EXHIBIT 10.1
EXECUTION COUNTERPART
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CREDIT AGREEMENT
dated as of September 26, 1997
among
TKC ACQUISITION CORP.,
TO BE MERGED WITH AND INTO
THE XXXXXXX COMPANY,
THE LENDERS LISTED HEREIN,
SUNTRUST BANK, ATLANTA,
as Agent
and
UNION BANK OF SWITZERLAND, NEW YORK BRANCH,
as Syndication Agent
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TABLE OF CONTENTS
PAGE
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ARTICLE I. DEFINITIONS; CONSTRUCTION............................ 2
Section 1.01. Definitions....................................... 2
Section 1.02. Accounting Terms and Determination................ 26
Section 1.03. Other Definitional Terms.......................... 26
Section 1.04. Exhibits and Schedules............................ 26
ARTICLE II. REVOLVING LOANS AND SWING RATE LOANS................ 26
Section 2.01. Revolving Loan Commitments; Use of Proceeds....... 26
Section 2.02. Swing Line Subcommitment.......................... 27
Section 2.03. Notes; Repayment of Principal; Extension of
Revolving Loan Commitments........................ 29
Section 2.04. Voluntary Reduction of Commitments................ 30
Section 2.05. L/C Subcommitment................................. 30
Section 2.06. Notice of Issuance of Letter of Credit;
Agreement to Issue................................ 31
Section 2.07. Payment of Amounts drawn under Letter of Credit... 31
Section 2.08. Payment by Lenders................................ 32
Section 2.09. Obligations Absolute.............................. 33
Section 2.10. Indemnification; Nature of Agent's Duties......... 33
ARTICLE III. GENERAL LOAN TERMS................................. 34
Section 3.01. Funding Notices................................... 34
Section 3.02. Disbursement of Funds............................. 36
Section 3.03. Interest.......................................... 37
Section 3.04. Interest Periods.................................. 38
Section 3.05. Fees.............................................. 39
Section 3.06. Voluntary Prepayments of Borrowings............... 39
Section 3.07. Payments, etc..................................... 40
Section 3.08. Interest Rate Not Ascertainable, etc.............. 42
Section 3.09. Illegality........................................ 42
Section 3.10. Increased Costs................................... 43
Section 3.11. Lending Offices................................... 44
Section 3.12. Funding Losses.................................... 45
Section 3.13. Assumptions Concerning Funding of Eurodollar
Advances.......................................... 45
Section 3.14. Apportionment of Payments......................... 45
Section 3.15. Sharing of Payments, Etc.......................... 45
Section 3.16. Capital Adequacy.................................. 46
Section 3.17. Limitation on Certain Payment Obligations
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PAGE
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ARTICLE IV. CONDITIONS TO BORROWINGS............................ 47
Section 4.01. Conditions Precedent to Initial Loans and
Letters of Credit................................. 47
Section 4.02. Conditions to Each Loan........................... 50
ARTICLE V. REPRESENTATIONS AND WARRANTIES....................... 51
Section 5.01. Corporate Existence; Compliance with Law.......... 51
Section 5.02. Corporate Power; Authorization.................... 52
Section 5.03. Enforceable Obligations........................... 52
Section 5.04. No Legal Bar...................................... 52
Section 5.05. No Material Litigation............................ 52
Section 5.06. Investment Company Act, Etc....................... 52
Section 5.07. Margin Regulations................................ 53
Section 5.08. Compliance With Environmental Laws................ 53
Section 5.09. Insurance......................................... 54
Section 5.10. No Default........................................ 54
Section 5.11. No Burdensome Restrictions........................ 54
Section 5.12. Taxes............................................. 54
Section 5.13. Subsidiaries...................................... 54
Section 5.14. Financial Statements.............................. 55
Section 5.15. ERISA............................................. 56
Section 5.16. Patents, Trademarks, Licenses, Etc................ 57
Section 5.17. Ownership of Property............................. 57
Section 5.18. Indebtedness...................................... 57
Section 5.19. Financial Condition............................... 58
Section 5.20. Labor Matters..................................... 58
Section 5.21. Payment or Dividend Restrictions.................. 58
Section 5.22. Ownership of Acquisition Sub and Borrower......... 59
Section 5.23. Acquisition....................................... 59
Section 5.24. Continuing Business of Target; Business of........ 59
Parent
Section 5.25. Consents to Acquisition........................... 60
Section 5.26. Disclosure........................................ 60
ARTICLE VI. AFFIRMATIVE COVENANTS............................... 60
Section 6.01. Corporate Existence, Etc.......................... 60
Section 6.02. Compliance with Laws, Etc......................... 60
Section 6.03. Payment of Taxes and Claims, Etc.................. 61
Section 6.04. Keeping of Books.................................. 61
Section 6.05. Visitation, Inspection, Etc....................... 61
Section 6.06. Insurance; Maintenance of Properties.............. 61
Section 6.07. Reporting Covenants............................... 61
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PAGE
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Section 6.08. Financial Covenants............................... 65
Section 6.09. Notices Under Certain Other Indebtedness.......... 67
Section 6.10. Additional Credit Parties and Collateral.......... 67
ARTICLE VII. NEGATIVE COVENANTS................................. 67
Section 7.01. Indebtedness...................................... 67
Section 7.02. Liens............................................. 68
Section 7.03. Mergers, Consolidations, Etc...................... 68
Section 7.04. Investments, Loans, Dividends, Etc................ 69
Section 7.05. Asset Sales....................................... 71
Section 7.06. Sale and Leaseback Transactions................... 72
Section 7.07. Transactions with Affiliates...................... 73
Section 7.08. Changes in Business............................... 73
Section 7.09. ERISA............................................. 73
Section 7.10. Limitation on Payment Restrictions Affecting
Borrower and its Subsidiaries..................... 73
Section 7.11. Actions Under Certain Documents................... 73
Section 7.12. Additional Negative Pledges....................... 74
Section 7.13. Changes in Fiscal Year............................ 74
Section 7.14. Issuance of Stock by Subsidiaries................. 74
ARTICLE VIII. EVENTS OF DEFAULT................................. 74
Section 8.01. Payments.......................................... 74
Section 8.02. Covenants Without Notice.......................... 75
Section 8.03. Other Covenants................................... 75
Section 8.04. Representations................................... 75
Section 8.05. Non-Payments of Other Indebtedness................ 75
Section 8.06. Defaults Under Other Agreements; Change In Control
Provisions........................................ 75
Section 8.07. Bankruptcy........................................ 75
Section 8.08. ERISA............................................. 76
Section 8.09. Judgments......................................... 77
Section 8.10. Ownership of Credit Parties....................... 77
Section 8.11. Chairman of the Board of Directors of Parent
and Borrower...................................... 77
Section 8.12. Change in Control................................. 77
Section 8.13. Default Under Other Credit Documents; Merger
Agreement......................................... 77
Section 8.14. Failure of Merger and other Elements of the
Transaction....................................... 77
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PAGE
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ARTICLE IX. THE AGENT............................................ 78
Section 9.01. Appointment of Agent.............................. 78
Section 9.02. Authorization of Agent with Respect to the
Security Documents................................ 78
Section 9.03. Nature of Duties of Agent......................... 79
Section 9.04. Lack of Reliance on the Agent..................... 79
Section 9.05. Certain Rights of the Agent....................... 79
Section 9.06. Reliance by Agent................................. 80
Section 9.07. Indemnification of Agent.......................... 80
Section 9.08. The Agent in its Individual Capacity.............. 80
Section 9.09. Holders of Notes.................................. 80
Section 9.10. Successor Agent................................... 81
ARTICLE X. MISCELLANEOUS......................................... 81
Section 10.01. Notices........................................... 81
Section 10.02. Amendments, Etc................................... 82
Section 10.03. No Waiver; Remedies Cumulative.................... 82
Section 10.04. Payment of Expenses, Etc.......................... 82
Section 10.05. Right of Setoff................................... 84
Section 10.06. Benefit of Agreement; Assignments;
Participations.................................... 84
Section 10.07. Governing Law; Submission to Jurisdiction......... 86
Section 10.08. Independent Nature of Lenders' Rights............. 87
Section 10.09. Counterparts...................................... 87
Section 10.10. Effectiveness; Termination of Commitments;
Survival.......................................... 88
Section 10.11. Severability...................................... 88
Section 10.12. Independence of Covenants......................... 88
Section 10.13. Change in Accounting Principles, Fiscal Year or
Tax Laws.......................................... 88
Section 10.14. Intent Not To Violate Usury Laws.................. 89
Section 10.15. Headings Descriptive; Entire Agreement............ 89
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EXHIBITS
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Exhibit A - Form of Revolving Note
Exhibit B - Form of Swing Line Note
Exhibit C-1 - Form of Parent Guaranty
Exhibit C-2 - Form of Subsidiary Guaranty
Exhibit D - Form of Contribution Agreement
Exhibit E - Form of Security Agreement
Exhibit F-1 - Form of Pledge and Security Agreement
Exhibit F-2 - Form of Parent Pledge and Security Agreement
Exhibit G - Form of Closing Certificate
Exhibit H-1 - Form of Borrower's Counsel Opinion
Exhibit H-2 - Form of Tennessee's Counsel Opinion
Exhibit I - Form of Compliance Certificate
Exhibit J - Form of Assignment and Acceptance Agreement
Exhibit K - Form of Trademark Security Agreement
SCHEDULES
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Schedule 4.01 - UCC Search Locations
Schedule 5.01 - Subsidiaries
Schedule 5.05 - Litigation
Schedule 5.08(a) - Environmental Claims
Schedule 5.08(b) - Environmental Notices
Schedule 5.10 - Defaults
Schedule 5.11 - Burdensome Restrictions
Schedule 5.12 - Taxes
Schedule 5.13 - Material Subsidiaries
Schedule 5.15 - Employee Benefit Matters
Schedule 5.16 - Patent, Trademark, License, and
Other Intellectual Property Matters
Schedule 5.17 - Ownership of Properties
Schedule 5.20 - Labor and Employment Matters
Schedule 5.21 - Dividend Restrictions
Schedule 7.01 - Existing Indebtedness
Schedule 7.02 - Existing Liens
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CREDIT AGREEMENT
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THIS CREDIT AGREEMENT made and entered into as of September 26, 1997,
by and among TKC ACQUISITION CORP., a Tennessee corporation (the "Acquisition
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Sub") to be merged with and into THE XXXXXXX COMPANY, a Tennessee corporation
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(the surviving corporation hereinafter referred to as the "Borrower"), SUNTRUST
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BANK, ATLANTA, a banking corporation organized under the laws of the State of
Georgia ("SunTrust"), the other banks and lending institutions listed on the
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signature pages hereof, and any assignees of SunTrust or such other banks and
lending institutions which become "Lenders" as provided herein (SunTrust, and
such other banks, lending institutions, and assignees referred to collectively
herein as the "Lenders"), SUNTRUST BANK, ATLANTA, in its capacity as agent for
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the Lenders and each successor agent for such Lenders as may be appointed from
time to time pursuant to Article IX hereof (the "Agent") and UNION BANK OF
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SWITZERLAND, NEW YORK BRANCH, in its capacity as syndication agent for such
Lenders (the "Syndication Agent");
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W I T N E S S E T H:
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WHEREAS, pursuant to the terms of that certain Agreement and Plan of
Merger, dated as of July 3, 1997 (the "Merger Agreement") by and among Port
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Royal Holdings, Inc., a Georgia corporation ("Parent"), the Acquisition Sub and
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The Xxxxxxx Company, a Tennessee corporation (the "Target"), the Parent and the
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Acquisition Sub have agreed to purchase the Target (the "Acquisition") for an
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aggregate cash purchase price of approximately $108,400,000 (the "Purchase
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Price");
WHEREAS, pursuant to the terms of the Merger Agreement, concurrently with
the consummation of the Acquisition and the Initial Advance hereunder, the
Acquisition Sub will merge with and into the Target (the "Merger") and the
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surviving corporation, the Borrower, shall be a wholly-owned subsidiary of the
Parent and the Borrower, by operation of law and pursuant to the terms of the
Merger Agreement, will assume all obligations of the Acquisition Sub hereunder;
WHEREAS, on the date hereof, in order to finance a portion of the Purchase
Price, the Acquisition Sub has entered into that certain Indenture, dated as of
September 26, 1997 (the "Senior Indenture") relating to those certain
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$100,000,000 in aggregate principal amount 10.25% Senior Notes, due 2007 (the
"Senior Notes") with SunTrust Bank, Atlanta, as trustee (the "Trustee") for the
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holders of the Senior Notes (the "Senior Noteholders") and has issued the Senior
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Notes thereunder;
WHEREAS, on the date hereof, in order to finance a portion of the Purchase
Price, the Parent shall make a $35,000,000 investment in the Acquisition Sub in
the form of the purchase of common equity of the Acquisition Sub;
WHEREAS, the Acquisition Sub has requested that the Lenders provide a
$25,000,000 senior secured revolving credit facility to the Borrower, the
proceeds of which shall be used initially, (i) to finance the remaining portion
of the Purchase Price, (ii) to pay certain costs and expenses incurred in
connection with the Merger, the issuance of the Senior Notes and the other
transactions described above, and (iii) to repay certain existing indebtedness
of the Target outstanding pursuant to that certain Credit Agreement, dated as of
April 22, 1997, among the Target, as Borrower, Transamerica Business Credit
Corporation and other parties thereto identified as "Lenders" therein, as
Lenders, and Transamerica Business Credit Corporation, as Agent (the "Existing
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Credit Agreement"), and thereafter, to fund the working capital and general
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corporate needs of the Borrower;
WHEREAS, at the request of the Acquisition Sub, the Lenders have agreed,
effective as of the Closing Date (as such term is defined below), to provide
certain credit facilities to the Borrower on the terms and subject to the
conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, Acquisition Sub (and upon the initial Advance
hereunder, the Borrower), the Lenders, the Agent and the Syndication Agent
agree, upon the terms and subject to the conditions set forth herein as follows:
ARTICLE I.
DEFINITIONS; CONSTRUCTION
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Section 1.01. Definitions. In addition to the other terms defined herein,
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the following terms used herein shall have the meanings herein specified (to be
equally applicable to both the singular and plural forms of the terms defined):
"Adjusted LIBO Rate" shall mean, with respect to each Interest Period
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for a Eurodollar Advance, the rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) determined pursuant to the following formula:
Adjusted LIBO Rate = LIBOR
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1.00 - LIBOR Reserve Percentage
As used herein, LIBOR Reserve Percentage shall mean, for any Interest Period for
a Eurodollar Advance, the reserve percentage (expressed as a decimal) equal to
the then stated maximum rate of all reserves requirements (including, without
limitation, any marginal, emergency, supplemental, special or other reserves)
applicable to any member bank of the Federal Reserve System in respect of
Eurocurrency liabilities as defined in Regulation D (or against any successor
category of liabilities as defined in Regulation D).
2
"Advance" shall mean any principal amount advanced and remaining
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outstanding at any time as (i) the Revolving Loans, which Advances shall be made
or outstanding as Base Rate Advances or Eurodollar Advances, as the case may be,
or (ii) a Swing Line Loan, which Advances shall be made or outstanding as Swing
Rate Advances.
"Affiliate" of any Person means any other Person directly or
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indirectly controlling, controlled by, or under common control with, such
Person, whether through the ownership of voting securities, by contract or
otherwise. For purposes of this definition, "control" (including with
correlative meanings, the terms "controlling", "controlled by", and "under
common control with") as applied to any Person, means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of that Person.
"Agent" shall mean SunTrust and any successor agent appointed pursuant
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to Section 9.10 hereto.
"Agreement" shall mean this Credit Agreement, as hereafter amended,
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restated, supplemented or otherwise modified from time to time.
"Applicable Commitment Fee Rate" shall mean, with respect to any
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calculation of the Commitment Fee hereunder, (i) through December 31, 1998, one
half of one percent (0.50%) per annum, and (ii) thereafter, the percentage per
annum determined by reference to the following chart set forth below based on
Borrower's Funded Debt Coverage Ratio calculated as of the relevant
determination date in accordance with Section 6.08(b):
Funded Debt Applicable Commitment
Coverage Ratio Fee Rate
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Less than or equal to 3.0:1.0 .20%
Greater than 3.0:1.0, but less than
or equal to 4.0:1.0 .30%
Greater than 4.0:1.0, but less than
or equal to 5.0:1.0 .40%
Greater than 5.0:1.0 .50%
Each change in the Applicable Commitment Fee Rate resulting from a change in the
Funded Debt Coverage Ratio shall be effective from and after the date that any
change in the Applicable Margin is effective. Notwithstanding the foregoing, at
any time during which Borrower has failed to deliver the financial statements
and certificates when required by Section 6.07(a), (b), and (c), as applicable,
the Applicable Commitment Fee Rate shall be .50%.
3
"Applicable Margin" shall mean, (i) with respect to all Eurodollar
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Advances outstanding through December 31, 1998, two and one-half of one percent
(2.50%) per annum, (ii) with respect to all Base Rate Advances outstanding
through December 31, 1998, one half of one percent (0.50%) per annum, and (iii)
with respect to all Advances outstanding thereafter, the relevant percentage
indicated below for the Borrower's Funded Debt Coverage Ratio, as determined
quarterly, based upon the financial statements delivered to the Lenders pursuant
to Section 6.07(a) or Section 6.07(b) hereof, as the case may be in accordance
with Section 6.08(b), with such Applicable Margin to be effective with respect
to calculations based upon the financial statements delivered pursuant to
Section 6.07 as of the first day of the second Fiscal Quarter immediately
following the Fiscal Quarter for which such financial statements are delivered
(for example, the Applicable Margin effective as of the first day of the third
Fiscal Quarter shall be calculated based upon the financial statements delivered
for the first Fiscal Quarter of the Borrower):
Funded Debt Applicable Margin Applicable Margin
Coverage Ratio for Eurodollar Advances for Base Rate Advances
-------------- ----------------------- ----------------------
Less than or equal to 3.0:1.0 1.00% 0%
Greater than 3.0:1.0, but less than
or equal to 4.0:1.0 1.75% 0%
Greater than 4.0:1.0, but less than
or equal to 5.0:1.0 2.25% 0.25%
Greater than 5.0:1.0 2.50% 0.50%
Notwithstanding the foregoing, at any time during which Borrower has failed to
deliver the financial statements and certificates when required by Section
6.07(a), (b), and (c), as applicable, the Applicable Margin with respect to
Eurodollar Advances then outstanding shall be 2.50% and the Applicable Margin
with respect to Base Rate Advances shall be 0.50%.
"Asset Sale" shall mean, with respect to any Person, the sale, lease,
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conveyance or other disposition, that does not constitute a Restricted Payment
or an Investment, by such Person of any of its assets (including, without
limitation by way of a Sale and Leaseback Transaction and including the
issuance, sale or transfer of any Equity Interests in any Subsidiary of the
Borrower) other than to the Borrower (including the receipt of proceeds of
insurance paid on account of the loss of or damage to any asset and awards of
compensation for any asset taken by condemnation, eminent domain or similar
proceeding, and including the receipt of proceeds of business interruption
insurance), in each case, in one or a series of related transactions; provided,
that notwithstanding the foregoing, the term "Asset Sale" shall not include:
4
(a) the sale, lease, conveyance, disposition or other transfer of all
or substantially all of the assets of the Borrower;
(b) the sale or lease of equipment, inventory, accounts receivable or
other assets in the ordinary course of business consistent with past
practice;
(c) a transfer of assets by the Borrower to a Wholly-Owned Subsidiary
of the Borrower or by a Wholly-Owned Subsidiary of the Borrower to the
Borrower or to another Wholly-Owned Subsidiary of the Borrower;
(d) an issuance of Equity Interests by a Wholly-Owned Subsidiary of
the Borrower to the Borrower or to another Wholly-Owned Subsidiary of the
Borrower;
(e) the issuance by the Borrower of shares of its Capital Stock; or
(f) the sale or other disposition of cash or Cash Equivalents.
"Assignment and Acceptance" shall mean an assignment and acceptance
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entered into by a Lender and an Eligible Assignee in accordance with the terms
of this Agreement and substantially in the form of Exhibit J.
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"Bankruptcy Code" shall mean The Bankruptcy Code of 1978, as amended
---------------
and in effect from time to time (11 U.S.C. (S)101 et seq.).
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"Base Rate" shall mean (with any change in the Base Rate to be
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effective as of the date of change of either of the following rates) the higher
of (i) the rate which the Agent publicly announces from time to time as its
prime lending rate, as in effect from time to time, and (ii) the Federal Funds
Rate, as in effect from time to time, plus one-half of one percent (0.50%) per
----
annum. The Agent's prime lending rate is a reference rate and does not
necessarily represent the lowest or best rate actually charged to customers; the
Agent may make commercial loans or other loans at rates of interest at, above or
below the Agent's prime lending rate.
"Base Rate Advance" shall mean an Advance made or outstanding as a
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Revolving Loan bearing interest based on the Base Rate.
"Base Rate Borrowing" shall mean a Borrowing made up of Base Rate
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Advances.
"Borrower" shall mean, upon consummation of the Merger, The Xxxxxxx
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Company, a Tennessee corporation, its successors and permitted assigns.
"Borrower Security Agreement" shall mean that certain Security
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Agreement executed by the Borrower substantially in the form of Exhibit E,
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granting a security interest in all
5
of the personal property and fixtures of the Borrower to the Agent, for the
benefit of the Lenders, either as originally executed or as hereafter amended or
modified.
"Borrowing" shall mean the incurrence by Borrower under any Facility
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of Advances of one Type concurrently having the same Interest Period or the
continuation or conversion of an existing Borrowing or Borrowings in whole or in
part.
"Business Day" shall mean any day excluding Saturday, Sunday and any
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other day on which banks are required or authorized to close in Atlanta, Georgia
and, if the applicable Business Day relates to Eurodollar Advances, any day on
---
which trading is not carried on by and between banks in deposits of the
applicable currency in the applicable interbank Eurocurrency market.
"Capital Expenditures" shall mean, for any fiscal period of the
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Borrower, all expenditures by the Borrower and its Subsidiaries during such
period for the acquisition or leasing of any fixed assets or improvements, or
for replacements, substitutions or additions thereto, which have a useful life
of more than one year and which are or should be reflected on the Borrower's
statement of cash flow for such period as capital expenditures in accordance
with GAAP.
"Capital Lease" shall mean, as applied to any Person, any lease of any
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property (whether real, personal or mixed) by such Person as lessee which would,
in accordance with GAAP, be required to be classified and accounted for as a
capital lease on a balance sheet of such Person, other than, in the case of
Borrower or any of its Subsidiaries, any such lease under which Borrower or a
Wholly-Owned Subsidiary of Borrower is the lessor.
"Capital Lease Obligation" shall mean, with respect to any Capital
------------------------
Lease, the amount of the obligation of the lessee thereunder which would, in
accordance with GAAP, appear on a balance sheet of such lessee in respect of
such Capital Lease.
"Capital Stock" shall mean (i) in the case of a corporation, capital
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stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of capital stock, (iii) in the case of a partnership, partnership
interests (whether general or limited) and (iv) any other interest or
participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person.
"Cash Equivalents" shall mean:
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(i) securities issued or directly and fully guaranteed or insured by
the United States of America or any agency or instrumentality thereof (provided
that the full faith and credit of the United States is pledged in support
thereof) having maturities not more than twelve months from the date of
acquisition;
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(ii) U.S. dollar denominated (or foreign currency fully hedged) time
deposits, certificates of deposit of (a) any domestic commercial bank of
recognized standing having capital and surplus in excess of $500 million or (b)
any bank whose short-term commercial paper rating from S&P is at least A-1 or
the equivalent thereof or from Xxxxx'x is at least P-1 or the equivalent thereof
(any such bank being an "Approved Lender"), in each case with maturities of not
more than twelve months from the date of acquisition; and
(iii) commercial paper issued by an Approved Lender (or by the
parent company thereof) or any variable rate notes issued by, or guaranteed by,
any domestic corporation rated A-2 (or the equivalent thereof) or better by S&P
or P-2 (or the equivalent thereof) or better by Moody's and maturing within
twelve months of the date of acquisition.
"Cash Taxes Paid" shall mean, for any fiscal period of Borrower, the
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provision of the Borrower and its Subsidiaries for taxes paid as shown on the
income statement of Borrower for such period minus any increase (or plus any
decrease) in the provision for deferred taxes of the Borrower and its
Subsidiaries, determined on a consolidated basis in accordance with GAAP.
"Change of Control" shall mean such time as either:
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(i) prior to the initial Public Equity Offering by the Borrower or the
Parent of its common stock, the Permitted Shareholders cease to be, directly or
indirectly, the beneficial owners in the aggregate, of more than 50% of the
voting power of the Voting Stock of the Borrower and of the Parent, in each case
on a fully-diluted basis, after giving effect to the conversion and exercise of
all outstanding warrants, options and other securities of the Borrower or the
Parent, as the case may be, convertible into or exercisable for Voting Stock of
the Borrower or the Parent, as the case may be (whether or not such securities
are then currently convertible or exercisable); or
(ii) after the initial Public Equity Offering by the Borrower or the Parent
of its common stock, (a) any "person" or "group" (within the meaning of Section
13(d) or 14(d) of the Exchange Act) (other than one or more of the Permitted
Shareholders) has become, directly or indirectly, the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person
shall be deemed to have "beneficial ownership" of all shares that any such
Person has the right to acquire, whether such right is exercisable immediately
or only after the passage of time), by way of merger, consolidation or
otherwise, of 35% or more of the voting power of the Voting Stock of the
Borrower or the Parent in each case on a fully-diluted basis, after giving
effect to the conversion and exercise of all outstanding warrants, options and
other securities of the Borrower or the Parent, as the case may be, convertible
into or exercisable for Voting Stock of the Borrower or the Parent, as the case
may be (whether or not such securities are then currently convertible or
exercisable) and (b) such person or group is or becomes, directly or indirectly,
the beneficial owner of a greater percentage of the voting power of the Voting
Stock of the Borrower or of the Parent, as the case may be, calculated on such
fully-diluted basis, than the percentage then beneficially owned by the
Permitted Shareholders; or
7
(iii) the Borrower or the Parent merges with or into another Person or
sells, assigns, conveys, transfers, leases or otherwise disposes of all or
substantially all of its assets to any Person, or any Person merges with or into
the Borrower or the Parent, in any such event pursuant to a transaction in which
the outstanding Voting Stock of the Borrower or the Parent is converted into or
exchanged for cash, securities or other property, other than any such
transaction where (x) the outstanding Voting Stock of the Borrower or the Parent
is converted into or exchanged for (1) Voting Stock (other than Disqualified
Stock) of the surviving or transferee corporation and/or (2) cash, securities
and other property in an amount which could be paid by the Borrower as a
Restricted Payment under Section 7.04 hereof and (y) immediately after such
transaction no "person" or "group" (within the meaning of Section 13(d) and
14(d) of the Exchange Act) (other than one or more of the Permitted
Shareholders) is the "beneficial owner" (as defined in Rules 13d-3 and 13d-5
under the Exchange Act, except that a Person shall be deemed to have "beneficial
ownership" of all shares that any such Person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time),
directly or indirectly, of (1) 35% or more of the voting power of the Voting
Stock of the surviving or transferee corporation on a fully-diluted basis, after
giving effect to the conversion and exercise of all outstanding warrants,
options and other securities of such surviving or transferee corporation,
convertible into or exercisable for Voting Stock of such surviving or transferee
corporation (whether or not such securities are then currently convertible or
exercisable) and (2) a greater percentage of the voting power of the Voting
Stock of such surviving or transferee corporation calculated on such fully
diluted basis, than the percentage then beneficially owned by the Permitted
Shareholders; or
(iv) during any period of two consecutive calendar years, individuals who
at the beginning of such period constituted either the board of directors of the
Borrower or of the Parent, as the case may be, together with any new members of
such board of directors (a) whose election by such board of directors or whose
nomination for election by the stockholders of the Borrower or the stockholders
of the Parent, as the case may be, was approved by a vote of a majority of the
members of such board of 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 or (b) elected by the Permitted
Shareholders, cease for any reason to constitute a majority of the directors of
the Borrower or of the Parent, as the case may be, then in office.
"Change in Control Provision" shall mean any term or provision
---------------------------
contained in any indenture, debenture, note, or other agreement or document
evidencing or governing Indebtedness of Borrower evidencing debt or a commitment
to extend loans in excess of $1,000,000.00 which requires, or permits the
holder(s) of such Indebtedness of Borrower to require that such Indebtedness of
Borrower be redeemed, repurchased, defeased, prepaid or repaid, either in whole
or in part, or the maturity of such Indebtedness of Borrower to be accelerated
in any respect, as a result of a change in ownership of the capital stock of
Borrower or voting rights with respect thereto.
"Closing Date" shall mean September 26, 1997 or such later date on
------------
which the initial Loans are made and the conditions set forth in Sections 4.01
and 4.02 are satisfied.
8
"Collateral" shall mean all of the assets of the Credit Parties
----------
subject to a Lien in favor of the Agent, for the benefit of the Lenders,
pursuant to the Security Documents.
