CREDIT AGREEMENT
Dated as of June 25, 1998
among
PRODELIN HOLDING CORPORATION
as Borrower,
AND
CERTAIN SUBSIDIARIES OF THE BORROWER
FROM TIME TO TIME PARTY HERETO,
as Guarantors,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTY HERETO
AND
FIRST UNION NATIONAL BANK,
as Agent
TABLE OF CONTENTS
SECTION 1 DEFINITIONS ...........................................................................................1
1.1 DEFINITIONS .........................................................................................1
1.2 COMPUTATION OF TIME PERIODS..........................................................................26
1.3 ACCOUNTING TERMS ....................................................................................26
SECTION 2 CREDIT FACILITIES .....................................................................................26
2.1 REVOLVING LOANS .....................................................................................26
2.2 LETTER OF CREDIT SUBFACILITY.........................................................................28
2.3 SWINGLINE LOANS .....................................................................................33
2.4 TRANCHE A TERM LOAN..................................................................................35
2.5 TRANCHE B TERM LOAN..................................................................................36
SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES.........................................................39
3.1 DEFAULT RATE ........................................................................................39
3.2 BORROWINGS; EXTENSION AND CONVERSION.................................................................39
3.3 PREPAYMENTS .........................................................................................41
3.4 TERMINATION AND REDUCTION OF REVOLVING COMMITTED AMOUNT..............................................43
3.5 FEES ................................................................................................43
3.6 CAPITAL ADEQUACY ....................................................................................44
3.7 LIMITATION ON EURODOLLAR LOANS.......................................................................45
3.8 ILLEGALITY ..........................................................................................45
3.9 REQUIREMENTS OF LAW..................................................................................45
3.10 TREATMENT OF AFFECTED LOANS.........................................................................46
3.11 TAXES ..............................................................................................47
3.12 COMPENSATION .......................................................................................49
3.13 PRO RATA TREATMENT..................................................................................50
3.14 SHARING OF PAYMENTS.................................................................................51
3.15 PAYMENTS, COMPUTATIONS, ETC.........................................................................51
3.16 EVIDENCE OF DEBT....................................................................................53
SECTION 4 GUARANTY ..............................................................................................54
4.1 THE GUARANTY ........................................................................................54
4.2 OBLIGATIONS UNCONDITIONAL............................................................................55
4.3 REINSTATEMENT .......................................................................................56
4.4 CERTAIN ADDITIONAL WAIVERS...........................................................................56
4.5 REMEDIES ............................................................................................56
4.6 RIGHTS OF CONTRIBUTION...............................................................................56
4.7 CONTINUING GUARANTEE.................................................................................58
SECTION 5 CONDITIONS ............................................................................................58
5.1 CLOSING CONDITIONS...................................................................................58
5.2 CONDITIONS TO ALL EXTENSIONS OF CREDIT...............................................................64
SECTION 6 REPRESENTATIONS AND WARRANTIES.........................................................................65
6.1 FINANCIAL CONDITION..................................................................................65
i
6.2 NO MATERIAL CHANGE...................................................................................66
6.3 ORGANIZATION AND GOOD STANDING.......................................................................66
6.4 POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS........................................................66
6.5 NO CONFLICTS ........................................................................................67
6.6 NO DEFAULT ..........................................................................................67
6.7 OWNERSHIP ...........................................................................................67
6.8 LITIGATION ..........................................................................................68
6.9 TAXES ...............................................................................................68
6.10 COMPLIANCE WITH LAW.................................................................................68
6.11 ERISA ..............................................................................................68
6.12 SUBSIDIARIES .......................................................................................69
6.13 GOVERNMENTAL REGULATIONS, ETC.......................................................................70
6.14 PURPOSE OF LOANS AND LETTERS OF CREDIT..............................................................71
6.15 ENVIRONMENTAL MATTERS...............................................................................71
6.16 INTELLECTUAL PROPERTY...............................................................................72
6.17 SOLVENCY ...........................................................................................72
6.18 INVESTMENTS ........................................................................................72
6.19 LOCATION OF COLLATERAL..............................................................................72
6.20 DISCLOSURE .........................................................................................73
6.21 NO BURDENSOME RESTRICTIONS..........................................................................73
6.22 LABOR MATTERS ......................................................................................73
6.23 NATURE OF BUSINESS..................................................................................73
6.24 REPRESENTATIONS AND WARRANTIES FROM PURCHASE AGREEMENT..............................................73
6.25 YEAR 2000 COMPLIANCE................................................................................73
SECTION 7 AFFIRMATIVE COVENANTS..................................................................................74
7.1 INFORMATION COVENANTS................................................................................74
7.2 PRESERVATION OF EXISTENCE AND FRANCHISES.............................................................78
7.3 BOOKS AND RECORDS....................................................................................78
7.4 COMPLIANCE WITH LAW..................................................................................78
7.5 PAYMENT OF TAXES AND OTHER INDEBTEDNESS..............................................................78
7.6 INSURANCE ...........................................................................................78
7.7 MAINTENANCE OF PROPERTY..............................................................................79
7.8 PERFORMANCE OF OBLIGATIONS...........................................................................80
7.9 USE OF PROCEEDS .....................................................................................80
7.10 AUDITS/INSPECTIONS..................................................................................80
7.11 FINANCIAL COVENANTS.................................................................................80
7.12 ADDITIONAL CREDIT PARTIES...........................................................................82
7.13 PLEDGED ASSETS .....................................................................................82
7.14 YEAR 2000 COMPLIANCE................................................................................83
7.15 ANNUAL MEETING......................................................................................83
7.16 NAME CHANGE DOCUMENTATION...........................................................................84
7.17 IRB FACILITY. ....................................................................................84
7.18 NORTH CAROLINA SURVEY...............................................................................84
7.19 INTEREST RATE PROTECTION............................................................................84
SECTION 8 NEGATIVE COVENANTS ....................................................................................84
8.1 INDEBTEDNESS ........................................................................................85
ii
8.2 LIENS ...............................................................................................86
8.3 NATURE OF BUSINESS...................................................................................86
8.4 CONSOLIDATION, MERGER, DISSOLUTION, ETC..............................................................86
8.5 ASSET DISPOSITIONS...................................................................................87
8.6 INVESTMENTS .........................................................................................88
8.7 RESTRICTED PAYMENTS..................................................................................88
8.8 PREPAYMENTS OF INDEBTEDNESS, ETC.....................................................................88
8.9 TRANSACTIONS WITH AFFILIATES.........................................................................89
8.10 FISCAL YEAR; ORGANIZATIONAL DOCUMENTS...............................................................89
8.11 LIMITATION ON RESTRICTED ACTIONS....................................................................89
8.12 OWNERSHIP OF SUBSIDIARIES...........................................................................90
8.13 SALE LEASEBACKS ....................................................................................90
8.14 NO FURTHER NEGATIVE PLEDGES.........................................................................90
SECTION 9 EVENTS OF DEFAULT .....................................................................................91
9.1 EVENTS OF DEFAULT....................................................................................91
9.2 ACCELERATION; REMEDIES...............................................................................94
SECTION 10 AGENCY PROVISIONS ....................................................................................95
10.1 APPOINTMENT, POWERS AND IMMUNITIES..................................................................95
10.2 RELIANCE BY AGENT...................................................................................95
10.3 DEFAULTS ...........................................................................................96
10.4 RIGHTS AS A LENDER..................................................................................96
10.5 INDEMNIFICATION ....................................................................................96
10.6 NON-RELIANCE ON AGENT AND OTHER LENDERS.............................................................97
10.7 SUCCESSOR AGENT ....................................................................................97
SECTION 11 MISCELLANEOUS ........................................................................................98
11.1 NOTICES ............................................................................................98
11.2 RIGHT OF SET-OFF; ADJUSTMENTS.......................................................................99
11.3 BENEFIT OF AGREEMENT................................................................................99
11.4 NO WAIVER; REMEDIES CUMULATIVE......................................................................101
11.5 EXPENSES; INDEMNIFICATION...........................................................................101
11.6 AMENDMENTS, WAIVERS AND CONSENTS....................................................................102
11.7 COUNTERPARTS .......................................................................................104
11.8 HEADINGS ...........................................................................................104
11.9 SURVIVAL ...........................................................................................104
11.10 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE...................................................104
11.11 SEVERABILITY ......................................................................................105
11.12 ENTIRETY ..........................................................................................105
11.13 BINDING EFFECT; TERMINATION........................................................................105
11.14 SOURCE OF FUNDS....................................................................................106
11.15 CONFLICT ..........................................................................................106
11.16 CONFIDENTIALITY....................................................................................106
11.17 ARBITRATION; CONSENT TO JURISDICTION AND SERVICE OF PROCESS........................................107
iii
SCHEDULES
Schedule 1.1A Investments
Schedule 1.1B Liens
Schedule 2.1(a) Lenders
Schedule 5.1(j) Corporate Structure
Schedule 6.1 Modifications to GAAP
Schedule 6.2 Material Change
Schedule 6.4 Required Consents, Authorizations, Notices
and Filings
Schedule 6.8 Litigation
Schedule 6.12 Subsidiaries
Schedule 6.16 Intellectual Property
Schedule 6.19(a) Mortgaged Properties
Schedule 6.19(b) Collateral Locations
Schedule 6.19(c) Chief Executive Offices/Principal Places
of Business
Schedule 7.6 Insurance
Schedule 8.1 Indebtedness
Schedule 8.9 Transactions with Affiliates
Schedule 8.11 Restricted Actions
EXHIBITS
Exhibit 1.1A Form of Pledge Agreement
Exhibit 1.1B Form of Security Agreement
Exhibit 2.1(e) Form of Revolving Note
Exhibit 2.3(d) Form of Swingline Note
Exhibit 2.4(e) Form of Tranche A Term Note
Exhibit 2.5(e) Form of Tranche B Term Note
Exhibit 3.2(a)(i) Form of Notice of Borrowing
Exhibit 3.2(a)(iii) Form of Notice of Account Designation
Exhibit 3.2(b) Form of Notice of Extension/Conversion
Exhibit 7.1(d) Form of Officer's Compliance Certificate
Exhibit 7.12 Form of Joinder Agreement
Exhibit 11.3(b) Form of Assignment and Acceptance
iv
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of June 25, 1998 (as amended, modified,
restated or supplemented from time to time, the "CREDIT AGREEMENT"), is by and
among PRODELIN HOLDING CORPORATION, a Delaware corporation (the "BORROWER"), the
Guarantors (as defined herein), the Lenders (as defined herein) and FIRST UNION
NATIONAL BANK, as Agent for the Lenders (in such capacity, the "AGENT").
W I T N E S S E T H
WHEREAS, the Borrower has requested that the Lenders provide a
$160,000,000 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 are 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:
"ACQUIRED COMPANY" means Comsat RSI, Inc., a Delaware
corporation.
"ACQUISITION" means the acquisition by any 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
Guarantor after the Closing Date by execution of a Joinder Agreement.
"ADJUSTED BASE RATE" means the Base Rate PLUS the Applicable
Percentage.
"ADJUSTED EURODOLLAR RATE" means the Eurodollar 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
1
equity interest in such Person. For purposes of this definition,
"control" when used with respect to any Person means the power to
direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled"
have meanings correlative to the foregoing.
"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 April 21, 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 Eurodollar Loans are made and
maintained.
"APPLICABLE PERCENTAGE" means, for purposes of calculating the
applicable interest rate for any day for any Revolving Loan, any
Tranche A Term Loan or any Tranche B Term Loan, the applicable rate of
the Commitment Fee for any day for purposes of Section 3.5(a), and the
applicable rate of the Letter of Credit Fee for any day for purposes of
Section 3.5(b)(i), the appropriate applicable percentage corresponding
to the Leverage Ratio in effect as of the most recent Calculation Date:
APPLICABLE
APPLICABLE APPLICABLE APPLICABLE PERCENTAGE
PERCENTAGE FOR PERCENTAGE FOR PERCENTAGE FOR FOR TRANCHE
REVOLVING LOANS AND REVOLVING LOANS AND TRANCHE B TERM B TERM LOANS
TRANCHE A TERM TRANCHE A TERM LOANS WHICH WHICH ARE
PRICING LEVERAGE LOANS WHICH ARE LOANS WHICH ARE ARE EURODOLLAR BASE RATE
LEVEL RATIO EURODOLLAR LOANS BASE RATE LOANS LOANS LOANS
--------- ---------------------- --------------------- --------------------- ---------------- --------------
I GREATER THAN 5.0 to 1.0 2.50% 1.25% 3.00% 1.75%
II LESS THAN 5.0 to 1.0 but
GREATER THAN 4.5 to 1.0 2.25% 1.00% 2.75% 1.50%
III LESS THAN 4.5 to 1.0 but
GREATER THAN 3.75 to 1.0 2.00% .75% 2.50% 1.25%
IV LESS THAN 3.75 to 1.0 but
GREATER THAN 3.25 to 1.0 1.50% .25% 2.50% 1.25%
V LESS THAN 3.25 to 1.0 but
GREATER THAN 2.75 to 1.0 1.25% 0% 2.25% 1.00%
VI LESS THAN 2.75 to 1.0 1.00% 0% 2.00% .75%
========= ====================== ===================== ===================== ================ ==============
APPLICABLE
APPLICABLE PERCENTAGE
PERCENTAGE FOR
PRICING LEVERAGE FOR LETTER COMMITMENT
LEVEL RATIO OF CREDIT FEE FEES
--------- ------------------------- -------------- -------------
I GREATER THAN 5.0 to 1.0 2.50% .50%
II LESS THAN 5.0 to 1.0 but
GREATER THAN 4.5 to 1.0 2.25% .50%
III LESS THAN 4.5 to 1.0 but
GREATER THAN 3.75 to 1.0 2.00% .375%
IV LESS THAN 3.75 to 1.0 but
GREATER THAN 3.25 to 1.0 1.50% .375%
V LESS THAN 3.25 to 1.0 but
GREATER THAN 2.75 to 1.0 1.25% .25%
VI LESS THAN 2.75 to 1.0 1.00% .25%
========= ========================= ============== =============
The Applicable Percentages shall be determined and adjusted quarterly
on the date (each a "CALCULATION DATE") five Business Days after
receipt by the Agent of the officer's certificate in accordance with
the provisions of Section 7.1(c) for the most recently ended fiscal
quarter
2
of the Consolidated Parties the first of which to occur on August 31,
1998; PROVIDED, HOWEVER, that (i) the initial Applicable Percentages
shall be based on Pricing Level I (as shown above) and shall remain at
Pricing Level I until the first Calculation Date subsequent to the
Closing Date and, thereafter, the Pricing Level 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 Agent 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 I until such time as an appropriate officer's certificate
is provided, whereupon the Pricing Level 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.
"APPLICATION PERIOD", in respect of any Asset Disposition,
shall have the meaning assigned to such term in Section 8.5.
"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. The term "Asset Disposition" shall not include (i) any
Equity Issuance, (ii) sales of inventory and Cash Equivalents, and
grants of licenses in Intellectual Property, in each case in the
ordinary course of business for fair consideration or (iii) the sale or
disposition of machinery and equipment no longer used or useful in the
conduct of such Person's business.
"ASSET DISPOSITION PREPAYMENT EVENT" means, with respect to
any Asset Disposition other than an Excluded Asset Disposition, the
failure of the Borrower to apply (or cause to be applied) the Net Cash
Proceeds of such Asset Disposition to the purchase, acquisition or
construction of Eligible Assets during the Application Period for such
Asset Disposition.
"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
3
official) of such Person or for any substantial part of its Property or
ordering the winding up or liquidation of its affairs; or (ii) there
shall be commenced against such Person an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter
in effect, or any case, proceeding or other action for the appointment
of a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of such Person or for any substantial part of its
Property or for the winding up or liquidation of its affairs, and such
involuntary case or other case, proceeding or other action shall remain
undismissed, undischarged or unbonded for a period of sixty (60)
consecutive days; or (iii) such Person shall commence a voluntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or consent to the entry of an order for relief in
an involuntary case under any such law, or consent to the appointment
or taking possession by a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of such Person or for any
substantial part of its Property or make any general assignment for the
benefit of creditors; or (iv) such Person shall be unable to, or shall
admit in writing its inability to, pay its debts generally as they
become due.
"BASE RATE" means, for any day, the rate per annum equal to
the higher of (a) the Federal Funds Rate for such day plus one-half of
one percent (.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 New
York, New York are authorized or required by law to close, EXCEPT THAT,
when used in connection with a Eurodollar Loan, such day shall also be
a day on which dealings between banks are carried on in U.S. dollar
deposits in London, England.
"CALCULATION DATE" has the meaning set forth in the definition
of "Applicable Percentage" set forth in this Section 1.1.
"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) and
(iv) in the case of a limited liability company, membership interests.
"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.
4
dollar denominated time deposits and certificates of deposit of (i) any
domestic commercial bank of recognized standing having capital and
surplus in excess of $500,000,000 or (ii) 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 (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 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 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 any Credit Party 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 that TBG Industries, Inc. and/or
Chase Capital Partners and their Affiliates shall own outstanding
shares of Capital Stock representing less than 51% of the Voting Stock
of the Borrower.
"CLOSING DATE" means the date hereof.
"CODE" means the Internal Revenue Code of 1986, as amended,
and any successor statute thereto, as interpreted by the rules and
regulations issued thereunder, in each case as in effect from time to
time. References to sections of the Code shall be construed also to
refer to any successor sections.
"COLLATERAL" means a collective reference to the collateral
which is identified in, and at any time will be covered by, the
Collateral Documents.
