxes (including, without limitation and without duplication, any
Taxes imposed by any jurisdiction on amounts payable under this Section
2.7), paid by such Lender or the Agent (on its own behalf or on behalf of
any Lender), as the case may be, in respect of payments made or to be made
hereunder, and any liability (including penalties, interest and expenses)
arising solely therefrom or with respect thereto, whether or not such Taxes
described in Section 2.7(a) or Other Taxes were correctly or legally
asserted. Payment of this indemnification shall be made within 30 days
from the date such Lender or the Agent, as the case may be, makes written
demand therefor.
(e) Within 30 days after the date of any payment of Taxes described
in Section 2.7(a) or Other Taxes, the applicable Borrower shall
furnish to the Agent, at its address
44
58
referred to in Section 14.5 hereof, the original or certified copy of
a receipt evidencing payment thereof.
(f) Without prejudice to the survival of any other agreement of the
Borrowers hereunder, the agreements and obligations of the Borrowers
contained in this Section 2.7 shall survive the payment in full of
all Obligations hereunder and under the Notes.
2.8 SHARING OF PAYMENTS.
If any Lender shall obtain any payment (whether voluntary, involuntary,
through the exercise of any right of set-off or otherwise) on account of
the Term Loans or Revolving Loans made by it or its participation in
Letters of Credit in excess of its pro rata share of such payment as
provided for in this Credit Agreement, such Lender shall forthwith
purchase from the other Lenders such participations in the Term Loans and
Revolving Loans made by them or in their participation in Letters of
Credit as shall be necessary to cause such purchasing Lender to share the
excess payment accruing all Lenders in accordance with their respective
ratable shares as provided for in this Credit Agreement; provided,
however, that if all or any portion of such excess is thereafter recovered
from such purchasing Lender, such purchase from each Lender shall be
rescinded and each such Lender shall repay to the purchasing Lender the
purchase price to the extent of such recovery together with an amount
equal to such Lender's ratable share (according to the proportion of (i)
the amount of such Lender's required repayment to (ii) the total amount so
recovered from the purchasing Lender) or any interest or other amount paid
or payable by the purchasing Lender in respect to the total amount so
recovered. The Borrowers agree that any Lender so purchasing a
participation from another Lender pursuant to this Section 2.8 may, to the
fullest extent permitted by law, exercise all of its rights of payment
(including the right of set-off) with respect to such participation as
fully as if such Lender were the direct creditor of the Borrowers in the
amount of such participation.
2.9 PRO RATA TREATMENT.
Each Loan, each payment or prepayment of principal of any Loan or reimbursement
obligations arising from drawings under Letters of Credit, each payment of
interest on the Loans, each payment of the Unused Line Fee, each payment of the
Standby Letter of Credit Fee, each reduction of the Revolving Credit Commitment
and each conversion or extension of any Loan, shall be allocated pro rata among
the Lenders in accordance with the respective principal amounts of their
outstanding Loans and their participation interests in the Letters of Credit;
provided, however, that the foregoing fees payable hereunder to the Lenders
shall be allocated to each Lender based on such Lender's Revolving Credit
Commitment Percentage.
2.10 EXTENSIONS AND CONVERSIONS.
Subject to the terms of Article V hereof, the Borrowers shall have the
option, on any Business Day, to extend existing Eurodollar Loans into a
subsequent permissible Interest Period, to convert Base Rate Loans into
Eurodollar Loans, or to convert Eurodollar Loans into Base Rate Loans;
provided, however, that (i) except as provided in Section 4.10, Eurodollar
Loans may be converted into Base Rate Loans only on the last day of the
Interest Period applicable thereto, (ii) Eurodollar
59
Loans may be extended, and Base Rate Loans may be converted into
Eurodollar Loans, only if no Default or Event of Default is in existence
on the date of extension or conversion, (iii) Revolving Loans extended as,
or converted into, Eurodollar Loans shall be subject to the terms of the
definition of "Interest Period" and shall be in such minimum amounts as
provided in, with respect to Revolving Loans, Section 2.1(d)(i) and with
respect to the Term Loan, Section 2.2(c), and (iv) no more than six (6)
separate Eurodollar Loans shall be outstanding hereunder at any time.
Each such extension or conversion shall be effected by the Borrowers by
giving a written notice in the form of Exhibit J hereto (a "Notice of
Extension/Conversion") (or telephone notice promptly confirmed in writing)
to the Agent prior to 12:00 noon on the Business Day of, in the case of
the conversion of a Eurodollar Loan into a Base Rate Loan, and on the
third Business Day prior to, in the case of the extension of a Eurodollar
Loan as, or conversion of a Base Rate Loan into, a Eurodollar Loan, the
date of the proposed extension or conversion, specifying the date of the
proposed extension or conversion, the Loans to be so extended or
converted, the types of Loans into which such Loans are to be converted
and, if appropriate, the applicable Interest Periods with respect thereto.
Each request for extension or conversion shall constitute a
representation and warranty by the Borrowers of the matters specified in
Article V hereof. In the event the Borrowers fail to request extension or
conversion of any Eurodollar Loan in accordance with this Section, or any
such conversion or extension is not permitted or required by this Section,
then such Loan shall be automatically converted into a Base Rate Loan at
the end of the Interest Period applicable thereto. The Agent shall give
each Lender notice as promptly as practicable of any such proposed
extension or conversion affecting any Loan.
ARTICLE III
LETTERS OF CREDIT
3.1 ISSUANCE.
Subject to the terms and conditions hereof and of the Letter of Credit
Documents, if any, and any other terms and conditions which the Issuing Bank may
reasonably require, the Lenders will participate in the issuance by the Issuing
Bank from time to time of such Letters of Credit in Dollars from the Closing
Date until the Maturity Date as the Borrowers may request, in a form acceptable
to the Issuing Bank; provided, however, that (i) the Letter of Credit
Obligations outstanding shall not at any time exceed FIVE HUNDRED THOUSAND
DOLLARS ($500,000) (the "Letter of Credit Committed Amount") and (ii) the sum of
the aggregate principal amount of outstanding Revolving Loans plus Letter of
Credit Obligations outstanding shall not at any time exceed the lesser of the
Revolving Credit Committed Amount or the Borrowing Base. No Letter of Credit
shall (x) have an original expiry date more than one year from the date of
issuance or renewal thereof or (y) as originally issued or as extended, have an
expiry date extending beyond the Maturity Date. Each Letter of Credit shall
comply with the related Letter of Credit Documents. The issuance and expiry date
of each Letter of Credit shall comply with the related Letter of Credit
Documents. The issuance and expiry date of each Letter of Credit shall be a
Business Day.
46
60
3.2 NOTICE AND REPORTS.
The request for the issuance of a Letter of Credit shall be submitted by
the Borrowers to the Issuing Bank at least three (3) Business Days prior
to the requested date of issuance. The Issuing Bank will, upon request,
disseminate to each of the Lenders a detailed report specifying the
Letters of Credit which are then issued and outstanding and any activity
with respect thereto which may have occurred since the date of the prior
report, and including therein, among other things, the beneficiary, the
face amount and the expiry date as well as any payment or expirations
which may have occurred.
3.3 PARTICIPATION.
Each Lender, upon issuance of a Letter of Credit, shall be deemed to have
purchased without recourse a risk participation from the Issuing Bank in such
Letter of Credit and the obligations arising thereunder, in each case in an
amount equal to its Revolving Credit Commitment Percentage of 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 Bank therefor
and discharge when due, its Revolving Credit 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 Bank has not been reimbursed as required hereunder or under any
such Letter of Credit, each such Lender shall pay to the Issuing Bank its
Revolving Credit Commitment Percentage of such unreimbursed drawing in same day
funds on the day of notification by the Issuing Bank of an unreimbursed drawing
pursuant to the provisions of Section 3.4 hereof. The obligation of each Lender
to so reimburse the Issuing Bank 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 Borrowers to reimburse the Issuing Bank under any
Letter of Credit, together with interest as hereinafter provided.
3.4 REIMBURSEMENT.
In the event of any drawing under any Letter of Credit, the Issuing Bank
will promptly notify the Borrowers. Unless the Borrowers shall
immediately notify the Issuing Bank that the Borrowers intend to otherwise
reimburse the Issuing Bank for such drawing, the Borrowers shall be deemed
to have requested that the Lenders make a Revolving Loan in the amount of
the drawing as provided in Section 3.5 hereof on the related Letter of
Credit, the proceeds of which will be used to satisfy the related
reimbursement obligations. The Borrowers promise to reimburse the Issuing
Bank on the day of drawing under any Letter of Credit (either with the
proceeds of a Revolving Loan obtained hereunder or otherwise) in same day
funds. If the Borrowers shall fail to reimburse the Issuing Bank as
provided hereinabove, the unreimbursed amount of such drawing shall bear
interest at a per annum rate equal to the Base Rate plus the sum of (i)
the Applicable Percentage for Base Rate Loans and (ii) two percent (2%).
The Borrowers' reimbursement obligations hereunder shall be absolute and
unconditional under all circumstances irrespective of any rights of
setoff, counterclaim or defense to payment the Borrowers may claim or have
against the Issuing Bank, the Agent, the Lenders, the beneficiary of the
Letter of Credit drawn upon or any other Person, including without
limitation any defense based on any failure of the Borrowers to receive
consideration or the legality, validity, regularity or unenforceability of
the Letter of Credit. The Issuing Bank will promptly notify the other
Lenders of the amount of any unreimbursed drawing and each Lender shall
promptly pay to the Agent for the account of the Issuing Bank in Dollars
and in immediately available funds, the amount of such Lender's Revolving
Credit Commitment Percentage of such unreimbursed drawing. Such payment
shall be made on the
61
Business Day such notice is received by such Lender from the Issuing Bank
if such notice is received at or before 2:00 P.M.; otherwise such payment
shall be made at or before 12:00 Noon on the Business Day next succeeding
the day such notice is received. If such Lender does not pay such amount
to the Issuing Bank in full upon such request, such Lender shall, on
demand, pay to the Agent for the account of the Issuing Bank interest on
the unpaid amount during the period from the date of such drawing until
such Lender pays such amount to the Issuing Bank in full at a rate per
annum equal to, if paid within two (2) Business Days of the date that such
Lender is required to make payments of such amount pursuant to the
preceding sentence, the Federal Funds Rate and thereafter at a rate equal
to the Base Rate. Each Lender's obligation to make such payment to the
Issuing Bank, and the right of the Issuing Bank to receive the same, shall
be absolute and unconditional, shall not be affected by any circumstance
whatsoever and without regard to the termination of this Credit Agreement
or the Commitments hereunder, the existence of a Default or Event of
Default or the acceleration of the obligations of the Borrowers hereunder
and shall be made without any offset, abatement, withholding or reduction
whatsoever. Simultaneously with the making of each such payment by a
Lender to the Issuing Bank, such Lender shall, automatically and without
any further action on the part of the Issuing Bank or such Lender, acquire
a participation in an amount equal to such payment (excluding the portion
of such payment constituting interest owing to the Issuing Bank) in the
related unreimbursed drawing portion of the Letter of Credit Obligation
and in the interest thereon and in the related Letter of Credit Documents,
and shall have a claim against the Borrowers with respect thereto.
3.5 REPAYMENT WITH REVOLVING LOANS.
On any day on which the Borrowers shall have requested, or been deemed to have
requested, a Revolving Loan advance to reimburse a drawing under a standby
Letter of Credit, the Agent shall give notice to the Lenders that a Revolving
Loan has been requested or deemed requested by the Borrowers to be made in
connection with a drawing under a Letter of Credit, in which case a Revolving
Loan advance comprised of Base Rate Loans (or Eurodollar Loans to the extent the
Borrowers have complied with the procedures of Section 2.1(d)(i) with respect
thereto) shall be immediately made to the Borrowers by all Lenders
(notwithstanding any termination of the Commitments pursuant to Section 11.2)
pro rata based on the respective Revolving Credit Commitment Percentages of the
Lenders (determined before giving effect to any termination of the Commitments
pursuant to Section 11.2) and the proceeds thereof shall be paid directly by the
Agent to the Issuing Bank for application to the respective Letter of Credit
Obligations. Each such Lender hereby irrevocably agrees to make its Revolving
Credit Commitment Percentage of each such Revolving Loan immediately upon any
such request or deemed request in the amount, in the manner and on the date
specified in the preceding sentence notwithstanding (i) the amount of such
borrowing may not comply with the minimum amount for advances of Revolving Loans
otherwise required hereunder, (ii) whether any conditions specified in Article V
are then satisfied, (iii) whether a Default or an Event of Default then exists,
(iv) failure for any such request or deemed request for Revolving Loan to be
made by the time otherwise required hereunder, (v) whether the date of such
borrowing is a date on which Revolving Loans are otherwise permitted to be made
hereunder or (vi) any termination of the Commitments relating thereto
immediately prior to or contemporaneously with such borrowing. In the event
that any Revolving Loan cannot for any reason be made on the date
48
62
otherwise required above (including, without limitation, as a result of
the commencement of a bankruptcy or insolvency proceeding with respect to
any Borrower), then each such Lender hereby agrees that it shall forthwith
purchase (as of the date such borrowing would otherwise have occurred, but
adjusted for any payments received from the Borrowers on or after such
date and prior to such purchase) from the Issuing Bank such participation
in the outstanding Letter of Credit Obligations as shall be necessary to
cause each such Lender to share in such Letter of Credit Obligations
ratably (based upon the respective Revolving Credit Commitment Percentages
of the Lenders (determined before giving effect to any termination of the
Commitments pursuant to Section 11.2)), provided, that at the time any
purchase of participation pursuant to this sentence is actually made, the
purchasing Lender shall be required to pay to the Issuing Bank, to the
extent not paid to the Issuing Bank by the Borrowers in accordance with
the terms of Section 3.4 hereof, interest on the principal amount of
participation purchased for each day from and including the day upon which
such borrowing would otherwise have occurred to but excluding the date of
payment for such participation, at the rate equal to, if paid within two
(2) Business Days of the date of the Revolving Loan advance, the Federal
Funds Rate, and thereafter at a rate equal to the Base Rate.
3.6 RENEWAL, EXTENSION.
The renewal or extension of any Letter of Credit shall, for purposes
hereof, be treated in all respects the same as the issuance of a new
Letter of Credit hereunder.
3.7 UNIFORM CUSTOMS AND PRACTICES.
The Issuing Bank may have the Letters of Credit be subject to The Uniform
Customs and Practice for Documentary Credits, as published as of the date
of issue by the International Chamber of Commerce (the "UCP"), in which
case the UCP may be incorporated therein and deemed in all respects to be
a part thereof.
3.8 INDEMNIFICATION; NATURE OF ISSUING BANK'S DUTIES.
(a) In addition to its other obligations under this Article III, the
Borrowers hereby agree to protect, indemnify, pay and save the Issuing Bank
harmless from and against any and all claims, demands, liabilities,
damages, losses, costs, charges and expenses (including reasonable
attorneys' fees) that the Issuing Bank may incur or be subject to as a
consequence, direct or indirect, of (A) the issuance of any Letter of
Credit or (B) the failure of the Issuing Bank 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 Borrowers and the Issuing Bank, the Borrowers
shall assume all risks of the acts, omissions or misuse of any Letter
of Credit by the beneficiary thereof. The Issuing Bank 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
63
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
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; (iv) 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 (v) for any consequences arising from causes beyond the
control of the Issuing Bank, including, without limitation, any
Government Acts. None of the above shall affect, impair, or prevent
the vesting of the Issuing Bank'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 Bank, 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 Bank under any resulting liability
to any Borrower. It is the intention of the parties that this Credit
Agreement shall be construed and applied to protect and indemnify the
Issuing Bank against any and all risks involved in the issuance of
the Letters of Credit, all of which risks are hereby assumed by the
Borrowers, including, without limitation, any and all Government
Acts. The Issuing Bank shall not, in any way, be liable for any
failure by the Issuing Bank 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 Bank.
(d) Nothing in this Section 3.8 is intended to limit the
reimbursement obligations of the Borrowers contained in Section 3.4
above. The obligations of the Borrowers under this Section 3.8 shall
survive the termination of this Credit Agreement. No act or omission
of any current or prior beneficiary of a Letter of Credit shall in
any way affect or impair the rights of the Issuing Bank to enforce
any right, power or benefit under this Credit Agreement.
(e) Notwithstanding anything to the contrary contained in this Section 3.8,
the Borrowers shall have no obligation to indemnify the Issuing Bank in
respect of any liability incurred by the Issuing Bank (i) arising solely
out of the gross negligence or willful misconduct of the Issuing Bank, as
determined by a court of competent jurisdiction, or (ii) caused by the
Issuing Bank's failure to pay under any Letter of Credit after presentation
to it of a request strictly complying with the terms and conditions of such
Letter of Credit, as determined by a court of competent jurisdiction,
unless such payment is prohibited by any law, regulation, court order or
decree.
3.9 RESPONSIBILITY OF ISSUING BANK.
It is expressly understood and agreed that the obligations of the Issuing
Bank hereunder to the Lenders are only those expressly set forth in this
Credit Agreement and that the Issuing Bank shall be entitled to assume
that the conditions precedent set forth in Articles III and V have been
satisfied unless it shall have acquired actual
50
64
knowledge that any such condition precedent has not been satisfied;
provided, however, that nothing set forth in this Article III shall be
deemed to prejudice the right of any Lender to recover from the Issuing
Bank any amounts made available by such Lender to the Issuing Bank
pursuant to this Article III in the event that it is determined by a court
of competent jurisdiction that the payment with respect to a Letter of
Credit constituted gross negligence or willful misconduct on the part of
the Issuing Bank.
3.10 CONFLICT WITH LETTER OF CREDIT DOCUMENTS.
In the event of any conflict between this Credit Agreement and any Letter
of Credit Document (including any letter of credit application), this
Credit Agreement shall control.
ARTICLE IV
INTEREST AND FEES
4.1 INTEREST ON LOANS.
Subject to the provisions of Section 4.2 hereof, interest on the Loans
shall be payable (a) for Base Rate Loans, monthly in arrears as of the end
of each calendar month and the interest rate shall be equal to the Base
Rate plus the Applicable Percentage on the outstanding amount of each such
Base Rate Loan (or if a Cash Management Event shall have occurred, with
respect to Base Rate Loans which are Revolving Loans, on the average
balances of the Base Rate Loans owing to the Lenders in the Borrowers'
Revolving Loan accounts at the close of business for each day during each
calendar month) and (b) for Eurodollar Loans, on the last day of the
applicable Interest Period (and with respect to any Eurodollar Loan with
an Interest Period of 6 months, on the date 3 months after the making of
such Eurodollar Loan) and the interest rate shall be equal to the
Eurodollar Rate plus the Applicable Percentage on the outstanding amount
of each such Eurodollar Loan. In the event of any change in the Base
Rate, the rate hereunder shall change, effective as of the day the Base
Rate changes. The interest rates hereunder shall be calculated based on a
360 day year for the actual number of days elapsed.
4.2 INTEREST AFTER EVENT OF DEFAULT.
Interest on any amount of matured principal under the Loans, and interest on the
amount of principal under the Loans outstanding as of the date an Event of
Default occurs, and at all times thereafter until the earlier of the date upon
which (a) all Obligations have been paid and satisfied in full or (b) such Event
of Default shall have been cured or waived, shall accrue at a rate equal to the
rate at which the Loans are then bearing interest pursuant to Section 4.1 above,
plus two percent (2%) and shall be payable on demand. In the event of any change
in said applicable interest rate, the rate hereunder shall change, effective as
of the day the applicable interest rate changes, so as to remain two percent
(2%) above the then applicable interest rate. Interest shall be payable on any
other amount due hereunder and shall accrue at the Base Rate, plus two percent
(2%) from the date due until paid in full. The rates hereunder shall be
calculated based on a 360 day year for the actual number of days elapsed.
65
4.3 UNUSED LINE FEE.
At the end of each calendar month the Borrowers shall pay to the Agent for
the benefit of the Lenders the Unused Line Fee due in respect of such
calendar month.
4.4 LENDERS' FEES/AGENT'S FEES.
On the Closing Date the Agent shall pay to each Lender its respective
Lender's Fees that are required to be paid on the Closing Date pursuant to
the terms of such Lender's fee letter with the Agent. The Borrowers shall
pay all fees required to be paid to the Agent under the Fee Letter at the
times and in the amounts set forth therein.
4.5 LETTER OF CREDIT FEES.
(a) Standby Letter of Credit Issuance Fee. In consideration of the
issuance of standby Letters of Credit hereunder, the Borrowers
promise to pay to the Agent for the account of each Lender a fee (the
"Standby Letter of Credit Fee") on such Lender's Revolving Credit
Commitment of the average daily maximum amount available to be drawn
under each such standby Letter of Credit computed at a per annum rate
for each day from the date of issuance to the date of expiration
equal to the Applicable Percentage for Eurodollar Loans. The Standby
Letter of Credit Fee will be payable monthly in arrears on the last
day of each calendar month.
(b) Issuing Bank Fees. In addition to the Standby Letter of Credit
Fee payable pursuant to clause (a) above, the Borrowers promise to
pay to the Issuing Bank for its own account without sharing by the
other Lenders the letter of credit fronting and negotiation fees
agreed to by the Borrowers and the Issuing Bank from time to time and
the customary charges from time to time of the Issuing Bank with
respect to the issuance, amendment, transfer, administration,
cancellation and conversion of, and drawings under, such Letters of
Credit (collectively, the "Issuing Bank Fees").
4.6 AUTHORIZATION TO CHARGE ACCOUNT.
The Borrowers hereby authorize the Agent to charge the Borrowers' Revolving Loan
accounts with the amount of all payments and fees due hereunder to the Lenders,
the Agent and the Issuing Bank as and when such payments become due. The
Borrowers confirm that any charges which the Agent may so make to the Borrowers'
Revolving Loan accounts as herein provided will be made as an accommodation to
the Borrowers and solely at the Agent's discretion.
4.7 INDEMNIFICATION IN CERTAIN EVENTS.
If after the Closing Date, either (a) any change in or in the
interpretation of any law or regulation is introduced (other than a change
in the rate of Excluded Taxes), including, without limitation, with
respect to reserve requirements, applicable to FUCC or any other banking
or financial institution from whom any of the Lenders borrow funds or
obtain credit (a "Funding Bank") or any of the Lenders, or (b) a Funding
Bank or any of the Lenders complies with any future guideline or request
from any central bank or other governmental authority or (c) a Funding
Bank or any of the Lenders determines that the adoption of any applicable
law, rule or regulation regarding capital adequacy, or any change therein,
or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable
52
66
agency charged with the interpretation or administration thereof has or
would have the effect described below, or a Funding Bank or any of the
Lenders complies with any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central
bank or comparable agency, and in the case of any event set forth in this
clause (iii), such adoption, change or compliance has or would have the
direct or indirect effect of reducing the rate of return on any of the
Lenders' capital as a consequence of its obligations hereunder to a level
below that which such Lender could have achieved but for such adoption,
change or compliance (taking into consideration the Funding Bank's or
Lenders' policies with respect to capital adequacy) by an amount deemed by
such Lender to be material, and the result of any of the foregoing events
described in clauses (a), (b) or (c) is or results in an increase in the
cost to any of the Lenders of funding or maintaining the Revolving Credit
Committed Amount, the Revolving Loans, the Letters of Credit or the Term
Loans then the Borrowers shall from time to time upon demand by the Agent,
pay to the Agent additional amounts sufficient to indemnify the Lenders
against such increased cost. A certificate as to the amount of such
increased cost showing the calculation therefor in reasonable detail shall
be submitted to the Borrowers by the Agent and shall be conclusive and
binding absent manifest error.
4.8 INABILITY TO DETERMINE INTEREST RATE.
If prior to the first day of any Interest Period, (a) the Agent shall have
determined in good faith (which determination shall be conclusive and binding
upon the Borrowers) that, by reason of circumstances affecting the relevant
market, adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate for such Interest Period, (b) the Agent has received notice from
the Required Lenders that the Eurodollar Rate determined or to be determined for
such Interest Period will not adequately and fairly reflect the cost to such
Lenders of making or maintaining their Eurodollar Loans during such Interest
Period, or (c) Dollar deposits in the principal amounts of the Eurodollar Loans
to which such Interest Period is to be applicable are not generally available in
the London interbank market, the Agent shall give telecopy or telephonic notice
thereof to the Borrowers and the Lenders as soon as practicable thereafter, and
will also give prompt written notice to the Borrowers when such conditions no
longer exist. If such notice is given (i) any Eurodollar Loans requested to be
made on the first day of such Interest Period shall be made as Base Rate Loans,
(ii) any Loans that were to have been converted on the first day of such
Interest Period to or continued as Eurodollar Loans shall be converted to or
continued as Base Rate Loans and (iii) each outstanding Eurodollar Loan shall be
converted, on the last day of the then-current Interest Period thereof, to Base
Rate Loans. Until such notice has been withdrawn by the Agent, no further
Eurodollar Loans shall be made or continued as such, nor shall the Borrowers
have the right to convert Base Rate Loans to Eurodollar Loans.
4.9 ILLEGALITY.
Notwithstanding any other provision herein, if the adoption of or any
change in any law, treaty, rule or regulation or final, non-appealable
determination of an arbitrator or a court or other governmental authority
or in the interpretation or application thereof occurring after the
Closing Date shall make it unlawful for any Lender to make or maintain
Eurodollar Loans as contemplated by this Credit Agreement, (a) such Lender
shall promptly give written notice of such circumstances to the Borrowers
and the Agent (which notice shall be withdrawn whenever such circumstances
no longer exist), (b) the commitment of such Lender hereunder to make
Eurodollar Loans, continue Eurodollar Loans as such and convert a Base
Rate Loan to Eurodollar Loans shall forthwith be canceled and, until such
time as it shall no longer be unlawful for such Lender to make or maintain
Eurodollar Loans, such Lender shall then have a commitment only to make a
Base Rate Loan when a Eurodollar Loan is requested and (c) such Lender's
Loans then outstanding as Eurodollar Loans, if any, shall be converted
automatically to Base Rate Loans on the respective last days of the then
current Interest Periods with respect to such Loans or within such earlier
period as required by law. If any such conversion of a Eurodollar Loan
occurs on a day which is not the last day of the then current Interest
Period with respect thereto, the Borrowers shall pay to such Lender such
amounts, if any, as may be required pursuant to Section 4.10 hereof.
4.10 FUNDING INDEMNITY.
67
The Borrowers, jointly and severally, promise to indemnify each Lender and
to hold each Lender harmless from any loss or expense which such Lender
may sustain or incur (other than through such Lender's gross negligence or
willful misconduct) as a consequence of (a) default by the Borrowers in
making a borrowing of, conversion into or extension of Eurodollar Loans
after the Borrowers have given a notice requesting the same in accordance
with the provisions of this Credit Agreement, (b) default by the Borrowers
in making any prepayment of a Eurodollar Loan after the Borrowers have
given a notice thereof in accordance with the provisions of this Credit
Agreement, and (c) the making of a prepayment of Eurodollar Loans on a day
which is not the last day of an Interest Period with respect thereto.
With respect to Loans that are Eurodollar Loans, such indemnification may
include an amount equal to the excess, if any, of (i) the amount of
interest which would have accrued on the amount so prepaid, or not so
borrowed, converted or extended, for the period from the date of such
prepayment or of such failure to borrow, convert or extend to the last day
of the applicable Interest Period (or, in the case of a failure to borrow,
convert or extend, the Interest Period that would have commenced on the
date of such failure) in each case at the applicable rate of interest for
such Eurodollar Loans provided for herein over (ii) the amount of interest
(as reasonably determined by such Lender) which would have accrued to such
Lender on such amount by placing such amount on deposit for a comparable
period with leading banks in the interbank Eurodollar market. This
covenant shall survive the termination of this Credit Agreement and the
payment of the Loans and all other amounts payable hereunder.
ARTICLE V
CONDITIONS PRECEDENT
The obligation of the Lenders to make the Term Loans or any Revolving
Loans or of the Issuing Bank to issue any Letter of Credit hereunder is
subject to the satisfaction of, or waiver of, immediately prior to or
concurrently with the making of such Term Loans, Revolving Loans or
issuance of such Letter of Credit, the following conditions precedent:
5.1 CLOSING CONDITIONS.
On or prior to the Closing Date, the Lenders shall have received each
of the documents, opinions and certificates set forth in the list of
Closing Conditions attached hereto as Schedule 1.1B and the conditions set
forth therein shall have been satisfied or waived.
5.2 MATERIAL ADVERSE CHANGE.
(a) No Material Adverse Change shall have occurred, (b) no occurrence
or event which is reasonably likely to have a Material Adverse Effect
shall have occurred and be continuing and (c) on or prior to the Closing
Date, there shall not have occurred a substantial impairment of the
financial markets generally which, in the opinion of the Lenders, has
materially and adversely affected the transactions contemplated hereby.