"Commitments" shall mean the Revolving Loan Commitments.
-----------
"Commitment Fee" shall have the meaning ascribed to it in Section
--------------
3.05(a).
"Consolidated Cash Flow" shall mean, with respect to any fiscal period
----------------------
of the Borrower, the sum of (i) Consolidated EBITDA for such period, plus (ii)
Rental Expense for such period, minus (iii) Consolidated Capital Expenditures
made during such period, minus (iv) Cash Taxes Paid during such period, in each
case, calculated on a consolidated basis in accordance with GAAP.
"Consolidated Companies" shall mean, collectively, Parent and all of
----------------------
its Subsidiaries.
"Consolidated EBITDA" shall mean, with reference to any period, an
-------------------
amount equal to the sum for such fiscal period of Consolidated Net Income (Loss)
and, to the extent deducted in determining such Consolidated Net Income (Loss),
provisions for (i) taxes based on income (whether paid or deferred), (ii)
Consolidated Interest Expense, (iii) depreciation of assets and (iv)
amortization.
"Consolidated Funded Debt" shall mean, as of any date of
------------------------
determination, the Funded Debt of the Borrower and its Subsidiaries.
"Consolidated Interest Expense" shall mean, for any period, total
-----------------------------
interest expense of the Borrower and its Subsidiaries (including without
limitation, interest expense attributable to Capital Leases, all capitalized
interest, all commissions, discounts and other fees and charges owed with
respect to bankers acceptance financing, net costs (i.e., costs minus benefits)
----
under Interest Rate Contracts, and total interest expense (whether shown as
interest expense or as loss and expenses on sales of receivables) under a
receivables purchase facility) determined on a consolidated basis in accordance
with GAAP, excluding amortized costs of Indebtedness, net of any interest
income.
"Consolidated Net Income (Loss)" shall mean, with reference to any
------------------------------
period, the net income (or deficit) of the Borrower and its Subsidiaries for
such period (taken as a cumulative whole), after deducting all operating
expenses, provisions for all taxes and reserves (including reserves for deferred
income taxes) and all other proper deductions, all determined in accordance with
GAAP on a consolidated basis, after eliminating all intercompany transactions
and after deducting portions of income properly attributable to minority
interests, if any, in the stock and surplus of the Subsidiaries of the Borrower,
and excluding the sum of (i) the gain or loss (net of any tax effect) resulting
from the sale of any capital assets other than in the ordinary
9
course of business of the Borrower and its Subsidiaries and (ii) other
extraordinary or non-recurring items, as defined by GAAP, of the Borrower and
its Subsidiaries.
"Consolidated Net Worth" shall mean the shareholders' equity of the
----------------------
Borrower calculated in accordance with GAAP, less treasury stock.
"Contractual Obligation" of any Person shall mean any provision of any
----------------------
security issued by such Person or of any material agreement, instrument or
undertaking under which such Person is obligated or by which it or any of the
property owned by it is bound.
"Contribution Agreement" shall mean the Contribution Agreement
----------------------
executed by each of the Guarantors and the Borrower, substantially in the form
of Exhibit D attached hereto, as the same may be amended, restated or
---------
supplemented from time to time.
"Credit Documents" shall mean, collectively, this Agreement, the
----------------
Notes, the Guaranty Agreement, the Security Documents and all other instruments,
documents, certificates, agreements and writings executed in connection
herewith.
"Credit Parties" shall mean, collectively, each of the Acquisition
--------------
Sub, the Borrower and the Guarantors (including all Persons that are currently
Guarantors and all Persons who may at any time in the future become Guarantors),
and every other Person who from time to time executes a Security Document with
respect to all or any portion of the Obligations.
"Currency Contracts" shall mean any forward contracts, futures
------------------
contracts, foreign exchange contracts, currency swap agreements, and other
similar agreements and arrangements entered into by any Consolidated Company
designed to protect any Consolidated Company against fluctuations in foreign
exchange rates.
"Current Maturities of Long Term Debt" shall have the meaning afforded
------------------------------------
such term under GAAP and shall be calculated with respect to the Borrower and
its Subsidiaries.
"Default" shall mean any condition or event which, with notice or
-------
lapse of time or both, would constitute an Event of Default.
"Disqualified Stock" means (a) with respect to any Person, Capital
------------------
Stock of such Person that, by its terms (or by the terms of any security into
which it is convertible or for which it is exchangeable), or upon the happening
of any event matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the option of the holder thereof,
in whole or in part, on or prior to the date which is one year after the date on
which the Senior Notes mature and (b) with respect to any Subsidiary of such
Person (including with respect to any Subsidiary of the Borrower), any Capital
Stock.
10
"Dollar" and "U.S. Dollar" and the sign "$" shall mean lawful money of
------ ----------- -
the United States of America.
"Eligible Assets" means another business or any substantial part of
---------------
another business or other long-term assets (including, without limitation new
restaurant locations), in each case, in, or used or useful in, the same or a
similar line of business as the Borrower (exclusive of Xxxxxxx Aviation Co. and
Xxxxxxx Aviation Management Co.) was engaged in on the Closing Date or any
reasonable extensions or expansions thereof (including the Capital Stock of
another Person engaged in such business, provided such other Person is, or
immediately after giving effect to any such acquisition shall become, a Wholly-
Owned Subsidiary of the Borrower).
"Eligible Assignee" shall mean (i) a commercial bank organized under
-----------------
the laws of the United States or any state thereof having a combined capital and
surplus of at least $50,000,000 and a long term debt rate of at least
"investment grade" by Xxxxx'x or S& P, or any commercial finance or asset-based
lending Affiliate of any such commercial bank and (ii) any Lender.
"Environmental Laws" shall mean all federal, state, local and foreign
------------------
statutes and codes or regulations, rules or ordinances issued, promulgated, or
approved thereunder, now or hereafter in effect (including, without limitation,
those with respect to asbestos or asbestos containing material or exposure to
asbestos or asbestos containing material), relating to pollution or protection
of the environment and relating to public health and safety, relating to (i)
emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals or industrial toxic or hazardous constituents,
substances or wastes, including without limitation, any Hazardous Substance,
petroleum including crude oil or any fraction thereof, any petroleum product or
other waste, chemicals or substances regulated by any Environmental Law into the
environment (including, without limitation, ambient air, surface water, ground
water, land surface or subsurface strata), or (ii) the manufacture, processing,
distribution, use, generation, treatment, storage, disposal, transport or
handling of any Hazardous Substance, petroleum including crude oil or any
fraction thereof, any petroleum product or other waste, chemicals or substances
regulated by any Environmental Law, and (iii) underground storage tanks and
related piping, and emissions, discharges and releases or threatened releases
therefrom, such Environmental Laws to include, without limitation (a) the Clean
Air Act (42 U.S.C. (S) 7401 et seq.), (b) the Clean Water Act (33 U.S.C. (S)
-- ---
1251 et seq.), (c) the Resource Conservation and Recovery Act (42 U.S.C. (S)
-- ---
6901 et seq.), (d) the Toxic Substances Control Act (15 U.S.C. (S) 2601 et
-- --- --
seq.), (e) the Comprehensive Environmental Response Compensation and Liability
---
Act, as amended by the Superfund Amendments and Reauthorization Act (42 U.S.C.
(S) 9601 et seq.), and (f) all applicable national and local laws or regulations
-- ---
with respect to environmental control.
"Equity Interests" means Capital Stock and all warrants, options or
----------------
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock), whether outstanding prior
to, on or after the Closing Date.
11
"ERISA" shall mean the Employee Retirement Income Security Act of
-----
1974, as amended and in effect from time to time.
"ERISA Affiliate" shall mean, with respect to any Person, each trade
---------------
or business (whether or not incorporated) which is a member of a group of which
that Person is a member and which is under common control within the meaning of
the regulations promulgated under Section 414 of the Tax Code.
"Eurodollar Advance" shall mean an Advance made or outstanding as a
------------------
Revolving Loan bearing interest based on the Adjusted LIBO Rate.
"Eurodollar Borrowing" shall mean a Borrowing made up of Eurodollar
--------------------
Advances.
"Event of Default" shall have the meaning provided in Article VIII.
----------------
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
------------
and the rules and regulations promulgated thereunder.
"Executive Officer" shall mean with respect to any Person, the
-----------------
Chairman, President, Vice Presidents, Chief Financial Officer, Treasurer,
Secretary and any Person holding comparable offices or duties.
"Exempt Affiliate Transactions" means (a) transactions between or
-----------------------------
among the Borrower and/or its Wholly-Owned Subsidiaries, (b) advances to
officers of the Borrower or any Subsidiary of the Borrower in the ordinary
course of business to provide for the payment of reasonable expenses incurred by
such persons in the performance of their responsibilities to the Borrower or
such Subsidiary or in connection with any relocation, (c) fees and compensation
paid to and indemnity provided on behalf of directors, officers or employees of
the Borrower or any Subsidiary of the Borrower in the ordinary course of
business, (d) any employment agreement that is in effect on the Closing Date and
any such agreement entered into by the Borrower or a Subsidiary of the Borrower
after the Closing Date in the ordinary course of business of the Borrower or
such Subsidiary and (e) any Restricted Payment that is not prohibited by Section
7.04 hereof.
"Exempt Asset Sale" means an Asset Sale on or after the Closing Date
-----------------
the Net Proceeds of which plus the Net Proceeds of all other Asset Sales made in
the same fiscal year (but, in all cases, after the Closing Date) do not exceed
$2.5 million.
"Facility" or "Facilities" shall mean the Revolving Loan Commitments,
-------- ----------
the Letter of Credit Subcommitment or the Swing Line Subcommitment, as the
context may indicate.
12
"Federal Funds Rate" shall mean for any period, a fluctuating interest
------------------
rate per annum equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with member banks of the
Federal Reserve System arranged by Federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of Atlanta, or, if such rate is not so published for
any day which is a Business Day, the average of the quotations for such day on
such transactions received by the Agent from three Federal funds brokers of
recognized standing selected by the Agent.
"Fiscal Quarter" shall mean, with respect to the Borrower, a period of
--------------
13 (or, if applicable, 14) consecutive week period, in each case, comprising a
portion of the Borrower's Fiscal Year.
"Fiscal Year" shall mean any period of 52 (or, if applicable 53)
-----------
consecutive weeks ending on the Sunday closest to December 31 of each year;
references to a Fiscal Year with a number corresponding to any calendar year
(e.g., "Fiscal Year 1996") refer to the Fiscal Year ending on the Sunday closest
to December 31 of that year.
"Fiscal Year End" shall mean the last day of any Fiscal Year.
---------------
"Fixed Charge Coverage Ratio" shall mean, for any period, the ratio of
---------------------------
(i) (x) Consolidated Cash Flow plus (y) Capital Expenditures made by the
----
Borrower and its Subsidiaries during such period in connection with new store
expansion, to (ii) Fixed Charges for such period in each case determined with
respect to the Borrower and its Subsidiaries for the fiscal quarter ending on
such date and the immediately preceding three fiscal quarters.
"Fixed Charges" shall mean, with reference to any period, determined
-------------
in accordance with GAAP on a consolidated basis, the sum of the following for
the Borrower and its Subsidiaries, after eliminating all intercompany items:
(a) Consolidated Interest Expense for such period;
(b) all Rental Obligations payable as lessee under any operating lease
properly charged or chargeable to income during such period in accordance
with GAAP; and
(c) Current Maturities of Long Term Debt for such period as reflected
on the balance sheet for such ended period;
provided that any interest charges or rentals paid or accrued by any Person
--------
acquired by the Borrower or any of its Subsidiaries during such period, through
purchase, merger, consolidation or otherwise, shall be included in "Fixed
Charges" only to the extent that the earnings of such Person are taken into
account in determining Consolidated Cash Flow for such period.
13
"Funded Debt" shall mean, as applied to any Person, all Indebtedness
-----------
of such Person of the types described in clauses (i) - (vii) of the definition
thereof, less the undrawn amount of any Letters of Credit issued hereunder.
"Funded Debt Coverage Ratio" shall mean, as of the last day of any
--------------------------
fiscal quarter of the Borrower, the ratio of (i) Consolidated Funded Debt to
(ii) Consolidated EBITDA determined with respect to the Borrower and its
Subsidiaries for the fiscal quarter ending on such date and the immediately
preceding three fiscal quarters.
"GAAP" shall mean generally accepted accounting principles set forth
----
in the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or, if no such
statements are promulgated, then such other statements by such other entity as
may be approved by a significant segment of the accounting profession, which are
applicable to the circumstances as of the date of determination.
"Guarantors" shall mean, collectively, (i) Parent, (ii) Xxxxxxx
----------
Aviation Co., (iii) Xxxxxxx Aviation Management Co. and (iv) all other Material
Subsidiaries of the Borrower, whether now existing or hereafter created, and
their respective successors and permitted assigns.
"Guaranty" shall mean any contractual obligation, contingent or
--------
otherwise (other than letters of credit), of a Person with respect to any
Indebtedness or other obligation or liability of another Person, including
without limitation, any such Indebtedness, obligation or liability directly or
indirectly guaranteed, endorsed, co-made or discounted or sold with recourse by
that Person, or in respect of which that Person is otherwise directly or
indirectly liable, including contractual obligations (contingent or otherwise)
arising through any agreement to purchase, repurchase, or otherwise acquire such
Indebtedness, obligation or liability or any security therefor, or any agreement
to provide funds for the payment or discharge thereof (whether in the form of
loans, advances, stock purchases, capital contributions or otherwise), or to
maintain solvency, assets, level of income, or other financial condition, or to
make any payment other than for value received. The amount of any Guaranty
shall be deemed to be an amount equal to the stated or determinable amount of
the primary obligation in respect of which guaranty is made or, if not so stated
or determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as determined by such
Person in good faith.
"Guaranty Agreements" shall mean, collectively, the Parent Guaranty
-------------------
Agreement and the Subsidiary Guaranty Agreement executed by the Guarantors in
favor of the Lenders and the Agent, substantially in the form of Exhibits C-1
------------
and C-2, respectively, as the same may be amended, restated or supplemented from
---
time to time.
14
"Hazardous Substances" shall have the meaning assigned to that term in
--------------------
the Comprehensive Environmental Response Compensation and Liability Act of 1980,
as amended by the Superfund Amendments and Reauthorization Act of 1986.
"Hedging Obligations" means, with respect to any Person, the
-------------------
obligations of such Person entered into in the ordinary course of business under
interest rate swap agreements, interest rate cap agreements and interest rate
collar agreements and other similar financial agreements or arrangements
designed to protect such Person against, or manage the exposure of such Person
to, fluctuations in interest rates.
"Hostile Acquisition" shall mean any Investment resulting in control
-------------------
of a Person involving a tender offer or proxy contest that has not been
recommended or approved by the board of directors of the Person that is the
subject of the Investment prior to the first public announcement or disclosure
relating to such Investment.
"Indebtedness" of any Person shall mean, without duplication (i) all
------------
obligations of such Person for borrowed money and for the deferred purchase
price of property or services, and obligations evidenced by bonds, debentures,
notes or other similar instruments; (ii) all Capital Lease Obligations; (iii)
all Guaranties of such Person (including contingent reimbursement obligations
under undrawn letters of credit); (iv) Indebtedness of others secured by any
Lien upon property owned by such Person, whether or not assumed; (v) obligations
or other liabilities under Currency Contracts, Interest Rate Contracts, or other
Hedging Obligations; (vi) all obligations of such Person arising pursuant to any
asset securitization transactions; (vii) Redeemable Capital Stock of such Person
valued at the greater of its voluntary or involuntary maximum fixed repurchase
price plus accrued dividends; and (viii) all other obligations of such Person
which in accordance with GAAP would be shown on the balance sheet of such Person
as a liability (other than reserves required by GAAP). For purposes hereof, the
"maximum fixed repurchase price" of any Redeemable Capital Stock which does not
have a fixed repurchase price shall be calculated in accordance with the terms
of such Redeemable Capital Stock as if such Redeemable Capital Stock were
purchased on any date on which Indebtedness shall be required to be determined
pursuant to this Agreement, and if such price is based on, or measured by, the
fair market value of such Redeemable Capital Stock, such fair market value shall
be determined in good faith by the board of directors of the issuer of such
Redeemable Capital Stock.
"Interest Period" shall mean (i) as to any Eurodollar Advances, the
---------------
interest period selected by the Borrower pursuant to Section 3.04(a) hereof, and
(ii) as to any Swing Rate Advances, the interest period specified in Section
3.04(b) hereof.
"Interest Rate Contract" shall mean all interest rate swap agreements,
----------------------
interest rate cap agreements, interest rate collar agreements, interest rate
insurance and other agreements and arrangements designed to provide protection
against fluctuations in interest rates, in each case as the same may be from
time to time amended, restated, renewed, supplemented or otherwise modified.
15
"Investments" means, with respect to any Person, all investments by
-----------
such Person in other Persons (including Affiliates) in the form of direct or
indirect loans (including guarantees of Indebtedness or other obligations),
advances or other extensions of credit or capital contributions to other Persons
(by means of any transfer of cash or other property but excluding advances to
officers of the type specified in clause (b) of the definition of Exempt
Affiliate Transactions), or any purchases, acquisitions for consideration of
Indebtedness, Equity Interests or other securities or ownership by such Person
or any Capital Stock, bonds, notes, debentures or other securities (including,
without limitation any interests in a partnership or joint venture) issued or
owned by any other Person, and all other items that are or would be classified
as investments on a balance sheet prepared in accordance with GAAP; provided
that an acquisition by the Borrower for consideration consisting of common
equity securities of the Borrower shall not be deemed to be an Investment.
"Lender" or "Lenders" shall mean SunTrust, the other banks and lending
------ -------
institutions listed on the signature pages hereof, and each assignee thereof, if
any, pursuant to Section 10.06(c).
"Lending Office" shall mean for each Lender, the office such Lender
--------------
may designate in writing from time to time to Borrower and the Agent with
respect to each Type of Loan.
"L/C Cash Collateral Account" shall mean a cash collateral account
---------------------------
established by Agent for deposit of cash collateral for the aggregate L/C
Outstandings, which account shall be designated as the L/C Cash Collateral
Account and shall be subject to the sole dominion and control of the Agent.
"L/C Exposure" shall mean, for each Lender, the sum, for all Letters
------------
of Credit, of the product of (i) the L/C Outstandings for each Letter of Credit,
multiplied by (ii) such Lender's applicable Pro Rata Share for such Letter of
---------- --
Credit.
"L/C Outstandings" shall mean, as at any date of determination with
----------------
respect to an outstanding Letter of Credit, the sum of (i) the maximum aggregate
amount which at such date of determination is available to be drawn (assuming
conditions for drawing thereunder have been met) under such Letter of Credit
then outstanding, plus (ii) the aggregate amount of all drawings under such
----
Letter of Credit and honored by the Agent not theretofore reimbursed by or on
behalf of the Borrower.
"L/C Subcommitment" shall mean, at any time, an aggregate amount of
-----------------
$7,500,000, as such amount may be reduced from time to time in accordance with
the terms of this Agreement, and shall mean, for any Lender, the amount of the
Letter of Credit Subcommitment multiplied by such Lender's Pro Rata Share.
16
"Letter of Credit" shall mean any letter of credit issued by the Agent
----------------
for the account of the Borrower pursuant to the L/C Subcommitment, as the same
may be amended, extended or re-issued from time to time.
"Letter of Credit Fee" shall have the meaning set forth in Section
--------------------
3.05(b).
"LIBOR" shall mean, for any Interest Period, with respect to
-----
Eurodollar Advances the offered rate for deposits in U.S. Dollars, for a period
comparable to the Interest Period and in an amount comparable to the amount of
such Advances, appearing on the Reuters Screen LIBO Page as of 11:00 A.M.
(London, England time) on the day that is two London Business Days prior to the
first day of the Interest Period. If two or more of such rates appear on the
Reuters Screen LIBO Page, the rate for that Interest Period shall be the
arithmetic mean of such rates. If the foregoing rate is unavailable from the
Reuters Screen for any reason, then such rate shall be determined by the Agent
from Telerate Page 3750 or, if such rate is also unavailable on such service,
then on any other interest rate reporting service of recognized standing
designated in writing by the Agent to Borrower and the other Lenders; in any
such case rounded, if necessary, to the next higher 1/16 of 1.0%, if the rate is
not such a multiple.
"Lien" shall mean any mortgage, pledge, security interest, lien,
----
charge, hypothecation, assignment, deposit arrangement, title retention,
preferential property right, trust or other arrangement having the practical
effect of the foregoing and shall include the interest of a vendor or lessor
under any conditional sale agreement, capitalized lease or other title retention
agreement.
"Loans" shall mean, collectively, the Revolving Loans and the Swing
-----
Line Loans.
"Margin Regulations" shall mean Regulation G, Regulation T, Regulation
------------------
U and Regulation X of the Board of Governors of the Federal Reserve System, as
the same may be in effect from time to time.
"Material Subsidiary" shall mean (i) each Credit Party other than the
-------------------
Borrower, (ii) each guarantor of the Senior Notes, and (iii) each other
Subsidiary of the Borrower, now existing or hereafter established or acquired,
that at any time prior to the Maturity Date, has or acquires total assets in
excess of $500,000.00, or that accounted for or produced more than five percent
(5%) of the Consolidated Net Income (Loss) of the Borrower on a consolidated
basis during any of the three most recently completed Fiscal Years of the
Borrower, or that is otherwise material to the operations or business of the
Borrower or another Material Subsidiary.
"Materially Adverse Effect" shall mean any materially adverse change
-------------------------
in (i) the business, results of operations, financial condition, assets or
prospects of the Consolidated Companies, taken as a whole, (ii) the ability of
Borrower to perform its obligations under this Agreement, or (iii) the ability
of the other Credit Parties (taken as a whole) to perform their respective
obligations under the Credit Documents.
17
"Maturity Date" shall mean the earlier of (i) August 26, 2000, as such
-------------
date may be extended pursuant to Section 2.03(d), and (ii) the date on which all
amounts outstanding under this Agreement have been declared or have
automatically become due and payable pursuant to the provisions of Article VIII.
"Moody's" shall mean Xxxxx'x Investors Service, Inc.
-------
"Mortgages" shall mean those certain mortgages, deed to secure debt,
---------
deeds of trust and similar instruments executed by the Borrower granting a Lien
on the real property and fixtures owned by the Borrower in the States of Georgia
and Tennessee to the Agent, for the benefit of the Lenders, either as originally
executed or as hereafter amended or modified.
"Multiemployer Plan" shall have the meaning set forth in Section
------------------
4001(a)(3) of ERISA.
"Net Proceeds" shall mean the aggregate cash proceeds received by the
------------
Borrower or any of its Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
noncash consideration received in any Asset Sale), net of the direct costs
relating to such Asset Sale (including, without limitation legal, accounting and
investment banking fees, and sales commissions), taxes paid or payable as a
result thereof, and any reserve for adjustment in respect of the sale price of
such asset or assets established in accordance with GAAP.
"Notes" shall mean, collectively, the Revolving Notes and the Swing
-----
Line Note.
"Notice of Borrowing" shall have the meaning provided in Section
-------------------
3.01(a)(i).
"Notice of Conversion/Continuation" shall have the meaning provided in
---------------------------------
Section 3.01(b)(i).
"Notice of Swing Line Loan" shall have the meaning provided in Section
-------------------------
3.01(a)(ii).
"Obligations" shall mean all amounts owing to the Agent or any Lender
-----------
pursuant to the terms of this Agreement, any Currency Contract or Interest Rate
Contract entered into by a Lender with the Borrower, or any other Credit
Document, including without limitation, all Loans (including all principal and
interest payments (including post-petition interest whether or not allowed as a
claim in any bankruptcy action) due thereunder), fees, expenses, indemnification
and reimbursement payments, indebtedness, liabilities, and obligations of the
Credit Parties, direct or indirect, absolute or contingent, liquidated or
unliquidated, now existing or hereafter arising, together with all renewals,
extensions, modifications or refinancings thereof.
18
"Parent Guaranty Agreement" shall mean that certain Guaranty Agreement
-------------------------
executed by the Parent in favor of the Agent and the Lenders with respect to the
Obligations, either as originally executed or as hereafter amended or modified.
"Parent Pledge and Security Agreement" shall mean that certain Pledge
------------------------------------
and Security Agreement executed by the Parent in favor of the Agent, for the
benefit of the Lenders, in connection with the Pledged Stock owned by the
Parent, either as originally executed or as hereafter amended or modified.
"Payment Office" shall mean with respect to payments of principal,
--------------
interest, fees or other amounts relating to the Revolving Loans, the Swing Line
Loans, and all other Obligations, the office specified as the "Payment Office"
for the Agent on the signature page of the Agent, or such other location as to
which the Agent shall have given written notice to the Borrower.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
----
successor thereto.
"Permitted Investments" shall mean:
---------------------
(a) any Investments in the Borrower;
(b) any Investments in Cash Equivalents;
(c) Investments made as a result of the receipt of noncash
consideration from an Asset Sale that was made pursuant to and in
compliance with Section 7.05(b);
(d) Investments in property or assets to be used in any line of
business in which the Borrower or any of its Subsidiaries was engaged on
the Closing Date or any reasonable extensions or expansions thereof; and
(e) Investments in Wholly-Owned Subsidiaries of the Borrower and any
entity that (a) is engaged in the same or a similar line of business as
the Borrower or any of it Subsidiaries was engaged in on the Closing Date
or any reasonable extensions or expansions thereof, and (b) as a result of
such Investment, becomes a Wholly-Owned Subsidiary of the Borrower.
"Permitted Liens" shall mean with respect to any Person,
---------------
(a) Liens pursuant to the Security Documents;
(b) Liens existing on the Closing Date and disclosed on Schedule 7.02;
-------------
19
(c) pledges or deposits by such Person under workmen's compensation
laws, unemployment insurance laws or similar legislation, or good faith
deposits in connection with bids, tenders, contracts (other than for the
payment of Indebtedness) or leases to which such Person is a party, or
deposits to secure public or statutory obligations of such Person or
deposits of cash or United States government bonds to secure surety or
appeal bonds to which such Person is a party, or deposits as security for
contested taxes or for the payment of rent, in each case incurred in the
ordinary course of business;
(d) Liens imposed by law, such as carriers', warehousemen's and
mechanic's Liens, in each case for sums not yet due or being contested in
good faith by appropriate proceedings; or other Liens arising out of
judgments or awards against such Person with respect to which such Person
shall be proceeding with an appeal or other proceedings for review;
(e) Liens for property taxes not yet subject to penalties for non-
payment or which are being contested in good faith and by appropriate
proceedings;
(f) Liens in favor of issuers of surety bonds or letters of credit
issued pursuant to the request of and for the account of such Person in
the ordinary course of its business; provided, however, that such letters
of credit do not constitute Indebtedness;
(g) survey exceptions, minor encumbrances, easements or reservations
of, or rights of others for, licenses, rights of way, sewers, electric
lines, telegraph and telephone lines and other similar purposes, or zoning
or other restrictions as to the use of real properties or liens incidental
to the conduct of the business of such Person or the ownership of its
properties which were not incurred in connection with Indebtedness and
which do not in the aggregate materially adversely affect the value of
said properties or materially impair their use in the operation of the
business of such Person;
(h) Liens securing Indebtedness incurred to finance the construction,
purchase or lease of, or repairs, improvements or additions to, property;
provided, however, that the Lien may not extend to any other property
owned by the Borrower or any Subsidiary at the time the Lien is incurred,
and the Indebtedness secured by the Lien may not be issued more than 180
days after the later of the acquisition or construction of the property
subject to the Lien;
(i) Liens on property or shares of stock of a Person at the time such
Person becomes a Subsidiary; provided, however, that any such Lien may not
extend to any other property owned by the Borrower or any Subsidiary;
(j) Liens on property at the time the Borrower or a Subsidiary
acquires the property including any acquisition by means of a merger or
consolidation with or into the
20
Borrower or a Subsidiary; provided, however, that the Liens may not extend
to any other property owned by the Borrower or any Subsidiary;
(k) Liens securing Indebtedness or other obligations of a Subsidiary
owing to the Borrower or a Wholly-Owned Subsidiary;
(l) Liens securing Hedging Obligations so long as the related
Indebtedness is, and is permitted to be hereunder, secured by a Lien on
the same property securing such Hedging Obligations; and
(m) Liens to secure any refinancing, refunding, extension, renewal or
replacement (or successive refinancings, refundings, extensions, renewals
or replacements) as a whole, or in part, of any Indebtedness secured by
any Lien referred to in the foregoing clauses (a), (h) (i) and (j);
provided, however, that (x) such new Lien shall be limited to all or part
of the same property that secured the original Lien (plus improvements on
such property) and (y) the Indebtedness secured by such Lien at such time
is not increased to any amount greater than the sum of (A) the outstanding
principal amount or, if greater, committed amount of the Indebtedness
described under clauses (a), (h), (i) and (j) at the time the original
Lien became a Permitted Lien and (B) an amount necessary to pay any fees
and expenses, including premiums, related to such refinancing, refunding,
extension, renewal or replacement. This clause (m) shall not be deemed to
limit the provisions of clauses (b) through (g), (k), or (l).
