1
Exhibit 10.34
CREDIT AGREEMENT
Dated as of August 4, 1998
among
RAILWORKS CORPORATION,
as Borrower,
Certain Subsidiaries,
as Guarantors,
THE LENDERS NAMED HEREIN,
FIRST UNION NATIONAL BANK,
as Documentation Agent
AND
NATIONSBANK, N.A.,
as Administrative Agent
2
TABLE OF CONTENTS
SECTION 1 DEFINITIONS
1.1 Definitions...........................................................................1
1.2 Computation of Time Periods..........................................................23
1.3 Accounting Terms; Certain Calculations...............................................23
SECTION 2 CREDIT FACILITIES........................................................................25
2.1 Revolving Loans......................................................................25
2.2 Letter of Credit Subfacility.........................................................28
SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES...........................................33
3.1 Default Rate.........................................................................33
3.2 Extension and Conversion.............................................................33
3.3 Prepayments..........................................................................34
3.4 Termination and Reduction of Commitments.............................................35
3.5 Fees.................................................................................35
3.6 Capital Adequacy.....................................................................36
3.7 Inability To Determine Interest Rate.................................................36
3.8 Illegality...........................................................................36
3.9 Requirements of Law..................................................................37
3.10 Taxes...............................................................................38
i
3
3.11 Indemnity...........................................................................40
3.13 Pro Rata Treatment..................................................................41
3.14 Sharing of Payments.................................................................42
3.15 Payments, Computations, Etc.........................................................43
3.16 Evidence of Debt....................................................................45
SECTION 4 GUARANTY.................................................................................45
4.1 The Guarantee........................................................................45
4.2 Obligations Unconditional............................................................46
4.3 Reinstatement........................................................................47
4.4 Certain Additional Waivers...........................................................47
4.5 Remedies.............................................................................47
4.6 Rights of Contribution...............................................................48
4.7 Continuing Guarantee.................................................................48
SECTION 5 CONDITIONS...............................................................................49
5.1 Conditions to Closing................................................................49
5.2 Conditions to All Extensions of Credit...............................................50
SECTION 6 REPRESENTATIONS AND WARRANTIES...........................................................51
6.1 Financial Condition..................................................................51
6.2 No Changes or Restricted Payments....................................................52
ii
4
6.3 Organization; Existence; Compliance with Law.........................................52
6.4 Power; Authorization; Enforceable Obligations........................................52
6.5 No Legal Bar.........................................................................53
6.6 No Material Litigation...............................................................53
6.7 No Default...........................................................................53
6.8 Ownership of Property; Liens.........................................................53
6.9 Intellectual Property................................................................54
6.10 No Burdensome Restrictions..........................................................54
6.11 Taxes...............................................................................54
6.12 ERISA...............................................................................54
6.13 Governmental Regulations, Etc.......................................................55
6.14 Subsidiaries........................................................................56
6.15 Purpose of Extensions of Credit.....................................................56
6.16 Environmental Matters...............................................................56
6.17 Year 2000 Compliance................................................................57
SECTION 7 AFFIRMATIVE COVENANTS....................................................................58
7.1 Financial Statements................................................................58
7.2 Certificates; Other Information.....................................................59
7.3 Notices.............................................................................60
7.4 Payment of Obligations..............................................................61
iii
5
7.5 Conduct of Business and Maintenance of Existence.....................................62
7.6 Maintenance of Property; Insurance...................................................62
7.7 Inspection of Property; Books and Records; Discussions...............................62
7.8 Environmental Laws...................................................................63
7.9 Financial Covenants..................................................................63
7.10 Administrative Fees.................................................................64
7.11 Additional Guaranties and Stock Pledges.............................................64
7.12 Ownership of Subsidiaries...........................................................65
7.13 Use of Proceeds.....................................................................65
SECTION 8 NEGATIVE COVENANTS.......................................................................65
8.1 Indebtedness........................................................................65
8.2 Liens...............................................................................66
8.3 Consolidation, Merger, Divestiture, etc.............................................66
8.5 Investments.........................................................................68
8.6 Ownership of Equity Interests.......................................................68
8.7 Fiscal Year.........................................................................68
8.8 Restricted Payments.................................................................68
8.9 Sale Leasebacks.....................................................................68
8.10 No Further Negative Pledges.........................................................68
iv
6
SECTION 9 EVENTS OF DEFAULT........................................................................69
9.1 Events of Default...................................................................69
9.2 Acceleration; Remedies..............................................................71
SECTION 10 AGENCY PROVISIONS.......................................................................72
10.1 Appointment.........................................................................72
10.2 Delegation of Duties................................................................72
10.3 Exculpatory Provisions..............................................................73
10.4 Reliance on Communications..........................................................73
10.5 Notice of Default...................................................................74
10.6 Non-Reliance on Administrative Agent and Other Lenders..............................74
10.7 Indemnification.....................................................................74
10.8 Administrative Agent in its Individual Capacity.....................................75
10.9 Successor Administrative Agent......................................................75
SECTION 11 MISCELLANEOUS...........................................................................76
11.1 Notices.............................................................................76
11.2 Right of Set-Off....................................................................77
11.3 Benefit of Agreement................................................................77
11.4 No Waiver; Remedies Cumulative......................................................80
11.5 Payment of Expenses, etc............................................................80
v
7
11.6 Amendments, Waivers and Consents....................................................81
11.7 Counterparts........................................................................82
11.8 Headings............................................................................82
11.9 Survival............................................................................82
11.10 Governing Law; Submission to Jurisdiction; Venue...................................82
11.11 Severability.......................................................................83
11.12 Entirety...........................................................................83
11.13 Binding Effect; Termination........................................................84
11.14 Confidentiality....................................................................84
11.15 Source of Funds....................................................................84
11.16 Conflict...........................................................................85
vi
8
SCHEDULES
Schedule 2.1(a) Lenders and Commitments
Schedule 2.1(b)(i) Form of Notice of Borrowing
Schedule 2.1(e) Form of Revolving Note
Schedule 2.2(b)-2 Form of Notice of Request for Letter of Credit
Schedule 3.2 Form of Notice of Extension/Conversion
Schedule 5.1(h)(v) Form of Officer's Certificate
Schedule 6.8 Existing Liens
Schedule 6.14 Subsidiaries
Schedule 7.2(b) Form of Officer's Compliance Certificate
Schedule 7.11 Form of Joinder Agreement
Schedule 8.1 Indebtedness
Schedule 11.1 Lenders and Addresses
Schedule 11.3(b) Form of Assignment and Acceptance
9
CREDIT AGREEMENT
THIS CREDIT AGREEMENT dated as of August 4, 1998 (the "Credit
Agreement"), is by and among RAILWORKS CORPORATION, a Delaware corporation (the
"Borrower"), the Subsidiaries identified on the signature pages hereto and such
other Subsidiaries as may from time to time become Guarantors hereunder in
accordance with the provisions hereof (the "Guarantors"), the lenders named
herein and such other lenders as may become a party hereto (the "Lenders"), and
NATIONSBANK, N.A., as Administrative Agent (in such capacity, the
"Administrative Agent").
W I T N E S S E T H
WHEREAS, the Borrower has requested that the Lenders provide a $75
million credit facility for the purposes hereinafter set forth;
WHEREAS, the Lenders have agreed to make the requested credit facility
available to the Borrower on the terms and conditions hereinafter set forth;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS
1.1 Definitions.
As used in this Credit Agreement, the following terms shall have the
meanings specified below unless the context otherwise requires:
"Acquisition" means any transaction in which the
Borrower or any of its Subsidiaries directly or indirectly (i) acquires
any Property with which an ongoing business is conducted or is to be
conducted, (ii) acquires all or substantially all of the assets of any
Person or division thereof, whether through a purchase of assets,
merger or otherwise, (iii) acquires (in one transaction or as the most
recent transaction in a series of transactions) control of at least a
majority of the Voting Stock of a corporation, other than the
acquisition of Voting Stock of a wholly-owned Subsidiary solely in
connection with the organization and capitalization of that Subsidiary
by the Borrower or another Credit Party, or (iv) acquires control of
more than 50% ownership interest in any partnership, joint venture or
limited liability company, but specifically excluding the Combination.
10
"Additional Credit Party" means each Person that becomes a
Guarantor after the Closing Date by execution of a Joinder Agreement.
"Administrative Agent" shall have the meaning assigned to such
term in the heading hereof, together with any successors or assigns.
"Administrative Agent's Fee Letter" means that certain letter
agreement dated as of July 31, 1998, between the Administrative Agent
and the Borrower, as amended, modified, supplemented or replaced from
time to time.
"Administrative Agent's Fees" shall have the meaning assigned
to such term in Section 3.5(c).
"Affiliate" means, with respect to any Person, any other
Person directly or indirectly controlling or controlled by or under
direct or indirect common control with such Person. For purposes of
this definition, "control" when used with respect to any Person means
the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agency Services Address" means NationsBank, N.A.,
NC1-001-15-04, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000,
Attn: Agency Services, or such other address as may be identified by
written notice from the Administrative Agent to the Borrower.
"Aggregate Revolving Committed Amount" means the aggregate
amount of Revolving Commitments in effect from time to time, being
initially SEVENTY-FIVE MILLION DOLLARS ($75,000,000).
"Applicable Percentage" means for any day, the rate per annum
set forth below opposite the applicable Consolidated Leverage Ratio
then in effect, it being understood that the Applicable Percentage for
(i) Base Rate Loans shall be the percentage set forth under the column
"Base Rate Margin", (ii) Eurodollar Loans shall be the percentage set
forth under the column "Eurodollar Margin and Letter of Credit Fee",
(iii) the Letter of Credit Fee shall be the percentage set forth under
the column "Eurodollar Margin and Letter of Credit Fee" and (iv) the
Commitment Fee shall be the percentage set forth under the column
"Commitment Fee":
2
11
Eurodollar
Margin
Consolidated and
Pricing Leverage Base Rate Letter of Commitment
Level Ratio Margin Credit Fee Fee
----- ----- ------ ---------- ---
I >2.25 1.25% 2.50% .500%
-
II >2.0 but <2.25 .75% 2.00% .500%
-
III >1.5 but <2.0 .25% 1.75% .375%
-
IV >1.0 but <1.5 0% 1.50% .300%
-
V <1.0 0% 1.25% .250%
The Applicable Percentage shall be determined and adjusted quarterly on
the date (each a "Rate Determination Date") five (5) Business Days
after the date by which the annual and quarterly compliance
certificates and related financial statements and information are
required in accordance with the provisions of Sections 7.1(a) and (b)
and Section 7.2(b), as appropriate; provided that:
(i) from the Closing Date until the Rate
Determination Date occurring in connection with delivery of
the financial statements for the fiscal quarter ending
September 30, 1998, the Applicable Percentages shall be based
on Pricing Level II;
(ii) from the Rate Determination Date occurring
in connection with delivery of the financial statements for
the fiscal quarter ending September 30, 1998 until the Rate
Determination Date occurring in connection with delivery of
the financial statements for the fiscal quarter ending
December 31, 1998, the Applicable Percentages shall be based
on Pricing Level II unless the Consolidated Leverage Ratio as
of September 30, 1998 equals or exceeds 2.25, in which case
the Applicable Percentages shall be based on Pricing Level I;
and
(iii) in the event an annual or quarterly
compliance certificate and related financial statements and
information are not delivered timely to the Agency Services
Address by the date required by Sections 7.1(a) and (b) and
Section 7.2(b), as appropriate, the Applicable Percentages
shall be based on Pricing Level I until such time as an
appropriate compliance certificate and related financial
statements and information are delivered, whereupon the
applicable Pricing Level shall be adjusted based on the
information contained in such compliance certificate and
related financial statements and information.
Each Applicable Percentage shall be effective from a Rate Determination
Date until the next such Rate Determination Date. The Administrative
Agent shall determine the appropriate Applicable Percentages in the
pricing matrix promptly upon receipt of the quarterly or annual
compliance certificate and related financial information and shall
promptly notify the Borrower and the Lenders of any change thereof.
Such determinations by the Administrative Agent shall be conclusive
absent manifest error. Adjustments in the Applicable Percentages shall
be effective as to existing Extensions of Credit as well as new
Extensions of Credit made thereafter.
3
12
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the
United States Code, as amended, modified, succeeded or replaced from
time to time.
"Bankruptcy Event" means, with respect to any Person, the
occurrence of any of the following with respect to such Person: (i) a
court or governmental agency having jurisdiction in the premises shall
enter a decree or order for relief in respect of such Person in an
involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of such Person or for any substantial part of its Property or
ordering the winding up or liquidation of its affairs; or (ii) there
shall be commenced against such Person an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter
in effect, or any case, proceeding or other action for the appointment
of a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of such Person or for any substantial part of its
Property or for the winding up or liquidation of its affairs, and such
involuntary case or other case, proceeding or other action shall remain
undismissed, undischarged or unbonded for a period of sixty (60)
consecutive days; or (iii) such Person shall commence a voluntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or consent to the entry of an order for relief in
an involuntary case under any such law, or consent to the appointment
or taking possession by a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of such Person or for any
substantial part of its Property or make any general assignment for the
benefit of creditors; or (iv) such Person shall be unable to, or shall
admit in writing its inability to, pay its debts generally as they
become due.
"Base Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest whole multiple of 1/100 of 1%)
equal to the greater of (a) the Federal Funds Rate in effect on such
day plus 1/2 of 1% or (b) the Prime Rate in effect on such day. If for
any reason the Administrative Agent shall have determined (which
determination shall be conclusive absent manifest error) that it is
unable after due inquiry to ascertain the Federal Funds Rate for any
reason, including the inability or failure of the Administrative Agent
to obtain sufficient quotations in accordance with the terms hereof,
the Base Rate shall be determined without regard to clause (a) of the
first sentence of this definition until the circumstances giving rise
to such inability no longer exist. Any change in the Base Rate due to a
change in the Prime Rate or the Federal Funds Rate shall be effective
on the effective date of such change in the Prime Rate or the Federal
Funds Rate, respectively.
"Base Rate Loan" means any Revolving Loan bearing interest at
a rate determined by reference to the Base Rate.
"Borrower" means RailWorks Corporation, a Delaware
corporation, as referenced in the opening paragraph, its successors and
permitted assigns.
4
13
"Borrowing Base" means, as of any day, an amount equal to the
sum of (a) eighty percent (80%) of Eligible Receivables, (b) fifty
percent (50%) of Eligible Receivables Retainage and (c) fifty percent
(50%) of Eligible Inventory, in each case as set forth in the most
recent Borrowing Base Certificate delivered to the Administrative Agent
and the Lenders in accordance with the terms of Section 7.1(d), with
adjustments to give effect to Acquisitions and Divestitures since the
date of such Borrowing Base Certificate on a Pro Forma Basis.
"Borrowing Base Certificate" shall have the meaning assigned
to such term in Section 7.1(d).
"Business Day" means a day other than a Saturday, Sunday or
other day on which commercial banks in Charlotte, North Carolina,
Baltimore, Maryland or New York, New York are authorized or required by
law to close, except that, when used in connection with a Eurodollar
Loan, such day shall also be a day on which dealings between banks are
carried on in U.S. dollar deposits in London, England.
"Capital Lease" means, as applied to any Person, any lease of
any Property (whether real, personal or mixed) by that Person as lessee
which, in accordance with GAAP, is or should be accounted for as a
capital lease on the balance sheet of that Person.
"Capital Lease Obligation" means the capital lease obligations
relating to a Capital Lease determined in accordance with GAAP.
"Cash Equivalents" means (a) securities issued or directly and
fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof (provided that the full faith and
credit of the United States of America is pledged in support thereof)
having maturities of not more than twelve months from the date of
acquisition, (b) U.S. dollar denominated time deposits and certificates
of deposit of (i) any Lender, or (ii) any domestic commercial bank of
recognized standing (y) having capital and surplus in excess of
$500,000,000 and (z) whose short-term commercial paper rating from S&P
is at least A-1 or the equivalent thereof or from Xxxxx'x is at least
P-1 or the equivalent thereof (any such bank being an "Approved Bank"),
in each case with maturities of not more than 270 days from the date of
acquisition, (c) commercial paper and variable or fixed rate notes
issued by any Approved Bank (or by the parent company thereof) or any
variable rate notes issued by, or guaranteed by, any domestic
corporation rated A-1 (or the equivalent thereof) or better by S&P or
P-1 (or the equivalent thereof) or better by Moody's and maturing
within six months of the date of acquisition, (d) repurchase agreements
entered into by a Person with a bank or trust company (including any of
the Lenders) or recognized securities dealer having capital and surplus
in excess of $500,000,000 for direct obligations issued by or fully
guaranteed by the United States of America in which such Person shall
have a perfected first priority security interest (subject to no other
Liens) and having, on the date of purchase thereof, a fair market value
of at least 100% of the amount of the repurchase obligations, (e)
obligations of
5
14
any State of the United States or any political subdivision thereof,
the interest with respect to which is exempt from federal income
taxation under Section 103 of the Internal Revenue Code, having a long
term rating of at least AA- or Aa-3 by S&P or Moody's, respectively,
and maturing within three years from the date of acquisition thereof,
(f) Investments in municipal auction preferred stock (i) rated AAA (or
the equivalent thereof) or better by S&P or Aaa (or the equivalent
thereof) or better by Moody's and (ii) with dividends that reset at
least once every 365 days, (g) Investments, classified in accordance
with GAAP as current assets, in money market investment programs
registered under the Investment Company Act of 1940, as amended, which
are administered by reputable financial institutions having capital of
at least $100,000,000 and the portfolios of which are limited to
Investments of the character described in the foregoing subdivisions
(a) through (f), and (h) other Investments deemed to be cash
equivalents in accordance with GAAP.
"Change of Control" means the occurrence of either of the
following events: (i) any "person" (as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")), other than a trustee or other fiduciary holding
securities under an employee benefit plan of the Borrower, a
corporation owned directly or indirectly by the stockholders of the
Borrower (immediately after the IPO) or any of their respective
Affiliates, becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the
Borrower representing 50% or more of the total voting power represented
by the Borrower's then outstanding securities that vote generally in
the election of directors; or (ii) during any period of two consecutive
years, individuals who at the beginning of such period constitute the
Borrower's Board of Directors and any new directors whose election by
the Borrower's Board of Directors or nomination for election by the
Borrower's stockholders was approved by a vote or a majority of the
directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election
was previously so approved, cease for any reason to constitute a
majority of the Borrower's Board of Directors.
"Closing Date" means the date hereof.
"Combination" has the meaning assigned to such term in the
Registration Statement.
"Commitment" means the Revolving Commitment and the LOC
Commitment.
"Commitment Fee" shall have the meaning given such term in
Section 3.5(a).
"Commitment Percentage" means the Revolving Commitment
Percentage.
"Commitment Period" means the period from and including the
Closing Date to but not including the earlier of (i) the Termination
Date, or (ii) the date on which the Commitments terminate in accordance
with the provisions of this Credit Agreement.
6
15
"Xxxxxxxx Holdings" means Xxxxxxxx Holdings Inc., a Delaware
corporation.
"Consolidated Adjusted EBITDA" means for any period for the
Consolidated Group, the sum of Consolidated EBITDA minus capital
expenditures, in each case on a consolidated basis determined in
accordance with GAAP applied on an consistent basis.
"Consolidated Base EBITDA" means, for any period, Consolidated
EBITDA for those members of the Consolidated Group existing as of the
Closing Date (excluding for purposes hereof, Consolidated EBITDA
attributable to an Acquisition after the Closing Date) as determined in
accordance with GAAP.
"Consolidated EBITDA" means for any period for the
Consolidated Group, the sum of Consolidated Net Income plus
Consolidated Interest Expense plus all provisions for any Federal,
state or other domestic and foreign income taxes plus depreciation and
amortization, in each case on a consolidated basis determined in
accordance with GAAP applied on a consistent basis, but excluding for
purposes hereof extraordinary gains and losses and related tax effects
thereon.
"Consolidated Fixed Charge Coverage Ratio" means for the
period of four consecutive fiscal quarters ending as of the date of
determination, the ratio of Consolidated Adjusted EBITDA to
Consolidated Fixed Charges.
"Consolidated Fixed Charges" means for any period for the
Consolidated Group, the sum of the principal amount of Consolidated
Interest Expense (excluding the amortization of debt discount and
premium) plus the greater of (i) twenty percent (20%) of Obligations
outstanding hereunder on the date of determination or (ii) Two Million
Dollars ($2,000,000), in each case on a consolidated basis determined
in accordance with GAAP applied on an consistent basis. Except as
otherwise expressly provided, the applicable period shall be for the
four consecutive fiscal quarters ending as of the date of
determination.
"Consolidated Funded Debt" means Funded Debt of the
Consolidated Group determined on a consolidated basis in accordance
with GAAP applied on a consistent basis.
"Consolidated Group" means the Borrower and its consolidated
subsidiaries as determined in accordance with GAAP.
"Consolidated Interest Expense" means for any period for the
Consolidated Group, all interest expense, including the amortization of
debt discount and premium, the interest component under Capital Leases
and the implied interest component under Securitization Transactions,
in each case on a consolidated basis determined in accordance with GAAP
applied on a consolidated basis. Except as expressly provided
7
16
otherwise, the applicable period shall be for the four consecutive
quarters ending as of the date of determination.
"Consolidated Leverage Ratio" means, as of the last day of any
fiscal quarter, the ratio of Consolidated Funded Debt on such day to
Consolidated EBITDA for the period of four consecutive fiscal quarters
ending as of such day.
"Consolidated Net Income" means for any period for the
Consolidated Group, net income on a consolidated basis determined in
accordance with GAAP applied on a consistent basis plus the amount of
any deduction from such net income with respect to the fiscal quarter
ending September 30, 1998 attributable to (i) the Stock Incentive Plan
and (ii) other nonrecurring expenses related to the IPO, the
Combination and this Credit Agreement. Except as expressly provided
otherwise, the applicable period shall be for the four consecutive
quarters ending as of the date of determination.
"Consolidated Net Worth" means, as of any date for the
Consolidated Group, shareholders' equity or net worth as determined in
accordance with GAAP.
"Consolidated Rent Expense" means rental expense under
Operating Leases of the Consolidated Group on a consolidated basis for
the applicable period, as determined in accordance with GAAP. Except as
expressly provided otherwise, the applicable period shall be for the
four consecutive quarters ending as of the date of determination.
"Contractual Obligation" means, as to any Person, any
provision of any security issued by such Person or of any material
agreement, instrument or undertaking to which such Person is a party or
by which it or any of its property is bound.
"Credit Documents" means a collective reference to this Credit
Agreement, the Notes, the LOC Documents, the Pledge Agreement, the
Security Agreement, each Joinder Agreement, the Administrative Agent's
Fee Letter, and all other related agreements and documents issued or
delivered hereunder or thereunder or pursuant hereto or thereto.
"Credit Party" means any of the Borrower and the Guarantors.
"Default" means any event, act or condition which with notice
or lapse of time, or both, would constitute an Event of Default.
"Defaulting Lender" means, at any time, any Lender that, at
such time, (i) has failed to make an Extension of Credit required
pursuant to the terms of this Credit Agreement, (ii) has failed to pay
to the Administrative Agent or any Lender an amount owed by such Lender
pursuant to the terms of the Credit Agreement or any other of the
Credit Documents, or (iii) has been deemed insolvent or has become
subject to a bankruptcy or insolvency proceeding or to a receiver,
trustee or similar proceeding.
8
17
"Divestiture" means any transaction by which the Borrower or
any Subsidiary sells, leases, transfers or otherwise disposes of (i)
any Property with which an ongoing business is conducted or to be
conducted; (ii) all or substantially all or any substantial portion of
its assets; or (iii) the capital stock of a Subsidiary, in each case
other than (x) the sale of Inventory in the ordinary course of
business, (y) the sale, lease, transfer or other disposition of plant,
property and equipment which is no longer used or useful in the
business of such Credit Party or as to which the proceeds thereof are
reinvested in plant, property or equipment within six months thereof,
or (z) sales, leases, transfers or other dispositions of Property or
capital stock of a Subsidiary by one Credit Party to another.
"Dollars" and "$" means dollars in lawful currency of the
United States of America.
"Domestic Credit Party" means any Credit Party which is
incorporated or organized under the laws of any State of the United
States or the District of Columbia.
"Domestic Subsidiary" means any Subsidiary which is
incorporated or organized under the laws of any State of the United
States or the District of Columbia.
"Eligible Inventory" means, as of any date of determination,
the aggregate book value (based on a FIFO valuation) of all inventory
owned by the Credit Parties on a consolidated basis after deducting
allowances or reserves relating thereto, as shown on the books and
records of the Credit Parties.
"Eligible Receivables" means, as of any date of determination,
the aggregate book value of all accounts, accounts receivable,
receivables, and obligations for payment created or arising from the
sale of inventory or the rendering of services in the ordinary course
of business (collectively, the "Receivables"), owned by or owing to the
Credit Parties on a consolidated basis after deducting retainage and
allowances or reserves relating thereto, as shown on the books and
records of the Credit Parties, but excluding in any event Receivables
owing by an account debtor which is not solvent or is subject to any
bankruptcy or insolvency proceeding of any kind.
"Eligible Receivables Retainage" means, as of any date of
determination, the aggregate book value of that portion of Receivables
owned by or owing to t he Credit Parties on a consolidated basis
consisting of retainage but excluding in any event such portion of
Receivables owing by an account debtor which is not solvent or is
subject to any bankruptcy or insolvency proceeding of any kind.
"Environmental Laws" means any and all lawful and applicable
Federal, state, local and foreign statutes, laws, regulations,
ordinances, rules, judgments, orders, decrees, permits, concessions,
grants, franchises, licenses, agreements or other governmental
restrictions relating to the environment or to emissions, discharges,
releases or threatened releases of
9
18
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes into the environment including, without
limitation, ambient air, surface water, ground water, or land, or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous substances
or wastes.
"Equity Transaction" means, with respect to any member of the
Consolidated Group, any issuance of shares of its capital stock or
other equity interest, other than an issuance (i) to a member of the
Consolidated Group, (ii) in connection with a conversion of debt
securities to equity or (iii) in connection with exercise by a present
or former employee, officer or director under a stock incentive plan,
stock option plan or other equity-based compensation plan or
arrangement.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute thereto, as interpreted by
the rules and regulations thereunder, all as the same may be in effect
from time to time. References to sections of ERISA shall be construed
also to refer to any successor sections.
