Exhibit 4.6
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CREDIT AGREEMENT
Dated as of July 17, 1998
among
NATIONAL EQUIPMENT SERVICES, INC.,
as Borrower,
AND
CERTAIN SUBSIDIARIES OF THE BORROWER
FROM TIME TO TIME PARTY HERETO,
as Guarantors,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTY HERETO
AND
FIRST UNION NATIONAL BANK,
as Agent
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of July 17, 1998 (as amended, modified,
restated or supplemented from time to time, the "Credit Agreement"), is by and
among NATIONAL EQUIPMENT SERVICES, INC., a Delaware corporation (the
"Borrower"), the Subsidiary Guarantors (as defined herein), the Lenders (as
defined herein) and FIRST UNION NATIONAL BANK, as Agent for the Lenders (in such
capacity, the "Agent").
W I T N E S S E T H
WHEREAS, the Borrower has requested that the Lenders provide a $325,000,000
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:
"Additional Commitment" means, with respect to any Lender which executes a
New Commitment Agreement in accordance with Section 3.4(b), the commitment of
such Lender in an aggregate principal amount up to the amount specified in such
New Commitment Agreement to make Revolving Loans in accordance with the
provisions of Section 2.1(a).
"Account Designation Letter" has the meaning given to such term in Section
5.1(t) hereof
"Accounts Receivable" means all of each Credit Party's accounts, as such
term is defined in the UCC, whether now existing or existing in the future,
including, without limitation, all accounts (whether or not specifically listed
on schedules furnished to the Agent) created by or arising from all of each
Credit Party's sales or leases of goods or rendition of services made
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under any of each Credit Party's trade names or styles, or through any of each
Credit Party's divisions.
"Acquisition" means the purchase of a business unit as a going concern
which purchase may be of (i) the Capital Stock of a Person, (ii) the assets of
such Person through merger or consolidation with such Person or (iii) the plant,
property and equipment of such Person, or a portion thereof, together with the
related current assets and intangible assets of such Person.
"Acquired Company" means any Person (or assets thereof) which is acquired
pursuant to an Acquisition.
"Additional Credit Party" means each Person that becomes a Subsidiary
Guarantor after the Closing Date by execution of a Joinder Agreement.
"Adjusted Base Rate" means the Base Rate plus the Applicable Percentage for
Base Rate Loans.
"Adjusted Eurodollar Rate" means the Eurodollar Rate plus the Applicable
Percentage for Eurodollar Loans.
"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
twenty percent (20%) 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.
"Agency and Custodian Agreement" means the Agency and Custodian Agreement,
of even date herewith, among the Agent, the Borrower, on behalf of itself and
the other Credit Parties, and Xxxx Xxxxxxxxx.
"Agency Services Address" means First Union National Bank, One First Union
Center, 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, Attn: Agency
Services, or such other address as may be identified by written notice from the
Agent to the Borrower.
"Agent" shall have the meaning assigned to such term in the heading hereof,
together with any successors or assigns.
"Agent's Commitment Letter" means that certain letter agreement, dated as
of June 29, 1998, between the Agent and the Borrower, as amended, modified,
restated or supplemented from time to time.
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"Agent's Fee Letters" means those certain letter agreements, dated as of
July 17, 1998, between the Agent and the Borrower, as amended, modified,
restated or supplemented from time to time.
"Agent's Fees" shall have the meaning assigned to such term in Section
3.5(c).
"Applicable Lending Office" means, for each Lender, the office of such
Lender (or of an Affiliate of such Lender) as such Lender may from time to time
specify to the Agent and the Borrower by written notice as the office by which
its Eurodollar Loans are made and maintained.
"Applicable Percentage" means for Base Rate Loans, Eurodollar Loans and
Unused Line Fees, the appropriate applicable percentages corresponding to the
Total Debt Leverage Ratio in effect as of the most recent Calculation Date as
shown below:
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Tier Total Debt Applicable Applicable Applicable
Level Leverage Ratio Percentage for Percentage for Base Percentage for
Eurodollar Loans Rate Loans Unused Line Fees
--------------------------------------------------------------------------------------------------------------
Revolving Term Revolving Term
Loans Loan Loans Loan
--------------------------------------------------------------------------------------------------------------
1 greater than 4.25 to 1.0 2.50% 2.50% 1.25% 1.25% 0.50%
--------------------------------------------------------------------------------------------------------------
2 greater than 3.75 to 1.0 but 2.25% 2.25% 1.00% 1.00% 0.50%
less than 4.25 to 1.0
--------------------------------------------------------------------------------------------------------------
3 greater than 3.25 to 1.0 but 2.00% 2.00% 0.75% 0.75% 0.50%
less than 3.75 to 1.0
--------------------------------------------------------------------------------------------------------------
4 greater than 2.75 to 1.0 but 1.75% 1.75% 0.50% 0.50% 0.375%
less than 3.25 to 1.0
--------------------------------------------------------------------------------------------------------------
5 less than 2.75 to 1.0 1.50% 1.75% 0.25% 0.50% 0.3125%
--------------------------------------------------------------------------------------------------------------
The Applicable Percentages shall be determined and adjusted (a) quarterly on the
date five Business Days after the date on which the Agent has received from the
Borrower the quarterly officer's certificate required to be delivered to the
Agent and the Lenders in accordance with the provisions of Section 7.1(c) and
(b) upon the consummation of a Permitted Acquisition (each such date referred to
in clauses (a) and (b), a "Calculation Date"); provided, however, that (i) the
initial Applicable Percentages shall be based on the Total Debt Leverage Ratio
in effect on the Closing Date but in no event shall be less than Tier Level 3
(as shown above) and shall be greater than or equal to Tier Level 3 until the
first Calculation Date subsequent to December 31, 1998, and, thereafter, the
Tier Level shall be determined by the then current Total Debt Leverage Ratio,
and (ii) if the Borrower fails to provide the officer's certificate to the Agent
for any fiscal
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quarter as required by and within the time limits set forth in Section 7.1(c),
the Applicable Percentages from the applicable date of such failure shall be
based on Tier Level 1 until five Business Days after an appropriate officer's
certificate is provided to the Agent, whereupon the Tier Level shall be
determined by the Total Debt Leverage Ratio set forth in such certificate.
Except as set forth above, each Applicable Percentage shall be effective from
one Calculation Date until the next Calculation Date. Notwithstanding anything
to the contrary contained herein, if, at any time, the Senior Debt Leverage
Ratio shall be less than 2.5 to 1.0, the Borrower may elect to reduce the
Applicable Percentages for Revolving Loans (both Base Rate Loans and Eurodollar
Loans) at all Tier Levels by 0.25% provided that the Borrower shall have
delivered to the Agent financial projections for the period commencing with the
date of such election through the last day covered by the financial projections
delivered to the Agent on the Closing Date pursuant to Section 5.1(c)(iv) hereof
demonstrating that, on a Pro Forma Basis, the Senior Debt Leverage Ratio of the
Consolidated Parties shall be at least 0.25 lower than the maximum allowable
Senior Debt Leverage Ratio for the corresponding period as set forth in Section
7.11(c) (such election referred to as a "Price Reduction Election").
"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, but excluding
(i) dispositions of Equipment Held for Resale in the ordinary course of
business, (ii) dispositions of Rental Equipment by a Consolidated Party in any
calendar month to the extent that the aggregate Net Cash Proceeds from such
dispositions when combined with all other such dispositions previously made by
all the Consolidated Parties in such calendar month do not exceed 5% of the net
book value of all Rental Equipment of the Credit Parties, (iii) dispositions of
obsolete or worn equipment by a Credit Party, other than the sale or other
disposition of equipment described in clauses (i) or (ii) immediately above, in
any fiscal year to the extent that the aggregate Net Cash Proceeds from such
dispositions when combined with all other such dispositions previously made by
all the Consolidated Parties in such fiscal year do not exceed $1,000,000, (iv)
dispositions of Cash Equivalents and (v) dispositions of real estate assets by a
Consolidated Party during any fiscal year to the extent that the aggregate Net
Cash Proceeds from such dispositions when combined with all other such
dispositions previously made by all the Consolidated Parties in such fiscal year
do not exceed $5,000,000.
"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 ordering
the winding up or liquidation of its affairs; or (ii) there shall be commenced
against such Person an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or any case,
proceeding or
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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, the rate per annum equal to the higher of
(a) the Federal Funds Rate for such day plus one-half of one percent (0.5%) and
(b) the Prime Rate for such day. Any change in the Base Rate due to a change in
the Prime Rate or the Federal Funds Rate shall be effective on the effective
date of such change in the Prime Rate or Federal Funds Rate.
"Base Rate Loan" means any Loan bearing interest at a rate determined by
reference to the Base Rate.
"Borrower" means the Person identified as such in the heading hereof,
together with any permitted successors and assigns.
"Borrowing Base" means, as of any day, (a) the sum of (i) 85% of Net
Accounts Receivable, (ii) 50% of net book value of Parts and Supplies Inventory,
(iii) 100% of the net book value of Rental Equipment and (iv) 80% of the net
book value of Equipment Held for Resale, in each case as set forth in the most
recent Borrowing Base Certificate delivered to the Agent and the Lenders in
accordance with the terms of Section 7.1(d) less (b) reserves established from
time to time by the Agent in its reasonable discretion.
"Borrowing Base Certificate" has the meaning given to such term in Section
7.1(d) hereof.
"Business Day" means a day other than a Saturday, Sunday or other day on
which commercial banks in Charlotte, North Carolina are authorized or required
by law to close, except that, when used in connection with a Eurodollar Loan,
such day shall also be a day on which dealings between banks are carried on in
U.S. dollar deposits in London, England.
"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
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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 primarily of the character
described in the foregoing subdivisions (a) through (d).
"Change of Control" means the occurrence of any of the following events:
(i) any Person or two or more Persons (other than Xxxxxx Xxxxx or any of its
Affiliates) 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
Borrower (or other securities convertible into such Voting Stock) representing
20% or more of the combined voting power of all Voting Stock of the Borrower, or
(ii) during any period of up to 12 consecutive months, commencing after the
Closing Date, individuals who at the beginning of such 12 month period were
directors of the Borrower (together with any new director whose election by the
Borrower's Board of Directors or whose nomination for election by the Borrower's
shareholders was approved by a vote of at least two-thirds of the directors then
still in office who either were directors at the beginning of such period or
whose election or nomination for election was previously so approved) cease for
any reason to constitute a majority of the directors of the Borrower then in
office. As
6
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, the Agency and Custodian Agreement and such other
documents executed and delivered in connection with the attachment and
perfection of the Agent's security interests and liens arising thereunder,
including without limitation, UCC financing statements and intellectual property
filings.
"Commitment" means the Revolving Commitment, the Term Loan Commitment and the
LOC Commitment.
"Consolidated Capital Expenditures" means, for any period, all capital
expenditures of the Consolidated Parties on a consolidated basis for such
period, as determined in accordance with GAAP.
"Consolidated EBITDA" means, for any period, the sum of (i) Consolidated Net
Income for such period, but excluding therefrom all extraordinary or non-
recurring items of income or loss, 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, all as determined in accordance with GAAP.
"Consolidated Funded Indebtedness" means, as of the date of determination, all
Funded Indebtedness of the Consolidated Parties.
"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.
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"Consolidated Net Income" means, for any period, net income (excluding
extraordinary items) after taxes for such period of the Consolidated Parties on
a consolidated basis, as determined in accordance with GAAP.
"Consolidated 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.
"Consolidated Parties" means a collective reference to the Borrower and its
Subsidiaries, and "Consolidated Party" means any one of them.
"Consolidated Senior Indebtedness" means, as of the date of determination,
Consolidated Funded Indebtedness less Subordinated Debt.
"Contractual Obligations" means, with respect to any Person, any term or
provision of any securities issued by such Person, or any indenture, mortgage,
deed of trust, contract, undertaking, document, instrument or other agreement to
which such Person is a party or by which it or any of its properties is bound or
to which it or any of its properties is subject.
"Credit Documents" means a collective reference to this Credit Agreement, the
Notes, the LOC Documents, each Joinder Agreement, the Agent's Fee Letters, 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 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 any Credit Party to any Lender, or any
Affiliate of a Lender, arising under any Hedging Agreement.
"Default" means any event, act or condition which with notice or lapse of
time, or both, would constitute an Event of Default.
"Defaulting Lender" means, at any time, any Lender that (a) has failed to make
a Loan or purchase a Participation Interest required pursuant to the 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 Agent or any Lender an amount owed
by such Lender pursuant to the terms of this Credit Agreement
8
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.
"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 Borrower 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; and
(iii) any other Person approved by the Agent and, unless an Event of Default has
occurred and is continuing at the time any assignment is effected in accordance
with Section 11.3, the Borrower (such approval not to be unreasonably withheld
or delayed by the Borrower and such approval to be deemed given by the Borrower
if no objection is received by the assigning Lender and the Agent from the
Borrower within five Business Days after notice of such proposed assignment has
been provided by the assigning Lender to the Borrower); provided, however, that
neither the Borrower nor an Affiliate of the Borrower shall qualify as an
Eligible Assignee.
"Environmental Laws" means any and all lawful and applicable Federal, state,
local and foreign statutes, laws, regulations, ordinances, rules, judgments,
orders, decrees, permits, concessions, grants, franchises, licenses, agreements
or other governmental restrictions relating to the environment or to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes into the
environment including, without limitation, ambient air, surface water, ground
water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes.
"Equipment Held for Resale" means all of each Credit Party's Inventory
consisting of equipment less than one year old which is held for resale or held
for lease by such Credit Party; provided, however, such equipment held for lease
by such Credit Party shall become "Rental Equipment" and no longer be "Equipment
Held for Resale" upon the leasing of such equipment by such Credit Party.
"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
9
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.
"Eurodollar Loan" means any Loan that bears interest at a rate based upon
the Eurodollar Rate.
"Eurodollar Rate" means, for any Eurodollar Loan for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) determined by the Agent to be equal to the quotient obtained by
dividing (a) the Interbank Offered Rate for such Eurodollar Loan for such
Interest Period by (b) 1 minus the Eurodollar Reserve Requirement for such
Eurodollar Loan for such Interest Period.
"Eurodollar Reserve Requirement" means, at any time, the maximum rate at
which reserves (including, without limitation, any marginal, special,
supplemental, or emergency reserves) are required to be maintained under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System (or any successor) by member banks of the Federal Reserve System
against "Eurodollar liabilities" (as such term is used in Regulation D). Without
limiting the effect of the foregoing, the Eurodollar Reserve Requirement shall
reflect any other reserves required to be maintained by such member banks with
respect to (i) any category of liabilities which includes deposits by reference
to which the Adjusted Eurodollar Rate is to be determined, or (ii) any category
of extensions of credit or other assets which include Eurodollar Loans. The
Adjusted Eurodollar Rate shall be adjusted automatically on and as of the
effective date of any change in the Eurodollar Reserve Requirement.
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"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, vice president, chief financial officer or
treasurer of such Person.
"Falconite" means Falconite, Inc., an Illinois corporation.
"Falconite Purchase Agreement" means that certain Stock Purchase Agreement
by and among Falconite, Inc., an Illinois corporation, the stockholders of
Falconite, Inc. and National Equipment Services, Inc., a Delaware corporation,
dated as of April 1, 1998, as it may be amended, modified or otherwise
supplemented on or prior to the Closing Date pursuant to the terms thereof and
hereof.
"Fees" means all fees payable pursuant to Section 3.5.
"Federal Funds Rate" means, for any day, the rate per annum (rounded upwards,
if necessary, to the nearest 1/100 of 1%) equal to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate charged to the Agent (in its
individual capacity) on such day on such transactions as determined by the
Agent.
"Foreign Subsidiary" means, with respect to any Person, any Subsidiary of
such Person which is not a Domestic Subsidiary of such Person.
"Funded Indebtedness" means, with respect to any Person, without duplication,
(a) all Indebtedness of such Person other than Indebtedness of the types
referred to in clause (e), (f), (g), (i), (l) and (m) of the definition of
"Indebtedness" set forth in this Section 1.1, (b) all Indebtedness of another
Person of the type referred to in clause (a) above secured by (or for which the
holder of such Funded Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on, or payable out of the proceeds of
production from, Property owned or acquired by such Person, whether or not the
obligations secured thereby have been assumed, (c) all Guaranty Obligations of
such Person with respect to Indebtedness of the type referred to in clause (a)
above of another Person and (d) Indebtedness of the type referred to in clause
(a) above of any partnership or unincorporated joint venture in which such
Person is a general partner or a joint venturer and is legally obligated or has
a reasonable expectation of being liable with respect thereto.
"GAAP" means generally accepted accounting principles in the United States
applied on a consistent basis and subject to the terms of Section 1.3.
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"Xxxxxx Xxxxx" means Golder, Thoma, Cressey, Rauner, Inc., and its
successors and permitted assigns.
"Governmental Authority" means any Federal, state, local or foreign court
or governmental agency, authority, instrumentality or regulatory body.
"Guarantors" means a collective reference to each of the Subsidiary
Guarantors, 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 between Borrower and any Lender, or any
Affiliate of a Lender.
"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
12
obligations of such Person under Hedging Agreements or other interest rate
protection agreements or other hedging agreements, (j) the maximum amount of all
standby letters of credit issued or bankers' acceptances facilities created for
the account of such Person and, without duplication, all drafts drawn thereunder
(to the extent unreimbursed), (k) all preferred Capital Stock issued by such
Person and required by the terms thereof to be redeemed or for which mandatory
sinking fund payments are due on or prior to the Maturity Date and all preferred
Capital Stock issued by a Person which has a current pay coupon, (l) the
principal portion of all obligations of such Person under Synthetic Leases and
(m) the Indebtedness of any partnership or unincorporated joint venture in which
such Person is a general partner or a joint venturer.
"Interbank Offered Rate" means, for any Eurodollar Loan for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as
the London interbank offered rate for deposits in Dollars at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period; provided, however, if more
than one rate is specified on Telerate Page 3750, the applicable rate shall be
the arithmetic mean of all such rates (rounded upwards, if necessary, to the
nearest 1/100 of 1%). If for any reason such rate is not available, the term
"Interbank Offered Rate" means, for any Eurodollar Loan for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on Reuters Screen LIBO Page as the London interbank
offered rate for deposits in Dollars at approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period; provided, however, if more than one rate is
specified on Reuters Screen LIBO Page, the applicable rate shall be the
arithmetic mean of all such rates (rounded upwards, if necessary, to the nearest
1/100 of 1%).
"Interest Coverage Ratio" means the ratio of Consolidated EBITDA (computed
for the four fiscal quarters then ending) to Consolidated Interest Expense
payable in cash (computed for the four fiscal quarters then ending.
"Interest Payment Date" means (a) as to Base Rate Loans, the last day of
each quarter, the date of repayment of principal of such Loan and the Maturity
Date, and (b) as to Eurodollar Loans, the last 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 Eurodollar Loan is
greater than three months, then also the date three months from the beginning of
the Interest Period and each three months thereafter.
"Interest Period" means, as to Eurodollar Loans, a period of one, two,
three or six months' duration, as the Borrower may elect, commencing, in each
case, on the date of the borrowing (including continuations and conversions
thereof); provided, however, (a) if any Interest Period would end on a day which
is not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day (except that where the next succeeding Business Day
falls in the next succeeding calendar month, then on the next preceding Business
Day), (b) no Interest Period shall extend beyond the Maturity Date, and (c)
where an Interest Period begins on a day for which
13
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.
"Inventory" means all of each Credit Party's inventory, including without
limitation, (i) all raw materials, work in process, parts, components,
assemblies, supplies and materials used or consumed in the Credit Parties'
business; (ii) all goods, wares and merchandise, finished or unfinished, held
for sale or lease or leased or furnished or to be furnished under contracts of
service; and (iii) all goods returned to or repossessed by the Credit Parties.
"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 of equipment or other assets 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 First Union National Bank.
"Issuing Lender Fees" shall have the meaning assigned to such term in
Section 3.5(b)(iii).
"Joinder Agreement" means a Joinder Agreement substantially in the form of
Exhibit 7.12 hereto, executed and delivered by an Additional Credit Party in
accordance with the provisions of Section 7.12.
"Lender" means any of the Persons identified as a "Lender" on the signature
pages hereto, and any Person which may become a Lender by way of assignment in
accordance with the terms hereof, together with their successors and permitted
assigns.
"Letter of Credit" means any letter of credit issued by the Issuing Lender
for the account of the Borrower in accordance with the terms of Section 2.2 and
the letters of credit issued and outstanding on the date hereof and listed on
Schedule 8.1.
"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).
14
"Loan" or "Loans" means the Revolving Loans and/or the Term Loan (or a
portion of any Revolving Loan or Term Loan) bearing interest at the Adjusted
Base Rate or the Adjusted Eurodollar Rate), individually or collectively, as
appropriate.