5.3 FEES.
On or prior to the Closing Date, the Lenders shall have received
payment in full of the Lenders' Fees.
54
68
5.4 REPRESENTATIONS AND WARRANTIES; NO DEFAULT.
On the date of the making of any Term Loan, any Revolving Loan or the
issuance of any Letter of Credit, both before and after giving effect
thereto and to the application of the proceeds therefrom, the following
statements shall be true to the satisfaction of the Agent (and each
request for a Term Loan, a Revolving Loan and request for a Letter of
Credit, and the acceptance by the Borrowers of the proceeds of such Term
Loan, Revolving Loan or issuance of such Letter of Credit, shall
constitute a representation and warranty by the Borrowers that on the date
of such Term Loan, Revolving Loan or issuance of such Letter of Credit
before and after giving effect thereto and to the application of the
proceeds therefrom, such statements are true): (a) the representations and
warranties contained in this Credit Agreement are true and correct in all
material respects on and as of the date of such Term Loan, Revolving Loan
or issuance of such Letter of Credit as though made on and as of such
date, except to the extent that such representations and warranties
expressly relate solely to an earlier date (in which case such
representations and warranties shall have been true and accurate on and as
of such earlier date); (b) no event has occurred and is continuing, or
would result from such Term Loan, Revolving Loan or issuance of such
Letter of Credit or the application of the proceeds thereof, which would
constitute a Default or an Event of Default under this Credit Agreement;
and (c) no Material Adverse Change, or development reasonably likely to
have a Material Adverse Effect shall have occurred and be continuing.
5.5 NOTICE OF BORROWING.
On the date of the making of any Revolving Loan, the Agent shall have
received a Notice of Borrowing to the extent such Notice of Borrowing is
required to be given with respect to the making of such Revolving Loan.
5.6 BORROWING BASE CERTIFICATE.
No Revolving Loans shall be made following a mandatory prepayment of
the Loans pursuant to Section 2.3(b)(ii) or (iii) unless and until the
Company shall have furnished to the Lenders a new Borrowing Base
Certificate evidencing sufficient availability under the Borrowing Base to
make such Revolving Loans.
5.7 ADDITIONAL DOCUMENTS.
On or prior to the Closing Date, the Borrowers shall have executed
and delivered to the Agent all documents which the Agent determines are
reasonably necessary to consummate the lending arrangements contemplated
hereby.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Credit Agreement
and the Issuing Bank to issue the Letters of Credit, and to make available
the credit facilities contemplated hereby, each Borrower hereby represents
and warrants to the Lenders and the Issuing Bank as of the Closing Date
and on the date of each extension of credit hereunder, as follows:
6.1 ORGANIZATION AND QUALIFICATION.
Such Borrower and each of its Subsidiaries (i) is a corporation duly
organized, validly existing and in good standing under the laws of the
state of its incorporation, (ii) has the power and authority to own its
properties and assets and to transact the businesses in which it is
presently, or proposes to be, engaged, and (iii) is duly qualified and is
authorized to do business and is in good standing in every jurisdiction in
which the failure to be so qualified could
69
reasonably be expected to have a Material Adverse Effect. Schedule 6.1 contains
a true, correct and complete list of all jurisdictions in which such Borrower
and its Subsidiaries are qualified to do business as a foreign corporation or
foreign limited liability company as of the Closing Date.
6.2 SOLVENCY.
The fair saleable value of such Borrower's assets, measured on a
going concern basis, exceeds all probable liabilities, including those to
be incurred pursuant to this Credit Agreement. Such Borrower (i) does not
have unreasonably small capital in relation to the business in which it is
or proposes to be engaged or (ii) has not incurred, and does not believe
that it will incur after giving effect to the transactions contemplated by
this Credit Agreement, debts beyond its ability to pay such debts as they
become due.
6.3 LIENS; INVENTORY.
There are no Liens in favor of third parties with respect to any of
the Collateral, including, without limitation, with respect to the
Inventory, wherever located, other than Permitted Liens. To the best of
such Borrower's knowledge, no lessor, warehouseman, filler, processor or
packer of such Borrower has granted any Lien with respect to the Inventory
maintained by such Borrower at the property of any such lessor,
warehousemen, filler, processor or packer. Upon the proper filing of
financing statements and the proper recordation of other applicable
documents with the appropriate filing or recordation offices in each of
the necessary jurisdictions, the security interests granted pursuant to
the Credit Documents constitute and shall at all times constitute valid
and enforceable first, prior and perfected Liens on the Collateral (other
than Permitted Liens). The Borrowers are or will be at the time
additional Collateral is acquired by them, the absolute owners of the
Collateral with full right to pledge, sell, consign, transfer and create a
Lien therein, free and clear of any and all Liens in favor of third
parties, except Permitted Liens.
6.4 NO CONFLICT.
The execution and delivery by such Borrower of this Credit Agreement and
each of the other Credit Documents executed and delivered in connection herewith
and the performance of the obligations of such Borrower hereunder and thereunder
and the consummation by such Borrower of the transactions contemplated hereby
and thereby: (i) are within the corporate powers of such Borrower; (ii) are duly
authorized by the Board of Directors or members of such Borrower and, if
necessary with respect to the Company, its stockholders; (iii) are not in
contravention of the terms of the articles or certificate of incorporation or
bylaws of such Borrower; (iv) are not in contravention of the terms of any
indenture, contract, lease, agreement instrument or other commitment to which
such Borrower is a party or by which such Borrower or any of its properties are
bound except for any contravention which could not reasonably be expected to
have a Material Adverse Effect; (v) do not require the consent, registration or
approval of any governmental entity or any other Person (except such as have
been duly obtained, made or given, and are in full force and effect); (vi) do
not contravene any statute, law, ordinance regulation, rule, order or other
governmental restriction applicable to or binding upon such Borrower except for
any contravention which could not reasonably be expected to have a Material
Adverse Effect; and (vii) will not, except as contemplated herein for the
benefit of the Agent on behalf of the Lenders, result in the imposition of any
Liens other than Permitted Liens upon any property of such Borrower under any
existing indenture, mortgage, deed of trust, loan or credit agreement or other
material agreement or instrument to which such Borrower is a party or by which
it or any of its property may be bound or affected.
6.5 ENFORCEABILITY.
The Credit Agreement and all of the other Credit Documents executed
and delivered in connection herewith are the legal, valid and binding
obligations of such Borrower, and with respect to those Credit Documents
executed and delivered by any Subsidiary, of each such Subsidiary, and are
enforceable against such Borrower and such Subsidiaries,
as the case may be, in accordance with their terms except as such
enforceability may be limited by (i) the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and (ii) general principles of
equity.
6.6 FINANCIAL DATA.
The Borrowers have furnished to the Agent and the Lenders the
following financial statements (the "Financials"): (a) the consolidated
balance sheets as of, and consolidated statements of income and cash flow
of the Borrowers and their predecessor corporations for, the fiscal year
ended December 31, 1996 prepared by the Company and certified by its chief
financial officer, (b) the consolidated and consolidating balance sheets
as of, and consolidated and consolidating statements of income and cash
flow of the Borrowers for, the four month period ending April 30, 1997
prepared by the Company and certified by its chief financial officer, (c)
the pro forma opening balance sheets for each of the Borrowers dated the
Closing Date giving effect to the Closing Date Acquisitions and the
transactions contemplated by the Closing Date Purchase Agreements and
reflecting estimated purchase price accounting adjustments, prepared by
the Company and certified by its chief financial officer (to be reviewed
by Price Waterhouse following the Closing Date) and (d) such other
information relating to the Borrowers or the Closing Date Acquisitions as
the Agent may reasonably require in connection with the structuring and
syndication of credit facilities of the type described herein. The
Financials are and the historical financial statements to be furnished to
the Lenders in accordance with Section 7.1 below will be in accordance
with the books and records of the Borrowers and their predecessor
corporations and fairly present in all material respects the financial
condition of each of the Borrowers and such predecessor corporations at
the dates thereof and the results of operations for the periods indicated
(subject, in the case of unaudited financial statements, to normal
year-end adjustments and the absence of footnote disclosures), and such
financial statements have been prepared in conformity with GAAP
consistently applied throughout the periods involved. Since the date of
the Financials, there have been no changes in the condition, financial or
otherwise, of any of the Borrowers as shown on the respective balance
sheets of each of the Borrowers described above, except (a) as
contemplated herein and (b) for changes in the ordinary course of business
(none of which individually or in the aggregate is a Material Adverse
Change).
6.7 LOCATIONS OF OFFICES, RECORDS AND INVENTORY.
The Borrowers' principal places of business and chief executive
offices are set forth in Schedule 6.7 hereto, and the books and records of
the Borrowers and all chattel paper and all records of accounts are
located at the principal places of business and chief executive offices of
the Borrowers. There is no jurisdiction in which any Borrower or any of
its Subsidiaries has any assets, equipment or Inventory (except for
vehicles, Rental Equipment under lease, Inventory in transit for
processing, or immaterial items) other than those jurisdictions listed on
Schedule 6.7 attached hereto. Attached hereto as Schedule 6.7 is a true,
correct and complete list of (i) the legal names and addresses of each
warehouseman, filler, processor and packer at which Inventory is stored,
(ii) the address of the chief executive offices of the Borrowers and each
of their Subsidiaries and (iii) the address of all offices where records
and books of account of the Borrowers and each of their Subsidiaries are
kept. None of the receipts received by any of the Borrowers from any
warehouseman, filler, processor or packer
56
70
states that the goods covered thereby are to be delivered to bearer or to
the order of a named person or to a named person and such named person's
assigns.
6.8 FICTITIOUS BUSINESS NAMES.
Neither such Borrower nor any of its Subsidiaries has used any
corporate or fictitious name during the five (5) years preceding the date
hereof, other than the corporate name shown on its or such Subsidiary's
Articles or Certificate of Incorporation and as set forth on Schedule 6.8.
6.9 SUBSIDIARIES.
The only direct or indirect Subsidiaries of the Borrowers are those
listed on Schedule 6.9 attached hereto. The Borrowers are the record and
beneficial owner of all of the shares of Capital Stock of each of the
Subsidiaries listed on Schedule 6.9 as being owned by the Borrowers, there
are no proxies, irrevocable or otherwise, with respect to such shares, and
no equity securities of any of such Subsidiaries are or may become
required to be issued by reason of any options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating
to, or securities or rights convertible into or exchangeable for, shares
of any Capital Stock of any of such Subsidiaries, and there are no
contracts, commitments, understandings or arrangements by which any of
such Subsidiaries is or may become bound to issue additional shares of its
Capital Stock or securities convertible into or exchangeable for such
shares. All of such shares so owned by the Borrowers are owned by them
free and clear of any Liens other than Permitted Liens.
6.10 NO JUDGMENTS OR LITIGATION.
Except as set forth on Schedule 6.10 hereto, no judgments, orders,
writs or decrees are outstanding against such Borrower or any of its
Subsidiaries nor is there now pending or, to the best of such Borrower's
knowledge after diligent inquiry, threatened any litigation, contested
claim, investigation, arbitration, or governmental proceeding by or
against such Borrower or any of its Subsidiaries except judgments and
pending or threatened litigation, contested claims, investigations,
arbitrations and governmental proceedings which could not reasonably be
expected to have a Material Adverse Effect.
6.11 NO DEFAULTS.
Neither such Borrower nor any of its Subsidiaries is in default under
any material term of any indenture, contract, lease, agreement, instrument
or other commitment to which any of them is a party or by which any of
them is bound. Such Borrower knows of no dispute regarding any indenture,
contract, lease, agreement, instrument or other commitment which could
reasonably be expected to have a Material Adverse Effect.
6.12 NO EMPLOYEE DISPUTES.
There are no controversies pending or, to the best of such Borrower's
knowledge after diligent inquiry, threatened between such Borrower or any
of its Subsidiaries and any of their respective employees, other than
employee grievances arising in the ordinary course of business which would
not, in the aggregate, have a Material Adverse Effect.
58
71
6.13 COMPLIANCE WITH LAW.
Neither such Borrower nor any of its Subsidiaries has violated or
failed to comply with any statute, law, ordinance, regulation, rule or
order of any foreign, federal, state or local government, or any other
governmental department or agency or any self regulatory organization, or
any judgment, decree or order of any court, applicable to its business or
operations except where the aggregate of all such violations or failures
to comply would not have a Material Adverse Effect. The conduct of the
business of such Borrower and each of its Subsidiaries is in conformity
with all securities, commodities, energy, public utility, zoning, building
code, health, OSHA and environmental requirements and all other foreign,
federal, state and local governmental and regulatory requirements and
requirements of any self regulatory organizations, except where such
non-conformities would not have a Material Adverse Effect. Neither such
Borrower nor any of its Subsidiaries has received any notice to the effect
that, or otherwise been advised that, it is not in compliance with, and
neither such Borrower nor any of its Subsidiaries has any reason to
anticipate that any presently existing circumstances are likely to result
in the violation of any such statute, law, ordinance, regulation, rule,
judgment, decree or order which failure or violation could reasonably be
expected to have a Material Adverse Effect.
6.14 ERISA.
Neither such Borrower, any Subsidiary nor any ERISA Affiliate
maintains or contributes to any Benefit Plan other than those listed on
Schedule 6.14 annexed hereto. Each Benefit Plan has been and is being
maintained and funded in accordance with its terms and in compliance in
all material respects with all provisions of ERISA and the Internal
Revenue Code applicable thereto. Such Borrower, each of its Subsidiaries
and each ERISA Affiliate have fulfilled all obligations related to the
minimum funding standards of ERISA and the Internal Revenue Code for each
Benefit Plan, are in compliance in all material respects with the
currently applicable provisions of ERISA and of the Internal Revenue Code
and have not incurred any liability (other than routine liability for
premiums) under Title IV of ERISA. No Termination Event has occurred nor
has any other event occurred that may result in such a Termination Event.
No event or events have occurred in connection with which such Borrower,
any of its Subsidiaries, any ERISA Affiliate, any fiduciary of a Benefit
Plan or any Benefit Plan, directly or indirectly, could be subject to any
material liability, individually or in the aggregate, under ERISA, the
Internal Revenue Code or any other law, regulation or governmental
order or under any agreement, instrument, statute, rule of law or
regulation pursuant to or under which any such entity has agreed to
indemnify or is required to indemnify any person against liability
incurred under, or for a violation or failure to satisfy the requirements
of, any such statute, regulation or order.
6.15 COMPLIANCE WITH ENVIRONMENTAL LAWS.
Except as disclosed on Schedule 6.15 attached hereto or as could not
reasonably be expected to have a Material Adverse Effect, individually or
in the aggregate, (a) the operations of such Borrower and each of its
Subsidiaries comply with all applicable federal, state or local
environmental, health and safety statutes, regulations, ordinances, or
similar provisions having the force and effect of law and (b) none of the
operations of such Borrower or any of its Subsidiaries is the subject of
any judicial or administrative proceeding alleging the violation of any
federal, state or local environmental, health or safety statute,
regulation, ordinance, or similar provisions having the force and effect
of law. Except as disclosed on Schedule 6.15 or as could not reasonably be
expected to
72
have a Material Adverse Effect, individually or in the aggregate, none of
the operations of such Borrower or any of its Subsidiaries is the subject
of any federal or state investigation evaluating whether such Borrower or
any of its Subsidiaries disposed any hazardous or toxic waste, substance
or constituent or other substance at any site that may require remedial
action, or any federal or state investigation evaluating whether any
remedial action is needed to respond to a release of any hazardous or
toxic waste, substance or constituent, or other substance into the
environment. Except as disclosed on Schedule 6.15 or as could not
reasonably be expected to have a Material Adverse Effect, individually or
in the aggregate, neither such Borrower nor any of its Subsidiaries have
filed any notice under any federal or state law indicating past or present
treatment, storage or disposal of a hazardous waste or reporting a spill
or release of a hazardous or toxic waste, substance or constituent, or
other substance into the environment. Except as disclosed on Schedule
6.15 or as could not reasonably be expected to have a Material Adverse
Effect, individually or in the aggregate, neither such Borrower nor any of
its Subsidiaries have any contingent liability of which such Borrower has
knowledge or reasonably should have knowledge in connection with any
release of any hazardous or toxic waste, substance or constituent, or
other substance into the environment, nor has such Borrower or any of its
Subsidiaries received any notice, letter or other indication of potential
liability arising from the disposal of any hazardous or toxic waste,
substance or constituent or other substance into the environment.
6.16 USE OF PROCEEDS.
All proceeds of the Loans will be used only in accordance with
Section 7.13 hereof.
6.17 INTELLECTUAL PROPERTY.
Such Borrower possesses adequate assets, licenses, patents, patent
applications, copyrights, service marks, trademarks and tradenames to
continue to conduct its business as heretofore conducted by it. Schedule
6.17 attached hereto sets forth (a) all of the federal, state and foreign
registrations of trademarks, service marks and other marks, trade names or
other trade rights of such Borrower and its Subsidiaries, and all pending
applications for any such registrations, (b) all of the patents and
copyrights of such Borrower and its Subsidiaries and all pending
applications therefor and (c) all other trademarks, service marks and
other marks, trade names and other trade rights used by such Borrower or
any of its Subsidiaries in connection with their businesses (collectively,
the "Proprietary Rights"). Such Borrower and its Subsidiaries are
collectively the owners of each of the trademarks listed on Schedule 6.17 as
indicated on such schedule, and no other Person has the right to use any of
such marks in commerce either in the identical form or in such near resemblance
thereto as may be likely to cause confusion or to cause mistake or to deceive.
Each of the trademarks listed on Schedule 6.17 is a federally registered
trademark of such Borrower or its Subsidiaries having the registration number
and issue date set forth on Schedule 6.17. The Proprietary Rights listed on
Schedule 6.17 are all those used in the businesses of such Borrower and its
Subsidiaries. Except as disclosed on Schedule 6.17, no person has a right
to receive any royalty or similar payment in respect of any Proprietary
Rights pursuant to any contractual arrangements entered into by such
Borrower, or any of its Subsidiaries and no person otherwise has a right
to receive any royalty or similar payment in
60
73
respect of any such Proprietary Rights except as disclosed on Schedule
6.17. Neither such Borrower nor any of its Subsidiaries has granted any
license or sold or otherwise transferred any interest in any of the
Proprietary Rights to any other person. The use of each of the
Proprietary Rights by such Borrower and its Subsidiaries is not infringing
upon or otherwise violating the rights of any third party in or to such
Proprietary Rights, and no proceeding has been instituted against or
notice received by such Borrower or any of its Subsidiaries that are
presently outstanding alleging that the use of any of the Proprietary
Rights infringes upon or otherwise violates the rights of any third party
in or to any of the Proprietary Rights. Neither such Borrower nor any of
its Subsidiaries have given notice to any Person that it is infringing on
any of the Proprietary Rights and to the best of such Borrower's
knowledge, no Person is infringing on any of the Proprietary Rights. All
of the Proprietary Rights of such Borrower and its Subsidiaries are valid
and enforceable rights of such Borrower and its Subsidiaries and will not
cease to be valid and in full force and effect by reason of the execution
and delivery of this Credit Agreement or the Credit Documents or the
consummation of the transactions contemplated hereby or thereby.
6.18 LICENSES AND PERMITS.
Such Borrower and each of its Subsidiaries have obtained and hold in
full force and effect, all material franchises, licenses, leases, permits,
certificates, authorizations, qualifications, easements, rights of way and
other rights and approvals which are necessary or appropriate for the
operation of their businesses as presently conducted and as proposed to be
conducted. Neither such Borrower nor any of its Subsidiaries is in
violation of the terms of any such franchise, license, lease, permit,
certificate, authorization, qualification, easement, right of way, right
or approval in any such case which could reasonably be expected to have a
Material Adverse Effect.
6.19 TITLE TO PROPERTY.
Such Borrower has (i) good and marketable fee simple title to or
valid leasehold interests in all of its real property, including, without
limitation, the Real Estate (all such real property and the nature of such
Borrower's or any Subsidiary's interest therein is disclosed on Schedule
6.19) and (ii) good and marketable title to all of its other property
(including without limitation, all real and other property in each case as
reflected in the Financial Statements delivered to the Agent hereunder),
other than, with respect to properties described in clause (ii) above,
properties disposed of in the ordinary course of business or in any manner
otherwise permitted under this Credit Agreement since the date of the most
recent audited consolidated balance sheet of such Borrower, and in each
case subject to no Liens other than Permitted Liens. Such Borrower and its
Subsidiaries enjoy peaceful and undisturbed possession of all its real
property, including, without limitation, the Real Estate, and there is no
pending or, to the best of their knowledge, threatened condemnation proceeding
relating to any such real property. The leases with respect to the leased
property, together with any leases of real property entered into by such
Borrower after the date hereof, are referred to collectively as the
"Leases." All of the Structures and other tangible assets owned, leased
or used by such Borrower or any of its Subsidiaries in the conduct of
their respective businesses are (a) insured to the extent and in a manner
customary in the industry in which such Borrower or such Subsidiaries are
engaged, (b) structurally sound with no known material defects, (c) in
good operating condition and repair, subject to ordinary wear and tear,
(d) not in need of maintenance or repair except for ordinary, routine
maintenance and repair the cost of which would not be material, (e)
sufficient for the operation of the businesses of such Borrower
74
and its Subsidiaries as presently conducted thereon and (f) in conformity
with all applicable laws, ordinances, orders, regulations and other
requirements (including applicable zoning, environmental, motor vehicle
safety, occupational safety and health laws and regulations) relating
thereto, except where the failure to conform could not reasonably be
expected to have a Material Adverse Effect.
6.20 LABOR MATTERS.
Neither such Borrower nor any of its Subsidiaries is engaged in any
unfair labor practice. There is (a) no unfair labor practice complaint
pending against such Borrower or any of its Subsidiaries or, to the best
knowledge of such Borrower, threatened against any of them, before the
National Labor Relations Board, and no grievance or arbitration proceeding
arising out of or under collective bargaining agreements is so pending
against such Borrower or any of its Subsidiaries or, to the best knowledge
of such Borrower, threatened against any of them, (b) no strike, labor
dispute, slowdown or stoppage pending against either of such Borrower or
any of its Subsidiaries or, to the best knowledge of such Borrower,
threatened against any of them, and (c) no union representation questions
with respect to the employees of such Borrower or any Subsidiaries and no
union organizing activities, except for any such complaint, grievance,
arbitration, strike, labor dispute, slowdown or stoppage, union
representation questions or organizing activities which could not
reasonably be expected to have a Material Adverse Effect.
6.21 INVESTMENT COMPANY.
Neither such Borrower nor any of its Subsidiaries is (a) an
"investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended, (b)
a "holding company" or a "Subsidiary company" of a "holding company," or
an "affiliate" of a "holding company" or of a "Subsidiary company" of a
"holding company," within the meaning of the Public Utility Holding
Company Act of 1935, as amended, or (c) subject to any other law which
purports to regulate or restrict its ability to borrow money or to
consummate the transactions contemplated by this Credit Agreement or the
other Credit Documents or to perform its obligations hereunder or
thereunder.
6.22 MARGIN SECURITY.
Such Borrower does not own any margin stock and no portion of the proceeds
of any Loans or Letters of Credit shall be used by the Borrowers for the purpose
of purchasing or carrying any "margin stock" (as defined in Regulation G of the
Board of Governors of the Federal Reserve System) or for any other purpose which
violates the provisions or Regulation G, T, U or X of said Board of Governors or
for any other purpose in violation of any applicable statute or regulation, or
of the terms and conditions of this Credit Agreement.
6.23 NO EVENT OF DEFAULT.
No Default or Event of Default has occurred and is continuing.
6.24 TAXES AND TAX RETURNS.
(a) Except as set forth on Schedule 6.24, such Borrower and its
Subsidiaries (and any affiliated group as defined in Section 1504 of
the Code or any analogous combined, consolidated, or unitary group
defined under state, local or foreign income tax law (an "Affiliated
Group") of which such Borrower or any of its Subsidiaries are now or
have been members) have timely filed (inclusive of any permitted
extensions) with the appropriate
62
75
taxing authorities all material returns (including without
limitation, information returns and other material information, in
respect of Taxes required to be filed through the Closing Date and
will timely file (inclusive of any permitted extensions) any such
material returns required to be filed on and after the Closing Date
and such returns are true and accurate in all material respects. As
of the Closing Date, except as specified in Schedule 6.24 hereto,
neither such Borrower nor any of its Subsidiaries, nor any Affiliated
Group of which such Borrower or any of its Subsidiaries are members,
has requested any extension of time within which to file returns
(including without limitation information returns) in respect of any
Taxes.
(b) All Taxes, in respect of periods beginning prior to the
Closing Date, have been timely paid, or will be timely paid, or an
adequate reserve has been established therefor, as set forth in
Schedule 6.24 or in the Financials.
(c) Except as set forth in Schedule 6.24, no material
deficiencies for Taxes have been claimed, proposed or assessed by any
taxing or other governmental authority against such Borrower or any
of its Subsidiaries and no material tax liens have been filed as of
the Closing Date. Except as set forth in Schedule 6.24, there are no
pending or, to the best of such Borrower's knowledge, threatened
audits, investigations or claims for or relating to any material
liability in respect of Taxes. As of the Closing Date, except as set
forth in Schedule 6.24, no extension of a statute of limitations
relating to Taxes is in effect with respect to such Borrower or any
of its Subsidiaries.
6.25 NO OTHER INDEBTEDNESS.
Such Borrower has no Indebtedness that is senior, pari passu or
subordinated in right of payment to their Indebtedness to the Lenders
hereunder, except for Permitted Indebtedness.
6.26 STATUS OF ACCOUNTS.
Each account receivable of such Borrower is based on an actual and bona
fide sale and delivery of goods or rendition of services to customers, made by
such Borrower in the ordinary course of its business, except for those accounts
receivable made by such Borrower outside the ordinary course of business which,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect; the goods and inventory being sold or leased and the
accounts receivable created are its exclusive property and are not and shall not
be subject to any Lien, consignment arrangement, encumbrance, security interest
or financing statement whatsoever, other than the Permitted Liens; and such
Borrower's customers have accepted the goods or services, owe and are obligated
to pay the full amounts stated in the invoices according to their terms, without
any dispute, offset, defense, counterclaim or contra that could reasonably be
expected to have, when aggregated with any such other disputes, offsets,
defenses, counterclaims or contras, a Material Adverse Effect. Such Borrower
confirms to the Lenders that any and all taxes or fees relating to its business,
its sales, the Accounts or the goods relating thereto, are its sole
responsibility and that same will be paid by such Borrower when due (unless duly
contested and adequately reserved for) and that none of said taxes or fees is or
will become a lien on or claim against the Accounts.
6.27 REPRESENTATIONS AND WARRANTIES.
Each of the representations and warranties made in the Operative
Documents by each of the parties thereto was true and correct in all
material respects when made. As of the Closing Date, each of the
representations and warranties
76
made in the Operative Documents by the Borrowers is true and correct in
all material respects and such representations and warranties are hereby
incorporated herein by reference with the same effect as though set forth
in their entirety herein, as qualified therein.
6.28 MATERIAL CONTRACTS.
Attached hereto as Schedule 6.28 is a true, correct and complete list
of all the Material Contracts currently in effect on the date hereof. All
of the Material Contracts are in full force and effect.
6.29 SURVIVAL OF REPRESENTATIONS.
All representations made by such Borrower in this Credit Agreement
and in any other Credit Document executed and delivered in connection
herewith shall survive the execution and delivery hereof and thereof but
shall terminate upon payment in full of the Obligations (other than
contingent indemnity obligations).
6.30 AFFILIATE TRANSACTIONS.
Except as set forth on Schedule 6.30 hereto, neither such Borrower
nor any Subsidiaries is a party to or bound by any agreement or
arrangement (whether oral or written) to which any Affiliate of such
Borrower or any Subsidiary is a party except (i) in the ordinary course of
and pursuant to the reasonable requirements of such Borrower's or such
Subsidiary's business and (ii) upon fair and reasonable terms no less
favorable to such Borrower and such Subsidiary than it could obtain in a
comparable arm's-length transaction with an unaffiliated Person.
6.31 ACCURACY AND COMPLETENESS OF INFORMATION.
All factual information heretofore, contemporaneously or hereafter
furnished by or on behalf of the Borrowers or any of their Subsidiaries to the
Agent, any Lender, or the Independent Accountant for purposes of or in
connection with this Credit Agreement or any Credit Documents, or any
transaction contemplated hereby or thereby is or will be true and accurate in
all material respects on the date as of which such information is dated or
certified and not incomplete by omitting to state any material fact necessary to
make such information not misleading at such time. There is no fact now known
to any officer of any Borrower or any of its Subsidiaries which has, or would
have, a Material Adverse Effect which fact has not been set forth herein, in the
Financials, or in any certificate, opinion or other written statement made or
furnished by any Borrower to the Agent.
