================================================================================
$100,000,000
AMENDED AND RESTATED
REVOLVING CREDIT AND TERM LOAN AGREEMENT
dated as of October 29, 1999
by and among
XXXXXX XXXXXX, INC.
as Borrower,
THE LENDERS LISTED ON THE SIGNATURE PAGES HEREOF
as Lenders,
FIRST UNION NATIONAL BANK
as Lead Arranger and Administrative Agent
and
FLEET BANK, N.A.,
as Documentation Agent
================================================================================
TABLE OF CONTENTS
SECTION 1. DEFINITIONS AND PRINCIPLES OF CONSTRUCTION......................................1
1.01 Definitions............................................................1
1.02 Principles of Construction............................................13
SECTION 2. AMOUNT AND TERMS OF CREDIT.....................................................13
2.01 Revolving Credit......................................................13
2.02 Revolving Credit Payment and Maturity; Extension of Maturity..........14
2.03 Procedure for Revolving Credit Loan Borrowings........................15
2.04 Reduction of Commitment...............................................16
2.05 Term Loans............................................................16
2.06 Repayment and Maturity of Term Loans..................................16
2.07 Interest..............................................................17
2.08 Conversions and Continuations.........................................17
2.09 Letters of Credit.....................................................18
2.10 Letter of Credit Requests.............................................19
2.11 Letter of Credit Participations.......................................19
2.12 Agreement to Repay Letter of Credit Drawings..........................20
2.13 Indemnification; Nature of Agent's Duties.............................21
2.14 Increased Costs; Illegality; Capital Adequacy; Funding Losses.........22
2.15 Computation...........................................................24
SECTION 3. FEES...........................................................................24
3.01 Upfront Fees..........................................................24
3.02 Commitment Fee........................................................24
3.03 Letter of Credit Fee..................................................24
3.04 Letter of Credit Processing Fee.......................................25
SECTION 4. PREPAYMENTS AND PAYMENTS GENERALLY.............................................25
4.01 Voluntary Prepayments.................................................25
4.02 Mandatory Prepayments.................................................25
4.03 Application of Mandatory Prepayments..................................26
4.04 General Provisions as to Payments.....................................26
4.05 Net Payments..........................................................26
4.06 Debiting of Account...................................................26
SECTION 5. CONDITIONS.....................................................................27
5.01 Documents Required for Initial Advance................................27
5.02 Requirements for Any Advance and Issuance of Letter of Credit.........29
SECTION 6. REPRESENTATIONS AND WARRANTIES.................................................29
6.01 Organization; Authority...............................................29
6.02 Use of Proceeds; Margin Regulation....................................30
6.03 Specific Financial Statements.........................................31
6.04 Burdensome Agreements.................................................31
6.05 Suits.................................................................31
6.06 Defaults..............................................................31
6.07 ERISA.................................................................31
6.08 Tax Returns and Taxes.................................................31
-i-
AMENDED AND RESTATED REVOLVING CREDIT AND TERM
LOAN AGREEMENT
THIS AMENDED AND RESTATED REVOLVING CREDIT AND TERM LOAN AGREEMENT is
made as of this 29th day of October, 1999, by and among XXXXXX XXXXXX, INC. (the
Borrower), the LENDERS listed on the signature pages hereof FIRST UNION NATIONAL
BANK, as Lead Arranger and Administrative Agent (in such capacity the Agent) and
FLEET BANK, N.A., as Documentation Agent (in such capacity the Documentation
Agent).
WHEREAS, the Borrower has certain credit accommodations available to
it pursuant to that certain Credit Agreement, dated as of December 19, 1996, by
and among the Borrower, the Agent and the lender parties thereto (as amended
from time to time prior to the date hereof, the Existing Credit Agreement) and
desires to increase, extend and otherwise amend and restate said accommodations,
and in connection therewith refinance the outstanding balances thereunder, with
certain of the credit facilities provided herein; and
WHEREAS, for administrative convenience and to properly reflect the
increase, extension, amendment and restatement of the credit accommodations
provided under the Existing Credit Agreement with the credit facilities herein
provided, the outstanding balances of all "Revolving Credit Loans" under the
Existing Credit Agreement shall be refinanced as Revolving Credit Loans
hereunder and any "Letters of Credit" issued under the Existing Credit Agreement
and outstanding as of the date hereof, shall be deemed to have been issued
hereunder in accordance with Section 2.09(b) hereof; and
WHEREAS, the Borrower has entered into that certain Asset Purchase
Agreement, dated as of August 30, 1999 (the Asset Purchase Agreement) with
Pediatric Services of America, Inc., a Delaware corporation (PSA) and
Paramedical Services of America, Inc., a California corporation (PSA Sub, PSA
and PSA Sub are collectively referred to as the PSA Group), pursuant to which
the Borrower shall acquire certain of the assets of the PSA Group; and in
connection therewith the Borrower desires to incur the term loans herein
provided to finance in part the costs of the Borrower related to the
transactions contemplated in the Asset Purchase Agreement; and
WHEREAS, subject to the terms and conditions herein set forth, the
Lenders are willing to (i) replace the credit facilities existing under the
Existing Credit Agreement with the Revolving Credit Facility herein provided and
(ii) make available to the Borrower the term loans described above pursuant to
the Term Loan Facility herein provided;
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and intending to be legally bound
hereby, the parties hereto agree as follows:
SECTION 1. DEFINITIONS AND PRINCIPLES OF CONSTRUCTION.
1.01 Definitions. Unless the context requires otherwise, the
following terms used throughout this Agreement shall have the meanings assigned
to such terms below (such meanings to be equally applicable to both the singular
and plural number of the terms defined):
Acquisition shall mean the purchase by the Borrower of certain of the
assets of the PSA Group in accordance with the terms and conditions set forth in
the Asset Purchase Agreement.
Acquisition Documents shall mean the Asset Purchase Agreement, each
of the documents, instruments, agreements, certificates, opinions and other
written information referred to in Article VII of the Asset Purchase Agreement,
and any other document, instrument agreement, certificate, opinions or
information provided or received by Borrower pursuant to the Asset Purchase
Agreement or otherwise in connection with the Acquisition.
Affiliate shall mean, as applied to any Person, any other Person that
directly or indirectly controls, is controlled by, or is under common control
with, that Person. For purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to vote ten percent (10%) or more of the securities or
other ownership interests having voting power for the election of directors (or
other persons performing similar functions) of such Person or otherwise to
direct or cause the direction of the management and policies of that Person,
whether through the ownership of voting securities or by contract or otherwise.
Agent shall mean First Union National Bank, in its capacity as lead
arranger and administrative agent for the Lenders hereunder, and its successors
in such capacity.
Agreement shall mean this Amended and Restated Revolving Credit and
Term Loan Agreement, as the same may be from time to time modified, amended
and/or supplemented.
Applicable Margin shall mean (A) with respect to Prime Rate Loans, 0
basis points (0.00%), (B) with respect to LIBOR Loans, plus 1371/2 basis points
(1.375%) and (C) as used to determine the commitment fee pursuant to Section
3.02 hereof, plus 25 basis points (.25%); subject, however, to adjustment in
accordance with the following pricing schedule determined by reference to the
Consolidated Funded Debt to EBITDA Ratio based on the results reported on the
then most recently received financial statements delivered by the Borrower
pursuant to Section 7.03(i) and (ii) hereof, as the case may be, calculated in
accordance with Section 8.16 hereof:
Level If Such Ratio Is: Applicable Margin for Applicable Margin for Applicable Margin
----- ----------------- --------------------- --------------------- -----------------
Prime Rate Loans LIBOR Loans for Commitment Fees
---------------- ----------- -------------------
I Equal to or less than plus 25 basis plus 175 basis points (1.75%) plus 25 basis points
- 2.75:1.00 but points (.25%) (.25%)
greater than 2.25:1.00
Equal to or less than 0 basis plus 137 1/2 basis points plus 25 basis points
II 2.25:1.00 but points (0.00%) (.25%)
than 1.75:1.00
III Equal to or less than minus 25 basis plus 100 basis points (1.00%) plus 18 3/4 basis
1.75:1.00 but greater points (.25%) points (.1875%)
than 1.25 to 1.00
2
IV Equal to or less minus 50 basis points plus 75 basis points (.75%) plus 12 1/2 basis
points than
(.50%)
1.25:.00
(.125%)
Adjustments, if any, to the Applicable Margin shall be made by the Agent
effective as of the tenth (10th) Business Days after receipt by the Agent and
the Lenders of the compliance certificate required pursuant to Section 7.04
hereof.
Notwithstanding the foregoing, (i) at all times during which there exists a
Default or Event of Default, the Applicable Margin (A) with respect to Prime
Rate Loans, and LIBOR Loans, shall be determined by reference to 2.07(a), and
(B) as used to determine the commitment fee pursuant to Section 3.02 hereof,
shall be plus 50 basis points (.50%) and (ii) if the Borrower shall fail to
provide the audited financial statements required pursuant to Section 7.03 (vi)
hereof, the Applicable Margins shall be set at the margins indicated at Level I
above and said margins shall continue to be in effect at that level until the
earlier to occur of (A) such time as said financial statements are furnished to
the Agent and the Lenders (B) delivery of unqualified audited financial
statements of the Borrower for fiscal year end 1999, which comport with the
requirements of Section 7.03(i) hereof.
Approved Subordinated Indebtedness shall mean Indebtedness of the
Borrower that (i) is subordinated on terms and conditions approved in writing by
the Lenders and (ii) does not constitute Guaranteed Indebtedness of the Borrower
or any Subsidiary or Affiliate of the Borrower.
Asset Purchase Agreement shall have the meaning assigned to such term
in the Recitals hereof.
Availability shall mean, at any particular time, the amount by which
the Maximum Available Revolving Credit Amount at such time exceeds the Revolving
Credit Obligations at such time.
Borrower's Equity Contribution shall mean the unfinanced portion of
the consideration payable to the PSA Group pursuant to Section 1.2(a) of the
Asset Purchase Agreement, to be paid by the Borrower out of available cash,
which in any event shall be not less than $10,000,000.
Business Day shall mean any day other than a Saturday, Sunday, or a
day on which the Agent and the Lenders are authorized or obligated by law or
executive order to be closed.
Capital Expenditures shall mean, with respect to any Person, without
duplication and for any period, the aggregate value attributed in accordance
with GAAP, to acquisitions during such period by such Person of any asset,
tangible or intangible, or replacements or substitutions therefor or additions
thereto which such Person treated as a non-current asset on such Person's
financial statements, including, without limitation, (y) the acquisition or
construction of assets having a useful life of more than one year, and (z)
assets acquired during such period in connection with Capitalized Leases.
3
Capitalized Lease shall mean any lease with respect to which the
obligation to pay rent or other amounts constitutes Capitalized Lease
Obligations.
Capitalized Lease Obligations shall mean obligations to pay rent or
other amounts under a lease of (or other agreement conveying the right to use)
real and/or personal property which obligations are required to be classified
and accounted for as capital leases on a balance sheet in accordance with GAAP.
Change of Control shall mean any one or more of the following: (i)
the acquisition by any Person, or two or more Persons acting in concert, of
beneficial ownership (within the meaning of Rule 13d-3 of the SEC under the
Securities Exchange Act of 1934) of greater than 50% of the outstanding shares
of voting stock of the Borrower, or (ii) the failure of any two (2) of the
following individuals to remain active in the day to day management of the
Borrower in substantially the same capacity as they currently occupy at any time
during the twelve (12) month period commencing on the Closing Date: Xxxxx X.
XxXxxxx, Xxxx Xxxx or Xxxx Xxxxxxx, unless such failure is as a result of death
or disability of any such individuals; provided, however that, the circumstances
specified in clause (ii) shall not constitute or Change of Control, if such
circumstances arise on or after the date on which the Obligations in respect of
the Term Loan have been paid in full.
Closing Date shall mean the date on which all of the conditions set
forth in Section 5.01 hereof have been fulfilled.
Code shall mean the Internal Revenue Code of 1986, as amended.
Consolidated shall mean an accounting presentation which includes any
consolidated Subsidiary of the Borrower.
Consolidated EBITDA shall mean the Borrower's Consolidated net income
determined in accordance with clause (B) of the definition of Consolidated
Funded Debt to EBITDA Ratio for the relevant fiscal quarter.
Consolidated Fixed Charge Coverage Ratio shall mean the ratio of (A)
the Borrower's net income (excluding non-cash extraordinary items or non-cash
post-tax non-operating earnings adjustments) plus amounts (without duplication)
deducted from net income in respect of income tax expense, interest expense,
depreciation and amortization expense and lease and rental expense to (B) the
sum of (y) the Current Maturities on Long Term Indebtedness (excluding, however,
in all cases any current maturities in respect of Borrower's Obligations under
the Revolving Credit Loans) plus (z) the interest expense and lease and rental
expense otherwise added back into the Borrower's net income pursuant to clause
(A) above, in each case determined for the relevant Test Period on a
Consolidated basis in accordance with GAAP, consistently applied.
Consolidated Funded Debt to EBITDA Ratio shall mean the ratio of (A)
the aggregate amount of the Indebtedness of the Borrower which by its terms or
by the terms of any instrument or agreement relating thereto, matures or which
is otherwise payable, one year or more from, or is directly or indirectly
renewable or extendible at the option of the obligor in respect thereof to a
date one year or more from, the date of the creation thereof (including, without
limitation, all of the Credit Obligations hereunder, all Capital Lease
Obligations of the Borrower and the aggregate amount available to be drawn of
any letter of credit issued for the account of the Borrower) to (B) the
Borrower's net income (excluding non-cash extraordinary items or non-cash post-
tax non-operating earnings adjustments) plus amounts (without duplication)
deducted from net
4
income in respect of income tax expense, interest expense, depreciation and
amortization expense, in each case determined for the relevant Test Period on a
Consolidated basis in accordance with GAAP, consistently applied.
Consolidated Net Loss shall mean for any fiscal period relevant to
the determination thereof, the circumstance that would exist if the results
reported on an income statement of the Borrower prepared in accordance with
GAAP, consistently applied, on a Consolidated basis, report a net loss for such
fiscal period.
Credit Documents shall mean this Agreement, each of the Revolving
Credit Notes, each of the Term Loan Notes, each Subsidiary Guaranty, each Notice
of Borrowing, each Letter of Credit Request and all other credit accommodations,
notes, loan agreements, guaranties, security agreements, mortgages, instruments,
pledge agreements, assignments, acceptance agreements, commitments, facilities,
reimbursement agreements and any other agreements and documents, now or
hereafter existing, creating, evidencing, guarantying, securing or relating to
any or all of the Obligations, together with all amendments, supplements,
modifications, renewals, or extensions thereof.
Current Maturities on Long Term Indebtedness shall mean that portion
of any Indebtedness of the Borrower (determined on a Consolidated Basis) of the
type described in Clause (A) of the definition of Consolidated Funded Debt to
EBITDA Ratio which by its terms is due and payable during the relevant Test
Period (whether as a result of a stated maturity, scheduled amortization,
sinking fund requirements, mandatory prepayment or upon demand).
Default shall mean any event, act or condition which, with notice or
the lapse of time, or both, would constitute an Event of Default.
Default Rate shall have the meaning assigned to such term in Section
2.07(a) hereof.
Documentation Agent shall mean Fleet Bank, N.A., in its capacity as
documentation agent for the Lenders hereunder, and its successors in such
capacity.
Drawings shall have the meaning assigned to such term in Section
2.10(b) hereof.
Dumping shall mean the releasing, spilling, emptying, pouring,
emitting, dumping or discharging of any hazardous substance into, or otherwise
permitting to exist any hazardous substance in, the environment.
ERISA shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time. Section references to ERISA are to ERISA, as in
effect at the date of this Agreement, and to any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor.
ERISA Affiliate shall mean any person (as defined in Section 3(9) of
ERISA) which together with the Borrower or any of its Subsidiaries would be
deemed to be a "single employer" within the meaning of Section 414 of the Code.
Event of Default shall have the meaning assigned to such term in
Section 9 hereof.
5
Existing Credit Agreement shall have the meaning assigned to such
term in the Recitals hereof.
Existing Letter of Credit shall have the meaning assigned to such
term in Section 2.09 (b) hereof.
Facility shall mean either of the three (3) facilities established
under this Agreement, i.e., the Revolving Credit Facility, the Term Loan
Facility and the Letter of Credit Facility.
FASB shall mean the officially released written statements of the
Financial Accounting Standards Board in general usage from time to time in the
accounting profession in the United States.
Federal Funds Rate shall mean, for any period, a fluctuating interest
rate equal for each day during such period to the weighted average of the rates
on overnight Federal Funds transactions with members of the Federal Reserve
System arranged by Federal Funds brokers, as published by the Federal Reserve
Bank of New York on the Business Day next preceding such day for amounts in
immediately available funds comparable to the principal amount of the relevant
indebtedness or, if such rate is not so published for any day for which the next
preceding day is a Business Day, the average of the quotations for such day on
such transactions received by the Agent from three (3) Federal Funds brokers of
recognized standing selected by the Agent.
Funding Losses shall have the meaning assigned to such term in
Section 2.14(c) hereof.
GAAP shall mean generally accepted accounting principles in effect
from time to time in the United States.
Guaranteed Indebtedness shall mean, as to any Person, all
Indebtedness of the type referred to in clauses (i) through (ix) of the
definition of Indebtedness in this Agreement guaranteed directly or indirectly
in any manner by such Person, or in effect guaranteed directly or indirectly by
such Person through an agreement (i) to pay or purchase such Indebtedness or to
advance or supply funds for the payment or purchase of such Indebtedness, (ii)
to purchase, sell or lease (as lessee or lessor) property, or to purchase or
sell services, primarily for the purpose of enabling the debtor to make payment
of such Indebtedness or to assure the holder of such Indebtedness against loss,
(iii) to supply funds to or in any other manner invest in the debtor (including
any agreement to pay for property or services irrespective of whether or not
such property is received or such services are rendered), or (iv) otherwise to
assure a creditor against loss.
Guarantor shall mean each Subsidiary of the Borrower that becomes a
guarantor of the Obligations pursuant to Section 8.12 hereof.
Health Care shall mean Xxxxxx Xxxxxx Health Care, Inc., a New Jersey
corporation and a wholly owned subsidiary of the Borrower.
Indebtedness shall mean, as to any Person (i) all indebtedness of
such Person for borrowed money, (ii) all obligations of such Person evidenced by
bonds, debentures, notes, or other similar instruments, (iii) all obligations of
such Person to pay the deferred purchase price of property or services, (iv) all
indebtedness created or arising under any conditional sale or other title
6
retention agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such property, (v)
all Capitalized Lease Obligations of such Person, (vi) all obligations,
contingent or otherwise, of such Person under acceptances, letters of credit or
similar facilities, (vii) all obligations of such Person to purchase, redeem,
retire, defease or otherwise acquire for value any capital stock of such person
or any warrants, rights or options to acquire such capital stock, valued, in the
case of redeemable preferred stock, at the greater of its voluntary or
involuntary liquidation preference plus accrued and unpaid dividends, (viii) all
obligations of such Person in respect of interest rate swap agreements, currency
swap agreements and other similar agreements designed to hedge against
fluctuations in interest rates or foreign exchange rates, (ix) all obligations
of production payments from property operated by or on behalf of such Person and
other similar arrangements with respect to natural resources, (x) all Guaranteed
Indebtedness of such Person, and (xi) all Indebtedness of the type referred to
in clauses (i) through (x) above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on property (including, without limitation, accounts and contracts
rights) owned by such Person, even though such Person has not assumed or become
liable for the payment of such Indebtedness.
