AMENDMENT NO. 4
TO
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDMENT NO. 4 TO AMENDED AND RESTATED CREDIT AGREEMENT (this
"Amendment"), dated as of February 8, 2002, is entered into by and among
PERSONNEL GROUP OF AMERICA, INC. (the "Borrower"), certain subsidiaries of the
Borrower identified on the signatures pages hereto, the financial institutions
identified on the signature pages hereto and BANK OF AMERICA, N.A., formerly
known as NationsBank, N.A., as agent for the Lenders (in such capacity, the
"Agent"). Except as otherwise defined in this Amendment, terms defined in the
Credit Agreement referred to below (as amended by this Amendment) are used
herein as defined therein.
RECITALS
A. The Borrower, the Guarantors party thereto, the Lenders party
thereto and the Agent entered into that certain Amended and Restated Credit
Agreement dated as of June 23, 1997 (as amended by Amendment No. 1 to Amended
and Restated Credit Agreement dated as of March 17, 1998, Amendment No. 2 to
Amended and Restated Credit Agreement dated as of September 29, 1999, Amendment
No. 3 to Amended and Restated Credit Agreement dated as of March 21, 2001 and a
Waiver Agreement dated as of December 14, 2001 and as otherwise modified prior
to the date hereof, the "Credit Agreement").
B. The Borrower has requested certain modifications to the Credit
Agreement.
C. Such modifications require the consent of the Lenders.
D. The Lenders have consented to the requested modifications on
the terms and conditions set forth herein.
AGREEMENT
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:
I. AMENDMENTS TO CREDIT AGREEMENT
Subject to the satisfaction of the conditions precedent set forth in
Section 5 in Article II hereof, from and after the Fourth Amendment Effective
Date (as defined below), the Credit Agreement (including the Schedules attached
thereto) is hereby amended in its entirety to read in the form of such Credit
Agreement (including the Schedules attached thereto) attached hereto as Exhibit
A to this Amendment.
II. MISCELLANEOUS
1. Representations and Warranties. Each of the Credit Parties
represents and warrants to the Lenders and the Agent as follows:
(a) It has taken all necessary action to authorize the
execution, delivery and performance of this Amendment.
(b) This Amendment has been duly executed and delivered
by such Credit Party and constitutes such Credit Party's legal, valid
and binding obligation, enforceable in accordance with its terms,
except as such enforceability may be limited (x) by general principles
of equity and conflicts of laws or (y) by bankruptcy, reorganization,
insolvency, moratorium or other laws of general application relating to
or affecting the enforcement, of creditors' rights.
(c) No consent, approval, authorization or order of, or
filing, registration or qualification with, any court or governmental
authority or third party is required in connection with the execution,
delivery or performance by such Credit Party of this Amendment.
(d) The execution and delivery of this Amendment does not
diminish or reduce its obligations under the Credit Documents
(including, without limitation, in the case of each Guarantor, such
Guarantor's guaranty pursuant to Section 4 of the Credit Agreement) in
any manner, except as specifically set forth herein.
(e) Such Credit Party has no claims, counterclaims,
offsets, or defenses to the Credit Documents and the performance of its
obligations thereunder, or if such Credit Party has any such claims,
counterclaims, offsets, or defenses to the Credit Documents or any
transaction related to the Credit Documents, the same are hereby
waived, relinquished and released in consideration of the Lenders'
execution and delivery of this Amendment.
(f) The representations and warranties of the Credit
Parties set forth in Section 6 of the Credit Agreement are true and
correct as of the date hereof (except those that expressly relate to an
earlier date) and all of the provisions of the Credit Documents, except
as amended hereby, are in full force and effect.
(g) Subsequent to the execution and delivery of this
Amendment and after giving effect hereto, no unwaived event has
occurred and is continuing which constitutes a Default or an Event of
Default.
2. Liens. Each Credit Party affirms the liens and security
interests created and granted by it in the Credit Documents (including, but not
limited to, the Pledge Agreement and the Security Agreement) and agrees that
this Amendment shall in no manner adversely affect or impair such liens and
security interests.
3. Effect of Amendment. Except as expressly modified and amended
in this Amendment, all of the terms, provisions and conditions of the Credit
Documents shall remain unchanged and in full force and effect. The Credit
Documents and any and all other documents heretofore, now or hereafter executed
and delivered pursuant to the terms of the Credit Agreement are hereby amended
so that any reference to the Credit Agreement shall mean a reference to the
Credit Agreement as amended hereby.
4. Expenses. The Borrower agrees to pay on demand all reasonable
costs and expenses of the Agent incurred in connection with the negotiation,
preparation, execution and delivery of this Amendment, including the reasonable
fees and expenses of the Agent's legal counsel (including without limitation
amounts incurred and invoiced on or prior to the Fourth Amendment Effective Date
and referenced in Part II, Section 5(i) below).
2
5. Conditions Precedent. This Amendment shall become effective as
of the date hereof (the "Fourth Amendment Effective Date") once each of the
following conditions precedent has been satisfied:
(a) the Agent shall have received counterparts of (i)
this Amendment, duly executed and delivered by each of the Credit
Parties, the Lenders and the Agent, and all schedules to be attached to
the amended Credit Agreement to be attached hereto as Exhibit A (ii)
that certain Equity Appreciation Rights Agreement dated as of the date
hereof, duly executed and delivered by each of the Borrower, the Agent
and the Lenders, (iii) a Joinder Agreement dated as of the date hereof
which shall have been duly executed by Venturi Staffing Partners, LLC
and (iv) letter agreements, in form and substance satisfactory to the
Agent, relating to (A) the Borrower's continuing discussions with the
holders of its subordinated debt with respect to restructuring such
debt and (B) a replacement schedule of subsidiaries pledged under the
Pledge Agreement;
(b) the Agent shall have received a certified copy of the
resolutions of the Board of Directors of the Borrower and each other
Credit Party evidencing its approval of this Amendment and the other
Credit Documents and matters contemplated hereby, and a certified copy
of all documents evidencing other necessary corporate action and
governmental approvals, if any, with respect to this Amendment and the
other Credit Documents;
(c) the Agent shall have received legal opinions of (i)
Xxxxxxx X. Xxxxxxxx, General Counsel of the Borrower, and (ii) Xxxxxxxx
Xxxxxxxx & Xxxxxx, P.A., acting as counsel to each of the Credit
Parties, in form and substance satisfactory to the Agent;
(d) the Agent shall have received all documents it may
reasonably request relating to the existence and good standing of the
Credit Parties and to the authorization, execution and delivery of this
Amendment and the other Credit Documents and other matters relevant
hereto, all in form and substance satisfactory to the Agent and its
counsel in their reasonable discretion;
(e) the Agent shall have received from the chief
financial officer of the Borrower a certificate to the effect that as
of the date hereof all representations and warranties made by the
Borrower and each other Credit Party in this Amendment and each other
Credit Document are true and correct in all material respects;
(f) no Default or Event of Default shall have occurred
and be continuing;
(g) each Lender party to the Credit Agreement who
executes this Amendment on or before 5:00 P.M. Eastern Standard Time on
February 8, 2002 (provided this Amendment is approved by the Lenders)
shall have received an amendment fee equal to 0.75% of such Lender's
Commitment after giving effect to transactions contemplated hereby;
(h) the Borrower shall have paid any and all
out-of-pocket costs (to the extent invoiced) incurred by the Agent
(including the reasonable fees and expenses of the Agent's legal
counsel), and fees and other amounts payable to the Agent, in each case
in connection with the negotiation, preparation, execution and delivery
of this Amendment; and
(i) the Borrower shall have made a voluntary prepayment
of Loans in the amount of at least $11,000,000 from funds in the
Borrower's bank account with First Citizens Bank, which bank account
had a balance of $11,066,534 on December 30, 2001.
6. Counterparts/Telecopy. This Amendment may be executed in any
number of counterparts, each of which when so executed and delivered shall be an
original, but all of which shall
3
constitute one and the same instrument. Delivery of executed counterparts by
telecopy shall be effective as an original and shall constitute a representation
that an original will be delivered.
7. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of North Carolina.
8. ENTIRETY. THIS AMENDMENT, THE CREDIT AGREEMENT AND THE OTHER
CREDIT DOCUMENTS EMBODY THE ENTIRE AGREEMENT BETWEEN THE PARTIES AND SUPERSEDE
ALL PRIOR AGREEMENTS AND UNDERSTANDINGS, IF ANY, RELATING TO THE SUBJECT MATTER
HEREOF. THESE CREDIT DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES.
9. Severability. If any provision of this Amendment is determined
to be illegal, invalid or unenforceable, such provision shall be fully severable
and the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
10. Release. The Credit Parties hereby release the Agent, the
Lenders and each of their respective officers, employees, representatives,
agents, trustees, counsel and directors (collectively, the "Released Persons")
from any and all actions, causes of action, claims, demands, damages and
liabilities of whatever kind or nature, in law or in equity, now known or
unknown, suspected or unsuspected to the extent that any of the foregoing arises
from any action or failure to act by any of the Released Persons on or prior to
the date hereof in connection with the Credit Documents and transactions related
thereto.
[the remainder of this page intentionally left blank]
4
IN WITNESS WHEREOF, the parties hereto have caused this Amendment, to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
BORROWER: PERSONNEL GROUP OF AMERICA, INC.,
a Delaware corporation
By: /s/ Xxxxx X. Xxxx
-------------------------------------------
Name: Xxxxx X. Xxxx
Title: President and
Chief Financial Officer
GUARANTORS: STAFFPLUS, INC.,
a Delaware corporation
INFOTECH SERVICES, INC.,
a North Carolina corporation
BAL ASSOCIATES INCORPORATED,
a California corporation
ADVANCED BUSINESS CONSULTANTS, INC.,
a Kansas corporation
XXXXXXXXXX.XXX, INC.,
a Florida corporation
VENTURI STAFFING PARTNERS, LLC,
a California limited liability company
By: /s/ Xxxxx X. Xxxx
-------------------------------------------
Name: Xxxxx X. Xxxx
Title: Senior Vice President of each of the
above-named Guarantors
PFI CORP.,
a Delaware corporation
By: /s/ Xxxxx X. Xxxx
-------------------------------------------
Name: Xxxxx X. Xxxx
Title: President
Signature Page to Amendment No. 4
to Amended and Restated Credit Agreement
February 2002
LENDERS: BANK OF AMERICA, N.A.,
formerly known as NationsBank, N.A.
and Bank of America Illinois,
as Agent and as a Lender
By: /s/ H. Xxxxxxx Xxxxxx
-------------------------------------------
Name: H. Xxxxxxx Xxxxxx
Title: Managing Director
Amendment No. 4 to
Amended and Restated Credit Agreement
for Personnel Group of America, Inc.
BNP PARIBAS
----------------------------------------------
[NAME OF LENDER]
By: /s/ Xxxxx Xxxxxxxxx
-------------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Director & Head of U.S. Mid Cap Group
BNP PARIBAS
----------------------------------------------
[NAME OF LENDER]
By: /s/ Shayn March
-------------------------------------------
Name: Shayn March
Title: Vice President
Amendment No. 4 to
Amended and Restated Credit Agreement
for Personnel Group of America, Inc.
COMERICA BANK
----------------------------------------------
[NAME OF LENDER]
By: /s/ Xxxx X. Xxxxxx
-------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Account Officer
Amendment No. 4 to
Amended and Restated Credit Agreement
for Personnel Group of America, Inc.
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
Amendment No. 4 to
Amended and Restated Credit Agreement
for Personnel Group of America, Inc.
Bank One, NA
----------------------------------------------
[NAME OF LENDER]
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------------
Name: XXXXXX X. XXXXX
Title: FIRST VICE PRESIDENT
Amendment No. 4 to
Amended and Restated Credit Agreement
for Personnel Group of America, Inc.
PNC Bank, National Association
----------------------------------------------
By: /s/ X.X. Xxxxxxxx
-------------------------------------------
Name: X.X. Xxxxxxxx
Title: Assistant Vice President
Amendment No. 4 to
Amended and Restated Credit Agreement
for Personnel Group of America, Inc.
First Union National Bank
----------------------------------------------
[NAME OF LENDER]
By: /s/ Xxxx X. Xxxxxx
-------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
Amendment No. 4 to
Amended and Restated Credit Agreement
for Personnel Group of America, Inc.
Wachovia Bank, NA
----------------------------------------------
[NAME OF LENDER]
By: /s/ Xxxx X. Xxxxxx
-------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
Amendment No. 4 to
Amended and Restated Credit Agreement
for Personnel Group of America, Inc.
EXHIBIT A
Credit Agreement (as amended) is attached
Exhibit A
AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of June 23, 1997
among
PERSONNEL GROUP OF AMERICA, INC.
as Borrower,
THE SUBSIDIARIES OF THE BORROWER
FROM TIME TO TIME PARTY HERETO,
as Guarantors,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTY HERETO
AND
BANK OF AMERICA, N.A.,
formerly NationsBank, N.A.,
as Agent
TABLE OF CONTENTS
SECTION 1 DEFINITIONS ............................................................................ 1
1.1 Definitions ........................................................................... 1
1.2 Computation of Time Periods ........................................................... 24
1.3 Accounting Terms ...................................................................... 25
SECTION 2 CREDIT FACILITIES ...................................................................... 25
2.1 Loans ................................................................................. 25
2.2 Letter of Credit Subfacility .......................................................... 26
SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES ......................................... 31
3.1 Default Rate .......................................................................... 31
3.2 [Reserved] ............................................................................ 31
3.3 Prepayments ........................................................................... 31
3.4 Termination and Reduction of Committed Amount; Extension Options ...................... 33
3.5 Fees .................................................................................. 34
3.6 Capital Adequacy ...................................................................... 35
3.7 [Reserved] ............................................................................ 35
3.8 [Reserved] ............................................................................ 35
3.9 Requirements of Law ................................................................... 35
3.10 Taxes ................................................................................. 36
3.11 Indemnity ............................................................................. 38
3.12 Pro Rata Treatment .................................................................... 38
3.13 Sharing of Payments ................................................................... 39
3.14 Payments, Computations, Etc ........................................................... 40
3.15 Evidence of Debt ...................................................................... 41
3.16 Mandatory Assignment .................................................................. 42
SECTION 4 GUARANTY................................................................................ 42
4.1 The Guarantee ......................................................................... 42
4.2 Obligations Unconditional ............................................................. 43
4.3 Reinstatement ......................................................................... 44
4.4 Certain Additional Waivers ............................................................ 44
4.5 Remedies .............................................................................. 44
4.6 Rights of Contribution ................................................................ 44
4.7 Continuing Guarantee .................................................................. 45
SECTION 5 CONDITIONS ............................................................................. 45
5.1 Closing Conditions .................................................................... 45
5.2 Conditions to all Extensions of Credit ................................................ 47
SECTION 6 REPRESENTATIONS AND WARRANTIES ......................................................... 48
6.1 Financial Condition ................................................................... 48
6.2 No Change; Dividends .................................................................. 49
6.3 Organization; Existence; Compliance with Law .......................................... 49
6.4 Power; Authorization; Enforceable Obligations ......................................... 50
-i-
6.5 No Legal Bar .......................................................................... 50
6.6 No Material Litigation ................................................................ 50
6.7 No Default ............................................................................ 51
6.8 Ownership of Property; Liens .......................................................... 51
6.9 Intellectual Property ................................................................. 51
6.10 No Burdensome Restrictions ............................................................ 51
6.11 Taxes ................................................................................. 51
6.12 ERISA ................................................................................. 52
6.13 Governmental Regulations, Etc ......................................................... 53
6.14 Subsidiaries .......................................................................... 54
6.15 Purpose of Loans and Letters of Credit ................................................ 54
6.16 Environmental Matters ................................................................. 54
6.17 Perfected Security Interests .......................................................... 55
6.18 Borrower's Obligations ................................................................ 55
6.19 Indebtedness .......................................................................... 55
6.20 Investments ........................................................................... 55
6.21 Disclosure ............................................................................ 55
SECTION 7 AFFIRMATIVE COVENANTS................................................................... 56
7.1 Information Covenants ................................................................. 56
7.2 Preservation of Existence and Franchises .............................................. 60
7.3 Books and Records ..................................................................... 60
7.4 Compliance with Law ................................................................... 60
7.5 Payment of Taxes and Other Indebtedness ............................................... 60
7.6 Insurance ............................................................................. 61
7.7 Maintenance of Property ............................................................... 61
7.8 Performance of Obligations ............................................................ 61
7.9 Use of Proceeds ....................................................................... 61
7.10 Audits/Inspections .................................................................... 62
7.11 Financial Covenants ................................................................... 62
7.12 Additional Credit Parties ............................................................. 64
7.13 Ownership of Subsidiaries ............................................................. 64
7.14 Pledged Assets ........................................................................ 65
7.15 [Reserved] ............................................................................ 65
7.16 Field Examination ..................................................................... 65
7.17 Engagement of Financial Advisor to Lenders ............................................ 65
7.18 Deposit Accounts ...................................................................... 65
SECTION 8 NEGATIVE COVENANTS ..................................................................... 66
8.1 Indebtedness .......................................................................... 66
8.2 Liens ................................................................................. 67
8.3 Nature of Business .................................................................... 67
8.4 Consolidation, Merger, Sale or Purchase of Assets, etc ................................ 67
8.5 Advances, Investments, Loans, etc ..................................................... 68
8.6 Restricted Payments ................................................................... 68
8.7 Prepayments of Indebtedness, etc ...................................................... 69
8.8 Transactions with Affiliates .......................................................... 69
-ii-
8.9 Fiscal Year ........................................................................... 70
8.10 Limitation on Restrictions on Subsidiary Dividends and Other Distributions, etc ....... 70
8.11 Issuance and Sale of Subsidiary Stock ................................................. 70
8.12 Sale Leasebacks ....................................................................... 70
8.13 No Further Negative Pledges ........................................................... 70
8.14 No Foreign Subsidiaries ............................................................... 71
8.15 Capital Expenditures .................................................................. 71
8.16 Consolidated Earn-Outs ................................................................ 71
8.17 Financial Advisor to the Borrower ..................................................... 71
SECTION 9 EVENTS OF DEFAULT ...................................................................... 71
9.1 Events of Default ..................................................................... 71
9.2 Acceleration; Remedies ................................................................ 74
SECTION 10 AGENCY PROVISIONS ..................................................................... 75
10.1 Appointment ........................................................................... 75
10.2 Delegation of Duties .................................................................. 76
10.3 Exculpatory Provisions ................................................................ 76
10.4 Reliance on Communications ............................................................ 76
10.5 Notice of Default ..................................................................... 77
10.6 Non-Reliance on Agent and Other Lenders ............................................... 77
10.7 Indemnification ....................................................................... 78
10.8 Agent in its Individual Capacity ...................................................... 78
10.9 Successor Agent ....................................................................... 78
SECTION 11 MISCELLANEOUS ......................................................................... 79
11.1 Notices ............................................................................... 79
11.2 Right of Set-Off ...................................................................... 80
11.3 Benefit of Agreement .................................................................. 80
11.4 No Waiver; Remedies Cumulative ........................................................ 82
11.5 Payment of Expenses, etc .............................................................. 83
11.6 Amendments, Waivers and Consents ...................................................... 83
11.7 Counterparts .......................................................................... 84
11.8 Headings .............................................................................. 84
11.9 Survival .............................................................................. 84
11.10 Governing Law; Submission to Jurisdiction; Venue ...................................... 85
11.11 Severability .......................................................................... 85
11.12 Entirety .............................................................................. 86
11.13 Binding Effect; Amendment and Restatement of Original Credit Agreement ................ 86
11.14 Confidentiality ....................................................................... 86
11.15 Source of Funds ....................................................................... 87
11.16 Conflict .............................................................................. 87
11.17 Settlement of Nursefinders, Inc. Escrow Agreement ..................................... 87
-iii-
SCHEDULES
Schedule 1.1A Investments
Schedule 1.1B Liens
Schedule 1.1C Form of Amended and Restated Pledge Agreement
Schedule 2.1(a) Lenders
Schedule 2.1(b)(i) Form of Notice of Borrowing
Schedule 2.1(e) Form of Amended, Restated and Substituted Note
Schedule 6.4 Required Consents, Authorizations, Notices and Filings
Schedule 6.9 Intellectual Property
Schedule 6.11 Taxes
Schedule 6.14 Subsidiaries
Schedule 7.1(c)(i) Form of Officer's Compliance Certificate
Schedule 7.1(c)(ii) Form of Officer's Compliance Certificate
Schedule 7.1(k) Form of Borrowing Base Certificate
Schedule 7.12 Form of Joinder Agreement
Schedule 7.18 Form of Agency Agreement
Schedule 8.1 Indebtedness
Schedule 11.3(b) Form of Assignment and Acceptance
-iv-
AMENDED AND RESTATED
CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT dated as of June 23, 1997
(the "Credit Agreement"), is by and among PERSONNEL GROUP OF AMERICA, INC., a
Delaware corporation (the "Borrower"), the subsidiaries of the Borrower
identified on the signature pages hereto and such other subsidiaries as may from
time to time become a party hereto (the "Guarantors"), the several lenders
identified on the signature pages hereto and such other lenders as may from time
to time become a party hereto (the "Lenders") and BANK OF AMERICA, N.A.,
formerly NationsBank, N.A., as agent for the Lenders (in such capacity, the
"Agent").
WITNESSETH
WHEREAS, the Borrower, the Guarantors, the Lenders and the Agent
entered into that certain Credit Agreement, dated as of September 30, 1996 (as
amended, the "Original Credit Agreement"), as amended by that certain Amendment
No. 1 to Credit Agreement, dated as of December 13, 1996, that certain Amendment
No. 2 to Credit Agreement, dated as of February 28, 1997, that certain Amendment
No. 3 to Credit Agreement, dated as of April 14, 1997, and that certain
Amendment No. 4 to Credit Agreement and Pledge Agreement, dated as of May 19,
1997;
WHEREAS, the parties hereto have agreed to amend and restate the
Original Credit Agreement as set forth herein;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS
1.1 DEFINITIONS.
As used in this Credit Agreement, the following terms shall have the
meanings specified below unless the context otherwise requires:
"Acquisition Note" means that certain promissory note, dated
as of September 30, 1996, executed by the Borrower to the order of BEST
in the principal amount of $10,950,000, as such promissory note may be
amended, modified, restated or replaced from time to time.
"Additional Credit Party" means each Person that becomes a
Guarantor after the Closing Date by execution of a Joinder Agreement.
"Affiliate" means, with respect to any Person, any other
Person (i) directly or indirectly controlling or controlled by or under
direct or indirect common control with such Person or (ii) directly or
indirectly owning or holding five percent (5%) or more of the equity
interest in such Person. For purposes of this definition, "control"
when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative
to the foregoing.
"Agency Services Address" means Bank of America, N.A.,
NC1-001-15-04, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000,
Attn: Agency Services, or such other address as may be identified by
written notice from the Agent to the Borrower.
"Agent" shall have the meaning assigned to such term in the
heading hereof, together with any successors or assigns.
"Agent's Fee Letter" means that certain letter agreement,
dated as of May 2, 1997, between the Agent and the Borrower, as
amended, modified, supplemented or replaced from time to time.
"Agent's Fees" shall have the meaning assigned to such term in
Section 3.5(c).
"Applicable Percentage" means, for purposes of calculating the
applicable interest rate for any day for any Loan or the applicable
rate of the Unused Fee for any day for purposes of Section 3.5(a) or
the applicable rate of the Letter of Credit Fee for any day for
purposes of Section 3.5(b)(i), the appropriate applicable percentage
corresponding to the Consolidated Leverage Ratio in effect as of the
most recent Calculation Date:
Pricing Grid for the Period from the Closing Date through March 31 2001
Applicable Applicable Applicable
Percentage Percentage Percentage
Pricing for Eurodollar for Letter of for Unused
Level Consolidated Leverage Ratio Loans Credit Fee Fee
------- --------------------------- -------------- ------------- ----------
I Less than 1.25:1.00 0.500% 0.500% 0.125%
II Greater than or equal to 1.25:1.00, 0.750% 0.750% 0.150%
but less than 2.25:1.00
III Greater than or equal to 2.25:1.00, 1.000% 1.000% 0.225%
but less than 3.00:1.00
IV Greater than or equal to 3.00:1.00, 1.250% 1.250% 0.250%
but less than 3.50:1.00
V Greater than or equal to 3.50:1.00 1.375% 1.375% 0.350%
2
Pricing Grid for April 1, 2001 through February 7, 2002
Applicable Applicable
Percentage for Percentage for Applicable
Pricing Eurodollar Letter of Credit Percentage for
Level Consolidated Leverage Ratio Loans Fee Unused Fee
------- --------------------------- -------------- ---------------- --------------
I Less than or equal to 2.50:1.00 2.000% 2.000% 0.250%
II Greater than 2.50:1.00, but less than 2.500% 2.500% 0.375%
or equal to 3.00:1.00
III Greater than 3.00:1.00, but less than 2.750% 2.750% 0.500%
or equal to 3.50:1.00
IV Greater than 3.50:1.00, but less than 3.000% 3.000% 0.500%
or equal to 4.00:1.00
V Greater than 4.00:1.00, but less than 3.250% 3.250% 0.500%
or equal to 4.50:1.00
VI Greater than 4.50:1.00 3.500% 3.500% 0.500%
Pricing Grid for February 8, 2002 and thereafter
Applicable Applicable Applicable
Percentage for Base Percentage for Percentage for
Period Rate Loans Letter of Credit Fee Unused Fee
------ ------------------- -------------------- --------------
From February 8, 2002 through June 23, 2.00% 5.00% 0.50%
2002
From June 24, 2002 through 2.50% 5.50% 0.50%
December 31, 2002
*From January I, 2003 through 3.25% 6.25% 0.50%
June 30, 2003
*From July 1 2003 through 4.25% 7.25% 0.50%
January 1, 2004
*Contingent on extension option being exercised pursuant to Section 3.4(e) of
this Credit Agreement.
provided, however, at such time as the Borrower has permanently reduced
the Committed Amount to $130,000,000 or less, then the Applicable
Percentage for both Base Rate Loans and Letter of Credit Fees shall be
reduced by 0.15% from the respective amounts shown above; provided,
further, at such time as the Borrower has permanently reduced the
Committed Amount to $125,000,000 or less, then the Applicable
Percentage for both Base Rate Loans and Letter of Credit Fees shall be
reduced by 0.25% from the respective amounts shown above.
"Asset Sale" means (i) any sale, lease, transfer or other
disposition (including any such transaction effected by way of merger,
amalgamation or consolidation) by the Borrower or any of its
Subsidiaries subsequent to the date hereof of any asset (including
stock in Subsidiaries of the Borrower), including without limitation
any sale leaseback transaction (whether or not involving a Capital
Lease), but excluding (a) the sale of
3
inventory in the ordinary course of business for fair consideration,
(b) the sale or disposition of machinery and equipment no longer used
or useful in the conduct of such Person's business, (c) the sale of any
asset having a net book value of less than $50,000 and (d) the
relocation of the Borrower's headquarters in Charlotte, North Carolina
and the disposition of the personal property associated with the
current headquarters building and (ii) receipt by the Borrower or any
of its Subsidiaries of any cash insurance proceeds or condemnation
award payable by reason of theft, loss, physical destruction or damage,
taking or similar event with respect to any of the property or assets
of the Borrower and its Subsidiaries.
"Availability" means, as of any date of determination, (i) the
Committed Amount as of such date minus (ii) the sum of (a) the
aggregate principal amount of outstanding Loans on such date plus (b)
LOC Obligations outstanding as of such date.
"Bank of America" means Bank of America, N.A. (formerly
NationsBank, N.A.) and its successors.
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of
the United States Code, as amended, modified, succeeded or replaced
from time to time.
"Bankruptcy Event" means, with respect to any Person, the
occurrence of any of the following with respect to such Person: (i) a
court or governmental agency having jurisdiction in the premises shall
enter a decree or order for relief in respect of such Person in an
involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of such Person or for any substantial part of its Property or
ordering the winding up or liquidation of its affairs; or (ii) there
shall be commenced against such Person an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter
in effect, or any case, proceeding or other action for the appointment
of a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of such Person or for any substantial part of its
Property or for the winding up or liquidation of its affairs, and such
involuntary case or other case, proceeding or other action shall remain
undismissed, undischarged or unbonded for a period of sixty (60)
consecutive days; or (iii) such Person shall commence a voluntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or consent to the entry of an order for relief in
an involuntary case under any such law, or consent to the appointment
or taking possession by a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of such Person or for any
substantial part of its Property or make any general assignment for the
benefit of creditors; or (iv) such Person shall be unable to, or shall
admit in writing its inability to, pay its debts generally as they
become due.
"Base Rate" means, for any day, the rate per annum (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% 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
4
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.
"BEST" means Business Enterprise Systems and Technology, Inc.,
a Washington corporation.
"Borrower" means the Person identified as such in the heading
hereof, together with any permitted successors and assigns.
"Borrower's Obligations" means, without duplication, (i) all
of the obligations of the Borrower to the Lenders (including the
Issuing Lender) and the Agent, whenever arising, under the Credit
Agreement, the Notes or any of the other Credit Documents (including,
but not limited to, any interest accruing after the occurrence of a
Bankruptcy Event with respect to the Borrower, regardless of whether
such interest is an allowed claim under the Bankruptcy Code) and (ii)
all liabilities and obligations, whenever arising, owing from the
Borrower to any Lender, or any Affiliate of a Lender, arising under any
Hedging Agreement.
"Borrowing Base" means, as of any day, an amount equal to the
sum of (i) 85% of Eligible Receivables as set forth in the applicable
Borrowing Base report delivered to the Agent in accordance with Section
7.1(k) plus (ii) the applicable Overadvance.
"Borrowing Base Certificate" shall have the meaning assigned
to such term in Section 7.1(k).
"Business Day" means a day other than a Saturday, Sunday or
other day on which commercial banks in Charlotte, North Carolina are
authorized or required by law to close, except that, when used in
connection with a Eurodollar Loan, such day shall also be a day on
which dealings between banks are carried on in U.S. dollar deposits in
London, England, Charlotte, North Carolina and New York, New York.
"Calculation Date" has the meaning set forth in the definition
of Applicable Percentage.
"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 (a) securities issued or directly and
fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof (provided
5
that the full faith and credit of the United States of America is
pledged in support thereof) having maturities of not more than twelve
months from the date of acquisition, (b) U.S. dollar denominated time
deposits and certificates of deposit of (i) any Lender, or (ii) any
domestic commercial bank of recognized standing (y) having capital and
surplus in excess of $500,000,000 and (z) whose short-term commercial
paper rating from S&P is at least A-1 or the equivalent thereof or from
Xxxxx'x is at least P-1 or the equivalent thereof (any such bank being
an "Approved Lender"), in each case with maturities of not more than
270 days from the date of acquisition, (c) commercial paper and
variable or fixed rate notes issued by any Approved Lender (or by the
parent company thereof) and maturing within six months of the date of
acquisition, (d) repurchase agreements entered into by a Person with a
bank or trust company (including any of the Lenders) or recognized
securities dealer having capital and surplus in excess of $500,000,000
for direct obligations issued by or fully guaranteed by the United
States of America in which such Person shall have a perfected first
priority security interest (subject to no other Liens) and having, on
the date of purchase thereof, a fair market value of at least 100% of
the amount of the repurchase obligations, (e) obligations of any State
of the United States or any political subdivision thereof, the interest
with respect to which is exempt from federal income taxation under
Section 103 of the Code, having a long term rating of at least AA- or
Aa-3 by S&P or Moody's, respectively, and maturing within three years
from the date of acquisition thereof, (f) Investments in municipal
auction preferred stock (i) rated AAA (or the equivalent thereof) or
better by S&P or Aaa (or the equivalent thereof) or better by Moody's
and (ii) with dividends that reset at least once every 365 days and (g)
Investments, classified in accordance with GAAP as current assets, in
money market investment programs registered under the Investment
Company Act of 1940, as amended, which are administered by reputable
financial institutions having capital of at least $100,000,000 and the
portfolios of which are limited to Investments of the character
described in the foregoing subdivisions (a), (b), (c), (e) and (f).
"Change of Control" means the occurrence of any of the
following events: (i) any Person or two or more Persons acting in
concert shall have acquired beneficial ownership, directly or
indirectly, of, or shall have acquired by contract or otherwise, or
shall have entered into a contract or arrangement that, upon
consummation, will result in its or their acquisition of, control over,
Voting Stock of the Borrower (or other securities convertible into such
Voting Stock) representing 30% or more of the combined voting power of
all Voting Stock of the Borrower, (ii) during any period of up to 24
consecutive months, commencing after the Closing Date, individuals who
at the beginning of such 24 month period were directors of the Borrower
(together with any new director whose election by the Borrower's Board
of Directors or whose nomination for election by the Borrower's
shareholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the
beginning of such period or whose election or nomination for election
was previously so approved) cease for any reason to constitute a
majority of the directors of the Borrower then in office or (iii) the
occurrence of a "Change of Control" under and as defined in either the
Subordinated Note Indenture or the Subordinated Notes. 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.
6
"Closing Date" means the date hereof.
"Code" means the Internal Revenue Code of 1986, as amended,
and any successor thereto, as interpreted by the rules and regulations
issued thereunder, in each case as in effect from time to time.
References to sections of the Code shall be construed also to refer to
any successor sections.
"Collateral" means a collective reference to the collateral
which at any time will be covered by the Collateral Documents.
"Collateral Documents" means a collective reference to the
Security Agreement, the Pledge Agreement and such other documents
executed and delivered in connection with the attachment and perfection
of the Agent's security interests and liens arising thereunder,
including without limitation, UCC financing statements and patent and
trademark filings.
"Commitment" means (i) with respect to each Lender, the
commitment of such Lender in an aggregate principal amount at any time
outstanding of up to such Lender's Commitment Percentage of the
Committed Amount, (A) to make Loans in accordance with the provisions
of Section 2.1(a) and (B) to purchase participation interests in
Letters of Credit in accordance with the provisions of Section 2.2(c)
and (ii) with respect to the Issuing Lender, the LOC Commitment.
"Commitment Percentage" means, for any Lender, the percentage
identified as its Commitment Percentage on Schedule 2.1(a), as such
percentage may be modified in connection with any assignment made in
accordance with the provisions of Section 11.3.
"Committed Amount" shall have the meaning assigned to such
term in Section 2.1(a).
"Consolidated Capital Expenditures" means, for any period, all
capital expenditures of the Borrower and its Subsidiaries on a
consolidated basis for such period, as determined in accordance with
GAAP.
"Consolidated Earn-Outs" means, for any period, all earn-out
payments made by the Borrower and its Subsidiaries on a consolidated
basis for such period; provided that, so long as the EBITA (as defined
in the Purchase Agreement) of BEST shall exceed $12,600,000 for the
twelve month period ending on December 31, 1997, Consolidated Earn-Outs
shall exclude the earn-out payment made by the Borrower to BEST
pursuant to Section 3.6(b) of the Purchase Agreement.
"Consolidated EBITDA" means, for any period, the sum of (i)
Consolidated Net Income for such period plus (ii) an amount which, in
the determination of Consolidated Net Income for such period, has been
deducted for (A) interest expense, (B) total Federal, state, local and
foreign income, value added and similar taxes, (C) depreciation and
amortization expense, (D) for the Borrower's fourth quarter of its 2001
fiscal year, Restructuring
7
Charges taken by the Borrower and its Subsidiaries in such period (but
in no event shall all of the add-backs pursuant to this clause (D)
exceed $5,750,000 in the aggregate for the Borrower's fourth quarter of
its 2001 fiscal year), (E) for any period during the Borrower's 2002
fiscal year, Restructuring Charges taken by the Borrower and its
Subsidiaries in such period (but in no event shall all of the add-backs
pursuant to this clause (E) exceed $2,000,000 (plus the amount of any
Restructuring Charges consisting of expenses that may be incurred in
connection with the hiring of an investment advisor to address the
Borrower's capital structure) in the aggregate for the Borrower's 2002
fiscal year), (F) for the Borrower's fourth quarter of its 2001 fiscal
year, non-cash charges taken by the Borrower in connection with the
sale of Paladin Consulting, Inc. (but in no event shall all of the
add-backs pursuant to this clause (F) exceed $7,750,000 in the
aggregate), (G) non-cash intangible asset impairment charges taken by
the Borrower and its Subsidiaries in any such period (but in no event
shall all of the add-backs pursuant to this clause (G) exceed
$400,000,000 in the aggregate) and (H) non-cash charges taken by the
Borrower and its Subsidiaries in connection with the Equity
Appreciation Rights Agreement.
