--------------------------------------------------------------------------------
$180,000,000
CREDIT AGREEMENT
among
RIGHT MANAGEMENT CONSULTANTS, INC.,
as Borrower,
ITS SUBSIDIARIES
FROM TIME TO TIME PARTIES HERETO,
as Subsidiary Guarantors,
THE LENDERS PARTIES HERETO,
UBS WARBURG LLC,
as Syndication Agent,
FLEET NATIONAL BANK,
as Syndication Agent,
SUNTRUST BANK,
as Syndication Agent,
BANK OF AMERICA, N.A.,
as Documentation Agent
and
FIRST UNION NATIONAL BANK,
as Administrative Agent
Dated as of March 22, 2002
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FIRST UNION SECURITIES, INC., d/b/a WACHOVIA SECURITIES
as Sole Lead Arranger and Book Manager
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS............................................................................................1
Section 1.1 Defined Terms.......................................................................1
Section 1.2 Other Definitional Provisions......................................................19
Section 1.3 Accounting Terms...................................................................19
ARTICLE II THE LOANS; AMOUNT AND TERMS..........................................................................20
Section 2.1 Revolving Loans....................................................................20
Section 2.2 Term Loans.........................................................................21
Section 2.3 Swingline Loan Subfacility.........................................................22
Section 2.4 Letter of Credit Subfacility.......................................................24
Section 2.5 Fees...............................................................................26
Section 2.6 Commitment Reductions..............................................................27
Section 2.7 Prepayments........................................................................28
Section 2.8 Minimum Principal Amount of Tranches...............................................29
Section 2.9 Default Rate and Payment Dates.....................................................29
Section 2.10 Conversion Options.................................................................30
Section 2.11 Computation of Interest and Fees...................................................30
Section 2.12 Pro Rata Treatment and Payments....................................................31
Section 2.13 Non-Receipt of Funds by the Administrative Agent...................................31
Section 2.14 Inability to Determine Interest Rate...............................................32
Section 2.15 Illegality.........................................................................32
Section 2.16 Requirements of Law................................................................33
Section 2.17 Indemnity..........................................................................34
Section 2.18 Taxes..............................................................................34
Section 2.19 Indemnification; Nature of Issuing Lender's Duties.................................36
ARTICLE III REPRESENTATIONS AND WARRANTIES......................................................................37
Section 3.1 Financial Condition................................................................37
Section 3.2 No Change..........................................................................37
Section 3.3 Corporate Existence................................................................37
Section 3.4 Corporate Power; Authorization; Enforceable Obligations............................37
Section 3.5 Compliance with Laws; No Conflict; No Default......................................38
Section 3.6 No Material Litigation.............................................................38
Section 3.7 Investment Company Act.............................................................38
Section 3.8 Margin Regulations.................................................................38
Section 3.9 ERISA..............................................................................39
Section 3.10 Environmental Matters..............................................................39
Section 3.11 Purpose of Loans...................................................................40
Section 3.12 Subsidiaries.......................................................................40
Section 3.13 Ownership..........................................................................40
Section 3.14 Indebtedness.......................................................................40
Section 3.15 Taxes..............................................................................40
Section 3.16 Intellectual Property Rights.......................................................41
Section 3.17 Solvency...........................................................................41
Section 3.18 Location of Collateral.............................................................41
Section 3.19 No Burdensome Restrictions.........................................................41
Section 3.20 Labor Matters......................................................................42
Section 3.21 Accuracy and Completeness of Information...........................................42
Section 3.22 Representations and Warranties from Acquisition Documents..........................42
Section 3.23 Material Contracts.................................................................42
ARTICLE IV CONDITIONS PRECEDENT.................................................................................42
Section 4.1 Conditions to Closing Date and Initial Revolving Loans and Term Loans..............42
Section 4.2 Conditions to All Extensions of Credit.............................................47
ARTICLE V AFFIRMATIVE COVENANTS.................................................................................48
Section 5.1 Financial Statements...............................................................48
Section 5.2 Certificates; Other Information....................................................49
Section 5.3 Payment of Obligations.............................................................50
Section 5.4 Conduct of Business and Maintenance of Existence...................................50
Section 5.5 Maintenance of Property; Insurance.................................................50
Section 5.6 Inspection of Property; Books and Records; Discussions.............................51
Section 5.7 Notices............................................................................51
Section 5.8 Environmental Laws.................................................................52
Section 5.9 Financial Covenants................................................................52
Section 5.10 Additional Subsidiaries............................................................53
Section 5.11 Compliance with Law................................................................53
Section 5.12 Pledged Assets.....................................................................54
Section 5.13 Delivery of Reviewed Pro Forma Balance Sheet.......................................54
Section 5.14 Covenants Regarding Patents, Trademarks and Copyrights.............................54
ARTICLE VI NEGATIVE COVENANTS...................................................................................55
Section 6.1 Indebtedness.......................................................................56
Section 6.2 Liens..............................................................................56
Section 6.3 Guaranty Obligations...............................................................57
Section 6.4 Nature of Business.................................................................57
Section 6.5 Consolidation, Merger, Sale or Purchase of Assets, etc.............................57
Section 6.6 Advances, Investments and Loans....................................................58
Section 6.7 Transactions with Affiliates.......................................................58
Section 6.8 Ownership of Subsidiaries; Restrictions............................................58
Section 6.9 Fiscal Year; Organizational Documents; Material Contracts..........................58
Section 6.10 Limitation on Restricted Actions...................................................59
Section 6.11 Restricted Payments................................................................59
Section 6.12 Prepayments of Indebtedness, etc...................................................59
Section 6.13 Sale Leasebacks....................................................................60
Section 6.14 No Further Negative Pledges........................................................60
ARTICLE VII EVENTS OF DEFAULT...................................................................................60
Section 7.1 Events of Default..................................................................60
Section 7.2 Acceleration; Remedies.............................................................62
ARTICLE VIII THE ADMINISTRATIVE AGENT...........................................................................62
Section 8.1 Appointment........................................................................62
Section 8.2 Delegation of Duties by Administrative Agent.......................................63
Section 8.3 Exculpatory Provisions for Administrative Agent....................................63
Section 8.4 Reliance by Administrative Agent...................................................63
Section 8.5 Notice of Default to Administrative Agent..........................................64
Section 8.6 Non-Reliance on Administrative Agent and Other Lenders.............................64
Section 8.7 Indemnification of Administrative Agent............................................64
Section 8.8 Administrative Agent in Its Individual Capacity....................................65
Section 8.9 Successor Administrative Agent.....................................................65
Section 8.10 Rights and Remedies to be Exercised by Agent Only..................................65
Section 8.11 Syndication and Documentation Agent................................................65
Section 8.12 Appointment of Security Trustee....................................................65
Section 8.13 Successor Security Trustee.........................................................66
Section 8.14 Protection of Security Trustee.....................................................66
ARTICLE IX MISCELLANEOUS........................................................................................66
Section 9.1 Amendments, Waivers and Release of Collateral......................................66
Section 9.2 Notices............................................................................68
Section 9.3 No Waiver; Cumulative Remedies.....................................................69
Section 9.4 Survival of Representations and Warranties.........................................69
Section 9.5 Payment of Expenses and Taxes......................................................69
Section 9.6 Successors and Assigns; Participations; Purchasing Lenders.........................69
Section 9.7 Adjustments; Set-off...............................................................70
Section 9.8 Table of Contents and Section Headings.............................................72
Section 9.9 Counterparts.......................................................................73
Section 9.10 Effectiveness......................................................................73
Section 9.11 Severability.......................................................................73
Section 9.12 Integration........................................................................73
Section 9.13 Governing Law......................................................................73
Section 9.14 Consent to Jurisdiction and Service of Process.....................................73
Section 9.15 Intentionally Omitted..............................................................74
Section 9.16 Confidentiality....................................................................74
Section 9.17 Acknowledgments....................................................................74
Section 9.18 Waivers of Jury Trial..............................................................75
ARTICLE X GUARANTY..............................................................................................75
Section 10.1 The Guaranty.......................................................................75
Section 10.2 Bankruptcy.........................................................................75
Section 10.3 Nature of Liability................................................................76
Section 10.4 Independent Obligation.............................................................76
Section 10.5 Authorization......................................................................76
Section 10.6 Reliance...........................................................................76
Section 10.7 Waiver.............................................................................77
Section 10.8 Limitation on Enforcement..........................................................77
Section 10.9 Confirmation of Payment............................................................78
Schedules
Schedule 1.1(a) Account Designation Letter
Schedule 1.1(c) Material Foreign Subsidiaries
Schedule 2.1(a) Schedule of Lenders and Commitments
Schedule 2.1(b)(i) Form of Notice of Borrowing
Schedule 2.1(e) Form of Revolving Note
Schedule 2.2(d) Form of Term Note
Schedule 2.3(f) Form of Swingline Note
Schedule 2.10 Form of Notice of Conversion/Extension
Schedule 3.6 Litigation
Schedule 3.9 ERISA
Schedule 3.10 Environmental Matters
Schedule 3.12 Subsidiaries
Schedule 3.16 Intellectual Property
Schedule 3.18(a) Location of Real Property
Schedule 3.18(b) Location of Collateral
Schedule 3.18(c) Chief Executive Offices
Schedule 3.20 Labor Matters
Schedule 3.23 Material Contracts
Schedule 4.1(b) Form of Secretary's Certificate
Schedule 4.1(j) Form of Solvency Certificate
Schedule 5.5(b) Insurance
Schedule 5.10 Form of Joinder Agreement
Schedule 6.2 Permitted Liens
Schedule 9.2 Schedule of Lenders' Lending Offices
Schedule 9.6(c) Form of Commitment Transfer Supplement
CREDIT AGREEMENT, dated as of March 22, 2002, among RIGHT MANAGEMENT
CONSULTANTS, INC., a Pennsylvania corporation (the "Borrower"), each of those
Subsidiaries of the Borrower identified as a "Guarantor" on the signature pages
hereto and such other Subsidiaries of the Borrower as may from time to time
become a party hereto (collectively, the "Subsidiary Guarantors" and the
"Guarantors"), the several banks and other financial institutions from time to
time parties to this Agreement (collectively, the "Lenders"; and individually, a
"Lender"), UBS WARBURG LLC, as Syndication Agent, FLEET NATIONAL BANK, as
Syndication Agent, SUNTRUST BANK, as Syndication Agent, BANK OF AMERICA, N.A.,
as Documentation Agent, FIRST UNION NATIONAL BANK, as administrative agent for
the Lenders hereunder (in such capacity, the "Administrative Agent" or the
"Agent") and FIRST UNION NATIONAL BANK, as security trustee for the Lenders
hereunder (in such capacity, the "Security Trustee").
W I T N E S S E T H:
WHEREAS, the Borrower has requested, and the Lenders have agreed, to
extend certain credit facilities to the Borrower on the terms and conditions set
forth herein;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, such
parties, intending to be legally bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Defined Terms.
As used in this Agreement, terms defined in the preamble to this
Agreement have the meanings therein indicated, and the following terms have the
following meanings:
"ABR Default Rate" shall have the meaning set forth in Section 2.9.
"Account Designation Letter" shall mean the Notice of Account
Designation Letter dated the Closing Date from the Borrower to the
Administrative Agent in substantially the form attached hereto as Schedule
1.1(a).
"Accounts" shall mean all of each Consolidated Party's "accounts" (as
defined in the UCC), whether now existing or existing in the future, and shall
include (whether or not otherwise included in such definitions, and without
limiting the generality thereof), all (i) accounts receivable (whether or not
specifically listed on schedules furnished to the Administrative Agent),
including, without limitation, (a) all accounts created by or arising from all
of each Consolidated Party's sales of goods or rendition of services made under
any of each Consolidated Party's trade names or styles, or through any of each
Consolidated Party's divisions and (b) all accounts owing to the Borrower from
one of its affiliated franchisees; (ii) unpaid seller's rights (including
rescission, replevin, reclamation and stopping in transit) relating to the
foregoing or arising therefrom, (iii) rights to any goods represented by any of
the foregoing, including returned or repossessed goods; (iv) reserves and credit
balances held by each Consolidated Party with respect to any such accounts
receivable or account debtors; (v) guarantees or collateral for any of the
foregoing; and (vi) insurance policies or rights relating to any of the
foregoing.
"Acquired Companies" shall mean, collectively, Atlas and Coutts.
"Acquisition" shall mean the purchase of Capital Stock contemplated by
the Acquisition Documents.
"Acquisition Agreement" shall mean that certain Share Purchase
Agreement dated as of February 28 , 2002 among Atlas, the sellers named therein,
Right Associates and the Borrower.
"Acquisition Documents" shall mean the Acquisition Agreement, including
the exhibits and schedules thereto, and all agreements, documents and
instruments executed and delivered pursuant thereto or in connection therewith.
"Additional Credit Party" shall mean each Person that becomes a
Guarantor by execution of a Joinder Agreement in accordance with Section 5.10.
"Administrative Agent" or "Agent" shall have the meaning set forth in
the first paragraph of this Agreement and any successors in such capacity.
"Affiliate" shall mean as to any Person, any other Person (excluding
any Subsidiary) which, directly or indirectly, is in control of, is controlled
by, or is under common control with, such Person. For purposes of this
definition, a Person shall be deemed to be "controlled by" a Person if such
Person possesses, directly or indirectly, power either (a) to vote 10% or more
of the securities having ordinary voting power for the election of directors of
such Person or (b) to direct or cause the direction of the management and
policies of such Person whether by contract or otherwise.
"Agreement" shall mean this Credit Agreement, as amended, modified or
supplemented from time to time in accordance with its terms.
"Alternate Base Rate" shall mean, for any day, a rate per annum equal
to the greater of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. For purposes hereof:
"Prime Rate" shall mean, at any time, the rate of interest per annum established
from time to time by First Union at its principal office in Charlotte, North
Carolina as its prime rate. Each change in the Prime Rate shall be effective as
of the opening of business on the day such change in the Prime Rate occurs. The
parties hereto acknowledge that the rate established by First Union as its Prime
Rate is an index or base rate and shall not necessarily be its lowest or best
rate charged to its customers or other banks; and "Federal Funds Effective Rate"
shall mean, for any day, the weighted average of the rates on overnight federal
funds transactions with members of the Federal Reserve System arranged by
federal funds brokers, as published on the next succeeding Business Day by the
Federal Reserve Bank of New York, or, if such rate is not so published on the
next succeeding Business Day, the average of the quotations for the day of such
transactions received by the Administrative Agent from three federal funds
brokers of recognized standing selected by it. If for any reason the
Administrative Agent shall have determined (which determination shall be
conclusive in the absence of manifest error) that it is unable to ascertain the
Federal Funds Effective Rate, for any reason, including the inability or failure
of the Administrative Agent to obtain sufficient quotations in accordance with
the terms thereof, the Alternate Base Rate shall be determined without regard to
clause (b) of the first sentence of this definition, as appropriate, until the
circumstances giving rise to such inability no longer exist. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective on the opening of business on the date of such
change.
"Alternate Base Rate Loans" shall mean Loans that bear interest at an
interest rate based on the Alternate Base Rate.
"Applicable Percentage" shall mean, for any day, the rate per annum set
forth below opposite the applicable Level then in effect, it being understood
that the Applicable Percentage for (i) Revolving Loans and Term Loans which are
Alternate Base Rate Loans shall be the percentage set forth under the column
"Alternate Base Rate Margin for Revolving Loans, Term Loans and Swingline
Loans", (ii) Revolving Loans and Term Loans which are LIBOR Rate Loans and shall
be the percentage set forth under the column "LIBOR Rate Margin for Revolving
Loans, Term Loans and Letter of Credit Fee", (iii) the Commitment Fee shall be
the percentage set forth under the column "Commitment Fee" and (iv) the Letter
of Credit Fee shall be the percentage set forth under the column "LIBOR Rate
Margin for Revolving Loans, Term Loans and Letter of Credit Fee":
2
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Alternate Base
Rate LIBOR Rate Margin for
Margin for Revolving Loans and Term
Leverage Revolving Loans, Loans and Letter of Commitment
Ratio Term Loans and Credit Fee Fee
Level Swingline Loans
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I > 2.0 to 1.0 0.75% 2.25% 0.375%
-
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II > 1.5 to 1.0 but 0.50% 2.00% 0.375%
-
< 2.0 to 1.0
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III > 1.0 to 1.0 but 0.25% 1.75% 0.375%
-
< 1.5 to 1.0
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IV < 1.0 to 1.0 0.00% 1.50% 0.375%
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The Applicable Percentage shall, in each case, be determined and
adjusted quarterly on the date three (3) Business Days after the date on which
the Administrative Agent has received from the Borrower the quarterly financial
information and certifications required to be delivered to the Administrative
Agent and the Lenders in accordance with the provisions of Sections 5.1(b) and
5.2(b) (each an "Interest Determination Date"). Such Applicable Percentage shall
be effective from such Interest Determination Date until the next such Interest
Determination Date; provided, that the initial Applicable Percentages shall be
based on Level I until the first Interest Determination Date after the fiscal
quarter ending September 30, 2002. After the Closing Date, if the Borrower shall
fail to provide the quarterly financial information and certifications in
accordance with the provisions of Sections 5.1(b) and 5.2(b), the Applicable
Percentage shall, on the date three (3) Business Days after the date by which
the Borrower was so required to provide such financial information and
certifications to the Administrative Agent and the Lenders, be based on Level I
until such time as such information and certifications are provided, whereupon
the Level shall be determined by the then current Leverage Ratio.
"Asset Disposition" shall mean the disposition of any or all of the
assets (including, without limitation, the Capital Stock of a Subsidiary or any
ownership interest in a joint venture) of any Consolidated Party whether by
sale, lease, transfer or otherwise. The term "Asset Disposition" shall not
include (i) Specified Sales or (ii) the sale, lease or transfer of assets
permitted by Section 6.5(a)(v) hereof.
"Atlas" shall mean Atlas Group Holdings Limited, a company registered
in England under number 3687653 whose registered office is at Xxx Xxxxxxx Xxxxx,
00 Xxxxxxxxx, Xxxxxx XX0X 0XX.
"Bankruptcy Code" shall mean the Bankruptcy Code in Title 11 of the
United States Code, as amended, modified, succeeded or replaced from time to
time.
"Borrower" shall have the meaning set forth in the first paragraph of
this Agreement.
"Borrowing Base" shall mean, on any date of determination, a dollar
amount equal to eighty percent (80%) of the net book value of the Accounts of
the Consolidated Parties, determined in accordance with GAAP.
"Business" shall have the meaning set forth in Section 3.10(b).
"Business Day" shall mean a day other than a Saturday, Sunday or other
day on which commercial banks in Charlotte, North Carolina are authorized or
required by law to close; provided, however, that when used in connection with a
rate determination, borrowing or payment in respect of a LIBOR Rate Loan or
Swingline Loan, the term "Business Day" shall also exclude any day on which
banks in London, England are not open for dealings in Dollar deposits in the
London interbank market.
"Capital Lease" shall mean any lease of property, real or personal, the
obligations with respect to which are required to be capitalized on a balance
sheet of the lessee in accordance with GAAP.
3
"Capital Lease Obligations" shall mean the capitalized lease
obligations relating to a Capital Lease determined in accordance with GAAP.
"Capital Stock" shall mean (i) in the case of a corporation, capital
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of capital stock, (iii) in the case of a partnership, partnership
interests (whether general or limited), (iv) in the case of a limited liability
company, membership interests and (v) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.
"Cash Equivalents" shall mean (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided, that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than twelve months from the date of acquisition ("Government Obligations"), (ii)
U.S. dollar denominated (or foreign currency fully hedged to U.S. dollar) time
deposits, certificates of deposit, Eurodollar time deposits and Eurodollar
certificates of deposit of (y) any domestic commercial bank of recognized
standing having capital and surplus in excess of $250,000,000 or (z) any bank
whose short-term commercial paper rating from S&P is at least A-1 or the
equivalent thereof or from Xxxxx'x is at least P-1 or the equivalent thereof
(any such bank being an "Approved Bank"), in each case with maturities of not
more than 364 days from the date of acquisition, (iii) commercial paper and
variable or fixed rate notes issued by any Approved Bank (or by the parent
company thereof) or any variable rate notes issued by, or guaranteed by any
domestic corporation rated A-1 (or the equivalent thereof) or better by S&P or
P-1 (or the equivalent thereof) or better by Moody's and maturing within six
months of the date of acquisition, (iv) repurchase agreements with a bank or
trust company (including a Lender) or a recognized securities dealer having
capital and surplus in excess of $500,000,000 for direct obligations issued by
or fully guaranteed by the United States of America, (v) obligations of any
state of the United States or any political subdivision thereof for the payment
of the principal and redemption price of and interest on which there shall have
been irrevocably deposited Government Obligations maturing as to principal and
interest at times and in amounts sufficient to provide such payment, and (vi)
auction preferred stock rated in the highest short-term credit rating category
by S&P or Moody's.
"CCC Japan" shall mean Coutts Career Consultant Japan Limited, a
Japanese entity.
"Change of Control" shall mean the occurrence of any of the following
events: (a) the sale, lease, transfer or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Borrower and its Subsidiaries taken as a
whole to any "person" or "group"(within the meaning of Sections 13(d) and
14(d)(2) of the Securities Exchange Act), (b) the Borrower is liquidated or
dissolved or adopts a plan of liquidation or dissolution; (c) any "person" or
"group" (within the meaning of Sections 13(d) and 14(d)(2) of the Securities
Exchange Act) (i) shall have acquired beneficial ownership, directly or
indirectly, or (ii) shall have acquired by contract or otherwise (or shall have
entered into a contract or arrangement that, upon consummation, will result in
its or their acquisition of), 25% or more of the outstanding Voting Stock of the
Borrower, (d) the Borrower shall fail to own, directly or indirectly, (i) 100%
of the Capital Stock of the other Credit Parties or any of the Foreign
Subsidiaries listed on Schedule 1.1(c), (ii) at least 65% of the Capital Stock
of Way Station, unless the Borrower fails to own 65% of such Capital Stock due
to a sale by the Borrower of such Capital Stock in connection with an initial
public offering of the Capital Stock of Way Station and (iii) at least 70% of
CCC Japan, (e) CCC Japan shall fail to own 100% of the Capital Stock of CJS
Japan or (f) during any period of up to 24 consecutive months, commencing after
the Closing Date, individuals who at the beginning of such 24 month period were
directors of the Borrower (together with any new director whose election by the
Borrower's board of directors or whose nomination for election by the Borrower's
shareholders was approved by a vote of at least two-thirds of the directors then
still in office who either were directors at the beginning of such period or
whose election or nomination for election was previously so approved) cease for
any reason to constitute a majority of the board of directors of the Borrower
then in office. As used herein, "beneficial ownership" shall have the meaning
provided in Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act.
"CJS Japan" shall mean Coutts Job Search Co., Ltd., a Japanese entity.
"Closing Date" shall mean the date of this Agreement.
4
"Coaching" shall mean Coaching Psicologia Estrategica S/C Ltda., a
Brazilian entity.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral" shall mean a collective reference to the collateral which
is identified in, and at any time will be covered by, the Security Documents.
"Commitment" shall mean the Revolving Commitment, the LOC Commitment,
the Swingline Commitment and the Term Loan Commitment, individually or
collectively, as appropriate.
"Commitment Fee" shall have the meaning set forth in Section 2.5(a).
"Commitment Percentage" shall mean the Revolving Commitment Percentage,
the LOC Commitment Percentage and/or the Term Loan Commitment Percentage, as
appropriate.
"Commitment Period" shall mean the period from and including the
Closing Date to but not including the Revolving Commitment Termination Date.
"Commitment Transfer Supplement" shall mean a Commitment Transfer
Supplement, in substantially the form of Schedule 9.6(c).
"Commonly Controlled Entity" shall mean an entity, whether or not
incorporated, which is under common control with the Borrower within the meaning
of Section 4001 of ERISA or is part of a group which includes the Borrower and
which is treated as a single employer under Section 414 of the Code.
"Consolidated Capital Expenditures" shall mean, for any period, all
expenditures which in accordance with GAAP would be classified as capital
expenditures on the consolidated statement of cash flows of the Borrower and its
Subsidiaries for such period, including without limitation, Capital Lease
Obligations. Except as otherwise specified, the applicable period shall be the
four consecutive quarters ending as of the date of computation.
"Consolidated Cash Taxes" shall mean, for any period, the aggregate of
all taxes paid in cash for such period of the Borrower and its Subsidiaries on a
consolidated basis. Except as otherwise specified, the applicable period shall
be the four consecutive quarters ending as of the date of computation.
"Consolidated EBITDA" shall mean, for any period, (i) Consolidated Net
Income plus (ii) the sum of the following to the extent deducted in calculating
Consolidated Net Income: (A) Consolidated Interest Expense for such period, (B)
all provisions for any federal, state , local and foreign income taxes for such
period, (C) depreciation and amortization charges for such period. Except as
otherwise specified, the applicable period shall be the four consecutive
quarters ending as of the date of computation; provided, however, that for the
purposes of determining Consolidated EBITDA for any period during which a
Permitted Acquisition is consummated (or deemed to be consummated for purposes
of clause (b) of the definition thereof), Consolidated EBITDA shall be
determined on a pro forma basis, if requested by the Borrower, to give effect to
specified add-backs and adjustments approved by the Agent; provided, further,
that when calculating Consolidated EBITDA for the three consecutive fiscal
quarters commencing April 1, 2002, Consolidated EBITDA with respect to the
Acquired Companies shall equal $3,700,000 for the fiscal quarter ended June 30,
2001, $3,006,000 for the fiscal quarter ended September 30, 2001, and $5,193,000
for the fiscal quarter ended December 31, 2001.
"Consolidated Fixed Charges" shall mean, for any period, the sum of (i)
Consolidated Interest Expense for such period plus (ii) Consolidated Scheduled
Debt Payments for the next following four consecutive fiscal quarters plus (iii)
Consolidated Rental Expense for such period plus (iv) Consolidated Cash Taxes
for such period plus (v) earn-out payments payable pursuant to asset and/or
stock purchase agreements, including the Acquisition Agreement, for such period,
in each case, of the Borrower and its Subsidiaries on a consolidated basis
determined in accordance with GAAP applied on a consistent basis. Except as
otherwise specified, the applicable period shall be the four consecutive
quarters ending as of the date of computation.
5
"Consolidated Funded Debt" shall mean, on any date of calculation,
Funded Debt of the Borrower and its Subsidiaries on a consolidated basis.
"Consolidated Interest Expense" shall mean, for any period, interest
expense (including the amortization of debt discount and premium, the interest
component under Capital Leases), of the Borrower and its Subsidiaries on a
consolidated basis, as determined in accordance with GAAP. Except as otherwise
specified, the applicable period shall be the four consecutive quarters ending
as of the date of computation.
"Consolidated Net Income" shall mean, for any period, the net income
(excluding extraordinary losses and extraordinary gains) of the Borrower and its
Subsidiaries on a consolidated basis determined in accordance with GAAP applied
on a consistent basis for such period. Except as otherwise specified, the
applicable period shall be the four consecutive quarters ending as of the date
of computation.
"Consolidated Net Worth" shall mean, for any date, total shareholders'
equity of the Borrower and its Subsidiaries on a consolidated basis as of such
date, as determined in accordance with GAAP.
"Consolidated Parties" shall mean a collective reference to the
Borrower and the Subsidiaries of the Borrower, and "Consolidated Party" means
any one of them.
"Consolidated Rental Expense" shall mean, for any period, the sum of
all rental expense of the Borrower and its Subsidiaries on a consolidated basis
for such period, determined in accordance with GAAP. Except as otherwise
specified, the applicable period shall be the four consecutive quarters ending
as of the date of computation.
"Consolidated Scheduled Debt Payments" shall mean, for any period, the
sum of all scheduled payments of principal on Consolidated Funded Debt for such
period (including the principal component of payments due on Capital Leases
during such period); it being understood that scheduled payments on Consolidated
Funded Debt shall not include optional prepayments or the mandatory prepayments
required pursuant to Section 2.7. Except as otherwise specified, the applicable
period shall be the four consecutive quarters ending as of the date of
computation.
"Contractual Obligation" shall mean, as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Copyrights" shall mean all copyrights in all works, now existing or
hereafter created or acquired, all registrations and recordings thereof, and all
applications in connection therewith, whether in the United States Copyright
Office or in any similar office or agency of the United States, any state
thereof or any other country or any political subdivision thereof, or otherwise,
including, without limitation, any thereof referred to on Schedule 3.16 and all
renewals thereof.
"Coutts" shall mean Xxxxxx Consulting Group Limited, a company
registered in England and Wales under number 1737893.
"Credit Documents" shall mean this Agreement, each of the Notes, any
Joinder Agreement, the Letters of Credit, the LOC Documents, the Security
Documents and any other written agreement, document or instrument among any
Consolidated Party, the Administrative Agent, the Lenders and/or Security
Trustee or executed by any Consolidated Party in favor of the Administrative
Agent, the Lenders or the Security Trustee pursuant to or in connection with any
of the foregoing.
"Credit Party" shall mean any of the Borrower or the Guarantors.
"Credit Party Obligations" shall mean, without duplication, (i) all of
the obligations (including, without limitation, the Obligations) of the
Consolidated Parties to the Lenders (including the Issuing Lender), the Agent
and the Security Trustee, whenever arising, under this Agreement, the Notes or
any of the other Credit Documents (including, but not limited to, any interest
accruing after the occurrence of a filing of a petition of bankruptcy under
6
the Bankruptcy Code with respect to any Consolidated Party, regardless of
whether such interest is an allowed claim under the Bankruptcy Code) and (ii)
all liabilities and obligations, whenever arising, owing from the Borrower or
any of its Subsidiaries to any Lender, or any Affiliate of a Lender, arising
under any Hedging Agreement.
"Debt Issuance" shall mean the issuance of any Indebtedness for
borrowed money by any Credit Party (excluding any Indebtedness of any Credit
Party permitted to be incurred pursuant to Section 6.1 hereof).
"Default" shall mean any of the events specified in Section 7.1,
whether or not any requirement for the giving of notice or the lapse of time, or
both, or any other condition, has been satisfied.
"Defaulting Lender" shall mean, at any time, any Lender that, at such
time (a) has failed to make a Loan required pursuant to the terms of this
Agreement, including the funding of a Participation Interest in accordance with
the terms hereof, (b) has failed to pay to the Administrative Agent or any
Lender an amount owed by such Lender pursuant to the terms of this Agreement, or
(c) has been deemed insolvent or has become subject to a bankruptcy or
insolvency proceeding or to a receiver, trustee or similar official.
"Dollars" and "$" shall mean dollars in lawful currency of the United
States of America.
"Domestic Lending Office" shall mean, initially, the office of each
Lender designated as such Lender's Domestic Lending Office shown on Schedule
9.2; and thereafter, such other office of such Lender as such Lender may from
time to time specify to the Administrative Agent and the Borrower as the office
of such Lender at which Alternate Base Rate Loans of such Lender are to be made.
"Domestic Subsidiary" shall mean any Subsidiary that is organized and
existing under the laws of the United States or any state or commonwealth
thereof or under the laws of the District of Columbia.
"Environmental Laws" shall mean any and all applicable foreign,
federal, state, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental Authority or other
Requirement of Law (including common law) regulating, relating to or imposing
liability or standards of conduct concerning protection of human health or the
environment, as now or may at any time be in effect during the term of this
Agreement.