"ERISA Affiliate" means an entity which is under common
control with any Credit Party within the meaning of Section 4001(a)(14)
of ERISA, or is a member of a group which includes the Borrower and
which is treated as a single employer under Sections 414(b) or (c) of
the Internal Revenue Code.
"ERISA Event" means (i) with respect to any Plan, the
occurrence of a Reportable Event or the substantial cessation of
operations (within the meaning of Section 4062(e) of ERISA); (ii) the
withdrawal by the Borrower, any Subsidiary of the Borrower or any ERISA
Affiliate from a Multiple Employer Plan during a plan year in which it
was a substantial employer (as such term is defined in Section
4001(a)(2) of ERISA), or the termination of a Multiple Employer Plan;
(iii) the distribution of a notice of intent to terminate or the actual
termination of a Plan pursuant to Section 4041(a)(2) or 4041A of ERISA;
(iv) the institution of proceedings to terminate or the actual
termination of a Plan by the PBGC under Section 4042 of ERISA; (v) any
event or condition which would reasonably be expected to constitute
grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan; (vi) the complete or
partial withdrawal of the Borrower, any Subsidiary of the Borrower or
any ERISA Affiliate from a Multiemployer Plan; (vii) the conditions for
imposition of a lien under Section 302(f) of ERISA exist with respect
to any Plan; or (vii) the adoption of an amendment to any Plan
requiring the provision of security to such Plan pursuant to Section
307 of ERISA.
"Eurodollar Loan" means any Revolving Loan bearing interest at
a rate determined by reference to the Eurodollar Rate.
10
19
"Eurodollar Rate" means, for the Interest Period for each
Eurodollar Loan comprising part of the same borrowing (including
conversions, extensions and renewals), a per annum interest rate
determined pursuant to the following formula:
Eurodollar Rate = Interbank Offered Rate
-------------------------------------------
1 - Eurodollar Reserve Percentage
"Eurodollar Reserve Percentage" means for any day, that
percentage (expressed as a decimal) which is in effect from time to
time under Regulation D of the Board of Governors of the Federal
Reserve System (or any successor), as such regulation may be amended
from time to time or any successor regulation, as the maximum reserve
requirement (including, without limitation, any basic, supplemental,
emergency, special, or marginal reserves) applicable with respect to
Eurocurrency liabilities as that term is defined in Regulation D (or
against any other category of liabilities that includes deposits by
reference to which the interest rate of Eurodollar Loans is
determined), whether or not Lender has any Eurocurrency liabilities
subject to such reserve requirement at that time. Eurodollar Loans
shall be deemed to constitute Eurocurrency liabilities and as such
shall be deemed subject to reserve requirements without benefits of
credits for proration, exceptions or offsets that may be available from
time to time to a Lender. The Eurodollar Rate shall be adjusted
automatically on and as of the effective date of any change in the
Eurodollar Reserve Percentage.
"Event of Default" means such term as defined in Section 9.1.
"Extension of Credit" means, as to any Lender, the making of,
or participation in, a Revolving Loan by such Lender or the issuance or
extension of, or participation in, a Letter of Credit.
"Fees" means all fees payable pursuant to Section 3.5.
"Federal Funds Rate" means, for any day, the rate of interest
per annum (rounded upwards, if necessary, to the nearest whole multiple
of 1/100 of 1%) equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers on such day, as published by the
Federal Reserve Bank of New York on the Business Day next succeeding
such day, provided that (A) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions
on the next preceding Business Day and (B) if no such rate is so
published on such next preceding Business Day, the Federal Funds Rate
for such day shall be the average rate quoted to the Administrative
Agent on such day on such transactions as determined by the
Administrative Agent.
"Foreign Subsidiary" means a Subsidiary which is not a
Domestic Subsidiary.
11
20
"Founding Companies" means the Credit Parties (other than the
Borrower) party to this Credit Agreement on the Closing Date, as they
existed immediately prior to the Combination.
"Funded Debt" means, with respect to any Person, without
duplication, (i) all Indebtedness of such Person for borrowed money,
(ii) all obligations of such Person evidenced by bonds, debentures,
notes or similar instruments, or upon which interest payments are
customarily made, (iii) all purchase money Indebtedness (including for
purposes hereof, indebtedness and obligations described in clauses
(iii) and (iv) of the definition of "Indebtedness") of such Person,
including without limitation the principal portion of all obligations
of such Person under Capital Leases, (iv) all Support Obligations of
such Person with respect to Funded Indebtedness of another Person, (v)
the maximum available amount of all standby letters of credit or
acceptances issued or created for the account of such Person, (vi) all
Funded Debt of another Person secured by a Lien on any Property of such
Person, whether or not such Funded Indebtedness has been assumed,
provided that for purposes of this clause (vi) the amount of such
Funded Debt shall be limited to the greater of (A) the amount of such
Funded Debt as to which there is recourse to such Person and (B) the
fair market value of the property which is subject to the Lien, (vii)
the outstanding attributed principal amount under any Securitization
Transaction, and (viii) the principal balance outstanding under any
synthetic lease, tax retention operating lease, off-balance sheet loan
or similar off-balance sheet financing product to which such Person is
a party, where such transaction is considered borrowed money
indebtedness for tax purposes but is classified as an operating lease
in accordance with GAAP. The Funded Debt of any Person shall (i)
include the Funded Debt of any partnership or joint venture in which
such Person is a general partner or joint venturer, but only to the
extent to which there is recourse to such Person for the payment of
such Funded Debt, but (ii) exclude, in any event, amounts in respect of
financed insurance premium obligations permitted under Section 8.1(g).
"GAAP" means generally accepted accounting principles in the
United States applied on a consistent basis and subject to the terms of
Section 1.3 hereof.
"Governmental Authority" means any Federal, state, local or
foreign court or governmental agency, authority, instrumentality or
regulatory body.
"Guarantor" means each of those other Persons identified as a
"Guarantor" on the signature pages hereto, and each other Person which
may hereafter become a Guarantor by execution of a Joinder Agreement,
together with their successors and permitted assigns.
"Guaranteed Obligations" means, as to each Guarantor, without
duplication, (i) all obligations of the Borrower (including interest
accruing after a Bankruptcy Event, regardless of whether such interest
is allowed as a claim under the Bankruptcy Code) to the Lenders and the
Administrative Agent, whenever arising, under this Credit Agreement,
the Notes or the other Credit Documents, and (ii) all liabilities and
12
21
obligations, whenever arising, owing from the Borrower to any Lender,
or any Affiliate of a Lender, arising under any Hedging Agreement
relating to Obligations hereunder.
"Hedging Agreement" means any interest rate protection
agreement or foreign currency exchange agreement between the Borrower
and any Lender, or any Affiliate of a Lender.
"Indebtedness" of any Person means (i) all obligations of such
Person for borrowed money, (ii) all obligations of such Person
evidenced by bonds, debentures, notes or similar instruments, or upon
which interest payments are customarily made, (iii) all obligations of
such Person under conditional sale or other title retention agreements
relating to Property purchased by such Person (other than customary
reservations or retentions of title under agreements with suppliers
entered into in the ordinary course of business), (iv) all obligations
of such Person issued or assumed as the deferred purchase price of
Property or services purchased by such Person (other than trade debt
incurred in the ordinary course of business and due within six months
of the incurrence thereof) which would appear as liabilities on a
balance sheet of such Person, (v) all obligations of such Person under
take-or-pay or similar arrangements or under commodities agreements,
(vi) all Indebtedness of others secured by (or for which the holder of
such Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien on, or payable out of the proceeds of production
from, Property owned or acquired by such Person, whether or not the
obligations secured thereby have been assumed, provided that for
purposes hereof the amount of such Indebtedness shall be limited to the
greater of (A) the amount of such Indebtedness as to which there is
recourse to such Person and (B) the fair market value of the property
which is subject to the Lien, (vii) all Support Obligations of such
Person, (viii) the principal portion of all obligations of such Person
under Capital Leases, (ix) all obligations of such Person in respect of
interest rate protection agreements, foreign currency exchange
agreements, commodity purchase or option agreements or other interest
or exchange rate or commodity price hedging agreements (including, but
not limited to, the Hedging Agreements), (x) the maximum amount of all
standby letters of credit issued or bankers' acceptances facilities
created for the account of such Person and, without duplication, all
drafts drawn thereunder (to the extent unreimbursed), (xi) all
preferred stock issued by such Person and required by the terms thereof
to be redeemed, or for which mandatory sinking fund payments are due,
by a fixed date, (xii) the outstanding attributed principal amount
under any Securitization Transaction and (xiii) the principal balance
outstanding under any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product
to which such Person is a party, where such transaction is considered
borrowed money indebtedness for tax purposes but is classified as an
operating lease in accordance with GAAP. The Indebtedness of any Person
shall include the Indebtedness of any partnership or joint venture in
which such Person is a general partner or a joint venturer, but only to
the extent to which there is recourse to such Person for payment of
such Indebtedness.
13
22
"IPO" means the initial public offering of the Borrower's
common stock pursuant to the Registration Statement.
"Interbank Offered Rate" means, for the Interest Period for
each Eurodollar Loan comprising part of the same borrowing (including
conversions, extensions and renewals), a per annum interest rate
(rounded upwards, if necessary, to the nearest whole multiple of 1/100
of 1%) equal to the rate of interest, determined by the Administrative
Agent on the basis of the offered rates for deposits in dollars for a
period of time corresponding to such Interest Period (and commencing on
the first day of such Interest Period), appearing on Telerate Page 3750
(or, if, for any reason, Telerate Page 3750 is not available, the
Reuters Screen LIBO Page) as of approximately 11:00 A.M. (London time)
two (2) Business Days before the first day of such Interest Period. As
used herein, "Telerate Page 3750" means the display designated as page
3750 by Dow Xxxxx Markets, Inc. (or such other page as may replace such
page on that service for the purpose of displaying the British Bankers
Association London interbank offered rates) and "Reuters Screen LIBO
Page" means the display designated as page "LIBO" on the Reuters
Monitor Money Rates Service (or such other page as may replace the LIBO
page on that service for the purpose of displaying London interbank
offered rates of major banks).
"Interest Payment Date" means (i) as to any Base Rate Loan,
the last day of each March, June, September and December and the
Termination Date and (ii) as to any Eurodollar Loan, the last day of
each Interest Period for such Loan, the date of repayment of principal
of such Loan and on the Termination Date, and in addition where the
applicable Interest Period is more than three months, then also on the
date three months from the beginning of the Interest Period, and each
three months thereafter. If an Interest Payment Date falls on a date
which is not a Business Day, such Interest Payment Date shall be deemed
to be the next succeeding Business Day.
"Interest Period" means as to any Eurodollar Loan, a period of
one, two, three or six months' duration, as the Borrower may elect,
commencing in each case on the date of the borrowing (including
conversions, extensions and renewals); provided, however, (A) if any
Interest Period would end on a day which is not a Business Day, such
Interest Period shall be extended to the next succeeding Business Day
(where the next succeeding Business Day falls in the next succeeding
calendar month, then on the next preceding Business Day), (B) no
Interest Period shall extend beyond the Termination Date, and (C) where
an Interest Period begins on a day for which there is no numerically
corresponding day in the calendar month in which the Interest Period is
to end, such Interest Period shall end on the last day of such calendar
month.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended, and any successor statute thereto, as interpreted by
the rules and regulations issued thereunder, in each case as in effect
from time to time. References to sections of the Internal Revenue Code
shall be construed also to refer to any successor sections.
14
23
"Investment", in any Person, means any loan or advance to such
Person, any purchase or other acquisition of any capital stock,
warrants, rights, options, obligations or other securities of, or
equity interest in, such Person, any capital contribution to such
Person or any other investment in such Person, including, without
limitation, any Support Obligation incurred for the benefit of such
Person.
"Issuing Lender" means NationsBank.
"Issuing Lender Fees" shall have the meaning assigned to such
term in Section 3.5(b)(ii).
"Joinder Agreement" means a Joinder Agreement substantially in
the form of Schedule 7.11 hereto, executed and delivered by an
Additional Credit Party in accordance with the provisions of Section
7.11.
"Joint Venture" means any corporation, partnership, limited
liability company or other entity in which the Borrower or any other
Credit Party owns or acquires fifty percent (50%) or less of the Voting
Stock or economic interests, and which conducts any business that the
Credit Parties would be permitted to conduct in accordance with Section
7.5.
"Lenders" means each of the Persons identified as a "Lender"
on the signature pages hereto, and their successors and assigns.
"Letter of Credit" means any letter of credit issued by the
Issuing Lender for the account of the Borrower in accordance with the
terms of Section 2.2.
"Letter of Credit Fee" shall have the meaning given such term
in Section 3.5(b)(i).
"Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, security interest, encumbrance, lien (statutory or
otherwise), preference, priority or charge of any kind (including any
agreement to give any of the foregoing, any conditional sale or other
title retention agreement, and any lease in the nature thereof).
"Loan" or "Loans" means the Revolving Loans.
"LOC Commitment" means the commitment of the Issuing Lender to
issue, and to honor payment obligations under, Letters of Credit
hereunder and with respect to each Lender, the commitment of each
Lender to purchase participation interests in the Letters of Credit up
to such Lender's LOC Committed Amount as specified in Schedule 2.1(a),
as such amount may be reduced from time to time in accordance with the
provisions hereof.
15
24
"LOC Committed Amount" means, collectively, the aggregate
amount of all of the LOC Commitments of the Lenders to issue and
participate in Letters of Credit as referenced in Section 2.2(a) and,
individually, the amount of each Lender's LOC Commitment as specified
in Schedule 2.1(a).
"LOC Documents" means, with respect to any Letter of Credit,
such Letter of Credit, any amendments thereto, any documents delivered
in connection therewith, any application therefor, and any agreements,
instruments, guarantees or other documents (whether general in
application or applicable only to such Letter of Credit) governing or
providing for (i) the rights and obligations of the parties concerned
or at risk or (ii) any collateral security for such obligations.
"LOC Obligations" means, at any time, the sum of (i) the
maximum amount which is, or at any time thereafter may become,
available to be drawn under Letters of Credit then outstanding,
assuming compliance with all requirements for drawings referred to in
such Letters of Credit plus (ii) the aggregate amount of all drawings
under Letters of Credit honored by the Issuing Lender but not
theretofore reimbursed.
"Material Adverse Effect" means a material adverse effect on
(i) the condition (financial or otherwise), operations, business,
assets or liabilities of the Consolidated Group taken as a whole, (ii)
the ability of the Credit Parties taken as a whole to perform any
material obligation under the Credit Documents to which it is a party
or (iii) the rights and remedies of the Lenders under the Credit
Documents.
"Material Credit Party" means (i) the Borrower and (ii) any
other Credit Party at any time whose assets at the time of
determination constitute five percent (5%) or more of the assets of the
Consolidated Group or whose revenues at the time of determination
constitute five percent (5%) or more of the revenues of the
Consolidated Group.
"Materials of Environmental Concern" means any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products or any hazardous or toxic substances, materials or wastes,
defined or regulated as such in or under any Environmental Laws,
including, without limitation, asbestos, polychlorinated biphenyls and
urea-formaldehyde insulation.
"Moody's" means Xxxxx'x Investors Service, Inc., or any
successor or assignee of the business of such company in the business
of rating securities.
"Multiemployer Plan" means a Plan which is a multiemployer
plan as defined in Sections 3(37) or 4001(a)(3) of ERISA.
16
25
"Multiple Employer Plan" means a Plan which the Borrower, any
Subsidiary of the Borrower or any ERISA Affiliate and at least one
employer other than the Borrower, any Subsidiary of the Borrower or any
ERISA Affiliate are contributing sponsors.
"NationsBank" means NationsBank, N.A. and its successors.
"Non-Excluded Taxes" means such term as is defined in Section
3.10.
"Note" or "Notes" means any Revolving Note.
"Notice of Borrowing" means a written notice of borrowing in
substantially the form of Schedule 2.1(b)(i), as required by Section
2.1(b)(i).
"Notice of Extension/Conversion" means a written notice of
extension or conversion in substantially the form of Schedule 3.2, as
required by Section 3.2.
"Obligations" means, collectively, the Revolving Loans and the
LOC Obligations.
"Operating Lease" means, as applied to any Person, any lease
(including, without limitation, leases which may be terminated by the
lessee at any time) of any Property (whether real, personal or mixed)
which is not a Capital Lease other than any such lease in which that
Person is the lessor.
"Participation Interest" means the purchase by a Lender of a
participation in LOC Obligations as provided in Section 2.2(c) and in
Revolving Loans as provided in Section 3.14.
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA and any
successor thereof.
"Permitted Investments" means Investments which are either (i)
cash and Cash Equivalents; (ii) accounts receivable created, acquired
or made in the ordinary course of business and payable or dischargeable
in accordance with customary trade terms; (iii) Investments consisting
of stock, obligations, securities or other property received in
settlement of accounts receivable (created in the ordinary course of
business) from obligors; (iv) Support Obligations permitted by Section
8.1; (v) Acquisitions permitted by Section 8.4; (vi) advances or loans
to employees, directors or officers to pay the tax liabilities
associated with participation in the Stock Incentive Plan and other
advances or loans to employees, directors, officers or agents not to
exceed $500,000 in the aggregate at any time outstanding; (vii)
advances or loans to customers or suppliers (other than advance payment
of sums due under contracts in the ordinary course of business) that do
not exceed $100,000 in the aggregate at any one time outstanding,
(viii) Investments by a member of the Consolidated Group or an
Affiliate of a member of the Consolidated Group in connection with a
Permitted Securitization Transaction, (ix) Investments by members of
the Consolidated Group in their
17
26
Subsidiaries and Affiliates existing on the Closing Date, (x)
Investments by one Credit Party in and to a Domestic Credit Party, (x)
Investments in Joint Ventures not to exceed, on a cost basis,
$4,000,000 in any individual Joint Venture, and $10,000,000, in the
aggregate in all Joint Ventures at any one time outstanding, and (xii)
other loans, advances and investments of a nature not contemplated in
the foregoing subsections in an amount not to exceed $500,000 in the
aggregate at any time outstanding.
"Permitted Liens" means:
(i) Liens in favor of the Administrative Agent
on behalf of the Lenders;
(ii) Liens in favor of a Lender or an Affiliate
of a Lender pursuant to a Hedging Agreement permitted
hereunder, but only (A) to the extent such Liens secure
obligations under such agreements permitted under Section 8.1,
(B) to the extent such Liens are on the same collateral as to
which the Lenders also have a Lien and (C) if such provider
and the Lender shall share pari passu in the collateral
subject to such Liens;
(iii) Liens (other than Liens created or imposed
under ERISA) for taxes, assessments or governmental charges or
levies not yet due or Liens for taxes being contested in good
faith by appropriate proceedings for which adequate reserves
determined in accordance with GAAP have been established (and
as to which the Property subject to any such Lien is not yet
subject to foreclosure, sale or loss on account thereof);
(iv) statutory Liens of landlords and Liens of
carriers, warehousemen, mechanics, materialmen and suppliers
and other Liens imposed by law or pursuant to customary
reservations or retentions of title arising in the ordinary
course of business, provided that such Liens secure only
amounts not yet due and payable or, if due and payable, are
unfiled and no other action has been taken to enforce the same
or are being contested in good faith by appropriate
proceedings for which adequate reserves determined in
accordance with GAAP have been established (and as to which
the Property subject to any such Lien is not yet subject to
foreclosure, sale or loss on account thereof);
(v) Liens (other than Liens created or imposed
under ERISA) incurred or deposits made by the Borrower and its
Subsidiaries in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other
types of social security, or to secure the performance of
tenders, statutory obligations, bids, leases, government
contracts, performance and return-of-money bonds and other
similar obligations (exclusive of obligations for the payment
of borrowed money);
18
27
(vi) Liens in connection with attachments or
judgments (including judgment or appeal bonds) provided that
the judgments secured shall, within 30 days after the entry
thereof, have been discharged or execution thereof stayed
pending appeal, or shall have been discharged within 30 days
after the expiration of any such stay;
(vii) 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;
(viii) Liens securing purchase money and
sale/leaseback Indebtedness (including Capital Leases) to the
extent permitted under Sections 8.1(b) and 8.1(c) provided
that any such Lien attaches only to the Property financed or
leased and such Lien attaches thereto concurrently with or
within 90 days after the acquisition thereof in connection
with the purchase money transactions and within 30 days after
the closing of any sale/leaseback transaction;
(ix) leases or subleases granted to others not
interfering in any material respect with the business of any
member of the Consolidated Group;
(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;
(xi) Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of
customs duties in connection with the importation of goods;
(xii) Liens created or deemed to exist in
connection with a Permitted Securitization Transaction
(including any related filings of any financing statements),
but only to the extent that any such Lien relates to the
applicable receivables and related property actually sold,
contributed or otherwise conveyed pursuant to such
transaction;
(xiii) Liens deemed to exist in connection with
Investments in repurchase agreements permitted under Section
8.5;
(xiv) normal and customary rights of setoff upon
deposits of cash in favor of banks or other depository
institutions;
19
28
(xv) Liens in respect of Indebtedness permitted
under Section 8.1(g) hereof, limited solely to sums payable
under the policy or policies to which such Indebtedness
relates; and
(xvi) Liens existing as of the Closing Date and
set forth on Schedule 6.8; provided that no such Lien shall at
any time be extended to or cover any Property other than the
Property subject thereto on the Closing Date.
"Person" means any individual, partnership, joint venture,
firm, corporation, limited liability company, association, trust or
other enterprise (whether or not incorporated) or any Governmental
Authority.
"Plan" means any employee benefit plan (as defined in Section
3(3) of ERISA) which is covered by ERISA and with respect to which the
Borrower, any Subsidiary of the Borrower or any ERISA Affiliate is (or,
if such plan were terminated at such time, would under Section 4069 of
ERISA be deemed to be) an "employer" within the meaning of Section 3(5)
of ERISA.
"Pledge Agreement" means the Pledge Agreement dated as of the
Closing Date given by the Borrower and Xxxxxxxx Holdings to
NationsBank, N.A., as Administrative Agent, to secure the obligations
hereunder, as amended and modified.
"Prime Rate" means the rate of interest per annum publicly
announced from time to time by NationsBank as its prime rate in effect
at its principal office in Charlotte, North Carolina, with each change
in the Prime Rate being effective on the date such change is publicly
announced as effective (it being understood and agreed that the Prime
Rate is a reference rate used by NationsBank in determining interest
rates on certain loans and is not intended to be the lowest rate of
interest charged on any extension of credit by NationsBank to any
debtor).
"Pro Forma Basis" means, with respect to any calculation of
financial covenants in connection with any proposed Acquisition or
Divestiture pursuant to Sections 8.4 or 8.3, respectively, that (i)
such financial covenants shall be calculated on a pro forma basis
giving effect to such Acquisition or Divestiture, (ii) such Acquisition
or Divestiture 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 Acquisition or Divestiture with
respect to which the Administrative Agent and the Lenders have received
the Officer's Certificate required by Section 7.2(b), (iii) any
Indebtedness incurred in connection with any such Acquisition shall be
deemed to have been incurred as of the first day of such four fiscal
quarter period, (iv) any Indebtedness repaid in connection with any
such Divestiture shall be deemed to have been repaid as of the first
day of such four fiscal quarter period, and (v) if such Indebtedness
incurred or repaid for the purposes of clause (iv) has a floating or
formula rate, then the implied rate of interest for such Indebtedness
for the applicable four quarter
20
29
period 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.
"Property" means any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
"Register" shall have the meaning given such term in Section
11.3(c).
"Registration Statement" means the Registration Statement of
the Borrower on Form S-1, initially filed with the SEC on May 22, 1998,
as amended and supplemented through Post-Effective Amendment No. 1
thereto, filed with the SEC on July 29, 1998 and declared effective by
the SEC on July 29, 1998.
"Regulation T, U or X" means Regulation T, U or X,
respectively, of the Board of Governors of the Federal Reserve System
as from time to time in effect and any successor to all or a portion
thereof.
"Release" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping
or disposing into the environment (including the abandonment or
discarding of barrels, containers and other closed receptacles
containing any Materials of Environmental Concern).
"Reportable Event" means any of the events set forth in
Section 4043(c) of ERISA, other than those events as to which the
notice requirement has been waived by regulation.
"Required Lenders" means, at any time, Lenders having more
than fifty percent (50%) of the Commitments (as such Commitments may be
increased pursuant to Section 2.1(k)), or if the Commitments have been
terminated, Lenders having more than fifty percent (50%) of the
aggregate principal amount of the Obligations outstanding (taking into
account in each case Participation Interests or obligation to
participate therein); provided that the Commitments of, and outstanding
principal amount of Obligations (taking into account Participation
Interests therein) owing to, a Defaulting Lender shall be excluded for
purposes hereof in making a determination of Required Lenders.
"Requirement of Law" means any law, treaty, rule or regulation
or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or
any of its material property is subject.
"Responsible Officer" means the Chief Executive Officer, the
Chief Financial Officer, the Controller, the Chief Operating Officer,
the Chief Accounting Officer and the Treasurer of the Borrower.
21
30
"Restricted Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class
of stock now or hereafter outstanding, except (A) a dividend payable
solely in shares of that class to the holders of that class, (B)
dividends and other distributions payable to a Credit Party, (C)
dividends paid or payable to the shareholders of certain of the
Founding Companies in respect of tax liabilities incurred under
Subchapter S of the Internal Revenue Code on or before the Closing Date
(whether such dividends are paid on, before or after the Closing Date)
and (D) the repurchase of stock of a minority shareholder of one of the
Founding Companies referred to in note 4g(1) to the unaudited pro forma
as adjusted financial statements of the Borrower, as set forth on page
F-8 of the Registration Statement, (ii) any redemption, retirement,
sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any class of stock now or
hereafter outstanding, and (iii) any payment made to retire, or to
obtain the surrender of, any outstanding warrants, options or other
rights to acquire shares of any class of stock now or hereafter
outstanding.
"Revolving Commitment" means, with respect to each Lender, the
commitment of such Lender to make Revolving Loans in an aggregate
principal amount at any time outstanding of up to such Lender's
Commitment Percentage of the Aggregate Revolving Committed Amount as
specified in Schedule 2.1(a), as such amount may be reduced from time
to time in accordance with the provisions hereof.