ARTICLE VII
AFFIRMATIVE COVENANTS
So long as this Credit Agreement is in effect or any amounts payable
hereunder or under any other Credit Document shall remain outstanding, and
until all the Commitments hereunder shall have terminated, each Borrower
agrees that, unless the Required Lenders shall have otherwise consented in
writing:
7.1 FINANCIAL INFORMATION.
The Company will furnish to the Lenders the following information
within the following time periods:
64
77
(a) as soon as available, and in any event within 90 days after
the close of each fiscal year of the Company, a consolidated and
consolidating balance sheet and income statement of the Company and
its Subsidiaries, as of the end of such fiscal year, together with
related consolidated and consolidating statements of operations and
retained earnings and of cash flows for such fiscal year, setting
forth in comparative form consolidated and consolidating figures for
the preceding fiscal year to the extent applicable, all such
financial information described above to be in reasonable form and
detail and audited by independent certified public accountants of
recognized national standing reasonably acceptable to the Agent and
whose opinion shall be to the effect that such financial statements
have been prepared in accordance with GAAP (except for changes with
which such accountants concur) and shall not be limited as to the
scope of the audit or qualified as to the status of the Company and
its Subsidiaries as a going concern;
(b) as soon as available, and in any event within 30 days after
the close of each month, a consolidated and consolidating balance
sheet and income statement of the Company and its Subsidiaries
(provided, that financial information for a newly Acquired Company
shall not be required to be included in such financial statements
until the next monthly period following the month in which the
Acquisition of such Acquired Company occurred), as of the end of such
month, together with related consolidated and consolidating
statements of operations and of cash flows for such month in each
case setting forth (i) in comparative form consolidated and
consolidating figures for the corresponding monthly period and
year-to-date period of the preceding fiscal year, (ii) year-to-date
consolidated and consolidating figures and (iii) in comparative form
consolidated and consolidating figures for the corresponding period
set forth in the annual budget and business plan delivered pursuant
to Section 7.1(f), all such financial information described above to
be in reasonable form and detail and reasonably acceptable to the
Agent, and accompanied by a certificate of the chief financial
officer of the Company to the effect that such monthly financial
statements fairly present in all material respects the financial
condition of the Company and its Subsidiaries and have been prepared
in accordance with GAAP, subject to changes resulting from audit and
normal year-end audit adjustments;
(c) at the time of delivery of any annual financial statements
provided for in Section 7.1(a) and any monthly financial statements
provided for in Section 7.1(b) above which coincides with the end of any
fiscal quarter of the Company, a certificate of the chief financial officer
of the Company substantially in the form of Exhibit K, (i) demonstrating
compliance with the financial covenants contained in Article VIII by
calculation thereof as of the end of each such fiscal quarter and (ii)
stating that no Default or Event of Default exists, or if any Default or
Event of Default does exist, specifying the nature and extent thereof and
what action the Borrowers propose to take with respect thereto; in
addition, together with the annual financial statements provided for in
Section 7.1(a), the Company shall provide to the Agent and the Lenders a
certificate of the chief financial officer of the Company as to the amount
of Excess Cash Flow for the immediately preceding fiscal year showing in
reasonable detail the calculation thereof;
(d) a report on the Borrowing Base (a "Borrowing Base
Certificate") substantially in the form of Exhibit L (or in such
other form containing similar information as the Company and the
Agent may agree) (i) on or before the 15th day after the end of each
month
78
(as of the last day of such month), together with a monthly summary
of Parts and Supplies Inventory, a monthly summary of Rental
Equipment, a monthly summary of New Equipment, a monthly Rental
Equipment summary roll forward report, a monthly summary of accounts
receivable aging and accounts payable aging, a monthly summary of
existing Purchase Money Liens and Capital Lease Liens and the
Indebtedness secured thereby and monthly sales and cash receipt
reports (each as of the last day of such month), (ii) simultaneously
with the consummation of any Asset Disposition for which a mandatory
prepayment is required hereunder giving effect to such Asset
Disposition and (iii) promptly as of any other date requested by the
Agent, together in each case with such other supporting data as may
reasonably be requested by the Agent;
(e) promptly upon receipt thereof, copies of all management
letters and other material reports which are submitted to any
Borrower by its Independent Accountant in connection with any annual
or interim audit of the books of such Borrower made by such
accountants;
(f) no later than 30 days after the beginning of each fiscal
year, a budget and business plan for such fiscal year of the Company
which includes (i) a projected consolidated and consolidating balance
sheet and statement of income of the Borrowers for such fiscal year
and a projected consolidated and consolidating statement of cash
flows of the Borrowers for such fiscal year, (ii) projected
consolidated and consolidating balance sheets, statements of income
and statements of cash flows of the Borrowers on a monthly basis for
such fiscal year and (iii) projected usage and excess availability of
Revolving Loans on a monthly basis for such fiscal year;
(g) promptly upon receipt thereof, copies of all notices
delivered to the Borrowers or sent by the Borrowers with respect to
Subordinated Debt, including, without limitation, any notice of
default (the Borrowers expressly agreeing to furnish all such notices
by telecopy);
(h) promptly and in any event within two (2) Business Days after
a Responsible Officer becomes aware of the occurrence of a Default or
Event of Default, a certificate of the chief executive officer or
chief financial officer of the Company specifying the nature thereof
and the Borrowers' proposed response thereto, each in reasonable
detail; and
(i) with reasonable promptness, such other data as the Agent or
any of the Lenders may reasonably request.
7.2 INVENTORY.
Within thirty (30) days after the end of each month, upon the request
of the Agent from time to time, the Borrowers will provide to the Agent
written statements listing items of Inventory in reasonable detail as
requested by the Agent. The Borrowers will conduct annually a physical
count of their Inventory and a copy of such count will be
66
79
promptly supplied to the Agent accompanied by a report of the value
(valued at FIFO) of such Inventory; provided that the Borrowers will
conduct such a physical count at such other times and as of such dates as
the Agent shall reasonably request.
7.3 CORPORATE EXISTENCE.
Each Borrower and each of its Subsidiaries (a) will maintain their
corporate existence, will maintain in full force and effect all material
licenses, bonds, franchise, leases, trademarks and qualifications to do
business, (b) will obtain or maintain patents, licenses, contracts and
other rights necessary or desirable to the profitable conduct of their
businesses, (c) will continue in, and limit their operations to, the same
general lines of business as that presently conducted by them and (d) will
comply with all applicable laws and regulations of any federal, state or
local governmental authority, except in each case when noncompliance or
nonmaintenance with each of the foregoing would not, in the aggregate,
have a Material Adverse Effect.
7.4 ERISA.
The Borrowers will deliver to the Agent, at the Borrowers' expense,
the following information at the times specified below:
(a) within ten (10) Business Days after any Borrower, any
Subsidiary or any ERISA Affiliate knows or has reason to know that a
Termination Event has occurred, a written statement of the chief
financial officer of the Company describing such Termination Event
and the action, if any, which the Borrowers or other such entities
have taken, are taking or propose to take with respect thereto, and
when known, any action taken or threatened by the Internal Revenue
Service, DOL or PBGC with respect thereto;
(b) within ten (10) Business Days after any Borrower, any
Subsidiary or any ERISA Affiliate knows or has reason to know that a
prohibited transaction (as defined in Sections 406 of ERISA and 4975
of the Internal Revenue Code) has occurred, a statement of the chief
financial officer of the Company describing such transaction and the
action which the Borrowers or other such entities have taken, are
taking or propose to take with respect thereto;
(c) upon the Agent's request, copies of each annual report (form
5500 series), including all schedules and attachments thereto, filed
with respect to each Benefit Plan;
(d) upon the Agent's request, copies of each actuarial report
for any Benefit Plan or Multiemployer Plan and each annual report for
any Multiemployer Plan;
(e) within three (3) Business Days after the filing thereof
with the Internal Revenue Service, a copy of each funding waiver
request filed with respect to any Benefit Plan and all communications
received by any Borrower, any Subsidiary or any ERISA Affiliate with
respect to such request;
(f) within ten (10) Business Days upon the occurrence thereof,
notification of any increase in the benefits of any existing Benefit
Plan or the establishment of any new Benefit Plan or the commencement
of contributions to any Benefit Plan to which any Borrower, any
Subsidiary or any ERISA Affiliate was not previously contributing;
80
(g) within three (3) Business Days after receipt by any
Borrower, any Subsidiary or any ERISA Affiliate of the PBGC's
intention to terminate a Benefit Plan or to have a trustee appointed
to administer a Benefit Plan, copies of each such notice;
(h) within ten (10) Business Days after receipt by any Borrower,
any Subsidiary or any ERISA Affiliate of any unfavorable
determination letter or, upon the Agent's request, any favorable
determination letter, from the Internal Revenue Service regarding the
qualification of a Plan under Section 401(a) of the Internal Revenue
Code, copies of each such letter;
(i) within ten (10) Business Days after receipt by any Borrower,
any Subsidiary or any ERISA Affiliate of a notice regarding the
imposition of withdrawal liability, copies of each such notice;
(j) within ten (10) Business Days after any Borrower, any
Subsidiary or any ERISA Affiliate fails to make a required
installment or any other required payment under Section 412 of the
Internal Revenue Code on or before the due date for such installment
or payment, a notification of such failure; and
(k) within three (3) Business Days after any Borrower, any
Subsidiary or any ERISA Affiliate know (i) a Multiemployer Plan has
been terminated, (ii) the administrator or plan sponsor of a
Multiemployer Plan intends to terminate a Multiemployer Plan, or
(iii) the PBGC has instituted or will institute proceedings under
Section 4042 of ERISA to terminate a Multiemployer Plan, a written
statement setting forth any such event or information.
For purposes of this Section 7.4, any Borrower, any Subsidiary and
any ERISA Affiliate shall be deemed to know all facts known by the
administrator of any Benefit Plan of which such entity is the plan
sponsor.
The Borrowers will establish, maintain and operate all Benefit Plans
to comply in all material respects with the provisions of ERISA, Internal
Revenue Code, and all other applicable laws, and the regulations and
interpretations thereunder other than to the extent that the Borrowers are
in good faith contesting by appropriate proceedings the validity or
implication of any such provision, law, rule, regulation or
interpretation.
7.5 PROCEEDINGS OR ADVERSE CHANGES.
Each Borrower will as soon as possible, and in any event within five
(5) days after any Responsible Officer of such Borrower learns of the
following, give written notice to the Agent of (a) any material
proceeding(s) being instituted or threatened to be instituted by or
against any such Borrower or any of its Subsidiaries in any federal,
state, local or foreign court or before any commission or other regulatory
body (federal, state, local or foreign), and (b) any
68
81
Material Adverse Change. Provision of such notice by such Borrower will
not constitute a waiver or excuse of any Default or Event of Default
occurring as a result of such changes or events.
7.6 ENVIRONMENTAL MATTERS.
Except where the failure to do so could not reasonably be expected to have
a Material Adverse Effect, each Borrower will conduct its business and the
businesses of each of its Subsidiaries so as to comply in all material respects
with all environmental laws, regulations and, ordinances, in all jurisdictions
in which any of them is or may at any time be doing business including, without
limitation, environmental land use, occupational safety or health laws,
regulations, ordinances, requirements or permits in all jurisdictions in which
any of them is or may at any time be doing business, except to the extent that
any Borrower or any of its Subsidiaries are contesting, in good faith by
appropriate legal proceedings, any such law, regulation, direction, ordinance,
criteria, guideline, or interpretation thereof or application thereof; provided,
further, that each Borrower and each of its Subsidiaries will comply with the
order of any court or other governmental body of the applicable jurisdiction
relating to such laws unless such Borrower or its Subsidiaries shall currently
be prosecuting an appeal or proceedings for review and shall have secured a stay
of enforcement or execution or other arrangement postponing enforcement or
execution pending such appeal or proceedings for review. If any Borrower or any
of its Subsidiaries shall (a) receive notice that any violation of any federal,
state or local environmental law, regulation or ordinance, may have been
committed or is about to be committed by such Borrower or any of its
Subsidiaries, (b) receive notice that any administrative or judicial complaint
or order has been filed or is about to be filed against such Borrower or any of
its Subsidiaries alleging violations of any federal, state or local
environmental law, regulation or ordinance, or requiring such Borrower or any of
its Subsidiaries to take any action in connection with the release of toxic or
hazardous substances into the environment or (c) receive any notice from a
federal, state, or local governmental agency or private party alleging that such
Borrower or any of its Subsidiaries may be liable or responsible for costs
associated with a response to or cleanup of a release of a toxic or hazardous
substance into the environment or any damages caused thereby, the Borrowers will
provide the Agent with a copy of such notice within fifteen (15) days after the
receipt thereof by the applicable Borrower or any of its Subsidiaries. Within
fifteen (15) days after any Borrower learns of the enactment or promulgation of
any federal, state or local environmental law, regulation or ordinance, which
could reasonably be expected to have a Material Adverse Effect, such Borrower
will provide the Agent with notice thereof. Each Borrower will promptly take
all actions necessary to prevent the imposition of any Liens on any of its
properties arising out of or related to any environmental matters. At the
request of the Agent based upon Agent's reasonable belief that any Borrower has
violated a provision of this Section 7.6, and at the sole cost and expense of
the Borrowers, the Borrowers will retain an environmental consulting firm,
satisfactory to the Agent in its commercially reasonable judgment, to conduct an
environmental review with respect to such matters and provide to the Agent and
each Lender a copy of any reports delivered in connection therewith.
7.7 BOOKS AND RECORDS.
Each Borrower will, and will cause each of its Subsidiaries to,
maintain books and records pertaining to the Collateral in such detail,
form and scope as is consistent with good business practice. Each
Borrower agrees that the Agent or its agents may enter upon the premises
of each Borrower or any of its Subsidiaries at any time and from time to
time, during normal business hours upon reasonable prior notice, and at
any time at all on and after the occurrence
82
of an Event of Default which continues beyond the expiration of any grace
or cure period applicable thereto, and which has not otherwise been waived
by the Agent or cured to the Agent's reasonable satisfaction, for the
purpose of (a) inspecting the Collateral (including field examinations
conducted by the Agent's examination staff at the Borrowers' expense,
which expense shall be reasonable), (b) inspecting and/or copying (at
Borrowers' expense) any and all records pertaining thereto, (c) discussing
the affairs, finances and business of any Borrower or with any officers,
employees and directors of any Borrower with the Independent Accountant
and (d) verifying Eligible Accounts Receivable, Eligible Parts and
Supplies, Eligible Rental Equipment and Eligible New Equipment. Each
Borrower will use its best efforts to make available to the Agent or any
Lender any records handled or maintained for such Borrower by any other
company or entity. The Lenders, in the reasonable discretion of the
Agent, may accompany the Agent at their sole expense in connection with
the foregoing inspections. Each Borrower agrees to afford the Agent
thirty (30) days prior written notice of any change in the location of its
chief executive office or place of business from the locations specified
in Schedule 6.7, and to execute in advance of such change, cause to be
filed and/or delivered to the Agent any financing statements or other
documents required by the Agent, all in form and substance satisfactory to
the Agent. Each Borrower further agrees to afford the Agent prompt
written notice of any change in the location of any Collateral from the
locations specified in Schedule 6.7, and to execute in connection with
such change, cause to be filed and/or delivered to the Agent any financing
statements or other documents required by the Agent, all in form and
substance satisfactory to the Agent. Each Borrower agrees to advise the
Agent promptly, in sufficient detail, of any substantial change relating
to the type, quantity or quality of the Collateral or any event which
could have a material adverse effect on the value of the Collateral or on
the security interests granted to the Lenders therein. In addition, each
Borrower agrees to furnish any Lender with such other information
regarding its business affairs and financial condition as such Lender may
reasonably request from time to time.
7.8 COLLATERAL RECORDS.
Each Borrower will, and will cause each of its Subsidiaries to,
execute and deliver to the Agent, from time to time, solely for the
Agent's convenience in maintaining a record of the Collateral, such
written statements and schedules as the Agent may reasonably require,
including without limitation those described in Section 7.1 of this Credit
Agreement, designating, identifying or describing the Collateral pledged
to the Lenders hereunder. Each Borrower's or any Subsidiary's failure,
however, to promptly give the Agent such statements or schedules shall not
affect, diminish, modify or otherwise limit the Lenders' security interests
in the Collateral. Such Borrower agrees to maintain such books and records
regarding Accounts and the other Collateral as the Agent may reasonably
require, and agrees that such books and records will reflect the Lenders'
interest in the Accounts and such other Collateral.
7.9 SECURITY INTERESTS.
(a) Each Borrower and its Subsidiaries will at their expense, for so
long as the Credit Documents remain effective, warrant and defend the
Collateral against any and all claims, demands and Liens (other than
Permitted Liens) of any third party. The Borrowers will not, and will not
permit any of their Subsidiaries to, grant, create or permit to exist, any
Lien upon the Collateral, or any proceeds thereof, in favor of any third
party (other than Permitted Liens).
70
83
Each Borrower agrees to comply with the requirements of all state and
federal laws in order to grant to the Lenders valid and perfected first
security interest in the Collateral (subject only to Permitted Liens).
The Agent is hereby authorized by each Borrower to file any financing
statements covering the Collateral whether or not any Borrower's signature
appears thereon. Each Borrower agrees to do whatever the Agent may
reasonably request, from time to time, by way of: filing notices of
liens, financing statements, fixture filings and amendments, renewals and
continuations thereof; cooperating with the Agent's custodians; keeping
stock records; obtaining waivers from landlords and mortgagees and from
warehousemen, fillers, processors and packers and their respective
landlords and mortgagees; paying claims, which might if unpaid, become a
Lien (other than a Permitted Lien) on the Collateral; and performing such
further acts as the Agent may reasonably require in order to effect the
purposes of this Credit Agreement and the other Credit Documents. Any and
all fees, costs and expenses of whatever kind and nature (including any
Taxes, reasonable attorneys' fees or costs for insurance of any kind),
which the Agent may incur with respect to the Collateral or the
Obligations: in filing public notices; in preparing or filing documents;
making title examinations or rendering opinions; in protecting,
maintaining, or preserving the Collateral or its interest therein; in
enforcing or foreclosing the Liens hereunder, whether through judicial
procedures or otherwise; or in defending or prosecuting any actions or
proceedings arising out of or relating to its transactions with any
Borrower or any of its Subsidiaries under this Credit Agreement or any
other Credit Document, will be borne and paid by the Borrowers. If same
are not promptly paid by the Borrowers, the Agent may pay same on the
Borrowers' behalf, and the amount thereof shall be an Obligation secured
hereby and due to the Agent on demand.
(b) In accordance with the foregoing clause (a) of this Section 7.9,
each Borrower shall promptly notify the Agent of any delivery of Rental
Equipment to a state or county of a state in which a financing statement
covering the property of such Borrower or any of its Subsidiaries has not
yet been filed and shall promptly prepare such financing statement naming
the Agent as "Secured Party" for the Lenders and cause it to be duly filed
in the appropriate filing office in such state. In addition, each
Borrower shall (i) within sixty (60) days following the Closing Date and
(ii) within thirty (30) days following the acquisition of any equipment or
the consummation of a Permitted Acquisition, cause each document of title
evidencing such Borrower's or any of its Subsidiaries' ownership of an
item of equipment to duly name on the face thereof the Agent as lienholder
of such title for the benefit of the Lenders.
(c) Commencing on the ninetieth (90th) day following the Closing
Date, all equipment leases entered into by the Borrowers with their
respective customers on and after such date, shall contain satisfactory
provisions to the effect that each such lease has been assigned to the
Agent for the benefit of the Lenders as collateral security for the
Obligations.
7.10 INSURANCE; CASUALTY LOSS.
Each Borrower will, and will cause each of its Subsidiaries to,
maintain public liability insurance, third party property damage insurance
and replacement value insurance on the Collateral under such policies of
insurance, with such insurance companies, in such amounts and covering
such risks as are commercially reasonable and customary in the industry in
which such Borrower or such Subsidiaries are engaged. In addition, the
Borrowers will obtain and maintain, within 60 days of the Closing Date,
general liability insurance in the minimum aggregate amount of $10,000,000
for all Borrowers and their Subsidiaries. All policies covering the
Collateral are to name the Borrowers and the Agent, on behalf of the
Lenders, as additional insureds and loss payees in case of loss, as their
interests may appear, and are to contain such other provisions as the
Agent may reasonably require to fully protect the Agent's interest in the
Collateral and to any payments to be made under such policies. True
copies of all original insurance policies are to be delivered to the Agent
on or prior to the Closing Date, premium prepaid, with the loss payable
endorsement in the Agent's favor, and shall provide for not less than
thirty (30) days prior written notice to the Agent, of the exercise of any
right of cancellation. In the event any Borrower or any of its
Subsidiaries fail to respond in a timely and appropriate
84
manner (as determined by the Agent in its sole discretion) with respect to
collecting under any insurance policies required to be maintained under this
Section 7.10, the Agent shall have the right, in the name of the Agent, any
Borrower or any Subsidiary, to file claims under such insurance policies, to
receive and give acquittance for any payments that may be payable thereunder,
and to execute any and all endorsements, receipts, releases, assignments,
reassignments or other documents that may be necessary to effect the collection,
compromise or settlement of any claims under any such insurance policies. Each
Borrower will provide written notice to the Lenders of the occurrence of any of
the following events within five (5) Business Days after a Responsible Officer
of such Borrower learns of the occurrence of such event: any asset or property
owned or used by any Borrower or any of its Subsidiaries is (a) materially
damaged or destroyed, or suffers any other loss or (b) is condemned, confiscated
or otherwise taken, in whole or in part, or the use thereof is otherwise
diminished so as to render impracticable or unreasonable the use of such asset
or property for the purpose to which such asset or property was used immediately
prior to such condemnation, confiscation or taking, by exercise of the powers of
condemnation or eminent domain or otherwise, and in either case the amount of
the damage, destruction, loss or diminution in value of the Collateral is in
excess of $1,000,000 (each such event or occurrence in excess of $1,000,000
being herein referred to as a "Casualty Loss"). Each Borrower will diligently
file and prosecute its claim or claims for any award or payment in connection
with a Casualty Loss. In the event of a Casualty Loss, the Borrowers will pay
to the Agent, promptly upon receipt thereof, any and all insurance proceeds and
payments received by any Borrower or any of its Subsidiaries on account of
damage, destruction or loss of all or any portion of the Collateral. The Agent
may, at its election and in its sole discretion (and with the approval of the
Required Lenders if such Casualty Loss is in excess of $5,000,000), either (i)
apply the proceeds realized from Casualty Losses to payment of accrued and
unpaid interest on, or outstanding principal of, the Term Loans or the Revolving
Loans, as determined by the Agent, or (ii) pay such proceeds to the Borrowers to
be used to repair, replace or rebuild the asset or property or portion thereof
that was the subject of the Casualty Loss. After the occurrence and during the
continuance of an Event of Default, (A) no settlement on account of any such
Casualty Loss shall be made without the consent of the Required Lenders and (B)
the Agent may participate in any such proceedings and the Borrowers will deliver
to the Agent such documents as may be requested by the Agent to permit such
participation and will consult with the Agent, its attorneys and agents in the
making and prosecution of such claim or claims. Each Borrower hereby
irrevocably authorizes and appoints the Agent its attorney-in-fact, after the
occurrence and continuance of an Event of Default, to collect and receive for
any such award or payment and to file and prosecute such claim or claims, which
power of attorney shall be irrevocable and shall be deemed to be coupled with an
interest, and each Borrower shall, upon demand of the Agent, make, execute and
deliver any and all assignments and other instruments sufficient for the purpose
of assigning any such award or payment to the Agent for the benefit of the
Lenders, free and clear of any encumbrances of any kind or nature whatsoever.
7.11 TAXES.
Each Borrower will, and will cause each of its Subsidiaries to, pay,
when due, all Taxes lawfully levied or assessed against any Borrower, any
Subsidiary or any of the Collateral; provided, however, that no such Tax
need be paid if the same is being contested in good faith by appropriate
proceedings and if an
85
adequate reserve or other appropriate provision shall have been made
therefor as required in order to be in conformity with GAAP.
7.12 COMPLIANCE WITH LAWS.
Each Borrower will, and will cause each of its Subsidiaries to,
comply with all laws, rules, regulations and orders, and all applicable
restrictions imposed by all Governmental Authorities, applicable to it and
its Property if noncompliance with any such law, rule, regulation, order
or restriction could reasonably be expected to have a Material Adverse
Effect.
7.13 USE OF PROCEEDS.
The proceeds of the Loans made and Letters of Credit issued hereunder
shall be used by the Borrowers solely to provide for the working capital
and general corporate needs of the Borrowers, including financing for
Closing Date Acquisitions and Future Acquisitions and to repay the Bridge
Loan and the Xxxxxx Note; provided, however, that in any event, no portion
of the proceeds of any Loans or Letters of Credit shall be used by the
Borrowers for the purpose of purchasing or carrying any "margin stock" (as
defined in Regulation G of the Board of Governors of the Federal Reserve
System) or for any other purpose which violates the provisions or
Regulation G, T, U or X of said Board of Governors or for any other
purpose in violation of any applicable statute or regulation, or of the
terms and conditions of this Credit Agreement.
7.14 FISCAL YEAR.
Each Borrower agrees that it will not change its fiscal year from a
year ending December 31 unless required by law, in which case such
Borrower will give the Agent at least 30 days prior written notice
thereof.
7.15 NOTIFICATION OF CERTAIN EVENTS.
Each Borrower agrees that it will promptly notify the Agent of the
occurrence of any of the following events:
(a) any Material Contract of any Borrower or any of its
Subsidiaries is terminated or amended in any material respect or any
new Material Contract is entered into (in which event each Borrower
shall provide the Agent with a copy of such Material Contract); or
(b) any of the material terms upon which suppliers to any
Borrower or any of its Subsidiaries do business with any Borrower or
any Subsidiary are changed or amended in a manner which could
reasonably be expected to have a Material Adverse Effect; or
(c) any order, judgment or decree in excess of $50,000 shall
have been entered against any Borrower or any of its Subsidiaries or
any of their respective properties or assets; or
(d) any notification of violation of any material law or
regulation or any inquiry shall have been received by any Borrower or
any of its Subsidiaries from any local, state, federal or foreign
governmental authority or agency.
7.16 ADDITIONAL BORROWERS.
86
As soon as practicable and in any event within 30 days after any
Person becomes a direct or indirect Subsidiary of the Company, the
Borrowers will provide the Agent with written notice thereof setting forth
information in reasonable detail describing all of the assets of such
Person and shall (a) cause such Person to execute a Joinder Agreement in
substantially the same form as Exhibit M hereto, (b) pledge all of its
assets to the Agent pursuant to a security agreement in substantially the
form of the Security Agreement and otherwise in a form acceptable to the
Agent, (c) cause all of its Capital Stock to be delivered to the Agent
(together with undated stock powers signed in blank and pledged to the
Agent pursuant to an appropriate pledge agreement(s) in substantially the
form of the Pledge Agreement and otherwise in form acceptable to the
Agent), (d) cause such Person to execute Term Loan Notes and Revolving
Notes in favor of the Lenders and (e) deliver such other documentation as
the Agent may reasonably request in connection with the foregoing,
including, without limitation, appropriate UCC-1 financing statements,
Acknowledgment Agreements, certified resolutions and other organizational
and authorizing documents of such Person and favorable opinions of counsel
to such Person (which shall cover, among other things, the legality,
validity, binding effect and enforceability of the documentation referred
to above), all in form, content and scope reasonably satisfactory to the
Agent. The Company shall at all times own, directly or indirectly, 100
percent of the Capital Stock of the Subsidiary Borrowers and their
Subsidiaries.
7.17 SCHEDULES OF ACCOUNTS AND PURCHASE ORDERS.
In furtherance of the continuing assignment and security interest in the
Accounts of each Borrower granted pursuant to the Security Agreement, in
connection with the creation of Accounts, upon the reasonable request of the
Agent, each Borrower will execute and deliver to the Agent in such form and
manner as the Agent may reasonably require, solely for its convenience in
maintaining records of collateral, such confirmatory schedules of Accounts,
customer lists and other appropriate reports designating, identifying and
describing the Accounts. In addition, upon the Agent's reasonable request, each
Borrower will provide the Agent with copies of agreements with, or purchase
orders from, the customers of each Borrower and its Subsidiaries, and copies of
invoices to customers, proof of shipment or delivery and such other
documentation and information relating to said Accounts and other collateral as
the Agent may reasonably require. Failure to provide the Agent with any of the
foregoing shall in no way affect, diminish, modify or otherwise limit the
security interests granted herein. Each Borrower hereby authorizes the Agent to
regard such Borrower's or any Subsidiary's printed name or rubber stamp
signature on assignment schedules or invoices as the equivalent of a manual
signature by such Borrower's or such Subsidiary's authorized officers or agents.