"LOC Commitment" means the commitment of the Issuing Lender to issue
Letters of Credit, 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.
"Material Adverse Effect" means a material adverse effect on (i) the
condition (financial or otherwise), operations, business, assets, liabilities or
prospects of the Consolidated Parties, taken as a whole, (ii) the ability of any
Credit Party to perform any obligation under the Credit Documents to which it is
a party, (iii) the material rights and remedies of the Lenders under the Credit
Documents or (iv) the Collateral taken as a whole, in each case determined by
the Agent in its reasonable discretion.
"Material Contract" means any contract or other arrangement (other than any
leases of real property or the Credit Documents), whether written or oral, to
which any Consolidated Party is a party as to which the breach, nonperformance,
cancellation or failure to renew by any party thereto could reasonably be
expected to have a Material Adverse Effect.
"Materials of Environmental Concern" means any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Laws, including, without limitation, asbestos,
polychlorinated biphenyls and urea-formaldehyde insulation.
"Maturity Date" means July 17, 2003.
15
"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.
"Multiple Employer Plan" means a Plan which any Consolidated Party or any
ERISA Affiliate and at least one employer other than the Consolidated Parties or
any ERISA Affiliate are contributing sponsors.
"Net Accounts Receivable" means the aggregate Accounts Receivable of the
Credit Parties as determined in accordance with GAAP less any of such
receivables which remain unpaid more than 90 days from the original invoice
date.
"Net Cash Proceeds" means the aggregate cash proceeds received by the
Consolidated Parties in respect of any Asset Disposition, net of (a) direct
costs (including, without limitation, legal, accounting and investment banking
fees, and sales commissions), (b) taxes paid or payable as a result thereof and
(c) reasonable reserves established for indemnification obligations in
connection with such Asset Disposition; 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.
"New Commitment Agreement" has the meaning assigned to such term in Section
3.4(b).
"Note" or "Notes" means the Revolving Notes and/or the Term 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).
"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" has the meaning assigned to such term in Section 3.11.
"Participation Interest" means a purchase by a Lender of a participation in
Letters of Credit or LOC Obligations as provided in Section 2.2 or in any Loans
as provided in Section 3.14.
16
"Parts and Supplies Inventory" means all of each Credit Party's Inventory
consisting of parts and supplies.
"PBGC" means the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA and any successor thereof.
"Permitted Acquisition" means an Acquisition by any Credit Party which
Acquisition complies with the following requirements (in each case to the
reasonable satisfaction of the Agent) (i) the Acquired Company shall be an
operating company that engages in a line of business substantially similar to
the line of business of the Consolidated Parties engaged in on the Closing Date
(or a holding company which owns such an operating company), (ii) the Purchase
Price for such Acquisition shall not exceed $40 million, and, the aggregate
Purchase Price paid for all Acquisitions during any 12-month period shall not
exceed $100 million, (iii) the Borrower shall have completed its due diligence
process with respect to such Acquisition, (iv) such Acquisition shall not be
hostile, (v) no Default or Event of Default shall exist immediately prior to or
immediately after the consummation of such Acquisition, (vi) the Agent shall
have received all items required by Sections 7.12, 7.14 and 7.15 in connection
with the Acquired Company if required to be delivered prior to the consummation
of the Permitted Acquisition, (vii) the Total Debt Leverage Ratio after giving
pro forma effect to such Acquisition must be 0.25 less than the maximum
allowable Total Debt Leverage Ratio as of the fiscal quarter ending immediately
preceding the date of such Acquisition and (viii) the Borrower shall have
delivered to the Agent: (A) a review of the financial condition of the Acquired
Company conducted by a firm of independent certified public accountants of
nationally recognized standing reasonably acceptable to the Agent, (B) the
"Board Paper" for the Acquired Company (i.e., a short memo prepared by the
Borrower with respect to the Acquired Company), (C) a description of such
Acquisition in reasonable detail and the corresponding documentation and
historical financial information of the Acquired Company, (D) financial
projections demonstrating that after giving effect to such Acquisition, the
Consolidated Parties shall be in compliance with all of the covenants set forth
in Section 7.11 for the period commencing with the date of such Acquisition
through the last day covered by the financial projections delivered to the Agent
on the Closing Date pursuant to Section 5.1(c)(iv), (E) a Pro Forma Compliance
Certificate with respect to such Acquisition demonstrating that, upon giving
effect to such Acquisition, the Consolidated Parties shall be in compliance on a
Pro Forma Basis with all of the covenants contained herein including, without
limitation, the covenants set forth in Section 7.11 hereof and (F) environmental
assessment reports and related documents of a recent date with respect to all
real property owned or leased by the Acquired Company. All information,
documents and financial data required in connection with any Permitted
Acquisition shall be furnished to the Agent at least 15 business days prior to
the closing of such proposed Acquisition.
"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
17
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(a), (v) Guaranty Obligations permitted by
Section 8.1; (vi) advances or loans to directors or officers that do not exceed
$500,000 in the aggregate at any one time outstanding for all of the
Consolidated Parties for the purchase of Capital Stock of the Borrower; (vii)
Investments in any Credit Party, (viii) advances to officers, directors and
employees for travel, entertainment or other business-related expenses incurred
or anticipated to be incurred in the ordinary course of business, (ix)
promissory notes and other instruments received by a Credit Party as
consideration in connection with asset sales permitted hereunder and (x)
Permitted Acquisitions.
"Permitted Liens" means:
(i) Liens in favor of the 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;
18
(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;
(viii) leases or subleases granted to others not interfering in any
material respect with the business of any Consolidated Party;
(ix) liens evidenced by precautionary filings of lessors under
operating leases;
(x) normal and customary rights of setoff upon deposits of cash in
favor of banks or other depository institutions; and
(xi) Liens existing as of the Closing Date and set forth on
Schedule 1.1(b); 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 Agent by each of the Credit Parties, as amended,
modified, restated or supplemented from time to time.
"Price Reduction Election" has the meaning assigned to such term in the
definition of "Applicable Percentage".
"Prime Rate" means the per annum rate of interest established from time to
time by First Union National Bank as its prime rate, which rate may not be the
lowest rate of interest charged by First Union National Bank to its customers.
19
"Pro Forma Basis" shall mean, with respect to any Permitted Acquisition or
other transaction permitted hereunder, that such Permitted Acquisition or other
transaction shall be deemed to have occurred as of the first day of the four
fiscal-quarter period ending as of the most recent fiscal quarter end preceding
the date of such Permitted Acquisition or other transaction. In connection with
any calculation of the financial covenants set forth in Section 7.11, upon
giving effect to a Permitted Acquisition or other transaction on a Pro Forma
Basis, any Indebtedness of the Acquired Company which is retired in connection
with such transaction, any Indebtedness incurred by a Credit Party to finance
such Permitted Acquisition or other transaction and any other financial
statement components shall be adjusted in a manner mutually satisfactory to the
Agent and the Borrower. For purposes of any such calculation, the principles set
forth in the second paragraph of Section 1.3 shall be applicable.
"Pro Forma Compliance Certificate" means a certificate of an Executive Officer
of the Borrower delivered to the 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 as of the most recent fiscal quarter end preceding the
date of such Permitted Acquisition.
"Property" means any interest in any kind of property or asset, whether real,
personal or mixed, or tangible or intangible.
"Purchase Price" means all cash paid, notes issued and/or Indebtedness assumed
by a Credit Party as the consideration paid by such Credit Party in connection
with a Permitted Acquisition.
"Register" has 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.
"Rental Equipment" means all of each Credit Party's Inventory consisting of
equipment which is rented by such Credit Party in the ordinary course of
business or is held for lease by such Credit Party.
"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.
20
"Required Lenders" means, at any time, Lenders which are then in compliance
with their obligations hereunder (as determined by the Agent) and holding in the
aggregate at least 51% of (i) the Revolving Commitments (and Participation
Interests therein) and the outstanding Term Loan Commitments 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, (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 and (iv) any payment to any Affiliate of any
Credit Party except to the extent expressly permitted in this Credit Agreement.
"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" has the meaning given to such term in Section
2.1(a).
"Revolving Loans" has the meaning given to such term in Section 2.1(a).
"Revolving Note" or "Revolving Notes" means the promissory notes of the
Borrower in favor of each of the Lenders evidencing the Revolving Loans provided
pursuant to Section 2.1(e),
21
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 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 Agent by each of the Credit Parties, as amended,
modified, restated or supplemented from time to time.
"Senior Debt Leverage Ratio" means, as of the last day of each fiscal quarter,
the ratio of Consolidated Senior Indebtedness (computed as of the last day of
each such fiscal quarter) to Consolidated EBITDA (computed for the four fiscal
quarters then ending).
"Senior Subordinated Notes" means the $100,000,000 10% Senior Subordinated
Notes of the Borrower issued by the Borrower on November 25, 1997 due in 2004.
"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 taken on a going concern basis 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 taken
on a going concern basis 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
22
light of all the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured liability.
"Standby Letter of Credit Fee" shall have the meaning assigned to such term in
Section 3.5(b)(i).
"Subordinated Debt" means (a) the Senior Subordinated Notes, (b) any other
publicly-issued unsecured Indebtedness incurred by the Borrower, which is
expressly subordinated and made junior to the payment and performance in full of
the Credit Party Obligations and contains terms and conditions reasonably
satisfactory to the Required Lenders and (c) any other unsecured Indebtedness
incurred by the Borrower in connection with a Permitted Acquisition, which is
expressly subordinated and made junior to the payment and performance in full of
the Credit Party Obligations and contains terms and conditions reasonably
satisfactory to the Required Lenders; provided that in the case of Indebtedness
referred to in clause (c) the Lenders acknowledge that subordination and other
terms and conditions substantially identical, in the sole judgment of the Agent,
to those contained in the form of Subordinated Note attached hereto as Exhibit 1
are satisfactory; and provided further, that the aggregate principal amount of
the Indebtedness referred to in clause (c) at any time outstanding shall not
exceed $5,000,000.
"Subordinated Payments" means any fees, expenses or other payments incurred or
owing by any Credit Party, which, in each case, are specifically subordinated in
right of payment to the prior payment of the Credit Party Obligations on terms
and conditions satisfactory to the Required Lenders.
"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.
"Subsidiary Guarantor" means each of the Persons identified as a "Subsidiary
Guarantor" on the signature pages hereto and each Subsidiary of a Credit Party
which may hereafter execute a Joinder Agreement, together with their successors
and permitted assigns, and "Subsidiary Guarantor" means any one of them.
"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" has the meaning assigned to such term in Section 3.11.
23
"Term Loan" has the meaning assigned to such term in Section 2.3(a).
"Term Loan Commitment" means, with respect to each Lender, the commitment
of such Lender to make its portion of the Term Loan in a principal amount equal
to such Lender's Term Loan Commitment Percentage of the Term Loan Committed
Amount.
"Term Loan Commitment Percentage" means, for any Lender, the percentage
identified as its Term Loan Commitment Percentage on Schedule 2.1(a), as such
percentage may be modified in connection with any assignment made in accordance
with the provisions of Section 11.3.
"Term Loan Committed Amount" has the meaning assigned to such term in
Section 2.3(a).
"Term Note" or "Term Notes" means the promissory notes of the Borrower in
favor of each of the Lenders evidencing the Term Loan provided pursuant to
Section 2.3(f), individually or collectively, as appropriate, as such promissory
notes may be amended, modified, restated, supplemented, extended, renewed or
replaced from time to time.
"Total Debt Leverage Ratio" means, as of the last day of each fiscal
quarter of the Borrower, the ratio of Consolidated Funded Indebtedness to
Consolidated EBITDA (computed for the four fiscal quarters then ending).
"Trade Letter of Credit Fee" has the meaning assigned to such term in Section
3.5(b)(ii).
"Unused Line Fee" has the meaning assigned to such term in Section 3.5(a).
"Unused Line Fee Calculation Period" has 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.
----------------------------
24
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.
----------------
Unless otherwise defined or specified herein, all accounting terms shall be
construed herein and all accounting determinations for purposes of determining
compliance with Section 7.11 hereof and otherwise to be made under this Credit
Agreement shall be made in accordance with GAAP applied on a basis consistent in
all material respects with the financial statements delivered pursuant to
Section 5.1(c) (the "Financials"). All financial statements required to be
delivered hereunder from and after the Closing Date and all financial records
shall be maintained in accordance with GAAP as in effect as of the date of the
Financials. If GAAP shall change from the basis used in preparing the
Financials, the certificates required to be delivered pursuant to Section 7.1
demonstrating compliance with the covenants contained herein shall include
calculations setting forth the adjustments necessary to demonstrate how the
Consolidated Parties are in compliance with the financial covenants based upon
GAAP as in effect on the Closing Date. If the Credit Parties shall change their
method of inventory accounting, all calculations necessary to determine
compliance with the covenants contained herein shall be made as if such method
of inventory accounting had not been so changed.
Notwithstanding the above, the parties hereto acknowledge and agree that,
for purposes of all calculations made in determining compliance for any
applicable period with the financial covenants set forth in Section 7.11
(including without limitation for purposes of the definitions of "Applicable
Percentage" and "Pro Forma Basis" set forth in Section 1.1), any Indebtedness of
an Acquired Company which is retired in connection with a Permitted Acquisition
shall be excluded from such calculations and deemed to have been retired as of
the first day of such applicable period and income statement items and other
balance sheet items (whether positive or negative) attributable to the Acquired
Company acquired in such transaction shall be included in such calculations to
the extent relating to such applicable period, subject to adjustments mutually
acceptable to the Agent and the Borrower.
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
25
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 amount
of Revolving Obligations outstanding shall not exceed the lesser of (A) TWO
HUNDRED TWENTY-FIVE MILLION DOLLARS ($225,000,000) (as such aggregate maximum
amount may be reduced from time to time as provided in Section 3.4, the
"Revolving Committed Amount") and (B) the Borrowing Base less the outstanding
Term Loan less LOC Obligations outstanding; provided, further, (ii) with regard
to each Lender individually, the amount of such Lender's Revolving Commitment
Percentage of the sum of the Revolving Loans plus LOC Obligations outstanding
shall not exceed such Lender's Revolving Committed Amount. Revolving Loans may
consist of Base Rate Loans or Eurodollar Loans, or a combination thereof, as the
Borrower may request; provided, however, that no more than ten (10) Eurodollar
Loans shall be outstanding hereunder at any time, of which no more than seven
(7) of such Eurodollar Loans shall be Revolving Loans (it being understood that,
for purposes hereof, Eurodollar Loans with different Interest Periods shall be
considered as separate Eurodollar Loans, even if they begin on the same date,
although borrowings, extensions and conversions may, in accordance with the
provisions hereof, be combined at the end of existing Interest Periods to
constitute a new Eurodollar Loan with a single Interest Period). Revolving Loans
hereunder may be repaid and reborrowed in accordance with the provisions hereof.
(b) Revolving Loan Borrowings.
-------------------------
(i) Notice of Borrowing. The Borrower shall request a Revolving Loan
borrowing by written notice (or telephonic notice promptly confirmed in
writing) to the Agent not later than 12:00 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 Eurodollar Loans. Each such request for
borrowing shall be irrevocable and shall specify (A) that a Revolving Loan
is requested, (B) the date of the requested borrowing (which shall be a
Business Day), (C) the aggregate principal amount to be borrowed, and (D)
whether the borrowing shall be comprised of Base Rate Loans, Eurodollar
Loans or a combination thereof, and if Eurodollar Loans are requested, the
Interest Period(s) therefor. If the Borrower shall fail to specify in any
such Notice of Borrowing (I) an applicable Interest Period in the case of a
Eurodollar Loan, then such notice shall be deemed to be a request for an
Interest Period of one month, or (II) the type of Revolving Loan requested,
then such notice shall be deemed to be a request for a Base Rate Loan
hereunder. The Agent shall give notice to each affected Lender promptly
upon receipt of each Notice of Borrowing pursuant to this Section
2.1(b)(i), the contents thereof and each such Lender's share of any
borrowing to be made pursuant thereto.
(ii) Minimum Amounts. Each Revolving Loan that is a Base Rate Loan shall
be in a minimum aggregate principal amount of $1,000,000 and integral
multiples of $1,000,000 in excess thereof (or the remaining amount of the
Revolving Committed
26
Amount, if less). Each Revolving Loan that is a Eurodollar Loan shall be in
a minimum aggregate principal amount of $5,000,000 and integral multiples
of $1,000,000 in excess thereof.
(iii) Advances. Each Lender will make its Revolving Commitment Percentage
of each Revolving Loan borrowing available to the Agent for the account of
the Borrower as specified in Section 3.15(a), or in such other manner as
the Agent may specify in writing, by 1:00 P.M. (Charlotte, North Carolina
time) on the date specified in the applicable Notice of Borrowing in
Dollars and in funds immediately available to the Agent. Such borrowing
will then be made available to the Borrower by the Agent by crediting the
account of the Borrower on the books of such office with the aggregate of
the amounts made available to the Agent by the Lenders and in like funds as
received by the 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) Eurodollar Loans. During such periods as Revolving Loans shall be
comprised in whole or in part of Eurodollar Loans, such Eurodollar Loans
shall bear interest at a per annum rate equal to the Adjusted Eurodollar
Rate.
Interest on Revolving Loans shall be payable in arrears on each applicable
Interest Payment Date (or at such other times as may be specified herein).
(e) Revolving Notes. The Revolving Loans made by each Lender shall be
evidenced by a duly executed promissory note of the Borrower to such Lender in
an original principal amount equal to such Lender's Revolving Commitment
Percentage of the Revolving Committed Amount and in substantially the form of
Exhibit 2.1(e).
(f) Syndication Period. Notwithstanding any provision herein to the
contrary, until the earlier of (i) ninety (90) days following the Closing Date
and (ii) the closing of the primary syndication of the Loans, the Borrower shall
only be permitted to make Revolving Loans which are Base Rate Loans or
Eurodollar Loans having an Interest Period of thirty (30) days.
2.2 Letter of Credit Subfacility.
----------------------------
27
(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; provided,
however, that (i) the LOC Obligations outstanding shall not at any time exceed
TWENTY-FIVE MILLION DOLLARS ($25,000,000) (the "LOC Committed Amount"), (ii)
with regard to the Lenders collectively, the amount of the Revolving Obligations
shall not exceed the lesser of (A) the Revolving Committed Amount and (B) the
Borrowing Base less the outstanding Term Loan less LOC Obligations outstanding
and (iii) with regard to each Lender individually, the amount of the sum of the
Revolving Loans plus LOC Obligations 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 shall comply with the
related LOC Documents. The issuance and expiry dates of each Letter of Credit
shall be a Business Day.
(b) Notice and Reports. The request for the issuance of a Letter of
Credit shall be submitted by the Borrower to the Issuing Lender at least three
(3) Business Days prior to the requested date of issuance. The Issuing Lender
will, at least quarterly and more frequently upon request, disseminate to each
of the Lenders a detailed report specifying the Letters of Credit which are then
issued and outstanding and any activity with respect thereto which may have
occurred since the date of the prior report, and including therein, among other
things, the beneficiary, the face amount and the expiry date, as well as any
payment or expirations which may have occurred.
