1
EXHIBIT 10.1
SYNDICATION AMENDMENT AND ASSIGNMENT
THIS SYNDICATION AMENDMENT AND ASSIGNMENT (this "Amendment"), dated as
of September 17, 1998, is by and among THE PROFIT RECOVERY GROUP INTERNATIONAL ,
INC., a Georgia corporation (the "Borrower"), certain Subsidiaries of the
Borrower (each a "Subsidiary Guarantor", and collectively, the "Subsidiary
Guarantors"), THE PERSON IDENTIFIED AS THE "EXISTING LENDER" ON THE SIGNATURE
PAGES HERETO (the "Existing Lender"), THE PERSONS IDENTIFIED AS "NEW LENDERS" ON
THE SIGNATURE PAGES HERETO (the "New Lenders" and, together with the Existing
Lender, the "Lenders") and NATIONSBANK, N.A., as Agent for the Lenders (the
"Agent").
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement dated as of July 29, 1998
(the "Existing Credit Agreement") among the Borrower, the Subsidiary Guarantors,
the Existing Lender and the Agent, the Existing Lender has extended commitments
to make certain credit facilities available to the Borrower; and
WHEREAS, the parties hereto have agreed to amend the Existing Credit
Agreement as set forth herein;
NOW, THEREFORE, in consideration of the agreements herein contained and
other good and valuable consideration, the parties hereby agree as follows:
PART I
DEFINITIONS
SUBPART 1.1. Certain Definitions. Unless otherwise defined
herein or the context otherwise requires, the following terms used in
this Amendment, including its preamble and recitals, have the following
meanings:
"Amended Credit Agreement" means the Existing Credit
Agreement as amended hereby.
"Amendment Effective Date" shall have the meaning set
forth in Subpart 4.1.
SUBPART 1.2. Other Definitions. Unless otherwise defined
herein or the context otherwise requires, terms used in this Amendment,
including its preamble and recitals, have the meanings provided in the
Amended Credit Agreement.
2
PART II
AMENDMENTS TO EXISTING CREDIT AGREEMENT
Effective on (and subject to the occurrence of) the Amendment Effective
Date, the Existing Credit Agreement is hereby amended in accordance with this
Part II. Except as so amended, the Existing Credit Agreement shall continue in
full force and effect.
SUBPART 2.1. Amendments to Section 1.1(a).
(a) The definition of "Upfront Fee" appearing in Section 1.1 of the
Credit Agreement is hereby deleted.
(b) References to "Section 3.5(b)" appearing in the definitions of
"Unused Fee" and "Unused Fee Calculation Period", each appearing in Section 1.1
of the Credit Agreement, are hereby amended to refer to "Section 3.5(a)".
SUBPART 2.2. Amendment to Section 2.1(a). The first sentence of Section
2.1(a) of the Credit Agreement is hereby amended and restated in its entirety to
read as follows:
(a) Revolving Commitment. Subject to the terms and conditions hereof
and in reliance upon the representations and warranties set forth herein, each
Lender severally agrees to make available to the Borrower such Lender's
Revolving Commitment Percentage of revolving credit loans requested by the
Borrower in Dollars ("Revolving Loans") from time to time from the Closing Date
until the Maturity Date, or such earlier date as the Revolving Commitments shall
have been terminated as provided herein; provided, however, that (i) with regard
to the Lenders collectively, the Dollar Amount (determined as of the most recent
Determination Date) of Revolving Obligations outstanding shall not exceed TWO
HUNDRED MILLION DOLLARS ($200,000,000) (as such aggregate maximum amount may be
reduced from time to time as provided in Section 3.4, the "Revolving Committed
Amount"); provided, further, (ii) with regard to each Lender individually, the
Dollar Amount (determined as of the most recent Determination Date) of such
Lender's Revolving Commitment Percentage of the sum of the Revolving Loans plus
Foreign Currency Loans plus LOC Obligations plus Swingline Loans outstanding
shall not exceed such Lender's Revolving Committed Amount.
SUBPART 2.3. Amendment to Section 7.11(iii). Reference to
"$105,000,0000" appearing in Section 7.11(iii) of the Credit Agreement is hereby
amended to read as "$105,000,000".
-2-
3
SUBPART 2.4. Amendment to Section 7.16. Section 7.16 of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:
7.16 FURTHER ASSURANCES.
Within 90 days after the Closing Date, the Credit Parties agree to provide
to the Agent (a) a pledge of 66% of the stock of PRG France S.A. and (b) an
opinion, in a form and from legal counsel reasonably acceptable to the Agent,
which shall cover the enforceability, the perfection and the priority of the
Lenders' security interest in the pledged shares of PRG France S.A.
SUBPART 2.5. Amendment to Schedule 2.1(a). Schedule 2.1(a) of the
Existing Credit Agreement is hereby deleted in its entirety and a new schedule
in the form of Schedule 2.1(a) attached hereto is substituted therefor.
SUBPART 2.6. Amendment to Exhibit 7.1(c). The attachment to Exhibit
7.1(c) of the Existing Credit Agreement is hereby deleted in its entirety and a
new attachment to Exhibit 7.1(c) in the form attached hereto is substituted
therefor.
PART III
ASSIGNMENTS AND ASSUMPTIONS
The Existing Lender hereby sells and assigns, without recourse, to the New
Lenders, and the New Lenders hereby purchase and assume, without recourse, from
the Existing Lender, effective as of the Amendment Effective Date, such
interests in the Existing Lender's rights and obligations under the Existing
Credit Agreement (including, without limitation, the Commitments of the Existing
Lender on the Amendment Effective Date and the Loans owing to the Existing
Lender which are outstanding on the Amendment Effective Date) as shall be
necessary in order to give effect to the reallocations of the Revolving
Committed Amount, the Revolving Commitment Percentages, the Foreign Currency
Committed Amount and the Foreign Currency Commitment Percentages effected by the
amendment to Schedule 2.1(a) to the Existing Credit Agreement pursuant to
Subpart 2.2. From and after the Amendment Effective Date, the New Lenders shall
each become a "Lender" for all purposes of the Credit Documents and hereby
ratifies, as of the Amendment Effective Date, and agrees to be bound by all of
the terms and provisions contained in the Credit Agreement The Existing Lender
hereby (i) represents and warrants to the New Lenders that it is the holder of
the Loans assigned hereby and Participation Interests related thereto, and it
has not previously transferred or encumbered such Loans or Participation
Interests, (ii) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Documents or any other instrument or document furnished pursuant thereto; (iii)
makes no representation or warranty and assumes no responsibility with respect
to the financial condition of any Credit Party or the performance or observance
by any Credit Party of any of its obligations under the Credit Documents or any
other instrument or document furnished pursuant thereto and (iv) makes no other
representation or warranty, express or implied. The
-3-
4
New Lenders shall make payment in exchange for such interests in the Existing
Lenders' rights and obligations under the Existing Credit Agreement on the
Amendment Effective Date, in the amounts and in accordance with the instructions
of the Agent. Each New Lender (a) represents and warrants that it is legally
authorized to enter into this Amendment; (b) confirms that it has received a
copy of the Credit Agreement, together with copies of the financial statements
referred to in Section 5.1(c) thereof, the financial statements delivered
pursuant to Section 7.1 thereof, if any, and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Amendment; (c) agrees that it will, independently
and without reliance upon the Existing Lender, the Agent or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Credit Agreement, the other Credit Documents or any other instrument
or document furnished pursuant hereto or thereto; (d) appoints and authorizes
the Agent to take such action as agent on its behalf and to exercise such powers
and discretion under the Credit Agreement, the other Credit Documents or any
other instrument or document furnished pursuant hereto or thereto as are
delegated to the Agent by the terms thereof, together with such powers as are
incidental thereto; and (e) agrees that it will be bound by the provisions of
the Credit Agreement and will perform in accordance with its terms all the
obligations which by the terms of the Credit Agreement are required to be
performed by it as a Lender including, if it is organized under the laws of a
jurisdiction outside the United States, its obligations pursuant to subsection
3.11 of the Credit Agreement. The Existing Lender shall, to the extent of the
interests assigned hereby, relinquish its rights and be released from its
obligations under the Existing Credit Agreement. The Agent shall maintain in its
internal records and record in the Register the information relating to the
assignments and assumptions effected pursuant to this Part III and as required
by Section 11.3(c).
PART IV
CONDITIONS TO EFFECTIVENESS
SUBPART 4.1. Amendment Effective Date. This Amendment shall be
and become effective when all of the conditions set forth in this Part
IV shall have been satisfied (the "Amendment Effective Date"), and
thereafter this Amendment shall be known, and may be referred to, as
"Syndication Amendment and Assignment."
SUBPART 4.2. Execution of Counterparts of Amendment. The Agent
shall have received counterparts of this Amendment, which collectively
shall have been duly executed on behalf of each of the Borrower, the
Subsidiary Guarantors, the Agent and the Lenders.
SUBPART 4.3. Execution and Delivery of New Notes. Each Lender
shall have received new Notes duly executed on behalf of the Borrower.
SUBPART 4.4. Corporate Resolutions. The Agent shall have
received copies of resolutions of the board of directors of each Credit
Party approving and adopting this Amendment, the transactions
contemplated herein and authorizing execution and delivery
-4-
5
thereof, certified by a secretary or assistant secretary of such Credit
Party to be true and correct and in force and effect as of the
Amendment Effective Date.
SUBPART 4.5. Legal Opinion. The Agent shall have received a
legal opinion in form and substance satisfactory to it dated as of the
Amendment Effective Date from counsel to the Credit Parties.
PART V
MISCELLANEOUS
SUBPART 5.1. Cross-References. References in this Amendment to
any Part or Subpart are, unless otherwise specified, to such Part or
Subpart of this Amendment.
SUBPART 5.2. References in Other Credit Documents. At such
time as this Amendment shall become effective pursuant to the terms of
Subpart 4.1, all references in the Existing Credit Agreement to the
"Credit Agreement" and all references in the other Credit Documents to
the "Credit Agreement" shall be deemed to refer to the Amended Credit
Agreement.
SUBPART 5.3. Representations and Warranties of the Borrower.
The Borrower hereby represents and warrants that (a) the conditions
precedent to the initial Loans were satisfied as of the Closing Date,
(b) the representations and warranties contained in Section 6 of the
Existing Credit Agreement (as amended by this Amendment) are correct in
all material respects on and as of the date hereof as though made on
and as of such date and after giving effect to the amendments contained
herein and (c) no Default or Event of Default exists under the Existing
Credit Agreement on and as of the date hereof and after giving effect
to the amendments contained herein.
SUBPART 5.4. Counterparts. This Amendment may be executed by
the parties hereto in several counterparts, each of which shall be
deemed to be an original and all of which shall constitute together but
one and the same agreement.
SUBPART 5.5. Governing Law. THIS AMENDMENT SHALL BE DEEMED TO
BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE
OF GEORGIA WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES
THEREOF.
SUBPART 5.6. Successors and Assigns. This Amendment shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.
-5-
6
SUBPART 5.7. Assignment Pursuant to the Credit Agreement.
Notwithstanding any provision in the Amended Credit Agreement to the
contrary, the execution of this Amendment shall constitute an
assignment for purposes of Section 11.3 of the Amended Credit
Agreement.
[The remainder of this page is intentionally left blank.]
-6-
7
Each of the parties hereto has caused a counterpart of this Amendment
to be duly executed and delivered as of the date first above written.
BORROWER: THE PROFIT RECOVERY GROUP
INTERNATIONAL, INC.,
By:
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: S.V.P., C.F.O. and Treasurer
SUBSIDIARY
GUARANTORS: THE PROFIT RECOVERY GROUP
INTERNATIONAL I, INC.
THE PROFIT RECOVERY GROUP U.K., INC.
THE PROFIT RECOVERY GROUP ASIA,
INC.
THE PROFIT RECOVERY GROUP CANADA,
INC.
THE PROFIT RECOVERY GROUP NEW
ZEALAND, INC.
THE PROFIT RECOVERY GROUP
NETHERLANDS, INC.
THE PROFIT RECOVERY GROUP BELGIUM,
INC.
THE PROFIT RECOVERY GROUP MEXICO,
INC.
THE PROFIT RECOVERY GROUP FRANCE,
INC.
THE PROFIT RECOVERY GROUP
AUSTRALIA, INC.
THE PROFIT RECOVERY GROUP
GERMANY, INC.
PRG INTERNATIONAL HOLDING
COMPANY, INC.
THE PROFIT RECOVERY GROUP
SWITZERLAND, INC.
THE PROFIT RECOVERY GROUP SOUTH
AFRICA, INC.
By:
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: S.V.P., C.F.O. and Treasurer
8
EXISTING LENDER: NATIONSBANK, N. A.,
individually in its capacity as a
Lender and in its capacity as Agent
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
NEW LENDERS: UNION BANK OF CALIFORNIA, N.A.
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
FIRST UNION NATIONAL BANK
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
WACHOVIA BANK, N.A.
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
FLEET NATIONAL BANK
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
CREDIT LYONNAIS ATLANTA AGENCY
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
9
SUNTRUST BANK, ATLANTA
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
PNC BANK, NATIONAL ASSOCIATION
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
CREDIT AGRICOLE INDOSUEZ
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
LASALLE NATIONAL BANK
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
10
Schedule 2.1(a)
Lenders' Addresses and Commitments
----------------------------------------------------------------------------------------------------------------------
Revolving Foreign Currency
Revolving Commitment Commitment Foreign Currency Commitment
Lender Percentage Commitment Percentage
----------------------------------------------------------------------------------------------------------------------
NATIONSBANK,N.A. $30,000,000 15% $11,250,000 15%
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇
NC1-001-15-04
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Agency Services
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
----------------------------------------------------------------------------------------------------------------------
UNION BANK OF CALIFORNIA, $15,000,000 7.5% $5,625,000 7.5%
N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
----------------------------------------------------------------------------------------------------------------------
FIRST UNION NATIONAL BANK $23,750,000 11.875% $8,906,250 11.875%
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇ - ▇▇ 0174
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
----------------------------------------------------------------------------------------------------------------------
WACHOVIA BANK, N.A. $23,750,000 11.875% $8,906,250 11.875%
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
----------------------------------------------------------------------------------------------------------------------
11
----------------------------------------------------------------------------------------------------------------------
FLEET NATIONAL BANK $23,750,000 11.875% $8,906,250 11.875%
Mailstop: MA OF D04J
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
----------------------------------------------------------------------------------------------------------------------
SUNTRUST BANK ATLANTA $15,000,000 7.5% $5,625,000 7.5%
▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
----------------------------------------------------------------------------------------------------------------------
PNC BANK, NATIONAL $15,000,000 7.5% $5,625,000 7.5%
ASSOCIATION
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ Group, ▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
----------------------------------------------------------------------------------------------------------------------
CREDIT AGRICOLE INDOSUEZ $15,000,000 7.5% $5,625,000 7.5%
▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
----------------------------------------------------------------------------------------------------------------------
LASALLE NATIONAL BANK $15,000,000 7.5% $5,625,000 7.5%
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
----------------------------------------------------------------------------------------------------------------------
CREDIT LYONNAIS ATLANTA $23,750,000 11.875% $8,906,250 11.875%
AGENCY
One Peachtree Center
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇.▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
----------------------------------------------------------------------------------------------------------------------
TOTAL $200,000,000 100% $75,000,000 100%
----------------------------------------------------------------------------------------------------------------------
12
Attachment to Officer's Certificate
COMPUTATION OF FINANCIAL COVENANTS
1. Fixed Charge Coverage Ratio
(a) Consolidated EBIT $
-------
(b) Consolidated Rental Expense $
-------
(c) Amortized Intangibles $
-------
(d) [(a) + (b) + (c)] $
-------
(e) Consolidated Interest Expense $
-------
(f) Consolidated Rental Expense $
-------
(g) [(e) + (f)] $
-------
(h) Fixed Charge Coverage Ratio [(d)/(g)] :1.0
-------
2. Leverage Ratio
(a) Funded Indebtedness $
-------
(b) Consolidated EBITDA $
-------
(c) Leverage Ratio [(a)/(b)] :1.0
-------
3. Net Worth
(a) Actual Net Worth as of the end of the fiscal period
referred to above $
-------
(b) Beginning net worth $
-------
(c) .75 x cumulative Consolidated Net Income (without
deduction for any losses) subsequent to the Closing
Date $
-------
(d) 100% of Net Cash Proceeds from any Equity Issuance
subsequent to the Closing Date $
-------
(e) Net worth required by Section 7.11(iii)
[(b) + (c) + (d)] $
-------
4. Funded Indebtedness to Capitalization Ratio
(a) Funded Indebtedness $
-------
(b) Total Capitalization $
-------
(c) Funded Indebtedness to Capitalization Ratio
[(a)/(b)] :1.0
-------
13
CREDIT AGREEMENT
Dated as of July 29, 1998
among
THE PROFIT RECOVERY GROUP INTERNATIONAL, INC.,
as Borrower,
AND
CERTAIN SUBSIDIARIES OF THE BORROWER
FROM TIME TO TIME PARTY HERETO,
as Guarantors,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTY HERETO
AND
NATIONSBANK, N. A.,
as Agent
14
TABLE OF CONTENTS
SECTION 1 DEFINITIONS............................................................................................1
1.1 Definitions..........................................................................................1
1.2 Computation of Time Periods.........................................................................22
1.3 Accounting Terms....................................................................................22
SECTION 2CREDIT FACILITIES.......................................................................................23
2.1 Revolving Loans.....................................................................................23
2.2 Letter of Credit Subfacility........................................................................25
2.3 Foreign Currency Loan Subfacility...................................................................30
2.4 Swingline Loan Subfacility..........................................................................32
SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES........................................................34
3.1 Default Rate........................................................................................34
3.2 Extension and Conversion............................................................................34
3.3 Prepayments.........................................................................................35
3.4 Termination and Reduction of Revolving Committed Amount.............................................36
3.5 Fees................................................................................................36
3.6 Capital Adequacy....................................................................................37
3.7 Limitation on Eurocurrency Loans....................................................................37
3.8 Illegality..........................................................................................38
3.9 Requirements of Law.................................................................................38
3.10 Treatment of Affected Loans........................................................................39
3.11 Taxes..............................................................................................40
3.12 Compensation.......................................................................................42
3.13 Pro Rata Treatment.................................................................................43
3.14 Sharing of Payments................................................................................43
3.15 Payments, Computations, Etc........................................................................44
3.16 Evidence of Debt...................................................................................46
3.17 Mitigation; Mandatory Assignment...................................................................46
3.18 European Monetary Union...........................................................................47
SECTION 4 GUARANTY..............................................................................................48
4.1 The Guaranty........................................................................................48
4.2 Obligations Unconditional...........................................................................48
4.3 Reinstatement.......................................................................................49
4.4 Certain Additional Waivers..........................................................................50
4.5 Remedies............................................................................................50
4.6 Rights of Contribution..............................................................................50
4.7 Guarantee of Payment; Continuing Guarantee..........................................................51
SECTION 5 CONDITIONS............................................................................................51
5.1 Closing Conditions..................................................................................51
5.2 Conditions to all Extensions of Credit..............................................................54
SECTION 6 REPRESENTATIONS AND WARRANTIES........................................................................55
6.1 Financial Condition.................................................................................55
6.2 No Material Change..................................................................................56
6.3 Organization and Good Standing......................................................................56
6.4 Power; Authorization; Enforceable Obligations.......................................................56
i
15
6.5 No Conflicts........................................................................................56
6.6 No Default..........................................................................................57
6.7 Ownership...........................................................................................57
6.8 Indebtedness........................................................................................57
6.9 Litigation..........................................................................................57
6.10 Taxes..............................................................................................57
6.11 Compliance with Law................................................................................58
6.12 ERISA..............................................................................................58
6.13 Subsidiaries.......................................................................................59
6.14 Governmental Regulations, Etc......................................................................59
6.15 Purpose of Loans and Letters of Credit.............................................................61
6.16 Environmental Matters..............................................................................61
6.17 Intellectual Property..............................................................................62
6.18 Solvency...........................................................................................62
6.19 Investments........................................................................................62
6.20 Location of Collateral.............................................................................62
6.21 Disclosure.........................................................................................62
6.22 Brokers'Fees.......................................................................................63
6.23 Labor Matters......................................................................................63
6.24 Year 2000 Compliance...............................................................................63
SECTION 7 AFFIRMATIVE COVENANTS.................................................................................63
7.1 Information Covenants...............................................................................63
7.2 Preservation of Existence and Franchises............................................................67
7.3 Books and Records...................................................................................67
7.4 Compliance with Law.................................................................................67
7.5 Payment of Taxes and Other Indebtedness.............................................................67
7.6 Insurance...........................................................................................67
7.7 Maintenance of Property.............................................................................68
7.8 Performance of Obligations..........................................................................68
7.9 Use of Proceeds.....................................................................................69
7.10 Audits/Inspections.................................................................................69
7.11 Financial Covenants................................................................................69
7.12 Additional Credit Parties..........................................................................70
7.13 Environmental Laws.................................................................................70
7.14 Collateral.........................................................................................71
7.15 Year 2000 Compliance...............................................................................71
7.16 Further Assurances.................................................................................71
SECTION 8 NEGATIVE COVENANTS....................................................................................72
8.1 Indebtedness........................................................................................72
8.2 Liens...............................................................................................72
8.3 Nature of Business..................................................................................73
8.4 Consolidation, Merger, Dissolution, etc.............................................................73
8.5 Asset Dispositions..................................................................................73
8.6 Investments.........................................................................................73
8.7 Restricted Payments.................................................................................74
ii
16
8.8 [Intentionally Omitted].............................................................................74
8.9 Transactions with Affiliates........................................................................74
8.10 Fiscal Year; Organizational Documents..............................................................74
8.11 Limitation on Restricted Actions...................................................................74
8.12 Ownership of Subsidiaries..........................................................................75
8.13 Sale Leasebacks....................................................................................75
8.14 Capital Expenditures...............................................................................75
8.15 No Further Negative Pledges........................................................................75
SECTION 9 EVENTS OF DEFAULT.....................................................................................76
9.1 Events of Default...................................................................................76
9.2 Acceleration; Remedies..............................................................................78
SECTION 10 AGENCY PROVISIONS....................................................................................79
10.1 Appointment, Powers and Immunities.................................................................79
10.2 Reliance by Agent..................................................................................80
10.3 Defaults...........................................................................................80
10.4 Rights as a Lender.................................................................................80
10.5 Indemnification....................................................................................81
10.6 Non-Reliance on Agent and Other Lenders............................................................81
10.7 Successor Agent....................................................................................81
SECTION 11 MISCELLANEOUS........................................................................................82
11.1 Notices............................................................................................82
11.2 Right of Set-Off; Adjustments......................................................................83
11.3 Benefit of Agreement...............................................................................83
11.4 No Waiver; Remedies Cumulative.....................................................................85
11.5 Expenses; Indemnification..........................................................................85
11.6 Amendments, Waivers and Consents...................................................................86
11.7 Counterparts.......................................................................................88
11.8 Headings...........................................................................................88
11.9 Survival...........................................................................................88
11.10 Governing Law; Submission to Jurisdiction; Venue..................................................88
11.11 Severability......................................................................................89
11.12 Entirety..........................................................................................89
11.13 Binding Effect; Termination.......................................................................89
11.14 Confidentiality...................................................................................90
11.15 Use of Sources....................................................................................90
11.16 Conflict..........................................................................................91
iii
17
SCHEDULES
Schedule 1.1(a) Investments
Schedule 1.1(b) Liens
Schedule 2.1(a) Lenders
Schedule 6.13 Subsidiaries
Schedule 6.17 Intellectual Property
Schedule 6.20(a) Collateral Locations
Schedule 6.20(b) Chief Executive Offices/Principal Places
of Business
Schedule 7.6 Insurance
Schedule 8.1 Indebtedness
EXHIBITS
Exhibit 2.1(b)(i) Form of Notice of Borrowing for Revolving Loans
Exhibit 2.1(e) Form of Revolving Note
Exhibit 2.3(b)(i) Form of Notice of Borrowing for Foreign Currency Loans
Exhibit 2.4(d) Form of Swingline Note
Exhibit 3.2 Form of Notice of Extension/Conversion
Exhibit 7.1(c) Form of Officer's Compliance Certificate
Exhibit 7.12 Form of Joinder Agreement
Exhibit 11.3(b) Form of Assignment and Acceptance
iv
18
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of July 29, 1998 (as amended, modified,
restated or supplemented from time to time, the "Credit Agreement"), is by and
among THE PROFIT RECOVERY GROUP INTERNATIONAL, INC., a Georgia corporation (the
"Borrower"), the Subsidiary Guarantors (as defined herein), the Lenders (as
defined herein) and NATIONSBANK, N. A., as Agent for the Lenders (in such
capacity, the "Agent").
W I T N E S S E T H
WHEREAS, the Borrower has requested that the Lenders provide a
$150,000,000 credit facility for the purposes hereinafter set forth; and
WHEREAS, the Lenders have agreed to make the requested credit facility
available to the Borrower on the terms and conditions hereinafter set forth;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS
1.1 DEFINITIONS.
As used in this Credit Agreement, the following terms shall have the
meanings specified below unless the context otherwise requires:
"Acquisition", by any Person, means the acquisition by such
Person of the Capital Stock or all or substantially all of the Property
of another Person, whether or not involving a merger or consolidation
with such Person.
"Additional Credit Party" means each Person that becomes a
Subsidiary Guarantor after the Closing Date by execution of a Joinder
Agreement.
"Adjusted Base Rate" means the Base Rate plus the Applicable
Percentage.
"Adjusted Eurocurrency Rate" means the Eurocurrency Rate plus
the Applicable Percentage.
"Affiliate" means, with respect to any Person, any other
Person (i) directly or indirectly controlling or controlled by or under
direct or indirect common control with such Person or (ii) directly or
indirectly owning or holding five percent (5%) or more of the
19
Capital Stock in such Person. For purposes of this definition,
"control" when used with respect to any Person means the power to
direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled"
have meanings correlative to the foregoing.
"Agency Services Address" means NationsBank, N. A.,
NC1-001-15-04, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attn: Agency Services, or such other address as may be identified by
written notice from the Agent to the Borrower.
"Agent" shall have the meaning assigned to such term in the
heading hereof, together with any successors or assigns.
"Agent's Fee Letter" means that certain letter agreement,
dated as of July 15, 1998, between the Agent and the Borrower, as
amended, modified, restated or supplemented from time to time.
"Agent's Fees" shall have the meaning assigned to such term in
Section 3.5(d).
"Applicable Lending Office" means, for each Lender, the office
of such Lender (or of an Affiliate of such Lender) as such Lender may
from time to time specify to the Agent and the Borrower by written
notice as the office by which its Eurocurrency Loans are made and
maintained.
"Applicable Percentage" means, for purposes of calculating the
applicable interest rate for any day for any Revolving Loan, the
applicable rate of the Unused Fee for any day for purposes of Section
3.5(b) and the applicable rate of the Letter of Credit Fee for any day,
the appropriate applicable percentage corresponding to the Leverage
Ratio in effect as of the most recent Calculation Date:
------------------------------------------------------------------------------------------------
APPLICABLE APPLICABLE
PERCENTAGE FOR PERCENTAGE APPLICABLE
APPLICABLE BASE RATE FOR PERCENTAGE
PRICING LEVERAGE PERCENTAGE FOR LOANS LETTER OF FOR UNUSED
LEVEL RATIO EURODOLLAR LOANS CREDIT FEES FEES
------------------------------------------------------------------------------------------------
I < 1.0 to 1.0 .75 % 0.0% .75% .20%
------------------------------------------------------------------------------------------------
II < 1.5 to 1.0 1.00% 0.0% 1.00% .25%
but > 1.0 to 1.0
------------------------------------------------------------------------------------------------
III < 2.0 to 1.0 1.25% 0.0% 1.25% .30%
but > 1.5 to 1.0
------------------------------------------------------------------------------------------------
IV < 2.5 to 1.0 1.50% 0.0% 1.50% .375%
but > 2.0 to 1.0
------------------------------------------------------------------------------------------------
V > 2.5 to 1.0 1.875% .50% 1.875% .45%
------------------------------------------------------------------------------------------------
The Applicable Percentages shall be determined and adjusted quarterly
on the date (each a "Calculation Date") five Business Days after the
date by which the Borrower is required
2
20
to provide the officer's certificate in accordance with the provisions
of Section 7.1(c) for the most recently ended fiscal quarter of the
Consolidated Parties; provided, however, (i) the initial Applicable
Percentages shall be based on Pricing Level III and shall remain at
Pricing Level III until the first Calculation Date subsequent to the
Closing Date and, thereafter, the Applicable Percentage shall be
determined by the Leverage Ratio as of the last day of the most
recently ended fiscal quarter of the Consolidated Parties preceding the
applicable Calculation Date and (ii) if the Borrower fails to provide
the officer's certificate to the Agency Services Address as required by
Section 7.1(c) for the last day of the most recently ended fiscal
quarter of the Consolidated Parties preceding the applicable
Calculation Date, the Applicable Percentage from such Calculation Date
shall be based on Pricing Level V until such time as an appropriate
officer's certificate is provided, whereupon the Applicable Percentage
shall be determined by the Leverage Ratio as of the last day of the
most recently ended fiscal quarter of the Consolidated Parties
preceding such Calculation Date. Each Applicable Percentage shall be
effective from one Calculation Date until the next Calculation Date.
Any adjustment in the Applicable Percentages shall be applicable to all
existing Loans as well as any new Loans made or issued.
"Asset Disposition" means the disposition of any or all of the
assets (including without limitation the Capital Stock of a Subsidiary)
of any Consolidated Party whether by sale, lease, transfer or otherwise
(including pursuant to any casualty or condemnation event), other than
transfers of assets permitted by Section 8.5.
"Available Foreign Currency" means (i) British Pounds Sterling
and French Francs and (ii) any other freely available currency which is
freely transferable and freely convertible into Dollars and in which
dealings in deposits are carried on in the London interbank market,
which shall be requested by the Borrower and approved by each Lender.
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the
United States Code, as amended, modified, succeeded or replaced from
time to time.
"Bankruptcy Event" means, with respect to any Person, the
occurrence of any of the following with respect to such Person: (i) a
court or governmental agency having jurisdiction in the premises shall
enter a decree or order for relief in respect of such Person in an
involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of such Person or for any substantial part of its Property or
ordering the winding up or liquidation of its affairs; or (ii) there
shall be commenced against such Person an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter
in effect, or any case, proceeding or other action for the appointment
of a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of such Person or for any substantial part of its
Property or for the winding up or liquidation of its affairs, and such
involuntary case or other case, proceeding or other action shall remain
undismissed, undischarged or unbonded for a period of sixty (60)
consecutive days; or (iii) such Person shall commence a voluntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or consent to the
3
21
entry of an order for relief in an involuntary case under any such law,
or consent to the appointment or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of such Person or for any substantial part of its Property or
make any general assignment for the benefit of creditors; or (iv) such
Person shall be unable to, or shall admit in writing its inability to,
pay its debts generally as they become due.