"Permitted Shareholders" shall mean (i) those Persons who
----------------------
"beneficially own" (as such term is defined in Rules 13d-3 and 13d-5 under the
Exchange Act) Voting Stock of the Parent as of the Closing Date; (ii) the
spouses, parents, siblings, descendants (including children or grandchildren) of
such Persons; (iii) in the event of the incompetence or death of any of the
Persons described in clause (i) or (ii), such Person's estate, executor,
administrator, committee or other personal representative in each case who at
any particular date shall beneficially own or have the right to acquire,
directly or indirectly, Voting Stock of the Parent; (iv) any trusts created for
the sole benefit of the Persons described in clause (i), (ii), or (iii) or any
trust for the benefit of such trust or (y) any Person of which any of the
Persons described in (i), (ii) or (iii) (x) "beneficially owns" (as such term id
defined in Rules 13d-3 and 13d-5 under the Exchange Act) on a fully-diluted
basis all of the Voting Stock of such Person or (y) is the sole trustee or
general partner, or otherwise has the sole power to manage the business and
affairs, of such Person.
"Person" shall mean any individual, partnership, firm, corporation,
------
association, limited liability company, joint venture, trust or other entity, or
any government or political subdivision or agency, department or instrumentality
thereof.
"Plan" shall mean any "employee benefit plan" (as defined in Section
----
3(3) of ERISA), including, but not limited to, any defined benefit pension plan,
profit sharing plan, money purchase pension plan, savings or thrift plan, stock
bonus plan, employee stock ownership
21
plan, Multiemployer Plan, or any plan, fund, program, arrangement or practice
providing for medical (including post-retirement medical), hospitalization,
accident, sickness, disability, or life insurance benefits.
"Pledge Agreements" shall mean, collectively, that certain Pledge and
-----------------
Security Agreement and that certain Parent Pledge and Security Agreement
executed in favor of the Agent, substantially in the forms of Exhibits F-1 and
------------
F-2, in each case providing for the grant of first priority Liens on the Pledged
---
Stock, as the same may be further supplemented, amended or restated from time to
time.
"Pledged Stock" shall mean, collectively, all issued and outstanding
-------------
capital stock, together with all warrants, stock options, and other purchase and
conversion rights with respect to such capital stock, of each of Borrower and
its Material Subsidiaries (other than Xxxxxxx Aviation Management Co.).
"Pro Rata Share" shall mean, with respect to each of the Commitments
--------------
of each Lender, each Revolving Loan to be made by, each Letter of Credit issued
hereunder, and each payment (including, without limitation, any payment of
principal, interest or fees) to be made to each Lender with respect to the
Revolving Loans, the percentage designated as such Lender's Pro Rata Share of
the Revolving Loan Commitments, such Loans, such Letters of Credit or such
payments, as applicable, set forth under the name of such Lender on the
respective signature page for such Lender, in each case as such Pro Rata Share
may change from time to time as a result of assignments or amendments made
pursuant to this Agreement.
"Public Equity Offering" means underwritten public offering of the
----------------------
common stock of the Parent pursuant to an effective registration statement filed
with the United States Securities and Exchange Commission in accordance with the
Securities Act (whether alone or in conjunction with a secondary public
offering).
"Purchase Money Obligations" of any Person means any obligations of
--------------------------
such Person to any seller or any other Person incurred or assumed to finance the
construction and/or acquisition of real or personal property to be used in the
business of such Person or any of its Subsidiaries in an amount that is more
than 100% of the cost of such property, and incurred within 180 days after the
date of such construction or acquisition (excluding accounts payable to trade
creditors incurred in the ordinary course of business).
"Real Estate" shall mean each of the pieces of real property owned by
-----------
the Borrower in fee located in the states of Georgia or Tennessee.
"Redeemable Capital Stock" shall mean any shares of any class or
------------------------
series of capital stock that, either by the terms thereof, by the terms of any
security into which it is convertible or exchangeable, or by contract or
otherwise, is or upon the happening of an event or passage of time would be,
required to be redeemed prior to the Maturity Date or is redeemable at the
option
22
of the holder thereof at any time prior to the Maturity Date, or is convertible
into or exchangeable for debt securities at any time prior to the Maturity Date.
"Regulation D" shall mean Regulation D of the Board of Governors of
------------
the Federal Reserve System, as the same may be in effect from time to time.
"Rental Obligations" shall mean, with reference to any period, the
------------------
aggregate amount of all rental obligations for which the Borrower and its
Subsidiaries are directly or indirectly liable (as lessee or as guarantor or
other surety but without duplication) under all leases in effect at any time
during such period, including all such amounts for which any Person was liable
during the period immediately prior to the date such Person became a Subsidiary
of the Borrower or was merged into or consolidated with the Borrower or a
Subsidiary of the Borrower, as determined in accordance with GAAP.
"Required Lenders" shall mean at any time, the Lenders holding at
----------------
least 66 2/3% of the Commitments, whether or not advanced, or, following the
termination of all of the Commitments, the Lenders holding at
least 66 2/3% of the aggregate outstanding Advances at such time.
"Requirement of Law" for any person shall mean the articles or
------------------
certificate of incorporation or charter and bylaws or other organizational or
governing documents of such Person, and any law, treaty, rule or regulation, or
determination of an arbitrator or a court or other governmental authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"Restricted Payment" has the meaning set forth in Section 7.04 hereof.
------------------
"Reuters Screen" shall mean, when used in connection with any
--------------
designated page and LIBOR, the display page so designated on the Reuters Monitor
Money Rates Service (or such other page as may replace that page on that service
for the purpose of displaying rates comparable to LIBOR).
"Revolving Notes" shall mean, collectively, the promissory notes
---------------
evidencing the Revolving Loans in the form attached hereto as Exhibit A, either
---------
as originally executed or as hereafter amended, modified or supplemented.
"Revolving Loan Commitment" shall mean, at any time for any Lender,
-------------------------
the amount of such commitment set forth below such Lender's name on the
signature page of such Lender hereto attached hereto, as the same may be
increased or decreased from time to time as a result of any reduction thereof
pursuant to Section 2.04, any assignment thereof pursuant to Section 10.06, or
any amendment thereof pursuant to Section 10.02, and as further limited by the
deemed utilization of the Revolving Loan Commitment by Swing Rate Loans as set
forth in Section 3.14 and by the issuance of Letters of Credit.
23
"Revolving Loans" shall mean, collectively, the revolving loans made
---------------
to the Borrower by the Lenders pursuant to Section 2.01.
"Sale and Leaseback Transaction" means any direct or indirect
------------------------------
arrangement with any Person or to which any such Person is a party, providing
for the leasing to the Borrower or a Subsidiary of any property, whether owned
by the Borrower or any Subsidiary as of the Closing Date or later acquired,
which has been or is to be sold or transferred by the Borrower or such
Subsidiary to such Person or to any other Person from whom funds have been or
are to be advanced by such person on the security of such property.
"Securities Act" means the Securities Act of 1933, as amended, and the
--------------
rules and regulations promulgated thereunder.
"Security Documents" shall mean, collectively, the Guaranty
------------------
Agreements, the Borrower Security Agreement, the Mortgages, the Trademark
Security Agreement and each other guaranty agreement, mortgage, deed of trust,
security agreement, pledge agreement, or other security or collateral document
guaranteeing or securing the Obligations, now or hereafter executed, as the same
may be amended, restated, supplemented or otherwise modified from time to time.
"Subordinated Debt" shall mean all Indebtedness of Borrower which is
-----------------
subordinated to all obligations of Borrower or any other Credit Party arising
under this Agreement, the Notes, and the Guaranty Agreements, which is created,
incurred or assumed on terms and conditions satisfactory in all respects to the
Agent and the Lenders, including without limitation, with respect to interest
rates, payment terms, maturities, amortization schedules, covenants, defaults,
remedies, and subordination provisions, as evidenced by the written approval of
the Agent and the Lenders.
"Subsidiary" shall mean, with respect to any Person, any corporation
----------
or other entity (including, without limitation, partnerships, joint ventures,
and associations) regardless of its jurisdiction of organization or formation,
at least a majority of the total combined voting power of all classes of voting
stock or other ownership interests of which shall, at the time as of which any
determination is being made, be owned by such Person, either directly or
indirectly through one or more other Subsidiaries.
"Subsidiary Guaranty Agreement" shall mean that certain Guaranty
-----------------------------
Agreement executed by the Material Subsidiaries of the Borrower in favor of the
Agent and the Lenders with respect to the Obligations, either as originally
executed or as hereafter amended, supplemented or modified.
"Swing Line Exposure" shall mean, with respect to each Lender, the
-------------------
obligation of such Lender to purchase a pro rata participation in each Swing
Rate Advance pursuant to Section 2.02(d) hereof.
24
"Swing Line Lender" shall mean SunTrust and its successors and
-----------------
assigns.
"Swing Line Note" shall mean a promissory note of the Borrower payable
---------------
to the order of the Swing Line Lender, in substantially the form of Exhibit B
---------
hereto, evidencing the maximum aggregate principal indebtedness of the Borrower
to the Swing Line Lender with respect to outstanding Swing Line Loans made by
the Swing Line Lender pursuant to the Swing Line Subcommitment, either as
originally executed or as it may be from time to time supplemented, modified,
amended, renewed or extended.
"Swing Line Subcommitment" shall mean $5,000,000, as such amount may
------------------------
be reduced pursuant to Section 2.04 or amended or modified pursuant to Section
10.02 hereof.
"Swing Rate" shall mean, as to any Swing Line Loan, the interest rate
----------
per annum agreed to by the Borrower and the Swing Line Lender for such Loan for
the requested Interest Period pursuant to the procedure set forth in Section
3.01(a)(ii).
"Swing Rate Advance" shall mean any Advance outstanding hereunder
------------------
bearing interest based upon the Swing Rate.
"Swing Rate Loan" shall mean a Loan made by the Swing Line Lender
---------------
pursuant to Section 2.02 hereof.
"Tax Code" shall mean the Internal Revenue Code of 1986, as amended
--------
and in effect from time to time.
"Taxes" shall mean any present or future taxes, levies, imposts,
-----
duties, fees, assessments, deductions, withholdings or other charges of whatever
nature, including without limitation, income, receipts, excise, property, sales,
transfer, license, payroll, withholding, social security and franchise taxes now
or hereafter imposed or levied by the United States, or any state, local or
foreign government or by any department, agency or other political subdivision
or taxing authority thereof or therein and all interest, penalties, additions to
tax and similar liabilities with respect thereto.
"Telerate" shall mean, when used in connection with any designated
--------
page and LIBOR, the display page so designated on the Dow Xxxxx Telerate Service
(or such other page as may replace that page on that service for the purpose of
displaying rates comparable to LIBOR).
"Trademark Security Agreement" shall mean that certain trademark
----------------------------
security agreement executed by Borrower, in favor of the Agent, for the benefit
of the Lenders, substantially in the form of Exhibit K attached hereto, either
---------
as originally executed or as hereafter amended or modified.
25
"Transaction" shall mean, collectively, (i) the Acquisition, (ii) the
-----------
Merger, (iii) the equity contribution described in the recitals hereof, (iv) the
issuance of the Senior Notes, and (v) the repayment of the Existing Credit
Agreement.
"Type" of Borrowing shall mean a Borrowing consisting of Base Rate
----
Advances, Eurodollar Advances or Swing Rate Advances.
"Voting Stock" shall mean securities of any class or classes, the
------------
holders of which are entitled to elect all of the corporate directors (or
Persons performing similar functions).
"Wholly-Owned Subsidiary" of any Person means a Subsidiary of such
-----------------------
Person all of the outstanding Capital Stock or other ownership interests of
which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more Wholly-Owned Subsidiaries of such Person.
Section 1.02. Accounting Terms and Determination. Unless otherwise
----------------------------------
defined or specified herein, all accounting terms shall be construed herein, all
accounting determinations hereunder shall be made, all financial statements
required to be delivered hereunder shall be prepared, and all financial records
shall be maintained in accordance with, GAAP.
Section 1.03. Other Definitional Terms. The words "hereof", "herein" and
------------------------
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement, and Article, Section, Schedule, Exhibit and like references are to
this Agreement unless otherwise specified.
Section 1.04. Exhibits and Schedules. All Exhibits and Schedules attached
----------------------
hereto are by reference made a part hereof.
ARTICLE II.
REVOLVING LOANS AND SWING RATE LOANS
------------------------------------
Section 2.01. REVOLVING LOAN COMMITMENTS; USE OF PROCEEDS.
-------------------------------------------
(a) Revolving Loan Commitments. Subject to and upon the terms and
--------------------------
conditions herein set forth, each Lender severally establishes in favor of the
Borrower, from on and after the Closing Date, but prior to the Maturity Date,
its Revolving Loan Commitment. The Lenders, subject to and upon the terms and
conditions set forth herein, from time to time, agree to make to the Borrower
Revolving Loans in an aggregate principal amount outstanding at any time not to
exceed such Lender's Revolving Loan Commitment. Borrower shall be entitled to
repay and reborrow Revolving Loans in accordance with the provisions hereof. In
addition to Revolving Loans, the Borrower may request, from on and after the
Closing Date but prior to the
26
Maturity Date, that (x) the Swing Line Lender extend to the Borrower Swing Rate
Loans and (y) the Agent issue Letters of Credit for the account of the Borrower,
in each case, subject to and upon the terms and conditions herein set forth.
Notwithstanding any provision of this Agreement to the contrary, (i) the sum of
(x) the aggregate principal amount of the Revolving Loans, plus (y) the
----
aggregate principal amount of the Swing Line Loans at any one time outstanding
plus (z) the aggregate L/C Outstandings shall not exceed the aggregate Revolving
----
Loan Commitments, and (ii) the aggregate principal amount of all Revolving Loans
plus Swing Line Exposure plus L/C Exposure of each Lender outstanding pursuant
to this Article II shall not at any time exceed the Revolving Loan Commitment of
such Lender.
(b) Amount and Terms of Loans. Each Revolving Loan shall, at the
-------------------------
option of Borrower, be made or continued as, or converted into, part of one or
more Borrowings that shall consist entirely of Base Rate Advances or Eurodollar
Advances. Each Swing Line Loan shall consist of Swing Rate Advances made by the
Swing Line Lender in accordance with the procedure described in Section 2.02.
Each Eurodollar Borrowing shall be in a principal amount of not less than
$500,000 or a greater integral multiple of $100,000, and each Base Rate
Borrowing shall be in a principal amount of not less than $500,000 or a greater
integral multiple of $100,000. At no time shall the aggregate number of
Eurodollar Borrowings outstanding under this Article II exceed five.
(c) Use of Proceeds. The proceeds of Revolving Loans and the Swing
---------------
Line Loans shall be used solely to (i) on the Closing Date, pay a portion of the
Purchase Price, (ii) pay certain fees and expenses related to the Transaction,
and (iii) on the Closing Date, repay certain Indebtedness of the Target pursuant
to the Existing Credit Agreement, and thereafter, shall be used for the working
capital needs of the Borrower and for other general corporate purposes of the
Borrower.
Section 2.02. Swing Line Subcommitment.
------------------------
(a) Swing Line Subcommitment. Subject to and upon the terms and
------------------------
conditions herein set forth, the Swing Line Lender severally establishes in
favor of the Borrower, from on and after the Closing Date, but prior to the
Maturity Date, its Swing Line Subcommitment. The Swing Line Lender, subject to
and upon the terms and conditions set forth herein, from time to time, shall
make available to the Borrower from time to time, Swing Line Loans which shall
not exceed in aggregate principal amount at any time outstanding the Swing Line
Subcommitment. Borrower shall maintain a concentration account in Borrower's
name (the "Master Account") with the Swing Line Lender into which Borrower's
--------------
daily receipts on its accounts receivables will be collected and from which
Borrower's operating expenses will be paid. If at 11:00 A.M. (local time for
the Swing Line Lender) on any Business Day the Master Account does not have a
positive collected balance (after crediting the proceeds of any short-term
investments in the name of Borrower to the Master Account and after debiting any
items presented for payment through the Master Account on such Business Day),
Borrower shall be deemed to have delivered a Notice of Swing Line Loan
requesting that the Swing Line Lender
27
make a Swing Rate Advance in an amount equal to the amount necessary to maintain
a positive collected balance in the Master Account (subject to the minimum
borrowing requirement set forth below) and hereby irrevocably directs the Swing
Line Lender to credit such Swing Rate Advance to the Master Account. Borrower
shall be deemed to have delivered to the Swing Line Lender a Notice of Swing
Line Loan immediately prior to each Swing Rate Advance made in accordance with
this subsection, with the Swing Line Lender to confirm such request and the
applicable Swing Rate in writing to the Borrower prior to 5:00 p.m. (Atlanta,
Georgia time) on such Business Day, with the failure of the Borrower to
controvert such request within two (2) Business Days' to be deemed to be
conclusive acceptance thereof (in the absence of manifest error). Borrower
shall be entitled to repay and reborrow Swing Line Loans in accordance with the
provisions hereof. Notwithstanding any provision of this Agreement to the
contrary, the sum of (x) the aggregate principal amount of the Revolving Loans,
plus (y) the aggregate principal amount of the Swing Line Loans at any one time
----
outstanding shall not exceed the aggregate Revolving Loan Commitments.
(b) Amount and Terms of Swing Line Loans. Each Swing Line Loan shall
------------------------------------
be outstanding hereunder as a Swing Rate Advance. Each Swing Rate Advance shall
be in a minimum amount of $1,000 and in integral multiples thereof.
(c) Use of Proceeds. The proceeds of Swing Line Loans shall be used
---------------
solely to support daily cash management needs of Borrower as set forth in
subsection (a) above.
(d) Repayment by Revolving Loans. If (i) any Swing Line Loan shall be
----------------------------
outstanding upon the occurrence of an Event of Default, or (ii) after giving
effect to any request for a Swing Line Loan or a Revolving Loan, the aggregate
principal amount of the Revolving Loans and Swing Line Loans outstanding to the
Swing Line Lender would exceed the Swing Line Lender's Revolving Loan
Commitment, then each Lender hereby agrees, upon request from the Swing Line
Lender, to make a Revolving Loan (which shall be initially funded as a Base Rate
Borrowing) in an amount equal to such Lender's Pro Rata Share of the outstanding
principal amount of the Swing Line Loans (the "Refunded Swing Line Loans")
-------------------------
outstanding on the date such notice is given. On or before 11:00 a.m. (local
time for the Agent) on the first Business Day following receipt by each Lender
of a request to make Revolving Loans as provided in the preceding sentence, each
such Lender (other than the Swing Line Lender) shall deposit in an account
specified by the Agent to the Lenders from time to time the amount so requested
in same day funds, whereupon such funds shall be immediately delivered to the
Swing Line Lender (and not the Borrower) and applied to repay the Refunded Swing
Line Loans. On the day such Revolving Loans are made, the Swing Line Lender's
Pro Rata Share of the Refunded Swing Line Loans shall be deemed to be paid with
the proceeds of the Revolving Loans made by the Swing Line Lender. Upon the
making of any Revolving Loan pursuant to this clause, the amount so funded shall
become due under such Lender's Revolving Note and shall no longer be owed under
the Swing Line Note. Each Lender's obligation to make the Revolving Loans
referred to in this clause shall be absolute and unconditional and shall not be
affected by any circumstance, including, without limitation, (i) any setoff,
counterclaim, recoupment, defense or other right
28
which such Lender may have against the Swing Line Lender, the Borrower or any
other Person for any reason whatsoever; (ii) the occurrence or continuance of
any Default or Event of Default; (iii) any adverse change in the condition
(financial or otherwise) of the Borrower or any other Credit Party; (iv) the
acceleration or maturity of any Loans or the termination of the Revolving Loan
Commitments after the making of any Swing Line Loan; (v) any breach of this
Agreement by the Borrower or any other Lender; or (vi) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.
(e) Purchase of Participations. In the event that (i) the Parent, the
--------------------------
Borrower or any Subsidiary is subject to any bankruptcy or insolvency
proceedings as provided in Section 8.07 or (ii) if the Swing Line Lender
otherwise requests, each Lender shall acquire without recourse or warranty an
undivided participation interest equal to such Lender's Pro Rata Share of the
Revolving Loan Commitments of any Swing Line Loan otherwise required to be
repaid by such Lender pursuant to the preceding clause by paying to the Swing
Line Lender on the date on which such Lender would otherwise have been required
to make a Revolving Loan in respect of such Swing Line Loan pursuant to the
preceding clause, in same day funds, an amount equal to such Lender's Pro Rata
Share of such Swing Line Loan, and no Revolving Loans shall be made by such
Lender pursuant to the preceding clause. From and after the date on which any
Lender purchases an undivided participation interest in a Swing Line Loan
pursuant to this clause, the Swing Line Lender shall distribute to such Lender
(appropriately adjusted, in the case of interest payments, to reflect the period
of time during which such Lender's participation interest is outstanding and
funded) its ratable amount of all payments of principal and interest in respect
of such Swing Line Loan in like funds as received; provided, however, that in
-------- -------
the event such payment received by the Swing Line Lender is required to be
returned to the Borrower, such Lender shall return to the Swing Line Lender the
portion of any amounts which such Lender had received from the Swing Line Lender
in like funds.
(f) Swing Line Loans Following Notice of Event of Default.
-----------------------------------------------------
Notwithstanding the foregoing provisions of this Section 2.02, no Lender shall
be required to make a Revolving Loan to Borrower for the purpose of refunding a
Refunded Swing Line Loan pursuant to Section 2.02(d) above or to purchase a
participating interest in a Swing Line Loan pursuant to Section 2.02(e) above if
a Default or Event of Default has occurred and is continuing, and, prior to the
making by the Swing Line Lender of such Swing Line Loan, the Swing Line Lender
had received written notice from the Borrower or any Lender specifying that such
Default or Event of Default had occurred and was continuing (and identifying the
same as a Default or Event of Default hereunder).
Section 2.03. Notes; Repayment of Principal; Extension of Revolving Loan
----------------------------------------------------------
Commitments.
-----------
(a) The Borrower's obligations to pay the principal of, and interest
on, the Revolving Loans to each Lender shall be evidenced by the records of the
Agent and such Lender
29
and by the Revolving Note payable to such Lender (or the assignor of such
Lender) in the amount of such Lender's Revolving Loan Commitment completed in
conformity with this Agreement.
(b) The Borrower's obligations to pay the principal of, and interest
on, the Swing Rate Loans to the Swing Line Lender shall be evidenced by the
records of the Swing Line Lender and the Swing Line Note payable to such Lender
(or the assignor of such Lender) completed in conformity with this Agreement.
(c) All Borrowings outstanding under the Notes shall be due and
payable in full on the Maturity Date. The Borrower shall be required to provide
cash collateral for all Letters of Credit outstanding on the Maturity Date as
provided in Section 2.07(b).
(d) The Borrower may, by written notice to the Agent (which shall
promptly deliver a copy to each of the Lenders), given not less than forty-five
(45) days prior to the Maturity Date then in effect, request that the Lenders
extend the then scheduled Maturity Date (the "Existing Date") for an additional
-------------
one-year period. Each Lender shall, by notice to the Borrower and the Agent
given within thirty (30) days after receipt of such request, advise the Borrower
and the Agent whether or not such Lender consents in its sole discretion, to the
extension request (and any Lender which does not respond during such 30-day
period shall be deemed to have advised the Borrower and the Agent that it will
not agree to such extension). In the event that all of the Lenders shall have
agreed to extend their respective Commitments, the Maturity Date shall be deemed
to have been extended, effective as of the Existing Date, to the date which is
one year thereafter.
Section 2.04. Voluntary Reduction of Commitments. Upon at least three (3)
----------------------------------
Business Days' prior telephonic notice (promptly confirmed in writing) to the
Agent, Borrower shall have the right, without premium or penalty, to terminate
the unutilized Revolving Loan Commitments, in part or in whole, provided that
(i) any such termination shall apply to proportionately and permanently reduce
the Revolving Loan Commitments of each of the Lenders, and (ii) any partial
termination pursuant to this Section 2.04 shall be in an amount of at least
$500,000 and integral multiples of $500,000. Unless otherwise specified by the
Borrower in the applicable notice, the Swing Line Subcommitment and the L/C
Subcommitment shall not be reduced by any such reduction unless and until the
aggregate Revolving Loan Commitments are reduced to an amount less than the
Swing Line Subcommitment and the L/C Subcommitment in which case the Swing Line
Subcommitment and the L/C Subcommitment shall be reduced to such amount.
Section 2.05. L/C Subcommitment. Subject to, and upon the terms and
-----------------
conditions, hereof (including the limitations of Section 2.01) the Borrower may
request, in accordance with the provisions of this Section 2.05 and Section
2.06, that on and after the Closing Date, that the Agent issue a Letter or
Letters of Credit for the account of the Borrower; provided that (i) no Letter
--------
of Credit shall have an expiration date that is later than five (5) days prior
to the Maturity Date; (ii) each Letter of Credit issued by the Agent shall be in
a stated amount of at least $25,000; (iii) the Borrower shall not request that
the Agent issue any Letter of Credit, if, after
30
giving effect to such issuance, the aggregate L/C Outstandings would exceed the
L/C Subcommitment.
Section 2.06. Notice of Issuance of Letter of Credit; Agreement to Issue.
----------------------------------------------------------
(a) Whenever the Borrower desires the issuance of a Letter of Credit,
it shall, in addition to any application and documentation procedures required
by the Agent for the issuance of such Letter of Credit, deliver to the Agent a
written notice no later than 11:00 A.M. (Atlanta, Georgia time) at least five
(5) days in advance of the proposed date of issuance. Each such notice shall
specify (i) the proposed date of issuance (which shall be a Business Day); (ii)
the face amount of the Letter of Credit; (iii) the expiration date of the Letter
of Credit; and (iv) the name and address of the beneficiary with respect to such
Letter of Credit and shall attach a precise description of the documentation and
a verbatim text of any certificate to be presented by the beneficiary of such
Letter of Credit which would require the Agent to make payment under the Letter
of Credit, provided that the Agent may require changes in any such documents and
--------
certificates in accordance with its customary letter of credit practices, and
provided further, that no Letter of Credit shall require payment against a
-------- -------
conforming draft to be made thereunder on the same Business Day that such draft
is presented if such presentation is made after 11:00 A.M. (Atlanta, Georgia
time). In determining whether to pay under any Letter of Credit, the Agent
shall be responsible only to determine that the documents and certificate
required to be delivered under its Letter of Credit have been delivered, and
that they comply on their face with the requirements of the Letter of Credit.
Promptly after receiving the notice of issuance of a Letter of Credit, the Agent
shall notify each Lender of such Lender's respective participation therein,
determined in accordance with its respective Pro Rata Share as determined on the
date of the issuance of such Letter of Credit.
(b) The Agent agrees, subject to the terms and conditions set forth in
this Agreement, to issue for the account of the Borrower a Letter of Credit in a
face amount equal to the face amount requested under paragraph (a) above,
following its receipt of a notice and the application and other documents
required by Section 2.06(a). Immediately upon the issuance of each Letter of
Credit, each Lender shall be deemed to, and hereby agrees to, have irrevocably
purchased from the Agent a participation in such Letter of Credit and any
drawing thereunder in an amount equal to such Lender's Pro Rata Share of such
Letter of Credit multiplied by the face amount of such Letter of Credit.
Section 2.07. Payment of Amounts drawn under Letter of Credit.
------------------------------------------------
(a) In the event of any request for a drawing under any Letter of
Credit by the beneficiary thereof, the Agent shall notify the Borrower and the
Lenders on or before the date on which the Agent intends to honor such drawing,
and the Borrower shall reimburse the Agent on the day on which such drawing is
honored in an amount, in same day funds, equal to the amount of such drawing,
provided that anything contained in this Agreement to the contrary
--------
31
notwithstanding, unless the Borrower shall have notified the Agent prior to
11:00 A.M. (Atlanta, Georgia time) on the Business Day immediately prior to the
date on which such drawing is honored, that the Borrower intends to reimburse
the Agent for the amount of such drawing in funds other than the proceeds of
Revolving Loans, the Borrower shall be deemed to have timely given a Notice of
Borrowing to the Agent requesting Revolving Loans which are Base Rate Advances
on the date on which such drawing is honored in an amount equal to the amount of
such drawing, and the Lenders shall by 1:00 P.M. (Atlanta, Georgia time) on the
date of such drawing, make Revolving Loans which are Base Rate Advances in the
amount of such drawing, the proceeds of which shall be applied directly by the
Agent to reimburse the Agent for the amount of such drawing, provided that for
--------
the purposes solely of such Borrowing, the conditions and precedents set forth
in Sections 4.01 and 4.02 hereof shall not be applicable, and provided further
----------------
that if for any reason proceeds of the Revolving Loans are not received by the
Agent on such date in the amount equal to the amount of such drawing, the
Borrower shall reimburse the Agent on the Business Day immediately following the
date of such drawing in an amount, in Dollars and immediately available funds,
equal to the excess of the amount of such drawing over the amount of such
Revolving Loans, if any, which are so received, plus accrued interest on the
amount at the applicable rate of interest for Base Rate Advances.