(c) Participation. Each Lender, upon issuance of a Letter of Credit,
shall be deemed to have purchased without recourse a Participation Interest from
the Issuing Lender in such Letter of Credit and the obligations arising
thereunder and any collateral relating thereto, in each case in an amount equal
to its pro rata share of the obligations under such Letter of Credit (based on
the respective Revolving Commitment Percentages of the Lenders) and shall
absolutely, unconditionally and irrevocably assume and be obligated to pay to
the Issuing Lender and discharge when due, its pro rata share of the obligations
arising under such Letter of Credit. Without limiting the scope and nature of
each Lender's Participation Interest in any Letter of Credit, to the extent that
the Issuing Lender has not been reimbursed as required hereunder or under any
such Letter of Credit, each such Lender shall pay to the Issuing Lender its pro
rata share of such unreimbursed drawing in same day funds on the day of
notification by the Issuing Lender of an unreimbursed drawing pursuant to the
provisions of subsection (d) below. The obligation of each Lender to so
reimburse the Issuing Lender shall be absolute and unconditional and shall not
be affected by the occurrence of a Default, an Event of Default or any other
occurrence or event. Any such reimbursement shall not
28
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 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 other
Lenders of the amount of any unreimbursed drawing and each Lender shall promptly
pay to the Agent for the account of the Issuing Lender in Dollars and in
immediately available funds, the amount of such Lender's pro rata share of such
unreimbursed drawing. Such payment shall be made on the day such notice is
received by such Lender from the Issuing Lender if such notice is received at or
before 2:00 P.M. (Charlotte, North Carolina time) otherwise such payment shall
be made at or before 12:00 Noon (Charlotte, North Carolina time) on the Business
Day next succeeding the day such notice is received. If such Lender does not pay
such amount to the Issuing Lender in full upon such request, such Lender shall,
on demand, pay to the Agent for the account of the Issuing Lender interest on
the unpaid amount during the period from the date of such drawing until such
Lender pays such amount to the Issuing Lender in full at a rate per annum equal
to, if paid within two (2) Business Days of the date that such Lender is
required to make payments of such amount pursuant to the preceding sentence, the
Federal Funds Rate and thereafter at a rate equal to the Base Rate. Each
Lender's obligation to make such payment to the Issuing Lender, and the right of
the Issuing Lender to receive the same, shall be absolute and unconditional,
shall not be affected by any circumstance whatsoever and without regard to the
termination of this Credit Agreement or the Commitments hereunder, the existence
of a Default or Event of Default or the acceleration of the obligations of the
Borrower hereunder and shall be made without any offset, abatement, withholding
or reduction whatsoever. Simultaneously with the making of each such payment by
a Lender to the Issuing Lender, such Lender shall, automatically and without any
further action on the part of the Issuing Lender or such Lender, acquire a
Participation Interest in an amount equal to such payment (excluding the portion
of such payment constituting interest owing to the Issuing
29
Lender) in the related unreimbursed drawing portion of the LOC Obligation and in
the interest thereon and in the related LOC Documents, and shall have a claim
against the Borrower with respect thereto.
(e) Repayment with Revolving Loans. On any day on which the Borrower
shall have requested, or been deemed to have requested, a Revolving Loan advance
to reimburse a drawing under a Letter of Credit, the Agent shall give notice to
the Lenders that a Revolving Loan has been requested or deemed requested by the
Borrower to be made in connection with a drawing under a Letter of Credit, in
which case a Revolving Loan advance comprised of Base Rate Loans (or Eurodollar
Loans to the extent the Borrower has complied with the procedures of Section
2.1(b)(i) with respect thereto) shall be immediately made to the Borrower by all
Lenders (notwithstanding any termination of the Commitments pursuant to Section
9.2) pro rata based on the respective Revolving Commitment Percentages of the
Lenders (determined before giving effect to any termination of the Commitments
pursuant to Section 9.2) and the proceeds thereof shall be paid directly to the
Issuing Lender for application to the respective LOC Obligations. Each such
Lender hereby irrevocably agrees to make its pro rata share of each such
Revolving Loan immediately upon any such request or deemed request in the
amount, in the manner and on the date specified in the preceding sentence
notwithstanding (i) the amount of such borrowing may not comply with the minimum
amount for advances of Revolving Loans otherwise required hereunder, (ii)
whether any conditions specified in Section 5.2 are then satisfied, (iii)
whether a Default or an Event of Default then exists, (iv) failure for any such
request or deemed request for Revolving Loan to be made by the time otherwise
required hereunder, (v) whether the date of such borrowing is a date on which
Revolving Loans are 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 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.
30
(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. The Issuing Lender may have the
Letters of Credit be subject to The Uniform Customs and Practice for Documentary
Credits, as published as of the date of issue by the International Chamber of
Commerce (the "UCP"), in which case the UCP may be incorporated therein and
deemed in all respects to be a part thereof.
(i) Indemnification; Nature of Issuing Lender's Duties.
(i) In addition to its other obligations under this Section 2.2, the
Borrower hereby agrees to pay, and protect, indemnify and save each Lender
harmless from and against, any and all claims, demands, liabilities,
damages, losses, costs, charges and expenses (including reasonable
attorneys' fees) that such Lender may incur or be subject to as a
consequence, direct or indirect, of (A) the issuance of any Letter of
Credit or (B) the failure of such Lender to honor a drawing under a Letter
of Credit as a result of any act or omission, whether rightful or wrongful,
of any present or future de jure or de facto government or Governmental
Authority (all such acts or omissions, herein called "Government Acts").
(ii) As between the Borrower and the Lenders (including the Issuing
Lender), the Borrower shall assume all risks of the acts, omissions or
misuse of any Letter of Credit by the beneficiary thereof. No Lender
(including the Issuing Lender) shall be responsible: (A) for the form,
validity, sufficiency, accuracy, genuineness or legal effect of any
document submitted by any party in connection with the application for and
issuance of any Letter of Credit, even if it should in fact prove to be in
any or all respects invalid, insufficient, inaccurate, fraudulent or
forged; (B) for the validity or sufficiency of any instrument transferring
or assigning or purporting to transfer or assign any Letter of Credit or
the rights or benefits thereunder or proceeds thereof, in whole or in part,
that may prove to be invalid or ineffective for any reason; (C) for errors,
omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise, whether or not
they be in cipher; (D) for any loss or delay in the transmission or
otherwise of any
31
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.
(j) Notwithstanding anything to the contrary contained in this subsection
(j), 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 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.
(k) 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
32
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.
(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 Term Loan.
---------
(a) Term 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 on the Closing Date such
Lender's Term Loan Commitment Percentage of a term loan in Dollars (the "Term
Loan") in the aggregate principal amount of ONE HUNDRED MILLION DOLLARS
($100,000,000) (the "Term Loan Committed Amount"). The Term Loan may consist of
Base Rate Loans or Eurodollar Loans, or a combination thereof, as the Borrower
may request; provided, however, that no more than ten (10) Eurodollar Loans
shall be outstanding hereunder at any time of which no more than three (3) of
such Eurodollar Loans shall be Term Loans (it being understood that, for
purposes hereof, Eurodollar Loans with different Interest Periods shall be
considered as separate Eurodollar Loans, even if they begin on the same date,
although borrowings, extensions and conversions may, in accordance with the
provisions hereof, be combined at the end of existing Interest Periods to
constitute a new Eurodollar Loan with a single Interest Period). Amounts repaid
on the Term Loan may not be reborrowed.
(b) Borrowing Procedures. The Borrower shall submit an appropriate Notice
of Borrowing to the Agent not later than 11:00 A.M. (Charlotte, North Carolina
time) on the Closing Date, with respect to the portion of the Term Loan
initially consisting of a Base Rate Loan, or on the third Business Day prior to
the Closing Date, with respect to the portion of the Term Loan initially
consisting of one or more Eurodollar Loans, which Notice of Borrowing shall be
irrevocable and shall specify (i) that the funding of a Term Loan is requested
and (ii) whether the funding of the Term Loan shall be comprised of Base Rate
Loans, Eurodollar Loans or a combination thereof, and if Eurodollar Loans are
requested, the Interest Period(s) therefor. If the Borrower shall fail to
deliver such Notice of Borrowing to the Agent by 11:00 A.M. (Charlotte, North
Carolina time) on the third Business Day prior to the Closing Date, then the
full amount of the Term Loan shall be disbursed on the Closing Date as a Base
Rate Loan. Each Lender shall make its Term Loan Commitment Percentage of the
Term Loan available to the Agent for the account of the Borrower at the office
of the Agent specified in Schedule 2.1(a), or at such other office as the Agent
may designate in writing, by 1:00 P.M. (Charlotte, North Carolina time) on the
Closing Date in Dollars and in funds immediately available to the Agent.
33
(c) Minimum Amounts. Each Eurodollar Loan or Base Rate Loan that is
part of the Term Loan shall be in an aggregate principal amount that is not
less than $1,000,000 and integral multiples of $500,000 (or the then
remaining principal balance of the Term Loan, if less).
(d) Repayment of Term Loan. The principal amount of the Term Loan
shall be due and payable in full on the Maturity Date, unless accelerated
sooner pursuant to Section 9.2.
(e) Interest. Subject to the provisions of Section 3.1, the Term Loan
shall bear interest at a per annum rate equal to:
(i) Base Rate Loans. During such periods as the Term Loan shall
be comprised in whole or in part of Base Rate Loans, such Base Rate
Loans shall bear interest at a per annum rate equal to the Adjusted
Base Rate.
(ii) Eurodollar Loans. During such periods as the Term Loan shall
be comprised in whole or in part of Eurodollar Loans, such Eurodollar
Loans shall bear interest at a per annum rate equal to the Adjusted
Eurodollar Rate.
Interest on the Term Loan shall be payable in arrears on each applicable
Interest Payment Date (or at such other times as may be specified herein).
(f) Term Notes. The portion of the Term Loan 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 Term Loan
Commitment Percentage of the Term Loan and substantially in the form of
Exhibit 2.3(f).
(g) Syndication Period. Notwithstanding any provision herein to the
contrary, until the earlier of (i) ninety (90) days following the Closing
Date and (ii) the closing of the primary syndication of the Loans, the
Borrower shall only be permitted to make Term Loans which are Base Rate
Loans or Eurodollar Loans having an Interest Period of thirty (30) days.
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
34
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, Eurodollar Loans may be converted into Base Rate Loans
or extended as Eurodollar Loans for new Interest Periods only on the last day of
the Interest Period applicable thereto, (ii) without the consent of the Required
Lenders, Eurodollar Loans may be extended, and Base Rate Loans may be converted
into Eurodollar 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, Eurodollar Loans shall be subject to the terms of the
definition of "Interest Period" set forth in Section 1.1 and shall be in such
minimum amounts as provided in, with respect to Revolving Loans, Section
2.1(b)(ii) or, with respect to the Term Loan, Section 2.3(c), (iv) no more than
ten (10) Eurodollar Loans shall be outstanding hereunder at any time, of which
no more than seven (7) of such Eurodollar Loans shall be Revolving Loans and no
more than (3) of such Eurodollar Loans shall be Term Loans (it being understood
that, for purposes hereof, Eurodollar Loans with different Interest Periods
shall be considered as separate Eurodollar Loans, even if they begin on the same
date, although borrowings, extensions and conversions may, in accordance with
the provisions hereof, be combined at the end of existing Interest Periods to
constitute a new Eurodollar Loan with a single Interest Period) and (v) any
request for extension or conversion of a Eurodollar Loan which shall fail to
specify an Interest Period shall be deemed to be a request for an Interest
Period of one month. Each such extension or conversion shall be effected by the
Borrower by giving a Notice of Extension/Conversion (or telephonic notice
promptly confirmed in writing) to the office of the Agent specified in Schedule
2.1(a), or at such other office as the Agent may designate in writing, prior to
12:00 A.M. (Charlotte, North Carolina time) on the Business Day of, in the case
of the conversion of a Eurodollar Loan into a Base Rate Loan, and on the third
Business Day prior to, in the case of the extension of a Eurodollar Loan as, or
conversion of a Base Rate Loan into, a Eurodollar Loan, the date of the proposed
extension or conversion, specifying the date of the proposed extension or
conversion, the Loans to be so extended or converted, the types of Loans into
which such Loans are to be converted and, if appropriate, the applicable
Interest Periods with respect thereto. Each request for extension or conversion
shall be irrevocable and shall constitute a representation and warranty by the
Borrower of the matters specified in subsections (b), (c), (d), (e) and (f) of
Section 5.2. In the event the Borrower fails to request extension or conversion
of any Eurodollar Loan in accordance with this Section, or any such conversion
or extension is not permitted or required by this Section, then such Eurodollar
Loan shall be automatically converted into a Base Rate Loan at the end of the
Interest Period applicable thereto. The Agent shall give each Lender notice as
promptly as practicable of any such proposed extension or conversion affecting
any Loan.
3.3 Prepayments.
35
(a) Voluntary Prepayments. The Borrower shall have the right to prepay
Loans in whole or in part from time to time; provided, however, that each
partial prepayment of Loans shall be in a minimum principal amount of
$5,000,000 and integral multiples of $1,000,000. 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 first to
Revolving Loans and then to the Term Loan, in each case first to Base Rate
Loans and then to Eurodollar Loans in direct order of Interest Period
maturities. All prepayments under this Section 3.3(a) shall be subject to
Section 3.12, but otherwise without premium or penalty.
(b) Mandatory Prepayments.
(i) Revolving Committed Amount. If at any time (A) the amount of
the Revolving Obligations then outstanding shall exceed the lesser of
(x) the Revolving Committed Amount and (y) the Borrowing Base less the
outstanding Term Loan or (B) the aggregate amount of LOC Obligations
outstanding shall exceed the LOC Committed Amount, the Borrower shall
immediately make payment on the Loans and/or to a cash collateral
account in respect of the LOC Obligations, in an amount sufficient to
eliminate the deficiency.
(ii) Asset Disposition. At such time as the Borrower or any of
its Subsidiaries consummates an Asset Disposition, the Borrower shall
immediately notify the Agent of (a) the consummation of such Asset
Disposition and (b) the amount of Net Cash Proceeds received by the
Borrower or Subsidiary in connection with such Asset Disposition. The
Credit Parties hereby agree that the Borrower shall forward 100% of
the Net Cash Proceeds of such Asset Disposition to the Lenders as a
prepayment of the Loans (to be applied as set forth in Section
3.3(b)(iv) below).
(iii) Casualty and Condemnation Proceeds. At such time as the
Borrower or any of its Subsidiaries shall be required to pay cash
proceeds to the Agent from any insurance policy or from any
condemnation or taking pursuant to Section 7.6 hereof, the Borrower
shall immediately notify the Agent thereof and shall forward 100% of
the cash proceeds to the Agent as required by Section 7.6. If the
Agent elects to apply such proceeds to the prepayment of the Loans
pursuant to Section 7.6, such prepayment shall be applied as set forth
in Section 3.3(b)(iv) below.
(iv) Term Loan. If at any time after the Revolving Commitments
have been terminated in full and permanently reduced to zero the
amount of the Term Loans outstanding shall exceed the Borrowing Base,
the Borrower shall immediately make payment on the Term Loans in an
amount sufficient to eliminate the deficiency.
(v) Application of Mandatory Prepayments. All amounts required to
be paid pursuant to Section 3.3(b)(i) shall be applied first to
Revolving Loans and
36
then to a cash collateral account to secure LOC Obligations. All
amounts required to be prepaid pursuant to Sections 3.3(b)(ii) and
(iii) above shall be applied pro rata to (1) Revolving Loans and
(after all Revolving Loans have been repaid) to a cash collateral
account in respect of LOC Obligations and (2) the Term Loan. One or
more holders of the Term Loan may decline to accept a mandatory
prepayment under Sections 3.3(b)(ii) or (iii) to the extent there are
sufficient amounts outstanding under the Term Loan to be prepaid with
such prepayment, in which case such declined prepayments shall be
allocated pro rata among the Term Loan and Revolving Loans held by
Lenders accepting such prepayments. All amounts required to be paid
pursuant to Section 3.3(b)(iv) above shall be applied to the Term
Loan. Within the parameters of the applications set forth above,
prepayments shall be applied first to Base Rate Loans and then to
Eurodollar Loans in direct order of Interest Period maturities. All
prepayments under this Section 3.3(b) shall be subject to Section
3.12.
3.4 Termination, Reduction and Increase of Revolving Committed Amount.
(a) Termination and Reduction of Revolving Loan Commitments. 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 Agent; provided, that, no such termination or reduction shall be
made which would cause the amount of the Revolving Obligations outstanding
to exceed the lesser of (A) the Revolving Committed Amount and (B) the
Borrowing Base less the outstanding Term Loan, unless, concurrently with
such termination or reduction, the Loans are repaid to the extent necessary
to eliminate such excess. The Agent shall promptly notify each affected
Lender of receipt by the Agent of any notice from the Borrower pursuant to
this Section 3.4.
(b) Increase in Revolving Loan Commitments. The Borrower shall have
the right upon at least fifteen (15) Business Days' prior written notice to
the Agent to increase the Revolving Committed Amount by up to $50,000,000,
in a single increase, at any time on or after the Closing Date, subject,
however, in any such case, to satisfaction of the following conditions
precedent:
(i) no Default or Event of Default has occurred and is continuing
on the date on which such Revolving Committed Amount increase is to
become effective;
(ii) the representations and warranties set forth in Section 6 of
this Credit Agreement shall be true and correct in all material
respects on and as of the date on which such Revolving Committed
Amount increase is to become effective;
37
(iii) on or before the date on which such Revolving Committed Amount
increase is to become effective, the Agent shall have received, for its own
account, the mutually acceptable fees and expenses required by separate
agreement of the Borrower and the Agent to be paid in connection with such
increase;
(iv) such Revolving Committed Amount increase shall be an integral
multiple of $5,000,000 and shall in no event be less than $5,000,000; and
(v) such requested Revolving Commitment increase shall be effective
on such date only to the extent that, on or before such date, (A) the Agent
shall have received and accepted a corresponding amount of Additional
Commitment(s) pursuant to a commitment letter(s) acceptable to the Agent
from one or more Lenders acceptable to the Agent and, with respect to any
Lender that is not at such time a Lender hereunder, to the Borrower and (B)
each such Lender has executed an agreement in the form of Exhibit 3.4(b)
hereto (each such agreement a "New Commitment Agreement"), accepted in
writing therein by the Agent and, with respect to any Lender that is not at
such time a Lender hereunder, by the Borrower, with respect to the
Additional Commitment of such Lender.
3.5 Fees.
(a) Unused Line Fee. In consideration of the Revolving Commitments of the
Lenders hereunder, the Borrower agrees to pay to the Agent for the account of
each Lender a fee (the "Unused Line Fee") computed at a per annum rate equal to
the Applicable Percentage for Unused Line Fee then in effect on the Unused
Revolving Committed Amount for each day during the applicable Unused Line Fee
Calculation Period (hereinafter defined). The Unused Line Fee shall commence to
accrue on the Closing Date and shall be due and payable in arrears on the last
business day of each March, June, September and December (and any date that the
Revolving Committed Amount is reduced as provided in Section 3.4 and the
Maturity Date) for the immediately preceding quarter (or portion thereof) (each
such quarter or portion thereof for which the Unused Line Fee is payable
hereunder being herein referred to as an "Unused Line Fee Calculation Period"),
beginning with the first of such dates to occur after the Closing Date.
(b) Letter of Credit Fees.
(i) Letter of Credit Issuance Fee. In consideration of the issuance
of standby Letters of Credit hereunder, the Borrower promises to pay to the
Agent for the account of each Lender a fee (the "Standby Letter of Credit
Fee") on such Lender's Revolving Commitment Percentage of the average daily
maximum amount available to be drawn under each such standby Letter of
Credit computed at a per annum rate for each day from the date of issuance
to the date of expiration equal to the Applicable Percentage for Revolving
Loans which are Eurodollar Loans then in
38
effect. The Standby Letter of Credit Fee will be payable monthly in arrears
on the last Business Day of each calendar month for the immediately
preceding calendar month (or a portion thereof).
(ii) Trade Letter of Credit Fee. In consideration of the issuance of
trade Letters of Credit hereunder, the Borrower promises to pay to the
Agent for the account of each Lender a fee (the "Trade Letter of Credit
Fee") on such Lender's Revolving Commitment Percentage of the amount of
each drawing under any such trade Letter of Credit equal to three-eighths
percent (3/8%). The Trade Letter of Credit Fee will be payable on each date
of drawing under a trade Letter of Credit.
(iii) Issuing Lender Fees. In addition to the Standby Letter of
Credit Fee payable pursuant to clause (i) above and the Trade Letter of
Credit Fee payable pursuant to clause (ii) above, the Borrower promises to
pay to the Issuing Lender for its own account without sharing by the other
Lenders (A) a letter of credit fronting fee of one-quarter percent (1/4%)
per annum on the average daily maximum amount available to be drawn under
outstanding Letters of Credit payable monthly in arrears with the Standby
Letter of Credit Fee and the Trade 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 Agent, for its
own account and First Union Capital Markets, as applicable, the fees referred to
in the Agent's Fee Letters (collectively, the "Agent's Fees").
3.6 Capital Adequacy.
If any Lender has determined in good faith, 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. Each determination by any such Lender of amounts
owing under this Section shall, absent manifest error, be conclusive and binding
on the parties hereto.
3.7 Limitation on Eurodollar Loans.
39
If on or prior to the first day of any Interest Period for any Eurodollar
Loan:
(a) the Agent determines (which determination shall be conclusive)
that by reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for such
Interest Period; or
(b) the Required Lenders determine (which determination shall be
conclusive) and notify the Agent that the Eurodollar Rate will not
adequately and fairly reflect the cost to the Lenders of funding Eurodollar
Loans for such Interest Period;
then the Agent shall give the Borrower prompt notice thereof, and so long as
such condition remains in effect, the Lenders shall be under no obligation to
make additional Eurodollar Loans, continue Eurodollar Loans, or to convert Base
Rate Loans into Eurodollar Loans and the Borrower shall, on the last day(s) of
the then current Interest Period(s) for the outstanding Eurodollar Loans, either
prepay such Eurodollar Loans or convert such Eurodollar Loans into Base Rate
Loans in accordance with the terms of this Credit Agreement.