"COLLATERAL DOCUMENTS" means a collective reference to the
Security Agreement, the Pledge Agreement, the Mortgage Instruments and
such other documents executed and delivered in connection with the
attachment and perfection of the Agent's security interests and liens
arising thereunder, including without limitation, UCC financing
statements and patent and trademark filings.
"COMMITMENT" means (i) with respect to each Lender, the
Revolving Commitment of such Lender, the Tranche A Term Loan Commitment
of such Lender and the Tranche B Term Loan Commitment of such Lender,
(ii) with respect to the Issuing Lender, the LOC Commitment and (iii)
with respect to the Swingline Lender, the Swingline Commitment.
5
"COMMITMENT FEE" shall have the meaning assigned to such term
in Section 3.5(a).
"COMMITMENT FEE CALCULATION PERIOD" shall have the meaning
assigned to such term in Section 3.5(a).
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, all
capital expenditures (excluding capital expenditures made with proceeds
from Asset Dispositions or proceeds received from casualty or
condemnation recovery events) of the Consolidated Parties on a
consolidated basis for such period, as set forth on a statement of cash
flows of the Consolidated Parties in accordance with GAAP.
"CONSOLIDATED EBITDA" means, for any period, the sum of (i)
Consolidated Net Income (excluding non-recurring, non-duplicative
non-cash items including those associated with the sale of the Divested
Businesses, which amount in connection with such sale shall not in an
aggregate amount on an after-tax basis exceed $4,800,000) 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. For purposes
hereof, Consolidated EBITDA of the Consolidated Parties for the
quarterly period ending November 30, 1997 shall be $7,367,000 and for
the quarterly period ending February 28, 1998, $7,199,000.
"CONSOLIDATED INTEREST EXPENSE" means, for any period,
interest expense (including the amortization of debt discount and
premium, the interest component under Capital Leases and the implied
interest component under Synthetic Leases, but excluding pay-in-kind
interest) of the Consolidated Parties on a consolidated basis for such
period, as determined in accordance with GAAP. For purposes hereof,
Consolidated Interest Expense of the Consolidated Parties for the first
three fiscal quarters to occur after the Closing Date shall be
determined by annualizing the components thereof such that Consolidated
Interest Expense for the first fiscal quarter to occur after the
Closing Date would be multiplied by four (4), the first two (2) fiscal
quarters would be multiplied by two (2) and the first three (3) fiscal
quarters would be multiplied by one and one-third (1 1/3).
"CONSOLIDATED NET INCOME" means, for any period, net income
after taxes for such period of the Consolidated Parties on a
consolidated basis, as determined in accordance with GAAP.
"CONSOLIDATED NET WORTH" means, as of any date, shareholders'
equity 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.
6
"CONSOLIDATED SCHEDULED FUNDED DEBT PAYMENTS" means, as of the
end of each fiscal quarter of the Consolidated Parties, for the
Consolidated Parties on a consolidated basis, the sum of all scheduled
payments of principal on Funded Indebtedness for the applicable period
ending on such date (including the principal component of payments due
on Capital Leases during the applicable period ending on such date); it
being understood that Scheduled Funded Debt Payments shall not include
voluntary prepayments or the mandatory prepayments required pursuant to
Section 3.3.
"CONSOLIDATED WORKING CAPITAL" means, at any time, the excess
of (i) current assets of the Consolidated Parties on a consolidated
basis at such time over (ii) current liabilities of the Consolidated
Parties on a consolidated basis at such time, all as determined in
accordance with GAAP.
"CONTINUE", "CONTINUATION", and "CONTINUED" shall refer to the
continuation pursuant to Section 3.2(b) hereof of a Eurodollar Loan
from one Interest Period to the next Interest Period.
"CONVERT", "CONVERSION", and "CONVERTED" shall refer to a
conversion pursuant to Section 3.2(b) or Sections 3.7 through 3.12,
inclusive, of a Base Rate Loan into a Eurodollar Loan.
"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.
"CREDIT PARTIES" means a collective reference to the Borrower
and the Guarantors, and "CREDIT PARTY" means any one of them.
"CREDIT PARTY OBLIGATIONS" means, without duplication, (i) all
of the obligations of the Credit Parties to the Lenders (including the
Issuing Lender) and the Agent, whenever arising, under this Credit
Agreement, the Notes, the Collateral Documents or any of the other
Credit Documents (including, but not limited to, any interest accruing
after the occurrence of a Bankruptcy Event with respect to any Credit
Party, regardless of whether such interest is an allowed claim under
the Bankruptcy Code) and (ii) all liabilities and obligations, whenever
arising, owing from the Borrower to any Lender, or any Affiliate of a
Lender, arising under any Hedging Agreement.
"DEBARMENT EVENT" means an event or series of events with
respect to which (i) one or more Consolidated Parties are "debarred"
from participation in federal, state or local government contract
programs and (ii) revenues of the Consolidated Parties derived from
such debarred government programs in the prior fiscal year taken as a
whole are equal to or greater than the lesser of (a) 7% of total
revenues of the Consolidated Parties during such period or (b)
$25,000,000.
7
"DEBT ISSUANCE" means the issuance of any Indebtedness for
borrowed money by any Consolidated Party.
"DEFAULT" means any event, act or condition which with notice
or lapse of time, or both, would constitute an Event of Default.
"DEFAULTING LENDER" means, at any time, any Lender that (a)
has failed to make a Loan or purchase a Participation Interest required
pursuant to the term of this Credit Agreement within one Business Day
of when due, (b) other than as set forth in (a) above, has failed to
pay to the Agent or any Lender an amount owed by such Lender pursuant
to the terms of this Credit Agreement within one Business Day of when
due, unless such amount is subject to a good faith dispute or (c) has
been deemed insolvent or has become subject to a bankruptcy or
insolvency proceeding or with respect to which (or with respect to any
of assets of which) a receiver, trustee or similar official has been
appointed.
"DESIGNATED CORPORATIONS" means Comsat RSI, Inc., Comsat RSI
Communications Corp., Comsat RSI Foreign Sales Corporation and Comsat
RSI Maryland Inc.
"DIVESTED BUSINESSES" means the operating assets of the
Acquired Company involved in network systems and precision grinding
technology or the Capital Stock of PG Technology Ltd. (or any
Subsidiary engaged in the network systems business).
"DOLLARS" and "$" 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
Consolidated Parties 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; (iii) a Related Fund; and (iv) any other Person approved by the
Agent (such approval not to be unreasonably withheld or delayed) 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 three 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,
8
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 shares of its Capital
Stock. The term "Equity Issuance" shall not include any Asset
Disposition.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute thereto, as interpreted by
the rules and regulations thereunder, all as the same may be in effect
from time to time. References to sections of ERISA shall be construed
also to refer to any successor sections.
"ERISA AFFILIATE" means an entity which is under common
control with any Credit Party within the meaning of Section 4001(a)(14)
of ERISA, or is a member of a group which includes the Borrower and
which is treated as a single employer under Sections 414(b) 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
could reasonably be expected to 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 (vii) the adoption of an
amendment to any Plan requiring the provision of security to such Plan
pursuant to Section 307 of ERISA.
"EURODOLLAR LOAN" means any Loan that bears interest at a rate
based upon the Eurodollar Rate.
"EURODOLLAR RATE" means, for any Eurodollar Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) determined by the Agent to be
equal to the quotient obtained by dividing (a) the London Interbank
Offered Rate for such Eurodollar Loan for such Interest Period by (b) 1
minus the Eurodollar Reserve Requirement for such Eurodollar Loan for
such Interest Period.
9
"EURODOLLAR RESERVE REQUIREMENT" means, at any time, the
maximum rate at which reserves (including, without limitation, any
marginal, special, supplemental, or emergency reserves) are required to
be maintained under regulations issued from time to time by the Board
of Governors of the Federal Reserve System (or any successor) by member
banks of the Federal Reserve System against "Eurocurrency liabilities"
(as such term is used in Regulation D). Without limiting the effect of
the foregoing, the Eurodollar Reserve Requirement shall reflect any
other reserves required to be maintained by such member banks with
respect to (i) any category of liabilities which includes deposits by
reference to which the Adjusted Eurodollar Rate is to be determined, or
(ii) any category of extensions of credit or other assets which include
Eurodollar Loans. The Adjusted Eurodollar Rate shall be adjusted
automatically on and as of the effective date of any change in the
Eurodollar Reserve Requirement.
"EVENT OF DEFAULT" means such term as defined in Section 9.1.
"EXCESS CASH FLOW" means, with respect to any fiscal year
period of the Consolidated Parties on a consolidated basis, an amount
equal to (a) Consolidated EBITDA for such period MINUS (b) Consolidated
Capital Expenditures for such period MINUS (c) Consolidated Interest
Expense for such period MINUS (d) increases (or PLUS decreases) in
Consolidated Working Capital for such fiscal year MINUS (e) Federal,
state and other income, value added and similar taxes actually paid by
the Consolidated Parties on a consolidated basis during such period
MINUS (f) Consolidated Scheduled Funded Debt Payments made during such
period.
"EXCLUDED ASSET DISPOSITION" means any Asset Disposition by
any Consolidated Party to any Credit Party if the Credit Parties shall
cause to be executed and delivered such documents, instruments and
certificates as the Agent may request so as to cause the Credit Parties
to be in compliance with the terms of Section 7.13 after giving effect
to such Asset Disposition.
"EXCLUDED ISSUANCE" means either (i) the receipt by the
Borrower of a capital contribution from, or the sale by the Borrower of
its Capital Stock to, TBG Industries, Inc. and/or Chase Capital
Partners or any of their Affiliates (ii) the issuance by the Borrower
in favor of TBG Industries, Inc. and/or Chase Capital Partners or any
of their Affiliates after the Closing Date of subordinated debt on
terms and conditions reasonably satisfactory to the Required Lenders or
(iii) the issuance of any other Indebtedness permitted to be issued
pursuant to Section 8.1 (excluding for purposes hereof Section 8.1(g)).
"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
10
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.
"FIRST UNION NATIONAL BANK" means First Union National Bank
and its successors.
"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, (i) all Indebtedness of such Person for borrowed
money, (ii) all purchase money Indebtedness of such Person, including
without limitation the principal portion of all obligations of such
Person under Capital Leases, (iii) all Guaranty Obligations of such
Person with respect to Funded Indebtedness of another Person, (iv) all
Funded Indebtedness of another Person secured by a Lien on any Property
of such Person, whether or not such Funded Indebtedness has been
assumed, PROVIDED that for purposes hereof the amount of such Funded
Indebtedness shall be limited to the greater of (A) the amount of such
Funded Indebtedness to which there is recourse to such Person and (B)
the fair market value of the property which is subject to the Lien
(unless the amount of Funded Indebtedness secured by such Lien is less
than such fair market value in which case the amount of such Funded
Indebtedness), and (v) the principal balance outstanding under any
synthetic lease, tax retention operating lease, off-balance sheet loan
or similar off-balance sheet financing product to which such Person is
a party, where such transaction is considered borrowed money
indebtedness for tax purposes but is classified as an operating lease
in accordance with GAAP. The Funded Indebtedness of any Person shall
include the Funded Indebtedness of any partnership or joint venture in
which such Person is a general partner or joint venturer, but only to
the extent to which there is recourse to such Person for the payment of
such Funded Indebtedness.
"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.
"GUARANTOR" means each of the Persons identified as a
"Guarantor" on the signature pages hereto and each Additional Credit
Party which may hereafter execute a Joinder Agreement, together with
their successors and permitted assigns, 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
11
without limitation any obligation, whether or not contingent, (i) to
purchase any such Indebtedness or any Property constituting security
therefor, (ii) to advance or provide funds or other support for the
payment or purchase of any such Indebtedness or to maintain working
capital, solvency or other balance sheet condition of such other Person
(including without limitation keep well agreements, maintenance
agreements, comfort letters or similar agreements or arrangements) for
the benefit of any holder of Indebtedness of such other Person, (iii)
to lease or purchase Property, securities or services primarily for the
purpose of assuring the holder of such Indebtedness, or (iv) to
otherwise assure or hold harmless the holder of such Indebtedness
against loss in respect thereof. The amount of any Guaranty Obligation
hereunder shall (subject to any limitations set forth therein) be
deemed to be an amount equal to the outstanding principal amount (or
maximum principal amount, if larger) of the Indebtedness in respect of
which such Guaranty Obligation is made.
"HEDGING AGREEMENTS" means any interest rate protection
agreement or foreign currency exchange agreement between any
Consolidated Party and any Lender, or any Affiliate of a Lender.
"ILLINOIS IRB" means the $3,065,000 Illinois Development
Finance Authority Industrial Development Bonds (▇▇▇▇ Antenna Products,
Inc. Project) Series 1991.
"INDEBTEDNESS" of any Person means (a) all obligations of such
Person for borrowed money, (b) all obligations of such Person evidenced
by 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 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, (f)
all Guaranty Obligations of such Person, (g) the principal portion of
all obligations of such Person under Capital Leases, (h) all
obligations of such Person under Hedging Agreements, (i) the maximum
amount of all 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),
(j) all preferred Capital Stock issued by such Person and required by
the terms thereof to be redeemed, or for which mandatory sinking fund
payments are due, by a fixed date, but only to the extent such
redemption or sinking fund payments would be due prior to the final
maturity date of the Loans hereunder, (k) the principal portion of all
obligations of such Person under Synthetic Leases and (l) the
Indebtedness of any partnership or joint venture in which such Person
is a general partner or a joint venturer, but only to the extent to
which there is recourse to such Person for the payment of such
Indebtedness.
12
"INTEREST COVERAGE 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 of the Consolidated
Parties, the ratio of (a) Consolidated EBITDA for such period to (b)
Consolidated Interest Expense for such period.
"INTEREST PAYMENT DATE" means (a) as to Base Rate Loans, the
last day of each fiscal quarter and the Maturity Date, and (b) as to
Eurodollar Loans, the last day of each applicable Interest Period and
the Maturity Date, and in addition where the applicable Interest Period
for a Eurodollar Loan is greater than three months, then also the date
three months from the beginning of the Interest Period and each three
months thereafter.
"INTEREST PERIOD" means, as to Eurodollar Loans, a period of
one, two, three or six months' duration, as the Borrower may elect,
commencing, in each case, on the date of the borrowing (including
continuations and conversions thereof); PROVIDED, HOWEVER, (a) if any
Interest Period would end on a day which is not a Business Day, such
Interest Period shall be extended to the next succeeding Business Day
(except that where the next succeeding Business Day falls in the next
succeeding calendar month, then on the next preceding Business Day),
(b) no Interest Period shall extend beyond the Maturity Date, (c) with
regard to the Tranche A Term Loans, no Interest Period shall extend
beyond any Principal Amortization Payment Date unless the portion of
Tranche A Term Loans comprised of Base Rate Loans together with the
portion of Tranche A Term Loans comprised of Eurodollar Loans with
Interest Periods expiring prior to the date such Principal Amortization
Payment is due, is at least equal to the amount of such Principal
Amortization Payment due on such date, (d) with regard to the Tranche B
Term Loans, no Interest Period shall extend beyond any Principal
Amortization Payment Date unless the portion of Tranche B Term Loans
comprised of Base Rate Loans together with the portion of Tranche B
Term Loans comprised of Eurodollar Loans with Interest Periods expiring
prior to the date such Principal Amortization Payment due, is at least
equal to the amount of such Principal Amortization Payment due on such
date and (e) 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" in any Person means (a) the acquisition (whether
for cash, property, services, assumption of Indebtedness, securities or
otherwise) of assets (excluding capital expenditures, purchases of
inventory and other assets acquired in the ordinary course of business
and similar items), shares of Capital Stock, bonds, notes, debentures,
partnership, joint ventures or other ownership interests or other
securities of such other Person or (b) any deposit with, or advance,
loan or other extension of credit to, such Person (other than deposits
made in connection with the purchase of equipment or other assets or
extensions of credit to customers in the ordinary course of business)
or (c) any other capital contribution to or investment in such 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, but excluding any Restricted
Payment to such Person.
"ISSUING LENDER" means First Union National Bank.
13
"ISSUING LENDER FEES" shall have the meaning assigned to such
term in Section 3.5(b)(iii).
"JOINDER AGREEMENT" means a Joinder Agreement substantially in
the form of EXHIBIT 7.12 hereto, executed and delivered by an
Additional Credit Party in accordance with the provisions of Section
7.12.
"LENDER" means any of the Persons identified as a "Lender" on
the signature pages hereto, and any Person which may become a Lender by
way of assignment in accordance with the terms hereof, together with
their successors and permitted assigns.
"LETTER OF CREDIT" means any letter of credit issued by the
Issuing Lender for the account of any Credit Party in accordance with
the terms of Section 2.2.
"LETTER OF CREDIT FEE" shall have the meaning assigned to such
term in Section 3.5(b)(i).
"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) 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 which purports to create
an encumbrance 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, the Tranche A
Term Loans and/or the Tranche B Term Loans (or a portion of any
Revolving Loan, any Tranche A Term Loan or any Tranche B Term Loan
bearing interest at the Adjusted Base Rate or the Adjusted Eurodollar
Rate), individually or collectively, as appropriate.
"LOC COMMITMENT" means the commitment of the Issuing Lender to
issue Letters of Credit in an aggregate face amount at any time
outstanding (together with the amounts of any unreimbursed drawings
thereon) of up to the LOC Committed Amount.
"LOC COMMITTED AMOUNT" shall have the meaning assigned to such
term in Section 2.2.
