FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this "AMENDMENT") dated as of
October 6, 2000, to the Credit Agreement referenced below, is by and among
XXXXXX XXXXX & COMPANY, a Delaware corporation (the "BORROWER"), XXXXXX XXXXX
& COMPANY HOLDINGS, a Delaware corporation (the "PARENT"), the Domestic
Subsidiaries of the Parent identified on the signature pages hereto as
"Subsidiary Guarantors" (the "SUBSIDIARY GUARANTORS" and together with the
Parent, the "GUARANTORS"), the Banks identified on the signature pages hereto
and Bank of America, N.A., a national banking association formerly known as
NationsBank, N.A., as agent for the Banks (in such capacity, together with any
successor in such capacity, the "AGENT").
W I T N E S S E T H
WHEREAS, a $120 million credit facility has been extended to the Borrower
pursuant to the terms of that certain Credit Agreement dated as of June 30,
1998 (as amended, modified and supplemented from time to time, the "EXISTING
CREDIT AGREEMENT") among the Borrower, the Parent, the Subsidiary Guarantors,
the Banks identified therein and the Agent;
WHEREAS, the Borrower has requested certain modifications to the Existing
Credit Agreement;
WHEREAS, the requested modifications require the consent of the Majority
Banks;
WHEREAS, the Majority Banks have agreed to the requested modifications on
the terms and conditions set forth herein;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
PART 1
DEFINITIONS
SUBPART 1.1 DEFINITIONS. Unless otherwise defined herein or the context
otherwise requires, terms used in this Amendment, including its preamble and
recitals, have the meanings provided to such terms in the Amended Credit
Agreement.
PART 2
AMENDMENTS TO EXISTING CREDIT AGREEMENT
SUBPART 2.1 AMENDMENTS TO EXISTING CREDIT AGREEMENT. The Existing Credit
Agreement is hereby amended and replaced in its entirety with the Amended
Credit Agreement attached hereto as Annex A (the "AMENDED CREDIT AGREEMENT").
SUBPART 2.2 NO OTHER AMENDMENTS. Except as expressly modified hereby, all of
the terms and provisions of the Credit Agreement and the other Credit
Documents (including, in each case, schedules and exhibits) shall remain in
full force and effect.
PART 3
CONSENTS
SUBPART 3.1 AMENDMENT OF THE EMPLOYEE PROMISSORY NOTES AND THE EMPLOYEE PLEDGE
AGREEMENTS. The Majority Banks hereby consent to (a) the amendment,
restatement and replacement of the existing Employee Notes with new Employee
Notes in the form of EXHIBIT B to the Amended Credit Agreement (the "AMENDED
EMPLOYEE NOTES") and (b) the amendment, restatement and replacement of the
existing Employee Pledge Agreements with new Employee Pledge Agreements in the
form of Exhibit D-1 to the Amended Credit Agreement (for individual
purchasers) or Exhibit D-2 to the Amended Credit Agreement (for personal
holding companies) (the "AMENDED EMPLOYEE PLEDGE AGREEMENTS").
SUBPART 3.2 RESTRUCTURING OF CONSOLIDATED GROUP. Notwithstanding the
provisions of Section 7.3 of the Existing Credit Agreement, the Majority Banks
hereby consent to the restructuring of capital and ownership structure of the
Borrower and its Subsidiaries pursuant to which (a) the Parent will acquire
100% of the capital stock of the Borrower, (b) the existing shareholders of
the Borrower will surrender their shares of common stock of the Borrower in
exchange for outstanding common stock of the Parent and (c) a portion of the
common stock of the Parent will be sold to the public in the IPO.
SUBPART 3.3 RELEASE OF LIENS ON EMPLOYEE PLEDGED SHARES SOLD IN IPO. The
Majority Banks hereby consent to the release of the Liens in favor of the
Agent, for the benefit of the Banks, on those Employee Pledged Shares which
are sold by Qualified Employees in connection with the IPO; PROVIDED that the
Liens on those Employee Pledged Shares which are not sold by Qualified
Employees in connection with the IPO shall not be released and shall remain in
full force and effect.
PART 4
TERMINATION OF EMPLOYEE LOAN COMMITMENT
SUBPART 4.1 TERMINATION OF EMPLOYEE LOAN COMMITMENT. The Employee Loan
Commitment is hereby terminated. The Employee Loans outstanding on the date
hereof shall remain outstanding under the terms of the Amended Credit
Agreement, the Amended Employee Notes and the Amended Employee Pledge
Agreements.
PART 5
CONDITIONS PRECEDENT TO EFFECTIVENESS
SUBPART 5.1 CONDITIONS PRECEDENT TO EFFECTIVENESS. This Amendment shall be
effective as of the date hereof upon the satisfaction of the following
conditions:
(a) receipt by the Agent of (i) a Joinder Agreement from the Parent
relating to the Existing Credit Agreement and the other Credit Documents and
(ii) appropriate UCC-1 financing statements for the jurisdiction of the chief
executive office of the Parent and each other jurisdiction where the Parent
maintains any other Collateral, in each case duly executed and delivered by
the Parent;
(b) receipt by the Agent of multiple counterparts of the First Amendment
executed by the Credit Parties and the Majority Lenders;
(c) receipt by the Agent of multiple counterparts of a reaffirmation of
the Borrower Guaranty (relating to the guaranty by the Borrower of the
Employee Loans), in form and substance satisfactory to the Agent, executed by
the Borrower;
(d) the IPO shall have been completed;
(e) receipt by the Agent of a description of the corporate structure of
the Consolidated Group;
(f) receipt by the Agent of the following corporate documents with
respect to the Parent:
(i) a certificate of good standing, existence or its equivalent
certified as of a recent date by the appropriate governmental
authority of the state of incorporation of the Parent;
(ii) a copy of the articles or certificates of incorporation or
other charter documents of the Parent certified to be true and
complete as of a recent date by the appropriate governmental
authority of the state of incorporation of the Parent and certified
by a secretary or assistant secretary of the Parent to be true and
correct as of the First Amendment Date;
(iii) a copy of the bylaws of the Parent certified by a
secretary or assistant secretary of the Parent to be true and correct
and in force and effect as of the First Amendment Date;
(iv) a copy of the resolutions of the board of directors of the
Parent approving and adopting the Joinder Agreement and the other
Credit Documents, the transactions contemplated therein and
authorizing execution and delivery thereof, certified by a secretary
or assistant secretary of the Parent to be true and correct and in
force and effect as of the First Amendment Date; and
(v) an incumbency certificate for each officer of the Parent
authorized to execute the Joinder Agreement and the other Credit
Documents, certified by a secretary or assistant secretary of the
Parent as of the First Amendment Date.
(g) receipt by the Agent of a favorable opinion of counsel for the Credit
Parties in form, scope and substance satisfactory to the Agent;
(h) receipt by the Agent, for the benefit of the Lenders that consent to
this Amendment, of an amendment fee equal to 15 basis points (0.15%) on the
Aggregate Revolving Credit Commitment; and
(i) receipt by the Agent of all other fees due in connection with this
Amendment.
PART 6
MISCELLANEOUS
SUBPART 6.1 REPRESENTATIONS AND WARRANTIES; NO DEFAULT. The Credit Parties
hereby affirm (i) the representations and warranties set out in Section 4 of
the Credit Agreement are true and correct as of the date hereof (except those
which expressly relate to an earlier period) and (ii) no Default or Event of
Default presently exists.
SUBPART 6.2 GUARANTORS. Each of the Guarantors (i) acknowledges and consents
to all of the terms and conditions of this Amendment, (ii) affirms all of its
obligations under the Credit Documents and (iii) agrees that this Amendment
and all documents executed in connection herewith do not operate to reduce or
discharge the Guarantors' obligations under the Credit Agreement or the other
Credit Documents.
SUBPART 6.3 AFFIRMATION OF LIENS. Each Credit Party affirms the liens and
security interests granted by such Credit Party to the Agent and the Lenders
in the Credit Documents and agrees that this Amendment shall in no manner
adversely affect or impair such liens and security interests.
SUBPART 6.4 COSTS AND EXPENSES. The Borrower agrees to pay all reasonable
costs and expenses of the Agent in connection with the preparation, execution
and delivery of this Amendment, including without limitation the reasonable
fees and expenses of Xxxxx & Xxx Xxxxx, PLLC.
SUBPART 6.5 COUNTERPARTS. This Amendment may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original and it shall not be necessary in making proof of this Amendment to
produce or account for more than one such counterpart.
SUBPART 6.6 GOVERNING LAW. This Amendment shall be deemed to be a contract
made under, and for all purposes shall be construed in accordance with, the
laws of the State of North Carolina.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this First Amendment to be duly executed and delivered as of the date first
above written.
BORROWER XXXXXX XXXXX & COMPANY
(d/b/a Xxxxxx Xxxxx Worldwide),
a Delaware corporation
ATTEST: /s/Xxxxxx X. Xxxxxxxxxxxx By:/s/Xxxx X. Xxxxxxxxx
------------------------- --------------------
Name: Xxxxxx X. Xxxxxxxxxxxx Name: Xxxx X. Xxxxxxxxx
Title: Secretary Title: Treasurer
PARENT XXXXXX XXXXX & COMPANY HOLDINGS,
a Delaware corporation
ATTEST: /s/Xxxxxx X. Xxxxxxxxxxxx By:/s/Xxxx X. Xxxxx
------------------------- ----------------
Name: Xxxxxx X. Xxxxxxxxxxxx Name: Xxxx X. Xxxxx
Title: Secretary Title: Vice President and
Chief Financial Officer
SUBSIDIARY GUARANTORS XXXXXX XXXXX INVESTMENT CONSULTING, INC.,
a Delaware corporation
XXXXX DATA SERVICES, INC.,
a Delaware corporation
XXXXXX XXXXX INTERNATIONAL, INC.,
a Nevada corporation
ATTEST: /s/Xxxxxx X. Xxxxxxxxxxxx By:/s/Xxxx X. Xxxxxxxxx
------------------------- --------------------
Name: Xxxxxx X. Xxxxxxxxxxxx Name: Xxxx X. Xxxxxxxxx
Title: Secretary of each of the Title: Treasurer of each of the
Subsidiary Guarantors Subsidiary Guarantors
BANKS BANK OF AMERICA, N.A., as a Bank and as Agent
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Managing Director
PNC BANK, NATIONAL ASSOCIATION
By:/s/ Xxxx X. Xxxxxxxx
--------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President
COMERICA BANK
By:/s/Xxxxxx X. Xxxxxx
-------------------
Name: Xxxxxx X. Xxxxxx
Title: Account Officer
FIRST UNION NATIONAL BANK
By:/s/X.X. Xxxxxxxx
----------------
Name: X.X. Xxxxxxxx
Title: Vice President
SUNTRUST BANK
By:/s/Xxxxx X. Xxxxxxx
-------------------
Name: Xxxxx X. Xxxxxxx
Title: Director
Corporate & Investment Banking
THE BANK OF NOVA SCOTIA
By:/s/ X.X. Xxxxxxxx
-----------------
Name: X.X. Xxxxxxxx
Title: Unit Head
ANNEX A
TO
FIRST AMENDMENT
AMENDED CREDIT AGREEMENT
See attached.
AMENDED CREDIT AGREEMENT
by and among
XXXXXX XXXXX & COMPANY,
as Borrower,
XXXXXX XXXXX & COMPANY HOLDINGS
and
CERTAIN OF ITS DOMESTIC SUBSIDIARIES,
as Guarantors,
THE BANKS PARTY HERETO
and
BANK OF AMERICA, N.A.,
as Agent
Dated as of October 6, 2000
$95,000,000
TABLE OF CONTENTS
PAGE
ARTICLE I. DEFINITIONS......................................................1
Section 1.1. DEFINITIONS.................................................1
Section 1.2. ACCOUNTING TERMS AND DETERMINATIONS........................16
Section 1.3. OTHER DEFINITIONAL PROVISIONS..............................16
ARTICLE II. LOANS AND PAYMENTS.............................................17
Section 2.1. LOANS......................................................17
Section 2.2. LOAN PROCEDURES; SERVICING.................................18
Section 2.3. THE BANKS' OBLIGATIONS UNDER THE LOANS.....................19
Section 2.4. EXTENSION AND CONVERSION...................................19
Section 2.5. LETTERS OF CREDIT..........................................20
Section 2.6. REPAYMENT..................................................25
Section 2.7. INTEREST...................................................25
Section 2.8. PREPAYMENTS; COMMITMENT INCREASE; REDUCTION OR TERMINATION.26
Section 2.9. FEES.......................................................28
Section 2.10. METHOD OF PAYMENT..........................................29
Section 2.11. APPLICATION OF COLLECTIONS.................................30
Section 2.12. CAPITAL ADEQUACY...........................................32
Section 2.13. INABILITY TO DETERMINE INTEREST RATE.......................32
Section 2.14. ILLEGALITY.................................................32
Section 2.15. REQUIREMENTS OF LAW........................................33
Section 2.16. TAXES......................................................34
Section 2.17. INDEMNITY..................................................36
ARTICLE III. GUARANTY.......................................................36
Section 3.1 THE GUARANTEE..............................................36
Section 3.2 OBLIGATIONS UNCONDITIONAL..................................37
Section 3.3 REINSTATEMENT..............................................38
Section 3.4 CERTAIN ADDITIONAL WAIVERS.................................38
Section 3.5 REMEDIES...................................................39
Section 3.6 RIGHTS OF CONTRIBUTION.....................................39
Section 3.7 CONTINUING GUARANTEE.......................................40
ARTICLE IV. REPRESENTATIONS AND WARRANTIES.................................40
Section 4.1. ORGANIZATION...............................................40
Section 4.2. AUTHORIZATION..............................................40
Section 4.3. VALIDITY...................................................41
Section 4.4. GOVERNMENTAL APPROVALS.....................................41
Section 4.5. LITIGATION.................................................41
Section 4.6. FINANCIAL CONDITION........................................41
Section 4.7. RECORDS, BUSINESS LOCATION AND SUBSIDIARIES................42
Section 4.8. ERISA......................................................42
Section 4.9. ENCUMBRANCES...............................................42
Section 4.10. MARGIN STOCK...............................................42
Section 4.11. GOVERNMENTAL REGULATIONS...................................43
Section 4.12. TAXES......................................................43
Section 4.13. BURDENSOME DOCUMENTS.......................................43
Section 4.14. ENVIRONMENTAL MATTERS......................................43
Section 4.15 EMPLOYEE LOANS; STOCK PLAN; QUALIFIED EMPLOYEE STATUS......44
Section 4.16 USE OF PROCEEDS............................................44
ARTICLE V. CONDITIONS PRECEDENT............................................44
Section 5.1 [RESERVED].................................................44
Section 5.2. CONDITIONS PRECEDENT TO LOANS AND ISSUANCE OF
LETTERS OF CREDIT..........................................45
ARTICLE VI. AFFIRMATIVE COVENANTS..........................................45
Section 6.1. PAYMENTS HEREUNDER.........................................45
Section 6.2. EXISTENCE AND GOOD STANDING; INSURANCE; CONDUCT............46
Section 6.3. TAXES AND CHARGES..........................................46
Section 6.4. FINANCIAL STATEMENTS.......................................46
Section 6.5 REPORTS....................................................47
Section 6.6. LOAN BALANCES..............................................48
Section 6.7. POSITIVE NET WORTH.........................................48
Section 6.8. BORROWER GUARANTY..........................................48
Section 6.9. EMPLOYEE PLEDGE AGREEMENTS; EMPLOYEE PLEDGED SHARES........48
Section 6.10. ADDITIONAL GUARANTIES, STOCK PLEDGES AND FURTHER ASSURANCES49
Section 6.11. ADDITIONAL GUARANTIES, STOCK PLEDGES AND FURTHER ASSURANCES50
Section 6.12. FURTHER ASSURANCES IN CONNECTION WITH RESTRUCTURING........50
ARTICLE VII. NEGATIVE COVENANTS............................................51
Section 7.1. INDEBTEDNESS...............................................51
Section 7.2. LIENS......................................................51
Section 7.3. CONSOLIDATION, MERGER, SALE OR PURCHASE OF ASSETS, ETC.....52
Section 7.4. FISCAL YEAR; GOVERNING DOCUMENTS...........................53
Section 7.5. INVESTMENTS................................................53
Section 7.6. FINANCIAL COVENANTS........................................53
Section 7.7. FRANCHISES.................................................54
Section 7.8. CAPITAL EXPENDITURES.......................................54
Section 7.9. TRANSACTION WITH AFFILIATES................................54
Section 7.10. LIMITATION ON RESTRICTIONS ON SUBSIDIARY DIVIDENDS
AND OTHER DISTRIBUTIONS, ETC...............................54
Section 7.11 ISSUANCE AND SALE OF SUBSIDIARY STOCK......................55
Section 7.12 LIMITATIONS ON PARENT......................................55
ARTICLE VIII. DEFAULT......................................................55
Section 8.1. EVENTS OF DEFAULT..........................................55
Section 8.2. ACCELERATION...............................................57
Section 8.3. RIGHT OF SETOFF............................................58
ARTICLE IX. AGENCY PROVISIONS..............................................58
Section 9.1 APPOINTMENT................................................58
Section 9.2 DELEGATION OF DUTIES.......................................59
Section 9.3 EXCULPATORY PROVISIONS.....................................59
Section 9.4 RELIANCE ON COMMUNICATIONS.................................59
Section 9.5 NOTICE OF DEFAULT..........................................60
Section 9.6 NON-RELIANCE ON AGENT AND OTHER BANKS......................60
Section 9.7 INDEMNIFICATION............................................61
Section 9.8 AGENT IN ITS INDIVIDUAL CAPACITY...........................61
Section 9.9 SUCCESSOR AGENT............................................61
ARTICLE X. MISCELLANEOUS...................................................62
Section 10.1. RIGHTS AND WAIVERS.........................................62
Section 10.2. BINDING EFFECT; ASSIGNMENT.................................62
Section 10.3. SEVERABILITY...............................................64
Section 10.4. INTERPRETATION.............................................64
Section 10.5. GOVERNING LAW; JURY TRIAL..................................64
Section 10.6. PAYMENT OF EXPENSES AND TAXES; INDEMNIFICATION.............64
Section 10.7. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.................65
Section 10.8. NOTICES....................................................65
Section 10.9. EXECUTION..................................................67
Section 10.10. AMENDMENTS.................................................67
Section 10.11. RELATIONSHIP OF THE PARTIES................................68
EXHIBITS
Exhibit B Form of Employee Note
Exhibit C Form of Guaranty
Exhibit D-1 Form of Employee Pledge Agreement (for Individuals)
Exhibit D-2 Form of Employee Pledge Agreement (for Holding Companies)
Exhibit E Form of Employee Stock Power
Exhibit F Form of Notice of Borrowing
Exhibit H Form of Joinder Agreement
Exhibit I Form of Agreement to Employee Pledge Agreements
SCHEDULES
Schedule 1 Subsidiaries
Schedule 2 Permitted Noncompliance
Schedule 3 Litigation
Schedule 4 Burdensome Documents
Schedule 5 Real Property
Schedule 6 Indebtedness
Schedule 7 Investments
Schedule 8 Employee Loans
AMENDED CREDIT AGREEMENT
THIS AMENDED CREDIT AGREEMENT (this "AGREEMENT", or this "CREDIT
AGREEMENT") is dated as of October 6, 2000, by and among XXXXXX XXXXX &
COMPANY, a Delaware corporation (the "BORROWER"), XXXXXX XXXXX & COMPANY
HOLDINGS, a Delaware corporation (the "PARENT"), certain Domestic Subsidiaries
of the Parent identified on the signature pages hereto as "Subsidiary
Guarantors" and such other Domestic Subsidiaries of the Parent as may become a
party hereto (the "SUBSIDIARY GUARANTORS" and together with the Parent, the
"GUARANTORS"), the banks named herein and such other banks as may become a
party hereto (the "BANKS") and Bank of America, N.A., a national banking
association formerly known as NationsBank, N.A., as agent for the Banks (in
such capacity, together with any successor in such capacity, the "AGENT").
WHEREAS, a $120 million credit facility has been established in favor of
the Borrower pursuant to the terms of that Credit Agreement dated as of June
30, 1998 (as amended and modified from time to time, the "EXISTING CREDIT
AGREEMENT") among the Borrower, the Guarantors, the Banks and the Agent;
WHEREAS, the Borrower has requested, and the Banks have agreed, to amend
and restate the Existing Credit Agreement in its entirety to provide for
certain amendments to the terms of the Existing Credit Agreement pursuant to
the terms set forth herein;
NOW, THEREFORE, in consideration of their mutual covenants and agreements
contained herein, the parties hereby covenant and agree as follows:
ARTICLE I. DEFINITIONS
Section 1.1. DEFINITIONS.
For purposes of this Agreement, terms bearing initial capitals and
defined in various sections hereof shall have the meanings stated therein; and
the following terms shall have the meanings stated below, except as the
context otherwise requires:
"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, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest whole multiple of 1/100 of 1%) equal to
the greater of (a) the Federal Funds Rate in effect on such day PLUS 2 of 1.0%
or (b) the Prime Rate in effect on such day, MINUS 1.0%. If for any reason the
Agent shall have determined (which determination shall be conclusive absent
manifest error) that it is unable after due inquiry to ascertain the Federal
Funds Rate for any reason, including the inability or failure of the Agent to
obtain sufficient quotations in accordance with the terms hereof, the Adjusted
Base Rate shall be determined without regard to clause (a) of the first
sentence of this definition until the circumstances giving rise to such
inability no longer exist. Any change in the Adjusted 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 the Federal Funds Rate,
respectively.
"Affiliate" means, as to any Person, any other Person which directly or
indirectly controls, is under common control with, or is controlled by, such
Person.
"Agent" has the meaning stated on page 1 hereof and, with respect to the
Employee Loans, shall include Bank of America in its individual capacity.
"Agent's Fee" has the meaning stated in Section 2.9.
"Agent's Fee Letter" means the letter agreement between the Agent and the
Borrower dated as of April 28, 1998.
"Aggregate Revolving Credit Commitment" has the meaning stated in Section
2.1(a).
"Agreement" has the meaning stated on page 1 hereof.
"Applicable Percentage" means, for purposes of calculating the applicable
interest rate for any day for any Eurodollar Loan or Base Rate Loan or the
applicable Unused Fee or the LOC Fee for any day for purposes of Section 2.9,
the appropriate applicable percentage corresponding to the Leverage Ratio in
effect as of the most recent Calculation Date:
Pricing Leverage Applicable Applicable Applicable Applicable
Level Ratio Percentage Percentage Percentage Percentage
for for for for
Eurodollar Loans LOC Fee Unused Fee Base Rate Loans
------------- ------------------------------ ----------------- ---------------- ----------------- -----------------
V Greater than or equal to 1.75% 1.75% 0.50% 0.50%
2.25 to 1.0
IV Less than 2.25 to 1.0 but 1.50% 1.50% 0.45% 0%
greater than or equal to
1.75 to 1.0
III Less than 1.75 to 1.0 but 1.25% 1.25% 0.375% 0%
greater than or equal to
1.25 to 1.0
II Less than 1.25 to 1.0 but 1.00% 1.00% 0.375% 0%
greater than or equal to
0.75 to 1.0
I Less than 0.75 0.75% 0.75% 0.30% 0%
Determination of the appropriate Applicable Percentages for the Loans
based on the Leverage Ratio shall be made as of each Calculation Date. The
Leverage Ratio in effect as of a Calculation Date shall establish the
Applicable Percentages that shall be effective as of the date designated by
the Agent as the Applicable Percentage Change Date; PROVIDED, HOWEVER, that a
new Applicable Percentage shall apply to outstanding Eurodollar Loans only if
and when such Eurodollar Loans are extended into new Interest Periods. The
Agent shall determine the Applicable Percentages as of each Calculation Date
and shall promptly notify the Borrower and the Banks of the Applicable
Percentages so determined and of the Applicable Percentage Change Date. The
Applicable Percentage for the purpose of calculating LOC Fees shall be fixed
for the term of each related Letter of Credit based on the Applicable
Percentage in effect for LOC Fees at the time of issuance thereof. Any renewal
or extension of a Letter of Credit for the purpose of calculating the LOC Fee
shall be considered a new issuance thereof. Such determinations by the Agent
of the Applicable Percentages shall be conclusive absent demonstrable error.
"Applicable Percentage Change Date" means, with respect to any
Calculation Date, a date designated by the Agent that is not more than fifteen
(15) Business Days after the receipt by the Agent of the Required Financial
Information for such Calculation Date; PROVIDED THAT in the event the Required
Financial Information is not delivered by the date required by Section 6.4,
notwithstanding the definition of Applicable Percentage herein, the Applicable
Percentage shall be based on Pricing Level V until such time as the Required
Financial Information is delivered.
"Applicable Rate" means (i) for all periods prior to and including
January 5, 2001, the Adjusted Base Rate and (ii) for all periods thereafter
(a) if no Cash Flow Deficiency exists as of the immediately preceding
Calculation Date, the Adjusted Base Rate and (b) if a Cash Flow Deficiency
exists as of the immediately preceding Calculation Date, the Prime Rate.
"Authorized Financial Officer" means any of the Borrower's Treasurer,
Controller or Vice President and Chief Financial Officer.
"Bank" and "Banks" have the meanings stated on page 1 hereof and shall
include any assignees thereof in accordance with Section 10.2.
"Bank of America" means Bank of America, N.A., and its successors.
"Base Rate" means, for any day, the rate per annum (rounded upwards, if
necessary, to the nearest whole multiple of 1/100 of 1%) equal to the greater
of (a) the Federal Funds Rate in effect on such day PLUS 2 of 1% or (b) the
Prime Rate in effect on such day. If for any reason the Agent shall have
determined (which determination shall be conclusive absent manifest error)
that it is unable after due inquiry to ascertain the Federal Funds Rate for
any reason, including the inability or failure of the Agent to obtain
sufficient quotations in accordance with the terms hereof, the Base Rate shall
be determined without regard to clause (a) of the first sentence of this
definition until the circumstances giving rise to such inability no longer
exist. 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 the Federal Funds Rate, respectively.
"Base Rate Loan" means any Loan bearing interest at a rate determined by
reference to the Base Rate.
"Borrower" means Xxxxxx Xxxxx & Company, a Delaware corporation.
"Borrower Guaranty" has the meaning stated in Section 6.8.
"Business Day" means a day other than a Saturday, Sunday or other day on
which commercial banks in Charlotte, North Carolina or Bethesda, Maryland are
authorized or required by law to close, EXCEPT THAT, when used in connection
with a Revolving Credit Loan that is 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 and New York, New York.
"Calculation Date" means the last day of each fiscal quarter of the
Borrower.
"Canadian Loan Program" means the Borrower's employee loan program
established for the benefit of its Canadian employees.
"Capital Expenditures" means amounts expended for (i) the acquisition of
assets, whether tangible or intangible, having a useful life in excess of one
year and not intended for resale in the normal course of business, including
but not limited to land, buildings, fixtures, equipment and computer software,
(ii) additions or improvements to or rebuilding of existing assets, (iii)
improvements to leased property, and (iv) such other purposes typically and
customarily considered to be capital expenditures.
"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.
"Cash Equivalents" means (i) demand deposits in Selected Banks; (ii)
marketable obligations of the United States or Canada; (iii) marketable
obligations guaranteed by or insured by the United States or Canada, or those
for which the full faith and credit of the United States or Canada is pledged
for the repayment of principal and interest thereon; (iv) marketable
obligations issued, guaranteed, or fully insured by any agency,
instrumentality, or corporation of the United States or Canada established or
to be established by the Congress or Parliament, respectively, for which the
credit of such agency, instrumentality, or corporation is pledged for the
repayment of the principal and interest thereof; (v) marketable general
obligations of a state, a territory or a possession of the United States, or
any political subdivision of any of the foregoing, or the District of Columbia
(each, in this subsection, an "ENTITY"), unconditionally secured by the full
faith and credit of such Entity, if such Entity has general taxing authority
and the power to levy such taxes as may be required for the payment of
principal and interest thereof, and that such obligations have a credit rating
equal to at least Baa issued by Standard & Poor's Corporation ("S&P") or BBB
issued by Xxxxx'x Investors Service, Inc. ("MOODY'S"); (vi) domestic and
LIBOR, negotiable time and variable rate certificates of deposit issued by
Selected Banks; (vii) marketable bankers' acceptances and finance bills
accepted by Selected Banks; (viii) prime commercial paper having a credit
rating equal to at least A-2 issued by S&P, P-2 issued by Moody's, or Xxxx-2
issued by Duff & Xxxxxx Inc.; (ix) marketable corporate debt securities having
an A credit rating issued by either S&P or Moody's; and (x) repurchase,
reverse repurchase agreements and security lending agreements collateralized
by securities of the type described in clauses (ii), (iv), (viii) and (ix).
