CONFORMED COPY
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AMENDED AND RESTATED
REVOLVING CREDIT AND REIMBURSEMENT AGREEMENT
by and among
WATSCO, INC.
as Borrower,
NATIONSBANK, NATIONAL ASSOCIATION,
as Agent and as Lender
and
XXXXXXX BANK, N.A.,
FIRST UNION NATIONAL BANK,
SUNTRUST BANK,
as Co-Agents
and
THE LENDERS PARTY HERETO FROM TIME TO TIME
August 8, 1997
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TABLE OF CONTENTS
Page
ARTICLE I Definitions and Terms
1.1. Amendment and Restatement...............................................................................
1.2. Definitions.............................................................................................
1.3. Rules of Interpretation.................................................................................
1.4. Accounting Changes......................................................................................
ARTICLE II The Revolving Credit Facility
2.1. Revolving Loans.........................................................................................
2.2. Payment of Interest.....................................................................................
2.3. Payment of Principal....................................................................................
2.4. Non-Conforming Payments.................................................................................
2.5. Notes...................................................................................................
2.6. Pro Rata Payments.......................................................................................
2.7. Reductions..............................................................................................
2.8. Conversions and Elections of Subsequent Interest Periods................................................
2.9. [RESERVED]..............................................................................................
2.10. Unused Fees.............................................................................................
2.11. Deficiency Advances.....................................................................................
2.12. Use of Proceeds.........................................................................................
2.13 Swing Line..............................................................................................
ARTICLE III Letters of Credit
3.1. Letters of Credit.......................................................................................
3.2. Reimbursement...........................................................................................
3.3. Letter of Credit Facility Fees..........................................................................
3.4. Administrative Fees.....................................................................................
ARTICLE IV Yield Protection and Illegality
4.1. Increased Cost and Reduced Return.......................................................................
4.2. Limitation on Types of Loans............................................................................
4.3. Illegality..............................................................................................
4.4. Treatment of Affected Loans.............................................................................
4.5. Compensation............................................................................................
4.6. Taxes...................................................................................................
4.7. Replacement Lender......................................................................................
ARTICLE V Conditions to Making Loans
5.1. Conditions of Initial Advance...........................................................................
5.2. Conditions of Loans and Letters of Credit...............................................................
ARTICLE VI Representations and Warranties
6.1. Organization and Authority..............................................................................
6.2. Loan Documents..........................................................................................
6.3. Solvency................................................................................................
6.4. Subsidiaries and Stockholders...........................................................................
6.5. Ownership Interests.....................................................................................
6.6. Financial Condition.....................................................................................
6.7. Title to Properties.....................................................................................
6.8. Taxes...................................................................................................
6.9. Other Agreements........................................................................................
6.10. Litigation..............................................................................................
6.11. Margin Stock............................................................................................
6.12. Investment Company......................................................................................
6.13. Patents, Etc............................................................................................
6.14. No Untrue Statement.....................................................................................
6.15. No Consents, Etc........................................................................................
6.16. Employee Benefit Plans..................................................................................
6.17. No Default..............................................................................................
6.18. Hazardous Materials.....................................................................................
6.19. Employment Matters......................................................................................
6.20. RICO....................................................................................................
ARTICLE VII Affirmative Covenants
7.1. Financial Reports, Etc..................................................................................
7.2. Maintain Properties.....................................................................................
7.3. Existence, Qualification, Etc...........................................................................
7.4. Regulations and Taxes...................................................................................
7.5. Insurance...............................................................................................
7.6. True Books..............................................................................................
7.7. Right of Inspection.....................................................................................
7.8. Observe all Laws........................................................................................
7.9. Governmental Licenses...................................................................................
7.10. Covenants Extending to Other Persons....................................................................
7.11. Officer's Knowledge of Default..........................................................................
7.12. Suits or Other Proceedings..............................................................................
7.13. Notice of Discharge of Hazardous Material or Environmental Complaint....................................
7.14. Environmental Compliance................................................................................
7.15. Indemnification.........................................................................................
7.16. Further Assurances......................................................................................
7.17. Employee Benefit Plans..................................................................................
7.18. Continued Operations....................................................................................
7.19. New Subsidiaries........................................................................................
7.20. Rheem Relationship......................................................................................
ARTICLE VIII Negative Covenants
8.1. Financial Covenants........................................................................................
8.2. Acquisitions...............................................................................................
8.3. Capital Expenditures.......................................................................................
8.4. Liens......................................................................................................
8.5. Indebtedness...............................................................................................
8.6. Transfer of Assets.........................................................................................
8.7. Investments................................................................................................
8.8. Merger or Consolidation....................................................................................
8.9. Restricted Payments........................................................................................
8.10. Transactions with Affiliates...............................................................................
8.11. Compliance with ERISA......................................................................................
8.12. Fiscal Year................................................................................................
8.13. Dissolution, etc...........................................................................................
8.14. Limitations on Sales and Leasebacks........................................................................
8.15. Change in Control..........................................................................................
8.16. Rate Hedging Obligations...................................................................................
8.17. Negative Pledge Clauses....................................................................................
8.18. Prepayments, Etc. of Indebtedness..........................................................................
ARTICLE IX Events of Default and Acceleration
9.1. Events of Default..........................................................................................
9.2. Agent to Act...............................................................................................
9.3. Cumulative Rights..........................................................................................
9.4. No Waiver..................................................................................................
9.5. Allocation of Proceeds.....................................................................................
ARTICLE X The Agent
10.1. Appointment, Powers, and Immunities.....................................................................
10.2. Reliance by Agent.......................................................................................
10.3. Defaults................................................................................................
10.4. Rights as Lender........................................................................................
10.5. Indemnification.........................................................................................
10.6. Non-Reliance on Agent and Other Lenders.................................................................
10.7. Resignation of Agent....................................................................................
10.8. Fees....................................................................................................
ARTICLE XI Miscellaneous
11.1. Assignments and Participations..........................................................................
11.2. Notices.................................................................................................
11.3. Right of Set-off; Adjustments...........................................................................
11.4. Survival................................................................................................
11.5. Expenses................................................................................................
11.6. Amendments and Waivers..................................................................................
11.7. Counterparts............................................................................................
11.8. Termination.............................................................................................
11.9. Indemnification; Limitation of Liability................................................................
11.10. Severability............................................................................................
11.11. Entire Agreement........................................................................................
11.12. Agreement Controls......................................................................................
11.13. Usury Savings Clause....................................................................................
11.14. Confidentiality.........................................................................................
11.15. GOVERNING LAW; WAIVER OF JURY TRIAL.....................................................................
EXHIBIT A Applicable Commitment Percentages........................................................A-1
EXHIBIT B Form of Assignment and Acceptance........................................................B-1
EXHIBIT C Notice of Appointment (or Revocation) of Authorized Representative.......................C-1
EXHIBIT D Form of Borrowing Notice.................................................................D-1
EXHIBIT E Form of Interest Rate Selection Notice...................................................E-1
EXHIBIT F-1 Form of Note.............................................................................F-1
EXHIBIT G Form of Opinion of Credit Parties' Counsel...............................................G-1
EXHIBIT H Compliance Certificate...................................................................H-1
EXHIBIT I Form of Facility Guaranty................................................................I-1
Schedule 1.1 Existing Letters of Credit...............................................................S-1
Schedule 6.4 Subsidiaries and Investments in Other Persons............................................S-2
Schedule 6.6 Indebtedness.............................................................................S-3
Schedule 6.7 Liens....................................................................................S-4
Schedule 6.8 Tax Matters..............................................................................S-5
Schedule 6.10 Litigation...............................................................................S-6
Schedule 6.19 Employment Matters.......................................................................S-7
Schedule 7.5 Insurance................................................................................S-8
AMENDED AND RESTATED
REVOLVING CREDIT AND REIMBURSEMENT AGREEMENT
THIS AMENDED AND RESTATED REVOLVING CREDIT AND REIMBURSEMENT AGREEMENT,
dated as of August 8, 1997 (the "Agreement"), is made by and among WATSCO, INC.,
a Florida corporation having its principal place of business in Coconut Grove,
Florida (the "Borrower"), NATIONSBANK, NATIONAL ASSOCIATION, a national banking
association organized and existing under the laws of the United States, in its
capacity as a Lender ("NationsBank"), and each other financial institution
executing and delivering a signature page hereto and each other financial
institution which may hereafter execute and deliver an instrument of assignment
with respect to this Agreement pursuant to SECTION 11.1 (hereinafter such
financial institutions may be referred to individually as a "Lender" or
collectively as the "Lenders"), and NATIONSBANK, NATIONAL ASSOCIATION, a
national banking association organized and existing under the laws of the United
States, in its capacity as agent for the Lenders (in such capacity, and together
with any successor agent appointed in accordance with the terms of SECTION 10.7,
the "Agent");
W I T N E S S E T H:
WHEREAS, the Borrower, NationsBank, National Association, as agent and
certain lenders (the "Existing Lenders") have entered into a Revolving Credit
and Reimbursement Agreement dated September 25, 1996 (the "Existing Agreement")
pursuant to which the Existing Lenders have made available to the Borrower a
revolving credit facility of up to $130,000,000 and issued letters of credit for
the benefit of the Borrower; and
WHEREAS, the Borrower has requested that the amount of the revolving
credit facility be increased and that the Existing Agreement be amended and
restated in its entirety; and
WHEREAS, the Lenders are willing to amend and restate the Existing
Agreement and to make available to the Borrower a revolving credit facility of
up to $260,000,000, including a sublimit for issuance of standby letters of
credit in an amount of up to $5,000,000 and a swing line facility in an amount
of up to $15,000,000, the proceeds of which are to be used (i) for seasonal
working capital needs and (ii) for general corporate purposes, including the
making of acquisitions permitted hereunder; and
WHEREAS, the Lenders are willing to make such revolving credit facility
available to the Borrower upon the terms and conditions set forth herein;
NOW, THEREFORE, the Borrower, the Lenders and the Agent hereby agree as
follows:
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ARTICLE I
DEFINITIONS AND TERMS
I.1. AMENDMENT AND RESTATEMENT. The Borrower, the Agent and the Lenders
hereby agree that upon the effectiveness of this Agreement, the terms and
provisions of the Existing Agreement shall be and hereby are amended and
restated in their entirety by the terms and conditions of this Agreement and the
terms and provisions of the Existing Agreement, except as otherwise provided
herein, shall be superseded by this Agreement.
Notwithstanding the amendment and restatement of the Existing Agreement
by this Agreement, the Borrower shall continue to be liable to the Agent and the
Existing Lenders with respect to (and to the extent of) agreements on the part
of the Borrower under the Existing Agreement to indemnify and hold harmless the
Agent and the Existing Lenders from and against all claims, demands,
liabilities, damages, losses, costs, charges and expenses to which the Agent and
the Existing Lenders may be subject arising in connection with the Existing
Agreement. This Agreement is given as a substitution of, and not as a payment
of, the obligations of Borrower under the Existing Agreement and is not intended
to constitute a novation of the Existing Agreement. Except as otherwise selected
by the Borrower by delivery of a Borrowing Notice or Interest Rate Selection
Notice prior to the Closing Date in accordance with the terms hereof, upon the
effectiveness of this Agreement all amounts outstanding and owing by Borrower
under the Existing Agreement as of the Closing Date, as determined by the
Lenders, shall constitute Advances hereunder accruing interest with respect to
the Base Rate Loans under the Existing Agreement, at the Base Rate hereunder.
The parties hereto agree that the Interest Periods for all Eurodollar Loans
outstanding under the Existing Agreement on the Closing Date shall be
terminated, the Borrower shall make any payments required under SECTION 4.5
hereof to the Lenders. The Borrower shall furnish to the Agent Interest Rate
Selection Notices for existing Loans and Borrowing Notices for additional Loans
as may be required in connection with the allocation of Loans among Lenders in
accordance with their Applicable Commitment Percentages. Except as otherwise
provided for by the Borrower by delivery to NationsBank of an Application and
Agreement for Letters of Credit prior to the Closing Date in accordance with the
terms hereof, upon the effectiveness of this Agreement, all Letters of Credit
issued for the account of the Borrower under the Existing Agreement as of the
Closing Date shall constitute Letters of Credit hereunder.
I.2. DEFINITIONS. For the purposes of this Agreement, in addition to
the definitions set forth above, the following terms shall have the respective
meanings set forth below:
"Acquisition" means the acquisition of (i) a controlling
equity interest in another Person (including the purchase of an option,
warrant or convertible or similar type security to acquire such a
controlling interest at the time it becomes exercisable by the holder
thereof), whether by purchase of such equity interest or upon exercise
of an option or warrant for, or conversion of securities into, such
equity interest, or (ii) assets of another Person
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which constitute all or substantially all of the assets of such Person
or of a line or lines of business conducted by such Person.
"Advance" means a borrowing under (i) the Revolving Credit
Facility consisting of a Base Rate Loan or a Eurodollar Rate Loan or
(ii) the Swing Line consisting of Base Rate Loans.
"Affiliate" means any Person (i) which directly or indirectly
through one or more intermediaries controls, or is controlled by, or is
under common control with the Borrower; or (ii) which beneficially owns
or holds 10% or more of the aggregate voting rights for all of
Borrower's classes of outstanding Voting Stock (or in the case of a
Person which is not a corporation, 10% or more of the aggregate voting
rights of such Person) of the Borrower; or 10% or more of any class of
the outstanding voting stock (or in the case of a Person which is not a
corporation, 10% or more of the aggregate voting rights of such Person)
of which is beneficially owned or held by the Borrower. The term
"control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a
Person, whether through ownership of voting stock, by contract or
otherwise.
"Applicable Commitment Percentage" means, with respect to each
Lender at any time, a fraction, the numerator of which shall be such
Lender's Revolving Credit Commitment and the denominator of which shall
be the Total Revolving Credit Commitment, which Applicable Commitment
Percentage for each Lender as of the Closing Date is as set forth in
EXHIBIT A; PROVIDED that the Applicable Commitment Percentage of each
Lender shall be increased or decreased to reflect any assignments to or
by such Lender effected in accordance with SECTION 11.1.
"Applicable Lending Office" means, for each Lender and for
each Type of Loan, the "Lending Office" of such Lender or of an
affiliate of such Lender) designated for such Type of Loan on the
signature pages hereof or such other office of such Lender (or an
affiliate of such Lender) as such Lender may from time to time specify
to the Agent and the Borrower by written notice in accordance with the
terms hereof as the office by which its Loans of such Type are to be
made and maintained.
"Applicable Margin" means that percent per annum set forth
below, which shall be based upon the Consolidated Debt Coverage Ratio
for the Four-Quarter Period most recently ended as specified below:
3
APPLICABLE
MARGIN
------
CONSOLIDATED DEBT BASE EURODOLLAR
COVERAGE RATIO RATE RATE
----------------- ---- ----------
(a) Greater than or equal
to 3.50 to 1.0 .0% .90%
(b) Greater than or equal to
3.0 to 1.0 and less than
3.50 to 1.0 .0% .70%
(c) Greater than or equal to
2.50 to 1.0 and less than
3.0 to 1.0 0% .60%
(d) Greater than or equal to
2.0 to 1.0 and less than
2.50 to 1.0 0% .50%
(e) Less than 2.0 to 1.0 0% .375%
The Applicable Margin shall be established at the end of each fiscal
quarter of the Borrower (each, a "Determination Date"). Any change in
the Applicable Margin following each Determination Date shall be
determined based upon the computations set forth in the certificate
furnished to the Agent pursuant to SECTION 7.1(A)(II) and SECTION
7.1(B)(II), subject to review and approval of such computations by the
Agent, and shall be effective commencing on the Business Day following
the date such certificate is received (or, if earlier, the date such
certificate was required to be delivered) until the date following the
date on which a new certificate is delivered or is required to be
delivered, whichever shall first occur; PROVIDED however, if the
Borrower shall fail to deliver any such certificate within the time
period required by SECTION 7.1, then the Applicable Margin shall be .0%
for Base Rate Loans and .90% for Eurodollar Rate Loans until the
appropriate certificate is so delivered. From the Closing Date to the
first Determination Date, the Applicable Margin shall be 0% for Base
Rate Loans and .375 for Eurodollar Rate Loans. Notwithstanding the
foregoing if at any time the Borrower's long term senior unsecured,
unenhanced debt shall be rated "BB" or better by either S&P or "Ba2" or
better by Xxxxx'x (collectively, the "Threshold Ratings"), then the
Borrower may elect (which election may be reserved at any time at the
option of the Borrower), by notice to the Agent and the Lenders,
effective upon receipt (but subject to confirmation) by the Agent, to
have the Applicable Margin determined as set forth below based on such
ratings for the period from the date of receipt of such notice by the
Agent through the date on which either of the Threshold Ratings are no
longer in effect with respect to such debt of the Borrower:
4
APPLICABLE
MARGIN S&P XXXXX'X
------ --- -------
BASE RATE EURODOLLAR RATE
--------- ---------------
0% .75% BB Ba2
0% .65% BB+ Ba1
0% .45% BBB- Baa3
0% .35% BBB Baa2
0% .30% BBB+ or higher Baa1 or higher
If, during any period when the Applicable Margin is determined by
reference to ratings by either S&P or Xxxxx'x of debt of the Borrower
as provided above, the respective ratings of each of either S&P or
Xxxxx'x set forth above shall provide different levels of Applicable
Margin, then, provided that both ratings shall constitute Threshold
Ratings, the higher rating shall apply for purposes of determining the
Applicable Margin.
"Applicable Unused Fee" means that percent per annum set forth
below, which shall be based upon the Consolidated Debt Coverage Ratio
for the Four-Quarter Period most recently ended as specified below:
APPLICABLE
CONSOLIDATED DEBT UNUSED
COVERAGE RATIO FEE
----------------- ----------
(a) Greater than or equal
to 3.50 to 1.0 .25%
(b) Greater than or equal to
3.0 to 1.0 and less than
3.50 to 1.0 .225%
(c) Greater than or equal to
2.50 to 1.0 and less than
3.0 to 1.0 .20%
(d) Greater than or equal to
2.0 to 1.0 and less than
2.50 to 1.0 .15%
(e) Less than 2.0 to 1.0 .125%
The Applicable Unused Fee shall be established at the end of each
fiscal quarter of the Borrower (the "Determination Date"). Any change
in the Applicable Unused Fee following each Determination Date shall be
determined based upon the computations set forth in the
5
certificate furnished to the Agent pursuant to SECTION 7.1(A)(II) and
SECTION 7.1(B)(II), subject to review and approval of such computations
by the Agent and shall be effective commencing on the Business Day
following the date such certificate is received (or, if earlier, the
date such certificate was required to be delivered) until the date
following the date on which a new certificate is delivered or is
required to be delivered, whichever shall first occur; PROVIDED
however, if the Borrower shall fail to deliver any such certificate
within the time period required by SECTION 7.1, then the Applicable
Unused Fee shall be .25% until the appropriate certificate is so
delivered. From the Closing Date to the first Determination Date, the
Applicable Unused Fee shall be .125%. Notwithstanding the foregoing, if
at any time the Borrower's long term senior unsecured, unenhanced debt
shall be rated "BB" or better by either S&P or "Ba2" or better by
Xxxxx'x (collectively, the "Threshold Ratings"), then the Borrower may
elect (which election may be reversed at any time at the option of the
Borrower), by notice to the Agent and the Lenders, effective upon
receipt (but subject to confirmation) by the Agent, to have the
Applicable Unused Fee determined as set forth below based on such
ratings for the period from the date of receipt of such notice by the
Agent through the date on which either of the Threshold Ratings are not
longer in effect with respect to such debt of the Borrower:
APPLICABLE
UNUSED FEE S&P XXXXX'X
---------- --- -------
.25% BB Ba2
.225% BB+ Ba1
.15% BBB- Baa3
.125% BBB Baa2
.10% BBB+ or higher Baa1 or higher
If, during any period when the Applicable Unused Fee is determined by
reference to ratings by either S&P or Xxxxx'x of debt of the Borrower
as provided above, the respective ratings of each of either S&P or
Xxxxx'x set forth above shall provide different levels of Applicable
Unused Fee, then, provided that both ratings shall constitute Threshold
Ratings, the higher rating (i.e., the lower fee) shall apply for
purposes of determining the Applicable Unused Fee.
"Applications and Agreements for Letters of Credit" means,
collectively, the Applications and Agreements for Letters of Credit, or
similar documentation, executed by the Borrower from time to time and
delivered to the Issuing Bank to support the issuance of Letters of
Credit.
"Assignment and Acceptance" shall mean an Assignment and
Acceptance in the form of EXHIBIT B (with blanks appropriately filled
in) delivered to the Agent in connection with an assignment of a
Lender's interest under this Agreement pursuant to SECTION 11.1.
"Authorized Representative" means any of the President, Chief
Executive Officer, any Vice President or Treasurer of the Borrower or,
with respect to financial matters, the
6
chief financial officer of the Borrower, or any other Person expressly
designated by the Board of Directors of the Borrower (or the
appropriate committee thereof) as an Authorized Representative of the
Borrower, as set forth from time to time in a certificate in the form
of EXHIBIT C.
"Base Rate" means the per annum rate of interest equal to the
sum of the greater of (i) the Prime Rate or (ii) the Federal Funds
Effective Rate PLUS one-half of one percent (1/2%). Any change in the
Base Rate resulting from a change in the Federal Funds Effective Rate
shall become effective as of 12:01 A.M. of the Business Day on which
each such change occurs. The Base Rate is a reference rate used by
Agent in determining interest rates on certain loans and is not
intended to be the lowest rate of interest charged on any extension of
credit to any debtor.
"Base Rate Loan" means a Loan for which the rate of interest
is determined by reference to the Base Rate.
"Base Rate Refunding Loan" means a Base Rate Loan or Swing
Line Loan made either to (i) satisfy Reimbursement Obligations arising
from a drawing under a Letter of Credit or (ii) pay NationsBank in
respect of Swing Line Outstandings.
"Board" means the Board of Governors of the Federal Reserve
System (or any successor body).
"Borrower's Account" means a demand deposit account number
XXXXXXXXXX or any successor account with the Agent, which may be
maintained at one or more offices of the Agent or an agent of the
Agent.
"Borrowing Notice" means the notice delivered by an Authorized
Representative in connection with an Advance under the Revolving Credit
Facility or Swing Line in the form of EXHIBIT D.
"Business Day" means, (i) with respect to any Base Rate Loan,
any day which is not a Saturday, Sunday or a day on which banks in the
States of New York, Florida and North Carolina are authorized or
obligated by law, executive order or governmental decree to be closed
and, (ii) with respect to any Eurodollar Rate Loan, any day which is a
Business Day, as described above, and on which the relevant
international financial markets are open for the transaction of
business contemplated by this Agreement in London, England, New York,
New York and Charlotte, North Carolina.
"Capital Expenditures" means, with respect to the Borrower and
its Subsidiaries, for any period the SUM of (without duplication) (i)
all expenditures (whether paid in cash or accrued as liabilities) by
the Borrower or any Subsidiary during such period for items that would
be classified as "property, plant or equipment" or comparable items on
the consolidated balance sheet of the Borrower and its Subsidiaries,
including without limitation
7
all transactional costs incurred in connection with such expenditures
provided the same have been capitalized, excluding, however, the amount
of any Capital Expenditures paid for with proceeds of casualty
insurance as evidenced in writing and submitted to the Agent together
with any compliance certificate delivered pursuant to SECTION 7.1(A) or
(B), and (ii) with respect to any Capital Lease entered into by the
Borrower or its Subsidiaries during such period, the present value of
the lease payments due under such Capital Lease over the term of such
Capital Lease applying a discount rate equal to the interest rate
provided in such lease (or in the absence of a stated interest rate,
that rate used in the preparation of the financial statements described
in SECTION 7.1(A)), all the foregoing in accordance with GAAP applied
on a Consistent Basis.
"Capital Leases" means all leases which have been or should be
capitalized in accordance with GAAP as in effect from time to time
including Statement No. 13 of the Financial Accounting Standards Board
and any successor thereof.
"Change of Control" means, at any time:
(A) With respect to the Borrower,
(i) any "person" or "group" (each as used in Sections
13(d)(3) and 14(d)(2) of the Exchange Act) other than Xxxxxx
Xxxxxx and Alna Capital Associates (each an "Existing Control
Group") either (A) becomes the "beneficial owner" (as defined
in Rule 13d-3 of the Exchange Act), directly or indirectly, of
Voting Stock of the Borrower (or securities convertible into
or exchangeable for such Voting Stock) representing 25% or
more of the combined voting power of all Voting Stock of the
Borrower (on a fully diluted basis) or (B) otherwise has the
ability, directly or indirectly, to elect a majority of the
board of directors of the Borrower (PROVIDED that if an event
described in this clause (i) shall occur solely by reason of
the death of one or more members of the Existing Control
Group, then a "Change of Control" shall not be deemed to have
occurred so long as the Voting Stock of the decedent is owned
of record by the estate or immediately family of such
decedent);
(ii) during any period of up to 24 consecutive
months, commencing on the Closing Date, individuals who at the
beginning of such 24-month period were directors of the
Borrower shall cease for any reason (other than the death,
disability or retirement of a director or of an officer of the
Borrower that is serving as a director at such time so long as
another officer of the Borrower replaces such Person as a
director) to constitute a majority of the board of directors
of the Borrower; or
(iii) any Person or two or more Persons acting in
concert other than the Existing Control Group shall have
acquired by contract or otherwise, or shall have consummated a
contract or arrangement that results in its or their
acquisition of the power to exercise, directly or indirectly,
a controlling influence on the management or policies of the
Borrower; or
8
(B) with respect to any Major Subsidiary,
(i) the Borrower shall cease to own, directly or
indirectly, at least 100% of the Voting Stock of each
currently existing Major Subsidiary; or
(ii) any Person or two or more Persons acting in
concert other than the Borrower shall have acquired by
contract or otherwise, or shall have consummated a contract or
arrangement that results in its or their acquisition of the
power to exercise, directly or indirectly, a controlling
influence on the management or policies of such Subsidiary.
"Closing Date" means the date as of which this Agreement is
executed by the Borrower, the Lenders and the Agent and on which the
conditions set forth in SECTION 5.1 have been satisfied.
"Code" means the Internal Revenue Code of 1986, as amended,
and any regulations promulgated thereunder.
"Comfort Supply" means Comfort Supply, Inc., a Delaware
corporation and a Subsidiary of the Borrower, and its successors.
"Consistent Basis" in reference to the application of GAAP
means the accounting principles observed in the period referred to are
comparable in all material respects to those applied in the preparation
of the audited financial statements of the Borrower referred to in
SECTION 6.6(A).