"Equity Issuance" shall mean any issuance by any Consolidated Party to
any Person which is not a Credit Party of (a) shares of its Capital Stock, (b)
any shares of its Capital Stock pursuant to the exercise of options or warrants
(if the Net Cash Proceeds related to all such issuances exceed $500,000 during
any fiscal quarter) or (c) any shares of its Capital Stock pursuant to the
conversion of any debt securities to equity. The term "Equity Issuance" shall
not include any Asset Disposition or any Debt Issuance.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurodollar Reserve Percentage" shall mean for any day, the percentage
(expressed as a decimal and rounded upwards, if necessary, to the next higher
1/100th of 1%) which is in effect for such day as prescribed by the Federal
Reserve Board (or any successor) for determining the maximum reserve requirement
(including without limitation any basic, supplemental or emergency reserves) in
respect of Eurocurrency liabilities, as defined in Regulation D of such Board as
in effect from time to time, or any similar category of liabilities for a member
bank of the Federal Reserve System in New York City.
"Event of Default" shall mean any of the events specified in Section
7.1; provided, however, that any requirement for the giving of notice or the
lapse of time, or both, or any other condition, has been satisfied.
"Excess Cash Flow" shall mean, with respect to any fiscal year period
of the Borrower and its Subsidiaries on a consolidated basis, an amount equal to
(a) Consolidated EBITDA minus (b) Consolidated Capital Expenditures minus (c)
Consolidated Interest Expense minus (d) Consolidated Cash Taxes minus (e)
Consolidated Scheduled Debt Payments minus (f) cash used in connection with a
Permitted Acquisition plus (or minus) any decrease (or increase) in Net Working
Capital as compared to the prior fiscal year.
7
"Extension of Credit" shall mean, as to any Lender, the making,
continuation or conversion of a Loan by such Lender or the issuance of, or
participation in, a Letter of Credit by such Lender.
"Federal Funds Effective Rate" shall have the meaning set forth in the
definition of "Alternate Base Rate".
"Fee Letter" shall mean the letter agreement dated February 26, 2002,
addressed to the Borrower from First Union Securities, Inc. and the
Administrative Agent, as amended, modified or otherwise supplemented.
"First Union" shall mean First Union National Bank, a national banking
association.
"Fixed Charge Coverage Ratio" shall mean the ratio of (i) the sum of
Consolidated EBITDA plus Consolidated Rental Expense minus Consolidated Capital
Expenditures to (ii) Consolidated Fixed Charges.
"Foreign Pledge Agreements" shall mean the pledge agreements and
mortgage agreements dated as of the Closing Date given by certain of the Credit
Parties and/or their Foreign Subsidiaries to the Administrative Agent or the
Security Trustee in order to pledge or mortgage Capital Stock of certain Foreign
Subsidiaries, as the same may from time to time be amended, supplemented or
otherwise modified in accordance with the terms hereof and thereof.
"Foreign Subsidiary" shall mean any Subsidiary that is not a Domestic
Subsidiary.
"Funded Debt" shall mean, with respect to any Person, without
duplication, (a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property purchased by such Person (other than customary
reservations or retentions of title under agreements with suppliers entered into
in the ordinary course of business), (d) all obligations of such Person issued
or assumed as the deferred purchase price of property or services purchased by
such Person (other than trade debt incurred in the ordinary course of business
and due within 90 days of the incurrence thereof) which would appear as
liabilities on a balance sheet of such Person, (e) the principal portion of all
obligations of such Person under Capital Leases, (f) the maximum outstanding
amount of all letters of credit and bankers' acceptances issued or created for
the account of such Person and, without duplication, all drafts drawn thereunder
(to the extent unreimbursed), (g) all preferred Capital Stock issued by such
Person and which by the terms thereof could be (at the request of the holders
thereof or otherwise) subject to mandatory sinking fund payments, redemption or
other acceleration, (h) the principal balance outstanding under any synthetic
lease, off-balance sheet loan or similar off-balance sheet financing product,
(i) unconditional payment obligations of such Person under non-compete
agreements, (j) all Indebtedness of others of the type described in clauses (a)
through (i) hereof 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,
(k) all Guaranty Obligations of such Person with respect to Indebtedness of
another Person of the type described in clauses (a) through (i) hereof, and (l)
all Indebtedness of the type described in clauses (a) through (i) hereof of any
partnership or unincorporated joint venture in which such Person is a general
partner or a joint venturer (and if a joint venturer, such Person is generally
liable for the payment thereof); provided, however, that Funded Debt shall not
include Indebtedness among the Credit Parties.
"GAAP" shall mean generally accepted accounting principles in effect in
the United States of America applied on a consistent basis, subject, however, in
the case of determination of compliance with the financial covenants set out in
Section 5.9, to the provisions of Section 1.3.
"Glenoit" shall mean Right Management Consultants Iberia S.L., a
Spanish entity.
"Government Acts" shall have the meaning set forth in Section 2.19.
"Governmental Approvals" shall mean all authorizations, consents,
approvals, permits, licenses and exemptions of, registrations and filings with,
and reports to, all Governmental Authorities.
8
"Governmental Authority" shall mean any nation or government, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Guarantor" shall have the meaning set forth in the first paragraph of
this Agreement.
"Guaranty" shall mean the guaranty of the Guarantors set forth in
Article X.
"Guaranty Obligation" shall mean, as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit) to induce
the creation of which the guaranteeing person has issued a reimbursement,
counterindemnity or similar obligation, in either case guaranteeing or in effect
guaranteeing any Indebtedness, leases, dividends or other obligations (the
"primary obligations") of any other third Person (the "primary obligor") in any
manner, whether directly or indirectly, including, without limitation, any
obligation of the guaranteeing person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (1) for the purchase
or payment of any such primary obligation or (2) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the owner of any such
primary obligation against loss in respect thereof; provided, however, that the
term Guaranty Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any
Guaranty Obligation of any guaranteeing person shall be deemed to be the lower
of (a) an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Guaranty Obligation is made and (b) the
maximum amount for which such guaranteeing person may be liable pursuant to the
terms of the instrument embodying such Guaranty Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing person may be
liable are not stated or determinable, in which case the amount of such Guaranty
Obligation shall be such guaranteeing person's maximum reasonably anticipated
liability in respect thereof as determined by the Borrower in good faith.
"Hedging Agreements" shall mean, with respect to any Person, any
agreement entered into to protect such Person against fluctuations in interest
rates, or currency or raw materials values, including, without limitation, any
interest rate swap, cap or collar agreement or similar arrangement between such
Person and one or more counterparties, any foreign currency exchange agreement,
currency protection agreements, commodity purchase or option agreements or other
interest or exchange rate or commodity price hedging agreements.
"Indebtedness" shall mean, with respect to any Person, without
duplication, (a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property purchased by such Person (other than customary
reservations or retentions of title under agreements with suppliers entered into
in the ordinary course of business), (d) all obligations of such Person issued
or assumed as the deferred purchase price of property or services purchased by
such Person (other than trade debt incurred in the ordinary course of business
and due within 90 days of the incurrence thereof) which would appear as
liabilities on a balance sheet of such Person, (e) all obligations of such
Person under take-or-pay or similar arrangements or under commodities
agreements, (f) all Indebtedness of others secured by (or for which the holder
of such Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien on, or payable out of the proceeds of production from,
property owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed, (g) all Guaranty Obligations of such Person
with respect to Indebtedness of another Person, (h) the principal portion of all
obligations of such Person under Capital Leases, (i) all obligations of such
Person under Hedging Agreements, excluding any portion thereof which would be
accounted for as interest expense under GAAP, (j) the maximum outstanding amount
of all letters of credit and bankers' acceptances issued or created for the
account of such Person and, without duplication, all drafts drawn thereunder (to
the extent unreimbursed), (k) all preferred Capital Stock issued by such Person
and which by the terms thereof could be (at the request of the holders thereof
or otherwise) subject to mandatory sinking fund payments, redemption or other
acceleration, (l) the principal balance outstanding under any synthetic lease,
off-balance sheet loan or similar off-balance sheet financing product and (m)
9
the Indebtedness of any partnership or unincorporated joint venture in which
such Person is a general partner or a joint venturer (and if a joint venturer,
such Person is generally liable for the payment thereof).
"Insolvency" shall mean, with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of such term as used in
Section 4245 of ERISA.
"Insolvent" shall mean being in a condition of Insolvency.
"Interest Payment Date" shall mean (a) as to any Alternate Base Rate
Loan, the last day of each March, June, September and December and the
applicable Maturity Date, (b) as to any Swingline Loan the last day of each
March, June, September and December, any date on which such Swingline Loan is
repaid and/or reborrowed as a Revolving Loan, and the applicable maturity date
agreed to by the Borrower and the Swingline Lender pursuant to Section 2.3, (c)
as to any LIBOR Rate Loan having an Interest Period of three months or less, the
last day of such Interest Period, and (d) as to any LIBOR Rate Loan having an
Interest Period longer than three months, (i) each three (3) month anniversary
following the first day of such Interest Period and (ii) the last day of such
Interest Period.
"Interest Period" shall mean with respect to any LIBOR Rate Loan,
(i) initially, the period commencing on the date such Loan is
made or the conversion date, as the case may be, with respect to such
LIBOR Rate Loan and ending one, two, three or six months thereafter, as
selected by the Borrower in the Notice of Borrowing or Notice of
Conversion given with respect thereto; and
(ii) thereafter, each period commencing on the last day of the
immediately preceding Interest Period applicable to such LIBOR Rate
Loan and ending one, two, three or six months thereafter, as selected
by the Borrower by irrevocable notice to the Administrative Agent not
less than three Business Days prior to the last day of the then current
Interest Period with respect thereto;
provided that the foregoing provisions are subject to the
following:
(A) if any Interest Period pertaining to a LIBOR Rate
Loan would otherwise end on a day that is not a Business Day,
such Interest Period shall be extended to the next succeeding
Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month in
which event such Interest Period shall end on the immediately
preceding Business Day;
(B) any Interest Period pertaining to a LIBOR Rate
Loan that begins on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of the relevant calendar
month;
(C) if the Borrower shall fail to give notice as
provided above, the Borrower shall be deemed to have selected
an Alternate Base Rate Loan to replace the affected LIBOR Rate
Loan;
(D) any Interest Period in respect of any Loan that
would otherwise extend beyond the applicable Maturity Date
shall end on such Maturity Date and, further with regard to
any Term Loan, no Interest Period shall extend beyond any
principal amortization payment date relating to such Term Loan
unless the portion of such Term Loan consisting of Alternate
Base Rate Loans together with the portion of such Term Loan
consisting of LIBOR Rate Loans with Interest Periods expiring
on or prior to such principal amortization payment date, is at
least equal to the amount of such principal amortization
payment due on such date; and
(E) no more than six (6) LIBOR Rate Loans may be in
effect at any time. For purposes hereof, LIBOR Rate Loans with
different Interest Periods shall be considered as separate
LIBOR Rate Loans, although borrowings, extensions and
conversions may, in accordance with the provisions hereof, be
10
combined at the end of existing Interest Periods to constitute
a new LIBOR Rate Loan with a single Interest Period.
"Investments" shall mean all investments, in cash or by delivery of
property made, directly or indirectly in, to or from any Person, whether by
acquisition of shares of Capital Stock, property, assets, indebtedness or other
obligations or securities or by loan advance, capital contribution or otherwise.
"Issuing Lender" shall mean First Union.
"Issuing Lender Fees" shall have the meaning set forth in Section
2.5(c).
"Joinder Agreement" shall mean a Joinder Agreement in substantially the
form of Schedule 5.10, executed and delivered by an Additional Credit Party in
accordance with the provisions of Section 5.10.
"Lender" shall have the meaning set forth in the first paragraph of
this Agreement.
"Letter of Credit" shall mean any letter of credit issued by the
Issuing Lender pursuant to the terms hereof, as such Letter of Credit may be
amended, modified, extended, renewed or replaced from time to time.
"Letter of Credit Fee" shall have the meaning set forth in Section
2.5(b).
"Leverage Ratio" shall mean the ratio of (i) Consolidated Funded Debt
to (ii) Consolidated EBITDA.
"LIBOR" shall mean, for any LIBOR Rate Loan for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on the display designated as page 3750 by Dow Xxxxx
Telerate, Inc. (or such other page as may replace such page on that service for
the purpose of displaying the British Bankers Association London interbank
offered rates) as the London interbank offered rate for deposits in Dollars at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period for a term comparable to such Interest Period. If for
any reason such rate is not available, the term "LIBOR" shall mean, for any
LIBOR Rate Loan for any Interest Period therefor, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen
LIBO Page as the London interbank offered rate for deposits in Dollars at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period for a term comparable to such Interest Period; provided,
however, if more than one rate is specified on Reuters Screen LIBO Page, the
applicable rate shall be the arithmetic mean of all such rates (rounded upwards,
if necessary, to the nearest 1/100 of 1%). If, for any reason, neither of such
rates is available, then "LIBOR" shall mean the rate per annum at which, as
determined by the Administrative Agent, deposits in Dollars in an amount
comparable to the Loans then requested are being offered to leading banks at
approximately 11:00 A.M. (London time), two (2) Business Days prior to the
commencement of the applicable Interest Period for settlement in immediately
available funds by leading banks in the London interbank market for a period
equal to the Interest Period selected.
"LIBOR Lending Office" shall mean, initially, the office of each Lender
designated as such Lender's LIBOR Lending Office shown on Schedule 9.2; and
thereafter, such other office of such Lender as such Lender may from time to
time specify to the Administrative Agent and the Borrower as the office of such
Lender at which the LIBOR Rate Loans of such Lender are to be made.
"LIBOR Rate" shall mean a rate per annum (rounded upwards, if
necessary, to the next higher 1/100th of 1%) determined by the Administrative
Agent pursuant to the following formula:
LIBOR Rate = LIBOR
----------------------------
1.00 - Eurodollar Reserve Percentage
"LIBOR Rate Loan" shall mean Loans the rate of interest applicable to
which is based on the LIBOR Rate.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement or
11
preferential arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement and any
Capital Lease having substantially the same economic effect as any of the
foregoing).
"Loan" shall mean a Revolving Loan, a Swingline Loan and/or a Term
Loan, as appropriate.
"LOC Commitment" shall mean the commitment of the Issuing Lender to
issue Letters of Credit and with respect to each Lender which has a Revolving
Commitment, the commitment of such Lender to purchase participation interests in
the Letters of Credit up to such Lender's LOC Committed Amount as specified on
Schedule 2.1(a), as such amount may be reduced from time to time in accordance
with the provisions hereof.
"LOC Commitment Percentage" shall mean, for each Lender, the percentage
identified as its LOC Commitment Percentage on Schedule 2.1(a), as such
percentage may be modified in connection with any assignment made in accordance
with the provisions of Section 9.6(c).
"LOC Committed Amount" shall mean, collectively, with respect to all
standby and trade Letters of Credit other than the Seller Note Letters of
Credit, $3,000,000 and, with respect to the Seller Note Letters of Credit,
$6,500,000, and, individually, the amount of each Lender's LOC Commitment as
specified on Schedule 2.1(a).
"LOC Documents" shall mean, with respect to any Letter of Credit, such
Letter of Credit, any amendments thereto, any documents delivered in connection
therewith, any application therefor, and any agreements, instruments, guarantees
or other documents (whether general in application or applicable only to such
Letter of Credit) governing or providing for (i) the rights and obligations of
the parties concerned or (ii) any collateral security for such obligations.
"LOC Obligations" shall mean, at any time, the sum of (i) the maximum
amount which is, or at any time thereafter may become, available to be drawn
under Letters of Credit then outstanding, assuming compliance with all
requirements for drawings referred to in such Letters of Credit plus (ii) the
aggregate amount of all drawings under Letters of Credit honored by the Issuing
Lender but not theretofore reimbursed.
"Mandatory Borrowing" shall have the meaning set forth in Section
2.4(e).
"Material Adverse Effect" shall mean a material adverse effect on (a)
the business, operations, property, assets, condition (financial or otherwise)
or prospects of the Consolidated Parties (including, without limitation, the
Acquired Companies), taken as a whole, (b) the ability of the Consolidated
Parties, taken as a whole, to perform their respective obligations, when such
obligations are required to be performed, under this Agreement, any of the Notes
or any other Credit Document or (c) the validity or enforceability of this
Agreement, any of the Notes or any of the other Credit Documents or the rights
or remedies of the Administrative Agent, the Security Trustee or the Lenders
hereunder or thereunder.
"Material Contract" shall mean any contract or other arrangement to
which the Borrower or any Subsidiary is a party as to which the breach,
nonperformance, cancellation or failure to renew by any party thereto could
reasonably be expected to have a Material Adverse Effect, and shall include in
any event the Acquisition Agreement. The term "Material Contract" shall not be
deemed to include any contract or other arrangement to which the Borrower or any
Subsidiary is a party entered into in the ordinary course of such Person's
business for the providing of career transition or human resource consulting
services.
"Materials of Environmental Concern" shall mean any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum products or
any hazardous or toxic substances, materials or wastes, defined or regulated as
such in or under any Environmental Law, including, without limitation, asbestos,
polychlorinated biphenyls and urea-formaldehyde insulation.
"Maturity Date" shall mean (i) with respect to the Term Loans, the last
scheduled quarterly payment date for the Term Loans set forth in Section 2.2(b),
(ii) with respect to the Revolving Loans, the Revolving Commitment Termination
12
Date and (iii) with respect to Swingline Loans, the date agreed to by the
Borrower and the Swingline Lender pursuant to Section 2.3, but not later than
the Revolving Commitment Termination Date.
"Moody's" shall mean Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" shall mean a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Xxxxxx Axmith" shall mean Xxxxxx Axmith & Associates Ltd., an Ontario
corporation.
"Net Cash Proceeds" shall mean the aggregate cash proceeds received by
any Consolidated Party in respect of any Asset Disposition, Equity Issuance or
Debt Issuance, net of (a) direct costs (including, without limitation,
reasonable legal, accounting and investment banking fees, and sales
commissions), (b) amounts applied to repay Indebtedness that would be required
in connection with any Asset Disposition contemplated as part of the purchase
price or otherwise related to such disposed assets, (c) amounts held in escrow
to be applied as part of the purchase price of any Asset Disposition and (d)
taxes paid or payable as a result thereof; it being understood that "Net Cash
Proceeds" shall include, without limitation, any cash received upon the sale or
other disposition of any non-cash consideration received by any Consolidated
Party in any Asset Disposition, Equity Issuance or Debt Issuance and any cash
released from escrow as part of the purchase price in connection with any Asset
Disposition.
"Net Working Capital" shall mean, at any date, (i) the consolidated
current assets (excluding cash and cash equivalents) of the Borrower and its
Subsidiaries minus (ii) the consolidated current liabilities (excluding
Indebtedness) of the Borrower and its Subsidiaries, all determined as of such
date.
"Note" or "Notes" shall mean the Revolving Notes, the Swingline Note
and/or the Term Notes, collectively, separately or individually, as appropriate.
"Notice of Borrowing" shall mean the written notice of borrowing as
referenced and defined in Section 2.1(b)(i).
"Notice of Conversion" shall mean the written notice of extension or
conversion as referenced and defined in Section 2.10.
"Obligations" shall mean, collectively, Loans and LOC Obligations.
"Participant" shall have the meaning set forth in Section 9.6(b).
"Participation Interest" shall mean a participation interest purchased
by a Lender in Swingline Loans as provided in Section 2.3 or in Letters of
Credit as provided in Section 2.4.
"Patents" shall mean (i) all letters patent of the United States or any
other country, now existing or hereafter arising, and all improvement patents,
reissues, reexaminations, patents of additions, renewals and extensions thereof,
including, without limitation, any thereof referred to on Schedule 3.16 to this
Agreement, and (ii) all applications for letters patent of the United States or
any other country, now existing or hereafter arising, and all provisionals,
divisions, continuations and continuations-in-part and substitutes thereof,
including, without limitation, any thereof referred to on Schedule 3.16 to this
Agreement.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"Permitted Acquisition" shall mean an acquisition of (a) Capital Stock
(or other equity interests) constituting at least 51% of the aggregate
outstanding Capital Stock (or other equity interests) of the target entity or
(b) assets of a business, in each case, engaged in or consisting of the type of
assets, of a business permitted to be engaged in by the Borrower and its
Subsidiaries pursuant to Section 6.4 hereof so long as (i) no Default or Event
of Default shall then exist or would exist after giving effect thereto, (ii) the
Borrower shall demonstrate to the reasonable satisfaction of the Administrative
13
Agent that the Borrower would be in compliance with Sections 5.9(a), (b), (c)
and (d) hereof upon consummation thereof as if such Permitted Acquisition were
consummated as of the first day of the four (4) consecutive quarterly period
most recently ending prior to (but not less than 45 days prior to) the actual
consummation of such Permitted Acquisition and (iii) the amount of consideration
(including the fair market value of any non-cash consideration but excluding
Capital Stock of the Borrower) paid in connection with such Permitted
Acquisitions shall not exceed $7,500,000 in respect of any single transaction
and $15,000,000 in the aggregate in any fiscal year; provided, however, that if
the Leverage Ratio shall be less than 1.50 to 1.0 for two consecutive quarters,
the dollar limits hereinabove shall be increased to $15,000,000 in respect of
any single transaction and $30,000,000 in the aggregate in any fiscal year;
provided, further, that if the Borrower can demonstrate to the reasonable
satisfaction of the Administrative Agent that the Leverage Ratio will be less
than 1.25 to 1.0 on a pro forma basis after giving effect to such acquisition,
then the foregoing limitations on the amount of consideration paid in connection
with such Permitted Acquisitions shall not apply. If the Leverage Ratio
increases to 1.50 to 1.0 or greater in any quarter after having been less than
1.50 to l.0 for two consecutive quarters, the lower amounts set forth above in
the first proviso shall be reinstated, it being understood that any
consideration paid in excess of such lower amounts which was paid in compliance
with the terms hereof shall not be considered a violation of Section 6.6.
Notwithstanding the foregoing, up to $5,000,000 in the aggregate may be paid by
the Borrower to acquire the "agent offices" of Xxxxxx Axmith, which amount shall
not constitute usage of the baskets provided above.
"Permitted Investments" shall mean:
(i) cash and Cash Equivalents;
(ii) Investments existing on the Closing Date;
(iii) receivables owing to the Borrower or any of its
Subsidiaries or any receivables and advances to suppliers, in each case
if created, acquired or made in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms;
(iv) Investments made by and loans from the Borrower or any of
its Subsidiaries in or to the Borrower or any of its Domestic
Subsidiaries;
(v) loans and advances to officers, directors and employees in
an aggregate amount not to exceed $500,000 at any time outstanding;
(vi) Investments (including debt obligations) received in
connection with the bankruptcy or reorganization of suppliers and
customers and in settlement of delinquent obligations of, and other
disputes with, customers and suppliers arising in the ordinary course
of business;
(vii) Investments, acquisitions or transactions permitted
under Section 6.5(b), including Permitted Acquisitions;
(viii) Investments consisting of Hedging Agreements permitted
to be entered into pursuant to Section 5.13 hereof;
(ix) acquisitions of outstanding minority equity interests in
Way Station, Coaching, Xxxx Xxxxxxxxxx or Glenoit in exchange for
Capital Stock of the Borrower or for cash in an aggregate amount not to
exceed $5,000,000; and
(x) additional loans and advances and other Investments of a
nature not contemplated by the foregoing clauses hereof, provided that
such loans and advances and other Investments made pursuant to this
clause shall not exceed an aggregate amount of $2,000,000.
14
"Permitted Liens" shall mean:
(i) Liens created by or otherwise existing under or in
connection with this Agreement or the other Credit Documents in favor
of the Administrative Agent and/or the Security Trustee and the
Lenders;
(ii) Liens securing purchase money indebtedness (and
refinancings thereof) to the extent permitted under Section 6.1(b);
(iii) Liens for taxes, assessments, charges or other
governmental levies not yet due or as to which the period of grace (not
to exceed 60 days), if any, related thereto has not expired or which
are being contested in good faith by appropriate proceedings, provided
that adequate reserves with respect thereto are maintained on the books
of the Borrower or the applicable Subsidiary, as the case may be, in
conformity with GAAP (or, in the case of a Subsidiary with significant
operations outside of the United States of America, generally accepted
accounting principles in effect from time to time in its jurisdiction
of incorporation);
(iv) statutory liens such as carriers', warehousemen's,
mechanics', materialmen's, landlords', repairmen's or other like Liens
arising in the ordinary course of business which are not overdue for a
period of more than 60 days or which are being contested in good faith
by appropriate proceedings;
(v) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation and deposits securing liability to insurance carriers under
insurance or self-insurance arrangements;
(vi) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business;
(vii) Liens existing on the Closing Date, as set forth on
Schedule 6.2;
(viii) any extension, renewal or replacement (or successive
extensions, renewals or replacements), in whole or in part, of any Lien
referred to in the foregoing clauses; provided that such extension,
renewal or replacement Lien shall be limited to all or a part of the
property which secured the Lien so extended, renewed or replaced (plus
improvements on such property);
(ix) zoning ordinances, easements, covenants and other
customary restrictions on the use of real property and other title
exceptions that do not interfere in any material respect with the
ordinary course of business;
(x) leases or subleases granted to others not materially
interfering with the ordinary conduct of the business of the Borrower
or its Subsidiaries;
(xi) Liens in respect of deposits, bonds and guarantees
securing obligations to pay customs and excise duties and taxes and
other similar payments; and
(xii) Liens in respect of appeal bonds, judgments or awards as
to which no Default or Event of Default exists.
"Person" shall mean an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
"Plan" shall mean, at any particular time, any employee benefit plan
which is covered by Title IV of ERISA and in respect of which the Borrower or a
Commonly Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
15
"Pledge Agreement" shall mean the Pledge Agreement dated as of the
Closing Date given by the Borrower and the Subsidiary Guarantors to the
Administrative Agent, as the same may from time to time be amended, supplemented
or otherwise modified in accordance with the terms hereof and thereof.
"Prime Rate" shall have the meaning set forth in the definition of
Alternate Base Rate.
"Pro Forma Balance Sheet" shall have the meaning set forth in Section
4.1(u).
"Properties" shall have the meaning set forth in Section 3.10(a).
"Purchasing Lenders" shall have the meaning set forth in Section
9.6(c).
"Recovery Event" shall mean the receipt by the Borrower or any of its
Subsidiaries of any cash insurance proceeds or condemnation award payable by
reason of theft, loss, physical destruction or damage, taking or similar event
with respect to any of their respective property or assets.
"Register" shall have the meaning set forth in Section 9.6(d).
"Reorganization" shall mean, with respect to any Multiemployer Plan,
the condition that such Plan is in reorganization within the meaning of such
term as used in Section 4241 of ERISA.
"Reportable Event" shall mean any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty-day notice
period is waived under PBGC Reg. ss.4043.
"Required Lenders" shall mean Lenders holding in the aggregate greater
than 50% of the sum of (i) all Revolving Loans and LOC Obligations then
outstanding at such time plus the aggregate unused Revolving Commitments at such
time (treating for purposes hereof in the case of Swingline Loans and LOC
Obligations, in the case of the Swingline Lender and the Issuing Lender,
respectively, only the portion of the Swingline Loans and LOC Obligations of the
Swingline Lender and the Issuing Lender which is not subject to the
Participation Interests of the other Lenders and, in the case of the Lenders
other than the Swingline Lender and the Issuing Lender, the Participation
Interests of such Lenders in Swingline Loans and LOC Obligations hereunder as
direct Obligations) and (ii) all Term Loans then outstanding at such time;
provided, however, that if any Lender shall be a Defaulting Lender at such time,
then there shall be excluded from the determination of Required Lenders,
Obligations (including Participation Interests) owing to such Defaulting Lender
and such Defaulting Lender's Commitments, or after termination of the
Commitments, the principal balance of the Obligations owing to such Defaulting
Lender.
"Requirement of Law" shall mean, as to any Person, the Certificate of
Incorporation and By-laws or other organizational or governing documents of such
Person, and each law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Responsible Officer" shall mean, as to (a) the Borrower, the Chief
Executive Officer or the Chief Financial Officer or (b) any other Consolidated
Party, any duly authorized officer thereof.
"Restricted Payment" shall mean (a) any dividend or other distribution,
direct or indirect, on account of any shares of any class of Capital Stock of
the Borrower or any of its Subsidiaries, now or hereafter outstanding, (b) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of Capital
Stock of the Borrower or any of its Subsidiaries, now or hereafter outstanding,
(c) any payment made to retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire shares of any class of Capital
Stock of the Borrower or any of its Subsidiaries, now or hereafter outstanding
and (d) the payment by the Borrower or any of its Subsidiaries of any management
fees or of any salary, bonus or other form of compensation to any Person who is
directly or indirectly a significant partner or shareholder of any such Person
(and for such purposes a significant shareholder shall be a shareholder which
owns in excess of 1% of the Capital Stock of such Person).
16
"Revolving Commitment" shall mean, with respect to each Lender, the
commitment of such Lender to make Revolving Loans in an aggregate principal
amount at any time outstanding up to such Lender's Revolving Committed Amount as
specified on Schedule 2.1(a), as such amount may be reduced from time to time in
accordance with the provisions hereof.
"Revolving Commitment Percentage" shall mean, for each Lender, the
percentage identified as its Revolving Commitment Percentage on Schedule 2.1(a),
as such percentage may be modified in connection with any assignment made in
accordance with the provisions of Section 9.6(c).
"Revolving Commitment Termination Date" shall mean March 22, 2007.
"Revolving Committed Amount" shall mean, collectively, the aggregate
amount of all Revolving Commitments as referenced in Section 2.1(a), as such
amount may be reduced from time to time in accordance with the provisions
hereof, and, individually, the amount of each Lender's Revolving Commitment as
specified on Schedule 2.1(a).
"Revolving Loans" shall have the meaning set forth in Section 2.1.
"Revolving Note" or "Revolving Notes" shall mean the promissory notes
of the Borrower in favor of each of the Lenders evidencing the Revolving Loans
provided pursuant to Section 2.1(e), individually or collectively, as
appropriate, as such promissory notes may be amended, modified, supplemented,
extended, renewed or replaced from time to time.
"Right Associates" shall mean Right Associates Limited, a company
registered in England and Wales under number 02017288 whose registered office is
at Xxxxxxxx Xxxxx, 00-00 Xxxxxxx XX Xxxxxx, Xxxxxx XX0 0XX.
"S&P" shall mean Standard & Poor's Ratings Group, a division of The
McGraw Hill Companies, Inc.
"Xxxx Xxxxxxxxxx" shall mean Xxxx Xxxxxxxxxx, a Brazilian entity.
"Security Agreement" shall mean the Security Agreement dated as of the
Closing Date given by the Borrower and the Subsidiary Guarantors to the
Administrative Agent, as amended, modified or supplemented from time to time in
accordance with its terms.
"Security Documents" shall mean the Security Agreement, the Pledge
Agreement, the Foreign Pledge Agreements, any mortgage and such other documents
executed and delivered in connection with the attachment and perfection of the
Administrative Agent's and/or the Security Trustee's security interests and
liens arising thereunder, including, without limitation, UCC financing
statements and patent and trademark filings.
"Security Trustee" shall have the meaning set forth in the first
paragraph of this Agreement and any successors in such capacity.
"Seller Note Letters of Credit" shall mean the Letters of Credit issued
on the Closing Date in support of the seller notes given in connection with the
Acquisition.
"Single Employer Plan" shall mean any Plan which is not a Multiemployer
Plan.
"Specified Sales" shall mean (a) the sale, transfer, lease or other
disposition of inventory and materials in the ordinary course of business and
(b) the sale, transfer or other disposition of Permitted Investments described
in clause (i) of the definition thereof.
"Subsidiary" shall mean, as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such other
ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers of
17
such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Borrower.
"Subsidiary Guarantor" shall have the meaning set forth in the first
paragraph of this Agreement.