Interest Period shall mean with respect to any LIBOR Loan:
(i) initially, the period commencing on the borrowing or conversion
date, as the case may be, with respect to such LIBOR Loan and
ending one (1), two (2), three (3) or six (6) months thereafter,
as selected by the Borrower either (a) two (2) LIBOR Business
Days before the Closing Date in the case of the Term Loans, (b)
in its Notice of Borrowing delivered pursuant to Section 2.03(a)
hereof, in the case of Revolving Credit Loans, or (c) in either
case, in its notice of conversion delivered pursuant to Section
2.08(a) hereof, as the case may be, given with respect thereto;
and
(ii) thereafter, each period commencing on the last day of the next
preceding Interest Period applicable to such LIBOR Loan and
ending one (1), two (2), three (3) or six (6) months thereafter,
as selected by the Borrower in its notice of continuance
delivered pursuant to Section 2.08(b) hereof, with respect
thereto;
provided that, all of the foregoing provisions relating to Interest Periods are
subject to the following:
(i) if any Interest Period pertaining to a LIBOR Loan would otherwise
end on a day that is not a LIBOR Business Day, such Interest
Period shall be extended to the next succeeding LIBOR Business
Day unless the result of such extension would be to carry such
Interest Period into another calendar month in which event such
Interest Period shall end on the immediately preceding LIBOR
Business Day; and
(ii) any Interest Period pertaining to a LIBOR Loan that begins on the
last LIBOR Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last
LIBOR Business Day of a calendar month.
7
Lender shall mean each Lender listed on the signature page hereto,
each assignee which becomes a Lender pursuant to Section 11.08 hereof, and their
respective successors and assigns.
Letter of Credit shall mean each standby letter of credit issued
pursuant to Section 2.09 hereof.
Letter of Credit Facility shall have the meaning assigned to such
term in Section 2.09 hereof.
Letter of Credit Fee shall have the meaning assigned to such term in
Section 3.03 hereof.
Letter of Credit Outstandings shall mean, at any time, the sum of,
without duplication (i) the aggregate Stated Amount of all outstanding Letters
of Credit; (ii) the aggregate amount of all Unpaid Drawings in respect of all
Letters of Credit; and (iii) the Stated Amount of all Letters of Credit
requested pursuant to Section 2.10 hereof but not yet issued.
Letter of Credit Processing Fees shall have the meaning assigned to
such term in Section 3.04 hereof.
Letter of Credit Request shall have the meaning assigned to such term
in Section 2.10 hereof.
Letter of Credit Sublimit shall mean Two Million Dollars
($2,000,000); provided, however, that in no event shall the Letter of Credit
Sublimit be at any time greater than the Maximum Available Credit Amount.
LIBOR Business Day shall mean any Business Day on which dealing in
the London interbank market may be carried on by commercial banks in London,
England.
LIBOR Loan shall mean any Loan that bears interest at a rate of
interest based upon the LIBOR Rate.
LIBOR Rate shall mean, with respect to each day during each Interest
Period pertaining to a LIBOR Loan, the per annum rate (rounded to the next
higher 1/100 of 1%) for deposits in United States dollars for a period equal to
the relevant Interest Period as reported on the Telerate Page 3750 as of 11:00
a.m. (London time), on the day that is two (2) LIBOR Business Days prior to the
commencement of such Interest Period (or if not so reported, then as determined
by the Agent from another recognized source for London interbank market
quotations), adjusted for reserves by dividing that rate by 1.00 minus the LIBOR
Reserve.
LIBOR Reserve shall mean the maximum percentage reserve requirements
(rounded to the next higher 1/100 of 1% and expressed as a decimal) of the Agent
(including, without limitation, basic, supplemental, marginal and emergency
reserves), in effect on any day during the relevant Interest Period under
Regulation D with respect to eurocurrency funding currently referred to as
"Eurocurrency liabilities" in Regulation X.
Xxxx shall mean any mortgage, pledge, security interest, encumbrance,
lien or other form of charge or preferential arrangement of any kind (including,
without limitation, any agreement to give any of the foregoing, any conditional
sale or other title retention or any lease in the nature thereof).
8
Loan shall mean each and every Revolving Credit Loan and Term Loan
made by any Lender hereunder. For purposes of this Agreement, the continuation
or conversion of a Prime Rate Loan or LIBOR Loan shall not constitute the making
of a new Loan.
Maximum Available Revolving Credit Amount shall mean Thirty Five
Million Dollars ($35,000,000), less any reduction to said Maximum Revolving
Credit Amount pursuant to Section 2.04 hereof.
Multi-employer Plan shall mean a Plan which is a multi-employer plan
as defined in Section 4001(a)(3) of ERISA.
Natural Resources shall mean each and all of the atmosphere, air,
waters, earth, land, minerals, flora, fauna, fish, shellfish, wildlife, biota,
and/or other natural resources.
Net Cash Proceeds shall mean the aggregate amount of cash received
from time to time (whether as initial consideration or through payment or
disposition of deferred compensation) by or on behalf of the Borrower in
connection with any sale or issuance of equity securities contemplated in
Section 4.02(b) hereof, after deduction therefrom only (i) reasonable and
customary brokerage commissions, underwriting fees and discounts, legal fees and
other similar fees and expenses, and (ii) the amount of taxes payable in
connection with, or as a result of, such transaction; but in each case only to
the extent that such amounts are deducted upon receipt of such cash proceeds and
actually paid to Persons other than the Borrower, any Guarantors or any
Affiliate of the Borrower or Guarantors.
Note shall mean each and every Revolving Credit Note and Term Loan
Note.
Notice of Borrowing shall have the meaning assigned to such term in
Section 2.03(a) hereof.
Obligations shall mean any and all obligations and indebtedness of
every kind and description of the Borrower owed to the Agent, the Lenders or any
Affiliate of the Agent or any Lender (including, without limitation, the
Revolving Credit Obligations, the aggregate outstanding principal amount of the
Term Loans, any interest accrued thereon and any other amount due hereunder),
whether primary or secondary, direct or indirect, absolute or contingent, sole,
joint or several, secured or unsecured, due or to become due, contractual or
tortious, arising by operation of law or otherwise, or now or hereafter
existing, whether incurred by the Borrower, including, without limitation,
principal, interest and fees, including, without limitation, late fees and
expenses, including, without limitation, attorneys' fees and costs and/or
allocated fees and costs of any Lender's in-house legal counsel.
Obligor shall mean the Borrower, each Guarantor, and every other
maker, endorser, guarantor or surety of or for the Obligations.
Payment Office shall mean the office identified as such below the
signature of the Agent and the Lenders on the signature pages hereto, or such
other office as such parties may designate in writing to the other parties
hereto.
PBGC shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA, and any entity succeeding to any or
all of its functions under ERISA.
9
Permitted Investments shall mean (i) readily marketable direct
obligations of the Government of the United States of America or any agency or
instrumentality thereof or any full faith and credit obligations of the United
States Government or obligations guaranteed by the United States Government and
its agencies maturing within one (1) year of purchase, (ii) repurchase
agreements having a duration of not more than sixty (60) days that are
collateralized by full faith and credit obligations of the United States
Government or obligations guaranteed by the United States Government and its
agencies, (iii) interests in investment companies registered under the
Investment Company Act of 1940, as amended (or in a separate portfolio of such
an investment company), that invest primarily in full faith and credit
obligations of the United States Government or obligations guaranteed by the
United States Government and its agencies and repurchase agreements
collateralized by such obligations, (iv) time deposits with any office located
in the United States of the Lenders or any other bank or trust company which is
organized under the laws of the United States and has combined capital, surplus
and undivided profits of not less than $500,000,000 or with any bank which is
organized other than under the laws of the United States (x) the commercial
paper of which is rated at least A-1+ by Standard & Poor's Corporation (S&P )
and P-1 by Xxxxx'x Investors Service, Inc. (Moody's) (or, if such commercial
paper is rated only by S&P, at least A-1+ by S&P, or if such commercial paper is
rated only by Moody's, at least P-1 by Moody's) or (y) the long term senior debt
of which is rated at least AA by S&P and Aa2 by Moody's (or, if such debt is
rated only by S&P, at least AA by S&P, or if such debt is rated only by Moody's,
at least Aa2 by Moody's), (v) commercial paper having a maturity of not more
than one year from the date of such investment and rated at least A-1 by S&P and
P-1 by Moody's (or, if such commercial paper is rated only by S&P, at least A-1
by S&P or, if such commercial paper is rated only by Moody's, at least P-1 by
Moody's), (vi) instruments held for collection in the ordinary course of
business, (vii) any equity or debt securities or other form of debt instrument
obtained in settlement of debts previously contracted, (viii) any equity or debt
securities obtained by the Borrower in connection with any acquisition permitted
pursuant to clause (B) of Section 8.03 hereof, (ix) any equity or debt
securities held by the Borrower as of the Closing Date that are listed on Annex
I hereto and any distributions of securities made in respect thereof, and (x)
any other form of investment in any Person so long as the consideration paid or
exchanged by the Borrower for such investment (whether in cash or the value of
payment-in-kind) does not exceed in the aggregate for all such investments an
amount equal to $2,000,000 minus the aggregate outstanding amount actually
advanced to officers of the Borrower, as permitted pursuant to Section 8.11
hereof.
Permitted L/C Obligation shall mean, as to any Letter of Credit,
obligations (i) in connection with the Borrower's "Liberty Mutual" worker's
compensation self-insurance program; (ii) to support Indebtedness supported by
the Existing Letters of Credit; and (iii) to support any other obligation of the
Borrower acceptable to the Agent and the Required Lenders, in their sole
discretion.
Permitted Liens shall mean those Liens permitted to exist pursuant to
Section 8.02 hereof.
Person shall mean any individual, partnership, joint venture, firm,
corporation, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.
Plan shall mean any employee benefit plan which is subject to ERISA
and which covers the employees or former employees of the Borrower, any of its
Subsidiaries or an ERISA Affiliate, under which the Borrower, any of its
Subsidiaries or an ERISA Affiliate has any obligation or liability or under
which the Borrower, any of its Subsidiaries or an ERISA Affiliate has made
contributions within the preceding five years. References herein to a Plan shall
include any Multiemployer Plan.
10
Prime Rate shall mean the per annum rate of interest established by the
Agent as its reference rate in making loans, and does not reflect the rate of
interest charged to any particular borrower or class of borrowers. The Borrower
acknowledges that the Prime Rate is not tied to any external index or rate of
interest and that the rate of interest charged hereunder shall change
automatically and immediately as of the date of any change in the Prime Rate,
without notice to the Borrower or any Guarantor.
Prime Rate Loan shall mean any Loan that bears interest at a rate of
interest based upon the Prime Rate.
Pro Rata Share shall mean, for each Lender at any time, (a) with respect to
the Revolving Credit Facility and the Letter of Credit Facility, the percentage
obtained by dividing such Lender's Revolving Credit Commitment by the Maximum
Available Revolving Credit Amount (in each case, as adjusted from time to time
in accordance with the provisions of this Agreement) and (b) with respect to the
Term Loan Facility, the percentage obtained by dividing such Lender's Term Loan
Commitment by the Total Term Loan Amount.
PSA shall have the meaning assigned to such term in the Recitals hereof.
PSA Group shall have the meaning the meaning assigned to such term in the
Recitals hereof.
PSA Sub shall have the meaning assigned to such term in the Recitals hereof
Regulation D shall mean Regulation D 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 establishing reserve requirements.
Required Lenders shall mean Lenders holding more than sixty-six and
two/thirds percent (66.67%) of the aggregate of all the Revolving Credit
Commitments and Term Loan Commitment, or, if such credit commitments have been
terminated, the Lenders holding more than sixty-six and two/thirds percent
(66.67%) of such credit commitments immediately prior to such termination.
Revolving Credit Commitment shall mean, with respect to each Lender, the
amount set forth opposite such Lender's name under the heading Revolving Credit
Commitment on the signature pages hereof, which is such Lender's Pro Rata Share
of the Maximum Available Revolving Credit Amount that such Lender has agreed to
advance hereunder, as the same may be (i) reduced from time to time pursuant to
Section 2.04 hereof or (ii) adjusted from time to time as a result of
assignments to and from the Lenders pursuant to Section 11.08 hereof.
Revolving Credit Expiration Date shall mean October 31, 2002, as the same
may be extended for an additional one (1) year period in accordance with Section
2.02 hereof.
Revolving Credit Facility shall have the meaning assigned to such term in
Section 2.01 hereof.
Revolving Credit Loans shall have the meaning assigned to such term in
Section 2.01 hereof.
11
Revolving Credit Notes shall have the meaning assigned to such term in
Section 2.01 hereof.
Revolving Credit Obligations shall mean, at any particular time, the sum of
(A) the aggregate principal amount of the outstanding Revolving Credit Loans and
(B) the Letter of Credit Outstandings.
Revolving Credit Period shall mean the period from and including the
Closing Date to but excluding the Revolving Credit Expiration Date or such
earlier date on which the Lenders' obligation to make Revolving Credit Loans
shall have terminated as provided herein.
SEC shall mean the Securities and Exchange Commission or any governmental
entity which may be substituted therefor.
Stated Amount shall mean, as to any Letter of Credit, the maximum amount
available to be drawn thereunder, determined without regard to whether any
conditions to drawing could then be met.
Subsidiary shall mean, as to any Person, any corporation or other entity of
which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned or controlled by such
Person, one or more of the other Subsidiaries of such Person or any combination
thereof.
Subsidiary Guaranty shall mean each Guaranty Agreement, in favor of the
Agent for the ratable benefit of the Lenders, in each case substantially in the
form of Exhibit D hereto and executed and delivered by Subsidiaries of the
Borrower from time to time pursuant to Section 8.12 hereof.
Telerate Page 3750 shall mean the display designated as "Page 3750" on the
Dow Xxxxx Telerate Service (or such other page as may replace that page on that
service for the purpose of displaying London interbank offered rates of major
banks).
Term Loans shall have the meaning assigned to such term in Section 2.05
hereof.
Term Loan Commitment shall mean, with respect to each Lender, the amount
set forth opposite such Lender's name under the heading Term Loan Commitment on
the signature pages hereof, which is such Lender's Pro Rata Share of the Total
Term Loan Amount.
Term Loan Facility shall have the meaning assigned to such term in Section
2.05 hereof.
Term Loan Maturity Date shall mean January 31, 2006.
Term Loan Notes shall have the meaning assigned to such term in Section
2.05 hereof.
12
Test Period shall mean, with respect to any applicable
determination under this Agreement, a period of twelve (12) consecutive months
(taken as one accounting period) and ending on the last day of the fiscal
quarter of the Borrower then last ended.
Total Term Loan Amount shall mean the sum of the Term Loan
Commitments then in effect for each of the Lenders, and shall initially equal
$65,000,000.
Type shall mean any type of Loan determined with respect to its
interest option applicable thereto, i.e., a Prime Rate Loan or LIBOR Loan.
Unpaid Drawing shall have the meaning assigned to such term in
Section 2.12 hereof.
1.02 Principles of Construction.
(a) References. All references to sections, schedules and exhibits
are to sections, schedules and exhibits in or to this Agreement unless otherwise
specified. The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement.
(b) Accounting Terms. All accounting terms not specifically
defined herein or in any exhibit hereto shall be construed in accordance with
GAAP in conformity with those principles used in the preparation of the
financial statements referred to in Section 7.03 of this Agreement. Any non-cash
accrual accounting charges or gains arising from the adoption of FASB rulings
not yet fully adopted by the Borrower and the Guarantors shall not be included
in the definitions of said accounting terms, and therefore shall be excluded for
the purposes of financial covenant calculations required pursuant to Sections
8.14, 8.15 and 8.16 hereof.
SECTION 2. AMOUNT AND TERMS OF CREDIT.
2.01 Revolving Credit.
(a) Revolving Credit Facility. Subject to the terms and conditions
herein set forth and in reliance upon representations and warranties set forth
herein and in the other Credit Documents, each Lender severally agrees to make
available to the Borrower a revolving credit facility (the Revolving Credit
Facility), pursuant to which each Lender shall make advances (each a Revolving
Credit Loan) to the Borrower from time to time during the Revolving Credit
Period, in an amount not to exceed such Lender's Pro Rata Share of the
Availability. All Revolving Credit Loans comprising the same advance under this
Agreement shall be made by the Lenders simultaneously and proportionately to
their then respective Pro Rata Shares, it being understood that no Lender shall
be responsible for any failure by another Lender to perform its obligations to
make a Revolving Credit Loan hereunder nor shall the Credit Commitment of any
Lender be increased or decreased as a result of any such failure. The Revolving
Credit Loans outstanding under the Revolving Credit Facility shall be evidenced
by Revolving Credit Notes issued to each of the Lenders, substantially in the
form of Exhibit A-1 hereto (each a Revolving Credit Note), with blanks
appropriately completed in conformity herewith. Subject to Section 2.03(c)
hereof, the Revolving Credit Loans shall from time to time be (i) LIBOR Loans,
(ii) Prime Rate Loans, or (iii) a combination thereof, as determined by the
Borrower in accordance with Sections 2.03 and 2.06 hereof, provided that no
Revolving Credit Loan shall be made as a LIBOR Loan after the day that
13
is one (1) month prior to the Revolving Credit Expiration Date. Subject to the
provisions of this Agreement, the Borrower from time to time may borrow, repay
and reborrow Loans made hereunder at any time during the Revolving Credit
Period.
(b) Amendment and Restatement of Revolving Credit Facility Under
Existing Credit Agreement. The Revolving Credit Facility herein provided shall
amend and restate the revolving credit facility set forth in the Existing Credit
Agreement. Accordingly, as of the Closing Date (i) the revolving credit facility
set forth in the Existing Credit Agreement and each Lender's commitment
hereunder shall be terminated and of no further force and effect, (ii) the
revolving credit loans outstanding under the Existing Credit Agreement shall be
refinanced with Revolving Credit Loans incurred hereunder, and (iii) the
obligations of the Borrower with respect to such existing revolving credit loans
evidenced by the revolving credit notes issued under the Existing Credit
Agreement shall be deemed to be evidenced by the Revolving Credit Notes issued
hereunder. It is the intention of the parties hereto that the amendment,
restatement and refinancing of the existing revolving credit facility under the
Existing Credit Agreement with the Revolving Credit Facility herein provided
shall be deemed to be a modification of the Borrower's obligations thereunder
and not an extinguishment or novation thereof.
2.02 Revolving Credit Payment and Maturity; Extension of Maturity .
Subject to the immediately succeeding sentences of this Section 2.02, the
aggregate unpaid principal amount of the Revolving Credit Loans, all accrued but
unpaid interest thereon, and any and all fees payable hereunder, shall mature
and be due and payable on the Revolving Credit Expiration Date. The Revolving
Credit Expiration Date may be extended for an additional one (1) year period
upon the written request of the Borrower to the Agent and the Lenders made at
least six (6) months prior (but not more than nine (9) months prior) to the then
Revolving Credit Expiration Date. Such notice shall be accompanied by a
certificate of the chief financial officer of the Borrower stating that no
Default or Event of Default has occurred and is then continuing and that the
representations and warranties contained herein and in the other Credit
Documents are true and correct in all material respects on such date. Neither
the Agent nor any Lender shall be obligated to grant any extensions pursuant to
this Section 2.02 and any such extension shall be in the sole and absolute
discretion of each of them, but the Agent and each Lender agrees to reply to any
such request within a reasonable period of time.