"Consolidated Debt Coverage Ratio" means, as of the date of
computation thereof, the ratio of (i) the sum of (without duplication)
Consolidated Indebtedness (determined as at such date) to (ii)
Consolidated EBITDA (for the Four-Quarter Period ending on (or most
recently ended prior to) such date).
"Consolidated EBIT" means, with respect to the Borrower and
its Subsidiaries for any Four-Quarter Period ending on the date of
computation thereof, the SUM of, without duplication, (i) Consolidated
Net Income, (ii) Consolidated Interest Expense, and (iii) taxes on
income, all determined on a consolidated basis in accordance with GAAP
applied on a Consistent Basis; PROVIDED, however, that with respect to
an Acquisition that is accounted for as a "purchase", for the four
Four-Quarter Periods ending next following the date of such
Acquisition, Consolidated EBIT shall include the results of operations
of the Person or assets so acquired for the appropriate periods, which
amounts shall be determined on a historical pro forma basis as if such
Acquisition had been consummated as a "pooling of interests".
"Consolidated EBITDA" means, with respect to the Borrower and
its Subsidiaries for any Four-Quarter Period ending on the date of
computation thereof, the SUM of, without
9
duplication, (i) Consolidated Net Income, (ii) Consolidated Interest
Expense, (iii) taxes on income, (iv) amortization, and (v)
depreciation, all determined on a consolidated basis in accordance with
GAAP applied on a Consistent Basis; PROVIDED, however, that with
respect to an Acquisition that is accounted for as a "purchase", for
the four Four-Quarter Periods ending next following the date of such
Acquisition, Consolidated EBITDA shall include the results of
operations of the Person or assets so acquired, which amounts shall be
determined on a historical pro forma basis as if such Acquisition had
been consummated as a "pooling of interests".
"Consolidated Indebtedness" means all Indebtedness for Money
Borrowed of the Borrower and its Subsidiaries, all determined on a
consolidated basis.
"Consolidated Interest Coverage Ratio" means, with respect to
the Borrower and its Subsidiaries for any Four-Quarter Period ending on
the date of computation thereof, the ratio of (i) Consolidated EBIT for
such period, to (ii) Consolidated Interest Expense for such period;
PROVIDED, however, that Consolidated Interest Expense shall be
determined in the same manner provided in the definition of
"Consolidated EBIT" for any Acquisition that is accounted for as a
"purchase".
"Consolidated Interest Expense" means, with respect to any
period of computation thereof, the gross interest expense of the
Borrower and its Subsidiaries, including without limitation (i) the
current amortized portion of debt discounts to the extent included in
gross interest expense, (ii) the current amortized portion of all fees
(including fees payable in respect of any Swap Agreement) payable in
connection with the incurrence of Indebtedness to the extent included
in gross interest expense and (iii) the portion of any payments made in
connection with Capital Leases which is accounted for in accordance
with GAAP as interest expense, all determined on a consolidated basis
in accordance with GAAP applied on a Consistent Basis.
"Consolidated Net Income" means, for any period of computation
thereof, the gross revenues from operations of the Borrower and its
Subsidiaries (including payments received by the Borrower and its
Subsidiaries of (i) interest income, and (ii) dividends and
distributions made in the ordinary course of their businesses by
Persons in which investment is permitted pursuant to this Agreement and
not related to an extraordinary event), less all operating and
non-operating expenses of the Borrower and its Subsidiaries including
taxes on income, all determined on a consolidated basis in accordance
with GAAP applied on a Consistent Basis; but excluding (for all
purposes other than compliance with SECTION 7.1(A) hereof) as income:
(i) net gains on the sale, conversion or other disposition of capital
assets, (ii) net gains on the acquisition, retirement, sale or other
disposition of capital stock and other securities of the Borrower or
its Subsidiaries, (iii) net gains on the collection of proceeds of life
insurance policies, (iv) any write-up of any asset, and (v) any other
net gain or credit of an extraordinary nature as determined in
accordance with GAAP applied on a Consistent Basis.
10
"Consolidated Net Worth" means, as of any date on which the
amount thereof is to be determined, Consolidated Shareholders' Equity
minus (without duplication of deductions in respect of items already
deducted in arriving at surplus and retained earnings) all reserves
(other than contingency reserves not allocated to any particular
purpose), including without limitation reserves for depreciation,
depletion, amortization, obsolescence, deferred income taxes, insurance
and inventory valuation, all as determined on a consolidated basis in
accordance with GAAP applied on a Consistent Basis.
"Consolidated Shareholders' Equity" means, as of any date on
which the amount thereof is to be determined, the sum of the following
in respect of the Borrower and its Subsidiaries (determined on a
consolidated basis and excluding any upward adjustment after the
Closing Date due to revaluation of assets): (i) the amount of issued
and outstanding share capital, plus (ii) the amount of additional
paid-in capital and retained earnings (or, in the case of a deficit,
minus the amount of such deficit), plus (iii) the amount of any foreign
currency translation adjustment (if positive, or, if negative, minus
the amount of such translation adjustment), minus (iv) the amount of
any treasury stock, all as determined in accordance with GAAP applied
on a Consistent Basis.
"Consolidated Total Capitalization" means, as of any date on
which the amount thereof is to be determined, the sum of Consolidated
Indebtedness plus Consolidated Shareholders' Equity.
"Contingent Obligation" of any Person means all contingent
liabilities required (or which, upon the creation or incurring thereof,
would be required) to be included in the financial statements
(including footnotes) of such Person in accordance with GAAP applied on
a Consistent Basis, including Statement No. 5 of the Financial
Accounting Standards Board, all Rate Hedging Obligations and any
obligation of such Person guaranteeing or in effect guaranteeing any
Indebtedness, dividend or other obligation of any other Person (the
"primary obligor") in any manner, whether directly or indirectly,
including obligations of such Person however incurred:
(1) to purchase such Indebtedness or other obligation
or any property or assetsconstituting security therefor;
(2) to advance or supply funds in any manner (i) for
the purchase or payment of such Indebtedness or other
obligation, or (ii) to maintain a minimum working capital, net
worth or other balance sheet condition or any income statement
condition of the primary obligor;
(3) to grant or convey any lien, security interest,
pledge, charge or other encumbrance on any property or assets
of such Person to secure payment of such Indebtedness or other
obligation;
11
(4) to lease property or to purchase securities or
other property or services primarily for the purpose of
assuring the owner or holder of such Indebtedness or
obligation of the ability of the primary obligor to make
payment of such Indebtedness or other obligation; or
(5) otherwise to assure the owner of the Indebtedness
or such obligation of the primary obligor against loss in
respect thereof.
"Continue", "Continuation", and "Continued" shall refer to the
continuation pursuant to SECTION 2.8 hereof of a Eurodollar Rate Loan
of one Type as a Eurodollar Rate Loan of the same Type from one
Interest Period to the next Interest Period.
"Convert", "Conversion", and "Converted" shall refer to a
conversion pursuant to SECTION 2.8 or ARTICLE IV of one Type of Loan
into another Type of Loan.
"Cost of Acquisition" means, with respect to any Acquisition,
as at the date of entering into any agreement therefor, the SUM of the
following (without duplication): (i) the value of the capital stock,
warrants or options to acquire capital stock of Borrower or any
Subsidiary to be transferred in connection therewith, (ii) the amount
of any cash and fair market value of other property (excluding property
described in clause (i) and the unpaid principal amount of any debt
instrument) given as consideration, (iii) the amount (determined by
using the face amount or the amount payable at maturity, whichever is
greater) of any Indebtedness incurred, assumed or acquired by the
Borrower or any Subsidiary in connection with such Acquisition, (iv)
all additional purchase price amounts in the form of earnouts and other
contingent obligations that should be recorded on the financial
statements of the Borrower and its Subsidiaries in accordance with
GAAP, (v) all amounts paid in respect of covenants not to compete,
consulting agreements that should be recorded on financial statements
of the Borrower and its Subsidiaries in accordance with GAAP, and other
affiliated contracts in connection with such Acquisition, (vi) the
aggregate fair market value of all other consideration given by the
Borrower or any Subsidiary in connection with such Acquisition, and
(vii) out of pocket transaction costs for the services and expenses of
attorneys, accountants and other consultants incurred in effecting such
transaction, and other similar transaction costs so incurred. For
purposes of determining the Cost of Acquisition for any transaction,
(A) the capital stock of the Borrower shall be valued (I) in the case
of capital stock that is then designated as a national market system
security by the National Association of Securities Dealers, Inc.
("NASDAQ") or is listed on a national securities exchange, the average
of the last reported closing quotations for the ten previous Business
Days prior to issuance (so long as the public announcement of
Borrower's intent to consummate such Acquisition precedes such ten day
period), and (II) with respect to shares that are not freely tradeable,
as determined by the Board of Directors of the Borrower and, if
requested by the Agent, determined to be a reasonable valuation by the
independent public accountants referred to in SECTION 6.6(A), (B) the
capital stock of any Subsidiary shall be valued as determined by the
Board of Directors of such Subsidiary and, if requested by the Agent,
determined to be a reasonable valuation by the Borrower's investment
advisors, and
12
(C) with respect to any Acquisition accomplished pursuant to the
exercise of options or warrants or the conversion of securities, the
Cost of Acquisition shall include both the cost of acquiring such
option, warrant or convertible security as well as the cost of exercise
or conversion.
"Credit Party" means, collectively, the Borrower and each
Guarantor.
"Default" means any event or condition which, with the giving
or receipt of notice or lapse of time or both, would constitute an
Event of Default as described in ARTICLE IX hereof.
"Default Rate" means (i) with respect to each Eurodollar Rate
Loan, until the end of the Interest Period applicable thereto, a rate
of two percent (2%) above the Eurodollar Rate applicable to such Loan,
and thereafter at a rate of interest per annum which shall be two
percent (2%) above the Base Rate, (ii) with respect to Base Rate Loans,
at a rate of interest per annum which shall be two percent (2%) above
the Base Rate and (iii) in any case, the maximum rate permitted by
applicable law, if lower.
"Distribution Agreements" means, collectively, the following
agreements between Rheem and the Borrower or a Subsidiary of the
Borrower pertaining to the distribution of Rheem products, true and
complete copies of which have been furnished to the Agent on or prior
to the Closing Date: Gemaire Distributors, Inc. and Rheem dated
December 30, 1988 as amended February 6, 1996, December 30, 1988 and
January 4, 1991, Heating & Cooling Supply, Inc. and Rheem dated October
15, 1990 as amended February 6, 1996 and August 23, 1994, Comfort
Supply, Inc. and Rheem dated May 25, 1993 as amended February 6, 1996,
and Central Air Conditioning Distributors, Inc. and Rheem dated January
2, 1991, as the same may be amended, supplemented or modified from time
to time.
"Dollars" and the symbol "$" means dollars constituting legal
tender for the payment of public and private debts in the United States
of America.
"Dunhill" means Dunhill Personnel System, Inc., a Delaware
corporation and a Subsidiary of the Borrower as of the Closing Date.
"Eligible Assignee" means (i) a Lender, (ii) an affiliate of a
Lender, and (iii) any other Person approved by the Agent and, unless an
Event of Default has occurred and is continuing at the time any
assignment is effected in accordance with SECTION 11.1, the Borrower,
such approval not to be unreasonably withheld or delayed by the
Borrower and such approval to be deemed given by the Borrower if no
objection is received by the assigning Lender and the Agent from the
Borrower within two Business Days after notice of such proposed
assignment has been provided by the assigning Lender to the Borrower;
PROVIDED, HOWEVER, that neither the Borrower nor an affiliate of the
Borrower shall qualify as an Eligible Assignee.
13
"Eligible Securities" means the following obligations and any
other obligations previously approved in writing by the Agent:
(a) Government Securities;
(b) obligations of any corporation organized under
the laws of any state of the United States of America or under
the laws of any other nation, payable in the United States of
America, expressed to mature not later than 92 days following
the date of issuance thereof and rated in an investment grade
rating category by either S&P or Xxxxx'x;
(c) interest bearing demand or time deposits issued
by any Lender or certificates of deposit maturing within one
year from the date of issuance thereof and issued by a bank or
trust company organized under the laws of the United States or
of any state thereof having capital surplus and undivided
profits aggregating at least $200,000,000 and being rated
"A-3" or better by S&P or "A" or better by Xxxxx'x;
(d) Repurchase Agreements;
(e) Municipal Obligations;
(f) Pre-Refunded Municipal Obligations;
(g) shares of mutual funds which invest in
obligations described in paragraphs (a) through (f) above, the
shares of which mutual funds are at all times rated "AAA" by
S&P;
(h) tax-exempt or taxable adjustable rate preferred
stock issued by a Person having a rating of its long term
unsecured debt of "A" or better by S&P or "A-3" or better by
Xxxxx'x;
(i) asset-backed remarketed certificates of
participation representing a fractional undivided interest in
the assets of a trust, which certificates are rated at least
"A-1" by S&P and "P-1" by Xxxxx'x; and
(j) subject to the limitation set forth in SECTION
6.11, equity or debt securities which are listed on a national
securities exchange or freely traded in the over-the-counter
market so long as the fair market value of such securities do
not exceed in the aggregate $5,000,000.
"Employee Benefit Plan" means any employee benefit plan within
the meaning of Section 3(3) of ERISA which (i) is maintained for
employees of the Borrower or any of its ERISA Affiliates or is assumed
by the Borrower or any of its ERISA Affiliates in connection with any
Acquisition or (ii) has at any time been maintained for the employees
of the Borrower or any current or former ERISA Affiliate.
14
"Environmental Laws" means any federal, state or local
statute, law, ordinance, code, rule, regulation, order, decree, permit
or license regulating, relating to, or imposing liability or standards
of conduct concerning, any environmental matters or conditions,
environmental protection or conservation, including without limitation,
the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended; the Superfund Amendments and Reauthorization
Act of 1986, as amended; the Resource Conservation and Recovery Act, as
amended; the Toxic Substances Control Act, as amended; the Clean Air
Act, as amended; the Clean Water Act, as amended; together with all
regulations promulgated thereunder, and any other "Superfund" or
"Superlien" law.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute and all
rules and regulations promulgated thereunder.
"ERISA Affiliate", as applied to the Borrower, means any
Person or trade or business which is a member of a group which is under
common control with the Borrower, who together with the Borrower, is
treated as a single employer within the meaning of Section 414(b) and
(c) of the Code.
"Eurodollar Rate Loan" means a Loan for which the rate of
interest is determined by reference to the Eurodollar Rate.
"Eurodollar Rate" means the interest rate per annum calculated
according to the following formula:
Eurodollar = INTERBANK OFFERED RATE + Applicable
------------------------------- Margin
Rate 1-Eurodollar Reserve Percentage
"Eurodollar Reserve Requirement" means, at any time, the
maximum rate at which reserves (including, without limitation, any
marginal, special, supplemental, or emergency reserves) are required to
be maintained under regulations issued from time to time by the Board
of Governors of the Federal Reserve System (or any successor) by member
banks of the Federal Reserve System against "Eurocurrency liabilities"
(as such term is used in Regulation D). Without limiting the effect of
the foregoing, the Reserve Requirement shall reflect any other reserves
required to be maintained by such member banks with respect to (i) any
category of liabilities which includes deposits by reference to which
the Eurodollar Rate is to be determined, or (ii) any category of
extensions of credit or other assets which include Eurodollar Rate
Loans. The Eurodollar Rate shall be adjusted automatically on and as of
the effective date of any change in the Reserve Requirement.
"Event of Default" means any of the occurrences set forth as
such in SECTION 9.1.
15
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the regulations promulgated thereunder.
"Existing Letters of Credit" means those Letters of Credit
issued pursuant to the Existing Agreement and described on SCHEDULE 1.1
attached hereto.
"Facility Guaranty" means each Guaranty and Suretyship
Agreement between one or more Guarantors and the Agent for the benefit
of the Lenders, delivered as of the Closing Date and otherwise pursuant
to SECTION 7.19, as the same may be amended, modified or supplemented.
"Facility Termination Date" means the date on which the
Revolving Credit Termination Date shall have occurred and the Borrower
shall have fully, finally and irrevocably paid and satisfied all
Obligations.
"Federal Funds Effective Rate" means, for any day, the rate
per annum (rounded upward to the nearest 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers on such day, as published by the Federal Reserve Bank of New
York on the Business Day next succeeding such day, PROVIDED that (a) if
such day is not a Business Day, the Federal Funds Effective Rate for
such day shall be such rate on such transactions on the next preceding
Business Day, and (b) if no such rate is so published on such next
succeeding Business Day, the Federal Funds Effective Rate for such day
shall be the average rate quoted to the Agent on such day on such
transaction as determined by the Agent.
"Fiscal Year" means the twelve month fiscal period of the
Borrower and its Subsidiaries commencing on January 1 of each calendar
year and ending on December 31 of each calendar year.
"Foreign Benefit Law" means any applicable statute, law,
ordinance, code, rule, regulation, order or decree of any foreign
nation or any province, state, territory, protectorate or other
political subdivision thereof regulating, relating to, or imposing
liability or standards of conduct concerning, any Employee Benefit
Plan.
"Four-Quarter Period" means a period of four full consecutive
fiscal quarters of the Borrower and its Subsidiaries, taken together as
one accounting period.
"GAAP" or "Generally Accepted Accounting Principles" means
generally accepted accounting principles, being those principles of
accounting set forth in pronouncements of the Financial Accounting
Standards Board, the American Institute of Certified Public Accountants
or which have other substantial authoritative support and are
applicable in the circumstances as of the date of a report.
16
"Gemaire" means Gemaire Distributors, Inc., a Florida
corporation and a Subsidiary of the Borrower, and its successors.
"Government Securities" means direct obligations of, or
obligations the timely payment of principal and interest on which are
fully and unconditionally guaranteed by, the United States of America.
"Governmental Authority" shall mean any Federal, state,
municipal, national or other governmental department, commission,
board, bureau, court, agency or instrumentality or political
subdivision thereof or any entity or officer exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to any government or any court, in each case whether
associated with a state of the United States, the United States, or a
foreign entity or government.
"Guaranties" means all obligations of the Borrower or any
Subsidiary directly or indirectly guaranteeing, or in effect
guaranteeing, any Indebtedness or other obligation of any other Person.
"Guarantors" means, at any date, the Subsidiaries who are
required to be parties to a Facility Guaranty at such date.
"Hazardous Material" means and includes any pollutant,
contaminant, or hazardous, toxic or dangerous waste, substance or
material (including without limitation petroleum products,
asbestos-containing materials and lead), the generation, handling,
storage, transportation, disposal, treatment, release, discharge or
emission of which is subject to any Environmental Law.
"Heating & Cooling" means Heating & Cooling Supply, Inc., a
California corporation and a Subsidiary of the Borrower, and its
successors.
"Indebtedness" means with respect to any Person, without
duplication, all Indebtedness for Money Borrowed, all indebtedness of
such Person for the acquisition of property or arising under Rate
Hedging Obligations, all Indebtedness secured by any Lien on the
property of such Person whether or not such indebtedness is assumed,
all liability of such Person by way of endorsements (other than for
collection or deposit in the ordinary course of business), all
Guaranties, and other items which in accordance with GAAP are required
to be classified as Indebtedness; but excluding all accounts payable
and accrued expenses in the ordinary course of business so long as
payment therefor is due within one year; provided that in no event
shall the term Indebtedness include surplus and retained earnings,
lease obligations (other than pursuant to Capital Leases which are
accounted for as Indebtedness in accordance with GAAP), reserves for
deferred income taxes and investment credits, amounts payable pursuant
to deferred compensation arrangements which are expensed in accordance
with GAAP, other deferred credits or reserves.
17
"Indebtedness for Money Borrowed" means with respect to any
Person, without duplication, all indebtedness in respect of money
borrowed, including without limitation all Capital Leases which are
accounted for as Indebtedness in accordance with GAAP and the deferred
purchase price of any property or asset, evidenced by a promissory
note, bond, debenture or similar written obligation for the payment of
money (including conditional sales or similar title retention
agreements), other than trade payables or accrued expenses incurred in
the ordinary course of business so long as payment therefor is due
within one year.
"Issuing Bank" means initially NationsBank and thereafter any
Lender which is successor to NationsBank as issuer of Letters of Credit
under ARTICLE III.
"Interbank Offered Rate" means, for any Eurodollar Rate Loan
for any Interest Period therefor, the rate per annum (rounded upwards,
if necessary, to the nearest 1/100 of 1%) appearing on Telerate Page
3750 (or any successor page) as the London interbank offered rate for
deposits in Dollars at approximately 11:00 A.M. (London time) two
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period. If, for any reason, such rate is
not available, the term "Interbank Offered Rate" shall mean, with
respect to any Eurodollar 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 LIBOR 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 LIBOR
Page, the applicable rate shall be the arithmetic mean of all such
rates.
"Interest Period" means, for each Eurodollar Rate Loan, a
period commencing on the date such Eurodollar Rate Loan is made or
Converted and ending, at the Borrower's option, on the date one, two,
three or six months or, upon specific request therefor by the Borrower
and with the consent of the Agent and the Lenders in their discretion,
one year, thereafter as notified to the Agent by the Authorized
Representative three (3) Business Days, or in the case of an Interest
Period of one year, four (4) Business Days, prior to the beginning of
such Interest Period; PROVIDED, that,
(i if the Authorized Representative fails to notify
the Agent of the length of an Interest Period three (3) (or
four (4), if applicable) Business Days prior to the first day
of such Interest Period, the Loan for which such Interest
Period was to be determined shall be deemed to be a Base Rate
Loan as of the first day thereof;
(ii if an Interest Period for a Eurodollar Rate Loan
would end on a day which is not a Business Day, such Interest
Period shall be extended to the next Business Day (unless such
extension would cause the applicable Interest Period to end in
the succeeding calendar month, in which case such Interest
Period shall end on the next preceding Business Day);
18
(iii any Interest Period which 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 a calendar month;
(iv no Interest Period shall extend past the
Facility Termination Date; and
(v there shall not be more than six (6)
Interest Periods in effect on any day.
"Interest Rate Selection Notice" means the written notice
delivered by an Authorized Representative in connection with the
election of a subsequent Interest Period for any Eurodollar Rate Loan
or the Conversion of any Eurodollar Rate Loan into a Base Rate Loan or
the Conversion of any Base Rate Loan into a Eurodollar Rate Loan in the
form of EXHIBIT E.
"LC Account Agreement" means the LC Account Agreement dated as
of the date hereof between the Borrower and the Agent, as amended,
modified or supplemented from time to time.
"Lending Office" means, as to each Lender, the Lending Office
of such Lender designated on the signature pages hereof or in an
Assignment and Acceptance or such other office of such Lender (or of an
affiliate of such Lender) as such Lender may from time to time specify
to the Authorized Representative and the Agent as the office by which
its Loans are to be made and maintained.
"Letter of Credit" means a standby or commercial letter of
credit issued by the Issuing Bank for the account of the Borrower in
favor of a Person advancing credit or securing an obligation on behalf
of the Borrower, including the Existing Letters of Credit.
"Letter of Credit Commitment" means, with respect to each
Lender, the obligation of such Lender to acquire Participations in
respect of Letters of Credit and Reimbursement Obligations up to an
aggregate amount at any one time outstanding equal to such Lender's
Applicable Commitment Percentage of the Total Letter of Credit
Commitment as the same may be increased or decreased from time to time
pursuant to this Agreement.
"Letter of Credit Facility" means the facility described in
ARTICLE III hereof providing for the issuance by the Issuing Bank for
the account of the Borrower of Letters of Credit in an aggregate stated
amount at any time outstanding not exceeding the Total Letter of Credit
Commitment.
"Letter of Credit Outstandings" means, as of any date of
determination, the aggregate amount remaining undrawn under all Letters
of Credit plus Reimbursement Obligations then outstanding.
19
"Lien" means any interest in property securing any obligation
owed to, or a claim by, a Person other than the owner of the property,
whether such interest is based on the common law, statute or contract,
and including but not limited to the lien or security interest arising
from a mortgage, encumbrance, pledge, security agreement, conditional
sale or trust receipt or a lease, consignment or bailment for security
purposes. For the purposes of this Agreement, the Borrower and any
Subsidiary shall be deemed to be the owner of any property which it has
acquired or holds subject to a conditional sale agreement, financing
lease, or other arrangement pursuant to which title to the property has
been retained by or vested in some other Person for security purposes.
"Loan", "Revolving Loan", "Swing Line Loan", "Loans",
"Revolving Loans" or "Swing Line Loans" means any borrowing pursuant to
an Advance under the Revolving Credit Facility, including the Swing
Line.
"Loan Documents" means this Agreement, the Notes, the Facility
Guaranties, the LC Account Agreement, the Applications and Agreements
for Letter of Credit, and all other instruments and documents
heretofore or hereafter executed or delivered to or in favor of any
Lender or the Agent in connection with the Loans made and transactions
contemplated under this Agreement, as the same may be amended,
supplemented or replaced from the time to time.
"Major Subsidiaries" means, collectively, (i) Comfort Supply,
Gemaire, Central Air Conditioning Distributors, Inc., Three States
Supply, Inc. and Heating & Cooling, and (ii) any other Subsidiary
meeting the conditions set forth in SECTION 7.19 after the Closing
Date.
"Material Adverse Effect" means a material adverse effect on
(i) the business, properties, operations or condition, financial or
otherwise, of the Borrower and its Subsidiaries and any other Credit
Parties taken as a whole, (ii) the ability of any Credit Parties taken
as a whole to pay or perform their obligations, liabilities and
indebtedness under the Loan Documents as such payment or performance
becomes due in accordance with the terms thereof, or (iii) the rights,
powers and remedies of the Agent or any Lender under any Loan Document
or the validity, legality or enforceability thereof (including for
purposes of clauses (ii) and (iii) the imposition of burdensome
conditions on the Agent or the Lenders in enforcing such rights, powers
and remedies).
"Moody's" means Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA to which the Borrower or any ERISA
Affiliate is making, or is accruing an obligation to make,
contributions or has made, or been obligated to make, contributions
within the preceding six (6) Fiscal Years.
20
"Municipal Obligations" means general obligations issued by,
and supported by the full taxing authority of, any state of the United
States of America or of any municipal corporation or other public body
organized under the laws of any such state which are rated in the
highest investment rating category by both S&P and Moody's.
"NCMI" means NationsBanc Capital Markets, Inc. and its
successors.
"Net Proceeds" from the issuance of equity or Indebtedness
means cash payments received therefrom as and when received, net of all
legal, accounting, banking, underwriting, title and recording fees and
expenses, commissions, discounts and other issuance expenses incurred
in connection therewith and all taxes required to be paid or accrued as
a consequence of such transaction.
"Notes" means, collectively, the Revolving Notes and the Swing
Line Notes of the Borrower executed and delivered to the Lenders and
NationsBank, respectively, pursuant to SECTION 2.5, as the same may be
amended.