"Swingline Commitment" shall mean the commitment of the Swingline
Lender to make Swingline Loans in an aggregate principal amount at any time
outstanding of up to the Swingline Committed Amount.
"Swingline Committed Amount" shall have the meaning set forth in
Section 2.3.
"Swingline Conversion Event" shall mean (i) an event, change,
circumstance or other occurrence having or which could reasonably be expected to
have a Material Adverse Effect; or (ii) a Default or Event of Default.
"Swingline Lender" shall mean First Union or any successor to First
Union.
"Swingline Loan" shall have the meaning assigned to such term in
Section 2.3.
"Swingline Note" shall mean the promissory note of the Borrower in
favor of the Swingline Lender evidencing the Swingline Loan provided pursuant to
Section 2.3, as such promissory note may be amended, modified, restated,
supplemented, extended, renewed or replaced from time to time.
"Taxes" shall have the meaning set forth in Section 2.18.
"Term Loans" shall have the meaning set forth in Section 2.2(a).
"Trademarks" shall mean all trademarks, trade names, corporate names,
company names, business names, fictitious business names, service marks, logos
and other source or business identifiers, together with the goodwill of the
business symbolized by said marks, names, logos and identifiers now existing or
hereafter adopted or acquired, all registrations and recordings thereof, and all
applications in connection therewith, whether in the United States Patent and
Trademark Office or in any similar office or agency of the United States, and
including, without limitation, any thereof referred to on Schedule 3.16 to this
Agreement, and (ii) all renewals thereof including, without limitation, any
thereof referred to on Schedule 3.16.
"Tranche" shall mean the collective reference to LIBOR Rate Loans whose
Interest Periods begin and end on the same day. A Tranche may sometimes be
referred to as a "Eurodollar Tranche".
"Term Loan Commitment" shall mean, with respect to each Lender, the
commitment of such Lender to make its portion of the Term Loans in a principal
amount equal to such Lender's Term Loan Commitment Percentage of the Term Loan
Committed Amount (and for purposes of making determinations of Required Lenders
hereunder after the Closing Date, the principal amount outstanding on the Term
Loans).
"Term Loan Commitment Percentage" shall mean, for any Lender, the
percentage identified as its Term Loan Commitment Percentage on Schedule 2.1(a),
as such percentage may be modified in connection with any assignment made in
accordance with the provisions of Section 9.6.
"Term Loan Committed Amount" shall have the meaning set forth in
Section 2.2(a).
"Term Note" or "Term Notes" shall mean the promissory notes of the
Borrower in favor of each of the Lenders evidencing the portion of the Term
Loans provided pursuant to Section 2.2(d), individually or collectively, as
appropriate, as such promissory notes may be amended, modified, restated,
supplemented, extended, renewed or replaced from time to time.
"Transfer Effective Date" shall have the meaning set forth in each
Commitment Transfer Supplement.
18
"Trust Property" shall mean all or any of the assets, rights, powers,
authorities and discretions at any time subject to or expressed to be subject to
the security from time to time constituted by or arising pursuant to the
Security Documents or vested in the Security Trustee or given under or pursuant
to the Security Documents including all income and other sums at any time
received or receivable by the Security Trustee in respect thereof.
"Type" shall mean, as to any Loan, its nature as an Alternate Base Rate
Loan or LIBOR Rate Loan, as the case may be.
"UCC" shall mean the Uniform Commercial Code in effect in the State of
North Carolina from time to time.
"Way Station" shall mean Right Waystation, Inc., a Japanese entity.
Section 1.2 Other Definitional Provisions.
(a) Unless otherwise specified therein, all terms defined in
this Agreement shall have the defined meanings when used in the Notes
or other Credit Documents or any certificate or other document made or
delivered pursuant hereto.
(b) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement, and Section, subsection, Schedule and Exhibit references are
to this Agreement unless otherwise specified.
(c) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
Section 1.3 Accounting Terms.
Unless otherwise specified herein, all accounting terms used herein
shall be interpreted, all accounting determinations hereunder shall be made, and
all financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP applied on a basis consistent with the most recent audited
consolidated financial statements of the Borrower delivered to the Lenders;
provided that, if the Borrower notifies the Administrative Agent that it wishes
to amend any covenant in Section 5.9 to eliminate the effect of any change in
GAAP on the operation of such covenant (or if the Administrative Agent notifies
the Borrower that the Required Lenders wish to amend Section 5.9 for such
purpose), then the Borrower's compliance with such covenant shall be determined
on the basis of GAAP in effect immediately before the relevant change in GAAP
became effective, until either such notice is withdrawn or such covenant is
amended in a manner satisfactory to the Borrower and the Required Lenders.
The Borrower shall deliver to the Administrative Agent and each Lender
at the same time as the delivery of any annual or quarterly financial statements
given in accordance with the provisions of Section 5.1, (i) a description in
reasonable detail of any material change in the application of accounting
principles employed in the preparation of such financial statements from those
applied in the most recently preceding quarterly or annual financial statements
as to which no objection shall have been made in accordance with the provisions
above and (ii) a reasonable estimate of the effect on the financial statements
on account of such changes in application.
For purposes of computing the financial covenants set forth in Section
5.9 for any applicable test period provided for in such financial covenants, any
acquisition or sale of assets (including a stock sale) shall have been deemed to
have taken place as of the first day of such applicable test period.
19
ARTICLE II
THE LOANS; AMOUNT AND TERMS
Section 2.1 Revolving Loans.
(a) Revolving Commitment. During the Commitment Period,
subject to the terms and conditions hereof and in reliance upon the
representations and warranties set forth herein, each Lender which has
a Revolving Commitment severally agrees to make revolving credit loans
("Revolving Loans") to the Borrower from time to time for the purposes
hereinafter set forth; provided, however, that (i) with regard to each
Lender individually, the sum of such Lender's share of outstanding
Revolving Loans plus such Lender's LOC Commitment Percentage of LOC
Obligations plus the sum of such Lender's share of outstanding
Swingline Loans shall not exceed such Lender's Revolving Commitment
Percentage of the aggregate Revolving Committed Amount then in effect,
and (ii) with regard to the Lenders collectively, the sum of the
aggregate amount of outstanding Revolving Loans plus LOC Obligations
plus the outstanding Swingline Loans shall not exceed the lesser of (A)
the Borrowing Base and (B) the aggregate Revolving Committed Amount
then in effect. For purposes hereof, the aggregate amount available
hereunder shall be no more than ninety Million DOLLARS ($90,000,000)
(as such aggregate maximum amount may be reduced from time to time as
provided in Section 2.6, the "Revolving Committed Amount"). Revolving
Loans may consist of Alternate Base Rate Loans or LIBOR Rate Loans, or
a combination thereof, as the Borrower may request, and may be repaid
and reborrowed in accordance with the provisions hereof. LIBOR Rate
Loans shall be made by each Lender at its LIBOR Lending Office and
Alternate Base Rate Loans at its Domestic Lending Office.
Notwithstanding any provision herein to the contrary, the initial
borrowings under this Agreement, if any, made on the Closing Date shall
be made as Alternate Base Rate Loans and LIBOR Rate Loans may be made
only on the third Business Day following the Closing Date and at any
time thereafter in accordance with the provisions of this Agreement.
(b) Revolving Loan Borrowings.
(i) Notice of Borrowing. The Borrower shall request a
Revolving Loan borrowing by written notice (or telephone
notice promptly confirmed in writing which confirmation may be
by fax) to the Administrative Agent not later than 11:00 A.M.
(Charlotte, North Carolina time) on the Business Day prior to
the date of the requested borrowing in the case of Alternate
Base Rate Loans, and on the third Business Day prior to the
date of the requested borrowing in the case of LIBOR Rate
Loans. Each such request for borrowing shall be irrevocable
and shall specify (A) that a Revolving Loan is requested, (B)
the date of the requested borrowing (which shall be a Business
Day), (C) the aggregate principal amount to be borrowed, and
(D) whether the borrowing shall be comprised of Alternate Base
Rate Loans, LIBOR Rate Loans or a combination thereof, and if
LIBOR Rate Loans are requested, the Interest Period(s)
therefor. A form of Notice of Borrowing (a "Notice of
Borrowing") is attached as Schedule 2.1(b)(i). If the Borrower
shall fail to specify in any such Notice of Borrowing (I) an
applicable Interest Period in the case of a LIBOR Rate Loan,
then such notice shall be deemed to be a request for an
Interest Period of one month, or (II) the type of Revolving
Loan requested, then such notice shall be deemed to be a
request for an Alternate Base Rate Loan hereunder. The
Administrative Agent shall give notice to each Lender promptly
upon receipt of each Notice of Borrowing of the contents
thereof and each such Lender's share thereof.
(ii) Minimum Amounts. Each Revolving Loan which is
made as an Alternate Base Rate Loan shall be in a minimum
aggregate amount of $2,000,000 and integral multiples of
$500,000 in excess thereof (or the remaining amount of the
Revolving Committed Amount, if less). Each Revolving Loan
which is made as a LIBOR Rate Loan shall be in a minimum
aggregate amount of $2,000,000 and integral multiples of
$500,000 in excess thereof (or the remaining amount of the
Revolving Committed Amount, if less).
20
(iii) Advances. Each Lender will make its Revolving
Commitment Percentage of each Revolving Loan borrowing
available to the Administrative Agent for the account of the
Borrower at the office of the Administrative Agent specified
on Schedule 9.2, or at such other office as the Administrative
Agent may designate in writing, by 1:00 P.M. (Charlotte, North
Carolina time) on the date specified in the applicable Notice
of Borrowing in Dollars and in funds immediately available to
the Administrative Agent. Such borrowing will then be made
available to the Borrower by the Administrative Agent by
crediting the account of the Borrower on the books of such
office with the aggregate of the amounts made available to the
Administrative Agent by the Lenders and in like funds as
received by the Administrative Agent.
(c) Repayment. The principal amount of all Revolving Loans
shall be due and payable in full on the Revolving Commitment
Termination Date.
(d) Interest on Revolving Loans. Subject to the provisions of
Section 2.9, Revolving Loans shall bear interest as follows:
(i) Alternate Base Rate Loans. During such periods as
Revolving Loans shall be comprised of Alternate Base Rate
Loans, each such Alternate Base Rate Loan shall bear interest
at a per annum rate equal to the sum of the Alternate Base
Rate plus the Applicable Percentage; and
(ii) LIBOR Rate Loans. During such periods as
Revolving Loans shall be comprised of LIBOR Rate Loans, each
such LIBOR Rate Loan shall bear interest at a per annum rate
equal to the sum of the LIBOR Rate plus the Applicable
Percentage.
Interest on Revolving Loans shall be payable in arrears on
each Interest Payment Date.
(e) Revolving Notes. Each Lender's Revolving Commitment
Percentage of the Revolving Loans shall be evidenced by a duly executed
promissory note of the Borrower to such Lender in substantially the
form of Schedule 2.1(e).
Section 2.2 Term Loans.
(a) Term Loans. Subject to the terms and conditions hereof and
in reliance upon the representations and warranties set forth herein,
each Lender which has a Term Loan Commitment severally agrees to make
available to the Borrower on the Closing Date such Lender's Term Loan
Commitment Percentage of a term loan in Dollars (the "Term Loans") in
the aggregate principal amount of NINETY MILLION DOLLARS ($90,000,000)
(the "Term Loan Committed Amount") for the purposes hereinafter set
forth. The Term Loans may consist of Alternate Base Rate Loans or LIBOR
Rate Loans, or a combination thereof, as the Borrower may request.
Notwithstanding any provision herein to the contrary, the initial Term
Loan made on the Closing Date shall be made as an Alternate Base Rate
Loan and such Loan may be converted to one or more LIBOR Rate Loans not
earlier than the third Business Day following the Closing Date and at
any time thereafter in accordance with the provisions of this
Agreement. Amounts repaid on the Term Loans may not be reborrowed.
LIBOR Rate Loans shall be made by each Lender at its LIBOR Lending
Office and Alternate Base Rate Loans at its Domestic Lending Office.
(b) Repayment of Term Loan. The principal amount of the Term
Loans shall be repaid in twenty (20) consecutive calendar quarterly
installments, unless accelerated sooner pursuant to Section 7.2,
commencing on June 30, 2002 and ending on March 22, 2007. Each
installment shall be made in an amount equal to $4,500,000 (as such
amount may be reduced from time to time after giving effect to any
prepayments made under Section 2.7).
(c) Interest on the Term Loans. Subject to the provisions of
Section 2.9, the Term Loans shall bear interest as follows:
21
(i) Alternate Base Rate Loans. During such periods as
the Term Loans shall be comprised of Alternate Base Rate
Loans, each such Alternate Base Rate Loan shall bear interest
at a per annum rate equal to the sum of the Alternate Base
Rate plus the Applicable Percentage; and
(ii) LIBOR Rate Loans. During such periods as the
Term Loans shall be comprised of LIBOR Rate Loans, each such
LIBOR Rate Loan shall bear interest at a per annum rate equal
to the sum of the LIBOR Rate plus the Applicable Percentage.
Interest on the Term Loans shall be payable in
arrears on each Interest Payment Date.
(d) Term Notes. Each Lender's Term Loan Commitment Percentage
of the Term Loans outstanding as of the Closing Date shall be evidenced
by a duly executed promissory note of the Borrower to such Lender in
substantially the form of Schedule 2.2(d).
Section 2.3 Swingline Loan Subfacility.
(a) Swingline Commitment. Subject to the terms and conditions
hereof and in reliance upon the representations and warranties herein
set forth, the Swingline Lender, in its individual capacity, agrees to
make certain revolving credit loans requested by the Borrower in
Dollars to the Borrower (each a "Swingline Loan" and, collectively, the
"Swingline Loans") from time to time from the Closing Date until the
Maturity Date for the purposes hereinafter set forth; provided,
however, (i) the aggregate principal of Swingline Loans outstanding at
any time shall not exceed FIVE MILLION DOLLARS ($5,000,000) (the
"Swingline Committed Amount"), and (ii) the aggregate principal amount
of outstanding Revolving Loans plus the aggregate of principal of
outstanding Swingline Loans plus LOC Obligations shall not exceed the
lesser of (A) the Borrowing Base and (B) the aggregate Revolving
Committed Amount then in effect. Swingline Loans may be repaid and
reborrowed in accordance with the provisions hereof.
(b) Swingline Loan Advances.
(i) Notices; Disbursement. Whenever the Borrower desires
a Swingline Loan advance hereunder it shall give written
notice (or telephone notice promptly confirmed in writing) in
the form of a Notice of Borrowing to the Swingline Lender not
later than 1:00 P.M. (Charlotte, North Carolina time) in the
case of a Swingline Loan to be made in Dollars on the Business
Day of the requested Swingline Loan advance. Each such notice
shall be irrevocable and shall specify (A) that a Swingline
Loan advance is requested, (B) the date of the requested
Swingline Loan advance (which shall be a Business Day), and
(C) the principal amount of the Swingline Loan advance
requested. Each Swingline Loan shall have such maturity date
as the Swingline Lender and the Borrower shall agree upon
receipt by the Swingline Lender of the relevant Notice of
Borrowing from the Borrower, but in no event shall the
maturity of any Swingline Loan extend beyond the Maturity
Date. The Swingline Lender shall initiate the transfer of
funds representing the Swingline Loan advance to the Borrower
by 2:00 P.M. (Charlotte, North Carolina time or London,
England time, as applicable) on the Business Day of the
requested borrowing.
(ii) Minimum Amounts. Each Swingline Loan advance shall
be in a minimum amount of principal of $100,000 and in
integral multiples of $100,000 in excess thereof (or the
remaining amount of the Swingline Committed Amount, if less).
(iii) Repayment of Swingline Loans. The principal amount
of each Swingline Loan shall be due and payable on the
Maturity Date for such Swingline Loan. The Swingline Lender
may, at any time, upon the occurrence of a Swingline
Conversion Event, by written notice to the Borrower and the
Lenders, demand repayment of its Swingline Loans by way of a
Revolving Loan borrowing in the amount determined as of such
date of demand, in which case the Borrower shall be deemed to
have requested a Revolving Loan borrowing comprised solely of
Alternate Base Rate Loans in the amount of such Swingline
Loans; provided, however, that any such demand shall be deemed
to have been given one Business Day prior to the Maturity Date
and one Business Day prior to the date of the occurrence of
22
any Event of Default described in Section 7.1 and upon
acceleration of the indebtedness hereunder and the exercise of
remedies in accordance with the provisions of Section 7.2.
Each Lender hereby irrevocably agrees to make its pro rata
share of each such Revolving Loan 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 borrowings of Revolving
Loans otherwise required hereunder, (II) whether any
conditions specified in Article IV are then satisfied, (III)
whether a Default or an Event of Default then exists, (IV)
failure of any such request or deemed request for Revolving
Loans 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 reduction in the Revolving Committed Amount or
termination of the Revolving 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 U.S. Bankruptcy Code with respect to the Borrower),
each 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 Swingline
Lender such participations in all of the outstanding Swingline
Loans as shall be necessary to cause each such Lender to share
in such Swingline Loans ratably based upon its Revolving
Commitment Percentage (determined before giving effect to any
termination of the Commitments pursuant to Section 7.2),
provided that (A) all interest payable on the Swingline Loans
shall be for the account of the Swingline Lender until the
date as of which the respective participation is purchased and
(B) at the time any purchase of participations pursuant to
this sentence is actually made, the purchasing Lender shall be
required to pay to the Swingline Lender, interest on the
principal amount of such participation purchased for each day
from and including the day upon which such borrowing would
otherwise have occurred to but excluding the date of payment
for such participation, at the rate equal to, if paid within
two (2) Business Days of such borrowing, the Federal Funds
Rate and thereafter at the Alternate Base Rate.
(c) Interest on Swingline Loans. Subject to the provisions of
Section 2.9, each Swingline Loan shall bear interest at a per annum
rate equal to the sum of the Alternate Base Rate plus the Applicable
Percentage. Interest on Swingline Loans shall be payable in arrears on
the applicable Interest Payment Date (or at such other times as may be
specified herein).
(d) Prepayment. The Administrative Agent shall have the right
at any time to determine the amount of Swingline Loans outstanding and
require the prepayment of principal of Swingline Loans outstanding to
the extent, if any, that the aggregate principal amount of outstanding
Revolving Loans plus the aggregate principal amount of outstanding
Swingline Loans plus LOC Obligations exceeds the lesser of (A) the
Borrowing Base and (B) the aggregate Revolving Committed Amount.
(e) Payments. Each payment on account of the Swingline Loans
shall be made on the Maturity Date applicable thereto to the Swingline
Lender at the Swingline Lender's office for Dollar borrowings as
specified in Section 9.2 hereof in Dollars in immediately available
funds and shall be made without any set-off, counterclaim or deduction
whatsoever. Such payments shall be made no later than 1:00 p.m.
(Charlotte, North Carolina time) on the relevant date. Any payment
received after 1:00 p.m. (Charlotte, North Carolina time) shall be
deemed to have been made on the next succeeding Business Day. If any
payment of a Swingline Loan shall be specified to be made upon a day
which is not a Business Day, it shall be made on the next succeeding
day which is a Business Day and such extension of time shall in such
case be included in computing any interest if payable along with such
payment.
(f) Swingline Note. The Swingline Lender's Swingline
Commitment shall be evidenced by a duly executed promissory note of the
Borrower to the Swingline Lender in substantially the form of Schedule
2.3(f).
23
Section 2.4 Letter of Credit Subfacility.
(a) Issuance. Subject to the terms and conditions hereof and
of the LOC Documents, if any, and any other terms and conditions which
the Issuing Lender may reasonably require, during the Commitment Period
the Issuing Lender shall issue, and the Lenders having a Revolving
Commitment shall participate in, Letters of Credit for the account of
the Borrower from time to time upon request in a form acceptable to the
Issuing Lender; provided, however, that (i) the aggregate amount of LOC
Obligations shall not at any time exceed the LOC Committed Amount, (ii)
the sum of the aggregate amount of Revolving Loans outstanding plus LOC
Obligations plus the aggregate amount of Swingline Loans outstanding
shall not at any time exceed the lesser of (A) the Borrowing Base and
(B) the aggregate Revolving Committed Amount then in effect, (iii) all
Letters of Credit shall be denominated in U.S. Dollars and (iv) Letters
of Credit shall be issued for any lawful corporate purposes and may be
issued as standby letters of credit, including in connection with
workers' compensation and other insurance programs, and trade letters
of credit. Except as otherwise expressly agreed upon in writing by all
the Lenders, no Letter of Credit shall have an original expiry date
more than twelve (12) months from the date of issuance; provided,
however, so long as no Default or Event of Default has occurred and is
continuing and subject to the other terms and conditions to the
issuance of Letters of Credit hereunder, the expiry dates of Letters of
Credit may be extended annually or periodically from time to time on
the request of the Borrower or by operation of the terms of the
applicable Letter of Credit to a date not more than twelve (12) months
from the date of extension; provided, further, that no Letter of
Credit, as originally issued or as extended, shall have an expiry date
extending beyond the fifth day before the Revolving Commitment
Termination Date. Each Letter of Credit shall comply with the related
LOC Documents. The issuance and expiry date of each Letter of Credit
shall be a Business Day. Any Letters of Credit issued hereunder other
than the Seller Note Letters of Credit shall be in a minimum original
face amount of $250,000. There will be no more than five (5) Letters of
Credit outstanding at any time, excluding the Seller Note Letters of
Credit.
(b) Notice and Reports. The request for the issuance of a
Letter of Credit issued after the Closing Date shall be submitted to
the Issuing Lender at least five (5) Business Days prior to the
requested date of issuance. The Issuing Lender will promptly upon
request provide to the Administrative Agent for dissemination to the
Lenders which have a Revolving Commitment a detailed report specifying
the Letters of Credit which are then issued and outstanding and any
activity with respect thereto which may have occurred since the date of
any prior report, and including therein, among other things, the
account party, the beneficiary, the face amount, expiry date as well as
any payments or expirations which may have occurred. The Issuing Lender
will further provide to the Administrative Agent promptly upon request
copies of the Letters of Credit. The Issuing Lender will provide to the
Administrative Agent promptly upon request a summary report of the
nature and extent of LOC Obligations then outstanding.
(c) Participations. Each Lender upon issuance of a Letter of
Credit shall be deemed to have purchased without recourse a risk
participation from the Issuing Lender in such Letter of Credit and the
obligations arising thereunder and any collateral relating thereto, in
each case in an amount equal to its LOC Commitment Percentage of the
obligations under such Letter of Credit and shall absolutely,
unconditionally and irrevocably assume, as primary obligor and not as
surety, and be obligated to pay to the Issuing Lender therefor and
discharge when due, its LOC Commitment Percentage of the obligations
arising under such Letter of Credit. Without limiting the scope and
nature of each Lender's participation in any Letter of Credit, to the
extent that the Issuing Lender has not been reimbursed as required
hereunder or under any LOC Document, each such Lender shall pay to the
Issuing Lender its LOC Commitment Percentage of such unreimbursed
drawing in same day funds on the day of notification by the Issuing
Lender of an unreimbursed drawing pursuant to the provisions of
subsection (d) hereof. The obligation of each Lender to so reimburse
the Issuing Lender shall be absolute and unconditional and shall not be
affected by the occurrence of a Default, an Event of Default or any
other occurrence or event. Any such reimbursement shall not relieve or
otherwise impair the obligation of the Borrower to reimburse the
Issuing Lender under any Letter of Credit, together with interest as
hereinafter provided.
(d) Reimbursement. In the event of any drawing under any
Letter of Credit, the Issuing Lender will promptly notify the Borrower
and the Administrative Agent. The Borrower shall reimburse the Issuing
24
Lender on the day of drawing under any Letter of Credit (either with
the proceeds of a Swingline Loan or a Revolving Loan obtained hereunder
or otherwise) in same day funds as provided herein or in the LOC
Documents. If the Borrower shall fail to reimburse the Issuing Lender
as provided herein, the unreimbursed amount of such drawing shall bear
interest at a per annum rate equal to the ABR Default Rate. Unless the
Borrower shall immediately notify the Issuing Lender and the
Administrative Agent of its intent to otherwise reimburse the Issuing
Lender, the Borrower shall be deemed to have requested a Swingline
Loan, or if and to the extent Swingline Loans are not available, a
Revolving Loan in the amount of the drawing as provided in subsection
(e) hereof, the proceeds of which will be used to satisfy the
reimbursement obligations. The Borrower's reimbursement obligations
hereunder shall be absolute and unconditional under all circumstances
irrespective of any rights of set-off, counterclaim or defense to
payment the Borrower may claim or have against the Issuing Lender, the
Administrative Agent, the Security Trustee, the Lenders, the
beneficiary of the Letter of Credit drawn upon or any other Person,
including without limitation any defense based on any failure of the
Borrower to receive consideration or the legality, validity, regularity
or unenforceability of the Letter of Credit. The Issuing Lender will
promptly notify the other Lenders of the amount of any unreimbursed
drawing and each Lender shall promptly pay to the Administrative Agent
for the account of the Issuing Lender, in Dollars and in immediately
available funds, the amount of such Lender's LOC Commitment Percentage
of such unreimbursed drawing. Such payment shall be made on the day
such notice is received by such Lender from the Issuing Lender if such
notice is received at or before 2:00 P.M. (Charlotte, North Carolina
time), otherwise such payment shall be made at or before 12:00 Noon
(Charlotte, North Carolina time) on the Business Day next succeeding
the day such notice is received. If such Lender does not pay such
amount to the Issuing Lender in full upon such request, such Lender
shall, on demand, pay to the Administrative Agent for the account of
the Issuing Lender interest on the unpaid amount during the period from
the date of such drawing until such Lender pays such amount to the
Issuing Lender in full at a rate per annum equal to, if paid within two
(2) Business Days of the date of drawing, the Federal Funds Effective
Rate and thereafter at a rate equal to the Alternate Base Rate. Each
Lender's obligation to make such payment to the Issuing Lender, and the
right of the Issuing Lender to receive the same, shall be absolute and
unconditional, shall not be affected by any circumstance whatsoever and
without regard to the termination of this Agreement or the Commitments
hereunder, the existence of a Default or Event of Default or the
acceleration of the Credit Party Obligations hereunder and shall be
made without any offset, abatement, withholding or reduction
whatsoever.
(e) Repayment with Revolving Loans. On any day on which the
Borrower shall have requested, or been deemed to have requested, (i) a
Swingline Loan borrowing to reimburse a drawing under a Letter of
Credit, the Swingline Lender shall make the Swingline Loan Advance
pursuant to the terms of the request or deemed request in accordance
with the provisions for Swingline Loan advances hereunder, or (ii) a
Revolving Loan to reimburse a drawing under a Letter of Credit, the
Administrative Agent shall give notice to the Lenders which have a
Revolving Commitment that a Revolving Loan has been requested or deemed
requested in connection with a drawing under a Letter of Credit, in
which case a Revolving Loan borrowing comprised entirely of Alternate
Base Rate Loans (each such borrowing, a "Mandatory Borrowing") shall be
immediately made (without giving effect to any termination of the
Commitments pursuant to Section 7.2) pro rata based on each Lender's
respective Revolving Commitment Percentage (determined before giving
effect to any termination of the Commitments pursuant to Section 7.2)
and the proceeds thereof shall be paid directly to the Issuing Lender
for application to the respective LOC Obligations. Each Lender hereby
irrevocably agrees to make such Revolving Loans promptly upon any such
request or deemed request on account of each Mandatory Borrowing in the
amount and in the manner specified in the preceding sentence and on the
same such date notwithstanding (i) the amount of Mandatory Borrowing
may not comply with the minimum amount for borrowings of Revolving
Loans otherwise required hereunder, (ii) whether any conditions
specified in Section 4.2 are then satisfied, (iii) whether a Default or
an Event of Default then exists, (iv) the failure of any such request
or deemed request for a Revolving Loan to be made by the time otherwise
required in Section 2.1(b), (v) the date of such Mandatory Borrowing or
(vi) any reduction in the Revolving Committed Amount after any such
Letter of Credit may have been drawn upon; provided, however, that in
the event any such Mandatory Borrowing should be less than the minimum
amount for borrowings of Revolving Loans otherwise provided in Section
2.1(b)(ii), the Borrower shall pay to the Administrative Agent for its
own account an administrative fee of $500. In the event that any
Mandatory Borrowing cannot for any reason be made on the date otherwise
25
required above (including, without limitation, as a result of the
commencement of a proceeding under the Bankruptcy Code with respect to
the Borrower), then each such Lender hereby agrees that it shall
forthwith fund (as of the date the Mandatory Borrowing would otherwise
have occurred, but adjusted for any payments received from the Borrower
on or after such date and prior to such purchase) its Participation
Interests in the outstanding unreimbursed drawings under Letters of
Credit; provided, further, that in the event any Lender shall fail to
fund its Participation Interest on the day the Mandatory Borrowing
would otherwise have occurred, then the amount of such Lender's
unfunded Participation Interest therein shall bear interest payable to
the Issuing Lender upon demand, at the rate equal to, if paid within
two (2) Business Days of such date, the Federal Funds Effective Rate,
and thereafter at a rate equal to the Alternate Base Rate.
(f) Modification, Extension. The issuance of any supplement,
modification, amendment, renewal, or extension to any Letter of Credit
shall, for purposes hereof, be treated in all respects the same as the
issuance of a new Letter of Credit hereunder.
(g) Uniform Customs and Practices. The Issuing Lender shall
have the Letters of Credit be subject to The Uniform Customs and
Practice for Documentary Credits, as published as of the date of issue
by the International Chamber of Commerce (the "UCP"), in which case the
UCP may be incorporated therein and deemed in all respects to be a part
thereof.
Section 2.5 Fees.
(a) Commitment Fee. In consideration of the Revolving
Commitment, the Borrower agrees to pay to the Administrative Agent for
the ratable benefit of the Lenders holding a Revolving Commitment a
commitment fee (the "Commitment Fee") in an amount equal to the
Applicable Percentage per annum of the average daily unused amount of
the aggregate Revolving Committed Amount then in effect. The Commitment
Fee shall be payable quarterly in arrears not later than three (3) days
following the last day of each calendar quarter for the prior calendar
quarter.
(b) Letter of Credit Fees. In consideration of the LOC
Commitments, the Borrower agrees to pay to the Issuing Lender a fee
(the "Letter of Credit Fee") equal to the Applicable Percentage per
annum of the average daily maximum amount available to be drawn under
each Letter of Credit from the date of issuance to the date of
expiration. In addition to such Letter of Credit Fee, the Issuing
Lender may charge, and retain for its own account without sharing by
the other Lenders, an additional facing fee (the "Facing Fee") of
one-eighth of one percent (1/8%) per annum of the average daily maximum
amount available to be drawn under each such Letter of Credit issued by
it. The Issuing Lender shall promptly pay over to the Administrative
Agent for the ratable benefit of the Lenders (including the Issuing
Lender) the Letter of Credit Fee. The Letter of Credit Fee and the
Facing Fee shall be payable quarterly in arrears not later than three
(3) days following the last day of each calendar quarter for the prior
calendar quarter.
(c) Issuing Lender Fees. In addition to the Letter of Credit
Fee and the Facing Fee payable pursuant to subsection (b) hereof, the
Borrower shall pay to the Issuing Lender for its own account without
sharing by the other Lenders the reasonable and customary charges from
time to time of the Issuing Lender with respect to the amendment,
transfer, administration, cancellation and conversion of, and drawings
under, the Letters of Credit (collectively, the "Issuing Lender Fees").
(d) Agent's Fees. The Borrower agrees to pay to the
Administrative Agent the annual administrative fee and the other fees
as described in the Fee Letter at the times, in the amounts and in the
manner set forth therein.
Section 2.6 Commitment Reductions.