"LOC DOCUMENTS" means, with respect to any Letter of Credit,
such Letter of Credit, any amendments thereto, any documents delivered
in connection therewith, any application therefor, and any agreements,
instruments, guarantees or other documents (whether general in
application or applicable only to such Letter of Credit) governing or
14
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.
"LONDON INTERBANK OFFERED RATE" shall mean, with respect to
any Eurodollar Loan for the Interest Period applicable thereto, the
rate of interest per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor
page) as the London interbank offered rate for deposits in Dollars at
approximately 11:00 A.M. (London time) two Business Days prior to the
first day of such Interest Period for a term comparable to such
Interest Period; PROVIDED, HOWEVER, if more than one rate is specified
on Telerate Page 3750, the applicable rate shall be the arithmetic mean
of all such rates. If, for any reason, such rate is not available, the
term "LONDON INTERBANK OFFERED RATE" shall mean, with respect to any
Eurodollar Loan for the Interest Period applicable thereto, the rate of
interest 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.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
(i) the condition (financial or otherwise), operations, business,
assets or liabilities of the Consolidated Parties, taken as a whole,
(ii) the ability of the Credit Parties 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, friable asbestos, polychlorinated
biphenyls and urea-formaldehyde insulation.
"MATURITY DATE" means (i) as to the Revolving Loans, June 25,
2004, (ii) as to Letters of Credit (and the related LOC Obligations),
June 15, 2004 and (iii) as to the Tranche A Term Loan and the Tranche B
Term Loan, the date of the final maturity of such Term Loan.
"MAXIMUM PAYMENT AMOUNT" means, as of the date of
determination, the sum of the following: (a) for each complete fiscal
year ending on or after November 30, 1999 where the Leverage Ratio on
the last day of such fiscal year is less than or equal to 3.0 to 1.0
15
but greater than 2.5 to 1.0 (calculated after giving effect to any
dividend or payment proposed to be paid pursuant to Section 8.7 in
connection with the calculation of such Maximum Payment Amount), 50% of
Excess Cash Flow for such fiscal year, plus (b) for each complete
fiscal year ending on or after November 30, 1999 where the Leverage
Ratio on the last day of such fiscal year is less than or equal to 2.5
to 1.0 but greater than 2.0 to 1.0 (calculated after giving effect to
any dividend or payment proposed to be paid pursuant to Section 8.7 in
connection with the calculation of such Maximum Payment Amount), 75% of
Excess Cash Flow, plus (c) for each complete fiscal year ending on or
after November 30, 1999 where the Leverage Ratio is less than or equal
to 2.0 to 1.0, 100% of Excess Cash Flow (measured cumulatively from the
Closing Date) not otherwise distributed either in the form of payments
permitted under Section 8.7 or repayments of the Loans as set forth in
Section 3.3(b)(ii) since the Closing Date.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc., or any
successor or assignee of the business of such company in the business
of rating securities.
"MORTGAGE INSTRUMENTS" shall have the meaning assigned such
term in Section 5.1(h).
"MORTGAGE POLICIES" shall have the meaning assigned such term
in Section 5.1(h).
"MORTGAGED REAL PROPERTIES" shall have the meaning assigned
such term in Section 5.1(h).
"MULTIEMPLOYER PLAN" means a Plan which is a multiemployer
plan as defined in Sections 3(37) or 4001(a)(3) of ERISA.
"MULTIPLE EMPLOYER PLAN" means a Plan which any Consolidated
Party or any ERISA Affiliate and at least one employer other than the
Consolidated Parties or any ERISA Affiliate are contributing sponsors.
"NET CASH PROCEEDS" means the aggregate cash proceeds received
by the Consolidated Parties in respect of any Asset Disposition, Debt
Issuance or Equity Issuance, net of (a) direct costs (including,
without limitation, legal, accounting and investment banking fees, and
sales commissions) (b) taxes paid or payable as a result thereof, (c)
the amount of all payments required to be made by the Borrower and its
Subsidiaries as a result of such event to repay Indebtedness secured by
the assets the subject of such Asset Disposition or otherwise subject
to mandatory prepayment as a result of such event (including in order
to obtain consent required therefor) and (d) the amount of any reserves
established by the Borrower and its Subsidiaries to fund contingent
liabilities reasonably estimated to be payable, and that are directly
attributable to such event (as determined reasonably and in good faith
by the chief financial officer of the Borrower); 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.
16
"NOTE" or "NOTES" means the Revolving Notes and/or the Term
Notes, individually or collectively, as appropriate.
"NOTICE OF ACCOUNT DESIGNATION" means a written notice of
account designation in substantially the form of EXHIBIT 3.2(A)(III).
"NOTICE OF BORROWING" means a written notice of borrowing in
substantially the form of EXHIBIT 3.2(A)(I), as required by Section
3.2(a)(i).
"NOTICE OF EXTENSION/CONVERSION" means the written notice of
extension or conversion in substantially the form of EXHIBIT 3.2(B), as
required by Section 3.2(b).
"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" means such term as is defined 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 2.3 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 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) or
other obligations from bankrupt obligors; (iv) Investments existing as
of the Closing Date and set forth in SCHEDULE 1.1A, (v) Guaranty
Obligations permitted by Section 8.1; (vi) transactions permitted by
Section 8.9, (vii) Investments resulting from non-cash proceeds of
Asset Dispositions permitted under Section 8.5, (viii) payroll, travel
and similar advances made in the ordinary course of business which are
expected to be treated as expenses for accounting purposes and other
advances or loans to directors, officers, employees, agents, customers
or suppliers that do not exceed $500,000 in the aggregate at any one
time outstanding for all of the Consolidated Parties; (ix) Investments
in any other Credit Party, (x) equity securities listed on the New York
Stock Exchange, PROVIDED that (A) the long-term credit rating of the
corporation issuing such securities shall be A- (or the equivalent
thereof) or better from S&P or A3 (or the equivalent thereof) or better
from Moody's and (B) the purchase price paid for all such equity
securities held at any time shall not exceed $100,000, (xi) Investments
in Subsidiaries which are not Credit Parties in an aggregate amount not
to exceed $1,000,000 in the aggregate at any time outstanding, (xii)
Hedging Agreements and other hedging contracts not entered into for
17
speculative purposes, (xiii) acquisitions of Eligible Assets as
contemplated by 8.5(f), (xiv) Investments resulting from transactions
permitted by Section 8.4 and (xv) other Investments in an aggregate
amount not to exceed $200,000.
"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 securing purchase money Indebtedness
(including Capital Leases) to the extent permitted under Section
8.1(c), PROVIDED that any such Lien attaches to such Property
concurrently with or within 90 days after the acquisition thereof;
(viii) any interest of title of a lessor under, and Liens
arising from UCC financing statements (or equivalent filings,
registrations or agreements in foreign jurisdictions) relating to,
leases permitted by this Credit Agreement;
18
(ix) Liens deemed to exist in connection with Investments in
repurchase agreements permitted under Section 8.6;
(x) normal and customary rights of setoff upon deposits of
cash in favor of banks or other depository institutions;
(xi) Liens existing as of the Closing Date and set forth on
SCHEDULE 1.1B; 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;
(xii) Liens of a collection bank arising in the ordinary
course of business not to exceed the amount of any fees incurred in
connection therewith as provided under Section 4-208 of the Uniform
Commercial Code in effect in the relevant jurisdiction;
(xiii) licenses of patents, trademarks and other intellectual
property entered into in the ordinary course of business; and
(xiv) other Liens securing amounts not to exceed $1,000,000 at
any time outstanding.
"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 in the form of EXHIBIT 1.1A to be 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 First Union National Bank as its prime rate, which
rate may not be the lowest rate of interest charged by First Union
National Bank to its customers.
"PRINCIPAL AMORTIZATION PAYMENT" means a principal payment on
the Tranche A Term Loans as set forth in Section 2.4(c) or on the
Tranche B Term Loans as set forth in Section 2.5(c).
"PRINCIPAL AMORTIZATION PAYMENT DATE" means the date a
Principal Amortization Payment is due.
19
"PRINCIPAL OFFICE" means the principal office of First Union
National Bank, presently located at Charlotte, North Carolina.
"PRO FORMA BASIS" means, with respect to any
transaction, that such transaction shall be deemed to have occurred
(for purposes of calculating compliance in respect of such transaction
with each of the financial covenants set forth in Section 7.11 as of
the most recent fiscal quarter end preceding the date of such
transaction with respect to which the Agent has received the required
financial information) as of the first day of the four fiscal-quarter
period ending as of such fiscal quarter end. As used herein,
"TRANSACTION" shall mean (i) any incurrence or assumption of
Indebtedness as referred to in Section 8.1(g)(i), (ii) any merger,
consolidation or other transaction as referred to in Section 8.4 or
(iii) any Asset Disposition as referred to in Section 8.5. With respect
to any transaction of the type described in clause (i) above regarding
Indebtedness which has a floating or formula rate, the implied rate of
interest for such Indebtedness for the applicable period for purposes
of this definition 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. With respect to any transaction of the
type described in clause (ii) above, any Indebtedness incurred by the
Borrower or any of its Subsidiaries in order to consummate such
transaction (A) shall be deemed to have been incurred on the first day
of the applicable period four fiscal-quarter period and (B) if such
Indebtedness has a floating or formula rate, then the implied rate of
interest for such Indebtedness for the applicable period for purposes
of this definition 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. In connection with any calculation of
the financial covenants set forth in Section 7.11 upon giving effect to
a transaction on a Pro Forma Basis for purposes of Section 8.1(g)(i),
Section 8.4 or Section 8.5 as applicable:
(A) for purposes of any such calculation in respect
of any incurrence or assumption of Indebtedness as referred to
in Section 8.1(g)(i), any Indebtedness which is retired in
connection with such incurrence or assumption shall be
excluded and deemed to have been retired as of the first day
of the applicable period;
(B) for purposes of any such calculation in respect
of any Asset Disposition as referred to in Section 8.5, (1)
income statement items (whether positive or negative)
attributable to the Property disposed of in such Asset
Disposition shall be excluded and (2) any Indebtedness which
is retired in connection with such Asset Disposition shall be
excluded and deemed to have been retired as of the first day
of the applicable period;
(C) for purposes of any such calculation in respect
of any merger or consolidation as referred to in Section 8.4,
(1) any Indebtedness incurred by the Borrower or any of its
Subsidiaries in connection with such transaction shall be
deemed to have been incurred as of the first day of the
applicable period and (2) income statement items (whether
positive or negative) attributable to the Property acquired in
such transaction or to the Investment comprising such
transaction, as
20
applicable, shall be included to the extent relating to the
relevant period. The Borrower may, on a one-time basis in
connection with a merger, consolidation or other transaction
referred to in Section 8.4, include readily definable cost
savings (subject to the Agent's reasonable consent) in an
aggregate amount not to exceed 10% of the earnings before
interest, taxes, depreciation and amortization of the Person
acquired for the immediately preceding fiscal year; and
(D) for purposes of any such calculation, the
principles set forth in the second paragraph of Section 1.3
shall be applicable.
"PRO FORMA COMPLIANCE CERTIFICATE" means a certificate of the
chief financial officer of the Borrower delivered to the Agent in
connection with (i) any incurrence, assumption or retirement of
Indebtedness as referred to in Section 8.1(g)(i), (ii) any merger or
consolidation as referred to in Section 8.4 or (iii) any Asset
Disposition as referred to in Section 8.5, as applicable, and
containing reasonably detailed calculations, upon giving effect to the
applicable transaction on a Pro Forma Basis, of the Interest Coverage
Ratio and the Leverage Ratio as of the most recent fiscal quarter end
preceding the date of the applicable transaction with respect to which
the Agent shall have received the required financial information.
"PROPERTY" means any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
"PURCHASE AGREEMENT" means that certain Stock Purchase and
Sale Agreement dated as of March 16, 1998, as amended, among Comsat
Corporation, TBG Industries, Inc. and the Borrower.
"REAL PROPERTIES" shall have the meaning given such term in
Section 6.15.
"REGISTER" shall have the meaning given such term in Section
11.3(c).
"REGULATION T, U, OR X" means Regulation T, U or X,
respectively, of the Board of Governors of the Federal Reserve System
as from time to time in effect and any successor to all or a portion
thereof.
"RELATED FUNDS" means, with respect to any Lender which is a
fund that invests in loans, any other fund that invests in loans and is
managed by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
"RELEASE" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping
or disposing into the environment (including the abandonment or
discarding of barrels, containers and other closed receptacles
containing any Materials of Environmental Concern).
"REPORTABLE EVENT" means any of the events set forth in
Section 4043(c) of ERISA, other than those events as to which the
notice requirement has been waived by regulation.
21
"REQUIRED LENDERS" means, at any time, (i) Lenders which are
then in compliance with their obligations hereunder (as determined by
the Agent) and holding in the aggregate at least 51% of the Revolving
Commitments (and Participation Interests therein) and the outstanding
Tranche A Term Loans (and Participation Interests therein) or if the
Commitments have been terminated, the outstanding Revolving Loans and
Tranche A Term Loans and Participation Interests (including the
Participation Interests of the Issuing Lender in any Letters of Credit
and of the Swingline Lender in any Swingline Loans) and (ii) Lenders
which are then in compliance with their obligations hereunder (as
determined by the Agent) and holding in the aggregate at least 51% of
the Tranche B Term Loans (and Participation Interests therein) or if
the Commitments have been terminated, the outstanding Tranche B Term
Loans and Participation Interests.
"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
with respect to which any of its material property is subject.
"RESTRICTED PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class
of Capital Stock of any Consolidated Party, now or hereafter
outstanding, (ii) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect,
of any shares of any class of 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).
"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).
22
"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.
"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 in the form of EXHIBIT 1.1B to be executed in favor of
the Agent by each of the Credit Parties, as amended, modified, restated
or supplemented from time to time.
"SENIOR DEBT" means all Funded Indebtedness which is not
contractually subordinated or junior in right of payment to the Credit
Party Obligations.
"SENIOR 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 of the Consolidated Parties, the
ratio of (a) Senior Debt at such time to (b) Consolidated EBITDA for
such period.
"SENIOR SUBORDINATED NOTES" means the Prodelin Holding
Corporation Senior Subordinated Notes in favor of TBG Industries, Inc.
and Chase Equity Associates, L.P. dated as of June 25, 1998.
"SINGLE EMPLOYER PLAN" means any Plan which is covered by
Title IV of ERISA, but which is not a Multiemployer Plan or a Multiple
Employer Plan.
"SOLVENT" or "SOLVENCY" means, with respect to any Person as
of a particular date, that on such date (i) such Person is able to
realize upon its assets and pay its debts and other liabilities,
contingent obligations and other commitments as they mature in the
normal course of business, (ii) such Person does not intend to, and
does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature in their
ordinary course, (iii) such Person is not engaged in a business or a
transaction, and is not about to engage in a business or a transaction,
for which such Person's Property would constitute unreasonably small
capital after giving due consideration to the prevailing practice in
the industry in which such Person is engaged or is to engage, (iv) the
fair value of the Property of such Person 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
23
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, (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 the
time, any class or classes of such corporation shall have or might have
voting power by reason of the happening of any contingency) is at the
time owned by such Person directly or indirectly through Subsidiaries,
and (b) any partnership, association, joint venture or other entity in
which such Person directly or indirectly through Subsidiaries has more
than 50% equity interest at any time.
"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 2.3(a).
"SWINGLINE LENDER" means First Union National Bank.
"SWINGLINE LOAN" shall have the meaning assigned to such term
in Section 2.3(a).
"SWINGLINE NOTE" means the promissory note of the Borrower in
favor of the Swingline Lender in the original principal amount of
$4,000,000, 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.
"TAX SHARING AGREEMENT" means that certain Federal Income Tax
Allocation Agreement dated as of May 21, 1998 among Holland America
Investment Corporation and its Subsidiaries.
"TAXES" means such term as is defined in Section 3.11.
"TRANCHE A TERM LOAN" shall have the meaning assigned to such
term in Section 2.4(a).
24
"TRANCHE A TERM LOAN COMMITMENT" means, with respect to each
Lender, the commitment of such Lender to make its portion of the
Tranche A Term Loan in a principal amount equal to such Lender's
Tranche A Term Loan Commitment Percentage of the Tranche A Term Loan
Committed Amount.
"TRANCHE A TERM LOAN COMMITMENT PERCENTAGE" means, for any
Lender, the percentage identified as its Tranche A Term Loan Commitment
Percentage on SCHEDULE 2.1(A), as such percentage may be modified in
connection with any assignment made in accordance with the provisions
of Section 11.3.
"TRANCHE A TERM LOAN COMMITTED AMOUNT" shall have the meaning
assigned to such term in Section 2.4(a). "TRANCHE A TERM NOTE" or
"TRANCHE A TERM NOTES" means the promissory notes of the Borrower in
favor of each of the Lenders evidencing the Tranche A Term Loans
provided pursuant to Section 2.4(e), individually or collectively, as
appropriate, as such promissory notes may be amended, modified,
restated, supplemented, extended, renewed or replaced from time to
time. "TRANCHE B TERM LOAN" shall have the meaning assigned to such
term in Section 2.5(a). "TRANCHE B TERM LOAN COMMITMENT" means, with
respect to each Lender, the commitment of such Lender to make its
portion of the Tranche B Term Loan in a principal amount equal to such
Lender's Tranche B Term Loan Commitment Percentage of the Tranche B
Term Loan Committed Amount. "TRANCHE B TERM LOAN COMMITMENT PERCENTAGE"
means, for any Lender, the percentage identified as its Tranche B Term
Loan Commitment Percentage on SCHEDULE 2.1(A), as such percentage may
be modified in connection with any assignment made in accordance with
the provisions of Section 11.3. "TRANCHE B TERM LOAN COMMITTED AMOUNT"
shall have the meaning assigned to such term in Section 2.5(a).
