CREDIT AGREEMENT
among
THE PROFIT RECOVERY GROUP USA, INC.,
as Borrower,
THE PROFIT RECOVERY GROUP INTERNATIONAL, INC.
as Parent,
CERTAIN SUBSIDIARIES OF THE PARENT
FROM TIME TO TIME PARTY HERETO,
as Guarantors,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTY HERETO
AND
BANK OF AMERICA, N.A.,
as Administrative Agent
DATED AS OF DECEMBER 31, 0000
XXXX XX XXXXXXX SECURITIES LLC,
As Lead Arranger and Book Manager
TABLE OF CONTENTS
SECTION 1 DEFINITIONS.........................................................1
1.1 Definitions..................................................1
1.2 Computation of Time Periods.................................28
1.3 Accounting Terms............................................28
SECTION 2 CREDIT FACILITIES..................................................30
2.1 Revolving Loans.............................................30
2.2 Letter of Credit Subfacility................................32
2.3 Foreign Currency Loan Subfacility...........................37
2.4 Swingline Loan Subfacility..................................39
SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES.....................41
3.1 Default Rate................................................41
3.2 Extension and Conversion....................................41
3.3 Prepayments.................................................42
3.4 Termination and Reduction of Revolving Committed Amount.....43
3.5 Fees........................................................44
3.6 Capital Adequacy............................................45
3.7 Limitation on Eurocurrency Loans............................45
3.8 Illegality..................................................46
3.9 Requirements of Law.........................................46
3.10 Treatment of Affected Loans.................................47
3.11 Taxes.......................................................48
3.12 Compensation................................................50
3.13 Pro Rata Treatment..........................................50
3.14 Sharing of Payments.........................................52
3.15 Payments, Computations, Etc.................................53
3.16 Evidence of Debt............................................54
3.17 Mitigation; Mandatory Assignment............................55
SECTION 4 GUARANTY...........................................................56
4.1 The Guaranty................................................56
4.2 Obligations Unconditional...................................56
4.3 Reinstatement...............................................57
4.4 Certain Additional Waivers..................................58
4.5 Remedies....................................................58
4.6 Rights of Contribution......................................58
4.7 Guarantee of Payment; Continuing Guarantee..................59
SECTION 5 CONDITIONS.........................................................59
5.1 Closing Conditions..........................................59
5.2 Conditions to all Extensions of Credit......................62
SECTION 6 REPRESENTATIONS AND WARRANTIES.....................................63
6.1 Financial Condition.........................................63
6.2 No Material Change..........................................64
6.3 Organization and Good Standing..............................64
6.4 Power; Authorization; Enforceable Obligations...............64
6.5 No Conflicts................................................64
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6.6 No Default..................................................65
6.7 Ownership...................................................65
6.8 Indebtedness................................................65
6.9 Litigation..................................................65
6.10 Taxes.......................................................65
6.11 Compliance with Law.........................................66
6.12 ERISA.......................................................66
6.13 Subsidiaries................................................67
6.14 Governmental Regulations, Etc...............................68
6.15 Purpose of Loans and Letters of Credit......................69
6.16 Environmental Matters.......................................69
6.17 Intellectual Property.......................................70
6.18 Solvency....................................................70
6.19 Investments.................................................70
6.20 Location of Collateral......................................70
6.21 Disclosure..................................................71
6.22 Brokers' Fees...............................................71
6.23 Labor Matters...............................................71
SECTION 7 AFFIRMATIVE COVENANTS..............................................71
7.1 Information Covenants.......................................71
7.2 Preservation of Existence and Franchises....................75
7.3 Books and Records...........................................75
7.4 Compliance with Law.........................................75
7.5 Payment of Taxes and Other Indebtedness.....................75
7.6 Insurance...................................................75
7.7 Maintenance of Property.....................................76
7.8 Performance of Obligations..................................76
7.9 Use of Proceeds.............................................77
7.10 Audits/Inspections..........................................77
7.11 Financial Covenants.........................................77
7.12 Additional Credit Parties...................................78
7.13 Environmental Laws..........................................79
7.14 Collateral..................................................80
SECTION 8 NEGATIVE COVENANTS.................................................80
8.1 Indebtedness................................................80
8.2 Liens.......................................................81
8.3 Nature of Business..........................................81
8.4 Consolidation, Merger, Dissolution, etc.....................82
8.5 Asset Dispositions..........................................82
8.6 Investments.................................................83
8.7 Restricted Payments.........................................83
8.8 Transactions with Affiliates................................83
8.10 Fiscal Year; Organizational Documents.......................83
8.11 Limitation on Restricted Actions............................84
8.12 Ownership of Subsidiaries...................................84
8.13 Sale Leasebacks.............................................84
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8.14 Capital Expenditures........................................85
8.15 No Further Negative Pledges.................................85
8.16 Limitation on Foreign EBITDA................................85
8.17 Subordinated Debt...........................................85
SECTION 9 EVENTS OF DEFAULT..................................................85
9.1 Events of Default...........................................85
9.2 Acceleration; Remedies......................................88
SECTION 10 AGENCY PROVISIONS.................................................89
10.1 Appointment and Authorization of Administrative Agent.......89
10.2 Delegation of Duties........................................89
10.3 Liability of Administrative Agent...........................90
10.4 Reliance by Administrative Agent............................90
10.5 Notice of Default...........................................91
10.6 Credit Decision; Disclosure of Information by
Administrative Agent.................................. 91
10.7 Indemnification of Administrative Agent.....................92
10.8 Administrative Agent in its Individual Capacity.............92
10.9 Successor Administrative Agent..............................92
10.10 Other Agents; Lead Managers.................................93
SECTION 11 MISCELLANEOUS.....................................................93
11.1 Notices.....................................................93
11.2 Right of Set-Off; Adjustments...............................94
11.3 Successors and Assigns......................................95
11.4 No Waiver; Remedies Cumulative..............................97
11.5 Expenses; Indemnification...................................97
11.6 Amendments, Waivers and Consents............................98
11.7 Counterparts...............................................100
11.8 Headings...................................................100
11.9 Survival...................................................100
11.10 Governing Law; Submission to Jurisdiction; Venue...........100
11.11 Severability...............................................101
11.12 Entirety...................................................101
11.13 Binding Effect; Termination................................101
11.14 Confidentiality............................................102
11.15 Use of Sources.............................................102
11.16 Conflict...................................................103
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SCHEDULES
Schedule 1.1(a) Existing Letters of Credit
Schedule 1.1(b) Investments
Schedule 1.1(c) Liens
Schedule 2.1(a) Lenders
Schedule 6.13 Subsidiaries
Schedule 6.17 Intellectual Property
Schedule 6.20(a) Real Property Locations
Schedule 6.20(b) Personal Property Locations
Schedule 6.20(c) Chief Executive Office/State of Incorporation
Schedule 7.6 Insurance
Schedule 8.1 Indebtedness
EXHIBITS
Exhibit 2.1(b)(i) Form of Notice of Borrowing for Revolving Loans
Exhibit 2.1(e) Form of Revolving Note
Exhibit 2.3(b)(i) Form of Notice of Borrowing for Foreign Currency Loans
Exhibit 2.4(b) Form of Swingline Loan Request
Exhibit 2.4(d) Form of Swingline Note
Exhibit 3.2 Form of Notice of Extension/Conversion
Exhibit 7.1(c) Form of Officer's Compliance Certificate
Exhibit 7.1(d) From of Borrowing Base Certificate
Exhibit 7.12 Form of Joinder Agreement
Exhibit 11.3(b) Form of Assignment and Acceptance
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of December 31, 2001 (as amended, modified,
restated or supplemented from time to time, the "Credit Agreement"), is by and
among THE PROFIT RECOVERY GROUP USA, INC., a Georgia corporation (the
"Borrower"), THE PROFIT RECOVERY GROUP INTERNATIONAL, INC., a Georgia
corporation (the "Parent"), each of the Domestic Subsidiaries of the Parent
(such Domestic Subsidiaries, together with the Parent, individually a
"Guarantor" and collectively the "Guarantors"), the Lenders (as defined herein)
and BANK OF AMERICA, N. A., as Administrative Agent for the Lenders (in such
capacity, the "Administrative Agent").
W I T N E S S E T H
WHEREAS, the Borrower has requested that the Lenders provide a $75,000,000
credit facility for the purposes hereinafter set forth; and
WHEREAS, the Lenders have agreed to make the requested credit facility
available to the Borrower on the terms and conditions hereinafter set forth;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS
1.1 Definitions.
As used in this Credit Agreement, the following terms shall have the
meanings specified below unless the context otherwise requires:
"Acquisition", by any Person, means the acquisition by such Person of
the Capital Stock or all or substantially all of the Property of another
Person, whether or not involving a merger or consolidation with such
Person.
"Additional Credit Party" means each Person that becomes a Guarantor
after the Closing Date by execution of a Joinder Agreement.
"Adjusted Base Rate" means the Base Rate plus the Applicable
Percentage.
"Adjusted Eurocurrency Rate" means the Eurocurrency Rate plus the
Applicable Percentage.
"Administrative Agent" shall have the meaning assigned to such term in
the heading hereof or any successor administrative agent appointed pursuant
to Section 10.9.
"Administrative Agent's Fees" shall have the meaning assigned to such
term in Section 3.5(d).
"Affiliate" means, with respect to any Person, any other Person (i)
directly or indirectly controlling or controlled by or under direct or
indirect common control with such Person or (ii) directly or indirectly
owning or holding five percent (5%) or more of the Capital Stock in such
Person. For purposes of this definition, "control" when used with respect
to any Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agent-Related Persons" means the Administrative Agent (including any
successor Administrative Agent), together with its Affiliates (including,
in the case of Bank of America in its capacity as the Administrative Agent,
the Arranger), and the officers, directors, employees, agents and
attorneys-in-fact of such Persons and Affiliates.
"Applicable Lending Office" means, for each Lender, the office of such
Lender (or of an Affiliate of such Lender) as such Lender may from time to
time specify to the Administrative Agent and the Borrower by written notice
as the office by which its Eurocurrency Loans are made and maintained.
"Applicable Percentage" means, for purposes of calculating the
applicable interest rate for any day for any Revolving Loan, the applicable
rate of the Unused Fee for any day for purposes of Section 3.5(b) and the
applicable rate of the Letter of Credit Fee for any day, the appropriate
applicable percentage corresponding to the Senior Leverage Ratio in effect
as of the most recent Calculation Date:
============== =================== ==================== ================= ================= ==================
Applicable
Senior Applicable Applicable Percentage For Applicable
Pricing Leverage Percentage For Percentage For Letter of Percentage For
Level Ratio Eurocurrency Loans Base Rate Loans Credit Fees Unused Fees
-------------- ------------------- -------------------- ----------------- ----------------- ------------------
I < 1.0 to 1.0 2.50% 1.00% 2.50% 0.50%
-------------- ------------------- -------------------- ----------------- ----------------- ------------------
II > 1.0 to 1.0 but
< 1.25 to 1.0 2.75% 1.25% 2.75% 0.50%
-------------- ------------------- -------------------- ----------------- ----------------- ------------------
III > 1.25 to 1.0 3.00% 1.50% 3.00% 0.50%
============== =================== ==================== ================= ================= ==================
The Applicable Percentages shall be determined and adjusted quarterly
on the date (each a "Calculation Date") five Business Days after the date
by which the Borrower is required to provide the officer's certificate in
accordance withthe provisions of Section 7.1(c) for the most recently ended
fiscal quarter of the Consolidated Parties; provided, however, that (i) the
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initial Applicable Percentages shall be based on Pricing Level II (as shown
above) and shall remain at Pricing Level II until the first Calculation
Date subsequent to December 31, 2001 and thereafter, the Applicable
Percentages shall be determined by the then current Senior Leverage Ratio;
and provided, further, that if the Borrower fails to provide the officer's
certificate to the Administrative Agent in accordance with Section 7.1(c)
on or before the most recent Calculation Date, the Applicable Percentage
from such Calculation Date shall be based on Pricing Level III until such
time as an appropriate officer's certificate is provided, whereupon the
Applicable Percentage shall be determined by the then Senior Leverage
Ratio. Each Applicable Percentage shall be effective from one Calculation
Date until the next Calculation Date except as set forth in the prior
sentence. Any adjustment in the Applicable Percentages shall be applicable
to all existing Loans and Letters of Credit as well as any new Loans made
or Letters of Credit issued.
"Arranger" means Banc of America Securities LLC, in its capacity as
sole lead arranger and sole book manager.
"Asset Disposition" means the disposition of any or all of the assets
(including without limitation the Capital Stock of a Subsidiary) of any
Consolidated Party whether by sale, lease, transfer or otherwise (including
pursuant to any casualty or condemnation event), other than transfers of
assets permitted by Section 8.5.
"Available Foreign Currency" means (i) British Pounds Sterling,
Canadian Dollars, Japanese Yen and the Euro and (ii) any other freely
available currency which is freely transferable and freely convertible into
Dollars and in which dealings in deposits are carried on in the London
interbank market, which shall be requested by the Borrower and approved by
each Lender.
"Available Revolving Committed Amount" means Twenty Five Million
Dollars ($25,000,000). Notwithstanding any provision herein to the
contrary, upon the consummation of the Xxxxxx Xxxxxxx Acquisition in
accordance with the terms hereof, the Available Revolving Committed Amount
shall no longer be in effect and all references to the Available Revolving
Committed Amount contained herein shall be deleted in their entirety.
"Bank of America" means Bank of America, N.A. and its successors.
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the United
States Code, as amended, modified, succeeded or replaced from time to time.
"Bankruptcy Event" means, with respect to any Person, the occurrence
of any of the following with respect to such Person: (i) a court or
governmental agency having jurisdiction in the premises shall enter a
decree or order for relief in respect of such Person in an involuntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of such Person or
for any substantial part of its Property or orderingthe winding up or
liquidation of its affairs; or (ii) there shall be commenced against such
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Person an involuntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or any case, proceeding or
other action for the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of such Person or
for any substantial part of its Property or for the winding up or
liquidation of its affairs, and such involuntary case or other case,
proceeding or other action shall remain undismissed, undischarged or
unbonded for a period of sixty (60) consecutive days; or (iii) such Person
shall commence a voluntary case under any applicable bankruptcy, insolvency
or other similar law now or hereafter in effect, or consent to the entry of
an order for relief in an involuntary case under any such law, or consent
to the appointment or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of such
Person or for any substantial part of its Property or make any general
assignment for the benefit of creditors; or (iv) such Person shall be
unable to, or shall admit in writing its inability to, pay its debts
generally as they become due.
"Base Rate" means, for any day, a fluctuating rate per annum equal to
the higher of (a) the Federal Funds Rate in effect on such day plus 1/2 of
1% and (b) the Prime Rate in effect on such day. Any change in the Base
Rate due to a change in the Prime Rate or the Federal Funds Rate shall be
effective on the effective date of such change in the Prime Rate or Federal
Funds Rate, respectively.
"Base Rate Loan" means any Loan bearing interest at a rate determined
by reference to the Base Rate.
"Borrower" means the Person identified as such in the heading hereof,
together with any permitted successors and assigns.
"Borrowing Base" means, as of any day, an amount equal to the sum of
(a) eighty-five percent (85%) of Eligible Domestic Receivables plus (b)
fifty percent (50%) of Eligible Foreign Receivables; provided, however, if
the result of the above-referenced calculation is less than $50 million,
the Borrowing Base shall mean, as of any day, an amount equal to the lesser
of (a) $50 million and (b) one hundred percent (100%) of Receivables, in
each case as set forth in the most recent Borrowing Base Certificate
delivered to the Administrative Agent and the Lenders in accordance with
the terms of Section 7.1(d). Following the consummation of the Xxxxxx
Xxxxxxx Acquisition in accordance with the terms hereof, the Borrowing Base
shall include the Eligible Receivables or the Receivables, as applicable,
of Xxxxxx Xxxxxxx and its Subsidiaries in the manner described in the
preceding sentence; provided, however, the amount of credit to be given
such Eligible Receivables or Receivables shall be subject to modification
based upon the results of the field examination to be provided by the
Credit Parties pursuant to Section 7.15. Until such time as the Credit
Parties have delivered the Borrowing Base Certificate for the fiscal
quarter ended December 31, 2001, the Borrowing Base shall be equal to
$50,000,000.
"Borrowing Base Certificate" shall have the meaning assigned to such
term in Section 7.1(d).
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"Business Day" means a day other than a Saturday, Sunday or other day
on which commercial banks in Charlotte, North Carolina or Atlanta, Georgia
are authorized or required by law to close, except that, (i) when used in
connection with a Eurocurrency Loan, such day shall also be a day on which
dealings between banks are carried on in U.S. dollar deposits in London,
England and (ii) when used in connection with a Foreign Currency Loan, such
day shall also be a day on which dealings between banks are carried on in
deposits in Available Foreign Currencies in London interbank market.
"Capital Lease" means, as applied to any Person, any lease of any
Property (whether real, personal or mixed) by that Person as lessee which,
in accordance with GAAP, is or should be accounted for as a capital lease
on the balance sheet of that Person.
"Capital Stock" means (i) in the case of a corporation, capital stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated)
of capital stock, (iii) in the case of a partnership, partnership interests
(whether general or limited), (iv) in the case of a limited liability
company, membership interests and (v) any other interest or participation
that confers on a Person the right to receive a share of the profits and
losses of, or distributions of assets of, the issuing Person.
"Cash Equivalents" means (a) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the
United States of America is pledged in support thereof) having maturities
of not more than twelve months from the date of acquisition, (b) U.S.
dollar denominated time deposits and certificates of deposit of (i) any
Lender, (ii) any domestic commercial bank of recognized standing having
capital and surplus in excess of $500,000,000 or (iii) any bank whose
short-term commercial paper rating from S&P is at least A-1 or the
equivalent thereof or from Xxxxx'x is at least P-1 or the equivalent
thereof (any such bank being an "Approved Bank"), in each case with
maturities of not more than 270 days from the date of acquisition, (c)
commercial paper and variable or fixed rate notes issued by any Approved
Bank (or by the parent company thereof) or any variable rate notes issued
by, or guaranteed by, any domestic corporation rated A-1 (or the equivalent
thereof) or better by S&P or P-1 (or the equivalent thereof) or better by
Moody's and maturing within six months of the date of acquisition, (d)
repurchase agreements entered into by any Person with a bank or trust
company (including any of the Lenders) or recognized securities dealer
having capital and surplus in excess of $500,000,000 for direct obligations
issued by or fully guaranteed by the United States of America in which such
Person shall have a perfected first priority security interest (subject to
no other Liens) and having, on the date of purchase thereof, a fair market
value of at least 100% of the amount of the repurchase obligations and (e)
Investments, classified in accordance with GAAP as current assets, in money
market investment programs registered under the Investment Company Act of
1940, as amended, which are administered by reputable financial
institutions having capital of at least $500,000,000 and the portfolios of
which are limited to Investments of the character described in the
foregoing subdivisions (a) through (d).
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"Change of Control" means the occurrence of any of the following
events: (i) except for any member of the Management Shareholder Group, any
Person or two or more Persons acting in concert shall have acquired
"beneficial ownership," directly or indirectly, of, or shall have acquired
by contract or otherwise, or shall have entered into a contract or
arrangement that, upon consummation, will result in its or their
acquisition of, control over, Voting Stock of the Parent (or other
securities convertible into such Voting Stock) representing 35% or more of
the combined voting power of all Voting Stock of the Parent, (ii) during
any period of up to 24 consecutive months, commencing after the Closing
Date, individuals who at the beginning of such 24 month period were
directors of the Parent (together with any new director whose election by
the Parent's Board of Directors or whose nomination for election by the
Parent's shareholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the beginning
of such period or whose election or nomination for election was previously
so approved) cease for any reason to constitute a majority of the directors
of the Parent then in office, or (iii) the Parent shall fail to own
directly 100% of the outstanding Capital Stock of the Borrower. As used
herein, "beneficial ownership" shall have the meaning provided in Rule
13d-3 of the Securities and Exchange Commission under the Securities Act of
1934.
"Closing Date" means the date hereof.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute thereto, as interpreted by the rules and regulations
issued thereunder, in each case as in effect from time to time. References
to sections of the Code shall be construed also to refer to any successor
sections.
"Collateral" means a collective reference to the collateral which is
identified in, and at any time will be covered by, the Collateral
Documents.
"Collateral Documents" means a collective reference to the Security
Agreement, the Pledge Agreement and such other documents executed and
delivered in connection with the attachment and perfection of the
Administrative Agent's security interests and liens arising thereunder,
including without limitation, UCC financing statements and patent and
trademark filings.
"Commitment" means the Revolving Commitment, the Swingline Commitment,
the Foreign Currency Commitment and the LOC Commitment.
"Communications Division" means that certain division of the Borrower
which provides telecommunications auditing, custom application development,
and advisory services including telecom xxxx auditing and optimization,
call accounting and reporting, contract negotiation and projects requiring
secure internet-based transaction processing.
"Consolidated Capital Expenditures" means, for any period, all capital
expenditures of the Consolidated Parties on a consolidated basis for such
period, as determined in accordance with GAAP.
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"Consolidated EBITDA" means, for any period, the sum of (i)
Consolidated Net Income for such period, plus (ii) an amount which, in the
determination of Consolidated Net Income for such period, has been deducted
for (A) Consolidated Interest Expense, (B) total federal, state, local and
foreign income, value added and similar taxes and (C) depreciation and
amortization expense plus (iii) for the period from January 1, 2002 until
December 31, 2002, all cash charges up to $10 million in the aggregate
directly related to the Xxxxxx Xxxxxxx Acquisition made during such period,
in each case of the Parent and its Subsidiaries on a consolidated basis, as
determined in accordance with GAAP
"Consolidated EBIT" means, for any period, the sum of (i) Consolidated
Net Income for such period, plus (ii) an amount which, in the determination
of Consolidated Net Income for such period, has been deducted for (A)
Consolidated Interest Expense and (B) total federal, state, local and
foreign income, value added and similar taxes, plus (iii) for the period
from January 1, 2002 until December 31, 2002, all cash charges up to $10
million in the aggregate directly related to the Xxxxxx Xxxxxxx Acquisition
made during such period, in each case of the Parent and its Subsidiaries on
a consolidated basis, as determined in accordance with GAAP.
"Consolidated Interest Expense" means, for any period, interest
expense (including the amortization of debt discount and premium, the
interest component under Capital Leases and the implied interest component
under Synthetic Leases) of the Consolidated Parties on a consolidated basis
for such period, as determined in accordance with GAAP.
"Consolidated Net Income" means, for any period, net income (excluding
any extraordinary items) after taxes for such period of the Consolidated
Parties on a consolidated basis, as determined in accordance with GAAP;
provided that, for purposes of determining compliance with the Fixed Charge
Coverage Ratio covenant in Section 7.11(i), the Leverage Ratio covenant in
Section 7.11(ii), the Senior Leverage Ratio covenant in Section 7.11(iii)
and the Net Worth covenant in Section 7.11(iv), there shall be excluded
from Consolidated Net Income the effects of (a) any net book loss realized
in such period from the sale of the Logistics Division or the Groupe Xxxx
Business, (b) any "xxxx to market" net book losses or gains in such period
required in accordance with GAAP to be recorded prior to the sale of the
Logistics Division and any Discontinued Operation or non-cash charges or
gains in such period related to the reclassification of any such
Discontinued Operation as "continuing" or "operating", (c) the amount of
accelerated amortization of goodwill required under FASB 142 for such
period and (d) the amount of the write-off of all capitalized loan fees
made during the period in which the Closing Date occurs.
"Consolidated Parties" means a collective reference to the Parent and
its Subsidiaries, and "Consolidated Party" means any one of them.
"Consolidated Rental Expense" means, for any period, rental expense
under Operating Leases of the Consolidated Parties on a consolidated basis
for such period, as determined in accordance with GAAP.
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"Credit Documents" means a collective reference to this Credit
Agreement, the Notes, the LOC Documents, each Joinder Agreement, the Fee
Letter, the Collateral Documents and all other related agreements and
documents issued or delivered hereunder or thereunder or pursuant hereto or
thereto (in each case as the same may be amended, modified, restated,
supplemented, extended, renewed or replaced from time to time), and "Credit
Document" means any one of them.
"Credit Parties" means a collective reference to the Borrower and the
Guarantors, and "Credit Party" means any one of them.
"Credit Party Obligations" means, without duplication, (i) all of the
obligations of the Credit Parties to the Lenders (including the Issuing
Lender and the Swingline Lender) and the Administrative Agent, whenever
arising, under this Credit Agreement, the Notes, the Collateral Documents
or any of the other Credit Documents (including, but not limited to, any
interest accruing after the occurrence of a Bankruptcy Event with respect
to any Credit Party, regardless of whether such interest is an allowed
claim under the Bankruptcy Code) and (ii) all liabilities and obligations,
whenever arising, owing from the Borrower to any Lender, or any Affiliate
of a Lender, arising under any Hedging Agreement relating to the Loans.
"Debt Issuance" means the issuance of any Indebtedness for borrowed
money by any Consolidated Party other than Indebtedness permitted by
Section 8.1.
"Default" means any event, act or condition which with notice or lapse
of time, or both, would constitute an Event of Default.
"Defaulting Lender" means, at any time, any Lender that (a) has failed
to make a Loan or purchase a Participation Interest required pursuant to
the term of this Credit Agreement within one Business Day of when due, (b)
other than as set forth in (a) above, has failed to pay to the
Administrative Agent or any Lender an amount owed by such Lender pursuant
to the terms of this Credit Agreement within one Business Day of when due,
unless such amount is subject to a good faith dispute or (c) has been
deemed insolvent or has become subject to a bankruptcy or insolvency
proceeding or with respect to which (or with respect to any of assets of
which) a receiver, trustee or similar official has been appointed.
"Determination Date" means, with respect to any Foreign Currency Loan:
(a) in connection with any origination of such Loan, the Business
Day which is the earliest of the date such Loan is made or the date
the interest rate is set;
(b) in connection with any extension or conversion of an existing
Foreign Currency Loan, the Business Day that such Loan is extended or
converted, or the date the rate is set, as applicable, in connection
with any extension or conversion; or
8
(c) the date of any reduction of the Revolving Committed Amount
or the Foreign Currency Committed Amount pursuant to the terms of
Section 3.4;
In addition to the foregoing, such additional dates not more frequently
than once a month as may be determined by the Administrative Agent.
"Discontinued Operations" means a collective reference to (i) the
Communications Division, (ii) the Meridian Business and (iii) the Ship &
Debit Division, and "Discontinued Operation" means any one of them.
"Dollar Amount" means (a) with respect to Dollars or an amount
denominated in Dollars, such amount and (b) with respect to an amount of
any Available Foreign Currency or an amount denominated in such Available
Foreign Currency, the Dollar Equivalent of such amount on the applicable
date contemplated in the Credit Agreement.
"Dollar Equivalent" means, on any date, with respect to any amount
denominated in an Available Foreign Currency, the amount of Dollars into
which the Administrative Agent could, in accordance with its practice from
time to time in the interbank foreign exchange market, convert such amount
of Available Foreign Currency at its spot rate of exchange (inclusive of
all reasonable related costs of conversion) applicable to the relevant
transaction at or about 10:00 A.M., Charlotte, North Carolina time, on such
date.
"Dollars" and "$" means dollars in lawful currency of the United
States of America.
"Domestic Subsidiary" means, with respect to any Person, any
Subsidiary of such Person which is incorporated or organized under the laws
of any State of the United States or the District of Columbia.
"Eligible Assets" means another business or any substantial part of
another business or other long-term assets, in each case, in, or used or
useful in, the same or a similar line of business as the Parent and its
Subsidiaries were engaged in on the Closing Date, or any reasonable
extensions or expansions thereof.
"Eligible Assignee" means (i) a Lender; (ii) an Affiliate of a Lender
having capital and surplus in excess of $250,000,000; and (iii) any other
Person approved by the Administrative Agent and, unless an Event of Default
has occurred and is continuing at the time any assignment is effected in
accordance with Section 11.3, the Borrower (such approval not to be
unreasonably withheld or delayed by the Borrower and such approval to be
deemed given by the Borrower if no objection is received by the assigning
Lender and the Administrative Agent from the Borrower within five Business
Days after notice of such proposed assignment has been provided by the
assigning Lender to the Borrower); provided, however, that neither the
Parent nor an Affiliate of the Parent shall qualify as an Eligible
Assignee.
"Eligible Domestic Receivables" means, as of any date of determination
and without duplication, the aggregate book value of Eligible Receivables
owned by or owing to the Parent or its Domestic Subsidiaries, but excluding
9
in any event (i) any Receivable which is not subject to a perfected, first
priority Lien in favor of the Administrative Agent to secure the Credit
Party Obligations, (ii) Receivables evidenced by notes, chattel paper or
other instruments, unless such notes, chattel paper or instruments have
been delivered to and are in the possession of the Administrative Agent,
and (iii) Receivables owing by an account debtor located outside of the
United States or Canada (unless payment for the goods shipped is secured by
an irrevocable letter of credit in a form and from an institution
acceptable to the Administrative Agent).
"Eligible Foreign Receivables" means, as of any date of determination
and without duplication, the aggregate book value of Eligible Receivables
owned by or owing to the Foreign Subsidiaries of the Parent, but excluding
in any event Receivables owing by an account debtor located outside of the
country of the applicable Foreign Subsidiary's organization.
"Eligible Receivables" means, as of any date of determination and
without duplication, the aggregate book value of all accounts receivable,
receivables, and obligations for payment created or arising from the sale
of inventory or the rendering of services in the ordinary course of
business of the Parent or any of its Subsidiaries (collectively, the
"Receivables"), net of allowances and reserves for doubtful or
uncollectible accounts and sales adjustments consistent with such Person's
internal policies and in any event in accordance with GAAP, but excluding
in any event (i) any Receivable which is subject to any Lien that is not a
Permitted Lien, (ii) Receivables which are more than 60 days past due or 90
days past invoice date, (iii) 50% of the book value of any Receivable not
otherwise excluded by clause (ii) above but owing from an account debtor
which is the account debtor on any existing Receivable then excluded by
such clause (ii), unless the exclusion by such clause (ii) is a result of a
legitimate dispute by the account debtor and the applicable Receivable is
no more than 90 days past due, (iv) Receivables owing by an account debtor
which is not solvent or is subject to any bankruptcy or insolvency
proceeding of any kind, (v) Receivables which are contingent or subject to
offset, deduction, counterclaim, dispute or other defense to payment, in
each case to the extent of such offset, deduction, counterclaim, dispute or
other defense, (vi) Receivables for which any direct or indirect Subsidiary
or any Affiliate is the account debtor, (vii) Receivables representing a
sale to the government of the United States or any agency or
instrumentality thereof unless the Federal Assignment of Claims Act has
been complied with to the satisfaction of the Administrative Agent with
respect to the granting of a security interest in such Receivable, with or
other similar applicable law and (viii) Receivables which fail to meet such
other specifications and requirements as may from time to time be
established by the Administrative Agent in its reasonable discretion.
"Environmental Laws" means any and all lawful and applicable Federal,
state, local and foreign statutes, laws, regulations, ordinances, rules,
judgments, orders, decrees, permits, concessions, grants, franchises,
licenses, agreements or other governmental restrictions relating to the
environment or to emissions, discharges, releases or threatened releases of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes into the environment including, without limitation,
ambient air, surface water, ground water, or land, or otherwise relating to
10
the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of pollutants, contaminants, chemicals, or
industrial, toxic or hazardous substances or wastes.
"Equity Issuance" means any issuance by any Consolidated Party to any
Person which is not a Credit Party of (a) shares of its Capital Stock, (b)
any shares of its Capital Stock pursuant to the exercise of options or
warrants or (c) any shares of its Capital Stock pursuant to the conversion
of any debt securities to equity.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto, as interpreted by the rules and
regulations thereunder, all as the same may be in effect from time to time.
References to sections of ERISA shall be construed also to refer to any
successor sections.
"ERISA Affiliate" means an entity which is under common control with
any Consolidated Party within the meaning of Section 4001(a)(14) of ERISA,
or is a member of a group which includes any Consolidated Party and which
is treated as a single employer under Sections 414(b) or (c) of the Code.
"ERISA Event" means (i) with respect to any Plan, the occurrence of a
Reportable Event or the substantial cessation of operations (within the
meaning of Section 4062(e) of ERISA); (ii) the withdrawal by any
Consolidated Party or any ERISA Affiliate from a Multiple Employer Plan
during a plan year in which it was a substantial employer (as such term is
defined in Section 4001(a)(2) of ERISA), or the termination of a Multiple
Employer Plan; (iii) the distribution of a notice of intent to terminate or
the actual termination of a Plan pursuant to Section 4041(a)(2) or 4041A of
ERISA; (iv) the institution of proceedings to terminate or the actual
termination of a Plan by the PBGC under Section 4042 of ERISA; (v) any
event or condition which might constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to
administer, any Plan; (vi) the complete or partial withdrawal of any
Consolidated Party or any ERISA Affiliate from a Multiemployer Plan; (vii)
the conditions for imposition of a lien under Section 302(f) of ERISA exist
with respect to any Plan; or (viii) the adoption of an amendment to any
Plan requiring the provision of security to such Plan pursuant to Section
307 of ERISA.
"Euro VAT" means Euro VAT Securitization Limited, a company
incorporated in Jersey with Registered No. JE4 8PX.
"Eurocurrency Loan" means any Loan that bears interest at a rate based
upon the Eurocurrency Rate.
"Eurocurrency Rate" means, for any Eurocurrency Loan for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) determined by the Administrative Agent to be equal to
the quotient obtained by dividing (a) the Interbank Offered Rate for such
Eurocurrency Loan for such Interest Period by (b) 1 minus the Eurocurrency
Reserve Requirement for such Eurocurrency Loan for such Interest Period.
11
"Eurocurrency Reserve Requirement" means, at any time, the maximum
rate at which reserves (including, without limitation, any marginal,
special, supplemental, or emergency reserves) are required to be maintained
under regulations issued from time to time by the Board of Governors of the
Federal Reserve System (or any successor) by member banks of the Federal
Reserve System against "Eurocurrency liabilities" (as such term is used in
Regulation D). Without limiting the effect of the foregoing, the
Eurocurrency Reserve Requirement shall reflect any other reserves required
to be maintained by such member banks with respect to (i) any category of
liabilities which includes deposits by reference to which the Adjusted
Eurocurrency Rate is to be determined, or (ii) any category of extensions
of credit or other assets which include Eurocurrency Loans. The Adjusted
Eurocurrency Rate shall be adjusted automatically on and as of the
effective date of any change in the Eurocurrency Reserve Requirement.
"Event of Default" shall have the meaning as defined in Section 9.1.
"Executive Officer" of any Person means any of the chief executive
officer, chief operating officer, president, senior vice president, chief
financial officer or treasurer of such Person.
"Existing Letters of Credit" means the letters of credit described by
date of issuance, letter of credit number, undrawn amount, name of
beneficiary and the date of expiry on Schedule 1.1(a) attached hereto.
"Factor" shall have the meaning assigned to such term in the
definition of "Factoring Agreement".
"Factoring Agreement" means that certain Receivables Financing
Agreement between Meridian VAT Processing (International) Limited,
("Meridian International"), Meridian VAT Processing (N. America) Limited,
("Meridian N. America"), Meridian VAT Processing (Japan) Limited ("Meridian
Japan") and Barclays Bank PLC (the "Factor") providing for the purchase by
the Factor of the accounts receivables of Meridian International, Meridian
N. America and Meridian Japan subject to the terms thereof.
"Fee Letter" means that certain letter agreement, dated as of December
31, 2001, between the Administrative Agent and the Borrower, as amended,
modified, restated or supplemented from time to time.
"Fees" means all fees payable pursuant to Section 3.5.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank on the Business Day next
succeeding such day; provided that (a) if such day is not a Business Day,
12
the Federal Funds Rate for such day shall be such rate on such transactions
on the next preceding Business Day, and (b) if no such rate is so published
on such next preceding Business Day, the Federal Funds Rate for such day
shall be the average rate charged to Bank of America on such day on such
transactions as determined by the Administrative Agent.
"First Tier Foreign Subsidiary" means each Foreign Subsidiary which is
owned directly by a Credit Party.