7.18 COLLECTION OF ACCOUNTS.
Unless the Agent shall have, in its reasonable discretion, elected to
enforce, collect and receive all amounts owing on the Accounts, or an
Event of Default has occurred which continues beyond the expiration of the
applicable grace or cure period, or has not otherwise been waived by the
Agent (each a "Cash Management Event"), each Borrower may and will
enforce, collect and receive all amounts owing on the Accounts, for the
benefit, and on behalf, of the Lenders, but at the Borrowers' sole expense
in accordance with the provisions of Section 2.4(b) hereof; such privilege
shall terminate automatically, however, upon the occurrence of any Event
of Default which continues beyond the expiration of any applicable grace
or cure period, or which has not otherwise been waived by the Agent. Upon
the occurrence of a Cash Management Event (a) any checks, cash, notes or
other instruments or property received by any Borrower or any of its
Subsidiaries with respect to any Accounts shall be held by such Borrower
or such Subsidiary in trust for the benefit of the Lenders, separate from
such Borrower's or Subsidiary's own property and funds, and
87
immediately turned over to the Agent in accordance with Section 2.4(b)
with proper assignments or endorsements and (b) no checks, drafts or other
instruments received by the Agent shall constitute final payment unless
and until such instruments have actually been collected.
7.19 NOTICE; CREDIT MEMORANDA; AND RETURNED GOODS.
Each Borrower will notify the Agent promptly of any matters
materially affecting the value, enforceability or collectibility of any
Account, and of all material customer disputes, offsets, defenses,
counterclaims, returns and rejections, and all reclaimed or repossessed
merchandise or goods, provided, however, that such notice shall only be
required as to any such matter that affects Accounts outstanding at any
one time from any account debtor having a value greater than $35,000. The
Borrower will prepare credit memoranda promptly (with duplicates to the
Agent upon its request for same) upon accepting returns or granting
allowances, and may continue to do so until the occurrence of an Event of
Default which continues beyond the expiration of the applicable grace or
cure period, or which has not otherwise been waived by the Agent. After
the occurrence and during the continuance of an Event of Default, each
Borrower agrees that all returned, reclaimed or repossessed merchandise or
goods shall be set aside by such Borrower, marked with the Lenders' name
and held by such Borrower for the Lenders' account as owner and assignee.
7.20 ACKNOWLEDGMENT AGREEMENTS.
Each Borrower will assist the Agent in obtaining executed
Acknowledgment Agreements from each of the warehousemen, processors,
packers, fillers, landlords and mortgagees with whom such Borrower
conducts business from time to time.
7.21 TRADEMARKS.
Each Borrower will do and cause to be done all things necessary to
preserve and keep in full force and effect all registrations of
trademarks, service marks and other marks, trade names or other trade
rights.
7.22 MAINTENANCE OF PROPERTY.
Each Borrower will, and will cause each of its Subsidiaries to, keep all
property useful and necessary to its respective business in good working order
and condition (ordinary wear and tear and damages from casualty and condemnation
excepted) in accordance with their past operating practices and not to commit or
suffer any waste with respect to any of its properties which could reasonably be
expected to have a Material Adverse Effect.
7.23 ANNUAL APPRAISAL OF RENTAL EQUIPMENT.
The Borrowers will, within 60 days after the end of each fiscal year,
deliver to each Lender and the Agent an appraisal of the orderly
liquidation value of the Rental Equipment as of the last day of such
fiscal year from an appraiser reasonably satisfactory to the Agent. Upon
the reasonable request of the Agent, the Borrowers shall deliver to the
Agent and the Lenders additional appraisals of the orderly liquidation
value of the Rental Equipment within 45 days of any such request. All
appraisals conducted pursuant to this Section 7.23 shall be at the
Borrowers' expense.
7.24 PLEDGED REAL ESTATE ASSETS.
88
Upon the request of the Agent, each Borrower will, and will cause
each of its Subsidiaries to, cause (a) all of its owned real property and
(b) all of its leased real property, whether owned or leased as of, or
subsequent to, the Closing Date, to be subject at all times to first
priority, perfected and title insured Liens (other than Permitted Liens)
in favor of the Agent pursuant to the terms and conditions of such
security documents and instruments, in form and substance satisfactory to
the Agent, as the Agent shall reasonably request. In connection with any
mortgage in favor of the Agent delivered pursuant to this Section 7.24,
the Agent shall be entitled to receive a title report, title insurance,
such maps, plats or surveys as it may reasonably request, flood insurance
as required by law, evidence that the subject real property is in
compliance with all zoning and environmental laws and such other
information and documents as the Agent shall reasonably request. In
furtherance of the foregoing terms of this Section 7.24, each Borrower
agrees to promptly provide the Agent with written notice of the
acquisition by, or the entering into a leasing by, any Borrower or any of
its Subsidiaries of any real property assets having a market value greater
than $250,000 or annual lease payments in excess of $250,000, setting
forth in reasonable detail the location and a description of the real
property assets so acquired or leased.
7.25 REVISIONS OR UPDATES TO SCHEDULES.
If any of the information or disclosures provided on any of Schedules
6.7, 6.8, 6.9, 6.14, 6.17 or 6.19 or on Schedule 6.24, with respect to the
disclosure referred to in the second sentence of Section 6.24(c),
originally attached hereto become outdated or incorrect in any material
respect, the Borrowers shall deliver to the Agent and the Lenders as part
of the compliance certificate required pursuant to Section 7.1(c) such
revision or updates to such Schedule(s) as may be necessary or appropriate
to update or correct such Schedule(s), provided, that no such revisions or
updates to any such Schedule(s) shall be deemed to have amended, modified
or superseded such Schedule(s) as originally attached hereto, or to have
cured any breach of warranty or representation resulting from the
inaccuracy or incompleteness of any such Schedule(s), unless and until the
Required Lenders, in their sole and absolute discretion, shall have
accepted in writing such revisions or updates to such Schedule(s) or
unless such revision or updates to such Schedule(s) would not have a
Material Adverse Affect or would not result in a Material Adverse Change
and would not cause or result in a breach of a covenant hereunder or
otherwise cause or result in a Default or Event of Default hereunder.
ARTICLE VIII
FINANCIAL COVENANTS
So long as this Credit Agreement is in effect or any amounts payable
hereunder or under any other Credit Document shall remain outstanding, and
until all the Commitments hereunder shall have terminated, each Borrower
agrees that, unless the Required Lenders shall have otherwise consented in
writing:
8.1 CONSOLIDATED NET WORTH.
76
89
The Borrowers shall maintain Consolidated Net Worth of not less than
(a) $20,500,000 at all times during the period commencing on the Closing
Date through and including December 30, 1997, (b) $21,000,000 at all times
during the period commencing on December 31, 1997 through and including
December 30, 1998, (c) $22,500,000 at all times during the period
commencing on December 31, 1998 through and including Xxxxxxxx 00, 0000,
(x) $25,000,000 at all times during the period commencing on December 31,
1999 through and including December 30, 2000 and (e) $28,000,000 at all
times thereafter.
8.2 LEVERAGE RATIO.
The Borrowers shall maintain a Leverage Ratio of not greater than
3.50 to 1.0 as of the last day of each fiscal quarter.
8.3 FIXED CHARGE COVERAGE RATIO.
The Borrowers shall maintain a Fixed Charge Coverage Ratio of not
less than 1.75 to 1.0 as of the last day of each fiscal quarter.
8.4 INTEREST/RENTAL EXPENSE COVERAGE RATIO.
The Borrowers shall maintain an Interest/Rental Expense Coverage
Ratio of not less than 3.50 to 1.0 as of the last day of each fiscal
quarter.
8.5 CONSOLIDATED CAPITAL EXPENDITURES.
The Borrowers shall not make Consolidated Capital Expenditures in
excess of (a) $15,000,000 during fiscal year 1997, (b) $16,000,000 during
fiscal year 1998, (c) $17,000,000 during fiscal year 1999, and (d)
$18,000,000 during any fiscal year thereafter.
ARTICLE IX
NEGATIVE COVENANTS
So long as this Credit Agreement is in effect or any amounts payable
hereunder or under any other Credit Document shall remain outstanding, and
until all the Commitments hereunder shall have terminated, each Borrower
agrees that, unless the Required Lenders shall have otherwise consented in
writing, it will not, and will not permit any of its Subsidiaries to:
9.1 RESTRICTIONS ON LIENS.
Mortgage, assign, pledge, transfer or otherwise permit any Lien or
judgment (whether as a result of a purchase money or title retention
transaction, or other security interest, or otherwise) to exist on any of
its assets or goods, whether real, personal or mixed, whether now owned or
hereafter acquired, except for Permitted Liens.
9.2 RESTRICTIONS ON ADDITIONAL INDEBTEDNESS.
Incur or create any liability or Indebtedness other than Permitted
Indebtedness.
9.3 RESTRICTIONS ON SALE OF ASSETS.
90
Sell, lease, assign, transfer or otherwise dispose of any assets
(including stock of any Subsidiary of the Company) other than (a) sales of
Inventory in the ordinary course of business, (b) sale-leaseback
transactions permitted by Section 9.15 hereof, (c) sales in the ordinary
course of business of assets that are obsolete or that are no longer used
or useful in the conduct of such Borrower's or Subsidiary's business, (d)
sales in the ordinary course of business of assets (other than Inventory)
used in such Borrower's or Subsidiary's business that are worn out or in
need of replacement and that are replaced with assets of reasonably
equivalent value or utility, provided that the proceeds of sales of assets
made pursuant to this clause (d) shall be applied to replace such assets,
or a contract for such replacement shall be entered into, within 60 days
of any such sales, and (e) sales of assets of such Borrower or Subsidiary
approved by the Required Lenders in their reasonable discretion.
9.4 NO CORPORATE CHANGES.
(a) Merge or consolidate with any Person (unless (i) such merger or
consolidation is made in connection with a Permitted Acquisition or such
other transaction as shall be approved by the Required Lenders in their
reasonable discretion, (ii) such Borrower or its Subsidiary is the
survivor of such merger or consolidation and (iii) no Event of Default
would exist prior to or immediately after such merger or consolidation),
(b) alter or modify any Borrower's or any Subsidiary's Articles or
Certificate of Incorporation or any operating agreement in any manner
which is materially adverse to the Lenders, (c) modify or alter any names,
mailing addresses, principal places of business, structure, status or
existence (unless otherwise permitted hereunder) or (d) enter into or
engage in any business, operation or activity materially different from
that presently being conducted by any Borrower or Subsidiary.
9.5 NO GUARANTEES.
Assume, guarantee, endorse, or otherwise become liable upon the
obligations of any other Person, including, without limitation, any
Subsidiary or Affiliate of any Borrower, except (a) by the endorsement of
negotiable instruments in the ordinary course of business, (b) by the
giving of indemnities in connection with the sale of Inventory or other
Asset Dispositions permitted hereunder and (c) for guarantees of Permitted
Indebtedness.
9.6 NO RESTRICTED PAYMENTS.
Make a Restricted Payment other than the following Restricted
Payments so long as no Default or Event of Default shall exist immediately
prior to or immediately after the making of any such permitted Restricted
Payment: (a) the payments of dividends from any Subsidiary to any
Borrower, (b) on and after the Closing Date, the payment from time to time
to Xxxxxx Xxxxx of a one-time fee equal to one percent (1%) of the
aggregate amount of funds loaned or contributed to the Company by Xxxxxx
Xxxxx, payable by the Company at each such time such funds are so loaned
or contributed, (c) the payment of an annual fee of $200,000 to Xxxxxx
Xxxxx pursuant to the Professional Services Agreement dated June 4, 1996
between Xxxxxx Xxxxx and the Company, (d) the payment of annual management
bonuses by the Borrowers and their Subsidiaries in an aggregate amount not
to exceed $1,000,000 per fiscal year, (e) repurchases of stock of any
Borrower held by management of such Borrower, provided that the aggregate
amount of such repurchases shall not exceed $1,000,000 per fiscal year and
(f) customary and reasonable corporate overhead reimbursements payable by
the Subsidiary Borrowers to the Company.
9.7 NO INVESTMENTS.
Make any investment other than (a) Permitted Investments and (b)
investments by the Company in the Subsidiary Borrowers.
78
91
9.8 NO AFFILIATE TRANSACTIONS.
Enter into any transaction with, including, without limitation, the
purchase, sale or exchange of property or the rendering of any service to,
any Subsidiary or Affiliate of any Borrower except (a) in the ordinary
course of and pursuant to the reasonable requirements of such Borrower's
business and upon fair and reasonable terms no less favorable to such
Borrower than could be obtained in a comparable arm's-length transaction
with an unaffiliated Person, (b) as permitted under Section 9.6 hereof,
(c) for intercompany loans and advances from the Company to any Subsidiary
Borrower or from any Subsidiary Borrower to the Company and (d) for
intercompany transfers of equipment among Subsidiary Borrowers for the
purpose of meeting customer demand for Rental Equipment, provided that the
Subsidiary Borrowers shall keep adequate internal records of all such
transfers .
9.9 NO PROHIBITED TRANSACTIONS UNDER ERISA.
(a) Engage, or permit any ERISA Affiliate to engage, in any
prohibited transaction which could result in a material civil penalty
or excise tax described in Sections 406 of ERISA or 4975 of the
Internal Revenue Code for which a statutory or class exemption is not
available or a private exemption has not been previously obtained
from the DOL;
(b) permit to exist with respect to any Benefit Plan any
accumulated funding (as defined in Sections 302 of ERISA and 412 of
the Internal Revenue Code), whether or not waived;
(c) fail, or permit any ERISA Affiliate to fail, to pay timely
required contributions or annual installments due with respect to any
waived funding deficiency to any Benefit Plan;
(d) terminate, or permit any ERISA Affiliate to terminate, any
Benefit Plan where such event would result in any material liability
of a Borrower or any Subsidiary of such Borrower or any ERISA
Affiliate under Title IV of ERISA;
(e) fail, or permit any ERISA Affiliate to fail to make any
required contribution or payment to any Multiemployer Plan;
(f) fail, or permit any ERISA Affiliate to fail, to pay any required
installment or any other payment required under Section 412 of the Internal
Revenue Code on or before the due date for such installment or other
payment;
(g) amend, or permit any ERISA Affiliate to amend, a Benefit
Plan resulting in an increase in current liability for the plan year
such that either of the Borrowers, any Subsidiary or any ERISA
Affiliate is required to provide security to such Benefit Plan under
Section 401(a)(29) of the Internal Revenue Code;
92
(h) withdraw, or permit any ERISA Affiliate to withdraw, from
any Multiemployer Plan where such withdrawal may result in any
liability of any such entity under Title IV of ERISA; or
(i) allow any representation made in Section 6.14 to be untrue
at any time during the term of this Credit Agreement, if such an
occurrence would have a Material Adverse Effect.
9.10 RESTRICTIONS ON THE COMPANY.
The Company may not hold any assets other than the stock of the
Subsidiary Borrowers and the Subsidiaries listed on Schedule 6.9 and may
not have any liabilities other than (a) the liabilities under the Credit
Documents and (b) tax and routine administrative liabilities in the
ordinary course of business. The Company may not sell, transfer or
otherwise dispose of any shares of Capital Stock of or other ownership
interests in the Subsidiary Borrowers or such Subsidiaries. The Company
may not engage in any business other than (i) owning the stock of the
Subsidiary Borrowers and such Subsidiaries and the managerial activities
related thereto and (ii) acting as a Borrower hereunder and pledging its
assets (including the Capital Stock of its Subsidiaries) as security
therefor and engaging in activities directly related thereto.
9.11 ISSUANCE OF STOCK.
Issue or distribute any Capital Stock or other securities for
consideration or otherwise other than the issuance of Capital Stock of the
Company or any of its Subsidiaries so long as immediately before and after
giving effect to such issuance no Default or Event of Default exists.
9.12 MATERIAL AMENDMENTS OF MATERIAL CONTRACTS.
Without the prior written consent of the Agent, amend, modify, cancel
or terminate or permit the amendment, modification, cancellation or
termination of any of the Material Contracts, except in the event that
such amendments, modifications, cancellations or terminations could not
reasonably be expected to have a Material Adverse Effect.
9.13 ADDITIONAL NEGATIVE PLEDGES.
Create or otherwise cause or suffer to exist or become effective, or permit
any of its Subsidiaries to create or otherwise cause or suffer to exist or
become effective, directly or indirectly, (i) any prohibition or restriction
(including any agreement to provide equal and ratable security to any other
Person in the event a Lien is granted to or for the benefit of the Agent and the
Lenders) on the creation or existence of any Lien upon the assets of any
Borrower or its Subsidiaries, other than Permitted Liens or (ii) any Contractual
Obligation which may restrict or limit the Agent's rights or ability to sell or
otherwise dispose of the Collateral or any part thereof after the occurrence of
an Event of Default other than standard and customary subordination,
nondisturbance and attornment agreements under or in connection with leases of
Rental Equipment.
9.14 SUBORDINATED DEBT.
93
Effect or permit any change in or amendment to any document or
instrument pertaining to the subordination, terms of payment or required
prepayments of any Subordinated Debt, effect or permit any change in or
amendment to any document or instrument pertaining to the covenants or
events of default of any Subordinated Debt if the effect of any such
change or amendment is to make such covenants or events of default more
restrictive on the Borrowers, give any notice of optional redemption or
optional prepayment or offer to repurchase under any such document or
instrument, or, directly or indirectly, make any payment of principal of
or interest on or in redemption, retirement or repurchase of any
Subordinated Debt, except for the scheduled payments of interest under the
Existing Subordinated Notes so long as immediately before and after giving
effect to such payment no Default or Event of Default exists.
9.15 SALE AND LEASEBACK.
Enter into any arrangement, directly or indirectly, whereby the
Company or any Subsidiary shall sell or transfer any property owned by it
to a Person (other than the Company or any Subsidiary) in order then or
thereafter to lease such property or lease other property which the
Company or any Subsidiary intends to use for substantially the same
purpose as the property being sold or transferred.
9.16 LICENSES, ETC.
Enter into licenses of, or otherwise restrict the use of, any
patents, trademarks or copyrights which would prevent the Company or any
Subsidiary from selling, transferring, encumbering or otherwise disposing
of any such patent, trademark or copyright.
9.17 LIMITATIONS.
Create, nor will it permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause, incur, assume, suffer or permit to exist
or become effective any consensual encumbrance or restriction of any kind on the
ability of any such Person to (a) in the case of any Subsidiary Borrowers, pay
dividends or make any other distribution on any of such Person's Capital Stock,
(b) pay any Indebtedness owed to the Borrowers, (c) make loans or advances to
any other Borrower or (d) transfer any of its property to any other Borrower,
except for encumbrances or restrictions existing under or by reason of (i)
customary non-assignment provisions in any lease governing a leasehold interest,
(ii) any agreement or other instrument of a Person existing at the time it
becomes a Subsidiary of a Borrower; provided that such encumbrance or
restriction is not applicable to any other Person, or any property of any other
Person, other than such Person becoming a Subsidiary of a Borrower and was not
entered into in contemplation of such Person becoming a Subsidiary of a Borrower
and (iii) this Credit Agreement and the other Credit Documents.
ARTICLE X
POWERS
10.1 APPOINTMENT AS ATTORNEY-IN-FACT.
Each Borrower hereby irrevocably authorizes and appoints the Agent,
or any Person or agent the Agent may designate, as such Borrower's
attorney-in-fact, at the Borrowers' cost and expense, to exercise, subject
to the limitations set forth in Section 10.2 hereof, all of the following
powers, which being coupled with an interest, shall be irrevocable until
all of the Obligations to the Lenders have been paid and satisfied in
full:
94
(a) To receive, take, endorse, sign, assign and deliver, all in
the name of the Agent, the Lenders or such Borrower, any and all
checks, notes, drafts, and other documents or instruments relating to
the Collateral;
(b) To receive, open and dispose of all mail addressed to such
Borrower and to notify postal authorities to change the address for
delivery thereof to such address as the Agent may designate;
(c) To request at any time from customers indebted on Accounts,
in the name of such Borrower or a third party designee of the Agent,
information concerning the Accounts and the amounts owing thereon;
(d) To give customers indebted on Accounts notice of the
Lenders' interest therein, and/or to instruct such customers to make
payment directly to the Agent for such Borrower's account; and
(e) To take or bring, in the name of the Agent, the Lenders or
such Borrower, all steps, actions, suits or proceedings deemed by the
Agent necessary or desirable to enforce or effect collection of the
Accounts.
10.2 LIMITATION ON EXERCISE OF POWER.
Notwithstanding anything hereinabove to the contrary, the powers set
forth in subparagraphs (b), (d) and (e) above may only be exercised by the
Agent on and after the occurrence of an Event of Default which continues
beyond the expiration of the applicable grace or cure period, and which
has not otherwise been waived by the Agent. The powers set forth in
subparagraphs (a) and (c) above may be exercised by the Agent at any time.
ARTICLE XI
EVENTS OF DEFAULT AND REMEDIES
11.1 EVENTS OF DEFAULT.
The occurrence of any of the following events shall constitute an
Event of Default hereunder:
(a) failure of any Borrower to pay (i) any interest or Fees hereunder
within three (3) Business Days of when due hereunder, in each case whether
at stated maturity, by acceleration, or otherwise, (ii) any Credit
Obligations when due, whether at stated maturity, by acceleration or
otherwise or (iii) any expenses hereunder within five (5) Business Days
after receipt of notice by the Borrowers from the Agent or any applicable
Lender that such expenses are payable;
95
(b) any representation or warranty, contained in this Credit
Agreement, the other Credit Documents or any other agreement,
document, instrument or certificate among any Borrower, the Agent and
the Lenders or executed by any Borrower in favor of the Agent or the
Lenders shall prove untrue in any material respect on the date as of
which it was made or was deemed to have been made;
(c) failure of any Borrower to perform, comply with or observe
any term, covenant or agreement applicable to it contained in (i) the
second sentence of Section 7.7 and such breach or failure to comply
is not cured within five (5) Business Days of its occurrence or (ii)
Section 7.1(h), Section 7.5, Article VIII or Article IX;
(d) failure to comply with any other covenant, contained in this
Credit Agreement, the other Credit Documents or any other agreement,
document, instrument or certificate among any Borrower, the Agent and
the Lenders or executed by any Borrower in favor of the Agent or the
Lenders, and in the event such breach or failure to comply is capable
of cure, is not cured within thirty (30) days of its occurrence;
(e) dissolution, liquidation, winding up or cessation of any
Borrower's or any Subsidiary's businesses (except in connection with
a transaction permitted hereunder), or the failure of any Borrower or
any Subsidiary to meet its debts as they mature, or the calling of a
meeting of any Borrower's or any Subsidiary's creditors for purposes
of compromising any Borrower's or any Subsidiary's debts;
(f) the commencement by or against any Borrower or any
Subsidiary of any bankruptcy, insolvency, arrangement,
reorganization, receivership or similar proceedings under any federal
or state law and, in the event any such proceeding is commenced
against any Borrower or any Subsidiary, such proceeding is not
dismissed within sixty (60) days;
(g) the occurrence of a Change of Control;
(h) the occurrence of a default or event of default (in each case
which shall continue beyond the expiration of any applicable grace periods)
under, or the occurrence of any event that would permit the acceleration of
the maturity of any note, agreement or instrument evidencing (i) any
Subordinated Debt or (ii) any other Indebtedness of any Borrower or any of
its Subsidiaries and the aggregate principal amount of all such other
Indebtedness with respect to which a default or an event of default has
occurred, or the maturity of which is permitted to be accelerated, exceeds
$250,000;
(i) any material covenant, agreement or obligation of any party
contained in or evidenced by any of the Credit Documents shall cease
to be enforceable in accordance with its terms, or any party (other
than the Agent or the Lenders) to any Credit Document shall deny or
disaffirm its obligations under any of the Credit Documents, or any
Credit Document shall be canceled, terminated, revoked or rescinded
without the express prior written consent
96
of the Agent, or any action or proceeding shall have been commenced
by any Person (other than the Agent or any Lender) seeking to cancel,
revoke, rescind or disaffirm the obligations of any party to any
Credit Document, or any court or other governmental authority shall
issue a judgment, order, decree or ruling to the effect that any of
the payment obligations of any party to any Credit Document is
illegal, invalid or unenforceable, or the Liens created under the
Security Documents shall cease to be first priority perfected Liens
(except for Permitted Liens);
(j) (i) any holder of Subordinated Debt alleges (or any
governmental authority with applicable jurisdiction determines) that
the Subordinated Debt is not subordinated to any of the Obligations
or (ii) the subordination provisions in any agreement relating to
Subordinated Debt shall, in whole or in part, terminate, cease to be
effective or cease to be legally valid, binding and enforceable as to
any holder of the Subordinated Debt; or
(k) one or more judgments or decrees shall be entered against
one or more of the Borrowers or any Subsidiary involving a liability
of $250,000 or more in the aggregate (to the extent not paid or
covered by insurance (i) provided by a carrier who has acknowledged
coverage and has the ability to perform or (ii) as determined by the
Agent in its reasonable discretion) and any such judgments or decrees
shall not have been vacated, discharged or stayed or bonded pending
appeal within 30 days from the entry thereof.
11.2 ACCELERATION.
Upon the occurrence of an Event of Default which has not been cured by the
Borrowers or waived by the Agent at the direction of the Required Lenders, the
Agent shall, upon the written, telecopied or telex request of the Required
Lenders, and by delivery of written notice to the Borrowers from the Agent, take
any or all of the following actions, without prejudice to the rights of the
Agent, any Lender or the holder of any Note to enforce its claims against any
Borrower: (a) declare all Obligations to be immediately due and payable (except
with respect to any Event of Default set forth in Section 11.1(e) or (f) hereof
in which case all Obligations shall automatically become immediately due and
payable without the necessity of any notice or other demand) without
presentment, demand, protest or any other action or obligation of the Agent or
any Lender, (b) immediately terminate this Credit Agreement and the Commitments
hereunder; and at all times thereafter, all loans and advances made by any
Lender pursuant to this Credit Agreement shall be at such Lender's sole
discretion and (c) enforce any and all rights and interests created and existing
under the Credit Documents or arising under applicable law, including, without
limitation, all rights and remedies existing under the Security Documents and
all rights of set-off.
In addition, upon demand by the Agent or the Required Lenders after
the occurrence of any Event of Default, the Borrowers shall deposit with
the Agent for the benefit of the Lenders with respect to each Letter of
Credit then outstanding, promptly upon such demand, cash or Cash
Equivalents in an amount equal to the greatest amount for which such
Letter of Credit may be drawn. Such deposit shall be held by the Agent
for the benefit of the Issuing Bank and the other Lenders as security for,
and to provide for the payment of, outstanding Letters of Credit.
97
The foregoing rights shall be effective only after and during the
continuance of an Event of Default and the enumeration of such rights
herein is not intended to be exhaustive and the exercise of any right
shall not preclude the exercise of any other rights, all of which shall be
cumulative.
ARTICLE XII
TERMINATION
Except as otherwise provided in Article XI of this Credit Agreement,
the Revolving Credit Commitments made hereunder shall terminate on the
Maturity Date and all then outstanding Revolving Loans and Term Loans
shall be immediately due and payable in full. Unless sooner demanded, all
Obligations shall become due and payable as of any termination hereunder
or under Article XI hereof and, pending a final accounting (which the
Agent agrees to complete in a timely manner), the Agent may withhold any
balances in the Borrowers' Revolving Loan accounts, unless supplied with a
satisfactory indemnity to cover all of the Obligations, whether absolute
or contingent. All of the Agent's and the Lenders' rights, liens and
security interests shall continue after any termination until all
Obligations (other than contingent indemnity obligations) have been paid
and satisfied in full.
ARTICLE XIII
THE AGENT
13.1 APPOINTMENT OF AGENT.
(a) Each Lender hereby designates FUCC as Agent to act as herein
specified. Each Lender hereby irrevocably authorizes, and each holder of
any Note or participation in any Letter of Credit by the acceptance of a
Note or participation shall be deemed irrevocably to authorize, the Agent
to take such action on its behalf under the provisions of this Credit
Agreement and the Notes and any other instruments and agreements referred
to herein and to exercise such powers and to perform such duties hereunder
and thereunder as are specifically delegated to or required of the Agent by
the terms hereof and thereof and such other powers as are reasonably
incidental thereto. The Agent shall hold all Collateral and all payments
of principal, interest, Fees, charges and expenses received pursuant to
this Credit Agreement or any other Credit Document for the ratable benefit
of the Lenders. The Agent may perform any of its duties hereunder by or
through its agents or employees.