"Obligations" means the obligations, liabilities and
Indebtedness of the Borrower with respect to (i) the principal and
interest on the Loans as evidenced by the Notes, (ii) the Reimbursement
Obligations and otherwise in respect of the Letters of Credit, (iii)
the payment of fees, expenses, indemnification obligations arising
under the Loan Documents, (iv) all liabilities of Borrower to any
Lender which arise under a Swap Agreement, and (v) the payment and
performance of all other obligations, liabilities and Indebtedness of
the Borrower to the Lenders, the Agent or NCMI hereunder, under any one
or more of the other Loan Documents or with respect to the Loans.
"Outstandings" means, collectively, at any date, the Letter of
Credit Outstandings, Swing Line Outstandings and Revolving Credit
Outstandings on such date.
"Participation" means, (i) with respect to any Lender (other
than the Issuing Bank) and a Letter of Credit, the extension of credit
represented by the participation of such Lender hereunder in the
liability of the Issuing Bank in respect of a Letter of Credit issued
by the Issuing Bank in accordance with the terms hereof and (ii) with
respect to any Lender (other than NationsBank) and a Swing Line Loan,
the extension of credit represented by the participation of such Lender
hereunder in the liability of NationsBank in respect of a Swing Line
Loan made by NationsBank in accordance with the terms hereof.
"PBGC" means the Pension Benefit Guaranty Corporation and any
successor thereto.
"Pension Plan" means any employee pension benefit plan within
the meaning of Section 3(2) of ERISA, other than a Multiemployer Plan,
which is subject to the provisions of Title IV of ERISA or Section 412
of the Code and which (i) is maintained for employees of the Borrower
or any of its ERISA Affiliates or is assumed by the Borrower or any of
its
21
ERISA Affiliates in connection with any Acquisition or (ii) has at any
time been maintained for the employees of the Borrower or any current
or former ERISA Affiliate.
"Person" means an individual, partnership, corporation, trust,
unincorporated organization, association, joint venture or a government
or agency or political subdivision thereof.
"Pre-Refunded Municipal Obligations" means obligations of any
state of the United States of America or of any municipal corporation
or other public body organized under the laws of any such state which
are rated, based on the escrow, in the highest investment rating
category by both S&P and Moody's and which have been irrevocably called
for redemption and advance refunded through the deposit in escrow of
Government Securities or other debt securities which are (i) not
callable at the option of the issuer thereof prior to maturity, (ii)
irrevocably pledged solely to the payment of all principal and interest
on such obligations as the same becomes due and (iii) in a principal
amount and bear such rate or rates of interest as shall be sufficient
to pay in full all principal of, interest, and premium, if any, on such
obligations as the same becomes due as verified by a nationally
recognized firm of certified public accountants.
"Preferred Stock" means the 6.5% Series A Preferred Stock
issued by Heating and Cooling, a Subsidiary of the Borrower, of which
2,000 shares are authorized, issued and outstanding and 2,000 of such
shares are owned of record by Rheem.
"Prime Rate" means the rate of interest per annum announced
publicly by the Agent as its prime rate from time to time. The Prime
Rate is not necessarily the best or the lowest rate of interest offered
by the Agent.
"Principal Office" means the office of the Agent at
NationsBank, National Association, Xxxxxxxxxxxx Xxxxxx, 00xx Xxxxx, XX0
000-00-00, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, Attention: Agency Services,
or such other office and address as the Agent may from time to time
designate.
"Private Placement Debt" means unsecured Indebtedness for
Money Borrowed issued by the Borrower in a private placement
transaction; provided that all of the following conditions shall be
satisfied:
(i) no portion of principal thereof shall be payable or
required to be purchased (whether by scheduled
installment, mandatory prepayment or redemption, or
the exercise of any put right) prior to the Stated
Termination Date;
(ii) the instruments and agreements evidencing such
Indebtedness, and any agreement under which such
Indebtedness is created, shall provide that the right
to payment of the holders or owners of Private
Placement Debt (including any trustee or agent acting
on behalf of such holders or owners,
22
collectively "Private Placement Debt Holders") shall
either be subordinate to or rank PARI PASSU in all
respects with the rights of the Lenders and the Agent
to payment and performance of the Obligations on
terms reasonably acceptable to the Agent;
(iii) both immediately prior to and immediately after
giving effect to the issuance of such Indebtedness,
there shall not have occurred and be continuing any
Default or Event of Default;
(iv) the Borrower shall furnish to the Agent, not later
than the earliest date of delivery thereof to any
actual or prospective Private Placement Debt Holder,
copies of (A) all preliminary placement memoranda and
final placement memoranda relating to such
Indebtedness and (B) drafts of all documents and
agreements under which such Indebtedness is to be
created or governed; and
(v) not later than ten (10) days prior to the issuance
of such Indebtedness, the Borrower shall deliver to
the Agent a certificate in the form of EXHIBIT H,
executed by an Authorized Representative and
containing calculations giving historical pro forma
effect to the issuance of such Indebtedness as of and
for the Four-Quarter Period ending at the end of most
recent fiscal quarter of the Borrower preceding the
date of such issuance (assuming for such purpose that
the initial rate or rates of interest provided for
therein (and giving effect to any increase in rates
of interest therein provided) remained in effect for
such Four-Quarter Period), which certificate shall
demonstrate that the issuance of such Indebtedness
does not cause, create or result in a Default or
Event of Default on a historical pro forma basis.
"Rate Hedging Obligations" means any and all obligations of
the Borrower or any Subsidiary, whether absolute or contingent and
howsoever and whensoever created, arising, evidenced or acquired
(including all renewals, extensions and modifications thereof and
substitutions therefor), under (i) any and all agreements, devices or
arrangements designed to protect at least one of the parties thereto
from the fluctuations of interest rates, exchange rates or forward
rates applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to, Dollar-denominated or
cross-currency interest rate exchange agreements, forward currency
exchange agreements, interest rate cap or collar protection agreements,
forward rate currency or interest rate options, puts, warrants and
those commonly known as interest rate "swap" agreements; and (ii) any
and all cancellations, buybacks, reversals, terminations or assignments
of any of the foregoing.
"Regulation D" means Regulation D of the Board as the same may
be amended or supplemented from time to time.
"Reimbursement Obligation" shall mean at any time, the
obligation of the Borrower with respect to any Letter of Credit to
reimburse the Issuing Bank and the Lenders to the
23
extent of their respective Participations (including by the receipt by
the Issuing Bank of proceeds of Loans pursuant to SECTION 3.2) for
amounts theretofore paid by the Issuing Bank pursuant to a drawing
under such Letter of Credit.
"Repurchase Agreement" means a repurchase agreement entered
into with any financial institution whose debt obligations or
commercial paper are rated "A" by either of S&P or Moody's or "A-1" by
S&P or "P-1" by Moody's.
"Required Lenders" means, as of any date, Lenders on such date
having Credit Exposures (as defined below) aggregating at least 66-2/3%
of the aggregate Credit Exposures of all the Lenders on such date. For
purposes of the preceding sentence, the amount of the "CREDIT EXPOSURE"
of each Lender shall be equal to the aggregate principal amount of the
Loans owing to such Lender plus the aggregate unutilized amounts of
such Lender's Revolving Credit Commitment (without regard to any Swing
Line Outstandings) plus the amount of such Lender's Applicable
Commitment Percentage of Letter of Credit Outstandings; provided that,
(i) if any Lender shall have failed to honor its obligation to make all
or a portion of any Advance it shall not be deemed to have any Credit
Exposure, (ii) if any Lender shall have failed to pay to the Issuing
Bank its Applicable Commitment Percentage of any drawing under any
Letter of Credit resulting in an outstanding Reimbursement Obligation,
such Lender's Credit Exposure attributable to Letters of Credit and
Reimbursement Obligations shall be deemed to be held by the Issuing
Bank for purposes of this definition and (iii) if any Lender shall have
failed to pay to NationsBank its Applicable Commitment Percentage of
any Swing Line Loan, such Lender's Credit Exposure attributable to all
Swing Line Outstandings shall be deemed to be held by NationsBank for
purposes of this definition.
"Restricted Payment" means (a) any dividend or other
distribution, direct or indirect, on account of any shares of any class
of stock of Borrower or any of its Subsidiaries (other than those
payable or distributable solely to the Borrower) now or hereafter
outstanding, except a dividend payable solely in shares of a class of
stock to the holders of that class; (b) any redemption, conversion,
exchange, retirement or similar payment, purchase or other acquisition
for value, direct or indirect, of any shares of any class of stock of
Borrower or any of its Subsidiaries (other than those payable or
distributable solely to the Borrower) 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 stock of Borrower or any of its Subsidiaries now or hereafter
outstanding; and (d) any issuance and sale of capital stock of any
Subsidiary of the Borrower (or any option, warrant or right to acquire
such stock) other than to the Borrower.
"Revolving Credit Commitment" means, with respect to each
Lender, the obligation of such Lender to make Loans to the Borrower up
to an aggregate principal amount at any one time outstanding equal to
such Lender's Applicable Commitment Percentage of the Total Revolving
Credit Commitment.
24
"Revolving Credit Facility" means the facility described in
Article II hereof providing for Loans to the Borrower by the Lenders in
the aggregate principal amount of the Total Revolving Credit Commitment
less the aggregate amount of outstanding Swing Line Loans.
"Revolving Credit Outstandings" means, as of any date of
determination, the aggregate principal amount of all Loans then
outstanding and all interest accrued thereon.
"Revolving Credit Termination Date" means (i) the Stated
Termination Date or (ii) such earlier date of termination of Lenders'
obligations pursuant to SECTION 9.1 upon the occurrence of an Event of
Default, or (iii) such date as the Borrower may voluntarily and
permanently terminate the Revolving Credit Facility by payment in full
of all Revolving Credit Outstandings, Swing Line Outstandings and
Letter of Credit Outstandings and cancellation of all Letters of
Credit.
"Revolving Loan" means any borrowing pursuant to an Advance
under the Revolving Credit Facility in accordance with Section 2.1.
"Revolving Notes" means the promissory notes of the Borrower
evidencing Revolving Loans executed and delivered to the Lenders
substantially in the form of EXHIBIT F-1.
"Rheem" means Rheem Manufacturing Company, a New York
corporation and its successors.
"S&P" means Standard & Poor's Ratings Group, a division of
XxXxxx-Xxxx.
"Single Employer Plan" means any employee pension benefit plan
covered by Title IV of ERISA in respect of which the Borrower or any
Subsidiary is an "employer" as described in Section 4001(b) of ERISA
and which is not a Multiemployer Plan.
"Solvent" means, when used with respect to any Person, that at
the time of determination:
(i) the fair value of its assets (both at fair
valuation and at present fair saleable value on an orderly
basis) is in excess of the total amount of its liabilities,
including Contingent Obligations; and
(ii) it is then able and expects to be able to
pay its debts as they mature; and
(iii) it has capital sufficient to carry on its
business as conducted and as proposed to be conducted.
"Stated Termination Date" means August 8, 2002.
25
"Subsidiary" means any corporation or other entity in which
50% or more of its outstanding voting stock or 50% or more of all
equity interests is owned directly or indirectly by the Borrower and/or
by one or more of the Borrower's Subsidiaries.
"Swap Agreement" means one or more agreements between the
Borrower and any Person with respect to Indebtedness evidenced by any
or all of the Notes, on terms mutually acceptable to Borrower and such
Person and approved by the Required Lenders, which agreements create
Rate Hedging Obligations; PROVIDED, HOWEVER, that no such approval of
the Lenders shall be required to the extent such agreements are entered
into between the Borrower and any Lender.
"Swing Line" means the revolving line of credit established by
NationsBank in favor of the Borrower pursuant to SECTION 2.13.
"Swing Line Loans" means Loans made by NationsBank to the
Borrower pursuant to SECTION 2.13.
"Swing Line Note" means the promissory note of the Borrower
evidencing Swing Line Loans executed and delivered to NationsBank
substantially in the form of EXHIBIT F-2.
"Termination Event" means: (i) a "Reportable Event" described
in Section 4043 of ERISA and the regulations issued thereunder (unless
the notice requirement has been waived by applicable regulation); or
(ii) the withdrawal of the Borrower or any ERISA Affiliate from a
Pension Plan during a plan year in which it was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA or was deemed such
under Section 4068(f) of ERISA; or (iii) the termination of a Pension
Plan, the filing of a notice of intent to terminate a Pension Plan or
the treatment of a Pension Plan amendment as a termination under
Section 4041 of ERISA; or (iv) the institution of proceedings to
terminate a Pension Plan by the PBGC; or (v) any other event or
condition which would constitute grounds under Section 4042(a) of ERISA
for the termination of, or the appointment of a trustee to administer,
any Pension Plan; or (vi) the partial or complete withdrawal of the
Borrower or any ERISA Affiliate from a Multiemployer Plan; or (vii) the
imposition of a Lien pursuant to Section 412 of the Code or Section 302
of ERISA; or (viii) any event or condition which results in the
reorganization or insolvency of a Multiemployer Plan under Section 4241
or Section 4245 of ERISA, respectively; or (ix) any event or condition
which results in the termination of a Multiemployer Plan under Section
4041A of ERISA or the institution by the PBGC of proceedings to
terminate a Multiemployer Plan under Section 4042 of ERISA.
"Total Letter of Credit Commitment" means an amount not to
exceed $5,000,000.
"Total Revolving Credit Commitment" means a principal amount
equal to $260,000,000, as reduced from time to time in accordance with
SECTION 2.7.
26
"Type" shall mean any type of Loan (i.e., a Base Rate Loan or
a Eurodollar Rate Loan).
"Voting Stock" means shares of capital stock issued by a
corporation, or equivalent interests in any other Person, the holders
of which are ordinarily, in the absence of contingencies or other
voting trusts or agreements, entitled to vote for the election of
directors (or persons performing similar functions) of such Person,
even if the right so to vote has been suspended by the happening of
such a contingency.
"Weathertrol Acquisition" means the ownership by Borrower of
one hundred percent (100%) of the common stock of WSC Holdings,
following the merger of WSC Holdings and Weathertrol, in which WSC
Holdings will be the surviving corporation.
"WSC Holdings" means WSC Holdings, Inc., a North Carolina
corporation, and prior to the Weathertrol Acquisition a wholly-owned
Subsidiary of Borrower.
"WSC Preferred Stock" means the Class A Preferred Stock, par
value $1,000 per share, of which no more than 6,000 shares will be
issued and outstanding following the Weathertrol Acquisition and the
Class B Preferred Stock, par value $1,000 per share, of which no more
than 4,000 shares will be issued and outstanding following the
Weathertrol Acquisition, in each case issued by WSC Holdings and which,
in each case, is (1) convertible into shares of common stock of
Borrower at any time at the option of the holders thereof, and (2)
redeemable at the option of the holders for an amount equal to the par
value thereof plus accrued but unpaid dividends thereof, provided that
the redemption right with respect to the Class A Preferred Stock may
not be exercised until after January 31, 1998 and the redemption right
with respect to the Class B Preferred Stock may not be exercised until
after June 30, 2000.
"WSC ESOP" means the Weathertrol Supply Company Employees'
Stock Ownership Plan and Trust established by a trust agreement
executed August 8, 1994.
I.3. RULES OF INTERPRETATION.
(a All accounting terms not specifically defined herein shall
have the meanings assigned to such terms and shall be interpreted in
accordance with GAAP applied on a Consistent Basis.
(b Each term defined in Article 1 or 9 of the Florida Uniform
Commercial Code shall have the meaning given therein unless otherwise
defined herein, except to the extent that the Uniform Commercial Code
of another jurisdiction is controlling, in which case such terms shall
have the meaning given in the Uniform Commercial Code of the applicable
jurisdiction.
27
(c The headings, subheadings and table of contents used herein
or in any other Loan Document are solely for convenience of reference
and shall not constitute a part of any such document or affect the
meaning, construction or effect of any provision thereof.
(d Except as otherwise expressly provided, references herein
to articles, sections, paragraphs, clauses, annexes, appendices,
exhibits and schedules are references to articles, sections,
paragraphs, clauses, annexes, appendices, exhibits and schedules in or
to this Agreement.
(e All definitions set forth herein or in any other Loan
Document shall apply to the singular as well as the plural form of such
defined term, and all references to the masculine gender shall include
reference to the feminine or neuter gender, and VICE VERSA, as the
context may require.
(f When used herein or in any other Loan Document, words such
as "hereunder", "hereto", "hereof" and "herein" and other words of like
import shall, unless the context clearly indicates to the contrary,
refer to the whole of the applicable document and not to any particular
article, section, subsection, paragraph or clause thereof.
(g References to "including" means including without limiting
the generality of any description preceding such term, and for purposes
hereof the rule of EJUSDEM GENERIS shall not be applicable to limit a
general statement, followed by or referable to an enumeration of
specific matters, to matters similar to those specifically mentioned.
(h All dates and times of day specified herein shall refer to
such dates and times at Charlotte, North Carolina.
(i Each of the parties to the Loan Documents and their counsel
have reviewed and revised, or requested (or had the opportunity to
request) revisions to, the Loan Documents, and any rule of construction
that ambiguities are to be resolved against the drafting party shall be
inapplicable in the construing and interpretation of the Loan Documents
and all exhibits, schedules and appendices thereto.
(j Any reference to an officer of the Borrower or any other
Person by reference to the title of such officer shall be deemed to
refer to each other officer of such Person, however titled, exercising
the same or substantially similar functions.
(k All references to any agreement or document as amended,
modified or supplemented, or words of similar effect, shall mean such
document or agreement, as the case may be, as amended, modified or
supplemented from time to time only as and to the extent permitted
therein and in the Loan Documents.
I.4 ACCOUNTING CHANGES. Except as otherwise expressly provided herein,
all accounting terms used herein shall be interpreted, and all financial
statements and certificates and reports as to
28
financial matters required to be delivered to the Lenders hereunder shall be
prepared, in accordance with GAAP, applied on a Consistent Basis. All financial
statements delivered to the Lenders hereunder shall be accompanied by a
statement from the Borrower that GAAP has not changed since the most recent
financial statements delivered by the Borrower to the Lenders or if GAAP has
changed describing such changes in detail and explaining how such changes affect
the financial statements. All calculations made for the purposes of determining
compliance with this Credit Agreement shall (except as otherwise expressly
provided herein) be made by application of GAAP applied on a basis consistent
with the most recent annual or quarterly financial statements delivered pursuant
to SECTION 7.1 (or, prior to the delivery of the first financial statements
pursuant to SECTION 7.1, consistent with the financial statements dated December
31, 1996; provided, however, if (a) the Borrower shall object to determining
such compliance on such basis at the time of delivery of such financial
statements due to any change in GAAP or the rules promulgated with respect
thereto or (b) the Agent or the Required Lenders shall so object in writing
within 60 days after delivery of such financial statements (or after the Lenders
have been informed of the change in GAAP affecting such financial statements, if
later), then such calculations shall be made on a basis consistent with the most
recent financial statements delivered by the Borrower to the Lenders as to which
no such objection shall have been made.
29
ARTICLE II
THE REVOLVING CREDIT FACILITY
II.1. REVOLVING LOANS.
(a COMMITMENT. Subject to the terms and conditions of this
Agreement, each Lender severally agrees to make Advances to the Borrower under
the Revolving Credit Facility from time to time from the Closing Date until the
Revolving Credit Termination Date on a pro rata basis as to the total borrowing
requested by the Borrower on any day determined by such Lender's Applicable
Commitment Percentage up to but not exceeding the Revolving Credit Commitment of
such Lender, PROVIDED, however, that the Lenders will not be required and shall
have no obligation to make any such Advance (i) so long as a Default or an Event
of Default has occurred and is continuing or (ii) if the Agent has accelerated
the maturity of any of the Notes as a result of an Event of Default; and
PROVIDED further, however, that immediately after giving effect to each such
Advance, the principal amount of Outstandings shall not exceed the Total
Revolving Credit Commitment. Within such limits, the Borrower may borrow, repay
and reborrow under the Revolving Credit Facility on any Business Day from the
Closing Date until, but (as to borrowings and reborrowings) not including, the
Revolving Credit Termination Date; PROVIDED, however, that (y) no Revolving Loan
that is a Eurodollar Rate Loan shall be made which has an Interest Period that
extends beyond the Stated Termination Date and (z) each Revolving Loan that is a
Eurodollar Rate Loan may, subject to the provisions of SECTION 2.8, be repaid
only on the last day of the Interest Period with respect thereto unless such
payment is accompanied by the additional payment, if any, required by SECTION
4.5.
(b AMOUNTS. Except as otherwise permitted by the Lenders from
time to time, the aggregate unpaid principal amount of the Outstandings shall
not exceed at any time the Total Revolving Credit Commitment, and, in the event
there shall be outstanding any such excess, the Borrower shall immediately make
such payments and prepayments as shall be necessary to comply with this
restriction. Each Loan hereunder and each Conversion under SECTION 2.8, shall be
in an amount of at least $2,500,000, and, if greater than $2,500,000, an
integral multiple of $500,000.
(c ADVANCES. (i) An Authorized Representative shall give the
Agent (1) at least three (3) Business Days' (or if an Interest Period of one
year is being requested, four (4) Business Days') irrevocable written notice by
telefacsimile transmission of a Borrowing Notice or Interest Rate Selection
Notice (as applicable) with appropriate insertions, effective upon receipt, of
each Loan that is a Eurodollar Rate Loan (whether representing an additional
borrowing hereunder or the Conversion of a borrowing hereunder from Base Rate
Loans to Eurodollar Rate Loans) prior to 10:30 A.M. and (2) irrevocable written
notice by telefacsimile transmission of a Borrowing Notice or Interest Rate
Selection Notice (as applicable) with appropriate insertions, effective upon
receipt, of each Loan that is a Base Rate Loan (whether representing an
additional borrowing hereunder or the Conversion of borrowing hereunder from
Eurodollar Rate Loans to Base Rate Loans) prior to 10:30 A.M. on the day of such
proposed Loan. Each such notice shall specify the amount of the borrowing, the
type of Loan (Base Rate or Eurodollar Rate), the date of borrowing and, if a
30
Eurodollar Rate Loan, the Interest Period to be used in the computation of
interest. If a one year Interest Period is being requested by the Borrower with
respect to any Loan, the Borrowing Notice or Interest Rate Selection Notice
shall so indicate. Notice of receipt of such Borrowing Notice or Interest Rate
Selection Notice, as the case may be, together with the amount of each Lender's
portion of an Advance requested thereunder and, in the event that the Borrower
has requested an Interest Period of one year for any Eurodollar Rate Loan,
notice of such request, shall be provided by the Agent to each Lender by
telefacsimile transmission with reasonable promptness, but (provided the Agent
shall have received such notice by 10:30 A.M.) not later than 1:00 P.M. on the
same day as the Agent's receipt of such notice. Each Lender who receives notice
from the Agent that the Borrower has requested under this ARTICLE II an Interest
Period of one year for any Eurodollar Rate Loan as provided above shall, not
later than 3:00 P.M. on the date of receipt of such notice, notify the Agent by
telefacsimile transmission whether such Lender is willing to make available the
requested Interest Period of one year. Notwithstanding anything to the contrary
herein contained, in the event that all Lenders do not consent to the requested
one year Interest Period as to a requested Eurodollar Rate Loan, then the
Borrower shall be deemed to have requested an Interest Period of six months with
respect to such Eurodollar Rate Loan.
(ii Not later than 2:00 P.M. on the date specified for each borrowing
under this SECTION 2.1, each Lender shall, pursuant to the terms and subject to
the conditions of this Agreement, make the amount of the Advance or Advances to
be made by it on such day available by wire transfer to the Agent in the amount
of its pro rata share, determined according to such Lender's Applicable
Commitment Percentage of the Loan or Loans to be made on such day. Such wire
transfer shall be directed to the Agent at the Principal Office and shall be in
the form of Dollars constituting immediately available funds. The amount so
received by the Agent shall, subject to the terms and conditions of this
Agreement, be made available to the Borrower by delivery of the proceeds thereof
to the Borrower's Account or otherwise as shall be directed in the applicable
Borrowing Notice by the Authorized Representative and reasonably acceptable to
the Agent.
(iii The Borrower shall have the option to elect the duration of the
initial and any subsequent Interest Periods and to convert the Loans in
accordance with SECTION 2.8. Eurodollar Rate Loans and Base Rate Loans may be
outstanding at the same time, PROVIDED, HOWEVER, there shall not be outstanding
at any one time Eurodollar Rate Loans having more than six (6) different
Interest Periods. If the Agent does not receive a Borrowing Notice or an
Interest Rate Selection Notice giving notice of election of the duration of an
Interest Period or of Conversion of any Loan to or Continuation of a Loan as a
Eurodollar Rate Loan by the time prescribed by SECTION 2.1(C) OR 2.8, or if a
Default or Event of Default shall exist, the Borrower shall be deemed to have
elected to Convert such Loan to (or Continue such Loan as) a Base Rate Loan
until the Borrower notifies the Agent in accordance with SECTION 2.8.
(iv) Notwithstanding the foregoing, if a drawing is made under any
Letter of Credit, such drawing is honored by the Issuing Bank prior to the
Revolving Credit Termination Date, and the Borrower shall not immediately fully
reimburse the Issuing Bank in respect of such drawing, (A) provided that the
conditions to making a Revolving Loan as herein provided shall then be
satisfied, the Reimbursement Obligation arising from such drawing shall be paid
to the Issuing Bank by the
31
Agent without the requirement of notice to or from the Borrower from immediately
available funds which shall be advanced as a Base Rate Refunding Loan by each
Lender under the Revolving Credit Facility in an amount equal to such Lender's
Applicable Commitment Percentage of such Reimbursement Obligation, and (B) if
the conditions to making a Revolving Loan as herein provided shall not then be
satisfied, each of the Lenders shall fund by payment to the Agent (for the
benefit of the Issuing Bank) in immediately available funds the purchase from
the Issuing Bank of their respective Participations in the related Reimbursement
Obligation based on their respective Applicable Commitment Percentages of the
Total Letter of Credit Commitment. If a drawing is presented under any Letter of
Credit in accordance with the terms thereof and the Borrower shall not
immediately reimburse the Issuing Bank in respect thereof, then notice of such
drawing or payment shall be provided promptly by the Issuing Bank to the Agent
and the Agent shall provide notice to each Lender by telephone or telefacsimile
transmission. If notice to the Lenders of a drawing under any Letter of Credit
is given by the Agent at or before 12:00 noon on any Business Day, each Lender
shall, pursuant to the conditions specified in this SECTION 2.1(C)(IV), either
make a Base Rate Refunding Loan or fund the purchase of its Participation in the
amount of such Lender's Applicable Commitment Percentage of such drawing or
payment and shall pay such amount to the Agent for the account of the Issuing
Bank at the Principal Office in Dollars and in immediately available funds
before 2:30 P.M. on the same Business Day. If notice to the Lenders of a drawing
under a Letter of Credit is given by the Agent after 12:00 noon on any Business
Day, each Lender shall, pursuant to the conditions specified in this SECTION
2.1(C)(IV), either make a Base Rate Refunding Loan or fund the purchase of its
Participation in the amount of such Lender's Applicable Commitment Percentage of
such drawing or payment and shall pay such amount to the Agent for the account
of the Issuing Bank at the Principal Office in Dollars and in immediately
available funds before 12:00 noon on the next following Business Day. Any such
Base Rate Refunding Loan shall be advanced as, and shall Continue as, a Base
Rate Loan unless and until the Borrower Converts such Base Rate Loan in
accordance with the terms of SECTION 2.8.
