1
EXHIBIT 4.3
CREDIT AGREEMENT
Dated as of July 2, 1998
among
XXXXXXX INDUSTRIES INC.
as Borrower,
AND
CERTAIN SUBSIDIARIES OF THE BORROWER
FROM TIME TO TIME PARTY HERETO,
as Guarantors,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTY HERETO
AND
FIRST UNION NATIONAL BANK,
as Agent
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TABLE OF CONTENTS
SECTION 1 DEFINITIONS....................................................1
1.1 Definitions.....................................................1
1.2 Computation of Time Periods....................................22
1.3 Accounting Terms...............................................23
SECTION 2 CREDIT FACILITIES.............................................23
2.1 Revolving Loans................................................23
2.2 Letter of Credit Subfacility...................................25
SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES................30
3.1 Default Rate...................................................30
3.2 Extension and Conversion.......................................30
3.3 Prepayments....................................................31
3.4 Termination and Reduction of Revolving Committed Amount........32
3.5 Fees...........................................................32
3.6 Capital Adequacy...............................................33
3.7 Limitation on Eurodollar Loans.................................34
3.8 Illegality.....................................................34
3.9 Requirements of Law............................................34
3.10 Treatment of Affected Loans...................................35
3.11 Taxes.........................................................36
3.12 Compensation..................................................38
3.13 Pro Rata Treatment............................................38
3.14 Sharing of Payments...........................................39
3.15 Payments, Computations, Etc...................................40
3.16 Evidence of Debt..............................................42
3.17 Assignment of Commitment Under Certain Circumstances..........42
SECTION 4 GUARANTY......................................................43
4.1 The Guaranty...................................................43
4.2 Obligations Unconditional......................................43
4.3 Reinstatement..................................................44
4.4 Certain Additional Waivers.....................................45
4.5 Remedies.......................................................45
4.6 Rights of Contribution.........................................45
4.7 Continuing Guarantee...........................................46
SECTION 5 CONDITIONS....................................................46
5.1 Closing Conditions.............................................46
5.2 Conditions to all Extensions of Credit.........................52
SECTION 6 REPRESENTATIONS AND WARRANTIES................................53
6.1 Financial Condition............................................53
6.2 No Material Change.............................................54
6.3 Organization and Good Standing.................................54
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6.4 Power; Authorization; Enforceable Obligations..................54
6.5 No Conflicts...................................................54
6.6 No Default.....................................................55
6.7 Ownership......................................................55
6.8 Indebtedness...................................................55
6.9 Litigation.....................................................55
6.10 Taxes.........................................................55
6.11 Compliance with Law...........................................56
6.12 ERISA.........................................................56
6.13 Subsidiaries..................................................57
6.14 Governmental Regulations, Etc.................................57
6.15 Purpose of Loans and Letters of Credit........................58
6.16 Environmental Matters.........................................58
6.17 Intellectual Property.........................................59
6.18 Solvency......................................................60
6.19 Investments...................................................60
6.20 Location of Collateral........................................60
6.21 Disclosure....................................................60
6.22 No Burdensome Restrictions....................................60
6.23 Brokers' Fees.................................................61
6.24 Labor Matters.................................................61
6.25 Nature of Business............................................61
6.26 Year 2000 Compliance..........................................61
SECTION 7 AFFIRMATIVE COVENANTS.........................................61
7.1 Information Covenants..........................................61
7.2 Preservation of Existence and Franchises.......................65
7.3 Books and Records..............................................65
7.4 Compliance with Law............................................65
7.5 Payment of Taxes and Other Indebtedness........................65
7.6 Insurance......................................................66
7.7 Maintenance of Property........................................66
7.8 Performance of Obligations.....................................66
7.9 Use of Proceeds................................................67
7.10 Audits/Inspections............................................67
7.11 Financial Covenants...........................................67
7.12 Additional Credit Parties.....................................68
7.13 Pledged Assets................................................68
7.14 Year 2000 Compliance..........................................69
SECTION 8 NEGATIVE COVENANTS............................................69
8.1 Indebtedness...................................................69
8.2 Liens..........................................................70
8.3 Nature of Business.............................................70
8.4 Consolidation, Merger, Dissolution, etc........................71
8.5 Asset Dispositions.............................................71
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8.6 Investments....................................................72
8.7 Restricted Payments............................................72
8.8 Prepayments of Indebtedness, etc...............................72
8.9 Transactions with Affiliates...................................72
8.10 Fiscal Year; Organizational Documents.........................73
8.11 Limitation on Restricted Actions..............................73
8.12 Ownership of Subsidiaries.....................................73
8.13 Sale Leasebacks...............................................74
SECTION 9 EVENTS OF DEFAULT.............................................74
9.1 Events of Default..............................................74
9.2 Acceleration; Remedies.........................................76
SECTION 10 AGENCY PROVISIONS............................................77
10.1 Appointment, Powers and Immunities............................77
10.2 Reliance by Agent.............................................78
10.3 Defaults......................................................78
10.4 Rights as a Lender............................................78
10.5 Indemnification...............................................79
10.6 Non-Reliance on Agent and Other Lenders.......................79
10.7 Successor Agent...............................................79
SECTION 11 MISCELLANEOUS................................................80
11.1 Notices.......................................................80
11.2 Right of Set-Off; Adjustments.................................81
11.3 Benefit of Agreement..........................................81
11.4 No Waiver; Remedies Cumulative................................83
11.5 Expenses; Indemnification.....................................83
11.6 Amendments, Waivers and Consents..............................84
11.7 Counterparts..................................................85
11.8 Headings......................................................86
11.9 Survival......................................................86
11.10 Governing Law; Submission to Jurisdiction; Venue.............86
11.11 Severability.................................................87
11.12 Entirety.....................................................87
11.13 Binding Effect; Termination..................................87
11.14 Source of Funds..............................................87
11.15 Conflict.....................................................88
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EXHIBITS
Exhibit 1.1A Form of Pledge Agreement
Exhibit 1.1B Form of Security Agreement
Exhibit 2.1(b)(i) Form of Notice of Borrowing
Exhibit 2.1(b)(iii) Form of Notice of Account Designation
Exhibit 2.1(e) Form of Revolving Note
Exhibit 3.2 Form of Notice of Extension/Conversion
Exhibit 3.3(a) Form of Notice of Prepayment
Exhibit 5.1(d) Form of Legal Opinion
Exhibit 7.1(d) Form of Officer's Compliance Certificate
Exhibit 7.12 Form of Joinder Agreement
Exhibit 11.3(b) Form of Assignment and Acceptance
SCHEDULES
Schedule 1.1A Investments
Schedule 1.1B Liens
Schedule 2.1(a) Lenders
Schedule 6.4 Required Consents, Authorizations, Notices and Filings
Schedule 6.9 Litigation
Schedule 6.12 ERISA
Schedule 6.13 Subsidiaries
Schedule 6.16 Environmental Disclosures
Schedule 6.17 Intellectual Property
Schedule 6.20(a) Mortgaged Properties
Schedule 6.20(b) Collateral Locations
Schedule 6.20(c) Chief Executive Offices/Principal Places of Business
Schedule 7.6 Insurance
Schedule 8.1 Indebtedness
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of July 2, 1998 (as amended, modified,
restated or supplemented from time to time, the "CREDIT AGREEMENT"), is by and
among XXXXXXX INDUSTRIES INC., a Delaware corporation (the "BORROWER"), the
Guarantors (as defined herein), the Lenders (as defined herein) and FIRST UNION
NATIONAL BANK, as Agent for the Lenders (in such capacity, the "AGENT").
W I T N E S S E T H
WHEREAS, the Borrower has requested that the Lenders provide a $30,000,000
credit facility for the purposes hereinafter set forth; and
WHEREAS, the Lenders have agreed to make the requested credit facility
available to the Borrower on the terms and conditions hereinafter set forth;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS
1.1 DEFINITIONS.
As used in this Credit Agreement, the following terms shall have the
meanings specified below unless the context otherwise requires:
"ACQUIRED COMPANY EBITDA" means with respect to any Person acquired
in connection with a Permitted Acquisition, for any period, the sum of (i)
net income (excluding extraordinary items) of such Person and its
Subsidiaries on a consolidated basis PLUS (ii) an amount which in the
determination of such net income has been deducted for (A) interest
expense of such Person and its Subsidiaries on a consolidated basis, (B)
total federal, state, local and foreign income, value added and similar
taxes and (C) depreciation, amortization and other non-cash charges for
such period, all as determined in accordance with GAAP.
"ACQUISITION" means the acquisition by any Person of the Capital
Stock or all or substantially all of the Property of another Person,
whether or not involving a merger or consolidation with such Person.
"ADDITIONAL CREDIT PARTY" means each Person that becomes a Guarantor
after the Closing Date by execution of a Joinder Agreement.
"ADJUSTED BASE RATE" means the Base Rate PLUS the Applicable Margin.
"ADJUSTED EURODOLLAR RATE" means the Eurodollar Rate PLUS the
Applicable Margin.
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"AFFILIATE" means, with respect to any Person, any other Person (a)
directly or indirectly controlling or controlled by or under direct or
indirect common control with such Person or (b) directly or indirectly
owning or holding ten percent (10%) or more of the equity interest in such
Person. For purposes of this definition, "control" when used with respect
to any Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise; and the terms "controlling"
and "controlled" have meanings correlative to the foregoing.
"AGENT" shall have the meaning assigned to such term in the heading
hereof, together with any successors or assigns.
"AGENT'S FEE LETTER" means that certain letter agreement, dated as
of June 16, 1998, between the Agent and the Borrower, as amended,
modified, restated or supplemented from time to time.
"AGENT'S FEES" shall have the meaning assigned to such term in
Section 3.5(c).
"APPLICABLE LENDING OFFICE" means, for each Lender, the office of
such Lender (or of an Affiliate of such Lender) as such Lender may from
time to time specify to the Agent and the Borrower by written notice as
the office by which its Eurodollar Loans are made and maintained.
"APPLICABLE MARGIN" means, for purposes of calculating the
applicable interest rate for any day for any Revolving Loan, the
applicable rate of the Commitment Fee for any day for purposes of Section
3.5(a) and the applicable rate of the Standby Letter of Credit Fee for any
day for purposes of Section 3.5(b)(i), the appropriate Applicable Margin
corresponding to the Leverage Ratio in effect as of the most recent
Calculation Date:
====================================================================================================
APPLICABLE
APPLICABLE APPLICABLE MARGINEFOR APPLICABLE
MARGIN FOR MARGIN FOR STANDBY MARGIN FOR
PRICING LEVERAGE EURODOLLAR BASE RATE LETTER OF COMMITMENT
LEVEL RATIO LOANS LOANS CREDIT FEE FEES
----------------------------------------------------------------------------------------------------
I (greater than or equal sign) 2.25% 1.00% 2.25% .50%
5.0 to 1.0
----------------------------------------------------------------------------------------------------
II (less than sign) 5.0 to 1.0 2.00% .875% 2.00% .50%
but (greater than or equal
sign) 4.5 to 1.0
----------------------------------------------------------------------------------------------------
III (less than sign) 4.5 to 1.0 1.75% .50% 1.75% .375%
but (greater than or equal
sign) 4.0 to 1.0
----------------------------------------------------------------------------------------------------
IV (less than sign) 4.0 to 1.0 1.50% .25% 1.50% .375%
but (greater than or equal
sign) 3.5 to 1.0
====================================================================================================
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====================================================================================================
APPLICABLE
APPLICABLE APPLICABLE MARGINEFOR APPLICABLE
MARGIN FOR MARGIN FOR STANDBY MARGIN FOR
PRICING LEVERAGE EURODOLLAR BASE RATE LETTER OF COMMITMENT
LEVEL RATIO LOANS LOANS CREDIT FEE FEES
----------------------------------------------------------------------------------------------------
V (less than sign) 3.5 to 1.0 1.25% 0.0% 1.25% .25%
====================================================================================================
The Applicable Margins shall be determined and adjusted quarterly, on the
date (each a "Calculation Date") as soon as practicable after receipt (but
in any event within 5 Business Days thereafter) of the officer's
certificate to be provided by the Borrower in accordance with the
provisions of Section 7.1(d) for the most recently ended fiscal quarter of
the Consolidated Parties, the first of which to occur on September 30,
1998, PROVIDED, HOWEVER, that (i) the initial Applicable Margins shall be
based on Pricing Level I (as shown above) and shall remain at Pricing
Level I until the Calculation Date immediately following September 30,
1998 and, thereafter, the Pricing Level shall be determined by the
Leverage Ratio as of the last day of the most recently ended fiscal
quarter of the Consolidated Parties preceding the applicable Calculation
Date; PROVIDED FURTHER that if the Borrower fails to provide the officer's
certificate required by Section 7.1(d) on or before the most recent
Calculation Date, the Applicable Margin from such Calculation Date shall
be based on Pricing Level I until such time as an appropriate officer's
certificate is provided whereupon the Pricing Level shall be determined by
the then current Leverage Ratio. Each Applicable Margin shall be effective
from one Calculation Date until the next Calculation Date. Any adjustment
in the Applicable Margins shall be applicable to all existing Loans as
well as any new Loans made or issued.
"ASSET DISPOSITION" means the disposition of any or all of the
assets (including without limitation the Capital Stock of a Subsidiary) of
any Consolidated Party whether by sale, lease, transfer or otherwise. The
term "Asset Disposition" shall not include the (i) sale of inventory in
the ordinary course of business or (ii) the sale or disposition of
worn-out or obsolete assets no longer used or useful in the conduct of
such Person's business or (iii) dispositions of assets for which
Replacement Assets are acquired within 180 days of such disposition
provided that such Replacement Assets are pledged to secure the Credit
Party Obligations as set forth in Section 7.13.
"BANKRUPTCY CODE" means the Bankruptcy Code in Title 11 of the
United States Code, as amended, modified, succeeded or replaced from time
to time.
"BANKRUPTCY EVENT" means, with respect to any Person, the occurrence
of any of the following with respect to such Person: (a) a court or
governmental agency having jurisdiction in the premises shall enter a
decree or order for relief in respect of such Person in an involuntary
case under any applicable bankruptcy, insolvency or other similar law now
or hereafter in effect, or appointing a receiver,
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liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of such Person or for any substantial part of its Property or
ordering the winding up or liquidation of its affairs; or (b) there shall
be commenced against such Person an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
any case, proceeding or other action for the appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of such Person or for any substantial part of its Property or
for the winding up or liquidation of its affairs, and such involuntary
case or other case, proceeding or other action shall remain undismissed,
undischarged or unbonded for a period of sixty (60) consecutive days; or
(c) such Person shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
consent to the entry of an order for relief in an involuntary case under
any such law, or consent to the appointment or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or
similar official) of such Person or for any substantial part of its
Property or make any general assignment for the benefit of creditors; or
(d) such Person shall be unable to, or shall admit in writing its
inability to, pay its debts generally as they become due.
"BASE RATE" means, for any day, the rate per annum equal to the
higher of (a) the Federal Funds Rate for such day plus one-half of one
percent (.5%) and (b) the Prime Rate for such day. Any change in the Base
Rate due to a change in the Prime Rate or the Federal Funds Rate shall be
effective on the effective date of such change in the Prime Rate or
Federal Funds Rate.
"BASE RATE LOAN" means any Loan bearing interest at a rate
determined by reference to the Base Rate.
"BORROWER" means the Person identified as such in the heading
hereof, together with any permitted successors and assigns.
"BUSINESS DAY" means a day other than a Saturday, Sunday or other
day on which commercial banks in Charlotte, North Carolina or New York,
New York are authorized or required by law to close, EXCEPT THAT, when
used in connection with a Eurodollar Loan, such day shall also be a day on
which dealings between banks are carried on in U.S. dollar deposits in
London, England.
"CALCULATION DATE" has the meaning set forth in the definition of
"Applicable Margin" set forth in this Section 1.1.
"CAPITAL LEASE" means, as applied to any Person, any lease of any
Property (whether real, personal or mixed) by that Person as lessee which,
in accordance with GAAP, is or should be accounted for as a capital lease
on the balance sheet of that Person.
"CAPITAL STOCK" means (a) in the case of a corporation, capital
stock, (b) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of capital stock, (c) in the case of a partnership,
partnership interests (whether general or limited), (d) in the case of a
limited liability company, membership interests and (e) any other interest
or participation that confers on a Person the right to receive a share of
the profits and losses of, or distributions of assets of, the issuing
Person.
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"CASH EQUIVALENTS" means (a) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the
United States of America is pledged in support thereof) having maturities
of not more than twelve months from the date of acquisition, (b) U.S.
dollar denominated time deposits and certificates of deposit of (i) any
Lender, (ii) any domestic commercial bank of recognized standing having
capital and surplus in excess of $500,000,000 or (iii) any bank whose
short-term commercial paper rating from S&P is at least A-1 or the
equivalent thereof or from Xxxxx'x is at least P-1 or the equivalent
thereof (any such bank being an "APPROVED BANK"), in each case with
maturities of not more than 270 days from the date of acquisition, (c)
commercial paper and variable or fixed rate notes issued by any Approved
Bank (or by the parent company thereof) or any variable rate notes issued
by, or guaranteed by, any domestic corporation rated A-1 (or the
equivalent thereof) or better by S&P or P-1 (or the equivalent thereof) or
better by Moody's and maturing within six months of the date of
acquisition, (d) repurchase agreements with a bank or trust company
(including any of the Lenders) or recognized securities dealer having
capital and surplus in excess of $500,000,000 for direct obligations
issued by or fully guaranteed by the United States of America in which any
Credit Party shall have a perfected first priority security interest
(subject to no other Liens) and having, on the date of purchase thereof, a
fair market value of at least 100% of the amount of the repurchase
obligations and (e) Investments, classified in accordance with GAAP as
current assets, in money market investment programs registered under the
Investment Company Act of 1940, as amended, which are administered by
reputable financial institutions having capital of at least $500,000,000
and the portfolios of which are limited to Investments of the character
described in the foregoing subdivisions (a) through (d).
"CHANGE OF CONTROL" means the occurrence of one or more of the
following events: (i) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or substantially
all of the assets of the Borrower to any Person or group of related
Persons for purposes of Section 13(d) of the Exchange Act (a "Group"),
together with Affiliates thereof; (ii) the approval by the holders of
Capital Stock of the Borrower of any plan or proposal for the liquidation
or dissolution of the Borrower; (iii) any Person or Group (other than the
Permitted Holder(s)) shall become the beneficial owner, directly or
indirectly, of shares representing more than 50% of the aggregate ordinary
voting power represented by the issued and outstanding Capital Stock of
the Borrower or (iv) Fleet Equity Partners VI-B, L.P. and/or any of its
Affiliates shall fail to own in excess of 30% of the aggregate ordinary
voting power represented by the issued and outstanding Capital Stock of
the Borrower.
"CLOSING DATE" means the date hereof.
"CODE" means the Internal Revenue Code of 1986, as amended, and any
successor statute thereto, as interpreted by the rules and regulations
issued thereunder, in each case as in effect from time to time. References
to sections of the Code shall be construed also to refer to any successor
sections.
"COLLATERAL" means a collective reference to the collateral which is
identified in, and at any time will be covered by, the Collateral
Documents.
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"COLLATERAL DOCUMENTS" means a collective reference to the Security
Agreement, the Pledge Agreement, the Mortgage Instruments and such other
documents executed and delivered in connection with the attachment and
perfection of the Agent's security interests and liens arising thereunder,
including without limitation, UCC financing statements and patent and
trademark filings.
"COMMITMENT" means (a) with respect to each Lender, the Revolving
Commitment of such Lender and (b) with respect to the Issuing Lender, the
LOC Commitment.
"COMMITMENT FEE" shall have the meaning assigned to such term in
Section 3.5(a).
"COMMITMENT FEE CALCULATION PERIOD" shall have the meaning assigned
to such term in Section 3.5(a).
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, all
capital expenditures of the Consolidated Parties on a consolidated basis
for such period, as determined in accordance with GAAP.
"CONSOLIDATED CASH TAXES" means, for any period, the aggregate of
all taxes of the Consolidated Parties on a consolidated basis for such
period, as determined in accordance with GAAP, to the extent the same are
paid in cash during such period.
"CONSOLIDATED EBITDA" means, for any period, the sum of (a)
Consolidated Net Income for such period, plus (b) an amount which, in the
determination of Consolidated Net Income for such period, has been
deducted for (i) Consolidated Interest Expense, (ii) total accrued
federal, state, local and foreign income, value added and similar taxes,
(iii) depreciation, amortization and any other non-cash charges for such
period, all as determined in accordance with GAAP, and (iv) expenses
incurred in connection with the Related Transactions in an aggregate
amount not to exceed $5,000,000.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, interest
expense (excluding the amortization of debt discount and premium but
including the interest component under Capital Leases) of the Consolidated
Parties on a consolidated basis for such period, and as determined in
accordance with GAAP. For purposes hereof, Consolidated Interest Expense
of the Consolidated Parties for the first three complete fiscal quarters
to occur after the Closing Date shall be determined by annualizing the
components thereof such that Consolidated Interest Expense for the first
complete fiscal quarter to occur after the Closing Date would be
multiplied by four (4), the first two (2) complete fiscal quarters would
be multiplied by two (2) and the first three (3) complete fiscal quarters
would be multiplied by one and one-third (1 1/3).
"CONSOLIDATED NET INCOME" means, for any period, net income
(excluding extraordinary items) after taxes for such period of the
Consolidated Parties on a consolidated basis, as determined in accordance
with GAAP.
"CONSOLIDATED PARTIES" means a collective reference to the Borrower
and its Subsidiaries, and "CONSOLIDATED PARTY" means any one of them.
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"CONTINUE", "CONTINUATION", and "CONTINUED" shall refer to the
continuation pursuant to Section 3.2 hereof of a Eurodollar Loan from one
Interest Period to the next Interest Period.
"CONVERT", "CONVERSION", and "CONVERTED" shall refer to a conversion
pursuant to Section 3.2 or Sections 3.7 through 3.12, inclusive, of a Base
Rate Loan into a Eurodollar Loan.
"CREDIT DOCUMENTS" means a collective reference to this Credit
Agreement, the Notes, the LOC Documents, each Joinder Agreement, the
Agent's Fee Letter, the Collateral Documents and all other related
agreements and documents issued or delivered hereunder or thereunder or
pursuant hereto or thereto (in each case as the same may be amended,
modified, restated, supplemented, extended, renewed or replaced from time
to time), and "CREDIT DOCUMENT" means any one of them.
"CREDIT PARTIES" means a collective reference to the Borrower and
the Guarantors, and "CREDIT PARTY" means any one of them.
"CREDIT PARTY OBLIGATIONS" means, without duplication, (a) all of
the obligations of the Credit Parties to the Lenders (including the
Issuing Lender) and the Agent, whenever arising, under this Credit
Agreement, the Notes, the Collateral Documents or any of the other Credit
Documents (including, but not limited to, any interest accruing after the
occurrence of a Bankruptcy Event with respect to any Credit Party,
regardless of whether such interest is an allowed claim under the
Bankruptcy Code) and (b) all liabilities and obligations, whenever
arising, owing from any Credit Party to any Lender, or any Affiliate of a
Lender, arising under any Hedging Agreement.
"DEFAULT" means any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"DEFAULTING LENDER" means, at any time, any Lender that (a) has
failed to make a Loan or purchase a Participation Interest required
pursuant to the terms of this Credit Agreement within one Business Day of
when due, (b) other than as set forth in (a) above, has failed to pay to
the Agent or any Lender an amount owed by such Lender pursuant to the
terms of this Credit Agreement within one Business Day of when due, or (c)
has been deemed insolvent or has become subject to a bankruptcy or
insolvency proceeding or with respect to which (or with respect to any of
assets of which) a receiver, trustee or similar official has been
appointed.
"DOLLARS" and "$" means dollars in lawful currency of the United
States of America.
"DOMESTIC SUBSIDIARY" means, with respect to any Person, any
Subsidiary of such Person which is incorporated or organized under the
laws of any State, possession or territory of the United States or the
District of Columbia.
"ELIGIBLE ASSETS" means another business or any substantial part of
another business or other long term assets, in each case, in, or used or
useful in, the same or a similar line of
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business as the Consolidated Parties were engaged in on the Closing Date
or any reasonable extensions or expansions thereof.
"ELIGIBLE ASSIGNEE" means (a) a Lender; (b) an Affiliate of a
Lender; and (c) any other Person approved by the Agent (such approval not
to be unreasonably withheld) and, unless an Event of Default has occurred
and is continuing at the time any assignment is effected in accordance
with Section 11.3, 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 five 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.
"ELIGIBLE DOMESTIC INVENTORY" means, as of any date of determination
and without duplication, the lower of the aggregate book value (based on a
FIFO or a moving average cost valuation, consistently applied) or fair
market value of all raw materials, work in process and finished goods
inventory owned by the Borrower or any of its Domestic Subsidiaries, less
appropriate reserves determined in accordance with GAAP but excluding in
any event (i) inventory which is (a) not subject to a perfected, first
priority Lien in favor for the Agent to secure the Credit Party
Obligations or (b) subject to any other Lien that is not a Permitted Lien,
(ii) inventory which fails to meet standards for sale or use imposed by
governmental agencies, departments or divisions having regulatory
authority over such goods, (iii) inventory which is not useable or salable
at prices approximating their cost in the ordinary course of the business
(including without duplication the amount of any reserves for
obsolescence, unsalability or decline in value), (iv) inventory located
outside of the United States, (v) inventory located at a leased location
with respect to which the Agent shall not have received a landlord's
waiver satisfactory to the Agent, (vi) inventory which is leased or on
consignment and (vii) inventory which fails to meet such other
specifications and requirements as may from time to time be established by
the Agent in its reasonable discretion.
"ELIGIBLE DOMESTIC RECEIVABLES" means, as of any date of
determination and without duplication, the aggregate book value of all
accounts receivable, receivables, and obligations for payment created or
arising from the sale of inventory or the rendering of services in the
ordinary course of business (collectively, the "RECEIVABLES"), owned by or
owing to the Borrower or any of its Domestic Subsidiaries, net of
allowances and reserves for doubtful or uncollectible accounts and sales
adjustments consistent with such Person's internal policies and in any
event in accordance with GAAP, but excluding in any event (i) any
Receivable which is (a) not subject to a perfected, first priority Lien in
favor for the Agent to secure the Credit Party Obligations or (b) subject
to any other Lien that is not a Permitted Lien, (ii) Receivables which are
more than 60 days past due or which are greater than 180 days past the
date of invoice (net of reserves for bad debts in connection with any such
Receivables), (iii) 50% of the book value of any Receivable not otherwise
excluded by clause (ii) above but owing from an account debtor which is
the account debtor on any existing Receivable then excluded by such clause
(ii), unless the exclusion by such clause (ii) is a result of a legitimate
dispute by the account debtor and the amount in dispute is less than
$50,000, (iv) Receivables evidenced by notes, chattel paper or other
instruments, unless such notes, chattel paper or instruments have been
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delivered to and are in the possession of the Agent, (v) Receivables owing
by an account debtor which is not solvent or is subject to any bankruptcy
or insolvency proceeding of any kind, (vi) Receivables which are
contingent or subject to offset, deduction, counterclaim, dispute or other
defense to payment, in each case to the extent of such offset, deduction,
counterclaim, dispute or other defense, (vii) Receivables for which any
direct or indirect Subsidiary or any Affiliate is the account debtor, and
(viii) Receivables which fail to meet such other specifications and
requirements as may from time to time be established by the Agent in its
reasonable discretion.
"ENVIRONMENTAL LAWS" means any and all lawful and applicable
Federal, state, local and foreign statutes, laws, regulations, ordinances,
rules, judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or other governmental restrictions
relating to the environment or to emissions, discharges, releases or
threatened releases of pollutants, contaminants, chemicals, or industrial,
toxic or hazardous substances or wastes into the environment including,
without limitation, ambient air, surface water, ground water, or land, or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous substances or
wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, and any successor statute thereto, as interpreted by the rules
and regulations thereunder, all as the same may be in effect from time to
time. References to sections of ERISA shall be construed also to refer to
any successor sections.
"ERISA AFFILIATE" means an entity which is under common control with
any Credit Party within the meaning of Section 4001(a)(14) of ERISA, or is
a member of a group which includes the Borrower and which is treated as a
single employer under Sections 414(b) or (c) of the Code.
"ERISA EVENT" means (a) with respect to any Plan, the occurrence of
a Reportable Event or the substantial cessation of operations (within the
meaning of Section 4062(e) of ERISA); (b) the withdrawal by any
Consolidated Party or any ERISA Affiliate from a Multiple Employer Plan
during a plan year in which it was a substantial employer (as such term is
defined in Section 4001(a)(2) of ERISA), or the termination of a Multiple
Employer Plan; (c) the distribution of a notice of intent to terminate or
the actual termination of a Plan pursuant to Section 4041(a)(2) or 4041A
of ERISA; (d) the institution of proceedings to terminate or the actual
termination of a Plan by the PBGC under Section 4042 of ERISA; (e) any
event or condition which might constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to
administer, any Plan; (f) the complete or partial withdrawal of any
Consolidated Party or any ERISA Affiliate from a Multiemployer Plan; (g)
the conditions for imposition of a lien under Section 302(f) of ERISA
exist with respect to any Plan; or (h) the adoption of an amendment to any
Plan requiring the provision of security to such Plan pursuant to Section
307 of ERISA.
"EURODOLLAR LOAN" means any Loan that bears interest at a rate based
upon the Eurodollar Rate.
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"EURODOLLAR RATE" means, for any Eurodollar Loan for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) determined by the Agent to be equal to the quotient
obtained by dividing (a) the London Interbank Offered Rate for such
Eurodollar Loan for such Interest Period by (b) 1 minus the Eurodollar
Reserve Requirement for such Eurodollar Loan for such Interest Period.
"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 Eurodollar Reserve Requirement shall reflect any other
reserves required to be maintained by such member banks with respect to
(a) any category of liabilities which includes deposits by reference to
which the Adjusted Eurodollar Rate is to be determined, or (b) any
category of extensions of credit or other assets which include Eurodollar
Loans. The Adjusted Eurodollar Rate shall be adjusted automatically on and
as of the effective date of any change in the Eurodollar Reserve
Requirement.
"EVENT OF DEFAULT" means such term as defined in Section 9.1.
"EXCLUDED ASSET DISPOSITION" means any Asset Disposition by any
Consolidated Party to any Credit Party if the Credit Parties shall cause
to be executed and delivered such documents, instruments and certificates
as the Agent may request so as to cause the Credit Parties to be in
compliance with the terms of Section 7.13 after giving effect to such
Asset Disposition.
"FEES" means all fees payable pursuant to Section 3.5.
"FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business
Day next succeeding such day; PROVIDED that (a) if such day is not a
Business Day, the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Business Day as so published on
the next succeeding Business Day, and (b) if no such rate is so published
on such next succeeding Business Day, the Federal Funds Rate for such day
shall be the average rate charged to the Agent (in its individual
capacity) on such day on such transactions as determined by the Agent.
"FIRST UNION NATIONAL BANK" means First Union National Bank and its
successors.
"FIXED CHARGE COVERAGE RATIO" means, as of the end of each fiscal
quarter of the Consolidated Parties for the twelve month period ending on
such date, the ratio of (a) Consolidated EBITDA for the applicable period
to (b) the sum of (i) Consolidated Interest Expense for the applicable
period PLUS (ii) Consolidated Capital Expenditures for the applicable
period PLUS (iii) Consolidated Cash Taxes for the applicable period.
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"FOREIGN SUBSIDIARY" means, with respect to any Person, any
Subsidiary of such Person which is not a Domestic Subsidiary of such
Person.
"FUNDED INDEBTEDNESS" means, with respect to any Person, without
duplication, (a) all obligations of such Person for borrowed money, (b)
all obligations of such Person evidenced by bonds, debentures, notes or
similar instruments, or upon which interest payments are customarily made,
(c) all obligations of such Person under conditional sale or other title
retention agreements relating to Property purchased by such Person (other
than customary reservations or retentions of title under agreements with
suppliers entered into in the ordinary course of business), (d) all
obligations of such Person issued or assumed as the deferred purchase
price of Property or services purchased by such Person (other than trade
debt incurred in the ordinary course of business and due within six months
of the incurrence thereof) which would appear as liabilities on a balance
sheet of such Person, (e) all Guaranty Obligations of such Person, (f) the
maximum amount of all standby letters of credit issued or bankers'
acceptances facilities created for the account of such Person and, without
duplication, all drafts drawn thereunder (to the extent unreimbursed), (g)
all preferred Capital Stock issued by such Person and required by the
terms thereof to be redeemed, or for which mandatory sinking fund payments
are due, by a fixed date, (h) Indebtedness in respect of any synthetic
lease, end loaded lease financing, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product to
which such Person is a party, (i) all Indebtedness of another Person of
the type referred to in clauses (a)-(h) above secured by (or for which the
holder of such Funded Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on, or payable out of the proceeds
of production from, Property owned or acquired by such Person, whether or
not the obligations secured thereby have been assumed, (j) all Guaranty
Obligations of such Person with respect to Indebtedness of the type
referred to in clauses (a)-(h) above of another Person and (k)
Indebtedness of the type referred to in clauses (a)-(h) above of any
partnership or unincorporated joint venture in which such Person is
legally obligated or has a reasonable expectation of being liable with
respect thereto.
"GAAP" means generally accepted accounting principles in the United
States applied on a consistent basis and subject to the terms of Section
1.3.
"GOVERNMENTAL AUTHORITY" means any Federal, state, local or foreign
court or governmental agency, authority, instrumentality or regulatory
body.
"GUARANTOR" means each of the Persons identified as a "Guarantor" on
the signature pages hereto and each Additional Credit Party which may
hereafter execute a Joinder Agreement, together with their successors and
permitted assigns, and "GUARANTOR" means any one of them.
"GUARANTY OBLIGATIONS" means, with respect to any Person, without
duplication, any obligations of such Person (other than endorsements in
the ordinary course of business of negotiable instruments for deposit or
collection) guaranteeing or intended to guarantee any Indebtedness of any
other Person in any manner, whether direct or indirect, and including
without limitation any obligation, whether or not contingent, (a) to
purchase any such Indebtedness or any Property constituting security
therefor, (b) to advance or provide funds or
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other support for the payment or purchase of any such Indebtedness or to
maintain working capital, solvency or other balance sheet condition of
such other Person (including without limitation keep well agreements,
maintenance agreements, comfort letters or similar agreements or
arrangements) for the benefit of any holder of Indebtedness of such other
Person, (c) to lease or purchase Property, securities or services
primarily for the purpose of assuring the holder of such Indebtedness, or
(d) to otherwise assure or hold harmless the holder of such Indebtedness
against loss in respect thereof. The amount of any Guaranty Obligation
hereunder shall (subject to any limitations set forth therein) be deemed
to be an amount equal to the outstanding principal amount (or maximum
principal amount, if larger) of the Indebtedness in respect of which such
Guaranty Obligation is made.
"HEDGING AGREEMENTS" means any interest rate protection agreement or
foreign currency exchange agreement between any Consolidated Party and any
Lender, or any Affiliate of a Lender.
"INDEBTEDNESS" of any Person means (a) all obligations of such
Person for borrowed money, (b) all obligations of such Person evidenced by
bonds, debentures, notes or similar instruments, or upon which interest
payments are customarily made, (c) all obligations of such Person under
conditional sale or other title retention agreements relating to Property
purchased by such Person (other than customary reservations or retentions
of title under agreements with suppliers entered into in the ordinary
course of business), (d) all obligations of such Person issued or assumed
as the deferred purchase price of Property or services purchased by such
Person (other than trade debt incurred in the ordinary course of business
and due within six months of the incurrence thereof) which would appear as
liabilities on a balance sheet of such Person, (e) all obligations of such
Person under take-or-pay or similar arrangements or under commodities
agreements, (f) all Indebtedness of others secured by (or for which the
holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on, or payable out of the proceeds
of production from, Property owned or acquired by such Person, whether or
not the obligations secured thereby have been assumed, (g) all Guaranty
Obligations of such Person, (h) the principal portion of all obligations
of such Person under Capital Leases, (i) all obligations of such Person
under Hedging Agreements, (j) the maximum amount of all standby letters of
credit issued or bankers' acceptances facilities created for the account
of such Person and, without duplication, all drafts drawn thereunder (to
the extent unreimbursed), (k) all preferred Capital Stock issued by such
Person and required by the terms thereof to be redeemed, or for which
mandatory sinking fund payments are due, by a fixed date and (l) the
Indebtedness of any partnership or unincorporated joint venture in which
such Person is a general partner or a joint venturer.
"INTEREST COVERAGE RATIO" means, with respect to the Consolidated
Parties on a consolidated basis for the twelve month period ending on the
last day of any fiscal quarter of the Consolidated Parties, the ratio of
(a) Consolidated EBITDA for such period to (b) Consolidated Interest
Expense for such period.
"INTEREST PAYMENT DATE" means (a) as to Base Rate Loans, the last
day of each calendar quarter of the Borrower and the Maturity Date, and
(b) as to Eurodollar Loans, the last day of each applicable Interest
Period and the Maturity Date and in addition where the applicable
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Interest Period for a Eurodollar Loan is greater than three months, then
also the date three months from the beginning of the Interest Period and
each three months thereafter.
"INTEREST PERIOD" means, as to Eurodollar Loans, a period of one,
two, three or six months' duration, as the Borrower may elect, commencing,
in each case, on the date of the borrowing (including continuations and
conversions thereof); PROVIDED, HOWEVER, (a) if any Interest Period would
end on a day which is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day (except that where the next
succeeding Business Day falls in the next succeeding calendar month, then
on the next preceding Business Day), (b) no Interest Period shall extend
beyond the Maturity Date and (c) where an Interest Period begins on a day
for which there is no numerically corresponding day in the calendar month
in which the Interest Period is to end, such Interest Period shall end on
the last Business Day of such calendar month.
"INVESTMENT" in any Person means (a) the acquisition (whether for
cash, property, services, assumption of Indebtedness, securities or
otherwise) of assets (excluding goods and inventory used or sold in the
ordinary course of business), shares of Capital Stock, bonds, notes,
debentures, partnership, joint ventures or other ownership interests or
other securities of such other Person or (b) any deposit with, or advance,
loan or other extension of credit to, such Person (other than deposits
made in connection with the purchase of equipment or other assets in the
ordinary course of business) or (c) any other capital contribution to or
investment in such Person, including, without limitation, any Guaranty
Obligations (including any support for a letter of credit issued on behalf
of such Person) incurred for the benefit of such Person, but excluding any
Restricted Payment to such Person.
"ISSUING LENDER" means First Union National Bank.
"ISSUING LENDER FEES" shall have the meaning assigned to such term
in Section 3.5(b)(iii).
"JOINDER AGREEMENT" means a Joinder Agreement substantially in the
form of EXHIBIT 7.12 hereto, executed and delivered by an Additional
Credit Party in accordance with the provisions of Section 7.12.
"LENDER" means any of the Persons identified as a "Lender" on the
signature pages hereto, and any Person which may become a Lender by way of
assignment in accordance with the terms hereof, together with their
successors and permitted assigns.
"LETTER OF CREDIT" means any letter of credit issued by the Issuing
Lender for the account of any Credit Party in accordance with the terms of
Section 2.2.
"LEVERAGE RATIO" means, with respect to the Consolidated Parties on
a consolidated basis for the twelve month period ending on the last day of
any fiscal quarter, the ratio of (a) Funded Indebtedness of the
Consolidated Parties on a consolidated basis on the last day of such
period to (b) Consolidated EBITDA for such period.
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"LIEN" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, security interest, encumbrance, lien (statutory or
otherwise), preference, priority or charge of any kind (including any
agreement to give any of the foregoing, any conditional sale or other
title retention agreement, any financing or similar statement or notice
filed under the Uniform Commercial Code as adopted and in effect in the
relevant jurisdiction or other similar recording or notice statute, and
any lease in the nature thereof).
"LOAN" or "LOANS" means the Revolving Loans (or a portion of any
Revolving Loan bearing interest at the Adjusted Base Rate or the Adjusted
Eurodollar Rate), individually or collectively, as appropriate.
"LOC COMMITMENT" means the commitment of the Issuing Lender to issue
Letters of Credit in an aggregate face amount at any time outstanding
(together with the amounts of any unreimbursed drawings thereon) of up to
the LOC Committed Amount.
"LOC COMMITTED AMOUNT" shall have the meaning assigned to such term
in Section 2.2.
"LOC DOCUMENTS" means, with respect to any Letter of Credit, such
Letter of Credit, any amendments thereto, any documents delivered in
connection therewith, any application therefor, and any agreements,
instruments, guarantees or other documents (whether general in application
or applicable only to such Letter of Credit) governing or providing for
(a) the rights and obligations of the parties concerned or at risk or (b)
any collateral security for such obligations.