"Cash Flow Deficiency" means and shall exist at any time when the
Leverage Ratio is 2.5 or greater.
"Change of Control" means the occurrence of any of the following events:
(a) any Person or two or more Persons acting in concert shall have acquired
beneficial ownership, directly or indirectly, of, or shall have acquired by
contract or otherwise, or shall have entered into a contract or arrangement
that, upon consummation, will result in its or their acquisition of or control
over, Voting Stock of the Parent (or other securities convertible into such
Voting Stock) representing 20% or more of the combined voting power of all
Voting Stock of the Parent, (b) the Parent shall at any time fail to own
directly 100% of the outstanding capital stock of the Borrower or (c) during
any period of up to 24 consecutive months, commencing after the First
Amendment Date, individuals who at the beginning of such 24 month period were
directors of the Parent (together with any new director whose election by the
Parent's board of directors or whose nomination for election by the Parent's
shareholders was approved by a vote of at least two-thirds of the directors
then still in office who either were directors at the beginning of such period
or whose election or nomination for election was previously so approved) cease
for any reason to constitute a majority of the directors of the Parent then in
office. As used herein, "beneficial ownership" shall have the meaning provided
in Rule 13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934.
"Closing Date" means June 30, 1998.
"Collateral" has the meaning given to such term in the Credit Party
Pledge Agreement and the Security Agreement.
"Collections" means all monies or other assets received by the Agent or
any Bank, as repayment of amounts advanced under the Notes, on account of the
Subsidiary Guaranteed Obligations, as proceeds of Collateral or otherwise, for
credit against principal, interest, commitment fees, costs or expenses, or
other amounts due under the Notes.
"Consolidated EBITDA" means, for any period of calculation for the
Consolidated Group, the sum of (i) Consolidated Net Income for such period,
PLUS (ii) to the extent deducted in the calculation of Consolidated Net
Income, the sum of interest expense, income taxes, depreciation and
amortization, determined on a consolidated basis in accordance with GAAP.
"Consolidated EBITDAR" means, for any period of calculation for the
Consolidated Group, the sum of (i) Consolidated EBITDA for such period and
(ii) Lease Expenses for such period, determined on a consolidated basis in
accordance with GAAP.
"Consolidated Funded Debt" means Funded Debt of the Consolidated Group
determined on a consolidated basis in accordance with GAAP.
"Consolidated Group" means the Parent and its consolidated subsidiaries
(including the Borrower), as determined in accordance with GAAP.
"Consolidated Net Income" means for any period of calculation for the
Consolidated Group, net income on a consolidated basis determined in
accordance with GAAP.
"Controller" means the person holding the office, under whatever title,
most closely corresponding to the typical duties of a controller of a
corporation or the person acting in such capacity.
"Credit Documents" means a collective reference to this Credit Agreement,
the Revolving Credit Notes, the Employee Notes, the LOC Documents, the
Borrower Guaranty, the Credit Party Pledge Agreement, the Security Agreement,
the Employee Pledge Agreements, the Agent's Fee Letter, each Joinder Agreement
and all other related agreements and documents issued or delivered hereunder
or thereunder or pursuant hereto or thereto.
"Credit Party Pledge Agreement" means the Pledge Agreement dated as of
the Closing Date given by the Credit Parties identified therein to the Agent
to secure the obligations of the Credit Parties under the Credit Documents, as
such Pledge Agreement may be amended and modified from time to time.
"Credit Party" means any of the Borrower and the Guarantors.
"CSAP" means the Borrower's Canadian Separation Allowance Plan
established for the benefit of the Borrower's Canadian employees in connection
with the Canadian Loan Program.
"Defaulting Bank" means, at any time, any Bank that, at such time, (i)
has failed to make a Loan or purchase a participation interest required
pursuant to the terms of this Credit Agreement within one Business Day of when
due, (ii) other than as set forth in (i) above, has failed to pay to the Agent
or any Bank an amount owed by such Bank pursuant to the terms of the Credit
Agreement or any other of the Credit Documents within one Business Day of when
due, or (iii) has been deemed insolvent or has become subject to a bankruptcy
or insolvency proceeding or to a receiver, trustee or similar proceeding or
with respect to which (or with respect to any of assets of which) a receiver,
trustee or similar official has been appointed.
"Domestic Credit Party" means any Credit Party which is incorporated or
organized under the laws of any State of the United States or the District of
Columbia.
"Domestic Subsidiary" means any Subsidiary which is incorporated or
organized under the laws of any State of the United States or the District of
Columbia.
"Employee Loan" and "Employee Loans" means the loans made to Qualified
Employees by Bank of America pursuant to the Existing Credit Agreement
including, without limitation, the loans identified on SCHEDULE 8.
"Employee Loan Participation" has the meaning stated in Section 2.1(d).
"Employee Note" and "Employee Notes" have the meanings stated in Section
2.1(f).
"Employee Pledge Agreements" has the meaning stated in Section 6.9(a).
"Employee Pledged Shares" has the meaning stated in Section 6.9(a).
"Employee Stock Powers" has the meaning stated in Section 6.9(b).
"ERISA" has the meaning stated in Section 4.8.
"Eurodollar Loan" means any Revolving Credit Loan bearing interest at a
rate determined by reference to the Eurodollar Rate.
"Eurodollar Rate" means, for the Interest Period for each Eurodollar Loan
comprising part of the same borrowing (including conversions, extensions and
renewals), a per annum interest rate determined pursuant to the following
formula:
Eurodollar Rate = Interbank Offered Rate
---------------------------------
1 - Eurodollar Reserve Percentage
"Eurodollar Reserve Percentage" means for any day, that percentage
(expressed as a decimal) which is in effect from time to time under Regulation
D of the Board of Governors of the Federal Reserve System (or any successor),
as such regulation may be amended from time to time or any successor
regulation, as the maximum reserve requirement (including, without limitation,
any basic, supplemental, emergency, special, or marginal reserves) applicable
with respect to Eurocurrency liabilities as that term is defined in Regulation
D (or against any other category of liabilities that includes deposits by
reference to which the interest rate of Eurodollar Loans is determined),
whether or not a Bank has any Eurocurrency liabilities subject to such reserve
requirement at that time. Eurodollar Loans shall be deemed to constitute
Eurocurrency liabilities and as such shall be deemed subject to reserve
requirements without benefits of credits for proration, exceptions or offsets
that may be available from time to time to a Bank. The Eurodollar Rate shall
be adjusted automatically on and as of the effective date of any change in the
Eurodollar Reserve Percentage.
"Event of Default" has the meaning stated in Section 8.1.
"Existing Credit Agreement" has the meaning stated in the recitals
hereof.
"Federal Funds Rate" means, for any day, the rate of interest per annum
(rounded upwards, if necessary, to the nearest whole multiple of 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 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 quoted to the Agent on such
day on such transactions as determined by the Agent.
"First Amendment Date" means the date hereof.
"Fixed Charge Coverage Ratio" means the ratio of (i) Consolidated EBITDAR
to (ii) the sum of interest expense PLUS Lease Expenses PLUS scheduled
maturities of Funded Debt (excluding Employee Loans), in each case on a
consolidated basis determined in accordance with GAAP.
"Foreign Subsidiary" means a Subsidiary which is not a Domestic
Subsidiary.
"Funded Debt" means, with respect to any Person, without duplication, (a)
all Indebtedness of such Person other than the Indebtedness of such Person of
the types referred to in clauses (iv), (v), (vii), (ix), (x) and (xi) 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 Debt 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
(but only to the extent to which such Person's assets are at risk in such
joint venture).
"GAAP" means generally accepted accounting principles in the United
States applied on a consistent basis.
"General Counsel" means the person holding the office, under whatever
title, most closely corresponding to the typical duties of a general counsel
of a corporation or the person acting in such capacity.
"General Exceptions" has the meaning stated in Section 4.3.
"Governmental Authority" means any Federal, state, local or foreign court
or governmental agency, authority, instrumentality or regulatory body.
"Guarantor" means the Parent and each of the Subsidiary Guarantors,
together with their successors and permitted assigns.
"Incipient Default" has the meaning stated in Section 5.2(a).
"Indebtedness" means, with respect to any Person, without duplication.
(i) all obligations of such Person for borrowed money, (ii) 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), (iii) 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, (iv) all
obligations of such Person under take-or-pay or similar arrangements or under
commodities agreements, (v) 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, (vi) the principal portion of
all obligations of such Person under Capital Leases, (vii) all obligations of
such Person in respect of Interest Rate Protection Agreements and/or any other
hedging or interest rate protection agreements or other arrangements, (viii)
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), (ix)
all preferred stock issued by such Person and required by the terms thereof to
be redeemed, or for which mandatory sinking fund payments are due, by a fixed
date, (x) the principal portion of all obligations of such Person under
synthetic lease transactions and other similar offbalance sheet financing
arrangements, and (xi) all guaranty and other contingent obligations of such
Person in respect of Indebtedness as defined in this definition. The
Indebtedness of any Person shall include the Indebtedness of any partnership
or joint venture in which such Person is a general partner or a joint venturer
(but only to the extent to which such Person's assets are at risk in such
joint venture).
"IPO" means the initial public offering of the common stock of the
Parent.
"Interbank Offered Rate" means, for the Interest Period for each
Eurodollar Loan comprising part of the same borrowing (including conversions,
extensions and renewals), a per annum interest rate (rounded upwards, if
necessary, to the nearest whole multiple of 1/100 of 1%) equal to the rate of
interest, determined by the Agent on the basis of the offered rates for
deposits in dollars for a period of time corresponding to such Interest Period
(and commencing on the first day of such Interest Period), appearing on
Telerate Page 3750 (or, if, for any reason, Telerate Page 3750 is not
available, the Reuters Screen LIBO Page) as of approximately 11:00 A.M.
(London time) two (2) Business Days before the first day of such Interest
Period. As used herein, "Telerate Page 3750" means the display designated as
page 3750 by Dow Xxxxx Markets, Inc. (or such other page as may replace such
page on that service for the purpose of displaying the British Bankers
Association London interbank offered rates) and "Reuters Screen LIBO Page"
means the display designated as page "LIBO" on the Reuters Monitor Money Rates
Service (or such other page as may replace the LIBO page on that service for
the purpose of displaying London interbank offered rates of major banks).
"Interest Payment Date" means (i) as to any Employee Loan, the third
Business Day of the month following the immediately preceding Calculation
Date, any date of repayment of principal of such Loan and the relevant
Termination Date, (ii) as to any Revolving Credit Loan which is a Base Rate
Loan, the third Business Day of the month immediately following the end of
each preceding month, any date of repayment of principal of such Loan and the
relevant Termination Date, and (iii) as to any Revolving Credit Loan which is
a Eurodollar Loan, the last day of each Interest Period for such Loan, any
date of repayment of principal of such Loan and the relevant Termination Date,
and in addition where the applicable Interest Period is more than three
months, then also the date three months from the beginning of the Interest
Period, and each three months thereafter. If an Interest Payment Date falls on
a date which is not a Business Day, such Interest Payment Date shall be deemed
to be the next succeeding Business Day, EXCEPT THAT in the case of Eurodollar
Loans where the next succeeding Business Day falls in the next succeeding
calendar month, then the next preceding Business Day.
"Interest Period" means, as to Revolving Credit Loans that are Eurodollar
Loans, a period of one, two, three or six month's duration, as the Borrower
may elect, commencing in each case, on the date of the borrowing (including
conversions, extensions and renewals); 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 in the case
of Eurodollar Loans 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 Termination Date, and (C) where an
Interest Period begins on a day for which there is no numerically
corresponding day in the calendar month in which the Interest Period is to
end, such Interest Period shall end on the last day of such calendar month.
"Interest Rate Protection Agreement" means an interest rate swap, cap or
collar agreement or similar arrangement between the Borrower and a Bank, or an
Affiliate of a Bank, providing for the transfer or mitigation of interest
risks either generally or under specific contingencies.
"Interest Swap Provider" means a Bank, or an Affiliate of a Bank, party
to an Interest Rate Protection Agreement with the Borrower.
"Investment" in any Person by a member of the Consolidated Group means:
(i) the amount paid or committed to be paid, or the value of property or
services contributed or committed to be contributed, by such member of the
Consolidated Group for or in connection with the acquisition by such member of
the Consolidated Group of any stock, bonds, note, debentures, partnership or
other ownership interests or other securities of or equity in such Person; and
(ii) the amount of any advance, loan or extension of credit to, or guaranty or
other similar obligation with respect to any Indebtedness of, such Person by
such member of the Consolidated Group and (without duplication) any amount
committed to be advanced, loaned, or extended to, or the payment of which is
committed to be assured by a guaranty or similar obligation for the benefit
of, such Person by such member of the Consolidated Group.
"Issuing Bank" means Bank of America.
"Issuing Bank Fees" has the meaning stated in Section 2.9.
"Joinder Agreement" means a Joinder Agreement substantially in the form
of EXHIBIT H hereto, executed and delivered by an Additional Credit Party in
accordance with the provisions of Section 6.10.
"Lease Expenses" means, for any period, all rental payments due under
leases for such period, irrespective of the term of any thereof, determined in
accordance with GAAP.
"Letter of Credit" means any irrevocable, standby letter of credit issued
by the Issuing Bank for the account of the Borrower or any Subsidiary in
accordance with the terms of Section 2.5 and those letters of credit
outstanding on the Closing Date and listed on Schedule 6 hereto.
"Leverage Ratio" means the ratio of (i) Consolidated Funded Debt to (ii)
Consolidated EBITDA. For purposes of the Employee Notes, the Debt to Cash Flow
Ratio referred to therein used to calculate Cash Flow Deficiency referred to
therein shall be the Leverage Ratio as used herein.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, security interest, encumbrance, lien (statutory or otherwise),
preference, priority or charge of any kind (including any agreement to give
any of the foregoing, any conditional sale or other title retention agreement,
any financing or similar statement or notice filed under the Uniform
Commercial Code as adopted and in effect in the relevant jurisdiction or other
similar recording or notice statute, and any lease in the nature thereof).
"Loan" and "Loans" have the meanings stated in Section 2.2(a) herein and
shall include all loans made under the Existing Credit Agreement which are
outstanding on the date hereof.
"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 Fees" has the meaning stated in Section 2.9.
"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 Bank but
not theretofore reimbursed.
"Majority Banks" means the Banks the Ratable Shares of which aggregate 51
percent or more of all Ratable Shares at any time, or if the Revolving Credit
Commitments have been terminated, Banks having more than 51% of the aggregate
principal amount of the Obligations outstanding (taking into account in each
case participation interests or obligation to participate therein); provided
that the Ratable Share of, and outstanding principal amount of Obligations
(taking into account participation interests therein) owing to, a Defaulting
Bank shall be excluded for purposes hereof in making a determination of
Majority Banks.
"Management Stock Agreements" means any contractual agreements between
members of management of the Credit Parties imposing restrictions on the sale
or other transfer of capital stock of the Parent.
"Margin Stock Event" has the meaning stated in Section 2.8(b)(ii).
"Material Adverse Effect" means a material adverse effect on (i) the
financial condition, business, properties, operations or prospects of the
members of the Consolidated Group taken as a whole, (ii) the ability of any
Credit Party to perform any material obligation under the Credit Documents to
which it is a party or (iii) the rights and remedies of the Banks under the
Credit Documents.
"Material Domestic Subsidiary" means a Domestic Subsidiary which is a
Material Subsidiary.
"Material Subsidiary" means a Subsidiary of the Parent (i) the accounts
receivable of which comprise two percent (2%) or more of the consolidated
accounts receivable of the Consolidated Group or (ii) the assets of which
comprise two percent (2%) or more of the consolidated assets of the
Consolidated Group.
"Net Worth" means, as of any date with respect to the Consolidated Group
on a consolidated basis, shareholders' equity or net worth, as determined in
accordance with GAAP.
"Notes" means, collectively, the Revolving Credit Notes and the Employee
Notes.
"Notice of Borrowing" has the meaning stated in Section 5.2(b) hereof and
shall be in substantially the form of EXHIBIT F.
"Obligations" means, collectively, all of the obligations of the
Borrower, the Guarantors and the Qualified Employees under the Credit
Documents.
"Official" has the meaning stated in Section 8.1(e).
"PBGC" has the meaning stated in Section 4.8.
"Permitted CSAP Loan" means a loan extended under the Canadian Loan
Program to one of the Borrower's Canadian employees for which a Separation
Allowance Account is maintained having a balance not in excess of 90% of the
dollar amount credited from time to time to such account.
"Permitted Investments" means Investments which are either (i) cash and
Cash Equivalents; (ii) accounts receivable created, acquired or made in the
ordinary course of business and payable or dischargeable in accordance with
customary trade terms; (iii) Investments consisting of stock, obligations,
securities or other property received in settlement of accounts receivable
(created in the ordinary course of business) from bankrupt obligors; (iv)
Investments existing as of the Closing Date and to be set forth on SCHEDULE 7
hereto within 30 days of the Closing Date, (v) guaranty and other contingent
obligations permitted by Section 7.1; (vi) acquisitions permitted by Section
7.3(c); (vii)(A) advances or loans to employees, directors, officers or agents
not to exceed $200,000 with respect to each such loan, (B) short term loans to
new or relocating employees to cover moving and other relocation costs not to
exceed $500,000 with respect to each such loan, which loans under both clauses
(A) and (B) shall not exceed in the aggregate at any time outstanding
$2,500,000; (viii) Investments in and to Domestic Credit Parties; and (ix)
Permitted CSAP Loans outstanding on the First Amendment Date.
"Permitted Liens" means (i) encumbrances granted to the Agent and the
Banks hereunder; (ii) encumbrances for taxes not yet due or contested in good
faith by appropriate proceedings and with respect to which adequate reserves
are being maintained in accordance with GAAP; (iii) encumbrances arising out
of equipment leases in the ordinary course of business; (iv) encumbrances
arising out of the purchase of equipment in the ordinary course of business
and limited to the specific equipment purchased, provided, however, that the
underlying Indebtedness is permitted under Section 7.1(d) hereof; (v) pledges
or deposits in the ordinary course of business in connection with worker's
compensation or other forms of governmental insurance or benefits or to secure
performance of statutory obligations, leases and contracts (other than for
borrowed money) entered into in the ordinary course of business or to secure
obligations on surety or appeal bonds; (vi) encumbrances of mechanics and
other similar encumbrances arising in the ordinary course of business in
respect of obligations not delinquent or being contested in good faith and by
appropriate proceedings and with respect to which adequate reserves are being
maintained in accordance with GAAP; and (vii) encumbrances arising in the
ordinary course of business for sums being contested in good faith and by
appropriate proceedings and with respect to which adequate reserves are being
maintained in accordance with GAAP, or for sums not due, and in either case
not involving any deposits or advances for borrowed money or the deferred
purchase price of property or services.
"Person" means any individual, corporation, partnership, joint venture,
limited liability company, trust, unincorporated organization or a government
or any agency or political subdivision thereof.
"Plan" has the meaning stated in Section 4.8.
"Prime Rate" means the per annum rate of interest established from time
to time by the Agent at its principal office in Charlotte, North Carolina as
its Prime Rate. Any change in the interest rate resulting from a change in the
Prime Rate shall become effective as of 12:01 a.m. of the Business Day on
which each change in the Prime Rate is announced by the Agent. The Prime Rate
is a reference rate used by the Agent in determining interest rates on certain
loans and is not intended to be the lowest rate of interest charged on any
extension of credit to any debtor.
"Pro Forma Basis" means, with respect to any transaction, that such
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 transaction.
"Qualified Employees" means those employees of the Borrower that
purchased common stock of the Borrower with the proceeds of Employee Loans
made to such employees.
"Ratable Share" has the meaning stated in Section 2.1(a) hereof.
"Regulation U" means Regulation U 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.
"Required Financial Information" means, with respect to the applicable
Calculation Date, (i) the financial statements of the Consolidated Group
required to be delivered pursuant to Section 6.4 for the fiscal period or
quarter ending as of such Calculation Date, and (ii) the certificate of an
Authorized Financial Officer required by Section 6.4 to be delivered with the
financial statements described in clause (i) above.
"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 to which any of its material property is
subject.
"Revolving Credit Commitment" has the meaning stated in Section 2.1(a).
"Revolving Credit Loan Commitment Period" has the meaning stated in
Section 2.1(b).
"Revolving Credit Loans" has the meaning stated in Section 2.1(a).
"Revolving Credit Note" has the meaning stated in Section 2.1(c).
"Security Agreement" means the Security Agreement dated as of the Closing
Date given by the Credit Parties to the Agent to secure the obligations of the
Credit Parties under the Credit Documents, as such Security Agreement may be
amended and modified from time to time.
"Selected Banks" (A) means the Banks which are signatories to this
Agreement and (B) the one hundred largest commercial banks which either are
United States national banking associations or are chartered under the laws of
a state of the United States and which have ratings by Xxxxxxxx BankWatch,
Inc. (or successor) no lower than the following: (i) for the largest fifty
banks in asset size: "C"; and (ii) for the next fifty banks in asset size: "B"
and (C) banks chartered under the laws of Canada and of a quality and/or
rating equivalent to or not less than the rating identified in (B)(ii) above.
"Separation Allowance Account" means the account established for the
Borrower's qualified Canadian employees to which, from time to time, the
Borrower may credit dollar amounts allocated to such employee based on such
employee's share in the CSAP. For the avoidance of doubt, no such account
shall be funded with actual dollars, but the dollar amount credited thereto
shall be reflected as a liability on the balance sheet of the Borrower.
"Subsidiaries" means the Persons identified on SCHEDULE 1 and any other
Person in which, at any time subsequent to the Closing Date, the Parent,
directly or indirectly, beneficially or legally, (i) owns more than fifty
percent (50%) of the stock having ordinary voting power for the election of
Directors, in the case of a corporation, or (ii) owns more than fifty percent
(50%) of the ownership interests of a partnership, limited liability company,
joint venture or other Person or is a general partner of a partnership.
"Subsidiary Guaranteed Obligations" means, as to each Guarantor, without
duplication, (i) all obligations of the Borrower (including interest accruing
after an event described in Section 8.1(e), regardless of whether such
interest is allowed as a claim under the Federal Bankruptcy Code) to the Banks
and the Agent, whenever arising, under this Credit Agreement, the Notes or the
other Credit Documents, and (ii) all liabilities and obligations, whenever
arising, owing from the Borrower to any Bank, or any Affiliate of a Bank,
arising under any Interest Rate Protection Agreement relating to obligations
hereunder.
"Subsidiary Guarantor" means each of Domestic Subsidiaries of the Parent
identified as a "Subsidiary Guarantor" on the signature pages hereto and each
other Person which may hereafter become a Subsidiary Guarantor by execution of
a Joinder Agreement, together with their successors and permitted assigns.
"Termination Date" means (i) as to the Revolving Credit Loans, June 30,
2003, and (ii) as to any Employee Loan, the date of the final maturity of such
Employee Loan.
"Treasurer" means the person holding the office, under whatever title,
most closely corresponding to the typical duties of a treasurer of a
corporation or the person acting in such capacity.
"Unused Aggregate Revolving Credit Commitment" means, for any date of
calculation, the amount by which (a) the Aggregate Revolving Credit Commitment
exceeds (b) the sum of (i) the outstanding aggregate principal amount of all
Revolving Credit Loans and (ii) the LOC Obligations outstanding.
"Unused Fee" has the meaning stated in Section 2.9.
"Unused Fee Calculation Period" has the meaning stated in Section 2.9.
"Vice President and Chief Financial Officer" means the person holding the
office, under whatever title, most closely corresponding to the typical duties
of a chief financial officer of a corporation or the person acting in such
capacity.
"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.
Section 1.2. ACCOUNTING TERMS AND DETERMINATIONS.
Unless otherwise specified herein, all financial and accounting terms
used herein shall be interpreted, all accounting determinations hereunder
shall be made, and all financial statements required to be delivered hereunder
shall be prepared in accordance with GAAP, applied on a basis consistent
(except for changes concurred in by the Borrower's independent public
accountants) with the most recent audited consolidated financial statements of
the Consolidated Group delivered to the Banks.
Section 1.3. OTHER DEFINITIONAL PROVISIONS.
References in this Agreement to "Articles", "Sections", "Schedules" or
"Exhibits" shall be to Articles, Sections, Schedules or Exhibits of or to this
Agreement unless otherwise specifically provided. Wherever used herein, the
singular number shall include the plural, and vice versa, whenever appropriate
to protect the interests of the Banks, and the conjunctive shall include the
disjunctive, and vice versa, whenever so appropriate. "Include", "includes"
and "including" shall be deemed to be followed by "without limitation" whether
or not they are in fact followed by such words or words of like import.
"Writing", "written" and comparable terms refer to printing, typing and other
means of reproducing words in a visible form. References to any agreement or
contract are to such agreement or contract as amended, modified or
supplemented from time to time in accordance with the terms hereof and
thereof. References to any Person include the successors and assigns of such
Person. References "from" or "through" any date mean, unless otherwise
specified, "from and including" or "through and including", respectively.
ARTICLE II. LOANS AND PAYMENTS
Section 2.1. LOANS.
(a) REVOLVING CREDIT COMMITMENT. Each of the Banks hereby severally
agrees to lend and the Borrower agrees to accept, subject to the terms and
conditions of this Agreement, revolving credit loans not to exceed at any one
time outstanding to the Borrower, together with the LOC Obligations, such
Bank's Ratable Share of $95,000,000 (as such amount may be reduced from time
to time pursuant to Section 2.8, the "AGGREGATE REVOLVING CREDIT COMMITMENT,"
and each Bank's Ratable Share of the Aggregate Revolving Credit Commitment
being a "REVOLVING CREDIT COMMITMENT"). Each Bank's Revolving Credit
Commitment, as such amount may be reduced from time to time pursuant to
Section 2.8, is set forth beneath such Bank's name on the signature pages
hereof opposite the caption "REVOLVING CREDIT COMMITMENT." As used herein,
"RATABLE SHARE" shall mean the proportion that a Bank's Revolving Credit
Commitment bears to the Aggregate Revolving Credit Commitment. A "REVOLVING
CREDIT LOAN" shall mean a revolving credit loan made by a Bank to the Borrower
pursuant to this Section 2.1, and "REVOLVING CREDIT LOANS" shall mean the
Revolving Credit Loans of all the Banks to the Borrower.
(b) AVAILABILITY OF REVOLVING CREDIT LOANS. Revolving Credit Loans will
be made in accordance with Section 2.2 and may be requested during the period
beginning on the Closing Date and ending on the Termination Date for Revolving
Credit Loans (the "REVOLVING CREDIT LOAN COMMITMENT PERIOD"). All Revolving
Credit Loans shall be in minimum principal amounts of $100,000 and integral
multiples of $100,000 in excess thereof. Revolving Credit Loans for less than
$1,000,000 shall consist of Base Rate Loans; Revolving Credit Loans for
$1,000,000 and greater may consist of Base Rate Loans or Eurodollar Loans, or
a combination thereof, as the Borrower may request; PROVIDED, HOWEVER, that no
more than five (5) Eurodollar Loans shall be outstanding hereunder at any
time; PROVIDED, FURTHER, that no Eurodollar Loan shall be made for less than
$1,000,000. Revolving Credit Loans may be repaid and reborrowed in accordance
with the provisions hereof. For purposes hereof, Eurodollar Loans with
different Interest Periods shall be considered as separate Eurodollar Loans,
even if they begin on the same date and have the same duration, 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.