"Fixed Charge Coverage Ratio" means, as of the end of each fiscal
quarter of the Consolidated Parties for the twelve month period ending on
such date, the ratio of (a) the sum of (i) Consolidated EBIT for the
applicable period plus (ii) Consolidated Rental Expense for the applicable
period plus (iii) any amortization of intangible assets (other than
accelerated amortization of goodwill required under FASB 142) for the
applicable period to (b) the sum of (i) Consolidated Interest Expense for
the applicable period plus (ii) Consolidated Rental Expense for the
applicable period plus (iii) any repurchases of shares by the Parent of its
Capital Stock and any payment of cash dividends by the Parent to its
shareholders during the applicable period.
"Foreign Currency" means the Available Foreign Currency.
"Foreign Currency Commitment" means, with respect to each Lender, the
commitment of such Lender to make Foreign Currency Loans in an aggregate
principal amount at any time outstanding of up to such Lender's Foreign
Currency Commitment Percentage of the Foreign Currency Committed Amount.
"Foreign Currency Commitment Percentage" means, for any Lender, the
percentage identified as its Foreign Currency Commitment Percentage on
Schedule 2.1(a), as such percentage may be modified in connection with any
assignment made in accordance with the provisions of Section 11.3.
"Foreign Currency Committed Amount" means, collectively, the aggregate
amount of all Foreign Currency Commitments as referenced in Section 2.3(a)
and, individually, the amount of each Lender's Foreign Currency Commitment
as specified on Schedule 2.1(a).
"Foreign Currency Equivalent" means, on any date, with respect to an
amount denominated in Dollars, the amount of any applicable Available
Foreign Currency into which the Administrative Agent could, in accordance
with its practice from time to time in the interbank foreign exchange
market, convert such amount of Dollars at its spot rate of exchange
(inclusive of all reasonable related costs of conversion) applicable to the
relevant transaction on or about 10:00 A.M. (Charlotte, North Carolina) on
such date.
"Foreign Currency Loans" shall have the meaning assigned to such term
in Section 2.3(a).
"Foreign Subsidiary" means, with respect to any Person, any Subsidiary
of such Person which is not a Domestic Subsidiary of such Person.
13
"Funded Indebtedness" means, with respect to any Person, without
duplication, (a) all obligations (other than Hedging Agreements) of such
Person for borrowed money, (b) all obligations of such Person evidenced by
bonds, debentures, notes or similar instruments, or upon which interest
payments are customarily made, (c) all obligations of such Person under
conditional sale or other title retention agreements relating to Property
purchased by such Person (other than customary reservations or retentions
of title under agreements with suppliers entered into in the ordinary
course of business), (d) all obligations of such Person issued or assumed
as the deferred purchase price of Property or services purchased by such
Person (other than trade debt incurred in the ordinary course of business
and due within six months of the incurrence thereof) which would appear as
liabilities on a balance sheet of such Person in accordance with GAAP, (e)
the implied principal component of all obligations of such Person under
Capital Leases, (f) commercial letters of credit and the maximum amount of
all performance and standby letters of credit issued or bankers'
acceptances facilities created for the account of such Person and, without
duplication, all drafts drawn thereunder (to the extent unreimbursed), (g)
all preferred Capital Stock issued by such Person and required by the terms
thereof to be redeemed, or for which mandatory sinking fund payments are
due, by a fixed date), (h) the principal portion of all obligations of such
Person under Synthetic Leases, (i) the aggregate amount of uncollected
accounts receivable of such Person subject at such time to a sale of
receivables (or similar transaction) to the extent such transaction is
effected with recourse to such Person (whether or not such transaction
would be reflected on the balance sheet of such Person in accordance with
GAAP), (j) all Funded Indebtedness of others secured by (or for which the
holder of such Funded Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on, or payable out of the proceeds of
production from, Property owned or acquired by such Person, whether or not
the obligations secured thereby have been assumed, (k) all Guaranty
Obligations of such Person with respect to Funded Indebtedness of another
Person and (l) the Funded Indebtedness of any partnership or unincorporated
joint venture in which such Person is a general partner or a joint venturer
to the extent such Indebtedness is recourse to such Person. Notwithstanding
the foregoing, the liabilities of Meridian International, Meridian N.
America and Meridian Japan referenced in Section 8.1(i) shall not be
considered Funded Indebtedness for purposes hereof.
"GAAP" means generally accepted accounting principles in the United
States applied on a consistent basis and subject to the terms of Section
1.3.
"Governmental Authority" means any Federal, state, local or foreign
court or governmental agency, authority, instrumentality or regulatory
body.
"Groupe Xxxx Business" means (i) the Capital Stock of PRG France S.A.
and its Subsidiaries or (ii) all or substantially all of the assets of PRG
France S.A. and its Subsidiaries. The Groupe Xxxx Business was sold by the
Borrower on December 14, 2001.
14
"Guarantors" means the Parent, each of the Domestic Subsidiaries of
the Parent, each of the Domestic Subsidiaries of the Borrower, each
Additional Credit Party which has executed a Joinder Agreement, and any
other Person who becomes a Guarantor, together with their successors and
permitted assigns, and "Guarantor " means any one of them.
"Guaranty Obligations" means, with respect to any Person, without
duplication, any obligations of such Person (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or
collection) guaranteeing or intended to guarantee any Indebtedness of any
other Person in any manner, whether direct or indirect, and including
without limitation any obligation, whether or not contingent, (i) to
purchase any such Indebtedness or any Property constituting security
therefor, (ii) to advance or provide funds or other support for the payment
or purchase of any such Indebtedness or to maintain working capital,
solvency or other balance sheet condition of such other Person (including
without limitation keep well agreements, maintenance agreements, comfort
letters or similar agreements or arrangements) for the benefit of any
holder of Indebtedness of such other Person, (iii) to lease or purchase
Property, securities or services primarily for the purpose of assuring the
holder of such Indebtedness, or (iv) to otherwise assure or hold harmless
the holder of such Indebtedness against loss in respect thereof. The amount
of any Guaranty Obligation hereunder shall (subject to any limitations set
forth therein) be deemed to be an amount equal to the outstanding principal
amount (or maximum principal amount, if larger) of the Indebtedness in
respect of which such Guaranty Obligation is made.
"Hedging Agreements" means any interest rate protection agreement or
foreign currency exchange agreement.
"Xxxxxx Xxxxxxx Acquisition" means the Acquisition by the Parent of
(a) substantially all of the assets of Xxxxxx Xxxxxxx Texas and (b)
substantially all of the outstanding Capital Stock of Xxxxxx Xxxxxxx Asia,
Xxxxxx Xxxxxxx Australia and Xxxxxx Xxxxxxx Canada (collectively, "Xxxxxx
Xxxxxxx"), provided that (i) the asset agreement, the stock agreement and
related documentation for such Acquisition shall be in form and substance
satisfactory to the Administrative Agent (it being understood that the
asset agreement and stock agreement attached as Annexes A and B,
respectively, to the proxy statement filed by the Parent on December 19,
2001 are satisfactory) and the asset agreement, the stock agreement and
such related documentation shall not be altered, amended or otherwise
changed or supplemented or any condition therein waived in any such case in
a manner adverse to the Lenders without the prior written consent of the
Administrative Agent, (ii) no material adverse change has occurred in the
condition (financial or otherwise), operations, business, assets,
liabilities or prospects of Xxxxxx Xxxxxxx since December 31, 2000, (iii)
all governmental, shareholder and third party consents and approvals
necessary in connection with the Acquisition shall have been obtained, (iv)
at least 5 days prior to the date of closing of such Acquisition, the
Borrower shall have delivered to the Administrative Agent a Pro Forma
Compliance Certificate (based on estimated results for the fiscal quarter
ended December 31, 2001) demonstrating that, upon giving effect to such
Acquisition on a pro forma basis, the Credit Parties shall be in compliance
with all of the covenants set forth in Section 7.11, (v) after giving
effect to such Acquisition, there shall be at least $25,000,000 of
availability existing under the Revolving Committed Amount, (vi) there
15
shall not exist any order, decree, judgment, ruling or injunction which
restrains the consummation of such Acquisition, (vii) the representations
and warranties made by the Credit Parties in any Credit Document shall be
true and correct in all material respects at and as if made as of the date
of such Acquisition (after giving effect thereto) except to the extent such
representations and warranties expressly relate to an earlier date, (viii)
no information has come to the attention to the Credit Parties which would
cause any information with respect to Xxxxxx Xxxxxxx previously delivered
to the Administrative Agent to be untrue or misleading in any material
respect, and (ix) immediately prior to and after giving effect to such
Acquisition, no Default or Event of Default shall exist.
"Xxxxxx Xxxxxxx Asia" means Xxxxxx Xxxxxxx & Associates (Asia)
Limited, a Hong Kong corporation.
"Xxxxxx Xxxxxxx Australia" means Xxxxxx Xxxxxxx & Associates
(Australia), Inc., a Texas corporation.
"Xxxxxx Xxxxxxx Canada" means Xxxxxx Xxxxxxx & Associates (Canada),
Inc., a Texas corporation.
"Xxxxxx Xxxxxxx Texas" means Xxxxxx Xxxxxxx & Associates
International, Inc., a Texas corporation.
"Indebtedness" means, with respect to any Person, without duplication,
(a) all obligations of such Person for borrowed money, (b) all obligations
of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to Property purchased by such Person (other than
customary reservations or retentions of title under agreements with
suppliers entered into in the ordinary course of business), (d) all
obligations of such Person issued or assumed as the deferred purchase price
of Property or services purchased by such Person (other than trade debt
incurred in the ordinary course of business and due within six months of
the incurrence thereof) which would appear as liabilities on a balance
sheet of such Person, (e) all obligations of such Person under take-or-pay
or similar arrangements or under commodities agreements, (f) all
Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien on, or payable out of the proceeds of production from,
Property owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed, (g) all Guaranty Obligations of such
Person, (h) the principal portion of all obligations of such Person under
Capital Leases, (i) all obligations of such Person under Hedging
Agreements, (j) commercial letters of credit and the maximum amount of all
standby letters of credit issued or bankers' acceptances facilities created
for the account of such Person and, without duplication, all drafts drawn
thereunder (to the extent unreimbursed), (k) the principal portion of all
obligations of such Person under Synthetic Leases, (l) all preferred
Capital Stock issued by such Person and which by the terms thereof could be
(at the request of the holders thereof or otherwise) be subject to
mandatory sinking fund payments, redemption or other acceleration by a
16
fixed date, (m) all obligations of such Person to repurchase any securities
issued by such Person at any time on or prior to the Maturity Date which
repurchase obligations are related to the issuance thereof, including,
without limitation, obligations commonly known as residual equity
appreciation potential shares, (n) the Indebtedness of any partnership or
unincorporated joint venture in which such Person is a general partner or a
joint venturer to the extent such Indebtedness is recourse to such Person
and (o) the aggregate amount of uncollected accounts receivable of such
Person subject at such time to a sale of receivables (or similar
transaction) to the extent such transaction is effected with recourse to
such Person (whether or not such transaction would be reflected on the
balance sheet of such Person in accordance with GAAP).
"Indenture" means that certain Indenture dated as of November 26, 2001
between the Parent and SunTrust Bank, as trustee, as amended or modified in
accordance with the terms hereof.
"Interbank Offered Rate" means, for any Eurocurrency Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100th of 1%) in each case determined by the
Administrative Agent to be equal to:
(a) the offered rate that appears on the Dow Xxxxx Telerate Screen
Page 3750 (or any successor page) that displays an average British
Bankers Association Interest Settlement Rate for deposits in Dollars
or the applicable Available Foreign Currency (for delivery on the
first day of the applicable Interest Period) for a term equivalent to
the applicable Interest Period at approximately 11:00 a.m. (London
time) two Business Days prior to the first day of the applicable
Interest Period; or
(b) if for any reason the foregoing rate in clause (i) is unavailable
or undeterminable, the offered rate on such other page or other
service that displays an average British Bankers Association Interest
Settlement Rate for deposits in Dollars or the applicable Available
Foreign Currency (for delivery on the first day of the applicable
Interest Period) for a term equivalent to the applicable Interest
Period at approximately 11:00 a.m. (London time) two Business Days
prior to the first day of the applicable Interest Period; or
(c) if for any reason the foregoing rates in clauses (i) and (ii) are
unavailable or undeterminable, the rate of interest at which deposits
in Dollars or the applicable Available Foreign Currency for delivery
on the first day of the applicable Interest in same day funds in the
approximate amount of the applicable Eurocurrency Loan for a term
equivalent to the applicable Interest Period would be offered by the
London branch of Bank of America to major banks in the offshore Dollar
market at approximately 11:00 a.m. (London time) two Business Days
prior to the first day of the applicable Interest Period.
"Interest Payment Date" means (a) as to Base Rate Loans, the last
Business Day of each calendar month, the date of repayment of principal of
such Loan and the Maturity Date, and (b) as to Eurocurrency Loans, the last
17
day of each applicable Interest Period, the date of repayment of principal
of such Loan and the Maturity Date, and in addition where the applicable
Interest Period for a Eurocurrency Loan is greater than three months, then
also the date three months from the beginning of the Interest Period and
each three months thereafter.
"Interest Period" means, as to Eurocurrency Loans, a period of one,
two, three or six months' duration, as the Borrower may elect, commencing,
in each case, on the date of the borrowing (including continuations and
conversions thereof); provided, however, (a) if any Interest Period would
end on a day which is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day (except that where the next
succeeding Business Day falls in the next succeeding calendar month, then
on the next preceding Business Day), (b) no Interest Period shall extend
beyond the Maturity Date, and (c) where an Interest Period begins on a day
for which there is no numerically corresponding day in the calendar month
in which the Interest Period is to end, such Interest Period shall end on
the last Business Day of such calendar month.
"Investment" means (a) the acquisition (whether for cash, property,
services, assumption of Indebtedness, securities or otherwise) of assets,
Capital Stock, bonds, notes, debentures, partnership, joint ventures or
other ownership interests or other securities of any Person or (b) any
deposit with, or advance, loan or other extension of credit to, any Person
(other than deposits made in connection with the purchase or lease of
equipment or other assets in the ordinary course of business or the leasing
of real property in the ordinary course of business) or (c) any other
capital contribution to or investment in any Person, including, without
limitation, any Guaranty Obligations (including any support for a letter of
credit issued on behalf of such Person) incurred for the benefit of such
Person.
"Issuing Lender" means Bank of America.
"Issuing Lender Fees" shall have the meaning assigned to such term in
Section 3.5(b)(ii).
"Joinder Agreement" means a Joinder Agreement substantially in the
form of Exhibit 7.12 hereto, executed and delivered by an Additional Credit
Party in accordance with the provisions of Section 7.12.
"Lender" means any of the Persons identified as a "Lender" on the
signature pages hereto, and any Person which may become a Lender by way of
assignment in accordance with the terms hereof, together with their
successors and permitted assigns.
"Letter of Credit" means (a) any letter of credit issued by the
Issuing Lender for the account of the Borrower in accordance with the terms
of Section 2.2 and (b) any Existing Letter of Credit.
"Letter of Credit Fee" shall have the meaning assigned to such term in
Section 3.5(b)(i).
18
"Leverage Ratio" means, with respect to the Consolidated Parties on a
consolidated basis for the twelve month period ending on the last day of
any fiscal quarter, the ratio of (a) Funded Indebtedness of the
Consolidated Parties on a consolidated basis on the last day of such period
to (b) Consolidated EBITDA for such period.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, security interest, encumbrance, lien (statutory or otherwise),
preference, priority or charge of any kind (including any agreement to give
any of the foregoing, any conditional sale or other title retention
agreement, any financing or similar statement or notice filed under the
Uniform Commercial Code as adopted and in effect in the relevant
jurisdiction or other similar recording or notice statute, and any lease in
the nature thereof).
"Loan" or "Loans" means the Revolving Loans (or a portion of any
Revolving Loan bearing interest at the Adjusted Base Rate or the Adjusted
Eurocurrency Rate) and/or any Swingline Loans and/or any Foreign Currency
Loan (or any Foreign Currency Loan referred to as a Eurocurrency Loan),
individually or collectively, as appropriate.
"LOC Commitment" means the commitment of the Issuing Lender to issue
Letters of Credit, and to honor payment obligations under Letters of Credit
hereunder in an aggregate face amount at any time outstanding (together
with the amounts of any unreimbursed drawings thereon) of up to the LOC
Committed Amount and with respect to each Lender, the commitment of each
Lender to purchase participation interests in the Letters of Credit.
"LOC Committed Amount" shall have the meaning assigned to such term in
Section 2.2.
"LOC Documents" means, with respect to any Letter of Credit, such
Letter of Credit, any amendments thereto, any documents delivered in
connection therewith, any application therefor, and any agreements,
instruments, guarantees or other documents (whether general in application
or applicable only to such Letter of Credit) governing or providing for (i)
the rights and obligations of the parties concerned or at risk or (ii) any
collateral security for such obligations.
"LOC Obligations" means, at any time, the sum of (i) the maximum
amount which is, or at any time thereafter may become, available to be
drawn under Letters of Credit then outstanding, assuming compliance with
all requirements for drawings referred to in such Letters of Credit plus
(ii) the aggregate amount of all drawings under Letters of Credit honored
by the Issuing Lender but not theretofore reimbursed by the Borrower.
"Logistics Division" means that certain division of the Borrower which
provides audits of freight related disbursements to identify and recover
overpayments including specialization in ocean freight, truck freight, rail
freight and overnight freight. The Logistics Division was sold by the
Borrower on October 30, 2001.
19
"Management Shareholder Group" means (i) Xxxx X. Xxxx, Xxxx X. Xxxx,
Xxxxxxx X. Xxxxx, Xxxxxxxx Xxxxxx and their respective family members and
trusts and/or partnerships created for the benefit of such family members
or for charitable purposes and (ii) following the consummation of the
Xxxxxx Xxxxxxx Acquisition, Xxxx Xxxxxxx and Mr. Xxxxxx Xxxxxxx and their
respective family members and trusts and/or partnerships created for the
benefit of such family members or for charitable purposes.
"Material Adverse Effect" means a material adverse effect on (i) the
condition (financial or otherwise), operations, business, assets,
liabilities or prospects of the Parent and its Subsidiaries taken as a
whole, (ii) the ability of any Credit Party to perform any material
obligation under the Credit Documents to which it is a party or (iii) the
material rights and remedies of the Lenders under the Credit Documents.
"Material Foreign Subsidiary" means any First Tier Foreign Subsidiary
of a Credit Party in which the portion of Consolidated EBITDA for any
period attributable to such Foreign Subsidiary exceeds 5% of Consolidated
EBITDA for such period.
"Materials of Environmental Concern" means any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as
such in or under any Environmental Laws, including, without limitation,
asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.
"Maturity Date" means December 31, 2004.
"Meridian" means Meridian VAT Corporation Limited, a company
incorporated in Jersey with Registered No. 18278.
"Meridian Business" means (i) the Capital Stock of Meridian and its
Subsidiaries or (ii) all or substantially all of the assets of Meridian and
its Subsidiaries.
"Meridian International" shall have the meaning assigned to such term
in the definition of "Factoring Agreement".
"Meridian Japan" shall have the meaning assigned to such term in the
definition of "Factoring Agreement".
"Meridian N. America" shall have the meaning assigned to such term in
the definition of "Factoring Agreement".
"Moody's" means Xxxxx'x Investors Service, Inc., or any successor or
assignee of the business of such company in the business of rating
securities.
"Multiemployer Plan" means a Plan which is a multiemployer plan as
defined in Sections 3(37) or 4001(a)(3) of ERISA.
20
"Multiple Employer Plan" means a Plan which any Consolidated Party or
any ERISA Affiliate and at least one employer other than the Consolidated
Parties or any ERISA Affiliate are contributing sponsors.
"NatWest Credit Agreement" means that certain Credit Agreement dated
May 29, 1998 among Euro Vat, as borrower, Meridian VAT Reclaim Operations
Limited, as servicer, Thames Asset Global Securitization No. 1, Inc., as
lender and Coutts (Jersey) Limited, as manager.
"Net Cash Proceeds" means the aggregate cash proceeds received by the
Consolidated Parties in respect of any Asset Disposition, Equity Issuance
or Debt Issuance, net of (a) direct costs (including, without limitation,
legal, accounting and investment banking fees, sales commissions and
compensation related expenses) and (b) taxes paid or payable as a result
thereof; it being understood that "Net Cash Proceeds" shall include,
without limitation, any cash received upon the sale or other disposition of
any non-cash consideration received by the Consolidated Parties in any
Asset Disposition, Equity Issuance or Debt Issuance.
"Net Worth" means, as of any date, shareholders' equity or net worth
of the Consolidated Parties on a consolidated basis as determined in
accordance with GAAP.
"Note" or "Notes" means the Revolving Notes, individually or
collectively, as appropriate.
"Notice of Borrowing" means a written notice of borrowing in
substantially the form of Exhibit 2.1(b)(i), as required by Section
2.1(b)(i) in the case of Revolving Loans or Exhibit 2.3(b)(i), as required
by Section 2.3(b)(i) in the case of Foreign Currency Loans.
"Notice of Extension/Conversion" means the written notice of extension
or conversion in substantially the form of Exhibit 3.2, as required by
Section 3.2.
"Operating Lease" means, as applied to any Person, any lease
(including, without limitation, leases which may be terminated by the
lessee at any time) of any Property (whether real, personal or mixed) which
is not a Capital Lease other than any such lease in which that Person is
the lessor.
"Other Taxes" shall have the meaning assigned to such term in Section
3.11.
"Parent" means The Profit Recovery Group International, Inc., a
Georgia corporation, together with any successors and permitted assigns.
"Participation Interest" means a purchase by a Lender of a
participation in Letters of Credit or LOC Obligations as provided in
Section 2.2, in Swingline Loans as provided in Section 2.4 or in any Loans
as provided in Section 3.14.
21
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA and any successor thereof.
"Permitted Acquisition" means (a) the Xxxxxx Xxxxxxx Acquisition and
(b) any other Acquisition by the Parent or any Subsidiary of the Parent for
consideration no greater than the fair market value of the Capital Stock or
Property acquired, provided that (i) the Capital Stock or Property acquired
in such Acquisition constitute Eligible Assets, (ii) the Administrative
Agent shall have received all items in respect of the Capital Stock or
Property acquired in such Acquisition (and/or the seller thereof) required
to be delivered by the terms of Section 7.12 and/or Section 7.14, (iii) in
the case of an Acquisition of the Capital Stock of another Person, the
board of directors (or other comparable governing body) of such other
Person shall have duly approved such Acquisition, (iv) the Borrower shall
have delivered to the Administrative Agent a Pro Forma Compliance
Certificate demonstrating that, upon giving effect to such Acquisition on a
pro forma basis, the Credit Parties shall be in compliance with all of the
covenants set forth in Section 7.11, (v) the representations and warranties
made by the Credit Parties in any Credit Document shall be true and correct
in all material respects at and as if made as of the date of such
Acquisition (after giving effect thereto) except to the extent such
representations and warranties expressly relate to an earlier date, (vi)
the cost of such Acquisition (including cash and non-cash consideration and
any assumption of liabilities) shall not exceed $5,000,000, (vii) after
giving effect to such Acquisition, the aggregate consideration (including
cash and non-cash consideration and any assumption of liabilities) for all
such Acquisitions in any fiscal year of the Borrower shall not exceed
$10,000,000, (viii) such Acquisition occurs subsequent to the
Administrative Agent's receipt of the financial statements and officer's
certificate required by Sections 7.1(a) and (c) for the fiscal year ending
December 31, 2002 and (ix) such Acquisition has been approved in writing by
the Required Lenders. Notwithstanding the foregoing, the parties hereto
agree that the Parent or any Subsidiary of the Parent may consummate a
Permitted Acquisition without obtaining the prior written approval of the
Required Lenders if the Leverage Ratio has been less than 2.5 to 1.0 as of
the two most recent fiscal quarters preceding such Permitted Acquisition
(as demonstrated in the applicable officer's certificates provided by the
Borrower pursuant to Section 7.11(c)).
"Permitted Investments" means Investments which are either (i) cash
and Cash Equivalents; (ii) accounts receivable created, acquired or made by
any Consolidated Party in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms; (iii) Investments
consisting of Capital Stock, obligations, securities or other property
received by any Consolidated Party in settlement of accounts receivable
(created in the ordinary course of business) from bankrupt obligors; (iv)
Investments existing as of the Closing Date and set forth in Schedule
1.1(b), (v) Guaranty Obligations permitted by Section 8.1; (vi) advances or
loans to directors, officers, employees, agents, customers or suppliers
that do not exceed $500,000 in the aggregate at any one time outstanding
for all of the Consolidated Parties; (vii) Investments by one Credit Party
in another Credit Party (other than the Parent); (viii) Investments by the
Borrower in the Parent in an amount necessary to allow the Parent to pay
regularly scheduled interest payments on the Subordinated Debt; (ix)
Investments in Foreign Subsidiaries of the Parent in an amount not to
exceed $25,000,000 in the aggregate during the term of this Credit
Agreement; (x) Permitted Acquisitions, (xi) compensation advances to
22
commissioned auditors made in the ordinary course of business and (xii)
other loans, advances and Investments of a nature not contemplated in the
foregoing subsections in an amount not to exceed $2,500,000 in the
aggregate at any time outstanding.
"Permitted Liens" means:
(i) Liens in favor of the Administrative Agent to secure the Credit
Party Obligations;
(ii) Liens (other than Liens created or imposed under ERISA) for
taxes, assessments or governmental charges or levies not yet due or Liens
for taxes being contested in good faith by appropriate proceedings for
which adequate reserves determined in accordance with GAAP have been
established (and as to which the Property subject to any such Lien is not
yet subject to foreclosure, sale or loss on account thereof);
(iii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and suppliers and other Liens imposed
by law or pursuant to customary reservations or retentions of title arising
in the ordinary course of business, provided that such Liens secure only
amounts not yet due and payable or, if due and payable, are unfiled and no
other action has been taken to enforce the same or are being contested in
good faith by appropriate proceedings for which adequate reserves
determined in accordance with GAAP have been established (and as to which
the Property subject to any such Lien is not yet subject to foreclosure,
sale or loss on account thereof);
(iv) Liens (other than Liens created or imposed under ERISA) incurred
or deposits made by any Consolidated Party in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security, or to secure the performance of
tenders, statutory obligations, bids, leases, government contracts,
performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money);
(v) Liens in connection with attachments or judgments (including
judgment or appeal bonds) provided that the judgments secured shall, within
30 days after the entry thereof, have been discharged or execution thereof
stayed pending appeal, or shall have been discharged within 30 days after
the expiration of any such stay;
(vi) easements, rights-of-way, restrictions (including zoning
restrictions), minor defects or irregularities in title and other similar
charges or encumbrances not, in any material respect, impairing the use of
the encumbered Property for its intended purposes;
(vii) Liens on Property of any Person securing purchase money
Indebtedness (including Capital Leases and Synthetic Leases) of such Person
to the extent permitted under Section 8.1(c), provided that any such Lien
attaches to such Property concurrently with or within 90 days after the
acquisition thereof;
23
(viii) leases or subleases granted to others not interfering in any
material respect with the business of any Consolidated Party;
(ix) normal and customary rights of setoff upon deposits of cash in
favor of banks or other depository institutions; and
(x) Liens existing as of the Closing Date and set forth on Schedule
1.1(c); provided that (a) no such Lien shall at any time be extended to or
cover any Property other than the Property subject thereto on the Closing
Date and (b) the principal amount of the Indebtedness secured by such Liens
shall not be extended, renewed, refunded or refinanced.
"Person" means any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other
enterprise (whether or not incorporated) or any Governmental Authority.
"Plan" means any employee benefit plan (as defined in Section 3(3) of
ERISA) which is covered by ERISA and with respect to which any Consolidated
Party or any ERISA Affiliate is (or, if such plan were terminated at such
time, would under Section 4069 of ERISA be deemed to be) an "employer"
within the meaning of Section 3(5) of ERISA.
"Pledge Agreement" means the pledge agreement dated as of the Closing
Date executed in favor of the Administrative Agent by each of the Credit
Parties, as amended, modified, restated or supplemented from time to time.
"PRG France" means PRG France, S.A., a company incorporated in France.
"Prime Rate" means, for any day, the rate per annum in effect for such
day as publicly announced from time to time by Bank of America as its
"prime rate". Such rate is a rate set by Bank of America based upon various
factors including Bank of America's costs and desired return, general
economic conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or below such announced
rate. Any change in such rate announced by Bank of America shall take
effect at the opening of business on the day specified in the public
announcement of such change.
"Pro Forma Compliance Certificate" means a certificate of an Executive
Officer of the Borrower delivered to the Administrative Agent in connection
with a Permitted Acquisition and containing reasonably detailed
calculations, upon giving effect to the applicable transaction on a pro
forma basis, of the financial covenants set forth in Section 7.11.
"Property" means any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"Quoted Rate" means, with respect to a Swingline Loan, the rate per
annum offered by the Swingline Lender and accepted by the Borrower with
respect to such Swingline Loan.
24
"Receivables" shall have the meaning given such term in the definition
of "Eligible Receivables".
"Register" shall have the meaning given such term in Section 11.3(c).
"Regulation T, U, or X" means Regulation T, U or X, respectively, of
the Board of Governors of the Federal Reserve System as from time to time
in effect and any successor to all or a portion thereof.
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping or disposing
into the environment (including the abandonment or discarding of barrels,
containers and other closed receptacles) of any Materials of Environmental
Concern.
"Reportable Event" means any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the notice
requirement has been waived by regulation.
"Required Lenders" means, at any time, Lenders which are then in
compliance with their obligations hereunder (as determined by the
Administrative Agent) and holding in the aggregate at least 66 2/3% of (i)
the Revolving Commitments (and Participation Interests therein) or (ii) if
the Commitments have been terminated, the outstanding Loans and
Participation Interests (including the Participation Interests of the
Issuing Lender in any Letters of Credit).
"Requirement of Law" means, as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its material property
is subject.
"Restricted Payment" means (i) any dividend or other payment or
distribution, direct or indirect, on account of any shares of any class of
Capital Stock of any Consolidated Party, now or hereafter outstanding
(including without limitation any payment in connection with any merger or
consolidation involving any Consolidated Party), or to the direct or
indirect holders of any shares of any class of Capital Stock of any
Consolidated Party, now or hereafter outstanding, in their capacity as such
(other than dividends or distributions payable in the same class of Capital
Stock of the applicable Person or to any Credit Party (directly or
indirectly through Subsidiaries), (ii) any redemption, retirement, sinking
fund or similar payment, purchase or other acquisition for value, direct or
indirect, of any shares of any class of Capital Stock of any Consolidated
Party, now or hereafter outstanding and (iii) any payment made to retire,
or to obtain the surrender of, any outstanding warrants, options or other
rights to acquire shares of any class of Capital Stock of any Consolidated
Party, now or hereafter outstanding.
25
"Revolving Commitment" means, with respect to each Lender, the
commitment of such Lender in an aggregate principal amount at any time
outstanding of up to such Lender's Revolving Commitment Percentage of the
Revolving Committed Amount, (i) to make Revolving Loans in accordance with
the provisions of Section 2.1(a) and (ii) to purchase Participation
Interests in Letters of Credit in accordance with the provisions of Section
2.2(c).
"Revolving Commitment Percentage" means, for any Lender, the
percentage identified as its Revolving Commitment Percentage on Schedule
2.1(a), as such percentage may be modified in connection with any
assignment made in accordance with the provisions of Section 11.3.
"Revolving Committed Amount" means Seventy Five Million Dollars
($75,000,000) or such lesser amount as the Revolving Committed Amount may
be reduced pursuant to Section 3.4.
"Revolving Loans" shall have the meaning assigned to such term in
Section 2.1(a).
"Revolving Note" or "Revolving Notes" means the promissory notes of
the Borrower in favor of each of the Lenders evidencing the Revolving Loans
provided pursuant to Section 2.1, individually or collectively, as
appropriate, as such promissory notes may be amended, modified, restated,
supplemented, extended, renewed or replaced from time to time.
"Revolving Obligations" means, collectively, the Revolving Loans, the
Foreign Currency Loans, the Swingline Loans and the LOC Obligations.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw
Hill, Inc., or any successor or assignee of the business of such division
in the business of rating securities.
"Sale and Leaseback Transaction" means any direct or indirect
arrangement with any Person or to which any such Person is a party,
providing for the leasing to any Consolidated Party of any Property,
whether owned by such Consolidated Party as of the Closing Date or later
acquired, which has been or is to be sold or transferred by such
Consolidated Party to such Person or to any other Person from whom funds
have been, or are to be, advanced by such Person on the security of such
Property.
"Security Agreement" means the security agreement dated as of the
Closing Date executed in favor of the Administrative Agent by each of the
Credit Parties, as amended, modified, restated or supplemented from time to
time.
"Senior Leverage Ratio" means, with respect to the Consolidated
Parties on a consolidated basis for the twelve-month period ending on the
last day of any fiscal quarter, the ratio of (a) the sum of Funded
Indebtedness of the Consolidated Parties on a consolidated basis minus the
Subordinated Debt of the Consolidated Parties on a consolidated basis on
the last day of such period to (b) Consolidated EBITDA for such period.
26
"Ship & Debit Division" means the discrete unit within the Borrower
responsible for providing revenue recovery services to electronic
manufacturers and similar businesses.
"Single Employer Plan" means any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan or a Multiple Employer Plan.
"Solvent" or "Solvency" means, with respect to any Person as of a
particular date, that on such date (i) such Person is able to realize upon
its assets and pay its debts and other liabilities, contingent obligations
and other commitments as they mature in the normal course of business, (ii)
such Person does not intend to, and does not believe that it will, incur
debts or liabilities beyond such Person's ability to pay as such debts and
liabilities mature in their ordinary course, (iii) such Person is not
engaged in a business or a transaction, and is not about to engage in a
business or a transaction, for which such Person's Property would
constitute unreasonably small capital after giving due consideration to the
prevailing practice in the industry in which such Person is engaged or is
to engage, (iv) the fair value of the Property of such Person is greater
than the total amount of liabilities, including, without limitation,
contingent liabilities, of such Person and (v) the present fair salable
value of the assets of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its debts as they
become absolute and matured. In computing the amount of contingent
liabilities at any time, it is intended that such liabilities will be
computed at the amount which, in light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be
expected to become an actual or matured liability.
"Subordinated Debt" means the Indebtedness evidenced by the Indenture
in an aggregate principal amount not to exceed $125,000,000.
"Subsidiary" means, as to any Person at any time, (a) any corporation
more than 50% of whose Capital Stock of any class or classes having by the
terms thereof ordinary voting power to elect a majority of the directors of
such corporation (irrespective of whether or not at such time, any class or
classes of such corporation shall have or might have voting power by reason
of the happening of any contingency) is at such time owned by such Person
directly or indirectly through Subsidiaries, and (b) any partnership,
association, joint venture or other entity of which such Person directly or
indirectly through Subsidiaries owns at such time more than 50% of the
Capital Stock.
"Swingline Commitment" means the commitment of the Swingline Lender to
make Swingline Loans in an aggregate principal amount at any time
outstanding of up to the Swingline Committed Amount.
"Swingline Committed Amount" shall have the meaning assigned to such
term in Section 2.4(a).
27
"Swingline Lender" means Bank of America.
"Swingline Loan" shall have the meaning assigned to such term in
Section 2.4(a).
"Swingline Note" means the promissory note of the Borrower in favor of
the Swingline Lender in the original principal amount of $10,000,000, as
such promissory note may be amended, modified, restated or replaced from
time to time.
"Synthetic Lease" means any synthetic lease, tax retention operating
lease, off-balance sheet loan or similar off-balance sheet financing
product where such transaction is considered borrowed money indebtedness
for tax purposes but is classified as an Operating Lease.
"Taxes" shall have the meaning assigned to such term in Section 3.11.
"Unused Fee" shall have the meaning assigned to such term in Section
3.5(a).
"Unused Fee Calculation Period" shall have the meaning assigned to
such term in Section 3.5(a).
"Unused Revolving Committed Amount" means, for any period, the amount
by which (a) the then applicable Revolving Committed Amount exceeds (b) the
daily average sum for such period of (i) the outstanding aggregate
principal amount of all Revolving Loans plus (ii) the outstanding aggregate
principal amount of all LOC Obligations.
"Voting Stock" means, with respect to any Person, Capital Stock issued
by such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even though the right so to
vote has been suspended by the happening of such a contingency.