"LOC OBLIGATIONS" means, at any time, the sum of (a) the maximum
amount which is, or at any time thereafter may become, available to be
drawn under Letters of Credit then outstanding, assuming compliance with
all requirements for drawings referred to in such Letters of Credit PLUS
(b) the aggregate amount of all drawings under Letters of Credit honored
by the Issuing Lender but not theretofore reimbursed by the Borrower.
"LONDON INTERBANK OFFERED RATE" shall mean, with respect to any
Eurodollar Loan for the Interest Period applicable thereto, the rate of
interest per annum (rounded upwards, if necessary, to the nearest 1/100 of
1%) appearing on Telerate Page 3750 (or any successor page) as the London
interbank offered rate for deposits in Dollars at approximately 11:00 A.M.
(London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period; PROVIDED, HOWEVER,
if more than one rate is specified on Telerate Page 3750, the applicable
rate shall be the arithmetic mean of all such rates. If, for any reason,
such rate is not available, the term "LONDON INTERBANK OFFERED RATE" shall
mean, with respect to any Eurodollar Loan for the Interest Period
applicable thereto, the rate of interest per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO
Page as the London interbank offered rate for deposits in Dollars at
approximately 11:00 A.M. (London time) two Business Days prior to the
first day of such Interest Period for a term comparable to such Interest
Period; PROVIDED, HOWEVER, if more than one rate is specified on Reuters
Screen LIBO Page, the applicable rate shall be the arithmetic mean of all
such rates.
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"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
condition (financial or otherwise), operations, business, assets,
liabilities or prospects of any Consolidated Party, (b) the ability of any
Credit Party to perform any material obligation under the Credit Documents
to which it is a party or (c) the material rights and remedies of the
Lenders under the Credit Documents.
"MATERIALS OF ENVIRONMENTAL CONCERN" means any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated
as such in or under any Environmental Laws, including, without limitation,
asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.
"MATURITY DATE" means July 2, 2003.
"MAXIMUM BORROWING AMOUNT" means the sum of (i) 85% of Eligible
Domestic Receivables PLUS (ii) 50% of Eligible Domestic Inventory PLUS
(iii) $12,000,000.
"MOODY'S" means Xxxxx'x Investors Service, Inc., or any successor or
assignee of the business of such company in the business of rating
securities.
"MORTGAGE INSTRUMENTS" shall have the meaning assigned such term in
Section 5.1(g).
"MORTGAGE POLICIES" shall have the meaning assigned such term in
Section 5.1(g).
"MORTGAGED REAL PROPERTIES" shall have the meaning assigned such
term in Section 5.1(g).
"MULTIEMPLOYER PLAN" means a Plan which is a multiemployer plan as
defined in Sections 3(37) or 4001(a)(3) of ERISA.
"MULTIPLE EMPLOYER PLAN" means a Plan which any Consolidated Party
or any ERISA Affiliate and at least one employer other than the
Consolidated Parties or any ERISA Affiliate are contributing sponsors.
"NET LEVERAGE RATIO" means, with respect to the Consolidated Parties
on a consolidated basis for the twelve month period ending on the last day
of any fiscal quarter, the ratio of (a) the sum of (i) Funded Indebtedness
of the Consolidated Parties on the date of determination on a consolidated
basis MINUS (ii) cash and Cash Equivalents of the Consolidated Parties on
the date of determination on a consolidated basis to (b) Consolidated
EBITDA for such period.
"NOTE" or "NOTES" means the Revolving Notes, individually or
collectively, as appropriate.
"NOTICE OF ACCOUNT DESIGNATION" means a written notice of account
designation in substantially the form of EXHIBIT 2.1(b)(iii).
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"NOTICE OF BORROWING" means a written notice of borrowing in
substantially the form of EXHIBIT 2.1(b)(i), as required by Section
2.1(b)(i).
"NOTICE OF EXTENSION/CONVERSION" means the written notice of
extension or conversion in substantially the form of EXHIBIT 3.2, as
required by Section 3.2.
"NOTICE OF PREPAYMENT" means a written notice of prepayment in
substantially the form of EXHIBIT 3.3(a), as required by Section 3.3(a).
"OPERATING LEASE" means, as applied to any Person, any lease
(including, without limitation, leases which may be terminated by the
lessee at any time) of any Property (whether real, personal or mixed)
which is not a Capital Lease other than any such lease in which that
Person is the lessor.
"OTHER TAXES" means such term as is defined in Section 3.11.
"PARTICIPATION INTEREST" means a purchase by a Lender of a
participation in Letters of Credit or LOC Obligations as provided in
Section 2.2 or in any Loans as provided in Section 3.14.
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA and any successor thereof.
"PERMITTED ACQUISITIONS" means any Acquisition (i) which is in the
same or a similar or a related line of business as the Borrower is engaged
in as of the Closing Date or any reasonable expansions or extensions
thereof, (ii) for which, on an individual basis, the consideration paid
shall not, without the consent of the Required Lenders, exceed $10,000,000
(exclusive of Replacement Assets and Seller Subordinated Notes), and in an
aggregate amount with respect to all such Acquisitions during the term of
this Credit Agreement, for which the consideration paid shall not exceed
$25,000,000 (exclusive of Replacement Assets and Seller Subordinated
Notes), (iii) with respect to which a Pro Forma Compliance Certificate
shall have been provided to the Agent showing that the Borrower is in
compliance, on a Pro Forma Basis, with each of the other financial
covenants set forth in Section 7.11, (iv) which shall not result in a
Default or Event of Default, (v) with respect to which Acquired Company
EBITDA is greater than $0 and (vi) which shall be in compliance with the
provisions of Section 7.12 and Section 7.13.
"PERMITTED HOLDERS" means (i) Fleet Venture Resources, Inc., Fleet
Equity Partners VI-B, L.P., Xxxxxxxx Partners III, L.P., Xxxxxxx Plaza
Partners, Xxxx X. Xxxxxx and Xxxxxx X. Xxxxxx and (ii) any Person
"controlled" (as defined in the definition of "Affiliate") by one or more
Persons identified in clause (i) of this definition.
"PERMITTED INVESTMENTS" means Investments which are either (a) cash
and Cash Equivalents, (b) accounts receivable created, acquired or made by
any Consolidated Party in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms, (c) Investments
existing as of the Closing Date and set forth in SCHEDULE 1.1A, (d)
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transactions permitted by Section 8.9, (e) advances or loans to directors,
officers, employees, agents, customers or suppliers that do not exceed
$500,000 in the aggregate at any one time outstanding for all of the
Consolidated Parties, (f) Investments in any Credit Party, (g) Investments
in Foreign Subsidiaries (excluding Permitted Acquisitions) in an aggregate
amount not to exceed $10,000,000, (h) Investments in securities of trade
creditors or customers received pursuant to any plan of reorganization or
similar arrangement upon the bankruptcy or insolvency of such trade
creditors or customers, (i) Investments made on or about the Closing Date
in connection with the Related Transactions in an aggregate amount not to
exceed $59,000,000, (j) Investments made pursuant to the Stockholders
Agreement to the extent permitted under Section 8.7, (k) Permitted
Acquisitions (including Investments of the Borrower in a Consolidated
Party which provides funding for Permitted Acquisitions) and (l) other
Investments in an aggregate amount not to exceed $500,000.
"PERMITTED LIENS" means:
(a) Liens in favor of the Agent to secure the Credit Party
Obligations;
(b) Liens (other than Liens created or imposed under ERISA) for
taxes, assessments or governmental charges or levies not yet due or Liens
for taxes being contested in good faith by appropriate proceedings for
which adequate reserves determined in accordance with GAAP have been
established (and as to which the Property subject to any such Lien is not
yet subject to foreclosure, sale or loss on account thereof);
(c) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and suppliers and other Liens imposed
by law or pursuant to customary reservations or retentions of title
arising in the ordinary course of business, PROVIDED that such Liens
secure only amounts not yet due and payable or, if due and payable, are
unfiled and no other action has been taken to enforce the same or are
being contested in good faith by appropriate proceedings for which
adequate reserves determined in accordance with GAAP have been established
(and as to which the Property subject to any such Lien is not yet subject
to foreclosure, sale or loss on account thereof);
(d) Liens (other than Liens created or imposed under ERISA) incurred
or deposits made by any Consolidated Party in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security, or to secure the performance of
tenders, statutory obligations, bids, leases, government contracts,
performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money);
(e) Liens in connection with attachments or judgments (including
judgment or appeal bonds) PROVIDED that no Event of Default shall have
occurred hereunder, and PROVIDED FURTHER, that the judgments secured
shall, within 30 days after the entry thereof, have been discharged or
execution thereof stayed pending appeal, or shall have been discharged
within 30 days after the expiration of any such stay;
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(f) easements, rights-of-way, restrictions (including zoning
restrictions), minor defects or irregularities in title and other similar
charges or encumbrances not, in any material respect, impairing the use of
the encumbered Property for its intended purposes;
(g) Liens on Property securing purchase money Indebtedness
(including Capital Leases) to the extent permitted under Section 8.1(c),
PROVIDED that any such Lien attaches to such Property concurrently with or
within 30 days after the acquisition thereof;
(h) any interest of title of a lessor under, and Liens arising from
UCC financing statements (or equivalent filings, registrations or
agreements in foreign jurisdictions) relating to, leases permitted by this
Credit Agreement;
(i) normal and customary rights of setoff upon deposits of cash in
favor of banks or other depository institutions PROVIDED, that no Event of
Default shall have occurred hereunder;
(j) Liens existing as of the Closing Date and set forth on SCHEDULE
1.1B; PROVIDED that (i) no such Lien shall at any time be extended to or
cover any Property other than the Property subject thereto on the Closing
Date and (ii) the principal amount of the Indebtedness secured by such
Liens shall not be extended, renewed, refunded or refinanced; and
(k) Liens on the assets of Foreign Subsidiaries securing
Indebtedness permitted by Section 8.1(g).
"PERSON" means any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other
enterprise (whether or not incorporated) or any Governmental Authority.
"PLAN" means any employee benefit plan (as defined in Section 3(3)
of ERISA) which is covered by ERISA and with respect to which any
Consolidated Party or any ERISA Affiliate is (or, if such plan were
terminated at such time, would under Section 4069 of ERISA be deemed to
be) an "employer" within the meaning of Section 3(5) of ERISA.
"PLEDGE AGREEMENT" means the pledge agreement dated as of the
Closing Date in the form of EXHIBIT 1.1A to be executed in favor of the
Agent by each of the Credit Parties, as amended, modified, restated or
supplemented from time to time.
"PRIME RATE" means the per annum rate of interest established from
time to time by First Union National Bank as its prime rate, which rate
may not be the lowest rate of interest charged by First Union National
Bank to its customers.
"PRINCIPAL OFFICE" means the principal office of First Union
National Bank, presently located at Charlotte, North Carolina.
"PRO FORMA BASIS" means, with respect to any transaction, that such
transaction shall be deemed to have occurred (for purposes of calculating
compliance in respect of such transaction with each of the financial
covenants set forth in Section 7.11 as of the most recent fiscal quarter
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end preceding the date of such transaction with respect to which the Agent
has received the required financial information) as of the first day of
the four fiscal-quarter period ending as of such date of determination. As
used herein, "TRANSACTION" shall mean any merger or consolidation as
referred to in Section 8.4 or any Permitted Acquisition as referred to in
Section 8.4 or Section 8.6. Any Indebtedness incurred by the Borrower or
any of its Subsidiaries in order to consummate such transaction (A) shall
be deemed to have been incurred on the first day of the applicable period
and (B) if such Indebtedness has a floating or formula rate, then the
implied rate of interest for such Indebtedness for the applicable period
for purposes of this definition shall be determined by utilizing the rate
which is or would be in effect with respect to such Indebtedness as at the
relevant date of determination. In connection with any calculation of the
financial covenants set forth in Section 7.11 upon giving effect to a
transaction on a Pro Forma Basis for purposes of Section 8.4 or Section
8.6, (1) any Indebtedness incurred by the Borrower or any of its
Subsidiaries in connection with such transaction shall be deemed to have
been incurred as of the first day of the applicable period and (2) income
statement items (whether positive or negative) attributable to the
Property acquired in such transaction shall be included to the extent
relating to the relevant period.
"PRO FORMA COMPLIANCE CERTIFICATE" means a certificate of the chief
financial officer of the Borrower delivered to the Agent in connection
with any merger or consolidation as referred to in Section 8.4 or any
Permitted Acquisition as referred to in Section 8.4 or Section 8.6 and
containing reasonably detailed calculations, upon giving effect to the
applicable transaction on a Pro Forma Basis, of the financial covenants
contained in Section 7.11 as of the most recent fiscal quarter end
preceding the date of the applicable transaction with respect to which the
Agent shall have received the required financial information.
"PROPERTY" means any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"REGISTER" shall have the meaning given such term in Section
11.3(c).
"REGULATION G, T, U, OR X" means Regulation G, T, U or X,
respectively, of the Board of Governors of the Federal Reserve System as
from time to time in effect and any successor to all or a portion thereof.
"RELATED TRANSACTIONS" shall mean the transactions effected pursuant
to (i) that certain letter agreement dated on or about the date hereof
between the Borrower and Massachusetts Capital Resource Company pursuant
to which the Borrower has agreed to repurchase the Borrower's Warrant
dated May 26, 1995, for 5,051.94 shares of its Capital Stock, (ii) those
certain letter agreements dated on or about the date hereof between the
Borrower and certain of its employees pursuant to which the Borrower has
agreed to repurchase stock options covering a total of 36,704.19 shares of
its Capital Stock, and (iii) those certain letter agreements dated on or
about the date hereof between the Borrower and certain of its stockholders
pursuant to which the Borrower has agreed to repurchase a total of
114,036.31 shares of its Capital Stock.
"RELEASE" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping or disposing
into the environment
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(including the abandonment or discarding of barrels, containers and other
closed receptacles containing any Materials of Environmental Concern).
"REPLACEMENT ASSETS" means assets and property which are acquired
with proceeds from the sale or as a result of the exchange of existing
assets and property and which will be used in the business of the
Consolidated Parties as conducted on the Closing Date or in a business the
same, similar or reasonably related thereto (including Capital Stock of a
Person which becomes a Subsidiary of the Borrower if such Person is
engaged in businesses which comply with Section 8.3 hereof).
"REPORTABLE EVENT" means any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the notice
requirement has been waived by regulation.
"REQUIRED LENDERS" means, at any time, Lenders which are not
Defaulting Lenders and holding in the aggregate at least 66 2/3% of (a)
the Revolving Commitments (and Participation Interests therein) or (b) if
the Commitments have been terminated, the outstanding Loans and
Participation Interests (including the Participation Interests of the
Issuing Lender in any Letters of Credit); provided, however, that if only
two Lenders shall have Commitments at any time during the term of this
Credit Agreement, then "Required Lenders" shall mean Lenders which are not
Defaulting Lenders and holding in the aggregate at least 100% of the
Revolving Commitments, or if the Revolving Commitments have been
terminated, the outstanding Loans and Participation Interests.
"REQUIREMENT OF LAW" means, as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents
of such Person, and any law, treaty, rule or regulation or determination
of an arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its material property
is subject.
"RESPONSIBLE OFFICER" means either the president or chief financial
officer of the Borrower.
"RESTRICTED PAYMENT" means (a) any dividend or other distribution,
direct or indirect, on account of any shares of any class of Capital Stock
of any Consolidated Party, now or hereafter outstanding, (b) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of
Capital Stock of any Consolidated Party, now or hereafter outstanding and
(c) any payment made to retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire shares of any
class of Capital Stock of any Consolidated Party, now or hereafter
outstanding.
"REVOLVING COMMITMENT" means, with respect to each Lender, the
commitment of such Lender in an aggregate principal amount at any time
outstanding of up to such Lender's Revolving Commitment Percentage of the
Revolving Committed Amount, (a) to make Revolving Loans in accordance with
the provisions of Section 2.1(a) and (b) to purchase Participation
Interests in Letters of Credit in accordance with the provisions of
Section 2.2(c).
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"REVOLVING COMMITMENT PERCENTAGE" means, for any Lender, the
percentage identified as its Revolving Commitment Percentage on SCHEDULE
2.1(a), as such percentage may be modified in connection with any
assignment made in accordance with the provisions of Section 11.3.
"REVOLVING COMMITTED AMOUNT" shall have the meaning assigned to such
term in Section 2.1(a).
"REVOLVING LOANS" shall have the meaning assigned to such term in
Section 2.1(a).
"REVOLVING NOTE" or "REVOLVING NOTES" means the promissory notes of
the Borrower in favor of each of the Lenders evidencing the Revolving
Loans provided pursuant to Section 2.1(e), individually or collectively,
as appropriate, as such promissory notes may be amended, modified,
restated, supplemented, extended, renewed or replaced from time to time.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw
Hill, Inc., or any successor or assignee of the business of such division
in the business of rating securities.
"SALE AND LEASEBACK TRANSACTION" means any direct or indirect
arrangement with any Person or to which any such Person is a party,
providing for the leasing to any Consolidated Party of any Property,
whether owned by such Consolidated Party as of the Closing Date or later
acquired, which has been or is to be sold or transferred by such
Consolidated Party to such Person or to any other Person from whom funds
have been, or are to be, advanced by such Person on the security of such
Property.
"SECURITY AGREEMENT" means the security agreement dated as of the
Closing Date in the form of EXHIBIT 1.1B to be executed in favor of the
Agent by each of the Credit Parties, as amended, modified, restated or
supplemented from time to time.
"SELLER SUBORDINATED NOTES" means any notes issued to a seller in
connection with a Permitted Acquisition provided that such notes are
subordinated to Credit Party Obligations and are otherwise on terms and
conditions reasonably satisfactory to the Agent.
"SINGLE EMPLOYER PLAN" means any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan or a Multiple Employer
Plan.
"SOLVENT" or "SOLVENCY" means, with respect to any Person as of a
particular date, that on such date (a) such Person is able to realize upon
its assets and pay its debts and other liabilities, contingent obligations
and other commitments as they mature in the normal course of business, (b)
such Person does not intend to, and does not believe that it will, incur
debts or liabilities beyond such Person's ability to pay as such debts and
liabilities mature in their ordinary course, (c) such Person is not
engaged in a business or a transaction, and is not about to engage in a
business or a transaction, for which such Person's Property would
constitute unreasonably small capital after giving due consideration to
the prevailing practice in the industry in which such Person is engaged or
is to engage, (d) the fair value of the Property of such Person is greater
than the total amount of liabilities, including, without limitation,
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contingent liabilities, of such Person and (e) the present fair salable
value of the assets of such Person is not less than the amount that will
be required to pay the probable liability of such Person on its debts as
they become absolute and matured. In computing the amount of contingent
liabilities at any time, it is intended that such liabilities will be
computed at the amount which, in light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be
expected to become an actual or matured liability.
"STANDBY LETTER OF CREDIT FEE" shall have the meaning assigned to
such term in Section 3.5(b)(i).
"STOCKHOLDERS AGREEMENT" means the Stockholder Agreement dated on or
about the date hereof among the Borrower and all of its stockholders.
"SUBORDINATED NOTES" means those certain 10 1/4% senior subordinated
notes of the Borrower in an aggregate principal amount of up to
$150,000,000.
"SUBSIDIARY" means, as to any Person, (a) any corporation more than
50% of whose Capital Stock of any class or classes having by the terms
thereof ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time, any class or
classes of such corporation shall have or might have voting power by
reason of the happening of any contingency) is at the time owned by such
Person directly or indirectly through Subsidiaries, and (b) any
partnership, association, joint venture or other entity in which such
Person directly or indirectly through Subsidiaries has more than 50%
equity interest at any time.
"TAXES" means such term as is defined in Section 3.11.
"TRADE LETTER OF CREDIT FEE" shall have the meaning assigned to such
term in Section 3.5(b)(ii).
"VOTING STOCK" means, with respect to any Person, Capital Stock
issued by such Person the holders of which are ordinarily, in the absence
of contingencies, entitled to vote for the election of directors (or
persons performing similar functions) of such Person, even though the
right so to vote has been suspended by the happening of such a
contingency.
"WHOLLY OWNED SUBSIDIARY" of any Person means any Subsidiary 100% of
whose Voting Stock or other equity interests is at the time owned by such
Person directly or indirectly through other Wholly Owned Subsidiaries.
1.2 COMPUTATION OF TIME PERIODS.
For purposes of computation of periods of time hereunder, the word "from"
means "from and including" and the words "to" and "until" each mean "to but
excluding."
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1.3 ACCOUNTING TERMS.
Except as otherwise expressly provided herein, all accounting terms used
herein shall be interpreted, and all financial statements and certificates and
reports as to financial matters required to be delivered to the Lenders
hereunder shall be prepared, in accordance with GAAP applied on a consistent
basis. All calculations made for the purposes of determining compliance with
this Credit Agreement shall (except as otherwise expressly provided herein) be
made by application of GAAP applied on a basis consistent with the most recent
annual or quarterly financial statements delivered pursuant to Section 7.1 (or,
prior to the delivery of the first financial statements pursuant to Section 7.1,
consistent with the financial statements as at December 27, 1997); 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, 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.
Notwithstanding the above, the parties hereto acknowledge and agree that,
for purposes of all calculations made under the financial covenants set forth in
Section 7.11 (including without limitation for purposes of the definitions of
"Applicable Margin" and "Pro Forma Basis" set forth in Section 1.1), (i) income
statement items (whether positive or negative) attributable to any Person or
Property acquired in any Investment transaction contemplated by Section 8.6
shall be included to the extent relating to any period applicable in such
calculations occurring after the date of such transaction (and, notwithstanding
the foregoing, during the first four fiscal quarters following the date of such
transaction, shall be included on an annualized basis).
SECTION 2
CREDIT FACILITIES
2.1 REVOLVING LOANS.
(a) REVOLVING COMMITMENT. Subject to the terms and conditions hereof
and in reliance upon the representations and warranties set forth herein,
each Lender severally agrees to make available to the Borrower such
Lender's Revolving Commitment Percentage of revolving credit loans
requested by the Borrower in Dollars ("REVOLVING LOANS") from time to time
from the Closing Date until the Maturity Date, or such earlier date as the
Revolving Commitments shall have been terminated as provided herein for
the purposes hereinafter set forth; PROVIDED, HOWEVER, that the sum of the
aggregate principal amount of outstanding Revolving Loans shall not exceed
THIRTY MILLION DOLLARS ($30,000,000) (provided, that until such time as
the Credit Parties shall have caused the liens relating to the assets of
Nothing America, Inc. in favor of Xxxxx Fargo Bank to have been released
in full, the aggregate principal amount of Revolving Loans shall not
exceed $28,500,000) (as such aggregate maximum amount may be reduced from
time to time as provided in Section 3.4 and Section 8.1(g), the "REVOLVING
COMMITTED AMOUNT"); PROVIDED, FURTHER, (A) with regard to each Lender
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individually, such Lender's outstanding Revolving Loans shall not exceed
such Lender's Revolving Commitment Percentage of the Revolving Committed
Amount, and (B) the aggregate principal amount of outstanding Revolving
Loans PLUS LOC Obligations outstanding shall not exceed the Revolving
Committed Amount. Revolving Loans may consist of Base Rate Loans or
Eurodollar Loans, or a combination thereof, as the Borrower may request,
and may be repaid and reborrowed in accordance with the provisions hereof;
PROVIDED, HOWEVER, that no more than 5 Eurodollar Loans shall be
outstanding hereunder at any time. For purposes hereof, Eurodollar Loans
with different Interest Periods shall be considered as separate Eurodollar
Loans, even if they begin on the same date, although borrowings,
extensions and conversions may, in accordance with the provisions hereof,
be combined at the end of existing Interest Periods to constitute a new
Eurodollar Loan with a single Interest Period. Revolving Loans hereunder
may be repaid and reborrowed in accordance with the provisions hereof.
(b) REVOLVING LOAN BORROWINGS.
(i) NOTICE OF BORROWING. The Borrower shall request a
Revolving Loan borrowing by written notice (or telephonic notice
promptly confirmed in writing) to the Agent not later than 11:00
A.M. (Charlotte, North Carolina time) on the Business Day prior to
the date of the requested borrowing in the case of Base Rate Loans,
and on the third Business Day prior to the date of the requested
borrowing in the case of Eurodollar Loans. Each such request for
borrowing shall be irrevocable and shall specify (A) that a
Revolving Loan is requested, (B) the date of the requested borrowing
(which shall be a Business Day), (C) the aggregate principal amount
to be borrowed, and (D) whether the borrowing shall be comprised of
Base Rate Loans, Eurodollar Loans or a combination thereof, and if
Eurodollar Loans are requested, the Interest Period(s) therefor. If
the Borrower shall fail to specify in any such Notice of Borrowing
(I) an applicable Interest Period in the case of a Eurodollar Loan,
then such notice shall be deemed to be a request for an Interest
Period of one month, or (II) the type of Revolving Loan requested,
then such notice shall be deemed to be a request for a Base Rate
Loan hereunder. The Agent shall give notice to each affected Lender
promptly upon receipt of each Notice of Borrowing pursuant to this
Section 2.1(b)(i), the contents thereof and each such Lender's share
of any borrowing to be made pursuant thereto.
(ii) MINIMUM AMOUNTS. Each Eurodollar Loan or Base Rate Loan
that is a Revolving Loan shall be in a minimum aggregate principal
amount of $500,000 and integral multiples of $100,000 in excess
thereof (or the remaining amount of the Revolving Committed Amount,
if less).
(iii) ADVANCES. Each Lender will make its Revolving Commitment
Percentage of each Revolving Loan borrowing available to the Agent
for the account of the Borrower as specified in Section 3.15(a), or
in such other manner as the Agent may specify in writing, by 1:00
P.M. (Charlotte, North Carolina time) on the date specified in the
applicable Notice of Borrowing in Dollars and in funds immediately
available to the Agent. Such borrowing will then be made available
to the Borrower by the Agent by crediting the account of the
Borrower on the books of such office with the aggregate of the
amounts made available to the Agent by the Lenders and in like funds
as received
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by the Agent. The Borrower hereby irrevocably authorizes the Agent
to, and the Agent shall, on such date disburse the proceeds of each
Revolving Loan requested by the Borrower pursuant to this subsection
2.1(b)(iii) in immediately available funds by crediting or wiring
such proceeds to the deposit account of the Borrower identified in
the most recent Notice of Account Designation substantially in the
form of EXHIBIT 2.1(b)(iii) hereto (a "Notice of Account
Designation") delivered by the Borrower to the Agent or as may be
otherwise agreed upon the Borrower and the Agent from time to time.
(c) REPAYMENT. The principal amount of all Revolving Loans shall be
due and payable in full on the Maturity Date, unless accelerated sooner
pursuant to Section 9.2.
(d) INTEREST. Subject to the provisions of Section 3.1,
(i) BASE RATE LOANS. During such periods as Revolving Loans
shall be comprised in whole or in part of Base Rate Loans, such Base
Rate Loans shall bear interest at a per annum rate equal to the
Adjusted Base Rate.
(ii) EURODOLLAR LOANS. During such periods as Revolving Loans
shall be comprised in whole or in part of Eurodollar Loans, such
Eurodollar Loans shall bear interest at a per annum rate equal to
the Adjusted Eurodollar Rate.
Interest on Revolving Loans shall be payable in arrears on each applicable
Interest Payment Date (or at such other times as may be specified herein).
(e) REVOLVING NOTES. The Revolving Loans made by each Lender shall
be evidenced by a duly executed promissory note of the Borrower to such
Lender in an original principal amount equal to such Lender's Revolving
Commitment Percentage of the Revolving Committed Amount and in
substantially the form of EXHIBIT 2.1(e).
2.2 LETTER OF CREDIT SUBFACILITY.
(a) ISSUANCE. Subject to the terms and conditions hereof and of the
LOC Documents, if any, and any other terms and conditions which the
Issuing Lender may reasonably require and in reliance upon the
representations and warranties set forth herein, the Issuing Lender agrees
to issue, and each Lender severally agrees to participate in the issuance
by the Issuing Lender of, standby and trade Letters of Credit in Dollars
from time to time from the Closing Date until the Maturity Date as the
Borrower may request, in a form acceptable to the Issuing Lender;
PROVIDED, HOWEVER, that (i) the LOC Obligations outstanding shall not at
any time exceed THREE MILLION DOLLARS ($3,000,000) (the "LOC COMMITTED
AMOUNT") and (ii) the sum of the aggregate principal amount of outstanding
Revolving Loans PLUS LOC Obligations outstanding shall not at any time
exceed the Revolving Committed Amount. No Letter of Credit shall (x)
unless otherwise agreed by the Agent, have an original expiry date more
than one year from the date of issuance or (y) as originally issued or as
extended, have an expiry date extending beyond the Maturity Date. Each
Letter of Credit shall
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comply with the related LOC Documents. The issuance and expiry dates of
each Letter of Credit shall be a Business Day.
(b) NOTICE AND REPORTS. The request for the issuance of a Letter of
Credit shall be submitted by the Borrower to the Issuing Lender at least
three (3) Business Days prior to the requested date of issuance. The
Issuing Lender will, at least quarterly and more frequently upon request,
disseminate to each of the Lenders a detailed report specifying the
Letters of Credit which are then issued and outstanding and any activity
with respect thereto which may have occurred since the date of the prior
report, and including therein, among other things, the beneficiary, the
face amount and the expiry date, as well as any payment or expirations
which may have occurred.
(c) PARTICIPATION. Each Lender, upon issuance of a Letter of Credit,
shall be deemed to have purchased without recourse a Participation
Interest from the applicable Issuing Lender in such Letter of Credit and
the obligations arising thereunder and any collateral relating thereto, in
each case in an amount equal to its pro rata share of the obligations
under such Letter of Credit (based on the respective Revolving Commitment
Percentages of the Lenders) and shall absolutely, unconditionally and
irrevocably assume and be obligated to pay to the Issuing Lender and
discharge when due, its pro rata share of the obligations arising under
such Letter of Credit. Without limiting the scope and nature of each
Lender's Participation Interest in any Letter of Credit, to the extent
that the Issuing Lender has not been reimbursed as required hereunder or
under any such Letter of Credit, each such Lender shall pay to the Issuing
Lender its pro rata share of such unreimbursed drawing in same day funds
on the day of notification by the Issuing Lender of an unreimbursed
drawing pursuant to the provisions of subsection (d) below. The obligation
of each Lender to so reimburse the Issuing Lender shall be absolute and
unconditional and shall not be affected by the occurrence of a Default, an
Event of Default or any other occurrence or event. Any such reimbursement
shall not relieve or otherwise impair the obligation of the Borrower to
reimburse the Issuing Lender under any Letter of Credit, together with
interest as hereinafter provided.
(d) REIMBURSEMENT. In the event of any drawing under any Letter of
Credit, the Issuing Lender will promptly notify the Borrower. Unless the
Borrower shall immediately notify the Issuing Lender that the Borrower
intends to otherwise reimburse the Issuing Lender for such drawing, the
Borrower shall be deemed to have requested that the Lenders make a
Revolving Loan in the amount of the drawing as provided in subsection (e)
below on the related Letter of Credit, the proceeds of which will be used
to satisfy the related reimbursement obligations. The Borrower promises to
reimburse the Issuing Lender on the day of drawing under any Letter of
Credit (either with the proceeds of a Revolving Loan obtained hereunder or
otherwise) in same day funds. If the Borrower shall fail to reimburse the
Issuing Lender as provided hereinabove, the unreimbursed amount of such
drawing shall bear interest at a per annum rate equal to the Base Rate
PLUS 2%. The Borrower's reimbursement obligations hereunder shall be
absolute and unconditional under all circumstances irrespective of any
rights of setoff, counterclaim or defense to payment the Borrower may
claim or have against the Issuing Lender, the Agent, the Lenders, the
beneficiary of the Letter of Credit drawn upon or any other Person,
including without limitation any defense based on any failure of the
Borrower or any other Credit Party to receive consideration or the
legality, validity, regularity or
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unenforceability of the Letter of Credit. The Issuing Lender will promptly
notify the other Lenders of the amount of any unreimbursed drawing and
each Lender shall promptly pay to the Agent for the account of the Issuing
Lender in Dollars and in immediately available funds, the amount of such
Lender's pro rata share of such unreimbursed drawing. Such payment shall
be made on the day such notice is received by such Lender from the Issuing
Lender if such notice is received at or before 2:00 P.M. (Charlotte, North
Carolina time) otherwise such payment shall be made at or before 12:00
Noon (Charlotte, North Carolina time) on the Business Day next succeeding
the day such notice is received. If such Lender does not pay such amount
to the Issuing Lender in full upon such request, such Lender shall, on
demand, pay to the Agent for the account of the Issuing Lender interest on
the unpaid amount during the period from the date of such drawing until
such Lender pays such amount to the Issuing Lender in full at a rate per
annum equal to, if paid within two (2) Business Days of the date that such
Lender is required to make payments of such amount pursuant to the
preceding sentence, the Federal Funds Rate and thereafter at a rate equal
to the Base Rate. Each Lender's obligation to make such payment to the
Issuing Lender, and the right of the Issuing Lender to receive the same,
shall be absolute and unconditional, shall not be affected by any
circumstance whatsoever and without regard to the termination of this
Credit Agreement or the Commitments hereunder, the existence of a Default
or Event of Default or the acceleration of the obligations of the Borrower
hereunder and shall be made without any offset, abatement, withholding or
reduction whatsoever. Simultaneously with the making of each such payment
by a Lender to the Issuing Lender, such Lender shall, automatically and
without any further action on the part of the Issuing Lender or such
Lender, acquire a Participation Interest in an amount equal to such
payment (excluding the portion of such payment constituting interest owing
to the Issuing Lender) in the related unreimbursed drawing portion of the
LOC Obligation and in the interest thereon and in the related LOC
Documents, and shall have a claim against the Borrower with respect
thereto.
(e) REPAYMENT WITH REVOLVING LOANS. On any day on which the Borrower
shall have requested, or been deemed to have requested, a Revolving Loan
advance to reimburse a drawing under a Letter of Credit, the Agent shall
give notice to the Lenders that a Revolving Loan has been requested or
deemed requested by the Borrower to be made in connection with a drawing
under a Letter of Credit, in which case a Revolving Loan advance comprised
of Base Rate Loans (or Eurodollar Loans to the extent the Borrower has
complied with the procedures of Section 2.1(b)(i) with respect thereto)
shall be immediately made to the Borrower by all Lenders (notwithstanding
any termination of the Commitments pursuant to Section 9.2) PRO RATA based
on the respective Revolving Commitment Percentages of the Lenders
(determined before giving effect to any termination of the Commitments
pursuant to Section 9.2) and the proceeds thereof shall be paid directly
to the Issuing Lender for application to the respective LOC Obligations.
Each such Lender hereby irrevocably agrees to make its pro rata share of
each such Revolving Loan immediately upon any such request or deemed
request in the amount, in the manner and on the date specified in the
preceding sentence NOTWITHSTANDING (i) the amount of such borrowing may
not comply with the minimum amount for advances of Revolving Loans
otherwise required hereunder, (ii) whether any conditions specified in
Section 5.2 are then satisfied, (iii) whether a Default or an Event of
Default then exists, (iv) failure for any such request or deemed request
for Revolving Loan to be made by the time otherwise required hereunder,
(v) whether the date of such borrowing is a date on which Revolving Loans
are
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otherwise permitted to be made hereunder or (vi) any termination of the
Commitments relating thereto immediately prior to or contemporaneously
with such borrowing. In the event that any Revolving Loan cannot for any
reason be made on the date otherwise required above (including, without
limitation, as a result of the commencement of a proceeding under the
Bankruptcy Code with respect to the Borrower or any Credit Party), then
each such Lender hereby agrees that it shall forthwith purchase (as of the
date such borrowing would otherwise have occurred, but adjusted for any
payments received from the Borrower on or after such date and prior to
such purchase) from the Issuing Lender such Participation Interests in the
outstanding LOC Obligations as shall be necessary to cause each such
Lender to share in such LOC Obligations ratably (based upon the respective
Revolving Commitment Percentages of the Lenders (determined before giving
effect to any termination of the Commitments pursuant to Section 9.2)),
PROVIDED that at the time any purchase of Participation Interests pursuant
to this sentence is actually made, the purchasing Lender shall be required
to pay to the Issuing Lender, to the extent not paid to the Issuer by the
Borrower in accordance with the terms of subsection (d) above, interest on
the principal amount of Participation Interests purchased for each day
from and including the day upon which such borrowing would otherwise have
occurred to but excluding the date of payment for such Participation
Interests, at the rate equal to, if paid within two (2) Business Days of
the date of the Revolving Loan advance, the Federal Funds Rate, and
thereafter at a rate equal to the Base Rate.
(f) DESIGNATION OF CONSOLIDATED PARTIES AS ACCOUNT PARTIES.
Notwithstanding anything to the contrary set forth in this Credit
Agreement, including without limitation Section 2.2(a), a Letter of Credit
issued hereunder may contain a statement to the effect that such Letter of
Credit is issued for the account of a Consolidated Party other than the
Borrower, provided that notwithstanding such statement, the Borrower shall
be the actual account party for all purposes of this Credit Agreement for
such Letter of Credit and such statement shall not affect the Borrower's
reimbursement obligations hereunder with respect to such Letter of Credit.
(g) RENEWAL, EXTENSION. The renewal or extension of any Letter
of Credit shall, for purposes hereof, be treated in all respects the same
as the issuance of a new Letter of Credit hereunder.
(h) UNIFORM CUSTOMS AND PRACTICES. The Issuing Lender may have the
Letters of Credit be subject to The Uniform Customs and Practice for
Documentary Credits, as published as of the date of issue by the
International Chamber of Commerce (the "UCP"), in which case the UCP may
be incorporated therein and deemed in all respects to be a part thereof.
(i) INDEMNIFICATION; NATURE OF ISSUING LENDER'S DUTIES.
(i) In addition to its other obligations under this Section
2.2, the Borrower hereby agrees to pay, and protect, indemnify and
save each Lender harmless from and against, any and all claims,
demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable attorneys' fees) that such Lender may incur or
be subject to as a consequence, direct or indirect, of (A) the
issuance of any Letter of Credit or (B) the failure of such Lender
to honor a drawing under a Letter of Credit as a result of any act
or omission, whether rightful or wrongful, of any present or future
de
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jure or de facto government or Governmental Authority (all such acts
or omissions, herein called "Government Acts").
(ii) As between the Borrower and the Lenders (including the
Issuing Lender), the Borrower shall assume all risks of the acts,
omissions or misuse of any Letter of Credit by the beneficiary
thereof. No Lender (including the Issuing Lender) shall be
responsible: (A) for the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party
in connection with the application for and issuance of any Letter of
Credit, even if it should in fact prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged; (B) for the
validity or sufficiency of any instrument transferring or assigning
or purporting to transfer or assign any Letter of Credit or the
rights or benefits thereunder or proceeds thereof, in whole or in
part, that may prove to be invalid or ineffective for any reason;
(C) for errors, omissions, interruptions or delays in transmission
or delivery of any messages, by mail, cable, telegraph, telex or
otherwise, whether or not they be in cipher; (D) for any loss or
delay in the transmission or otherwise of any document required in
order to make a drawing under a Letter of Credit or of the proceeds
thereof; and (E) for any consequences arising from causes beyond the
control of such Lender, including, without limitation, any
Government Acts. None of the above shall affect, impair, or prevent
the vesting of the Issuing Lender's rights or powers hereunder.
(iii) In furtherance and extension and not in limitation of
the specific provisions hereinabove set forth, any action taken or
omitted by any Lender (including the Issuing Lender), under or in
connection with any Letter of Credit or the related certificates, if
taken or omitted in good faith, shall not put such Lender under any
resulting liability to the Borrower or any other Credit Party. It is
the intention of the parties that this Credit Agreement shall be
construed and applied to protect and indemnify each Lender
(including the Issuing Lender) against any and all risks involved in
the issuance of the Letters of Credit, all of which risks are hereby
assumed by the Borrower (on behalf of itself and each of the other
Credit Parties), including, without limitation, any and all
Government Acts. No Lender (including the Issuing Lender) shall, in
any way, be liable for any failure by such Lender or anyone else to
pay any drawing under any Letter of Credit as a result of any
Government Acts or any other cause beyond the control of such
Lender.