(c) REVOLVING CREDIT NOTES. Each Revolving Credit Loan made by a Bank
under this Agreement shall be evidenced by a revolving promissory note issued
by the Borrower to the Bank making such Revolving Credit Loan substantially in
the form of EXHIBIT A and maturing on the Termination Date for Revolving
Credit Loans (each such note, together with all amendments, extensions,
renewals, replacements, or refundings thereof in whole or in part, is a
"REVOLVING CREDIT NOTE" and such Revolving Credit Notes are, collectively, the
"REVOLVING CREDIT NOTES").
(d) EMPLOYEE LOAN PARTICIPATIONS.
(i) NO COMMITMENT TO MAKE ADDITIONAL EMPLOYEE LOANS. Under the terms
of the Existing Credit Agreement, Bank of America agreed to make, and the
Banks agreed to purchase a participation interest in, terms loans made to
certain employees of the Borrower to be used by such employees to
purchase common stock of the Borrower. Effective as of the First
Amendment Date, the Borrower has terminated the commitment of Bank of
America to make any additional term loans to its employees. The term
loans outstanding on the First Amendment Date shall remain outstanding
subject to the provisions of the Amended Credit Agreement and the other
Credit Documents.
(ii) PURCHASE OF PARTICIPATION INTEREST IN OUTSTANDING EMPLOYEE
LOANS. As of the date hereof, the aggregate outstanding principal balance
of Employee Loans is $14,323,201.64. Bank of America agrees to sell, and
each Bank hereby agrees to purchase, a participation interest (an
"EMPLOYEE LOAN PARTICIPATION") in the Employee Loans and all security now
or hereafter provided with respect thereto equal to such Bank's Ratable
Share of the Employee Loans and such security. Each Bank shall fund its
Employee Loan Participation of all Employee Loans on the First Amendment
Date in an amount equal to such Bank's Ratable Share of all Employee
Loans in accordance with this Section 2.1(d). Simultaneously with the
funding of its Employee Loan Participation, each Bank shall,
automatically and without any further action on the part of Bank of
America or such Bank, acquire a participation in an amount equal to such
payment in the related Employee Loan and in the interest thereon and in
the related Employee Notes, and shall have a claim against the Qualified
Employee with respect thereto.
(iii) AVAILABILITY OF EMPLOYEE LOANS. Amounts repaid on the Employee
Loans may not be reborrowed.
(iv) EMPLOYEE NOTES. Each of the Employee Loans is evidenced by a
promissory note (together with all amendments, extensions, renewals, or
replacements thereof, an "EMPLOYEE NOTE" and, collectively, all such
notes, "EMPLOYEE NOTES") issued to Bank of America by the Qualified
Employee to whom the Employee Loan was made substantially in the form of
EXHIBIT B to the Existing Credit Agreement. Each existing Employee Note
shall be amended, restated and replaced in its entirety by a new Employee
Note substantially in the form of EXHIBIT B hereto and each such new
Employee Note shall evidence the Employee Loans made to the Qualified
Employee that issued the new Employee Note. Each Employee Loan shall
mature on the seventh September 30 following the original funding of the
corresponding Employee Loan.
Section 2.2. LOAN PROCEDURES; SERVICING
(a) REQUESTS. Each request by the Borrower for a Revolving Credit Loan
shall be submitted to the Agent in accordance with Section 5.2(b) of this
Agreement.
(b) NOTICE TO BANKS. The Agent shall notify each of the other Banks as
soon as practicable upon receipt of any request for a Revolving Credit Loan
and that notice shall include the date that the Borrower desires the Revolving
Credit Loan to be made and such Bank's Ratable Share of such Revolving Credit
Loan. All funds constituting a Bank's Ratable Share of such Revolving Credit
Loan shall be received by the Agent in immediately available funds or other
funds satisfactory to the Agent not later than 2:00 p.m., Charlotte, North
Carolina time, on the date on which the Borrower has requested the Revolving
Credit Loan to be made. Unless the Agent shall have been notified by
telephone, confirmed in writing, by any Bank by 12:00 noon, Charlotte, North
Carolina time, on the day the Borrower has requested that such Revolving
Credit Loan be made, that such Bank will not make available the amount which
would constitute its Ratable Share of such requested Revolving Credit Loan on
the date specified therefor, the Agent may assume that such Bank has made such
amount available to the Agent and, in reliance upon such assumption, make
available to the Borrower or to an appropriate escrow account, as appropriate,
a corresponding amount. If and to the extent that such Bank shall not have
made such amount available to the Agent, such Bank and the Borrower agrees to
repay the Agent forthwith on demand such corresponding amount, and such Bank
further agrees to pay to the Agent, upon demand, interest thereon, for each
day from the date the Agent made such amount available to the Borrower to the
date such amount is repaid to the Agent, at the interest rate applicable at
the time to Revolving Credit Loans of the same type funded by the Agent.
(c) SERVICING. The Borrower agrees to act as servicer for the Agent and
Bank of America with respect to the Employee Loans (in such capacity, the
"SERVICER"). On behalf of the Agent and Bank of America, the Servicer will
administer, service and collect payments in respect of all Employee Loans,
which duties shall include, without limitation, (i) collecting payments
submitted by Qualified Employees pursuant to the Employee Notes, (ii)
recordkeeping regarding current loan balances and other matters relating to
Employee Loans, (iii) responding to questions about Employee Loans from
Qualified Employees and (iv) providing to the Agent, within fifty (50) days
after the end of each calendar quarter, an Employee Loan delinquency report
for the immediately preceding calendar quarter. The Agent shall have the
exclusive right to remove the Servicer at any time for cause and during the
continuation of an Event of Default, and, upon 30 days written notice, without
cause. Upon any such removal, the Agent shall promptly appoint a successor
Servicer who shall be reasonably acceptable to the Borrower; PROVIDED,
HOWEVER, that no approval of the Borrower shall be required during the
continuance of an Event of Default. The Borrower, with the prior written
consent of the Agent, which consent shall not be unreasonably withheld, shall
be permitted to appoint a subservicer to perform its obligations under this
Section 2.2(c).
Section 2.3. THE BANKS' OBLIGATIONS UNDER THE LOANS.
Each Bank shall be obligated to fund Revolving Credit Loans requested
under Section 5.2(b) and its participation in Employee Loans in accordance
with its Ratable Share and Sections 2.1 and 2.2. The obligations of each Bank
hereunder are several and not joint. The failure of any Bank to perform its
obligations hereunder shall not affect the obligations of any other Bank or
the Borrower to any other party, nor shall any other party be liable for the
failure of such Bank to perform its obligations hereunder.
Section 2.4. EXTENSION AND CONVERSION.
Subject to the terms of Section 5.2, the Borrower shall have the option,
on any Business Day, to extend existing Revolving Credit Loans into a
subsequent permissible Interest Period or to convert Revolving Credit Loans
into Revolving Credit Loans of another type; PROVIDED, HOWEVER, that (i)
except as provided in Section 2.14, Eurodollar Loans may be converted into
Base Rate Loans only on the last day of the Interest Period applicable
thereto, (ii) Eurodollar Loans may be extended, and Base Rate Loans may be
converted into Eurodollar Loans, only if no Incipient Default or Event of
Default is in existence on the date of extension or conversion, (iii)
Revolving Credit Loans extended as, or converted into, Eurodollar Loans shall
be subject to the terms of the definition of "INTEREST PERIOD" and shall be in
such minimum amounts as provided in Section 2.1(b), (iv) no more than 5
separate Eurodollar Loans shall be outstanding hereunder at any time 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 telephone notice
promptly confirmed in writing) to the Agent prior to 11:00 A.M. (Charlotte,
North Carolina time) on the Business Day of, in the case of the conversion of
a Eurodollar Loan into a Base Rate Loan, and on the third Business Day prior
to, in the case of the extension of a Eurodollar Loan as, or conversion of a
Base Rate Loan into, a Eurodollar Loan, the date of the proposed extension or
conversion, specifying the date of the proposed extension or conversion, the
Revolving Credit Loans to be so extended or converted, the types of Revolving
Credit Loans into which such Revolving Credit Loans are to be converted and,
if appropriate, the applicable Interest Periods with respect thereto. Each
request for extension or conversion shall constitute a representation and
warranty by the Borrower of the matters specified in Section 5.2(a). 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 Loan shall be
automatically converted into a Base Rate Loan at the end of the Interest
Period applicable thereto. The Agent shall give each Bank notice as promptly
as practicable of any such proposed extension or conversion affecting any
Loan.
Section 2.5. LETTERS OF CREDIT.
(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 Bank
may reasonably require, the Issuing Bank agrees from time to time to issue
Letters of Credit during the Revolving Credit Loan Commitment Period as the
Borrower may request, in a form acceptable to the Issuing Bank; PROVIDED,
HOWEVER, that (i) the LOC Obligations outstanding shall not at any time exceed
$10,000,000 and (ii) the sum of the aggregate principal amount of outstanding
Revolving Credit Loans PLUS LOC Obligations outstanding shall not at any time
exceed the Aggregate Revolving Credit Commitment. Except as otherwise
expressly agreed upon by all the Banks, no Letter of Credit shall have an
original expiry date more than two years from the date of issuance; PROVIDED,
FURTHER, that no Letter of Credit, as originally issued or as extended, shall
have an expiry date extending beyond the day before the Termination Date for
Revolving Credit Loans. Each Letter of Credit shall comply with the related
LOC Documents. The issuance and expiry date 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 Bank at least three
(3) Business Days prior to the requested date of issuance. The Issuing Bank
will, at least quarterly and more frequently upon request, disseminate to each
of the Banks 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 account party, the beneficiary, the face amount and expiry
date as well as any payment or expirations which may have occurred. In
addition, the Issuing Bank will, upon the issuance of each Letter of Credit,
disseminate to each of the Banks a statement with respect to such Letter of
Credit specifying the account party, the beneficiary, the face amount, the
issue date and the expiry date.
(c) PARTICIPATION. Each Bank, upon issuance of a Letter of Credit, shall
be deemed to have purchased without recourse a risk participation from the
Issuing Bank in such Letter of Credit and the obligations arising thereunder,
in each case in an amount equal to its pro rata share of the obligations under
such Letter of Credit (based on the respective Ratable Shares of the Banks)
and shall absolutely, unconditionally and irrevocably assume, as primary
obligor and not as surety, and be obligated to pay to the Issuing Bank
therefor 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
Bank's participation in any Letter of Credit, to the extent that the Issuing
Bank has not been reimbursed as required hereunder or under any such Letter of
Credit, each such Bank shall pay to the Issuing Bank its pro rata share of
such unreimbursed drawing in same day funds on the day of notification by the
Issuing Bank of an unreimbursed drawing pursuant to the provisions of
subsection (d) hereof. The obligation of each Bank to so reimburse the Issuing
Bank shall be absolute and unconditional and shall not be affected by the
occurrence of an Incipient Default, an Event of Default or any other
occurrence or event. Any such reimbursement shall not relieve or otherwise
impair the obligation of the Borrower to reimburse the Issuing Bank 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 Bank will promptly notify the Borrower. Unless the
Borrower shall immediately notify the Issuing Bank that the Borrower intends
to otherwise immediately reimburse the Issuing Bank for such drawing, the
Borrower shall be deemed to have requested that the Banks make a Revolving
Credit Loan in the amount of the drawing as provided in subsection (e) hereof
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 Bank on the day of drawing under any Letter of Credit (either with the
proceeds of a Revolving Credit Loan obtained hereunder or otherwise) in same
day funds. If the Borrower shall fail to reimburse the Issuing Bank as
provided hereinabove (and Revolving Credit Loans are not available to effect
such reimbursement), the unreimbursed amount of such drawing shall bear
interest at a per annum rate equal to the Base Rate plus two percent (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 Bank, the Agent, the Banks, the beneficiary of the Letter of Credit
drawn upon or any other Person, including without limitation any defense based
on any failure of the applicable account party or the Borrower to receive
consideration or the legality, validity, regularity or unenforceability of the
Letter of Credit. The Issuing Bank will promptly notify the other Banks of the
amount of any unreimbursed drawing and each Bank shall promptly pay to the
Agent for the account of the Issuing Bank in dollars and in immediately
available funds, the amount of such Bank's pro rata share of such unreimbursed
drawing. Such payment shall be made on the day such notice is received by such
Bank from the Issuing Bank 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 Bank does not pay such
amount to the Issuing Bank in full upon such request, such Bank shall, on
demand, pay to the Agent for the account of the Issuing Bank interest on the
unpaid amount during the period from the date of such drawing until such Bank
pays such amount to the Issuing Bank in full at a rate per annum equal to, if
paid within two (2) Business Days of the date of drawing, the Federal Funds
Rate and thereafter at a rate equal to the Base Rate. Each Bank's obligation
to make such payment to the Issuing Bank, and the right of the Issuing Bank to
receive the same, shall be absolute and unconditional, shall not be affected
by any circumstance whatsoever and without regard to the termination of this
Agreement or the Revolving Credit Commitments hereunder, the existence of an
Incipient 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 Bank to the Issuing Bank, such Bank shall, automatically and
without any further action on the part of the Issuing Bank or such Bank,
acquire a participation in an amount equal to such payment (excluding the
portion of such payment constituting interest owing to the Issuing Bank) 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 CREDIT LOANS. On any day on which the
Borrower shall have requested, or been deemed to have requested, a Revolving
Credit Loan to reimburse a drawing under a Letter of Credit, the Agent shall
give notice to the Banks that a Revolving Credit 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 Credit Loan comprised solely of
Base Rate Loans shall be immediately made to the Borrower by all Banks
(notwithstanding any termination of the Revolving Credit Commitments pursuant
to Section 8.2) pro rata based on the respective Ratable Shares of the Banks
(determined before giving effect to any termination of the Revolving Credit
Commitments pursuant to Section 8.2) and the proceeds thereof shall be paid
directly to the Issuing Bank for application to the respective LOC
Obligations. Each such Bank hereby irrevocably agrees to make its pro rata
share of each such Revolving Credit 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 Credit Loans
otherwise required hereunder, (ii) whether any conditions specified in Section
5.2 are then satisfied, (iii) whether an Incipient Default or an Event of
Default then exists, (iv) failure of any such request or deemed request for
Revolving Credit Loans to be made by the time otherwise required hereunder,
(v) whether the date of such borrowing is a date on which Revolving Credit
Loans are otherwise permitted to be made hereunder or (vi) any termination of
the Revolving Credit Commitments relating thereto immediately prior to or
contemporaneously with such borrowing. In the event that any Revolving Credit
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 Federal Bankruptcy Code with respect to any of the
Borrower), then each such Bank 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 Bank such participation in the outstanding LOC
Obligations as shall be necessary to cause each such Bank to share in such LOC
Obligations ratably (based upon the respective Ratable Shares of the Banks
(determined before giving effect to any termination of the Revolving Credit
Commitments pursuant to Section 8.2)), provided that at the time any purchase
of participation pursuant to this sentence is actually made, the purchasing
Bank shall be required to pay to the Issuing Bank, to the extent not paid to
the Issuing Bank by the Borrower in accordance with the terms of subsection
(d) hereof, interest on the principal amount of participation purchased for
each day from and including the day upon which such borrowing would otherwise
have occurred to but excluding the date of payment for such participation, at
the rate equal to, if paid within two (2) Business Days of the date of the
Revolving Credit Loan, the Federal Funds Rate, and thereafter at a rate equal
to the Base Rate.
(f) DESIGNATION OF SUBSIDIARIES AS ACCOUNT PARTIES. Notwithstanding
anything to the contrary set forth in this Agreement, including without
limitation subsection (a) hereof, 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 Subsidiary of the Borrower, provided that notwithstanding such
statement, the Borrower shall be the actual account party for all purposes of
this 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 Bank may have the Letters
of Credit be subject to The Uniform Customs and Practice for Documentary
Credits (the "UCP") or the International Standby Practices 1998 (the "ISP98"),
in either case as published as of the date of issue by the International
Chamber of Commerce, in which case the UCP or the ISP98, as applicable, may be
incorporated therein and deemed in all respects to be a part thereof.
(i) INDEMNIFICATION; NATURE OF ISSUING BANK'S DUTIES.
(i) In addition to its other obligations under this Section 2.5, the
Borrower hereby agrees to protect, indemnify, pay and save the Issuing
Bank harmless from and against any and all claims, demands, liabilities,
damages, losses, costs, charges and expenses (including reasonable
attorneys' fees) that the Issuing Bank 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 the Issuing Bank 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 Issuing Bank, the Borrower
shall assume all risks of the acts, omissions or misuse of any Letter of
Credit by the beneficiary thereof. The Issuing Bank shall not be
responsible: (A) for the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in
connection with the application for and issuance of any Letter of Credit,
even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (B) for the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, that may prove to be
invalid or ineffective for any reason; (C) for errors, omissions,
interruptions or delays in transmission or delivery of any messages, by
mail, cable, telegraph, telex or otherwise, whether or not they be in
cipher; (D)for any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under a Letter of Credit or
of the proceeds thereof; and (E) for any consequences arising from causes
beyond the control of the Issuing Bank, including, without limitation,
any Government Acts. None of the above shall affect, impair, or prevent
the vesting of the Issuing Bank'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
the Issuing Bank, under or in connection with any Letter of Credit or the
related certificates, if taken or omitted in good faith, shall not put
such Issuing Bank under any resulting liability to the Borrower. It is
the intention of the parties that this Agreement shall be construed and
applied to protect and indemnify the Issuing Bank against any and all
risks involved in the issuance of the Letters of Credit, all of which
risks are hereby assumed by the Borrower including, without limitation,
any and all Government Acts. The Issuing Bank shall not, in any way, be
liable for any failure by the Issuing Bank or anyone else to pay any
drawing under any Letter of Credit as a result of any Government Acts or
any other cause beyond the control of the Issuing Bank.
(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 Agreement. No act or omissions of any
current or prior beneficiary of a Letter of Credit shall in any way
affect or impair the rights of the Issuing Bank to enforce any right,
power or benefit under this Agreement.
(v) Notwithstanding anything to the contrary contained in this
subsection (i), the Borrower shall have no obligation to indemnify the
Issuing Bank in respect of any claims, demands, liabilities, damages,
losses, costs, charges or expenses incurred by the Issuing Bank (A)
arising out of the gross negligence or willful misconduct of the Issuing
Bank, as determined by a court of competent jurisdiction, or (B) caused
by the Issuing Bank's failure to pay under any Letter of Credit after
presentation to it of a request strictly complying with the terms and
conditions of such Letter of Credit, as determined by a court of
competent jurisdiction, unless such payment is prohibited by any law,
regulation, court order or decree.
(j) RESPONSIBILITY OF ISSUING BANK. It is expressly understood and agreed
that the obligations of the Issuing Bank hereunder to the Banks are only those
expressly set forth in this Agreement and that the Issuing Bank 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 2.5 shall be deemed to prejudice the right of any
Bank to recover from the Issuing Bank any amounts made available by such Bank
to the Issuing Bank pursuant to this Section 2.5 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 Bank.
(k) CONFLICT WITH LOC DOCUMENTS. In the event of any conflict between
this Agreement and any LOC Document, this Agreement shall control.
Section 2.6. REPAYMENT.
The Borrower shall repay the outstanding principal balance under the
Revolving Credit Notes in full on the Termination Date for Revolving Credit
Loans. The Borrower shall also repay the amount of the outstanding principal
balance under any Employee Note that is due and payable under such Employee
Note, whether by acceleration of maturity or otherwise, 30 days after such
amount becomes due and payable if such amount is then unpaid, provided,
however, that at any time that defaults under all or substantially all of the
Employee Notes have occurred and are continuing, the Borrower shall
immediately repay the aggregate principal amount outstanding under the
Employee Notes upon demand therefor by the Agent.
Section 2.7. INTEREST.
(a) REVOLVING CREDIT LOANS. Subject to the provisions of subsection (d)
below, each Revolving Credit Loan shall bear interest on the outstanding
principal balance thereunder at a per annum rate equal to:
(i) Base Rate Loans. During such periods as any Revolving Credit
Loan (or portion thereof) shall consist of Base Rate Loans, at a per
annum rate equal to the Base Rate plus the Applicable Percentage for Base
Rate Loans in effect from time to time.
(ii) EURODOLLAR LOANS. During such periods as any Revolving Credit
Loan (or any portion thereof) shall consist of Eurodollar Loans, at a per
annum rate equal to the sum of the Eurodollar Rate for the Interest
Period in effect for such Eurodollar Loan plus the Applicable Percentage
for Eurodollar Loans in effect from time to time.
(b) EMPLOYEE LOANS. Subject to the provisions of subsection (d) below,
each Employee Loan shall bear interest on the outstanding principal balance
thereunder at a per annum rate equal to the Applicable Rate.
(c) PAYMENTS AND ACCRUALS. Interest shall be payable in arrears on each
Interest Payment Date applicable to the Loan (or portion thereof) unless
otherwise specified herein. The interest due on each Interest Payment Date
shall be (i) with respect to Revolving Credit Loans that are Base Rate Loans,
the interest accrued during the immediately preceding month, (ii) with respect
to Revolving Credit Loans that are Eurodollar Loans, the interest accrued
during the applicable Interest Period or, where the applicable Interest Period
is more than three months, the immediately preceding three-month portion
thereof and (iii) with respect to Employee Loans, the interest accrued during
the immediately preceding calendar quarter. Unless otherwise specifically
provided herein or in the Notes, all late payments of principal and interest
shall bear interest at the rate specified in clause (d) immediately below.
(d) DURING AN EVENT OF DEFAULT. Notwithstanding the foregoing, 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 Notes, the Borrower Guaranty, the
Employee Pledge Agreements and any other Credit Documents shall bear interest,
payable on demand, at a per annum rate 2% greater than the rate which would
otherwise be applicable (or if no rate is applicable, whether in respect of
interest, fees or other amounts, then 2% greater than the Base Rate).
Section 2.8. PREPAYMENTS; COMMITMENT INCREASE; REDUCTION OR
TERMINATION.
(a) VOLUNTARY PREPAYMENTS. The Borrower shall have the right to prepay
the Revolving Credit Loans in whole or in part from time to time on any
Business Day without premium or penalty; PROVIDED, HOWEVER, that (i) Revolving
Credit Loans that are Eurodollar Loans may only be prepaid on three Business
Days' prior written notice to the Agent specifying the applicable Loans to be
prepaid; (ii) any prepayment of Revolving Credit Loans that are Eurodollar
Loans will be subject to Section 2.17; (iii) each such partial prepayment of
Loans shall be (A) in the case of Revolving Credit Loans that are Eurodollar
Loans, in a minimum principal amount of $1,000,000 and in integral multiples
of $100,000 in excess thereof and (B) in the case of Revolving Credit Loans
that are Base Rate Loans, in a minimum principal amount of $100,000 and in
integral multiples of $100,000 in excess thereof. Subject to the foregoing
terms, amounts prepaid hereunder shall be applied as the Borrower may elect;
PROVIDED, that if the Borrower shall fail to specify application of a
voluntary prepayment then such prepayment shall be applied first to Base Rate
Loans and then to Eurodollar Loans in direct order of Interest Period
maturities.
(b) MANDATORY PREPAYMENTS; PURCHASE OF EMPLOYEE NOTES.
(i) OVERADVANCE. If at any time the sum of the aggregate amount of
outstanding Revolving Credit Loans PLUS LOC Obligations outstanding shall
exceed the Aggregate Revolving Credit Commitment, the Borrower promises
to prepay immediately the outstanding principal balance on the Revolving
Credit Loans and/or provide cash collateral in respect of LOC Obligations
in an amount sufficient to eliminate such excess.
(ii) MARGIN STOCK EVENT. In the event that any of the Employee
Pledged Shares become "margin stock" as defined by Regulation U (a
"MARGIN STOCK EVENT"), the Borrower promises to prepay immediately the
outstanding principal balance on the Revolving Credit Loans and/or to
purchase Employee Loans in an amount sufficient to bring the Loans into
compliance with Regulation U.
(iii) SALE OF EMPLOYEE PLEDGED SHARES. Upon the sale of any Employee
Pledged Shares by a Qualified Employee, such Qualified Employee shall
immediately prepay the principal of the Employee Note of such Qualified
Employee in an amount equal to the product of (a) the quotient (i) the
number of Employee Pledged Shares sold divided by (ii) the total number
of Employee Pledged Shares of such Qualified Employee (including the
shares sold), multiplied by (b) the outstanding principal of the Employee
Note (for example, if the Employee Note is secured by 10,000 Employee
Pledged Shares and the Qualified Employee sells 2,500 of those shares
(which represents 25% of the Employee Pledged Shares securing payment of
the Employee Note), then the Qualified Employee must prepay the principal
of the Employee Note by an amount equal to 25% of the outstanding
principal thereof).
(iv) TERMINATION OF QUALIFIED EMPLOYEE. In the event a Qualified
Employee is terminated (whether voluntary or involuntary) from the Parent
or any of its Subsidiaries (such termination is, hereinafter, a
"TERMINATION"), the Qualified Employee shall prepay his (or her) Employee
Note in the amounts and on the dates set forth below:
(A) if on the date of Termination the Qualified Employee is
permitted to sell all of its Employee Pledged Shares under
applicable securities laws and under the Management Stock
Agreements, then the Qualified Employee shall repay its Employee
Loans in full on the date thirty (30) days after his (or her)
Termination;
(B) if on the date of Termination the Qualified Employee is
permitted to sell a portion, but not all, of its Employee Pledged
Shares under applicable securities laws and under the Management
Stock Agreements, then the Qualified Employee shall repay its
Employee Loans:
(x) on the date thirty (30) days after his (or her)
Termination by an amount equal to the lesser of (1) the unpaid
principal amount of its Employee Loans and (2) the proceeds
(net of broker commissions, if any) from the sale of all of its
Employee Pledged Shares permitted to be sold under applicable
securities laws and under the Management Stock Agreements;
(y) subject to clause (z) below, on the date thirty (30)
days after the Qualified Employee is permitted to sell any
additional Employee Pledged Shares under applicable securities
laws and under the Management Stock Agreements by an amount
equal to the lesser of (1) the unpaid principal amount of its
Employee Loans and (2) the proceeds (net of broker commissions,
if any) from the sale of all of its Employee Pledged Shares
permitted to be sold under applicable securities laws and under
the Management Stock Agreements; and
(z) on the date thirty (30) days after the Qualified
Employee is permitted to sell all of its Employee Pledged
Shares under applicable securities laws and under the
Management Stock Agreements by an amount equal to the unpaid
principal amount of its Employee Loans.
(C) if on the date of Termination the Qualified Employee is not
permitted to sell all or any portion of its Employee Pledged Shares
under applicable securities laws and under the Management Stock
Agreements, then the Qualified Employee shall repay its Employee
Loans:
(x) subject to clause (y) below, on the date thirty (30)
days after the Qualified Employee is permitted to sell any
Employee Pledged Shares under applicable securities laws and
under the Management Stock Agreements by an amount equal to the
lesser of (1) the unpaid principal amount of its Employee Loans
and (2) the proceeds (net of broker commissions, if any) from
the sale of all of its Employee Pledged Shares permitted to be
sold under applicable securities laws and under the Management
Stock Agreements; and
(z) on the date thirty (30) days after the Qualified
Employee is permitted to sell all of its Employee Pledged
Shares under applicable securities laws and under the
Management Stock Agreements by an amount equal to the unpaid
principal amount of its Employee Loans.
(v) APPLICATION. All prepayments made pursuant to this Section
2.8(b)(i) and Section 2.8(b)(ii) shall (A) be subject to Section 2.17,
and (B) be applied first to Base Rate Loans and then to Eurodollar Loans
in direct order of Interest Period maturities.
(c) NOTICE OF PREPAYMENTS; REBORROWING. The Borrower will provide notice
to the Agent of any prepayment by 12:00 noon (Charlotte, North Carolina time)
on the date of prepayment in the case of prepayments of Base Rate Loans and on
the third Business Day prior to the date of prepayment in the case of
prepayments of Revolving Credit Loans that are Eurodollar Loans. Amounts paid
on the Revolving Credit Loans under this Section 2.8 may be reborrowed in
accordance with the provisions hereof.