II.2. PAYMENT OF INTEREST. (a) The Borrower shall pay interest to the
Agent for the account of each Lender on the outstanding and unpaid principal
amount of each Loan made by such Lender for the period commencing on the date of
such Loan until such Loan shall be due at the then applicable Base Rate for Base
Rate Loans or applicable Eurodollar Rate for Eurodollar Rate Loans, as
designated by the Authorized Representative pursuant to SECTION 2.1; PROVIDED,
however, that if any amount shall not be paid when due (at maturity, by
acceleration or otherwise), all amounts outstanding hereunder shall bear
interest thereafter at the Default Rate.
(b Interest on each Loan shall be computed on the basis of a
year of 360 days and calculated in each case for the actual number of days
elapsed. Interest on each Loan shall be paid (i) quarterly in arrears on the
last Business Day of each June, September, December and March, commencing
September 30, 1997 for each Base Rate Loan, (ii) on the last day of the
applicable Interest Period for each Eurodollar Rate Loan and, if such Interest
Period extends for more than three (3) months, at intervals of three (3) months
after the first day of such Interest Period, and (iii) upon payment in full of
the principal amount of such Loan.
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II.3. PAYMENT OF PRINCIPAL. The principal amount of each Loan shall be
due and payable to the Agent for the benefit of each Lender in full on the
Revolving Credit Termination Date, or earlier as specifically provided herein.
The principal amount of any Base Rate Loan may be prepaid in whole or in part at
any time. The principal amount of any Eurodollar Rate Loan may be prepaid only
at the end of the applicable Interest Period unless the Borrower shall pay to
the Agent for the account of the Lenders the additional amount, if any, required
under SECTION 4.4. All prepayments of Loans made by the Borrower shall be in the
amount of $2,500,000 or such greater amount which is an integral multiple of
$500,000, or the amount equal to all Revolving Credit Outstandings, or such
other amount as necessary to comply with SECTION 2.1(B) or SECTION 2.8. The
Borrower shall notify the Agent of its intent to pay the principal amount of a
Loan not later than 10:30 A.M. on the date of such payment.
II.4. NON-CONFORMING PAYMENTS. (a) Each payment of principal (including
any prepayment) and payment of interest and fees, and any other amount required
to be paid to the Lenders with respect to the Loans, shall be made to the Agent
at the Principal Office, for the account of each Lender, in Dollars and in
immediately available funds before 12:30 P.M. on the date such payment is due.
The Agent may, but shall not be obligated to, debit the amount of any such
payment which is not made by such time against any ordinary deposit account, if
any, of the Borrower with the Agent.
(b The Agent shall deem any payment made by or on behalf of the
Borrower hereunder that is not made both in Dollars and in immediately available
funds and prior to 12:30 P.M. to be a non-conforming payment. Any such payment
shall not be deemed to be received by the Agent until the later of (i) the time
such funds become available funds and (ii) the next Business Day. Any
non-conforming payment may constitute or become a Default or Event of Default.
Interest shall continue to accrue on any principal as to which a non-conforming
payment is made until the later of (x) the date such funds become available
funds or (y) the next Business Day at the Default Rate from the date such amount
was due and payable.
(c In the event that any payment hereunder or under the Notes becomes
due and payable on a day other than a Business Day, then such due date shall be
extended to the next succeeding Business Day unless provided otherwise under
clause (ii) of the definition of "Interest Period"; PROVIDED that interest shall
continue to accrue during the period of any such extension and PROVIDED further,
that in no event shall any such due date be extended beyond the Revolving Credit
Termination Date.
II.5. NOTES. (a) Revolving Loans made by each Lender shall be evidenced
by the Revolving Note payable to the order of such Lender in the respective
amount of its Applicable Commitment Percentage of the Revolving Credit
Commitment, which Revolving Note shall be dated the Closing Date or a later date
pursuant to an Assignment and Acceptance and shall be duly completed, executed
and delivered by the Borrower.
(b) The Swing Line Loans of NationsBank shall be evidenced by the Swing
Line Note which Swing Line Note shall be dated the Closing Date.
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II.6. PRO RATA PAYMENTS. Except as otherwise provided herein, (a) each
payment on account of the principal of and interest on the Loans (other than
Swing Line Loans) and the fees described in SECTION 2.10 shall be made to the
Agent for the account of the Lenders pro rata based on their Applicable
Commitment Percentages, (b) all payments to be made by the Borrower for the
account of each of the Lenders on account of principal, interest and fees, shall
be made without diminution, setoff, recoupment or counterclaim, and (c) the
Agent will promptly distribute to the Lenders in immediately available funds
payments received in fully collected, immediately available funds from the
Borrower.
II.7. REDUCTIONS. The Borrower shall, by notice from an Authorized
Representative, have the right from time to time but not more frequently than
once each calendar month, upon not less than five (5) Business Days' written
notice to the Agent, effective upon receipt, to reduce the Total Revolving
Credit Commitment. The Agent shall give each Lender, within one (1) Business Day
of receipt of such notice, telefacsimile notice, or telephonic notice (confirmed
in writing), of such reduction. Each such reduction shall be in the aggregate
amount of $5,000,000 or such greater amount which is in an integral multiple of
$1,000,000, or the entire remaining Total Revolving Credit Commitment, and shall
permanently reduce the Total Revolving Credit Commitment. Each reduction of the
Total Revolving Credit Commitment shall be accompanied by payment of the Loans
to the extent that the amount of Outstandings exceeds the Total Revolving Credit
Commitment after giving effect to such reduction, together with accrued and
unpaid interest on the amounts prepaid. No such reduction shall result in the
payment of any Eurodollar Rate Loan other than on the last day of the Interest
Period of such Eurodollar Rate Loan unless such prepayment is accompanied by
amounts due, if any, under SECTION 4.5.
II.8. CONVERSIONS AND ELECTIONS OF SUBSEQUENT INTEREST PERIODS.
Provided that no Default or Event of Default shall have occurred and be
Continuing and subject to the limitations set forth below and in ARTICLE IV, the
Borrower may (subject, in the case of Eurodollar Rate Loans requested to have an
Interest Period of one year, to the consent of the Lenders as hereinabove
provided):
(a upon delivery, effective upon receipt, of a properly
completed Interest Rate Selection Notice to the Agent on or before 10:30 A.M. on
any Business Day, Convert all or a part of Eurodollar Rate Loans to Base Rate
Loans on the last day of the Interest Period for such Eurodollar Rate Loans; and
(b upon delivery, effective upon receipt, of a properly
completed Interest Rate Selection Notice to the Agent on or before 10:30 A.M.
three (3) Business Days (or in the case of Eurodollar Rate Loans requested to
have an Interest Period of one year, four (4) Business Days) prior to the date
of such election or Conversion:
(i elect a subsequent Interest Period for all or a
portion of Eurodollar Rate Loans to begin on the last day of
the then current Interest Period for such Eurodollar Rate
Loans; and
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(ii Convert Base Rate Loans to Eurodollar Rate
Loans on any Business Day.
Each election and Conversion pursuant to this SECTION 2.8 shall be
subject to the limitations on Eurodollar Rate Loans set forth in the definition
of "Interest Period" herein and in SECTIONS 2.1, 2.3 and ARTICLE IV. Notice of
receipt of each such election or Conversion, together with, in the event that
the Borrower has requested an Interest Period of one year for any Eurodollar
Rate Loan, notice of such request, shall be provided by the Agent to each Lender
by telefacsimile transmission with reasonable promptness, but (provided the
Agent shall have received such notice by 10:30 A.M.) not later than 1:00 P.M. on
the same day as the Agent's receipt of such notice. All such Continuations or
Conversions of Loans shall be effected pro rata based on the Applicable
Commitment Percentages of the Lenders.
II.9. [RESERVED]
II.10. UNUSED FEES. For the period beginning on the Closing Date and
ending on the Revolving Credit Termination Date, the Borrower agrees to pay to
the Agent, for the pro rata benefit of the Lenders based on their Applicable
Commitment Percentages, an unused fee equal to the Applicable Unused Fee
multiplied by the average daily amount by which the Total Revolving Credit
Commitment exceeds the sum of (i) Revolving Credit Outstandings plus (ii) Letter
of Credit Outstandings. Swing Line Loans shall not be outstanding Loans for
purposes of determining such fee. Such fees shall be due in arrears on the last
Business Day of each June, September, December and March commencing September
30, 1997 to and on the Revolving Credit Termination Date. Notwithstanding the
foregoing, so long as any Lender fails to make available any portion of its
Revolving Credit Commitment when requested, such Lender shall not be entitled to
receive payment of its pro rata share of such fee until such Lender shall make
available such portion. Such fee shall be calculated on the basis of a year of
360 days for the actual number of days elapsed.
II.11. DEFICIENCY ADVANCES. No Lender shall be responsible for any
default of any other Lender in respect to such other Lender's obligation to make
any Loan hereunder nor shall the Revolving Credit Commitment of any Lender
hereunder be increased as a result of such default of any other Lender. Without
limiting the generality of the foregoing, in the event any Lender shall fail to
advance funds to the Borrower as herein provided, the Agent may in its
discretion, but shall not be obligated to, advance under the Revolving Note in
its favor as a Lender all or any portion of such amount or amounts (each, a
"deficiency advance") and shall thereafter be entitled to payments of principal
of and interest on such deficiency advance in the same manner and at the same
interest rate or rates to which such other Lender would have been entitled had
it made such advance under its Revolving Note; provided that, upon payment to
the Agent from such other Lender of the entire outstanding amount of each such
deficiency advance, together with accrued and unpaid interest thereon, from the
most recent date or dates interest was paid to the Agent by the Borrower on each
Loan comprising the deficiency advance at the interest rate per annum for
overnight borrowing by the Agent from the Federal Reserve Bank, then such
payment shall be credited against the Revolving Note of the Agent in full
payment of such deficiency advance and the Borrower shall be deemed to have
borrowed the amount of such deficiency advance from such other Lender as of the
most recent
35
date or dates, as the case may be, upon which any payments of interest were made
by the Borrower thereon.
II.12. USE OF PROCEEDS. The proceeds of the Loans made pursuant to the
Revolving Credit Facility hereunder shall be used by the Borrower (i) for
working capital needs and (ii) for general corporate purposes, including the
making of Acquisitions permitted hereunder.
2.13 SWING LINE. Notwithstanding any other provision of this Agreement
to the contrary, in order to administer the Revolving Credit Facility in an
efficient manner and to minimize the transfer of funds between the Agent and the
Lenders, NationsBank shall make available Swing Line Loans to the Borrower at
the election of Borrower prior to the Revolving Credit Termination Date.
NationsBank shall not make any Swing Line Loan pursuant hereto (i) if the
Borrower is not in compliance with all the conditions to the making of Revolving
Loans set forth in this Agreement, (ii) if after giving effect to such Swing
Line Loan, the outstanding Swing Line Loans exceed $15,000,000, or (iii) if
after giving effect to such Swing Line Loan, the sum of the Revolving Credit
Outstandings and outstanding Swing Line Loans and Letter of Credit Outstandings
exceeds the Total Revolving Credit Commitment. Loans made pursuant to this
SECTION 2.13 shall be limited to Loans bearing interest at the Base Rate or such
other rate of interest as agreed upon by the Borrower and NationsBank.
(i) the Borrower may borrow, repay and reborrow under this
SECTION 2.13. Borrowings under the Swing Line may be made in amounts of
$100,000 or greater upon telephonic (confirmed in writing) or
telefacsimile request by an Authorized Representative of the Borrower
made to NationsBank not later than 12:00 noon Charlotte, North Carolina
time on the Business Day of the requested borrowing. Each repayment of
a Swing Line Loan shall be in integral multiples of $100,000 or the
unpaid amount of the Swing Line Loan Outstandings. The minimum
outstanding amount of Swing Line Loans shall be $100,000.
(ii) If the Borrower instructs NationsBank to debit its demand
deposit account in an amount of any payment with respect to a Swing
Line Loan, or NationsBank otherwise receives repayment after 2:00 P.M.
Charlotte, North Carolina time, on a Business Day, such payment shall
be deemed received on the next Business Day.
(iii) The Borrower and each Lender which is or may become a
party hereto acknowledge that all Swing Line Loans are to be made
solely by NationsBank to the Borrower but that such Lender shall share
the risk of loss with respect to such Advances in an amount equal to
such Lender's Applicable Commitment Percentage of such Swing Line Loan.
Upon demand made by NationsBank, each Lender (including NationsBank)
shall, according to its Lender's Applicable Commitment Percentage of
such Swing Line Loan, promptly provide to NationsBank its purchase
price therefor in an amount equal to its Participation therein, in
which case such Swing Line Loan shall be deemed from and after such
date (to the extent Borrower has not Converted such loan pursuant to
SECTION 2.8) a Base Rate Refunding Loan made in accordance with this
Agreement. The obligation of each Lender to so provide its purchase
price to NationsBank shall be absolute and unconditional
36
and shall not be affected by the occurrence of an Event of Default or
any other occurrence or event.
(iv) The Borrower at its option may request an Advance as a
Revolving Loan pursuant to SECTION 2.1 in an amount sufficient to repay
any or all Swing Line Loans on any date (subject to three (3) Business
Days prior notice in the case of Eurodollar Rate Loans and four (4)
Business Days prior notice in the case of a Eurodollar Rate Loan having
a one year Interest Period) and the Agent shall upon the receipt of
such Advance, provide to NationsBank the amount necessary to repay such
Swing Line Loan or Loans (which NationsBank shall then apply to such
repayment) and credit any balance of the Revolving Loan in immediately
available funds to the Borrower's Account. The proceeds of such
Advances shall be paid to NationsBank for application to the
outstanding Swing Line Loans and the Lenders shall then be deemed to
have made Revolving Loans in the amount of such Advances. The
obligation of NationsBank to fund the Swing Line shall cease upon the
earlier of (i) the occurrence of a Default, or (ii) the Revolving
Credit Termination Date; provided that when a Default is no longer
continuing NationsBank shall be obligated to provide Swing Line Loans
provided all other conditions to making Loans are satisfied.
37
ARTICLE III
LETTERS OF CREDIT
III.1. LETTERS OF CREDIT. The Issuing Bank agrees, subject to the terms
and conditions of this Agreement, upon request of the Borrower or the Borrower
and any Guarantor to issue from time to time for the account of the Borrower or
Guarantor Letters of Credit upon delivery to the Issuing Bank of an Application
and Agreement for Letter of Credit relating thereto in form and content
acceptable to the Issuing Bank; PROVIDED, that (i) the Borrower is in compliance
with all the conditions to the making of Revolving Loans set forth in this
Agreement; (ii) the Letter of Credit Outstandings shall not exceed the Total
Letter of Credit Commitment and (iii) no Letter of Credit shall be issued if,
after giving effect thereto, Letter of Credit Outstandings plus Revolving Credit
Outstandings plus Swing Line Outstandings shall exceed the Total Revolving
Credit Commitment. No Letter of Credit shall have an expiry date (including all
rights of the Borrower or any Guarantor or any beneficiary named in such Letter
of Credit to require renewal) or payment date occurring later than the earlier
to occur of one year after the date of its issuance or the fifth Business Day
prior to the Stated Termination Date.
III.2. REIMBURSEMENT.
(a) The Borrower hereby unconditionally agrees to pay to the
Issuing Bank immediately on demand at the Principal Office all amounts required
to pay all drafts (or purported drafts) drawn under the Letters of Credit
(including any Letter of Credit issued for the account of any Guarantor) and all
reasonable expenses incurred by the Issuing Bank in connection with draws made
under the Letters of Credit (including any Letter of Credit issued for the
account of any Guarantor), and in any event and without demand to place in
possession of the Issuing Bank (which shall include Advances under the Revolving
Credit Facility if permitted by SECTION 2.1 and Swing Line Loans if permitted by
SECTION 2.13) sufficient funds to pay all debts and liabilities arising under
any Letter of Credit (including any Letter of Credit issued for the account of
any Guarantor). The Issuing Bank agrees to give the Borrower prompt notice of
any request for a draw under a Letter of Credit. The Issuing Bank may charge any
account the Borrower may have with it for any and all amounts the Issuing Bank
pays under a Letter of Credit, plus charges and reasonable expenses as from time
to time agreed to by the Issuing Bank and the Borrower; provided that to the
extent permitted by SECTION 2.1(C)(IV) and SECTION 2.13, amounts shall be paid
pursuant to Advances under the Revolving Credit Facility or, if the Borrower
shall elect, by Swing Line Loans. The Borrower agrees to pay the Issuing Bank
interest on any Reimbursement Obligations not paid when due hereunder at the
Base Rate plus two percent (2.0%), or the maximum rate permitted by applicable
law, if lower, such rate to be calculated on the basis of a year of 360 days for
actual days elapsed.
(b) In accordance with the provisions of SECTION 2.1(C), the
Issuing Bank shall notify the Agent of any drawing under any Letter of Credit
promptly following the receipt by the Issuing Bank of such drawing.
38
(c) Each Lender (other than the Issuing Bank) shall
automatically acquire on the date of issuance thereof, a Participation in the
liability of the Issuing Bank in respect of each Letter of Credit in an amount
equal to such Lender's Applicable Commitment Percentage of such liability, and
to the extent that the Borrower is obligated to pay the Issuing Bank under
SECTION 3.2(A), each Lender (other than the Issuing Bank) thereby shall
absolutely, unconditionally and irrevocably assume, and shall be unconditionally
obligated to pay to the Issuing Bank as hereinafter described, its Applicable
Commitment Percentage of the liability of the Issuing Bank under such Letter of
Credit.
(i) Each Lender (including the Issuing Bank in its
capacity as a Lender) shall, subject to the terms and conditions of
ARTICLE II, pay to the Agent for the account of the Issuing Bank at the
Principal Office in Dollars and in immediately available funds, an
amount equal to its Applicable Commitment Percentage of any drawing
under a Letter of Credit, such funds to be provided in the manner
described in SECTION 2.1(C)(IV).
(ii) Simultaneously with the making of each payment
by a Lender to the Issuing Bank pursuant to SECTION 2.1(C)(IV)(B), such
Lender shall, automatically and without any further action on the part
of the Issuing Bank or such Lender, acquire a Participation in an
amount equal to such payment (excluding the portion thereof
constituting interest accrued prior to the date the Lender made its
payment) in the related Reimbursement Obligation of the Borrower. The
Reimbursement Obligations of the Borrower shall be immediately due and
payable whether by Advances made in accordance with SECTION 2.1(C)(IV),
Swing Line Loans made in accordance with SECTION 2.13, or otherwise.
(iii) Each Lender's obligation to make payment to the
Agent for the account of the Issuing Bank pursuant to SECTION
2.1(C)(IV) and this SECTION 3.2(C), and the right of the Issuing Bank
to receive the same, shall be absolute and unconditional, shall not be
affected by any circumstance whatsoever and shall be made without any
offset, abatement, withholding or reduction whatsoever. If any Lender
is obligated to pay but does not pay amounts to the Agent for the
account of the Issuing Bank in full upon such request as required by
SECTION 2.1(C)(IV) or this SECTION 3.2(C), such Lender shall, on
demand, pay to the Agent for the account of the Issuing Bank interest
on the unpaid amount for each day during the period commencing on the
date of notice given to such Lender pursuant to SECTION 2.1(C) until
such Lender pays such amount to the Agent for the account of the
Issuing Bank in full at the interest rate per annum for overnight
borrowing by the Agent from the Federal Reserve Bank.
(iv) In the event the Lenders have acquired
Participations in any Reimbursement Obligation as set forth in clause
(ii) above, then at any time payment (in fully collected, immediately
available funds) of such Reimbursement Obligation, in whole or in part,
is received by Issuing Bank from the Borrower, Issuing Bank shall
promptly pay to each Lender an amount equal to its Applicable
Commitment Percentage of such payment from the Borrower.
39
(d) Promptly following the end of each calendar quarter, the
Issuing Bank shall deliver to the Agent a notice describing the aggregate
undrawn amount of all Letters of Credit at the end of such quarter. Upon the
request of any Lender from time to time, the Issuing Bank shall deliver to the
Agent, and the Agent shall deliver to such Lender, any other information
reasonably requested by such Lender with respect to each Letter of Credit
outstanding.
(e) The issuance by the Issuing Bank of each Letter of Credit
shall, in addition to the conditions precedent set forth in ARTICLE V, be
subject to the conditions that such Letter of Credit be in such form and contain
such terms as shall be reasonably satisfactory to the Issuing Bank consistent
with the then current practices and procedures of the Issuing Bank with respect
to similar letters of credit, and the Borrower shall have executed and delivered
such other instruments and agreements relating to such Letters of Credit as the
Issuing Bank shall have reasonably requested consistent with such practices and
procedures and shall not be in conflict with any of the express terms herein
contained. All Letters of Credit shall be issued pursuant to and subject to the
Uniform Customs and Practice for Documentary Credits, 1993 revision,
International Chamber of Commerce Publication No. 500 and all subsequent
amendments and revisions thereto.
(f) The Borrower agrees that Issuing Bank may, in its sole
discretion, accept or pay, as complying with the terms of any Letter of Credit,
any drafts or other documents otherwise in order which may be signed or issued
by an administrator, executor, trustee in bankruptcy, debtor in possession,
assignee for the benefit of creditors, liquidator, receiver, attorney in fact or
other legal representative of a party who is authorized under such Letter of
Credit to draw or issue any drafts or other documents.
(g) Without limiting the generality of the provisions of
SECTION 11.9, the Borrower hereby agrees to indemnify and hold harmless the
Issuing Bank, each other Lender and the Agent from and against any and all
claims and damages, losses, liabilities, reasonable costs and expenses which the
Issuing Bank, such other Lender or the Agent may incur (or which may be claimed
against the Issuing Bank, such other Lender or the Agent) by any Person by
reason of or in connection with the issuance or transfer of or payment or
failure to pay under any Letter of Credit; provided that the Borrower shall not
be required to indemnify the Issuing Bank, any other Lender or the Agent for any
claims, damages, losses, liabilities, costs or expenses to the extent, but only
to the extent, (i) caused by the willful misconduct or gross negligence of the
party to be indemnified or (ii) caused by the failure of the Issuing Bank to pay
under any Letter of Credit after the presentation to it of a request for payment
strictly complying with the terms and conditions of such Letter of Credit,
unless such payment is prohibited by any law, regulation, court order or decree.
The indemnification and hold harmless provisions of this SECTION 3.2(G) shall
survive repayment of the Obligations, occurrence of the Revolving Credit
Termination Date and expiration or termination of this Agreement.
(h) Without limiting Borrower's rights as set forth in SECTION
3.2(G), the obligation of the Borrower to immediately reimburse the Issuing Bank
for drawings made under Letters of Credit and the Issuing Bank's right to
receive such payment shall be absolute, unconditional and irrevocable, and that
such obligations of the Borrower shall be performed strictly in accordance with
the terms of this Agreement and such Letters of Credit and the related
40
Applications and Agreement for any Letter of Credit, under all circumstances
whatsoever, including the following circumstances:
(i) any lack of validity or enforceability of the
Letter of Credit, the obligation supported by the Letter of Credit or
any other agreement or instrument relating thereto (collectively, the
"Related LC Documents");
(ii) any amendment or waiver of or any consent to or
departure from all or any of the Related LC Documents;
(iii) the existence of any claim, setoff, defense
(other than the defense of payment in accordance with the terms of this
Agreement) or other rights which the Borrower may have at any time
against any beneficiary or any transferee of a Letter of Credit (or any
persons or entities for whom any such beneficiary or any such
transferee may be acting), the Agent, the Lenders or any other Person,
whether in connection with the Loan Documents, the Related LC Documents
or any unrelated transaction;
(iv) any breach of contract or other dispute between
the Borrower and any beneficiary or any transferee of a Letter of
Credit (or any persons or entities for whom such beneficiary or any
such transferee may be acting), the Agent, the Lenders or any other
Person;
(v) any draft, statement or any other document
presented under the Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect whatsoever;
(vi) any delay, extension of time, renewal,
compromise or other indulgence or modification granted or agreed to by
the Agent, with or without notice to or approval by the Borrower in
respect of any of Borrower's Obligations under this Agreement; or
(vii) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing.
III.3. LETTER OF CREDIT FACILITY FEES. The Borrower shall pay to the
Agent, for the pro rata benefit of the Lenders based on their Applicable
Commitment Percentages, a fee on the aggregate amount available to be drawn on
each outstanding Letter of Credit at a rate equal to the Applicable Margin for
Eurodollar Rate Loans. In addition, the Borrower shall pay to NationsBank a fee
equal to one-eighth of one percent (1/8%) per annum of Letter of Credit
Outstandings. Such fees shall be due with respect to each Letter of Credit
quarterly in arrears on the last day of each June, September, December and
March, the first such payment to be made on the first such date occurring after
the date of issuance of a Letter of Credit. The fees described in this SECTION
3.3 shall be calculated on the basis of a year of 360 days for the actual number
of days elapsed.
III.4. ADMINISTRATIVE FEES. The Borrower shall pay to the Issuing Bank
such administrative fee and other similar fees, if any, in connection with the
Letters of Credit in such amounts and at such times as the Issuing Bank and the
Borrower shall agree from time to time.
42
ARTICLE IV
YIELD PROTECTION AND ILLEGALITY
IV.1. INCREASED COST AND REDUCED RETURN.