(a) Voluntary Reductions. The Borrower shall have the right to
terminate or permanently reduce the unused portion of the Revolving
Committed Amount at any time or from time to time upon not less than
five Business Days' prior notice to the Administrative Agent (which
shall notify the Lenders thereof as soon as practicable) of each such
26
termination or reduction, which notice shall specify the effective date
thereof and the amount of any such reduction which shall be in a
minimum amount of $5,000,000 or a whole multiple of $5,000,000 in
excess thereof and shall be irrevocable and effective upon receipt by
the Administrative Agent, provided, that no such reduction or
termination shall be permitted if after giving effect thereto, and to
any prepayments of the Revolving Loans made on the effective date
thereof, the sum of the then outstanding aggregate principal amount of
the Revolving Loans plus the then outstanding amount of principal of
Swingline Loans plus LOC Obligations would exceed the lesser of (A) the
Borrowing Base and (B) the aggregate Revolving Committed Amount then in
effect.
(b) Mandatory Reductions. On any date that the Revolving Loans
are required to be prepaid pursuant to the terms of Section 2.7(b)(ii),
(iii), and (v), the Revolving Committed Amount shall be automatically
permanently reduced by the amount of such required prepayment and/or
reduction.
(c) Revolving Commitment Termination Date. The Revolving
Commitment, the Swingline Commitment and the LOC Commitment shall
automatically terminate on the Revolving Commitment Termination Date.
Section 2.7 Prepayments.
(a) Optional Prepayments. The Borrower shall have the right to
prepay Loans in whole or in part from time to time; provided, however,
that each partial prepayment of Revolving Loans and Term Loans shall be
in a minimum principal amount of $2,000,000 and integral multiples of
$500,000 in excess thereof and each partial prepayment of Swingline
Loans shall be in a minimum principal amount of $100,000 and integral
multiples of $100,000 in excess thereof. The Borrower shall give three
Business Days' irrevocable notice in the case of LIBOR Rate Loans and
one Business Day's irrevocable notice in the case of Alternate Base
Rate Loans and Swingline Loans, to the Administrative Agent (which
shall notify the Lenders thereof as soon as practicable). Subject to
the foregoing terms, amounts prepaid under this Section 2.7(a) shall be
applied as the Borrower may elect (subject to pro rata treatment of
Lenders receiving any such prepayment); provided, however, that, with
respect to Term Loans, any proceeds from a single prepayment shall be
applied to reduce the Term Loans pro rata with respect to each
remaining installment of principal. All prepayments under this Section
2.7(a) shall be subject to Section 2.17, but otherwise without premium
or penalty. Interest on the principal amount prepaid shall be due and
payable on any date that a prepayment is made hereunder through the
date of prepayment. Amounts prepaid on the Revolving Loans and
Swingline Loans may be reborrowed in accordance with the terms hereof.
Amounts prepaid on the Term Loans may not be reborrowed.
(b) Mandatory Prepayments.
(i) Revolving Committed Amount. If at any time after
the Closing Date, the sum of the aggregate principal amount of
outstanding Revolving Loans plus the aggregate amount of
principal of outstanding Swingline Loans plus LOC Obligations
shall exceed the lesser of (A) the Borrowing Base and (B) the
aggregate Revolving Committed Amount then in effect, the
Borrower immediately shall prepay the Revolving Loans and
(after all Revolving Loans have been repaid) cash
collateralize the LOC Obligations, in an amount sufficient to
eliminate such excess.
(ii) Asset Dispositions. To the extent of cash
proceeds received in connection with an Asset Disposition
which are not applied in accordance with Section 6.5(a)(ii),
immediately following the 180th day occurring after the
receipt by a Consolidated Party of such cash proceeds, the
Borrower shall prepay the Loans in an aggregate amount equal
to 100% of the Net Cash Proceeds derived from such Asset
Disposition (such prepayment to be applied as set forth in
clause (vi) below).
(iii) Debt Issuances. Immediately upon receipt by any
Credit Party of proceeds from any Debt Issuance, the Borrower
27
shall prepay the Loans in an aggregate amount equal to 100% of
the Net Cash Proceeds of such Debt Issuance (such prepayment
to be applied as set forth in clause (vi) below).
(iv) Issuances of Equity. Immediately upon receipt by
a Credit Party of proceeds from any Equity Issuance (other
than an Equity Issuance related to the exercise of options or
warrants, with respect to which the Borrower will have thirty
days from the end of the fiscal quarter in which such Equity
Issuance occurs), the Borrower shall prepay the Loans in an
aggregate amount equal to 100% of the Net Cash Proceeds of
such Equity Issuance (such prepayment to be applied as set
forth in clause (vi) below); provided, however, that (A) such
Net Cash Proceeds shall not be required to be used to prepay
the Loans to the extent that they arose from equity issued to
finance a Permitted Acquisition, and (B) immediately upon
receipt by a Credit Party of proceeds from any Equity Issuance
after the Term Loans have been repaid in full, the Borrower
shall prepay the Loans in an aggregate amount equal to 50% of
the Net Cash Proceeds derived from the Equity Issuance by Way
Station in connection with an initial public offering of the
Capital Stock of Way Station.
(v) Recovery Event. To the extent of cash proceeds
received in connection with a Recovery Event which are not
applied in accordance with Section 6.5(a)(ii), immediately
following the 180th day occurring after the receipt by a
Consolidated Party of such cash proceeds, the Borrower shall
prepay the Loans in an aggregate amount equal to 100% of such
cash proceeds (such prepayment to be applied as set forth in
clause (vi) below).
(vi) Application of Mandatory Prepayments. All
amounts required to be paid pursuant to this Section 2.7(b)
shall be applied as follows: (A) with respect to all amounts
prepaid pursuant to Section 2.7(b)(i), to Revolving Loans and
(after all Revolving Loans have been repaid) to a cash
collateral account in respect of LOC Obligations and (B) with
respect to all amounts prepaid pursuant to Sections 2.7(b)(ii)
through (v) inclusive, (1) first, to the Term Loans (to the
remaining amortization payments in inverse order of maturity)
until paid in full and (2) second, to the Revolving Loans and
(after all Revolving Loans have been repaid) to a cash
collateral account in respect of LOC Obligations. Within the
parameters of the applications set forth above, prepayments
shall be applied first to Alternate Base Rate Loans and then
to LIBOR Rate Loans in direct order of Interest Period
maturities. All prepayments under this Section 2.7(b) shall be
subject to Section 2.17 and be accompanied by interest on the
principal amount prepaid through the date of prepayment.
(vii) Excess Cash Flow. Within 95 days after the end
of each fiscal year (commencing with the fiscal year ending
December 31, 2002), the Borrower shall prepay the loans in an
amount equal to 75% of Excess Cash Flow for such prior fiscal
year (such prepayment to be applied as set forth in clause
(vi) above); provided, however, if the Leverage Ratio at the
end of such fiscal year is less than 1.5 to 1.0, then such
percentage shall be reduced to 50%; provided, further, no such
mandatory repayment of Excess Cash Flow shall be required at
such time as the Term Loans have been prepaid in full.
Interest on the principal amount prepaid shall be due and payable on
any date that a prepayment is made hereunder through the date of
prepayment. Amounts prepaid on the Revolving Loans may be reborrowed in
accordance with the terms hereof. Amounts prepaid on the Term Loans may
not be reborrowed.
Section 2.8 Minimum Principal Amount of Tranches.
All borrowings, payments and prepayments in respect of Revolving Loans
and Term Loans shall be in such amounts and be made pursuant to such elections
so that after giving effect thereto the aggregate principal amount of the
Revolving Loans and Term Loans comprising any Tranche shall not be less than
$2,000,000 or a whole multiple of $500,000 in excess thereof.
28
Section 2.9 Default Rate and Payment Dates.
(a) If all or a portion of the principal amount of any Loan
which is a LIBOR Rate Loan shall not be paid when due or continued as a
LIBOR Rate Loan in accordance with the provisions of Section 2.10
(whether at the stated maturity, by acceleration or otherwise), such
overdue principal amount of such Loan shall be converted to an
Alternate Base Rate Loan at the end of the Interest Period applicable
thereto.
(b) During the continuance of an Event of Default, the
Required Lenders may, at their option, by notice to the Borrower and
the Administrative Agent (which notice may be revoked at the option of
the Required Lenders notwithstanding any provision of Section 9.1
requiring unanimous consent of the Lenders to changes in interest
rates), declare that interest shall accrue on all Loans at a rate per
annum which is equal to the Alternate Base Rate plus the Applicable
Percentage for the respective type of Loan determined based on Level I
plus two percent (2%) (the "ABR Default Rate"). Interest shall accrue
at the ABR Default Rate from the date of the Event of Default until all
amounts due and payable have been paid in full. Notwithstanding
anything to the contrary contained in this Section 2.9(b), during the
continuance of an Event of Default under Section 7.1(a) or Section
7.1(e), the ABR Default Rate shall apply to all Loans without any
election or action on the part of the Administrative Agent, the
Required Lenders or any Lender.
(c) Interest on each Loan shall be payable in arrears on each
Interest Payment Date, provided that interest accruing pursuant to
paragraph (b) of this Section 2.9 shall be payable from time to time on
demand.
Section 2.10 Conversion Options.
(a) The Borrower may, in the case of Revolving Loans and the
Term Loans, elect from time to time to convert Alternate Base Rate
Loans to LIBOR Rate Loans, by giving the Administrative Agent at least
three Business Days' prior irrevocable written notice of such election.
In addition, the Borrower may elect from time to time to convert LIBOR
Rate Loans to Alternate Base Rate Loans, by giving the Administrative
Agent irrevocable written notice by 11:00 A.M. (Charlotte, North
Carolina time) on the proposed date of conversion. A form of Notice of
Conversion is attached as Schedule 2.10. If the date upon which an
Alternate Base Rate Loan is to be converted to a LIBOR Rate Loan is not
a Business Day, then such conversion shall be made on the next
succeeding Business Day. All or any part of outstanding Alternate Base
Rate Loans may be converted as provided herein, provided that (i) no
Loan may be converted into a LIBOR Rate Loan when any Default or Event
of Default has occurred and is continuing and (ii) partial conversions
shall be in an aggregate principal amount of $2,000,000 or a whole
multiple of $500,000 in excess thereof. LIBOR Rate Loans may only be
converted to Alternate Base Rate Loans on the last day of the
applicable Interest Period. If the date upon which a LIBOR Rate Loan is
to be converted to an Alternate Base Rate Loan is not a Business Day,
then such conversion shall be made on the next succeeding Business Day
and during the period from such last day of an Interest Period to such
succeeding Business Day such Loan shall bear interest as if it were an
Alternate Base Rate Loan.
(b) Any LIBOR Rate Loans may be continued as such upon the
expiration of an Interest Period with respect thereto by compliance by
the Borrower with the notice provisions contained in Section 2.10(a);
provided, that no LIBOR Rate Loan may be continued as such when any
Default or Event of Default has occurred and is continuing, in which
case such Loan shall be automatically converted to an Alternate Base
Rate Loan at the end of the applicable Interest Period with respect
thereto. If the Borrower shall fail to give timely notice of an
election to continue a LIBOR Rate Loan, or the continuation of LIBOR
Rate Loans is not permitted hereunder, such LIBOR Rate Loans shall be
automatically converted to Alternate Base Rate Loans at the end of the
applicable Interest Period with respect thereto.
Section 2.11 Computation of Interest and Fees.
(a) All fees, interest and all other amounts payable hereunder
shall be calculated on the basis of a 360 day year for the actual days
elapsed (except that for any such amount which bears interest at the
Alternate Base Rate when the Prime Rate is in effect, such amounts
shall be calculated on the basis of a 365 day or 366 day year, as the
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case may be, for the actual days elapsed). The Administrative Agent
shall as soon as practicable notify the Borrower and the Lenders of
each determination of a LIBOR Rate on the Business Day of the
determination thereof. Any change in the interest rate on a Loan
resulting from a change in the Alternate Base Rate shall become
effective as of the opening of business on the day on which such change
in the Alternate Base Rate shall become effective. The Administrative
Agent shall as soon as practicable notify the Borrower and the Lenders
of the effective date and the amount of each change.
(b) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall
be conclusive and binding on the Borrower and the Lenders in the
absence of manifest error. The Administrative Agent shall, at the
request of the Borrower, deliver to the Borrower a statement showing
the computations used by the Administrative Agent in determining any
interest rate.
Section 2.12 Pro Rata Treatment and Payments.
Each borrowing of Revolving Loans and any reduction of the Revolving
Commitments shall be made pro rata according to the respective Revolving
Commitment Percentages of the Lenders. Each payment under this Agreement or any
Revolving Note or Term Note shall be applied pro rata, first, to any fees then
due and owing by the Borrower pursuant to Section 2.5, second, to interest then
due and owing in respect of such Notes of the Borrower and, third, to principal
then due and owing hereunder and under such Notes of the Borrower. Each payment
on account of any fees pursuant to Section 2.5 shall be made pro rata in
accordance with the respective amounts due and owing (except as to the portion
of the Letter of Credit retained by the Issuing Lender and the Issuing Lender
Fees). Each payment (other than prepayments) by the Borrower on account of
principal of and interest on the Revolving Loans and on the Term Loans shall be
made pro rata according to the respective amounts due and owing in accordance
with Section 2.1, and 2.2 hereof. Each optional prepayment on account of
principal of the Loans shall be applied in accordance with Section 2.7(a);
provided, that prepayments made pursuant to Section 2.15 shall be applied in
accordance with such section. Each mandatory prepayment on account of principal
of the Loans shall be applied in accordance with Section 2.7(b). All payments
(including prepayments) to be made by the Borrower on account of principal,
interest and fees shall be made without defense, set-off or counterclaim (except
as provided in Section 2.18) and shall be made to the Administrative Agent for
the account of the Lenders at the Administrative Agent's office specified on
Schedule 9.2 in Dollars and in immediately available funds not later than 1:00
P.M. (Charlotte, North Carolina time) on the date when due. The Administrative
Agent shall distribute such payments to the Lenders entitled thereto promptly
upon receipt in like funds as received. If any payment hereunder (other than
payments on the LIBOR Rate Loans) becomes due and payable on a day other than a
Business Day, such payment shall be extended to the next succeeding Business
Day, and, with respect to payments of principal, interest thereon shall be
payable at the then applicable rate during such extension. If any payment on a
LIBOR Rate Loan becomes due and payable on a day other than a Business Day, the
maturity thereof shall be extended to the next succeeding Business Day unless
the result of such extension would be to extend such payment into another
calendar month, in which event such payment shall be made on the immediately
preceding Business Day.
Section 2.13 Non-Receipt of Funds by the Administrative Agent.
(a) Unless the Administrative Agent shall have been notified
in writing by a Lender prior to the date a Loan is to be made by such
Lender (which notice shall be effective upon receipt) that such Lender
does not intend to make the proceeds of such Loan available to the
Administrative Agent, the Administrative Agent may assume that such
Lender has made such proceeds available to the Administrative Agent on
such date, and the Administrative Agent may in reliance upon such
assumption (but shall not be required to) make available to the Borrower
a corresponding amount. If such corresponding amount is not in fact made
30
available to the Administrative Agent, the Administrative Agent shall be
able to recover such corresponding amount from such Lender. If such
Lender does not pay such corresponding amount forthwith upon the
Administrative Agent's demand therefor, the Administrative Agent will
promptly notify the Borrower, and the Borrower shall immediately pay
such corresponding amount to the Administrative Agent. The
Administrative Agent shall also be entitled to recover from such Lender
or the Borrower, as the case may be, interest on such corresponding
amount in respect of each day from the date such corresponding amount
was made available by the Administrative Agent to the Borrower to the
date such corresponding amount is recovered by the Administrative Agent
at a per annum rate equal to (i) from the Borrower at the applicable
rate for the applicable borrowing pursuant to the Notice of Borrowing
and (ii) from such Lender at the Federal Funds Effective Rate. The
failure of any Lender to make any Loan to be made by it hereunder shall
not relieve any other Lender of its obligation hereunder, if any, to
make any Loan, but no Lender shall be responsible for the failure of any
other Lender to make the Loan to be made by such other Lender.
(b) Unless the Administrative Agent shall have been notified
in writing by the Borrower, prior to the date on which any payment is
due from it hereunder (which notice shall be effective upon receipt)
that the Borrower does not intend to make such payment, the
Administrative Agent may assume that such Borrower has made such
payment when due, and the Administrative Agent may in reliance upon
such assumption (but shall not be required to) make available to each
Lender on such payment date an amount equal to the portion of such
assumed payment to which such Lender is entitled hereunder, and if the
Borrower has not in fact made such payment to the Administrative Agent,
such Lender shall, on demand, repay to the Administrative Agent the
amount made available to such Lender. If such amount is repaid to the
Administrative Agent on a date after the date such amount was made
available to such Lender, such Lender shall pay to the Administrative
Agent on demand interest on such amount in respect of each day from the
date such amount was made available by the Administrative Agent to such
Lender to the date such amount is recovered by the Administrative Agent
at a per annum rate equal to the Federal Funds Effective Rate.
(c) A certificate of the Administrative Agent submitted to the
Borrower or any Lender with respect to any amount owing under this
Section 2.13 shall be conclusive in the absence of manifest error.
Section 2.14 Inability to Determine Interest Rate.
Notwithstanding any other provision of this Agreement, if for any
Interest Period in respect of a LIBOR Rate Loan (i) the Administrative Agent
shall reasonably determine (which determination shall be conclusive and binding
absent manifest error) that, by reason of circumstances affecting the relevant
market, reasonable and adequate means do not exist for ascertaining the LIBOR
Rate for such Interest Period, or (ii) the Required Lenders shall reasonably
determine (which determination shall be conclusive and binding absent manifest
error) that the LIBOR Rate does not adequately and fairly reflect the cost to
such Lenders of funding LIBOR Rate Loans that the Borrower has requested be
outstanding as a LIBOR Rate Loan during such Interest Period, the Administrative
Agent shall forthwith give telephone notice of such determination, confirmed in
writing, to the Borrower, and the Lenders at least two Business Days prior to
the first day of such Interest Period. Unless the Borrower shall have notified
the Administrative Agent upon receipt of such telephone notice that it wishes to
rescind or modify its request regarding such LIBOR Rate Loans, any Loans that
were requested to be made as LIBOR Rate Loans shall be made as Alternate Base
Rate Loans and any Loans that were requested to be converted into or continued
as LIBOR Rate Loans shall be converted into Alternate Base Rate Loans. Until any
such notice has been withdrawn by the Administrative Agent, no further Loans
shall be made as, continued as, or converted into, LIBOR Rate Loans for the
Interest Periods so affected.
Section 2.15 Illegality.
Notwithstanding any other provision of this Agreement, if the adoption
of or any change in any Requirement of Law or in the interpretation or
application thereof by the relevant Governmental Authority to any Lender shall
make it unlawful for such Lender or its LIBOR Lending Office to make or maintain
LIBOR Rate Loans as contemplated by this Agreement or to obtain in the London
interbank market through its LIBOR Lending Office the funds with which to make
such Loans, (a) such Lender shall promptly notify the Administrative Agent and
the Borrower thereof, (b) the commitment of such Lender hereunder to make LIBOR
Rate Loans or continue LIBOR Rate Loans as such shall forthwith be suspended
until the Lender shall notify the Administrative Agent that the condition or
situation which gave rise to the suspension shall no longer exist, and (c) such
Lender's Loans then outstanding as LIBOR Rate Loans, if any, shall be converted
on the last day of the Interest Period for such Loans or within such earlier
period as required by law as Alternate Base Rate Loans. The Borrower hereby
agrees promptly to pay any Lender, upon its demand, any additional amounts
necessary to compensate such Lender for actual and direct costs (but not
including anticipated profits) reasonably incurred by such Lender in making any
repayment in accordance with this Section including, but not limited to, any
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interest or fees payable by such Lender to lenders of funds obtained by it in
order to make or maintain its LIBOR Rate Loans hereunder. A certificate as to
any additional amounts payable (including a calculation thereof in reasonable
detail) pursuant to this Section shall be submitted by such Lender, through the
Administrative Agent, to the Borrower and such certificate shall be conclusive
in the absence of manifest error. Each Lender agrees to use reasonable efforts
(including reasonable efforts to change its LIBOR Lending Office) to avoid or to
minimize any amounts which may otherwise be payable pursuant to this Section;
provided, however, that such efforts shall not cause the imposition on such
Lender of any additional costs or legal or regulatory burdens deemed by such
Lender in its sole discretion to be material.
Section 2.16 Requirements of Law.
(a) If the adoption of or any change in any Requirement of Law
or in the interpretation or application thereof or compliance by any
Lender with any request or directive (whether or not having the force
of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:
(i) shall subject such Lender to any tax of any kind
whatsoever with respect to any Letter of Credit, any
participation therein or any application relating thereto, any
LIBOR Rate Loan made by it, or change the basis of taxation of
payments to such Lender in respect thereof (except for changes
in the rate of tax on the overall net income of such Lender);
(ii) shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar
requirement against assets held by, deposits or other
liabilities in or for the account of, advances, loans or other
extensions of credit by, or any other acquisition of funds by,
any office of such Lender which is not otherwise included in
the determination of the LIBOR Rate hereunder; or
(iii) shall impose on such Lender any other
condition;
and the result of any of the foregoing is to increase the cost to such
Lender of making or maintaining LIBOR Rate Loans or the Letters of
Credit or the participations therein or to reduce any amount receivable
hereunder or under any Note by an amount with such Lender deems to be
material, then, in any such case, the Borrower shall promptly pay such
Lender, upon its demand, any additional amounts necessary to compensate
such Lender for such additional cost or reduced amount receivable which
such Lender reasonably deems to be material as determined by such
Lender with respect to its LIBOR Rate Loans or Letters of Credit. A
certificate as to any additional amounts payable pursuant to this
Section, including a calculation thereof in reasonable detail, shall be
submitted by such Lender, through the Administrative Agent, to the
Borrower and such certificate shall be conclusive in the absence of
manifest error. Each Lender agrees to use reasonable efforts (including
reasonable efforts to change its Domestic Lending Office or LIBOR
Lending Office, as the case may be) to avoid or to minimize any amounts
which might otherwise be payable pursuant to this paragraph of this
Section; provided, however, that such efforts shall not cause the
imposition on such Lender of any additional costs or legal or
regulatory burdens deemed by such Lender to be material.
(b) If any Lender shall have reasonably determined that the
adoption of or any change in any Requirement of Law regarding capital
adequacy or in the interpretation or application thereof or compliance
by such Lender or any corporation controlling such Lender with any
request or directive regarding capital adequacy (whether or not having
the force of law) from any central bank or Governmental Authority made
subsequent to the date hereof does or shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder to a level below that which
such Lender or such corporation could have achieved but for such
adoption, change or compliance (taking into consideration such Lender's
or such corporation's policies with respect to capital adequacy) by an
amount reasonably deemed by such Lender to be material, then from time
to time, within fifteen (15) days after demand by such Lender, the
Borrower shall pay to such Lender such additional amount as shall be
certified by such Lender as being required to compensate it for such
32
reduction. Such a certificate as to any additional amounts payable
under this Section submitted by a Lender (which certificate shall
include a description of the basis for the computation), through the
Administrative Agent, to the Borrower shall be conclusive absent
manifest error; provided, that the Borrower shall not be required to
compensate a Lender pursuant to this Section 2.16(b) for any amounts
incurred more than six (6) months prior to the date that such Lender
notifies the Borrower of such Lender's intention to claim compensation
therefor; and provided, further, that if the circumstances giving rise
to such claim have a retroactive effect, then such six (6)-month period
shall be extended to include the period of such retroactive effect.
(c) Without prejudice to the survival of any other agreement
of the Credit Parties hereunder, the agreements and obligations of the
Credit Parties contained in this Section 2.16 shall survive the
repayment of the Loans, LOC Obligations and other obligations under the
Credit Documents and the termination of the Commitments hereunder.
Section 2.17 Indemnity.
The Borrower hereby agrees to indemnify each Lender and to hold such
Lender harmless from any funding loss or expense which such Lender may sustain
or incur as a consequence of (a) the failure by the Borrower to pay the
principal amount of or interest on any LIBOR Rate Loan made by such Lender in
accordance with the terms hereof, (b) the failure of the Borrower to accept a
LIBOR Rate borrowing after the Borrower has given a notice in accordance with
the terms hereof, (c) the failure of the Borrower to make any prepayment of a
LIBOR Rate Loan after the Borrower has given a notice in accordance with the
terms hereof, and/or (d) the making by the Borrower of a prepayment of a LIBOR
Rate Loan, or the conversion thereof, on a day which is not the last day of the
Interest Period with respect thereto, in each case including, but not limited
to, any such loss or expense arising from interest or fees payable by such
Lender to lenders of funds obtained by it in order to maintain its LIBOR Rate
Loans hereunder. A certificate as to any additional amounts payable pursuant to
this Section shall be submitted by any Lender claiming compensation hereunder,
through the Administrative Agent, to the Borrower (which certificate must be
delivered to the Administrative Agent within thirty days following such default,
prepayment or conversion) shall be conclusive in the absence of manifest error.
The agreements in this Section shall survive termination of this Agreement and
payment of the Notes and all other amounts payable hereunder.
Section 2.18 Taxes.
(a) Any and all payments by any Consolidated Party to or for
the account of any Lender, the Agent or the Security Trustee hereunder
or under any other Credit Document shall be made free and clear of and
without deduction for any and all present or future taxes, duties,
levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding, in the case of each
Lender, the Agent or the Security Trustee, taxes imposed on its income,
and franchise taxes imposed on it, by the jurisdiction under the laws
of which such Lender (or its applicable lending office) or the Agent or
the Security Trustee (as the case may be) is organized or any political
subdivision thereof (all such non-excluded taxes, duties, levies,
imposts, deductions, charges, withholdings, and liabilities being
hereinafter referred to as "Taxes"). If any Consolidated Party shall be
required by law to deduct any Taxes from or in respect of any sum
payable under this Credit Agreement or any other Credit Document to any
Lender, the Agent or the Security Trustee, (i) the sum payable shall be
increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this
Section 2.18) such Lender or the Agent or the Security Trustee (as the
case may be) receives an amount equal to the sum it would have received
had no such deductions been made, (ii) such Consolidated Party shall
make such deductions, (iii) such Consolidated Party shall pay the full
amount deducted to the relevant taxation authority or other authority
in accordance with applicable law, and (iv) such Consolidated Party
shall furnish to the Agent or the Security Trustee (as the case may
be), at its address referred to in Section 9.2, the original or a
certified copy of a receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any and all
present or future stamp or documentary taxes and any other excise or
property taxes or charges or similar levies which arise from any
payment made under this Credit Agreement or any other Credit Document
or from the execution or delivery of, or otherwise with respect to,
this Credit Agreement or any other Credit Document (hereinafter
referred to as "Other Taxes").
33
(c) The Borrower agrees to indemnify each Lender, the Agent
and the Security Trustee for the full amount of Taxes and Other Taxes
(including, without limitation, any Taxes or Other Taxes imposed or
asserted by any jurisdiction on amounts payable under this Section
2.18) paid by such Lender, the Agent or the Security Trustee (as the
case may be) and any liability (including penalties, interest, and
expenses) arising therefrom or with respect thereto.
(d) Each Lender that is not a United States person under
Section 7701(a)(30) of the Code, on or prior to the date of its
execution and delivery of this Credit Agreement in the case of each
Lender listed on the signature pages hereof and on or prior to the date
on which it becomes a Lender in the case of each other Lender, and from
time to time thereafter if requested in writing by the Borrower or the
Agent (but only so long as such Lender remains lawfully able to do so),
shall provide the Borrower and the Agent with (i) Internal Revenue
Service Form W-8 BEN or W-8 ECI, as appropriate, or any successor form
prescribed by the Internal Revenue Service, certifying that such Lender
is entitled to benefits under an income tax treaty to which the United
States is a party which reduces to zero the rate of withholding tax on
payments of interest or certifying that the income receivable pursuant
to this Credit Agreement is effectively connected with the conduct of a
trade or business in the United States, (ii) Internal Revenue Service
Form W-8 or W-9, as appropriate, or any successor form prescribed by
the Internal Revenue Service, and/or (iii) any other form or
certificate required by any taxing authority (including any certificate
required by Sections 871(h) and 881(c) of the Internal Revenue Code),
certifying that such Lender is entitled to an exemption from tax on
payments pursuant to this Credit Agreement or any of the other Credit
Documents.
(e) For any period with respect to which a Lender has failed
to provide the Borrower and the Agent with the appropriate form
pursuant to Section 2.18(d) (unless such failure is due to a change in
treaty, law, or regulation occurring subsequent to the date on which a
form originally was required to be provided), such Lender shall not be
entitled to indemnification under Section 2.18(a) or 2.18(b) with
respect to Taxes imposed by the United States; provided, however, that
should a Lender, which is otherwise exempt from withholding tax, become
subject to Taxes because of its failure to deliver a form required
hereunder, the Borrower shall take such steps as such Lender shall
reasonably request to assist such Lender to recover such Taxes.
(f) If any Consolidated Party is required to pay additional
amounts to or for the account of any Lender pursuant to this Section
2.18, then such Lender will agree to use reasonable efforts to change
the jurisdiction of its Applicable Lending Office so as to eliminate or
reduce any such additional payment which may thereafter accrue if such
change, in the judgment of such Lender, is not otherwise
disadvantageous to such Lender.
(g) Without prejudice to the survival of any other agreement
of the Credit Parties hereunder, the agreements and obligations of the
Credit Parties contained in this Section 2.18 shall survive the
repayment of the Loans, LOC Obligations and other obligations under the
Credit Documents and the termination of the Commitments hereunder.
Section 2.19 Indemnification; Nature of Issuing Lender's Duties.
(a) In addition to its other obligations under Section 2.4,
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 (i) the issuance of
any Letter of Credit or (ii) the failure of the Issuing Lender to honor
a drawing under a Letter of Credit as a result of any act or omission,
whether rightful or wrongful, of any present or future de jure or de
facto government or governmental authority (all such acts or omissions,
herein called "Government Acts").
(b) As between the Borrower and the Issuing Lender, the
Borrower shall assume all risks of the acts, omissions or misuse of any
Letter of Credit by the beneficiary thereof. The Issuing Lender shall
not be responsible: (i) for the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in
connection with the application for and issuance of any Letter of
34
Credit, even if it should in fact prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged; (ii) for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, that may
prove to be invalid or ineffective for any reason; (iii) for failure of
the beneficiary of a Letter of Credit to comply fully with conditions
required in order to draw upon a Letter of Credit; (iv) for errors,
omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise, whether or not
they be in cipher; (v) for errors in interpretation of technical terms;
(vi) for any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under a Letter of Credit
or of the proceeds thereof; and (vii) for any consequences arising from
causes beyond the control of the Issuing Lender, including, without
limitation, any Government Acts. None of the above shall affect,
impair, or prevent the vesting of the Issuing Lender's rights or powers
hereunder.
(c) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted
by the Issuing Lender, under or in connection with any Letter of Credit
or the related certificates, if taken or omitted in the absence of
gross negligence or willful misconduct, shall not put such Issuing
Lender under any resulting liability to the Borrower. It is the
intention of the parties that this Agreement shall be construed and
applied to protect and indemnify the Issuing Lender against any and all
risks involved in the issuance of the Letters of Credit, all of which
risks are hereby assumed by the Borrower, including, without
limitation, any and all risks of the acts or omissions, whether
rightful or wrongful, of any Government Authority. The Issuing Lender
shall not, in any way, be liable for any failure by the Issuing Lender
or anyone else to pay any drawing under any Letter of Credit as a
result of any Government Acts or any other cause beyond the control of
the Issuing Lender.