"TRANCHE B TERM NOTE" or "TRANCHE B TERM NOTES" means the promissory
notes of the Borrower in favor of each of the Lenders evidencing the
Tranche B Term Loans provided pursuant to Section 2.5(e), individually
or collectively, as appropriate, as such promissory notes may be
amended, modified, restated, supplemented, extended, renewed or
replaced from time to time.
"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.
25
"WHOLLY OWNED SUBSIDIARY" of any Person means any Subsidiary
100% of whose Voting Stock or other equity interests (other than
directors qualifying shares required by applicable law) 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 November 29, 1997; PROVIDED,
HOWEVER, if (a) the Borrower shall object to determining such compliance on such
basis at the time of delivery of such financial statements due to any change in
GAAP or the rules promulgated with respect thereto or (b) the Agent or the
Required Lenders shall so object in writing within 60 days after delivery of
such financial statements, then such calculations shall be made on a basis
consistent with the most recent financial statements delivered by the Borrower
to the Lenders as to which no such objection shall have been made.
Notwithstanding the above, the parties hereto acknowledge and agree that, for
purposes of all calculations made in determining compliance with the financial
covenants set forth in Section 7.11 (including without limitation for purposes
of the definitions of "Applicable Percentage" and "Pro Forma Basis" set forth in
Section 1.1), (i) income statement items (whether positive or negative)
attributable to the Property disposed of in any Asset Disposition as
contemplated by Section 8.5, as applicable, shall be excluded to the extent
relating to any period occurring prior to the date of such transaction and (ii)
Indebtedness which is retired in connection with any such Asset Disposition
shall be excluded and deemed to have been retired as of the first day of the
applicable period.
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
26
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 for
the purposes hereinafter set forth; PROVIDED, HOWEVER, that the sum of
the aggregate principal amount of outstanding Revolving Loans shall not
exceed FORTY MILLION DOLLARS ($40,000,000) (provided, that until the
time that amounts outstanding under the loan agreement in connection
with the Illinois IRB shall have been paid in full as set forth in
Section 7.17, the aggregate principal amount of outstanding Revolving
Loans shall not exceed $37,500,000), (as such aggregate maximum amount
may be reduced from time to time as provided in Section 3.4, the
"REVOLVING COMMITTED AMOUNT"); PROVIDED, FURTHER, (A) with regard to
each Lender individually, such Lender's outstanding Revolving Loans
shall not exceed such Lender's Revolving Commitment Percentage of the
Revolving Committed Amount, and (B) the aggregate principal amount of
outstanding Revolving Loans PLUS LOC Obligations PLUS outstanding
Swingline Loans outstanding shall not exceed the Revolving Committed
Amount. Revolving Loans may consist of Base Rate Loans or Eurodollar
Loans, or a combination thereof, as the Borrower may request, and may
be repaid and reborrowed in accordance with the provisions hereof;
PROVIDED, HOWEVER, that no more than 10 Eurodollar Loans shall be
outstanding in the aggregate under this Credit Agreement at any time.
For purposes hereof, Eurodollar Loans with different Interest Periods
shall be considered as separate Eurodollar Loans, even if they begin on
the same date, although borrowings, extensions and conversions may, in
accordance with the provisions hereof, be combined at the end of
existing Interest Periods to constitute a new Eurodollar Loan with a
single Interest Period. Revolving Loans hereunder may be repaid and
reborrowed in accordance with the provisions hereof.
(b) REVOLVING LOAN BORROWINGS. The Borrower shall request
Revolving Loans as set forth in Section 3.2(a).
(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 applicable Adjusted Base Rate.
(ii) EURODOLLAR LOANS. During such periods as
Revolving Loans shall be comprised in whole or in part of
Eurodollar Loans, such Eurodollar Loans shall bear interest at
a per annum rate equal to the applicable Adjusted Eurodollar
Rate.
Interest on Revolving Loans shall be payable in arrears on
each applicable Interest Payment Date (or at such other times as may be
specified herein).
27
(e) REVOLVING NOTES. The Revolving Loans made by each Lender
shall be evidenced by a duly executed promissory note of the Borrower
payable 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;
PROVIDED, HOWEVER, that (i) the LOC Obligations outstanding shall not
at any time exceed FIFTEEN MILLION DOLLARS ($15,000,000) (the "LOC
COMMITTED AMOUNT") and (ii) the sum of the aggregate principal amount
of outstanding Revolving Loans PLUS LOC Obligations outstanding PLUS
outstanding Swingline Loans shall not at any time exceed the Revolving
Committed Amount. No Letter of Credit shall (x) except as otherwise
agreed by the Agent, have an original expiry date more than one year
from the date of issuance or (y) as originally issued or as extended,
have an expiry date extending beyond the Maturity Date. Each Letter of
Credit shall comply with the related LOC Documents. The issuance and
expiry dates of each Letter of Credit shall be a Business Day.
(b) NOTICE AND REPORTS. The request for the issuance of a
Letter of Credit shall be submitted by the Borrower to the Issuing
Lender at least three (3) Business Days prior to the requested date of
issuance. The Issuing Lender will, at least quarterly, 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 applicable 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
28
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 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
29
portion of the LOC Obligation and in the interest thereon and in the
related LOC Documents, and shall have a claim against the Borrower with
respect thereto.
(e) REPAYMENT WITH REVOLVING LOANS. On any day on which the
Borrower shall have requested, or been deemed to have requested, a
Revolving Loan advance to reimburse a drawing under a Letter of Credit,
the Agent shall give notice to the Lenders that a Revolving Loan has
been requested or deemed requested by the Borrower to be made in
connection with a drawing under a Letter of Credit, in which case a
Revolving Loan advance comprised of Base Rate Loans (or Eurodollar
Loans to the extent the Borrower has complied with the procedures of
Section 3.2(a)(i) with respect thereto) shall be immediately made to
the Borrower by all Lenders (notwithstanding any termination of the
Commitments pursuant to Section 9.2) PRO RATA based on the respective
Revolving Commitment Percentages of the Lenders (determined before
giving effect to any termination of the Commitments pursuant to Section
9.2) and the proceeds thereof shall be paid directly to the Issuing
Lender for application to the respective LOC Obligations. Each such
Lender hereby irrevocably agrees to make its pro rata share of each
such Revolving Loan immediately upon any such request or deemed request
in the amount, in the manner and on the date specified in the preceding
sentence NOTWITHSTANDING (i) the amount of such borrowing may not
comply with the minimum amount for advances of Revolving Loans
otherwise required hereunder, (ii) whether any conditions specified in
Section 5.2 are then satisfied, (iii) whether a Default or an Event of
Default then exists, (iv) failure for any such request or deemed
request for Revolving Loan to be made by the time otherwise required
hereunder, (v) whether the date of such borrowing is a date on which
Revolving Loans are otherwise permitted to be made hereunder or (vi)
any termination of the Commitments relating thereto immediately prior
to or contemporaneously with such borrowing. In the event that any
Revolving Loan cannot for any reason be made on the date otherwise
required above (including, without limitation, as a result of the
commencement of a proceeding under the Bankruptcy Code with respect to
the Borrower or any 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
Issuing Lender 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 CONSOLIDATED PARTIES AS ACCOUNT PARTIES.
Notwithstanding anything to the contrary set forth in this Credit
Agreement, including without limitation
30
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 Consolidated Party other than the Borrower, provided that
notwithstanding such statement, the Borrower shall be the actual
account party for all purposes of this Credit Agreement for such Letter
of Credit and such statement shall not affect the Borrower's
reimbursement obligations hereunder with respect to such Letter of
Credit.
(g) RENEWAL, EXTENSION. The renewal or extension of any Letter
of Credit shall, for purposes hereof, be treated in all respects the
same as the issuance of a new Letter of Credit hereunder.
(h) UNIFORM CUSTOMS AND PRACTICES. The Issuing Lender may have
the Letters of Credit be subject to The Uniform Customs and Practice
for Documentary Credits, as published as of the date of issue by the
International Chamber of Commerce (the "UCP"), in which case the UCP
may be incorporated therein and deemed in all respects to be a part
thereof.
(i) INDEMNIFICATION; NATURE OF ISSUING LENDER'S DUTIES.
(i) In addition to its other obligations under this
Section 2.2, the Borrower hereby agrees to pay, and protect,
indemnify and save each Lender harmless from and against, any
and all claims, demands, liabilities, damages, losses, costs,
charges and expenses (including reasonable attorneys' fees)
that such Lender may incur or be subject to as a consequence,
direct or indirect, of (A) the issuance of any Letter of
Credit or (B) the failure of such Lender to honor a drawing
under a Letter of Credit as a result of any act or omission,
whether rightful or wrongful, of any present or future de jure
or de facto government or Governmental Authority (all such
acts or omissions, herein called "Government Acts").
(ii) As between the Borrower and the Lenders
(including the Issuing Lender), the Borrower shall assume all
risks of the acts, omissions or misuse of any Letter of Credit
by the beneficiary thereof. No Lender (including the Issuing
Lender) shall be responsible: (A) for the form, validity,
sufficiency, accuracy, genuineness or legal effect of any
document submitted by any party in connection with the
application for and issuance of any Letter of Credit, even if
it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (B) for the
validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign any Letter of
Credit or the rights or benefits thereunder or proceeds
thereof, in whole or in part, that may prove to be invalid or
ineffective for any reason; (C) for errors, omissions,
interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise,
whether or not they be in cipher; (D) for any loss or delay in
the transmission or otherwise of any 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,
31
any Government Acts. None of the above shall affect, impair,
or prevent the vesting of the Issuing Lender's rights or
powers hereunder.
(iii) In furtherance and extension and not in
limitation of the specific provisions hereinabove set forth,
any action taken or omitted by any Lender (including the
Issuing Lender), under or in connection with any Letter of
Credit or the related certificates, if taken or omitted in
good faith, shall not put such Lender under any resulting
liability to the Borrower or any other Credit Party. It is the
intention of the parties that this Credit Agreement shall be
construed and applied to protect and indemnify each Lender
(including the Issuing Lender) against any and all risks
involved in the issuance of the Letters of Credit, all of
which risks are hereby assumed by the Borrower (on behalf of
itself and each of the other Credit Parties), including,
without limitation, any and all Government Acts. No Lender
(including the Issuing Lender) shall, in any way, be liable
for any failure by such Lender or anyone else to pay any
drawing under any Letter of Credit as a result of any
Government Acts or any other cause beyond the control of such
Lender.
(iv) Nothing in this subsection (i) is intended to
limit the reimbursement obligations of the Borrower contained
in subsection (d) above. The obligations of the Borrower under
this subsection (i) shall survive the termination of this
Credit Agreement. No act or omissions 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.
32
(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 SWINGLINE LOANS.
(a) SWINGLINE COMMITMENT. Subject to the terms and conditions hereof
and in reliance upon the representations and warranties herein set forth, 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 principal amount of Swingline Loans outstanding at any time shall not
exceed FOUR MILLION DOLLARS ($4,000,000) (the "SWINGLINE COMMITTED AMOUNT"), and
(ii) the sum of the aggregate principal amount of outstanding Revolving Loans
plus LOC Obligations PLUS outstanding Swingline Loans at any time shall not
exceed the Revolving Committed Amount. Swingline Loans hereunder shall be made
as Base Rate Loans in accordance with the provisions of this Section 2.3, and
may be repaid and reborrowed in accordance with the provisions hereof.
(b) SWINGLINE LOAN ADVANCES.
(i) NOTICES; DISBURSEMENT. Whenever the Borrower desires a
Swingline Loan advance hereunder it shall give written notice (or
telephone notice promptly confirmed in writing) to the Swingline Lender
not later than 12:00 Noon (Charlotte, North Carolina time) on the
Business Day of the requested Swingline Loan advance. Each such notice
shall be irrevocable and shall specify (A) that a Swingline Loan
advance is requested, (B) the date of the requested Swingline Loan
advance (which shall be a Business Day) and (C) the principal amount of
the Swingline Loan advance requested. Each Swingline Loan shall be made
as a Base Rate Loan and shall have such maturity date as the Swingline
Lender and the Borrower shall agree upon receipt by the Swingline
Lender of any such notice from the Borrower. The Swingline Lender shall
initiate the transfer of funds representing the Swingline Loan advance
to the Borrower by 3:00 P.M. (Charlotte, North Carolina time) on the
Business Day of the requested borrowing.
(ii) MINIMUM AMOUNT. Each Swingline Loan shall be in a minimum
principal amount of $300,000 and in integral multiples of $100,000 in
excess thereof (or the remaining amount of the Swingline Committed
Amount, if less).
(iii) REPAYMENT OF SWINGLINE LOANS. The principal amount of
all Swingline Loans shall be due and payable on the earlier of (A) the
maturity date agreed to by the Swingline Lender and the Borrower with
respect to such Loan (which maturity date shall be upon demand by the
Agent) or (B) 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
33
and on the date of the occurrence of any Event of Default described in
Section 9.1 and 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 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 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 in
accordance with the terms of subsection (c)(ii) hereof, interest on the
principal amount of participation purchased for each day from and
including the day upon which such borrowing would otherwise have
occurred to but excluding the date of payment for such participation,
at the rate equal to the Federal Funds Rate.
(c) INTEREST ON SWINGLINE LOANS.
(i) Subject to the provisions of Section 3.1, each Swingline
Loan shall bear interest at a per annum rate (computed on the basis of
the actual number of days elapsed over a year of 360 days) equal to the
Base Rate PLUS the Applicable Percentage for Base Rate Loans.
(ii) Interest on Swingline Loans shall be payable in arrears
on each applicable Interest Payment Date (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 payable to the Swingline Lender in
substantially the form of EXHIBIT 2.3(D).
34
2.4 TRANCHE A TERM LOAN.
(a) TERM COMMITMENT. Subject to the terms and conditions
hereof and in reliance upon the representations and warranties set
forth herein each Lender severally agrees to make available to the
Borrower on the Closing Date such Lender's Tranche A Term Loan
Commitment Percentage of a term loan in Dollars (the "TRANCHE A TERM
LOAN") in the aggregate principal amount of TWENTY MILLION DOLLARS
($20,000,000) (the "TRANCHE A TERM LOAN COMMITTED AMOUNT") for the
purposes hereinafter set forth. The Tranche A Term Loan may consist of
Base Rate Loans or Eurodollar Loans, or a combination thereof, as the
Borrower may request; PROVIDED, HOWEVER, that no more than 10
Eurodollar Loans shall be outstanding in the aggregate under this
Credit Agreement at any time. For purposes hereof, Eurodollar Loans
with different Interest Periods shall be considered as separate
Eurodollar Loans, even if they begin on the same date, although
borrowings, extensions and conversions may, in accordance with the
provisions hereof, be combined at the end of existing Interest Periods
to constitute a new Eurodollar Loan with a single Interest Period.
Amounts repaid on the Tranche A Term Loan may not be reborrowed.
(b) BORROWING PROCEDURE. The Borrower shall request Tranche A
Term Loan borrowings as set forth in Section 3.2(a).
(c) REPAYMENT OF TERM LOAN. The principal amount of the
Tranche A Term Loan shall be repaid in twenty (20) consecutive
quarterly installments as follows, unless accelerated sooner pursuant
to Section 9.2:
PRINCIPAL AMORTIZATION TERM LOAN PRINCIPAL
PAYMENT DATES AMORTIZATION PAYMENT
---------------------- --------------------
May 31, 1999 $500,000
August 31, 1999 $500,000
November 30, 1999 $500,000
February 29, 2000 $500,000
May 31, 2000 $750,000
August 31, 2000 $750,000
November 30, 2000 $750,000
February 28, 2001 $750,000
May 31, 2001 $1,000,000
August 31, 2001 $1,000,000
November 30, 2001 $1,000,000
35
February 28, 2002 $1,000,000
May 31, 2002 $1,250,000
August 31, 2002 $1,250,000
November 30, 2002 $1,250,000
February 28, 2003 $1,250,000
May 31, 2003 $1,500,000
August 31, 2003 $1,500,000
November 30, 2003 $1,500,000
February 28, 2004 $1,500,000
(d) INTEREST. Subject to the provisions of Section 3.1, the
Tranche A Term Loan shall bear interest at a per annum rate equal to:
(i) BASE RATE LOANS. During such periods as the
Tranche A Term Loan shall be comprised in whole or in part of
Base Rate Loans, such Base Rate Loans shall bear interest at a
per annum rate equal to the applicable Adjusted Base Rate.
(ii) EURODOLLAR LOANS. During such periods as the
Tranche A Term Loan shall be comprised in whole or in part of
Eurodollar Loans, such Eurodollar Loans shall bear interest at
a per annum rate equal to the applicable Adjusted Eurodollar
Rate.
Interest on the Tranche A Term Loan shall be payable in arrears on each
applicable Interest Payment Date (or at such other times as may be
specified herein).
(e) TERM NOTES. The portion of the Tranche A Term Loan made by
each Lender shall be evidenced by a duly executed promissory note of
the Borrower payable to such Lender in an original principal amount
equal to such Lender's Tranche A Term Loan Commitment Percentage of the
Tranche A Term Loan and substantially in the form of EXHIBIT 2.4(E).