(d) REDUCTION OR TERMINATION. The Borrower may (i) terminate the
Revolving Credit Commitments at any time if no Loans or LOC Obligations are
outstanding at such time, and (ii) ratably and permanently reduce from time to
time, by an aggregate amount of not less than $3,000,000 and additional
increments of $1,000,000, the unused portion of the Revolving Credit
Commitments.
Section 2.9. FEES.
(a) UNUSED FEE. In consideration of the Aggregate Revolving Credit
Commitments made available by the Banks hereunder, the Borrower agrees to pay
to the Agent for the account of the Banks a fee (the "UNUSED FEE") on the
Unused Aggregate Revolving Credit Commitment computed at a per annum rate for
each day during the applicable Unused Fee Calculation Period (hereinafter
defined) equal to the Applicable Percentage for such Unused Fee. The Unused
Fee shall commence to accrue on the Closing Date and shall be due and payable
in arrears on the third (3rd) Business Day of each January, April, July and
October (and the Termination Date) for the immediately preceding fiscal
quarter (or portion thereof) (each such fiscal quarter or portion thereof for
which the Unused Fee is payable hereunder being herein referred to as an
"UNUSED FEE CALCULATION PERIOD"), beginning with the first of such dates to
occur after the Closing Date.
(b) ADMINISTRATIVE FEES. The Borrower agrees to pay to the Agent, for its
own account, the annual administrative fee set forth in the Agent's Fee
Letter, payable on each anniversary of the Closing Date until and including
the last occurring Termination Date (the "AGENT'S FEE").
(c) LETTER OF CREDIT FEES.
(i) The Borrower agrees to pay to the Agent for account of the
Banks, a fee for each Letter of Credit issued hereunder (the "LOC FEE")
on the available amount to be drawn under such Letter of Credit computed
at a per annum rate for each day during the applicable LOC Term
(hereinafter defined) equal to the Applicable Percentage for such LOC
Fee. The LOC Fee shall commence to accrue on the issuance date for each
Letter of Credit and shall be due and payable in arrears on the third
(3rd) Business Day of each January, April, July and October (and on the
expiry date thereof) for the immediately preceding fiscal quarter (or
portion thereof) (each such fiscal quarter or portion thereof for which
the LOC Fee is payable hereunder being herein referred to as an "LOC
TERM"), beginning with the first of such dates to occur after the date of
issuance of each Letter of Credit.
(ii) In addition to the Letter of Credit Fee payable pursuant to
clause (i) above, the Borrower shall pay to the Issuing Bank for its own
account without sharing by the other Banks the letter of credit fronting
fees of (i) 0.125% on the available amount to be drawn under such Letter
of Credit computed at a per annum rate for each day during the applicable
LOC Term and (ii) the customary charges from time to time of the Issuing
Bank with respect to the issuance, amendment, transfer, administration,
cancellation and conversion of, and drawing under, such Letters of Credit
(collectively, the "ISSUING BANK FEES").
Section 2.10. METHOD OF PAYMENT.
Unless otherwise provided herein, whenever any payment of principal,
interest, fees or any other payment to be made hereunder becomes due on a day
other than a Business Day, such payment may be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of the amount of interest then to be paid. All payments and
prepayments by the Borrower hereunder and the makers of Employee Notes shall
be made to the Agent, at its address stated in Section 10.8 hereof, in such
money of the United States as at the time of payment shall be legal tender for
the payment of public and private debts and in immediately available funds,
without setoff, deduction or counterclaim. The Borrower and the Banks hereby
authorize the Agent to debit the deposit accounts of the Borrower, or to
advance Revolving Credit Loans on the Borrower's behalf, at the time any
payment by the Borrower to the Agent under this Agreement is due, in the
amount of the required payment. A payment must be received by the Agent or an
instruction must be given the Agent to debit one or more deposit accounts of
the Borrower and having collected balances sufficient to make such payment no
later than 2:00 p.m., Charlotte, North Carolina, time, in order to be credited
to the Borrower on the day of receipt. Except as expressly provided otherwise
herein, all computations of interest and fees shall be made on the basis of
actual number of days elapsed over a year of 360 days, except with respect to
computation of interest on Base Rate Loans and Employee Loans which (unless
such rate is determined by reference to the Federal Funds Rate) shall be
calculated based on a year of 365 or 366 days, as appropriate.
Section 2.11. APPLICATION OF COLLECTIONS.
(a) DISTRIBUTION TO BANKS. All payments of principal, interest,
fees, and costs or expenses by the Borrower prior to the occurrence and
continuance of an Event of Default under Article VIII hereof, or by the
issuer of an Employee Note prior to the occurrence and continuance of a
default under such Employee Note, shall be distributed to the Banks by
the Agent as provided in this Section. If any other Bank shall at any
time receive payment on any Loans directly or indirectly from any assets
of the Borrower (including, without limitation, through exercise of
setoff rights under Section 8.3 hereof) or the maker of any Employee Note
in a greater amount than the proportionate amount of principal and
interest due it under this Agreement, then such Bank shall purchase for
cash (immediately prior to such payment, if necessary) a ratable
proportion of the Revolving Credit Loans or the amounts outstanding under
Employee Loan Participations held by the other Banks, including the
Agent, so that all recoveries of principal and interest shall be shared
by the Banks in accordance with their Ratable Shares. If all or any
portion of such excess payment is thereafter recovered from such Bank,
such purchase shall be rescinded and the purchase price restored to the
extent of such recovery, but without interest.
(b) APPLICATION OF COLLECTIONS PRIOR TO EVENT OF DEFAULT. Prior to
the occurrence and continuance of an Event of Default hereunder or of a
default under an Employee Note, the Agent shall apply all Collections to
the payment of costs or expenses, interest, fees, and principal
attributable to the Notes to which the Collections apply, in that order.
After the occurrence and continuance of any Event of Default hereunder or
a default under an Employee Note, all such applications shall be made in
accordance with the terms of clause (c) immediately below. The Agent
shall remit to the Banks in immediately available funds, or retain for
its own account, as applicable: (i) out of the principal portion of any
such Collections, each Bank's, including the Agent's, Ratable Share
thereof; (ii) out of the fees portion of any such Collections each
Bank's, including the Agent's, Ratable Share thereof; (iii) out of the
interest portion of any such Collections, each Bank's, including the
Agent's, Ratable Share thereof; and (iv) out of the costs or expenses
portion of any such Collections, each Bank's, including the Agent's,
costs or expenses, pursuant to Section 10.6 hereof, as incurred. All
remittances of principal, interest, fees, and costs or expenses hereunder
to each of the other Banks shall be made as soon as practicable, but in
no instance later than the Business Day of their receipt by the Agent in
immediately available funds, if such receipt occurs no later than 12:00
noon Charlotte, North Carolina time, or the next Business Day, if such
receipt occurs later than 12:00 noon, and all such remittances shall be
effected by the Agent's initiating wire transfers or by such other means
as are agreed in writing by both the Agent and such Bank. Unless
otherwise dictated by a court of competent jurisdiction, the Agent shall,
however, have no obligation to pay any Bank any amounts except out of
those amounts actually received in collected funds for application to the
Obligations, except as otherwise specifically provided in clause (c)
immediately below.
(c) APPLICATION OF COLLECTIONS 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 Bank in
connection with the Loans or the Notes or on account of the Obligations
or any other amounts outstanding under any of the Credit Documents 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 Banks under the
Credit 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 Banks in connection with enforcing its rights under the
Credit Documents or otherwise with respect to the Obligations owing to
such Bank;
FOURTH, to the payment of all accrued interest and fees on or in
respect of the Obligations;
FIFTH, to the payment of the outstanding principal amount of the
Obligations (including the payment or cash collateralization of the
outstanding LOC Obligations);
SIXTH, to all other 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; and (ii) each of the Banks shall receive an amount equal
to its pro rata share (based on the proportion that the then outstanding
Obligations held by such Bank bears to the aggregate then outstanding
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 Bank 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 2.11(c).
Section 2.12. CAPITAL ADEQUACY.
If, after the date hereof, any Bank has determined 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 Bank 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 Bank's capital or assets as a consequence of its commitments or
obligations hereunder to a level below that which such Bank could have
achieved but for such adoption, effectiveness, change or compliance (taking
into consideration such Bank's policies with respect to capital adequacy),
then, upon notice from such Bank to the Borrower, the Borrower shall be
obligated to pay to such Bank such additional amount or amounts as will
compensate such Bank for such reduction. Each determination by any such Bank
of amounts owing under this Section shall, absent manifest error, be
conclusive and binding on the parties hereto.
Section 2.13. INABILITY TO DETERMINE INTEREST RATE.
If prior to the first day of any Interest Period, the Agent shall have
determined (which determination shall be conclusive and binding upon the
Borrower, absent manifest error) 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, the Agent shall
give telecopy or telephonic notice thereof to the Borrower and the Banks as
soon as practicable thereafter. If such notice is given (x) any Eurodollar
Loans requested to be made on the first day of such Interest Period shall be
made as Base Rate Loans, (y) any Revolving Credit Loans that were to have been
converted on the first day of such Interest Period to or continued as
Eurodollar Loans shall be converted to or continued as Base Rate Loans and (z)
any outstanding Eurodollar Loans shall be converted, on the first day of such
Interest Period, to Base Rate Loans. Until such notice has been withdrawn by
the Agent, no further Eurodollar Loans shall be made or continued as such, nor
shall the Borrower have the right to convert Base Rate Loans to Eurodollar
Loans.
Section 2.14. 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 Bank
to make or maintain Eurodollar Loans as contemplated by this Credit Agreement,
(a) such Bank 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 Bank hereunder to
make Eurodollar Loans, continue Eurodollar Loans as such and convert Base Rate
Loans to Eurodollar Loans shall forthwith be canceled and, until such time as
it shall no longer be unlawful for such Bank to make or maintain Eurodollar
Loans, such Bank shall then have a commitment only to make a Base Rate Loan
when a Eurodollar Loan is requested and (c) such Bank's Loans then outstanding
as Eurodollar Loans, if any, shall be converted automatically to Base Rate
Loans on the respective last days or 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 Bank such amounts, if any, as may be required pursuant to Section
2.17.
Section 2.15. REQUIREMENTS OF LAW.
If the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof applicable to any Bank, or compliance by
any Bank with any request or directive (whether or not having the force of
law) from any central bank or other Governmental Authority, in each case made
subsequent to the Closing Date (or, if later, the date on which such Bank
becomes a Bank):
(a) shall subject such Bank to any tax of any kind whatsoever with
respect to any Letter of Credit or any Eurodollar Loans made by it or its
obligation to make Eurodollar Loans, or change the basis of taxation of
payments to such Bank in respect thereof (except for Non-Excluded Taxes
covered by Section 2.16 (including Non-Excluded Taxes imposed solely by
reason of any failure of such Bank to comply with its obligations under
Section 2.16) and changes in taxes measured by or imposed upon the
overall net income, or franchise tax (imposed in lieu of such net income
tax), of such Bank or its applicable lending office, branch, or any
affiliate thereof);
(b) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans
or other extensions of credit by, or any other acquisition of funds by,
any office of such Bank which is not otherwise included in the
determination of the Eurodollar Rate hereunder; or
(c) shall impose on such Bank any other condition (excluding any tax
of any kind whatsoever);
and the result of any of the foregoing is to increase the cost to such
Bank, by an amount which such Bank deems to be material, of making,
converting into, continuing or maintaining Eurodollar Loans or to reduce
any amount receivable hereunder in respect thereof, then, in any such
case, upon notice to the Borrower from such Bank, through the Agent, in
accordance herewith, the Borrower shall be obligated to promptly pay such
Bank, upon its demand, any additional amounts necessary to compensate
such Bank for such increased cost or reduced amount receivable, PROVIDED
that, in any such case, the Borrower may elect to convert the Eurodollar
Loans made by such Bank hereunder to Base Rate Loans by giving the Agent
at least one Business Day's notice of such election, in which case the
Borrower shall promptly pay to such Bank, upon demand, without
duplication, such amounts, if any, as may be required pursuant to Section
2.17. If any Bank becomes entitled to claim any additional amounts
pursuant to this subsection, it shall provide prompt notice thereof to
the Borrower, through the Agent, certifying (x) that one of the events
described in this paragraph (a) has occurred and describing in reasonable
detail the nature of such event, (y) as to the increased cost or reduced
amount resulting from such event and (z) as to the additional amount
demanded by such Bank and a reasonably detailed explanation of the
calculation thereof. Such a certificate as to any additional amounts
payable pursuant to this subsection submitted by such Bank, through the
Agent, to the Borrower shall be conclusive and binding on the parties
hereto in the absence of manifest error. This covenant shall survive the
termination of this Agreement and the payment of the Loans and all other
amounts payable hereunder.
Section 2.16......Taxes.
(a) Except as provided below in this subsection, all payments made
by the Borrower on behalf of itself or on behalf of any other Person in
connection with the Employee Loans under this Agreement, the Revolving
Credit Notes and the Employee Notes shall be made free and clear of, and
without deduction or withholding for or on account of, any present or
future income, stamp or other taxes, levies, imposts, duties, charges,
fees, deductions or withholdings, now or hereafter imposed, levied,
collected, withheld or assessed by any court, or governmental body,
agency or other official, excluding taxes measured by or imposed upon the
overall net income of any Bank or its applicable lending office, or any
branch or affiliate thereof, and all franchise taxes, branch taxes, taxes
on doing business or taxes on the overall capital or net worth of any
Bank or its applicable lending office, or any branch or affiliate
thereof, in each case imposed in lieu of net income taxes, imposed: (i)
by the jurisdiction under the laws of which such Bank, applicable lending
office, branch or affiliate is organized or is located, or in which its
principal executive office is located, or any nation within which such
jurisdiction is located or any political subdivision thereof; or (ii) by
reason of any connection between the jurisdiction imposing such tax and
such Bank, applicable lending office, branch or affiliate other than a
connection arising solely from such Bank having executed, delivered or
performed its obligations, or received payment under or enforced, this
Agreement. If any such non-excluded taxes, levies, imposts, duties,
charges, fees, deductions or withholdings ("NON-EXCLUDED TAXES") are
required to be withheld from any amounts payable to the Agent or any Bank
hereunder, (A) the amounts so payable to the Agent or such Bank shall be
increased to the extent necessary to yield to the Agent or such Bank
(after payment of all Non-Excluded Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in
this Agreement, PROVIDED, HOWEVER, that the Borrower shall be entitled to
deduct and withhold any Non-Excluded Taxes and shall not be required to
increase any such amounts payable to any Bank that is not organized under
the laws of the United States of America or a state thereof if such Bank
fails to comply with the requirements of paragraph (b) of this subsection
whenever any Non-Excluded Taxes are payable by the Borrower, and (B) as
promptly as possible thereafter the Borrower shall send to the Agent for
its own account or for the account of such Bank, as the case may be, a
certified copy of an original official receipt received by the Borrower
showing payment thereof. If the Borrower fails to pay any Non-Excluded
Taxes when due to the appropriate taxing authority or fail to remit to
the Agent the required receipts or other required documentary evidence,
the Borrower shall indemnify the Agent and the Banks for any incremental
taxes, interest or penalties that may become payable by the Agent or any
Bank as a result of any such failure. The agreements in this subsection
shall survive the termination of this Agreement and the payment of the
Loans and all other amounts payable hereunder.
(b) Each Bank that is not incorporated under the laws of the United
States of America or a state thereof shall:
(X) (i) on or before the date of any payment by the Borrower
under this Agreement to such Bank, deliver to the Borrower and the
Agent (A) two (2) duly completed copies of United States Internal
Revenue Service Form 1001 or 4224, or successor applicable form, as
the case may be, certifying that it is entitled to receive payments
under this Agreement without deduction or withholding of any United
States federal income taxes and (B) an Internal Revenue Service Form
W-8 or W-9, or successor applicable form, as the case may be,
certifying that it is entitled to an exemption from United States
backup withholding tax;
(ii) deliver to the Borrower and the Agent two (2) further
copies of any such form or certification on or before the date that
any such form or certification expires or becomes obsolete and after
the occurrence of any event requiring a change in the most recent
form previously delivered by it to the Borrower; and
(iii) obtain such extensions of time for filing and complete
such forms or certifications as may reasonably be requested by the
Borrower or the Agent; or
(Y) in the case of any such Bank that is not a "bank" within
the meaning of Section 881(c)(3)(A) of the Internal Revenue Code,
(i) represent to the Borrower (for the benefit of the Borrower and
the Agent) that it is not a bank within the meaning of Section
881(c)(3)(A) of the Internal Revenue Code, (ii) agree to furnish to
the Borrower on or before the date of any payment by the Borrower,
with a copy to the Agent two (2) accurate and complete original
signed copies of Internal Revenue Service Form W-8, or successor
applicable form certifying to such Bank's legal entitlement at the
date of such certificate to an exemption from U.S. withholding tax
under the provisions of Section 881(c) of the Internal Revenue Code
with respect to payments to be made under this Agreement (and to
deliver to the Borrower and the Agent two (2) further copies of such
form on or before the date it expires or becomes obsolete and after
the occurrence of any event requiring a change in the most recently
provided form and, if necessary, obtain any extensions of time
reasonably requested by the Borrower or the Agent for filing and
completing such forms), and (iii) agree, to the extent legally
entitled to do so, upon reasonable request by the Borrower, to
provide to the Borrower (for the benefit of the Borrower and the
Agent) such other forms as may be reasonably required in order to
establish the legal entitlement of such Bank to an exemption from
withholding with respect to payments under this Agreement;
unless in any such case any change in treaty, law or regulation has
occurred after the date such Person becomes a Bank hereunder which
renders all such forms inapplicable or which would prevent such Bank
from duly completing and delivering any such form with respect to it
and such Bank so advises the Borrower and the Agent. Each Person
that shall become a Bank or a participant of a Bank pursuant to
Section 10.2 shall, upon the effectiveness of the related transfer,
be required to provide all of the forms, certifications and
statements required pursuant to this subsection, PROVIDED that in
the case of a participant of a Bank the obligations of such
participant of a Bank pursuant to this subsection (b) shall be
determined as if the participant of a Bank were a Bank except that
such participant of a Bank shall furnish all such required forms,
certifications and statements to the Bank from which the related
participation shall have been purchased.
Section 2.17. INDEMNITY.
The Borrower promises to indemnify each Bank and to hold each Bank
harmless from any loss or expense which such Bank may sustain or incur (other
than through such Bank's gross negligence or willful misconduct) as a
consequence of (a) default by the Borrower in making a borrowing of,
conversion into or continuation of Eurodollar Loans after the Borrower has
given a notice requesting the same in accordance with the provisions of this
Agreement, (b) default by the Borrower in making any prepayment of a
Eurodollar Loan after the Borrower has given a notice thereof in accordance
with the provisions of this Agreement or (c) the making of a prepayment of
Eurodollar Loans on a day which is not the last day of an Interest Period with
respect thereto. With respect to Revolving Credit Loans that are Eurodollar
Loans, such indemnification may include an amount equal to the excess, if any,
of (i) 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 (ii) the amount of
interest (as reasonably determined by such Bank) which would have accrued to
such Bank on such amount by placing such amount on deposit for a comparable
period with leading banks in the interbank Eurodollar market. This covenant
shall survive the termination of this Agreement and the payment of the Loans
and all other amounts payable hereunder.
ARTICLE III. GUARANTY
Section 3.1. THE GUARANTEE.
Each of the Guarantors hereby jointly and severally guarantees to each
Bank, to each Affiliate of a Bank that enters into an Interest Rate Protection
Agreement and to the Agent as hereinafter provided the prompt payment of the
Subsidiary Guaranteed Obligations in full when due (whether at stated
maturity, as a mandatory prepayment, by acceleration, a mandatory cash
collateralization or otherwise) strictly in accordance with the terms thereof.
The Guarantors hereby further agree that if any of the Subsidiary Guaranteed
Obligations are not paid in full when due (whether at stated maturity, as a
mandatory prepayment, by acceleration, as 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 Subsidiary Guaranteed Obligations,
the same will be promptly paid in full when due (whether at extended maturity,
as a mandatory prepayment, by acceleration 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 Interest Rate Protection Agreements, to the
extent the obligations of a Guarantor shall be adjudicated to be invalid or
unenforceable for any reason (including, without limitation, because of any
applicable state or federal law relating to fraudulent conveyances or
transfers) then the obligations of each Guarantor hereunder shall be limited
to the maximum amount that is permissible under applicable law (whether
federal or state and including, without limitation, the Federal Bankruptcy
Code).
Section 3.2. OBLIGATIONS UNCONDITIONAL.
The obligations of the Guarantors under Section 3.1 hereof are joint and
several, absolute and unconditional, irrespective of the value, genuineness,
validity, regularity or enforceability of any of the Credit Documents or
Interest Rate Protection Agreements, or any other agreement or instrument
referred to therein, or any substitution, release or exchange of any other
guarantee of or security for any of the Subsidiary Guaranteed 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 3.2 that the obligations of the Guarantors hereunder shall be
absolute and unconditional under any and all circumstances. Each Guarantor
agrees that such Guarantor shall have no right of subrogation, indemnity,
reimbursement or contribution against the Borrower or any other Guarantor of
the Subsidiary Guaranteed Obligations for amounts paid under this Section 3
until such time as the Banks (and any Affiliates of Banks entering into
Interest Rate Protection Agreements) have been paid in full, the Revolving
Credit Commitment under this Credit Agreement have been terminated and no
Person or Governmental Authority shall have any right to request any return or
reimbursement of funds from the Banks in connection with monies received under
the Credit Documents or Interest Rate Protection 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:
(i) 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
Subsidiary Guaranteed Obligations shall be extended, or such performance
or compliance shall be waived;
(ii) any of the acts mentioned in any of the provisions of any of
the Credit Documents, any Interest Rate Protection Agreement or any other
agreement or instrument referred to in the Credit Documents or Interest
Rate Protection Agreements shall be done or omitted;
(iii) the maturity of any of the Subsidiary Guaranteed Obligations
shall be accelerated, or any of the Subsidiary Guaranteed Obligations
shall be modified, supplemented or amended in any respect, or any right
under any of the Credit Documents, any Interest Rate Protection Agreement
or any other agreement or instrument referred to in the Credit Documents
or Interest Rate Protection Agreements shall be waived or any other
guarantee of any of the Subsidiary Guaranteed Obligations or any security
therefor shall be released or exchanged in whole or in part or otherwise
dealt with;
(iv) any Lien granted to, or in favor of, the Agent or any Bank or
Banks as security for any of the Subsidiary Guaranteed Obligations shall
fail to attach or be perfected; or
(v) any of the Subsidiary Guaranteed 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 Bank exhaust any right,
power or remedy or proceed against any Person under any of the Credit
Documents, any Interest Rate Protection Agreement or any other agreement or
instrument referred to in the Credit Documents or Interest Rate Protection
Agreements, or against any other Person under any other guarantee of, or
security for, any of the Subsidiary Guaranteed Obligations.
Section 3.3. REINSTATEMENT.
The obligations of the Guarantors under this Section 3 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 Subsidiary Guaranteed
Obligations is rescinded or must be otherwise restored by any holder of any of
the Subsidiary Guaranteed 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 Bank on demand for all reasonable costs
and expenses (including, without limitation, fees and expenses of counsel)
incurred by the Agent or such Bank 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.
Section 3.4. CERTAIN ADDITIONAL WAIVERS.
Without limiting the generality of the provisions of this Section 3, each
Guarantor hereby specifically waives the benefits of N.C. Gen. Stat. SS 26-7
through 26-9, inclusive. Each Guarantor further agrees that such Guarantor
shall have no right of recourse to security for the Subsidiary Guaranteed
Obligations, except through the exercise of the rights of subrogation pursuant
to Section 3.2.
Section 3.5. 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 Banks, on the
other hand, the Subsidiary Guaranteed Obligations may be declared to be
forthwith due and payable as provided in Section 8.2 hereof (and shall be
deemed to have become automatically due and payable in the circumstances
provided in said Section 8.2) for purposes of Section 3.1 hereof
notwithstanding any stay, injunction or other prohibition preventing such
declaration (or preventing the Subsidiary Guaranteed Obligations from becoming
automatically due and payable) as against any other Person and that, in the
event of such declaration (or the Subsidiary Guaranteed Obligations being
deemed to have become automatically due and payable), the Subsidiary
Guaranteed Obligations (whether or not due and payable by any other Person)
shall forthwith become due and payable by the Guarantors for purposes of said
Section 3.1.
Section 3.6. RIGHTS OF CONTRIBUTION.
The Guarantors hereby agree, as among themselves, that if any Guarantor
shall become an Excess Funding Guarantor (as defined below), each other
Guarantor shall, on demand of such Excess Funding Guarantor (but subject to
the succeeding provisions of this Section 3.6), pay to such Excess Funding
Guarantor an amount equal to such Guarantor's Pro Rata Share (as defined below
and determined, for this purpose, without reference to the properties, assets,
liabilities and debts of such Excess Funding Guarantor) of such Excess Payment
(as defined below). The payment obligation of any Guarantor to any Excess
Funding Guarantor under this Section 3.6 shall be subordinate and subject in
right of payment to the prior payment in full of the obligations of such
Guarantor under the other provisions of this Section 3, and such Excess
Funding Guarantor shall not exercise any right or remedy with respect to such
excess until payment and satisfaction in full of all of such obligations. For
purposes hereof, (i) "EXCESS FUNDING GUARANTOR" shall mean, in respect of any
obligations arising under the other provisions of this Section 3 (hereafter,
the "GUARANTEED OBLIGATIONS"), a Guarantor that has paid an amount in excess
of its Pro Rata Share of the Guarantied Obligations; (ii) "EXCESS PAYMENT"
shall mean, in respect of any Guarantied Obligations, the amount paid by an
Excess Funding Guarantor in excess of its Pro Rata Share of such Guarantied
Obligations; and (iii) "PRO RATA SHARE", for the purposes of this Section 3.6,
shall mean, for any Guarantor, the ratio (expressed as a percentage) of (a)
the amount by which the aggregate present fair saleable 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 (b)
the amount by which the aggregate present fair saleable value of all assets
and other properties of the Borrower and all of the Guarantors exceeds the
amount of all of the debts and liabilities (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of the Borrower and the Guarantors hereunder) of the Borrower and
all of the Guarantors, all as of the Closing Date (if any Guarantor becomes a
party hereto subsequent to the Closing Date, then for the purposes of this
Section 3.6 such subsequent Guarantor shall be deemed to have been a Guarantor
as of the Closing Date and the information pertaining to, and only pertaining
to, such Guarantor as of the date such Guarantor became a Guarantor shall be
deemed true as of the Closing Date).
Section 3.7. CONTINUING GUARANTEE.
The guarantee in this Section 3 is a continuing guarantee, and shall
apply to all Subsidiary Guaranteed Obligations whenever arising.
ARTICLE IV. REPRESENTATIONS AND WARRANTIES
In order to induce the Agent and the Banks to enter into this Agreement,
each Credit Party hereby warrants and represents to the Agent and each of the
Banks, as of the Closing Date and as of the date of funding of each Loan and
the issuance of each Letter of Credit, as follows:
Section 4.1. ORGANIZATION.
Each member of the Consolidated Group is a corporation, limited liability
company or limited partnership, as the case may be, validly existing and in
good standing under the laws of the jurisdiction of its organization, is duly
qualified to do business in every jurisdiction where such qualification is
necessary (except for jurisdictions the failure in which to qualify would not
reasonably be expected to have a Material Adverse Effect), will promptly
correct any failure to qualify upon receipt of notice of such failure, has the
power and authority to own its assets and transact the business in which it is
engaged, and has obtained all necessary certificates, franchises, and licenses
(collectively "LICENSES") for the operation of the business in which it is
engaged, except for Licenses the absence of which would not reasonably be
expected to have a Material Adverse Effect.
Section 4.2. AUTHORIZATION.