"Consolidated Funded Indebtedness" means, for any date, (i)
the outstanding principal amount of all Funded Indebtedness, without
duplication, of the Borrower and its Subsidiaries as of such date less
(ii) so long as no Loans are outstanding hereunder, the aggregate
amount of cash and Cash Equivalents held by the Borrower as of such
date less (iii) incremental Indebtedness incurred hereunder solely to
fund expenses that may be incurred in connection with the hiring of an
investment advisor to address the Borrower's capital structure.
"Consolidated Interest Coverage Ratio" means, as of the last
day of any fiscal quarter, the ratio of (i) Consolidated EBITDA for the
four-quarter period ending on such date to (ii) Consolidated Interest
Expense as determined on such date.
"Consolidated Interest Expense" means, as of the last day of
any fiscal quarter, interest expense of the Borrower and its
Subsidiaries on a consolidated basis required to be paid in cash (plus
the amortization of ongoing fees previously paid, other than the fee
set forth in the Equity Appreciation Rights Agreement, but excluding
any interest expense on incremental Indebtedness incurred hereunder
solely to fund expenses that may be incurred in connection with the
hiring of an investment advisor to address the Borrower's capital
structure) for the four-fiscal quarter period ending on such day. For
purposes of this Credit Agreement, the interest expense required to be
paid under this Credit Agreement is the Base Rate plus the margin set
forth in the definition of "Applicable Percentage".
"Consolidated Leverage Ratio" means, as of the last day of any
fiscal quarter, the ratio of (i) Consolidated Funded Indebtedness as of
such date to (ii) Consolidated EBITDA for the four-quarter period
ending on such date.
"Consolidated Net Income" means, for any period, (i) net
income after taxes for such period for the Borrower and its
Subsidiaries on a consolidated basis, as determined in accordance with
GAAP plus (ii) to the extent not included in the amount determined
8
pursuant to clause (i) above and as calculated on a pro forma basis,
net income after taxes for such period for any Person acquired by the
Borrower or any of its Subsidiaries during such period (after giving
effect to changes in the operating costs of any acquired Person as if
such changes were in effect for such period and are reasonably expected
to continue).
"Consolidated Tangible Net Worth" means, for any date, total
shareholders' equity of the Borrower and its Subsidiaries on a
consolidated basis as of such date minus (i) net intangible assets
shown on the Borrower's balance sheet as of such date plus (ii) for the
Borrower's fourth quarter of its 2001 fiscal year, Restructuring
Charges taken by the Borrower and its Subsidiaries in such period (but
in no event shall all of the after tax add-backs pursuant to this
clause (ii) exceed $5,750,000 in the aggregate for the Borrower's
fourth quarter of its 2001 fiscal year); provided that add backs
pursuant to this clause (ii) shall be net of the tax effects of such
Restructuring Charges, plus (iii) for any period during the Borrower's
2002 fiscal year, Restructuring Charges taken by the Borrower and its
Subsidiaries in such period (but in no event shall all of the add-backs
pursuant to this clause (iii) exceed $2,000,000 (plus the amount of any
Restructuring Charges consisting of expenses that may be incurred in
connection with the hiring of an investment advisor to address the
Borrower's capital structure) in the aggregate for the Borrower's 2002
fiscal year); provided that add backs pursuant to this clause (iii)
shall be net of the tax effects of such Restructuring Charges plus (iv)
for the Borrower's fourth quarter of its 2001 fiscal year, non-cash
charges taken by the Borrower in order to realize a book loss in
connection with the sale of Paladin Consulting, Inc. (but in no event
shall all of the add-backs pursuant to this clause (iv) exceed
$7,750,000 in the aggregate); provided that add backs pursuant to this
clause (iv) shall be net of the tax effects of such Restructuring
Charges plus (v) non-cash charges taken by the Borrower and its
Subsidiaries in connection with the Equity Appreciation Rights
Agreement, all as determined in accordance with GAAP.
"Consolidated Scheduled Funded Indebtedness Payments" means,
as of the last day of any fiscal quarter, total scheduled payments of
principal on Funded Indebtedness for the Borrower and its Subsidiaries
on a consolidated basis for the four-fiscal quarter period beginning on
the immediately succeeding day. Consolidated Scheduled Funded
Indebtedness Payments shall not include any Consolidated Earn-Outs.
"Consolidated Senior Funded Indebtedness" means, for any date,
(i) the outstanding principal amount of all Consolidated Funded
Indebtedness, without duplication, of the Borrower and its Subsidiaries
as of such date less (ii) the outstanding principal amount of all
Subordinated Indebtedness as of such date.
"Consolidated Senior Leverage Ratio" means, as of the last day
of any fiscal quarter, the ratio of (i) Consolidated Senior Funded
Indebtedness as of such date to (ii) Consolidated EBITDA for the
four-quarter period ending on such date.
"Credit Documents" means a collective reference to this Credit
Agreement, the Notes, the LOC Documents, the Collateral Documents, each
Joinder Agreement, the Agent's Fee Letter, the Equity Appreciation
Rights Agreement and all other related
9
agreements and documents issued or delivered hereunder or thereunder or
pursuant hereto or thereto.
"Credit Party" means any of the Borrower and the Guarantors.
"Debt Issuance" means the issuance of any Indebtedness for
borrowed money (including debt securities) by the Borrower or any of
its Subsidiaries, other than (i) the Loans, (ii) Subordinated
Indebtedness evidencing contingent earn-out payment obligations or
similar obligations or incurred pursuant to Section 8.1(g) hereof, and
(iii) purchase money Indebtedness permitted under Section 8.1(c).
"Default" means any event, act or condition which with notice
or lapse of time, or both, would constitute an Event of Default.
"Dollars" and "$" means dollars in lawful currency of the
United States of America.
"Eligible Receivables" means, as of any date of determination
and without duplication, the aggregate book value of all accounts
receivable, receivables, and obligations for payment created or arising
from the sale of inventory or the rendering of services in the ordinary
course of business (collectively, the "Receivables"), owned by or owing
to the Borrower or any of its Subsidiaries, net of allowances and
reserves for doubtful or uncollectible accounts and sales adjustments
consistent with such Person's internal policies and in any event in
accordance with GAAP, but excluding in any event (i) any Receivable
which is (a) not subject to a perfected, first priority Lien in favor
of the Agent to secure the Borrower's Obligations or (b) subject to any
other Lien that is not a Permitted Lien, (ii) Receivables which are
more than 90 days past due (net of reserves for bad debts in connection
with any such receivables), (iii) 75% of the book value of all
non-past-due Receivables owing from an account debtor if 50% or more or
such account debtor's Receivables are 90 days or more past due, (iv)
Receivables evidenced by notes, chattel paper or other instruments,
unless such notes, chattel paper or instruments have been delivered to
and are in the possession of the Agent, (v) Receivables owing by an
account debtor which is not solvent or is subject to any bankruptcy or
insolvency proceeding of any kind, (vi) Receivables owing by an account
debtor located outside of the United States (unless payment for the
goods shipped is secured by an irrevocable letter of credit in a form
and from an institution acceptable to the Agent), (vii) Receivables
which are contingent or subject to offset, deduction, counterclaim,
dispute or other defense to payment, in each case to the extent of such
offset, deduction, counterclaim, dispute or other defense, (viii)
Receivables for which any direct or indirect Subsidiary or any
Affiliate is the account debtor, (ix) Receivables representing a sale
to the government of the United States of America or any subdivision
thereof unless the Federal Assignment of Claims Act or other similar
applicable law has been complied with to the satisfaction of the Agent
with respect to the granting of a security interest in such Receivable,
and (x) Receivables which fail to meet such other specifications and
requirements as may from time to time be established by the Agent in
its reasonable discretion.
10
"Environmental Laws" means any and all lawful and applicable
Federal, state, local and foreign statutes, laws, regulations,
ordinances, rules, judgments, orders, decrees, permits, concessions,
grants, franchises, licenses, agreements or other governmental
restrictions relating to the environment or to emissions, discharges,
releases or threatened releases of pollutants, contaminants, chemicals,
or industrial, toxic or hazardous substances or wastes into the
environment including, without limitation, ambient air, surface water,
ground water, or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport,
or handling of pollutants, contaminants, chemicals, or industrial,
toxic or hazardous substances or wastes.
"Equity Appreciation Rights Agreement" means that certain
Equity Appreciation Rights Agreement among the Borrower, the Lenders
part thereto and the Agent dated as of February 8, 2002.
"Equity Transaction" means any issuance by the Borrower or any
of its Subsidiaries to any Person of shares of its capital stock or
other equity interests, any shares of its capital stock or other equity
interests pursuant to the exercise of options or warrants or any shares
of its capital stock or other equity interests pursuant to the
conversion of any debt securities to equity.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute thereto, as interpreted by
the rules and regulations thereunder, all as the same may be in effect
from time to time. References to sections of ERISA shall be construed
also to refer to any successor sections.
"ERISA Affiliate" means an entity which is under common
control with any Credit Party within the meaning of Section 4001(a)(14)
of ERISA, or is a member of a group which includes the Borrower and
which is treated as a single employer under Sections 414(b), (c), (m),
or (o) of the Code.
"Eurodollar Loan" means any 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
11
against any other category of liabilities that includes deposits by
reference to which the interest rate of Eurodollar Loans is
determined), whether or not Lender 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 Lender. 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" means such term as defined in Section 9.1.
"Fees" means all fees payable pursuant to Section 3.5.
"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, provide 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 preceding 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 Extension Fee" means a fee equal to the Committed
Amount as of January 1, 2003 multiplied by 0.75%; provided, however, if
on or before December 31, 2002 the Borrower has permanently reduced the
Committed Amount to $130,000,000 or less, then the "First Extension
Fee" shall equal the Committed Amount as of January 1, 2003 multiplied
by 0.60%; provided further, if on or before December 31, 2002 the
Borrower has permanently reduced the Committed Amount to $125,000,000
or less, then the "First Extension Fee" shall equal the Committed
Amount as of January 1, 2003 multiplied by 0.50%.
"First Extension Option" means the Borrower's option to extend
the Termination Date, as more fully set out in Section 3.4(e)(i).
"Fourth Amendment" means that certain Amendment No.4 to
Amended and Restated Credit Agreement dated as of February 8, 2002 by
and among the Borrower, the Guarantors party thereto, the Lenders party
thereto and the Agent.
"Fourth Amendment Effective Date" means February 8, 2002 so
long as all of the conditions precedent to the effectiveness of the
Fourth Amendment are satisfied by the Credit Parties or waived by the
Agent and/or the Lenders, as applicable.
"Funded Indebtedness" means, with respect to any Person,
without duplication, (i) all Indebtedness of such Person for borrowed
money, (ii) all amounts due and owing by
12
such Person under any contingent earn-out agreements to which such
Person is a party, (iii) all purchase money Indebtedness of such
Person, including without limitation the principal portion of all
obligations of such Person under Capital Leases, (iv) all Guaranty
Obligations of such Person with respect to Funded Indebtedness of
another Person, (v) the maximum available amount of all standby letters
of credit or acceptances issued or created for the account of such
Person, (vi) all Funded Indebtedness of another Person secured by a
Lien on any Property of such Person, whether or not such Funded
Indebtedness has been assumed, and (vii) the principal balance
outstanding under any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product
to which such Person is a party, where such transaction is considered
borrowed money indebtedness for tax purposes but is classified as an
operating lease in accordance with GAAP. The Funded Indebtedness of any
Person shall include the Funded Indebtedness of any partnership or
joint venture in which such Person is a general partner or joint
venturer, but shall exclude fees associated with the Equity
Appreciation Rights Agreement.
"GAAP" means generally accepted accounting principles in the
United States applied on a consistent basis and subject to the terms of
Section 1.3 hereof.
"Governmental Authority" means any Federal, state, local or
foreign court or governmental agency, authority, instrumentality or
regulatory body.
"Guarantor" means each of those Persons identified as a
"Guarantor" on the signature pages hereto, and each Additional Credit
Party which may hereafter execute a Joinder Agreement, together with
their successors and permitted assigns.
"Guaranty Obligations" means, with respect to any Person,
without duplication, any obligations of such Person (other than
endorsements in the ordinary course of business of negotiable
instruments for deposit or collection) guaranteeing or intended to
guarantee any Indebtedness of any other Person in any manner, whether
direct or indirect, and including without limitation any obligation,
whether or not contingent, (i) to purchase any such Indebtedness or any
Property constituting security therefor, (ii) to advance or provide
funds or other support for the payment or purchase of any such
Indebtedness or to maintain working capital, solvency or other balance
sheet condition of such other Person (including without limitation keep
well agreements, maintenance agreements, comfort letters or similar
agreements or arrangements) for the benefit of any holder of
Indebtedness of such other Person, (iii) to lease or purchase Property,
securities or services primarily for the purpose of assuring the holder
of such Indebtedness, or (iv) to otherwise assure or hold harmless the
holder of such Indebtedness against loss in respect thereof. The amount
of any Guaranty Obligation hereunder shall (subject to any limitations
set forth therein) be deemed to be an amount equal to the outstanding
principal amount (or maximum principal amount, if larger) of the
Indebtedness in respect of which such Guaranty Obligation is made.
"Hedging Agreements" means any interest rate protection
agreement or foreign currency exchange agreement between the Borrower
and any Lender, or any Affiliate of a Lender.
13
"Indebtedness" of any Person means (i) all obligations of such
Person for borrowed money, (ii) all obligations of such Person
evidenced by bonds, debentures, notes or similar instruments, or upon
which interest payments are customarily made, (iii) 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), (iv) 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, (v) all obligations of such Person under
take-or-pay or similar arrangements or under commodities agreements,
(vi) 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, (vii) all Guaranty
Obligations of such Person (excluding, to the extent entered in the
ordinary course of business, any Guaranty Obligations of the Borrower
with respect to Operating Leases of any Subsidiary of the Borrower),
(viii) the principal portion of all obligations of such Person under
Capital Leases, (ix) all obligations of such Person in respect of
interest rate protection agreements, foreign currency exchange
agreements, commodity purchase or option agreements or other interest
or exchange rate or commodity price hedging agreements (including, but
not limited to, the Hedging Agreements), (x) 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), (xi) 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 and (xii) the principal balance outstanding under any
synthetic lease, tax retention operating lease, off-balance sheet loan
or similar off-balance sheet financing product to which such Person is
a party, where such transaction is considered borrowed money
indebtedness for tax purposes but is classified as an operating lease
in accordance with GAAP. 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.
"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 Telerate, 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
14
the LIBO page on that service for the purpose of displaying London
interbank offered rates of major banks).
"Intercompany Indebtedness" means any Indebtedness of a Credit
Party (other than the Borrower) which (i) is owing to the Borrower or
any other Credit Party and (ii) by its terms is specifically
subordinated in right of payment to the prior payment of the
obligations of the Credit Parties under this Credit Agreement and the
other Credit Documents on terms and conditions reasonably satisfactory
to the Required Lenders.
"Interest Payment Date" means as to any Loan, the last day of
each calendar month, the date of repayment of principal of such Loan
and the Termination Date. 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.
"Investment", in any Person, means any loan or advance to such
Person, any purchase or other acquisition of any capital stock,
warrants, rights, options, obligations or other securities of, or
equity interest in, such Person, any capital contribution to such
Person or any other investment in such Person, including, without
limitation, any Guaranty Obligation incurred for the benefit of such
Person. In computing the amount involved in any Investment, (i)
undistributed earnings of, and interest accrued in respect of
Indebtedness owing by, any such other Person accrued after the date of
such Investment shall not be included, (ii) there shall not be deducted
from the amounts invested in any such other Person any amounts received
as earnings (in the form of dividends, interest or otherwise) on such
Investment or as loans or advances from such other Person, and (iii)
unrealized increases or decreases in value, or write-ups, write-downs
or write-offs, of Investments in any such other Person shall be
disregarded.
"Issuing Lender" means Bank of America.
"Issuing Lender Fees" shall have the meaning assigned to such
term in Section 3.5(b)(iii).
"Joinder Agreement" means a Joinder Agreement substantially in
the form of Schedule 7.12 hereto, executed and delivered by an
Additional Credit Party in accordance with the provisions of Section
7.12.
"Lenders" means each of the Persons identified as a "Lender"
on the signature pages hereto, and each Person which may become a
Lender by way of assignment in accordance with the terms hereof,
together with their successors and permitted assigns.
"Letter of Credit" means any letter of credit issued by the
Issuing Lender for the account of the Borrower in accordance with the
terms of Section 2.2.
"Letter of Credit Fee" shall have the meaning assigned to such
term in Section 3.5(b)(i).
15
"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).
"Liquidity" means, as of any date of determination, the sum of
(i) Consolidated EBITDA plus (ii) Availability; provided, however, that
(A) as of May 31, 2002, Consolidated EBITDA shall be determined based
upon Consolidated EBITDA for the five-month period ending as of such
date, (B) as of November 30, 2002, Consolidated EBITDA shall be
determined based upon Consolidated EBITDA for the six-month period
ending as of such date, and (C) as of May 31, 2003, Consolidated EBITDA
shall be determined based upon Consolidated EBITDA for the six-month
period ending as of such date.
"Loan" or "Loans" shall have the meaning assigned to such term
in Section 2.1(a).
"LOC Commitment" means the commitment of the Issuing Lender to
issue Letters of Credit in an aggregate face amount at any time
outstanding (together with the amounts of any unreimbursed drawings
thereon) of up to the LOC Committed Amount.
"LOC Committed Amount" shall have the meaning assigned to such
term in Section 2.2.
"LOC Documents" means, with respect to any Letter of Credit,
such Letter of Credit, any amendments thereto, any documents delivered
in connection therewith, any application therefor, and any agreements,
instruments, guarantees or other documents (whether general in
application or applicable only to such Letter of Credit) governing or
providing for (i) the rights and obligations of the parties concerned
or at risk or (ii) any collateral security for such obligations.
"LOC Obligation "means, at any time, the sum of (i) the
maximum amount which is, or at any time thereafter may become,
available to be drawn under Letters of Credit then outstanding,
assuming compliance with all requirements for drawings referred to in
such Letters of Credit plus (ii) the aggregate amount of all drawings
under Letters of Credit honored by the Issuing Lender but not
theretofore reimbursed.
"Material Adverse Effect" means a material adverse effect on
(i) the condition (financial or otherwise), operations, business,
assets, liabilities or prospects of the Borrower and its Subsidiaries
taken as a whole, (ii) the ability of any Credit Party to perform any
material obligation under the Credit Documents to which it is a party
or (iii) the material rights and remedies of the Lenders under the
Credit Documents.
"Materials of Environmental Concern" means any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products or any hazardous or toxic substances, materials or wastes,
defined or regulated as such in or under any Environmental
16
Laws, including, without limitation, asbestos, polychlorinated
biphenyls and urea-formaldehyde insulation.
"Moody's" means Xxxxx'x Investors Service, Inc., or any
successor or assignee of the business of such company in the business
of rating securities.
"Multiemployer Plan" means a Plan which is a multiemployer
plan as defined in Sections 3(37) or 4001(a)(3) of ERISA.
"Multiple Employer Plan" means a Plan which the Borrower, any
Subsidiary of the Borrower or any ERISA Affiliate and at least one
employer other than the Borrower, any Subsidiary of the Borrower or any
ERISA Affiliate are contributing sponsors.
"NationsBank Liquidity Line" means that certain $10,000,000
liquidity line provided by NationsBank, N.A. to the Borrower, as
evidenced by that certain promissory note, dated as of June 2, 1997,
executed by the Borrower in favor of NationsBank, N.A., which liquidity
line has been terminated.
"Net Proceeds" means cash proceeds, which in the aggregate
exceed $500,000 for any single transaction, received by the Borrower or
any of its Subsidiaries from time to time in connection with any Asset
Sale, any Equity Transaction or any Debt Issuance, net of actual costs
(including, without limitation, commissions and underwriting discounts,
if any) and taxes paid by such Person in connection with and
attributable to such Asset Sale, Equity Transaction or Debt Issuance;
provided, however, "Net Proceeds" shall not include the aggregate cash
proceeds received by the Borrower from time to time in connection with
the issuance by the Borrower of any capital stock or other equity
interests pursuant to stock options granted under the Borrower's 1995
Equity Participation Plan, or any successor plan, or any shares issued
under the Borrower's 1997 Employee Stock Purchase Plan, or any
successor plan. It is understood that "Net Proceeds" shall include,
without limitation, any cash or Cash Equivalents received upon the
realization or payment of, or sale or other disposition of, any
non-cash consideration received by any Credit Party in connection with
any Asset Sale, Equity Transaction or Debt Issuance, except that, for
purposes of the Committed Amount reduction required pursuant to Section
3.3(c)(iii), "Net Proceeds" shall exclude proceeds received by InfoTech
Services, Inc. on the promissory note it received as partial
consideration upon the sale of Paladin Consulting, Inc.
"Non-Excluded Taxes" means such term as is defined in Section
3.10.
"Note" means a promissory note of the Borrower in favor of a
Lender delivered pursuant to Section 2.1(e) and evidencing the Loans
of such Lender, as such promissory note may be amended, modified,
restated or replaced from time to time.
"Notice of Borrowing" means a written notice of borrowing in
substantially the form of Schedule 2.1(b)(i), as required by Section
2.1(b)(i).
17
"Operating Lease" means, as applied to any Person, any lease
(including, without limitation, leases which may be terminated by the
lessee at any time) of any Property (whether real, personal or mixed)
which is not a Capital Lease other than any such lease in which that
Person is the lessor.
"Original Credit Agreement" means such term as defined in the
preamble hereto.
"Overadvance" means for the Fiscal Quarter of the Borrower set
forth in the table below, the Dollar amount set forth below
corresponding to such Fiscal Quarter:
Fiscal Quarter Overadvance Amount
-------------- ------------------
1st Quarter - 2002 $73,000,000
2nd Quarter - 2002 $73,000,000
3rd Quarter - 2002 $72,500,000
4th Quarter - 2002 $72,000,000
1st Quarter - 2003 $72,000,000
2nd Quarter - 2003 $70,000,000
3rd Quarter - 2003 $66,500,000
4th Quarter - 2003 $64,500,000
provided, however, that each such Overadvance Amount set forth above
shall be permanently reduced by an amount equal to all reductions in
the Committed Amount pursuant to Section 3.3(c) or Section 3.4(a);
provided, further, that if such reduction in the Committed Amount in
the preceding proviso involves the application of proceeds from a sale
that includes the sale of Eligible Receivables (or an entity that owns
Eligible Receivables), then the amount of the reduction in the
Overadvance Amount pursuant to the preceding proviso shall not include
85% of such Eligible Receivables sold.
"Participation Interest" means, the extension of credit by a
Lender by way of a purchase of a participation in any Letters of Credit
or LOC Obligations as provided in Section 2.2(c) or in any Loans as
provided in Section 3.13.
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA and any
successor thereof.
"Permitted Investments" means Investments which are either (i)
cash and Cash Equivalents; (ii) accounts receivable created, acquired
or made by the Borrower or any of its Subsidiaries 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 by the Borrower or
any of its Subsidiaries in settlement of accounts receivable (created
in the ordinary course of business) from insolvent or bankrupt
obligors; (iv) Investments existing as of the Fourth Amendment
Effective Date and set forth in Schedule x.xX, (v) Guaranty Obligations
permitted by Section 8.1; (vi) transactions explicitly permitted by
clauses (i), (ii) and (iv) of Section 8.8; (vii) advances or loans to
directors, officers, agents, customers or suppliers that do not exceed
$250,000 in the aggregate at any one time outstanding; (viii) short
term advances or loans to employees in
18
the ordinary course of business for such employees' ordinary business
expenses that do not exceed $2,000,000 in the aggregate at any one time
outstanding (ix) Intercompany Indebtedness permitted by Section 8.1;
(x) Investments resulting from the settlement of litigation between
BEST Consulting, an unincorporated division of InfoTech Services, Inc.,
and two of its former senior officers, the proposed terms of which have
been disclosed to the Lenders; and (xi) other Investments, provided
that (a) the aggregate outstanding amount of all such other Investments
taken together shall not exceed $3,000,000; and (b) should
XxxxxxXxxx.xxx, Inc. be released from its Guaranty Obligations under
this Credit Agreement pursuant to Section 4.8 hereof, Investments in
XxxxxxXxxx.xxx, Inc. shall be Permitted Investments pursuant to this
clause (xi) only to the extent that (1) the aggregate amount of such
Investments does not exceed $1,000,000; and (2) the Borrower has
pledged to the Agent, for the benefit of the Lenders, all of its equity
interests in XxxxxxXxxx.xxx, Inc.
"Permitted Liens" means:
(i) Liens in favor of the Agent on behalf of the
Lenders;
(ii) Liens (other than Liens created or imposed
under ERISA) for taxes, assessments or governmental charges or
levies not yet due or Liens for taxes being contested in good
faith by appropriate proceedings for which adequate reserves
determined in accordance with GAAP have been established (and
as to which the Property subject to any such Lien is not yet
subject to foreclosure, sale or loss on account thereof);
(iii) statutory Liens of landlords and Liens of
carriers, warehousemen, mechanics, materialmen and suppliers
and other Liens imposed by law or pursuant to customary
reservations or retentions of title arising in the ordinary
course of business, provided that such Liens secure only
amounts not yet due and payable or, if due and payable, are
unfiled and no other action has been taken to enforce the same
or are being contested in good faith by appropriate
proceedings for which adequate reserves determined in
accordance with GAAP have been established (and as to which
the Property subject to any such Lien is not yet subject to
foreclosure, sale or loss on account thereof);
(iv) Liens (other than Liens created or imposed
under ERISA) incurred or deposits made by the Borrower and its
Subsidiaries in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other
types of social security, or to secure the performance of
tenders, statutory obligations, bids, leases, government
contracts, performance and return-of-money bonds and other
similar obligations (exclusive of obligations for the payment
of borrowed money);
(v) Liens in connection with attachments or
judgments (including judgment or appeal bonds) provided that
the judgments secured shall, within 30 days after the entry
thereof, have been discharged or execution thereof stayed
pending
19
appeal, or shall have been discharged within 30 days after the
expiration of any such stay;
(vi) easements, rights-of-way, restrictions
(including zoning restrictions), minor defects or
irregularities in title and other similar charges or
encumbrances not, in any material respect, impairing the use
of the encumbered Property for its intended purposes;
(vii) Liens on Property securing purchase money
Indebtedness (including Capital Leases) to the extent
permitted under Section 8.1(c), provided that any such Lien
attaches to such Property concurrently with or within 90 days
after the acquisition thereof;
(viii) normal and customary rights of setoff upon
deposits of cash in favor of banks or other depository
institutions;
(ix) other Liens, provided that the aggregate
amount Indebtedness secured by such Liens shall not exceed an
aggregate principal amount of $1,000,000; and
(x) Liens existing as of the Fourth Amendment
Effective Date and set forth on Schedule 1.1B.
"Person" means any individual, partnership, joint venture,
firm, corporation, limited liability company, association, trust or
other enterprise (whether or not incorporated) or any Governmental
Authority.
"Plan" means any employee benefit plan (as defined in Section
3(3) of ERISA) which is covered by ERISA and with respect to which the
Borrower, any Subsidiary of the Borrower or any ERISA Affiliate is (or,
if such plan were terminated at such time, would under Section 4069 of
ERISA be deemed to be) an "employer" within the meaning of Section 3(5)
of ERISA.
"Pledge Agreement" means the amended and restated pledge and
security agreement dated as of the Closing Date in the form of Schedule
1.1C to be executed in favor of the Agent by each Credit Party which
owns any stock in any Subsidiary of the Borrower.
"Prime Rate" means the rate of interest per annum publicly
announced from time to time by Bank of America as its prime rate in
effect at its principal office in Charlotte, North Carolina, with each
change in the Prime Rate being effective on the date such change is
publicly announced as effective (it being understood and agreed that
the Prime Rate is a reference rate used by Bank of America in
determining interest rates on certain loans and is not intended to be
the lowest rate of interest charged on any extension of credit by Bank
of America to any debtor).
20
"Pro Forma Basis" means, with respect to any Pro Forma
Transaction, that such Pro Forma 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 Pro
Forma Transaction with respect to which the Agent and the Lenders have
received the officer's certificate in accordance with the provisions of
Section 7.1(c)(i). With respect to any incurrence, assumption or
retirement of Indebtedness as referred to in Section 8.1(h), any such
Indebtedness which has a floating or formula rate shall have an implied
rate of interest for the applicable period equal to the rate which is
or would be in effect with respect to such Indebtedness as at the
relevant date of determination.
"Pro Forma Transaction" means any incurrence, assumption or
retirement of Indebtedness as referred to in Section 8.1(h).
"Property" means any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
"Purchase Agreement" means that certain asset purchase
agreement, dated as of September 20, 1996, among the Borrower, BEST,
Xxxxx Xxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxx XxXxx, Xxx Xxxxxxx and Xxxxxx
XxXxxx, as the same may be amended, modified, restated or replaced from
time to time.
"Register" shall have the meaning given such term in Section
113(c).
"Regulation D, U, or X" means Regulation D, U or X,
respectively, of the Board of Governors of the Federal Reserve System
as from time to time in effect and any successor to all or a portion
thereof.
"Release" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping
or disposing into the environment (including the abandonment or
discarding of barrels, containers and other closed receptacles
containing any Materials of Environmental Concern).
"Reportable Event" means any of the events set forth in
Section 4043(c) of ERISA, other than those events as to which the
post-event notice requirement is waived under subsections .13, .14,
.18, .19, or .20 of PBGC Reg. ss. 2615.
"Required Lenders" means, at any time, Lenders which are then
in compliance with their obligations hereunder (as determined by the
Agent) and holding in the aggregate at least 66 2/3% of (i) the
Commitments (and Participation Interests therein) or (ii) if the
Commitments have been terminated, the outstanding Loans and
Participation Interests (including the Participation Interests of the
Issuing Lender in any Letters of Credit).
"Requirement of Law" means, as to any Person, the certificate
of incorporation and by-laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental
21
Authority, in each case applicable to or binding upon such Person or
any of its material property is subject.
"Restricted Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class
of stock of the Borrower or any of its Subsidiaries, now or hereafter
outstanding, (ii) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect,
of any shares of any class of stock of the Borrower or any of its
Subsidiaries, now or hereafter outstanding, (iii) any payment made to
retire, or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire shares of any class of stock of the
Borrower or any of its Subsidiaries, now or hereafter outstanding and
(iv) any payment or prepayment of principal of, premium, if any, or
interest on, redemption, purchase, retirement, defeasance, sinking fund
or similar payment with respect to, any Subordinated Indebtedness.
"Restructuring Charges" means for any period non-recurring
restructuring charges taken by the Borrower and its Subsidiaries in
such period including, without limitation, severance payments,
abandoned lease obligations, office relocation expenses, re-branding
expenses, asset write-offs, legal, accounting, audit, tax, financial
advisor and other professional advisor fees but only to the extent the
foregoing relate to the Borrower's restructuring and rationalization of
its operations.
"S&P" means Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies, Inc., or any successor or assignee of the
business of such division in the business of rating securities.
"Second Extension Fee" means a fee equal to the Committed
Amount as of June 30, 2003 multiplied by 1.00%; provided, however, if
on or before June 30, 2003 the Borrower has permanently reduced the
Committed Amount to $130,000,000 or less, then the "Second Extension
Fee" shall equal the Committed Amount as of June 30, 2003 multiplied by
0.85%; provided, further, if on or before June 30, 2003 the Borrower
has permanently reduced the Committed Amount to $125,000,000 or less,
then the "Second Extension Fee" shall equal the Committed Amount as of
June 30, 2003 multiplied by 0.75%.
"Second Extension Option" means the Borrower's option to
extend the Termination Date, as more fully set at in Section
3.4(e)(ii).
"Security Agreement" means a security agreement in form and
substance satisfactory to the Agent to be executed in favor of the
Agent by the Borrower and each Subsidiary, as amended, modified,
restated or supplemented from time to time.
"Single Employer Plan" means any Plan which is covered by
Title IV of ERISA, but which is not a Multiemployer Plan.
"Solvent" or "Solvency" means, with respect to any Person as
of a particular date, that on such date (i) such Person is able to
realize upon its assets and pay its debts and other
22
liabilities, contingent obligations and other commitments as they
mature in the normal course of business, (ii) such Person does not
intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and
liabilities mature in their ordinary course, (iii) such Person is not
engaged in a business or a transaction, and is not about to engage in a
business or a transaction, for which such Person's Property would
constitute unreasonably small capital after giving due consideration to
the prevailing practice in the industry in which such Person is engaged
or is to engage, (iv) the fair value of the Property of such Person is
greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person and (v) the present
fair saleable value of the assets of such Person is not less than the
amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured. In computing
the amount of contingent liabilities at any time, it is intended that
such liabilities will be computed at the amount which, in light of all
the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured
liability.
"Subordinated Indebtedness" means (i) any Indebtedness arising
under the Subordinated Note Documents, (ii) any Indebtedness evidenced
by the Acquisition Note and (iii) any additional Indebtedness
(including contingent earn-outs) incurred by the Borrower or any of its
Subsidiaries which by its terms is specifically subordinated in right
of payment to the prior payment of the obligations of the Credit
Parties under this Credit Agreement and the other Credit Documents on
terms and conditions satisfactory to the Agent.
"Subordinated Note" means any of the 5 3/4% Convertible
Subordinated Notes due 2004 issued by the Borrower in favor of the
Subordinated Noteholders pursuant to the Subordinated Note Indenture,
as such Subordinated Notes may be amended, modified, restated or
supplemented and in effect from time to time.
"Subordinated Note Documents" means a collective reference to
the Subordinated Note Indenture, the Subordinated Notes and all other
related agreements and documents issued or delivered thereunder or
pursuant thereto.
"Subordinated Note Indenture" means that certain Indenture,
dated as of the Closing Date, by and between the Borrower and First
Union National Bank, as trustee, as the same may be amended, modified,
restated or supplemented and in effect from time to time.
"Subordinated Noteholder" means any of the holders from time
to time of the Subordinated Notes.
"Subsidiary" means, as to any Person, (a) any corporation more
than 50% of whose stock of any class or classes having by the terms
thereof ordinary voting power to elect a majority of the directors of
such corporation (irrespective of whether or not at the time, any class
or classes of such corporation shall have or might have voting power by
reason of the happening of any contingency) is at the time owned by
such Person directly or indirectly through Subsidiaries, and (b) any
partnership, association, joint venture or other entity in
23
which such Person directly or indirectly through Subsidiaries has more
than 50% equity interest at any time.
"Termination Date" means, subject to Section 3.4(e), January
1, 2003.
"Termination Event" means (i) with respect to any Plan, the
occurrence of a Reportable Event or the substantial cessation of
operations (within the meaning of Section 4062(e) of ERISA); (ii) the
withdrawal by the Borrower, any Subsidiary of the Borrower or any ERISA
Affiliate from a Multiple Employer Plan during a plan year in which it
was a substantial employer (as such term is defined in Section
4001(a)(2) of ERISA), or the termination of a Multiple Employer Plan;
(iii) the distribution of a notice of intent to terminate or the actual
termination of a Plan pursuant to Section 4041(a)(2) or 4041A of ERISA;
(iv) the institution of proceedings to terminate or the actual
termination of a Plan by the PBGC under Section 4042 of ERISA; (v) any
event or condition which might constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to
administer, any Plan; or (vi) the complete or partial withdrawal of the
Borrower, any Subsidiary of the Borrower or any ERISA Affiliate from a
Multiemployer Plan.