2.03 Procedure for Revolving Credit Loan Borrowings.
(a) Notice of Borrowing. Whenever the Borrower desires to incur
Revolving Credit Loans, the Borrower shall deliver a Notice of Borrowing (or
provide telephonic notice thereof, promptly confirmed in writing) to the Agent
(i) in the case of a LIBOR Loan, no later than 11:00 a.m. (prevailing Eastern
Standard Time) on the date that is at least two (2) LIBOR Business Days prior to
the date of the proposed Loan and (ii) in the case of a Prime Rate Loan, no
later than 10:00 a.m. (prevailing Eastern Standard Time) on the date of the
proposed Loan. Each such Notice of Borrowing (a Notice of Borrowing) shall be
substantially in the form of Exhibit B hereto and shall be irrevocable and shall
specify (i) the principal amount of the proposed Revolving Credit Loan, (ii) the
amount of the Availability as of the date of the funding of the proposed
Revolving Credit Loan, (iii) the date of funding of the proposed Revolving
Credit Loan, (iv) the Type of Revolving Credit Loan proposed, and (v) in the
case of a proposed Revolving Credit Loan in the form of a LIBOR Loan, the
desired Interest Period. The Agent shall promptly give each Lender written
notice (or telephonic notice promptly confirmed in writing) of each proposed
14
Revolving Credit Loan, of such Lender's Pro Rata Share thereof and of the other
matters covered by the Notice of Borrowing. The Agent shall , in any event,
endeavor in good faith to provide each Lender with the notice described in the
immediately preceding sentence by no later than 12:00 noon on the date the
applicable Notice of Borrowing is received by the Agent from the Borrower.
Without in any way limiting the obligation of the Borrower to confirm in writing
any notice it may give hereunder by telephone, the Agent may act prior to
receipt of written confirmation, without liability, upon the basis of such
telephonic notice believed by the Agent in good faith to be from the chief
financial officer of the Borrower, or from any other person designated in
writing to the Agent by the chief financial officer of the Borrower as a person
entitled to give telephonic notices under this Agreement on behalf of the
Borrower. In each such case, the Borrower hereby waives the right to dispute the
Agent's record of the terms of any such telephonic notice.
(b) Disbursement of Funds. No later than 2:00 p.m. (prevailing
Eastern Standard Time) on the date of each such Loan, each Lender will make
available its Pro Rata Share of such Revolving Credit Loan requested to be made
on such date in immediately available funds to the Agent at its Payment Office
and the Agent shall make such funds available to the Borrower by depositing such
funds into the Borrower's account at the Agent's Payment Office. Unless the
Agent shall have been notified by any Lender prior to the date of any such
Revolving Credit Loan that such Lender does not intend to make available to the
Agent its Pro Rata Share of such Revolving Credit Loan, the Agent may assume
that such Lender has made such amount available to the Agent on the date of such
Revolving Credit Loan and the Agent, in reliance upon such assumption, may (in
its sole discretion and without any obligation to do so) make available to the
Borrower such Pro Rata Share of such Revolving Credit Loan. If such Pro Rata
Share is not in fact made available to the Agent by such Lender and the Agent
has made available the same to the Borrower, the Agent shall be entitled to
recover such amount from such Lender. If such Lender does not pay such amount
forthwith upon the Agent's demand therefor, the Agent shall promptly notify the
Borrower, and the Borrower shall immediately pay such amount to the Agent. The
Agent shall also be entitled to recover from such Lender or the Borrower, as the
case may be, interest on such amount in respect of each day from the date such
amount was made available by the Agent to the Borrower to the date such amount
is recovered by the Agent, at a rate per annum equal to (x) if paid by such
Lender, the Federal Funds Rate or (y) if paid by the Borrower, the then
applicable rate of interest, calculated in accordance with Section 2.15 hereof,
for the respective Revolving Credit Loans. Nothing in this Section 2.03(b) shall
be deemed to relieve any Lender from its obligation to fulfill its Credit
Commitment hereunder or to prejudice any rights which the Borrower may have
against any Lender as a result of any default by such Lender hereunder.
(c) Minimum Advance and Type Limitation. Each Revolving Credit
Loan requested hereunder shall be in an amount equal to $500,000 or any whole
multiple thereof, except that any Revolving Credit Loan may be in the aggregate
amount of the Availability. At no single time during the Revolving Credit Period
shall there be any more than eight (8) LIBOR Loans outstanding under the
Revolving Credit Facility.
2.04 Reduction of Commitment . The Borrower shall have the right, upon
not less than three (3) Business Days' prior written notice to the Agent (which
the Agent shall promptly transmit to the Lenders), to reduce all or part of the
Maximum Available Revolving Credit Amount, such reduction to be permanent and
irrevocable upon delivery of said notice. Any partial reduction of the Maximum
Available Revolving Credit Amount shall be in a minimum amount equal to $500,000
or any whole multiple thereof and shall reduce each Lender's Credit Commitment
proportionately in accordance with its Pro Rata Share.
2.05 Term Loans. Subject to the terms and conditions herein set forth
and in reliance upon the representations and warranties set forth herein and in
the other Credit Documents,
15
each Lender severally agrees to make available to the Borrower, a term loan
facility (the Term Loan Facility), pursuant to which each Lender shall, on the
Closing Date, lend (each a Term Loan) to the Borrower an amount equal to such
Lender's Pro Rata Share of the Total Term Loan Amount. The Lender shall
simultaneously fund its respective Pro Rata Share of the Term Loans on the
Closing Date, it being understood that no Lender shall be responsible for any
failure by another Lender to so fund nor shall the Term Loan Commitment of any
Lender be increased or decreased as a result of such failure. The Term Loans
outstanding under the Term Loan Facility shall be evidenced by Term Loan Notes
issued to each of the Lenders and substantially in the form of Exhibit A-2
hereto (each a Term Loan Note), with blanks appropriately completed in
conformity herewith. The Term Loans shall be from time to time (i) LIBOR Loans
or (ii) Prime Rate Loans; provided, however, that each Term Loan shall be the
same Type of Loan. The Term Loans are subject to continuation and/or conversion
in accordance with Section 2.08 hereof; provided, however, that any such
continuation or conversion shall be in respect of all of the Term Loans
outstanding as at such continuation or conversion and at no time shall there be
any more than one (1) Type of Loan or more than one (1) Interest Period in
effect with respect thereto. Amounts borrowed under the Term Loan Facility and
repaid or prepaid may not be reborrowed.
2.06. Repayment and Maturity of Term Loans. The principal amount of
the Term Loans shall be paid in consecutive annual installments commencing on
April 30, 2001 and continuing on the payment dates specified below, with each
such installment to be in the amount set forth opposite such payment date:
Principal Payment Date Annual Payment Installment
April 30, 2001 $10,000,000
April 30, 2002 $10,000,000
April 30, 2003 $10,000,000
April 30, 2004 $10,000,000
April 30, 2005 $10,000,000
January 31, 2006 $15,000,000
; provided, however, that the final installment due and payable on the Term Loan
Maturity Note shall be in all events equal to the then remaining outstanding
principal amount of the Term Loans, together with all accrued but unpaid
interest thereon.
2.07 Interest.
(a) Interest Rates. Prior to an Event of Default (i) each LIBOR
Loan shall bear interest for each day during each Interest Period applicable
thereto at a per annum rate equal to the LIBOR Rate plus the Applicable Margin
and (ii) each Prime Rate Loan shall bear interest at a per annum rate equal to
the Prime Rate plus or minus (as applicable) the Applicable Margin in effect
from time to time. Notwithstanding any other term or provision hereof, upon and
following an Event of Default, each Prime Rate Loan shall bear interest at a per
annum rate equal to the Prime Rate plus 300 basis points (3.00%) and each LIBOR
Loan shall bear interest for each day during each Interest Period applicable
thereto at a per annum rate equal to the LIBOR Rate plus
16
500 basis points (5.00%); provided, however, that in no event shall such rate
exceed the highest rate of interest allowed by law. Each such rate is
hereinafter referred to as the Default Rate.
(b) Interest Accrual and Payment Date. Interest on each Loan shall accrue
from and including the date of the advance of funds with respect to such Loan or
the first day of the relevant Interest Period to but excluding the date of
repayment thereof or the expiration of the Interest Period and shall be payable
in arrears (i) in the case of a Prime Rate Loan, on the last day of each
calendar month and (ii) in the case of a LIBOR Loan on the last day of the
Interest Period with respect thereto and, with respect to any LIBOR Loan with an
Interest Period in excess of three (3) months, on the date that is three (3)
months after the incurrence thereof or conversion thereto.
(c) Agent's Determination. The Agent shall determine each interest rate
applicable to the Loans hereunder. The Agent shall give prompt written notice to
the Borrower and the Lenders of each rate of interest so determined and, in
respect of the Prime Rate, and the Applicable Margins, any change or adjustment
thereof; provided, however that the failure of the Agent to give such notice
shall in no way affect the validity or applicability of any such determination,
change or adjustment. The Agent's determinations under this Section 2.07(c)
shall be conclusive and binding, absent manifest error.
2.08 Conversions and Continuations.
(a) Conversions. Subject to Sections 2.03(c) and 2.05 hereof, the
Borrower may elect from time to time to convert any Loan to any other Type of
Loan by delivering to the Agent an irrevocable notice (or by providing
telephonic notice promptly confirmed in writing) of such election (A) in the
case of a conversion to a Prime Rate Loan, at least one (1) Business Day prior
to the expiration of the then current Interest Period with respect to the LIBOR
Loan to be converted or (B) in the case of a conversion to a LIBOR Loan, at
least two (2) LIBOR Business Days prior to the proposed commencement of the
Interest Period of the LIBOR Loans as so converted. Any notice delivered
pursuant to this Section 2.08(a) with respect to a conversion to a LIBOR Loan
shall also specify the desired Interest Period for the Loan as so converted. No
Loan may be converted pursuant to this Section 2.08 (a) (i) at any time during
which an Event of Default has occurred and is continuing, or (ii) if, after
giving effect to such conversion, Section 2.03(c) or 2.05 hereof would be
violated. In no event shall the Borrower be permitted to convert any Loan to a
LIBOR Loan with an Interest Period that would expire after the Revolving Credit
Expiration Date, in the case of a conversation of a Revolving Credit Loan or
after the Term Loan Maturity Date, in the case of a conversion of the Term
Loans. The Agent shall give each Lender notice as promptly as practicable of any
such proposed conversion affecting any of its Loans.
(b) Continuance of LIBOR Loan. The Borrower may elect to continue any
LIBOR Loan as such upon the expiration of the then current Interest Period with
respect thereto by delivering to the Agent an irrevocable notice (or by
providing telephone notice thereof, promptly confirmed in writing) of such
election, at least two (2) LIBOR Business Days prior to the expiration of the
then current Interest Period with respect thereto. Such notice shall also
specify the desired Interest Period for the Loan so continued. No continuance
shall be permitted under this Section 2.08(b) at any time during which an Event
of Default has occurred and is continuing. In no event shall the Borrower be
permitted to continue any LIBOR Loan if such continuance would result in an
Interest Period with respect to such Loan expiring after the Revolving Credit
Maturity Date, in the case of a continuance of a Revolving Credit Loan or after
the Term Loan Maturity Date in the case of a continuance of the Term Loans. The
Agent shall give each Lender notice as promptly as practicable of any such
proposed continuance affecting any of its Loans.
17
(c) Automatic Conversion to Prime Rate. If the Borrower fails
to notify the Agent of the conversion or continuance of any LIBOR Loan within
the time specified in this Section 2.08, or is otherwise not permitted to
convert or continue any LIBOR Loan pursuant to said Section, then any such Loan
shall automatically convert to a Prime Rate Loan on the last day of the then
expiring applicable Interest Period.
2.09 Letters of Credit.
(a) Issuance of Letters of Credit. Subject to and upon the
terms herein set forth and in reliance upon the representations and warranties
herein set forth and in the other Credit Documents, the Borrower at any time and
from time to time on or after the Closing Date and prior to the Revolving Credit
Expiration Date, may request that the Agent issue, for the account of the
Borrower and in support of any Permitted L/C Obligation, an irrevocable standby
letter of credit or letters of credit in such form as may be approved by the
Agent (the Letter of Credit Facility). Notwithstanding the foregoing (i) no
Letter of Credit shall be issued in a Stated Amount which (x) when added to the
Letter of Credit Outstandings at such time would exceed the Letter of Credit
Sublimit, or (y) when added to the sum of the aggregate principal amount of the
Credit Obligations then outstanding would exceed the Availability; (ii) each
Letter of Credit shall, unless otherwise agreed to by the Agent and the Required
Lenders, have an expiration date occurring no later than one (1) year after the
date of issuance thereof, and in no event occurring later than the Business Day
next preceding the Revolving Credit Expiration Date; (iii) each Letter of Credit
shall be denominated in U.S. dollars; and (iv) no Letter of Credit shall be
issued by the Agent after it has received a notice in writing from the Required
Lenders or the Borrower that one or more of the conditions specified in Section
5.02 hereof are not then satisfied.
(b) Existing Letter of Credit. Annex II hereto contains a
description of all letters of credit issued pursuant to the Existing Credit
Agreement and outstanding on the Closing Date. Each such letter of credit,
including any extension or renewal thereof (each, as amended from time to time
in accordance with the terms thereof and hereof, an Existing Letter of Credit)
shall constitute a Letter of Credit for all purposes of this Agreement, issued,
for purposes of Section 2.09(a), on the Closing Date.
2.10 Letter of Credit Requests. Whenever the Borrower desires that
a Letter of Credit be issued for its account, it shall give the Agent at least
five (5) Business Days' notice (or such lesser number of days as may be agreed
to by the Agent and the Required Lenders). Each notice shall be executed by the
Borrower and shall be in the form of Exhibit C hereto (each a Letter of Credit
Request). The Agent shall promptly transmit copies of each Letter of Credit
Request to each Lender. Each Letter of Credit Request shall be accompanied by a
completed and executed "Letter of Credit Application" (or an amendment to any
then effective application) in the form furnished by the Agent to the Borrower
from time to time. The terms of each such application are incorporated herein to
the extent not inconsistent herewith.
2.11 Letter of Credit Participations.
(a) Participations. Immediately upon the issuance by the
Agent of any Letter of Credit, the Agent shall be deemed to have sold and
transferred to each other Lender (each such other Lender, in such capacity under
this Section 2.11, a L/C Participant), and each such L/C Participant shall be
deemed irrevocably and unconditionally to have purchased and received from the
Agent, without recourse or warranty, an undivided interest and risk and income
participation (each a L/C Participation), to the extent of such L/C
Participant's Pro Rata Share, in such Letter of Credit, each substitute letter
of credit, each drawing made thereunder and the obligations of the
18
Borrower under this Agreement with respect thereto, and any security thereof or
guaranty pertaining thereto (although Letter of Credit Fees will be paid
directly to the Agent for the ratable account of the L/C Participants as
provided in Section 3.03 and the L/C Participants shall have no right to receive
any portion of any Letter of Credit Processing Fees). Upon any change in the
Credit Commitments of the Lenders pursuant to Section 11.08 hereof, it is hereby
agreed that, with respect to all outstanding Letters of Credit and Unpaid
Drawings, there shall be an automatic adjustment to the L/C Participations
pursuant to this Section 2.11 to reflect the new Pro Rata Shares of the assignor
and assignee Lender.
(b) Agent's Obligations. In determining whether to pay under any
Letter of Credit, the Agent shall have no obligation relative to the L/C
Participants or the Borrower other than to confirm that any documents required
to be delivered under such Letter of Credit have been delivered and that they
appear to comply on their face with the requirements of such Letter of Credit.
Any action taken or omitted to be taken by the Agent under or in connection with
any Letter of Credit issued by it, if taken or omitted in the absence of gross
negligence or willful misconduct, shall not create for the Agent any resulting
liability.
(c) Payments Upon Drawing. In the event that the Agent makes any
payment under any Letter of Credit issued by it and the Borrower shall not have
reimbursed such amount in full to the Agent pursuant to Section 2.10(a), the
Agent shall promptly notify each L/C Participant of such failure, and each L/C
Participant shall promptly and unconditionally pay to the Agent the amount of
such L/C Participant's Pro Rata Share of such unreimbursed payment in
immediately available funds. If the Agent so notifies, prior to 11:00 A.M.
(prevailing Eastern Standard Time) on any Business Day, any L/C Participant
required to fund a payment under a Letter of Credit, shall make available to the
Agent such L/C Participant's Pro Rata Share of the amount of such payment on
such Business Day in same day funds. If and to the extent such L/C Participant
shall not have so made its Pro Rata Share of the amount of such payment
available to the Agent, such L/C Participant agrees to pay to the Agent,
forthwith on demand, such amount, together with interest thereon for each day
from such date until the date such amount is paid to the Agent at the Federal
Funds Rate. The failure of any L/C Participant to make available to the Agent
its Pro Rata Share of any payment under any Letter of Credit shall not relieve
any other L/C Participant of its obligation hereunder to make available to the
Agent its Pro Rata Share of any payment under any Letter of Credit on the date
required, as specified above, but no L/C Participant shall be responsible for
the failure of any other L/C Participant to make available to the Agent such
other L/C Participant's Pro Rata Share of any such payment.
(d) L/C Participants' Duties Absolute. The obligations of the L/C
Participants to make payments to the Agent with respect to Letters of Credit
shall be irrevocable and not subject to counterclaim, set-off or other defense
or any other qualification or exception whatsoever and shall be made in
accordance with the terms and conditions of this Agreement under all
circumstances, including, without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability of this Agreement or
any of the other Credit Documents;
(ii) the existence of any claim, set-off, defense or other right
which the Borrower may have at any time against a beneficiary named in a
Letter of Credit, any transferee of any Letter of Credit (or any Person for
whom any such transferee may be acting), the Agent, any Lender, or other
Person, whether in connection with this Agreement, any Letter of Credit,
the transactions contemplated herein or any unrelated transactions
(including any underlying transaction between the Borrower and the
beneficiary named in any such Letter of Credit);
19
(iii) any draft, certificate or any other document presented under
the Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security for the performance
or observance of any of the terms of any of the Credit Documents;
(v) the occurrence of any Default or Event of Default; or
(vi) the failure of any condition precedent set forth in Section
5.02 hereof to have been satisfied at the time of the issuance of any
Letter of Credit unless the Agent shall have received a notice in writing
to such effect from such Lender hereof prior to the issuance of such Letter
of Credit.
2.12 Agreement to Repay Letter of Credit Drawings.
(a) Borrower's Obligation to Pay Drawings. The Borrower hereby
agrees to reimburse the Agent, by making payment to the Agent in immediately
available funds, for any payment or disbursement made by the Agent under any
Letter of Credit issued by it (each such amount so paid until reimbursed, an
Unpaid Drawing) immediately after, and in any event on the date of, notice given
by the Agent to the Borrower of such payment (which notice the Agent hereby
agrees to give promptly after the making of any payment or disbursement under a
Letter of Credit), with interest on the amount so paid or disbursed by the
Agent, to the extent not reimbursed prior to 1:00 P.M. (prevailing Eastern
Standard Time) on the date of such payment or disbursement, from and including
the date paid or disbursed to but excluding the date the Agent is reimbursed
therefor, at a rate per annum which shall be the Prime Rate as in effect from
time to time (plus an additional 300 basis points (3.00%) per annum, if not
reimbursed by the second (2nd) Business Day following any such notice of payment
or disbursement), such interest to be payable on demand.