(iv) Nothing in this subsection (i) is intended to limit the
reimbursement obligations of the Borrower contained in subsection
(d) above. The obligations of the Borrower under this subsection (i)
shall survive the termination of this Credit Agreement. No act or
omissions of any current or prior beneficiary of a Letter of Credit
shall in any way affect or impair the rights of the Lenders
(including the Issuing Lender) to enforce any right, power or
benefit under this Credit Agreement.
(v) Notwithstanding anything to the contrary contained in
this subsection (i), the Borrower shall have no obligation to
indemnify any Lender (including the Issuing Lender) in respect of
any liability incurred by such Lender (A) arising solely out of the
gross negligence or willful misconduct of such Lender, as determined
by a court of
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competent jurisdiction, or (B) caused by such Lender's failure to
pay under any Letter of Credit after presentation to it of a request
strictly complying with the terms and conditions of such Letter of
Credit, as determined by a court of competent jurisdiction, unless
such payment is prohibited by any law, regulation, court order or
decree.
(j) RESPONSIBILITY OF ISSUING LENDER. It is expressly understood and
agreed that the obligations of the Issuing Lender hereunder to the Lenders
are only those expressly set forth in this Credit Agreement and that the
Issuing Lender shall be entitled to assume that the conditions precedent
set forth in Section 5.2 have been satisfied unless it shall have acquired
actual knowledge that any such condition precedent has not been satisfied;
PROVIDED, HOWEVER, that nothing set forth in this Section 2.2 shall be
deemed to prejudice the right of any Lender to recover from the Issuing
Lender any amounts made available by such Lender to the Issuing Lender
pursuant to this Section 2.2 in the event that it is determined by a court
of competent jurisdiction that the payment with respect to a Letter of
Credit constituted gross negligence or willful misconduct on the part of
the Issuing Lender.
(k) CONFLICT WITH LOC DOCUMENTS. In the event of any conflict
between this Credit Agreement and any LOC Document (including any letter
of credit application), this Credit Agreement shall control.
SECTION 3
OTHER PROVISIONS RELATING TO CREDIT FACILITIES
3.1 DEFAULT RATE.
Upon the occurrence, and during the continuance, of an Event of Default,
the principal of and, to the extent permitted by law, interest on the Loans and
any other amounts owing hereunder or under the other Credit Documents shall bear
interest, payable on demand, at a per annum rate equal to the Base Rate PLUS 2%.
3.2 EXTENSION AND CONVERSION.
Subject to the terms of Section 5.2, the Borrower shall have the option,
on any Business Day, to extend existing Loans into a subsequent permissible
Interest Period or to convert Loans into Loans of another interest rate type;
PROVIDED, HOWEVER, that (i) except as provided in Section 3.8, Eurodollar Loans
may be converted into Base Rate Loans only on the last day of the Interest
Period applicable thereto, (ii) Eurodollar Loans may be extended, and Base Rate
Loans may be converted into Eurodollar Loans, only if no Default or Event of
Default is in existence on the date of extension or conversion, (iii) Loans
extended as, or converted into, Eurodollar Loans shall be subject to the terms
of the definition of "INTEREST PERIOD" set forth in Section 1.1 and shall be in
such minimum amounts as provided in Section 2.1(b)(ii), or (iv) no more than 5
Eurodollar Loans shall be outstanding hereunder at any time (it being understood
that, for purposes hereof, Eurodollar Loans with different Interest Periods
shall be considered as separate Eurodollar Loans, even if they begin on the same
date, although borrowings, extensions and conversions may, in accordance with
the provisions hereof, be combined at
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the end of existing Interest Periods to constitute a new Eurodollar Loan with a
single Interest Period) and (v) any request for extension or conversion of a
Eurodollar Loan which shall fail to specify an Interest Period shall be deemed
to be a request for an Interest Period of one month. Each such extension or
conversion shall be effected by the Borrower by giving a Notice of
Extension/Conversion (or telephonic notice promptly confirmed in writing) to the
office of the Agent specified in specified in SCHEDULE 2.1(a), or at such other
office as the Agent may designate in writing, prior to 11:00 A.M. (Charlotte,
North Carolina time) on the Business Day of, in the case of the conversion of a
Eurodollar Loan into a Base Rate Loan, and on the third Business Day prior to,
in the case of the extension of a Eurodollar Loan as, or conversion of a Base
Rate Loan into, a Eurodollar Loan, the date of the proposed extension or
conversion, specifying the date of the proposed extension or conversion, the
Loans to be so extended or converted, the types of Loans into which such Loans
are to be converted and, if appropriate, the applicable Interest Periods with
respect thereto. Each request for extension or conversion shall be irrevocable
and shall constitute a representation and warranty by the Borrower of the
matters specified in subsections (b), (c) and (d) of Section 5.2. In the event
the Borrower fails to request extension or conversion of any Eurodollar Loan in
accordance with this Section, or any such conversion or extension is not
permitted or required by this Section, then such Eurodollar Loan shall be
automatically converted into a Base Rate Loan at the end of the Interest Period
applicable thereto. The Agent shall give each Lender notice as promptly as
practicable of any such proposed extension or conversion affecting any Loan.
3.3 PREPAYMENTS.
(a) VOLUNTARY PREPAYMENTS. Upon the written notice (or telephonic
notice promptly confirmed in writing) in the form attached hereto as
EXHIBIT 3.3(a) (a "NOTICE OF PREPAYMENT") to the Agent not later than
11:00 A.M. (Charlotte, North Carolina time) on the date which is 3
Business Days prior to the date of the prepayment in the case of
Eurodollar Loans (which, to the extent any Eurodollar Loan outstanding
shall be greater than $600,000 shall be in a minimum amount of $100,000
(i.e.- a $700,000 Loan could be reduced to $600,000) but in the event that
any Eurodollar Loan shall be $500,000 then such payment shall be in a
minimum amount of $500,000), and on the Business Day prior to the date of
prepayment in the case of Base Rate Loans (which shall be in a minimum
amount of $100,000), the Borrower shall have the right to prepay Loans in
whole or in part from time to time without premium or penalty. Subject to
the foregoing terms, amounts prepaid under this Section 3.3(a) in each
case shall be applied first to Base Rate Loans and then to Eurodollar
Loans in direct order of Interest Period maturities. All prepayments under
this Section 3.3(a) shall be subject to Section 3.12.
(b) MANDATORY PREPAYMENTS.
(i) REVOLVING COMMITTED AMOUNT. If at any time, the sum of
the aggregate principal amount of outstanding Revolving Loans PLUS
LOC Obligations outstanding shall exceed the Revolving Committed
Amount, the Borrower immediately shall prepay the Revolving Loans
and (after all Revolving Loans have been repaid) cash collateralize
the LOC Obligations, in an amount sufficient to eliminate such
excess.
(ii) APPLICATION OF MANDATORY PREPAYMENTS. All amounts
required to be paid pursuant to this Section 3.3(b) shall be applied
first to Base Rate Loans and then
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to Eurodollar Loans in direct order of Interest Period maturities.
All prepayments under this Section 3.3(b) shall be subject to
Section 3.12.
3.4 TERMINATION AND REDUCTION OF REVOLVING COMMITTED AMOUNT.
(a) VOLUNTARY REDUCTIONS. The Borrower may from time to time
permanently reduce or terminate the Revolving Committed Amount in whole or
in part (in minimum aggregate amounts of $1,000,000 or in integral
multiples of $100,000 in excess thereof (or, if less, the full remaining
amount of the then applicable Revolving Committed Amount)) upon five
Business Days' prior written notice to the Agent; PROVIDED, HOWEVER, no
such termination or reduction shall be made which would cause the
aggregate principal amount of outstanding Revolving Loans PLUS LOC
Obligations outstanding to exceed the Revolving Committed Amount, unless,
concurrently with such termination or reduction, the Revolving Loans are
repaid to the extent necessary to eliminate such excess. The Agent shall
promptly notify each affected Lender of receipt by the Agent of any notice
from the Borrower pursuant to this Section 3.4(a).
(b) MATURITY DATE. The Revolving Commitments of the Lenders and the
LOC Commitment of the Issuing Lender shall automatically terminate on (i)
the Maturity Date or (ii) the date upon which Indebtedness incurred
pursuant to Section 8.1(g) shall cause the Revolving Committed Amount to
be reduced to $0.
(c) GENERAL. The Borrower shall pay to the Agent for the account of
the Lenders in accordance with the terms of Section 3.5(a), on the date of
each termination or reduction of the Revolving Committed Amount, the
Commitment Fee accrued through the date of such termination or reduction
on the amount of the Revolving Committed Amount so terminated or reduced.
3.5 FEES.
(a) COMMITMENT FEE. In consideration of the Revolving Commitments of
the Lenders hereunder, the Borrower agrees to pay to the Agent for the
account of each Lender a fee (the "COMMITMENT FEE") on such Lender's
Revolving Credit Percentage of the unused portion of the Revolving
Committed Amount computed at a per annum rate for each day during the
applicable Commitment Fee Calculation Period (hereinafter defined) at a
rate equal to the Applicable Margin in effect from time to time. The
Commitment Fee shall commence to accrue on the Closing Date and shall be
due and payable in arrears on the last Business Day of each March, June,
September and December (and any date that the Revolving Committed Amount
is reduced as provided in Section 3.4(a) and the Maturity Date) for the
immediately preceding quarter (or portion thereof) (each such quarter or
portion thereof for which the Commitment Fee is payable hereunder being
herein referred to as an "COMMITMENT FEE CALCULATION PERIOD"), beginning
with the first of such dates to occur after the Closing Date.
(b) LETTER OF CREDIT FEES.
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(i) LETTER OF CREDIT ISSUANCE FEE. In consideration of
the issuance of standby Letters of Credit hereunder, the
Borrower promises to pay to the Agent for the account of each
Lender a fee (the "STANDBY LETTER OF CREDIT FEE") on such
Lender's Revolving Commitment Percentage of the average daily
maximum amount available to be drawn under each such standby
Letter of Credit computed at a per annum rate for each day
from the date of issuance to the date of expiration equal to
the Applicable Margin. The Standby Letter of Credit Fee will
be payable quarterly in arrears on the last Business Day of
each March, June, September and December for the immediately
preceding quarter (or a portion thereof).
(ii) TRADE LETTER OF CREDIT DRAWING FEE. In
consideration of the issuance of trade Letters of Credit
hereunder, the Borrower promises to pay to the Agent for the
account of each Lender at the time of such issuance a fee (the
"TRADE LETTER OF CREDIT FEE") equal to one quarter of one
percent (1/4%) on such Lender's Revolving Commitment
Percentage of the amount of each drawing under any such trade
Letter of Credit. The Trade Letter of Credit Fee will be
payable quarterly in arrears on the last Business Day of each
March, June, September and December for the immediately
preceding quarter (or a portion thereof).
(iii)ISSUING LENDER FEES. In addition to the Standby
Letter of Credit Fee payable pursuant to clause (i) above and
the Trade Letter of Credit Fee payable pursuant to clause (ii)
above, the Borrower promises to pay to the Issuing Lender for
its own account without sharing by the other Lenders the
letter of credit fronting and negotiation fees equal to
one-eighth of one percent (1/8%) of the face amount of such
Letter of Credit and the customary charges from time to time
of the Issuing Lender with respect to the issuance, amendment,
transfer, administration, cancellation and conversion of, and
drawings under, such Letters of Credit (collectively, the
"ISSUING LENDER FEES").
(c) ADMINISTRATIVE FEES. The Borrower agrees to pay to the
Agent, for its own account, as applicable, the fees referred to in the
Agent's Fee Letter (collectively, the "AGENT'S FEES").
3.6 CAPITAL ADEQUACY.
If any Lender has determined, after the date hereof, that the adoption or
the becoming effective of, or any change in, or any change by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof in the interpretation or administration of, any
applicable law, rule or regulation regarding capital adequacy, or compliance by
such Lender with any request or directive regarding capital adequacy (whether or
not having the force of law) of any such authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on such
Lender's capital or assets as a consequence of its commitments or obligations
hereunder to a level below that which such Lender could have achieved but for
such adoption, effectiveness, change or compliance (taking into consideration
such Lender's policies with respect to
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capital adequacy), then, upon notice from such Lender to the Borrower (such
notice to be given within six calendar months of the Lender's determination
thereof), the Borrower shall be obligated to pay to such Lender such additional
amount or amounts as will compensate such Lender for such reduction. Each
determination by any such Lender of amounts owing under this Section shall,
absent manifest error, be conclusive and binding on the parties hereto.
3.7 LIMITATION ON EURODOLLAR LOANS.
If on or prior to the first day of any Interest Period for any Eurodollar
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 Loans for such Interest Period;
then the Agent shall give the Borrower prompt notice thereof, and so long as
such condition remains in effect, the Lenders shall be under no obligation to
make additional Eurodollar Loans, Continue Eurodollar Loans, or to Convert Base
Rate Loans into Eurodollar Loans and the Borrower shall, on the last day(s) of
the then current Interest Period(s) for the outstanding Eurodollar Loans, either
prepay such Eurodollar Loans or Convert such Eurodollar Loans into Base Rate
Loans in accordance with the terms of this Credit Agreement.
3.8 ILLEGALITY.
Notwithstanding any other provision of this Credit Agreement, in the event
that it becomes unlawful for any Lender or its Applicable Lending Office to
make, maintain, or fund Eurodollar Loans hereunder, then such Lender shall
promptly notify the Borrower thereof and such Lender's obligation to make or
Continue Eurodollar Loans and to Convert Base Rate Loans into Eurodollar Loans
shall be suspended until such time as such Lender may again make, maintain, and
fund Eurodollar Loans (in which case the provisions of Section 3.10 shall be
applicable).
3.9 REQUIREMENTS OF LAW.
(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 Loans,
its Notes, or its obligation to make Eurodollar Loans, or change the basis
of taxation of any amounts payable to such Lender (or its
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Applicable Lending Office) under this Credit Agreement or its Notes in
respect of any Eurodollar 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 Eurodollar
Reserve Requirement utilized in the determination of the Adjusted
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 Commitment of such
Lender hereunder; or
(iii) shall impose on such Lender (or its Applicable Lending
Office) or on the United States market for certificates of deposit or the
London interbank market any other condition affecting this Credit
Agreement or its Notes 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 Loans or to reduce any sum received or receivable by
such Lender (or its Applicable Lending Office) under this Credit Agreement or
its Notes with respect to any Eurodollar Loans, then the Borrower shall pay to
such Lender on demand (such demand to be made within six calendar months of the
Lender's determination thereof) 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 3.9(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 Eurodollar Loans, or to Convert Base Rate Loans into Eurodollar
Loans, until the event or condition giving rise to such request ceases to be in
effect (in which case the provisions of Section 3.10 shall be applicable);
PROVIDED that such suspension shall not affect the right of such Lender to
receive the compensation so requested.
(b) 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 3.9 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 Section 3.6 or under this Section 3.9 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.
3.10 TREATMENT OF AFFECTED LOANS.
If the obligation of any Lender to make any Eurodollar Loan or to
Continue, or to Convert Base Rate Loans into, Eurodollar Loans shall be
suspended pursuant to Section 3.8 or 3.9 hereof, such Lender's Eurodollar Loans
shall be automatically Converted into Base Rate Loans on the last day(s) of the
then current Interest Period(s) for such Eurodollar Loans (or, in the case of a
Conversion required by Section 3.8 hereof, on such earlier date as such Lender
may specify to the Borrower with a copy to
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the Agent) and, unless and until such Lender gives notice as provided below that
the circumstances specified in Section 3.8 or 3.9 hereof that gave rise to such
Conversion no longer exist:
(a) to the extent that such Lender's Eurodollar Loans have been so
Converted, all payments and prepayments of principal that would otherwise
be applied to such Lender's Eurodollar 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 Eurodollar Loans shall be made or Continued instead as Base Rate
Loans, and all Base Rate Loans of such Lender that would otherwise be
Converted into Eurodollar Loans 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 3.8 or 3.9 hereof that gave rise to the
Conversion of such Lender's Eurodollar Loans pursuant to this Section 3.10 no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Eurodollar Loans 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
Eurodollar Loans, to the extent necessary so that, after giving effect thereto,
all Loans held by the Lenders holding Eurodollar Loans and by such Lender are
held pro rata (as to principal amounts, interest rate basis, and Interest
Periods) in accordance with their respective Commitments.
3.11 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 Credit Document shall
be made free and clear of and without deduction for any and all present or
future taxes, duties, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, EXCLUDING, in the
case of each Lender 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 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 Credit Agreement or any other Credit
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 3.11) 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 11.1, the original or a
certified copy of a receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any and all present or
future stamp or documentary taxes and any other excise or property taxes
or charges or similar levies which arise from any payment made under this
Credit Agreement or any other Credit Document or
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from the execution or delivery of, or otherwise with respect to, this
Credit Agreement or any other Credit Document (hereinafter referred to as
"OTHER TAXES").
(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 3.11) 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 Credit Agreement in the case of each Lender listed on the
signature pages hereof and on or prior to the date on which it becomes a
Lender in the case of each other Lender, and from time to time thereafter
if requested in writing by the Borrower or the Agent (but only so long as
such Lender remains lawfully able to do so), shall provide the Borrower
and the Agent with (i) Internal Revenue Service Form 1001 or 4224, as
appropriate, or any successor form prescribed by the Internal Revenue
Service, certifying that such Lender is entitled to benefits under an
income tax treaty to which the United States is a party which reduces the
rate of withholding tax on payments of interest or certifying that the
income receivable pursuant to this Credit Agreement is effectively
connected with the conduct of a trade or business in the United States,
(ii) Internal Revenue Service Form W-8 or W-9, as appropriate, or any
successor form prescribed by the Internal Revenue Service, and (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 Credit Agreement or any
of the other Credit Documents.
(e) For any period with respect to which a Lender has failed to
provide the Borrower and the Agent with the appropriate form pursuant to
Section 3.11(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 3.11(a), 3.11(b) or 3.11(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 3.11, 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.
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(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 3.11 shall survive the repayment of the Loans,
LOC Obligations and other obligations under the Credit Documents and the
termination of the Commitments hereunder.
3.12 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 incurred by it as a
result of:
(a) any payment, prepayment, or Conversion of a Eurodollar Loan for
any reason (including, without limitation, the acceleration of the Loans
pursuant to Section 9.2) on a date other than the last day of the Interest
Period for such Loan; or
(b) any failure by the Borrower for any reason (including, without
limitation, the failure of any condition precedent specified in Section 5
to be satisfied) to borrow, Convert, Continue, or prepay a Eurodollar Loan
on the date for such borrowing, Conversion, Continuation, or prepayment
specified in the relevant notice of borrowing, prepayment, Continuation,
or Conversion under this Credit Agreement.
With respect to Eurodollar Loans, such indemnification may include an amount
equal to the excess, if any, of (a) the amount of interest which would have
accrued on the amount so prepaid, or not so borrowed, converted or continued,
for the period from the date of such prepayment or of such failure to borrow,
convert or continue to the last day of the applicable Interest Period (or, in
the case of a failure to borrow, convert or continue, the Interest Period that
would have commenced on the date of such failure) in each case at the applicable
rate of interest for such Eurodollar Loans provided for herein (excluding,
however, the Applicable Margin included therein, if any) over (b) the amount of
interest (as reasonably determined by such Lender) which would have accrued to
such Lender on such amount by placing such amount on deposit for a comparable
period with leading banks in the interbank Eurodollar market. The covenants of
the Borrower set forth in this Section 3.12 shall survive the repayment of the
Loans, LOC Obligations and other obligations under the Credit Documents and the
termination of the Commitments hereunder.
3.13 PRO RATA TREATMENT.
Except to the extent otherwise provided herein:
(a) LOANS. Each Loan, each payment or (subject to the terms of
Section 3.3) prepayment of principal of any Loan or reimbursement
obligations arising from drawings under Letters of Credit, each payment of
interest on the Loans or reimbursement obligations arising from drawings
under Letters of Credit, each payment of Commitment Fees, each payment of
the Standby Letter of Credit Fee, each payment of the Trade Letter of
Credit Fee, each reduction of the Revolving Committed Amount and each
conversion or extension of any Loan, shall be allocated pro rata among the
Lenders in accordance with the respective principal amounts of their
outstanding Loans and Participation Interests.
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(b) ADVANCES. No Lender shall be responsible for the failure
or delay by any other Lender in its obligation to make its ratable share
of a borrowing hereunder; PROVIDED, HOWEVER, that the failure of any
Lender to fulfill its obligations hereunder shall not relieve any other
Lender of its obligations hereunder. Unless the Agent shall have been
notified by any Lender prior to the date of any requested borrowing that
such Lender does not intend to make available to the Agent its ratable
share of such borrowing to be made on such date, the Agent may assume that
such Lender has made such amount available to the Agent on the date of
such borrowing, and the Agent in reliance upon such assumption, may (in
its sole discretion but without any obligation to do so) make available to
the Borrower a corresponding amount. If such corresponding amount is not
in fact made available to the Agent, the Agent shall be able to recover
such corresponding amount from such Lender. If such Lender does not pay
such corresponding amount forthwith upon the Agent's demand therefor, the
Agent will promptly notify the Borrower, and the Borrower shall
immediately pay such corresponding amount to the Agent. The Agent shall
also be entitled to recover from the Lender or the Borrower, as the case
may be, interest on such corresponding amount in respect of each day from
the date such corresponding amount was made available by the Agent to the
Borrower to the date such corresponding amount is recovered by the Agent
at a per annum rate equal to (i) from the Borrower at the applicable rate
for the applicable borrowing pursuant to the Notice of Borrowing and (ii)
from a Lender at the Federal Funds Rate. Any such payment by the Borrower
shall not operate to relieve any Lender of its obligations hereunder.
3.14 SHARING OF PAYMENTS.
The Lenders agree among themselves that, in the event that any Lender
shall obtain payment in respect of any Loan, LOC Obligations or any other
obligation owing to such Lender under this Credit Agreement through the exercise
of a right of setoff, banker's lien or counterclaim, or pursuant to a secured
claim under Section 506 of Title 11 of the United States Code or other security
or interest arising from, or in lieu of, such secured claim, received by such
Lender under any applicable bankruptcy, insolvency or other similar law or
otherwise, or by any other means, in excess of its pro rata share of such
payment as provided for in this Credit Agreement, such Lender shall promptly
purchase from the other Lenders a Participation Interest in such Loans, LOC
Obligations and other obligations in such amounts, and make such other
adjustments from time to time, as shall be equitable to the end that all Lenders
share such payment in accordance with their respective ratable shares as
provided for in this Credit Agreement. The Lenders further agree among
themselves that if payment to a Lender obtained by such Lender through the
exercise of a right of setoff, banker's lien, counterclaim or other event as
aforesaid shall be rescinded or must otherwise be restored, each Lender which
shall have shared the benefit of such payment shall, by repurchase of a
Participation Interest theretofore sold, return its share of that benefit
(together with its share of any accrued interest payable with respect thereto)
to each Lender whose payment shall have been rescinded or otherwise restored.
The Borrower agrees that any Lender so purchasing such a Participation Interest
may, to the fullest extent permitted by law, exercise all rights of payment,
including setoff, banker's lien or counterclaim, with respect to such
Participation Interest as fully as if such Lender were a holder of such Loan,
LOC Obligations or other obligation in the amount of such Participation
Interest. Except as otherwise expressly provided in this Credit Agreement, if
any Lender or the Agent shall fail to remit to the Agent or any other Lender an
amount payable by such Lender or the Agent to the Agent or such other Lender
pursuant to
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this Credit Agreement on the date when such amount is due, such payments shall
be made together with interest thereon for each day from the date such amount is
due until the date such amount is paid to the Agent or such other Lender at a
rate per annum equal to the Federal Funds Rate. If under any applicable
bankruptcy, insolvency or other similar law, any Lender receives a secured claim
in lieu of a setoff to which this Section 3.14 applies, such Lender shall, to
the extent practicable, exercise its rights in respect of such secured claim in
a manner consistent with the rights of the Lenders under this Section 3.14 to
share in the benefits of any recovery on such secured claim.
3.15 PAYMENTS, COMPUTATIONS, ETC.
(a) Except as otherwise specifically provided herein, all payments
hereunder shall be made to the Agent in Dollars in immediately available
funds, without offset, deduction, counterclaim or withholding of any kind,
at the Agent's office specified in SCHEDULE 2.1(a) not later than 2:00
P.M. (Charlotte, North Carolina time) on the date when due. Payments
received after such time shall be deemed to have been received on the next
succeeding Business Day. The Agent may (but shall not be obligated to)
debit the amount of any such payment which is not made by such time to any
ordinary deposit account of the Borrower maintained with the Agent (with
notice to the Borrower). The Borrower shall, at the time it makes any
payment under this Credit Agreement, specify to the Agent the Loans, LOC
Obligations, Fees, interest or other amounts payable by the Borrower
hereunder to which such payment is to be applied (and in the event that it
fails so to specify, or if such application would be inconsistent with the
terms hereof, the Agent shall distribute such payment to the Lenders in
such manner as the Agent may determine to be appropriate in respect of
obligations owing by the Borrower hereunder, subject to the terms of
Section 3.13(a)). The Agent will distribute such payments to such Lenders,
if any such payment is received prior to 12:00 Noon (Charlotte, North
Carolina time) on a Business Day in like funds as received prior to the
end of such Business Day and otherwise the Agent will distribute such
payment to such Lenders on the next succeeding Business Day. Whenever any
payment hereunder shall be stated to be due on a day which is not a
Business Day, the due date thereof shall be extended to the next
succeeding Business Day (subject to accrual of interest and Fees for the
period of such extension), except that in the case of Eurodollar Loans, if
the extension would cause the payment to be made in the next following
calendar month, then such payment shall instead be made on the next
preceding Business Day. Except as expressly provided otherwise herein, all
computations of interest and fees shall be made on the basis of actual
number of days elapsed over a year of 360 days, except with respect to
computation of interest on Base Rate Loans which (unless the Base Rate is
determined by reference to the Federal Funds Rate) shall be calculated
based on a year of 365 or 366 days, as appropriate. Interest shall accrue
from and include the date of borrowing, but exclude the date of payment.
(b) ALLOCATION OF PAYMENTS AFTER EVENT OF DEFAULT. Notwithstanding
any other provisions of this Credit Agreement to the contrary, after the
occurrence and during the continuance of an Event of Default, all amounts
collected or received by the Agent or any Lender on account of the Credit
Party Obligations or any other amounts outstanding under any of the Credit
Documents or in respect of the Collateral shall be paid over or delivered
as follows:
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FIRST, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation reasonable attorneys' fees) of the
Agent in connection with enforcing the rights of the Lenders under the
Credit Documents and any protective advances made by the Agent with
respect to the Collateral under or pursuant to the terms of the Collateral
Documents;
SECOND, to payment of any fees owed to the Agent;
THIRD, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation, reasonable attorneys' fees) of
each of the Lenders payable pursuant to the terms of the Credit Documents
in connection with enforcing its rights under the Credit Documents or
otherwise with respect to the Credit Party Obligations owing to such
Lender;
FOURTH, to the payment of all of the Credit Party Obligations
consisting of accrued fees and interest;
FIFTH, to the payment of the outstanding principal amount of the
Credit Party Obligations (including the payment or cash collateralization
of the outstanding LOC Obligations);
SIXTH, to all other Credit Party Obligations and other obligations
which shall have become due and payable under the Credit Documents or
otherwise and not repaid pursuant to clauses "FIRST" through "FIFTH"
above; and
SEVENTH, to the payment of the surplus, if any, to whoever may be
lawfully entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be applied in
the numerical order provided until exhausted prior to application to the
next succeeding category; (ii) each of the Lenders shall receive an amount
equal to its pro rata share (based on the proportion that the then
outstanding Loans and LOC Obligations held by such Lender bears to the
aggregate then outstanding Loans and LOC Obligations) of amounts available
to be applied pursuant to clauses "THIRD", "FOURTH", "FIFTH" and "SIXTH"
above; and (iii) to the extent that any amounts available for distribution
pursuant to clause "FIFTH" above are attributable to the issued but
undrawn amount of outstanding Letters of Credit, such amounts shall be
held by the Agent in a cash collateral account and applied (A) first, to
reimburse the Issuing Lender from time to time for any drawings under such
Letters of Credit and (B) then, following the expiration of all Letters of
Credit, to all other obligations of the types described in clauses "FIFTH"
and "SIXTH" above in the manner provided in this Section 3.15(b).
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3.16 EVIDENCE OF DEBT.
(a) Each Lender shall maintain an account or accounts evidencing
each Loan made by such Lender to the Borrower from time to time, including
the amounts of principal and interest payable and paid to such Lender from
time to time under this Credit Agreement. Each Lender will make reasonable
efforts to maintain the accuracy of its account or accounts and to
promptly update its account or accounts from time to time, as necessary.
(b) The Agent shall maintain the Register pursuant to Section
11.3(c), and a subaccount for each Lender, in which Register and
subaccounts (taken together) shall be recorded (i) the amount, type and
Interest Period of each such Loan hereunder, (ii) the amount of any
principal or interest due and payable or to become due and payable to each
Lender hereunder and (iii) the amount of any sum received by the Agent
hereunder from or for the account of the Borrower and each Lender's share
thereof. The Agent will make reasonable efforts to maintain the accuracy
of the subaccounts referred to in the preceding sentence and to promptly
update such subaccounts from time to time, as necessary.
(c) The entries made in the accounts, Register and subaccounts
maintained pursuant to subsection (b) of this Section 3.16 (and, if
consistent with the entries of the Agent, subsection (a)) shall be prima
facie evidence of the existence and amounts of the obligations of the
Borrower therein recorded; PROVIDED, HOWEVER, that the failure of any
Lender or the Agent to maintain any such account, such Register or such
subaccount, as applicable, or any error therein, shall not in any manner
affect the obligation of the Borrower to repay the Loans made by such
Lender in accordance with the terms hereof.
3.17 ASSIGNMENT OF COMMITMENT UNDER CERTAIN CIRCUMSTANCES
In the event (a) any Lender requests compensation pursuant to
Section 3.12, (b) any Lender delivers a notice described in Sections 3.6, 3.8 or
3.9 or (c) the Borrower is required to pay any additional amount to any Lender
or any Governmental Authority on account of any Lender pursuant to Section 3.11,
the Borrower may, at its sole expense and effort (including with respect to the
processing and recordation fee referred to in Section 11.3), upon notice to such
Lender and the Agent, require such Lender to transfer and assign, without
recourse (in accordance with and subject to the restrictions contained in
Section 11.3), all of its interests, rights and obligations under this Agreement
to an Eligible Assignee that shall assume such assigned obligations (which
assignee may be another Lender, if a Lender accepts such assignment), PROVIDED
that (A) such assignment shall not conflict with any law, rule or regulation or
order of any court or other Governmental Authority having jurisdiction, (B) no
Event of Default shall have occurred and be continuing and (C) the Borrower or
such assignee shall have paid to the affected Lender in immediately available
funds an amount equal to the sum of 100% of the principal of and interest
accrued to the date of such payment on the outstanding Loans of such Lender,
respectively, plus all Fees and other amounts accrued for the account of such
Lender hereunder (including any amounts under Sections 3.6, 3.9, 3.11 and 3.12);
PROVIDED FURTHER that if prior to any such assignment the circumstances or event
that resulted in such Lender's request or notice under Sections 3.6, 3.8 or 3.9
or demand for additional amounts under Section 3.11 or 3.12, as the case may be,
shall cease to exist or become inapplicable for any reason or if such Lender
shall waive its rights in
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respect of such circumstances or event under Section 3.6, 3.8, 3.9, 3.11 or 3.12
as the case may be, then such Lender shall not thereafter be required to make
such assignment hereunder.
SECTION 4
GUARANTY
4.1 THE GUARANTY.
Each of the Guarantors hereby jointly and severally guarantees to each
Lender, each Affiliate of a Lender that enters into a Hedging Agreement, and the
Agent as hereinafter provided the prompt payment of the Credit Party Obligations
in full when due (whether at stated maturity, as a mandatory prepayment, by
acceleration, as a mandatory cash collateralization or otherwise) strictly in
accordance with the terms thereof. The Guarantors hereby further agree that if
any of the Credit Party Obligations are not paid in full when due (whether at
stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash
collateralization or otherwise), the Guarantors will, jointly and severally,
promptly pay the same, without any demand or notice whatsoever, and that in the
case of any extension of time of payment or renewal of any of the Credit Party
Obligations, the same will be promptly paid in full when due (whether at
extended maturity, as a mandatory prepayment, by acceleration, as a mandatory
cash collateralization or otherwise) in accordance with the terms of such
extension or renewal.
Notwithstanding any provision to the contrary contained herein or in any
other of the Credit Documents or Hedging Agreements, the obligations of each
Guarantor hereunder shall be limited to an aggregate amount equal to the largest
amount that would not render its obligations hereunder subject to avoidance
under Section 548 of the Bankruptcy Code or any comparable provisions of any
applicable state law.
4.2 OBLIGATIONS UNCONDITIONAL.
The obligations of the Guarantors under Section 4.1 are joint and several,
absolute and unconditional, irrespective of the value, genuineness, validity,
regularity or enforceability of any of the Credit Documents or Hedging
Agreements, or any other agreement or instrument referred to therein, or any
substitution, release, impairment or exchange of any other guarantee of or
security for any of the Credit Party Obligations, and, to the fullest extent
permitted by applicable law, irrespective of any other circumstance whatsoever
which might otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor, it being the intent of this Section 4.2 that the
obligations of the Guarantors hereunder shall be absolute and unconditional
under any and all circumstances. Each Guarantor agrees that such Guarantor shall
have no right of subrogation, indemnity, reimbursement or contribution against
the Borrower or any other Guarantor of the Credit Party Obligations for amounts
paid under this Section 4 until such time as the Lenders (and any Affiliates of
Lenders entering into Hedging Agreements) have been paid in full, all
Commitments under this Credit Agreement have been terminated and no Person or
Governmental Authority shall have any right to request any return or
reimbursement of funds from the Lenders in connection with monies received under
the Credit Documents or Hedging Agreements. Without limiting the generality of
the foregoing, it is agreed that, to the fullest extent permitted by law, the
occurrence of any one or more of the following shall not alter
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or impair the liability of any Guarantor hereunder which shall remain absolute
and unconditional as described above:
(a) at any time or from time to time, without notice to any
Guarantor, the time for any performance of or compliance with any of the
Credit Party Obligations shall be extended, or such performance or
compliance shall be waived;
(b) any of the acts mentioned in any of the provisions of any of the
Credit Documents, any Hedging Agreement or any other agreement or
instrument referred to in the Credit Documents or Hedging Agreements shall
be done or omitted;
(c) the maturity of any of the Credit Party Obligations shall be
accelerated, or any of the Credit Party Obligations shall be modified,
supplemented or amended in any respect, or any right under any of the
Credit Documents, any Hedging Agreement or any other agreement or
instrument referred to in the Credit Documents or Hedging Agreements shall
be waived or any other guarantee of any of the Credit Party Obligations or
any security therefor shall be released, impaired or exchanged in whole or
in part or otherwise dealt with;
(d) any Lien granted to, or in favor of, the Agent or any Lender or
Lenders as security for any of the Credit Party Obligations shall fail to
attach or be perfected; or
(e) any of the Credit Party Obligations shall be determined to be
void or voidable (including, without limitation, for the benefit of any
creditor of any Guarantor) or shall be subordinated to the claims of any
Person (including, without limitation, any creditor of any Guarantor).
With respect to its obligations hereunder, each Guarantor hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the Agent or any Lender exhaust any right,
power or remedy or proceed against any Person under any of the Credit Documents,
any Hedging Agreement or any other agreement or instrument referred to in the
Credit Documents or Hedging Agreements, or against any other Person under any
other guarantee of, or security for, any of the Credit Party Obligations.
4.3 REINSTATEMENT.
The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Credit Party Obligations is
rescinded or must be otherwise restored by any holder of any of the Credit Party
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Agent and each Lender on demand for all reasonable costs and expenses
(including, without limitation, fees and expenses of counsel) incurred by the
Agent or such Lender in connection with such rescission or restoration,
including any such costs and expenses incurred in defending against any claim
alleging that such payment constituted a preference, fraudulent transfer or
similar payment under any bankruptcy, insolvency or similar law.
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4.4 CERTAIN ADDITIONAL WAIVERS.
Without limiting the generality of the provisions of this Section 4, each
Guarantor hereby specifically waives the benefits of N.C. Gen. Stat. secs. 26-7
through 26-9, inclusive, to the extent applicable. Each Guarantor further agrees
that such Guarantor shall have no right of recourse to security for the Credit
Party Obligations, except through the exercise of rights of subrogation pursuant
to Section 4.2 and through the exercise of rights of contribution pursuant to
Section 4.6.
4.5 REMEDIES.
The Guarantors agree that, to the fullest extent permitted by law, as
between the Guarantors, on the one hand, and the Agent and the Lenders, on the
other hand, the Credit Party Obligations may be declared to be forthwith due and
payable as provided in Section 9.2 (and shall be deemed to have become
automatically due and payable in the circumstances provided in said Section 9.2)
for purposes of Section 4.1 notwithstanding any stay, injunction or other
prohibition preventing such declaration (or preventing the Credit Party
Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or the Credit Party
Obligations being deemed to have become automatically due and payable), the
Credit Party Obligations (whether or not due and payable by any other Person)
shall forthwith become due and payable by the Guarantors for purposes of Section
4.1. The Guarantors acknowledge and agree that their obligations hereunder are
secured in accordance with the terms of the Security Agreements and the other
Collateral Documents and that the Lenders may exercise their remedies thereunder
in accordance with the terms thereof.
4.6 RIGHTS OF CONTRIBUTION.
The Guarantors hereby agree as among themselves that, if any Guarantor
shall make an Excess Payment (as defined below), such Guarantor shall have a
right of contribution from each other Guarantor in an amount equal to such other
Guarantor's Contribution Share (as defined below) of such Excess Payment. The
payment obligations of any Guarantor under this Section 4.6 shall be subordinate
and subject in right of payment to the prior payment in full to the Agent and
the Lenders of the Guaranteed Obligations, and none of the Guarantors shall
exercise any right or remedy under this Section 4.6 against any other Guarantor
until payment and satisfaction in full of all of such Guaranteed Obligations.
For purposes of this Section 4.6, (a) "GUARANTEED OBLIGATIONS" shall mean any
obligations arising under the other provisions of this Section 4; (b) "EXCESS
PAYMENT" shall mean the amount paid by any Guarantor in excess of its Pro Rata
Share of any Guaranteed Obligations; (c) "PRO RATA SHARE" shall mean, for any
Guarantor in respect of any payment of Guaranteed Obligations, the ratio
(expressed as a percentage) as of the date of such payment of Guaranteed
Obligations of (i) the amount by which the aggregate present fair salable value
of all of its assets and properties exceeds the amount of all debts and
liabilities of such Guarantor (including contingent, subordinated, unmatured,
and unliquidated liabilities, but excluding the obligations of such Guarantor
hereunder) to (ii) the amount by which the aggregate present fair salable value
of all assets and other properties of the Borrower and all of the Guarantors
exceeds the amount of all of the debts and liabilities (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of the Borrower and the Guarantors hereunder) of the Borrower and
all of the Guarantors; PROVIDED, HOWEVER, that, for purposes of calculating the
Pro Rata Shares of the Guarantors in respect of any payment of Guaranteed
Obligations, any Guarantor that became a Guarantor subsequent to the date of any
such payment shall
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be deemed to have been a Guarantor on the date of such payment and the financial
information for such Guarantor as of the date such Guarantor became a Guarantor
shall be utilized for such Guarantor in connection with such payment; and (d)
"CONTRIBUTION SHARE" shall mean, for any Guarantor in respect of any Excess
Payment made by any other Guarantor, the ratio (expressed as a percentage) as of
the date of such Excess Payment of (i) the amount by which the aggregate present
fair salable value of all of its assets and properties exceeds the amount of all
debts and liabilities of such Guarantor (including contingent, subordinated,
unmatured, and unliquidated liabilities, but excluding the obligations of such
Guarantor hereunder) to (ii) the amount by which the aggregate present fair
salable value of all assets and other properties of the Borrower and all of the
Guarantors other than the maker of such Excess Payment exceeds the amount of all
of the debts and liabilities (including contingent, subordinated, unmatured, and
unliquidated liabilities, but excluding the obligations of the Borrower and the
Guarantors hereunder) of the Borrower and all of the Guarantors other than the
maker of such Excess Payment; PROVIDED, HOWEVER, that, for purposes of
calculating the Contribution Shares of the Guarantors in respect of any Excess
Payment, any Guarantor that became a Guarantor subsequent to the date of any
such Excess Payment shall be deemed to have been a Guarantor on the date of such
Excess Payment and the financial information for such Guarantor as of the date
such Guarantor became a Guarantor shall be utilized for such Guarantor in
connection with such Excess Payment. This Section 4.6 shall not be deemed to
affect any right of subrogation, indemnity, reimbursement or contribution that
any Guarantor may have under applicable law against the Borrower in respect of
any payment of Guaranteed Obligations. Notwithstanding the foregoing, all rights
of contribution against any Guarantor shall terminate from and after such time,
if ever, that such Guarantor shall be relieved of its obligations pursuant to
Section 8.4.