2.5 TRANCHE B TERM LOAN.
(a) TRANCHE B TERM COMMITMENT. Subject to the terms and
conditions hereof and in reliance upon the representations and
warranties set forth herein, each Lender severally agrees to make
available to the Borrower on the Closing Date such Lender's Tranche B
Term Loan Commitment Percentage of a term loan in Dollars (the "TRANCHE
B TERM LOAN") in the aggregate principal amount of ONE HUNDRED MILLION
DOLLARS ($100,000,000) (the "TRANCHE B TERM LOAN COMMITTED AMOUNT") for
the purposes hereinafter set forth. The Tranche B Term Loan may consist
of Base Rate Loans or Eurodollar Loans, or a combination thereof, as
the Borrower may request; PROVIDED,
36
HOWEVER, that no more than 10 Eurodollar Loans shall be outstanding in
the aggregate under this Credit Agreement at any time. For purposes
hereof, Eurodollar Loans with different Interest Periods shall be
considered as separate Eurodollar Loans, even if they begin on the same
date, although borrowings, extensions and conversions may, in
accordance with the provisions hereof, be combined at the end of
existing Interest Periods to constitute a new Eurodollar Loan with a
single Interest Period. Amounts repaid on the Tranche B Term Loan may
not be reborrowed.
(b) BORROWING PROCEDURES. The Borrower shall request Tranche B
Term Loan borrowings as set forth in Section 3.2(a).
(c) REPAYMENT OF TRANCHE B TERM LOAN. The principal amount of
the Tranche B Term Loan shall be repaid in thirty-two (32) consecutive
quarterly installments as follows, unless accelerated sooner pursuant
to Section 9.2:
TRANCHE B TERM LOAN
PRINCIPAL AMORTIZATION PRINCIPAL AMORTIZATION
PAYMENT DATES PAYMENT
---------------------- ----------------------
August 31, 1998 $250,000
November 30, 1998 $250,000
February 28, 1999 $250,000
May 31, 1999 $250,000
August 31, 1999 $250,000
November 30, 1999 $250,000
February 29, 2000 $250,000
May 31, 2000 $250,000
August 31, 2000 $250,000
November 30, 2000 $250,000
February 28, 2001 $250,000
May 31, 2001 $250,000
August 31, 2001 $250,000
November 30, 2001 $250,000
February 28, 2002 $250,000
May 31, 2002 $250,000
▇▇
▇▇▇▇▇▇▇ ▇ TERM LOAN
PRINCIPAL AMORTIZATION PRINCIPAL AMORTIZATION
PAYMENT DATES PAYMENT
---------------------- ----------------------
August 31, 2002 $250,000
November 30, 2002 $250,000
February 28, 2003 $250,000
May 31, 2003 $250,000
August 31, 2003 $250,000
November 30, 2003 $250,000
February 29, 2004 $250,000
May 31, 2004 $250,000
August 31, 2004 $8,750,000
November 30, 2004 $8,750,000
February 28, 2005 $8,750,000
May 31, 2005 $8,750,000
August 31, 2005 $14,750,000
November 30, 2005 $14,750,000
February 28, 2006 $14,750,000
May 31, 2006 $14,750,000
(d) INTEREST. Subject to the provisions of Section 3.1, the
Tranche B Term Loan shall bear interest at a per annum rate equal to:
(i) BASE RATE LOANS. During such periods as the
Tranche B Term Loan shall be comprised in whole or in part of
Base Rate Loans, such Base Rate Loans shall bear interest at a
per annum rate equal to the applicable Adjusted Base Rate.
(ii) EURODOLLAR LOANS. During such periods as the
Tranche B Term Loan shall be comprised in whole or in part of
Eurodollar Loans, such Eurodollar Loans shall bear interest at
a per annum rate equal to the applicable Adjusted Eurodollar
Rate.
Interest on the Tranche B Term Loan shall be payable in arrears on each
applicable Interest Payment Date (or at such other times as may be
specified herein).
38
(e) TRANCHE B TERM NOTES. The portion of the Tranche B Term
Loan made by each Lender shall be evidenced by a duly executed
promissory note of the Borrower payable to such Lender in an original
principal amount equal to such Lender's Tranche B Term Loan Commitment
Percentage of the Tranche B Term Loan and substantially in the form of
EXHIBIT 2.5(E).
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 BORROWINGS; EXTENSION AND CONVERSION.
(a) (i) NOTICE OF BORROWING. The Borrower shall request a
Revolving Loan borrowing, Tranche A Term Loan borrowing or a Tranche B
Term 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 Eurodollar Loans; PROVIDED, HOWEVER that only Eurodollar Loans
with Interest Periods of one month shall be available hereunder until
the Borrower shall have received notification (which notification in
any event shall be provided within 90 days after the Closing Date) from
the Agent that it has completed the syndication process. Each such
request for borrowing shall be irrevocable and shall specify (A) the
type of Loan requested, (B) the date of the requested borrowing (which
shall be a Business Day), (C) the aggregate principal amount to be
borrowed, and (D) whether the borrowing shall be comprised of Base Rate
Loans, Eurodollar Loans or a combination thereof, and if Eurodollar
Loans are requested, the Interest Period(s) therefor. If the Borrower
shall fail to specify in any such Notice of Borrowing (I) an applicable
Interest Period in the case of a Eurodollar Loan, then such notice
shall be deemed to be a request for an Interest Period of one month, or
(II) the type of Loan requested, then such notice shall be deemed to be
a request for a Revolving Loan which is 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 3.2(a)(i), the
contents thereof and each such Lender's share of any borrowing to be
made pursuant thereto.
(ii) MINIMUM AMOUNTS. Each Eurodollar Loan shall be
in a minimum aggregate principal amount of $3,000,000 and integral
multiples of $1,000,000 in excess thereof. Each Base Rate shall be in a
minimum aggregate principal amount of $1,000,000 and integral multiples
of $500,000 in excess thereof (or, as applicable, the remaining amount
39
of the Revolving Committed Amount, if less, the remaining principal
balance of the Tranche A Term Loan, if less, or the remaining principal
balance of the Tranche B Term Loan, if less).
(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. Each Lender shall make its Tranche A Term Loan Commitment
Percentage of the Tranche A Term Loan and its Tranche B Term Loan
Percentage of the Tranche B Term Loan available to the Agent for the
account of the Borrower at the office of the Agent specified in
SCHEDULE 2.1(A), or at such other office as the Agent may designate in
writing, by 1:00 P.M. (Charlotte, North Carolina time) on the Closing
Date in Dollars and in funds immediately available to the Agent. The
Borrower hereby irrevocably authorizes the Agent to, and the Agent
shall, on such date disburse the proceeds of each Revolving Loan
requested by the Borrower pursuant to this subsection 3.2(a)(iii) in
immediately available funds by crediting or wiring such proceeds to the
deposit account of the Borrower identified in the most recent Notice of
Account Designation substantially in the form of Exhibit 3.2(a)(iii)
hereto (a "NOTICE OF ACCOUNT DESIGNATION") delivered by the Borrower to
the Agent or as may be otherwise agreed upon by the Borrower and the
Agent from time to time.
(b) Subject to the terms of Section 5.2, the Borrower shall
have the option, on any Business Day, to extend existing Loans into a
subsequent permissible Interest Period or to convert Loans into Loans
of another interest rate type; PROVIDED, HOWEVER, that (i) except as
provided in Section 3.8, Eurodollar Loans may be converted into Base
Rate Loans only on the last day of the Interest Period applicable
thereto, (ii) Eurodollar Loans may be extended, and Base Rate Loans may
be converted into Eurodollar Loans, only if no Default or Event of
Default is in existence on the date of extension or conversion, (iii)
Loans extended as, or converted into, Eurodollar Loans shall be subject
to the terms of the definition of "INTEREST PERIOD" set forth in
Section 1.1 and shall be in such minimum amounts as provided in Section
3.2(a), (iv) no more than 10 Eurodollar Loans shall be outstanding in
the aggregate under this Credit Agreement at any time (it being
understood that, for purposes hereof, Eurodollar Loans with different
Interest Periods shall be considered as separate Eurodollar Loans, even
if they begin on the same date, although borrowings, extensions and
conversions may, in accordance with the provisions hereof, be combined
at the end of existing Interest Periods to constitute a new Eurodollar
Loan with a single Interest Period) and (v) any request for extension
or conversion of a Eurodollar Loan which shall fail to specify an
Interest Period shall be deemed to be a request for an Interest Period
of one month. Each such extension or conversion shall be effected by
the Borrower by giving a Notice of Extension/Conversion (or telephonic
notice promptly confirmed in writing) to the office of the Agent
specified in 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 Business Day of, in the case of the
conversion of a Eurodollar Loan into a Base Rate Loan, and on the third
Business Day prior to, in the case of the extension of a Eurodollar
Loan as, or conversion of a Base Rate Loan into, a Eurodollar Loan, the
date of the proposed extension or conversion, specifying the date of
the proposed extension or conversion, the Loans to be so extended or
converted, the types of Loans into which such Loans are to be converted
and, if appropriate, the applicable Interest Periods with respect
thereto. Each request for extension or conversion shall be irrevocable
and shall constitute a representation and warranty by the Borrower of
the matters specified in subsections (b), (c), (d), (e) and (f) of
Section 5.2. In the event the Borrower fails to request extension or
conversion of any Eurodollar Loan in accordance with this Section, or
any such conversion or extension is not permitted or required by this
Section, then such Eurodollar Loan shall be automatically converted
into a Base Rate Loan at the end of the Interest Period applicable
thereto. The Agent shall give each Lender notice as promptly as
practicable of any such proposed extension or conversion affecting any
Loan.
3.3 PREPAYMENTS.
(a) VOLUNTARY PREPAYMENTS. The Borrower shall have the right
to prepay Loans in whole or in part from time to time, without premium
or penalty; PROVIDED, HOWEVER, that each partial prepayment of Loans
shall be in a minimum principal amount of $1,000,000 and integral
multiples of $100,000. Subject to the foregoing terms, amounts prepaid
under this Section 3.3(a) shall be applied as the Borrower may elect;
PROVIDED that if the Borrower fails to specify a voluntary prepayment
then such prepayment shall be applied first ratably to the Tranche A
Term Loan and the Tranche B Term Loan (in each case ratably to the
remaining Principal Amortization Payments thereof), in each case first
to Base Rate Loans and then to Eurodollar Loans in direct order of
Interest Period maturities. All prepayments under this Section 3.3(a)
shall be subject to Section 3.12 but shall be otherwise without premium
or penalty.
(b) MANDATORY PREPAYMENTS.
(i) REVOLVING COMMITTED AMOUNT. If at any time, the
sum of the aggregate principal amount of outstanding Revolving
Loans plus LOC Obligations outstanding PLUS outstanding
Swingline Loans shall exceed the Revolving Committed Amount,
the Borrower immediately shall prepay the Revolving Loans and
Swingline Loans and (after all Revolving Loans and Swingline
Loans have been repaid) cash collateralize the LOC
Obligations, in an amount sufficient to eliminate such excess.
(ii) EXCESS CASH FLOW. Within 120 days after the end
of each fiscal year (commencing with the fiscal year ending
November 30, 1999), the Borrower shall prepay the Loans in an
amount equal to (x) 50% of the Excess Cash Flow earned during
such prior fiscal year less (y) the amount of any voluntary
prepayments of the Tranche A Term Loan, the Tranche B Term
Loan and (to the extent accompanied by a reduction in the
Revolving Committed Amount) the Revolving Loans during such
prior fiscal year; PROVIDED, HOWEVER, that the Borrower shall
not be required to make
41
prepayments hereunder if, as of the most recently ended fiscal
year of the Borrower, the Leverage Ratio was less than 3.0 to
1.0. Any payments of Excess Cash Flow shall be applied as set
forth in clause (vi) below.
(iii) ASSET DISPOSITIONS. Immediately upon the
occurrence of any Asset Disposition Prepayment Event with Net
Cash Proceeds in excess of $1,000,000, the Borrower shall
prepay the Loans in an aggregate amount equal to the Net Cash
Proceeds of the related Asset Disposition not applied (or
caused to be applied) by the Consolidated Parties during the
related Application Period to the purchase, acquisition or
construction of Eligible Assets as contemplated by the terms
of Section 8.5(f) (such prepayment to be applied as set forth
in clause (vi) below); PROVIDED, HOWEVER, that if the Asset
Disposition occurs with respect to assets of the Divested
Businesses and the Leverage Ratio as of the end of the most
recent fiscal quarter of the Borrower was less than 3.75 to
1.0 at the time such Asset Disposition occurs, the Borrower
may apply Net Cash Proceeds from such Asset Disposition to
prepay the Senior Subordinated Notes or, after such time as
the pending litigation with respect to Anghel Laboratories,
Inc. shall have been settled or otherwise concluded to the
satisfaction of the Required Lenders, to redeem or repurchase
preferred stock.
(iv) DEBT ISSUANCES. Immediately upon receipt by any
Consolidated Party of proceeds from any Debt Issuance (other
than an Excluded Issuance), the Borrower shall prepay the
Loans in an aggregate amount equal to the Net Cash Proceeds of
such Debt Issuance to the Lenders (such prepayment to be
applied as set forth in clause (vi) below); PROVIDED, HOWEVER,
that if the Borrower shall have received in excess of
$75,000,000 in Net Cash Proceeds from the issuance of
additional subordinated debt on terms and conditions
satisfactory to the Required Lenders and as otherwise
permitted by Section 8.1(f), the Borrower may apply up to
$20,000,000 of such Net Cash Proceeds to prepay the Senior
Subordinated Notes or, after such time as the pending
litigation with respect to Anghel Laboratories, Inc. shall
have been settled or otherwise concluded to the satisfaction
of the Required Lenders, to redeem or repurchase preferred
stock.
(v) ISSUANCES OF EQUITY. Immediately upon receipt by
the Borrower of proceeds from any Equity Issuance (other than
an Excluded Issuance), the Borrower shall prepay the Loans in
an aggregate amount equal to 100% of the Net Cash Proceeds of
such Equity Issuance to the Lenders (such prepayment to be
applied as set forth in clause (vi) below).
(vi) APPLICATION OF MANDATORY PREPAYMENTS. All
amounts required to be paid pursuant to this Section 3.3(b)
shall be applied as follows: (A) with respect to all amounts
prepaid pursuant to Section 3.3(b)(i), to Revolving Loans and
Swingline Loans and (after all Revolving Loans and Swingline
Loans have been repaid) to a cash collateral account in
respect of LOC Obligations, (B) with respect to all amounts
prepaid pursuant to Section 3.3(b)(ii), (iii), (iv) and (v),
pro rata to the Tranche A Term Loan and the Tranche B Term
Loan (in each case to the
42
remaining Principal Amortization Payments thereof in direct
order of maturity). Promptly upon notification thereof, one or
more holders of the Tranche B Term Loans may decline to accept
a mandatory prepayment under Section 3.3(b)(ii), (iii), (iv)
or (v) to the extent there are sufficient Tranche A Term Loans
outstanding to be paid with such prepayment, in which case,
such declined prepayments shall be allocated pro rata among
the Tranche A Term Loans and the Tranche B Term Loans held by
Lenders accepting such prepayments. Within the parameters of
the applications set forth above, prepayments shall be applied
first to Base Rate Loans and then to Eurodollar Loans in
direct order of Interest Period maturities. All prepayments
under this Section 3.3(b) shall be subject to Section 3.12.
3.4 TERMINATION AND REDUCTION OF REVOLVING COMMITTED AMOUNT.
(a) VOLUNTARY REDUCTIONS. 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 $1,000,000 or in integral
multiples of $500,000 in excess thereof (or, if less, the full
remaining amount of the then applicable Revolving Committed Amount))
upon three Business Days prior written notice to the Agent; PROVIDED,
HOWEVER, no such termination or reduction shall be made which would
cause the aggregate principal amount of outstanding Revolving Loans
PLUS LOC Obligations PLUS Swingline Loans outstanding to exceed the
Revolving Committed Amount, unless, concurrently with such termination
or reduction, the Revolving 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) MATURITY DATE. The Revolving Commitments of the Lenders
and the LOC Commitment of the Issuing Lender shall automatically
terminate on the Maturity Date.
(c) GENERAL. The Borrower shall pay to the Agent for the
account of the Lenders in accordance with the terms of Section 3.5(b),
on the date of each termination or reduction of the Revolving Committed
Amount, the Commitment Fee accrued through the date of such termination
or reduction on the amount of the Revolving Committed Amount so
terminated or reduced.
3.5 FEES.
(a) COMMITMENT 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 "COMMITMENT FEE") on
the unused portion of the Revolving Committed Amount computed at a per
annum rate for each day during the applicable Commitment Fee
Calculation Period (hereinafter defined) at a rate equal to the
Applicable Percentage in effect from time to time. The Commitment Fee
shall commence to accrue on the Closing Date and shall be due and
payable in arrears on the last business day of each February, May,
August and November (and upon the Maturity Date) for the immediately
preceding quarter (or portion thereof) (each such quarter or portion
thereof for which the Commitment Fee is
43
payable hereunder being herein referred to as an "COMMITMENT FEE
CALCULATION PERIOD"), beginning with the first of such dates to occur
after the Closing Date.
(b) LETTER OF CREDIT FEES.