(b) Borrower's Obligations Absolute. The Borrower's obligations
under this Section 2.12 to reimburse the Agent with respect to Unpaid Drawings
(including, in each case, interest thereon) issued by it shall be absolute and
unconditional under any and all circumstances and irrespective of any set-off,
counterclaim or defense to payment which the Borrower or any other Person may
have or have had against the Agent or any Lender, including, without limitation,
any defense based upon the failure of any drawing under a Letter of Credit (each
a Drawing) to conform to the terms of the Letter of Credit or any non-
application or misapplication by the beneficiary of the proceeds of such
Drawing; provided, that the Borrower shall not be obligated to reimburse the
Agent for any wrongful payment made by the Agent under a Letter of Credit as a
result of acts or omissions constituting willful misconduct or gross negligence
on the part of the Agent.
2.13 Indemnification; Nature of Agent's Duties.
(a) Indemnification Generally. The Borrower hereby agrees to
protect, indemnify, pay and save the Agent harmless from and against any and all
claims, demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable attorneys' fees) that the Agent may incur or be subject to
as a consequence, direct or indirect, of (i) the issuance of any Letter of
Credit or (ii) the failure of the Agent to honor a Drawing under a Letter of
Credit as a result of any act or omission, whether rightful or wrongful, of any
present or future de jure or de facto
20
government or governmental authority (all such actions or omissions, herein
called Government Acts).
(b) Allocation of Risk. As between the Borrower and the Agent, the
Borrower shall assume all risks of the acts, omissions or misuse of any Letter
of Credit by the beneficiary thereof. The Agent shall not be responsible: (i)
for the form, validity, sufficiency, accuracy, genuineness or legal effect of
any document submitted by any party in connection with the application for and
issuance of any Letter of Credit, even if it should in fact prove to be in any
or all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii)
for the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, that may prove to be
invalid or ineffective for any reason; (iii) for failure of the beneficiary of a
Letter of Credit to comply fully with conditions required in order to draw upon
a Letter of Credit; (iv) for errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex or
otherwise; (v) for errors in interpretation of technical terms; (vi) for any
loss or delay in the transmission or otherwise of any document required in order
to make a Drawing under a Letter of Credit or of the proceeds thereof; and (vii)
for any consequences arising from causes beyond the control of the Agent,
including, without limitation, any Government Acts. None of the above shall
affect, impair, or prevent the vesting of any of the Agent's rights or powers
hereunder.
(c) Scope of Agent's Duties. In furtherance and extension and not
in limitation of the specific provisions hereinabove set forth, any action taken
or omitted by the Agent under or in connection with any Letter of Credit or the
related drawing certificates, if taken or omitted in good faith, shall not put
the Agent under any resulting liability to the Borrower. The Agent shall not, in
any way, be liable for any failure by it or anyone else to pay any Drawing under
any Letter of Credit as a result of any Government Acts or any other cause
beyond the control of the Agent.
(d) No Limitation as to Reimbursement. Nothing in this Section
2.13 is intended to limit the reimbursement obligation of the Borrower contained
in Section 2.10 hereof. The obligations of the Borrower under this Section 2.13
shall survive the termination of this Agreement. No act or omissions of any
current or prior beneficiary of a Letter of Credit shall in any way affect or
impair the rights of the Agent to enforce any right, power or benefit under this
Agreement.
(e) Limitation of Indemnification. Notwithstanding anything to the
contrary contained in this Section 2.13, (i) the Borrower shall have no
obligation to indemnify the Agent in respect of any liability incurred by the
Agent arising solely out of the gross negligence or willful misconduct of the
Agent, as determined by a court of competent jurisdiction and (ii) the Borrower
shall have a claim against the Agent and the Agent shall be liable to the
Borrower to the extent, but only to the extent, of any direct, as opposed to
consequential, damages suffered by the Borrower which the Borrower proves were
caused by (x) the Agent's willful misconduct or gross negligence in determining
whether the documents presented under a Letter of Credit complied with the terms
of such Letter of Credit or (y) the Agent's willful or grossly negligent failure
to pay under a Letter of Credit after presentation to it of a drawing
certificate and any other documents strictly complying with the terms and
conditions of such Letter of Credit.
2.14 Increased Costs; Illegality; Capital Adequacy; Funding Losses.
(a) Increased Costs and Illegality. In the event that (x) in the
case of clause (i) below, the Agent, and (y) in the case of clauses (ii) and
(iii) below, any Lender, shall have
21
determined (which determination in either case shall, absent manifest error, be
final and conclusive and binding upon all parties hereto):
(i) on any date for determining the LIBOR Rate for any
Interest Period that, by reason of any changes arising on
or after the date of this Agreement affecting the
relevant capital market, (x) adequate and fair means do
not exist for ascertaining the applicable interest rate
on the basis provided for in the definition of LIBOR Rate
or (y) such means will not adequately and fairly reflect
the cost to the Lenders of funding LIBOR Loans for the
relevant Interest Periods; or
(ii) at any time, that such Lender shall incur increased costs
or reductions in the amounts received or receivable
hereunder with respect to any LIBOR Loans because of (x)
any change since the date of this Agreement in any
applicable law, governmental rule, regulation, guideline
or order (or in the interpretation or administration
thereof and including the introduction of any new law or
governmental rule, regulation, guideline or order) (such
as, for example, but not limited to, in the case of a
LIBOR Loan, a change in official reserve requirements,
but, in all events, excluding reserves required under
Regulation D to the extent included in the computation of
the LIBOR Rate) and/or (y) other circumstances affecting
the relevant capital market; or
(iii) at any time, that the making or continuance of any LIBOR
Loan has become unlawful by compliance by such Lender in
good faith with any law, governmental rule, regulation,
guideline or order (or would conflict with any such
governmental rule, regulation, guideline or order not
having the force of law even though the failure to comply
therewith would not be unlawful), or has become
impracticable as a result of a contingency occurring
after the date of this Agreement which materially and
adversely affects the relevant capital market;
then, and in any such event, the Lender so affected (or the Agent, in the case
of clause (i) above) shall on such date give notice to the Borrower (and the
other Lenders and/or the Agent, as the case may be) of such determination.
Thereafter (x) in the case of clause (i) above, LIBOR Loans shall no longer be
available until such time as the Agent notifies the Borrower and the Lenders
that the circumstances giving rise to such notice by the Agent no longer exist,
and any Notice of Borrowing delivered pursuant to Section 2.03(a) hereof or
notice of conversion or continuance delivered pursuant to Section 2.08 hereof
with respect to a LIBOR Loan shall be deemed rescinded by the Borrower, (y) in
the case of clause (ii) above, the Borrower shall pay to such Lender, upon
written demand therefor, such additional amounts (in the form of an increased
rate of, or a different method of calculating, interest or otherwise as such
Lender in its sole discretion shall determine) as shall be required to
compensate such Lender for such increased costs or reductions in amounts
receivable hereunder (a written notice as to the additional amounts owed to such
Lender, showing in reasonable detail the basis for the calculation thereof,
submitted to the Borrower by such Lender shall, absent manifest error, be final
and conclusive and binding upon all parties hereto) and (z) in the case of
clause (iii) above, LIBOR Loans shall no longer be available until such time as
such Lender notifies the Borrower that the circumstances giving rise to such
notice no longer exist, any Notice of Borrowing delivered pursuant to Section
2.03(a) hereof or notice of conversion or continuance delivered pursuant to
Section 2.08 hereof with respect to LIBOR Loans shall be deemed rescinded by the
Borrower, and any LIBOR Loans that are then outstanding shall be automatically
converted
22
to Prime Rate Loans; provided, however that if such Lender, in its sole
discretion, determines that such circumstances can only be alleviated by
repayment of such Loans, then, upon demand, the Borrower shall repay in full
such Loans, together with accrued but unpaid interest thereon.
(b) Capital Adequacy. If after the date hereof, the adoption of any
applicable law, rule or regulation regarding capital adequacy, or any change
therein, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by a Lender or its
parent with any request or directive made or adopted after the date hereof
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 or its parent's capital or assets
as a consequence of such Lender's commitments or obligations hereunder to a
level below that which such Lender or its parent could have achieved but for
such adoption, effectiveness, change or compliance (taking into consideration
such Lender's or its parent's policies with respect to capital adequacy), then
from time to time, upon demand, the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender or its parent for
such reduction. Such Lender, upon determining in good faith that any additional
amounts will be payable pursuant to this Section 2.14, will give prompt written
notice thereof to the Borrower, which notice shall set forth in reasonable
detail the basis of the calculation of such additional amounts, although the
failure to give any such notice shall not release or diminish any of the
Borrower's obligations to pay additional amounts pursuant to this Section 2.14
upon receipt of such notice.
(c) Funding Losses. The Borrower shall compensate each Lender, upon
its written request (which request shall set forth the basis for requesting such
compensation), for all reasonable losses, expenses and liabilities, including,
without limitation, any loss, expense or liability incurred by reason of the
liquidation or reemployment of deposits or other funds required by such Lender
to fund its LIBOR Loans (all such losses Funding Losses) which such Lender may
sustain: (x) if for any reason an advance of, or conversion from or into, LIBOR
Loans does not occur on a date specified therefor in a Notice of Borrowing or
notice of conversion given pursuant to Section 2.08(a) or (b), as the case may
be, (whether or not withdrawn by the Borrower or deemed withdrawn pursuant to
Section 2.14(a)); (y) if any repayment (including any prepayment made pursuant
to Section 4.01 or 4.02) or conversion of any of its LIBOR Loans occurs on a
date which is not the last day of an Interest Period with respect thereto; or
(z) as a consequence of (i) any other default by the Borrower to repay its Loans
when required by the terms of this Agreement or any Note held by such Lender or
(ii) any prepayment or conversion made pursuant to Section 2.14(a). The amount
of compensation available to any Lender pursuant to this Section 2.14(c) shall
be determined based on the assumption that such Lender has funded the entire
amount of the relevant LIBOR Loan through match funding obtained in the London
interbank market.
2.15 Computation. Interest and any fees or compensation based upon a per
annum rate shall be calculated on the basis of a 360 day year for the actual
number of days elapsed.
SECTION 3. FEES.
3.01 Upfront Fees. The Borrower shall pay, or have paid, to the Agent on
or before the Closing Date the following up-front facility fees: (i) in respect
of the Revolving Credit Facility, a one-time upfront facility fee equal to
thirty seven and one-half (37 1/2) basis points (.375%) of the aggregate amount
of the Revolving Credit Commitments, and (ii) in respect of the Term Loan
Facility, a one-time upfront facility fee equal to fifty (50) basis points
(.50%) of the aggregate amount of the Term Loan Commitments. On the Closing
Date, the Agent shall disburse such fees to the Lenders based on their
respective Pro Rata Shares. The Borrower acknowledges that such fees are a
liquidated damages amount and, together with the amounts payable pursuant to
Section
23
5.01(c) hereof, constitute reasonable compensation to the Agent and the Lenders
for their expenses and services in connection with the arrangement of their
respective Revolving Credit Commitments and Term Loan Commitments and the
negotiations and preparation of this Agreement and the other Credit Documents.
3.02 Commitment Fee. The Borrower shall pay to the Agent for the ratable
account of the Lenders based on their respective Pro Rata Shares, quarterly in
arrears, a commitment fee for the period from and including the Closing Date
until the Revolving Credit Expiration Date, computed at a rate equal to the
Applicable Margin (expressed as a percentage) of the average daily amount of the
Availability. Such fee shall be payable commencing on December 31, 1999 (for the
period commencing on the Closing Date and ending on said December 31, 1999), and
continuing quarterly on the last Business Day of each March, June, September and
December occurring thereafter.
3.03 Letter of Credit Fee. The Borrower shall pay to the Agent for the
ratable account of the Lenders based on their respective Pro Rata Shares,
quarterly in advance, a fee in respect of the Letters of Credit (the Letter of
Credit Fee) computed at a rate equal to the Applicable Margin for LIBOR Loans
(expressed as a percentage) of the aggregate Stated Amount of the Letters of
Credit outstanding as of the first day of each January, April, July and October.
Such fee shall be payable commencing on January 2, 1999 and continuing quarterly
on the first Business Day of each January, April, July and October occurring
thereafter. For the avoidance of doubt, the foregoing calculation of the Letter
of Credit Fee may be calculated in accordance with the following formula:
A (multiplied by) B (multiplied by) N
-----
360
; with A equal to the aggregated Stated Amount of the Letters of Credit
outstanding as of the first day of the relevant payment period , B equal to the
Applicable Margin for LIBOR Loans then in effect (expressed as a decimal)and N
equal to the actual number of days elapsed during the period commencing on said
first day and ending on the last day of the relevant payment period.
3.04 Letter of Credit Processing Fee. The Borrower shall pay to the Agent
for its sole account, upon each issuance of, drawing under, and/or amendment of,
a Letter of Credit, such amounts as shall at the time of such issuance, drawing
or amendment be the administrative charge which the Agent customarily charges
for such issuances of, drawings under or amendments of, letters of credit issued
by it (Letter of Credit Processing Fees).
SECTION 4. PREPAYMENTS AND PAYMENTS GENERALLY.
4.01 Voluntary Prepayments. The Borrower may prepay any Loan, in whole or
in part, without premium or penalty (except as provided in Section 2.14(c)
hereof) upon at least three (3) Business Days' irrevocable notice to each Lender
(or one (1) Business Day's irrevocable notice in the case of a prepayment of a
Prime Rate Loan), specifying (i) the date and the amount of the prepayment, (ii)
whether such prepayment is in respect of LIBOR Loans, Prime Rate Loans or a
combination thereof and (iii) whether such prepayment is in respect of the
Revolving Credit Loans or the Term Loans ; provided, that any such prepayment
shall include all accrued but unpaid interest in respect of the Loans being
prepaid. The principal portion of any partial prepayment shall be in an amount
equal to $500,000 or any whole multiple thereof in the case of a prepayment in
respect of the Revolving Credit Loans or $1,000,000 or any whole multiple
thereof in the case of a prepayment in respect of the Term Loans. All
prepayments of principal on the Term Loans pursuant
24
to this Section 4.01 shall be applied to the Borrower's principal repayment
obligation pursuant to Section 2.06 hereof in inverse order of maturity.
4.02 Mandatory Prepayments. (a) Revolving Credit Loans. Immediately upon
the Revolving Credit Obligations exceeding the Maximum Available Credit Amount,
the Borrower shall make, or cause to be made, a mandatory prepayment of the
Revolving Credit Obligations in an amount equal to such excess, together with
accrued but unpaid interest thereon. Without limiting the foregoing, immediately
upon the Letter of Credit Outstandings exceeding the Letter of Credit Sublimit,
the Borrower shall make, or cause to be made, payment to the Agent in the amount
of such excess to be held as cash collateral (on terms and conditions
established by the Agent and reasonably acceptable to the Borrower) to secure
such Letter of Credit Outstandings in excess of the Letter of Credit Sublimit.
Provided that no Default or Event of Default has occurred and is then
continuing, such cash collateral shall be released by the Agent (on behalf of
the Lenders) if and when the Letter of Credit Outstandings have been reduced to
an amount equal to or less than the Letter of Credit Sublimit then in effect.
(b) Term Loans. Immediately upon receipt of Net Cash Proceeds from
any sale or issuance of any shares of the Borrower's common stock or any class
of its preferred stock, any securities convertible into, or exchangeable for,
shares of any such stock, or any warrants, rights or options to acquire any such
shares or any public or private sale or issuance of any of the Borrower's notes,
bonds, debentures or other forms of debt instruments or securities, the Borrower
will prepay the outstanding Term Loans in an amount equal to thirty three
percent (33%) of such Net Cash Proceeds. Any and all prepayments received
pursuant to this Section 4.02(b) shall be applied to the Borrower's repayment
obligations on the Term Loans pursuant to Section 2.06 hereof in inverse order
of maturity. For the avoidance of doubt, the Borrower hereby acknowledges that
this Section 4.02(b) governs the application of proceeds realized upon the sale
or issuance of its securities as described above should such offering occur
while any of the Borrower's Obligations in respect of the Term Loans are
outstanding, and the foregoing shall not be deemed or construed, by implication
or otherwise, as a consent by any Lender to any such sale or issuance that would
otherwise be prohibited or restricted by the terms of this Agreement.
4.03 Application of Mandatory Prepayments. Subject to the specific
applications set forth in Section 4.02 hereof, any prepayment received pursuant
to Section 4.02 hereof shall be applied first to reduce amounts owing in respect
of any Prime Rate Loans and second to reduce amounts owing in respect of any
LIBOR Loans (provided that, if there is more than one outstanding LIBOR Loan,
then amounts owing in respect of the LIBOR Loans with the Interest Period ending
on the date that is the least number of days from the date of such prepayment
shall be reduced first before reduction of amounts owing in respect of other
LIBOR Loans). Within the order of priority set forth above, the amount of any
prepayment received hereunder shall be applied to the Loans first to reduce
amounts owing in respect of accrued but unpaid interest on the Loans being
prepaid and second to reduce amounts owing in respect of outstanding principal
of such loans. If by operation of the provisions set forth above or any other
reason, payment of principal in respect of a LIBOR Loan is received (from any
source) on a date other than the last day of the Interest Period pertaining to
such Loan, including, without limitation, due to acceleration of said amount
following the occurrence of an Event of Default, then the Borrower shall pay to
each Lender an additional amount equal to the applicable Funding Losses. Such
Funding Losses shall be payable on demand by such affected Lender.
4.04 General Provisions as to Payments. The Borrower shall make each
payment of principal of, and interest on, the Loans and of fees due hereunder,
not later than 2:00 p.m. (prevailing Eastern Standard Time) on the date when
due, in immediately available funds to the Agent at its Payment Office. Provided
that the Agent receives such payments by such time, the
25
Agent will distribute to each Lender on the same day its Pro Rata Share of each
such payment received by the Agent.
4.05 Net Payments. All payments made by the Borrower hereunder shall be
made without setoff or counterclaim. All such payments shall be made free and
clear of and without deduction or withholding for, any present or future taxes,
levies, imposts, duties, fees, assessments or other charges of whatever nature,
now or hereafter imposed by any jurisdiction or by any department, agency, state
or other political subdivision or taxing authority thereof or therein (but
excluding any tax imposed on or measured by the net income of a Lender pursuant
to the laws of the jurisdiction in which the principal office or Payment Office
of such Lender is located or under the laws of any political subdivision or
taxing authority of any such jurisdiction in which the principal office or
Payment Office of such Lender is located) and all interest, penalties, or
similar liabilities with respect thereto (collectively, Taxes). If any Taxes are
so levied or imposed, the Borrower agrees to pay the full amount of such Taxes,
and such additional amounts as may be necessary so that every net payment of
amounts due hereunder, after withholding or deduction for or on account of any
Taxes, will not be less than the amounts provided for herein. The Borrower shall
furnish to the Agent, within thirty (30) days after the date the payment of any
Taxes is due pursuant to applicable law, certified copies of tax receipts
evidencing such payment by the Borrower. The Borrower shall indemnify and hold
harmless each Lender and reimburse each Lender upon the written request of such
Lender setting forth the basis for requesting such amount, for the amount of any
Taxes so levied or imposed and paid by such Lender.