(d) Nothing in this Section 2.19 is intended to limit the
reimbursement obligation of the Borrower contained in Section 2.4(d)
hereof. The obligations of the Borrower under this Section 2.19 shall
survive the termination of this Agreement. No act or omissions of any
current or prior beneficiary of a Letter of Credit shall in any way
affect or impair the rights of the Issuing Lender to enforce any right,
power or benefit under this Agreement.
(e) Notwithstanding anything to the contrary contained in this
Section 2.19, the Borrower shall have no obligation to indemnify the
Issuing Lender in respect of any liability incurred by the Issuing
Lender arising out of the gross negligence or willful misconduct of the
Issuing Lender (including action not taken by the Issuing Lender), as
determined by a court of competent jurisdiction or pursuant to
arbitration.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Agreement and to make the
Extensions of Credit herein provided for, each of the Credit Parties hereby
represents and warrants to the Administrative Agent, to the Security Trustee and
to each Lender that:
Section 3.1 Financial Condition.
The balance sheets and the related statements of income and of cash
flows of the Borrower and its Subsidiaries for the fiscal years ending December
31, 2000 and December 31, 2001 audited by Xxxxxx Xxxxxxxx LLP and the balance
sheets and related statements of income and of cash flows of the Acquired
Companies for the fiscal year ended December 31, 2001 audited by Deloitte &
Touche present fairly in all material respects the financial condition of the
Borrower and its Subsidiaries and the Acquired Companies, respectively, as of
such dates. Additionally, the pro forma financial statements and the five-year
projections of the Borrower have been prepared in good faith based upon
assumptions believed by the Borrower to be reasonable at the time made. All such
financial statements of the Borrower and its Subsidiaries, including the related
schedules and notes thereto, have been prepared in accordance with GAAP (it
being acknowledged that as of the Closing Date the footnotes to the December 31,
2001 financial statements of the Borrower and its Subsidiaries were delivered in
draft form only) applied consistently throughout the periods involved (except as
35
disclosed therein) and all such financial statements of the Acquired Companies
have been prepared in accordance with UK GAAP applied consistently throughout
the periods involved (except as disclosed therein).
Section 3.2 No Change.
Since December 31, 2001 there has been no development or event which
has had or could reasonably be expected to have a Material Adverse Effect.
Section 3.3 Corporate Existence.
Each of the Credit Parties and its Subsidiaries (a) is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, (b) has the requisite power and authority and the legal right to
own and operate all its material property, to lease the material property it
operates as lessee and to conduct the business in which it is currently engaged,
and (c) is duly qualified to conduct business and in good standing under the
laws of each jurisdiction where its ownership, lease or operation of property or
the conduct of its business requires such qualification except to the extent
that the failure to so qualify or be in good standing could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
Section 3.4 Corporate Power; Authorization; Enforceable Obligations.
Each of the Credit Parties and its Subsidiaries has full power and
authority and the legal right to make, deliver and perform the Credit Documents
to which it is party and has taken all necessary limited liability company or
corporate action to authorize the execution, delivery and performance by it of
the Credit Documents to which it is party. No consent or authorization of,
filing with, notice to or other act by or in respect of, any Governmental
Authority or any other Person is required in connection with the borrowings
hereunder or with the execution, delivery or performance of any Credit Document
by any of the Consolidated Parties (other than those which have been obtained)
or with the validity or enforceability of any Credit Document against any of the
Consolidated Parties (except such filings as are necessary in connection with
the perfection of the Liens created by such Credit Documents). Each Credit
Document to which it is a party has been duly executed and delivered on behalf
of the applicable Consolidated Party. Each Credit Document to which it is a
party constitutes a legal, valid and binding obligation of each such
Consolidated Party, enforceable against such Consolidated Party, in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).
Section 3.5 Compliance with Laws; No Conflict; No Default.
(a) The execution, delivery and performance by each Consolidated Party
of the Credit Documents to which such Consolidated Party is a party, in
accordance with their respective terms, the borrowings hereunder and the
transactions contemplated hereby do not and will not, by the passage of time,
the giving of notice or otherwise, (i) require any Governmental Approval (other
than such Governmental Approvals that have been obtained or made and not subject
to suspension, revocation or termination) or violate any Requirement of Law
relating to such Consolidated Party, (ii) conflict with, result in a breach of
or constitute a default under the articles of incorporation, bylaws, articles of
organization, operating agreement or other organizational documents of such
Consolidated Party or any material indenture, agreement or other instrument to
which such Person is a party or by which any of its properties may be bound or
any Governmental Approval relating to such Person, or (iii) result in or require
the creation or imposition of any Lien upon or with respect to any property now
owned or hereafter acquired by such Person other than Liens arising under the
Credit Documents, except to the extent the failure to obtain such Governmental
Approval or any such violation, conflict, breach, default or any such Lien could
not reasonably be expected to have a Material Adverse Effect.
(b) Each Consolidated Party (i) (x) has all Governmental Approvals
required by law and all third party approvals required for it to conduct its
business, each of which is in full force and effect, (y) each such Governmental
Approval is final and not subject to review on appeal and (z) each such
Governmental Approval is not the subject of any pending or, to the best of its
36
knowledge, threatened attack by direct or collateral proceeding, and (ii) is in
compliance with each Governmental Approval applicable to it and in compliance
with all other Requirements of Law relating to it or any of its respective
properties, in each case except to the extent the failure to obtain such
Governmental Approval or failure to comply with such Governmental Approval or
Requirement of Law could not reasonably be expected to have a Material Adverse
Effect.
(c) None of the Consolidated Parties is in default under or with
respect to any of its Contractual Obligations in any respect which could
reasonably be expected to have a Material Adverse Effect. No Default or Event of
Default has occurred and is continuing.
Section 3.6 No Material Litigation.
Except as set forth on Schedule 3.6, no litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the best knowledge of the Credit Parties, threatened by or against any of
them or against any of their respective properties or revenues (a) with respect
to the Credit Documents or any Loan or any of the transactions contemplated
hereby, or (b) which, if adversely determined, could reasonably be expected to
have a Material Adverse Effect.
Section 3.7 Investment Company Act.
None of the Consolidated Parties is an "investment company", or a
company "controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended.
Section 3.8 Margin Regulations.
No part of the proceeds of any Loan hereunder will be used directly or
indirectly for any purpose which violates, or which would be inconsistent with,
the provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve System as now and from time to time hereafter in effect. The
Consolidated Parties taken as a group do not own "margin stock".
Section 3.9 ERISA.
Except as set forth on Schedule 3.9, neither a Reportable Event nor an
"accumulated funding deficiency" (within the meaning of Section 412 of the Code
or Section 302 of ERISA) has occurred during the five-year period prior to the
date on which this representation is made or deemed made with respect to any
Plan, and each Plan has complied in all material respects with the applicable
provisions of ERISA and the Code, except to the extent that any such occurrence
or failure to comply would not reasonably be expected to have a Material Adverse
Effect. No termination of a Single Employer Plan has occurred resulting in any
liability that has remained underfunded, and no Lien in favor of the PBGC or a
Plan has arisen, during such five-year period which could reasonably be expected
to have a Material Adverse Effect. The present value of all accrued benefits
under each Single Employer Plan (based on those assumptions used to fund such
Plans) did not, as of the last annual valuation date prior to the date on which
this representation is made or deemed made, exceed the value of the assets of
such Plan allocable to such accrued benefits by an amount which, as determined
in accordance with GAAP, could reasonably be expected to have a Material Adverse
Effect. Neither the Borrower nor any Commonly Controlled Entity is currently
subject to any liability for a complete or partial withdrawal from a
Multiemployer Plan which could reasonably be expected to have a Material Adverse
Effect.
Section 3.10 Environmental Matters.
(a) Except as set forth on Schedule 3.10 or except where such
violation or liability could not reasonably be expected to have a
Material Adverse Effect, the facilities and properties owned, leased or
operated by any of the Consolidated Parties (the "Properties") do not
contain any Materials of Environmental Concern in amounts or
concentrations which (i) constitute a violation of, or (ii) could give
rise to liability under, any Environmental Law.
37
(b) Except as set forth on Schedule 3.10 or except where such
violation could not reasonably be expected to have a Material Adverse
Effect, the Properties and all operations of the Consolidated Parties
at the Properties are in compliance, and have in the last five years
been in compliance, in all material respects with all applicable
Environmental Laws, and there is no contamination at or under the
Properties or violation of any Environmental Law with respect to the
Properties or the business operated by the any of the Consolidated
Parties (the "Business").
(c) Except as set forth on Schedule 3.10, none of the
Consolidated Parties has received any written or actual notice of
violation, alleged violation, non-compliance, liability or potential
liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Properties or the
Business, nor does any of the Consolidated Parties have knowledge of
any such threatened notice.
(d) Except as set forth on Schedule 3.10 or except where such
violation or liability could not reasonably be expected to have a
Material Adverse Effect, Materials of Environmental Concern have not
been transported or disposed of from the Properties in violation of, or
in a manner or to a location which could give rise to liability under
any Environmental Law, nor have any Materials of Environmental Concern
been generated, treated, stored or disposed of at, on or under any of
the Properties in violation of, or in a manner that could give rise to
liability under, any applicable Environmental Law.
(e) Except as set forth on Schedule 3.10, no judicial
proceeding or governmental or administrative action is pending or, to
the knowledge of any Consolidated Party, threatened, under any
Environmental Law to which any of the Consolidated Parties is or will
be named as a party with respect to the Properties or the Business, nor
are there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative or
judicial requirements outstanding under any Environmental Law with
respect to the Properties or the Business.
(f) Except as set forth on Schedule 3.10 or except where such
violation or liability could not reasonably be expected to have a
Material Adverse Effect, there has been no release or threat of release
of Materials of Environmental Concern at or from the Properties, or
arising from or related to the operations of any of the Consolidated
Parties in connection with the Properties or otherwise in connection
with the Business, in violation of or in amounts or in a manner that
could give rise to liability under Environmental Laws.
Section 3.11 Purpose of Loans.
The proceeds of the Loans will be used to finance the Acquisition, and
the closing costs and expenses related thereto, to refinance existing
indebtedness of the Borrower and the Acquired Companies and for general
corporate purposes, including working capital, letters of credit and Permitted
Acquisitions.
Section 3.12 Subsidiaries.
Set forth on Schedule 3.12 is a complete and accurate list of all
direct and indirect Subsidiaries of the Borrower. Information on the attached
Schedule includes state, province and/or country of organization; the number of
shares of each class of Capital Stock or other equity interests outstanding; the
number and percentage of outstanding shares of each class of stock owned by the
Borrower or any of its Subsidiaries; and the number and effect, if exercised, of
all outstanding options, warrants, rights of conversion or purchase and similar
rights. The outstanding Capital Stock and other equity interests of all such
Subsidiaries is validly issued, fully paid and non-assessable and is owned, free
and clear of all Liens (other than those arising under or contemplated in
connection with the Credit Documents. The Borrower shall have the right to
update Schedule 3.12 from time to time to the extent any Subsidiaries are sold
or otherwise disposed of or acquired or created, by the Borrower to the extent
permitted under this Agreement.
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Section 3.13 Ownership.
Each of the Credit Parties and its Subsidiaries is the owner of, and
has good and marketable title to, or is the valid lessee, of all of its
respective assets, which represents all assets individually or in the aggregate
material to the conduct of the businesses of the Credit Parties and their
Subsidiaries , taken as a whole on the date hereof, and none of such assets is
subject to any Lien other than Permitted Liens. Each Consolidated Party enjoys
peaceful and undisturbed possession under all of its leases and all such leases
are valid and subsisting and in full force and effect. The Credit Parties and
their Subsidiaries have delivered complete and accurate copies of all material
leases to the Administrative Agent.
Section 3.14 Indebtedness.
Except as otherwise permitted under Section 6.1, the Credit Parties and
their Subsidiaries have no Indebtedness.
Section 3.15 Taxes.
Each of the Credit Parties and its Subsidiaries has filed, or caused to
be filed, all tax returns (federal, state, local and foreign) required to be
filed and paid (a) all amounts of taxes shown thereon to be due (including
interest and penalties) and (b) all other taxes, fees, assessments and other
governmental charges (including mortgage recording taxes, documentary stamp
taxes and intangibles taxes) owing by it, except for such taxes (i) which are
not yet delinquent or (ii) that are being contested in good faith and by proper
proceedings, and against which adequate reserves are being maintained in
accordance with GAAP. None of the Credit Parties is aware as of the Closing Date
of any proposed tax assessments against it or any of its Subsidiaries which
could reasonably be expected to have a Material Adverse Effect.
Section 3.16 Intellectual Property Rights.
The Credit Parties and their Subsidiaries own or are licensed to use,
subject to any of its obligations under any valid and binding license agreement,
the Intellectual Property (as defined below) disclosed on Schedule 3.16 hereto,
which represents all Intellectual Property individually or in the aggregate
material to the conduct of the businesses of the Credit Parties and their
Subsidiaries taken as a whole on the date hereof. Except as disclosed on
Schedule 3.16 hereto, (i) the Intellectual Property disclosed on Schedule 3.16
is not subject to any obligation for payment of royalties, (ii) all
registrations with and applications to Governmental Authorities in respect of
such Intellectual Property are valid and in full force and effect and are not
subject to lapse for non-payment of any taxes or maintenance fees to maintain
their registration in effect and (iii) there are no restrictions on the direct
or indirect transfer of any Contractual Obligation, or any interest therein,
held by any of the Credit Parties or their Subsidiaries in respect of such
Intellectual Property. None of the Credit Parties or any of their Subsidiaries
is in default (or with the giving of notice or lapse of time or both, would be
in default) under any license to use such Intellectual Property. To the best of
the Credit Parties' knowledge, none of such Intellectual Property is being
infringed by any third party the loss of which has, or could reasonably be
expected to, have a Material Adverse Effect, and none of the Credit Parties or
any of their Subsidiaries is infringing any Intellectual Property of any third
party the infringement of which would reasonably be expected to have a Material
Adverse Effect. For purposes of this Agreement, "Intellectual Property" means
Trademarks, Patents, Copyrights and trade secrets.
Section 3.17 Solvency.
The fair salable value of each Credit Party's assets, measured on a
going concern basis, exceeds all probable liabilities, including those to be
incurred pursuant to this Agreement. None of the Credit Parties or any of their
Subsidiaries (a) has unreasonably small capital in relation to the business in
which it is or proposes to be engaged or (b) has incurred, or believes that it
will incur after giving effect to the transactions contemplated by this
Agreement, debts beyond its ability to pay such debts as they become due.
39
Section 3.18 Location of Collateral.
Set forth on Schedule 3.18(a) is a list of the Properties of the
Borrower and the other Credit Parties with street address, county and state
where located. Set forth on Schedule 3.18(b) is a list of all locations where
any tangible personal property of the Borrower and the other Credit Parties is
located, including county and state where located. Set forth on Schedule 3.18(c)
is the chief executive office and principal place of business of the Borrower
and the other Credit Parties. Schedules 3.18(a), 3.18(b) and 3.18(c) may be
updated from time to time by the Borrower to include new properties or locations
by giving written notice thereof to the Administrative Agent.
Section 3.19 No Burdensome Restrictions.
None of the Credit Parties or any of their Subsidiaries is a party to
any agreement or instrument or subject to any other obligation or any charter or
corporate restriction or any provision of any applicable law, rule or regulation
which, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
Section 3.20 Labor Matters.
There are no collective bargaining agreements or Multiemployer Plans
covering the employees of the Credit Parties or any of their Subsidiaries as of
the Closing Date, other than as set forth on Schedule 3.20 hereto, and none of
the Credit Parties or any of their Subsidiaries has suffered any strikes,
walkouts, work stoppages or other material labor difficulty within the last five
years, other than as set forth on Schedule 3.20 hereto.
Section 3.21 Accuracy and Completeness of Information.
All factual information heretofore, contemporaneously or hereafter
furnished by or on behalf of the Credit Parties or any of their Subsidiaries to
the Administrative Agent, the Security Trustee or any Lender for purposes of or
in connection with this Agreement or any other Credit Document, or any
transaction contemplated hereby or thereby, is or will be true and accurate in
all material respects and not incomplete by omitting to state any material fact
necessary to make such information not misleading. There is no fact now known to
any of the Credit Parties which has, or could reasonably be expected to have, a
Material Adverse Effect which fact has not been set forth herein, in the
financial statements of the Credit Parties furnished to the Agent and/or the
Lenders, or in any certificate, opinion or other written statement made or
furnished by the Credit Parties to the Agent and/or the Lenders.
Section 3.22 Representations and Warranties from Acquisition
Documents.
The Acquisition and related transactions have been consummated
substantially in accordance with the terms of the Acquisition Documents. As of
the Closing Date, the Acquisition Documents have not been altered, amended or
otherwise modified or supplemented or any condition thereof waived without the
prior written consent of the Administrative Agent. As of the Closing Date, each
of the representations and warranties made in the Acquisition Documents by each
of the parties thereto is true and correct.
Section 3.23 Material Contracts.
Set forth on Schedule 3.23 is a complete and accurate list of all
Material Contracts of the Borrower or any of its Subsidiaries.
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ARTICLE IV
CONDITIONS PRECEDENT
Section 4.1 Conditions to Closing Date and Initial Revolving
Loans and Term Loans.
This Agreement shall become effective upon, and the obligation of each
Lender to make the initial Revolving Loans and Term Loan on the Closing Date is
subject to, the satisfaction of the following conditions precedent:
(a) Execution of Agreement. The Administrative Agent shall
have received (i) counterparts of this Agreement, executed by a duly
authorized officer of each party hereto, (ii) for the account of each
Lender, Revolving Notes and Term Notes and for the account of the
Swingline Lender, a Swingline Note and (iii) counterparts of the
Security Agreement, the Foreign Pledge Agreements, and the Pledge
Agreement, in each case conforming to the requirements of this
Agreement and executed by duly authorized officers of the Credit
Parties or other Person, as applicable.
(b) Authority Documents. The Administrative Agent shall have
received the following:
(i) Certificate of Formation/Articles of
Incorporation. Copies of (A) the certificate of formation,
articles of incorporation or other charter documents, as
applicable, of each Credit Party, certified to be true and
complete as of a recent date by the appropriate governmental
authority of the state of its incorporation and (B) the
certificate of formation, articles of incorporation or other
charter documents, as applicable, of each Foreign Subsidiary
the Capital Stock of which is being pledged to the
Administrative Agent by a Credit Party on the Closing Date.
(ii) Resolutions. Copies of resolutions of the
managing members or the board of directors, as applicable, of
each Credit Party approving and adopting the Credit Documents,
the transactions contemplated therein and authorizing
execution and delivery thereof, certified by an officer of
such Credit Party as of the Closing Date to be true and
correct and in force and effect as of such date.
(iii) Operating Agreements/Bylaws. A copy of the
operating agreement and/or bylaws, as applicable, of each
Credit Party certified by an officer of such Credit Party as
of the Closing Date to be true and correct and in force and
effect as of such date.
(iv) Good Standing. Copies of (i) certificates of
good standing, existence or its equivalent with respect to
each Credit Party and each Foreign Subsidiary the Capital
Stock of which is being pledged to the Administrative Agent by
a Credit Party on the Closing Date certified as of a recent
date by the appropriate governmental authorities of the state
or other jurisdiction of organization and each other state or
jurisdiction in which the failure to so qualify and be in good
standing could reasonably be expected to have a Material
Adverse Effect and (ii) if available, a certificate indicating
payment of all corporate and other franchise taxes certified
as of a recent date by the appropriate governmental taxing
authorities.
(v) Incumbency. An incumbency certificate of each
Credit Party certified by a secretary or assistant secretary
to be true and correct as of the Closing Date, in
substantially the form of Schedule 4.1(b) hereto.
(c) Legal Opinions of Counsel.
(i) The Administrative Agent shall have received an
opinion of Fox, Rothschild, O'Brien & Xxxxxxx, U.S. counsel
for the Consolidated Parties, dated the Closing Date and
addressed to the Administrative Agent, the Security Trustee
and the Lenders, in form and substance acceptable to the
41
Administrative Agent and the Security Trustee which shall
include, without limitation, an opinion as to compliance on
the Closing Date by the Borrower and its Subsidiaries with all
material corporate instruments and agreements.
(ii) The Administrative Agent shall have received one
or more opinions of foreign counsel to the Consolidated
Parties or the Agent, as appropriate, dated the Closing Date
and addressed to the Administrative Agent, the Security
Trustee and the Lenders, in form and substance acceptable to
the Administrative Agent which shall include, without
limitation, an opinion as to compliance on the Closing Date by
the Borrower and its Subsidiaries with foreign legal issues
regarding the Acquisition, certain Foreign Subsidiary stock
pledges and mortgage agreements and perfection of security
interests therein in favor of the Agent.
(iii) The Administrative Agent shall have received
each opinion, report and other document required to be
delivered pursuant to the Acquisition Documents in connection
with the Acquisition, with a letter from each person
delivering such opinion, report and other document authorizing
reliance thereon by the Administrative Agent, the Security
Trustee and the Lenders, all in form and substance reasonably
acceptable to the Administrative Agent and the Security
Trustee.
(d) Personal Property Collateral. The Administrative Agent
shall have received, in form and substance satisfactory to the
Administrative Agent and the Security Trustee:
(i) searches of Uniform Commercial Code filings in
the jurisdiction of organization or incorporation of each
Credit Party, the chief executive office of each Credit Party
and each jurisdiction where any Collateral is located or where
a filing would need to be made in order to perfect the
Administrative Agent's security interest in the Collateral,
copies of the financing statements on file in such
jurisdictions and evidence that no Liens exist other than
Permitted Liens;
(ii) UCC financing statements for each appropriate
jurisdiction as is necessary, in the Administrative Agent's
reasonable judgment, to perfect the Administrative Agent's
security interest in the Collateral;
(iii) searches of ownership of Intellectual Property
in the appropriate governmental offices and such
patent/trademark/copyright filings as requested by the
Administrative Agent in order to perfect the Administrative
Agent's security interest in the Collateral;
(iv) all stock certificates, if any, evidencing the
Capital Stock pledged to the Administrative Agent and the
Security Trustee pursuant to the Pledge Agreement and the
Foreign Pledge Agreements, together with duly executed in
blank undated stock powers attached thereto;
(v) such patent/trademark/copyright filings as
requested by the Administrative Agent in order to perfect the
Administrative Agent's and the Security Trustee's security
interest in the Intellectual Property;
(vi) all instruments and chattel paper in the
possession of any of the Credit Parties, together with
allonges or assignments as may be necessary or appropriate to
perfect the Administrative Agent's and the Security Trustee's
security interest in the Collateral;
(vii) duly executed consents as are necessary, in the
Administrative Agent's reasonable judgment, to perfect the
Lenders' security interest in the Collateral; and
(viii) in the case of any personal property
Collateral located at premises leased by a Consolidated Party,
such estoppel letters, consents and waivers from the landlords
on such real property as may reasonably be required by the
Administrative Agent.
(e) [Reserved].
42
(f) Sources and Uses; Payment Instructions. The Agent shall
have received (i) a statement of sources and uses of funds covering all
payments reasonably expected to be made by the Consolidated Parties in
connection with the transactions contemplated by the Credit Documents
to be consummated on the Closing Date, including an itemized estimate
of all fees, expenses and other closing costs and (ii) payment
instructions with respect to each wire transfer to be made by the Agent
on behalf of the Lenders or the Borrower on the Closing Date setting
forth the amount of such transfer, the purpose of such transfer, the
name and number of the account to which such transfer is to be made,
the name and ABA number of the bank or other financial institution
where such account is located and the name and telephone number of an
individual that can be contacted to confirm receipt of such transfer.
(g) Liability and Casualty Insurance. The Administrative Agent
shall have received copies of insurance policies or certificates of
insurance evidencing liability and casualty insurance (including, but
not limited to, business interruption insurance) meeting the
requirements set forth herein or in the Security Documents. The
Administrative Agent and the Security Trustee, as they require, shall
be named as loss payee on all casualty insurance policies for the
benefit of the Lenders and the Administrative Agent, the Security
Trustee and each Lender, as the Administrative Agent and the Securities
Trustee require, shall be named as additional insured on all liability
insurance policies.
(h) Fees. The Administrative Agent, the Security Trustee and
the Lenders shall have received all fees, if any, owing pursuant to the
Fee Letter and Section 2.5.
(i) Litigation. There shall not exist any pending litigation
or investigation affecting or relating to this Agreement and the other
Credit Documents or the Acquisition that in the reasonable judgment of
the Administrative Agent and the Required Lenders could materially
adversely affect this Agreement and the other Credit Documents or the
Acquisition, that has not been settled, dismissed, vacated, discharged
or terminated prior to the Closing Date.
(j) Solvency Certificate. The Administrative Agent shall have
received an officer's certificate for each Credit Party and Coutts
prepared by the executive vice president or higher officer of each such
Person as to the financial condition, solvency and related matters of
each such Person, in each case after giving effect to the Acquisition
and the initial borrowings under the Credit Documents, in substantially
the form of Schedule 4.1(j) hereto.
(k) Account Designation Letter. The Administrative Agent shall
have received the executed Account Designation Letter in the form of
Schedule 1.1(a) hereto.
(l) Acquisition Documents. The Acquisition Documents shall
have been completed to the satisfaction of the Administrative Agent,
the Acquisition shall have been consummated substantially in accordance
with the terms of the Acquisition Documents and the purchase price
(including fees and expenses) for the Acquired Companies, including the
refinancing of the existing Indebtedness of the Acquired Companies,
shall not exceed (pound)72,000,000, subject to the purchase price
adjustments set forth in the Acquisition Agreement. The Administrative
Agent shall have received a copy, certified by an officer of the
Borrower as true and complete, of each Acquisition Document as
originally executed and delivered, together with all exhibits and
schedules thereto, and each such document shall be reasonably
satisfactory to the Administrative Agent.
(m) Corporate Structure. The corporate capital and ownership
structure of the Consolidated Parties shall be as described on Schedule
3.12. The Administrative Agent shall be reasonably satisfied with
management structure, legal structure, voting control, liquidity, total
leverage and total capitalization of the Consolidated Parties as of the
Closing Date.
(n) Government Consent. The Administrative Agent shall have
received evidence that all governmental, shareholder and material third
party consents and approvals necessary in connection with the
Acquisition and the related financings and other transactions
contemplated hereby have been obtained and all applicable waiting
43
periods have expired without any action being taken by any authority
that could restrain, prevent or impose any material adverse conditions
on the Acquisition or such other transactions or that could seek or
threaten any of the foregoing.
(o) Compliance with Laws. The Acquisition and the related
financings and other transactions contemplated hereby shall be in
compliance with all applicable laws and regulations (including all
applicable securities and banking laws, rules and regulations).
(p) Bankruptcy. There shall be no bankruptcy or insolvency
proceedings with respect to Borrower or any of its Subsidiaries or the
Acquired Companies or any of its Subsidiaries or any pending injunction
with respect to the Acquisition.
(q) Legal Aspects. The Administrative Agent and its counsel
shall be reasonably satisfied with all legal aspects regarding the
Acquisition.
(r) Consolidated EBITDA. (i) Consolidated EBITDA of the
Borrower and its consolidated Subsidiaries, excluding the Acquired
Companies, for the twelve month period ending on February 28, 2002
shall be greater than or equal to $52,000,000 and (ii) Consolidated
EBITDA of the Acquired Companies for the twelve month period ending on
February 28, 2002 shall be greater than or equal to (pound)8,000,000.
(s) Fees and Expenses. The aggregate fees and expenses
incurred by the Borrower and its Subsidiaries in connection with the
Acquisition shall not exceed $2,000,000, exclusive of the fees payable
to the Administrative Agent, its counsel and the Lenders pursuant to
the Fee Letter.
(t) Existing Indebtedness. All of the existing Indebtedness
for borrowed money of the Borrower, its Subsidiaries and the Acquired
Companies shall be repaid in full and all security interests related
thereto shall be terminated on the Closing Date, other than any
existing Indebtedness permitted pursuant to Section 6.1 and any
Permitted Liens.
(u) Financial Statements. The Administrative Agent shall have
received copies of the financial statements referred to in Section 3.1
hereof, a company-prepared opening pro forma balance sheet as at
February 28, 2002 for the Borrower and its Subsidiaries, including the
Acquired Companies and giving effect to the Acquisition (the "Pro Forma
Balance Sheet"), and five-year financial and operational projections
for the Borrower and its Subsidiaries for the fiscal years 2002 through
2007, together with a detailed explanation of all management
assumptions contained therein, each in form and substance reasonably
satisfactory to the Required Lenders.
(v) Environmental Reports. The Agent shall have received
satisfactory environmental reports of a recent date relating to the
Properties of the Borrower and its Domestic Subsidiaries addressed to
the Administrative Agent and the Lenders or accompanied by a
satisfactory reliance letter from the environmental consultant that
prepared such reports.
(w) Leverage Ratio. The Leverage Ratio shall be no greater
than 2.25 to 1.0 after giving effect to the Loans to be made on the
Closing Date and calculating Consolidated EBITDA for the twelve month
period ending on February 28, 2002.
(x) Pro Forma Compliance Certificate. The Administrative Agent
shall have received a certificate from the Borrower reasonably
satisfactory to the Administrative Agent that the Borrower is in
compliance with all financial covenants set forth herein on a pro forma
basis after giving effect to the Acquisition and the initial borrowings
under this Agreement.
(y) No Material Adverse Effect. No event shall have occurred
since December 31, 2001 that has had or could reasonably be expected to
have a material adverse effect on the business, operations, property,
assets, condition (financial or otherwise) or prospects of the Borrower
and its Subsidiaries (including, without limitation, the Acquired
Companies), taken as a whole.
44
(z) Due Diligence Report. The Administrative Agent shall have
received a financial and operating due diligence report from the
Borrower prepared by Xxxxxx Xxxxxxxx & Co., with the scope and results
of such report acceptable to the Administrative Agent in its sole
discretion.
(aa) Additional Matters. All other documents and legal matters
in connection with the transactions contemplated by this Agreement
shall be reasonably satisfactory in form and substance to the
Administrative Agent and its counsel.
Section 4.2 Conditions to All Extensions of Credit.
The obligation of each Lender to make any Extension of Credit hereunder
is subject to the satisfaction of the following conditions precedent on the date
of making such Extension of Credit:
(a) Representations and Warranties. The representations and
warranties made by the Consolidated Parties herein, in the Security
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).
(b) No Default or Event of Default. No Default or Event of
Default shall have occurred and be continuing on such date or after
giving effect to the Extension of Credit to be made on such date unless
such Default or Event of Default shall have been waived in accordance
with this Agreement.
(c) Compliance with Commitments. Immediately after giving
effect to the making of any such Extension of Credit (and the
application of the proceeds thereof), (i) the sum of the aggregate
principal amount of outstanding Revolving Loans plus the aggregate
principal amount of Swingline Loans plus LOC Obligations shall not
exceed the lesser of (A) the Borrowing Base and (B) the Revolving
Committed Amount then in effect, (ii) the LOC Obligations shall not
exceed the LOC Committed Amount and (iii) the principal amount of
Swingline Loans shall not exceed the Swingline Commitment.
(d) Additional Conditions to Revolving Loans. If such Loan is
made pursuant to Section 2.1, all conditions set forth in such Section
shall have been satisfied.
(e) Additional Conditions to Term Loans If such Loan is made
pursuant to Section 2.2, all conditions set forth in such Section shall
have been satisfied.
(f) Additional Conditions to Swingline Loans. If such Loan is
made pursuant to Section 2.3, all conditions set forth in such Section
shall have been satisfied.