(a) If, after the date hereof, the adoption of any applicable law,
rule, or regulation, or any change in any applicable law, rule, or regulation,
or any change in the interpretation or administration thereof by any
governmental authority, central bank, or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or its
Applicable Lending Office) with any request or directive (whether or not having
the force of law) of any such governmental authority, central bank, or
comparable agency:
(i) shall subject such Lender (or its Applicable Lending
Office) to any tax, duty, or other charge with respect to any
Eurodollar Rate Loans, its Note, or its obligation to make Eurodollar
Rate Loans, or change the basis of taxation of any amounts payable to
such Lender (or its Applicable Lending Office) under this Agreement or
its Note in respect of any Eurodollar Rate Loans (other than taxes
imposed on the overall net income of such Lender by the jurisdiction in
which such Lender has its principal office or such Applicable Lending
Office);
(ii) shall impose, modify, or deem applicable any
reserve, special deposit, assessment, or similar requirement (other
than the Reserve Requirement utilized in the determination of the
Eurodollar Rate) relating to any extensions of credit or other assets
of, or any deposits with or other liabilities or commitments of, such
Lender (or its Applicable Lending Office), including the Revolving
Credit Commitment of such Lender hereunder; or
(iii) shall impose on such Lender (or its Applicable
Lending Office) or on the London interbank market any other condition
affecting this Agreement or its Note or any of such extensions of
credit or liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such Lender
(or its Applicable Lending Office) of making, Converting into, Continuing, or
maintaining any Eurodollar Rate Loans or to reduce any sum received or
receivable by such Lender (or its Applicable Lending Office) under this
Agreement or its Note with respect to any Eurodollar Rate Loans, then the
Borrower shall pay to such Lender on demand such amount or amounts as will
compensate such Lender for such increased cost or reduction. If any Lender
requests compensation by the Borrower under this SECTION 4.1(A), the Borrower
may, by notice to such Lender (with a copy to the Agent), suspend the obligation
of such Lender to make or Continue Loans of the Type with respect to which such
compensation is requested, or suspend the obligation of such Lender to Convert
Loans of any other Type into Loans of such Type, until the event or condition
giving rise to such request ceases to be in effect (in which case the provisions
of SECTION 4.4 shall be applicable); PROVIDED that such suspension shall not
affect the right of such Lender to receive the compensation so requested.
43
(b) If, after the date hereof, any Lender shall have determined that
the adoption of any applicable law, rule, or regulation regarding capital
adequacy or any change therein or in the interpretation or administration
thereof by any governmental authority, central bank, or comparable agency
charged with the interpretation or administration thereof, or compliance by any
Lender (or its Applicable Lending Office) with any request or directive
regarding capital adequacy (whether or not having the force of law) of any such
governmental authority, central bank, or comparable agency, has or would have
the effect of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of such Lender's
obligations hereunder to a level below that which such Lender or such
corporation could have achieved but for such adoption, change, request, or
directive (taking into consideration its policies with respect to capital
adequacy), then from time to time upon demand the Borrower shall pay to such
Lender such additional amount or amounts as will compensate such Lender for such
reduction when such reduction occurs.
(c) Each Lender shall promptly notify the Borrower and the Agent of any
event of which it has knowledge, occurring after the date hereof, which will
entitle such Lender to compensation pursuant to this SECTION 4.1 and will
designate a different Applicable Lending Office if such designation will avoid
the need for, or reduce the amount of, such compensation and will not, in the
judgment of such Lender, be otherwise disadvantageous to it. Any Lender claiming
compensation under this SECTION 4.1 shall furnish to the Borrower and the Agent
a statement setting forth the additional amount or amounts to be paid to it
hereunder which shall be conclusive in the absence of manifest error. In
determining such amount, such Lender may use any reasonable averaging and
attribution methods.
4.2. LIMITATION ON TYPES OF LOANS. If on or prior to the first day of
any Interest Period for any Eurodollar Rate Loan:
(a) the Agent determines (which determination shall be
conclusive) that by reason of circumstances affecting the relevant
market, adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate for such Interest Period; or
(b) the Required Lenders determine (which determination shall
be conclusive) and notify the Agent that the Eurodollar Rate will not
adequately and fairly reflect the cost to the Lenders of funding
Eurodollar Rate Loans for such Interest Period;
then the Agent shall give the Borrower prompt notice thereof specifying the
relevant Type of Loans and the relevant amounts or periods, and so long as such
condition remains in effect, the Lenders shall be under no obligation to make
additional Loans of such Type, Continue Loans of such Type, or to Convert Loans
of any other Type into Loans of such Type and the Borrower shall, on the last
day(s) of the then current Interest Period(s) for the outstanding Loans of the
affected Type, either prepay such Loans or Convert such Loans into another Type
of Loan in accordance with the terms of this Agreement.
4.3. ILLEGALITY. Notwithstanding any other provision of this Agreement,
in the event that it becomes unlawful for any Lender or its Applicable Lending
Office to make, maintain, or fund
44
Eurodollar Rate Loans hereunder, then such Lender shall promptly notify the
Borrower thereof and such Lender's obligation to make or Continue Eurodollar
Rate Loans and to Convert other Types of Loans into Eurodollar Rate Loans shall
be suspended from the time of such notice, or, if later, the time such Loan
becomes unlawful, until such time as such Lender may again make, maintain, and
fund Eurodollar Rate Loans (in which case the provisions of SECTION 4.4 shall be
applicable).
4.4. TREATMENT OF AFFECTED LOANS. If the obligation of any Lender to
make a Eurodollar Rate Loan or to Continue, or to Convert Loans of any other
Type into, Loans of a particular Type shall be suspended pursuant to SECTION 4.1
OR 4.3 hereof (Loans of such Type being herein called "Affected Loans" and such
Type being herein called the "Affected Type"), such Lender's Affected Loans
shall be automatically Converted into Base Rate Loans on the last day(s) of the
then current Interest Period(s) for Affected Loans (or, in the case of a
Conversion required by SECTION 4.3 hereof, on such earlier date as such Lender
may specify to the Borrower with a copy to the Agent, but not earlier than the
date such Loan becomes unlawful, in the case of a Conversion pursuant to SECTION
4.3) and, unless and until such Lender gives notice as provided below that the
circumstances specified in SECTION 4.1 OR 4.3 hereof that gave rise to such
Conversion no longer exist:
(a) to the extent that such Lender's Affected Loans have been
so Converted, all payments and prepayments of principal that would
otherwise be applied to such Lender's Affected Loans shall be applied
instead to its Base Rate Loans; and
(b) all Loans that would otherwise be made or Continued by
such Lender as Loans of the Affected Type shall be made or Continued
instead as Base Rate Loans, and all Loans of such Lender that would
otherwise be Converted into Loans of the Affected Type shall be
Converted instead into (or shall remain as) Base Rate Loans.
If such Lender gives notice to the Borrower (with a copy to the Agent) that the
circumstances specified in SECTION 4.1 OR 4.3 hereof that gave rise to the
Conversion of such Lender's Affected Loans pursuant to this SECTION 4.4 no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Loans of the Affected Type made by other
Lenders are outstanding, such Lender's Base Rate Loans shall be automatically
Converted, on the first day(s) of the next succeeding Interest Period(s) for
such outstanding Loans of the Affected Type, to the extent necessary so that,
after giving effect thereto, all Loans held by the Lenders holding Loans of the
Affected Type and by such Lender are held pro rata (as to principal amounts,
Types, and Interest Periods) in accordance with their respective Revolving
Credit Commitments.
4.5. COMPENSATION. Upon the request of any Lender, the Borrower shall
pay to such Lender such amount or amounts as shall be sufficient (in the
reasonable opinion of such Lender) to compensate it for any loss, cost, or
expense (including loss of profits that would have been realized but for the
following) incurred by it as a result of:
(a) any payment, prepayment, or Conversion of a Eurodollar
Rate Loan for any reason (including, without limitation, the
acceleration of the Loans pursuant to SECTION 9.1) on a date other than
the last day of the Interest Period for such Loan; or
45
(b) any failure by the Borrower for any reason (including,
without limitation, the failure of any condition precedent specified in
ARTICLE V to be satisfied) to borrow, Convert, Continue, or prepay a
Eurodollar Rate Loan on the date for such borrowing, Conversion,
Continuation, or prepayment specified in the relevant notice of
borrowing, prepayment, Continuation, or Conversion under this
Agreement.
4.6. TAXES. (a) Any and all payments by the Borrower to or for the
account of any Lender or the Agent hereunder or under any other Loan 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 and
the Agent, 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 (as the case may be) is organized or is located 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 the Borrower shall be required by law to deduct any
Taxes from or in respect of any sum payable under this Agreement or any other
Loan Document to any Lender or the Agent, (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 4.6) such Lender or the
Agent receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions, (iii) the
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law, and (iv) the Borrower
shall furnish to the Agent, at its address referred to in SECTION 11.2, 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 Agreement
or any other Loan Document or from the execution or delivery of, or otherwise
with respect to, this Agreement or any other Loan Document (hereinafter referred
to as "Other Taxes").
(c) The Borrower agrees to indemnify each Lender and the Agent 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 4.6) paid by such Lender or the Agent (as the case may be) and any
liability (including penalties, interest, and expenses) arising therefrom or
with respect thereto.
(d) Each Lender organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of this
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
1001 or 4224, as appropriate, or any successor form prescribed by the Internal
46
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 the rate
of withholding tax on payments of interest or certifying that the income
receivable pursuant to this 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 (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 or a reduced rate of tax on payments pursuant to this Agreement
or any of the other Loan 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 4.6(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 4.6(A) OR
4.6(B) OR 4.6(C) with respect to Taxes imposed by the United States; PROVIDED,
HOWEVER, that should a Lender, which is otherwise exempt from or subject to a
reduced rate of 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 the Borrower is required to pay additional amounts to or for the
account of any Lender pursuant to this SECTION 4.6, 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) Within thirty (30) days after the date of any payment of Taxes, the
Borrower shall furnish to the Agent the original or a certified copy of a
receipt evidencing such payment.
(h) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this SECTION 4.6 shall survive the termination of THE Revolving Credit
Commitments and the payment in full of the Notes.
4.7. REPLACEMENT LENDER. The Borrower may, in its sole discretion, on
10 Business Days' prior written notice to the Agent and a Lender (except in the
case of the replacement of a Lender after notice from such Lender to the
Borrower pursuant to SECTION 4.3, in which case no prior notice from the
Borrower is required), cause a Lender who has incurred increased costs to (and
such Lender shall) assign, pursuant to SECTION 11.1, all of its rights and
obligations under this Agreement to an Eligible Assignee designated by the
Borrower which is willing to become a Lender for a purchase price equal to the
outstanding principal amount of the Loans payable to such Lender plus any
accrued but unpaid interest on such Loans, any accrued but unpaid fees with
respect to such Lender's Revolving Credit Commitment and any other amount
payable to such Lender under this Agreement; provided, that any expenses or
other amounts which would be owing to such Lender pursuant to any
indemnification provision hereof (including, if applicable, SECTION 4.5) shall
be payable by the Borrower as if the Borrower had prepaid the
47
Loans of such Lender rather than such Lender having assigned its interest
hereunder. The Borrower shall pay the applicable processing fee under SECTION
11.1.
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ARTICLE V
CONDITIONS TO MAKING LOANS
V.1. CONDITIONS OF INITIAL ADVANCE. The obligation of the Lenders to
make the initial Advance under the Revolving Credit Facility, and of the Issuing
Bank to issue any Letter of Credit and of NationsBank to make any Swing Line
Loan, is subject to the conditions precedent that:
(a) the Agent shall have received on the Closing Date, in form
and substance satisfactory to the Agent and Lenders, the following:
(i) executed originals of each of this Agreement,
the Notes, the initial Facility Guaranties and the other Loan
Documents, together with all schedules and exhibits thereto;
(ii) the favorable written opinion or opinions with
respect to the Loan Documents and the transactions
contemplated thereby of Xxxxx and Xxx Xxxxx PLLC, special
counsel to the Credit Parties, dated the Closing Date,
addressed to the Agent and the Lenders and satisfactory to
Xxxxx Xxxxx Mulliss & Xxxxx, L.L.P., special counsel to the
Agent, substantially in the form of EXHIBIT G;
(iii) resolutions of the boards of directors or other
appropriate governing body (or of the appropriate committee
thereof) of each Credit Party certified by its secretary or
assistant secretary as of the Closing Date, approving and
adopting the Loan Documents to be executed by such Person, and
authorizing the execution and delivery thereof;
(iv) specimen signatures of officers of each Credit
Party executing the Loan Documents on behalf of such Credit
Party, certified by the secretary or assistant secretary of
such Credit Party;
(v) certificate of the secretary or assistant
secretary of each Credit Party as to the charter documents of
such Credit Party;
(vi) certificate of the secretary or assistant
secretary of each Credit Party as to the bylaws of such Credit
Party;
(vii) certificates issued as of a recent date by the
Secretaries of State of the respective jurisdictions of
formation of each Credit Party as to the due existence and
good standing of each Credit Party;
(viii) notice of appointment of the initial Authorized
Representative(s) if any change from that previously delivered
pursuant to the Existing Agreement;
49
(ix) certificate of an Authorized Representative
dated the Closing Date demonstrating compliance with the
financial covenants contained in SECTIONS 8.1(A) through
8.1(D), 8.2, 8.3 AND 8.9 as of the most recent fiscal quarter
end, substantially in the form of EXHIBIT H;
(x) evidence of all insurance required by the Loan
Documents;
(xi) an initial Borrowing Notice, if any, and, if
elected by the Borrower, Interest Rate Selection Notice;
(xiii) certificate of an officer of the Borrower as
to the Distribution Agreements delivered pursuant to SECTION
5.1(A)(XIII) of the Existing Agreement, that the Distribution
Agreements remain in full force and effect, together with
evidence satisfactory to the Agent that no default exists
under the Distribution Agreements;
(xiv) certificate of an officer of the Borrower as
to any agreements among the Borrower and any of its
shareholders relating to the purchase or sale of capital stock
of the Borrower (other than pursuant to the Watsco, Inc.
Profit Sharing Retirement Plan & Trust, the Watsco, Inc. 1991
Stock Option Plan, the Watsco, Inc. 1983 Stock Option Plan
or the Watsco, Inc. Qualified Employee Stock Purchase Plan);
(xv) evidence that all fees payable by the Borrower
on the Closing Date to the Agent, NCMI and the Lenders have
been paid in full;
(xvi) such other documents, instruments,
certificates and opinions as the Agent or any Lender may
reasonably request on or prior to the Closing Date in
connection with the consummation of the transactions
contemplated hereby; and
(b) In the good faith judgment of the Agent and the Lenders:
(i) there shall not have occurred or become known
to the Agent or the Lenders any event, condition, situation or
status since the date of the information contained in the
Prospectus that has had or could reasonably be expected to
result in a Material Adverse Effect;
(ii) no litigation, action, suit, investigation or
other arbitral, administrative or judicial proceeding shall be
pending or threatened which could reasonably be likely to
result in a Material Adverse Effect; and
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(iii) the Borrower and its Subsidiaries shall have
received all approvals, consents and waivers, and shall have
made or given all necessary filings and notices as shall be
required to consummate the transactions contemplated hereby
without the occurrence of any default under, conflict with or
violation of (A) any applicable law, rule, regulation, order
or decree of any Governmental Authority or arbitral authority
or (B) any agreement, document or instrument to which any of
the Borrower or any Subsidiary is a party or by which any of
them or their properties is bound.
V.2. CONDITIONS OF LOANS AND LETTERS OF CREDIT. The obligations of the
Lenders to make any Loans hereunder and the Issuing Bank to issue Letters of
Credit and NationsBank to make Swing Line Loans on or subsequent to the Closing
Date are subject to the satisfaction of the following conditions:
(a) the Agent, or NationsBank in the case of Swing Line Loans,
shall have received a Borrowing Notice if required by ARTICLE II;
(b) the representations and warranties of the Borrower and the
Subsidiaries set forth in ARTICLE VI and in each of the other Loan
Documents shall be true and correct in all material respects on and as
of the date of such Advance, Swing Line Loan or Letter of Credit
issuance or renewal, with the same effect as though such
representations and warranties had been made on and as of such date,
except to the extent that such representations and warranties expressly
relate to an earlier date and except that the financial statements
referred to in SECTION 6.6(A)(I) shall be deemed to be those financial
statements most recently delivered to the Agent and the Lenders
pursuant to SECTION 7.1 from the date financial statements are
delivered to the Agent and the Lenders in accordance with such Section.
(c) in the case of the issuance of a Letter of Credit, the
Borrower shall have executed and delivered to the Issuing Bank an
Application and Agreement for Letter of Credit in form and content
acceptable to the Issuing Bank together with such other instruments and
documents as it shall request in accordance with the terms hereof;
(d) at the time of (and after giving effect to) each Advance,
Swing Line Loan or the issuance of a Letter of Credit, no Default or
Event of Default specified in ARTICLE IX shall have occurred and be
continuing; and
(e) immediately after giving effect to:
(i) a Revolving Loan, the aggregate principal balance
of all outstanding Revolving Loans for each Lender
shall not exceed such Lender's Revolving Credit
Commitment;
51
(ii) a Letter of Credit or renewal thereof, the
aggregate principal balance of all outstanding
Participations in Letters of Credit and Reimbursement
Obligations (or in the case of the Issuing Bank, its
remaining interest after deduction of all
Participations in Letters of Credit and Reimbursement
Obligations of other Lenders) (x) for each Lender
shall not exceed such Lender's Letter of Credit
Commitment or (Y) for all Lenders in the aggregate
shall not exceed the Total Letter of Credit
Commitment;
(iii) a Swing Line Loan, the Swing Line Outstandings
shall not exceed $15,000,000; and
(iv) a Revolving Loan, Swing Line Loan or a Letter of
Credit or renewal thereof, the sum of the
Outstandings shall not exceed the Total Revolving
Credit Commitment.
52
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants with respect to itself and to its
Subsidiaries (which representations and warranties shall survive the delivery of
the documents mentioned herein, including the Loan Documents, and the making of
Loans), that:
VI.1. ORGANIZATION AND AUTHORITY.
(a) The Borrower and each Subsidiary is a corporation duly
organized and validly existing under the laws of the jurisdiction of
its formation;
(b) The Borrower and each Subsidiary (x) has the requisite
corporate power and authority to own its properties and assets and to
carry on its business as now being conducted and as contemplated in the
Loan Documents, and (y) is qualified to do business in every
jurisdiction in which failure so to qualify would have a Material
Adverse Effect;
(c) The Borrower has the corporate power and authority to
execute, deliver and perform this Agreement and the Notes, and to
borrow hereunder, and to execute, deliver and perform each of the other
Loan Documents to which it is a party;
(d) Each Credit Party other than the Borrower has the
corporate power and authority to execute, deliver and perform the
Facility Guaranty and each of the other Loan Documents to which it is a
party; and
(e) When executed and delivered, each of the Loan Documents to
which the Borrower or any other Credit Party is a party will be the
legal, valid and binding obligation or agreement, as the case may be,
of the Borrower or such Credit Party, enforceable against the Borrower
or such Credit Party in accordance with its terms, subject to the
effect of any applicable bankruptcy, moratorium, insolvency,
reorganization or other similar law affecting the enforceability of
creditors' rights generally and to the effect of general principles of
equity (whether considered in a proceeding at law or in equity);
VI.2. LOAN DOCUMENTS. The execution, delivery and performance by the
Borrower and each other Credit Party of each of the Loan Documents to which it
is a party:
(a) have been duly authorized by all requisite corporate
action (including any required shareholder approval) of the Borrower
and each other Credit Party required for the lawful execution, delivery
and performance thereof;
53
(b) do not violate any provisions of (i) applicable law, rule
or regulation, (ii) any judgment, writ, order, determination, decree or
arbitral award of any Governmental Authority or arbitral authority
binding on the Borrower or any Subsidiary or its properties, or (iii)
the charter documents or bylaws of the Borrower or any other Credit
Party;
(c) does not and will not be in conflict with, result in a
breach of or constitute an event of default, or an event which, with
notice or lapse of time or both, would constitute an event of default,
under any contract, indenture, agreement or other instrument or
document to which Borrower or any other Credit Party is a party, or by
which the properties or assets of Borrower or any other Credit Party
are bound; and
(d) does not and will not result in the creation or imposition
of any Lien upon any of the properties or assets of Borrower or any
other Credit Party;
VI.3. SOLVENCY. The Borrower and each other Credit Party is and will be
Solvent after giving effect to the transactions contemplated by the Loan
Documents;
VI.4. SUBSIDIARIES AND STOCKHOLDERS. The Borrower has no Subsidiaries
other than those Persons listed as Subsidiaries in SCHEDULE 6.4 and additional
Subsidiaries created or acquired after the Closing Date in compliance with
SECTION 7.19; SCHEDULE 6.4 states as of the date hereof the organizational form
of each Subsidiary, the authorized and issued capitalization of each Subsidiary
listed thereon, the number of shares or other equity interests of each class of
capital stock or interest issued and outstanding of each such Subsidiary and the
number and/or percentage of outstanding shares or other equity interest
(including options, warrants and other rights to acquire any interest) of each
such class of capital stock or other equity interest owned by Borrower or by any
such Subsidiary; the outstanding shares or other equity interests of each such
Subsidiary have been duly authorized and validly issued and are fully paid and
nonassessable; and Borrower and each such Subsidiary owns beneficially and of
record all the shares and other interests it is listed as owning in SCHEDULE
6.4, free and clear of any Lien;
VI.5. OWNERSHIP INTERESTS. Borrower owns no equity investments in any
Person other than the Persons listed in SCHEDULE 6.4, equity investments in
Persons not constituting Subsidiaries permitted under SECTION 8.7 and additional
Subsidiaries created or acquired after the Closing Date in compliance with
SECTION 7.19. Borrower does not have any obligation to purchase capital stock of
Rheem.
VI.6. FINANCIAL CONDITION.
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(a) The Borrower has heretofore furnished to each Lender an
audited consolidated balance sheet of the Borrower and its Subsidiaries
as at December 31, 1996 and the notes thereto and the related
consolidated statements of income, shareholders' equity and cash flows
for the Fiscal Year then ended as examined and certified by Xxxxxx
Xxxxxxxx LLP, and unaudited consolidated interim financial statements
of the Borrower and its Subsidiaries consisting of a consolidated
balance sheet and related consolidated statements of income,
shareholders' equity and cash flows, in each case with the notes
related thereto, for and as of the end of the three month period ending
March 31, 1997. Except as set forth therein, such financial statements
(including the notes thereto) present fairly the consolidated financial
condition of the Borrower and its Subsidiaries as of the end of such
Fiscal Year and three month period and results of their consolidated
operations and the changes in its consolidated stockholders' equity for
the Fiscal Year and interim period then ended, all in conformity with
GAAP applied on a Consistent Basis, subject however, in the case of
unaudited interim statements to year end audit adjustments;
(b) since March 31, 1997 there has been no material adverse
change in the condition, financial or otherwise, of the Borrower and
its Subsidiaries taken as a whole or in the businesses, properties,
performance, prospects or operations of the Borrower and its
Subsidiaries taken as a whole, nor have such businesses or properties
been materially adversely affected (taken as a whole) as a result of
any fire, explosion, earthquake, accident, strike, lockout, combination
of workers, flood, embargo or act of God; and
(c) except as set forth in the Prospectus, the financial
statements referred to in SECTION 6.6(A), or SCHEDULE 6.6 or permitted
by SECTION 8.5, neither Borrower nor any Subsidiary has incurred, other
than in the ordinary course of business or in connection with
Acquisitions permitted under SECTION 8.2, any Indebtedness, Contingent
Obligation or other commitment or liability which remains outstanding
or unsatisfied, which is material to Borrower and its Subsidiaries
taken as a whole;
VI.7. TITLE TO PROPERTIES. The Borrower and each of its Subsidiaries
and each other Credit Party has good and marketable title to all its real and
personal properties, subject to no transfer restrictions or Liens of any kind,
except for the transfer restrictions and Liens described in SCHEDULE 6.7 and
Liens permitted by SECTION 8.4;
VI.8. TAXES. Except as set forth in SCHEDULE 6.8, the Borrower and each
of its Subsidiaries has filed or caused to be filed all federal, state and local
tax returns which are required to be filed by it and, except for taxes and
assessments being contested in good faith by appropriate proceedings diligently
conducted and against which reserves reflected in the financial statements
described in SECTION 6.6(A) and satisfactory to the Borrower's independent
certified public accountants have been established, have paid or caused to be
paid all taxes as shown on said returns or on any assessment received by it, to
the extent that such taxes have become due;
55
VI.9. OTHER AGREEMENTS. Neither the Borrower nor any Subsidiary is
(a) a party to or subject to any judgment, order, decree,
agreement, lease or instrument, or subject to other restrictions, which
individually or in the aggregate could reasonably be expected to have a
Material Adverse Effect; or
(b) in default in the performance, observance or fulfillment
of any of the obligations, covenants or conditions contained in any
agreement or instrument to which the Borrower or any Subsidiary is a
party, which default has, or if not remedied within any applicable
grace period could reasonably be expected to have, a Material Adverse
Effect;
VI.10. LITIGATION. Except as set forth in SCHEDULE 6.10, there is no
action, suit, investigation or proceeding at law or in equity or by or before
any governmental instrumentality or agency or arbitral body pending, or, to the
best knowledge of the Borrower, threatened by or against the Borrower or any
Subsidiary or affecting the Borrower or any Subsidiary or any properties or
rights of the Borrower or any Subsidiary, which if adversely determined could
reasonably be expected to have a Material Adverse Effect;
VI.11. MARGIN STOCK. The proceeds of the borrowings made hereunder will
be used by the Borrower only for the purposes expressly authorized herein. None
of such proceeds will be used, directly or indirectly, for the purpose of
purchasing or carrying any margin stock or for the purpose of reducing or
retiring any Indebtedness which was originally incurred to purchase or carry
margin stock or for any other purpose which might constitute any of the Loans
under this Agreement a "purpose credit" within the meaning of said Regulation U
or Regulation X (12 C.F.R. Part 224) of the Board. Neither the Borrower nor any
agent acting in its behalf has taken or will take any action which might cause
this Agreement or any of the documents or instruments delivered pursuant hereto
to violate any regulation of the Board or to violate the Securities Exchange Act
of 1934, as amended, or the Securities Act of 1933, as amended, or any state
securities laws, in each case as in effect on the date hereof;
VI.12. INVESTMENT COMPANY. Neither the Borrower nor any other Credit
Party is an "investment company," or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company", as such terms are defined
in the Investment Company Act of 1940, as amended (15 U.S.C. ss. 80a-1, et
seq.). The application of the proceeds of the Loans and repayment thereof by the
Borrower and the performance by the Borrower and the other Credit Parties of the
transactions contemplated by the Loan Documents will not violate any provision
of said Act, or any rule, regulation or order issued by the Securities and
Exchange Commission thereunder, in each case as in effect on the date hereof;
VI.13. PATENTS, ETC. The Borrower and each Subsidiary owns or has the
right to use, under valid license agreements or otherwise, all material patents,
licenses, franchises, trademarks, trademark rights, trade names, trade name
rights, trade secrets and copyrights necessary to or used in the conduct of its
businesses as now conducted and as contemplated by
57
the Loan Documents, without known conflict with any patent, license, franchise,
trademark, trade secret, trade name, copyright, other proprietary right of any
other Person;
VI.14. NO UNTRUE STATEMENT. Neither (a) this Agreement nor any other
Loan Document or certificate or document executed and delivered by or on behalf
of the Borrower or any other Credit Party in accordance with or pursuant to any
Loan Document nor (b) any information provided to the Agent in connection with
the negotiation or preparation of the Loan Documents, including, without
limitation, the Prospectus, contains any misrepresentation or untrue statement
of material fact or omits to state a material fact necessary, in light of the
circumstance under which it was made, in order to make any such warranty,
representation or statement contained therein not misleading;
VI.15. NO CONSENTS, ETC. Neither the respective businesses or
properties of the Borrower or any Subsidiary, nor any relationship between the
Borrower or any Subsidiary and any other Person, nor any circumstance in
connection with the execution, delivery and performance of the Loan Documents
and the transactions contemplated thereby, is such as to require a consent,
approval or authorization of, or filing, registration or qualification with, any
Governmental Authority or any other Person on the part of the Borrower or any
Subsidiary as a condition to the execution, delivery and performance of, or
consummation of the transactions contemplated by the Loan Documents, which, if
not obtained or effected, would or could be reasonably likely to have a Material
Adverse Effect, or if so, such consent, approval, authorization, filing,
registration or qualification has been duly obtained or effected, as the case
may be;
VI.16. EMPLOYEE BENEFIT PLANS.