In addition, the Borrower agrees to pay any present or future stamp
or documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any payment made by the Borrower or the Agent hereunder
or from the execution, delivery or registration of, or otherwise with respect
to, this Agreement or any other Credit Document.
4.06 Debiting of Account. If so requested by the Agent, the Borrower
shall maintain a demand deposit account (a DDA Account) at the Agent, and the
Agent may, and the Borrower hereby authorizes the Agent to, debit any such DDA
Account or such other account and/or certificate of deposit maintained by the
Borrower with the Agent for the amount of any payment, as and when such payment
becomes due hereunder, whether such payment is for accrued interest, principal
or expense, even if debiting any such account or certificate of deposit results
in a loss or reduction of interest to the Borrower or the imposition of a
penalty applicable to the early withdrawal of time deposits. Such authorization
shall not affect the Borrower's obligation to pay when due all amounts payable
hereunder, whether or not there are sufficient funds in any accounts of the
Borrower. The foregoing rights of the Agent to debit the Borrower's accounts
shall be in addition to, and not in limitation of, any rights of set-off which
the Agent may have hereunder or under any Credit Document. Nothing in this
Section 4.06 or otherwise in this Agreement shall be interpreted to obligate the
Agent to so debit, or set-off against, any account of the Borrower maintained
with the Agent to satisfy any of the Obligations of the Borrower, such right to
so debit and/or set-off to be exercised by the Agent in its sole and absolute
discretion.
SECTION 5. CONDITIONS.
5.01 Documents Required for Initial Advance. The obligation of each
Lender to make the initial advances under the Revolving Credit Facility
requested on the Closing Date is subject to the satisfaction of all of the
following conditions precedent:
(a) Certain Documents. The Agent shall have received on or before the
Closing Date all of the following, each in form and substance satisfactory to
each of the Lenders and in such quantities as the Agent shall reasonably
request:
26
(i) the following Credit Documents, each duly executed and
delivered by the parties thereto:
(A) this Agreement; and
(B) a Revolving Credit Note and a Term Loan Note for each
Lender;
(ii) a Notice of Borrowing requesting the initial advance
hereunder in an amount at least sufficient to pay in full the
"Revolving Credit Loans" outstanding under the Existing
Credit Agreement;
(iii) pre-closing UCC lien search report and tax lien and judgment
search reports with respect to the Borrower and the PSA
Group, in all appropriate jurisdictions;
(iv) an incumbency certificate of an appropriate officer of the
Borrower certifying, as of the Closing Date, the names,
titles and true signatures of the officers certified to
execute the Credit Documents, and the names, titles and true
signatures of such officers of the Borrower authorized to
deliver Notices of Borrowing and Letter of Credit Requests on
behalf of the Borrower;
(v) a favorable New Jersey and New York law opinion of outside
counsel to the Borrower addressed to the Agent and the
Lenders to the effect that the Credit Documents have been
duly authorized and executed and are enforceable against the
Borrower in accordance with their respective terms, and as to
such other matters reasonably requested by the Agent and the
Lenders;
(vi) a secretary's certificate for each of the Borrower to which
are attached certified copies of (x) the articles of
incorporation of the Borrower and all amendments thereto,
certified by an appropriate corporate officer, (y) the By-
Laws of the Borrower amendments thereto, and (z) appropriate
resolutions authorizing the transactions herein contemplated;
(vii) a certificate from the chief financial officer of the
Borrower dated the Closing Date to the effect that as of such
date (i) no Default or Event of Default has occurred or is
continuing, (ii) since September 30, 1999, there has been no
material adverse change in the business, financial condition
or operations of the Borrower and (iii) each of the
representations and warranties of the Borrower contained in
this Agreement are true in all material respects;
(viii) good standing certificates issued by the appropriate official
of the state in which the Borrower is incorporated; and such
good standing certificates issued by the appropriate official
of each of the states in which the Borrower is qualified as a
foreign corporation as the Lenders shall require;
(ix) certificates of insurance evidencing the existence and full
force and effect of the insurance described in Section 6.18
hereof;
27
(x) a letter from the certified public accountants for the
Borrower consenting to the reliance by the Agent and the
Lenders upon the financial statements of the Borrower;
(xi) evidence reasonably satisfactory to the Agent and the Lenders
regarding the resolution of matters pertaining to the civil
investigative demand served upon the Borrower by the United
States Department of Justice on April 4, 1995;
(xii) delivery to the Agent of a "Year 2000 Questionnaire" for the
Borrower and the PSA Group, in each case, in the form
furnished to the Borrower by the Agent with all required
responses duly completed to the satisfaction of the Agent;
and
(xiii) such other documents as the Lenders may reasonably require,
including, without limitation, other agreements, instruments,
or indentures to which any Obligor is a party, including,
without limitation, financing statements, proofs, opinions,
guaranties and other written assurances.
(b) Consummation of PSA Acquisition. In connection with the
Acquisition, the Borrower shall have furnished to each Lender the following
materials and information, in each case in form and substance satisfactory to
each Lender:
(i) the audited consolidated financial statements of the
PSA Group for the fiscal year ended December 31, 1997,
which shall be in substantially conformity with the
financial statements and other data previously
furnished to the Lenders regarding the PSA Group;
(ii) A pro forma opening balance sheet for the Borrower
showing the results of the transaction contemplated in
the Asset Purchase Agreement as of the Closing Date;
(iii) a certified true, correct and complete copy of the
Asset Purchase Agreement, as amended (if at all)
through the Closing Date, together with all exhibits,
schedules, annexes and other attachments thereto; and
(iii) evidence of consummation of the Acquisition,
including, without limitation, evidence of payment to
the PSA Group of the Borrower's Equity Contribution and
certified copies of each of the documents and other
materials required to be delivered as conditions
precedent to the Acquisition pursuant to Article VII of
the Asset Purchase Agreement.
(c) Fees and Expenses. The Borrower shall have paid (or otherwise
satisfied as determined by the Agent and the Lenders) to the Agent and/or the
Lenders, as the case may be, all fees hereunder that are expenses due and
payable on or prior to the Closing Date, including, without limitation, the fees
specified in Section 3.01 hereof and fees and expenses incurred by the Agent
and Lenders related to the preparation, negotiation and closing of the
transaction contemplated herein that have been requested by such parties
pursuant to invoices submitted to the Borrower on or prior to the Closing Date.
5.02 Requirements for Any Advance and Issuance of Letter of Credit
. The obligation of the Lenders to make any Revolving Credit Loans and the
obligation of the Agent to issue any Letter of Credit, in each case subsequent
to the Closing Date, is subject to satisfaction of the following conditions:
(i) the representations and warranties contained in Section 6
hereof are true and correct on and as of the date of funding
of each such Loan or date of issuance of such Letter of
Credit, as the case may be;
28
(ii) no Default or Event of Default has occurred and is
continuing;
(iii) there has been no material adverse change in the Borrower's
or any other Obligor's condition, financial or otherwise,
since the date of this Agreement; and
(iv) all of the Credit Documents remain in full force and effect.
SECTION 6. REPRESENTATIONS AND WARRANTIES.
In order to induce the Lenders to enter into this Agreement, the
Borrower represents and warrants with respect to itself and, to the extent
applicable, each of its Subsidiaries, and agrees that each such representation
and warranty shall be deemed to be restated at the time of funding of each Loan
and at the time of issuance of each Letter of Credit, that:
6.01 Organization; Authority. The Borrower is a corporation, duly
organized, validly existing and in good standing under the laws of the state of
its incorporation, is duly qualified as a foreign corporation and is in good
standing under the laws of each jurisdiction in which it is required to be
qualified because of the business it conducts or the property it owns, and has
the necessary power and authority to enter into and perform its obligations
under the Credit Documents. The execution and performance of the Credit
Documents have been duly authorized by all necessary and appropriate corporate
proceedings on the part of the Borrower, and, upon their execution and delivery,
they will be valid, binding, and enforceable in accordance with their terms; the
execution and performance of the Credit Documents will not violate any orders,
laws or regulations applicable to any such Obligor, any of their respective
organizational documents, or any instruments, indentures or agreements
(including any provisions pertaining to subordinated debt) to which they are a
party or by which any such Obligor or any of their respective properties are
bound; and all consents, approvals, licenses, franchises, patents, trademarks
and other general intangibles required in connection with this Agreement, the
other Credit Documents or the operation of any such Obligor's business have been
obtained and are in full force and effect. All of the issued and outstanding
stock of the Borrower has been validly issued and fully paid and is non-
assessable. The Borrower's Subsidiary is duly organized, validly existing, and
in good standing under the laws of the jurisdiction of its organization and is
duly qualified as a foreign corporation and is in good standing under the laws
of each jurisdiction in which it is required to be qualified because of the
business it conducts or the property it owns.
6.02 Use of Proceeds; Margin Regulation. The proceeds of the
Revolving Credit Loans shall be used only for the following purposes: (i) to
repay all amounts outstanding under the Existing Credit Agreement, (ii) to
finance the Borrower's accounts receivable, purchase equipment, make Capital
Expenditures permitted hereunder, (iii) in connection with acquisitions
permitted pursuant to Section 8.03, (iv) to finance a portion of the
consideration payable to the PSA Group pursuant to Section 1.2(a) of the Asset
Purchase Agreement in an amount not to exceed the lesser of (y) $10,000,000 and
(z) the amount by which the full amount of the consideration payable to the PSA
Group pursuant to Section 1.2(a) of the Asset Purchase Agreement exceeds the sum
of the Borrower's Equity Contribution and the aggregate proceeds of the Term
Loans, or (v) in connection with the Borrower's other working capital needs. The
Letters of Credit shall be used solely to support Permitted L/C Obligations. The
proceeds of the Term Loans shall be used exclusively to finance a portion of the
consideration payable by the Borrower to the PSA Group pursuant to Section
1.2(a) of the Asset Purchase Agreement upon the consummation of the Acquisition
therein contemplated, together with any fees and expenses related thereto. The
Borrower is not engaged in
29
the business of extending credit for the purpose of buying or carrying "margin
stock" (within the meaning of Regulation U issued by the Board of Governors of
the Federal Reserve System). Neither the making of any Loan, the issuance of any
Letter of Credit, nor the use of the proceeds thereof, will violate or be
inconsistent with the provisions of Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System.
6.03 Specific Financial Statements .
(i) The consolidated financial statements of the Borrower as of
December 31, 1998, audited by KPMG Peat Marwick, LLP and the
six (6) and nine (9) month statements as of June 30, 1999 and
September 30, 1999, respectively, prepared by management,
copies of which have heretofore been provided to the Agent,
present fairly the financial condition of the Borrower as of
such dates and the results of operations for the periods then
ended. All such financial statements, including the related
schedules and notes thereto, have been prepared in accordance
with GAAP, consistently applied.
(ii) There has been no material adverse change in the financial
condition of the Borrower or any Subsidiary or Affiliate
thereof since September 30, 1999.
(iii) Except as reflected in the financial statements referred to
in clause (i) of this Section 6.03, the Borrower has no
material liabilities, absolute or contingent.
6.04 Burdensome Agreements. Neither the Borrower nor any of its
Subsidiaries is a party to any indenture, loan or credit agreement or any other
agreement, contract or instrument, or subject to any certificate of
incorporation, by-law, or corporate restriction, which may reasonably be
expected to have an adverse effect on its corporate activities, properties,
assets, operations or conditions, financial or otherwise, or on its ability to
carry out its obligations under the Credit Documents.
6.05 Suits. Except as disclosed on Annex I hereto, there are no
actions, suits, proceedings, or claims pending or, to the best knowledge of the
Borrower, threatened against the Borrower or its Subsidiaries, or any of their
property that, if determined adversely, are reasonably likely to have a material
adverse effect on the business, properties, assets, operations, financial
condition or prospects of the Borrower, or its Subsidiaries, taken as a whole.
6.06 Defaults. Except as disclosed on Annex I hereto, neither the
Borrower nor any of its Subsidiaries is in default under any agreement to which
it is a party or by which it or any of its property is bound, or under any
indenture or instrument evidencing any Indebtedness, and neither the execution
of, nor performance under, the Credit Documents will create a default or any
Lien or encumbrance under any such agreement, indenture or instrument other than
Liens or encumbrances in favor of the Lenders.
6.07 ERISA. Each Plan is in substantial compliance with ERISA and
the applicable provisions of the Code and there does not exist with respect to
any such Plan an "accumulated funding deficiency" (as such term is defined in
ERISA). No material liability to the PBGC has been incurred by the Borrower with
respect to any such Plan and no "Reportable Event" under ERISA has occurred.
Neither the Borrower nor any of its Subsidiaries has actual or anticipated
liability under Section 4971 of the Code (relating to tax on failure to meet the
minimum funding standard of Section 412 of the Code) with respect to any
Multiemployer Plan. No
30
proceeding have been instituted to terminate any Plan and no condition exists
which presents a material risk to the Borrower or any of its Subsidiaries of
incurring a liability to or on account of any Plan pursuant to the provisions of
ERISA or the applicable provisions of the Code.
6.08 Tax Returns and Taxes. Each of the Borrower and its Subsidiaries has
filed all federal, state and local tax returns required to be filed and has paid
all taxes, assessments and governmental charges and levies thereon, including
interest and penalties, except where the same are being contested in good faith
by appropriate proceedings and for which adequate reserves have been set aside,
and no liens for taxes have been filed and no claims are being assessed by a
governmental authority with respect to any taxes. The charges, accruals and
reserves on the books of the Borrower or its Subsidiaries, as the case may be,
with respect to taxes or other governmental charges are adequate.
6.09 Compliance with Statutes, etc. Each of the Borrower and its
Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property (including, without limitation, applicable statutes,
regulations, orders and restrictions relating to environmental standards and
controls), except such noncompliances as would not, in the aggregate, have a
material adverse effect on the business, operations, property, assets or
financial condition of the Borrower or of the Borrower and its Subsidiaries
taken as a whole.
6.10 Environmental Compliance. To the best of the Borrower's knowledge,
after due inquiry and investigation, no Lien has attached to any revenues or any
real or personal property owned by the Borrower or any of its Subsidiaries in
any jurisdiction, arising from an intentional or unintentional action or
omission of the Borrower or any of its Subsidiaries or any previous owner and/or
operator of said real property, resulting from the Dumping of hazardous
substances or wastes into the atmosphere or waters or onto lands.
6.11 No Notification of Dumping of Hazardous Substances. Neither the
Borrower nor any of its Subsidiaries has received a summons, citation,
directive, letter, or other communication, written or oral, from any
jurisdiction, or political sub-division or any agency or instrumentality
thereof, concerning any intentional or unintentional action or omission on the
part of the Borrower or any of its Subsidiaries arising from the Dumping of
hazardous substances into the atmosphere or waters, or onto the lands in any
jurisdiction.
6.12 No Authorizations or Approvals. No authorization or approval or other
action by, and no notice to, or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and performance by
the Borrower of this Agreement and the other Credit Documents or the
consummation of the Acquisition other than such authorizations that have been
obtain prior to the Closing Date and continue to be in full force and effect.
6.13 Not an Investment Company. The Borrower is not an "investment
company" or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.
6.14 Subsidiaries. Annex I hereto lists each Subsidiary of the Borrower
(and the direct or indirect ownership interest of the Borrower therein), in each
case existing on the Closing Date. Neither the Borrower nor any of its
Subsidiaries has any interests in any Person other than as set forth in said
Annex I. No such Subsidiary has any Subsidiaries. No significant business is
conducted, and no significant revenues are generated, direct or indirectly,
through or by Health Care, Infield Medical Technologies, Inc. or Xxxxxx Xxxxxx
Venture Technology, Inc. and neither Health
31
Care, Infield Medical Technology, Inc. nor Xxxxxx Xxxxxx Venture Technologies,
Inc. have any right, interest or title to any material assets or properties.
6.15 Intellectual Property, etc. The Borrower and each of its Subsidiaries
have obtained all material patents, trademarks, servicemarks, trade names,
copyrights, technology, processes, licenses and other rights (Intellectual
Property), free from any burdensome restrictions, that are necessary for the
operation of their respective businesses as presently conducted and as proposed
to be conducted (including, without limitation, any proposed business related to
the business to be conducted by the Borrower subsequent to the consummation of
the transaction contemplated in the Asset Purchase Agreement). No claim has been
asserted or threatened questioning the use of such Intellectual Property, nor
does the Borrower know of any valid basis for any such claim.
6.16 Labor Matters. Except as disclosed on Annex I, neither the Borrower
nor any of its Subsidiaries is a party to a labor contract. There are no
strikes, lockouts or other disputes relating to any collective bargaining or
similar agreement to which the Borrower or any of its Subsidiaries is a party.
6.17 Assets and Properties. The Borrower and its Subsidiaries have good
and marketable title to all of their respective assets and properties (tangible
and intangible) and all such assets and properties are free and clear of all
Liens (except Permitted Liens). Substantially all of the assets and properties
owned by, leased to or used by the Borrower or its Subsidiaries are in adequate
operating condition and repair, ordinary wear and tear excepted, are free and
clear of any known defects except such defects as do not substantially increase
with the continued use thereof in the conduct of normal operation, and such
assets are able to serve the function for which they are currently being used,
except in each case where the failure of such asset or property to meet such
requirements would not have or is not expected to have a material adverse effect
on the operations of the Borrower or its Subsidiaries, taken as a whole.
6.18 Insurance. Annex I hereto lists all material insurance contracts and
binders of the Borrower and its Subsidiaries which are currently in full force
and effect. Such contracts and binders provide coverages which are usual and
customary in the business of the Borrower and its Subsidiaries as to amount and
scope. If requested by the Agent, each such insurance contract and binder shall
contain standard lender's endorsement and loss payee endorsements in favor of
the Agent, on behalf of the Lenders, and be subject to cancellation or reduction
in coverage only upon thirty (30) days' prior written notice thereof to the
Agent.
6.19 True and Complete Disclosure. All factual information (taken as a
whole) heretofore or contemporaneously furnished by the Borrower to the Agent or
any of the Lenders for the purposes of or in connection with this Agreement or
any transactions contemplated herein is, and all other such factual information
(taken as a whole) hereafter furnished by or on behalf of such Persons in
writing to any Lender will be, true and accurate in all material respects on the
date as of which such information is dated or certified and does not omit to
state any fact necessary to make such information (taken as a whole) not
misleading at such time in light of the circumstances under which such
information was provided.
6.20 Asset Purchase Agreement. The documents and materials delivered to
the Lenders pursuant to Section 5.02 (b) hereof constitute the entire agreement
and understanding among the Borrower, any and all Affiliates of the Borrower and
the PSA Group and any and all Affiliates of the PSA Group regarding the
transactions contemplated therein. All representations and
32
warranties of the Borrower set forth in Article II of the Asset Purchase
Agreement are true and correct in all material respects and, to the best of the
Borrower's knowledge after diligent inquiry, all representations and warranties
of the PSA Group set forth in Article III of the Asset Purchase Agreement are
true and correct in all material respects. The Assumed Liabilities (as defined
in the Asset Purchase Agreement) do not exceed $600,000.
6.21 Year 2000 Compliance The Borrower has conducted a comprehensive
review and assessment of the computer applications of the Borrower and its
Subsidiaries with respect to the "year 2000 problem" (that is, the risk that
computer applications may not be able to properly perform data-sensitive
functions after December 31, 1999). The Borrower has conducted a similar review
of the computer applications of the PSA Group which are being acquired in the
Acquisition. Based on that review, the Borrower does not believe the year 2000
problem will result in a material adverse change in business condition
(financial or otherwise) operations, properties, or business prospects of the
Borrower or its Subsidiaries (taken as a Consolidated whole) or the ability of
the Borrower to repay the Obligations.