"Third Amendment" means that certain Amendment No. 3 to
Amended and Restated Credit Agreement dated as of March 21, 2001 by and
among the Borrower, the Guarantors party thereto, the Lenders party
thereto and the Agent.
"Third Amendment Effective Date" means the date on which all
of the conditions precedent to the effectiveness of the Third Amendment
are satisfied by the Credit Parties or waived by the Agent and/or the
Required Lenders, as applicable.
"Unused Committed Amount" means, for any period, the amount by
which (a) the then applicable Committed Amount exceeds (b) the daily
average sum for such period of (i) the outstanding aggregate principal
amount of all Loans plus (ii) the outstanding aggregate principal
amount of all LOC Obligations.
"Unused Fee" shall have the meaning assigned to such term in
Section 3.5(a).
"Unused Fee Calculation Period" shall have the meaning
assigned to such term in Section 3.5(a).
"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.
1.2 COMPUTATION OF TIME PERIODS.
For purposes of computation of periods of time hereunder, the word
"from" means "from and including" and the words "to" and "until" each mean "to
but excluding."
24
1.3 ACCOUNTING TERMS.
Except as otherwise expressly provided herein, all accounting terms
used herein shall be interpreted, and all financial statements and certificates
and reports as to financial matters required to be delivered to the Lenders
hereunder shall be prepared, in accordance with GAAP applied on a consistent
basis. All calculations made for the purposes of determining compliance with
this Credit Agreement shall (except as otherwise expressly provided herein) be
made by application of GAAP applied on a basis consistent with the most recent
annual or quarterly financial statements delivered pursuant to Section 7.1
hereof (or, prior to the delivery of the first financial statements pursuant to
Section 7.1 hereof, consistent with the financial statements as at December 29,
1996); provided, however, if (a) the Borrower shall object to determining such
compliance on such basis at the time of delivery of such financial statements
due to any change in GAAP or the rules promulgated with respect thereto or (b)
the Agent or the Required Lenders shall so object in writing within 30 days
after delivery of such financial statements, then such calculations shall be
made on a basis consistent with the most recent financial statements delivered
by the Borrower to the Lenders as to which no such objection shall have been
made.
SECTION 2
CREDIT FACILITIES
2.1 LOANS.
(a) Commitment. Subject to the terms and conditions hereof and in
reliance upon the representations and warranties set forth herein, each Lender
severally agrees to make available to the Borrower such Lender's Commitment
Percentage of revolving credit loans requested by the Borrower in Dollars
("Loans") from time to time from the Closing Date until the Termination Date, or
such earlier date as the Commitments shall have been terminated as provided
herein for the purposes hereinafter set forth; provided, however, that the sum
of the aggregate principal amount of outstanding Loans shall not exceed the
lesser of (i) ONE HUNDRED THIRTY SIX MILLION DOLLARS ($136,000,000) (as such
aggregate maximum amount may be reduced from time to time as provided in Section
3.4, the "Committed Amount") and (ii) the Borrowing Base; provided, further, (A)
with regard to each Lender individually, such Lender's outstanding Loans shall
not exceed such Lender's Commitment Percentage of the lesser of (i) the
Committed Amount, and (ii) the Borrowing Base; and (B) with regard to the
Lenders collectively, the aggregate principal amount of outstanding Loans plus
LOC Obligations outstanding shall not exceed the lesser of (1) the Committed
Amount and (2) the Borrowing Base. All loans shall be Base Rate Loans, and may
be repaid and reborrowed in accordance with the provisions hereof.
(b) Loan Borrowings.
(i) Notice of Borrowing. The Borrower shall request a
Loan borrowing by written notice (or telephone notice promptly
confirmed in writing) to the Agent not later than 11:00 A.M.
(Charlotte, North Carolina time) on the Business Day prior to the date
of
25
the requested borrowing. Each such request for borrowing shall be
irrevocable and shall specify (A) that a Loan is requested, (B) the
date of the requested borrowing (which shall be a Business Day), and
(C) the aggregate principal amount to be borrowed. The Agent shall give
notice to each affected Lender promptly upon receipt of each Notice of
Borrowing pursuant to this Section 2.1(b)(i), the contents thereof and
each such Lender's share of any borrowing to be made pursuant thereto.
(ii) Minimum Amounts. Each Loan shall be in a minimum
aggregate principal amount of $500,000 and integral multiples of
$100,000 in excess thereof (or the remaining amount of the Committed
Amount, if less).
(iii) Advances. Each Lender will make its Commitment
Percentage of each Loan borrowing available to the Agent for the
account of the Borrower as specified in Section 3.14(a), or in such
other manner as the Agent may specify in writing, by 1:00 P.M.
(Charlotte, North Carolina time) on the date specified in the
applicable Notice of Borrowing in Dollars and in funds immediately
available to the Agent. Such borrowing will then be made available to
the Borrower by the Agent by crediting the account of the Borrower on
the books of such office with the aggregate of the amounts made
available to the Agent by the Lenders and in like funds as received by
the Agent.
(c) Repayment. The principal amount of all Loans shall be due and
payable in full on the Termination Date.
(d) Interest. Subject to the provisions of Section 3.1, all Loans
shall bear interest at a per annum rate equal to the Base Rate plus the
Applicable Percentage. Interest on Loans shall be payable in arrears on each
applicable Interest Payment Date (or at such other times as may be specified
herein).
(e) Notes. The Loans made by each Lender shall be evidenced by a
duly executed promissory note of the Borrower to such Lender in an original
principal amount equal to such Lender's Commitment Percentage of the Committed
Amount and in substantially the form of Schedule 2.1(e).
2.2 LETTER OF CREDIT SUBFACILITY.
(a) Issuance. Subject to the terms and conditions hereof and of
the LOC Documents, if any, and any other terms and conditions which the Issuing
Lender may reasonably require, the Lenders will participate in the issuance by
the Issuing Lender from time to time of such Letters of Credit in Dollars from
the Closing Date until the Termination Date as the Borrower may request, in a
form acceptable to the Issuing Lender; provided, however, that (i) the LOC
Obligations outstanding shall not at any time exceed TWENTY MILLION DOLLARS
($20,000,000) (the "LOC Committed Amount") and (ii) the sum of the aggregate
principal amount of outstanding Loans plus LOC Obligations outstanding shall not
at any time exceed the lesser of (A) the Committed Amount and (B) the Borrowing
Base. No Letter of Credit shall (x) have an original expiry date more than one
year from the date of issuance or (y) as originally issued or as extended, have
an expiry date extending beyond the Termination Date (as then in effect), unless
(1) such
26
Letter of Credit will expire within one (1) year of the Termination Date, (2)
such Letter of Credit shall be fully cash collateralized on and after the
Termination Date in accordance with Section 3.3(b)(i)(B), and (3) the Issuing
Lender shall have consented to such expiry date. 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 Lender at least
three (3) Business Days prior to the requested date of issuance. The Issuing
Lender will, at least quarterly and more frequently upon request, disseminate to
each of the Lenders a detailed report specifying the Letters of Credit which are
then issued and outstanding and any activity with respect thereto which may have
occurred since the date of the prior report, and including therein, among other
things, the beneficiary, the face amount, expiry date as well as any payment or
expirations which may have occurred.
(c) Participation. Each Lender, upon issuance of a Letter of
Credit, shall be deemed to have purchased without recourse a risk participation
from the applicable Issuing Lender 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 Commitment
Percentages of the Lenders) and shall absolutely, unconditionally and
irrevocably assume, as primary obligor and not as surety, and be obligated to
pay to the Issuing Lender 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 Lender's participation in any Letter of Credit, to the extent
that the Issuing Lender has not been reimbursed as required hereunder or under
any such Letter of Credit, each such Lender shall pay to the Issuing Lender its
pro rata share of such unreimbursed drawing in same day funds on the day of
notification by the Issuing Lender of an unreimbursed drawing pursuant to the
provisions of subsection (d) hereof. The obligation of each Lender to so
reimburse the Issuing Lender shall be absolute and unconditional and shall not
be affected by the occurrence of a Default, an Event of Default or any other
occurrence or event. Any such reimbursement shall not relieve or otherwise
impair the obligation of the Borrower to reimburse the Issuing Lender under any
Letter of Credit, together with interest as hereinafter provided.
(d) Reimbursement. In the event of any drawing under any Letter of
Credit, the Issuing Lender will promptly notify the Borrower. Unless the
Borrower shall immediately notify the Issuing Lender that the Borrower intends
to otherwise reimburse the Issuing Lender for such drawing, the Borrower shall
be deemed to have requested that the Lenders make a 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 Lender on the day of
drawing under any Letter of Credit (either with the proceeds of a Loan obtained
hereunder or otherwise) in same day funds. If the Borrower shall fail to
reimburse the Issuing Lender as provided hereinabove, the unreimbursed amount of
such drawing shall bear interest at a per annum rate equal to the Base Rate plus
the Applicable Percentage 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 Lender, the Agent,
the Lenders, the beneficiary of the Letter of Credit drawn upon or any other
Person, including without
27
limitation any defense based on any failure of the Borrower or any other Credit
Party to receive consideration or the legality, validity, regularity or
unenforceability of the Letter of Credit. The Issuing Lender will promptly
notify the other Lenders of the amount of any unreimbursed drawing and each
Lender shall promptly pay to the Agent for the account of the Issuing Lender in
Dollars and in immediately available funds, the amount of such Lender's pro rata
share of such unreimbursed drawing. Such payment shall be made on the day such
notice is received by such Lender from the Issuing Lender if such notice is
received at or before 2:00 P.M. (Charlotte, North Carolina time) otherwise such
payment shall be made at or before 12:00 Noon (Charlotte, North Carolina time)
on the Business Day next succeeding the day such notice is received. If such
Lender does not pay such amount to the Issuing Lender in full upon such request,
such Lender shall, on demand, pay to the Agent for the account of the Issuing
Lender interest on the unpaid amount during the period from the date of such
drawing until such Lender pays such amount to the Issuing Lender in full at a
rate per annum equal to, if paid within two (2) Business Days of the date that
such Lender is required to make payments of such amount pursuant to the
preceding sentence, the Federal Funds Rate and thereafter at a rate equal to the
Base Rate. Each Lender's obligation to make such payment to the Issuing Lender,
and the right of the Issuing Lender to receive the same, shall be absolute and
unconditional, shall not be affected by any circumstance whatsoever and without
regard to the termination of this Credit Agreement or the Commitments hereunder,
the existence of a Default or Event of Default or the acceleration of the
obligations of the Borrower hereunder and shall be made without any offset,
abatement, withholding or reduction whatsoever. Simultaneously with the making
of each such payment by a Lender to the Issuing Lender, such Lender shall,
automatically and without any further action on the part of the Issuing Lender
or such Lender, acquire a participation in an amount equal to such payment
(excluding the portion of such payment constituting interest owing to the
Issuing Lender) in the related unreimbursed drawing portion of the LOC
Obligation and in the interest thereon and in the related LOC Documents, and
shall have a claim against the Borrower with respect thereto.
(e) Repayment with Loans. On any day on which the Borrower shall
have requested, or been deemed to have requested, a Loan advance to reimburse a
drawing under a Letter of Credit, the Agent shall give notice to the Lenders
that a 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 Loan advance
comprised of Base Rate Loans shall be immediately made to the Borrower by all
Lenders (notwithstanding any termination of the Commitments pursuant to Section
9.2) pro rata based on the respective Commitment Percentages of the Lenders
(determined before giving effect to any termination of the Commitments pursuant
to Section 9.2) and the proceeds thereof shall be paid directly to the Issuing
Lender for application to the respective LOC Obligations. Each such Lender
hereby irrevocably agrees to make its pro rata share of each such 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
Loans otherwise required hereunder, (ii) whether any conditions specified in
Section 5.2 are then satisfied, (iii) whether a Default or an Event of Default
then exists, (iv) failure for any such request or deemed request for Loan to be
made by the time otherwise required hereunder, (v) whether the date of such
borrowing is a date on which Loans are otherwise permitted to be made hereunder
or (vi) any termination of the Commitments relating thereto immediately prior to
or contemporaneously with such borrowing. In the event that any Loan cannot for
any reason be made on the date otherwise required above (including, without
limitation, as a
28
result of the commencement of a proceeding under the Bankruptcy Code with
respect to the Borrower or any Credit Party), then each such Lender hereby
agrees that it shall forthwith purchase (as of the date such borrowing would
otherwise have occurred, but adjusted for any payments received from the
Borrower on or after such date and prior to such purchase) from the Issuing
Lender such participation in the outstanding LOC Obligations as shall be
necessary to cause each such Lender to share in such LOC Obligations ratably
(based upon the respective Commitment Percentages of the Lenders (determined
before giving effect to any termination of the Commitments pursuant to Section
9.2)), provided that at the time any purchase of participation pursuant to this
sentence is actually made, the purchasing Lender shall be required to pay to the
Issuing Lender, to the extent not paid to the Issuer by the Borrower in
accordance with the terms of subsection (d) 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 Loan advance, 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 Credit Agreement,
including without limitation Section 2.2(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 Credit Agreement for such Letter of Credit and such
statement shall not affect the Borrower's reimbursement obligations hereunder
with respect to such Letter of Credit.
(g) Renewal, Extension. The renewal or extension of any Letter of
Credit shall, for purposes hereof, be treated in all respects the same as the
issuance of a new Letter of Credit hereunder.
(h) Uniform Customs and Practices. The Issuing Lender may have the
Letters of Credit be subject to The Uniform Customs and Practice for Documentary
Credits, as published as of the date of issue by the International Chamber of
Commerce (the "UCP"), in which case the UCP may be incorporated therein and
deemed in all respects to be a part thereof.
(i) Indemnification; Nature of Issuing Lender's Duties. (i) In
addition to its other obligations under this Section 2.2, the Borrower
hereby agrees to protect, indemnify, pay and save the Issuing Lender
harmless from and against any and all claims, demands, liabilities,
damages, losses, costs, charges and expenses (including reasonable
attorneys' fees) that the Issuing Lender may incur or be subject to as
a consequence, direct or indirect, of (A) the issuance of any Letter of
Credit or (B) the failure of the Issuing Lender to honor a drawing
under a Letter of Credit as a result of any act or omission, whether
rightful or wrongful, of any present or future de jure or de facto
government or governmental authority (all such acts or omissions,
herein called "Government Acts").
(ii) As between the Borrower and the Issuing Lender, the
Borrower shall assume all risks of the acts, omissions or misuse of any
Letter of Credit by the beneficiary thereof. The Issuing Lender shall
not be responsible: (A) for the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in
connection
29
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 Lender, including,
without limitation, any Government Acts. None of the above shall
affect, impair, or prevent the vesting of the Issuing Lender's rights
or powers hereunder.
(iii) In furtherance and extension and not in limitation of
the specific provisions hereinabove set forth, any action taken or
omitted by the Issuing Lender, under or in connection with any Letter
of Credit or the related certificates, if taken or omitted without
gross negligence or bad faith, shall not put such Issuing Lender under
any resulting liability to the Borrower or any other Credit Party. It
is the intention of the parties that this Credit Agreement shall be
construed and applied to protect and indemnify the Issuing Lender
against any and all risks involved in the issuance of the Letters of
Credit, all of which risks are hereby assumed by the Borrower (on
behalf of itself and each of the other Credit Parties), including,
without limitation, any and all Government Acts. The Issuing Lender
shall not, in any way, be liable for any failure by the Issuing Lender
or anyone else to pay any drawing under any Letter of Credit as a
result of any Government Acts or any other cause beyond the control of
the Issuing Lender.
(iv) Nothing in this subsection (h) is intended to limit
the reimbursement obligations of the Borrower contained in subsection
(d) above. The obligations of the Borrower under this subsection (h)
shall survive the termination of this Credit Agreement. No act or
omissions of any current or prior beneficiary of a Letter of Credit
shall in any way affect or impair the rights of the Issuing Lender to
enforce any right, power or benefit under this Credit Agreement.
(v) Notwithstanding anything to the contrary contained in
this subsection (h), the Borrower shall have no obligation to indemnify
the Issuing Lender in respect of any liability incurred by the Issuing
Lender (A) arising out of the gross negligence or willful misconduct of
the Issuing Lender, as determined by a court of competent jurisdiction,
or (B) caused by the Issuing Lender's failure to pay under any Letter
of Credit after presentation to it of a request strictly complying with
the terms and conditions of such Letter of Credit, as determined by a
court of competent jurisdiction, unless such payment is prohibited by
any law, regulation, court order or decree.
(j) Responsibility of Issuing Lender. It is expressly understood
and agreed that the obligations of the Issuing Lender hereunder to the Lenders
are only those expressly set forth in this Credit Agreement and that the Issuing
Lender shall be entitled to assume that the conditions precedent set forth in
Section 5.2 have been satisfied unless it shall have acquired actual knowledge
30
that any such condition precedent has not been satisfied; provided, however,
that nothing set forth in this Section 2.2 shall be deemed to prejudice the
right of any Lender to recover from the Issuing Lender any amounts made
available by such Lender to the Issuing Lender pursuant to this Section 2.2 in
the event that it is determined by a court of competent jurisdiction that the
payment with respect to a Letter of Credit constituted gross negligence or
willful misconduct on the part of the Issuing Lender.
(k) Conflict with LOC Documents. In the event of any conflict
between this Credit Agreement and any LOC Document (including any letter of
credit application), this Credit Agreement shall control.
SECTION 3
OTHER PROVISIONS RELATING TO CREDIT FACILITIES
3.1 DEFAULT RATE.
Upon the occurrence, and during the continuance, of an Event of
Default, the principal of and, to the extent permitted by law, interest on the
Loans and any other amounts owing hereunder or under the other Credit Documents
shall bear interest, payable on demand, at a per annum rate 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 plus the Applicable Percentage).
3.2 [RESERVED].
3.3 PREPAYMENTS.
(a) Voluntary Prepayments. The Borrower shall have the right to
prepay Loans in whole or in part from time to time, subject to Section 3.11, but
otherwise without premium or penalty; provided, however, that each such partial
prepayment of Loans shall be in a minimum principal amount of $500,000 or such
lesser amount as may be approved by the Agent. Subject to the foregoing terms,
amounts prepaid under this Section 3.3(a) shall be applied as the Borrower may
elect or, if the Borrower has not so specified, first to Base Rate Loans and
then (after all Loans have been repaid) to cash collateralize the LOC
Obligations (in a manner satisfactory to the Agent).
(b) Mandatory Prepayments and Cash Collateralization.
(i) (A) Committed Amount. If at any time, the sum of
the aggregate principal amount of outstanding Loans plus LOC
Obligations outstanding shall exceed the lesser of (I) the
Committed Amount and (II) the Borrowing Base, the Borrower
promises to prepay immediately the outstanding principal
balance on the Loans and (after all Loans have been repaid)
cash collateralize the LOC Obligations (in a manner
satisfactory to the Agent) in an amount sufficient to
eliminate such excess (to be applied as set forth in Section
3.3(c) below). Without limiting the
31
foregoing, each Credit Party acknowledges and agrees that the
Committed Amount will be automatically reduced on the dates
and in the amounts set forth in Section 3.4(b), and that a
mandatory prepayment will be required on each such date to the
extent necessary to cause the sum of the aggregate principal
amount of outstanding Loans plus LOC Obligations outstanding
not to exceed the lesser of (I) the reduced Committed Amount
as of such date and (II) the Borrowing Base.
(B) LOC Committed Amount/LOC Expiry. If at any
time, the aggregate principal amount of LOC Obligations shall
exceed the LOC Committed Amount, the Borrower immediately
shall cash collateralize the LOC Obligations (in a manner
satisfactory to the Agent) in an amount sufficient to
eliminate such excess. If any Letter of Credit remains
outstanding and unexpired or uncancelled on the Termination
Date, then the Borrower shall immediately cash collateralize
such Letter of Credit (in a manner satisfactory to the Agent)
in an amount equal to the maximum amount which is, or at any
time thereafter may become, available to be drawn under such
Letter of Credit.
(ii) Asset Sales. Immediately upon the occurrence of any
Asset Sale, the Borrower shall prepay the Loans and (after all Loans
have been repaid) cash collateralize the LOC Obligations (in a manner
satisfactory to the Agent) in an amount equal to 100% of the Net
Proceeds of the related Asset Sale (to be applied as set forth in
Section 3.3(c) below).
(iii) Equity Transactions. Immediately upon the occurrence
of any Equity Transaction, the Borrower shall prepay the Loans and
(after all Loans have been repaid) cash collateralize the LOC
Obligations (in a manner satisfactory to the Agent) in an amount equal
to 100% of the Net Proceeds of the related Equity Transaction (to be
applied as set forth in Section 3.3(c) below).
(iv) Debt Issuances. Immediately upon the consummation of
any Debt Issuance, the Borrower shall prepay the Loans and (after all
Loans have been repaid) cash collateralize the LOC Obligations (in a
manner satisfactory to the Agent) in an amount equal to 100% of the Net
Proceeds of the related Debt Issuance (to be applied as set forth in
Section 3.3(c) below).
(c) Application of Mandatory Prepayments. All amounts required to
be paid pursuant to Section 3.3(b) shall be applied as follows:
(i) with respect to all amounts prepaid pursuant to
Section 33(b)(i)(A), to Loans and (after all Loans have been repaid) to
a cash collateral account in respect of LOC Obligations;
(ii) with respect to all amounts prepaid pursuant to
Section 3.3(b)(i)(B), to a cash collateral account in respect of LOC
Obligations;
(iii) with respect to all amounts prepaid pursuant to
Sections 3.3(b)(ii) and 3.3(b)(iv) to Loans and (after all Loans have
been repaid) to a cash collateral account in
32
respect of LOC Obligations (with a corresponding reduction in the
Committed Amount in an amount equal to 100% of the Net Proceeds of the
related Asset Sale or Debt Issuance, rounded down to the nearest
$500,000; provided, however, no such corresponding reduction in the
Committed Amount shall be required for any Net Proceeds which
constitute cash proceeds from the Nursefinders, Inc. escrow account);
and
(iv) with respect to all amounts prepaid pursuant to
Section 3.3(b)(iii) to Loans and (after all Loans have been repaid) to
a cash collateral account in respect of LOC Obligations (with a
corresponding reduction in the Committed Amount in an amount equal to
100% of the Net Proceeds of the related Equity Transaction, rounded up
or down to the nearest $500,000).
3.4 TERMINATION AND REDUCTION OF COMMITTED AMOUNT; EXTENSION
OPTIONS.
(a) Voluntary Reductions. The Borrower may from time to time
permanently reduce or terminate the Committed Amount in whole or in part (in
minimum aggregate amounts of $1,000,000 or in integral multiples of $1,000,000
in excess thereof (or, if less, the full remaining amount of the then applicable
Committed Amount)) upon five Business Days' prior written notice to the Agent;
provided, however, no such termination or reduction shall be made which would
cause the aggregate principal amount of outstanding Loans plus LOC Obligations
outstanding to exceed the lesser of (i) the Committed Amount and (ii) the
Borrowing Base unless, concurrently with such termination or reduction, the
Loans are repaid to the extent necessary to eliminate such excess. The
Commitments of the Lenders and the Issuing Lender shall automatically terminate
on the Termination Date. The Agent shall promptly notify each affected Lender of
receipt by the Agent of any notice from the Borrower pursuant to this Section
3.4(a).
(b) [Reserved].
(c) Termination Date. The Commitments of the Lenders and the LOC
Commitment of the Issuing Lender shall automatically terminate on the
Termination Date.
(d) General. The Borrower shall pay to the Agent for the account
of the Lenders in accordance with the terms of Section 3.5(a), on the date of
each termination or reduction of the Committed Amount, the Unused Fee accrued
through the date of such termination or reduction on the amount of the Committed
Amount so terminated or reduced.
(e) Extension Options.
(i) If (i) the Borrower has given the Agent and the
Lenders at least 30 days prior written notice of its desire to extend
the Termination Date, (ii) as of January 1, 2003, each of the
conditions precedent set forth in clauses (ii), (iii) and (iv) of
Section 5.2 is then satisfied (or waived by ail of the Lenders, as
applicable), as certified by a responsible officer of the Borrower in
an officer's certificate, the form of which shall be satisfactory to
the Agent, and (iii) on or before January 1, 2003 the Borrower has paid
the First Extension Fee to the Agent for the benefit of the Lenders,
then the Borrower may exercise the First Extension Option to extend the
Termination Date to June 30, 2003.
33
(ii) If (i) the Borrower has given the Agent and the
Lenders at least 30 days prior written notice of its desire to extend
the Termination Date, (ii) as of June 30, 2003, each of the conditions
precedent set forth in clauses (ii), (iii) and (iv) of Section 5.2 is
then satisfied (or waived by all of the Lenders, as applicable), as
certified by a responsible officer of the Borrower in an officer's
certificate, the form of which shall be satisfactory to the Agent, and
(iii) on or before June 30, 2003 the Borrower has paid the Second
Extension Fee to the Agent for the benefit of the Lenders, then the
Borrower may exercise the Second Extension Option to extend the
Termination Date to January 1, 2004.
3.5 FEES.
(a) Unused Fee. In consideration of the Commitments of the Lenders
hereunder, the Borrower agrees to pay to the Agent for the account of each
Lender a fee (the "Unused Fee") on the Unused Committed Amount computed at a per
annum rate for each day during the applicable Unused Fee Calculation Period
(hereinafter defined) at a rate equal to the Applicable Percentage in effect
from time to time. The Unused Fee commenced to accrue on September 30, 1996 and
is due and payable in arrears on the last business day of each calendar month
(and any date that the Committed Amount is reduced as provided in Section 3.4(a)
and the Termination Date) for the immediately preceding month (or portion
thereof) (each such month or portion thereof for which the Unused Fee is payable
hereunder being herein referred to as an "Unused Fee Calculation Period").
(b) Letter of Credit Fees.
(i) Letter of Credit Issuance Fee. In consideration of
the issuance of Letters of Credit hereunder, the Borrower promises to
pay to the Agent for the account of each Lender a fee (the "Letter of
Credit Fee") on such Lender's Commitment Percentage of the average
daily maximum amount available to be drawn under each such Letter of
Credit computed at a per annum rate for each day from the date of
issuance to the date of expiration equal to the Applicable Percentage.
The Letter of Credit Fee will be payable monthly in arrears on the last
Business Day of each calendar month for the immediately preceding month
(or a portion thereof).
(ii) Issuing Lender Fees. In addition to the Letter of
Credit Fee payable pursuant to clause (i) above, the Borrower promises
to pay to the Issuing Lender for its own account without sharing by the
other Lenders (A) a letter of credit fronting and negotiation fee equal
to 0.125% of the average daily maximum amount available to be drawn
under each Letter of Credit computed at a per annum rate for each day
from the date of issuance to the date of expiration and (B) the
customary charges from time to time of the Issuing Lender with respect
to the issuance, amendment, transfer, administration, cancellation and
conversion of, and drawings under, such Letters of Credit
(collectively, the "Issuing Lender Fees").
(c) Administrative Fees. The Borrower agrees to pay to the Agent,
for its own account, the fees referred to in the Agent's Fee Letter
(collectively, the "Agent's Fees").
34
3.6 CAPITAL ADEQUACY.
If any Lender has determined, after the date hereof, that the adoption
or the becoming effective of, or any change in, or any change by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof in the interpretation or administration
of, any applicable law, rule or regulation regarding capital adequacy, or
compliance by such Lender with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable agency, has or would have the effect of reducing the rate of
return on such Lender's capital or assets as a consequence of its commitments or
obligations hereunder to a level below that which such Lender could have
achieved but for such adoption, effectiveness, change or compliance (taking into
consideration such Lender's policies with respect to capital adequacy), then,
upon notice from such Lender to the Borrower, the Borrower shall be obligated to
pay to such Lender such additional amount or amounts as will compensate such
Lender for such reduction. Each determination by any such Lender of amounts
owing under this Section shall, absent manifest error, be conclusive and binding
on the parties hereto.
3.7 [RESERVED].
3.8 [RESERVED].
3.9 REQUIREMENTS OF LAW.
If, after the date hereof, the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof applicable to
any Lender, or compliance by any Lender 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 Lender becomes a Lender):
(a) shall subject such Lender to any tax of any kind
whatsoever with respect to any Letter of Credit or change the basis of
taxation of payments to such Lender in respect thereof (except for (i)
Non-Excluded Taxes covered by Section 3.10 (including Non-Excluded
Taxes imposed solely by reason of any failure of such Lender to comply
with its obligations under Section 3.10(b)) and (ii) 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 Lender 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 Lender; or
(c) shall impose on such Lender any other condition
(excluding any tax of any kind whatsoever);
35
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of participating in Letters
of Credit or to reduce any amount receivable hereunder in respect thereof, then,
in any such case, upon notice to the Borrower from such Lender, through the
Agent, in accordance herewith, the Borrower shall be obligated to promptly pay
such Lender, upon its demand, any additional amounts necessary to compensate
such Lender for such increased cost or reduced amount receivable. If any Lender
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 Lender 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 Lender, 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
Credit Agreement and the payment of the Loans and all other amounts payable
hereunder.
3.10 TAXES.
(a) Except as provided below in this subsection, all payments made
by the Borrower under this Credit Agreement and any 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 Lender 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 Lender 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 Lender,
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 Lender,
applicable lending office, branch or affiliate other than a connection arising
solely from such Lender having executed, delivered or performed its obligations,
or received payment under or enforced, this Credit Agreement or any Notes. 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 Lender hereunder or under any Notes, (A) the
amounts so payable to the Agent or such Lender shall be increased to the extent
necessary to yield to the Agent or such Lender (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 Credit Agreement and any Notes,
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 Lender that is not organized under the laws of the United States
of America or a state thereof if such Lender 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
Lender, 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
36
Non-Excluded Taxes when due to the appropriate taxing authority or fails to
remit to the Agent the required receipts or other required documentary evidence,
the Borrower shall indemnify the Agent and the Lenders for any incremental
taxes, interest or penalties that may become payable by the Agent or any Lender
as a result of any such failure. The agreements in this subsection shall survive
the termination of this Credit Agreement and the payment of the Loans and all
other amounts payable hereunder.
(b) Each Lender 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 Credit Agreement or Notes to such Lender, 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 Credit Agreement and any Notes 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 Lender 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 Lender'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 Credit Agreement and any Notes (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 Lender to an exemption from withholding with
respect to payments under this Credit Agreement and any Notes;
37
unless in any such case any change in treaty, law or regulation has
occurred after the date such Person becomes a Lender hereunder which
renders all such forms inapplicable or which would prevent such Lender
from duly completing and delivering any such form with respect to it
and such Lender so advises the Borrower and the Agent. Each Person that
shall become a Lender or a participant of a Lender pursuant to
subsection 11.3 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 Lender the obligations of such participant of a Lender
pursuant to this subsection (b) shall be determined as if the
participant of a Lender were a Lender except that such participant of a
Lender shall furnish all such required forms, certifications and
statements to the Lender from which the related participation shall
have been purchased.
3.11 INDEMNITY.
The Borrower promises to indemnify each Lender and to hold each Lender
harmless from any loss or expense which such Lender may sustain or incur (other
than through such Lender'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 Credit 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 Credit 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 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 Lender) which would have accrued to such
Lender on such amount by placing such amount on deposit for a comparable period
with leading banks in the interbank Eurodollar market. The covenants of the
Borrower set forth in this Section 3.11 shall survive the termination of this
Credit Agreement and the payment of the Loans and all other amounts payable
hereunder.
3.12 PRO RATA TREATMENT.
Except to the extent otherwise provided herein:
(a) Loans. Each Loan, each payment or prepayment of
principal of any Loan or reimbursement obligations arising from
drawings under Letters of Credit, each payment of interest on the Loans
or reimbursement obligations arising from drawings under Letters of
Credit, each payment of Unused Fees, each payment of the Standby Letter
of Credit Fee, each payment of the Trade Letter of Credit Fee, each
reduction of the Committed Amount and each conversion or extension of
any Loan, shall be allocated pro rata among the Lenders
38
in accordance with the respective principal amounts of their
outstanding Loans and Participation Interests.
(b) Advances. Unless the Agent shall have been notified
in writing by any Lender prior to a borrowing that such Lender will not
make the amount that would constitute its ratable share of such
borrowing available to the Agent, the Agent may assume that such Lender
is making such amount available to the Agent, and the Agent may, in
reliance upon such assumption, make available to the Borrower a
corresponding amount. If such amount is not made available to the Agent
by such Lender within the time period specified therefor hereunder,
such Lender shall pay to the Agent, on demand, such amount with
interest thereon at a rate equal to the Federal Funds Rate for the
period until such Lender makes such amount immediately available to the
Agent. A certificate of the Agent submitted to any Lender with respect
to any amounts owing under this subsection shall be conclusive in the
absence of manifest error.
3.13 SHARING OF PAYMENTS.
The Lenders agree among themselves that, in the event that any Lender
shall obtain payment in respect of any Loan, LOC Obligations or any other
obligation owing to such Lender under this Credit Agreement through the exercise
of a right of setoff, banker's lien or counterclaim, or pursuant to a secured
claim under Section 506 of Title 11 of the United States Code or other security
or interest arising from, or in lieu of, such secured claim, received by such
Lender under any applicable bankruptcy, insolvency or other similar law or
otherwise, or by any other means, in excess of its pro rata share of such
payment as provided for in this Credit Agreement, such Lender shall promptly
purchase from the other Lenders a participation in such Loans, LOC Obligations
and other obligations in such amounts, and make such other adjustments from time
to time, as shall be equitable to the end that all Lenders share such payment in
accordance with their respective ratable shares as provided for in this Credit
Agreement. The Lenders further agree among themselves that if payment to a
Lender obtained by such Lender through the exercise of a right of setoff,
banker's lien, counterclaim or other event as aforesaid shall be rescinded or
must otherwise be restored, each Lender which shall have shared the benefit of
such payment shall, by repurchase of a participation theretofore sold, return
its share of that benefit (together with its share of any accrued interest
payable with respect thereto) to each Lender whose payment shall have been
rescinded or otherwise restored. The Borrower agrees that any Lender so
purchasing such a participation may, to the fullest extent permitted by law,
exercise all rights of payment, including setoff, banker's lien or counterclaim,
with respect to such participation as fully as if such Lender were a holder of
such Loan, LOC Obligations or other obligation in the amount of such
participation. Except as otherwise expressly provided in this Credit Agreement,
if any Lender or the Agent shall fail to remit to the Agent or any other Lender
an amount payable by such Lender or the Agent to the Agent or such other Lender
pursuant to this Credit Agreement on the date when such amount is due, such
payments shall be made together with interest thereon for each date from the
date such amount is due until the date such amount is paid to the Agent or such
other Lender at a rate per annum equal to the Federal Funds Rate. If under any
applicable bankruptcy, insolvency or other similar law, any Lender receives a
secured claim in lieu of a setoff to which this Section 3.13 applies, such
Lender shall, to the extent practicable, exercise its rights in respect of such
secured claim in a manner
39
consistent with the rights of the Lenders under this Section 3.13 to share in
the benefits of any recovery on such secured claim.
3.14 PAYMENTS, COMPUTATIONS, ETC.
(a) Except as otherwise specifically provided herein, all payments
hereunder shall be made to the Agent in dollars in immediately available funds,
without offset, deduction, counterclaim or withholding of any kind, at the
Agent's office specified in Schedule 2.1 (a) not later than 2:00 P.M.