(a) The Borrower and each ERISA Affiliate is in compliance
with all applicable provisions of ERISA and the regulations and
published interpretations thereunder and in compliance with all Foreign
Benefit Laws with respect to all Employee Benefit Plans except for any
required amendments for which the remedial amendment period as defined
in Section 401(b) of the Code has not yet expired and except for
circumstances where the failure to comply could not reasonably be
expected to have a Material Adverse Effect. Each Employee Benefit Plan
that is intended to be qualified under Section 401(a) of the Code has
been determined by the Internal Revenue Service to be so qualified, and
each trust related to such plan has been determined to be exempt under
Section 501(a) of the Code. No material liability has been incurred by
the Borrower or any ERISA Affiliate which remains unsatisfied for any
taxes or penalties with respect to any Employee Benefit Plan or any
Multiemployer Plan;
(b) Neither the Borrower nor any ERISA Affiliate has (i)
engaged in a nonexempt prohibited transaction described in Section 4975
of the Code or Section 406 of ERISA affecting any of the Employee
Benefit Plans or the trusts created thereunder which could subject any
such Employee Benefit Plan or trust to a material tax or penalty on
prohibited transactions imposed under Internal Revenue Code Section
4975 or
57
ERISA, (ii) incurred any accumulated funding deficiency with
respect to any Employee Benefit Plan, whether or not waived, or any
other liability to the PBGC which remains outstanding, other than the
payment of premiums and there are no premium payments which are due and
unpaid which could reasonably be expected to have a Material Adverse
Effect, (iii) failed to make a required contribution or payment to a
Multiemployer Plan, or (iv) failed to make a required installment or
other required payment under Section 412 of the Code, Section 302 of
ERISA or the terms of such Employee Benefit Plan;
(c) No Termination Event has occurred or is reasonably
expected to occur with respect to any Pension Plan or Multiemployer
Plan, and neither the Borrower nor any ERISA Affiliate has incurred any
unpaid withdrawal liability with respect to any Multiemployer Plan;
(d) The present value of all vested accrued benefits under
each Employee Benefit Plan which is subject to Title IV of ERISA, did
not, as of the most recent valuation date for each such plan, exceed
the then current value of the assets of such Employee Benefit Plan
allocable to such benefits;
(e) To the best of the Borrower's knowledge, after due
inquiry, each Employee Benefit Plan subject to Title IV of ERISA,
maintained by the Borrower or any ERISA Affiliate, has been
administered in accordance with its terms in all respects and is in
compliance in all respects with all applicable requirements of ERISA
and other applicable laws, regulations and rules, except for
circumstances where the failure to comply or accord could not
reasonably be expected to have a Material Adverse Effect;
(f) The consummation of the Loans and the issuance of the
Letters of Credit provided for herein will not involve any prohibited
transaction under ERISA which is not subject to a statutory or
administrative exemption; and
(g) No material proceeding, claim, lawsuit and/or
investigation exists or, to the best knowledge of the Borrower after
due inquiry, is threatened concerning or involving any Employee Benefit
Plan;
VI.17. NO DEFAULT. As of the date hereof, there does not exist any
Default or Event of Default hereunder;
VI.18. HAZARDOUS MATERIALS. The Borrower and each Subsidiary is in
compliance with all applicable Environmental Laws in all material respects.
Neither the Borrower nor any Subsidiary has been notified of any action, suit,
proceeding or investigation which, and neither the Borrower nor any Subsidiary
is aware of any facts which, (i) calls into question, or could reasonably be
expected to call into question, compliance by the Borrower or any Subsidiary
with any Environmental Laws, (ii) which seeks, or could reasonably be expected
to form the basis of a meritorious proceeding, to suspend, revoke or terminate
any license, permit or approval
58
necessary for the generation, handling, storage, treatment or disposal of any
Hazardous Material, or (iii) seeks to cause, or could reasonably be expected to
form the basis of a meritorious proceeding to cause, any property of the
Borrower or any Subsidiary to be subject to any restrictions on ownership, use,
occupancy or transferability under any Environmental Law to which the Borrower
or such Subsidiary is not currently subject;
VI.19. EMPLOYMENT MATTERS. (a) Except as set forth in SCHEDULE 6.19,
none of the employees of the Borrower or any Subsidiary is subject to any
collective bargaining agreement and there are no strikes, work stoppages,
election or decertification petitions or proceedings, unfair labor charges,
equal opportunity proceedings, or other material labor/employee related
controversies or proceedings pending or, to the best knowledge of the Borrower,
threatened against the Borrower or any Subsidiary or between the Borrower or any
Subsidiary and any of its employees, other than employee grievances arising in
the ordinary course of business which could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect; and
(b) Except to the extent a failure to maintain compliance would not
have a Material Adverse Effect, the Borrower and each Subsidiary is in
compliance in all respects with all applicable laws, rules and regulations
pertaining to labor or employment matters, including without limitation those
pertaining to wages, hours, occupational safety and taxation and there is
neither pending or threatened any litigation, administrative proceeding nor, to
the knowledge of the Borrower, any investigation, in respect of such matters
which, if decided adversely, could or would reasonably be likely, individually
or in the aggregate, to have a Material Adverse Effect; and
VI.20. RICO. Neither the Borrower nor any Subsidiary is engaged in or
has engaged in any course of conduct that could or would reasonably be expected
to subject any of their respective properties to any Lien, seizure or other
forfeiture under any criminal law, racketeer influenced and corrupt
organizations law (civil or criminal) or other similar laws.
59
ARTICLE VII
AFFIRMATIVE COVENANTS
Until the Facility Termination Date, unless the Required Lenders shall
otherwise consent in writing, the Borrower will, and where applicable will cause
each Subsidiary to:
VII.1. FINANCIAL REPORTS, ETC. (a) As soon as practical and in any
event within 90 days after the end of each Fiscal Year of the Borrower, deliver
or cause to be delivered to the Agent (i) consolidated balance sheet of the
Borrower and its Subsidiaries as at the end of such Fiscal Year, and the notes
thereto, and the related consolidated statements of income, shareholders' equity
and cash flows, and the respective notes thereto, for such Fiscal Year, setting
forth comparative financial statements for the preceding Fiscal Year, all
prepared in accordance with GAAP applied on a Consistent Basis and containing,
with respect to the consolidated financial statements, opinions of Xxxxxx
Xxxxxxxx LLP, or other such independent certified public accountants selected by
the Borrower and acceptable to the Agent, which are unqualified as to the scope
of the audit performed and as to the "going concern" status of the Borrower and
without any exception not acceptable to the Lenders, and (ii) a certificate of
an Authorized Representative demonstrating compliance with SECTIONS 8.1(A)
through 8.1(D), 8.2, 8.3 and 8.9, which certificate shall be in the form of
EXHIBIT H;
(b) as soon as practical and in any event within 45 days after
the end of each fiscal quarter (except the last fiscal quarter of the Fiscal
Year), deliver to the Agent (i) consolidated balance sheets of the Borrower and
its Subsidiaries as at the end of such fiscal quarter, and the related
consolidated statements of income, shareholders' equity and cash flows for such
fiscal quarter and for the period from the beginning of the then current Fiscal
Year through the end of such reporting period, and accompanied by a certificate
of an Authorized Representative to the effect that such financial statements
present fairly the financial position of the Borrower and its Subsidiaries as of
the end of such fiscal period and the results of their operations and the
changes in their financial position for such fiscal period, in conformity with
the standards set forth in SECTION 6.6(A) with respect to interim financial
statements, and (ii) a certificate of an Authorized Representative containing
computations for such quarter comparable to that required pursuant to SECTION
7.1(A)(II);
(c) promptly upon their becoming available to the Borrower, the
Borrower shall deliver to the Agent a copy of (i) all regular or special reports
or effective registration statements which Borrower or any Subsidiary shall file
with the Securities and Exchange Commission (or any successor thereto) or any
securities exchange, (ii) any proxy statement distributed by the Borrower or any
Subsidiary to its shareholders, bondholders or the financial community in
general, and (iii) any management letters submitted to the Borrower or any
Subsidiary by independent accountants in connection with the annual audit of the
Borrower or any Subsidiary; and
60
(d) promptly, from time to time, deliver or cause to be delivered to
the Agent such other information regarding Borrower's and any Subsidiary's
operations, business affairs and financial condition as the Agent or any Lender
may reasonably request;
The Agent and the Lenders are hereby authorized to deliver a copy of
any such financial or other information delivered hereunder to the Lenders (or
any affiliate of any Lender) or to the Agent, to any Governmental Authority
having jurisdiction over the Agent or any of the Lenders pursuant to any written
request therefor or in the ordinary course of examination of loan files, or,
subject to Section 11.14 to any other Person who shall acquire or consider the
assignment of, or acquisition of any participation interest in, any Obligation
permitted by this Agreement.
VII.2. MAINTAIN PROPERTIES. Maintain all properties necessary to its
operations in good working order and condition, make all needed repairs,
replacements and renewals to such properties, and maintain free from Liens all
trademarks, trade names, patents, copyrights, trade secrets, know-how, and other
intellectual property and proprietary information (or adequate licenses
thereto), in each case as are reasonably necessary to conduct its business as
currently conducted or as contemplated hereby, all in accordance with customary
and prudent business practices.
VII.3. EXISTENCE, QUALIFICATION, ETC. Except as otherwise expressly
permitted under SECTION 8.8, do or cause to be done all things necessary to
preserve and keep in full force and effect its existence and all material rights
and franchises, and maintain its license or qualification to do business as a
foreign corporation and good standing in each jurisdiction in which its
ownership or lease of property or the nature of its business makes such license
or qualification necessary.
VII.4. REGULATIONS AND TAXES. Comply in all material respects with or
contest in good faith all statutes and governmental regulations and pay all
taxes, assessments, governmental charges, claims for labor, supplies, rent and
any other obligation which, if unpaid, would become a Lien against any of its
properties except liabilities being contested in good faith by appropriate
proceedings diligently conducted and against which adequate reserves acceptable
to the Borrower's independent certified public accountants have been established
unless and until any Lien resulting therefrom attaches to any of its property
and becomes enforceable against its creditors.
VII.5. INSURANCE. (a) Keep all of its insurable properties adequately
insured at all times with responsible insurance carriers against loss or damage
by fire and other hazards to the extent and in the manner as are customarily
insured against by similar businesses owning similarly situated properties, (b)
maintain general public liability insurance at all times with responsible
insurance carriers licensed in the state where the property is located against
liability on account of damage to persons and property, and (c) maintain
insurance under all applicable workers' compensation laws (or in the
alternative, maintain required reserves if self-insured for workers'
compensation purposes) and against loss by reason by business interruption such
policies of insurance to have such limits, deductibles, exclusions, co-insurance
and other provisions
61
providing no less coverages than that specified in SCHEDULE 7.5, such insurance
policies to be in form reasonably satisfactory to the Agent. Each of the
policies of insurance described in this SECTION 7.5 shall provide that the
insurer shall give the Agent not less than thirty (30) days' prior written
notice before any such policy shall be terminated, lapse or be altered in any
manner.
VII.6. TRUE BOOKS. Keep true books of record and account in which full,
true and correct entries will be made of all of its dealings and transactions in
accordance with GAAP, and set up on its books such reserves as may be required
by GAAP consistently applied with respect to doubtful accounts and all taxes,
assessments, charges, levies and claims and with respect to its business in
general, and include such reserves in interim as well as year-end financial
statements.
VII.7. RIGHT OF INSPECTION. Permit any Person designated by any Lender
or the Agent to visit and inspect any of the properties, corporate books and
financial reports of the Borrower or any Subsidiary and to discuss its affairs,
finances and accounts with its principal officers and independent certified
public accountants, all at reasonable times, at reasonable intervals and with
reasonable prior notice to the Borrower.
VII.8. OBSERVE ALL LAWS. Conform to and duly observe in all material
respects all laws, rules and regulations and all other valid requirements of any
Governmental Authority with respect to the conduct of its business.
VII.9. GOVERNMENTAL LICENSES. Obtain and maintain all licenses,
permits, certifications and approvals of all applicable Governmental Authorities
as are required for the conduct of its business as currently conducted and as
contemplated by the Loan Documents.
VII.10. COVENANTS EXTENDING TO OTHER PERSONS. Cause each of its
Subsidiaries to do with respect to itself, its business and its assets, each of
the things required of the Borrower in SECTIONS 7.2 through 7.9, and 7.18
inclusive.
VII.11. OFFICER'S KNOWLEDGE OF DEFAULT. Upon the Chief Executive
Officer, President, Vice President or Treasurer of the Borrower obtaining
knowledge of any Default or Event of Default hereunder or under any other
obligation of the Borrower or any other Credit Party to any Lender, cause such
officer or an Authorized Representative to promptly notify the Agent of the
nature thereof, the period of existence thereof, and what action the Borrower or
other Credit Party proposes to take with respect thereto.
VII.12. SUITS OR OTHER PROCEEDINGS. Upon the Chief Executive Officer,
President, Vice President or Treasurer of the Borrower obtaining knowledge of
any litigation or other proceedings being instituted by any Person against the
Borrower or any Subsidiary or other Credit Party, or any attachment, levy,
execution or other process being instituted against any assets of the Borrower
or any Subsidiary or other Credit Party, making a claim or claims in an
aggregate amount greater than $1,000,000 not otherwise covered by insurance,
promptly deliver
62
to the Agent written notice thereof stating the nature and status of such
litigation, dispute, proceeding, levy, execution or other process.
VII.13. NOTICE OF DISCHARGE OF HAZARDOUS MATERIAL OR ENVIRONMENTAL
COMPLAINT. Promptly provide to the Agent true, accurate and complete copies of
any and all notices, complaints, orders, directives, claims, or citations
received by the Borrower or any Subsidiary and of which the Chief Executive
Officer, President, Vice President or Treasurer is aware relating to any (a)
violation or alleged violation by the Borrower or any Subsidiary of any
applicable Environmental Law; (b) release or threatened release by the Borrower
or any Subsidiary, or at any facility or property owned or leased or operated by
the Borrower or any Subsidiary, of any Hazardous Material, except where
occurring legally; or (c) liability or alleged liability of the Borrower or any
Subsidiary for the costs of cleaning up, removing, remediating or responding to
a release of Hazardous Materials.
VII.14. ENVIRONMENTAL COMPLIANCE. If the Borrower or any Subsidiary
shall receive any letter, notice, complaint, order, directive, claim or citation
alleging that the Borrower or any Subsidiary has violated any Environmental Law
or is liable for the costs of cleaning up, removing, remediating or responding
to a release of Hazardous Materials, and Borrower or such Subsidiary is not
contesting such letter, notice, compliant, order, directive, claim or citation
by appropriate proceedings, the Borrower shall, within the time period permitted
by the applicable Environmental Law or the Governmental Authority responsible
for enforcing such Environmental Law, remove or remedy, or cause the applicable
Subsidiary to remove or remedy, such violation or release or satisfy such
liability as required by applicable Environmental Law.
VII.15. INDEMNIFICATION. Without limiting the generality of SECTION
11.9, the Borrower hereby agrees to indemnify and hold the Agent, the Lenders
and NCMI, and their respective officers, directors, employees and agents,
harmless from and against any and all claims, losses, penalties, liabilities,
damages and expenses (including reasonable assessment and cleanup costs and
reasonable attorneys' fees and disbursements) arising directly or indirectly
from, out of or by reason of (a) the violation of any Environmental Law by the
Borrower or any Subsidiary or with respect to any property owned, operated or
leased by the Borrower or any Subsidiary or (b) the handling, storage,
treatment, emission or disposal of any Hazardous Materials by or on behalf of
the Borrower or any Subsidiary or on or with respect to property owned or leased
or operated by the Borrower or any Subsidiary. The provisions of this SECTION
7.15 shall survive for a period of one year after the Facility Termination Date
and expiration or termination of this Agreement.
VII.16. FURTHER ASSURANCES. At the Borrower's cost and expense, upon
request of the Agent, duly execute and deliver or cause to be duly executed and
delivered, to the Agent such further instruments, documents, and certificates,
and do and cause to be done such further acts that may be reasonably necessary
or advisable in the reasonable opinion of the Agent to carry out more
effectively the provisions and purposes of this Agreement and the other Loan
Documents.
63
VII.17. EMPLOYEE BENEFIT PLANS.
(a) With reasonable promptness, and in any event within thirty (30)
days thereof, give notice to the Agent of (a) the establishment of any
new Pension Plan (which notice shall include a copy of such plan), (b)
the commencement of contributions to any Employee Benefit Plan to which
the Borrower or any of its ERISA Affiliates was not previously
contributing, (c) any material increase in the benefits of any existing
Employee Benefit Plan, (d) each funding waiver request filed with
respect to any Employee Benefit Plan and all communications received or
sent by the Borrower or any ERISA Affiliate with respect to such
request and (e) the failure of the Borrower or any ERISA Affiliate to
make a required installment or payment under Section 302 of ERISA or
Section 412 of the Code by the due date;
(b) Promptly and in any event within fifteen (15) days of becoming
aware of the occurrence or forthcoming occurrence of any (a)
Termination Event or (b) nonexempt "prohibited transaction," as such
term is defined in Section 406 of ERISA or Section 4975 of the Code, in
connection with any Pension Plan or any trust created thereunder,
deliver to the Agent a notice specifying the nature thereof, what
action the Borrower or any ERISA Affiliate has taken, is taking or
proposes to take with respect thereto and, when known, any action taken
or threatened by the Internal Revenue Service, the Department of Labor
or the PBGC with respect thereto; and
(c) With reasonable promptness but in any event within fifteen (15)
days for purposes of clauses (a), (b) and (c), deliver to the Agent
copies of (a) any unfavorable determination letter from the Internal
Revenue Service regarding the qualification of an Employee Benefit Plan
under Section 401(a) of the Code, (b) all notices received by the
Borrower or any ERISA Affiliate of the PBGC's intent to terminate any
Pension Plan or to have a trustee appointed to administer any Pension
Plan, and (c) all notices received by the Borrower or any ERISA
Affiliate from a Multiemployer Plan sponsor concerning the imposition
or amount of withdrawal liability pursuant to Section 4202 of ERISA.
The Borrower will notify the Agent in writing within fifteen (15) days
of the Borrower or any ERISA Affiliate obtaining knowledge or reason to
know that the Borrower or any ERISA Affiliate has filed or intends to
file a notice of intent to terminate any Pension Plan under a distress
termination within the meaning of Section 4041(c) of ERISA.
VII.18. CONTINUED OPERATIONS. Continue at all times to conduct its
business in all material respects and engage principally in the same line or
lines of business substantially as heretofore conducted.
VII.19. NEW SUBSIDIARIES. As soon as practicable but in any event
within thirty (30) days of any acquisition or substantive beginning of
operations for any newly created Subsidiary, cause to be delivered to the Agent
for the benefit of the Lenders each of the following:
64
(i) a Facility Guaranty executed by such Subsidiary
substantially in the form of EXHIBIT I;
(ii) an opinion of counsel to the Subsidiary dated as of the
date of delivery of the Facility Guaranty provided for in this SECTION
7.19 and addressed to the Agent and the Lenders, in form and substance
reasonably acceptable to the Agent (which opinion may include
assumptions and qualifications of similar effect to those contained in
the opinions of counsel delivered pursuant to SECTION 5.1(A)), to the
effect that:
(A) such Subsidiary is duly incorporated (or in the
case of a recently formed subsidiary, duly organized) validly
existing and in good standing in the jurisdiction of its
formation, has the requisite power and authority to own its
properties and conduct its business as then owned and then
conducted;
(B) the execution, delivery and performance of the
Facility Guaranty described in this SECTION 7.19 to which such
Subsidiary is a signatory has been duly authorized by all
requisite corporate or partnership action (including any
required shareholder or partner approval), such agreement has
been duly executed and delivered and constitutes the valid and
binding agreement of such Subsidiary, enforceable against such
Subsidiary in accordance with its terms, subject to the effect
of any applicable bankruptcy, moratorium, insolvency,
reorganization or other similar law affecting the
enforceability of creditors' rights generally and to the
effect of general principles of equity (whether considered in
a proceeding at law or in equity); and
(C) neither the execution or delivery of, nor
performance by such Subsidiary of its obligations under, the
Facility Guaranty described in this SECTION 7.19 to which such
Subsidiary is a signatory (a) does or will conflict with,
violate or constitute a breach of (i) the charter or
partnership agreement or bylaws of such Subsidiary, (ii) any
laws, rules or regulations applicable to such Subsidiary, (b)
requires the prior consent of, notice to, license from or
filing with any Governmental Authority which has not been duly
obtained or made on or prior to the date hereof.
(iii) current copies of the charter documents, including
partnership agreements and certificate of limited partnership, if
applicable, and bylaws of such Subsidiary, minutes of duly called and
conducted meetings (or duly effected consent actions) of the Board of
Directors, partners, or appropriate committees thereof (and, if
required by such charter documents, bylaws or by applicable law, of the
shareholders) of such Subsidiary authorizing the actions and the
execution and delivery of documents described in this SECTION 7.19 and
specimen signatures of the officers of such Subsidiary authorized to
execute and deliver such documents, all as certified by the secretary
or an assistance secretary or comparable representative of such
Subsidiary.
65
VII.20. RHEEM RELATIONSHIP. Promptly upon the Chief Executive Office,
President, Vice President or Treasurer of the Borrower becoming aware thereof,
give written notice to the Agent of the occurrence of each of the following:
(i) any request for a material amendment, modification or waiver
of any of the terms contained in any of the Distribution
Agreements, which notice shall be accompanied by a copy (if
available) or summary of the terms of the proposed amendment,
modification or waiver;
(ii) written notice from Rheem of any default or event of default,
or the assertion by any party thereto of the occurrence of a
default or event of default, under the Distribution
Agreements, which notice shall be accompanied by a copy of any
notice of default sent or received in connection therewith, a
summary of the circumstances relating thereto, and an
explanation of what action, if any, any Credit Party intends
to take with respect thereto; and
(iii) the assertion by any Person, whether in a proceeding before a
Governmental Authority or otherwise, that any Distribution
Agreement is void, invalid, unenforceable or subject to
rejection, avoidance, rescission or reformation in any
material respect, which notice shall be accompanied by a
summary of the circumstances relating to such assertion
together, if applicable, with copies of any pleadings or other
submissions made to any Governmental Authority relating to
such assertion.
66
ARTICLE VIII
NEGATIVE COVENANTS
Until the Facility Termination Date, unless the Required Lenders shall
otherwise consent in writing, the Borrower will not, nor will it permit any
Subsidiary to:
VIII.1. FINANCIAL COVENANTS.
(a) CONSOLIDATED NET WORTH. Permit Consolidated Net Worth to be less
than (i) $185,000,000 at the Closing Date and (ii) as at the last day of each
succeeding fiscal quarter of the Borrower and until (but excluding) the last day
of the next following fiscal quarter of the Borrower, the sum of (A) the amount
of Consolidated Net Worth required to be maintained pursuant to this SECTION
8.1(A) as at the end of the immediately preceding fiscal quarter, plus (B) 50%
of Consolidated Net Income (with no reduction for net losses during any period)
for the fiscal quarter of the Borrower ending on such day (adjusting the
computation of "Consolidated Net Income" for certain items, as provided for in
the definition of "Consolidated Net Income"), plus (C) 100% of the aggregate Net
Proceeds of the issuance of equity securities or other capital investments less
(D) an amount not exceeding $15,000,000 resulting from the sale or distribution
of Borrower's ownership interest in Dunhill.
(b) LEVERAGE RATIO. Permit the ratio of Consolidated Indebtedness to
Consolidated Total Capitalization as at the end of any fiscal quarter of the
Borrower to be greater than 0.625 to 1.00.
(c) CONSOLIDATED DEBT COVERAGE RATIO. Permit as at the end of any
fiscal quarter of the Borrower during the respective periods set forth below the
Consolidated Debt Coverage Ratio to be greater than that set forth opposite each
such period:
PERIOD DEBT COVERAGE RATIO MUST
------ ------------------------
NOT EXCEED
----------
Closing Date through
December 31, 1997 4.00 to 1.00
January 1, 1998 through
December 31, 1999 3.75 to 1.00
From January 1, 2000 and
thereafter 3.50 to 1.00
(d) CONSOLIDATED INTEREST COVERAGE RATIO. Permit the Consolidated
Interest Coverage Ratio as at the end of any Four-Quarter Period to be less than
2.25 to 1.00.
67
VIII.2. ACQUISITIONS. Enter into any agreement, contract, binding
commitment or other binding arrangement providing for any Acquisition, or
solicit the tender of securities or proxies in respect thereof in order to
effect any Acquisition, unless (i) the Person to be (or whose assets are to be)
acquired does not oppose such Acquisition and the line or lines of business of
the Person to be acquired are substantially the same as the Major Subsidiaries
and their lines of business, (ii) if the Costs of Acquisition exceeds
$10,000,000, an Authorized Representative shall have furnished the Agent with a
certificate to the effect that no Default or Event of Default shall have
occurred and be continuing either immediately prior to or immediately after
giving effect to such Acquisition and, the Borrower shall have furnished to the
Agent (A) pro forma historical financial statements as of the end of the most
recently completed fiscal period of the Borrower (whether quarterly or year end)
giving effect to such Acquisition and assuming that any Indebtedness incurred to
effect such Acquisition shall be deemed to have been outstanding during the
Four-Quarter Period preceding such Acquisition and to have borne a rate of
interest during such period equal to that rate in existence at the date of
determination and (B) a certificate in the form of EXHIBIT H prepared on a
historical pro forma basis giving effect to such Acquisition as of the most
recent fiscal quarter of the Borrower then ended, which certificate shall
demonstrate that no Default or Event of Default would exist immediately after
giving effect thereto, and (iii) the Person acquired shall be a Subsidiary, or
be merged into or with the Borrower or one of its Subsidiaries, immediately upon
consummation of the Acquisition (or if assets are being acquired, the acquiror
shall be the Borrower or one of its Subsidiaries).