(i) LETTER OF CREDIT ISSUANCE FEE. In
consideration of the issuance of 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 (provided that the
Letter of Credit Fee shall not be less than $500 in
the aggregate for each Letter of Credit in any
event). The Letter of Credit Fee will be payable
quarterly in arrears on the last Business Day of each
February, May, August and November 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 the customary charges from time to time
of the Issuing Lender with respect to the issuance,
amendment, transfer, administration, cancellation and
conversion of, and drawings under, such Letters of
Credit (collectively, the "ISSUING LENDER FEES").
(c) ADMINISTRATIVE FEES. The Borrower agrees to pay to the
Agent, for its own account, 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 (such notice to be given within six
calendar months of the Lender's determination thereof) specifying in reasonable
detail the basis for the calculation of any additional amounts owed, the
Borrower shall be obligated to pay to such Lender such additional amount or
amounts as will compensate such Lender for such reduction. Each determination by
any such Lender of amounts
44
owing under this Section shall, absent manifest error, be conclusive and binding
on the parties hereto.
3.7 LIMITATION ON EURODOLLAR LOANS.
If on or prior to the first day of any Interest Period for any
Eurodollar Loan:
(a) the Agent determines (which determination shall be
conclusive) that by reason of circumstances affecting the relevant
market, adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate for such Interest Period; or
(b) the Required Lenders determine (which determination shall
be conclusive) and notify the Agent that the Eurodollar Rate will not
adequately and fairly reflect the cost to the Lenders of funding
Eurodollar Loans for such Interest Period;
then the Agent shall give the Borrower prompt notice thereof, and so long as
such condition remains in effect, the Lenders shall be under no obligation to
make additional Eurodollar Loans, Continue Eurodollar Loans, or to Convert Base
Rate Loans into Eurodollar Loans and the Borrower shall, on the last day(s) of
the then current Interest Period(s) for the outstanding Eurodollar Loans, either
prepay such Eurodollar Loans or Convert such Eurodollar Loans into Base Rate
Loans in accordance with the terms of this Credit Agreement.
3.8 ILLEGALITY.
Notwithstanding any other provision of this Credit Agreement, in the
event that it becomes unlawful for any Lender or its Applicable Lending Office
to make, maintain, or fund Eurodollar Loans hereunder, then such Lender shall
promptly notify the Borrower thereof and such Lender's obligation to make or
Continue Eurodollar Loans and to Convert Base Rate Loans into Eurodollar Loans
shall be suspended until such time as such Lender may again make, maintain, and
fund Eurodollar Loans (in which case the provisions of Section 3.10 shall be
applicable).
3.9 REQUIREMENTS OF LAW.
(a) 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:
(i) shall subject such Lender (or its Applicable Lending
Office) to any tax, duty, or other charge with respect to any
Eurodollar Loans, its Notes, or its obligation to make Eurodollar
Loans, or change the basis of taxation of any amounts payable to such
Lender (or its Applicable Lending Office) under this Credit Agreement
or its Notes in respect of any Eurodollar Loans (other than taxes
imposed on, or measured by, the overall net income or net capital of
such Lender by the jurisdiction in which such Lender is
45
organized, has its principal office or such Applicable Lending Office
or is doing business (other than solely in connection with this Credit
Agreement));
(ii) shall impose, modify, or deem applicable any
reserve, special deposit, assessment, or similar requirement (other
than the Eurodollar Reserve Requirement utilized in the determination
of the Adjusted Eurodollar Rate) relating to any extensions of credit
or other assets of, or any deposits with or other liabilities or
commitments of, such Lender (or its Applicable Lending Office),
including the Commitment of such Lender hereunder; or
(iii) shall impose on such Lender (or its Applicable
Lending Office) or on the United States market for certificates of
deposit or the London interbank market any other condition affecting
this Credit Agreement or its Notes or any of such extensions of credit
or liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such Lender
(or its Applicable Lending Office) of making, Converting into, Continuing, or
maintaining any Eurodollar Loans or to reduce any sum received or receivable by
such Lender (or its Applicable Lending Office) under this Credit Agreement or
its Notes with respect to any Eurodollar Loans, then the Borrower shall pay to
such Lender on demand such amount or amounts as will compensate such Lender for
such increased cost or reduction. If any Lender requests compensation by the
Borrower under this Section 3.9(a), the Borrower may, by notice to such Lender
(with a copy to the Agent), suspend the obligation of such Lender to make or
Continue Eurodollar Loans, or to Convert Base Rate Loans into Eurodollar Loans,
until the event or condition giving rise to such request ceases to be in effect
(in which case the provisions of Section 3.10 shall be applicable); PROVIDED
that such suspension shall not affect the right of such Lender to receive the
compensation so requested.
(b) Each Lender shall promptly notify the Borrower and the Agent of any
event of which it has knowledge, occurring after the date hereof, which will
entitle such Lender to compensation pursuant to this Section 3.9 and will
designate a different Applicable Lending Office if such designation will avoid
the need for, or reduce the amount of, such compensation and will not, in the
judgment of such Lender, be otherwise disadvantageous to it. Any Lender claiming
compensation under this Section 3.9 shall furnish to the Borrower and the Agent
a statement setting forth the additional amount or amounts to be paid to it
hereunder which shall be conclusive in the absence of manifest error. In
determining such amount, such Lender may use any reasonable averaging and
attribution methods.
3.10 TREATMENT OF AFFECTED LOANS.
If the obligation of any Lender to make any Eurodollar Loan or to
Continue, or to Convert Base Rate Loans into, Eurodollar Loans shall be
suspended pursuant to Section 3.8 or 3.9 hereof, such Lender's Eurodollar Loans
shall be automatically Converted into Base Rate Loans on the last day(s) of the
then current Interest Period(s) for such Eurodollar Loans (or, in the case of a
Conversion required by Section 3.8 hereof, on such earlier date as such Lender
may specify to the Borrower with a copy to the Agent) and, unless and until such
Lender gives notice as provided
46
below that the circumstances specified in Section 3.8 or 3.9 hereof
that gave rise to such Conversion no longer exist:
(a) to the extent that such Lender's Eurodollar Loans have
been so Converted, all payments and prepayments of principal that would
otherwise be applied to such Lender's Eurodollar Loans shall be applied
instead to its Base Rate Loans; and
(b) all Loans that would otherwise be made or Continued by
such Lender as Eurodollar Loans shall be made or Continued instead as
Base Rate Loans, and all Base Rate Loans of such Lender that would
otherwise be Converted into Eurodollar Loans shall remain as Base Rate
Loans.
If such Lender gives notice to the Borrower (with a copy to the Agent) that the
circumstances specified in Section 3.8 or 3.9 hereof that gave rise to the
Conversion of such Lender's Eurodollar Loans pursuant to this Section 3.10 no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Eurodollar Loans made by other Lenders are
outstanding, such Lender's Base Rate Loans shall be automatically Converted, on
the first day(s) of the next succeeding Interest Period(s) for such outstanding
Eurodollar Loans, to the extent necessary so that, after giving effect thereto,
all Loans held by the Lenders holding Eurodollar Loans and by such Lender are
held pro rata (as to principal amounts, interest rate basis, and Interest
Periods) in accordance with their respective Commitments.
3.11 TAXES.
(a) Any and all payments by the Borrower 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, or measured
by, its income or capital, 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 located or
organized or in which such Lender or the Agent is doing business (other
than solely by reason of this Agreement) 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 the Borrower 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) the Borrower shall make such
deductions, (iii) the Borrower shall pay the full amount deducted to
the relevant taxation authority or other authority in accordance with
applicable law, and (iv) the Borrower 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.
47
(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 and the Agent hereby represents that as of the
Closing Date (or at such time as it becomes a Lender or the Agent, as
the case may be, if later), all payments or principal, interest, and
fees to be made to such Lender or the Agent, as the case may be, by the
Borrower or any other Credit Party pursuant to this Agreement will be
totally exempt from Taxes which would require indemnification under
Section 3.11(a), 3.11(b) or 3.11(c). Each Lender organized under the
laws of a jurisdiction outside the United States, 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 complete
and accurate copies of (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), 3.11(b) or 3.11(c)
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 as such Lender shall reasonably request to assist such
Lender to recover such Taxes. The Borrower shall not be required to
make gross-up or indemnification payments under Section 3.11(a),
3.11(b) or 3.11(c) to any Lender or the Agent, as the
48
case may be, to the extent that the obligation to pay such additional
amounts or indemnification would not have arisen if the representation
set forth in the first sentence of Section 3.11(d) were true with
respect to such Lender or the Agent, as the case may be.
(f) If the Borrower is required to pay additional amounts to
or for the account of any Lender pursuant to this Section 3.11, then
such Lender will agree to use reasonable efforts to change the
jurisdiction of its Applicable Lending Office so as to eliminate or
reduce any such additional payment which may thereafter accrue if such
change, in the judgment of such Lender, is not otherwise
disadvantageous to such Lender.
(g) Within thirty (30) days after the date of any payment of
Taxes, the Borrower 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 Borrower hereunder, the agreements and obligations of the
Borrower 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.
(i) If any Lender or the Agent shall become aware that it is
entitled to receive a refund in respect to Taxes as to which it has
been indemnified by the Borrower pursuant to this Section 3.11, it
shall promptly notify the Borrower of the availability of such refund
and shall, within 30 days after receipt of a request by the Borrower,
apply for such refund at the expense of the Borrower. If any Lender
receives a refund in respect of any Taxes as to which it has been
indemnified by the Borrower pursuant to this Section 3.11, it shall
promptly notify the Borrower of such refund and shall, within 30 days
after receipt of a request by the Borrower (or promptly upon receipt,
if the Borrower has requested application for such refund pursuant
hereto), repay such refund (including any interest actually received
from the taxing authority with respect thereto) to the Borrower (to the
extent of amounts that have been paid by the Borrower under this
Section 3.11 with respect to such refund), net of all out-of-pocket
expenses of such Lender and Taxes imposed with respect to such refund;
PROVIDED that the Borrower, upon the request of such Lender, agrees to
return such refund (plus penalties, interest or other charges) to such
Lender in the event such Lender is required to repay such refund.
Nothing contained in this subsection 3.11(i) shall require any Lender
to make available any tax returns (or any other information relating to
its taxes that it deems confidential).
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 incurred by it as a
result of:
(a) any payment, prepayment, or Conversion of a Eurodollar
Loan for any reason (including, without limitation, the acceleration of
the Loans pursuant to Section 9.2) on a date other than the last day of
the Interest Period for such Loan; or
49
(b) any failure by the Borrower for any reason (including,
without limitation, the failure of any condition precedent specified in
Section 5 to be satisfied) to borrow, Convert, Continue, or prepay a
Eurodollar Loan on the date for such borrowing, Conversion,
Continuation, or prepayment specified in the relevant notice of
borrowing, prepayment, Continuation, or Conversion under this Credit
Agreement.
With respect to Eurodollar Loans, such indemnification may include an amount
equal to the excess, if any, of (a) the amount of interest which would have
accrued on the amount so prepaid, or not so borrowed, converted or continued,
for the period from the date of such prepayment or of such failure to borrow,
convert or continue to the last day of the applicable Interest Period (or, in
the case of a failure to borrow, convert or continue, the Interest Period that
would have commenced on the date of such failure) in each case at the applicable
rate of interest for such Eurodollar Loans provided for herein (excluding,
however, the Applicable Percentage included therein, if any) over (b) the amount
of interest (as reasonably determined by such Lender) which would have accrued
to such Lender on such amount by placing such amount on deposit for a comparable
period with leading banks in the interbank Eurodollar market. The covenants of
the Borrower set forth in this Section 3.12 shall survive the repayment of the
Loans, LOC Obligations and other obligations under the Credit Documents and the
termination of the Commitments hereunder.
3.13 PRO RATA TREATMENT.
Except to the extent otherwise provided herein:
(a) LOANS. Each Loan, each payment or (subject to the terms of
Section 3.3) prepayment of principal of any Loan or reimbursement
obligations arising from drawings under Letters of Credit, each payment
of interest on the Loans or reimbursement obligations arising from
drawings under Letters of Credit, each payment of Commitment Fees, each
payment of the Letter of Credit Fee, each reduction of the Revolving
Committed Amount and each conversion or extension of any Loan, shall be
allocated pro rata among the Lenders in accordance with the respective
principal amounts of their outstanding Loans and Participation
Interests.
(b) ADVANCES. No Lender shall be responsible for the failure
or delay by any other Lender in its obligation to make its ratable
share of a borrowing hereunder; PROVIDED, HOWEVER, that the failure of
any Lender to fulfill its obligations hereunder shall not relieve any
other Lender of its obligations hereunder. Unless the Agent shall have
been notified 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
50
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 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 offset, deduction, counterclaim or withholding
of any kind, at the Agent's office specified in
51
SCHEDULE 2.1(A) not later than 2:00 P.M. (Charlotte, North Carolina
time) on the date when due. Payments received after such time shall be
deemed to have been received on the next succeeding Business Day. The
Agent may (but shall not be obligated to) debit the amount of any such
payment which is not made by such time to any ordinary deposit account
of the Borrower maintained with the Agent (with notice to the
Borrower). The Borrower shall, at the time it makes any payment under
this Credit Agreement, specify to the Agent the Loans, LOC Obligations,
Fees, interest or other amounts payable by the Borrower hereunder to
which such payment is to be applied (and in the event that it fails so
to specify, or if such application would be inconsistent with the terms
hereof, the Agent shall distribute such payment to the Lenders in such
manner as the Agent may determine to be appropriate in respect of
obligations owing by the Borrower hereunder, subject to the terms of
Section 3.13(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 Eurodollar Loans, if the extension would cause the payment to
be made in the next following calendar month, then such payment shall
instead be made on the next preceding Business Day. Except as expressly
provided otherwise herein, all computations of interest and fees shall
be made on the basis of actual number of days elapsed over a year of
360 days. 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;
52
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" 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 the Borrower and each
Lender's share thereof. The Agent will make reasonable efforts to
maintain the accuracy of the subaccounts referred to in the preceding
sentence and to promptly update such subaccounts from time to time, as
necessary.
(c) The entries made in the accounts, Register and subaccounts
maintained pursuant to subsection (b) of this Section 3.16 (and, if
consistent with the entries of the Agent, subsection (a)) shall be
prima facie evidence of the existence and amounts of the
53
obligations of the Borrower therein recorded; PROVIDED, HOWEVER, that
the failure of any Lender or the Agent to maintain any such account,
such Register or such subaccount, as applicable, or any error therein,
shall not in any manner affect the obligation of the Borrower to repay
the Loans made by such Lender in accordance with the terms hereof.
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 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.
54
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 of the Credit Party Obligations 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:
(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
55
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, fees and expenses of counsel) incurred by the
Agent or such Lender in connection with such rescission or restoration,
including any such costs and expenses incurred in defending against any claim
alleging that such payment constituted a preference, fraudulent transfer or
similar payment under any bankruptcy, insolvency or similar law.
4.4 CERTAIN ADDITIONAL WAIVERS.
Without limiting the generality of the provisions of this Section 4,
each Guarantor hereby specifically waives the benefits of N.C. Gen. Stat. ▇▇.▇▇.
26-7 through 26-9, inclusive, to the extent applicable. Each Guarantor further
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
56
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 the Borrower and all of the Guarantors exceeds the amount of all
of the debts and liabilities (including contingent, subordinated, unmatured, and
unliquidated liabilities, but excluding the obligations of the Borrower and the
Guarantors hereunder) of the Borrower and all of the Guarantors; PROVIDED,
HOWEVER, that, for purposes of calculating the Pro Rata Shares of the Guarantors
in respect of any payment of Guaranteed Obligations, any Guarantor that became a
Guarantor subsequent to the date of any such payment shall be deemed to have
been a Guarantor on the date of such payment and the financial information for
such Guarantor as of the date such Guarantor became a Guarantor shall be
utilized for such Guarantor in connection with such payment; and (d)
"CONTRIBUTION SHARE" shall mean, for any Guarantor in respect of any Excess
Payment made by any other Guarantor, the ratio (expressed as a percentage) as of
the date of such Excess Payment of (i) the amount by which the aggregate present
fair salable value of all of its assets and properties exceeds the amount of all
debts and liabilities of such Guarantor (including contingent, subordinated,
unmatured, and unliquidated liabilities, but excluding the obligations of such
Guarantor hereunder) to (ii) the amount by which the aggregate present fair
salable value of all assets and other properties of the Borrower and all of the
Guarantors 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 Borrower and the
Guarantors hereunder) of the Borrower and all of the Guarantors 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. Notwithstanding the foregoing, all rights
of contribution against any Guarantor shall terminate from and after such time,
if ever, that such Guarantor shall be relieved of its obligations pursuant to
Section 8.4.
57
4.7 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):
(a) EXECUTED CREDIT DOCUMENTS. Receipt by the Agent of duly
executed copies of: (i) this Credit Agreement; (ii) the Notes; (iii)
the Collateral Documents and (iv) all other applicable Credit
Documents, each in form and substance acceptable to the Lenders in
their sole discretion.
(b) CORPORATE DOCUMENTS. Receipt by the Agent of the
following:
(i) CHARTER DOCUMENTS. Copies of the articles or
certificates of incorporation or other charter documents of
each Credit Party certified to be true and complete as of a
recent date by the appropriate Governmental Authority of the
state or other jurisdiction of its incorporation and certified
by a secretary or assistant secretary of such Credit Party to
be true and correct as of the Closing Date.
(ii) BYLAWS. A copy of the bylaws of each Credit
Party certified by a secretary or assistant secretary of such
Credit Party to be true and correct as of the Closing Date.