(Charlotte, North Carolina time) on the date when due. Payments received after
such time shall be deemed to have been received on the next succeeding Business
Day. The Agent may (but shall not be obligated to) debit the amount of any such
payment which is not made by such time to any ordinary deposit account of the
Borrower maintained with the Agent (with notice to the Borrower). The Borrower
shall, at the time it makes any payment under this Credit Agreement, specify to
the Agent the Loans, LOC Obligations, Fees, interest or other amounts payable by
the Borrower hereunder to which such payment is to be applied (and in the event
that it fails so to specify, or if such application would be inconsistent with
the terms hereof, the Agent shall distribute such payment to the Lenders in such
manner as the Agent may determine to be appropriate in respect of obligations
owing by the Borrower hereunder, subject to the terms of Section 3.12(a)). The
Agent will distribute such payments to such Lenders, if any such payment is
received prior to 12:00 Noon (Charlotte, North Carolina time) on a Business Day
in like funds as received prior to the end of such Business Day and otherwise
the Agent will distribute such payment to such Lenders on the next succeeding
Business Day. Whenever any payment hereunder shall be stated to be due on a day
which is not a Business Day, the due date thereof shall be extended to the next
succeeding Business Day (subject to accrual of interest and Fees for the period
of such extension), except that in the case of Eurodollar Loans, if the
extension would cause the payment to be made in the next following calendar
month, then such payment shall instead be made on the next preceding Business
Day. Except as expressly provided otherwise herein, all computations of interest
and fees shall be made on the basis of actual number of days elapsed over a year
of 360 days, except with respect to computation of interest on Base Rate Loans
which (unless the Base Rate is determined by reference to the Federal Funds
Rate) shall be calculated based on a year of 365 or 366 days, as appropriate.
Interest shall accrue from and include the date of borrowing, but exclude the
date of payment.
(b) Allocation of Payments After Event of Default. Notwithstanding
any other provisions of this Credit Agreement to the contrary, after the
occurrence and during the continuance of an Event of Default, all amounts
collected or received by the Agent or any Lender on account of the Borrower's
Obligations or any other amounts outstanding under any of the Credit Documents
or in respect of the Collateral shall be paid over or delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket costs
and expenses (including without limitation reasonable attorneys' fees)
of the Agent in connection with enforcing the rights of the Lenders
under the Credit Documents and any protective advances made by the
Agent with respect to the Collateral under or pursuant to the terms of
the Collateral Documents;
SECOND, to payment of any fees owed to the Agent;
40
THIRD, to the payment of all reasonable out-of-pocket costs
and expenses (including without limitation, reasonable attorneys' fees)
of each of the Lenders in connection with enforcing its rights under
the Credit Documents or otherwise with respect to the Borrower's
Obligations owing to such Lender;
FOURTH, to the payment of all of the Borrower's Obligations
consisting of accrued fees and interest;
FIFTH, to the payment of the outstanding principal amount of
the Borrower's Obligations;
SIXTH, to all other Borrower's 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 Lenders shall receive an amount equal
to its pro rata share (based on the proportion that the then outstanding Loans
held by such Lender bears to the aggregate then outstanding Loans) of amounts
available to be applied pursuant to clauses "THIRD", "FOURTH", "FIFTH" and
"SIXTH" above.
3.15 EVIDENCE OF DEBT.
(a) Each Lender shall maintain an account or accounts evidencing
each Loan made by such Lender to the Borrower from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Credit Agreement. Each Lender will make reasonable efforts to
maintain the accuracy of its account or accounts and to promptly update its
account or accounts from time to time, as necessary.
(b) The Agent shall maintain the Register pursuant to Section
11.3(c) hereof, and a subaccount for each Lender, in which Register and
subaccounts (taken together) shall be recorded (i) the amount, type and Interest
Period of each such Loan hereunder, (ii) the amount of any principal or interest
due and payable or to become due and payable to each Lender hereunder and (iii)
the amount of any sum received by the Agent hereunder from or for the account of
the Borrower and each Lender's share thereof. The Agent will make reasonable
efforts to maintain the accuracy of the subaccounts referred to in the preceding
sentence and to promptly update such subaccounts from time to time, as
necessary.
(c) The entries made in the accounts, Register and subaccounts
maintained pursuant to subsection (b) of this Section 3.15 (and, if consistent
with the entries of the Agent, subsection (a)) shall be prima facie evidence of
the existence and amounts of the obligations of the Borrower therein recorded;
provided, however, that the failure of any Lender or the Agent to maintain any
such account, such Register or such subaccount, as applicable, or any error
therein, shall not in any
41
manner affect the obligation of the Borrower to repay the Loans made by such
Lender in accordance with the terms hereof.
3.16 MANDATORY ASSIGNMENT.
In the event any Lender delivers to the Borrower any notice in
accordance with Section 3.9, then, provided that no Default or Event of Default
has occurred and is continuing at such time, the Borrower may, at its own
expense (such expense to include any transfer fee payable to the Agent under
Section 11.3(b)), and in its sole discretion require such Lender to transfer and
assign in whole or in part, without recourse (in accordance with and subject to
the terms and conditions of Section 11.3(b)), all or part of its interests,
rights and obligations under this Credit Agreement to any assignee which shall
assume such assigned obligations, provided that (i) such assignee shall be (a)
any Lender or any Affiliate or Subsidiary of a Lender, or (b) any other
commercial bank, financial institution or "accredited investor" (as defined in
Regulation D of the Securities and Exchange Commission) reasonably acceptable to
the Agent and the Required Lenders, (ii) such assignment shall not conflict with
any law, rule or regulation or order of any court or other Governmental
Authority and (iii) the Borrower or such assignee shall have paid to the
assigning Lender in immediately available funds the principal of and interest
accrued to the date of such payment on the Loans made by it hereunder and all
other amounts owed to it hereunder (including, without limitation, any amounts
owing pursuant to Section 3.9).
SECTION 4
GUARANTY
4.1 THE GUARANTEE.
Each of the Guarantors hereby jointly and severally guarantees to each
Lender, each Affiliate of a Lender that enters into a Hedging Agreement and the
Agent as hereinafter provided the prompt payment of the Borrower's 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 Borrower's 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 Borrower's
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 Hedging 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
42
under applicable law (whether federal or state and including, without
limitation, the Bankruptcy Code).
4.2 OBLIGATIONS UNCONDITIONAL.
The obligations of the Guarantors under Section 4.1 hereof are joint
and several, absolute and unconditional, irrespective of the value, genuineness,
validity, regularity or enforceability of any of the Credit Documents or Hedging
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 Borrower's Obligations, and, to the fullest extent permitted by
applicable law, irrespective of any other circumstance whatsoever which might
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor, it being the intent of this Section 4.2 that the obligations of the
Guarantors hereunder shall be absolute and unconditional under any and all
circumstances. Each Guarantor agrees that such Guarantor shall have no right of
subrogation, indemnity, reimbursement or contribution against the Borrower or
any other Guarantor of the Borrower's Obligations for amounts paid under this
Guaranty until such time as the Lenders (and any Affiliates of Lenders entering
into Hedging Agreements) have been paid in full, all Commitments under the
Credit Agreement have been terminated and no Person or Governmental Authority
shall have any right to request any return or reimbursement of funds from the
Lenders in connection with monies received under the Credit Documents or Hedging
Agreements. Without limiting the generality of the foregoing, it is agreed that,
to the fullest extent permitted by law, the occurrence of any one or more of the
following shall not alter or impair the liability of any Guarantor hereunder
which shall remain absolute and unconditional as described above:
(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 Borrower's 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 Hedging Agreement or any other
agreement or instrument referred to in the Credit Documents or Hedging
Agreements shall be done or omitted;
(iii) the maturity of any of the Borrower's Obligations
shall be accelerated, or any of the Borrower's Obligations shall be
modified, supplemented or amended in any respect, or any right under
any of the Credit Documents, any Hedging Agreement or any other
agreement or instrument referred to in the Credit Documents or Hedging
Agreements shall be waived or any other guarantee of any of the
Borrower's 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
Lender or Lenders as security for any of the Borrower's Obligations
shall fail to attach or be perfected; or
(v) any of the Borrower's 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).
43
With respect to its obligations hereunder, each Guarantor hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the Agent or any Lender exhaust any right,
power or remedy or proceed against any Person under any of the Credit Documents,
any Hedging Agreement or any other agreement or instrument referred to in the
Credit Documents or Hedging Agreements, or against any other Person under any
other guarantee of, or security for, any of the Borrower's Obligations.
4.3 REINSTATEMENT.
The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Borrower's Obligations is rescinded
or must be otherwise restored by any holder of any of the Borrower's
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Agent and each Lender on demand for all reasonable costs and expenses
(including, without limitation, fees and expenses of counsel) incurred by the
Agent or such Lender in connection with such rescission or restoration,
including any such costs and expenses incurred in defending against any claim
alleging that such payment constituted a preference, fraudulent transfer or
similar payment under any bankruptcy, insolvency or similar law.
4.4 CERTAIN ADDITIONAL WAIVERS.
Without limiting the generality of the provisions of this Section 4,
each Guarantor hereby specifically waives the benefits of N.C. Gen. Stat. ss.
26-7 through 26-9, inclusive. Each Guarantor further agrees that such Guarantor
shall have no right of recourse to security for the Borrower's Obligations,
except through the exercise of the rights of subrogation pursuant to Section
4.2.
4.5 REMEDIES.
The Guarantors agree that, to the fullest extent permitted by law, as
between the Guarantors, on the one hand, and the Agent and the Lenders, on the
other hand, the Borrower's Obligations may be declared to be forthwith due and
payable as provided in Section 9.2 hereof (and shall be deemed to have become
automatically due and payable in the circumstances provided in said Section 9.2)
for purposes of Section 4.1 hereof notwithstanding any stay, injunction or other
prohibition preventing such declaration (or preventing the Borrower's
Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or the Borrower's Obligations
being deemed to have become automatically due and payable), the Borrower's
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 4.1.
4.6 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 4.6), pay to such
44
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 4.6 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 4, 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 4 (hereafter, the
"Guaranteed Obligations"), a Guarantor that has paid an amount in excess of its
Pro Rata Share of the Guaranteed Obligations; (ii) "Excess Payment" shall mean,
in respect of any Guaranteed Obligations, the amount paid by an Excess Funding
Guarantor in excess of its Pro Rata Share of such Guaranteed Obligations; and
(iii) "Pro Rata Share", for the purposes of this Section 4.6, 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 4.6 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).
4.7 CONTINUING GUARANTEE.
The guarantee in this Section 4 is a continuing guarantee, and shall
apply to all Borrower's Obligations whenever arising.
SECTION 5
CONDITIONS
5.1 CLOSING CONDITIONS.
The obligation of the Lenders to enter into this Credit Agreement and
to make the initial Loans or the Issuing Lender to issue the initial Letter of
Credit, whichever shall occur first, shall be subject to satisfaction of the
following conditions (in form and substance acceptable to the Lenders):
(a) The Agent shall have received original counterparts
of this Credit Agreement executed by each of the parties hereto;
45
(b) The Agent shall have received an appropriate original
Note for each Lender, executed by the Borrower;
(c) The Agent shall have received original counterparts
of the Pledge Agreement executed by each Credit Party which owns any
stock in any Subsidiary of the Borrower;
(d) The Agent shall have received, in form and substance
satisfactory to the Agent, all stock certificates evidencing the stock
pledged to the Agent pursuant to the Pledge Agreement, together with
duly executed in blank undated stock powers attached thereto;
(e) The Agent shall have received all documents it may
reasonably request relating to the existence and good standing of each
of the Credit Parties, the corporate or other necessary authority for
and the validity of the Credit Documents, and any other matters
relevant thereto, all in form and substance reasonably satisfactory to
the Agent;
(f) (i) The Borrower shall have entered into the
Subordinated Note Indenture (the form and substance of which shall be
satisfactory to the Required Lenders (the satisfaction of any Lender to
be evidenced by its execution of this Credit Agreement), (ii) the
Borrower shall have executed the Subordinated Notes, (iii) the Agent
shall have received a copy, certified by an officer of the Borrower as
true and complete, of the Subordinated Note Indenture and each of the
Subordinated Notes as originally executed and delivered, and no
amendment or modification thereof shall have been entered into on or
prior to the Closing Date which shall not have been approved by the
Required Lenders and (iv) the Borrower shall have sold Subordinated
Notes in an aggregate principal amount of not less than $100,000,000
and received the net proceeds thereof;
(g) The Agent shall have received evidence that (i) the
Borrower shall have used 100% of the net proceeds from the sale of the
Subordinated Notes to (A) terminate the NationsBank Liquidity Line and
repay all amounts owing thereunder in full and (B) repay Loans
outstanding as of the Closing Date and (ii) neither the Borrower nor
any of its Subsidiaries shall have any Funded Indebtedness other than
(A) the Indebtedness under the Credit Documents, (B) the Subordinated
Indebtedness and (C) Indebtedness of the Borrower and its Subsidiaries
set forth on Schedule 8.1;
(h) The absence of any material disruption of, or a
material adverse change in, financial, banking or capital market
conditions;
(i) The Agent shall have received a certificate executed
by an officer of the Borrower as of the Closing Date stating that (i)
to the best of such officer's knowledge, there does not exist any
action, suit or proceeding, pending or threatened, in which there is a
reasonable possibility of an adverse decision, which would materially
adversely affect the ability of any Credit Party to perform its
obligations under the Credit Documents or the ability of the Lenders to
exercise their rights thereunder; (ii) no material adverse change has
occurred since December 29, 1996, with respect to the consolidated
financial condition of the Borrower and its Subsidiaries; (iii)
attached are detailed calculations of each of the
46
financial covenants set forth in Section 7.11 immediately after giving
effect to this Credit Agreement, the other Credit Documents, the
Subordinated Note Indenture, the Subordinated Notes and all other
transactions contemplated by this Credit Agreement and the Subordinated
Note Indenture to occur on such date; and (iv) immediately after giving
effect to this Credit Agreement, the other Credit Documents, the
Subordinated Note Indenture, the Subordinated Notes and all other
transactions contemplated by this Credit Agreement and the Subordinated
Note Indenture to occur on such date, (A) each Credit Party on a
consolidated basis is Solvent, (B) no Default or Event of Default
exists and (C) the representations and warranties set forth in Section
6 are true and correct in all material respects;
(j) The Agent shall have received a certificate executed
by the chief financial officer of the Borrower describing all
Subordinated Indebtedness outstanding as of the Closing Date,
including, without limitation, (A) the name and address of the holders
thereof or, with respect to the Subordinated Notes, the trustee for the
Subordinated Noteholders and (B) dates on which scheduled payments are
owing with respect to such Subordinated Indebtedness.
(k) The Agent shall have received, in form and substance
satisfactory to the Agent, a legal opinion of Xxxxxxxx, Xxxxxxxx &
Xxxxxx, P.A., counsel for the Credit Parties, dated as of the Closing
Date;
(1) The Agent shall have received, for its own account
and for the accounts of the Lenders, all fees and expenses required by
this Credit Agreement or any other Credit Document to be paid on or
before the Closing Date; and
(m) The Agent shall have received such other documents,
agreements or information which may be reasonably requested by the
Agent.
5.2 CONDITIONS TO ALL EXTENSIONS OF CREDIT.
The obligations of each Lender to make, convert or extend any Loan and
of the Issuing Lender to issue or extend Letters of Credit (including the
initial Loans and the initial Letter of Credit) are subject to satisfaction of
the following conditions in addition to satisfaction on the Closing Date of the
conditions set forth in Section 5.1:
(i) The Borrower shall have delivered (A) in the case of
any Loan, an appropriate Notice of Borrowing or (B) in the case of any
Letter of Credit, the Issuing Lender shall have received an appropriate
request for issuance in accordance with the provisions of Section
2.2(b);
(ii) The representations and warranties set forth in
Section 6 shall be, subject to the limitations set forth therein, true
and correct in all material respects as of such date (except for those
which expressly relate to an earlier date);
47
(iii) There shall not have been commenced against the
Borrower or any Guarantor an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect,
or any case, proceeding or other action for the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or
similar official) of such Person or for any substantial part of its
Property or for the winding up or liquidation of its affairs, and such
involuntary case or other case, proceeding or other action shall remain
undismissed, undischarged or unbonded;
(iv) No Default or Event of Default shall exist and be
continuing either prior to or after giving effect thereto; and
(v) Immediately after giving effect to the making of such
Loan (and the application of the proceeds thereof) or to the issuance
of such Letter of Credit, as the case may be, (A) the sum of the
aggregate principal amount of outstanding Loans plus LOC Obligations
outstanding shall not exceed the lesser of (I) the Committed Amount and
(II) the Borrowing Base, and (B) the LOC Obligations shall not exceed
the LOC Committed Amount.
The delivery of each Notice of Borrowing and each request for the issuance of a
Letter of Credit pursuant to Section 2.2(b) shall constitute a representation
and warranty by the Borrower of the correctness of the matters specified in
subsections (ii), (iii), (iv) and (v) above.
SECTION 6
REPRESENTATIONS AND WARRANTIES
The Credit Parties hereby represent to the Agent and each Lender that:
6.1 FINANCIAL CONDITION.
(a) The audited consolidated balance sheet of the Borrower and its
Subsidiaries as of December 29, 1996 and December 31, 2000 and the audited
consolidated statements of earnings and statements of cash flows for the years
ended December 31, 2000, December 29, 1996, December 31, 1995, January 1, 1995
and December 31, 1993 have heretofore been furnished to each Lender. Such
financial statements (including the notes thereto) (i) have been audited by
either Xxxxxx Xxxxxxxx LLP or PricewaterhouseCoopers, LLP, (ii) have been
prepared in accordance with GAAP consistently, applied throughout the periods
covered thereby and (iii) present fairly (on the basis disclosed in the
footnotes to such financial statements) the consolidated financial condition,
results of operations and cash flows of the Borrower and its Subsidiaries as of
such date and for such periods. The unaudited interim balance sheets of the
Borrower and its Subsidiaries as at the end of, and the related unaudited
interim statements of earnings and of cash flows for, each quarterly period
ended after December 29, 1996 and prior to the Closing Date have heretofore been
furnished to each Lender. Such interim financial statements for each such
quarterly period, (i) have been prepared in accordance with Regulation S-X of
the Securities and Exchange Commission consistently applied throughout the
periods covered thereby and (ii) present fairly (on the basis
48
disclosed in the footnotes to such financial statements) the consolidated
financial condition, results of operations and cash flows of the Borrower and
its Subsidiaries as of such date and for such periods. During the period from
September 30, 2001 to and including the Fourth Amendment Effective Date, there
has been no sale, transfer or other disposition by the Borrower or any of its
Subsidiaries (other than the sale of Paladin Consulting, Inc. and the creation
of Venturi Staffing Partners, LLC) of any material part of the business or
property of the Borrower and its Subsidiaries, taken as a whole, and no purchase
or other acquisition by any of them of any business or property (including any
capital stock of any other person) material in relation to the consolidated
financial condition of the Borrower and its Subsidiaries, taken as a whole, in
each case, which has not been disclosed in writing to the Lenders on or prior to
the Fourth Amendment Effective Date or otherwise publicly disclosed.
(b) The projected consolidated and consolidating balance sheets of
the Borrower and its Subsidiaries as at the end of, and the related projected
statements of earnings and of cash flows for, the years ended December 30, 2001,
December 29, 2002 and December 28, 2003 (heretofore furnished to each Lender)
are based upon reasonable assumptions made known to the Lenders and upon
information not known to be incorrect or misleading in any material respect
(except as otherwise previously publicly disclosed), subject to the
uncertainties and approximations inherent in any projections.
6.2 NO CHANGE; DIVIDENDS.
Since September 30, 2001, (a) there has been no development or event
relating to or affecting the Borrower or any of its Subsidiaries which has had
or would be reasonably expected to have a Material Adverse Effect (except as has
been publicly disclosed prior to the Fourth Amendment Effective Date) and (b)
except as permitted under this Credit Agreement, no dividends or other
distributions have been declared, paid or made upon the capital stock or other
equity interest in the Borrower or any of its Subsidiaries nor, except to the
extent permitted under this Credit Agreement, has any of the capital stock or
other equity interest in the Borrower or any of its Subsidiaries been redeemed,
retired, purchased or otherwise acquired for value by such Person.
6.3 ORGANIZATION; EXISTENCE; COMPLIANCE WITH LAW.
Each of the Borrower and its Subsidiaries (a) is a corporation or
limited liability company, as the case may be, duly organized, validly existing
and is in good standing under the laws of the jurisdiction of its incorporation
or organization, (b) has the corporate or other necessary power and authority,
and the legal right, to own and operate its property, to lease the property it
operates as lessee and to conduct the business in which it is currently engaged,
except to the extent that the failure to have such legal right would not be
reasonably expected to have a Material Adverse Effect, (c) is duly qualified as
a foreign entity and in good standing under the laws of each jurisdiction where
its ownership, lease or operation of property or the conduct of its business
requires such qualification, other than in such jurisdictions where the failure
to be so qualified and in good standing would not be reasonably expected to have
a Material Adverse Effect, and (d) is in compliance with all material
Requirements of Law, except to the extent that the failure to comply therewith
would not, in the aggregate, be reasonably expected to have a Material Adverse
Effect.
49
6.4 POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.
Each of the Credit Parties has the corporate or other necessary power
and authority, and the legal right, to make, deliver and perform the Credit
Documents and Subordinated Note Documents to which it is a party, and in the
case of the Borrower, to borrow hereunder, and has taken all necessary corporate
action to authorize the borrowings on the terms and conditions of this Credit
Agreement and to authorize the execution, delivery and performance of the Credit
Documents and Subordinated Note Documents to which it is a party. No consent or
authorization of, filing with, notice to or other similar act by or in respect
of, any Governmental Authority or any other Person is required to be obtained or
made by or on behalf of any Credit Party in connection with the Indebtedness
arising under the Subordinated Note Documents, the borrowings hereunder or with
the execution, delivery, performance, validity or enforceability of the Credit
Documents and Subordinated Note Documents to which such Credit Party is a party,
except for (i) filings to perfect the Liens created by the Collateral Documents
and (ii) consents, authorizations, notices and filings described in Schedule
6.4, all of which have been obtained or made or have the status described in
such Schedule 6.4. This Credit Agreement has been, and each other Credit
Document and Subordinated Note Document to which any Credit Party is a party
will be, duly executed and delivered on behalf of the Credit Parties. This
Credit Agreement constitutes and each other Credit Document and each
Subordinated Note Document to which any Credit Party is a party when executed
and delivered will constitute, a legal, valid and binding obligation of such
Credit Party enforceable against such party in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
6.5 NO LEGAL BAR.
The execution, delivery and performance of the Credit Documents and
Subordinated Note Documents by the Credit Parties, the borrowings hereunder and
the use of the proceeds thereof (a) will not violate any Requirement of Law or
contractual obligation of the Borrower or any of its Subsidiaries, or cause an
event of default under any material indenture, loan agreement, mortgage, deed of
trust, contract or other agreement or instrument to which it is a party or by
which it may be bound, in any respect that would reasonably be expected to have
a Material Adverse Effect, (b) will not result in, or require, the creation or
imposition of any Lien (other than the Liens created by the Collateral
Documents) on any of the properties or revenues of any of the Borrower or any of
its Subsidiaries pursuant to any such Requirement of Law or contractual
obligation, and (c) will not violate or conflict with any provision of any
Credit Party's articles of incorporation or by-laws.
6.6 NO MATERIAL LITIGATION.
No litigation, investigation or proceeding of or before any arbitrator
or Governmental Authority is pending or, to the best knowledge of the Credit
Parties, threatened by or against the Borrower or any of its Subsidiaries or
against any of their respective properties or revenues which (a) relates to any
of the Credit Documents or any of the transactions contemplated hereby or
thereby, (b) relates to any of the Subordinated Note Documents or any of the
transactions contemplated thereby or (c) would be reasonably expected to have a
Material Adverse Effect.
50
6.7 NO DEFAULT.
Neither the Borrower nor any of its Subsidiaries is in default under or
with respect to any of their contractual obligations in any respect which would
be reasonably expected to have a Material Adverse Effect. No Default or Event of
Default has occurred and is continuing.
6.8 OWNERSHIP OF PROPERTY; LIENS.
Each of the Borrower and its Subsidiaries has good record and
marketable title in fee simple to, or a valid leasehold interest in, all its
material real property, and good title to, or a valid leasehold interest in, all
its other material property, and none of such property is subject to any Lien,
except for Permitted Liens.
6.9 INTELLECTUAL PROPERTY.
Each of the Borrower and its Subsidiaries owns, or has the legal right
to use, all United States trademarks, tradenames, copyrights, technology,
know-how and processes, if any, necessary for each of them to conduct its
business as currently conducted (the "Intellectual Property") except for those
the failure to own or have such legal right to use would not be reasonably
expected to have a Material Adverse Effect. No claim has been asserted and is
pending by any Person challenging or questioning the use of any such
Intellectual Property or the validity or effectiveness of any such Intellectual
Property, nor does any Credit Party know of any such claim, and the use of such
Intellectual Property and, to the knowledge of the responsible officers of the
Credit Parties, the use of the Intellectual Property by the Borrower or any of
its Subsidiaries or the granting of a right or a license in respect of the
Intellectual Property from any Credit Party does not infringe on the rights of
any Person, except for such claims and infringements that in the aggregate,
would not be reasonably expected to have a Material Adverse Effect. Set forth on
Schedule 6.9 is a list of all Intellectual Property registered with the United
States Copyright Office or the United States Patent and Trademark Office and
owned by each Credit Party. As of the Fourth Amendment Effective Date, none of
the Intellectual Property of the Credit Parties is subject to any licensing
agreement or similar agreement with a Credit Party as licensor except as set
forth on Schedule 6.9.
6.10 NO BURDENSOME RESTRICTIONS.
Except as previously disclosed in writing to the Lenders on or prior to
the Closing Date, no Requirement of Law or contractual obligation of the
Borrower or any of its Subsidiaries would be reasonably expected to have a
Material Adverse Effect.
6.11 Taxes.
Each of the Borrower and its Subsidiaries has filed or caused to be
filed all United States federal income tax returns and all other material tax
returns which, to the best knowledge of the Credit Parties, are required to be
filed and, except to the extent it has made alternative arrangements with the
relevant taxing authority, has disclosed such arrangements to the Agent and is
in compliance with such arrangements, has paid (a) all taxes shown to be due and
payable on said
51
returns or (b) all taxes shown to be due and payable on any assessments of which
it has received notice made against it or any of its property and all other
taxes, fees or other charges imposed on it or any of its property by any
Governmental Authority (other than any (i) taxes, fees or other charges with
respect to which the failure to pay, in the aggregate, would not have a Material
Adverse Effect or (ii) taxes, fees or other charges the amount or validity of
which are currently being contested and with respect to which reserves in
conformity with GAAP have been provided on the books of such Person), and no tax
Lien has been filed, and, to the best knowledge of the Credit Parties, no claim
is being asserted, with respect to any such tax, fee or other charge. No Credit
Party is aware as of the Fourth Amendment Effective Date of any proposed tax
assessments against it or any other Credit Party except those set forth on
Schedule 6.11.
6.12 ERISA.
(a) During the five-year period prior to the date on which this
representation is made or deemed made: (i) no Termination Event has occurred,
and, to the best knowledge of the Credit Parties, no event or condition has
occurred or exists as a result of which any Termination Event could reasonably
be expected to occur, with respect to any Plan; (ii) no "accumulated funding
deficiency," as such term is defined in Section 302 of ERISA and Section 412 of
the Code, whether or not waived, has occurred with respect to any Plan; (iii)
each Plan has been maintained, operated, and funded in compliance with its own
terms and in material compliance with the provisions of ERISA, the Code, and any
other applicable federal or state laws; and (iv) no lien in favor of the PBGC or
a Plan has arisen or is reasonably likely to arise on account of any Plan.
(b) The actuarial present value of all "benefit liabilities" under
all Single Employer Plans (determined within the meaning of Section 401(a)(2) of
the Code, utilizing the actuarial assumptions used to fund such Plans), whether
or not vested, did not, as of the last annual valuation date prior to the date
on which this representation is made or deemed made, exceed the current value of
the assets of all such Plans.
(c) Neither the Borrower, any of the Subsidiaries of the Borrower
nor any ERISA Affiliate has incurred, or, to the best knowledge of the Credit
Parties, could be reasonably expected to incur, any withdrawal liability under
ERISA to any Multiemployer Plan or Multiple Employer Plan. Neither the Borrower,
any of the Subsidiaries of the Borrower nor any ERISA Affiliate would become
subject to any withdrawal liability under ERISA if the Borrower, any of the
Subsidiaries of the Borrower or any ERISA Affiliate were to withdraw completely
from all Multiemployer Plans and Multiple Employer Plans as of the valuation
date most closely preceding the date on which this representation is made or
deemed made. Neither the Borrower, any of the Subsidiaries of the Borrower nor
any ERISA Affiliate has received any notification that any Multiemployer Plan is
in reorganization (within the meaning of Section 4241 of ERISA), is insolvent
(within the meaning of Section 4245 of ERISA), or has been terminated (within
the meaning of Title IV of ERISA), and no Multiemployer Plan is, to the best
knowledge of the Credit Parties, reasonably expected to be in reorganization,
insolvent, or terminated.
(d) No prohibited transaction (within the meaning of Section 406
of ERISA or Section 4975 of the Code) or breach of fiduciary responsibility has
occurred with respect to a Plan which has subjected or may subject the Borrower,
any of the Subsidiaries of the Borrower or any
52
ERISA Affiliate to any liability under Sections 406, 409, 502(i), or 502(l) of
ERISA or Section 4975 of the Code, or under any agreement or other instrument
pursuant to which the Borrower, any of the Subsidiaries of the Borrower or any
ERISA Affiliate has agreed or is required to indemnify any person against any
such liability.
6.13 GOVERNMENTAL REGULATIONS, ETC.
(a) 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 G or Regulation U, or for the purpose of purchasing or
carrying or trading in any securities. If requested by any Lender or the Agent,
the Borrower will furnish to the Agent and each Lender a statement to the
foregoing effect in conformity with the requirements of FR Form U-1 referred to
in said Regulation U. No indebtedness being reduced or retired out of the
proceeds of the Loans was or will be incurred for the purpose of purchasing or
carrying any margin stock within the meaning of Regulation U or any "margin
security" within the meaning of Regulation T. "Margin stock" within the meanings
of Regulation U does not constitute more than 25% of the value of the
consolidated assets of the Borrower and its Subsidiaries. None of the
transactions contemplated by this Credit Agreement (including, without
limitation, the direct or indirect use of the proceeds of the Loans) will
violate or result in a violation of the Securities Act of 1933, as amended, or
the Securities Exchange Act of 1934, as amended, or regulations issued pursuant
thereto, or Regulation G, T, U or X.
(b) Neither the Borrower nor any of its Subsidiaries 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,
neither the Borrower nor any of its Subsidiaries is (i) an "investment company"
registered or required to be registered under the Investment Company Act of
1940, as amended, and is not controlled by such a company, or (ii) a "holding
company", or a "subsidiary company" of a "holding company", or an "affiliate" of
a "holding company" or of a "subsidiary" of a "holding company", within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
(c) No director, executive officer or principal shareholder of the
Borrower or any of its Subsidiaries is a director, executive officer or
principal shareholder of any Lender. For the purposes hereof the terms
"director", "executive officer" and "principal shareholder" (when used with
reference to any Lender) have the respective meanings assigned thereto in
Regulation O issued by the Board of Governors of the Federal Reserve System.
(d) Each of the Borrower and its Subsidiaries has obtained all
material licenses, permits, franchises or other governmental authorizations
necessary to the ownership of its respective Property and to the conduct of its
business.
(e) Neither the Borrower nor any of its Subsidiaries is in
violation of any applicable statute, regulation or ordinance of the United
States of America, or of any state, city, town, municipality, county or any
other jurisdiction, or of any agency thereof (including without limitation,
environmental laws and regulations), which violation could reasonably be
expected to have a Material Adverse Effect.
53
(f) Each of the Borrower and its Subsidiaries is current with all
material reports and documents, if any, required to be filed with any state or
federal securities commission or similar agency and is in full compliance in all
material respects with all applicable rules and regulations of such commissions.
6.14 SUBSIDIARIES.
Schedule 6.14 sets forth all the Subsidiaries of the Borrower at the
Fourth Amendment Effective Date, the jurisdiction of their incorporation and the
direct or indirect ownership interest of the Borrower therein. All of the
outstanding capital stock of such Subsidiaries has been validly issued, is fully
paid and non-assessable and is owned by the Borrower or one or more of its
Subsidiaries free and clear of all Liens (other than Liens in favor of the
Agent, for the benefit of the Lenders). All of the outstanding capital stock of
the Borrower has been validly issued, is fully paid and non-assessable.
6.15 PURPOSE OF LOANS AND LETTERS OF CREDIT.
The proceeds of the Loans hereunder shall be used solely by the
Borrower for working capital and general corporate purposes of the Credit
Parties. The Letters of Credit shall be used only for or in connection with
appeal bonds, reimbursement obligations arising in connection with surety and
reclamation bonds, reinsurance, domestic or international trade transactions,
worker's compensation bonds and obligations not otherwise aforementioned
relating to transactions entered into by the applicable account party in the
ordinary course of business.
6.16 ENVIRONMENTAL MATTERS.
(a) Each of the facilities and properties owned, leased or
operated by the Borrower or any of its Subsidiaries (the "Properties") and all
operations at the Properties are in compliance with all applicable Environmental
Laws, and there is no violation of any Environmental Law with respect to the
Properties or the businesses operated by the Borrower or any of its Subsidiaries
(the "Businesses"), and there are no conditions relating to the Businesses or
Properties that could give rise to liability under any applicable Environmental
Laws.
(b) None of the Properties contains, or has previously contained,
any Materials of Environmental Concern at, on or under the Properties in amounts
or concentrations that constitute or constituted a violation of, or could give
rise to liability under, Environmental Laws.
(c) Neither the Borrower nor any of its Subsidiaries has received
any written or verbal notice of, or inquiry from any Governmental Authority
regarding, any violation, alleged violation, non-compliance, liability or
potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Properties or the Businesses, nor
does the Borrower or any of its Subsidiaries have knowledge or reason to believe
that any such notice will be received or is being threatened.
54
(d) Materials of Environmental Concern have not been transported
or disposed of from the Properties, or generated, treated, stored or disposed of
at, on or under any of the Properties or any other location, in each case by or
on behalf of the Borrower or any of its Subsidiaries in violation of, or in a
manner that would be reasonably likely to give rise to liability under, any
applicable Environmental Law.
(e) No judicial proceeding or governmental or administrative
action is pending or, to the best knowledge of any Credit Party, threatened,
under any Environmental Law to which the Borrower or any of its Subsidiaries is
or will be named as a party, nor are there any consent decrees or other decrees,
consent orders, administrative orders or other orders, or other administrative
or judicial requirements outstanding under any Environmental Law with respect to
the Borrower or any of its Subsidiaries, the Properties or the Businesses.
(f) There has been no release or, threat of release of Materials
of Environmental Concern at or from the Properties, or arising from or related
to the operations (including, without limitation, disposal) of the Borrower or
any of its Subsidiaries in connection with the Properties or otherwise in
connection with the Businesses, in violation of or in amounts or in a manner
that could give rise to liability under Environmental Laws.
6.17 PERFECTED SECURITY INTERESTS.
Except as the result of or in connection with a disposition permitted
by Section 8.4(c), at all times after execution and delivery of the Collateral
Documents by the Credit Parties and satisfaction of the conditions specified
therein, the security interests created in favor of the Agent, for the benefit
of the Lenders, will constitute valid, perfected security interests in the
Collateral.
6.18 BORROWER'S OBLIGATIONS.
All of the Borrower's Obligations are "Senior Indebtedness" under and
as defined in the Subordinated Note Indenture.
6.19 INDEBTEDNESS.
Except as otherwise permitted under Section 8.1, the Credit Parties
have no Indebtedness.
6.20 INVESTMENTS.
All Investments of each Credit Party are Permitted Investments.