"Revolving Commitment Percentage" means, for each Lender, a
fraction (expressed as a decimal) the numerator of which is the
Revolving Commitment of such Lender at such time and the denominator of
which is the Aggregate Revolving Committed Amount at such time. The
initial Revolving Commitment Percentages are set out on Schedule
2.1(a).
"Revolving Committed Amount" means, collectively, the
aggregate amount of all of the Revolving Commitments and, individually,
the amount of each Lender's Revolving Commitment as specified in
Schedule 2.1(a).
"Revolving Loans" shall have the meaning assigned to such term
in Section 2.1(a).
"Revolving Note" or "Revolving Notes" means the promissory
notes of the Borrower in favor of each of the Lenders evidencing the
Revolving Loans in substantially the form attached as Schedule 2.1(e),
individually or collectively, as appropriate, as such promissory notes
may be amended, modified, supplemented, extended, renewed or replaced
from time to time.
"SEC" means the Securities and Exchange Commission and any
successor Governmental Authority.
22
31
"S&P" means Standard & Poor's Ratings Group, a division of
McGraw Hill, Inc., or any successor or assignee of the business of such
division in the business of rating securities.
"Securitization Transaction" means any financing transaction
or series of financing transactions that have been or may be entered
into by a member of the Consolidated Group pursuant to which such
member of the Consolidated Group may sell, convey or otherwise transfer
to (i) a Subsidiary or affiliate (a "Securitization Subsidiary"), or
(ii) any other Person, or may grant a security interest in, any
receivables or interests therein secured by merchandise or services
financed thereby (whether such receivables are then existing or arising
in the future) of such member of the Consolidated Group, and any assets
related thereto, including without limitation, all security interests
in merchandise or services financed thereby, the proceeds of such
receivables, and other assets which are customarily sold or in respect
of which security interests are customarily granted in connection with
securitization transactions involving such assets.
"Security Agreement" means the Security Agreement dated as of
the Closing Date given by the Borrower and the other grantors
identified therein to NationsBank, N.A., as Administrative Agent, to
secure the obligations hereunder, as amended and modified.
"Single Employer Plan" means any Plan which is covered by
Title IV of ERISA, but which is not a Multiemployer Plan or a Multiple
Employer Plan.
"Stock Incentive Plan" means the Borrower's 1998 Stock
Incentive Plan described in the Registration Statement.
"Subordinated Debt" means any Indebtedness of a member of the
Consolidated Group which by its terms is expressly subordinated in
right of payment to the prior payment of the obligations under the
Credit Agreement and the other Credit Documents on terms and conditions
satisfactory to the Required Lenders.
"Subsidiary" means, as to any Person, (a) any corporation more
than 50% of whose stock of any class or classes having by the terms
thereof ordinary voting power to elect a majority of the directors of
such corporation (irrespective of whether or not at the time, any class
or classes of such corporation shall have or might have voting power by
reason of the happening of any contingency) is at the time owned by
such Person directly or indirectly through Subsidiaries, and (b) any
partnership, association, joint venture or other entity in which such
Person directly or indirectly through Subsidiaries has more than 50% of
the voting interests at any time. Unless otherwise identified,
"Subsidiary" or "Subsidiaries" shall mean Subsidiaries of the Borrower.
"Support Obligations" means, with respect to any Person,
without duplication, any obligations of such Person (other than
endorsements in the ordinary course of business of negotiable
instruments for deposit or collection) guaranteeing or intended to
guarantee any
23
32
Indebtedness of any other Person in any manner, whether direct or
indirect, and including without limitation any obligation, whether or
not contingent, (i) to purchase any such Indebtedness or any Property
constituting security therefor, (ii) to advance or provide funds or
other support for the payment or purchase of any such Indebtedness or
to maintain working capital, solvency or other balance sheet condition
of such other Person (including without limitation keep well
agreements, maintenance agreements, comfort letters or similar
agreements or arrangements) for the benefit of any holder of
Indebtedness of such other Person, (iii) to lease or purchase Property,
securities or services primarily for the purpose of assuring the holder
of such Indebtedness, or (iv) to otherwise assure or hold harmless the
holder of such Indebtedness against loss in respect thereof, but
specifically excluding guaranties or other assurances with respect to
any Credit Party's performance obligations under bids or contracts made
or entered into in the ordinary course of business (including, without
limitation, guaranties in favor of sureties under performance bonds or
the like and guaranties issued by Credit Parties in substitution for or
in support of such guaranties issued prior to the Closing Date by the
Founding Companies or their respective stockholders and principals).
The amount of any Support Obligation hereunder shall (subject to any
limitations set forth therein) be deemed to be an amount equal to the
outstanding principal amount (or maximum principal amount, if larger)
of the Indebtedness in respect of which such Support Obligation is
made.
"Termination Date" means August 4, 2001, or if extended
pursuant to the provisions of Section 2.1(g), such later date as to
which the Termination Date may be extended.
"Voting Stock" means, with respect to any Person, capital
stock issued by such Person the holders of which are ordinarily, in the
absence of contingencies, entitled to vote for the election of
directors (or persons performing similar functions) of such Person,
even though the right so to vote has been suspended by the happening of
such a contingency.
1.2 Computation of Time Periods.
For purposes of computation of periods of time hereunder, the word
"from" means "from and including" and the words "to" and "until" each mean "to
but excluding."
24
33
1.3 Accounting Terms; Certain Calculations
(a) Except as otherwise expressly provided herein, all accounting
terms used herein shall be interpreted, and all financial statements and
certificates and reports as to financial matters required to be delivered to the
Lenders hereunder shall be prepared, in accordance with GAAP applied on a
consistent basis. All calculations made for the purposes of determining
compliance with this Credit Agreement shall (except as otherwise expressly
provided herein) be made by application of GAAP applied on a basis consistent
with the most recent annual or quarterly financial statements delivered pursuant
to Section 7.1 hereof (or, prior to the delivery of the first financial
statements pursuant to Section 7.1 hereof, consistent with the annual audited
financial statements of Xxxxxxxx Holdings set forth beginning on page F-26 of
the Registration Statement, except to the extent that the Borrower intends to
capitalize the cost of tools, whereas Xxxxxxxx Holdings historically has
expensed such costs); provided, however, if (a) the Borrower shall object to
determining such compliance on such basis at the time of delivery of such
financial statements due to any change in GAAP or the rules promulgated with
respect thereto or (b) the Administrative Agent or the Required Lenders shall so
object in writing within 30 days after delivery of such financial statements,
then such calculations shall be made on a basis consistent with the most recent
financial statements delivered by the Borrower to the Lenders as to which no
such objection shall have been made.
(b) Notwithstanding anything to the contrary contained in
subsection (a) above, the parties hereto agree that the financial covenants set
forth in Section 7.9 shall be calculated as follows (including, without
limitation, calculation of the Consolidated Leverage Ratio for the purpose of
the definition of "Applicable Percentage" set forth in Section 1.1 and
calculation of all such financial covenants for the purposes of Sections 8.3 and
8.4):
(i) all such calculations shall be performed on a Pro
Forma Basis with respect to any Acquisition or Divestiture occurring
within such four quarter period (or, solely for the purposes of
Sections 8.3 and 8.4 hereof, contemplated to occur within the fiscal
quarter following such period);
(ii) solely for the purpose of calculations to be
performed on a Pro Forma Basis for the purposes of Section 8.4, any
adjustments to pro forma consolidated income statement items
attributable to an Acquisition shall be performed in accordance with
Rule 11.02 of Regulation S-X promulgated by the SEC or otherwise
consented to by the Administrative Agent and the Required Lenders; and
(iii) all such calculations with respect to periods ending
on or before June 30, 1999 shall be performed utilizing, to the extent
applicable, the unaudited pro forma as adjusted financial statements
for the fiscal quarters ended December 31, 1997, March 31, 1998, June
30, 1998 and September 30, 1998 delivered pursuant to Sections 6.1(iii)
and (iv) and 7.1(c).
25
34
SECTION 2
CREDIT FACILITIES
2.1 Revolving Loans.
(a) Revolving Commitment. During the Commitment Period, subject
to the terms and conditions hereof, each Lender severally agrees to make
revolving credit loans (the "Revolving Loans") to the Borrower from time to
time in the amount of such Lender's Revolving Commitment Percentage of such
Revolving Loans for the purposes hereinafter set forth; provided that (i) with
regard to the Lenders collectively, the aggregate principal amount of
Obligations outstanding at any time shall not exceed the lesser of (A) the
Aggregate Revolving Committed Amount or (B) the Borrowing Base, and (ii) with
regard to each Lender individually, such Lender's Revolving Commitment
Percentage of Obligations outstanding at any time shall not exceed the lesser
of (A) such Lender's Revolving Committed Amount or (B) such Lender's Revolving
Commitment Percentage of the Borrowing Base. Revolving Loans may consist of
Base Rate Loans or Eurodollar Loans, or a combination thereof, as the Borrower
may request, and may be repaid and reborrowed in accordance with the provisions
hereof.
(b) Revolving Loan Borrowings.
(i) Notice of Borrowing. The Borrower shall
request a Revolving Loan borrowing by written notice (or telephone
notice promptly confirmed in writing) to the Administrative Agent not
later than 11:00 A.M. (Charlotte, North Carolina time) on the date of
the requested borrowing in the case of Base Rate Loans, and on the
third Business Day prior to the date of the requested borrowing in the
case of Eurodollar Loans. Each such request for borrowing shall be
irrevocable and shall specify (A) that a Revolving Loan is requested,
(B) the date of the requested borrowing (which shall be a Business
Day), (C) the aggregate principal amount to be borrowed, and (D)
whether the borrowing shall be comprised of Base Rate Loans,
Eurodollar Loans or a combination thereof, and if Eurodollar Loans are
requested, the Interest Period(s) therefor. If the Borrower shall fail
to specify in any such Notice of Borrowing (I) an applicable Interest
Period in the case of a Eurodollar Loan, then such notice shall be
deemed to be a request for an Interest Period of one month, or (II)
the type of Revolving Loan requested, then such notice shall be deemed
to be a request for a Base Rate Loan hereunder. The Administrative
Agent shall give notice to each Lender promptly upon receipt of each
Notice of Borrowing pursuant to this Section 2.1(b)(i), the contents
thereof and each such Lender's share of any borrowing to be made
pursuant thereto.
(ii) Minimum Amounts. Each Revolving Loan shall
be, in the case of Eurodollar Loans, in a minimum aggregate principal
amount of $2,500,000 and integral multiples of $500,000 in excess
thereof, or, in the case of Base Rate Loans, in a minimum aggregate
principal amount of $1,000,000 (or the remaining Revolving Committed
Amount, if less) and integral multiples of $100,000 in excess thereof.
26
35
(iii) Advances. Each Lender will make its
Revolving Commitment Percentage of each Revolving Loan borrowing
available to the Administrative Agent for the account of the Borrower,
or in such other manner as the Administrative Agent may specify in
writing, by 1:00 P.M. (Charlotte, North Carolina time) on the date
specified in the applicable Notice of Borrowing in Dollars and in
funds immediately available to the Administrative Agent. Such
borrowing will then be made available to the Borrower by the
Administrative Agent by crediting the account of the Borrower with the
aggregate of the amounts made available to the Administrative Agent by
the Lenders and in like funds as received by the Administrative Agent.
(c) Repayment. The principal amount of all Revolving Loans shall
be due and payable in full on the Termination Date.
(d) Interest. Subject to the provisions of Section 3.1,
(i) Base Rate Loans. During such periods as
Revolving Loans shall be comprised in whole or in part of Base Rate
Loans, such Base Rate Loans shall bear interest at a per annum rate
equal to the Base Rate plus the Applicable Percentage;
(ii) Eurodollar Loans. During such periods as
Revolving Loans shall be comprised in whole or in part of Eurodollar
Loans, such Eurodollar Loans shall bear interest at a per annum rate
equal to the Eurodollar Rate plus the Applicable Percentage.
Interest on Revolving Loans shall be payable in arrears on each applicable
Interest Payment Date (or at such other times as may be specified herein).
(e) Revolving Notes. The Revolving Loans shall be evidenced by a
duly executed Revolving Note in favor of each Lender.
(f) Maximum Number of Eurodollar Loans. The Borrower will be
limited to a maximum number of five (5) Eurodollar Loans outstanding at any
time. For purposes hereof, Eurodollar Loans with separate or different Interest
Periods will be considered as separate Eurodollar Loans even if their Interest
Periods expire on the same date.
(g) Extension of Termination Date
(i) First Extension Option. Not more than 15 months and
not less than 60 days prior to the Termination Date, the Borrower may, by
notice to the Administrative Agent, make written request of the Lenders to
extend the Termination Date for an additional one year period. The
Administrative Agent will give prompt notice to each of the Lenders of its
receipt of any such request for extension of the Termination Date. Each Lender
shall notify the Administrative Agent in writing not later than 30 days after
receipt of such notice as to whether or not it will agree to extend the
Termination Date as requested. Each decision by a Lender shall be in its sole
discretion; provided,
27
36
however, that failure by any Lender to make a timely response to the Borrower's
request for extension of the Termination Date shall be deemed to constitute a
refusal by such Lender to extension of the Termination Date. If Lenders holding
more than 50% of the aggregate Commitments (as such Commitments may be
increased pursuant to Section 2.1(k) below) timely agree in writing to extend
the Termination Date for an additional one year period, then the Termination
Date shall be extended for an additional one year period.
(ii) Second Extension Option. If the Termination Date has
been extended pursuant to the terms and conditions of the preceding paragraph,
not more than 15 months and not less than 60 days prior to such extended
Termination Date, the Borrower may, by notice to the Administrative Agent, make
written request of the Lenders to extend such Termination Date for an
additional one year period. The Administrative Agent will give prompt notice to
each of the Lenders of its receipt of any such request for extension of such
Termination Date. Each Lender shall make notify the Administrative Agent in
writing not later than 30 days after receipt of such notice as to whether or
not it will agree to extend such Termination Date as requested. Each decision
by a Lender shall be in its sole discretion; provided, however, that failure by
any Lender to make a timely response to the Borrower's request for extension of
such Termination Date shall be deemed to constitute a refusal by such Lender to
extension of such Termination Date. If Lenders holding more than 50% of the
aggregate Commitments (as such Commitments may be increased pursuant to Section
2.1(k) below) timely agree in writing to extend such Termination Date for an
additional one year period, then such Termination Date shall be extended for an
additional one year period.
(h) Lender Not Consenting. If any Lender does not timely agree in
writing to extend the Termination Date, the Termination Date, as it relates to
such Lender, shall not be extended, the Commitment of such Lender shall
terminate on the Termination Date applicable to it and any Revolving Loans made
by such Lender and all accrued and unpaid interest thereon shall be due and
payable on the Termination Date applicable to it. Upon the termination of the
Commitment of any such Lender, unless this Agreement is amended as provided in
Subsections 2.1(k), the aggregate amount of the Commitments shall be reduced by
the amount of such terminated Commitment, and the Revolving Commitment
Percentage of each other Lender shall be adjusted to that percentage obtained
by dividing the Commitment of such Lender by the aggregate amount of the
Commitments after giving effect to such reduction as provided in the definition
of "Revolving Commitment Percentage".
(i) Other Lenders. No refusal by any Lender or Lenders to consent
to any extension of the Termination Date shall affect the extension of the
Termination Date as it may relate to the Commitment and Revolving Loans of any
Lender which consents to such extension pursuant to Section 2.1(g), and one or
more Lenders may consent to the extension of the Termination Date as it relates
to them notwithstanding any refusal by any other Lenders so to consent;
provided that even as to the consenting Lenders the Termination Date will be
extended only upon consent to such an extension by Lenders holding more than
50% of the aggregate Commitments (as such Commitments may be increased pursuant
to Section 2.1(k) below).
28
37
(j) Termination of Commitment. If any Lender does not timely
consent to the extension of the Termination Date pursuant to Section 2.1(g) and
no Revolving Loans are then outstanding, the Borrower may upon at least three
(3) Business Days' prior notice to such Lender and to the Administrative Agent
terminate the Commitment of such Lender. Upon any such termination the
Revolving Commitment Percentage of each other Lender shall be adjusted, if
necessary, to that percentage obtained by dividing the Commitment of such
Lender by the aggregate amount of the Commitments after giving effect to such
termination and any increases in the aggregate amount of the Commitments under
the provisions of Section 2.1(k).
(k) Increase in Commitment of Other Lender or Lenders. If any
Lender does not timely consent to the extension of the Termination Date
pursuant to Section 2.1(g), upon the expiration of the Commitment of such
Lender, or upon its termination as provided in Section 2.1(j), the Borrower may
offer each Lender which has timely consented to the extension of the
Termination Date pursuant to Subsection 2.1(g) a reasonable opportunity to
increase its Commitment by an amount equal to its pro-rata share (based on its
Commitment before such increase) of the Commitment of the Lender which does not
timely consent to the extension of the Termination Date pursuant to Section
2.1(g). After giving such Lenders such an opportunity, the Borrower and the
Administrative Agent, acting on behalf of the Lenders, shall amend this
Agreement to increase the Commitment of any Lender or Lenders that consent to
an increase in their respective Commitments hereunder, and such amendment shall
be binding on all of the Lenders, provided that such increase does not increase
the aggregate amount of the Commitments to an amount greater than the aggregate
amount of Commitments in effect immediately before such expiration or
termination.
(l) Notice. The Administrative Agent shall promptly advise each
Lender of any change in Revolving Commitment Percentages made pursuant to
Section 2.1(j) and shall promptly provide each of the Lenders with a copy of
any amendment made pursuant to Section 2.1(k).
2.2 Letter of Credit Subfacility.
(a) Issuance. During the Commitment Period, subject to the terms
and conditions hereof and of the LOC Documents, if any, and such other terms
and conditions which the Issuing Lender may reasonably require, the Issuing
Lender shall issue, and the Lenders shall participate in, such Letters of
Credit as the Borrower may request for its own account or for the account of
another Credit Party as provided herein, in a form acceptable to the Issuing
Lender, for the purposes hereinafter set forth; provided that (i) the aggregate
amount of LOC Obligations shall not exceed TWENTY MILLION DOLLARS ($20,000,000)
at any time (the "LOC Committed Amount"), (ii) with regard to the Lenders
collectively, the aggregate principal amount of Obligations outstanding at any
time shall not exceed the lesser of (A) the Aggregate Revolving Committed
Amount or (B) the Borrowing Base, and (iii) with regard to each Lender
individually, such Lender's Revolving Commitment Percentage of Obligations
outstanding at any time shall not exceed the lesser of (A) such Lender's
Revolving Committed Amount or (B) such Lender's Revolving Commitment Percentage
of the Borrowing Base. Letters of Credit issued hereunder
29
38
shall not have an original expiry date more than one year from the date of
issuance or extension. If any Letter of Credit issued hereunder shall have an
expiry date, whether as originally issued or by extension, extending beyond the
Termination Date, the Borrower shall, on the Termination Date, either (i) cause
such Letter of Credit to be surrendered to the Issuing Lender, (ii) provide to
the Issuing Lender a back-to-back letter of credit in respect thereof
reasonably satisfactory to the Issuing Lender or (iii) provide cash collateral
to the Issuing Lender in an amount equal to the maximum amount available to be
drawn under such Letter of Credit. Each Letter of Credit shall comply with the
related LOC Documents. The issuance date of each Letter of Credit shall be a
Business Day.
(b) Notice and Reports. Except for those Letters of Credit
described on Schedule 2.2(b)-1 which shall be issued on the Closing Date, the
request for the issuance of a Letter of Credit shall be submitted by the
Borrower to the Issuing Lender at least three (3) Business Days prior to the
requested date of issuance (or such shorter period as may be agreed by the
Issuing Lender). A form of Notice of Request for Letter of Credit is attached
as Schedule 2.2(b)-2. The Issuing Lender will provide to the Administrative
Agent at least monthly, and more frequently upon request, a detailed summary
report on its Letters of Credit and the activity thereon, in form and substance
acceptable to the Administrative Agent. In addition, the Issuing Lender will
provide to the Administrative Agent for dissemination to the Lenders at least
quarterly, and more frequently upon request, a detailed summary report on its
Letters of Credit and the activity thereon, including, among other things, the
Credit Party for whose account the Letter of Credit is issued, the beneficiary,
the face amount, and the expiry date. The Issuing Lender will provide copies of
the Letters of Credit to the Administrative Agent and the Lenders promptly upon
request.
(c) Participation. Each Lender, upon issuance of a Letter of
Credit, shall be deemed to have purchased without recourse a risk participation
from the applicable Issuing Lender in such Letter of Credit and the obligations
arising thereunder, in each case in an amount equal to its pro rata share of
the obligations under such Letter of Credit (based on the respective Commitment
Percentages of the Lenders) and shall absolutely, unconditionally and
irrevocably assume, as primary obligor and not as surety, and be obligated to
pay to the Issuing Lender therefor and discharge when due, its pro rata share
of the obligations arising under such Letter of Credit. Without limiting the
scope and nature of each Lender's participation in any Letter of Credit, to the
extent that the Issuing Lender has not been reimbursed as required hereunder or
under any such Letter of Credit, each such Lender shall pay to the Issuing
Lender its pro rata share of such unreimbursed drawing in same day funds on the
day of notification by the Issuing Lender of an unreimbursed drawing pursuant
to the provisions of subsection (d) hereof. The obligation of each Lender to so
reimburse the Issuing Lender shall be absolute and unconditional and shall not
be affected by the occurrence of a Default, an Event of Default or any other
occurrence or event. Any such reimbursement shall not relieve or otherwise
impair the obligation of the Borrower to reimburse the Issuing Lender under any
Letter of Credit, together with interest as hereinafter provided.
(d) Reimbursement. In the event of any drawing under any Letter
of Credit, the Issuing Lender will promptly notify the Borrower. Unless the
Borrower shall immediately notify the Issuing
30
39
Lender that the Borrower intends to otherwise reimburse the Issuing Lender for
such drawing, the Borrower shall be deemed to have requested that the Lenders
make a Revolving Loan in the amount of the drawing as provided in subsection
(e) hereof on the related Letter of Credit, the proceeds of which will be used
to satisfy the related reimbursement obligations. The Borrower promises to
reimburse the Issuing Lender on the day of drawing under any Letter of Credit
(either with the proceeds of a Revolving Loan obtained hereunder or otherwise)
in same day funds. If the Borrower notifies the Issuing Lender that it intends
to reimburse the Issuing Lender other than through a Revolving Loan and
thereafter, shall fail to reimburse the Issuing Lender as provided hereinabove,
the unreimbursed amount of such drawing shall bear interest at a per annum rate
equal to the Base Rate plus the sum of (i) the Applicable Percentage and (ii)
two percent (2%). The Borrower's reimbursement obligations hereunder shall be
absolute and unconditional under all circumstances irrespective of any rights
of setoff, counterclaim or defense to payment the Borrower may claim or have
against the Issuing Lender, the Administrative Agent, the Lenders, the
beneficiary of the Letter of Credit drawn upon or any other Person, including
without limitation any defense based on any failure of the Borrower or any
other Credit Party to receive consideration or the legality, validity,
regularity or unenforceability of the Letter of Credit. The Issuing Lender will
promptly notify the other Lenders of the amount of any unreimbursed drawing and
each Lender shall promptly pay to the Administrative Agent for the account of
the Issuing Lender in Dollars and in immediately available funds, the amount of
such Lender's pro rata share of such unreimbursed drawing. Such payment shall
be made on the day such notice is received by such Lender from the Issuing
Lender if such notice is received at or before 2:00 P.M. (Charlotte, North
Carolina time) otherwise such payment shall be made at or before 12:00 Noon
(Charlotte, North Carolina time) on the Business Day next succeeding the day
such notice is received. If such Lender does not pay such amount to the Issuing
Lender in full upon such request, such Lender shall, on demand, pay to the
Administrative Agent for the account of the Issuing Lender interest on the
unpaid amount during the period from the date of such drawing until such Lender
pays such amount to the Issuing Lender in full at a rate per annum equal to, if
paid within two (2) Business Days of the date that such Lender is required to
make payments of such amount pursuant to the preceding sentence, the Federal
Funds Rate and thereafter at a rate equal to the Base Rate. Each Lender's
obligation to make such payment to the Issuing Lender, and the right of the
Issuing Lender to receive the same, shall be absolute and unconditional, shall
not be affected by any circumstance whatsoever and without regard to the
termination of this Credit Agreement or the Commitments hereunder, the
existence of a Default or Event of Default or the acceleration of the
obligations of the Borrower hereunder and shall be made without any offset,
abatement, withholding or reduction whatsoever. Simultaneously with the making
of each such payment by a Lender to the Issuing Lender, such Lender shall,
automatically and without any further action on the part of the Issuing Lender
or such Lender, acquire a participation in an amount equal to such payment
(excluding the portion of such payment constituting interest owing to the
Issuing Lender) in the related unreimbursed drawing portion of the LOC
Obligation and in the interest thereon and in the related LOC Documents, and
shall have a claim against the Borrower with respect thereto.