4.7 CONTINUING GUARANTEE.
The guarantee in this Section 4 is a continuing guarantee, and shall apply
to all Credit Party Obligations whenever arising.
SECTION 5
CONDITIONS
5.1 CLOSING CONDITIONS.
The obligation of the Lenders to enter into this Credit Agreement and to
make the initial Loans or the Issuing Lender to issue the initial Letter of
Credit, whichever shall occur first, shall be subject to satisfaction of the
following conditions (in form and substance acceptable to the Lenders):
(a) EXECUTED CREDIT DOCUMENTS. Receipt by the Agent of duly
executed copies of: (i) this Credit Agreement; (ii) the Notes; (iii) the
Collateral Documents and (iv) all other Credit Documents, each in form
and substance acceptable to the Lenders in their sole discretion.
(b) CORPORATE DOCUMENTS. Receipt by the Agent of the following:
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(i) CHARTER DOCUMENTS. Copies of the articles or
certificates of incorporation or other charter documents of each
Credit Party certified to be true and complete as of a recent date
by the appropriate Governmental Authority of the state or other
jurisdiction of its incorporation and certified by a secretary or
assistant secretary of such Credit Party to be true and correct as
of the Closing Date.
(ii) BYLAWS. A copy of the bylaws of each Credit Party
certified by a secretary or assistant secretary of such Credit Party
to be true and correct as of the Closing Date.
(iii) RESOLUTIONS. Copies of resolutions of the Board of
Directors of each Credit Party approving and adopting the Credit
Documents to which it is a party, the transactions contemplated
therein and authorizing execution and delivery thereof, certified by
a secretary or assistant secretary of such Credit Party to be true
and correct and in force and effect as of the Closing Date.
(iv) GOOD STANDING. Copies of (A) certificates of good
standing, existence or its equivalent with respect to each Credit
Party certified as of a recent date by the appropriate Governmental
Authorities of the state or other jurisdiction of incorporation and
each other jurisdiction in which the failure to so qualify and be in
good standing could have a Material Adverse Effect and (B) to the
extent available, a certificate indicating payment of all corporate
franchise taxes certified as of a recent date by the appropriate
governmental taxing authorities.
(v) INCUMBENCY. An incumbency certificate of each Credit
Party certified by a secretary or assistant secretary to be true and
correct as of the Closing Date.
(c) FINANCIAL STATEMENTS. Receipt by the Agent and the Lenders of
(i) the consolidated and consolidating financial statements of the
Borrower and its Subsidiaries, including balance sheets and income and
cash flow statements for the fiscal quarter ended Xxxxx 00, 0000, (xx)
satisfactory projections including balance sheets and income and cash flow
statements for each twelve month period through December 31, 2004 and
(iii) such other information relating to the Borrower and its Subsidiaries
as the Agent may reasonably require in connection with the structuring and
syndication of credit facilities of the type described herein.
(d) OPINIONS OF COUNSThe Agent shall have received favorable
opinions dated as of the Closing Date of counsel to the Credit Parties
addressed to the Lenders with respect to the Credit Parties, the Credit
Documents and such other matters as the Lenders shall request.
(e) ENVIRONMENTAL REPORTS. Receipt by the Agent in form and
substance satisfactory to it of environmental assessment reports and
related documents of a recent date with respect to all Real Properties and
all other material real property owned or leased by a Consolidated Party.
(f) PERSONAL PROPERTY COLLATERAL. The Agent shall have received:
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(i) searches of Uniform Commercial Code filings in the
jurisdiction of the chief executive office of each Credit Party and
each jurisdiction where any Collateral is located or where a filing
would need to be made in order to perfect the Agent's security
interest in the Collateral, copies of the financing statements on
file in such jurisdictions and evidence that no Liens exist other
than Permitted Liens;
(ii) duly executed UCC financing statements for each appropriate
jurisdiction as is necessary, in the Agent's sole discretion, to
perfect the Agent's security interest in the Collateral;
(iii) searches of ownership of intellectual property in the
appropriate governmental offices and such patent/trademark/copyright
filings as requested by the Agent in order to perfect the Agent's
security interest in the Collateral;
(iv) all stock certificates evidencing the Capital Stock pledged
to the Agent pursuant to the Pledge Agreement, together with duly
executed in blank undated stock powers attached thereto (unless,
with respect to the pledged Capital Stock of any Foreign Subsidiary,
such stock powers are deemed unnecessary by the Agent in its
reasonable discretion under the law of the jurisdiction of
incorporation of such Person);
(v) such patent/trademark/copyright filings as requested by
the Agent in order to perfect the Agent's security interest in the
Collateral;
(vi) all instruments and chattel paper in the possession of any
of the Credit Parties, together with allonges or assignments as may
be necessary or appropriate to perfect the Agent's security interest
in the Collateral; and
(vii) duly executed consents as are necessary, in the Agent's sole
discretion, to perfect the Lenders' security interest in the
Collateral.
(g) REAL PROPERTY COLLATERAL. The Agent shall have received, in
form and substance reasonably satisfactory to the Agent:
(i) fully executed and notarized mortgages, deeds of trust
or deeds to secure debt (each, as the same may be amended, modified,
restated or supplemented from time to time, a "MORTGAGE INSTRUMENT"
and collectively the "MORTGAGE INSTRUMENTS") encumbering the fee
interest and/or leasehold interest of any Credit Party (to the
extent deemed material by the Agent) in each real property asset
designated in SCHEDULE 6.19(a) (each a "MORTGAGED PROPERTY" and
collectively the "MORTGAGED REAL Properties");
(ii) a title report obtained by the Credit Parties to the
extent deemed necessary by the Agent) in respect of each of the
Mortgaged Properties;
(iii) in the case of each material real property leasehold
interest of any Credit Party constituting Mortgaged Property, (a)
such estoppel letters, consents and waivers
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from the landlords on such real property as may be required by the
Agent, which estoppel letters shall be in the form and substance
reasonably satisfactory to the Agent and (b) evidence that the
applicable lease, a memorandum of lease with respect thereto, or
other evidence of such lease in form and substance reasonably
satisfactory to the Agent, has been or will be recorded in all
places to the extent necessary or desirable, in the reasonable
judgment of the Agent, so as to enable the Mortgage Instrument
encumbering such leasehold interest to effectively create a valid
and enforceable first priority lien (subject to Permitted Liens) on
such leasehold interest in favor of the Agent (or such other Person
as may be required or desired under local law) for the benefit of
Lenders;
(iv) the Agent shall have received, and the title insurance
company issuing the policy referred to in Section 5.1(i) (the "TITLE
INSURANCE COMPANY") shall have received, maps or plats of an
as-built survey of the sites of the real property covered by the
Mortgage Instruments certified to the Agent and the Title Insurance
Company in a manner reasonably satisfactory to each of the agent and
the Title Insurance Company, dated a date reasonably satisfactory to
the Agent and the Title Insurance Company by an independent
professional licensed land surveyor, which maps or plats and the
surveys on which they are based shall be made in accordance with
standards that enable the Title Insurance Company to issue the
policies referred to in Section 5.1(i)(v) below without exception
for "Survey matters", except for matters as are reasonably
acceptable to the Agent;
(v) ALTA mortgagee title insurance policies issued by First
American Title Insurance Company (the "MORTGAGE POLICIES"), in
amounts not less than the respective amounts designated in SCHEDULE
6.19(a) with respect to any particular Mortgaged Property, assuring
the Agent that each of the Mortgage Instruments creates a valid and
enforceable first priority mortgage lien on the applicable Mortgaged
Property, free and clear of all defects and encumbrances except
Permitted Liens, which Mortgage Policies shall be in form and
substance reasonably satisfactory to the Agent and shall provide for
affirmative insurance and such reinsurance as the Agent may
reasonably request, all of the foregoing in form and substance
reasonably satisfactory to the Agent;
(vi) Evidence, which may be in the form of a letter from an
insurance broker or a municipal engineer or certified on a survey,
as to whether (a) any Mortgaged Property (an "FLOOD HAZARD
Property") is in an area designated by the Federal Emergency
Management Agency as having special flood or mud slide hazards and
(b) the community in which such Flood Hazard Property is located is
participating in the National Flood Insurance Program;
(vii) If there are any Flood Hazard Properties, a Credit
Party's written acknowledgment of receipt of written notification
from the Agent (a) as to the existence of each such Flood Hazard
Property and (b) as to whether the community in which each such
Flood Hazard Property is located is participating in the National
Flood Insurance Program;
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(viii) If there are maps or plats of an as-built survey of the
sites of the Mortgaged Properties certified to the Agent and the
Title Insurance Company in a manner reasonably satisfactory to them,
dated a date satisfactory to the Agent and the Title Insurance
Company by an independent professional licensed land surveyor
reasonably satisfactory to the Agent and the Title Insurance
Company, which maps or plats and the surveys on which they are based
shall be sufficient to delete any standard printed survey exception
contained in the applicable title policy and be made in accordance
with the Minimum Standard Detail Requirements for Land Title Surveys
jointly established and adopted by the American Land Title
Association and the American Congress on Surveying and Mapping in
1992 or 1997, and, without limiting the generality of the foregoing,
there shall be surveyed and shown on such maps, plats or surveys the
following: (A) the locations on such sites of all the buildings,
structures and other improvements and the established building
setback lines; (B) the lines of streets abutting the sites and width
thereof; (C) all access and other easements appurtenant to the sites
necessary to use the sites; (D) all roadways, paths, driveways,
easements, encroachments and overhanging projections and similar
encumbrances affecting the site, whether recorded, apparent from a
physical inspection of the sites or otherwise known to the surveyor;
(E) any encroachments on any adjoining property by the building
structures and improvements on the sites; and (F) if the site is
described as being on a filed map, a legend relating the survey to
said map; and
(ix) Evidence reasonably satisfactory to the Agent that each
of the Mortgaged Properties, and the uses of the Mortgaged
Properties, are in compliance in all material respects with all
applicable laws, regulations and ordinances including without
limitation health and environmental protection laws.
(h) PRIORITY OF LIENS. The Agent shall have received satisfactory
evidence that (i) the Agent, on behalf of the Lenders, holds a perfected,
first priority Lien on all Collateral and (ii) none of the Collateral is
subject to any other Liens other than Permitted Liens.
(i) EVIDENCE OF INSURANCE. Receipt by the Agent of copies of
insurance policies or certificates of insurance of the Consolidated
Parties evidencing liability and casualty insurance meeting the
requirements set forth in the Credit Documents, including, but not limited
to, naming the Agent as sole loss payee on behalf of the Lenders.
(j) CORPORATE STRUCTURE. The corporate capital and ownership
structure of the Consolidated Parties shall be as described in SCHEDULE
5.1(j).
(k) GOVERNMENT CONSENT. Receipt by the Agent of evidence that all
governmental, shareholder and material third party consents and approvals
necessary or desirable in connection with the related financings and other
transactions contemplated hereby have been obtained.
(l) MATERIAL ADVERSE EFFECT. No material adverse change shall have
occurred since December 27, 1997 in the condition (financial or
otherwise), business, management or prospects of the Consolidated Parties
taken as a whole.
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(m) LITIGATION. There shall not exist any pending or threatened
action, suit, investigation or proceeding against a Consolidated Party
that could reasonably be expected to have a Material Adverse Effect.
(n) SUBORDINATED NOTES. The Borrower shall have received not less
than $100,000,000 in cash proceeds from the issuance of unsecured senior
subordinated notes which shall have a maturity of not less than ten years
from the date of closing and which shall be otherwise on terms and
conditions acceptable to the Agent.
(o) EQUITY CONTRIBUTION. The Borrower shall have received new cash
equity in the amount of at least $18,500,000 (with total equity (which
shall include new equity plus the value of retained shares) to be in an
amount not less than $35,000,000) and shall have made all payments in
connection with the Related Transactions in an aggregate amount not to
exceed $59,100,000.
(p) OTHER INDEBTEDNESS. Receipt by the Agent of evidence that the
Consolidated Parties shall have no Funded Indebtedness other than the
Indebtedness under the Credit Documents and the Subordinated Notes.
(q) OFFICER'S CERTIFICATES. The Agent shall have received a
certificate or certificates executed by a Responsible Officer of the
Borrower as of the Closing Date stating that (i) all governmental,
shareholder and third party consents and approvals, if any, with respect
to the Credit Documents and the transactions contemplated thereby have
been obtained, (ii) each Consolidated Party is in compliance with all
existing financial obligations, (iii) no action, suit, investigation or
proceeding is pending or threatened in any court or before any arbitrator
or governmental instrumentality that purports to affect any Consolidated
Party or any transaction contemplated by the Credit Documents, if such
action, suit, investigation or proceeding would reasonably be expected to
have a Material Adverse Effect, and (iv) immediately after giving effect
to this Credit Agreement, the other Credit Documents and all the
transactions contemplated therein to occur on such date, (A) each of the
Credit Parties is Solvent, (B) no Default or Event of Default exists, (C)
all representations and warranties contained herein and in the other
Credit Documents are true and correct in all material respects, and (D)
the Credit Parties are in compliance with each of the financial covenants
set forth in Section 7.11.
(r) EXISTING CREDIT AGREEMENT. The Agent shall have received
satisfactory evidence that the Existing Credit Agreement has been
terminated.
(s) FEES AND EXPENSES. Payment by the Credit Parties of all fees and
expenses owed by them to the Lenders and the Agent, including, without
limitation, payment to the Agent of the fees set forth in the Fee Letter.
(t) OTHER. Receipt by the Lenders of such other documents,
instruments, agreements or information as reasonably requested by any
Lender, including, but not limited to, information regarding litigation,
tax, accounting, labor, insurance, pension liabilities (actual or
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contingent), real estate leases, material contracts, debt agreements,
property ownership and contingent liabilities of the Consolidated Parties.
5.2 CONDITIONS TO ALL EXTENSIONS OF CREDIT.
The obligations of each Lender to make, convert or extend any Loan and of
the Issuing Lender to issue or extend any Letter of Credit (including the
initial Loans and the initial Letter of Credit) are subject to satisfaction of
the following conditions in addition to satisfaction on the Closing Date of the
conditions set forth in Section 5.1:
(a) The Borrower shall have delivered (i) in the case of any
Revolving Loan, an appropriate Notice of Borrowing or Notice of
Extension/Conversion or (ii) in the case of any Letter of Credit, the
Issuing Lender shall have received an appropriate request for issuance in
accordance with the provisions of Section 2.2(b);
(b) The representations and warranties set forth in Section 6 shall,
subject to the limitations set forth therein, be true and correct in all
material respects as of such date (except for those which expressly relate
to an earlier date);
(c) There shall not have been commenced against any Credit Party an
involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or any case, proceeding or other
action for the appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of such Person or for any
substantial part of its Property or for the winding up or liquidation of
its affairs, and such involuntary case or other case, proceeding or other
action shall remain undismissed, undischarged or unbonded;
(d) No Default or Event of Default shall have occurred and be
continuing either prior to or after giving effect thereto;
(e) No material adverse change shall have occurred since December
27, 1997 financial or otherwise), business, management or prospects of the
Consolidated Parties taken as a whole; and
(f) Immediately after giving effect to the making of such Loan (and
the application of the proceeds thereof) or to the issuance of such Letter
of Credit, as the case may be, (i) the sum of the aggregate principal
amount of outstanding Revolving Loans PLUS LOC Obligations outstanding
shall not exceed the Revolving Committed Amount, and (ii) the LOC
Obligations shall not exceed the LOC Committed Amount.
The delivery of each Notice of Borrowing, each Notice of Extension/Conversion
and each request for a Letter of Credit pursuant to Section 2.2(b) shall
constitute a representation and warranty by the Borrower of the correctness of
the matters specified in subsections (b), (c), (d), (e) and (f) above.
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SECTION 6
REPRESENTATIONS AND WARRANTIES
The Credit Parties hereby represent to the Agent and each Lender that:
6.1 FINANCIAL CONDITION.
(a) The audited consolidated balance sheet of the Consolidated
Parties as of December 27, 1997 and the audited consolidated statements of
earnings and statements of cash flows for the years ended December 31,
1996 and December 31, 1995 and the reviewed statements of earnings and
statements of cash flows for the three month period ended March 31, 1998
have heretofore been furnished to each Lender. Such audited financial
statements (including the notes thereto) (i) have been audited by Xxxxxx
Xxxxxxxx, L.L.P., (ii) have been prepared in accordance with GAAP
consistently applied throughout the periods covered thereby and (iii)
present fairly (on the basis disclosed in the footnotes to such financial
statements) in all material respects the consolidated financial condition,
results of operations and cash flows of the Consolidated Parties as of
such date and for such periods. The unaudited interim balance sheets of
the Consolidated Parties as at the end of, and the related unaudited
interim statements of earnings and of cash flows for, each fiscal month
and quarterly period ended after December 31, 1997 and prior to the
Closing Date (other than the month and quarterly period ending June 30,
1998) have heretofore been furnished to each Lender. Such interim
financial statements for each such quarterly period, (i) have been
prepared in accordance with GAAP consistently applied throughout the
periods covered thereby (subject to the absence of footnotes and changes
resulting from audit and normal year-end audit adjustments) and (ii)
present fairly (on the basis disclosed in the footnotes to such financial
statements) in all material respects the consolidated financial condition,
results of operations and cash flows of the Consolidated Parties as of
such date and for such periods. During the period from December 31, 1997
to and including the Closing Date, there has been no sale, transfer or
other disposition by any Consolidated Party of any material part of the
business or property of the Consolidated Parties, taken as a whole, and no
purchase or other acquisition by any of them of any business or property
(including any capital stock of any other person) material in relation to
the consolidated financial condition of the Consolidated Parties, taken as
a whole, in each case, which, is not reflected in the foregoing financial
statements or in the notes thereto and has not otherwise been disclosed in
writing to the Lenders on or prior to the Closing Date.
(b) The financial statements delivered to the Lenders pursuant to
Section 7.1(a), (i) have been prepared in accordance with GAAP (except as
may otherwise be permitted under Section 7.1(a)) and (ii) present fairly
(on the basis disclosed in the footnotes to such financial statements) in
all material respects the consolidated financial condition, results of
operations and cash flows of the Consolidated Parties as of such date and
for such periods.
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6.2 NO MATERIAL CHANGE.
Since December 27, 1997, (a) there has been no development or event
relating to or affecting a Consolidated Party which has had or would reasonably
be expected to have a Material Adverse Effect and (b) except as otherwise
permitted under this Credit Agreement, no dividends or other distributions have
been declared, paid or made upon the Capital Stock in a Consolidated Party nor
has any of the Capital Stock in a Consolidated Party been redeemed, retired,
purchased or otherwise acquired for value.
6.3 ORGANIZATION AND GOOD STANDING.
Each of the Consolidated Parties (a) is duly organized, validly existing
and is in good standing under the laws of the jurisdiction of its incorporation
or organization, (b) has the corporate or other necessary power and authority,
and the legal right, to own and operate its property, to lease the property it
operates as lessee and to conduct the business in which it is currently engaged
and (c) is duly qualified as a foreign entity and in good standing under the
laws of each jurisdiction where its ownership, lease or operation of property or
the conduct of its business requires such qualification, other than in such
jurisdictions where the failure to be so qualified and in good standing could
reasonably be expected to have a Material Adverse Effect.
6.4 POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.
Each of the Credit Parties has the corporate or other necessary power and
authority, and the legal right, to make, deliver and perform the Credit
Documents to which it is a party, and in the case of the Borrower, to obtain
extensions of credit hereunder, and has taken all necessary corporate action to
authorize the borrowings and other extensions of credit on the terms and
conditions of this Credit Agreement and to authorize the execution, delivery and
performance of the Credit Documents to which it is a party. No consent or
authorization of, filing with, notice to or other similar act by or in respect
of, any Governmental Authority or any other Person is required to be obtained or
made by or on behalf of any Credit Party in connection with the borrowings or
other extensions of credit hereunder or with the execution, delivery,
performance, validity or enforceability of the Credit Documents to which such
Credit Party is a party, except for (a) consents, authorizations, notices and
filings described in SCHEDULE 6.4, all of which have been obtained or made or
have the status described in such SCHEDULE 6.4 and (b) filings to perfect the
Liens created by the Collateral Documents. This Credit Agreement has been, and
each other Credit Document to which any Credit Party is a party will be, duly
executed and delivered on behalf of the Credit Parties. This Credit Agreement
constitutes, and each other Credit Document to which any Credit Party is a party
when executed and delivered will constitute, a legal, valid and binding
obligation of such Credit Party enforceable against such party in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).
6.5 NO CONFLICTS.
Neither the execution and delivery of the Credit Documents, nor the
consummation of the transactions contemplated therein, nor performance of and
compliance with the terms and provisions
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thereof by such Credit Party will (a) violate or conflict with any provision of
its articles or certificate of incorporation or bylaws or other organizational
or governing documents of such Person, (b) violate, contravene or materially
conflict with any Requirement of Law or any other law, regulation (including,
without limitation, Regulation U or Regulation X), order, writ, judgment,
injunction, decree or permit applicable to it, (c) violate, contravene or
conflict with contractual provisions of, or cause an event of default under, any
indenture, loan agreement, mortgage, deed of trust, contract or other agreement
or instrument to which it is a party or by which it may be bound, the violation
of which would reasonably be expected to have a Material Adverse Effect, or (d)
result in or require the creation of any Lien (other than those contemplated in
or created in connection with the Credit Documents) upon or with respect to its
properties.
6.6 NO DEFAULT.
No Consolidated Party is in default in any respect under any contract,
lease, loan agreement, indenture, mortgage, security agreement or other
agreement or obligation to which it is a party or by which any of its properties
is bound which default could reasonably be expected to have a Material Adverse
Effect. No Default or Event of Default has occurred or exists except as
previously disclosed in writing to the Lenders.
6.7 OWNERSHIP.
Each Consolidated Party is the owner of, and has good and marketable title
to, all of its respective assets and none of such assets is subject to any Lien
other than Permitted Liens.
6.8 INDEBTEDNESS.
Except as otherwise permitted under Section 8.1, the Consolidated Parties
have no Indebtedness.
6.9 LITIGATION.
There are no actions, suits or legal, equitable, arbitration or
administrative proceedings, pending or, to the knowledge of any Credit Party,
threatened against any Consolidated Party which could reasonably be expected to
have a Material Adverse Effect. Set forth on SCHEDULE 6.9 is a listing of all
outstanding matters of litigation with respect to which any Consolidated Party
is involved. SCHEDULE 6.9 may be updated from time to time by the Borrower by
giving notice thereof to the Agent.
6.10 TAXES.
Each Consolidated Party has filed, or caused to be filed, all tax returns
(federal, state, local and foreign) required to be filed and paid (a) all
amounts of taxes shown thereon to be due (including interest and penalties) and
(b) all other taxes, fees, assessments and other governmental charges (including
mortgage recording taxes, documentary stamp taxes and intangibles taxes) owing
by it, except for such taxes (i) which are not yet delinquent or (ii) that are
being contested in good faith and by proper proceedings, and against which
adequate reserves are being maintained in accordance with
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GAAP. No Credit Party is aware as of the Closing Date of any proposed tax
assessments against it or any other Consolidated Party.
6.11 COMPLIANCE WITH LAW.
Each Consolidated Party is in compliance with all Requirements of Law and
all other laws, rules, regulations, orders and decrees (including without
limitation Environmental Laws) applicable to it, or to its properties, unless
such failure to comply could not be reasonably expected to have a Material
Adverse Effect. No Requirement of Law would be reasonably expected to cause a
Material Adverse Effect.
6.12 ERISA.
(a) During the five-year period prior to the date on which this
representation is made or deemed made: (i) no ERISA Event has occurred,
and, to the best knowledge of the Credit Parties, no event or condition
has occurred or exists as a result of which any ERISA Event could
reasonably be expected to occur, with respect to any Plan; (ii) no
"accumulated funding deficiency," as such term is defined in Section 302
of ERISA and Section 412 of the Code, whether or not waived, has occurred
with respect to any Plan; (iii) each Plan has been maintained, operated,
and funded in compliance with its own terms and in material compliance
with the provisions of ERISA, the Code, and any other applicable federal
or state laws; and (iv) no lien in favor of the PBGC or a Plan has arisen
or is reasonably likely to arise on account of any Plan.
(b) The actuarial present value of all "benefit liabilities" (as
defined in Section 4001(a)(16) of ERISA), whether or not vested, under
each Single Employer Plan, as of the last annual valuation date prior to
the date on which this representation is made or deemed made (determined,
in each case, utilizing the actuarial assumptions used in such Plan's most
recent actuarial valuation report), did not exceed as of such valuation
date the fair market value of the assets of such Plan.
(c) Neither any Consolidated Party nor any ERISA Affiliate has
incurred, or, to the best knowledge of the Credit Parties, could be
reasonably expected to incur, any withdrawal liability under ERISA to any
Multiemployer Plan or Multiple Employer Plan. Neither any Consolidated
Party nor any ERISA Affiliate would become subject to any withdrawal
liability under ERISA if any Consolidated Party or any ERISA Affiliate
were to withdraw completely from all Multiemployer Plans and Multiple
Employer Plans as of the valuation date most closely preceding the date on
which this representation is made or deemed made. Neither any Consolidated
Party nor any ERISA Affiliate has received any notification that any
Multiemployer Plan is in reorganization (within the meaning of Section
4241 of ERISA), is insolvent (within the meaning of Section 4245 of
ERISA), or has been terminated (within the meaning of Title IV of ERISA),
and no Multiemployer Plan is, to the best knowledge of the Credit Parties,
reasonably expected to be in reorganization, insolvent, or terminated.
(d) No prohibited transaction (within the meaning of Section 406 of
ERISA or Section 4975 of the Code) or breach of fiduciary responsibility
has occurred with respect to a
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Plan which has subjected or may subject any Consolidated Party or any
ERISA Affiliate to any liability under Sections 406, 409, 502(i), or
502(l) of ERISA or Section 4975 of the Code, or under any agreement or
other instrument pursuant to which any Consolidated Party or any ERISA
Affiliate has agreed or is required to indemnify any person against any
such liability.
(e) Neither any Consolidated Party nor any ERISA Affiliates has any
material liability with respect to "expected post-retirement benefit
obligations" within the meaning of the Financial Accounting Standards
Board Statement 106.
6.13 SUBSIDIARIES.
Set forth on SCHEDULE 6.13 is a complete and accurate list of all
Subsidiaries of each Consolidated Party. Information on SCHEDULE 6.13 includes
jurisdiction of incorporation, the number of shares of each class of Capital
Stock outstanding, the number and percentage of outstanding shares of each class
owned (directly or indirectly) by such Consolidated Party; and the number and
effect, if exercised, of all outstanding options, warrants, rights of conversion
or purchase and all other similar rights with respect thereto. The outstanding
Capital Stock of all such Subsidiaries is validly issued, fully paid and
non-assessable and is owned by each such Consolidated Party, directly or
indirectly, free and clear of all Liens (other than those arising under or
contemplated in connection with the Credit Documents). Other than as set forth
in SCHEDULE 6.13, no Consolidated Party has outstanding any securities
convertible into or exchangeable for its Capital Stock nor does any such Person
have outstanding any rights to subscribe for or to purchase or any options for
the purchase of, or any agreements providing for the issuance (contingent or
otherwise) of, or any calls, commitments or claims of any character relating to
its Capital Stock. SCHEDULE 6.13 may be updated from time to time by the
Borrower by giving written notice thereof to the Agent.
6.14 GOVERNMENTAL REGULATIONS, ETC.
(a) No part of the Letters of Credit or proceeds of the Loans will
be used, directly or indirectly, for the purpose of purchasing or carrying
any "margin stock" within the meaning of Regulation G or Regulation U, or
for the purpose of purchasing or carrying or trading in any securities. If
requested by any Lender or the Agent, the Borrower will furnish to the
Agent and each Lender a statement to the foregoing effect in conformity
with the requirements of FR Form U-1 referred to in Regulation U. No
indebtedness being reduced or retired out of the proceeds of the Loans was
or will be incurred for the purpose of purchasing or carrying any margin
stock within the meaning of Regulation U or any "margin security" within
the meaning of Regulation T. "Margin stock" within the meaning of
Regulation U does not constitute more than 25% of the value of the
consolidated assets of the Consolidated Parties. None of the transactions
contemplated by this Credit Agreement (including, without limitation, the
direct or indirect use of the proceeds of the Loans) will violate or
result in a violation of the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, or regulations issued
pursuant thereto, or Regulation G, T, U or X.
(b) No Consolidated Party is subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act or the
Investment Company Act of 1940, each as amended. In addition, no
Consolidated Party is (i) an "investment company" registered or
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required to be registered under the Investment Company Act of 1940, as
amended, and is not controlled by such a company, or (ii) a "holding
company", or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary" of a "holding
company", within the meaning of the Public Utility Holding Company Act of
1935, as amended.
(c) No director, executive officer or principal shareholder of any
Consolidated Party is a director, executive officer or principal
shareholder of any Lender. For the purposes hereof the terms "director",
"executive officer" and "principal shareholder" (when used with reference
to any Lender) have the respective meanings assigned thereto in Regulation
O issued by the Board of Governors of the Federal Reserve System.
(d) Each Consolidated Party has obtained and holds in full force and
effect, all material franchises, licenses, permits, certificates,
authorizations, qualifications, accreditations, easements, rights of way
and other rights, consents and approvals which are necessary for the
ownership of its respective Property and to the conduct of its respective
businesses as presently conducted.
(e) No Consolidated Party is in violation of any applicable statute,
regulation or ordinance of the United States of America, or of any state,
city, town, municipality, county or any other jurisdiction, or of any
agency thereof (including without limitation, environmental laws and
regulations), which violation could reasonably be expected to have a
Material Adverse Effect.
(f) Each Consolidated Party is current with all material reports and
documents, if any, required to be filed with any state or federal
securities commission or similar agency and is in full compliance in all
material respects with all applicable rules and regulations of such
commissions.
6.15 PURPOSE OF LOANS AND LETTERS OF CREDIT.
The proceeds of the Loans hereunder shall be used solely by the Borrower
to (a) refinance existing Indebtedness and (b) provide for working capital and
for Permitted Acquisitions. The Letters of Credit shall be used only for or in
connection with appeal bonds, reimbursement obligations arising in connection
with surety and reclamation bonds, reinsurance, domestic or international trade
transactions and obligations not otherwise aforementioned relating to
transactions entered into by the applicable account party in the ordinary course
of business.
6.16 ENVIRONMENTAL MATTERS.
To the knowledge of each Credit Party, set forth on SCHEDULE 6.16 is a
listing of each environmental matter affecting any real property owned or leased
by any Consolidated Party. None of the items set forth on SCHEDULE 6.16 could
reasonably be expected to have a Material Adverse Effect. With respect to each
other real property owned or leased by any Consolidated Party:
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(a) Each of the facilities and properties owned, leased or operated
by the Consolidated Parties (the "PROPERTIES") and all operations at the
Properties are in compliance with all applicable Environmental Laws, and
there is no material violation of any Environmental Law with respect to
the Properties or the businesses operated by the Consolidated Parties (the
"BUSINESSES"), and to the knowledge of the Credit Parties there are no
conditions relating to the Businesses or Properties that could give rise
to a material liability under any applicable Environmental Laws.
(b) None of the Properties contains, or to the knowledge of the
Credit Parties has previously contained, any Materials of Environmental
Concern at, on or under the Properties in amounts or concentrations that
constitute or constituted a material violation of, or could give rise to a
material liability under, Environmental Laws.
(c) No Consolidated Party has received any written or verbal notice
of, or inquiry from any Governmental Authority regarding, any violation,
alleged violation, non-compliance, liability or potential liability
regarding environmental matters or compliance with Environmental Laws with
regard to any of the Properties or the Businesses, nor does any
Consolidated Party have knowledge or reason to believe that any such
notice will be received or is being threatened.
(d) Materials of Environmental Concern have not been transported or
disposed of from the Properties, or generated, treated, stored or disposed
of at, on or under any of the Properties or any other location, in each
case by or on behalf of any Consolidated Party in material violation of,
or in a manner that could reasonably be expected to give rise to liability
under, any applicable Environmental Law.
(e) No judicial proceeding or governmental or administrative action
is pending or, to the best knowledge of any Credit Party, threatened,
under any Environmental Law to which any Consolidated Party is or will be
named as a party, nor are there any consent decrees or other decrees,
consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any
Environmental Law with respect to the Consolidated Parties, the Properties
or the Businesses.
(f) There has been no release or, threat of release of Materials of
Environmental Concern at or from the Properties, or arising from or
related to the operations (including, without limitation, disposal) of any
Consolidated Party in connection with the Properties or otherwise in
connection with the Businesses, in a material violation of or in amounts
or in a manner that could reasonably be expected to give rise to a
material liability under Environmental Laws.
6.17 INTELLECTUAL PROPERTY.
Each Consolidated Party owns, or has the legal right to use, all
trademarks, tradenames, copyrights, technology, know-how and processes (the
"INTELLECTUAL PROPERTY") necessary for each of them to conduct its business as
currently conducted except for those the failure to own or have such legal right
to use could not reasonably be expected to have a Material Adverse Effect. Set
forth on
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SCHEDULE 6.17 is a list of all Intellectual Property owned by each Consolidated
Party or that any Consolidated Party has the right to use. Except as provided on
SCHEDULE 6.17, no claim has been asserted and is pending by any Person
challenging or questioning the use of any such Intellectual Property or the
validity or effectiveness of any such Intellectual Property, nor does any Credit
Party know of any such claim, and to the Credit Parties' knowledge the use of
such Intellectual Property by any Consolidated Party does not infringe on the
rights of any Person, except for such claims and infringements that in the
aggregate, would not reasonably be expected to not have a Material Adverse
Effect. SCHEDULE 6.17 may be updated from time to time by the Borrower by giving
written notice thereof to the Agent.
6.18 SOLVENCY.
Each Credit Party is and, after consummation of the transactions
contemplated by this Credit Agreement will be Solvent.
6.19 INVESTMENTS.
All Investments of each Consolidated Party are Permitted Investments.
6.20 LOCATION OF COLLATERAL.
Set forth on SCHEDULE 6.20(a) is a list of all Mortgaged Properties with
street address, county and state where located. Set forth on SCHEDULE 6.20(b) is
a list of all locations where any tangible personal property of a Consolidated
Party is located, including county and state where located. Set forth on
SCHEDULE 6.20(c) is the chief executive office and principal place of business
of each Consolidated Party. SCHEDULE 6.20(a), 6.20(b) and 6.20(c) may be updated
from time to time by the Borrower giving written notice thereof to the Agent.
6.21 DISCLOSURE.
Neither this Credit Agreement nor any financial statements delivered to
the Lenders nor any other document, certificate or statement furnished to the
Lenders by or on behalf of any Consolidated Party in connection with the
transactions contemplated hereby contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
contained therein or herein not misleading.
6.22 NO BURDENSOME RESTRICTIONS.
No Consolidated Party is a party to any agreement or instrument or subject
to any other obligation or any charter or corporate restriction or any provision
of any applicable law, rule or regulation which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
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6.23 BROKERS' FEES.
No Consolidated Party has any obligation to any Person in respect of any
finder's, broker's, investment banking or other similar fee in connection with
any of the transactions contemplated under the Credit Documents.
6.24 LABOR MATTERS.
Except as set forth on SCHEDULE 6.24, there are no collective bargaining
agreements or Multiemployer Plans covering the employees of a Consolidated Party
as of the Closing Date and none of the Consolidated Parties has suffered any
strikes, walkouts, work stoppages or other material labor difficulty within the
last five years.
6.25 NATURE OF BUSINESS.
As of the Closing Date, the Consolidated Parties are engaged in the
business of cutting tool manufacturing and distribution.
6.26 YEAR 2000 COMPLIANCE.
The Borrower has (i) initiated a review and assessment of all areas within
its and each of its Subsidiaries' business and operations that could be
adversely affected by the "Year 2000 Problem" (that is, the risk that computer
applications used by the Borrower or any of its Subsidiaries may be unable to
recognize and perform properly date-sensitive functions involving certain dates
prior to and any date after December 31, 1999), (ii) developed a plan and
timeline for addressing the Year 2000 Problem on a timely basis, and (iii) to
date, implemented that plan in accordance with such timetable. The Borrower
believes that all computer applications that are material to its or any of its
Subsidiaries' business and operations will on a timely basis be able to perform
properly date-sensitive functions for all dates before and after January 1, 2000
(that is, be "Year 2000 compliant"), except to the extent that a failure to do
so could not reasonably be expected to have Material Adverse Effect.
SECTION 7
AFFIRMATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this Credit
Agreement is in effect or any amounts payable hereunder or under any other
Credit Document shall remain outstanding, and until all of the Commitments
hereunder shall have terminated:
7.1 INFORMATION COVENANTS.
The Borrower will furnish, or cause to be furnished, to the Agent and each
of the Lenders:
(a) ANNUAL FINANCIAL STATEMENTS. As soon as available, and in any
event within 90 days after the close of each fiscal year of the
Consolidated Parties, (i) a consolidated balance
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sheet of the Consolidated Parties, as of the end of such fiscal year,
together with related consolidated statements of operations and
shareholders' equity and consolidated cash flows for such fiscal year,
setting forth in comparative form consolidated figures for the preceding
fiscal year, all such financial information described above to be in
reasonable form and detail and audited by independent certified public
accountants of recognized national standing reasonably acceptable to the
Agent and whose opinion shall be to the effect that such financial
statements have been prepared in accordance with GAAP (except for changes
with which such accountants concur) and shall not be limited as to the
scope of the audit or qualified as to the status of the Consolidated
Parties as a going concern and (ii) an unaudited consolidating balance
sheet and statement of operations of the Consolidated Parties, as of the
end of such fiscal year.
(b) QUARTERLY FINANCIAL STATEMENTS. As soon as available, and in any
event within 45 days after the close of each fiscal quarter of the
Consolidated Parties (other than the fourth fiscal quarter, in which case
90 days after the end thereof) a consolidated balance sheet of the
Consolidated Parties, as of the end of such fiscal quarter, together with
related consolidated statements of operations and shareholders' equity and
consolidated cash flows for such fiscal quarter in each case setting forth
in comparative form consolidated figures for the corresponding period of
the preceding fiscal year, all such financial information described above
to be in reasonable form and detail and reasonably acceptable to the
Agent, and accompanied by a certificate of a Responsible Officer to the
effect that such quarterly financial statements fairly present in all
material respects the financial condition of the Consolidated Parties and
have been prepared in accordance with GAAP, subject to the absence of
footnotes and changes resulting from audit and normal year-end audit
adjustments.
(c) MONTHLY FINANCIAL STATEMENTS. As soon as available, and in
any event within 30 days after the end of each month of the Consolidated
Parties, a copy of the Borrower's monthly management summary.
(d) OFFICER'S CERTIFICATE. At the time of delivery of the financial
statements provided for in Sections 7.1(a) and 7.1(b) above, a certificate
of a Responsible Officer substantially in the form of EXHIBIT 7.1(d), (i)
demonstrating, with respect to the annual and quarterly statements only,
compliance with the financial covenants contained in Section 7.11 by
calculation thereof as of the end of each such fiscal period and (ii)
stating that no Default or Event of Default exists, or if any Default or
Event of Default does exist, specifying the nature and extent thereof and
what action the Credit Parties propose to take with respect thereto.
(e) ANNUAL BUSINESS PLAN AND BUDGETS. Within 60 days after the end
of each fiscal year of the Borrower, beginning with the fiscal year ending
January 2, 1999 an annual business plan and budget of the Consolidated
Parties containing, among other things, pro forma financial statements for
the next fiscal year.
(f) COMPLIANCE WITH CERTAIN PROVISIONS OF THE CREDIT AGREEMENT.
Within 90 days after the end of each fiscal year of the Borrower, a
certificate containing information regarding the amount of all Asset
Dispositions that were made during the prior fiscal year.
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(g) ACCOUNTANT'S CERTIFICATE. Within the period for delivery of the
annual financial statements provided in Section 7.1(a), a report of the
accountants conducting the annual audit stating that they have reviewed
Sections 7.11, 8.1, 8.5, 8.6 and 8.7 of this Credit Agreement and stating
further whether, in the course of their audit, they have become aware of
any non-compliance with any of the terms, covenants, provisions or
conditions of Sections 7.11, 8.1, 8.5, 8.6 or 8.7 of this Credit Agreement
insofar as such non-compliance relates to accounting matters and, if any
such non-compliance exists, specifying the nature and extent thereof.