6.21 DISCLOSURE.
Neither this Credit Agreement nor any financial statements delivered to
the Lenders nor any other document, certificate or statement furnished to the
Lenders by or on behalf of any Credit Party in connection with the transactions
contemplated hereby contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained
therein or herein not misleading.
55
SECTION 7
AFFIRMATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this
Credit Agreement is in effect or any amounts payable hereunder or under any
other Credit Document shall remain outstanding, and until all of the Commitments
hereunder shall have terminated:
7.1 INFORMATION COVENANTS.
The Borrower will furnish, or cause to be furnished, to the Agent:
(a) Annual Financial Statements. As soon as available,
and in any event within 90 days after the close of each fiscal year of
the Borrower and its Subsidiaries, a consolidated and consolidating
balance sheet and income statement of the Borrower and its
Subsidiaries, as of the end of such fiscal year, together with related
consolidated and consolidating statements of operations and
consolidated statements of retained earnings and of cash flows for such
fiscal year, setting forth in comparative form consolidated and, if
applicable, consolidating figures for the preceding fiscal year, all
such financial information described above to be in reasonable form and
detail and, and with respect to all such consolidated financial
statements, audited by independent certified public accountants of
recognized national standing reasonably acceptable to the Agent and
whose opinion shall be to the effect that such financial statements
have been prepared in accordance with GAAP (except for changes with
which such accountants concur) and shall not be limited as to the scope
of the audit or qualified as to the status of the Borrower and its
Subsidiaries as a going concern.
(b) Quarterly Financial Statements. As soon as available,
and in any event within 45 days after the close of each fiscal quarter
of the Borrower and its Subsidiaries (other than the fourth fiscal
quarter, in which case 90 days after the end thereof) a consolidated
and consolidating balance sheet and income statement of the Borrower
and its Subsidiaries, as of the end of such fiscal quarter, together
with related consolidated and consolidating statements of operations
and consolidated statements of retained earnings and of cash flows for
such fiscal quarter in each case setting forth in comparative form
consolidated and, if applicable, consolidating figures for the
corresponding period of the preceding fiscal year, all such financial
information described above to be in reasonable form and detail and
reasonably acceptable to the Agent, and accompanied by a certificate of
the chief financial officer of the Borrower to the effect that such
quarterly financial statements fairly present in all material respects
the financial condition of the Borrower and its Subsidiaries and have
been prepared in accordance with GAAP, subject to changes resulting
from audit and normal year-end audit adjustments.
56
(c) Officer's Certificates.
(i) At the time of delivery of the financial
statements provided for in Sections 7.1(a) and 7.1(b) above,
a certificate of the chief financial officer of the Borrower
substantially in the form of Schedule 7.1(c)(i), (A)
demonstrating compliance with the financial covenants
contained in Section 7.11 by calculation thereof as of the end
of each such fiscal period, and (B) stating that no Default or
Event of Default exists, or if any Default or Event of Default
does exist, specifying the nature and extent thereof and what
action the Borrower proposes to take with respect thereto.
(ii) Prior to the consummation of any Pro Forma
Transaction, a certificate of the chief financial officer of
the Borrower in the form of Schedule 7.1(c)(ii), (A)
demonstrating compliance with the financial covenants
contained in Section 7.11 by calculation thereof on a Pro
Forma Basis and (B) stating that, after giving effect on a Pro
Forma Basis to such Pro Forma Transaction, no Default or Event
of Default would exist.
(iii) Within 90 days after the end of each fiscal
year of the Borrower, a certificate of the chief financial
officer of the Borrower containing information regarding the
amount of all Asset Sales and Equity Transactions (other than
the issuance of stock under the Borrower's 1995 Equity
Participation Plan or under the Borrower's 1997 Employee Stock
Purchase Plan) that were made during the prior fiscal year.
(iv) Upon the issuance of any Subordinated
Indebtedness, a certificate of the chief financial officer of
the Borrower describing such Subordinated Indebtedness,
including, without limitation, (A) the name and address of the
holders thereof or, with respect to the Subordinated Notes,
the trustee for the Subordinated Noteholders, (B) dates on
which scheduled payments are owing with respect to such
Subordinated Indebtedness (and the amounts owing on such
dates) and (C) any other information requested by the Agent
with respect to such Subordinated Indebtedness.
(d) Annual Business Plan and Budgets. At least 15 days
prior to the end of each fiscal year of the Borrower, beginning with
the fiscal year ending December 28, 1997, an annual business plan and
budget of the Borrower containing, among other things, pro forma
financial statements for the next fiscal year.
(e) Accountant's Certificate. Within the period for
delivery of the annual financial statements provided in Section 7.1(a),
a certificate of the accountants conducting the annual audit stating
that they have reviewed this Credit Agreement and stating further
whether, in the course of their audit, they have become aware of any
Default or Event of Default and, if any such Default or Event of
Default exists, specifying the nature and extent thereof.
57
(f) Auditor's Reports. Promptly upon receipt thereof, a
copy of any other report or "management letter" submitted by
independent accountants to the Borrower or any of its Subsidiaries in
connection with any annual, interim or special audit of the books of
such Person.
(g) Reports. Promptly upon transmission or receipt
thereof, (a) copies of any filings and registrations with, and reports
to or from, the Securities and Exchange Commission, or any successor
agency, and copies of all financial statements, proxy statements,
notices and reports as the Borrower or any of its Subsidiaries shall
send to its shareholders or to a holder of any Indebtedness owed by the
Borrower or any of its Subsidiaries in its capacity as such a holder
and (b) upon the request of the Agent, all reports and written
information to and from the United States Environmental Protection
Agency, or any state or local agency responsible for environmental
matters, the United States Occupational Health and Safety
Administration, or any state or local agency responsible for health and
safety matters, or any successor agencies or authorities concerning
environmental, health or safety matters.
(h) Notices. Upon obtaining knowledge thereof, the
Borrower will give written notice to the Agent immediately of (a) the
occurrence of an event or condition consisting of a Default or Event of
Default, specifying the nature and existence thereof and what action
the Credit Parties propose to take with respect thereto, and (b) the
occurrence of any of the following with respect to the Borrower or any
of its Subsidiaries (i) the pendency or commencement of any litigation,
arbitral or governmental proceeding against such Person which if
adversely determined is likely to have a Material Adverse Effect, (ii)
the institution of any proceedings against such Person with respect to,
or the receipt of notice by such Person of potential liability or
responsibility for violation, or alleged violation of any federal,
state or local law, rule or regulation, including but not limited to,
Environmental Laws, the violation of which would likely have a Material
Adverse Effect, or (iii) any notice or determination concerning the
imposition of any withdrawal liability by a Multiemployer Plan against
such Person or any ERISA Affiliate, the determination that a
Multiemployer Plan is, or is expected to be, in reorganization within
the meaning of Title IV of ERISA or the termination of any Plan.
(i) ERISA. Upon obtaining knowledge thereof, the Borrower
will give written notice to the Agent promptly (and in any event within
five business days) of: (i) of any event or condition, including, but
not limited to, any Reportable Event, that constitutes, or might
reasonably lead to, a Termination Event; (ii) with respect to any
Multiemployer Plan, the receipt of notice as prescribed in ERISA or
otherwise of any withdrawal liability assessed against the Borrower or
any of its ERISA Affiliates, or of a determination that any
Multiemployer Plan is in reorganization or insolvent (both within the
meaning of Title IV of ERISA); (iii) the failure to make full payment
on or before the due date (including extensions) thereof of all amounts
which the Borrower, any of the Subsidiaries of the Borrower or any
ERISA Affiliate is required to contribute to each Plan pursuant to its
terms and as required to meet the minimum funding standard set forth in
ERISA and the Code with respect thereto; or (iv) any change in the
funding status of any Plan that could have a Material Adverse Effect,
together with a description of any such event or condition or a
58
copy of any such notice and a statement by the chief financial officer
of the Borrower briefly setting forth the details regarding such event,
condition, or notice, and the action, if any, which has been or is
being taken or is proposed to be taken by the Credit Parties with
respect thereto. Promptly upon request, the Borrower shall furnish the
Agent and the Lenders with such additional information concerning any
Plan as may be reasonably requested, including, but not limited to,
copies of each annual report/return (Form 5500 series), as well as all
schedules and attachments thereto required to be filed with the
Department of Labor and/or the Internal Revenue Service pursuant to
ERISA and the Code, respectively, for each "plan year" (within the
meaning of Section 3(39) of ERISA).
(j) Subordinated Indebtedness. Immediately upon obtaining
knowledge thereof, the Borrower will give written notice to each holder
of Subordinated Indebtedness (or, with respect to the Subordinated
Notes, the trustee for the Subordinated Noteholders) of the occurrence
of an event or condition consisting of a Default or Event of Default.
(k) Monthly Financial Statements/Borrowing Base
Certificate. Within 30 days after the end of each calendar month, a
certificate as of the end of the immediately preceding month,
substantially in the form of Schedule 7.1 (k) and certified by the
chief financial officer of the Borrower to be true and correct as of
the date thereof (a "Borrowing Base Certificate"). Concurrent with the
delivery of such Borrowing Base Certificate, a consolidated and
consolidating balance sheet and income statement of the Borrower and
its Subsidiaries, as of the end of such calendar month, together with
related consolidated statements of cash flows for such calendar month,
all such financial information described above to be in reasonable form
and detail and reasonably acceptable to the Agent, and accompanied by a
certificate of the chief financial officer of the Borrower to the
effect that such monthly financial statements fairly present in all
material respects the financial condition of the Borrower and its
Subsidiaries and have been prepared in accordance with GAAP, subject to
changes resulting from normal quarterly and year-end adjustments and
the absence of footnotes. Additionally, for the fiscal months ending
May 31, 2002, November 30, 2002 and May 31, 2003, respectively,
concurrently with the delivery of the items set forth in this Section
7.1(k), a certificate of the chief financial officer of the Borrower
(A) demonstrating compliance with the financial covenants contained in
Section 7.11 by calculation thereof as of the end of each such fiscal
month, and (B) stating that no Default or Event of Default exists, or
if any Default or Event of Default does exist, specifying the nature
and extent thereof and what action the Borrower proposes to take with
respect thereto.
(1) Six Month Forecast. On or before the last day of each
calendar month, commencing in February 2002, a six month rolling cash
flow forecast (which shall include projected cash flow on a monthly
basis), in form and substance satisfactory to the Agent, for the six
month period immediately following the month then ending, prepared and
signed by the chief financial officer or the chief accounting officer
of the Borrower, such forecast to be based upon reasonable assumptions
made known to the Lenders and upon information not known to be
incorrect or misleading in any material respect. Commencing in February
2002, concurrently with the aforesaid cash flow forecast, a
reconciliation of actual cash flow for the calendar month most recently
ended against
59
projected cash flow for such calendar month contained in the six month
rolling cash flow forecast furnished to the Lenders pursuant to this
Section 7.1(l) during the preceding calendar month, such reconciliation
to be in a form satisfactory to the Agent.
(m) Other Information. With reasonable promptness upon
any such request, such other information regarding the business,
properties or financial condition of the Borrower or any of its
Subsidiaries as the Agent or the Required Lenders may reasonably
request.
(n) Business Day. If the last day for timely delivery of
any of the items in this Section 7.1 falls on a day that is not a
Business Day, then such information shall be due on the Business Day
immediately preceding such due date.
7.2 PRESERVATION OF EXISTENCE AND FRANCHISES.
Except as a result of or in connection with a dissolution, merger or
disposition of a Subsidiary permitted under Section 8.4, the Borrower will, and
will cause each of its Subsidiaries to, do all things necessary to preserve and
keep in full force and effect its existence, rights, franchises and authority.
7.3 BOOKS AND RECORDS.
The Borrower will, and will cause each of its Subsidiaries to, keep
complete and accurate books and records of its transactions in accordance with
good accounting practices on the basis of GAAP (including the establishment and
maintenance of appropriate reserves).
7.4 COMPLIANCE WITH LAW.
The Borrower will, and will cause each of its Subsidiaries to, comply
with all laws, rules, regulations and orders, and all applicable restrictions
imposed by all Governmental Authorities, applicable to it and its property if
noncompliance with any such law, rule, regulation, order or restriction would
have a Material Adverse Effect.
7.5 PAYMENT OF TAXES AND OTHER INDEBTEDNESS.
Except as otherwise provided pursuant to the terms of the definition of
"Permitted Liens" set forth in Section 1.1 or (in the case of the following
clause (i)), to the extent alternative arrangements have been made with the
relevant taxing authority, such agreements have been disclosed to the Agent and
the Borrower is in compliance with such arrangements, the Borrower will, and
will cause each of its Subsidiaries to, pay and discharge (i) all taxes,
assessments and governmental charges or levies imposed upon it, or upon its
income or profits, or upon any of its properties, before they shall become
delinquent, (ii) all lawful claims (including claims for labor, materials and
supplies) which, if unpaid, might give rise to a Lien upon any of its
properties, and (iii) except as prohibited hereunder, all of its other
Indebtedness as it shall become due.
60
7.6 INSURANCE.
The Borrower will maintain, and will cause each of its Subsidiaries to
maintain, or be covered under, (i) physical damage insurance on all real and
personal property on an all risks basis (including the perils of flood and
quake), covering the repair and replacement cost of all such property and
consequential loss coverage for extra expense and (ii) public liability
insurance (including products/completed operations liability coverage), all on
terms and conditions and in scope substantially commensurate with that which is
currently maintained (or, if such terms and conditions and scope are not up to
industry standards for a company of like size and with a similar business,
substantially commensurate with such industry standards) and evidenced by the
certificate contemplated by clause (w) of the second following sentence and with
risk retention thereunder up to an amount which in the good faith business
judgement of the Borrower's or such Subsidiary's management could not reasonably
be expected to expose the Borrower or such Subsidiary to a materially adverse
noninsured loss. On or before May 15, 2001, and at all times thereafter, the
Agent shall be named as loss payee or mortgagee, as its interest may appear,
and/or additional insured with respect to any such insurance providing coverage
in respect of any Collateral. All such insurance shall be provided by insurers
having an A.M. Best policyholders rating of not less than B+ or such other
insurers as the Required Lenders may approve in writing. The Borrower will
deliver to the Agent for distribution to each of the Lenders (w) on or before
May 15, 2001, a certificate as of a recent date showing the amount of coverage
as of such date, (x) upon request of any Lender through the Agent from time to
time full information as to the insurance carried, (y) within seven Business
Days of receipt of notice from any insurer a copy of any notice of cancellation,
alteration or material change in coverage from that existing on the Fourth
Amendment Effective Date and (z) forthwith upon receipt thereof, notice of any
cancellation or nonrenewal of coverage by the Borrower or any of its
Subsidiaries.
7.7 MAINTENANCE OF PROPERTY.
The Borrower will, and will cause each of its Subsidiaries to, maintain
and preserve its properties and equipment material to the conduct of its
business in good repair, working order and condition, normal wear and tear and
casualty and condemnation excepted, and will make, or cause to be made, in such
properties and equipment from time to time all repairs, renewals, replacements,
extensions, additions, betterments and improvements thereto as may be needed or
proper, to the extent and in the manner customary for companies in similar
businesses.
7.8 PERFORMANCE OF OBLIGATIONS.
The Borrower will, and will cause each of its Subsidiaries to, perform
in all material respects all of its obligations under the terms of all material
agreements, indentures, mortgages, security agreements or other debt instruments
to which it is a party or by which it is bound.
7.9 Use of Proceeds.
The Borrower will use the proceeds of the Loans and will use the
Letters of Credit solely for the purposes set forth in Section 6.15.
61
7.10 AUDITS/INSPECTIONS.
Upon reasonable notice and during normal business hours, the Borrower
will, and will cause each of its Subsidiaries to, permit representatives
appointed by the Agent, including, without limitation, independent accountants,
agents, attorneys, and appraisers to visit and inspect its property, including
its books and records, its accounts receivable and inventory, its facilities and
its other business assets, and to make photocopies or photographs thereof and to
write down and record any information such representative obtains and shall
permit the Agent or its representatives to investigate and verify the accuracy
of information provided to the Lenders and to discuss all such matters with the
officers, employees and representatives of such Person.
7.11 FINANCIAL COVENANTS.
(a) Consolidated Tangible Net Worth. The Consolidated Tangible Net
Worth (i) at all times during each fiscal quarter shall be no less than the
amount shown below opposite the fiscal quarter corresponding thereto:
Consolidated
Fiscal Quarter Tangible Net Worth
-------------- ------------------
4th Quarter - 2001 ($192,500,000)
1st Quarter - 2002 ($195,500,000)
2nd Quarter - 2002 ($198,500,000)
3rd Quarter - 2002 ($200,000,000)
4th Quarter - 2002 ($201,500,000)
*1st Quarter - 2003 ($203,000,000)
*2nd Quarter - 2003 ($195,000,000)
*3rd Quarter - 2003 ($194,000,000)
*4th Quarter - 2003 ($193,000,000)
and (ii) at all times after May 31, 2003* shall be greater than ($196,500,000).
62
(b) Consolidated Senior Leverage Ratio. (i) The Consolidated
Senior Leverage Ratio as of the last day of each fiscal quarter shall be no
greater than the ratio shown below opposite the applicable period corresponding
thereto:
Period Ratio
------ -----
4th Quarter - 2001 3.60 : 1.00
1st Quarter - 2002 4.75 : 1.00
2nd Quarter - 2002 6.60 : 1.00
3rd Quarter - 2002 8.50 : 1.00
4th Quarter - 2002 9.10 : 1.00
*1st Quarter - 2003 7.85 : 1.00
*2nd Quarter - 2003 5.50 : 1.00
*3rd Quarter - 2003 5.00 : 1.00
*4th Quarter - 2003 4.50 : 1.00
and (ii) as of May 31, 2003*, the ratio of (A) Consolidated Senior Funded
Indebtedness as of such date to (B) Consolidated EBITDA for the twelve month
period ending on such date shall be less than 6.00:1.00.
(c) Consolidated Interest Coverage Ratio. (i) The Consolidated
Interest Coverage Ratio as of the last day of each fiscal quarter shall be no
less than the ratio shown below opposite the applicable period corresponding
thereto:
Period Ratio
------ -----
4th Quarter - 2001 1.95 : 1.00
1st Quarter - 2002 1.45 : 1.00
2nd Quarter - 2002 1.05 : 1.00
3rd Quarter - 2002 0.85 : 1.00
4th Quarter - 2002 0.75 : 1.00
*1st Quarter - 2003 0.85 : 1.00
*2nd Quarter - 2003 1.20 : 1.00
*3rd Quarter - 2003 1.25 : 1.00
*4th Quarter - 2003 1.30 : 1.00
and (ii) as of May 31, 2003*, the ratio of (A) Consolidated EBITDA for the
six-month period ending on such date to (B) interest expense of the Borrower and
its Subsidiaries on a consolidated basis required to be paid in cash (plus the
amortization of ongoing fees previously paid, other than the fee set forth in
the Equity Appreciation Rights Agreement) for the six-month period ending on
such date, shall be greater than 1.15:1.00.
63
(d) Minimum Liquidity. As of the last day of each period set forth
below, the Liquidity for each period set forth below shall be no less than the
amount shown below opposite such period:
Fiscal Period Liquidity
------------- ---------
Five Month Period Ending May 31, 2002 $14,760,000
Sixth Month Period Ending November 30, 2002 $18,206,000
*Sixth Month Period Ending May 31, 2003 $15,437,000
(e) Minimum Consolidated EBITDA. Consolidated EBITDA for the
periods set forth below shall be no less than the amount shown below opposite
such period:
Minimum
Consolidated
Fiscal Period EBITDA
------------- ------------
Five Month Period Ending May 31, 2002 $3,385,000
Sixth Month Period Ending November 30, 2002 $7,291,000
*Sixth Month Period Ending May 31, 2003 $9,253,000
*Contingent on extension option being exercised pursuant to Section 3.4(e) of
this Credit Agreement.
7.12 ADDITIONAL CREDIT PARTIES.
At the time that any Person becomes a Subsidiary of the Borrower, the
Borrower shall immediately (and in any event within two (2) Business Days) so
notify the Agent and shall within five (5) Business Days (or such longer period
of time as the Agent may agree to) (a) cause such Person to execute a Joinder
Agreement in substantially the form of Schedule 7.12, (b) cause 100% of the
capital stock of such Person to be delivered to the Agent (together with undated
stock powers signed in blank) and pledged to the Agent, for the benefit of the
Lenders, pursuant to an appropriate pledge agreement(s) in substantially the
form of the Pledge Agreement and otherwise in form acceptable to the Agent and
(c) deliver such other documentation as the Agent may reasonably request in
connection with the foregoing, including, without limitation, certified
resolutions and other organizational and authorizing documents of such Person,
appropriate UCC-1 financing statements and favorable opinions of counsel to such
Person (which shall cover, among other things, the legality, validity, binding
effect and enforceability of the documentation referred to above), all in form,
content and scope reasonably satisfactory to the Agent.
7.13 OWNERSHIP OF SUBSIDIARIES.
Except to the extent otherwise provided in Section 8.11, the Borrower
shall, directly or indirectly, own at all times 100% of the capital stock of
each of its Subsidiaries.
64
7.14 PLEDGED ASSETS.
The Borrower will cause, and will cause each Subsidiary to cause, all
of its owned personal property located in the United States to the extent such
property is deemed to be material by the Agent or the Required Lenders in its or
their reasonable discretion, to be subject at all times, except as otherwise set
forth in Section 8.4(c), to first priority, perfected Liens in favor of the
Agent to secure the Borrower's Obligations in accordance with the terms and
conditions of the Collateral Documents, subject in any case to Permitted Liens.
7.15 [RESERVED].
7.16 FIELD EXAMINATION.
The Borrower and each of its Subsidiaries shall permit the Agent (or a
third party satisfactory to the Agent) to conduct a written business audit of
the accounts receivable, inventory, payables, controls and systems of the
Borrower and its Subsidiaries at a frequency to be determined in the reasonable
discretion of the Agent.
7.17 ENGAGEMENT OF FINANCIAL ADVISOR TO LENDERS.
(a) The Credit Parties acknowledge and agree that the Agent, on
behalf of the Lenders, may retain a financial advisor (the "Lender's Financial
Advisor") to the Lenders for matters related to the Credit Agreement. The
Lender's Financial Advisor shall agree to abide by the confidentiality terms set
forth in Section 11.14 hereof or other terms regarding confidentiality as may be
agreed to among the Agent, the Lender's Financial Advisor and the Credit
Parties.
(b) The Credit Parties covenant and agree that they shall
cooperate fully with the Lender's Financial Advisor in order that the Lender's
Financial Advisor shall be able to carry out all duties required by the Lenders
in connection with the Lender's Financial Advisor's work as a consultant.
Specifically, each Credit Party shall (i) permit the Lender's Financial Advisor
to visit and inspect its property during reasonable business hours, including
its books and records, its accounts receivable and its inventory, its facility
and its other business assets, and to make photocopies or photographs thereof
and to write down and record any information the Lender's Financial Advisor
obtains and (ii) permit the Lender's Financial Advisor to investigate and verify
the accuracy of such information and to discuss all such matters with the
officers, employees and representatives of such Credit Party.
(c) The Credit Parties agree that they shall pay, on demand, and
be jointly and severally liable for, all reasonable costs and expenses of the
Lender's Financial Advisor, as financial advisor to the Lenders.
7.18 DEPOSIT ACCOUNTS.
On or before March 8, 2002 (or such later date as the Agent may
reasonably agree to if the Borrower is diligently pursuing such items in good
faith), the Borrower will, and will cause each of the other Credit Parties, to
establish and maintain at all times any and all deposit accounts, other than
payroll, withholding tax and other fiduciary accounts established in the
65
ordinary course of business and containing only such amounts as are necessary to
cover obligations incurred and/or liabilities assumed in the ordinary course of
business (collectively, the "Excluded Deposit Accounts"), with either (i) the
Agent or (ii) other Persons approved by the Agent that have executed tri-party
agency agreements in substantially the form attached as Schedule 7.18 or
otherwise in form reasonably acceptable to the Agent (each an "Agency
Agreement"); provide, however, that any of the Credit Parties may maintain
deposit accounts with banking institutions other than the Agent or Persons
executing such Agency Agreements so long as (a) the aggregate amount of funds
contained in all such deposit accounts (other than any amounts in any Excluded
Deposit Accounts) does not exceed $2,500,000 at any time and (b) all funds
contained in such deposit accounts, other than an amount not to exceed
$1,000,000 at any time, relate to deposits in the ordinary course of business to
cover accounts payable to independent contractors for work already performed.
The Borrower shall provide the Agent, within thirty calendar days after the end
of each fiscal month, a report (in a form reasonably satisfactory to the Agent)
identifying all deposit accounts of the Credit Parties and their collected
balances as of the last day of the preceding fiscal month.
SECTION 8
NEGATIVE COVENANTS
Each Credit Party hereby covenants and agrees that, so long as this
Credit Agreement is in effect or any amounts payable hereunder or under any
other Credit Document shall remain outstanding, and until all of the Commitments
hereunder shall have terminated:
8.1 INDEBTEDNESS.
The Borrower will not, nor will it permit any of its Subsidiaries to,
contract, create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness arising under this Credit Agreement and
the other Credit Documents;
(b) Indebtedness of the Borrower and any of its
Subsidiaries set forth in Schedule 8.1;
(c) purchase money Indebtedness (including Capital
Leases) hereafter incurred by the Borrower or any of its Subsidiaries
to finance the purchase of fixed assets provided that (i) the total of
all such Indebtedness (for all such Persons taken together) shall not
exceed an aggregate principal amount of $3,000,000 at any one time
outstanding (including any such Indebtedness referred to in subsection
(b) above (other than any such Indebtedness incurred in connection with
acquisitions)); (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;
66
(d) obligations of the Borrower in respect of Hedging
Agreements entered into in order to manage existing or anticipated
interest rate or exchange rate risks and not for speculative purposes;
(e) Intercompany Indebtedness incurred in the ordinary
course of business and consistent with past practices or for cash
management purposes;
(f) additional Subordinated Indebtedness which by its
terms (i) requires repayment of principal (including any sinking fund)
and annual cash interest payments in amounts not greater than and at
such times not earlier than are required by the Subordinated Note
Documents, (ii) is unsecured, and (iii) is on market terms, including
without limitation subordination and other intercreditor terms, that
are consistent with the public bond market and that have been approved
by the Required Lenders.
(g) Subordinated Indebtedness issued in exchange for
Subordinated Indebtedness listed on Schedule 8.1, provided such
Subordinated Indebtedness meets the requirements of clauses (i), (ii)
and (iii) of Section 8.1(f) above.
(h) in addition to the Indebtedness otherwise permitted
by this Section 8.1, other Indebtedness hereafter incurred by the
Borrower or any of its Subsidiaries provided that (i) the loan
documentation with respect to such Indebtedness shall not contain
covenants or default provisions relating to the Borrower and its
Subsidiaries that are more restrictive than the covenants and default
provisions contained in the Credit Documents, (ii) on the date of
incurrence of such Indebtedness after giving effect on a Pro Forma
Basis to the incurrence of such Indebtedness of the Borrower or any of
its Subsidiaries, no Default or Event of Default would exist hereunder,
and (iii) the aggregate principal amount of such Indebtedness shall not
exceed $10,000,000 at any time.
8.2 Liens.
The Borrower will not, nor will it permit any of its Subsidiaries to,
contract, create, incur, assume or permit to exist any Lien with respect to any
of their Property, whether now owned or after acquired, except for Permitted
Liens.
8.3 NATURE OF BUSINESS.
The Borrower will not, nor will it permit any of its Subsidiaries to,
substantively alter the character or conduct of the business conducted by such
Person as of the Fourth Amendment Effective Date.
8.4 CONSOLIDATION, MERGER, SALE OR PURCHASE OF ASSETS, ETC.
The Borrower will not, nor will it permit any of its Subsidiaries to:
(a) except in connection with a disposition of assets
permitted by the terms of subsection (c) below, dissolve, liquidate or
wind up their affairs;
67
(b) enter into any transaction of merger or
consolidation; provided, however, that, (i) so long as no Default or
Event of Default would be directly or indirectly caused as a result
thereof, any Credit Party (other than the Borrower) may merge or
consolidate with any other Credit Party (other than the Borrower) and
(ii) so long as the Borrower is the continuing or surviving
corporation, Xxxxxx Staffing Services, Inc. may merge or consolidate
with the Borrower;
(c) sell, lease, transfer or otherwise dispose of any
Property of the Borrower and its Subsidiaries other than (i) the sale
or disposition of machinery and equipment no longer used or useful in
the conduct of such Person's business, (ii) other sales of assets (but
not accounts receivable, except delinquent accounts sold for collection
purposes only), provided that, after giving effect to such sale or
other disposition, the aggregate book value of assets sold or otherwise
disposed of pursuant to this clause (ii) does not exceed $500,000 in
any fiscal year, (iii) the grant of any option or other right to
purchase any asset in a transaction that would be permitted under the
provisions of the foregoing clause (ii), provided that no Default or
Event of Default has occurred and is continuing at the time of such
grant and (iv) the sale or disposition of (A) an intangible asset
(excepting any trademarks or tradenames of any Credit Party) or (B)
other assets so long as the aggregate book value of all such assets
sold after the Third Amendment Effective Date does not exceed
$5,000,000, in each case in order to realize a book loss;
(d) acquire all or any portion of the capital stock or
securities of any other Person or purchase, lease or otherwise acquire
(in a single transaction or a series of related transactions) all or
any portion of the Property of any other Person, except for any merger
or consolidation permitted pursuant to Section 8.4(b); or
(e) become a general partner in any general or limited
partnership, joint venture or similar arrangement.
Upon a sale of any Property of a Credit Party permitted by Section 8.4(c), the
Agent shall (to the extent applicable) deliver to the Credit Parties, upon the
Credit Parties' request and at the Credit Parties' expense, such documentation
as is reasonably necessary to evidence the release of the Agent's security
interest, if any, in such Property, including, without limitation, amendments or
terminations of UCC financing statements, if any, the return of stock
certificates, if any, and the release of such Credit Party from all of its
obligations, if any, under the Credit Documents.
8.5 ADVANCES, INVESTMENTS, LOANS, ETC.
The Borrower will not, nor will it permit any of its Subsidiaries to,
make Investments in or to any Person, except for Permitted Investments.
8.6 RESTRICTED PAYMENTS.
The Borrower will not, nor will it permit any of its Subsidiaries to,
directly or indirectly declare, order, make or set apart any sum for or pay any
Restricted Payment, except (i) to make
68
dividends payable solely in the same class of capital stock of such Person, (ii)
to make dividends or other distributions payable to the Borrower (directly or
indirectly through Subsidiaries of the Borrower), (iii) as permitted by Section
8.7, (iv) to make payments on Subordinated Indebtedness (other than Indebtedness
arising under the Subordinated Note Documents) in accordance with any
subordination provisions applicable thereto, and (v) provided that no Default or
Event of Default has occurred and is continuing at such time or would be
directly or indirectly caused as a result thereof, to make regularly scheduled
interest payments in respect of Indebtedness arising under the Subordinated Note
Documents.
8.7 PREPAYMENTS OF INDEBTEDNESS, ETC.
No Credit Party will, nor will it permit any of its Subsidiaries to:
(a) (i) amend or modify any of the terms of any
Indebtedness of such Person (other than Indebtedness arising under the
Credit Documents) if such amendment or modification would add or change
any terms in a manner materially adverse to such Person or to the
Lenders, or (ii) shorten the final maturity or average life to maturity
thereof or require any payment thereon to be made sooner than
originally scheduled or increase the interest rate or fees applicable
thereto or change any subordination provision thereof, or (iii) make
(or give any notice with respect thereto) any voluntary or optional
payment or prepayment thereof, or (iv) make (or give any notice with
respect thereto) any redemption or acquisition for value or defeasance
(including without limitation, by way of depositing money or securities
with the trustee with respect thereto before due for the purpose of
paying when due), refund, refinance or exchange with respect thereto,
other than prepayments made by a Credit Party in connection with any
Asset Sale permitted under Section 8.4, in the amount necessary to
prepay or retire any Indebtedness either secured by a Permitted Lien
(ranking senior to any Lien of the Agent) on the related Property or
incurred in connection with the acquisition of any Property that is
disposed of in connection with such Asset Sale; or
(b) make interest payments in respect of any Subordinated
Indebtedness in violation of the applicable subordination provisions.
8.8 TRANSACTIONS WITH AFFILIATES.
The Borrower will not, nor will it permit any of its Subsidiaries to,
enter into or permit to exist any transaction or series of transactions with any
officer, director, shareholder, Subsidiary or Affiliate of such Person other
than (i) advances of working capital to any Credit Party, (ii) transfers of cash
and assets to any Credit Party, (iii) transactions permitted by Section 8.1,
Section 8.4, Section 8.5 (other than pursuant to clause (vii) of the definition
of "Permitted Investments" set forth in Section 1.1), or Section 8.6, (iv)
normal compensation and reimbursement of expenses of officers and directors and
(v) except as otherwise specifically limited in this Credit Agreement, other
transactions which are entered into in the ordinary course of such Person's
business on terms and conditions substantially as favorable to such Person as
would be obtainable by it in a comparable arms-length transaction with a Person
other than an officer, director, shareholder, Subsidiary or Affiliate.
69
8.9 FISCAL YEAR.
The Borrower will not, nor will it permit any of its Subsidiaries to,
change its fiscal year.
8.10 LIMITATION ON RESTRICTIONS ON SUBSIDIARY DIVIDENDS AND OTHER
DISTRIBUTIONS, ETC.
The Borrower will not, nor will it permit any of its Subsidiaries to,
directly or indirectly, create or otherwise cause, incur, assume, suffer or
permit to exist or become effective any consensual encumbrance or restriction of
any kind on the ability of any such Person to (i) pay dividends or make any
other distribution on any of such Person's capital stock, (ii) subject to
subordination provisions under any Intercompany Indebtedness, pay any
Indebtedness owed to the Borrower or any other Credit Party, (iii) make loans or
advances to any other Credit Party or (iv) transfer any of its Property to any
other Credit Party, except for encumbrances or restrictions existing under or by
reason of (A) customary non-assignment provisions in any lease governing a
leasehold interest and (B) this Credit Agreement and the other Credit Documents.
8.11 ISSUANCE AND SALE OF SUBSIDIARY STOCK.
The Borrower will not, nor will it permit any of its Subsidiaries to,
except as otherwise permitted under the terms of Section 8.4(c), 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.
8.12 SALE LEASEBACKS.
Except to the extent it complies with the mandatory prepayment
provisions for Asset Sales pursuant to Section 3.3, the Borrower will not, nor
will it permit any of its Subsidiaries to, directly or indirectly, become or
remain liable as lessee or as guarantor or other surety with respect to any
lease, whether an Operating Lease or a Capital Lease, of any Property (whether
real or personal or mixed), whether now owned or hereafter acquired, (i) which
such Person has sold or transferred or is to sell or transfer to any other
Person other than a Credit Party or (ii) which such Person intends to use for
substantially the same purpose as any other Property which has been sold or is
to be sold or transferred by such Person to any other Person in connection with
such lease.
8.13 NO FURTHER NEGATIVE PLEDGES.
Except (a) pursuant to this Credit Agreement and the other Credit
Documents and (b) with respect to prohibitions against other encumbrances on
specific Property encumbered to secure payment of particular Indebtedness (which
Indebtedness relates solely to such specific Property, and improvements and
accretions thereto, and is otherwise permitted hereby) the Borrower will not,
nor will it permit any of its Subsidiaries to, enter into, assume or become
subject to any agreement prohibiting or otherwise restricting the creation or
assumption of any Lien upon its properties or assets, whether now owned or
hereafter acquired, or requiring the grant of any security for such obligation
if security is given for some other obligation.
70
8.14 NO FOREIGN SUBSIDIARIES.
Neither the Borrower nor any of its Subsidiaries will create, acquire
or permit to exist any direct or indirect Subsidiary of such Credit Party which
is not incorporated or organized under the laws of any State of the United
States or the District of Columbia.