(e) Repayment with Revolving Loans. On any day on which the
Borrower shall have requested, or been deemed to have requested, a Revolving
Loan advance to reimburse a drawing under a Letter of Credit, the
Administrative Agent shall give notice to the Lenders that a Revolving
31
40
Loan has been requested or deemed requested by the Borrower to be made in
connection with a drawing under a Letter of Credit, in which case a Revolving
Loan advance comprised of Base Rate Loans (or Eurodollar Loans to the extent
the Borrower has complied with the procedures of Section 2.1(b)(i) with respect
thereto) shall be immediately made to the Borrower by all Lenders
(notwithstanding any termination of the Commitments pursuant to Section 9.2)
pro rata based on the respective Commitment Percentages of the Lenders
(determined before giving effect to any termination of the Commitments pursuant
to Section 9.2) and the proceeds thereof shall be paid directly to the Issuing
Lender for application to the respective LOC Obligations. Each such Lender
hereby irrevocably agrees to make its pro rata share of each such Revolving
Loan immediately upon any such request or deemed request in the amount, in the
manner and on the date specified in the preceding sentence notwithstanding (i)
the amount of such borrowing may not comply with the minimum amount for
advances of Revolving Loans otherwise required hereunder, (ii) whether any
conditions specified in Section 5.2 are then satisfied, (iii) whether a Default
or an Event of Default then exists, (iv) failure for any such request or deemed
request for Revolving Loan to be made by the time otherwise required hereunder,
(v) whether the date of such borrowing is a date on which Revolving Loans are
otherwise permitted to be made hereunder or (vi) any termination of the
Commitments relating thereto immediately prior to or contemporaneously with
such borrowing. In the event that any Revolving Loan cannot for any reason be
made on the date otherwise required above (including, without limitation, as a
result of the commencement of a proceeding under the Bankruptcy Code with
respect to the Borrower or any Credit Party), then each such Lender hereby
agrees that it shall forthwith purchase (as of the date such borrowing would
otherwise have occurred, but adjusted for any payments received from the
Borrower on or after such date and prior to such purchase) from the Issuing
Lender such participation in the outstanding LOC Obligations as shall be
necessary to cause each such Lender to share in such LOC Obligations ratably
(based upon the respective Commitment Percentages of the Lenders (determined
before giving effect to any termination of the Commitments pursuant to Section
9.2)), provided that in the event such payment is not made on the day of
drawing, such Lender shall pay in addition to the Issuing Lender interest on
the amount of its unfunded Participation Interest at a rate equal to, if paid
within two (2) Business Days of the date of drawing, the Federal Funds Rate,
and thereafter at the Base Rate.
(f) Designation of other Credit Parties as Account Parties.
Notwithstanding anything to the contrary set forth in this Credit Agreement,
including without limitation Section 2.2(a) hereof, a Letter of Credit issued
hereunder may contain a statement to the effect that such Letter of Credit is
issued for the account of a member of the Consolidated Group other than the
Borrower, provided that notwithstanding such statement, the Borrower shall be
deemed to be the account party for all purposes of this Credit Agreement for
such Letter of Credit and such statement shall not affect the Borrower's
reimbursement obligations hereunder with respect to such Letter of Credit.
(g) Renewal, Extension. The renewal or extension of any Letter of
Credit shall, for purposes hereof, be treated in all respects the same as the
issuance of a new Letter of Credit hereunder.
32
41
(h) Uniform Customs and Practices. The Issuing Lender may have
the Letters of Credit be subject to The Uniform Customs and Practice for
Documentary Credits, as published as of the date of issue by the International
Chamber of Commerce (the "UCP"), in which case the UCP may be incorporated
therein and deemed in all respects to be a part thereof.
(i) Indemnification; Nature of Issuing Lender's Duties.
(i) In addition to its other obligations under
this Section 2.2, the Borrower hereby agrees to protect, indemnify,
pay and save the Issuing Lender harmless from and against any and all
claims, demands, liabilities, damages, losses, costs, charges and
expenses (including reasonable attorneys' fees) that the Issuing
Lender may incur or be subject to as a consequence, direct or
indirect, of (A) the issuance of any Letter of Credit or (B) the
failure of the Issuing Lender to honor a drawing under a Letter of
Credit as a result of any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto government or
Governmental Authority (all such acts or omissions, herein called
"Government Acts").
(ii) As between the Borrower and the Issuing
Lender, the Borrower shall assume all risks of the acts, omissions or
misuse of any Letter of Credit by the beneficiary thereof. The Issuing
Lender shall not be responsible: (A) for the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and
issuance of any Letter of Credit, even if it should in fact prove to
be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (B) for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or
assign any Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, that may prove to be invalid or
ineffective for any reason; (C) for errors, omissions, interruptions
or delays in transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise, whether or not they be in cipher; (D)
for any loss or delay in the transmission or otherwise of any document
required in order to make a drawing under a Letter of Credit or of the
proceeds thereof; and (E) for any consequences arising from causes
beyond the control of the Issuing Lender, including, without
limitation, any Government Acts. None of the above shall affect,
impair, or prevent the vesting of the Issuing Lender's rights or
powers hereunder.
(iii) In furtherance and extension and not in
limitation of the specific provisions hereinabove set forth, any
action taken or omitted by the Issuing Lender, under or in connection
with any Letter of Credit or the related certificates, if taken or
omitted in good faith, shall not put such Issuing Lender under any
resulting liability to the Borrower or any other Credit Party. It is
the intention of the parties that this Credit Agreement shall be
construed and applied to protect and indemnify the Issuing Lender
against any and all risks involved in the issuance of the Letters of
Credit, all of which risks are hereby assumed by the Borrower (on
behalf of itself and each of the other Credit Parties), including,
without limitation, any and all Government Acts. The Issuing Lender
shall not, in any way, be liable
33
42
for any failure by the Issuing Lender or anyone else to pay any
drawing under any Letter of Credit as a result of any Government Acts
or any other cause beyond the control of the Issuing Lender.
(iv) Nothing in this subsection (i) is intended
to limit the reimbursement obligations of the Borrower contained in
subsection (d) above. The obligations of the Borrower under this
subsection (i) shall survive the termination of this Credit Agreement.
No act or omissions of any current or prior beneficiary of a Letter of
Credit shall in any way affect or impair the rights of the Issuing
Lender to enforce any right, power or benefit under this Credit
Agreement.
(v) Notwithstanding anything to the contrary
contained in this subsection (i), the Borrower shall have no
obligation to indemnify the Issuing Lender in respect of any liability
incurred by the Issuing Lender (A) arising out of the gross negligence
or willful misconduct of the Issuing Lender, as determined by a court
of competent jurisdiction, or (B) caused by the Issuing Lender's
failure to pay under any Letter of Credit after presentation to it of
a request strictly complying with the terms and conditions of such
Letter of Credit, as determined by a court of competent jurisdiction,
unless such payment is prohibited by any law, regulation, court order
or decree.
(j) Responsibility of Issuing Lender. It is expressly understood
and agreed that the obligations of the Issuing Lender hereunder to the Lenders
are only those expressly set forth in this Credit Agreement and that the
Issuing Lender shall be entitled to assume that the conditions precedent set
forth in Section 5.2 have been satisfied unless it shall have acquired actual
knowledge that any such condition precedent has not been satisfied; provided,
however, that nothing set forth in this Section 2.2 shall be deemed to
prejudice the right of any Lender to recover from the Issuing Lender any
amounts made available by such Lender to the Issuing Lender pursuant to this
Section 2.2 in the event that it is determined by a court of competent
jurisdiction that the payment with respect to a Letter of Credit constituted
gross negligence or willful misconduct on the part of the Issuing Lender.
(k) Conflict with LOC Documents. In the event of any conflict
between this Credit Agreement and any LOC Document (including any letter of
credit application), this Credit Agreement shall control.
SECTION 3
OTHER PROVISIONS RELATING TO CREDIT FACILITIES
3.1 Default Rate.
Upon the occurrence, and during the continuance, of an Event
of Default, the principal of and, to the extent permitted by law, interest on
the Revolving Loans and any other amounts owing hereunder or under the other
Credit Documents shall bear interest, payable on demand, at a per
34
43
annum rate 2% greater than the rate which would otherwise be applicable (or if
no rate is applicable, whether in respect of interest, fees or other amounts,
then 2% greater than the Base Rate).
3.2 Extension and Conversion.
Subject to the terms of Section 5.2, the Borrower shall have
the option, on any Business Day, to extend existing Eurodollar Loans into a
subsequent permissible Interest Period or to convert Base Rate Loans into
Eurodollar Loans; provided, however, that (i) except as provided in Section
3.8, Eurodollar Loans may be converted into Base Rate Loans only on the last
day of the Interest Period applicable thereto, (ii) Eurodollar Loans may be
extended, and Base Rate Loans may be converted into Eurodollar Loans, only if
no Default or Event of Default is in existence on the date of extension or
conversion, (iii) Revolving Loans extended as, or converted into, Eurodollar
Loans shall be subject to the terms of the definition of "Interest Period" set
forth in Section 1.1 and shall be in such minimum amounts as provided in
Section 2.1(b)(ii) , and (iv) any request for extension or conversion of a
Eurodollar Loan which shall fail to specify an Interest Period shall be deemed
to be a request for an Interest Period of one month. Each such extension or
conversion shall be effected by the Borrower by giving a Notice of
Extension/Conversion (or telephone notice promptly confirmed in writing) to the
Administrative Agent prior to 11:00 A.M. (Charlotte, North Carolina time) on
the Business Day of, in the case of the conversion of a Eurodollar Loan into a
Base Rate Loan, and on the third Business Day prior to, in the case of the
extension of a Eurodollar Loan as, or conversion of a Base Rate Loan into, a
Eurodollar Loan, the date of the proposed extension or conversion, specifying
the date of the proposed extension or conversion, the Revolving Loans to be so
extended or converted, the types of Revolving Loans into which such Revolving
Loans are to be converted and, if appropriate, the applicable Interest Periods
with respect thereto. Each request for extension of a Eurodollar Loan or
conversion of a Base Rate Loan into a Eurodollar Loan shall be irrevocable and
shall constitute a representation and warranty by the Borrower of the matters
specified in subsections (a) and (b) of Section 5.2. In the event the Borrower
fails to request extension or conversion of any Eurodollar Loan in accordance
with this Section, or any such conversion or extension is not permitted or
required by this Section, then such Eurodollar Loan shall be automatically
converted into a Base Rate Loan at the end of the Interest Period applicable
thereto. The Administrative Agent shall give each Lender notice as promptly as
practicable of any such proposed extension or conversion affecting any
Revolving Loan.
3.3 Prepayments.
(a) Voluntary Prepayments. Revolving Loans may be repaid in whole
or in part without premium or penalty; provided that (i) Eurodollar Loans may
be prepaid only upon three (3) Business Days' prior written notice to the
Administrative Agent and must be accompanied by payment of any amounts owing
under Section 3.11, and (ii) partial prepayments shall be, in the case of
Eurodollar Loans, in a minimum aggregate principal amount of $2,500,000 and
integral multiples of $500,000 in excess thereof, or, in the case of Base Rate
Loans, in a minimum aggregate principal amount of $1,000,000 (or the remaining
Revolving Committed Amount, if less) and integral multiples of $100,000 in
excess thereof.
35
44
(b) Mandatory Prepayments. If at any time, (A) the
aggregate principal amount of Obligations shall exceed the lesser of (i) the
Aggregate Revolving Committed Amount or (ii) the Borrowing Base, or (B) the
aggregate amount of LOC Obligations shall exceed the LOC Committed Amount, the
Borrower shall immediately make payment on the Revolving Loans and/or to a cash
collateral account in respect of the LOC Obligations, in an amount sufficient
to eliminate the deficiency.
(c) Application. Unless otherwise specified by the
Borrower, prepayments made hereunder shall be applied first to Revolving Loans
which are Base Rate Loans, then to Revolving Loans which are Eurodollar Loans
in direct order of Interest Period maturities, and then to a cash collateral
account to secure LOC Obligations. Amounts prepaid hereunder may be reborrowed
in accordance with the provisions hereof.
3.4 Termination and Reduction of Commitments
(a) Voluntary Reductions. The Revolving Commitments may
be terminated or permanently reduced in whole or in part upon three (3)
Business Days' prior written notice to the Administrative Agent, provided that
(i) after giving effect to any voluntary reduction the aggregate amount of
Obligations shall not exceed the lesser of (A) the Aggregate Revolving
Committed Amount, as reduced, or (B) the Borrowing Base, and (ii) partial
reductions shall be in a minimum principal amount of $5,000,000, and in
integral multiples of $1,000,000 in excess thereof.
(b) Termination. The Commitments hereunder shall
terminate on the Termination Date.
3.5 Fees.
(a) Commitment Fee. In consideration of the Revolving
Commitments hereunder, the Borrower agrees to pay to the Administrative Agent
for the ratable benefit of the Lenders a commitment fee (the "Commitment Fee")
equal to the Applicable Percentage per annum on the average daily unused amount
of the Revolving Committed Amount for the applicable period. The Commitment Fee
shall be payable quarterly in arrears on the 15th day following the last day of
each calendar quarter for the immediately preceding quarter (or portion
thereof) beginning with the first such date to occur after the Closing Date.
For purposes of computation of the Commitment Fee, LOC Obligations shall be
counted toward or considered usage under the Revolving Loan facility.
36
45
(b) Letter of Credit Fees.
(i) Letter of Credit Fee. In consideration of
the LOC Commitment hereunder, the Borrower agrees to pay to the
Administrative Agent for the ratable benefit of the Lenders a fee (the
"Letter of Credit Fee") equal to the Applicable Percentage per annum
on the average daily maximum amount available to be drawn under
Letters of Credit from the date of issuance to the date of expiration.
The Letter of Credit Fee shall be payable quarterly in arrears on the
15th day following the last day of each calendar quarter for the
immediately preceding quarter (or portion thereof) beginning with the
first such date to occur after the Closing Date.
(ii) Issuing Lender Fee. In addition to the
Letter of Credit Fee, the Borrower agrees to pay to the Issuing Lender
for its own account without sharing by the other Lenders a fronting
and negotiation fee of .125% per annum on the average daily maximum
amount available to be drawn under Letters of Credit issued by it from
the date of issuance to the date of expiration (collectively, the
"Issuing Lender Fees").
(c) Administrative Agent's Fees. The Borrower agrees to pay
to the Administrative Agent, for its own account, an annual administrative fee
and such other fees, if any, referred to in the Administrative Agent's Fee
Letter (collectively, the "Administrative Agent's Fees").
3.6 Capital Adequacy.
If any Lender has reasonably determined, after the date hereof,
that the adoption or the becoming effective of, or any change in, or any change
by any Governmental Authority, central bank or comparable agency charged with
the interpretation or administration thereof in the interpretation or
administration of, any applicable law, rule or regulation regarding capital
adequacy, or compliance by such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would have the effect of
reducing the rate of return on such Lender's capital or assets as a consequence
of its commitments or obligations hereunder to a level below that which such
Lender could have achieved but for such adoption, effectiveness, change or
compliance (taking into consideration such Lender's policies with respect to
capital adequacy), then, subject to the provisions of Section 3.12, the
Borrower shall be obligated to pay to such Lender such additional amount or
amounts as will compensate such Lender for such reduction.
3.7 Inability To Determine Interest Rate.
If prior to the first day of any Interest Period, the Administrative Agent
shall have determined (which determination shall be conclusive and binding upon
the Borrower) that, by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the Eurodollar Rate
for such Interest Period, the Administrative Agent shall give telecopy
37
46
or telephonic notice thereof to the Borrower and the Lenders as soon as
practicable thereafter (which notice shall be withdrawn the Administrative
Agent whenever such circumstances no longer exist). If such notice is given (a)
any Eurodollar Loans requested to be made on the first day of such Interest
Period shall be made as Base Rate Loans and (b) any Revolving 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.
Until such notice has been withdrawn by the Administrative Agent, no further
Eurodollar Loans shall be made or continued as such, nor shall the Borrower
have the right to convert Base Rate Loans to Eurodollar Loans.
3.8 Illegality.
Notwithstanding any other provision herein, if the adoption of or any
change in any Requirement of Law or in the interpretation or application
thereof occurring after the Closing Date shall make it unlawful for any Lender
to make or maintain Eurodollar Loans as contemplated by this Credit Agreement,
(a) such Lender shall promptly give written notice of such circumstances to the
Borrower and the Administrative Agent (which notice shall be withdrawn by such
Lender 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
Revolving Loans then outstanding as Eurodollar Loans, if any, shall be
converted automatically to Base Rate Loans on the respective last days of the
then current Interest Periods with respect to such Loans or within such earlier
period as required by law. If any such conversion of a Eurodollar Loan occurs
on a day which is not the last day of the then current Interest Period with
respect thereto, the Borrower shall pay to such Lender such amounts, if any, as
may be required pursuant to Section 3.11.
3.9 Requirements of Law.
If, after the date hereof, the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof applicable
to any Lender, or compliance by any Lender with any request or directive
(whether or not having the force of law) from any central bank or other
Governmental Authority, in each case made subsequent to the Closing Date (or,
if later, the date on which such Lender becomes a Lender):
(a) shall subject such Lender to any tax of any
kind whatsoever with respect to any Letter of Credit, any Eurodollar
Loans made by it or its obligation to make Eurodollar Loans, or change
the basis of taxation of payments to such Lender in respect thereof
(except for (i) Non-Excluded Taxes covered by Section 3.10 (including
Non-Excluded Taxes imposed solely by reason of any failure of such
Lender to comply with its obligations under Section 3.10(b)) and (ii)
changes in taxes measured by or imposed upon the overall net income,
or franchise tax (imposed in lieu of such net income tax), of such
Lender or its applicable lending office, branch, or any affiliate
thereof));
38
47
(b) shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement
against assets held by, deposits or other liabilities in or for the
account of, advances, loans or other extensions of credit by, or any
other acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the Eurodollar Rate
hereunder; or
(c) shall impose on such Lender any other
condition (excluding any tax of any kind whatsoever);
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting
into, continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, subject to the provisions of Section 3.12, the
Borrower shall be obligated to promptly pay such Lender, upon its demand, any
additional amounts necessary to compensate such Lender for such increased cost
or reduced amount receivable, provided that, in any such case, the Borrower may
elect to convert the Eurodollar Loans made by such Lender hereunder to Base
Rate Loans by giving the Administrative Agent at least one Business Day's
notice of such election, in which case the Borrower shall promptly pay to such
Lender, upon demand, without duplication, such amounts, if any, as may be
required pursuant to Section 3.11. Each Lender agrees that, as promptly as
practicable after it becomes aware of any circumstances of the type referred to
in paragraphs (a) through (c) above which would result in any such increased
cost or reduced amount receivable, the affected Lender shall, to the extent not
inconsistent with such Lender's internal policies of general application,
designate a different lending office for the making of Revolving Loans
hereunder or otherwise use reasonable commercial efforts to minimize the
amounts payable to it by the Borrower pursuant to this Section 3.9. This
covenant shall survive the termination of this Credit Agreement and the payment
of the Revolving Loans and all other amounts payable hereunder.
3.10 Taxes.
(a) Except as provided below in this subsection, all payments
made by the Borrower under this Credit Agreement and any Notes shall be made
free and clear of, and without deduction or withholding for or on account of,
any present or future income, stamp or other taxes, levies, imposts, duties,
charges, fees, deductions or withholdings, now or hereafter imposed, levied,
collected, withheld or assessed by any court, or governmental body, agency or
other official, excluding taxes measured by or imposed upon the overall net
income of any Lender or its applicable lending office, or any branch or
affiliate thereof, and all franchise taxes, branch taxes, taxes on doing
business or taxes on the overall capital or net worth of any Lender or its
applicable lending office, or any branch or affiliate thereof, in each case
imposed in lieu of net income taxes, imposed: (i) by the jurisdiction under the
laws of which such Lender, applicable lending office, branch or affiliate is
organized or is located, or in which its principal executive office is located,
or any nation within which such jurisdiction is located or any political
subdivision thereof; or (ii) by reason of any connection between
39
48
the jurisdiction imposing such tax and such Lender, applicable lending office,
branch or affiliate other than a connection arising solely from such Lender
having executed, delivered or performed its obligations, or received payment
under or enforced, this Credit Agreement or any Notes. If any such non-excluded
taxes, levies, imposts, duties, charges, fees, deductions or withholdings
("Non- Excluded Taxes") are required to be withheld from any amounts payable to
the Administrative Agent or any Lender hereunder or under any Notes, (A) the
amounts so payable to the Administrative Agent or such Lender shall be
increased to the extent necessary to yield to the Administrative Agent or such
Lender (after payment of all Non-Excluded Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in this
Credit Agreement and any Notes, provided, however, that the Borrower shall be
entitled to deduct and withhold any Non-Excluded Taxes and shall not be
required to increase any such amounts payable to any Lender that is not
organized under the laws of the United States of America or a state thereof if
such Lender fails to comply with the requirements of paragraph (b) of this
subsection whenever any Non-Excluded Taxes are payable by the Borrower, and (B)
as promptly as possible thereafter the Borrower shall send to the
Administrative Agent for its own account or for the account of such Lender, as
the case may be, a certified copy of an original official receipt received by
the Borrower showing payment thereof. If the Borrower fails to pay any
Non-Excluded Taxes when due to the appropriate taxing authority or fails to
remit to the Administrative Agent the required receipts or other required
documentary evidence, the Borrower shall indemnify the Administrative Agent and
the Lenders for any incremental taxes, interest or penalties that may become
payable by the Administrative Agent or any Lender as a result of any such
failure. The agreements in this subsection shall survive the termination of
this Credit Agreement and the payment of the Revolving Loans and all other
amounts payable hereunder.
(b) Each Lender that is not incorporated under the laws of the
United States of America or a state thereof shall:
(X)(i) on or before the date of any payment by the
Borrower under this Credit Agreement or Notes to such Lender, deliver
to the Borrower and the Administrative Agent (A) two (2) duly
completed copies of United States Internal Revenue Service Form 1001
or 4224, or successor applicable form, as the case may be, certifying
that it is entitled to receive payments under this Credit Agreement
and any Notes without deduction or withholding of any United States
federal income taxes and (B) an Internal Revenue Service Form W-8 or
W- 9, or successor applicable form, as the case may be, certifying
that it is entitled to an exemption from United States backup
withholding tax;
(ii) deliver to the Borrower and the
Administrative Agent two (2) further copies of any such form or
certification on or before the date that any such form or
certification expires or becomes obsolete and after the occurrence of
any event requiring a change in the most recent form previously
delivered by it to the Borrower; and
(iii) obtain such extensions of time for filing
and complete such forms or certifications as may reasonably be
requested by the Borrower or the Administrative Agent; or
40
49
(Y) in the case of any such Lender that is not
a "bank" within the meaning of Section 881(c)(3)(A) of the Internal
Revenue Code, (i) represent to the Borrower (for the benefit of the
Borrower and the Administrative Agent) that it is not a bank within
the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, (ii)
agree to furnish to the Borrower on or before the date of any payment
by the Borrower, with a copy to the Administrative Agent two (2)
accurate and complete original signed copies of Internal Revenue
Service Form W-8, or successor applicable form certifying to such
Lender's legal entitlement at the date of such certificate to an
exemption from U.S. withholding tax under the provisions of Section
881(c) of the Internal Revenue Code with respect to payments to be
made under this Credit Agreement and any Notes (and to deliver to the
Borrower and the Administrative Agent two (2) further copies of such
form on or before the date it expires or becomes obsolete and after
the occurrence of any event requiring a change in the most recently
provided form and, if necessary, obtain any extensions of time
reasonably requested by the Borrower or the Administrative Agent for
filing and completing such forms), and (iii) agree, to the extent
legally entitled to do so, upon reasonable request by the Borrower, to
provide to the Borrower (for the benefit of the Borrower and the
Administrative Agent) such other forms as may be reasonably required
in order to establish the legal entitlement of such Lender to an
exemption from withholding with respect to payments under this Credit
Agreement and any Notes;
unless in any such case any change in treaty, law or regulation has occurred
after the date such Person becomes a Lender hereunder which renders all such
forms inapplicable or which would prevent such Lender from duly completing and
delivering any such form with respect to it and such Lender so advises the
Borrower and the Administrative Agent. Each Person that shall become a Lender
or a participant of a Lender pursuant to subsection 11.3 shall, upon the
effectiveness of the related transfer, be required to provide all of the forms,
certifications and statements required pursuant to this subsection, provided
that in the case of a participant of a Lender the obligations of such
participant of a Lender pursuant to this subsection (b) shall be determined as
if the participant of a Lender were a Lender except that such participant of a
Lender shall furnish all such required forms, certifications and statements to
the Lender from which the related participation shall have been purchased.
3.11 Indemnity.
The Borrower promises to indemnify each Lender and to hold each Lender
harmless from any loss or expense which such Lender may sustain or incur (other
than through such Lender's gross negligence or willful misconduct) as a
consequence of (a) default by the Borrower in making a borrowing of, conversion
into or continuation of Eurodollar Loans after the Borrower has given a notice
requesting the same in accordance with the provisions of this Credit Agreement,
(b) default by the Borrower in making any prepayment of a Eurodollar Loan after
the Borrower has given a notice thereof in accordance with the provisions of
this Credit Agreement or (c) the making of a prepayment of Eurodollar Loans on
a day which is not the last day of an Interest Period with respect thereto.
With respect to Eurodollar Loans, such indemnification may be calculated, in
lieu of any other method, based on an amount equal to the excess, if any, of
(i) the amount of interest which would have accrued on the amount so prepaid,
or not so borrowed, converted or continued, for the period from the
41
50
date of such prepayment or of such failure to borrow, convert or continue to
the last day of the applicable Interest Period (or, in the case of a failure to
borrow, convert or continue, the Interest Period that would have commenced on
the date of such failure) in each case at the applicable rate of interest for
such Revolving Loans provided for herein (excluding, however, the Applicable
Percentage included therein, if any) over (ii) the amount of interest (as
reasonably determined by such Lender) which would have accrued to such Lender
on such amount by placing such amount on deposit for a comparable period with
leading banks in the interbank Eurodollar market. The covenants of the Borrower
set forth in this Section 3.11 shall survive the termination of this Credit
Agreement and the payment of the Revolving Loans and all other amounts payable
hereunder.
3.12 Certain Limitations.
The provisions of Sections 3.6, 3.9, 3.10 and 3.11 hereof shall be subject
to the following:
(a) Each Lender that desires compensation or indemnification
under Sections 3.6, 3.9 or 3.11 hereof shall notify the Borrower through the
Administrative Agent of any event occurring after the Closing Date entitling
such Lender to compensation or indemnification under any of such Sections as
promptly as practicable, but in any event within 90 days after the occurrence
of the event giving rise thereto; provided that (i) if any such Lender fails to
give such notice within 90 days after the occurrence of such an event, such
Lender shall only be entitled to compensation or indemnification in respect of
such event accruing under Sections 3.6, 3.9 or 3.11 hereof with respect to the
period from and after the date 90 days prior to the date that such Lender does
give notice.
(b) Any notice given by a Lender pursuant to subsection (a) above
shall certify (i) that one of the events described in Sections 3.6, 3.9 or 3.11
hereof has occurred, describing in reasonable detail the nature of such event,
(ii) as to the increased cost, reduced amount receivable or loss or expense
resulting from such event and (iii) as to the additional amount demanded by
such Lender, attaching a reasonably detailed explanation of the calculation
thereof. Such a certificate as to any compensation or indemnification payable
pursuant to Sections 3.6, 3.9 or 3.11, submitted by such Lender through the
Administrative Agent to the Borrower, shall be conclusive and binding on the
parties hereto in the absence of manifest error.