(b) Notwithstanding any provision of this Agreement to the contrary,
to the extent that any Letter of Credit or portion thereof remains outstanding
on the Maturity Date, the parties hereby agree that the beneficiary or
beneficiaries thereof shall be deemed to have made a drawing of all available
amounts pursuant to such Letters of Credit on the Maturity Date, which amounts
shall be reimbursed to the Agent as set forth above and thereafter held by the
Agent as cash collateral for its remaining obligations pursuant to such Letters
of Credit in the L/C Cash Collateral Account.
Section 2.08. Payment by Lenders. In the event that the Borrower shall
------------------
fail to reimburse the Agent as provided in Section 2.07 by borrowing Revolving
Loans, or otherwise providing an amount equal to the amount of any drawing
honored by the Agent pursuant to any Letter of Credit issued by it, the Agent
shall promptly notify each Lender of the unreimbursed amount of such drawing and
of such Lender's respective participation therein. Each Lender shall make
available to the Agent an amount equal to its respective participation, in
Dollars and in immediately available funds, at the office of the Agent specified
in such notice not later than 1:00 P.M. (Atlanta, Georgia time) on the Business
Day after the date notified by the Agent. In the event that any such Lender
fails to make available to the Agent the amount of such Lender's participation
in such Letter of Credit, the Agent shall be entitled to recover such amount on
demand from such Lender together with interest as provided for in Section
3.02(c). The Agent shall distribute to each other Lender which has paid all
amounts payable under this Section with respect to any Letter of Credit, such
Lender's Pro Rata Share of all payments received by the Agent from the Borrower
in reimbursement of drawings honored by the Agent under such Letter of Credit
when such payments are received.
32
Section 2.09. Obligations Absolute. The obligation of the Borrower to
--------------------
reimburse the Agent for drawings made under Letters of Credit issued for the
account of the Borrower and the Lenders' obligation to honor their
participations purchased therein shall be unconditional and irrevocable and
shall be paid strictly in accordance with the terms of this Agreement under all
circumstances, including without limitation, the following circumstances:
(a) Any lack of validity or enforceability of any Letter of Credit;
(b) The existence of any claim, set-off, defense or other right which the
Borrower or any Subsidiary or Affiliate of the Borrower may have at any time
against a beneficiary or any transferee of any Letter of Credit (or any Persons
or entities for whom any such beneficiary or transferee may be acting), any
Lender or any other Person, whether in connection with this Agreement, the
transactions contemplated herein or any unrelated transaction (including without
limitation any underlying transaction between the Borrower or any of its
Subsidiaries and Affiliates and the beneficiary for which such Letter of Credit
was procured); provided that nothing in this Section shall affect the right of
--------
the Borrower to seek relief against any beneficiary, transferee, Lender or any
other Person in any action or proceeding or to bring a counterclaim in any suit
involving such Persons;
(c) Any draft, demand, certificate or any other document presented under
any Letter of Credit proving to be forged, fraudulent or invalid in any respect
or any statement therein being untrue or inaccurate in any respect;
(d) Payment by the Agent under any Letter of Credit against presentation of
a demand, draft or certificate or other document which does not comply with the
terms of such Letter of Credit;
(e) Any other circumstance or happening whatsoever which is similar to any
of the foregoing; or
(f) the fact that a Default or an Event of Default shall have occurred and
be continuing.
Nothing in this Section 2.09 shall prevent an action against the Agent for its
gross negligence or willful misconduct in honoring drafts under the Letters of
Credit or otherwise.
Section 2.10. Indemnification; Nature of Agent's Duties.
------------------------------------------
(a) In addition to amounts payable elsewhere provided in this
Agreement, without duplication, the Borrower hereby agrees to protect,
indemnify, pay and save the Agent and each Lender harmless from and against any
and all claims, demands, liabilities, damages, losses, costs, charges and
reasonable expenses (including reasonable attorney's fees and
33
disbursements) which the Agent or any Lender may incur or be subject to as a
consequence, direct or indirect, of (i) the issuance of any Letter of Credit for
the account of the Borrower, other than as a result of the gross negligence or
willful misconduct of the Agent; (ii) the failure of the Agent to honor a
drawing under any Letter of Credit due to any act or omission (whether rightful
or wrongful) of any present or future de jure or de facto government or
------- --------
governmental authority; or (iii) any confirmation of any Letter of Credit
obtained by the Agent with the consent of the Borrower.
(b) Notwithstanding any other provision contained in this Agreement,
the Agent shall not be obligated to issue any Letter of Credit, nor shall any
Lender be obligated to purchase its participation in any Letter of Credit to be
issued hereunder, if the issuance of such Letter of Credit or purchase of such
participation shall have become unlawful or prohibited by compliance by Agent or
such Lender in good faith with any law, governmental rule, guideline, request,
order, injunction, judgment or decree (whether or not having the force of law);
provided that in the case of the obligation of a Lender to purchase such
--------
participation, such Lender shall have notified the Agent to such effect in
writing at least ten (10) Business Days' prior to the issuance thereof by the
Agent, which notice shall relieve the Agent of its obligation to issue such
Letter of Credit pursuant to the L/C Subcommitment.
ARTICLE III.
GENERAL LOAN TERMS
------------------
Section 3.01. Funding Notices.
---------------
(a) (i) Whenever Borrower desires to make a Borrowing with respect
to the Revolving Loan Commitments (other than one resulting from a conversion or
continuation pursuant to Section 3.01(b)(i)), it shall give the Agent prior
written notice (or telephonic notice promptly confirmed in writing) of such
Borrowing (a "Notice of Borrowing"), such Notice of Borrowing to be given prior
-------------------
to 11:00 A.M. (local time for the Agent) at the Payment Office of the Agent (x)
on the Business Day which is the requested date of such Borrowing in the case of
Base Rate Advances, and (y) three Business Days prior to the requested date of
such Borrowing in the case of Eurodollar Advances. Notices received after 11:00
A.M. shall be deemed received on the next Business Day. Each Notice of
Borrowing shall be irrevocable and shall specify the aggregate principal amount
of the Borrowing, the date of Borrowing (which shall be a Business Day), and
whether the Borrowing is to consist of Base Rate Advances or Eurodollar Advances
and (in the case of Eurodollar Advances) the Interest Period to be applicable
thereto.
(ii) The Borrower shall be deemed to have requested a Swing Rate
Advance with respect to the Swing Line Subcommitment as set forth in Section
2.02(a) above (each, a "Notice of Swing Line Loan"). The Swing Line Lender
-------------------------
shall notify the Borrower of the Swing Rate applicable to each Swing Rate
Advance for the Interest Period by the end of each Business
34
Day and the failure of the Borrower to contest such rate within two (2) Business
Days shall be deemed to be conclusive evidence of the Borrower's acceptance
thereof.
(b) (i) Whenever Borrower desires to convert all or a portion of an
outstanding Borrowing under the Revolving Loan Commitments consisting of Base
Rate Advances into a Borrowing consisting of Eurodollar Advances, or to continue
outstanding a Borrowing consisting of Eurodollar Advances for a new Interest
Period, it shall give the Agent at least three Business Days' prior written
notice (or telephonic notice promptly confirmed in writing) of each such
Borrowing to be converted into or continued as Eurodollar Advances. Such notice
(a "Notice of Conversion/Continuation") shall be given prior to 11:00 A.M.
---------------------------------
(local time for the Agent) on the date specified at the Payment Office of the
Agent. Each such Notice of Conversion/Continuation shall be irrevocable and
shall specify the aggregate principal amount of the Advances to be converted or
continued, the date of such conversion or continuation and the Interest Period
to be applicable thereto. If, upon the expiration of any Interest Period in
respect of any Borrowing consisting of Eurodollar Advances, Borrower shall have
failed to either deliver the Notice of Conversion/Continuation or repay such
Borrowing, Borrower shall be deemed to have elected to convert or continue such
Borrowing to a Borrowing consisting of Base Rate Advances. So long as any
Default or Event of Default shall have occurred and be continuing, no Borrowing
may be converted into or continued as (upon expiration of the current Interest
Period) Eurodollar Advances unless the Agent and each of the Lenders shall have
otherwise consented in writing. No conversion of any Borrowing of Eurodollar
Advances shall be permitted except on the last day of the Interest Period in
respect thereof.
(ii) Upon the expiration of the applicable Interest Period with
respect to any Swing Line Loan, the Borrower shall repay such Swing Line Loan to
the Swing Line Lender, and in the event that the other Lenders have purchased a
participation in such Swing Line Loan pursuant to Section 2.02 hereof, the Swing
Line Lender shall distribute such payments pro rata amongst the Lenders
participating therein.
(c) Without in any way limiting Borrower's obligation to confirm in
writing any telephonic notice, the Agent and the Swing Line Lender may act
without liability upon the basis of telephonic notice believed by the Agent or
the Swing Line Lender in good faith to be from Borrower prior to receipt of
written confirmation. In each such case, Borrower hereby waives the right to
dispute the Agent's or the Swing Line Lender's record of the terms of such
telephonic notice, absent manifest error.
(d) The Agent shall promptly give each Lender notice by telephone
(confirmed in writing) or by telex, telecopy or facsimile transmission of the
matters covered by the notices given to the Agent pursuant to this Section 3.01
with respect to the Revolving Loan Commitments.
35
Section 3.02. Disbursement of Funds.
---------------------
(a) No later than 1:00 p.m. (local time for the Agent) on the date of
each Borrowing pursuant to the Revolving Loan Commitments (other than one
resulting from a conversion or continuation pursuant to Section 3.01(b)(i)),
each Lender will make available its Pro Rata Share of the amount of such
Borrowing in immediately available funds at the Payment Office of the Agent.
The Agent will make available to Borrower the aggregate of the amounts (if any)
so made available by the Lenders to the Agent in a timely manner by crediting
such amounts to Borrower's demand deposit account maintained with the Agent or
at Borrower's option, by effecting a wire transfer of such amounts to an account
specified by the Borrower, by the close of business on such Business Day. In
the event that the Lenders do not make such amounts available to the Agent by
the time prescribed above, but such amount is received later that day, such
amount may be credited to Borrower in the manner described in the preceding
sentence on the next Business Day (with interest on such amount to begin
accruing hereunder on such next Business Day).
(b) No later than 3:00 p.m. (local time for the Swing Line Lender) on
the date of each Swing Line Loan, the Swing Line Lender will make available the
amount of such Swing Line Loan in immediately available funds by crediting such
amount to the Master Account.
(c) Unless the Agent shall have been notified by any Lender prior to
the date of a Borrowing that such Lender does not intend to make available to
the Agent such Lender's portion of the Borrowing to be made on such date, the
Agent may assume that such Lender has made such amount available to the Agent on
such date and the Agent may make available to Borrower a corresponding amount.
If such corresponding amount is not in fact made available to the Agent by such
Lender on the date of Borrowing, the Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with interest at the
Federal Funds Rate. If such Lender does not pay such corresponding amount
forthwith upon the Agent's demand therefor, the Agent shall promptly notify
Borrower, and Borrower shall immediately pay such corresponding amount to the
Agent together with interest at the rate specified for the Borrowing which
includes such amount paid and any amounts due under Section 3.12 hereof. Nothing
in this subsection shall be deemed to relieve any Lender from its obligation to
fund its Commitments or its obligations pursuant to Section 2.02 hereunder or to
prejudice any rights which Borrower may have against any Lender as a result of
any default by such Lender hereunder.
(d) All Borrowings under the Commitments (other than Swing Line Loans)
shall be loaned by the Lenders on the basis of their Pro Rata Share of the
Commitments. No Lender shall be responsible for any default by any other Lender
in its obligations hereunder, and each Lender shall be obligated to make the
Loans provided to be made by it hereunder, regardless of the failure of any
other Lender to fund its Commitments hereunder.
36
Section 3.03. Interest.
--------
(a) Borrower agrees to pay interest in respect of all unpaid principal
amounts of the Revolving Loans from the respective dates such principal amounts
were advanced to maturity (whether by acceleration, notice of prepayment or
otherwise) at rates per annum equal to the applicable rates indicated below:
(i) For Base Rate Advances--The Base Rate in effect from time to time
plus the Applicable Margin; and
----
(ii) For Eurodollar Advances--The relevant Adjusted LIBO Rate for the
Interest Period plus the Applicable Margin.
----
(b) Borrower agrees to pay interest in respect of all unpaid principal
amounts of the Swing Line Loans made to Borrower from the respective dates such
principal amounts were advanced to maturity (whether by acceleration, notice of
prepayment or otherwise) at the Swing Rate agreed to by the Borrower and the
Swing Line Lender for each such Swing Line Loan.
(c) Overdue principal and, to the extent not prohibited by applicable
law, overdue interest, in respect of the Loans, and all other overdue amounts
owing hereunder, shall bear interest from each date that such amounts are
overdue:
(i) in the case of overdue principal and interest with respect to all
Loans outstanding as Eurodollar Advances and all Swing Line Loans, at the
greater of (A) the rate otherwise applicable for the then current Interest
Period plus an additional two percent (2.0%) per annum or (B) the rate in effect
----
for Base Rate Advances plus an additional two percent (2.0%) per annum; and
----
(ii) in the case of overdue principal and interest with respect to all
other Loans outstanding as Base Rate Advances and all other Obligations
hereunder (other than Loans), at a rate equal to the applicable Base Rate plus
----
an additional two percent (2.0%) per annum.
(d) Interest on each Loan shall accrue from and including the date of
such Loan to but excluding the date of any repayment thereof; provided that, if
--------
a Loan is repaid on the same day made, one day's interest shall be paid on such
Loan. Interest on all outstanding Base Rate Advances shall be payable quarterly
in arrears on the last day of each calendar quarter, commencing on December 31,
1997. Interest on all outstanding Eurodollar Advances shall be payable on the
last day of each Interest Period applicable thereto, and, in the case of
Eurodollar Advances having an Interest Period in excess of three months, on each
three month anniversary of the initial date of such Interest Period. Interest on
all outstanding Swing Rate Advances shall
37
be payable monthly in arrears on the last day of each calendar month, commencing
on October 31, 1997. Interest on all Loans shall be payable on any conversion
of any Advances comprising such Loans into Advances of another Type, prepayment
(on the amount prepaid), at maturity (whether by acceleration, notice of
prepayment or otherwise) and, after maturity, on demand.
(e) The Agent, upon determining the Adjusted LIBO Rate for any
Interest Period, shall promptly notify by telephone (confirmed in writing) or in
writing Borrower and the other Lenders of such Adjusted LIBO Rate. Any such
determination shall, absent manifest error, be final, conclusive and binding for
all purposes.
Section 3.04. Interest Periods.
----------------
(a) In connection with the making or continuation of, or conversion
into, each Borrowing of Eurodollar Advances, Borrower shall select an Interest
Period to be applicable to such Eurodollar Advances, which Interest Period shall
be either a 1, 2, 3 or 6 month period.
(b) In connection with the making or continuation of each Swing Line
Loan, Borrower shall be deemed to have requested an Interest Period to be
applicable to such Swing Line Loan for a period equal to one (1) Business Day.
(c) Notwithstanding paragraphs (a) and (b) of this Section 3.04:
(i) The initial Interest Period for any Borrowing of Eurodollar
Advances shall commence on the date of such Borrowing (including the date of any
conversion from a Borrowing consisting of Base Rate Advances) and each Interest
Period occurring thereafter in respect of such Borrowing shall commence on the
day on which the next preceding Interest Period expires;
(ii) If any Interest Period would otherwise expire on a day which is
not a Business Day, such Interest Period shall expire on the next succeeding
Business Day, provided that if any Interest Period in respect of Eurodollar
--------
Advances would otherwise expire on a day that is not a Business Day but is a day
of the month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day;
(iii) Any Interest Period in respect of Eurodollar Advances which
begins on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period shall, subject to part (iv)
below, expire on the last Business Day of such calendar month; and
(iv) No Interest Period with respect to the Loans shall extend beyond
the Maturity Date.
38
Section 3.05. Fees.
----
(a) Commitment Fee. Borrower shall pay to the Agent, for the ratable
--------------
benefit of each Lender, a commitment fee (the "Commitment Fee") for the period
--------------
commencing on the Closing Date to and including the Maturity Date, payable
quarterly in arrears on the last day of each calendar quarter, commencing on
December 31, 1997, and on the Maturity Date, equal to Applicable Commitment Fee
Rate per annum multiplied by the average daily unused portion of the Revolving
Loan Commitment of each Lender. For the purposes of computing the Commitment
Fee, in addition to the utilization by Revolving Loans, the Revolving Loan
Commitment of each Lender shall be deemed to be utilized by the amount of L/C
Exposure and Swing Line Loans extended by such Lender (or in which such Lender
has purchased a participation) but in no event shall the computation of any
other Lender's Commitment Fee be affected by the Swing Line Loans extended by
the Swing Line Lender unless and until a participation in such Swing Line Loans
is purchased by the other Lenders pursuant to Section 2.02(e) hereof.
(b) Letter of Credit Fee. The Borrower shall pay to the Agent, for
--------------------
the account of itself and the Lenders, a letter of credit fee equal to the
Applicable Margin for Eurodollar Advances multiplied by the average daily
aggregate L/C Exposure with respect to Letters of Credit (the "Letter of Credit
----------------
Fee"). The Letter of Credit Fee shall be payable by the Borrower quarterly, in
---
arrears, commencing on December 31, 1997 and continuing thereafter on the last
day of each succeeding calendar quarter and on the Maturity Date.
(c) Administrative Fees. The Borrower shall pay to the Agent an
-------------------
administrative fee in the amount and on the dates previously agreed in writing
by Borrower with the Agent.
Section 3.06. Voluntary Prepayments of Borrowings.
-----------------------------------
(a) Borrower may, at its option, prepay Borrowings consisting of Base
Rate Advances at any time in whole, or from time to time in part, in amounts
aggregating $100,000 or any greater integral multiple of $50,000, by paying the
principal amount to be prepaid together with interest accrued and unpaid thereon
to the date of prepayment. Borrowings consisting of Swing Rate Advances may be
prepaid at any time in whole, or from time to time in part, in amounts
aggregating $50,000 or any greater integral multiple of $10,000, by paying the
principal amount to be prepaid together with interest accrued and unpaid thereon
to the date of prepayment. Borrowings consisting of Eurodollar Advances may be
prepaid, at Borrower's option, in whole, or from time to time in part, in
amounts aggregating $100,000 or any greater integral multiple of $50,000, by
paying the principal amount to be prepaid, together with interest accrued and
unpaid thereon to the date of prepayment, and all compensation payments pursuant
to Section 3.12 if such prepayment is made on a date other than the last day of
an Interest Period applicable thereto. Each such optional prepayment shall be
applied in accordance with Section 3.06(c) below.
39
(b) Borrower shall give written notice (or telephonic notice confirmed
in writing) to the Agent of any intended prepayment of the Revolving Loans (i)
not less than one Business Day prior to any prepayment of Base Rate Advances and
(ii) not less than three Business Days prior to any prepayment of Eurodollar
Advances. Borrower shall give written notice (or telephonic notice confirmed in
writing) to the Agent of any intended prepayment of the Swing Line Loans not
less than one (1) Business Day prior to such prepayment of such Swing Line
Loans. Such notice, once given, shall be irrevocable. Upon receipt of such
notice of prepayment pursuant to the first sentence of this paragraph (b), the
Agent shall promptly notify each Lender of the contents of such notice and of
such Lender's Pro Rata Share of such prepayment. Upon receipt of any notice of
prepayment pursuant to the second sentence of this paragraph (b), the Agent
shall promptly notify each Lender participating in such Swing Line Loan of the
contents of such notice and of such Lender's Pro Rata Share of such prepayment.
(c) Borrower, when providing notice of prepayment pursuant to Section
3.06(b), may designate the Types of Advances and the specific Borrowing or
Borrowings which are to be prepaid, provided that (i) if any prepayment of
Eurodollar Advances made pursuant to a single Borrowing of the Revolving Loans
shall reduce the outstanding Advances made pursuant to such Borrowing to an
amount less than $500,000, such Borrowing shall immediately be converted into
Base Rate Advances; and (ii) each prepayment made pursuant to a single Borrowing
shall be applied pro rata among the Advances comprising such Borrowing. In the
absence of a designation by Borrower, the Agent shall, subject to the foregoing,
make such designation in its discretion but using reasonable efforts to avoid
funding losses to the Lenders pursuant to Section 3.12. All voluntary
prepayments shall be applied to the payment of interest before application to
principal.
Section 3.07. Payments, etc.
--------------
(a) Except as otherwise specifically provided herein, all payments
under this Agreement and the other Credit Documents shall be made without
defense, set-off or counterclaim to the Agent not later than 1:00 P.M. (local
time for the Agent) on the date when due and shall be made in Dollars in
immediately available funds at its Payment Office.
(b) (i) All such payments shall be made free and clear of and
without deduction or withholding for any Taxes in respect of this Agreement, the
Notes or other Credit Documents, or any payments of principal, interest, fees or
other amounts payable hereunder or thereunder (but excluding, except as provided
in paragraph (iii) hereof, any Taxes imposed on the overall net income of the
Lenders pursuant to the laws of the jurisdiction in which the principal
executive office or appropriate Lending Office of such Lender is located). If
any Taxes are so levied or imposed, Borrower agrees (A) to pay the full amount
of such Taxes, and such additional amounts as may be necessary so that every net
payment of all amounts due hereunder and under the Notes and other Credit
Documents, after withholding or deduction for or on account of any such Taxes
(including additional sums payable under this Section 3.07), will not be less
than the full amount provided for herein had no such deduction or withholding
been required, (B) to make
40
such withholding or deduction and (C) to pay the full amount deducted to the
relevant authority in accordance with applicable law. Borrower will furnish to
the Agent and each Lender, within 30 days after the date the payment of any
Taxes is due pursuant to applicable law, certified copies of tax receipts
evidencing such payment by Borrower. Borrower will indemnify and hold harmless
the Agent and each Lender and reimburse the Agent and each Lender upon written
request for the amount of any Taxes so levied or imposed and paid by the Agent
or Lender and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto, whether or not such Taxes were correctly or
illegally asserted. A certificate as to the amount of such payment by such
Lender or the Agent, absent manifest error, shall be final, conclusive and
binding for all purposes provided that the Agent and each Lender shall use
reasonable efforts to furnish Borrower notice of the imposition of any Taxes as
soon as practicable thereafter; provided, however, that no delay or failure to
-------- -------
furnish such notice shall in any event release or discharge Borrower from its
obligations to the Agent or such Lender pursuant to Section 3.07(b) or otherwise
result in any liability of the Agent or such Lender.
(ii) Each Lender that is organized under the laws of any jurisdiction
other than the United States of America or any State thereof (including the
District of Columbia) agrees to furnish to Borrower and the Agent, prior to the
time it becomes a Lender hereunder, two copies of either U.S. Internal Revenue
Service Form 4224 or U.S. Internal Revenue Service Form 1001 or any successor
forms thereto (wherein such Lender claims entitlement to complete exemption from
or reduced rate of U.S. Federal withholding tax on interest paid by Borrower
hereunder) and to provide to Borrower and the Agent a new Form 4224 or Form 1001
or any successor forms thereto if any previously delivered form is found to be
incomplete or incorrect in any material respect or upon the obsolescence of any
previously delivered form; provided, however, that no Lender shall be required
-------- -------
to furnish a form under this paragraph (ii) after the date that it becomes a
Lender hereunder if it is not entitled to claim an exemption from or a reduced
rate of withholding under applicable law.
(iii) Borrower shall also reimburse each Lender, upon written
request, for any Taxes imposed (including, without limitation, Taxes imposed on
the overall net income of such Lender or its applicable Lending Office pursuant
to the laws of the jurisdiction in which the principal executive office or the
applicable Lending Office of such Lender is located) as such Lender shall
determine are payable by such Lender in respect of amounts paid by or on behalf
of Borrower to or on behalf of such Lender pursuant to paragraph (i) hereof.
(c) Subject to Section 3.04(c)(ii), whenever any payment to be made
hereunder or under any Note 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 and, with respect to payments of principal, interest thereon shall
be payable at the applicable rate during such extension.
(d) All computations of interest and fees shall be made on the basis
of a year of 360 days for the actual number of days (including the first day but
excluding the last day)
41
occurring in the period for which such interest or fees are payable (to the
extent computed on the basis of days elapsed). Interest on Base Rate Advances
shall be calculated based on the Base Rate from and including the date of such
Loan to but excluding the date of the repayment or conversion thereof. Interest
on Eurodollar Advances and Swing Rate Advances shall be calculated as to each
Interest Period from and including the first day thereof to but excluding the
last day thereof. Each determination by the Agent of an interest rate or fee
hereunder shall be made in good faith and, except for manifest error, shall be
final, conclusive and binding for all purposes.
(e) Payment by the Borrower to the Agent in accordance with the terms
of this Agreement shall, as to the Borrower, constitute payment to the Lenders
under this Agreement.
Section 3.08. Interest Rate Not Ascertainable, etc. In the event that the
-------------------------------------
Agent shall have reasonably determined (which determination shall be made in
good faith and, absent manifest error, shall be final, conclusive and binding
upon all parties) that on any date for determining the Adjusted LIBO Rate for
any Interest Period, by reason of any changes arising after the date of this
Agreement affecting the London interbank market, or the Agent's position in such
market, adequate and fair means do not exist for ascertaining the applicable
interest rate on the basis provided for in the definition of Adjusted LIBO Rate,
then, and in any such event, the Agent shall forthwith give notice (by telephone
confirmed in writing) to Borrower and to the Lenders, of such determination and
a summary of the basis for such determination. Until the Agent notifies
Borrower that the circumstances giving rise to the suspension described herein
no longer exist, the obligations of the Lenders to make or permit portions of
the Revolving Loans to remain outstanding past the last day of the then current
Interest Periods as Eurodollar Advances shall be suspended, and such affected
Advances shall bear the same interest as Base Rate Advances.
Section 3.09. Illegality.
----------
(a) In the event that any Lender shall have reasonably determined
(which determination shall be made in good faith and, absent manifest error,
shall be final, conclusive and binding upon all parties) at any time that the
making or continuance of any Eurodollar Advance has become unlawful by
compliance by such Lender in good faith with any applicable law, governmental
rule, regulation, guideline or order (whether or not having the force of law and
whether or not failure to comply therewith would be unlawful), then, in any such
event, the Lender shall give prompt notice (by telephone confirmed in writing)
to Borrower and to the Agent of such determination and a summary of the basis
for such determination (which notice the Agent shall promptly transmit to the
other Lenders).
(b) Upon the giving of the notice to Borrower referred to in
subsection (a) above, (i) Borrower's right to request and such Lender's
obligation to make Eurodollar Advances shall be immediately suspended until such
time that the making or continuance of any Eurodollar Advance is no longer
unlawful, and such Lender shall make an Advance as part of the requested
Borrowing of Eurodollar Advances as a Base Rate Advance, which Base Rate Advance
shall, for
42
all other purposes, be considered part of such Borrowing, and (ii) if the
affected Eurodollar Advance or Advances are then outstanding, Borrower shall
immediately, or if permitted by applicable law, no later than the date permitted
thereby, upon at least one Business Day's written notice to the Agent and the
affected Lender, convert each such Advance into a Base Rate Advance or Advances,
provided that if more than one Lender is affected at any time, then all affected
Lenders must be treated the same pursuant to this Section 3.09(b).
Section 3.10. Increased Costs.
---------------
(a) If, by reason of (x) after the date hereof, the introduction of or
any change (including, without limitation, any change by way of imposition or
increase of reserve requirements) in or in the interpretation of any law or
regulation, or (y) the compliance with any guideline or request from any central
bank or other governmental authority or quasi-governmental authority exercising
control over banks or financial institutions generally made after the date
hereof (whether or not having the force of law):
(i) any Lender (or its applicable Lending Office) shall be subject to
any tax, duty or other charge with respect to its Eurodollar Advances or its
obligation to make Eurodollar Advances or the basis of taxation of payments to
any Lender of the principal of or interest on its Eurodollar Advances or its
obligation to make Eurodollar Advances shall have changed (except for changes in
the tax on the overall net income of such Lender or its applicable Lending
Office imposed by the jurisdiction in which such Lender's principal executive
office or applicable Lending Office is located); or
(ii) any reserve (including, without limitation, any imposed by the
Board of Governors of the Federal Reserve System), special deposit or similar
requirement against assets of, deposits with or for the account of, or credit
extended by, any Lender's applicable Lending Office shall be imposed or deemed
applicable or any other condition adversely affecting its Eurodollar Advances or
its obligation to make Eurodollar Advances shall be imposed on any Lender or its
applicable Lending Office or the London interbank market;
and as a result thereof there shall be any increase in the cost to such Lender
of agreeing to make or making, funding or maintaining Eurodollar Advances
(except to the extent already included in the determination of the applicable
Adjusted LIBO Rate for Eurodollar Advances) or its obligation to make Eurodollar
Advances, or there shall be a reduction in the amount received or receivable by
such Lender or its applicable Lending Office, then Borrower shall from time to
time (subject, in the case of certain Taxes, to the applicable provisions of
Section 3.07(b)), upon written notice from and demand by such Lender on Borrower
(with a copy of such notice and demand to the Agent), pay to the Agent for the
account of such Lender within five Business Days after the date of such notice
and demand, additional amounts sufficient to indemnify such Lender against such
increased cost. A certificate as to the amount of such increased cost,
submitted to
43
Borrower and the Agent by such Lender in good faith and accompanied by a
statement prepared by such Lender describing in reasonable detail the basis for
and calculation of such increased cost, shall, except for manifest error, be
final, conclusive and binding for all purposes.