"Base Rate" means, for any day, the rate per annum equal to
the higher of (a) the Federal Funds Rate for such day plus one-half of
one percent (0.5%) and (b) the Prime Rate for such day. Any change in
the Base Rate due to a change in the Prime Rate or the Federal Funds
Rate shall be effective on the effective date of such change in the
Prime Rate or Federal Funds Rate.
"Base Rate Loan" means any Loan bearing interest at a rate
determined by reference to the Base Rate.
"Borrower" means the Person identified as such in the heading
hereof, together with any permitted successors and assigns.
"Business Day" means a day other than a Saturday, Sunday or
other day on which commercial banks in Charlotte, North Carolina or
Atlanta, Georgia are authorized or required by law to close, except
that, (i) when used in connection with a Eurocurrency Loan, such day
shall also be a day on which dealings between banks are carried on in
U.S. dollar deposits in London, England and (ii) when used in
connection with a Foreign Currency Loan, such day shall also be a day
on which dealings between banks are carried on in deposits in Available
Foreign Currencies in London interbank market.
"Capital Lease" means, as applied to any Person, any lease of
any Property (whether real, personal or mixed) by that Person as lessee
which, in accordance with GAAP, is or should be accounted for as a
capital lease on the balance sheet of that Person.
"Capital Stock" means (i) in the case of a corporation,
capital stock, (ii) in the case of an association or business entity,
any and all shares, interests, participations, rights or other
equivalents (however designated) of capital stock, (iii) in the case of
a partnership, partnership interests (whether general or limited), (iv)
in the case of a limited liability company, membership interests and
(v) any other interest or participation that confers on a Person the
right to receive a share of the profits and losses of, or distributions
of assets of, the issuing Person.
"Cash Equivalents" means (a) securities issued or directly and
fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof (provided that the full faith and
credit of the United States of America is pledged in support thereof)
having maturities of not more than twelve months from the date of
acquisition, (b) U.S. dollar denominated time deposits and certificates
of deposit of (i) any Lender, (ii) any domestic commercial bank of
recognized standing having capital and surplus in excess of
$500,000,000 or (iii) any bank whose short-term commercial paper rating
from S&P is at least A-1 or the equivalent thereof or from ▇▇▇▇▇'▇ is
at least P-1 or the equivalent thereof
4
22
(any such bank being an "Approved Bank"), in each case with maturities
of not more than 270 days from the date of acquisition, (c) commercial
paper and variable or fixed rate notes issued by any Approved Bank (or
by the parent company thereof) or any variable rate notes issued by, or
guaranteed by, any domestic corporation rated A-1 (or the equivalent
thereof) or better by S&P or P-1 (or the equivalent thereof) or better
by Moody's and maturing within six months of the date of acquisition,
(d) repurchase agreements entered into by any Person with a bank or
trust company (including any of the Lenders) or recognized securities
dealer having capital and surplus in excess of $500,000,000 for direct
obligations issued by or fully guaranteed by the United States of
America in which such Person shall have a perfected first priority
security interest (subject to no other Liens) and having, on the date
of purchase thereof, a fair market value of at least 100% of the amount
of the repurchase obligations and (e) Investments, classified in
accordance with GAAP as current assets, in money market investment
programs registered under the Investment Company Act of 1940, as
amended, which are administered by reputable financial institutions
having capital of at least $500,000,000 and the portfolios of which are
limited to Investments of the character described in the foregoing
subdivisions (a) through (d).
"Change of Control" means the occurrence of any of the
following events: (i) except for any member of the Management
Shareholder Group, any Person or two or more Persons acting in concert
shall have acquired "beneficial ownership," directly or indirectly, of,
or shall have acquired by contract or otherwise, or shall have entered
into a contract or arrangement that, upon consummation, will result in
its or their acquisition of, control over, Voting Stock of the Borrower
(or other securities convertible into such Voting Stock) representing
35% or more of the combined voting power of all Voting Stock of the
Borrower, or (ii) during any period of up to 24 consecutive months,
commencing after the Closing Date, individuals who at the beginning of
such 24 month period were directors of the Borrower (together with any
new director whose election by the Borrower's Board of Directors or
whose nomination for election by the Borrower's shareholders was
approved by a vote of at least two-thirds of the directors then still
in office who either were directors at the beginning of such period or
whose election or nomination for election was previously so approved)
cease for any reason to constitute a majority of the directors of the
Borrower then in office. As used herein, "beneficial ownership" shall
have the meaning provided in Rule 13d-3 of the Securities and Exchange
Commission under the Securities Act of 1934.
"Closing Date" means the date hereof.
"Code" means the Internal Revenue Code of 1986, as amended,
and any successor statute thereto, as interpreted by the rules and
regulations issued thereunder, in each case as in effect from time to
time. References to sections of the Code shall be construed also to
refer to any successor sections.
"Collateral" means a collective reference to the collateral
which is identified in, and at any time will be covered by, the
Collateral Documents.
"Collateral Documents" means a collective reference to the
Security Agreement, the Pledge Agreement and such other documents
executed and delivered in connection
5
23
with the attachment and perfection of the Agent's security interests
and liens arising thereunder, including without limitation, UCC
financing statements and patent and trademark filings.
"Commitment" means the Revolving Commitment, the Swingline
Commitment, the Foreign Currency Commitment and the LOC Commitment.
"Consolidated Capital Expenditures" means, for any period, all
capital expenditures of the Consolidated Parties on a consolidated
basis for such period, as determined in accordance with GAAP.
"Consolidated EBITDA" means, for any period, the sum of (i)
Consolidated Net Income for such period, plus (ii) an amount which, in
the determination of Consolidated Net Income for such period, has been
deducted for (A) Consolidated Interest Expense, (B) total federal,
state, local and foreign income, value added and similar taxes and (C)
depreciation and amortization expense, all as determined in accordance
with GAAP.
"Consolidated EBIT" means, for any period, the sum of (i)
Consolidated Net Income for such period, plus (ii) an amount which, in
the determination of Consolidated Net Income for such period, has been
deducted for (A) Consolidated Interest Expense and (B) total federal,
state, local and foreign income, value added and similar taxes.
"Consolidated Interest Expense" means, for any period,
interest expense (including the amortization of debt discount and
premium and the interest component under Capital Leases) of the
Consolidated Parties on a consolidated basis for such period, as
determined in accordance with GAAP.
"Consolidated Net Income" means, for any period, net income
(excluding extraordinary items) after taxes for such period of the
Consolidated Parties on a consolidated basis, as determined in
accordance with GAAP.
"Consolidated Parties" means a collective reference to the
Borrower and its Subsidiaries, and "Consolidated Party" means any one
of them.
"Consolidated Rental Expense" means, for any period, rental
expense under Operating Leases of the Consolidated Parties on a
consolidated basis for such period, as determined in accordance with
GAAP.
"Credit Documents" means a collective reference to this Credit
Agreement, the Notes, the LOC Documents, each Joinder Agreement, the
Agent's Fee Letter, the Collateral Documents and all other related
agreements and documents issued or delivered hereunder or thereunder or
pursuant hereto or thereto (in each case as the same may be amended,
modified, restated, supplemented, extended, renewed or replaced from
time to time), and "Credit Document" means any one of them.
6
24
"Credit Parties" means a collective reference to the Borrower
and the Guarantors, and "Credit Party" means any one of them.
"Credit Party Obligations" means, without duplication, (i) all
of the obligations of the Credit Parties to the Lenders (including the
Issuing Lender and the Swingline Lender) and the Agent, whenever
arising, under this Credit Agreement, the Notes, the Collateral
Documents or any of the other Credit Documents (including, but not
limited to, any interest accruing after the occurrence of a Bankruptcy
Event with respect to any Credit Party, regardless of whether such
interest is an allowed claim under the Bankruptcy Code) and (ii) all
liabilities and obligations, whenever arising, owing from the Borrower
to any Lender, or any Affiliate of a Lender, arising under any Hedging
Agreement.
"Default" means any event, act or condition which with notice
or lapse of time, or both, would constitute an Event of Default.
"Defaulting Lender" means, at any time, any Lender that (a)
has failed to make a Loan or purchase a Participation Interest required
pursuant to the term of this Credit Agreement within one Business Day
of when due, (b) other than as set forth in (a) above, has failed to
pay to the Agent or any Lender an amount owed by such Lender pursuant
to the terms of this Credit Agreement within one Business Day of when
due, unless such amount is subject to a good faith dispute or (c) has
been deemed insolvent or has become subject to a bankruptcy or
insolvency proceeding or with respect to which (or with respect to any
of assets of which) a receiver, trustee or similar official has been
appointed.
"Determination Date" means, with respect to any Foreign
Currency Loan:
(a) in connection with any origination of such Loan,
the Business Day which is the earliest of the date such Loan
is made or the date the interest rate is set;
(b) in connection with any extension or conversion of
an existing Foreign Currency Loan, the Business Day that such
Loan is extended or converted, or the date the rate is set, as
applicable, in connection with any extension or conversion; or
(c) the date of any reduction of the Revolving
Committed Amount or the Foreign Currency Committed Amount
pursuant to the terms of Section 3.4;
In addition to the foregoing, such additional dates not more frequently
than once a month as may be determined by the Agent.
"Dollar Amount" means (a) with respect to Dollars or an amount
denominated in Dollars, such amount and (b) with respect to an amount
of any Available Foreign Currency or an amount denominated in such
Available Foreign Currency, the Dollar Equivalent of such amount on the
applicable date contemplated in the Credit Agreement.
7
25
"Dollar Equivalent" means, on any date, with respect to any
amount denominated in an Available Foreign Currency, the amount of
Dollars into which the Agent could, in accordance with its practice
from time to time in the interbank foreign exchange market, convert
such amount of Available Foreign Currency at its spot rate of exchange
(inclusive of all reasonable related costs of conversion) applicable to
the relevant transaction at or about 10:00 A.M., Charlotte, North
Carolina time, on such date.
"Dollars" and "$" means dollars in lawful currency of the
United States of America.
"Domestic Subsidiary" means, with respect to any Person, any
Subsidiary of such Person which is incorporated or organized under the
laws of any State of the United States or the District of Columbia.
"Eligible Assets" means another business or any substantial
part of another business or other long-term assets, in each case, in,
or used or useful in, the same or a similar line of business as the
Borrower and its Subsidiaries were engaged in on the Closing Date, or
any reasonable extensions or expansions thereof.
"Eligible Assignee" means (i) a Lender; (ii) an Affiliate of a
Lender in which such Lender owns at least a 20% interest; and (iii) any
other Person approved by the Agent and, unless an Event of Default has
occurred and is continuing at the time any assignment is effected in
accordance with Section 11.3, the Borrower (such approval not to be
unreasonably withheld or delayed by the Borrower and such approval to
be deemed given by the Borrower if no objection is received by the
assigning Lender and the Agent from the Borrower within two Business
Days after notice of such proposed assignment has been provided by the
assigning Lender to the Borrower); provided, however, that neither the
Borrower nor an Affiliate of the Borrower shall qualify as an Eligible
Assignee.
"Environmental Laws" means any and all lawful and applicable
Federal, state, local and foreign statutes, laws, regulations,
ordinances, rules, judgments, orders, decrees, permits, concessions,
grants, franchises, licenses, agreements or other governmental
restrictions relating to the environment or to emissions, discharges,
releases or threatened releases of pollutants, contaminants, chemicals,
or industrial, toxic or hazardous substances or wastes into the
environment including, without limitation, ambient air, surface water,
ground water, or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport,
or handling of pollutants, contaminants, chemicals, or industrial,
toxic or hazardous substances or wastes.
"Equity Issuance" means any issuance by any Consolidated Party
to any Person which is not a Credit Party of (a) shares of its Capital
Stock, (b) any shares of its Capital Stock pursuant to the exercise of
options or warrants or (c) any shares of its Capital Stock pursuant to
the conversion of any debt securities to equity.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute thereto, as interpreted by
the rules and regulations
8
26
thereunder, all as the same may be in effect from time to time.
References to sections of ERISA shall be construed also to refer to any
successor sections.
"ERISA Affiliate" means an entity which is under common
control with any Consolidated Party within the meaning of Section
4001(a)(14) of ERISA, or is a member of a group which includes any
Consolidated Party and which is treated as a single employer under
Sections 414(b) or (c) of the Code.
"ERISA Event" means (i) with respect to any Plan, the
occurrence of a Reportable Event or the substantial cessation of
operations (within the meaning of Section 4062(e) of ERISA); (ii) the
withdrawal by any Consolidated Party or any ERISA Affiliate from a
Multiple Employer Plan during a plan year in which it was a substantial
employer (as such term is defined in Section 4001(a)(2) of ERISA), or
the termination of a Multiple Employer Plan; (iii) the distribution of
a notice of intent to terminate or the actual termination of a Plan
pursuant to Section 4041(a)(2) or 4041A of ERISA; (iv) the institution
of proceedings to terminate or the actual termination of a Plan by the
PBGC under Section 4042 of ERISA; (v) any event or condition which
might constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any
Plan; (vi) the complete or partial withdrawal of any Consolidated Party
or any ERISA Affiliate from a Multiemployer Plan; (vii) the conditions
for imposition of a lien under Section 302(f) of ERISA exist with
respect to any Plan; or (viii) the adoption of an amendment to any Plan
requiring the provision of security to such Plan pursuant to Section
307 of ERISA.
"Eurocurrency Loan" means any Loan that bears interest at a
rate based upon the Eurocurrency Rate.
"Eurocurrency Rate" means, for any Eurocurrency Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) determined by the Agent to be
equal to the quotient obtained by dividing (a) the Interbank Offered
Rate for such Eurocurrency Loan for such Interest Period by (b) 1 minus
the Eurocurrency Reserve Requirement for such Eurocurrency Loan for
such Interest Period.
"Eurocurrency Reserve Requirement" means, at any time, the
maximum rate at which reserves (including, without limitation, any
marginal, special, supplemental, or emergency reserves) are required to
be maintained under regulations issued from time to time by the Board
of Governors of the Federal Reserve System (or any successor) by member
banks of the Federal Reserve System against "Eurocurrency liabilities"
(as such term is used in Regulation D). Without limiting the effect of
the foregoing, the Eurocurrency Reserve Requirement shall reflect any
other reserves required to be maintained by such member banks with
respect to (i) any category of liabilities which includes deposits by
reference to which the Adjusted Eurocurrency Rate is to be determined,
or (ii) any category of extensions of credit or other assets which
include Eurocurrency Loans. The Adjusted Eurocurrency Rate shall be
adjusted automatically on and as of the effective date of any change in
the Eurocurrency Reserve Requirement.
"Event of Default" shall have the meaning as defined in
Section 9.1.
9
27
"Executive Officer" of any Person means any of the chief
executive officer, chief operating officer, president, senior vice
president, chief financial officer or treasurer of such Person.
"Fees" means all fees payable pursuant to Section 3.5.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to
the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published by the Federal Reserve
Bank of New York on the Business Day next succeeding such day; provided
that (a) if such day is not a Business Day, the Federal Funds Rate for
such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and
(b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate
charged to the Agent (in its individual capacity) on such day on such
transactions as determined by the Agent.
"Fixed Charge Coverage Ratio" means, as of the end of each
fiscal quarter of the Consolidated Parties for the twelve month period
ending on such date, the ratio of (a) the sum of (i) Consolidated EBIT
for the applicable period plus (ii) Consolidated Rental Expense for the
applicable period plus (iii) any amortization of intangible assets for
the applicable period to (b) the sum of (i) Consolidated Interest
Expense for the applicable period plus (ii) Consolidated Rental Expense
for the applicable period.
"Foreign Currency" means the Available Foreign Currency.
"Foreign Currency Commitment" means, with respect to each
Lender, the commitment of such Lender to make Foreign Currency Loans in
an aggregate principal amount at any time outstanding of up to such
Lender's Foreign Currency Commitment Percentage of the Foreign Currency
Committed Amount.
"Foreign Currency Commitment Percentage" means, for any
Lender, the percentage identified as its Foreign Currency Commitment
Percentage on Schedule 2.1(a), as such percentage may be modified in
connection with any assignment made in accordance with the provisions
of Section 11.3.
"Foreign Currency Committed Amount" means, collectively, the
aggregate amount of all Foreign Currency Commitments as referenced in
Section 2.3(a) and, individually, the amount of each Lender's Foreign
Currency Commitment as specified on Schedule 2.1(a).
"Foreign Currency Equivalent" means, on any date, with respect
to an amount denominated in Dollars, the amount of any applicable
Available Foreign Currency into which the Agent could, in accordance
with its practice from time to time in the interbank foreign exchange
market, convert such amount of Dollars at its spot rate of exchange
(inclusive of all reasonable related costs of conversion) applicable to
the relevant transaction on or about 10:00 A.M. (Charlotte, North
Carolina) on such date.
10
28
"Foreign Currency Loans" shall have the meaning assigned to
such term in Section 2.3(a).
"Foreign Subsidiary" means, with respect to any Person, any
Subsidiary of such Person which is not a Domestic Subsidiary of such
Person.
"Funded Indebtedness" means, with respect to any Person,
without duplication, (a) all Indebtedness of such Person other than
Indebtedness of the types referred to in clause (e), (f), (g), (i), and
(l) of the definition of "Indebtedness" set forth in this Section 1.1,
(b) all Indebtedness of another Person of the type referred to in
clause (a) above secured by (or for which the holder of such Funded
Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien on, or payable out of the proceeds of production
from, Property owned or acquired by such Person, whether or not the
obligations secured thereby have been assumed, (c) all Guaranty
Obligations of such Person with respect to Indebtedness of the type
referred to in clause (a) above of another Person and (d) Indebtedness
of the type referred to in clause (a) above of any partnership or
unincorporated joint venture in which such Person is a general partner
or a joint venturer.
"Funded Indebtedness to Capitalization Ratio" means, with
respect to the Consolidated Parties on a consolidated basis, the ratio
of (a) Funded Indebtedness of the Consolidated Parties to (b) Total
Capitalization of the Consolidated Parties.
"GAAP" means generally accepted accounting principles in the
United States applied on a consistent basis and subject to the terms of
Section 1.3.
"Governmental Authority" means any Federal, state, local or
foreign court or governmental agency, authority, instrumentality or
regulatory body.
"Guarantors" means a collective reference to each of the
Subsidiary Guarantors, together with their successors and permitted
assigns, and "Guarantor " means any one of them.
"Guaranty Obligations" means, with respect to any Person,
without duplication, any obligations of such Person (other than
endorsements in the ordinary course of business of negotiable
instruments for deposit or collection) guaranteeing or intended to
guarantee any Indebtedness of any other Person in any manner, whether
direct or indirect, and including without limitation any obligation,
whether or not contingent, (i) to purchase any such Indebtedness or any
Property constituting security therefor, (ii) to advance or provide
funds or other support for the payment or purchase of any such
Indebtedness or to maintain working capital, solvency or other balance
sheet condition of such other Person (including without limitation keep
well agreements, maintenance agreements, comfort letters or similar
agreements or arrangements) for the benefit of any holder of
Indebtedness of such other Person, (iii) to lease or purchase Property,
securities or services primarily for the purpose of assuring the holder
of such Indebtedness, or (iv) to otherwise assure or hold harmless the
holder of such Indebtedness against loss in respect thereof. The amount
of any Guaranty
11
29
Obligation hereunder shall (subject to any limitations set forth
therein) be deemed to be an amount equal to the outstanding principal
amount (or maximum principal amount, if larger) of the Indebtedness in
respect of which such Guaranty Obligation is made.
"Hedging Agreements" means any interest rate protection
agreement or foreign currency exchange agreement between Borrower and
any Lender, or any Affiliate of a Lender.
"Indebtedness" means, with respect to any Person, without
duplication, (a) all obligations of such Person for borrowed money, (b)
all obligations of such Person evidenced by bonds, debentures, notes or
similar instruments, or upon which interest payments are customarily
made, (c) all obligations of such Person under conditional sale or
other title retention agreements relating to Property purchased by such
Person (other than customary reservations or retentions of title under
agreements with suppliers entered into in the ordinary course of
business), (d) all obligations of such Person issued or assumed as the
deferred purchase price of Property or services purchased by such
Person (other than trade debt incurred in the ordinary course of
business and due within six months of the incurrence thereof) which
would appear as liabilities on a balance sheet of such Person, (e) all
obligations of such Person under take-or-pay or similar arrangements or
under commodities agreements, (f) all Indebtedness of others secured by
(or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on, or payable out
of the proceeds of production from, Property owned or acquired by such
Person, whether or not the obligations secured thereby have been
assumed, (g) all Guaranty Obligations of such Person, (h) the principal
portion of all obligations of such Person under Capital Leases, (i) all
obligations of such Person under Hedging Agreements, (j) the maximum
amount of all standby letters of credit issued or bankers' acceptances
facilities created for the account of such Person and, without
duplication, all drafts drawn thereunder (to the extent unreimbursed),
(k) the principal portion of all obligations of such Person under
Synthetic Leases and (l) the Indebtedness of any partnership or
unincorporated joint venture in which such Person is a general partner
or a joint venturer.
"Interbank Offered Rate" means, for any Eurocurrency Loan for
any Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Telerate Page 3750
(or any successor page) as the London interbank offered rate for
deposits in Dollars at approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period. If for any reason such rate is not
available, the term "Interbank Offered Rate" shall mean, for any
Eurocurrency Loan for any Interest Period therefor, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing
on Reuters Screen LIBO Page as the London interbank offered rate for
deposits in Dollars at approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period; provided, however, if more than one
rate is specified on Reuters Screen LIBO Page, the applicable rate
shall be the arithmetic mean of all such rates (rounded upwards, if
necessary, to the nearest 1/100 of 1%).
12
30
"Interest Payment Date" means (a) as to Base Rate Loans, the
last Business Day of each calendar month, the date of repayment of
principal of such Loan and the Maturity Date, and (b) as to
Eurocurrency Loans, the last day of each applicable Interest Period,
the date of repayment of principal of such Loan and the Maturity Date,
and in addition where the applicable Interest Period for a Eurocurrency
Loan is greater than three months, then also the date three months from
the beginning of the Interest Period and each three months thereafter.
"Interest Period" means, as to Eurocurrency Loans, a period of
one, two, three or six months' duration, as the Borrower may elect,
commencing, in each case, on the date of the borrowing (including
continuations and conversions thereof); provided, however, (a) if any
Interest Period would end on a day which is not a Business Day, such
Interest Period shall be extended to the next succeeding Business Day
(except that where the next succeeding Business Day falls in the next
succeeding calendar month, then on the next preceding Business Day),
(b) no Interest Period shall extend beyond the Maturity Date, and (c)
where an Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month in which the
Interest Period is to end, such Interest Period shall end on the last
Business Day of such calendar month.
"Investment" means (a) the acquisition (whether for cash,
property, services, assumption of Indebtedness, securities or
otherwise) of assets, Capital Stock, bonds, notes, debentures,
partnership, joint ventures or other ownership interests or other
securities of any Person or (b) any deposit with, or advance, loan or
other extension of credit to, any Person (other than deposits made in
connection with the purchase or lease of equipment or other assets in
the ordinary course of business or the leasing of real property in the
ordinary course of business) or (c) any other capital contribution to
or investment in any Person, including, without limitation, any
Guaranty Obligations (including any support for a letter of credit
issued on behalf of such Person) incurred for the benefit of such
Person.
"Issuing Lender" means NationsBank.
"Issuing Lender Fees" shall have the meaning assigned to such
term in Section 3.5(c)(ii).
"Joinder Agreement" means a Joinder Agreement substantially in
the form of Exhibit 7.12 hereto, executed and delivered by an
Additional Credit Party in accordance with the provisions of Section
7.12.
"Lender" means any of the Persons identified as a "Lender" on
the signature pages hereto, and any Person which may become a Lender by
way of assignment in accordance with the terms hereof, together with
their successors and permitted assigns.
"Letter of Credit" means any letter of credit issued by the
Issuing Lender for the account of the Borrower in accordance with the
terms of Section 2.2.
13
31
"Letter of Credit Fee" shall have the meaning assigned to such
term in Section 3.5(c)(i).
"Leverage Ratio" means, with respect to the Consolidated
Parties on a consolidated basis for the twelve month period ending on
the last day of any fiscal quarter, the ratio of (a) Funded
Indebtedness of the Consolidated Parties on a consolidated basis on the
last day of such period to (b) Consolidated EBITDA for such period.
"Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, security interest, encumbrance, lien (statutory or
otherwise), preference, priority or charge of any kind (including any
agreement to give any of the foregoing, any conditional sale or other
title retention agreement, any financing or similar statement or notice
filed under the Uniform Commercial Code as adopted and in effect in the
relevant jurisdiction or other similar recording or notice statute, and
any lease in the nature thereof).
"Loan" or "Loans" means the Revolving Loans (or a portion of
any Revolving Loan bearing interest at the Adjusted Base Rate or the
Adjusted Eurocurrency Rate) and/or any Swingline Loans and/or any
Foreign Currency Loan (or any Foreign Currency Loan referred to as a
Eurocurrency Loan), individually or collectively, as appropriate.
"LOC Commitment" means the commitment of the Issuing Lender to
issue Letters of Credit, and to honor payment obligations under Letters
of Credit hereunder in an aggregate face amount at any time outstanding
(together with the amounts of any unreimbursed drawings thereon) of up
to the LOC Committed Amount and with respect to each Lender, the
commitment of each Lender to purchase participation interests in the
Letters of Credit.
"LOC Committed Amount" shall have the meaning assigned to such
term in Section 2.2.
"LOC Documents" means, with respect to any Letter of Credit,
such Letter of Credit, any amendments thereto, any documents delivered
in connection therewith, any application therefor, and any agreements,
instruments, guarantees or other documents (whether general in
application or applicable only to such Letter of Credit) governing or
providing for (i) the rights and obligations of the parties concerned
or at risk or (ii) any collateral security for such obligations.
"LOC Obligations" means, at any time, the sum of (i) the
maximum amount which is, or at any time thereafter may become,
available to be drawn under Letters of Credit then outstanding,
assuming compliance with all requirements for drawings referred to in
such Letters of Credit plus (ii) the aggregate amount of all drawings
under Letters of Credit honored by the Issuing Lender but not
theretofore reimbursed by the Borrower.
"Management Shareholder Group" means ▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇ ▇.
▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and their respective family
members and trusts and/or partnerships created for the benefit of such
family members or for charitable purposes.
14
32
"Material Adverse Effect" means a material adverse effect on
(i) the condition (financial or otherwise), operations, business,
assets, liabilities or prospects of the Borrower and its Subsidiaries
taken as a whole, (ii) the ability of any Credit Party to perform any
material obligation under the Credit Documents to which it is a party
or (iii) the material rights and remedies of the Lenders under the
Credit Documents.
"Materials of Environmental Concern" means any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products or any hazardous or toxic substances, materials or wastes,
defined or regulated as such in or under any Environmental Laws,
including, without limitation, asbestos, polychlorinated biphenyls and
urea-formaldehyde insulation.
"Maturity Date" means July 29, 2003.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., or any
successor or assignee of the business of such company in the business
of rating securities.
"Multiemployer Plan" means a Plan which is a multiemployer
plan as defined in Sections 3(37) or 4001(a)(3) of ERISA.
"Multiple Employer Plan" means a Plan which any Consolidated
Party or any ERISA Affiliate and at least one employer other than the
Consolidated Parties or any ERISA Affiliate are contributing sponsors.
"NationsBank" means NationsBank, N.A. and its successors.
"Net Cash Proceeds" means the aggregate cash proceeds received
by the Consolidated Parties in respect of any Asset Disposition or
Equity Issuance, net of (a) direct costs (including, without
limitation, legal, accounting and investment banking fees, and sales
commissions) and (b) taxes paid or payable as a result thereof; it
being understood that "Net Cash Proceeds" shall include, without
limitation, any cash received upon the sale or other disposition of any
non-cash consideration received by the Consolidated Parties in any
Asset Disposition or Equity Issuance.
"Net Worth" means, as of any date, shareholders' equity or net
worth of the Consolidated Parties on a consolidated basis as determined
in accordance with GAAP.
"Note" or "Notes" means the Revolving Notes, individually or
collectively, as appropriate.
"Notice of Borrowing" means a written notice of borrowing in
substantially the form of Exhibit 2.1(b)(i), as required by Section
2.1(b)(i) in the case of Revolving Loans or Exhibit 2.3(b)(i), as
required by Section 2.3(b)(i) in the case of Foreign Currency Loans.
15
33
"Notice of Extension/Conversion" means the written notice of
extension or conversion in substantially the form of Exhibit 3.2, as
required by Section 3.2.
"Operating Lease" means, as applied to any Person, any lease
(including, without limitation, leases which may be terminated by the
lessee at any time) of any Property (whether real, personal or mixed)
which is not a Capital Lease other than any such lease in which that
Person is the lessor.
"Other Taxes" shall have the meaning assigned to such term in
Section 3.11.
"Participation Interest" means a purchase by a Lender of a
participation in Letters of Credit or LOC Obligations as provided in
Section 2.2, in Swingline Loans as provided in Section 2.4 or in any
Loans as provided in Section 3.14.
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA and any
successor thereof.
"Permitted Acquisition" means an Acquisition by the Borrower
or any Subsidiary of the Borrower for consideration no greater than the
fair market value of the Capital Stock or Property acquired, provided
that (i) the Capital Stock or Property acquired in such Acquisition
constitute Eligible Assets, (ii) the Agent shall have received all
items in respect of the Capital Stock or Property acquired in such
Acquisition (and/or the seller thereof) required to be delivered by the
terms of Section 7.12 and/or Section 7.14, (iii) in the case of an
Acquisition of the Capital Stock of another Person, the board of
directors (or other comparable governing body) of such other Person
shall have duly approved such Acquisition, (iv) the Borrower shall have
delivered to the Agent a Pro Forma Compliance Certificate demonstrating
that, upon giving effect to such Acquisition on a pro forma basis, the
Credit Parties shall be in compliance with all of the covenants set
forth in Section 7.11, (v) the representations and warranties made by
the Credit Parties in any Credit Document shall be true and correct in
all material respects at and as if made as of the date of such
Acquisition (after giving effect thereto) except to the extent such
representations and warranties expressly relate to an earlier date,
(vi) unless otherwise approved in writing by the Required Lenders, the
cost of such Acquisition (including cash and any assumption of
liabilities) shall not exceed $25,000,000 and (vii) unless otherwise
approved in writing by the Required Lenders, after giving effect to
such Acquisition, the aggregate consideration (including cash and
non-cash consideration and any assumption of liabilities) for all such
Acquisitions occurring during any fiscal year shall not exceed
$50,000,000.