(b) The provisions of this Article XIII are solely for the
benefit of the Agent and the Lenders, and none of the Borrowers shall
have any rights as a third party beneficiary of any of the provisions
hereof (other than Section 13.9). In performing its functions and
duties under this Credit Agreement, the Agent shall act solely as
agent of the Lenders and does not
98
assume and shall not be deemed to have assumed any obligation toward
or relationship of agency or trust with or for any Borrower.
(c) Without limiting the generality of this Section 13.1, each
Lender expressly authorizes the Agent to determine, subject to the
terms of this Credit Agreement, on behalf of such Lender whether or
not Inventory or Accounts shall be deemed to constitute Eligible
Accounts Receivable, Eligible New Equipment, Eligible Parts and
Supplies Inventory and Eligible Rental Equipment. Such authorization
may be withdrawn by the Required Lenders; provided, however, that
unless otherwise agreed by the Agent such withdrawal of authorization
shall not become effective until the thirtieth Business Day after
receipt of such notice by the Agent. Thereafter, the Required
Lenders shall jointly instruct the Agent in writing regarding such
matters with such frequency as the Required Lenders shall jointly
determine.
13.2 NATURE OF DUTIES OF AGENT.
The Agent shall have no duties or responsibilities except those
expressly set forth in this Credit Agreement. Neither the Agent nor any
of its officers, directors, employees or agents shall be liable for any
action taken or omitted by it as such hereunder or in connection herewith,
unless caused by its or their gross negligence or willful misconduct. The
duties of the Agent shall be mechanical and administrative in nature; the
Agent shall not have by reason of this Credit Agreement a fiduciary
relationship in respect of any Lender; and nothing in this Credit
Agreement, expressed or implied, is intended to or shall be so construed
as to impose upon the Agent any obligations in respect of this Credit
Agreement except as expressly set forth herein.
13.3 LACK OF RELIANCE ON AGENT.
(a) Independently and without reliance upon the Agent, each Lender, to
the extent it deems appropriate, has made and shall continue to make (i)
its own independent investigation of the financial or other condition and
affairs of each Borrower in connection with the taking or not taking of any
action in connection herewith and (ii) its own appraisal of the
creditworthiness of each Borrower, and, except as expressly provided in
this Credit Agreement, the Agent shall have no duty or responsibility,
either initially or on a continuing basis, to provide any Lender with any
credit or other information with respect thereto, whether coming into its
possession before the making of the Revolving Loans or at any time or times
thereafter.
(b) The Agent shall not be responsible to any Lender for any
recitals, statements, information, representations or warranties
herein or in any document, certificate or other writing delivered in
connection herewith or for the execution, effectiveness, genuineness,
validity, enforceability, collectibility, priority or sufficiency of
this Credit Agreement or the Notes or the financial or other
condition of any Borrower. The Agent shall not be required to make
any inquiry concerning either the performance or observance of any of
the terms, provisions or conditions of this Credit Agreement or the
Notes, or the financial condition of
99
any Borrower, or the existence or possible existence of any Default
or Event of Default, unless specifically requested to do so in
writing by any Lender.
13.4 CERTAIN RIGHTS OF THE AGENT.
The Agent shall have the right to request instructions from the
Required Lenders or, as required, each of the Lenders. If the Agent shall
request instructions from the Required Lenders with respect to any act or
action (including the failure to act) in connection with this Credit
Agreement, the Agent shall be entitled to refrain from such act or taking
such action unless and until the Agent shall have received instructions
from the Required Lenders, and the Agent shall not incur liability to any
Person by reason of so refraining. Without limiting the foregoing, no
Lender shall have any right of action whatsoever against the Agent as a
result of the Agent acting or refraining from acting hereunder in
accordance with the instructions of the Required Lenders.
13.5 RELIANCE BY AGENT.
The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, statement,
certificate, telex teletype or telecopier message, cablegram, radiogram,
order or other documentary, teletransmission or telephone message believed
by it to be genuine and correct and to have been signed, sent or made by
the proper person. The Agent may consult with legal counsel (including
counsel for the Borrowers with respect to matters concerning the
Borrowers), independent public accountants and other experts selected by
it and shall not be liable for any action taken or omitted to be taken by
it in good faith in accordance with the advice of such counsel,
accountants or experts.
13.6 INDEMNIFICATION OF AGENT.
To the extent the Agent is not reimbursed and indemnified by the Borrowers,
each Lender will reimburse and indemnify the Agent, in proportion to its
respective Commitment, for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
(including counsel fees and disbursements) or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against the
Agent in performing its duties hereunder, in any way relating to or arising out
of this Credit Agreement, provided, that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the Agent's
gross negligence or willful misconduct.
13.7 THE AGENT IN ITS INDIVIDUAL CAPACITY.
With respect to its obligation to lend under this Credit Agreement,
the Loans made by it and the Notes issued to it, its participation in
Letters of Credit issued hereunder, and all of its rights and obligations
as a Lender hereunder and under the other Credit Documents, the Agent
shall have the same rights and powers hereunder as any other Lender or
holder of Notes or participation interests and may exercise the same as
though it was not performing the duties specified herein; and the terms
"Lenders", "Required Lenders", "holders of Notes", or any similar terms
shall, unless the context clearly otherwise indicates, include the Agent
in its individual capacity. The Agent may accept deposits from, lend
money to, acquire equity interests in, and generally engage in any kind of
banking, trust, financial advisory or other business with the Borrowers or
any Affiliate of the Borrowers as if it were not performing the duties
specified herein, and may accept fees and other consideration from the
Borrowers for services in connection with this Credit Agreement and
otherwise without having to account for the same with the Lenders.
13.8 HOLDERS OF NOTES.
100
The Agent may deem and treat the payee of any Note as the owner
thereof for all purposes hereof unless and until a written notice of the
assignment or transfer thereof shall have been filed with the Agent. Any
request, authority or consent of any Person who, at the time of making
such request or giving such authority or consent, is the holder of any
Note, shall be conclusive and binding on any subsequent holder, transferee
or assignee of such Note or of any Note or Notes issued in exchange
therefor.
13.9 SUCCESSOR AGENT.
(a) The Agent may, upon ten (10) Business Days' notice to the
Lenders and the Borrowers, resign at any time (effective upon the
appointment of a successor Agent pursuant to the provisions of this
Section 13.9(a)) by giving written notice thereof to the Lenders and
the Borrowers. Upon any such resignation, the Required Lenders shall
have the right, upon ten (10) days' notice, to appoint a successor
Agent. If no successor Agent shall have been so appointed by the
Required Lenders, and shall have accepted such appointment, within
thirty (30) days after the retiring Agent's giving of notice of
resignation, then, upon ten (10) days' notice, the retiring Agent
may, on behalf of the Lenders, appoint a successor Agent, which shall
be a bank or a trust company or other financial institution which
maintains an office in the United States, or a commercial bank
organized under the laws of the United States of America or of any
State thereof, or any Affiliate of such bank or trust company or
other financial institution which is engaged in the banking business,
having a combined capital and surplus of at least $500,000,000.
Notwithstanding anything herein to the contrary, any successor Agent
(whether appointed by the Required Lenders or the Agent) shall have
been approved in writing by the Borrowers (such approval not to be
unreasonably withheld).
(b) Upon the acceptance of any appointment as Agent hereunder by
a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties
of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations under this Credit Agreement. After
any retiring Agent's resignation hereunder as Agent, the provisions
of this Article XIII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this
Credit Agreement.
13.10 COLLATERAL MATTERS.
(a) Each Lender authorizes and directs the Agent to enter into
the Security Documents for the benefit of the Lenders. Each Lender
authorizes and directs the Agent to make such changes to the form
Acknowledgment Agreement attached hereto as Exhibit A as the Agent
deems necessary in order to obtain any Acknowledgment Agreement from
any landlord, warehouseman, filler, packer or processor of any
Borrower. Each Lender hereby agrees, and each holder of any Note by
the acceptance thereof will be deemed to agree, that, except as
otherwise set forth herein, any action taken by the Required Lenders
or each of the Lenders, as applicable, in accordance with the
provisions of this Credit Agreement or the Security Documents, and
the exercise by the Required Lenders or each of the Lenders, as
101
applicable, of the powers set forth herein or therein, together with
such other powers as are reasonably incidental thereto, shall be
authorized and binding upon all of the Lenders. The Agent is hereby
authorized on behalf of all of the Lenders, without the necessity of
any notice to or further consent from any Lender, from time to time
prior to an Event of Default, to take any action with respect to any
Collateral or Security Document which may be necessary or appropriate
to perfect and maintain perfected the security interest in and liens
upon the Collateral granted pursuant to the Security Documents.
(b) The Lenders hereby authorize the Agent, at its option and in
its discretion, to release any Lien granted to or held by the Agent
upon any Collateral (i) upon termination of the Commitments and
payment in cash and satisfaction of all of the Obligations (including
the Letter of Credit Obligations) at any time arising under or in
respect of this Credit Agreement or the Credit Documents or the
transactions contemplated hereby or thereby or (ii) constituting
property being sold or disposed of upon receipt of the proceeds of
such sale by the Agent if the applicable Borrower certifies to the
Agent that the sale or disposition is made in compliance with Section
9.3 hereof (and the Agent may rely conclusively on any such
certificate, without further inquiry). Upon request by the Agent at
any time, the Lenders will confirm in writing the Agent's authority
to release particular types or items of Collateral pursuant to this
Section 13.10(b).
(c) Upon any sale and transfer of Collateral which is expressly
permitted pursuant to the terms of this Credit Agreement, or consented to
in writing by the Required Lenders or all of the Lenders, as applicable,
and upon at least five (5) Business Days' prior written request by the
applicable Borrower, the Agent shall (and is hereby irrevocably authorized
by the Lenders to) execute such documents as may be necessary to evidence
the release of the Liens granted to the Agent for the benefit of the
Lenders herein or pursuant hereto upon the Collateral that was sold or
transferred; provided, that (i) the Agent shall not be required to execute
any such document on terms which, in the Agent's opinion, would expose the
Agent to liability or create any obligation or entail any consequence other
than the release of such Liens without recourse or warranty and (ii) such
release shall not in any manner discharge, affect or impair the Obligations
or any Liens upon (or obligations of such Borrower or any Subsidiary in
respect of) all interests retained by such Borrower or any Subsidiary,
including (without limitation) the proceeds of the sale, all of which shall
continue to constitute part of the Collateral. In the event of any sale or
transfer of Collateral, or any foreclosure with respect to any of the
Collateral, the Agent shall be authorized to deduct all of the expenses
reasonably incurred by the Agent from the proceeds of any such sale,
transfer or foreclosure.
(d) The Agent shall have no obligation whatsoever to the Lenders
or to any other Person to assure that the Collateral exists or is
owned by the Borrowers or any Subsidiary or is cared for, protected
or insured or that the liens granted to the Agent herein or pursuant
hereto have been properly or sufficiently or lawfully created,
perfected, protected or enforced or are entitled to any particular
priority, or to exercise or to continue exercising at all or in any
manner or under any duty of care, disclosure or fidelity any of the
rights, authorities and
102
powers granted or available to the Agent in this Section 13.10 or in any of the
Security Documents, it being understood and agreed that in respect of the
Collateral, or any act, omission or event related thereto, the Agent may act in
any manner it may deem appropriate, in its sole discretion, given the Agent's
own interest in the Collateral as one of the Lenders and that the Agent shall
have no duty or liability whatsoever to the Lenders, except for its gross
negligence or willful misconduct.
13.11 ACTIONS WITH RESPECT TO DEFAULTS.
In addition to the Agent's right to take actions on its own accord as
permitted under this Credit Agreement, the Agent shall take such action
with respect to a Default or Event of Default as shall be directed by the
Required Lenders; provided, that, until the Agent shall have received such
directions, the Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such Default
or Event of Default as it shall deem advisable and in the best interests
of the Lenders.
13.12 DELIVERY OF INFORMATION.
The Agent shall not be required to deliver to any Lender originals or
copies of any documents, instruments, notices, communications or other
information received by the Agent from the Borrowers, any Subsidiary, the
Required Lenders, any Lender or any other Person under or in connection
with this Credit Agreement or any other Credit Document except (a) as
specifically provided in this Credit Agreement or any other Credit
Document and (b) as specifically requested from time to time in writing by
any Lender with respect to a specific document, instrument notice or other
written communication received by and in the possession of the Agent at
the time of receipt of such request and then only in accordance with such
specific request.
ARTICLE XIV
MISCELLANEOUS
14.1 WAIVERS.
Each Borrower hereby waives due diligence, demand, presentment and protest
and any notices thereof as well as notice of nonpayment. No delay or omission
of the Agent or the Lenders to exercise any right or remedy hereunder, whether
before or after the happening of any Event of Default, shall impair any such
right or shall operate as a waiver thereof or as a waiver of any such Event of
Default. No single or partial exercise by the Agent or the Lenders of any right
or remedy shall preclude any other or further exercise thereof, or preclude any
other right or remedy.
14.2 JURY TRIAL.
TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH BORROWER, THE AGENT
AND THE LENDERS EACH HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY
ACTION OR PROCEEDING ARISING OUT OF THIS CREDIT AGREEMENT, THE CREDIT
DOCUMENTS OR ANY OTHER AGREEMENTS OR TRANSACTIONS RELATED HERETO OR
THERETO.
14.3 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE.
103
(a) THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL
BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK. Any legal action or proceeding with
respect to this Credit Agreement or any other Credit Document may be
brought in the courts of the State of North Carolina in Mecklenburg
County or of the United States for the Western District of North
Carolina or of the State of New York or of the United States for the
Southern District of New York, and, by execution and delivery of this
Credit Agreement, each of the Borrowers hereby irrevocably accepts
for itself and in respect of its property, generally and
unconditionally, the nonexclusive jurisdiction of such courts. Each
of the Borrowers further irrevocably consents to the service of
process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to it at the address set out for
notices pursuant to Section 14.5, such service to become effective
three (3) days after such mailing. Nothing herein shall affect the
right of the Agent or any Lender to serve process in any other manner
permitted by law or to commence legal proceedings or to otherwise
proceed against any Borrower in any other jurisdiction.
(b) Each of the Borrowers hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue
of any of the aforesaid actions or proceedings arising out of or in
connection with this Credit Agreement or any other Credit Document
brought in the courts referred to in subsection (a) above and hereby
further irrevocably waives and agrees not to plead or claim in any
such court that any such action or proceeding brought in any such
court has been brought in an inconvenient forum.
14.4 ARBITRATION.
(a) Notwithstanding the provisions of Section 14.3 to the contrary,
upon demand of any party hereto, whether made before or after institution
of any judicial proceeding, any dispute, claim or controversy arising out
of, connected with or relating to this Credit Agreement and other Credit
Documents ("Disputes") between or among parties to this Credit 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 Credit Agreement.
Arbitration shall be conducted under and governed by the
Commercial Financial Disputes 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. 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 applicable statutes of
limitation shall apply to any Dispute. A judgment upon the award may
be entered
104
in any court having jurisdiction. The panel from which all
arbitrators are selected shall be comprised of licensed attorneys.
The single arbitrator selected for expedited procedure shall be a
retired judge from the highest court of general jurisdiction, state
or federal, of the state where the hearing will be conducted or if
such person is not available to serve, the single arbitrator may be a
licensed attorney. Notwithstanding the foregoing, this arbitration
provision does not apply to disputes under or related to swap
agreements.
(b) Notwithstanding the preceding binding arbitration
provisions, the Agent, the Lenders and the Borrowers agree to
preserve, without diminution, certain remedies that the 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 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 Credit 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 Credit Agreement from
which no appeal has been taken or is available.
14.5 NOTICES.
Except as otherwise provided herein, all notices and correspondences
hereunder shall be in writing and sent by certified or registered mail
return receipt requested, or by overnight delivery service, with all
charges prepaid, if to the Agent, then to First Union Commercial
Corporation, One First Union Center, 000 Xxxxx Xxxxxxx Xxxxxx, XX-0,
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000, Attention: Xxxx X. Xxxxxx, Senior
Vice President, if to the Borrowers, then to Borrowers at 0000 Xxxxxxx
Xxxxxx, Xxxxx 0000, Xxxxxxxx, Xxxxxxxx 00000, Attention: Xxxx X.
Xxxxxxxxx, Vice President, Secretary, with a copy to Sandford E. Perl,
Xxxxxxxx & Xxxxx, 000 Xxxx Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, Fax
No. 000-000-0000 and to any Lender, at the address set forth beneath the
signature of such Lender contained herein,
92
105
or by facsimile transmission, promptly confirmed in writing sent by first
class mail, if to the Agent, at 000-000-0000, and if to the Borrowers at
000-000-0000 and if to any Lender at the facsimile number set forth
beneath the signature of such Lender contained herein. All such notices
and correspondence shall be deemed given (i) if sent by certified or
registered mail, three (3) Business Days after being postmarked, (ii) if
sent by overnight delivery service, when received at the above stated
addresses or when delivery is refused and (iii) if sent by facsimile
transmission, when receipt of such transmission is acknowledged; provided,
that notices to the Agent shall not be effective until received.
14.6 ASSIGNABILITY.
(a) No Borrower shall have the right to assign this Credit
Agreement or any interest therein except with the prior written
consent of the Agent.
(b) Notwithstanding subsection (c) of this Section 14.6, nothing
herein shall restrict, prevent or prohibit any Lender from (i)
pledging its Loans hereunder to a Federal Reserve Bank in support of
borrowings made by such Lender from such Federal Reserve Bank or (ii)
granting assignments or participations in such Lender's Loans and/or
Commitments hereunder to its parent company and/or to any Affiliate
of such Lender or to any existing Lender or Affiliate thereof. Any
Lender may make, carry or transfer Loans at, to or for the account
of, any of its branch offices or the office of an Affiliate of such
Lender except to the extent such transfer would result in increased
costs to the Borrowers.
(c) Each Lender may, with the consent of the Agent (such consent not
to be unreasonably withheld or delayed) and with the consent of the
Borrowers prior to the occurrence of a Default or Event of Default
hereunder (such consent not to be unreasonably withheld or delayed), assign
to one or more banks or other financial institutions all or a portion of
its rights and obligations under this Credit Agreement and the Notes;
provided, that (i) for each such assignment, the parties thereto shall
execute and deliver to the Agent, for its acceptance and recording in the
Register (as defined below), an Assignment and Acceptance, together with
any Note or Notes subject to such assignment and a processing and
recordation fee of $2,500 to be paid by the assignee, (ii) no such
assignment shall be for less than $5,000,000 of the Commitments or, if
less, the entire remaining Commitments of such Lender, (iii) if such
assignee is a Foreign Lender, all of the requirements of Section 2.7(b)
shall have been satisfied as a condition to such assignment and (iv) each
such assignment shall be of a uniform, and not a varying, percentage of all
rights and obligations under and in respect of both the Revolving Credit
Commitment and Term Loan Commitment of such Lender and all Loans of such
Lender. Upon such execution and delivery of the Assignment and Acceptance
to the Agent, from and after the date specified as the effective date in
the Assignment and Acceptance (the "Acceptance Date"), (x) the assignee
thereunder shall be a party hereto, and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment
and Acceptance, such assignee shall have the rights and obligations of a
Lender hereunder and (y) the assignor thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights (other than any rights it
may have pursuant to Section 14.8 hereof which will survive) and be
released from its obligations under this
106
Credit Agreement (and, in the case of an Assignment and Acceptance
covering all or the remaining portion of an assigning Lender's rights
and obligations under this Credit Agreement, such Lender shall cease
to be a party hereto).
(d) By executing and delivering an Assignment and Acceptance,
the assignee thereunder confirms and agrees as follows: (i) other
than as provided in such Assignment and Acceptance, the assigning
Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Credit Agreement
or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Credit Agreement, the Notes or any other
instrument or document furnished pursuant hereto, (ii) such assigning
Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the
Borrowers or the performance or observance by the Borrowers of any of
its obligations under this Credit Agreement or any other instrument
or document furnished pursuant hereto, (iii) such assignee confirms
that it has received a copy of this Credit Agreement, together with
copies of the financial statements referred to in Section 7.1 hereof
and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into such
Assignment and Acceptance, (iv) such assignee will, independently and
without reliance upon the Agent, such assigning Lender or any other
Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Credit Agreement, (v) such
assignee appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers under this Credit
Agreement as are delegated to the Agent by the terms hereof, together
with such powers as are reasonably incidental thereto and (vi) such
assignee agrees that it will perform in accordance with their terms
all of the obligations which by the terms of this Credit Agreement
are required to be performed by it as a Lender.
(e) The Agent shall maintain at its address referred to in Section
14.5 hereof a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and
addresses of the Lenders and the Commitments of, and principal amount of
the Loans owing to, each Lender from time to time (the "Register"). The
entries in the Register shall be conclusive and binding for all purposes,
absent manifest error, and the Borrowers, the Agent and the Lenders may
treat each Person whose name is recorded in the Register as a Lender
hereunder for all purposes of this Credit Agreement. The Register and
copies of each Assignment and Acceptance shall be available for inspection
by the Borrowers or any Lender at any reasonable time and from time to time
upon reasonable prior notice.
(f) Upon its receipt of an Assignment and Acceptance executed by
an assigning Lender, together with the Note or Notes subject to such
assignment, the Agent shall, if such Assignment and Acceptance has
been completed and is in substantially the form of Exhibit B hereto,
(i) accept such Assignment and Acceptance, (ii) record the
information contained
94
107
therein in the Register and (iii) give prompt notice thereof to the
Borrowers. Within five (5) Business Days after its receipt of such
notice, the Borrowers shall execute and deliver to the Agent in
exchange for the surrendered Note or Notes (which the assigning
Lender agrees to promptly deliver to the Borrowers) a new Note or
Notes to the order of the assignee in an amount equal to the
Commitment or Commitments assumed by it pursuant to such Assignment
and Acceptance and, if the assigning Lender has retained a Commitment
or Commitments hereunder, a new Note or Notes to the order of the
assigning Lender in an amount equal to the Commitment or Commitments
retained by it hereunder. Such new Note or Notes shall re-evidence
the indebtedness outstanding under the old Notes or Notes and shall
be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Note or Notes, shall be dated the Closing
Date and shall otherwise be in substantially the form of the Note or
Notes subject to such assignments.
(g) Each Lender may sell participations (without the consent of the
Agent, the Borrowers or any other Lender) to one or more parties in or to
all or a portion of its rights and obligations under this Credit Agreement
(including, without limitation, all or a portion of its Commitments, the
Loans owing to it and the Note or Notes held by it); provided, that (i)
such Lender's obligations under this Credit Agreement (including, without
limitation, its Commitments to the Borrowers hereunder) shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) such Lender
shall remain the holder of any such Note for all purposes of this Credit
Agreement, (iv) the Borrowers, the Agent, and the other Lenders shall
continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Credit Agreement and (v)
such Lender shall not transfer, grant, assign or sell any participation
under which the participant shall have rights to approve any amendment or
waiver of this Credit Agreement except to the extent such amendment or
waiver would (A) extend the final maturity date or the date for the
payments of any installment of fees or principal or interest of any Loans
or Letter of Credit reimbursement obligations in which such participant is
participating, (B) reduce the amount of any installment of principal of the
Loans or Letter of Credit reimbursement obligations in which such
participant is participating, (C) except as otherwise expressly provided in
this Credit Agreement, reduce the interest rate applicable to the Loans or
Letter of Credit reimbursement obligations in which such participant is
participating, or (D) except as otherwise expressly provided in this Credit
Agreement, reduce any Fees payable hereunder.
(h) Each Lender agrees that, without the prior written consent
of the Borrowers and the Agent, it will not make any assignment or
sell a participation hereunder in any manner or under any
circumstances that would require registration or qualification of, or
filings in respect of, any Loan, Note or other Obligation under the
securities laws of the United States of America or of any
jurisdiction.
108
(i) In connection with the efforts of any Lender to assign its
rights or obligations or to participate interests, such Lender may
disclose any information in its possession regarding the Borrowers.
14.7 INFORMATION.
The Agent and each Lender (each, a "Lending Party") agrees to keep
confidential any information furnished or made available to it by the
Borrowers pursuant to this Credit Agreement that is marked confidential;
provided that nothing herein shall prevent any Lending Party from
disclosing such information (a) to any other Lending Party or any
Affiliate of any Lending Party, or any officer, director, employee, agent,
or advisor of any Lending Party or Affiliate of any Lending Party, (b) to
any other Person if reasonably incidental to the administration of the
credit facility provided herein, (c) as required by any law, rule, or
regulation, (d) upon the order of any court or administrative agency, (e)
upon the request or demand of any regulatory agency or authority, (f) that
is or becomes available to the public or that is or becomes available to
any Lending Party other than as a result of a disclosure by any Lending
Party prohibited by this Credit Agreement, (g) in connection with any
litigation to which such Lending Party or any of its Affiliates may be a
party, (h) to the extent necessary in connection with the exercise of any
remedy under this Credit Agreement or any other Credit Document, (i)
subject to provisions substantially similar to those contained in this
Section 14.7, to any actual or proposed participant or assignee and (j) to
Gold Sheets and other similar bank trade publications; such information to
consist of deal terms and other information customarily found in such
publications.
14.8 PAYMENT OF EXPENSES; INDEMNIFICATION.
The Borrowers agree to: (a) pay all reasonable out-of-pocket costs and
expenses of (i) the Agent in connection with (A) the negotiation, preparation,
execution and delivery and administration of this Credit Agreement and the other
Credit Documents and the documents and instruments referred to therein
(including, without limitation, the reasonable fees and expenses of special
counsel to the Agent and the fees and expenses of counsel for the Agent in
connection with collateral issues), and (B) any amendment, waiver or consent
relating hereto and thereto including, but not limited to, any such amendments,
waivers or consents resulting from or related to any work-out, re-negotiation or
restructure relating to the performance by the Borrowers under this Credit
Agreement and (ii) the Agent and the Lenders in connection with enforcement of
the Credit Documents and the documents and instruments referred to therein,
including, without limitation, in connection with any such enforcement, the
reasonable fees and disbursements of counsel for the Agent and each of the
Lenders (including the allocated costs of internal counsel). The Borrowers
shall and hereby agree to indemnify, defend and hold harmless the Agent, the
Issuing Bank and each of the Lenders and their respective directors, officers,
agents, employees and counsel from and against (x) any and all losses, claims,
damages, liabilities, deficiencies, judgments or expenses incurred by any of
them (except to the extent that it is finally judicially determined to have
resulted from their own gross negligence or willful misconduct and excluding
Excluded Taxes) arising out of or by reason of any litigation, investigation,
claim or proceeding which arises out of or is in any way related to (i) this
Credit Agreement, any Letter of Credit or the transactions contemplated thereby,
(ii) any actual or proposed use by any Borrower of the proceeds of the Loans or
(iii) the Agent's, the Issuing Bank's or the Lenders' entering into this Credit
Agreement, the other Credit Documents or any other agreements and documents
relating hereto, including, without limitation, amounts paid in settlement,
court costs and the fees and disbursements of counsel incurred in connection
with any such litigation, investigation, claim or proceeding or any advice
rendered in connection with any of the foregoing and (y) any such losses,
claims, damages, liabilities, deficiencies, judgments or expenses incurred in
connection with
96
109
any remedial or other action taken by any Borrower or any of the Lenders
in connection with compliance by any Borrower or any of its Subsidiaries,
or any of their respective properties, with any federal, state or local
environmental laws, acts, rules, regulations, orders, directions,
ordinances, criteria or guidelines. If and to the extent that the
obligations of any Borrower hereunder are unenforceable for any reason,
such Borrower hereby agrees to make the maximum contribution to the
payment and satisfaction of such obligations which is permissible under
applicable law. The Borrowers' obligations hereunder shall survive any
termination of this Credit Agreement and the other Credit Documents and
the payment in full of the Obligations, and are in addition to, and not in
substitution of, any other of their obligations set forth in this Credit
Agreement. In addition, the Borrowers shall, upon demand, pay to the
Agent and any Lender all costs and expenses (including the reasonable fees
and disbursements of counsel and other professionals) paid or incurred by
the Agent, the Issuing Bank or such Lender in (1) enforcing or defending
its rights under or in respect of this Credit Agreement, the other Credit
Documents or any other document or instrument now or hereafter executed
and delivered in connection herewith, (2) in collecting the Loans, (3) in
foreclosing or otherwise collecting upon the Collateral or any part
thereof and (4) obtaining any legal, accounting or other advice in
connection with any of the foregoing.
14.9 ENTIRE AGREEMENT, SUCCESSORS AND ASSIGNS.
This Credit Agreement along with the other Credit Documents and the
Fee Letter constitutes the entire agreement among the Borrowers, the Agent
and the Lenders, supersedes any prior agreements among them, and shall
bind and benefit the Borrowers and the Lenders and their respective
successors and permitted assigns.