(g) Additional Conditions to Letters of Credit. If such
Extension of Credit is made pursuant to Section 2.4, all conditions set
forth in such Section shall have been satisfied.
(h) Additional Conditions to Loans Made to Fund Permitted
Acquisitions. If a Loan is requested to fund a Permitted Acquisition,
in addition to the conditions set forth in Section 2.1, the Borrower
shall deliver to the Administrative Agent a compliance certificate
attaching pro forma financial and other information with respect to the
Borrower and its Subsidiaries (after giving effect to the Permitted
Acquisition and the making of the related Loan), which compliance
certificate shall be in form and substance satisfactory to the Agent.
Each request for an Extension of Credit and each acceptance by the
Borrower of any such Extension of Credit shall be deemed to constitute a
representation and warranty by the Borrower as of the date of such Extension of
Credit that the applicable conditions in paragraphs (a) through (h) of this
Section have been satisfied.
45
ARTICLE V
AFFIRMATIVE COVENANTS
Each Credit Party hereby covenants and agrees that on the Closing Date,
and thereafter for so long as this Agreement is in effect and until the
Commitments have terminated, no Note or Letter of Credit remains outstanding and
unpaid and the Credit Party Obligations, together with interest, Commitment Fees
and all other amounts owing to the Administrative Agent, the Security Trustee or
any Lender hereunder, are paid in full, the Borrower shall, and shall cause each
of its direct or indirect Subsidiaries (other than in the case of Section 5.1,
5.2 and 5.7), to:
Section 5.1 Financial Statements.
Furnish to the Administrative Agent and each of the Lenders:
(a) Annual Financial Statements. As soon as available, but in
any event within ninety (90) days after the end of each fiscal year of
the Borrower, a copy of the consolidated balance sheet of the Borrower
and its consolidated Subsidiaries as at the end of such fiscal year and
the related consolidated statements of income and retained earnings and
of cash flows of the Borrower and its consolidated Subsidiaries for
such year, audited by a firm of independent certified public
accountants of nationally recognized standing reasonably acceptable to
the Administrative Agent, setting forth in each case in comparative
form the figures for the previous year, reported on without a "going
concern" or like qualification or exception, or qualification
indicating that the scope of the audit was inadequate to permit such
independent certified public accountants to certify such financial
statements without such qualification.
(b) Quarterly Financial Statements. As soon as available and
in any event within forty-five (45) days after the end of each of the
first three fiscal quarters of each fiscal year of the Borrower, a
company-prepared consolidated and consolidating balance sheet of the
Borrower and its consolidated Subsidiaries as at the end of such period
and related company-prepared statements of income and retained earnings
and of cash flows for the Borrower and its consolidated Subsidiaries
for such quarterly period and for the portion of the fiscal year ending
with such period, in each case setting forth in comparative form
consolidated figures for the corresponding period or periods of the
preceding fiscal year (subject to normal recurring year-end audit
adjustments) and the budget for the corresponding period or periods;
(c) Annual Financial Plans. As soon as practicable and in any
event within sixty (60) days after the end of each fiscal year, a
consolidated and consolidating budget on a quarterly basis of the
Borrower and its Subsidiaries for the succeeding fiscal year, such plan
to be prepared by the Borrower in a manner consistent with GAAP and to
include an operating and capital budget in the form of an income
statement, balance sheet and statement of cash flows. Such budget shall
be accompanied by a certificate of the chief financial officer of the
Borrower to the effect that the budgets and other financial data are
based on reasonable estimates and assumptions, all of which are fair in
light of the conditions which existed at the time the budget was made,
have been prepared on the basis of the assumptions stated therein, and
reflect, as of the time so furnished, the reasonable estimate of the
Borrower and its Subsidiaries of the budgeted results of the operations
and other information budgeted therein; and
all such financial statements to fairly present in all material
respects the financial condition and results from operations of the
entities and for the periods specified and to be prepared in reasonable
detail and, in the case of the annual and quarterly financial
statements provided in accordance with subsections (a) and (b) above,
in accordance with GAAP (subject, in the case of interim statements, to
normal recurring year-end audit adjustments and the absence of
footnotes) applied consistently throughout the periods reflected
therein and further accompanied by a description of, and an estimation
of the effect on the financial statements on account of, a change in
the application of accounting principles as provided in Section 1.3.
46
Section 5.2 Certificates; Other Information.
Furnish to the Administrative Agent and each of the Lenders:
(a) within ninety (90) days after the end of each fiscal year
of the Borrower (and in no event later than concurrently with the
delivery of the financial statements referred to in Section 5.1(a)
above), a certificate of the independent certified public accountants
reporting on such financial statements stating that in making the
examination necessary therefor no knowledge was obtained of any Default
or Event of Default under Section 5.9, except as specified in such
certificate;
(b) within ninety (90) days after the end of each fiscal year
of the Borrower and within forty-five (45) days after the end of each
of the first three fiscal quarters of each fiscal year of the Borrower
(and in no event later than concurrently with the delivery of the
related financial statements referred to in Sections 5.1(a) and 5.1(b)
above), a certificate of a Responsible Officer of the Borrower stating
that, to the best of such Responsible Officer's knowledge, each of the
Consolidated Parties during such period observed or performed in all
material respects all of its covenants and other agreements, and
satisfied in all material respects every condition, contained in this
Agreement to be observed, performed or satisfied by it, and that such
Responsible Officer has obtained no knowledge of any Default or Event
of Default except as specified in such certificate and such certificate
shall include the calculations in reasonable detail required to
indicate compliance with Section 5.9;
(c) within thirty (30) days after the same are filed, copies
of all financial statements and non-confidential reports which the
Borrower may make to, or file with the Securities and Exchange
Commission or any successor or analogous Governmental Authority;
(d) within ninety (90) days after the end of each fiscal year
of the Borrower, a certificate containing information regarding the
amount of all Asset Dispositions, Debt Issuances, and Equity Issuances
that were made during the prior fiscal year and amounts received in
connection with any Recovery Event during the prior fiscal year;
(e) promptly upon receipt thereof, a copy of any other report
or "management letter" submitted by independent accountants to the
Borrower or any of its Subsidiaries in connection with any annual,
interim or special audit of the books of such Person;
(f) promptly upon their becoming available, copies of (i) all
press releases and other statements made available generally by the
Borrower to the public concerning material developments in the business
of the Borrower and its Subsidiaries and (ii) any non-routine
correspondence or official notices received by the Borrower or any of
its Subsidiaries from any federal, state or local governmental
authority which regulates the operations of the Borrower and its
Subsidiaries; and
(g) no later than the 20th day of each calendar month, a
Borrowing Base certificate prepared by a Responsible Officer of the
Borrower for the immediately preceding calendar month; and
(h) promptly, such additional financial and other information
as the Administrative Agent, on behalf of any Lender, may from time to
time reasonably request.
Section 5.3 Payment of Obligations.
Pay, discharge or otherwise satisfy at or before maturity or before
they become delinquent, as the case may be, in accordance with industry practice
(subject, where applicable, to specified grace periods) all its material
obligations of whatever nature and any additional costs that are imposed as a
result of any failure to so pay, discharge or otherwise satisfy such
obligations, except when the amount or validity of such obligations and costs is
currently being contested in good faith by appropriate proceedings and reserves,
if applicable, in conformity with GAAP with respect thereto have been provided
on the books of the Consolidated Parties.
47
Section 5.4 Conduct of Business and Maintenance of Existence.
Continue to engage in business of the same general type conducted by
the Borrower, its Subsidiaries and the Acquired Companies immediately prior to
the Closing Date and preserve, renew and keep in full force and effect corporate
existence and take all reasonable action to maintain all rights, privileges and
franchises necessary or desirable in the normal conduct of its business; comply
with all Contractual Obligations and Requirements of Law applicable to it except
to the extent that failure to comply therewith could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.
Section 5.5 Maintenance of Property; Insurance.
(a) Keep all material property useful and necessary in its
business in good working order and condition (ordinary wear and tear
and obsolescence excepted);
(b) Maintain with financially sound and reputable insurance
companies insurance (or, to the extent consistent with past practices,
maintain self-insurance) on all its material property (including
without limitation its material tangible Collateral) in at least such
amounts and against at least such risks as are usually insured against
in the same general area by companies engaged in the same or a similar
business (including, without limitation, business interruption
insurance); and furnish to the Administrative Agent upon written
request, full information as to the insurance carried. The
Administrative Agent shall be named as loss payee or mortgagee, as its
interest may appear, with respect to any insurance providing coverage
in respect of any Collateral, and each provider of any such insurance
shall agree, by endorsement upon the policy or policies issued by it or
by independent instruments furnished to the Administrative Agent, that
it will give the Administrative Agent thirty (30) days prior written
notice before any such policy or policies shall be altered or canceled,
and that no act or default of any Consolidated Party or any other
Person shall affect the rights of the Administrative Agent, the
Security Trustee or the Lenders under such policy or policies. Each
Lender shall be named as additional insured on all liability policies.
The present insurance coverage of the Consolidated Parties is outlined
as to carrier, policy number, expiration date, type and amount on
Schedule 5.5(b); and
(c) In case of any material loss, damage to or destruction of
the Collateral of any Consolidated Party or any material part thereof,
the Borrower shall promptly give written notice thereof to the
Administrative Agent and the Security Trustee generally describing the
nature and extent of such damage or destruction. In case of any loss,
damage to or destruction of the Collateral of any Consolidated Party or
any material part thereof, such Consolidated Party, whether or not the
insurance proceeds, if any, received on account of such damage or
destruction shall be sufficient for that purpose, at such Consolidated
Party's cost and expense, will promptly repair or replace the
Collateral of such Consolidated Party so lost, damaged or destroyed
unless the Borrower shall have reasonably determined that such repair
or replacement of the affected Collateral is not economically feasible
or is not deemed in the best business interest of such Consolidated
Party.
Section 5.6 Inspection of Property; Books and Records; Discussions.
Keep proper books of records and account in which full, true and
correct entries in conformity with GAAP and all Requirements of Law shall be
made of all dealings and transactions in relation to its businesses and
activities; and permit, during regular business hours and upon reasonable notice
by the Administrative Agent, the Security Trustee or any Lender, the
Administrative Agent, the Security Trustee or any Lender to visit and inspect
any of its properties and examine and make abstracts from any of its books and
records at any reasonable time, upon reasonable notice and as often as may
reasonably be desired, and to discuss the business, operations, properties and
financial and other condition of the Consolidated Parties with officers and
employees of the Consolidated Parties and with their independent certified
public accountants (subject to reasonable requirements of confidentiality,
including requirements imposed by law or contract).
48
Section 5.7 Notices.
Promptly (but in no event later than three (3) Business Days (or thirty
(30) days with respect to subsection (d) below) after a Responsible Officer of
the Borrower knows or has reason to know thereof) give written notice of the
following to the Administrative Agent:
(a) the occurrence of any Default or Event of Default;
(b) the occurrence of any default or event of default under
any Contractual Obligation of any of the Consolidated Parties which
could reasonably be expected to have a Material Adverse Effect or
involve a monetary claim in excess of $500,000;
(c) any litigation, or any investigation or proceeding
affecting any of the Consolidated Parties which could reasonably be
expected to have a Material Adverse Effect;
(d) (i) the occurrence or expected occurrence of any
Reportable Event with respect to any Plan, a failure to make any
required contribution to a Plan, the creation of any Lien in favor of
the PBGC (other than a Permitted Lien) or a Plan or any withdrawal
from, or the termination, Reorganization or Insolvency of, any
Multiemployer Plan or (ii) the institution of proceedings or the taking
of any other action by the PBGC or the Borrower or any Commonly
Controlled Entity or any Multiemployer Plan with respect to the
withdrawal from, or the terminating, Reorganization or Insolvency of,
any Plan;
(e) any notice of any violation received by any Consolidated
Party from any Governmental Authority including, without limitation,
any notice of violation of Environmental Laws;
(f) any labor controversy that has resulted in, or threatens
to result in, a strike or other work action against any Consolidated
Party which could reasonably be expected to have a Material Adverse
Effect;
(g) any attachment, judgment, lien, levy or order exceeding
$250,000 that may be assessed against or threatened against any
Consolidated Party other than Permitted Liens;
(h) promptly, any other development or event which could
reasonably be expected to have a Material Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a
statement of a Responsible Officer setting forth details of the occurrence
referred to therein and stating what action the Borrower proposes to take with
respect thereto. In the case of any notice of a Default or Event of Default, the
Borrower shall specify that such notice is a Default or Event of Default notice
on the face thereof.
Section 5.8 Environmental Laws.
(a) Comply in all material respects with all applicable
Environmental Laws and 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, in each case, to the extent that failure to do so could not
reasonably be expected to have a Material Adverse Effect;
(b) Conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with
all lawful orders and directives of all Governmental Authorities
regarding Environmental Laws except to the extent that the same are
being contested in good faith by appropriate proceedings and the
pendency of such proceedings could not reasonably be expected to have a
Material Adverse Effect; and
(c) Defend, indemnify and hold harmless the Administrative
Agent, the Security Trustee and the Lenders, and their respective
employees, agents, officers and directors, from and against any and all
49
claims, demands, penalties, fines, liabilities, settlements, damages,
costs and expenses of whatever kind or nature known or unknown,
contingent or otherwise, arising out of, or in any way relating to the
violation of, noncompliance with or liability under, any Environmental
Law applicable to the operations of the Consolidated Parties or the
Properties, or any orders, requirements or demands of Governmental
Authorities related thereto, including, without limitation, reasonable
attorney's and consultant's fees, investigation and laboratory fees,
response costs, court costs and litigation expenses, except to the
extent that any of the foregoing arise out of the gross negligence or
willful misconduct of the party seeking indemnification therefor. The
agreements in this paragraph shall survive repayment of the Notes and
all other amounts payable hereunder.
Section 5.9 Financial Covenants.
Comply with the following financial covenants:
(a) Leverage Ratio. The Leverage Ratio as of the last day of
each fiscal quarter, commencing with March 31, 2002, shall be less than
or equal to:
-------------------- ------------------- ------------------- ------------------- ------------------
Fiscal Year March 31 June 30 September 30 December 31
-------------------- ------------------- ------------------- ------------------- ------------------
2002 2.40 to 1.0 2.40 to 1.0 2.40 to 1.0 2.00 to 1.0
-------------------- ------------------- ------------------- ------------------- ------------------
2003 2.00 to 1.0 2.00 to 1.0 2.00 to 1.0 1.75 to 1.0
-------------------- ------------------- ------------------- ------------------- ------------------
2004 1.75 to 1.0 1.75 to 1.0 1.75 to 1.0 1.50 to 1.0
-------------------- ------------------- ------------------- ------------------- ------------------
2005 1.50 to 1.0 1.50 to 1.0 1.50 to 1.0 1.50 to 1.0
-------------------- ------------------- ------------------- ------------------- ------------------
2006 1.50 to 1.0 1.50 to 1.0 1.50 to 1.0 1.50 to 1.0
-------------------- ------------------- ------------------- ------------------- ------------------
Thereafter 1.50 to 1.0
-------------------- ------------------- ------------------- ------------------- ------------------
(b) Consolidated Net Worth. At all times the Consolidated Net
Worth of the Borrower shall be greater than or equal to the sum of
$69,052,000, increased on a cumulative basis as of the end of each
fiscal quarter of the Consolidated Parties, commencing with the fiscal
quarter ending March 31, 2002 by an amount equal to 75% of Consolidated
Net Income (to the extent positive) for the fiscal quarter then ended.
(c) Fixed Charge Coverage Ratio. The Fixed Charge Coverage
Ratio as of the last day of each fiscal quarter, commencing with March
31, 2002, shall be greater than or equal to:
-------------------- ------------------- ------------------- ------------------- ------------------
Fiscal Year March 31 June 30 September 30 December 31
-------------------- ------------------- ------------------- ------------------- ------------------
2002 1.10 to 1.0 1.10 to 1.0 1.10 to 1.0 1.10 to 1.0
-------------------- ------------------- ------------------- ------------------- ------------------
2003 1.10 to 1.0 1.10 to 1.0 1.10 to 1.0 1.10 to 1.0
-------------------- ------------------- ------------------- ------------------- ------------------
2004 1.10 to 1.0 1.10 to 1.0 1.10 to 1.0 1.15 to 1.0
-------------------- ------------------- ------------------- ------------------- ------------------
2005 1.15 to 1.0 1.15 to 1.0 1.15 to 1.0 1.20 to 1.0
-------------------- ------------------- ------------------- ------------------- ------------------
2006 1.20 to 1.0 1.20 to 1.0 1.20 to 1.0 1.20 to 1.0
-------------------- ------------------- ------------------- ------------------- ------------------
Thereafter 1.20 to 1.0
-------------------- ------------------- ------------------- ------------------- ------------------
(d) Minimum Borrowing Base. The Borrowing Base shall at all
times be greater than or equal to the sum of the outstanding Revolving
Loans, plus LOC Obligations plus Swingline Loans.
Section 5.10 Additional Subsidiaries.
(a) Cause each of their Subsidiaries, whether newly formed,
after acquired or otherwise existing, to promptly become a "Subsidiary
Guarantor" hereunder by way of execution of a Joinder Agreement;
provided, however, that in the event that the execution of a Joinder
Agreement by any Foreign Subsidiary would result in an adverse tax
consequence to the Borrower, such Subsidiary shall not be required to
become a Subsidiary Guarantor. The guaranty obligations of any such
Additional Credit Party shall be secured by, among other things, the
Collateral of the Additional Credit Party and a pledge of 100% of the
Capital Stock or other equity interest of its Domestic Subsidiaries and
65% of the Capital Stock or other equity interest of its directly owned
Foreign Subsidiaries to the extent that such pledge is permissible
50
under applicable law, and a pledge by the Borrower or other Credit
Party which is the owner of the Capital Stock or other equity interest
in such Additional Credit Party of 100% of such Capital Stock or other
equity interest (or 65% of such Capital Stock or other equity interest
if such Additional Credit Party is a Foreign Subsidiary).
(b) Pledge to the Administrative Agent 100% of the Capital
Stock or other equity interests of each newly formed or acquired
Domestic Subsidiary and 65% of the Capital Stock or other equity
interests of each newly formed or acquired direct or indirect Foreign
Subsidiary to the extent that such pledge is permissible under
applicable law and to the extent that such pledge would not result in
an adverse tax consequence to the Borrower.
Section 5.11 Compliance with Law.
Comply with all laws, rules, regulations and orders, and all applicable
restrictions imposed by all Governmental Authorities, applicable to it and its
property if noncompliance with any such law, rule, regulation, order or
restriction could reasonably be expected to have a Material Adverse Effect.
Section 5.12 Pledged Assets.
(a) Cause 100% of the Capital Stock of each direct or indirect
Domestic Subsidiary of the Borrower held by the Borrower or any
Subsidiary of the Borrower and 100% of the Non-Voting Equity (as
defined in the Pledge Agreement) and 65% of the Voting Equity (as
defined in the Pledge Agreement) of each of the direct or indirect
Foreign Subsidiaries of the Borrower and its Domestic Subsidiaries
(but, in the case of indirect Foreign Subsidiaries of the Borrower and
its Domestic Subsidiaries, to the extent that the grant of a pledge of
Capital Stock of any such Foreign Subsidiary would result in an
material adverse tax consequence to the Borrower, such Foreign
Subsidiary Capital Stock shall not be required to be pledged hereunder)
to be subject at all times to a first priority, perfected Lien in favor
of the Administrative Agent or the Security Trustee (as the case may
be) pursuant to the terms and conditions of the Security Documents or
such other security documents as the Administrative Agent or the
Security Trustee shall reasonably request.
(b) If, subsequent to the Closing Date, a Credit Party shall
(i) acquire any securities, instruments, chattel paper or other
personal property required for perfection to be delivered to the
Administrative Agent or the Security Trustee as Collateral hereunder or
under any of the Security Documents or (ii) acquire or lease any real
property, promptly (and in any event within three (3) Business Days)
after any Responsible Officer of the Borrower acquires knowledge of
same, notify the Administrative Agent and the Security Trustee of same.
Each Credit Party shall, and shall cause each of its Subsidiaries to,
take such action at its own expense as requested by the Administrative
Agent or the Security Trustee (including, without limitation, any of
the actions described in Section 4.1(d) or Section 4.1(e) hereof) to
ensure that the Administrative Agent or the Security Trustee, (as the
case may be) has a first priority perfected Lien to secure the Credit
Party Obligations in (A) all personal property of the Credit Parties
located in the United States, (B) to the extent deemed to be material
by the Administrative Agent or the Security Trustee (as the case may
be) or the Required Lenders in its or their reasonable judgment, all
real property of the Credit Parties located in the United States and
(C) to the extent deemed to be material by the Administrative Agent or
the Security Trustee (as the case may be) or the Required Lenders in
its or their sole reasonable judgment, all other personal and real
property of the Consolidated Parties, subject in each case only to
Permitted Liens, but in any event, with respect to any such property
owned by a Foreign Subsidiary, only to the extent that granting such a
Lien to the Administrative Agent or the Security Trustee will not
result in material adverse tax consequences to the Borrower. Each
Credit Party shall, and shall cause each of its Subsidiaries to, comply
with the covenants regarding the location of personal property as set
forth in the Security Documents.
51
Section 5.13 Delivery of Reviewed Pro Forma Balance Sheet.
On or prior to fifteen (15) days following the Closing Date the
Borrower shall cause to be redelivered to the Agent and the Lenders the
Pro-Forma Balance Sheet, accompanied by a review conducted by Deloitte & Touche.
Section 5.14 Covenants Regarding Patents, Trademarks and
Copyrights.
(a) Notify the Administrative Agent promptly if it knows or has reason
to know that any application, letters patent or registration relating to any
Patent or Trademark which is material to the business of the Borrower and its
Subsidiaries taken as a whole may become abandoned, or of any adverse
determination or development (including, without limitation, the institution of,
or any such determination or development in, any proceeding in the United States
Patent and Trademark Office or any court) regarding the Borrower's or such other
Subsidiary's ownership of any Patent or Trademark which is material to the
business of the Borrower and its Subsidiaries taken as a whole, its right to
patent or register the same, or to enforce, keep and maintain the same.
(b) Notify the Administrative Agent promptly after a Responsible
Officer of the Borrower knows or has reason to know of any adverse determination
or development (including, without limitation, the institution of, or any such
determination or development in, any proceeding in any court) regarding any
Copyright which is material to the business of the Borrower and its Subsidiaries
taken as a whole, whether (i) such Copyright may become invalid or unenforceable
prior to its expiration or termination, or (ii) the Borrower's or the relevant
Subsidiary's ownership of such Copyright, its right to register the same or to
enforce, keep and maintain the same is reasonably likely to become adversely
affected.
(c) (i) Concurrently with the delivery of annual financial statements
of the Borrower pursuant to Section 5.1 hereof, provide the Administrative Agent
with a list of any filing by the Borrower or any Subsidiary, either itself or
through any agent, employee, licensee or designee, of any application for
registration of any Copyright, Trademark or Patent with the United States
Copyright Office or United States Patent and Trademark Office.
(ii) Concurrently with the delivery of quarterly and annual
financial statements of the Borrower pursuant to Section 5.1 hereof, provide the
Administrative Agent and its counsel a complete and correct list of all
registered Copyrights, Patents and Trademarks owned by the Borrower or any of
its Subsidiaries that have been obtained since the last reporting period.
(iii) Upon request of the Administrative Agent, execute and
deliver any and all agreements, instruments, documents, and papers as the
Administrative Agent may reasonably request to evidence the Administrative
Agent's security interest in the Copyrights, Patents, Trademarks and the general
intangibles referred to in clauses (i) and (ii) of this subsection (c).
(d) Take all reasonable actions, including, without limitation, in any
proceeding before the United States Patent and Trademark Office or the United
States Copyright Office, necessary to maintain each letters patent for the
Patents or registration of the Trademarks and Copyrights which are material to
the business of the Borrower and its Subsidiaries taken as a whole, including,
without limitation, payment of maintenance fees, filing of applications for
renewal, affidavits of use, affidavits of incontestability and opposition,
interference and cancellation proceedings.
(e) In the event that any Responsible Officer of the Borrower becomes
aware that any Trademark, Copyright or Patent is infringed, misappropriated or
diluted by a third party in any material respect, notify the Administrative
Agent promptly after such Responsible Officer learns thereof and shall, unless
the Borrower or the relevant Subsidiary, as the case may be, shall reasonably
determine that such Trademark, Copyright or Patent is not material to the
business of the Borrower and its Subsidiaries taken as a whole, promptly xxx for
infringement, misappropriation or dilution and to recover any and all damages
for such infringement, misappropriation or dilution, and take such other actions
as the Borrower or such Subsidiary, as the case may be, shall reasonably deem
appropriate under the circumstances to protect such Trademark, Copyright or
Patent.
52
ARTICLE VI
NEGATIVE COVENANTS
Each Credit Party hereby covenants and agrees that on the Closing Date,
and thereafter for so long as this Agreement is in effect and until the
Commitments have terminated, no Note or Letter of Credit remains outstanding and
unpaid and the Credit Party Obligations, together with interest, Commitment Fees
and all other amounts owing to the Administrative Agent or any Lender hereunder,
are paid in full:
Section 6.1 Indebtedness.
The Borrower will not, nor will it permit any direct or indirect
Subsidiary to, contract, create, incur, assume or permit to exist any
Indebtedness, except:
(a) Indebtedness arising or existing under this Agreement and
the other Credit Documents;
(b) Indebtedness incurred to provide all or a portion of the
purchase price or cost of construction of an asset (including Capital
Lease Obligations) provided that (i) such Indebtedness when incurred
shall not exceed the purchase price or cost of construction of such
asset; (ii) no such Indebtedness shall be refinanced for a principal
amount in excess of the principal balance outstanding thereon at the
time of such refinancing; and (iii) the total amount of all such
Indebtedness shall not exceed $1,000,000 at any time outstanding;
(c) Indebtedness and obligations owing under Hedging
Agreements relating to the Loans hereunder and other Hedging Agreements
entered into in order to manage existing or anticipated interest rate,
exchange rate or commodity price risks and not for speculative
purposes;
(d) Indebtedness and obligations of Credit Parties owing under
documentary letters of credit for the purchase of goods or other
merchandise (but not under standby, direct pay or other letters of
credit except for the Letters of Credit hereunder) generally;
(e) Indebtedness owed in respect of (i) Guaranty Obligations
permitted under Section 6.3 hereof and (ii) additional Guaranty
Obligations in an aggregate amount not to exceeds $1,000,000 at any
time outstanding;
(f) Indebtedness owed by (i) the Borrower or any of its
Domestic Subsidiaries to the Borrower or another Subsidiary, (ii) any
Foreign Subsidiary to another Foreign Subsidiary, (iii) any Foreign
Subsidiary to the Borrower or any of its Domestic Subsidiaries
consisting of transfer payments, royalty payments or working capital
advances in the ordinary course of business consistent with past
practices, (iv) any Foreign Subsidiary to the Borrower or any of its
Domestic Subsidiaries (other than Indebtedness described in clause
(iii)) in an aggregate amount for all such Indebtedness described in
this clause (iv) not to exceed $1,000,000 outstanding at any time and
(v) the Borrower or any of its Domestic Subsidiaries to any Foreign
Subsidiary consisting of transfer payments or royalty payments in the
ordinary course of business consistent with past practices; provided
that any of the foregoing Indebtedness (unless owed to the Borrower or
a Subsidiary Guarantor) shall be fully subordinated to the Credit Party
Obligations hereunder on terms reasonably satisfactory to the
Administrative Agent;
(g) Indebtedness of Foreign Subsidiaries in an aggregate
amount not to exceed $2,000,000 (or its equivalent in foreign currency)
at any time outstanding; and
(h) other unsecured Indebtedness of Credit Parties which does
not exceed $2,000,000 in the aggregate at any time outstanding.
53
Section 6.2 Liens.
The Borrower will not, nor will it permit any direct or indirect
Subsidiary to, 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. Notwithstanding the foregoing, if a Consolidated
Party shall xxxxx x Xxxx on any of its assets in violation of this Section 6.2,
then it shall be deemed to have simultaneously granted an equal and ratable Lien
on any such assets in favor of the Administrative Agent and the Security Trustee
for the benefit of the Lenders.
Section 6.3 Guaranty Obligations.
The Borrower will not, nor will it permit any direct or indirect
Subsidiary to, enter into or otherwise become or be liable in respect of any
Guaranty Obligations (excluding specifically therefrom endorsements in the
ordinary course of business of negotiable instruments for deposit or collection)
other than (a) those in favor of the Lenders in connection herewith, (b)
guaranties given by, and other Guaranty Obligations incurred by, the Borrower or
any of its Subsidiaries for the benefit of or the account of the Borrower or any
such Subsidiary in connection with obligations not constituting Indebtedness
including real property leases and other contracts entered into in the ordinary
course of business, (c) Guaranty Obligations by the Credit Parties of
Indebtedness permitted under Section 6.1 and (d) Guaranty Obligations incurred
by the Borrower or any of its Subsidiaries in respect of obligations of the
Borrower or any such Subsidiary to pay customs and excise duties and similar
payments.
Section 6.4 Nature of Business.
The Borrower will not, nor will it permit any direct or indirect
Subsidiary (including the Acquired Companies) to, alter the character of their
business in any material respect from that conducted as of the Closing Date.
Section 6.5 Consolidation, Merger, Sale or Purchase of
Assets, etc.
The Borrower will not, nor will it permit any direct or indirect
Subsidiary to:
(a) dissolve, liquidate or wind up its affairs, sell,
transfer, lease or otherwise dispose of its property or assets or agree
to do so at a future time except the following, without duplication,
shall be expressly permitted:
(i) Specified Sales;
(ii) the sale, transfer, lease or other disposition
of property or assets (a) to an unrelated party not in the
ordinary course of business (other than Specified Sales),
where and to the extent that they are the result of a Recovery
Event or (b) the sale, lease, transfer or other disposition of
machinery, parts and equipment no longer used or useful in the
conduct of the business of the Borrower or any of its
Subsidiaries, as appropriate, in its reasonable discretion, so
long as the net proceeds therefrom are used to repair or
replace damaged property or to purchase or otherwise acquire
new assets or property, provided that such purchase or
acquisition is consummated within 180 days of receipt of such
proceeds;
(iii) the sale, lease or transfer of property or
assets from the Borrower or a Subsidiary of the Borrower to
the Borrower or a Domestic Subsidiary of the Borrower
(including the liquidation of any such Subsidiary into the
Borrower or a Domestic Subsidiary of the Borrower);
(iv) the transfer of the Capital Stock of Right
Associates Ltd., an English corporation, or other Foreign
Subsidiaries of the Borrower to a holding company directly or
indirectly owned by the Borrower formed outside of the United
States after the Closing Date; provided, that the Capital
Stock of such holding company is pledged to the Administrative
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Agent; provided, further that none of the foregoing would
result in an adverse tax consequence to the Borrower or its
Subsidiaries or violate any applicable law; and
(v) any other sale, lease or transfer of property or
assets not to exceed $1,000,000 in the aggregate in any fiscal
year;
provided, that in each case, other than clause (iv) above, at least 80%
of the consideration received therefor by any Consolidated Party is in
the form of cash or Cash Equivalents; provided, further, that with
respect to sales of assets permitted hereunder only, the Administrative
Agent or the Security Trustee (as the case may be) shall be entitled,
without the consent of the Required Lenders, to release its Liens
relating to the particular assets sold; or
(b) purchase, lease or otherwise acquire (in a single
transaction or a series of related transactions) all or any substantial
part of the property or assets of or a division of any Person (other
than purchases or other acquisitions of inventory, leases, materials,
property and equipment in the ordinary course of business, except as
otherwise limited or prohibited herein), or enter into any transaction
of merger or consolidation, except for (i) investments or acquisitions
permitted pursuant to Section 6.6, (ii) the Acquisition, (iii)
Permitted Acquisitions, (iv) the merger or consolidation of the
Borrower or one of its Subsidiaries with and into a Domestic Subsidiary
of the Borrower, provided that if the Borrower is a party thereto, the
Borrower will be the surviving entity and if a Foreign Subsidiary and a
Domestic Subsidiary are parties thereto, the Domestic Subsidiary will
be the surviving entity, and (v) the merger or consolidation of a
Foreign Subsidiary of the Borrower with and into another Foreign
Subsidiary of the Borrower.