8.15 CAPITAL EXPENDITURES.
Neither the Borrower nor any of its Subsidiaries will permit
Consolidated Capital Expenditures in any fiscal period to exceed the dollar
amount (with no carry over from the preceding fiscal quarter) set forth below
opposite the relevant fiscal period set forth below:
Fiscal Quarter Ending Capital Expenditure Limit
April 1, 2001 $3,000,000
July 1, 2001 $2,500,000
September 30, 2001 $2,500,000
December 30, 2001 $1,000,000
Fiscal Year Ending Capital Expenditure Limit
December 29, 2002 $2,500,000
December 28, 2003 $3,500,000
8.16 CONSOLIDATED EARN-OUTS.
Neither the Borrower nor any of its Subsidiaries will permit any
Consolidated Earn-Outs to be made after the Fourth Amendment Effective Date.
8.17 FINANCIAL ADVISOR TO THE BORROWER.
The Borrower will not terminate its engagement of Pricewaterhouse
Coopers LLP as financial advisor or otherwise modify the terms of that certain
engagement letter agreement dated December 7, 2001 between Pricewaterhouse
Coopers LLP and the Borrower unless (a) the Borrower shall have engaged and
retained a replacement restructuring and/or financial advisor reasonably
acceptable to the Agent on terms satisfactory to the Agent or (b) the Borrower
shall have received the prior written consent of the Agent.
SECTION 9
EVENTS OF DEFAULT
9.1 EVENTS OF DEFAULT.
An Event of Default shall exist upon the occurrence of any of the
following specified events (each an "Event of Default"):
71
(a) Payment. Any Credit Party shall
(i) default in the payment when due of any
principal of any of the Loans or of any reimbursement
obligations arising from drawings under Letters of Credit, or
(ii) default, and such defaults shall continue
for three (3) or more Business Days, in the payment when due
of any interest on the Loans or on any reimbursement
obligations arising from drawings under Letters of Credit, or
of any Fees or other amounts owing hereunder, under any of the
other Credit Documents or in connection herewith or therewith;
or
(b) Representations. Any representation, warranty or
statement made or deemed to be made by any Credit Party herein, in any
of the other Credit Documents, or in any statement or certificate
delivered or required to be delivered pursuant hereto or thereto shall
prove untrue in any material respect on the date as of which it was
deemed to have been made; or
(c) Covenants. Any Credit Party shall
(i) default in the due performance or observance
of any term, covenant or agreement contained in Sections 7.2,
7.9, 7.11, 7.12 or 8.1 through 8.17, inclusive, or
(ii) default in the due performance or observance
of any term, covenant or agreement contained in Section 7.1
and such default shall continue for a period of at least three
(3) days after the earlier of a responsible officer of a
Credit Party becoming aware of such default or notice thereof
by the Agent; or
(iii) default in the due performance or observance
by it of any term, covenant or agreement (other than those
referred to in subsections (a), (b) or (c)(i) or (ii) of this
Section 9.1) contained in this Credit Agreement and such
default shall continue unremedied for a period of at least 30
days after the earlier of a responsible officer of a Credit
Party becoming aware of such default or notice thereof by the
Agent; or
(d) Other Credit Documents. (i) Any Credit Party shall
default in the due performance or observance of any term, covenant or
agreement in any of the other Credit Documents (subject to applicable
grace or cure periods, if any), or (ii) except as the result of or in
connection with a dissolution, merger or disposition of a Subsidiary
permitted under Section 8.4, any Credit Document shall fail to be in
full force and effect or to give the Agent and/or the Lenders the
Liens, rights, powers and privileges purported to be created thereby,
or any Credit Party shall state any of the foregoing in writing; or
72
(e) Guaranties. Except as the result of or in connection
with a dissolution, merger or disposition of a Subsidiary permitted
under Section 8.4, the guaranty given by any Guarantor hereunder
(including any Additional Credit Party) or any material provision
thereof shall cease to be in full force and effect, or any Guarantor
(including any Additional Credit Party) hereunder or any Person acting
by or on behalf of such Guarantor shall deny or disaffirm such
Guarantor's obligations under such guaranty, or any Guarantor shall
default in the due performance or observance of any term, covenant or
agreement on its part to be performed or observed pursuant to any
guaranty; or
(f) Bankruptcy, etc. Any Bankruptcy Event shall occur
with respect to the Borrower or any of its Subsidiaries; or
(g) Defaults under Other Agreements.
(i) The Borrower or any of its Subsidiaries
shall default in the performance or observance (beyond the
applicable grace period with respect thereto, if any) or any
material obligation or condition of any contract or lease
material to the Borrower and its Subsidiaries taken as a
whole; or
(ii) With respect to the Acquisition Note or any
other Indebtedness (other than Indebtedness outstanding under
this Credit Agreement) in excess of $1,500,000 in the
aggregate for the Borrower and its Subsidiaries taken as a
whole, (A) the Borrower or any of its Subsidiaries shall (1)
default in any payment (beyond the applicable grace period
with respect thereto, if any) with respect to any such
Indebtedness, or (2) the occurrence and continuance of a
default in the observance or performance relating to such
Indebtedness or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event
or condition shall occur or condition exist, the effect of
which default or other event or condition is to cause, or
permit, the holder or holders of such Indebtedness (or trustee
or agent on behalf of such holders) to cause (determined
without regard to whether any notice or lapse of time is
required), any such Indebtedness to become due prior to its
stated maturity; or (B) any such Indebtedness shall be
declared due and payable, or required to be prepaid other than
by a regularly scheduled required prepayment, prior to the
stated maturity thereof; or
(h) Judgments. One or more judgments or decrees shall be
entered against the Borrower or any of its Subsidiaries involving a
liability of $2,500,000 or more in the aggregate (to the extent not
paid or fully covered by insurance provided by a carrier who has
acknowledged coverage) and any such judgments or decrees shall not have
been vacated, discharged or stayed or bonded pending appeal within 30
days from the entry thereof; or
(i) ERISA. Any of the following events or conditions, if
such event or condition could be expected to involve possible taxes,
penalties, and other liabilities in an aggregate amount in excess of
$1,000,000: (1) any "accumulated funding deficiency," as such term is
defined in Section 302 of ERISA and Section 412 of the Code, whether or
not waived, shall exist with respect to any Plan, or any lien shall
arise on the assets of the
73
Borrower, any Subsidiary of the Borrower or any ERISA Affiliate in
favor of the PBGC or a Plan; (2) a Termination Event shall occur with
respect to a Single Employer Plan, which is, in the reasonable opinion
of the Agent, likely to result in the termination of such Plan for
purposes of Title IV of ERISA; (3) a Termination Event shall occur with
respect to a Multiemployer Plan or Multiple Employer Plan, which is, in
the reasonable opinion of the Agent, likely to result in (i) the
termination of such Plan for purposes of Title IV of ERISA, or (ii) the
Borrower, any Subsidiary of the Borrower or any ERISA Affiliate
incurring any liability in connection with a withdrawal from,
reorganization of (within the meaning of Section 4241 of ERISA), or
insolvency or (within the meaning of Section 4245 of ERISA) such Plan;
or (4) any prohibited transaction (within the meaning of Section 406 of
ERISA or Section 4975 of the Code) or breach of fiduciary
responsibility shall occur which may subject the Borrower, any
Subsidiary of the Borrower or any ERISA Affiliate to any liability
under Sections 406, 409, 502(i), or 502(1) of ERISA or Section 4975 of
the Code, or under any agreement or other instrument pursuant to which
the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate has
agreed or is required to indemnify any person against any such
liability; or
(j) Nature of Business. The Borrower shall engage in any
business, activity or operations other than owning and holding the
capital stock of its Subsidiaries and such business activities
incidental or related thereto (including acting as Borrower hereunder
and pledging its assets to the Agent, for the benefit of the Lenders,
pursuant to the Collateral Documents); or
(k) Subordinated Note Indentures. (i) There shall occur
and be continuing any Event of Default or Repurchase Event under and,
in each case, as defined in the Subordinated Note Indenture or (ii) any
of the Borrower's Obligations for any reason shall cease to be "Senior
Indebtedness" under and as defined in the Subordinated Note Indenture;
or
(1) Collateral. Any of the Borrower's Obligations for any
reason shall fail to be secured under the Collateral Documents; or
(m) Ownership. There shall occur a Change of Control.
9.2 ACCELERATION: REMEDIES.
Upon the occurrence of an Event of Default, and at any time thereafter
unless and until such Event of Default has been waived by the Required Lenders
or cured to the satisfaction of the Required Lenders (pursuant to the voting
procedures in Section 11.6), the Agent shall, upon the request and direction of
the Required Lenders, by written notice to the Credit Parties take any of the
following actions:
(i) Termination of Commitments. Declare the Commitments
terminated whereupon the Commitments shall be immediately terminated.
74
(ii) Acceleration. Declare the unpaid principal of and any
accrued interest in respect of all Loans, any reimbursement obligations
arising from drawings under Letters of Credit and any and all other
indebtedness or obligations of any and every kind owing by the Borrower
to the Agent and/or any of the Lenders hereunder to be due whereupon
the same shall be immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby
waived by the Borrower.
(iii) Cash Collateral. Direct the Borrower to pay (and the
Borrower agrees that upon receipt of such notice, or upon the
occurrence of an Event of Default under Section 9.1(f), it will
immediately pay) to the Agent additional cash, to be held by the Agent,
for the benefit of the Lenders, in a cash collateral account as
additional security for the LOC Obligations in respect of subsequent
drawings under all then outstanding Letters of Credit in an amount
equal to the maximum aggregate amount which may be drawn under all
Letters of Credits then outstanding.
(iv) Enforcement of Rights. Enforce any and all rights and
interests created and existing under the Credit Documents and all
rights of set-off.
Notwithstanding the foregoing, if an Event of Default specified in
Section 9.1(f) shall occur, then the Commitments shall automatically terminate
and all Loans, all reimbursement obligations arising from drawings under Letters
of Credit, all accrued interest in respect thereof, all accrued and unpaid Fees
and other indebtedness or obligations owing to the Agent and/or any of the
Lenders hereunder automatically shall immediately become due and payable without
the giving of any notice or other action by the Agent or the Lenders.
SECTION 10
AGENCY PROVISIONS
10.1 APPOINTMENT.
Each Lender hereby designates and appoints Bank of America, N.A. as
administrative agent and as collateral agent (in such capacity as Agent
hereunder, the "Agent") of such Lender to act as specified herein and the other
Credit Documents, and each such Lender hereby authorizes the Agent as the agent
for such Lender, 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. 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 Lender, 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 Lenders and none of the Credit Parties shall have any rights
as a third party
75
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 Lenders 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.
10.2 DELEGATION OF DUTIES.
The Agent may execute any of their respective 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.
10.3 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 Lenders 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 Lender for the effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Credit 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 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 Lenders or by or on behalf of
the Credit Parties to the Agent or any Lender 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 Default or Event of Default or to inspect
the properties, books or records of the Credit Parties or any of their
respective Affiliates.
10.4 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 Lenders as the owner of their respective interests hereunder for
all purposes unless a written notice of assignment, negotiation or transfer
thereof shall have been filed with the
76
Agent in accordance with Section 11.3(b) hereof. The Agent shall be fully
justified in failing or refusing to take any action under this Credit Agreement
or under any of the other Credit Documents unless it shall first receive such
advice or concurrence of the Required Lenders as it deems appropriate or it
shall first be indemnified to its satisfaction by the Lenders against any and
all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, hereunder or under any of the
other Credit Documents in accordance with a request of the Required Lenders (or
to the extent specifically provided in Section 11.6, all the Lenders) and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all the Lenders (including their successors and assigns).
10.5 NOTICE OF DEFAULT.
The Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default hereunder unless the Agent has
received notice from a Lender or a Credit Party referring to the Credit
Document, describing such Default or Event of Default and stating that such
notice is a "notice of default." In the event that the Agent receives such a
notice, the Agent shall give prompt notice thereof to the Lenders. The Agent
shall take such action with respect to such Default or Event of Default as shall
be reasonably directed by the Required Lenders.
10.6 NON-RELIANCE ON AGENT AND OTHER LENDERS.
Each Lender 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 Lender. Each
Lender represents to the Agent that it has, independently and without reliance
upon the Agent or any other Lender, and based on such documents and information
as it has deemed appropriate, made its own appraisal of and investigation into
the business, 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 Credit Agreement. Each Lender also represents that
it will, independently and without reliance upon the Agent or any other Lender,
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Credit 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
creditworthiness 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 Lenders by the Agent hereunder, the Agent shall not have
any duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, 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.
77
10.7 INDEMNIFICATION.
The Lenders agree to indemnify the Agent in its capacity as such (to
the extent not reimbursed by the Borrower and without limiting the obligation of
the Borrower to do so), ratably according to their respective Commitments (or if
the Commitments have expired or been terminated, in accordance with the
respective principal amounts of outstanding Loans and Participation Interests of
the Lenders), 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 Credit 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 Lender shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting 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 Commitments hereunder.
10.8 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 Borrower, its Subsidiaries
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 Credit Agreement as any Lender and may exercise the same as
though it were not the Agent, and the terms "Lender" and "Lenders" shall include
the Agent in its individual capacity.
10.9 SUCCESSOR AGENT.
The Agent may, at any time, resign upon 20 days' written notice to the
Lenders, and be removed with or without cause by the Required Lenders upon 30
days' written notice to the Agent. Upon any such resignation or removal, the
Required Lenders shall have the right to appoint a successor Agent; provided
that, so long as no Default or Event of Default has occurred and is continuing,
such successor Agent shall be reasonably acceptable to the Borrower. If no
successor Agent shall have been so appointed by the Required Lenders, 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 Lender 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
78
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 Credit Agreement and the other
Credit Documents and the provisions of this Section 10.9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Credit Agreement.
SECTION 11
MISCELLANEOUS
11.1 NOTICES.
Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (i) when
delivered, (ii) when transmitted via telecopy (or other facsimile device) to the
number set out below, (iii) the day following the day on which the same has been
delivered prepaid to a reputable national overnight air courier service, or (iv)
the third Business Day following the day on which the same is sent by certified
or registered mail, postage prepaid, in each case to the respective parties at
the address, in the case of the Borrower, Guarantors and the Agent, set forth
below, and, in the case of the Lenders, set forth on Schedule 2.1(a), or at such
other address as such party may specify by written notice to the other parties
hereto:
if to the Borrower or the Guarantors:
Personnel Group of America, Inc.
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxx, Chief Financial Officer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
if to the Agent:
Bank of America, N.A.
One Independence Center, 15th Floor
NC1-001-15-04
000 X. Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Agency Services/Xxxxxxx Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
79
with a copy to:
Bank of America, N.A.
000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
11.2 RIGHT OF SET-OFF.
In addition to any rights now or hereafter granted under applicable law
or otherwise, and not by way of limitation of any such rights, upon the
occurrence of an Event of Default, each Lender is authorized at any time and
from time to time, without presentment, demand, protest or other notice of any
kind (all of which rights being hereby expressly waived), to set-off and to
appropriate and apply any and all deposits (general or special), but excluding
deposits in an Excluded Deposit Account (as defined in Section 7.18), and any
other indebtedness at any time held or owing by such Lender (including, without
limitation branches, agencies or Affiliates of such Lender wherever located) to
or for the credit or the account of any Credit Party against obligations and
liabilities of such Person to such Lender hereunder, under the Notes, the other
Credit Documents or otherwise, irrespective of whether such Lender shall have
made any demand hereunder and although such obligations, liabilities or claims,
or any of them, may be contingent or unmatured, and any such set-off shall be
deemed to have been made immediately upon the occurrence of an Event of Default
even though such charge is made or entered on the books of such Lender
subsequent thereto. Any Person purchasing a participation in the Loans and
Commitments hereunder pursuant to Section 3.13 or Section 11.3(d) may exercise
all rights of set-off with respect to its participation interest as fully as if
such Person were a Lender hereunder.
11.3 BENEFIT OF AGREEMENT.
(a) Generally. This Credit Agreement shall be binding upon and inure to
the benefit of and be enforceable by the respective successors and assigns of
the parties hereto; provided that none of the Credit Parties may assign or
transfer any of its interests without prior written consent of the Lenders;
provided further that the rights of each Lender to transfer, assign or grant
participations in its rights and/or obligations hereunder shall be limited as
set forth in this Section 11.3, provided however that nothing herein shall
prevent or prohibit any Lender from (i) pledging its Loans hereunder to a
Federal Reserve Bank in support of borrowings made by such Lender from such
Federal Reserve Bank, or (ii) granting assignments or selling participations in
such Lender's Loans and/or Commitments hereunder to its parent company and/or to
any Affiliate or Subsidiary of such Lender.
(b) Assignments. Each Lender may assign all or a portion of its
rights and obligations hereunder, pursuant to an assignment agreement
substantially in the form of Schedule 11.3(b), to (i) any Lender or any
Affiliate or Subsidiary of a Lender, or (ii) any other commercial bank,
financial institution or "accredited investor" (as defined in Regulation D of
the Securities and Exchange Commission) reasonably acceptable to the Agent and,
so long as no Default or Event of
80
Default has occurred and is continuing, the Borrower; provided that (i) any such
assignment (other than any assignment to an existing Lender) shall be in a
minimum aggregate amount of $5,000,000 (or, if less, the remaining amount of the
Commitment being assigned by such Lender) of the Commitments and in integral
multiples of $1,000,000 above such amount and (ii) each such assignment shall be
of a constant, not varying, percentage of all such Lender's rights and
obligations under this Credit Agreement. For purposes of the Borrower's
acceptance of the proposed assignee in clause (ii) of the foregoing sentence,
the Borrower shall have been deemed to accept any such assignee unless the
Borrower provides to the Agent and such assigning Lender, written notice of the
Borrower's objection to the assignment setting forth the specific reasons for
its objection, such notice to be delivered no later than three (3) Business Days
after the Borrower receives notice of the requested assignment (as set forth
below). Any assignment hereunder shall be effective upon delivery to the Agent
of written notice of the assignment together with a transfer fee of $3,500
payable to the Agent for its own account from and after the later of (i) the
effective date specified in the applicable assignment agreement and (ii) the
date of recording of such assignment in the Register pursuant to the terms of
subsection (c) below. The assigning Lender will give prompt notice to the Agent
and the Borrower of any such assignment. Upon the effectiveness of any such
assignment (and after notice to, and (to the extent required pursuant to the
terms hereof), with the consent of, the Borrower as provided herein), the
assignee shall become a "Lender" for all purposes of this Credit Agreement and
the other Credit Documents and, to the extent of such assignment, the assigning
Lender shall be relieved of its obligations hereunder to the extent of the Loans
and Commitment components being assigned. Along such lines the Borrower agrees
that upon notice of any such assignment and surrender of the appropriate Note or
Notes, it will promptly provide to the assigning Lender and to the assignee
separate promissory notes in the amount of their respective interests
substantially in the form of the original Note (but with notation thereon that
it is given in substitution for and replacement of the original Note or any
replacement notes thereof). By executing and delivering an assignment agreement
in accordance with this Section 11.3(b), the assigning Lender thereunder and the
assignee thereunder shall be deemed to confirm to and agree with each other and
the other parties hereto as follows: (i) such assigning Lender warrants that it
is the legal and beneficial owner of the interest being assigned thereby free
and clear of any adverse claim; (ii) except as set forth in clause (i) above,
such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Credit Agreement, any of the other Credit
Documents or any other instrument or document furnished pursuant hereto or
thereto, or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Credit Agreement, any of the other Credit Documents
or any other instrument or document furnished pursuant hereto or thereto or the
financial condition of any Credit Party or any of their respective Affiliates or
the performance or observance by any Credit Party of any of its obligations
under this Credit Agreement, any of the other Credit Documents or any other
instrument or document furnished pursuant hereto or thereto; (iii) such assignee
represents and warrants that it is legally authorized to enter into such
assignment agreement; (iv) such assignee confirms that it has received a copy of
this Credit Agreement, the other Credit Documents and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such assignment agreement; (v) such assignee will
independently and without reliance upon the Agent, such assigning Lender or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Credit Agreement and the other Credit Documents;
(vi) such assignee appoints and authorizes the Agent to take such
81
action on its behalf and to exercise such powers under this Credit Agreement or
any other Credit Document as are delegated to the Agent by the terms hereof or
thereof, together with such powers as are reasonably incidental thereto; and
(vii) such assignee agrees that it will perform in accordance with their terms
all the obligations which by the terms of this Credit Agreement and the other
Credit Documents are required to be performed by it as a Lender.
(c) Maintenance of Register. The Agent shall maintain at one of
its offices in Charlotte, North Carolina a copy of each Lender assignment
agreement delivered to it in accordance with the terms of subsection (b) above
and a register for the recordation of the identity of the principal amount, type
and Interest Period of each Loan outstanding hereunder, the names, addresses and
the Commitments of the Lenders pursuant to the terms hereof from time to time
(the "Register"). The Agent will make reasonable efforts to maintain the
accuracy of the Register and to promptly update the Register from time to time,
as necessary. The entries in the Register shall be conclusive in the absence of
manifest error and the Borrower, the Agent and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Credit Agreement. The Register shall be
available for inspection by the Borrower and each Lender, at any reasonable time
and from time to time upon reasonable prior notice.
(d) Participations. Each Lender may sell, transfer, grant or
assign participations in all or any part of such Lender's interests and
obligations hereunder; provided that (i) such selling Lender shall remain a
"Lender" for all purposes under this Credit Agreement (such selling Lender's
obligations under the Credit Documents remaining unchanged) and the participant
shall not constitute a Lender hereunder, (ii) no such participant shall have, or
be granted, rights to approve any amendment or waiver relating to this Credit
Agreement or the other Credit Documents except to the extent any such amendment
or waiver would (A) reduce the principal of or rate of interest on or Fees in
respect of any Loans in which the participant is participating, (B) postpone the
date fixed for any payment of principal (including extension of the Termination
Date or the date of any mandatory prepayment), interest or Fees in which the
participant is participating or (C) except as expressly provided in the Credit
Documents, release all or substantially all of the Collateral or release any
Guarantor from its guaranty obligations hereunder, and (iii) sub-participations
by the participant (except to an affiliate, parent company or affiliate of a
parent company of the participant) shall be prohibited. In the case of any such
participation, the participant shall not have any rights under this Credit
Agreement or the other Credit Documents (the participant's rights against the
selling Lender in respect of such participation to be those set forth in the
participation agreement with such Lender creating such participation) and all
amounts payable by the Borrower hereunder shall be determined as if such Lender
had not sold such participation, provided, however, that such participant shall
be entitled to receive additional amounts under Sections 3.6, 3.9, 3.10 and 3.11
on the same basis as if it were a Lender.
11.4 NO WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of the Agent or any Lender in
exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between the Agent or any Lender and any of the
Credit Parties shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder or under any other
Credit Document preclude any other or further exercise thereof or the exercise
of any other right, power or
82
privilege hereunder or thereunder. The rights and remedies provided herein are
cumulative and not exclusive of any rights or remedies which the Agent or any
Lender would otherwise have. No notice to or demand on any Credit Party in any
case shall entitle the Borrower or any other Credit Party to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of the Agent or the Lenders to any other or further action
in any circumstances without notice or demand.
11.5 PAYMENT OF EXPENSES, ETC.
The Borrower agrees to: (i) pay all reasonable out-of-pocket costs and
expenses (A) of the Agent in connection with the negotiation, preparation,
execution and delivery and administration of this Credit Agreement and the other
Credit Documents and the documents and instruments referred to therein
(including, without limitation, the reasonable fees and expenses of Xxxxx & Xxx
Xxxxx, PLLC, special counsel to the Agent) and any amendment, waiver or consent
relating hereto and thereto including, but not limited to, any such amendments,
waivers or consents resulting from or related to any work-out, renegotiation or
restructure relating to the performance by the Credit Parties under this Credit
Agreement and (B) of the Agent and the Lenders in connection with enforcement of
the Credit Documents and the documents and instruments referred to therein
(including, without limitation, in connection with any such enforcement, the
reasonable fees and disbursements of counsel for the Agent and each of the
Lenders); (ii) pay and hold each of the Lenders harmless from and against any
and all present and future stamp and other similar taxes with respect to the
foregoing matters and save each of the Lenders harmless from and against any and
all liabilities with respect to or resulting from any delay or omission (other
than to the extent attributable to such Lender) to pay such taxes; and (iii)
indemnify each Lender, its officers, directors, employees, representatives and
agents from and hold each of them harmless against any and all losses,
liabilities, claims, damages or expenses incurred by any of them as a result of,
or arising out of, or in any way related to, or by reason of (A) any
investigation, litigation or other proceeding (whether or not any Lender is a
party thereto) related to the entering into and/or performance of any Credit
Document or the use of proceeds of any Loans (including other extensions of
credit) hereunder or the consummation of any other transactions contemplated in
any Credit Document, including, without limitation, the reasonable fees and
disbursements of counsel incurred in connection with any such investigation,
litigation or other proceeding or (B) the presence or Release of any Materials
of Environmental Concern at, under or from any Property owned, operated or
leased by the Borrower or any of its Subsidiaries, or the failure by the
Borrower or any of its Subsidiaries to comply with any Environmental Law (but
excluding, in the case of either of clause (A) or (B) above, any such losses,
liabilities, claims, damages or expenses to the extent incurred by reason of
gross negligence or willful misconduct on the part of the Person to be
indemnified).
11.6 AMENDMENTS, WAIVERS AND CONSENTS.
Neither this Credit Agreement nor any other Credit Document nor any of
the terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is in
writing entered into by, or approved in writing by, the Required Lenders and the
Borrower, provided that no such amendment, change, waiver, discharge or
termination shall, without the consent of each Lender:
83
(i) extend the final maturity 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
post-default increase in interest rates) on any Loan or fees hereunder;
(iii) reduce the principal amount on any Loan, or increase
the Commitments of the Lenders over the amount thereof in effect (it
being understood and agreed that a waiver of any Default or Event of
Default or of a mandatory reduction in the total commitments shall not
constitute a change in the terms of any Commitment of any Lender);
(iv) except as the result of or in connection with a
dissolution, merger or disposition of a Subsidiary permitted under
Section 8.4, release all or substantially all of (A) the Guarantors
from the guaranty obligations hereunder or (B) the Collateral;
(v) amend, modify or waive any provision of this Section
11.6 or Section 3.6, 3.10, 3.11, 3.12, 3.13, 9.1(a), 11.2, 11.3, 11.5
or 11.9;
(vi) reduce any percentage specified in, or otherwise
modify, the definition of "Required Lenders;" or
(vii) consent to the assignment or transfer by the Borrower
(or any Guarantor) of any of its rights and obligations under (or in
respect of) the Credit Documents to which it is a party.
No provision of Section 2.2 may be amended without the consent of the Issuing
Lender and no provision of Section 10 may be amended without the consent of the
Agent.
11.7 COUNTERPARTS.
This Credit Agreement may be executed in any number of counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall constitute one and the same instrument. It shall not be necessary in
making proof of this Credit Agreement to produce or account for more than one
such counterpart.
11.8 HEADINGS.
The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Credit Agreement.
11.9 SURVIVAL.
All indemnities set forth herein, including, without limitation, in
Section 2.2(i), 3.9, 3.11, 10.7 or 11.5 shall survive the execution and delivery
of this Credit Agreement, the making of the Loans, the issuance of the Letters
of Credit, the repayment of the Loans, LOC Obligations and other
84
obligations under the Credit Documents and the termination of the Commitments
hereunder, and all representations and warranties made by the Credit Parties
herein shall survive delivery of the Notes and the making of the Loans
hereunder.
11.10 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE.
(a) THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED
BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NORTH CAROLINA. Any legal action or proceeding with respect to this Credit
Agreement or any other Credit Document may be brought in the courts of the State
of North Carolina in Mecklenburg County, or of the United States for the Western
District of North Carolina, and, by execution and delivery of this Credit
Agreement, each of the Credit Parties hereby irrevocably accepts for itself and
in respect of its property, generally and unconditionally, the nonexclusive
jurisdiction of such courts. Each of the Credit Parties further irrevocably
consents to the service of process out of any of the aforementioned courts in
any such action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to it at the address set out for notices
pursuant to Section 11.1, such service to become effective three (3) days after
such mailing. Nothing herein shall affect the right of the Agent to serve
process in any other manner permitted by law or to commence legal proceedings or
to otherwise proceed against any Credit Party in any other jurisdiction.
(b) Each of the Credit Parties hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of any of
the aforesaid actions or proceedings arising out of or in connection with this
Credit Agreement or any other Credit Document brought in the courts referred to
in subsection (a) hereof and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding brought in
any such court has been brought in an inconvenient forum.
(c) TO THE EXTENT PERMITTED BY LAW, EACH OF THE AGENT, THE
LENDERS, THE BORROWER AND THE CREDIT PARTIES HEREBY IRREVOCABLY WAIVES ALL RIGHT
TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
11.11 SEVERABILITY.
If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
85
11.12 ENTIRETY.
This Credit Agreement together with the other Credit Documents
represent the entire agreement of the parties hereto and thereto, and supersede
all prior agreements and understandings, oral or written, if any, including any
commitment letters or correspondence relating to the Credit Documents or the
transactions contemplated herein and therein.
11.13 BINDING EFFECT; AMENDMENT AND RESTATEMENT OF ORIGINAL CREDIT
AGREEMENT.
(a) This Credit Agreement shall become effective at such time, on
or after the Closing Date, that the conditions precedent set forth in Section
5.1 have been satisfied and when it shall have been executed by each of the
Credit Parties and the Agent, and the Agent shall have received copies hereof
(telefaxed or otherwise) which, when taken together, bear the signatures of each
Lender (including the Issuing Lender), and thereafter this Credit Agreement
shall be binding upon and inure to the benefit of each Credit Party, each Lender
(including the Issuing Lender) and the Agent, together with their permitted
successors and assigns. The Credit Parties and the Lenders (including the
Issuing Lender) each hereby agrees that, at such time as this Credit Agreement
shall have become effective pursuant to the terms of the immediately preceding
sentence, (i) the Original Credit Agreement automatically shall be deemed
amended and restated in its entirety by this Credit Agreement, and all
obligations and commitments outstanding under the Original Credit Agreement
shall be governed by the terms of this Credit Agreement (as such obligations or
commitments may be modified or amended hereunder) and (ii) all of the promissory
notes executed by the Borrower in connection with the Original Credit Agreement
automatically shall be substituted and replaced by the amended and restated
promissory notes executed in connection with this Credit Agreement, and the
Lenders agree to promptly return such prior notes to the Borrower.
(b) Each of the Credit Parties hereby acknowledges and agrees that
it has no claims, counterclaims, offsets, or defenses to the Credit Documents
and the performance of its obligations thereunder, or if such Credit Party has
any such claims, counterclaims, offsets, or defenses to the Credit Documents or
any transaction related to the Credit Documents, the same are hereby waived,
relinquished and released in consideration of the Lenders' execution and
delivery of this Credit Agreement.
11.14 CONFIDENTIALITY.
The Agent and the Lenders agree to keep confidential (and to cause
their respective affiliates, officers, directors, employees, agents and
representatives to keep confidential) all information, materials and documents
furnished to the Agent or any such Lender by or on behalf of any Credit Party
(whether before or after the Closing Date) which relates to the Borrower or any
of its Subsidiaries (the "Information"). Notwithstanding the foregoing, the
Agent and each Lender shall be permitted to disclose Information (i) to its
affiliates, officers, directors, employees, agents and representatives in
connection with its participation in any of the transactions evidenced by this
Credit Agreement or any other Credit Documents or the administration of this
Credit Agreement or any other Credit Documents; (ii) to the extent required by
applicable laws and regulations or by any subpoena or similar legal process, or
requested by any Governmental Authority; (iii) to the extent
86
such Information (A) becomes publicly available other than as a result of a
breach of this Credit Agreement or any agreement entered into pursuant to clause
(iv) below, (B) becomes available to the Agent or such Lender on a
non-confidential basis from a source other than a Credit Party or (C) was
available to the Agent or such Lender on a non-confidential basis prior to its
disclosure to the Agent or such Lender by a Credit Party; (iv) to any assignee
or participant (or prospective assignee or participant) so long as such assignee
or participant (or prospective assignee or participant) first specifically
agrees in a writing furnished to and for the benefit of the Credit Parties to be
bound by the terms of this Section 11.14; or (v) to the extent that the Borrower
shall have consented in writing to such disclosure. Nothing set forth in this
Section 11.14 shall obligate the Agent or any Lender to return any materials
furnished by the Credit Parties.
11.15 SOURCE OF FUNDS.
Each of the Lenders hereby represents and warrants to the Borrower that
at least one of the following statements is an accurate representation as to the
source of funds to be used by such Lender in connection with the financing
hereunder:
(a) no part of such funds constitutes assets allocated to
any separate account maintained by such Lender in which any employee
benefit plan (or its related trust) has any interest;
(b) to the extent that any part of such funds constitutes
assets allocated to any separate account maintained by such Lender,
such Lender has disclosed to the Borrower the name of each employee
benefit plan whose assets in such account exceed 10% of the total
assets of such account as of the date of such purchase (and, for
purposes of this subsection (b), all employee benefit plans maintained
by the same employer or employee organization are deemed to be a single
plan); or
(c) such funds constitute assets of one or more specific
benefit plans which such Lender has identified in writing to the
Borrower.
As used in this Section 11.15, the terms "employee benefit plan" and "separate
account" shall have the respective meanings assigned to such terms in Section 3
of ERISA.
11.16 CONFLICT.
To the extent that there is a conflict or inconsistency between any
provision hereof, on the one hand, and any provision of any Credit Document, on
the other hand, this Credit Agreement shall control.
11.17 SETTLEMENT OF NURSEFINDERS, INC. ESCROW AGREEMENT.
Notwithstanding anything to the contrary in this Credit Agreement or
the other Credit Documents, the Credit Parties may settle and resolve in the
exercise of their reasonable business judgment any disputes or issues relating
to the application of amounts held in an escrow account established at the time
of the sale of Nursefinders, Inc. to hold a portion of the proceeds of such sale
87
pending resolution of certain issues, so long as such Credit Parties comply with
the mandatory prepayment provisions regarding Asset Sales pursuant to Section
3.3.
88
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Amended and Restated Credit Agreement to be duly executed and delivered
as of the date first above written.
[Signature Pages Omitted]
SCHEDULE 1.1A
INVESTMENTS
1. $2,000,000 promissory note dated December 31, 2002 and issued by Enoch
and Xxxxxxx Xxxxxx Xxxxxxx to InfoTech Services, Inc. at the closing of
the sale of PALADIN Consulting, Inc.
2. 4,251,369 shares of common stock of Econometrix, Inc. (certificate #39
dated January 30, 2002); part of equity kicker issued in connection
with exclusive marketing agreement
3. Warrant to purchase up to 3,047,597 shares of Econometrix, Inc. common
stock at $0.10 per share (dated January 30, 2002 and subject to vesting
requirements); also part of equity kicker
4. $250,000 promissory note dated June 30, 2001 and issued by AutoHire
Development, Inc. to PGA at the closing of the CareerShop divestiture
5. 19,900 shares of common stock of AutoHire Development, Inc.
(certificate #2, dated June 30, 2001)
6. Warrant to purchase 25,000 shares of AutoHire Development, Inc. common
stock (warrant #R-O1, dated June 30, 2001)
SCHEDULE 1.1B
LIENS
1. San Francisco tax lien for unpaid city payroll taxes
SCHEDULE 1.1C
FORM OF
AMENDED AND RESTATED PLEDGE AGREEMENT
THIS AMENDED AND RESTATED PLEDGE AGREEMENT (this "Pledge Agreement"),
dated as of June 23, 1997, is made by and among PERSONNEL GROUP OF AMERICA,
INC., a Delaware corporation (the "Borrower"), certain Subsidiaries of the
Borrower identified on the signature pages hereto (such Subsidiaries,
individually a "Guarantor" and collectively the "Guarantors;" the Guarantors
together with the Borrower, individually a "Pledgor" and collectively the
"Pledgors"), and NATIONSBANK, N.A., in its capacity as agent (the "Agent") for
the lenders from time to time party to the Credit Agreement described below (the
"Lenders").