VIII.3. CAPITAL EXPENDITURES. Make or become committed to make Capital
Expenditures, which exceed in the aggregate in any Fiscal Year of the Borrower
(on a noncumulative basis, with the effect that amounts not expended in any
Fiscal Year may not be carried forward to a subsequent period), $10,000,000.
VIII.4. LIENS. Incur, create or permit to exist any Lien, charge or
other encumbrance of any nature whatsoever with respect to any property or
assets now owned or hereafter acquired by the Borrower or any Subsidiary, other
than
(a) Liens existing as of the date hereof and as set forth in
SCHEDULE 6.7;
(b) Liens imposed by law for taxes, assessments or charges of
any Governmental Authority for claims not yet due or which are being
contested in good faith by appropriate proceedings diligently conducted
and with respect to which adequate reserves or other appropriate
provisions are being maintained in accordance with GAAP and which Liens
do not constitute a prior or senior lien;
(c) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other Liens imposed by law or
created in the ordinary course of business and in existence less than
120 days from the date of creation thereof for amounts not yet due or
which are being contested in good faith by appropriate proceedings
diligently conducted and with respect to which adequate reserves or
other appropriate
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provisions are being maintained in accordance with GAAP and which
Liens do not constitute a prior or senior lien;
(d) Liens incurred or deposits made in the ordinary course of
business (including, without limitation, surety bonds and appeal bonds)
in connection with workers' compensation, taxes (and with respect to
Liens, to the extent permitted under SECTION 7.4), unemployment
insurance and other types of social security benefits or to secure the
performance of tenders, bids, leases, contracts (other than for the
repayment of Indebtedness), statutory obligations and other similar
obligations or arising as a result of progress payments under
government contracts;
(e) easements (including reciprocal easement agreements and
utility agreements), rights-of-way, covenants, consents, reservations,
encroachments, variations and zoning and other restrictions, charges or
encumbrances (whether or not recorded), which do not interfere
materially with the ordinary conduct of the business of the Borrower
and its Subsidiaries taken as a whole and which do not materially
detract from the value of the property to which they attach or
materially impair the use thereof to the Borrower and its Subsidiaries
taken as a whole; and
(f) Liens securing Indebtedness permitted under SECTION 8.5(H)
provided that such Lien extends only to the property acquired with the
proceeds of such Indebtedness.
VIII.5. INDEBTEDNESS. Incur, create, assume or permit to exist any
Indebtedness, howsoever evidenced, except:
(a) Indebtedness existing as of the Closing Date as set forth
in SCHEDULE 6.6; PROVIDED, none of the instruments and agreements
evidencing or governing any such Indebtedness shall be amended,
modified or supplemented in any material respects after the Closing
Date to change any terms of subordination, repayment or rights of
conversion, put, exchange or other rights from such terms and rights as
in effect on the Closing Date;
(b) Indebtedness owing to the Agent or any Lender in
connection with this Agreement, any Note or other Loan Document;
(c) the endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business;
(d) the Private Placement Debt;
(e) Indebtedness arising from Rate Hedging Obligations
permitted under SECTION 8.16;
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(f) unsecured intercompany Indebtedness for loans and advances
made by the Borrower or any Guarantor to the Borrower or any Guarantor,
provided that such intercompany Indebtedness is evidenced by a
promissory note or similar written instrument acceptable to the Agent
which provides that such Indebtedness is subordinated to obligations,
liabilities and undertakings of the holder or owner thereof under the
Loan Documents on terms acceptable to the Agent;
(g) unsecured (other than by a Letter of Credit) Indebtedness,
subordinated (other than in those cases where supported by a Letter of
Credit) to the Obligations on terms acceptable to the Agent, in an
aggregate outstanding amount not to exceed $10,000,000, which
Indebtedness represents a portion of the Cost of Acquisition which is
payable to Persons selling an equity interest or assets to the Borrower
or one or more of its Subsidiaries; PROVIDED, HOWEVER, in computing
such $10 million amount, in the event that any such Indebtedness is
secured or enhanced by a Letter of Credit or by a guarantee of the
Borrower or one or more of its Subsidiaries, the amount of only the
original Indebtedness, but not such Letter of Credit or related
obligations or such guarantee, shall count towards the $10 million
limitation; and
(h) Indebtedness incurred to purchase property, plant and
equipment in an aggregate outstanding amount not to exceed at any time
$7,500,000.
VIII.6. TRANSFER OF ASSETS. Sell, lease, transfer or otherwise dispose
of any assets of Borrower or any Subsidiary (including any ownership interest in
any Subsidiary) other than (a) dispositions of inventory in the ordinary course
of business, (b) dispositions of equipment or real property which, in the
aggregate during any Fiscal Year, have a fair market value or book value,
whichever is less, of $5,000,000 or less and is not replaced by equipment having
at least equivalent value, (c) dispositions of property that is substantially
worn, damaged, obsolete or, in the judgment of the Borrower, no longer best used
or useful in its business or that of any Subsidiary, (d) transfers of assets
necessary to give effect to merger or consolidation transactions permitted by
SECTION 8.8, (e) the disposition of Eligible Securities in the ordinary course
of management of the investment portfolio of the Borrower and its Subsidiaries,
and (f) the sale of all or substantially all of the capital stock or assets of
Dunhill and X.X. Xxxxxx, Inc. for fair market value (upon which event the Agent
will, at the request and reasonable expense of the Borrower, execute such
documents as shall be acceptable to the Agent and its special counsel releasing
Dunhill and X.X. Xxxxxx, Inc. from their obligations under the Facility Guaranty
to which each is a party).
VIII.7. INVESTMENTS. Purchase, own, invest in or otherwise acquire,
directly or indirectly, any stock or other securities, or make or permit to
exist any investment whatsoever in any other Person or permit to exist any loans
or advances to any Person, except that Borrower may maintain investments or
invest in:
(a) securities of any Person acquired in an Acquisition
permitted hereunder;
(b) Eligible Securities;
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(c) investments in Persons existing as of the date hereof and
as set forth in SCHEDULE 6.4;
(d) accounts receivable arising and trade credit granted in
the ordinary course of business and any securities or other assets
received in satisfaction or partial satisfaction thereof in connection
with accounts of financially troubled Persons to the extent reasonably
necessary in order to prevent or limit loss; and
(e) investments in Subsidiaries which are Guarantors;
(f) additional investments in other Persons provided that (i)
the aggregate costs incurred in making such investments (reduced by
cash dividends or other cash payments received on or in consideration
of such investments) shall not exceed $7,500,000 in the aggregate at
any time and (ii) prior to and immediately after giving effect to such
investment, no Default or Event of Default shall exist and be
continuing;
(g) loans and advances between or among the Borrower and the
Guarantors described in SECTION 8.5(G); and
(h) travel and entertainment advances made to employees of
Borrower or any of its Subsidiaries in the ordinary course of business.
VIII.8. MERGER OR CONSOLIDATION. (a) Consolidate with or merge into any
other Person, or (b) permit any other Person to merge into it, or (c) liquidate,
wind-up or dissolve or sell, transfer or lease or otherwise dispose of all or a
substantial part of its assets; PROVIDED, HOWEVER, (i) any Subsidiary of the
Borrower may merge or transfer all or substantially all of its assets into or
consolidate with the Borrower or any wholly-owned Subsidiary of the Borrower,
and (ii) any other Person may merge into or consolidate with the Borrower or any
wholly-owned Subsidiary and any Subsidiary may merge into or consolidate with
any other Person in order to consummate an Acquisition permitted by SECTION 8.2,
PROVIDED FURTHER, that any resulting or surviving entity shall execute and
deliver such agreements and other documents, including a Facility Guaranty, and
take such other action as the Agent may require to evidence or confirm its
express assumption of the obligations and liabilities of its predecessor
entities under the Loan Documents; and provided further that Dunhill and/or P.E.
Del/Mar may merge with or into or consolidate with any other Person in
connection with the disposition of such Subsidiaries in accordance with SECTION
8.6 so long as as a result thereof the Borrower and/or its Subsidiaries shall
not be liable for or assume any liability or obligation of any Person who was
not immediately prior to such time a Subsidiary.
VIII.9. RESTRICTED PAYMENTS. Make any Restricted Payment or apply or
set apart any of their assets therefor or agree to do any of the foregoing;
PROVIDED, however, the Borrower may make the following Restricted Payments if
immediately prior and immediately after giving effect thereto no Default or
Event of Default shall exist or occur and be continuing:
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(i) in any Fiscal Year (on a noncumulative basis, with the effect
that amounts not paid in any Fiscal Year may not be carried
over for payment in a subsequent period), cash dividends and
other cash distributions in respect of its capital stock not
to exceed 50% of Consolidated Net Income for such Fiscal Year;
(ii) the cash redemption of Preferred Stock owned of record by
Rheem at a redemption price not to exceed $2,000,000 in the
aggregate;
(iii) the payment of dividends on Preferred Stock in an aggregate
amount not to exceed $130,000 during any Fiscal Year on a
cumulative basis (so that amounts not paid in one Fiscal Year
may be paid in a subsequent Fiscal Year);
(iv) redeem either class of outstanding registered common stock of
the Borrower for an aggregate purchase price of not to exceed
$20,000,000; provided that the amount spent to purchase common
stock during any Four-Quarter Period shall not exceed
Consolidated Net Income for such period;
(v) distribute its ownership interest in, or all or a portion of
the proceeds upon the sale of, Dunhill to stockholders of
Borrower;
(vi) the payment of dividends or other distributions on the WSC
Preferred Stock or the making of contributions to the WSC ESOP
in an aggregate amount not to exceed $625,000 during any
Fiscal Year; PROVIDED, HOWEVER, that any such dividends,
distributions or contributions which in the aggregate exceed
$100,000 in any Fiscal Year may only be made for the purpose
of providing to the WSC ESOP funds for repayment of
Indebtedness owing by WSC ESOP to WSC Holdings; and
(vii) The payment of amounts owing to one or more holders of the WSC
Preferred Stock in the event such holder(s) exercise its or
their redemption rights.
VIII.10. TRANSACTIONS WITH AFFILIATES. Other than transactions
permitted under SECTIONS 8.7 and 8.8, enter into any transaction after the
Closing Date, including, without limitation, the purchase, sale, lease or
exchange of property, real or personal, or the rendering of any service, with
any Affiliate of the Borrower, except (a) that such Persons may render services
to the Borrower or its Subsidiaries for compensation at the same rates generally
paid by Persons engaged in the same or similar businesses for the same or
similar services or as may otherwise be approved by a majority vote of
Borrower's shareholders, (b) that the Borrower or any Subsidiary may render
services to such Persons for compensation at the same rates generally charged by
the Borrower or such Subsidiary and (c) in either case in the ordinary course of
business and pursuant to the reasonable requirements of the Borrower's (or any
Subsidiary's) business consistent with past practice of the Borrower and its
Subsidiaries and upon fair and
72
reasonable terms no less favorable to the Borrower (or any Subsidiary) than
would be obtained in a comparable arm's-length transaction with a Person not an
Affiliate.
VIII.11. COMPLIANCE WITH ERISA. With respect to any Pension Plan,
Employee Benefit Plan or Multiemployer Plan:
(a) permit the occurrence of any Termination Event which would
result in a liability on the part of the Borrower or any ERISA
Affiliate to the PBGC; or
(b) permit the present value of all benefit liabilities under
all Pension Plans to exceed the current value of the assets of such
Pension Plans allocable to such benefit liabilities; or
(c) permit any accumulated funding deficiency (as defined in
Section 302 of ERISA and Section 412 of the Code) with respect to any
Pension Plan, whether or not waived; or
(d) fail to make any contribution or payment to any
Multiemployer Plan which the Borrower or any ERISA Affiliate may be
required to make under any agreement relating to such Multiemployer
Plan, or any law pertaining thereto; or
(e) engage, or permit any Borrower or any ERISA Affiliate to
engage, in any prohibited transaction under Section 406 of ERISA or
Sections 4975 of the Code for which a civil penalty pursuant to Section
502(I) of ERISA or a tax pursuant to Section 4975 of the Code may be
imposed; or
(f) permit the establishment of any Employee Benefit Plan
providing post-retirement welfare benefits or establish or amend any
Employee Benefit Plan which establishment or amendment could result in
liability to the Borrower or any ERISA Affiliate or increase the
obligation of the Borrower or any ERISA Affiliate to a Multiemployer
Plan where such establishment or amendment would reasonably be expected
to result in a Material Adverse Effect; or
(g) fail, or permit the Borrower or any ERISA Affiliate to
fail, to establish, maintain and operate each Employee Benefit Plan in
compliance in all material respects with the provisions of ERISA, the
Code, all applicable Foreign Benefit Laws and all other applicable laws
and the regulations and interpretations thereof;
VIII.12. FISCAL YEAR. Change its Fiscal Year.
VIII.13. DISSOLUTION, ETC. Wind up, liquidate or dissolve (voluntarily
or involuntarily) or commence or suffer any proceedings seeking any such winding
up, liquidation or dissolution, except in connection with a merger or
consolidation permitted pursuant to SECTION 8.8 or the sale of Dunhill and P.E./
Xxxxxx, Inc. permitted by SECTION 8.6 or the dissolution of The Houston Ad
Company or Gemaire Caribe, Inc.
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VIII.14. LIMITATIONS ON SALES AND LEASEBACKS. Except to the extent it
may sell property under SECTION 8.6(B)), enter into any arrangement with any
Person providing for the leasing by the Borrower or any Subsidiary of real or
personal property, whether now owned or hereafter acquired in a related
transaction or series of related transactions, which has been or is to be sold
or transferred by the Borrower or any Subsidiary to such Person or to any other
Person to whom funds have been or are to be advanced by such Person on the
security of such property or rental obligations of the Borrower or any
Subsidiary.
VIII.15. CHANGE IN CONTROL. Cause,suffer or permit to exist or occur
any Change of Control.
VIII.16. RATE HEDGING OBLIGATIONS. Incur any Rate Hedging Obligations
or enter into any agreements, arrangements, devices or instruments relating to
Rate Hedging Obligations, except as otherwise agreed by the Borrower and the
Required Lenders for Rate Hedging Obligations incurred to limit risks of
currency or interest rate fluctuations to which the Borrower and its
Subsidiaries are otherwise subject by virtue of the operations of their
businesses, and not for speculative purposes; PROVIDED that the aggregate
notional amount of all such Rate Hedging Obligations shall at no time exceed
$260,000,000.
VIII.17. NEGATIVE PLEDGE CLAUSES. Enter into or cause, suffer or permit
to exist any agreement with any Person other than the Agent and the Lenders
pursuant to this Agreement or any other Loan Documents which prohibits or limits
the ability of any of the Borrower or any Subsidiary to create, incur, assume or
suffer to exist any Lien upon any of its property.
VIII.18. PREPAYMENTS, ETC. OF INDEBTEDNESS. (a) Prepay, redeem,
purchase, defease or otherwise satisfy prior to the scheduled maturity thereof
in any manner, or make any payment in violation of any subordination terms of,
the Private Placement Debt; or
(b) amend, modify or change in any manner any term or condition of any
Indebtedness described in SECTION 8.5(A) OR (D) so that the terms and conditions
thereof are less favorable to the Agent and the Lenders than the terms of such
Indebtedness as of the Closing Date.
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ARTICLE IX
EVENTS OF DEFAULT AND ACCELERATION
IX.1. EVENTS OF DEFAULT. If any one or more of the following events
(herein called "Events of Default") shall occur for any reason whatsoever (and
whether such occurrence shall be voluntary or involuntary or come about or be
effected by operation of law or pursuant to or in compliance with any judgment,
decree or order of any court or any order, rule or regulation of any
Governmental Authority), that is to say:
(a) if default shall be made in the due and punctual payment
of the principal of any Loan, Reimbursement Obligation or other
Obligation, when and as the same shall be due and payable whether
pursuant to any provision of ARTICLE II or ARTICLE III, at maturity, by
acceleration or otherwise; or
(b) if default shall be made in the due and punctual payment
of any amount of interest on any Loan, Reimbursement Obligation or
other Obligation or of any fees or other amounts payable to any of the
Lenders, the Agent or NCMI on the date on which the same shall be due
and payable; or
(c) if default shall be made in the performance or observance
of any covenant set forth in SECTION 7.7, 7.11, 7.19 or ARTICLE VIII;
(d) if a default shall be made in the performance or
observance of, or shall occur under, any covenant, agreement or
provision contained in this Agreement or the Notes (other than as
described in clauses (a), (b) or (c) above) and such default shall
continue for 30 or more days after the earlier of receipt of notice of
such default by the Authorized Representative from the Agent or the
Chief Executive Officer, President, Vice President, Chief Financial
Officer or Treasurer of the Borrower becomes aware of such default, or
if a default shall be made in the performance or observance of, or
shall occur under, any covenant, agreement or provision contained in
any of the other Loan Documents (beyond any applicable grace period, if
any, contained therein) or in any instrument or document evidencing or
creating any obligation, guaranty, or Lien in favor of the Agent or any
of the Lenders or delivered to the Agent or any of the Lenders in
connection with or pursuant to this Agreement or any of the
Obligations, or if any Loan Document ceases to be in full force and
effect (other than in accordance with its terms in the absence of
default or with the consent of the Agent and the Lenders), or if
without the written consent of the Agent and the Lenders, this
Agreement or any other Loan Document shall be disaffirmed or shall
terminate, be terminable or be terminated or become void or
unenforceable for any reason whatsoever (other than in accordance with
its terms in the absence of default or with the consent of the Agent
and the Lenders); or
(e) if there shall occur (i) a default, which is not waived,
in the payment of any principal, interest, premium or other amount with
respect to any Indebtedness (other
75
than the Loans and other Obligations) of the Borrower or any Subsidiary
in an amount not less than $500,000 in the aggregate outstanding, or
(ii) a default, which is not waived, in the performance, observance or
fulfillment of any term or covenant contained in any agreement or
instrument under or pursuant to which any such Indebtedness may have
been issued, created, assumed, guaranteed or secured by the Borrower or
any Subsidiary, or (iii) any other event of default as specified in any
agreement or instrument under or pursuant to which any such
Indebtedness may have been issued, created, assumed, guaranteed or
secured by the Borrower or any Subsidiary, and in each case described
in (i), (ii) and (iii) above such default or event of default shall
continue for more than the period of grace, if any, therein specified,
or such default or event of default shall permit the holder of any such
Indebtedness (or any agent or trustee acting on behalf of one or more
holders) to accelerate the maturity thereof; or
(f) if any representation, warranty or other statement of fact
contained in any Loan Document or in any writing, certificate, report
or statement at any time furnished to the Agent or any Lender by or on
behalf of the Borrower or any other Credit Party pursuant to or in
connection with any Loan Document, or otherwise, shall be false or
misleading in any material respect when given; or
(g) if the Borrower or any Subsidiary shall be unable to pay
its debts generally as they become due; file a petition to take
advantage of any insolvency statute; make an assignment for the benefit
of its creditors; commence a proceeding for the appointment of a
receiver, trustee, liquidator or conservator of itself or of the whole
or any substantial part of its property; file a petition or answer
seeking liquidation, reorganization or arrangement or similar relief
under the federal bankruptcy laws or any other applicable law or
statute; or
(h) if a court of competent jurisdiction shall enter an order,
judgment or decree appointing a custodian, receiver, trustee,
liquidator or conservator of the Borrower or any Subsidiary or of the
whole or any substantial part of its properties and such order,
judgment or decree continues unstayed and in effect for a period of
sixty (60) days, or approve a petition filed against the Borrower or
any Subsidiary seeking liquidation, reorganization or arrangement or
similar relief under the federal bankruptcy laws or any other
applicable law or statute of the United States of America or any state,
which petition is not dismissed within sixty (60) days; or if, under
the provisions of any other law for the relief or aid of debtors, a
court of competent jurisdiction shall assume custody or control of the
Borrower or any Subsidiary or of the whole or any substantial part of
its properties, which control is not relinquished within sixty (60)
days; or if there is commenced against the Borrower or any Subsidiary
any proceeding or petition seeking reorganization, arrangement or
similar relief under the federal bankruptcy laws or any other
applicable law or statute of the United States of America or any state
which proceeding or petition remains undismissed for a period of sixty
(60) days; or if the Borrower or any Subsidiary takes any action to
indicate its consent to or approval of any such proceeding or petition;
or
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(i) if (i) one or more judgments or orders where the amount
not covered by insurance (or the amount as to which the insurer denies
liability) is in excess of $1,000,000 is rendered against the Borrower
or any Subsidiary, or (ii) there is any attachment, injunction or
execution against any of the Borrower's or Subsidiaries' properties for
any amount in excess of $1,000,000 in the aggregate; and such judgment,
attachment, injunction or execution remains unpaid, unappealed,
unstayed, undischarged, unbonded or undismissed for a period of sixty
(60) days; or
(j) if the Borrower or any Major Subsidiary shall, other than
in the ordinary course of business (as determined by past practices),
suspend all or substantially all of its operations material to the
conduct of the business of the Borrower or such Subsidiary for a period
of more than 120 days; or
(k) if the Borrower or any Subsidiary shall breach any of the
material terms or conditions of any agreement under which any Rate
Hedging Obligations permitted hereby is created and such breach shall
continue beyond any grace period, if any, relating thereto pursuant to
the terms of such agreement, or if the Borrower or any Subsidiary shall
disaffirm or seek to disaffirm any such agreement or any of its
obligations thereunder; or
(l) if there shall occur and not be waived an Event of Default
as defined in any of the other Loan Documents; or
(m) if there shall occur any termination, expiration, lapse,
avoidance, rescission or rejection of any of the Distribution
Agreements, without the prior written consent of the Required Lenders;
then, and in any such event and at any time thereafter, if such Event of Default
or any other Event of Default shall have not been waived:
(A) Either or both of the following actions may be
taken: (i) the Agent, with the consent of the Required
Lenders, may, and at the direction of the Required Lenders
shall, declare any obligation of the Lenders and the Issuing
Bank to make further Loans or to issue additional Letters of
Credit terminated, whereupon the obligation of each Lender to
make further Loans and of the Issuing Bank to issue Letters of
Credit hereunder shall terminate immediately, and (ii) the
Agent shall at the direction of the Required Lenders, at their
option, declare by notice to the Borrower any or all of the
Obligations to be immediately due and payable, and the same,
including all interest accrued thereon and all other
obligations of the Borrower to the Agent and the Lenders,
shall forthwith become immediately due and payable without
presentment, demand, protest, notice or other formality of any
kind, all of which are hereby expressly waived, anything
contained herein or in any instrument evidencing the
Obligations to the contrary
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notwithstanding; PROVIDED, however, that notwithstanding the
above, if there shall occur an Event of Default under clause
(g) or (h) above, then the obligation of the Lenders to make
Loans and of the Issuing Bank to issue Letters of Credit
hereunder shall automatically terminate and any and all of the
Obligations shall be immediately due and payable without the
necessity of any action by the Agent or the Required Lenders
or notice to the Agent or the Lenders; and
(B) The Borrower shall, upon demand of the Agent or
the Required Lenders, deposit cash with the Agent in an amount
equal to the amount of any Letter of Credit Outstandings, as
collateral security for the repayment of any future drawings
or payments under such Letters of Credit, and such amounts
shall be held by the Agent pursuant to the terms of the LC
Account Agreement; and
(C) The Agent and each of the Lenders shall have all
of the rights and remedies available under the Loan Documents
or under any applicable law.
IX.2. AGENT TO ACT. In case any one or more Events of Default shall
occur and not have been waived, the Agent may, and at the direction of the
Required Lenders shall, proceed to protect and enforce their rights or remedies
either by suit in equity or by action at law, or both, whether for the specific
performance of any covenant, agreement or other provision contained herein or in
any other Loan Document, or to enforce the payment of the Obligations or any
other legal or equitable right or remedy.
IX.3. CUMULATIVE RIGHTS. No right or remedy herein conferred upon the
Lenders or the Agent is intended to be exclusive of any other rights or remedies
contained herein or in any other Loan Document, and every such right or remedy
shall be cumulative and shall be in addition to every other such right or remedy
contained herein and therein or now or hereafter existing at law or in equity or
by statute, or otherwise.
IX.4. NO WAIVER. No course of dealing between the Borrower and any
Lender or the Agent or any failure or delay on the part of any Lender or the
Agent in exercising any rights or remedies under any Loan Document or otherwise
available to it shall operate as a waiver of any rights or remedies and no
single or partial exercise of any rights or remedies shall operate as a waiver
or preclude the exercise of any other rights or remedies hereunder or of the
same right or remedy on a future occasion.
IX.5. ALLOCATION OF PROCEEDS. If an Event of Default has occurred and
not been waived, and the maturity of the Notes has been accelerated pursuant to
ARTICLE IX hereof, all payments received by the Agent hereunder, in respect of
any principal of or interest on the Obligations or any other amounts payable by
the Borrower hereunder, shall be applied by the Agent in the following order:
(a) amounts due to the Lenders and NationsBank pursuant to
SECTIONS 2.10, 3.3 AND 11.5;
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(b) amounts due to the Agent and NationsBank pursuant to
SECTION 10.11 and SECTION 3.4;
(c) payments of interest on Loans, Swing Line Loans and
Reimbursement Obligations, to be applied for the ratable benefit of the
Lenders (with amounts payable in respect of Swing Line Outstandings
being included in such calculation and paid to NationsBank);
(d) payments of principal of Loans, Swing Line Loans and
Reimbursement Obligations, to be applied for the ratable benefit of the
Lenders (with amounts payable in respect of Swing Line Outstandings
being included in such calculation and paid to NationsBank);
(e) payments of cash amounts to the Agent in respect of
outstanding Letters of Credit pursuant to SECTION 9.1;
(f) amounts due to the Lenders pursuant to SECTIONS 3,2(G),
7.15 and 11.9;
(g) payments of all other amounts due under any of the Loan
Documents, if any, to be applied for the ratable benefit of the
Lenders;
(h) amounts due to any of the Lenders in respect of
Obligations consisting of liabilities under any Swap Agreement with
any of the Lenders on a pro rata basis according to the amounts owed;
and
(i) any surplus remaining after application as provided for
herein, to the Borrower or otherwise as may be required by applicable
law.