(h) AUDITOR'S REPORTS. Promptly upon receipt thereof, a copy of any
other report or "management letter" submitted by independent accountants
to any Consolidated Party in connection with any annual, interim or
special audit of the books of such Person.
(i) REPORTS. Promptly upon transmission or receipt thereof, (i)
copies of any filings and registrations with, and reports to or from, the
Securities and Exchange Commission, or any successor agency, and copies of
all financial statements, proxy statements, notices and reports as any
Consolidated Party shall send to its shareholders or to a holder of any
Indebtedness owed by any Consolidated Party in its capacity as such a
holder and (ii) upon the request of the Agent, all reports and written
information to and from the United States Environmental Protection Agency,
or any state or local agency responsible for environmental matters, the
United States Occupational Health and Safety Administration, or any state
or local agency responsible for health and safety matters, or any
successor agencies or authorities concerning environmental, health or
safety matters.
(j) NOTICES. Upon obtaining knowledge thereof, the Borrower will
give written notice to the Agent immediately of (i) the occurrence of an
event or condition consisting of a Default or Event of Default, specifying
the nature and existence thereof and what action the Credit Parties
propose to take with respect thereto, and (ii) the occurrence of any of
the following with respect to any Consolidated Party (A) the pendency or
commencement of any litigation, arbitral or governmental proceeding
against such Person which if adversely determined is likely to have a
Material Adverse Effect, (B) the institution of any proceedings against
such Person with respect to, or the receipt of notice by such Person of
potential liability or responsibility for violation, or alleged violation
of any federal, state or local law, rule or regulation, including but not
limited to, Environmental Laws, the violation of which could reasonably be
expected to have a Material Adverse Effect, or (C) any notice or
determination concerning the imposition of any withdrawal liability by a
Multiemployer Plan against such Person or any ERISA Affiliate, the
determination that a Multiemployer Plan is, or is expected to be, in
reorganization within the meaning of Title IV of ERISA or the termination
of any Plan.
(k) ERISA. Upon obtaining knowledge thereof, the Borrower will give
written notice to the Agent promptly (and in any event within five
business days) of: (i) of any event or condition, including, but not
limited to, any Reportable Event, that constitutes, or might reasonably
lead to, an ERISA Event; (ii) with respect to any Multiemployer Plan, the
receipt of notice as prescribed in ERISA or otherwise of any withdrawal
liability assessed against the Borrower or any of its ERISA Affiliates, or
of a determination that any Multiemployer Plan is in reorganization or
insolvent (both within the meaning of Title IV of ERISA); (iii) the
failure
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to make full payment on or before the due date (including extensions)
thereof of all amounts which any Consolidated Party or any ERISA Affiliate
is required to contribute to each Plan pursuant to its terms and as
required to meet the minimum funding standard set forth in ERISA and the
Code with respect thereto; or (iv) any change in the funding status of any
Plan that could have a Material Adverse Effect, together with a
description of any such event or condition or a copy of any such notice
and a statement by the chief financial officer of the Borrower briefly
setting forth the details regarding such event, condition, or notice, and
the action, if any, which has been or is being taken or is proposed to be
taken by the Credit Parties with respect thereto. Promptly upon request,
the Credit Parties shall furnish the Agent and the Lenders with such
additional information concerning any Plan as may be reasonably requested,
including, but not limited to, copies of each annual report/return (Form
5500 series), as well as all schedules and attachments thereto required to
be filed with the Department of Labor and/or the Internal Revenue Service
pursuant to ERISA and the Code, respectively, for each "plan year" (within
the meaning of Section 3(39) of ERISA).
(l) ENVIRONMENTAL.
(i) Upon the reasonable written request of the Agent (which
in any event, provided no Default or Event of Default shall have
occurred and be continuing, shall not exceed more than one time in
any 3 year period) the Credit Parties will furnish or cause to be
furnished to the Agent, at the Borrower's expense, a report of an
environmental assessment of reasonable scope, form and depth,
(including, where appropriate, invasive soil or groundwater
sampling) by a consultant reasonably acceptable to the Agent as to
the nature and extent of the presence of any Materials of
Environmental Concern on any Properties (as defined in Section 6.16)
and as to the compliance by any Consolidated Party with
Environmental Laws at such Properties. If the Credit Parties fail to
deliver such an environmental report within seventy-five (75) days
after receipt of such written request then the Agent may arrange for
same, and the Consolidated Parties hereby grant to the Agent and
their representatives access to the Properties to reasonably
undertake such an assessment (including, where appropriate, invasive
soil or groundwater sampling). The reasonable cost of any assessment
arranged for by the Agent pursuant to this provision will be payable
by the Borrower on demand and added to the obligations secured by
the Collateral Documents.
(ii) The Consolidated Parties will conduct and complete all
investigations, studies, sampling, and testing and all remedial,
removal, and other actions necessary to address all Materials of
Environmental Concern on, from or affecting any of the Properties to
the extent necessary to be in compliance with all Environmental Laws
and with the validly issued orders and directives of all
Governmental Authorities with jurisdiction over such Properties to
the extent any failure could reasonably be expected to have a
Material Adverse Effect.
(m) ADDITIONAL PATENTS AND TRADEMARKS. At the time of delivery of
the financial statements and reports provided for in Section 7.1(a), a
report signed by the chief financial officer or treasurer of the Borrower
setting forth (i) a list of registration numbers for all patents,
trademarks, service marks, tradenames and copyrights awarded to any
Consolidated Party since
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the last day of the immediately preceding fiscal year and (ii) a list of
all patent applications, trademark applications, service xxxx
applications, trade name applications and copyright applications submitted
by any Consolidated Party since the last day of the immediately preceding
fiscal year and the status of each such application, all in such form as
shall be reasonably satisfactory to the Agent.
(n) OTHER INFORMATION. With reasonable promptness upon any such
request, such other information regarding the business, properties or
financial condition of any Consolidated Party as the Agent or the Required
Lenders may reasonably request.
7.2 PRESERVATION OF EXISTENCE AND FRANCHISES.
Except as a result of or in connection with a dissolution, merger or
disposition of a Subsidiary permitted under Section 8.4 or Section 8.5, each
Credit Party will, and will cause each of its Subsidiaries to, do all things
necessary to preserve and keep in full force and effect its existence, rights,
franchises and authority.
7.3 BOOKS AND RECORDS.
Each Credit Party will, and will cause each of its Subsidiaries to, keep
complete and accurate books and records of its transactions in accordance with
good accounting practices on the basis of GAAP (including the establishment and
maintenance of appropriate reserves).
7.4 COMPLIANCE WITH LAW.
Each Credit Party will, and will cause each of its Subsidiaries to, comply
with all laws, rules, regulations and orders, and all applicable restrictions
imposed by all Governmental Authorities, applicable to it and its Property if
noncompliance with any such law, rule, regulation, order or restriction could
reasonably be expected to have a Material Adverse Effect.
7.5 PAYMENT OF TAXES AND OTHER INDEBTEDNESS.
Each Credit Party will, and will cause each of its Subsidiaries to, pay
and discharge (a) all taxes, assessments and governmental charges or levies
imposed upon it, or upon its income or profits, or upon any of its properties,
before they shall become delinquent, (b) all lawful claims (including claims for
labor, materials and supplies) which, if unpaid, might give rise to a Lien upon
any of its properties, and (c) except as prohibited hereunder, all of its other
Indebtedness as it shall become due; PROVIDED, HOWEVER, that no Consolidated
Party shall be required to pay any such tax, assessment, charge, levy, claim or
Indebtedness which is being contested in good faith by appropriate proceedings
and as to which adequate reserves therefor have been established in accordance
with GAAP, unless the failure to make any such payment (i) could give rise to an
immediate right to foreclose on a Lien securing such amounts or (ii) could
reasonably be expected to have a Material Adverse Effect.
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7.6 INSURANCE.
Each Credit Party will, and will cause each of its Subsidiaries to, at all
times maintain in full force and effect insurance (including worker's
compensation insurance, liability insurance, casualty insurance and business
interruption insurance) in such amounts, covering such risks and liabilities and
with such deductibles or self-insurance retentions as are in accordance with
normal industry practice (or as otherwise required by the Collateral Documents).
The Agent shall be named as loss payee or mortgagee, as its interest may appear,
and/or additional insured with respect to any such insurance providing coverage
in respect of any Collateral, and each provider of any such insurance shall
agree, by endorsement upon the policy or policies issued by it or by independent
instruments furnished to the Agent, that it will give the Agent thirty (30) days
prior written notice before any such policy or policies shall be altered or
canceled, and that no act or default of any Consolidated Party or any other
Person shall affect the rights of the Agent under such policy or policies. The
present insurance coverage of the Consolidated Parties is outlined as to
carrier, policy number, expiration date, type and amount on SCHEDULE 7.6.
In case of any material loss, damage to or destruction of the Collateral
of any Credit Party or any part thereof, such Credit Party shall promptly give
written notice thereof to the Agent generally describing the nature and extent
of such damage or destruction. In case of any loss, damage to or destruction of
the Collateral of any Credit Party or any part thereof, such Credit Party,
whether or not the insurance proceeds, if any, received on account of such
damage or destruction shall be sufficient for that purpose, at such Credit
Party's cost and expense, will promptly repair or replace the Collateral of such
Credit Party so lost, damaged or destroyed; PROVIDED, HOWEVER, that such Credit
Party need not repair or replace the Collateral of such Credit Party so lost,
damaged or destroyed to the extent that (i) the failure to make such repair or
replacement is desirable to the proper conduct of the business of such Credit
Party in the ordinary course and otherwise in the best interest of such Credit
Party and (ii) the value of such insurance proceeds received by the Borrower
shall not exceed $250,000 in the aggregate.
7.7 MAINTENANCE OF PROPERTY.
Each Credit Party will, and will cause each of its Subsidiaries to,
maintain and preserve its properties and equipment material to the conduct of
its business in good repair, working order and condition, normal wear and tear
and casualty and condemnation excepted, and will make, or cause to be made, to
such properties and equipment from time to time all repairs, renewals,
replacements, extensions, additions, betterments and improvements thereto as may
be needed or proper, to the extent and in the manner customary for companies in
similar businesses.
7.8 PERFORMANCE OF OBLIGATIONS.
Each Credit Party will, and will cause each of its Subsidiaries to,
perform in all material respects all of its obligations under the terms of all
material agreements, indentures, mortgages, security agreements or other debt
instruments to which it is a party or by which it is bound.
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7.9 USE OF PROCEEDS.
The Borrower will use the proceeds of the Loans and will use the Letters
of Credit solely for the purposes set forth in Section 6.15.
7.10 AUDITS/INSPECTIONS.
Upon reasonable notice and during normal business hours, each Credit Party
will, and will cause each of its Subsidiaries to, permit representatives
appointed by the Agent, including, without limitation, independent accountants,
agents, attorneys, and appraisers to visit and inspect its property, including
its books and records, its accounts receivable and inventory, its facilities and
its other business assets, and to make photocopies or photographs thereof and to
write down and record any information such representative obtains and shall
permit the Agent or its representatives to investigate and verify the accuracy
of information provided to the Lenders and to discuss all such matters with the
officers, employees and representatives of such Person. The Credit Parties agree
that the Agent, and its representatives, may conduct an annual audit of the
Collateral, at the expense of the Borrower, provided that such expense shall not
be in excess of $5000 annually.
7.11 FINANCIAL COVENANTS.
(a) FIXED CHARGE COVERAGE RATIO. The Fixed Charge Coverage Ratio, as
of the last day of each fiscal quarter of the Consolidated Parties for
each date of determination occurring during each of the periods listed
below, shall be greater than or equal to:
Period Ratio
------ -----
Closing Date through December 31, 1999 1.00 to 1.0
January 1, 2000 and thereafter 1.10 to 1.0
(b) NET LEVERAGE RATIO. The Net Leverage Ratio, as of the last day
of each fiscal quarter of the Consolidated Parties, for each date of
determination occurring during each of the periods listed below, shall be
less than or equal to:
Period Ratio
------ -----
Closing Date through December 31, 1998 5.50 to 1.0
January 1, 1999 through December 31, 1999 5.00 to 1.0
January 1, 2000 and thereafter 4.75 to 1.0
(c) INTEREST COVERAGE RATIO. The Interest Coverage Ratio, as of the
last day of each fiscal quarter of the Consolidated Parties for each date
of determination occurring during each of the periods listed below, shall
be greater than or equal to:
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Period Ratio
------ -----
Closing Date through December 31, 1998 1.50 to 1.0
January 1, 1999 through December 31, 1999 1.65 to 1.0
January 1, 2000 and thereafter 1.80 to 1.0
(d) MAXIMUM BORROWING AMOUNT. The aggregate amount of outstanding
Revolving Loans PLUS LOC Obligations outstanding as of the last day of
each fiscal quarter of the Consolidated Parties shall not exceed the
Maximum Borrowing Amount.
7.12 ADDITIONAL CREDIT PARTIES.
As soon as practicable and in any event within 60 days after any Person
becomes a Subsidiary of any Credit Party, the Borrower shall provide the Agent
with written notice thereof setting forth information in reasonable detail
describing all of the assets of such Person and shall (a) if such Person is a
Domestic Subsidiary of a Credit Party, cause such Person to execute a Joinder
Agreement in substantially the same form as EXHIBIT 7.12, (b) cause 100% (if
such Person is a Domestic Subsidiary of a Credit Party) or 65% (if such Person
is a direct Foreign Subsidiary of a Credit Party) of the Capital Stock of such
Person to be delivered to the Agent (together with undated stock powers signed
in blank (unless, with respect to a Foreign Subsidiary, such stock powers are
deemed unnecessary by the Agent in its reasonable discretion under the law of
the jurisdiction of incorporation of such Person)) and pledged to the Agent
pursuant to an appropriate pledge agreement(s) in substantially the form of the
Pledge Agreement and otherwise in form acceptable to the Agent and (c) cause
such Person to (i) if such Person owns or leases any real property located in
the United States of America or deemed to be material by the Agent or the
Required Lenders in its or their sole reasonable discretion, deliver to the
Agent with respect to such real property documents, instruments and other items
of the types required to be delivered by the Agent all in form, content and
scope reasonably satisfactory to the Agent and (ii) deliver such other
documentation as the Agent may reasonably request in connection with the
foregoing, including, without limitation, appropriate UCC-1 financing
statements, real estate title insurance policies, environmental reports,
landlord's waivers, certified resolutions and other organizational and
authorizing documents of such Person, favorable opinions of counsel to such
Person (which shall cover, among other things, the legality, validity, binding
effect and enforceability of the documentation referred to above and the
perfection of the Agent's liens thereunder) and other items of the types
required to be delivered pursuant to Section 5.1(e), all in form, content and
scope reasonably satisfactory to the Agent.
7.13 PLEDGED ASSETS.
Each Credit Party will, and will cause each of its Subsidiaries to, cause
(a) all of its owned personal property located in the United States and (b) to
the extent deemed to be material by the Agent or the Required Lenders in its or
their sole reasonable discretion, all of its other owned personal property, to
be subject at all times to first priority, perfected Liens in favor of the Agent
pursuant to the terms and conditions of the Collateral Documents or, with
respect to any such property acquired subsequent to the Closing Date, such other
additional security documents as the Agent shall reasonably request. In
furtherance of the foregoing terms of this Section 7.13, the Borrower agrees to
promptly provide the Agent with written notice of the acquisition by, or the
entering into a lease by, any Credit Party of any asset(s) having a market value
greater than $500,000, setting forth in reasonable detail the
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location and a description of the asset(s) so acquired. Without limiting the
generality of the above, the Credit Parties will cause 100% of the Capital Stock
or other equity interest in each of their direct or indirect Domestic
Subsidiaries and 65% of the Capital Stock or other equity interest in each of
their direct Foreign Subsidiaries to be subject at all times to a first
priority, perfected Lien in favor of the Agent pursuant to the terms and
conditions of the Collateral Documents or such other security documents as the
Agent shall reasonably request.
If, subsequent to the Closing Date, a Credit Party shall acquire any
intellectual property, securities, instruments, chattel paper or other personal
property required to be delivered to the Agent as Collateral hereunder or under
any of the Collateral Documents, the Borrower shall promptly (and in any event
within five (5) Business Days) after any responsible officer of a Credit Party
acquires knowledge of same notify the Agent of same.
7.14 YEAR 2000 COMPLIANCE.
The Borrower will promptly notify the Agent in the event that the
Borrower discovers or determines that any computer application that is material
to its or any of its Subsidiaries business and operations will not be Year 2000
compliant (as such term is defined in Section 6.25), except to the extent that
such failure could not reasonably be expected to have a Material Adverse Effect.
SECTION 8
NEGATIVE COVENANTS
Each Credit Party hereby covenants and agrees that, so long as this Credit
Agreement is in effect or any amounts payable hereunder or under any other
Credit Document shall remain outstanding, and until all of the Commitments
hereunder shall have terminated:
8.1 INDEBTEDNESS.
The Credit Parties will not permit any Consolidated Party to contract,
create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness arising under this Credit Agreement and the
other Credit Documents;
(b) Indebtedness of the Borrower and its Subsidiaries set forth in
SCHEDULE 8.1 (and renewals, refinancings and extensions thereof on terms
and conditions not materially less favorable to the Borrower or its
Subsidiaries, as applicable, than such existing Indebtedness);
(c) purchase money Indebtedness (including Capital Leases) hereafter
incurred by the Borrower or any of its Subsidiaries to finance the
purchase of fixed assets PROVIDED that (i) the total of all such
Indebtedness for all such Persons taken together shall not exceed an
aggregate principal amount of $4,000,000 at any one time (including any
such Indebtedness referred to in subsection (b) above); (ii) such
Indebtedness when incurred shall not exceed the purchase price of
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the asset(s) financed; and (iii) no such Indebtedness shall be refinanced
for a principal amount in excess of the principal balance outstanding
thereon at the time of such refinancing;
(d) obligations of the Borrower or any of its Subsidiaries in
respect of Hedging Agreements entered into in order to manage existing or
anticipated interest rate or exchange rate risks and not for speculative
purposes;
(e) intercompany Indebtedness arising out of loans and advances
permitted under Section 8.6;
(f) Indebtedness in respect of the Subordinated Notes;
(g) Indebtedness of Foreign Subsidiaries so long as, with respect to
each such Foreign Subsidiary, such Indebtedness does not exceed the sum of
(i) 85% of such Foreign Subsidiary's accounts receivable plus (ii) 60% of
such Foreign Subsidiary's inventory; provided, however, upon notice to the
Agent, any Foreign Subsidiary may incur additional Indebtedness in excess
of the amount set forth herein provided that if such additional
Indebtedness shall be so incurred, the Revolving Committed Amount
hereunder shall be reduced on a dollar for dollar basis therewith.
(h) in addition to the Indebtedness otherwise permitted by this
Section 8.1, other Indebtedness hereafter incurred by the Borrower or any
of its Subsidiaries in an aggregate amount not to exceed $500,000 at any
time outstanding;
(i) Indebtedness consisting of Seller Subordinated Notes incurred
in connection with Permitted Acquisitions as permitted by Section 8.6;
and
(j) Indebtedness assumed in connection with a Permitted Acquisition
as permitted by Section 8.6, and any refinancing, refunding, renewal or
extension thereof, PROVIDED that (i) such Indebtedness was in existence as
of the date of the acquisition and was not incurred or assumed in
contemplation thereof and (ii) the amount of any such Indebtedness shall
not be increased in connection with any refinancing, refunding, renewal or
extension.
8.2 LIENS.
The Credit Parties will not permit any Consolidated Party to contract,
create, incur, assume or permit to exist any Lien with respect to any of its
Property, whether now owned or after acquired, except for Permitted Liens.
8.3 NATURE OF BUSINESS.
The Credit Parties will not permit any Consolidated Party to substantively
alter the character or conduct of the business conducted by such Person as of
the Closing Date or any related expansion (including by way of acquisition of a
business engaged in the same or a similar line of business or otherwise) or
extension thereof.
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8.4 CONSOLIDATION, MERGER, DISSOLUTION, ETC.
Except in connection with an Asset Disposition permitted by the terms of
Section 8.5, the Credit Parties will not permit any Consolidated Party to enter
into any transaction of merger or consolidation or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution); PROVIDED that,
notwithstanding the foregoing provisions of this Section 8.4, (a) the Borrower
may merge or consolidate with any of its Subsidiaries provided that (i) the
Borrower shall be the continuing or surviving corporation, (ii) the Credit
Parties shall cause to be executed and delivered such documents, instruments and
certificates as the Agent may request so as to cause the Credit Parties to be in
compliance with the terms of Section 7.13 after giving effect to such
transaction and (iii) the Borrower shall have delivered to the Agent a Pro Forma
Compliance Certificate demonstrating that, upon giving effect on a Pro Forma
Basis to such transaction, no Default or Event of Default would exist, (b) any
Credit Party other than the Borrower may merge or consolidate with any other
Credit Party other than the Borrower PROVIDED that (i) the Credit Parties shall
cause to be executed and delivered such documents, instruments and certificates
as the Agent may request so as to cause the Credit Parties to be in compliance
with the terms of Section 7.13 after giving effect to such transaction and (ii)
the Borrower shall have delivered to the Agent a Pro Forma Compliance
Certificate demonstrating that, upon giving effect on a Pro Forma Basis to such
transaction, no Default or Event of Default would exist, (c) any Consolidated
Party which is not a Credit Party may be merged or consolidated with or into any
Credit Party other than the Borrower PROVIDED that (i) such Credit Party shall
be the continuing or surviving corporation, (ii) the Credit Parties shall cause
to be executed and delivered such documents, instruments and certificates as the
Agent may request so as to cause the Credit Parties to be in compliance with the
terms of Section 7.13 after giving effect to such transaction and (iii) the
Borrower shall have delivered to the Agent a Pro Forma Compliance Certificate
demonstrating that, upon giving effect on a Pro Forma Basis to such transaction,
no Default or Event of Default would exist, (d) any Consolidated Party which is
not a Credit Party may be merged or consolidated with or into any other
Consolidated Party which is not a Credit Party PROVIDED the Borrower shall have
delivered to the Agent a Pro Forma Compliance Certificate demonstrating that,
upon giving effect on a Pro Forma Basis to such transaction, no Default or Event
of Default would exist and (e) the Borrower may engage in Permitted
Acquisitions.
8.5 ASSET DISPOSITIONS.
The Credit Parties will not permit any Consolidated Party to make any
Asset Disposition (including, without limitation, any Sale and Leaseback
Transaction) other than Excluded Asset Dispositions unless (a) the consideration
paid in connection therewith is cash or Cash Equivalents and/or Replacement
Assets, (b) if such transaction is a Sale and Leaseback Transaction, such
transaction is permitted by the terms of Section 8.12, (c) the aggregate net
book value of all of the assets sold or otherwise disposed of by the
Consolidated Parties in all such transactions (excluding assets with respect to
which Replacement Assets are acquired) after the Closing Date shall not exceed
$1,000,000.
Upon a sale of assets or the sale of Capital Stock of a Consolidated Party
permitted by this Section 8.5, the Agent shall (to the extent applicable)
deliver to the Borrower, upon the Borrower's request and at the Borrower's
expense, such documentation as is reasonably necessary to evidence the release
of the Agent's security interest, if any, in such assets or Capital Stock,
including, without limitation, amendments or terminations of UCC financing
statements, if any, the return of stock
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certificates, if any, and the release of such Subsidiary from all of its
obligations, if any, under the Credit Documents.
8.6 INVESTMENTS.
The Credit Parties will not permit any Consolidated Party to make
Investments in or to any Person, except for Permitted Investments.
8.7 RESTRICTED PAYMENTS.
The Credit Parties will not permit any Consolidated Party to, directly or
indirectly, declare, order, make or set apart any sum for or pay any Restricted
Payment (other than payments relating to the Related Transactions which shall
occur on or about the Closing Date), except (a) to make dividends payable solely
in the same class of Capital Stock of such Person, (b) to make dividends or
other distributions payable to the Borrower (directly or indirectly through
Subsidiaries) or by one Subsidiary to another Subsidiary which is its parent,
(c) as permitted by Section 8.9, and (d) so long as no Default or Event of
Default shall have occurred and be continuing, to make payments pursuant to the
Stockholders Agreement in an aggregate amount not to exceed $4,000,000.
8.8 PREPAYMENTS OF INDEBTEDNESS, ETC.
The Credit Parties will not permit any Consolidated Party to (a) after the
issuance thereof, amend or modify (or permit the amendment or modification of)
any of the terms of any Indebtedness if such amendment or modification would add
or change any terms in a manner adverse to the issuer of such Indebtedness, or
shorten the final maturity or average life to maturity or require any payment to
be made sooner than originally scheduled or increase the interest rate
applicable thereto or change any subordination provision thereof, or (b) if any
Default or Event of Default has occurred and is continuing or would be directly
or indirectly caused as a result thereof, make (or give any notice with respect
thereto) any voluntary or optional payment or prepayment or redemption or
acquisition for value of (including without limitation, by way of depositing
money or securities with the trustee with respect thereto before due for the
purpose of paying when due), refund, refinance or exchange of any other
Indebtedness.
8.9 TRANSACTIONS WITH AFFILIATES.
Except as described on SCHEDULE 8.9, the Credit Parties will not permit
any Consolidated Party to enter into or permit to exist any transaction or
series of transactions with any officer, director, shareholder, Subsidiary or
Affiliate of such Person other than (a) loans or advances to any Credit Party,
(b) transfers of cash and assets to any Credit Party, (c) transactions permitted
by Section 8.1, Section 8.4, Section 8.5, Section 8.6, or Section 8.7, (d)
normal compensation benefits, business expense advances and reimbursement of
expenses of officers and directors and (e) except as otherwise specifically
limited in this Credit Agreement, other transactions which are entered into in
the ordinary course of such Person's business on terms and conditions
substantially as favorable to such Person as would be obtainable by it in a
comparable arms-length transaction with a Person other than an officer,
director, shareholder, Subsidiary or Affiliate.
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8.10 FISCAL YEAR; ORGANIZATIONAL DOCUMENTS.
The Credit Parties will not permit any Consolidated Party to change its
fiscal year (provided that any Subsidiary of the Borrower may change its fiscal
year to match that of the Borrower) or amend, modify or change its articles of
incorporation (or corporate charter or other similar organizational document) or
bylaws (or other similar document) without the prior written consent of the
Required Lenders.
8.11 LIMITATION ON RESTRICTED ACTIONS.
The Credit Parties will not permit any Consolidated Party to
(a) directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of
any such Person to (i) pay dividends or make any other distributions to
any Credit Party on its Capital Stock or with respect to any other
interest or participation in, or measured by, its profits, (ii) pay any
Indebtedness or other obligation owed to any Credit Party, (iii) make
loans or advances to any Credit Party, (iv) sell, lease or transfer any of
its properties or assets to any Credit Party, or (v) act as a Guarantor
and pledge its assets pursuant to the Credit Documents or any renewals,
refinancings, exchanges, refundings or extension thereof, except (in
respect of any of the matters referred to in clauses (i)-(v) above) for
such encumbrances or restrictions existing under or by reason of (A) this
Credit Agreement and the other Credit Documents, (B) applicable law, (C)
the indenture pursuant to which the Subordinated Notes are issued (as in
existence on the Closing Date) or (D) any document or instrument governing
Indebtedness incurred pursuant to Section 8.1(c) or 8.1(g), PROVIDED,
HOWEVER, that any such restriction contained therein relates only to the
asset or assets constructed or acquired in connection therewith; and
provided, further, that no such lien shall encumber any of the
Consolidated Parties' fee simple owned real property or leasehold assets,
or
(b) enter into, assume or become subject to any agreement
prohibiting or otherwise restricting the creation or assumption of any
Lien upon its properties or assets, whether now owned or hereafter
acquired, or requiring the grant of any security for such obligation if
security is given for some other obligation, except (i) pursuant to this
Credit Agreement and the other Credit Documents, (ii) the indenture
pursuant to which the Subordinated Notes are issued (as in existence on
the Closing Date) and (iii) pursuant to any document or instrument
governing Indebtedness incurred pursuant to Section 8.1(c) or 8.1(g),
PROVIDED, HOWEVER, that any such restriction contained therein relates
only to the asset or assets constructed or acquired in connection
therewith.
8.12 OWNERSHIP OF SUBSIDIARIES.
Notwithstanding any other provisions of this Credit Agreement to the
contrary, the Credit Parties will not permit any Consolidated Party to (a)
permit any Person (other than the Borrower or any Wholly-Owned Subsidiary of the
Borrower) to own any Capital Stock of any Subsidiary of the Borrower, (b) permit
any Subsidiary of the Borrower to issue Capital Stock (except to the Borrower or
to a Wholly-Owned Subsidiary of the Borrower), (c) permit, create, incur, assume
or suffer to exist any
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Lien thereon, in each case except (i) except to qualify directors where required
by applicable law or to satisfy other requirements of applicable law with
respect to the ownership of Capital Stock of Foreign Subsidiaries, (ii) except
as a result of or in connection with a dissolution, merger or disposition of a
Subsidiary permitted under Section 8.4 or Section 8.5 or (iii) except for
Permitted Liens and (d) notwithstanding anything to the contrary contained in
clause (b) above, permit any Subsidiary of the Borrower to issue any shares of
preferred Capital Stock.
8.13 SALE LEASEBACKS.
Except in connection with a transaction permitted by Section 8.1(c), the
Credit Parties will not permit any Consolidated Party to, directly or
indirectly, become or remain liable as lessee or as guarantor or other surety
with respect to any lease, whether an Operating Lease or a Capital Lease, of any
Property (whether real, personal or mixed), whether now owned or hereafter
acquired, (a) which such Consolidated Party has sold or transferred or is to
sell or transfer to a Person which is not a Consolidated Party or (b) which such
Consolidated Party intends to use for substantially the same purpose as any
other Property which has been sold or is to be sold or transferred by such
Consolidated Party to another Person which is not a Consolidated Party in
connection with such lease.
SECTION 9
EVENTS OF DEFAULT
9.1 EVENTS OF DEFAULT.
An Event of Default shall exist upon the occurrence of any of the
following specified events (each an "EVENT OF DEFAULT"):
(a) PAYMENT. Any Credit Party shall
(i) default in the payment when due of any principal of any
of the Loans or of any reimbursement obligations arising from
drawings under Letters of Credit, or
(ii) default, and such default shall continue for three (3) or
more Business Days, in the payment when due of any interest on the
Loans or on any reimbursement obligations arising from drawings
under Letters of Credit, or of any Fees or other amounts owing
hereunder, under any of the other Credit Documents or in connection
herewith or therewith; or
(b) REPRESENTATIONS. Any representation, warranty or statement
made or deemed to be made by any Credit Party herein, in any of the other
Credit Documents, or in any statement or certificate delivered or required
to be delivered pursuant hereto or thereto shall prove untrue in any
material respect on the date as of which it was deemed to have been made;
or
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(c) COVENANTS. Any Credit Party shall
(i) default in the due performance or observance of any
term, covenant or agreement contained in Sections 7.2, 7.9, 7.11,
7.12, 7.13 or 8.1 through 8.13, inclusive;
(ii) default in the due performance or observance of any
term, covenant or agreement contained in Sections 7.1(a), (b), (c)
or (d) and such default shall continue unremedied for a period of at
least 10 days after the earlier of a responsible officer of a Credit
Party becoming aware of such default or notice thereof by the Agent;
or
(iii) default in the due performance or observance by it of
any term, covenant or agreement (other than those referred to in
subsections (a), (b), (c)(i) or (c)(ii) of this Section 9.1)
contained in this Credit Agreement and such default shall continue
unremedied for a period of at least 30 days after the earlier of a
responsible officer of a Credit Party becoming aware of such default
or notice thereof by the Agent; or
(d) OTHER CREDIT DOCUMENTS. (i) Any Credit Party shall default in
the due performance or observance of any term, covenant or agreement in
any of the other Credit Documents (subject to applicable grace or cure
periods, if any), or (ii) except as a result of or in connection with a
dissolution, merger or disposition of a Subsidiary permitted under Section
8.4 or Section 8.5, any Credit Document shall fail to be in full force and
effect or to give the Agent and/or the Lenders the Liens, rights, powers
and privileges purported to be created thereby, or any Credit Party shall
so state in writing; or
(e) GUARANTIES. Except as the result of or in connection with a
dissolution, merger or disposition of a Subsidiary permitted under Section
8.4 or Section 8.5, the guaranty given by any Guarantor hereunder
(including any Additional Credit Party) or any provision thereof shall
cease to be in full force and effect, or any Guarantor (including any
Additional Credit Party) hereunder or any Person acting by or on behalf of
such Guarantor shall deny or disaffirm such Guarantor's obligations under
such guaranty, or any Guarantor shall default in the due performance or
observance of any term, covenant or agreement on its part to be performed
or observed pursuant to any guaranty; or
(f) BANKRUPTCY, ETC. Any Bankruptcy Event shall occur with
respect to any Consolidated Party; or
(g) DEFAULTS UNDER OTHER AGREEMENTS.
(i) Any Consolidated Party shall default in the performance
or observance (beyond the applicable grace period with respect
thereto, if any) or any material obligation or condition of any
contract or lease material to the Consolidated Parties; or
(ii) With respect to any Indebtedness (other than
Indebtedness outstanding under this Credit Agreement) in excess of
$250,000 in the aggregate for the Consolidated Parties taken as a
whole, (A) any Consolidated Party shall (1) default in any payment
(beyond the applicable grace period with respect thereto, if any)
with
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respect to any such Indebtedness, or (2) the occurrence and
continuance of a default in the observance or performance relating
to such Indebtedness or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event or
condition shall occur or condition exist, the effect of which
default or other event or condition is to cause, or permit, the
holder or holders of such Indebtedness (or trustee or agent on
behalf of such holders) to cause (determined without regard to
whether any notice or lapse of time is required), any such
Indebtedness to become due prior to its stated maturity; or (B) any
such Indebtedness shall be declared due and payable, or required to
be prepaid other than by a regularly scheduled required prepayment,
prior to the stated maturity thereof; or
(h) JUDGMENTS. One or more judgments or decrees shall be entered
against one or more of the Consolidated Parties involving a liability of
$500,000 or more in the aggregate (to the extent not paid or fully covered
by insurance provided by a carrier who has acknowledged coverage and has
the ability to perform) and any such judgments or decrees shall not have
been vacated, discharged or stayed or bonded pending appeal within 30 days
from the entry thereof; or
(i) ERISA. Any of the following events or conditions, if such event
or condition could have a Material Adverse Effect: (i) any "accumulated
funding deficiency," as such term is defined in Section 302 of ERISA and
Section 412 of the Code, whether or not waived, shall exist with respect
to any Plan, or any lien shall arise on the assets of any Consolidated
Party or any ERISA Affiliate in favor of the PBGC or a Plan; (ii) an ERISA
Event shall occur with respect to a Single Employer Plan, which is, in the
reasonable opinion of the Agent, likely to result in the termination of
such Plan for purposes of Title IV of ERISA; (iii) an ERISA Event shall
occur with respect to a Multiemployer Plan or Multiple Employer Plan,
which is, in the reasonable opinion of the Agent, likely to result in (A)
the termination of such Plan for purposes of Title IV of ERISA, or (B) any
Consolidated Party or any ERISA Affiliate incurring any liability in
connection with a withdrawal from, reorganization of (within the meaning
of Section 4241 of ERISA), or insolvency or (within the meaning of Section
4245 of ERISA) such Plan; or (iv) any prohibited transaction (within the
meaning of Section 406 of ERISA or Section 4975 of the Code) or breach of
fiduciary responsibility shall occur which may subject any Consolidated
Party or any ERISA Affiliate to any liability under Sections 406, 409,
502(i), or 502(l) of ERISA or Section 4975 of the Code, or under any
agreement or other instrument pursuant to which any Consolidated Party or
any ERISA Affiliate has agreed or is required to indemnify any person
against any such liability; or
(j) OWNERSHIP. There shall occur a Change of Control.
9.2 ACCELERATION; REMEDIES.
Upon the occurrence of an Event of Default, and at any time thereafter
unless and until such Event of Default has been waived by the requisite Lenders
(pursuant to the voting requirements of Section 11.6) or cured to the
satisfaction of the requisite Lenders (pursuant to the voting procedures in
Section 11.6), the Agent shall, upon the request and direction of the Required
Lenders, by written notice to the Credit Parties take any of the following
actions:
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(a) TERMINATION OF COMMITMENTS. Declare the Commitments
terminated whereupon the Commitments shall be immediately terminated.
(b) ACCELERATION. Declare the unpaid principal of and any accrued
interest in respect of all Loans, any reimbursement obligations arising
from drawings under Letters of Credit and any and all other indebtedness
or obligations of any and every kind owing by the Borrower to the Agent
and/or any of the Lenders hereunder to be due whereupon the same shall be
immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrower.
(c) CASH COLLATERAL. Direct the Borrower to pay (and the Borrower
agrees that upon receipt of such notice, or upon the occurrence of an
Event of Default under Section 9.1(f), it will immediately pay) to the
Agent additional cash, to be held by the Agent, for the benefit of the
Lenders, in a cash collateral account as additional security for the LOC
Obligations in respect of subsequent drawings under all then outstanding
Letters of Credit in an amount equal to the maximum aggregate amount which
may be drawn under all Letters of Credits then outstanding.
(d) ENFORCEMENT OF RIGHTS. Enforce any and all rights and interests
created and existing under the Credit Documents including, without
limitation, all rights and remedies existing under the Collateral
Documents, all rights and remedies against a Guarantor and all rights of
set-off.
Notwithstanding the foregoing, if an Event of Default specified in Section
9.1(f) shall occur, then the Commitments shall automatically terminate and all
Loans, all reimbursement obligations arising from drawings under Letters of
Credit, all accrued interest in respect thereof, all accrued and unpaid Fees and
other indebtedness or obligations owing to the Agent and/or any of the Lenders
hereunder automatically shall immediately become due and payable without the
giving of any notice or other action by the Agent or the Lenders.
SECTION 10
AGENCY PROVISIONS
10.1 APPOINTMENT, POWERS AND IMMUNITIES.
Each Lender hereby irrevocably appoints and authorizes the Agent to act as
its agent under this Credit Agreement and the other Credit Documents with such
powers and discretion as are specifically delegated to the Agent by the terms of
this Credit Agreement and the other Credit 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 Credit Agreement and
shall not be a trustee or fiduciary for any Lender; (b) shall not be responsible
to the Lenders for any recital, statement,
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representation, or warranty (whether written or oral) made in or in connection
with any Credit Document or any certificate or other document referred to or
provided for in, or received by any of them under, any Credit Document, or for
the value, validity, effectiveness, genuineness, enforceability, or sufficiency
of any Credit Document, or any other document referred to or provided for
therein or for any failure by any Credit Party 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 Credit 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 Credit Document;
and (e) shall not be responsible for any action taken or omitted to be taken by
it under or in connection with any Credit 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.
10.2 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 telecopy) believed by it in good faith 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 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 11.3(b) hereof. As
to any matters not expressly provided for by this Credit 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 Credit 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.
10.3 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.
10.4 RIGHTS AS A LENDER.
With respect to its Commitment and the Loans made by it, First Union
National Bank (and any successor acting as Agent) in its capacity as a Lender
hereunder shall have the same rights and powers
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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. First
Union National Bank (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 First Union
National Bank (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 Credit Agreement or otherwise
without having to account for the same to the Lenders.
10.5 INDEMNIFICATION.
The Lenders agree to indemnify the Agent (to the extent not reimbursed
under Section 11.5 hereof, but without limiting the obligations of the Borrower
under such Section) ratably in accordance with their respective 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 Credit Document or the transactions contemplated thereby or
any action taken or omitted by the Agent under any Credit Document; PROVIDED
that no Lender 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 in this
Section 10.5 shall survive the repayment of the Loans, LOC Obligations and other
obligations under the Credit Documents and the termination of the Commitments
hereunder.
10.6 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 Credit 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 Credit 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 Credit Party or any of its Subsidiaries or
Affiliates that may come into the possession of the Agent or any of its
Affiliates.
10.7 SUCCESSOR 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
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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 $100,000,000. 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 Section 10 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.