3.8 Illegality.
Notwithstanding any other provision 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 Eurodollar Loans as contemplated by this Credit Agreement, (a) such
Lender shall promptly give written notice of such circumstances to the Borrower
and the Agent (which notice shall be withdrawn whenever such circumstances no
longer exist), (b) the commitment of such Lender hereunder to make Eurodollar
Loans, continue Eurodollar Loans as such and convert a Base Rate Loan to
Eurodollar Loans, shall forthwith be canceled and, until such time as it shall
no longer be unlawful for such Lender to make or maintain Eurodollar Loans, such
Lender shall then have a commitment only to make a Base Rate Loan when a
Eurodollar Loan is requested and (c) such Lender's Loans then outstanding as
Eurodollar 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 Eurodollar 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
40
request or directive (whether or not having the force of law) of any such
Governmental Authority, central bank, or comparable agency:
(i) shall subject such Lender (or its Applicable Lending Office) to
any tax, duty, or other charge with respect to any Eurodollar Loans, its
Notes, or its obligation to make Eurodollar Loans, or change the basis of
taxation of any amounts payable to such Lender (or its Applicable Lending
Office) under this Credit Agreement or its Notes in respect of any
Eurodollar Loans (other than taxes imposed on the overall net income of
such Lender by the jurisdiction in which such Lender has its principal
office or such Applicable Lending Office);
(ii) shall impose, modify, or deem applicable any reserve, special
deposit, assessment, or similar requirement (other than the Eurodollar
Reserve Requirement utilized in the determination of the Adjusted
Eurodollar Rate) relating to any extensions of credit or other assets of,
or any deposits with or other liabilities or commitments of, such Lender
(or its Applicable Lending Office), including the Commitment of such Lender
hereunder; or
(iii) shall impose on such Lender (or its Applicable Lending Office)
or the London interbank market any other condition affecting this Credit
Agreement or its Notes or any of such extensions of credit or liabilities
or commitments;
and the result of any of the foregoing is to increase the cost to such Lender
(or its Applicable Lending Office) of making, converting into, continuing, or
maintaining any Eurodollar Loans or to reduce any sum received or receivable by
such Lender (or its Applicable Lending Office) under this Credit Agreement or
its Notes with respect to any Eurodollar Loans, then the Borrower shall pay to
such Lender on demand such amount or amounts as will compensate such Lender for
such increased cost or reduction. If any Lender requests compensation by the
Borrower under this Section 3.9, the Borrower may, by notice to such Lender
(with a copy to the Agent), suspend the obligation of such Lender to make or
continue Eurodollar Loans, or to convert Base Rate Loans into Eurodollar Loans,
until the event or condition giving rise to such request ceases to be in effect
(in which case the provisions of Section 3.10 shall be applicable); provided
that such suspension shall not affect the right of such Lender to receive the
compensation so requested. Each Lender shall promptly notify the Borrower and
the Agent of any event of which it has knowledge, occurring after the date
hereof, which will entitle such Lender to compensation pursuant to this Section
3.9 and will designate a different Applicable Lending Office if such designation
will avoid the need for, or reduce the amount of, such compensation and will
not, in the judgment of such Lender, be otherwise disadvantageous to it. Any
Lender claiming compensation under this Section 3.9 shall furnish to the
Borrower and the Agent a statement setting forth the additional amount or
amounts to be paid to it hereunder which shall be conclusive in the absence of
manifest error. In determining such amount, such Lender may use any reasonable
averaging and attribution methods.
3.10 Treatment of Affected Loans.
41
If the obligation of any Lender to make any Eurodollar Loan or to continue,
or to convert Base Rate Loans into, Eurodollar Loans shall be suspended pursuant
to Section 3.8 or 3.9 hereof, such Lender's Eurodollar Loans shall be
automatically converted into Base Rate Loans on the last day(s) of the then
current Interest Period(s) for such Eurodollar Loans (or, in the case of a
conversion required by Section 3.8 hereof, on such earlier date as such Lender
may specify to the Borrower with a copy to the Agent) and, unless and until such
Lender gives notice as provided below that the circumstances specified in
Section 3.8 or 3.9 hereof that gave rise to such conversion no longer exist:
(a) to the extent that such Lender's Eurodollar Loans have been so
converted, all payments and prepayments of principal that would otherwise
be applied to such Lender's Eurodollar Loans shall be applied instead to
its Base Rate Loans; and
(b) all Loans that would otherwise be made or continued by such
Lender as Eurodollar Loans shall be made or continued instead as Base Rate
Loans, and all Base Rate Loans of such Lender that would otherwise be
converted into Eurodollar Loans shall remain as Base Rate Loans.
If such Lender gives notice to the Borrower (with a copy to the Agent) that the
circumstances specified in Section 3.8 or 3.9 hereof that gave rise to the
conversion of such Lender's Eurodollar Loans pursuant to this Section 3.10 no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Eurodollar Loans made by other Lenders are
outstanding, such Lender's Base Rate Loans shall be automatically converted, on
the first day(s) of the next succeeding Interest Period(s) for such outstanding
Eurodollar Loans, to the extent necessary so that, after giving effect thereto,
all Loans held by the Lenders holding Eurodollar Loans and by such Lender are
held pro rata (as to principal amounts, interest rate basis, and Interest
Periods) in accordance with their respective Commitments.
3.11 Taxes.
(a) Any and all payments by any Credit Party to or for the account of
any Lender or the Agent hereunder or under any other Credit Document shall
be made free and clear of and without deduction for any and all present or
future taxes, duties, levies, imposts, deductions, charges or withholdings,
and all liabilities with respect thereto, excluding, in the case of each
Lender and the Agent, taxes imposed on its income, and franchise taxes
imposed on it, by the jurisdiction under the laws of which such Lender (or
its Applicable Lending Office) or the Agent (as the case may be) is
organized or any political subdivision thereof (all such non-excluded
taxes, duties, levies, imposts, deductions, charges, withholdings, and
liabilities being hereinafter referred to as "Taxes"). If 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 Agent, (i) the sum payable shall be increased as necessary so
that after making all required deductions (including deductions applicable
to additional sums payable under this Section 3.11) such Lender or the
Agent receives an amount equal to the sum it would have received had no
such deductions been
42
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 Agent, at its address referred to in Section
11.1, the original or a certified copy of a receipt evidencing payment
thereof.
(b) In addition, the Borrower agrees to pay any and all present or
future stamp or documentary taxes and any other excise or property taxes or
charges or similar levies which arise from any payment made under this
Credit Agreement or any other Credit Document or from the execution or
delivery of, or otherwise with respect to, this Credit Agreement or any
other Credit Document (hereinafter referred to as "Other Taxes").
(c) The Borrower agrees to indemnify each Lender and the Agent for
the full amount of Taxes and Other Taxes (including, without limitation,
any Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts
payable under this Section 3.11) paid by such Lender or the Agent (as the
case may be) and any liability (including penalties, interest, and
expenses) arising therefrom or with respect thereto.
(d) Each Lender that is not a United States person under Section
7701(a)(30) of the Code, on or prior to the date of its execution and
delivery of this Credit Agreement in the case of each Lender listed on the
signature pages hereof and on or prior to the date on which it becomes a
Lender in the case of each other Lender, and from time to time thereafter
if requested in writing by the Borrower or the Agent (but only so long as
such Lender remains lawfully able to do so), shall provide the Borrower and
the Agent with (i) Internal Revenue Service Form 1001 or 4224, as
appropriate, or any successor form prescribed by the Internal Revenue
Service, certifying that such Lender is entitled to benefits under an
income tax treaty to which the United States is a party which reduces the
rate of withholding tax on payments of interest or certifying that the
income receivable pursuant to this Credit Agreement is effectively
connected with the conduct of a trade or business in the United States,
(ii) Internal Revenue Service Form W-8 or W-9, as appropriate, or any
successor form prescribed by the Internal Revenue Service, and (iii) any
other form or certificate required by any taxing authority (including any
certificate required by Sections 871(h) and 881(c) of the Internal Revenue
Code), certifying that such Lender is entitled to an exemption from or a
reduced rate of tax on payments pursuant to this Credit Agreement or any of
the other Credit Documents.
(e) For any period with respect to which a Lender has failed to
provide the Borrower and the Agent with the appropriate form pursuant to
Section 3.11(d) (unless such failure is due to a change in treaty, law, or
regulation occurring subsequent to the date on which a form originally was
required to be provided), such Lender shall not be entitled to
indemnification under Section 3.11(a) 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
43
its failure to deliver a form required hereunder, the Borrower shall take
such steps as such Lender shall reasonably request to assist such Lender to
recover such Taxes.
(f) If any 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
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 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 the request of any Lender, the Borrower shall pay to such Lender such
amount or amounts as shall be sufficient (in the reasonable opinion of such
Lender) to compensate it for any loss, cost, or expense (including loss of
anticipated profits) incurred by it as a result of:
(a) any payment, prepayment, or conversion of a Eurodollar Loan for
any reason (including, without limitation, the acceleration of the Loans
pursuant to Section 9.2) on a date other than the last day of the Interest
Period for such Loan; or
(b) any failure by the Borrower for any reason (including, without
limitation, the failure of any condition precedent specified in Section 5
to be satisfied) to borrow, convert, continue, or prepay a Eurodollar Loan
on the date for such borrowing, conversion, continuation, or prepayment
specified in the relevant notice of borrowing, prepayment, continuation, or
conversion under this Credit Agreement.
With respect to Eurodollar Loans, such indemnification may include an amount
equal to the excess, if any, of (a) the amount of interest which would have
accrued on the amount so prepaid, or not so borrowed, converted or continued,
for the period from the date of such prepayment or of such failure to borrow,
convert or continue to the last day of the applicable Interest Period (or, in
the case of a failure to borrow, convert or continue, the Interest Period that
would have commenced on the date of such failure) in each case at the applicable
rate of interest for such Eurodollar Loans provided for herein (excluding,
however, the Applicable Percentage included therein, if any) over (b) the amount
of interest (as reasonably determined by such Lender) which would have accrued
to such Lender on such amount by placing such amount on deposit for a comparable
period with leading banks in the
44
interbank Eurodollar market. The covenants of the Borrower set forth in this
Section 3.12 shall survive the repayment of the Loans, LOC Obligations and other
obligations under the Credit Documents and the termination of the Commitments
hereunder.
3.13 Pro Rata Treatment.
Except to the extent otherwise provided herein:
(a) Loans. Each Loan, each payment or (subject to the terms of
Section 3.3) prepayment of principal of any Loan or reimbursement
obligations arising from drawings under Letters of Credit, each payment of
interest on the Loans or reimbursement obligations arising from drawings
under Letters of Credit, each payment of Unused Fees, each payment of the
Standby Letter of Credit Fee, each payment of the Trade 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 Loans and Participation
Interests.
(b) Advances. No Lender shall be responsible for the failure or delay
by any other Lender in its obligation to make its ratable share of a
borrowing hereunder; provided, however, that the failure of any Lender to
fulfill its obligations hereunder shall not relieve any other Lender of its
obligations hereunder. Unless the Agent shall have been notified in writing
by any Lender prior to the date of any requested borrowing that such Lender
does not intend to make available to the Agent its ratable share of such
borrowing to be made on such date, the Agent may assume that such Lender
has made such amount available to the Agent on the date of such borrowing,
and the Agent in reliance upon such assumption, may (in its sole discretion
but without any obligation to do so) make available to the Borrower a
corresponding amount. If such corresponding amount is not in fact made
available to the Agent, the Agent shall be able to recover such
corresponding amount from such Lender. If such Lender does not pay such
corresponding amount forthwith upon the Agent's demand therefor, the Agent
will promptly notify the Borrower, and the Borrower shall immediately pay
such corresponding amount to the Agent. The Agent shall also be entitled to
recover from the Lender or the Borrower, as the case may be, interest on
such corresponding amount in respect of each day from the date such
corresponding amount was made available by the Agent to the Borrower to the
date such corresponding amount is recovered by the Agent at a per annum
rate equal to (i) from the Borrower at the applicable rate for the
applicable borrowing pursuant to the Notice of Borrowing and (ii) from a
Lender at the Federal Funds Rate.
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
45
arising from, or in lieu of, such secured claim, received by such Lender under
any applicable bankruptcy, insolvency or other similar law or otherwise, or by
any other means, in excess of its pro rata share of such payment as provided for
in this Credit Agreement, such Lender shall promptly purchase from the other
Lenders a Participation Interest in such Loans, LOC Obligations and other
obligations in such amounts, and make such other adjustments from time to time,
as shall be equitable to the end that all Lenders share such payment in
accordance with their respective ratable shares as provided for in this Credit
Agreement. The Lenders further agree among themselves that if payment to a
Lender obtained by such Lender through the exercise of a right of setoff,
banker's lien, counterclaim or other event as aforesaid shall be rescinded or
must otherwise be restored, each Lender which shall have shared the benefit of
such payment shall, by repurchase of a Participation Interest theretofore sold,
return its share of that benefit (together with its share of any accrued
interest payable with respect thereto) to each Lender whose payment shall have
been rescinded or otherwise restored. The Borrower agrees that any Lender so
purchasing such a Participation Interest may, to the fullest extent permitted by
law, exercise all rights of payment, including setoff, banker's lien or
counterclaim, with respect to such Participation Interest as fully as if such
Lender were a holder of such Loan, LOC Obligations or other obligation in the
amount of such Participation Interest. Except as otherwise expressly provided in
this Credit Agreement, if any Lender or the Agent shall fail to remit to the
Agent or any other Lender an amount payable by such Lender or the Agent to the
Agent or such other Lender pursuant to 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 Agent or such other Lender at a rate per annum equal to the Federal
Funds Rate. If under any applicable bankruptcy, insolvency or other similar law,
any Lender receives a secured claim in lieu of a setoff to which this Section
3.14 applies, such Lender shall, to the extent practicable, exercise its rights
in respect of such secured claim in a manner consistent with the rights of the
Lenders under this Section 3.14 to share in the benefits of any recovery on such
secured claim.
3.15 Payments, Computations, Etc.
(a) Except as otherwise specifically provided herein, all payments
hereunder shall be made to the Agent in dollars in immediately available
funds, without setoff, deduction, counterclaim or withholding of any kind,
at the Agent's office specified in Schedule 2.1(a) not later than 2:00 P.M.
(Charlotte, North Carolina time) on the date when due. Payments received
after such time shall be deemed to have been received on the next
succeeding Business Day. The Agent may (but shall not be obligated to)
debit the amount of any such payment which is not made by such time to any
ordinary deposit account of the Borrower or any other Credit Party
maintained with the 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 Agent the Loans, LOC Obligations, Fees,
interest or other amounts payable by the Borrower hereunder to which such
payment is to be applied (and in the event that it fails so to specify, or
if such application would be inconsistent with the terms hereof, the Agent
shall distribute such payment to the Lenders in such manner as the Agent
may determine to be appropriate in respect of obligations owing by the
Borrower hereunder, subject to the terms of Section 3.13(a)). The Agent
will distribute such payments to such Lenders,
46
if any such payment is received prior to 12:00 Noon (Charlotte, North
Carolina time) on a Business Day in like funds as received prior to the end
of such Business Day and otherwise the Agent will distribute such payment
to such Lenders on the next succeeding Business Day. Whenever any payment
hereunder shall be stated to be due on a day which is not a Business Day,
the due date thereof shall be extended to the next succeeding Business Day
(subject to accrual of interest and Fees for the period of such extension),
except that in the case of Eurodollar Loans, if the extension would cause
the payment to be made in the next following calendar month, then such
payment shall instead be made on the next preceding Business Day. Except as
expressly provided otherwise herein, all computations of interest and fees
shall be made on the basis of actual number of days elapsed over a year of
360 days, except with respect to computation of interest on Base Rate Loans
which (unless the Base Rate is determined by reference to the Federal Funds
Rate) shall be calculated based on a year of 365 or 366 days, as
appropriate. Interest shall accrue from and include the date of borrowing,
but exclude the date of payment.
(b) Allocation of Payments After Event of Default. Notwithstanding
any other provisions of this Credit Agreement to the contrary, after the
occurrence and during the continuance of an Event of Default, all amounts
collected or received by the Agent or any Lender on account of the Credit
Party Obligations or any other amounts outstanding under any of the Credit
Documents or in respect of the Collateral shall be paid over or delivered
as follows:
FIRST, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation reasonable attorneys' fees) of the
Agent in connection with enforcing the rights of the Lenders under the
Credit Documents and any protective advances made by the Agent with respect
to the Collateral under or pursuant to the terms of the Collateral
Documents;
SECOND, to payment of any fees owed to the Agent;
THIRD, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation, reasonable attorneys' fees) of each
of the Lenders 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);
47
SIXTH, to all other Credit Party Obligations and other obligations
which shall have become due and payable under the Credit Documents or
otherwise and not repaid pursuant to clauses "FIRST" through "FIFTH" above;
and
SEVENTH, to the payment of the surplus, if any, to whoever may be
lawfully entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (ii) each of the Lenders shall receive an amount equal
to its pro rata share (based on the proportion that the then outstanding
Loans and LOC Obligations held by such Lender bears to the aggregate then
outstanding Loans and LOC Obligations) of amounts available to be applied
pursuant to clauses "THIRD", "FOURTH", "FIFTH" and "SIXTH" above; and (iii)
to the extent that any amounts available for distribution pursuant to
clause "FIFTH" above are attributable to the issued but undrawn amount of
outstanding Letters of Credit, such amounts shall be held by the Agent in a
cash collateral account and applied (A) first, to reimburse the Issuing
Lender from time to time for any drawings under such Letters of Credit and
(B) then, following the expiration of all Letters of Credit, to all other
obligations of the types described in clauses "FIFTH" and "SIXTH" above in
the manner provided in this Section 3.15(b).
3.16 Evidence of Debt.
(a) Each Lender shall maintain an account or accounts evidencing each
Loan made by such Lender to the Borrower from time to time, including the
amounts of principal and interest payable and paid to such Lender from time
to time under this Credit Agreement. Each Lender will make reasonable
efforts to maintain the accuracy of its account or accounts and to promptly
update its account or accounts from time to time, as necessary.
(b) The Agent shall maintain the Register pursuant to Section
11.3(c), and a subaccount for each Lender, in which Register and
subaccounts (taken together) shall be recorded (i) the amount, type and
Interest Period of each such Loan hereunder, (ii) the amount of any
principal or interest due and payable or to become due and payable to each
Lender hereunder and (iii) the amount of any sum received by the Agent
hereunder from or for the account of any Credit Party and each Lender's
share thereof. The Agent will make reasonable efforts to maintain the
accuracy of the subaccounts referred to in the preceding sentence and to
promptly update such subaccounts from time to time, as necessary.
(c) The entries made in the accounts, Register and subaccounts
maintained pursuant to subsection (b) of this Section 3.16 (and, if
consistent with the entries of the Agent, subsection (a)) shall be prima
facie evidence of the existence and amounts of the obligations of the
Credit Parties therein recorded; provided, however, that the failure of any
Lender or the Agent to maintain any such account, such Register or such
subaccount, as applicable, or
48
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.
SECTION 4
GUARANTY
4.1 The Guaranty.
Each of the Guarantors hereby jointly and severally guarantees to each
Lender, each Affiliate of a Lender that enters into a Hedging Agreement, and the
Agent as hereinafter provided, 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
49
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:
(a) at any time or from time to time, without notice to any
Guarantor, the time for any performance of or compliance with any of the
Credit Party Obligations shall be extended, or such performance or
compliance shall be waived;
(b) any of the acts mentioned in any of the provisions of any of the
Credit Documents, any Hedging Agreement or any other agreement or
instrument referred to in the Credit Documents or Hedging Agreements shall
be done or omitted;
(c) the maturity of any of the Credit Party Obligations shall be
accelerated, or any of the Credit Party Obligations shall be modified,
supplemented or amended in any respect, or any right under any of the
Credit Documents, any Hedging Agreement or any other agreement or
instrument referred to in the Credit Documents or Hedging Agreements shall
be waived or any other guarantee of any of the Credit Party Obligations or
any security therefor shall be released, impaired or exchanged in whole or
in part or otherwise dealt with;
(d) any Lien granted to, or in favor of, the Agent or any Lender or
Lenders as security for any of the Credit Party Obligations shall fail to
attach or be perfected; or
(e) any of the Credit Party Obligations shall be determined to be
void or voidable (including, without limitation, for the benefit of any
creditor of any Guarantor) or shall be subordinated to the claims of any
Person (including, without limitation, any creditor of any Guarantor).