(a) The execution, delivery and performance of the Credit Documents
required to be delivered by each Credit Party
(i) are within the organizational powers of such Credit Party;
(ii) have been duly authorized by all necessary organizational
action of such Credit Party;
(iii) do not violate any provision of the Articles or
Certificate of Incorporation or Bylaws of such Credit Party or of
any law or material rule, regulation (including, without limitation,
Regulation U), order, writ, judgment, injunction, decree,
determination or award presently in effect and having applicability
to such Credit Party;
(iv) are not in conflict with and do not result in a breach of
or constitute a default under any material indenture, loan or credit
agreement, or any other material agreement, lease or instrument to
which such Credit Party is a party or by which it or its properties
may be bound or affected; and
(v) do not result in, or require the creation or imposition of,
any mortgage, deed of trust, pledge, lien, security, interest or
other charge or encumbrance of any nature upon or with respect to
any of the properties now owned or hereafter acquired by such Credit
Party, except for the encumbrances granted or to be granted to the
Agent, for the benefit of the Banks, pursuant to the Security
Agreement and the Credit Party Pledge Agreement.
(b) Except as listed on SCHEDULE 2, each member of the Consolidated
Group is in compliance with all applicable laws, rules, regulations,
writs, judgments, orders, injunctions, decrees, determinations or awards
applicable to it and is not materially in default under any indenture,
agreement, lease or instrument, where such noncompliance or default would
reasonably be expected to have a Material Adverse Effect (the term
"default" as used herein includes any Event of Default or Incipient
Default, as defined in Sections 8.1 and 5.2(a), respectively).
Section 4.3. VALIDITY.
Each Credit Document to which it is a party have been or shall be duly
executed and delivered by each Credit Party under the terms of this Agreement,
and, when so executed, constitute the legal, valid and binding obligations of
such Credit Party, enforceable against such Credit Party and the Collateral in
accordance with their terms, except as such enforcement may be limited by
applicable bankruptcy, reorganization, or similar laws affecting the
enforceability of creditors' rights in general and except for generally
applicable principles of equity (collectively, the "GENERAL EXCEPTIONS").
Section 4.4. GOVERNMENTAL APPROVALS.
No filing with or action or approval of any Governmental Authority is or
will be required under existing law in connection with the valid execution,
delivery or performance by each of the Credit Parties of the Credit Documents
to which it is a party, or in connection with the validity and enforceability
of the security interests in the Collateral, except as has been accomplished
or obtained and none of which has been or is threatened to be rejected or
revoked, and except for the filing of the financing statements required under
the Security Agreement.
Section 4.5. LITIGATION.
Except as identified on SCHEDULE 3, there are no actions, suits,
investigations or other proceedings pending or, to the knowledge of the Credit
Parties, threatened against or affecting any member of the Consolidated Group
or any of their properties before any court or Governmental Authority which,
if determined adversely to such member of the Consolidated Group, would
reasonably be expected to have a Material Adverse Effect.
Section 4.6. FINANCIAL CONDITION.
(a) The financial statements delivered to the Agent pursuant to
Section 5.1(k) fairly present the financial condition of the members of
the Consolidated Group, on a consolidated basis, as of the dates stated
therein, and the results of the operations of the members of the
Consolidated Group, on a consolidated basis, for the accounting periods
covered therein; except as stated on SCHEDULE 2, as of the Closing Date
no member of the Consolidated Group has any material contingent tax or
other liability not disclosed by or reserved against in the balance
sheets delivered as part of such financial statements; there are no
material unrealized or anticipated losses from any commitment of any
member of the Consolidated Group; and since the date and period covered
by such financial statements, there has been no circumstance, development
or event which would reasonably be expected to have a Material Adverse
Effect.
(b) As of the Closing Date, each Credit Party had a positive net
worth of at least one dollar.
Section 4.7. RECORDS, BUSINESS LOCATION AND SUBSIDIARIES.
The chief executive office and principal place of business of each of the
Credit Parties and the office where each of the Credit Parties keeps its
corporate and accounting records (including records relating to the
Collateral) is and, in the absence of 15 days' prior written notice to the
Agent will remain, located at (a) prior to October 27, 2000, 0000 Xxxxxxxxx
Xxxx., Xxxxx 000, Xxxxxxxx, Xxxxxxxx 00000, and (b) on and after October 27,
2000, 0000 X Xxxxxx, XX, 0xx Xxxxx, Xxxxxxxxxx, XX 00000. The Subsidiaries,
including all Domestic and Foreign Subsidiaries, of each of the Credit Parties
are identified on SCHEDULE 1.
Section 4.8. ERISA.
With respect to any employee benefit plan for the benefit of employees of
any member of the Consolidated Group ("PLAN") that is subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and regulations
issued pursuant to ERISA, the members of the Consolidated Group are in
compliance in all material respects with the applicable provisions of ERISA,
except as stated in SCHEDULE 2; no Plan maintained by a member of the
Consolidated Group has incurred any "accumulated funding deficiency" as
defined in Section 302 of ERISA or Section 412 of the Internal Revenue Code;
no Reportable Event as defined in Section 4043(b) of ERISA that requires
notification of the Pension Benefit Guaranty Corporation ("PBGC") has occurred
with respect to any Plan; and no provision of this Agreement will result in a
Reportable Event or violation of ERISA.
Section 4.9. ENCUMBRANCES.
None of the Collateral is subject to any Lien, except for Permitted
Liens.
Section 4.10. MARGIN STOCK.
The Employee Pledged Shares are not "margin stock" as defined by
Regulation U. No part of the 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. 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. None of the transactions contemplated by this Credit
Agreement (including, without limitation, the direct or indirect use of the
proceeds of the Loans) will violate or result in a violation of the Securities
Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended,
or regulations issued pursuant thereto, or Regulation T, U or X.
Section 4.11. GOVERNMENTAL REGULATIONS.
No member of the Consolidated Group 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 member of the
Consolidated Group is (i) an "investment company" registered or required to be
registered under the Investment Company Act of 1940, as amended, or is
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.
Section 4.12. TAXES.
Each member of the Consolidated Group has filed all United States income
tax returns and all state and municipal tax returns which are required to be
filed, and has paid, or made provision for the payment of, all taxes which
have become due pursuant to said returns or pursuant to any assessment
received by it, except such taxes, if any, as are being contested in good
faith and as to which adequate reserves have been provided or which the
failure to pay would not reasonably be expected to have a Material Adverse
Effect.
Section 4.13. BURDENSOME DOCUMENTS.
Except as identified on SCHEDULE 4, no member of the Consolidated Group
is a party to or bound by, nor are any of their respective properties or
operations materially affected by, any agreement, ordinance, decree,
regulation, order, injunction, award or judgment that, to the actual knowledge
of the Borrower's Vice President and Chief Financial Officer or General
Counsel, would reasonably be expected to have a Material Adverse Effect.
Section 4.14. ENVIRONMENTAL MATTERS.
No member of the Consolidated Group owns any real property except as
listed on SCHEDULE 5. Neither the Borrower's Vice President and Chief
Financial Officer nor its General Counsel has received any actual notice that
any property owned, leased or operated by any member of the Consolidated Group
has been listed or proposed for listing on the National Priorities List
established by the United States Environmental Protection Agency, or on any
other list developed or maintained by any federal, state or local governmental
entity and purporting to identify properties posing the threat of pollution or
contamination due to the presence of hazardous substances, nor has either
received notice or knowledge of such pollution or contamination of any
property owned, leased, or operated by any member of the Consolidated Group.
Section 4.15. EMPLOYEE LOANS; STOCK PLAN; QUALIFIED EMPLOYEE STATUS.
The Borrower's annual stock purchase plan for employees (the "STOCK
PLAN") and the Employee Loan program offered in connection therewith under the
terms and provisions of the Existing Credit Agreement, this Agreement and the
Employee Notes (the "EMPLOYEE LOAN PROGRAM") comply in all material respects
with all applicable laws. The Borrower has complied with all applicable
federal and state securities laws in its disclosure to the Qualified Employees
of the attendant risks and burdens of purchasing the Borrower's common stock
under the Stock Plan. Each person receiving an Employee Loan was at the time
of the making thereof, permitted to own common stock in the Borrower pursuant
to the Borrower's Bylaws.
Section 4.16. USE OF PROCEEDS.
Letters of Credit and all proceeds of the Revolving Credit Loans shall be
used by the Borrower for working capital, capital expenditures and general
corporate purposes, PROVIDED, HOWEVER, that proceeds of the Revolving Credit
Loans shall not be used to make payments of principal, interest, or fees under
or in connection with the Employee Loans at any time that defaults under all
or substantially all of the Employee Notes have occurred and are continuing.
Section 4.17. ACCURACY AND COMPLETENESS OF INFORMATION.
All factual information heretofore, contemporaneously or hereafter
furnished by or on behalf of any member of the Consolidated Group in writing
to the Agent or any Bank for purposes of or in connection with this Credit
Agreement or any Credit Documents, or any transaction contemplated hereby or
thereby is or will be true and accurate in all material respects on the date
as of which such information is dated or certified and not incomplete by
omitting to state any material fact necessary to make such information not
misleading at such time. There is no fact now known to the President, CEO, any
Authorized Financial Officer or the General Counsel of any member of the
Consolidated Group, after due inquiry, which has, or would have, a Material
Adverse Effect which fact has not been set forth herein, in the financials
statements previously delivered to the Agent and the Banks, or any
certificate, opinion or other written statement made or furnished by the
Borrower to the Agent.
Section 4.18. EMPLOYEE LOAN BALANCE.
As of the First Amendment Date, the aggregate outstanding principal
balance under the Employee Notes is $14,323,201.64.
ARTICLE V. CONDITIONS PRECEDENT
Section 5.1. [RESERVED].
Section 5.2. CONDITIONS PRECEDENT TO LOANS AND ISSUANCE OF LETTERS
OF CREDIT.
(a) ALL LOANS AND LETTERS OF CREDIT. As a condition precedent to the
funding of a Loan or the issuance of a Letter of Credit hereunder (a "CREDIT
EVENT"), (i) there shall exist no Event of Default or event (an "INCIPIENT
DEFAULT") which, with notice or lapse of time, or both, would constitute an
Event of Default, either immediately prior to, or after giving effect to such
Credit Event (ii) the Borrower shall have complied with all of the conditions
stated in Section 5.1, (iii) a Margin Stock Event shall not have occurred,
(iv) all necessary deliveries and filings to perfect the Agent's security
interests in the Collateral shall have been accomplished, and (v) the
representations and warranties of the Credit Parties set forth in Article IV
hereof shall be true and correct as if made and restated on the date of such
Credit Event.
(b) REVOLVING CREDIT LOANS. As a further condition precedent to the
funding of a Revolving Credit Loan, the Borrower shall request a Revolving
Credit Loan borrowing by written notice (or telephone notice promptly
confirmed in writing) to the Agent not later than 12:00 noon (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 a
borrowing (a "NOTICE OF BORROWING") shall be irrevocable and shall specify (A)
that a Revolving Credit 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
Credit Loan requested, then such notice shall be deemed to be a request for a
Base Rate Loan hereunder.
(c) FUNDING OBLIGATIONS. In no event shall the Agent or Bank of America
be required to fund any portion of the Loans requested hereunder in an amount
in excess of the actual funds received from the Banks (including Bank of
America in its capacity as a Bank) pursuant to a Notice of Borrowing.
ARTICLE VI. AFFIRMATIVE COVENANTS
Each of the Credit Parties covenants and agrees that, until all of its
obligations under the Credit Documents have been satisfied in full (or waived)
and until the Revolving Credit Commitments have been terminated:
Section 6.1. PAYMENTS HEREUNDER.
Each Credit Party shall make all payments of principal, interest, fees,
and all other payments required hereunder, under the Revolving Credit Notes,
under the Borrower Guaranty and under any other agreements with any of the
Banks to which such Credit Party is party, as and when due.
Section 6.2. EXISTENCE AND GOOD STANDING; INSURANCE; CONDUCT.
Each member of the Consolidated Group shall do or cause to be done all
things necessary, with respect to itself and each of its Subsidiaries, (a) to
preserve and keep in full force and effect its existence, employee stock
plans, rights, licenses, permits, and franchises and comply with all
applicable laws and all rules, regulations and orders of federal, state and
local regulatory bodies having jurisdiction applicable to it except for any
noncompliance with which would reasonably be expected to have a Material
Adverse Effect; (b) to maintain and protect its material assets or properties
used or useful in the conduct of its operations in a prudent manner including,
without limitation, the maintenance at all times of such insurance upon its
insurable properties, operations and professional services with reputable
insurers as would be prudent for companies in the same or similar business as
such member of the Consolidated Group; (c) to conduct its operations and
continue the conduct of its business without any substantial change in the
general nature of such operations or business from that in effect on the
Closing Date; and (d) to keep proper books of records and accounts in which
full, true and correct entries in conformity with GAAP and Requirements of Law
shall be made of all dealings and transactions in relation to its business and
activities.
Section 6.3. TAXES AND CHARGES.
Each member of the Consolidated Group shall, and shall cause each of its
Subsidiaries to, timely file returns and pay and discharge all material taxes,
assessments and governmental fees, charges or levies imposed upon it or its
income or profits or upon its properties or any part thereof, before the same
shall be in default, as well as all lawful claims which, if unpaid, might
become a lien or charge upon such properties or any part thereof; PROVIDED,
HOWEVER, that no member of the Consolidated Group shall be required to pay and
discharge or cause to be paid and discharged any such tax, assessment, charge,
levy or claim so long as the validity or amount thereof shall be contested in
good faith by appropriate proceedings and the applicable member of the
Consolidated Group shall have set aside on its books adequate reserves
therefor.
Section 6.4. FINANCIAL STATEMENTS.
The Borrower shall deliver or cause to be delivered to the Agent and the
Banks,
(a) within 120 days after the end of each fiscal year of the
Consolidated Group, (i) the annual financial statements of the
Consolidated Group, on a consolidated basis, containing a balance sheet
as at the end of such fiscal year and statements of income, cash flows,
and changes in stockholders' equity for such fiscal year, prepared in
accordance with GAAP, certified as to fair and complete presentation by
an Authorized Financial Officer and certified by independent accountants
of recognized standing acceptable to the Agent, which accountants shall
also include an opinion stating that their examination of the financial
statements was conducted in accordance with generally accepted auditing
standards and, if they have prepared a management letter as part of their
responsibilities to the Consolidated Group, a copy of such management
letter promptly upon completion of such letter; and (ii) calculations,
reviewed and certified by an Authorized Financial Officer, showing the
Credit Parties' compliance with the applicable financial standards
contained in Section 7.6;
(b) within 50 days after the end of each of the first three quarters
of each fiscal year of the Consolidated Group (except with respect to
item (b)(ii) below, which shall be required to be delivered within 50
days after the end of each of the second and third quarters of each
fiscal year of the Borrower only) (i) a balance sheet of the Consolidated
Group and related statements of income, cash flow, and net worth, all
prepared on a consolidated basis and in accordance with GAAP, and all
certified as to fair and complete presentation by an Authorized Financial
Officer as of the close of and for such period; (ii) a statement of
projected net worth and income, prepared on a consolidated basis and
certified as to fair and complete presentation by an Authorized Financial
Officer of the Borrower for the Consolidated Group's then-current fiscal
year; and (iii) calculations, reviewed and certified by an Authorized
Financial Officer, showing the Borrower's compliance with the applicable
financial standards contained in Section 7.6 hereof;
(c) no later than 120 days after the commencement of each fiscal
year of the Consolidated Group, a projected balance sheet and income
statement for such fiscal year, on a consolidated basis;
(d) concurrently with the delivery of the financial statements
referred to in Sections 6.4(a) and 6.4(b), a certificate as to the Credit
Parties' compliance with clause (viii) of the definition of "Permitted
Investments" and specifying the aggregate balance (i) credited to all
Separation Allowance Accounts and (ii) the aggregate balance of Permitted
CSAP Loans, reviewed and certified by an Authorized Financial Officer;
(e) upon the written request of the Agent and with reasonable
notice, such other financial statements and reports as the Agent may
reasonably deem necessary to provide current financial information; and
(f) concurrently with the delivery of the financial statements and
calculations required under subsections (a)-(f) of this Section, a
certificate of an Authorized Financial Officer certifying the fair and
complete presentation of the data and information used in making the
calculations and stating that such annual financial statements have been
prepared in accordance with GAAP and that there exists no Event of
Default or Incipient Default hereunder.
Section 6.5. REPORTS.
Each Credit Party shall deliver to the Agent and the Banks:
(a) as soon as reasonably possible, and, in any event, within five
Business Days after the Credit Party receives notice or knowledge thereof
or learns facts which would lead a reasonable Person to undertake
diligent inquiry, a report or statement executed by a senior officer of
the Credit Party with respect to (i) the occurrence of any Reportable
Event as defined by ERISA and regulations thereunder that requires
notification to the PBGC, (ii) the occurrence of any Event of Default or
Incipient Default or the material failure to observe or perform any
covenant set forth herein or in any other agreement with any of the Banks
to which any member of the Consolidated Group is a party, and any action
taken or contemplated with respect thereto, and (iii) (A) any pending or
threatened litigation or administrative proceedings or investigations
against or affecting any member of the Consolidated Group which, if
determined adversely to such member of the Consolidated Group, would
reasonably be expected to have a Material Adverse Effect, and (B) any
reserves set aside or to be set aside in connection with such
proceedings, in accordance with GAAP; and
(b) such other reports as the Agent may, from time to time,
reasonably request in writing from the Borrower.
Section 6.6. LOAN BALANCES.
The aggregate outstanding principal balance under the Revolving Credit
Notes, PLUS LOC Obligations will, at no time, exceed an amount equal to the
Aggregate Revolving Credit Commitment.
Section 6.7. POSITIVE NET WORTH.
Each Credit Party shall maintain at all times a positive net worth of at
least one dollar.
Section 6.8. BORROWER GUARANTY.
All Employee Loans shall be unconditionally guaranteed by the Borrower
under a guaranty in the form of Exhibit C in the full amount of the Employee
Loans (the "Borrower Guaranty").
Section 6.9. EMPLOYEE PLEDGE AGREEMENTS; EMPLOYEE PLEDGED SHARES.
(a) EMPLOYEE PLEDGE AGREEMENTS. The common stock of the Borrower
purchased or refinanced with the proceeds of the Employee Loans and all common
stock of the Parent issued in exchange therefor or otherwise in respect
thereof (the "EMPLOYEE PLEDGED SHARES") shall be pledged to Bank of America
and the Banks, to the extent of their participations, by the purchasers of the
Employee Pledged Shares pursuant to stock pledge letter agreements ("EMPLOYEE
PLEDGE AGREEMENTS") substantially in the form of Exhibit D-1 (for individual
purchasers) or D-2 (for personal holding companies).
(b) DELIVERY OF STOCK CERTIFICATES. The Borrower shall cause all
certificates and any other instruments or documents evidencing ownership of
Employee Pledged Shares, if any, to be delivered to Bank of America at the
address specified in Section 10.8 hereof, shall cause all such certificates to
be accompanied by executed assignments separate from the certificates in blank
in the form of EXHIBIT E hereto ("EMPLOYEE STOCK POWERS"), and shall cause the
following legend to be placed on all such certificates:
"In the event the shares represented by this certificate are sold,
the purchaser may be required to remit the purchase price directly to the
Company to be applied in payment of certain indebtedness of the
registered holder to Bank of America, N.A., as agent for itself and
certain other banks."
(c) BOOK ENTRIES. With respect to any Employee Pledged Stock that is not
evidenced by any certificates or other instruments or documents, the Parent
shall (i) xxxx its books and records to reflect the security interest granted
to the Agent in the Employee Pledged Stock and (ii) execute and deliver such
control agreements and other agreements and documents as the Agent may
reasonable request to perfect, protect and maintain the security interest
granted to the Agent in the Employee Pledged Stock.
Section 6.10. ADDITIONAL GUARANTIES, STOCK PLEDGES AND FURTHER
ASSURANCES.
(a) DOMESTIC SUBSIDIARIES, ETC.. At any time any Person becomes a
Material Domestic Subsidiary of the Parent, the Borrower shall promptly notify
the Agent thereof, and shall (i) promptly cause such Domestic Subsidiary to
become a Guarantor by execution of a Joinder Agreement, (ii) deliver with the
Joinder Agreement, supporting resolutions, incumbency certificates, corporate
formation and organizational documentation and opinions of counsel as the
Agent may reasonably request, and (iii) deliver stock certificates and related
pledge agreements or pledge joinder agreements evidencing the pledge of 100%
of the Voting Stock of such Domestic Subsidiary and all Material Domestic
Subsidiaries of such Domestic Subsidiary and, upon the request of the Agent or
the Majority Banks, 65% of the Voting Stock of all Foreign Subsidiaries of
such Domestic Subsidiary and such other ownership interests of such Domestic
Subsidiary in foreign Persons, together, in each case, with undated stock or
other transfer powers executed in blank.
(b) FOREIGN SUBSIDIARIES, ETC.. At any time any Person becomes a Foreign
Subsidiary or the Borrower or any Guarantor shall acquire an ownership
interest in any foreign Person, the Borrower shall promptly notify the Agent
thereof, and shall, upon request of the Agent or the Majority Banks, (i)
deliver supporting resolutions, incumbency certificates, corporation formation
and organizational documentation and opinions of counsel, and (ii) deliver
stock certificates or other evidence of ownership (where required for
perfection under local law) and a related pledge agreement evidencing the
pledge of 65% of the Voting Stock of such Foreign Subsidiary or, if less, all
of the ownership interests in such other Person acquired by the Borrower or
any such Guarantor, together with undated stock or other transfer powers
executed in blank.
(c) FURTHER ASSURANCES. Each Credit Party shall, and shall cause each of
its Subsidiaries to, take such action at its own expense as requested by the
Agent, to ensure that the Agent has a first priority perfected lien to secure
the Obligations in all personal property of the Credit Parties located in the
United States and Canada and, to the extent deemed material by the Agent or
the Majority Banks, in its or their sole reasonable discretion, all other
personal property of the Credit Parties now or hereafter owned or acquired by
the Credit Parties. 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.
Section 6.11. ADDITIONAL GUARANTIES, STOCK PLEDGES AND FURTHER
ASSURANCES.
With respect to each Employee Loan which will not be repaid in full in
connection with the sale of Employee Pledged Shares in the IPO, the Parent
shall cause to be delivered to the Agent within fifty (50) days of the First
Amendment Date, (i) the stock certificate(s), if any, issued to the Qualified
Employee by the Parent in connection with the IPO and an undated Employee
Stock Power for each such stock certificate executed in blank, (ii) a new
Employee Note in the form of EXHIBIT B Executed by the Qualified Employee, and
(iii) a new Employee Pledge Agreement in the form of Exhibit D-1 (for
individual purchasers) or D-2 (for personal holding companies) executed by the
Qualified Employee (provided that in the case of any Employee Pledged Shares
pledged by a personal holding company, the Employee Stock Power, Employee Note
and Employee Pledge Agreement shall have been executed by such personal
holding company and by the Qualified Employee, as appropriate). Each Credit
Party agrees that in the event the items described in clauses (i), (ii) and
(iii) above are not delivered to the Agent by the date fifty (50) days
following the First Amendment Date, the Borrower shall immediately repay in
full the Employee Loans of each Qualified Employee for which such items were
not delivered to the Agent by such date.
Section 6.12. FURTHER ASSURANCES IN CONNECTION WITH RESTRUCTURING.
Within thirty (30) days after the IPO, the Parent shall deliver (or cause
to be delivered) to the Administrative Agent the following items:
(a) (i) a pledge joinder agreement in form and substance satisfactory to
the Administrative Agent pursuant to which the Parent pledges all of its
ownership interest in the Borrower pursuant to the terms of the Pledge
Agreement and (ii) the stock certificates evidencing the ownership interest of
the Parent in the Borrower, together with related undated stock powers
executed in blank;
(b) (i) a copy of the articles or certificates of incorporation or other
charter documents of the Parent, as amended and/or restated in connection with
the IPO, certified to be true and complete as of a recent date by the
appropriate governmental authority of the state of incorporation of the Parent
and certified by a secretary or assistant secretary of the Parent to be true
and correct as of the date of delivery; and (ii) a copy of the bylaws of the
Parent, as amended and/or restated in connection with the IPO, certified by a
secretary or assistant secretary of the Parent to be true and correct and in
force and effect as of the date of delivery; and
(c) (i) a copy of the articles or certificates of incorporation or other
charter documents of the Borrower, as amended and/or restated in connection
with the IPO, certified to be true and complete as of a recent date by the
appropriate governmental authority of the state of incorporation of the
Borrower and certified by a secretary or assistant secretary of the Parent to
be true and correct as of the date of delivery; and (ii) a copy of the bylaws
of the Borrower, as amended and/or restated in connection with the IPO,
certified by a secretary or assistant secretary of the Borrower to be true and
correct and in force and effect as of the date of delivery.
ARTICLE VII. NEGATIVE COVENANTS
Each of the Credit Parties covenants and agrees that, until such time as
all obligations under the Credit Documents have been satisfied in full (or
waived) and until the Revolving Credit Commitments have been terminated:
Section 7.1. INDEBTEDNESS.
No member of the Consolidated Group shall contract, create, incur, assume
or permit to exist any Indebtedness, except:
(a) Indebtedness arising or existing under this Credit Agreement and
the other Credit Documents;
(b) Indebtedness outstanding on the date hereof and set forth in
Schedule 6, and renewals, refinancings and extensions thereof on terms
and conditions no less favorable than for such existing Indebtedness;
(c) Indebtedness to any Interest Swap Provider relating to the
obligations hereunder;
(d) purchase money Indebtedness (including obligations in respect of
Capital Leases) hereafter incurred to finance the purchase of fixed
assets, PROVIDED that (i) the total of all such Indebtedness (including
any such Indebtedness referred to in Section (b) above) shall not exceed
an aggregate principal amount of $1,000,000 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;
(e) unsecured Indebtedness incurred in connection with any
acquisition or Investment permitted under Section 7.3(c) hereof;
(f) guaranty and other contingent obligations of the Borrower in
favor of its Subsidiaries in connection with Indebtedness permitted under
this Section 7.1.
Section 7.2. LIENS.
No member of the Consolidated Group shall contract, create, incur, assume
or permit to exist any Lien with respect to any of their respective property
or assets of any kind (whether real or personal, tangible or intangible),
whether now owned or hereafter acquired, except for Permitted Liens.
Section 7.3. CONSOLIDATION, MERGER, SALE OR PURCHASE OF ASSETS, ETC.
No member of the Consolidated Group shall:
(a) Enter into a transaction of merger or consolidation, EXCEPT (i) a
member of the Consolidated Group (other than the Parent) may be a party to a
transaction of merger or consolidation with another member of the Consolidated
Group (other than the Parent) and (ii) any acquisition permitted pursuant to
clause (c) immediately below may be effected by a merger with and into a
Credit Party (other than the Parent) or Subsidiary of a Credit Party so long
as, in either case, (A) if the Borrower is a party thereto, the Borrower shall
be the surviving corporation, (B) if a Subsidiary Guarantor is a party thereto
and the Borrower is not a party thereto, the Subsidiary Guarantor shall be the
surviving corporation, and (C) no Incipient Default or Event of Default shall
exist either immediately prior to or immediately after giving effect thereto;
(b) Sell, lease, transfer or otherwise dispose of assets, property and/or
operations (including any sale-leaseback transaction, but excluding (x) the
sale of inventory in the ordinary course of business and (y) the sale or
disposition of plant, property and equipment which is no longer useful in the
business or as to which the proceeds therefrom are reinvested in plant,
property and equipment within six months thereof, unless
(i) the book value of such assets, property and/or operations do not
in the aggregate exceed $5,000,000 in any fiscal year, and
(ii) no Incipient Default or Event of Default exists or would exist
after giving effect thereto on a Pro Forma Basis,
without the prior written consent of the Majority Banks;
(c) Acquire all or any portion of the capital stock or other ownership
interest in any Person or all or any substantial portion of the assets,
property and/or operations of any Person (each such acquisition, an
"ACQUISITION"), without the prior written consent of the Majority Banks,
UNLESS
(i) the total cash consideration (including Indebtedness assumed)
for all Acquisitions shall not exceed $20,000,000 in the aggregate in any
fiscal year; and
(ii) the total consideration (cash and non-cash, including, without
limitation, Indebtedness assumed, the amount of contingent obligations
(including, without limitation, obligations to make earn-out payments)
incurred, and the fair value of capital stock of the Borrower issued) for
any single Acquisition (or series of related Acquisitions) shall not
exceed $50,000,000; and
(iii) the total consideration (cash and non-cash, including, without
limitation, Indebtedness assumed, the amount of contingent obligations
(including, without limitation, obligations to make earn-out payments)
incurred, and the fair value of capital stock of the Borrower issued to
the seller) for all Acquisitions shall not exceed $100,000,000 in the
aggregate in any fiscal year; and
(iv) the Board of Directors (or its equivalent) of the Person which
is the subject of the acquisition shall have approved the acquisition;
and
(v) no Incipient Default or Event of Default would exist after
giving effect thereto on a Pro Forma Basis; or
(d) In the case of the Parent, the Borrower and any Material Subsidiary
which is not wholly-owned, liquidate, wind-up or dissolve, whether voluntarily
or involuntarily (or suffer to permit any such liquidation or dissolution).