(b) If any Lender shall advise the Agent that at any time it has
determined in good faith and in its reasonable judgment that, because of the
circumstances described in clauses (x) or (y) in Section 3.10(a) or any other
circumstances beyond such Lender's reasonable control arising after the date of
this Agreement affecting such Lender or the London interbank market or such
Lender's position in such market, the Adjusted LIBO Rate as determined by the
Agent will not adequately and fairly reflect the cost to such Lender of funding
its Eurodollar Advances, then, and in any such event:
(i) the Agent shall forthwith give notice (by telephone confirmed in
writing) to Borrower and to the other Lenders of such advice;
(ii) Borrower's right to request and such Lender's obligation to make
or permit portions of the Loans to remain outstanding past the last day of the
then current Interest Periods as Eurodollar Advances shall be immediately
suspended until such time as the Adjusted LIBO Rate, as determined by the Agent,
will adequately and fairly reflect the cost to such Lender of funding its
Eurodollar Advances; and
(iii) such Lender shall make a Loan as part of the requested
Borrowing of Eurodollar Advances as a Base Rate Advance, which such Base Rate
Advance shall, for all other purposes, be considered part of such Borrowing.
Section 3.11. Lending Offices.
---------------
(a) Each Lender agrees that, if requested by Borrower, it will use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate an alternate Lending Office with respect to any of its Eurodollar
Advances affected by the matters or circumstances described in Sections 3.07(b),
3.08, 3.09 or 3.10 to reduce the liability of Borrower or avoid the results
provided thereunder, so long as such designation is not disadvantageous to such
Lender as reasonably determined by such Lender, which determination shall be
conclusive and binding on all parties hereto. Nothing in this Section 3.11
shall affect or postpone any of the obligations of Borrower or any right of any
Lender provided hereunder.
(b) If any Lender that is organized under the laws of any jurisdiction
other than the United States of America or any State thereof (including the
District of Columbia) issues a public announcement with respect to the closing
of its lending offices in the United States such that any withholdings or
deductions and additional payments with respect to Taxes may be required to be
made by Borrower thereafter pursuant to Section 3.07(b), such Lender shall use
reasonable efforts to furnish Borrower notice thereof as soon as practicable
thereafter; provided, however, that no delay in furnishing such notice shall in
-------- -------
any event release or discharge Borrower
44
from its obligations to such Lender pursuant to Section 3.07(b) or otherwise
result in any liability of such Lender.
Section 3.12. Funding Losses. Borrower shall compensate each Lender, upon
--------------
its written request to Borrower (which request shall set forth the basis for
requesting such amounts in reasonable detail and which request shall be made in
good faith and, absent manifest error, shall be final, conclusive and binding
upon all of the parties hereto), for all losses, expenses and liabilities
(including, without limitation, any interest paid by such Lender to lenders of
funds borrowed by it to make or carry its Eurodollar Advances to the extent not
recovered by such Lender in connection with the re-employment of such funds but
excluding loss of anticipated profits), which the Lender may sustain: (i) if
for any reason (other than a default by such Lender) a borrowing of, or
conversion to or continuation of, Eurodollar Advances to Borrower does not occur
on the date specified therefor in a Notice of Borrowing, a Notice of Conversion/
Continuation (whether or not withdrawn), (ii) if any repayment (including
mandatory prepayments and any conversions pursuant to Section 3.09(b)) of any
Eurodollar Advances to Borrower occurs on a date which is not the last day of an
Interest Period applicable thereto, or (iii), if, for any reason, Borrower
defaults in its obligation to repay its Eurodollar Advances when required by the
terms of this Agreement.
Section 3.13. Assumptions Concerning Funding of Eurodollar Advances.
-----------------------------------------------------
Calculation of all amounts payable to a Lender under this Article III shall be
made as though that Lender had actually funded its relevant Eurodollar Advances
through the purchase of deposits in the relevant market bearing interest at the
rate applicable to such Eurodollar Advances in an amount equal to the amount of
the Eurodollar Advances and having a maturity comparable to the relevant
Interest Period and through the transfer of such Eurodollar Advances from an
offshore office of that Lender to a domestic office of that Lender in the United
States of America; provided, however, that each Lender may fund each of its
-------- --------
Eurodollar Advances in any manner it sees fit and the foregoing assumption shall
be used only for calculation of amounts payable under this Article III.
Section 3.14. Apportionment of Payments. Aggregate principal and interest
-------------------------
payments in respect of Revolving Loans and Commitment Fees shall be apportioned
among all outstanding Revolving Loan Commitments and Revolving Loans to which
such payments relate, proportionately to the Lenders' respective Pro Rata Share
of such Revolving Loan Commitments and outstanding Revolving Loans. Each
payment of principal and interest of any Swing Line Loan shall be payable solely
to the Swing Line Lender except as provided in Section 2.02(d) and (e). The
Agent shall promptly distribute to each Lender at its payment office set forth
beside its name on the appropriate signature page hereof or such other address
as any Lender may request its share of all such payments received by the Agent.
Section 3.15. Sharing of Payments, Etc. If any Lender shall obtain any
-------------------------
payment or reduction (including, without limitation, any amounts received as
adequate protection of a deposit treated as cash collateral under the Bankruptcy
Code) of the Obligations (whether voluntary, involuntary, through the exercise
of any right of set-off, or otherwise) in excess of its
45
Pro Rata Share of payments or reductions on account of such obligations obtained
by all the Lenders (other than payments of principal, interest and fees with
respect to the Swing Line Loans which are payable solely to the Swing Line
Lender or Lenders participating therein pursuant to Section 2.02(d) and (e)),
such Lender shall forthwith (i) notify each of the other Lenders and Agent of
such receipt, and (ii) purchase from the other Lenders such participations in
the affected obligations as shall be necessary to cause such purchasing Lender
to share the excess payment or reduction, net of costs incurred in connection
therewith, ratably with each of them, provided that if all or any portion of
such excess payment or reduction is thereafter recovered from such purchasing
Lender or additional costs are incurred, the purchase shall be rescinded and the
purchase price restored to the extent of such recovery or such additional costs,
but without interest unless the Lender obligated to return such funds is
required to pay interest on such funds. Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to this Section 3.15
may, to the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Lender were the direct creditor of Borrower in the amount of such
participation.
Section 3.16. Capital Adequacy. Without limiting any other provision of
----------------
this Agreement, in the event that any Lender shall have reasonably determined in
good faith that any law, treaty, governmental (or quasi-governmental) rule,
regulation, guideline or order regarding capital adequacy not currently in
effect or fully applicable as of the Closing Date, or any change therein or in
the interpretation or application thereof, or compliance by such Lender with any
request or directive regarding capital adequacy not currently in effect or fully
applicable as of the Closing Date (whether or not having the force of law and
whether or not failure to comply therewith would be unlawful) from a central
bank or governmental authority or body having jurisdiction, does or shall have
the effect of reducing the rate of return on such Lender's capital as a
consequence of its obligations hereunder to a level below that which such Lender
could have achieved but for such law, treaty, rule, regulation, guideline or
order, or such change or compliance (taking into consideration such Lender's
policies with respect to capital adequacy) by an amount reasonably deemed by
such Lender to be material, then within ten (10) Business Days after written
notice and demand by such Lender (with copies thereof to the Agent), Borrower
shall from time to time pay to such Lender additional amounts sufficient to
compensate such Lender for such reduction (but, in the case of outstanding Base
Rate Advances, without duplication of any amounts already recovered by such
Lender by reason of an adjustment in the applicable Base Rate). Each
certificate as to the amount payable under this Section 3.16 (which certificate
shall set forth the basis for requesting such amounts in reasonable detail),
submitted to Borrower by any Lender in good faith, shall, absent manifest error,
be final, conclusive and binding for all purposes.
Section 3.17. Limitation on Certain Payment Obligations.
-----------------------------------------
(a) Each Lender or Agent shall make written demand on Borrower for
indemnification or compensation pursuant to Section 3.07 no later than 180 days
after the earlier of (i) the date on which such Lender or Agent makes payment of
such Taxes, and (ii) the date on
46
which the relevant taxing authority or other governmental authority makes
written demand upon such Lender or Agent for payment of such Taxes.
(b) Each Lender or Agent shall make written demand on Borrower for
indemnification or compensation pursuant to Sections 3.10 and 3.12 no later
than 180 days after the event giving rise to the claim for indemnification or
compensation occurs.
(c) Each Lender or Agent shall make written demand on Borrower for
indemnification or compensation pursuant to Section 3.16 no later than 180 days
after such Lender or Agent receives actual notice or obtains actual knowledge of
the promulgation of a law, rule, order or interpretation or occurrence of
another event giving rise to a claim pursuant to such sections.
(d) In the event that the Lenders or Agent fail to give Borrower
notice within the time limitations prescribed in (a) or (b) above, Borrower
shall not have any obligation to pay such claim for compensation or
indemnification. In the event that any Lender or Agent fails to give Borrower
notice within the time limitation prescribed in (c) above, Borrower shall not
have any obligation to pay any amount with respect to claims accruing prior to
the date which is 180 days preceding such written demand.
ARTICLE IV.
CONDITIONS TO BORROWINGS
------------------------
The obligations of each Lender to make Advances hereunder is subject to the
satisfaction of the following conditions:
Section 4.01. Conditions Precedent to Initial Loans and Letters of Credit.
-----------------------------------------------------------
At the time of the making of the initial Loans hereunder on the Closing Date and
the issuance of the initial Letter of Credit hereunder, all obligations of
Parent and Acquisition Sub to Agent and Lenders incurred prior to the initial
Loans (including, without limitation, Borrower's obligations to reimburse fees
and expenses payable to the Agent as previously agreed with Borrower), shall
have been paid in full, and the Agent shall have received the following, in form
and substance reasonably satisfactory in all respects to the Agent:
(a) the duly executed counterparts of this Agreement;
(b) the duly completed Revolving Notes evidencing the Revolving Loan
Commitments and the duly executed Swing Line Note evidencing the Swing Line
Subcommitment;
(c) the duly executed Guaranty Agreements and Contribution Agreement;
47
(d) the duly executed Borrower Security Agreement and appropriate UCC
financing statements relating thereto;
(e) the duly executed Trademark Security Agreement;
(f) accompanying Uniform Commercial Code financing statements relating
thereto;
(g) the duly executed Pledge Agreements accompanied, to the extent relevant
under applicable law, by (i) all stock certificates representing the Pledged
Stock, (ii) stock powers for those shares duly executed in blank, (iii) Uniform
Commercial Code financing statements relating thereto, and (iv) any other
documentation requested by the Agent in order to assure the perfection of a
first priority lien in such Pledged Stock in favor of the Agent for the benefit
of the Lenders;
(h) a duly executed certificate of a senior officer of the Parent and the
Acquisition Sub certifying that each of the Credit Parties, after giving effect
to the transactions contemplated by this Agreement, will be solvent, in form and
substance satisfactory to the Agent;
(i) duly executed Mortgages, together with appropriate Uniform Commercial
Code fixture financing statements;
(j) a duly executed closing certificate of the Borrower and the Parent in
substantially the form of Exhibit G attached hereto and appropriately completed;
---------
(k) certificates of the Secretaries or Assistant Secretaries of the Credit
Parties attaching and certifying copies of the resolutions of the board of
directors of the Credit Parties, authorizing as applicable the execution,
delivery and performance of the Credit Documents by the Credit Parties party
thereto;
(l) certificates of the Secretaries or an Assistant Secretary of the Credit
Parties certifying (i) the name, title and true signature of each officer of the
Credit Parties executing the Credit Documents, and (ii) the bylaws of the Credit
Parties;
(m) certified copies of the articles or certificate of incorporation or
charters of the Credit Parties certified by the Secretaries of State and by the
Secretaries or Assistant Secretaries of the Credit Parties, together with
certificates of good standing or existence, as may be available from the
Secretaries of State of the jurisdiction of incorporation or organization of the
Credit Parties and each other jurisdiction where the Credit Parties ownership of
property or the conduct of its business require it to be qualified, except where
a failure to be so qualified would not have a Materially Adverse Effect;
48
(n) acknowledgments from CT Corporation System or National Registered
Agents, Inc. as to its appointment as agent for service of process for the
Credit Parties;
(o) the favorable opinion of (i) Long Xxxxxxxx & Xxxxxx LLP, counsel to the
Credit Parties, substantially in the form of Exhibit H-1, addressed to the Agent
-----------
and each of the Lenders, and (ii) Xxxxxx & Xxxxxx, special Tennessee counsel to
the Credit Parties, substantially in the form of Exhibit H-2, addressed to the
-----------
Agent and each of the Lenders;
(p) copies of all documents and instruments, including all consents,
authorizations and filings, required or advisable under any Requirement of Law
or by any material Contractual Obligation of the Credit Parties, in connection
with the execution, delivery, performance, validity and enforceability of the
Credit Documents and the other documents to be executed and delivered hereunder,
and such consents, authorizations, filings and orders shall be in full force and
effect and all applicable waiting periods shall have expired;
(q) reports from the Uniform Commercial Code records of each of the
jurisdictions listed on Schedule 4.01 hereto, in each case showing no
-------------
outstanding liens or security interests granted by any Credit Party other than
(x) Permitted Liens and (y) Liens in favor of the Agent;
(r) copies of indentures, credit agreements, instruments, and other
documents evidencing or securing Indebtedness of any Consolidated Company
described on Schedule 7.01, in any single case in an amount not less than
-------------
$1,000,000;
(s) certificates, reports and other information as the Agents may request
from any Consolidated Company in order to satisfy the Lenders as to the absence
of any material liabilities or obligations arising from matters relating to
employees of the Consolidated Companies, including employee relations,
collective bargaining agreements, Plans and other compensation and employee
benefit plans;
(t) a summary, set forth in format and detail acceptable to the Agent, of
the types and amounts of insurance (property and liability) maintained by the
Consolidated Companies accompanied by the insurance certificates naming the
Agent as loss payee and additional insured as may be required by the terms of
the Security Documents;
(u) a copy of the Merger Agreement, accompanied by the certificate of a
senior officer of the Parent as to the consummation of the Acquisition and the
other transactions contemplated by the Merger Agreement and certain other
matters, together with copies of the documents required to be delivered pursuant
to the Merger Agreement, together with the certificate of a senior officer of
the Parent as to the accuracy thereof;
49
(v) evidence satisfactory to the Agent that all conditions precedent to the
consummation of the Merger have been fulfilled and that the Merger will take
place concurrently with or prior to the initial Advance hereunder;
(w) a copy of the Senior Note Indenture, in form and substance satisfactory
to the Agent, accompanied by a certificate of a senior officer of the
Acquisition Sub stating that all conditions precedent to the issuance of the
Senior Notes have been satisfied and that the Senior Notes will be issued
concurrently with or prior to the initial Advance hereunder, resulting in the
receipt of gross proceeds thereof in an amount of not less than $100,000,000;
(x) evidence satisfactory to the Agent of an equity investment in Borrower
made by Parent (funded by private equity contributions to Parent) in an amount
of not less than $35,000,000;
(y) a duly executed Solvency Certificate of the Borrower;
(z) a duly executed Closing Memorandum;
(aa) written direction from the Acquisition Sub to the Agent regarding the
disbursement of the proceeds of the initial Advances to be made on the Closing
Date;
(bb) evidence satisfactory to the Agent of the repayment of all other
Indebtedness of the Target other than Indebtedness permitted by the terms of
this Agreement, and the release of all Liens securing the same (including
without limitation, the Existing Credit Agreement); and
(cc) evidence assuring the Agent and the Lenders that all corporate
proceedings and all other legal matters in connection with the authorization,
legality, validity and enforceability of the Credit Documents and the
Transaction are in form and substance satisfactory to the Lenders in the
exercise of their reasonable credit judgment.
Section 4.02. Conditions to Each Loan and Letter of Credit. At the
--------------------------------------------
time of the making of all Loans (but not including the continuation or
conversion of any Revolving Loan in the same principal amount or any Revolving
Loan pursuant to Section 2.02(c) or Section 2.07) and issuance of all Letters of
Credit (before as well as after giving effect to such Loans and the proposed use
of the proceeds thereof and the issuance of such Letters of Credit) the
following conditions shall have been satisfied or shall exist:
(a) there shall exist no Default or Event of Default;
(b) all representations and warranties by Acquisition Sub or Borrower
contained herein shall be true and correct in all material respects with the
same effect as
50
though such representations and warranties had been made on and as of the date
of such Loan or issuance of such Letter of Credit, except for representations
and warranties which were made as of a specific date;
(c) the Loans to be made or the Letters of Credit to be issued and the use
of proceeds thereof shall not contravene, violate or conflict with, or involve
the Agent or any Lender in a violation of, any law, rule, injunction, or
regulation, or determination of any court of law or other governmental authority
applicable to Borrower or Acquisition Sub; and
(d) the Agent shall have received such other documents or legal opinions as
the Agent or any Lender may reasonably request, all in form and substance
satisfactory to the Agent in the exercise of its reasonable credit judgment.
Each request for a Borrowing or a Swing Line Loan and the acceptance by
Borrower of the proceeds thereof and each request for the issuance of a Letter
of Credit shall constitute a representation and warranty by Acquisition Sub and
Borrower, as of the date of the Loans comprising such Borrowing or the issuance
of such Letter of Credit, that the applicable conditions specified in Section
4.01 (with respect to the initial Loans and Letters of Credit) and Section 4.02
have been satisfied.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
------------------------------
Borrower (as to itself and all of its Subsidiaries) and prior to its
merger into the Borrower, Acquisition Sub, represents and warrants as follows
(with the understanding that the matters described on the Schedules hereto
assume the consummation of the Transaction):
Section 5.01. Corporate Existence; Compliance with Law. Each of the
----------------------------------------
Acquisition Sub, the Borrower and its Subsidiaries is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation. Each of the Acquisition Sub, the Borrower
and its Subsidiaries (i) has the corporate power and authority and the legal
right to own and operate its property and to conduct its business, (ii) is duly
qualified as a foreign corporation and in good standing under the laws of each
jurisdiction where its ownership of property or the conduct of its business
requires such qualification, and (iii) is in compliance with all Requirements of
Law, where (a) the failure to have such power, authority and legal right as set
forth in clause (i), (b) the failure to be so qualified or in good standing as
set forth in clause (ii), or (c) the failure to comply with Requirements of Law
as set forth in clause (iii), would reasonably be expected by the Acquisition
Sub or the Borrower, in the aggregate, to have a Materially Adverse Effect. The
jurisdiction of incorporation or organization, and the ownership of all issued
and outstanding capital stock, for each Subsidiary of the Borrower as of the
date of
51
this Agreement is accurately described on Schedule 5.01. The Acquisition Sub
-------------
has no Subsidiaries.
Section 5.02. Corporate Power; Authorization. Each of the Credit
------------------------------
Parties has the corporate power and authority to make, deliver and perform the
Credit Documents to which it is a party and has taken all necessary corporate
action to authorize the execution, delivery and performance of such Credit
Documents. No consent or authorization of, or filing with, any Person
(including, without limitation, any governmental authority), is required in
connection with the execution, delivery or performance by any Credit Party, or
the validity or enforceability against any Credit Party, of the Credit Documents
to which it is a party, other than such consents, authorizations or filings
which have been made or obtained.
Section 5.03. Enforceable Obligations. This Agreement has been duly
-----------------------
executed and delivered, and each other Credit Document will be duly executed and
delivered, by the respective Credit Parties parties thereto, and this Agreement
constitutes, and each other Credit Document when executed and delivered will
constitute, legal, valid and binding obligations of the Credit Parties parties
thereto, respectively, enforceable against the Credit Parties parties thereto,
in accordance with their respective terms, except as may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity.
Section 5.04. No Legal Bar. The execution, delivery and performance
------------
by the Credit Parties of the Credit Documents to which they are a party will not
violate any Requirement of Law or cause a breach or default under any of their
respective Contractual Obligations where such violation or breach would
reasonably be expected to have a Materially Adverse Effect.
Section 5.05. No Material Litigation. Except as set forth on
----------------------
Schedule 5.05 or in any notice furnished to the Lenders pursuant to Section
-------------
6.07(e) at or prior to the respective times the representations and warranties
set forth in this Section 5.05 are made or deemed to be made hereunder, no
litigation, investigations or proceedings of or before any courts, tribunals,
arbitrators or governmental authorities are pending or, to the knowledge of
Borrower, threatened by or against Acquisition Sub, Borrower or any of its
Subsidiaries, or against any of their respective properties or revenues,
existing or future (a) with respect to any Credit Document, or any of the
transactions contemplated hereby or thereby, or (b) seeking money damages in
excess of $1,000,000, either singly or in the aggregate or which, if adversely
determined, would otherwise reasonably be expected to have a Materially Adverse
Effect.
Section 5.06. Investment Company Act, Etc. None of the Credit
---------------------------
Parties is an "investment company" or a company "controlled" by an "investment
company" (as each of the quoted terms is defined or used in the Investment
Company Act of 1940, as amended). None of the Credit Parties is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, or any foreign, federal or local statute or regulation limiting its
ability to
52
incur indebtedness for money borrowed, guarantee such indebtedness, or pledge
its assets to secure such indebtedness, as contemplated hereby or by any other
Credit Document.
Section 5.07. Margin Regulations. No part of the proceeds of any of
------------------
the Loans will be used for any purpose which violates, or which would be
inconsistent or not in compliance with, the provisions of the applicable Margin
Regulations.
Section 5.08. Compliance With Environmental Laws.
----------------------------------
(a) The Borrower and its Subsidiaries have received no notices of
claims or potential liability under, nor notices of non-compliance with, any
applicable Environmental Law, which claims and liabilities under, and non-
compliance with, such Environmental Laws, would reasonably be expected to result
in penalties, fines, claims or other liabilities to the Borrower and its
Subsidiaries in amounts in excess of $1,000,000, either individually or in the
aggregate (including any such penalties, fines, claims, or liabilities relating
to the matters set forth on Schedule 5.08(a)), except as set forth on Schedule
---------------- --------
5.08(a) or in any notice furnished to the Lenders pursuant to Section 6.07(f) at
-------
or prior to the respective times the representations and warranties set forth in
this Section 5.08(a) are made or deemed to be made hereunder.
(b) Except as set forth on Schedule 5.08(b) or in any notice furnished
----------------
to the Lenders pursuant to Section 6.07(f) at or prior to the respective times
the representations and warranties set forth in this Section 5.08(b) are made or
deemed to be made hereunder, none of the Borrower and its Subsidiaries has
received any notice of violation, or notice of any action, either judicial or
administrative, from any governmental authority (whether United States or
foreign) relating to the actual or alleged violation of any Environmental Law,
including, without limitation, any notice of any actual or alleged spill, leak,
or other release of any Hazardous Substance, waste or hazardous waste by
Borrower or any of its Subsidiaries or its employees or agents, or as to the
existence of any contamination on any properties owned by Borrower or any of its
Subsidiaries, where any such violation, spill, leak, release or contamination
would reasonably be expected to result in penalties, fines, claims or other
liabilities to the Borrower or any of its Subsidiaries in amounts in excess of
$1,000,000, either individually or in the aggregate.
(c) Except as set forth on Schedule 5.08(c), the Borrower and its
----------------
Subsidiaries have obtained all necessary governmental permits, licenses and
approvals which are material to the operations conducted on their respective
properties, including without limitation, all required material permits,
licenses and approvals for (i) the emission of air pollutants or contaminants,
(ii) the treatment or pretreatment and discharge of waste water or storm water,
(iii) the treatment, storage, disposal or generation of hazardous wastes, (iv)
the withdrawal and usage of ground water or surface water, and (v) the disposal
of solid wastes, where the failure to obtain such permits, licenses and
approvals would reasonably be expected to have a Materially Adverse Effect,
either individually or in the aggregate.
53
Section 5.09. Insurance. The Borrower and its Subsidiaries currently
---------
maintain insurance with respect to their respective properties and businesses,
with financially sound and reputable insurers, having coverages against losses
or damages of the kinds customarily insured against by reputable companies in
the same or similar businesses, such insurance being in amounts no less than
those amounts which are customary for such companies under similar
circumstances. The Borrower and its Subsidiaries have paid all material amounts
of insurance premiums now due and owing with respect to such insurance policies
and coverages, and such policies and coverages are in full force and effect.
Section 5.10. No Default. Except as set forth on Schedule 5.10, none
---------- -------------
of the Acquisition Sub, the Borrower or any of its Subsidiaries is in default
under or with respect to any Contractual Obligation in any respect which default
or defaults would be reasonably expected in the aggregate to have a Materially
Adverse Effect.
Section 5.11. No Burdensome Restrictions. Except as set forth on
--------------------------
Schedule 5.11 or in any notice furnished to the Lenders pursuant to Section
-------------
6.07(k) at or prior to the respective times the representations and warranties
set forth in this Section 5.11 are made or deemed to be made hereunder, none of
the Acquisition Sub, the Borrower or any of its Subsidiaries is a party to or
bound by any Contractual Obligation or Requirement of Law which has had or would
reasonably be expected to have a Materially Adverse Effect.
Section 5.12. Taxes. Except as set forth on Schedule 5.12, each of
----- -------------
the Acquisition Sub, the Borrower and its Subsidiaries have filed or caused to
be filed all declarations, reports and tax returns which are required to have
been filed, and has paid all taxes, custom duties, levies, charges and similar
contributions ("taxes" in this Section 5.12) shown to be due and payable on said
returns or on any assessments made against it or its properties, and all other
taxes, fees or other charges imposed on it or any of its properties by any
governmental authority (other than those the amount or validity of which is
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided in its
books); and no tax liens have been filed and, to the knowledge of Borrower and
Acquisition Sub, no claims are being asserted with respect to any such taxes,
fees or other charges.
Section 5.13. Subsidiaries. Except as disclosed on Schedule 5.01, on
------------ -------------
the date of this Agreement, Borrower has no Subsidiaries and neither Borrower
nor any Subsidiary is a joint venture partner or general partner in any
partnership. Except as disclosed on Schedule 5.13 or in any notice furnished to
-------------
the Lenders pursuant to Section 6.07(l) at or prior to the respective times the
representations and warranties set forth in this Section 5.13 are made or deemed
to be made hereunder, Borrower has no Material Subsidiaries.
54
Section 5.14. Financial Statements. Acquisition Sub has furnished to
--------------------
the Agent and the Lenders:
(a) Target Financial Statements. (i) the audited consolidated balance
---------------------------
sheet of Target and its Subsidiaries as at December 29, 1996 and December 31,
1995 and the related consolidated statements of income, shareholders' equity and
cash flows for the 52-week periods then ended, including in each case the
related schedules and notes, and (ii) the unaudited balance sheet of Target and
its Subsidiaries as at June 29, 1997, and the related unaudited consolidated
statements of income, shareholders' equity, and cash flows for the period then
ended, setting forth in each case in comparative form the figures for the
previous fiscal year and second fiscal quarter, as the case may be. The
foregoing financial statements fairly present in all material respects the
consolidated financial condition of Target and its Subsidiaries as at the dates
thereof and results of operations for such periods in conformity with GAAP
consistently applied. Target and its Subsidiaries taken as a whole do not have
any material contingent obligations, contingent liabilities, or material
liabilities for known taxes, long-term leases or unusual forward or long-term
commitments not reflected in the foregoing financial statements or the notes
thereto. Since June 29, 1997, there have been no changes with respect to Target
and its Subsidiaries which has had or would reasonably be expected to have a
Materially Adverse Effect.
(b) Parent Balance Sheet. the unaudited balance sheet of the Parent and
--------------------
its Subsidiaries (after giving effect to the Transaction) dated as of the
Closing Date, delivered to the Lenders as of the Closing Date and certified as
true and correct by a senior officer of the Parent, fairly present in all
material respects, on a pro forma consolidated basis, based upon financial
results of Target and Parent through August 24, 1997, the combined consolidated
financial condition of Parent as at the date thereof.
(c) Pro Forma Combined Financial Statements. (i) the unaudited pro
---------------------------------------
forma condensed consolidated balance sheet of Borrower (after giving effect to
the Transaction) as of June 29, 1997 and (ii) the unaudited pro forma condensed
consolidated statements of operations for the fiscal year ended December 29,
1996 and the six months ending June 29, 1997, set forth in the Offering
Memorandum to be filed with the Securities Exchange Commission in connection
with the offering of the Senior Notes, fairly presents in all material respects,
on a pro forma consolidated basis, the combined consolidated financial condition
of Borrower as at the dates thereof. The Consolidated Companies, after giving
effect to the Transaction, taken as a whole, do not have any material contingent
obligations, contingent liabilities, or material liabilities for known taxes,
long-term leases or unusual forward or long-term commitments not reflected in
the foregoing financial statements or the notes thereto.