"Permitted Investments" means Investments which are either (i)
cash and Cash Equivalents; (ii) accounts receivable created, acquired
or made by any Consolidated Party in the ordinary course of business
and payable or dischargeable in accordance with customary trade terms;
(iii) Investments consisting of Capital Stock, obligations, securities
or other property received by any Consolidated Party in settlement of
accounts receivable (created in the ordinary course of business) from
bankrupt obligors; (iv) Investments existing as of the Closing Date and
set forth in Schedule 1.1(a), (v) Guaranty Obligations permitted by
Section 8.1; (vi) advances or loans to directors, officers, employees,
agents,
16
34
customers or suppliers that do not exceed $500,000 in the aggregate at
any one time outstanding for all of the Consolidated Parties; (vii)
Investments in any Credit Party; (viii) Investments by the Borrower in
Foreign Subsidiaries of the Borrower in an amount not to exceed
$2,000,000 in the aggregate during the term of this Credit Agreement;
(ix) Permitted Acquisitions, (x) compensation advances to commissioned
auditors made in the ordinary course of business and (xi) other loans,
advances and Investments of a nature not contemplated in the foregoing
subsections in an amount not to exceed $2,500,000 in the aggregate at
any time outstanding.
"Permitted Liens" means:
(i) Liens in favor of the Agent to secure the Credit Party
Obligations;
(ii) Liens (other than Liens created or imposed under ERISA)
for taxes, assessments or governmental charges or levies not yet due or
Liens for taxes being contested in good faith by appropriate
proceedings for which adequate reserves determined in accordance with
GAAP have been established (and as to which the Property subject to any
such Lien is not yet subject to foreclosure, sale or loss on account
thereof);
(iii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and suppliers and other Liens
imposed by law or pursuant to customary reservations or retentions of
title arising in the ordinary course of business, provided that such
Liens secure only amounts not yet due and payable or, if due and
payable, are unfiled and no other action has been taken to enforce the
same or are being contested in good faith by appropriate proceedings
for which adequate reserves determined in accordance with GAAP have
been established (and as to which the Property subject to any such Lien
is not yet subject to foreclosure, sale or loss on account thereof);
(iv) Liens (other than Liens created or imposed under ERISA)
incurred or deposits made by any Consolidated Party in the ordinary
course of business in connection with workers' compensation,
unemployment insurance and other types of social security, or to secure
the performance of tenders, statutory obligations, bids, leases,
government contracts, performance and return-of-money bonds and other
similar obligations (exclusive of obligations for the payment of
borrowed money);
(v) Liens in connection with attachments or judgments
(including judgment or appeal bonds) provided that the judgments
secured shall, within 30 days after the entry thereof, have been
discharged or execution thereof stayed pending appeal, or shall have
been discharged within 30 days after the expiration of any such stay;
(vi) easements, rights-of-way, restrictions (including zoning
restrictions), minor defects or irregularities in title and other
similar charges or encumbrances not, in any material respect, impairing
the use of the encumbered Property for its intended purposes;
(vii) Liens on Property of any Person securing purchase money
Indebtedness (including Capital Leases and Synthetic Leases) of such
Person to the extent permitted
17
35
under Section 8.1(c), provided that any such Lien attaches to such
Property concurrently with or within 90 days after the acquisition
thereof;
(viii) leases or subleases granted to others not interfering
in any material respect with the business of any Consolidated Party;
(ix) normal and customary rights of setoff upon deposits of
cash in favor of banks or other depository institutions; and
(x) Liens existing as of the Closing Date and set forth on
Schedule 1.1(b); provided that (a) no such Lien shall at any time be
extended to or cover any Property other than the Property subject
thereto on the Closing Date and (b) the principal amount of the
Indebtedness secured by such Liens shall not be extended, renewed,
refunded or refinanced.
"Person" means any individual, partnership, joint venture,
firm, corporation, limited liability company, association, trust or
other enterprise (whether or not incorporated) or any Governmental
Authority.
"Plan" means any employee benefit plan (as defined in Section
3(3) of ERISA) which is covered by ERISA and with respect to which any
Consolidated Party or any ERISA Affiliate is (or, if such plan were
terminated at such time, would under Section 4069 of ERISA be deemed to
be) an "employer" within the meaning of Section 3(5) of ERISA.
"Pledge Agreement" means the pledge agreement dated as of the
Closing Date executed in favor of the Agent by each of the Credit
Parties, as amended, modified, restated or supplemented from time to
time.
"Prime Rate" means the per annum rate of interest established
from time to time by NationsBank as its prime rate, which rate may not
be the lowest rate of interest charged by NationsBank to its customers.
"Pro Forma Compliance Certificate" means a certificate of an
Executive Officer of the Borrower delivered to the Agent in connection
with a Permitted Acquisition and containing reasonably detailed
calculations, upon giving effect to the applicable transaction on a pro
forma basis, of the financial covenants set forth in Section 7.11.
"Property" means any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
"Quoted Rate" means, with respect to a Swingline Loan, the
rate per annum offered by the Swingline Lender and accepted by the
Borrower with respect to such Swingline Loan.
"Register" shall have the meaning given such term in Section
11.3(c).
18
36
"Regulation T, U, or X" means Regulation T, U or X,
respectively, of the Board of Governors of the Federal Reserve System
as from time to time in effect and any successor to all or a portion
thereof.
"Release" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping
or disposing into the environment (including the abandonment or
discarding of barrels, containers and other closed receptacles) of any
Materials of Environmental Concern.
"Reportable Event" means any of the events set forth in
Section 4043(c) of ERISA, other than those events as to which the
notice requirement has been waived by regulation.
"Required Lenders" means, at any time, Lenders which are then
in compliance with their obligations hereunder (as determined by the
Agent) and holding in the aggregate at least 51% of (i) the Revolving
Commitments (and Participation Interests therein) or (ii) if the
Commitments have been terminated, the outstanding Loans and
Participation Interests (including the Participation Interests of the
Issuing Lender in any Letters of Credit).
"Requirement of Law" means, as to any Person, the certificate
of incorporation and by-laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or
any of its material property is subject.
"Restricted Payment" means (i) any dividend or other payment
or distribution, direct or indirect, on account of any shares of any
class of Capital Stock of any Consolidated Party, now or hereafter
outstanding (including without limitation any payment in connection
with any merger or consolidation involving any Consolidated Party), or
to the direct or indirect holders of any shares of any class of Capital
Stock of any Consolidated Party, now or hereafter outstanding, in their
capacity as such (other than dividends or distributions payable in the
same class of Capital Stock of the applicable Person or to any Credit
Party (directly or indirectly through Subsidiaries), (ii) any
redemption, retirement, sinking fund or similar payment, purchase or
other acquisition for value, direct or indirect, of any shares of any
class of Capital Stock of any Consolidated Party, now or hereafter
outstanding and (iii) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to
acquire shares of any class of Capital Stock of any Consolidated Party,
now or hereafter outstanding.
"Revolving Commitment" means, with respect to each Lender, the
commitment of such Lender in an aggregate principal amount at any time
outstanding of up to such Lender's Revolving Commitment Percentage of
the Revolving Committed Amount, (i) to make Revolving Loans in
accordance with the provisions of Section 2.1(a) and (ii) to purchase
Participation Interests in Letters of Credit in accordance with the
provisions of Section 2.2(c).
19
37
"Revolving Commitment Percentage" means, for any Lender, the
percentage identified as its Revolving Commitment Percentage on
Schedule 2.1(a), as such percentage may be modified in connection with
any assignment made in accordance with the provisions of Section 11.3.
"Revolving Committed Amount" shall have the meaning assigned
to such term in Section 2.1(a).
"Revolving Loans" shall have the meaning assigned to such term
in Section 2.1(a).
"Revolving Note" or "Revolving Notes" means the promissory
notes of the Borrower in favor of each of the Lenders evidencing the
Revolving Loans provided pursuant to Section 2.1(e), individually or
collectively, as appropriate, as such promissory notes may be amended,
modified, restated, supplemented, extended, renewed or replaced from
time to time.
"Revolving Obligations" means, collectively, the Revolving
Loans, the Foreign Currency Loans, the Swingline Loans and the LOC
Obligations.
"S&P" means Standard & Poor's Ratings Group, a division of
McGraw Hill, Inc., or any successor or assignee of the business of such
division in the business of rating securities.
"Sale and Leaseback Transaction" means any direct or indirect
arrangement with any Person or to which any such Person is a party,
providing for the leasing to any Consolidated Party of any Property,
whether owned by such Consolidated Party as of the Closing Date or
later acquired, which has been or is to be sold or transferred by such
Consolidated Party to such Person or to any other Person from whom
funds have been, or are to be, advanced by such Person on the security
of such Property.
"Security Agreement" means the security agreement dated as of
the Closing Date executed in favor of the Agent by each of the Credit
Parties, as amended, modified, restated or supplemented from time to
time.
"Single Employer Plan" means any Plan which is covered by
Title IV of ERISA, but which is not a Multiemployer Plan or a Multiple
Employer Plan.
"Solvent" or "Solvency" means, with respect to any Person as
of a particular date, that on such date (i) such Person is able to
realize upon its assets and pay its debts and other liabilities,
contingent obligations and other commitments as they mature in the
normal course of business, (ii) such Person does not intend to, and
does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature in their
ordinary course, (iii) such Person is not engaged in a business or a
transaction, and is not about to engage in a business or a transaction,
for which such Person's Property would constitute unreasonably small
capital after giving due consideration to the prevailing practice in
the industry in which such Person is engaged or is
20
38
to engage, (iv) the fair value of the Property of such Person is
greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person and (v) the present
fair salable value of the assets of such Person is not less than the
amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured. In computing
the amount of contingent liabilities at any time, it is intended that
such liabilities will be computed at the amount which, in light of all
the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured
liability.
"Subsidiary" means, as to any Person at any time, (a) any
corporation more than 50% of whose Capital Stock of any class or
classes having by the terms thereof ordinary voting power to elect a
majority of the directors of such corporation (irrespective of whether
or not at such time, any class or classes of such corporation shall
have or might have voting power by reason of the happening of any
contingency) is at such time owned by such Person directly or
indirectly through Subsidiaries, and (b) any partnership, association,
joint venture or other entity of which such Person directly or
indirectly through Subsidiaries owns at such time more than 50% of the
Capital Stock.
"Subsidiary Guarantor" means each of the Persons identified as
a "Subsidiary Guarantor" on the signature pages hereto and each
Additional Credit Party which may hereafter execute a Joinder
Agreement, together with their successors and permitted assigns, and
"Subsidiary Guarantor" means any one of them.
"Swingline Commitment" means the commitment of the Swingline
Lender to make Swingline Loans in an aggregate principal amount at any
time outstanding of up to the Swingline Committed Amount.
"Swingline Committed Amount" shall have the meaning assigned
to such term in Section 2.4(a).
"Swingline Lender" means NationsBank.
"Swingline Loan" shall have the meaning assigned to such term
in Section 2.4(a).
"Swingline Note" means the promissory note of the Borrower in
favor of the Swingline Lender in the original principal amount of
$10,000,000, as such promissory note may be amended, modified, restated
or replaced from time to time.
"Synthetic Lease" means any synthetic lease, tax retention
operating lease, off-balance sheet loan or similar off-balance sheet
financing product where such transaction is considered borrowed money
indebtedness for tax purposes but is classified as an Operating Lease.
"Taxes" shall have the meaning assigned to such term in
Section 3.11.
21
39
"Total Assets" means, as of any date, all items, which in
accordance with GAAP, would be classified as assets of the Consolidated
Parties on a consolidated basis.
"Total Capitalization" means, at any date of determination
calculated for the Consolidated Parties on a consolidated basis the sum
of (i) Net Worth plus (ii) Funded Indebtedness of the Consolidated
Parties.
"Unused Fee" shall have the meaning assigned to such term in
Section 3.5(b).
"Unused Fee Calculation Period" shall have the meaning
assigned to such term in Section 3.5(b).
"Unused Revolving Committed Amount" means, for any period, the
amount by which (a) the then applicable Revolving Committed Amount
exceeds (b) the daily average sum for such period of (i) the
outstanding aggregate principal amount of all Revolving Loans plus (ii)
the outstanding aggregate principal amount of all LOC Obligations.
"Upfront Fee" shall have the meaning assigned to such term in
Section 3.5(a).
"Voting Stock" means, with respect to any Person, Capital
Stock issued by such Person the holders of which are ordinarily, in the
absence of contingencies, entitled to vote for the election of
directors (or persons performing similar functions) of such Person,
even though the right so to vote has been suspended by the happening of
such a contingency.
"Wholly Owned Subsidiary" of any Person means any Subsidiary
100% of whose Voting Stock is at the time owned by such Person directly
or indirectly through other Wholly Owned Subsidiaries.
1.2 COMPUTATION OF TIME PERIODS.
For purposes of computation of periods of time hereunder, the word
"from" means "from and including" and the words "to" and "until" each mean "to
but excluding."
1.3 ACCOUNTING TERMS.
Except as otherwise expressly provided herein, all accounting terms
used herein shall be interpreted, and all financial statements and certificates
and reports as to financial matters required to be delivered to the Lenders
hereunder shall be prepared, in accordance with GAAP applied on a consistent
basis. All calculations made for the purposes of determining compliance with
this Credit Agreement shall (except as otherwise expressly provided herein) be
made by application of GAAP applied on a basis consistent with the most recent
annual or quarterly financial statements delivered pursuant to Section 7.1 (or,
prior to the delivery of the first financial statements pursuant to Section 7.1,
consistent with the financial statements as at December 31, 1997); provided,
however, if (a) the Credit Parties shall object to determining such compliance
on such basis at the time of delivery of such financial statements due to any
change in GAAP or the rules promulgated with respect thereto or (b) the Agent or
the Required Lenders shall so object in writing within 60 days after delivery of
22
40
such financial statements, then such calculations shall be made on a basis
consistent with the most recent financial statements delivered by the Credit
Parties to the Lenders as to which no such objection shall have been made.
Notwithstanding the above, the parties hereto acknowledge and agree that, for
purposes of all calculations made under the financial covenants set forth in
Section 7.11 so long as the Borrower shall have provided the Agent with a Pro
Forma Compliance Certificate with respect to the applicable Permitted
Acquisition, income statement items (whether positive or negative) attributable
to the Property acquired in any Permitted Acquisition and any Indebtedness
incurred by the Borrower or any of its Subsidiaries in order to consummate such
Permitted Acquisition shall be included to the extent relating to any period
applicable in such calculations occurring after the date of such Permitted
Acquisition (and, notwithstanding the foregoing, during the first four fiscal
quarters following the date of such Permitted Acquisition, (i) such Permitted
Acquisition and any Indebtedness incurred by the Borrower or any of its
Subsidiaries in order to consummate such Permitted Acquisition (A) shall be
deemed to have occurred on the first day of the four fiscal quarter period
immediately preceding the date of such Permitted Acquisition and (B) if such
Indebtedness has a floating or formula rate, then the implied rate of interest
for such Indebtedness for the applicable period shall be determined by utilizing
the rate which is or would be in effect with respect to such Indebtedness as at
the relevant date of determination and (ii) with respect to the calculation of
Consolidated EBITDA and Consolidated EBIT (A) such Consolidated EBITDA or
Consolidated EBIT shall be increased by an amount approved by the Agent, in its
reasonable discretion, as the Excess Compensation (as defined below) applicable
to the period under consideration, (B) the Borrower agrees to provide the Agent
with such supporting documentation for such Excess Compensation as shall be
requested from time to time by the Agent and (C) as used in this Section 1.3,
the term "Excess Compensation" shall mean the amount by which compensation paid
to owners, employees and/or independent contractors of a former privately held
company prior to the acquisition of such company in connection with a Permitted
Acquisition exceeds the compensation to be paid to such owners, employees and
independent contractors after the closing of such Permitted Acquisition).
SECTION 2
CREDIT FACILITIES
2.1 REVOLVING LOANS.
(a) Revolving Commitment. Subject to the terms and conditions
hereof and in reliance upon the representations and warranties set
forth herein, each Lender severally agrees to make available to the
Borrower such Lender's Revolving Commitment Percentage of revolving
credit loans requested by the Borrower in Dollars ("Revolving Loans")
from time to time from the Closing Date until the Maturity Date, or
such earlier date as the Revolving Commitments shall have been
terminated as provided herein; provided, however, that (i) with regard
to the Lenders collectively, the Dollar Amount (determined as of the
most recent Determination Date) of Revolving Obligations outstanding
shall not exceed ONE HUNDRED FIFTY MILLION DOLLARS ($150,000,000) (as
such
23
41
aggregate maximum amount may be reduced from time to time as provided
in Section 3.4, the "Revolving Committed Amount"); provided, further,
(ii) with regard to each Lender individually, the Dollar Amount
(determined as of the most recent Determination Date) of such Lender's
Revolving Commitment Percentage of the sum of the Revolving Loans plus
Foreign Currency Loans plus LOC Obligations plus Swingline Loans
outstanding shall not exceed such Lender's Revolving Committed Amount.
Revolving Loans may consist of Base Rate Loans or Eurocurrency Loans,
or a combination thereof, as the Borrower may request; provided,
however, that no more than eight (8) Eurocurrency Loans shall be
outstanding hereunder at any time (it being understood that, for
purposes hereof, Eurocurrency Loans with different Interest Periods
shall be considered as separate Eurocurrency Loans, even if they begin
on the same date, although borrowings, extensions and conversions may,
in accordance with the provisions hereof, be combined at the end of
existing Interest Periods to constitute a new Eurocurrency Loan with a
single Interest Period). Revolving Loans hereunder may be repaid and
reborrowed in accordance with the provisions hereof.
(b) Revolving Loan Borrowings.
(i) Notice of Borrowing. The Borrower shall request a
Revolving Loan borrowing by written notice (or telephonic
notice promptly confirmed in writing) to the Agent not later
than 11:00 A.M. (Charlotte, North Carolina time) on the
Business Day prior to the date of the requested borrowing in
the case of Base Rate Loans, and on the third Business Day
prior to the date of the requested borrowing in the case of
Eurocurrency Loans. Each such request for borrowing shall be
irrevocable and shall specify (A) that a Revolving Loan is
requested, (B) the date of the requested borrowing (which
shall be a Business Day), (C) the aggregate principal amount
to be borrowed, and (D) whether the borrowing shall be
comprised of Base Rate Loans, Eurocurrency Loans or a
combination thereof, and if Eurocurrency Loans are requested,
the Interest Period(s) therefor. If the Borrower shall fail to
specify in any such Notice of Borrowing (I) an applicable
Interest Period in the case of a Eurocurrency Loan, then such
notice shall be deemed to be a request for an Interest Period
of one month, or (II) the type of Revolving Loan requested,
then such notice shall be deemed to be a request for a Base
Rate Loan hereunder. The Agent shall give notice to each
affected Lender promptly upon receipt of each Notice of
Borrowing pursuant to this Section 2.1(b)(i), the contents
thereof and each such Lender's share of any borrowing to be
made pursuant thereto.
(ii) Minimum Amounts. Each Base Rate Loan that is a
Revolving Loan shall be in a minimum aggregate principal
amount of $1,000,000 and integral multiples of $500,000 in
excess thereof (or the remaining amount of the Revolving
Committed Amount, if less), and each Eurocurrency Loan that is
a Revolving Loan shall be in a minimum aggregate principal
amount of $2,500,000 and integral multiples of $1,000,000 in
excess thereof (or the remaining amount of the Revolving
Committed Amount, if less).
24
42
(iii) Advances. Each Lender will make its Revolving
Commitment Percentage of each Revolving Loan borrowing
available to the Agent for the account of the Borrower as
specified in Section 3.15(a), or in such other manner as the
Agent may specify in writing, by 1:00 P.M. (Charlotte, North
Carolina time) on the date specified in the applicable Notice
of Borrowing in Dollars and in funds immediately available to
the Agent. Such borrowing will then be made available to the
Borrower by the Agent by crediting the account of the Borrower
on the books of such office with the aggregate of the amounts
made available to the Agent by the Lenders and in like funds
as received by the Agent.
(c) Repayment. The principal amount of all Revolving Loans
shall be due and payable in full on the Maturity Date, unless
accelerated sooner pursuant to Section 9.2.
(d) Interest. Subject to the provisions of Section 3.1,
(i) Base Rate Loans. During such periods as Revolving
Loans shall be comprised in whole or in part of Base Rate
Loans, such Base Rate Loans shall bear interest at a per annum
rate equal to the Adjusted Base Rate.
(ii) Eurocurrency Loans. During such periods as
Revolving Loans shall be comprised in whole or in part of
Eurocurrency Loans, such Eurocurrency Loans shall bear
interest at a per annum rate equal to the Adjusted
Eurocurrency Rate.
Interest on Revolving Loans shall be payable in arrears on each
applicable Interest Payment Date (or at such other times as may be
specified herein).
(e) Revolving Notes. The Revolving Loans made by each Lender
shall be evidenced by a duly executed promissory note of the Borrower
to such Lender in an original principal amount equal to such Lender's
Revolving Commitment Percentage of the Revolving Committed Amount and
in substantially the form of Exhibit 2.1(e).
2.2 LETTER OF CREDIT SUBFACILITY.
(a) Issuance. Subject to the terms and conditions hereof and
of the LOC Documents, if any, and any other terms and conditions which
the Issuing Lender may reasonably require and in reliance upon the
representations and warranties set forth herein, the Issuing Lender
agrees to issue, and each Lender severally agrees to participate in the
issuance by the Issuing Lender of Letters of Credit in Dollars from
time to time from the Closing Date until the Maturity Date as the
Borrower may request, in a form acceptable to the Issuing Lender in its
reasonable discretion; provided, however, that (i) the LOC Obligations
outstanding shall not at any time exceed TEN MILLION DOLLARS
($10,000,000) (the "LOC Committed Amount"), (ii) with regard to the
Lenders collectively, the Dollar Amount (determined as of the most
recent Determination Date) of the Revolving Obligations shall not
exceed the Revolving Committed Amount and (iii) with regard to each
Lender individually, the Dollar Amount (determined as of the most
recent Determination Date) of the sum of the Revolving Loans plus LOC
Obligations plus Foreign Currency
25
43
Loans plus Swingline Loans outstanding shall not exceed such Lender's
Revolving Commitment Percentage of the Revolving Committed Amount. No
Letter of Credit shall (x) have an original expiry date more than one
year from the date of issuance or (y) as originally issued or as
extended, have an expiry date extending beyond the Maturity Date. Each
Letter of Credit (1) shall comply with the related LOC Documents, (2)
may be issued only for the purposes set forth in Section 6.15 hereof
and (3) may be issued only in Dollars. The issuance and expiry dates of
each Letter of Credit shall be a Business Day.
(b) Notice and Reports. The request for the issuance of a
Letter of Credit shall be submitted by the Borrower to the Issuing
Lender at least three (3) Business Days prior to the requested date of
issuance. The Issuing Lender will, at least quarterly and more
frequently upon request, disseminate to each of the Lenders a detailed
report specifying the Letters of Credit which are then issued and
outstanding and any activity with respect thereto which may have
occurred since the date of the prior report, and including therein,
among other things, the beneficiary, the face amount and the expiry
date, as well as any payment or expirations which may have occurred.
(c) Participation. Each Lender, upon issuance of a Letter of
Credit, shall be deemed to have purchased without recourse a
Participation Interest from the Issuing Lender in such Letter of Credit
and the obligations arising thereunder and any collateral relating
thereto, in each case in an amount equal to its pro rata share of the
obligations under such Letter of Credit (based on the respective
Revolving Commitment Percentages of the Lenders) and shall absolutely,
unconditionally and irrevocably assume and be obligated to pay to the
Issuing Lender and discharge when due, its pro rata share of the
obligations arising under such Letter of Credit. Without limiting the
scope and nature of each Lender's Participation Interest in any Letter
of Credit, to the extent that the Issuing Lender has not been
reimbursed as required hereunder or under any such Letter of Credit,
each such Lender shall pay to the Issuing Lender its pro rata share of
such unreimbursed drawing in same day funds on the day of notification
by the Issuing Lender of an unreimbursed drawing pursuant to the
provisions of subsection (d) below. The obligation of each Lender to so
reimburse the Issuing Lender shall be absolute and unconditional and
shall not be affected by the occurrence of a Default, an Event of
Default or any other occurrence or event. Any such reimbursement shall
not relieve or otherwise impair the obligation of the Borrower to
reimburse the Issuing Lender under any Letter of Credit, together with
interest as hereinafter provided.
(d) Reimbursement. In the event of any drawing under any
Letter of Credit, the Issuing Lender will promptly notify the Borrower.
Unless the Borrower shall immediately notify the Issuing Lender that
the Borrower intends to otherwise reimburse the Issuing Lender for such
drawing, the Borrower shall be deemed to have requested that the
Lenders make a Revolving Loan in the amount of the drawing as provided
in subsection (e) below on the related Letter of Credit, the proceeds
of which will be used to satisfy the related reimbursement obligations.
The Borrower promises to reimburse the Issuing Lender on the day of
drawing under any Letter of Credit (either with the proceeds of a
Revolving Loan obtained hereunder or otherwise) in same day funds. If
the Borrower shall fail to reimburse the Issuing Lender as provided
hereinabove, the unreimbursed amount of such drawing
26
44
shall bear interest at a per annum rate equal to the Adjusted Base Rate
plus 2%. The Borrower's reimbursement obligations hereunder shall be
absolute and unconditional under all circumstances irrespective of any
rights of setoff, counterclaim or defense to payment the Borrower may
claim or have against the Issuing Lender, the Agent, the Lenders, the
beneficiary of the Letter of Credit drawn upon or any other Person,
including without limitation any defense based on any failure of the
Borrower or any other Credit Party to receive consideration or the
legality, validity, regularity or unenforceability of the Letter of
Credit. The Issuing Lender will promptly notify the other Lenders of
the amount of any unreimbursed drawing and each Lender shall promptly
pay to the Agent for the account of the Issuing Lender in Dollars and
in immediately available funds, the amount of such Lender's pro rata
share of such unreimbursed drawing. Such payment shall be made on the
day such notice is received by such Lender from the Issuing Lender if
such notice is received at or before 2:00 P.M. (Charlotte, North
Carolina time) otherwise such payment shall be made at or before 12:00
Noon (Charlotte, North Carolina time) on the Business Day next
succeeding the day such notice is received. If such Lender does not pay
such amount to the Issuing Lender in full upon such request, such
Lender shall, on demand, pay to the Agent for the account of the
Issuing Lender interest on the unpaid amount during the period from the
date of such drawing until such Lender pays such amount to the Issuing
Lender in full at a rate per annum equal to, if paid within two (2)
Business Days of the date that such Lender is required to make payments
of such amount pursuant to the preceding sentence, the Federal Funds
Rate and thereafter at a rate equal to the Base Rate. Each Lender's
obligation to make such payment to the Issuing Lender, and the right of
the Issuing Lender to receive the same, shall be absolute and
unconditional, shall not be affected by any circumstance whatsoever and
without regard to the termination of this Credit Agreement or the
Commitments hereunder, the existence of a Default or Event of Default
or the acceleration of the obligations of the Borrower hereunder and
shall be made without any offset, abatement, withholding or reduction
whatsoever. Simultaneously with the making of each such payment by a
Lender to the Issuing Lender, such Lender shall, automatically and
without any further action on the part of the Issuing Lender or such
Lender, acquire a Participation Interest in an amount equal to such
payment (excluding the portion of such payment constituting interest
owing to the Issuing Lender) in the related unreimbursed drawing
portion of the LOC Obligation and in the interest thereon and in the
related LOC Documents, and shall have a claim against the Borrower with
respect thereto.
(e) Repayment with Revolving Loans. On any day on which the
Borrower shall have requested, or been deemed to have requested, a
Revolving Loan advance to reimburse a drawing under a Letter of Credit,
the Agent shall give notice to the Lenders that a Revolving Loan has
been requested or deemed requested by the Borrower to be made in
connection with a drawing under a Letter of Credit, in which case a
Revolving Loan advance comprised of Base Rate Loans (or Eurocurrency
Loans to the extent the Borrower has complied with the procedures of
Section 2.1(b)(i) with respect thereto) shall be immediately made to
the Borrower by all Lenders (notwithstanding any termination of the
Commitments pursuant to Section 9.2) pro rata based on the respective
Revolving Commitment Percentages of the Lenders (determined before
giving effect to any termination of the Commitments pursuant to Section
9.2) and the proceeds thereof shall be paid directly to the Issuing
Lender for application to the respective LOC Obligations. Each
27
45
such Lender hereby irrevocably agrees to make its pro rata share of
each such Revolving Loan immediately upon any such request or deemed
request in the amount, in the manner and on the date specified in the
preceding sentence notwithstanding (i) the amount of such borrowing may
not comply with the minimum amount for advances of Revolving Loans
otherwise required hereunder, (ii) whether any conditions specified in
Section 5.2 are then satisfied, (iii) whether a Default or an Event of
Default then exists, (iv) failure for any such request or deemed
request for Revolving Loan to be made by the time otherwise required
hereunder, (v) whether the date of such borrowing is a date on which
Revolving Loans are otherwise permitted to be made hereunder or (vi)
any termination of the Commitments relating thereto immediately prior
to or contemporaneously with such borrowing. In the event that any
Revolving Loan cannot for any reason be made on the date otherwise
required above (including, without limitation, as a result of the
commencement of a proceeding under the Bankruptcy Code with respect to
the Borrower or any other Credit Party), then each such Lender hereby
agrees that it shall forthwith purchase (as of the date such borrowing
would otherwise have occurred, but adjusted for any payments received
from the Borrower on or after such date and prior to such purchase)
from the Issuing Lender such Participation Interests in the outstanding
LOC Obligations as shall be necessary to cause each such Lender to
share in such LOC Obligations ratably (based upon the respective
Revolving Commitment Percentages of the Lenders (determined before
giving effect to any termination of the Commitments pursuant to Section
9.2)), provided that at the time any purchase of Participation
Interests pursuant to this sentence is actually made, the purchasing
Lender shall be required to pay to the Issuing Lender, to the extent
not paid to the Issuer by the Borrower in accordance with the terms of
subsection (d) above, interest on the principal amount of Participation
Interests purchased for each day from and including the day upon which
such borrowing would otherwise have occurred to but excluding the date
of payment for such Participation Interests, at the rate equal to, if
paid within two (2) Business Days of the date of the Revolving Loan
advance, the Federal Funds Rate, and thereafter at a rate equal to the
Base Rate.
(f) Designation of Credit Parties as Account Parties.
Notwithstanding anything to the contrary set forth in this Credit
Agreement, including without limitation Section 2.2(a), a Letter of
Credit issued hereunder may contain a statement to the effect that such
Letter of Credit is issued for the account of a Credit Party other than
the Borrower, provided that notwithstanding such statement, the
Borrower shall be the actual account party for all purposes of this
Credit Agreement for such Letter of Credit and such statement shall not
affect the Borrower's reimbursement obligations hereunder with respect
to such Letter of Credit.
(g) Renewal, Extension. The renewal or extension of any Letter
of Credit shall, for purposes hereof, be treated in all respects the
same as the issuance of a new Letter of Credit hereunder.