"Wholly Owned Subsidiary" of any Person means any Subsidiary 100% of
whose Voting Stock is at the time owned by such Person directly or
indirectly through other Wholly Owned Subsidiaries.
1.2 Computation of Time Periods.
For purposes of computation of periods of time hereunder, the word "from"
means "from and including" and the words "to" and "until" each mean "to but
excluding."
1.3 Accounting Terms.
Except as otherwise expressly provided herein, all accounting terms used
herein shall be interpreted, and all financial statements and certificates and
reports as to financial matters required to be delivered to the Lenders
hereunder shall be prepared, in accordance with GAAP applied on a consistent
basis. All calculations made for the purposes of determining compliance with
this Credit Agreement shall (except as otherwise expressly provided herein) be
28
made by application of GAAP applied on a basis consistent with the most recent
annual or quarterly financial statements delivered pursuant to Section 7.1;
provided, however, if (a) the Credit Parties shall object to determining such
compliance on such basis at the time of delivery of such financial statements
due to any change in GAAP or the rules promulgated with respect thereto or (b)
the Administrative Agent or the Required Lenders shall so object in writing
within 60 days after delivery of such financial statements, then such
calculations shall be made on a basis consistent with the most recent financial
statements delivered by the Credit Parties to the Lenders as to which no such
objection shall have been made.
Notwithstanding the above, the parties hereto acknowledge and agree that,
for purposes of all calculations made under the financial covenants set forth in
Section 7.11 so long as the Borrower shall have provided the Administrative
Agent with a Pro Forma Compliance Certificate with respect to the applicable
Permitted Acquisition, income statement items (whether positive or negative)
attributable to the Property acquired in any Permitted Acquisition and any
Indebtedness incurred by any Consolidated Party in order to consummate such
Permitted Acquisition shall be included to the extent relating to any period
applicable in such calculations occurring after the date of such Permitted
Acquisition (and, notwithstanding the foregoing, during the first four fiscal
quarters following the date of such Permitted Acquisition (other than the Xxxxxx
Xxxxxxx Acquisition), (i) such Permitted Acquisition and any Indebtedness
incurred by Consolidated Party in order to consummate such Permitted Acquisition
(A) shall be deemed to have occurred on the first day of the four fiscal quarter
period immediately preceding the date of such Permitted Acquisition and (B) if
such Indebtedness has a floating or formula rate, then the implied rate of
interest for such Indebtedness for the applicable period shall be determined by
utilizing the rate which is or would be in effect with respect to such
Indebtedness as at the relevant date of determination and (ii) with respect to
the calculation of Consolidated EBITDA and Consolidated EBIT (A) such
Consolidated EBITDA or Consolidated EBIT shall be increased by an amount
approved by the Administrative Agent, in its reasonable discretion, as the
Excess Compensation (as defined below) applicable to the period under
consideration and (B) the Borrower agrees to provide the Administrative Agent
with such supporting documentation for such Excess Compensation as shall be
requested from time to time by the Administrative Agent. As used in this Section
1.3, the term "Excess Compensation" shall mean the amount by which compensation
paid to owners, employees and/or independent contractors of a former privately
held company prior to the acquisition of such company in connection with a
Permitted Acquisition exceeds the compensation to be paid to such owners,
employees and independent contractors after the closing of such Permitted
Acquisition). Furthermore, the parties hereto agree that, for purposes of all
calculations made under the financial covenants set forth in Section 7.11 after
any Asset Disposition (including without limitation the sale of Logistics or the
Groupe Xxxx Business) or to determine pro forma compliance with respect to any
such Asset Disposition, such calculations shall be conducted in a manner similar
to any calculation related to a Permitted Acquisition in similar circumstances
except that the applicable income statement items and Indebtedness attributable
to the Person or Property related to the applicable Asset Disposition shall be
excluded (rather than included) from such calculation.
29
SECTION 2
CREDIT FACILITIES
2.1 Revolving Loans.
(a) Revolving Commitment. Subject to the terms and conditions
hereof and in reliance upon the representations and warranties set
forth herein, each Lender severally agrees to make available to the
Borrower such Lender's Revolving Commitment Percentage of revolving
credit loans requested by the Borrower in Dollars ("Revolving Loans")
from time to time from the Closing Date until the Maturity Date, or
such earlier date as the Revolving Commitments shall have been
terminated as provided herein; provided, however, that (i) with regard
to the Lenders collectively, the Dollar Amount (determined as of the
most recent Determination Date) of Revolving Obligations outstanding
shall not exceed the lesser of (A) the Revolving Committed Amount, (B)
the Available Revolving Committed Amount and (C) the Borrowing Base;
provided, further, (ii) with regard to each Lender individually, the
Dollar Amount (determined as of the most recent Determination Date) of
such Lender's Revolving Commitment Percentage of the sum of the
Revolving Loans plus Foreign Currency Loans plus LOC Obligations plus
Swingline Loans outstanding shall not exceed such Lender's Revolving
Committed Amount. Revolving Loans may consist of Base Rate Loans or
Eurocurrency Loans, or a combination thereof, as the Borrower may
request; provided, however, that no more than eight (8) Eurocurrency
Loans shall be outstanding hereunder at any time (it being understood
that, for purposes hereof, Eurocurrency Loans with different Interest
Periods shall be considered as separate Eurocurrency Loans, even if
they begin on the same date, although borrowings, extensions and
conversions may, in accordance with the provisions hereof, be combined
at the end of existing Interest Periods to constitute a new
Eurocurrency Loan with a single Interest Period). Revolving Loans
hereunder may be repaid and reborrowed in accordance with the
provisions hereof.
(b) Revolving Loan Borrowings.
(i) Notice of Borrowing. The Borrower shall request a
Revolving Loan borrowing by written notice (or telephonic notice
promptly confirmed in writing) to the Administrative Agent not
later than 11:00 A.M. (Charlotte, North Carolina time) on the
Business Day of the requested borrowing in the case of Base Rate
Loans, and on the third Business Day prior to the date of the
requested borrowing in the case of Eurocurrency Loans. Each such
request for borrowing shall be irrevocable and shall specify (A)
that a Revolving Loan is requested, (B) the date of the requested
borrowing (which shall be a Business Day), (C) the aggregate
principal amount to be borrowed, and (D) whether the borrowing
shall be comprised of Base Rate Loans, Eurocurrency Loans or a
combination thereof, and if Eurocurrency Loans are requested, the
Interest Period(s) therefor. If the Borrower shall fail to
specify in any such Notice of Borrowing (I) an applicable
Interest Period in the case of a Eurocurrency Loan, then such
notice shall be deemed to be a request for an Interest Period of
one month, or (II) the type of Revolving Loan requested, then
such notice shall be deemed to be a request for a Base Rate Loan
30
hereunder. The Administrative Agent shall give notice to each
affected Lender promptly upon receipt of each Notice of Borrowing
pursuant to this Section 2.1(b)(i), the contents thereof and each
such Lender's share of any borrowing to be made pursuant thereto.
(ii) Minimum Amounts. Each Base Rate Loan that is a
Revolving Loan shall be in a minimum aggregate principal amount
of $1,000,000 and integral multiples of $500,000 in excess
thereof (or the remaining amount of the Revolving Committed
Amount, if less), and each Eurocurrency Loan that is a Revolving
Loan shall be in a minimum aggregate principal amount of
$2,500,000 and integral multiples of $1,000,000 in excess thereof
(or the remaining amount of the Revolving Committed Amount, if
less).
(iii) Advances. Each Lender will make its Revolving
Commitment Percentage of each Revolving Loan borrowing available
to the Administrative Agent for the account of the Borrower as
specified in Section 3.15(a), or in such other manner as the
Administrative Agent may specify in writing, by 1:00 P.M.
(Charlotte, North Carolina time) on the date specified in the
applicable Notice of Borrowing in Dollars and in funds
immediately available to the Administrative Agent. Such borrowing
will then be made available to the Borrower by the Administrative
Agent by crediting the account of the Borrower on the books of
such office with the aggregate of the amounts made available to
the Administrative Agent by the Lenders and in like funds as
received by the Administrative Agent.
(c) Repayment. The principal amount of all Revolving Loans shall be
due and payable in full on the Maturity Date, unless accelerated sooner
pursuant to Section 9.2.
(d) Interest. Subject to the provisions of Section 3.1,
(i) Base Rate Loans. During such periods as Revolving Loans shall
be comprised in whole or in part of Base Rate Loans, such Base Rate
Loans shall bear interest at a per annum rate equal to the Adjusted
Base Rate.
(ii) Eurocurrency Loans. During such periods as Revolving Loans
shall be comprised in whole or in part of Eurocurrency Loans, such
Eurocurrency Loans shall bear interest at a per annum rate equal to
the Adjusted Eurocurrency Rate.
Interest on Revolving Loans shall be payable in arrears on each applicable
Interest Payment Date (or at such other times as may be specified herein).
(e) Revolving Notes. The Revolving Loans made by each Lender shall be
evidenced by a duly executed promissory note of the Borrower to such Lender
in an original principal amount equal to such Lender's Revolving Commitment
Percentage of the Revolving Committed Amount and in substantially the form
of Exhibit 2.1(e).
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2.2 Letter of Credit Subfacility.
(a) Issuance. Subject to the terms and conditions hereof and of
the LOC Documents, if any, and any other terms and conditions which
the Issuing Lender may reasonably require and in reliance upon the
representations and warranties set forth herein, the Issuing Lender
agrees to issue, and each Lender severally agrees to participate in
the issuance by the Issuing Lender of Letters of Credit in Dollars
from time to time from the Closing Date until the Maturity Date as the
Borrower may request, in a form acceptable to the Issuing Lender in
its reasonable discretion; provided, however, that (i) the LOC
Obligations outstanding shall not at any time exceed TEN MILLION
DOLLARS ($10,000,000) (the "LOC Committed Amount"), (ii) with regard
to the Lenders collectively, the Dollar Amount (determined as of the
most recent Determination Date) of the Revolving Obligations shall not
exceed the lesser of (A) the Revolving Committed Amount, (B) the
Available Revolving Committed Amount and (C) the Borrowing Base and
(iii) with regard to each Lender individually, the Dollar Amount
(determined as of the most recent Determination Date) of the sum of
the Revolving Loans plus LOC Obligations plus Foreign Currency Loans
plus Swingline Loans outstanding shall not exceed such Lender's
Revolving Commitment Percentage of the Revolving Committed Amount. No
Letter of Credit shall (x) have an original expiry date more than one
year from the date of issuance or (y) as originally issued or as
extended, have an expiry date extending beyond the Maturity Date. Each
Letter of Credit (1) shall comply with the related LOC Documents, (2)
may be issued only for the purposes set forth in Section 6.15 hereof
and (3) may be issued only in Dollars or any Available Foreign
Currency. The issuance and expiry dates of each Letter of Credit shall
be a Business Day.
(b) Notice and Reports. The request for the issuance of a Letter
of Credit shall be submitted by the Borrower to the Issuing Lender at
least three (3) Business Days prior to the requested date of issuance.
The Issuing Lender will, at least quarterly and more frequently upon
request, disseminate to each of the Lenders a detailed report
specifying the Letters of Credit which are then issued and outstanding
and any activity with respect thereto which may have occurred since
the date of the prior report, and including therein, among other
things, the beneficiary, the face amount and the expiry date, as well
as any payment or expirations which may have occurred.
(c) Participations.
(i) Each Lender acknowledges and confirms that it has a
Participation Interest in the liability of the Issuing Lender
under each Existing Letter of Credit in an amount equal to its
Revolving Commitment Percentage of such Existing Letters of
Credit. The Borrower's reimbursement obligations in respect of
each Existing Letter of Credit, and each Lender's obligations in
connection therewith, shall be governed by the terms of this
Credit Agreement.
(ii) Each Lender, upon issuance of a Letter of Credit, shall
be deemed to have purchased without recourse a Participation
Interest from the Issuing Lender in such Letter of Credit and the
obligations arising thereunder and any collateral relating
32
thereto, in each case in an amount equal to its pro rata share of
the obligations under such Letter of Credit (based on the
respective Revolving Commitment Percentages of the Lenders) and
shall absolutely, unconditionally and irrevocably assume and be
obligated to pay to the Issuing Lender and discharge when due,
its pro rata share of the obligations arising under such Letter
of Credit. Without limiting the scope and nature of each Lender's
Participation Interest in any Letter of Credit, to the extent
that the Issuing Lender has not been reimbursed as required
hereunder or under any such Letter of Credit, each such Lender
shall pay to the Issuing Lender its pro rata share of such
unreimbursed drawing in same day funds on the day of notification
by the Issuing Lender of an unreimbursed drawing pursuant to the
provisions of subsection (d) below. The obligation of each Lender
to so reimburse the Issuing Lender shall be absolute and
unconditional and shall not be affected by the occurrence of a
Default, an Event of Default or any other occurrence or event.
Any such reimbursement shall not relieve or otherwise impair the
obligation of the Borrower to reimburse the Issuing Lender under
any Letter of Credit, together with interest as hereinafter
provided.
(d) Reimbursement. In the event of any drawing under any Letter of
Credit, the Issuing Lender will promptly notify the Borrower. Unless the
Borrower shall immediately notify the Issuing Lender that the Borrower
intends to otherwise reimburse the Issuing Lender for such drawing, the
Borrower shall be deemed to have requested that the Lenders make a
Revolving Loan in the amount of the drawing as provided in subsection (e)
below on the related Letter of Credit, the proceeds of which will be used
to satisfy the related reimbursement obligations. The Borrower promises to
reimburse the Issuing Lender on the day of drawing under any Letter of
Credit (either with the proceeds of a Revolving Loan obtained hereunder or
otherwise) in same day funds. If the Borrower shall fail to reimburse the
Issuing Lender as provided hereinabove, the unreimbursed amount of such
drawing shall bear interest at a per annum rate equal to the Adjusted Base
Rate plus 2%. The Borrower's reimbursement obligations hereunder shall be
absolute and unconditional under all circumstances irrespective of any
rights of setoff, counterclaim or defense to payment the Borrower may claim
or have against the Issuing Lender, the Administrative Agent, the Lenders,
the beneficiary of the Letter of Credit drawn upon or any other Person,
including without limitation any defense based on any failure of the
Borrower or any other Credit Party to receive consideration or the
legality, validity, regularity or unenforceability of the Letter of Credit.
The Issuing Lender will promptly notify the Administrative Agent and the
Administrative Agent will promptly notify the other Lenders of the amount
of any unreimbursed drawing and each Lender shall promptly pay to the
Administrative Agent for the account of the Issuing Lender in Dollars and
in immediately available funds, the amount of such Lender's pro rata share
of such unreimbursed drawing. Such payment shall be made on the day such
notice is received by such Lender from the Issuing Lender if such notice is
received at or before 2:00 P.M. (Charlotte, North Carolina time) otherwise
such payment shall be made at or before 12:00 Noon (Charlotte, North
Carolina time) on the Business Day next succeeding the day such notice is
received. If such Lender does not pay such amount to the Issuing Lender in
full upon such request, such Lender shall, on demand, pay to the
Administrative Agent for the account of the Issuing Lender interest on the
unpaid amount during the period from the date of such drawing until such
33
Lender pays such amount to the Issuing Lender in full at a rate per annum
equal to, if paid within two (2) Business Days of the date that such Lender
is required to make payments of such amount pursuant to the preceding
sentence, the Federal Funds Rate and thereafter at a rate equal to the Base
Rate. Each Lender's obligation to make such payment to the Issuing Lender,
and the right of the Issuing Lender to receive the same, shall be absolute
and unconditional, shall not be affected by any circumstance whatsoever and
without regard to the termination of this Credit Agreement or the
Commitments hereunder, the existence of a Default or Event of Default or
the acceleration of the obligations of the Borrower hereunder and shall be
made without any offset, abatement, withholding or reduction whatsoever.
Simultaneously with the making of each such payment by a Lender to the
Issuing Lender, such Lender shall, automatically and without any further
action on the part of the Issuing Lender or such Lender, acquire a
Participation Interest in an amount equal to such payment (excluding the
portion of such payment constituting interest owing to the Issuing Lender)
in the related unreimbursed drawing portion of the LOC Obligation and in
the interest thereon and in the related LOC Documents, and shall have a
claim against the Borrower with respect thereto.
(e) Repayment with Revolving Loans. On any day on which the Borrower
shall have requested, or been deemed to have requested, a Revolving Loan
advance to reimburse a drawing under a Letter of Credit, the Administrative
Agent shall give notice to the Lenders that a Revolving Loan has been
requested or deemed requested by the Borrower to be made in connection with
a drawing under a Letter of Credit, in which case a Revolving Loan advance
comprised of Base Rate Loans (or Eurocurrency Loans to the extent the
Borrower has complied with the procedures of Section 2.1(b)(i) with respect
thereto) shall be immediately made to the Borrower by all Lenders
(notwithstanding any termination of the Commitments pursuant to Section
9.2) pro rata based on the respective Revolving Commitment Percentages of
the Lenders (determined before giving effect to any termination of the
Commitments pursuant to Section 9.2) and the proceeds thereof shall be paid
directly to the Issuing Lender for application to the respective LOC
Obligations. Each such Lender hereby irrevocably agrees to make its pro
rata share of each such Revolving Loan immediately upon any such request or
deemed request in the amount, in the manner and on the date specified in
the preceding sentence notwithstanding (i) the amount of such borrowing may
not comply with the minimum amount for advances of Revolving Loans
otherwise required hereunder, (ii) whether any conditions specified in
Section 5.2 are then satisfied, (iii) whether a Default or an Event of
Default then exists, (iv) failure for any such request or deemed request
for Revolving Loan to be made by the time otherwise required hereunder, (v)
whether the date of such borrowing is a date on which Revolving Loans are
otherwise permitted to be made hereunder or (vi) any termination of the
Commitments relating thereto immediately prior to or contemporaneously with
such borrowing. In the event that any Revolving Loan cannot for any reason
be made on the date otherwise required above (including, without
limitation, as a result of the commencement of a proceeding under the
Bankruptcy Code with respect to the Borrower or any other Credit Party),
then each such Lender hereby agrees that it shall forthwith purchase (as of
the date such borrowing would otherwise have occurred, but adjusted for any
payments received from the Borrower on or after such date and prior to such
purchase) from the Issuing Lender such Participation Interests in the
outstanding LOC Obligations as shall be necessary to cause each such Lender
to share in such LOC Obligations ratably (based upon the respective
34
Revolving Commitment Percentages of the Lenders (determined before giving
effect to any termination of the Commitments pursuant to Section 9.2)),
provided that at the time any purchase of Participation Interests pursuant
to this sentence is actually made, the purchasing Lender shall be required
to pay to the Issuing Lender, to the extent not paid to the Issuer by the
Borrower in accordance with the terms of subsection (d) above, interest on
the principal amount of Participation Interests purchased for each day from
and including the day upon which such borrowing would otherwise have
occurred to but excluding the date of payment for such Participation
Interests, at the rate equal to, if paid within two (2) Business Days of
the date of the Revolving Loan advance, the Federal Funds Rate, and
thereafter at a rate equal to the Base Rate.
(f) Designation of Credit Parties as Account Parties. Notwithstanding
anything to the contrary set forth in this Credit Agreement, including
without limitation Section 2.2(a), a Letter of Credit issued hereunder may
contain a statement to the effect that such Letter of Credit is issued for
the account of a Credit Party other than the Borrower, provided that
notwithstanding such statement, the Borrower shall be the actual account
party for all purposes of this Credit Agreement for such Letter of Credit
and such statement shall not affect the Borrower's reimbursement
obligations hereunder with respect to such Letter of Credit.
(g) Renewal, Extension. The renewal or extension of any Letter of
Credit shall, for purposes hereof, be treated in all respects the same as
the issuance of a new Letter of Credit hereunder.
(h) Uniform Customs and Practices. Unless otherwise expressly agreed
by the Issuing Lender and the Borrower when a Letter of Credit is issued,
(i) the rules of the "International Standby Practices 1998" (the "ISP")
published by the Institute of International Banking Law & Practice (or such
later version thereof as may be in effect at the time of issuance) shall
apply to each standby Letter of Credit, and (ii) the rules of the Uniform
Customs and Practice for Documentary Credits (the "UCP"), as most recently
published by the International Chamber of Commerce (the "ICC") at the time
of issuance (including the ICC decision published by the Commission on
Banking Technique and Practice on April 6, 1998 regarding the European
single currency (euro)) shall apply to each commercial Letter of Credit.
(i) Indemnification; Nature of Issuing Lender's Duties.
(i) In addition to its other obligations under this Section 2.2,
the Borrower hereby agrees to pay, and protect, indemnify and save
each Lender harmless from and against, any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including
reasonable attorneys' fees) that such Lender actually incurs or
becomes subject to as a consequence, direct or indirect, of (A) the
issuance of any Letter of Credit or (B) the failure of such Lender to
honor a drawing under a Letter of Credit as a result of any act or
omission, whether rightful or wrongful, of any present or future de
jure or de facto government or Governmental Authority (all such acts
or omissions, herein called "Government Acts").
35
(ii) As between the Borrower and the Lenders (including the
Issuing Lender), the Borrower shall assume all risks of the acts,
omissions or misuse of any Letter of Credit by the beneficiary
thereof. Subject to the terms of Section (i)(v) below, no Lender
(including the Issuing Lender) shall be responsible: (A) for the form,
validity, sufficiency, accuracy, genuineness or legal effect of any
document submitted by any party in connection with the application for
and issuance of any Letter of Credit, even if it should in fact prove
to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (B) for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or
assign any Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, that may prove to be invalid or
ineffective for any reason; (C) for errors, omissions, interruptions
or delays in transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise, whether or not they be in cipher; (D)
for any loss or delay in the transmission or otherwise of any document
required in order to make a drawing under a Letter of Credit or of the
proceeds thereof; and (E) for any consequences arising from causes
beyond the control of such Lender, including, without limitation, any
Government Acts. None of the above shall affect, impair, or prevent
the vesting of the Issuing Lender's rights or powers hereunder.
(iii) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted
by any Lender (including the Issuing Lender), under or in connection
with any Letter of Credit or the related certificates, if taken or
omitted in good faith, shall not put such Lender under any resulting
liability to the Borrower or any other Credit Party. It is the
intention of the parties that this Credit Agreement shall be construed
and applied to protect and indemnify each Lender (including the
Issuing Lender) against any and all risks involved in the issuance of
the Letters of Credit, all of which risks are hereby assumed by the
Borrower (on behalf of itself and each of the other Credit Parties),
including, without limitation, any and all Government Acts. No Lender
(including the Issuing Lender) shall, in any way, be liable for any
failure by such Lender or anyone else to pay any drawing under any
Letter of Credit as a result of any Government Acts or any other cause
beyond the control of such Lender.
(iv) Nothing in this subsection (i) is intended to limit the
reimbursement obligations of the Borrower contained in subsection (d)
above. The obligations of the Borrower under this subsection (i) shall
survive the termination of this Credit Agreement. No act or omission
of any current or prior beneficiary of a Letter of Credit shall in any
way affect or impair the rights of the Lenders (including the Issuing
Lender) to enforce any right, power or benefit under this Credit
Agreement.
(v) Notwithstanding anything to the contrary contained in this
subsection (i), the Borrower shall have no obligation to indemnify any
Lender (including the Issuing Lender) in respect of any liability
incurred by such Lender (A) arising solely out of the gross negligence
or willful misconduct of such Lender, as determined by a court of
competent jurisdiction, or (B) caused by such Lender's failure to pay
36
under any Letter of Credit after presentation to it of a request
strictly complying with the terms and conditions of such Letter of
Credit, as determined by a court of competent jurisdiction, unless
such payment is prohibited by any law, regulation, court order or
decree.
(j) Responsibility of Issuing Lender. It is expressly understood and
agreed that the obligations of the Issuing Lender hereunder to the Lenders
are only those expressly set forth in this Credit Agreement and that the
Issuing Lender shall be entitled to assume that the conditions precedent
set forth in Section 5.2 have been satisfied unless it shall have acquired
actual knowledge that any such condition precedent has not been satisfied;
provided, however, that nothing set forth in this Section 2.2 shall be
deemed to prejudice the right of any Lender to recover from the Issuing
Lender any amounts made available by such Lender to the Issuing Lender
pursuant to this Section 2.2 in the event that it is determined by a court
of competent jurisdiction that the payment with respect to a Letter of
Credit constituted gross negligence or willful misconduct on the part of
the Issuing Lender.
(k) Limitation on Obligation of the Issuing Lender. Notwithstanding
anything contained herein to the contrary, the Issuing Lender shall not be
under any obligation to issue, renew or extend any Letter of Credit if (i)
any order, judgment or decree of any Governmental Authority or arbitrator
with jurisdiction over the Issuing Lender shall by its terms purport to
enjoin or restrain the Issuing Lender from issuing a Letter of Credit, or
any applicable law, rule or regulation or any request or directive (whether
or not having the force of law) from any Governmental Authority with
jurisdiction over the Issuing Lender shall prohibit, or request that the
Issuing Lender refrain from, the issuance of letters of credit generally or
any such Letter of Credit in particular, or shall impose upon the Issuing
Lender with respect to any such Letter of Credit any restriction, reserve
or capital requirement (for which the Issuing Lender is not otherwise
compensated hereunder) not in effect on the Closing Date, or shall impose
upon the Issuing Lender any unreimbursed loss, costs or expense which was
not applicable on the Closing Date and which the Issuing Lender should deem
material to it in good faith, or (ii) the issuance, renewal or extension
would violate or otherwise contravene its internal policy.
(l) Conflict with LOC Documents. In the event of any conflict between
this Credit Agreement and any LOC Document (including any letter of credit
application), this Credit Agreement shall control.
2.3 Foreign Currency Loan Subfacility.
(a) Foreign Currency Commitment. Subject to the terms and conditions
hereof and in reliance upon the representations and warranties set forth
herein, each Lender severally agrees to make certain foreign currency
revolving loans in Available Foreign Currencies ("Foreign Currency Loans")
to the Borrower from time to time in the amount of such Lender's Foreign
Currency Commitment Percentage of such Foreign Currency Loans; provided,
however, that the Dollar Amount (as determined as of the most recent
Determination Date) of the sum of Foreign Currency Loans outstanding at any
time shall not exceed Twenty Five Million Dollars ($25,000,000) (the
"Foreign Currency Committed Amount"; provided, further, (i) with regard to
each Lender individually, (A) the Dollar
37
Amount (determined as of the most recent Determination Date) of such
Lender's Revolving Commitment Percentage of the sum of the Revolving Loans
plus Foreign Currency Loans plus LOC Obligations plus Swingline Loans
outstanding shall not exceed such Lender's Revolving Commitment Percentage
of the Revolving Committed Amount, and (B) the Dollar Amount (determined as
of the most recent Determination Date) of such Lender's portion (including
participation interests therein) of the Foreign Currency Loans outstanding
shall not exceed such Lender's Foreign Currency Commitment Percentage of
the Foreign Currency Committed Amount and (ii) with regard to the Lenders
collectively, the Dollar Amount (as determined as of the most recent
Determination Date) of the Revolving Obligations shall not exceed the
lesser of (A) the Revolving Committed Amount, (B) the Available Revolving
Committed Amount and (C) the Borrowing Base. Foreign Currency Loans shall
consist solely of Eurocurrency Loans and may be repaid and reborrowed in
accordance with the provisions hereof. For purposes hereof, Eurocurrency
Loans with different Interest Periods and/or in different currencies shall
be considered as separate Eurocurrency Loans, even if they begin on the
same date, although borrowings, extensions and conversions may, in
accordance with the provisions hereof, be combined at the end of existing
Interest Periods to constitute a new Eurocurrency Loan with a single
Interest Period and in the same currency.
(b) Foreign Currency Loan Borrowings.
(i) Notice of Borrowing. The Borrower shall request a Foreign
Currency Loan borrowing by written notice (or telephone notice
promptly confirmed in writing) to the Administrative Agent not later
than 11:00 A.M. (Charlotte, North Carolina time) on the third Business
Day prior to the date of the requested borrowing. Each such request
for borrowing shall be irrevocable and shall specify (A) that a
Foreign Currency Loan is requested, (B) the requested Available
Foreign Currency, (C) the date of the requested borrowing (which shall
be a Business Day), (D) the aggregate principal amount to be borrowed
and (E) the Interest Period(s) therefor. If the Borrower shall fail to
specify in any such Notice of Borrowing an applicable Interest Period,
then such notice shall be deemed to be a request for an Interest
Period of one month. The Administrative Agent shall give notice to
each Lender promptly upon receipt of each Notice of Borrowing, the
contents thereof and each such Lender's share of any borrowing to be
made pursuant thereto.
(ii) Minimum Amounts. Each Foreign Currency Loan shall be in a
minimum aggregate principal amount equal to the applicable Foreign
Currency Equivalent of $2,500,000 and integral multiples of the
applicable Foreign Currency Equivalent of $500,000 in excess thereof
(or the remaining amount of the Foreign Currency Commitment, if less).
(iii) Advances. Each Lender will make its Foreign Currency
Commitment Percentage of each Foreign Currency Loan borrowing
available to the Administrative Agent by 1:00 P.M., local time in the
place where such deposit is required to be made by the succeeding
terms hereof, on the date specified in the applicable Notice of
Borrowing by deposit with the Administrative Agent, at the same place
and same account specified in Section 3.15(a) for payments by the
Borrower in the applicable Available Foreign Currency, of same day
funds in the applicable Available Foreign Currency. Such deposit will
38
be made to such accounts in the primary market for such Foreign
Currencies as the Administrative Agent shall specify from time to time
by notice to the Lenders. To the extent funds are received from the
Lenders, the Administrative Agent shall promptly make such funds
available to the Borrower by wire transfer to such accounts as the
Borrower shall have specified to the Administrative Agent.
(c) Repayment. The principal amount of all Foreign Currency Loans
shall be due and payable in full in the applicable Available Foreign
Currency on the Maturity Date, unless accelerated sooner pursuant to
Section 9.2.
(d) Interest. Subject to the provisions of Section 3.1, Foreign
Currency Loans shall bear interest at a per annum rate equal to the
Adjusted Eurocurrency Rate. Interest on Foreign Currency Loans shall be
payable (in the applicable Available Foreign Currency) in arrears on each
applicable Interest Payment Date (or at such other times as may be
specified herein).
(e) Foreign Currency Notes. The Foreign Currency Loans shall be
evidenced by a Revolving Note duly executed by the Borrower in favor of
each Lender.
2.4 Swingline Loan Subfacility.
(a) Swingline Commitment. Subject to the terms and conditions hereof,
the Swingline Lender, in its individual capacity, agrees to make certain
revolving credit loans to the Borrower (each a "Swingline Loan" and,
collectively, the "Swingline Loans") from time to time from the Closing
Date until the Maturity Date for the purposes hereinafter set forth;
provided, however, (i) the aggregate amount of Swingline Loans outstanding
at any time shall not exceed Ten Million Dollars ($10,000,000) (the
"Swingline Committed Amount"), and (ii) with regard to the Lenders
collectively, the amount of outstanding Revolving Obligations outstanding
(including the Dollar Amount (determined as of the most recent
Determination Date) of the outstanding Foreign Currency Loans) shall not
exceed the lesser of (A) the Revolving Committed Amount, (B) the Available
Revolving Committed Amount and (C) the Borrowing Base. Swingline Loans
hereunder shall be made in accordance with the provisions of this Section
2.4, and may be repaid and reborrowed in accordance with the provisions
hereof.
(b) Swingline Loan Advances.
(i) Notices; Disbursement. Whenever the Borrower desires a
Swingline Loan advance hereunder it shall give written notice (or
telephone notice promptly confirmed in writing) to the Swingline
Lender not later than 12:30 P.M. (Charlotte, North Carolina time) on
the Business Day of the requested Swingline Loan advance substantially
in the form of Exhibit 2.4(b) attached hereto. Each such notice shall
be irrevocable and shall specify (A) that a Swingline Loan advance is
requested, (B) the date of the requested Swingline Loan advance (which
shall be a Business Day) and (C) the principal amount of the Swingline
Loan advance requested. Each Swingline Loan shall have such maturity
date as the Swingline Lender and the Borrower shall agree upon receipt
by the Swingline Lender of any such notice from the Borrower. The
Swingline Lender shall initiate the transfer of funds representing the
Swingline Loan advance to the Borrower by 3:00 P.M. (Charlotte, North
39
Carolina time) on the Business Day of the requested borrowing. Each
Swingline Loan advance shall be in a minimum principal amount of
$100,000 and in integral multiples of $100,000 in excess thereof (or
the remaining amount of the Swingline Committed Amount, if less).
(ii) Repayment of Swingline Loans. The principal amount of all
Swingline Loans shall be due and payable on the Maturity Date. The
Swingline Lender may, at any time, in its sole discretion, by written
notice to the Borrower and the Lenders, demand repayment of its
Swingline Loans by way of a Revolving Loan advance, in which case the
Borrower shall be deemed to have requested a Revolving Loan advance
comprised solely of Base Rate Loans in the amount of such Swingline
Loans; provided, however, that any such demand shall be deemed to have
been given one Business Day prior to the Maturity Date and on the date
of the occurrence of any Event of Default described in Section 9.1 and
upon acceleration of the indebtedness hereunder and the exercise of
remedies in accordance with the provisions of Section 9.2. Each Lender
hereby irrevocably agrees to make its pro rata share of each such
Revolving Loan in the amount, in the manner and on the date specified
in the preceding sentence notwithstanding (I) the amount of such
borrowing may not comply with the minimum amount for advances of
Revolving Loans otherwise required hereunder, (II) whether any
conditions specified in Section 5.2 are then satisfied, (III) whether
a Default or an Event of Default then exists, (IV) failure of any such
request or deemed request for Revolving Loan to be made by the time
otherwise required hereunder, (V) whether the date of such borrowing
is a date on which Revolving Loans are otherwise permitted to be made
hereunder or (VI) any termination of the Commitments relating thereto
immediately prior to or contemporaneously with such borrowing. In the
event that any Revolving Loan cannot for any reason be made on the
date otherwise required above (including, without limitation, as a
result of the commencement of a proceeding under the Bankruptcy Code
with respect to the Borrower or any other Credit Party), then each
Lender hereby agrees that it shall forthwith purchase (as of the date
such borrowing would otherwise have occurred, but adjusted for any
payments received from the Borrower on or after such date and prior to
such purchase) from the Swingline Lender such participations in the
outstanding Swingline Loans as shall be necessary to cause each such
Lender to share in such Swingline Loans ratably based upon its
Revolving Commitment Percentage of the Revolving Committed Amount
(determined before giving effect to any termination of the Commitments
pursuant to Section 3.4), provided that (A) all interest payable on
the Swingline Loans shall be for the account of the Swingline Lender
until the date as of which the respective participation is purchased
and (B) at the time any purchase of participations pursuant to this
sentence is actually made, the purchasing Lender shall be required to
pay to the Swingline Lender, to the extent not paid to the Swingline
Lender by the Borrower in accordance with the terms of subsection (c)
below, interest on the principal amount of participation purchased for
each day from and including the day upon which such borrowing would
otherwise have occurred to but excluding the date of payment for such
participation, at the rate equal to the Federal Funds Rate.
(c) Interest on Swingline Loans. Subject to the provisions of Section
3.1, each Swingline Loan shall bear interest at per annum rate (computed on
the basis of the actual number of days elapsed over a year of 360 days)
40
equal to the Quoted Rate unless the Borrower and the Swingline Lender
cannot agree on the applicable Quoted Rate in which case such Swingline
Loan shall bear interest at a per annum rate equal to the Adjusted Base
Rate. Interest on Swingline Loans shall be payable in arrears on the dates
agreed upon by the Borrower and the Swingline Lender (or at such other
times as may be specified herein).
(d) Swingline Note. The Swingline Loans shall be evidenced by a duly
executed promissory note of the Borrower to the Swingline Lender in
substantially the form of Exhibit 2.4(d)
SECTION 3
OTHER PROVISIONS RELATING TO CREDIT FACILITIES
3.1 Default Rate.
Upon the occurrence, and during the continuance, of an Event of Default,
the principal of and, to the extent permitted by law, interest on the Loans and
any other amounts owing hereunder or under the other Credit Documents shall bear
interest, payable on demand, at a per annum rate 2% greater than the rate which
would otherwise be applicable (or if no rate is applicable, whether in respect
of interest, fees or other amounts, then the Adjusted Base Rate plus 2%).