(c) If any Lender requests compensation or indemnification from
the Borrower under Sections 3.6, 3.9 or 3.10 hereof, the Borrower may, at its
option, within fifteen (15) days after receipt by the Borrower of written
demand from the affected Lender for payment of such compensation or
indemnification, notify the Administrative Agent and such affected Lender of
its intention to replace the affected Lender. So long as no Event of Default
shall have occurred and be continuing, the Borrower may obtain, at the
Borrower's expense, a replacement Lender for the affected Lender. If the
Borrower obtains a replacement Lender within ninety (90) days following notice
of its intention to do so, the affected Lender must sell and assign its Loans
and any Revolving Commitment to such replacement Lender pursuant to Section
11.3(b) hereof (without giving effect to any requirement therein that the
Administrative Agent consent thereto), for an amount equal to the principal
balance of all Revolving Loans held by the affected Lender
42
51
and all accrued interest and Fees with respect thereto through the date of such
sale, provided that the Borrower shall have paid to such affected Lender the
compensation or indemnification that it is entitled to receive under Sections
3.6, 3.9 or 3.10 hereof, through the date of such sale and assignment.
Notwithstanding the foregoing, the Borrower shall not have the right to obtain
a replacement Lender if the affected Lender rescinds its demand for such
compensation or indemnification within fifteen (15) days following its receipt
of the Borrower's notice of intention to replace such affected Lender.
Additionally, if the Borrower gives a notice to the Administrative Agent and an
affected Lender of its intention to replace such affected Lender and does not
so replace such affected Lender within ninety (90) days thereafter, the
Borrower's rights under this Section 3.12(c) shall terminate and the Borrower
shall promptly pay all compensation or indemnification demanded by such
affected Lender pursuant to Sections 3.6, 3.9 or 3.10 hereof.
3.13 Pro Rata Treatment.
Except to the extent otherwise provided herein:
(a) Revolving Loans. Each Revolving Loan, each payment or
prepayment of principal of any Revolving Loan or reimbursement obligations
arising from drawings under Letters of Credit, each payment of interest on the
Revolving Loans or reimbursement obligations arising from drawings under
Letters of Credit, each payment of Commitment Fees, each payment of the Letter
of Credit Fee, each reduction of the Revolving Committed Amount and each
conversion or extension of any Revolving Loan, shall be allocated pro rata
among the Lenders in accordance with the respective principal amounts of their
outstanding Revolving Loans and Participation Interests.
(b) Advances. No Lender shall be responsible for the failure or
delay by any other Lender in its obligation to make its ratable share of a
borrowing hereunder; provided, however, that the failure of any Lender to
fulfill its obligations hereunder shall not relieve any other Lender of its
obligations hereunder. Unless the Administrative Agent shall have been notified
in writing by any Lender prior to a borrowing that such Lender will not make
the amount that would constitute its ratable share of such borrowing available
to the Administrative Agent, the Administrative Agent may assume that such
Lender is making such amount available to the Administrative Agent, and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower a corresponding amount. If such amount is not made available to
the Administrative Agent by such Lender within the time period specified
therefor hereunder, such Lender shall pay to the Administrative Agent, on
demand, such amount with interest thereon at a rate equal to the Federal Funds
Rate for a period of two (2) Business Days, and thereafter at the Base Rate,
for the period until such Lender makes such amount immediately available to the
Administrative Agent. If such Lender does not pay such amounts to the
Administrative Agent forthwith upon demand, the Administrative Agent may notify
the Borrower and request the Borrower to immediately pay such amount to the
Administrative Agent with interest at the rate applicable thereto. A
certificate of the Administrative Agent submitted to any Lender with respect to
any amounts owing under this subsection shall be conclusive in the absence of
manifest error.
43
52
3.14 Sharing of Payments.
The Lenders agree among themselves that, in the event that any Lender
shall obtain payment in respect of any Revolving Loan, LOC Obligations or any
other obligation owing to such Lender under this Credit Agreement through the
exercise of a right of setoff, banker's lien or counterclaim, or pursuant to a
secured claim under Section 506 of the Bankruptcy Code or other security or
interest arising from, or in lieu of, such secured claim, received by such
Lender under any applicable bankruptcy, insolvency or other similar law or
otherwise, or by any other means, in excess of its pro rata share of such
payment as provided for in this Credit Agreement, such Lender shall promptly
purchase from the other Lenders a participation in such Revolving Loans, LOC
Obligations and other obligations in such amounts, and make such other
adjustments from time to time, as shall be equitable to the end that all
Lenders share such payment in accordance with their respective ratable shares
as provided for in this Credit Agreement. The Lenders further agree among
themselves that if payment to a Lender obtained by such Lender through the
exercise of a right of setoff, banker's lien, counterclaim or other event as
aforesaid shall be rescinded or must otherwise be restored, each Lender which
shall have shared the benefit of such payment shall, by repurchase of a
participation theretofore sold, return its share of that benefit (together with
its share of any accrued interest payable with respect thereto) to each Lender
whose payment shall have been rescinded or otherwise restored. The Borrower
agrees that any Lender so purchasing such a participation may, to the fullest
extent permitted by law, exercise all rights of payment, including setoff,
banker's lien or counterclaim, with respect to such participation as fully as
if such Lender were a holder of such Revolving Loan, LOC Obligations or other
obligation in the amount of such participation. Except as otherwise expressly
provided in this Credit Agreement, if any Lender or the Administrative Agent
shall fail to remit to the Administrative Agent or any other Lender an amount
payable by such Lender or the Administrative Agent to the Administrative Agent
or such other Lender pursuant to this Credit Agreement on the date when such
amount is due, such payments shall be made together with interest thereon for
each date from the date such amount is due until the date such amount is paid
to the Administrative Agent or such other Lender at a rate per annum equal to
the Federal Funds Rate. If under any applicable bankruptcy, insolvency or other
similar law, any Lender receives a secured claim in lieu of a setoff to which
this Section 3.14 applies, such Lender shall, to the extent practicable,
exercise its rights in respect of such secured claim in a manner consistent
with the rights of the Lenders under this Section 3.14 to share in the benefits
of any recovery on such secured claim.
3.15 Payments, Computations, Etc.
(a) Except as otherwise specifically provided herein, all
payments hereunder shall be made to the Administrative Agent in Dollars in
immediately available funds, without setoff, deduction, counterclaim or
withholding of any kind, at the Administrative Agent's office specified in
Section 11.1 not later than 2:00 P.M. (Charlotte, North Carolina time) on the
date when due. Payments received after such time shall be deemed to have been
received on the next succeeding Business Day. The Administrative Agent may (but
shall not be obligated to) debit the amount of any such payment which is not
made by such time to any ordinary deposit account of the Borrower maintained
with the Administrative Agent (with notice to the Borrower). The Borrower
shall, at the time it makes any
44
53
payment under this Credit Agreement, specify to the Administrative Agent the
Revolving Loans, LOC Obligations, Fees, interest or other amounts payable by
the Borrower hereunder to which such payment is to be applied (and in the event
that it fails so to specify, or if such application would be inconsistent with
the terms hereof, the Administrative Agent shall distribute such payment to the
Lenders in such manner as the Administrative Agent may determine to be
appropriate in respect of obligations owing by the Borrower hereunder, subject
to the terms of Section 3.13(a)). The Administrative Agent will distribute such
payments to such Lenders, if any such payment is received prior to 12:00 Noon
(Charlotte, North Carolina time) on a Business Day in like funds as received
prior to the end of such Business Day and otherwise the Administrative Agent
will distribute such payment to such Lenders entitled thereto on the next
succeeding Business Day. Whenever any payment hereunder shall be stated to be
due on a day which is not a Business Day, the due date thereof shall be
extended to the next succeeding Business Day (subject to accrual of interest
and Fees for the period of such extension), except that in the case of
Eurodollar Loans, if the extension would cause the payment to be made in the
next following calendar month, then such payment shall instead be made on the
next preceding Business Day. Except as expressly provided otherwise herein, all
computations of interest and fees shall be made on the basis of the actual
number of days elapsed over a year of 360 days, except with respect to
computation of interest on Base Rate Loans which (unless the Base Rate is
determined by reference to the Federal Funds Rate) shall be calculated based on
a year of 365 or 366 days, as appropriate. Interest shall accrue from and
include the date of borrowing, but exclude the date of payment.
(b) Allocation of Payments After Event of Default.
Notwithstanding any other provisions of this Credit Agreement to the contrary,
after the occurrence and during the continuance of an Event of Default, all
amounts collected or received by the Administrative Agent or any Lender on
account of the Obligations or any other amounts outstanding under any of the
Credit Documents shall be paid over or delivered as follows:
FIRST, to the payment of all reasonable
out-of-pocket costs and expenses (including without limitation
reasonable attorneys' fees) of the Administrative Agent in connection
with enforcing the rights of the Lenders under the Credit Documents;
SECOND, to payment of any Administrative Agent's
Fees then due and payable;
THIRD, to the payment of all reasonable
out-of-pocket costs and expenses (including without limitation,
reasonable attorneys' fees) of each of the Lenders in connection with
enforcing its rights under the Credit Documents or otherwise with
respect to the Obligations owing to such Lender;
FOURTH, to the payment of all accrued interest and
Fees on or in respect of the Obligations;
FIFTH, to the payment of the outstanding principal
amount of the Obligations (including the payment of all LOC
Obligations then reimbursable by the Borrower pursuant
45
54
to Section 2.2(d), but excluding any LOC Obligations attributable to
issued but undrawn Letters of Credit);
SIXTH, to the cash collateralization of all LOC
Obligations attributable to issued but undrawn Letters of Credit;
SEVENTH, to all other Obligations and other
obligations which shall have become due and payable under the Credit
Documents or otherwise and not repaid pursuant to clauses "FIRST"
through "SIXTH" above; and
EIGHTH, to the payment of the surplus, if any, to
whoever may be lawfully entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; and (ii) each of the Lenders shall receive an amount equal
to its pro rata share (based on the proportion that the then outstanding
Obligations held by such Lender bears to the aggregate then outstanding
Obligations) of amounts available to be applied pursuant to clauses "THIRD",
"FOURTH", "FIFTH" and "SIXTH" above; and (iii) all amounts available to be
applied to pursuant to clause "SIXTH" above shall be held by the Administrative
Agent in a cash collateral account and applied (A) first, to reimburse the
Issuing Lender for any drawings under such Letters of Credit and (B) then,
following the expiration of all Letters of Credit, to all other obligations of
the types described in clauses "SIXTH" AND "SEVENTH" above in the manner
provided in this Section 3.15(b).
3.16 Evidence of Debt.
(a) Each Lender shall maintain an account or accounts evidencing
each Revolving Loan made by such Lender to the Borrower from time to time,
including the amounts of principal and interest payable and paid to such Lender
from time to time under this Credit Agreement. Each Lender will make reasonable
efforts to maintain the accuracy of its account or accounts and to promptly
update its account or accounts from time to time, as necessary.
(b) The Administrative Agent shall maintain the Register pursuant
to Section 11.3(c) hereof, and a subaccount for each Lender, in which Register
and subaccounts (taken together) shall be recorded (i) the amount, type and
Interest Period of each such Revolving Loan hereunder, (ii) the amount of any
principal or interest due and payable or to become due and payable to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder from or for the account of the Borrower and each Lender's share
thereof. The Administrative Agent will make reasonable efforts to maintain the
accuracy of the subaccounts referred to in the preceding sentence and to
promptly update such subaccounts from time to time, as necessary.
(c) The entries made in the accounts, Register and subaccounts
maintained pursuant to subsection (b) of this Section 3.16 (and, if consistent
with the entries of the Administrative Agent,
46
55
subsection (a)) shall be prima facie evidence of the existence and amounts of
the obligations of the Borrower therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain any such account,
such Register or such subaccount, as applicable, or any error therein, shall
not in any manner affect the obligation of the Borrower to repay the Revolving
Loans made by such Lender in accordance with the terms hereof.
SECTION 4
GUARANTY
4.1 The Guarantee.
(a) Each of the Guarantors hereby jointly and severally
guarantees to each Lender, to each Affiliate of a Lender that enters into a
Hedging Agreement and to the Administrative Agent as hereinafter provided the
prompt payment of the Guaranteed Obligations in full when due (whether at
stated maturity, as a mandatory prepayment, by acceleration, a mandatory cash
collateralization or otherwise) strictly in accordance with the terms thereof.
The Guarantors hereby further agree that if any of the Guaranteed Obligations
are not paid in full when due (whether at stated maturity, as a mandatory
prepayment, by acceleration, as mandatory cash collateralization or otherwise),
the Guarantors will, jointly and severally, promptly pay the same, without any
demand or notice whatsoever, and that in the case of any extension of time of
payment or renewal of any of the Guaranteed Obligations, the same will be
promptly paid in full when due (whether at extended maturity, as a mandatory
prepayment, by acceleration or otherwise) in accordance with the terms of such
extension or renewal.
(b) Notwithstanding any provision to the contrary contained
herein or in any other of the Credit Documents or Hedging Agreements, to the
extent the obligations of a Guarantor shall be adjudicated to be invalid or
unenforceable for any reason (including, without limitation, because of any
applicable state or federal law relating to fraudulent conveyances or
transfers) then the obligations of each Guarantor hereunder shall be limited to
the maximum amount that is permissible under applicable law (whether federal or
state and including, without limitation, the Bankruptcy Code).
4.2 Obligations Unconditional.
The obligations of the Guarantors under Section 4.1 hereof are joint and
several, absolute and unconditional, irrespective of the value, genuineness,
validity, regularity or enforceability of any of the Credit Documents or
Hedging Agreements, or any other agreement or instrument referred to therein,
or any substitution, release or exchange of any other guarantee of or security
for any of the Guaranteed Obligations, and, to the fullest extent permitted by
applicable law, irrespective of any other circumstance whatsoever which might
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor, it being the intent of this Section 4.2 that the obligations of the
Guarantors hereunder shall be absolute and unconditional under any and all
circumstances. Each Guarantor agrees that such Guarantor shall have no right of
subrogation, indemnity, reimbursement or
47
56
contribution against the Borrower or any other Guarantor of the Guaranteed
Obligations for amounts paid under this Guaranty until such time as the Lenders
(and any Affiliates of Lenders entering into Hedging Agreements) have been paid
in full, all Commitments under the Credit Agreement have been terminated and no
Person or Governmental Authority shall have any right to request any return or
reimbursement of funds from the Lenders in connection with monies received
under the Credit Documents or Hedging Agreements. Without limiting the
generality of the foregoing, it is agreed that, to the fullest extent permitted
by law, the occurrence of any one or more of the following shall not alter or
impair the liability of any Guarantor hereunder which shall remain absolute and
unconditional as described above:
(i) at any time or from time to time, without notice to
any Guarantor, the time for any performance of or compliance with any
of the Guaranteed Obligations shall be extended, or such performance or
compliance shall be waived;
(ii) any of the acts mentioned in any of the provisions
of any of the Credit Documents, any Hedging Agreement or any other
agreement or instrument referred to in the Credit Documents or Hedging
Agreements shall be done or omitted;
(iii) the maturity of any of the Guaranteed Obligations
shall be accelerated, or any of the Guaranteed Obligations shall be
modified, supplemented or amended in any respect, or any right under
any of the Credit Documents, any Hedging Agreement or any other
agreement or instrument referred to in the Credit Documents or Hedging
Agreements shall be waived or any other guarantee of any of the
Guaranteed Obligations or any security therefor shall be released or
exchanged in whole or in part or otherwise dealt with;
(iv) any Lien granted to, or in favor of, the
Administrative Agent or any Lender or Lenders as security for any of
the Guaranteed Obligations shall fail to attach or be perfected; or
(v) any of the Guaranteed Obligations shall be
determined to be void or voidable (including, without limitation, for
the benefit of any creditor of any Guarantor) or shall be subordinated
to the claims of any Person (including, without limitation, any
creditor of any Guarantor).
With respect to its obligations hereunder, each Guarantor hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the Administrative Agent or any Lender
exhaust any right, power or remedy or proceed against any Person under any of
the Credit Documents, any Hedging Agreement or any other agreement or
instrument referred to in the Credit Documents or Hedging Agreements, or
against any other Person under any other guarantee of, or security for, any of
the Guaranteed Obligations.
48
57
4.3 Reinstatement.
The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment
by or on behalf of any Person in respect of the Guaranteed Obligations is
rescinded or must be otherwise restored by any holder of any of the Guaranteed
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Administrative Agent and each Lender on demand for all reasonable costs and
expenses (including, without limitation, reasonable fees and expenses of
counsel) incurred by the Administrative Agent or such Lender in connection with
such rescission or restoration, including any such costs and expenses incurred
in defending against any claim alleging that such payment constituted a
preference, fraudulent transfer or similar payment under any bankruptcy,
insolvency or similar law.
4.4 Certain Additional Waivers.
Each Guarantor agrees that such Guarantor shall have no right of recourse
to security for the Guaranteed Obligations, except through the exercise of the
rights of subrogation pursuant to Section 4.2.
4.5 Remedies.
The Guarantors agree that, to the fullest extent permitted by law, as
between the Guarantors, on the one hand, and the Administrative Agent and the
Lenders, on the other hand, the Guaranteed Obligations may be declared to be
forthwith due and payable as provided in Section 9.2 hereof (and shall be
deemed to have become automatically due and payable in the circumstances
provided in said Section 9.2) for purposes of Section 4.1 hereof
notwithstanding any stay, injunction or other prohibition preventing such
declaration (or preventing the Guaranteed Obligations from becoming
automatically due and payable) as against any other Person and that, in the
event of such declaration (or the Guaranteed Obligations being deemed to have
become automatically due and payable), the Guaranteed Obligations (whether or
not due and payable by any other Person) shall forthwith become due and payable
by the Guarantors for purposes of said Section 4.1.
4.6 Rights of Contribution.
The Guarantors hereby agree, as among themselves, that if any Guarantor
shall become an Excess Funding Guarantor (as defined below), each other
Guarantor shall, on demand of such Excess Funding Guarantor (but subject to the
succeeding provisions of this Section 4.6), pay to such Excess Funding
Guarantor an amount equal to such Guarantor's Pro Rata Share (as defined below
and determined, for this purpose, without reference to the properties, assets,
liabilities and debts of such Excess Funding Guarantor) of such Excess Payment
(as defined below). The payment obligation of any Guarantor to any Excess
Funding Guarantor under this Section 4.6 shall be subordinate and subject in
right of payment to the prior payment in full of the obligations of such
Guarantor under the other provisions of this Section 4, and such Excess Funding
Guarantor shall not exercise any right or remedy with respect to such excess
until payment and satisfaction in full of all of such obligations. For purposes
hereof, (i) "Excess Funding Guarantor" shall mean, in respect of any
obligations arising
49
58
under the other provisions of this Section 4 (hereafter, the "Guarantied
Obligations"), a Guarantor that has paid an amount in excess of its Pro Rata
Share of the Guarantied Obligations; (ii) "Excess Payment" shall mean, in
respect of any Guarantied Obligations, the amount paid by an Excess Funding
Guarantor in excess of its Pro Rata Share of such Guarantied Obligations; and
(iii) "Pro Rata Share", for the purposes of this Section 4.6, shall mean, for
any Guarantor, the ratio (expressed as a percentage) of (a) the amount by which
the aggregate present fair saleable value of all of its assets and properties
exceeds the amount of all debts and liabilities of such Guarantor (including
contingent, subordinated, unmatured, and unliquidated liabilities, but
excluding the obligations of such Guarantor hereunder) to (b) the amount by
which the aggregate present fair saleable value of all assets and other
properties of the Borrower and all of the Guarantors exceeds the amount of all
of the debts and liabilities (including contingent, subordinated, unmatured,
and unliquidated liabilities, but excluding the obligations of the Borrower and
the Guarantors hereunder) of the Borrower and all of the Guarantors, all as of
the Closing Date (if any Guarantor becomes a party hereto subsequent to the
Closing Date, then for the purposes of this Section 4.6 such subsequent
Guarantor shall be deemed to have been a Guarantor as of the Closing Date and
the information pertaining to, and only pertaining to, such Guarantor as of the
date such Guarantor became a Guarantor shall be deemed true as of the Closing
Date).
4.7 Continuing Guarantee.
The guarantee in this Section 4 is a continuing guarantee, and shall apply
to all Guaranteed Obligations whenever arising.
SECTION 5
CONDITIONS
5.1 Conditions to Closing.
This Credit Agreement shall become effective, and the initial Extensions
of Credit may be made, upon the satisfaction of the following conditions
precedent:
(a) Execution of Credit Agreement and Credit Documents.
Receipt by the Administrative Agent of (i) multiple counterparts of this Credit
Agreement, (ii) a Revolving Note for each Lender, (iii) multiple counterparts
of the Pledge Agreement, (iv) multiple counterparts of the Security Agreement
and (v) UCC financing statements relating to the Pledge Agreement and the
Security Agreement, if any, in each case executed by a duly authorized officer
of each party thereto and in each case conforming to the requirements of this
Credit Agreement.
(b) Legal Opinions. Receipt of multiple counterparts of
opinions of counsel for the Credit Parties relating to the Credit Documents and
the transactions contemplated herein, in form and substance satisfactory to the
Administrative Agent and the Required Lenders.
50
59
(c) Stock Certificates. Receipt of original stock
certificates evidencing the ownership interests of the Credit Parties pledged
pursuant to the Pledge Agreement, together in each case with original undated
stock powers executed in blank.
(d) Evidence of Insurance. Receipt of insurance
certificates or policies evidencing casualty insurance (including builders'
risk and all-risk permanent policies) and liability insurance conforming to the
requirements of this Credit Agreement and the other Credit Documents, together
with evidence of payment of premiums thereon.
(e) Absence of Legal Proceedings. The absence of any
action, suit, investigation or proceeding pending in any court or before any
arbitrator or governmental instrumentality which could reasonably be expected
to have a Material Adverse Effect.
(f) Public Offering. Evidence of completion of the IPO,
receipt by the Borrower of net cash proceeds therefrom in excess of $55 million
and the use of such proceeds by the Borrower to effect the Combination.
(g) Corporate Documents. Receipt of the following (or
their equivalent) for each of the Credit Parties:
(i) Articles of Incorporation. Copies of the
articles of incorporation or charter documents certified to be true
and complete as of a recent date by the appropriate Governmental
Authority of the state of its incorporation.
(ii) Resolutions. Copies of resolutions of the
Board of Directors approving and adopting the respective Credit
Documents, the transactions contemplated therein and authorizing
execution and delivery thereof, certified by a secretary or assistant
secretary as of the Closing Date to be true and correct and in force
and effect as of such date.
(iii) Bylaws. Copies of the bylaws certified by
a secretary or assistant secretary as of the Closing Date to be true
and correct and in force and effect as of such date.
(iv) Good Standing. Copies, where applicable,
of (A) certificates of good standing, existence or its equivalent
certified as of a recent date by the appropriate governmental
authorities of the state of incorporation and each other state in
which the failure to so qualify and be in good standing would have a
material adverse effect on the business or operations in such state
and (B) a certificate indicating payment of all corporate franchise
taxes certified as of a recent date by the appropriate governmental
taxing authorities.
(v) Officer's Certificate. An officer's
certificate for each of the Credit Parties dated as of the Closing
Date substantially in the form of Schedule 5.1(j)(v) with appropriate
insertions and attachments.
51
60
(i) Fees. Receipt of all fees, if any, owing pursuant to
the Administrative Agent's Fee Letter, Section 3.5 or otherwise.
(j) Subsection 5.2 Conditions. The conditions specified
in Section 5.2 shall be satisfied.
5.2 Conditions to All Extensions of Credit.
The obligation of each Lender to make any Extension of Credit hereunder
(including the initial Extension of Credit to be made hereunder) is subject to
the satisfaction of the following conditions precedent on the date of making
such Extension of Credit:
(a) Representations and Warranties. The representations
and warranties made by the Credit Parties herein or in any other Credit
Documents or which are contained in any certificate furnished at any time under
or in connection herewith shall be true and correct in all material respects on
and as of the date of such Extension of Credit as if made on and as of such
date (except for those which expressly relate to an earlier date and those
which are untrue solely as a result of a change permitted by this Agreement).
(b) No Default or Event of Default. No Default or Event
of Default shall have occurred and be continuing on such date or after giving
effect to the Extension of Credit to be made on such date unless such Default
or Event of Default shall have been waived in accordance with this Credit
Agreement.
(c) Additional Conditions to Revolving Loans. If a
Revolving Loan is made pursuant to Section 2.1, all conditions set forth
therein shall have been satisfied.
(d) Additional Conditions to Letters of Credit. If such
Extension of Credit is made pursuant to Section 2.2, all conditions set forth
therein shall have been satisfied.
Each request for Extension of Credit (including extensions of Eurodollar
Loans and conversions of Base Rate Loans into Eurodollar Loans) and each
acceptance by the Borrower of an Extension of Credit (including extensions of
Eurodollar Loans and conversions of Base Rate Loans into Eurodollar Loans)
shall be deemed to constitute a representation and warranty by the Borrower as
of the date of such Extension of Credit that the applicable conditions in
paragraphs (a) and (b), and in (c) or (d) of this subsection have been
satisfied.