14.10 AMENDMENTS, ETC.
No amendment or waiver of any provision of this Credit Agreement or any
other Credit Document, nor consent to any departure by any Borrower therefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Required Lenders, or if the Lenders shall not be parties thereto, by the
parties thereto and consented to by the Required Lenders, and each such
amendment, waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given; provided, that no amendment,
waiver or consent shall unless in writing and signed by all the Lenders, do any
of the following: (a) increase the Commitments of the Lenders (or of any
individual Lender) or subject the Lenders (or any individual Lender) to any
additional obligations, (b) except as otherwise expressly provided in this
Credit Agreement, reduce the principal of, or interest on, any Note or any
Letter of Credit reimbursement obligations or any fees hereunder, (c) postpone
any date fixed for any payment in respect of principal of, or interest on, any
Note or any Letter of Credit reimbursement obligations or any fees hereunder,
(d) change the percentage of the Commitments, or any minimum requirement
necessary for the Lenders or the Required Lenders to take any action hereunder,
(e) amend or waive this Section 14.10, or change the definition of Required
Lenders or (f) except as otherwise expressly provided in this Credit Agreement,
and other than in connection with the financing, refinancing, sale or other
disposition of any asset of the Borrowers permitted under this Credit Agreement,
release any Liens in favor of the Lenders on any of the Collateral and,
provided, further, that no amendment, waiver or consent affecting the rights or
duties of the Agent or the Issuing Bank under any Credit Document shall in any
event be effective, unless in writing and signed by the Agent and/or the Issuing
Bank, as applicable, in addition to the Lenders required hereinabove to take
such action. Notwithstanding any of the foregoing to the contrary, the consent
of the Borrowers shall not be required for any amendment, modification or waiver
of the provisions of Article XIII (other than the provisions of Section 13.9).
In addition, the Borrowers and the Lenders hereby authorize the Agent to modify
this
110
Credit Agreement by unilaterally amending or supplementing Schedule 1.1A
from time to time in the manner requested by the Borrowers, the Agent or
any Lender in order to reflect any assignments or transfers of the Loans
as provided for hereunder; provided, however, that the Agent shall
promptly deliver a copy of any such modification to the Borrowers and each
Lender.
14.11 NONLIABILITY OF AGENT AND LENDERS.
The relationship between any Borrower on the one hand and the Lenders
and the Agent on the other hand shall be solely that of borrower and
lender. Neither the Agent nor any Lender shall have any fiduciary
responsibilities to any Borrower. Neither the Agent nor any Lender
undertakes any responsibility to any Borrower to review or inform such
Borrower of any matter in connection with any phase of such Borrower's
business or operations.
14.12 INDEPENDENT NATURE OF LENDERS' RIGHTS.
The amounts payable at any time hereunder to each Lender under such
Lender's Note or Notes shall be a separate and independent debt.
14.13 COUNTERPARTS.
This Credit Agreement may be executed in any number of counterparts
and by the different parties hereto in separate counterparts, each of
which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument.
14.14 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 Agent pursuant to Section
14.5 or, in the case of the Lenders, shall have given to the Agent
written, telecopied or telex notice (actually received) at such office
that the same has been signed and mailed to it.
14.15 SEVERABILITY.
In case any provision in or obligation under this Credit Agreement or
the Notes or the other Credit Documents shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
14.16 HEADINGS DESCRIPTIVE.
The headings of the several sections and subsections of this Credit
Agreement, and the Table of Contents, are inserted for convenience only
and shall not in any way affect the meaning or construction of any
provision of this Credit Agreement.
14.17 MAXIMUM RATE.
Notwithstanding anything to the contrary contained elsewhere in this
Credit Agreement or in any other Credit Document, the Borrowers, the Agent
and the Lenders hereby agree that all
98
111
agreements among them under this Credit Agreement and the other Credit
Documents, whether now existing or hereafter arising and whether written
or oral, are expressly limited so that in no contingency or event
whatsoever shall the amount paid, or agreed to be paid, to the Agent or
any Lender for the use, forbearance, or detention of the money loaned to
any Borrower and evidenced hereby or thereby or for the performance or
payment of any covenant or obligation contained herein or therein, exceed
the Highest Lawful Rate. If due to any circumstance whatsoever,
fulfillment of any provisions of this Credit Agreement or any of the other
Credit Documents at the time performance of such provision shall be due
shall exceed the Highest Lawful Rate, then, automatically, the obligation
to be fulfilled shall be modified or reduced to the extent necessary to
limit such interest to the Highest Lawful Rate, and if from any such
circumstance any Lender should ever receive anything of value deemed
interest by applicable law which would exceed the Highest Lawful Rate,
such excessive interest shall be applied to the reduction of the principal
amount then outstanding hereunder or on account of any other then
outstanding Obligations and not to the payment of interest, or if such
excessive interest exceeds the principal unpaid balance then outstanding
hereunder and such other then outstanding Obligations, such excess shall
be refunded to the applicable Borrower. All sums paid or agreed to be
paid to the Agent or any Lender for the use, forbearance, or detention of
the Obligations and other indebtedness of the Borrowers to the Agent or
any Lender shall, to the extent permitted by applicable law, be amortized,
prorated, allocated and spread throughout the full term of such
indebtedness until payment in full so that the actual rate of interest on
account of all such indebtedness does not exceed the Highest Lawful Rate
throughout the entire term of such indebtedness. The terms and provisions
of this Section shall control every other provision of this Credit
Agreement and all agreements among the Borrowers, the Agent and the
Lenders.
14.18 RIGHT OF SETOFF.
In addition to and not in limitation of all rights of offset that any
Lender or other holder of a Note may have under applicable law, each
Lender or other holder of a Note shall, if any Event of Default has
occurred and is continuing and whether or not such Lender or such holder
has made any demand or the Obligations of any Borrower are matured, have
the right to appropriate and apply to the payment of the Obligations of
such Borrower all deposits (general or special, time or demand,
provisional or final) then or thereafter held by and other indebtedness or
property then or thereafter owing by such Lender or other holder,
including, without limitation, any and all amounts in the FUCC Account.
Any amount received as a result of the exercise of such rights shall be
reallocated among the Lenders as set forth in Section 2.8 hereof.
14.19 CONCERNING JOINT AND SEVERAL LIABILITY OF THE BORROWERS.
(a) Each of the Borrowers is accepting joint and several
liability hereunder in consideration of the financial accommodation
to be provided by the Lenders under this Credit Agreement, for the
mutual benefit, directly and indirectly, of each of the Borrowers and
in consideration of the undertakings of each of the Borrowers to
accept joint and several liability for the obligations of each of
them.
(b) Each of the Borrowers jointly and severally hereby
irrevocably and unconditionally accepts, not merely as a surety but
also as a co-debtor, joint and several
112
liability with the other Borrowers with respect to the payment and
performance of all of the Obligations, it being the intention of the
parties hereto that all the Obligations shall be the joint and
several obligations of each of the Borrowers without preferences or
distinction among them.
(c) If and to the extent that any of the Borrowers shall fail to
make any payment with respect to any of the Obligations as and when
due or to perform any of the Obligations in accordance with the terms
thereof, then in each such event, the other Borrowers will make such
payment with respect to, or perform, such Obligation.
(d) The obligations of each Borrower under the provisions of
this Section 14.19 constitute full recourse obligations of such
Borrower, enforceable against it to the full extent of its properties
and assets, irrespective of the validity, regularity or
enforceability of this Credit Agreement or any other circumstances
whatsoever.
(e) Except as otherwise expressly provided herein, each Borrower
hereby waives notice of acceptance of its joint and several liability,
notice of any Loan made under this Credit Agreement, notice of occurrence
of any Event of Default, or of any demand for any payment under this Credit
Agreement, notice of any action at any time taken or omitted by any Lender
under or in respect of any of the Obligations, any requirement of diligence
and, generally, all demands, notices and other formalities of every kind in
connection with this Credit Agreement. Each Borrower hereby assents to,
and waives notice of, any extension or postponement of the time for the
payment of any of the Obligations, the acceptance of any partial payment
thereon, any waiver, consent or other action or acquiescence by any Lender
at any time or times in respect of any default by any Borrower in the
performance or satisfaction of any term, covenant, condition or provision
of this Credit Agreement, any and all other indulgences whatsoever by any
Lender in respect of any of the Obligations, and the taking, addition,
substitution or release, in whole or in part, at any time or times, of any
security for any of the Obligations or in part, at any time or times, of
any security for any of the Obligations or the addition, substitution or
release, in whole or in part, of any Borrower. Without limiting the
generality of the foregoing, each Borrower assents to any other action or
delay in acting or failure to act on the part of any Lender, including,
without limitation, any failure strictly or diligently to assert any right
or to pursue any remedy or to comply fully with the applicable laws or
regulations thereunder which might, but for the provisions of this Section
14.19, afford grounds for terminating, discharging or relieving such
Borrower, in whole or in part, from any of its obligations under this
Section 14.19, it being the intention of each Borrower that, so long as any
of the Obligations remain unsatisfied, the obligations of such Borrower
under this Section 14.19 shall not be discharged except by performance and
then only to the extent of such performance. The Obligations of each
Borrower under this Section 14.19 shall not be diminished or rendered
unenforceable by any winding up, reorganization, arrangement, liquidation,
reconstruction or similar proceeding with respect to any Borrower or any
Lender. The joint and several liability of the Borrowers hereunder
100
113
shall continue in full force and effect notwithstanding any
absorption, merger, amalgamation or any other change whatsoever in
the name, membership, constitution or place of formation of any
Borrower or any Lender.
(f) The provisions of this Section 14.19 are made for the
benefit of the Lenders and their respective successors and assigns,
and may be enforced by any such Person from time to time against any
of the Borrowers as often as occasion therefor may arise and without
requirement on the part of any Lender first to marshal any of its
claims or to exercise any of its rights against any of the other
Borrowers or to exhaust any remedies available to it against any of
the other Borrowers or to resort to any other source or means of
obtaining payment of any of the Obligations or to elect any other
remedy. The provisions of this Section 14.19 shall remain in effect
until all the Obligations shall have been paid in full or otherwise
fully satisfied. If at any time, any payment, or any part thereof,
made in respect of any of the Obligations, is rescinded or must
otherwise be restored or returned by any Lender upon the insolvency,
bankruptcy or reorganization of any of the Borrowers, or otherwise,
the provisions of this Section 14.19 will forthwith be reinstated in
effect, as though such payment had not been made.
(g) Notwithstanding any provision to the contrary contained
herein or in any other of the Credit Documents, to the extent the
joint obligations of a Borrower 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 Borrower
hereunder shall be limited to the maximum amount that is permissible
under applicable law (whether federal or state and including, without
limitation, the federal Bankruptcy Code).
(h) The Borrowers hereby agree, as among themselves, that if any
Borrower shall become an Excess Funding Borrower (as defined below), each
other Borrower shall, on demand of such Excess Funding Borrower (but
subject to the next sentence hereof and to subsection (B) below), pay to
such Excess Funding Borrower an amount equal to such Borrower's Pro Rata
Share (as defined below and determined, for this purpose, without reference
to the properties, assets, liabilities and debts of such Excess Funding
Borrower) of such Excess Payment (as defined below). The payment
obligation of any Borrower to any Excess Funding Borrower under this
Section 14.19(h) shall be subordinate and subject in right of payment to
the prior payment in full of the obligations of such Borrower under the
other provisions of this Credit Agreement, and such Excess Funding Borrower
shall not exercise any right or remedy with respect to such excess until
payment and satisfaction in full of all of such obligations. For purposes
hereof, (i) "Excess Funding Borrower" shall mean, in respect of any
Obligations arising under the other provisions of this Credit Agreement
(hereafter, the "Joint Obligations"), a Borrower that has paid an amount in
excess of its Pro Rata Share of the Joint Obligations; (ii) "Excess
Payment" shall mean, in respect of any Joint Obligations, the amount paid
by an Excess Funding Borrower in excess of its Pro Rata Share of such Joint
Obligations; and (iii) "Pro Rata Share", for the purposes of this Section
114
14.19(h), shall mean, for any Borrower, the ratio (expressed as a
percentage) of (A) the amount by which the aggregate present fair
saleable value of all of its assets and properties exceeds the amount
of all debts and liabilities of such Borrower (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding
the obligations of such Borrower hereunder) to (B) the amount by
which the aggregate present fair saleable value of all assets and
other properties of such Borrower and all of the other Borrowers
exceeds the amount of all of the debts and liabilities (including
contingent, subordinated, unmatured, and unliquidated liabilities,
but excluding the obligations of such Borrower and the other
Borrowers hereunder) of such Borrower and all of the other Borrowers,
all as of the Closing Date (if any Borrower becomes a party hereto
subsequent to the Closing Date, then for the purposes of this Section
14.19(h) such subsequent Borrower shall be deemed to have been a
Borrower as of the Closing Date and the information pertaining to,
and only pertaining to, such Borrower as of the date such Borrower
became a Borrower shall be deemed true as of the Closing Date).
[Remainder of Page Intentionally Left Blank]
102
115
IN WITNESS WHEREOF the parties hereto have caused this Credit
Agreement to be executed and delivered by their proper and duly authorized
officers as of the date set forth above.
BORROWERS: NATIONAL EQUIPMENT SERVICES, INC.,
a Delaware corporation
By: /s/ Xxxx X. Xxxxxxxxx
----------------------
Name: Xxxx X. Xxxxxxxxx
Title: Vice President
NES ACQUISITION CORP.,
a Delaware corporation
By: /s/ Xxxx X. Xxxxxxxxx
----------------------
Name: Xxxx X. Xxxxxxxxx
BAT ACQUISITION CORP.,
a Delaware corporation
By: /s/ Xxxx X. Xxxxxxxxx
----------------------
Name: Xxxx X. Xxxxxxxxx
Title: Vice President
AERIAL PLATFORMS, INC.,
a Georgia corporation
By: /s/ Xxxx X. Xxxxxxxxx
----------------------
Name: Xxxx X. Xxxxxxxxx
Title: Vice President
116
AGENT AND
LENDERS: FIRST UNION COMMERCIAL CORPORATION,
as Agent and a Lender
By: /s/ Xxxx X.Xxxxxx
-----------------
Name: Xxxx X. Xxxxxx
Title: Vice President
Lending Office (Base Rate Loans)
Address: One First Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Lending Office (Eurodollar Loans)
Address: One First Xxxxx Xxxxxx, 0xx Xxxxx
000 X. Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Notice Address
Address: Xxx Xxxxx Xxxxx Xxxxxx, 0xx Xxxxx
000 X. Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
104
117
COMERICA BANK,
as a Lender
By: /s/ Xxxxxxx X. Block
---------------------
Name: Xxxxxxx X. Block
Title: Vice President
Lending Office (Base Rate Loans)
Address: 000 Xxxxxxxx Xxxxxx
Xxx Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Attention: Xxxxxxx Xxxxx, CSA
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Lending Office (Eurodollar Loans)
Address: 000 Xxxxxxxx Xxxxxx
Xxx Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Attention: Xxxxxxx Xxxxx, CSA
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Notice Address
Address: Two Xxx Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Block
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
105
118
THE CIT GROUP/BUSINESS CREDIT, INC.,
as a Lender
By: /s/ Xxxx Xxxxx
---------------
Name: Xxxx Xxxxx
Title: Vice President
Lending Office (Base Rate Loans)
Address: 000 Xxxxxxx Xxxx.
Xxxxxxx, XX 00000
Attention: Xxxxx XxXxx, Operations
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Lending Office (Eurodollar Loans)
Address: 000 Xxxxxxx Xxxx.
Xxxxxxx, XX 00000
Attention: Xxxxx XxXxx, Operations
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Notice Address
Address: 000 Xxxxxxx Xxxx.
Xxxxxxx, XX 00000
Attention: Xxxxx XxXxx, Operations
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
106
119
BANKBOSTON, N.A.,
as a Lender
By: /s/ Xxxxx X. Xxxxx
------------------
Name: Xxxxx X. Xxxxx
Title: Managing Director
Lending Office (Base Rate Loans)
Address: Diversified Finance
000 Xxxxxxx Xxxxxx, XX 00-00-00
Xxxxxx, XX 00000
Attention: Xxxxxx Nwabozor, Administrative Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Lending Office (Eurodollar Loans)
Address: Diversified Finance
000 Xxxxxxx Xxxxxx, XX 00-00-00
Xxxxxx, XX 00000
Attention: Xxxxxx Nwabozor, Administrative Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Notice Address
Address: Commercial Loan Services
000 Xxxxxxx Xxxxxx, XX 00-00-00
Xxxxxx, XX 00000
Attention: Xxxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
107
120
XXXXXX TRUST AND SAVINGS BANK,
as a Lender
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Vice President
Lending Office (Base Rate Loans)
Address: 000 Xxxx Xxxxxx Xxxxxx, 00-X
Xxxxxxx, XX 00000
Attention: Xxxx Xxx Dillardi, Banking Services Rep.
Telephone: 000-000-0000
Facsimile: 000-000-0000
Lending Office (Eurodollar Loans)
Address: 000 Xxxx Xxxxxx Xxxxxx, 00-X
Xxxxxxx, XX 00000
Attention: Xxxx Xxx Dillardi, Banking Services Rep.
Telephone: 000-000-0000
Facsimile: 000-000-0000
Notice Address
Address: 000 Xxxx Xxxxxx Xxxxxx, 00-X
Xxxxxxx, XX 00000
Attention: Xxxx Xxx Dillardi, Banking Services Rep.
Telephone: 000-000-0000
Facsimile: 000-000-0000
121
BANKERS TRUST COMPANY,
as a Lender
By: /s/ Xxxx Xx Xxxxx
--------------------------------
Name: Xxxx Xx Xxxxx
Title: Assistant Vice President
Lending Office (Base Rate Loans)
Address: 000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
Lending Office (Eurodollar Loans)
Address: 000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
Notice Address
Address: 000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
109
122
AMERICAN NATIONAL BANK AND
TRUST COMPANY OF CHICAGO,
as a Lender
By: /s/ Xxxxxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxxxxx X. Xxxxxxx
Title: First Vice President
Lending Office (Base Rate Loans)
Address: 0 X. XxXxxxx, 0xx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxxx, Client Technician
Telephone: 000-000-0000
Facsimile: 000-000-0000
Lending Office (Eurodollar Loans)
Address: 0 X. XxXxxxx, 0xx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxxx, Client Technician
Telephone: 000-000-0000
Facsimile: 000-000-0000
Notice Address
Address: 0 X. XxXxxxx, 0xx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxxxx Xxxxxxx, First Vice President
Telephone: 000-000-0000
Facsimile: 000-000-0000
110
123
XXXXXX FINANCIAL, INC.,
as a Lender
By: /s/ Xxxxxx Xxxxxx
-----------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
Lending Office (Base Rate Loans)
Address: 000 Xxxx Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx Xxxx, Operations Manager
Telephone: 000-000-0000
Facsimile: 000-000-0000
Lending Office (Eurodollar Loans)
Address: 000 Xxxx Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx Xxxx, Operations Manager
Telephone: 000-000-0000
Facsimile: 000-000-0000
Notice Address
Address: 000 Xxxx 00xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxxxx, Account Executive
Telephone: 000-000-0000
Facsimile: 000-000-0000
111
124
MERCANTILE BUSINESS CREDIT INC.,
as a Lender
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
Lending Office (Base Rate Loans)
Address: 000 X. Xxxxxxxxx Xxxx., Xxxxx 000
Xx. Xxxxx, XX 00000
Attention: Xxxxxx Xxxxxx, Operations Officer
Telephone: 000-000-0000
Facsimile: 000-000-0000
Lending Office (Eurodollar Loans)
Address: 000 X. Xxxxxxxxx Xxxx., Xxxxx 000
Xx. Xxxxx, XX 00000
Attention: Xxxxxx Xxxxxx, Operations Officer
Telephone: 000-000-0000
Facsimile: 000-000-0000
Notice Address
Address: 000 X. Xxxxxxxxx Xxxx., Xxxxx 000
Xx. Xxxxx, XX 00000
Attention: Xxxxxxx Xxxxxx, Vice President
Telephone: 000-000-0000
Facsimile: 000-000-0000
112
125
EXHIBIT 4.6(i)
EXHIBIT A
FORM OF ACKNOWLEDGMENT AGREEMENT
THIS ACKNOWLEDGMENT AGREEMENT is made by ____________________________, a
______________ (together with its successors and assigns, the "Acknowledgor"),
for the benefit of FIRST UNION COMMERCIAL CORPORATION, as Agent (together with
all successors and assigns, the "Agent") for the Lenders (as defined in the
Credit Agreement described below).
WHEREAS, the Acknowledgor holds certain property of [Borrower] (the
"Borrower") at the location described in Exhibit A attached hereto (the
"Premises"); and
WHEREAS, the Lenders have provided a $115,000,000 credit facility (the
"Credit Facility") in favor of the Borrower, as evidenced and secured by, among
other things, (i) a credit agreement, dated as of July 1, 1997 (together with
all modifications, renewals or replacements, the "Credit Agreement"), executed
by Borrower, certain other borrowing entities parties thereto, the Lenders,
and the Agent; and (ii) a security agreement, dated as of July 1, 1997
(together with all modifications, renewals or replacements, the "Security
Agreement"), on all inventory now or hereafter delivered to or located or
installed at the Premises (the "Inventory;" the Credit Agreement, the Security
Agreement, UCC financing statements relating to the Security Agreement (the
"Financing Statements") and all other documents relating to, evidencing or
securing the Credit Facility being referred to herein collectively as the
"Credit Documents"); and
WHEREAS, the Lenders have requested the Acknowledgor to furnish the
Lenders certain assurances and agreements regarding the Inventory, which
assurances and agreements the Acknowledgor is willing to give as set forth
herein;
NOW, THEREFORE, for and in consideration of the sum of One Dollar ($1.00)
paid by each party to the other, receipt of which is hereby acknowledged, and
other good and valuable consideration, the Acknowledgor hereby certifies to and
agrees with the Agent and the Lenders as follows:
1. The Acknowledgor consents to the extensions of credit under the Credit
Facility, the execution of the Credit Documents, the collateral assignment of
any contracts between the Acknowledgor and the Borrower and the recordation of
the Financing Statements.
2. The Acknowledgor agrees that: (a) the Borrower is the owner of the
Inventory; (b) the Agent's lien upon or security interest in the Inventory is
prior and superior to any interest, lien or claim of any nature the
Acknowledgor may now have or hereafter obtain in the Inventory whether by
operation of law, contract or otherwise; and (c) either the Borrower or the
Agent may remove the Inventory from the Premises at any time without hindrance
on the part of the Acknowledgor. The Acknowledgor hereby waives any rights it
may now or hereafter have in the Inventory, including without limitation any
lien rights available under applicable law.
3. The Acknowledgor shall send to the Agent (in the manner provided
herein) a copy of any notice or statement sent to the Borrower by the
Acknowledgor with respect to the Inventory or amounts owed in connection
therewith. Such copy shall be sent to the Agent at the same time such notice or
statement is sent to the Borrower. Notices shall be sent to the Agent by
prepaid, registered or certified mail, addressed to the Agent at the following
address, or such other address as the Agent shall designate to the Acknowledgor
in writing:
126
FIRST UNION COMMERCIAL CORPORATION
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, XX 00000
Attention: [___________________]
Telephone: (704) [_____________]
Facsimile: (704) [_____________]
The Acknowledgor shall not pursue any right or remedy against the Borrower
until the Acknowledgor shall have given thirty (30) days' prior written notice
to the Agent as provided above.
EXECUTED under seal this ____ day of _______________, 199_.
ACKNOWLEDGOR:
By:
Name:
Title:
127
EXHIBIT B
FORM OF ASSIGNMENT AND ACCEPTANCE
THIS ASSIGNMENT AND ACCEPTANCE dated as of ________, 199_ is entered into
between ______________ ("Assignor") and __________________ ("Assignee").
Reference is made to the Credit Agreement, dated as of July 1, 1997
(together with all modifications, renewals or replacements, the "Credit
Agreement"), among National Equipment Services, Inc., certain other borrowing
entities party thereto, the financial institutions party thereto, and First
Union Commercial Corporation, as Agent. Terms defined in the Credit Agreement
are used herein with the same meanings.
1. The Assignor hereby sells and assigns, without recourse, to the
Assignee, and the Assignee hereby purchases and assumes, without recourse, from
the Assignor, effective as of the Effective Date set forth below, the interests
set forth below (the "Assigned Interest") in the Assignor's rights and
obligations under the Credit Agreement, including, without limitation, the
interests set forth below in the Commitments of the Assignor on the effective
date of the assignment designated below (the"Effective Date") and the Loans
and other extensions of credit owing to the Assignor which are outstanding on
the Effective Date, together with unpaid interest accrued on the assigned Loans
and other extensions of credit to the Effective Date and the amount, if any,
set forth below of the Fees accrued to the Effective Date for the account of
the Assignor. Each of the Assignor and the Assignee hereby makes and agrees to
be bound by all the representations, warranties and agreements set forth in
Section 14.6(d) of the Credit Agreement, a copy of which has been received by
each such party. From and after the Effective Date (i) the Assignee, if it is
not already a Lender under the Credit Agreement, shall be a party to and be
bound by the provisions of the Credit Agreement and, to the extent of the
interests assigned by this Assignment and Acceptance, have the rights and
obligations of a lender thereunder and (ii) the Assignor shall, to the extent
of the interests assigned by this Assignment and Acceptance, relinquish its
rights (other than any rights it may have pursuant to Section 14.8 of the
Credit Agreement which will survive) and be released from its obligations under
the Credit Agreement (and, in the case of an assignment of all or the remaining
portion of the Assignor's rights and obligations under the Credit Agreement,
the Assignor shall cease to be a party to the Credit Agreement).
2. The Assignor represents and warrants to the Assignee that (i) it is
the legal and beneficial owner of the interest being assigned hereby free and
clear of any adverse claim and (ii) it is legally authorized to enter into this
Assignment and Acceptance.
3. This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the State of New York.
4. Terms of Assignment
(a) Date of Assignment:
(b) Legal Name of Assignor:
(c) Legal Name of Assignee:
(d) Effective Date of Assignment:
1
128
(e) Revolving Credit Commitment
of Assignee after Assignment $__________
(f) Revolving Credit Commitment Percentage
of Assignee after Assignment __________%
(g) Revolving Loans of Assignee after Assignment $__________
(h) Revolving Credit Commitment
of Assignor after Assignment $__________
(i) Revolving Credit Commitment Percentage
of Assignor after Assignment __________%
(j) Revolving Loans of Assignor after Assignment $__________
(k) Term Loans
of Assignor after Assignment $__________
(l) Term Loans
of Assignee after Assignment $__________
The terms set forth above
are hereby agreed to:
________________________, as Assignor
By: ________________________________
Title: _____________________________
________________________, as Assignee
By: ________________________________
Title: _____________________________
CONSENTED TO:
FIRST UNION COMMERCIAL CORPORATION,
as Agent
By: ________________________________
Title: _____________________________
2
129
EXHIBIT C
FORM OF SOLVENCY CERTIFICATE
The undersigned treasurer of [name of Borrower] ("_______"), a
________________ , is familiar with the properties, business, assets and
liabilities of [name of Borrower] and is duly authorized to execute this
certificate on behalf of [name of Borrower].
Reference is made to that Credit Agreement dated as of July 1, 1997 among
National Equipment Services, Inc., NES Acquisition Corp., BAT Acquisition Corp.
and Aerial Platforms, Inc. ("the Borrowers"), First Union Commercial
Corporation, as Agent (the "Agent"), and the lenders from time to time parties
thereto (the "Lenders") (as the same may be amended, modified, extended or
restated from time to time, the "Credit Agreement"). All capitalized terms used
and not defined herein have the meanings stated in the Credit Agreement.
1. The undersigned certifies that he has made such investigation and
inquiries as to the financial condition of [name of Borrower] as he deems
necessary and prudent for the purpose of providing this Certificate. The
undersigned acknowledges that the Agent and the Lenders are relying on the truth
and accuracy of this Certificate in connection with making of the Loans under
the Credit Agreement.
2. The undersigned certifies that the financial information, projections
and assumptions which underlie and form the basis for the representations made
in this Certificate were reasonable when made and were made in good faith and
continue to be reasonable as of the date hereof.
BASED ON THE FOREGOING, the undersigned certifies that, both before and
after giving effect to the Loans:
A. [Name of Borrower] and its Subsidiaries, on a consolidated basis, are
able to pay their debts and other liabilities, contingent obligations and other
commitments as they mature in the normal course of business.
B. [Name of Borrower] and its Subsidiaries, on a consolidated basis, do not
intend to, and do not believe that they will, incur debts or liabilities beyond
their ability to pay as such debts and liabilities mature in their ordinary
course.