3.2 Extension and Conversion.
The Borrower shall have the option, on any Business Day, to extend existing
Loans into a subsequent permissible Interest Period or to convert Loans into
Loans of another interest rate type; provided, however, that (i) except as
provided in Section 3.8, Eurocurrency Loans may be converted into Base Rate
Loans or extended as Eurocurrency Loans for new Interest Periods only on the
last day of the Interest Period applicable thereto, (ii) without the consent of
the Required Lenders, Eurocurrency Loans may be extended, and Base Rate Loans
may be converted into Eurocurrency Loans, only if the conditions precedent set
forth in Section 5.2 are satisfied on the date of extension or conversion, (iii)
Loans extended as, or converted into, Eurocurrency Loans shall be subject to the
terms of the definition of "Interest Period" set forth in Section 1.1 and shall
be in such minimum amounts as provided in, with respect to Revolving Loans,
Section 2.1(b)(ii), or with respect to Foreign Currency Loans, Section
2.3(b)(ii), (iv) no more than eight (8) Eurocurrency Loans shall be outstanding
hereunder at any time (it being understood that, for purposes hereof,
Eurocurrency Loans with different Interest Periods shall be considered as
separate Eurocurrency Loans, even if they begin on the same date, although
borrowings, extensions and conversions may, in accordance with the provisions
hereof, be combined at the end of existing Interest Periods to constitute a new
Eurocurrency Loan with a single Interest Period) and (v) any request for
extension or conversion of a Eurocurrency Loan which shall fail to specify an
Interest Period shall be deemed to be a request for an Interest Period of one
month. Each such extension or conversion shall be effected by the Borrower by
giving a Notice of Extension/Conversion (or telephonic notice promptly confirmed
in writing) to the office of the Administrative Agent specified in specified in
Schedule 2.1(a), or at such other office as the Administrative Agent may
designate in writing, prior to 11:00 A.M. (Charlotte, North Carolina time) on
41
the third Business Day prior to the date of the proposed extension or
conversion, specifying the date of the proposed extension or conversion, the
Loans to be so extended or converted, the types of Loans into which such Loans
are to be converted and, if appropriate, the applicable Interest Periods with
respect thereto. Each request for extension or conversion shall be irrevocable
and shall constitute a representation and warranty by the Borrower of the
matters specified in subsections (b), (c), (d), (e) and (f) of Section 5.2. In
the event the Borrower fails to request extension or conversion of any
Eurocurrency Loan in accordance with this Section, or any such conversion or
extension is not permitted or required by this Section, then (i) in the case of
any Eurocurrency Loan which is not a Foreign Currency Loan, such Eurocurrency
Loan shall be automatically converted into a Base Rate Loan at the end of the
Interest Period applicable thereto and (ii) in the case of any Foreign Currency
Loan, such Eurocurrency Loan shall be automatically continued as a Eurocurrency
Loan in the same Available Foreign Currency for an Interest Period of one month.
The Administrative Agent shall give each Lender notice as promptly as
practicable of any such proposed extension or conversion affecting any Loan.
3.3 Prepayments.
(a) Voluntary Prepayments. The Borrower shall have the right to prepay
Loans in whole or in part from time to time; provided, that (i)
Eurocurrency Loans may not be prepaid other than at the end of the Interest
Period applicable thereto and only then upon notice by the Borrower to the
Administrative Agent (which may be given by telephone) by no later than
11:00 a.m. (Charlotte, North Carolina time) at least three Business Days'
prior to the day of the requested prepayment, (ii) Base Rate Loans may be
prepaid by the Borrower giving notice to the Administrative Agent (which
may be given by telephone) no later than 11:00 a.m. (Charlotte, North
Carolina time) on the date of the requested prepayment and (iii) each
partial prepayment of Loans shall be in a minimum principal amount of
$1,000,000 and integral multiples of $500,000, in the case of Base Rate
Loans, and $2,500,000 and integral multiples of $500,000, in the case of
Eurocurrency Loans. Subject to the foregoing terms, amounts prepaid under
this Section 3.3(a) shall be applied as the Borrower may elect; provided
that if the Borrower fails to specify a voluntary prepayment then such
prepayment shall be applied to Revolving Loans, in each case first to Base
Rate Loans and then to Eurocurrency Loans in direct order of Interest
Period maturities. All prepayments under this Section 3.3(a) shall be
subject to Section 3.12, but otherwise without premium or penalty.
(b) Mandatory Prepayments.
(i) Revolving Committed Amount. If at any time (A) the Dollar
Amount (as determined as of the most recent Determination Date) of the
Revolving Obligations then outstanding shall exceed the lesser of (I)
the Revolving Committed Amount, (II) the Available Revolving Committed
Amount and (III) the Borrowing Base, (B) the aggregate amount of LOC
Obligations outstanding shall exceed the LOC Committed Amount, (C) the
Dollar Amount (determined as of the most recent Determination Date) of
Foreign Currency Loans shall exceed the Foreign Currency Committed
Amount, or (D) the amount of Swingline Loans outstanding shall exceed
the Swingline Committed Amount, the Borrower shall immediately make
42
payment on the Loans and/or to a cash collateral account in respect of
the LOC Obligations, in an amount sufficient to eliminate such excess.
(ii) Asset Disposition. The Borrower shall immediately prepay the
Loans in an aggregate amount equal to one hundred percent (100%) of
the Net Cash Proceeds of any Asset Disposition (other than any Asset
Disposition permitted by Section 8.5) (to be applied as set forth in
Section 3.3(c) below).
(iii) Equity Issuance. Immediately upon receipt by a Credit Party
or any of its Subsidiaries (other than the Parent) of proceeds from
any Equity Issuance, the Borrower shall prepay the Loans in an
aggregate amount equal to 100% of the Net Cash Proceeds of such Equity
Issuance to the Lenders (such prepayment to be applied as set forth in
Section 3.3(c) below).
(iv) Debt Issuance. Immediately upon receipt by a Credit Party or
any of its Subsidiaries of proceeds from any Debt Issuance, the
Borrower shall prepay the Loans in an aggregate amount equal to 100%
of the Net Cash Proceeds of such Debt Issuance to the Lenders (such
prepayment to be applied as set forth in Section 3.3(c) below).
(c) Application of Mandatory Prepayments. All amounts required to be
paid pursuant to Section 3.3(b) shall be applied as follows: (i) with
respect to all amounts prepaid pursuant to Section 3.3(b)(i), first to the
Revolving Loans, second to the Swingline Loans and third to a cash
collateral account to secure LOC Obligations and (ii) with respect to all
amounts required to be paid pursuant to Section 3.3(b)(ii), (iii) and (iv),
first to the Revolving Loans (with a corresponding permanent reduction in
the Revolving Committed Amount), second to the Swingline Loans (with a
corresponding permanent reduction in the Revolving Committed Amount) and
third to a cash collateral account to secure LOC Obligations. Within the
parameters of the applications set forth above, prepayments shall be
applied first to Base Rate Loans and then to Eurocurrency Loans in direct
order of Interest Period maturities. All prepayments under this Section
3.3(b) shall be subject to Section 3.12.
3.4 Termination and Reduction of Revolving Committed Amount.
(a) Revolving Commitment. The Borrower may from time to time
permanently reduce or terminate the Revolving Committed Amount in whole or
in part (in minimum aggregate amounts of $5,000,000 or in integral
multiples of $1,000,000 in excess thereof (or, if less, the full remaining
amount of the then applicable Revolving Committed Amount)) upon five
Business Days' prior written notice to the Administrative Agent; provided,
that, no such termination or reduction shall be made which would cause the
Dollar Amount (as of the most recent Determination Date) of the Revolving
Obligations outstanding to exceed the lesser of (A) the Revolving Committed
Amount and (B) the Borrowing Base, unless, concurrently with such
termination or reduction, the Loans are repaid to the extent necessary to
eliminate such excess. The Administrative Agent shall promptly notify each
43
affected Lender of receipt by the Administrative Agent of any notice from
the Borrower pursuant to this Section 3.4(a).
(b) Foreign Currency Commitment. The Borrower may from time to time
permanently reduce or terminate the Foreign Currency Committed Amount in
whole or in part (in minimum aggregate amounts of $5,000,000 or in integral
multiples of $1,000,000 in excess thereof (or, if less, the full remaining
amount of the then applicable Foreign Currency Committed Amount)) upon five
Business Days' prior written notice to the Administrative Agent; provided,
that, (i) no such termination or reduction shall be made which would cause
the Dollar Amount (as of the most recent Determination Date) of the Foreign
Currency Loans outstanding to exceed the Foreign Currency Committed Amount
and (ii) no such termination or reduction shall be made which would cause
the Dollar Amount (as of the most recent Determination Date) of the
Revolving Obligations outstanding to exceed the lesser of (A) the Revolving
Committed Amount and (B) the Borrowing Base, unless, concurrently with such
termination or reduction, the Loans are repaid to the extent necessary to
eliminate such excess. The Administrative Agent shall promptly notify each
affected Lender of receipt by the Administrative Agent of any notice from
the Borrower pursuant to this Section 3.4(b).
(c) Mandatory Reductions. On any date that the Revolving Loans are
required to be prepaid pursuant to Sections 3.3(b)(ii), (iii) or (iv), the
Revolving Committed Amount automatically shall be permanently reduced by
the amount of such required prepayment and/or reduction.
3.5 Fees.
(a) Unused Fee. In consideration of the Revolving Commitments of the
Lenders hereunder, the Borrower agrees to pay to the Administrative Agent
for the account of each Lender a fee (the "Unused Fee") equal to the
Applicable Percentage per annum for Unused Fees then in effect on the
Unused Revolving Committed Amount for each day during the applicable Unused
Fee Calculation Period (hereinafter defined). The Unused Fee shall commence
to accrue on the Closing Date and shall be due and payable in arrears on
the last business day of each March, June, September and December (and any
date that the Revolving Committed Amount or Foreign Currency Committed
Amount is reduced as provided in Section 3.4 and the Maturity Date) for the
immediately preceding quarter (or portion thereof) (each such quarter or
portion thereof for which the Unused Fee is payable hereunder being herein
referred to as an "Unused Fee Calculation Period"), beginning with the
first of such dates to occur after the Closing Date. For purposes of
computation of the Unused Fee, the Swingline Loans shall not be counted
toward or considered usage under the Revolving Committed Amount.
(b) Letter of Credit Fees.
(i) Letter of Credit Issuance Fee. In consideration of the
issuance of Letters of Credit hereunder, the Borrower promises to pay
to the Administrative Agent for the account of each Lender a fee (the
"Letter of Credit Fee") on such Lender's Revolving Commitment
44
Percentage of the average daily maximum amount available to be drawn
under each such Letter of Credit computed at a per annum rate for each
day from the date of issuance to the date of expiration equal to the
Applicable Percentage. The Letter of Credit Fee will be payable
quarterly in arrears on the last Business Day of each March, June,
September and December for the immediately preceding quarter (or a
portion thereof).
(ii) Issuing Lender Fees. In addition to the Letter of Credit Fee
payable pursuant to clause (i) above, the Borrower promises to pay to
the Issuing Lender for its own account without sharing by the other
Lenders (A) a letter of credit fronting fee of one-eighth percent
(1/8%) per annum on the average daily maximum amount available to be
drawn under outstanding Letters of Credit payable quarterly in arrears
with the Letter of Credit Fee, and (B) customary charges from time to
time of the Issuing Lender with respect to the issuance, amendment,
transfer, administration, cancellation and conversion of, and drawings
under, such Letters of Credit (collectively, the "Issuing Lender
Fees").
(c) Administrative Fees. The Borrower agrees to pay to the
Administrative Agent, for its own account and the Arranger, as applicable,
the fees referred to in the Fee Letter (collectively, the "Administrative
Agent's Fees").
3.6 Capital Adequacy.
If any Lender has determined, after the date hereof, that the adoption or
the becoming effective of, or any change in, or any change by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof in the interpretation or administration of, any
applicable law, rule or regulation regarding capital adequacy, or compliance by
such Lender with any request or directive regarding capital adequacy (whether or
not having the force of law) of any such authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on such
Lender's capital or assets as a consequence of its commitments or obligations
hereunder to a level below that which such Lender could have achieved but for
such adoption, effectiveness, change or compliance (taking into consideration
such Lender's policies with respect to capital adequacy), then, upon notice from
such Lender to the Borrower, the Borrower shall be obligated to pay to such
Lender such additional amount or amounts as will compensate such Lender for such
reduction; provided, however, that no such amounts shall be payable with respect
to a reduction in rate of return incurred more than one (1) year before such
Lender demands compensation under this Section 3.6.
3.7 Limitation on Eurocurrency Loans.
If on or prior to the first day of any Interest Period for any Eurocurrency
Loan:
(a) the Administrative Agent reasonably determines (which
determination shall be conclusive) that by reason of circumstances
affecting the relevant market, adequate and reasonable means do not exist
for ascertaining the Eurocurrency Rate for such Interest Period; or
45
(b) the Required Lenders reasonably determine (which determination
shall be conclusive) and notify the Administrative Agent that the
Eurocurrency Rate will not adequately and fairly reflect the cost to the
Lenders of funding Eurocurrency Loans for such Interest Period;
then the Administrative Agent shall give the Borrower prompt notice thereof, and
so long as such condition remains in effect, the Lenders shall be under no
obligation to make additional Eurocurrency Loans, renew Eurocurrency Loans, or
to convert Base Rate Loans into Eurocurrency Loans and the Borrower shall, on
the last day(s) of the then current Interest Period(s) for the outstanding
Eurocurrency Loans, either prepay such Eurocurrency Loans or convert such
Eurocurrency Loans into Base Rate Loans in accordance with the terms of this
Credit Agreement.
3.8 Illegality.
Notwithstanding any other provision herein, if the adoption of or any
change in any Requirement of Law or in the interpretation or application thereof
occurring after the Closing Date shall make it unlawful for any Lender to make
or maintain Eurocurrency Loans or Foreign Currency Loans as contemplated by this
Credit Agreement, (a) such Lender shall promptly give written notice of such
circumstances to the Borrower and the Administrative Agent (which notice shall
be withdrawn whenever such circumstances no longer exist), (b) the commitment of
such Lender hereunder to make Eurocurrency Loans or Foreign Currency Loans,
continue Eurocurrency Loans or Foreign Currency Loans as such and convert a Base
Rate Loan to Eurocurrency Loans or Foreign Currency Loans, shall forthwith be
canceled and, until such time as it shall no longer be unlawful for such Lender
to make or maintain Eurocurrency Loans or Foreign Currency Loans, such Lender
shall then have a commitment only to make a Base Rate Loan when a Eurocurrency
Loan or Foreign Currency Loan is requested and (c) such Lender's Loans then
outstanding as Eurocurrency Loans or Foreign Currency Loans, if any, shall be
converted automatically to Base Rate Loans on the respective last days of the
then current Interest Periods with respect to such Loans or within such earlier
period as required by law. If any such conversion of a Eurocurrency Loan or
Foreign Currency Loan occurs on a day which is not the last day of the then
current Interest Period with respect thereto, the Borrower shall pay to such
Lender such amounts, if any, as may be required pursuant to Section 3.13.
3.9 Requirements of Law.
If, after the date hereof, the adoption of any applicable law, rule, or
regulation, or any change in any applicable law, rule, or regulation, or any
change in the interpretation or administration thereof by any Governmental
Authority, central bank, or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its Applicable Lending
Office) with any request or directive (whether or not having the force of law)
of any such Governmental Authority, central bank, or comparable agency:
(i) shall subject such Lender (or its Applicable Lending Office)
to any tax, duty, or other charge with respect to any Eurocurrency
Loans, its Notes, or its obligation to make Eurocurrency Loans, or
change the basis of taxation of any amounts payable to such Lender (or
46
its Applicable Lending Office) under this Credit Agreement or its
Notes in respect of any Eurocurrency Loans (other than taxes imposed
on the overall net income of such Lender by the jurisdiction in which
such Lender has its principal office or such Applicable Lending
Office);
(ii) shall impose, modify, or deem applicable any reserve,
special deposit, assessment, or similar requirement (other than the
Eurocurrency Reserve Requirement utilized in the determination of the
Adjusted Eurocurrency Rate) relating to any extensions of credit or
other assets of, or any deposits with or other liabilities or
commitments of, such Lender (or its Applicable Lending Office),
including the Commitment of such Lender hereunder; or
(iii) shall impose on such Lender (or its Applicable Lending
Office) or the London interbank market any other condition affecting
this Credit Agreement or its Notes or any of such extensions of credit
or liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such Lender
(or its Applicable Lending Office) of making, converting into, continuing, or
maintaining any Eurocurrency Loans or to reduce any sum received or receivable
by such Lender (or its Applicable Lending Office) under this Credit Agreement or
its Notes with respect to any Eurocurrency Loans, then the Borrower shall pay to
such Lender on demand such amount or amounts as will compensate such Lender for
such increased cost or reduction; provided, however, that no such amounts shall
be payable with respect to an increased cost or reduction in the rate of return
incurred more than one (1) year before such Lender demands compensation under
this Section 3.9. If any Lender requests compensation by the Borrower under this
Section 3.9, the Borrower may, by notice to such Lender (with a copy to the
Administrative Agent), suspend the obligation of such Lender to make or continue
Eurocurrency Loans, or to convert Base Rate Loans into Eurocurrency Loans, until
the event or condition giving rise to such request ceases to be in effect (in
which case the provisions of Section 3.10 shall be applicable); provided that
such suspension shall not affect the right of such Lender to receive the
compensation so requested. Each Lender shall promptly notify the Borrower and
the Administrative Agent of any event of which it has knowledge, occurring after
the date hereof, which will entitle such Lender to compensation pursuant to this
Section 3.9 and will designate a different Applicable Lending Office if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the judgment of such Lender, be otherwise disadvantageous to
it. Any Lender claiming compensation under this Section 3.9 shall furnish to the
Borrower and the Administrative Agent a statement setting forth the additional
amount or amounts to be paid to it hereunder. In determining such amount, such
Lender may use any reasonable averaging and attribution methods.
3.10 Treatment of Affected Loans.
If the obligation of any Lender to make any Eurocurrency Loan or to
continue, or to convert Base Rate Loans into, Eurocurrency Loans shall be
suspended pursuant to Section 3.8 or 3.9 hereof, such Lender's Eurocurrency
Loans shall be automatically converted into Base Rate Loans on the last day(s)
of the then current Interest Period(s) for such Eurocurrency Loans (or, in the
case of a conversion required by Section 3.8 hereof, on such earlier date as
such Lender may specify to the Borrower with a copy to the Administrative Agent)
47
and, unless and until such Lender gives notice as provided below that the
circumstances specified in Section 3.8 or 3.9 hereof that gave rise to such
conversion no longer exist:
(a) to the extent that such Lender's Eurocurrency Loans have been so
converted, all payments and prepayments of principal that would otherwise
be applied to such Lender's Eurocurrency Loans shall be applied instead to
its Base Rate Loans; and
(b) all Loans that would otherwise be made or continued by such Lender
as Eurocurrency Loans shall be made or continued instead as Base Rate
Loans, and all Base Rate Loans of such Lender that would otherwise be
converted into Eurocurrency Loans shall remain as Base Rate Loans.
If such Lender gives notice to the Borrower (with a copy to the Administrative
Agent) that the circumstances specified in Section 3.8 or 3.9 hereof that gave
rise to the conversion of such Lender's Eurocurrency Loans pursuant to this
Section 3.10 no longer exist (which such Lender agrees to do promptly upon such
circumstances ceasing to exist) at a time when Eurocurrency Loans made by other
Lenders are outstanding, such Lender's Base Rate Loans shall be automatically
converted, on the first day(s) of the next succeeding Interest Period(s) for
such outstanding Eurocurrency Loans, to the extent necessary so that, after
giving effect thereto, all Loans held by the Lenders holding Eurocurrency Loans
and by such Lender are held pro rata (as to principal amounts, interest rate
basis, and Interest Periods) in accordance with their respective Commitments.
3.11 Taxes.
(a) Any and all payments by any Credit Party to or for the account of
any Lender or the Administrative Agent hereunder or under any other Credit
Document shall be made free and clear of and without deduction for any and
all present or future taxes, duties, levies, imposts, deductions, charges
or withholdings, and all liabilities with respect thereto, excluding, in
the case of each Lender and the Administrative Agent, taxes imposed on its
income, and franchise taxes imposed on it, by the jurisdiction under the
laws of which such Lender (or its Applicable Lending Office) or the
Administrative Agent (as the case may be) is organized or any political
subdivision thereof (all such non-excluded taxes, duties, levies, imposts,
deductions, charges, withholdings, and liabilities being hereinafter
referred to as "Taxes"). If any Credit Party shall be required by law to
deduct any Taxes from or in respect of any sum payable under this Credit
Agreement or any other Credit Document to any Lender or the Administrative
Agent, (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to
additional sums payable under this Section 3.11) such Lender or the
Administrative Agent receives an amount equal to the sum it would have
received had no such deductions been made, (ii) such Credit Party shall
make such deductions, (iii) such Credit Party shall pay the full amount
deducted to the relevant taxation authority or other authority in
accordance with applicable law, and (iv) such Credit Party shall furnish to
the Administrative Agent, at its address referred to in Section 11.1, the
original or a certified copy of a receipt evidencing payment thereof.
48
(b) In addition, the Borrower agrees to pay any and all present or
future stamp or documentary taxes and any other excise or property taxes or
charges or similar levies which arise from any payment made under this
Credit Agreement or any other Credit Document or from the execution or
delivery of, or otherwise with respect to, this Credit Agreement or any
other Credit Document (hereinafter referred to as "Other Taxes").
(c) The Borrower agrees to indemnify each Lender and the
Administrative Agent for the full amount of Taxes and Other Taxes
(including, without limitation, any Taxes or Other Taxes imposed or
asserted by any jurisdiction on amounts payable under this Section 3.11)
paid by such Lender or the Administrative Agent (as the case may be) and
any liability (including penalties, interest, and expenses) arising
therefrom or with respect thereto.
(d) Each Lender that is not a United States person under Section
7701(a)(30) of the Code, on or prior to the date of its execution and
delivery of this Credit Agreement in the case of each Lender listed on the
signature pages hereof and on or prior to the date on which it becomes a
Lender in the case of each other Lender, and from time to time thereafter
if requested in writing by the Borrower or the Administrative Agent (but
only so long as such Lender remains lawfully able to do so), shall provide
the Borrower and the Administrative Agent with (i) Internal Revenue Service
Form 1001 or 4224, as appropriate, or any successor form prescribed by the
Internal Revenue Service, certifying that such Lender is entitled to
benefits under an income tax treaty to which the United States is a party
which reduces the rate of withholding tax on payments of interest or
certifying that the income receivable pursuant to this Credit Agreement is
effectively connected with the conduct of a trade or business in the United
States, (ii) Internal Revenue Service Form W-8 or W-9, as appropriate, or
any successor form prescribed by the Internal Revenue Service, and (iii)
any other form or certificate required by any taxing authority (including
any certificate required by Sections 871(h) and 881(c) of the Internal
Revenue Code), certifying that such Lender is entitled to an exemption from
or a reduced rate of tax on payments pursuant to this Credit Agreement or
any of the other Credit Documents.
(e) For any period with respect to which a Lender has failed to
provide the Borrower and the Administrative Agent with the appropriate form
pursuant to Section 3.11(d) (unless such failure is due to a change in
treaty, law, or regulation occurring subsequent to the date on which a form
originally was required to be provided), such Lender shall not be entitled
to indemnification under Section 3.11(a) or 3.11(b) with respect to Taxes
imposed by the United States; provided, however, that should a Lender,
which is otherwise exempt from or subject to a reduced rate of withholding
tax, become subject to Taxes because of its failure to deliver a form
required hereunder, the Borrower shall take such steps (at such Lender's
expense) as such Lender shall reasonably request to assist such Lender to
recover such Taxes.
(f) If any Credit Party is required to pay additional amounts to or
for the account of any Lender pursuant to this Section 3.11, then such
Lender will agree to use reasonable efforts to change the jurisdiction of
its Applicable Lending Office so as to eliminate or reduce any such
49
additional payment which may thereafter accrue if such change, in the
judgment of such Lender, is not otherwise disadvantageous to such Lender.
(g) Within thirty (30) days after the date of any payment of Taxes,
the applicable Credit Party shall furnish to the Administrative Agent the
original or a certified copy of a receipt evidencing such payment.
(h) Without prejudice to the survival of any other agreement of the
Credit Parties hereunder, the agreements and obligations of the Credit
Parties contained in this Section 3.11 shall survive the repayment of the
Loans, LOC Obligations and other obligations under the Credit Documents and
the termination of the Commitments hereunder.
3.12 Compensation.
Upon demand of any Lender (with a copy to the Administrative Agent) from
time to time, the Borrower shall promptly compensate such Lender for and hold
such Lender harmless from any loss, cost or expense (other than the loss of
anticipated profit) incurred by it as a result of:
(a) any continuation, conversion, payment or prepayment of any Loan
other than a Base Rate Loan on a day other than the last day of the
Interest Period for such Loan (whether voluntary, mandatory, automatic, by
reason of acceleration, or otherwise, including, without limitation, in
connection with any assignment by Bank of America pursuant to Section
11.3(b) as part of the primary syndication of the Loans during the 180-day
period immediately following the Closing Date (it being understood and
agreed by the Administrative Agent, however, that the Administrative Agent
shall use commercially reasonable efforts to minimize the incurrence of
costs by the Borrower in connection with such primary syndication)); or
(b) any failure by the Borrower (for a reason other than the failure
of such Lender to make a Loan) to prepay, borrow, continue or convert any
Loan other than a Base Rate Loan on the date or in the amount notified by
the Borrower;
including any loss or expense arising from the liquidation or reemployment of
funds obtained by it to maintain such Loan or from fees payable to terminate the
deposits from which such funds were obtained. The Borrower shall also pay any
customary administrative fees charged by such Lender in connection with the
foregoing. For purposes of calculating amounts payable by the Borrower to the
Lenders under this Section 3.12, each Lender shall be deemed to have funded each
Eurocurrency Loan made by it at the Interbank Offered Rate for such Loan by a
matching deposit or other borrowing in the applicable offshore Dollar interbank
market for a comparable amount and for a comparable period, whether or not such
Eurocurrency Loan was in fact so funded.
3.13 Pro Rata Treatment.
Except to the extent otherwise provided herein:
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(a) Loans. Each Loan, each payment or (subject to the terms of Section
3.3) prepayment of principal of any Loan or reimbursement obligations
arising from drawings under Letters of Credit, each payment of interest on
the Loans or reimbursement obligations arising from drawings under Letters
of Credit, each payment of Unused Fees, each payment of the Letter of
Credit Fee, each reduction in Commitments and each conversion or extension
of any Loan, shall be allocated pro rata among the Lenders in accordance
with the respective principal amounts of their outstanding Revolving Loans
or Foreign Currency Loans and Participation Interests.
(b) Advances.
(i) No Lender shall be responsible for the failure or delay by
any other Lender in its obligation to make its ratable share of a
borrowing hereunder; provided, however, that the failure of any Lender
to fulfill its obligations hereunder shall not relieve any other
Lender of its obligations hereunder.
(ii) Unless the Borrower or any Lender has notified the
Administrative Agent prior to the date any payment is required to be
made by it to the Administrative Agent hereunder, that the Borrower or
such Lender, as the case may be, will not make such payment, the
Administrative Agent may assume that the Borrower or such Lender, as
the case may be, has timely made such payment and may (but shall not
be so required to), in reliance thereon, make available a
corresponding amount to the Person entitled thereto. If and to the
extent that such payment was not in fact made to the Administrative
Agent in immediately available funds, then:
(A) if the Borrower failed to make such payment, each Lender
shall forthwith on demand repay to the Administrative Agent the
portion of such assumed payment that was made available to such
Lender in immediately available funds, together with interest
thereon in respect of each day from and including the date such
amount was made available by the Administrative Agent to such
Lender to the date such amount is repaid to the Administrative
Agent in immediately available funds, at the Federal Funds Rate
from time to time in effect; and
(B) if any Lender failed to make such payment, such Lender
shall forthwith on demand pay to the Administrative Agent the
amount thereof in immediately available funds, together with
interest thereon for the period from the date such amount was
made available by the Administrative Agent to the Borrower to the
date such amount is recovered by the Administrative Agent (the
"Compensation Period") at a rate per annum equal to the Federal
Funds Rate from time to time in effect. If such Lender does not
pay such amount forthwith upon the Administrative Agent's demand
therefor, the Administrative Agent may make a demand therefor
upon the Borrower, and the Borrower shall pay such amount to the
Administrative Agent, together with interest thereon for the
Compensation Period at a rate per annum equal to the rate of
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interest applicable to the applicable Borrowing.
Nothing herein shall be deemed to relieve any Lender from its obligation to
fulfill its Commitment or to prejudice any rights that the Administrative
Agent or the Borrower may have against any Lender as a result of any
default by such Lender hereunder. A notice of the Administrative Agent to
any Lender with respect to any amount owing under this subsection (d) shall
be conclusive, absent manifest error.
3.14 Sharing of Payments.
The Lenders agree among themselves that, in the event that any Lender shall
obtain payment in respect of any Loan, LOC Obligations or any other obligation
owing to such Lender under this Credit Agreement through the exercise of a right
of setoff, banker's lien or counterclaim, or pursuant to a secured claim under
Section 506 of Title 11 of the United States Code or other security or interest
arising from, or in lieu of, such secured claim, received by such Lender under
any applicable bankruptcy, insolvency or other similar law or otherwise, or by
any other means, in excess of its pro rata share of such payment as provided for
in this Credit Agreement, such Lender shall promptly purchase from the other
Lenders a Participation Interest in such Loans, LOC Obligations and other
obligations in such amounts, and make such other adjustments from time to time,
as shall be equitable to the end that all Lenders share such payment in
accordance with their respective ratable shares as provided for in this Credit
Agreement. The Lenders further agree among themselves that if payment to a
Lender obtained by such Lender through the exercise of a right of setoff,
banker's lien, counterclaim or other event as aforesaid shall be rescinded or
must otherwise be restored, each Lender which shall have shared the benefit of
such payment shall, by repurchase of a Participation Interest theretofore sold,
return its share of that benefit (together with its share of any accrued
interest payable with respect thereto) to each Lender whose payment shall have
been rescinded or otherwise restored. The Borrower agrees that any Lender so
purchasing such a Participation Interest may, to the fullest extent permitted by
law, exercise all rights of payment, including setoff, banker's lien or
counterclaim, with respect to such Participation Interest as fully as if such
Lender were a holder of such Loan, LOC Obligations or other obligation in the
amount of such Participation Interest. Except as otherwise expressly provided in
this Credit Agreement, if any Lender or the Administrative Agent shall fail to
remit to the Administrative Agent or any other Lender an amount payable by such
Lender or the Administrative Agent to the Administrative Agent or such other
Lender pursuant to this Credit Agreement on the date when such amount is due,
such payments shall be made together with interest thereon for each date from
the date such amount is due until the date such amount is paid to the
Administrative Agent or such other Lender at a rate per annum equal to the
Federal Funds Rate. If under any applicable bankruptcy, insolvency or other
similar law, any Lender receives a secured claim in lieu of a setoff to which
this Section 3.14 applies, such Lender shall, to the extent practicable,
exercise its rights in respect of such secured claim in a manner consistent with
the rights of the Lenders under this Section 3.14 to share in the benefits of
any recovery on such secured claim.
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3.15 Payments, Computations, Etc.
(a) Except as otherwise specifically provided herein, all payments
hereunder shall be made to the Administrative Agent in Dollars in
immediately available funds, without condition or deduction for any
counterclaim, defense, recoupment or setoff, at the Administrative Agent's
office specified in Schedule 2.1(a) not later than 2:00 P.M. (Charlotte,
North Carolina time) on the date when due. Payments received after such
time shall be deemed to have been received on the next succeeding Business
Day. The Administrative Agent may (but shall not be obligated to) debit the
amount of any such payment which is not made by such time to any ordinary
deposit account of the Borrower or any other Credit Party maintained with
the Administrative Agent (with notice to the Borrower or such other Credit
Party). The Borrower shall, at the time it makes any payment under this
Credit Agreement, specify to the Administrative Agent the Loans, LOC
Obligations, Fees, interest or other amounts payable by the Borrower
hereunder to which such payment is to be applied (and in the event that it
fails so to specify, or if such application would be inconsistent with the
terms hereof, the Administrative Agent shall distribute such payment to the
Lenders in such manner as the Administrative Agent may determine to be
appropriate in respect of obligations owing by the Borrower hereunder,
subject to the terms of Section 3.13(a)). The Administrative Agent will
distribute such payments to such Lenders, if any such payment is received
prior to 12:00 Noon (Charlotte, North Carolina time) on a Business Day in
like funds as received prior to the end of such Business Day and otherwise
the Administrative Agent will distribute such payment to such Lenders on
the next succeeding Business Day. Whenever any payment hereunder shall be
stated to be due on a day which is not a Business Day, the due date thereof
shall be extended to the next succeeding Business Day (subject to accrual
of interest and Fees for the period of such extension), except that in the
case of Eurocurrency Loans, if the extension would cause the payment to be
made in the next following calendar month, then such payment shall instead
be made on the next preceding Business Day. Except as expressly provided
otherwise herein, all computations of interest and fees shall be made on
the basis of actual number of days elapsed over a year of 360 days, except
with respect to computation of interest on Base Rate Loans and Foreign
Currency Loans denominated in British Pounds Sterling which shall be
calculated based on a year of 365 or 366 days, as appropriate. Interest
shall accrue from and include the date of borrowing, but exclude the date
of payment.
(b) Allocation of Payments After Acceleration. Notwithstanding any
other provisions of this Credit Agreement to the contrary, after
acceleration of the Credit Party Obligations pursuant to Section 9.2, all
amounts collected or received by the Administrative Agent or any Lender on
account of the Credit Party Obligations or any other amounts outstanding
under any of the Credit Documents or in respect of the Collateral shall be
paid over or delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation reasonable attorneys' fees) of the
Administrative Agent in connection with enforcing the rights of the Lenders
under the Credit Documents and any protective advances made by the
53
Administrative Agent with respect to the Collateral under or pursuant to
the terms of the Collateral Documents;
SECOND, to payment of any fees owed to the Administrative Agent;
THIRD, to the payment of all reasonable out-of-pocket costs and expenses
(including without limitation, reasonable attorneys' fees) of each of the
Lenders in connection with enforcing its rights under the Credit Documents or
otherwise with respect to the Credit Party Obligations owing to such Lender;
FOURTH, to the payment of all of the Credit Party Obligations consisting of
accrued fees and interest;
FIFTH, to the payment of the outstanding principal amount of the Credit
Party Obligations (including the payment or cash collateralization of the
outstanding LOC Obligations);
SIXTH, to all other Credit Party Obligations and other obligations which
shall have become due and payable under the Credit Documents or otherwise and
not repaid pursuant to clauses "FIRST" through "FIFTH" above; and
SEVENTH, to the payment of the surplus, if any, to whoever may be lawfully
entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (ii) each of the Lenders shall receive an amount equal to
its pro rata share (based on the proportion that the then outstanding Loans and
LOC Obligations held by such Lender bears to the aggregate then outstanding
Loans and LOC Obligations) of amounts available to be applied pursuant to
clauses "THIRD", "FOURTH", "FIFTH" and "SIXTH" above; and (iii) to the extent
that any amounts available for distribution pursuant to clause "FIFTH" above are
attributable to the issued but undrawn amount of outstanding Letters of Credit,
such amounts shall be held by the Administrative Agent in a cash collateral
account and applied (A) first, to reimburse the Issuing Lender from time to time
for any drawings under such Letters of Credit and (B) then, following the
expiration of all Letters of Credit, to all other obligations of the types
described in clauses "FIFTH" and "SIXTH" above in the manner provided in this
Section 3.15(b).
3.16 Evidence of Debt.
(a) Each Lender shall maintain an account or accounts evidencing each
Loan made by such Lender to the Borrower from time to time, including the
amounts of principal and interest payable and paid to such Lender from time
to time under this Credit Agreement. Each Lender will make reasonable
efforts to maintain the accuracy of its account or accounts and to promptly
update its account or accounts from time to time, as necessary.