52
61
SECTION 6
REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Credit Agreement and to make
Extensions of Credit herein provided for, each of the Credit Parties hereby
represents and warrants to the Administrative Agent and to each Lender that,
after giving effect to the IPO and the Combination:
6.1 Financial Condition.
Each of the financial statements described below (copies of which have
heretofore been provided to the Administrative Agent for distribution to the
Lenders), have been prepared in accordance with GAAP consistently applied
throughout the periods covered thereby, are complete and correct in all material
respects and present fairly the financial condition and results from operations
of the entities and for the periods specified (subject in the case of interim
company-prepared statements to normal year-end adjustments and the absence of
footnotes and subject in the case of the financial statements prepared on a pro
forma as adjusted basis to the statement as to basis of presentation set forth
on page F-4 of the Registration Statement):
(i) the balance sheet of the Borrower as at March 31,
1998 and the related statements of income and changes in stockholders
equity for the period from inception (March 20, 1998) to March 31,
1998, accompanied by the audit report thereon of Xxxxxx Xxxxxxxx LLP;
(ii) the balance sheets of certain of the Credit Parties
(other than the Borrower) and the related statements of operations,
stockholders' equity and cash flows as at the dates set forth therein
and for the respective periods then ended, all as set forth as pages
F-15 through F-143 of the Registration Statement, accompanied by the
audit reports thereon of Xxxxxx Xxxxxxxx LLP or such other independent
public accountants as are identified therein;
(iii) the unaudited pro forma as adjusted balance sheets of
the Borrower as at December 31, 1997 and March 31, 1998 and the related
unaudited pro forma as adjusted statements of income for the respective
fiscal year and fiscal quarter then ended, as set forth as pages F-4
through F-9 of the Registration Statement; and
(iv) the unaudited pro forma as adjusted statement of
income of the Borrower for the fiscal quarter ended December 31, 1997
and the unaudited pro forma as adjusted balance sheet of the Borrower
as at June 30, 1998 and the related unaudited pro forma as adjusted
statement of income for the fiscal quarter then ended, prepared by the
Borrower on a basis consistent with the unaudited pro forma as adjusted
financial statements described in Section 6.1(iii).
53
62
6.2 No Changes or Restricted Payments.
Since the date of the audited financial statements referenced in
Section 6.1(ii), (a) there has been no circumstance, development or event
relating to or affecting the members of the Consolidated Group which has had or
would be reasonably expected to have a Material Adverse Effect, and (b) except
as permitted herein, no Restricted Payments have been made or declared by any
members of the Consolidated Group.
6.3 Organization; Existence; Compliance with Law.
Each of the Credit Parties (a) is duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation or
organization, except to the extent that the failure to be in good standing would
not, in the aggregate, have a Material Adverse Effect, (b) has the corporate or
other necessary power and authority, and the legal right to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified as a foreign
entity and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification, other than in such jurisdictions where the failure
to be so qualified and in good standing would not, in the aggregate, have a
Material Adverse Effect, and (d) is in compliance with its certificate of
incorporation and bylaws (or other organizational or governing documents) and
all Requirements of Law, except to the extent that the failure to comply
therewith would not, in the aggregate, be reasonably expected to have a Material
Adverse Effect.
6.4 Power; Authorization; Enforceable Obligations.
Each of the Credit Parties has the corporate or other necessary power
and authority, and the legal right, to make, deliver and perform the Credit
Documents to which it is a party and has taken all necessary corporate or other
action to authorize the execution, delivery and performance by it of the Credit
Documents to which it is a party. No consent or authorization of, filing with,
notice to or other act by or in respect of, any Governmental Authority or any
other Person is required in connection with acceptance of extensions of credit
or the making of the guaranties hereunder or with the execution, delivery or
performance of any Credit Documents by the Credit Parties (other than those
which have been obtained, such filings as are required by the Securities and
Exchange Commission and to fulfill other reporting requirements with
Governmental Authorities) or with the validity or enforceability of any Credit
Document against the Credit Parties (except such filings as are necessary in
connection with the perfection of the Liens created by such Credit Documents).
Each Credit Document to which it is a party constitutes a legal, valid and
binding obligation of such Credit Party enforceable against such Credit Party in
accordance with their respective terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).
54
63
6.5 No Legal Bar.
The execution, delivery and performance of the Credit Documents, the
borrowings hereunder and the use of the Extensions of Credit will not violate
any Requirement of Law, the certificate of incorporation or bylaws (or other
organizational or governing documents) or any Contractual Obligation of any
Credit Party (except those as to which waivers or consents have been obtained),
and will not result in, or require, the creation or imposition of any Lien on
any of its respective properties or revenues pursuant to any Requirement of Law,
its certificate of incorporation or bylaws (or other organizational or governing
documents) or Contractual Obligation other than the Liens arising under or
contemplated in connection with the Credit Documents. No member of the
Consolidated Group is in default under or with respect to any of its Contractual
Obligations in any respect which would reasonably be expected to have a Material
Adverse Effect.
6.6 No Material Litigation.
No claim, litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to the best knowledge of the
Credit Parties, threatened by or against, any members of the Consolidated Group
or against any of their respective properties or revenues which (a) purports to
affect the legality, validity or enforceability of any of the Credit Documents
and which is reasonably likely to be adversely determined, or (b) is reasonably
likely to have a Material Adverse Effect.
6.7 No Default.
No Default or Event of Default has occurred and is continuing.
6.8 Ownership of Property; Liens.
Each of the Credit Parties has good record and marketable title in fee
simple to, or (subject to the documentation of certain agreed-upon leases
between certain Credit Parties and certain of the shareholders or principals of
the corresponding Founding Companies) a valid leasehold interest in, all its
real property material to the Consolidated Group, and good title to, or a valid
leasehold interest in, all its other property material to the Consolidated
Group, and none of such property is subject to any Lien, except for Permitted
Liens.
6.9 Intellectual Property.
Each of the members of the Consolidated Group owns, or has the legal
right to use, all United States trademarks, tradenames, copyrights, technology,
know-how and processes, if any, necessary for each of them to conduct its
business as currently conducted (the "Intellectual Property") except for those
the failure to own or have such legal right to use would not be reasonably
expected to have a Material Adverse Effect. No claim has been asserted and is
pending by any Person challenging or questioning the use of any such
Intellectual Property or the validity or effectiveness of any such Intellectual
Property, nor does any Credit Party know of any such claim, and the use of such
55
64
Intellectual Property by the members of the Consolidated Group does not infringe
on the rights of any Person, except for such claims and infringements that in
the aggregate, would not be reasonably expected to have a Material Adverse
Effect.
6.10 No Burdensome Restrictions.
Neither the certificate of incorporation or bylaws (or other
organizational or governing documents) nor any Requirement of Law or Contractual
Obligation of the members of the Consolidated Group would be reasonably expected
to have a Material Adverse Effect.
6.11 Taxes.
Each of the Credit Parties has filed or caused to be filed all United
States federal income tax returns and all other material tax returns which, to
the best knowledge of the Credit Parties, are required to be filed and has paid
(a) all taxes shown to be due and payable on said returns or (b) all taxes shown
to be due and payable on any assessments of which it has received notice made
against it or any of its property and all other taxes, fees or other charges
imposed on it or any of its property by any Governmental Authority (other than
any (i) taxes, fees or other charges with respect to which the failure to pay,
in the aggregate, would not have a Material Adverse Effect or (ii) taxes, fees
or other charges the amount or validity of which are currently being contested
and with respect to which reserves in conformity with GAAP have been provided on
the books of such Person), and no tax Lien has been filed (other than tax Liens
which, in the aggregate, would not have a Material Adverse Effect), and, to the
best knowledge of the Credit Parties, no claim is being asserted, with respect
to any such tax, fee or other charge (other than such claims which, in the
aggregate, would not have a Material Adverse Effect).
6.12 ERISA
Except as would not reasonably be expected to have a Material Adverse
Effect:
(a) During the five-year period prior to the date on which this
representation is made or deemed made: (i) no ERISA Event has occurred, and, to
the best knowledge of the Credit Parties, no event or condition has occurred or
exists as a result of which any ERISA Event could reasonably be expected to
occur, with respect to any Plan; (ii) no "accumulated funding deficiency," as
such term is defined in Section 302 of ERISA and Section 412 of the Internal
Revenue Code, whether or not waived, has occurred with respect to any Plan;
(iii) each Plan has been maintained, operated, and funded in compliance with its
own terms and in material compliance with the provisions of ERISA, the Internal
Revenue Code, and any other applicable federal or state laws; and (iv) no lien
in favor of the PBGC or a Plan has arisen or is reasonably likely to arise on
account of any Plan.
(b) The actuarial present value of all "benefit liabilities" (as
defined in Section 4001(a)(16) of ERISA), whether or not vested, under each
Single Employer Plan, as of the last annual
56
65
valuation date prior to the date on which this representation is made or deemed
made (determined, in each case, in accordance with Financial Accounting
Standards Board Statement 87, utilizing the actuarial assumptions used in such
Plan's most recent actuarial valuation report), did not exceed as of such
valuation date the fair market value of the assets of such Plan.
(c) No member of the Consolidated Group nor any ERISA Affiliate
has incurred, or, to the best knowledge of the Credit Parties, could be
reasonably expected to incur, any withdrawal liability under ERISA to any
Multiemployer Plan or Multiple Employer Plan. No member of the Consolidated
Group nor any ERISA Affiliate would become subject to any withdrawal liability
under ERISA if any member of the Consolidated Group or any ERISA Affiliate were
to withdraw completely from all Multiemployer Plans and Multiple Employer Plans
as of the valuation date most closely preceding the date on which this
representation is made or deemed made. No member of the Consolidated Group nor
any ERISA Affiliate has received any notification that any Multiemployer Plan is
in reorganization (within the meaning of Section 4241 of ERISA), is insolvent
(within the meaning of Section 4245 of ERISA), or has been terminated (within
the meaning of Title IV of ERISA), and no Multiemployer Plan is, to the best
knowledge of the Credit Parties, reasonably expected to be in reorganization,
insolvent, or terminated.
(d) No prohibited transaction (within the meaning of Section 406
of ERISA or Section 4975 of the Internal Revenue Code) or breach of fiduciary
responsibility has occurred with respect to a Plan which has subjected or may
subject any member of the Consolidated Group or any ERISA Affiliate to any
liability under Sections 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of
the Internal Revenue Code, or under any agreement or other instrument pursuant
to which any member of the Consolidated Group or any ERISA Affiliate has agreed
or is required to indemnify any person against any such liability.
(e) No member of the Consolidated Group nor any ERISA Affiliates
has any material liability with respect to "expected post-retirement benefit
obligations" within the meaning of the Financial Accounting Standards Board
Statement 106. Each Plan which is a welfare plan (as defined in Section 3(1) of
ERISA) to which Sections 601-609 of ERISA and Section 4980B of the Internal
Revenue Code apply has been administered in compliance in all material respects
of such sections.
6.13 Governmental Regulations, Etc.
(a) No part of the proceeds of the Extensions of Credit hereunder
will be used, directly or indirectly, for the purpose of purchasing or carrying
any "margin stock" within the meaning of Regulation U. If requested by any
Lender or the Administrative Agent, the Borrower will furnish to the
Administrative Agent and each Lender a statement to the foregoing effect in
conformity with the requirements of FR Form U-1 referred to in said Regulation
U. No indebtedness being reduced or retired out of the proceeds of the
Extensions of Credit hereunder was or will be incurred for the purpose of
purchasing or carrying any margin stock within the meaning of Regulation U or
any "margin security" within the meaning of Regulation T. "Margin stock" within
the meanings of Regulation U does not constitute more than 25% of the value of
the consolidated assets of the
57
66
Borrower and its Subsidiaries. None of the transactions contemplated by this
Credit Agreement (including, without limitation, the direct or indirect use of
the proceeds of the Revolving Loans) will violate or result in a violation of
the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934,
as amended, or regulations issued pursuant thereto, or Regulation T, U or X.
(b) None of the members of the Consolidated Group is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act or the Investment Company Act of 1940, each as amended. In addition,
none of the members of the Consolidated Group is (i) an "investment company"
registered or required to be registered under the Investment Company Act of
1940, as amended, and is not controlled by such a company, or (ii) a "holding
company", or a "subsidiary company" of a "holding company", or an "affiliate" of
a "holding company" or of a "subsidiary" of a "holding company", within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
(c) No director, executive officer or principal shareholder of any
member of the Consolidated Group is a director, executive officer or principal
shareholder of any Lender. For the purposes hereof the terms "director",
"executive officer" and "principal shareholder" (when used with reference to any
Lender) have the respective meanings assigned thereto in Regulation O issued by
the Board of Governors of the Federal Reserve System.
6.14 Subsidiaries.
Set forth on Schedule 6.14 are all the Subsidiaries of the Borrower at
the Closing Date, the jurisdiction of their incorporation and the direct or
indirect ownership interest of the Borrower therein.
6.15 Purpose of Extensions of Credit.
The Extensions of Credit may be used (i) for working capital, capital
expenditures and other lawful corporate purposes, (ii) to the extent necessary,
to refinance certain indebtedness of the Borrower and its Subsidiaries and to
pay expenses of the transactions contemplated herein (including, without
limitation, the IPO and the Combination) and (iii) to finance Acquisitions
permitted hereunder.
6.16 Environmental Matters.
Except as would not reasonably be expected to have a Material Adverse
Effect:
(a) Each of the facilities and properties owned, leased or
operated by the members of the Consolidated Group (the "Properties") and all
operations at the Properties are in compliance with all applicable Environmental
Laws, and there is no violation of any Environmental Law with respect to the
Properties or the businesses operated by the members of the Consolidated Group
(the "Businesses"), and there are no conditions relating to the Businesses or
Properties that could give rise to liability under any applicable Environmental
Laws.
58
67
(b) None of the Properties contains, or has previously contained,
any Materials of Environmental Concern at, on or under the Properties in amounts
or concentrations that constitute or constituted a violation of, or could give
rise to liability under, Environmental Laws.
(c) None of the members of the Consolidated Group has received any
written or verbal notice of, or inquiry from any Governmental Authority
regarding, any violation, alleged violation, non-compliance, liability or
potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Properties or the Businesses, nor
does any member of the Consolidated Group have knowledge or reason to believe
that any such notice will be received or is being threatened.
(d) Materials of Environmental Concern have not been transported
or disposed of from the Properties, or generated, treated, stored or disposed of
at, on or under any of the Properties or any other location, in each case by or
on behalf any members of the Consolidated Group in violation of, or in a manner
that would be reasonably likely to give rise to liability under, any applicable
Environmental Law.
(e) No judicial proceeding or governmental or administrative
action is pending or, to the best knowledge of any Credit Party, threatened,
under any Environmental Law to which any member of the Consolidated Group is or
will be named as a party, nor are there any consent decrees or other decrees,
consent orders, administrative orders or other orders, or other administrative
or judicial requirements outstanding under any Environmental Law with respect to
any member of the Consolidated Group, the Properties or the Businesses.
(f) There has been no release or, threat of release of Materials
of Environmental Concern at or from the Properties, or arising from or related
to the operations (including, without limitation, disposal) of any member of the
Consolidated Group in connection with the Properties or otherwise in connection
with the Businesses, in violation of or in amounts or in a manner that could
give rise to liability under Environmental Laws.
6.17 Year 2000 Compliance.
The Borrower has (i) developed a plan and timeline for addressing the
"Year 2000 Problem" (that is, the risk that computer applications used by such
Person may be unable to recognize and perform properly date-sensitive functions
involving certain dates prior to and any date after December 31, 1999) on a
timely basis, (ii) to date, implemented that plan in accordance with that
timetable and (iii) believes that all of its computer applications that are
material to its or any of its Subsidiaries' business and operations are
reasonably expected on a timely basis to be able to perform properly
date-sensitive functions for all dates before and after January 1, 2000 (that
is, be "Year 2000 Compliant"), except to the extent that a failure to do so
could not reasonably be expected to have a Material Adverse Effect.
59
68
SECTION 7
AFFIRMATIVE COVENANTS
Each of the Credit Parties covenants and agrees that on the Closing
Date, and so long as this Credit Agreement is in effect and until the
Commitments have been terminated, no Obligations remain outstanding and all
amounts owing hereunder or in connection herewith have been paid in full, unless
the Required Lenders otherwise consent in writing, the Borrower shall, and in
the case of Sections 7.4, 7.5, 7.6, 7.7 and 7.8 below, shall cause each of the
other Credit Parties to:
7.1 Financial Statements.
Furnish, or cause to be furnished, to the Administrative Agent and
Lenders:
(a) Audited Financial Statements. As soon as available,
but in any event within 95 days after the end of each fiscal year, an
audited consolidated balance sheet of the Borrower and its subsidiaries
as of the end of the fiscal year and the related consolidated
statements of operations, shareholders' equity and cash flows for the
year, audited by Xxxxxx Xxxxxxxx LLP, or other firm of independent
certified public accountants of nationally recognized standing
reasonably acceptable to the Required Lenders, setting forth in each
case in comparative form the figures for the previous year (except for
the period prior to the merger of a Subsidiary of the Borrower with
Xxxxxxxx Holdings Inc. pursuant to the Combination, for which period
the financial statements presented will be those of Xxxxxxxx Holdings
Inc.), reported without a "going concern" or like qualification or
exception, or qualification indicating that the scope of the audit was
inadequate to permit such independent certified public accountants to
certify such financial statements without such qualification.
(b) Company-Prepared Financial Statements. As soon as
available, but in any event
(i) within 50 days after the end of each of the first
three fiscal quarters, a company-prepared consolidated balance
sheet of the Borrower and its subsidiaries as of the end of
the quarter and related company-prepared consolidated
statements of operations, shareholders' equity and cash flows
for such quarterly period and for the fiscal year to date;
(ii) within 30 days prior to the end of each fiscal
year, an annual business plan and budget for the members of
the Consolidated Group, containing, among other things,
projected financial statements for the next fiscal year,
in each case setting forth in comparative form the consolidated figures
for the corresponding period or periods of the preceding fiscal year or
the portion of the fiscal
60
69
year ending with such period, as applicable (except for the period
prior to the merger of a Subsidiary of the Borrower with Xxxxxxxx
Holdings Inc. pursuant to the Combination, for which period the
financial statements presented will be those of Xxxxxxxx Holdings
Inc.), in each case subject to normal year-end audit adjustments.
(c) Third Quarter 1998 Pro Forma. As soon as available,
but in any event within 50 days after the end of the Borrower's fiscal
quarter ending on September 30, 1998, a company-prepared unaudited pro
forma as adjusted consolidated statement of income of the Borrower for
the fiscal quarter ended September 30, 1998, prepared on a basis
consistent with the unaudited pro forma as adjusted financial
statements described in Section 6.1(iii).
(d) Borrowing Base Certificate. Concurrently with the
delivery of the financial statements referred to in Sections 7.1(a) and
7.1(b) above, a statement of the Borrowing Base and its components as
of the end of the immediately preceding fiscal quarter, in form and
content satisfactory to the Administrative Agent and certified by the
chief financial officer of the Borrower to be true and correct as of
the date thereof (the "Borrowing Base Certificate").
All such financial statements shall be complete and correct in all material
respects (subject, in the case of interim statements, to normal year-end audit
adjustments and subject in the case of the financial statements prepared on a
pro forma as adjusted basis to the statement as to basis of presentation set
forth on page F-4 of the Registration Statement) and shall be prepared in
reasonable detail and, in the case of the annual and quarterly financial
statements provided in accordance with subsections (a) and (b) above, in
accordance with GAAP applied consistently throughout the periods reflected
therein and further accompanied by a description of, and an estimation of the
effect on the financial statements on account of, any change in the application
of accounting principles as provided in Section 1.3(a).
7.2 Certificates; Other Information.
Furnish, or cause to be furnished, to the Administrative Agent for
distribution to the Lenders:
(a) Accountant's Certificate and Reports. Concurrently
with the delivery of the financial statements referred to in subsection
7.1(a) above, a certificate of the independent certified public
accountants reporting on such financial statements stating that in the
course of performing their audit, nothing came to their attention that
caused them to believe the Borrower was not in compliance with the
financial covenants contained in Section 7.9 below insofar as such
covenants relate to accounting matters, except as specified in such
certificate.
(b) Officer's Compliance Certificate. Concurrently with
the delivery of the financial statements referred to in Sections 7.1(a)
and 7.1(b) above, a certificate of a Responsible Officer stating that,
to the best of such Responsible Officer's knowledge and belief, (i) the
financial statements fairly present in all material respects the
financial condition
61
70
of the parties covered by such financial statements, (ii) during such
period the Credit Parties have observed or performed in all material
respects the covenants and other agreements hereunder and under the
other Credit Documents relating to them, and satisfied in all material
respects the conditions contained in this Credit Agreement to be
observed, performed or satisfied by them, and (iii) such Responsible
Officer has obtained no knowledge of any Default or Event of Default
except as specified in such certificate. Such certificate shall include
the calculations required to indicate compliance with Section 7.9. A
form of Officer's Certificate is attached as Schedule 7.2(b).
(c) Accountants' Reports. Promptly upon receipt, a copy
of any final (as distinguished from a preliminary or discussion draft)
"management letter" or other similar report submitted by independent
accountants or financial consultants to the members of the Consolidated
Group in connection with any annual, interim or special audit.
(d) Public Information. Within thirty days after the same
are sent, copies of all reports (other than those otherwise provided
pursuant to subsection 7.1) and other financial information which the
Borrower sends to its public stockholders, and within thirty days after
the same are filed, copies of all financial statements and
non-confidential reports which the Borrower may make to, or file with,
the SEC.
(e) Other Information. Promptly, such additional
financial and other information as the Administrative Agent, at the
request of any Lender, may from time to time reasonably request.
7.3 Notices.
Give notice to the Administrative Agent (which shall promptly transmit
such notice to each Lender) of:
(a) Defaults. Immediately (and in any event within five
(5) Business Days) after any Responsible Officer knows or has reason to
know thereof, the occurrence of any Default or Event of Default.
(b) Contractual Obligations. Promptly (and in any event
within ten (10) Business Days) after any Responsible Officer knows or
has reason to know of the occurrence of any default or event of default
under any Contractual Obligation of any member of the Consolidated
Group which would reasonably be expected to have a Material Adverse
Effect.
(c) Legal Proceedings. Promptly (and in any event within
ten (10) Business Days) after any Responsible Officer knows or has
reason to know of any litigation, or any investigation or proceeding
(including without limitation, any environmental proceeding), or any
material development in respect thereof, affecting any member of the
Consolidated Group which, if adversely determined, would reasonably be
expected to have a Material Adverse Effect.
62
71
(d) ERISA. Promptly (and in any event within thirty (30)
Business Days) after any Responsible Officer knows or has reason to
know of (i) any event or condition, including, but not limited to, any
Reportable Event, that constitutes, or might reasonably lead to, an
ERISA Event; (ii) with respect to any Multiemployer Plan, the receipt
of notice as prescribed in ERISA or otherwise of any withdrawal
liability assessed against any of their ERISA Affiliates, or of a
determination that any Multiemployer Plan is in reorganization or
insolvent (both within the meaning of Title IV of ERISA); (iii) the
failure to make full payment on or before the due date (including
extensions) thereof of all amounts which the members of the
Consolidated Group or any ERISA Affiliate are required to contribute to
each Plan pursuant to its terms and as required to meet the minimum
funding standard set forth in ERISA and the Internal Revenue Code with
respect; or (iv) any change in the funding status of any Plan that
reasonably could be expected to have a Material Adverse Effect;
together with a description of any such event or condition or a copy of
any such notice and a statement by the chief financial officer of the
Borrower briefly setting forth the details regarding such event,
condition, or notice, and the action, if any, which has been or is
being taken or is proposed to be taken by the Credit Parties with
respect thereto. Promptly upon request, the members of the Consolidated
Group shall furnish the Administrative Agent and the Lenders with such
additional information concerning any Plan as may be reasonably
requested, including, but not limited to, copies of each annual
report/return (Form 5500 series), as well as all schedules and
attachments thereto required to be filed with the Department of Labor
and/or the Internal Revenue Service pursuant to ERISA and the Internal
Revenue Code, respectively, for each "plan year" (within the meaning of
Section 3(39) of ERISA).
(e) Other. Promptly (and in any event within ten (10)
Business Days), any other development or event which a Responsible
Officer determines could reasonably be expected to have a Material
Adverse Effect.
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the relevant Credit Parties propose to take with respect
thereto.
63
72
7.4 Payment of Obligations.
Pay, discharge or otherwise satisfy at or before maturity or before
they become delinquent, as the case may be, in accordance with prudent business
practice (subject, where applicable, to specified grace periods) all material
obligations of each Credit Party of whatever nature and any additional costs
that are imposed as a result of any failure to so pay, discharge or otherwise
satisfy such obligations, except when the amount or validity of such obligations
and costs is currently being contested in good faith by appropriate proceedings
and reserves, if applicable, in conformity with GAAP with respect thereto have
been provided on the books of the Consolidated Group, as the case may be.
7.5 Conduct of Business and Maintenance of Existence.
Continue to engage in business of the same general type as conducted on
the Closing Date by the Borrower and the other Credit Parties, taken as a whole,
and similar or related businesses; preserve, renew and keep in full force and
effect its corporate existence except as otherwise permitted by this Credit
Agreement and take all reasonable action to maintain all rights, privileges,
licenses and franchises necessary or desirable in the normal conduct of its
business except to the extent that failure to comply therewith would not, in the
aggregate, have a Material Adverse Effect; and comply with all Contractual
Obligations, its certificate of incorporation or bylaws (or other organizational
or governing documents) and all Requirements of Law applicable to it except to
the extent that failure to comply therewith would not, in the aggregate, have a
Material Adverse Effect.
7.6 Maintenance of Property; Insurance.
Keep all material property useful and necessary in its business in
reasonably good working order and condition (ordinary wear and tear excepted)
except to the extent that failure to comply therewith would not, in the
aggregate, have a Material Adverse Effect; maintain with financially sound and
reputable insurance companies casualty, liability and such other insurance
(which may include plans of self-insurance) with such coverage and deductibles,
and in such amounts as may be consistent with prudent business practice and in
any event consistent with normal industry practice (except to any greater extent
as may be required by the terms of any of the other Credit Documents); and
furnish to the Administrative Agent, upon written request, full information as
to the insurance carried.
7.7 Inspection of Property; Books and Records; Discussions.
Keep proper books of records and account in which full, true and
correct entries in conformity with GAAP and all Requirements of Law shall be
made of all dealings and transactions in relation to its businesses and
activities; and permit, during regular business hours and upon reasonable notice
to a Responsible Officer by the Administrative Agent, the Administrative Agent
to visit and inspect any of its properties and examine and make abstracts
(including photocopies) from any of its books and records (other than materials
protected by the
64
73
attorney-client privilege and materials which the Credit Parties may not
disclose without violation of a confidentiality obligation binding upon them)
and to discuss the business, operations, properties and financial and other
condition of the Credit Parties with officers and employees of the Borrower and,
so long as any discussion takes place in the presence of a Responsible Officer,
with officers and employees of the Credit Parties and with the Borrower's
independent certified public accountants. The cost of the inspection referred to
in the preceding sentence shall be for the account of the Lenders unless an
Event of Default has occurred and is continuing, in which case the cost of such
inspection shall be for the account of the Credit Parties. The Credit Parties
agree that the Administrative Agent, and its representatives, may conduct an
annual audit of the inventory and receivables of the Credit Parties, at the
expense of the Borrower.