Section 7.4. FISCAL YEAR; GOVERNING DOCUMENTS.
None of the Credit Parties shall (a) change its fiscal year, unless (i)
required to do so by law, (ii) 60 days' advance written notice thereof is
given to the Agent, and (iii) covenants and agreements in this Agreement are
amended as appropriate to accommodate such change, (b) amend or alter its
certificate of incorporation in a manner materially adverse to the interests
of the Lenders or (c) amend or alter its Bylaws in a manner materially adverse
to the interests of the Lenders.
Section 7.5. INVESTMENTS.
No member of the Consolidated Group shall lend money or extend credit or
make advances to any Person, or purchase or acquire any stock, obligations or
securities of, or any other interest in, or make any capital contribution to,
or otherwise make an Investment in, any Person except for Permitted
Investments.
Section 7.6. FINANCIAL COVENANTS.
The Borrower shall not:
(a) As of the end of each fiscal quarter, cause or suffer Net Worth to be
less than the the sum of $60,000,000, increased on a cumulative basis as of
the end of each fiscal year, commencing with the fiscal year ending June 30,
2001, by an amount equal to 50% of Consolidated Net Income (to the extent
positive) for the fiscal year then ended.
(b) As of the end of each fiscal quarter, cause or suffer the Fixed
Charge Coverage Ratio to be less than 1.5 to 1 for the immediately preceding
four fiscal quarters as of each Calculation Date.
(c) As of the end of each fiscal quarter, cause or suffer the Leverage
Ratio to be greater than 2.5 to 1.0 for the immediately preceding four fiscal
quarters as of each Calculation Date.
Section 7.7. FRANCHISES.
No member of the Consolidated Group shall suffer the final revocation,
suspension, material amendment or termination of any franchise, agreement,
permit, or license as a result of which it is reasonably likely to suffer a
Material Adverse Effect.
Section 7.8. CAPITAL EXPENDITURES.
The members of the Consolidated Group shall not incur Capital
Expenditures in excess of $40,000,000 in the aggregate in any fiscal year
PLUS, for fiscal years occurring after the current fiscal year, the unused
portion from the immediately preceding fiscal year beginning with the first
fiscal year to occur after the Closing Date.
Section 7.9. TRANSACTION WITH AFFILIATES.
No member of the Consolidated Group shall enter into or permit to exist
any transaction or series of transactions with any officer, director,
shareholder, subsidiary or Affiliate of such Person other than (a)
transactions permitted by Section 7.1, Section 7.2, Section 7.3 or Section
7.5, (b) normal compensation and reimbursement of expenses of officers and
directors, (c) provision of financial and other services and the sharing of
know-how, technology and office space in the ordinary course of business, and
(d) except as otherwise specifically limited in this Agreement, other
transactions which are entered into in the ordinary course of such Person's
business on terms and conditions substantially as favorable to such Person as
would be obtainable by it in a comparable arms-length transactions with a
Person other than an officer, director, shareholder, subsidiary or Affiliate.
Section 7.10. LIMITATION ON RESTRICTIONS ON SUBSIDIARY DIVIDENDS AND
OTHER DISTRIBUTIONS, ETC.
No member of the Consolidated Group shall, 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 Person to (a) pay dividends or make any other distribution on any of
such Person's capital stock, (b) subject to subordination provisions, pay any
Indebtedness owed to the Borrower, (c) make loans or advances to the Borrower
or (d) transfer any of its property to the Borrower, 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
the Borrower in accordance with Section 7.5, 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 the Borrower and
was not entered into in contemplation of such Person becoming a Subsidiary of
the Borrower and (iii) this Agreement and the other Credit Documents.
Section 7.11. ISSUANCE AND SALE OF SUBSIDIARY STOCK.
No member of the Consolidated Group will, except to qualify directors or
other nominees (of nominal amounts of stock) where required by applicable law,
sell, transfer or otherwise dispose of, any shares of capital stock of any of
its Subsidiaries or permit any of its Subsidiaries to issue, sell or otherwise
dispose of, any shares of capital stock of any of its Subsidiaries to any
Person other than a Credit Party.
Section 7.12. LIMITATIONS ON PARENT.
Notwithstanding any other provisions of this Credit Agreement to the
contrary, the Parent shall not (a) hold any assets other than (i) the capital
stock of the Borrower and (ii) the capital stock of a special purpose
Subsidiary that does not have, and will not incur, any liabilities other than
(A) Indebtedness arising under the Credit Documents, (B) intercompany
Indebtedness to the extent permitted by Section 7.5, (C) tax liabilities in
the ordinary course of business and (D) corporate, administrative and
operating expenses in the ordinary course of business, (b) have any
liabilities other than (i) the liabilities under the Credit Documents,
(ii) tax liabilities in the ordinary course of business, (iii) corporate,
administrative and operating expenses in the ordinary course of business and
(iv) intercompany Indebtedness to the extent permitted by Section 7.5, or
(C) engage in any business other than (i) owning the capital stock of the
Borrower and activities incidental or related thereto and (ii) acting as a
Guarantor hereunder and pledging its assets to the Agent, for the benefit of
the Banks, pursuant to the Credit Documents.
ARTICLE VIII. DEFAULT
Section 8.1. EVENTS OF DEFAULT.
Each of the following events shall constitute an "EVENT OF DEFAULT"
hereunder if such event shall not be remedied within the time period set forth
below:
(a) The Borrower shall fail to pay (i) any amount of principal
(except required prepayments) hereunder or under the Revolving Credit
Notes when due and payable, or (ii) any amount of interest or required
prepayment of principal or fee required to be paid hereunder, within five
days after the date when due and payable;
(b) Any member of the Consolidated Group shall fail to pay any
Indebtedness in excess of $3,000,000 (other than under this Agreement)
when due (whether by scheduled maturity, by required prepayment, by
acceleration, by demand or otherwise), shall fail to meet its obligations
under the terms of the Borrower Guaranty or any other material guaranty
when called upon to do so, or shall fail to perform any material term,
covenant or agreement on its part to be performed under any agreement or
instrument evidencing or securing or relating to any such Indebtedness or
guaranty when required to be performed, if the effect of any such failure
is to accelerate, or to permit the holder or holders of such Indebtedness
or the trustee under any such agreement or instrument to accelerate, the
maturity of such Indebtedness or of any obligation guaranteed by a member
of the Consolidated Group, and the member of the Consolidated Group has
not cured such failure within the grace period provided by the applicable
agreement or instrument, whether or not such holders or trustees elect to
exercise such remedy or to waive such failure;
(c) Any representation or warranty made by any Credit Party herein
or in any certificate, agreement, instrument, report or statement
contemplated by or made or delivered pursuant to or in connection
herewith or any other agreement with any of the Banks to which such
Credit Party is a party, shall be, at the time of the making or deemed
making of such representation or warranty, incorrect in any material
respect;
(d) Any Credit Party shall fail to observe or perform any covenant
or agreement contained in (i) Section 2.6 (as it pertains to Employee
Notes), Section 2.8(b), the organizational existence clause of Section
6.2(a), Section 6.4, Section 6.5(a), Section 6.11 or Sections 7.1, 7.2,
7.3, 7.5, 7.6, 7.9, 7.11 and 7.12, or (ii) any other Section of this
Agreement and such failure shall continue for more than 20 days after the
Borrower shall have notice, knowledge or reason to know of any cause
giving rise to such failure;
(e) The Parent, the Borrower or any Material Subsidiary shall
generally not pay its debts as they become due or admit in writing its
inability generally so to pay its debts, make a material assignment for
the benefit of creditors, seek an order for relief in bankruptcy, become
insolvent within the meaning of the Federal Bankruptcy Code, petition or
apply to any tribunal for the appointment of any receiver, custodian,
liquidator, trustee, or similar official (hereinafter "OFFICIAL") for it
or any substantial part of its property, commence any proceeding relating
to it under any bankruptcy, reorganization, arrangement, readjustment of
debt, dissolution or liquidation law or statute of any jurisdiction
(including, without limitation, the Federal Bankruptcy Code) or there
shall be commenced against the Parent, the Borrower or any Material
Subsidiary any such proceeding which remains unstayed or undismissed for
a period of 60 days, or the Parent, the Borrower or any Material
Subsidiary shall consent to, approve of or acquiesce in any such
proceeding or the appointment of any such Official;
(f) Any member of the Consolidated Group shall suffer the entry of
judgment against it by any court of record having jurisdiction over it or
any of its properties for the payment of money, if the aggregate of all
such judgments outstanding against the members of the Consolidated Group,
on a consolidated basis, is in excess of $3,000,000, or shall suffer the
issuance of a writ of attachment of any material portion of its assets,
and the applicable member of the Consolidated Group shall not discharge
the same, fully bond or insure against its discharge, provide for its
discharge in accordance with its terms, or procure a stay of execution
thereon within 45 days from the date of entry thereof, unless execution
thereon is effectively stayed pending further proceedings;
(g) Any security interest or lien granted or reaffirmed in the
Security Agreement or the Credit Party Pledge Agreement in any material
portion of the Collateral shall, in any material respect, for any reason
cease to be a valid and perfected security interest, encumbrance or lien
having first priority as provided therein;
(h) Any Reportable Event (as defined in Section 4043 of ERISA) that
requires notification to the PBGC and which the Agent determines in good
faith might constitute grounds for the termination of any Plan covered by
Title IV of ERISA or for the appointment by the appropriate United States
District Court of a trustee to administer any such Plan shall have
occurred and be continuing 45 days after written notice to such effect
shall have been given to the Borrower by the Agent, or any such Plan
shall be terminated, or a trustee shall be appointed by an appropriate
United States District Court to administer any such Plan, or the PBGC
shall institute proceedings to terminate any such Plan or to appoint a
trustee to administer any such Plan, and in any such case the aggregate
amount of vested unfunded liabilities under such Plan shall exceed
$3,000,000;
(i) Defaults under all or substantially all of the Employee Notes
have occurred and are continuing;
(j) The Borrower Guaranty shall be held invalid or unenforceable
against the Borrower, or the Borrower shall deny or disaffirm its
obligations thereunder;
(k) Except to the extent permitted under this Credit Agreement, the
guaranty given by any Guarantor hereunder or any material provision
thereof shall cease to be in full force and effect, or any Guarantor
hereunder or any Person acting by or on behalf of such Guarantor shall
deny or disaffirm such Guarantor's obligations under such guaranty, or
any Guarantor shall default in the due performance or observance of any
term, covenant or agreement on its part to be performed or observed
pursuant to such guaranty; or
(l) A Change of Control shall occur.
Section 8.2. ACCELERATION.
Upon the occurrence of any Event of Default, the Majority Banks, by
written notice to the Agent and the Borrower, may terminate the Revolving
Credit Commitments and instruct the Agent to declare the entire Indebtedness
of the Credit Parties then outstanding hereunder or under the Notes
immediately due and payable (including the payment of cash collateral as
additional security for the LOC Obligations) without presentment, demand,
protest, notice of protest or any other notice of any kind, all of which are
hereby expressly waived. Notwithstanding the foregoing provisions of this
section, the entire Indebtedness of the Credit Parties then outstanding
hereunder or under the Notes shall become immediately due and payable (and the
Borrower shall pay one hundred percent cash collateral as additional security
for the LOC Obligations) and the Revolving Credit Commitments shall terminate,
without notice or election of any kind and without need for any action by the
Banks or the Agent, if an Event of Default specified in Section 8.1(e) hereof
shall occur. The Banks shall have no obligation to make any Loans or disburse
any loan proceeds during the existence of any Event of Default or Incipient
Default.
Section 8.3. RIGHT OF SETOFF.
Upon the occurrence and during the continuance of any Event of Default
not cured in accordance with this Agreement, each of the Banks is hereby
authorized at any time and from time to time, without notice to the Credit
Parties (any such notice being hereby expressly waived by the Credit Parties),
to set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held, and any other Indebtedness at any time
owing, by such Bank to or for the credit or the account of any Credit Party
against all of the obligations of such Credit Party, irrespective of whether
or not the Agent shall have made any demand under this Agreement or the Notes,
and although such obligations may be unmatured. All amounts set off by a Bank
pursuant to this Section shall be applied to all of the Credit Party's
obligations to such Bank, including those under or in connection with this
Agreement, and to such Bank's Employee Loan Participation pro rata in
accordance with the amount then outstanding under each such obligation. For
purposes of this Section, each of the Banks shall be considered to be a
"creditor" under the Federal Bankruptcy Code with respect to this Agreement,
the Revolving Credit Notes, the Employee Notes and the Borrower Guaranty. The
Banks agree to act in good faith and promptly to notify the affected Credit
Party after any such setoff and application, provided that the failure to give
such notice shall not affect the validity of such setoff and application. The
rights of the Banks under this Section are in addition to other rights and
remedies (including, without limitation, other rights of setoff) which the
Banks may have.
ARTICLE IX. AGENCY PROVISIONS
Section 9.1. APPOINTMENT.
Each Bank hereby designates and appoints Bank of America, N.A. as
administrative agent of such Bank to act as specified herein and the other
Credit Documents, and each such Bank hereby authorizes the Agent, as Agent for
such Bank, to take such action on its behalf under the provisions of this
Credit Agreement and the other Credit Documents and to exercise such powers
and perform such duties as are expressly delegated by the terms hereof and of
the other Credit Documents, together with such other powers as are reasonably
incidental thereto. Each Bank further directs and authorizes the Agent to
execute releases (or similar agreements) to give effect to the provisions of
this Credit Agreement and the other Credit Documents, including specifically
without limitation the provisions of Section 7.3 hereof. Notwithstanding any
provision to the contrary elsewhere herein and in the other Credit Documents,
the Agent shall not have any duties or responsibilities, except those
expressly set forth herein and therein, or any fiduciary relationship with any
Bank, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Credit Agreement or any of
the other Credit Documents, or shall otherwise exist against the Agent. The
provisions of this Section are solely for the benefit of the Agent and the
Banks and none of the Credit Parties shall have any rights as a third party
beneficiary of the provisions hereof. In performing its functions and duties
under this Credit Agreement and the other Credit Documents, the Agent shall
act solely as Agent of the Banks and does not assume and shall not be deemed
to have assumed any obligation or relationship of agency or trust with or for
any Credit Party or any of their respective Affiliates.
Section 9.2. DELEGATION OF DUTIES.
The Agent may execute any of its duties hereunder or under the other
Credit Documents by or through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such
duties. The Agent shall not be responsible for the negligence or misconduct of
any agents or attorneys-in-fact selected by it with reasonable care.
Section 9.3. EXCULPATORY PROVISIONS.
The Agent and its officers, directors, employees, agents,
attorneys-in-fact or affiliates shall not be (i) liable for any action
lawfully taken or omitted to be taken by it or such Person under or in
connection herewith or in connection with any of the other Credit Documents
(except for its or such Person's own gross negligence or willful misconduct),
or (ii) responsible in any manner to any of the Banks for any recitals,
statements, representations or warranties made by any of the Credit Parties
contained herein or in any of the other Credit Documents or in any
certificate, report, document, financial statement or other written or oral
statement referred to or provided for in, or received by the Agent under or in
connection herewith or in connection with the other Credit Documents, or
enforceability or sufficiency therefor of any of the other Credit Documents,
or for any failure of any Credit Party to perform its obligations hereunder or
thereunder. The Agent shall not be responsible to any Bank for the
effectiveness, genuineness, validity, enforceability, collectability or
sufficiency of this Agreement, or any of the other Credit Documents or for any
representations, warranties, recitals or statements made herein or therein or
made by the Borrower or any other Credit Party in any written or oral
statement or in any financial or other statements, instruments, reports,
certificates or any other documents in connection herewith or therewith
furnished or made by the Agent to the Bank or by or on behalf of the Credit
Parties to the Agent or any Bank or be required to ascertain or inquire as to
the performance or observance of any of the terms, conditions, provisions,
covenants or agreements contained herein or therein or as to the use of the
proceeds of the Loans or the use of the Letters of Credit or of the existence
or possible existence of any Incipient Default or Event of Default or to
inspect the properties, books or records of the Credit Parties or any of their
respective Affiliates.
Section 9.4. RELIANCE ON COMMUNICATIONS.
The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to any of the Credit Parties, independent accountants and
other experts selected by the Agent with reasonable care). The Agent may deem
and treat the Banks as the owners of their respective interests hereunder for
all purposes unless a written notice of assignment, negotiation or transfer
thereof shall have been filed with the Agent in accordance with Section
10.2(b) hereof. The Agent shall be fully justified in failing or refusing to
take any action under this Agreement or under any of the other Credit
Documents unless it shall first receive such advice or concurrence of the
Majority Banks as it deems appropriate or it shall first be indemnified to its
satisfaction by the Banks against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action.
The Agent shall in all cases be fully protected in acting, or in refraining
from acting, hereunder or under any of the other Credit Documents in
accordance with a request of the Majority Banks (or to the extent specifically
provided in Section 10.10, all the Banks) and such request and any action
taken or failure to act pursuant thereto shall be binding upon all the Banks
(including their successors and assigns).
Section 9.5. NOTICE OF DEFAULT.
The Agent shall not be deemed to have knowledge or notice of the
occurrence of any Incipient Default or Event of Default hereunder unless the
Agent has received notice from a Bank or a Credit Party referring to the
Credit Document, describing such Incipient 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, the Agent shall give prompt notice thereof to the
Banks. The Agent shall take such action with respect to such Incipient Default
or Event of Default as shall be reasonably directed by the Majority Banks.
Section 9.6. NON-RELIANCE ON AGENT AND OTHER BANKS.
Each Bank expressly acknowledges that each of the Agent and its officers,
directors, employees, agents, attorneys-in-fact or affiliates has not made any
representations or warranties to it and that no act by the Agent or any
affiliate thereof hereinafter taken, including any review of the affairs of
any Credit Party or any of their respective Affiliates, shall be deemed to
constitute any representation or warranty by the Agent to any Bank. Each Bank
represents to the Agent that it has, independently and without reliance upon
the Agent or any other Bank, and based on such documents and information as it
has deemed appropriate, made its own appraisal of and investigation into the
business, assets, operations, property, financial and other conditions,
prospects and creditworthiness of the Borrower, the other Credit Parties or
their respective Affiliates and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Bank also represents that it
will, independently and without reliance upon the Agent or any other Bank, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement, and to make such
investigation as it deems necessary to inform itself as to the business,
assets, operations, property, financial and other conditions, prospects and
credit-worthiness of the Borrower, the other Credit Parties and their
respective Affiliates. Except for notices, reports and other documents
expressly required to be furnished to the Banks by the Agent hereunder, the
Agent shall not have any duty or responsibility to provide any Bank with any
credit or other information concerning the business, operations, assets,
property, financial or other conditions, prospects or creditworthiness of the
Borrower, the other Credit Parties or any of their respective Affiliates which
may come into the possession of the Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates.
Section 9.7. INDEMNIFICATION.
The Banks agree to indemnify the Agent in its capacity as such (to the
extent not reimbursed by the Borrower and without limiting the obligation of
the Borrower to do so), ratably according to their respective Revolving Credit
Commitments (or if the Revolving Credit Commitments have expired or been
terminated, in accordance with the respective principal amounts of outstanding
Loans and participation interests of the Banks), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever which may at
any time (including without limitation at any time following the final payment
of all of the obligations of the Borrower hereunder and under the other Credit
Documents) be imposed on, incurred by or asserted against the Agent in its
capacity as such in any way relating to or arising out of this Agreement or
the other Credit Documents or any documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby or any
action taken or omitted by the Agent under or in connection with any of the
foregoing; PROVIDED that no Bank shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the gross
negligence or willful misconduct of the Agent. If any indemnity furnished to
the Agent for any purpose shall, in the opinion of the Agent, be insufficient
or become impaired, the Agent may call for additional indemnity and cease, or
not commence, to do the acts indemnified against until such additional
indemnity is furnished. The agreements in this Section shall survive the
repayment of the Loans, LOC Obligations and other obligations under the Credit
Documents and the termination of the Revolving Credit Commitments hereunder.
Section 9.8. AGENT IN ITS INDIVIDUAL CAPACITY.
The Agent and its affiliates may make loans to, accept deposits from and
generally engage in any kind of business with the members of the Consolidated
Group or their respective Affiliates as though the Agent were not the Agent
hereunder. With respect to the Loans made by and all obligations of the
Borrower hereunder and under the other Credit Documents, the Agent shall have
the same rights and powers under this Agreement as any Bank and may exercise
the same as though it were not the Agent, and the terms "Bank" and "Banks"
shall include the Agent in its individual capacity.
Section 9.9. SUCCESSOR AGENT.
The Agent may, at any time, resign upon 20 days' written notice to the
Banks, and may be removed, upon show of cause, by the Majority Banks upon 30
days' written notice to the Agent. Upon any such resignation or removal, the
Majority Banks shall have the right to appoint a successor Agent. If no
successor Agent shall have been so appointed by the Majority Banks, and shall
have accepted such appointment, within 30 days after the notice of resignation
or notice of removal, as appropriate, then the retiring Agent shall select a
successor Agent provided such successor is a Bank hereunder or a commercial
bank organized under the laws of the United States of America or of any State
thereof and has a combined capital and surplus of at least $400,000,000. Upon
the acceptance of any appointment as Agent hereunder by a successor, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations as Agent, as
appropriate, under this Agreement and the other Credit Documents and the
provisions of this Section 9.9 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement.
ARTICLE X. MISCELLANEOUS
Section 10.1. RIGHTS AND WAIVERS.
All rights, remedies and powers granted to the Agent or the Banks herein
or in any other Credit Document, whether express or implied, shall be
cumulative and may be exercised singly or concurrently with such other rights
as the Agent or the Banks may have, and shall include, without limitation, the
right to apply to a court of equity for any injunction to restrain a breach or
threatened breach of this Agreement and all rights as stated in Article VIII
hereof. No failure or delay on the part of the Agent or the Banks in
exercising any right, power or privilege hereunder or under any other Credit
Document, or under applicable law, shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power or privilege
hereunder or thereunder preclude any other or further exercise thereof or the
exercise of any other right, power, or privilege. No waiver or modification of
any right, power or privilege of the Agent or the Banks or of any obligation
of the Borrower or any other Credit Party shall be effective unless such
waiver or modification is in writing, signed by the Agent or the Banks, as
required herein, and then only to the extent set forth therein. A waiver by
the Agent or the Banks of any right, power or privilege hereunder or under any
other Credit Document on any one occasion shall not be construed as a bar to,
or a waiver of, any such right, power or privilege which the Agent or the
Banks otherwise would have on any subsequent occasion. Neither the Agent nor
the Banks shall have any liability to the Borrower or any other Credit Party
for failure to fund any loan on the date set for such funding if such failure
is due to forces or circumstances beyond the control of the Banks, including,
without limitation, Acts of God, concerted work stoppages, or delays in wire
transfer systems.
Section 10.2. BINDING EFFECT; ASSIGNMENT.
(a) This Agreement shall bind and inure to the benefit of the
parties, their legal representatives, successors and assigns, except that
neither the Borrower nor any Guarantor may assign or transfer its rights
hereunder or any interests herein without the prior written consent of
all the Banks.
(b) Each Bank may assign all or a portion of its rights and
obligations hereunder (including, without limitation, all or a portion of
its Revolving Credit Commitments or its Loans) to (i) a Bank, (ii) an
affiliate of a Bank or (iii) any other commercial bank or financial
institution reasonably acceptable to the Agent and, so long as no Default
or Event of Default has occurred and is continuing, the Borrower (the
consent of the Borrower shall not be unreasonably withheld or delayed and
such consent shall be deemed given if the Borrower does not notify the
assigning Bank and the Agent of any objection within two Business Days
after the Borrower has been provided notice of the proposed assignment by
the assigning Bank or the Agent); PROVIDED that (i) any such assignment
shall be in a minimum aggregate amount of $5,000,000 (or, if less, the
remaining amount of the Revolving Credit Commitment of the assigning
Bank) of the Revolving Credit Commitments and in integral multiples of
$1,000,000 above such amount and (ii) any such assignment shall be of a
constant, not varying, percentage of all the assigning Bank's rights and
obligations under this Agreement. Upon receipt by the assigning Bank of
the Agent's and Borrower's (provided no Default or Event of Default has
occurred and is continuing) written consent, the execution and delivery
to the Agent of an assignment agreement between the assigning Bank and
the assignee, the delivery to the Agent of a transfer fee of $3,500
payable to the Agent for its own account, and the making of any payment
by the assignee required by the assigning Bank, this Agreement shall be
deemed to be amended to the extent, and only to the extent, necessary to
reflect the addition of such assignee, and the assignee shall for all
purposes be a Bank party hereto and shall have, to the extent of such
assignment, the same rights and obligations as a Bank hereunder. Upon the
consummation of any assignment, the assigning Bank shall be relieved from
its obligations hereunder to the extent of the obligations so assigned.
Notwithstanding anything herein to the contrary, nothing herein shall
prevent an assignment by any Bank to a Federal Reserve Bank in support of
borrowings made by such Bank from such Federal Reserve Bank.
(c) Each Bank may grant participations in all or any part of its
Revolving Credit Loans and may grant subparticipations in all or any part
of its Employee Loan Participations to any commercial bank or other
financial institution. Each participation shall be in an amount equal to
or in excess of $5,000,000. A participant shall not have any rights under
this Agreement or any other document delivered in connection herewith
(the participant's rights against the Bank in respect of such
participation to be those set forth in the agreement executed by the Bank
in favor of the participant relating thereto, which agreement with
respect to such participation shall not restrict the Bank's ability to
make any modification, amendment or waiver to this Agreement without the
consent of the participant, except that the Bank may agree with any
participant that the Bank will not, without such participant's consent,
(i) extend or increase the amount of the Revolving Credit Commitments or
the Employee Loan Participations, (ii) agree to extend the final maturity
of the Notes, (iii) agree to reduce the principal amount of, or rate of
interest on, the Notes, (iv) except as the result of or in connection
with a disposition permitted under Section 7.3(b), agree to release all
or substantially all of the Collateral, and (v) except as permitted under
Section 7.3(a) or (b), agree to release the Borrower or all or
substantially all of the Guarantors from its or their respective
obligations under the Credit Documents). All amounts payable by the
Borrower under this Agreement shall be determined as if a Bank had not
sold such participation. The Borrower acknowledges and agrees that any
participant described in this Section 10.2 will, for purposes of Sections
2.12, 2.14, 2.16 and 2.17, be deemed to be a Bank hereunder, provided
that such participant shall not be entitled to receive any more than the
Bank would have received had such participation not been made. In the
event of any such sale by a Bank of participating interests to a
participant, such Bank's obligations under this Agreement shall remain
unchanged, such Bank shall remain solely responsible for the performance
thereof, such Bank shall remain the holder of any obligation for all
purposes under this Agreement, and the Borrower shall continue to deal
solely and directly with such Bank in connection with the Bank's rights
and obligations under this Agreement.
Section 10.3. SEVERABILITY.
Any provision of this Agreement prohibited by the laws of any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition, or modified to conform with such laws, without invalidating
the remaining provisions of this Agreement, and any such prohibition in any
jurisdiction shall not invalidate such provisions in any other jurisdiction.