(h) Uniform Customs and Practices. The Issuing Lender may have
the Letters of Credit be subject to The Uniform Customs and Practice
for Documentary Credits, as published as of the date of issue by the
International Chamber of Commerce (the "UCP"),
28
46
in which case the UCP may be incorporated therein and deemed in all
respects to be a part thereof.
(i) Indemnification; Nature of Issuing Lender's Duties.
(i) In addition to its other obligations under this
Section 2.2, the Borrower hereby agrees to pay, and protect,
indemnify and save each Lender harmless from and against, any
and all claims, demands, liabilities, damages, losses, costs,
charges and expenses (including reasonable attorneys' fees)
that such Lender actually incurs or becomes subject to as a
consequence, direct or indirect, of (A) the issuance of any
Letter of Credit or (B) the failure of such Lender to honor a
drawing under a Letter of Credit as a result of any act or
omission, whether rightful or wrongful, of any present or
future de jure or de facto government or Governmental
Authority (all such acts or omissions, herein called
"Government Acts").
(ii) As between the Borrower and the Lenders
(including the Issuing Lender), the Borrower shall assume all
risks of the acts, omissions or misuse of any Letter of Credit
by the beneficiary thereof. Subject to the terms of Section
(i)(v) below, no Lender (including the Issuing Lender) shall
be responsible: (A) for the form, validity, sufficiency,
accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for
and issuance of any Letter of Credit, even if it should in
fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged; (B) for the validity or
sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit or the
rights or benefits thereunder or proceeds thereof, in whole or
in part, that may prove to be invalid or ineffective for any
reason; (C) for errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise, whether or not they be in
cipher; (D) for any loss or delay in the transmission or
otherwise of any document required in order to make a drawing
under a Letter of Credit or of the proceeds thereof; and (E)
for any consequences arising from causes beyond the control of
such Lender, including, without limitation, any Government
Acts. None of the above shall affect, impair, or prevent the
vesting of the Issuing Lender's rights or powers hereunder.
(iii) In furtherance and extension and not in
limitation of the specific provisions hereinabove set forth,
any action taken or omitted by any Lender (including the
Issuing Lender), under or in connection with any Letter of
Credit or the related certificates, if taken or omitted in
good faith, shall not put such Lender under any resulting
liability to the Borrower or any other Credit Party. It is the
intention of the parties that this Credit Agreement shall be
construed and applied to protect and indemnify each Lender
(including the Issuing Lender) against any and all risks
involved in the issuance of the Letters of Credit, all of
which risks are hereby assumed by the Borrower (on behalf of
itself and each of the other Credit Parties), including,
without limitation, any and all Government Acts. No Lender
(including the Issuing Lender) shall, in any way, be liable
for any failure by such
29
47
Lender or anyone else to pay any drawing under any Letter of
Credit as a result of any Government Acts or any other cause
beyond the control of such Lender.
(iv) Nothing in this subsection (i) is intended to
limit the reimbursement obligations of the Borrower contained
in subsection (d) above. The obligations of the Borrower under
this subsection (i) shall survive the termination of this
Credit Agreement. No act or omission of any current or prior
beneficiary of a Letter of Credit shall in any way affect or
impair the rights of the Lenders (including the Issuing
Lender) to enforce any right, power or benefit under this
Credit Agreement.
(v) Notwithstanding anything to the contrary
contained in this subsection (i), the Borrower shall have no
obligation to indemnify any Lender (including the Issuing
Lender) in respect of any liability incurred by such Lender
(A) arising solely out of the gross negligence or willful
misconduct of such Lender, as determined by a court of
competent jurisdiction, or (B) caused by such Lender's failure
to pay under any Letter of Credit after presentation to it of
a request strictly complying with the terms and conditions of
such Letter of Credit, as determined by a court of competent
jurisdiction, unless such payment is prohibited by any law,
regulation, court order or decree.
(j) Responsibility of Issuing Lender. It is expressly
understood and agreed that the obligations of the Issuing Lender
hereunder to the Lenders are only those expressly set forth in this
Credit Agreement and that the Issuing Lender shall be entitled to
assume that the conditions precedent set forth in Section 5.2 have been
satisfied unless it shall have acquired actual knowledge that any such
condition precedent has not been satisfied; provided, however, that
nothing set forth in this Section 2.2 shall be deemed to prejudice the
right of any Lender to recover from the Issuing Lender any amounts made
available by such Lender to the Issuing Lender pursuant to this Section
2.2 in the event that it is determined by a court of competent
jurisdiction that the payment with respect to a Letter of Credit
constituted gross negligence or willful misconduct on the part of the
Issuing Lender.
(k) Conflict with LOC Documents. In the event of any conflict
between this Credit Agreement and any LOC Document (including any
letter of credit application), this Credit Agreement shall control.
2.3 FOREIGN CURRENCY LOAN SUBFACILITY.
(a) Foreign Currency Commitment. Subject to the terms and conditions
hereof and in reliance upon the representations and warranties set forth herein,
each Lender severally agrees to make certain foreign currency revolving loans in
Available Foreign Currencies ("Foreign Currency Loans") to the Borrower from
time to time in the amount of such Lender's Foreign Currency Commitment
Percentage of such Foreign Currency Loans; provided, however, that the Dollar
Amount (as determined as of the most recent Determination Date) of the sum of
Foreign Currency Loans outstanding at any time shall not exceed SEVENTY-FIVE
MILLION DOLLARS ($75,000,000) (the "Foreign Currency Committed Amount";
provided, further, (i) with regard to each Lender individually, (A) the Dollar
Amount (determined as of the most recent Determination
30
48
Date) of such Lender's Revolving Commitment Percentage of the sum of the
Revolving Loans plus Foreign Currency Loans plus LOC Obligations plus Swingline
Loans outstanding shall not exceed such Lender's Revolving Commitment Percentage
of the Revolving Committed Amount, and (B) the Dollar Amount (determined as of
the most recent Determination Date) of such Lender's portion (including
participation interests therein) of the Foreign Currency Loans outstanding shall
not exceed such Lender's Foreign Currency Commitment Percentage of the Foreign
Currency Committed Amount and (ii) with regard to the Lenders collectively, the
Dollar Amount (as determined as of the most recent Determination Date) of the
Revolving Obligations shall not exceed the Revolving Committed Amount. Foreign
Currency Loans shall consist solely of Eurocurrency Loans and may be repaid and
reborrowed in accordance with the provisions hereof. For purposes hereof,
Eurocurrency Loans with different Interest Periods and/or in different
currencies shall be considered as separate Eurocurrency Loans, even if they
begin on the same date, although borrowings, extensions and conversions may, in
accordance with the provisions hereof, be combined at the end of existing
Interest Periods to constitute a new Eurocurrency Loan with a single Interest
Period and in the same currency.
(b) Foreign Currency Loan Borrowings.
(i) Notice of Borrowing. The Borrower shall request a Foreign
Currency Loan borrowing by written notice (or telephone notice promptly
confirmed in writing) to the Agent not later than 11:00 A.M.
(Charlotte, North Carolina time) on the third Business Day prior to the
date of the requested borrowing. Each such request for borrowing shall
be irrevocable and shall specify (A) that a Foreign Currency Loan is
requested, (B) the requested Available Foreign Currency, (C) the date
of the requested borrowing (which shall be a Business Day), (D) the
aggregate principal amount to be borrowed and (E) the Interest
Period(s) therefor. If the Borrower shall fail to specify in any such
Notice of Borrowing an applicable Interest Period, then such notice
shall be deemed to be a request for an Interest Period of one month.
The Agent shall give notice to each Lender promptly upon receipt of
each Notice of Borrowing, the contents thereof and each such Lender's
share of any borrowing to be made pursuant thereto.
(ii) Minimum Amounts. Each Foreign Currency Loan shall be in a
minimum aggregate principal amount equal to the applicable Foreign
Currency Equivalent of $2,500,000 and integral multiples of the
applicable Foreign Currency Equivalent of $500,000 in excess thereof
(or the remaining amount of the Foreign Currency Commitment, if less).
(iii) Advances. Each Lender will make its Foreign Currency
Commitment Percentage of each Foreign Currency Loan borrowing available
to the Agent by 1:00 P.M., local time in the place where such deposit
is required to be made by the succeeding terms hereof, on the date
specified in the applicable Notice of Borrowing by deposit with the
Agent, at the same place and same account specified in Section 3.15(a)
for payments by the Borrower in the applicable Available Foreign
Currency, of same day funds in the applicable Available Foreign
Currency. Such deposit will be made to such accounts in the primary
market for such Foreign Currencies as the Agent shall specify from time
to time by notice to the Lenders. To the extent funds are received from
the Lenders, the Agent shall promptly
31
49
make such funds available to the Borrower by wire transfer to such
accounts as the Borrower shall have specified to the Agent.
(c) Repayment. The principal amount of all Foreign Currency Loans shall
be due and payable in full in the applicable Available Foreign Currency on the
Maturity Date, unless accelerated sooner pursuant to Section 9.2.
(d) Interest. Subject to the provisions of Section 3.1, Foreign
Currency Loans shall bear interest at a per annum rate equal to the Adjusted
Eurocurrency Rate. Interest on Foreign Currency Loans shall be payable (in the
applicable Available Foreign Currency) in arrears on each applicable Interest
Payment Date (or at such other times as may be specified herein).
(e) Foreign Currency Notes. The Foreign Currency Loans shall be
evidenced by a Revolving Note duly executed by the Borrower in favor of each
Lender.
2.4 SWINGLINE LOAN SUBFACILITY.
(a) Swingline Commitment. Subject to the terms and conditions hereof,
the Swingline Lender, in its individual capacity, agrees to make certain
revolving credit loans to the Borrower (each a "Swingline Loan" and,
collectively, the "Swingline Loans") from time to time from the Closing Date
until the Maturity Date for the purposes hereinafter set forth; provided,
however, (i) the aggregate amount of Swingline Loans outstanding at any time
shall not exceed TEN MILLION DOLLARS ($10,000,000.00) (the "Swingline Committed
Amount"), and (ii) with regard to the Lenders collectively, the amount of
outstanding Revolving Obligations outstanding (including the Dollar Amount
(determined as of the most recent Determination Date) of the outstanding Foreign
Currency Loans) shall not exceed the Revolving Committed Amount. Swingline Loans
hereunder shall be made in accordance with the provisions of this Section 2.4,
and may be repaid and reborrowed in accordance with the provisions hereof.
(b) Swingline Loan Advances.
(i) Notices; Disbursement. Swingline Loan advances
shall be made in accordance with the provisions of any
agreement between the Swingline Lender and the Borrower
establishing an "Auto Borrow" plan for, among other things,
the automatic advance to the Borrower for deposit into an
account of the Borrower with the Swingline Lender.
(ii) Repayment of Swingline Loans. The principal
amount of all Swingline Loans shall be due and payable on the
Maturity Date. The Swingline Lender may, at any time, in its
sole discretion, by written notice to the Borrower and the
Lenders, demand repayment of its Swingline Loans by way of a
Revolving Loan advance, in which case the Borrower shall be
deemed to have requested a Revolving Loan advance comprised
solely of Base Rate Loans in the amount of such Swingline
Loans; provided, however, that any such demand shall be deemed
to have been given one Business Day prior to the Maturity Date
and on the date of the occurrence of any Event of Default
described in Section 9.1 and
32
50
upon acceleration of the indebtedness hereunder and the
exercise of remedies in accordance with the provisions of
Section 9.2. Each Lender hereby irrevocably agrees to make its
pro rata share of each such Revolving Loan in the amount, in
the manner and on the date specified in the preceding sentence
notwithstanding (I) the amount of such borrowing may not
comply with the minimum amount for advances of Revolving Loans
otherwise required hereunder, (II) whether any conditions
specified in Section 5.2 are then satisfied, (III) whether a
Default or an Event of Default then exists, (IV) failure of
any such request or deemed request for Revolving Loan to be
made by the time otherwise required hereunder, (V) whether the
date of such borrowing is a date on which Revolving Loans are
otherwise permitted to be made hereunder or (VI) any
termination of the Commitments relating thereto immediately
prior to or contemporaneously with such borrowing. In the
event that any Revolving Loan cannot for any reason be made on
the date otherwise required above (including, without
limitation, as a result of the commencement of a proceeding
under the Bankruptcy Code with respect to the Borrower or any
other Credit Party), then each Lender hereby agrees that it
shall forthwith purchase (as of the date such borrowing would
otherwise have occurred, but adjusted for any payments
received from the Borrower on or after such date and prior to
such purchase) from the Swingline Lender such participations
in the outstanding Swingline Loans as shall be necessary to
cause each such Lender to share in such Swingline Loans
ratably based upon its Revolving Commitment Percentage of the
Revolving Committed Amount (determined before giving effect to
any termination of the Commitments pursuant to Section 3.4),
provided that (A) all interest payable on the Swingline Loans
shall be for the account of the Swingline Lender until the
date as of which the respective participation is purchased and
(B) at the time any purchase of participations pursuant to
this sentence is actually made, the purchasing Lender shall be
required to pay to the Swingline Lender, to the extent not
paid to the Swingline Lender by the Borrower in accordance
with the terms of subsection (c) below, interest on the
principal amount of participation purchased for each day from
and including the day upon which such borrowing would
otherwise have occurred to but excluding the date of payment
for such participation, at the rate equal to the Federal Funds
Rate.
(c) Interest on Swingline Loans. Subject to the provisions of Section
3.1, each Swingline Loan shall bear interest at per annum rate (computed on the
basis of the actual number of days elapsed over a year of 360 days) equal to the
Quoted Rate unless the Borrower and the Swingline Lender cannot agree on the
applicable Quoted Rate in which case such Swingline Loan shall bear interest at
a per annum rate equal to the Adjusted Base Rate. Interest on Swingline Loans
shall be payable in arrears on the dates agreed upon by the Borrower and the
Swingline Lender (or at such other times as may be specified herein).
(d) Swingline Note. The Swingline Loans shall be evidenced by a duly
executed promissory note of the Borrower to the Swingline Lender in
substantially the form of Exhibit 2.4(d).
33
51
SECTION 3
OTHER PROVISIONS RELATING TO CREDIT FACILITIES
3.1 DEFAULT RATE.
Upon the occurrence, and during the continuance, of an Event of
Default, the principal of and, to the extent permitted by law, interest on the
Loans and any other amounts owing hereunder or under the other Credit Documents
shall bear interest, payable on demand, at a per annum rate 2% greater than the
rate which would otherwise be applicable (or if no rate is applicable, whether
in respect of interest, fees or other amounts, then the Adjusted Base Rate plus
2%).
3.2 EXTENSION AND CONVERSION.
The Borrower shall have the option, on any Business Day, to extend
existing Loans into a subsequent permissible Interest Period or to convert Loans
into Loans of another interest rate type; provided, however, that (i) except as
provided in Section 3.8, Eurocurrency Loans may be converted into Base Rate
Loans or extended as Eurocurrency Loans for new Interest Periods only on the
last day of the Interest Period applicable thereto, (ii) without the consent of
the Required Lenders, Eurocurrency Loans may be extended, and Base Rate Loans
may be converted into Eurocurrency Loans, only if the conditions precedent set
forth in Section 5.2 are satisfied on the date of extension or conversion, (iii)
Loans extended as, or converted into, Eurocurrency Loans shall be subject to the
terms of the definition of "Interest Period" set forth in Section 1.1 and shall
be in such minimum amounts as provided in, with respect to Revolving Loans,
Section 2.1(b)(ii), or with respect to Foreign Currency Loans, Section
2.3(b)(ii), (iv) no more than eight (8) Eurocurrency Loans shall be outstanding
hereunder at any time (it being understood that, for purposes hereof,
Eurocurrency Loans with different Interest Periods shall be considered as
separate Eurocurrency Loans, even if they begin on the same date, although
borrowings, extensions and conversions may, in accordance with the provisions
hereof, be combined at the end of existing Interest Periods to constitute a new
Eurocurrency Loan with a single Interest Period) and (v) any request for
extension or conversion of a Eurocurrency Loan which shall fail to specify an
Interest Period shall be deemed to be a request for an Interest Period of one
month. Each such extension or conversion shall be effected by the Borrower by
giving a Notice of Extension/Conversion (or telephonic notice promptly confirmed
in writing) to the office of the Agent specified in specified in Schedule
2.1(a), or at such other office as the Agent may designate in writing, prior to
11:00 A.M. (Charlotte, North Carolina time) on the third Business Day prior to
the date of the proposed extension or conversion, specifying the date of the
proposed extension or conversion, the Loans to be so extended or converted, the
types of Loans into which such Loans are to be converted and, if appropriate,
the applicable Interest Periods with respect thereto. Each request for extension
or conversion shall be irrevocable and shall constitute a representation and
warranty by the Borrower of the matters specified in subsections (b), (c), (d),
(e) and (f) of Section 5.2. In the event the Borrower fails to request extension
or conversion of any Eurocurrency Loan in accordance with this Section, or any
such conversion or extension is not permitted or required by this Section, then
(i) in the case of any Eurocurrency Loan which is not a Foreign Currency Loan,
such Eurocurrency Loan shall be automatically converted into a Base Rate Loan at
the end of the Interest Period applicable
34
52
thereto and (ii) in the case of any Foreign Currency Loan, such Eurocurrency
Loan shall be automatically continued as a Eurocurrency Loan in the same
Available Foreign Currency for an Interest Period of one month. The Agent shall
give each Lender notice as promptly as practicable of any such proposed
extension or conversion affecting any Loan.
3.3 PREPAYMENTS.
(a) Voluntary Prepayments. The Borrower shall have the right
to prepay Loans in whole or in part from time to time; provided, that
(i) Eurocurrency Loans may not be prepaid other than at the end of the
Interest Period applicable thereto and only then upon notice by the
Borrower to the Agent (which may be given by telephone) by no later
than 11:00 a.m. (Charlotte, North Carolina time) at least three
Business Days' prior to the day of the requested prepayment, (ii) Base
Rate Loans may be prepaid by the Borrower giving notice to the Agent
(which may be given by telephone) no later than 11:00 a.m. (Charlotte,
North Carolina time) on the date of the requested prepayment and (iii)
each partial prepayment of Loans shall be in a minimum principal amount
of $2,500,000 and integral multiples of $500,000. Subject to the
foregoing terms, amounts prepaid under this Section 3.3(a) shall be
applied as the Borrower may elect; provided that if the Borrower fails
to specify a voluntary prepayment then such prepayment shall be applied
to Revolving Loans, in each case first to Base Rate Loans and then to
Eurocurrency Loans in direct order of Interest Period maturities. All
prepayments under this Section 3.3(a) shall be subject to Section 3.12,
but otherwise without premium or penalty.
(b) Mandatory Prepayments.
(i) Revolving Committed Amount. If at any time (A)
the Dollar Amount (as determined as of the most recent
Determination Date) of the Revolving Obligations then
outstanding shall exceed the Revolving Committed Amount, (B)
the aggregate amount of LOC Obligations outstanding shall
exceed the LOC Committed Amount, (C) the Dollar Amount
(determined as of the most recent Determination Date) of
Foreign Currency Loans shall exceed the Foreign Currency
Committed Amount, or (D) the amount of Swingline Loans
outstanding shall exceed the Swingline Committed Amount, the
Borrower shall immediately make payment on the Loans and/or to
a cash collateral account in respect of the LOC Obligations,
in an amount sufficient to eliminate the deficiency.
(ii) Application of Mandatory Prepayments. All
amounts required to be paid pursuant to Section 3.3(b)(i)
shall be applied first to Loans in the currency in which such
payment is received, and then to a cash collateral account to
secure LOC Obligations. Within the parameters of the
applications set forth above, prepayments shall be applied
first to Base Rate Loans and then to Eurocurrency Loans in
direct order of Interest Period maturities. All prepayments
under this Section 3.3(b) shall be subject to Section 3.12.
35
53
3.4 TERMINATION AND REDUCTION OF REVOLVING COMMITTED AMOUNT.
(a) Revolving Commitment. The Borrower may from time to time
permanently reduce or terminate the Revolving Committed Amount in whole
or in part (in minimum aggregate amounts of $5,000,000 or in integral
multiples of $1,000,000 in excess thereof (or, if less, the full
remaining amount of the then applicable Revolving Committed Amount))
upon five Business Days' prior written notice to the Agent; provided,
that, no such termination or reduction shall be made which would cause
the Dollar Amount (as of the most recent Determination Date) of the
Revolving Obligations outstanding to exceed the Revolving Committed
Amount, unless, concurrently with such termination or reduction, the
Loans are repaid to the extent necessary to eliminate such excess. The
Agent shall promptly notify each affected Lender of receipt by the
Agent of any notice from the Borrower pursuant to this Section 3.4(a).
(b) Foreign Currency Commitment. The Borrower may from time to
time permanently reduce or terminate the Foreign Currency Committed
Amount in whole or in part (in minimum aggregate amounts of $5,000,000
or in integral multiples of $1,000,000 in excess thereof (or, if less,
the full remaining amount of the then applicable Foreign Currency
Committed Amount)) upon five Business Days' prior written notice to the
Agent; provided, that, (i) no such termination or reduction shall be
made which would cause the Dollar Amount (as of the most recent
Determination Date) of the Foreign Currency Loans outstanding to exceed
the Foreign Currency Committed Amount and (ii) no such termination or
reduction shall be made which would cause the Dollar Amount (as of the
most recent Determination Date) of the Revolving Obligations
outstanding to exceed the Revolving Committed Amount, unless,
concurrently with such termination or reduction, the Loans are repaid
to the extent necessary to eliminate such excess. The Agent shall
promptly notify each affected Lender of receipt by the Agent of any
notice from the Borrower pursuant to this Section 3.4(b).
3.5 FEES.
(a) Unused Fee. In consideration of the Revolving Commitments
of the Lenders hereunder, the Borrower agrees to pay to the Agent for
the account of each Lender a fee (the "Unused Fee") equal to the
Applicable Percentage per annum for Unused Fees then in effect on the
Unused Revolving Committed Amount for each day during the applicable
Unused Fee Calculation Period (hereinafter defined). The Unused Fee
shall commence to accrue on the Closing Date and shall be due and
payable in arrears on the last business day of each March, June,
September and December (and any date that the Revolving Committed
Amount or Foreign Currency Committed Amount is reduced as provided in
Section 3.4 and the Maturity Date) for the immediately preceding
quarter (or portion thereof) (each such quarter or portion thereof for
which the Unused Fee is payable hereunder being herein referred to as
an "Unused Fee Calculation Period"), beginning with the first of such
dates to occur after the Closing Date. For purposes of computation of
the Unused Fee, the Swingline Loans shall not be counted toward or
considered usage under the Revolving Loan Facility.
36
54
(b) Letter of Credit Fees.
(i) Letter of Credit Issuance Fee. In consideration
of the issuance of Letters of Credit hereunder, the Borrower
promises to pay to the Agent for the account of each Lender a
fee (the "Letter of Credit Fee") on such Lender's Revolving
Commitment Percentage of the average daily maximum amount
available to be drawn under each such Letter of Credit
computed at a per annum rate for each day from the date of
issuance to the date of expiration equal to the Applicable
Percentage. The Letter of Credit Fee will be payable quarterly
in arrears on the last Business Day of each March, June,
September and December for the immediately preceding quarter
(or a portion thereof).
(ii) Issuing Lender Fees. In addition to the Letter
of Credit Fee payable pursuant to clause (i) above, the
Borrower promises to pay to the Issuing Lender for its own
account without sharing by the other Lenders (A) a letter of
credit fronting fee of one-eighth percent (1/8%) per annum on
the average daily maximum amount available to be drawn under
outstanding Letters of Credit payable quarterly in arrears
with the Letter of Credit Fee, and (B) customary charges from
time to time of the Issuing Lender with respect to the
issuance, amendment, transfer, administration, cancellation
and conversion of, and drawings under, such Letters of Credit
(collectively, the "Issuing Lender Fees").
(c) Administrative Fees. The Borrower agrees to pay to the
Agent, for its own account and NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC,
as applicable, the fees referred to in the Agent's Fee Letter
(collectively, the "Agent's Fees").
3.6 CAPITAL ADEQUACY.
If any Lender has determined, after the date hereof, that the adoption
or the becoming effective of, or any change in, or any change by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof in the interpretation or administration
of, any applicable law, rule or regulation regarding capital adequacy, or
compliance by such Lender with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable agency, has or would have the effect of reducing the rate of
return on such Lender's capital or assets as a consequence of its commitments or
obligations hereunder to a level below that which such Lender could have
achieved but for such adoption, effectiveness, change or compliance (taking into
consideration such Lender's policies with respect to capital adequacy), then,
upon notice from such Lender to the Borrower, the Borrower shall be obligated to
pay to such Lender such additional amount or amounts as will compensate such
Lender for such reduction; provided, however, that no such amounts shall be
payable with respect to a reduction in rate of return incurred more than one (1)
year before such Lender demands compensation under this Section 3.6.
3.7 LIMITATION ON EUROCURRENCY LOANS.
If on or prior to the first day of any Interest Period for any
Eurocurrency Loan:
37
55
(a) the Agent reasonably determines (which determination shall
be conclusive) that by reason of circumstances affecting the relevant
market, adequate and reasonable means do not exist for ascertaining the
Eurocurrency Rate for such Interest Period; or
(b) the Required Lenders reasonably determine (which
determination shall be conclusive) and notify the Agent that the
Eurocurrency Rate will not adequately and fairly reflect the cost to
the Lenders of funding Eurocurrency Loans for such Interest Period;
then the Agent shall give the Borrower prompt notice thereof, and so long as
such condition remains in effect, the Lenders shall be under no obligation to
make additional Eurocurrency Loans, renew Eurocurrency Loans, or to convert Base
Rate Loans into Eurocurrency Loans and the Borrower shall, on the last day(s) of
the then current Interest Period(s) for the outstanding Eurocurrency Loans,
either prepay such Eurocurrency Loans or convert such Eurocurrency Loans into
Base Rate Loans in accordance with the terms of this Credit Agreement.
3.8 ILLEGALITY.
Notwithstanding any other provision herein, if the adoption of
or any change in any Requirement of Law or in the interpretation or application
thereof occurring after the Closing Date shall make it unlawful for any Lender
to make or maintain Eurocurrency Loans or Foreign Currency Loans as contemplated
by this Credit Agreement, (a) such Lender shall promptly give written notice of
such circumstances to the Borrower and the Agent (which notice shall be
withdrawn whenever such circumstances no longer exist), (b) the commitment of
such Lender hereunder to make Eurocurrency Loans or Foreign Currency Loans,
continue Eurocurrency Loans or Foreign Currency Loans as such and convert a Base
Rate Loan to Eurocurrency Loans or Foreign Currency Loans, shall forthwith be
canceled and, until such time as it shall no longer be unlawful for such Lender
to make or maintain Eurocurrency Loans or Foreign Currency Loans, such Lender
shall then have a commitment only to make a Base Rate Loan when a Eurocurrency
Loan or Foreign Currency Loan is requested and (c) such Lender's Loans then
outstanding as Eurocurrency Loans or Foreign Currency Loans, if any, shall be
converted automatically to Base Rate Loans on the respective last days of the
then current Interest Periods with respect to such Loans or within such earlier
period as required by law. If any such conversion of a Eurocurrency Loan or
Foreign Currency Loan occurs on a day which is not the last day of the then
current Interest Period with respect thereto, the Borrower shall pay to such
Lender such amounts, if any, as may be required pursuant to Section 3.13.
3.9 REQUIREMENTS OF LAW.
If, after the date hereof, the adoption of any applicable law, rule, or
regulation, or any change in any applicable law, rule, or regulation, or any
change in the interpretation or administration thereof by any Governmental
Authority, central bank, or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its Applicable Lending
Office) with any request or directive (whether or not having the force of law)
of any such Governmental Authority, central bank, or comparable agency:
38
56
(i) shall subject such Lender (or its Applicable Lending
Office) to any tax, duty, or other charge with respect to any
Eurocurrency Loans, its Notes, or its obligation to make Eurocurrency
Loans, or change the basis of taxation of any amounts payable to such
Lender (or its Applicable Lending Office) under this Credit Agreement
or its Notes in respect of any Eurocurrency Loans (other than taxes
imposed on the overall net income of such Lender by the jurisdiction in
which such Lender has its principal office or such Applicable Lending
Office);
(ii) shall impose, modify, or deem applicable any
reserve, special deposit, assessment, or similar requirement (other
than the Eurocurrency Reserve Requirement utilized in the determination
of the Adjusted Eurocurrency Rate) relating to any extensions of credit
or other assets of, or any deposits with or other liabilities or
commitments of, such Lender (or its Applicable Lending Office),
including the Commitment of such Lender hereunder; or
(iii) shall impose on such Lender (or its Applicable
Lending Office) or the London interbank market any other condition
affecting this Credit Agreement or its Notes or any of such extensions
of credit or liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such Lender
(or its Applicable Lending Office) of making, converting into, continuing, or
maintaining any Eurocurrency Loans or to reduce any sum received or receivable
by such Lender (or its Applicable Lending Office) under this Credit Agreement or
its Notes with respect to any Eurocurrency Loans, then the Borrower shall pay to
such Lender on demand such amount or amounts as will compensate such Lender for
such increased cost or reduction; provided, however, that no such amounts shall
be payable with respect to an increased cost or reduction in the rate of return
incurred more than one (1) year before such Lender demands compensation under
this Section 3.9. If any Lender requests compensation by the Borrower under this
Section 3.9, the Borrower may, by notice to such Lender (with a copy to the
Agent), suspend the obligation of such Lender to make or continue Eurocurrency
Loans, or to convert Base Rate Loans into Eurocurrency Loans, until the event or
condition giving rise to such request ceases to be in effect (in which case the
provisions of Section 3.10 shall be applicable); provided that such suspension
shall not affect the right of such Lender to receive the compensation so
requested. Each Lender shall promptly notify the Borrower and the Agent of any
event of which it has knowledge, occurring after the date hereof, which will
entitle such Lender to compensation pursuant to this Section 3.9 and will
designate a different Applicable Lending Office if such designation will avoid
the need for, or reduce the amount of, such compensation and will not, in the
judgment of such Lender, be otherwise disadvantageous to it. Any Lender claiming
compensation under this Section 3.9 shall furnish to the Borrower and the Agent
a statement setting forth the additional amount or amounts to be paid to it
hereunder. In determining such amount, such Lender may use any reasonable
averaging and attribution methods.
3.10 TREATMENT OF AFFECTED LOANS.
If the obligation of any Lender to make any Eurocurrency Loan or to
continue, or to convert Base Rate Loans into, Eurocurrency Loans shall be
suspended pursuant to Section 3.8 or 3.9 hereof, such Lender's Eurocurrency
Loans shall be automatically converted into Base Rate Loans on the
39
57
last day(s) of the then current Interest Period(s) for such Eurocurrency Loans
(or, in the case of a conversion required by Section 3.8 hereof, on such earlier
date as such Lender may specify to the Borrower with a copy to the Agent) and,
unless and until such Lender gives notice as provided below that the
circumstances specified in Section 3.8 or 3.9 hereof that gave rise to such
conversion no longer exist:
(a) to the extent that such Lender's Eurocurrency Loans have
been so converted, all payments and prepayments of principal that would
otherwise be applied to such Lender's Eurocurrency Loans shall be
applied instead to its Base Rate Loans; and
(b) all Loans that would otherwise be made or continued by
such Lender as Eurocurrency Loans shall be made or continued instead as
Base Rate Loans, and all Base Rate Loans of such Lender that would
otherwise be converted into Eurocurrency Loans shall remain as Base
Rate Loans.