With respect to its obligations hereunder, each Guarantor hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the Agent or any Lender exhaust any right,
power or remedy or proceed against any Person under any of the Credit Documents,
any Hedging Agreement or any other agreement or instrument referred to in the
Credit Documents or Hedging Agreements, or against any other Person under any
other guarantee of, or security for, any of the Credit Party Obligations.
4.3 Reinstatement.
The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Credit Party Obligations is
rescinded or must be otherwise restored by any holder of any of the Credit Party
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Agent and each Lender on demand for all reasonable
50
costs and expenses (including, without limitation, fees and expenses of counsel)
incurred by the Agent or such Lender in connection with such rescission or
restoration, including any such costs and expenses incurred in defending against
any claim alleging that such payment constituted a preference, fraudulent
transfer or similar payment under any bankruptcy, insolvency or similar law.
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 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 Agreement and the other
Collateral Documents and that the Lenders may exercise their remedies thereunder
in accordance with the terms thereof.
4.6 Rights of Contribution.
The Guarantors hereby agree as among themselves that, if any Guarantor
shall make an Excess Payment (as defined below), such Guarantor shall have a
right of contribution from each other Guarantor in an amount equal to such other
Guarantor's Contribution Share (as defined below) of such Excess Payment. The
payment obligations of any Guarantor under this Section 4.6 shall be subordinate
and subject in right of payment to the prior payment in full to the Agent and
the Lenders of the Guaranteed Obligations, and none of the Guarantors shall
exercise any right or remedy under this Section 4.6 against any other Guarantor
until payment and satisfaction in full of all of such Guaranteed Obligations.
For purposes of this Section 4.6, (a) "Guaranteed Obligations" shall mean any
obligations arising under the other provisions of this Section 4; (b) "Excess
Payment" shall mean the amount paid by any Guarantor in excess of its Pro Rata
Share of any Guaranteed Obligations; (c) "Pro Rata Share" shall mean, for any
Guarantor in respect of any payment of Guaranteed Obligations, the ratio
(expressed as a percentage) as of the date of such payment of Guaranteed
Obligations of (i) the amount by which the aggregate present fair salable value
of all of its assets and properties taken as a going concern exceeds the amount
of all debts and liabilities of such Guarantor (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of such
51
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
taken as a going concern 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
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):
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(a) Executed Credit Documents. Receipt by the Agent of duly executed
copies of: (i) this Credit Agreement, (ii) the Notes, (iii) the Collateral
Documents and (iv) all other Credit Documents, each in form and substance
reasonably acceptable to the Agent in its sole discretion.
(b) Corporate Documents. Receipt by the Agent of the following:
(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 Agent of (i) the unaudited
consolidated financial statements of the Borrower and its Subsidiaries
(excluding Falconite), including balance sheets and income and cash flow
statements for the five-month period ended May 31, 1998, in each case prepared
in conformity with GAAP and in form and substance reasonably satisfactory to the
Agent, (ii) the unaudited consolidated financial statements of Falconite and its
Subsidiaries, including balance sheets and income and cash flow statements for
the five-month period ended May 31, 1998, in each case prepared in conformity
with GAAP and in form and substance reasonably satisfactory to the Agent, (iii)
the unaudited combined consolidated financial statements of the Borrower and its
Subsidiaries (including Falconite), including balance sheets and income and cash
flow statements for the five-month period ended May 31, 1998, in each case
prepared in conformity with GAAP and in form and substance
53
reasonably satisfactory to the Agent, (iv) satisfactory financial projections
for the Borrower and its Subsidiaries for each twelve-month period through the
twelve-month period occurring five (5) years from the Closing Date and (v) such
other information relating to the Borrower and its Subsidiaries as the Agent may
reasonably require in connection with the structuring and syndication of credit
facilities of the type described herein.
(d) Opinions of Counsel. The Agent shall have received a legal
opinion in form and substance reasonably satisfactory to the Lenders dated as of
the Closing Date from counsel to the Credit Parties.
(e) Personal Property Collateral. The 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 Agent's security interest in the Collateral, copies of
the financing statements on file in such jurisdictions and evidence that no
Liens exist other than Permitted Liens;
(ii) duly executed UCC financing statements for each appropriate
jurisdiction as is necessary, in the Agent's sole discretion, to perfect
the Agent's security interest in the Collateral;
(iii) searches of ownership of intellectual property in the
appropriate governmental offices and such patent/trademark/copyright
filings as requested by the Agent in order to perfect the Agent's security
interest in the Collateral;
(iv) all stock certificates evidencing the Capital Stock pledged to
the Agent pursuant to the Pledge Agreement, together with duly executed in
blank, undated stock powers attached thereto (unless, with respect to the
pledged Capital Stock of any Foreign Subsidiary, such stock powers are
deemed unnecessary by the Agent in its reasonable discretion under the law
of the jurisdiction of incorporation of such Person); and
(v) duly executed consents as are necessary, in the Agent's
reasonable discretion, to perfect the Agent's security interest in the
Collateral.
(f) Priority of Liens. The Agent shall have received satisfactory evidence
that (i) the Agent, on behalf of the Lenders, holds a perfected, first priority
Lien on all Collateral (provided that the Agent's perfected Lien shall not be
required to be first priority with respect to Collateral subject to a previously
perfected Permitted Lien) and (ii) none of the Collateral is subject to any
other Liens other than Permitted Liens.
54
(g) Opening Borrowing Base. Receipt by the Agent of a Borrowing Base
Certificate as of the Closing Date, substantially in the form of Exhibit 7.1(d)
and certified by the chief financial officer of the Borrower to be true and
correct as of the Closing Date.
(h) Evidence of Insurance. Receipt by the Agent of copies of insurance
policies or certificates of insurance of the Consolidated Parties evidencing
liability and casualty insurance meeting the requirements set forth in the
Credit Documents, including, but not limited to, naming the Agent as sole loss
payee on behalf of the Lenders.
(i) Material Adverse Effect. No material adverse change shall have
occurred since December 31, 1997 in the condition (financial or otherwise),
business, assets, operations, management or prospects of the Consolidated
Parties taken as a whole.
(j) 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.
55
(k) Officer's Certificates. The Agent shall have received a certificate
or certificates executed by an Executive Officer of the Borrower as of the
Closing Date certifying that (A) each Credit Party is in compliance with all
existing financial obligations, including, without limitation, the Senior
Subordinated Notes, (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 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, (4) the Credit Parties are in pro forma compliance with each
of the financial covenants set forth in Section 7.11 as of March 31, 1998 (which
certificate shall set forth the calculations therefor in reasonable detail), (5)
Consolidated Funded Indebtedness does not exceed $360 million (of which at least
$98.7 million is comprised of Indebtedness evidenced by the Senior Subordinated
Notes, (6) fees and expenses incurred in connection with the initial public
offering of the common Capital Stock of the Borrower, the acquisition of
Falconite and the consummation of the Credit Documents do not exceed $17 million
and (7) Consolidated EBITDA on a Pro Forma Basis (after giving effect to the
Acquisition of Falconite) for the twelve-month period ended on May 31, 1998 is
at least $80 million.
(l) Corporate Structure. The corporate capital and ownership structure of
the Consolidated Parties (after giving effect to the purchase of Falconite)
shall be as described in Schedule 6.13.
(m) Equity Investment. Receipt by the Agent of evidence that the Borrower
has received gross proceeds of at least $78 million from the issuance of common
Capital Stock of the Borrower pursuant to an initial public offering on terms
that are satisfactory to the Agent.
(n) Government Consent. Receipt by the Agent of evidence that all
governmental, shareholder and material third party consents (including Xxxx-
Xxxxx-Xxxxxx clearance) and approvals necessary or desirable in connection with
the Acquisition of Falconite and the related financings and other transactions
contemplated hereby and expiration of all applicable waiting periods without any
action being taken by any authority that could restrain, prevent or impose any
material adverse conditions on the Acquisition of Falconite or such other
transactions or that could seek or threaten any of the foregoing, and no law or
regulation shall be applicable which in the judgment of the Agent could have
such effect.
56
(o) Falconite Purchase Agreement. The Falconite Purchase Agreement (i)
shall have been consummated in accordance with the terms thereof and in
compliance with applicable law and regulatory approvals, and all conditions
precedent to the obligations of the buyer thereunder shall have been satisfied
and (ii) shall not have been altered, amended or otherwise changed or
supplemented in any material respect or any material condition therein waived,
without the prior written consent of the Agent. The Purchase Price paid for
Falconite shall not exceed $185 million. The Agent shall have received a copy,
certified by an officer of the Borrower as true and complete, of the Falconite
Purchase Agreement as originally executed and delivered, together with all
exhibits and schedules.
(p) Environmental Reports. Receipt by the Agent in form and substance
reasonably satisfactory to it of environmental assessment reports and related
documents of a recent date with respect to all real property owned or leased by
Falconite.
(q) Fees and Expenses. Payment by the Credit Parties of all fees and
expenses owed by them to the Lenders and the Agent, including, without
limitation, payment to the Agent of the fees set forth in the Fee Letter.
(r) Financial Requirements. Receipt by the Agent of satisfactory evidence
that (i) Consolidated Funded Indebtedness does not exceed $360 million (of which
at least $98.7 million is comprised of Indebtedness evidenced by the Senior
Subordinated Notes) and (ii) Consolidated EBITDA on a Pro Forma Basis (after
giving effect to the Acquisition of Falconite) for the twelve-month period ended
on May 31, 1998 is at least $80 million.
(s) Funds Flow Memorandum. Receipt by the Agent of (i) a statement of
sources and uses of funds covering all payments reasonably expected to be made
by the Credit Parties in connection with the transactions contemplated by the
Credit Documents, the consummation of the initial public offering of the common
Capital Stock of the Borrower and the Falconite Purchase Agreement to be
consummated on the Closing Date, including an itemized estimate of all fees,
expenses and other closing costs in an aggregate amount not to exceed $17
million and (ii) payment instructions with respect to each wire transfer to be
made by the Agent, or the Credit Parties on the Closing Date setting forth the
amount of such transfer, the purpose of such transfer, the name and number of
the account to which such transfer is to be made, the name and ABA number of the
bank or other financial institution where such account is located and the name
and telephone number of an individual that can be contacted to confirm receipt
of such transfer.
(t) Account Designation Letter. Receipt by the Agent of an account
designation letter (the "Account Designation Letter") in the form of Exhibit
5.1(t) hereto.
(u) Other. Receipt by the Lenders of such other documents, instruments,
agreements or information as reasonably requested by any Lender, including, but
not limited
57
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 any portion of the Term Loan, an appropriate Notice of
Borrowing or Notice of Extension/Conversion or (ii) in the case of any
Letter of Credit, the Issuing Lender shall have received an appropriate
request for issuance in accordance with the provisions of Section 2.2(b);
(b) The representations and warranties set forth in Section 6 shall,
subject to the limitations set forth therein, be true and correct in all
material respects as of such date (except for those which expressly relate
to an earlier date);
(c) There shall not have been commenced against any 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, 1997 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 shall not exceed the lesser of (A) the Revolving Committed
Amount and (B) the Borrowing Base less the outstanding Term Loan less LOC
Obligations outstanding and (ii) the LOC Obligations shall not exceed the
LOC Committed Amount.
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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 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) and those set forth in the preliminary
Prospectus for the Borrower's common stock dated July 1, 1998, (i) have been
prepared in accordance with GAAP and (ii) present fairly in all material
respects (on the basis disclosed in the footnotes to such financial statements)
the consolidated and consolidating financial condition, results of operations
and cash flows of the Consolidated Parties as of such date and for such periods.
6.2 No Material Change.
------------------
Since December 31, 1997 (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
reasonably be expected to have a Material Adverse Effect.
6.4 Power; Authorization; Enforceable Obligations.
---------------------------------------------
59
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 and filings required from time to time by the Securities
Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
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)
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 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 except
where such violation, conflict or contravention could not reasonably be expected
to have a Material Adverse Effect, (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 reasonably be expected to have a Material Adverse Effect, or (d)
result in or require the creation of any Lien (other than those contemplated in
or created in connection with the Credit Documents) upon or with respect to its
properties.
6.6 No Default.
----------
No Consolidated Party is in default in any respect under any contract,
lease, loan agreement, indenture, mortgage, security agreement or other
agreement or obligation to which it is a party or by which any of its properties
is bound which default could reasonably be expected to have a Material Adverse
Effect. No Default or Event of Default has occurred or exists except as
previously disclosed in writing to the Lenders.
60
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) known
by such Consolidated Party to be due and 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 or, in the case of Subsidiaries acquired pursuant to the
Falconite Purchase Agreement, adequate indemnification is available under such
purchase agreement. No Credit Party is aware as of the Closing Date of any
proposed tax assessments against it or any other Consolidated Party.
6.11 Compliance with Law.
-------------------
Each Consolidated Party is in compliance with all Requirements of Law and
all other laws, rules, regulations, orders and decrees (including without
limitation Environmental Laws) applicable to it, or to its properties, unless
such failure to comply could not reasonably be expected to 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
61
Code, whether or not waived, has occurred with respect to any Plan; (iii) each
Plan has been maintained, operated, and funded in compliance with its own terms
and in material compliance with the provisions of ERISA, the Code, and any other
applicable federal or state laws; and (iv) no lien in favor of the PBGC or a
Plan has arisen or is reasonably likely to arise on account of any Plan.
(b) The actuarial present value of all "benefit liabilities" (as
defined in Section 4001(a)(16) of ERISA), whether or not vested, under each
Single Employer Plan, as of the last annual valuation date prior to the
date on which this representation is made or deemed made (determined, in
each case, 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) Except as would not have a Material Adverse Effect, 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. Except as would not have a Material Adverse Effect, 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 liability under Sections
406, 409, 502(i), or 502(l) of ERISA or Section 4975 of the Code, or under
any agreement or other instrument pursuant to which any Consolidated Party
or any ERISA Affiliate has agreed or is required to indemnify any Person
against any such liability.
(e) Neither any Consolidated Party nor any ERISA Affiliate 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.
62
(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 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, 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 Subsidiary 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.
6.14 Governmental Regulations, Etc.
-----------------------------
(a) No part of the Letters of Credit or proceeds of the Loans will be
used, directly or indirectly, for the purpose of purchasing or carrying any
"margin stock" within the meaning of Regulation U, or for the purpose of
purchasing or carrying or trading in any securities. If requested by any
Lender or the Agent, the Borrower will furnish to the Agent and each Lender
a statement to the foregoing effect in conformity with the requirements of
FR Form U-1 referred to in Regulation U. No indebtedness being reduced or
retired out of the proceeds of the Loans was or will be incurred for the
purpose of purchasing or carrying any margin stock within the meaning of
Regulation U or any "margin security" within the meaning of Regulation T.
"Margin stock" within the meaning of Regulation U does not constitute more
than 25% of the value of the consolidated assets of the Consolidated
Parties. None of the transactions contemplated by this Credit Agreement
(including, without limitation, the direct or indirect use of the proceeds
of the Loans) will violate or result in a violation of the
63
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.
(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) 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 except where the failure to so obtain or maintain could
not reasonably be expected to have a Material Adverse Effect.
(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 have a Material Adverse Effect.
(f) Each Consolidated Party is current with all material reports and
documents, if any, required to be filed with any state or federal
securities commission or similar agency and is in full compliance in all
material respects with all applicable rules and regulations of such
commissions.
6.15 Purpose of Loans and Letters of Credit.
--------------------------------------
The proceeds of the Loans hereunder shall be used solely by the Borrower
(i) for working capital, (ii) for refinancing certain existing Indebtedness of
the Consolidated Parties, (iii) to acquire Falconite and to make Permitted
Acquisitions (and to pay related fees and expenses) and (iv) for general
corporate purposes.
6.16 Environmental Matters.
---------------------
64
Except as would not 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
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.
---------------------
65
Each Consolidated Party owns, or has the legal right to use, all
trademarks, tradenames, copyrights, technology, know-how and processes (the
"Intellectual Property") necessary for each of them to conduct its business as
currently conducted except for those the failure to own or have such legal right
to use could not reasonably be expected to have a Material Adverse Effect. Set
forth on 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 reasonably be expected to 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 list of all locations where any tangible
personal property of a Consolidated Party is located, including county and state
where located. Set forth on Schedule 6.20(b) is the chief executive office and
principal place of business of each Consolidated Party.
6.21 Disclosure.
----------
Neither this Credit Agreement nor any financial statements delivered to the
Lenders nor any other document, certificate or statement furnished to the
Lenders by or on behalf of any Consolidated Party in connection with the
transactions contemplated hereby contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
contained therein or herein not misleading.
6.22 No Burdensome Restrictions.
--------------------------
No Consolidated Party is a party to any agreement or instrument, or is in
breach of or in violation of any provision of any applicable law, rule or
regulation which, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect.
6.23 Brokers' Fees.
-------------
66
Except for (i) brokerage fees paid to Xxxxxxxxx, Xxxxxx & Xxxxxxxx in
connection with the Acquisition of Falconite, (ii) underwriting fees incurred in
connection with the initial public offering of the Capital Stock of the Borrower
and (iii) fees payable to First Union Capital Markets in connection with the
closing and syndication of this Credit Agreement, 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 to occur on the Closing Date.
6.24 Labor Matters.
-------------
Except as set forth on Schedule 6.24, there are no collective bargaining
agreements or Multiemployer Plans covering the employees of a Consolidated Party
as of the Closing Date and none of the Consolidated Parties has suffered any
strikes, walkouts, work stoppages or other material labor difficulty within the
last five years.
6.25 Year 2000 Compliance.
--------------------
Each of the Credit Parties has conducted a review and assessment of its
computer applications and made inquiry of its key suppliers, vendors and
customers with respect to the "year 2000 problem" (that is, the risk that
computer applications may not be able to properly perform date-sensitive
functions after December 31, 1999) and, based on that review and inquiry, the
Credit Parties believe that the year 2000 problem will not result in a material
adverse change in its business condition (financial or otherwise), operations,
business, assets, liabilities or prospects of the Credit Parties taken as a
whole, or on the ability of any Credit Party to perform any material obligation
under the Credit Documents to which it is a party.
6.26 Material Contracts.
------------------
Attached hereto as Schedule 6.25 is a true, correct and complete list of
all the Material Contracts currently in effect on the date hereof. All of the
Material Contracts are in full force and effect.
6.27 Senior Debt.
-----------
The Loans and other extensions of credit under this Credit Agreement
constitute "Senior Debt" under the indenture for the Senior Subordinated Notes.
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 (other than contingent indemnity
obligations), and until all of the Commitments hereunder shall have terminated:
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7.1 Information Covenants.
---------------------
The Credit Parties will furnish, or cause to be furnished, to the Agent and
each of the Lenders:
(a) Annual Financial Statements. As soon as available, and in any
event within 90 days after the close of each fiscal year of the Consolidated
Parties, 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 Agent and whose
opinion shall be to the effect that such financial statements have been prepared
in accordance with GAAP (except for changes with which such accountants concur)
and shall not be limited as to the scope of the audit or qualified as to the
status of the Consolidated Parties as a going concern.
(b) Interim Financial Statements.
----------------------------
(i) 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 and retained earnings and of cash
flows for such fiscal quarter, in each case setting forth in comparative form
consolidated figures for the corresponding period of the preceding fiscal year,
all such financial information described above to be in reasonable form and
detail and reasonably acceptable to the Agent, and accompanied by a certificate
of 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.
(ii) Monthly Financial Statements. As soon as available, and in
any event within 30 days after the close of each fiscal month, financial
statements of the Consolidated Parties as of the end of such month substantially
in the form of the monthly financial statements prepared in connection with the
fiscal month ended June 30, 1998 and in form and detail reasonably acceptable to
the Agent (as such form may be updated or modified from time to time in a manner
reasonably acceptable to the Agent).
(c) Officer's Certificate. At the time of delivery of the financial
statements provided for in Sections 7.1(a) and 7.1(b)(i) 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
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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 Certificates. Within 30 days after the end of each
calendar month, a report on the Borrowing Base (a "Borrowing Base
Certificate") as of the end of the immediately preceding month,
substantially in the form of Exhibit 7.1(d) and certified by the chief
financial officer of the Borrower to be true and correct as of the date
thereof, together with (i) a consolidated summary of aged Accounts
Receivable as of the last day of such month, (ii) a schedule of inventory
of the Credit Parties as of the last day of such month and (iii) a
calculation of the financial covenant contained in Section 7.11(e)
demonstrating compliance therewith as of the end of such calendar month.
(e) Annual Budgets. No later than 30 days after the beginning of each
fiscal year, a budget for such fiscal year of the Borrower which includes
(i) a projected consolidated balance sheet and statement of income of the
Credit Parties for such fiscal year and a projected consolidated statement
of cash flows of the Credit Parties for such fiscal year and (ii) projected
consolidated and consolidating balance sheets, statements of income and
statements of cash flows of the Credit Parties on a monthly basis for such
fiscal year.