SECTION 7. AFFIRMATIVE COVENANTS.
The Borrower covenants and agrees that for so long as there are any
outstanding Obligations hereunder, or the Agent or the Lenders shall have any
obligation hereunder, the Borrower shall (and, as applicable, shall cause each
of its Subsidiaries (including the Guarantors) to):
7.01 Payment of Indebtedness. Pay the Credit Obligations in accordance
with their respective terms and pay and perform its other Indebtedness and
obligations in accordance with their terms.
7.02 Payment of Taxes, Etc. Pay and discharge all taxes, assessments and
governmental charges or levies imposed upon it, or upon its properties, prior to
the date on which penalties attach thereto, provided, however, that the Borrower
and its Subsidiaries shall not be required to pay or discharge such tax,
assessment, governmental charge or levy if the validity, amount or applicability
thereof is being contested by the Borrower or such Subsidiaries in good faith,
by appropriate proceedings and with diligence and continuity (and for which
adequate reserves therefor are maintained on the books of the Borrower or such
Subsidiaries, as the case may be).
7.03 Reporting Requirements. Furnish to the Agent and the Lenders:
(i) as soon as available and in any event within one hundred (100) days
after the end of each fiscal year of the Borrower, an annual audit
report for the Borrower, including, but not limited to, the balance
sheet of the Borrower as of the end of such fiscal year and the
statements of operations and cash flows of the Borrower for such
fiscal year, setting forth in comparative form the corresponding
figures for the preceding fiscal year, prepared in accordance with
GAAP, consistently applied, all in reasonable detail and prepared on
a Consolidated and consolidating basis and in each case duly
certified by independent certified public accountants of recognized
standing acceptable to the Agent. At the same time as the annual
report is so provided to the Agent and the Lenders, the Borrower
shall also provide to the Agent and the Lenders its Annual Report on
Form 10-KSB (or successor form) prescribed by the SEC for such fiscal
year; and
33
(ii) as soon as available and in any event within sixty (60) days after
the end of the first three quarters of each fiscal year of the
Borrower, management prepared Consolidated and consolidating
financial statements including, but not limited to, a balance sheet,
income statement and cash flow statement prepared in accordance with
GAAP, consistently applied and in form and substance satisfactory to
the Agent for the quarter and the period commencing at the end of the
previous fiscal year and ending with the end of such quarter. In
addition, at the times of delivery to the Agent and the Lenders of
such quarterly reports, the Borrower shall also deliver to the Agent
and the Lenders its Quarterly Report on Form 10-QSB (or successor
form) prescribed by the SEC for such fiscal year; and
(iii) promptly after filing, copies of any and all public disclosures of
the Borrower whether to the SEC or otherwise, including but not
limited to any reports on Form 8-K (or successor form) prescribed by
the SEC, and any proxy and registration statements;
(iv) within six (6) months after the end of the Borrower's fiscal year, a
management letter prepared by the independent certified public
accountants of the Borrower;
(v) promptly upon delivery of the same to the PSA Group, or receipt of
the same from the PSA Group, copies of all notices, certificates,
financial statements or other information required to be furnished
pursuant to the Asset Purchase Agreement or any of the other
Acquisition Documents;
(vi) Without limiting the generality of clause (v) above, as soon as
available and in any event within sixty (60) days of the Closing
Date, the audited consolidated financial statements of the PSA Group
for the fiscal years ended September 30, 1998 and September 30, 1999,
which in all cases shall be in substantially conformity with the
financial statements and other data previously furnished to the
Lenders regarding the PSA Group; and
(vii) such other information as may be reasonably requested by the Agent
and any Lender respecting the condition or operations, financial or
otherwise, of the Borrower and the Subsidiaries and their respective
businesses.
7.04 Compliance Certificates. Furnish to the Agent and the Lenders,
together with each set of financial statements described in clauses (i) and (ii)
of Section 7.03 hereof, a compliance certificate, substantially in the form of
Exhibit E hereto, signed by the Borrower's chief financial officer, certifying
that: (i) the financial statements delivered with such certificate are true and
correct, and conform in all respects to the requirements of Section 7.03(i) or
7.03(ii) hereof, as the case may be, (ii) all representations and warranties set
forth in this Agreement and in any other Credit Document are true and correct as
of the date thereof; (iii) none of the covenants in this Agreement or in any
other Credit Document has been breached; (iv) no Default or Event of Default
under this Agreement or under any other Credit Document has occurred and is
continuing; and (v) the computation of the financial covenants set forth in
Sections 8.14, 8.15 and 8.16 hereof, together with the calculation of each
significant component thereof necessary to determine compliance with such
covenants, and its determination of the Applicable Margins based on such
computations.
7.05 Notice of Certain Events. Promptly give written notice to the Agent
and the Lenders of: (i) the occurrence of any Default or Event of Default; (ii)
the commencement of any
34
proceeding (administrative or otherwise) or litigation which, if adversely
determined, would materially and adversely affect its financial condition or
ability to conduct business; and (iii) the formation of any Subsidiary of the
Borrower after the date of this Agreement, which notice shall be accompanied by
the resolution of the Board of Directors of such Subsidiary authorizing such
Subsidiary to execute a guaranty of the Obligations, satisfactory in form and
substance to the Lenders, together with such guaranty duly executed by such
Subsidiary.
7.06 Preservation of Property; Insurance. Keep and maintain all of its
properties and assets in good order and repair; maintain all insurance coverages
described in Section 6.18 hereof and such other extended coverage, general
liability, hazard, malpractice, business interruption and property insurance in
amounts deemed satisfactory to the Agent and as is customary for businesses
similar to the Borrower's business and deliver to the Agent certificates of all
such insurance in effect; and cause all such policies to contain a standard
lender's endorsement and loss payee endorsements in favor of the Agent, on
behalf of the Lenders, and to be subject to cancellation or reduction in
coverage only upon thirty (30) days' prior written notice thereof to the Agent.
7.07 Conduct of Business and Maintenance of Existence. Continue to engage
in business of the same general type as now conducted and preserve, renew and
keep in full force and effect its corporate existence and rights, privileges and
franchises necessary or desirable in the normal conduct of business and which
are material to the Borrower and each of its Subsidiaries.
7.08 Operation of Properties. Conduct its business and operate its
properties, in compliance with all applicable orders, rules and regulations
promulgated by the jurisdictions and agencies thereof where such business is
conducted and where such properties are located, and duly file or cause to be
filed such reports and/or information as may be required or appropriate under
applicable orders, regulations or law.
7.09 Access to Properties, Books and Records. Upon reasonable notice, at
any reasonable time and from time to time, permit the Agent's and/or the
Lenders' representatives and/or agents full and complete access to any or all of
the Borrower's and its Subsidiaries' properties and financial records, to make
extracts from and/or audit such records, and to examine and discuss the
Borrower's properties, business, finances and affairs with the Borrower's
officers and outside accountants.
7.10 Keeping of Records and Books of Account. Keep adequate records and
books of account reflecting all its financial transactions.
7.11 ERISA Compliance. Comply with all the applicable provisions of ERISA
now or hereafter in effect with respect to each of its Plans and notify the
Lenders of the following events, as soon as possible and in any event within ten
(10) days after the Borrower knows or has reason to know thereof: (i) the
occurrence of any "Reportable Event" (as defined in ERISA) with respect to any
Plan; (ii) the occurrence of a "prohibited transaction" (as defined in Section
406 of ERISA or Section 4975 of the Code) with respect to any Plan, (iii) the
institution of proceedings or the taking or expected taking of any other action
by the PBGC or the Borrower or any ERISA Affiliate to terminate or withdraw or
partially withdraw from any Plan and, with respect to a Multiemployer Plan, the
"Reorganization" or "Insolvency" of such Plans (as such terms are defined in
ERISA); (iv) the failure of the Borrower or any ERISA Affiliate to make a
required installment under Section 412 (m) of the Code or any other payment
required under Section 412 of the Code on or before the due date or (v) the
adoption of an amendment with respect to a Plan so that the Borrower or any
ERISA Affiliate is required to provide security to such Plan under Section
401(a)(29) of the Code, and in addition to such notice, deliver to the Lenders a
certificate signed by
35
the chief financial officer of the Borrower or of the respective ERISA Affiliate
describing what action the Borrower or the respective ERISA Affiliate proposes
to take with respect thereto and when known, any action taken or threatened by
the Internal Revenue Service or the PBGC, together with a copy of any notice to
the PBGC or the Internal Revenue Service or any notice delivered by the PBGC or
the Internal Revenue Service.
7.12 Environmental Liens. In the event that there shall be filed a Lien
against any property of the Borrower by any jurisdiction, political sub-
division, agency or instrumentality thereof arising from an intentional or
unintentional act or omission of the Borrower, resulting in the Dumping of
hazardous substances or wastes into the atmosphere or waters or onto lands then,
within thirty (30) days from the date that the Borrower is given notice that the
Lien has been placed against such property, or within such shorter period of
time in the event that such jurisdiction, political sub-division, agency, or
instrumentality thereof has commenced steps to cause such property to be sold
pursuant to the Lien, either (i) pay the claim and remove the Lien from the
applicable property or (ii) furnish such jurisdiction, political subdivision,
agency or instrumentality thereof that imposed the Lien with one of the
following: (a) a bond satisfactory to such jurisdiction, political sub-
division, agency, or instrumentality thereof that imposed the Lien in the amount
of the claim out of which the Lien arises, (b) a cash deposit in the amount of
the claim out of which the Lien arises, or (c) other security reasonably
satisfactory to such jurisdiction, political sub-division, agency, or
instrumentality thereof in an amount sufficient to discharge the claim out of
which the Lien arises.
7.13 Removal of Hazardous Substances. Should the Borrower cause or permit
any intentional or unintentional act or omission resulting in the Dumping of
hazardous substances or wastes into the atmosphere or waters or onto the lands
resulting in damage to the Natural Resources without having obtained a permit
issued by the appropriate governmental authorities, promptly remediate said
damage in accordance with all applicable federal, state, and local orders,
statutes, laws, ordinances, rules and regulations.
7.14 Year 2000 Compliance. Take such further actions and obtain such
further assurances as may be necessary or appropriate to mitigate the year 2000
problem (as defined in Section 6.21 hereof) and make such inquiry as to any new
supplier or vendor retained by the Borrower or any of its Subsidiaries as to
such supplier's and vendor's respective year 2000 compliance.
7.15 Further Assurances. Do, execute, acknowledge and deliver or cause to
be done, executed, acknowledged and delivered all such further instruments,
acts, deeds, and assurances as may be reasonably requested by the Agent or the
Lenders for the purpose of carrying out the provisions and intent of the Credit
Documents.
SECTION 8. NEGATIVE COVENANTS.
For so long as any Obligations are outstanding, or the Lenders shall have
any obligation hereunder, the Borrower shall not (and shall not, as applicable,
permit any of its Subsidiaries (including any Guarantor) to):
8.01 Incur Indebtedness. Incur, create, assume, or permit to exist any
Indebtedness, except:
(a) Indebtedness of the Borrower owing to the Lenders and the Agent under
this Agreement and the Notes;
36
(b) Indebtedness existing on the Closing Date that is listed on Annex I
hereto and any renewals, extensions or refinancings of the same,
provided that the principal amount of such Indebtedness at the time of
such renewal, extension or refinancing is not increased in connection
therewith;
(c) Approved Subordinated Indebtedness;
(d) Indebtedness in respect of normal trade debt arising in the ordinary
course of business which (i) does not significantly exceed the levels
of such debt historically incurred by the Borrower or its Subsidiary,
and/or (ii) the historical levels of ordinary course of business trade
debt incurred by the businesses acquired in the Acquisition, as the
case may be;
(e) Indebtedness secured by Liens permitted by Section 8.02(f); and
(f) Indebtedness that constitutes Guaranteed Indebtedness of the Borrower
that has been incurred by the Borrower solely by virtue of the
Borrower's endorsement of checks or drafts negotiated in the ordinary
course of the Borrower's business; and
(g) Indebtedness in respect of obligations of the Borrower or any of its
Subsidiaries under operating leases arising in connection with the
lease of property or assets of third parties used or useful in
ordinary course of business; if, after giving effect to the incurrence
of such Indebtedness, Sections 8.14, 8.15 and 8.16 hereof shall not
have been violated.
8.02 Negative Pledge. Create, permit to exist, or suffer the creation of,
any Lien, on any of its properties or assets (real or personal, tangible or
intangible), except:
(a) Liens existing on the Closing Date that are listed on Annex I hereto;
(b) Liens for taxes, assessments or governmental charges or levies to the
extent not required to be paid by Section 7.02 hereof;
(c) Liens imposed by law, such as materialmen's, mechanics', carriers,
workmen's, and repairmen's Liens and other similar Liens arising in
the ordinary course of business securing obligations which are not
overdue for a period of more than thirty (30) days;
(d) pledges or deposits to secure obligations under workmen's compensation
laws or similar legislation or to secure public or statutory
obligations of the Borrower;
(e) certain de minimus Liens with respect to the assets and properties
acquired in acquisitions permitted pursuant to Section 8.03 hereof
which were existing upon such assets or properties prior to the
relevant permitted acquisitions;
(f) Liens in favor of any Person (whether or not the seller of such
assets) upon property or assets of the Borrower or any of its
Subsidiaries incurred solely for the purpose of financing the
acquisition of any such assets, provided, no such Lien shall extend to
or over any property or asset other than the property being acquired
and provided, further that (i) the aggregate principal amount of the
Indebtedness at any one time outstanding secured by such Liens shall
not exceed $2,000,000.00 and (ii) the incurrence of any such
Indebtedness shall not otherwise be prohibited by the terms of this
Agreement; and
37
(g) the replacement, extension or renewal of any Lien permitted by
clauses (a) through (f) above upon or in the same property
theretofore subject thereto or the replacement, extension or renewal
(without increase of principal amount) of the Indebtedness secured
thereby.
8.03 Sale of Assets; Liquidation; Merger; Acquisitions. Convey, lease,
sell, transfer or assign any assets or properties presently owned or hereafter
acquired except dispositions of inventory in the ordinary course of business for
value received and such other dispositions of assets and properties that are not
material to the business or operations of the Borrower or any of its
Subsidiaries, if such asset or property is replaced with reasonable promptness
or is otherwise obsolete; liquidate or discontinue its normal operations with
intent to liquidate; enter into any merger or consolidation; or acquire all or
substantially all of the assets, stock or other equity interests of another
entity. Notwithstanding the foregoing, (A) any of the Borrower's Subsidiaries
may merge with or be consolidated into the Borrower and the Borrower's
Subsidiaries may merge with or be consolidated into other Subsidiaries of the
Borrower, in each case upon not less than sixty (60) days' prior written notice
to the Agent and the Lenders and on terms reasonably acceptable to the Agent and
the Required Lenders and (B) upon twenty (20) days' prior written notice to the
Agent and the Lenders, the Borrower may from time to time acquire (by stock or
asset acquisitions) other business entities that are engaged in businesses
related or complimentary to the business of the Borrower, as presently
conducted; if, and only if, (y) the aggregate cash and non-cash consideration
paid or exchanged by the Borrower in all such acquisitions does not exceed (A)
$10,000,000 in the aggregate in any consecutive twelve (12) month period or (B)
$20,000,000 in the aggregate at any time while the Obligations are outstanding
or the Lenders have any obligations hereunder and (z) immediately after giving
effect to any such acquisition no Default or Event of Default would exist. For
purpose of determining the consideration paid or exchanged in any such
acquisition, such consideration shall include the amount of any liability
(direct or contingent) assumed by the Borrower in connection therewith.
8.04 Nature of Business. Engage (directly or indirectly) in any business
other than the business in which it is generally engaged on the Closing Date or
any other business that is related or complimentary thereto.
8.05 Dividends, Stock Redemption, Etc. Declare or make any dividend
payment or other distribution of assets, properties, cash, rights, obligations
or securities on account of any shares of any class of stock of the Borrower, or
purchase, redeem, or otherwise acquire for value (or permit any Subsidiary to do
so) any shares of any class of stock of the Borrower or any warrants, rights or
options to acquire any such shares, now or hereafter outstanding; except that
the Borrower may declare and pay quarterly cash dividends in respect of its
capital stock or expend in connection with the redemption, retirement or
purchase of its common stock in an amount not to exceed forty percent (40%) of
its quarterly average net income (determined in accordance with clause (B) of
the definition of Consolidated Funded Debt to Cash Flow Ratio and exclusively
from continued operations) for the four (4) quarters immediately preceding the
relevant ex-dividend date; provided, however, that if immediately after giving
effect to any such proposed dividend payment or stock redemption, a Default or
Event of Default would exist, then no such dividend payment or stock redemption
shall be permitted hereunder. Anything to the contrary in this Section 8.05
notwithstanding, the Borrower shall be permitted to distribute additional shares
of its capital stock in respect of any issued and outstanding shares of its
capital stock in connection with stock splits effected by the Borrower from time
to time.
8.06 Accounts. Sell, assign, transfer or dispose of any of its accounts or
notes receivable, with or without recourse, except to the Agent or the Lenders.
38
8.07 Sale-Leaseback Transactions. Enter into any sale-leaseback
transaction or any transaction howsoever termed which would have the same or
substantially the same result or effect as a sale-leaseback.
8.08 Prepayment of Other Indebtedness. Prepay any Indebtedness not
required to be prepaid in excess of $1,000,000.00 in the aggregate in any period
of twelve (12) consecutive months, except to the Lenders or any Affiliate of any
of the Lenders, or cause or permit to be accelerated any amounts on any
outstanding Indebtedness now existing or hereafter arising.
8.09 Investments. Purchase or make any investment in the stock, securities
or evidences of indebtedness of (other than as permitted pursuant to Sections
8.10 and 8.11 hereof), or make capital contributions to, or other forms of
investments in, any Person except Permitted Investments.
8.10 Loans and Advances Generally. Other than as permitted pursuant to
Section 8.11 hereof, loan or make advances, or other forms of extensions of
credit, to any Subsidiary or Affiliate of the Borrower, or any other Person
(other than as permitted under Section 8.9 hereof); provided however, that the
Borrower may make such loans, advances and other forms of extension of credit to
such parties in the ordinary course of business at arm's length and on
commercially reasonable terms.
8.11 Loans and Advances to Officers. Loan or make advances, or other forms
of extensions of credit, to any officer, director or shareholder of the Borrower
or any Subsidiary or to any Affiliate of any of the foregoing other than at
arm's length and/or commercially reasonable terms or which in the aggregate for
all such loans and advances do not exceed $2,000,000 outstanding at any time.
8.12 Create Subsidiaries. Create, permit to exist, or invest or otherwise
participate in any Subsidiary or any partnership, joint venture or other
enterprise, other than (i) the Subsidiaries and Person listed in Annex I hereto,
(ii) Subsidiaries that may be created or permitted to exist as a result of
acquisitions by the Borrower permitted pursuant to Section 8.03 hereof, or (iii)
any other Subsidiary (not created or permitted to exist pursuant to clause (ii)
above) organized under laws of any State of the United States and otherwise
doing business principally in the United States; provided, however, that (y) in
connection with the creation or permitted existence of any Subsidiary pursuant
to (ii) and (iii) above or (z) should the representations made in Section 6.14
hereof no longer be true and correct at any time subsequent to the Closing Date
as to any Subsidiary specifically referenced in said Section 6.14, than, the
Borrower shall have caused each such Subsidiary to execute and deliver to the
Agent (for the benefit of the Lenders) a guaranty substantially in the form of
the Subsidiary Guaranty and shall provide the Agent with such evidence of
corporate authority of such Subsidiary as the Agent may reasonably require.