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ARTICLE X
THE AGENT
X.1. APPOINTMENT, POWERS, AND IMMUNITIES. Each Lender hereby
irrevocably appoints and authorizes the Agent to act as its agent under this
Agreement and the other Loan Documents with such powers and discretion as are
specifically delegated to the Agent by the terms of this Agreement and the other
Loan Documents, together with such other powers as are reasonably incidental
thereto. The Agent (which term as used in this sentence and in SECTION 10.5 and
the first sentence of SECTION 10.6 hereof shall include its affiliates and its
own and its affiliates' officers, directors, employees, and agents):
(a) shall not have any duties or responsibilities except
those expressly set forth in this Agreement and shall not be a trustee
or fiduciary for any Lender;
(b) shall not be responsible to the Lenders for any recital,
statement, representation, or warranty (whether written or oral) made
in or in connection with any Loan Document or any certificate or other
document referred to or provided for in, or received by any of them
under, any Loan Document, or for the value, validity, effectiveness,
genuineness, enforceability, or sufficiency of any Loan Document, or
any other document referred to or provided for therein or for any
failure by any Credit Party, Lender or any other Person to perform any
of its obligations thereunder;
(c) shall not be responsible for or have any duty to
ascertain, inquire into, or verify the performance or observance of any
covenants or agreements by any Loan Party or the satisfaction of any
condition or to inspect the property (including the books and records)
of any Credit Party or any of its Subsidiaries or affiliates;
(d) shall not be required to initiate or conduct any
litigation or collection proceedings under any Loan Document; and
(e) shall not be responsible for any action taken or omitted
to be taken by it under or in connection with any Loan Document, except
for its own gross negligence or willful misconduct.
The Agent may employ agents and attorneys-in-fact and shall not be responsible
for the negligence or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care.
X.2. RELIANCE BY AGENT. The Agent shall be entitled to rely upon any
certification, notice, instrument, writing, or other communication (including,
without limitation, any thereof by telephone or telefacsimile) believed by it to
be genuine and correct and to have been signed, sent or made by or on behalf of
the proper Person or Persons, and upon advice and statements of legal counsel
(including counsel for any Credit Party), independent accountants, and other
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experts selected by the Agent. The Agent may deem and treat the payee of any
Note as the holder thereof for all purposes hereof unless and until the Agent
receives and accepts an Assignment and Acceptance executed in accordance with
SECTION 11.1 hereof. As to any matters not expressly provided for by this
Agreement, the Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Lenders, and such instructions shall be binding on all of the
Lenders; PROVIDED, HOWEVER, that the Agent shall not be required to take any
action that exposes the Agent to personal liability or that is contrary to any
Loan Document or applicable law or unless 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 any such action.
X.3. DEFAULTS. The Agent shall not be deemed to have knowledge or
notice of the occurrence of a Default or Event of Default unless the Agent has
received written notice from a Lender or the Borrower specifying such Default or
Event of Default and stating that such notice is a "Notice of Default". In the
event that the Agent receives such a notice of the occurrence of a Default or
Event of Default, the Agent shall give prompt notice thereof to the Lenders. The
Agent shall (subject to SECTION 10.2 hereof) take such action with respect to
such Default or Event of Default as shall reasonably be directed by the Required
Lenders, PROVIDED THAT, unless and until the Agent shall have received such
directions, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interest of the Lenders.
X.4. RIGHTS AS LENDER. With respect to its Revolving Credit Commitment
and the Loans made by it, NationsBank (and any successor acting as Agent) in its
capacity as a Lender hereunder shall have the same rights and powers hereunder
as any other Lender and may exercise the same as though it were not acting as
the Agent, and the term "Lender" or "Lenders" shall, unless the context
otherwise indicates, include the Agent in its individual capacity. NationsBank
(and any successor acting as Agent) and its affiliates may (without having to
account therefor to any Lender) accept deposits from, lend money to, make
investments in, provide services to, and generally engage in any kind of
lending, trust, or other business with any Credit Party or any of its
Subsidiaries or affiliates as if it were not acting as Agent, and NationsBank
(and any successor acting as Agent) and its affiliates may accept fees and other
consideration from any Credit Party or any of its Subsidiaries or affiliates for
services in connection with this Agreement or otherwise without having to
account for the same to the Lenders.
X.5. INDEMNIFICATION. The Lenders agree to indemnify the Agent (to the
extent not reimbursed under SECTION 11.9 hereof, but without limiting the
obligations of the Borrower under such Section) ratably in accordance with their
respective Revolving Credit Commitments, for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including attorneys' fees), or disbursements of any kind and nature
whatsoever that may be imposed on, incurred by or asserted against the Agent
(including by any Lender) in any way relating to or arising out of any Loan
Document or the transactions contemplated thereby or any action taken or omitted
by the Agent under any Loan Document; PROVIDED that no Lender
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shall be liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the Person to be indemnified. Without
limitation of the foregoing, each Lender agrees to reimburse the Agent promptly
upon demand for its ratable share of any costs or expenses payable by the
Borrower under SECTION 11.5, to the extent that the Agent is not promptly
reimbursed for such costs and expenses by the Borrower. The agreements contained
in this SECTION 10.5 shall survive payment in full of the Loans and all other
amounts payable under this Agreement.
X.6. NON-RELIANCE ON AGENT AND OTHER LENDERS. Each Lender agrees that
it has, independently and without reliance on the Agent or any other Lender, and
based on such documents and information as it has deemed appropriate, made its
own credit analysis of the Credit Parties and their Subsidiaries and decision to
enter into this Agreement and that it will, independently and without reliance
upon the Agent or any other Lender, and based on such documents and information
as it shall deem appropriate at the time, continue to make its own analysis and
decisions in taking or not taking action under the Loan Documents. Except for
notices, reports, and other documents and information expressly required to be
furnished to the Lenders by the Agent hereunder, the Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the affairs, financial condition, or business of any Loan
Party or any of its Subsidiaries or affiliates that may come into the possession
of the Agent or any of its affiliates.
X.7. RESIGNATION OF AGENT. The Agent may resign at any time by giving
notice thereof to the Lenders and the Borrower. Upon any such resignation, the
Required Lenders shall have the right to appoint a successor Agent. If no
successor Agent shall have been so appointed by the Required Lenders and shall
have accepted such appointment within thirty (30) days after the retiring
Agent's giving of notice of resignation, then the retiring Agent may, on behalf
of the Lenders, appoint a successor Agent which shall be a commercial bank
organized under the laws of the United States of America having combined capital
and surplus of at least $500,000,000. Upon the acceptance of any appointment as
Agent hereunder by a successor, such successor shall thereupon succeed to and
become vested with all the rights, powers, discretion, privileges, and duties of
the retiring Agent, and the retiring Agent shall be discharged from its duties
and obligations hereunder. After any retiring Agent's resignation hereunder as
Agent, the provisions of this ARTICLE X shall continue in effect for its benefit
in respect of any actions taken or omitted to be taken by it while it was acting
as Agent.
X.8. FEES. The Borrower agrees to pay to the Agent, for its individual
account, an annual Agent's fee as from time to time agreed to by the Borrower
and Agent in writing.
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ARTICLE XI
MISCELLANEOUS
XI.1. ASSIGNMENTS AND PARTICIPATIONS. (a) Each Lender may assign to one
or more Eligible Assignees all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its Loans,
its Note, and its Revolving Credit Commitment); PROVIDED, HOWEVER, that
(i) each such assignment shall be to an Eligible Assignee;
(ii) except in the case of an assignment to another Lender or
an assignment of all of a Lender's rights and obligations under this Agreement,
any such partial assignment shall be in an amount at least equal to $10,000,000
or an integral multiple of $5,000,000 in excess thereof;
(iii) each such assignment by a Lender shall be of a constant,
and not varying, percentage of all of its rights and obligations under this
Agreement and the Note; and
(iv) the parties to such assignment shall execute and deliver
to the Agent for its acceptance an Assignment and Acceptance in the form of
EXHIBIT B hereto, together with any Note subject to such assignment and a
processing fee of $3,500.
Upon execution, delivery, and acceptance of such Assignment and Acceptance, the
assignee thereunder shall be a party hereto and, to the extent of such
assignment, have the obligations, rights, and benefits of a Lender hereunder and
the assigning Lender shall, to the extent of such assignment, relinquish its
rights and be released from its obligations under this Agreement. Upon the
consummation of any assignment pursuant to this Section, the assignor, the Agent
and the Borrower shall make appropriate arrangements so that, if required, new
Notes are issued to the assignor and the assignee. If the assignee is not
incorporated under the laws of the United States of America or a state thereof,
it shall deliver to the Borrower and the Agent certification as to exemption
from deduction or withholding of Taxes in accordance with SECTION 4.6.
(b) The Agent shall maintain at its address referred to in SECTION 11.2
a copy of each Assignment and Acceptance delivered to and accepted by it and a
register for the recordation of the names and addresses of the Lenders and the
Revolving Credit Commitment of, and principal amount of the Loans owing to, each
Lender from time to time (the "Register"). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Agent and the Lenders may treat each Person whose name is recorded
in the Register as a Lender hereunder for all purposes of this 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.
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(c) Upon its receipt of an Assignment and Acceptance executed by the
parties thereto, together with any Note subject to such assignment and payment
of the processing fee, the Agent shall, if such Assignment and Acceptance has
been completed and is in substantially the form of EXHIBIT B hereto, (i) accept
such Assignment and Acceptance, (ii) record the information contained therein in
the Register and (iii) give prompt notice thereof to the parties thereto.
(d) Each Lender may sell participations to one or more Persons in all
or a portion of its rights and obligations under this Agreement (including all
or a portion of its Revolving Credit Commitment and its Loans); PROVIDED,
HOWEVER, that (i) such Lender's obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) the participant shall be
entitled to the benefit (and be bound by the related covenants and conditions
thereunder) of the yield protection provisions contained in ARTICLE IV and the
right of set-off contained in SECTION 11.3, and (iv) the Borrower shall continue
to deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement, and such Lender shall retain the
sole right to enforce the obligations of the Borrower relating to its Loans and
its Note and to approve any amendment, modification, or waiver of any provision
of this Agreement (other than amendments, modifications, or waivers decreasing
the amount of principal of or the rate at which interest or fees is payable on
such Loans or Note, or extending any scheduled principal payment date or date
fixed for the payment of interest or fees on such Loans or Note, or extending
its Revolving Credit Commitment).
(e) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time assign and pledge all or any portion of its Loans and
its Note to any Federal Reserve Bank as collateral security pursuant to
Regulation A and any Operating Circular issued by such Federal Reserve Bank. No
such assignment shall release the assigning Lender from its obligations
hereunder.
(f) Any Lender may furnish any information concerning the Borrower or
any of its Subsidiaries in the possession of such Lender from time to time to
assignees and participants (including prospective assignees and participants),
subject, however, to the provisions of SECTION 11.14 hereof.
XI.2. NOTICES. Any notice shall be conclusively deemed to have been
received by any party hereto and be effective (i) on the day on which delivered
(including hand delivery by commercial courier service) to such party (against
receipt therefor), (ii) on the date of receipt at such address, telefacsimile
number or telex number as may from time to time be specified by such party in
written notice to the other parties hereto or otherwise received, in the case of
notice by telegram, telefacsimile or telex, respectively (where the receipt of
such message is verified by return), or (iii) on the fifth Business Day after
the day on which mailed, if sent prepaid by certified or registered mail, return
receipt requested, in each case delivered, transmitted or mailed, as the case
may be, to the address, telex number or telefacsimile number, as appropriate,
set forth below or such other address or number as such party shall specify by
notice hereunder:
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(a) if to the Borrower:
Watsco, Inc.
0000 Xxxxx Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxxx
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
(b) if to the Agent:
NationsBank, National Association
Independence Center, 00xx Xxxxx
XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Agency Services
Telephone: (704) 386-____
Telefacsimile: (000) 000-0000
with a copy to:
NationsBank, National Association
000 X.X. Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxx
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
(c) if to the Lenders:
At the addresses set forth on the signature pages
hereof and on the signature page of each Assignment
and Acceptance;
(d) if to any other Credit Party, at the address set
forth on the signature page of the Facility Guaranty
executed by such Credit Party, as the case may be.
XI.3. RIGHT OF SET-OFF; ADJUSTMENTS. (a) Upon the occurrence and during
the continuance of any Event of Default, each Lender (and each of its
affiliates) is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by such Lender (or any of its affiliates)
to or for the credit
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or the account of the Borrower against any and all of the obligations of the
Borrower now or hereafter existing under this Agreement and the Note held by
such Lender, irrespective of whether such Lender shall have made any demand
under this Agreement or such Note and although such obligations may be
unmatured. Each Lender agrees promptly to notify the Borrower 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. The rights of each Lender under this SECTION 11.3 are in addition
to other rights and remedies (including, without limitation, other rights of
set-off) that such Lender may have.
(b) If any Lender (a "benefitted Lender") shall at any time receive any
payment of all or part of the Loans owing to it, or interest thereon, or receive
any collateral in respect thereof (whether voluntarily or involuntarily, by
set-off, 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 owing to it, or interest thereon, such benefitted Lender shall
purchase for cash from the other Lenders a participating interest in such
portion of each such other Lender's Loans owing to it, or shall provide such
other Lenders with the benefits of any such collateral, or the proceeds thereof,
as shall be necessary to cause such benefitted 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 benefitted 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 any Lender so
purchasing a participation from a Lender pursuant to this SECTION 11.3 may, to
the fullest extent permitted by law, exercise all of its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Person were the direct creditor of the Borrower in the amount of such
participation.
XI.4. SURVIVAL. All covenants, agreements, representations and
warranties made herein shall survive the making by the Lenders of the Loans and
the issuance of the Letters of Credit and the execution and delivery to the
Lenders of this Agreement and the Notes and shall continue in full force and
effect so long as any of Obligations remain outstanding or any Lender has any
commitment hereunder or the Borrower has continuing obligations hereunder unless
otherwise provided herein. Whenever in this Agreement any of the parties hereto
is referred to, such reference shall be deemed to include the successors and
permitted assigns of such party and all covenants, provisions and agreements by
or on behalf of the Borrower which are contained in the Loan Documents shall
inure to the benefit of the successors and permitted assigns of the Lenders or
any of them.
XI.5. EXPENSES. The Borrower agrees to pay on demand all costs and
expenses of the Agent in connection with the syndication, preparation,
execution, delivery, administration, modification, and amendment of this
Agreement, the other Loan Documents, and the other documents to be delivered
hereunder, including, without limitation, the reasonable fees and expenses of
counsel for the Agent (including the cost of internal counsel) with respect
thereto and with respect to advising the Agent as to its rights and
responsibilities under the Loan Documents. The Borrower further agrees to pay on
demand all costs and expenses of the Agent
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and the Lenders, if any (including, without limitation, reasonable attorneys'
fees and expenses and the cost of internal counsel), in connection with the
enforcement (whether through negotiations, legal proceedings, or otherwise) of
the Loan Documents and the other documents to be delivered hereunder.
XI.6. AMENDMENTS AND WAIVERS. Any provision of this Agreement or any
other Loan Document may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed by the Borrower and the Required Lenders
(and, if ARTICLE X or the rights or duties of the Agent are affected thereby, by
the Agent); PROVIDED that no such amendment or waiver shall, unless signed by
all the Lenders, (i) increase the Revolving Credit Commitments of the Lenders,
(ii) reduce the principal of or rate of interest on any Loan or any fees,
Reimbursement Obligations or other amounts payable hereunder, (iii) postpone any
date fixed for the payment of any scheduled installment of principal of or
interest on any Loan or any fees, Reimbursement Obligations or other amounts
payable hereunder or for termination of any Revolving Credit Commitment, (iv)
change the percentage of the Revolving Credit Commitments or of the unpaid
principal amount of the Notes, or the number of Lenders, which shall be required
for the Lenders or any of them to take any action under this SECTION 11.6 or any
other provision of this Agreement or (v) release any Guarantor; and PROVIDED,
FURTHER, that no such amendment or waiver that affects the rights, privileges or
obligations of NationsBank as provider of Swing Line Loans, shall be effective
unless signed in writing by NationsBank or that affects the rights, privileges
or obligations of the Issuing Bank as issuer of Letters of Credit, shall be
effective unless signed in writing by the Issuing Bank. Notwithstanding any
provision of the other Loan Documents to the contrary, as between the Agent and
the Lenders, execution by the Agent shall not be deemed conclusive evidence that
the Agent has obtained the written consent of the Required Lenders. No notice to
or demand on the Borrower in any case shall entitle the Borrower to any other or
further notice or demand in similar or other circumstances, except as otherwise
expressly provided herein. No delay or omission on any Lender's or the Agent's
part in exercising any right, remedy or option shall operate as a waiver of such
or any other right, remedy or option or of any Default or Event of Default.
XI.7. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, and it shall not be necessary in making proof of this Agreement to
produce or account for more than one such fully-executed counterpart.
XI.8. TERMINATION. The termination of this Agreement shall not affect
any rights of the Borrower, the Lenders or the Agent or any obligation of the
Borrower, the Lenders or the Agent, arising prior to the effective date of such
termination, and the provisions hereof shall continue to be fully operative
until all transactions entered into or rights created or obligations incurred
prior to such termination have been fully disposed of, concluded or liquidated
and the Obligations arising prior to or after such termination have been
irrevocably paid in full. The rights granted to the Agent for the benefit of the
Lenders under the Loan Documents shall continue in full force and effect,
notwithstanding the termination of this Agreement, until all of the Obligations
have been paid in full after the termination hereof (other than Obligations in
the
87
nature of continuing indemnities or expense reimbursement obligations not yet
due and payable, which shall continue) or the Borrower has furnished the Lenders
and the Agent with an indemnification satisfactory to the Agent and each Lender
with respect thereto. All representations, warranties, covenants, waivers and
agreements contained herein shall survive termination hereof until payment in
full of the Obligations unless otherwise provided herein. Notwithstanding the
foregoing, if after receipt of any payment of all or any part of the
Obligations, any Lender is for any reason compelled to surrender such payment to
any Person because such payment is determined to be void or voidable as a
preference, impermissible setoff, a diversion of trust funds or for any other
reason, this Agreement shall continue in full force and the Borrower shall be
liable to, and shall indemnify and hold the Agent or such Lender harmless for,
the amount of such payment surrendered until the Agent or such Lender shall have
been finally and irrevocably paid in full. The provisions of the foregoing
sentence shall be and remain effective notwithstanding any contrary action which
may have been taken by the Agent or the Lenders in reliance upon such payment,
and any such contrary action so taken shall be without prejudice to the Agent or
the Lenders' rights under this Agreement and shall be deemed to have been
conditioned upon such payment having become final and irrevocable.
XI.9. INDEMNIFICATION; LIMITATION OF LIABILITY. (a) The Borrower
agrees to indemnify and hold harmless the Agent and each Lender and each of
their affiliates and their respective officers, directors, employees, agents,
and advisors (each, an "Indemnified Party") from and against any and all claims,
damages, losses, liabilities, costs, and expenses (including, without
limitation, reasonable attorneys' fees) that may be incurred by or asserted or
awarded against any Indemnified Party, in each case arising out of or in
connection with or by reason of (including, without limitation, in connection
with any investigation, litigation, or proceeding or preparation of defense in
connection therewith) the Loan Documents, any of the transactions contemplated
herein or the actual or proposed use of the proceeds of the Loan, except to the
extent such claim, damage, loss, liability, cost, or expense is found in a
final, non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party's gross negligence or willful misconduct.
In the case of an investigation, litigation or other proceeding to which the
indemnity in this SECTION 11.9 applies, such indemnity shall be effective
whether or not such investigation, litigation or proceeding is brought by the
Borrower, its directors, shareholders or creditors or an Indemnified Party or
any other Person or any Indemnified Party is otherwise a party thereto and
whether or not the transactions contemplated hereby are consummated. The
Borrower agrees not to assert any claim against the Agent, any Lender, any of
their affiliates, or any of their respective directors, officers, employees,
attorneys, agents, and advisers, on any theory of liability, for special,
indirect, consequential, or punitive damages arising out of or otherwise
relating to the Loan Documents, any of the transactions contemplated herein or
the actual or proposed use of the proceeds of the Loans.
(b) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this SECTION 13.9 shall survive the payment in full of the Loans and all other
amounts payable under this Agreement.
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XI.10. SEVERABILITY. If any provision of this Agreement or the other
Loan Documents shall be determined to be illegal or invalid as to one or more of
the parties hereto, then such provision shall remain in effect with respect to
all parties, if any, as to whom such provision is neither illegal nor invalid,
and in any event all other provisions hereof shall remain effective and binding
on the parties hereto.
XI.11. ENTIRE AGREEMENT. This Agreement, together with the other Loan
Documents, constitutes the entire agreement among the parties with respect to
the subject matter hereof and supersedes all previous proposals, negotiations,
representations, commitments and other communications between or among the
parties, both oral and written, with respect thereto.
XI.12. AGREEMENT CONTROLS. In the event that any term of any of the
Loan Documents other than this Agreement conflicts with any express term of this
Agreement, the terms and provisions of this Agreement shall control to the
extent of such conflict.
XI.13. USURY SAVINGS CLAUSE. Notwithstanding any other provision
herein, the aggregate interest rate charged under any of the Notes, including
all charges or fees in connection therewith deemed in the nature of interest
under applicable law shall not exceed the Highest Lawful Rate (as such term is
defined below). If the rate of interest (determined without regard to the
preceding sentence) under this Agreement at any time exceeds the Highest Lawful
Rate (as defined below), the outstanding amount of the Loans made hereunder
shall bear interest at the Highest Lawful Rate until the total amount of
interest due hereunder equals the amount of interest which would have been due
hereunder if the stated rates of interest set forth in this Agreement had at all
times been in effect. In addition, if when the Loans made hereunder are repaid
in full the total interest due hereunder (taking into account the increase
provided for above) is less than the total amount of interest which would have
been due hereunder if the stated rates of interest set forth in this Agreement
had at all times been in effect, then to the extent permitted by law, the
Borrower shall pay to the Agent an amount equal to the difference between the
amount of interest paid and the amount of interest which would have been paid if
the Highest Lawful Rate had at all times been in effect. Notwithstanding the
foregoing, it is the intention of the Lenders and the Borrower to conform
strictly to any applicable usury laws. Accordingly, if any Lender contracts for,
charges, or receives any consideration which constitutes interest in excess of
the Highest Lawful Rate, then any such excess shall be cancelled automatically
and, if previously paid, shall at such Lender's option be applied to the
outstanding amount of the Loans made hereunder or be refunded to the Borrower.
As used in this paragraph, the term "Highest Lawful Rate" means the maximum
lawful interest rate, if any, that at any time or from time to time may be
contracted for, charged, or received under the laws applicable to such Lender
which are presently in effect or, to the extent allowed by law, under such
applicable laws which may hereafter be in effect and which allow a higher
maximum nonusurious interest rate than applicable laws now allow.
XI.14. CONFIDENTIALITY. The Agent, Issuing Bank, each Lender and any
participant in a Loan shall hold and cause its respective agents, officers,
employees and representatives to hold all non-public information obtained from
any Credit Party pursuant to the requirements of this
89
Agreement or any Loan Document in accordance with its customary procedures for
handling confidential information of similar nature but may, in any event, make
disclosures reasonably required in connection with the contemplated transfer or
assignment of any of the Loans or Participations or as required or requested by
any legal process of any applicable Governmental Authority.
XI.15. GOVERNING LAW; WAIVER OF JURY TRIAL.
(a) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER THAN
THOSE SECURITY INSTRUMENTS WHICH EXPRESSLY PROVIDE THAT THEY SHALL BE
GOVERNED BY THE LAWS OF ANOTHER JURISDICTION) SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NORTH CAROLINA
APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH
STATE.
(b) THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY AGREES AND
CONSENTS THAT ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN MAY BE
INSTITUTED IN ANY STATE OR FEDERAL COURT SITTING IN THE COUNTY OF
MECKLENBURG, STATE OF NORTH CAROLINA, UNITED STATES OF AMERICA AND, BY
THE EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER EXPRESSLY
WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF
VENUE IN, OR TO THE EXERCISE OF JURISDICTION OVER IT AND ITS PROPERTY
BY, ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING, AND THE
BORROWER HEREBY IRREVOCABLY SUBMITS GENERALLY AND UNCONDITIONALLY TO
THE JURISDICTION OF ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR
PROCEEDING.
(c) THE BORROWER AGREES THAT SERVICE OF PROCESS MAY BE MADE BY
PERSONAL SERVICE OF A COPY OF THE SUMMONS AND COMPLAINT OR OTHER LEGAL
PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING, OR BY REGISTERED OR
CERTIFIED MAIL (POSTAGE PREPAID) TO THE ADDRESS OF THE BORROWER
PROVIDED IN SECTION 11.2, OR BY ANY OTHER METHOD OF SERVICE PROVIDED
FOR UNDER THE APPLICABLE LAWS IN EFFECT IN THE STATE OF NORTH CAROLINA.
(d) NOTHING CONTAINED IN SUBSECTIONS (A) OR (B) HEREOF SHALL
PRECLUDE THE AGENT OR ANY LENDER FROM BRINGING ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT IN THE
COURTS OF ANY JURISDICTION WHERE THE BORROWER OR ANY OF THE BORROWER'S
PROPERTY OR ASSETS MAY
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BE FOUND OR LOCATED. TO THE EXTENT PERMITTED BY THE APPLICABLE LAWS OF
ANY SUCH JURISDICTION, THE BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY SUCH COURT AND EXPRESSLY WAIVES, IN RESPECT OF ANY
SUCH SUIT, ACTION OR PROCEEDING, OBJECTION TO THE EXERCISE OF
JURISDICTION OVER IT AND ITS PROPERTY BY ANY SUCH OTHER COURT OR
COURTS WHICH NOW OR HEREAFTER MAY BE AVAILABLE UNDER APPLICABLE LAW.
(e) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS OR REMEDIES UNDER OR RELATED TO ANY LOAN DOCUMENT OR ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN
THE FUTURE BE DELIVERED IN CONNECTION THEREWITH, THE BORROWER, THE
AGENT AND THE LENDERS HEREBY AGREE, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED
BEFORE A COURT AND NOT BEFORE A JURY AND HEREBY IRREVOCABLY WAIVE, TO
THE EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PERSON MAY HAVE
TO TRIAL BY JURY IN ANY SUCH ACTION OR PROCEEDING.
[Signatures on following pages]
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be made, executed and delivered by their duly authorized officers as of the day
and year first above written.
WATSCO, INC.
WITNESS:
_____________________ By: /S/ XXXXX X. XXXXX
--------------------------------------------------
Name: Xxxxx X. Xxxxx
_____________________ Title: Vice President Finance and Chief Financial
Officer
NATIONSBANK, NATIONAL ASSOCIATION,
as Agent for the Lenders
By: /S/ XXXXXX XXXXX
------------------------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