C. [Name of Borrower] and its Subsidiaries, on a consolidated basis, are
not engaged in any business or transaction, and are not about to engage in any
business or transaction, for which the assets of [name of Borrower] and its
Subsidiaries, on a consolidated basis, would constitute unreasonably small
capital after giving due consideration to the prevailing practice in the
industry in which [name of Borrower] and its Subsidiaries are engaged or are to
engage.
D. The present fair saleable value of the consolidated assets of [name of
Borrower] and its Subsidiaries, taken on a going concern basis, is not less than
the amount that will be required to pay the probable liability on the debts of
[name of Borrower] and its Subsidiaries, on a consolidated basis, as they become
absolute and matured.
130
IN WITNESS WHEREOF, the undersigned has executed this Certificate this
_____ day of July, 1997, in his capacity as the treasurer of [name of Borrower].
_____________________________________
Name: [name of Treasurer]
Title: Treasurer of [name of Borrower]
131
STATE OF ____________________ )
)
COUNTY OF ___________________ )
VERIFICATION
The undersigned, being first duly sworn, deposes and says that he is the
treasurer of [name of Borrower], a ______________, that he has read the
foregoing and to his personal knowledge the matters and statements contained
therein are true and accurate.
This the ______ day of July, 1997.
------------------------------
Sworn to and subscribed before me
this ______ day of July, 1997.
------------------------------
Notary Public
My Commission Expires:
------------------------------
132
EXHIBIT D
FORM OF LANDLORD LIEN WAIVER AGREEMENT
Drawn by and return to:
Xxxxx & Xxx Xxxxx, PLLC (_______)
000 Xxxxx Xxxxx Xx., 00xx Xxxxx
Xxxxxxxxx, X.X. 00000-0000
THIS LANDLORD LIEN WAIVER AGREEMENT (the "Agreement") is entered as of this
[DATE] by and between ___________________, a _______________ (the "Landlord"),
the owner of certain real property, buildings and improvements located in
___________________, and First Union Commercial Corporation, in its capacity as
agent (the "Agent") for itself and the other lenders (the "Lenders") providing
revolving credit and letter of credit facilities to National Equipment Services,
Inc. and certain other borrowing entities (collectively, the "Borrowers")
pursuant to that certain Credit Agreement dated as of July 1, 1997 (as it may be
amended from time to time, the "Credit Agreement").
Recitals:
1. The Lenders have agreed to provide the Borrowers with credit facilities
(the "Loans") up to an aggregate amount of $115,000,000 under the terms and
conditions of the Credit Agreement. The Borrowers have secured the repayment of
the Loans inter alia by granting the Agent, for the ratable benefit of the
Lenders, a first priority security interest in all of the Borrowers' accounts
receivable, general intangibles, patents, trademarks and inventory, whether now
owned or hereafter acquired, including without limitation, all raw materials,
work-in-process, finished goods, packaging materials and all other materials and
supplies of any nature related thereto, and all proceeds of any of the foregoing
(collectively, the "Collateral").
2. ___________________ has assumed lease obligations with respect to the
Premises (as hereinafter defined) for the purpose of storing and warehousing the
Collateral.
3. As a condition to extending the Loans, the Lenders and the Agent have
requested the Borrowers to obtain, and cause Landlord to provide, Landord's
waiver and subordination all of its rights as a lessor against any of the
Collateral for so long as the Loans remain outstanding. Landlord has agreed to
execute this Agreement upon request by the Borrowers.
NOW, THEREFORE, in consideration of the foregoing, and the mutual benefits
accruing to the Agent and Landlord as a result of the credit facilities
provided by the Lenders, the sufficiency and receipt of such consideration
being hereby acknowledged, the parties hereto agree as follows:
1. For so long as any of the Loans remain outstanding, Landlord hereby
waives, releases, and quit claims in favor of the Agent and each and every
party now or hereafter participating as a Lender under the credit Agreement all
rights that Landlord, or its successors and assigns, may now or hereafter have
to a lien, claim, charge or encumbrance of any kind or nature, arising by
statute, contract, common law or otherwise, relating to the storage of the
Collateral at any premises owned or controlled by Landlord (the "Premises").
2. For so long as any of the Loans remain outstanding, Landlord hereby
agrees that the liens and security interests existing in favor of the Agent, for
the ratable benefit of each and every party now or hereafter participating as a
Lender under the Credit Agreement, shall be prior and superior to (i) any and
all
133
rights of distraint, levy, and execution which Landlord may now or hereafter
have against the Collateral, (ii) any and all liens and security interests
which Landlord may now or hereafter have on and in the Collateral, and (iii)
any and all other rights, demands and claims of every nature whatsoever which
Landlord may now or hereafter have on or against the Collateral for any rent,
storage charge, or similar expense, cost or sum due or to become due Landlord
by any of the Borrowers under the provisions of any lease, storage agreement or
otherwise, and Landlord hereby subordinates all of its foregoing rights and
interests in the Collateral to the security interest of the Agent in the
Collateral.
3. Upon notice from the Agent that a default or event of default has
occurred under the Credit Agreement, Landlord agrees that the Agent or its
delegates or assigns may enter upon the Premises at any time or times, during
normal business hours, to inspect or remove the Collateral, or any part thereof,
from the Premises, without charge. The Agent shall repair or pay reasonable
compensation to Landlord for damage, if any, to the Premises caused by the
removal of Collateral.
4. Landlord represents and warrants: (a) that it has not assigned its
claims for payment, if any, nor its right to perfect or assert a lien of any
kind whatsoever against the Inventory; (b) that it has the right, power and
authority to execute this Agreement; and (c) that it holds legal title to the
Premises. Landlord further agrees to provide the Agent with prompt written
notice in the event that Landlord sells the Premises, or any portion thereof
where any of the Borrowers stores any Collateral.
5. This Agreement shall continue in effect during the term of the Credit
Agreement, and any extensions, renewals or modifications thereof and any
substitutions therefor, shall be binding upon the successors, assigns and
transferees of Landlord, and shall inure to the benefit of the transferees of
Landlord, and shall inure to the benefit of the Agent, each Lender, and their
respective successors and assigns. Landlord hereby waives notice of the Agent's
acceptance of and reliance on this Agreement.
134
IN WITNESS WHEREOF, Landlord and the Agent have each caused this Agreement
to be duly executed by their respective authorized representatives as of the
date first above written.
FIRST UNION COMMERCIAL CORPORATION,
as Agent for the Lenders
By:
Name:
Title:
[LANDLORD]
--------------------------------,
By:
Name:
Title:
Acknowledged and Agreed:
-----------------------------,as Lessee
By:
Name:
Title:
135
EXHIBIT E
FORM OF PLEDGE AGREEMENT
136
EXHIBIT F
FORM OF SECURITY AGREEMENT
137
EXHIBIT G-1
FORM OF REVOLVING NOTE
$________________ <>
FOR VALUE RECEIVED, the undersigned, NATIONAL EQUIPMENT SERVICES, INC., a
Delaware corporation (the "Company"), NES ACQUISITION CORP., BAT ACQUISITION
CORP. and AERIAL PLATFORMS, INC. (the "Subsidiary Borrowers") (hereinafter,
the Company and the Subsidiary Borrowers collectively referred to as the
"Borrowers" or individually referred to as a "Borrower"), jointly and severally
promise to pay to the order of [Payee Lender] (the "Lender") at c/o First Union
Commercial Corporation, as Agent for the Lender, One First Union Center, 000
Xxxxx Xxxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000 in lawful
money of the United States of America and in immediately available funds, the
principal amount of __________ Million Dollars ($__________), or such lesser
amounts as may then constitute the unpaid aggregate principal amount of all
Revolving Loans made by the Lender to the Borrowers pursuant to the Credit
Agreement (as defined below), at the times set forth in the Credit Agreement,
but no later than the Maturity Date.
The Borrowers further agree to jointly and severally pay interest at said
office, in like money, on the unpaid principal amount owing hereunder from time
to time outstanding from the date of disbursement on the dates and at the rates
specified in Article 4 of the Credit Agreement.
This promissory note is one of the Revolving Notes referred to in the Credit
Agreement, dated as of July 1, 1997 (together with all modifications, renewals
or replacements, the "Credit Agreement"), among the Borrowers, the Lender,
certain other financial institutions parties thereto, and First Union
Commercial Corporation, as agent ("Agent"), and is subject to, and entitled to,
all provisions and benefits thereof and is subject to optional and mandatory
prepayment in whole or in part as provided therein. Capitalized terms used
herein without definition shall have the meanings given to such terms in the
Credit Agreement. The Credit Agreement, among other things, provides [after
giving effect to the Assignment and Acceptance executed by the Lender and [name
of assigning Lender] as of the date hereof](1) for the making of Revolving Loans
by the Lender to the Borrowers from time to time in an aggregate amount not to
exceed at any time outstanding the U.S. dollar amount first above mentioned.
Upon the occurrence of any one or more of the Events of Default specified in
the Credit Agreement which have not been cured by the Borrowers or waived by
the Agent at the direction of the Required Lenders, the Agent shall, upon the
written, telecopied or telex request of the Required Lenders, and by delivery of
written notice to the Borrowers from the Agent, take any or all of the
following actions, without prejudice to the rights of the Agent, the Lender or
any holder of this promissory note to enforce its claims against the Borrowers:
(a) declare all Obligations due hereunder to be immediately due and payable
(except with respect to any Event of Default set forth in Section 11.1(e) of
the Credit Agreement, in which case all Obligations due hereunder shall
automatically become due and payable without the necessity of any notice or
other demand) without presentment, demand, protest or any other action or
obligation of the Lender, and (b) immediately terminate the Credit Agreement
and the Commitments thereunder.
_____________________________
(1) To be used for replacement Revolving Notes.
138
This promissory note is secured by security agreements and other collateral
documents dated as of July 1, 1997 [and re-evidences the indebtedness
outstanding on the date hereof with respect to the Revolving Loans which
indebtedness has been assigned to the Lender pursuant to Section 14.6 of the
Credit Agreement].(1)
The Borrowers hereby waive presentment, demand, protest and notice of any kind.
No failure to exercise, and no delay in exercising any rights hereunder on the
part of the holder hereof shall operate as a waiver of such rights.
THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS PROMISSORY NOTE SHALL
BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAWS PRINCIPLES THEREOF.
NATIONAL EQUIPMENT SERVICES, INC.
By: ________________________
Title: _____________________
NES ACQUISITION CORP.
By: ________________________
Title: _____________________
BAT ACQUISITION CORP.
By: ________________________
Title: _____________________
AERIAL PLATFORMS, INC.
By: ________________________
Title: _____________________
______________________
(1) To be used for replacement Revolving Notes.
139
EXHIBIT G-2
FORM OF TERM LOAN NOTE
$__________________ <>
FOR VALUE RECEIVED, the undersigned, NATIONAL EQUIPMENT SERVICES, INC., a
Delaware corporation (the "Company"), NES ACQUISITION CORP., BAT ACQUISITION
CORP. and AERIAL PLATFORMS, INC. (the "Subsidiary Borrowers") (hereinafter, the
Company and the Subsidiary Borrowers collectively referred to as the
"Borrowers" or individually referred to as a "Borrower"), jointly and severally
promise to pay to the order of [Payee Lender] (the "Lender") at c/o First Union
Commercial Corporation, as Agent for the Lender, One First Union Center, 000
Xxxxx Xxxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000 in lawful
money of the United States of America and in immediately available funds, the
principal amount of ___________ Million Dollars ($___________), or such lesser
amount as may then constitute the unpaid aggregate principal amount of all Term
Loans made by the Lender to the Borrowers pursuant to the Credit Agreement (as
defined below), at the times set forth in the Credit Agreement, but no later
than the Maturity Date.
The Borrowers further agree to jointly and severally pay interest at said
office, in like money, on the unpaid principal amount owing hereunder from time
to time outstanding from the date of disbursement on the dates and at the rates
specified in Article 4 of the Credit Agreement.
This promissory note is one of the Term Notes referred to in the Credit
Agreement, dated as of July 1, 1997 (together with all modifications, renewals
or replacements, the "Credit Agreement"), among the Borrowers, the Lender,
certain other financial institutions parties thereto, and First Union
Commercial Corporation, as agent ("Agent"), and is subject to, and entitled to,
all provisions and benefits thereof and is subject to optional and mandatory
prepayment in whole or in part as provided therein. Capitalized terms used
herein without definition shall have the meanings given to such terms in the
Credit Agreement. The Credit Agreement, among other things, provides [after
giving effect to the Assignment and Acceptance executed by the Lender and [name
of assigning Lender] as of the date hereof](1) for the making of Term Loans by
the lender to the Borrowers on the Closing Date in aggregate amount not to
exceed at any time outstanding the U.S. dollar amount first above mentioned.
Upon the occurrence of any one or more of the Events of Default specified in
the Credit Agreement which have not been cured by the Borrowers or waived by
the Agent at the direction of the Required Lenders, the Agent shall, upon the
written, telecopied or telex request of the Required Lenders, and by delivery
of written notice to the Borrowers from the Agent, take any or all of the
following actions, without prejudice to the rights of the Agent, the Lender or
any holder of this promissory note to enforce its claims against the Borrowers:
(a) declare all Obligations due hereunder to be immediately due and payable
(except with respect to any Event of Default set forth in Section 11.1(e) of
the Credit Agreement, in which case all Obligations due hereunder shall
automatically become immediately due and payable without the necessity of any
notice or other demand) without presentment, demand, protest or any other
action or obligation of the Lender; and (b) immediately terminate the Credit
Agreement and the Commitments thereunder.
This promissory note is secured by security agreements and other collateral
documents dated as of July 1, 1997 [and re-evidences the indebtedness
outstanding on the date hereof with respect to the Term Loans made on the
________________
(1) To be used for replacement Term Loan Notes.
140
Closing Date which indebtedness has been assigned to the Lender pursuant to
Section 14.6 of the Credit Agreement].(1)
The Borrowers hereby waive presentment, demand, protest and notice of any kind.
No failure to exercise, and no delay in exercising any rights hereunder on the
part of the holder hereof shall operate as a waiver of such rights.
THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS PROMISSORY NOTE SHALL
BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAWS PRINCIPLES THEREOF.
NATIONAL EQUIPMENT SERVICES, INC.
BY:________________________
Title:_____________________
NES ACQUISITION CORP.
BY:________________________
Title:_____________________
BAT ACQUISITION CORP.
BY:________________________
Title:_____________________
AERIAL PLATFORMS, INC.
BY:________________________
Title:_____________________
__________________
(1)To be used for replacement Term Loan Notes.
141
EXHIBIT H
FORM OF NOTICE OF BORROWING
_______________, 199____
First Union Commercial Corporation
as Agent for the Lenders
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: [_______________]
Ladies and Gentlemen:
The undersigned, National Equipment Services, Inc., a Delaware corporation
(the "Company"), on behalf of itself and on behalf of the other borrowing
entities parties to the Credit Agreement, dated as of July 1, 1997, among the
Company, such other Borrowers, certain financial institutions parties thereto,
and First Union Commercial Corporation, as agent (together with all
modifications, renewals or replacements, the "Credit Agreement"; capitalized
terms used herein shall have the meanings given such terms in the Credit
Agreement), hereby gives you notice, irrevocably, pursuant to Section 2.1(d) of
the Credit Agreement that the Company hereby requests, on behalf of the
Borrowers, borrowings under the Credit Agreement, and in that connection sets
forth below the information relating to such borrowings (the "Proposed
Borrowings") as required by Sections 2.1(d) of the Credit Agreement:
Interest Interest
Borrower Date of Borrowing Amount Rate Period
The requested funds shall be made available to the following accounts in
the amounts set forth below:
The Company hereby certifies, on behalf of the Borrowers, that the
following statements are true on the date hereof, and will be true on the date
of the Proposed Borrowing:
(A) the representations and warranties contained in the Credit Agreement
and in each other document executed in connection therewith are true and correct
in all material respects before and after giving effect to the Proposed
Borrowings and to the application of the proceeds therefrom, as though made on
and as of such date, except to the extent that such representations and
warranties expressly relate solely to an earlier date (in which case such
representations and warranties shall have been true and accurate on and as of
such earlier date);
(B) no event has occurred and is continuing, or would result from such
Proposed Borrowings or from the application of the proceeds therefrom, which
constitutes a Default or an Event of Default;
(C) all of the other conditions to the Proposed Borrowings set forth in
Article 5 of the Credit Agreement have been fulfilled; and
(D) the Proposed Borrowings satisfy all limitations set forth in the
Credit Agreement (including, without limitation, availability under the
Borrowing Base).
142
If notice of this Proposed Borrowing has been given previously by
telephone, then this notice should be considered a written confirmation of such
telephone notice as required by Section 2.1(d) of the Credit Agreement.
NATIONAL EQUIPMENT SERVICES, INC.
By:
Name:
Title:
143
EXHIBIT 1
FORM OF LOCKBOX AGREEMENT
This Lock Box Agreement is made as of the _____ day of ________________,
19___, by and among [Borrower], a ____________________ corporation (the
"Borrower"), First Union Commercial Corporation, as agent (the "Agent"), and
[Lockbox Bank] (the "Bank").
WHEREAS, the Agent and certain financial institutions ("Lenders") have
entered into a Credit Agreement, dated as of July 1, 1997 (together with all
modifications, renewals or replacements, the "Credit Agreement"), with the
Borrower and certain other borrowing entities; and
WHEREAS, to secure its obligations under the Credit Agreement, the
Borrower has granted the Lenders a security interest in, inter alia, its present
and future accounts receivable, and all proceeds thereof and the Borrower has
agreed that all collections and proceeds of such accounts receivable shall be
remitted in kind to the Agent; and
WHEREAS, in order to provide for a more efficient and faster collection
and deposit of said collections and proceeds the Agent and the Borrower desire
to use the lock box service of the Bank; and
WHEREAS, the Bank is willing to provide said service for the Borrower and
the Agent commencing as of ______________.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Post Office Box. The Bank will rent P.O. Box ______ (the "Lock Box") of
the post office located at in the name of the Borrower. Customers
of the Borrower have been, or will be, instructed to mail their remittances to
the Lock Box.
2. Access to Mail. Subject to the provisions contained elsewhere herein,
the Bank will have exclusive and unrestricted access to the Lock Box and will
have complete and exclusive authority to receive, pick up and open all regular,
registered, certified or insured mail addressed to the Lock Box. Prior to the
Bank's receipt of notice from the Agent that an Event of Default has occurred
under the Credit Agreement, the Borrower shall act as the exclusive agent for
the Bank and shall have complete responsibility for receiving, picking up and
opening all regular, registered, certified or insured mail addressed to the Lock
Box. Notwithstanding the foregoing to the contrary, at any time, on written
dema its processing of said mail, and shall release same, in kind, to the
Agent, and the Agent shall thereafter process said mail promptly in accordance
with this Agreement. The Bank shall not inquire into the Agent's right to make
such a demand under any agreement among the agent, the Lenders and the Borrower,
and shall be forever released of all obligations with respect to said
remittances upon release to the Agent. The Borrower shall have no control
whatsoever over any mail, checks, money orders, collections or other forms of
remittances received in the Lock Box except as aforesaid. Appropriate
instructions have been, or will be, given by the Bank to the United States Post
Office where the Lock Box is maintained, and such instructions shall not be
revoked without the prior written consent of the Agent. Any instruction given
to the Bank by the Borrower upon and after the occurrence of an Event of
Default, without the prior or concurrent written agreement of the Agent shall
be void and of no force or effect. All mail addressed to the Lock Box will be
picked up by the Bank according to its regular collection schedule and, at any
time prior to the occurrence of an Event of Default, shall be retrieved promptly
by the Borrower for processing in accordance with the terms of this Agreement.
144
3. Remittance Collection. On the day received the Bank (or at any time
prior to the occurrence of an Event of Default, the Borrower) will open all mail
addressed to the Lock Box and remove and inspect the enclosures. All checks,
money orders and other forms or orders for the payment of money and other
collection remittances (hereinafter collectively referred to as "checks") shall
be processed by the Bank (or at any time prior to the occurrence of an Event of
Default, the Borrower) as follows:
a. Missing Date. All undated checks will be dated by the Bank (or at
any time prior to the occurrence of an Event of Default, by the
Borrower) as of the postmark date and processed as hereafter provided.
b. Postdated. Checks postdated up to three days from date of receipt
shall be processed on the date indicated on the check. The Bank (or at
any time prior to the occurrence of an Event of Default, the Borrower)
shall not deposit checks postdated more than three days and which are
in excess of $_____________, but shall notify the Agent by telephone
of such checks and follow the Agent's instructions for disposition of
such checks.
c. Stale Date. The Bank (or at any time prior to the occurrence of an
Event of Default, the Borrower) shall notify the Agent of checks dated
six months or more prior to the date of collection and which exceed
$_____________. The agent may, in its reasonable discretion, require
that any such checks be forwarded promptly to the Agent.
d. Different Amount. Where written and numeric amounts differ, a check
will be processed by the Bank (or at any time prior to the occurrence
of an Event of Default, the Borrower) only if the correct amount can
be determined from the accompanying documents, otherwise the check
will not be deposited and, if any such check is for an amount in
excess of $_____________, it shall be sent to the Agent.
e. Signature Missing. Checks which do not bear the drawer's signature
and do not indicate the drawer's identity will not be deposited. If,
as determined by the Bank (or at any time prior to the occurrence of
an Event of Default, the Borrower), the drawer can be identified from
the face of the check, the Bank (or at any time prior to the
occurrence of an Event of Default, the Borrower), the drawer can be
identified from the face of the check, the Bank (or at any time prior
to the occurrence of an Event of Default, the Borrower) will deposit
and process the check by affixing a stamped impression requesting the
drawer bank to contact the drawer for authority to pay. The Bank (or
at any time prior to the occurrence of an Event of Default, by the
Borrower) shall notify the Agent of any checks in excess of
$_____________ which cannot be deposited pursuant to this clause (e).
f. Alterations and Restrictions. Checks with alterations and checks
bearing restrictive notations such as "Payment in Full" will not be
deposited, and the Bank (or at any time prior to the occurrence of an
Event of Default, the Borrower) shall notify the Agent of such checks
which exceed $_____________ by telephone on the day of receipt and
will deposit, hold or forward such checks with accompanying written
matter, if any, as requested by the Agent.
g. Foreign Banks and Currency. Checks drawn in foreign currency will
be processed in accordance with the Bank's normal procedure for such
checks and the Agent will be notified by advice of any such checks
which exceed $_____________ on the date received by the Bank.
h. Other Items. Any items which the Agent has specifically instructed
the Bank (or at any time prior to the occurrence of an Event of
Default, the Borrower) in writing not to process will not be deposited
and shall be sent to the Agent.
Notwithstanding anything to the contrary contained in this Agreement, the
Bank shall have no obligation to perform services on a basis any different than
it performs lockbox services in the normal course of business, except with
respect to receiving instructions from the Agent rather than the Borrower.
145
4. Processing Acceptable Checks. All checks, except those not acceptable
for deposit under the terms of this Agreement, shall be deposited on the day of
receipt by the Bank to Account No. _____________ (the "Depository Account"),
and all such checks shall be endorsed as follows:
credited to account number _____________: absence of endorsement
hereby supplied and granted by [Lock Box Bank]
Any funds in the Depository Account will be wired on a daily basis
with the following instructions:
First Union Commercial Corporation
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn:
Account No. _____________
For the account of the Borrower;
provided, however, that no funds shall be required to be wired unless and
until the amount of funds in the Depository Account shall be in excess of an
aggregate of $1000, unless the Agent shall, in its sole discretion, otherwise
instruct the Bank.
All remittance advices, envelopes, and written matter (except as expressly
provided herein) received in the Lock Box together with photocopies of all
checks shall be sent to the Borrower and, if requested by the Agent, copies of
same shall be sent to the Agent. The Bank shall mail a statement of account, on
a monthly basis, to both the Agent and the Borrower. If no deposit is made on a
bank business day, a deposit advice, correctly dated, will be sent to the Agent
and the Borrower with the notation "No Deposit" appearing thereon. In addition,
the Bank (or at any time prior to the occurrence of an Event of Default, the
Borrower) shall indicate by telephone to the Agent on each Bank business day by
2:30 P.M. (Eastern time zone) the amount of each day's deposit total. The
Depository Account shall be opened and established by the Borrower for the
benefit of the Agent on behalf of the Lenders and shall be subject to the terms
and provisions of the Credit Agreement and Security Agreement (as such term is
defined in the Credit Agreement). Neither the Bank nor the Borrower shall have
the right to withdraw funds from the Depository Account, except that the Bank
may make such debits therefrom as provided in Section 5 hereof.
5. Returned Checks. Checks deposited in the Depository Account which are
returned unpaid because of "Insufficient Funds," "Uncollected Funds," etc. will
be redeposited by the Bank (or at any time prior to the occurrence of an Event
of Default, the Borrower) only once, except that if a returned check exceeds
$1,000 the Bank (or at any time prior to the occurrence of an Event of Default,
the Borrower) shall not redeposit such check but shall telephone the Agent for
further instructions on the day such check is received. If redeposit is not
warranted for reasons such as "account closed" or "payment stopped" or if a
check is returned a second time, the Bank will charge the Depository Account
and send a debit advice with the item to the Agent with copies of same to the
Borrower.
6. Remittance received by the Borrower. Remittances which are sent
directly to or received by the Borrower shall be forwarded to the Lock Box on
the day received.
7. Record Maintenance. All deposit checks will be microfilmed (on front
and back) by the Bank and retained for five years by the Bank prior to
destruction. Photocopies of filmed items will be provided to the Agent or the
Borrower on request, within the five-year period.
146
8. Bank Charges. All charges of the Bank for services rendered pursuant to
this agreement shall be billed to and paid directly by the Borrower. Said
charges shall not be charged against remittances nor shall they be debited to
the Depository Account.
9. No Offset. The Bank (or at any time prior to the occurrence of an Event
of Default, the Borrower) hereby agrees that it will treat all remittances
received in the Lock Box in accordance with the terms of this agreement. The
Bank will not offset or assert any claim against the Lock Box or the Depository
Account or divert such remittances on account of any obligations owed to the
Bank by the Borrower or by the party making the remittance, except as provided
in Section 5 hereof.
10. Bank Liability. In acting under this agreement the Bank shall not be
liable to the Agent, the Lenders or the Borrower for any error of judgment, or
for any act done or step taken or omitted by it in good faith, except for gross
negligence or willful misconduct.
11. Term. This Agreement shall continue in full force and effect until
termination by the Bank on 60 days' prior written notice to all other parties.
The Agent may terminate this Agreement at any time which termination shall be
effective on receipt of written notice by the Bank and in the event of such
termination, the Agent shall at its option have the sole right to remove mail
from the Lock Box. The Borrower shall have no right to unilaterally terminate
this Agreement.
12. Modification. This Agreement may only be modified by a writing signed
by all of the parties hereto.
13. Addresses.
a. All notices, including phone notices, any daily deposit advices,
monthly statements of account and copies of all checks and the documents which
are to be given or sent to the Agent shall be sent to the following address,
and, where applicable, given at the following phone number:
First Union Commercial Corporation
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention:
Telephone:
Telecopier:
b. All notices to the Bank shall be sent to:
[Bank]
________________________________________
________________________________________
________________________________________
Attention:
Telephone:
Telecopier:
147
c. All notices and items which are to be sent to the Borrowers shall
be sent to:
[Borrower]
____________________________
____________________________
____________________________
Attention:
Telephone:
Telecopier:
14. Agent Agreement.
The Agent agrees that it will indemnify and hold the Bank harmless from
any and all loss, liability, expense or damage that the Bank may incur in
processing lockbox items in accordance with this Agreement, including, without
limitation, any loss that the Bank experiences as a result of returned items
to the extent the balances in the Depository Account referenced in paragraph 4
are insufficient to cover such losses or in the event the balances in such
Depository Account are insufficient to cover the Bank charges referenced in
paragraph 8.
15. Limitation on Liability.
The Agent and the Borrower acknowledge that the Bank undertakes to perform
only such duties as are expressly set forth in this Agreement and those which
are normally undertaken by the Bank in connection with lockbox processing.
Notwithstanding any other provision of this Agreement, it is agreed by the
parties that the Bank shall not be liable for any action taken by the Bank or
any of its directors, officers, agents (including specifically the Borrower and
any of its directors, officers, agents or employees) or employees in accordance
with this Agreement, except for the Bank's or such natural person's gross
negligence or willful misconduct. In no event shall the Bank be liable for
losses or delays resulting from force majeure, computer malfunction,
interruption of communication facilities, labor difficulties or other causes
beyond its reasonable control or for any indirect, special or consequential
damages.
148
This Agreement shall become effective upon its receipt by the Agent,
properly executed by all the parties hereto.