Section 6.6 Advances, Investments and Loans.
The Borrower will not, nor will it permit any direct or indirect
Subsidiary to, lend money or extend credit or make advances to any Person, or
purchase or acquire any stock, obligations or securities of, or any other
interest in, or make any capital contribution to, any Person except for
Permitted Investments.
Section 6.7 Transactions with Affiliates.
The Borrower will not, nor will it permit any direct or indirect
Subsidiary to, enter into any transaction or series of transactions, whether or
not in the ordinary course of business, with any officer, director, shareholder
or Affiliate other than on terms and conditions substantially as favorable as
would be obtainable in a comparable arm's-length transaction with a Person other
than an officer, director, shareholder or Affiliate, except that the Borrower
shall be permitted to pay reasonable compensation and bonuses in the ordinary
course of business to its officers and directors consistent with the Borrower's
past bonus plans in effect prior to the Closing Date.
Section 6.8 Ownership of Subsidiaries; Restrictions.
The Borrower will not, nor will it permit any direct or indirect
Subsidiary to, create, form or acquire any Subsidiaries, except for Domestic
Subsidiaries which are joined as Additional Credit Parties and Foreign
Subsidiaries to the extent reasonably necessary in the conduct of its business,
in each case, in accordance with the terms hereof. The Credit Parties will not
sell, transfer, pledge or otherwise dispose of any Capital Stock or other equity
interests in any of the Borrower's Subsidiaries and the Borrower will not permit
any of its Subsidiaries to issue, sell, transfer, pledge or otherwise dispose of
any of their Capital Stock or other equity interests, except in a transaction
permitted by Section 6.5(a). The Borrower shall be entitled to issue and sell
Capital Stock so long as no Change of Control or other Event of Default results
or would result therefrom.
Section 6.9 Fiscal Year; Organizational Documents; Material
Contracts.
The Borrower will not, nor will it permit any direct or indirect
Subsidiary to, change its fiscal year. None of the Credit Parties nor any of
their Subsidiaries will amend, modify or change its articles of incorporation
(or corporate charter or other similar organizational document) or bylaws (or
other similar document) or operating agreement in any respect adverse to the
Lenders without the prior written consent of the Required Lenders. None of the
55
Credit Parties nor any of their Subsidiaries will, without the prior written
consent of the Administrative Agent, amend, modify, cancel or terminate or fail
to renew or extend or permit the amendment, modification, cancellation or
termination of any of the Material Contracts, except to the extent that such
amendments, modifications, cancellations or terminations could not reasonably be
expected to have a Material Adverse Effect.
Section 6.10 Limitation on Restricted Actions.
The Borrower will not, nor will it permit any direct or indirect
Subsidiary to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
such Person to (a) pay dividends or make any other distributions to any Credit
Party on its Capital Stock or with respect to any other interest or
participation in, or measured by, its profits, (b) pay any Indebtedness or other
obligation owed to any Credit Party, (c) make loans or advances to any Credit
Party, (d) sell, lease or transfer any of its properties or assets to any Credit
Party, or (e) act as a Guarantor and pledge its assets pursuant to the Credit
Documents or any renewals, refinancings, exchanges, refundings or extension
thereof, except (in respect of any of the matters referred to in clauses (a)-(d)
above) for such encumbrances or restrictions existing under or by reason of (i)
this Agreement and the other Credit Documents, (ii) applicable law, (iii) any
document or instrument governing Indebtedness incurred pursuant to Section
6.1(c), provided that any such restriction contained therein relates only to the
asset or assets constructed or acquired in connection therewith or (iv) any
Permitted Lien or any document or instrument governing any Permitted Lien,
provided that any such restriction contained therein relates only to the asset
or assets subject to such Permitted Lien.
Section 6.11 Restricted Payments.
The Borrower will not, nor will it permit any direct or indirect
Subsidiary to, directly or indirectly, declare, order, make or set apart any sum
for or pay any Restricted Payment, except, so long as no Event of Default then
exists, (i) to make dividends payable solely in the same class of Capital Stock
of such Person, (ii) to make dividends or other distributions payable to the
Borrower (directly or indirectly through its Subsidiaries), (iii) to make
dividends or other distributions payable to the holders of the minority equity
interests of Way Station, Coaching, Xxxx Xxxxxxxxxx or Glenoit in a manner and
amount consistent with the performance of such Person and consistent with past
practices and in any event in an aggregate amount not to exceed $1,000,000 in
any fiscal year, (iv) to make payments permitted under Section 6.7, (v) to
repurchase or redeem Capital Stock and options therefor held by any employees of
the Borrower or its Subsidiaries in an aggregate amount not to exceed $500,000
in any fiscal year, (vi) to pay any salary, bonus or other form of compensation
to any Person who is a shareholder and employee of Way Station, Coaching, Xxxx
Xxxxxxxxxx or Glenoit in an amount consistent with past practices, and (vii)
after the Term Loans have been repaid in full, to repurchase shares of the
Borrower's common Capital Stock in an aggregate amount not to exceed $10,000,000
during the term of this Agreement.
Section 6.12 Prepayments of Indebtedness, etc.
The Borrower will not, nor will it permit any direct or indirect
Subsidiary to, after the issuance thereof, amend or modify (or permit the
amendment or modification of) any of the terms of any Indebtedness if such
amendment or modification would add or change any terms in a manner adverse to
the issuer of such Indebtedness, or shorten the final maturity or average life
to maturity or require any payment to be made sooner than originally scheduled
or increase the interest rate applicable thereto or change any subordination
provision thereof, or make any prepayment of principal of, premium, if any, or
interest on, redemption, purchase, retirement, defeasance, sinking fund or other
similar payment with respect to, any subordinated indebtedness.
Section 6.13 Sale Leasebacks.
The Borrower will not, nor will it permit any direct or indirect
Subsidiary to, directly or indirectly, become or remain liable as lessee or as
guarantor or other surety with respect to any lease, whether an operating lease
or a Capital Lease, of any property (whether real, personal or mixed), whether
now owned or hereafter acquired, (a) which any Consolidated Party has sold or
transferred or is to sell or transfer to a Person which is not another Credit
Party or (b) which any Consolidated Party intends to use for substantially the
56
same purpose as any other property which has been sold or is to be sold or
transferred by such Consolidated Party to another Person which is not another
Credit Party in connection with such lease.
Section 6.14 No Further Negative Pledges.
The Borrower will not, nor will it permit any direct or indirect
Subsidiary to, enter into, assume or become subject to any agreement prohibiting
or otherwise restricting the creation or assumption of any Lien upon its
properties or assets, whether now owned or hereafter acquired, or requiring the
grant of any security for such obligation if security is given for some other
obligation, except (a) pursuant to this Agreement and the other Credit
Documents, (b) pursuant to any document or instrument governing Indebtedness
incurred pursuant to Section 6.1(b), provided that any such restriction
contained therein relates only to the asset or assets constructed or acquired in
connection therewith, (c) in connection with any Permitted Lien or any document
or instrument governing any Permitted Lien, provided that any such restriction
contained therein relates only to the asset or assets subject to such Permitted
Lien, (d) such prohibitions and/or restrictions existing as of the Closing Date
and made known in writing to the Agent on or prior to the Closing Date and (e)
any customary non-assignment provisions contained in leases, subleases or other
contracts entered into in the ordinary course of business.
ARTICLE VII
EVENTS OF DEFAULT
Section 7.1 Events of Default.
An Event of Default shall exist upon the occurrence of any of the
following specified events (each an "Event of Default"):
(a) (i) The Borrower shall fail to pay any principal on any
Note when due in accordance with the terms thereof or hereof; or (ii)
the Borrower shall fail to reimburse the Issuing Lender for any LOC
Obligations when due in accordance with the terms hereof; or (iii) the
Borrower shall fail to pay any interest on any Note or any fee or other
amount payable hereunder when due in accordance with the terms thereof
or hereof and such failure shall continue unremedied for three (3)
Business Days (or any Guarantor shall fail to pay on the Guaranty in
respect of any of the foregoing or in respect of any other Guaranty
Obligations thereunder); or
(b) Any representation or warranty made or deemed made herein,
in the Security Documents or in any of the other Credit Documents or
which is contained in any certificate, document or financial or other
statement furnished at any time under or in connection with this
Agreement shall prove to have been incorrect, false or misleading on or
as of the date made or deemed made; or
(c) (i) Any Credit Party shall fail to perform, comply with or
observe any term, covenant or agreement applicable to it contained in
Section 5.7, Section 5.9 or Article VI hereof; or (ii) any Consolidated
Party shall fail to comply with any other covenant, contained in this
Agreement or the other Credit Documents (other than as described in
Sections 7.1(a) or 7.1(c)(i) above), and, to the extent capable of
being cured, such breach or failure to comply is not cured within
thirty (30) days of the earlier of (a) the date on which a Responsible
Officer of the Borrower becomes aware of such breach and (b) the date
on which the Borrower receives written notice thereof from the Agent or
any Lender; or
(d) Any Consolidated Party shall (i) default in any payment of
principal of or interest on any Indebtedness (other than the Notes) in
a principal amount outstanding of at least $1,000,000 in the aggregate
beyond any applicable grace period (not to exceed 30 days), if any,
provided in the instrument or agreement under which such Indebtedness
was created; or (ii) default in the observance or performance of any
other agreement or condition relating to any Indebtedness (other than
the Notes) in a principal amount outstanding of at least $1,000,000 in
the aggregate or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or
57
condition is to cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Indebtedness (or a
trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity; or
(e) (i) Any Consolidated Party shall commence any case,
proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or other
relief with respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian, conservator or other similar official for
it or for all or any substantial part of its assets, or any
Consolidated Party shall make a general assignment for the benefit of
its creditors; or (ii) there shall be commenced against any
Consolidated Party any case, proceeding or other action of a nature
referred to in clause (i) above which (A) results in the entry of an
order for relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of 30 days; or (iii)
there shall be commenced against any Consolidated Party any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial
part of its assets which results in the entry of an order for any such
relief which shall not have been vacated, discharged, or stayed or
bonded pending appeal within 30 days from the entry thereof; or (iv)
any Consolidated Party shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the
acts set forth in clause (i), (ii), or (iii) above; or (v) any
Consolidated Party shall generally not, or shall be unable to, or shall
admit in writing its inability to, pay its debts as they become due; or
(f) One or more judgments or decrees shall be entered against
a Consolidated Party involving in the aggregate a liability (to the
extent not paid when due or covered by insurance) of $1,000,000 or more
and all such judgments or decrees shall not have been paid and
satisfied, vacated, discharged, stayed or bonded pending appeal within
ten (10) days from the entry thereof; or
(g) (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the
Code) involving any Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist
with respect to any Plan or any Lien in favor of the PBGC or a Plan
(other than a Permitted Lien) shall arise on the assets of any Commonly
Controlled Entity, (iii) a Reportable Event shall occur with respect
to, or proceedings shall commence to have a trustee appointed, or a
trustee shall be appointed, to administer or to terminate, any Single
Employer Plan, which Reportable Event or commencement of proceedings or
appointment of a Trustee is, in the reasonable opinion of the Required
Lenders, likely to result in the termination of such Plan for purposes
of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for
purposes of Title IV of ERISA, (v) the Borrower, any of its
Subsidiaries or any Commonly Controlled Entity shall, or in the
reasonable opinion of the Required Lenders is likely to, incur any
liability in connection with a withdrawal from, or the Insolvency or
Reorganization of, any Multiemployer Plan or (vi) any other similar
event or condition shall occur or exist with respect to a Plan; and in
each case in clauses (i) through (vi) above, such event or condition,
together with all other such events or conditions, if any, could have a
Material Adverse Effect; or
(h) A Change of Control shall have occurred; or
(i) The Guaranty or any provision thereof shall cease to be in
full force and effect or any Guarantor or any Person acting by or on
behalf of any Guarantor shall deny or disaffirm any Guarantor's
obligations under the Guaranty; or
(j) Any other Credit Document shall fail to be (or any
Consolidated Party or any Person acting by or on behalf of any
Consolidated Party shall deny or disaffirm that any Credit Document is)
in full force and effect or to give the Administrative Agent, the
Security Trustee and/or the Lenders the security interests, liens,
rights, powers and privileges purported to be created thereby (except
58
as such documents may be terminated or no longer in force and effect in
accordance with the terms thereof, other than those indemnities and
provisions which by their terms shall survive).
Section 7.2 Acceleration; Remedies.
Upon the occurrence of an Event of Default, then, and in any such
event, (a) if such event is an Event of Default specified in Section 7.1(e)
above, automatically the Commitments shall immediately terminate and the Loans
(with accrued interest thereon), and all other amounts under the Credit
Documents (including without limitation the maximum amount of all contingent
liabilities under Letters of Credit) shall immediately become due and payable,
and the Borrower shall immediately pay to the Administrative Agent cash
collateral as security for the LOC Obligations for subsequent drawings under
then outstanding Letters of Credit in an amount equal to the maximum amount
which may be drawn under Letters of Credit then outstanding, and (b) if such
event is any other Event of Default, either or both of the following actions may
be taken: (i) with the written consent of the Required Lenders, the
Administrative Agent may, or upon the written request of the Required Lenders,
the Administrative Agent shall, by notice to the Borrower declare the
Commitments to be terminated forthwith, whereupon the Commitments shall
immediately terminate; and/or (ii) with the written consent of the Required
Lenders, the Administrative Agent may, or upon the written request of the
Required Lenders, the Administrative Agent shall, by notice of default to the
Borrower, declare the Loans (with accrued interest thereon) and all other
amounts owing under this Agreement and the Notes to be due and payable forthwith
and direct the Borrower to pay to the Administrative Agent cash collateral as
security for the LOC Obligations for subsequent drawings under then outstanding
Letters of Credit in an amount equal to the maximum amount which may be drawn
under Letters of Credit then outstanding, whereupon the same shall immediately
become due and payable. Upon the occurrence of any Event of Default then, and in
any such event, with the written consent of the Required Lenders, the
Administrative Agent may, or upon the written request of the Required Lenders,
the Administrative Agent shall, instruct the Security Trustee to exercise its
rights, powers and authorities to enforce any of the Security Documents. Except
as expressly provided above in this Section 7.2, presentment, demand, protest
and all other notices of any kind are hereby expressly waived.
ARTICLE VIII
THE ADMINISTRATIVE AGENT
Section 8.1 Appointment.
Each Lender hereby irrevocably designates and appoints First Union as
the Administrative Agent of such Lender under this Agreement, and each such
Lender irrevocably authorizes First Union, as the Administrative Agent for such
Lender, to take such action on its behalf under the provisions of this Agreement
and to exercise such powers and perform such duties as are expressly delegated
to the Administrative Agent by the terms of this Agreement, together with such
other powers as are reasonably incidental thereto. Notwithstanding any provision
to the contrary elsewhere in this Agreement, the Administrative Agent shall not
have any duties or responsibilities, except those expressly set forth herein, or
any fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Administrative Agent.
Section 8.2 Delegation of Duties by Administrative Agent.
The Administrative Agent may execute any of its duties under this
Agreement by or through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible for the negligence or misconduct
of any agents or attorneys-in-fact selected by it with reasonable care. Without
limiting the foregoing, the Administrative Agent may appoint one of its
affiliates as its agent to perform the functions of the Administrative Agent
hereunder relating to the advancing of funds to the Borrower and distribution of
funds to the Lenders and to perform such other related functions of the
Administrative Agent hereunder as are reasonably incidental to such functions.
59
Section 8.3 Exculpatory Provisions for Administrative Agent.
Neither the Administrative Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates shall be (i) liable for any
action lawfully taken or omitted to be taken by it or such Person under or in
connection with this Agreement (except for its or such Person's own gross
negligence or willful misconduct) or (ii) responsible in any manner to any of
the Lenders for any recitals, statements, representations or warranties made by
any Consolidated Party or any officer thereof contained in this Agreement or in
any certificate, report, statement or other document referred to or provided for
in, or received by the Administrative Agent under or in connection with, this
Agreement or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of any of the Credit Documents or for any failure of any
Consolidated Party to perform its obligations hereunder or thereunder. The
Administrative Agent shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance by any Consolidated
Party of any of the agreements contained in, or conditions of, this Agreement,
or to inspect the properties, books or records of any Consolidated Party.
Section 8.4 Reliance by Administrative Agent.
The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any Note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it in
good faith to be genuine and correct and to have been signed, sent or made by
the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to any Consolidated Party), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless (a) a written notice of assignment, negotiation
or transfer thereof shall have been filed with the Administrative Agent and (b)
the Administrative Agent shall have received the written agreement of such
assignee to be bound hereby as fully and to the same extent as if such assignee
were an original Lender party hereto, in each case in form satisfactory to the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement unless it shall
first receive such advice or concurrence of the Required Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
any of the Credit Documents in accordance with a request of the Required Lenders
or all of the Lenders, as may be required under this Agreement, and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Lenders and all future holders of the Notes.
Section 8.5 Notice of Default to Administrative Agent.
The Administrative Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless the
Administrative Agent has received notice from a Lender or the Borrower referring
to this Agreement, describing such Default or Event of Default 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; provided, however, that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders except to the extent that
this Agreement expressly requires that such action be taken, or not taken, only
with the consent or upon the authorization of the Required Lenders, or all of
the Lenders, as the case may be.
Section 8.6 Non-Reliance on Administrative Agent and Other Lenders.
Each Lender expressly acknowledges that neither the Administrative
Agent nor any of its officers, directors, employees, agents, attorneys-in-fact
or affiliates has made any representation or warranty to it and that no act by
the Administrative Agent hereinafter taken, including any review of the affairs
of any Consolidated Party, 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
60
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Borrower or any other Consolidated Party
and made its own decision to make its Loans hereunder and enter into this
Agreement. Each Lender also represents that it will, independently and without
reliance upon the Administrative Agent or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in taking or not taking
action under this Agreement, and to make such investigation as it deems
necessary to inform itself as to the business, operations, property, financial
and other condition and creditworthiness of the Borrower and the other
Consolidated Parties. Except for notices, reports and other documents expressly
required to be furnished to the Lenders by the Administrative Agent hereunder,
the Administrative Agent shall not have any duty or responsibility to provide
any Lender with any credit or other information concerning the business,
operations, property, condition (financial or otherwise), prospects or
creditworthiness of the Borrower or any other Consolidated Party which may come
into the possession of the Administrative Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates.
Section 8.7 Indemnification of Administrative Agent.
The Lenders agree to indemnify the Administrative Agent in its capacity
as such hereunder (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so), ratably according to their
respective Commitment Percentages in effect on the date on which indemnification
is sought under this Section, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Notes)
be imposed on, incurred by or asserted against the Administrative Agent in any
way relating to or arising out of any Credit Document or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the
Administrative Agent under or in connection with any of the foregoing; provided,
however, that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements to the extent resulting from the Administrative
Agent's gross negligence or willful misconduct, as determined by a court of
competent jurisdiction. The agreements in this Section 8.7 shall survive the
termination of this Agreement and payment of the Notes and all other amounts
payable hereunder.
Section 8.8 Administrative Agent in Its Individual Capacity.
The Administrative Agent and its affiliates may make loans to, accept
deposits from and generally engage in any kind of business with the Borrower and
the other Consolidated Parties as though the Administrative Agent were not the
Administrative Agent hereunder. With respect to the Loans made or renewed by it
and any Note issued to it, the Administrative Agent shall have the same rights
and powers under this Agreement as any Lender and may exercise the same as
though it were not the Administrative Agent, and the terms "Lender" and
"Lenders" shall include the Administrative Agent in its individual capacity.
Section 8.9 Successor Administrative Agent.
The Administrative Agent may resign as Administrative Agent upon 30
days' prior written notice to the Borrower and the Lenders. If the
Administrative Agent shall resign as Administrative Agent under this Agreement
and the Notes, then the Required Lenders shall appoint from among the Lenders a
successor agent for the Lenders, which successor agent (so long as no Default or
Event of Default shall exist) shall be approved by the Borrower (such approval
not to be unreasonably withheld or delayed), whereupon such successor agent
shall succeed to the rights, powers and duties of the Administrative Agent, and
the term "Administrative Agent" shall mean such successor agent effective upon
such appointment and approval, and the former Administrative Agent's rights,
powers and duties as Administrative Agent shall be terminated, without any other
or further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Notes. After any retiring
Administrative Agent's resignation as Administrative Agent, the provisions of
this Article VIII shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Administrative Agent under this Agreement.
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Section 8.10 Rights and Remedies to be Exercised by Agent Only.
Each Lender agrees that, except as set forth in Subsection 9.7, no
Lender shall have any right individually (i) to realize upon the security
created by the Security Documents or any other Credit Document, (ii) to enforce
any provision of this Credit Agreement or any other Credit Document against one
or more of the Consolidated Parties, or (iii) to make demand under this Credit
Agreement or any other Credit Document against one or more of the Consolidated
Parties; provided, however, that notwithstanding any of the foregoing to the
contrary, each Lender shall continue to have, to the extent permitted by law,
(a) a separate right of payment and shall be considered a separate "creditor"
holding a separate "claim" within the meaning of Section 101(5) of the
Bankruptcy Code or any other insolvency statute in a proceeding instituted by or
against any Consolidated Party pursuant to the Bankruptcy Code or any other such
insolvency statute, and (b) a separate right to pursue claims against the
Borrower under Subsections 2.15 through 2.18 and any other rights to
indemnification pursuant to Subsections 9.5(b), (c) and (d).
Section 8.11 Syndication and Documentation Agent.
The terms "Syndication Agent" and "Documentation Agent" shall not
confer any rights, powers, duties, liabilities, fiduciary relationships or
obligations under this Credit Agreement or any of the other documents related
hereto.
Section 8.12 Appointment of Security Trustee.
Each Lender and the Administrative Agent hereby appoints the Security
Trustee to act as its trustee under and in relation to the Security Documents to
which the Security Trustee is a party pursuant to this Agreement and to hold the
Trust Property as trustee for the Administrative Agent and the Lenders on the
trusts and other terms contained in the Security Documents to which the Security
Trustee is a party and the Administrative Agent and each Lender hereby
irrevocably authorizes the Security Trustee to exercise such rights, powers and
discretions as are specifically delegated to the Security Trustee by the terms
of the Security Documents to which the Security Trustee is a party together with
all such rights, powers and discretions as are reasonably incidental thereto.
Section 8.13 Successor Security Trustee.
(a) Resignation. The Security Trustee may resign its appointment under
any of this Agreement or the Security Documents to which the Security Trustee is
a party at any time by giving not less than thirty days' notice in writing to
that effect to each of the other parties to this Agreement provided that such
resignation shall not become effective until a successor to the Security Trustee
has been appointed and accepted its appointment in accordance with the following
provisions of this Section 8.11 and all necessary documents have been entered
into to ensure that the benefit of the Security Documents is held by such
successor.
(b) Appointment of Successor. If the Security Trustee gives notice of
its resignation the Administrative Agent may appoint a successor. If the
Administrative Agent has not within sixty days after such notice of resignation
appointed a successor to the Security Trustee which shall have accepted such
appointment, the retiring Security Trustee shall have the right to appoint such
a successor itself.
(c) Discharge. If a successor to the Security Trustee is appointed
under the provisions of this Section 8.13 then the retiring Security Trustee
shall be discharged from any further obligations under this Agreement and the
Security Documents to which the Security Trustee is a party but shall remain
entitled to the benefit of the provisions of this Section 8.13 and its successor
and each of the other parties to this Agreement shall have the same rights and
obligations amongst themselves as they would have had if such successor had been
a party to this Agreement.
(d) Disclosure. The retiring Security Trustee shall make available to
its successor such documents and records and provide such assistance as the
successor may reasonably request for the purpose of performing its functions
under this Agreement and the Security Documents to which the Security Trustee is
a party. Notwithstanding any provision to the contrary, the Security Trustee
shall not be obliged to disclose to any person any confidential or other
information if the disclosure would or might in its reasonable opinion
constitute a breach of any law or fiduciary duty.
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Section 8.14 Protection of Security Trustee.
The benefits conferred on the Administrative Agent pursuant to this
Article 8 regarding rights to indemnification and the exercise of its rights,
powers, authorizations, discretions, duties and responsibilities pursuant to
this Agreement and any other Credit Document and also pursuant to Article 9
shall also be conferred, where appropriate, on the Security Trustee in relation
to this Agreement and the Security Documents to which the Security Trustee is a
party and references to the Administrative Agent in this Article 8 and Article 9
shall be read and construed as references to the Administrative Agent and/or the
Security Trustee accordingly.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Amendments, Waivers and Release of Collateral.
Neither this Agreement, nor any of the Notes, nor any of the other
Credit Documents, nor any terms hereof or thereof may be amended, supplemented,
waived or modified except in accordance with the provisions of this Section, nor
may the Borrower, any Guarantor or any other obligor hereunder or any Collateral
be released except as specifically provided herein or in the Security Documents
or in accordance with the provisions of this Section 9.1. The Required Lenders
may, or, with the written consent of the Required Lenders, the Administrative
Agent and/or the Security Trustee may, from time to time, (a) enter into with
the Borrower or any other Consolidated Party written amendments, supplements or
modifications hereto and to the other Credit Documents for the purpose of adding
any provisions to this Agreement or the other Credit Documents or changing in
any manner the rights of the Lenders or of the Borrower or any other
Consolidated Party hereunder or thereunder or (b) waive, on such terms and
conditions as the Required Lenders may specify in such instrument, any of the
requirements of this Agreement or the other Credit Documents or any Default or
Event of Default and its consequences or (c) release collateral in accordance
with the terms hereof or of any Security Document or on such other terms and
conditions as the Required Lenders may agree; provided, however, that no such
waiver and no such amendment, waiver, supplement, modification or release shall:
(i) reduce the amount or extend the scheduled date of
maturity of any Loan or Note or any installment thereon, or
reduce the stated rate of any interest or fee payable
hereunder (other than interest at the increased post-default
rate) or extend the scheduled date of any payment thereof or
increase the amount or extend the expiration date of any
Lender's Commitment, in each case without the written consent
of each Lender directly affected thereby; or
(ii) amend, modify or waive any provision of this
Section 9.1 or reduce the percentage specified in the
definition of Required Lenders, without the written consent of
all the Lenders; or
(iii) amend, modify or waive any provision of Article
VIII without the written consent of the Administrative Agent
and the Security Trustee; or
(iv) release the Borrower or any material Guarantor
from its obligations hereunder or under the Guaranty, without
the written consent of all of the Lenders; or
(v) release all or substantially all of the
collateral, without the written consent of all of the Lenders;
or
(vi) amend, modify or waive any provision of the
Credit Documents relating to the percentage level of the
Lenders required to consent to or approve any request of the
Credit Parties or to waive any condition or provision of the
Credit Documents, without the written consent of all of the
Lenders and, provided, that no amendment, waiver or consent
affecting the rights or duties of the Administrative Agent,
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the Security Trustee or the Issuing Lender under any Credit
Document shall in any event be effective, unless in writing
and signed by the Administrative Agent, the Security Trustee
and/or the Issuing Lender, as applicable, in addition to the
Lenders required herein above to take such action; or
(vii) subordinate the Loans to any other
Indebtedness, without the written consent of all the Lenders.
Any such waiver, any such amendment, supplement or modification and any
such release shall apply equally to each of the Lenders and shall be binding
upon the Borrower, the other Credit Parties, the Lenders, the Administrative
Agent, the Security Trustee and all future holders of the Notes. In the case of
any waiver, the Borrower, the other Credit Parties, the Lenders, the
Administrative Agent and the Security Trustee shall be restored to their former
position and rights hereunder and under the outstanding Loans and Notes and
other Credit Documents, and any Default or Event of Default waived shall be
deemed to be cured and not continuing; but no such waiver shall extend to any
subsequent or other Default or Event of Default, or impair any right consequent
thereon.
Notwithstanding any of the foregoing to the contrary, the consent of
the Borrower shall not be required for any amendment, modification or waiver of
the provisions of Article VIII (other than the provisions of Section 8.9);
provided, however, that the Administrative Agent will provide written notice to
the Borrower of any such amendment, modification or waiver. In addition, the
Borrower, the Security Trustee and the Lenders hereby authorize the
Administrative Agent to modify this Agreement by unilaterally amending or
supplementing Schedule 2.1(a) from time to time in the manner requested by the
Borrower, the Security Trustee, the Administrative Agent or any Lender in order
to reflect any assignments or transfers of the Loans as provided for hereunder;
provided, however, that the Administrative Agent shall promptly deliver a copy
of any such modification to the Borrower, the Security Trustee and each Lender.
Notwithstanding the fact that the consent of all the Lenders is
required in certain circumstances as set forth above, (x) each Lender is
entitled to vote as such Lender sees fit on any bankruptcy reorganization plan
that affects the Loans, and each Lender acknowledges that the provisions of
Section 1126(c) of the Bankruptcy Code supersede the unanimous consent
provisions set forth herein and (y) the Required Lenders may consent to allow a
Consolidated Party to use cash collateral in the context of a bankruptcy or
insolvency proceeding.
Section 9.2 Notices.
Except as otherwise provided in Article II, all notices, requests and
demands to or upon the respective parties hereto to be effective shall be in
writing (including by telecopy), and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made (a) when delivered by
hand, (b) when transmitted via telecopy (or other facsimile device) to the
number set out herein, (c) the day following the day on which the same has been
delivered prepaid to a reputable national overnight air courier service, or (d)
the third Business Day following the day on which the same is sent by certified
or registered mail, postage prepaid, in each case, addressed as follows in the
case of the Borrower, the other Credit Parties, the Swingline Lender, the
Administrative Agent and the Security Trustee, and as set forth on Schedule 9.2
in the case of the Lenders, or to such other address as may be hereafter
notified by the respective parties hereto and any future holders of the Notes:
The Borrower
and the other
Credit Parties:
Right Management Consultants, Inc.
0000 Xxxxxx Xxxxxx-00xx Xxxxx
Xxxxxxxxxxxx, XX 00000-0000
Attention: G. Xxx Xxxx, Executive Vice President,
Corporate Development
Telephone: 000-000-0000
Telecopier: 000-000-0000
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with a copy to: Fox, Rothschild, O'Brien & Xxxxxxx, LLP
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxx
Telephone: 000-000-0000
Telecopier: 000-000-0000
The Administrative
Agent and/or the
Security Trustee: First Union National Bank
Charlotte Plaza
000 Xxxxx Xxxxxxx Xxxxxx, XX-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Syndication Agency Services
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with a copy to:
First Union National Bank
000 Xxxxxxxxx Xxxxxx
Mail Code GA 8050
Xxxxxxx, XX 00000
Attention: Xxxx Xxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
The Swingline Lender:
First Union National Bank
Charlotte Plaza
000 Xxxxx Xxxxxxx Xxxxxx, XX-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Syndication Agency Services
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
provided, that notices given by the Borrower pursuant to Section 2.1 or Section
2.10 hereof shall be effective only upon receipt thereof by the Administrative
Agent, the Security Trustee or the Swingline Lender, as applicable.
Section 9.3 No Waiver; Cumulative Remedies.