Section 10.4. INTERPRETATION.
All parties have participated in the drafting of this Agreement, and this
Agreement shall be interpreted without reference to any rule of construction
providing for interpretation of documents against the Persons drafting them.
Section 10.5. GOVERNING LAW; JURY TRIAL.
This Agreement and the other Credit Documents shall be construed in
accordance with and governed by the internal laws of the State of North
Carolina, excluding its choice of law rules. The parties hereto (a)
individually with respect to each instance and each issue as to which the
right to a trial by jury would otherwise accrue, waive and elect not to assert
their right to trial by jury on any issue triable of right by a jury to the
full extent that any such right shall now or hereafter exist, and certify that
no representative or agent of the Agent or the Banks (including without
limitation the Agent's counsel) has represented, expressly or otherwise, to
any Credit Party that the Agent or the Banks will not seek to enforce this
waiver of right to jury trial provision, (b) consent to the jurisdiction of
the courts of the State of North Carolina, including its federal district
courts, and (c) consent to service of process by registered mail, return
receipt requested.
Section 10.6. PAYMENT OF EXPENSES AND TAXES; INDEMNIFICATION.
(a) The Borrower agrees to pay all out of pocket costs and expenses
of the Agent, including the reasonable fees and disbursements of special
counsel for the Agent, in connection with the negotiation, preparation,
execution and delivery of this Agreement, the Notes, the Borrower
Guaranty, the Employee Pledge Agreements, and any other Credit Document,
to pay all reasonable out of pocket costs and expenses of the Banks in
connection with the enforcement of this Agreement, the Notes, and any
other Credit Document, including reasonable attorneys' fees and
disbursements arising in connection therewith (whether or not suit is
instituted), and also to pay all reasonable actual out-of-pocket costs of
the Banks in connection with any inspections, investigations, or
examinations performed under the Security Agreement.
(b) The Borrower agrees to indemnify the Agent and the Banks from
and against any and all liabilities, losses, damages, penalties, actions,
judgments, costs, expenses (including, without limitation, reasonable
attorneys' fees and disbursements) or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted against the
Agent and the Banks in any litigation, proceeding or investigation
instituted or conducted by any Person other than the Borrower with
respect to any aspect of, or any transaction contemplated by, or referred
to in, or any matter related to, any Loans made hereunder, including,
without limitation, in connection with the Borrower's servicing role
hereunder and any consumer lending or securities law violations arising
from or related to the Employee Loans. The Borrower also agrees to pay,
and to save the Banks harmless from any delay in paying, all stamp and
other taxes, if any, which may be payable or determined to be payable in
connection with the execution and delivery of this Agreement, the Notes,
the Borrower Guaranty, the Employee Pledge Agreements, and any other
Credit Document, or any modification hereof or thereof, and all filing
and recording fees in connection therewith.
Section 10.7. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All representations and warranties made in this Agreement and in any
certificates or other documents delivered pursuant hereto shall survive the
execution and delivery of this Agreement and the making of the Loans
hereunder, and the provisions of Section 10.6 shall survive payment of the
Notes.
Section 10.8. 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 Banks, set forth on SCHEDULE
9, or at such other address as such party may specify by written notice to the
other parties hereto:
(a) if to the Agent:
Bank of America, N.A.
0000 Xxxxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Managing Director
Telephone: 000-000-0000
Telecopy: 000-000-0000
with a copy to:
Bank of America, N.A.
000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
XX0-000-00-00
Xxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxx
Telephone: 000-000-0000
Telecopy: 000-000-0000
(b) if to any Credit Party:
Prior to October 27, 2000:
Xxxxxx Xxxxx & Company
0000 Xxxxxxxxx Xxxx., Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxx, Treasurer
Telephone: 000-000-0000
Telecopy: 000-000-0000
with a copy to:
Xxxxxx Xxxxx & Company
0000 Xxxxxxxxx Xxxx., Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxxxxx, Esq., General Counsel
Telephone: 000-000-0000
Telecopy: 000-000-0000
On and after October 27, 2000:
Xxxxxx Xxxxx & Company
0000 X Xxxxxx, XX, 0xx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxxx, Treasurer
Telephone: 000-000-0000
Telecopy: 000-000-0000
with a copy to:
Xxxxxx Xxxxx & Company
0000 X Xxxxxx, XX, 0xx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxxxxx, Esq., General Counsel
Telephone: 000- 000-0000
Telecopy: 000-000-0000
Section 10.9. EXECUTION.
This Agreement may be executed by the parties hereto individually or in
any combination of the parties hereto in several separate counterparts, each
of which shall be an original and all of which taken together shall constitute
one and the same Agreement.
Section 10.10. AMENDMENTS.
Neither this 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 Majority Banks and the
Borrower, PROVIDED, HOWEVER, that:
(a) without the consent of each Bank affected thereby, neither this
Agreement nor any of the other Credit Documents may be amended to
(i) extend the final maturity of any Loan or the time of
payment of any reimbursement obligation, or any portion thereof,
arising from drawings under Letters of Credit, or extend or waive
any principal amortization payment of any Loan, or any portion
thereof,
(ii) reduce the rate or extend the time of payment of interest
(other than as a result of waiving the applicability of any increase
in interest rates after the occurrence of an Event of Default or on
account of a failure to deliver financial statements on a timely
basis) thereon or fees hereunder,
(iii) reduce or waive the principal amount of any Loan or of
any reimbursement obligation, or any portion thereof, arising from
drawings under Letters of Credit,
(iv) increase the Revolving Credit Commitment or Employee Loan
Participation of a Bank over the amount thereof in effect, except as
provided in Section 2.8(d) (it being understood and agreed that a
waiver of any Default or Event of Default shall not constitute a
change in the Revolving Credit Commitment or Employee Loan
Participation of any Bank),
(v) except as permitted under Section 7.3(a) or (b), release
the Borrower or all or substantially all of the Guarantors from its
or their respective obligations under the Credit Documents,
(vi) except as the result of or in connection with a
disposition permitted under Section 7.3(b), release all or
substantially all of the Collateral,
(vii) amend, modify or waive any provision of this Section
10.10 or Section 2.8(d), 2.12, 2.13, 2.14, 2.15, 2.16, 2.17, 8.1(a),
10.6 or 10.7,
(viii) reduce any percentage specified in, or otherwise modify,
the definition of Majority Banks, or
(ix) consent to the assignment or transfer by the Borrower of
any of its rights and obligations under (or in respect of) the
Credit Documents except as permitted thereby;
(b) without the consent of the Agent, no provision of Section 9 may
be amended;
(c) without the consent of the Issuing Bank, no provision of Section
2.5 may be amended.
Notwithstanding the fact that the consent of all the Banks is required in
certain circumstances as set forth above, (x) each Bank is entitled to vote as
such Bank sees fit on any bankruptcy reorganization plan that affects the
Loans, and each Bank acknowledges that the provisions of Section 1126(c) of
the Federal Bankruptcy Code supersedes the unanimous consent provisions set
forth herein and (y) the Majority Banks may consent to allow the Borrower to
use cash collateral in the context of a bankruptcy or insolvency proceeding.
Section 10.11. RELATIONSHIP OF THE PARTIES.
This Agreement provides for the making of loans by the Banks, in their
capacity as Banks, to the Borrower, and for the payment of interest and
repayment of principal by the Borrower to the Banks. The relationship between
the Banks (including, throughout this Section, the Agent) and the Borrower is
limited to that of creditors/secured parties, on the one hand, and debtor, on
the other hand. The provisions herein for compliance with financial covenants,
delivery of financial statements, and financial inspections, investigations,
audits, or examinations are intended solely for the benefit of the Banks to
protect their interests as lenders in assuring payments of interest and
repayment of principal, and nothing contained in this Agreement shall be
construed as permitting or obligating the Banks to act as financial or
business advisors or consultants to the Borrower, as permitting or obligating
any Bank to control the Borrower or to conduct the Borrower's operations, as
creating any fiduciary obligation on the part of the Banks to the Borrower, or
as creating any joint venture, agency, or other relationship between the
parties other than as explicitly and specifically stated in this Agreement.
The Borrower acknowledges that it has had the opportunity to obtain the advice
of experienced counsel of its own choosing in connection with the negotiation
and execution of this Agreement and to obtain the advice of such counsel with
respect to all matters contained herein, including, without limitation, the
provision in Section 10.5 for waiver of trial by jury. The Borrower further
acknowledges that it is experienced with respect to financial and credit
matters and has made its own independent decision to apply to the Banks for
credit and to execute and deliver this Agreement.
EXHIBIT B
TO AMENDED CREDIT AGREEMENT
FORM OF AMENDED AND RESTATED EMPLOYEE PROMISSORY NOTE
Name:_______________ _________, 2000
Office:_____________
$__________
FOR VALUE RECEIVED, the undersigned promises to pay to the order of BANK
OF AMERICA, N.A., a national banking association formerly known as
NationsBank, N.A. (the "Agent"), at 000 Xxxxx Xxxxx Xxxxxx, 15th Floor,
NC1-001-15-04, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, or at such other address as
the Agent shall subsequently state to the undersigned in writing, the
principal sum of __________ and _____/100 U.S. DOLLARS (U.S. $_____), plus
interest on the unpaid balance thereof at a fluctuating rate per annum equal
to the Applicable Rate (as defined herein). Interest shall be computed on the
basis of the actual number of days elapsed over a year of 365 or 366 days, as
the case may be, or, if the Federal Funds Rate (as defined herein) shall then
apply, 360 days, for the period commencing with the date hereof and ending on
the date on which this Note has been paid in full. Interest shall be payable
quarterly in arrears, commencing on __________ for the first calendar quarter
ending after the date hereof and continuing on the 3rd business day of the
month immediately following each calendar quarter occurring thereafter, and on
the Maturity Date (as defined herein).
For purposes hereof, the "Applicable Rate" means (i) for all periods
prior to and including January 5, 2001, the Adjusted Base Rate and (ii) for
all periods thereafter (a) if no Cash Flow Deficiency exists as of the
immediately preceding Calculation Date, the Adjusted Base Rate and (b) if a
Cash Flow Deficiency exists as of the immediately preceding Calculation Date,
the Prime Rate. "Adjusted Base Rate" means, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest whole multiple of 1/100 of 1%)
equal to the greater of (a) the Federal Funds Rate in effect on such day PLUS
1/2 of 1.0% or(b) the Prime Rate in effect on such day, MINUS 1.0%. If for any
reason the Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable after due inquiry to
ascertain the Federal Funds Rate for any reason, including the inability or
failure of the Agent to obtain sufficient quotations in accordance with the
terms hereof, the Adjusted Base Rate shall be determined without regard to
clause (a) of the first sentence of this definition until the circumstances
giving rise to such inability no longer exist. Any change in the Adjusted 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 the
Federal Funds Rate, respectively. "Federal Funds Rate" means, for any day, the
rate of interest per annum (rounded upwards, if necessary, to the nearest
whole multiple of 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 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
quoted to the Agent on such day on such transactions as determined by the
Agent. "Prime Rate" means the per annum rate of interest established from time
to time by the Agent at its principal office in Charlotte, North Carolina as
its Prime Rate. Any change in the interest rate resulting from a change in the
Prime Rate shall become effective as of 12:01 a.m. of the business day on
which each change in the Prime Rate is announced by the Agent. The Prime Rate
is a reference rate used by the Agent in determining interest rates on certain
loans and is not intended to be the lowest rate of interest charged on any
extension of credit to any debtor. "Calculation Date" means the last day of
each fiscal quarter of Xxxxxx Xxxxx & Company. A "Cash Flow Deficiency" shall
exist at any time when the Leverage Ratio of the Xxxxxx Xxxxx & Company, on a
consolidated basis, is 2.5 or greater, as more fully described in the Loan
Documents referenced below.
Principal hereunder shall be payable in seven consecutive annual
installments of [U.S. $__________] each on the 30th day of each September
beginning _________. [the amount of the annual installments and the beginning
date of payment of the annual installments should be the same as under the
employee's existing Note]
This Note shall mature on September 30, 200[__] [the maturity date should
be the same as under the employee's existing Note] (the "Maturity Date");
PROVIDED however, that in the event the undersigned is terminated (whether
voluntary or involuntary) from Xxxxxx Xxxxx & Company Holdings or any of its
subsidiaries or affiliates (such termination is, hereinafter, a
"Termination"), the undersigned shall prepay this Note in the amounts and on
the dates set forth below:
(A) if on the date of Termination the undersigned is permitted to
sell all of the common stock securing this Note under applicable
securities laws and under the Management Stock Agreements, then the
undersigned shall repay this Note in full on the date thirty (30) days
after the Termination;
(B) if on the date of Termination the undersigned is permitted to
sell a portion, but not all, of the common stock securing this Note under
applicable securities laws and under the Management Stock Agreements,
then the undersigned shall repay this Note:
(x) on the date thirty (30) days after the Termination by
an amount equal to the lesser of (1) the unpaid principal amount
of this Note and (2) the proceeds (net of broker commissions, if
any) from the sale of all of the common stock securing this Note
permitted to be sold under applicable securities laws and under
the Management Stock Agreements;
(y) subject to clause (z) below, on the date thirty (30)
days after the undersigned is permitted to sell any additional
common stock securing this Note under applicable securities laws
and under the Management Stock Agreements by an amount equal to
the lesser of (1) the unpaid principal amount of this Note and
(2) the proceeds (net of broker commissions, if any) from the
sale of all of the additional common stock permitted to be sold
under applicable securities laws and under the Management Stock
Agreements; and
(z) on the date thirty (30) days after the undersigned is
permitted to sell all of the common stock securing this Note
under applicable securities laws and under the Management Stock
Agreements by an amount equal to the unpaid principal amount of
this Note.
(C) if on the date of Termination the undersigned is not permitted
to sell all or any portion of the common stock securing this Note under
applicable securities laws and under the Management Stock Agreements,
then the undersigned shall repay this Note:
(x) subject to clause (y) below, on the date thirty (30)
days after the undersigned is permitted to sell any common stock
securing this Note under applicable securities laws and under
the Management Stock Agreements by an amount equal to the lesser
of (1) the unpaid principal amount of this Note and (2) the
proceeds (net of broker commissions, if any) from the sale of
all of the common stock permitted to be sold under applicable
securities laws and under the Management Stock Agreements; and
(y) on the date thirty (30) days after the undersigned is
permitted to sell all of the common stock securing this Note
under applicable securities laws and under the Management Stock
Agreements by an amount equal to the unpaid principal amount of
this Note.
Whenever any principal of or interest on this Note shall not be paid when
due, whether at the stated maturity or by acceleration or otherwise, interest
on such unpaid amounts shall thereafter (and in the case of late principal
payments, 50 days thereafter if no other default shall then exist under this
Note or under any other Loan Document (as such term is defined hereinafter))
be payable at a rate per annum equal to two (2) percentage points above the
stated rate of interest under this Note until such amounts shall be paid, but
in no event shall the rate of interest payable hereon exceed the highest rate
allowed by law.
Payments shall be made in lawful money of the United States and in
immediately available funds and shall be applied first to interest, then to
principal.
The undersigned may prepay the principal hereof, in whole or in part, at
any time without penalty, provided, however, that any prepayments of principal
shall be applied against the installments of principal hereunder in their
inverse order of maturity.
Upon the sale of any common stock securing payment of this Note, the
undersigned shall immediately prepay the principal hereof in an amount equal
to the product of (a) the sum of (i) the number of shares of common stock sold
DIVIDED by (ii) the total number of shares of common stock securing payment of
this Note (including the shares sold), MULTIPLIED by (b) the outstanding
principal of this Note (for example, if this Note is secured by 10,000 shares
of common stock and the undersigned sells 2,500 of those shares (which
represents 25% of the common stock securing payment of this Note), then the
undersigned must prepay the principal hereof by an amount equal to 25% of the
outstanding principal).
Whenever this Note, or any other liability of any of the undersigned to
the Agent matures, whether at the stated maturity or by acceleration or
otherwise, the Agent may set-off against the balance hereof any and all
credits, money, stocks, bonds or other security or property of any nature
whatsoever on deposit with or held by, or in the possession of, the Agent, to
the credit of or for the account of the undersigned, without notice to or
consent by the undersigned. The undersigned promptly shall provide such
financial, operational or business information in each instance and in such
form as the Agent in its sole discretion shall require.
This Note is secured by, among other things, common stock of Xxxxxx Xxxxx
& Company Holdings purchased or refinanced with the proceeds of the loan
evidenced by this Note and as provided by a certain stock pledge agreement
from the undersigned to the Agent dated this date, and this Note is entitled
to the benefits of said stock pledge agreement, including, without limitation,
waiver by the undersigned of demand, presentment, protest, and other notices,
all as provided in the stock pledge agreement.
Upon failure of the undersigned to pay any payment hereon in full when
due, or the failure of the undersigned to perform or comply with any of the
provisions hereof and/or any of the provisions of any pledge agreement,
guaranty, or any other document previously, simultaneously or hereafter
executed and delivered by the undersigned to the Agent in connection with this
Note (collectively, and including without limitation that certain Credit
Agreement dated June 30, 1998, as amended, among Xxxxxx Xxxxx & Company, the
Subsidiary Guarantors identified therein, the banks party thereto and
NationsBank, N.A. (now known as Bank of America, N.A.), as Agent, the "Loan
Documents"), or the occurrence of a default on the part of the undersigned or
Xxxxxx Xxxxx & Company under any of the Loan Documents; or if any information
contained in any financial statement, application, schedule, report or any
other document delivered by the undersigned or any other party in connection
with the obligations of the undersigned or such other party omitted to state
any material fact or any fact necessary to make such information not
misleading; or if any judgment shall be entered against the undersigned; or if
an attachment shall be levied against any assets of the undersigned in the
possession of the Agent; or if the undersigned shall become the subject of any
bankruptcy or insolvency proceeding; or if the Agent shall in good xxxxx xxxx
itself insecure or unsafe as a result of acts or events which bear upon the
financial condition of the undersigned or the repayment of this Note, then the
entire unpaid principal balance hereof plus accrued and unpaid interest
thereon shall, at the option of the Agent, mature and become immediately due
and payable without presentment, demand, protest, notice of protest or any
other notice of any kind, all of which are hereby expressly waived.
The undersigned hereby agrees to pay, in addition to all other sums or
money due, all costs of collection and reasonable attorneys' fees, whether
suit be brought or not, if this Note is not paid in full when due, whether at
the stated maturity or by acceleration.
The undersigned hereby certifies to Agent that the proceeds hereof are
not to be used in whole or in part for personal, family or household purposes,
but only for the purpose of financing and/or refinancing the purchase of
common stock of Xxxxxx Xxxxx & Company.
This Note is given in replacement of that certain Employee Promissory
Note dated __________ in the principal amount of $__________ issued by the
undersigned to the Agent.
This instrument is an instrument under seal and shall be governed in all
respects by the laws of the State of North Carolina, excluding its choice of
law rules. The undersigned hereby consents to the jurisdiction of the courts
of North Carolina, including the federal district court, and consents to
service of process by registered mail, return receipt requested. The
undersigned further specifically consents to venue in Mecklenburg County,
North Carolina.
Witness:__________________ Signed:__________________ (Seal)
(Signature)
Name:____________________ Name:___________________
(Print or Type) (Print or Type)
EXHIBIT C
FORM OF GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT, dated as of June 30, 1998 (the "GUARANTY"), is
given by
XXXXXX XXXXX & COMPANY, a Delaware corporation (the "GUARANTOR"), to
BANK OF AMERICA, N.A., a national banking association formerly known as
NationsBank, N.A., as Agent for the Banks party to the Credit Agreement
referred to below (the "AGENT"). All capitalized terms used and not defined
herein have the meanings stated in the Credit Agreement.
W I T N E S S E T H :
WHEREAS, the Guarantor, as borrower and otherwise, is a party to that
Credit Agreement, dated as of the date hereof, among the Guarantor, the Agent
and the Banks named therein (as the same may be amended, modified or extended,
the "CREDIT AGREEMENT"); and
WHEREAS, in consideration of and to induce advances made or to be made,
or other financial accommodations from time to time afforded or to be
afforded, to or at the request of the individuals listed on EXHIBIT A attached
hereto, as such Exhibit may be amended from time to time upon the making of
additional advances to or for the benefit of persons employed by the Guarantor
or its affiliates or subsidiaries (each such person individually an "EMPLOYEE
BORROWER" and all collectively the "EMPLOYEE BORROWERS"; in addition, such
term shall mean and include all entities eligible to purchase shares of common
stock of the Guarantor and to or for the benefit of whom Employee Loans are
made under the Credit Agreement), such advances or other financial
accommodations being for the purpose of financing the purchase from the
Guarantor of stock of the Guarantor, the Guarantor has agreed to guarantee the
performance of the obligations of the Employee Borrowers under the Employee
Notes issued pursuant to the Credit Agreement;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Guarantor hereby agrees as follows:
I. GUARANTY OF LIABILITIES. The Guarantor hereby unconditionally
guarantees and becomes surety for the full and prompt payment to the Agent and
the Banks at maturity, whether by acceleration or otherwise, and at all times
thereafter, and upon a Default hereunder, of the Employee Loans and all
indebtedness, obligations and liabilities of the Employee Borrowers to the
Agent and the Banks, whether now existing or hereafter created or arising,
matured or unmatured, and whether absolute or contingent, joint, several, or
joint and several, arising out of the financing by the Agent and the Banks of
the acquisition by the Employee Borrowers of any shares of stock issued or to
be issued by the Guarantor (all of which are hereinafter called the
"GUARANTEED DEBT").
In the event any Employee Borrower shall at any time fail to pay the
Agent or any Bank any principal of or interest on or other sums constituting
any Guaranteed Debt at its maturity, whether by acceleration or otherwise, or
in the event of any Default hereunder as defined herein, the Guarantor
promises to pay such amount to the Agent and such Bank forthwith on demand, in
the same manner as if the Guaranteed Debt constituted the direct and primary
liability of the Guarantor, this being a guaranty of payment rather than of
collection.
2. IN THE EVENT OF A DEFAULT. In case of the occurrence of a default
under the terms of any Employee Borrower's note evidencing Guaranteed Debt,
any Employee Borrower's pledge agreement providing security for Guaranteed
Debt, or any other document or instrument pertaining thereto, or in case of
the death or incompetence of any Employee Borrower, or in case any
dissolution, liquidation, bankruptcy, reorganization, receivership,
assignment, debt arrangement or other proceeding under any bankruptcy or
insolvency law or procedure is instituted by or against an Employee Borrower,
each of such events or occurrences constituting a "DEFAULT" hereunder, all
Guaranteed Debt of such Employee Borrower shall at the option of the Agent and
the Banks immediately become due and payable from the Guarantor; and in any
such event the Guarantor hereby authorizes the Agent and the Banks, without
notice or demand, to advance a Revolving Credit Loan, as defined in the Credit
Agreement, for the account of the Guarantor or to appropriate and apply any
property, balances, credits, deposits, accounts or moneys of the Guarantor
then in the possession of the Agent, or standing to the credit of the
Guarantor, to the payment of such Guaranteed Debt. In the event of the
occurrence and continuance of any Event of Default under and as defined in the
Credit Agreement, all Guaranteed Debt of all Employee Borrowers shall at the
option of the Agent and the Banks become immediately due and payable,
irrespective of whether there exists a default under any note issued by a
Employee Borrower.
3. AGREEMENTS AND WAIVERS. The Guarantor hereby (a) agrees (i) to any
modifications of any terms or conditions of any Guaranteed Debt and/or to any
extensions or renewals of time of payment or performance by any Employee
Borrower or the Guarantor; and (ii) that it shall not be necessary for the
Agent to resort to legal remedies against any Employee Borrower, or against
any collateral, before proceeding against the Guarantor; (b) waives notice of
any election, acceptance, demand, protest, notice of protest and notice of
default, presentment for payment, diligence in collection, and waives, to the
extent permitted by law, all benefit of valuation, appraisement, and all
exemptions under the laws of the North Carolina, and/or any other state or
territory of the United States; (c) agrees, if any Guaranteed Debt is not paid
in accordance with the terms hereof, to pay, in addition to all other sums of
money due, all costs of collection including costs of suit and (whether or not
suit is brought) the Agent's and the Banks' reasonable attorneys' fees and
disbursements; (d) agrees that the Agent and the Banks shall have no
obligation to verify the signature of the Employee Borrower on any note,
pledge agreement or other document delivered in connection with any Guaranteed
Debt; and (e) agrees that the Guarantor's liability hereunder shall in no way
be affected or impaired by the failure of such note, pledge agreement or other
document to be valid, binding or enforceable as against such Employee
Borrower.
4. CERTAIN RIGHTS OF THE AGENT AND THE BANKS. The Guarantor's liability
hereunder shall in no way be affected or impaired by any of the following (any
or all of which may be done or omitted by the Agent or the Banks without
notice to anyone and irrespective of whether the Guaranteed Debt shall be
increased or decreased thereby), namely: (a) any acceptance by the Agent or
the Banks of any security or collateral for, or other guarantors or obligors
upon, any Guaranteed Debt; (b) any compromise, settlement, surrender, release,
discharge, renewal, extension, alteration, exchange, sale, pledge or other
disposition of, or substitution for, or indulgence with respect to, or
failure, neglect or omission to realize upon, or to enforce, exercise or
perfect any liens or right of appropriation or other rights with respect to
any Guaranteed Debt or any security or collateral therefor, or any claims
against any person or persons primarily or secondarily liable thereon; (c) the
granting of credit from time to time by the Agent or any Bank to any Employee
Borrower in excess of the amount, if any, to which the right of recovery under
this Guaranty may be limited; or (d) any act of commission or omission of any
kind or at any time upon the part of the Agent or any Bank with respect to any
matter whatsoever other than the execution and delivery by the Agent or any
Bank to the Guarantor of an express written release or cancellation of this
Guaranty. The Agent shall have the right to determine how, when and what
application of payments and credits, if any, whether derived from a Employee
Borrower or any other source, shall be made on the Guaranteed Debt, and this
Guaranty shall apply to and secure any ultimate balance that shall remain
owing to the Agent or any Bank. This Guaranty is secured by the Collateral as
defined in the Credit Agreement.
5. NO WAIVER, ETC. No postponement or delay on the part of the Agent or
any Bank in the enforcement of any right hereunder shall constitute a waiver
of such right, and all rights of the Agent and the Banks hereunder shall be
cumulative and not alternative and shall be in addition to any other rights
granted to the Agent or any Bank in any other agreement, or by Law. If any
provision hereof shall be or shall be declared to be illegal or unenforceable
in any respect, such illegal or unenforceable provision shall be and become
absolutely null and void and of no force and effect as though such provision
were not in fact set forth herein, but all other covenants, terms, conditions
and provisions hereof shall nevertheless continue to be valid and enforceable
and this Guaranty shall be so construed.
6. CONTINUING GUARANTY. This Guaranty shall continue in force in any
event for so long as any Employee Borrower shall be indebted to the Agent and
the Banks, and thereafter until the Agent and the Banks shall have actually
received written notice of the termination hereof from the Guarantor and until
all Guaranteed Debt incurred or contracted before receipt of such notice shall
have been fully and finally paid plus interest, costs, and attorneys' fees as
above described, it being contemplated that the Employee Borrowers may borrow,
repay and subsequently borrow money from, or become indebted to, the Agent and
the Banks from time to time, and the Guarantor, not having given notice of the
termination hereof as herein provided for, shall be deemed to have permitted
this Guaranty to remain in full force and effect with respect to such
additional or subsequent Guaranteed Debt.
7. AGENT HAS NO DUTY TO ADVISE; WAIVER. The Guarantor assumes the risk
for its failure to be and keep informed of the financial condition of the
Employee Borrowers and of all other circumstances bearing upon the risk of
non-payment and non-performance of the Guaranteed Debt; and the Agent and the
Banks shall have no duty to advise the Guarantor of information known to the
Agent or any Bank regarding such condition or any such circumstances.
Furthermore, the Guarantor hereby waives any defense based on the failure of
the Agent to conduct a credit review of an Employee Borrower prior to making
or during the existence of any Employee Loan.