(iii) RESOLUTIONS. Copies of resolutions of the Board
of Directors of each Credit Party approving and adopting the
Credit Documents to which it is a party, the transactions
contemplated therein and authorizing execution and delivery
thereof, certified by a secretary or assistant secretary of
such Credit Party to be true and correct and in force and
effect as of the Closing Date.
(iv) GOOD STANDING. Copies of (A) 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
reasonably be expected to have a Material Adverse Effect and
(B) to the extent available, a certificate indicating payment
of all corporate franchise taxes certified as of a recent date
by the appropriate governmental taxing authorities.
58
(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 and the Lenders
of (i) the financial statements referred to in Section 6.1(a) and (b),
(ii) satisfactory projections including balance sheets and income and
cash flow statements for each twelve month period through the twelve
month period ending November 30, 2006 and (iii) such other information
relating to the Borrower and its Subsidiaries or the Acquired Company
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 legal
opinions dated as of the Closing Date from counsel to the Credit
Parties in form and substance satisfactory to the Agent.
(e) ENVIRONMENTAL REPORTS. Receipt by the Agent in form and
substance satisfactory to it of environmental assessment reports and
related documents of a recent date with respect to all Real Properties.
(f) 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 such Collateral, copies of the
financing statements on file in such jurisdictions and
evidence that no Liens exist other than Permitted Liens;
(ii) duly executed UCC financing statements for each
appropriate jurisdiction as is necessary, in the Agent's sole
discretion, to perfect the Agent's security interest in the
Collateral;
(iii) searches of ownership of intellectual property in
the appropriate governmental offices and such
patent/trademark/copyright filings as requested by the Agent
in order to perfect the Agent's security interest in the
Collateral;
(iv) all stock certificates evidencing the Capital Stock
pledged to the Agent pursuant to the Pledge Agreement,
together with duly executed in blank undated stock powers
attached thereto (unless, with respect to the pledged Capital
Stock of any Foreign Subsidiary, such stock powers are deemed
unnecessary by the Agent in its reasonable discretion under
the law of the jurisdiction of incorporation of such Person);
59
(v) such patent/trademark/copyright filings as requested
by the Agent in order to perfect the Agent's security interest
in the Collateral;
(vi) all instruments and chattel paper in the possession
of any of the Credit Parties, together with allonges or
assignments as may be necessary or appropriate to perfect the
Agent's security interest in the Collateral; and
(vii) duly executed consents as are necessary, in the
Agent's sole discretion, to perfect the Lenders' security
interest in the Collateral.
(g) 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.
(h) REAL PROPERTY COLLATERAL. The Agent shall have received,
in form and substance reasonably satisfactory to the Agent:
(i) fully executed and notarized mortgages, deeds of
trust or deeds to secure debt (each, as the same may be
amended, modified, restated or supplemented from time to time,
a "MORTGAGE INSTRUMENT" and collectively the "MORTGAGE
INSTRUMENTS") encumbering the fee interest and/or leasehold
interest of any Credit Party (to the extent deemed material by
the Agent) in each real property asset designated in SCHEDULE
6.19(A) (each a "MORTGAGED PROPERTY" and collectively the
"MORTGAGED REAL PROPERTIES");
(ii) a title report obtained by the Credit Parties to
the extent deemed necessary by the Agent) in respect of each
of the Mortgaged Properties;
(iii) in the case of each material real property
leasehold interest of any Credit Party constituting Mortgaged
Property, (a) such estoppel letters, consents and waivers from
the landlords on such real property as may be required by the
Agent, which estoppel letters shall be in the form and
substance reasonably satisfactory to the Agent and (b)
evidence that the applicable lease, a memorandum of lease with
respect thereto, or other evidence of such lease in form and
substance reasonably satisfactory to the Agent, has been or
will be recorded in all places to the extent necessary or
desirable, in the reasonable judgment of the Agent, so as to
enable the Mortgage Instrument encumbering such leasehold
interest to effectively create a valid and enforceable first
priority lien (subject to Permitted Liens) on such leasehold
interest in favor of the Agent (or such other Person as may be
required or desired under local law) for the benefit of
Lenders;
(iv) the Agent shall have received, and the title
insurance company issuing the policy referred to in Section
5.1(i) (the "TITLE INSURANCE COMPANY") shall have received,
maps or plats of an as-built survey of the sites of the real
60
property covered by the Mortgage Instruments certified to the
Agent and the Title Insurance Company in a manner reasonably
satisfactory to each of the agent and the Title Insurance
Company, dated a date reasonably satisfactory to the Agent and
the Title Insurance Company by an independent professional
licensed land surveyor, which maps or plats and the surveys on
which they are based shall be made in accordance with
standards that enable the Title Insurance Company to issue the
policies referred to in Section 5.1(i)(v) below without
exception for "Survey matters", except for matters as are
reasonably acceptable to the Agent;
(v) ALTA mortgagee title insurance policies issued by
First American Title Insurance Company (the "MORTGAGE
POLICIES"), in amounts not less than the respective amounts
designated in SCHEDULE 6.19(A) with respect to any particular
Mortgaged Property, assuring the Agent that each of the
Mortgage Instruments creates a valid and enforceable first
priority mortgage lien on the applicable Mortgaged Property,
free and clear of all defects and encumbrances except
Permitted Liens, which Mortgage Policies shall be in form and
substance reasonably satisfactory to the Agent and shall
provide for affirmative insurance and such reinsurance as the
Agent may reasonably request, all of the foregoing in form and
substance reasonably satisfactory to the Agent;
(vi) Evidence, which may be in the form of a letter
from an insurance broker or a municipal engineer or certified
on a survey, as to whether (a) any Mortgaged Property (an
"FLOOD HAZARD PROPERTY") is in an area designated by the
Federal Emergency Management Agency as having special flood or
mud slide hazards and (b) the community in which such Flood
Hazard Property is located is participating in the National
Flood Insurance Program;
(vii) If there are any Flood Hazard Properties, a
Credit Party's written acknowledgment of receipt of written
notification from the Agent (a) as to the existence of each
such Flood Hazard Property and (b) as to whether the community
in which each such Flood Hazard Property is located is
participating in the National Flood Insurance Program;
(viii) If there are maps or plats of an as-built
survey of the sites of the Mortgaged Properties certified to
the Agent and the Title Insurance Company in a manner
reasonably satisfactory to them, dated a date satisfactory to
the Agent and the Title Insurance Company by an independent
professional licensed land surveyor reasonably satisfactory to
the Agent and the Title Insurance Company, which maps or plats
and the surveys on which they are based shall be sufficient to
delete any standard printed survey exception contained in the
applicable title policy and be made in accordance with the
Minimum Standard Detail Requirements for Land Title Surveys
jointly established and adopted by the American Land Title
Association and the American Congress on Surveying and Mapping
in 1992 or 1997, and, without limiting the generality of the
foregoing, there shall be surveyed and shown on such maps,
plats or surveys the following: (A) the locations on such
sites of all the buildings, structures and other
61
improvements and the established building setback lines; (B)
the lines of streets abutting the sites and width thereof; (C)
all access and other easements appurtenant to the sites
necessary to use the sites; (D) all roadways, paths,
driveways, easements, encroachments and overhanging
projections and similar encumbrances affecting the site,
whether recorded, apparent from a physical inspection of the
sites or otherwise known to the surveyor; (E) any
encroachments on any adjoining property by the building
structures and improvements on the sites; and (F) if the site
is described as being on a filed map, a legend relating the
survey to said map; and
(ix) Evidence reasonably satisfactory to the Agent
that each of the Mortgaged Properties, and the uses of the
Mortgaged Properties, are in compliance in all material
respects with all applicable laws, regulations and ordinances
including without limitation health and environmental
protection laws, erosion control ordinances, storm drainage
control laws, doing business and/or licensing laws, zoning
laws (the evidence submitted as to zoning should include the
zoning designation made for each of the Real Properties, the
permitted uses of each such Real Properties under such zoning
designation and zoning requirements as to parking, lot size,
ingress, egress and building setbacks) and laws regarding
access and facilities for disabled persons including, but not
limited to, the federal Architectural Barriers Act, the Fair
Housing Amendments Act of 1988, the Rehabilitation Act of 1973
and the Americans with Disabilities Act of 1990.
(i) 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.
(j) CORPORATE STRUCTURE. The corporate capital and ownership
structure of the Consolidated Parties (after giving effect to the
purchase of the Acquired Company) shall be as described in SCHEDULE
5.1(J).
(k) GOVERNMENT CONSENT. Receipt by the Agent of evidence that
all governmental, shareholder and material third party consents
(including ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ clearance) and approvals necessary in
connection with the acquisition of the Acquired Company and the related
financings and other transactions contemplated hereby and expiration of
all applicable waiting periods without any action being taken by any
authority that could restrain, prevent or impose any material adverse
conditions on the acquisition of the Acquired Company or such other
transactions or that could seek or threaten any of the foregoing, and
no law or regulation shall be applicable which in the judgment of the
Agent could have such effect.
(l) MATERIAL ADVERSE EFFECT. No material adverse change shall
have occurred since November 29, 1997 in the condition (financial or
otherwise), business or management of the Consolidated Parties taken as
a whole.
62
(m) LITIGATION. There shall not exist (i) any order, decree,
judgment, ruling or injunction which restrains the consummation of the
acquisition of the Acquired Company in the manner contemplated by the
Purchase Agreement or (ii) any pending or threatened action, suit,
investigation or proceeding against a Consolidated Party that could
reasonably be expected to have a Material Adverse Effect.
(n) EQUITY INVESTMENT. Receipt by the Agent of satisfactory
evidence that a cash equity investment of at least $20,000,000 shall
have been received by the Borrower on terms and conditions satisfactory
to the Agent.
(o) SUBORDINATED DEBT. The Borrower shall have received
proceeds from the issuance of Senior Subordinated Notes on terms and
conditions acceptable to the Lenders in an aggregate principal amount
not less than $13,000,000.
(p) PREFERRED EQUITY. The Borrower shall have received
proceeds from the issuance of preferred stock on terms and conditions
acceptable to the Lenders in an aggregate principal amount not less
than $7,000,000.
(q) PURCHASE AGREEMENT. There shall not have been any material
modification, amendment, supplement or waiver to the Purchase Agreement
without the prior written consent of the Agent, including, but not
limited to, any material modification, amendment, supplement or waiver
relating to the amount or type of consideration to be paid in
connection with the acquisition of the Acquired Company and the
contents of all disclosure schedules and exhibits, and the acquisition
of the Acquired Company shall have been consummated in accordance with
the terms of the Purchase Agreement (without waiver of any conditions
precedent to the obligations of the buyer thereunder) and the purchase
price related to such acquisition shall not exceed $116,500,000
(subject to a purchase price adjustment not greater than $5,000,000)
The Agent shall have received a final Purchase Agreement, together with
all exhibits and schedules thereto, certified by an officer of the
Borrower.
(r) EBITDA OF ACQUIRED COMPANY. The Agent shall have
determined to its reasonable satisfaction that the net income of the
Acquired Company before deductions for interest, taxes, depreciation
and amortization expenses was at least $13,000,000 for the twelve month
period ending on March 31, 1998.
(s) OFFICER'S CERTIFICATES. The Agent shall have received a
certificate or certificates executed by a responsible officer of the
Borrower as of the Closing Date stating that (A) each Consolidated
Party is in material compliance with all material existing financial
obligations, (B) all material governmental, shareholder and third party
consents and approvals, if any, with respect to the Credit Documents
and the transactions contemplated thereby have been obtained, (C) no
action, suit, investigation or proceeding is pending or threatened in
any court or before any arbitrator or governmental instrumentality that
purports to affect any Consolidated Party or any transaction
contemplated by the Credit Documents, if such action, suit,
investigation or proceeding could reasonably be expected to have a
Material Adverse Effect, (D) after receipt of proceeds of the Loans
hereunder, the
63
transactions contemplated by the Purchase Agreement shall be
consummated on the Closing Date in accordance with the terms thereof
and (E) 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.
(t) 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.
(u) 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, any portion of the Tranche A Term Loan or any portion
of the Tranche B Term Loan, an appropriate Notice of Borrowing or
Notice of Extension/Conversion or (ii) in the case of any Letter of
Credit, an appropriate request for issuance in accordance with the
provisions of Section 2.2(b);
(b) The representations and warranties set forth in Section 6
shall, subject to the limitations set forth therein, be true and
correct in all material respects as of such date (except for those
which expressly relate to an earlier date);
(c) No Default or Event of Default shall exist and be
continuing either prior to or after giving effect thereto;
(d) Immediately after giving effect to the making of such Loan
(and the application of the proceeds thereof) or to the issuance of
such Letter of Credit, as the case may be, (i) the sum of the aggregate
principal amount of outstanding Revolving Loans PLUS LOC Obligations
outstanding shall not exceed the Revolving Committed Amount, and (ii)
the LOC Obligations shall not exceed the LOC Committed Amount.
64
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 Borrower of the correctness of
the matters specified in subsections (b), (c) and (d) above.
SECTION 6
REPRESENTATIONS AND WARRANTIES
The Credit Parties hereby represent to the Agent and each Lender that:
6.1 FINANCIAL CONDITION.
(a)(i) The audited consolidated balance sheet and the
consolidated statement of income and retained earnings and the
consolidated statement of cash flows as of November 29, 1997 and for
the year ended, and the audited consolidated balance sheet and the
consolidated statement of income and retained earnings and the
consolidated of cash flows as of November 30, 1996 and for the eight
months then ended, and the audited consolidated balance sheet and the
consolidated statement of income and retained earnings and the
consolidated statement of cash flows as of December 31, 1995 and for
the year then ended have heretofore been furnished to each Lender. Such
financial statements (including the notes thereto) (A) have been
audited by Price Waterhouse, LLP, (B) have been prepared in accordance
with GAAP consistently applied throughout the periods covered thereby
and (C) present fairly (on the basis disclosed in the footnotes to such
financial statements) the consolidated financial condition, results of
operations and cash flows of the Borrower and its Subsidiaries as of
such date and for such periods. The unaudited interim balance sheets of
the Borrower and its Subsidiaries as at the end of, and the related
unaudited interim statements of earnings and of cash flows for the
period ended February 28, 1998 have heretofore been furnished to each
Lender. Such interim financial statements for each such quarterly
period, (A) have been prepared in accordance with GAAP consistently
applied throughout the periods covered thereby and (B) present fairly
in all material respects consolidated financial condition in each case
subject to year end audit adjustments and the absence of footnotes,
results of operations and cash flows of the Borrower and its
Subsidiaries as of such date and for such periods. During the period
from November 29, 1997 to and including the Closing Date, there has
been no sale, transfer or other disposition by the Borrower or any of
its Subsidiaries of any material part of the business or property of
the Borrower and its Subsidiaries, taken as a whole, and no purchase or
other acquisition by any of them of any business or property (including
any capital stock of any other person) material in relation to the
consolidated financial condition of the Borrower and its Subsidiaries,
taken as a whole, in each case, which, is not reflected in the
foregoing financial statements or in the notes thereto and has not
otherwise been disclosed in writing to the Lenders on or prior to the
Closing Date.
(ii) The financial information of the Acquired Company and its
Subsidiaries referred to in Section 2.4.1 and Section 3.6 of the
Purchase Agreement has heretofore been furnished to each Lender. Such
financial information fairly presents the financial condition,
65
results of operations, retained earnings and cash flows for the
Acquired Company and its Subsidiaries for the dates and periods therein
indicated Such financial information was prepared in accordance with
GAAP consistently applied throughout the periods covered thereby except
as otherwise noted in the Purchase Agreement, in the schedules thereto
or in SCHEDULE 6.1.
(b) The pro forma consolidated balance sheet of the
Consolidated Parties as of the Closing Date giving effect to the
Acquisition in accordance with the terms of the Purchase Agreement and
reflecting estimated purchase price accounting adjustments, has
heretofore been furnished to each Lender. Such pro forma balance sheet
is based upon reasonable assumptions made known to the Lenders and upon
information not known to be incorrect or misleading in any material
respect.
(c) The financial statements delivered to the Lenders pursuant
to Section 7.1(a) and (b), (i) have been prepared in accordance with
GAAP (except as may otherwise be permitted under Section 7.1(a) and
(b)) and (ii) present fairly in all material respects (on the basis
disclosed in the footnotes to such financial statements) the
consolidated and consolidating financial condition, results of
operations and cash flows of the Consolidated Parties as of such date
and for such periods in the case of the financial statements referred
to in Section 7.1(b), subject to year and audit adjustments and the
absence of footnotes.
6.2 NO MATERIAL CHANGE.
Since November 29, 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 or as set forth on SCHEDULE 6.2, 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, to the extent applicable, under the laws of
the jurisdiction of its incorporation or organization, (b) has the corporate
power and authority 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 reasonably be 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
66
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 (i) consents, authorizations, notices and
filings described in SCHEDULE 6.4, all of which have been obtained or made or
have the status described in such SCHEDULE 6.4 and (ii) 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 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) to the extent it could reasonably be expected to have a Material
Adverse Effect 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 reasonably be expected to have a Material Adverse
Effect. No Default or Event of Default has occurred or exists except as
previously disclosed in writing to the Lenders.
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.
67
6.8 LITIGATION.
Set forth on Schedule 6.8 is a list of all litigation matters with
respect to which any Credit Party is a party as of the Closing Date except for
any such matters that, if adversely determined, would not result in liability in
excess of $25,000. 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 that could be reasonably expected to
have a Material Adverse Effect.
6.9 TAXES.
Each Consolidated Party has filed, or caused to be filed, all material
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 material 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.