If such Lender gives notice to the Borrower (with a copy to the Agent) that the
circumstances specified in Section 3.8 or 3.9 hereof that gave rise to the
conversion of such Lender's Eurocurrency Loans pursuant to this Section 3.10 no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Eurocurrency Loans made by other Lenders are
outstanding, such Lender's Base Rate Loans shall be automatically converted, on
the first day(s) of the next succeeding Interest Period(s) for such outstanding
Eurocurrency Loans, to the extent necessary so that, after giving effect
thereto, all Loans held by the Lenders holding Eurocurrency Loans and by such
Lender are held pro rata (as to principal amounts, interest rate basis, and
Interest Periods) in accordance with their respective Commitments.
3.11 TAXES.
(a) Any and all payments by any Credit Party to or for the
account of any Lender or the Agent hereunder or under any other Credit
Document shall be made free and clear of and without deduction for any
and all present or future taxes, duties, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Lender and the Agent, taxes imposed on
its income, and franchise taxes imposed on it, by the jurisdiction
under the laws of which such Lender (or its Applicable Lending Office)
or the Agent (as the case may be) is organized or any political
subdivision thereof (all such non-excluded taxes, duties, levies,
imposts, deductions, charges, withholdings, and liabilities being
hereinafter referred to as "Taxes"). If any Credit Party shall be
required by law to deduct any Taxes from or in respect of any sum
payable under this Credit Agreement or any other Credit Document to any
Lender or the Agent, (i) the sum payable shall be increased as
necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section
3.11) such Lender or the Agent receives an amount equal to the sum it
would have received had no such deductions been made, (ii) such Credit
Party shall make such deductions, (iii) such Credit Party shall pay the
full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law, and (iv) such Credit Party
shall furnish to the Agent, at its address referred to in Section 11.1,
the original or a certified copy of a receipt evidencing payment
thereof.
40
58
(b) In addition, the Borrower agrees to pay any and all
present or future stamp or documentary taxes and any other excise or
property taxes or charges or similar levies which arise from any
payment made under this Credit Agreement or any other Credit Document
or from the execution or delivery of, or otherwise with respect to,
this Credit Agreement or any other Credit Document (hereinafter
referred to as "Other Taxes").
(c) The Borrower agrees to indemnify each Lender and the Agent
for the full amount of Taxes and Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this Section 3.11) paid by such
Lender or the Agent (as the case may be) and any liability (including
penalties, interest, and expenses) arising therefrom or with respect
thereto.
(d) Each Lender that is not a United States person under
Section 7701(a)(30) of the Code, on or prior to the date of its
execution and delivery of this Credit Agreement in the case of each
Lender listed on the signature pages hereof and on or prior to the date
on which it becomes a Lender in the case of each other Lender, and from
time to time thereafter if requested in writing by the Borrower or the
Agent (but only so long as such Lender remains lawfully able to do so),
shall provide the Borrower and the Agent with (i) Internal Revenue
Service Form 1001 or 4224, as appropriate, or any successor form
prescribed by the Internal Revenue Service, certifying that such Lender
is entitled to benefits under an income tax treaty to which the United
States is a party which reduces the rate of withholding tax on payments
of interest or certifying that the income receivable pursuant to this
Credit Agreement is effectively connected with the conduct of a trade
or business in the United States, (ii) Internal Revenue Service Form
W-8 or W-9, as appropriate, or any successor form prescribed by the
Internal Revenue Service, and (iii) any other form or certificate
required by any taxing authority (including any certificate required by
Sections 871(h) and 881(c) of the Internal Revenue Code), certifying
that such Lender is entitled to an exemption from or a reduced rate of
tax on payments pursuant to this Credit Agreement or any of the other
Credit Documents.
(e) For any period with respect to which a Lender has failed
to provide the Borrower and the Agent with the appropriate form
pursuant to Section 3.11(d) (unless such failure is due to a change in
treaty, law, or regulation occurring subsequent to the date on which a
form originally was required to be provided), such Lender shall not be
entitled to indemnification under Section 3.11(a) or 3.11(b) with
respect to Taxes imposed by the United States; provided, however, that
should a Lender, which is otherwise exempt from or subject to a reduced
rate of withholding tax, become subject to Taxes because of its failure
to deliver a form required hereunder, the Borrower shall take such
steps (at such Lender's expense) as such Lender shall reasonably
request to assist such Lender to recover such Taxes.
(f) If any Credit Party is required to pay additional amounts
to or for the account of any Lender pursuant to this Section 3.11, then
such Lender will agree to use reasonable efforts to change the
jurisdiction of its Applicable Lending Office so as to
41
59
eliminate or reduce any such additional payment which may thereafter
accrue if such change, in the judgment of such Lender, is not otherwise
disadvantageous to such Lender.
(g) Within thirty (30) days after the date of any payment of
Taxes, the applicable Credit Party shall furnish to the Agent the
original or a certified copy of a receipt evidencing such payment.
(h) Without prejudice to the survival of any other agreement
of the Credit Parties hereunder, the agreements and obligations of the
Credit Parties contained in this Section 3.11 shall survive the
repayment of the Loans, LOC Obligations and other obligations under the
Credit Documents and the termination of the Commitments hereunder.
3.12 COMPENSATION.
Upon the request of any Lender, the Borrower shall pay to such Lender
such amount or amounts as shall be sufficient (in the reasonable opinion of such
Lender) to compensate it for any loss, cost, or expense (including loss of
anticipated profits) incurred by it as a result of:
(a) any payment, prepayment, or conversion of a Eurocurrency
Loan for any reason (including, without limitation, the acceleration of
the Loans pursuant to Section 9.2) on a date other than the last day of
the Interest Period for such Loan; or
(b) any failure by the Borrower for any reason (including,
without limitation, the failure of any condition precedent specified in
Section 5 to be satisfied) to borrow, convert, continue, or prepay a
Eurocurrency Loan on the date for such borrowing, conversion,
continuation, or prepayment specified in the relevant notice of
borrowing, prepayment, continuation, or conversion under this Credit
Agreement.
With respect to Eurocurrency Loans, such indemnification may include an amount
equal to the excess, if any, of (a) the amount of interest which would have
accrued on the amount so prepaid, or not so borrowed, converted or continued,
for the period from the date of such prepayment or of such failure to borrow,
convert or continue to the last day of the applicable Interest Period (or, in
the case of a failure to borrow, convert or continue, the Interest Period that
would have commenced on the date of such failure) in each case at the applicable
rate of interest for such Eurocurrency Loans provided for herein (excluding,
however, the Applicable Percentage included therein, if any) over (b) the amount
of interest (as reasonably determined by such Lender) which would have accrued
to such Lender on such amount by placing such amount on deposit for a comparable
period with leading banks in the interbank Eurocurrency market. The covenants of
the Borrower set forth in this Section 3.12 shall survive the repayment of the
Loans, LOC Obligations and other obligations under the Credit Documents and the
termination of the Commitments hereunder.
42
60
3.13 PRO RATA TREATMENT.
Except to the extent otherwise provided herein:
(a) Loans. Each Loan, each payment or (subject to the terms of
Section 3.3) prepayment of principal of any Loan or reimbursement
obligations arising from drawings under Letters of Credit, each payment
of interest on the Loans or reimbursement obligations arising from
drawings under Letters of Credit, each payment of Unused Fees, each
payment of the Letter of Credit Fee, each reduction in Commitments and
each conversion or extension of any Loan, shall be allocated pro rata
among the Lenders in accordance with the respective principal amounts
of their outstanding Revolving Loans or Foreign Currency Loans and
Participation Interests.
(b) Advances. No Lender shall be responsible for the failure
or delay by any other Lender in its obligation to make its ratable
share of a borrowing hereunder; provided, however, that the failure of
any Lender to fulfill its obligations hereunder shall not relieve any
other Lender of its obligations hereunder. Unless the Agent shall have
been notified in writing by any Lender prior to the date of any
requested borrowing that such Lender does not intend to make available
to the Agent its ratable share of such borrowing to be made on such
date, the Agent may assume that such Lender has made such amount
available to the Agent on the date of such borrowing, and the Agent in
reliance upon such assumption, may (in its sole discretion but without
any obligation to do so) make available to the Borrower a corresponding
amount. If such corresponding amount is not in fact made available to
the Agent, the Agent shall be able to recover such corresponding amount
from such Lender. If such Lender does not pay such corresponding amount
forthwith upon the Agent's demand therefor, the Agent will promptly
notify the Borrower, and the Borrower shall immediately pay such
corresponding amount to the Agent. The Agent shall also be entitled to
recover from the Lender or the Borrower, as the case may be, interest
on such corresponding amount in respect of each day from the date such
corresponding amount was made available by the Agent to the Borrower to
the date such corresponding amount is recovered by the Agent at a per
annum rate equal to (i) from the Borrower at the applicable rate for
the applicable borrowing pursuant to the Notice of Borrowing and (ii)
from a Lender at the Federal Funds Rate.
3.14 SHARING OF PAYMENTS.
The Lenders agree among themselves that, in the event that any Lender
shall obtain payment in respect of any Loan, LOC Obligations or any other
obligation owing to such Lender under this Credit Agreement through the exercise
of a right of setoff, banker's lien or counterclaim, or pursuant to a secured
claim under Section 506 of Title 11 of the United States Code or other security
or interest arising from, or in lieu of, such secured claim, received by such
Lender under any applicable bankruptcy, insolvency or other similar law or
otherwise, or by any other means, in excess of its pro rata share of such
payment as provided for in this Credit Agreement, such Lender shall promptly
purchase from the other Lenders a Participation Interest in such Loans, LOC
Obligations and other obligations in such amounts, and make such other
adjustments from time to time, as shall be equitable to the end that all Lenders
share such payment in accordance with their
43
61
respective ratable shares as provided for in this Credit Agreement. The Lenders
further agree among themselves that if payment to a Lender obtained by such
Lender through the exercise of a right of setoff, banker's lien, counterclaim or
other event as aforesaid shall be rescinded or must otherwise be restored, each
Lender which shall have shared the benefit of such payment shall, by repurchase
of a Participation Interest theretofore sold, return its share of that benefit
(together with its share of any accrued interest payable with respect thereto)
to each Lender whose payment shall have been rescinded or otherwise restored.
The Borrower agrees that any Lender so purchasing such a Participation Interest
may, to the fullest extent permitted by law, exercise all rights of payment,
including setoff, banker's lien or counterclaim, with respect to such
Participation Interest as fully as if such Lender were a holder of such Loan,
LOC Obligations or other obligation in the amount of such Participation
Interest. Except as otherwise expressly provided in this Credit Agreement, if
any Lender or the Agent shall fail to remit to the Agent or any other Lender an
amount payable by such Lender or the Agent to the Agent or such other Lender
pursuant to this Credit Agreement on the date when such amount is due, such
payments shall be made together with interest thereon for each date from the
date such amount is due until the date such amount is paid to the Agent or such
other Lender at a rate per annum equal to the Federal Funds Rate. If under any
applicable bankruptcy, insolvency or other similar law, any Lender receives a
secured claim in lieu of a setoff to which this Section 3.14 applies, such
Lender shall, to the extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights of the Lenders under this
Section 3.14 to share in the benefits of any recovery on such secured claim.
3.15 PAYMENTS, COMPUTATIONS, ETC.
(a) Except as otherwise specifically provided herein, all
payments hereunder shall be made to the Agent in Dollars in immediately
available funds, without setoff, deduction, counterclaim or withholding
of any kind, at the Agent's office specified in Schedule 2.1(a) not
later than 2:00 P.M. (Charlotte, North Carolina time) on the date when
due. Payments received after such time shall be deemed to have been
received on the next succeeding Business Day. The Agent may (but shall
not be obligated to) debit the amount of any such payment which is not
made by such time to any ordinary deposit account of the Borrower or
any other Credit Party maintained with the Agent (with notice to the
Borrower or such other Credit Party). The Borrower shall, at the time
it makes any payment under this Credit Agreement, specify to the Agent
the Loans, LOC Obligations, Fees, interest or other amounts payable by
the Borrower hereunder to which such payment is to be applied (and in
the event that it fails so to specify, or if such application would be
inconsistent with the terms hereof, the Agent shall distribute such
payment to the Lenders in such manner as the Agent may determine to be
appropriate in respect of obligations owing by the Borrower hereunder,
subject to the terms of Section 3.13(a)). The Agent will distribute
such payments to such Lenders, if any such payment is received prior to
12:00 Noon (Charlotte, North Carolina time) on a Business Day in like
funds as received prior to the end of such Business Day and otherwise
the Agent will distribute such payment to such Lenders on the next
succeeding Business Day. Whenever any payment hereunder shall be stated
to be due on a day which is not a Business Day, the due date thereof
shall be extended to the next succeeding Business Day (subject to
accrual of interest and Fees for the period of such extension), except
that in the case of Eurocurrency Loans, if the extension would cause
the payment to be made in the next following calendar month, then such
payment shall instead
44
62
be made on the next preceding Business Day. Except as expressly
provided otherwise herein, all computations of interest and fees shall
be made on the basis of actual number of days elapsed over a year of
360 days. Interest shall accrue from and include the date of borrowing,
but exclude the date of payment.
(b) Allocation of Payments After Event of Default.
Notwithstanding any other provisions of this Credit Agreement to the
contrary, after the occurrence and during the continuance of an Event
of Default, all amounts collected or received by the Agent or any
Lender on account of the Credit Party Obligations or any other amounts
outstanding under any of the Credit Documents or in respect of the
Collateral shall be paid over or delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket costs
and expenses (including without limitation reasonable attorneys' fees)
of the Agent in connection with enforcing the rights of the Lenders
under the Credit Documents and any protective advances made by the
Agent with respect to the Collateral under or pursuant to the terms of
the Collateral Documents;
SECOND, to payment of any fees owed to the Agent;
THIRD, to the payment of all reasonable out-of-pocket costs
and expenses (including without limitation, reasonable attorneys' fees)
of each of the Lenders in connection with enforcing its rights under
the Credit Documents or otherwise with respect to the Credit Party
Obligations owing to such Lender;
FOURTH, to the payment of all of the Credit Party Obligations
consisting of accrued fees and interest;
FIFTH, to the payment of the outstanding principal amount of
the Credit Party Obligations (including the payment or cash
collateralization of the outstanding LOC Obligations);
SIXTH, to all other Credit Party Obligations and other
obligations which shall have become due and payable under the Credit
Documents or otherwise and not repaid pursuant to clauses "FIRST"
through "FIFTH" above; and
SEVENTH, to the payment of the surplus, if any, to whoever may
be lawfully entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be applied in
the numerical order provided until exhausted prior to application to
the next succeeding category; (ii) each of the Lenders shall receive an
amount equal to its pro rata share (based on the proportion that the
then outstanding Loans and LOC Obligations held by such Lender bears to
the aggregate then outstanding Loans and LOC Obligations) of amounts
available to be applied pursuant to clauses "THIRD", "FOURTH", "FIFTH"
and "SIXTH" above; and (iii) to the extent that any amounts available
for distribution pursuant to clause "FIFTH"
45
63
above are attributable to the issued but undrawn amount of outstanding
Letters of Credit, such amounts shall be held by the Agent in a cash
collateral account and applied (A) first, to reimburse the Issuing
Lender from time to time for any drawings under such Letters of Credit
and (B) then, following the expiration of all Letters of Credit, to all
other obligations of the types described in clauses "FIFTH" and "SIXTH"
above in the manner provided in this Section 3.15(b).
3.16 EVIDENCE OF DEBT.
(a) Each Lender shall maintain an account or accounts
evidencing each Loan made by such Lender to the Borrower from time to
time, including the amounts of principal and interest payable and paid
to such Lender from time to time under this Credit Agreement. Each
Lender will make reasonable efforts to maintain the accuracy of its
account or accounts and to promptly update its account or accounts from
time to time, as necessary.
(b) The Agent shall maintain the Register pursuant to Section
11.3(c), and a subaccount for each Lender, in which Register and
subaccounts (taken together) shall be recorded (i) the amount, type and
Interest Period of each such Loan hereunder, (ii) the amount of any
principal or interest due and payable or to become due and payable to
each Lender hereunder and (iii) the amount of any sum received by the
Agent hereunder from or for the account of any Credit Party and each
Lender's share thereof. The Agent will make reasonable efforts to
maintain the accuracy of the subaccounts referred to in the preceding
sentence and to promptly update such subaccounts from time to time, as
necessary.
(c) The entries made in the accounts, Register and subaccounts
maintained pursuant to subsection (b) of this Section 3.16 (and, if
consistent with the entries of the Agent, subsection (a)) shall be
prima facie evidence of the existence and amounts of the obligations of
the Credit Parties therein recorded; provided, however, that the
failure of any Lender or the Agent to maintain any such account, such
Register or such subaccount, as applicable, or any error therein, shall
not in any manner affect the obligation of the Credit Parties to repay
the Credit Party obligations owing to such Lender.
3.17 MITIGATION; MANDATORY ASSIGNMENT.
Each Lender shall use reasonable efforts to avoid or mitigate any
increased cost or suspension of the availability of an interest rate under
Section 3.9 or Section 3.11 to the greatest extent practicable (including
transferring the Loans to another lending office or affiliate of a Lender)
unless, in the opinion of such Lender, such efforts would be likely to have an
adverse effect upon such Lender. In the event a Lender makes a request to the
Borrower for additional payments in accordance with Section 3.9 or Section 3.11,
then, provided that no Default or Event of Default has occurred and is
continuing at such time, the Borrower may, at its own expense (such expense to
include any transfer fee payable to the Agent under Section 11.3(b) and any
expense pursuant to Section 3.12), and in its sole discretion, require such
Lender to transfer and assign in whole (but not in part), without recourse (in
accordance with and subject to the terms and conditions of Section 11.3(b)), all
of its interests, rights and obligations under this Credit
46
64
Agreement to an assignee which shall assume such assigned obligations (which
assignee may be another Lender, if a Lender accepts such assignment); provided
that (a) such assignment shall not conflict with any law, rule or regulation or
order of any court or other governmental authority and (b) the Borrower or such
assignee shall have paid to the assigning Lender in immediately available funds
the principal of and interest accrued to the date of such payment on the portion
of the Loans hereunder held by such assigning Lender and all other amounts owed
to such assigning Lender hereunder, including amounts owed pursuant to Section
3.9, Section 3.11 or Section 3.12.
3.18 EUROPEAN MONETARY UNION.
(a) If, as a result of the implementation of the European economic and
monetary union ("EMU"), (i) any currency available for borrowing under this
Credit Agreement (a "national currency") ceases to be lawful currency of the
state issuing the same and is replaced by a European single or common currency
(the "Euro") or (ii) any national currency and the Euro are at the same time
both recognized by the central bank or comparable Governmental Authority of the
state issuing such currency as lawful currency of such state, then any amount
payable hereunder by any party hereto in such national currency (including,
without limitation, any Loan to be made under this Credit Agreement) shall
instead be payable in the Euro and the amount so payable shall be determined by
redenominating or converting such amount into the Euro at the exchange rate
officially fixed by the European Central Bank for the purpose of implementing
the EMU, provided, that to the extent any EMU legislation provides that an
amount denominated either in the Euro or in the applicable national currency can
be paid either in Euros or in the applicable national currency, each party to
this Credit Agreement shall be entitled to pay or repay such amount in Euros or
in the applicable national currency. Prior to the occurrence of the event or
events described in clause (i) or (ii) of the preceding sentence, each amount
payable hereunder in any such national currency will, except as otherwise
provided herein, continue to be payable only in that national currency.
(b) The Borrower shall from time to time, at the request of the Agent,
pay to the Agent for the account of each Lender the amount of any cost or
increased cost incurred by, or of any reduction in any amount payable to or in
the effective return on its capital to, or of interest or other return foregone
by, such Lender or any holding company of such Lender as a result of the
introduction of, changeover to or operation of the Euro in any applicable state.
(c) In addition, this Credit Agreement (including, without limitation,
the definition of Interbank Offered Rate) will be amended to the extent
determined by the Agent (acting reasonably and in consultation with the
Borrower) to be necessary to reflect such implementation of the EMU and change
in currency and to put the Lenders and the Borrower in the same position, so far
as possible, that they would have been in if such implementation and change in
currency had not occurred. Except as provided in the foregoing provisions of
this Section, no such implementation or change in currency nor any economic
consequences resulting therefrom shall (i) give rise to any right to terminate
prematurely, contest, cancel, rescind, alter, modify or renegotiate the
provisions of this Credit Agreement or (ii) discharge, excuse or otherwise
affect the performance of any obligations of any Credit Party under this Credit
Agreement or any of the other Credit Documents.
47
65
SECTION 4
GUARANTY
4.1 THE GUARANTY.
Each of the Guarantors hereby jointly and severally guarantees to each
Lender, each Affiliate of a Lender that enters into a Hedging Agreement, and the
Agent as hereinafter provided, as primary obligor and not as surety, the prompt
payment of the Credit Party Obligations in full when due (whether at stated
maturity, as a mandatory prepayment, by acceleration, as a mandatory cash
collateralization or otherwise) strictly in accordance with the terms thereof.
The Guarantors hereby further agree that if any of the Credit Party Obligations
are not paid in full when due (whether at stated maturity, as a mandatory
prepayment, by acceleration, as a mandatory cash collateralization or
otherwise), the Guarantors will, jointly and severally, promptly pay the same,
without any demand or notice whatsoever, and that in the case of any extension
of time of payment or renewal of any of the Credit Party Obligations, the same
will be promptly paid in full when due (whether at extended maturity, as a
mandatory prepayment, by acceleration, as a mandatory cash collateralization or
otherwise) in accordance with the terms of such extension or renewal.
Notwithstanding any provision to the contrary contained herein or in
any other of the Credit Documents or Hedging Agreements, the obligations of each
Guarantor hereunder shall be limited to an aggregate amount equal to the largest
amount that would not render its obligations hereunder subject to avoidance
under Section 548 of the Bankruptcy Code or any comparable provisions of any
applicable state law.
4.2 OBLIGATIONS UNCONDITIONAL.
The obligations of the Guarantors under Section 4.1 are joint and
several, absolute and unconditional, irrespective of the value, genuineness,
validity, regularity or enforceability of any of the Credit Documents or Hedging
Agreements, or any other agreement or instrument referred to therein, or any
substitution, release, impairment or exchange of any other guarantee of or
security for any of the Credit Party Obligations, and, to the fullest extent
permitted by applicable law, irrespective of any other circumstance whatsoever
which might otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor, it being the intent of this Section 4.2 that the
obligations of the Guarantors hereunder shall be absolute and unconditional
under any and all circumstances. Each Guarantor agrees that such Guarantor shall
have no right of subrogation, indemnity, reimbursement or contribution against
the Borrower or any other Guarantor for amounts paid under this Section 4 until
such time as the Lenders (and any Affiliates of Lenders entering into Hedging
Agreements) have been paid in full, all Commitments under this Credit Agreement
have been terminated and no Person or Governmental Authority shall have any
right to request any return or reimbursement of funds from the Lenders in
connection with monies received under the Credit Documents or Hedging
Agreements. Without limiting the generality of the foregoing, it is agreed that,
to the fullest extent permitted by law, the occurrence of any one or more of the
following shall not alter or impair the liability of any Guarantor hereunder
which shall remain absolute and unconditional as described above:
48
66
(a) at any time or from time to time, without notice to any
Guarantor, the time for any performance of or compliance with any of
the Credit Party Obligations shall be extended, or such performance or
compliance shall be waived;
(b) any of the acts mentioned in any of the provisions of any
of the Credit Documents, any Hedging Agreement or any other agreement
or instrument referred to in the Credit Documents or Hedging Agreements
shall be done or omitted;
(c) the maturity of any of the Credit Party Obligations shall
be accelerated, or any of the Credit Party Obligations shall be
modified, supplemented or amended in any respect, or any right under
any of the Credit Documents, any Hedging Agreement or any other
agreement or instrument referred to in the Credit Documents or Hedging
Agreements shall be waived or any other guarantee of any of the Credit
Party Obligations or any security therefor shall be released, impaired
or exchanged in whole or in part or otherwise dealt with;
(d) any Lien granted to, or in favor of, the Agent or any
Lender or Lenders as security for any of the Credit Party Obligations
shall fail to attach or be perfected; or
(e) any of the Credit Party Obligations shall be determined to
be void or voidable (including, without limitation, for the benefit of
any creditor of any Guarantor) or shall be subordinated to the claims
of any Person (including, without limitation, any creditor of any
Guarantor).
With respect to its obligations hereunder, each Guarantor hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the Agent or any Lender exhaust any right,
power or remedy or proceed against any Person under any of the Credit Documents,
any Hedging Agreement or any other agreement or instrument referred to in the
Credit Documents or Hedging Agreements, or against any other Person under any
other guarantee of, or security for, any of the Credit Party Obligations.
4.3 REINSTATEMENT.
The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Credit Party Obligations is
rescinded or must be otherwise restored by any holder of any of the Credit Party
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Agent and each Lender on demand for all reasonable costs and expenses
(including, without limitation, reasonable fees and expenses of counsel)
incurred by the Agent or such Lender in connection with such rescission or
restoration, including any such reasonable costs and expenses incurred in
defending against any claim alleging that such payment constituted a preference,
fraudulent transfer or similar payment under any bankruptcy, insolvency or
similar law.
49
67
4.4 CERTAIN ADDITIONAL WAIVERS.
Each Guarantor agrees that such Guarantor shall have no right of
recourse to security for the Credit Party Obligations, except through the
exercise of rights of subrogation pursuant to Section 4.2 and through the
exercise of rights of contribution pursuant to Section 4.6.
4.5 REMEDIES.
The Guarantors agree that, to the fullest extent permitted by law, as
between the Guarantors, on the one hand, and the Agent and the Lenders, on the
other hand, the Credit Party Obligations may be declared to be forthwith due and
payable as provided in Section 9.2 (and shall be deemed to have become
automatically due and payable in the circumstances provided in said Section 9.2)
for purposes of Section 4.1 notwithstanding any stay, injunction or other
prohibition preventing such declaration (or preventing the Credit Party
Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or the Credit Party
Obligations being deemed to have become automatically due and payable), the
Credit Party Obligations (whether or not due and payable by any other Person)
shall forthwith become due and payable by the Guarantors for purposes of Section
4.1. The Guarantors acknowledge and agree that their obligations hereunder are
secured in accordance with the terms of the Security Agreements and the other
Collateral Documents and that the Lenders may exercise their remedies thereunder
in accordance with the terms thereof.
4.6 RIGHTS OF CONTRIBUTION.
The Guarantors hereby agree as among themselves that, if any Guarantor
shall make an Excess Payment (as defined below), such Guarantor shall have a
right of contribution from each other Guarantor in an amount equal to such other
Guarantor's Contribution Share (as defined below) of such Excess Payment. The
payment obligations of any Guarantor under this Section 4.6 shall be subordinate
and subject in right of payment to the prior payment in full to the Agent and
the Lenders of the Guaranteed Obligations, and none of the Guarantors shall
exercise any right or remedy under this Section 4.6 against any other Guarantor
until payment and satisfaction in full of all of such Guaranteed Obligations.
For purposes of this Section 4.6, (a) "Guaranteed Obligations" shall mean any
obligations arising under the other provisions of this Section 4; (b) "Excess
Payment" shall mean the amount paid by any Guarantor in excess of its Pro Rata
Share of any Guaranteed Obligations; (c) "Pro Rata Share" shall mean, for any
Guarantor in respect of any payment of Guaranteed Obligations, the ratio
(expressed as a percentage) as of the date of such payment of Guaranteed
Obligations of (i) the amount by which the aggregate present fair salable value
of all of its assets and properties exceeds the amount of all debts and
liabilities of such Guarantor (including contingent, subordinated, unmatured,
and unliquidated liabilities, but excluding the obligations of such Guarantor
hereunder) to (ii) the amount by which the aggregate present fair salable value
of all assets and other properties of all of the Credit Parties exceeds the
amount of all of the debts and liabilities (including contingent, subordinated,
unmatured, and unliquidated liabilities, but excluding the obligations of the
Credit Parties hereunder) of the Credit Parties; provided, however, that, for
purposes of calculating the Pro Rata Shares of the Guarantors in respect of any
payment of Guaranteed Obligations, any Guarantor that became a Guarantor
subsequent to the date of any such payment shall be deemed to have been a
Guarantor on the date
50
68
of such payment and the financial information for such Guarantor as of the date
such Guarantor became a Guarantor shall be utilized for such Guarantor in
connection with such payment; and (d) "Contribution Share" shall mean, for any
Guarantor in respect of any Excess Payment made by any other Guarantor, the
ratio (expressed as a percentage) as of the date of such Excess Payment of (i)
the amount by which the aggregate present fair salable value of all of its
assets and properties exceeds the amount of all debts and liabilities of such
Guarantor (including contingent, subordinated, unmatured, and unliquidated
liabilities, but excluding the obligations of such Guarantor hereunder) to (ii)
the amount by which the aggregate present fair salable value of all assets and
other properties of the Credit Parties other than the maker of such Excess
Payment exceeds the amount of all of the debts and liabilities (including
contingent, subordinated, unmatured, and unliquidated liabilities, but excluding
the obligations of the Credit Parties) of the Credit Parties other than the
maker of such Excess Payment; provided, however, that, for purposes of
calculating the Contribution Shares of the Guarantors in respect of any Excess
Payment, any Guarantor that became a Guarantor subsequent to the date of any
such Excess Payment shall be deemed to have been a Guarantor on the date of such
Excess Payment and the financial information for such Guarantor as of the date
such Guarantor became a Guarantor shall be utilized for such Guarantor in
connection with such Excess Payment. This Section 4.6 shall not be deemed to
affect any right of subrogation, indemnity, reimbursement or contribution that
any Guarantor may have under applicable law against the Borrower in respect of
any payment of Guaranteed Obligations.
4.7 GUARANTEE OF PAYMENT; CONTINUING GUARANTEE.
The guarantee in this Section 4 is a guaranty of payment and not of
collection, is a continuing guarantee, and shall apply to all Credit Party
Obligations whenever arising.
SECTION 5
CONDITIONS
5.1 CLOSING CONDITIONS.
The obligation of the Lenders to enter into this Credit Agreement and
to make the initial Loans or the Issuing Lender to issue the initial Letter of
Credit, whichever shall occur first, shall be subject to satisfaction of the
following conditions (in form and substance acceptable to the Lenders in their
reasonable discretion):
(a) Executed Credit Documents. Receipt by the Agent of duly
executed copies of: (i) this Credit Agreement, (ii) the Notes, (iii)
the Swingline Note, (iv) the Collateral Documents and (v) all other
Credit Documents, each in form and substance acceptable to the Agent in
its reasonable discretion.