8.13 Hazardous Substances. Cause or permit to exist a Dumping of hazardous
substances or wastes into the atmosphere or waters or onto lands resulting in
damage to the Natural Resources unless the Dumping is pursuant to and in
compliance with the conditions of a permit issued by the appropriate federal,
state, or local governmental authorities.
8.14 Consolidated Net Loss. Suffer a Consolidated Net Loss in any two (2)
fiscal quarters occurring in any period of twelve (12) consecutive months.
39
8.15 Consolidated Fixed Charge Coverage Ratio. Permit its Consolidated
Fixed Charge Coverage Ratio to be at any time less than 1.50 to 1.00, measured
on a quarterly basis for the relevant Test Period.
8.16 Consolidated Funded Debt to EBITDA Ratio. Permit its Consolidated
Funded Debt to EBITDA Ratio to exceed at any time 2.75 to 1.00, measured on a
quarterly basis for the relevant Test Period; provided, however, that, anything
to the contrary set forth in this Agreement notwithstanding, the EBITDA
component of said ratio (the EBITDA Component) for the fiscal quarters ending
December 31, 1999, March 31, 2000 and June 30, 2000, shall be calculated as
follows: (i) for the fiscal quarter ending December 31, 1999, the EBITDA
Component shall be the Borrower's Consolidated EBITDA for that fiscal quarter
multiplied by four (4), (ii) for the fiscal quarter ending March 31, 2000, the
EBITDA Component shall be the sum of Borrower's Consolidated EBITDA for the
fiscal quarter ended December 31, 1999 plus the Borrower's Consolidated EBITDA
for the fiscal quarter ended March 31, 2000, multiplied by two (2) and (iii) for
the fiscal quarter ending June 30, 1999, the EBITDA Component shall be the sum
of the Borrower's Consolidated EBITDA for the fiscal quarter ended December 31,
1999 plus the Borrower's Consolidated EBITDA for the fiscal quarter ended March
31, 2000 plus the Borrower's Consolidated EBITDA for the fiscal quarter ended
June 30, 2000, multiplied by one and one-third (1.33), it being acknowledged
that commencing with the fiscal quarter ending September 30, 2000, the
calculation of the EBITDA Component shall return to being calculated for the
relevant Test Period.
8.17 Use of Proceeds. Use the proceeds of the Loans, and the Letters of
Credit, for any purpose other than the purposes set forth in Section 6.02
hereof.
8.18 Amendments to Asset Purchase Agreement. Amend, modify, consent to the
departure from, or waive compliance with, any material term or provision of the
Asset Purchase Agreement, or any of the of the other Acquisition Documents to
which it is a party, otherwise bound, or from which benefits inure to the
Borrower.
8.19 Change Fiscal Year. Change or otherwise permit its fiscal year to end
on any day other than December 31.
SECTION 9. EVENTS OF DEFAULT AND REMEDIES.
9.01 Events of Default. Upon the occurrence of any of the following events
(each an Event of Default):
(i) Payment Default. The Borrower shall (a) default in the payment when
due of any principal of the Loans or Unpaid Drawings or (b) default
in the payment of interest on the Loans or any other amounts owing
hereunder, under the Notes or under any other Credit Document, and
such default shall continue for a period of five (5) or more days;
(ii) Negative Covenant Breach. The Borrower shall default in the due
performance or observance by it of any term, covenant or agreement
contained in Section 8 hereof;
40
(iii) Other Covenant Breaches. The Borrower shall default in the due
performance or observance of any term, covenant or agreement (other
than those referred to in clauses (i) and (ii) above) contained in
this Agreement, the Notes or any other Credit Document, and such
default shall continue unremedied for a period of at least ten (10)
days after the earlier to occur of (a) the date the Borrower obtains
actual knowledge of such default or (b) the date notice of such
default is given to the Borrower by the Agent;
(iv) Default Under Other Agreements. (a) The Borrower or any of its
Subsidiaries shall default in any payment with respect to any
Indebtedness beyond the period of grace, if any, provided in the
instrument or agreement under which such Indebtedness was created or
default in the observance or performance of any agreement or condition
relating to any such Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event
shall occur or condition exist, the effect of which default or other
event or condition is to cause, or to permit the holder or holders of
such Indebtedness (or a trustee or agent on behalf of such holder or
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; (b) any such Indebtedness shall be declared to
be due and payable, or required to be prepaid as a mandatory
prepayment, prior to the stated maturity thereof; or (c) without
limiting the generality of the foregoing, the occurrence of an "Event
of Default" (as defined therein) under the First Fidelity Term Loan
Agreement;
(v) Voluntary Bankruptcy. The Borrower or any of its Subsidiaries
commences any bankruptcy, reorganization, debt arrangement, or other
case or proceeding under the United States Bankruptcy Code or under
any similar foreign, federal, state, or local statute, or any
dissolution or liquidation proceeding, or makes a general assignment
for the benefit of creditors, or takes any action for the purpose of
effecting any of the foregoing;
(vi) Involuntary Bankruptcy. Any bankruptcy, reorganization, debt
arrangement, or other case or proceeding under the United States
Bankruptcy Code or under similar foreign, federal, state or local
statute, or any dissolution or liquidation proceeding, is
involuntarily commenced against or in respect of the Borrower or any
of its Subsidiaries or an order for relief is entered in any such
proceeding and is not dismissed within sixty (60) days;
(vii) Appointment of Receiver. The appointment, or the filing of a petition
seeking the appointment, of a custodian, receiver, trustee, or
liquidator for the Borrower or any of its Subsidiaries or any of their
respective properties or the taking of possession of any part of such
property at the instance of any governmental authority;
(viii) Insolvency. The Borrower or the Guarantor becomes insolvent (however
defined), is generally not paying its debts as they become due, or has
suspended transaction of its usual business;
(ix) Reorganization. The dissolution, merger, consolidation, or
reorganization of the Borrower or any of its Subsidiary (other than as
expressly permitted under Section 8.03 hereof);
41
(x) Action in Furtherance of Certain Defaults. The Borrower or any of its
Subsidiaries has taken any corporate action for the purpose of
effecting any of the events described in clauses (v), (vii) or (ix)
above;
(xi) Material Misstatement. Any statement, representation or warranty made
in or pursuant to this Agreement or any other Credit Document or to
induce the Lenders to enter into this Agreement or to enter into the
transactions referred to in this Agreement shall prove to be untrue or
misleading in any material respect;
(xii) Material Adverse Change. The occurrence of a material adverse change
in the financial condition of the Borrower or any of its Subsidiaries
or the occurrence of any event which, in the sole opinion of the
Lenders, impairs the financial responsibility of the Borrower or any
of its Subsidiaries;
(xiii) Entry of Judgment. The entry or issuance of judgments, orders,
decrees or fines against the Borrower or any of its Subsidiaries
which, in the aggregate, involve liabilities in excess of the sum of
$100,000 (the discharge of which is not the obligation of any
insurance company) and any such judgments or orders involving
liabilities in excess of said sum shall have continued unbonded or
unsatisfied and without stay of execution or agreement between the
parties thereon for a period of thirty (30) days after the entry or
issuance of such judgment;
(xiv) Transfer of Assets. The Borrower or any of its Subsidiaries transfers
or sells all or substantially all of their respective assets, without
the prior written consent of the Lenders; or
(xv) Change of Control. The occurrence of a Change of Control or the
Borrower shall have become bound to any contract or agreement or shall
have commenced any corporate proceedings in furtherance of, or that
would result in, a Change of Control;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing the Agent shall, upon the written request of the
Required Lenders, by written notice to the Borrower, take any or all of the
following actions, without prejudice to the rights of the Agent or any Lender to
enforce its claim against the Borrower, except as otherwise specifically
provided for in this Agreement (provided that, if an Event of Default specified
in clause (v), (vi), (vii) or (viii) above shall occur with respect to the
Borrower, the result which would occur upon the giving of written notice by the
Agent as specified in clauses (i) and (ii) below shall occur automatically
without the giving of any such notice): (i) declare all of the Credit
Commitments terminated, whereupon the Credit Commitment of each Lender shall
forthwith terminate immediately and any fees theretofore accrued shall forthwith
become due and payable without any other notice of any kind; (ii) declare the
principal of and any accrued interest in respect of all Credit Obligations and
all other Obligations owing hereunder to be, whereupon the same shall become,
forthwith due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Borrower; (iii) terminate any
Letter of Credit which may be terminated in accordance with its terms; and (iv)
direct the Borrower to pay (and the Borrower agrees that upon receipt of such
notice, or upon the occurrence of an Event of Default as specified in clause (v)
(vi), (vii) or (viii) above, it will pay) to the Agent such additional amounts
of cash to be held as cash collateral for the
42
Borrower's reimbursement obligations for Drawings that may subsequently occur
under any Letter of Credit then outstanding, equal to the Stated Amount of all
such Letters of Credit.
Notwithstanding anything contained in the foregoing paragraph, if at any
time within sixty (60) days after an acceleration of the Loans pursuant to the
preceding paragraph, the Borrower shall pay all arrears of interest and all
payments on account of principal which shall have become due otherwise than by
acceleration (with interest on principal and, to the extent permitted by law, on
overdue interest, at the rates specified in the Credit Documents) and all Events
of Default (other than non-payment of the principal of and accrued interest on
the Loans, in each case which is due and payable solely by virtue of
acceleration) shall be remedied or waived to the satisfaction of the Lenders,
then the Lenders, by written notice to the Borrower, may at their option rescind
and annul the acceleration and its consequences; but such action shall not
affect any subsequent Event of Default or impair any right consequent thereon.
The provisions of this paragraph are intended merely to bind the Lenders to a
decision which may be made at the election of the Lenders and are not intended
to benefit the Borrower and do not grant the Borrower the right to require the
Lenders to rescind or annul any acceleration hereunder, even if the conditions
set forth herein are met. Without limiting the generality of the remedies
available to the Lenders pursuant to the Credit Documents or by law following an
Event of Default, (y) the rate of interest on the principal portion of the
Obligations incurred hereunder shall be increased to a rate equal to the lesser
of: (i) the highest rate of interest set forth in the Credit Documents, or (ii)
the highest rate of interest allowed by law, such rate of interest to apply to
such Obligations upon and after an Event of Default, maturity, whether by
acceleration or otherwise, and the entry of a judgment in favor of the Lenders
with respect to any or all of such Obligations and (z) the Letter of Credit Fee
shall be increased to 300 basis points (3.00%) at all times during which an
Event of Default continues to exist.
9.02 Right of Set-off. If any of the Obligations shall be due and payable
or any one or more Events of Default shall have occurred, whether or not any
Lender shall have made demand under any Credit Document and regardless of the
adequacy of any collateral or other form of security for the Obligations or
other means of obtaining repayment of the Obligations, each Lender shall have
the right, without notice to the Borrower or any other Obligor, and is
specifically authorized hereby to set-off against and apply to the then unpaid
balance of the Obligations any items or funds of the Borrower and/or any Obligor
held by each Lender or any Affiliate of such Lender, any and all deposits
(whether general or special, time or demand, matured or unmatured) or any other
property of the Borrower and/or any Obligor, including, without limitation,
securities and/or certificates of deposit, now or hereafter maintained by the
Borrower and/or any Obligor for its or their own account with any Lender or any
Affiliate thereof, and any other indebtedness at any time held or owing by the
Lender or any Affiliate to or for the credit or the account of the Borrower
and/or any Obligor, even if effecting such set-off results in a loss or
reduction of interest or the imposition of a penalty applicable to the early
withdrawal of time deposits. For such purpose, each Lender shall have, and the
Borrower hereby grants to each Lender, a first Lien on and security interest in
such deposits, property, funds and accounts and the proceeds thereof.
9.03 Sharing of Payments, Etc . If any Lender shall obtain any payment
(whether voluntary, involuntary, through the exercise of any right of set-off,
or otherwise) on account of the Loans made by it in excess of its Pro Rata Share
of payments on account of the Loans obtained by all the Lenders, such Lender
shall forthwith purchase from the other Lenders such participations in the Loans
made by them as shall be necessary to cause such purchasing Lender to share the
excess payment ratably with each of them, provided, however, that if all or any
portion of such excess payment is thereafter recovered from such purchasing
Lender, such purchase from each Lender shall be rescinded and such Lender shall
repay to the purchasing Lender the purchase price to the extent of such recovery
together with an amount equal to such Lender's Pro Rata Share according to the
proportion of (i) the amount of such Lender's required repayment to (ii) the
total amount so
43
recovered from the purchasing Lender of any interest or other amount paid or
payable by the purchasing Lender in respect of the total amount so recovered.
The Borrower agrees that any Lender so purchasing a participation from another
Lender pursuant to this Section 9.03 may, to the fullest extent permitted by
law, exercise all its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Lender were the direct
creditor of the Borrower in the amount of such participation. The foregoing
shall in no way obligate any Lender to seek payment in respect of the
Obligations of the Borrower hereunder through such Lender's right of set-off or
otherwise at any time, or in any particular order relative to such other rights
or remedies such Lender may possess, in a manner that prejudices or impairs (as
determined in such Lender's sole discretion) any other right or remedy such
Lender may possess to enforce claims against the Borrower in respect of
Obligations of the Borrower hereunder or such other Obligations of the Borrower
owed to such Lender.
9.04 Turnover of Property held by Affiliate . The Borrower further
authorizes each Affiliate of any Lender, upon and following the occurrence of an
Event of Default, at the request of the Lender so affiliated, and without notice
to the Borrower, to turn over to such Lender any property of the Borrower,
including, without limitation, funds and securities, held by such Affiliate for
the Borrower's account and to debit, for the benefit of such Lender, any deposit
account maintained by the Borrower with such Affiliate (even if such deposit
account is not then due or there results a loss or reduction of interest or the
imposition of a penalty in accordance with law applicable to the early
withdrawal of time deposits), in the amount requested by such Lender up to the
amount of the Obligations, and to pay or transfer such amount or property to
such Lender for application to the Obligations.
9.05 Remedies Cumulative; No Waiver . The rights, powers and remedies of
the Agent and the Lenders provided in this Agreement and any of the Credit
Documents are cumulative and not exclusive of any right, power or remedy
provided by law or equity. No failure or delay on the part of the Agent or the
Lenders in the exercise of any right, power or remedy shall operate as a waiver
thereof, nor shall any single or partial exercise preclude any other or further
exercise thereof, or the exercise of any other right, power or remedy.
SECTION 10. THE AGENT.
10.01 Appointment . Each Lender hereby irrevocably designates and appoints
First Union National Bank as the Agent of such Lender under this Agreement, and
each such Lender irrevocably authorizes First Union National Bank, as the Agent
for such Lender, to take such action on its behalf under the provisions of this
Agreement and to exercise such powers and perform such duties as are expressly
delegated to the Agent by the terms of this Agreement and the other Credit
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Agent shall not have any duties or responsibilities, except those expressly set
forth herein, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or any other Credit Document or otherwise exist
against the Agent.
10.02 Delegation of Duties . The Agent may execute any of its duties under
this Agreement by or through agents or attorneys-in-fact and shall be entitled
to advice of counsel concerning all matters pertaining to such duties. The Agent
shall not be responsible for the negligence or misconduct of any agents or
attorneys in-fact selected by it with reasonable care.
10.03 Exculpatory Provisions . Neither the Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates shall be (i)
liable for any action lawfully taken or
44
omitted to be taken by it or such Person under or in connection with this
Agreement or any other Credit Document (except for its or such Person's own
gross negligence or willful misconduct) or (ii) responsible in any manner to any
of the Lenders for any recitals, statements, representations or warranties made
by the Borrower or any officer thereof contained in this Agreement or any other
Credit Document or in any certificate, report, statement or other document
referred to or provided for in, or received by the Agent under or in connection
with, this Agreement or any other Credit Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
the Notes or any other Credit Document or for any failure of the Borrower to
perform its obligations hereunder or thereunder. The Agent shall not be under
any obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Credit Document, or to inspect the property, books or
records of the Borrower.
10.04 Reliance by Agent . The Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it in
good faith to be genuine and correct and to have been signed, sent or made by
the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Borrower), independent
accountants and other experts selected by the Agent. The Agent may deem and
treat the payee of any Note as the owner thereof for all purposes unless a
written notice of assignment, negotiation or transfer thereof shall have been
filed with the Agent. The Agent shall be fully justified in failing or refusing
to take any action under this Agreement or any other Credit Document unless it
shall first receive such advice or concurrence of the Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement
and the Notes and the other Credit Documents in accordance with a request of the
Lenders, and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all future holders of the
Notes. Without limiting the generality of the foregoing, no Lender shall have
any right of action whatsoever against the Agent as a result of the Agent acting
or refraining from acting hereunder or under any Credit Documents in accordance
with the instructions of the Lenders.
10.05 Notice of Default . The Agent shall not be deemed to have knowledge
or notice of the occurrence of any Event of Default hereunder unless the Agent
has received notice from a Lender or the Borrower referring to this Agreement,
describing such Event of Default and stating that such notice is a "notice of
default". In the event that the Agent receives such a notice, the Agent shall
give notice thereof to the Lenders. The Agent shall take such action with
respect to such Event of Default as shall be reasonably directed by the Lenders;
provided that unless and until the Agent shall have received such directions,
the Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Event of Default as it shall deem
advisable in the best interests of the Lenders.
10.06 Non-Reliance on Agent and Other Lenders . Each Lender expressly
acknowledges that neither the Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates has made any representations
or warranties to it and that no act by the Agent hereinafter taken, including
any review of the affairs of the Borrower, shall be deemed to constitute any
representation or warranty by the Agent to any Lender. Each Lender represents to
the Agent that it has, independently and without reliance upon the Agent or any
other Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Borrower and made its own decision to make its Loans hereunder and enter into
this Agreement.
45
Each Lender also represents 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 credit
analysis, appraisals and decisions in taking or not taking action under this
Agreement and the other Credit Documents, and to make such investigation as it
deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Borrower. Except for
notices, reports and other documents 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 business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Borrower which may come into
the possession of the Agent or any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates.
10.07 Indemnification . The Lenders agree to indemnify the Agent in its
capacity as such (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so), ratably according to their
Pro Rata Shares from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever which may at any time (including, without limitation, at
any time following the payment of the Notes) be imposed on, incurred by or
asserted against the Agent in any way relating to or arising out of this
Agreement, any of the other Credit Documents or any documents contemplated by or
referred to herein or therein or the transactions contemplated hereby or thereby
or any action taken or omitted by the Agent under or in connection with any of
the foregoing; provided that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting solely from the
Agent's gross negligence or willful misconduct. If, however, the Agent shall
have been reimbursed by the Borrower in respect of any amounts previously paid
to the Agent by the Lenders pursuant to this Section 10.07, then the Agent shall
pay to the Lenders their Pro Rata Shares of such duplicative reimbursement. The
agreements in this subsection shall survive the payment of the Notes and all
other amounts payable hereunder.