No failure to exercise and no delay in exercising, on the part of the
Administrative Agent, the Security Trustee or any Lender, any right, remedy,
power or privilege hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges
herein provided are cumulative and not exclusive of any rights, remedies, powers
and privileges provided by law.
Section 9.4 Survival of Representations and Warranties.
All representations and warranties made hereunder and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the Notes and the
making of the Loans, provided that all such representations and warranties shall
terminate on the date upon which the Commitments have been terminated and all
amounts owing hereunder and under any Notes have been paid in full.
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Section 9.5 Payment of Expenses and Taxes.
The Borrower agrees (a) to pay or reimburse the Administrative Agent
and the Security Trustee for all reasonable out-of-pocket costs and expenses
incurred in connection with the preparation, negotiation, printing and execution
of, and any amendment, supplement or modification to, this Agreement and the
other Credit Documents and any other documents prepared in connection herewith
or therewith (including, without limitation, appraisals and other professional
services, if any), and the consummation and administration of the transactions
contemplated hereby and thereby, together with the reasonable fees and
disbursements of counsel to the Administrative Agent and the Security Trustee,
(b) to pay or reimburse each Lender, the Administrative Agent and the Security
Trustee for all its costs and expenses incurred in connection with the
enforcement or preservation of any rights under this Agreement, the Notes and
any such other documents, including, without limitation, the reasonable fees and
disbursements of counsel to the Administrative Agent, to the Security Trustee
and to the Lenders (including reasonable allocated costs of in-house legal
counsel), and (c) on demand, to pay, indemnify, and hold each Lender, the
Administrative Agent and the Security Trustee harmless from, any and all
recording and filing fees and any and all liabilities with respect to, or
resulting from any delay in paying, stamp, excise and other similar taxes, if
any, which may be payable or determined to be payable in connection with the
execution and delivery of, or consummation or administration of any of the
transactions contemplated by, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, the Credit Documents and any
such other documents, and (d) to pay, indemnify, and hold each Lender, the
Administrative Agent and the Security Trustee and their affiliates harmless from
and against, any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of the Credit Documents and any such other
documents and the use, or proposed use, of proceeds of the Loans (all of the
foregoing, collectively, the "indemnified liabilities"); provided, however, that
the Borrower shall not have any obligation hereunder to the Administrative
Agent, the Security Trustee or any Lender with respect to indemnified
liabilities arising from the gross negligence or willful misconduct of the
Administrative Agent or such Lender, as determined by a court of competent
jurisdiction. The agreements in this Section 9.5 shall survive repayment of the
Loans, Notes and all other amounts payable hereunder.
Section 9.6 Successors and Assigns; Participations; Purchasing
Lenders.
(a) This Agreement shall be binding upon and inure to the
benefit of the Borrower, the other Credit Parties, the Lenders, the
Administrative Agent, the Security Trustee, all future holders of the
Notes and their respective successors and assigns, except that neither
the Borrower nor any of the other Credit Parties may assign or transfer
any of its rights or obligations under this Agreement or the other
Credit Documents without the prior written consent of each Lender.
Nothing herein shall prevent any Lender from pledging or assigning all
or any portion of its rights under the Credit Documents (including any
portion of the Notes) to any of the twelve Federal Reserve Banks in
support of borrowings made by such Lender from such Federal Reserve
Bank.
(b) Any Lender may, in the ordinary course of its commercial
banking or investment business and in accordance with applicable law,
at any time sell to one or more banks, insurance companies or other
financial institutions ("Participants") participating interests in any
Loan owing to such Lender, any Note held by such Lender, any Commitment
of such Lender, or any other interest, right and/or obligation of such
Lender hereunder. In the event of any such sale by a Lender of
participating interests to a Participant, such Lender's obligations
under this Agreement to the other parties to this Agreement shall
remain unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any such
Note for all purposes under this Agreement, and the Borrower, the
Administrative Agent and the Security Trustee shall continue to deal
solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement. No Lender shall transfer
or grant any participation under which the Participant shall have
rights to approve any amendment to or waiver of this Agreement or any
other Credit Document except to the extent such amendment or waiver
would (i) extend the scheduled maturity of any Loan or Note or any
installment thereon in which such Participant is participating, or
reduce the stated rate or extend the time of payment of interest or
fees thereon (except in connection with a waiver of interest at the
increased post-default rate) or reduce the principal amount thereof, or
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increase the amount of the Participant's participation over the amount
thereof then in effect (it being understood that a waiver of any
Default or Event of Default shall not constitute a change in the terms
of such participation, and that an increase in any Commitment or Loan
shall be permitted without consent of any participant if the
Participant's participation is not increased as a result thereof), (ii)
release the Borrower or any material Guarantor from its obligations
hereunder or under the Guaranty, (iii) release all or substantially all
of the collateral, or (iv) consent to the assignment or transfer by the
Borrower of any of its rights and obligations under this Agreement. In
the case of any such participation, the Participant shall not have any
rights under this Agreement or any of the other Credit Documents (the
Participant's rights against such Lender in respect of such
participation to be those set forth in the agreement executed by such
Lender in favor of the Participant relating thereto) and all amounts
payable by the Borrower hereunder shall be determined as if such Lender
had not sold such participation, provided that each Participant shall
be entitled to the benefits of Sections 2.15, 2.16, 2.17, 2.18 and 9.5
with respect to its participation in the Commitments and the Loans
outstanding from time to time; provided, that no Participant shall be
entitled to receive any greater amount pursuant to such Sections than
the transferor Lender would have been entitled to receive in respect of
the amount of the participation transferred by such transferor Lender
to such Participant had no such transfer occurred.
(c) Any Lender may, in the ordinary course of its commercial
banking or investment business and in accordance with applicable law,
at any time, sell or assign to any Lender or any affiliate thereof and
with the consent of the Administrative Agent and the Security Trustee
and, so long as no Default or Event of Default has occurred and is
continuing, the Borrower (in each case, which consent shall not be
unreasonably withheld), to one or more additional banks, insurance
companies or other financial institutions ("Purchasing Lenders"), all
or any part of its rights and obligations under this Agreement and the
Notes in minimum amounts of $1,000,000 (or, if less, the entire amount
of such Lender's obligations), pursuant to a Commitment Transfer
Supplement, executed by such Purchasing Lender and such transferor
Lender (and, in the case of a Purchasing Lender that is not then a
Lender or an affiliate thereof, the Administrative Agent and the
Security Trustee and, so long as no Event of Default has occurred and
is continuing, the Borrower), and delivered to the Administrative Agent
for its acceptance and recording in the Register; provided, however,
that any sale or assignment to an existing Lender or Affiliate of a
Lender shall not require the consent of the Administrative Agent and
the Security Trustee or the Borrower nor shall any such sale or
assignment be subject to the minimum assignment amounts specified
herein. Upon such execution, delivery, acceptance and recording, from
and after the Transfer Effective Date specified in such Commitment
Transfer Supplement, (x) the Purchasing Lender thereunder shall be a
party hereto and, to the extent provided in such Commitment Transfer
Supplement, have the rights and obligations of a Lender hereunder with
a Commitment as set forth therein, and (y) the transferor Lender
thereunder shall, to the extent provided in such Commitment Transfer
Supplement, be released from its obligations under this Agreement (and,
in the case of a Commitment Transfer Supplement covering all or the
remaining portion of a transferor Lender's rights and obligations under
this Agreement, such transferor Lender shall cease to be a party hereto
but shall continue to have rights which expressly survive termination
of its Commitment hereunder). Such Commitment Transfer Supplement shall
be deemed to amend this Agreement to the extent, and only to the
extent, necessary to reflect the addition of such Purchasing Lender and
the resulting adjustment of Commitment Percentages arising from the
purchase by such Purchasing Lender of all or a portion of the rights
and obligations of such transferor Lender under this Agreement and the
Notes. On or prior to the Transfer Effective Date specified in such
Commitment Transfer Supplement, the Borrower, at its own expense, shall
execute and deliver to the Administrative Agent in exchange for the
Notes delivered to the Administrative Agent pursuant to such Commitment
Transfer Supplement new Notes to the order of such Purchasing Lender in
an amount equal to the Commitment assumed by it pursuant to such
Commitment Transfer Supplement and, unless the transferor Lender has
not retained a Commitment hereunder, new Notes to the order of the
transferor Lender in an amount equal to the Commitment retained by it
hereunder. Such new Notes shall be dated the Closing Date and shall
otherwise be in the form of the Notes replaced thereby. The Notes
surrendered by the transferor Lender shall be returned by the
Administrative Agent to the Borrower marked "canceled".
(d) The Administrative Agent shall maintain at its address
referred to in Section 9.2 a copy of each Commitment Transfer
Supplement delivered to it and a register (the "Register") for the
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recordation of the names and addresses of the Lenders and the
Commitment of, and principal amount of the Loans owing to, each Lender
from time to time. The entries in the Register shall be conclusive, in
the absence of manifest error, and the Borrower, the Administrative
Agent, the Security Trustee and the Lenders may treat each Person whose
name is recorded in the Register as the owner of the Loan recorded
therein for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of a duly executed Commitment Transfer
Supplement, together with payment to the Administrative Agent by the
transferor Lender or the Purchasing Lender, as agreed between them, of
a registration and processing fee of $3,500 for each Purchasing Lender
listed in such Commitment Transfer Supplement and the Notes subject to
such Commitment Transfer Supplement, the Administrative Agent shall (i)
accept such Commitment Transfer Supplement, (ii) record the information
contained therein in the Register and (iii) give prompt notice of such
acceptance and recordation to the Lenders, the Security Trustee and the
Borrower.
(f) The Borrower authorizes each Lender to disclose to any
Participant or Purchasing Lender (each, a "Transferee") and any
prospective Transferee any and all financial information in such
Lender's possession concerning the Borrower and its Affiliates which
has been delivered to such Lender by or on behalf of the Borrower
pursuant to this Agreement or which has been delivered to such Lender
by or on behalf of the Borrower in connection with such Lender's credit
evaluation of the Borrower and its Affiliates prior to becoming a party
to this Agreement, in each case subject to Section 9.16.
(g) At the time of each assignment pursuant to this Section
9.6 to a Person which is not already a Lender hereunder and which is
not a United States person (as such term is defined in Section
7701(a)(30) of the Code) for federal income tax purposes, the
respective assignee Lender shall provide to the Borrower and the
Administrative Agent the appropriate Internal Revenue Service Forms
described in Section 2.18.
(h) Nothing herein shall prohibit any Lender from pledging or
assigning any of its rights under this Agreement (including, without
limitation, any right to payment of principal and interest under any
Note) to any Federal Reserve Bank in accordance with applicable laws.
Section 9.7 Adjustments; Set-off.
(a) Each Lender agrees that if any Lender (a "Benefited
Lender") shall at any time receive any payment of all or part of its
Loans, or interest thereon, or receive any collateral in respect
thereof (whether voluntarily or involuntarily, by set-off, pursuant to
events or proceedings of the nature referred to in Section 7.1(e), or
otherwise) in a greater proportion than any such payment to or
collateral received by any other Lender, if any, in respect of such
other Lender's Loans, or interest thereon, such benefited Lender shall
purchase for cash from the other Lenders a participating interest in
such portion of each such other Lender's Loan, or shall provide such
other Lenders with the benefits of any such collateral, or the proceeds
thereof, as shall be necessary to cause such benefited Lender to share
the excess payment or benefits of such collateral or proceeds ratably
with each of the Lenders; provided, however, that if all or any portion
of such excess payment or benefits is thereafter recovered from such
benefited Lender, such purchase shall be rescinded, and the purchase
price and benefits returned, to the extent of such recovery, but
without interest. The Borrower agrees that each Lender so purchasing a
portion of another Lender's Loans may exercise all rights of payment
(including, without limitation, rights of set-off) with respect to such
portion as fully as if such Lender were the direct holder of such
portion.
(b) In addition to any rights and remedies of the Lenders
provided by law (including, without limitation, other rights of
set-off), each Lender shall have the right, without prior notice to the
Borrower, any such notice being expressly waived by the Borrower to the
extent permitted by applicable law, upon the occurrence of any Event of
Default, to setoff and appropriate and apply any and all deposits
(general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such
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Lender or any branch or agency thereof to or for the credit or the
account of the Borrower or any other Consolidated Party, or any part
thereof in such amounts as such Lender may elect, against and on
account of the obligations and liabilities of the Borrower and the
other Consolidated Parties to such Lender hereunder and claims of every
nature and description of such Lender against the Borrower and the
other Consolidated Parties, in any currency, whether arising hereunder,
under the Notes or under any documents contemplated by or referred to
herein or therein, as such Lender may elect, whether or not such Lender
has made any demand for payment and although such obligations,
liabilities and claims may be contingent or unmatured. The aforesaid
right of set-off may be exercised by such Lender against the Borrower,
any other Consolidated Party or against any trustee in bankruptcy,
debtor in possession, assignee for the benefit of creditors, receiver
or execution, judgment or attachment creditor of the Borrower or any
other Consolidated Party, or against anyone else claiming through or
against the Borrower, any other Consolidated Party or any such trustee
in bankruptcy, debtor in possession, assignee for the benefit of
creditors, receiver, or execution, judgment or attachment creditor,
notwithstanding the fact that such right of set-off shall not have been
exercised by such Lender prior to the occurrence of any Event of
Default. Each Lender agrees promptly to notify the Borrower, the
Administrative Agent and the Security Trustee after any such set-off
and application made by such Lender; provided, however, that the
failure to give such notice shall not affect the validity of such
set-off and application.
Section 9.8 Table of Contents and Section Headings.
The table of contents and the Section and subsection headings herein
are intended for convenience only and shall be ignored in construing this
Agreement.
Section 9.9 Counterparts.
This Agreement may be executed by one or more of the parties to this
Agreement on any number of separate counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same instrument. A set
of the copies of this Agreement signed by all the parties shall be lodged with
the Borrower and the Administrative Agent.
Section 9.10 Effectiveness.
This Agreement shall become effective on the date on which all of the
parties have signed a copy hereof (whether the same or different copies) and
shall have delivered the same to the Administrative Agent pursuant to Section
9.2 or, in the case of the Lenders, shall have given to the Administrative Agent
written, telecopied or telex notice (actually received) at such office that the
same has been signed and mailed to it.
Section 9.11 Severability.
Any provision of this Agreement which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
Section 9.12 Integration.
This Agreement and the Notes represent the agreement of the Borrower,
the other Credit Parties, the Administrative Agent, the Security Trustee and the
Lenders with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agent, the
Borrower, the other Credit Parties or any Lender relative to the subject matter
hereof not expressly set forth or referred to herein or in the Notes.
Section 9.13 Governing Law.
This Agreement and the Notes and the rights and obligations of the
parties under this Agreement and the Notes shall be governed by, and construed
and interpreted in accordance with, the law of the State of North Carolina.
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Section 9.14 Consent to Jurisdiction and Service of Process.
All judicial proceedings brought against the Borrower and/or any other
Consolidated Party with respect to this Agreement, any Note or any of the other
Credit Documents may be brought in any state court in Mecklenburg County, North
Carolina, or in any federal court for the Western District of North Carolina,
and, by execution and delivery of this Agreement, each of the Borrower and the
other Credit Parties accepts, for itself and in connection with its properties,
generally and unconditionally, the non-exclusive jurisdiction of the aforesaid
courts and irrevocably agrees to be bound by any final judgment rendered thereby
in connection with this Agreement from which no appeal has been taken or is
available. Each of the Borrower and the other Credit Parties irrevocably agrees
that all service of process in any such proceedings in any such court may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to it at its address set
forth in Section 9.2 or at such other address of which the Administrative Agent
shall have been notified pursuant thereto, such service being hereby
acknowledged by the each of the Borrower and the other Credit Parties to be
effective and binding service in every respect. Each of the Borrower, the other
Credit Parties, the Administrative Agent, the Security Trustee and the Lenders
irrevocably waives any objection, including, without limitation, any objection
to the laying of venue or based on the grounds of forum non conveniens which it
may now or hereafter have to the bringing of any such action or proceeding in
any such jurisdiction. Nothing herein shall affect the right to serve process in
any other manner permitted by law or shall limit the right of the Administrative
Agent, the Security Trustee or any Lender to bring proceedings against the
Borrower or the other Consolidated Parties in the court of any other
jurisdiction.
Section 9.15 Intentionally Omitted
Section 9.16 Confidentiality.
The Administrative Agent, the Security Trustee and each of the Lenders
agrees that it will use its best efforts not to disclose, without the prior
consent of the Borrower (other than to its employees, affiliates, auditors or
counsel or to another Lender), any information with respect to the Consolidated
Parties which is furnished pursuant to this Agreement, any other Credit Document
or any documents contemplated by or referred to herein or therein and which is
designated by the Borrower to the Lenders in writing as confidential or as to
which it is otherwise reasonably clear such information is not public, except
that any Lender may disclose any such information (a) as has become generally
available to the public other than by a breach of this Section 9.16, (b) as may
be required or appropriate in any report, statement or testimony submitted to
any municipal, state or federal regulatory body having or claiming to have
jurisdiction over such Lender or to the Federal Reserve Board or the Federal
Deposit Insurance Corporation or the OCC or the NAIC or similar organizations
(whether in the United States or elsewhere) or their successors, (c) as may be
required or appropriate in response to any summons or subpoena or any law,
order, regulation or ruling applicable to such Lender, (d) to any prospective
Participant or assignee in connection with any contemplated transfer pursuant to
Section 9.6, provided that such prospective transferee shall have been made
aware of this Section 9.16 and shall have agreed to be bound by its provisions
as if it were a party to this Agreement or (e) to Gold Sheets and other similar
bank trade publications, such information to consist of deal terms and other
information regarding the credit facilities evidenced by this Agreement
customarily found in such publications.
Section 9.17 Acknowledgments.
The Borrower and each of the other Credit Parties hereby acknowledges
that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of each Credit Document;
(b) neither the Administrative Agent, the Security Trustee nor
any Lender has any fiduciary relationship with or duty to the Borrower
or any other Consolidated Party arising out of or in connection with
this Agreement and the relationship between the Administrative Agent,
the Security Trustee and the Lenders, on the one hand, and the Borrower
and the other Credit Parties, on the other hand, in connection herewith
is solely that of debtor and creditor; and
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(c) no joint venture exists among the Lenders or among the
Borrower or the other Credit Parties and the Lenders.
Section 9.18 Waivers of Jury Trial.
THE BORROWER, THE OTHER CREDIT PARTIES, THE ADMINISTRATIVE AGENT, THE
SECURITY TRUSTEE AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE,
TO THE EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
ARTICLE X
GUARANTY
Section 10.1 The Guaranty.
In order to induce the Lenders to enter into this Agreement and to
extend credit hereunder and in recognition of the direct benefits to be received
by the Guarantors from the Extensions of Credit hereunder, each of the
Guarantors hereby agrees with the Administrative Agent, the Security Trustee and
the Lenders as follows: the Guarantor hereby unconditionally and irrevocably
jointly and severally guarantees as primary obligor and not merely as surety the
full and prompt payment when due, whether upon maturity, by acceleration or
otherwise, of any and all indebtedness of the Borrower to the Administrative
Agent, the Security Trustee and the Lenders. If any or all of the indebtedness
of the Borrower to the Administrative Agent, the Security Trustee and the
Lenders becomes due and payable hereunder, each Guarantor unconditionally
promises to pay such indebtedness to the Administrative Agent, the Security
Trustee and the Lenders, or order, on demand, together with any and all
reasonable expenses which may be incurred by the Administrative Agent, the
Security Trustee or the Lenders in collecting any of the indebtedness. The word
"indebtedness" is used in this Article X in its most comprehensive sense and
includes any and all advances, debts, obligations and liabilities of the
Borrower, including specifically all Credit Party Obligations, arising in
connection with this Agreement, the other Credit Documents or any Hedging
Agreement executed in connection herewith, in each case, heretofore, now, or
hereafter made, incurred or created, whether voluntarily or involuntarily,
absolute or contingent, liquidated or unliquidated, determined or undetermined,
whether or not such indebtedness is from time to time reduced, or extinguished
and thereafter increased or incurred, whether the Borrower may be liable
individually or jointly with others, whether or not recovery upon such
indebtedness may be or hereafter become barred by any statute of limitations,
and whether or not such indebtedness may be or hereafter become otherwise
unenforceable.
Notwithstanding any provision to the contrary contained herein or in
any other of the Credit Documents, to the extent the obligations of a Guarantor
shall be adjudicated to be invalid or unenforceable for any reason (including,
without limitation, because of any applicable state or federal law relating to
fraudulent conveyances or transfers) then the obligations of each such Guarantor
hereunder shall be limited to the maximum amount that is permissible under
applicable law (whether federal or state and including, without limitation, the
Bankruptcy Code).
Section 10.2 Bankruptcy.
Additionally, each of the Guarantors unconditionally and irrevocably
guarantees jointly and severally the payment of any and all indebtedness of the
Borrower to the Lenders whether or not due or payable by the Borrower upon the
occurrence of any of the events specified in Section 7.1(e), and unconditionally
promises to pay such indebtedness to the Administrative Agent and the Security
Trustee for the account of the Lenders, or order, on demand, in lawful money of
the United States. Each of the Guarantors further agrees that to the extent that
the Borrower or a Guarantor shall make a payment or a transfer of an interest in
any property to the Administrative Agent, the Security Trustee or any Lender,
which payment or transfer or any part thereof is subsequently invalidated,
declared to be fraudulent or preferential, or otherwise is avoided, and/or
required to be repaid to the Borrower or a Guarantor, the estate of the Borrower
or a Guarantor, a trustee, receiver or any other party under any bankruptcy law,
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state or federal law, common law or equitable cause, then to the extent of such
avoidance or repayment, the obligation or part thereof intended to be satisfied
shall be revived and continued in full force and effect as if said payment had
not been made.
Section 10.3 Nature of Liability.
The liability of each Guarantor hereunder is exclusive and independent
of any security for or other guaranty of the indebtedness of the Borrower
whether executed by any such Guarantor, any other guarantor or by any other
party, and no Guarantor's liability hereunder shall be affected or impaired by
(a) any direction as to application of payment by the Borrower or by any other
party, or (b) any other continuing or other guaranty, undertaking or maximum
liability of a guarantor or of any other party as to the indebtedness of the
Borrower, or (c) any payment on or in reduction of any such other guaranty or
undertaking, or (d) any dissolution, termination or increase, decrease or change
in personnel by the Borrower, or (e) any payment made to the Administrative
Agent, the Security Trustee or the Lenders on the indebtedness which the
Administrative Agent, the Security Trustee or such Lenders repay the Borrower
pursuant to court order in any bankruptcy, reorganization, arrangement,
moratorium or other debtor relief proceeding, and each of the Guarantors waives
any right to the deferral or modification of its obligations hereunder by reason
of any such proceeding.
Section 10.4 Independent Obligation.
The obligations of each Guarantor hereunder are independent of the
obligations of any other guarantor or the Borrower, and a separate action or
actions may be brought and prosecuted against each Guarantor whether or not
action is brought against any other guarantor or the Borrower and whether or not
any other Guarantor or the Borrower is joined in any such action or actions.
Section 10.5 Authorization.
Each of the Guarantors authorizes the Administrative Agent, the
Security Trustee and each Lender without notice or demand (except as shall be
required by applicable statute and cannot be waived), and without affecting or
impairing its liability hereunder, from time to time to (a) renew, compromise,
extend, increase, accelerate or otherwise change the time for payment of, or
otherwise change the terms of the indebtedness or any part thereof in accordance
with this Agreement, including any increase or decrease of the rate of interest
thereon, (b) take and hold security from any guarantor or any other party for
the payment of this Guaranty or the indebtedness and exchange, enforce waive and
release any such security, (c) apply such security and direct the order or
manner of sale thereof as the Administrative Agent, the Security Trustee and the
Lenders in their discretion may determine and (d) release or substitute any one
or more endorsers, guarantors, the Borrower or other obligors.
Section 10.6 Reliance.
It is not necessary for the Administrative Agent, the Security Trustee
or the Lenders to inquire into the capacity or powers of the Borrower or the
officers, directors, partners or agents acting or purporting to act on its
behalf, and any indebtedness made or created in reliance upon the professed
exercise of such powers shall be guaranteed hereunder.
Section 10.7 Waiver.
(a) Each of the Guarantors waives any right (except as shall
be required by applicable statute and cannot be waived) to require the
Administrative Agent, the Security Trustee or any Lender to (i) proceed
against the Borrower, any other guarantor or any other party, (ii)
proceed against or exhaust any security held from the Borrower, any
other guarantor or any other party, or (iii) pursue any other remedy in
the Administrative Agent's, the Security Trustee's or any Lender's
power whatsoever. Each of the Guarantors waives any defense based on or
arising out of any defense of the Borrower, any other guarantor or any
other party other than payment in full of the indebtedness, including
without limitation any defense based on or arising out of the
disability of the Borrower, any other guarantor or any other party, or
the unenforceability of the indebtedness or any part thereof from any
cause, or the cessation from any cause of the liability of the Borrower
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other than payment in full of the indebtedness. Without limiting the
generality of the provisions of Article X, each of the Guarantors
hereby specifically waives the benefits of N.C. Gen. Stat. xx.xx. 26-7
through 26-9, inclusive. The Administrative Agent, the Security Trustee
or any of the Lenders may, at their election, foreclose on any security
held by the Administrative Agent or a Lender by one or more judicial or
nonjudicial sales, whether or not every aspect of any such sale is
commercially reasonable (to the extent such sale is permitted by
applicable law), or exercise any other right or remedy the
Administrative Agent and any Lender may have against the Borrower or
any other party, or any security, without affecting or impairing in any
way the liability of any Guarantor hereunder except to the extent the
indebtedness has been paid. Each of the Guarantors waives any defense
arising out of any such election by the Administrative Agent and each
of the Lenders, even though such election operates to impair or
extinguish any right of reimbursement or subrogation or other right or
remedy of the Guarantors against the Borrower or any other party or any
security.
(b) Each of the Guarantors waives all presentments, demands
for performance, protests and notices, including without limitation
notices of nonperformance, notice of protest, notices of dishonor,
notices of acceptance of this Guaranty, and notices of the existence,
creation or incurring of new or additional indebtedness. Each Guarantor
assumes all responsibility for being and keeping itself informed of the
Borrower's financial condition and assets, and of all other
circumstances bearing upon the risk of nonpayment of the indebtedness
and the nature, scope and extent of the risks which such Guarantor
assumes and incurs hereunder, and agrees that none of the
Administrative Agent, the Security Trustee or any Lender shall have any
duty to advise such Guarantor of information known to it regarding such
circumstances or risks.
(c) Each of the Guarantors hereby agrees it will not exercise
any rights of subrogation which it may at any time otherwise have as a
result of this Guaranty (whether contractual, under Section 509 of the
U.S. Bankruptcy Code, or otherwise) to the claims of the Lenders
against the Borrower or any other guarantor of the indebtedness of the
Borrower owing to the Lenders (collectively, the "Other Parties") and
all contractual, statutory or common law rights of reimbursement,
contribution or indemnity from any Other Party which it may at any time
otherwise have as a result of this Guaranty until such time as the
Loans hereunder shall have been paid and the Commitments have been
terminated. Each of the Guarantors hereby further agrees not to
exercise any right to enforce any other remedy which the Administrative
Agent, the Security Trustee and the Lenders now have or may hereafter
have against any Other Party, any endorser or any other guarantor of
all or any part of the indebtedness of the Borrower and any benefit of,
and any right to participate in, any security or collateral given to or
for the benefit of the Lenders to secure payment of the indebtedness of
the Borrower until such time as the Loans hereunder shall have been
paid and the Commitments have been terminated.
Section 10.8 Limitation on Enforcement.
The Lenders agree that this Guaranty and the Credit Party Obligations
may not be enforced against any director, officer, employee or individual
stockholder of the Guarantors or the Borrower.
Section 10.9 Confirmation of Payment.
The Administrative Agent, the Security Trustee and the Lenders will,
upon request after payment of the indebtedness and obligations which are the
subject of this Guaranty and termination of the commitments relating thereto,
confirm to the Borrower, the Guarantors or any other Person that such
indebtedness and obligations have been paid and the commitments relating thereto
terminated, subject to the provisions of Section 10.2.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed and delivered by its proper and duly authorized
officers as of the day and year first above written.
BORROWER: RIGHT MANAGEMENT CONSULTANTS, INC.
By: /S/ G. XXX XXXX
---------------
Name: G. Xxx Xxxx
Title: Executive Vice President,
Corporate Development
GUARANTORS: RIGHT LICENSE HOLDING, INC.
By: /S/ G. XXX XXXX
---------------
Name: G. Xxx Xxxx
Title: Executive Vice President
RMC OF ILLINOIS, INC.
By: /S/ G. XXX XXXX
---------------
Name: G. Xxx Xxxx
Title: Executive Vice President
RIGHT ASSOCIATES-
GOVERNMENT SERVICES, INC.
By: /S/ G. XXX XXXX
---------------
Name: G. Xxx Xxxx
Title: Executive Vice President
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AGENTS, SECURITY
TRUSTEE AND LENDERS: FIRST UNION NATIONAL BANK
as Administrative Agent, Security Trustee
and a Lender
By: /S/ XXXXX X. XXXXX
------------------
Name: Xxxxx X. Xxxxx
Title: Managing Director
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FLEET NATIONAL BANK,
as Syndication Agent and a Lender
By: /S/ XXXXXX XXXXXXXXXX
---------------------
Name: Xxxxxx Xxxxxxxxxx
Title: Senior Vice President
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SUNTRUST BANK,
as Syndication Agent and a Lender
By: /S/ XXXXXX X. XXXXXXX
---------------------
Name: Xxxxxx X. Xxxxxxx
Title: Director
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UBS WARBURG LLC,
as Syndication Agent
By: /S/ XXXXX X. XXXX
-----------------
Name: Xxxxx X. Xxxx
Title: Managing Director
By: /S/ XXXXXXX XXXXXXX
-------------------
Name: Xxxxxxx Xxxxxxx
Title: Director
UBS AG, STAMFORD BRANCH,
as a Lender
By: /S/ XXXXXXX X. SAINT
--------------------
Name: Xxxxxxx X. Saint
Title: Associate Director, Banking Products
Services US
By: /S/ XXXXXXX XXXXXX
------------------
Name: Xxxxxxx Xxxxxx
Title: Associate Director, Banking Products
Services US
78
BANK OF AMERICA, N.A., as Documentation Agent
and a Lender
By: /S/ B. XXXXXXX XXXXXX XX.
-------------------------
Name: B. Xxxxxxx Xxxxxx, Xx.
Title: Vice President
79
XXXXX BROTHERS XXXXXXXX & CO.,
as a Lender
By: /S/ XXXXXX X. XXXXXXX, XX.
--------------------------
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: Senior Vice President
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COMMONWEALTH BANK, as a Lender
By: /S/ XXXXXXX X. XXXXXX
---------------------
Name: Xxxxxxx X. Xxxxxx
Title: SVP
81
XX XXXXXX XXXXX BANK, as a Lender
By: /S/ XXX X. XXXXXXX
------------------
Name: Xxx X. Xxxxxxx
Title: Vice President
82
NATIONAL CITY BANK, as a Lender
By: /S/ XXXXXXX X. XXXXXX
---------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
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SOVEREIGN BANK, as a Lender
By: /S/ XXXXXXX X. XXXXXXX
----------------------
Name: Xxxxxxx X. Xxxxxxx
Title: SVP
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PNC BANK, NATIONAL ASSOCIATION,
as a Lender
By: /S/ XXXXXXX X. XXXXXXXXX, XX.
-----------------------------
Name: Xxxxxxx X. Xxxxxxxxx, Xx.
Title: Vice President
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