(b) Corporate Documents. Receipt by the Agent of the
following:
(i) Charter Documents. Copies of the articles or
certificates of incorporation or other charter documents of
each Credit Party certified to be true
51
69
and complete as of a recent date by the appropriate
Governmental Authority of the state or other jurisdiction of
its incorporation and certified by a secretary or assistant
secretary of such Credit Party to be true and correct as of
the Closing Date.
(ii) Bylaws. A copy of the bylaws of each Credit
Party certified by a secretary or assistant secretary of such
Credit Party to be true and correct as of the Closing Date.
(iii) Resolutions. Copies of resolutions of the Board
of Directors of each Credit Party approving and adopting the
Credit Documents to which it is a party, the transactions
contemplated therein and authorizing execution and delivery
thereof, certified by a secretary or assistant secretary of
such Credit Party to be true and correct and in force and
effect as of the Closing Date.
(iv) Good Standing. Copies of certificates of good
standing, existence or its equivalent with respect to each
Credit Party certified as of a recent date by the appropriate
Governmental Authorities of the state or other jurisdiction of
incorporation and each other jurisdiction in which the failure
to so qualify and be in good standing could have a Material
Adverse Effect.
(v) Incumbency. An incumbency certificate of each
Credit Party certified by a secretary or assistant secretary
to be true and correct as of the Closing Date.
(c) Financial Statements. Receipt by the Agent of (i) the
consolidated financial statements of the Borrower and its Subsidiaries,
including balance sheets and income and cash flow statements for the
fiscal year 1996 and 1997, in each case audited by nationally
recognized independent public accountants and containing an unqualified
opinion of such firm that such statements present fairly the
consolidated financial position of the Borrower and its Subsidiaries
and are prepared in conformity with GAAP and (ii) such other
information relating to the Borrower and its Subsidiaries as the Agent
may reasonably require in connection with the structuring and
syndication of credit facilities of the type described herein.
(d) Opinions of Counsel. The Agent shall have received a legal
opinion in form and substance reasonably satisfactory to the Lenders
dated as of the Closing Date from counsel to the Credit Parties.
(e) Personal Property Collateral. The Agent shall have
received:
(i) searches of Uniform Commercial Code filings in the
jurisdiction of the chief executive office of each Credit
Party and each jurisdiction where any Collateral is located or
where a filing would need to be made in order to perfect the
Agent's security interest in the Collateral (it being
understood and agreed that liens are not to be perfected with
respect to personal property located in certain
52
70
field offices), copies of the financing statements on file in
such jurisdictions and evidence that no Liens exist other than
Permitted Liens;
(ii) duly executed UCC financing statements for each
appropriate jurisdiction as is necessary, in the Agent's
reasonable discretion, to perfect the Agent's security
interest in the Collateral;
(iii) searches of ownership of intellectual property in
the appropriate governmental offices and such
patent/trademark/copyright filings as requested by the Agent
in order to perfect the Agent's security interest in the
Collateral;
(iv) all stock certificates evidencing the Capital Stock
pledged to the Agent pursuant to the Pledge Agreement,
together with duly executed in blank, undated stock powers
attached thereto (unless, with respect to the pledged Capital
Stock of any Foreign Subsidiary, such stock powers are deemed
unnecessary by the Agent in its reasonable discretion under
the law of the jurisdiction of incorporation of such Person);
(v) such patent/trademark/copyright filings as requested
by the Agent in order to perfect the Agent's security interest
in the Collateral; and
(vi) duly executed consents as are necessary, in the
Agent's sole discretion, to perfect the Agent's security
interest in the Collateral.
(f) Priority of Liens. The Agent shall have received
satisfactory evidence that (i) the Agent, on behalf of the Lenders,
holds a perfected, first priority Lien on all Collateral and (ii) none
of the Collateral is subject to any other Liens other than Permitted
Liens.
(g) Evidence of Insurance. Receipt by the Agent of copies of
insurance policies or certificates of insurance of the Consolidated
Parties evidencing liability and casualty insurance meeting the
requirements set forth in the Credit Documents, including, but not
limited to, naming the Agent as sole loss payee on behalf of the
Lenders.
(h) Material Adverse Effect. No material adverse change shall
have occurred since December 31, 1997 in the condition (financial or
otherwise), business, assets, operations, management or prospects of
the Consolidated Parties taken as a whole.
(i) Litigation. There shall not exist any pending or
threatened action, suit, investigation or proceeding against a
Consolidated Party that could have a Material Adverse Effect.
(j) Officer's Certificates. The Agent shall have received a
certificate or certificates executed by an Executive Officer of the
Borrower as of the Closing Date stating that (A) each Credit Party is
in compliance with all existing financial obligations, (B) all
governmental, shareholder and third party consents and approvals, if
any, with respect to the
53
71
Credit Documents and the transactions contemplated thereby have been
obtained, (C) no action, suit, investigation or proceeding is pending
or, to the knowledge of such Executive Officer, threatened in any court
or before any arbitrator or governmental instrumentality that purports
to affect any Credit Party or any transaction contemplated by the
Credit Documents, if such action, suit, investigation or proceeding
could have a Material Adverse Effect, and (D) immediately after giving
effect to this Credit Agreement, the other Credit Documents and all the
transactions contemplated therein to occur on such date, (1) each of
the Credit Parties is Solvent, (2) no Default or Event of Default
exists, (3) all representations and warranties contained herein and in
the other Credit Documents are true and correct in all material
respects, and (4) the Credit Parties are in compliance with each of the
financial covenants set forth in Section 7.11.
(k) Fees and Expenses. Payment by the Credit Parties of all
fees and expenses owed by them to the Lenders and the Agent, including,
without limitation, payment to the Agent of the fees set forth in the
Fee Letter.
(l) Year 2000. Receipt by the Agent and the Lenders of
reasonable evidence that (a) the Consolidated Parties are taking all
necessary and appropriate steps to ascertain the extent of, and to
quantify and successfully address, business and financial risks facing
the Consolidated Parties as a result of what is commonly referred to as
the `Year 2000 problem' (i.e., the inability of certain computer
applications to recognize correctly and perform date-sensitive
functions involving certain dates prior to and after December 31,
1999), including risks resulting from the failure of key vendors and
customers of the Consolidated Parties to successfully address the Year
2000 problem, and (b) each Consolidated Party's material computer
applications and those of its key vendors and customers will, on a
timely basis, adequately address the Year 2000 problem in all material
respects.
(m) Other. Receipt by the Lenders of such other documents,
instruments, agreements or information as reasonably requested by any
Lender, including, but not limited to, information regarding
litigation, tax, accounting, labor, insurance, pension liabilities
(actual or contingent), real estate leases, material contracts, debt
agreements, property ownership and contingent liabilities of the
Consolidated Parties.
5.2 CONDITIONS TO ALL EXTENSIONS OF CREDIT.
The obligations of each Lender to make, convert or extend any Loan and
of the Issuing Lender to issue or extend any Letter of Credit (including the
initial Loans and the initial Letter of Credit) are subject to satisfaction of
the following conditions in addition to satisfaction on the Closing Date of the
conditions set forth in Section 5.1:
(a) The Borrower shall have delivered (i) in the case of any
Revolving Loan or Foreign Currency Loan, an appropriate Notice of
Borrowing or Notice of Extension/Conversion or (ii) in the case of any
Letter of Credit, the Issuing Lender shall have received an appropriate
request for issuance in accordance with the provisions of Section
2.2(b);
54
72
(b) The representations and warranties set forth in Section 6
shall, subject to the limitations set forth therein, be true and
correct in all material respects as of such date (except for those
which expressly relate to an earlier date);
(c) There shall not have been commenced against any
Consolidated Party an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or any
case, proceeding or other action for the appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of such Person or for any substantial part of its Property or
for the winding up or liquidation of its affairs, and such involuntary
case or other case, proceeding or other action shall remain
undismissed, undischarged or unbonded;
(d) No Default or Event of Default shall exist and be
continuing either prior to or after giving effect thereto;
(e) No circumstances, events or conditions shall have occurred
since December 31, 1997 which would have a Material Adverse Effect; and
(f) Immediately after giving effect to the making of such Loan
(and the application of the proceeds thereof) or to the issuance of
such Letter of Credit, as the case may be, (i) the sum of the aggregate
principal amount of outstanding Revolving Loans plus LOC Obligations
outstanding plus outstanding Foreign Currency Loans plus outstanding
Swingline Loans shall not exceed the Revolving Committed Amount, (ii)
the LOC Obligations shall not exceed the LOC Committed Amount and (C)
the Foreign Currency Loans outstanding shall not exceed the Foreign
Currency Committed Amount.
The delivery of each Notice of Borrowing, each Notice of Extension/Conversion
and each request for a Letter of Credit pursuant to Section 2.2(b) shall
constitute a representation and warranty by the Credit Parties of the
correctness of the matters specified in subsections (b), (c), (d), (e) and (f)
above.
SECTION 6
REPRESENTATIONS AND WARRANTIES
The Credit Parties hereby represent to the Agent and each Lender that:
6.1 FINANCIAL CONDITION.
The financial statements delivered to the Lenders pursuant to Section
5.1(c) and Section 7.1(a) and (b), (i) have been prepared in accordance with
GAAP and (ii) present fairly (on the basis disclosed in the footnotes to such
financial statements) the consolidated financial condition, results of
operations and cash flows of the Consolidated Parties as of such date and for
such periods.
55
73
6.2 NO MATERIAL CHANGE.
Since December 31, 1997 (a) there has been no development or event
relating to or affecting a Consolidated Party which has had or could reasonably
be expected to have a Material Adverse Effect and (b) except as otherwise
permitted under this Credit Agreement, no dividends or other distributions have
been declared, paid or made upon the Capital Stock in a Consolidated Party nor
has any of the Capital Stock in a Consolidated Party been redeemed, retired,
purchased or otherwise acquired for value.
6.3 ORGANIZATION AND GOOD STANDING.
Each of the Consolidated Parties (a) is duly organized, validly
existing and is in good standing under the laws of the jurisdiction of its
incorporation or organization, (b) has the corporate or other necessary power
and authority, and the legal right, to own and operate its property, to lease
the property it operates as lessee and to conduct the business in which it is
currently engaged and (c) is duly qualified as a foreign entity and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification, other than in such jurisdictions where the failure to be so
qualified and in good standing could not be reasonably expected to have a
Material Adverse Effect.
6.4 POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.
Each of the Credit Parties has the corporate or other necessary power
and authority, and the legal right, to make, deliver and perform the Credit
Documents to which it is a party, and in the case of the Borrower, to obtain
extensions of credit hereunder, and has taken all necessary corporate action to
authorize the borrowings and other extensions of credit on the terms and
conditions of this Credit Agreement and to authorize the execution, delivery and
performance of the Credit Documents to which it is a party. No consent or
authorization of, filing with, notice to or other similar act by or in respect
of, any Governmental Authority or any other Person is required to be obtained or
made by or on behalf of any Credit Party in connection with the borrowings or
other extensions of credit hereunder or with the execution, delivery,
performance, validity or enforceability of the Credit Documents to which such
Credit Party is a party, except for filings to perfect the Liens created by the
Collateral Documents. This Credit Agreement has been, and each other Credit
Document to which any Credit Party is a party will be, duly executed and
delivered on behalf of the Credit Parties. This Credit Agreement constitutes,
and each other Credit Document to which any Credit Party is a party when
executed and delivered will constitute, a legal, valid and binding obligation of
such Credit Party enforceable against such party in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
6.5 NO CONFLICTS.
Neither the execution and delivery of the Credit Documents, nor the
consummation of the transactions contemplated therein, nor performance of and
compliance with the terms and
56
74
provisions thereof by such Credit Party will (a) violate or conflict with any
provision of its articles or certificate of incorporation or bylaws or other
organizational or governing documents of such Person, (b) violate, contravene or
materially conflict with any Requirement of Law or any other law, regulation
(including, without limitation, Regulation U or Regulation X), order, writ,
judgment, injunction, decree or permit applicable to it, (c) violate, contravene
or conflict with contractual provisions of, or cause an event of default under,
any indenture, loan agreement, mortgage, deed of trust, contract or other
agreement or instrument to which it is a party or by which it may be bound, the
violation of which could have a Material Adverse Effect, or (d) result in or
require the creation of any Lien (other than those contemplated in or created in
connection with the Credit Documents) upon or with respect to its properties.
6.6 NO DEFAULT.
No Consolidated Party is in default in any respect under any contract,
lease, loan agreement, indenture, mortgage, security agreement or other
agreement or obligation to which it is a party or by which any of its properties
is bound which default could have a Material Adverse Effect. No Default or Event
of Default has occurred or exists except as previously disclosed in writing to
the Lenders.
6.7 OWNERSHIP.
Each Consolidated Party is the owner of, and has good and marketable
title to, all of its respective assets and none of such assets is subject to any
Lien other than Permitted Liens.
6.8 INDEBTEDNESS.
Except as otherwise permitted under Section 8.1, the Consolidated
Parties have no Indebtedness.
6.9 LITIGATION.
There are no actions, suits or legal, equitable, arbitration or
administrative proceedings, pending or, to the knowledge of any Credit Party,
threatened against any Consolidated Party which might have a Material Adverse
Effect.
6.10 TAXES.
Each Consolidated Party has filed, or caused to be filed, all tax
returns (federal, state, local and foreign) required to be filed and paid (a)
all amounts of taxes shown thereon to be due (including interest and penalties)
and (b) all other taxes, fees, assessments and other governmental charges
(including mortgage recording taxes, documentary stamp taxes and intangibles
taxes) owing by it, except for such taxes (i) which are not yet delinquent or
(ii) that are being contested in good faith and by proper proceedings, and
against which adequate reserves are being maintained in accordance with GAAP. No
Credit Party is aware as of the Closing Date of any proposed tax assessments
against it or any other Consolidated Party.
57
75
6.11 COMPLIANCE WITH LAW.
Each Consolidated Party is in compliance with all Requirements of Law
and all other laws, rules, regulations, orders and decrees (including without
limitation Environmental Laws) applicable to it, or to its properties, unless
such failure to comply could not have a Material Adverse Effect.
6.12 ERISA.
(a) During the five-year period prior to the date on which
this representation is made or deemed made: (i) no ERISA Event has
occurred, and, to the best knowledge of the Credit Parties, no event or
condition has occurred or exists as a result of which any ERISA Event
could reasonably be expected to occur, with respect to any Plan; (ii)
no "accumulated funding deficiency," as such term is defined in Section
302 of ERISA and Section 412 of the Code, whether or not waived, has
occurred with respect to any Plan; (iii) each Plan has been maintained,
operated, and funded in material compliance with its own terms and in
material compliance with the provisions of ERISA, the Code, and any
other applicable federal or state laws; and (iv) no lien in favor of
the PBGC or a Plan has arisen or is reasonably likely to arise on
account of any Plan.
(b) The actuarial present value of all "benefit liabilities"
(as defined in Section 4001(a)(16) of ERISA), whether or not vested,
under each Single Employer Plan, as of the last annual valuation date
prior to the date on which this representation is made or deemed made
(determined, in each case, in accordance with Financial Accounting
Standards Board Statement 87, utilizing the actuarial assumptions used
in such Plan's most recent actuarial valuation report), did not exceed
as of such valuation date the fair market value of the assets of such
Plan.
(c) Neither any Consolidated Party nor any ERISA Affiliate has
incurred, or, to the best knowledge of the Credit Parties, could be
reasonably expected to incur, any withdrawal liability under ERISA to
any Multiemployer Plan or Multiple Employer Plan. Neither any
Consolidated Party nor any ERISA Affiliate would become subject to any
withdrawal liability under ERISA if any Consolidated Party or any ERISA
Affiliate were to withdraw completely from all Multiemployer Plans and
Multiple Employer Plans as of the valuation date most closely preceding
the date on which this representation is made or deemed made. Neither
any Consolidated Party nor any ERISA Affiliate has received any
notification that any Multiemployer Plan is in reorganization (within
the meaning of Section 4241 of ERISA), is insolvent (within the meaning
of Section 4245 of ERISA), or has been terminated (within the meaning
of Title IV of ERISA), and no Multiemployer Plan is, to the best
knowledge of the Credit Parties, reasonably expected to be in
reorganization, insolvent, or terminated.
(d) No prohibited transaction (within the meaning of Section
406 of ERISA or Section 4975 of the Code) or breach of fiduciary
responsibility has occurred with respect to a Plan which has subjected
or may subject any Consolidated Party or any ERISA Affiliate to any
material liability under Sections 406, 409, 502(i), or 502(l) of ERISA
or Section 4975 of the Code, or under any agreement or other instrument
pursuant to which any
58
76
Consolidated Party or any ERISA Affiliate has agreed or is required to
indemnify any Person against any such material liability.
(e) Neither any Consolidated Party nor any ERISA Affiliates
has any material liability with respect to "expected post-retirement
benefit obligations" within the meaning of the Financial Accounting
Standards Board Statement 106. Each Plan which is a welfare plan (as
defined in Section 3(1) of ERISA) to which Sections 601-609 of ERISA
and Section 4980B of the Code apply has been administered in compliance
in all material respects of such sections.
(f) Neither the execution and delivery of this Credit
Agreement nor the consummation of the financing transactions
contemplated thereunder will involve any transaction which is subject
to the prohibitions of Sections 404, 406 or 407 of ERISA or in
connection with which a tax could be imposed pursuant to Section 4975
of the Code. The representation by the Credit Parties in the preceding
sentence is made in reliance upon and subject to the accuracy of the
Lenders' representation in Section 11.15 with respect to their source
of funds and is subject, in the event that the source of the funds used
by the Lenders in connection with this transaction is an insurance
company's general asset account, to the application of Prohibited
Transaction Class Exemption 95-60, 60 Fed. Reg. 35,925 (1995),
compliance with the regulations issued under Section 401(c)(1)(A) of
ERISA, or the issuance of any other prohibited transaction exemption or
similar relief, to the effect that assets in an insurance company's
general asset account do not constitute assets of an "employee benefit
plan" within the meaning of Section 3(3) of ERISA of a "plan" within
the meaning of Section 4975(e)(1) of the Code.
6.13 SUBSIDIARIES.
Set forth on Schedule 6.13 is a complete and accurate list of all
Subsidiaries of each Consolidated Party. Information on Schedule 6.13 includes
jurisdiction of incorporation, the number of shares of each class of Capital
Stock outstanding, the number and percentage of outstanding shares of each class
owned (directly or indirectly) by such Consolidated Party; and the number and
effect, if exercised, of all outstanding options, warrants, rights of conversion
or purchase and all other similar rights with respect thereto. The outstanding
Capital Stock of all such Subsidiaries is validly issued, fully paid and
non-assessable and is owned by each such Consolidated Party, directly or
indirectly, free and clear of all Liens (other than those arising under or
contemplated in connection with the Credit Documents). Other than as set forth
in Schedule 6.13, no Consolidated Party has outstanding any securities
convertible into or exchangeable for its Capital Stock nor does any such Person
have outstanding any rights to subscribe for or to purchase or any options for
the purchase of, or any agreements providing for the issuance (contingent or
otherwise) of, or any calls, commitments or claims of any character relating to
its Capital Stock.
6.14 GOVERNMENTAL REGULATIONS, ETC.
(a) No part of the Letters of Credit or proceeds of the Loans
will be used, directly or indirectly, for the purpose of purchasing or
carrying any "margin stock" within the meaning of Regulation U, or for
the purpose of purchasing or carrying or trading in any
59
77
securities that are "margin stock" within the meaning of Regulation U.
If requested by any Lender or the Agent, the Borrower will furnish to
the Agent and each Lender a statement to the foregoing effect in
conformity with the requirements of FR Form U-1 referred to in
Regulation U. No indebtedness being reduced or retired out of the
proceeds of the Loans was or will be incurred for the purpose of
purchasing or carrying any margin stock within the meaning of
Regulation U or any "margin security" within the meaning of Regulation
T. "Margin stock" within the meaning of Regulation U does not
constitute more than 25% of the value of the consolidated assets of the
Consolidated Parties. None of the transactions contemplated by this
Credit Agreement (including, without limitation, the direct or indirect
use of the proceeds of the Loans) will violate or result in a violation
of Regulation T, U or X.
(b) No Consolidated Party is subject to regulation under the
Public Utility Holding Company Act of 1935, the Federal Power Act or
the Investment Company Act of 1940, each as amended. In addition, no
Consolidated Party is (i) an "investment company" registered or
required to be registered under the Investment Company Act of 1940, as
amended, and is not controlled by such a company, or (ii) a "holding
company", or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary" of a "holding
company", within the meaning of the Public Utility Holding Company Act
of 1935, as amended.
(c) No director, executive officer or principal shareholder of
any Consolidated Party is a director, executive officer or principal
shareholder of any Lender. For the purposes hereof the terms
"director", "executive officer" and "principal shareholder" (when used
with reference to any Lender) have the respective meanings assigned
thereto in Regulation O issued by the Board of Governors of the Federal
Reserve System.
(d) Except where the failure to have or hold any such item
would not have a Material Adverse Effect, each Consolidated Party has
obtained and holds in full force and effect, all franchises, licenses,
permits, certificates, authorizations, qualifications, accreditations,
easements, rights of way and other rights, consents and approvals which
are necessary for the ownership of its respective Property and to the
conduct of its respective businesses as presently conducted.
(e) No Consolidated Party is in violation of any applicable
statute, regulation or ordinance of the United States of America, or of
any state, city, town, municipality, county or any other jurisdiction,
or of any agency thereof (including without limitation, environmental
laws and regulations), which violation could reasonably be expected to
have a Material Adverse Effect.
(f) Each Consolidated Party is current with all material
reports and documents, if any, required to be filed with any state or
federal securities commission or similar agency and is in full
compliance in all material respects with all applicable rules and
regulations of such commissions.
60
78
6.15 PURPOSE OF LOANS AND LETTERS OF CREDIT.
The proceeds of the Loans hereunder shall be used solely by the
Borrower (i) for working capital (ii) to make Consolidated Capital Expenditures,
(iii) to make Permitted Acquisitions and (iv) for general corporate purposes.
The Letters of Credit shall be used only for or in connection with appeal bonds,
reimbursement obligations arising in connection with surety and reclamation
bonds, reinsurance, domestic or international trade transactions and obligations
not otherwise aforementioned relating to transactions entered into by the
applicable account party in the ordinary course of business.
6.16 ENVIRONMENTAL MATTERS.
Except where failure to comply could not reasonably be expected to have
a Material Adverse Effect:
(a) Each of the facilities and properties owned, leased or
operated by the Consolidated Parties (the "Properties") and all
operations at the Properties are in compliance with all applicable
Environmental Laws, and there is no violation of any Environmental Law
with respect to the Properties or the businesses operated by the
Consolidated Parties (the "Businesses"), and there are no conditions
relating to the Businesses or Properties that could give rise to
liability under any applicable Environmental Laws.
(b) None of the Properties contains, or has previously
contained, any Materials of Environmental Concern at, on or under the
Properties in amounts or concentrations that constitute or constituted
a violation of, or could give rise to liability under, Environmental
Laws.
(c) No Consolidated Party has received any written or verbal
notice of, or inquiry from any Governmental Authority regarding, any
violation, alleged violation, non-compliance, liability or potential
liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Properties or the
Businesses, nor does any Consolidated Party have knowledge or reason to
believe that any such notice will be received or is being threatened.
(d) Materials of Environmental Concern have not been
transported or disposed of from the Properties, or generated, treated,
stored or disposed of at, on or under any of the Properties or any
other location, in each case by or on behalf of any Consolidated Party
in violation of, or in a manner that could give rise to liability
under, any applicable Environmental Law.
(e) No judicial proceeding or governmental or administrative
action is pending or, to the best knowledge of any Credit Party,
threatened, under any Environmental Law to which any Consolidated Party
is or will be named as a party, nor are there any consent decrees or
other decrees, consent orders, administrative orders or other orders,
or other
61
79
administrative or judicial requirements outstanding under any
Environmental Law with respect to the Consolidated Parties, the
Properties or the Businesses.
(f) There has been no release, or threat of release, of
Materials of Environmental Concern at or from the Properties, or
arising from or related to the operations (including, without
limitation, disposal) of any Consolidated Party in connection with the
Properties or otherwise in connection with the Businesses, in violation
of or in amounts or in a manner that could give rise to liability under
Environmental Laws.
6.17 INTELLECTUAL PROPERTY.
Each Consolidated Party owns, or has the legal right to use, all
trademarks, tradenames, copyrights, technology, know-how and processes (the
"Intellectual Property") necessary for each of them to conduct its business as
currently conducted except for those the failure to own or have such legal right
to use could not have a Material Adverse Effect. Set forth on Schedule 6.17 is a
list of all Intellectual Property owned by each Consolidated Party or that any
Consolidated Party has the right to use. Except as provided on Schedule 6.17, no
claim has been asserted and is pending by any Person challenging or questioning
the use of any such Intellectual Property or the validity or effectiveness of
any such Intellectual Property, nor does any Credit Party know of any such
claim, and to the Credit Parties' knowledge the use of such Intellectual
Property by any Consolidated Party does not infringe on the rights of any
Person, except for such claims and infringements that, in the aggregate, could
not have a Material Adverse Effect.
6.18 SOLVENCY.
Each Credit Party is and, after consummation of the transactions
contemplated by this Credit Agreement, will be Solvent.
6.19 INVESTMENTS.
All Investments of each Consolidated Party are Permitted Investments.
6.20 LOCATION OF COLLATERAL.
Set forth on Schedule 6.20(a) is a list of all locations where any
tangible personal property of a Consolidated Party is located, including county
and state where located. Set forth on Schedule 6.20(b) is the chief executive
office and principal place of business of each Consolidated Party.
6.21 DISCLOSURE.
Neither this Credit Agreement nor any financial statements delivered to
the Lenders nor any other document, certificate or statement furnished to the
Lenders by or on behalf of any Consolidated Party in connection with the
transactions contemplated hereby contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
contained therein or herein not misleading.
62
80
6.22 BROKERS' FEES.
No Consolidated Party has any obligation to any Person in respect of
any finder's, broker's, investment banking or other similar fee in connection
with any of the transactions contemplated under the Credit Documents.
6.23 LABOR MATTERS.
There are no collective bargaining agreements or Multiemployer Plans
covering the employees of a Consolidated Party as of the Closing Date and none
of the Consolidated Parties has suffered any strikes, walkouts, work stoppages
or other material labor difficulty within the last five years.
6.24 YEAR 2000 COMPLIANCE.
Each Credit Party has (i) initiated a review and assessment of all
areas within its and each of its Subsidiaries' business and operations
(including those affected by suppliers, vendors and customers) that could be
adversely affected by the "Year 2000 Problem" (that is, the risk that computer
applications used by such Credit Party or any of its Subsidiaries (or suppliers,
vendors and customers) may be unable to recognize and perform properly
date-sensitive functions involving certain dates prior to and any date after
December 31, 1999), (ii) developed a plan and timeline for addressing the Year
2000 Problem on a timely basis, and (iii) to date, implemented that plan in
accordance with the timetable. Based on the foregoing, the each Credit Party
believes that all computer applications (including those of its suppliers,
vendors and customers) that are material to its and any of its Subsidiaries'
business and operations are reasonably expected on a timely basis to be able to
perform properly date-sensitive functions for all dates before and after January
1, 2000 (that is, be "Year 2000 complaint"), except to the extent that a failure
to do so could not reasonably be expected to have Material Adverse Effect.
SECTION 7
AFFIRMATIVE COVENANTS
Each Credit Party hereby covenants and agrees that, so long as this
Credit Agreement is in effect or any amounts payable hereunder or under any
other Credit Document shall remain outstanding, and until all of the Commitments
hereunder shall have terminated:
7.1 INFORMATION COVENANTS.
The Credit Parties will furnish, or cause to be furnished, to the Agent
and each of the Lenders:
(a) Annual Financial Statements. As soon as available, and in
any event within 90 days after the close of each fiscal year of the
Consolidated Parties, a consolidated balance sheet and income statement
of the Consolidated Parties, as of the end of such fiscal
63
81
year, together with related consolidated statements of operations and
retained earnings and of cash flows for such fiscal year, setting forth
in comparative form consolidated figures for the preceding fiscal year,
all such financial information described above to be in reasonable form
and detail and audited by independent certified public accountants of
recognized national standing reasonably acceptable to the Agent and
whose opinion shall be to the effect that such financial statements
have been prepared in accordance with GAAP (except for changes with
which such accountants concur) and shall not be limited as to the scope
of the audit or qualified as to the status of the Consolidated Parties
as a going concern.
(b) Quarterly Financial Statements. As soon as available, and
in any event within 45 days after the close of each fiscal quarter of
the Consolidated Parties (other than the fourth fiscal quarter, in
which case 90 days after the end thereof) a consolidated balance sheet
and income statement of the Consolidated Parties, as of the end of such
fiscal quarter, together with related consolidated statements of
operations for such fiscal quarter and cash flows for such year to
date, in each case setting forth in comparative form consolidated
figures for the corresponding period of the preceding fiscal year, all
such financial information described above to be in a form satisfying
the Securities and Exchange Commission requirements for a 10-Q filing
or otherwise in reasonable form and detail and reasonably acceptable to
the Agent, and accompanied by a certificate of the chief financial
officer of the Borrower to the effect that such quarterly financial
statements fairly present in all material respects the financial
condition of the Consolidated Parties and have been prepared in
accordance with GAAP, subject to changes resulting from audit and
normal year-end audit adjustments.
(c) Officer's Certificate. At the time of delivery of the
financial statements provided for in Sections 7.1(a) and 7.1(b) above,
a certificate of the chief financial officer of the Borrower
substantially in the form of Exhibit 7.1(c), (i) demonstrating
compliance with the financial covenants contained in Section 7.11 by
calculation thereof as of the end of each such fiscal period and (ii)
stating that no Default or Event of Default exists, or if any Default
or Event of Default does exist, specifying the nature and extent
thereof and what action the Credit Parties propose to take with respect
thereto.
(d) Accountant's Certificate. Within the period for delivery
of the annual financial statements provided in Section 7.1(a), a
certificate of the accountants conducting the annual audit stating that
they have reviewed this Credit Agreement and stating further whether,
in the course of their audit, they have become aware of any Default or
Event of Default and, if any such Default or Event of Default exists,
specifying the nature and extent thereof.
(e) Auditor's Reports. Promptly upon receipt thereof, a copy
of any other report or "management letter" submitted by independent
accountants to any Consolidated Party in connection with any annual,
interim or special audit of the books of such Person.