SECTION 11
MISCELLANEOUS
11.1 NOTICES.
Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (a) when
delivered, (b) when transmitted via telecopy (or other facsimile device) to the
number set out below, (c) the Business Day following the day on which the same
has been delivered prepaid to a reputable national overnight air courier
service, or (d) the third Business Day following the day on which the same is
sent by certified or registered mail, postage prepaid, in each case to the
respective parties at the address, in the case of the Borrower, Guarantors and
the Agent, set forth below, and, in the case of the Lenders, set forth on
SCHEDULE 2.1(a), or at such other address as such party may specify by written
notice to the other parties hereto:
if to the Borrower or the Guarantors:
Xxxxxxx Industries, Inc.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
if to the Agent:
First Union National Bank
000 Xxxxx Xxxxxxx Xxxxxx, XX-0
0xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attn: Xxx Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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with a copy to:
First Union National Bank
One First Union Center
NC-0680
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
11.2 RIGHT OF SET-OFF; ADJUSTMENTS.
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 or the account of any Credit Party
against any and all of the obligations of such Person now or hereafter existing
under this Credit Agreement, under the Notes, under any other Credit Document or
otherwise, irrespective of whether such Lender shall have made any demand under
hereunder or thereunder and although such obligations may be unmatured. Each
Lender agrees promptly to notify any affected Credit Party 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 11.2 are in addition
to other rights and remedies (including, without limitation, other rights of
set-off) that such Lender may have.
11.3 BENEFIT OF AGREEMENT.
(a) This Credit Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and assigns of
the parties hereto; PROVIDED that none of the Credit Parties may assign or
transfer any of its interests and obligations without prior written
consent of the Lenders; PROVIDED FURTHER that the rights of each Lender to
transfer, assign or grant participations in its rights and/or obligations
hereunder shall be limited as set forth in this Section 11.3.
(b) Upon the consent of the Agent, which consent shall not be
unreasonably withheld, each Lender may assign to one or more Eligible
Assignees all or a portion of its rights and obligations under this Credit
Agreement (including, without limitation, all or a portion of its Loans,
its Notes, and its 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
Credit Agreement, any such partial assignment shall be in an amount
at least equal to $5,000,000 (or, if less, the remaining
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amount of the Commitment being assigned by such Lender) or an
integral multiple of $1,000,000 in excess thereof;
(iii) each such assignment by a Lender shall be of a constant,
and not varying, percentage of its rights and obligations under this
Credit Agreement and the Notes; 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 11.3(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 Credit Agreement. Upon the consummation of any assignment
pursuant to this Section 11.3(b), 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 3.11.
(c) The Agent shall maintain at its address referred to in Section
11.1 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 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 Credit 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.
(d) 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
11.3(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.
(e) Each Lender may sell participations to one or more Persons in
all or a portion of its rights and obligations under this Credit Agreement
(including all or a portion of its Commitment and its Loans); PROVIDED,
HOWEVER, that (i) such Lender's obligations under this Credit 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 of the yield protection
provisions contained in Sections 3.7 through 3.12, inclusive, and the
right of set-off contained in Section 11.2, and (iv) the Borrower shall
continue to deal solely and directly with such Lender in connection with
such Lender's rights
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and obligations under this Credit Agreement, and such Lender shall retain
the sole right to enforce the obligations of the Borrower relating to its
Loans and its Notes and to approve any amendment, modification, or waiver
of any provision of this Credit Agreement (other than amendments,
modifications, or waivers decreasing the amount of principal of or the
rate at which interest is payable on such Loans or Notes, extending any
scheduled principal payment date or date fixed for the payment of interest
on such Loans or Notes, or extending its Commitment).
(f) Notwithstanding any other provision set forth in this Credit
Agreement, any Lender may at any time assign and pledge all or any portion
of its Loans and its Notes 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.
(g) 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.
11.4 NO WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of the Agent or any Lender in exercising
any right, power or privilege hereunder or under any other Credit Document and
no course of dealing between the Agent or any Lender and any of the Credit
Parties shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or under any other Credit
Document preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder or thereunder. The rights and remedies
provided herein are cumulative and not exclusive of any rights or remedies which
the Agent or any Lender would otherwise have. No notice to or demand on any
Credit Party in any case shall entitle the Borrower or any other Credit Party to
any other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Agent or the Lenders to any other or
further action in any circumstances without notice or demand.
11.5 EXPENSES; INDEMNIFICATION.
(a) The Borrower agrees to pay on demand all costs and expenses of the
Agent in connection with the preparation, execution, delivery, administration,
modification, and amendment of this Credit Agreement, the other Credit
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 Credit Documents. The
Borrower further agrees to pay on demand all costs and expenses of the Agent 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 Credit Documents and the other documents to be delivered hereunder.
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(b) 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 Credit Documents, any of the
transactions contemplated herein or the actual or proposed use of the proceeds
of the Loans, 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 11.5 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 Credit Documents, any of the transactions contemplated
herein or the actual or proposed use of the proceeds of the Loans.
(c) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 11.5 shall survive the repayment of the Loans, LOC Obligations and
other obligations under the Credit Documents and the termination of the
Commitments hereunder.
11.6 AMENDMENTS, WAIVERS AND CONSENTS.
Neither this Credit Agreement nor any other Credit Document nor any of the
terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is in
writing entered into by, or approved in writing by, the Required Lenders and the
Borrower, PROVIDED, HOWEVER, that:
(a) without the consent of each Lender affected thereby,
(i) extend the final maturity of any Loan or the time of
payment of any reimbursement obligation, or any portion thereof,
arising from drawings under Letters of Credit,
(ii) reduce the rate or extend the time of payment of interest
(other than as a result of waiving the applicability of any
post-default increase in interest rates) thereon or Fees hereunder,
(iii) reduce or waive the principal amount of any Loan or of
any reimbursement obligation, or any portion thereof, arising from
drawings under Letters of Credit,
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(iv) increase the Commitment of a Lender over the amount thereof
in effect (it being understood and agreed that a waiver of any
Default or Event of Default or mandatory reduction in the
Commitments shall not constitute a change in the terms of any
Commitment of any Lender),
(v) except as the result of or in connection with an Asset
Disposition permitted by Section 8.5, release all or substantially
all of the Collateral,
(vi) except as the result of or in connection with a
dissolution, merger or disposition of a Subsidiary permitted under
Section 8.4, release the Borrower or substantially all of the other
Credit Parties from its or their obligations under the Credit
Documents,
(vii) amend, modify or waive any provision of this Section 11.6
or Section 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14, 9.1(a),
11.2, 11.3, 11.5 or 11.9,
(viii) reduce any percentage specified in, or otherwise modify,
the definition of Required Lenders, or
(ix) consent to the assignment or transfer by the Borrower or
all or substantially all of the other Credit Parties of any of its
or their rights and obligations under (or in respect of) the Credit
Documents except as permitted thereby;
(b) without the consent of the Agent, no provision of Section 10
may be amended;
(c) without the consent of the Issuing Lender, no provision of
Section 2.2 may be amended.
Notwithstanding the fact that the consent of all the Lenders is required
in certain circumstances as set forth above, (x) each Lender is entitled
to vote as such Lender sees fit on any bankruptcy reorganization plan that
affects the Loans, and each Lender acknowledges that the provisions of
Section 1126(c) of the Bankruptcy Code supersedes the unanimous consent
provisions set forth herein and (y) the Required Lenders may consent to
allow a Credit Party to use cash collateral in the context of a bankruptcy
or insolvency proceeding.
11.7 COUNTERPARTS.
This Credit Agreement may be executed in any number of counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall constitute one and the same instrument. It shall not be necessary in
making proof of this Credit Agreement to produce or account for more than one
such counterpart for each of the parties hereto. Delivery by facsimile by any of
the parties hereto of an executed counterpart of this Credit Agreement shall be
as effective as an original executed counterpart hereof and shall be deemed a
representation that an original executed counterpart hereof will be delivered.
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11.8 HEADINGS.
The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Credit Agreement.
11.9 SURVIVAL.
All indemnities set forth herein, including, without limitation, in
Section 2.2(i), 3.11, 3.12, 10.5 or 11.5 shall survive the execution and
delivery of this Credit Agreement, the making of the Loans, the issuance of the
Letters of Credit, the repayment of the Loans, LOC Obligations and other
obligations under the Credit Documents and the termination of the Commitments
hereunder, and all representations and warranties made by the Credit Parties
herein shall survive delivery of the Notes and the making of the Loans
hereunder.
11.10 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE.
(a) THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NORTH CAROLINA. Any legal action or proceeding with respect
to this Credit Agreement or any other Credit Document may be brought in
the courts of the State of North Carolina in Mecklenburg County, or of the
United States for the Western District of North Carolina, and, by
execution and delivery of this Credit Agreement, each of the Credit
Parties hereby irrevocably accepts for itself and in respect of its
property, generally and unconditionally, the nonexclusive jurisdiction of
such courts. Each of the Credit Parties further irrevocably consents to
the service of process out of any of the aforementioned courts in any such
action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to it at the address set out for notices
pursuant to Section 11.1, such service to become effective three (3) days
after such mailing. Nothing herein shall affect the right of the Agent or
any Lender to serve process in any other manner permitted by law or to
commence legal proceedings or to otherwise proceed against any Credit
Party in any other jurisdiction.
(b) Each of the Credit Parties hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of any
of the aforesaid actions or proceedings arising out of or in connection
with this Credit Agreement or any other Credit Document brought in the
courts referred to in subsection (a) above and hereby further irrevocably
waives and agrees not to plead or claim in any such court that any such
action or proceeding brought in any such court has been brought in an
inconvenient forum.
(c) TO THE EXTENT PERMITTED BY LAW, EACH OF THE AGENT, THE LENDERS,
THE BORROWER AND THE CREDIT PARTIES HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR
THE TRANSACTIONS CONTEMPLATED HEREBY.
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11.11 SEVERABILITY.
If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
11.12 ENTIRETY.
This Credit Agreement together with the other Credit Documents represent
the entire agreement of the parties hereto and thereto, and supersede all prior
agreements and understandings, oral or written, if any, including any commitment
letters or correspondence relating to the Credit Documents or the transactions
contemplated herein and therein.
11.13 BINDING EFFECT; TERMINATION.
(a) This Credit Agreement shall become effective at such time on or
after the Closing Date when it shall have been executed by the Borrower,
the Guarantors and the Agent, and the Agent shall have received copies
hereof (telefaxed or otherwise) which, when taken together, bear the
signatures of each Lender, and thereafter this Credit Agreement shall be
binding upon and inure to the benefit of the Borrower, the Guarantors, the
Agent and each Lender and their respective successors and assigns.
(b) The term of this Credit Agreement shall be until no Loans, LOC
Obligations or any other amounts payable hereunder or under any of the
other Credit Documents shall remain outstanding, no Letters of Credit
shall be outstanding, all of the Credit Party Obligations have been
irrevocably satisfied in full and all of the Commitments hereunder shall
have expired or been terminated.
11.14 SOURCE OF FUNDS.
Each of the Lenders hereby represents and warrants to the Borrower that at
least one of the following statements is an accurate representation as to the
source of funds to be used by such Lender in connection with the financing
hereunder:
(a) no part of such funds constitutes assets allocated to any
separate account maintained by such Lender in which any employee benefit
plan (or its related trust) has any interest;
(b) to the extent that any part of such funds constitutes assets
allocated to any separate account maintained by such Lender, such Lender
has disclosed to the Borrower the name of each employee benefit plan whose
assets in such account exceed 10% of the total assets of such account as
of the date of such purchase (and, for purposes of this subsection (b),
all employee benefit plans maintained by the same employer or employee
organization are deemed to be a single plan);
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(c) to the extent that any part of such funds constitutes assets of
an insurance company's general account, such insurance company has
complied with all of the requirements of the regulations issued under
Section 401(c)(1)(A) of ERISA; or
(d) such funds constitute assets of one or more specific benefit
plans which such Lender has identified in writing to the Borrower.
As used in this Section 11.14, the terms "employee benefit plan" and "separate
account" shall have the respective meanings assigned to such terms in Section 3
of ERISA.
11.15 CONFLICT.
To the extent that there is a conflict or inconsistency between any
provision hereof, on the one hand, and any provision of any Credit Document, on
the other hand, this Credit Agreement shall control.
[Signature Page to Follow]
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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this Credit Agreement to be duly executed and delivered as of the date first
above written.
BORROWER: XXXXXXX INDUSTRIES INC.
--------- a Delaware corporation
By: _________________________________________
Name: _______________________________________
Title: ______________________________________
GUARANTORS: XXXXXXXXX MANUFACTURING COMPANY
-----------
By: _________________________________________
Name: _______________________________________
Title: ______________________________________
XXXXXXX HOLDING COMPANY, INC.
By: _________________________________________
Name: _______________________________________
Title: ______________________________________
XXXXXXX INDUSTRIES FSC, INC.
By: _________________________________________
Name: _______________________________________
Title: ______________________________________
NOTTING AMERICA, INC.
By: _________________________________________
Name: _______________________________________
Title: ______________________________________
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LENDERS: FIRST UNION NATIONAL BANK,
-------- individually in its capacity as a Lender
and in its capacity as Agent
By: _________________________________________
Name: _______________________________________
Title: ______________________________________
XXXXXX FINANCIAL, INC.
By: _________________________________________
Name: _______________________________________
Title: ______________________________________
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EXHIBIT 1.1A
FORM OF PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "PLEDGE AGREEMENT") is entered into as of July
2, 1998 among XXXXXXX INDUSTRIES INC., a [DELAWARE] corporation (the
"BORROWER"), the Guarantors indicated on the signature pages hereto
(individually a "GUARANTOR" and collectively the "GUARANTORS", together with the
Borrower, individually a "PLEDGOR" and collectively the "PLEDGORS") and FIRST
UNION NATIONAL BANK, in its capacity as agent (in such capacity, the "AGENT")
for the lenders from time to time party to the Credit Agreement described below
(the "LENDERS").
RECITALS
WHEREAS, pursuant to that certain Credit Agreement dated as of the date
hereof (as amended, modified, extended, renewed or replaced from time to time,
the "CREDIT AGREEMENT") among the Borrower, the Guarantors, the Lenders and the
Agent, the Lenders have agreed to make Loans and issue Letters of Credit upon
the terms and subject to the conditions set forth therein; and
WHEREAS, it is a condition precedent to the effectiveness of the Credit
Agreement and the obligations of the Lenders to make their respective Loans and
to issue Letters of Credit under the Credit Agreement that the Pledgors shall
have executed and delivered this Pledge Agreement to the Agent for the ratable
benefit of the Lenders.
NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. DEFINITIONS. Unless otherwise defined herein, capitalized terms used
herein shall have the meanings ascribed to such terms in the Credit Agreement.
For purposes of this Pledge Agreement, the term "Lender" shall include any
Affiliate of any Lender which has entered into a Hedging Agreement with the
Borrower.
2. PLEDGE AND GRANT OF SECURITY INTEREST. To secure the prompt payment
and performance in full when due, whether by lapse of time or otherwise, of the
Pledgor Obligations (as defined in Section 3 hereof), each Pledgor hereby
pledges and assigns to the Agent, for the benefit of the Lenders, and grants to
the Agent, for the benefit of the Lenders, a continuing security interest in any
and all right, title and interest of such Pledgor in and to the following,
whether now owned or existing or owned, acquired, or arising hereafter
(collectively, the "PLEDGED COLLATERAL"):
(a) PLEDGED SHARES. (i) 100% (or, if less, the full amount owned by
such Pledgor) of the issued and outstanding shares of capital stock owned
by such Pledgor of each Domestic Subsidiary set forth on SCHEDULE 2(A)
attached hereto and (ii) 65% (or, if less, the full amount owned by such
Pledgor) of the issued and outstanding shares of each class of capital
stock or other ownership interests entitled to vote (within the meaning of
Treas. Reg. Section 1.956-
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2(c)(2)) ("VOTING EQUITY") and 100% (or, if less, the full amount owned by
such Pledgor) of the issued and outstanding shares of each class of
capital stock or other ownership interests not entitled to vote (within
the meaning of Treas. Reg. Section 1.956-2(c)(2)) ("NON-VOTING EQUITY")
owned by such Pledgor of each Foreign Subsidiary set forth on SCHEDULE
2(a) attached hereto, in each case together with the certificates (or
other agreements or instruments), if any, representing such shares, and
all options and other rights, contractual or otherwise, with respect
thereto (collectively, together with the shares of capital stock described
in Section 2(b) and 2(c) below, the "PLEDGED SHARES"), including, but not
limited to, the following:
(y) all shares or securities representing a dividend on any of
the Pledged Shares, or representing a distribution or return of
capital upon or in respect of the Pledged Shares, or resulting from
a stock split, revision, reclassification or other exchange
therefor, and any subscriptions, warrants, rights or options issued
to the holder of, or otherwise in respect of, the Pledged Shares;
and
(z) without affecting the obligations of the Pledgors under
any provision prohibiting such action hereunder or under the Credit
Agreement, in the event of any consolidation or merger involving the
issuer of any Pledged Shares and in which such issuer is not the
surviving corporation, all shares of each class of the capital stock
of the successor corporation formed by or resulting from such
consolidation or merger.
(b) ADDITIONAL SHARES. With respect to the Borrower and the
Guarantors, 100% (or, if less, the full amount owned by such Pledgor) of
the issued and outstanding shares of capital stock owned by such Pledgor
of any Person which hereafter becomes a Domestic Subsidiary and 65% (or,
if less, the full amount owned by such Pledgor) of the Voting Equity and
100% (or, if less, the full amount owned by such Pledgor) of the
Non-Voting Equity owned by such Pledgor of any Person which hereafter
becomes a Foreign Subsidiary, including, without limitation, the
certificates representing such shares.
(c) OTHER EQUITY INTERESTS. Any and all other Capital Stock of
the Borrower and the Guarantors in any Domestic Subsidiary or any Foreign
Subsidiary.
(d) PROCEEDS. All proceeds and products of the foregoing, however
and whenever acquired and in whatever form.
Without limiting the generality of the foregoing, it is hereby
specifically understood and agreed that a Pledgor may from time to time
hereafter deliver additional shares of stock to the Agent as collateral security
for the Pledgor Obligations. Upon delivery to the Agent, such additional shares
of stock shall be deemed to be part of the Pledged Collateral of such Pledgor
and shall be subject to the terms of this Pledge Agreement whether or not
SCHEDULE 2(a) is amended to refer to such additional shares.
3. SECURITY FOR PLEDGOR OBLIGATIONS. The security interest created
hereby in the Pledged Collateral of each Pledgor constitutes continuing
collateral security for all of the following, whether now existing or hereafter
incurred (the "PLEDGOR OBLIGATIONS"):
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(a) In the case of the Borrower, the prompt performance and
observance by the Borrower of all obligations of the Borrower under the
Credit Agreement, the Notes, this Pledge Agreement and the other Credit
Documents to which the Borrower is a party;
(b) In the case of the Guarantors, the prompt performance and
observance by the Guarantors of all obligations of the Guarantors under
the Credit Agreement, this Pledge Agreement and the other Credit Documents
to which any Guarantor is a party, including, without limitation, its
guaranty obligations arising under Section 4 of the Credit Agreement; and
(c) All other indebtedness, liabilities and obligations of any kind
or nature, now existing or hereafter arising, owing from any Pledgor to
any Lender or the Agent, howsoever evidenced, created, incurred or
acquired, whether primary, secondary, direct, contingent, or joint and
several, including, without limitation, all liabilities arising under
Hedging Agreements and all obligations and liabilities incurred in
connection with collecting and enforcing the Pledgor Obligations.
4. DELIVERY OF THE PLEDGED COLLATERAL. Each Pledgor hereby agrees that:
(a) Each Pledgor shall deliver to the Agent (i) simultaneously with
or prior to the execution and delivery of this Pledge Agreement, all
certificates representing the Pledged Shares of such Pledgor and (ii)
promptly upon the receipt thereof by or on behalf of a Pledgor, all other
certificates and instruments constituting Pledged Collateral of a Pledgor.
Prior to delivery to the Agent, all such certificates and instruments
constituting Pledged Collateral of a Pledgor shall be held in trust by
such Pledgor for the benefit of the Agent pursuant hereto. All such
certificates shall be delivered in suitable form for transfer by delivery
or shall be accompanied by duly executed instruments of transfer or
assignment in blank, substantially in the form provided in EXHIBIT 4(a)
attached hereto.
(b) ADDITIONAL SECURITIES. If such Pledgor shall receive by virtue
of its being or having been the owner of any Pledged Collateral, any (i)
stock certificate, including without limitation, any certificate
representing a stock dividend or distribution in connection with any
increase or reduction of capital, reclassification, merger, consolidation,
sale of assets, combination of shares, stock splits, spin-off or
split-off, promissory notes or other instrument; (ii) option or right,
whether as an addition to, substitution for, or an exchange for, any
Pledged Collateral or otherwise; (iii) dividends payable in securities; or
(iv) distributions of securities in connection with a partial or total
liquidation, dissolution or reduction of capital, capital surplus or
paid-in surplus, then such Pledgor shall receive such stock certificate,
instrument, option, right or distribution in trust for the benefit of the
Agent, shall segregate it from such Pledgor's other property and shall
deliver it forthwith to the Agent in the exact form received together with
any necessary endorsement and/or appropriate stock power duly executed in
blank, substantially in the form provided in EXHIBIT 4(a), to be held by
the Agent as Pledged Collateral and as further collateral security for the
Pledgor Obligations.
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(c) FINANCING STATEMENTS. Each Pledgor shall execute and deliver to
the Agent such UCC or other applicable financing statements as may be
reasonably requested by the Agent in order to perfect and protect the
security interest created hereby in the Pledged Collateral of such
Pledgor.
5. REPRESENTATIONS AND WARRANTIES. Each Pledgor hereby represents and
warrants to the Agent, for the benefit of the Lenders, that so long as any of
the Pledgor Obligations remain outstanding or any Credit Document or Hedging
Agreement is in effect or any Letter of Credit shall remain outstanding, and
until all of the Commitments shall have been terminated:
(a) AUTHORIZATION OF PLEDGED SHARES. The Pledged Shares are duly
authorized and validly issued, are fully paid and nonassessable and are
not subject to the preemptive rights of any Person. All other shares of
stock constituting Pledged Collateral will be duly authorized and validly
issued, fully paid and nonassessable and not subject to the preemptive
rights of any Person.
(b) TITLE. Each Pledgor has good and indefeasible title to the
Pledged Collateral of such Pledgor and will at all times be the legal and
beneficial owner of such Pledged Collateral free and clear of any Lien,
other than Permitted Liens. There exists no "adverse claim" within the
meaning of Section 8-302 of the Uniform Commercial Code as in effect in
the State of North Carolina (the "UCC") with respect to the Pledged Shares
of such Pledgor.
(c) EXERCISING OF RIGHTS. The exercise by the Agent of its rights
and remedies hereunder will not violate any law or governmental regulation
or any material contractual restriction binding on or affecting a Pledgor
or any of its property.
(d) PLEDGOR'S AUTHORITY. No authorization, approval or action by,
and no notice or filing with any Governmental Authority or with the issuer
of any Pledged Stock is required either (i) for the pledge made by a
Pledgor or for the granting of the security interest by a Pledgor pursuant
to this Pledge Agreement or (ii) for the exercise by the Agent or the
Lenders of their rights and remedies hereunder (except as may be required
by laws affecting the offering and sale of securities).
(e) SECURITY INTEREST/PRIORITY. This Pledge Agreement creates a
valid security interest in favor of the Agent for the benefit of the
Lenders, in the Pledged Collateral. The taking possession by the Agent of
the certificates representing the Pledged Shares and all other
certificates and instruments constituting Pledged Collateral will perfect
and establish the first priority of the Agent's security interest in the
Pledged Shares and, when properly perfected by filing or registration, in
all other Pledged Collateral represented by such Pledged Shares and
instruments securing the Pledgor Obligations. Except as set forth in this
Section 5(e), no action is necessary to perfect or otherwise protect such
security interest.
(f) NO OTHER SHARES. Except as set forth on SCHEDULE 2(a) attached
hereto, no Pledgor owns any shares of stock of the Borrower or any of its
Subsidiaries.
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6. COVENANTS. Each Pledgor hereby covenants, that so long as any of the
Pledgor Obligations remain outstanding or any Credit Document or Hedging
Agreement is in effect or any Letter of Credit shall remain outstanding, and
until all of the Commitments shall have been terminated, such Pledgor shall:
(a) BOOKS AND RECORDS. Xxxx its books and records (and shall cause
the issuer of the Pledged Shares of such Pledgor to xxxx its books and
records) to reflect the security interest granted to the Agent, for the
benefit of the Lenders, pursuant to this Pledge Agreement.
(b) DEFENSE OF TITLE. Warrant and defend title to and ownership of
the Pledged Collateral of such Pledgor at its own expense against the
claims and demands of all other parties claiming an interest therein, keep
the Pledged Collateral free from all Liens, except for Permitted Liens,
and not sell, exchange, transfer, assign, lease or otherwise dispose of
Pledged Collateral of such Pledgor or any interest therein, except as
permitted under the Credit Agreement and the other Credit Documents.
(c) FURTHER ASSURANCES. Promptly execute and deliver at its expense
all further instruments and documents and take all further action that may
be necessary and desirable or that the Agent may reasonably request in
order to (i) perfect and protect the security interest created hereby in
the Pledged Collateral of such Pledgor (including without limitation any
and all action necessary to satisfy the Agent that the Agent has obtained
a first priority perfected security interest in any capital stock); (ii)
enable the Agent to exercise and enforce its rights and remedies hereunder
in respect of the Pledged Collateral of such Pledgor; and (iii) otherwise
effect the purposes of this Pledge Agreement, including, without
limitation and if requested by the Agent, delivering to the Agent
irrevocable proxies in respect of the Pledged Collateral of such Pledgor.
(d) AMENDMENTS. Not make or consent to any amendment or other
modification or waiver with respect to any of the Pledged Collateral of
such Pledgor or enter into any agreement or allow to exist any restriction
with respect to any of the Pledged Collateral of such Pledgor other than
pursuant hereto or as may be permitted under the Credit Agreement.
(e) COMPLIANCE WITH SECURITIES LAWS. File all reports and other
information now or hereafter required to be filed by such Pledgor with the
United States Securities and Exchange Commission and any other state,
federal or foreign agency in connection with the ownership of the Pledged
Collateral of such Pledgor.
7. ADVANCES BY LENDERS. On failure of any Pledgor to perform any of the
covenants and agreements contained herein, the Agent may, at its sole option and
in its sole discretion, perform the same and in so doing may expend such sums as
the Agent may reasonably deem advisable in the performance thereof, including,
without limitation, the payment of any insurance premiums, the payment of any
taxes, a payment to obtain a release of a Lien or potential Lien, expenditures
made in defending against any adverse claim and all other expenditures which the
Agent or the Lenders may make for the protection of the security hereof or which
may be compelled to make by operation of law. All such sums and amounts so
expended shall be repayable by the Pledgors on a joint and several basis
promptly upon timely notice
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thereof and demand therefor, shall constitute additional Pledgor Obligations and
shall bear interest from the date said amounts are expended at the default rate
specified in SECTION 3.1 of the Credit Agreement for Revolving Loans that are
Base Rate Loans. No such performance of any covenant or agreement by the Agent
or the Lenders on behalf of any Pledgor, and no such advance or expenditure
therefor, shall relieve the Pledgors of any default under the terms of this
Pledge Agreement, the other Credit Documents or any Hedging Agreement. The
Lenders may make any payment hereby authorized in accordance with any xxxx,
statement or estimate procured from the appropriate public office or holder of
the claim to be discharged without inquiry into the accuracy of such xxxx,
statement or estimate or into the validity of any tax assessment, sale,
forfeiture, tax lien, title or claim except to the extent such payment is being
contested in good faith by a Pledgor in appropriate proceedings and against
which adequate reserves are being maintained in accordance with GAAP.
8. EVENTS OF DEFAULT. The occurrence of an event which under the
Credit Agreement would constitute an Event of Default shall be an Event of
Default hereunder (an "EVENT OF DEFAULT").
9. REMEDIES.
(a) GENERAL REMEDIES. Upon the occurrence of an Event of Default and
during the continuation thereof, the Agent and the Lenders shall have, in
respect of the Pledged Collateral of any Pledgor, in addition to the
rights and remedies provided herein, in the Credit Documents, in the
Hedging Agreements or by law, the rights and remedies of a secured party
under the UCC or any other applicable law.
(b) SALE OF PLEDGED COLLATERAL. Upon the occurrence of an Event of
Default and during the continuation thereof, without limiting the
generality of this Section and without notice, the Agent may, in its sole
discretion, sell or otherwise dispose of or realize upon the Pledged
Collateral, or any part thereof, in one or more parcels, at public or
private sale, at any exchange or broker's board or elsewhere, at such
price or prices and on such other terms as the Agent may deem commercially
reasonable, for cash, credit or for future delivery or otherwise in
accordance with applicable law. To the extent permitted by law, any Lender
may in such event, bid for the purchase of such securities. Each Pledgor
agrees that, to the extent notice of sale shall be required by law and has
not been waived by such Pledgor, any requirement of reasonable notice
shall be met if notice, specifying the place of any public sale or the
time after which any private sale is to be made, is personally served on
or mailed, postage prepaid, to such Pledgor, in accordance with the notice
provisions of SECTION 11.1 of the Credit Agreement (at least 10 days
before the time of such sale. The Agent shall not be obligated to make any
sale of Pledged Collateral of such Pledgor regardless of notice of sale
having been given. The Agent may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the time and place to
which it was so adjourned.
(c) PRIVATE SALE. Upon the occurrence of an Event of Default and
during the continuation thereof, the Pledgors recognize that the Agent may
deem it impracticable to effect a public sale of all or any part of the
Pledged Shares or any of the securities constituting Pledged Collateral
and that the Agent may, therefore, determine to make one or more private
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sales of any such securities to a restricted group of purchasers who will
be obligated to agree, among other things, to acquire such securities for
their own account, for investment and not with a view to the distribution
or resale thereof. Each Pledgor acknowledges that any such private sale
may be at prices and on terms less favorable to the seller than the prices
and other terms which might have been obtained at a public sale and,
notwithstanding the foregoing, agrees that such private sale shall be
deemed to have been made in a commercially reasonable manner and that the
Agent shall have no obligation to delay sale of any such securities for
the period of time necessary to permit the issuer of such securities to
register such securities for public sale under the Securities Act of 1933.
Each Pledgor further acknowledges and agrees that any offer to sell such
securities which has been (i) publicly advertised on a bona fide basis in
a newspaper or other publication of general circulation in the financial
community of New York, New York (to the extent that such offer may be
advertised without prior registration under the Securities Act of 1933),
or (ii) made privately in the manner described above shall be deemed to
involve a "public sale" under the UCC, notwithstanding that such sale may
not constitute a "public offering" under the Securities Act of 1933, and
the Agent may, in such event, bid for the purchase of such securities.
(d) RETENTION OF PLEDGED COLLATERAL. In addition to the rights and
remedies hereunder, upon the occurrence of an Event of Default, the Agent
may, after providing the notices required by Section 9-505(2) of the UCC
or otherwise complying with the requirements of applicable law of the
relevant jurisdiction, retain all or any portion of the Pledged Collateral
in satisfaction of the Pledgor Obligations. Unless and until the Agent
shall have provided such notices, however, the Agent shall not be deemed
to have retained any Pledged Collateral in satisfaction of any Pledgor
Obligations for any reason.
(e) DEFICIENCY. In the event that the proceeds of any sale,
collection or realization are insufficient to pay all amounts to which the
Agent or the Lenders are legally entitled, the Pledgors shall be jointly
and severally liable for the deficiency, together with interest thereon at
the default rate specified in SECTION 3.1 of the Credit Agreement for
Revolving Loans that are Base Rate Loans, together with the costs of
collection and the reasonable fees of any attorneys employed by the Agent
to collect such deficiency. Any surplus remaining after the full payment
and satisfaction of the Pledgor Obligations shall be returned to the
Pledgors or to whomsoever a court of competent jurisdiction shall
determine to be entitled thereto.
10. RIGHTS OF THE AGENT.
(a) POWER OF ATTORNEY. In addition to other powers of attorney
contained herein, each Pledgor hereby designates and appoints the Agent,
on behalf of the Lenders, and each of its designees or agents as
attorney-in-fact of such Pledgor, irrevocably and with power of
substitution, with authority to take any or all of the following actions
upon the occurrence and during the continuance of an Event of Default:
(i) to demand, collect, settle, compromise, adjust and
give discharges and releases concerning the Pledged Collateral of
such Pledgor, all as the Agent may reasonably determine;
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(ii) to commence and prosecute any actions at any court
for the purposes of collecting any of the Pledged Collateral of
such Pledgor and enforcing any other right in respect thereof;
(iii) to defend, settle or compromise any action brought
and, in connection therewith, give such discharge or release as the
Agent may deem reasonably appropriate;
(iv) to pay or discharge taxes, liens, security
interests, or other encumbrances levied or placed on or threatened
against the Pledged Collateral of such Pledgor;
(v) to direct any parties liable for any payment under
any of the Pledged Collateral to make payment of any and all monies
due and to become due thereunder directly to the Agent or as the
Agent shall direct;
(vi) to receive payment of and receipt for any and all
monies, claims, and other amounts due and to become due at any time
in respect of or arising out of any Pledged Collateral of such
Pledgor;
(vii) to sign and endorse any drafts, assignments,
proxies, stock powers, verifications, notices and other documents
relating to the Pledged Collateral of such Pledgor;
(viii) to settle, compromise or adjust any suit, action or
proceeding described above and, in connection therewith, to give
such discharges or releases as the Agent may deem reasonably
appropriate;
(ix) execute and deliver all assignments, conveyances,
statements, financing statements, renewal financing statements,
pledge agreements, affidavits, notices and other agreements,
instruments and documents that the Agent may determine necessary in
order to perfect and maintain the security interests and liens
granted in this Pledge Agreement and in order to fully consummate
all of the transactions contemplated therein;
(x) to exchange any of the Pledged Collateral of such
Pledgor or other property upon any merger, consolidation,
reorganization, recapitalization or other readjustment of the issuer
thereof and, in connection therewith, deposit any of the Pledged
Collateral of such Pledgor with any committee, depository, transfer
agent, registrar or other designated agency upon such terms as the
Agent may determine;
(xi) to vote for a shareholder resolution, or to sign an
instrument in writing, sanctioning the transfer of any or all of the
Pledged Shares of such Pledgor into the name of the Agent or one or
more of the Lenders or into the name of any transferee
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to whom the Pledged Shares of such Pledgor or any part thereof may
be sold pursuant to Section 9 hereof; and
(xii) to do and perform all such other acts and things as
the Agent may reasonably deem to be necessary, proper or convenient
in connection with the Pledged Collateral of such Pledgor.
This power of attorney is a power coupled with an interest and shall be
irrevocable (i) for so long as any of the Pledgor Obligations remain
outstanding, any Credit Document or any Hedging Agreement is in effect or
any Letter of Credit shall remain outstanding and (ii) until all of the
Commitments shall have been terminated. The Agent shall be under no duty
to exercise or withhold the exercise of any of the rights, powers,
privileges and options expressly or implicitly granted to the Agent in
this Pledge Agreement, and shall not be liable for any failure to do so or
any delay in doing so. The Agent shall not be liable for any act or
omission or for any error of judgment or any mistake of fact or law in its
individual capacity or its capacity as attorney-in-fact except acts or
omissions resulting from its gross negligence or willful misconduct. This
power of attorney is conferred on the Agent solely to protect, preserve
and realize upon its security interest in Pledged Collateral.
(b) PERFORMANCE BY THE AGENT OF PLEDGOR'S OBLIGATIONS. If any
Pledgor fails to perform any agreement or obligation contained herein, the
Agent itself may perform, or cause performance of, such agreement or
obligation, and the expenses of the Agent incurred in connection therewith
shall be payable by the Pledgors on a joint and several basis pursuant to
Section 13 hereof.
(c) ASSIGNMENT BY THE AGENT. The Agent may from time to time
assign the Pledgor Obligations and any portion thereof and/or the Pledged
Collateral and any portion thereof, and the assignee shall be entitled to
all of the rights and remedies of the Agent under this Pledge Agreement in
relation thereto.
(d) THE AGENT'S DUTY OF CARE. Other than the exercise of
reasonable care to assure the safe custody of the Pledged Collateral while
being held by the Agent hereunder, the Agent shall have no duty or
liability to preserve rights pertaining thereto, it being understood and
agreed that Pledgors shall be responsible for preservation of all rights
in the Pledged Collateral of such Pledgor, and the Agent shall be relieved
of all responsibility for Pledged Collateral upon surrendering it or
tendering the surrender of it to the Pledgors. The Agent shall be deemed
to have exercised reasonable care in the custody and preservation of the
Pledged Collateral in its possession if such Pledged Collateral is
accorded treatment substantially equal to that which the Agent accords its
own property, which shall be no less than the treatment employed by a
reasonable and prudent agent in the industry, it being understood that the
Agent shall not have responsibility for (i) ascertaining or taking action
with respect to calls, conversions, exchanges, maturities, tenders or
other matters relating to any Pledged Collateral, whether or not the Agent
has or is deemed to have knowledge of such matters; or (ii) taking any
necessary steps to preserve rights against any parties with respect to any
Pledged Collateral.
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(e) VOTING RIGHTS IN RESPECT OF THE PLEDGED COLLATERAL.
(i) So long as no Event of Default shall have occurred
and be continuing, to the extent permitted by law, each Pledgor may
exercise any and all voting and other consensual rights pertaining
to the Pledged Collateral of such Pledgor or any part thereof for
any purpose not inconsistent with the terms of this Pledge Agreement
or the Credit Agreement; and
(ii) Upon the occurrence and during the continuance of
an Event of Default, all rights of a Pledgor to exercise the voting
and other consensual rights which it would otherwise be entitled to
exercise pursuant to paragraph (i) of this Section shall cease and
all such rights shall thereupon become vested in the Agent which
shall then have the sole right to exercise such voting and other
consensual rights.
(f) DIVIDEND RIGHTS IN RESPECT OF THE PLEDGED COLLATERAL.
(i) So long as no Event of Default shall have occurred
and be continuing and subject to Section 4(b) hereof, each Pledgor
may receive and retain any and all dividends (other than stock
dividends and other dividends constituting Pledged Collateral which
are addressed hereinabove) or interest paid in respect of the
Pledged Collateral to the extent they are allowed under the Credit
Agreement.
(ii) Upon the occurrence and during the continuance of
an Event of Default:
(A) all rights of a Pledgor to receive the dividends
and interest payments which it would otherwise be authorized
to receive and retain pursuant to paragraph (i) of this
Section shall cease and all such rights shall thereupon be
vested in the Agent which shall then have the sole right to
receive and hold as Pledged Collateral such dividends and
interest payments; and
(B) all dividends and interest payments which are
received by a Pledgor contrary to the provisions of paragraph
(A) of this Section shall be received in trust for the benefit
of the Agent, shall be segregated from other property or funds
of such Pledgor, and shall be forthwith paid over to the Agent
as Pledged Collateral in the exact form received, to be held
by the Agent as Pledged Collateral and as further collateral
security for the Pledgor Obligations.
(g) RELEASE OF PLEDGED COLLATERAL. The Agent may release any of
the Pledged Collateral from this Pledge Agreement or may substitute any of
the Pledged Collateral for other Pledged Collateral without altering,
varying or diminishing in any way the force, effect, lien, pledge or
security interest of this Pledge Agreement as to any Pledged Collateral
not expressly released or substituted, and this Pledge Agreement shall
continue as a first priority lien on all Pledged Collateral not expressly
released or substituted.
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11. RIGHTS OF REQUIRED LENDERS. All rights of the Agent hereunder, if
not exercised by the Agent, may be exercised by the Required Lenders.
12. APPLICATION OF PROCEEDS. Upon the occurrence and during the
continuance of an Event of Default, any payments in respect of the Pledgor
Obligations and any proceeds of any Pledged Collateral, when received by the
Agent or any of the Lenders in cash or its equivalent, will be applied in
reduction of the Pledgor Obligations in the order set forth in SECTION 3.15(b)
of the Credit Agreement, and each Pledgor irrevocably waives the right to direct
the application of such payments and proceeds and acknowledges and agrees that
the Agent shall have the continuing and exclusive right to apply and reapply any
and all such payments and proceeds in the Agent's sole discretion,
notwithstanding any entry to the contrary upon any of its books and records.
13. COSTS OF COUNSEL. If at any time hereafter, whether upon the
occurrence of an Event of Default or not, the Agent employs counsel to prepare
or consider amendments, waivers or consents with respect to this Pledge
Agreement, or to take action or make a response in or with respect to any legal
or arbitral proceeding relating to this Pledge Agreement or relating to the
Pledged Collateral, or to protect the Pledged Collateral or exercise any rights
or remedies under this Pledge Agreement or with respect to the Pledged
Collateral, then the Pledgors agree to promptly pay upon demand any and all such
reasonable documented costs and expenses of the Agent or the Lenders, all of
which costs and expenses shall constitute Pledgor Obligations hereunder.