RECITALS
WHEREAS, the Pledgors, certain Lenders named therein (the "Lenders")
and the Agent entered into that certain Credit Agreement, dated as of September
30, 1996 (as amended, the "Original Credit Agreement"), as amended by that
certain Amendment No. 1 to Credit Agreement, dated as of December 13, 1996, that
certain Amendment No. 2 to Credit Agreement, dated as of February 28, 1997, that
certain Amendment No. 3 to Credit Agreement, dated as of April 14, 1997, and
that certain Amendment No. 4 to Credit Agreement and Pledge Agreement, dated as
of May 19, 1997;
WHEREAS, pursuant to the terms of the Original Credit Agreement, the
Pledgors agreed to pledge certain assets as security for the performance by the
Pledgors of the Secured Obligations (as defined herein);
WHEREAS, the Pledgors, the Lenders and the Agent have agreed to amend
the Original Credit Agreement pursuant to that the terms and conditions of that
certain Amended and Restated Credit Agreement, dated as of the date hereof (the
"Credit Agreement"); and
WHEREAS, pursuant to the terms of the Credit Agreement, the Pledgors
agreed to amend and restate their pledge of certain assets as security for the
performance by the Pledgors of the Secured Obligations (as defined herein);
NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Definitions. Capitalized terms used herein but not otherwise
defined shall have the meanings ascribed to such terms in the Credit Agreement.
2. Pledge and Grant of Security Interest. To secure the prompt
payment and performance in full when due, whether by lapse of time, acceleration
or otherwise, of the Secured Obligations (as defined in Section 3 hereof), each
Pledgor hereby pledges and assigns to the Agent, for the benefit of the Lenders,
and grants to the Agent, for the benefit of the Lenders, a continuing security
interest in, and a right to set off against, any and all right, title and
interest of such Pledgor in and to the following, whether now owned or existing
or owned, acquired, or arising hereafter (collectively, the "Pledged
Collateral"):
(a) Pledged Shares. (i) All of the issued and outstanding
shares of stock of the Subsidiaries of such Pledgor set forth on
Schedule 1 attached hereto, including without limitation, all other
shares of capital stock of whatever class now or hereafter owned by
such Pledgor, in each case
1
together with the certificates representing such shares, and all
options and other rights, contractual or otherwise, with respect
thereto (collectively the "Pledged Shares"), including the following:
(i) all shares or securities representing a
dividend on any of the Pledged Shares, or representing a
distribution or return of capital upon or in respect of the
Pledged Shares, or resulting from a stock split, revision,
reclassification or other exchange therefor, and any
subscriptions, warrants, rights or options issued to the
holder of, or otherwise in respect of, the Pledged Shares; and
(ii) without affecting the obligations of such
Pledgor under any provision prohibiting such action hereunder,
in the event of any consolidation or merger in which a Pledgor
is not the surviving corporation, all shares of each class of
the capital stock of the successor corporation formed by or
resulting from such consolidation or merger.
(b) Additional Shares. All of the issued and outstanding
shares of stock of any Subsidiary of a Pledgor which is hereafter
formed or acquired by such Pledgor, including without limitation, the
certificates representing such shares.
(c) Proceeds. All proceeds and products of the foregoing,
however and whenever acquired and in whatever form.
Without limiting the generality of the foregoing, it is hereby
specifically understood and agreed that a Pledgor may from time to time
hereafter deliver additional shares of stock to the Agent as collateral security
for the Secured Obligations. Upon delivery to the Agent, such additional shares
of stock shall be deemed to be part of the Pledged Collateral of such Pledgor
and shall be subject to the terms of this Pledge Agreement whether or not
Schedule 1 is amended to refer to such additional shares.
3. Security for Secured Obligations. The security interest
created hereby in the Pledged Collateral of each Pledgor constitutes continuing
collateral security for all of the following, whether now existing or hereafter
incurred (the "Secured Obligations"):
(a) In the case of the Borrower, the prompt performance
and observance by the Borrower of all obligations of the Borrower under
the Credit Agreement, the Notes, this Pledge Agreement and the other
Credit Documents to which the Borrower is a party;
(b) In the case of the Guarantors, the prompt performance
and observance by such Guarantor of all obligations of such Guarantor
under the Credit Agreement, this Pledge Agreement and the other Credit
Documents to which such Guarantor is a party, including, without
limitation, its guaranty obligations arising under Section 4 of the
Credit Agreement; and
(c) All other indebtedness, liabilities and obligations
of any kind or nature owing from any Pledgor to any Lender or the Agent
in connection with (i) this Pledge Agreement or any other Credit
Document, whether now existing or hereafter arising, due or to become
due, direct or indirect, absolute or contingent, and howsoever
evidenced, held or acquired, together with any and all modifications,
extensions, renewals and/or substitutions of any of the foregoing, (ii)
collecting and enforcing the Secured Obligations and (iii) liabilities
arising under any interest rate protection agreement or foreign
exchange agreement between the Borrower and any Lender or any Affiliate
of a Lender.
4. Delivery of the Pledged Collateral. Each Pledgor hereby agrees
that:
2
(a) Certificates. Such Pledgor shall deliver to the Agent
(i) simultaneously with or prior to the execution and delivery of this
Pledge Agreement, all certificates representing the Pledged Shares and
(ii) promptly upon the receipt thereof by or on behalf of such Pledgor,
all other certificates and instruments constituting Pledged Collateral
of such Pledgor. Prior to delivery to the Agent, all such certificates
and instruments constituting Pledged Collateral of such Pledgor shall
be held in trust by such Pledgor for the benefit of the Agent and the
Lenders pursuant hereto. All such certificates shall be delivered in
suitable form for transfer by delivery or shall be accompanied by duly
executed undated instruments of transfer or assignment in blank, in
form provided in Schedule 2 attached hereto or in such other form as
acceptable to the Agent.
(b) Additional Securities. 1f such Pledgor shall receive
by virtue of its being or having been the owner of any Pledged
Collateral, any (i) stock certificate, including without limitation,
any certificate representing a stock dividend or distribution in
connection with any increase or reduction of capital, reclassification,
merger, consolidation, sale of assets, combination of shares, stock
splits, spin-off or split-off, promissory notes or other instrument;
(ii) option or right, whether as an addition to, a substitution for, or
an exchange for, any Pledged Collateral or otherwise; (iii) dividends
payable in securities; or (iv) distributions of securities in
connection with a partial or total liquidation, dissolution or
reduction of capital, capital surplus or paid-in surplus, then such
Pledgor shall receive such stock certificate, instrument, option, right
or distribution in trust for the benefit of the Agent and the Lenders,
shall segregate it from such Pledgor's other property and shall deliver
it forthwith to the Agent in the exact form received together with any
necessary endorsement and/or appropriate undated stock power duly
executed in blank in the form provided in Schedule 2 attached hereto,
to be held by the Agent as Pledged Collateral and as further collateral
security for the Secured Obligations.
(c) Financing Statements. Such Pledgor shall execute and
deliver to the Agent such UCC (as hereinafter defined) financing
statements as may be reasonably requested by the Agent in order to
perfect and protect the security interest created hereby in the Pledged
Collateral of such Pledgor.
5. Representations and Warranties. Each Pledgor hereby represents
and warrants to the Agent, for the benefit of the Lenders, that so long as any
of the Secured Obligations remain outstanding or any Credit Document is in
effect or any Letter of Credit shall remain outstanding, and until all of the
Commitments shall have been terminated:
(a) Authorization of Pledged Shares. The Pledged Shares
of such Pledgor are duly authorized and validly issued, are fully paid
and nonassessable and are not subject to the preemptive rights of any
Person. All other shares of stock constituting Pledged Collateral will
be duly authorized and validly issued, fully paid and nonassessable and
not subject to the preemptive rights of any Person.
(b) Title. Such Pledgor has good and indefeasible title
to the Pledged Collateral of such Pledgor and will at all times be the
legal and beneficial owner of such Pledged Collateral free and clear of
any Lien, except for the security interest created by this Pledge
Agreement and other Permitted Liens. There exists no "adverse claim"
within the meaning of Section 8-302 of the Uniform Commercial Code as
in effect in the State of North Carolina (the "UCC") with respect to
the Pledged Shares of such Pledgor.
(c) Exercising of Rights. The exercise by the Agent of
its rights and remedies hereunder will not violate any law or
governmental regulation or judgment or any material contractual
restriction binding on or affecting such Pledgor or any of its
Property.
3
(d) Pledgor's Authority. No authorization, approval or
action by, and no notice to or filing with, any Governmental Authority
or with the issuer of any Pledged Stock of such Pledgor is required
either (i) for the pledge made by such Pledgor or for the granting of
the security interest by such Pledgor pursuant to this Pledge
Agreement; or (ii) for the exercise by the Agent of its rights and
remedies hereunder (except as may be required by laws affecting the
offering and sale of securities).
(e) Security Interest/Priority. This Pledge Agreement
creates a valid security interest in favor of the Agent, for the
benefit of the Lenders, in the Pledged Collateral of such Pledgor. The
taking possession by the Agent of the certificates representing the
Pledged Shares of such Pledgor and all other certificates and
instruments constituting Pledged Collateral of such Pledgor will
perfect and establish the first priority of the Agent's security
interest, for the benefit of the Lenders, in the Pledged Shares of such
Pledgor and in all other Pledged Collateral of such Pledgor represented
by such Pledged Shares and instruments securing the Secured
Obligations. Except as set forth in this Section 5(e), no action is
necessary to perfect or otherwise protect such security interest.
(f) No Other Shares. No Pledgor owns any shares of stock
other than as set forth on Schedule 1 attached hereto.
6. Covenants. Each Pledgor hereby covenants that so long as any
of the Secured Obligations remain outstanding or any Credit Document is in
effect or any Letter of Credit shall remain outstanding, and until all of the
Commitments shall have been terminated, such Pledgor shall:
(a) Books and Records. Xxxx its books and records (and
shall cause the issuer of the Pledged Shares of such Pledgor to xxxx
its books and records) to reflect the security interest granted to the
Agent, for the benefit of the Lenders, pursuant to this Pledge
Agreement.
(b) Defense of Title. Warrant and defend title to and
ownership of the Pledged Collateral of such Pledgor at its own expense
against the claims and demands of all other parties claiming an
interest therein, keep the Pledged Collateral of such Pledgor free from
all Liens, except for Permitted Liens, and not sell, exchange,
transfer, assign, lease or otherwise dispose of Pledged Collateral of
such Pledgor or any interest therein, except as permitted under the
Credit Agreement.
(c) Further Assurances. Promptly execute and deliver at
its expense all further instruments and documents and take all further
action that may be necessary and desirable or that the Agent may
reasonably request in order to (i) perfect and protect the security
interest created hereby in the Pledged Collateral of such Pledgor; (ii)
enable the Agent to exercise and enforce its rights and remedies
hereunder in respect of the Pledged Collateral of such Pledgor; and
(iii) otherwise effect the purposes of this Pledge Agreement,
including, without limitation and if requested by the Agent, delivering
to the Agent irrevocable proxies in respect of the Pledged Shares of
such Pledgor.
(d) Amendments. Not make or consent to any amendment or
other modification or waiver with respect to any of the Pledged
Collateral of such Pledgor or enter into any agreement or allow to
exist any restriction with respect to any of the Pledged Collateral of
such Pledgor other than pursuant hereto or as may be permitted under
the Credit Agreement.
(e) Compliance with Securities Laws. File all reports and
other information now or hereafter required to be filed by such
Pledgor with the United States Securities and Exchange Commission and
any other state, federal or foreign agency in connection with the
ownership of the Pledged Collateral of such Pledgor.
4
7. Rights of the Agent.
(a) Power of Attorney. 1n addition to other powers of
attorney contained herein, each Pledgor hereby designates and appoints
the Agent and each of its designees or agents as attorney-in-fact of
such Pledgor, irrevocably and with power of substitution, with
authority to take any or all of the following actions upon the
occurrence and during the continuance of an Event of Default:
(i) to demand, collect, settle, compromise,
adjust and give discharges and releases, all as the Agent may
determine;
(ii) to commence and prosecute any actions at
any court for the purposes of collecting any of the Pledged
Collateral of such Pledgor and enforcing any other right in
respect thereof;
(iii) to defend, settle or compromise any action
brought and, in connection therewith, give such discharge or
release as the Agent may deem appropriate;
(iv) to pay or discharge taxes, liens, security
interests, or other encumbrances levied or placed on or
threatened against the Pledged Collateral of such Pledgor;
(v) to direct any parties liable for any payment
under any of the Pledged Collateral of such Pledgor to make
payment of any and all monies due and to become due
thereunder directly to the Agent or as the Agent shall direct;
(vi) to receive payment of and receipt for any
and all monies, claims, and other amounts due and to become
due at any time in respect of or arising out of any Pledged
Collateral of such Pledgor;
(vii) to sign and endorse any drafts, assignments,
proxies, stock powers, verifications, notices and other
documents relating to the Pledged Collateral of such Pledgor;
(viii) to settle, compromise or adjust any suit,
action or proceeding described above and, in connection
therewith, to give such discharges or releases as the Agent
may deem reasonably appropriate;
(ix) to exchange any of the Pledged Collateral of
such Pledgor or other property upon any merger, consolidation,
reorganization, recapitalization or other readjustment of the
issuer thereof and in connection therewith, deposit any of the
Pledged Collateral of such Pledgor with any depository,
transfer agent, registrar or other designated agency upon such
terms as the Agent may determine; and
(x) to do and perform all such other acts and
things as the Agent may reasonably deem to be necessary,
proper or convenient in connection with the Pledged Collateral
of such Pledgor.
This power of attorney is a power coupled with an interest and shall be
irrevocable. The Agent shall be under no duty to exercise or withhold the
exercise of any of the rights, powers, privileges and options expressly or
implicitly granted to the Agent in this Pledge Agreement, and shall not be
liable for any failure to do so or any delay in doing so. The Agent shall not be
liable for any act or omission or for any error of judgment or any mistake of
fact or law in its individual capacity or its
5
capacity as attorney-in-fact except acts or omissions resulting from
its negligence or willful misconduct. This power of attorney is
conferred on the Agent solely to protect, preserve and realize upon its
security interest, for the benefit of the Lenders, in Pledged
Collateral.
(b) Performance by the Agent of Pledgor's Obligations.
1f any Pledgor fails to perform any agreement or obligation contained
herein, after the occurrence and during the continuance of an Event of
Default, the Agent itself may perform, or cause performance of, such
agreement or obligation, and the expenses of the Agent incurred in
connection therewith shall be payable by the Pledgors on a joint and
several basis.
(c) Assignment by the Agent. To the extent permitted
under the Credit Agreement, the Agent may from time to time assign the
Pledged Collateral and any portion thereof, and the assignee shall be
entitled to all of the rights and remedies of the Agent under this
Pledge Agreement in relation thereto.
(d) The Agent's Duty of Care. Other than the exercise of
reasonable care to assure the safe custody of the Pledged Collateral
while being held by the Agent hereunder, the Agent shall have no duty
or liability to preserve rights pertaining thereto, it being understood
and agreed that each Pledgor shall be responsible for preservation of
all rights in the Pledged Collateral of such Pledgor, and the Agent
shall be relieved of all responsibility for Pledged Collateral upon
surrendering it or tendering the surrender of it to such Pledgor. The
Agent shall be deemed to have exercised reasonable care in the custody
and preservation of the Pledged Collateral in its possession if such
Pledged Collateral is accorded treatment substantially equal to that
which the Agent accords its own property, it being understood that the
Agent shall not have responsibility for (i) ascertaining or taking
action with respect to calls, conversions, exchanges, maturities,
tenders or other matters relating to any Pledged Collateral, whether or
not the Agent has or is deemed to have knowledge of such matters; or
(ii) taking any necessary steps to preserve rights against any parties
with respect to any Pledged Collateral.
(e) Voting Rights in Respect of the Pledged Shares.
(i) So long as no Event of Default shall have
occurred and be continuing, to the extent permitted by law,
each Pledgor may exercise any and all voting and other
consensual rights pertaining to the Pledged Shares of such
Pledgor or any part thereof for any purpose not inconsistent
with the terms of this Pledge Agreement or the Credit
Agreement;
(ii) Upon the occurrence and during the
continuance of an Event of Default, upon written notice from
the Agent, all rights of a Pledgor to exercise the voting and
other consensual rights which it would otherwise be entitled
to exercise pursuant to paragraph (i) of this Section shall
cease and all such rights shall thereupon become vested in the
Agent which shall thereupon have the sole right to exercise
such voting and other consensual rights.
(f) Dividend Rights in Respect of the Pledged Shares.
(i) So long as no Event of Default shall have
occurred and be continuing and subject to Section 4(b) hereof,
each Pledgor may receive and retain any and all dividends
(other than stock dividends and other dividends constituting
Pledged Collateral of such Pledgor which are addressed
hereinabove) or interest paid in respect of the Pledged
Collateral of such Pledgor to the extent they are allowed
under the Credit Agreement.
6
(ii) Upon the occurrence and during the
continuance of an Event of Default:
(A) all rights of a Pledgor to receive
the dividends and interest payments which it would
otherwise be authorized to receive and retain
pursuant to paragraph (i) of this Section shall cease
and all such rights shall thereupon be vested in the
Agent which shall thereupon have the sole right to
receive and hold as Pledged Collateral such dividends
and interest payments; and
(B) all dividends and interest payments
which are received by such Pledgor contrary to the
provisions of paragraph (A) of this Section shall be
received in trust for the benefit of the Agent and
the Lenders, shall be segregated from other property
or funds of such Pledgor, and shall be forthwith paid
over to the Agent as Pledged Collateral in the exact
form received, to be held by the Agent as Pledged
Collateral and as further collateral security for the
Secured Obligations.
(g) Release of Pledged Collateral. The Agent may release
any of the Pledged Collateral from this Pledge Agreement or may
substitute any of the Pledged Collateral for other Pledged Collateral
without altering, varying or diminishing in any way the force, effect,
lien, pledge or security interest of this Pledge Agreement as to any
Pledged Collateral not expressly released or substituted, and this
Pledge Agreement shall continue as a first priority lien, security
interest, pledge and charge on all Pledged Collateral not expressly
released or substituted when any of the Secured Obligations remain
outstanding.
8. Advances by Agent. On failure of any Pledgor to perform any of
the covenants and agreements contained herein, the Agent may, at its sole option
and in its sole discretion, perform the same and in so doing may expend such
sums as the Agent may reasonably deem advisable in the performance thereof,
including, without limitation, the payment of any insurance premiums, the
payment of any taxes, a payment to obtain a release of a Lien or potential Lien,
expenditures made in defending against any adverse claim and all other
expenditures which the Agent or the Lenders may make for the protection of the
security hereof or which may be compelled to make by operation of law. All such
sums and amounts so expended shall be repayable by the Pledgors immediately
without notice or demand, shall constitute additional Secured Obligations and
shall bear interest from the date said amounts are expended at the default rate
provided in Section 3.1 of the Credit Agreement. No such performance of any
covenant or agreement by the Agent or the Lenders on behalf of any Pledgor, and
no such advance or expenditure therefor, shall relieve the Pledgors of any
default under the terms of this Pledge Agreement or the other Credit Documents.
The Agent or Lenders may make any payment hereby authorized in accordance with
any xxxx, statement or estimate procured from the appropriate public office or
holder of the claim to be discharged without inquiry into the accuracy of such
xxxx, statement or estimate or into the validity of any tax assessment, sale,
forfeiture, tax lien, title or claim.
9. Events of Default. The occurrence of an Event of Default under
and as defined in the Credit Agreement shall be an Event of Default hereunder
("Event of Default").
10. Remedies Upon Default. If any Event of Default shall have
occurred and be continuing:
(a) Rights and Remedies. The Agent may exercise in
respect of the Pledged Collateral of any Pledgor, in addition to other
rights and remedies provided for herein or otherwise available to it,
all rights and remedies of a secured party on default under the UCC or
any other applicable law.
7
(b) Sale of Pledged Collateral. Without limiting the
generality of this Section and without notice (except as provided
below), the Agent may, in its sole discretion, sell or otherwise
dispose of or realize upon the Pledged Collateral, or any part thereof,
in one or more parcels, at public or private sale, at any exchange or
broker's board or elsewhere, at such price or prices and on such other
terms as the Agent may deem commercially reasonable, for cash, credit
or for future delivery without assumption of credit risk or otherwise
in accordance with applicable law. To the extent permitted by law, any
Lender may in such event, bid for the purchase of such securities. Each
Pledgor agrees that any requirement of reasonable notice shall be met
if notice, specifying the place of any public sale or the time after
which any private sale is to be made, shall be personally served on or
mailed, postage prepaid, to any Pledgor in accordance with the notice
provisions of Section 11.1 of the Credit Agreement at least 10 days
before time of such sale. The Agent shall not be obligated to make any
sale of Pledged Collateral of such Pledgor regardless of notice of sale
having been given. The Agent may adjourn any public or private sale
from time to time by announcement at the time and place fixed therefor,
and such sale may, without further notice, be made at the time and
place to which it was so adjourned.
(c) Private Sale. The Pledgors recognize that the Agent
may deem it impracticable to effect a public sale of all or any part of
the Pledged Collateral or any of the securities constituting Pledged
Collateral and that the Agent may, therefore, determine to make one or
more private sales of any such securities to a restricted group of
purchasers who will be obligated to agree, among other things, to
acquire such securities for their own account, for investment and not
with a view to the distribution or resale thereof. Each Pledgor
acknowledges that any such private sale may be at prices and on terms
less favorable to the seller than the prices and other terms which
might have been obtained at a public sale and, notwithstanding the
foregoing, agrees that such private sale shall be deemed to have been
made in a commercially reasonable manner and that the Agent shall have
no obligation to delay sale of any such securities for the period of
time necessary to permit the issuer of such securities to register such
securities for public sale under the Securities Act of 1933. Each
Pledgor further acknowledges and agrees that any offer to sell such
securities which has been (i) publicly advertised on a bona fide basis
in a newspaper or other publication of general circulation in the
financial community of New York, New York (to the extent that such
offer may be advertised without prior registration under the Securities
Act of 1933), or (ii) made privately in the manner described above
shall be deemed to involve a "public sale" under the UCC,
notwithstanding that such sale may not constitute a "public offering"
under the Securities Act of 1933, and the Agent or any Lender may, in
such event, bid for the purchase of such securities.
(d) Retention of Pledged Collateral. The Agent may, after
providing the notices required by Section 9-505(2) of the UCC or
otherwise complying with the requirements of applicable law of the
relevant jurisdiction, retain all or any portion of the Pledged
Collateral in satisfaction of the Pledgor Obligations. Unless and
until the Agent shall have provided such notices, however, the Agent
shall not be deemed to have retained any Pledged Collateral in
satisfaction of any Pledgor Obligations for any reason.
(e) Deficiency. In the event that the proceeds of any
sale, collection or realization are insufficient to pay all amounts to
which the Agent or the Lenders are legally entitled, the Pledgors shall
be jointly and severally liable for the deficiency, together with
interest thereon at the default rate provided in Section 3.1 of the
Credit Agreement, together with the costs of collection and the
reasonable fees of any attorneys employed by the Agent to collect such
deficiency. Any surplus remaining after the full payment and
satisfaction of the Secured Obligations shall be returned to the
appropriate Pledgors or to whomsoever a court of competent jurisdiction
shall determine to be entitled thereto.
8
(f) Application of Proceeds. Upon the occurrence and
during the continuance of an Event of Default, any payments in respect
of the Secured Obligations and any proceeds of the Pledged Collateral,
when received by the Agent or any of the Lenders in cash or its
equivalent, will be applied in reduction of the Secured Obligations in
the order set forth in Section 3.14(b) of the Credit Agreement, and
each Pledgor irrevocably waives the right to direct the application of
such payments and proceeds and acknowledges and agrees that the Agent
shall have the continuing and exclusive right to apply and reapply any
and all such payments and proceeds notwithstanding any entry to the
contrary upon any of its books and records.
11. Costs of Counsel. If at any time hereafter, whether upon the
occurrence of an Event of Default or not, the Agent employs counsel to prepare
or consider amendments, waivers or consents with respect to this Pledge
Agreement, or to take action or make a response in or with respect to any legal
or arbitral proceeding relating to this Pledge Agreement or relating to the
Pledged Collateral, or to protect the Pledged Collateral of any Pledgor or
exercise any rights or remedies under this Pledge Agreement or with respect to
any Pledged Collateral, then the Pledgors jointly and severally agree to
promptly pay upon demand any and all such reasonable costs and expenses of the
Agent and the Lenders, all of which costs and expenses shall constitute Secured
Obligations hereunder.
12. Continuing Agreement.
(a) This Pledge Agreement shall be a continuing agreement
in every respect and shall remain in full force and effect so long as
the Credit Agreement is in effect or any amounts payable there under or
under any other Credit Document or any Letter of Credit shall remain
outstanding, and until all of the Commitments there under shall have
terminated. Upon such termination of this Pledge Agreement, the Lenders
shall, upon the request and at the expense of the Pledgors, forthwith
release all of their liens and security interests hereunder.
Notwithstanding the foregoing all releases and indemnities provided
hereunder shall survive termination of this Pledge Agreement.
(b) This Pledge Agreement shall continue to be effective
or be automatically reinstated, as the case may be, if at any time
payment, in whole or in part, of any of the Secured Obligations is
rescinded or must otherwise be restored or returned by the Agent or any
Lender as a preference, fraudulent conveyance or otherwise under any
bankruptcy, insolvency or similar law, all as though such payment had
not been made; provided that in the event payment of all or any part of
the Secured Obligations is rescinded or must be restored or returned,
all reasonable costs and expenses (including without limitation any
reasonable legal fees and disbursements) incurred by the Agent or any
Lender in defending and enforcing such reinstatement shall be deemed to
be included as a part of the Secured Obligations.
13. Amendments; Waivers; Modifications. This Pledge Agreement and
the provisions hereof may be changed, discharged or terminated only by an
instrument in writing signed by each of the Pledgors and the Agent with the
requisite consent of the Lenders as provided in the Credit Agreement.
14. Successors in Interest. This Pledge Agreement shall create a
continuing security interest in the Pledged Collateral of each of the Pledgors
and shall be binding upon each of the Pledgors, its successors and assigns and
shall inure, together with the rights and remedies of the Agent hereunder, to
the benefit of the Agent and the Lenders and their successors and assigns;
provided, however, that none of the Pledgor may assign its rights or delegate
its duties hereunder without the prior written consent of the Agent and all of
the Lenders. Without limiting the generality of the foregoing, and subject to
the provisions of Section 11.3 of the Credit Agreement, any Lender may assign or
otherwise transfer any indebtedness held by it secured by this Pledge Agreement
to any other person or entity, and such other person or entity shall thereupon
become vested with all the benefits in respect thereof granted to such Lender
herein or otherwise, subject, however, to
9
the provisions of the Credit Agreement. Each Pledgor hereby releases the Agent
and the Lenders from any liability for any act or omission relating to the
Pledged Collateral or this Pledge Agreement, except for any such liability
resulting from gross negligence or willful misconduct.
15. Notices. All notices required or permitted to be given under
this Pledge Agreement shall be in conformance with Section 11.1 of the Credit
Agreement.
16. Counterparts. This Pledge Agreement may be executed in any
number of counterparts, each of which when so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Pledge Agreement to produce or
account for more than one such counterpart.
17. Headings. The headings of the sections and subsections hereof
are provided for convenience only and shall not in any way affect the meaning or
construction of any provision of this Pledge Agreement.
18. Governing Law; Submission to Jurisdiction; Venue.
(a) THIS PLEDGE AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA.
Any legal action or proceeding with respect to this Pledge Agreement
may be brought in the courts of the State of North Carolina in
Mecklenburg County, or of the United States for the Western District of
North Carolina, and, by execution and delivery of this Pledge
Agreement, each of the Pledgors hereby irrevocably accepts for itself
and in respect of its property, generally and unconditionally, the
nonexclusive jurisdiction of such courts. Each of the Pledgors further
irrevocably consents to the service of process out of any of the
aforementioned courts in any such action or proceeding by the mailing
of copies thereof by registered or certified mail, postage prepaid, to
it at the address set out for notices pursuant to Section 11.1 of the
Credit Agreement, such service to become effective 30 days after such
mailing. Nothing herein shall affect the right of the Agent to serve
process in any other manner permitted by law or to commence legal
proceedings or to otherwise proceed against any Pledgor in any other
jurisdiction.
(b) Each of the Pledgors hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of
any of the aforesaid actions or proceedings arising out of or in
connection with this Pledge Agreement brought in the courts referred to
in subsection (a) hereof and hereby further irrevocably waives and
agrees not to plead or claim in any such court that any such action or
proceeding brought in any such court has been brought in an
inconvenient forum.
(c) TO THE EXTENT PERMITTED BY LAW, THE AGENT AND EACH OF
THE PLEDGORS HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS PLEDGE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
19. Severability. If any provision of this Pledge Agreement is
determined to be illegal, invalid or unenforceable, such provision shall be
fully severable and the remaining provisions shall remain in full force and
effect and shall be construed without giving effect to the illegal, invalid or
unenforceable provisions.
20. Entire. This Pledge Agreement and the other Credit Documents
represent the entire agreement of the parties hereto and thereto, and supersede
all prior agreements and understandings, oral or
10
written, if any, including any commitment letters or correspondence relating to
the Credit Documents or the transactions contemplated herein and therein.
21. Survival. All representations and warranties of the Pledgors
hereunder shall survive the execution and delivery of this Pledge Agreement and
the other Credit Documents, the delivery of the Notes and the making of the
Loans and the issuance of Letters of Credit under the Credit Agreement.
22. Other Security. To the extent that any of the Secured
Obligations are now or hereafter secured by Property other than the Pledged
Collateral (including, without limitation, real property and securities owned by
a Pledgor), or by a guarantee, endorsement or Property of any other Person, then
the Agent and the Lenders shall have the right to proceed against such other
property, guarantee or endorsement upon the occurrence of any Event of Default,
and the Agent and the Lenders have the right, in their sole discretion, to
determine which rights, security, liens, security interests or remedies the
Agent and the Lenders shall at any time pursue, relinquish, subordinate, modify
or take with respect thereto, without in any way modifying or affecting any of
them or any of the Agent's and the Lenders' rights or the Secured Obligations
under this Pledge Agreement or under any other of the Credit Documents.
23. Joint and Several Obligations of Pledgors. All payment
obligations of the Pledgors hereunder shall be joint and several.
24. Rights of Required Lenders. All rights of the Agent hereunder,
if not exercised by the Agent, may be exercised by the Required Lenders, subject
in all respects to Section 11.6 of the Credit Agreement.
11
Each of the Pledgors has caused a counterpart of this Pledge Agreement
to be duly executed and delivered as of the date first above written.
BORROWER: PERSONNEL GROUP OF AMERICA, INC.,
a Delaware corporation
By
------------------------------------
Name
----------------------------------
Title
---------------------------------
GUARANTORS: STAFFPLUS, INC.,
a Delaware corporation
By
------------------------------------
Name
----------------------------------
Title
---------------------------------
XXXXXX STAFFING SERVICES, INC.,
a California corporation
By
------------------------------------
Name
----------------------------------
Title
---------------------------------
PFI CORP.,
a Delaware corporation
By
------------------------------------
Name
----------------------------------
Title
---------------------------------
NURSEFINDERS, INC.,
a Texas corporation
By
------------------------------------
Name
----------------------------------
Title
---------------------------------
12
NF SERVICES, INC.,
a New York corporation
By
------------------------------------
Name
----------------------------------
Title
---------------------------------
B.C.P., INC.,
a Hawaii corporation
By
------------------------------------
Name
----------------------------------
Title
---------------------------------
INFOTECH SERVICES, INC.,
a North Carolina corporation
By
------------------------------------
Name
----------------------------------
Title
---------------------------------
XXXXXXXXX SYSTEMS, INC.,
a Virginia corporation
By
------------------------------------
Name
----------------------------------
Title
---------------------------------
WORD PROCESSING PROFESSIONALS, INC.,
a New York corporation
By
------------------------------------
Name
----------------------------------
Title
---------------------------------
13
XXXXX-XXXXXX CONSULTING, INC.,
a California corporation
By
------------------------------------
Name
----------------------------------
Title
---------------------------------
14
Accepted and agreed to as of the date first above written.
NATIONSBANK, N.A., as Agent
By
------------------------------------
Name
----------------------------------
Title
---------------------------------
15
Schedule 1
Pledged Shares
NAME OF PLEDGOR: PERSONNEL GROUP OF AMERICA, INC.
Certificate
Name of Subsidiary Number of Shares Number
------------------ ---------------- -----------
NAME OF PLEDGOR:
----------------------------
Certificate
Name of Subsidiary Number of Shares Number
------------------ ---------------- ------------
16
Schedule 2
Form of
Irrevocable Stock Power
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
to
the following shares of capital stock of _______________, a ____________________
corporation:
No. of Shares Certificate No.
------------- ---------------
and irrevocably appoints _______________________ its agent and attorney-in-fact
to transfer all or any part of such capital stock and to take all necessary and
appropriate action to effect any such transfer. The agent and attorney-in-fact
may substitute and appoint one or more persons to act for him. The effectiveness
of a transfer pursuant to this stock power shall be subject to any and all
transfer restrictions referenced on the face of the certificates evidencing such
interest or in the certificate of incorporation or bylaws of the subject
corporation, to the extent they may from time to time exist.
[PLEDGOR]
17
SCHEDULE 2.1(a)
LENDERS
Name and Address of Lender Committed Amount Commitment Percentage
-------------------------- ---------------- ---------------------
Bank of America, N.A., formerly $37,400,000 27.5%
NationsBank, N.A., Bank of America
Illinois and Bank of America National
Trust and Savings Association
One Independence Center, 15th Floor
NC1-001-15-04
000 X. Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attn: Administrative Agency Services
(Xxxxxxx Xxxxx)
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Banque Paribas $13,600,000 10.0%
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Comerica Bank $13,600,000 10.0%
Comerica Tower at Detroit Center
000 Xxxxxxxx Xxxxxx
Mail Code: 3280
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Credit Lyonnais $13,600,000 10.0%
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopier : (000) 000-0000
Name and Address of Lender Committed Amount Commitment Percentage
-------------------------- ---------------- ---------------------
Bank One, NA, formerly The First $ 13,600,000 10.0%
National Bank of Chicago
One Bank One Plaza
17th Floor/IL 1-0631
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
PNC Bank, National Association $ 13,600,000 10.0%
000 Xxxxx Xxxxxx
One PNC Plaza - 2nd Floor
Pittsburgh, Pennsylvania 15222-2707
Attn: Xxx XxXxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
First Union National Bank $ 17,000,000 12.5%
000 Xxxxxxxxx Xxxxxx, X.X.
Mail Code: GA-215
Xxxxxxx, XX 00000
Attn: Xxxx Xxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Wachovia Bank, N.A. $ 13,600,000 10.0%
000 Xxxxxxxxx Xxxxxx, X.X.
Mail Code: GA-215
Xxxxxxx, XX 00000
Attn: Xxxx Xxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
TOTAL: $136,000,000 100.0%
SCHEDULE 2.1(b)(i)
FORM OF NOTICE OF BORROWING
Bank of America, N.A.,
as Agent for the Lenders
One Independence Center, 00xx Xxxxx
XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Agency Services/Xxxxxxx Xxxxx
Ladies and Gentlemen:
The undersigned, PERSONNEL GROUP OF AMERICA, INC. (the "Borrower"),
refers to the Amended and Restated Credit Agreement dated as of June 23, 1997
(as amended, modified, extended or restated from time to time, the "Credit
Agreement"), among the Borrower, the Lenders and Bank of America, N.A., as
Agent. Capitalized terms used herein and not otherwise defined herein shall have
the meanings assigned to such terms in the Credit Agreement. The Borrower hereby
gives notice that it requests a Loan advance in accordance with the provisions
of Section 2.1 of the Credit Agreement and in connection therewith sets forth
below the terms on which such Loan advance is requested to be made:
(A) Date of Borrowing
(which is a Business Day)
--------------------------
(B) Principal Amount of
Borrowing
--------------------------
In accordance with the requirements of Section 5.2, the Borrower hereby
reaffirms the representations and warranties set forth in the Credit Agreement
as provided in subsection (ii) of such Section, and confirms that the matters
referenced in subsections (iii), (iv) and (v) of such Section, are true and
correct.