(f) Reports. Promptly upon transmission or receipt thereof,
(i) copies of any filings and registrations with, and reports to or
from, the Securities and Exchange Commission, or any successor agency,
and copies of all financial statements, proxy
64
82
statements, notices and reports as any Consolidated Party shall send to
its shareholders or to a holder of any Indebtedness owed by any
Consolidated Party in its capacity as such a holder and (ii) upon the
request of the Agent, all reports and written information to and from
the United States Environmental Protection Agency, or any state or
local agency responsible for environmental matters, the United States
Occupational Health and Safety Administration, or any state or local
agency responsible for health and safety matters, or any successor
agencies or authorities concerning environmental, health or safety
matters.
(g) Notices. Upon obtaining knowledge thereof, the Credit
Parties will give written notice to the Agent promptly of (i) the
occurrence of an event or condition consisting of a Default or Event of
Default, specifying the nature and existence thereof and what action
the Credit Parties propose to take with respect thereto, and (ii) the
occurrence of any of the following with respect to any Consolidated
Party (A) the pendency or commencement of any litigation, arbitral or
governmental proceeding against such Person which if adversely
determined is likely to have a Material Adverse Effect, (B) the
institution of any proceedings against such Person with respect to, or
the receipt of notice by such Person of potential liability or
responsibility for violation, or alleged violation of any federal,
state or local law, rule or regulation, including but not limited to,
Environmental Laws, the violation of which could be reasonably expected
to have a Material Adverse Effect, or (C) any notice or determination
concerning the imposition of any withdrawal liability by a
Multiemployer Plan against such Person or any ERISA Affiliate, the
determination that a Multiemployer Plan is, or is expected to be, in
reorganization within the meaning of Title IV of ERISA or the
termination of any Plan.
(h) ERISA. Upon obtaining knowledge thereof, the Credit
Parties will give written notice to the Agent promptly (and in any
event within five business days) of: (i) of any event or condition,
including, but not limited to, any Reportable Event, that constitutes,
or might reasonably lead to, an ERISA Event; (ii) with respect to any
Multiemployer Plan, the receipt of notice as prescribed in ERISA or
otherwise of any withdrawal liability assessed against the Credit
Parties or any ERISA Affiliates, or of a determination that any
Multiemployer Plan is in reorganization or insolvent (both within the
meaning of Title IV of ERISA); (iii) the failure to make full payment
on or before the due date (including extensions) thereof of all amounts
which any Consolidated Party or any ERISA Affiliate is required to
contribute to each Plan pursuant to its terms and as required to meet
the minimum funding standard set forth in ERISA and the Code with
respect thereto; or (iv) any change in the funding status of any Plan
that could have a Material Adverse Effect, together with a description
of any such event or condition or a copy of any such notice and a
statement by the chief financial officer of the Borrower briefly
setting forth the details regarding such event, condition, or notice,
and the action, if any, which has been or is being taken or is proposed
to be taken by the Credit Parties with respect thereto. Promptly upon
request, the Credit Parties shall furnish the Agent and the Lenders
with such additional information concerning any Plan as may be
reasonably requested, including, but not limited to, copies of each
annual report/return (Form 5500 series), as well as all schedules and
attachments thereto required to be filed with the Department of Labor
and/or the Internal Revenue Service pursuant to ERISA and the Code,
respectively, for each "plan year" (within the meaning of Section 3(39)
of ERISA).
65
83
(i) Environmental.
(i) Upon the reasonable written request of the Agent,
the Credit Parties will furnish or cause to be furnished to
the Agent, at the Credit Parties' expense, a report of an
environmental assessment of reasonable scope, form and depth,
(including, where appropriate, invasive soil or groundwater
sampling) by a consultant reasonably acceptable to the Agent
as to the nature and extent of the presence of any Materials
of Environmental Concern on any Properties (as defined in
Section 6.16) that are either owned by a Credit Party or for
which the Credit Party is the tenant for a majority of the
usable space, and as to the compliance by any Consolidated
Party with Environmental Laws at such Properties. If the
Credit Parties fail to deliver such an environmental report
within seventy-five (75) days after receipt of such written
request then the Agent may arrange for same, and the
Consolidated Parties hereby grant to the Agent and their
representatives access to the Properties to reasonably
undertake such an assessment (including, where appropriate,
invasive soil or groundwater sampling). The reasonable cost of
any assessment arranged for by the Agent pursuant to this
provision will be payable by the Credit Parties on demand and
added to the obligations secured by the Collateral Documents.
(ii) The Consolidated Parties will conduct and
complete all investigations, studies, sampling, and testing
and all remedial, removal, and other actions necessary to
address all Materials of Environmental Concern on , from or
affecting any of the Properties referred to in the preceding
clause (i) to the extent necessary to be in compliance with
all Environmental Laws and with the validly issued orders and
directives of all Governmental Authorities with jurisdiction
over such Properties to the extent any failure could have a
Material Adverse Effect.
(j) Additional Patents and Trademarks. At the time of delivery
of the financial statements and reports provided for in Section 7.1(a),
a report signed by the chief financial officer or treasurer of the
Borrower setting forth (i) a list of registration numbers for all
patents and copyrights awarded to any Consolidated Party since the last
day of the immediately preceding fiscal year and (ii) a list of all
patent applications and copyright applications submitted by any
Consolidated Party since the last day of the immediately preceding
fiscal year and the status of each such application, all in such form
as shall be reasonably satisfactory to the Agent.
(k) Other Information. With reasonable promptness upon any
such request, such other information regarding the business, properties
or financial condition of any Consolidated Party as the Agent or the
Required Lenders may reasonably request.
66
84
7.2 PRESERVATION OF EXISTENCE AND FRANCHISES.
Except as a result of or in connection with a merger of a Subsidiary
permitted under Section 8.4, each Credit Party will, and will cause each of its
Subsidiaries to, do all things necessary to preserve and keep in full force and
effect its existence, rights, franchises and authority.
7.3 BOOKS AND RECORDS.
Each Credit Party will, and will cause each of its Subsidiaries to,
keep complete and accurate books and records of its transactions in accordance
with good accounting practices on the basis of GAAP (including the establishment
and maintenance of appropriate reserves).
7.4 COMPLIANCE WITH LAW.
Each Credit Party will, and will cause each of its Subsidiaries to,
comply with all laws, rules, regulations and orders, and all applicable
restrictions imposed by all Governmental Authorities, applicable to it and its
Property if noncompliance with any such law, rule, regulation, order or
restriction could be reasonably expected to have a Material Adverse Effect.
7.5 PAYMENT OF TAXES AND OTHER INDEBTEDNESS.
Each Credit Party will, and will cause each of its Subsidiaries to, pay
and discharge (a) all taxes, assessments and governmental charges or levies
imposed upon it, or upon its income or profits, or upon any of its properties,
before they shall become delinquent, (b) all lawful claims (including claims for
labor, materials and supplies) which, if unpaid, might give rise to a Lien upon
any of its properties, and (c) except as prohibited hereunder, all of its other
Indebtedness as it shall become due; provided, however, that no Consolidated
Party shall be required to pay any such tax, assessment, charge, levy, claim or
Indebtedness which is being contested in good faith by appropriate proceedings
and as to which adequate reserves therefor have been established in accordance
with GAAP, unless the failure to make any such payment (i) could give rise to an
immediate right to foreclose on a Lien securing such amounts or (ii) could be
reasonably expected to have a Material Adverse Effect.
7.6 INSURANCE.
(a) Each Credit Party will, and will cause each of its
Subsidiaries to, at all times maintain in full force and effect
insurance (including worker's compensation insurance, liability
insurance, casualty insurance and business interruption insurance) in
such amounts, covering such risks and liabilities and with such
deductibles or self-insurance retentions as are in accordance with
normal industry practice (or as otherwise required by the Collateral
Documents). The Agent shall be named as loss payee or mortgagee, as its
interest may appear, and/or additional insured with respect to any such
insurance providing coverage in respect of any Collateral, and each
provider of any such insurance shall agree, by endorsement upon the
policy or policies issued by it or by independent instruments furnished
to the Agent, that it will give the Agent thirty (30) days prior
written notice before any such policy or policies shall be altered or
canceled, and that no act or default
67
85
of any Consolidated Party or any other Person shall affect the rights
of the Agent or the Lenders under such policy or policies. The present
insurance coverage of the Consolidated Parties is outlined as to
carrier, policy number, expiration date, type and amount on Schedule
7.6.
(b) In case of any material loss, damage to or destruction of
the Collateral of any Credit Party or any part thereof, such Credit
Party shall promptly give written notice thereof to the Agent generally
describing the nature and extent of such damage or destruction. In case
of any loss, damage to or destruction of the Collateral of any Credit
Party or any part thereof, such Credit Party, whether or not the
insurance proceeds, if any, received on account of such damage or
destruction shall be sufficient for that purpose, at such Credit
Party's cost and expense, will promptly repair or replace the
Collateral of such Credit Party so lost, damaged or destroyed;
provided, however, that such Credit Party need not repair or replace
the Collateral of such Credit Party so lost, damaged or destroyed to
the extent the failure to make such repair or replacement (i) is
desirable to the proper conduct of the business of such Credit Party in
the ordinary course and otherwise in the best interest of such Credit
Party; and (ii) would not materially impair the rights and benefits of
the Agent or the Lenders under the Collateral Documents, any other
Credit Document or any Hedging Agreement. In the event a Credit Party
shall receive any proceeds of such insurance in a net amount in excess
of $100,000, such Credit Party will immediately pay over such proceeds
to the Agent, for payment on the Credit Party Obligations; provided,
however, that the Agent agrees to release such insurance proceeds to
such Credit Party for replacement or restoration of the portion of the
Collateral of such Credit Party lost, damaged or destroyed if, but only
if, (A) no Default or Event of Default shall have occurred and be
continuing at the time of release, (B) written application for such
release is received by the Agent from such Credit Party within 30 days
of receipt of such proceeds and (C) the Agent has received evidence
reasonably satisfactory to it that the Collateral lost, damaged or
destroyed has been or will be replaced or restored to its condition
immediately prior to the loss, destruction or other event giving rise
to the payment of such insurance proceeds.
7.7 MAINTENANCE OF PROPERTY.
Each Credit Party will, and will cause each of its Subsidiaries to,
maintain and preserve its properties and equipment material to the conduct of
its business in good repair, working order and condition, normal wear and tear
and casualty and condemnation excepted, and will make, or cause to be made, in
such properties and equipment from time to time all repairs, renewals,
replacements, extensions, additions, betterments and improvements thereto as may
be needed or proper, to the extent and in the manner customary for companies in
similar businesses.
7.8 PERFORMANCE OF OBLIGATIONS.
Each Credit Party will, and will cause each of its Subsidiaries to,
perform in all material respects all of its obligations under the terms of all
material agreements, indentures, mortgages, security agreements or other debt
instruments to which it is a party or by which it is bound.
68
86
7.9 USE OF PROCEEDS.
The Borrower will use the proceeds of the Loans and will use the
Letters of Credit solely for the purposes set forth in Section 6.15.
7.10 AUDITS/INSPECTIONS.
Upon reasonable notice and during normal business hours, each Credit
Party will, and will cause each of its Subsidiaries to, permit representatives
appointed by the Agent, including, without limitation, independent accountants,
agents, attorneys, and appraisers to visit and inspect its property, including
its books and records, its accounts receivable and inventory, its facilities and
its other business assets, and to make photocopies or photographs thereof and to
write down and record any information such representative obtains and shall
permit the Agent or its representatives to investigate and verify the accuracy
of information provided to the Lenders and to discuss all such matters with the
officers, employees and representatives of such Person. The Credit Parties agree
that the Agent, and its representatives, may conduct an annual audit of the
Collateral, at the expense of the Credit Parties.
7.11 FINANCIAL COVENANTS.
(i) Fixed Charge Coverage Ratio. The Fixed Charge Coverage
Ratio, as of the last day of each fiscal quarter of the Consolidated
Parties, shall be greater than or equal to 3.0 to 1.0.
(ii) Leverage Ratio. The Leverage Ratio, as of the last day of
each fiscal quarter of the Consolidated Parties, shall be less than or
equal to:
(a) From the Closing Date to and including June
30, 1999, 3.0 to 1.0; and
(b) From July 1, 1999 and thereafter, 2.5 to
1.0.
(iii) Net Worth. At all times Net Worth shall be greater than
or equal to the sum of $105,000,0000, increased on a cumulative basis
as of the end of each fiscal quarter of the Borrower, commencing with
the fiscal quarter ending September 30, 1998 by an amount equal to 75%
of Consolidated Net Income for the fiscal quarter then ended (without
deductions for any losses) plus 100% of the Net Cash Proceeds from any
Equity Issuance subsequent to the Closing Date.
(iv) Funded Indebtedness to Capitalization Ratio. The Funded
Indebtedness to Capitalization Ratio, as of the last day of each fiscal
quarter of the Consolidated Parties, shall not be greater than 0.50 to
1.0.
(v) Calculation Method. For purposes of calculating financial
covenants as of the end of each fiscal quarter through the fiscal
quarter ending June 30, 1999, the Consolidated EBITDA and the
Consolidated EBIT to be included with respect to ▇▇▇▇▇,
69
87
Drew & Associates ("LD&A") for the portion of the applicable twelve
month period that accrued prior to the acquisition of LD&A by the
Borrower shall be as follows:
Date of Fiscal Quarter End EBIT EBITDA
-------------------------- ---- ------
June 30, 1998 $6,847,000 $7,109,000
September 30, 1998 $5,288,000 $5,502,000
December 31, 1998 $3,729,000 $3,895,000
March 31, 1999 $2,241,000 $2,357,000
June 30, 1999 $0 $0
7.12 ADDITIONAL CREDIT PARTIES.
As soon as practicable and in any event within 45 days after any Person
becomes a Subsidiary of any Credit Party, the Borrower shall provide the Agent
with written notice thereof setting forth information in reasonable detail
describing all of the assets of such Person and shall (a) if such Person is a
Domestic Subsidiary of a Credit Party, cause such Person to execute a Joinder
Agreement in substantially the same form as Exhibit 7.12, (b) cause 100% (if
such Person is a Domestic Subsidiary of a Credit Party) or 66% (if such Person
is a direct Foreign Subsidiary of a Credit Party) of the Capital Stock of such
Person to be delivered to the Agent (together with undated stock powers signed
in blank (unless, with respect to a Foreign Subsidiary, such stock powers are
deemed unnecessary by the Agent in its reasonable discretion under the law of
the jurisdiction of incorporation of such Person)) and pledged to the Agent
pursuant to an appropriate pledge agreement(s) in form acceptable to the Agent
in its reasonable discretion and cause such Person to deliver such other
documentation as the Agent may reasonably request in connection with the
foregoing, including, without limitation, appropriate UCC-1 financing
statements, real estate title insurance policies, environmental reports,
landlord's waivers, certified resolutions and other organizational and
authorizing documents of such Person, and favorable opinions of counsel to such
Person all in form, content and scope reasonably satisfactory to the Agent. It
is specifically understood and agreed that no Foreign Subsidiary (a "Parent
Foreign Subsidiary") shall be required to pledge any of the Capital Stock of any
other Foreign Subsidiary owned by such Parent Foreign Subsidiary.
7.13 ENVIRONMENTAL LAWS.
(a) The Consolidated Parties shall comply in all material
respects with, and take reasonable actions to ensure compliance in all
material respects by all tenants and subtenants, if any, with, all
applicable Environmental Laws and obtain and comply in all material
respects with and maintain, and take reasonable actions to ensure that
all tenants and subtenants obtain and comply in all material respects
with and maintain, any and all licenses, approvals, notifications,
registrations or permits required by applicable Environmental Laws
except to the extent that failure to do so would not reasonably be
expected to have a Material Adverse Effect;
70
88
(b) The Consolidated Parties shall conduct and complete all
investigations, studies, sampling and testing, and all remedial,
removal and other actions required under Environmental Laws and
promptly comply in all material respects with all lawful orders and
directives of all Governmental Authorities regarding Environmental Laws
except to the extent that the same are being contested in good faith by
appropriate proceedings and the failure to do or the pendency of such
proceedings would not reasonably be expected to have a Material Adverse
Effect; and
(c) The Consolidated Parties shall defend, indemnify and hold
harmless the Agent and the Lenders, and their respective employees,
agents, officers and directors, from and against any and all claims,
demands, penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature known or unknown, contingent or
otherwise, arising out of, or in any way relating to the violation of,
noncompliance with or liability under, any Environmental Law applicable
to the operations of the Borrower or any of its Subsidiaries or the
Properties, or any orders, requirements or demands of Governmental
Authorities related thereto, including, without limitation, reasonable
attorney's and consultant's fees, investigation and laboratory fees,
response costs, court costs and litigation expenses, except to the
extent that any of the foregoing arise out of the gross negligence or
willful misconduct of the party seeking indemnification therefor. The
agreements in this paragraph shall survive repayment of the Loans and
all other amounts payable hereunder, and termination of the
Commitments.
7.14 COLLATERAL.
If, subsequent to the Closing Date, a Credit Party shall acquire any
intellectual property, securities instruments, chattel paper or other personal
property required to be delivered to the Agent as Collateral hereunder or under
any of the Collateral Documents, the Borrower shall notify the Agent of same in
each case as soon as practicable after the acquisition thereof or execution of
such lease agreement, as appropriate. Each Credit Party shall take such action
as reasonably requested by the Agent and at its own expense, to ensure that the
Agent shall have a first priority perfected Lien in all personal property of the
Credit Parties (whether now owned or hereafter acquired), subject only to
Permitted Liens.
7.15 YEAR 2000 COMPLIANCE.
Each Credit Party will promptly notify the Agent and each of the
Lenders in the event such Credit Party discovers or determines that any computer
application (including those of its suppliers, vendors and customers) that is
material to its or any of its Subsidiaries' business and operations will not be
Year 2000 compliant, except to the extent that such failure could not reasonably
be expected to have a Material Adverse Effect.
7.16 FURTHER ASSURANCES.
Within 45 days after the Closing Date, the Credit Parties agree to
provide to the Agent (a) a pledge of 66% of the stock of PRG France S.A. and (b)
an opinion, in a form and from legal
71
89
counsel reasonably acceptable to the Agent, which shall cover the
enforceability, the perfection and the priority of the Lenders' security
interest in the pledged shares of PRG France S.A.
SECTION 8
NEGATIVE COVENANTS
Each Credit Party hereby covenants and agrees that, so long as this
Credit Agreement is in effect or any amounts payable hereunder or under any
other Credit Document shall remain outstanding, and until all of the Commitments
hereunder shall have terminated:
8.1 INDEBTEDNESS.
The Credit Parties will not permit any Consolidated Party to contract,
create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness arising under this Credit Agreement and the
other Credit Documents;
(b) Indebtedness of the Borrower set forth in Schedule 8.1
(and renewals, refinancings and extensions thereof on terms and
conditions no less favorable to such Person than such existing
Indebtedness);
(c) purchase money Indebtedness (including obligations in
respect of Capital Leases or Synthetic Leases) hereafter incurred by
the Borrower to finance the purchase of fixed assets provided that (i)
the total of all such Indebtedness (including any such Indebtedness
referred to in subsection (b) above) shall not exceed an aggregate
principal amount of $10,000,000 at any one time outstanding; (ii) such
Indebtedness when incurred shall not exceed the purchase price of the
asset(s) financed; and (iii) no such Indebtedness shall be refinanced
for a principal amount in excess of the principal balance outstanding
thereon at the time of such refinancing;
(d) obligations of the Borrower in respect of Hedging
Agreements entered into in order to manage existing or anticipated
interest rate or exchange rate risks and not for speculative purposes;
and
(e) other unsecured Indebtedness of the Borrower and its
Subsidiaries in an amount not to exceed $5,000,000 in the aggregate at
any one time.
8.2 LIENS.
The Credit Parties will not permit any Consolidated Party to contract,
create, incur, assume or permit to exist any Lien with respect to any of its
Property, whether now owned or after acquired, except for Permitted Liens.
72
90
8.3 NATURE OF BUSINESS.
The Credit Parties will not permit any Consolidated Party to materially
alter the nature of the business conducted by such Person as of the Closing
Date.
8.4 CONSOLIDATION, MERGER, DISSOLUTION, ETC.
The Credit Parties will not permit any Consolidated Party to enter into
any transaction of merger or consolidation or liquidate, wind up or dissolve
itself (or suffer any liquidation or dissolution); provided that,
notwithstanding the foregoing provisions of this Section 8.4, (a) the Borrower
may merge or consolidate with any of its Subsidiaries provided that (i) the
Borrower shall be the continuing or surviving corporation, (ii) the Credit
Parties shall cause to be executed and delivered such documents, instruments and
certificates as the Agent may request in order to maintain the perfection and
priority of the Agent's liens on the assets of the Credit Parties as required by
Section 7.14 after giving effect to such transaction and (iii) after giving
effect to such transaction, no Default or Event of Default exists, (b) any
Credit Party other than the Borrower may merge or consolidate with any other
Credit Party other than the Borrower provided that (i) the Credit Parties shall
cause to be executed and delivered such documents, instruments and certificates
as the Agent may request in order to maintain the perfection and priority of the
Agent's liens on the assets of the Credit Parties as required by Section 7.14
after giving effect to such transaction and (ii) after giving effect to such
transaction, no Default or Event of Default exists, (c) any Consolidated Party
which is not a Credit Party may be merged or consolidated with or into any
Credit Party provided that (i) such Credit Party shall be the continuing or
surviving corporation, (ii) the Credit Parties shall cause to be executed and
delivered such documents, instruments and certificates as the Agent may request
in order to maintain the perfection and priority of the Agent's liens on the
assets of the Credit Parties as required by Section 7.14 after giving effect to
such transaction and (iii) after giving effect to such transaction, no Default
or Event of Default exists, and (d) any Consolidated Party which is not a Credit
Party may be merged or consolidated with or into any other Consolidated Party
which is not a Credit Party provided that, after giving effect to such
transaction, no Default or Event of Default exists.
8.5 ASSET DISPOSITIONS.
The Credit Parties will not permit any Consolidated Party to make any
Asset Disposition (including, without limitation, any Sale and Leaseback
Transaction) other than (i) the sale of inventory in the ordinary course of
business for fair consideration, (ii) the sale or disposition of machinery and
equipment no longer used or useful in the conduct of such Person's business and
(iii) other sales of assets during any fiscal year having an aggregate fair
market value of less than an amount equal to 10% of Total Assets of the
Consolidated Parties.
8.6 INVESTMENTS.
The Credit Parties will not permit any Consolidated Party to make
Investments in or to any Person, except for Permitted Investments.
73
91
8.7 RESTRICTED PAYMENTS.
The Credit Parties will not permit any Consolidated Party to, directly
or indirectly, declare, order, make or set apart any sum for or pay any
Restricted Payment, except (a) to make dividends payable solely in the same
class of Capital Stock of such Person, (b) to make dividends or other
distributions payable to the Borrower (directly or indirectly through
Subsidiaries) and (c) the redemption of Capital Stock of the Borrower from any
officer or director of the Borrower or any of its Subsidiaries provided that the
aggregate price paid for all such shares purchased during the term of this
Credit Agreement shall not exceed $250,000.
8.8 [INTENTIONALLY OMITTED]
8.9 TRANSACTIONS WITH AFFILIATES.
The Credit Parties will not permit any Consolidated Party to enter into
or permit to exist any transaction or series of transactions with any officer,
director, shareholder, Subsidiary or Affiliate of such Person other than (a)
normal compensation and reimbursement of expenses of officers and directors and
(b) except as otherwise specifically limited in this Credit Agreement, other
transactions which are entered into in the ordinary course of such Person's
business on terms and conditions substantially as favorable to such Person as
would be obtainable by it in a comparable arms-length transaction with a Person
other than an officer, director, shareholder, Subsidiary or Affiliate.
8.10 FISCAL YEAR; ORGANIZATIONAL DOCUMENTS.
The Credit Parties will not permit any Consolidated Party to change its
fiscal year or amend, modify or change its articles of incorporation (or
corporate charter or other similar organizational document) or bylaws (or other
similar document) without the prior written consent of the Required Lenders
(which consent shall not be unreasonably withheld).
8.11 LIMITATION ON RESTRICTED ACTIONS.
The Credit Parties will not permit any Consolidated Party to, directly
or indirectly, create or otherwise cause or suffer to exist or become effective
any encumbrance or restriction on the ability of any such Person to (a) pay
dividends or make any other distributions to any Credit Party on its Capital
Stock or with respect to any other interest or participation in, or measured by,
its profits, (b) pay any Indebtedness or other obligation owed to any Credit
Party, (c) make loans or advances to any Credit Party, (d) sell, lease or
transfer any of its properties or assets to any Credit Party, or (e) act as a
Guarantor and pledge its assets pursuant to the Credit Documents or any
renewals, refinancings, exchanges, refundings or extension thereof, except (in
respect of any of the matters referred to in clauses (a)-(d) above) for such
encumbrances or restrictions existing under or by reason of (i) this Credit
Agreement and the other Credit Documents, (ii) applicable law or (iii) any
document or instrument governing Indebtedness incurred pursuant to Section
8.1(c), provided that any such restriction contained therein relates only to the
asset or assets constructed or acquired in connection therewith.
74
92
8.12 OWNERSHIP OF SUBSIDIARIES.
Notwithstanding any other provisions of this Credit Agreement to the
contrary, the Credit Parties will not permit any Consolidated Party to (i)
permit any Person (other than the Borrower or any Wholly-Owned Subsidiary of the
Borrower) to own any Capital Stock of any Subsidiary of the Borrower, (ii)
permit any Subsidiary of the Borrower to issue Capital Stock (except to the
Borrower or to a Wholly-Owned Subsidiary of the Borrower), (iii) permit, create,
incur, assume or suffer to exist any Lien thereon, in each case except (A) to
qualify directors where required by applicable law or to satisfy other
requirements of applicable law with respect to the ownership of Capital Stock of
Foreign Subsidiaries or (B) for Permitted Liens and (iv) notwithstanding
anything to the contrary contained in clause (ii) above, permit any Subsidiary
of the Borrower to issue any shares of preferred Capital Stock.
8.13 SALE LEASEBACKS.
Except for transactions permitted by Section 8.1(c) hereof, the Credit
Parties will not permit any Consolidated Party to, directly or indirectly,
become or remain liable as lessee or as guarantor or other surety with respect
to any lease, whether an Operating Lease or a Capital Lease, of any Property
(whether real, personal or mixed), whether now owned or hereafter acquired, (a)
which such Consolidated Party has sold or transferred or is to sell or transfer
to a Person which is not a Consolidated Party or (b) which such Consolidated
Party intends to use for substantially the same purpose as any other Property
which has been sold or is to be sold or transferred by such Consolidated Party
to another Person which is not a Consolidated Party in connection with such
lease.
8.14 CAPITAL EXPENDITURES.
The Credit Parties will not permit Consolidated Capital Expenditures
for any fiscal year to exceed fifteen percent (15%) of the gross revenues of the
Borrower and its Subsidiaries for such fiscal year.
8.15 NO FURTHER NEGATIVE PLEDGES.
The Credit Parties will not permit any Consolidated Party to enter
into, assume or become subject to any agreement prohibiting or otherwise
restricting the creation or assumption of any Lien upon its properties or
assets, whether now owned or hereafter acquired, or requiring the grant of any
security for such obligation if security is given for some other obligation,
except (a) pursuant to this Credit Agreement and the other Credit Documents and
(b) pursuant to any document or instrument governing Indebtedness incurred
pursuant to Section 8.1(c), provided that any such restriction contained therein
relates only to the asset or assets constructed or acquired in connection
therewith.
75
93
SECTION 9
EVENTS OF DEFAULT
9.1 EVENTS OF DEFAULT.
An Event of Default shall exist upon the occurrence of any of the
following specified events (each an "Event of Default"):
(a) Payment. Any Credit Party shall default, and such default
shall continue for five (5) or more Business Days, in the payment when
due of any principal of or interest on the Loans or on any
reimbursement obligations arising from drawings under Letters of
Credit, or of any Fees or other amounts owing hereunder, under any of
the other Credit Documents or in connection herewith or therewith; or
(b) Representations. Any representation, warranty or statement
made or deemed to be made by any Credit Party herein, in any of the
other Credit Documents, or in any statement or certificate delivered or
required to be delivered pursuant hereto or thereto shall prove untrue
in any material respect on the date as of which it was deemed to have
been made; or
(c) Covenants. Any Credit Party shall
(i) default in the due performance or observance of
any term, covenant or agreement contained in Sections 7.2,
7.4, 7.9, 7.11, 7.12, 7.14 or 8.1 through 8.15, inclusive;
(ii) default in the due performance or observance of
any term, covenant or agreement contained in Sections 7.1(a),
(b), (c) or (d) and such default shall continue unremedied for
a period of at least 5 days after the earlier of a responsible
officer of a Credit Party becoming aware of such default or
notice thereof by the Agent; or
(iii) default in the due performance or observance by
it of any term, covenant or agreement (other than those
referred to in subsections (a), (b), (c)(i) or (c)(ii) of this
Section 9.1) contained in this Credit Agreement and such
default shall continue unremedied for a period of at least 30
days after the earlier of a responsible officer of a Credit
Party becoming aware of such default or notice thereof by the
Agent; or
(d) Other Credit Documents. (i) Any Credit Party shall default
in the due performance or observance of any term, covenant or agreement
in any of the other Credit Documents (subject to applicable grace or
cure periods, if any), or (ii) except as a result of or in connection
with a merger of a Subsidiary permitted under Section 8.4, any Credit
Document shall fail to be in full force and effect or to give the Agent
and/or the Lenders the
76
94
Liens, rights, powers and privileges purported to be created thereby,
or any Credit Party shall so state in writing; or
(e) Guaranties. Except as the result of or in connection with
a merger of a Subsidiary permitted under Section 8.4, the guaranty
given by any Guarantor hereunder (including any Additional Credit
Party) or any provision thereof shall cease to be in full force and
effect, or any Guarantor (including any Additional Credit Party)
hereunder or any Person acting by or on behalf of such Guarantor shall
deny or disaffirm such Guarantor's obligations under such guaranty, or
any Guarantor shall default in the due performance or observance of any
term, covenant or agreement on its part to be performed or observed
pursuant to any guaranty (subject to applicable grace and cure periods,
if any); or
(f) Bankruptcy, etc. Any Bankruptcy Event shall occur with
respect to any Consolidated Party; or
(g) Defaults under Other Agreements.