14. CONTINUING AGREEMENT.
(a) This Pledge Agreement shall be a continuing agreement in every
respect and shall remain in full force and effect so long as any of the
Pledgor Obligations remain outstanding or any Credit Document or Hedging
Agreement is in effect or any Letter of Credit shall remain outstanding,
and until all of the Commitments thereunder shall have terminated (other
than any obligations with respect to the indemnities and the
representations and warranties set forth in the Credit Documents). Upon
such payment and termination, this Pledge Agreement shall be automatically
terminated and the Agent and the Lenders shall, upon the request and at
the expense of the Pledgors, forthwith release all of its liens and
security interests hereunder and shall execute and deliver all UCC
termination statements and/or other documents reasonably requested by the
Pledgors evidencing such termination. Notwithstanding the foregoing all
releases and indemnities provided hereunder shall survive termination of
this Pledge Agreement.
(b) This Pledge Agreement shall continue to be effective or be
automatically reinstated, as the case may be, if at any time payment, in
whole or in part, of any of the Pledgor Obligations is rescinded or must
otherwise be restored or returned by the Agent or any Lender as a
preference, fraudulent conveyance or otherwise under any bankruptcy,
insolvency or similar law, all as though such payment had not been made;
provided that in the event payment of all or any part of the Pledgor
Obligations is rescinded or must be restored or returned, all reasonable
costs and expenses (including without limitation any reasonable legal fees
and disbursements) incurred by the Agent or any Lender in defending and
enforcing such reinstatement shall be deemed to be included as a part of
the Pledgor Obligations.
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15. AMENDMENTS; WAIVERS; MODIFICATIONS. This Pledge Agreement and the
provisions hereof may not be amended, waived, modified, changed, discharged or
terminated except as set forth in SECTION 11.6 of the Credit Agreement.
16. SUCCESSORS IN INTEREST. This Pledge Agreement shall create a
continuing security interest in the Collateral and shall be binding upon each
Pledgor, its successors and assigns and shall inure, together with the rights
and remedies of the Agent and the Lenders hereunder, to the benefit of the Agent
and the Lenders and their successors and permitted assigns; PROVIDED, HOWEVER,
that none of the Pledgors may assign its rights or delegate its duties hereunder
without the prior written consent of each Lender or the Required Lenders, as
required by the Credit Agreement. To the fullest extent permitted by law, each
Pledgor hereby releases the Agent and each Lender, and its successors and
assigns, from any liability for any act or omission relating to this Pledge
Agreement or the Collateral, except for any liability arising from the gross
negligence or willful misconduct of the Agent, or such Lender, or its officers,
employees or agents.
17. NOTICES. All notices required or permitted to be given under this
Pledge Agreement shall be in conformance with SECTION 11.1 of the Credit
Agreement.
18. COUNTERPARTS. This Pledge Agreement may be executed in any number of
counterparts, each of which where so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Pledge Agreement to produce or
account for more than one such counterpart.
19. HEADINGS. The headings of the sections and subsections hereof are
provided for convenience only and shall not in any way affect the meaning or
construction of any provision of this Pledge Agreement.
20. GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE.
(a) THIS PLEDGE AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA. Any legal action
or proceeding with respect to this Pledge Agreement may be brought in the
courts of the State of North Carolina, or of the United States for the
Western District of North Carolina, and, by execution and delivery of this
Pledge Agreement, each Pledgor hereby irrevocably accepts for itself and
in respect of its property, generally and unconditionally, the
jurisdiction of such courts. Each Pledgor further irrevocably consents to
the service of process out of any of the aforementioned courts in any such
action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to it at the address for notices pursuant
to SECTION 11.1 of the Credit Agreement, such service to become effective
30 days after such mailing. Nothing herein shall affect the right of the
Agent to serve process in any other manner permitted by law or to commence
legal proceedings or to otherwise proceed against any Pledgor in any other
jurisdiction.
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(b) Each Pledgor hereby irrevocably waives any objection which it
may now or hereafter have to the laying of venue of any of the aforesaid
actions or proceedings arising out of or in connection with this Pledge
Agreement brought in the courts referred to in subsection (a) hereof and
hereby further irrevocably waives and agrees not to plead or claim in any
such court that any such action or proceeding brought in any such court
has been brought in an inconvenient forum.
21. WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE LAW,
EACH OF THE PARTIES TO THIS PLEDGE AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT
TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS PLEDGE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
22. SEVERABILITY. If any provision of any of the Pledge Agreement is
determined to be illegal, invalid or unenforceable, such provision shall be
fully severable and the remaining provisions shall remain in full force and
effect and shall be construed without giving effect to the illegal, invalid or
unenforceable provisions.
23. ENTIRETY. This Pledge Agreement, the other Credit Documents and the
Hedging Agreements represent the entire agreement of the parties hereto and
thereto, and supersede all prior agreements and understandings, oral or written,
if any, including any commitment letters or correspondence relating to the
Credit Documents, the Hedging Agreements or the transactions contemplated herein
and therein.
24. SURVIVAL. All representations and warranties of the Pledgors
hereunder shall survive the execution and delivery of this Pledge Agreement, the
other Credit Documents and the Hedging Agreements, the delivery of the Notes and
the making of the Loans and the issuance of the Letters of Credit under the
Credit Agreement.
25. OTHER SECURITY. To the extent that any of the Pledgor Obligations
are now or hereafter secured by property other than the Pledged Collateral
(including, without limitation, real and other personal property owned by a
Pledgor), or by a guarantee, endorsement or property of any other Person, then
the Agent and the Lenders shall have the right to proceed against such other
property, guarantee or endorsement upon the occurrence of any Event of Default,
and the Agent and the Lenders have the right, in their sole discretion, to
determine which rights, security, liens, security interests or remedies the
Agent and the Lenders shall at any time pursue, relinquish, subordinate, modify
or take with respect thereto, without in any way modifying or affecting any of
them or any of the Agent's and the Lenders' rights or the Pledgor Obligations
under this Pledge Agreement, under any other of the Credit Documents or under
any Hedging Agreement.
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26. OBLIGATIONS OF PLEDGORS.
(a) Each of the Pledgors is accepting joint and several liability
hereunder in consideration of the financial accommodation to be provided
by the Lenders under the Credit Agreement, for the mutual benefit,
directly and indirectly, of each of the Pledgors and in consideration of
the undertakings of each of the Pledgors to accept joint and several
liability for the obligations of each of them.
(b) Each of the Pledgors, jointly and severally hereby irrevocably
and unconditionally accepts, not merely as a surety but also as a
co-debtor, joint and several liability with the other Pledgors with
respect to the payment and performance of all of the Pledgor Obligations
arising under this Pledge Agreement, the other Credit Documents and the
Hedging Agreements, it being the intention of the parties hereto that all
the Pledgor Obligations shall be the joint and several obligations of each
of the Pledgors without preferences or distinction among them.
(c) Notwithstanding any provision to the contrary contained herein
or in any other of the Credit Documents, to the extent the obligations of
a Guarantor shall be adjudicated to be invalid or unenforceable for any
reason (including, without limitation, because of any applicable state or
federal law relating to fraudulent conveyances or transfers) then the
obligations of each Guarantor hereunder shall be limited to the maximum
amount that is permissible under applicable law (whether federal or state
and including, without limitation, the Bankruptcy Code).
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Each of the parties hereto has caused a counterpart of this Pledge
Agreement to be duly executed and delivered as of the date first above written.
BORROWER: XXXXXXX INDUSTRIES INC.,
--------- a Delaware corporation
By: __________________________
Name: ________________________
Title: _______________________
GUARANTORS:
-----------
______________________________
By: __________________________
Name: ________________________
Title: _______________________
______________________________
By: __________________________
Name: ________________________
Title: _______________________
______________________________
By: __________________________
Name: ________________________
Title: _______________________
111
Accepted and agreed to in Charlotte, North Carolina as of the date first
above written.
FIRST UNION NATIONAL BANK,
as Agent
By: __________________________
Name: ________________________
Title: _______________________
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SCHEDULE 2(a)
to
Pledge Agreement
dated as of _______________, 1998
in favor of First Union National Bank
as Agent
PLEDGED STOCK
PLEDGOR:
Number of Certificate Percentage
Name of Subsidiary Shares Number Ownership
------------------ ------ ------ ---------
Number of Certificate Percentage
Shares Number Ownership
------ ------ ---------
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EXHIBIT 4(a)
to
Pledge Agreement
dated as of ________________, 1998
in favor of First Union National Bank
as Agent
IRREVOCABLE STOCK POWER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers to
the following shares of capital stock of _____________________, a ____________
corporation:
No. of Shares Certificate No.
------------- ---------------
and irrevocably appoints __________________________________ its agent and
attorney-in-fact to transfer all or any part of such capital stock and to take
all necessary and appropriate action to effect any such transfer. The agent and
attorney-in-fact may substitute and appoint one or more persons to act for him.
The effectiveness of a transfer pursuant to this stock power shall be subject to
any and all transfer restrictions referenced on the face of the certificates
evidencing such interest or in the certificate of incorporation or bylaws of the
subject corporation, to the extent they may from time to time exist.
________________,
a ______________ corporation
By: ____________________________
Name: __________________________
Title: _________________________
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EXHIBIT 1.1B
FORM OF SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "SECURITY AGREEMENT") is entered into as of
July 2, 1998 among XXXXXXX INDUSTRIES INC., a [DELAWARE] corporation (the
"BORROWER"), the Guarantors indicated on the signature pages hereto
(individually a "GUARANTOR" and collectively the "GUARANTORS"; together with the
Borrower, individually an "OBLIGOR" and collectively the "OBLIGORS") and FIRST
UNION NATIONAL BANK, in its capacity as agent (in such capacity, the "AGENT")
for the lenders from time to time party to the Credit Agreement described below
(the "LENDERS").
RECITALS
WHEREAS, pursuant to that certain Credit Agreement dated as of the date
hereof (as amended, modified, extended, renewed or replaced from time to time,
the "CREDIT AGREEMENT"), among the Borrower, the Guarantors, the Lenders and the
Agent, the Lenders have agreed to make Loans and issue Letters of Credit upon
the terms and subject to the conditions set forth therein; and
WHEREAS, it is a condition precedent to the effectiveness of the Credit
Agreement and the obligations of the Lenders to make their respective Loans and
to issue Letters of Credit under the Credit Agreement that the Obligors shall
have executed and delivered this Security Agreement to the Agent for the ratable
benefit of the Lenders.
NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. DEFINITIONS.
(a) Unless otherwise defined herein, capitalized terms used herein
shall have the meanings ascribed to such terms in the Credit Agreement,
and the following terms which are defined in the Uniform Commercial Code
in effect in the State of North Carolina on the date hereof are used
herein as so defined: Accounts, Chattel Paper, Deposit Accounts,
Documents, Equipment, Farm Products, Fixtures, General Intangibles,
Instruments, Inventory, Investment Property and Proceeds. For purposes of
this Security Agreement, the term "Lender" shall include any Affiliate of
any Lender which has entered into a Hedging Agreement with the Borrower.
(b) In addition, the following terms shall have the following
meanings:
"COPYRIGHT LICENSES": any written agreement, naming any Obligor as
licensor, granting any right under any Copyright including, without
limitation, any thereof referred to in SCHEDULE 6.17 to the Credit
Agreement.
"COPYRIGHTS": (a) all registered United States copyrights in all
Works, now existing or hereafter created or acquired, all registrations
and recordings thereof, and all applications in
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connection therewith, including, without limitation, registrations,
recordings and applications in the United States Copyright office
including, without limitation, any thereof referred to in SCHEDULE 6.17 to
the Credit Agreement, and (b) all renewals thereof including, without
limitation, any thereof referred to in SCHEDULE 6.17 to the Credit
Agreement.
"PATENT LICENSE": all agreements, whether written or oral, providing
for the grant by or to an Obligor of any right to manufacture, use or sell
any invention covered by a Patent, including, without limitation, any
thereof referred to in SCHEDULE 6.17 to the Credit Agreement.
"PATENTS": (a) all letters patent of the United States or any other
country and all reissues and extensions thereof, including, without
limitation, any thereof referred to in SCHEDULE 6.17 to the Credit
Agreement, and (b) all applications for letters patent of the United
States or any other country and all divisions, continuations and
continuations-in-part thereof, including, without limitation, any thereof
referred to in SCHEDULE 6.17 to the Credit Agreement.
"SECURED OBLIGATIONS": the collective reference to the following:
(a) In the case of the Borrower, the prompt performance
and observance by the Borrower of all obligations of the Borrower
under the Credit Agreement, the Notes, this Security Agreement and
the other Credit Documents to which the Borrower is a party;
(b) In the case of the Guarantors, the prompt
performance and observance by the Guarantors of all obligations of
the Guarantors under the Credit Agreement, this Security Agreement
and the other Credit Documents to which any Guarantor is a party,
including, without limitation, its guaranty obligations arising
under Section 4 of the Credit Agreement; and
(c) All other indebtedness, liabilities and obligations
of any kind or nature, now existing or hereafter arising, owing from
any Obligor to any Lender or the Agent, howsoever evidenced,
created, incurred or acquired, whether primary, secondary, direct,
contingent, or joint and several, including, without limitation, all
liabilities arising under Hedging Agreements and all obligations and
liabilities incurred in connection with collecting and enforcing the
Secured Obligations.
"TRADEMARK LICENSE": means any agreement, written or oral, providing
for the grant by or to an Obligor of any right to use any Trademark,
including, without limitation, any thereof referred to in SCHEDULE 6.17 to
the Credit Agreement.
"TRADEMARKS": (a) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles,
service marks, logos and other source or business identifiers, and the
goodwill associated therewith, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all applications
in connection therewith, whether in the United States Patent and Trademark
Office or in any similar office or agency of the United States, any State
thereof or any other country or any political subdivision thereof, or
116
otherwise, including, without limitation, any thereof referred to in
SCHEDULE 6.17 to the Credit Agreement, and (b) all renewals thereof.
"WORK": any work which is subject to copyright protection pursuant
to Title 17 of the United States Code.
2. GRANT OF SECURITY INTEREST IN THE COLLATERAL. To secure the prompt
payment and performance in full when due, whether by lapse of time, acceleration
or otherwise, of the Secured Obligations, each Obligor hereby grants to the
Agent, for the benefit of the Lenders, a continuing security interest in, and a
right to set off against, any and all right, title and interest of such Obligor
in and to the following, whether now owned or existing or owned, acquired, or
arising hereafter (collectively, the "COLLATERAL"):
(a) all Accounts;
(b) all Chattel Paper;
(c) all Copyrights;
(d) all Copyright Licenses;
(e) all Deposit Accounts;
(f) all Documents;
(g) all Equipment;
(h) all Fixtures;
(i) all General Intangibles;
(j) all Instruments;
(k) all Inventory;
(l) Investment Property;
(m) all Patents;
(n) all Patent Licenses;
(o) all Trademarks;
(p) all Trademark Licenses;
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(q) all books, records, ledger cards, files,
correspondence, computer programs, tapes, disks, and related
data processing software (owned by such Obligor or in which it
has an interest) that at any time evidence or contain
information relating to any Collateral or are otherwise
necessary or helpful in the collection thereof or realization
thereupon; and
(r) to the extent not otherwise included, all Proceeds
and products of any and all of the foregoing.
The Obligors and the Agent, on behalf of the Lenders, hereby acknowledge
and agree that the security interest created hereby in the Collateral (i)
constitutes continuing collateral security for all of the Secured Obligations,
whether now existing or hereafter arising and (ii) is not to be construed as an
assignment of any Copyrights, Copyright Licenses, Patents, Patent Licenses,
Trademarks or Trademark Licenses.
3. PROVISIONS RELATING TO ACCOUNTS.
(a) Anything herein to the contrary notwithstanding, each of the
Obligors shall remain liable under each of the Accounts to observe and
perform all the conditions and obligations to be observed and performed by
it thereunder, all in accordance with the terms of any agreement giving
rise to each such Account. Neither the Agent nor any Lender shall have any
obligation or liability under any Account (or any agreement giving rise
thereto) by reason of or arising out of this Security Agreement or the
receipt by the Agent or any Lender of any payment relating to such Account
pursuant hereto, nor shall the Agent or any Lender be obligated in any
manner to perform any of the obligations of an Obligor under or pursuant
to any Account (or any agreement giving rise thereto), to make any
payment, to make any inquiry as to the nature or the sufficiency of any
payment received by it or as to the sufficiency of any performance by any
party under any Account (or any agreement giving rise thereto), to present
or file any claim, to take any action to enforce any performance or to
collect the payment of any amounts which may have been assigned to it or
to which it may be entitled at any time or times.
(b) Once during each calendar year or at any time after the
occurrence and during the continuation of an Event of Default, the Agent
shall have the right, but not the obligation, to make test verifications
of the Accounts in any manner and through any medium that it reasonably
considers advisable, and the Obligors shall furnish all such assistance
and information as the Agent may require in connection with such test
verifications. At any time and from time to time, upon the Agent's request
and at the expense of the Obligors, the Obligors shall cause independent
public accountants or others satisfactory to the Agent to furnish to the
Agent reports showing reconciliations, aging and test verifications of,
and trial balances for, the Accounts. The Agent in its own name or in the
name of others may communicate with account debtors on the Accounts to
verify with them to the Agent's satisfaction the existence, amount and
terms of any Accounts.
4. REPRESENTATIONS AND WARRANTIES. Each Obligor hereby represents and
warrants to the Agent, for the benefit of the Lenders, that so long as any of
the Secured Obligations remain outstanding
118
or any Credit Document or Hedging Agreement is in effect or any Letter of
Credit shall remain outstanding, and until all of the Commitments shall
have been terminated:
(a) CHIEF EXECUTIVE OFFICE; BOOKS & RECORDS. Each Obligor's chief
executive office and chief place of business is (and for the prior four
months have been) located at the locations set forth on SCHEDULE 6.20(c)
to the Credit Agreement, and each Obligor keeps its books and records at
such locations.
(b) LOCATION OF COLLATERAL. The location of all Collateral owned by
each Obligor is as shown on SCHEDULE 6.20(B) to the Credit Agreement.
(c) OWNERSHIP. Each Obligor is the legal and beneficial owner of its
Collateral and has the right to pledge, sell, assign or transfer the same.
Each Obligor's legal name is as shown in this Security Agreement and no
Obligor has in the past four months changed its name, been party to a
merger, consolidation or other change in structure or used any tradename.
(d) SECURITY INTEREST/PRIORITY. This Security Agreement creates a
valid security interest in favor of the Agent, for the benefit of the
Lenders, in the Collateral of such Obligor and, when properly perfected by
filing, shall constitute a valid perfected security interest in such
Collateral, to the extent such security can be perfected by filing under
the UCC, free and clear of all Liens except for Permitted Liens.
(e) FARM PRODUCTS. None of the Collateral constitutes, or is the
Proceeds of, Farm Products.
(f) ACCOUNTS. (i) Each Account of the Obligors and the papers and
documents relating thereto are genuine and in all material respects what
they purport to be, (ii) each Account arises out of (A) a bona fide sale
of goods sold and delivered by such Obligor (or is in the process of being
delivered) or (B) services theretofore actually rendered by such Obligor
to, the account debtor named therein, (iii) no Account of an Obligor is
evidenced by any Instrument or Chattel Paper unless such Instrument or
Chattel Paper has been theretofore endorsed over and delivered to the
Agent and (iv) no surety bond was required or given in connection with any
Account of an Obligor or the contracts or purchase orders out of which
they arose.
(g) INVENTORY. No Inventory is held by an Obligor pursuant to
consignment, sale or return, sale on approval or similar arrangement.
(h) COPYRIGHTS, PATENTS AND TRADEMARKS.
(i) SCHEDULE 6.17 to the Credit Agreement includes all
Copyrights, Copyright Licenses, Patents, Patent Licenses, Trademarks
and Trademark Licenses owned by the Obligors in their own names as
of the date hereof.
119
(ii) To the best of each Obligor's knowledge, each
Copyright, Patent and Trademark of such Obligor is valid,
subsisting, unexpired, enforceable and has not been abandoned.
(iii) Except as set forth in SCHEDULE 6.17 to the Credit
Agreement, none of such Copyrights, Patents and Trademarks is the
subject of any licensing or franchise agreement.
(iv) No holding, decision or judgment has been rendered
by any Governmental Authority which would limit, cancel or question
the validity of any Copyright, Patent or Trademark.
(v) To the best of each Obligor's knowledge, no action
or proceeding is pending seeking to limit, cancel or question the
validity of any Copyright, Patent or Trademark, or which, if
adversely determined, would have a material adverse effect on the
value of any Copyright, Patent or Trademark.
(vi) All applications pertaining to the Copyrights,
Patents and Trademarks of each Obligor have been duly and properly
filed, and all registrations or letters pertaining to such
Copyrights, Patents and Trademarks have been duly and properly filed
and issued, and all of such Copyrights, Patents and Trademarks are
valid and enforceable.
(vii) No Obligor has made any assignment or agreement in
conflict with the security interest in the Copyrights, Patents or
Trademarks of each Obligor hereunder.
5. COVENANTS. Each Obligor covenants that, so long as any of the
Secured Obligations remain outstanding or any Credit Document or Hedging
Agreement is in effect or any Letter of Credit shall remain outstanding, and
until all of the Commitments shall have been terminated, such Obligor shall:
(a) OTHER LIENS. Defend the Collateral against the claims and
demands of all other parties claiming an interest therein, keep the
Collateral free from all Liens, except for Permitted Liens, and not sell,
exchange, transfer, assign, lease or otherwise dispose of the Collateral
or any interest therein, except as permitted under the Credit Agreement.
(b) PRESERVATION OF COLLATERAL. Keep the Collateral in good order,
condition and repair and not use the Collateral in violation of the
provisions of this Security Agreement or any other agreement relating to
the Collateral or any policy insuring the Collateral or any applicable
statute, law, bylaw, rule, regulation or ordinance.
(c) INSTRUMENTS/CHATTEL PAPER. If any amount payable under or in
connection with any of the Collateral shall be or become evidenced by any
Instrument or Chattel Paper, immediately deliver such Instrument or
Chattel Paper to the Agent, duly indorsed in a manner satisfactory to the
Agent, to be held as Collateral pursuant to this Security Agreement.
120
(d) CHANGE IN LOCATION. Not, without providing 30 days prior written
notice to the Agent and without filing such amendments to any previously
filed financing statements as the Agent may require, (a) change the
location of its chief executive office and chief place of business (as
well as its books and records) from the locations set forth on SCHEDULE
6.20(c) to the Credit Agreement, (b) change the location of its Collateral
from the locations set forth for such Obligor on SCHEDULE 6.20(b) to the
Credit Agreement, or (c) change its name, be party to a merger,
consolidation or other change in structure or use any tradename.
(e) INSPECTION. Upon reasonable notice, and during reasonable hours,
at all times allow the Agent or its representatives to visit and inspect
the Collateral as set forth in SECTION 7.10 of the Credit Agreement.
(f) PERFECTION OF SECURITY INTEREST. Execute and deliver to the
Agent such agreements, assignments or instruments (including affidavits,
notices, reaffirmations and amendments and restatements of existing
documents, as the Agent may reasonably request) and do all such other
things as the Agent may reasonably deem necessary or appropriate (i) to
assure to the Agent its security interests hereunder, including (A) such
financing statements (including renewal statements) or amendments thereof
or supplements thereto or other instruments as the Agent may from time to
time reasonably request in order to perfect and maintain the security
interests granted hereunder in accordance with the UCC, (B) with regard to
Copyrights, a Notice of Grant of Security Interest in Copyrights in the
form of SCHEDULE 5(f)(i) ATTACHED HERETO, (C) with regard to Patents, a
Notice of Grant of Security Interest in Patents for filing with the United
States Patent and Trademark Office in the form of SCHEDULE 5(f)(ii)
attached hereto and (D) with regard to Trademarks, a Notice of Grant of
Security Interest in Trademarks for filing with the United States Patent
and Trademark Office in the form of SCHEDULE 5(f)(iii) attached hereto,
(ii) to consummate the transactions contemplated hereby and (iii) to
otherwise protect and assure the Agent of its rights and interests
hereunder. To that end, each Obligor agrees that the Agent may file one or
more financing statements disclosing the Agent's security interest in any
or all of the Collateral of such Obligor without, to the extent permitted
by law, such Obligor's signature thereon, and further each Obligor also
hereby irrevocably makes, constitutes and appoints the Agent, its nominee
or any other person whom the Agent may designate, as such Obligor's
attorney in fact with full power and for the limited purpose to sign in
the name of such Obligor any such financing statements, or amendments and
supplements to financing statements, renewal financing statements, notices
or any similar documents which in the Agent's reasonable discretion would
be necessary, appropriate or convenient in order to perfect and maintain
perfection of the security interests granted hereunder, such power, being
coupled with an interest, being and remaining irrevocable so long as the
Credit Agreement is in effect or any amounts payable thereunder or under
any other Credit Document, any Letter of Credit or any Hedging Agreement
shall remain outstanding, and until all of the Commitments thereunder
shall have terminated. Each Obligor hereby agrees that a carbon,
photographic or other reproduction of this Security Agreement or any such
financing statement is sufficient for filing as a financing statement by
the Agent without notice thereof to such Obligor wherever the Agent may in
its sole discretion desire to file the same. In the event for any reason
the law of any jurisdiction other than North Carolina becomes or is
applicable to the Collateral of any Obligor or any part thereof, or to any
of the Secured
121
Obligations, such Obligor agrees to execute and deliver all such
instruments and to do all such other things as the Agent in its sole
discretion reasonably deems necessary or appropriate to preserve, protect
and enforce the security interests of the Agent under the law of such
other jurisdiction (and, if an Obligor shall fail to do so promptly upon
the request of the Agent, then the Agent may execute any and all such
requested documents on behalf of such Obligor pursuant to the power of
attorney granted hereinabove). If any Collateral is in the possession or
control of an Obligor's agents and the Agent so requests, such Obligor
agrees to notify such agents in writing of the Agent's security interest
therein and, upon the Agent's request, instruct them to hold all such
Collateral for the Lenders' account and subject to the Agent's
instructions. Each Obligor agrees to xxxx its books and records to reflect
the security interest of the Agent in the Collateral.
(g) TREATMENT OF ACCOUNTS. Not grant or extend the time for payment
of any Account, or compromise or settle any Account for less than the full
amount thereof, or release any person or property, in whole or in part,
from payment thereof, or allow any credit or discount thereon, other than
as normal and customary in the ordinary course of an Obligor's business.
(h) COVENANTS RELATING TO COPYRIGHTS.
(i) Employ the Copyright for each Work with such
notice of copyright as may be required by law to secure copyright
protection.
(ii) Not do any act or knowingly omit to do any act
whereby any material Copyright may become invalidated and (A) not do
any act, or knowingly omit to do any act, whereby any material
Copyright may become injected into the public domain; (B) notify the
Agent immediately if it knows, or has reason to know, that any
material Copyright may become injected into the public domain or of
any adverse determination or development (including, without
limitation, the institution of, or any such determination or
development in, any court or tribunal in the United States or any
other country) regarding an Obligor's ownership of any such
Copyright or its validity; (C) take all necessary steps as it shall
deem appropriate under the circumstances, to maintain and pursue
each application (and to obtain the relevant registration) and to
maintain each registration of each material Copyright owned by an
Obligor including, without limitation, filing of applications for
renewal where necessary; and (D) promptly notify the Agent of any
material infringement of any material Copyright of an Obligor of
which it becomes aware and take such actions as it shall reasonably
deem appropriate under the circumstances to protect such Copyright,
including, where appropriate, the bringing of suit for infringement,
seeking injunctive relief and seeking to recover any and all damages
for such infringement.
(iii) Not make any assignment or agreement in conflict
with the security interest in the Copyrights of each Obligor
hereunder.
(i) COVENANTS RELATING TO PATENTS AND TRADEMARKS.
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(i) (A) Continue to use each Trademark on each and
every trademark class of goods applicable to its current line as
reflected in its current catalogs, brochures and price lists in
order to maintain such Trademark in full force free from any claim
of abandonment for non-use, (B) maintain as in the past the quality
of products and services offered under such Trademark, (C) employ
such Trademark with the appropriate notice of registration, (D) not
adopt or use any xxxx which is confusingly similar or a colorable
imitation of such Trademark unless the Agent, for the ratable
benefit of the Lenders, shall obtain a perfected security interest
in such xxxx pursuant to this Security Agreement, and (E) not (and
not permit any licensee or sublicensee thereof to) do any act or
knowingly omit to do any act whereby any Trademark may become
invalidated.
(ii) Not do any act, or omit to do any act, whereby any
Patent may become abandoned or dedicated.
(iii) Notify the Agent and the Lenders immediately if it
knows, or has reason to know, that any application or registration
relating to any Patent or Trademark may become abandoned or
dedicated, or of any adverse determination or development
(including, without limitation, the institution of, or any such
determination or development in, any proceeding in the United States
Patent and Trademark Office or any court or tribunal in any country)
regarding an Obligor's ownership of any Patent or Trademark or its
right to register the same or to keep and maintain the same.
(iv) Whenever an Obligor, either by itself or through
an agent, employee, licensee or designee, shall file an application
for the registration of any Patent or Trademark with the United
States Patent and Trademark Office or any similar office or agency
in any other country or any political subdivision thereof, an
Obligor shall report such filing to the Agent and the Lenders within
five Business Days after the last day of the fiscal quarter in which
such filing occurs. Upon request of the Agent, an Obligor shall
execute and deliver any and all agreements, instruments, documents
and papers as the Agent may request to evidence the Agent's and the
Lenders' security interest in any Patent or Trademark and the
goodwill and general intangibles of an Obligor relating thereto or
represented thereby.
(v) Take all reasonable and necessary steps, including,
without limitation, in any proceeding before the United States
Patent and Trademark Office, or any similar office or agency in any
other country or any political subdivision thereof, to maintain and
pursue each application (and to obtain the relevant registration)
and to maintain each registration of all Patents and Trademarks,
including, without limitation, filing of applications for renewal,
affidavits of use and affidavits of incontestability.
(vi) Promptly notify the Agent and the Lenders after it
learns that any Patent or Trademark included in the Collateral is
infringed, misappropriated or diluted by a third party and promptly
xxx for infringement, misappropriation or dilution, to seek
injunctive relief where appropriate and to recover any and all
damages for such
123
infringement, misappropriation or dilution, or take such other
actions as it shall reasonably deem appropriate under the
circumstances to protect such Patent or Trademark.
(vii) Not make any assignment or agreement in conflict
with the security interest in the Patents or Trademarks of each
Obligor hereunder.
(j) NEW PATENTS, COPYRIGHTS AND TRADEMARKS. Promptly provide the
Agent with (i) a listing of all applications, if any, for new Copyrights,
Patents or Trademarks (together with a listing of the issuance of
registrations or letters on present applications), which new applications
and issued registrations or letters shall be subject to the terms and
conditions hereunder, and (ii) (A) with respect to Copyrights, a duly
executed Notice of Security Interest in Copyrights, (B) with respect to
Patents, a duly executed Notice of Security Interest in Patents, (C) with
respect to Trademarks, a duly executed Notice of Security Interest in
Trademarks or (D) such other duly executed documents as the Agent may
request in a form acceptable to counsel for the Agent and suitable for
recording to evidence the security interest in the Copyright, Patent or
Trademark which is the subject of such new application.
(k) INSURANCE. Insure, repair and replace the Collateral of such
Obligor as set forth in the Credit Agreement. All insurance proceeds shall
be subject to the security interest of the Agent hereunder.
6. ADVANCES BY LENDERS. On failure of any Obligor to perform any of the
covenants and agreements contained herein, the Agent may, at its sole option and
in its sole discretion, perform the same and in so doing may expend such sums as
the Agent may reasonably deem advisable in the performance thereof, including,
without limitation, the payment of any insurance premiums, the payment of any
taxes, a payment to obtain a release of a Lien or potential Lien, expenditures
made in defending against any adverse claim and all other expenditures which the
Agent or the Lenders may make for the protection of the security hereof or which
may be compelled to make by operation of law. All such sums and amounts so
expended shall be repayable by the Obligors on a joint and several basis
promptly upon timely notice thereof and demand therefor, shall constitute
additional Secured Obligations and shall bear interest from the date said
amounts are expended at the default rate specified in SECTION 3.1 of the Credit
Agreement for Revolving Loans that are Base Rate Loans. No such performance of
any covenant or agreement by the Agent or the Lenders on behalf of any Obligor,
and no such advance or expenditure therefor, shall relieve the Obligors of any
default under the terms of this Security Agreement, the other Credit Documents
or any Hedging Agreement. The Lenders may make any payment hereby authorized in
accordance with any xxxx, statement or estimate procured from the appropriate
public office or holder of the claim to be discharged without inquiry into the
accuracy of such xxxx, statement or estimate or into the validity of any tax
assessment, sale, forfeiture, tax lien, title or claim except to the extent such
payment is being contested in good faith by an Obligor in appropriate
proceedings and against which adequate reserves are being maintained in
accordance with GAAP.
124
7. EVENTS OF DEFAULT.
The occurrence of an event which under the Credit Agreement would
constitute an Event of Default shall be an Event of Default hereunder (an "EVENT
OF DEFAULT").
8. REMEDIES.
(a) GENERAL REMEDIES. Upon the occurrence of an Event of Default and
during continuation thereof, the Lenders shall have, in addition to the
rights and remedies provided herein, in the Credit Documents, in the
Hedging Agreements or by law (including, but not limited to, the rights
and remedies set forth in the Uniform Commercial Code of the jurisdiction
applicable to the affected Collateral), the rights and remedies of a
secured party under the UCC (regardless of whether the UCC is the law of
the jurisdiction where the rights and remedies are asserted and regardless
of whether the UCC applies to the affected Collateral), and further, the
Agent may, with or without judicial process or the aid and assistance of
others, (i) enter on any premises on which any of the Collateral may be
located and, without resistance or interference by the Obligors, take
possession of the Collateral, (ii) dispose of any Collateral on any such
premises, (iii) require the Obligors to assemble and make available to the
Agent at the expense of the Obligors any Collateral at any place and time
designated by the Agent which is reasonably convenient to both parties,
(iv) remove any Collateral from any such premises for the purpose of
effecting sale or other disposition thereof, and/or (v) without demand and
without advertisement, notice, hearing or process of law, all of which
each of the Obligors hereby waives to the fullest extent permitted by law,
at any place and time or times, sell and deliver any or all Collateral
held by or for it at public or private sale, by one or more contracts, in
one or more parcels, for cash, upon credit or otherwise, at such prices
and upon such terms as the Agent deems advisable, in its sole discretion
(subject to any and all mandatory legal requirements). In addition to all
other sums due the Agent and the Lenders with respect to the Secured
Obligations, the Obligors shall pay the Agent and each of the Lenders all
reasonable documented costs and expenses incurred by the Agent or any such
Lender, including, but not limited to, reasonable attorneys' fees and
court costs, in obtaining or liquidating the Collateral, in enforcing
payment of the Secured Obligations, or in the prosecution or defense of
any action or proceeding by or against the Agent or the Lenders or the
Obligors concerning any matter arising out of or connected with this
Security Agreement, any Collateral or the Secured Obligations, including,
without limitation, any of the foregoing arising in, arising under or
related to a case under the Bankruptcy Code. To the extent the rights of
notice cannot be legally waived hereunder, each Obligor agrees that any
requirement of reasonable notice shall be met if such notice is personally
served on or mailed, postage prepaid, to the Borrower in accordance with
the notice provisions of SECTION 11.1 of the Credit Agreement at least 10
days before the time of sale or other event giving rise to the requirement
of such notice. The Agent and the Lenders shall not be obligated to make
any sale or other disposition of the Collateral regardless of notice
having been given. To the extent permitted by law, any Lender may be a
purchaser at any such sale. To the extent permitted by applicable law,
each of the Obligors hereby waives all of its rights of redemption with
respect to any such sale. Subject to the provisions of applicable law, the
Agent and the Lenders may postpone or cause the postponement of the sale
of all or any portion of the Collateral by announcement at the time and
place of such sale, and such sale may, without further notice, to the
extent permitted by law, be made at the time
125
and place to which the sale was postponed, or the Agent and the Lenders
may further postpone such sale by announcement made at such time and
place.
(b) REMEDIES RELATING TO ACCOUNTS. Upon the occurrence of an Event
of Default and during the continuation thereof, whether or not the Agent
has exercised any or all of its rights and remedies hereunder, each
Obligor will promptly upon request of the Agent instruct all account
debtors to remit all payments in respect of Accounts to a mailing location
selected by the Agent. In addition, the Agent or its designee may notify
any Obligor's customers and account debtors that the Accounts of such
Obligor have been assigned to the Agent or of the Agent's security
interest therein, and may (either in its own name or in the name of an
Obligor or both) demand, collect (including without limitation by way of a
lockbox arrangement), receive, take receipt for, sell, xxx for, compound,
settle, compromise and give acquittance for any and all amounts due or to
become due on any Account, and, in the Agent's discretion, file any claim
or take any other action or proceeding to protect and realize upon the
security interest of the Lenders in the Accounts. Each Obligor
acknowledges and agrees that the Proceeds of its Accounts remitted to or
on behalf of the Agent in accordance with the provisions hereof shall be
solely for the Agent's own convenience and that such Obligor shall not
have any right, title or interest in such Accounts or in any such other
amounts except as expressly provided herein. The Agent and the Lenders
shall have no liability or responsibility to any Obligor for acceptance of
a check, draft or other order for payment of money bearing the legend
"payment in full" or words of similar import or any other restrictive
legend or endorsement or be responsible for determining the correctness of
any remittance. Each Obligor hereby agrees to indemnify the Agent and the
Lenders from and against all liabilities, damages, losses, actions,
claims, judgments, costs, expenses, charges and reasonable attorneys' fees
suffered or incurred by the Agent or the Lenders (each, an "INDEMNIFIED
PARTY") because of the maintenance of the foregoing arrangements except as
relating to or arising out of the gross negligence or willful misconduct
of an Indemnified Party or its officers, employees or agents. In the case
of any investigation, litigation or other proceeding, the foregoing
indemnity shall be effective whether or not such investigation, litigation
or proceeding is brought by an Obligor, its directors, shareholders or
creditors or an Indemnified Party or any other Person or any other
Indemnified Party is otherwise a party thereto.
(c) ACCESS. In addition to the rights and remedies hereunder, upon
the occurrence of an Event of Default and during the continuance thereof,
the Agent shall have the right to enter and remain upon the various
premises of the Obligors without cost or charge to the Agent, and use the
same, together with materials, supplies, books and records of the Obligors
for the purpose of collecting and liquidating the Collateral, or for
preparing for sale and conducting the sale of the Collateral, whether by
foreclosure, auction or otherwise. In addition, the Agent may remove
Collateral, or any part thereof, from such premises and/or any records
with respect thereto, in order to effectively collect or liquidate such
Collateral.
(d) NONEXCLUSIVE NATURE OF REMEDIES. Failure by the Agent or the
Lenders to exercise any right, remedy or option under this Security
Agreement, any other Credit Document, any Hedging Agreement or as provided
by law, or any delay by the Agent or the Lenders in exercising the same,
shall not operate as a waiver of any such right, remedy or option. No
waiver hereunder shall be effective unless it is in writing, signed by the
party against whom such waiver
126
is sought to be enforced and then only to the extent specifically stated,
which in the case of the Agent or the Lenders shall only be granted as
provided herein. To the extent permitted by law, neither the Agent, the
Lenders, nor any party acting as attorney for the Agent or the Lenders,
shall be liable hereunder for any acts or omissions or for any error of
judgment or mistake of fact or law other than their gross negligence or
willful misconduct hereunder. The rights and remedies of the Agents and
the Lenders under this Security Agreement shall be cumulative and not
exclusive of any other right or remedy which the Agent or the Lenders may
have.
(e) RETENTION OF COLLATERAL. The Agent may, after providing the
notices required by Section 9-505(2) of the UCC or otherwise complying
with the requirements of applicable law of the relevant jurisdiction, to
the extent the Agent is in possession of any of the Collateral, retain the
Collateral in satisfaction of the Secured Obligations. Unless and until
the Agent shall have provided such notices, however, the Agent shall not
be deemed to have retained any Collateral in satisfaction of any Secured
Obligations for any reason.