(d) The Projections. The projections, dated June 30, 1997, copies of
---------------
which have been furnished to each Lender, have been prepared on the basis of the
assumptions set forth therein, which are believed by the Borrower to be
reasonable and fair in the light of current conditions and the past history of
the Target and its Subsidiaries and to reflect a reasonable
55
estimate of the projected balance sheets, results of operations, cash flows and
other information presented therein.
(e) No Material Adverse Change. Since the date of the preparation of
--------------------------
the pro forma financial statements and projections set forth above, there have
been no changes with respect to the Consolidated Companies which has had or
would reasonably be expected to have a Materially Adverse Effect.
Section 5.15. ERISA. Except as disclosed on Schedule 5.15 or in any
----- -------------
notice to the Lenders furnished pursuant to Section 6.07(g) at or prior to the
respective times the representations and warranties set forth in this Section
5.15 are made or deemed to be made hereunder:
(1) Identification of Plans. None of the Acquisition Sub, the
-----------------------
Borrower or its Subsidiaries nor any of their respective ERISA Affiliates
maintains or contributes to, or has during the past seven years maintained or
contributed to, any Plan that is subject to Title IV of ERISA;
(2) Compliance. Each Plan maintained by the Acquisition Sub, the
----------
Borrower or its Subsidiaries have at all times been maintained, by their terms
and in operation, in compliance with all applicable laws, and the Acquisition
Sub, the Borrower and its Subsidiaries are subject to no tax or penalty with
respect to any Plan of such Person or any ERISA Affiliate thereof, including
without limitation, any tax or penalty under Title I or Title IV of ERISA
(excluding PBGC premiums in the normal course) or under Chapter 43 of the Tax
Code, or any tax or penalty resulting from a loss of deduction that was
previously asserted on a filed tax return with the state or federal taxing
authority under Sections 162, 404, or 419 of the Tax Code, where the failure to
comply with such laws, and such taxes and penalties, together with all other
liabilities referred to in this Section 5.15 (taken as a whole), would in the
aggregate have a Materially Adverse Effect;
(3) Liabilities. The Acquisition Sub, the Borrower and its
-----------
Subsidiaries are subject to no liabilities (including withdrawal liabilities)
with respect to any Plans of such Persons or any of their ERISA Affiliates,
including without limitation, any liabilities arising from Titles I or IV of
ERISA, other than obligations to fund benefits under an ongoing Plan and to pay
current contributions, expenses and premiums with respect to such Plans, where
such liabilities, together with all other liabilities referred to in this
Section 5.15 (taken as a whole), would in the aggregate have a Materially
Adverse Effect;
(4) Funding. The Acquisition Sub, the Borrower and its Subsidiaries
-------
and, with respect to any Plan which is subject to Title IV of ERISA, each of
their respective ERISA Affiliates, have made full and timely payment of all
amounts (A) required to be contributed under the terms of each Plan and
applicable law, and (B) required to be paid as expenses (including PBGC or other
premiums) of each Plan, where the failure to pay such amounts (when
56
taken as a whole, including any penalties attributable to such amounts) would
have a Materially Adverse Effect. No Plan subject to Title IV of ERISA (other
than a Multiemployer Plan) has an "amount of unfunded benefit liabilities" (as
defined in Section 4001(a)(18) of ERISA), determined as if such Plan terminated
on any date on which this representation and warranty is deemed made, in any
amount which, together with all other liabilities referred to in this Section
5.15 (taken as a whole), would have a Materially Adverse Effect if such amount
were then due and payable. None of the Acquisition Sub, the Borrower and its
Subsidiaries would be subject to withdrawal liability with respect to any
Multiemployer Plan, determined as if the event resulting in such withdrawal
liability occurred on any date on which this representation is made or deemed to
be made based on the most recent actuarial valuation data made available to
employers participating in the Multiemployer Plan, in any amount which, together
with all other liabilities referred to in this Section 5.15 (taken as a whole),
would have a Materially Adverse Effect if such amounts were then due and
payable. The Acquisition Sub, the Borrower and its Subsidiaries are subject to
no liabilities with respect to post-retirement medical benefits in any amounts
which, together with all other liabilities referred to in this Section 5.15
(taken as a whole), would reasonably be expected to have a Materially Adverse
Effect if such amounts were then due and payable.
Section 5.16. Patents, Trademarks, Licenses, Etc. Except as set
-----------------------------------
forth on Schedule 5.16, (i) Borrower and its Subsidiaries have obtained and hold
-------------
in full force and effect all material patents, trademarks, service marks, trade
names, copyrights, licenses and other such rights, free from material burdensome
restrictions, which are necessary for the operation of their respective
businesses as presently conducted, and (ii) to the best of Borrower's knowledge,
no product, process, method, service or other item presently sold by or employed
by Borrower and its Subsidiaries in connection with such business infringes any
patents, trademark, service xxxx, trade name, copyright, license or other right
owned by any other person and there is not presently pending, or to the
knowledge of Borrower, threatened, any claim or litigation against or affecting
Borrower and its Subsidiaries contesting such Person's right to sell or use any
such product, process, method, substance or other item where the result of such
failure to obtain and hold such benefits or such infringement would reasonably
be expected to have a Materially Adverse Effect.
Section 5.17. Ownership of Property. Except as set forth on Schedule
--------------------- --------
5.17, each Consolidated Company has good and marketable fee simple title to or a
----
valid leasehold interest in all of its real property and good title to, or a
valid leasehold interest in, all of its other property, as such properties are
reflected in the pro forma consolidated balance sheet of the Consolidated
Companies as of June 29, 1997 referred to in Section 5.14, other than properties
disposed of in the ordinary course of business since such date or as otherwise
permitted by the terms of this Agreement, subject to no Lien or title defect of
any kind, except Permitted Liens. The Consolidated Companies enjoy peaceful and
undisturbed possession under all of their respective material leases.
Section 5.18. Indebtedness. Except for the Indebtedness set forth on
------------
Schedule 7.01 or otherwise permitted pursuant to Section 7.01, (and with the
-------------
exception of the Existing Credit
57
Agreement to be repaid in full on the Closing Date) none of the Acquisition Sub,
the Borrower or any of its Subsidiaries is an obligor in respect of any
Indebtedness for borrowed money or any commitment to create or incur any
Indebtedness for borrowed money.
Section 5.19. Financial Condition. On the Closing Date, and on the
-------------------
date of each Loan hereunder and after giving effect to the Transaction and the
other transactions contemplated by this Agreement and the other Credit
Documents, including without limitation, the use of the proceeds of the Loans as
provided in Section 2.01, (i) the assets of each Credit Party at fair valuation
and based on their present fair saleable value (including, without limitation,
the fair and realistic value of any contribution or subrogation rights in
respect of any Guaranty Agreement given by such Credit Party) will exceed such
Credit Party's debts, including contingent liabilities (as such liabilities may
be limited under the express terms of any Guaranty Agreement of such Credit
Party), (ii) the remaining capital of such Credit Party will not be unreasonably
small to conduct the Credit Party's business, and (iii) such Credit Party will
not have incurred debts, or have intended to incur debts, beyond the Credit
Party's ability to pay such debts as they mature. For purposes of this Section
5.19, "debt" means any liability on a claim, and "claim" means (a) the right to
payment, whether or not such right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured or unsecured, or (b) the right to an equitable remedy
for breach of performance if such breach gives rise to a right to payment,
whether or not such right to an equitable remedy is reduced to judgment, fixed,
contingent, matured, unmatured, disputed, undisputed, secured or unsecured.
Section 5.20. Labor Matters. Except as set forth in Schedule 5.20 or
------------- -------------
in any notice furnished to the Lenders pursuant to Section 6.07(k) at or prior
to the respective times the representations and warranties set forth in this
Section 5.20 are made or deemed to be made hereunder, the Consolidated Companies
have experienced no strikes, labor disputes, slow downs or work stoppages due to
labor disagreements which have had, or would reasonably be expected to have, a
Materially Adverse Effect, and, to the best knowledge of Acquisition Sub or
Borrower, there are no such strikes, disputes, slow downs or work stoppages
threatened against any Consolidated Company. Except as set forth in Schedule
--------
5.20 or in any notice furnished to the Lenders pursuant to Section 6.07(k) at or
----
prior to the respective times the representations and warranties set forth in
this Section 5.20 are made or deemed to be made hereunder, the hours worked and
payment made to employees of the Consolidated Companies have not been in
violation in any material respect of the Fair Labor Standards Act or any other
applicable law dealing with such matters where the failure to comply therewith
would reasonably be expected to have a Materially Adverse Effect. Substantially
all payments due from the Consolidated Companies, or for which any claim may be
made against the Consolidated Companies, on account of wages and employee health
and welfare insurance and other benefits have been paid or accrued as
liabilities on the books of the Consolidated Companies where the failure to pay
or accrue such liabilities would reasonably be expected to have a Materially
Adverse Effect.
Section 5.21. Payment or Dividend Restrictions. Except as described
--------------------------------
on Schedule 5.21, none of the Borrower or its Subsidiaries is party to or
-------------
subject to any agreement or understanding
58
restricting or limiting the payment of any dividends or other distributions by
Borrower or any Subsidiaries of Borrower.
Section 5.22. Ownership of Acquisition Sub and Borrower. As of the
-----------------------------------------
Closing Date, Parent owns 100% of the issued and outstanding capital stock of
the Acquisition Sub and, immediately upon consummation of the Merger concurrent
with the initial Loans hereunder, will own 100% of the issued and outstanding
capital stock of the Borrower, which Stock is fully paid and non-assessable.
Section 5.23. Acquisition. The Merger Agreement is in full force and
-----------
effect, has not been terminated, rescinded or withdrawn, and no material
provision thereof has been amended or waived by any party; all representations
and warranties of the parties set forth in the Merger Agreement, are true and
correct as of the Closing Date with the same effect as though made on and as of
the Closing Date; all requisite approvals by governmental authorities and
regulatory bodies having jurisdiction over the Parent, the Target and the
Acquisition Sub in respect of the transactions contemplated by the Merger
Agreement have been obtained by such entities, as the case may be, and no such
approvals impose any conditions to the consummation of the transactions
contemplated by the Merger Agreement or the continued conduct by the Borrower of
the business of Target or otherwise. The Merger will be consummated before or
concurrently with the initial Advance hereunder.
Section 5.24. Continuing Business of Target; Business of Parent. (a)
-------------------------------------------------
There exists no actual or, to the best knowledge of Acquisition Sub or Borrower,
threatened termination, cancellation or limitation of, or any material
modification or change in, (i) the business relationships of the Borrower with
any customer or group of customers of the Borrower whose business individually
or in the aggregate is material to the operations or financial condition of the
Borrower, (ii) the business relationships of the Borrower with any of its
material suppliers or (iii) any Material Contract where such termination,
cancellation, limitation, modification or change would reasonably be expected,
individually or in the aggregate, to have a Materially Adverse Effect; and the
Acquisition Sub and the Borrower reasonably anticipates that after the
consummation of the transactions contemplated by the Merger Agreement and this
Agreement, substantially all such customers and suppliers will continue a
business relationship with the Borrower on a basis no less favorable to the
Borrower than as heretofore conducted with the Target and there exists no other
condition or state of facts or circumstances which would reasonably be expected
to have a Materially Adverse Effect on the ongoing business of the Borrower.
(b) Parent, as of the Closing Date (i) engages in no business or other
activity other than the ownership of the Stock of the Acquisition Sub and
following the consummation of the Transaction, the Borrower and (ii) has no
outstanding Indebtedness other than the Parent Guaranty Agreement.
59
Section 5.25. Consents to Acquisition. No material consent, authorization
-----------------------
or approval of, or declaration, notification, filing or registration with, any
governmental or regulatory authority or any third party, including without
limitation, the filing of any "Pre-merger Notification Report" with the Federal
Trade Commission and the Antitrust Division of the Department of Justice
pursuant to Title II of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended and the regulations promulgated thereunder is necessary in
connection with the consummation of the Acquisition and the Merger which has not
been obtained on or prior to the Closing Date.
Section 5.26. Disclosure. No representation or warranty contained in
----------
this Agreement (including the Schedules attached hereto) or in any other
document furnished from time to time pursuant to the terms of this Agreement,
contains or will contain any untrue statement of a material fact or omits or
will omit to state any material fact necessary to make the statements herein or
therein not misleading in any material respect as of the date made or deemed to
be made. Except as may be set forth herein (including the Schedules attached
hereto), there is no fact known to Acquisition Sub or Borrower which has had, or
is reasonably expected to have, a Materially Adverse Effect.
ARTICLE VI.
AFFIRMATIVE COVENANTS
---------------------
So long as any Commitment remains in effect hereunder or any Note or
other Obligation shall remain unpaid, Borrower will:
Section 6.01. Corporate Existence, Etc. Preserve and maintain, and
-------------------------
cause each of its Subsidiaries to preserve and maintain, its corporate
existence, its material rights, franchises, and licenses, and its material
patents and copyrights (for the scheduled duration thereof), trademarks, trade
names, and service marks, necessary or desirable in the normal conduct of its
business, and its qualification to do business as a foreign corporation in all
jurisdictions where it conducts business or other activities making such
qualification necessary, where the failure to be so qualified would reasonably
be expected to have a Materially Adverse Effect.
Section 6.02. Compliance with Laws, Etc. Comply, and cause each of
--------------------------
its Subsidiaries to comply with all Requirements of Law (including, without
limitation, the Environmental Laws subject to the exception set forth in Section
5.08 where the penalties, claims, fines, and other liabilities resulting from
noncompliance with such Environmental Laws do not involve amounts in excess of
$1,000,000 in the aggregate) and Contractual Obligations applicable to or
binding on any of them where the failure to comply with such Requirements of Law
and Contractual Obligations would reasonably be expected to have a Materially
Adverse Effect.
60
Section 6.03. Payment of Taxes and Claims, Etc. Pay, and cause each of
---------------------------------
its Subsidiaries to pay, (i) all taxes, assessments and governmental charges
imposed upon it or upon its property, and (ii) all claims (including, without
limitation, claims for labor, materials, supplies or services) which might, if
unpaid, become a Lien upon its property, unless, in each case, the validity or
amount thereof is being contested in good faith by appropriate proceedings and
adequate reserves are maintained with respect thereto.
Section 6.04. Keeping of Books. Keep, and cause each of its
----------------
Subsidiaries to keep, proper books of record and account, containing complete
and materially accurate entries of all their respective financial and business
transactions.
Section 6.05. Visitation, Inspection, Etc. Permit, and cause each of
---------------------------
its Subsidiaries to permit, any representative of the Agent or any Lender to
visit and inspect any of its property, to examine its books and records and to
make copies and take extracts therefrom, and to discuss its affairs, finances
and accounts with its officers, all at such reasonable times and as often as the
Agent or such Lender may reasonably request; provided that, as long as no Event
of Default has occurred or is continuing, (i) Agent or such Lender shall give at
least five (5) Business Days' prior written notice to Borrower of any such visit
or inspection, (ii) such visit or inspection will not materially interfere with
the conduct of business and (iii) such visit or inspection will be at Agent's or
such Lender's expense.
Section 6.06. Insurance; Maintenance of Properties.
------------------------------------
(a) Maintain or cause to be maintained with financially sound and
reputable insurers, insurance with respect to its properties and business, and
the properties and business of its Subsidiaries, against loss or damage of the
kinds customarily insured against by reputable companies in the same or similar
businesses, such insurance to be of such types and in such amounts as is
customary for such companies under similar circumstances; provided, however,
-------- -------
that in any event Borrower shall use its best efforts to maintain, or cause to
be maintained, insurance in amounts and with coverages not materially less
favorable to any of its Subsidiaries as in effect on the date of this Agreement.
(b) Cause, and cause each of its Subsidiaries to cause, all properties
used or useful in the conduct of its business to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and will cause to be made all necessary repairs, renewals, replacements,
settlements and improvements thereof, all as in the judgment of Borrower may be
necessary so that the business carried on in connection therewith may be
properly and advantageously conducted.
Section 6.07. Reporting Covenants. Furnish to each Lender:
-------------------
(a) Annual Financial Statements. As soon as available and in any event
---------------------------
within 120 days after each fiscal year end of Parent, balance sheets of the
Parent and its
61
Subsidiaries as at the end of such year, presented on a consolidated and
consolidating basis, and the related statements of income, shareholders'
equity, and cash flows of the Parent and its Subsidiaries for such fiscal
year, presented on a consolidated and consolidating basis, setting forth in
each case in comparative form the figures for the previous fiscal year, all
in reasonable detail and accompanied by a report thereon of Xxxxxx Xxxxxxxx
L.L.P. or other independent public accountants of comparable recognized
national standing, which such report shall be unqualified as to going
concern and scope of audit and shall state that such financial statements
present fairly in all material respects the financial condition as at the
end of such fiscal year on a consolidated and consolidating basis, and the
results of operations and statements of cash flows of the Parent and its
Subsidiaries for such Fiscal Year in accordance with GAAP and that the
examination by such accountants in connection with such consolidated
financial statements has been made in accordance with generally accepted
auditing standards;
(b) Quarterly and Monthly Financial Statements. (i) As soon as
------------------------------------------
available and in any event within 45 days after the end of each fiscal
quarter of Parent (other than the fourth fiscal quarter), balance sheets of
the Parent and its Subsidiaries as at the end of such quarter presented on
a consolidated and consolidating basis and the related statements of
income, shareholders' equity, and cash flows of the Parent and its
Subsidiaries for such fiscal quarter and for the portion of Parent's Fiscal
Year ended at the end of such quarter, presented on a consolidated and
consolidating basis setting forth in each case in comparative form the
figures for the corresponding quarter and the corresponding portion of
Parent's previous Fiscal Year, all in reasonable detail and certified, with
respect to the quarterly statements, by the chief financial officer or
principal accounting officer of Borrower that such financial statements
fairly present in all material respects the financial condition of the
Parent and its Subsidiaries as at the end of such fiscal quarter on a
consolidated and consolidating basis, and the results of operations and
statements of cash flows of the Parent and its Subsidiaries for such fiscal
quarter and such portion of Parent's Fiscal Year, in accordance with GAAP
consistently applied (subject to normal year-end audit adjustments and the
absence of certain footnotes) and (ii) as soon as available and in any
event within 30 days after the end of each calendar month, balance sheets
of the Parent and its Subsidiaries as at the end of such month presented on
a consolidated and consolidating basis and the related statements of
income, shareholders' equity, and cash flows of the Parent and its
Subsidiaries for such month and for the portion of Parent's Fiscal Year
ended at the end of such month, presented on a consolidated and
consolidating basis setting forth in each case in comparative form the
figures for the corresponding portion of Parent's previous Fiscal Year, all
in reasonable detail, in accordance with GAAP consistently applied (subject
to normal year-end audit adjustments and the absence of certain footnotes);
(c) No Default/Compliance Certificate. Together with the financial
---------------------------------
statements required pursuant to subsections (a) and (b)(i) above, a
certificate, substantially in the form of Exhibit I attached hereto, of the
---------
treasurer or chief financial
62
officer of Borrower (i) to the effect that, based upon a review of the
activities of the Parent and its Subsidiaries and such financial statements
during the period covered thereby, there exists no Event of Default and no
Default under this Agreement, or if there exists an Event of Default or a
Default hereunder, specifying the nature thereof and the proposed response
thereto, and (ii) demonstrating in reasonable detail compliance as at the
end of such Fiscal Year or such fiscal quarter with Section 6.08 and
Sections 7.01 through 7.06;
(d) Notice of Default. Promptly after any Executive Officer of
-----------------
Borrower has notice or knowledge of the occurrence of an Event of Default
or a Default, a certificate of the chief financial officer or principal
accounting officer of Borrower specifying the nature thereof and the
proposed response thereto;
(e) Litigation. Promptly after (i) the occurrence thereof, notice of
----------
the institution of or any material adverse development in any material
action, suit or proceeding or any governmental investigation or any
arbitration, before any court or arbitrator or any governmental or
administrative body, agency or official, against Borrower or any of its
Subsidiaries, or any material property of any thereof seeking money damages
in excess of $2,000,000 (unless any such judgment, award or fine is
unequivocally covered by Borrower's insurance policies) or which, if
adversely determined, would otherwise reasonably be expected to have a
Materially Adverse Effect, or (ii) actual knowledge thereof, notice of the
threat of any such action, suit, proceeding, investigation or arbitration;
(f) Environmental Notices. Promptly after receipt thereof, notice of
---------------------
any actual or alleged violation, or notice of any action, claim or request
for information, either judicial or administrative, from any governmental
authority relating to any actual or alleged claim, notice of potential
responsibility under or violation of any Environmental Law, or any actual
or alleged spill, leak, disposal or other release of any waste, petroleum
product, or hazardous waste or Hazardous Substance by Borrower or any of
its Subsidiaries which could reasonably be expected to result in penalties,
fines, claims or other liabilities to Borrower or any of its Subsidiaries
in amounts in excess of $1,000,000;
(g) ERISA. (i) Promptly after the occurrence thereof with respect to
-----
any Plan of any Consolidated Company or any ERISA Affiliate thereof, or any
trust established thereunder, notice of (A) a "reportable event" described
in Section 4043 of ERISA and the regulations issued from time to time
thereunder (other than a "reportable event" not subject to the provisions
for 30-day notice to the PBGC under such regulations), or (B) any other
event which could subject any Consolidated Company to any tax, penalty or
liability (excluding PBGC premiums in the normal course) under Title I or
Title IV of ERISA or Chapter 43 of the Tax Code, or any tax or penalty
resulting from a loss of deduction that was asserted on a filed tax return
with the state or federal taxing authority
63
under Sections 162, 404 or 419 of the Tax Code, where any such taxes,
penalties or liabilities exceed or could reasonably be expected to exceed
$1,000,000 in the aggregate;
(ii) Promptly after such notice must be provided to the PBGC, or
to a Plan participant, beneficiary or alternative payee, any notice
required under Section 101(d), 302(f)(4), 303, 307, 4041(b)(1)(A) or
4041(c)(1)(A) of ERISA or under Section 401(a)(29) or 412 of the Tax Code
with respect to any Plan of any Consolidated Company or any ERISA Affiliate
thereof;
(iii) Promptly after receipt, any notice received by any
Consolidated Company or any ERISA Affiliate thereof concerning the intent
of the PBGC or any other governmental authority to terminate a Plan of such
Consolidated Company or ERISA Affiliate thereof which is subject to Title
IV of ERISA, to impose any liability on such Consolidated Company or ERISA
Affiliate under Title IV of ERISA or Chapter 43 of the Tax Code;
(iv) Upon the request of the Agent, promptly upon the filing
thereof with the Internal Revenue Service ("IRS") or the Department of
Labor ("DOL"), a copy of IRS Form 5500 or annual report for each Plan of
any Consolidated Company or ERISA Affiliate thereof which is subject to
Title IV of ERISA;
(v) Upon the request of the Agent, (A) true and complete copies
of any and all documents, government reports and IRS determination or
opinion letters or rulings for any Plan of any Consolidated Company from
the IRS, PBGC or DOL, (B) any reports filed with the IRS, PBGC or DOL with
respect to a Plan of the Consolidated Companies or any ERISA Affiliate
thereof, or (C) a current statement of withdrawal liability for each
Multiemployer Plan of any Consolidated Company or any ERISA Affiliate
thereof;
(h) Liens. Promptly upon Borrower or any Subsidiary becoming aware
-----
thereof, notice of the filing of any federal statutory Lien, tax or other
state or local government Lien or any other Lien affecting their respective
properties, other than Permitted Liens;
(i) Public Filings, Etc. Promptly upon the filing thereof or
-------------------
otherwise becoming available, copies of all financial statements, annual,
quarterly and special reports, proxy statements and notices sent or made
available generally by Parent or Borrower to its public security holders,
of all regular and periodic reports and all registration statements and
prospectuses, if any, filed by any of them with any securities exchange,
and of all press releases and other statements made available generally to
the public containing material developments in the business or financial
condition of Borrower and the other Consolidated Companies;
64
(j) Accountants' Reports. Promptly upon receipt thereof, copies of
--------------------
all financial statements of, and all reports submitted by, independent
public accountants to Parent or Borrower in connection with each annual,
interim, or special audit of Parent's or Borrower's financial statements,
including without limitation, the comment letter submitted by such
accountants to management in connection with their annual audit;
(k) Burdensome Restrictions, Etc. Promptly upon the existence or
----------------------------
occurrence thereof, notice of the existence or occurrence of (i) any
Contractual Obligation or Requirement of Law described in Section 5.11,
(ii) failure of Borrower or any Subsidiary to hold in full force and effect
those material trademarks, service marks, patents, trade names, copyrights,
licenses and similar rights necessary in the normal conduct of its
business, and (iii) any strike, labor dispute, slow down or work stoppage
as described in Section 5.20;
(l) New Material Subsidiaries. Within 30 days after the formation or
-------------------------
acquisition of any Material Subsidiary, or any other event resulting in the
creation of a new Material Subsidiary, notice of the formation or
acquisition of such Material Subsidiary or such occurrence, including a
description of the assets of such entity, the activities in which it will
be engaged, and such other information as the Agent and any of the Lenders
may request;
(m) Intercompany Asset Transfers. Promptly upon the occurrence
----------------------------
thereof, notice of the transfer of any assets from any Credit Party to any
other Consolidated Company that is not a Credit Party in any transaction or
series of related transactions, where either the book value or the fair
market value of such assets is greater than $1,000,000 (excluding sales or
other transfers of assets in the ordinary course of business);
(n) Annual Budget and Projections. Within a reasonable period of time
-----------------------------
after the beginning of each Fiscal Year of Borrower, an annual budget and
accompanying projected balance sheets and statements of income,
shareholders' equity, and cash flows for such fiscal year for the Borrower
and its Subsidiaries in form and substance reasonably acceptable to the
Lenders; and
(o) Other Information. With reasonable promptness, such other
-----------------
information about the Consolidated Companies as the Agent or any Lender may
reasonably request from time to time.
Section 6.08. Financial Covenants.
-------------------
(a) Fixed Charge Coverage Ratio. Maintain a Fixed Charge Coverage
---------------------------
Ratio at all times, measured as of the last day of each Fiscal Quarter of the
Borrower, commencing with
65
the last day of the third Fiscal Quarter of 1998, of not less than the ratio set
forth opposite the period in which such Fiscal Quarter Ended as set forth below:
Period Ratio
------ -----
Third Fiscal Quarter 1998 0.75:1.00
First Day of Fourth Fiscal Quarter 1998
through the last day of Third
Fiscal Quarter 1999 1.00:1.00
First Day of Fourth Fiscal Quarter
1999 and thereafter 1.05:1.00.
The calculation of the Fixed Charge Coverage Ratio of the Borrower as of the
last day of the third Fiscal Quarter of 1998 shall be based upon the four Fiscal
Quarters of the Borrower ending on such date. The calculation of the Fixed
Charge Coverage Ratio of the Borrower as of the last day of the fourth Fiscal
Quarter of 1998 shall be based solely upon the period consisting of such fourth
Fiscal Quarter of 1998. The calculation of the Fixed Charge Coverage Ratio of
the Borrower as of the last day of the first Fiscal Quarter of 1999 shall be
based solely upon the period consisting of the fourth Fiscal Quarter of 1998 and
the first Fiscal Quarter of 1999. The calculation of the Fixed Charge Coverage
Ratio of the Borrower as of the last day of the second Fiscal Quarter of 1999
shall be based solely upon the period consisting of the fourth Fiscal Quarter of
1998, the first Fiscal Quarter of 1999 and the second Fiscal Quarter of 1999.
Following the second Fiscal Quarter of 1999, the Fixed Charge Coverage Ratio
shall be calculated in accordance with the definition thereof.
(b) Funded Debt Coverage Ratio. Maintain a Funded Debt Coverage
--------------------------
Ratio at all times, measured as of the last day of each Fiscal Quarter of the
Borrower, commencing with the last day of the third Fiscal Quarter of 1998, of
not less than the ratio set forth opposite the period in which such Fiscal
Quarter Ended as set forth below:
Period Ratio
------ -----
Third Fiscal Quarter 1998 7.50:1.00
First Day of Fourth Fiscal Quarter 1998
through the last day of Third
Fiscal Quarter 1999 6.00:1.00
First Day of Fourth Fiscal Quarter
1999 and thereafter 5.00:1.00.
66
(c) Consolidated Net Worth. Maintain at all times, as calculated on
----------------------
the last day of each Fiscal Quarter of the Borrower, Consolidated Net Worth in
an amount not less than $15,000,000.
(d) Consolidated Capital Expenditures. Not make or commit to make
---------------------------------
any Consolidated Capital Expenditures during any period of eight consecutive
Fiscal Quarters which exceed, when aggregated with all other Consolidated
Capital Expenditures previously made during such period, the amount of
$20,000,000.