8. SUBORDINATION; RESCISSION. The Guarantor agrees that all claims of the
Guarantor against any and all of the Employee Borrowers, whether now existing
or hereafter arising, are and shall be at all times subject and subordinate to
the Guaranteed Debt, for so long as any Guaranteed Debt or such claim or
claims shall exist. The Guarantor waives all rights of subrogation that it
might have arising out of this Guaranty. The Guarantor agrees that it shall
not, without the prior written consent of the Agent: (a) receive any payment
of or collect, in whole or in part, or xxx upon, any claim or claims now or
hereafter existing which the Guarantor may hold against the Employee Borrower;
or (b) enforce any lien which the Guarantor may now or in the future have on
any of the Employee Borrowers' properties, real or personal, as security for
the payment of any debt or claim owing by any Employee Borrower to the
Guarantor. The liability of the Guarantor hereunder shall be reinstated and
revived and the rights of the Agent and the Banks shall continue if and to the
extent that for any reason any payment by or on behalf of any Employee
Borrower or the Guarantor is rescinded or must be otherwise restored by the
Agent or any Bank, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, PROVIDED, HOWEVER, that if the Agent or any Bank
chooses to contest any such matter at the request of the Guarantor, the
Guarantor agrees to indemnify and hold the Agent and any such Bank harmless
with respect to all costs (including, without limitation, attorneys' fees) of
such litigation. If any Employee Borrower becomes a debtor in a case under the
Federal Bankruptcy Code and the Guarantor is an "insider" as defined in such
Code, the Guarantor agrees, upon request by a debtor-in-possession or trustee
(collectively "OFFICIAL") for such Employee Borrower, to pay to the estate of
such Employee Borrower an amount equal to any amount of Guaranteed Debt
previously paid to the Agent or any Bank by such Employee Borrower and
reasonably contended by such official to be avoidable under Section 547 of
such Code.
9. MISCELLANEOUS. This Guaranty shall be governed in all respects by the
internal laws of the State of North Carolina but excluding its choice of law
rules and shall be binding upon and shall inure to the benefit of the parties
hereto and their respective heirs, executors, administrators, personal
representatives, successors and assigns. This Guaranty, together with the
Credit Agreement and the other documents executed thereunder (collectively, as
the same may be modified or amended, the "CREDIT DOCUMENTS"), constitute the
entire agreement of the Agent on behalf of itself and the Banks and the
Guarantor with respect to its subject matter, superseding and replacing any
previous guaranty and applicable to all obligations guaranteed by the
Guarantor under any previous guaranty as well as to all subsequently incurred
Guaranteed Debt, and no provision hereof may be modified, altered, amended or
waived except by a writing executed by the person against whom it is sought to
be applied or enforced. All parties have participated in the drafting of this
Guaranty, and this Guaranty shall be interpreted without reference to any rule
of construction providing for interpretation of documents against the Persons
drafting them. This Guaranty may be executed by the parties hereto
individually or in any combination of the parties hereto in several separate
counterparts, each of which shall be an original and all of which taken
together shall constitute one and the same Guaranty.
10. VENUE, ETC. The Guarantor and the Agent agree that, at the option of
the Agent, all litigation arising out of this Guaranty shall be in the local
or federal courts located in the State of North Carolina, and the Guarantor
hereby waives any defense of inconvenient forum. The Guarantor and the Agent
further agree that process may be served upon any party hereto by certified or
registered mail, return receipt requested, directed to such party at its
address stated in the Credit Agreement, and each party waives any defense of
insufficiency of service with respect to process so served. The Guarantor and
the Agent further agree that, because of the complexities of commercial
transactions and the need for expeditious resolution of disputes, any
litigation arising out of this Guaranty shall be before a court sitting
without a jury, and both parties hereby waive trial by jury in all such
litigation, after having received the advice of their respective independent
counsel.
11. LIMITATION ON OBLIGATIONS. Notwithstanding any provision to the
contrary contained herein or in any other of the Credit Documents, to the
extent the obligations of the Guarantor shall be adjudicated to be invalid or
unenforceable for any reason (including, without limitation, because of any
applicable state or federal law relating to fraudulent conveyances or
transfers) then the obligations of the Guarantor hereunder shall be limited to
the maximum amount that is permissible under applicable law (whether federal
or state and including, without limitation, the Bankruptcy Code).
WITNESS the due execution hereof with the intent of being legally bound
as of the date stated on the first page hereof.
XXXXXX XXXXX & COMPANY,
a Delaware corporation,
ATTEST:__________________________ By:_________________________
Name: Name:
Title: Title:
EXHIBIT A
TO
GUARANTY AGREEMENT
[To be supplied by Guarantor]
EXHIBIT D-1
TO
AMENDED CREDIT AGREEMENT
FORM OF EMPLOYEE PLEDGE AGREEMENT (FOR INDIVIDUALS)
Name: ______________________
Home Address: ______________________
______________________
______________________
Date: ______________________
Xxxxxx Xxxxx & Company Holdings
0000 X Xxxxxx, XX, 0xx Xxxxx
Xxxxxxxxxx, XX 00000
Attn: Xx. Xxxxxx X. Xxxxxxxxxxxx, General Counsel & Secretary
Gentlemen:
I have issued a promissory note (the "NOTE") in the principal amount of
$_____ to Bank of America, N.A., a national banking association formerly known
as NationsBank, N.A. (the "AGENT"), as agent for itself and certain other
banks. The Note evidences a loan made to me by the Agent to enable me to
purchase, or to refinance the purchase of, ___ shares of the common stock of
Xxxxxx Xxxxx & Company (the "COMPANY"). In connection with the initial public
offering of the common stock of Xxxxxx Xxxxx & Company Holdings ("HOLDINGS"),
my shares of common stock of the Company converted into ___ shares of common
stock of Holdings.
As security for the timely satisfaction of my obligations under the Note,
I hereby pledge to the Agent all shares purchased or refinanced with the
proceeds of the loan, including the shares of common stock of Holdings issued
in conversion of or exchange for the shares of common stock of the Company
(the "EMPLOYEE PLEDGED SHARES"), and grant to the Agent a lien on and security
interest in the Employee Pledged Shares and all proceeds thereof.
Holdings and/or its transfer agent is hereby authorized and directed to
register on its books my pledge to the Agent of the Employee Pledged Shares,
to identify said pledge of the Employee Pledged Shares on all initial and
periodic statements and all other statements or notices respecting the
Employee Pledged Shares, and to have all pledgee notices and statements
respecting the Employee Pledged Shares as well as any and all certificates or
any other instruments or documents evidencing my ownership of the Employee
Pledged Shares sent directly to the Agent at the following address:
Bank of America, N.A.
000 Xxxxx Xxxxx Xxxxxx, 15th Floor
NC1-001-15-04
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxxxx Xxxxxx, Agency Services
I agree that the Agent shall take and maintain possession of all such
statements, notices, certificates, instruments and documents in its capacity
as pledgee.
Upon the sale of any Employee Pledged Shares, I agree to immediately
prepay the principal of the Note in an amount equal to the product of (a) the
sum of (i) the number of Employee Pledged Shares sold DIVIDED by (ii) the
total number of Employee Pledged Shares (including the shares sold),
MULTIPLIED by (b) the outstanding principal of the Note (for example, if the
Note is secured by 10,000 Employee Pledged Shares and I sell 2,500 Employee
Pledged Shares (which represents 25% of the Employee Pledged Shares), then I
must prepay 25% of the outstanding principal of the Note).
In the event that I sell any or all of the Employee Pledged Shares prior
to repayment of my loan from the Agent, I agree and direct that the
purchaser(s) thereof shall be directed to remit the purchase price to Holdings
and that Holdings shall apply the proceeds of such sale in the manner provided
above. To facilitate the foregoing, I agree and direct that Holdings and/or
its transfer agent register on its books and identify on all transaction and
periodic statements respecting the Employee Pledged Shares the restriction
that any purchaser of the Employee Pledged Shares may be required to remit the
purchase price directly to Holdings to be applied in payment of my
indebtedness to the Agent, and I further agree and direct that the following
legend shall be placed on all certificates, if any, for the Employee Pledged
Shares:
"In the event the shares represented by this certificate are sold,
the purchaser may be required to remit the purchase price directly
to Xxxxxx Xxxxx & Company Holdings to be applied in payment of
certain indebtedness of the registered holder to Bank of America,
N.A., as agent for itself and certain other banks."
You agree to have such legend removed from any certificate if and when you are
advised in writing by the Agent that my indebtedness to it has been repaid in
full.
Upon the payment in full of all amounts due under my note issued to the
Agent, I understand that with respect to all of the Employee Pledged Shares
that have not been sold or otherwise disposed of under the terms of this
letter, the Agent will direct Holdings and/or its transfer agent to register
on its books the release of the Agent's lien on and the foregoing restrictions
respecting such Employee Pledged Shares, and will have delivered to me, at
Holdings' expense, free of liens and encumbrances, and without recourse or
representation, all certificates, if any, for such Employee Pledged Shares. I
agree that beyond the exercise of reasonable care, the Agent shall have no
duty or liability to preserve rights pertaining to the Employee Pledged
Shares, and shall be relieved of all responsibility for the Employee Pledged
Shares upon issuing a direction to Holdings and/or its transfer agent to
register the release of its lien on and the foregoing restriction respecting
the Employee Pledged Shares and upon surrendering or tendering surrender to me
of all certificates, if any, respecting the Employee Pledged Shares.
I agree that all rights, remedies and powers granted to the Agent in this
letter, in my note, in your guaranty of my note, or in any other document
previously, simultaneously or hereafter executed and delivered by me or by any
other party to the Agent in connection with this letter or my note
(collectively, the "LOAN DOCUMENTS"), whether express or implied, shall be
cumulative and may be exercised singly or concurrently with such other rights
as the Agent may have. I also agree that no failure or delay on the part of
the Agent in exercising any right, power or privilege hereunder, under any of
the Loan Documents, or under applicable law, shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or thereunder preclude any other or further exercise
thereof or the exercise of any other right, power, or privilege. I further
agree that no waiver or modification of any right, power or privilege of the
Agent or of any obligation of mine shall be effective unless such waiver or
modification is in writing, signed by the Agent, and then only to the extent
set forth therein, and I agree that a waiver by the Agent of any right, power
or privilege hereunder on any one occasion shall not be construed as a bar to,
or a waiver of, any such right, power or privilege which the Agent otherwise
would have on any subsequent occasion.
This agreement is given in amendment, restatement and replacement of that
letter agreement dated as of __________ given by me to the Company pursuant to
which I pledged my Employee Pledged Shares to the Agent as security for the
Note.
This letter constitutes a security agreement in favor of the Agent, and I
understand that the Agent is entitled to rights and remedies as a secured
party under this agreement and applicable law. I authorize and direct you to
provide a copy of this letter to the Agent, and I understand that the Agent is
relying on this letter, in addition to your guaranty of my note, in making its
loan to me.
Witness:_____________________ Signed:_____________________
(Signature)
Name: ________________________ Name:_______________________
(Print or Type) (Print or Type)
Tax ID No.:_________________
EXHIBIT D-2
TO
AMENDED CREDIT AGREEMENT
FORM OF EMPLOYEE PLEDGE AGREEMENT (FOR HOLDING COMPANIES)
Name: _____________________________
Address: _____________________________
_____________________________
_____________________________
Date: _____________________________
Xxxxxx Xxxxx & Company Holdings
0000 X Xxxxxx, XX, 0xx Xxxxx
Xxxxxxxxxx, XX 00000
Attn: Xx. Xxxxxx X. Xxxxxxxxxxxx, General Counsel & Secretary
Gentlemen:
The undersigned employee [Employee Name] (the "EMPLOYEE") has issued a
promissory note (the "NOTE") in the principal amount of $________ to Bank of
America, N.A., a national banking association formerly known as NationsBank,
N.A. (the "AGENT"), as agent for itself and certain other banks. The Note
evidences a loan made to the Employee by the Agent (the "LOAN") for the
purpose of financing or refinancing the purchase by the undersigned personal
holding company [PERSONAL HOLDING COMPANY NAME] (the "HOLDING COMPANY") of ___
shares of the common stock of Xxxxxx Xxxxx & Company (the "COMPANY"). In
connection with the initial public offering of the common stock of Xxxxxx
Xxxxx & Company Holdings ("HOLDINGS"), my shares of common stock of the
Company converted into ___ shares of common stock of Holdings.
As security for the timely satisfaction of all obligations under the
Note, the undersigned hereby pledges to the Agent all shares purchased or
refinanced with the proceeds of the Loan, including the shares of common stock
of Holdings issued in conversion of or exchange for the common stock of the
Company (the "EMPLOYEE PLEDGED SHARES"), and grants to the Agent a lien on and
security interest in the Employee Pledged Shares and all proceeds thereof.
Holdings and/or its transfer agent is hereby authorized and directed to
register on its books the undersigned's pledge to the Agent of the Employee
Pledged Shares, to identify said pledge of the Employee Pledged Shares on all
initial and periodic statements and all other statements or notices respecting
the Employee Pledged Shares, and to have all pledgee notices and statements
respecting the Employee Pledged Shares as well as any and all certificates or
any other instruments or documents evidencing ownership of the Employee
Pledged Shares sent directly to the Agent at the following address:
Bank of America, N.A.
000 Xxxxx Xxxxx Xxxxxx, 15th Floor
NC1-001-15-04
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxxxx Xxxxxx, Agency Services
The undersigned agree that the Agent shall take and maintain possession of any
and all such statements, notices, certificates, instruments and documents in
its capacity as pledgee.
In the event that the undersigned sells any or all of the Employee
Pledged Shares prior to repayment of the Loan from the Agent, the undersigned
agrees and directs that the purchaser(s) thereof shall be directed to remit
the purchase price to Holdings and that Holdings shall apply the proceeds of
such sale in the manner provided above. To facilitate the foregoing, the
undersigned agrees and directs that Holdings and/or its transfer agent
register on its books and identify on all transaction and periodic statements
respecting the Employee Pledged Shares the restriction that any purchaser of
the Employee Pledged Shares may be required to remit the purchase price
directly to Holdings to be applied in payment of my indebtedness to the Agent,
and the undersigned further agrees and directs that the following legend shall
be placed on all certificates, if any, for the Employee Pledged Shares:
"In the event the shares represented by this certificate are sold,
the purchaser may be required to remit the purchase price directly
to Holdings to be applied in payment of certain indebtedness of
the registered holder to Bank of America, N.A., as agent for
itself and certain other banks."
Such legend shall be removed from any certificate if and when Holdings is
advised in writing by the Agent that all indebtedness to the Agent under the
Note has been repaid in full.
Upon the sale of any Employee Pledged Shares, the undersigned agrees to
immediately prepay the principal of the Note in an amount equal to the product
of (a) the sum of (i) the number of Employee Pledged Shares sold DIVIDED by
(ii) the total number of Employee Pledged Shares (including the shares sold),
MULTIPLIED by (b) the outstanding principal of the Note (for example, if the
Note is secured by 10,000 Employee Pledged Shares and the undersigned sells
2,500 Employee Pledged Shares (which represents 25% of the Employee Pledged
Shares), then the undersigned must prepay 25% of the outstanding principal of
the Note).
Upon the payment in full of all amounts due under the Note issued to the
Agent and with respect to all of the Employee Pledged Shares that have not
been sold or otherwise disposed of under the terms of this letter, the Agent
will direct Holdings and/or its transfer agent to register on its books the
release of the Agent's lien on and restriction respecting such Employee
Pledged Shares, and will have delivered to Holding, at Holdings' expense, free
of liens and encumbrances, and without recourse or representation, all
certificates, if any, for such Employee Pledged Shares. The undersigned agree
that beyond the exercise of reasonable care, the Agent shall have no duty or
liability to preserve rights pertaining to the Employee Pledged Shares, and
shall be relieved of all responsibility for the Employee Pledged Shares upon
issuing a direction to Holdings and/or its transfer agent to register the
release of its lien on and the foregoing restriction respecting the Employee
Pledged Shares and upon surrendering or tendering surrender to the Holding
Company of all certificates, if any, respecting the Employee Pledged Shares.
All rights, remedies and powers granted to the Agent in this letter, in
the Note, in your guaranty of the Note, or in any other document previously,
simultaneously or hereafter executed and delivered by either or both of the
undersigned or by any other party to the Agent in connection with this letter
or the Note (collectively, the "LOAN DOCUMENTS"), whether express or implied,
shall be cumulative and may be exercised singly or concurrently with such
other rights as the Agent may have. No failure or delay on the part of the
Agent in exercising any right, power or privilege hereunder, under any of the
Loan Documents, or under applicable law, shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, power or privilege
hereunder or thereunder preclude any other or further exercise thereof or the
exercise of any other right, power, or privilege. No waiver or modification of
any right, power or privilege of the Agent or of any obligation of either or
both of the undersigned shall be effective unless such waiver or modification
is in writing, signed by the Agent, and then only to the extent set forth
therein, and a waiver by the Agent of any right, power or privilege hereunder
on any one occasion shall not be construed as a bar to, or a waiver of, any
such right, power or privilege which the Agent otherwise would have on any
subsequent occasion.
This agreement is given in amendment, restatement and replacement of that
letter agreement dated as of __________ given by me to the Company pursuant to
which I pledged my Employee Pledged Shares to the Agent as security for the
Note.
This letter constitutes a security agreement in favor of the Agent, and
the undersigned understand that the Agent is entitled to rights and remedies
as a secured party under this agreement and applicable law. The undersigned
authorize and direct Holdings to provide a copy of this letter to the Agent
and understand that the Agent is relying on this letter, in addition to the
Company's guaranty of the Note, in making the Loan.
Employee:
Witness:_______________________ Signed:_____________________
(Signature) (Employee Signature)
Name:__________________________ Name:________________________________
(Print or Type) (Print or Type)
Personal Holding Company:
Witness:_______________________ Signed:______________________________
(Signature) (Name of Personal Holding Co.)
Name:__________________________ Tax ID No.:__________________________
(Type or Print Name) (Print or Type)
By:__________________________________
(Employee Signature)
Name:________________________________
(Type or Print Employee Name)
EXHIBIT E
TO
AMENDED CREDIT AGREEMENT
FORM OF EMPLOYEE STOCK POWER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers to
the following shares of the common stock of XXXXXX XXXXX & COMPANY HOLDINGS, a
Delaware corporation:
NO. OF SHARES CERTIFICATE NO.
and irrevocably appoints __________________________________ its agent and
attorney-in-fact to transfer all or any part of such common stock and to take
all necessary and appropriate action to effect any such transfer. The agent
and attorney-in-fact may substitute and appoint one or more persons to act for
him. The effectiveness of a transfer pursuant to this stock power shall be
subject to any and all transfer restrictions referenced on the face of the
certificates evidencing such interest or in the certificate of incorporation
or bylaws of the subject corporation, to the extent they may from time to time
exist.
By:_____________________________
Name:
Title:
EXHIBIT F
TO AMENDED CREDIT AGREEMENT
FORM OF NOTICE OF BORROWING
TO: Bank of America, N.A., as Agent
000 Xxxxx Xxxxx Xxxxxx, 15th Floor
NC1-001-15-04
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxxxx Xxxxxx, Agency Services
RE: Credit Agreement dated as of June 30, 1998 among Xxxxxx Xxxxx &
Company (the "Borrower"), the Guarantors identified therein,
the banks party thereto (the "Banks") and Bank of America,
N.A., a national banking association formerly known as
NationsBank, N.A., as Agent (as amended, modified, extended or
restated from time to time, the "Credit Agreement")
DATE: _____________, 2000__
______________________________________________________________________________
1. This Notice of Borrowing is made pursuant to the terms of the Credit
Agreement. All capitalized terms used herein unless otherwise
defined shall have the meanings set forth in the Credit Agreement.
2. Please be advised that:
______ (a) the Borrower is requesting Revolving Credit Loans in
the amount of $__________ to be funded on
____________, 200__ at the interest rate option set
forth in paragraph 3 below. Subsequent to the funding
of the requested Revolving Credit Loans, the aggregate
amount of outstanding Revolving Credit Loans, together
with outstanding LOC Obligations, will be $_________
which is less than or equal to the Aggregate Revolving
Credit Commitment.
______ (b) the Borrower is requesting that a portion of the
current outstanding Revolving Credit Loans in the
amount of $__________ be extended or converted at the
interest rate option set forth in paragraph 3 below.
3. The interest rate option applicable to the requested Revolving
Credit Loans (or the extension or conversion of all or part of the
existing Revolving Credit Loans), as set forth above, shall be:
a. ________ the Base Rate
b. ________ the Eurodollar Rate plus the Applicable Percentage
for an Interest Period of:
________ one month
________ two months
________ three months
________ six months
4. The representations and warranties set forth in the Credit Documents
are true and correct in all material respects as if made on the date
hereof and shall be true and correct as of the date of the borrowing
(or continuation or conversion thereof).
5. As of the date hereof, no Incipient Default or Event of Default has
occurred and is continuing or would be caused by this Notice of
Borrowing or the making of Loans requested hereby and no Incipient
Default or Event of Default shall exist as of the date of the
borrowing (or continuation or conversion thereof).
7. No material adverse effect has occurred in the financial condition
of the Borrower since the Closing Date.
8. No Margin Stock Event has occurred.
XXXXXX XXXXX & COMPANY
By:___________________________
Name:_________________________
Title:________________________
EXHIBIT H
TO
AMENDED CREDIT AGREEMENT
FORM OF JOINDER AGREEMENT
THIS JOINDER AGREEMENT (the "AGREEMENT"), dated as of __________, 200__,
is by and between __________, a __________ corporation (the "APPLICANT
GUARANTOR"), and Bank of America, N.A., in its capacity as Agent under that
certain Credit Agreement dated as of June 30, 1998 (as amended, modified,
supplemented or extended from time to time, the "CREDIT AGREEMENT") by and
among Xxxxxx Xxxxx & Company, a Delaware corporation, the Guarantors
identified therein, the Banks identified therein and Bank of America, N.A., as
Agent. All of the defined terms in the Credit Agreement are incorporated
herein by reference.
The Applicant Guarantor has indicated its desire to become a Guarantor or
is required by the terms of Section 6.11 of the Credit Agreement to become a
Guarantor under the Credit Agreement.
Accordingly, the Applicant Guarantor hereby agrees as follows with the
Agent for the benefit of the Banks:
1. The Applicant Guarantor hereby acknowledges, agrees and confirms that,
by its execution of this Agreement, the Applicant Guarantor will be deemed to
be a party to the Credit Agreement and a "Guarantor" for all purposes of the
Credit Agreement and the other Credit Documents, and shall have all of the
obligations of a Guarantor thereunder as if it had executed the Credit
Agreement and the other Credit Documents. The Applicant Guarantor agrees to be
bound by all of the terms, provisions and conditions contained in the Credit
Documents, including without limitation (i) all of the affirmative and
negative covenants set forth in Articles VI and VII of the Credit Agreement
and (ii) all of the undertakings and waivers set forth in Article IV of the
Credit Agreement. Without limiting the generality of the foregoing terms of
this paragraph 1, the Applicant Guarantor hereby (A) jointly and severally
together with the other, guarantees to the Agent and each Bank (including the
Issuing Bank) as provided in Article III of the Credit Agreement, the prompt
payment and performance of the Guaranteed 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, (B) agrees that if any of the Guaranteed Obligations are not
paid or performed in full when due (whether at stated maturity, as a mandatory
prepayment, by acceleration, as a mandatory cash collateralization or
otherwise), the Applicant Guarantor will, jointly and severally together with
the other Guarantors, promptly pay and perform 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 Guaranteed 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, (C) grants to the
Agent, for the ratable benefit of the Banks, a continuing security interest
in, and a right to set off against, its Collateral (as defined in the Security
Agreement) as collateral security for the prompt and complete payment and
performance when due (whether at stated maturity, by acceleration or
otherwise) of the Secured Obligations (as defined in the Security Agreement),
and (D) pledges to the Agent, for the ratable benefit of the Banks, and grants
to the Agent, for the ratable benefit of the Banks, a first security interest
in, the Pledged Stock identified on SCHEDULE A hereto pursuant to the terms of
the Credit Party Pledge Agreement as collateral security for the prompt and
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Pledgor Obligations (as defined in the
Credit Party Pledge Agreement).
2. The Applicant Guarantor acknowledges and confirms that it has received
a copy of the Credit Agreement and the other Credit Documents (including
schedules and exhibits thereto). The information on Schedules 1(b), 4(a), 4(b)
and 4(c) to the Security Agreement and Schedule 2(a) to the Credit Party
Pledge Agreement are amended to include the information set forth on SCHEDULE
A hereto.
3. The Applicant Guarantor hereby waives acceptance by the Agent and the
Banks of the guaranty by the Applicant Guarantor under Article III of the
Credit Agreement upon the execution of this Joinder Agreement by the Applicant
Guarantor.
4. This Agreement may be executed in two or more counterparts, each of
which shall constitute an original but all of which when taken together shall
constitute one contract.
5. This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the State of North Carolina.
IN WITNESS WHEREOF, the Applicant Guarantor has caused this Joinder
Agreement to be duly executed by its authorized officers, and the Agent, for
the benefit of the Banks, has caused the same to be accepted by its authorized
officer, as of the day and year first above written.
APPLICANT GUARANTOR
By: ______________________________
Name:
Title:
Address for Notices:
[address]
Attn:
Telephone:
Telecopy:
Acknowledged and accepted:
BANK OF AMERICA, N.A., as Agent
By: ______________________________
Name:
Title:
SCHEDULE A
TO
JOINDER AGREEMENT
SCHEDULE 1(B) TO SECURITY AGREEMENT
Intellectual Property
SCHEDULE 4(A) TO SECURITY AGREEMENT
Chief Executive Office
SCHEDULE 4(B) TO SECURITY AGREEMENT
Locations of Collateral
SCHEDULE 4(C) TO SECURITY AGREEMENT
Mergers, Consolidations, Change in Structure or Use of Tradenames
SCHEDULE 2(A) TO PLEDGE AGREEMENT
Description of Pledged Shares
EXHIBIT I
TO
AMENDED CREDIT AGREEMENT
FORM OF AGREEMENT TO EMPLOYEE PLEDGE AGREEMENTS
In consideration of financial accommodations made by Bank of America,
N.A., a national banking association formerly known as NationsBank, N.A., as
Agent for the Banks party to the Credit Agreement referred to below ("AGENT"),
to or at the request of Xxxxxx Xxxxx & Company (the "BORROWER"), and the
mutual covenants contained in that certain Credit Agreement, dated as of June
30, 1998, among the Borrower, the Subsidiary Guarantors identified therein,
the Agent and the Banks party thereto (the "BANKS"), as said agreement may
have been or may be amended from time to time (the "CREDIT AGREEMENT"), and
having reviewed the Employee Pledge Agreements executed and delivered in
connection with Employee Loans as identified on the attached schedule (which
schedule identifies all Employee Pledge Agreements executed and delivered
after ___________________), the Borrower hereby reaffirms its prior
acknowledgment of and agreement to certain of the Employee Pledge Agreements,
and hereby further acknowledges and agrees to the terms and conditions of each
and every one of the Employee Pledge Agreements.
This Agreement to Employee Pledge Agreements is executed and delivered
with the intent that the Borrower shall be bound by each of the Employee
Pledge Agreements and that the Agent and the Banks shall rely hereon and
thereon in making or participating in Employee Loans.
Capitalized terms used but not defined herein shall have the meanings
stated in the Credit Agreement. As used herein, "EMPLOYEE PLEDGE AGREEMENTS"
shall include any and all amendments to the Employee Pledge Agreements.
XXXXXX XXXXX & COMPANY
By: ___________________________
Name: ___________________________
Title:___________________________
Schedule of Employee Loans and Employee Pledge Agreements
------------ --------------------- -------------------------- ---------------
NAME INITIAL LOAN AMOUNT NUMBER OF SHARES PLEDGED DATE
------------ --------------------- -------------------------- ---------------
------------ --------------------- -------------------------- ---------------
------------ --------------------- -------------------------- ---------------