Very truly yours,
PERSONNEL GROUP OF AMERICA, INC.
By:
--------------------------------------
Title:
-----------------------------------
SCHEDULE 2.1(e)
FORM OF
AMENDED, RESTATED AND SUBSTITUTED NOTE
$ June 23, 1997
--------------------
FOR VALUE RECEIVED, PERSONNEL GROUP OF AMERICA, INC., a Delaware
corporation (the "Borrower"), hereby promises to pay to the order of ,
its successors and assigns (the "Lender"), at the office of Bank of America,
N.A., as Agent (the "Agent"), at 000 X. Xxxxx Xxxxxx, Xxxxxxxxxxxx Center,
NC1-001-15-04, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000 (or at such other place or places
as the holder hereof may designate), at the times set forth in the Credit
Agreement dated as of the date hereof among the Borrower, the Lenders and the
Agent (as it may be amended, modified, extended or restated from time to time,
the "Credit Agreement"; all capitalized terms not otherwise defined herein shall
have the meanings set forth in the Credit Agreement), but in no event later than
the Termination Date, in Dollars and in immediately available funds, the
principal amount of DOLLARS ($ ) or, if less than such principal
amount, the aggregate unpaid principal amount of all Loans made by the Lender to
the Borrower pursuant to the Credit Agreement, and to pay interest from the date
hereof on the unpaid principal amount hereof, in like money, at said office, on
the dates and at the rates selected in accordance with Section 2.1 (d) of the
Credit Agreement.
Upon the occurrence and during the continuance of an Event of Default,
the balance outstanding hereunder shall bear interest as provided in Section 3.1
of the Credit Agreement. Further, in the event the payment of all sums due
hereunder is accelerated under the terms of the Credit Agreement, this Note, and
all other indebtedness of the Borrower to the Lender shall become immediately
due and payable, without presentment, demand, protest or notice of any kind, all
of which are hereby waived by the Borrower.
In the event this Note is not paid when due at any stated or
accelerated maturity, the Borrower agrees to pay, in addition to the principal
and interest, all costs of collection, including reasonable attorneys' fees.
All borrowings evidenced by this Note and all payments and prepayments
of the principal hereof and interest hereon and the respective dates thereof
shall be endorsed by the holder hereof on Schedule A attached hereto and
incorporated herein by reference, or on a continuation thereof which shall be
attached hereto and made a part hereof; provided, however, that any failure to
endorse such information on such schedule or continuation thereof shall not in
any manner affect the obligation of the Borrower to make payments of principal
and interest in accordance with the terms of this Note.
This Note is an amendment to, and is in substitution and replacement
of, that certain Note dated as of December 18, 1996 executed by the Borrower in
favor of the Lender (the "Replaced Note"). This Note represents that same
indebtedness represented by the Replaced Note.
This Note and the Loans evidenced hereby may be transferred in whole
or in part only by registration of such transfer on the Register maintained by
or on behalf of the Borrower as provided in Section 11.3(c) of the Credit
Agreement.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly
executed by its duly authorized officer as of the day and year first above
written.
PERSONNEL GROUP OF AMERICA, INC.
BY
-------------------------------
Title
----------------------------
SCHEDULE A TO THE
AMENDED, RESTATED AND SUBSTITUTED NOTE
OF PERSONNEL GROUP OF AMERICA, INC.
DATED JUNE 23, 1997
Unpaid Name of
Type Principal Person
of Interest Payments Balance Making
Date Loan Period Principal Interest of Note Notation
---- ---- -------- --------- -------- ------- --------
SCHEDULE 6.4
REQUIRED CONSENTS, AUTHORIZATIONS, NOTICES AND FILINGS
NONE.
SCHEDULE 6.9
INTELLECTUAL PROPERTY
Domestic Entity Xxxx Registration
--------------- ---- ------------
Personnel Group of America, COMMAND TECHNOLOGIES U.S. Service Xxxx Reg. #2,130,528
Inc. (not in use)
FIRSTWORD STAFFING SERVICES U.S. Service Xxxx Application Serial #75/816,918
NETPLUS U.S. Service Xxxx Application Serial
#75/807,057 Filed 9/23/99
PGA NETPLUS (not in use) U.S. Service Xxxx Application Serial
#75/808,464 Filed 9/23/99
XXXXXX STAFFING and Design U.S. Service Xxxx Reg. #2,028,458
TT and Design U.S. Service Xxxx Reg. #1,217,781
XXXXXX CAREERS and Design U.S. Service Xxxx Reg. #1,427,739
XXXXXX TEMPORARIES GIVING BUSINESSES A
HAND and Design U.S. Service Xxxx Reg. #1,427,740
XXXXXX SERVICES and Design U.S. Service Xxxx Reg. #1,447,857
XXXXXX STAFFING U.S. Service Xxxx Reg. #2,028,456
A PARTNERSHIP THAT WORKS and Design
VENTURI U.S. Service Xxxx Application Serial
No. 76/285,649; Filed July 16, 2001
STYLEMATCHER U.S. Service Xxxx Application Filed
January 11, 2002
StaffPLUS, Inc. ABAR California Service Xxxx Reg.
Domestic Entity Xxxx Registration
--------------- ---- ------------
#36570
CAREERWORLD (stylized) U.S. Service Xxxx Reg. #1,876,833
CAREERWORLD U.S. Service Xxxx Reg. #1,813,975
COMMAND (not in use) U.S. Service Xxxx Application
Serial #76/109,960
Filed 8/15/00
XXXXXX XXX U.S. Service Xxxx Reg. #2076974
XXXXXX XXX U.S. Service Xxxx Reg. #2068781
TRAINING FOR GROWTH
PERFORMANCEPLUS U.S. Service Xxxx Application
Serial #75/221,098
Filed 1/3/97
QUESTPLUS U.S. Service Xxxx Reg. #1,797,268
PROFICIENCYPLUS U.S. Service Xxxx Reg. #1,798,101
STAFFINDERS PERSONNEL U.S. Service Xxxx Reg. #1,537,626
(not in use)
STAFFINDERS (stylized) (not in use) U.S. Service Xxxx Reg. #1,537,625
TEMP CONNECTION LTD. U.S. Service Xxxx Reg. #1,775,418
and Design
TEMP CONNECTION U.S. Service Xxxx Reg. #1,757,129
TEMP CONNECTION U.S. Service Xxxx Reg. #1,472,585
TEMPWORLD U.S. Trademark Reg. #1,544,789
WEST PERSONNEL SERVICE Illinois Service Xxxx Reg. #065298
WPPS (not in use) U.S. Service Xxxx Reg. #1,610,755
Domestic Entity Xxxx Registration
--------------- ---- ------------
WPPS and Design (not in use) U.S. Service Xxxx Reg. #1,743,495
CREATIVE CORPORATE North Carolina Service Xxxx
STAFFING w/Slogan and Design Reg. #T-14934
South Carolina Service Xxxx
Reg. issued 7/2/98
CREATIVE CORPORATE South Carolina Service Xxxx
STAFFING Reg. issued 7/2/98
InfoTech Services, Inc. BEST U.S. Service Xxxx Application
Serial #75/608,886
Filed 12/18/98
CRG (not in use) U.S. Trademark Reg. #1,393,506
Logiciel Consulting U.S. Service Xxxx Application
Serial #75/002920
Filed 10/10/95
Shar-Ex (not in use) U.S. Service Xxxx Reg.
#1987601
(dated 7/16/96)
Trilogy U.S. Service Xxxx Reg.
#1,918,301
(dated 9/12/95)
SCHEDULE 6.11
TAXES
1. Approximately $550,000 of San Francisco city payroll taxes to be paid
over time pursuant to a settlement with the city.
SCHEDULE 6.14
SUBSIDIARIES
State of Classes # Shares %
Entity Incorporation of Stock Outstanding Ownership
------ ------------- -------- ----------- ---------
Personnel Group of America, Inc. Delaware Common N/A Public
PGA SUBSIDIARIES:
PFI Corp. Delaware Common 1,000 100%
XxxxxxXxxx.xxx, Inc. Florida Common 1,000 100%
PFI CORP. SUBSIDIARIES:
InfoTech Services, Inc. North Carolina Common 100 100%
StaffPLUS, Inc. Delaware Common 1,000 100%
INFOTECH SUBSIDIARIES:
Advanced Business Consultants, Inc. Kansas Common 99,997 100%
BAL Associates Incorporated California Common 14,285 100%
STAFFPLUS, INC. SUBSIDIARY:
Venturi Staffing Partners, LLC California N/A N/A 100%
Schedule 7.1(c)(i)
FORM OF OFFICER'S COMPLIANCE CERTIFICATE
For the fiscal period ended ____________________, 200___.
I, ______________________, [Title] of Personnel Group of America, Inc.
(the "Borrower") hereby certify that, to the best of my knowledge and belief,
with respect to that certain Amended and Restated Credit Agreement dated as of
June 23, 1997 (as amended, modified, extended or restated from time to time, the
"Credit Agreement"; all of the defined terms in the Credit Agreement are
incorporated herein by reference) among the Borrower, the other Credit Parties
party thereto, the Lenders party thereto and Bank of America, N.A., as Agent:
a. The company-prepared financial statements which accompany this
certificate are true and correct in all material respects and
have been prepared in accordance with GAAP applied on a
consistent basis, subject to changes resulting from normal
quarterly and year-end adjustments and the absence of
footnotes.
b. Since _____________ (the date of the last similar
certification, or, if none, the Closing Date) no Default or
Event of Default has occurred under the Credit Agreement.
Delivered herewith are detailed calculations demonstrating compliance by the
Credit Parties with the financial covenants contained in Section 7.11 of the
Credit Agreement as of the end of the fiscal period referred to above.
This ___________ day of ________________ , 200__.
PERSONNEL GROUP OF AMERICA, INC.
Name:
--------------------------------
Title:
------------------------------
Attachment to Officer's Certificate
COMPUTATION OF FINANCIAL COVENANTS
SCHEDULE 7.1(c)(ii)
FORM OF OFFICER'S COMPLIANCE CERTIFICATE
I, _____________, [Title] of Personnel Group of America, Inc. (the
"Borrower") hereby certify that, to the best of my knowledge and belief, with
respect to that certain Amended and Restated Credit Agreement dated as of June
23, 1997 (as amended, modified, extended or restated from time to time, the
"Credit Agreement"; all of the defined terms in the Credit Agreement are
incorporated herein by reference) among the Borrower, the other Credit Parties
party thereto, the Lenders party thereto and Bank of America, N.A., as Agent:
a. After giving effect on a Pro Forma Basis to _____________
[describe the Pro Forma Transaction], no Default or Event of
Default would exist under the Credit Agreement.
Delivered herewith are detailed calculations on a Pro Forma Basis demonstrating
compliance by the Credit Parties with the financial covenants contained in
Section 7.11 of the Credit Agreement.
This ______ day of __________, 200_.
PERSONNEL GROUP OF AMERICA, INC.
Name:
---------------------------
Title:
--------------------------
Attachment to Officer's Certificate
COMPUTATION OF FINANCIAL COVENANTS ON A PRO FORMA BASIS
SCHEDULE 7.1(k)
FORM OF BORROWING BASE CERTIFICATE
[BANK OF AMERICA LOGO] BORROWING BASE CERTIFICATE
--------------------------------------------------------------------------------
Status as of, _______________ 20__
I, ___________, [Title] of Personnel Group of America, Inc. (the
"Borrower") hereby certify in my capacity as _____________ of the Borrower to
the accuracy of the following Borrowing Base Certificate pursuant to that
certain Amended and Restated Credit Agreement dated as of June 23, 1997 (as
amended, modified, restated or supplemented from time to time, the "Credit
Agreement"; all of the defined terms in the Credit Agreement are incorporated
herein by reference) among the Borrower, the Guarantors, the Lenders and Bank of
America, N. A., as Agent (all amounts are in thousands of dollars):
ACCOUNTS RECEIVABLE
1. Total IT Accounts Receivable $
2. Less ineligible accounts receivable (as set forth in the Loan
Agreement) $
3. Total Commercial Accounts Receivable $
4. Less ineligible accounts receivable (as set forth in the Loan
Agreement) $
5. Total Eligible Accounts Receivable
(line 1 - line 2 + line 3 - line 4) $
6. 85% of Eligible Accounts Receivable $
7. Applicable Overadvance Amount $
8. Outstanding balance of Revolving Loans (including Swing Line Loans and
LOC Obligations) $
9. Available for further advances (Line 6 + Line 7 - Line 8). If Line 8
exceeds the sum of Lines 6 and 7, then payment for the excess is due
immediately and accompanies this report. $
Personnel Group of America, Inc.
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
SCHEDULE 7.12
FORM OF JOINDER AGREEMENT
THIS JOINDER AGREEMENT (the "Agreement"), dated as of _______________,
200_, is by and between _____________, a _______________ (the "Subsidiary"), and
BANK OF AMERICA, N.A., in its capacity as Agent under that certain Amended and
Restated Credit Agreement (as it may be amended, modified, extended or restated
from time to time, the "Credit Agreement"), dated as of June 23, 1997, by and
among Personnel Group of America, Inc., a Delaware corporation (the "Borrower"),
the other Credit Parties party thereto, the Lenders party thereto and Bank of
America, N.A., as Agent. All of the defined terms in the Credit Agreement are
incorporated herein by reference.
The Subsidiary is an Additional Credit Party, and, consequently, the
Credit Parties are required by Section 7.12 of the Credit Agreement to cause the
Subsidiary to become a "Guarantor".
Accordingly, the Subsidiary hereby agrees as follows with the Agent,
for the benefit of the Lenders:
1. The Subsidiary hereby acknowledges, agrees and confirms that,
by its execution of this Agreement, the Subsidiary will be deemed to be a party
to the Credit Agreement and a "Guarantor" for all purposes of the Credit
Agreement, and shall have all of the obligations of a Guarantor thereunder as if
it had executed the Credit Agreement. The Subsidiary hereby ratifies, as of the
date hereof, and agrees to be bound by, all of the terms, provisions and
conditions applicable to the Guarantors contained in the Credit Agreement.
Without limiting the generality of the foregoing terms of this paragraph 1, the
Subsidiary hereby jointly and severally together with the other Guarantors,
guarantees to each Lender and the Agent, as provided in Section 4 of the Credit
Agreement, the prompt payment and performance of the Borrower's Obligations in
full when due (whether at stated maturity, as a mandatory prepayment, by
acceleration or otherwise) strictly in accordance with the terms thereof.
2. The Subsidiary hereby acknowledges, agrees and confirms that,
by its execution of this Agreement, the Subsidiary will be deemed to be a party
to that certain Amended and Restated Pledge Agreement (as it may be amended,
modified, restated or supplemented from time to time, the "Amended and Restated
Pledge Agreement"), dated as of June 23, 1997, by and among the Borrower, the
other Pledgors party thereto and Bank of America, N.A., formerly NationsBank,
N.A., as agent (in such capacity, the "Agent"), and that certain Security
Agreement (as it may be amended, modified, restated or supplemented from time to
time, the "Security Agreement"), dated as of March 21, 2001 by and among the
Borrower, the other Obligors party thereto, and Bank of America, N.A., in its
capacity as collateral agent (in such capacity, the "Agent") and shall have all
obligations of a "Pledgor" or "Obligor", respectively, thereunder as if it had
executed the Amended and Restated Pledge Agreement and the Security Agreement,
respectively. The Subsidiary hereby ratifies, as of the date hereof, and agrees
to be bound by, all the terms, provisions and conditions contained in the
Amended and Restated Pledge Agreement and the Security Agreement. Without
limiting the generality of the foregoing terms of this paragraph 2, (i) the
Subsidiary hereby pledges and assigns to the Agent, for the benefit of the
Lenders, and grants to the Agent, for the benefit of the Lenders, a continuing
security interest in any and all right, title and interest of the Subsidiary in
and to the Pledged Shares (as such term in defined in Section 2 of the Amended
and Restated Pledge Agreement), such pledge, assignment and grant of a security
interest to be effective as provided in the Amended and Restated Pledge
Agreement and (ii) the Subsidiary hereby pledges, assigns and grants to the
Agent, for the benefit of the Lenders, a continuing security interest in, and a
right to set off against, any and all right, title and interest of such Obligor
in and to the Collateral (as such term in defined in Section 2 of the Security
Agreement), such pledge, assignment and grant of security interest to be
effective as provided in the Security Agreement.
3. The address of the Subsidiary for purposes of all notices and
other communications is _______________, _______________, Attention of
_______________ (Facsimile No. _______________).
4. The Subsidiary hereby waives acceptance by the Agent and the
Lenders of the guaranty by the Subsidiary under Section 4 of the Credit
Agreement upon the execution of this Agreement by the Subsidiary.
5. 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.
6. 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 Subsidiary has caused this Joinder Agreement to
be duly executed by its authorized officers, and the Agent, for the benefit of
the Lenders, has caused the same to be accepted by its authorized officer, as of
the day and year first above written.
[SUBSIDIARY]
By
-----------------------------
Title
--------------------------
Acknowledged and accepted:
BANK OF AMERICA, N.A., as Agent
By
-----------------------------
Title
--------------------------
SCHEDULE 7.18
FORM OF BANK AGENCY AGREEMENT
[DATE]
[BANK]
[ADDRESS]
Re: PERSONNEL GROUP OF AMERICA, INC.
Gentlemen/Ladies:
Reference is made herein to (i) that certain Amended and Restated
Credit Agreement dated as of June 23, 1997 (as it may be amended, modified,
restated or supplemented from time to time, the "Credit Agreement") by and among
Personnel Group of America, Inc. (the "Borrower"), certain subsidiaries of the
Borrower from time to time party thereto (the "Guarantors" and, together with
the Borrower, the "Credit Parties"), the financial institutions from time to
time party thereto (the "Lenders") and Bank of America, N.A., formerly known as
NationsBank, N.A., as agent for the Lenders (in such capacity, the "Agent") and
(ii) that certain Security Agreement dated as of March 21, 2001 (as it may be
amended, modified, restated or supplemented from time to time, the "Security
Agreement") by and among the Borrower, the other Obligors party thereto, and
Bank of America, N.A., in its capacity as collateral agent (in such capacity,
the "Collateral Agent"). Pursuant to the terms of the Security Agreement, the
Credit Parties have granted to the Collateral Agent, for the benefit of the
Lenders, liens and security interests in substantially all of their personal and
intangible property. Capitalized terms used without other definition herein
shall have the meanings specified in the Credit Agreement or under the Uniform
Commercial Code as enacted in the State of North Carolina and any successor
statute(s) thereto (the "Code"), as applicable. If a term shall be defined
differently in the Credit Agreement and the Code, the definition in the Credit
Agreement shall govern for purposes hereof.
In connection with the Credit Agreement, the Lenders have required,
among other things, the Credit Parties to execute this Bank Agency Agreement.
This letter agreement (the "Agreement") among __________ (the "Bank"),
the Credit Parties and the Collateral Agent shall serve as instructions
regarding the operation and procedures for all bank accounts now or hereafter
maintained at the Bank by, or for the deposit, credit or custody of property of,
the Credit Parties or any of them, other than payroll, withholding tax and other
fiduciary accounts.
1. ACCOUNT IDENTIFICATION. The following accounts have
been established at the Bank on behalf of one or more of the Credit Parties:
ABA #[__________].
This Agreement applies to such accounts and to each other account hereafter
established at the Bank on behalf of the Credit Parties, other than payroll,
withholding tax and other fiduciary accounts (collectively, the "Accounts")
(provided, that the Bank will use its reasonable best efforts to deliver written
notice thereof to the Agent of the establishment of any other such accounts
within thirty (30) days of the establishment of any such accounts).
2. SECURITY INTEREST; AGENCY. The Credit Parties have granted to
the Collateral Agent a continuing lien upon, and security interest in, the
Accounts and all funds, items, instruments, investments, securities and other
things of value at any time paid, deposited, credited or held in or in transit
to any Account. The Collateral Agent hereby appoints the Bank as agent for the
Collateral Agent and pledgee-in-possession for the Accounts, and all of the
funds of the Credit Parties and such other items, instruments, investments,
securities, things of value, property and proceeds; and the Bank by its
execution and delivery of this Agreement hereby accepts such appointment and
agrees to be bound by the terms of this Agreement. Subject to the terms of
Section 3 hereof, each Credit Party hereby agrees to such appointment of the
Bank as agent for the Collateral Agent and further agrees that the Bank, on
behalf of the Collateral Agent, shall be entitled, upon the instructions of the
Collateral Agent, to exercise any and all rights that the Collateral Agent may
have under the Security Agreement. Subject to Section 3 hereof and after the
Bank's receipt of any notice from the Collateral Agent of the occurrence of any
Event of Default (unless and until the Bank shall have received notice from the
Collateral Agent that such Event of Default has been waived by the Lenders or
cured to the satisfaction of the Lenders), the Bank agrees to comply with all
instructions as shall from time to time be specified in writing by the
Collateral Agent directing disposition of the funds and property in the Accounts
to enable the Collateral Agent to exercise its rights and remedies with respect
to the lien and security interest described in this Section 2 without further
consent of the Credit Parties.
3. ACCESS TO ACCOUNTS.
(a) At all times other than the times referred to in clause
(b) below, the parties hereto agree that the Bank shall follow the
instructions of the applicable Credit Party as to the holding,
investment and transfer of all collected amounts from time to time on
deposit in any Account of such Credit Party, including, without
limitation, instructions by such Credit Party to transfer such amounts
to such Credit Party or to any person or account designated by such
Credit Party.
(b) At all times after the Bank's receipt of any notice from
the Collateral Agent of the occurrence of any Event of Default (unless
and until the Bank shall have received notice from the Collateral Agent
that such Event of Default has been waived by the Lenders or cured to
the satisfaction of the Lenders), the parties hereto hereby agree that
the Bank shall follow the instructions of the Collateral Agent as to
the holding, investment and transfer of all collected amounts from time
to time on deposit in any Account, including without limitation
instructions by the Collateral Agent to transfer such amounts to the
Collateral Agent or to any other person or account designated by the
Collateral Agent. In addition, each Credit Party agrees that the Bank
may act as agent for the Collateral Agent in exercising as to any funds
or items from time to time on deposit in any of the Accounts any rights
of setoff provided by applicable law or by any Credit Document or
Collateral Document. Each Credit Party agrees that the Bank shall be
entitled to rely, without independent investigation, on any statement
of the Collateral Agent to the effect that an Event of Default has
occurred and is continuing or to the effect that any exercise of setoff
requested by the Agent is permitted under applicable law or any Credit
Document or Collateral Document.
4. INFORMATION. The Bank shall provide the Collateral Agent with
such information with respect to the Accounts as the Collateral Agent may from
time to time reasonably request, and each Credit Party hereby consents to such
information being provided to the Collateral Agent.
5. EXCULPATION. The Bank undertakes to perform only such duties
as are expressly set forth herein. Notwithstanding any other provisions of this
Agreement, the parties hereto agree that the Bank shall not be liable for any
action taken by it or any of its directors, officers, agents or employees in
accordance with this Agreement, including, without limitation, any action so
taken at the request of the
2
Collateral Agent, except for the Bank's or such person's own gross negligence or
willful misconduct. In no event shall the Bank be liable for losses or delays
resulting from causes beyond the Bank's reasonable control or for indirect,
special or consequential damages.
6. IRREVOCABLE AGREEMENT. Each Credit Party acknowledges that the
agreements made by it and the authorizations granted by it herein are
irrevocable and that the authorizations granted in Section 2 and Section 3 are
powers coupled with an interest.
7. SETOFF. Bank agrees not to exercise or claim any right of
offset, right of recoupment, security interest, banker's lien or other right
against the Accounts for so long as this Agreement is in effect except as
provided herein with respect to (a) returned or charged-back items, (b)
reversals or cancellations of payment orders and other electronic fund
transfers, (c) overdrafts resulting from adjustments or corrections of previous
credits or other postings or (d) Bank's charges, fees and expenses with respect
to the Accounts or the services provided in connection therewith or hereunder.
8. MISCELLANEOUS. This Agreement shall supersede any other
agreement (to the extent conflicting herewith) relating to the matters referred
to herein, including, without limitation, any other account agreement between
the Credit Parties and the Bank. This Agreement is binding upon the parties
hereto and their respective successors and assigns, and shall inure to their
benefit. The Lenders, the Administrative Agent and the Collateral Agent are the
current holders of all indebtedness secured by the security interest granted
under the Security Agreement, and the Collateral Agent (on behalf of the
Lenders) holds the lien referred to in Section 2 hereof. The Lenders may in the
future transfer, assign, or sell all or part of such indebtedness and, thus, the
Collateral Agent acts herein as agent for the Lenders and any future holders of
such indebtedness. Neither this Agreement nor any provision hereof may be
changed, amended, modified or waived orally, but only by an instrument in
writing signed by the parties hereto. Any provision of this Agreement that may
prove unenforceable under any applicable law or regulation shall not affect the
validity of any other provision hereof.
THIS AGREEMENT SHALL BE GOVERNED BY, AND INTERPRETED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NORTH CAROLINA WITHOUT REFERENCE TO ITS PRINCIPLES OF
CONFLICTS OF LAW.
This Agreement may be executed in any number of counterparts which together
shall constitute one and the same instrument.
9. TERMINATION. This Agreement shall remain in full force and
effect until such time as the Collateral Agent shall deliver written notice to
the Bank as to the termination of this Agreement. All rights of the Bank under
Section 5 for the period prior to any such termination shall survive such
termination. The Collateral Agent shall notify the Bank promptly in writing upon
payment in full of the Borrower's obligations that are secured by the Accounts
and this Agreement shall automatically terminate upon receipt of such notice.
10. NOTICES. All notices, requests or other communications given
to the Credit Parties, the Collateral Agent or the Bank shall be given in
writing (including telex, facsimile transmission or similar writing), at the
address specified below:
3
If to the Collateral Agent: Bank of America, N.A.
000 Xxxxx Xxxxx Xxxxxx
Bank of America Corporate Center, 22nd Floor
NC 1-007-22-26
Xxxxxxxxx, XX 00000
Attn: H. Xxxxxxx Xxxxxx
Phone No.: (000) 000-0000
Fax No.: (000) 000-0000
If to the Bank: [Bank]
[Address]
If to the Credit Parties: Personnel Group of America, Inc.
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxx, Chief Financial Officer
Phone No.: (000) 000-0000
Fax No.: (000) 000-0000
Any party may change its address for notices hereunder by notice to each other
party hereunder. Each notice, request or other communication shall be effective
(a) if given by telex, when such telex is transmitted and the appropriate
answerback is received, (b) if given by mail (registered or certified), five (5)
days after such communication is deposited in the mails with registered first
class postage prepaid, addressed as aforesaid or (c) if given by any other
means, when delivered at the address specified in this Section.
[Remainder of this page intentionally left blank.]
4
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed under seal as of the date first above written by their duly authorized
officers.
BORROWER: PERSONNEL GROUP OF AMERICA, INC.,
a Delaware corporation
By:
-----------------------------------------
Name: Xxxxx X. Xxxx
Title: President and
Chief Financial Officer
GUARANTORS: STAFFPLUS, INC.,
a Delaware corporation
INFOTECH SERVICES, INC.,
a North Carolina corporation
BAL ASSOCIATES INCORPORATED,
a California corporation
ADVANCED BUSINESS CONSULTANTS, INC.,
a Kansas corporation
XXXXXXXXXX.XXX, INC.,
a Florida corporation
VENTURI STAFFING PARTNERS, LLC,
a California limited liability company
By:
-----------------------------------------
Name: Xxxxx X. Xxxx
Title: Senior Vice President of each of
the above-named Guarantors
PFI CORP.,
a Delaware corporation
By:
-----------------------------------------
Name: Xxxxx X. Xxxx
Title: President
COLLATERAL AGENT: BANK OF AMERICA, N.A.,
as Collateral Agent
By:
-----------------------------------------
Name: H. Xxxxxxx Xxxxxx
Title: Managing Director
ACCEPTED AND AGREED TO as of
this _____ day of __________, 2002.
[BANK], as Bank
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
SCHEDULE 8.1
INDEBTEDNESS
1. Approximately $550,000 of San Francisco city payroll taxes to be paid
over time pursuant to settlement with the city
2. $661,946 of deferred insurance premiums; monthly payments of $82,743
ending in September 2002
3. $220,000 of Peoplesoft license fees for version 8 upgrade; quarterly
payments of $55,000 ending in April 2003
SCHEDULE 11.3(b)
FORM OF ASSIGNMENT AND ACCEPTANCE
This Assignment and Acceptance Agreement (this "Assignment") is dated
as of the Effective Date set forth below and is entered into by and between
[Insert name of Assignor] (the "Assignor") and [Insert name of Assignee] (the
"Assignee"). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (the "Credit
Agreement"), receipt of a copy of which is hereby acknowledged by the Assignee.
The Standard Terms and Conditions set forth in Annex 1 attached hereto are
hereby agreed to and incorporated herein by reference and made a part of this
Assignment as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and
assigns to the Assignee, and the Assignee hereby irrevocably purchases and
assumes from the Assignor, subject to and in accordance with the Standard Terms
and Conditions and the Credit Agreement, as of the Effective Date inserted by
the Agent as contemplated below, the interest in and to all of the Assignor's
rights and obligations under the Credit Agreement and any other documents or
instruments delivered pursuant thereto that represents the amount and percentage
interest identified below of all of the Assignor's outstanding rights and
obligations under the respective facilities identified below (including, to the
extent included in any such facilities, Letters of Credit) (the "Assigned
Interest"). Such sale and assignment is without recourse to the Assignor and,
except as expressly provided in this Assignment, without representation or
warranty by the Assignor.
1. Assignor:
2. Assignee: _______________________________[, which is an Affiliate(1)]
3. Borrower(s): Personnel Group of America, Inc.
4. Agent: Bank of America, N.A., as the agent under the Credit Agreement
5. Credit Agreement: The Amended and Restated Credit Agreement, dated as of June 23, 1997
(as amended by Amendment No. 1 to Amended and Restated Credit
Agreement dated as of March 17, 1998, Amendment No. 2 to Amended
and Restated Credit Agreement dated as of September 29, 1999,
Amendment No. 3 to Amended and Restated Credit Agreement dated as
of March 21, 2001 and Amendment No. 4 to Amended and Restated
Credit Agreement dated as of February 8, 2002 among PERSONNEL
GROUP OF AMERICA, INC., the other Credit Parties party thereto, the
Lenders from time to time party thereto and Bank of America, N.A., as
Agent.
---------------
(1) SELECT AS APPLICABLE.
1
6. Assigned Interest:
----------------------------------------------------------------------------------------------------------------------
Aggregate
Amount of Amount of Percentage
Credit Commitment/Loans Commitment/Loans Assigned of
Facility Assigned for all Lenders Assigned Commitment/Loans(2)
----------------------------------------------------------------------------------------------------------------------
(3) $ $ %
----------------------------------------------------------------------------------------------------------------------
$ $ %
----------------------------------------------------------------------------------------------------------------------
$ $ %
----------------------------------------------------------------------------------------------------------------------
Effective Date: _______________, 20__ [TO BE INSERTED BY AGENT AND WHICH SHALL
BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]
---------------
(2) Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans
of all Lenders thereunder.
(3) Fill in the appropriate terminology for the types of facilities under the
Credit Agreement that are being assigned under this Assignment (e.g. "Revolving
Facility Commitment", etc.).
2
The terms set forth in this Assignment are hereby agreed to:
ASSIGNOR
[NAME OF ASSIGNOR]
By:
------------------------------
Title:
ASSIGNEE
[NAME OF ASSIGNEE]
By:
------------------------------
Title:
[Consented to and](4) Accepted:
BANK OF AMERICA, N.A., as Agent
By:
-----------------------------------
Title:
[Consented to:](5)
PERSONNEL GROUP OF AMERICA, INC.,
a Delaware corporation
By:
-----------------------------------
Title:
(4) To be added only if the consent of the Agent is required by the terms of the
Credit Agreement.
(5) To be added only if the consent of the Borrower and/or other
parties (e.g. Issuing Lender) is required by the terms of the Credit Agreement.
3
ANNEX 1 TO ASSIGNMENT AND ACCEPTANCE AGREEMENT
AMENDED AND RESTATED CREDIT AGREEMENT DATED AS OF JUNE 23, 1997 IN FAVOR OF
PERSONNEL GROUP OF AMERICA, INC.
STANDARD TERMS AND CONDITIONS FOR ASSIGNMENT
AND ACCEPTANCE AGREEMENT
1. Representations and Warranties.
1.1. Assignor. The Assignor (a) represents and warrants that (i) it
is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned
Interest is free and clear of any lien, encumbrance or other adverse claim and
(iii) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and to consummate the transactions
contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with any Loan
Document, (ii) the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Agreement or any other instrument or document
delivered pursuant thereto, other than this Assignment (herein collectively the
"Loan Documents"), or any collateral thereunder, (iii) the financial condition
of the Borrower, any of its Subsidiaries or Affiliates or any other Person
obligated in respect of any Loan Document or (iv) the performance or observance
by the Borrower, any of its Subsidiaries or Affiliates or any other Person of
any of their respective obligations under any Loan Document.
1.2. Assignee. The Assignee (a) represents and warrants that (i) it
has full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and to consummate the transactions contemplated hereby
and to become a Lender under the Credit Agreement, (ii) it meets all
requirements of an Eligible Assignee under the Credit Agreement, (iii) from and
after the Effective Date, it shall be bound by the provisions of the Credit
Agreement and, to the extent of the Assigned Interest, shall have the
obligations of a Lender thereunder, (iv) it has received a copy of the Credit
Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 7.1 thereof, as applicable, and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and to purchase the Assigned
Interest on the basis of which it has made such analysis and decision, and (v)
if it is a foreign Lender, attached hereto is any documentation required to be
delivered by it pursuant to the terms of the Credit Agreement, duly completed
and executed by the Assignee; and (b) agrees that (i) it will, independently and
without reliance on the Agent, the Assignor or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Loan Documents, and (ii) it will perform in accordance with their terms all
of the obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender.
1.3 Assignee's Address for Notices, etc. Attached hereto as
Schedule 1 is all contact information, address, account and other administrative
information relating to the Assignee.
2. Payments. From and after the Effective Date, the Agent shall
make all payments in respect of the Assigned interest (including payments of
principal, interest, fees and other amounts) to the Assignee whether such
amounts have accrued prior to or on or after the Effective Date. The Assignor
and the Assignee shall make all appropriate adjustments in payments by the
Agent for periods prior to the Effective Date or with respect to the making of
this assignment directly between themselves.
3. General Provisions. This Assignment shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns. This Assignment may be executed in any number of counterparts, which
together shall constitute one instrument. Delivery of an executed
4
counterpart of a signature page of this Assignment by telecopy shall be
effective as delivery of a manually executed counterpart of this Assignment.
This Assignment shall be governed by, and construed in accordance with, the law
of the State of North Carolina.
5
SCHEDULE 1 TO ASSIGNMENT AND ACCEPTANCE AGREEMENT
ADMINISTRATIVE DETAILS
(Assignee to list names of credit contacts, addresses, phone and
facsimile numbers, electronic mail addresses and account and payment
information)
6