Section 6.09. Notices Under Certain Other Indebtedness. Within five (5)
----------------------------------------
Business Days upon its receipt thereof, Borrower shall furnish the Agent a copy
of any notice received by it or any other Consolidated Company from the
holder(s) of Indebtedness referred to in Section 7.01(b), (c), (e), (f), (g) or
(i) (or from any trustee, agent, attorney, or other party acting on behalf of
such holder(s)) in an amount which, in the aggregate, exceeds $1,000,000, where
such notice states or claims (i) the existence or occurrence of any default or
event of default with respect to such Indebtedness under the terms of any
indenture, loan or credit agreement, debenture, note, or other document
evidencing or governing such Indebtedness, or (ii) the existence or occurrence
of any event or condition which requires or permits holder(s) of any
Indebtedness to exercise rights under any Change in Control Provision.
Section 6.10. Additional Credit Parties and Collateral. Promptly after
----------------------------------------
(i) the formation or acquisition of any Material Subsidiary not listed on
Schedule 5.13, (ii) the transfer of assets to any Consolidated Company if notice
-------------
thereof is required to be given pursuant to Section 6.07(m) and as a result
thereof the recipient of such assets becomes a Material Subsidiary, or (iii) the
occurrence of any other event creating a new Material Subsidiary, Borrower shall
cause to be executed and delivered a Guaranty Agreement from each such Material
Subsidiary, together with related corporate authorization documents,
organizational documents, secretary's certificates and, if requested by the
Agent in the exercise of its reasonable credit judgment, opinions, all in form
and substance satisfactory to the Agent and the Required Lenders.
ARTICLE VII.
NEGATIVE COVENANTS
------------------
So long as any Commitment remains in effect hereunder or any Note or
other Obligation shall remain unpaid, Borrower will not and will not permit any
Subsidiary to:
Section 7.01. Indebtedness. Create, incur, assume, guarantee, suffer to
------------
exist or otherwise become liable on or with respect to, directly or indirectly,
any Indebtedness (including Acquired Indebtedness), other than:
67
(a) Indebtedness of the Borrower under this Agreement and of the
Material Subsidiaries of Borrower pursuant to the Guaranty Agreement;
(b) Indebtedness outstanding or incurred on the Closing Date and
described on Schedule 7.01;
-------------
(c) Indebtedness of the Borrower or any of its Subsidiaries
represented by Capital Lease Obligations (whether or not incurred pursuant
to Sale and Leaseback Transactions), mortgage financings or Purchase Money
Obligations, in each case incurred for the purpose of financing all of any
part of the purchase price or cost of construction or improvement of
property used in the business of the Borrower or any of its Subsidiaries
(provided that such Indebtedness is incurred within 180 days of the date
such property is purchased or the date on which such construction of or
improvement to such property is commenced) in an aggregate principal amount
at any time outstanding not to exceed $15,000,000.00;
(d) unsecured current liabilities (other than liabilities for borrowed
money or liabilities evidenced by promissory notes, bonds or similar
instruments) incurred in the ordinary course of business and either (i) not
more than 30 days past due, or (ii) being disputed in good faith by
appropriate proceedings with reserves for such disputed liability
maintained in conformity with GAAP;
(e) Indebtedness of Borrower with respect to the Senior Notes and
Indebtedness of the Material Subsidiaries of Borrower with respect to
guarantees thereof;
(f) Subordinated Debt of the Borrower (but not Subsidiaries of the
Borrower) expressly approved in writing by the Lenders;
(g) Guarantees of advances to officers and employees in the ordinary
course of business, or Guarantees otherwise disclosed to and approved in
writing by the Agent and the Required Lenders;
(h) Endorsements of instruments for deposit or collection in the
ordinary course of business; and
(i) other Indebtedness of Borrower not exceeding $5,000,000 in
aggregate principal amount outstanding at any time.
Section 7.02. Liens. Create, incur, assume or suffer to exist any Lien on
-----
any of its property now owned or hereafter acquired to secure any Indebtedness
other than Permitted Liens.
Section 7.03. Mergers, Consolidations, Etc. (a) Merge or consolidate with
-----------------------------
any other Person, except that this Section 7.03 shall not apply to:
68
(i) any merger or consolidation of Borrower with any other Person
provided that the Borrower is the surviving corporation after such merger
or consolidation,
(ii) any merger or consolidation of any of the Borrower's Subsidiaries
with any other Person provided that any such Subsidiary shall be the
surviving corporation after such merger or consolidation, shall be a
Wholly-Owned Subsidiary of the Borrower and such acquisition or
consolidation shall be permitted hereunder, or
(iii) any merger between Subsidiaries of Borrower.
Section 7.04. Investments, Loans, Dividends, Etc.
-----------------------------------
(a) Directly or indirectly:
(i) declare or pay any dividend or make any distribution of any kind
or character (whether in cash, securities or other property) on account of
any class of the Borrower's or any of its Subsidiaries' Equity Interests or
to holders thereof (including, without limitation, any payment to
stockholders of the Borrower in connection with a merger or consolidation
involving the Borrower), other than (a) dividends or distributions payable
solely in Equity Interests (other than Disqualified Stock) of the Borrower
or (b) dividends or distributions payable solely to the Borrower or any
Wholly-Owned Subsidiary of the Borrower;
(ii) purchase, redeem or otherwise acquire or retire for value any
Equity Interests of the Borrower, any Subsidiary of the Borrower, or any
other Affiliate of the Borrower (other than any such Equity Interests owned
by the Borrower or any Wholly-Owned Subsidiary of the Borrower);
(iii) make any Investment (other than Permitted Investments); or
(iv) make any payments to any Affiliate of the Borrower as
compensation for management services, except through the issuance of Equity
Interests (other than Disqualified Stock) of the Borrower
(all such payments and other actions set forth in clauses (i) through (iv) above
being collectively referred to as "Restricted Payments"), unless, at the time of
-------------------
and after giving effect to such Restricted Payment:
(I) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof,
69
(II) at the time of such Restricted Payment and after giving pro forma
effect thereto as if such Restricted Payment had been made at the beginning
of the applicable four-quarter period, the Borrower would have been
permitted to incur at least $1.00 of additional Indebtedness pursuant to
the Fixed Charge Coverage Ratio test set forth under Section 6.08(b)
hereof, and
(III) such Restricted Payment, together with the aggregate amount of
all other Restricted Payments declared or made by the Borrower and its
Subsidiaries on or after the Closing Date (excluding Restricted Payments
permitted by Sections 7.04(b)(ii), 7.04(b)(iii), 7.04(b)(iv), 7.04(b)(v)
and 7.04(b)(vi) hereof), is less than the sum of (i) 50% of the
Consolidated Net Income of the Borrower for the period (taken as one
accounting period) from the beginning of the first Fiscal Quarter
commencing after the Closing Date to the end of the Borrower's most
recently ended Fiscal Quarter for which internal financial statements are
available at the time of such Restricted Payment (or, if such Consolidated
Net Income for such period is a deficit, less 100% of such deficit), plus
(ii) 100% of the aggregate net cash proceeds received by the Borrower from
the issue or sale after the Closing Date of Equity Interests of the
Borrower or of debt securities of the Borrower that have been converted
into such Equity Interests (other than Equity Interests (or convertible
debt securities) sold to a Subsidiary of the Borrower and other than
Disqualified Stock or debt securities that have been converted into
Disqualified Stock).
(b) The foregoing clauses (II) and (III) of Section 7.04(a) will not
prohibit:
(i) the payment of any dividend on any class of Capital Stock of the
Borrower or any Subsidiary of the Borrower within 60 days after the date of
declaration thereof, if on the date on which such dividend was declared
such payment would have complied with the provisions of this Agreement; or
(ii) any dividend on shares of Capital Stock payable solely in shares
of Capital Stock (other than Disqualified Stock); or
(iii) any dividend or other distribution payable from a Subsidiary to
the Borrower or any Wholly-Owned Subsidiary; or
(iv) the making of any Investment in exchange for, or out of the
proceeds of, the substantially concurrent sale (other than to a Subsidiary
of the Borrower) of Equity Interests of the Borrower (other than
Disqualified Stock); provided, that any net cash proceeds that are utilized
for any such Investment, and any Consolidated Net Income resulting therefor
shall be excluded from clause (III) of Section 7.04(a) hereof; or
(v) the redemption, repurchase, retirement or other acquisition of any
Equity Interests of the Borrower in exchange for, or out of the proceeds
of, the substantially concurrent sale (other than to a Subsidiary of the
Borrower) of other Equity Interests of
70
the Borrower (other than any Disqualified Stock); provided that any net
cash proceeds that are utilized for any such redemption, repurchase,
retirement or other acquisition, and any Consolidated Net Income resulting
therefrom, shall be excluded from clause (III) of Section 7.04(a) hereof;
or
(vi) the defeasance, redemption or repurchase of pari passu or
Subordinated Debt with the net cash proceeds from an incurrence of
additional Subordinated Debt or the substantially concurrent sale (other
than to a Subsidiary of the Borrower) of Equity Interests of the Borrower
(other than Disqualified Stock); provided, that any net cash proceeds that
are utilized for any such defeasance, redemption or repurchase, and any
Consolidated Net Income resulting therefrom, shall be excluded from clause
(III) of Section 7.04(a) hereof; or
(vii) the repurchase of shares of Capital Stock of the Borrower in
connection with repurchase provisions under employee stock option and stock
purchase agreements or other agreements to compensate management employees
of the Borrower to the extent such payments do not exceed $1.0 million in
the aggregate.
(c) The amount of all Restricted Payments (other than cash) shall be
the fair market value on the date of the Restricted Payment of the asset(s)
proposed to be transferred by the Borrower or such Subsidiary, as the case may
be, pursuant to the Restricted Payment.
Section 7.05. Asset Sales. (a) Engage, directly or indirectly, in an
-----------
Asset Sale (except an Exempt Asset Sale) unless:
(i) the Borrower (or such Subsidiary) receives consideration at the
time of such Asset Sale at least equal to the fair market value of the
assets sold or otherwise disposed of, and in the case of a lease of assets,
a lease providing for rent and other conditions which are no less favorable
to the Borrower (or such Subsidiary) in any material respect than the then
prevailing market conditions (as determined in each case by the Board of
Directors of the Borrower, whose determination shall be conclusive if made
in good faith and evidenced by a Board Resolution set forth in an officers'
certificate of the Borrower delivered to the Agent);
(ii) at least 85% (100% in the case of lease payments) of the
consideration therefor received by the Borrower or such Subsidiary is in
the form of cash or Cash Equivalents; and
(iii) No Default or Event of Default exists or would result
therefrom.
(b) The Borrower may apply, and may permit its Subsidiaries to apply,
Net Proceeds of an Asset Sale (other than an Exempt Asset Sale), at its option,
in each case within 180 days after the consummation of such an Asset Sale:
71
(i) to permanently reduce Indebtedness outstanding hereunder (and
to permanently reduce the Commitments with respect thereto) or pursuant to
the Senior Notes;
(ii) to acquire Eligible Assets or to reimburse the Borrower or
its Subsidiaries for expenditures previously made to acquire Eligible
Assets, provided that any such expenditures were made not more than 180
--------
days prior to the consummation of such Asset Sale and were made in
contemplation of such Asset Sale and for the purpose of replacing the
assets to be disposed of in such Asset Sale; or
(iii) to reimburse the Borrower or its Subsidiaries for
expenditures made, and costs incurred, to repair, rebuild, replace or
restore property subject to loss, damage or taking to the extent that the
Net Proceeds consist of insurance proceeds received on account of such
loss, damage or taking.
Pending the final application of any such Net Proceeds, the Borrower may invest
such Net Proceeds temporarily in Cash Equivalents or apply such Net Proceeds to
reduce amounts outstanding hereunder. Notwithstanding the foregoing, with
respect to any Asset Sale of any Collateral, the Borrower (or such Subsidiary)
shall not be permitted to enter into any Asset Sale with respect thereto unless
and until the Borrower has granted to the Agent, for the ratable benefit of the
Lenders, a perfected security interest in additional Collateral of a quality and
value (including cash or Cash Equivalents) at least equal to the quality and
value of the Collateral subject to the Asset Sale (in each case, as determined
in the reasonable discretion of the Required Lenders); provided, however, that
such requirement for substitute Collateral shall not apply to an Asset Sale of
the Capital Stock or all of substantially all of the assets of Xxxxxxx Aviation
Co. and Xxxxxxx Aviation Management Co.
Section 7.06. Sale and Leaseback Transactions. Enter into any Sale and
-------------------------------
Leaseback Transaction. Notwithstanding the foregoing, the Borrower or any
Subsidiary may enter into a Sale and Leaseback Transaction if:
(a) after giving pro forma effect to any such Sale and Leaseback
Transaction, the Borrower shall be in compliance with Sections 7.01 and
7.02 hereof,
(b) the gross cash proceeds of such Sale and Leaseback Transaction are
at least equal to the fair market value of such property;
(c) the aggregate rent payable by the Borrower in respect of such Sale
and Leaseback Transaction is not in excess of the fair market rental value
of the property leased pursuant to such Sale and Leaseback Transaction; and
(d) the assets subject to such Sale and Leaseback Transaction do not
constitute Collateral.
72
Section 7.07. Transactions with Affiliates. Enter into or suffer to exist
----------------------------
any transaction or a series of related transactions (including, without
limitation the sale, purchase, exchange or lease of assets, property or
services) with any Affiliate (each of the foregoing, an "Affiliate
Transaction"), other than Exempt Affiliate Transactions, unless:
(a) such Affiliate Transaction is on terms that are no less favorable
to the Borrower or the relevant Subsidiary than those that would have been
obtained in a comparable transaction by the Borrower or such Subsidiary
with a Person that is not an Affiliate; and
(b) the Borrower delivers to the Lenders (i) with respect to any
Affiliate Transaction entered into after the Closing Date involving
aggregate consideration in excess of $2.5 million, a Board Resolution duly
adopted by a committee of independent Directors of the Borrower, as set
forth in an Officer's Certificate, certifying that such Affiliate
Transaction complies with clause (a) above.
Section 7.08. Changes in Business. Enter into or engage in any business
-------------------
which is substantially different from the business engaged in (or any reasonable
extensions or expansions thereof) by the Borrower and its Subsidiaries on the
Closing Date.
Section 7.09. ERISA. Take or fail to take any action with respect to any
-----
Plan of any Consolidated Company or, with respect to its ERISA Affiliates, any
Plans which are subject to Title IV of ERISA or to continuation health care
requirements for group health plans under the Tax Code, including without
limitation (i) establishing any such Plan, (ii) amending any such Plan (except
where required to comply with applicable law), (iii) terminating or withdrawing
from any such Plan, or (iv) incurring an amount of unfunded benefit liabilities,
as defined in Section 4001(a)(18) of ERISA, or any withdrawal liability under
Title IV of ERISA with respect to any such Plan, which together with any other
action or omission referred to in this Section 7.09 (taken as a whole) would
have a Materially Adverse Effect, without first obtaining the written approval
of the Required Lenders.
Section 7.10. Limitation on Payment Restrictions Affecting Borrower and
---------------------------------------------------------
its Subsidiaries. Create or otherwise cause or suffer to exist or become
----------------
effective, any consensual encumbrance or restriction on the ability of Borrower
or any of its Subsidiaries to (i) pay dividends or make any other distributions
on any stock of a Subsidiary of the Borrower, or (ii) pay any intercompany debt
owed to Borrower or any Subsidiary of Borrower, or (iii) transfer any of its
property or assets to Borrower or any Subsidiary of Borrower, except any
consensual encumbrance or restriction existing as of the Closing Date.
Section 7.11. Actions Under Certain Documents. Without the prior written
-------------------------------
consent of the Required Lenders (i) modify, amend, cancel or rescind any
agreements or documents evidencing or governing Subordinated Debt or
intercompany debt, (ii) make any payment with respect to Subordinated Debt,
except that current interest accrued on such Subordinated Debt as
73
of the date of this Agreement and all interest subsequently accruing thereon
(whether or not paid currently) may be paid unless a Default or Event of Default
has occurred and is continuing, (iii) voluntarily prepay any portion of
intercompany debt, (iv) amend or modify the Senior Note Indenture or Senior
Notes issued thereunder to (x) increase the interest rate applicable thereto or
fees payable in connection therewith, (y) shorten the maturity or scheduled
amortization thereof, (z) make any covenant or event of default applicable
thereto more restrictive or otherwise to materially increase the obligations or
liabilities of the Consolidated Companies thereunder or (v) prepay, defease,
tender for, or otherwise provide for the payment prior to maturity of, the
Senior Notes, in whole or in part, except in connection with an Asset Sale as
permitted pursuant to Section 7.05 hereof.
Section 7.12. Additional Negative Pledges. Create or otherwise cause or
---------------------------
suffer to exist or become effective, directly or indirectly, any prohibition or
restriction on the creation or existence of any Lien upon any asset of Borrower
or its Subsidiaries, other than pursuant to (i) Section 7.02, (ii) the terms of
any agreement, instrument or other document pursuant to which any Indebtedness
permitted by Section 7.01(c) is incurred by Borrower or its Subsidiaries, so
long as such prohibition or restriction applies only to the property or asset
being financed by such Indebtedness, (iii) the Senior Indenture as in effect on
the Closing Date and (iv) any requirement of applicable law or any regulatory
authority having jurisdiction over any of the Borrower or its Subsidiaries.
Section 7.13. Changes in Fiscal Year. Change the calculation of the
----------------------
Fiscal Year of the Borrower.
Section 7.14. Issuance of Stock by Subsidiaries. Permit any Material
---------------------------------
Subsidiary (either directly or indirectly by the issuance of rights or options
for, or securities convertible into such shares) to issue, sell or dispose of
any shares of its stock of any class (other than directors' qualifying shares,
if any) except to the Borrower or another Wholly-Owned Subsidiary of Borrower.
ARTICLE VIII.
EVENTS OF DEFAULT
-----------------
Upon the occurrence and during the continuance of any of the following
specified events (each an "Event of Default"):
Section 8.01. Payments. Borrower shall fail to make promptly when due
--------
(including, without limitation, by mandatory prepayment) any principal payment
with respect to the Loans, or Borrower shall fail to make any payment of
interest, fee or other amount payable hereunder within two (2) Business Days of
its due date;
74
Section 8.02. Covenants Without Notice. Borrower shall fail to observe or
------------------------
perform any covenant or agreement contained in Sections 6.01, 6.05, 6.07, 6.08,
6.09 or Article VII, provided that Borrower may fail to observe the covenant set
forth in Section 6.08(a) once for any Fiscal Quarter through the third Fiscal
Quarter of 1999 without causing an Event of Default;
Section 8.03. Other Covenants. Borrower shall fail to observe or perform
---------------
any covenant or agreement contained in this Agreement, other than those referred
to in Sections 8.01 and 8.02, and such failure shall remain unremedied for 30
days after the earlier of (i) Borrower's obtaining knowledge thereof, or (ii)
written notice thereof shall have been given to Borrower by Agent or any Lender;
Section 8.04. Representations. Any representation or warranty made or
---------------
deemed to be made by Borrower or any other Credit Party or by any of its
officers under this Agreement or any other Credit Document (including the
Schedules attached thereto), or any certificate or other document submitted to
the Agent or the Lenders by any such Person pursuant to the terms of this
Agreement or any other Credit Document, shall be incorrect in any material
respect when made or deemed to be made or submitted;
Section 8.05. Non-Payments of Other Indebtedness. Parent or any
----------------------------------
Consolidated Company shall fail to make when due (whether at stated maturity, by
acceleration, on demand or otherwise, and after giving effect to any applicable
grace period) any payment of principal of or interest on any Indebtedness (other
than the Obligations) exceeding $1,000,000 individually or in the aggregate;
Section 8.06. Defaults Under Other Agreements; Change In Control
--------------------------------------------------
Provisions. (a) Parent or any Consolidated Company shall fail to observe or
----------
perform any covenants or agreements contained in any agreements or instruments
relating to any of its Indebtedness exceeding $1,000,000 individually or in the
aggregate (after giving effect to any applicable grace period), or any other
event shall occur if the effect of such failure or other event is to accelerate,
or with notice or passage of time or both (after giving effect to any applicable
grace period), to permit the holder of such Indebtedness or any other Person to
accelerate, the maturity of such Indebtedness; or any such Indebtedness shall be
required to be prepaid (other than by a regularly scheduled required prepayment)
in whole or in part prior to its stated maturity; or (b) any event or condition
shall occur or exist which, pursuant to the terms of any Change in Control
Provision, requires or permits the holder(s) of the Indebtedness subject to such
Change in Control Provision to require that such Indebtedness be redeemed,
repurchased, defeased, prepaid or repaid, in whole or in part, or the maturity
of such Indebtedness to be accelerated;
Section 8.07. Bankruptcy. Parent or any Consolidated Company shall
----------
commence a voluntary case concerning itself under the Bankruptcy Code or
applicable foreign bankruptcy laws; or an involuntary case for bankruptcy is
commenced against Parent or any Consolidated Company and the petition is not
controverted within 10 days, or is not dismissed within 60 days, after
commencement of the case; or a custodian (as defined in the Bankruptcy Code) or
similar
75
official under applicable foreign bankruptcy laws is appointed for, or takes
charge of, all or any substantial part of the property of the Parent or any
Consolidated Company; or the Parent or any Consolidated Company commences
proceedings of its own bankruptcy or to be granted a suspension of payments or
any other proceeding under any reorganization, arrangement, adjustment of debt,
relief of debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction, whether now or hereafter in effect, relating to the Parent or any
Consolidated Company or there is commenced against the Parent or any
Consolidated Company any such proceeding which remains undismissed for a period
of 60 days; or the Parent or any Consolidated Company is adjudicated insolvent
or bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; or the Parent or any Consolidated Company suffers any
appointment of any custodian or the like for it or any substantial part of its
property to continue undischarged or unstayed for a period of 60 days; or the
Parent or any Consolidated Company makes a general assignment for the benefit of
creditors; or the Parent or any Consolidated Company shall fail to pay, or shall
state that it is unable to pay, or shall be unable to pay, its debts generally
as they become due; or the Parent or any Consolidated Company shall call a
meeting of its creditors with a view to arranging a composition or adjustment of
its debts; or the Parent or any Consolidated Company shall by any act or failure
to act indicate its consent to, approval of or acquiescence in any of the
foregoing; or any corporate action is taken by the Parent or any Consolidated
Company for the purpose of effecting any of the foregoing;
Section 8.08. ERISA. A Plan of either Parent, a Consolidated Company or
-----
of any of its ERISA Affiliates which is subject to Title IV of ERISA:
(i) shall fail to be funded in accordance with the minimum
funding standard required by applicable law, the terms of such Plan,
Section 412 of the Tax Code or Section 302 of ERISA for any plan year or a
waiver of such standard is sought or granted with respect to such Plan
under applicable law, the terms of such Plan or Section 412 of the Tax Code
or Section 303 of ERISA; or
(ii) is being, or has been, terminated or the subject of
termination proceedings under applicable law or the terms of such Plan; or
(iii) shall require Parent or a Consolidated Company to provide
security under applicable law, the terms of such Plan, Section 401 or 412
of the Tax Code or Section 306 or 307 of ERISA; or
(iv) results in a liability to Parent or a Consolidated Company
under applicable law, the terms of such Plan, or Title IV of ERISA;
and there shall result from any such failure, waiver, termination or other event
described in clauses (i) through (iv) above a liability to the PBGC or a Plan
that would have a Materially Adverse Effect;
76
Section 8.09. Judgments. Judgments or orders for the payment of money in
---------
excess of $2,000,000 individually or in the aggregate (unless the Borrower's
insurance company has admitted liability for such judgment or order with respect
to all amounts in excess of $2,000,000 and such judgment has not resulted in a
Lien on the assets of the Borrower or its Subsidiaries) or otherwise having a
Materially Adverse Effect shall be rendered against Parent or any Consolidated
Company and such judgment or order shall continue unsatisfied (in the case of a
money judgment) and in effect for a period of 35 days during which execution
shall not be effectively stayed or deferred (whether by action of a court, by
agreement or otherwise);
Section 8.10. Ownership of Credit Parties. If Borrower shall at any time
---------------------------
fail to own and control the shares of Voting Stock of any Subsidiary which it
owned or controlled at the time such Subsidiary became a Credit Party hereunder
other than due to sale of the Voting Stock of such Subsidiary permitted pursuant
to Section 7.05 hereof;
Section 8.11. Chairman of the Board of Directors of Parent and Borrower.
---------------------------------------------------------
If Xxxxxx X. Xxxxxxx shall cease for any reason, including without limitation,
death, incompetence or incapacity, to hold the position and exercise the duties
of the Chairman of the Board of the Directors of each of the Parent and the
Borrower and is not replaced within a reasonable period of time by a Person of
comparable experience, expertise and standing in the business community, as
determined by the Required Lenders in the exercise of their reasonable credit
judgment;
Section 8.12. Change in Control. If a Change of Control shall occur;
-----------------
Section 8.13. Default Under Other Credit Documents; Merger Agreement. (x)
------------------------------------------------------
There shall exist or occur any "Event of Default" as provided under the terms of
any other Credit Document, or any Credit Document ceases to be in full force and
effect or the validity or enforceability thereof is disaffirmed by or on behalf
of Borrower or any other Credit Party, or at any time it is or becomes unlawful
for Borrower or any other Credit Party to perform or comply with its obligations
under any Credit Document, or the obligations of Borrower or any other Credit
Party under any Credit Document are not or cease to be legal, valid and binding
on Borrower or any such Credit Party; or (y) any party to the Merger Agreement
shall default with respect to its covenants or obligations thereunder where such
default results in a Materially Adverse Effect with respect to the Credit
Parties; or
Section 8.14. Failure of Merger and other Elements of the Transaction.
-------------------------------------------------------
Failure of the Transaction to be consummated before or substantially
concurrently with the initial Loans hereunder;
then, and in any such event, and at any time thereafter if any Event of Default
shall then be continuing, the Agent may, and upon the written or telex request
of the Required Lenders, shall, take any or all of the following actions,
without prejudice to the rights of the Agent, any Lender or the holder of any
Note to enforce its claims against Borrower or any other Credit Party: (i)
declare all Commitments terminated, whereupon the Commitments of each Lender
shall
77
terminate immediately and any commitment fee shall forthwith become due and
payable without any other notice of any kind; (ii) declare the principal of and
any accrued interest on the Loans, and all other Obligations owing hereunder to
be, whereupon the same shall become, forthwith due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower; provided, that, if an Event of Default specified
--------
in Section 8.07 shall occur, the result which would occur upon the giving of
notice by the Agent to any Credit Party, shall occur automatically without the
giving of any such notice, and (iii) may exercise any other rights or remedies
available under the Credit Documents, at law or in equity. Upon any acceleration
of the Loans outstanding hereunder, all outstanding Letters of Credit shall be
deemed to have been fully drawn and the Borrower shall be required to deposit
cash collateral into the L/C Cash Collateral Account in accordance with the
provisions of Section 2.07(b).
ARTICLE IX.
THE AGENT.
---------
Section 9.01. Appointment of Agent. Each Lender hereby designates
--------------------
SunTrust as Agent to administer all matters concerning the Loans and to act as
herein specified. Each of the Lenders hereby designates Union Bank of
Switzerland, New York Branch as the Syndication Agent and acknowledges that the
Syndication Agent shall have no duties under this Agreement whatsoever but shall
be entitled to all protections afforded the Agent under this Article IX. Each
Lender hereby irrevocably authorizes, and each holder of any Note by the
acceptance of a Note shall be deemed irrevocably to authorize, the Agent to take
such actions on its behalf under the provisions of this Agreement, the other
Credit Documents, and all other instruments and agreements referred to herein or
therein, and to exercise such powers and to perform such duties hereunder and
thereunder as are specifically delegated to or required of the Agent by the
terms hereof and thereof and such other powers as are reasonably incidental
thereto. The Agent may perform any of its duties hereunder by or through their
agents or employees.
Section 9.02. Authorization of Agent with Respect to the Security
---------------------------------------------------
Documents. (a) Each Lender hereby authorizes the Agent to enter into each of
---------
the Security Documents substantially in the form attached hereto, and to take
all action contemplated thereby. All rights and remedies under the Security
Documents may be exercised by the Agent for the benefit of the Agent and the
Lenders and the other beneficiaries thereof upon the terms thereof. The Lenders
further agree that the Agent may assign its rights and obligations under any of
the Security Documents to any affiliate of the Agent or to any trustee, if
necessary or appropriate under applicable law, which assignee in each such case
shall (subject to compliance with any requirements of applicable law governing
the assignment of such Security Documents) be entitled to all the rights of the
Agent under and with respect to the applicable Security Document.