7.8 Environmental Laws.
(a) Comply in all material respects with, and take reasonable
actions to ensure compliance in all material respects by all tenants and
subtenants, if any, with, all applicable Environmental Laws and obtain and
comply in all material respects with and maintain, and take reasonable actions
to ensure that all tenants and subtenants obtain and comply in all material
respects with and maintain, any and all licenses, approvals, notifications,
registrations or permits required by applicable Environmental Laws except to the
extent that failure to do so would not reasonably be expected to have a Material
Adverse Effect; and
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws except to the extent that the same are being contested in good faith by
appropriate proceedings and the failure to do or the pendency of such
proceedings would not reasonably be expected to have a Material Adverse Effect.
7.9 Financial Covenants.
Comply with the following financial covenants (each of which shall be
computed in accordance with Section 1.3(b), to the extent applicable):
(a) Consolidated Leverage Ratio. As of the end of each fiscal
quarter ending during the respective periods set forth below, the Consolidated
Leverage Ratio shall be not greater than the ratio set forth opposite such
period:
Closing Date through June 30, 1999 3.0:1.0
July 1, 1999 and thereafter 2.5:1.0
(b) Minimum Consolidated Base EBITDA. For the period from the
Closing Date through the fiscal quarter ending June 30, 1999, as of the end of
each fiscal quarter for the period
65
74
of four consecutive fiscal quarters then ending, Consolidated Base EBITDA shall
be not less than Fifteen Million Dollars ($15,000,000).
(c) Consolidated Net Worth. As of the end of each fiscal quarter,
Consolidated Net Worth shall be not less than the sum of $88,000,000 plus on the
last day of each fiscal quarter to occur after the Closing Date, seventy-five
percent (75%) of Consolidated Net Income for the fiscal quarter (but not less
than zero), such increases to be cumulative, plus one hundred percent (100%) of
any increases in Consolidated Net Worth resulting from Equity Transactions
occurring after the Closing Date.
(d) Consolidated Fixed Charge Coverage Ratio. As of the end of
each fiscal quarter, Consolidated Fixed Charge Coverage Ratio shall be not less
than 1.75:1.0.
(e) Consolidated Rent Expense. Consolidated Rent Expense for any
fiscal year, commencing with the fiscal year ending December 31, 1999, shall be
not more than $5,000,000.
7.10 Administrative Fees.
Pay to the Administrative Agent the Administrative Agent's Fees and
comply with the other agreements provided for in the Administrative Agent's Fee
Letter.
7.11 Additional Guaranties and Stock Pledges.
(a) Domestic Subsidiaries. Where Domestic Subsidiaries of the
Borrower which are not Credit Parties hereunder (the "Non-Guarantor
Subsidiaries") shall at any time constitute more than (the "Threshold
Requirement"):
(i) in any instance for any such Non-Guarantor Subsidiary,
five percent (5%) of consolidated assets for the Consolidated Group or
five percent (5%) of consolidated revenues for the Consolidated Group,
or
(ii) in the aggregate for all such Non-Guarantor Subsidiaries,
ten percent (10%) of consolidated assets for the Consolidated Group or
ten percent (10%) of consolidated revenues for the Consolidated Group,
then the Borrower shall (i) notify the Administrative Agent thereof within 10
days after a Responsible Officer has knowledge thereof, and, within 20 days
thereafter, (A) cause such Domestic Subsidiary or Subsidiaries to become a
Guarantor by execution of a Joinder Agreement, such that immediately after
joinder as a Guarantor, the remaining Non-Guarantor Subsidiaries shall not in
any instance, or collectively, exceed the Threshold Requirement, (B) deliver
with the Joinder Agreement, supporting resolutions, incumbency certificates,
corporate formation and organizational documentation and opinions of counsel as
the Administrative Agent may reasonably request, and (C) deliver stock
certificates and related pledge agreements
66
75
or pledge joinder agreements evidencing the pledge of 100% of the Voting Stock
of all Domestic Subsidiaries (whether or not they are Guarantors) and 66% of the
Voting Stock of all Foreign Subsidiaries, together with undated stock transfer
powers executed in blank.
(b) Foreign Subsidiaries. At any time any Person becomes a Foreign
Subsidiary, the Borrower will notify the Administrative Agent thereof within 10
days after a Responsible Officer has knowledge thereof, and, within 45 days
thereafter, cause (A) delivery of supporting resolutions, incumbency
certificates, corporation formation and organizational documentation and
opinions of counsel as the Administrative Agent may reasonably request, and (B)
delivery of stock certificates (where required for perfection under local law)
and a related pledge agreement or pledge joinder agreement evidencing the pledge
of 66% of the Voting Stock of such Foreign Subsidiary and of 66% of the Voting
Stock of each of its Domestic Subsidiaries and 66% of the Voting Stock of each
of its Foreign Subsidiaries, together in each case with undated stock transfer
powers executed in blank.
7.12 Ownership of Subsidiaries.
Except to the extent otherwise permitted in Section 8.6, the Borrower
shall, directly or indirectly, own at all times 100% of the Voting Stock of each
of its Subsidiaries.
7.13 Use of Proceeds.
Extensions of Credit will be used solely for the purposes provided in
Section 6.15.
7.14 Year 2000 Compatibility.
Take all action reasonably necessary to assure that its computer based
systems are Year 2000 Compliant within the meaning of Section 6.17), except to
the extent that a failure to do so would not have a Material Adverse Effect,
and, at the reasonable request of the Administrative Agent or the Required
Lenders, provide evidence to the Lenders that it is taking such action.
SECTION 8
NEGATIVE COVENANTS
Each of the Credit Parties covenants and agrees that on the Closing
Date, and so long as this Credit Agreement is in effect and until the
Commitments have been terminated, no Obligations remain outstanding and all
amounts owing hereunder or in connection herewith, have been paid in full, no
member of the Consolidated Group shall (without the prior written consent of the
Required Lenders):
67
76
8.1 Indebtedness.
Contract, create, incur, assume or permit to exist any Indebtedness,
except:
(a) Indebtedness arising or existing under this Credit
Agreement and the other Credit Documents;
(b) Indebtedness set forth in Schedule 8.1, and renewals,
refinancings and extensions thereof on terms and conditions consistent
with then prevailing market standards for such existing Indebtedness;
(c) Capital Lease Obligations and Indebtedness incurred,
in each case, to provide all or a portion of the purchase price or
costs of construction of an asset or, in the case of a sale/leaseback
transaction as described in Section 8.9, to finance the value of such
asset owned by a member of the Consolidated Group, provided that (i)
such Indebtedness when incurred shall not exceed the purchase price or
cost of construction of such asset or, in the case of a sale/leaseback
transaction, the fair market value of such asset, (ii) no such
Indebtedness shall be refinanced for a principal amount in excess of
the principal balance outstanding thereon at the time of such
refinancing, and (iii) the total amount of all such Indebtedness shall
not exceed $1,500,000 at any time outstanding;
(d) Indebtedness and obligations owing under interest
rate protection agreements relating to the Obligations hereunder and
under interest rate, commodities and foreign currency exchange
protection agreements entered into in the ordinary course of business
to manage existing or anticipated risks and not for speculative
purposes;
(e) unsecured intercompany Indebtedness owing by a member
of the Consolidated Group to another member of the Consolidated Group
(subject, however, to the limitations of Section 8.5 in the case of the
member of the Consolidated Group extending the intercompany loan,
advance or credit);
(f) Subordinated Debt of the Borrower;
(g) Indebtedness in respect of financed insurance premium
obligations;
(h) other unsecured Indebtedness of any of the Credit
Parties of up to $1,000,000 in the aggregate at any time outstanding;
and
(i) Support Obligations of Indebtedness permitted under
this Section 8.1.
68
77
8.2 Liens.
Contract, create, incur, assume or permit to exist any Lien with
respect to any of their respective property or assets of any kind (whether real
or personal, tangible or intangible), whether now owned or hereafter acquired,
except for Permitted Liens.
8.3 Consolidation, Merger, Divestiture, etc.
(a) Enter into a transaction of merger or consolidation,
except
(i) a member of the Consolidated Group may be a
party to a transaction of merger or consolidation with another member
of the Consolidated Group, provided that (A) if the Borrower is a party
thereto, it shall be the surviving corporation, (B) if a Guarantor is a
party thereto and the Borrower is not a party thereto, a Guarantor
shall be the surviving corporation or the surviving corporation shall
be a Domestic Subsidiary and shall become a Guarantor hereunder as an
Additional Credit Party pursuant to Section 7.11 concurrently
therewith, and (C) no Default or Event of Default shall exist either
immediately prior to or immediately after giving effect thereto; and
(ii) a member of the Consolidated Group (other
than the Borrower) may be a party to a transaction of merger or
consolidation with any other Person in connection with an Acquisition
permitted under Section 8.4 and a Divestiture permitted under Section
8.3(b), provided that, in connection with an Acquisition, the
provisions of Section 7.11 regarding joinder of certain Subsidiaries as
Additional Credit Parties hereunder shall be complied with.
(b) Make any Divestiture which:
(i) in any instance (including any series of
related transactions comprising a Divestiture) shall be of Property (or
of a Person owning Property) constituting more than five percent (5%)
of Consolidated Assets at the end of the immediately preceding fiscal
year or generating more than five percent (5%) of Consolidated Net
Income for the immediately preceding fiscal year, or
(ii) in the aggregate in any fiscal year shall be
of Property (or of a Person owning Property) constituting more than ten
percent (10%) of Consolidated Assets at the end of the immediately
preceding fiscal year or generating more than ten percent (10%)
Consolidated Net Income for the immediately preceding fiscal year;
provided in the case of any Divestiture permitted under subsections (i)
and (ii) above, that no Default of Event of Default would exist after
giving effect thereto, determined in the case of financial covenant
compliance on a Pro Forma Basis and as otherwise set forth in Section
1.3(b).
69
78
(c) In the case of the Borrower, liquidate, wind-up or
dissolve, whether voluntarily or involuntarily (or suffer to permit any such
liquidation or dissolution).
Any consent of the Required Lenders requested by the Borrower under
this Section 8.3 shall not be arbitrarily withheld or unreasonably delayed.
8.4 Acquisitions.
Make any Acquisition, unless
(a) the cash consideration payable in respect of any such
Acquisition (or series of related transactions comprising an
Acquisition) shall not exceed $10,000,000 in any instance;
(b) the cash consideration payable in respect of all such
Acquisitions (excluding acquisitions consented to in writing by the
Required Lenders) in any period of four consecutive fiscal quarters
shall not exceed $20,000,000 in the aggregate;
(c) the Board of Directors of the Person which is, or
whose Property is, the subject of the Acquisition shall have approved
the Acquisition; and
(d) no Default or Event of Default would exist after
giving effect thereto, determined in the case of financial covenant
compliance on a Pro Forma Basis and as otherwise set forth in Section
1.3(b).
Any consent of the Required Lenders requested by the Borrower under
this Section 8.4 shall not be arbitrarily withheld or unreasonably delayed.
8.5 Investments.
Make any Investment in any Person except for Permitted Investments.
8.6 Ownership of Equity Interests.
Issue, sell, transfer, pledge or otherwise dispose of any partnership
interests, shares of capital stock or other equity or ownership interests
("Equity Interests") in any member of the Consolidated Group, except (i)
issuance, sale or transfer of Equity Interests to a Credit Party by a Subsidiary
of such Credit Party, (ii) in connection with a transaction permitted by
Sections 8.3, 8.4 or 8.5, (iii) as needed to qualify directors under applicable
law and (iv) dispositions of Permitted Investments (other than Investments by a
Credit Party in another Credit Party).
70
79
8.7 Fiscal Year.
Change its fiscal year from a December 31 fiscal year end.
8.8 Restricted Payments.
Make or permit any Restricted Payments.
8.9 Sale Leasebacks.
Except as permitted pursuant to Section 8.1(c) hereof, directly or
indirectly, become or remain liable as lessee or as guarantor or other surety
with respect to any lease, whether an Operating Lease or a Capital Lease, of any
Property (whether real or personal or mixed), whether now owned or hereafter
acquired, (i) which such Person has sold or transferred or is to sell or
transfer to any other Person other than a Credit Party or (ii) which such Person
intends to use for substantially the same purpose as any other Property which
has been sold or is to be sold or transferred by such Person to any other Person
in connection with such lease.
8.10 No Further Negative Pledges.
Except with respect to prohibitions against other encumbrances on
specific Property encumbered to secure payment of particular Indebtedness (which
Indebtedness relates solely to such specific Property, and improvements and
accretions thereto, and is otherwise permitted hereby), no member of the
Consolidated Group will enter into, assume or become subject to any agreement
prohibiting or otherwise restricting the creation or assumption of any Lien upon
its properties or assets, whether now owned or hereafter acquired, or requiring
the grant of any security for such obligation if security is given for some
other obligation.
SECTION 9
EVENTS OF DEFAULT
9.1 Events of Default.
An Event of Default shall exist upon the occurrence of any of the
following specified events (each an "Event of Default"):
(a) Payment. Any Credit Party shall
(i) default in the payment on the Termination Date of any
principal of any of the Revolving Loans, or
71
80
(ii) default, and such default shall continue for three
(3) or more Business Days, in the payment when due of any reimbursement
obligations arising from drawings under Letters of Credit, or of any
interest on the Revolving Loans or on any reimbursement obligations
arising from drawings under Letters of Credit, or of any Fees or other
amounts owing hereunder, under any of the other Credit Documents or in
connection herewith or therewith; or
(b) Representations. Any representation, warranty or statement
made or deemed to be made herein, in any of the other Credit Documents, or in
any statement or certificate delivered or required to be delivered pursuant
hereto or thereto shall prove untrue in any material respect on the date as of
which it was made or deemed to have been made (other than those which are untrue
solely as a result of changes permitted by this Agreement); or
(c) Covenants.
(i) Default in the due performance or observance of any
term, covenant or agreement contained in Section 7.3(a), 7.9, 7.11,
7.13 or 8.1 through 8.10, inclusive, or
(ii) Default in the due performance or observance by it of
any term, covenant or agreement (other than those referred to in
subsections (a), (b) or (c)(i) of this Section 9.1) contained in this
Credit Agreement and such default shall continue unremedied for a
period of at least 30 days after the earlier of a Responsible Officer
becoming aware of such default or notice thereof by the Administrative
Agent; or
(d) Other Credit Documents. (i) Any Credit Party shall default in
the due performance or observance of any material term, covenant or agreement in
any of the other Credit Documents (subject to applicable grace or cure periods,
if any), or (ii) except as to the Credit Party which is dissolved, released or
merged or consolidated out of existence as the result of or in connection with a
dissolution, merger or disposition permitted by Section 8.3 or Section 8.4, any
Credit Document shall fail to be in full force and effect or to give the
Administrative Agent and/or the Lenders any material part of the Liens, rights,
powers and privileges purported to be created thereby; or
(e) Guaranties. Except as to the Credit Party which is dissolved,
released or merged or consolidated out of existence as the result of or in
connection with a dissolution, merger or disposition permitted by Section 8.3 or
Section 8.4, the guaranty given by any Guarantor hereunder or any material
provision thereof shall cease to be in full force and effect, or any Guarantor
hereunder or any Person acting by or on behalf of such Guarantor shall deny or
disaffirm such Guarantor's obligations under such guaranty, or any Guarantor
shall default in the due performance or observance of any term, covenant or
agreement on its part to be performed or observed pursuant to any guaranty; or
72
81
(f) Bankruptcy, etc. Any Bankruptcy Event shall occur with respect
to any Material Credit Party; or
(g) Defaults under Other Agreements. With respect to any
Indebtedness (other than Indebtedness outstanding under this Credit Agreement)
in excess of $1,500,000 in the aggregate for the Consolidated Group taken as a
whole, (A) (1) any Material Credit Party shall default in any payment (beyond
the applicable grace period with respect thereto, if any) with respect to any
such Indebtedness, or (2) the occurrence and continuance of a default in the
observance or performance relating to such Indebtedness or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event or condition shall occur or condition exist, the effect of which default
or other event or condition is to cause, or permit, the holder or holders of
such Indebtedness (or trustee or agent on behalf of such holders) to cause
(determined without regard to whether any notice or lapse of time is required),
any such Indebtedness to become due prior to its stated maturity; or (B) any
such Indebtedness shall be declared due and payable, or required to be prepaid
other than by a regularly scheduled required prepayment, prior to the stated
maturity thereof; or
(h) Judgments. Any Material Credit Party shall fail within 30 days
of the date due and payable to pay, bond or otherwise discharge any judgment,
settlement or order for the payment of money which judgment, settlement or
order, when aggregated with all other such judgments, settlements or orders due
and unpaid at such time, exceeds $1,500,000, and which is not stayed on appeal
(or for which no motion for stay is pending) or is not otherwise being executed;
or
(i) ERISA. Any of the following events or conditions, if such
event or condition could reasonably be expected to have a Material Adverse
Effect: (1) any "accumulated funding deficiency," as such term is defined in
Section 302 of ERISA and Section 412 of the Internal Revenue Code, whether or
not waived, shall exist with respect to any Plan, or any lien shall arise on the
assets of a member of the Consolidated Group or any ERISA Affiliate in favor of
the PBGC or a Plan; (2) an ERISA Event shall occur with respect to a Single
Employer Plan, which is, in the reasonable opinion of the Administrative Agent,
likely to result in the termination of such Plan for purposes of Title IV of
ERISA; (3) an ERISA Event shall occur with respect to a Multiemployer Plan or
Multiple Employer Plan, which is, in the reasonable opinion of the
Administrative Agent, likely to result in (i) the termination of such Plan for
purposes of Title IV of ERISA, or (ii) a member of the Consolidated Group or any
ERISA Affiliate incurring any liability in connection with a withdrawal from,
reorganization of (within the meaning of Section 4241 of ERISA), or insolvency
of (within the meaning of Section 4245 of ERISA) such Plan; or (4) any
prohibited transaction (within the meaning of Section 406 of ERISA or Section
4975 of the Internal Revenue Code) or breach of fiduciary responsibility shall
occur which may subject a member of the Consolidated Group or any ERISA
Affiliate to any liability under Sections 406, 409, 502(i), or 502(l) of ERISA
or Section 4975 of the Internal Revenue Code, or under any agreement or other
instrument pursuant to which a member of the Consolidated Group or any ERISA
Affiliate has agreed or is required to indemnify any person against any such
liability; or
73
82
(j) Ownership. There shall occur a Change of Control.
9.2 Acceleration; Remedies.
Upon the occurrence and during the continuation of an Event of Default,
the Administrative Agent shall, upon the request and direction of the Required
Lenders, by written notice to the Credit Parties take any of the following
actions:
(i) Termination of Commitments. Declare the Commitments
terminated whereupon the Commitments shall be immediately terminated.
(ii) Acceleration. Declare the unpaid principal of and any
accrued interest in respect of all Revolving Loans, any reimbursement
obligations arising from drawings under Letters of Credit and any and
all other indebtedness or obligations of any and every kind owing by
the Credit Parties to the Administrative Agent and/or any of the
Lenders hereunder to be due whereupon the same shall be immediately due
and payable without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by each of the Credit Parties.
(iii) Cash Collateral. Direct the Borrower to pay (and the
Borrower agrees that upon receipt of such notice, or upon the
occurrence of an Event of Default under Section 9.1(f), it will
immediately pay) to the Administrative Agent additional cash, to be
held by the Administrative Agent, for the benefit of the Lenders, in a
cash collateral account as additional security for the LOC Obligations
in respect of subsequent drawings under all then outstanding Letters of
Credit in an amount equal to the maximum aggregate amount which may be
drawn under all Letters of Credits then outstanding.
(iv) Enforcement of Rights. Enforce any and all rights and
interests created and existing under the Credit Documents and all
rights of set-off.
Notwithstanding the foregoing, if an Event of Default specified in Section
9.1(f) shall occur, then the Commitments shall automatically terminate and all
Revolving Loans, all reimbursement obligations arising from drawings under
Letters of Credit, all accrued interest in respect thereof, all accrued and
unpaid Fees and other indebtedness or obligations owing to the Administrative
Agent and/or any of the Lenders hereunder automatically shall immediately become
due and payable without presentment, demand, protest or the giving of any notice
or other action by the Administrative Agent or the Lenders, all of which are
hereby waived by the Credit Parties.
74
83
SECTION 10
AGENCY PROVISIONS
10.1 Appointment.
Each Lender hereby designates and appoints NationsBank, N.A. as
administrative agent (in such capacity, the "Administrative Agent") of such
Lender to act as specified herein and the other Credit Documents, and each such
Lender hereby authorizes the Administrative Agent as the Administrative Agent
for such Lender, to take such action on its behalf under the provisions of this
Credit Agreement and the other Credit Documents and to exercise such powers and
perform such duties as are expressly delegated by the terms hereof and of the
other Credit Documents, together with such other powers as are reasonably
incidental thereto. Each Lender further directs and authorizes the
Administrative Agent to execute releases (or similar agreements) to give effect
to the provisions of this Credit Agreement and the other Credit Documents,
including specifically, without limitation, in connection with a Divestiture
consented to or permitted pursuant the provisions of Section 8.3 hereof or a
sale, lease, transfer or other disposition of Property not prohibited by this
Credit Agreement. Notwithstanding any provision to the contrary elsewhere herein
and in the other Credit Documents, the Administrative Agent shall not have any
duties or responsibilities, except those expressly set forth herein and therein,
or any fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Credit Agreement or any of the other Credit Documents, or shall
otherwise exist against the Administrative Agent. The provisions of this Section
are solely for the benefit of the Administrative Agent and the Lenders and none
of the Credit Parties shall have any rights as a third party beneficiary of the
provisions hereof (other than as set forth in the second sentence hereof). In
performing its functions and duties under this Credit Agreement and the other
Credit Documents, the Administrative Agent shall act solely as Administrative
Agent of the Lenders and does not assume and shall not be deemed to have assumed
any obligation or relationship of agency or trust with or for any Credit Party
or any of their respective Affiliates.
10.2 Delegation of Duties.
The Administrative Agent may execute any of its duties hereunder or
under the other Credit Documents by or through agents or attorneys-in-fact and
shall be entitled to advice of counsel concerning all matters pertaining to such
duties. The Administrative Agent shall not be responsible for the negligence or
misconduct of any agents or attorneys-in-fact selected by it with reasonable
care.
10.3 Exculpatory Provisions.
The Administrative Agent and its officers, directors, employees,
agents, attorneys-in-fact or affiliates shall not be (i) liable for any action
lawfully taken or omitted to be taken by it or such Person under or in
connection herewith or in connection with any of the other Credit Documents
(except for its or such Person's own gross negligence or willful misconduct), or
(ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by any
75
84
of the Credit Parties contained herein or in any of the other Credit Documents
or in any certificate, report, document, financial statement or other written or
oral statement referred to or provided for in, or received by the Administrative
Agent under or in connection herewith or in connection with the other Credit
Documents, or enforceability or sufficiency therefor of any of the other Credit
Documents, or for any failure of any Credit Party to perform its obligations
hereunder or thereunder. The Administrative Agent shall not be responsible to
any Lender for the effectiveness, genuineness, validity, enforceability,
collectability or sufficiency of this Credit Agreement, or any of the other
Credit Documents or for any representations, warranties, recitals or statements
made herein or therein or made by the Borrower or any Credit Party in any
written or oral statement or in any financial or other statements, instruments,
reports, certificates or any other documents in connection herewith or therewith
furnished or made by the Administrative Agent to the Lenders or by or on behalf
of the Credit Parties to the Administrative Agent or any Lender or be required
to ascertain or inquire as to the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained herein or therein or
as to the use of the proceeds of the Revolving Loans or the use of the Letters
of Credit or of the existence or possible existence of any Default or Event of
Default or to inspect the properties, books or records of the Credit Parties or
any of their respective Affiliates.
10.4 Reliance on Communications.
The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to any of the Credit Parties, independent accountants and
other experts selected by the Administrative Agent with reasonable care). The
Administrative Agent may deem and treat the Lenders as the owners of their
respective interests hereunder for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent in accordance with Section 11.3(b) hereof. The
Administrative Agent shall be fully justified in failing or refusing to take any
action under this Credit Agreement or under any of the other Credit Documents
unless it shall first receive such advice or concurrence of the Required Lenders
as it deems appropriate or it shall first be indemnified to its satisfaction by
the Lenders against any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action. The Administrative
Agent shall in all cases be fully protected in acting, or in refraining from
acting, hereunder or under any of the other Credit Documents in accordance with
a request of the Required Lenders (or to the extent specifically provided in
Section 11.6, all the Lenders) and such request and any action taken or failure
to act pursuant thereto shall be binding upon all the Lenders (including their
successors and assigns).
10.5 Notice of Default.
The Administrative Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless the
Administrative Agent has received notice from a Lender or a Credit Party
referring to the Credit Document, describing such Default or Event of
76
85
Default and stating that such notice is a "notice of default." In the event that
the Administrative Agent receives such a notice, the Administrative Agent shall
give prompt notice thereof to the Lenders. The Administrative Agent shall take
such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders.
10.6 Non-Reliance on Administrative Agent and Other Lenders.
Each Lender expressly acknowledges that each of the Administrative
Agent and its officers, directors, employees, Administrative Agents,
attorneys-in-fact or affiliates has not made any representations or warranties
to it and that no act by the Administrative Agent or any affiliate thereof
hereinafter taken, including any review of the affairs of any Credit Party or
any of their respective Affiliates, shall be deemed to constitute any
representation or warranty by the Administrative Agent to any Lender. Each
Lender represents to the Administrative Agent that it has, independently and
without reliance upon the Administrative Agent or any other Lender, and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, assets, operations, property,
financial and other conditions, prospects and creditworthiness of the Borrower,
the other Credit Parties or their respective Affiliates and made its own
decision to make its Revolving Loans hereunder and enter into this Credit
Agreement. Each Lender also represents that it will, independently and without
reliance upon the Administrative Agent or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in taking or not taking
action under this Credit Agreement, and to make such investigation as it deems
necessary to inform itself as to the business, assets, operations, property,
financial and other conditions, prospects and creditworthiness of the Borrower,
the other Credit Parties and their respective Affiliates. Except for notices,
reports and other documents expressly required to be furnished to the Lenders by
the Administrative Agent hereunder, the Administrative Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, assets, property, financial or
other conditions, prospects or creditworthiness of the Borrower, the other
Credit Parties or any of their respective Affiliates which may come into the
possession of the Administrative Agent or any of its officers, directors,
employees, Administrative Agents, attorneys-in-fact or affiliates.