10.08 Agent in Its Individual Capacity . The Agent and its Affiliates may
make loans to, accept deposits from and generally engage in any kind of business
with the Borrower as though the Agent were not the Agent hereunder and under the
other Credit Documents. With respect to its Loans made or renewed by it and any
Note issued to it, the Agent shall have the same rights and powers under this
Agreement and the other Credit Documents as any Lender and may exercise the same
as though it were not the Agent, and the terms Lender and Lenders shall include
the Agent in its individual capacity.
10.09 Successor Agent . The Agent may resign as Agent upon ten (10) days'
notice to the Lenders. If the Agent shall resign as Agent under this Agreement,
then the Lenders shall appoint from among the Lenders a successor agent for the
Lenders, which successor agent shall be approved by the Borrower. If a successor
Agent shall not have been so appointed within said ten (10) day period, the
Borrower shall appoint from among the Lenders a successor agent for the Lenders.
Any such successor agent shall succeed to the rights, powers and duties of the
Agent, and the term Agent shall mean such successor agent effective upon its
appointment, and the former Agent's rights, powers and duties as Agent shall be
terminated, without any other or further act or deed on the part of such former
Agent or any of the parties to this Agreement or any holders of the Notes. After
any retiring Agent's resignation as Agent, the provisions of this Section 10
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was the Agent under this Agreement.
10.10 Documentation Agent . Each Lender hereby designates and appoints
Fleet Bank, N.A., as Documentation Agent hereunder. In such capacity, the
Documentation Agent shall
46
have only such duties, powers and responsibilities as may be delegated to it by
the Agent with the Borrower's prior written consent and accepted by the
Documentation Agent. In the course of performance of any such duties, powers or
responsibilities (if any), the Documentation Agent shall be entitled to the
benefits bestowed upon the Agent pursuant to Section 10.03, 10.07 and 11.12 as
if it were named therein as an additional agent.
SECTION 11. MISCELLANEOUS.
11.01 Notices. Unless otherwise expressly stated notices and communications
under this Agreement and the other Credit Documents shall be in writing and
shall be delivered by either (i) hand-delivery, (ii) first class mail (postage
prepaid), (iii) reliable overnight commercial courier (charges prepaid), or (iv)
telecopy, to the addresses and telecopy numbers listed in this Agreement. Notice
by telecopy shall be deemed to have been delivered and received when sent.
Notice by overnight courier shall be deemed to have been delivered and received
on the date scheduled for delivery. Notice by mail shall be deemed to have been
delivered and received three (3) calendar days after the date first deposited in
the United States mail. Notice by hand delivery shall be deemed to have been
delivered and received upon delivery. A party may change its address and/or
telecopier number by delivering written notice to the other parties as specified
herein.
11.02 Costs and Expenses. Whether or not the transactions contemplated by
the Credit Documents are fully consummated, the Borrower shall promptly pay (or
reimburse, as the Agent and/or any of the Lenders, as the case may be, may
elect) all costs and expenses which the Agent or the Lenders have incurred or
may hereafter incur in connection with the negotiation, preparation,
reproduction, interpretation, perfection, monitoring, administration and
enforcement of the Credit Documents, the collection of all amounts due under the
Credit Documents, and all amendments, modifications, consents or waivers, if
any, to the Credit Documents. Such costs and expenses shall include, without
limitation, the fees and disbursements of counsel to the Agent and/or any of the
Lenders (including the Agent's in-house counsel), the costs of appraisals, costs
of environmental studies, searches of public records, costs of filing and
recording documents with public offices, internal and/or external audit and/or
examination fees and costs, stamp, excise and other taxes and costs and expenses
incurred by the Agent or any of the Lenders, and the fees of the accountants,
consultants or other professionals engaged by the Agent or the Lenders in
connection with the transactions contemplated in this Agreement and the other
Credit Documents. Without limiting the generality of the foregoing, the Borrower
shall reimburse the Agent for the costs and expenses of Windels, Marx, Davies &
Ives, counsel to the Agent, for services rendered in consideration with the
preparation and negotiation of the Credit Documents and matters related thereto.
Such reimbursement shall be payable within ten (10) days after presentation to
the Borrower of an invoice itemizing such costs and expenses. The Borrower's
reimbursement obligations under this paragraph shall survive any termination of
the Credit Documents.
11.03 Payment Due on a Day Other Than a Business Day. If any payment due or
action to be taken under this Agreement or any Credit Document falls due or is
required to be taken on a day that is not a Business Day, such payment or action
shall be made or taken on the next succeeding Business Day and such extended
time shall be included in the computation of interest.
11.04 Governing Law. This Agreement shall be construed in accordance with
and governed by the substantive laws of the State of New Jersey without
reference to conflict of laws principles.
47
11.05 Counterparts; Integration. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were on the same instrument. This Agreement
and the other Credit Documents constitute the sole agreement of the parties with
respect to the subject matter hereof and thereof and supersede all oral
negotiations and prior writings with respect to the subject matter hereof and
thereof.
11.06 Amendment or Waiver. Neither this Agreement nor any other Credit
Document nor any terms hereof or thereof may be changed, waived, discharged or
terminated unless such change, waiver, discharge or termination is in writing
signed by the Required Lenders; provided, that no such change, waiver, discharge
or termination shall, without the consent of each Lender, (i) extend the final
maturity of any Loan or Note, or any portion thereof, or 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
payable hereunder or reduce the principal amount thereof, or increase the
Revolving Credit Commitment or Term Loan Credit Commitment of any Lender, or the
aggregate amount of the Revolving Credit Commitments or Term Loan Commitments
for all of the Lenders in each case) over the amount thereof then in effect (it
being understood that a waiver of any Default or Event of Default or of a
mandatory reduction in the Revolving Credit Commitment shall not constitute a
change in the terms of the Revolving Credit Commitment or Term Loan Commitment
of any Lender), (ii) release all or substantially all of collateral at such time
securing the Obligations hereunder (except as expressly provided in such
instruments pertaining to such collateral), (iii) the release of the Guaranty or
any other guaranty at any time supporting the Obligations, (iv) amend, modify or
waive any provision of this Section, or Section 2.12, 2.13, 4.05, 9.01, 9.02,
9.03, 11.02, 11.08 or 11.11; (v) reduce any percentage specified in, or
otherwise modify, the definition of Required Lenders; (vi) alter or amend any
provision hereof expressly requiring the consent of all of the Lenders; or (vii)
consent to the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement. No provision of Section 10 may be amended
without the consent of the Agent. The provisions of Sections 2.09, 2.10, 2.11,
2.12 and 2.13 shall not be amended or modified in any way that adversely affects
the Agent with respect to its obligation to issue Letters of Credit, without the
Agent's consent.
11.07 Successors and Assigns. This Agreement (i) shall be binding upon the
Borrower, the Agent and the Lenders and their successors and permitted assigns,
and (ii) shall inure to the benefit of the Borrower, the Agent and the Lenders
and their respective successors and permitted assigns; provided, however, that
the Borrower may not assign its rights hereunder or any interest herein without
the prior written consent of the Lenders, and any such assignment or attempted
assignment by the Borrower shall be void and of no effect with respect to the
Lenders.
11.08 Participations and Assignments. The Borrower hereby acknowledges and
agrees that each Lender may at any time: (I) grant participations in all or any
portion of its rights and obligations hereunder (including, without limitation,
its obligation to make advances hereunder in accordance with its Credit
Commitment) or under its Revolving Credit Note and Term Loan Note (collectively,
Participations) to any other lending office or to any other bank, lending
institution or other entity which has the requisite sophistication to evaluate
the merits and risks of investments in Participations (each a Participant);
provided, however, that: (i) all amounts payable by the Borrower hereunder shall
be determined as if such Lender had not granted such Participation, such Lender
(A) shall retain the sole right and responsibility to enforce the obligations of
the Borrower hereunder including, without limitation, the right to approve any
amendment, modification or waiver of any provisions of this Agreement; and (B)
shall not in any event be relieved from its obligations to make advances
hereunder in accordance with its Credit Commitment; provided, however, that such
Lender may agree with the Participant that such Lender will not agree to any
modification, amendment or waiver of this Agreement without the consent of the
Participant if such amendment, modification or waiver would reduce the principal
of or rate of interest on the Credit Obligations so
48
participated or postpone the date fixed for any payment of principal of or
interest on such Credit Obligations; and (II) assign up to one hundred percent
(100%) of its rights and obligations hereunder (including, without limitation,
its obligation to make advances hereunder in accordance with its Credit
Commitment) or under its Revolving Credit Note and Term Loan Note; provided,
however, that, except with respect to (y) assignments between and among Lenders
which are parties to this Agreement (as to which the conditions in clauses (i)
through (iii) below shall not be applicable) and (z) a single assignment not to
exceed fifty percent (50%) of its rights and obligations hereunder to a lending
institution (as to which the condition in clause (i) below shall not be
applicable), prior to such assignment: (i) it has obtained the prior written
consent of the Agent (which consent shall not be unreasonably withheld); (ii)
the amount assigned shall be an amount equal to $5,000,000 or multiples of
$5,000,000 in excess thereof; and (iii) such Lender has paid to the Agent a
transfer fee of $3,500. Notwithstanding anything in this Section 11.08 to the
contrary, each Lender may sell or assign, in whole or in part, any or all of its
interest in the Credit Obligations (without the consent of any Person or any
other restriction) to (i) any Affiliate of such Lender, (ii) any Federal Reserve
Bank in connection with a pledge of said interest as collateral security
pursuant to Regulation A of the Board of Governors of the Federal Reserve
System, and (iii) any Person at any time after an Event of Default. The holder
of any sale, assignment or Participation permitted pursuant to this Section
11.08, if the applicable agreement between the relevant Lender and such holder
so provides, (i) shall be entitled to all of the rights, obligations and
benefits of a Lender hereunder and (ii) shall be deemed to hold and may exercise
the rights of set-off or banker's lien with respect to any and all obligations
of such holder to the Borrower, in each case as fully as though the Borrower
were directly indebted to such holder. The Borrower authorizes each Lender to
provide information concerning the Borrower to any prospective purchaser,
assignee or participant. The information provided may include, but is not
limited to, amounts, terms, balances, payment history, and any financial or
other information about the Borrower. The Borrower agrees to indemnify, defend,
and release any Lender that has so disclosed such information, and hold such
Lender harmless, at the Borrower's cost and expense, from and against any and
all lawsuits, claims, actions, proceedings, or suits against such Lender arising
out of or relating to such Lender's reporting or disclosure of such information.
11.09 Severability. The illegality or unenforceability of any provision of
this Agreement or any instrument or agreement required hereunder shall not in
any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement required hereunder.
In lieu of any illegal or unenforceable provision in this Agreement, there shall
be added automatically as a part of this Agreement a legal and enforceable
provision as similar in terms to such illegal or unenforceable provision as may
be possible.
11.10 Consent to Jurisdiction and Service of Process. The Borrower
irrevocably appoints each and every senior vice president (or higher ranking
officer) of the Borrower as its attorneys upon whom may be served, by regular or
certified mail at the address set forth in this Agreement, any notice, process
or pleading in any action or proceeding against it arising out of or in
connection with this Agreement or any of the other Credit Documents. The
Borrower hereby consents that any action or proceeding against it may be
commenced and maintained in any court within the State of New Jersey or in the
United States District Court for the District of New Jersey by service of
process on any such officer. The Borrower and Guarantor further agree that such
courts of the State of New Jersey and the United States District Court for the
District of New Jersey shall have jurisdiction with respect to the subject
matter hereof and the person of the Borrower and all collateral for the
Obligations. Notwithstanding the foregoing, the Borrower agrees that any action
brought by the Borrower shall be commenced and maintained only in a court in the
federal judicial district or county in which the Agent has its principal place
of business in New Jersey.
11.11 Confidentiality . Each Lender shall hold, and shall cause its
Participants and prospective Participants, if any, to agree to hold, all non-
public information obtained pursuant to the
49
requirements of any Credit Document which has been identified as such by the
Borrower in accordance with its customary procedure for handling confidential
information of such nature and in accordance with safe and sound banking
practices and in any event may make disclosure reasonably required by any bona
fide assignee, transferee or participant or as legally required or reasonably
requested by any governmental agency or representative thereof or pursuant to
legal process.
11.12 Indemnification.
(a) The Borrower agrees to indemnify the Agent and each Lender, their
respective Affiliates and each of their respective directors, officers, agents
and employees (each an Indemnitee) and hold each Indemnitee harmless from and
against any and all liabilities, losses, damages, costs and expenses of any
kind, including, without limitation, the reasonable fees and disbursements of
counsel, which may be incurred by such Indemnitee in connection with any
investigative, administrative or judicial proceeding (whether or not such
Indemnitee shall be designated a party thereto) brought or threatened relating
to or arising out of this Agreement, the other Credit Documents or any actual or
proposed use of proceeds of Loans hereunder; provided that no Indemnitee shall
have the right to be indemnified hereunder for such Indemnitee's own gross
negligence or willful misconduct as determined by a court of competent
jurisdiction.
(b) Without limiting the generality of the foregoing, the Borrower shall
indemnify, defend and hold harmless each Indemnitee with respect to any and all
claims, expenses, demands, losses, costs, fines or liabilities of any kind
(including, without limitation, those involving death, personal injury or
property damage and including reasonable attorneys fees and costs) arising from
or in any way related to any hazardous materials or a dangerous environmental
condition within, on, from, related to or affecting any real property owned or
occupied by the Borrower including, without limitation, any and all claims that
may arise as a result of an intentional or unintentional act or omission of the
Borrower, any previous owner and/or operator of real property owned or occupied
by the Borrower that resulted in the Dumping of hazardous substances or wastes
into the atmosphere or waters or onto the lands and that resulted in damage to
the Natural Resources or to any persons or property.
(c) If, after receipt of any payment of all or any part of the Obligations,
any Lender is compelled or agrees, for settlement purposes, to surrender such
payment to any person or entity for any reason (including, without limitation, a
determination that such payment is void or voidable as a preference or
fraudulent conveyance, an impermissible set-off, or a diversion of trust funds),
then this Agreement and the other Credit Documents shall continue in full force
and effect, and the Borrower shall be liable for, and shall indemnify, defend
and hold harmless such Lender with respect to, the full amount so surrendered.
(d) The provisions of this subsection shall survive the termination of this
Agreement and the other Credit Documents and shall be and remain effective
notwithstanding the payment of the Obligations, the release of any security
interest, lien or encumbrance securing the Obligations or any other action which
the Lenders may have taken in reliance upon their receipt of such payment. Any
action by the Lenders shall be deemed to have been conditioned upon any payment
of the Obligations having become final and irrevocable.
11.13 Inconsistencies. The Credit Documents are intended to be consistent.
However, in the event of any inconsistencies between this Agreement and any of
the other Credit Documents, the terms of this Agreement shall govern, but such
inconsistency shall not otherwise affect the validity or enforceability of such
inconsistent Credit Document.
50
11.14 Headings. The headings of sections and paragraphs have been
included herein for convenience only and shall not be considered in interpreting
this Agreement.
11.15 Exhibits and Annexes. The Exhibits and Annexes attached hereto
and the provisions thereof, are incorporated herein.
11.16 Judicial Proceeding; Waivers.
(i) EACH PARTY TO THIS AGREEMENT AGREES THAT ANY SUIT, ACTION OR
PROCEEDING, WHETHER CLAIM OR COUNTERCLAIM, BROUGHT OR
INSTITUTED BY ANY PARTY HERETO OR ANY SUCCESSOR OR ASSIGN OF
ANY PARTY, ON OR WITH RESPECT TO THIS AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS OR THE DEALINGS OF THE PARTIES WITH
RESPECT HERETO, OR THERETO, SHALL BE TRIED ONLY BY A COURT AND
NOT BY A JURY. IN THE EVENT THAT THE FOREGOING WAIVER OF JURY
TRIAL BY THE BORROWER IS DETERMINED TO BE INVALID OR
UNENFORCEABLE AS A MATTER OF LAW, THE BORROWER, THE AGENT AND
THE LENDERS AGREE THAT THE PROVISIONS OF ANNEX III TO THIS
AGREEMENT SHALL GOVERN AS TO THE MATTERS SET FORTH THEREIN.
(ii) EACH PARTY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION OR
PROCEEDING. FURTHER, EACH PARTY WAIVES ANY RIGHT IT MAY HAVE TO
CLAIM OR RECOVER, IN ANY SUCH SUIT, ACTION OR PROCEEDING, ANY
SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY
DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES.
(iii) THE BORROWER ACKNOWLEDGES AND AGREES THAT THIS SECTION IS A
SPECIFIC AND MATERIAL ASPECT OF THIS AGREEMENT AND THAT THE
LENDERS WOULD NOT EXTEND CREDIT TO THE BORROWER IF THE WAIVERS
SET FORTH IN THIS SECTION WERE NOT A PART OF THIS AGREEMENT.
51
IN WITNESS WHEREOF, the parties by themselves or their duly authorized
representatives have executed this Agreement the day and year first above
written.
WITNESS OR ATTEST: XXXXXX XXXXXX, INC.
By: By:/s/ Xxxx Xxxx
------------------------------ -----------------------------
Name: Name:
Title: Title:
Address: Address: 000 Xx. Xxxx Xxxx
------------------------- Xxxxxxx Xxxxx, XX 00000
Attn: Xxxx Xxxx
------------------------- Senior Vice President,
Chief Financial Officer
and Treasurer
Telecopier No.: (000) 000-0000
FIRST UNION NATIONAL BANK,
Individually and as Lead Arranger
and Administrative Agent
Credit Commitments:
By:/s/ Xxxxxxx X. Xxxxxx
----------------------------
Revolving Credit Commitment: $17,500,000 Name: Xxxxxxx X. Xxxxxx
Term Loan Commitment: $32,500,000 Title: Senior Vice President
Address: 000 Xxxxx Xxxx
Total Commitment: $50,000,000 Xxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxx Xxxx, Senior Vice
Telecopier No.: (000) 000-0000
Payment Office:
Address: 000 Xxxxx Xxxx
Xxxxxx, Xxx Xxxxxx 00000
Telecopier No.: (000) 000-0000
52
FLEET BANK, N.A.,
Individually and as Documentation
Agent
Credit Commitments:
By:/s/ Xxxx X. Xxxxxx
-----------------------------------
Revolving Credit Commitment: $14,000,000 Name: Xxxx X. Xxxxxx
Title: Vice President
Term Loan Commitment: $26,000,000 Address: 0000 Xxxxx 00X
Xxxxxxxxxxx, XX 00000
Total Commitment: $40,000,000 Attn: Xxxx X. Xxxxxx
Telecopier No.: (000) 000-0000
Payment Office:
Address: 0000 Xxxxx 00X
Xxxxxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxx
Telecopier No.: (000) 000-0000
XXXXX BROTHERS XXXXXXXX & CO.
Credit Commitments:
By:/s/ Xxxxxxx X. Xxxxxx, Xx.
-----------------------------------
Revolving Credit Commitment: $ 3,500,000 Name: Xxxxxxx X. Xxxxxx, Xx.
Term Loan Commitment: $ 6,500,000 Title: Senior Manager
Address: 00 Xxxxx Xxxxxx
Total Commitment: $10,000,000 Xxxxxx, XX 00000
Attn: Xxxxxxxx Xxxxx,
Assistant Manager
Telecopier No.: (000) 000-0000
Payment Office:
Address: 00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Total Revolving Credit Commitments: $35,000,000
Total Term Loan Commitments: $65,000,000
------------
Aggregate Commitments: $100,000,000
53