(f) 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.
(g) 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.
(h) Reports. Promptly upon transmission or receipt thereof, (i) copies
of any filings and registrations with, and reports to or from, the
Securities and Exchange Commission, or any successor agency, and copies of
all financial statements, proxy statements, notices and reports as any
Consolidated Party shall send to its shareholders or to a holder of any
Indebtedness owed by any Consolidated Party in its capacity as such a
holder and (ii) upon the request of the Agent, all reports and written
information to and from the United States Environmental Protection Agency,
or any state or local agency responsible for environmental matters, the
United States Occupational Health and Safety Administration, or any state
or local agency responsible for health and safety matters, or any successor
agencies or authorities concerning environmental, health or safety matters.
69
(i) Notices. Upon obtaining knowledge thereof, the Credit Parties will
give written notice to the Agent immediately of (i) the occurrence of an
event or condition consisting of a Default or Event of Default, specifying
the nature and existence thereof and what action the Credit Parties propose
to take with respect thereto, and (ii) the occurrence of any of the
following with respect to any Consolidated Party: (A) the pendency or
commencement of any litigation, arbitral or governmental proceeding against
such Consolidated Party which if adversely determined could reasonably be
expected to have a Material Adverse Effect, (B) the institution of any
proceedings against such Consolidated Party with respect to, or the receipt
of notice by such Consolidated Party of potential liability or
responsibility for violation, or alleged violation of any federal, state or
local law, rule or regulation, including but not limited to, Environmental
Laws, the violation of which could reasonably be expected to have a
Material Adverse Effect, or (C) any notice or determination concerning the
imposition of any withdrawal liability by a Multiemployer Plan against such
Consolidated Party 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.
(j) ERISA. Upon obtaining knowledge thereof, the Credit Parties will
give written notice to the Agent promptly (and in any event within five
business days) of: (i) 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 Agent and the Lenders with such additional information
concerning any Plan as may be reasonably requested, including, but not
limited to, copies of each annual report/return (Form 5500 series), as well
as all schedules and attachments thereto required to be filed with the
Department of Labor and/or the Internal Revenue Service pursuant to ERISA
and the Code, respectively, for each "plan year" (within the meaning of
Section 3(39) of ERISA).
70
(k) Environmental.
-------------
(i) Upon the reasonable written request of the Agent, the Credit
Parties will furnish or cause to be furnished to the 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 Agent as to the nature and extent of the presence of
any Materials of Environmental Concern on any Properties (as defined
in Section 6.16) and as to the compliance by any Consolidated Party
with Environmental Laws at such Properties. If the Credit Parties fail
to deliver such an environmental report within seventy-five (75) days
after receipt of such written request then the Agent may arrange for
same, and the Consolidated Parties hereby grant to the Agent and their
representatives access to the Properties to reasonably undertake such
an assessment (including, where appropriate, invasive soil or
groundwater sampling). The reasonable cost of any assessment arranged
for by the Agent pursuant to this provision will be payable by the
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 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.
(l) Additional Patents and Trademarks. At the time of delivery of the
financial statements and reports provided for in Section 7.1(a), a report
signed by the chief financial officer or treasurer of the Borrower setting
forth (i) a list of registration numbers for all patents, trademarks,
service marks, tradenames and copyrights awarded to any Consolidated Party
since the last day of the immediately preceding fiscal year and (ii) a list
of all patent applications, trademark applications, service xxxx
applications, trade name applications and copyright applications submitted
by any Consolidated Party since the last day of the immediately preceding
fiscal year and the status of each such application, all in such form as
shall be reasonably satisfactory to the Agent.
(m) Accounts Receivable Aging Report. Promptly after request by the
Agent, an Accounts Receivable aging report as of the date reasonably
required by the Agent.
(n) Other Information. With reasonable promptness upon any such
request, such other information regarding the business, properties or
financial condition of any Consolidated Party as the Agent or the Required
Lenders may reasonably request.
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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 except where the failure
to so preserve could not reasonably be expected to have a Material Adverse
Effect.
7.3 Books and Records.
-----------------
Each Credit Party will, and will cause each of its Subsidiaries to, keep
complete and accurate books and records of its transactions in accordance with
good accounting practices on the basis of GAAP (including the establishment and
maintenance of appropriate reserves).
7.4 Compliance with Law.
-------------------
Each Credit Party will, and will cause each of its Subsidiaries to, comply
with all laws, rules, regulations and orders, and all applicable restrictions
imposed by all Governmental Authorities, applicable to it and its Property if
noncompliance with any such law, rule, regulation, order or restriction could
reasonably be expected to have a Material Adverse Effect.
7.5 Payment of Taxes and Other Indebtedness.
---------------------------------------
Each Credit Party will, and will cause each of its Subsidiaries to, pay and
discharge (a) all taxes, assessments and governmental charges or levies imposed
upon it, or upon its income or profits, or upon any of its properties, before
they shall become delinquent, (b) all lawful claims (including claims for labor,
materials and supplies) which, if unpaid, might give rise to a Lien upon any of
its properties, and (c) except as prohibited hereunder, all of its other
Indebtedness as it shall become due; provided, however, that no Consolidated
Party shall be required to pay any such tax, assessment, charge, levy, claim or
Indebtedness which is being contested in good faith by appropriate proceedings
and as to which adequate reserves therefor have been established in accordance
with GAAP, unless the failure to make any such payment (i) could give rise to an
immediate right to foreclose on a Lien securing such amounts or (ii) could
reasonably be expected to have a Material Adverse Effect.
7.6 Insurance; Condemnation.
-----------------------
Each Credit Party will, and will cause each of the Consolidated Parties to,
maintain public liability insurance, third party property damage insurance and
replacement value insurance on the Collateral under such policies of insurance,
with such insurance companies, in such amounts and covering such risks as are
commercially reasonable and customary in the industry in which such Consolidated
Parties are engaged. In addition, the Credit Parties will obtain and maintain,
within 60 days of the Closing Date, general liability insurance in the minimum
aggregate amount of $10,000,000 for the Consolidated Parties. All policies
covering the Collateral are to name the Borrower and the Agent, on behalf of the
Lenders, as additional insureds and loss payees in case
72
of loss, as their interests may appear, and are to contain such other provisions
as the Agent may reasonably require to fully protect the Agent's interest in the
Collateral and to any payments to be made under such policies. True copies of
all original insurance policies are to be delivered to the Agent on or prior to
the Closing Date, premium prepaid, with the loss payable endorsement in the
Agent's favor, and shall provide for not less than thirty (30) days prior
written notice to the Agent, of the exercise of any right of cancellation. In
the event any Consolidated Party fails to respond in a timely and appropriate
manner (as determined by the Agent in its reasonable discretion) with respect to
making a claim under any insurance policies required to be maintained under this
Section 7.6, the Agent shall have the right, in the name of the Agent or any
Consolidated Party, to file claims under such insurance policies, to receive and
give acquittance for any payments that may be payable thereunder, and to execute
any and all endorsements, receipts, releases, assignments, reassignments or
other documents that may be necessary to effect the collection, compromise or
settlement of any claims under any such insurance policies. Each Credit Party
will provide written notice to the Lenders of the occurrence of any of the
following events within five (5) Business Days after an Executive Officer of
such Credit Party learns of the occurrence of such event: any asset or property
owned or used by any Consolidated Party is (a) materially damaged or destroyed,
or suffers any other loss or (b) is condemned, confiscated or otherwise taken,
in whole or in part, or the use thereof is otherwise diminished so as to render
impracticable or unreasonable the use of such asset or property for the purpose
to which such asset or property was used immediately prior to such condemnation,
confiscation or taking, by exercise of the powers of condemnation or eminent
domain or otherwise, and in either case the amount of the damage, destruction,
loss or diminution in value of the Collateral is in excess of $2,500,000 (each
such event or occurrence in excess of $2,500,000 being herein referred to as a
"Casualty Loss"). Each Credit Party will diligently file and prosecute its claim
or claims for any award or payment in connection with a Casualty Loss. In the
event of a Casualty Loss, the Credit Parties will pay to the Agent, promptly
upon receipt thereof, any and all insurance proceeds and payments received by
any Consolidated Party on account of damage, destruction or loss of all or any
portion of the Collateral. The Agent may, at its election and in its sole
discretion (and with the approval of the Required Lenders if such Casualty Loss
is in excess of $5,000,000), either (i) apply the proceeds realized from
Casualty Losses to payment of accrued and unpaid interest on, or outstanding
principal of, the Term Loans or the Revolving Loans, as provided in Section
3.3(b), or (ii) pay such proceeds to the Credit Parties to be used to repair,
replace or rebuild the asset or property or portion thereof that was the subject
of the Casualty Loss. After the occurrence and during the continuance of an
Event of Default, (A) no settlement on account of any such Casualty Loss shall
be made without the consent of the Required Lenders and (B) the Agent may
participate in any such proceedings and the Credit Parties will deliver to the
Agent such documents as may be requested by the Agent to permit such
participation and will consult with the Agent, its attorneys and agents in the
making and prosecution of such claim or claims. Each Credit Party hereby
irrevocably authorizes and appoints the Agent its attorney-in-fact, after the
occurrence and during the continuance of an Event of Default, to collect and
receive for any such award or payment and to file and prosecute such claim or
claims, which power of attorney shall be irrevocable and shall be deemed to be
coupled with an interest, and each Credit Party shall, upon demand of the Agent,
make, execute and deliver any and all
73
assignments and other instruments sufficient for the purpose of assigning any
such award or payment to the Agent for the benefit of the Lenders, free and
clear of any encumbrances of any kind or nature whatsoever.
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.
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.
------------------
Each Credit Party will, and will cause each of its Subsidiaries to, at the
expense of the Credit Parties, permit the Agent and representatives appointed by
the Agent (including, without limitation, independent accountants, agents,
attorneys, and appraisers) at any time, upon reasonable notice, in the Agent's
sole discretion or at the direction of the Required Lenders to visit and inspect
its property, including its books and records, its accounts receivable and
inventory, its facilities and its other business assets, to conduct periodic
field exams and/or appraisals of the rental fleet of the Consolidated Parties
and to make photocopies or photographs thereof and to write down and record any
information such representative obtains and shall permit the Agent or its
representatives to investigate and verify the accuracy of information provided
to the Lenders and to discuss all such matters with the officers, employees and
representatives of such Person. Notwithstanding the foregoing, the Credit
Parties shall only be required to pay for two (2) such inspections per year
unless an Event of Default has occurred and is continuing.
7.11 Financial Covenants.
-------------------
(a) Interest Coverage Ratio. The Interest Coverage Ratio, as of the
last day of each fiscal quarter of the Consolidated Parties, commencing with the
fiscal quarter ending on
74
June 30, 1998, shall be greater than or equal to (i) 2.25 to 1.0 for each
fiscal quarter ending prior to March 31, 1999 and (ii) 2.50 to 1.00 for
each fiscal quarter ending on or after March 31, 1999.
(b) Total Debt Leverage Ratio. The Total Debt Leverage Ratio, as of
the last day of each fiscal quarter of the Consolidated Parties, commencing
with the fiscal quarter ending on June 30, 1998, shall be less than or
equal to (i) 4.75 to 1.0 for each fiscal quarter ending prior to Xxxxx 00,
0000, (xx) 4.50 to 1.00 for each fiscal quarter ending on or after March
31, 1999 but prior to December 31, 1999 and (iii) 4.25 to 1.00 for each
fiscal quarter ending on or after December 31, 1999.
(c) Senior Debt Leverage Ratio. The Senior Debt Leverage Ratio, as of
the last day of each fiscal quarter of the Consolidated Parties, commencing
with the fiscal quarter ending on June 30, 1998, shall be less than or
equal to (i) 3.25 to 1.0 for each fiscal quarter ending prior to Xxxxx 00,
0000, (xx) 3.00 to 1.00 for each fiscal quarter ending on or after March
31, 1999 but prior to December 31, 1999 and (iii) 2.75 to 1.00 for each
fiscal quarter ending on or after December 31, 1999.
Notwithstanding the foregoing, in the event that the Borrower makes a
Price Reduction Election, the maximum allowable Senior Debt Leverage Ratio
for each corresponding period occurring after the date of such Price
Reduction Election through the Maturity Date shall be permanently reduced
by 0.25.
(d) Consolidated Net Worth. At all times Consolidated Net Worth shall
be greater than or equal to the sum of $100,000,000, increased on a
cumulative basis as of the end of each fiscal quarter of the Borrower,
commencing with the fiscal quarter ending December 31, 1997 by an amount
equal to (i) 50% of Consolidated Net Income for the fiscal quarter then
ended (without deductions for any losses) and (ii) 100% of the Net Cash
Proceeds of issuances of Capital Stock by any Consolidated Party in
whatever form (other than to another Credit Party) occurring subsequent to
the Closing Date.
(e) Senior Debt to Borrowing Base. Consolidated Senior Indebtedness
secured by Permitted Liens, as of the last day of each fiscal month of the
Consolidated Parties, plus LOC Obligations shall not exceed the Borrowing
Base.
7.12 Additional Credit Parties.
-------------------------
(a) On or before the date any Person becomes a Subsidiary of any
Credit Party, the Borrower shall provide the Agent with written notice
thereof setting forth information in reasonable detail describing all of
the assets of such Person and shall (a) if such Person is a Domestic
Subsidiary of a Credit Party, cause such Person to execute a Joinder
Agreement in substantially the same form as Exhibit 7.12, (b) cause 100%
(if such Person is a Domestic Subsidiary of a Credit Party) or 65% (if such
Person is a direct Foreign
75
Subsidiary of a Credit Party) of the Capital Stock of such Person to be
delivered to the Agent (together with undated stock powers signed in blank
(unless, with respect to a Foreign Subsidiary, such stock powers are deemed
unnecessary by the Agent in its reasonable discretion under the law of the
jurisdiction of incorporation of such Person)) and pledged to the Agent
pursuant to an appropriate pledge agreement(s) in form acceptable to the
Agent and (c) cause such Person to deliver appropriate UCC-1 financing
statements reasonably satisfactory to the Agent.
(b) As soon as practicable and in any event not later than 30 days
after any Person becomes a Subsidiary of any Credit Party, the Borrower
shall cause such Person to deliver such other documentation as the Agent
may reasonably request in connection with the foregoing, including, without
limitation, real estate title insurance policies, environmental reports,
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 Agent.
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 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,
76
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.
7.14 Collateral.
If, subsequent to the Closing Date, a Credit Party shall acquire any
intellectual property, securities instruments, chattel paper or other personal
property required to be delivered to the Agent as Collateral hereunder or under
any of the Collateral Documents, the Borrower shall notify the Agent of the same
in each case as soon as practicable after the acquisition thereof. Each Credit
Party shall take such action as requested by the Agent and at its own expense,
to ensure that the Agent shall have a first priority perfected Lien in all
personal property of the Credit Parties (whether now owned or hereafter
acquired), subject only to Permitted Liens. Each Credit Party shall, and shall
cause each of its Subsidiaries to, adhere to the covenants regarding the
location of personal property as set forth in the Security Agreement. The Credit
Parties shall use its best efforts to deliver to the Agent (i) with respect to
all real property leased by any Credit Party as of the Closing Date, landlord
waivers and consents with respect to each such leased property no later than 90
days after the Closing Date and (ii) with respect to all leases for real
property entered into by any Credit Party subsequent to the Closing Date,
landlord waivers and consents with respect to each such leased property, in each
case in form and substance reasonably satisfactory to the Agent.
7.15 Pledged Real Estate Assets.
Upon the request of the Agent, each Credit Party will, and will cause each
of its Subsidiaries to, cause (a) all of its owned real property and (b) all of
its leased real property, whether owned or leased as of, or subsequent to, the
Closing Date, to be subject at all times to first priority, perfected and title
insured Liens (other than Permitted Liens) in favor of the Agent pursuant to the
terms and conditions of such security documents and instruments, in form and
substance satisfactory to the Agent, as the Agent shall reasonably request. In
connection with any mortgage in favor of the Agent delivered pursuant to this
Section 7.15, the Agent shall be entitled to receive a title report, title
insurance, such maps, plats or surveys as it may reasonably request, flood
insurance as required by law, evidence that the subject real property is in
compliance with all zoning and environmental laws and such other information and
documents as the Agent shall reasonably request. In furtherance of the foregoing
terms of this Section 7.15, each Credit Party agrees to promptly provide the
Agent with written notice of the acquisition by, or the entering into a lease
by, any Consolidated Party of any real property assets having a market value
greater than $250,000 or annual lease payments in excess of $250,000, setting
forth in reasonable detail the location and a description of the real property
assets so acquired or leased.
7.16 Revisions or Updates to Schedules.
If any of the information or disclosures provided on any of Schedules 6.13,
6.17, 6.20(a), 6.20(b) or 6.26, originally attached hereto become outdated or
incorrect in any material respect, the Borrowers shall
77
deliver to the Agent and the Lenders as part of the compliance certificate
required pursuant to Section 7.1(c) such revision or updates to such Schedule(s)
as may be necessary or appropriate to update or correct such Schedule(s),
provided, that no such revisions or updates to any such Schedule(s) shall be
deemed to have amended, modified or superseded such Schedule(s) as originally
attached hereto, or to have cured any breach of warranty or representation
resulting from the inaccuracy or incompleteness of any such Schedule(s), unless
and until the Required Lenders, in their sole and absolute discretion, shall
have accepted in writing such revisions or updates to such Schedule(s) or unless
such revision or updates to such Schedule(s) would not have a Material Adverse
Affect and would not cause or result in a breach of a covenant hereunder or
otherwise cause or result in a Default or Event of Default hereunder.
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 (other than contingent indemnity
obligations), and until all of the Commitments hereunder shall have terminated:
8.1 Indebtedness.
The Credit Parties will not permit any Consolidated Party to contract,
create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness arising under this Credit Agreement and the other
Credit Documents;
(b) Indebtedness of the Borrower set forth in Schedule 8.1 (and
renewals, refinancings and extensions thereof on terms and conditions no
less favorable to such Person than such existing Indebtedness);
(c) purchase money Indebtedness (including obligations in respect of
Capital Leases or Synthetic Leases) hereafter incurred by the Credit
Parties to finance the purchase of fixed assets provided that (i) the total
of all such Indebtedness (including any such Indebtedness referred to on
Schedule 8.1) shall not exceed an aggregate principal amount equal to ten
percent (10%) of the Revolving Committed Amount at any one time
outstanding; (ii) such Indebtedness when incurred shall not exceed the
purchase price of the asset(s) financed; and (iii) no such Indebtedness
shall be refinanced for a principal amount in excess of the principal
balance outstanding thereon at the time of such refinancing;
78
(d) obligations of the Borrower in respect of Hedging Agreements
entered into in order to manage existing or anticipated interest rate or
exchange rate risks and not for speculative purposes;
(e) Subordinated Debt;
(f) Guaranty Obligations of any Credit Party with respect to
Indebtedness permitted pursuant to this Section 8.1 or other amounts with
respect to ordinary course obligations of a Credit Party in the nature of
operating leases or supply contracts;
(g) intercompany loans and advances made by the Borrower to any Credit
Party, by any Credit Party to the Borrower or by any Credit Party to
another Credit Party;
(h) indemnity obligations of any Credit Party arising in connection
with the representations and warranties made by such Credit Party with
respect to the sale or acquisition by such Credit Party of a Person or a
business unit of such Person sold or purchased as a going concern;
(i) Indebtedness in connection with attachment or judgment Liens which
are Permitted Liens, provided that the total of all such Indebtedness for
all the Consolidated Parties taken together shall not exceed $1,000,000 by
in the aggregate at any one time outstanding;
(j) Indebtedness of any Credit Party evidenced by promissory notes or
other instruments given to officers or directors of such Credit Party in
consideration for the repurchase of Capital Stock or options of such Credit
Party; provided that such promissory notes or other instruments shall not
provide for any current payment of interest or principal on or prior to the
Maturity Date; and
(k) other unsecured Indebtedness of the Consolidated Parties in an
amount not to exceed $5,000,000 in the aggregate at any one time.
8.2 Liens.
The Credit Parties will not permit any Consolidated Party to contract,
create, incur, assume or permit to exist any Lien with respect to any of its
Property, whether now owned or after acquired, except for Permitted Liens.
8.3 Nature of Business.
The Credit Parties will not permit any Consolidated Party to substantively
alter the character or conduct of the business conducted by such Person as of
the Closing Date.