10.7 Indemnification.
The Lenders agree to indemnify the Administrative Agent in its capacity
as such (to the extent not reimbursed by the Borrower and without limiting the
obligation of the Borrower to do so), ratably according to their respective
Commitments (or if the Commitments have expired or been terminated, in
accordance with the respective principal amounts of outstanding Revolving Loans
and Participation Interests of the Lenders), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever which may at any time
(including without limitation at any time following the final payment of all of
the obligations of the Borrower hereunder and under the other Credit Documents)
be imposed on, incurred by or asserted against the Administrative Agent in its
capacity as such in any way relating to or arising out of this Credit Agreement
or the other Credit Documents or any
77
86
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the
Administrative Agent under or in connection with any of the foregoing; provided
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the gross negligence or willful
misconduct of the Administrative Agent. If any indemnity furnished to the
Administrative Agent for any purpose shall, in the opinion of the Administrative
Agent, be insufficient or become impaired, the Administrative Agent may call for
additional indemnity and cease, or not commence, to do the acts indemnified
against until such additional indemnity is furnished. The agreements in this
Section shall survive the repayment of the Revolving Loans, LOC Obligations and
other obligations under the Credit Documents and the termination of the
Commitments hereunder.
10.8 Administrative Agent in its Individual Capacity.
The Administrative Agent and its affiliates may make loans to, accept
deposits from and generally engage in any kind of business with the Borrower,
its Subsidiaries or their respective Affiliates as though the Administrative
Agent were not the Administrative Agent hereunder. With respect to the Revolving
Loans made by and all obligations of the Borrower hereunder and under the other
Credit Documents, the Administrative Agent shall have the same rights and powers
under this Credit Agreement as any Lender and may exercise the same as though it
were not the Administrative Agent, and the terms "Lender" and "Lenders" shall
include the Administrative Agent in its individual capacity.
10.9 Successor Administrative Agent.
The Administrative Agent may, at any time, resign upon 20 days' written
notice to the Lenders, and may be removed, upon show of cause, by the Required
Lenders upon 30 days' written notice to the Administrative Agent. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint a
successor Administrative Agent. If no successor Administrative Agent shall have
been so appointed by the Required Lenders, and shall have accepted such
appointment, within 30 days after the notice of resignation or notice of
removal, as appropriate, then the retiring Administrative Agent shall select a
successor Administrative Agent provided such successor is a Lender hereunder or
a commercial bank organized under the laws of the United States of America or of
any State thereof and has a combined capital and surplus of at least
$400,000,000. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Administrative Agent, and the retiring Administrative Agent
shall be discharged from its duties and obligations as Administrative Agent, as
appropriate, under this Credit Agreement and the other Credit Documents and the
provisions of this Section 10.9 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Administrative Agent under this
Credit Agreement.
78
87
SECTION 11
MISCELLANEOUS
11.1 Notices.
Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (i) when
delivered, (ii) when transmitted via telecopy (or other facsimile device) to the
number set out below, (iii) the day following the day on which the same has been
delivered prepaid to a reputable national overnight air courier service, or (iv)
the third Business Day following the day on which the same is sent by certified
or registered mail, postage prepaid, in each case to the respective parties at
the address, in the case of the Borrower, Guarantors and the Administrative
Agent, set forth below, and, in the case of the Lenders, set forth on Schedule
11.1, or at such other address as such party may specify by written notice to
the other parties hereto:
if to the Borrower or the Guarantors:
Railworks Corporation
0000 Xxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
if to the Administrative Agent:
NationsBank, N.A.
000 X. Xxxxx Xxxxxx
Xxxxxxxxxxxx Center, 00xx Xxxxx
XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxxx Xxxxxxx
Agency Services
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
79
88
with a copy to:
NationsBank, N.A.
00 Xxxxx Xxxxxx
Xxxxxxxxx Xxxxx
MD4-302-16-01
Baltimore, MD 21202-1435
Attn: Xxxxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
11.2 Right of Set-Off.
In addition to any rights now or hereafter granted under applicable law
or otherwise, and not by way of limitation of any such rights, upon the
occurrence of an Event of Default, each Lender is authorized at any time and
from time to time, without presentment, demand, protest or other notice of any
kind (all of which rights being hereby expressly waived), to set-off and to
appropriate and apply any and all deposits (general or special) and any other
indebtedness at any time held or owing by such Lender (including, without
limitation branches, agencies or Affiliates of such Lender wherever located) to
or for the credit or the account of any Credit Party against obligations and
liabilities of such Person to such Lender hereunder, under the Notes, the other
Credit Documents or otherwise, irrespective of whether such Lender shall have
made any demand hereunder and although such obligations, liabilities or claims,
or any of them, may be contingent or unmatured, and any such set-off shall be
deemed to have been made immediately upon the occurrence of an Event of Default
even though such charge is made or entered on the books of such Lender
subsequent thereto. Any Person purchasing a participation in the Revolving Loans
and Commitments hereunder pursuant to Section 3.14 or Section 11.3(d) may
exercise all rights of set-off with respect to its participation interest as
fully as if such Person were a Lender hereunder.
11.3 Benefit of Agreement.
(a) Generally. This Credit Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; provided that none of the Credit Parties may
assign or transfer any of its interests without prior written consent of the
Lenders; provided further that the rights of each Lender to transfer, assign or
grant participations in its rights and/or obligations hereunder shall be limited
as set forth in this Section 11.3, provided however that nothing herein shall
prevent or prohibit any Lender from (i) pledging its Revolving Loans hereunder
to a Federal Reserve Bank in support of borrowings made by such Lender from such
Federal Reserve Bank, or (ii) granting assignments or selling participations in
such Lender's Revolving Loans and/or Commitments hereunder to its parent company
and/or to any Affiliate or Subsidiary of such Lender.
80
89
(b) Assignments. Each Lender may assign all or a portion of its
rights and obligations hereunder (including, without limitation, all or a
portion of its Commitments or its Revolving Loans), pursuant to an assignment
agreement substantially in the form of Schedule 11.3(b), to (i) a Lender, (ii)
an affiliate of a Lender or (iii) any bank, financial institution, commercial
lender or institutional investor reasonably acceptable to the Administrative
Agent and, so long as no Default or Event of Default has occurred and is
continuing, the Borrower (the consent of the Borrower shall not be unreasonably
withheld or delayed); provided that (i) any such assignment (other than any
assignment to an existing Lender) shall be in a minimum aggregate amount of
$5,000,000 (or, if less, the remaining amount of the Commitment being assigned
by such Lender) of the Commitments and in integral multiples of $1,000,000 above
such amount and (ii) each such assignment shall be of a constant, not varying,
percentage of all such Lender's rights and obligations under this Credit
Agreement. Any assignment hereunder shall be effective upon delivery to the
Administrative Agent of written notice of the assignment together with a
transfer fee of $3,500 payable to the Administrative Agent for its own account
from and after the later of (i) the effective date specified in the applicable
assignment agreement and (ii) the date of recording of such assignment in the
Register pursuant to the terms of subsection (c) below. The assigning Lender
will give prompt notice to the Administrative Agent and the Borrower of any such
assignment. Upon the effectiveness of any such assignment (and after notice to,
and (to the extent required pursuant to the terms hereof), with the consent of,
the Borrower as provided herein), the assignee shall become a "Lender" for all
purposes of this Credit Agreement and the other Credit Documents and, to the
extent of such assignment, the assigning Lender shall be relieved of its
obligations hereunder to the extent of the Revolving Loans and Commitment
components being assigned. Along such lines the Borrower agrees that upon notice
of any such assignment and surrender of the appropriate Note or Notes, it will
promptly provide to the assigning Lender and to the assignee separate promissory
notes in the amount of their respective interests substantially in the form of
the original Note (but with notation thereon that it is given in substitution
for and replacement of the original Note or any replacement notes thereof). By
executing and delivering an assignment agreement in accordance with this Section
11.3(b), the assigning Lender thereunder and the assignee thereunder shall be
deemed to confirm to and agree with each other and the other parties hereto as
follows: (i) such assigning Lender warrants that it is the legal and beneficial
owner of the interest being assigned thereby free and clear of any adverse
claim; (ii) except as set forth in clause (i) above, such assigning Lender makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Credit Agreement, any of the other Credit Documents or any other instrument or
document furnished pursuant hereto or thereto, or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Credit
Agreement, any of the other Credit Documents or any other instrument or document
furnished pursuant hereto or thereto or the financial condition of any Credit
Party or any of their respective Affiliates or the performance or observance by
any Credit Party of any of its obligations under this Credit Agreement, any of
the other Credit Documents or any other instrument or document furnished
pursuant hereto or thereto; (iii) such assignee represents and warrants that it
is legally authorized to enter into such assignment agreement; (iv) such
assignee confirms that it has received a copy of this Credit Agreement, the
other Credit Documents and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
assignment agreement; (v) such assignee will independently and without
81
90
reliance upon the Administrative Agent, such assigning Lender or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Credit Agreement and the other Credit Documents; (vi) such
assignee appoints and authorizes the Administrative Agent to take such action on
its behalf and to exercise such powers under this Credit Agreement or any other
Credit Document as are delegated to the Administrative Agent by the terms hereof
or thereof, together with such powers as are reasonably incidental thereto; and
(vii) such assignee agrees that it will perform in accordance with their terms
all the obligations which by the terms of this Credit Agreement and the other
Credit Documents are required to be performed by it as a Lender.
(c) Maintenance of Register. The Administrative Agent shall
maintain at one of its offices in Charlotte, North Carolina a copy of each
Lender assignment agreement delivered to it in accordance with the terms of
subsection (b) above and a register for the recordation of the identity of the
principal amount, type and Interest Period of each Revolving Loan outstanding
hereunder, the names, addresses and the Commitments of the Lenders pursuant to
the terms hereof from time to time (the "Register"). The Administrative Agent
will make reasonable efforts to maintain the accuracy of the Register and to
promptly update the Register from time to time, as necessary. The entries in the
Register shall be conclusive in the absence of manifest error and the Borrower,
the Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Credit Agreement. The Register shall be available for
inspection by the Borrower and each Lender, at any reasonable time and from time
to time upon reasonable prior notice.
(d) Participations. Each Lender may sell, transfer, grant or
assign participations in all or a portion of such Lender's rights, obligations
or rights and obligations hereunder (including all or a portion of its
Commitments or its Revolving Loans); provided that (i) such selling Lender shall
remain a "Lender" for all purposes under this Credit Agreement (such selling
Lender's obligations under the Credit Documents remaining unchanged) and the
participant shall not constitute a Lender hereunder, (ii) no such participant
shall have, or be granted, rights to approve any amendment or waiver relating to
this Credit Agreement or the other Credit Documents except to the extent any
such amendment or waiver would (A) reduce the principal of or rate of interest
on or Fees in respect of any Revolving Loans in which the participant is
participating, (B) postpone the date fixed for any payment of principal
(including extension of the Termination Date or the date of any mandatory
prepayment), interest or Fees in which the participant is participating, (C)
except as the result of or in connection with a dissolution, merger or
disposition of a Subsidiary permitted under Section 8.3, release the Borrower or
substantially all of the Guarantors from its or their obligations under the
Credit Documents, or (D) except as the result of or in connection with a
Divestiture permitted under Section 8.3(b), release all or substantially all of
the collateral, and (iii) sub- participations by the participant (except to an
affiliate, parent company or affiliate of a parent company of the participant)
shall be prohibited. In the case of any such participation, the participant
shall not have any rights under this Credit Agreement or the other Credit
Documents (the participant's rights against the selling Lender in respect of
such participation to be those set forth in the participation agreement with
such Lender creating such participation) and all amounts payable by the Borrower
hereunder shall be
82
91
determined as if such Lender had not sold such participation, provided, however,
that such participant shall be entitled to receive additional amounts under
Sections 3.6, 3.9, 3.10, 3.11 and 11.2 on the same basis as if it were a Lender.
11.4 No Waiver; Remedies Cumulative.
No failure or delay on the part of the Administrative Agent or any
Lender in exercising any right, power or privilege hereunder or under any other
Credit Document and no course of dealing between the Administrative Agent or any
Lender and any of the Credit Parties shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power or privilege hereunder
or under any other Credit Document preclude any other or further exercise
thereof or the exercise of any other right, power or privilege hereunder or
thereunder. The rights and remedies provided herein are cumulative and not
exclusive of any rights or remedies which the Administrative Agent or any Lender
would otherwise have. No notice to or demand on any Credit Party in any case
shall entitle the Borrower or any other Credit Party to any other or further
notice or demand in similar or other circumstances or constitute a waiver of the
rights of the Administrative Agent or the Lenders to any other or further action
in any circumstances without notice or demand.
11.5 Payment of Expenses, etc.
The Borrower agrees to: (i) pay all reasonable out-of-pocket costs and
expenses (A) of the Administrative Agent in connection with the negotiation,
preparation, execution and delivery and administration of this Credit Agreement
and the other Credit Documents and the documents and instruments referred to
therein (including, without limitation, the reasonable fees and expenses of
Xxxxx & Xxx Xxxxx, PLLC, special counsel to the Administrative Agent) and any
amendment, waiver or consent relating hereto and thereto including, but not
limited to, any such amendments, waivers or consents resulting from or related
to any work-out, renegotiation or restructure relating to the performance by the
Credit Parties under this Credit Agreement and (B) of the Administrative 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 Administrative Agent and each of the Lenders); (ii) permit the
Administrative Agent to perform inventory and accounts receivable field audits
at the Borrower's expense, provided that unless an Event of Default shall be in
existence the Borrower's obligation to reimburse the Administrative Agent for
such field audits shall be limited to one such field audit each fiscal year;
(iii) pay and hold each of the Lenders harmless from and against any and all
present and future stamp and other similar taxes with respect to the foregoing
matters and save each of the Lenders harmless from and against any and all
liabilities with respect to or resulting from any delay or omission (other than
to the extent attributable to such Lender) to pay such taxes; and (iv) indemnify
each Lender, its officers, directors, employees, representatives and
Administrative Agents from and hold each of them harmless against any and all
losses, liabilities, claims, damages or expenses incurred by any of them as a
result of, or arising out of, or in any way related to, or by reason of (A) any
investigation, litigation or other proceeding (whether or not any Lender is a
party thereto) related to the entering into and/or performance of any
83
92
Credit Document or the use of proceeds of any Revolving Loans (including other
Extensions of Credit) hereunder or the consummation of any other transactions
contemplated in any Credit Document, including, without limitation, the
reasonable fees and disbursements of counsel incurred in connection with any
such investigation, litigation or other proceeding or (B) the presence or
Release of any Materials of Environmental Concern at, under or from any Property
owned, operated or leased by the Borrower or any of its Subsidiaries, or the
failure by the Borrower or any of its Subsidiaries to comply with any
Environmental Law (but excluding, in the case of either of clause (A) or (B)
above, any such losses, liabilities, claims, damages or expenses to the extent
incurred by reason of gross negligence or willful misconduct on the part of the
Person to be indemnified).
11.6 Amendments, Waivers and Consents.
Neither this Credit Agreement nor any other Credit Document nor any of
the terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is in
writing entered into by, or approved in writing by, the Required Lenders and the
Borrower, provided, however, that:
(a) without the consent of each Lender affected thereby,
neither this Credit Agreement nor any of the other Credit Documents may
be amended to
(i) except as contemplated by Section 2.1(g)
hereof, extend the final maturity of any Revolving Loan or the
time of payment of any reimbursement obligation, or any
portion thereof, arising from drawings under Letters of
Credit, or any portion thereof,
(ii) reduce the rate or extend the time of
payment of interest thereon or Fees hereunder (other than as a
result of waiving the applicability of any increase in
interest rates or Fees after the occurrence of an Event of
Default or on account of a failure to deliver financial
statements on a timely basis),
(iii) reduce or waive the principal amount of any
Revolving Loan or of any reimbursement obligation, or any
portion thereof, arising from drawings under Letters of
Credit,
(iv) increase the Commitment of a Lender over the
amount thereof in effect (it being understood and agreed that
a waiver of any Default or Event of Default shall not
constitute an increase in the Commitment of any Lender),
(v) except as the result of or in connection
with a dissolution, merger or disposition of a Subsidiary
permitted under Section 8.3, release the Borrower or
substantially all of the Guarantors from its or their
obligations under the Credit Documents,
84
93
(vi) except as the result of or in connection
with a Divestiture permitted under Section 8.3(b), release all
or substantially all of the collateral,
(vii) amend, modify or waive any provision of this
Section 11.6 or Section 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.13,
3.14, 3.15, 9.1(a), 11.2, 11.3, 11.5 or 11.9,
(viii) reduce any percentage specified in, or
otherwise modify, the definition of Required Lenders, or
(ix) consent to the assignment or transfer by the
Borrower (or another Credit Party) of any of its rights and
obligations under (or in respect of) the Credit Documents
except as permitted thereby;
(b) without the consent of the Administrative Agent, no
provision of Section 10 may be amended;
(c) without the consent of the Issuing Lender, no
provision of Section 2.2 may be amended.
Notwithstanding the fact that the consent of all the Lenders is
required in certain circumstances as set forth above, (x) each Lender is
entitled to vote as such Lender sees fit on any bankruptcy reorganization plan
that affects the Revolving Loans, and each Lender acknowledges that the
provisions of Section 1126(c) of the Bankruptcy Code supersedes the unanimous
consent provisions set forth herein and (y) the Required Lenders may consent to
allow a Credit Party to use cash collateral in the context of a bankruptcy or
insolvency proceeding.
11.7 Counterparts.
This Credit Agreement may be executed in any number of counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall constitute one and the same instrument. It shall not be necessary in
making proof of this Credit Agreement to produce or account for more than one
such counterpart.
11.8 Headings.
The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Credit Agreement.
11.9 Survival.
All indemnities set forth herein, including, without limitation, in
Section 2.2(i), 3.9, 3.11, 10.7 or 11.5 shall survive the execution and delivery
of this Credit Agreement, the making of the Revolving Loans, the issuance of the
Letters of Credit, the repayment of the Revolving Loans, LOC Obligations
85
94
and other obligations under the Credit Documents and the termination of the
Commitments hereunder, and all representations and warranties made by the Credit
Parties herein shall survive delivery of the Notes and the making of the
Revolving Loans hereunder.
11.10 Governing Law; Submission to Jurisdiction; Venue.
(a) THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED
BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.
(b) 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, and, by execution and delivery of this Credit
Agreement, each of the Credit Parties hereby irrevocably accepts for itself and
in respect of its property, generally and unconditionally, the nonexclusive
jurisdiction of such courts. Each of the Credit Parties further irrevocably
consents to the service of process out of any of the aforementioned courts in
any such action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to it at the address set out for notices
pursuant to Section 11.1, such service to become effective three (3) days after
such mailing. Nothing herein shall affect the right of the Administrative Agent
to serve process in any other manner permitted by law or to commence legal
proceedings or to otherwise proceed against any Credit Party in any other
jurisdiction.
(c) Each of the Credit Parties hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of any of
the aforesaid actions or proceedings arising out of or in connection with this
Credit Agreement or any other Credit Document brought in the courts referred to
in subsection (a) hereof and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding brought in
any such court has been brought in an inconvenient forum.
(d) TO THE EXTENT PERMITTED BY LAW, EACH OF THE ADMINISTRATIVE
AGENT, THE LENDERS, THE BORROWER AND THE OTHER CREDIT PARTIES HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER CREDIT
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY.
11.11 Severability.
If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
86
95
11.12 Entirety.
This Credit Agreement together with the other Credit Documents
represent the entire agreement of the parties hereto and thereto, and supersede
all prior agreements and understandings, oral or written, if any, including any
commitment letters or correspondence relating to the Credit Documents or the
transactions contemplated herein and therein.
11.13 Binding Effect; Termination.
(a) This Credit Agreement shall become effective at such time on
or after the Closing Date when it shall have been executed by the Borrower, the
Guarantors and the Administrative Agent, and the Administrative Agent shall have
received copies hereof (telefaxed or otherwise) which, when taken together, bear
the signatures of each Lender, and thereafter this Credit Agreement shall be
binding upon and inure to the benefit of the Borrower, the Guarantors, the
Administrative Agent and each Lender and their respective successors and
assigns.
(b) The term of this Credit Agreement shall commence on the
effective date pursuant to subsection (a) above and shall continue until no
Revolving Loans, LOC Obligations or any other amounts payable hereunder or under
any of the other Credit Documents shall remain outstanding and until all of the
Commitments hereunder shall have expired or been terminated.
11.14 Confidentiality.
The Administrative Agent and the Lenders agree to keep confidential
(and to cause their respective affiliates, officers, directors, employees,
agents and representatives to keep confidential) all information, materials and
documents furnished to the Administrative Agent or any such Lender by or on
behalf of any Credit Party (whether before or after the Closing Date) which
relates to the Borrower or any of its Subsidiaries (the "Information").
Notwithstanding the foregoing, the Administrative Agent and each Lender shall be
permitted to disclose Information (i) to its affiliates, officers, directors,
employees, agents and representatives in connection with its participation in
any of the transactions evidenced by this Credit Agreement or any other Credit
Documents or the administration of this Credit Agreement or any other Credit
Documents, subject to the provisions of this Section 11.14; (ii) to the extent
required by applicable laws and regulations or by any subpoena or similar legal
process, or requested by any Governmental Authority; (iii) to the extent such
Information (A) becomes publicly available other than as a result of a breach of
this Credit Agreement or any agreement entered into pursuant to clause (iv)
below, (B) becomes available to the Administrative Agent or such Lender on a
non-confidential basis from a source other than a Credit Party or (C) was
available to the Administrative Agent or such Lender on a non-confidential basis
prior to its disclosure to the Administrative Agent or such Lender by a Credit
Party; (iv) to any assignee or participant (or prospective assignee or
participant) so long as such assignee or participant (or prospective assignee or
participant) first specifically agrees in a writing furnished to and for the
benefit of the Credit Parties to be bound by the terms of this Section 11.14; or
(v) to the extent that the Borrower shall have consented in writing to such
disclosure. Nothing set forth in this Section 11.14
87
96
shall obligate the Administrative Agent or any Lender to return any materials
furnished by the Credit Parties.
11.15 Source of Funds.
Each of the Lenders hereby represents and warrants to the Borrower that
at least one of the following statements is an accurate representation as to the
source of funds to be used by such Lender in connection with the financing
hereunder:
(a) no part of such funds constitutes assets allocated to
any separate account maintained by such Lender in which any employee
benefit plan (or its related trust) has any interest;
(b) to the extent that any part of such funds constitutes
assets allocated to any separate account maintained by such Lender,
such Lender has disclosed to the Borrower the name of each employee
benefit plan whose assets in such account exceed 10% of the total
assets of such account as of the date of such purchase (and, for
purposes of this subsection (b), all employee benefit plans maintained
by the same employer or employee organization are deemed to be a single
plan);
(c) to the extent that any part of such funds constitutes
assets of an insurance company's general account, such insurance
company has complied with all of the requirements of the regulations
issued under Section 401(c)(1)(A) of ERISA; or
(d) such funds constitute assets of one or more specific
benefit plans which such Lender has identified in writing to the
Borrower.
As used in this Section 11.15, the terms "employee benefit plan" and "separate
account" shall have the respective meanings assigned to such terms in Section 3
of ERISA.
11.16 Conflict.
To the extent that there is a conflict or inconsistency between any
provision hereof, on the one hand, and any provision of any Credit Document, on
the other hand, this Credit Agreement shall control.
[Signature Page to Follow]
88
97
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Credit Agreement to be duly executed and delivered as of the date first
above written.
BORROWER: RAILWORKS CORPORATION,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Executive Vice President and
Chief Financial Officer
GUARANTORS: ALPHA-KEYSTONE ENGINEERING, INC.,
a Pennsylvania corporation
ANNEX RAILROAD BUILDERS, INC.,
an Indiana corporation
XXXXXXXX HOLDINGS INC.,
a Delaware corporation
COMTRAK CONSTRUCTION, INC.,
a Georgia corporation
XXXXXX BROTHERS, INC.,
a Washington corporation
CPI CONCRETE PRODUCTS INCORPORATED,
a Tennessee corporation
H.P. XXXXXXXX INC.,
a Pennsylvania corporation
XXXXXXX RAILROAD BUILDERS, INC.,
a Pennsylvania corporation
X.X. XXXXXXXX & COMPANY, INC.,
a New York corporation
MERIT RAILROAD CONTRACTORS, INC.,
a Missouri corporation
MIDWEST CONSTRUCTION SERVICES, INC.,
an Indiana corporation
MINNESOTA RAILROAD SERVICE, INC.,
a Tennessee corporation
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Executive Vice President of each
of the foregoing Guarantors
1
98
NEW ENGLAND RAILROAD CONSTRUCTION CO., INC.,
a Connecticut corporation
NORTHERN RAIL SERVICE AND SUPPLY COMPANY, INC.,
a Michigan corporation
R. & M. B. RAIL CO., INC.,
an Indiana corporation
RAILCORP, INC.,
an Ohio corporation
RAILROAD SERVICE, INC.,
a Nevada corporation
RAILROAD SPECIALTIES, INC.,
an Indiana corporation
SOUTHERN INDIANA WOOD PRESERVING CO., INC.,
an Indiana corporation
U.S. TRACKWORKS, INC.,
a Michigan corporation
U.S. RAILWAY SUPPLY, INC.,
an Indiana corporation
WM. X. XXXXX CONSTRUCTION CO., INC.,
a Texas corporation
WM. X. XXXXX RERAILING SERVICES, INC.,
a Texas corporation
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Executive Vice President of each
of the foregoing Guarantors
LENDERS: NATIONSBANK, N.A.,
individually in its capacity as a
Lender and in its capacity as Administrative
Agent
By: /s/ Xxxxxx Xxxxxxx
---------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Senior Vice President
2