FIRST UNION COMMERCIAL CORPORATION[C]
BY:__________________________
TITLE:
[LOCKBOX BANK]
BY:__________________________
TITLE:
[BORROWER]
BY:__________________________
TITLE:
149
EXHIBIT J
FORM OF NOTICE OF EXTENSION/CONVERSION
_______________, 199____
First Union Commercial Corporation,
as Agent for the Lenders
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: [_______________]
Ladies and Gentlemen:
The undersigned, National Equipment Services, Inc., a Delaware corporation
(the "Company"), on behalf of itself and the other borrowing entities parties to
the Credit Agreement, dated as of July 1, 1997, among the Company, such other
Borrowers, certain financial institutions parties thereto, and First Union
Commercial Corporation, as agent (together with all modifications, renewals or
replacements, the "Credit Agreement"; capitalized terms used herein shall have
the meanings given such terms in the Credit Agreement). The Company, on behalf
of the Borrowers, hereby gives you notice, irrevocably, pursuant to Section 2.10
of the Credit Agreement that the Borrowers hereby request extensions and/or
conversions under the Credit Agreement, and in that connection set forth below
the information relating to such extensions and/or conversions (the
"Extensions/Conversions") as required by Sections 2.10 of the Credit Agreement:
Interest Interest
Borrower Date of Borrowing Amount Rate Period
The Company, on behalf of the Borrowers, hereby certifies that the
following statements are true on the date hereof, and will be true on the date
of the Extension/Conversion:
(A) the representations and warranties contained in the Credit Agreement
and in each other document executed in connection therewith are true and correct
in all material respects before and after giving effect to the
Extensions/Conversions and to the application of the proceeds therefrom, as
though made on and as of such date, except to the extent that such
representations and warranties expressly relate solely to an earlier date (in
which case such representations and warranties shall have been true and accurate
on and as of such earlier date);
(B) no event has occurred and is continuing, or would result from such
Extensions/Conversions or from the application of the proceeds therefrom, which
constitutes a Default or an Event of Default;
(C) all of the other conditions to the Extensions/Conversions set forth in
Article 2 of the Credit Agreement have been fulfilled; and
(D) the Extensions/Conversions satisfy all limitations set forth in the
Credit Agreement (including, without limitation, availability under the
Borrowing Base).
If notice of these Extensions/Conversions has been given previously by
telephone, then this notice should be considered a written confirmation of such
telephone notice as required by Section 2.10 of the Credit Agreement.
150
NATIONAL EQUIPMENT SERVICES, INC.
By:
Name:
Title:
151
EXHIBIT K
FORM OF COMPLIANCE CERTIFICATE
[Letterhead of Company]
_________, 199__
First Union Commercial Corporation,
as Agent for the Lenders
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Ladies and Gentlemen:
I hereby certify to you as follows:
(a) I am the duly elected [Title] of National Equipment Services, Inc., a
Delaware corporation (the "Company"). Capitalized but undefined terms used in
this Certificate shall have the meanings assigned to them in the Credit
Agreement, dated as of July 1, 1997 (together with all modifications, renewals
or replacements, the "Credit Agreement"), among the Company, certain other
borrowing entities parties thereto (together with the Company, the
"Borrowers"), the financial institutions parties thereto, and you, as Agent.
(b) I have reviewed the terms of the Credit Agreement, and have made, or
have caused to be made under my supervision, a review, in reasonable detail of
the transactions and the condition of the Borrowers during the immediately
preceding [month] [fiscal quarter] [fiscal year].
(c) The review described in paragraph (b) above did not disclose the
existence during or at the end of such period, and I have no knowledge of the
existence as of the date hereof, of any condition or event which constitutes a
Default or an Event of Default, except as hereinafter set forth. Described in a
separate attachment to this Certificate are (i) detailed calculations
demonstrating compliance by the Borrowers with the financial covenants
contained in Section 8 of the Credit Agreement and (ii) the exceptions, if any,
to this paragraph (c) (listing, in detail, the nature of the condition or
event, the period during which it has existed and the action which the Company
or applicable Borrower has taken, is taking, or proposes to take with respect
to such condition or event).
I further certify that, based on the review described in paragraph (b)
above, neither the Company, any other Borrower nor any of the Subsidiaries at
any time during or at the end of such period, except as specifically described
in paragraph (k) below, did any of the following:
(d) Changed its respective corporate name, or transacted business under
any trade name, style, or fictitious name, other than those previously
described to you and set forth in the Credit Agreement.
(e) Changed the location of its chief executive office, or changed the
location of or disposed of any of its assets (other than as permitted under the
Credit Agreement) or established any new inventory locations (other than in
connection with leases of Rental Equipment).
152
(f) Changed its capital structure (other than as permitted under the
Credit Agreement).
(g) Materially changed the terms upon which it sells goods (including
sales on consignment) or provides services, nor has any vendor or trade supplier
to any of the Borrowers during or at the end of such month decreased the terms
upon which it supplies goods to any of such Borrowers.
(h) Permitted or suffered to exist any Liens or encumbrances on any of its
properties, whether real or personal, other than as specifically permitted in
the Credit Agreement.
(i) Received any notices of any kind from any federal, state or local
agency, tribunal or other authority regulating or having responsibility for any
environmental matters.
(j) Became aware of, obtained knowledge of, or received notification of,
any breach or violation of any material covenant contained in any instrument or
agreement in respect of indebtedness for money borrowed by any of the Borrowers
or any of the Subsidiaries.
(k) [List exceptions, if any, to paragraphs (d) through (j) above].
The foregoing certifications are made and delivered
this____ day of______199__.
Very truly yours,
NATIONAL EQUIPMENT SERVICES, INC.
By:
Name:
Title:
153
Schedule A
[set forth evidence of compliance with financial covenants showing the
calculations therefor in reasonable detail]
154
EXHIBIT L
FORM OF BORROWING BASE CERTIFICATE
155
EXHIBIT L
[NOTE: THIS FORM WAS NOT PART OF THE EXHIBITS ATTACHED TO THE FINAL CREDIT
AGREEMENT]
FORM OF BORROWING BASE CERTIFICATE
For the month ended _____________, 199____.
I, the undersigned, the duly elected [Title] of National Equipment
Services, Inc., a Delaware corporation (the "Company"), do hereby certify the
following:
Accounts Receivables
1. Aggregate face amount of the Borrowers' Accounts ____
2. Ineligibles/Deductions
Discounts, claims, charges and allowances of any nature ____
Excluded Sales to Affiliates ____
Accounts unpaid 90 days or more after invoice date ____
Accounts owing by any debtor which has more than 50%
of other Accounts unpaid 90 days or more after invoice date ____
Excess by which the Accounts of any single account debtor
constitutes more than 15% of aggregate Accounts ____
Creditors of Borrowers/Disputed Accounts/Set-Off ____
Bankruptcy ____
Foreign invoices (unless supported by guaranty or L/C) ____
Xxxx-and-hold, sale-and-return, etc. ____
Government account debtor ____
Non-delivered or rejected goods ____
Accounts determined ineligible by the Agent ____
Total Ineligibles/Deductions: ____
3. Eligible Accounts Receivable ____
4. Eligible Accounts Receivable Advance Rate 85%
5. Available Accounts Receivable ____
156
Inventory
A. Parts and Supplies
1. Gross Value of Borrowers' Parts and Supplies Inventory 1 ____
2. Ineligibles/Deductions
Inventory located on leased property and no landlord waiver ____
Inventory subject to other Liens ____
Inventory in foreign location ____
Obsolete or slow moving Inventory ____
Inventory determined ineligible by the Agent ____
Total Ineligibles/Deductions ____
3. Eligible Parts and Supplies Inventory ____
4. Eligible Parts and Supplies Inventory Advance Rate 50%
5. Available Parts and Supplies Inventory ____
B. Rental Equipment
1. Orderly Liquidation Value of Gross Value
of Borrowers' Rental Equipment 2 ____
2. Ineligibles/Deductions
Rental Equipment located on leased property and no landlord waiver ____
Rental Equipment subject to other Liens ____
Rental Equipment in foreign location (other than Canada) ____
Obsolete or slow moving Rental Equipment ____
Rental Equipment determined ineligible by the Agent ____
Total Ineligibles/Deductions ____
3. Eligible Rental Equipment ____
4. Eligible Rental Equipment Advance Rate 80%
(reduced by 1/60th on the last date of each month
unless an Equipment appraisal is delivered in such month)
5. Available Rental Equipment ____
C. New Equipment
__________
1 Valued at the lower of cost (on a FIFO basis) or market. All Parts and
Supplies Inventory must meet the qualifications set forth in subpart (i)
of the definition of Eligible Parts and Supplies Inventory.
2 Valued based on the "Orderly Liquidation Value" as defined in the Credit
Agreement. All Rental Equipment must meet the qualifications set forth
in subpart (i) of the definition of Eligible Rental Equipment.
157
1. Gross Value of Borrowers' New Equipment1 ___
2. Ineligibles/Deductions
New Equipment located on leased property and no landlord waiver ___
New Equipment subject to other Liens ___
New Equipment in foreign location ___
Obsolete or slow moving Equipment ___
New Equipment determined ineligible by the Agent ___
Total Ineligibles/Deductions ___
3. Eligible New Equipment ___
4. Eligible New Equipment Advance Rate 80%
5. Available New Equipment ___
Borrowing Base
1. Borrowing Base Availability (the sum of Available Accounts
Receivable, Available Parts and Supplies Inventory, Available
Rental Equipment and Available New Equipment) ___
2. Revolving Credit Committed Amount ___
3. Outstanding Revolving Loans
and Letter of Credit Obligations ___
4. Reserves ___
5. Net Borrowing Base Availability (the lesser of (1) and (2)
minus (3) and (4)) ___
The foregoing Borrowing Base certificate is made and delivered
this___ day of_____ 199__ .
Very truly yours,
NATIONAL EQUIPMENT SERVICES, INC.
BY:
---------------------
Title:
1 Valued at the delivered cost of New Equipment. All New Equipment must
meet the qualifications set forth in subpart (i) of the definition of Eligible
New Equipment.
158
EXHIBIT M
FORM OF BORROWER JOINDER AGREEMENT
THIS BORROWER JOINDER AGREEMENT (the "Agreement", dated as of , 19__,
is by and between , a (the
"Applicant Borrower"), and FIRST UNION COMMERCIAL CORPORATION , in its capacity
as Agent (the "Agent") under that certain Credit Agreement (as amended and
modified, the "Credit Agreement") dated as of July 1, 1997 by and among
National Equipment Services, Inc., a Delaware corporation and certain related
borrowing entities (the "Borrowers"), the Lenders party thereto and the Agent.
All of the defined terms in the Credit Agreement are incorporated herein by
reference.
The Applicant Borrower has indicated its desire to become a Borrower
pursuant to the terms of the Credit Agreement.
Accordingly the Applicant Borrower hereby agrees as follows with the
Agent, for the benefit of the Lenders:
1. The Applicant Borrower hereby acknowledges, agrees and confirms that, by
its execution of this Agreement, the Applicant Borrower will be deemed to be a
party to the Credit Agreement and a "Borrower" for all purposes of the Credit
Agreement and the other Credit Documents, and shall have all of the obligations
of a Borrower thereunder as if it has executed the Credit Agreement and the
other Credit Documents. The Applicant Borrower hereby ratifies, as of the date
hereof, and agrees to be bound by, all of the terms, provisions and conditions
contained in the Credit Agreement and in the Credit Documents, including
without limitation (i) all of the representations and warranties of the Credit
Parties set forth in Section 6 of the Credit Agreement, as supplemented from
time to time in accordance with the term thereof, and (ii) all of the
affirmative and negative covenants set forth in Sections 7, 8, and 9 of the
Credit Agreement.
1. The Applicant Borrower hereby acknowledges, agrees and confirms that,
by its execution of this Agreement, the Applicant Borrower will be deemed to be
a party to the Security Agreement, and shall have all the obligations of an
"Obligor" (as such term is defined in the Security Agreement) thereunder as if
it had executed the Security Agreement. The Applicant Borrower hereby ratifies,
as of the date hereof, and agrees to be bound by, all of the terms, provisions
and conditions contained in the Security Agreement. Without limiting generality
of the foregoing terms of this paragraph 2, the Applicant Borrower hereby
grants to the Agent, for the benefit of the lenders, a continuing security
interest in, and a right of set off against any and all right, title and
interest of the Applicant Borrower in and to the Collateral (as such term is
defined in Section 2 of the Security Agreement) of the Applicant Borrower.
2. The Applicant Borrower hereby acknowledges, agrees and confirms that,
by its execution of this Agreement, the Applicant Borrower will be deemed to be
a party to the Pledge Agreement, and shall have all the obligations of a
"Pledgor" thereunder as if it had executed the Pledge Agreement. The Applicant
Borrower hereby ratifies, as of the date hereof, and agrees to be bound by, all
the terms, provisions and conditions contained in the Pledge Agreement. Without
limiting the generality of the foregoing terms of this paragraph 3, the
Applicant Borrower hereby pledges and assigns to the Agent, for
-1-
159
the benefit of the Lenders, and grants to the Agent, for the benefit of the
Lenders, a continuing security interest in any and all right, title and interest
of the Applicant Borrower in and to Pledged Stock (as such term is defined in
Section 1 of the Pledge Agreement) and the other Collateral (as such term is
defined in Section 1 of the Pledge Agreement).
3. The Applicant Borrower acknowledges and confirms that it has received a
copy of the Credit Agreement and the schedules and exhibits thereto, the Pledge
Agreement and the schedules and exhibits thereto and the Security Agreement and
the schedules and exhibits relating thereto. The information on the Schedules
to the Credit Agreement, the Pledge Agreement and the Security Agreement are
amended to provide the information shown on the attached Schedule A.
4. National Equipment Services, Inc. confirms that all of its and its
Subsidiaries' obligations under the Credit Agreement are, and upon the Applicant
Borrower becoming a Borrower shall continue to be, in full force and effect.
National Equipment Services, Inc. further confirms that immediately upon the
Applicant Borrower becoming a Borrower the term "Obligations", as used in the
Credit Agreement, shall include all Obligations of such Applicant Borrower
under the Credit Agreement and under each other Credit Document.
5. The Applicant Borrower hereby agrees that upon becoming a Borrower it
will assume all Obligations of a Borrower as set forth in the Credit Agreement.
By its execution of this Agreement, the Applicant Borrower appoints each of
________________, [title] and ____________________, [title], of National
Equipment Services, Inc., to be its attorneys ("its Attorneys") and in its name
and on its behalf and as its act and deed or otherwise to sign all documents
and carry out all such acts as are necessary or appropriate in connection with
executing any Notice of Borrowing, Notice of Extension/Conversion or any
Borrowing Base Certificate or any security documents (the "Documents") in
connection with the Credit Agreement, provided that such Documents are in
substantially the form provided therefor in the applicable exhibits thereto.
This Power of Attorney shall be valid for the duration of the term of the
Credit Agreement. The Applicant Borrower hereby undertakes to ratify everything
which either of its Attorneys shall do in order to execute the Documents
mentioned herein.
6. Each of National Equipment Services, Inc. and the Applicant Borrower
agrees that at any time and from time to time, upon the written request of the
Agent, it will execute and deliver such further documents and do such further
acts and things as the Agent may reasonably request in order to effect the
purposes of this Agreement.
7. This Agreement may be executed in two or more counterparts, each of
which shall constitute an original but all of which when taken together shall
constitute one contract.
8. This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the Applicant Borrower has caused this Borrower Joinder
Agreement to be duly executed by its authorized officers, and the Agent, for
the benefit of the Lenders, has caused the same to be accepted by its
authorized officer, as of the day and year first above written.
<>
By:
Name:
160
Title:
NATIONAL EQUIPMENT SERVICES, INC.
By:
Name:
Title:
FIRST UNION COMMERCIAL CORPORATION
By:
Name:
Title:
-3-
161
SCHEDULE A
to
Borrower Joinder Agreement
Schedules to Credit Agreement
(to be updated as necessary)
Schedule 1(b) to Security Agreement
Intellectual Property
Schedule 3(a) to Security Agreement
Chief Executive Office
Schedule 3(b) to Security Agreement
Location of Collateral
Schedule 3(c) to Security Agreement
Mergers, Consolidations, Changes in
Structure or Use of Tradenames
Schedule 1 to Pledge Agreement
Pledged Stock
162
SCHEDULE 1.1A
LENDERS AND COMMITMENTS
REVOLVING TERM
REVOLVING CREDIT TERM LOAN
CREDIT COMMITMENT LOAN COMMITMENT
LENDER COMMITMENT PERCENTAGE COMMITMENT PERCENTAGE
------ ------------- ------------ ------------ ------------
First Union $17,391,304.35 17.391304348% $2,608,695.65 17.391304348%
Commercial
Corporation
BankBoston, N.A. $15,217,391.30 15.217391304% $2,282,608.70 15.217391304%
American National $15,217,391.30 15.217391304% $2,282,608.70 15.217391304%
Bank and Trust
Company of Chicago
Comerica Bank $10,869,565.22 10.869565217% $1,630,434.78 10.869565217%
The CIT Group/ $8,260,869.57 8.260869565% $1,239,130.43 8.260869565%
Business
Credit, Inc.
Bankers Trust $8,260,869.57 8.260869565% $1,239,130.43 8.260869565%
Company
Xxxxxx Trust and $8,260,869.57 8.260869565% $1,239,130.43 8.260869565%
Savings Bank
Xxxxxx Financial, $8,260,869.57 8.260869565% $1,239,130.43 8.260869565%
Inc.
Mercantile Business $8,260,869.57 8.260869565% $1,239,130.43 8.260869565%
Credit, Inc.
------------- ------------ ------------- ------------
TOTAL $100,000,000 100% $15,000,000 100%
============= ============ ============= ============
163
SCHEDULE 1.1B
CLOSING CONDITIONS
The obligation of each Lender to make Loans and/or of the Issuing Bank to issue
Letters of Credit shall be subject to the satisfaction, on or prior to the
Closing Date, of the following conditions precedent:
1. Executed Credit Documents. Receipt by the Agent of duly executed
copies of:
(a) the Credit Agreement;
(b) the Notes;
(c) the Security Documents; and
(d) all other Credit Documents,
each in form and substance acceptable to the Lenders in their sole
discretion.
2. Corporate Documents. Receipt by the Agent of the following:
(a) Charter Documents. Copies of the articles or certificates of
incorporation or other charter documents of each Borrower certified to be true
and complete as of a recent date by the appropriate Governmental Authority of
the state or other jurisdiction of its incorporation and certified by a
secretary or assistant secretary of such Borrower to be true and correct as of
the Closing Date.
(b) Bylaws. A copy of the bylaws of each Borrower certified by a
secretary or assistant secretary of such Borrower to be true and correct as of
the Closing Date.
(c) Resolutions. Copies of resolutions of the Board of Directors of
each Borrower approving and adopting the Credit Documents to which it is a
party, the transactions contemplated therein and authorizing execution and
delivery thereof, certified by a secretary or assistant secretary of such
Borrower to be true and correct and in force and effect as of the Closing Date.
(d) Good Standing. Copies of (i) certificates of good standing,
existence or its equivalent with respect to each Borrower certified as of a
recent date by the appropriate governmental authorities of the state or other
jurisdiction of incorporation and each other jurisdiction in which the failure
to so qualify and be in good standing could reasonably be expected to have a
Material Adverse Effect and (ii) to the extent available, a certificate
indicating payment of all corporate franchise taxes certified as of a recent
date by the appropriate governmental taxing authorities.
(e) Incumbency. An incumbency certificate of each Borrower certified
by a secretary or assistant secretary to be true and correct as of the Closing
Date.
3. Financial Statements. Receipt by the Agent and the Lenders of the
financial statements described in Section 6.6 of the Credit Agreement and such
other information relating to the Borrowers or the Closing Date Acquisitions
as the Agent may reasonably require in connection with the structuring and
syndication of credit facilities of the type described herein. The Borrowers
shall certify as of the Closing Date that such financial statements have been
prepared in accordance with the books and records of the Borrowers and their
predecessor corporation, as applicable, and fairly present in all material
respects the
164
financial condition of each of the Borrowers and such predecessor corporations
at the dates thereof and the results of operations for the periods indicated
(subject, in the case of unaudited financial statements, to normal year-end
adjustments and the absence of footnote disclosures), and such financial
statements have been prepared in conformity with GAAP consistently applied
throughout the periods involved.
4. Opinions of Counsel. Receipt by the Agent of an opinion, or opinions
(which shall cover, among other things, authority, legality, validity, binding
effect, enforceability, and attachment and perfection of liens), satisfactory
to the Agent, addressed to the Agent and the Lenders and dated the Closing
Date, from legal counsel to the Borrowers.
5. Environmental Reports. Receipt by the Agent in form and substance
satisfactory to it of the environmental assessment reports and related
documents prepared in connection with the Closing Date Acquisitions or
otherwise prepared for any of the Borrowers in respect of Real Estate.
6. Personal Property Collateral. The Agent shall have received:
(a) searches of Uniform Commercial Code filings in the jurisdiction
of the chief executive office of each Borrower and each jurisdiction where any
Collateral is located or where a filing would need to be made in order to
perfect the Agent's security interest in the Collateral, copies of the financing
statements on file in such jurisdictions and evidence that no Liens exist other
than Permitted Liens;
(b) duly executed UCC financing statements for each appropriate
jurisdiction as is necessary, in the Agent's sole discretion, to perfect the
Agent's security interest in the Collateral;
(c) searches of ownership of intellectual property in the appropriate
governmental offices and such patent/trademark/copyright filings as requested
by the Agent in order to perfect the Agent's security interest in the
Collateral;
(d) all stock certificates evidencing the Capital Stock pledged to
the Agent pursuant to the Pledge Agreement, together with duly executed in
blank undated stock powers attached thereto;
(e) such patent/trademark/copyright filings as requested by the Agent
in order to perfect the Agent's security interest in the Collateral;
(f) all instruments and chattel paper in the possession of any of the
Borrowers, together with allonges or assignments as may be necessary or
appropriate to perfect the Agent's security interest in the Collateral to the
extent required under the Security Agreement; and
(g) duly executed consents as are necessary, in the Agent's sole
discretion, to perfect the Lenders' security interest in the Collateral.
7. Priority of Liens. The Agent shall have received satisfactory evidence
that (a) the Agent, on behalf of the Lenders, holds a perfected, first priority
Lien on all Collateral (subject to clause (b)) and (b) none of the Collateral
is subject to any other Liens other than Permitted Liens.
8. Availability. After giving effect to the initial Loans made and
Letters of Credit issued hereunder on the Closing Date, there shall be at least
$3,000,000 of availability existing under the Revolving Credit Committed Amount.
165
9. Opening Borrowing Base Certificate. Receipt by the Agent of a Borrowing
Base Certificate as of the Closing Date after giving effect to the Sprintank
Acquisition, substantially in the form of Exhibit L and certified by the chief
financial officer of the Company to be true and correct as of the Closing Date.
10. Evidence of Insurance. Receipt by the Agent of copies of insurance
policies or certificates of insurance of the Borrowers or certificates of
insurance of the Borrowers evidencing liability and casualty insurance meeting
the requirements set forth in the Credit Documents, including, but not limited
to, naming the Agent as sole loss payee on behalf of the Lenders.
11. Corporate Structure. The corporate capital and ownership structure of
the Company and its Subsidiaries (after giving effect to the Sprintank
Acquisition) shall be as described in Schedule 6.9.
12. Equity Investment. Receipt by the Agent of evidence that a cash equity
investment of at least $20,500,000 shall have been made in the Company by Xxxxxx
Xxxxx and/or its Affiliates (net of reasonable expenses payable to third parties
in connection therewith) on terms that are reasonably satisfactory to the Agent.
13. Subordinated Debt (a) the Borrowers shall have issued Subordinated Debt
pursuant to the Existing Subordinated Notes, (b) the Agent shall have received a
copy, certified by an officer of the Company as true and complete, of each
Existing Subordinated Note as originally executed and delivered, and no
amendment or modification thereof shall have been entered into on or prior to
the Closing Date which shall not have been approved by each of the Lenders and
(c) the Borrowers shall have received proceeds (or other equivalent value
therefor) from the issuance of the Existing Subordinated Notes in an aggregate
principal amount of $1,000,000.
14. Consents. Receipt by the Agent of evidence that all governmental,
shareholder and third party consents (including Xxxx-Xxxxx-Xxxxxx clearance) and
approvals required in connection with the Sprintank Acquisition and the related
financings and other transactions contemplated hereby and expiration of all
applicable waiting periods without any action being taken by any authority that
could restrain, prevent or impose any material adverse conditions on the
Sprintank Acquisition or such other transactions or that could seek or threaten
any of the foregoing, and no law or regulation shall be applicable which in the
judgment of the Agent could have such effect.
15. Litigation. There shall not exist (a) any order, decree, judgment,
ruling or injunction which restrains the consummation of the Sprintank
Acquisition in the manner contemplated by the Sprintank Purchase Agreement or
(b) any pending or threatened action, suit, investigation or proceeding against
a Borrower that could reasonably be expected to have a Material Adverse Effect.
16. Other Indebtedness. Receipt by the Agent of evidence that, after giving
effect to the Sprintank Acquisition and the making of the Loans made on the
Closing Date, the Borrowers shall have no Funded Indebtedness other than the
Indebtedness other than the Indebtedness under (a) the Credit Documents and (b)
the Subordinated Notes.
17. Solvency Certificate. Receipt by the Agent of an officer's certificate
for each Borrower prepared by the chief financial officer of each such Borrower
as to the financial condition, solvency and related matters of each such
Borrower, in each case after giving effect to the Closing Date Acquisitions and
the initial borrowings under the Credit Documents, in substantially the form of
Exhibit C hereto.
18. Sprintank Purchase Agreement. There shall not have been any material
modification, amendment, supplement or waiver to the Sprintank Purchase
Agreement without the prior written consent of the Agent, including, but not
limited to, any modification, amendment, supplement or waiver relating to the
166
amount or type of consideration to be paid in connection with the Sprintank
Acquisition and the contents of all disclosure schedules and exhibits, and the
Sprintank Acquisition shall have been consummated in accordance with the terms
of the Sprintank Purchase Agreement (without waiver of any conditions precedent
to the obligations of the buyer thereunder). The Agent shall have received the
final Sprintank Purchase Agreement, together with all exhibits and schedules
thereto, certified by an officer of the Company.
19. Officer's Certificates. The Agent shall have received a certificate
or certificates executed by an Executive Officer of the Company as of the
Closing Date stating that (a) each Borrower is in compliance with all existing
financial obligations, (b) all governmental, shareholder and third party
consents and approvals, if any, with respect to the Credit Documents and the
transactions contemplated thereby have been obtained, (c) no action, suit,
investigation or proceeding is pending or threatened in any court or before any
arbitrator or governmental instrumentality that purports to affect any Borrower
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, (d) the transactions contemplated by the Sprintank Purchase
Agreement have been consummated in accordance with the terms thereof and (e)
immediately after giving effect to this Credit Agreement, the other Credit
Documents and all the transactions contemplated therein to occur on such date,
(i) each of the Borrowers is solvent, (ii) no Default or Event of Default
exists, (iii) all representations and warranties contained herein and in the
other Credit Documents are true and correct in all material respects, and (iv)
the Borrowers are in compliance with each of the financial convenants set forth
in Section 8.
20. Fees and Expenses. Payment by the Borrowers of all fees and expenses
owed by them to the Lenders and the Agent, including, without limitation,
payment to the Agent of the fees set forth in the Fee Letter.
21. Sources and Uses: Payment Instructions. Receipt by the Agent of (a) a
statement of sources and uses of funds covering all payments reasonably expected
to be made by the Company in connection with the transactions contemplated by
the Credit Documents to be consummated on the Closing Date and reflecting all
of the Closing Date Acquisitions, in each case, including an itemized estimate
of all fees, expenses and other closing costs and (b) payment instructions with
respect to each wire transfer to be made by the Agent on behalf of the Lenders
or the Company or any other Borrower on the Closing Date setting forth the
amount of such transfer, the name and number of the account to which such
transfer is to be made, the name and ABA number of the bank or other financial
institution where such account is located and the name and telephone number of
an individual that can be contacted to confirm receipt of such transfer.
22. Powers of Attorney. Receipt by the Agent of copies of the powers of
attorney executed by the Borrowers (other than the Company) appointing certain
officers of the Company to execute certain ancillary documents on behalf of the
Borrowers.
23. Other. Receipt by the Lenders of such other documents, instruments,
agreements or information as reasonably requested by any Lender, including, but
not limited to, information regarding litigation, tax, accounting, labor,
insurance, pension liabilities (actual or contingent), real estate leases,
material contracts, debt agreements, property ownership and contingent
liabilities of the Borrowers.
The documents referred to in this Schedule shall be delivered to the Agent
and the Lenders no later than the Closing Date. The certificates and opinions
referred to in this Schedule shall be dated the Closing Date.
167
- 5 -