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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 Borrower may merge or
consolidate with any of its Subsidiaries provided that (i) the Borrower shall be
the continuing or surviving corporation, (ii) the Credit Parties shall cause to
be executed and delivered such documents, instruments and certificates as the
Agent may request in order to maintain the perfection and priority of the
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, (b) any Credit Party other
than the Borrower may merge or consolidate with any other Credit Party other
than the Borrower provided that (i) the Credit Parties shall cause to be
executed and delivered such documents, instruments and certificates as the Agent
may request in order to maintain the perfection and priority of the 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 Agent may request
in order to maintain the perfection and priority of the 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, (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 and (e) any Consolidated
Party may merge with any Person other than another Consolidated Party in
connection with a Permitted Acquisition if such Consolidated Party shall be the
continuing or surviving corporation.
8.5 Asset Sales.
The Credit Parties will not permit any Consolidated Party to sell, lease,
transfer or otherwise dispose of, directly or indirectly, any of its assets
other than (a) sales or other dispositions of Equipment Held for Resale in the
ordinary course of business, (b) sales or other dispositions of Rental Equipment
in any calendar month so long as (i) the aggregate Net Cash Proceeds from such
dispositions when combined with all other such dispositions previously made by
all the Consolidated Parties in such calendar month do not exceed 5% of the net
book value of all Rental Equipment of the Credit Parties, (ii) the aggregate Net
Cash Proceeds from such dispositions when combined with all other such
dispositions previously made by all the Consolidated Parties in the fiscal year
in which such dispositions were made do not exceed 15% of the net book value of
all Rental Equipment of the Credit Parties and (iii) not more than 25% of the
purchase price paid for such assets is in the form of a promissory note or other
deferred payment instrument, (c) sales or other dispositions of obsolete or worn
equipment by a Credit Party other than the sale or other disposition of
equipment described in clauses (a) or (b) immediately above, (d) sales or other
80
dispositions of Cash Equivalents, (e) Sale and Leaseback Transactions permitted
pursuant to Section 8.13 hereof and (f) sales or other dispositions for cash and
fair value of real estate assets in any fiscal year so long as the aggregate Net
Cash Proceeds from such dispositions when combined with all other such
dispositions previously made by all the Consolidated Parties in such fiscal year
do not exceed $5,000,000.
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, make a Restricted Payment other than the following Restricted
Payments so long as no Default or Event of Default shall exist immediately prior
to or immediately after the making of any such permitted Restricted Payment: (a)
the payments of dividends from any Consolidated Party to the Borrower or to
another Consolidated Party that is a direct Parent of such Consolidated Party,
(b) the payment of reasonable salaries and bonuses to management by the
Consolidated Parties, (c) repurchases of Capital Stock or options of any Credit
Party held by management of such Credit Party, provided that the aggregate
amount of such repurchases shall not exceed $1,000,000 in cash per fiscal year,
(d) customary and reasonable corporate overhead reimbursements payable by the
Subsidiary Guarantors to the Borrower and (e) payments of the types described in
clauses (vi) and (viii) of the definition of "Permitted Investments".
8.8 Prepayments of Indebtedness, etc.
The Credit Parties will not permit any Consolidated Party to (a) after the
issuance thereof, amend or modify (or permit the amendment or modification of)
any of the terms of any Indebtedness (including, without limitation,
Subordinated Debt) if such amendment or modification would add or change any
terms in a manner adverse to the issuer of such Indebtedness, or shorten the
final maturity or average life to maturity or require any payment to be made
sooner than originally scheduled or increase the interest rate applicable
thereto or change any subordination provision thereof, or (b) make (or give any
notice with respect thereto) any voluntary or optional payment or prepayment or
redemption or acquisition for value of (including without limitation, by way of
depositing money or securities with the trustee with respect thereto before due
for the purpose of paying when due), refund, refinance or exchange of any other
Indebtedness.
8.9 Transactions with Affiliates.
The Credit Parties will not permit any Consolidated Party to enter into any
transaction with, including, without limitation, the purchase, sale or exchange
of property or the rendering of any service to, any Subsidiary or Affiliate of
any Consolidated Party except (a) in the ordinary course
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of and pursuant to the reasonable requirements of such Consolidated Party's
business and upon fair and reasonable terms no less favorable to such
Consolidated Party than could be obtained in a comparable arm's-length
transaction with an unaffiliated Person, (b) as permitted under Section 8.1 or
Section 8.7 hereof, (c) for intercompany loans and advances from the Borrower to
any Subsidiary Guarantor or from any Subsidiary Guarantor to the Borrower or any
other Subsidiary Guarantor and (d) for intercompany transfers of equipment among
Subsidiary Guarantors for the purpose of meeting customer demand for Rental
Equipment, provided that the Subsidiary Guarantors shall keep adequate internal
records of all such transfers.
8.10 Accounting; Organizational Documents; Material Contracts.
(i) The Credit Parties will not and will not permit any Consolidated Party
to change its fiscal year or otherwise materially change its accounting
practices (including, without limitation, depreciation methodology as applied by
the Borrower and its Subsidiaries pursuant to the Borrower's Control Bulletin
No. 5, as revised March 31, 1998) without the prior written consent of the
Required Lenders, except for such changes necessary to conform the fiscal year
or the accounting practices of an Acquired Company to that of the Borrower.
(ii) The Credit Parties will not and will not permit any Consolidated Party
to 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 adverse to the Lenders.
(iii) The Credit Parties will not and will not permit any Consolidated
Party to, without the prior written consent of the Agent, amend, modify, cancel
or terminate or permit the amendment, modification, cancellation or termination
of any of the Material Contracts, except in the event that such amendments,
modifications, cancellations or terminations could not reasonably be expected to
have a Material Adverse Effect.
8.11 Limitation on Restricted Actions.
The Credit Parties will not permit any Consolidated Party to, directly or
indirectly, create or otherwise cause, incur, assume, suffer or permit to exist
or become effective any consensual encumbrance or restriction of any kind on the
ability of any such Person to (a) in the case of any Subsidiary Guarantors, pay
dividends or make any other distribution on any of such Person's Capital Stock
other than pursuant to the indenture for the Senior Subordinated Notes, (b) pay
any Indebtedness owed to the Credit Parties, (c) make loans or advances to any
other Credit Party or (d) transfer any of its property to any other Credit
Party, except for encumbrances or restrictions existing under or by reason of
(i) customary non-assignment provisions in any lease governing a leasehold
interest, (ii) any agreement or other instrument of a Person existing at the
time it becomes a Subsidiary of a Credit Party; provided that such encumbrance
or restriction is not applicable to any other Person, or any property of any
other Person, other than such Person becoming a Subsidiary of a Credit Party and
was not entered into in contemplation of such Person becoming a Subsidiary of a
Credit Party, (iii) customary provisions contained in purchase
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money financing arrangements permitted by Section 8.1(c) and (iv) this Credit
Agreement and the other Credit Documents.
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 Borrower or any Wholly-Owned Subsidiary of the
Borrower) to own any Capital Stock of any Subsidiary of the Borrower, (ii)
permit any Subsidiary of the Borrower to issue Capital Stock (except to the
Borrower or to a Wholly-Owned Subsidiary of the Borrower), (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 Borrower to issue any shares of preferred Capital Stock.
8.13 Sale Leasebacks.
The Credit Parties will not permit any Consolidated Party to, directly or
indirectly, enter into any Sale and Leaseback Transaction other than any Sale
Leaseback Transaction pursuant to which the consideration paid, when aggregated
with the consideration received from all other Sale and Leaseback Transactions
of the Credit Parties, does not exceed $5,000,000.
8.14 No Further Negative Pledges.
The Credit Parties will not, and will not permit any Consolidated Party to,
create or otherwise cause or suffer to exist or become effective, directly or
indirectly, (i) any prohibition or restriction (including any agreement to
provide equal and ratable security to any other Person in the event a Lien is
granted to or for the benefit of the Agent and the Lenders) on the creation or
existence of any Lien upon the assets of any Consolidated Party, other than
pursuant to the indenture for the Senior Subordinated Notes or pursuant to
documentation relating to purchase money financing arrangements permitted by
Section 8.1(c) or (ii) any Contractual Obligation which may restrict or limit
the Agent's rights or ability to sell or otherwise dispose of the Collateral or
any part thereof after the occurrence of an Event of Default other than standard
and customary subordination, nondisturbance and attornment agreements under or
in connection with leases of Rental Equipment.
SECTION 9
EVENTS OF DEFAULT
-----------------
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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 fail to pay (i) any interest or
Fees hereunder within three (3) Business Days of when due hereunder, in
each case whether at stated maturity, by acceleration, or otherwise, (ii)
any principal of the Revolving Loans, the Term Loan or the LOC Obligations
when due, whether at stated maturity, by acceleration or otherwise or (iii)
any expenses hereunder within five (5) Business Days after receipt of
notice by the Credit Parties from the Agent or any applicable Lender that
such expenses are payable; 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 or 8.1
through 8.14, inclusive;
(ii) default in the due performance or observance of any term,
covenant or agreement contained in Sections 7.1(a), (b), (c) or (d)
and such default shall continue unremedied for a period of at least 5
Business Days after the earlier of any chairman, president, chief
executive officer, chief financial officer or vice president of a
Credit Party becoming aware of such default or notice thereof by the
Agent; or
(iii) default in the due performance or observance of any other
covenant, contained in this Credit Agreement, the other Credit
Documents (including Hedging Agreements), and in the event such breach
or failure to comply is capable of cure, is not cured within thirty
(30) days of its occurrence;
(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 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
84
(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
Subsidiary Guarantor hereunder (including any Additional Credit Party) or
any provision thereof shall cease to be in full force and effect, or any
Subsidiary Guarantor (including any Additional Credit Party) hereunder or
any Person acting by or on behalf of such Subsidiary Guarantor shall deny
or disaffirm such Subsidiary Guarantor's obligations under such guaranty,
or any Subsidiary Guarantor shall default in the due performance or
observance of any term, covenant or agreement on its part to be performed
or observed pursuant to any guaranty; or
(f) Bankruptcy, etc. Any Bankruptcy Event shall occur with respect to
any Consolidated Party; or
(g) Defaults under Other Agreements.
(i) Any Consolidated Party shall default in the performance or
observance (beyond the applicable grace period with respect thereto,
if any) of any Material Contract;
(ii) With respect to (x) any Subordinated Debt or (y) any other
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, (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
(iii) (a) any holder of Subordinated Debt alleges (or any
Governmental Authority with applicable jurisdiction determines) that
the Subordinated Debt is not subordinated to any of the Credit Party
Obligations or (b) the subordination provisions in any agreement
relating to Subordinated Debt shall, in whole or in part, terminate,
cease to be effective or cease to be legally valid, binding and
enforceable as to any holder of the Subordinated Debt; or
(h) Judgments. One or more judgments or decrees shall be entered
against one or more of the Consolidated Parties involving a liability of
$250,000 or more in the aggregate (to the extent not paid or fully covered
by insurance provided by a carrier who has
85
acknowledged coverage and has the ability to perform) and any such
judgments or decrees shall not have been vacated, discharged or stayed or
bonded pending appeal within 30 days from the entry thereof; or
(i) ERISA. Any of the following events or conditions, if such event or
condition could have a Material Adverse Effect: (i) any "accumulated
funding deficiency," as such term is defined in Section 302 of ERISA and
Section 412 of the Code, whether or not waived, shall exist with respect to
any Plan, or any lien shall arise on the assets of any Consolidated Party
or any ERISA Affiliate in favor of the PBGC or a Plan; (ii) an ERISA Event
shall occur with respect to a Single Employer Plan, which is, in the
reasonable opinion of the Agent, likely to result in the termination of
such Plan for purposes of Title IV of ERISA; (iii) an ERISA Event shall
occur with respect to a Multiemployer Plan or Multiple Employer Plan, which
is, in the reasonable opinion of the Agent, likely to result in (A) the
termination of such Plan for purposes of Title IV of ERISA, or (B) any
Consolidated Party or any ERISA Affiliate incurring any liability in
connection with a withdrawal from, reorganization of (within the meaning of
Section 4241 of ERISA), or insolvency or (within the meaning of Section
4245 of ERISA) such Plan; or (iv) any prohibited transaction (within the
meaning of Section 406 of ERISA or Section 4975 of the Code) or breach of
fiduciary responsibility shall occur which may subject any Consolidated
Party or any ERISA Affiliate to any liability under Sections 406, 409,
502(i), or 502(l) of ERISA or Section 4975 of the Code, or under any
agreement or other instrument pursuant to which any Consolidated Party or
any ERISA Affiliate has agreed or is required to indemnify any person
against any such liability; or
(j) Ownership. There shall occur a Change of Control.
9.2 Acceleration; Remedies.
Upon the occurrence of an Event of Default, and at any time thereafter
unless and until such Event of Default has been waived by the requisite Lenders
(pursuant to the voting requirements of Section 11.6) or cured to the
satisfaction of the requisite Lenders (pursuant to the voting procedures in
Section 11.6), the Agent shall, upon the request and direction of the Required
Lenders, by written notice to the Credit Parties, take any of the following
actions:
(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 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.
86
(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
Agent additional cash, to be held by the Agent, for the benefit of the
Lenders, in a cash collateral account as additional security for the LOC
Obligations in respect of subsequent drawings under all then outstanding
Letters of Credit in an amount equal to the maximum aggregate amount which
may be drawn under all Letters of Credits then outstanding.
(d) Enforcement of Rights. Enforce any and all rights and interests
created and existing under the Credit Documents including, without
limitation, all rights and remedies existing under the Collateral
Documents, all rights and remedies against a Subsidiary 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 any Credit Party, then the Commitments shall
automatically terminate and all Loans, all reimbursement obligations arising
from drawings under Letters of Credit, all accrued interest in respect thereof,
all accrued and unpaid Fees and other indebtedness or obligations owing to the
Agent and/or any of the Lenders hereunder automatically shall immediately become
due and payable without the giving of any notice or other action by the Agent or
the Lenders.
SECTION 10
AGENCY PROVISIONS
-----------------
10.1 Appointment, Powers and Immunities.
Each Lender hereby irrevocably appoints and authorizes the Agent to act as
its agent under this Credit Agreement and the other Credit Documents with such
powers and discretion as are specifically delegated to the Agent by the terms of
this Credit Agreement and the other Credit Documents, together with such other
powers as are reasonably incidental thereto. The Agent (which term as used in
this sentence and in Section 10.5 and the first sentence of Section 10.6 hereof
shall include its Affiliates and its own and its Affiliates' officers,
directors, employees, and agents): (a) shall not have any duties or
responsibilities except those expressly set forth in this Credit Agreement and
shall not be a trustee or fiduciary for any Lender; (b) shall not be responsible
to the Lenders for any recital, statement, representation, or warranty (whether
written or oral) made in or in connection with any Credit Document or any
certificate or other document referred to or provided for in, or received by any
of them under, any Credit Document, or for the value, validity, effectiveness,
genuineness, enforceability, or sufficiency of any Credit Document, or any other
document referred to or provided for therein or for any failure by any Credit
Party or any other Person to perform any of its obligations thereunder; (c)
shall not be responsible for or have any duty to ascertain, inquire into, or
verify the performance or observance of any covenants or agreements by any
Credit Party or the satisfaction of any
87
condition or to inspect the property (including the books and records) of any
Credit Party or any of its Subsidiaries or Affiliates; (d) shall not be required
to initiate or conduct any litigation or collection proceedings under any Credit
Document; and (e) shall not be responsible for any action taken or omitted to be
taken by it under or in connection with any Credit Document, except for its own
gross negligence or willful misconduct. The Agent may employ agents and
attorneys-in-fact and shall not be responsible for the negligence or misconduct
of any such agents or attorneys-in-fact selected by it with reasonable care.
10.2 Reliance by Agent.
The Agent shall be entitled to rely upon any certification, notice,
instrument, writing, or other communication (including, without limitation, any
thereof by telephone or telecopy) believed by it to be genuine and correct and
to have been signed, sent or made by or on behalf of the proper Person or
Persons, and upon advice and statements of legal counsel (including counsel for
any Credit Party), independent accountants, and other experts selected by the
Agent. The Agent may deem and treat the payee of any Note as the holder thereof
for all purposes hereof unless and until the Agent receives and accepts an
Assignment and Acceptance executed in accordance with Section 11.3(b) hereof. As
to any matters not expressly provided for by this Credit Agreement, the Agent
shall not be required to exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Required Lenders,
and such instructions shall be binding on all of the Lenders; provided, however,
that the Agent shall not be required to take any action that exposes the Agent
to personal liability or that is contrary to any Credit Document or applicable
law or unless it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking any such action.
10.3 Defaults.
The Agent shall not be deemed to have knowledge or notice of the occurrence
of a Default or Event of Default unless the Agent has received written notice
from a Lender or the a Credit Party specifying such Default or Event of Default
and stating that such notice is a "Notice of Default". In the event that the
Agent receives such a notice of the occurrence of a Default or Event of Default,
the Agent shall give prompt notice thereof to the Lenders. The Agent shall
(subject to Section 10.2 hereof) take such action with respect to such Default
or Event of Default as shall reasonably be directed by the Required Lenders,
provided that, unless and until the Agent shall have received such directions,
the Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interest of the Lenders.
10.4 Rights as a Lender.
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With respect to its Commitment and the Loans made by it, First Union
National Bank (and any successor acting as Agent) in its capacity as a Lender
hereunder shall have the same rights and powers hereunder as any other Lender
and may exercise the same as though it were not acting as the Agent, and the
term "Lender" or "Lenders" shall, unless the context otherwise indicates,
include the Agent in its individual capacity. First Union National Bank (and any
successor acting as Agent) and its Affiliates may (without having to account
therefor to any Lender) accept deposits from, lend money to, make investments
in, provide services to, and generally engage in any kind of lending, trust, or
other business with any Credit Party or any of its Subsidiaries or Affiliates as
if it were not acting as Agent, and First Union National Bank (and any successor
acting as Agent) and its Affiliates may accept fees and other consideration from
any Credit Party or any of its Subsidiaries or Affiliates for services in
connection with this Credit Agreement or otherwise without having to account for
the same to the Lenders.
10.5 Indemnification.
The Lenders agree to indemnify the Agent (to the extent not reimbursed
under Section 11.5 hereof, but without limiting the obligations of the Credit
Parties under such Section) ratably in accordance with their respective
Commitments, for any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses (including attorneys'
fees), or disbursements of any kind and nature whatsoever that may be imposed
on, incurred by or asserted against the Agent (including by any Lender) in any
way relating to or arising out of any Credit Document or the transactions
contemplated thereby or any action taken or omitted by the Agent under any
Credit Document (including any of the foregoing arising from the negligence of
the Agent); provided that no Lender shall be liable for any of the foregoing to
the extent they arise from the gross negligence or willful misconduct of the
Person to be indemnified. Without limitation of the foregoing, each Lender
agrees to reimburse the Agent promptly upon demand for its ratable share of any
costs or expenses payable by the Credit Parties under Section 11.5, to the
extent that the Agent is not promptly reimbursed for such costs and expenses by
the Credit Parties. The agreements in this Section 10.5 shall survive the
repayment of the Loans, LOC Obligations and other obligations under the Credit
Documents and the termination of the Commitments hereunder.
10.6 Non-Reliance on Agent and Other Lenders.
Each Lender agrees that it has, independently and without reliance on the
Agent or any other Lender, and based on such documents and information as it has
deemed appropriate, made its own credit analysis of the Credit Parties and their
Subsidiaries and decision to enter into this Credit Agreement and that it will,
independently and without reliance upon the Agent or any other Lender, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own analysis and decisions in taking or not taking action
under the Credit Documents. Except for notices, reports, and other documents and
information expressly required to be furnished to the Lenders by the Agent
hereunder, the Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the
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affairs, financial condition, or business of any Credit Party or any of its
Subsidiaries or Affiliates that may come into the possession of the Agent or any
of its Affiliates.
10.7 Successor Agent.
The Agent may resign at any time by giving notice thereof to the Lenders
and the Credit Parties. Upon any such resignation, the Required Lenders shall
have the right to appoint a successor Agent with the approval of the Borrower
(so long as no Event of Default has occurred and is continuing), which approval
shall not be unreasonably withheld or delayed. If no successor Agent shall have
been so appointed by the Required Lenders and shall have accepted such
appointment within thirty (30) days after the retiring Agent's giving of notice
of resignation, then the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent which shall be a commercial bank organized under the laws of the
United States of America having combined capital and surplus of at least
$100,000,000. Upon the acceptance of any appointment as Agent hereunder by a
successor, such successor shall thereupon succeed to and become vested with all
the rights, powers, discretion, privileges, and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Section 10 shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
Agent.