(b) In each circumstance where, under any provision of any Security
Document, the Agent shall have the right to grant or withhold any consent,
exercise any remedy,
78
make any determination or direct any action by the Agent under such Security
Document, the Agent shall act in respect of such consent, exercise of remedies,
determination or action, as the case may be, with the consent of and at the
direction of the Required Lenders; provided, however, that no such consent of
-------- -------
the Required Lenders shall be required with respect to any consent,
determination or other matter that is, in the Agent's judgment, ministerial or
administrative in nature. In each circumstance where any consent of or
direction from the Required Lenders is required, the Agent shall send to the
Lenders a notice setting forth a description in reasonable detail of the matter
as to which consent or direction is requested and the Agent's proposed course of
action with respect thereto. In the event the Agent shall not have received a
response from any Lender within five (5) Business Days after such Lender's
receipt of such notice, such Lender shall be deemed to have agreed to the course
of action proposed by the Agent.
Section 9.03. Nature of Duties of Agent. The Agent shall have no duties
-------------------------
or responsibilities except those expressly set forth in this Agreement and the
other Credit Documents. None of the Agent nor any of its respective officers,
directors, employees or agents shall be liable for any action taken or omitted
by it as such hereunder or in connection herewith, unless caused by its or their
gross negligence or willful misconduct. The duties of the Agent shall be
ministerial and administrative in nature; the Agent shall not have by reason of
this Agreement a fiduciary relationship in respect of any Lender; and nothing in
this Agreement, express or implied, is intended to or shall be so construed as
to impose upon the Agent any obligations in respect of this Agreement or the
other Credit Documents except as expressly set forth herein.
Section 9.04. Lack of Reliance on the Agent.
-----------------------------
(a) Independently and without reliance upon the Agent, each Lender, to the
extent it deems appropriate, has made and shall continue to make (i) its own
independent investigation of the financial condition and affairs of the Credit
Parties in connection with the taking or not taking of any action in connection
herewith, and (ii) its own appraisal of the creditworthiness of the Credit
Parties, and, except as expressly provided in this Agreement, the Agent shall
have no duty or responsibility, either initially or on a continuing basis, to
provide any Lender with any credit or other information with respect thereto,
whether coming into its possession before the making of the Loans or at any time
or times thereafter.
(b) The Agent shall not be responsible to any Lender for any recitals,
statements, information, representations or warranties herein or in any
document, certificate or other writing delivered in connection herewith or for
the execution, effectiveness, genuineness, validity, enforceability,
collectibility, priority or sufficiency of this Agreement, the Notes, the
Guaranty Agreement or any other documents contemplated hereby or thereby, or the
financial condition of the Credit Parties, or be required to make any inquiry
concerning either the performance or observance of any of the terms, provisions
or conditions of this Agreement, the Notes, the Guaranty Agreement or the other
documents contemplated hereby or thereby, or the
79
financial condition of the Credit Parties, or the existence or possible
existence of any Default or Event of Default.
Section 9.05. Certain Rights of the Agent. If the Agent shall request
---------------------------
instructions from the Required Lenders with respect to any action or actions
(including the failure to act) in connection with this Agreement, the Agent
shall be entitled to refrain from such act or taking such act, unless and until
the Agent shall have received instructions from the Required Lenders; and the
Agent shall not incur liability in any Person by reason of so refraining.
Without limiting the foregoing, no Lender shall have any right of action
whatsoever against the Agent as a result of the Agent acting or refraining from
acting hereunder in accordance with the instructions of the Required Lenders.
Section 9.06. Reliance by Agent. The Agent shall be entitled to rely, and
-----------------
shall be fully protected in relying, upon any note, writing, resolution, notice,
statement, certificate, telex, teletype or telecopier message, cable gram,
radiogram, order or other documentary, teletransmission or telephone message
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person. The Agent may consult with legal counsel (including
counsel for any Credit Party), independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken by it in good faith in accordance with the advice of such counsel,
accountants or experts.
Section 9.07. Indemnification of Agent. To the extent the Agent is not
------------------------
reimbursed and indemnified by the Credit Parties, each Lender will reimburse and
indemnify the Agent, ratably according to the respective amounts of the Loans
outstanding under all Facilities (or if no amounts are outstanding, ratably in
accordance with the Commitments), in either case, for and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including counsel fees and disbursements) or disbursements of
any kind or nature whatsoever which may be imposed on, incurred by or asserted
against the Agent in performing its duties hereunder, in any way relating to or
arising out of this Agreement or the other Credit Documents; provided that no
--------
Lender shall be liable to the Agent for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Agent's gross negligence or willful
misconduct.
Section 9.08. The Agent in its Individual Capacity. With respect to its
------------------------------------
obligation to lend under this Agreement, the Loans made by it and the Notes
issued to it, the Agent shall have the same rights and powers hereunder as any
other Lender or holder of a Note and may exercise the same as though it were not
performing the duties specified herein; and the terms "Lenders", "Required
Lenders", "holders of Notes", or any similar terms shall, unless the context
clearly otherwise indicates, include the Agent in its individual capacity. The
Agent may accept deposits from, lend money to, and generally engage in any kind
of banking, trust, financial advisory or other business with the Consolidated
Companies or any affiliate of the Consolidated Companies as if it were not
performing the duties specified herein, and may accept fees and other
80
consideration from the Consolidated Companies for services in connection with
this Agreement and otherwise without having to account for the same to the
Lenders.
Section 9.09. Holders of Notes. The Agent may deem and treat the payee of
----------------
any Note as the owner thereof for all purposes hereof unless and until a written
notice of the assignment or transfer thereof shall have been filed with the
Agent. Any request, authority or consent of any Person who, at the time of
making such request or giving such authority or consent, is the holder of any
Note shall be conclusive and binding on any subsequent holder, transferee or
assignee of such Note or of any Note or Notes issued in exchange therefor.
Section 9.10. Successor Agent.
---------------
(a) The Agent may resign at any time by giving written notice thereof to
the Lenders and Borrower and may be removed at any time with or without cause by
the Required Lenders; provided, however, the Agent may not resign or be removed
-------- -------
until a successor Agent has been appointed and shall have accepted such
appointment. Upon any such resignation or removal, the Required Lenders shall
have the right to appoint a successor Agent subject to Borrower's prior written
approval. If no successor Agent shall have been so appointed by the Required
Lenders, and shall have accepted such appointment, within 30 days after the
retiring Agent's giving of notice of resignation or the Required Lenders'
removal of the retiring Agent, then the retiring Agent may, on behalf of the
Lenders, appoint a successor Agent subject to Borrower's prior written approval,
which shall be a bank which maintains an office in the United States, or a
commercial bank organized under the laws of the United States of America or any
State thereof, or any Affiliate of such bank, having a combined capital and
surplus of at least $1,000,000,000.
(b) Upon the acceptance of any appointment as the Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations under
this Agreement. After any retiring Agent's resignation or removal hereunder as
Agent, the provisions of this Article IX shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was an Agent under this
Agreement.
ARTICLE X.
MISCELLANEOUS
-------------
Section 10.01. Notices. All notices, requests and other communications to
-------
any party hereunder shall be in writing (including bank wire, telex, telecopy or
similar teletransmission or writing) and shall be given to such party at its
address or applicable teletransmission number set forth on the signature pages
hereof, or such other address or applicable teletransmission number
81
as such party may hereafter specify by notice to the Agent and Borrower. Each
such notice, request or other communication shall be effective (i) if given by
telex, when such telex is transmitted to the telex number specified in this
Section and the appropriate answerback is received, (ii) if given by mail, 72
hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid, (iii) if given by telecopy, when such
telecopy is transmitted to the telecopy number specified in this Section and the
appropriate confirmation is received, or (iv) if given by any other means
(including, without limitation, by air courier), when delivered or received at
the address specified in this Section; provided that notices to the Agent shall
--------
not be effective until received.
Section 10.02. Amendments, Etc. No amendment or waiver of any provision
----------------
of this Agreement or the other Credit Documents, nor consent to any departure by
any Credit Party therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Required Lenders (and in the case of any
amendment, the applicable Credit Party), and then such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given; provided that no amendment, waiver or consent shall, unless in
--------
writing and signed by all the Lenders do any of the following: (i) waive any of
the conditions specified in Section 4.01 or 4.02, (ii) increase the Commitments
or contractual obligations of the Lenders to Borrower under this Agreement,
(iii) reduce the principal of, or interest on, the Notes or any fees hereunder,
(iv) postpone any date fixed for the payment in respect of principal of, or
interest on, the Notes or any fees hereunder, (v) change the percentage of the
Commitments or of the aggregate unpaid principal amount of the Notes, or the
number or identity of Lenders which shall be required for the Lenders or any of
them to take any action hereunder, (vi) agree to release any Guarantor from its
obligations under any Guaranty Agreement or any Collateral from the Security
Documents (other than in connection with an Asset Sale pursuant to Section 7.05
where the conditions of such Section have been satisfied), (vii) modify the
definition of "Required Lenders," or (viii) modify this Section 10.02.
Notwithstanding the foregoing, no amendment, waiver or consent shall, unless in
writing and signed by the Agent in addition to the Lenders required hereinabove
to take such action, affect the rights or duties of the Agent under this
Agreement or under any other Credit Document.
Section 10.03. No Waiver; Remedies Cumulative. No failure or delay on the
------------------------------
part of the Agent, any Lender or any holder of a Note in exercising any right or
remedy hereunder or under any other Credit Document, and no course of dealing
between any Credit Party and the Agent, any Lender or the holder of any Note
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right or remedy hereunder or under any other Credit Document preclude any
other or further exercise thereof or the exercise of any other right or remedy
hereunder or thereunder. The rights and remedies herein expressly provided are
cumulative and not exclusive of any rights or remedies which the Agent, any
Lender or the holder of any Note would otherwise have. No notice to or demand
on any Credit Party not required hereunder or under any other Credit Document in
any case shall entitle any 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, the
82
Lenders or the holder of any Note to any other or further action in any
circumstances without notice or demand.
Section 10.04. Payment of Expenses, Etc. Borrower shall:
-------------------------
(i) whether or not the transactions hereby contemplated are
consummated, pay all reasonable, out-of-pocket costs and expenses of the
Agent in the administration (both before and after the execution hereof and
including reasonable expenses actually incurred relating to advice of
counsel as to the rights and duties of the Agent and the Lenders with
respect thereto) of, and in connection with the preparation, execution and
delivery of, preservation of rights under, enforcement of, and, after a
Default or Event of Default, refinancing, renegotiation or restructuring
of, this Agreement and the other Credit Documents and the documents and
instruments referred to therein, and any amendment, waiver or consent
relating thereto (including, without limitation, the reasonable fees
actually incurred and disbursements of counsel for the Agent), and in the
case of enforcement of this Agreement or any Credit Document after an Event
of Default, all such reasonable, out-of-pocket costs and expenses
(including, without limitation, the reasonable fees actually incurred and
reasonable disbursements and changes of counsel), for any of the Lenders;
(ii) subject, in the case of certain Taxes, to the applicable
provisions of Section 3.07(b), pay and hold each of the Lenders harmless
from and against any and all present and future stamp, documentary, and
other similar Taxes with respect to this Agreement, the Notes and any other
Credit Documents, any collateral described therein, or any payments due
thereunder, and save each Lender harmless from and against any and all
liabilities with respect to or resulting from any delay or omission to pay
such Taxes; and
(iii) indemnify the Agent and each Lender, and their respective
officers, directors, employees, representatives and agents from, and hold
each of them harmless against, any and all costs, losses, liabilities,
claims, damages or expenses incurred by any of them (whether or not any of
them is designated a party thereto) (an "Indemnitee") arising out of or by
reason of any investigation, litigation or other proceeding related to any
actual or proposed use of the proceeds of any of the Loans or any Credit
Party's entering into and performing of the Agreement, the Notes, or the
other Credit Documents, including, without limitation, the reasonable fees
actually incurred and disbursements of counsel incurred in connection with
any such investigation, litigation or other proceeding; provided, however,
-------- -------
Borrower shall not be obligated to indemnify any Indemnitee for any of the
foregoing arising out of such Indemnitee's gross negligence or willful
misconduct;
(iv) without limiting the indemnities set forth in subsection (iii)
above, indemnify each Indemnitee for any and all expenses and costs
(including without limitation, remedial, removal, response, abatement,
cleanup, investigative, closure and
83
monitoring costs), losses, claims (including claims for contribution or
indemnity and including the cost of investigating or defending any claim
and whether or not such claim is ultimately defeated, and whether such
claim arose before, during or after any Credit Party's ownership,
operation, possession or control of its business, property or facilities or
before, on or after the date hereof, and including also any amounts paid
incidental to any compromise or settlement by the Indemnitee or Indemnitees
to the holders of any such claim), lawsuits, liabilities, obligations,
actions, judgments, suits, disbursements, encumbrances, liens, damages
(including without limitation damages for contamination or destruction of
natural resources), penalties and fines of any kind or nature whatsoever
(including without limitation in all cases the reasonable fees actually
incurred, other charges and disbursements of counsel in connection
therewith) incurred, suffered or sustained by that Indemnitee based upon,
arising under or relating to Environmental Laws based on, arising out of or
relating to in whole or in part, the existence or exercise of any rights or
remedies by any Indemnitee under this Agreement, any other Credit Document
or any related documents.
If and to the extent that the obligations of Borrower under this Section
10.04 are unenforceable for any reason, Borrower hereby agrees to make the
maximum contribution to the payment and satisfaction of such obligations
which is permissible under applicable law.
Section 10.05. Right of Setoff. In addition to and not in limitation of
---------------
all rights of offset that any Lender or other holder of a Note may have under
applicable law, each Lender or other holder of a Note shall, upon the occurrence
of any Event of Default and whether or not such Lender or such holder has made
any demand or any Credit Party's obligations have matured, have the right to
appropriate and apply to the payment of any Credit Party's obligations hereunder
and under the other Credit Documents, all deposits of any Credit Party (general
or special, time or demand, provisional or final) then or thereafter held by and
other indebtedness or property then or thereafter owing by such Lender or other
holder to any Credit Party, whether or not related to this Agreement or any
transaction hereunder.
Section 10.06. Benefit of Agreement; Assignments; Participations.
-------------------------------------------------
(a) This 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 Borrower may not assign or transfer any of its interest
hereunder without the prior written consent of the Lenders.
(b) Any Lender may make, carry or transfer Loans at, to or for the
account of, any of its branch offices or the office of an Affiliate of such
Lender.
(c) Each Lender may assign all or a portion of its interests, rights
and obligations under this Agreement (including all or a portion of any of its
Commitments and the
84
Loans at the time owing to it and the Notes held by it) to any Eligible
Assignee; provided, however, that (i) the Borrower must give its prior written
-------- -------
consent to such assignment unless such assignment is an Affiliate of the
assigning Lender or unless an Event of Default has occurred and is continuing
hereunder, (ii) the amount of the Commitments of the assigning Lender subject to
each assignment (determined as of the date the assignment and acceptance with
respect to such assignment is delivered to the Agent) shall not be less than an
amount equal to $5,000,000 or greater integral multiplies of $1,000,000 (or such
lesser amount as shall constitute the entire Commitment of such Lender) and
(iii) the parties to each such assignment shall execute and deliver to the Agent
an Assignment and Acceptance, together with a Note or Notes subject to such
assignment and, unless such assignment is to an Affiliate of such Lender, a
processing and recordation fee of $3,000. Borrower shall not be responsible for
such processing and recordation fee or any costs or expenses incurred by any
Lender or the Agent in connection with such assignment. From and after the
effective date specified in each Assignment and Acceptance, which effective date
shall be at least five (5) Business Days after the execution thereof, the
assignee thereunder shall be a party hereto and to the extent of the interest
assigned by such Assignment and Acceptance, have the rights and obligations of a
Lender under this Agreement. Within five (5) Business Days after receipt of the
notice and the Assignment and Acceptance, Borrower shall execute and deliver to
the Agent, in exchange for the surrendered Note or Notes (which Agent shall
deliver to Borrower forthwith), a new Note or Notes to the order of such
assignee in a principal amount equal to the applicable Commitments assumed by it
pursuant to such Assignment and Acceptance and new Note or Notes to the
assigning Lender in the amount of its retained Commitment or Commitments. Such
new Note or Notes shall be in an aggregate principal amount equal to the
aggregate principal amount of such surrendered Note or Notes, shall be dated the
date of the surrendered Note or Notes which they replace, and shall otherwise be
in substantially the form attached hereto.
(d) Each Lender may, without the consent of Borrower or the Agent,
sell participations to one or more banks or other entities in all or a portion
of its rights and obligations under this Agreement (including all or a portion
of its Commitments in the Loans owing to it and the Notes held by it), provided,
--------
however, that (i) such Lender's obligations under this Agreement shall remain
-------
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) the participating bank or
other entity shall not be entitled to the benefit (except through its selling
Lender) of the cost protection provisions contained in Article III of this
Agreement, and (iv) Borrower and the Agent and other Lenders shall continue to
deal solely and directly with each Lender in connection with such Lender's
rights and obligations under this Agreement and the other Credit Documents, and
such Lender shall retain the sole right to enforce the obligations of Borrower
relating to the Loans and to approve any amendment, modification or waiver of
any provisions of this Agreement. Each Lender shall promptly notify in writing
the Agent and the Borrower of any sale of a participation hereunder.
(e) Any Lender or participant may, in connection with the assignment
or participation or proposed assignment or participation, pursuant to this
Section, disclose to the
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assignee or participant or proposed assignee or participant any information
relating to Borrower or the other Consolidated Companies furnished to such
Lender by or on behalf of Borrower or any other Consolidated Company. With
respect to any disclosure of confidential, non-public, proprietary information,
such proposed assignee or participant shall agree to use the information only
for the purpose of making any necessary credit judgments with respect to this
credit facility and not to use the information in any manner prohibited by any
law, including without limitation, the securities laws of the United States.
The proposed participant or assignee shall agree not to disclose any of such
information except (i) to directors, employees, auditors or counsel to whom it
is necessary to show such information, each of whom shall be informed of the
confidential nature of the information, (ii) in any statement or testimony
pursuant to a subpoena or order by any court, governmental body or other agency
asserting jurisdiction over such entity, or as otherwise required by law
(provided prior notice is given to Borrower and the Agent unless otherwise
prohibited by the subpoena, order or law), and (iii) upon the request or demand
of any regulatory agency or authority with proper jurisdiction. The proposed
participant or assignee shall further agree to return all documents or other
written material and copies thereof received from any Lender, the Agent or
Borrower relating to such confidential information unless otherwise properly
disposed of by such entity.
(f) Any Lender may at any time assign all or any portion of its rights
in this Agreement and the Notes issued to it to a Federal Reserve Bank; provided
--------
that no such assignment shall release the Lender from any of its obligations
hereunder.
(g) If (i) any Taxes referred to in Section 3.07(b) have been levied
or imposed so as to require withholdings and reductions by the Borrower and
payment by the Borrower of additional amounts to any Lender as a result thereof
or any Lender shall make demand for payment of any material additional amounts
as compensation for increased cost pursuant to Section 3.10, then and in such
event, upon request from the Borrower delivered to such Lender, such Lender
shall assign, in accordance with the provisions of Section 10.06(c), all of its
rights and obligations under this Agreement and the other Credit Documents to an
Eligible Assignee selected by the Borrower and consented to by the Agent in
consideration for the payment by such assignee to the Lender of the principal of
and interest on the outstanding Loans accrued to the date of such assignment,
the assumption of such Lender's Commitments hereunder, together with any and all
other amounts owing to such Lender under any provisions of this Agreement or the
other Credit Documents accrued to the date of such assignment.
Section 10.07. Governing Law; Submission to Jurisdiction.
-----------------------------------------
(a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER AND UNDER THE NOTES SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES
THEREOF) OF THE STATE OF GEORGIA.
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(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT, THE
NOTES OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE SUPERIOR COURT OF
XXXXXX COUNTY, GEORGIA, OR ANY OTHER COURT OF THE STATE OF GEORGIA OR OF THE
UNITED STATES OF AMERICA FOR THE NORTHERN DISTRICT OF GEORGIA, AND, BY EXECUTION
AND DELIVERY OF THIS AGREEMENT, BORROWER HEREBY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE
AFORESAID COURTS. THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE TRIAL BY JURY TO
THE EXTENT ALLOWED BY LAW, AND BORROWER AND ACQUISITION SUB HEREBY IRREVOCABLY
WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING
OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH
RESPECTIVE JURISDICTIONS.
(c) EACH OF ACQUISITION SUB AND BORROWER HEREBY IRREVOCABLY DESIGNATES
NATIONAL REGISTERED AGENTS, INC. AND CT CORPORATION SYSTEM, RESPECTIVELY, AS ITS
DESIGNEE, APPOINTEE AND LOCAL AGENT TO RECEIVE, FOR AND ON BEHALF OF ACQUISITION
SUB AND BORROWER, SERVICE OF PROCESS IN SUCH RESPECTIVE JURISDICTIONS IN ANY
LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR THE NOTES OR ANY
DOCUMENT RELATED THERETO. IT IS UNDERSTOOD THAT A COPY OF SUCH PROCESS SERVED
ON SUCH LOCAL AGENT WILL BE PROMPTLY FORWARDED BY SUCH LOCAL AGENT AND BY THE
SERVER OF SUCH PROCESS BY MAIL TO ACQUISITION SUB AND BORROWER AT ITS ADDRESS
SET FORTH OPPOSITE ITS SIGNATURE BELOW, BUT THE FAILURE OF ACQUISITION SUB OR
BORROWER TO RECEIVE SUCH COPY SHALL NOT AFFECT IN ANY WAY THE SERVICE OF SUCH
PROCESS. EACH OF ACQUISITION SUB OR BORROWER FURTHER IRREVOCABLY CONSENTS TO
THE SERVICE OF PROCESS 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 BORROWER OR ACQUISITION SUB AT ITS SAID ADDRESS, SUCH
SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING.
(d) Nothing herein shall affect the right of the Agent, any Lender,
any holder of a Note or any Credit Party to serve process in any other manner
permitted by law or to commence legal proceedings or otherwise proceed against
Borrower or Acquisition Sub in any other jurisdiction.
Section 10.08. Independent Nature of Lenders' Rights. The amounts payable
-------------------------------------
at any time hereunder to each Lender shall be a separate and independent debt,
and each Lender shall be
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entitled to protect and enforce its rights pursuant to this Agreement and its
Notes, and it shall not be necessary for any other Lender to be joined as an
additional party in any proceeding for such purpose.
Section 10.09. Counterparts. This Agreement may be executed in any number
------------
of counterparts and by the different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument.
Section 10.10. Effectiveness; Termination of Commitments; Survival.
---------------------------------------------------
(a) This Agreement shall become effective on the date on which all of
the parties hereto shall have signed a copy hereof (whether the same or
different copies) and shall have delivered the same to the Agent or, in the case
of the Lenders, shall have given to the Agent written or telex notice (actually
received) that the same has been signed and mailed to them.
(b) The obligations of Borrower under Sections 3.07(b), 3.10, 3.12,
3.13, 3.16 and 10.04 hereof shall survive the payment in full of the Notes after
the Maturity Date. All representations and warranties made herein, in the
certificates, reports, notices, and other documents delivered pursuant to this
Agreement shall survive the execution and delivery of this Agreement, the other
Credit Documents, and such other agreements and documents, the making of the
Loans hereunder, and the execution and delivery of the Notes.
Section 10.11. Severability. In case any provision in or obligation under
------------
this Agreement or the other Credit Documents shall be invalid, illegal or
unenforceable, in whole or in part, in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
Section 10.12. Independence of Covenants. All covenants hereunder shall
-------------------------
be given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or be otherwise within the limitation of, another covenant, shall
not avoid the occurrence of a Default or an Event of Default if such action is
taken or condition exists.
Section 10.13. Change in Accounting Principles, Fiscal Year or Tax Laws.
--------------------------------------------------------
If (i) any preparation of the financial statements referred to in Section 6.07
hereafter occasioned by the promulgation of rules, regulations, pronouncements
and opinions by or required by the Financial Accounting Standards Board or the
American Institute of Certified Public Accounts (or successors thereto or
agencies with similar functions) result in a material change in the method of
calculation of financial covenants, standards or terms found in this Agreement,
(ii) there is any change in Borrower's fiscal quarter or Fiscal Year, or (iii)
there is a material change in federal tax laws which materially affects any of
the Consolidated Companies' ability to comply with the
88
financial covenants, standards or terms found in this Agreement, Borrower and
the Required Lenders agree to enter into negotiations in order to amend such
provisions so as to equitably reflect such changes with the desired result that
the criteria for evaluating any of the Consolidated Companies' financial
condition shall be the same after such changes as if such changes had not been
made. Unless and until such provisions have been so amended, the provisions of
this Agreement shall govern.
Section 10.14. Intent Not To Violate Usury Laws. It is the intent of the
--------------------------------
parties hereto not to violate any federal or state law, rule or regulation
pertaining either to usury or to the contracting for or charging or collecting
of interest, and the Borrower and the Agent and Lenders agree that, should any
provision of this Agreement or of the Notes, or any act performed hereunder or
thereunder, violate any such law, rule or regulation, then the excess of
interest or loan charges contracted for or charged or collected over the maximum
lawful rate of interest shall be applied to the outstanding principal
indebtedness due to the Lenders by the Borrower under this Agreement.
Section 10.15. Headings Descriptive; Entire Agreement. The headings of
--------------------------------------
the several sections and subsections of this Agreement are inserted for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Agreement. This Agreement, the other Credit Documents,
and the agreements and documents required to be delivered pursuant to the terms
of this Agreement constitute the entire agreement among the parties hereto and
thereto regarding the subject matters hereof and thereof and supersede all prior
agreements, representations and understandings related to such subject matters.
[SIGNATURES SET FORTH ON NEXT PAGE]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their duly authorized officers as of the day and year
first above written.
Address for Notices: TKC ACQUISITION CORP.
-------------------
c/x Xxxxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxxxx
000 Xxxxxxxxx Xxxxxx ------------------------------------
Suite 5300 Xxxxxx X. Xxxxxxx
Xxxxxxx, Xxxxxxx 00000 Chairman and Chief Executive Officer
Telecopy No.: 404/527-4198 Attest: /s/ Xxxxxxxx X. Xxxxxxxx
--------------------------------
Xxxxxxxx X. Xxxxxxxx
Secretary
[CORPORATE SEAL]
90
Address for Notices: SUNTRUST BANK, ATLANTA,
-------------------
00 Xxxx Xxxxx, X.X.
00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000 By: /s/ J. Xxxxxxxxxxx Xxxxxxx
Attention: J. Xxxxxxxxxxx Xxxxxxx -------------------------------------
J. Xxxxxxxxxxx Xxxxxxx
First Vice President
Telecopy No.: 404/827-6270
By: /s/ Xxxxx X. XxxXxxxxx
-------------------------------------
Xxxxx X. XxxXxxxxx
Vice President
REVOLVING LOAN COMMITMENT: $15,000,000.00
PRO RATA SHARE: 60%
91
Address for Notices:
-------------------
UNION BANK OF SWITZERLAND,
000 Xxxx Xxxxxx XXX XXXX BRANCH, INDIVIDUALLY AND AS
Xxx Xxxx, Xxx Xxxx 00000 SYNDICATION AGENT
Attention: Xxxxxx Xxxxxxxx
By: /s/ Xxxxxx Xxxxxxxx
------------------------------------
Title: V.P.
Telecopy No.: (000) 000-0000 ---------------------------------
By: /s/ Xxxx X. Xxxxxxx
------------------------------------
Title: Assistant Vice-President
---------------------------------
REVOLVING LOAN COMMITMENT: $10,000,000.00
PRO RATA SHARE: 40%
[Signature Page to Credit Agreement]
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Address for Notices: SUNTRUST BANK, ATLANTA,
------------------- AS AGENT
00 Xxxx Xxxxx, X.X.
00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000 By: /s/ J. Xxxxxxxxxxx Xxxxxxx
Attention: J. Xxxxxxxxxxx Xxxxxxx -------------------------------------
J. Xxxxxxxxxxx Xxxxxxx
First Vice President
Telecopy No.: 404/827-6270
By: /s/ Xxxxx X. XxxXxxxxx
-------------------------------------
Xxxxx X. XxxXxxxxx
Vice President
Payment Office:
--------------
00 Xxxx Xxxxx, X.X.
00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
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ASSUMPTION
----------
THE XXXXXXX COMPANY, a Tennessee corporation, hereby expressly assumes,
concurrently with the consummation of the Merger and the initial Advance
pursuant to the Credit Agreement, all obligations of TKC Acquisition Corp.
arising pursuant to the foregoing Agreement, the Notes and all other Credit
Documents.
IN WITNESS WHEREOF, the undersigned has caused its duly authorized officers
to execute this Agreement as of the date first above written.
Address for Notices: THE XXXXXXX COMPANY
-------------------
The Xxxxxxx Building
One Union Square By: /s/ Xxxxxx X. Xxxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000 ------------------------------------
Attn: Chairman Xxxxxx X. Xxxxxxx
Chairman and Chief Executive Officer
Attest: /s/ Xxxxxxxx X. Xxxxxxxx
--------------------------------
Xxxxxxxx X. Xxxxxxxx
Secretary
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