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(b) The Administrative Agent shall maintain the Register pursuant to
Section 11.3(c), and a subaccount for each Lender, in which Register and
subaccounts (taken together) shall be recorded (i) the amount, type and
Interest Period of each such Loan hereunder, (ii) the amount of any
principal or interest due and payable or to become due and payable to each
Lender hereunder and (iii) the amount of any sum received by the
Administrative Agent hereunder from or for the account of any Credit Party
and each Lender's share thereof. The Administrative Agent will make
reasonable efforts to maintain the accuracy of the subaccounts referred to
in the preceding sentence and to promptly update such subaccounts from time
to time, as necessary.
(c) The entries made in the accounts, Register and subaccounts
maintained pursuant to subsection (b) of this Section 3.16 (and, if
consistent with the entries of the Administrative Agent, subsection (a))
shall be prima facie evidence of the existence and amounts of the
obligations of the Credit Parties therein recorded; provided, however, that
the failure of any Lender or the Administrative Agent to maintain any such
account, such Register or such subaccount, as applicable, or any error
therein, shall not in any manner affect the obligation of the Credit
Parties to repay the Credit Party Obligations owing to such Lender.
3.17 Mitigation; Mandatory Assignment.
Each Lender shall use reasonable efforts to avoid or mitigate any increased
cost or suspension of the availability of an interest rate under Section 3.6,
3.8, 3.9 or 3.11 to the greatest extent practicable (including transferring the
Loans to another lending office or affiliate of a Lender) unless, in the opinion
of such Lender, such efforts would be likely to have an adverse effect upon such
Lender. In the event a Lender makes a request to the Borrower for additional
payments in accordance with Section 3.6, 3.8, 3.9 or 3.11, then, provided that
no Default or Event of Default has occurred and is continuing at such time, the
Borrower may, at its own expense (such expense to include any transfer fee
payable to the Administrative Agent under Section 11.3(b) and any expense
pursuant to Section 3.12), and in its sole discretion, require such Lender to
transfer and assign in whole (but not in part), without recourse (in accordance
with and subject to the terms and conditions of Section 11.3(b)), all of its
interests, rights and obligations under this Credit Agreement to an assignee
which shall assume such assigned obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (a) such assignment
shall not conflict with any law, rule or regulation or order of any court or
other governmental authority and (b) the Borrower or such assignee shall have
paid to the assigning Lender in immediately available funds the principal of and
interest accrued to the date of such payment on the portion of the Loans
hereunder held by such assigning Lender and all other amounts owed to such
assigning Lender hereunder, including amounts owed pursuant to Section 3.9,
Section 3.11 or Section 3.12.
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SECTION 4
GUARANTY
4.1 The Guaranty.
Each of the Guarantors hereby jointly and severally guarantees to each
Lender, each Affiliate of a Lender that enters into a Hedging Agreement, and the
Administrative Agent as hereinafter provided, as primary obligor and not as
surety, the prompt payment of the Credit Party Obligations in full when due
(whether at stated maturity, as a mandatory prepayment, by acceleration, as a
mandatory cash collateralization or otherwise) strictly in accordance with the
terms thereof. The Guarantors hereby further agree that if any of the Credit
Party Obligations are not paid in full when due (whether at stated maturity, as
a mandatory prepayment, by acceleration, as a mandatory cash collateralization
or otherwise), the Guarantors will, jointly and severally, promptly pay the
same, without any demand or notice whatsoever, and that in the case of any
extension of time of payment or renewal of any of the Credit Party Obligations,
the same will be promptly paid in full when due (whether at extended maturity,
as a mandatory prepayment, by acceleration, as a mandatory cash
collateralization or otherwise) in accordance with the terms of such extension
or renewal.
Notwithstanding any provision to the contrary contained herein or in any
other of the Credit Documents or Hedging Agreements, the obligations of each
Guarantor hereunder shall be limited to an aggregate amount equal to the largest
amount that would not render its obligations hereunder subject to avoidance
under Section 548 of the Bankruptcy Code or any comparable provisions of any
applicable state law.
4.2 Obligations Unconditional.
The obligations of the Guarantors under Section 4.1 are joint and several,
absolute and unconditional, irrespective of the value, genuineness, validity,
regularity or enforceability of any of the Credit Documents or Hedging
Agreements, or any other agreement or instrument referred to therein, or any
substitution, release, impairment or exchange of any other guarantee of or
security for any of the Credit Party Obligations, and, to the fullest extent
permitted by applicable law, irrespective of any other circumstance whatsoever
which might otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor, it being the intent of this Section 4.2 that the
obligations of the Guarantors hereunder shall be absolute and unconditional
under any and all circumstances. Each Guarantor agrees that such Guarantor shall
have no right of subrogation, indemnity, reimbursement or contribution against
the Borrower or any other Guarantor for amounts paid under this Section 4 until
such time as the Lenders (and any Affiliates of Lenders entering into Hedging
Agreements) have been paid in full, all Commitments under this Credit Agreement
have been terminated and no Person or Governmental Authority shall have any
right to request any return or reimbursement of funds from the Lenders in
connection with monies received under the Credit Documents or Hedging
Agreements. Without limiting the generality of the foregoing, it is agreed that,
to the fullest extent permitted by law, the occurrence of any one or more of the
following shall not alter or impair the liability of any Guarantor hereunder
which shall remain absolute and unconditional as described above:
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(a) at any time or from time to time, without notice to any Guarantor,
the time for any performance of or compliance with any of the Credit Party
Obligations shall be extended, or such performance or compliance shall be
waived;
(b) any of the acts mentioned in any of the provisions of any of the
Credit Documents, any Hedging Agreement or any other agreement or
instrument referred to in the Credit Documents or Hedging Agreements shall
be done or omitted;
(c) the maturity of any of the Credit Party Obligations shall be
accelerated, or any of the Credit Party Obligations shall be modified,
supplemented or amended in any respect, or any right under any of the
Credit Documents, any Hedging Agreement or any other agreement or
instrument referred to in the Credit Documents or Hedging Agreements shall
be waived or any other guarantee of any of the Credit Party Obligations or
any security therefor shall be released, impaired or exchanged in whole or
in part or otherwise dealt with;
(d) any Lien granted to, or in favor of, the Administrative Agent or
any Lender or Lenders as security for any of the Credit Party Obligations
shall fail to attach or be perfected; or
(e) any of the Credit Party Obligations shall be determined to be void
or voidable (including, without limitation, for the benefit of any creditor
of any Guarantor) or shall be subordinated to the claims of any Person
(including, without limitation, any creditor of any Guarantor).
With respect to its obligations hereunder, each Guarantor hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the Administrative Agent or any Lender
exhaust any right, power or remedy or proceed against any Person under any of
the Credit Documents, any Hedging Agreement or any other agreement or instrument
referred to in the Credit Documents or Hedging Agreements, or against any other
Person under any other guarantee of, or security for, any of the Credit Party
Obligations.
4.3 Reinstatement.
The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Credit Party Obligations is
rescinded or must be otherwise restored by any holder of any of the Credit Party
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Administrative Agent and each Lender on demand for all reasonable costs and
expenses (including, without limitation, reasonable fees and expenses of
counsel) incurred by the Administrative Agent or such Lender in connection with
such rescission or restoration, including any such reasonable costs and expenses
incurred in defending against any claim alleging that such payment constituted a
preference, fraudulent transfer or similar payment under any bankruptcy,
insolvency or similar law.
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4.4 Certain Additional Waivers.
Each Guarantor agrees that such Guarantor shall have no right of recourse
to security for the Credit Party Obligations, except through the exercise of
rights of subrogation pursuant to Section 4.2 and through the exercise of rights
of contribution pursuant to Section 4.6.
4.5 Remedies.
The Guarantors agree that, to the fullest extent permitted by law, as
between the Guarantors, on the one hand, and the Administrative Agent and the
Lenders, on the other hand, the Credit Party Obligations may be declared to be
forthwith due and payable as provided in Section 9.2 (and shall be deemed to
have become automatically due and payable in the circumstances provided in said
Section 9.2) for purposes of Section 4.1 notwithstanding any stay, injunction or
other prohibition preventing such declaration (or preventing the Credit Party
Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or the Credit Party
Obligations being deemed to have become automatically due and payable), the
Credit Party Obligations (whether or not due and payable by any other Person)
shall forthwith become due and payable by the Guarantors for purposes of Section
4.1. The Guarantors acknowledge and agree that their obligations hereunder are
secured in accordance with the terms of the Security Agreements and the other
Collateral Documents and that the Lenders may exercise their remedies thereunder
in accordance with the terms thereof.
4.6 Rights of Contribution.
The Guarantors hereby agree as among themselves that, if any Guarantor
shall make an Excess Payment (as defined below), such Guarantor shall have a
right of contribution from each other Guarantor in an amount equal to such other
Guarantor's Contribution Share (as defined below) of such Excess Payment. The
payment obligations of any Guarantor under this Section 4.6 shall be subordinate
and subject in right of payment to the prior payment in full to the
Administrative Agent and the Lenders of the Guaranteed Obligations, and none of
the Guarantors shall exercise any right or remedy under this Section 4.6 against
any other Guarantor until payment and satisfaction in full of all of such
Guaranteed Obligations. For purposes of this Section 4.6, (a) "Guaranteed
Obligations" shall mean any obligations arising under the other provisions of
this Section 4; (b) "Excess Payment" shall mean the amount paid by any Guarantor
in excess of its Pro Rata Share of any Guaranteed Obligations; (c) "Pro Rata
Share" shall mean, for any Guarantor in respect of any payment of Guaranteed
Obligations, the ratio (expressed as a percentage) as of the date of such
payment of Guaranteed Obligations of (i) the amount by which the aggregate
present fair salable value of all of its assets and properties exceeds the
amount of all debts and liabilities of such Guarantor (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of such Guarantor hereunder) to (ii) the amount by which the
aggregate present fair salable value of all assets and other properties of all
of the Credit Parties exceeds the amount of all of the debts and liabilities
(including contingent, subordinated, unmatured, and unliquidated liabilities,
but excluding the obligations of the Credit Parties hereunder) of the Credit
Parties; provided, however, that, for purposes of calculating the Pro Rata
Shares of the Guarantors in respect of any payment of Guaranteed Obligations,
any Guarantor that became a Guarantor subsequent to the date of any such payment
58
shall be deemed to have been a Guarantor on the date of such payment and the
financial information for such Guarantor as of the date such Guarantor became a
Guarantor shall be utilized for such Guarantor in connection with such payment;
and (d) "Contribution Share" shall mean, for any Guarantor in respect of any
Excess Payment made by any other Guarantor, the ratio (expressed as a
percentage) as of the date of such Excess Payment of (i) the amount by which the
aggregate present fair salable value of all of its assets and properties exceeds
the amount of all debts and liabilities of such Guarantor (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of such Guarantor hereunder) to (ii) the amount by which the
aggregate present fair salable value of all assets and other properties of the
Credit Parties other than the maker of such Excess Payment exceeds the amount of
all of the debts and liabilities (including contingent, subordinated, unmatured,
and unliquidated liabilities, but excluding the obligations of the Credit
Parties) of the Credit Parties other than the maker of such Excess Payment;
provided, however, that, for purposes of calculating the Contribution Shares of
the Guarantors in respect of any Excess Payment, any Guarantor that became a
Guarantor subsequent to the date of any such Excess Payment shall be deemed to
have been a Guarantor on the date of such Excess Payment and the financial
information for such Guarantor as of the date such Guarantor became a Guarantor
shall be utilized for such Guarantor in connection with such Excess Payment.
This Section 4.6 shall not be deemed to affect any right of subrogation,
indemnity, reimbursement or contribution that any Guarantor may have under
applicable law against the Borrower in respect of any payment of Guaranteed
Obligations.
4.7 Guarantee of Payment; Continuing Guarantee.
The guarantee in this Section 4 is a guaranty of payment and not of
collection, is a continuing guarantee, and shall apply to all Credit Party
Obligations whenever arising.
SECTION 5
CONDITIONS
5.1 Closing Conditions.
The obligation of the Lenders to enter into this Credit Agreement and to
make the initial Loans or the Issuing Lender to issue the initial Letter of
Credit, whichever shall occur first, shall be subject to satisfaction of the
following conditions (in form and substance acceptable to the Lenders in their
reasonable discretion):
(a) Executed Credit Documents. Receipt by the Administrative Agent of
duly executed copies of: (i) this Credit Agreement, (ii) the Notes, (iii)
the Swingline Note, (iv) the Collateral Documents and (v) all other Credit
Documents, each in form and substance acceptable to the Administrative
Agent in its reasonable discretion.
(b) Corporate Documents. Receipt by the Administrative Agent of the
following:
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(i) Charter Documents. Copies of the articles or certificates of
incorporation or other charter documents of each Credit Party
certified to be true and complete as of a recent date by the
appropriate Governmental Authority of the state or other jurisdiction
of its incorporation and certified by a secretary or assistant
secretary of such Credit Party to be true and correct as of the
Closing Date.
(ii) Bylaws. A copy of the bylaws of each Credit Party certified
by a secretary or assistant secretary of such Credit Party to be true
and correct as of the Closing Date.
(iii) Resolutions. Copies of resolutions of the Board of
Directors of each Credit Party approving and adopting the Credit
Documents to which it is a party, the transactions contemplated
therein and authorizing execution and delivery thereof, certified by a
secretary or assistant secretary of such Credit Party to be true and
correct and in force and effect as of the Closing Date.
(iv) Good Standing. Copies of certificates of good standing,
existence or its equivalent with respect to each Credit Party
certified as of a recent date by the appropriate Governmental
Authorities of the state or other jurisdiction of incorporation and
each other jurisdiction in which the failure to so qualify and be in
good standing could have a Material Adverse Effect.
(v) Incumbency. An incumbency certificate of each Credit Party
certified by a secretary or assistant secretary to be true and correct
as of the Closing Date.
(c) Financial Statements. Receipt by the Administrative Agent of (i)
the consolidated financial statements of the Parent and its Subsidiaries,
including balance sheets and income and cash flow statements for each of
the fiscal years ending 1998, 1999 and 2000, in each case audited by
nationally recognized independent public accountants and containing an
unqualified opinion of such firm that such statements present fairly the
consolidated financial position of the Parent and its Subsidiaries and are
prepared in conformity with GAAP and (ii) such other information relating
to the Parent and its Subsidiaries as the Administrative Agent may
reasonably require in connection with the structuring and syndication of
credit facilities of the type described herein.
(d) Opinions of Counsel. The Administrative Agent shall have received
a legal opinion in form and substance reasonably satisfactory to the
Administrative Agent dated as of the Closing Date from counsel to the
Credit Parties.
(e) Personal Property Collateral. The Administrative Agent shall have
received:
(i) searches of Uniform Commercial Code filings in the
jurisdiction of the chief executive office of each Credit Party and
each jurisdiction where any Collateral is located or where a filing
would need to be made in order to perfect the Administrative Agent's
security interest in the Collateral (it being understood and agreed
60
that liens are not to be perfected with respect to personal property
located in certain field offices), copies of the financing statements
on file in such jurisdictions and evidence that no Liens exist other
than Permitted Liens;
(ii) duly executed UCC financing statements for each appropriate
jurisdiction as is necessary, in the Administrative Agent's reasonable
discretion, to perfect the Administrative Agent's security interest in
the Collateral;
(iii) searches of ownership of intellectual property in the
appropriate governmental offices and such patent/trademark/copyright
filings as requested by the Administrative Agent in order to perfect
the Administrative Agent's security interest in the Collateral;
(iv) all stock certificates evidencing the Capital Stock pledged
to the Administrative Agent pursuant to the Pledge Agreement, together
with duly executed in blank, undated stock powers attached thereto
(unless, with respect to the pledged Capital Stock of any Foreign
Subsidiary, such stock powers are deemed unnecessary by the
Administrative Agent in its reasonable discretion under the law of the
jurisdiction of incorporation of such Person);
(v) such patent/trademark/copyright filings as requested by the
Administrative Agent in order to perfect the Administrative Agent's
security interest in the Collateral; and
(vi) duly executed consents as are necessary, in the
Administrative Agent's sole discretion, to perfect the Administrative
Agent's security interest in the Collateral.
(f) Priority of Liens. The Administrative Agent shall have received
satisfactory evidence that (i) the Administrative Agent, on behalf of the
Lenders, holds a perfected, first priority Lien on all Collateral and (ii)
none of the Collateral is subject to any other Liens other than Permitted
Liens.
(g) Evidence of Insurance. Receipt by the Administrative Agent of
copies of insurance policies or certificates of insurance of the
Consolidated Parties evidencing liability and casualty insurance meeting
the requirements set forth in the Credit Documents, including, but not
limited to, naming the Administrative Agent as sole loss payee on behalf of
the Lenders.
(h) Material Adverse Effect. No material adverse change shall have
occurred since December 31, 2000 in the condition (financial or otherwise),
business, assets, operations, management or prospects of the Consolidated
Parties taken as a whole.
(i) Litigation. There shall not exist any pending or threatened
action, suit, investigation or proceeding against a Consolidated Party that
could reasonably be expected to have a Material Adverse Effect.
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(j) Officer's Certificates. The Administrative Agent shall have
received a certificate or certificates executed by an Executive Officer of
the Borrower as of the Closing Date stating that (A) each Credit Party is
in compliance with all existing financial obligations, (B) all
governmental, shareholder and third party consents and approvals, if any,
with respect to the Credit Documents and the transactions contemplated
thereby have been obtained, (C) no action, suit, investigation or
proceeding is pending or, to the knowledge of such Executive Officer,
threatened in any court or before any arbitrator or governmental
instrumentality that purports to affect any Credit Party or any transaction
contemplated by the Credit Documents, if such action, suit, investigation
or proceeding could reasonably be expected to have a Material Adverse
Effect, and (D) immediately after giving effect to this Credit Agreement,
the other Credit Documents and all the transactions contemplated therein to
occur on such date, (1) each of the Credit Parties is Solvent, (2) no
Default or Event of Default exists, (3) all representations and warranties
contained herein and in the other Credit Documents are true and correct in
all material respects, and (4) the Credit Parties are in compliance with
each of the financial covenants set forth in Section 7.11.
(k) Opening Availability. The Administrative Agent shall have received
a certificate from the Borrower indicating that the estimated amount of
Receivables as of the fiscal quarter ended December 31, 2001 is at least
$50,000,000.
(l) Fees and Expenses. Payment by the Credit Parties of all fees and
expenses owed by them to the Lenders and the Administrative Agent,
including, without limitation, payment to the Administrative Agent of the
fees set forth in the Fee Letter.
(m) Other. Receipt by the Lenders of such other documents,
instruments, agreements or information as reasonably requested by any
Lender, including, but not limited to, information regarding litigation,
tax, accounting, labor, insurance, pension liabilities (actual or
contingent), real estate leases, material contracts, debt agreements,
property ownership and contingent liabilities of the Consolidated Parties.
5.2 Conditions to all Extensions of Credit.
The obligations of each Lender to make, convert or extend any Loan and of
the Issuing Lender to issue or extend any Letter of Credit (including the
initial Loans and the initial Letter of Credit) are subject to satisfaction of
the following conditions in addition to satisfaction on the Closing Date of the
conditions set forth in Section 5.1:
(a) The Borrower shall have delivered (i) in the case of any Revolving
Loan or Foreign Currency Loan, an appropriate Notice of Borrowing or Notice
of Extension/Conversion or (ii) in the case of any Letter of Credit, the
Issuing Lender shall have received an appropriate request for issuance in
accordance with the provisions of Section 2.2(b);
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(b) The representations and warranties set forth in Section 6 shall,
subject to the limitations set forth therein, be true and correct in all
material respects as of such date (except for those which expressly relate
to an earlier date);
(c) There shall not have been commenced against any Consolidated Party
an involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or any case, proceeding or other
action for the appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of such Person or for any
substantial part of its Property or for the winding up or liquidation of
its affairs, and such involuntary case or other case, proceeding or other
action shall remain undismissed, undischarged or unbonded;
(d) No Default or Event of Default shall exist and be continuing
either prior to or after giving effect thereto;
(e) No circumstances, events or conditions shall have occurred since
December 31, 2000 which would have a Material Adverse Effect; and
(f) Immediately after giving effect to the making of such Loan (and
the application of the proceeds thereof) or to the issuance of such Letter
of Credit, as the case may be, (i) the sum of the aggregate principal
amount of outstanding Revolving Loans plus LOC Obligations outstanding plus
outstanding Foreign Currency Loans plus outstanding Swingline Loans shall
not exceed the lesser of (A) the Revolving Committed Amount, (B) the
Available Revolving Committed Amount and (C) the Borrowing Base, (ii) the
LOC Obligations shall not exceed the LOC Committed Amount and (iii) the
Foreign Currency Loans outstanding shall not exceed the Foreign Currency
Committed Amount.
The delivery of each Notice of Borrowing, each Notice of Extension/Conversion
and each request for a Letter of Credit pursuant to Section 2.2(b) shall
constitute a representation and warranty by the Credit Parties of the
correctness of the matters specified in subsections (b), (c), (d), (e) and (f)
above.
SECTION 6
REPRESENTATIONS AND WARRANTIES
The Credit Parties hereby represent to the Administrative Agent and each
Lender that:
6.1 Financial Condition.
The financial statements delivered to the Lenders pursuant to Section
5.1(c) and Section 7.1(a) and (b), (i) have been prepared in accordance with
GAAP and (ii) present fairly (on the basis disclosed in the footnotes to such
financial statements) the consolidated financial condition, results of
operations and cash flows of the Consolidated Parties as of such date and for
such periods.
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6.2 No Material Change.
Since December 31, 2000 (a) there has been no development or event relating
to or affecting a Consolidated Party which has had or could reasonably be
expected to have a Material Adverse Effect and (b) except as otherwise permitted
under this Credit Agreement, no dividends or other distributions have been
declared, paid or made upon the Capital Stock in a Consolidated Party nor has
any of the Capital Stock in a Consolidated Party been redeemed, retired,
purchased or otherwise acquired for value.
6.3 Organization and Good Standing.
Each of the Consolidated Parties (a) is duly organized, validly existing
and is in good standing under the laws of the jurisdiction of its incorporation
or organization, (b) has the corporate or other necessary power and authority,
and the legal right, to own and operate its property, to lease the property it
operates as lessee and to conduct the business in which it is currently engaged
and (c) is duly qualified as a foreign entity and in good standing under the
laws of each jurisdiction where its ownership, lease or operation of property or
the conduct of its business requires such qualification, other than in such
jurisdictions where the failure to be so qualified and in good standing could
not be reasonably expected to have a Material Adverse Effect.
6.4 Power; Authorization; Enforceable Obligations.
Each of the Credit Parties has the corporate or other necessary power and
authority, and the legal right, to make, deliver and perform the Credit
Documents to which it is a party, and in the case of the Borrower, to obtain
extensions of credit hereunder, and has taken all necessary corporate action to
authorize the borrowings and other extensions of credit on the terms and
conditions of this Credit Agreement and to authorize the execution, delivery and
performance of the Credit Documents to which it is a party. No consent or
authorization of, filing with, notice to or other similar act by or in respect
of, any Governmental Authority or any other Person is required to be obtained or
made by or on behalf of any Credit Party in connection with the borrowings or
other extensions of credit hereunder or with the execution, delivery,
performance, validity or enforceability of the Credit Documents to which such
Credit Party is a party, except for filings to perfect the Liens created by the
Collateral Documents. This Credit Agreement has been, and each other Credit
Document to which any Credit Party is a party will be, duly executed and
delivered on behalf of the Credit Parties. This Credit Agreement constitutes,
and each other Credit Document to which any Credit Party is a party when
executed and delivered will constitute, a legal, valid and binding obligation of
such Credit Party enforceable against such party in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
6.5 No Conflicts.
Neither the execution and delivery of the Credit Documents, nor the
consummation of the transactions contemplated therein, nor performance of and
compliance with the terms and provisions thereof by such Credit Party will (a)
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violate or conflict with any provision of its articles or certificate of
incorporation or bylaws or other organizational or governing documents of such
Person, (b) violate, contravene or materially conflict with any Requirement of
Law or any other law, regulation (including, without limitation, Regulation U or
Regulation X), order, writ, judgment, injunction, decree or permit applicable to
it, (c) violate, contravene or conflict with contractual provisions of, or cause
an event of default under, any indenture, loan agreement, mortgage, deed of
trust, contract or other agreement or instrument to which it is a party or by
which it may be bound, the violation of which could have a Material Adverse
Effect, or (d) result in or require the creation of any Lien (other than those
contemplated in or created in connection with the Credit Documents) upon or with
respect to its properties.
6.6 No Default.
No Consolidated Party is in default in any respect under any contract,
lease, loan agreement, indenture, mortgage, security agreement or other
agreement or obligation to which it is a party or by which any of its properties
is bound which default could have a Material Adverse Effect. No Default or Event
of Default has occurred or exists except as previously disclosed in writing to
the Lenders.
6.7 Ownership.
Each Consolidated Party is the owner of, and has good and marketable title
to, all of its respective assets and none of such assets is subject to any Lien
other than Permitted Liens.
6.8 Indebtedness.
Except as otherwise permitted under Section 8.1, the Consolidated Parties
have no Indebtedness.
6.9 Litigation.
There are no actions, suits or legal, equitable, arbitration or
administrative proceedings, pending or, to the knowledge of any Credit Party,
threatened against any Consolidated Party which could reasonably be expected to
have a Material Adverse Effect.
6.10 Taxes.
Each Consolidated Party has filed, or caused to be filed, all tax returns
(federal, state, local and foreign) required to be filed and paid (a) all
amounts of taxes shown thereon to be due (including interest and penalties) and
(b) all other taxes, fees, assessments and other governmental charges (including
mortgage recording taxes, documentary stamp taxes and intangibles taxes) owing
by it, except for such taxes (i) which are not yet delinquent or (ii) that are
being contested in good faith and by proper proceedings, and against which
adequate reserves are being maintained in accordance with GAAP. No Credit Party
is aware as of the Closing Date of any proposed tax assessments against it or
any other Consolidated Party.
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6.11 Compliance with Law.
Each Consolidated Party is in compliance with all Requirements of Law and
all other laws, rules, regulations, orders and decrees (including without
limitation Environmental Laws) applicable to it, or to its properties, unless
such failure to comply could not have a Material Adverse Effect.
6.12 ERISA.
(a) During the five-year period prior to the date on which this
representation is made or deemed made: (i) no ERISA Event has occurred,
and, to the best knowledge of the Credit Parties, no event or condition has
occurred or exists as a result of which any ERISA Event could reasonably be
expected to occur, with respect to any Plan; (ii) no "accumulated funding
deficiency," as such term is defined in Section 302 of ERISA and Section
412 of the Code, whether or not waived, has occurred with respect to any
Plan; (iii) each Plan has been maintained, operated, and funded in material
compliance with its own terms and in material compliance with the
provisions of ERISA, the Code, and any other applicable federal or state
laws; and (iv) no lien in favor of the PBGC or a Plan has arisen or is
reasonably likely to arise on account of any Plan.
(b) The actuarial present value of all "benefit liabilities" (as
defined in Section 4001(a)(16) of ERISA), whether or not vested, under each
Single Employer Plan, as of the last annual valuation date prior to the
date on which this representation is made or deemed made (determined, in
each case, in accordance with Financial Accounting Standards Board
Statement 87, utilizing the actuarial assumptions used in such Plan's most
recent actuarial valuation report), did not exceed as of such valuation
date the fair market value of the assets of such Plan.
(c) Neither any Consolidated Party nor any ERISA Affiliate has
incurred, or, to the best knowledge of the Credit Parties, could be
reasonably expected to incur, any withdrawal liability under ERISA to any
Multiemployer Plan or Multiple Employer Plan. Neither any Consolidated
Party nor any ERISA Affiliate would become subject to any withdrawal
liability under ERISA if any Consolidated Party or any ERISA Affiliate were
to withdraw completely from all Multiemployer Plans and Multiple Employer
Plans as of the valuation date most closely preceding the date on which
this representation is made or deemed made. Neither any Consolidated Party
nor any ERISA Affiliate has received any notification that any
Multiemployer Plan is in reorganization (within the meaning of Section 4241
of ERISA), is insolvent (within the meaning of Section 4245 of ERISA), or
has been terminated (within the meaning of Title IV of ERISA), and no
Multiemployer Plan is, to the best knowledge of the Credit Parties,
reasonably expected to be in reorganization, insolvent, or terminated.
(d) No prohibited transaction (within the meaning of Section 406 of
ERISA or Section 4975 of the Code) or breach of fiduciary responsibility
has occurred with respect to a Plan which has subjected or may subject any
Consolidated Party or any ERISA Affiliate to any material liability under
Sections 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of the Code,
or under any agreement or other instrument pursuant to which any
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Consolidated Party or any ERISA Affiliate has agreed or is required to
indemnify any Person against any such material liability.
(e) Neither any Consolidated Party nor any ERISA Affiliates has any
material liability with respect to "expected post-retirement benefit
obligations" within the meaning of the Financial Accounting Standards Board
Statement 106. Each Plan which is a welfare plan (as defined in Section
3(1) of ERISA) to which Sections 601-609 of ERISA and Section 4980B of the
Code apply has been administered in compliance in all material respects of
such sections.
(f) Neither the execution and delivery of this Credit Agreement nor
the consummation of the financing transactions contemplated thereunder will
involve any transaction which is subject to the prohibitions of Sections
404, 406 or 407 of ERISA or in connection with which a tax could be imposed
pursuant to Section 4975 of the Code. The representation by the Credit
Parties in the preceding sentence is made in reliance upon and subject to
the accuracy of the Lenders' representation in Section 11.15 with respect
to their source of funds and is subject, in the event that the source of
the funds used by the Lenders in connection with this transaction is an
insurance company's general asset account, to the application of Prohibited
Transaction Class Exemption 95-60, 60 Fed. Reg. 35,925 (1995), compliance
with the regulations issued under Section 401(c)(1)(A) of ERISA, or the
issuance of any other prohibited transaction exemption or similar relief,
to the effect that assets in an insurance company's general asset account
do not constitute assets of an "employee benefit plan" within the meaning
of Section 3(3) of ERISA of a "plan" within the meaning of Section
4975(e)(1) of the Code.
6.13 Subsidiaries.
Set forth on Schedule 6.13 is a complete and accurate list of all
Subsidiaries of each Consolidated Party. Information on Schedule 6.13 includes
jurisdiction of incorporation or organization, the number of shares of each
class of Capital Stock outstanding, the number and percentage of outstanding
shares of each class owned (directly or indirectly) by such Consolidated Party;
and the number and effect, if exercised, of all outstanding options, warrants,
rights of conversion or purchase and all other similar rights with respect
thereto. The outstanding Capital Stock of all such Subsidiaries is validly
issued, fully paid and non-assessable and is owned by each such Consolidated
Party, directly or indirectly, free and clear of all Liens (other than those
arising under or contemplated in connection with the Credit Documents). Other
than as set forth in Schedule 6.13, no Consolidated Party has outstanding any
securities convertible into or exchangeable for its Capital Stock nor does any
such Person have outstanding any rights to subscribe for or to purchase or any
options for the purchase of, or any agreements providing for the issuance
(contingent or otherwise) of, or any calls, commitments or claims of any
character relating to its Capital Stock. Schedule 6.13 may be updated from time
to time by the Borrower by giving written notice thereof to the Administrative
Agent.
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6.14 Governmental Regulations, Etc.
(a) No part of the Letters of Credit or proceeds of the Loans will be
used, directly or indirectly, in any manner that would constitute a
violation of Regulation T, Regulation U or Regulation X. "Margin stock"
within the meaning of Regulation U does not constitute more than 25% of the
value of the consolidated assets of the Consolidated Parties. None of the
transactions contemplated by this Credit Agreement (including, without
limitation, the direct or indirect use of the proceeds of the Loans) will
violate or result in a violation of the Securities Act of 1933, as amended,
or the Securities Exchange Act of 1934, as amended, or regulations issued
pursuant thereto, or Regulation T, U or X. If requested by any Lender or
Administrative Agent, the Borrower will furnish to the Administrative Agent
and each Lender a statement to the effect of the foregoing sentences in
conformity with the requirements of FR Form U-1 referred to in Regulation
U.
(b) No Consolidated Party is subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act or the
Investment Company Act of 1940, each as amended. In addition, no
Consolidated Party is (i) an "investment company" registered or required to
be registered under the Investment Company Act of 1940, as amended, and is
not controlled by such a company, or (ii) a "holding company", or a
"subsidiary company" of a "holding company", or an "affiliate" of a
"holding company" or of a "subsidiary" of a "holding company", within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
(c) No director, executive officer or principal shareholder of any
Consolidated Party is a director, executive officer or principal
shareholder of any Lender. For the purposes hereof the terms "director",
"executive officer" and "principal shareholder" (when used with reference
to any Lender) have the respective meanings assigned thereto in Regulation
O issued by the Board of Governors of the Federal Reserve System.
(d) Except where the failure to have or hold any such item would not
have a Material Adverse Effect, each Consolidated Party has obtained and
holds in full force and effect, all franchises, licenses, permits,
certificates, authorizations, qualifications, accreditations, easements,
rights of way and other rights, consents and approvals which are necessary
for the ownership of its respective Property and to the conduct of its
respective businesses as presently conducted.
(e) No Consolidated Party is in violation of any applicable statute,
regulation or ordinance of the United States of America, or of any state,
city, town, municipality, county or any other jurisdiction, or of any
agency thereof (including without limitation, environmental laws and
regulations), which violation could reasonably be expected to have a
Material Adverse Effect.
(f) Each Consolidated Party is current with all material reports and
documents, if any, required to be filed with any state or federal
securities commission or similar agency and is in full compliance in all
material respects with all applicable rules and regulations of such
commissions.
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6.15 Purpose of Loans and Letters of Credit.
The proceeds of the Loans hereunder shall be used solely by the Borrower
(i) for working capital (ii) to make Consolidated Capital Expenditures, (iii) to
refinance existing Indebtedness of the Parent on the Closing Date, (iv) to make
Permitted Acquisitions, (v) to make the Xxxxxx Xxxxxxx Acquisition and to
refinance existing Indebtedness of Xxxxxx Xxxxxxx in connection therewith and
(vi) for general corporate purposes. The Letters of Credit shall be used only
for or in connection with appeal bonds, reimbursement obligations arising in
connection with surety and reclamation bonds, reinsurance, domestic or
international trade transactions and obligations not otherwise aforementioned
relating to transactions entered into by the applicable account party in the
ordinary course of business.
6.16 Environmental Matters.
Except where failure to comply could not reasonably be expected to have a
Material Adverse Effect:
(a) Each of the facilities and properties owned, leased or operated by
the Consolidated Parties (the "Properties") and all operations at the
Properties are in compliance with all applicable Environmental Laws, and
there is no violation of any Environmental Law with respect to the
Properties or the businesses operated by the Consolidated Parties (the
"Businesses"), and there are no conditions relating to the Businesses or
Properties that could give rise to liability under any applicable
Environmental Laws.
(b) None of the Properties contains, or has previously contained, any
Materials of Environmental Concern at, on or under the Properties in
amounts or concentrations that constitute or constituted a violation of, or
could give rise to liability under, Environmental Laws.
(c) No Consolidated Party has received any written or verbal notice
of, or inquiry from any Governmental Authority regarding, any violation,
alleged violation, non-compliance, liability or potential liability
regarding environmental matters or compliance with Environmental Laws with
regard to any of the Properties or the Businesses, nor does any
Consolidated Party have knowledge or reason to believe that any such notice
will be received or is being threatened.
(d) Materials of Environmental Concern have not been transported or
disposed of from the Properties, or generated, treated, stored or disposed
of at, on or under any of the Properties or any other location, in each
case by or on behalf of any Consolidated Party in violation of, or in a
manner that could give rise to liability under, any applicable
Environmental Law.
(e) No judicial proceeding or governmental or administrative action is
pending or, to the best knowledge of any Credit Party, threatened, under
any Environmental Law to which any Consolidated Party is or will be named
as a party, nor are there any consent decrees or other decrees, consent
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orders, administrative orders or other orders, or other administrative or
judicial requirements outstanding under any Environmental Law with respect
to the Consolidated Parties, the Properties or the Businesses.
(f) There has been no release, or threat of release, of Materials of
Environmental Concern at or from the Properties, or arising from or related
to the operations (including, without limitation, disposal) of any
Consolidated Party in connection with the Properties or otherwise in
connection with the Businesses, in violation of or in amounts or in a
manner that could give rise to liability under Environmental Laws.