SECTION 11
MISCELLANEOUS
-------------
11.1 Notices.
Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (a) when
delivered, (b) when transmitted via telecopy (or other facsimile device) to the
number set out below, (c) the Business Day following the day on which the same
has been delivered prepaid to a reputable national overnight air courier
service, or (d) the third Business Day following the day on which the same is
sent by certified or registered mail, postage prepaid, in each case to the
respective parties at the address, in the case of the Credit Parties and the
Agent, set forth below, and, in the case of the Lenders, set forth on Schedule
2.1(a), or at such other address as such party may specify by written notice to
the other parties hereto:
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if to any Credit Party:
National Equipment Services, Inc.
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxx, Vice President, Secretary
Telephone: (000) 000-0000 (ext. 11)
Telecopy: (000) 000-0000
With a copy to:
Sandford E. Perl, Esq.
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Telecopy: 000-000-0000
if to the Agent:
First Union National Bank
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx, XX-00
Attn: Agency Services
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
First Union National Bank
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx, XX-0
Attn: Xxxx Xxxxxxxxxx, Vice President
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
91
the Notes, under any other Credit Document or otherwise, irrespective of whether
such Lender shall have made any demand under hereunder or thereunder and
although such obligations may be unmatured. Each Lender agrees promptly to
notify any affected Credit Party after any such set-off and application made by
such Lender; provided, however, that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of each Lender
under this Section 11.2 are in addition to other rights and remedies (including,
without limitation, other rights of set-off) that such Lender may have.
11.3 Benefit of Agreement.
(a) This Credit Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and assigns of
the parties hereto; provided that none of the Credit Parties may assign or
transfer any of its interests and obligations without prior written consent
of the Lenders; provided further that the rights of each Lender to
transfer, assign or grant participations in its rights and/or obligations
hereunder shall be limited as set forth in this Section 11.3.
(b) Each Lender may assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Credit Agreement
(including, without limitation, all or a portion of its Loans, its Notes,
and its Commitment); provided, however, that
(i) each such assignment shall be to an Eligible Assignee;
(ii) except in the case of an assignment to another Lender or an
assignment of all of a Lender's rights and obligations under this
Credit Agreement, any such partial assignment shall be in an amount at
least equal to $5,000,000 (or, if less, the remaining amount of the
Commitment being assigned by such Lender) or an integral multiple of
$1,000,000 in excess thereof;
(iii) each such assignment by a Lender shall be of a constant,
and not varying, percentage of all of its rights and obligations under
this Credit Agreement and the Notes; and
(iv) the parties to such assignment shall execute and deliver to
the Agent for its acceptance an Assignment and Acceptance in the form
of Exhibit 11.3(b) hereto, together with any Note subject to such
assignment and a processing fee of $3,500.
Upon execution, delivery, and acceptance of such Assignment and Acceptance,
the assignee thereunder shall be a party hereto and, to the extent of such
assignment, have the obligations, rights, and benefits of a Lender
hereunder and the assigning Lender shall, to the extent of such assignment,
relinquish its rights and be released from its obligations under this
Credit Agreement. Upon the consummation of any assignment pursuant to this
92
Section 11.3(b), the assignor, the Agent and the Credit Parties shall make
appropriate arrangements so that, if required, new Notes are issued to the
assignor and the assignee. If the assignee is not a United States person
under Section 7701(a)(30) of the Code, it shall deliver to the Credit
Parties and the Agent certification as to exemption from deduction or
withholding of Taxes in accordance with Section 3.11.
(c) The Agent shall maintain at its address referred to in Section
11.1 a copy of each Assignment and Acceptance delivered to and accepted by
it and a register for the recordation of the names and addresses of the
Lenders and the Commitment of, and principal amount of the Loans owing to,
each Lender from time to time (the "Register"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error,
and the Credit Parties, the Agent and the Lenders may treat each Person
whose name is recorded in the Register as a Lender hereunder for all
purposes of this Credit Agreement. The Register shall be available for
inspection by the Credit Parties or any Lender at any reasonable time and
from time to time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed by the
parties thereto, together with any Note subject to such assignment and
payment of the processing fee, the Agent shall, if such Assignment and
Acceptance has been completed and is in substantially the form of Exhibit
11.3(b) hereto, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the parties thereto.
(e) Each Lender may sell participations to one or more Persons in all
or a portion of its rights, obligations or rights and obligations under
this Credit Agreement (including all or a portion of its Commitment or its
Loans); provided, however, that (i) such Lender's obligations under this
Credit Agreement shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations, (iii) the participant shall be entitled to the benefit of the
yield protection provisions contained in Sections 3.7 through 3.12,
inclusive, and the right of set-off contained in Section 11.2, and (iv) the
Credit Parties shall continue to deal solely and directly with such Lender
in connection with such Lender's rights and obligations under this Credit
Agreement, and such Lender shall retain the sole right to enforce the
obligations of the Credit Parties relating to the Credit Party Obligations
owing to such Lender and to approve any amendment, modification, or waiver
of any provision of this Credit Agreement (other than amendments,
modifications, or waivers decreasing the amount of principal of or the rate
at which interest is payable on such Loans or Notes, extending any
scheduled principal payment date or date fixed for the payment of interest
on such Loans or Notes, or extending its Commitment).
(f) Notwithstanding any other provision set forth in this Credit
Agreement, any Lender may at any time assign and pledge all or any portion
of its Loans and its Notes to any Federal Reserve Bank as collateral
security pursuant to Regulation A and any
93
Operating Circular issued by such Federal Reserve Bank. No such assignment
shall release the assigning Lender from its obligations hereunder.
(g) Any Lender may furnish any information concerning the Consolidated
Parties in the possession of such Lender from time to time to assignees and
participants (including prospective assignees and participants), subject,
however, to the provisions of Section 11.15 hereof.
11.4 No Waiver; Remedies Cumulative.
No failure or delay on the part of the Agent or any Lender in exercising
any right, power or privilege hereunder or under any other Credit Document and
no course of dealing between the Agent or any Lender and any of the Credit
Parties shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or under any other Credit
Document preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder or thereunder. The rights and remedies
provided herein are cumulative and not exclusive of any rights or remedies which
the Agent or any Lender would otherwise have. No notice to or demand on any
Credit Party in any case shall entitle the Credit Parties to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of the Agent or the Lenders to any other or further action
in any circumstances without notice or demand.
11.5 Expenses; Indemnification.
(a) The Credit Parties jointly and severally agree to pay on demand all costs
and expenses of the Agent in connection with the syndication, preparation,
execution, delivery, administration, modification, and amendment of this Credit
Agreement, the other Credit Documents, and the other documents to be delivered
hereunder, including, without limitation, the reasonable fees and expenses of
counsel for the Agent (including the cost of internal counsel) with respect
thereto and with respect to advising the Agent as to its rights and
responsibilities under the Credit Documents. The Credit Parties further jointly
and severally agree to pay on demand all costs and expenses of the Agent and the
Lenders, if any (including, without limitation, reasonable attorneys' fees and
expenses and the cost of internal counsel), in connection with the enforcement
(whether through negotiations, legal proceedings, or otherwise) of the Credit
Documents and the other documents to be delivered hereunder.
(b) The Credit Parties jointly and severally agree to indemnify and hold
harmless the Agent and each Lender and each of their Affiliates and their
respective officers, directors, employees, agents, and advisors (each, an
"Indemnified Party") from and against any and all claims, damages, losses,
liabilities, costs, and expenses (including, without limitation, reasonable
attorneys' fees) that may be incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection with or by
reason of (including, without limitation, in connection with any investigation,
litigation, or proceeding or preparation of defense in connection therewith) the
Credit Documents, any of the transactions contemplated herein or the
94
actual or proposed use of the proceeds of the Loans (including any of the
foregoing arising from the negligence of the Indemnified Party), except to the
extent such claim, damage, loss, liability, cost, or expense is found in a
final, non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party's gross negligence or willful misconduct.
In the case of an investigation, litigation or other proceeding to which the
indemnity in this Section 11.5 applies, such indemnity shall be effective
whether or not such investigation, litigation or proceeding is brought by any of
the Credit Parties, their respective directors, shareholders or creditors or an
Indemnified Party or any other Person or any Indemnified Party is otherwise a
party thereto and whether or not the transactions contemplated hereby are
consummated. The Credit Parties agree not to assert any claim against the Agent,
any Lender, any of their Affiliates, or any of their respective directors,
officers, employees, attorneys, agents, and advisers, on any theory of
liability, for special, indirect, consequential, or punitive damages arising out
of or otherwise relating to the Credit Documents, any of the transactions
contemplated herein or the actual or proposed use of the proceeds of the Loans.
(c) Without prejudice to the survival of any other agreement of the 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:
(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
95
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) except as the result of or in connection with an Asset
Disposition permitted by Section 8.5, release all or substantially all
of the Collateral,
(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 Lenders holding in the aggregate more
than 50% of the outstanding Term Loan, extend the time for or the amount or
the manner of application of proceeds of any mandatory prepayment required
by Sections 3.3(b)(ii) or (iii) hereof;
(iii) without the consent of the Agent, no provision of Section 10
may be amended; and
(iv) without the consent of the Issuing Lender, no provision of
Section 2.2 may be amended.
Notwithstanding the fact that the consent of all the Lenders is required in
certain circumstances as set forth above, (x) each Lender is entitled to
vote as such Lender sees fit on any bankruptcy reorganization plan that
affects the Loans, and each Lender acknowledges that the provisions of
Section 1126(c) of the Bankruptcy Code supersedes the unanimous consent
provisions set forth herein and (y) the Required Lenders may consent to
allow a Credit Party to use cash collateral in the context of a bankruptcy
or insolvency proceeding.
11.7 Counterparts.
This Credit Agreement may be executed in any number of counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall constitute one and the same instrument. It shall not be necessary in
making proof of this Credit Agreement to produce or account for more than one
such counterpart for each of the parties hereto. Delivery by facsimile by any of
the parties hereto of an executed counterpart of this Credit Agreement shall be
as effective as an
96
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; Waiver of Trial by
Jury.
(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 NEW YORK. Any legal
action or proceeding with respect to this Credit Agreement or any other
Credit Document may be brought in the courts of the State of North Carolina
in Mecklenburg County or of the United States for the Western District of
North Carolina or of the State of New York or of the United States for the
Southern District of New York, and, by execution and delivery of this
Credit Agreement, each of the Credit Parties hereby irrevocably accepts for
itself and in respect of its property, generally and unconditionally, the
nonexclusive jurisdiction of such courts. Each of the Credit Parties
further irrevocably consents to the service of process out of any of the
aforementioned courts in any such action or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, to it at
the address set out for notices pursuant to Section 11.1, such service to
become effective three (3) days after such mailing. Nothing herein shall
affect the right of the Agent or any Lender to serve process in any other
manner permitted by law or to commence legal proceedings or to otherwise
proceed against any Credit Party in any other jurisdiction.
(b) Each of the Credit Parties hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of any
of the aforesaid actions or proceedings arising out of or in connection
with this Credit Agreement or any other Credit Document brought in the
courts referred to in subsection (a) above and hereby further
97
irrevocably waives and agrees not to plead or claim in any such court that
any such action or proceeding brought in any such court has been brought in
an inconvenient forum.
(c) TO THE EXTENT PERMITTED BY LAW, EACH OF THE AGENT, THE LENDERS AND
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 Arbitration.
(a) Notwithstanding the provisions of Section 11.1 to the contrary,
upon demand of any party hereto, whether made before or after institution
of any judicial proceeding, any dispute, claim or controversy arising out
of, connected with or relating to this Credit Agreement and other Credit
Documents ("Disputes") between or among parties to this Credit Agreement
shall be resolved by binding arbitration as provided herein. Institution of
a judicial proceeding by a party does not waive the right of that party to
demand arbitration hereunder. Disputes may include, without limitation,
tort claims, counterclaims, disputes as to whether a matter is subject to
arbitration, claims brought as class actions, claims arising from Credit
Documents executed in the future, or claims arising out of or connected
with the transaction reflected by this Credit Agreement.
Arbitration shall be conducted under and governed by the Commercial
Financial Disputes Arbitration Rules (the "Arbitration Rules") of the
American Arbitration Association (the "AAA") and Title 9 of the U.S. Code.
All arbitration hearings shall be conducted in Charlotte, North Carolina. A
hearing shall begin within 90 days of demand for arbitration and all
hearings shall be concluded within 120 days of demand for arbitration.
These time limitations may not be extended unless a party shows cause for
extension and then no more than a total extension of 60 days. The expedited
procedures set forth in Rule 51 et seq. of the Arbitration Rules shall be
applicable to claims of less than $1,000,000. All applicable statutes of
limitation shall apply to any Dispute. The panel from which all arbitrators
are selected shall be comprised of licensed attorneys selected from the
Commercial Financial Dispute Arbitration Panel of the AAA. The single
arbitrator selected for expedited procedure shall be a retired judge from
the highest court of general jurisdiction, state or federal, of the state
where the hearing will be conducted or if such person is not available to
serve, the single arbitrator may be a licensed attorney. The parties hereto
do not waive applicable Federal or state substantive law except as provided
herein. A judgment upon the award may be entered in any court having
jurisdiction. Notwithstanding the foregoing, this arbitration provision
does not apply to disputes under or related to swap agreements.
(b) Notwithstanding the preceding binding arbitration provisions, the
Agent, the Lenders and the Credit Parties agree to preserve, without
diminution, certain remedies that the
98
Agent on behalf of the Lenders may employ or exercise freely, independently
or in connection with an arbitration proceeding or after an arbitration
action is brought. The Agent on behalf of the Lenders shall have the right
to proceed in any court of proper jurisdiction or by self-help to exercise
or prosecute the following remedies, as applicable (i) all rights to
foreclose against any real or personal property or other security by
exercising a power of sale granted under Credit Documents or under
applicable law or by judicial foreclosure and sale, including a proceeding
to confirm the sale; (ii) all rights of self-help including peaceful
occupation of real property and collection of rents, set-off, and peaceful
possession of personal property; (iii) obtaining provisional or ancillary
remedies including injunctive relief, sequestration, garnishment,
attachment, appointment of receiver and filing an involuntary bankruptcy
proceeding; and (iv) when applicable, a judgment by confession of judgment.
Any claim or controversy with regard to the Agent's entitlement on behalf
of the Lenders to such remedies is a Dispute. Preservation of these
remedies does not limit the power of an arbitrator to grant similar
remedies that may be requested by a party in a Dispute.
(c) The parties hereto agree that they shall not have a remedy of
punitive or exemplary damages against the other in any Dispute and hereby
waive any right or claim to punitive or exemplary damages they have now or
which may arise in the future in connection with any Dispute whether the
Dispute is resolved by arbitration or judicially.
(d) By execution and delivery of this Credit Agreement, each of the
parties hereto accepts, for itself and in connection with its properties,
generally and unconditionally, the non-exclusive jurisdiction relating to
any arbitration proceedings conducted under the Arbitration Rules in
Charlotte, North Carolina and irrevocably agrees to be bound by any final
judgment rendered thereby in connection with this Credit Agreement from
which no appeal has been taken or is available.
11.12 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.
11.13 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 (but excluding the Agent's Commitment Letter and
the Agent's Fee Letters).
11.14 Binding Effect; Termination.
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(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
Agent, and the Agent shall have received copies hereof (telefaxed or
otherwise) which, when taken together, bear the signatures of each Lender,
and thereafter this Credit Agreement shall be binding upon and inure to the
benefit of each Credit Party, the Agent and each Lender and their
respective successors and assigns.
(b) The term of this Credit Agreement shall be until no Loans, LOC
Obligations or any other amounts payable hereunder or under any of the
other Credit Documents shall remain outstanding, no Letters of Credit shall
be outstanding, all of the Credit Party Obligations have been irrevocably
satisfied in full and all of the Commitments hereunder shall have expired
or been terminated.
11.15 Confidentiality.
The Agent and each Lender (each, a "Lending Party") agrees to keep
confidential any information furnished or made available to it by the Credit
Parties pursuant to this Credit Agreement that is marked confidential; provided
that nothing herein shall prevent any Lending Party from disclosing such
information (a) to any other Lending Party or any Affiliate of any Lending
Party, or any officer, director, employee, agent, or advisor of any Lending
Party or Affiliate of any Lending Party, (b) to any other Person if it is
reasonably necessary for the administration of the credit facility provided
herein, (c) as required by any law, rule, or regulation, (d) upon the order of
any court or administrative agency, (e) upon the request or demand of any
regulatory agency or authority, (f) that is or becomes available to the public
or that is or becomes available to any Lending Party other than as a result of a
disclosure by any Lending Party prohibited by this Credit Agreement, (g) in
connection with any litigation to which such Lending Party or any of its
Affiliates may be a party, (h) to the extent necessary in connection with the
exercise of any remedy under this Credit Agreement or any other Credit Document,
(i) subject to provisions substantially similar to those contained in this
Section 11.15, to any actual or proposed participant or assignee and (j) to Gold
Sheets and other similar bank trade publications (such information to consist of
deal terms and other information customarily found in such publications).
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 Page to Follow]
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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this Credit Agreement to be duly executed and delivered as of the date first
above written.
BORROWER: NATIONAL EQUIPMENT SERVICES, INC.
--------
By: /s/ Xxxx X. Xxxxxxxxx
----------------------
Name: Xxxx X. Xxxxxxxxx
----------------------
Title: Vice President
----------------------
SUBSIDIARY
GUARANTORS: NES ACQUISITION CORP.
----------
By: /s/ Xxxx X. Xxxxxxxxx
----------------------
Name: Xxxx X. Xxxxxxxxx
----------------------
Title: Vice President
----------------------
BAT ACQUISITION CORP.
By: /s/ Xxxx X. Xxxxxxxxx
----------------------
Name: Xxxx X. Xxxxxxxxx
----------------------
Title: Vice President
----------------------
NES EAST ACQUISITION CORP.
By: /s/ Xxxx X. Xxxxxxxxx
----------------------
Name: Xxxx X. Xxxxxxxxx
----------------------
Title: Vice President
----------------------
NES MICHIGAN ACQUISITION CORP.
By: /s/ Xxxx X. Xxxxxxxxx
----------------------
Name: Xxxx X. Xxxxxxxxx
----------------------
Title: Vice President
----------------------
ALBANY LADDER COMPANY, INC.
By: /s/ Xxxx X. Xxxxxxxxx
----------------------
Name: Xxxx X. Xxxxxxxxx
----------------------
Title: Vice President
----------------------
FALCONITE, INC.
By: /s/ Xxxx X. Xxxxxxxxx
----------------------
Name: Xxxx X. Xxxxxxxxx
----------------------
Title: Vice President
----------------------
FALCONITE EQUIPMENT, INC.
By: /s/ Xxxx X. Xxxxxxxxx
----------------------
Name: Xxxx X. Xxxxxxxxx
----------------------
Title: Vice President
----------------------
M&M PROPERTIES, INC.
By: /s/ Xxxx X. Xxxxxxxxx
----------------------
Name: Xxxx X. Xxxxxxxxx
----------------------
Title: Vice President
----------------------
CARL'S MID SOUTH RENT-ALL CENTER
INCORPORATED
By: /s/ Xxxx X. Xxxxxxxxx
----------------------
Name: Xxxx X. Xxxxxxxxx
----------------------
Title: Vice President
----------------------
FALCONITE REBUILD CENTER, INC.
By: /s/ Xxxx X. Xxxxxxxxx
----------------------
Name: Xxxx X. Xxxxxxxxx
----------------------
Title: Vice President
----------------------
FALCONITE AVIATION, INC.
By: /s/ Xxxx X. Xxxxxxxxx
----------------------
Name: Xxxx X. Xxxxxxxxx
----------------------
Title: Vice President
----------------------
XXXXXXX & FALCONITE EQUIPMENT CO.,
INC.
By: /s/ Xxxx X. Xxxxxxxxx
----------------------
Name: Xxxx X. Xxxxxxxxx
----------------------
Title: Vice President
----------------------
LENDERS: FIRST UNION NATIONAL BANK,
------- individually in its capacity as a
Lender and in its capacity as Agent
By: /s/ Xxxx X. Xxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxx
-----------------------------------
Title: Senior Vice President
----------------------------------
COMERICA BANK,
as a Lender
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
-----------------------------------
Title: First Vice President
----------------------------------
THE CIT GROUP/BUSINESS CREDIT, INC.,
as a Lender
By: /s/ Xxxx Xxxxx
-------------------------------------
Name: Xxxx Xxxxx
-----------------------------------
Title: Vice President
----------------------------------
AMERICAN NATIONAL BANK AND
TRUST COMPANY OF CHICAGO,
as a Lender
By: /s/ Xxxxx X. Xxxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxxx
-----------------------------------
Title: Vice President
----------------------------------
MERCANTILE BUSINESS CREDIT INC.,
as a Lender
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
-----------------------------------
Title: Vice President
----------------------------------