(f) DEFICIENCY. In the event that the proceeds of any sale,
collection or realization are insufficient to pay all amounts to which the
Agent or the Lenders are legally entitled, the Obligors shall be jointly
and severally liable for the deficiency, together with interest thereon at
the default rate specified in SECTION 3.1 of the Credit Agreement for
Revolving Loans that are Base Rate Loans, together with the costs of
collection and the reasonable fees of any attorneys employed by the Agent
to collect such deficiency. Any surplus remaining after the full payment
and satisfaction of the Secured Obligations shall be returned to the
Obligors or to whomsoever a court of competent jurisdiction shall
determine to be entitled thereto.
9. RIGHTS OF THE AGENT.
(a) POWER OF ATTORNEY. In addition to other powers of attorney
contained herein, each Obligor hereby designates and appoints the Agent,
on behalf of the Lenders, and each of its designees or agents, as
attorney-in-fact of such Obligor, irrevocably and with power of
substitution, with authority to take any or all of the following actions
upon the occurrence and during the continuance of an Event of Default:
(i) to demand, collect, settle, compromise, adjust,
give discharges and releases, all as the Agent may reasonably
determine;
(ii) to commence and prosecute any actions at any
court for the purposes of collecting any Collateral and
enforcing any other right in respect thereof;
(iii) to defend, settle or compromise any action brought and,
in connection therewith, give such discharge or release as the Agent
may deem reasonably appropriate;
(iv) receive, open and dispose of mail addressed to an
Obligor and endorse checks, notes, drafts, acceptances, money
orders, bills of lading,
127
warehouse receipts or other instruments or documents evidencing
payment, shipment or storage of the goods giving rise to the
Collateral of such Obligor on behalf of and in the name of such
Obligor, or securing, or relating to such Collateral;
(v) sell, assign, transfer, make any agreement in respect
of, or otherwise deal with or exercise rights in respect of, any
Collateral or the goods or services which have given rise thereto,
as fully and completely as though the Agent were the absolute owner
thereof for all purposes;
(vi) adjust and settle claims under any insurance policy
relating thereto;
(vii) execute and deliver all assignments, conveyances,
statements, financing statements, renewal financing statements,
security agreements, affidavits, notices and other agreements,
instruments and documents that the Agent may determine necessary in
order to perfect and maintain the security interests and liens
granted in this Security Agreement and in order to fully consummate
all of the transactions contemplated therein;
(viii) institute any foreclosure proceedings that the
Agent may deem appropriate; and
(ix) do and perform all such other acts and things as the
Agent may reasonably deem to be necessary, proper or convenient in
connection with the Collateral.
This power of attorney is a power coupled with an interest and shall be
irrevocable (i) for so long as any of the Secured Obligations remain
outstanding, any Credit Document or any Hedging Agreement is in effect or
any Letter of Credit shall remain outstanding and (ii) until all of the
Commitments shall have been terminated. The Agent shall be under no duty
to exercise or withhold the exercise of any of the rights, powers,
privileges and options expressly or implicitly granted to the Agent in
this Security Agreement, and shall not be liable for any failure to do so
or any delay in doing so. The Agent shall not be liable for any act or
omission or for any error of judgment or any mistake of fact or law in its
individual capacity or its capacity as attorney-in-fact except acts or
omissions resulting from its gross negligence or willful misconduct. This
power of attorney is conferred on the Agent solely to protect, preserve
and realize upon its security interest in the Collateral.
(b) PERFORMANCE BY THE AGENT OF OBLIGATIONS. If any Obligor fails to
perform any agreement or obligation contained herein, the Agent itself may
perform, or cause performance of, such agreement or obligation, and the
expenses of the Agent incurred in connection therewith shall be payable by
the Obligors on a joint and several basis pursuant to Section 11 hereof.
(c) ASSIGNMENT BY THE AGENT. The Agent may from time to time assign
the Secured Obligations and any portion thereof and/or the Collateral and
any portion thereof, and the assignee
128
shall be entitled to all of the rights and remedies of the Agent under
this Security Agreement in relation thereto.
(d) THE AGENT'S DUTY OF CARE. Other than the exercise of reasonable
care to assure the safe custody of the Collateral while being held by the
Agent hereunder, the Agent shall have no duty or liability to preserve
rights pertaining thereto, it being understood and agreed that the
Obligors shall be responsible for preservation of all rights in the
Collateral, and the Agent shall be relieved of all responsibility for the
Collateral upon surrendering it or tendering the surrender of it to the
Obligors. The Agent shall be deemed to have exercised reasonable care in
the custody and preservation of the Collateral in its possession if the
Collateral is accorded treatment substantially equal to that which the
Agent accords its own property, which shall be no less than the treatment
employed by a reasonable and prudent agent in the industry, it being
understood that the Agent shall not have responsibility for taking any
necessary steps to preserve rights against any parties with respect to any
of the Collateral.
10. APPLICATION OF PROCEEDS. Upon the occurrence and during the
continuance of an Event of Default, any payments in respect of the Secured
Obligations and any proceeds of the Collateral, when received by the Agent or
any of the Lenders in cash or its equivalent, will be applied in reduction of
the Secured Obligations in the order set forth in SECTION 3.15(b) of the Credit
Agreement, and each Obligor irrevocably waives the right to direct the
application of such payments and proceeds and acknowledges and agrees that the
Agent shall have the continuing and exclusive right to apply and reapply any and
all such payments and proceeds in the Agent's sole discretion, notwithstanding
any entry to the contrary upon any of its books and records.
11. COSTS OF COUNSEL. If at any time hereafter, whether upon the
occurrence of an Event of Default or not, the Agent employs counsel to prepare
or consider amendments, waivers or consents with respect to this Security
Agreement, or to take action or make a response in or with respect to any legal
or arbitral proceeding relating to this Security Agreement or relating to the
Collateral, or to protect the Collateral or exercise any rights or remedies
under this Security Agreement or with respect to the Collateral, then the
Obligors agree to promptly pay upon demand any and all such reasonable
documented costs and expenses of the Agent or the Lenders, all of which costs
and expenses shall constitute Secured Obligations hereunder.
12. CONTINUING AGREEMENT.
(a) This Security Agreement shall be a continuing agreement in every
respect and shall remain in full force and effect so long as any of the
Secured Obligations remain outstanding or any Credit Document or Hedging
Agreement is in effect or any Letter of Credit shall remain outstanding,
and until all of the Commitments thereunder shall have terminated (other
than any obligations with respect to the indemnities and the
representations and warranties set forth in the Credit Documents). Upon
such payment and termination, this Security Agreement shall be
automatically terminated and the Agent and the Lenders shall, upon the
request and at the expense of the Obligors, forthwith release all of its
liens and security interests hereunder and shall execute and deliver all
UCC termination statements and/or other documents reasonably requested by
the
129
Obligors evidencing such termination. Notwithstanding the foregoing all
releases and indemnities provided hereunder shall survive termination of
this Security Agreement.
(b) This Security Agreement shall continue to be effective or be
automatically reinstated, as the case may be, if at any time payment, in
whole or in part, of any of the Secured Obligations is rescinded or must
otherwise be restored or returned by the Agent or any Lender as a
preference, fraudulent conveyance or otherwise under any bankruptcy,
insolvency or similar law, all as though such payment had not been made;
provided that in the event payment of all or any part of the Secured
Obligations is rescinded or must be restored or returned, all reasonable
costs and expenses (including without limitation any reasonable legal fees
and disbursements) incurred by the Agent or any Lender in defending and
enforcing such reinstatement shall be deemed to be included as a part of
the Secured Obligations.
13. AMENDMENTS; WAIVERS; MODIFICATIONS. This Security Agreement and the
provisions hereof may not be amended, waived, modified, changed, discharged or
terminated except as set forth in SECTION 11.6 of the Credit Agreement.
14. SUCCESSORS IN INTEREST. This Security Agreement shall create a
continuing security interest in the Collateral and shall be binding upon each
Obligor, its successors and assigns and shall inure, together with the rights
and remedies of the Agent and the Lenders hereunder, to the benefit of the Agent
and the Lenders and their successors and permitted assigns; PROVIDED, HOWEVER,
that none of the Obligors may assign its rights or delegate its duties hereunder
without the prior written consent of each Lender or the Required Lenders, as
required by the Credit Agreement. To the fullest extent permitted by law, each
Obligor hereby releases the Agent and each Lender, and its successors and
assigns, from any liability for any act or omission relating to this Security
Agreement or the Collateral, except for any liability arising from the gross
negligence or willful misconduct of the Agent, or such Lender, or its officers,
employees or agents.
15. NOTICES. All notices required or permitted to be given under this
Security Agreement shall be in conformance with SECTION 11.1 of the Credit
Agreement.
16. COUNTERPARTS. This Security Agreement may be executed in any number of
counterparts, each of which where so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Security Agreement to produce or
account for more than one such counterpart.
17. HEADINGS. The headings of the sections and subsections hereof are
provided for convenience only and shall not in any way affect the meaning or
construction of any provision of this Security Agreement.
18. GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE.
(a) THIS SECURITY AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE
130
STATE OF NORTH CAROLINA. Any legal action or proceeding with respect to
this Security Agreement may be brought in the courts of the State of North
Carolina, or of the United States for the Western District of North
Carolina, and, by execution and delivery of this Security Agreement, each
Obligor hereby irrevocably accepts for itself and in respect of its
property, generally and unconditionally, the jurisdiction of such courts.
Each Obligor further irrevocably consents to the service of process out of
any of the aforementioned courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage
prepaid, to it at the address for notices pursuant to SECTION 11.1 of the
Credit Agreement, such service to become effective 30 days after such
mailing. Nothing herein shall affect the right of the Agent to serve
process in any other manner permitted by law or to commence legal
proceedings or to otherwise proceed against any Obligor in any other
jurisdiction.
(b) Each Obligor hereby irrevocably waives any objection which it
may now or hereafter have to the laying of venue of any of the aforesaid
actions or proceedings arising out of or in connection with this Security
Agreement brought in the courts referred to in subsection (a) hereof and
hereby further irrevocably waives and agrees not to plead or claim in any
such court that any such action or proceeding brought in any such court
has been brought in an inconvenient forum.
19. WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH
OF THE PARTIES TO THIS SECURITY AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS SECURITY AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
20. SEVERABILITY. If any provision of any of the Security Agreement is
determined to be illegal, invalid or unenforceable, such provision shall be
fully severable and the remaining provisions shall remain in full force and
effect and shall be construed without giving effect to the illegal, invalid or
unenforceable provisions.
21. ENTIRETY. This Security Agreement, the other Credit Documents and the
Hedging Agreements represent the entire agreement of the parties hereto and
thereto, and supersede all prior agreements and understandings, oral or written,
if any, including any commitment letters or correspondence relating to the
Credit Documents, the Hedging Agreements or the transactions contemplated herein
and therein.
22. SURVIVAL. All representations and warranties of the Obligors hereunder
shall survive the execution and delivery of this Security Agreement, the other
Credit Documents and the Hedging Agreements, the delivery of the Notes and the
making of the Loans and the issuance of the Letters of Credit under the Credit
Agreement.
23. OTHER SECURITY. To the extent that any of the Secured Obligations are
now or hereafter secured by property other than the Collateral (including,
without limitation, real property and securities owned by an Obligor), or by a
guarantee, endorsement or property of any other Person, then the Agent
131
and the Lenders shall have the right to proceed against such other property,
guarantee or endorsement upon the occurrence of any Event of Default, and the
Agent and the Lenders have the right, in their sole discretion, to determine
which rights, security, liens, security interests or remedies the Agent and the
Lenders shall at any time pursue, relinquish, subordinate, modify or take with
respect thereto, without in any way modifying or affecting any of them or any of
the Agent's and the Lenders' rights or the Secured Obligations under this
Security Agreement, under any other of the Credit Documents or under any Hedging
Agreement.
24. JOINT AND SEVERAL OBLIGATIONS OF OBLIGORS.
(a) Each of the Obligors is accepting joint and several liability
hereunder in consideration of the financial accommodation to be provided
by the Lenders under the Credit Agreement, for the mutual benefit,
directly and indirectly, of each of the Obligors and in consideration of
the undertakings of each of the Obligors to accept joint and several
liability for the obligations of each of them.
(b) Each of the Obligors jointly and severally hereby irrevocably
and unconditionally accepts, not merely as a surety but also as a
co-debtor, joint and several liability with the other Obligors with
respect to the payment and performance of all of the Secured Obligations
arising under this Security Agreement, the other Credit Documents and the
Hedging Agreements, it being the intention of the parties hereto that all
the Obligations shall be the joint and several obligations of each of the
Obligors without preferences or distinction among them.
(c) Notwithstanding any provision to the contrary contained herein
or in any other of the Credit Documents, to the extent the obligations of
a Guarantor shall be adjudicated to be invalid or unenforceable for any
reason (including, without limitation, because of any applicable state or
federal law relating to fraudulent conveyances or transfers) then the
obligations of each Guarantor hereunder shall be limited to the maximum
amount that is permissible under applicable law (whether federal or state
and including, without limitation, the Bankruptcy Code).
25. RIGHTS OF REQUIRED LENDERS. All rights of the Agent hereunder, if
not exercised by the Agent, may be exercised by the Required Lenders.
[remainder of page intentionally left blank]
132
Each of the parties hereto has caused a counterpart of this Security
Agreement to be duly executed and delivered as of the date first above written.
BORROWER: XXXXXXX INDUSTRIES INC.,
--------- a [DELAWARE] corporation
By: _______________________________
Title: ____________________________
GUARANTORS:
----------- ___________________________________
By: _______________________________
Name: _____________________________
Title: ____________________________
___________________________________
By: _______________________________
Name: _____________________________
Title: ____________________________
___________________________________
By: _______________________________
Name: _____________________________
Title: ____________________________
Accepted and agreed to in Charlotte, North Carolina as of the date first
above written.
FIRST UNION NATIONAL BANK,
Agent
By: _______________________________
Name: _____________________________
Title: ____________________________
133
SCHEDULE 5(f)(i)
NOTICE
OF
GRANT OF SECURITY INTEREST
IN
COPYRIGHTS
United States Copyright Office
Gentlemen:
Please be advised that pursuant to the Security Agreement dated as of July
2, 1998 (as the same may be amended, modified, extended or restated from time to
time, the "SECURITY AGREEMENT") by and among the Obligors party thereto (each an
"OBLIGOR" and collectively, the "OBLIGORS") and First Union National Bank, as
Agent (the "AGENT") for the lenders referenced therein (the "LENDERS"), the
undersigned Obligor has granted a continuing security interest in and continuing
lien upon, the copyrights and copyright applications shown below to the Agent
for the ratable benefit of the Lenders:
COPYRIGHTS
Date of
Copyright No. Description of Copyright Copyright
------------- ------------------------ ---------
COPYRIGHT APPLICATIONS
Copyright Description of Copyright Date of Copyright
Applications No. Applied for Applications
---------------- ----------- ------------
134
The Obligors and the Agent, on behalf of the Lenders, hereby acknowledge
and agree that the security interest in the foregoing copyrights and copyright
applications (i) may only be terminated in accordance with the terms of the
Security Agreement and (ii) is not to be construed as an assignment of any
copyright or copyright application.
Very truly yours,
__________________________________
[Obligor]
By: ______________________________
Name: ____________________________
Title: ___________________________
Acknowledged and Accepted:
FIRST UNION NATIONAL BANK,
as Agent
By: ___________________________
Name: _________________________
Title: ________________________
135
SCHEDULE 5(f)(ii)
NOTICE
OF
GRANT OF SECURITY INTEREST
IN
PATENTS
United States Patent and Trademark Office
Gentlemen:
Please be advised that pursuant to the Security Agreement dated as of July
2, 1998 (the "SECURITY AGREEMENT") by and among the Obligors party thereto (each
an "OBLIGOR" and collectively, the "OBLIGORS") and First Union National Bank, as
Agent (the "AGENT") for the lenders referenced therein (the "Lenders"), the
undersigned Obligor has granted a continuing security interest in and continuing
lien upon, the patents and patent applications shown below to the Agent for the
ratable benefit of the Lenders:
PATENTS
Description of Patent Date of
Patent No. Item Patent
---------- -------------------- ------
PATENT APPLICATIONS
Patent Description of Patent Date of Patent
Applications No. Applied For Applications
---------------- ----------- ------------
136
The Obligors and the Agent, on behalf of the Lenders, hereby acknowledge
and agree that the security interest in the foregoing patents and patent
applications (i) may only be terminated in accordance with the terms of the
Security Agreement and (ii) is not to be construed as an assignment of any
patent or patent application.
Very truly yours,
__________________________________
[Obligor]
By: ______________________________
Name: ____________________________
Title: ___________________________
Acknowledged and Accepted:
FIRST UNION NATIONAL BANK,
as Agent
By: _____________________________
Name: ___________________________
Title: __________________________
137
SCHEDULE 5(f)(iii)
NOTICE
OF
GRANT OF SECURITY INTEREST
IN
TRADEMARKS
United States Patent and Trademark Office
Gentlemen:
Please be advised that pursuant to the Security Agreement dated as of July
2, 1998 (the "SECURITY AGREEMENT") by and among the Obligors party thereto (each
an "OBLIGOR" and collectively, the "OBLIGORS") and First Union National Bank, as
Agent (the "AGENT") for the lenders referenced therein (the "Lenders"), the
undersigned Obligor has granted a continuing security interest in and continuing
lien upon, the trademarks and trademark applications shown below to the Agent
for the ratable benefit of the Lenders:
TRADEMARKS
Description of Trademark Date of
Trademark No. Item Trademark
------------- ---- ---------
TRADEMARK APPLICATIONS
Trademark Description of Trademark Date of Trademark
Applications No. Applied For Applications
---------------- ----------- ------------
138
The Obligors and the Agent, on behalf of the Lenders, hereby acknowledge
and agree that the security interest in the foregoing trademarks and trademark
applications (i) may only be terminated in accordance with the terms of the
Security Agreement and (ii) is not to be construed as an assignment of any
trademark or trademark application.
Very truly yours,
__________________________________
[Obligor]
By: ______________________________
Name: ____________________________
Title: ___________________________
Acknowledged and Accepted:
FIRST UNION NATIONAL BANK,
as Agent
By: ___________________________
Name: _________________________
Title: ________________________
139
EXHIBIT 2.1(b)(i)
FORM OF NOTICE OF BORROWING
First Union National Bank,
as Agent for the Lenders
Xxx Xxxxx Xxxxx Xxxxxx, XX-0000
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attn: Syndication Agency Services
Ladies and Gentlemen:
The undersigned, XXXXXXX INDUSTRIES INC. (the "BORROWER"), refers to the
Credit Agreement dated as of July 2, 1998 (as amended, modified, restated or
supplemented from time to time, the "CREDIT AGREEMENT"), among the Borrower, the
Guarantors, the Lenders and First Union National Bank, as Agent. Capitalized
terms used herein and not otherwise defined herein shall have the meanings
assigned to such terms in the Credit Agreement. The Borrower hereby gives notice
pursuant to Section 3.2 of the Credit Agreement that it requests a Revolving
Loan advance under the Credit Agreement, and in connection therewith sets forth
below the terms on which such Loan advance is requested to be made:
(A) Date of Borrowing (which is a Business Day) _______________________
(B) Principal Amount of Borrowing _______________________
(C) Interest rate basis _______________________
(D) Interest Period and the last day thereof _______________________
In accordance with the requirements of Section 5.2, the Borrower hereby
reaffirms the representations and warranties set forth in the Credit Agreement
as provided in subsection (b) of such Section, and confirms that the matters
referenced in subsections (b), (c) and (d) of such Section, are true and
correct.
XXXXXXX INDUSTRIES INC.
By: _____________________
Name: ___________________
Title: __________________
140
EXHIBIT 2.1(b)(iii)
NOTICE OF ACCOUNT DESIGNATION
Dated July 2, 1998
First Union National Bank
Xxx Xxxxx Xxxxx Xxxxxx, XX-0000
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attn: Syndication Agency Services
Ladies and Gentlemen:
This Notice of Account Designation is delivered to you by Xxxxxxx
Industries Inc. (the "Company"), a corporation organized under the laws of
Delaware, under Section 2.1 of the Credit Agreement dated as of July 2, 1998 (as
amended, restated or otherwise modified, the "Credit Agreement") by and among
the Borrower party thereto, the Guarantors party thereto, the Lenders party
thereto and First Union National Bank, as Agent.
The Agent is hereby authorized to disburse all Loan proceeds into the
following account, unless the Company shall designate, in writing to the Agent,
one or more other accounts:
Name of Bank:____________________________________
ABA Routing Number:______________________________
Account Number:__________________________________
Notwithstanding the foregoing, on the closing date of the Credit
Agreement, funds borrowed under the Credit Agreement shall be sent to the
institutions and/or persons designated on the attached payment instructions.
IN WITNESS WHEREOF, the undersigned has executed this Notice of Account
Designation this 2nd day of July, 1998
[CORPORATE SEAL] Xxxxxxx Industries Inc.
By:_____________________________
Name:
Title:
141
EXHIBIT 2.1(e)
FORM OF REVOLVING NOTE
$_________________ July 2, 1998
FOR VALUE RECEIVED, XXXXXXX INDUSTRIES INC., a [DELAWARE] corporation (the
"BORROWER"), hereby promises to pay to the order of __________________________,
its successors and assigns (the "LENDER"), at the office of First Union National
Bank, as Agent (the "AGENT"), at ____________________, Charlotte, North Carolina
282__ (or at such other place or places as the holder hereof may designate), at
the times set forth in the Credit Agreement dated as of the date hereof among
the Borrower, the Guarantors, the Lenders and the Agent (as it may be as
amended, modified, restated or supplemented from time to time, the "CREDIT
AGREEMENT"; all capitalized terms not otherwise defined herein shall have the
meanings set forth in the Credit Agreement), but in no event later than the
Maturity Date, in Dollars and in immediately available funds, the principal
amount of ________________________ DOLLARS ($____________) or, if less than such
principal amount, the aggregate unpaid principal amount of all Revolving Loans
made by the Lender to the Borrower pursuant to the Credit Agreement, and to pay
interest from the date hereof on the unpaid principal amount hereof, in like
money, at said office, on the dates and at the rates selected in accordance with
Section 2.1(d) of the Credit Agreement.
Upon the occurrence and during the continuance of an Event of Default, the
balance outstanding hereunder shall bear interest as provided in Section 3.1 of
the Credit Agreement. Further, in the event the payment of all sums due
hereunder is accelerated under the terms of the Credit Agreement, this Note, and
all other indebtedness of the Borrower to the Lender shall become immediately
due and payable, without presentment, demand, protest or notice of any kind, all
of which are hereby waived by the Borrower.
In the event this Note is not paid when due at any stated or accelerated
maturity, the Borrower agrees to pay, in addition to the principal and interest,
all costs of collection, including reasonable attorneys' fees.
All borrowings evidenced by this Note and all payments and prepayments of
the principal hereof and interest hereon and the respective dates thereof shall
be endorsed by the holder hereof on SCHEDULE A attached hereto and incorporated
herein by reference, or on a continuation thereof which shall be attached hereto
and made a part hereof; PROVIDED, HOWEVER, that any failure to endorse such
information on such schedule or continuation thereof shall not in any manner
affect the obligation of the Borrower to make payments of principal and interest
in accordance with the terms of this Note.
142
This Note and the Loans evidenced hereby may be transferred in whole or in
part only by registration of such transfer on the Register maintained by or on
behalf of the Borrower as provided in Section 11.3(c) of the Credit Agreement.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed
by its duly authorized officer as of the day and year first above written.
XXXXXXX INDUSTRIES INC.
By: __________________________
Name: ________________________
Title: _______________________
143
SCHEDULE A TO THE
REVOLVING NOTE
OF ______________
DATED July 2, 1998
Unpaid Name of
Type Principal Person
of Interest Payments Balance Making
Date Loan Period Principal Interof of Note Notation
---- ---- ------ --------- ------- ------- --------
144
EXHIBIT 3.2
FORM OF NOTICE OF EXTENSION/CONVERSION
First Union National Bank,
as Agent for the Lenders
______________________
______________________
______________________
Charlotte, North Carolina 282__
Attention: _____________
Ladies and Gentlemen:
The undersigned, XXXXXXX INDUSTRIES INC. (the "BORROWER"), refers to the
Credit Agreement dated as of July 2, 1998 (as amended, modified, restated or
supplemented from time to time, the "CREDIT AGREEMENT"), among the Borrower, the
Guarantors, the Lenders and First Union National Bank, as Agent. Capitalized
terms used herein and not otherwise defined herein shall have the meanings
assigned to such terms in the Credit Agreement. The Borrower hereby gives notice
pursuant to Section 3.2 of the Credit Agreement that it requests an extension or
conversion of a Revolving Loan outstanding under the Credit Agreement, and in
connection therewith sets forth below the terms on which such extension or
conversion is requested to be made:
(A) Date of Extension or Conversion
(which is the last day of the
the applicable Interest Period) _______________________
(B) Principal Amount of Extension or Conversion _______________________
(C) Interest rate basis _______________________
(D) Interest Period and the last day thereof _______________________
In accordance with the requirements of Section 5.2, the Borrower hereby
reaffirms the representations and warranties set forth in the Credit Agreement
as provided in subsection (b) of such Section, and confirms that the matters
referenced in subsections (c), (d), (e) and (f) of such Section, are true and
correct.
XXXXXXX INDUSTRIES INC.
By: __________________________
Name: ________________________
Title: _______________________
145
EXHIBIT 7.1(d)
FORM OF OFFICER'S COMPLIANCE CERTIFICATE
For the fiscal quarter ended _________________, 19___.
I, ______________________, [Title] of XXXXXXX INDUSTRIES INC. (the
"BORROWER") hereby certify that, to the best of my knowledge and belief, with
respect to that certain Credit Agreement dated as of July 2, 1998 (as amended,
modified, restated or supplemented from time to time, the "CREDIT AGREEMENT";
all of the defined terms in the Credit Agreement are incorporated herein by
reference) among the Borrower, the Guarantors, the Lenders and First Union
National Bank, as Agent:
a. The company-prepared financial statements which accompany this
certificate are true and correct in all material respects and have
been prepared in accordance with GAAP applied on a consistent basis,
subject to changes resulting from normal year-end audit adjustments.
b. Since ___________ (the date of the last similar certification, or,
if none, the Closing Date) no Default or Event of Default has
occurred under the Credit Agreement; and
Delivered herewith are detailed calculations demonstrating compliance by
the Credit Parties with the financial covenants contained in Section 7.11 of the
Credit Agreement as of the end of the fiscal period referred to above.
This ______ day of ___________, 19__.
XXXXXXX INDUSTRIES INC.
By: ___________________________
Name: _________________________
Title: ________________________
146
ATTACHMENT TO OFFICER'S CERTIFICATE
COMPUTATION OF FINANCIAL COVENANTS
147
EXHIBIT 7.12
FORM OF JOINDER AGREEMENT
THIS JOINDER AGREEMENT (the "AGREEMENT"), dated as of _____________, 19__,
is by and between _____________________, a ___________________ (the
"SUBSIDIARY"), and FIRST UNION NATIONAL BANK, in its capacity as Agent under
that certain Credit Agreement (as it may be amended, modified, restated or
supplemented from time to time, the "CREDIT AGREEMENT"), dated as of July 2,
1998, by and among XXXXXXX INDUSTRIES INC., a [DELAWARE] corporation (the
"BORROWER"), the Guarantors, the Lenders and First Union National Bank, as
Agent. All of the defined terms in the Credit Agreement are incorporated herein
by reference.
The Subsidiary is an Additional Credit Party, and, consequently, the
Credit Parties are required by Section 7.12 of the Credit Agreement to cause the
Subsidiary to become a "GUARANTOR".
Accordingly, the Subsidiary hereby agrees as follows with the Agent, for
the benefit of the Lenders:
1. The Subsidiary hereby acknowledges, agrees and confirms that, by its
execution of this Agreement, the Subsidiary will be deemed to be a party to the
Credit Agreement and a "Guarantor" for all purposes of the Credit Agreement, and
shall have all of the obligations of a Guarantor thereunder as if it had
executed the Credit Agreement. The Subsidiary hereby ratifies, as of the date
hereof, and agrees to be bound by, all of the terms, provisions and conditions
applicable to the Guarantors contained in the Credit Agreement. Without limiting
the generality of the foregoing terms of this paragraph 1, the Subsidiary hereby
(i) jointly and severally together with the other Guarantors, guarantees to each
Lender and the Agent, as provided in Section 4 of the Credit Agreement, the
prompt payment and performance of the Credit Party Obligations in full when due
(whether at stated maturity, as a mandatory prepayment, by acceleration or
otherwise) strictly in accordance with the terms thereof.
2. The Subsidiary hereby acknowledges, agrees and confirms that, by its
execution of this Agreement, the Subsidiary will be deemed to be a party to the
Security Agreement, and shall have all the obligations of an "Obligor" (as such
term is defined in the Security Agreement) thereunder as if it had executed the
Security Agreement. The Subsidiary hereby ratifies, as of the date hereof, and
agrees to be bound by, all of the terms, provisions and conditions contained in
the Security Agreement. Without limiting generality of the foregoing terms of
this paragraph 2, the Subsidiary hereby grants to the Agent, for the benefit of
the Lenders [and the Senior Noteholders], a continuing security interest in, and
a right of set off against any and all right, title and interest of the
Subsidiary in and to the Collateral (as such term is defined in Section 2 of the
Security Agreement) of the Subsidiary. The Subsidiary hereby represents and
warrants to the Agent that:
(i) The Subsidiary's chief executive office and chief place of
business are (and for the prior four months have been) located at the
locations set forth on SCHEDULE 1 attached hereto and the Subsidiary keeps
its books and records at such locations.
148
(ii) The type of Collateral owned by the Subsidiary and the
location of all Collateral owned by the Subsidiary is as shown on SCHEDULE
2 attached hereto.
(iii) The Subsidiary's legal name is as shown in this Agreement and
the Subsidiary has not in the past four months changed its name, been
party to a merger, consolidation or other change in structure or used any
tradename except as set forth in SCHEDULE 3 attached hereto.
(iv) The patents and trademarks listed on SCHEDULE 4 attached
hereto constitute all of the registrations and applications for the
patents and trademarks owned by the Subsidiary.
3. The Subsidiary hereby acknowledges, agrees and confirms that, by its
execution of this Agreement, the Subsidiary will be deemed to be a party to the
Pledge Agreement, and shall have all the obligations of a "Pledgor" thereunder
as if it had executed the Pledge Agreement. The Subsidiary hereby ratifies, as
of the date hereof, and agrees to be bound by, all the terms, provisions and
conditions contained in the Pledge Agreement. Without limiting the generality of
the foregoing terms of this paragraph 3, the Subsidiary hereby pledges and
assigns to the Agent, for the benefit of the Lenders [and the Senior
Noteholders], and grants to the Agent, for the benefit of the Lenders [and the
Senior Noteholders], a continuing security interest in any and all right, title
and interest of the Subsidiary in and to Pledged Shares (as such term is defined
in Section 2 of the Pledge Agreement) listed on SCHEDULE 5 attached hereto and
the other Pledged Collateral (as such term is defined in Section 2 of the Pledge
Agreement).
4. If the Subsidiary is not incorporated or organized under the laws of
any State of the United States or the District of Columbia, then the Subsidiary
hereby agrees as follows:
(i) (A) Without limiting the generality of subsections (a) and (b)
of Section 11.10 of the Credit Agreement, the Subsidiary agrees that any
controversy or claim with respect to it arising out of or relating to the
Credit Agreement or the other Credit Documents may, at the option of the
Agent and the Lenders, be settled immediately by submitting the same to
binding arbitration in the City of Charlotte, North Carolina (or such
other place as the parties may agree) in accordance with the Commercial
Arbitration Rules then obtaining of the American Arbitration Association.
Upon the request and submission of any controversy or claim for
arbitration hereunder, the Agent shall give the Subsidiary not less than
45 days written notice of the request for arbitration, the nature of the
controversy or claim, and the time and place set for arbitration. The
Subsidiary agrees that such notice is reasonable to enable it sufficient
time to prepare and present its case before the arbitration panel.
Judgment on the award rendered by the arbitration panel may be entered in
any court in which any action could have been brought or maintained
pursuant to subparagraph (ii) below, including without limitation any
court of the State of North Carolina or any Federal court sitting in the
State of North Carolina. The expenses of arbitration shall be paid by the
Subsidiary.
(B) The provisions of subparagraph (A) above are intended to
comply with the requirements of the Convention on the Recognition and
Enforcement of Foreign Arbitral Awards (the "Convention"). To the extent
that any provisions of such subparagraph (A) are not
149
consistent with or fail to conform to the requirements set out in the
Convention, such subparagraph (A) shall be deemed amended to conform to
the requirements of the Convention.
(C) The Subsidiary hereby specifically consents and submits to the
jurisdiction of the courts of the State of North Carolina and courts of
the United States located in the State of North Carolina for purposes of
entry of a judgment or arbitration award entered by the arbitration panel.
(D) The Subsidiary hereby irrevocably appoints ________________,
with an address on the date hereof at __________________________________
(the "North Carolina Process Agent"), as process agent in its name, place
and stead to receive and forward service of any and all writs, summonses
and other legal process in any suit, action or proceeding brought in the
State of North Carolina, agrees that such service in any such suit, action
or proceeding may be made upon the North Carolina Process Agent and agrees
to take all such action as may be necessary to continue said appointment
in full force and effect or to appoint another agent so that the
Subsidiary will at all times have an agent in the State of North Carolina
for service of process for the above purposes.
(ii) The guarantee of the Subsidiary pursuant to the Credit
Agreement is (in part) an international transaction in which payment of
dollars in Charlotte, North Carolina, is of the essence, and dollars shall
be the currency of account in all events. The payment obligation of the
Subsidiary shall not be discharged by an amount paid in another currency
or in another place, whether pursuant to a judgment or otherwise, to the
extent that the amount so paid on prompt conversion to dollars and
transfer to Charlotte, North Carolina, under normal banking procedures
does not yield the amount of dollars in Charlotte, North Carolina due
hereunder. In the event that any payment by the Subsidiary, whether
pursuant to a judgment or otherwise, upon conversion and transfer does not
result in payment of such amount of dollars in Charlotte, North Carolina,
the Agent and the Lenders shall have a separate cause of action against
the Subsidiary for the additional amount necessary to yield the amount due
and owing to the Agent and the Lenders.]
5. The address of the Subsidiary for purposes of all notices and other
communications is ____________________, ____________________________, Attention
of ______________ (Facsimile No. ____________).
6. The Subsidiary hereby waives acceptance by the Agent and the Lenders
of the guaranty by the Subsidiary under Section 4 of the Credit Agreement upon
the execution of this Agreement by the Subsidiary.
7. This Agreement may be executed in two or more counterparts, each of
which shall constitute an original but all of which when taken together shall
constitute one contract.
8. This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the State of North Carolina.
150
IN WITNESS WHEREOF, the Subsidiary has caused this Joinder Agreement to be
duly executed by its authorized officers, and the Agent, for the benefit of the
Lenders, has caused the same to be accepted by its authorized officer, as of the
day and year first above written.
[SUBSIDIARY]
By:_____________________________________
Name: __________________________________
Title: _________________________________
Acknowledged and accepted:
FIRST UNION NATIONAL BANK, as Agent
By:_____________________________________
Name: __________________________________
Title: _________________________________
151
SCHEDULE 1
TO FORM OF JOINDER AGREEMENT
[Chief Executive Office and
Chief Place of Business of Subsidiary]
152
SCHEDULE 2
TO FORM OF JOINDER AGREEMENT
[Types and Locations of Collateral]
153
SCHEDULE 3
TO FORM OF JOINDER AGREEMENT
[Tradenames]
154
SCHEDULE 4
TO FORM OF JOINDER AGREEMENT
[Patents and Trademarks]
155
SCHEDULE 5
TO FORM OF JOINDER AGREEMENT
[Pledged Shares]
156
EXHIBIT 11.3(b)
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement dated as of July 2, 1998, as
amended and modified from time to time thereafter (the "CREDIT Agreement") among
Xxxxxxx Industries Inc., the other Credit Parties party thereto, the Lenders
party thereto and First Union National Bank, as Agent. Terms defined in the
Credit Agreement are used herein with the same meanings.
The "Assignor" and the "Assignee" referred to on Schedule 1 agree as
follows:
1. The Assignor hereby sells and assigns to the Assignee, without
recourse and without representation or warranty except as expressly set forth
herein, and the Assignee hereby purchases and assumes from the Assignor, an
interest in and to the Assignor's rights and obligations under the Credit
Agreement and the other Credit Documents as of the date hereof equal to the
percentage interest specified on Schedule 1 of all outstanding rights and
obligations under the Credit Agreement and the other Credit Documents. After
giving effect to such sale and assignment, the Assignee's Commitment and the
amount of the Loans owing to the Assignee will be as set forth on Schedule 1.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit Documents
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Documents or any other instrument or document furnished
pursuant thereto; (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Credit Party or
the performance or observance by any Credit Party of any of its obligations
under the Credit Documents or any other instrument or document furnished
pursuant thereto; and (iv) attaches the Notes held by the Assignor and requests
that the Agent exchange such Notes for new Notes payable to the order of the
Assignee in an amount equal to the Commitment assumed by the Assignee pursuant
hereto and to the Assignor in an amount equal to the Commitment retained by the
Assignor, if any, as specified on Schedule 1.
157
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 7.1 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will, independently and without
reliance upon the Agent, the Assignor or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement; (iii) confirms that it is an Eligible Assignee; (iv) appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Credit Agreement as are delegated to the
Agent by the terms thereof, together with such powers and discretion as are
reasonably incidental thereto; (v) agrees that it will perform in accordance
with their terms all of the obligations that by the terms of the Credit
Agreement are required to be performed by it as a Lender; and (vi) attaches any
U.S. Internal Revenue Service or other forms required under Section 3.11.
4. Following the execution of this Assignment and Acceptance, it will
be delivered to the Agent for acceptance and recording by the Agent. The
effective date for this Assignment and Acceptance (the "EFFECTIVE Date") shall
be the date of acceptance hereof by the Agent, unless otherwise specified on
Schedule 1.
5. Upon such acceptance and recording by the Agent, as of the Effective
Date, (i) the Assignee shall be a party to the Credit Agreement and, to the
extent provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
6. Upon such acceptance and recording by the Agent, from and after the
Effective Date, the Agent shall make all payments under the Credit Agreement and
the Notes in respect of the interest assigned hereby (including, without
limitation, all payments of principal, interest and commitment fees with respect
thereto) to the Assignee. The Assignor and Assignee shall make all appropriate
adjustments in payments under the Credit Agreement and the Notes for periods
prior to the Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and construed
in accordance with, the laws of the State of North Carolina.
8. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of Schedule 1 to this Assignment and Acceptance by telecopier shall
be effective as delivery of a manually executed counterpart of this Assignment
and Acceptance.
158
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Assignment and Acceptance to be executed by their officers thereunto duly
authorized as of the date hereof.
____________________, as Assignor
By:_____________________________________
Name: __________________________________
Title: _________________________________
_____________________, as Assignee
By:_____________________________________
Name: __________________________________
Title: _________________________________
Notice address of Assignee:
[Assignee]
Attn: __________________________________
Telephone: (___) _______________________
Telecopy: (___) ________________________
CONSENTED TO:
FIRST UNION NATIONAL BANK, *
as Agent
By:_____________________________________
Name: __________________________________
Title: _________________________________
XXXXXXX INDUSTRIES INC.
By:_____________________________________
Name: __________________________________
Title: _________________________________
--------
* Required if the Assignee is an Eligible Assignee solely by reason of
clause (iii) of the definition of "Eligible Assignee."
159
SCHEDULE 1
to
ASSIGNMENT AND ACCEPTANCE
(a) Date of Assignment:
(b) Legal Name of Assignor:
(c) Legal Name of Assignee:
(d) Effective Date of Assignment :
(e) Revolving Commitment Percentage Assigned
(expressed as a percentage set forth to at
least 8 decimals) %
(f) Revolving Commitment Percentage of Assignee
after giving effect to this Assignment and
Acceptance as of the Effective Date (set forth
to at least 8 decimals) %
(g) Revolving Commitment Percentage of Assignor
after giving effect to this Assignment and
Acceptance as of the Effective Date (set forth
to at least 8 decimals) %
(h) Revolving Committed Amount as of Effective Date $_____________
(i) Dollar Amount of Assignor's Revolving Commitment
Percentage as of the Effective Date (the amount
set forth in (h) multiplied by the percentage
set forth in (g)) $_____________
(j) Dollar Amount of Assignee's Revolving Commitment
Percentage as of the Effective Date (the amount
set forth in (h) multiplied by the percentage
set forth in (f)) $_____________