6.17 Intellectual Property.
Each Consolidated Party owns, or has the legal right to use, all
trademarks, tradenames, copyrights, technology, know-how and processes (the
"Intellectual Property") necessary for each of them to conduct its business as
currently conducted except for those the failure to own or have such legal right
to use could not have a Material Adverse Effect. Set forth on Schedule 6.17 is a
list of all Intellectual Property owned by each Consolidated Party or that any
Consolidated Party has the right to use. Except as provided on Schedule 6.17, no
claim has been asserted and is pending by any Person challenging or questioning
the use of any such Intellectual Property or the validity or effectiveness of
any such Intellectual Property, nor does any Credit Party know of any such
claim, and to the Credit Parties' knowledge the use of such Intellectual
Property by any Consolidated Party does not infringe on the rights of any
Person, except for such claims and infringements that, in the aggregate, could
not have a Material Adverse Effect.
6.18 Solvency.
Each Credit Party is and, after consummation of the transactions
contemplated by this Credit Agreement, will be Solvent.
6.19 Investments.
All Investments of each Consolidated Party are Permitted Investments.
6.20 Location of Collateral.
Set forth on Schedule 6.20(a) is a complete and correct list of all real
property located in the United States and owned or leased by any Credit Party
(with street address and state where located). Set forth on Schedule 6.20(b) is
a list of all locations where any tangible personal property of any Credit Party
is located, including county and state where located. Set forth on Schedule
6.20(c) is the jurisdiction of incorporation or organization, chief executive
office and principal place of business of each Credit Party. Each of Schedule
6.20(a), Schedule 6.20(b) and Schedule 6.20(c) may be updated from time to time
by the Borrower by written notice to the Administrative Agent.
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6.21 Disclosure.
Neither this Credit Agreement nor any financial statements delivered to the
Lenders nor any other document, certificate or statement furnished to the
Lenders by or on behalf of any Consolidated Party in connection with the
transactions contemplated hereby contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
contained therein or herein not misleading.
6.22 Brokers' Fees.
No Consolidated Party has any obligation to any Person in respect of any
finder's, broker's, investment banking or other similar fee in connection with
any of the transactions contemplated under the Credit Documents.
6.23 Labor Matters.
There are no collective bargaining agreements or Multiemployer Plans
covering the employees of a Consolidated Party as of the Closing Date and none
of the Consolidated Parties has suffered any strikes, walkouts, work stoppages
or other material labor difficulty within the last five years.
SECTION 7
AFFIRMATIVE COVENANTS
Each Credit Party hereby covenants and agrees that, so long as this Credit
Agreement is in effect or any amounts payable hereunder or under any other
Credit Document shall remain outstanding, and until all of the Commitments
hereunder shall have terminated:
7.1 Information Covenants.
The Credit Parties will furnish, or cause to be furnished, to the
Administrative Agent and each of the Lenders:
(a) Annual Financial Statements. As soon as available, and in any
event within 90 days after the close of each fiscal year of the
Consolidated Parties, a consolidated balance sheet and income statement of
the Consolidated Parties, as of the end of such fiscal year, together with
related consolidated statements of operations and retained earnings and of
cash flows for such fiscal year, setting forth in comparative form
consolidated figures for the preceding fiscal year, all such financial
information described above to be in reasonable form and detail and audited
by independent certified public accountants of recognized national standing
reasonably acceptable to the Administrative Agent and whose opinion shall
be to the effect that such financial statements have been prepared in
accordance with GAAP (except for changes with which such accountants
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concur) and shall not be limited as to the scope of the audit or qualified
as to the status of the Consolidated Parties as a going concern.
(b) Quarterly Financial Statements. As soon as available, and in any
event within 45 days after the close of each fiscal quarter of the
Consolidated Parties (other than the fourth fiscal quarter, in which case
90 days after the end thereof) a consolidated balance sheet and income
statement of the Consolidated Parties, as of the end of such fiscal
quarter, together with related consolidated statements of operations for
such fiscal quarter and cash flows for such year to date, in each case
setting forth in comparative form consolidated figures for the
corresponding period of the preceding fiscal year, all such financial
information described above to be in a form satisfying the Securities and
Exchange Commission requirements for a 10-Q filing or otherwise in
reasonable form and detail and reasonably acceptable to the Administrative
Agent, and accompanied by a certificate of the chief financial officer of
the Borrower to the effect that such quarterly financial statements fairly
present in all material respects the financial condition of the
Consolidated Parties and have been prepared in accordance with GAAP,
subject to changes resulting from audit and normal year-end audit
adjustments.
(c) Officer's Certificate. At the time of delivery of the financial
statements provided for in Sections 7.1(a) and 7.1(b) above, a certificate
of the chief financial officer of the Borrower substantially in the form of
Exhibit 7.1(c), (i) demonstrating compliance with the financial covenants
contained in Section 7.11 by calculation thereof as of the end of each such
fiscal period and (ii) stating that no Default or Event of Default exists,
or if any Default or Event of Default does exist, specifying the nature and
extent thereof and what action the Credit Parties propose to take with
respect thereto.
(d) Borrowing Base Certificate. Within thirty (30) days after the end
of each fiscal quarter (forty-five (45) days in the case of the fiscal
quarter ended December 31, 2001), a certificate as of the end of such
fiscal quarter, substantially in the form of Exhibit 7.1(d) and certified
by an Executive Officer of the Borrower to be true and correct in all
material respects as of the date thereof (a "Borrowing Base Certificate").
(e) Accountant's Certificate. Within the period for delivery of the
annual financial statements provided in Section 7.1(a), a certificate of
the accountants conducting the annual audit stating that they have reviewed
this Credit Agreement and stating further whether, in the course of their
audit, they have become aware of any Default or Event of Default and, if
any such Default or Event of Default exists, specifying the nature and
extent thereof.
(f) Auditor's Reports. Promptly upon receipt thereof, a copy of any
other report or "management letter" submitted by independent accountants to
any Consolidated Party in connection with any annual, interim or special
audit of the books of such Person.
(g) Reports. Promptly upon transmission or receipt thereof, (i) copies
of any filings and registrations with, and reports to or from, the
Securities and Exchange Commission, or any successor agency, and copies of
all financial statements, proxy statements, notices and reports as any
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Consolidated Party shall send to its shareholders or to a holder of any
Indebtedness owed by any Consolidated Party in its capacity as such a
holder and (ii) upon the request of the Administrative Agent, all reports
and written information to and from the United States Environmental
Protection Agency, or any state or local agency responsible for
environmental matters, the United States Occupational Health and Safety
Administration, or any state or local agency responsible for health and
safety matters, or any successor agencies or authorities concerning
environmental, health or safety matters.
(h) Notices. Upon obtaining knowledge thereof, the Credit Parties will
give written notice to the Administrative Agent promptly of (i) the
occurrence of an event or condition consisting of a Default or Event of
Default, specifying the nature and existence thereof and what action the
Credit Parties propose to take with respect thereto, and (ii) the
occurrence of any of the following with respect to any Consolidated Party
(A) the pendency or commencement of any litigation, arbitral or
governmental proceeding against such Person which if adversely determined
is likely to have a Material Adverse Effect, (B) the institution of any
proceedings against such Person with respect to, or the receipt of notice
by such Person of potential liability or responsibility for violation, or
alleged violation of any federal, state or local law, rule or regulation,
including but not limited to, Environmental Laws, the violation of which
could be reasonably expected to have a Material Adverse Effect, or (C) any
notice or determination concerning the imposition of any withdrawal
liability by a Multiemployer Plan against such Person or any ERISA
Affiliate, the determination that a Multiemployer Plan is, or is expected
to be, in reorganization within the meaning of Title IV of ERISA or the
termination of any Plan.
(i) ERISA. Upon obtaining knowledge thereof, the Credit Parties will
give written notice to the Administrative Agent promptly (and in any event
within five business days) of: (i) of any event or condition, including,
but not limited to, any Reportable Event, that constitutes, or might
reasonably lead to, an ERISA Event; (ii) with respect to any Multiemployer
Plan, the receipt of notice as prescribed in ERISA or otherwise of any
withdrawal liability assessed against the Credit Parties or any ERISA
Affiliates, or of a determination that any Multiemployer Plan is in
reorganization or insolvent (both within the meaning of Title IV of ERISA);
(iii) the failure to make full payment on or before the due date (including
extensions) thereof of all amounts which any Consolidated Party or any
ERISA Affiliate is required to contribute to each Plan pursuant to its
terms and as required to meet the minimum funding standard set forth in
ERISA and the Code with respect thereto; or (iv) any change in the funding
status of any Plan that could have a Material Adverse Effect, together with
a description of any such event or condition or a copy of any such notice
and a statement by the chief financial officer of the Borrower briefly
setting forth the details regarding such event, condition, or notice, and
the action, if any, which has been or is being taken or is proposed to be
taken by the Credit Parties with respect thereto. Promptly upon request,
the Credit Parties shall furnish the Administrative Agent and the Lenders
with such additional information concerning any Plan as may be reasonably
requested, including, but not limited to, copies of each annual
report/return (Form 5500 series), as well as all schedules and attachments
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thereto required to be filed with the Department of Labor and/or the
Internal Revenue Service pursuant to ERISA and the Code, respectively, for
each "plan year" (within the meaning of Section 3(39) of ERISA).
(j) Environmental.
(i) Upon the reasonable written request of the Administrative
Agent, the Credit Parties will furnish or cause to be furnished to the
Administrative Agent, at the Credit Parties' expense, a report of an
environmental assessment of reasonable scope, form and depth,
(including, where appropriate, invasive soil or groundwater sampling)
by a consultant reasonably acceptable to the Administrative Agent as
to the nature and extent of the presence of any Materials of
Environmental Concern on any Properties (as defined in Section 6.16)
that are either owned by a Credit Party or for which the Credit Party
is the tenant for a majority of the usable space, and as to the
compliance by any Consolidated Party with Environmental Laws at such
Properties. If the Credit Parties fail to deliver such an
environmental report within seventy-five (75) days after receipt of
such written request then the Administrative Agent may arrange for
same, and the Consolidated Parties hereby grant to the Administrative
Agent and their representatives access to the Properties to reasonably
undertake such an assessment (including, where appropriate, invasive
soil or groundwater sampling). The reasonable cost of any assessment
arranged for by the Administrative Agent pursuant to this provision
will be payable by the Credit Parties on demand and added to the
obligations secured by the Collateral Documents.
(ii) The Consolidated Parties will conduct and complete all
investigations, studies, sampling, and testing and all remedial,
removal, and other actions necessary to address all Materials of
Environmental Concern on , from or affecting any of the Properties
referred to in the preceding clause (i) to the extent necessary to be
in compliance with all Environmental Laws and with the validly issued
orders and directives of all Governmental Authorities with
jurisdiction over such Properties to the extent any failure could have
a Material Adverse Effect.
(k) Additional Patents and Trademarks. At the time of delivery of the
financial statements and reports provided for in Section 7.1(a), a report
signed by the chief financial officer or treasurer of the Borrower setting
forth (i) a list of registration numbers for all patents and copyrights
awarded to any Consolidated Party since the last day of the immediately
preceding fiscal year and (ii) a list of all patent applications and
copyright applications submitted by any Consolidated Party since the last
day of the immediately preceding fiscal year and the status of each such
application, all in such form as shall be reasonably satisfactory to the
Administrative Agent.
(l) Other Information. With reasonable promptness upon any such
request, such other information regarding the business, properties or
financial condition of any Consolidated Party as the Administrative Agent
or the Required Lenders may reasonably request.
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7.2 Preservation of Existence and Franchises.
Except as a result of or in connection with a merger of a Subsidiary
permitted under Section 8.4, each Credit Party will, and will cause each of its
Subsidiaries to, do all things necessary to preserve and keep in full force and
effect its existence, rights, franchises and authority.
7.3 Books and Records.
Each Credit Party will, and will cause each of its Subsidiaries to, keep
complete and accurate books and records of its transactions in accordance with
good accounting practices on the basis of GAAP (including the establishment and
maintenance of appropriate reserves).
7.4 Compliance with Law.
Each Credit Party will, and will cause each of its Subsidiaries to, comply
with all laws, rules, regulations and orders, and all applicable restrictions
imposed by all Governmental Authorities, applicable to it and its Property if
noncompliance with any such law, rule, regulation, order or restriction could be
reasonably expected to have a Material Adverse Effect.
7.5 Payment of Taxes and Other Indebtedness.
Each Credit Party will, and will cause each of its Subsidiaries to, pay and
discharge (a) all taxes, assessments and governmental charges or levies imposed
upon it, or upon its income or profits, or upon any of its properties, before
they shall become delinquent, (b) all lawful claims (including claims for labor,
materials and supplies) which, if unpaid, might give rise to a Lien upon any of
its properties, and (c) except as prohibited hereunder, all of its other
Indebtedness as it shall become due; provided, however, that no Consolidated
Party shall be required to pay any such tax, assessment, charge, levy, claim or
Indebtedness which is being contested in good faith by appropriate proceedings
and as to which adequate reserves therefor have been established in accordance
with GAAP, unless the failure to make any such payment (i) could give rise to an
immediate right to foreclose on a Lien securing such amounts or (ii) could be
reasonably expected to have a Material Adverse Effect.
7.6 Insurance.
(a) Each Credit Party will, and will cause each of its Subsidiaries
to, at all times maintain in full force and effect insurance (including
worker's compensation insurance, liability insurance, casualty insurance
and business interruption insurance) in such amounts, covering such risks
and liabilities and with such deductibles or self-insurance retentions as
are in accordance with normal industry practice (or as otherwise required
by the Collateral Documents). The Administrative Agent shall be named as
loss payee or mortgagee, as its interest may appear, and/or additional
insured with respect to any such insurance providing coverage in respect of
any Collateral, and each provider of any such insurance shall agree, by
endorsement upon the policy or policies issued by it or by independent
instruments furnished to the Administrative Agent, that it will give the
Administrative Agent thirty (30) days prior written notice before any such
policy or policies shall be altered or canceled, and that no act or default
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of any Consolidated Party or any other Person shall affect the rights of
the Administrative Agent or the Lenders under such policy or policies. The
present insurance coverage of the Consolidated Parties is outlined as to
carrier, policy number, expiration date, type and amount on Schedule 7.6.
(b) In case of any material loss, damage to or destruction of the
Collateral of any Credit Party or any part thereof, such Credit Party shall
promptly give written notice thereof to the Administrative Agent generally
describing the nature and extent of such damage or destruction. In case of
any loss, damage to or destruction of the Collateral of any Credit Party or
any part thereof, such Credit Party, whether or not the insurance proceeds,
if any, received on account of such damage or destruction shall be
sufficient for that purpose, at such Credit Party's cost and expense, will
promptly repair or replace the Collateral of such Credit Party so lost,
damaged or destroyed; provided, however, that such Credit Party need not
repair or replace the Collateral of such Credit Party so lost, damaged or
destroyed to the extent the failure to make such repair or replacement (i)
is desirable to the proper conduct of the business of such Credit Party in
the ordinary course and otherwise in the best interest of such Credit
Party; and (ii) would not materially impair the rights and benefits of the
Administrative Agent or the Lenders under the Collateral Documents, any
other Credit Document or any Hedging Agreement. In the event a Credit Party
shall receive any proceeds of such insurance in a net amount in excess of
$100,000, such Credit Party will immediately pay over such proceeds to the
Administrative Agent, for payment on the Credit Party Obligations;
provided, however, that the Administrative Agent agrees to release such
insurance proceeds to such Credit Party for replacement or restoration of
the portion of the Collateral of such Credit Party lost, damaged or
destroyed if, but only if, (A) no Default or Event of Default shall have
occurred and be continuing at the time of release, (B) written application
for such release is received by the Administrative Agent from such Credit
Party within 30 days of receipt of such proceeds and (C) the Administrative
Agent has received evidence reasonably satisfactory to it that the
Collateral lost, damaged or destroyed has been or will be replaced or
restored to its condition immediately prior to the loss, destruction or
other event giving rise to the payment of such insurance proceeds.
7.7 Maintenance of Property.
Each Credit Party will, and will cause each of its Subsidiaries to,
maintain and preserve its properties and equipment material to the conduct of
its business in good repair, working order and condition, normal wear and tear
and casualty and condemnation excepted, and will make, or cause to be made, in
such properties and equipment from time to time all repairs, renewals,
replacements, extensions, additions, betterments and improvements thereto as may
be needed or proper, to the extent and in the manner customary for companies in
similar businesses.
7.8 Performance of Obligations.
Each Credit Party will, and will cause each of its Subsidiaries to, perform
in all material respects all of its obligations under the terms of all material
agreements, indentures, mortgages, security agreements or other debt instruments
to which it is a party or by which it is bound.
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7.9 Use of Proceeds.
The Borrower will use the proceeds of the Loans and will use the Letters of
Credit solely for the purposes set forth in Section 6.15.
7.10 Audits/Inspections.
Upon reasonable notice and during normal business hours, each Credit Party
will, and will cause each of its Subsidiaries to, permit representatives
appointed by the Administrative Agent, including, without limitation,
independent accountants, agents, attorneys, and appraisers to visit and inspect
its property, including its books and records, its accounts receivable and
inventory, its facilities and its other business assets, and to make photocopies
or photographs thereof and to write down and record any information such
representative obtains and shall permit the Administrative Agent or its
representatives to investigate and verify the accuracy of information provided
to the Lenders and to discuss all such matters with the officers, employees and
representatives of such Person. The Credit Parties agree that the Administrative
Agent, and its representatives, may conduct an annual audit of the Collateral,
at the expense of the Credit Parties.
7.11 Financial Covenants.
(i) Fixed Charge Coverage Ratio. The Fixed Charge Coverage Ratio,
as of the last day of each fiscal quarter of the Consolidated Parties
during the periods set forth below, shall be greater than or equal to:
(a) From the Closing Date to and including March 31, 2002,
1.50 to 1.0;
(b) From April 1, 2002 to and including June 30, 2002, 2.0
to 1.0;
(c) From July 1, 2002 to and including September 30, 2002,
2.5 to 1.0; and
(d) From October 1, 2002 and thereafter, 3.0 to 1.0.
(ii) Leverage Ratio. The Leverage Ratio, as of the last day of
each fiscal quarter of the Consolidated Parties during the periods set
forth below, shall be less than or equal to:
(a) From the Closing Date to and including June 30, 2002,
4.5 to 1.0;
(b) From July 1, 2002 to and including September 30, 2002,
4.0 to 1.0;
(c) From October 1, 2002 to and including December 31, 2002,
3.5 to 1.0; and
(d) From January 1, 2003 and thereafter, 3.0 to 1.0.
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(iii) Senior Leverage Ratio. The Senior Leverage Ratio, as of the
last day of each fiscal quarter of the Consolidated Parties, shall be
less than or equal to 1.5 to 1.0.
(iv) Net Worth. At all times Net Worth shall be greater than or
equal to the sum of $200,000,000, increased on a cumulative basis as
of the end of each fiscal quarter of the Borrower, commencing with the
fiscal quarter ending December 31, 2001 by an amount equal to 75% of
Consolidated Net Income for the fiscal quarter then ended (without
deductions for any losses) plus 100% of the Net Cash Proceeds from any
Equity Issuance subsequent to the Closing Date. For purposes of
determining compliance with the Net Worth covenant set forth above,
the base number of $200,000,000 set forth above shall be (a) reduced
by the amount of any net book losses realized from the sale of the
Logistics Division or the Groupe Xxxx Business, (b) reduced (or
increased) by the amount of any "xxxx to market" net book losses (or
gains) required in accordance with GAAP to be recorded prior to the
sale of the Logistics Division or any Discontinued Operation or
non-cash charges (or gains) related to the reclassification of any
such Discontinued Operation as "continuing" or "operating", (c)
reduced by the amount of accelerated amortization of goodwill required
under FASB 142, in each case occurring or incurred subsequent to
September 30, 2001 and (d) reduced by the amount of the write-off of
all capitalized loan fees made during the period in which the Closing
Date occurs.
7.12 Additional Credit Parties.
(a) As soon as practicable and in any event within 45 days after any
Person becomes a Domestic Subsidiary of any Credit Party, the Borrower
shall provide the Administrative Agent with written notice thereof setting
forth information in reasonable detail describing all of the assets of such
Person and shall cause such Person to execute a Joinder Agreement in
substantially the same form as Exhibit 7.12, (b) cause 100% of the Capital
Stock of such Person to be delivered to the Administrative Agent (together
with undated stock powers signed in blank) and pledged to the
Administrative Agent pursuant to an appropriate pledge agreement(s) in form
acceptable to the Administrative Agent in its reasonable discretion and
cause such Person to deliver such other documentation as the Administrative
Agent may reasonably request in connection with the foregoing, including,
without limitation, appropriate UCC-1 financing statements, real estate
title insurance policies, environmental reports, landlord's waivers,
certified resolutions and other organizational and authorizing documents of
such Person, and favorable opinions of counsel to such Person all in form,
content and scope reasonably satisfactory to the Administrative Agent.
(b) As soon as practicable and in any event within 180 days after any
Person becomes a Material Foreign Subsidiary of any Credit Party, the
Borrower shall provide the Administrative Agent with written notice thereof
setting forth information in reasonable detail describing all of the assets
of such Person and shall cause 66% of the Capital Stock of such Person to
be delivered to the Administrative Agent (together with undated stock
powers signed in blank (unless, such stock powers are deemed unnecessary by
the Administrative Agent in its reasonable discretion under the law of the
jurisdiction of incorporation of such Person)) and pledged to the
Administrative Agent pursuant to an appropriate pledge agreement(s) in form
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acceptable to the Administrative Agent in its reasonable discretion and
cause such Person to deliver such other documentation as the Administrative
Agent may reasonably request in connection with the foregoing, including,
without limitation, appropriate UCC-1 financing statements, certified
resolutions and other organizational and authorizing documents of such
Person, and favorable opinions of counsel to such Person all in form,
content and scope reasonably satisfactory to the Administrative Agent. It
is specifically understood and agreed that no Material Foreign Subsidiary
shall be required to pledge any of the Capital Stock of any Foreign
Subsidiary owned by such Material Foreign Subsidiary.
7.13 Environmental Laws.
(a) The Consolidated Parties shall comply in all material respects
with, and take reasonable actions to ensure compliance in all material
respects by all tenants and subtenants, if any, with, all applicable
Environmental Laws and obtain and comply in all material respects with and
maintain, and take reasonable actions to ensure that all tenants and
subtenants obtain and comply in all material respects with and maintain,
any and all licenses, approvals, notifications, registrations or permits
required by applicable Environmental Laws except to the extent that failure
to do so would not reasonably be expected to have a Material Adverse
Effect;
(b) The Consolidated Parties shall conduct and complete all
investigations, studies, sampling and testing, and all remedial, removal
and other actions required under Environmental Laws and promptly comply in
all material respects with all lawful orders and directives of all
Governmental Authorities regarding Environmental Laws except to the extent
that the same are being contested in good faith by appropriate proceedings
and the failure to do or the pendency of such proceedings would not
reasonably be expected to have a Material Adverse Effect; and
(c) The Consolidated Parties shall defend, indemnify and hold harmless
the Administrative Agent and the Lenders, and their respective employees,
agents, officers and directors, from and against any and all claims,
demands, penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature known or unknown, contingent or
otherwise, arising out of, or in any way relating to the violation of,
noncompliance with or liability under, any Environmental Law applicable to
the operations of the Borrower or any of its Subsidiaries or the
Properties, or any orders, requirements or demands of Governmental
Authorities related thereto, including, without limitation, reasonable
attorney's and consultant's fees, investigation and laboratory fees,
response costs, court costs and litigation expenses, except to the extent
that any of the foregoing arise out of the gross negligence or willful
misconduct of the party seeking indemnification therefor. The agreements in
this paragraph shall survive repayment of the Loans and all other amounts
payable hereunder, and termination of the Commitments.
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7.14 Collateral.
If, subsequent to the Closing Date, a Credit Party shall acquire any real
property, intellectual property, securities instruments, chattel paper or other
personal property required to be delivered to the Administrative Agent as
Collateral hereunder or under any of the Collateral Documents, the Borrower
shall notify the Administrative Agent of same in each case as soon as
practicable after the acquisition thereof or execution of such lease agreement,
as appropriate. Each Credit Party shall take such action as reasonably requested
by the Administrative Agent and at its own expense, to ensure that the
Administrative Agent shall have a first priority perfected Lien in all real
property and personal property of the Credit Parties (whether now owned or
hereafter acquired), subject only to Permitted Liens.
7.15 Further Assurances.
Within sixty (60) days of the consummation of the Xxxxxx Xxxxxxx
Acquisition, the Credit Parties agree to provide the Administrative Agent with
the access necessary to allow the Administrative Agent to conduct a field
examination of the accounts receivable, inventory, payables, controls and
systems of Xxxxxx Xxxxxxx and its Subsidiaries.
SECTION 8
NEGATIVE COVENANTS
Each Credit Party hereby covenants and agrees that, so long as this Credit
Agreement is in effect or any amounts payable hereunder or under any other
Credit Document shall remain outstanding, and until all of the Commitments
hereunder shall have terminated:
8.1 Indebtedness.
The Credit Parties will not permit any Consolidated Party to contract,
create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness arising under this Credit Agreement and the other
Credit Documents;
(b) Indebtedness of the Consolidated Parties set forth in Schedule 8.1
(and renewals, refinancings and extensions thereof);
(c) purchase money Indebtedness (including obligations in respect of
Capital Leases or Synthetic Leases) hereafter incurred by any Consolidated
Party to finance the purchase of fixed assets provided that (i) the total
of all such purchase money Indebtedness (including any such purchase money
Indebtedness referred to in subsection (b) above) shall not exceed an
aggregate principal amount of $10,000,000 at any one time outstanding; (ii)
such purchase money Indebtedness when incurred shall not exceed the
purchase price of the asset(s) financed; and (iii) no such purchase money
Indebtedness shall be refinanced for a principal amount in excess of the
principal balance outstanding thereon at the time of such refinancing;
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(d) obligations of the Consolidated Parties in respect of Hedging
Agreements entered into in order to manage existing or anticipated interest
rate or exchange rate risks and not for speculative purposes; and
(e) other unsecured Indebtedness of the Consolidated Parties in an
amount not to exceed $5,000,000 in the aggregate at any one time;
(f) Indebtedness of Euro Vat under the NatWest Credit Agreement in an
amount not to exceed $100,000,000 in the aggregate at any one time;
provided, however, no loans, advances or other extensions of credit shall
be made under the NatWest Credit Agreement until such time as the Required
Lenders have consented in writing to Meridian's use of the facilities
provided thereunder;
(g) Indebtedness of Meridian VAT Reclaim (Japan), Inc. in an amount
not to exceed $3,500,000 in the aggregate at any one time;
(h) Subsequent to the consummation of the Xxxxxx Xxxxxxx Acquisition
in accordance with the terms hereof, the Indebtedness assumed in connection
with the Xxxxxx Xxxxxxx Acquisition and identified on Schedule 8.1;
(i) liabilities appearing on the balance sheet of Meridian
International, Meridian N. America and Meridian Japan due to GAAP
accounting treatment of the accounts receivable subject to the Factoring
Agreement;
(j) the Subordinated Debt; and
(k) unsecured intercompany Indebtedness owing by a Consolidated Party
to a Credit Party (permitted under Section 8.6).
8.2 Liens.
The Credit Parties will not permit any Consolidated Party to contract,
create, incur, assume or permit to exist any Lien with respect to any of its
Property (other than any "margin stock" within the meaning of Regulation U),
whether now owned or after acquired, except for Permitted Liens.
8.3 Nature of Business.
The Credit Parties will not permit any Consolidated Party to materially
alter the nature of the business conducted by such Person as of the Closing
Date.
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8.4 Consolidation, Merger, Dissolution, etc.
The Credit Parties will not permit any Consolidated Party to enter into any
transaction of merger or consolidation or liquidate, wind up or dissolve itself
(or suffer any liquidation or dissolution); provided that, notwithstanding the
foregoing provisions of this Section 8.4, (a) the Parent or the Borrower may
merge or consolidate with any of its Subsidiaries provided that (i) the Parent
or the Borrower shall be the continuing or surviving corporation, (ii) the
Parent shall not merge or consolidate with the Borrower, (iii) the Credit
Parties shall cause to be executed and delivered such documents, instruments and
certificates as the Administrative Agent may reasonably request in order to
maintain the perfection and priority of the Administrative Agent's liens on the
assets of the Credit Parties as required by Section 7.14 after giving effect to
such transaction and (iv) after giving effect to such transaction, no Default or
Event of Default exists, (b) any Credit Party other than the Borrower and the
Parent may merge or consolidate with any other Credit Party other than the
Borrower or the Parent provided that (i) the Credit Parties shall cause to be
executed and delivered such documents, instruments and certificates as the
Administrative Agent may reasonably request in order to maintain the perfection
and priority of the Administrative Agent's liens on the assets of the Credit
Parties as required by Section 7.14 after giving effect to such transaction and
(ii) after giving effect to such transaction, no Default or Event of Default
exists, (c) any Consolidated Party which is not a Credit Party may be merged or
consolidated with or into any Credit Party provided that (i) such Credit Party
shall be the continuing or surviving corporation, (ii) the Credit Parties shall
cause to be executed and delivered such documents, instruments and certificates
as the Administrative Agent may reasonably request in order to maintain the
perfection and priority of the Administrative Agent's liens on the assets of the
Credit Parties as required by Section 7.14 after giving effect to such
transaction and (iii) after giving effect to such transaction, no Default or
Event of Default exists, and (d) any Consolidated Party which is not a Credit
Party may be merged or consolidated with or into any other Consolidated Party
which is not a Credit Party provided that, after giving effect to such
transaction, no Default or Event of Default exists.
8.5 Asset Dispositions.
The Credit Parties will not permit any Consolidated Party to make any Asset
Disposition (including, without limitation, any Sale and Leaseback Transaction)
other than:
(i) the sale of inventory in the ordinary course of business for fair
consideration;
(ii) the sale or disposition of machinery and equipment no longer used
or useful in the conduct of such Person's business;
(iii) the sale of accounts receivable to the Factor pursuant to the
Factoring Agreement;
(iv) the sale, transfer or other disposition of "margin stock" within
the meaning of Regulation U; and
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(v) other sales of assets in an aggregate amount not to exceed
$10,000,000 in any fiscal year.
Upon a sale of assets permitted by this Section 8.5, the Administrative
Agent shall deliver to the Borrower, upon the Borrower's request and at the
Borrower's expense, such documentation as is reasonably necessary to evidence
the release of the Administrative Agent's security interest in such assets.
8.6 Investments.
The Credit Parties will not permit any Consolidated Party to make
Investments in or to any Person, except for Permitted Investments.
8.7 Restricted Payments.
The Credit Parties will not permit any Consolidated Party to, directly or
indirectly, declare, order, make or set apart any sum for or pay any Restricted
Payment, except (a) to make dividends payable solely in the same class of
Capital Stock of such Person, (b) to make dividends or other distributions
payable to the Borrower (directly or indirectly through Subsidiaries), (c) the
redemption of Capital Stock of the Borrower from any officer or director of the
Borrower or any of its Subsidiaries provided that the aggregate price paid for
all such shares purchased during the term of this Credit Agreement shall not
exceed $250,000, (d) the Borrower may make distributions to the Parent in an
amount necessary to pay interest on the Subordinated Debt and (e) so long as no
Default or Event of Default exists prior to and after giving effect to such
transaction, the Parent may repurchase shares of its Capital Stock and make cash
dividends to its shareholders, provided, that after giving effect to any such
transaction on a pro forma basis, the Senior Leverage Ratio is less than 1.0 to
1.0 and the Credit Parties are in compliance with the Fixed Charge Coverage
Ratio as required by Section 7.11(i) (as demonstrated in an officer's
certificate in a form satisfactory to the Administrative Agent).
8.8 Transactions with Affiliates.
The Credit Parties will not permit any Consolidated Party to enter into or
permit to exist any transaction or series of transactions with any officer,
director, shareholder, Subsidiary or Affiliate of such Person other than (a)
normal compensation and reimbursement of expenses of officers and directors and
(b) except as otherwise specifically limited in this Credit Agreement, other
transactions which are entered into in the ordinary course of such Person's
business on terms and conditions substantially as favorable to such Person as
would be obtainable by it in a comparable arms-length transaction with a Person
other than an officer, director, shareholder, Subsidiary or Affiliate.
8.10 Fiscal Year; Organizational Documents.
The Credit Parties will not permit any Consolidated Party to (a) amend,
modify or change its articles of incorporation (or corporate charter or other
similar organizational document) or bylaws (or other similar document) in a
manner materially adverse to the Lenders or (b) change its fiscal year; it being
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understood and agreed that any amendment to the articles of incorporation of
PRGRS, Inc. that provides the books and records of such Credit Party will be
maintained in the Cayman Islands or Bermuda shall not be deemed to be materially
adverse to the Lenders. The Credit Parties will promptly deliver to the
Administrative Agent copies of any amendments, modifications and changes to the
articles of incorporation (or corporate charter or other similar organizational
document) or bylaws (or other similar document) of any Consolidated Party.
8.11 Limitation on Restricted Actions.
The Credit Parties will not permit any Consolidated Party to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any such Person to (a) pay
dividends or make any other distributions to any Credit Party on its Capital
Stock or with respect to any other interest or participation in, or measured by,
its profits, (b) pay any Indebtedness or other obligation owed to any Credit
Party, (c) make loans or advances to any Credit Party, (d) sell, lease or
transfer any of its properties or assets to any Credit Party, or (e) act as a
Guarantor and pledge its assets pursuant to the Credit Documents or any
renewals, refinancings, exchanges, refundings or extension thereof, except (in
respect of any of the matters referred to in clauses (a)-(d) above) for such
encumbrances or restrictions existing under or by reason of (i) this Credit
Agreement and the other Credit Documents, (ii) applicable law, (iii) the
Indenture or (iv) any document or instrument governing Indebtedness incurred
pursuant to Section 8.1(c), provided that any such restriction contained therein
relates only to the asset or assets constructed or acquired in connection
therewith.
8.12 Ownership of Subsidiaries.
Notwithstanding any other provisions of this Credit Agreement to the
contrary, the Credit Parties will not permit any Consolidated Party to (i)
permit any Person (other than the Parent or any Wholly-Owned Subsidiary of the
Parent) to own any Capital Stock of any Subsidiary of the Parent, (ii) permit
any Subsidiary of the Parent to issue Capital Stock (except to the Parent or to
a Wholly-Owned Subsidiary of the Parent), (iii) permit, create, incur, assume or
suffer to exist any Lien thereon, in each case except (A) to qualify directors
where required by applicable law or to satisfy other requirements of applicable
law with respect to the ownership of Capital Stock of Foreign Subsidiaries or
(B) for Permitted Liens and (iv) notwithstanding anything to the contrary
contained in clause (ii) above, permit any Subsidiary of the Parent to issue any
shares of preferred Capital Stock.
8.13 Sale Leasebacks.
Except for transactions permitted by Section 8.1(c) hereof, the Credit
Parties will not permit any Consolidated Party to, directly or indirectly,
become or remain liable as lessee or as guarantor or other surety with respect
to any lease, whether an Operating Lease or a Capital Lease, of any Property
(whether real, personal or mixed), whether now owned or hereafter acquired, (a)
which such Consolidated Party has sold or transferred or is to sell or transfer
to a Person which is not a Consolidated Party or (b) which such Consolidated
Party intends to use for substantially the same purpose as any other Property
which has been sold or is to be sold or transferred by such Consolidated Party
to another Person which is not a Consolidated Party in connection with such
lease.
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8.14 Capital Expenditures.
The Credit Parties will not permit aggregate Consolidated Capital
Expenditures for any fiscal year to exceed $25 million.
8.15 No Further Negative Pledges.
The Credit Parties will not permit any Consolidated Party to enter into,
assume or become subject to any agreement prohibiting or otherwise restricting
the creation or assumption of any Lien upon its properties or assets, whether
now owned or hereafter acquired, or requiring the grant of any security for such
obligation if security is given for some other obligation, except (a) pursuant
to this Credit Agreement and the other Credit Documents, (b) pursuant to the
Indenture or (c) pursuant to any document or instrument governing Indebtedness
incurred pursuant to Section 8.1(c), provided that any such restriction
contained therein relates only to the asset or assets constructed or acquired in
connection therewith.