(i) Any Consolidated Party shall default in the
performance or observance (beyond the applicable grace period
with respect thereto, if any) of any material obligation or
condition of any contract or lease material to the
Consolidated Parties, taken as a whole; or
(ii) With respect to any Indebtedness (other than
Indebtedness outstanding under this Credit Agreement) in
excess of $1,000,000 in the aggregate for the Consolidated
Parties taken as a whole, (A) any Consolidated Party shall (1)
default in any payment (beyond the applicable grace period
with respect thereto, if any) with respect to any such
Indebtedness, or (2) the occurrence and continuance of a
default in the observance or performance relating to such
Indebtedness or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event
or condition shall occur or condition exist, the effect of
which default or other event or condition is to cause, or
permit, the holder or holders of such Indebtedness (or trustee
or agent on behalf of such holders) to cause (determined
without regard to whether any notice or lapse of time is
required), any such Indebtedness to become due prior to its
stated maturity; or (B) any such Indebtedness shall be
declared due and payable, or required to be prepaid other than
by a regularly scheduled required prepayment, prior to the
stated maturity thereof; or
(h) Judgments. One or more judgments or decrees shall be
entered against one or more of the Consolidated Parties involving a
liability of $1,000,000 or more in the aggregate (to the extent not
paid or fully covered by insurance provided by a carrier who has
acknowledged coverage and has the ability to perform) and any such
judgments or decrees shall not have been vacated, discharged or stayed
or bonded pending appeal within 30 days from the entry thereof; or
77
95
(i) ERISA. Any of the following events or conditions, if such
event or condition could have a Material Adverse Effect: (i) any
"accumulated funding deficiency," as such term is defined in Section
302 of ERISA and Section 412 of the Code, whether or not waived, shall
exist with respect to any Plan, or any lien shall arise on the assets
of any Consolidated Party or any ERISA Affiliate in favor of the PBGC
or a Plan; (ii) an ERISA Event shall occur with respect to a Single
Employer Plan, which is, in the reasonable opinion of the Agent, likely
to result in the termination of such Plan for purposes of Title IV of
ERISA; (iii) an ERISA Event shall occur with respect to a Multiemployer
Plan or Multiple Employer Plan, which is, in the reasonable opinion of
the Agent, likely to result in (A) the termination of such Plan for
purposes of Title IV of ERISA, or (B) any Consolidated Party or any
ERISA Affiliate incurring any liability in connection with a withdrawal
from, reorganization of (within the meaning of Section 4241 of ERISA),
or insolvency or (within the meaning of Section 4245 of ERISA) such
Plan; or (iv) any prohibited transaction (within the meaning of Section
406 of ERISA or Section 4975 of the Code) or breach of fiduciary
responsibility shall occur which may subject any Consolidated Party or
any ERISA Affiliate to any liability under Sections 406, 409, 502(i),
or 502(l) of ERISA or Section 4975 of the Code, or under any agreement
or other instrument pursuant to which any Consolidated Party or any
ERISA Affiliate has agreed or is required to indemnify any person
against any such liability; or
(j) Ownership. There shall occur a Change of Control.
9.2 ACCELERATION; REMEDIES.
Upon the occurrence of an Event of Default, and at any time thereafter
unless and until such Event of Default has been waived by the requisite Lenders
(pursuant to the voting requirements of Section 11.6) or cured to the
satisfaction of the requisite Lenders in their reasonable discretion (pursuant
to the voting procedures in Section 11.6), the Agent shall, upon the request and
direction of the Required Lenders, by written notice to the Credit Parties, take
any of the following actions:
(a) Termination of Commitments. Declare the Commitments
terminated whereupon the Commitments shall be immediately terminated.
(b) Acceleration. Declare the unpaid principal of and any
accrued interest in respect of all Loans, any reimbursement obligations
arising from drawings under Letters of Credit and any and all other
indebtedness or obligations of any and every kind owing by the Credit
Parties to the Agent and/or any of the Lenders hereunder to be due
whereupon the same shall be immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Credit Parties.
(c) Cash Collateral. Direct the Credit Parties to pay (and the
Credit Parties agree that upon receipt of such notice, or upon the
occurrence of an Event of Default under Section 9.1(f), they will
immediately pay) to the Agent additional cash, to be held by the Agent,
for the benefit of the Lenders, in a cash collateral account as
additional security for the LOC Obligations in respect of subsequent
drawings under all then outstanding Letters
78
96
of Credit in an amount equal to the maximum aggregate amount which may
be drawn under all Letters of Credits then outstanding.
(d) Enforcement of Rights. Enforce any and all rights and
interests created and existing under the Credit Documents including,
without limitation, all rights and remedies existing under the
Collateral Documents, all rights and remedies against a Guarantor and
all rights of set-off.
Notwithstanding the foregoing, if an Event of Default specified in
Section 9.1(f) shall occur with respect to the Borrower, then the Commitments
shall automatically terminate and all Loans, all reimbursement obligations
arising from drawings under Letters of Credit, all accrued interest in respect
thereof, all accrued and unpaid Fees and other indebtedness or obligations owing
to the Agent and/or any of the Lenders hereunder automatically shall immediately
become due and payable without the giving of any notice or other action by the
Agent or the Lenders.
SECTION 10
AGENCY PROVISIONS
10.1 APPOINTMENT, POWERS AND IMMUNITIES.
Each Lender hereby irrevocably appoints and authorizes the Agent to act
as its agent under this Credit Agreement and the other Credit Documents with
such powers and discretion as are specifically delegated to the Agent by the
terms of this Credit Agreement and the other Credit Documents, together with
such other powers as are reasonably incidental thereto. The Agent (which term as
used in this sentence and in Section 10.5 and the first sentence of Section 10.6
hereof shall include its Affiliates and its own and its Affiliates' officers,
directors, employees, and agents): (a) shall not have any duties or
responsibilities except those expressly set forth in this Credit Agreement and
shall not be a trustee or fiduciary for any Lender; (b) shall not be responsible
to the Lenders for any recital, statement, representation, or warranty (whether
written or oral) made in or in connection with any Credit Document or any
certificate or other document referred to or provided for in, or received by any
of them under, any Credit Document, or for the value, validity, effectiveness,
genuineness, enforceability, or sufficiency of any Credit Document, or any other
document referred to or provided for therein or for any failure by any Credit
Party or any other Person to perform any of its obligations thereunder; (c)
shall not be responsible for or have any duty to ascertain, inquire into, or
verify the performance or observance of any covenants or agreements by any
Credit Party or the satisfaction of any condition or to inspect the property
(including the books and records) of any Credit Party or any of its Subsidiaries
or Affiliates; (d) shall not be required to initiate or conduct any litigation
or collection proceedings under any Credit Document; and (e) shall not be
responsible for any action taken or omitted to be taken by it under or in
connection with any Credit Document, except for its own gross negligence or
willful misconduct. The Agent may employ agents and attorneys-in-fact and shall
not be responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care.
79
97
10.2 RELIANCE BY AGENT.
The Agent shall be entitled to rely upon any certification, notice,
instrument, writing, or other communication (including, without limitation, any
thereof by telephone or telecopy) believed by it to be genuine and correct and
to have been signed, sent or made by or on behalf of the proper Person or
Persons, and upon advice and statements of legal counsel (including counsel for
any Credit Party), independent accountants, and other experts selected by the
Agent. The Agent may deem and treat the payee of any Note as the holder thereof
for all purposes hereof unless and until the Agent receives and accepts an
Assignment and Acceptance executed in accordance with Section 11.3(b) hereof. As
to any matters not expressly provided for by this Credit Agreement, the Agent
shall not be required to exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Required Lenders,
and such instructions shall be binding on all of the Lenders; provided, however,
that the Agent shall not be required to take any action that exposes the Agent
to personal liability or that is contrary to any Credit Document or applicable
law or unless it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking any such action.
10.3 DEFAULTS.
The Agent shall not be deemed to have knowledge or notice of the
occurrence of a Default or Event of Default unless the Agent has received
written notice from a Lender or the a Credit Party specifying such Default or
Event of Default and stating that such notice is a "Notice of Default". In the
event that the Agent receives such a notice of the occurrence of a Default or
Event of Default, the Agent shall give prompt notice thereof to the Lenders. The
Agent shall (subject to Section 10.2 hereof) take such action with respect to
such Default or Event of Default as shall reasonably be directed by the Required
Lenders, provided that, unless and until the Agent shall have received such
directions, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interest of the Lenders.
10.4 RIGHTS AS A LENDER.
With respect to its Commitment and the Loans made by it, NationsBank
(and any successor acting as Agent) in its capacity as a Lender hereunder shall
have the same rights and powers hereunder as any other Lender and may exercise
the same as though it were not acting as the Agent, and the term "Lender" or
"Lenders" shall, unless the context otherwise indicates, include the Agent in
its individual capacity. NationsBank (and any successor acting as Agent) and its
Affiliates may (without having to account therefor to any Lender) accept
deposits from, lend money to, make investments in, provide services to, and
generally engage in any kind of lending, trust, or other business with any
Credit Party or any of its Subsidiaries or Affiliates as if it were not acting
as Agent, and NationsBank (and any successor acting as Agent) and its Affiliates
may accept fees and other consideration from any Credit Party or any of its
Subsidiaries or Affiliates for services in connection with this Credit Agreement
or otherwise without having to account for the same to the Lenders.
80
98
10.5 INDEMNIFICATION.
The Lenders agree to indemnify the Agent (to the extent not reimbursed
under Section 11.5 hereof, but without limiting the obligations of the Credit
Parties under such Section) ratably in accordance with their respective
Commitments, for any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses (including attorneys'
fees), or disbursements of any kind and nature whatsoever that may be imposed
on, incurred by or asserted against the Agent (including by any Lender) in any
way relating to or arising out of any Credit Document or the transactions
contemplated thereby or any action taken or omitted by the Agent under any
Credit Document (including any of the foregoing arising from the negligence of
the Agent); provided that no Lender shall be liable for any of the foregoing to
the extent they arise from the gross negligence or willful misconduct of the
Person to be indemnified. Without limitation of the foregoing, each Lender
agrees to reimburse the Agent promptly upon demand for its ratable share of any
costs or expenses payable by the Credit Parties under Section 11.5, to the
extent that the Agent is not promptly reimbursed for such costs and expenses by
the Credit Parties. The agreements in this Section 10.5 shall survive the
repayment of the Loans, LOC Obligations and other obligations under the Credit
Documents and the termination of the Commitments hereunder.
10.6 NON-RELIANCE ON AGENT AND OTHER LENDERS.
Each Lender agrees that it has, independently and without reliance on
the Agent or any other Lender, and based on such documents and information as it
has deemed appropriate, made its own credit analysis of the Credit Parties and
their Subsidiaries and decision to enter into this Credit Agreement and that it
will, independently and without reliance upon the Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own analysis and decisions in taking or not taking
action under the Credit Documents. Except for notices, reports, and other
documents and information expressly required to be furnished to the Lenders by
the Agent hereunder, the Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the affairs,
financial condition, or business of any Credit Party or any of its Subsidiaries
or Affiliates that may come into the possession of the Agent or any of its
Affiliates.
10.7 SUCCESSOR AGENT.
The Agent may resign at any time by giving notice thereof to the
Lenders and the Credit Parties. Upon any such resignation, the Required Lenders
shall have the right to appoint a successor Agent. If no successor Agent shall
have been so appointed by the Required Lenders and shall have accepted such
appointment within thirty (30) days after the retiring Agent's giving of notice
of resignation, then the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent which shall be a commercial bank organized under the laws of the
United States of America having combined capital and surplus of at least
$100,000,000. Upon the acceptance of any appointment as Agent hereunder by a
successor, such successor shall thereupon succeed to and become vested with all
the rights, powers, discretion, privileges, and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder.
81
99
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Section 10 shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as Agent.
SECTION 11
MISCELLANEOUS
11.1 NOTICES.
Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (a) when
delivered, (b) when transmitted via telecopy (or other facsimile device) to the
number set out below, (c) the Business Day following the day on which the same
has been delivered prepaid to a reputable national overnight air courier
service, or (d) the third Business Day following the day on which the same is
sent by certified or registered mail, postage prepaid, in each case to the
respective parties at the address, in the case of the Credit Parties and the
Agent, set forth below, and, in the case of the Lenders, set forth on Schedule
2.1(a), or at such other address as such party may specify by written notice to
the other parties hereto:
if to any Credit Party:
The Profit Recovery Group International, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
The Profit Recovery Group International, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
82
100
if to the Agent:
NationsBank, N. A.
Independence Center, 15th Floor
NC1-001-15-04
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Agency Services
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
NationsBank, N. A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
11.2 RIGHT OF SET-OFF; ADJUSTMENTS.
Upon the occurrence and during the continuance of any Event of Default,
each Lender (and each of its Affiliates) is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender (or any
of its Affiliates) to or for the credit or the account of any Credit Party
against any and all of the obligations of such Person now or hereafter existing
under this Credit Agreement, under the Notes, under any other Credit Document or
otherwise, irrespective of whether such Lender shall have made any demand under
hereunder or thereunder and although such obligations may be unmatured. Each
Lender agrees promptly to notify any affected Credit Party after any such
set-off and application made by such Lender; provided, however, that the failure
to give such notice shall not affect the validity of such set-off and
application. The rights of each Lender under this Section 11.2 are in addition
to other rights and remedies (including, without limitation, other rights of
set-off) that such Lender may have.
11.3 BENEFIT OF AGREEMENT.
(a) This Credit Agreement shall be binding upon and inure to
the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; provided that none of the Credit Parties
may assign or transfer any of its interests and obligations without
prior written consent of the Lenders; provided further that the rights
of each Lender to transfer, assign or grant participations in its
rights and/or obligations hereunder shall be limited as set forth in
this Section 11.3.
83
101
(b) Each Lender may assign to one or more Eligible Assignees
all or a portion of its rights and obligations under this Credit
Agreement (including, without limitation, all or a portion of its
Loans, its Notes, and its Commitment); provided, however, that
(i) each such assignment shall be to an Eligible
Assignee;
(ii) except in the case of an assignment to another
Lender or an assignment of all of a Lender's rights and
obligations under this Credit Agreement, any such partial
assignment shall be in an amount at least equal to $5,000,000
(or, if less, the remaining amount of the Commitment being
assigned by such Lender) or an integral multiple of $1,000,000
in excess thereof;
(iii) each such assignment by a Lender shall be of a
constant, and not varying, percentage of all of its rights and
obligations under this Credit Agreement and the Notes; and
(iv) the parties to such assignment shall execute and
deliver to the Agent for its acceptance an Assignment and
Acceptance in the form of Exhibit 11.3(b) hereto, together
with any Note subject to such assignment and a processing fee
of $3,500.
Upon execution, delivery, and acceptance of such Assignment and
Acceptance, the assignee thereunder shall be a party hereto and, to the
extent of such assignment, have the obligations, rights, and benefits
of a Lender hereunder and the assigning Lender shall, to the extent of
such assignment, relinquish its rights and be released from its
obligations under this Credit Agreement. Upon the consummation of any
assignment pursuant to this Section 11.3(b), the assignor, the Agent
and the Credit Parties shall make appropriate arrangements so that, if
required, new Notes are issued to the assignor and the assignee. If the
assignee is not a United States person under Section 7701(a)(30) of the
Code, it shall deliver to the Credit Parties and the Agent
certification as to exemption from deduction or withholding of Taxes in
accordance with Section 3.11.
(c) The Agent shall maintain at its address referred to in
Section 11.1 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and
addresses of the Lenders and the Commitment of, and principal amount of
the Loans owing to, each Lender from time to time (the "Register"). The
entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Credit Parties, the Agent and
the Lenders may treat each Person whose name is recorded in the
Register as a Lender hereunder for all purposes of this Credit
Agreement. The Register shall be available for inspection by the Credit
Parties or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed
by the parties thereto, together with any Note subject to such
assignment and payment of the processing fee, the Agent shall, if such
Assignment and Acceptance has been completed and is in substantially
the form of Exhibit 11.3(b) hereto, (i) accept such Assignment and
84
102
Acceptance, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the parties thereto.
(e) Each Lender may sell participations to one or more Persons
in all or a portion of its rights, obligations or rights and
obligations under this Credit Agreement (including all or a portion of
its Commitment or its Loans); provided, however, that (i) such Lender's
obligations under this Credit Agreement shall remain unchanged, (ii)
such Lender shall remain solely responsible to the other parties hereto
for the performance of such obligations, (iii) the participant shall be
entitled to the benefit of the yield protection provisions contained in
Sections 3.7 through 3.12, inclusive, and the right of set-off
contained in Section 11.2, and (iv) the Credit Parties shall continue
to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Credit Agreement, and such
Lender shall retain the sole right to enforce the obligations of the
Credit Parties relating to the Credit Party Obligations owing to such
Lender and to approve any amendment, modification, or waiver of any
provision of this Credit Agreement (other than amendments,
modifications, or waivers decreasing the amount of principal of or the
rate at which interest is payable on such Loans or Notes, extending any
scheduled principal payment date or date fixed for the payment of
interest on such Loans or Notes, or extending its Commitment).
(f) Notwithstanding any other provision set forth in this
Credit Agreement, any Lender may at any time assign and pledge all or
any portion of its Loans and its Notes to any Federal Reserve Bank as
collateral security pursuant to Regulation A and any Operating Circular
issued by such Federal Reserve Bank. No such assignment shall release
the assigning Lender from its obligations hereunder.
(g) Any Lender may furnish any information concerning the
Consolidated Parties in the possession of such Lender from time to time
to assignees and participants (including prospective assignees and
participants), subject, however, to the provisions of Section 11.14
hereof.
11.4 NO WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of the Agent or any Lender in
exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between the Agent or any Lender and any of the
Credit Parties shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder or under any other
Credit Document preclude any other or further exercise thereof or the exercise
of any other right, power or privilege hereunder or thereunder. The rights and
remedies provided herein are cumulative and not exclusive of any rights or
remedies which the Agent or any Lender would otherwise have. No notice to or
demand on any Credit Party in any case shall entitle the Credit Parties to any
other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Agent or the Lenders to any other or
further action in any circumstances without notice or demand.
85
103
11.5 EXPENSES; INDEMNIFICATION.
(a) The Credit Parties jointly and severally agree to pay on demand all
reasonable costs and expenses of the Agent in connection with the syndication,
preparation, execution, delivery, administration, modification, and amendment of
this Credit Agreement, the other Credit Documents, and the other documents to be
delivered hereunder, including, without limitation, the reasonable fees and
expenses of counsel for the Agent with respect thereto and with respect to
advising the Agent as to its rights and responsibilities under the Credit
Documents. The Credit Parties further jointly and severally agree to pay on
demand all reasonable costs and expenses of the Agent and the Lenders, if any
(including, without limitation, reasonable attorneys' fees and expenses and the
cost of internal counsel), in connection with the enforcement (whether through
negotiations, legal proceedings, or otherwise) of the Credit Documents and the
other documents to be delivered hereunder.
(b) The Credit Parties jointly and severally agree to indemnify and
hold harmless the Agent and each Lender and each of their Affiliates and their
respective officers, directors, employees, agents, and advisors (each, an
"Indemnified Party") from and against any and all claims, damages, losses,
liabilities, costs, and expenses (including, without limitation, reasonable
attorneys' fees) that may be incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection with or by
reason of (including, without limitation, in connection with any investigation,
litigation, or proceeding or preparation of defense in connection therewith) the
Credit Documents, any of the transactions contemplated herein or the actual or
proposed use of the proceeds of the Loans (including any of the foregoing
arising from the negligence of the Indemnified Party), except to the extent such
claim, damage, loss, liability, cost, or expense is found in a final,
non-appealable judgment by a court of competent jurisdiction to have resulted
from such Indemnified Party's gross negligence or willful misconduct. In the
case of an investigation, litigation or other proceeding to which the indemnity
in this Section 11.5 applies, such indemnity shall be effective whether or not
such investigation, litigation or proceeding is brought by any of the Credit
Parties, their respective directors, shareholders or creditors or an Indemnified
Party or any other Person or any Indemnified Party is otherwise a party thereto.
The Credit Parties agree not to assert any claim against the Agent, any Lender,
any of their Affiliates, or any of their respective directors, officers,
employees, attorneys, agents, and advisers, on any theory of liability, for
special, indirect, consequential, or punitive damages arising out of or
otherwise relating to the Credit Documents, any of the transactions contemplated
herein or the actual or proposed use of the proceeds of the Loans.
(c) Without prejudice to the survival of any other agreement of the
Credit Parties hereunder, the agreements and obligations of the Credit Parties
contained in this Section 11.5 shall survive the repayment of the Loans, LOC
Obligations and other obligations under the Credit Documents and the termination
of the Commitments hereunder.
11.6 AMENDMENTS, WAIVERS AND CONSENTS.
Neither this Credit Agreement nor any other Credit Document nor any of
the terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment,
86
104
change, waiver, discharge or termination is in writing entered into by, or
approved in writing by, the Required Lenders and the Borrower, provided,
however, that:
(i) without the consent of each Lender affected thereby,
neither this Credit Agreement nor any other Credit Document may be
amended to
(a) extend the final maturity of any Loan or of any
reimbursement obligation, or any portion thereof, arising from
drawings under Letters of Credit,
(b) reduce the rate or extend the time of payment of
interest (other than as a result of waiving the applicability
of any post-default increase in interest rates) thereon or
Fees hereunder,
(c) reduce or waive the principal amount of any Loan or
of any reimbursement obligation, or any portion thereof,
arising from drawings under Letters of Credit,
(d) increase the Commitment of a Lender over the amount
thereof in effect (it being understood and agreed that a
waiver of any Default or Event of Default or mandatory
reduction in the Commitments shall not constitute a change in
the terms of any Commitment of any Lender),
(e) release the Borrower or substantially all of the
other Credit Parties from its or their obligations under the
Credit Documents,
(f) amend, modify or waive any provision of this Section
11.6 or Section 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13,
3.14, 3.15, 9.1(a), 11.2, 11.3, 11.5 or 11.9,
(g) reduce any percentage specified in, or otherwise
modify, the definition of Required Lenders, or
(h) consent to the assignment or transfer by the
Borrower or all or substantially all of the other Credit
Parties of any of its or their rights and obligations under
(or in respect of) the Credit Documents except as permitted
thereby;
(ii) without the consent of the Agent, no provision of Section
10 may be amended; and
(iii) without the consent of the Issuing Lender, no provision
of Section 2.2 may be amended, and without the consent of the Swingline
Lender, no provision of Section 2.4 may be amended.
Notwithstanding the fact that the consent of all the Lenders is
required in certain circumstances as set forth above, (x) each Lender
is entitled to vote as such Lender sees fit
87
105
on any bankruptcy reorganization plan that affects the Loans, and each
Lender acknowledges that the provisions of Section 1126(c) of the
Bankruptcy Code supersedes the unanimous consent provisions set forth
herein and (y) the Required Lenders may consent to allow a Credit Party
to use cash collateral in the context of a bankruptcy or insolvency
proceeding.
11.7 COUNTERPARTS.
This Credit Agreement may be executed in any number of counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall constitute one and the same instrument. It shall not be necessary in
making proof of this Credit Agreement to produce or account for more than one
such counterpart for each of the parties hereto. Delivery by facsimile by any of
the parties hereto of an executed counterpart of this Credit Agreement shall be
as effective as an original executed counterpart hereof and shall be deemed a
representation that an original executed counterpart hereof will be delivered.
11.8 HEADINGS.
The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Credit Agreement.
11.9 SURVIVAL.
All indemnities set forth herein, including, without limitation, in
Section 2.2(i), 3.11, 3.12, 10.5 or 11.5 shall survive the execution and
delivery of this Credit Agreement, the making of the Loans, the issuance of the
Letters of Credit, the repayment of the Loans, LOC Obligations and other
obligations under the Credit Documents and the termination of the Commitments
hereunder, and all representations and warranties made by the Credit Parties
herein shall survive delivery of the Notes and the making of the Loans
hereunder.
11.10 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE.
(a) THIS CREDIT AGREEMENT AND, UNLESS OTHERWISE EXPRESSLY
PROVIDED THEREIN, THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED
BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF GEORGIA. Any legal action or proceeding with respect to this
Credit Agreement or any other Credit Document may be brought in the
courts of the State of Georgia, or of the United States for the
Northern District of Georgia, Atlanta Division, and, by execution and
delivery of this Credit Agreement, each of the Credit Parties hereby
irrevocably accepts for itself and in respect of its property,
generally and unconditionally, the nonexclusive jurisdiction of such
courts. Each of the Credit Parties further irrevocably consents to the
service of process out of any of the aforementioned courts in any such
action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to it at the address set out for
notices pursuant to Section 11.1, such service to become effective
three
88
106
(3) days after such mailing. Nothing herein shall affect the right of
the Agent or any Lender to serve process in any other manner permitted
by law or to commence legal proceedings or to otherwise proceed against
any Credit Party in any other jurisdiction.
(b) Each of the Credit Parties hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of
any of the aforesaid actions or proceedings arising out of or in
connection with this Credit Agreement or any other Credit Document
brought in the courts referred to in subsection (a) above and hereby
further irrevocably waives and agrees not to plead or claim in any such
court that any such action or proceeding brought in any such court has
been brought in an inconvenient forum.
(c) TO THE EXTENT PERMITTED BY LAW, EACH OF THE AGENT, THE
LENDERS, EACH OF THE CREDIT PARTIES HEREBY IRREVOCABLY WAIVES ALL RIGHT
TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER CREDIT
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY.
11.11 SEVERABILITY.
If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
11.12 ENTIRETY.
This Credit Agreement together with the other Credit Documents
represent the entire agreement of the parties hereto and thereto, and supersede
all prior agreements and understandings, oral or written, if any, including any
commitment letters or correspondence relating to the Credit Documents or the
transactions contemplated herein and therein.
11.13 BINDING EFFECT; TERMINATION.
(a) This Credit Agreement shall become effective at such time
when all of the conditions set forth in Section 5.1 have been satisfied
or waived by the Lenders and it shall have been executed by each Credit
Party and the Agent, and the Agent shall have received copies hereof
(telefaxed or otherwise) which, when taken together, bear the
signatures of each Lender, and thereafter this Credit Agreement shall
be binding upon and inure to the benefit of each Credit Party, the
Agent and each Lender and their respective successors and assigns.
(b) The term of this Credit Agreement shall be until no Loans,
LOC Obligations or any other amounts payable hereunder or under any of
the other Credit Documents shall remain outstanding, no Letters of
Credit shall be outstanding, all of the Credit Party
89
107
Obligations have been irrevocably satisfied in full and all of the
Commitments hereunder shall have expired or been terminated.
11.14 CONFIDENTIALITY.
The Agent and each Lender (each, a "Lending Party") agrees to keep
confidential (and to cause their respective Affiliates, officers, directors,
employees, agents and representatives to keep confidential) any information
furnished or made available to it by the Credit Parties pursuant to this Credit
Agreement that is marked confidential; provided that nothing herein shall
prevent any Lending Party from disclosing such information (a) to any other
Lending Party or any Affiliate of any Lending Party, or any officer, director,
employee, agent, or advisor of any Lending Party or Affiliate of any Lending
Party, (b) as required by any law, rule, or regulation, (c) upon the order of
any court or administrative agency, (d) upon the request or demand of any
regulatory agency or authority, (e) that is or becomes available to the public
or that is or becomes available to any Lending Party other than as a result of a
disclosure by any Lending Party prohibited by this Credit Agreement, (f) to the
extent necessary in connection with any litigation to which such Lending Party
or any of its Affiliates may be a party, (g) to the extent necessary in
connection with the exercise of any remedy under this Credit Agreement or any
other Credit Document, and (h) subject to provisions substantially similar to
those contained in this Section 11.14, to any actual or proposed participant or
assignee. The provisions of this Section 11.14 shall survive the termination of
this Credit Agreement.
11.15 USE OF SOURCES
Each of the Lenders hereby represents and warrants to the Borrower that
at least one of the following statements is an accurate representation as to the
source of funds to be used by such Lender in connection with the financing
hereunder:
(a) no part of such funds constitutes assets allocated to any
separate account maintained by such Lender in which any employee
benefit plan (or its related trust) has any interest;
(b) to the extent that any part of such funds constitutes
assets allocated to any separate account maintained by such Lender,
such Lender has disclosed to the Borrower the name of each employee
benefit plan whose assets in such account exceed 10% of the total
assets of such account as of the date of such purchase (and, for
purposes of this subsection (b), all employee benefit plans maintained
by the same employer or employee organization are deemed to be a single
plan);
(c) to the extent that any part of such funds constitutes
assets of an insurance company's general account, such insurance
company has complied with all of the requirements of the regulations
issued under Section 401(c)(1)(A) of ERISA; or
(d) such funds constitute assets of one or more specific
benefit plans which such Lender has identified in writing to the
Borrower.
90
108
As used in this Section 11.15, the terms "employee benefit plan" and "separate
account" shall have the respective meanings assigned to such terms in Section 3
of ERISA.
11.16 CONFLICT.
To the extent that there is a conflict or inconsistency between any
provision hereof, on the one hand, and any provision of any Credit Document, on
the other hand, this Credit Agreement shall control.
[Signature Page to Follow]
91
109
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Credit Agreement to be duly executed and delivered as of the date first
above written.
BORROWER: THE PROFIT RECOVERY GROUP
INTERNATIONAL, INC.,
a Georgia corporation
By:
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: S.V.P., C.F.O. and Treas.
SUBSIDIARY
GUARANTORS: THE PROFIT RECOVERY GROUP
INTERNATIONAL I, INC.,
a Georgia corporation
By:
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: S.V.P., C.F.O. and Treas.
THE PROFIT RECOVERY GROUP U.K., INC.,
a Georgia corporation
By:
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: S.V.P., C.F.O. and Treas.
THE PROFIT RECOVERY GROUP ASIA,
INC., a Georgia corporation
By:
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: S.V.P., C.F.O. and Treas.
THE PROFIT RECOVERY GROUP CANADA,
INC., a Georgia corporation
By:
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: S.V.P., C.F.O. and Treas.
[Signatures Continue]
110
THE PROFIT RECOVERY GROUP NEW
ZEALAND, INC., a Georgia corporation
By:
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: S.V.P., C.F.O. and Treas.
THE PROFIT RECOVERY GROUP
NETHERLANDS, INC., a Georgia corporation
By:
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: S.V.P., C.F.O. and Treas.
THE PROFIT RECOVERY GROUP BELGIUM,
INC., a Georgia corporation
By:
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: S.V.P., C.F.O. and Treas.
THE PROFIT RECOVERY GROUP MEXICO,
INC., a Georgia corporation
By:
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: S.V.P., C.F.O. and Treas.
THE PROFIT RECOVERY GROUP FRANCE,
INC., a Georgia corporation
By:
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: S.V.P., C.F.O. and Treas.
[Signatures Continue]
111
THE PROFIT RECOVERY GROUP
AUSTRALIA, INC., a Georgia corporation
By:
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: S.V.P., C.F.O. and Treas.
THE PROFIT RECOVERY GROUP
GERMANY, INC., a Georgia corporation
By:
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: S.V.P., C.F.O. and Treas.
PRG INTERNATIONAL HOLDING
COMPANY, INC., a Georgia corporation
By:
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: S.V.P., C.F.O. and Treas.
THE PROFIT RECOVERY GROUP
SWITZERLAND, INC., a Georgia corporation
By:
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: S.V.P., C.F.O. and Treas.
THE PROFIT RECOVERY GROUP SOUTH
AFRICA, INC., a Georgia corporation
By:
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: S.V.P., C.F.O. and Treas.
112
LENDERS: NATIONSBANK, N. A.,
individually in its capacity as a
Lender and in its capacity as Agent
By:
----------------------------------------
Name:
----------------------------------------
Title:
----------------------------------------