8.16 Limitation on Foreign EBITDA.
The Credit Parties will not permit the aggregate portion of Consolidated
EBITDA for any period attributable to First Tier Foreign Subsidiaries which are
not Material Foreign Subsidiaries to exceed 10% of Consolidated EBITDA for such
period.
8.17 Subordinated Debt.
No Credit Party will, nor will it permit any of its Subsidiaries to (a)
make or offer to make any principal payments with respect to the Subordinated
Debt, (b) redeem or offer to redeem any of the Subordinated Debt, (c) deposit
any funds intended to discharge the Subordinated Debt or (d) amend or modify the
Subordinated Debt in any manner that would adversely affect the Lenders without
the prior written consent of the Required Lenders.
SECTION 9
EVENTS OF DEFAULT
9.1 Events of Default.
An Event of Default shall exist upon the occurrence of any of the following
specified events (each an "Event of Default"):
(a) Payment. Any Credit Party shall default, and such default shall
continue for five (5) or more Business Days, in the payment when due of any
principal of or interest on the Loans or on any reimbursement obligations
arising from drawings under Letters of Credit, or of any Fees or other
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amounts owing hereunder, under any of the other Credit Documents or in
connection herewith or therewith; or
(b) Representations. Any representation, warranty or statement made or
deemed to be made by any Credit Party herein, in any of the other Credit
Documents, or in any statement or certificate delivered or required to be
delivered pursuant hereto or thereto shall prove untrue in any material
respect on the date as of which it was deemed to have been made; or
(c) Covenants. Any Credit Party shall
(i) default in the due performance or observance of any term,
covenant or agreement contained in Sections 7.2, 7.4, 7.9, 7.11, 7.12,
7.14 or 8.1 through 8.17, inclusive;
(ii) default in the due performance or observance of any term,
covenant or agreement contained in Sections 7.1(a), (b), (c), (d) or
(e) and such default shall continue unremedied for a period of at
least 5 days after the earlier of a responsible officer of a Credit
Party becoming aware of such default or notice thereof by the
Administrative Agent; or
(iii) default in the due performance or observance by it of any
term, covenant or agreement (other than those referred to in
subsections (a), (b), (c)(i) or (c)(ii) of this Section 9.1) contained
in this Credit Agreement and such default shall continue unremedied
for a period of at least 30 days after the earlier of a responsible
officer of a Credit Party becoming aware of such default or notice
thereof by the Administrative Agent; or
(d) Other Credit Documents. (i) Any Credit Party shall default in the
due performance or observance of any term, covenant or agreement in any of
the other Credit Documents (subject to applicable grace or cure periods, if
any), or (ii) except as a result of or in connection with a merger of a
Subsidiary permitted under Section 8.4, any Credit Document shall fail to
be in full force and effect or to give the Administrative Agent and/or the
Lenders the Liens, rights, powers and privileges purported to be created
thereby, or any Credit Party shall so state in writing; or
(e) Guaranties. Except as the result of or in connection with a merger
of a Subsidiary permitted under Section 8.4, the guaranty given by any
Guarantor hereunder (including any Additional Credit Party) or any
provision thereof shall cease to be in full force and effect, or any
Guarantor (including any Additional Credit Party) hereunder or any Person
acting by or on behalf of such Guarantor shall deny or disaffirm such
Guarantor's obligations under such guaranty, or any Guarantor shall default
in the due performance or observance of any term, covenant or agreement on
its part to be performed or observed pursuant to any guaranty (subject to
applicable grace and cure periods, if any); or
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(f) Bankruptcy, etc. Any Bankruptcy Event shall occur with respect to
any Consolidated Party; or
(g) Defaults under Other Agreements.
(i) Any Consolidated Party shall default in the performance or
observance (beyond the applicable grace period with respect thereto,
if any) of any material obligation or condition of any contract or
lease material to the Consolidated Parties, taken as a whole; or
(ii) With respect to any Indebtedness (other than Indebtedness
outstanding under this Credit Agreement) in excess of $1,000,000 in
the aggregate for the Consolidated Parties taken as a whole
(including, without limitation, the Indebtedness under the NatWest
Credit Agreement), (A) any Consolidated Party shall (1) default in any
payment (beyond the applicable grace period with respect thereto, if
any) with respect to any such Indebtedness, or (2) the occurrence and
continuance of a default in the observance or performance relating to
such Indebtedness or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event or
condition shall occur or condition exist, the effect of which default
or other event or condition is to cause, or permit, the holder or
holders of such Indebtedness (or trustee or agent on behalf of such
holders) to cause (determined without regard to whether any notice or
lapse of time is required), any such Indebtedness to become due prior
to its stated maturity; or (B) any such Indebtedness shall be declared
due and payable, or required to be prepaid other than by a regularly
scheduled required prepayment, prior to the stated maturity thereof;
or
(h) Judgments. One or more judgments or decrees shall be entered
against one or more of the Consolidated Parties involving a liability of
$1,000,000 or more in the aggregate (to the extent not paid or fully
covered by insurance provided by a carrier who has acknowledged coverage
and has the ability to perform) and any such judgments or decrees shall not
have been vacated, discharged or stayed or bonded pending appeal within 30
days from the entry thereof; or
(i) ERISA. Any of the following events or conditions, if such event or
condition could have a Material Adverse Effect: (i) any "accumulated
funding deficiency," as such term is defined in Section 302 of ERISA and
Section 412 of the Code, whether or not waived, shall exist with respect to
any Plan, or any lien shall arise on the assets of any Consolidated Party
or any ERISA Affiliate in favor of the PBGC or a Plan; (ii) an ERISA Event
shall occur with respect to a Single Employer Plan, which is, in the
reasonable opinion of the Administrative Agent, likely to result in the
termination of such Plan for purposes of Title IV of ERISA; (iii) an ERISA
Event shall occur with respect to a Multiemployer Plan or Multiple Employer
Plan, which is, in the reasonable opinion of the Administrative Agent,
likely to result in (A) the termination of such Plan for purposes of Title
IV of ERISA, or (B) any Consolidated Party or any ERISA Affiliate incurring
any liability in connection with a withdrawal from, reorganization of
(within the meaning of Section 4241 of ERISA), or insolvency or (within the
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meaning of Section 4245 of ERISA) such Plan; or (iv) any prohibited
transaction (within the meaning of Section 406 of ERISA or Section 4975 of
the Code) or breach of fiduciary responsibility shall occur which may
subject any Consolidated Party or any ERISA Affiliate to any liability
under Sections 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of the
Code, or under any agreement or other instrument pursuant to which any
Consolidated Party or any ERISA Affiliate has agreed or is required to
indemnify any person against any such liability;
(j) Ownership. There shall occur a Change of Control; or
(j) Subordinated Debt. There shall occur an Event of Default under,
and as defined in, the Indenture.
9.2 Acceleration; Remedies.
Upon the occurrence of an Event of Default, and at any time thereafter
unless and until such Event of Default has been waived by the requisite Lenders
(pursuant to the voting requirements of Section 11.6) or cured to the
satisfaction of the requisite Lenders in their reasonable discretion (pursuant
to the voting procedures in Section 11.6), the Administrative Agent shall, upon
the request and direction of the Required Lenders, by written notice to the
Credit Parties, take any of the following actions:
(a) Termination of Commitments. Declare the Commitments terminated
whereupon the Commitments shall be immediately terminated.
(b) Acceleration. Declare the unpaid principal of and any accrued
interest in respect of all Loans, any reimbursement obligations arising
from drawings under Letters of Credit and any and all other indebtedness or
obligations of any and every kind owing by the Credit Parties to the
Administrative Agent and/or any of the Lenders hereunder to be due
whereupon the same shall be immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Credit Parties.
(c) Cash Collateral. Direct the Credit Parties to pay (and the Credit
Parties agree that upon receipt of such notice, or upon the occurrence of
an Event of Default under Section 9.1(f), they will immediately pay) to the
Administrative Agent additional cash, to be held by the Administrative
Agent, for the benefit of the Lenders, in a cash collateral account as
additional security for the LOC Obligations in respect of subsequent
drawings under all then outstanding Letters of Credit in an amount equal to
the maximum aggregate amount which may be drawn under all Letters of
Credits then outstanding.
(d) Enforcement of Rights. Enforce any and all rights and interests
created and existing under the Credit Documents including, without
limitation, all rights and remedies existing under the Collateral
Documents, all rights and remedies against a Guarantor and all rights of
set-off.
Notwithstanding the foregoing, if an Event of Default specified in Section
9.1(f) shall occur with respect to the Borrower, then the Commitments shall
automatically terminate and all Loans, all reimbursement obligations arising
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from drawings under Letters of Credit, all accrued interest in respect thereof,
all accrued and unpaid Fees and other indebtedness or obligations owing to the
Administrative Agent and/or any of the Lenders hereunder automatically shall
immediately become due and payable without the giving of any notice or other
action by the Administrative Agent or the Lenders.
SECTION 10
AGENCY PROVISIONS
10.1 Appointment and Authorization of Administrative Agent.
(a) Each Lender hereby irrevocably (subject to Section 10.9) appoints,
designates and authorizes the Administrative Agent to take such action on
its behalf under the provisions of this Credit Agreement and each other
Credit Document and to exercise such powers and perform such duties as are
expressly delegated to it by the terms of this Credit Agreement or any
other Credit Document, together with such powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary contained
elsewhere herein or in any other Credit Document, the Administrative Agent
shall not have any duties or responsibilities, except those expressly set
forth herein, nor shall the Administrative Agent have or be deemed to have
any fiduciary relationship with any Lender or participant, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Credit Agreement or any other Credit Document or
otherwise exist against the Administrative Agent. Without limiting the
generality of the foregoing sentence, the use of the term "agent" herein
and in the other Credit Documents with reference to the Administrative
Agent is not intended to connote any fiduciary or other implied (or
express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is
intended to create or reflect only an administrative relationship between
independent contracting parties.
(b) The Issuing Lender shall act on behalf of the Lenders with respect
to any Letters of Credit issued by it and the documents associated
therewith until such time (and except for so long) as the Administrative
Agent may agree at the request of the Required Lenders to act for the
Issuing Lender with respect thereto; provided, however, that the Issuing
Lender shall have all of the benefits and immunities (i) provided to the
Administrative Agent in this Section 10 with respect to any acts taken or
omissions suffered by the Issuing Lender in connection with Letters of
Credit issued by it or proposed to be issued by it and the application and
agreements for letters of credit pertaining to the Letters of Credit as
fully as if the term "Agent" as used in this Section 10 included the
Issuing Lender with respect to such acts or omissions, and (ii) as
additionally provided herein with respect to the Issuing Lender.
10.2 Delegation of Duties.
The Administrative Agent may execute any of its duties under this Credit
Agreement or any other Credit Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel and other
consultants or experts concerning all matters pertaining to such duties. The
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Administrative Agent shall not be responsible for the negligence or misconduct
of any agent or attorney-in-fact that it selects in the absence of gross
negligence or willful misconduct.
10.3 Liability of Administrative Agent.
No Agent-Related Person shall (a) be liable for any action taken or omitted
to be taken by any of them under or in connection with this Credit Agreement or
any other Credit Document or the transactions contemplated hereby (except for
its own gross negligence or willful misconduct in connection with its duties
expressly set forth herein), or (b) be responsible in any manner to any Lender
or participant for any recital, statement, representation or warranty made by
any Credit Party or any officer thereof, contained herein or in any other Credit
Document, or in any certificate, report, statement or other document referred to
or provided for in, or received by the Administrative Agent under or in
connection with, this Credit Agreement or any other Credit Document, or the
validity, effectiveness, genuineness, enforceability or sufficiency of this
Credit Agreement or any other Credit Document, or for any failure of any Credit
Party or any other party to any Credit Document to perform its obligations
hereunder or thereunder. No Agent-Related Person shall be under any obligation
to any Lender or participant to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this Credit
Agreement or any other Credit Document, or to inspect the Facilities, books or
records of any Credit Party or any Affiliate thereof.
10.4 Reliance by Administrative Agent.
(a) The Administrative Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, communication, signature,
resolution, representation, notice, consent, certificate, affidavit,
letter, telegram, facsimile, telex or telephone message, statement or other
document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons, and upon
advice and statements of legal counsel (including counsel to any Credit
Party), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under any Credit Document unless it
shall first receive such advice or concurrence of the Required Lenders as
it deems appropriate and, if it so requests, it shall first be indemnified
to its satisfaction by the Lenders against any and all liability and
expense which may be incurred by it by reason of taking or continuing to
take any such action. The Administrative Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Credit
Agreement or any other Credit Document in accordance with a request or
consent of the Required Lenders or all the Lenders, if required hereunder,
and such request and any action taken or failure to act pursuant thereto
shall be binding upon all the Lenders and participants. Where this Credit
Agreement expressly permits or prohibits an action unless the Required
Lenders otherwise determine, the Administrative Agent shall, and in all
other instances, the Administrative Agent may, but shall not be required
to, initiate any solicitation for the consent or a vote of the Lenders.
(b) For purposes of determining compliance with the conditions
specified in Section 5.1, each Lender that has signed this Credit Agreement
shall be deemed to have consented to, approved or accepted or to be
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satisfied with, each document or other matter either sent by the
Administrative Agent to such Lender for consent, approval, acceptance or
satisfaction, or required thereunder to be consented to or approved by or
acceptable or satisfactory to a Lender.
10.5 Notice of Default.
The Administrative Agent shall not be deemed to have knowledge or notice of
the occurrence of any Default or Event of Default, except with respect to
defaults in the payment of principal, interest and fees required to be paid to
the Administrative Agent for the account of the Lenders, unless the
Administrative Agent shall have received written notice from a Lender or the
Borrower referring to this Credit Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default." The
Administrative Agent will notify the Lenders of its receipt of any such notice.
The Administrative Agent shall take such action with respect to such Default or
Event of Default as may be directed by the Required Lenders in accordance with
Section 9; provided, however, that unless and until the Administrative Agent has
received any such direction, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable or in the best
interest of the Lenders.
10.6 Credit Decision; Disclosure of Information by Administrative Agent.
Each Lender acknowledges that no Agent-Related Person has made any
representation or warranty to it, and that no act by the Administrative Agent
hereinafter taken, including any consent to and acceptance of any assignment or
review of the affairs of any Credit Party or any Affiliate thereof, shall be
deemed to constitute any representation or warranty by any Agent-Related Person
to any Lender as to any matter, including whether Agent-Related Persons have
disclosed material information in their possession. Each Lender represents to
the Administrative Agent that it has, independently and without reliance upon
any Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Credit Parties and their respective Subsidiaries, and
all applicable bank or other regulatory Laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Credit
Agreement and to extend credit to the Borrower and the other Credit Parties
hereunder. Each Lender also represents that it will, independently and without
reliance upon any Agent-Related Person and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Credit Agreement and the other Credit Documents, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Borrower and the other Credit Parties. Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the Administrative Agent herein, the Administrative Agent shall not
have any duty or responsibility to provide any Lender with any credit or other
information concerning the business, prospects, operations, property, financial
and other condition or creditworthiness of any of the Credit Parties or any of
their respective Affiliates which may come into the possession of any
Agent-Related Person.
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10.7 Indemnification of Administrative Agent.
Whether or not the transactions contemplated hereby are consummated, the
Lenders shall indemnify upon demand each Agent-Related Person (to the extent not
reimbursed by or on behalf of any Credit Party and without limiting the
obligation of any Credit Party to do so), pro rata, and hold harmless each
Agent-Related Person from and against any and all Indemnified Liabilities
incurred by it; provided, however, that no Lender shall be liable for the
payment to any Agent-Related Person of any portion of such Indemnified
Liabilities resulting from such Person's gross negligence or willful misconduct;
provided, however, that no action taken in accordance with the directions of the
Required Lenders shall be deemed to constitute gross negligence or willful
misconduct for purposes of this Section. Without limitation of the foregoing,
each Lender shall reimburse the Administrative Agent upon demand for its ratable
share of any costs or out-of-pocket expenses (including reasonable fees and
costs of counsel) incurred by the Administrative Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Credit
Agreement, any other Credit Document, or any document contemplated by or
referred to herein, to the extent that the Administrative Agent is not
reimbursed for such expenses by or on behalf of the Borrower. The undertaking in
this Section shall survive termination of the Commitments, the payment of all
Obligations hereunder and the resignation or replacement of the Administrative
Agent.
10.8 Administrative Agent in its Individual Capacity.
Bank of America and its Affiliates may make loans to, issue letters of
credit for the account of, accept deposits from, acquire equity interests in and
generally engage in any kind of banking, trust, financial advisory, underwriting
or other business with each of the Credit Parties and their respective
Affiliates as though Bank of America were not the Administrative Agent or the
Issuing Lender hereunder and without notice to or consent of the Lenders. The
Lenders acknowledge that, pursuant to such activities, Bank of America or its
Affiliates may receive information regarding any Credit Party or its Affiliates
(including information that may be subject to confidentiality obligations in
favor of such Credit Party or such Affiliate) and acknowledge that the
Administrative Agent shall be under no obligation to provide such information to
them. With respect to its Loans, Bank of America shall have the same rights and
powers under this Credit Agreement as any other Lender and may exercise such
rights and powers as though it were not the Administrative Agent or the Issuing
Lender, and the terms "Lender" and "Lenders" include Bank of America in its
individual capacity.
10.9 Successor Administrative Agent.
The Administrative Agent may resign as Administrative Agent upon 30 days'
notice to the Lenders and the Borrower. If the Administrative Agent resigns
under this Credit Agreement, the Required Lenders shall appoint from among the
Lenders a successor Administrative Agent for the Lenders which successor
Administrative Agent shall be consented to by the Borrower at all times other
than during the existence of an Event of Default (which consent of the Borrower
shall not be unreasonably withheld or delayed). If no successor Administrative
Agent is appointed prior to the effective date of the resignation of the
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Administrative Agent, the Administrative Agent may appoint, after consulting
with the Lenders and the Borrower, a successor Administrative Agent from among
the Lenders. Upon the acceptance of its appointment as successor Administrative
Agent hereunder, such successor Administrative Agent shall succeed to all the
rights, powers and duties of the retiring Administrative Agent and the term
"Administrative Agent" shall mean such successor Administrative Agent and the
retiring Administrative Agent's appointment, powers and duties as Administrative
Agent shall be terminated. After any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the provisions of this Section 10 and
Sections 11.4 and 11.9 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Agent under this Credit
Agreement. If no successor Administrative Agent has accepted appointment as
Administrative Agent by the date which is 30 days following a retiring
Administrative Agent's notice of resignation, the retiring Administrative
Agent's resignation shall nevertheless thereupon become effective and the
Lenders shall perform all of the duties of the Administrative Agent hereunder
until such time, if any, as the Required Lenders appoint a successor agent as
provided for above.
10.10 Other Agents; Lead Managers.
None of the Lenders identified on the facing page or signature pages of
this Credit Agreement as a "syndication agent," "documentation agent,"
"co-agent" or "lead manager" shall have any right, power, obligation, liability,
responsibility or duty under this Credit Agreement other than those applicable
to all Lenders as such. Without limiting the foregoing, none of the Lenders so
identified shall have or be deemed to have any fiduciary relationship with any
Lender. Each Lender acknowledges that it has not relied, and will not rely, on
any of the Lenders so identified in deciding to enter into this Credit Agreement
or in taking or not taking action hereunder.
SECTION 11
MISCELLANEOUS
11.1 Notices.
Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (a) when
delivered, (b) when transmitted via telecopy (or other facsimile device) to the
number set out below, (c) the Business Day following the day on which the same
has been delivered prepaid to a reputable national overnight air courier
service, or (d) the third Business Day following the day on which the same is
sent by certified or registered mail, postage prepaid, in each case to the
respective parties at the address, in the case of the Credit Parties and the
Administrative Agent, set forth below, and, in the case of the Lenders, set
forth on Schedule 2.1(a), or at such other address as such party may specify by
written notice to the other parties hereto:
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if to any Credit Party:
The Profit Recovery Group USA, Inc.
0000 Xxxxx Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Chief Financial Officer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
The Profit Recovery Group USA, Inc.
0000 Xxxxx Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: General Counsel
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
if to the Administrative Agent:
Bank of America, N.A.
Mailcode IL1-231-08-30
000 X. XxXxxxx Xx.
Xxxxxxx, XX 00000
Attn: Agency Services (Xxxxx Xxxxxxx)
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
Bank of America, N.A.
000 Xxxxxxxxx Xxxxxx, XX
00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
11.2 Right of Set-Off; Adjustments.
Upon the occurrence and during the continuance of any Event of Default,
each Lender (and each of its Affiliates) is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender (or any
of its Affiliates) to or for the credit or the account of any Credit Party
against any and all of the obligations of such Person now or hereafter existing
under this Credit Agreement, under the Notes, under any other Credit Document or
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otherwise, irrespective of whether such Lender shall have made any demand under
hereunder or thereunder and although such obligations may be unmatured. Each
Lender agrees promptly to notify any affected Credit Party after any such
set-off and application made by such Lender; provided, however, that the failure
to give such notice shall not affect the validity of such set-off and
application. The rights of each Lender under this Section 11.2 are in addition
to other rights and remedies (including, without limitation, other rights of
set-off) that such Lender may have.
11.3 Successors and Assigns.
(a) The provisions of this Credit Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors
and assigns permitted hereby, except that the Borrower may not assign or
otherwise transfer any of its rights or obligations hereunder without the
prior written consent of each Lender (and any attempted assignment or
transfer by the Borrower without such consent shall be null and void).
Nothing in this Credit Agreement, expressed or implied, shall be construed
to confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby and, to the extent expressly
contemplated hereby, the Indemnitees) any legal or equitable right, remedy
or claim under or by reason of this Credit Agreement.
(b) Any Lender may assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Credit Agreement
(including all or a portion of its Commitment and the Loans (including for
purposes of this subsection (b), participations in LOC Obligations) at the
time owing to it); provided that (i) except in the case of an assignment of
the entire remaining amount of the assigning Lender's Commitment and the
Loans at the time owing to it or in the case of an assignment to a Lender
or an Affiliate of a Lender, the aggregate amount of the Commitment (which
for this purpose includes Loans outstanding thereunder) subject to each
such assignment, determined as of the date the Assignment and Acceptance
with respect to such assignment is delivered to the Administrative Agent,
shall not be less than $5,000,000 unless each of the Administrative Agent
and, so long as no Event of Default has occurred and is continuing, the
Borrower otherwise consents (each such consent not to be unreasonably
withheld or delayed), (ii) each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender's rights and
obligations under this Credit Agreement with respect to the Loans or the
Commitment assigned, and (iii) the parties to each assignment shall execute
and deliver to the Administrative Agent an Assignment and Acceptance in
substantially the form of Exhibit 11.3(b), together with a processing and
recordation fee of $3,500. Subject to acceptance and recording thereof by
the Administrative Agent pursuant to subsection (c) of this Section, from
and after the effective date specified in each Assignment and Acceptance,
the Eligible Assignee thereunder shall be a party hereto and, to the extent
of the interest assigned by such Assignment and Acceptance, have the rights
and obligations of a Lender under this Credit Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Acceptance, be released from its obligations under this
Credit Agreement (and, in the case of an Assignment and Acceptance covering
all of the assigning Lender's rights and obligations under this Credit
Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 11.5 and 11.9). Upon request,
the Borrower shall execute and deliver new or replacement Notes to the
assigning Lender and the assignee Lender. Any assignment or transfer by a
95
Lender of rights or obligations under this Credit Agreement that does not
comply with this subsection shall be treated for purposes of this Credit
Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with subsection (d) of this Section.
(c) The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at its office in Charlotte, North
Carolina a copy of each Assignment and Acceptance delivered to it and a
register for the recordation of the names and addresses of the Lenders, and
the Commitments of, and principal amount of the Loans and LOC Obligations
owing to, each Lender pursuant to the terms hereof from time to time (the
"Register"). The entries in the Register shall be conclusive absent
manifest error, and the Borrower, the Administrative Agent and the Lenders
may treat each Person whose name is recorded in the Register pursuant to
the terms hereof as a Lender hereunder for all purposes of this Credit
Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower and any Lender, at any reasonable
time and from time to time upon reasonable prior notice.
(d) Any Lender may, without the consent of, or notice to, the Borrower
or the Administrative Agent, sell participations to one or more banks or
other entities (a "Participant") in all or a portion of such Lender's
rights and/or obligations under this Credit Agreement (including all or a
portion of its Commitment and/or the Loans (including such Lender's
participations in LOC Obligations) owing to it); provided that (i) such
Lender's obligations under this Credit Agreement shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the Borrower, the
Administrative Agent and the other Lenders shall continue to deal solely
and directly with such Lender in connection with such Lender's rights and
obligations under this Credit Agreement. Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that
such Lender shall retain the sole right to enforce this Credit Agreement
and to approve any amendment, modification or waiver of any provision of
this Credit Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant,
agree to any amendment, waiver or other modification that would (i)
postpone any date upon which any payment of money is scheduled to be paid
to such Participant (except for the waiver of a mandatory prepayment
required by Section 3.3(b) hereof), (ii) reduce the principal, interest,
fees or other amounts payable to such Participant or (iii) release all or
substantially all of the Guarantors from their obligations under the Credit
Documents. Subject to subsection (e) of this Section, the Borrower agrees
that each Participant shall be entitled to the benefits of Sections 3.6
through 3.12 inclusive to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to subsection (b) of this
Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 11.2 as though it were a Lender,
provided such Participant agrees to be subject to Section 3.14 as though it
were a Lender.
(e) A Participant shall not be entitled to receive any greater payment
under Section 3.6, 3.9 or 3.11 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is
made with the Borrower's prior written consent. A Participant that would be
96
a Foreign Lender if it were a Lender shall not be entitled to the benefits
of Section 3.11 unless the Borrower is notified of the participation sold
to such Participant and such Participant agrees, for the benefit of the
Borrower, to comply with Section 3.11(d) as though it were a Lender.
(f) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Credit Agreement (including
under its Notes, if any) to secure obligations of such Lender, including
any pledge or assignment to secure obligations to a Federal Reserve Bank;
provided that no such pledge or assignment shall release a Lender from any
of its obligations hereunder or substitute any such pledgee or assignee for
such Lender as a party hereto.
(g) Notwithstanding anything to the contrary contained herein, if at
any time Bank of America assigns all of its Commitment and Loans pursuant
to subsection (b) above, Bank of America may, upon 30 days' notice to the
Borrower and the Lenders, resign as Issuing Lender. In the event of any
such resignation as Issuing Lender, the Borrower shall be entitled to
appoint from among the Lenders a successor Issuing Lender hereunder;
provided, however, that no failure by the Borrower to appoint any such
successor shall affect the resignation of Bank of America as Issuing
Lender. Bank of America shall retain all the rights and obligations of the
Issuing Lender hereunder with respect to all Letters of Credit outstanding
as of the effective date of its resignation as Issuing Lender and all LOC
Obligations with respect thereto (including the right to require the
Lenders to make Base Rate Loans or fund participations in Letters of Credit
pursuant to Section 2.2).
11.4 No Waiver; Remedies Cumulative.
No failure or delay on the part of the Administrative Agent or any Lender
in exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between the Administrative Agent or any Lender
and any of the Credit Parties shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege hereunder or under
any other Credit Document preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder or thereunder. The
rights and remedies provided herein are cumulative and not exclusive of any
rights or remedies which the Administrative Agent or any Lender would otherwise
have. No notice to or demand on any Credit Party in any case shall entitle the
Credit Parties to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Administrative Agent
or the Lenders to any other or further action in any circumstances without
notice or demand.
11.5 Expenses; Indemnification.
(a) The Credit Parties jointly and severally agree to pay on demand
all reasonable costs and expenses of the Administrative Agent in connection
with the syndication, preparation, execution, delivery, administration,
modification, and amendment of this Credit Agreement, the other Credit
Documents, and the other documents to be delivered hereunder, including,
without limitation, the reasonable fees and expenses of counsel for the
Administrative Agent with respect thereto and with respect to advising the
Administrative Agent as to its rights and responsibilities under the Credit
Documents. The Credit Parties further jointly and severally agree to pay on
97
demand all reasonable costs and expenses of the Administrative Agent and
the Lenders, if any (including, without limitation, reasonable attorneys'
fees and expenses), in connection with the enforcement (whether through
negotiations, legal proceedings, or otherwise) of the Credit Documents and
the other documents to be delivered hereunder.
(b) Whether or not the transactions contemplated hereby are
consummated, the Borrower agrees to indemnify, save and hold harmless each
Agent-Related Person, each Lender and their respective Affiliates,
directors, officers, employees, counsel, agents and attorneys-in-fact
(collectively the "Indemnitees") from and against: (a) any and all claims,
demands, actions or causes of action that are asserted against any
Indemnitee by any Person (other than the Administrative Agent or any
Lender) relating directly or indirectly to a claim, demand, action or cause
of action that such Person asserts or may assert against any Credit Party,
any Affiliate of any Credit Party or any of their respective officers or
directors; (b) any and all claims, demands, actions or causes of action
that may at any time (including at any time following repayment of the
Obligations and the resignation or removal of the Administrative Agent or
the replacement of any Lender) be asserted or imposed against any
Indemnitee, arising out of or relating to, the Credit Documents, any
predecessor Credit Documents, the Commitments, the use or contemplated use
of the proceeds of any Extension of Credit, or the relationship of any
Credit Party, the Administrative Agent and the Lenders under this Credit
Agreement or any other Credit Document; (c) any administrative or
investigative proceeding by any Governmental Authority arising out of or
related to a claim, demand, action or cause of action described in
subsection (a) or (b) above; and (d) any and all liabilities (including
liabilities under indemnities), losses, costs or expenses (including
reasonable fees and costs of counsel) that any Indemnitee suffers or incurs
as a result of the assertion of any foregoing claim, demand, action, cause
of action or proceeding, or as a result of the preparation of any defense
in connection with any foregoing claim, demand, action, cause of action or
proceeding, in all cases, whether or not arising out of the negligence of
an Indemnitee, and whether or not an Indemnitee is a party to such claim,
demand, action, cause of action or proceeding (all the foregoing,
collectively, the "Indemnified Liabilities"); provided that no Indemnitee
shall be entitled to indemnification for any claim caused by its own gross
negligence or willful misconduct or for any loss asserted against it by
another Indemnitee. The agreements in this Section shall survive the
termination of the Commitments and repayment of all the other Credit Party
Obligations.
(c) Without prejudice to the survival of any other agreement of the
Credit Parties hereunder, the agreements and obligations of the Credit
Parties contained in this Section 11.5 shall survive the repayment of the
Loans, LOC Obligations and other obligations under the Credit Documents and
the termination of the Commitments hereunder.
11.6 Amendments, Waivers and Consents.
Neither this Credit Agreement nor any other Credit Document nor any of the
terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is in
writing entered into by, or approved in writing by, the Required Lenders and the
Borrower, provided, however, that:
98
(i) without the consent of each Lender affected thereby, neither this
Credit Agreement nor any other Credit Document may be amended to
(a) extend the final maturity of any Loan or of any reimbursement
obligation, or any portion thereof, arising from drawings under
Letters of Credit,
(b) reduce the rate or extend the time of payment of interest
(other than as a result of waiving the applicability of any
post-default increase in interest rates) thereon or Fees hereunder,
(c) reduce or waive the principal amount of any Loan or of any
reimbursement obligation, or any portion thereof, arising from
drawings under Letters of Credit,
(d) increase the Commitment of a Lender over the amount thereof
in effect (it being understood and agreed that a waiver of any Default
or Event of Default or mandatory reduction in the Commitments shall
not constitute a change in the terms of any Commitment of any Lender),
(e) release the Borrower or substantially all of the other Credit
Parties from its or their obligations under the Credit Documents,
(f) release all or substantially all of the Collateral (provided
that the Administrative Agent may, without consent from any other
Lender, release any Collateral that is sold or transferred by a Credit
Party in conformance with Section 8.5);
(g) amend, modify or waive any provision of this Section 11.6 or
Section 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14, 3.15,
9.1(a), 11.2, 11.3, 11.5 or 11.9,
(h) reduce any percentage specified in, or otherwise modify, the
definition of Required Lenders, or
(i) consent to the assignment or transfer by the Borrower or all
or substantially all of the other Credit Parties of any of its or
their rights and obligations under (or in respect of) the Credit
Documents except as permitted thereby;
(ii) without the consent of the Administrative Agent, no provision of
Section 10 may be amended; and
(iii) without the consent of the Issuing Lender, no provision of
Section 2.2 may be amended, and without the consent of the Swingline
Lender, no provision of Section 2.4 may be amended.
99
Notwithstanding the fact that the consent of all the Lenders is
required in certain circumstances as set forth above, (x) each Lender
is entitled to vote as such Lender sees fit on any bankruptcy
reorganization plan that affects the Loans, and each Lender
acknowledges that the provisions of Section 1126(c) of the Bankruptcy
Code supersedes the unanimous consent provisions set forth herein and
(y) the Required Lenders may consent to allow a Credit Party to use
cash collateral in the context of a bankruptcy or insolvency
proceeding.
11.7 Counterparts.
This Credit Agreement may be executed in any number of counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall constitute one and the same instrument. It shall not be necessary in
making proof of this Credit Agreement to produce or account for more than one
such counterpart for each of the parties hereto. Delivery by facsimile by any of
the parties hereto of an executed counterpart of this Credit Agreement shall be
as effective as an original executed counterpart hereof and shall be deemed a
representation that an original executed counterpart hereof will be delivered.
11.8 Headings.
The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Credit Agreement.
11.9 Survival.
All indemnities set forth herein, including, without limitation, in Section
2.2(i), 3.11, 3.12, 10.5 or 11.5 shall survive the execution and delivery of
this Credit Agreement, the making of the Loans, the issuance of the Letters of
Credit, the repayment of the Loans, LOC Obligations and other obligations under
the Credit Documents and the termination of the Commitments hereunder, and all
representations and warranties made by the Credit Parties herein shall survive
delivery of the Notes and the making of the Loans hereunder.
11.10 Governing Law; Submission to Jurisdiction; Venue.
(a) THIS CREDIT AGREEMENT AND, UNLESS OTHERWISE EXPRESSLY PROVIDED
THEREIN, THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA. Any legal
action or proceeding with respect to this Credit Agreement or any other
Credit Document may be brought in the courts of the State of Georgia, or of
the United States for the Northern District of Georgia, Atlanta Division,
and, by execution and delivery of this Credit Agreement, each of the Credit
Parties hereby irrevocably accepts for itself and in respect of its
property, generally and unconditionally, the nonexclusive jurisdiction of
such courts. Each of the Credit Parties further irrevocably consents to the
service of process out of any of the aforementioned courts in any such
100
action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to it at the address set out for notices
pursuant to Section 11.1, such service to become effective three (3) days
after such mailing. Nothing herein shall affect the right of the
Administrative Agent or any Lender to serve process in any other manner
permitted by law or to commence legal proceedings or to otherwise proceed
against any Credit Party in any other jurisdiction.
(b) Each of the Credit Parties hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with this
Credit Agreement or any other Credit Document brought in the courts
referred to in subsection (a) above and hereby further irrevocably waives
and agrees not to plead or claim in any such court that any such action or
proceeding brought in any such court has been brought in an inconvenient
forum.
(c) TO THE EXTENT PERMITTED BY LAW, EACH OF THE ADMINISTRATIVE AGENT,
THE LENDERS, EACH OF THE CREDIT PARTIES HEREBY IRREVOCABLY WAIVES ALL RIGHT
TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF
OR RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR
THE TRANSACTIONS CONTEMPLATED HEREBY.
11.11 Severability.
If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
11.12 Entirety.
This Credit Agreement together with the other Credit Documents represent
the entire agreement of the parties hereto and thereto, and supersede all prior
agreements and understandings, oral or written, if any, including any commitment
letters or correspondence relating to the Credit Documents or the transactions
contemplated herein and therein.
11.13 Binding Effect; Termination.
(a) This Credit Agreement shall become effective at such time when all
of the conditions set forth in Section 5.1 have been satisfied or waived by
the Lenders and it shall have been executed by each Credit Party and the
Administrative Agent, and the Administrative Agent shall have received
copies hereof (telefaxed or otherwise) which, when taken together, bear the
signatures of each Lender, and thereafter this Credit Agreement shall be
binding upon and inure to the benefit of each Credit Party, the
Administrative Agent and each Lender and their respective successors and
assigns.
(b) The term of this Credit Agreement shall be until no Loans, LOC
Obligations or any other amounts payable hereunder or under any of the
other Credit Documents shall remain outstanding, no Letters of Credit shall
101
be outstanding, all of the Credit Party Obligations have been irrevocably
satisfied in full and all of the Commitments hereunder shall have expired
or been terminated.
11.14 Confidentiality.
Each of the Administrative Agent and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its Affiliates' directors, officers, employees
and agents, including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential); (b) to the extent requested by any regulatory
authority provided that the Administrative Agent or such Lender shall, if
practicable, provide the Borrower with prior notice of such disclosure; (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process provided that the Administrative Agent or such Lender
shall, if practicable, provide the Borrower with prior notice of such
disclosure; (d) to any other party to this Credit Agreement; (e) in connection
with the exercise of any remedies hereunder or any suit, action or proceeding
relating to this Credit Agreement or the enforcement of rights hereunder; (f)
subject to an agreement containing provisions substantially the same as those of
this Section, to (i) any Eligible Assignee of or Participant in, or any
prospective Eligible Assignee of or Participant in, any of its rights or
obligations under this Credit Agreement or (ii) any direct or indirect
contractual counterparty or prospective counterparty (or such contractual
counterparty's or prospective counterparty's professional advisor) to any credit
derivative transaction relating to obligations of the Borrower; (g) with the
consent of the Borrower; (h) to the extent such Information (i) becomes publicly
available other than as a result of a breach of this Section or (ii) becomes
available to the Administrative Agent or any Lender on a nonconfidential basis
from a source other than the Borrower; or (i) to the National Association of
Insurance Commissioners or any other similar organization or any nationally
recognized rating agency that requires access to information about a Lender's or
its Affiliates' investment portfolio in connection with ratings issued with
respect to such Lender or its Affiliates. For the purposes of this Section,
"Information" means all information received from the Credit Parties relating to
the Credit Parties or their businesses, other than any such information that is
available to the Administrative Agent or any Lender on a nonconfidential basis
prior to disclosure by the Credit Parties; provided that, in the case of
information received from the Credit Parties after the date hereof, such
information is clearly identified at the time of delivery as confidential.
11.15 Use of Sources.
Each of the Lenders hereby represents and warrants to the Borrower that at
least one of the following statements is an accurate representation as to the
source of funds to be used by such Lender in connection with the financing
hereunder:
(a) no part of such funds constitutes assets allocated to any separate
account maintained by such Lender in which any employee benefit plan (or
its related trust) has any interest;
102
(b) to the extent that any part of such funds constitutes assets
allocated to any separate account maintained by such Lender, such Lender
has disclosed to the Borrower the name of each employee benefit plan whose
assets in such account exceed 10% of the total assets of such account as of
the date of such purchase (and, for purposes of this subsection (b), all
employee benefit plans maintained by the same employer or employee
organization are deemed to be a single plan);
(c) to the extent that any part of such funds constitutes assets of an
insurance company's general account, such insurance company has complied
with all of the requirements of the regulations issued under Section
401(c)(1)(A) of ERISA; or
(d) such funds constitute assets of one or more specific benefit plans
which such Lender has identified in writing to the Borrower.
As used in this Section 11.15, the terms "employee benefit plan" and "separate
account" shall have the respective meanings assigned to such terms in Section 3
of ERISA.
11.16 Conflict.
To the extent that there is a conflict or inconsistency between any
provision hereof, on the one hand, and any provision of any Credit Document, on
the other hand, this Credit Agreement shall control.
[Signature Pages to Follow]
103
Each of the parties hereto has caused a counterpart of this Credit
Agreement to be duly executed and delivered as of the date first above written.
BORROWER: THE PROFIT RECOVERY GROUP USA, INC.,
-------- a Georgia corporation
By: /s/ Xxxxxx X. Xxxxx, Xx.
----------------------------------------
Name: Xxxxxx X. Xxxxx, Xx.
Title: Executive Vice President - Finance,
Chief Financial Officer and Treasurer
GUARANTORS: THE PROFIT RECOVERY GROUP INTERNATIONAL, INC.,
---------- a Georgia corporation
By: /s/ Xxxxxx X. Xxxxx, Xx.
----------------------------------------
Name: Xxxxxx X. Xxxxx, Xx.
Title: Executive Vice President - Finance,
Chief Financial Officer and Treasurer
PRGFS, INC.,
PRGLS, INC.,
PRGRS, INC.,
each a Delaware corporation
By: /s/ Xxxxxx X. Xxxxx, Xx.
----------------------------------------
Name: Xxxxxx X. Xxxxx, Xx.
Title: Executive Vice President - Finance
PRG, INC.,
a Georgia corporation
By: /s/ Xxxxxx X. Xxxxx, Xx.
----------------------------------------
Name: Xxxxxx X. Xxxxx, Xx.
Title: Executive Vice President - Finance
GUARANTORS: THE PROFIT RECOVERY GROUP U.K., INC.,
---------- THE PROFIT RECOVERY GROUP ASIA, INC.,
THE PROFIT RECOVERY GROUP CANADA, INC.,
THE PROFIT RECOVERY GROUP NEW ZEALAND, INC.,
THE PROFIT RECOVERY GROUP NETHERLANDS, INC.,
THE PROFIT RECOVERY GROUP BELGIUM, INC.,
THE PROFIT RECOVERY GROUP MEXICO, INC.,
THE PROFIT RECOVERY GROUP FRANCE, INC.,
THE PROFIT RECOVERY GROUP AUSTRALIA, INC.,
THE PROFIT RECOVERY GROUP GERMANY, INC.,
PRG INTERNATIONAL, INC.,
THE PROFIT RECOVERY GROUP SWITZERLAND, INC.,
THE PROFIT RECOVERY GROUP SOUTH AFRICA, INC.,
THE PROFIT RECOVERY GROUP SPAIN, INC.,
THE PROFIT RECOVERY GROUP ITALY, INC.,
THE PROFIT RECOVERY GROUP GREECE, INC.,
THE PROFIT RECOVERY GROUP PORTUGAL, INC.,
PAYMENT TECHNOLOGIES, INC.,
THE PROFIT RECOVERY GROUP COSTA RICA, INC.,
each a Georgia corporation
By: /s/ Xxxxxx X. Xxxxx, Xx.
----------------------------------------
Name: Xxxxxx X. Xxxxx, Xx.
Title: Executive Vice President - Finance,
Chief Financial Officer and Treasurer
PRG HOLDING CO. (FRANCE) NO. 1 LLC,
PRG HOLDING CO. (FRANCE) NO. 2 LLC,
each a Delaware limited liability company
By: /s/ Xxxxxx X. Xxxxx, Xx.
----------------------------------------
Name: Xxxxxx X. Xxxxx, Xx.
Title: Executive Vice President - Finance,
Chief Financial Officer and Treasurer
PRG USA, INC.,
a Georgia corporation
By: /s/ Xxxxxx X. Xxxxx, Xx.
----------------------------------------
Name: Xxxxxx X. Xxxxx, Xx.
Title: Executive Vice President - Finance,
Chief Financial Officer and Treasurer
ADMINISTRATIVE AGENT: BANK OF AMERICA, N.A.,
-------------------- in its capacity as the Administrative Agent
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxx
------------------------------
Title:Senior Vice President
-----------------------------
LENDERS: BANK OF AMERICA, N.A.,
------- in its capacity as a Lender
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxx
------------------------------
Title:Senior Vice President
-----------------------------
1430981
SCHEDULE 1.1(a) TO CREDIT AGREEMENT
EXISTING LETTERS OF CREDIT
----------------------- ------------------------------- -------------------------------- --------------------
Number Amount Beneficiary Expiry Date
----------------------- ------------------------------- -------------------------------- --------------------
LC 3042283 EUR 3,000,000.00 Bank of America, Paris 03/29/02
----------------------- ------------------------------- -------------------------------- --------------------
SCHEDULE 1.1(b) TO CREDIT AGREEMENT
INVESTMENTS
The Profit Recovery Group USA, Inc.
The Profit Recovery Group Asia, Inc.
The Profit Recovery Group Australia, Inc.
The Profit Recovery Group Belgium, Inc.
The Profit Recovery Group U.K., Inc.
The Profit Recovery Group Canada, Inc.
The Profit Recovery Group Costa Rica, Inc.
The Profit Recovery Group New Zealand, Inc.
The Profit Recovery Group Netherlands, Inc.
The Profit Recovery Group Mexico, Inc.
The Profit Recovery Group France, Inc.
The Profit Recovery Group Germany, Inc.
The Profit Recovery Group South Africa, Inc.
The Profit Recovery Group Switzerland, Inc.
The Profit Recovery Group Italy, Inc.
The Profit Recovery Group Spain, Inc.
The Profit Recovery Group Greece, Inc.
The Profit Recovery Group, Portugal, Inc.
Payment Technologies, Inc.
PRG International, Inc.(formerly known as PRG International
Holding Company, Inc.)
PRG USA, Inc.
PRG, Inc.(formerly known as PRG Acquisition, Inc.)
The Profit Recovery Group Mexico Holdings, S de RL de CV
The Profit Recovery Group Services Mexico, S de RL de CV
The Profit Recovery Group de Mexico S de RL de CV
The Profit Recovery Group Argentina, S.A.
PRG do Brasil Ltda
PRG France, S.A.
PRG Belgium S.P.R.L.
The Profit Recovery Group Suzhou' Co, Ltd.
PRG International .R. sro
The Profit Recovery Group Singapore PTE LTD. and its wholly owned
subsidiary, formed in Korea)
PRGRS, Inc.
PRGLS, Inc.
PRGFS, Inc.
PRG Holding Company (France) No. 1, LLC.
PRG Holding Company (France) No. 2, LLC.
Toujuth SNC
Bismas SNC
Profit Recovery Professionals Pty Ltd.
Cost Recovery Professionals Pty Ltd.,
Meridian VAT Corporation, Limited
Meridian VAT Reclaim Operations, Limited
Meridian VAT Reclaim Services, Limited,
XX Xxxxx, Inc.
Meridian VAT Processing (International), Limited
Meridian VAT Processing (N. America), Limited
Meridian VAT Processing (Japan), Limited
Meridian VAT Reclaim, Inc.
Meridian VAT Reclaim Canada, Inc.
Meridian VAT Reclaim (Hong Kong) Ltd.
Meridian VAT Reclaim (Proprietary) Limited
Meridian VAT Reclaim (India) Private, Limited
Meridian VAT Reclaim (UK), Limited
Meridian VAT Reclaim Japan, Inc.
Meridian VAT Reclaim (Schwiez) AG,
Meridian VAT Reclaim Korea Co., Limited,
VATClaim International (Pty.) Limited,
Meridian VAT Reclaim (Australia) Pty. Limited
Meridian VAT Reclaim GmbH
VATClaim (International)UK Limited
Meridian VAT Trustees, Limited
SCHEDULE 1.1(c) TO CREDIT AGREEMENT
LIENS
Security Interest in assets granted to Bank of America, N.A., formerly
NationsBank, N.A., pursuant to existing Credit Agreement, dated July 29, 1998,
as amended to date. The underlying Indebtedness secured by such Liens will be
paid in full and such Liens will be released in connection with the closing of
the Credit Agreement.
Security Interest held by Sun Financial Group, Inc. with respect to a certain
lease agreement for computer equipment, as evidenced by a Uniform Commercial
Code Financing Statement filed in Xxxx County, Georgia and bearing number
033199707820.
SCHEDULE 2.1(a) TO CREDIT AGREEMENT
LENDERS
Foreign
Revolving Currency Foreign
Commitment Revolving Commitment Currency
Lender Percentage Commitment Percentage Commitment
------ ---------- ---------- ---------- ----------
Bank of America, N.A. 100.00000000% $75,000,000.00 100.00000000% $25,000,000.00
------------- -------------- ------------- --------------
Total: 100.00000000% $75,000,000.00 100.00000000% $25,000,000.00
SCHEDULE 6.13 TO CREDIT AGREEMENT
SUBSIDIARIES
The following Subsidiaries are wholly-owned Subsidiaries of The Profit Recovery
Group International, Inc. and each is incorporated in the State of Georgia:
The Profit Recovery Group USA, Inc.
The Profit Recovery Group Asia, Inc.
The Profit Recovery Group Australia, Inc.
The Profit Recovery Group Belgium, Inc.
The Profit Recovery Group U.K., Inc.
The Profit Recovery Group Canada, Inc.
The Profit Recovery Group Costa Rica, Inc.
The Profit Recovery Group New Zealand, Inc.
The Profit Recovery Group Netherlands, Inc.
The Profit Recovery Group Mexico, Inc.
The Profit Recovery Group France, Inc.
The Profit Recovery Group Germany, Inc.
The Profit Recovery Group South Africa, Inc.
The Profit Recovery Group Switzerland, Inc.
The Profit Recovery Group Italy, Inc.
The Profit Recovery Group Spain, Inc.
The Profit Recovery Group Greece, Inc.
The Profit Recovery Group, Portugal, Inc.
Payment Technologies, Inc.
PRG International, Inc.(formerly known as PRG International Holding
Company, Inc.)
PRG USA, Inc.
PRG, Inc.(formerly known as PRG Acquisition, Inc.)
The Profit Recovery Group Mexico, Inc. owns 100% of The Profit
Recovery Group Mexico Holdings, S de RL de CV, a company incorporated
in Mexico.
The Profit Recovery Group Mexico Holdings, S de RL de CV, a company
incorporated in Mexico, has the following wholly-owned subsidiaries,
both of which are incorporated in Mexico: The Profit Recovery Group
Services Mexico, S de RL de CV and The Profit Recovery Group de Mexico
S de RL de CV.
The Profit Recovery Group Argentina, S.A., is a wholly-owned
subsidiary of The Profit Recovery Group, International, Inc. and is
incorporated in Argentina
PRG do Brasil Ltda, is a wholly-owned subsidiary of The Profit
Recovery Group, International, Inc. and is incorporated in Brazil
PRG France, S.A. is also a wholly-owned subsidiary of The Profit
Recovery Group International, Inc. and is incorporated in France.
PRG Belgium S.P.R.L., incorporated in Belgium, is a wholly-owned
subsidiary of The Profit Recovery Group International, Inc.
The Profit Recovery Group Suzhou' Co, Ltd.., incorporated in China, is
a wholly-owned subsidiary of The Profit Recovery Group International,
Inc.
PRG International .R.sro, incorporated in the Czech Republic, is a
wholly-owned subsidiary of The Profit Recovery Group International,
Inc.
The Profit Recovery Group Singapore PTE LTD., a Singapore corporation,
is a wholly-owned subsidiary of The Profit Recovery Group Asia, Inc.
The Profit Recovery Group Singapore PTE LTD has a wholly owned
subsidiary, formed in Korea, for its branch located in Korea
PRGRS, Inc., a Delaware corporation, is a wholly-owned subsidiary of
The Profit Recovery Group USA, Inc.
PRGLS, Inc., a Delaware corporation, is a wholly-owned subsidiary of
PRGRS, Inc.
PRGFS, Inc., a Delaware corporation, is a wholly-owned subsidiary of
PRG International, Inc.
PRG Holding Company (France) No. 1, LLC., a Delaware limited liability
company, is a wholly-owned subsidiary of The Profit Recovery Group
International, Inc.
PRG Holding Company (France) No. 2, LLC., a Delaware limited liability
company, is a wholly-owned subsidiary of The Profit Recovery Group
International, Inc.
Toujuth SNC organized under the laws of France, 99% of which is owned
by PRG Holding Company (France) No. 1, LLC., and 1% of which is owned
by PRG Holding Company (France) No. 2, LLC.
Bismas SNC is organized under the laws of France, and is wholly-owned
by Toujuth SNC
Profit Recovery Professionals Pty Ltd. and Cost Recovery Professionals
Pty Ltd., both incorporated in Australia, are wholly-owned
subsidiaries of The Profit Recovery Group Australia, Inc.
Meridian VAT Corporation, Limited, a Jersey (Channel Islands)
corporation, is a wholly-owned subsidiary of The Profit Recovery Group
International, Inc.
Meridian VAT Reclaim Operations, Limited, incorporated in Ireland,
Meridian VAT Reclaim Services, Limited, incorporated in the United
Kingdom, and XX Xxxxx, Inc., incorporated in the State of Delaware,
are wholly-owned subsidiaries of Meridian VAT Corporation, Limited
Meridian VAT Processing (International), Limited, incorporated in
Ireland and Meridian VAT Processing (N. America), Limited,
incorporated in Ireland are wholly-owned subsidiaries of Meridian VAT
Reclaim Operations, Limited
Meridian VAT Reclaim Operations, Limited owns 51% of the issued and
outstanding stock of Meridian VAT Processing (Japan), Limited, which
is incorporated in Ireland
Both Meridian VAT Reclaim, Inc., incorporated in Delaware, and
Meridian VAT Reclaim Canada, Inc., incorporated in Canada, are
wholly-owned subsidiaries of Meridian VAT Processing (N. America)
Limited
The following are wholly-owned subsidiaries of Meridian VAT Processing
(International) Limited: Meridian VAT Reclaim (Hong Kong) Ltd.,
incorporated in Hong Kong; Meridian VAT Reclaim (Proprietary) Limited,
incorporated in South Africa; Meridian VAT Reclaim (India) Private,
Limited, incorporated in India; Meridian VAT Reclaim (UK), Limited,
incorporated in the United Kingdom; Meridian VAT Reclaim Japan, Inc.,
incorporated in Japan; and Meridian VAT Reclaim (Schwiez) AG,
incorporated in Switzerland.
Meridian VAT Reclaim Korea Co., Limited, incorporated in South Korea,
is a wholly-owned subsidiary of Meridian VAT Reclaim Japan, Inc.
VATClaim International (Pty.) Limited, incorporated in South Africa,
is a wholly-owned subsidiary of Meridian VAT Reclaim (Proprietary),
Limited
The following are wholly-owned subsidiaries of Meridian VAT Reclaim
(UK) Limited: Meridian VAT Reclaim (Australia) Pty. Limited,
incorporated in Australia; Meridian VAT Reclaim GmbH, incorporated in
Germany; and VATClaim (International)UK Limited, incorporated in the
United Kingdom.
Meridian VAT Trustees, Limited, incorporated in Ireland is a
separately owned and incorporated company responsible for receiving
VAT refunds from the various VAT authorities and distributes the
proceeds to Meridian's clients. The trustee company has entered into
Trust Deeds with the processing subsidiaries which regulate the terms
of the fiduciary relationship between the parties. As the Meridian
Group exercises control over the financial and operational policies of
the trustee company, its results are consolidated into the Meridian
Group results.
There are no outstanding options, warrants, rights of conversion or purchase of
similar rights with respect thereto.
SCHEDULE 6.17 TO CREDIT AGREEMENT
INTELLECTUAL PROPERTY
See attached "Status Report of U.S. Service Xxxx Registrations" and "Status
Report of Foreign Applications / Registrations," each dated as of December 21,
2001.
------------------------------------------------------------------------------------------------------------------------------------
NEEDLE & XXXXXXXXX, P.C.
Status Report of U.S. Service Xxxx Registrations for
PRGRS, INC.
As of December 21, 2001
------------------------------------------------------------------------------------------------------------------------------------
SECTION
8 & 15
AFFIDAVIT
FILING SERIAL REG. REG RENEWAL
N&R NO. XXXX SERVICES DATE NO. DATE NO. DATE STATUS
------------ ---------------- -------------------- ----------- ---------- ---------- ---------- ------------ --------------------
16092.1000US PRG and Design Recovery auditing 12/18/95 75/033,888 06/10/97 2,068,799 due between Registered.
services - Class 35. 06/10/2002
and Assignment from The
06/10/2003 Profit Recovery
06/10/2007 Group International,
Inc. to PRGX, Inc.
recorded in the PTO
on November 15, 1999
at Reel/Frame
001992/0657.
------------ ---------------- -------------------- ----------- ---------- ---------- ---------- ------------ --------------------
16092.1001US PROFIT RECOVERY Recovery auditing 12/18/95 75/034,021 07/08/97 2,076,986 due between Registered.
GROUP services - Class 35. 07/08/2002
INTERNATIONAL and Assignment from The
07/08/2003 Profit Recovery
07/08/2007 Group International,
Inc. to PRGRS,
recorded in the
PTO on November 15,
1999 at Reel/Frame
001992/0657.
------------ ---------------- -------------------- ----------- ---------- ---------- ---------- ------------ --------------------
16092.1002US RECOVERNOW Recovery auditing 12/18/95 75/033,884 06/03/97 2,066,489 due between Registered.
services - Class 06/03/2002
35. and Assignment from The
06/03/2003 Profit
06/03/2007 Recovery Group
International, Inc.
to PRGRS, Inc.
recorded in the PTO
on November 15, 1999
at Reel/Frame
001992/0657.
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
NEEDLE & XXXXXXXXX, P.C.
Status Report of U.S. Service Xxxx Registrations for
PRGRS, INC.
As of December 21, 2001
------------------------------------------------------------------------------------------------------------------------------------
SECTION
8 & 15
AFFIDAVIT
FILING SERIAL REG. REG RENEWAL
N&R NO. XXXX SERVICES DATE NO. DATE NO. DATE STATUS
------------ ---------------- -------------------- ----------- ---------- ---------- ---------- ------------ --------------------
16092.1005US AUDITPRO Recovery auditing 06/24/94 74/542328 11/21/95 1,936,667 due between Registered.
services - Class 35. 11/21/2000
and 11/21/00: Correction
11/21/2001 request forwarded to
the PTO. Await
confirmation of the
correction.
11/20/01: corrected
Certificate of
Registration
returned by the PTO
certifying ownership
in the name of
PRGRS, Inc.
11/8/01: Sec. 8&15
Aff. Forwarded to
the Patent and
Trademark Office.
------------ ---------------- -------------------- ----------- ---------- ---------- ---------- ------------ --------------------
16092.1006US PRISM Transaction review, 09/12/2000 76/126210 Notice of Allowance
audit, and has issued as of
verification 11/6/2001.
services related to
electronic commerce
- Class 35.
------------ ---------------- -------------------- ----------- ---------- ---------- ---------- ------------ --------------------
16092.1013 PRG Recovery auditing 03/06/2001 76/219524 7/10/01: Office
services; business Action issued.
management Response due
consulting for cost January 10, 2002.
containment; and
consultation
services in the
field of taxes,
sales and use taxes,
communications,
payables and
disbursements, and
transportation
logistics - Class
35.
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
NEEDLE & XXXXXXXXX, P.C.
Status Report of U.S. Service Xxxx Registrations for
PRGRS, INC.
As of December 21, 2001
------------------------------------------------------------------------------------------------------------------------------------
SECTION
8 & 15
AFFIDAVIT
FILING SERIAL REG. REG RENEWAL
N&R NO. XXXX SERVICES DATE NO. DATE NO. DATE STATUS
------------ ---------------- -------------------- ----------- ---------- ---------- ---------- ------------ --------------------
16092.1015 PRG ANSWERS Recovery auditing 03/05/2001 76/218751 Office Action
BEYOND THE services; issued. Response
NUMBERS. & business management due January 10,
Design consulting for cost 2002.
containment; and
consultation
services in the
field of taxes,
sales and use taxes,
communications,
payables and
disbursements, and
transportation
logistics - Class
35.
------------ ---------------- -------------------- ----------- ---------- ---------- ---------- ------------ --------------------
16092.1014 PRG Website design and 03/01/2001 76/218376 12/3/2001:
development services Notice of
Intent-to-use for others; publication on
application. customized computer December 18,
software design for 2001 received.
others; and computer Opposition
systems integration period expires
- Class 42. January 18, 2001
------------------------------------------------------------------------------------------------------------------------------------
16092.1016 PRG ANSWERS Website design and 03/01/01 76/218470 12/3/2001:
BEYOND THE development services Notice of
NUMBERS. & for others; Publication on
Design customized computer December 18,
Intent-to-use software design for 2001 received.
application. others; and computer Opposition
systems integration period expires
- Class 42. January 18, 2001
------------ ---------------- -------------------- ----------- ---------- ---------- ---------- ------------ --------------------
PRS & Design Professional 08/05/91 74/191223 07/14/92 1,700,783 07/14/2002 Section 8
accounts payable accepted.
auditing and
consulting services This
- Class 35 registration is
not in the
Needle & Xxxxx-
xxxx maintenance
records.
------------ ---------------- -------------------- ----------- ---------- ---------- ---------- ------------ --------------------
COVERS ALL THE Professional 08/05/91 74/191219 09/08/92 1,714,068 09/08/2002 Section 8
ANGLES accounts payable accepted.
(Stylized) auditing and
consulting services This registra-
in connection tion is not in
therewith the Needle &
Class 35 Xxxxxxxxx
maintenance
records.
------------ ---------------- -------------------- ----------- ---------- ---------- ---------- ------------ --------------------
------------------------------------------------------------------------------------------------------------------------------------
NEEDLE & ROSENBERG, P.C.
Status Report of U.S. Service Xxxx Registrations for
PRGRS, INC.
As of December 21, 2001
------------------------------------------------------------------------------------------------------------------------------------
SECTION
8 & 15
AFFIDAVIT
FILING SERIAL REG. REG RENEWAL
N&R NO. XXXX SERVICES DATE NO. DATE NO. DATE STATUS
------------ ---------------- -------------------- ----------- ---------- ---------- ---------- ------------ --------------------
16092.1021US THE RIGHT ANSWER Computer software 07/08/99 75/725569 08/29/2000 2,381,090 08/29/2010 10/23/01:
for inventory and Notice of
auditing of Sec. 8&15 due Recordation of
telecommunications between Assignment from
services and 08/29/2005 Profit Recovery
equipment in Class 9. and 2006 Group U.S.A.,
Inc. to PRGRS,
INC. sent to
Xx. Xxxxxx.
------------ ---------------- -------------------- ----------- ---------- ---------- ---------- ------------ --------------------
16092.1019 PRG-XXXXXXX Recovery auditing 08/9/01 78/078407 Office Action
services and received;
consulting response is due
relating May 19, 2002.
thereto
------------ ---------------- -------------------- ----------- ---------- ---------- ---------- ------------ --------------------
16092.1020 PRG-XXXXXXX Recovery auditing 08/28/01 76/306046 Await
ANSWERS BEYOND services and examination and
THE NUMBERS consulting relating Official Action.
and Design thereto
------------ ---------------- -------------------- ----------- ---------- ---------- ---------- ------------ --------------------
16092.1018 IMDEX 08/08/01 76/296393
------------ ---------------- -------------------- ----------- ---------- ---------- ---------- ------------ --------------------
16092.3000 RECOVERALL 11/01/01 78/091301
------------ ---------------- -------------------- ----------- ---------- ---------- ---------- ------------ --------------------
------------------------------------------------------------------------------------------------------------------------------------
COPYRIGHT REGISTRATIONS
N&R Ref. No. COPYRIGHT Copyright Type Registration No. Duration
-------------- -------------- ---------------------- ---------------------- ---------------------- ----------------------------
16092.2000US AUDITPRO Software TXu715-889 75 years from first Registered in the name of
publication THE PROFIT RECOVERY GROUP
GROUP INTERNATIONAL, INC.
8/15/01: e-mail from Xx.
Xxxxxx with advice that
recording of an assignment
to PRGRS, INC. should not
be made. This copyright
registration is to remain
in the orginal owner's name.
------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE 6.20(a) TO CREDIT AGREEMENT
REAL PROPERTY LOCATIONS
See attached "PRG Offices" list dated December 01, all of which are leased by
the Credit Parties.
SCHEDULE 6.20(b) TO CREDIT AGREEMENT
PERSONAL PROPERTY LOCATIONS
See attached "PRG Offices," "PRG International Offices" and "PRG Canadian
Offices" list dated December 01.
SCHEDULE 6.20(c) TO CREDIT AGREEMENT
CHIEF EXECUTIVE OFFICE / STATE OF INCORPORATION
STATE OF
CREDIT PARTY / PRINCIPAL PLACE OF BUSINESS INCORPORATION
------------------------------------------ -------------
PAYMENT TECHNOLOGIES, INC. (1) Georgia
THE PROFIT RECOVERY GROUP ASIA, INC. Georgia
00 XXXXXX Xxxx
#00-00 XxxxxXxxx Xxxxxxxxx
XXXXXXXXX 000000
THE PROFIT RECOVERY GROUP AUSTRALIA, INC. Xxxxxxx
Xxxxxxxxx Business Centers
000-000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 0000
XXXXXXXXX
THE PROFIT RECOVERY GROUP BELGIUM, INC. Georgia
The Profit Recovery Group Belgium, Inc.
000 Xxx Xxxxxxx
00000 Xxxxxxxxx Xxxxx
XXXXXX
THE PROFIT RECOVERY GROUP CANADA, INC. Georgia
The Profit Recovery Group Canada, Inc.
0000 Xxxxxxx Xxxx Xxxx 0 & 4
Xxxxxxxxxxx, XX XXX 0X0
XXXXXX
THE PROFIT RECOVERY GROUP COSTA RICA, INC. Georgia
Edificio Xxxxxxx, del Mall San Xxxxx 200 metros norte
altos de POPS Fantasia, tercer piso
San Xxxxx, San Xxxx
XXXXX RICA
THE PROFIT RECOVERY GROUP FRANCE, INC. Georgia
000 Xxx Xxxxxxx
00000 Xxxxxxxxx Xxxxx
XXXXXX
THE PROFIT RECOVERY GROUP GERMANY, INC. Georgia
Xxxxxx-Xxxxx Xxxxxxx 00X
X-00000 Xxxxxx
XXXXXXX
THE PROFIT RECOVERY GROUP GREECE, INC. (1) Georgia
CHIEF EXECUTIVE OFFICE / STATE OF INCORPORATION (continued)
STATE OF
CREDIT PARTY / PRINCIPAL PLACE OF BUSINESS INCORPORATION
------------------------------------------ -------------
THE PROFIT RECOVERY GROUP INTERNATIONAL, INC. (1) Georgia
THE PROFIT RECOVERY GROUP ITALY,. INC. Georgia
Xxxxxxxxx 00X
Xxxxx 00000
XXXXX
THE PROFIT RECOVERY GROUP MEXICO, INC. Georgia
The Profit Recovery Group Mexico, Inc.
Xxxxxx Xxxxxxx 0X Xxxx 0 Xxx
Xxxxxx de Chapultepec 00000
XXXXXX D.F.
THE PROFIT RECOVERY GROUP NETHERLANDS, INC. (1) Georgia
THE PROFIT RECOVERY GROUP NEW ZEALAND, INC. Georgia
The Profit Recovery Group New Zealand, Inc.
Xxxxx 0/00 Xxxx Xxxx
Xxxxxx XXX 0000
XXXXXXXXX
THE PROFIT RECOVERY GROUP PORTUGAL, INC. (1) Georgia
THE PROFIT RECOVERY GROUP SOUTH AFRICA, INC. Georgia
0 Xxxxxx Xxxx
Xxxxxxx Xxxx
Xxxxxxx 0000
XXXXX XXXXXX
THE PROFIT RECOVERY GROUP SPAIN, INC. Xxxxxxx
Xxxxx Xxxxxxxxx 00
00000 Xxxxxx
XXXXX
THE PROFIT RECOVERY GROUP SWITZERLAND, INC. Georgia
c/o KPMG Private
00 Xxxxxx xx Xxxxxxxxx
Xxxxxx
XXXXXXXXXXX
THE PROFIT RECOVERY GROUP UK, INC. Georgia
Meridian House
000-000 Xxxxxxxx Xxxx
Xxxxxx, XX0 0XX
XXXXXXX
CHIEF EXECUTIVE OFFICE / STATE OF INCORPORATION (continued)
STATE OF
CREDIT PARTY / PRINCIPAL PLACE OF BUSINESS INCORPORATION
------------------------------------------ -------------
THE PROFIT RECOVERY GROUP USA, INC. (1) Georgia
PRG INTERNATIONAL, INC. (1) Georgia
PRG USA, INC. (1) Georgia
PRG, INC.(1) Georgia
PRGFS, INC. (2) Delaware
PRGLS, INC. (2) Delaware
PRGRS, INC. (2) Delaware
PRG Holding Company (France) No. 1, LLC (2) Delaware
PRG Holding Company (France) No. 2, LLC (2) Delaware
The Chief Executive Address for each of the above Credit Parties is:
0000 Xxxxx Xxxxx Xxxxxxx, Xxxxx 000X
Xxxxxxx, Xxxxxxx 00000-0000
(1) The Principal Place of Business for the Credit Party is:
0000 Xxxxx Xxxxx Xxxxxxx, Xxxxx 000X
Xxxxxxx, Xxxxxxx 00000-0000
(2) The Principal Place of Business for the Credit Party is:
000 Xxxx Xxxxxx, Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
SCHEDULE 7.6
INSURANCE
See attached Certificate of Liability Insurance
SCHEDULE 8.1
INDEBTEDNESS
Existing Credit Agreement dated July 29, 1998, as amended to date. The
underlying Indebtedness will be repaid in full with loans from this Credit
Agreement and the Existing Credit Agreement cancelled upon execution of this
Credit Agreement.
Certain indebtedness of Xxxxxx Xxxxxxx & Associates to be assumed, per the
acquisition agreement with Xxxxxx Xxxxxxx & Associates, as more particularly
identified as follows:
Approximate
Principal
Creditor/ Amount
Noteholder Purpose of Note Outstanding
1. Xxx Xxxx Consideration for HS&A $1,353,000 (a)
Franchise Re-acquired
2. Xxxxx Xxxxx Consideration for HS&A $642,000 (a)
Franchise Re-acquired
3. Xx Xxxxx Consideration for HS&A $93,000 (a)
Franchise Re-acquired
4. Xxx XxXxxxx Consideration for HS&A $3,136,000 (a)
Franchise Re-acquired
5. Xxx Xxxxxxxxxx Consideration for HS&A $4,332,000 (a)
Franchise Re-acquired
6. Xxxx, Inc. Consideration for HS&A $2,582,000 (a)
Franchise Re-acquired
7. Xxxxxx X. Xxxxxxxx Consideration for HS&A $2,291,000 (a)
and Xxxxxxx Xxxx Xxxxxxxx Franchise Re-acquired
8. X.X. Xxxxx Enterprises Consideration for HS&A $1,716,000 (a)
Franchise Re-acquired
9. JLM Charitable Remainder Trust Consideration for HS&A $1,156,000 (a)
Franchise Re-acquired
10. Xxxxxx Xxxxxxx & Associates Consideration for HS&A $3,656,000 (a)
of the Mid-Atlantic, Inc. Franchise Re-acquired
11. HS&A Florida, Inc. Consideration for HS&A $1,647,000 (a)
Franchise Re-acquired
12. Phoenix Audit Consideration for HS&A $3,000,000 (b)
Franchise Re-acquired
13. JASAMA, Inc. Consideration for HS&A $1,200,000 (b)
Franchise Re-acquired
14. Jordan X. Xxxxx Purchase of $607,000 (a)
Imaging Company
Company
15. Xxxxxx Van der Spiegal GmbH Consideration for HS&A $2,200,000 (b)
and Xxxxxx Van der Spiegal Franchise to be
Re-acquired in January
2002
16. Xxxxx Xxxxxx Xxxxxxx Consideration for HS&A $8,945,000 (b)
and Xxxxxx Xxxxxxxx Xxxxxxx Franchise Re-acquired
17. Xxxx Xxxxx Xxxxxxxxx Consideration for HS&A $3,556,000 (b)
and Gillian Xxxxxxxx Xxxxxxxxx Franchise Re-acquired
18. Xxxxxx Xxxxxxx Working Capital Loan $8,000,000 (d)(e)
19. KBC Bank Bank Loan to Re-acquire $560,000 (a)
Certain European Franchises
$50,672,000 (d)
================
(a) - PRG shall re-pay this loan in full within 30 days of acquiring HS&A.
(b) - Unsecured, assumable loan which PRG intends to assume and service in
accordance with its terms.
(c) - Intentionally Omitted
(d) - Note that amounts listed on this schedule are as
of September 30, 2001. Xxxxxx Xxxxxxx has personally
provided working capital to HS&A throughout 2001 and
may have infused additional working capital into
HS&A subsequent to September 30, 2001 to service the
other obligations listed on this schedule. To the
extent of such additional working capital infusion,
if any, the listed obligations due to parties other
than Xxxxxx Xxxxxxx would decrease in amount prior
to closing and the listed amount due
(e) - PRG will re-pay this loan in full at the time it acquires HS&a
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