6.10 COMPLIANCE WITH LAW.
Each Consolidated Party is in compliance with all Requirements of Law
and all other laws, rules, regulations, orders and decrees (including without
limitation Environmental Laws) applicable to it, or to its properties, unless
such failure to comply could not reasonably be expected to have a Material
Adverse Effect.
6.11 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, utilizing the actuarial assumptions used in
such Plan's most
68
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 Consolidated Party or any ERISA Affiliate has
agreed or is required to indemnify any person against any such
liability.
(e) Neither any Consolidated Party nor any ERISA Affiliates
has any material liability with respect to "expected post-retirement
benefit obligations" within the meaning of the Financial Accounting
Standards Board Statement 106.
6.12 SUBSIDIARIES.
Set forth on SCHEDULE 6.12 is a complete and accurate list of all
Subsidiaries of each Consolidated Party. Information on SCHEDULE 6.12 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). Neither the Borrower nor
any other Consolidated Party, other than as set forth in SCHEDULE 6.12, 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. SCHEDULE 6.12 may be updated
from time to time by the Borrower by giving written notice thereof to the Agent.
69
6.13 GOVERNMENTAL REGULATIONS, ETC.
(a) No part of the Letters of Credit or proceeds of the Loans
will be used, directly or indirectly, for the purpose of purchasing or
carrying any "margin stock" within the meaning of Regulation U, or for
the purpose of purchasing or carrying or trading in any securities
except as contemplated in connection with the purchase of the Acquired
Company or the securities of any other Subsidiary of the Borrower. If
requested by any Lender or the Agent, the Borrower will furnish to the
Agent and each Lender a statement to the foregoing effect in conformity
with the requirements of FR Form U-1 referred to in Regulation U. No
indebtedness being reduced or retired out of the proceeds of the Loans
was or will be incurred for the purpose of purchasing or carrying any
margin stock within the meaning of Regulation U or any "margin
security" within the meaning of Regulation T. "Margin stock" within the
meaning of Regulation U does not constitute more than 25% of the value
of the consolidated assets of the Consolidated Parties. None of the
transactions contemplated by this Credit Agreement (including, without
limitation, the direct or indirect use of the proceeds of the Loans)
will violate or result in a violation of the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended, or
regulations issued pursuant thereto, or Regulation T, U or X.
(b) No Consolidated Party is subject to regulation under the
Public Utility Holding Company Act of 1935, the Federal Power Act or
the Investment Company Act of 1940, each as amended. In addition, no
Consolidated Party is (i) an "investment company" registered or
required to be registered under the Investment Company Act of 1940, as
amended, and is not controlled by such a company, or (ii) a "holding
company", or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary" of a "holding
company", within the meaning of the Public Utility Holding Company Act
of 1935, as amended.
(c) No director, executive officer or principal shareholder of
any Consolidated Party is a director, executive officer or principal
shareholder of any Lender. For the purposes hereof the terms
"director", "executive officer" and "principal shareholder" (when used
with reference to any Lender) have the respective meanings assigned
thereto in Regulation O issued by the Board of Governors of the Federal
Reserve System.
(d) Each Consolidated Party has obtained and holds in full
force and effect, all material 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) To the best of each Consolidated Party's knowledge, 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.
70
6.14 PURPOSE OF LOANS AND LETTERS OF CREDIT.
The proceeds of the Loans hereunder shall be used solely by the
Borrower to (i) finance a portion of the purchase price of the Acquired Company
and to pay certain fees and expenses related thereto, (ii) refinance existing
Indebtedness and (iii) provide for working capital and other 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, to
secure obligations to Comsat Corporation relating to letters of credit obtained
for the benefit of the Acquired Company and obligations not otherwise
aforementioned relating to transactions entered into by the applicable account
party in the ordinary course of business.
6.15 ENVIRONMENTAL MATTERS.
Except any of the following that 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 "REAL PROPERTIES") and all
operations at the Real Properties are in compliance with all applicable
Environmental Laws, and there is no violation of any Environmental Law
with respect to the Real Properties or the businesses operated by the
Consolidated Parties (the "BUSINESSES"), and there are no conditions
relating to the Businesses or Real Properties that could give rise to
liability under any applicable Environmental Laws.
(b) None of the Real Properties contains, or has previously
contained, any Materials of Environmental Concern at, on or under the
Real 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 Real Properties or the
Businesses, nor does any Consolidated Party have knowledge 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 Real Properties, or generated,
treated, stored or disposed of at, on or under any of the Real
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
reasonably be expected to give rise to liability under, any applicable
Environmental Law.
(e) No judicial proceeding or governmental or administrative
action is pending or, to the best knowledge of any Credit Party,
threatened, under any Environmental Law to which any Consolidated Party
is or will be named as a party, nor are there any consent
71
decrees or other decrees, consent orders, administrative orders or
other orders, or other administrative or judicial requirements
outstanding under any Environmental Law with respect to the
Consolidated Parties, the Real Properties or the Businesses.
(f) There has been no Release or, threat of Release of
Materials of Environmental Concern at or from the Real Properties, or
arising from or related to the operations (including, without
limitation, disposal) of any Consolidated Party in connection with the
Real 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.
6.16 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 be reasonably expected to have a Material Adverse Effect. Set
forth on SCHEDULE 6.16 is a list of all patents and patent applications and all
federally registered trademarks, trademark applications, copyrights and
copyright applications, tradename applications, service marks and service ▇▇▇▇
applications owned, or applied for, by each Consolidated Party or that any
Consolidated Party has licensed (if such license has been federally recorded).
Except as provided on SCHEDULE 6.16, 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 be reasonably expected to have a
Material Adverse Effect. SCHEDULE 6.16 may be updated from time to time by the
Borrower by giving written notice thereof to the Agent.
6.17 SOLVENCY.
Each Credit Party is and, after consummation of the transactions
contemplated by this Credit Agreement (including without limitation the
acquisition of the Acquired Company by the Borrower), will be Solvent.
6.18 INVESTMENTS.
All Investments of each Consolidated Party are Permitted Investments.
6.19 LOCATION OF COLLATERAL.
Set forth on SCHEDULE 6.19(A) is a list of all Mortgaged Properties
with street address, county and state where located. Set forth on SCHEDULE
6.19(B) 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 6.19(C) is the chief executive office and principal place of
business of each Consolidated Party. SCHEDULE 6.19(A), 6.19(B) and 6.19(C) may
be updated from time to time by the Borrower giving written notice thereof to
the Agent, but the Borrower shall not be required to
72
update Schedule 6.19(b) with respect to any location unless the tangible
personal property so located has a net book value greater than $100,000
individually or $500,000 in the aggregate.
6.20 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, taken as a whole, contains any untrue
statement of a material fact or omits to state a material fact known to any
Credit Party (or which reasonably should have been known by any Credit Party)
necessary in order to make the statements contained therein or herein not
misleading.
6.21 NO BURDENSOME RESTRICTIONS.
No Consolidated Party is a party to any agreement or instrument or
subject to any other obligation or any charter or corporate restriction or any
provision of any applicable law, rule or regulation which, individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect.
6.22 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.
6.23 NATURE OF BUSINESS.
As of the Closing Date, the Consolidated Parties are engaged in the
business of manufacturing VSAT antennas, systems and products for satellite and
terrestrial communications, and products for cellular and other wireless
communications applications.
6.24 REPRESENTATIONS AND WARRANTIES FROM PURCHASE AGREEMENT.
To the knowledge of the Borrower, as of the Closing Date, each of the
representations and warranties made in the Purchase Agreement by each of the
parties thereto is true and correct in all material respects.
6.25 YEAR 2000 COMPLIANCE.
The Borrower 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 and vendors) that could be adversely affected by the
"Year 2000 Problem" (that is, the risk that computer applications used by the
Borrower or any of its Subsidiaries (or suppliers and venders) 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
73
Year 2000 Problem on a timely basis, and (iii) to date, implemented that plan in
accordance with such timetable. The Borrower believes that all computer
applications (including those of its suppliers and vendors) that are material to
its or any of its Subsidiaries' business and operations will on a timely basis
be able to perform properly date-sensitive functions for all dates before and
after January 1, 2000 (that is, be "Year 2000 compliant"), 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 Borrower 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 120 days after the close of each fiscal year of the
Consolidated Parties, a consolidated and consolidating balance sheet of
the Consolidated Parties, as of the end of such fiscal year, together
with related consolidated and consolidating income statements and
statements of retained earnings and of cash flows for such fiscal year,
setting forth in comparative form consolidated and consolidating
figures for the preceding fiscal year (commencing with the 1999 fiscal
year), all such financial information described above to be in
reasonable form and detail and, in the case of consolidated financial
statements, audited by independent certified public accountants of
recognized national standing reasonably acceptable to the Agent and
whose opinion shall be to the effect that such financial statements
have been prepared in accordance with GAAP (except for changes with
which such accountants concur) and shall not be limited as to the scope
of the audit or qualified as to the status of the Consolidated Parties
as a going concern.
(b) QUARTERLY FINANCIAL STATEMENTS. As soon as available, and
in any event within 60 days after the close of each fiscal quarter of
the Consolidated Parties (other than the fourth fiscal quarter, in
which case 120 days after the end thereof) a consolidated and
consolidating balance sheet of the Consolidated Parties, as of the end
of such fiscal quarter, together with related consolidated and
consolidating income statements and statements of retained earnings and
of cash flows for such fiscal quarter in each case setting forth in
comparative form consolidated and consolidating figures for the
corresponding period of the preceding fiscal year (commencing with the
fifth fiscal quarter ending after the Closing Date) and consolidated
budget projections, all such financial information described above to
be in reasonable form and detail and reasonably acceptable to the
Agent, and accompanied by a certificate of the chief financial officer
of the Borrower to the effect that such quarterly financial statements
fairly present in all material respects the financial condition of the
74
Consolidated Parties and have been prepared in accordance with GAAP,
subject to changes resulting from audit and normal year-end audit
adjustments and the absence of footnotes.
(c) MONTHLY FINANCIAL STATEMENTS. As soon as available, and in
any event within 30 days after the close of each month of the
Consolidated Parties financial statements as agreed to between the
Borrower and the Agent in reasonable form and detail and reasonably
acceptable to the Agent, and accompanied by a certificate of the chief
financial officer of the Borrower to the effect that such monthly
financial statements fairly present in all material respects the
financial condition of the Consolidated Parties subject to changes
resulting from audit and normal year-end audit adjustments and the
absence of footnotes.
(d) 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(D), (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. At the time of delivery of the financial statements provided
for in Section 7.1(c) above, a certificate of the chief financial
officer of the Borrower stating that no Default or Event of Default
exists, or if any Event of Default does exist, specifying the nature
and extent thereof and what action the Credit Parties propose to take
with respect thereto.
(e) ANNUAL BUSINESS PLAN AND BUDGETS. Not later than 30 days
after the end of each fiscal year of the Borrower, beginning with the
fiscal year ending November 30, 1998, an annual business plan and
budget of the Consolidated Parties containing, among other things, pro
forma financial statements for the next fiscal year on a quarterly
basis and for the two fiscal years thereafter on an annual basis.
(f) COMPLIANCE WITH CERTAIN PROVISIONS OF THE CREDIT
AGREEMENT. Within 120 days after the end of each fiscal year of the
Borrower, a certificate containing information regarding (i) the
calculation of Excess Cash Flow and all payments made pursuant to
Section 8.7 and (ii) the amount of all Asset Dispositions, Debt
Issuances and Equity Issuances that were made during the prior fiscal
year.
(g) 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.
(h) 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.
75
(i) REPORTS. Promptly upon transmission or receipt thereof,
(i) copies of any filings and registrations with, and reports to or
from, the Securities and Exchange Commission, or any successor agency,
and copies of all financial statements, proxy statements and similar
information as any Consolidated Party shall send to its shareholders or
to a holder of any Indebtedness in excess of $1,000,000 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.
(j) NOTICES. Upon an Executive Officer of the Borrower
obtaining knowledge thereof, the Borrower promptly will give written
notice to the Agent 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 reasonably be expected to have a Material Adverse Effect,
or (C) any notice or determination concerning the imposition of any
withdrawal liability by a Multiemployer Plan against such 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.
(k) ERISA. Upon an Executive Officer of the Borrower obtaining
knowledge thereof, the Borrower promptly will give written notice to
the Agent (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 could reasonably be expected to 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 Borrower or any of its ERISA Affiliates,
or of a determination that any Multiemployer Plan is in reorganization
or insolvent (both within the meaning of Title IV of ERISA); (iii) the
failure to make full payment on or before the due date (including
extensions) thereof of all amounts which 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 reasonably be expected to 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
76
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).
(l) ENVIRONMENTAL.
(i) Upon the reasonable written request of the Agent
following any material Release of Materials of Environmental
Concern or if the Agent shall otherwise determine in its
reasonable discretion that cause shall exist, the Credit
Parties will furnish or cause to be furnished to the Agent, at
the Borrower's 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 Real Properties (as defined in Section 6.16)
and as to the compliance by any Consolidated Party with
Environmental Laws at such Real 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 Real 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 Borrower 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 Real Properties to the extent necessary
to be in compliance with all Environmental Laws and with the
validly issued orders and directives of all Governmental
Authorities with jurisdiction over such Real Properties to the
extent any failure could reasonably be expected to have a
Material Adverse Effect.
(m) 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 all federally registered trademarks, service marks,
tradenames and copyrights awarded to any Consolidated Party since the
last day of the immediately preceding fiscal year and (ii) a list of
all patent applications and all federally registered trademark
applications, service ▇▇▇▇ applications, trade name applications and
copyright applications submitted by any Consolidated Party since the
last day of the immediately preceding fiscal year and the status of
each such application, all in such form as shall be reasonably
satisfactory to the Agent.
77
(n) OTHER INFORMATION. With reasonable promptness upon any
such request, such other information regarding the business, properties
or financial condition of any Consolidated Party as the Agent or the
Required Lenders may reasonably request.
7.2 PRESERVATION OF EXISTENCE AND FRANCHISES.
Except as a result of or in connection with a dissolution, merger or
disposition of a Subsidiary permitted under Section 8.4 or Section 8.5, 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 corporate existence
and material 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 reasonably be expected to have a Material Adverse Effect.
7.5 PAYMENT OF TAXES AND OTHER INDEBTEDNESS.
Each Credit Party will, and will cause each of its Subsidiaries to, pay
and discharge (a) all taxes, assessments and governmental charges or levies
imposed upon it, or upon its income or profits, or upon any of its properties,
before they shall become delinquent, (b) all lawful claims (including claims for
labor, materials and supplies) which, if unpaid, could reasonably be expected to
give rise to a Lien upon any of its properties, and (c) except as prohibited
hereunder, all of its other Indebtedness as it shall become due; PROVIDED,
HOWEVER, that no Consolidated Party shall be required to pay any such tax,
assessment, charge, levy, claim or Indebtedness which is being contested in good
faith by appropriate proceedings and as to which adequate reserves therefor have
been established in accordance with GAAP, unless the failure to make any such
payment (i) could give rise to an immediate right to foreclose on a Lien
securing such amounts or (ii) could reasonably be expected to have a Material
Adverse Effect.
7.6 INSURANCE.
(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. The Agent shall be named as loss payee or
mortgagee, as its interest may appear, and/or additional insured with
respect to any
78
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 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)
determined by the board of directors of the Borrower to be 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 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 net
proceeds of such insurance in excess of $1,000,000, such Credit Party
will immediately pay over such proceeds to the Agent, for payment on
the Credit Party Obligations for application as an Asset Disposition as
set forth in Section 3.3(b)(iii); 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 (including reimbursement of any
Credit Party for expenditures previously made therefore) 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 reasonable
condition within 180 days after the date such Collateral was lost,
damaged or destroyed.
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 reasonable 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 in the reasonable conduct of its business, to the extent and
in the manner customary for companies in similar businesses.
79
7.8 PERFORMANCE OF OBLIGATIONS.
Except as could not reasonably be expected to result in a Material
Adverse Effect, each Credit Party will, and will cause each of its Subsidiaries
to, perform in all material respects all of its obligations under the terms of
all material agreements, indentures, mortgages, security agreements or other
debt instruments to which it is a party or by which it is bound.
7.9 USE OF PROCEEDS.
The Borrower will use the proceeds of the Loans and will use the
Letters of Credit solely for the purposes set forth in Section 6.14.
7.10 AUDITS/INSPECTIONS.
Upon reasonable notice, during normal business hours and without undue
disruption, 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. All information obtained pursuant to this Section 7.10 shall be
subject to the provisions of Section 11.16. The Credit Parties agree that the
Agent, and its representatives, may conduct an annual audit of the Collateral,
at the expense of the Borrower. Notwithstanding the foregoing, the rights of the
Lenders and the Agent under this Section 7.10 shall be subject to restrictions
on access to the Credit Parties' information and facilities under laws and
regulations applicable to the Credit Parties', including without limitations any
laws or regulations governing national security matters, security clearances or
the like.
7.11 FINANCIAL COVENANTS.
(a) INTEREST COVERAGE RATIO. The Interest Coverage Ratio, as
of the last day of each fiscal quarter of the Consolidated Parties
during the periods shown below, shall be greater than or equal to:
PERIOD RATIO
August 31, 1998 through November 30, 1998 2.00 to 1.0
February 28, 1999 2.10 to 1.0
May 31, 1999 2.20 to 1.0
August 31, 1999 through November 30, 1999 2.30 to 1.0
February 29, 2000 through August 31, 2000 2.50 to 1.0
November 30, 2000 through February 28, 2001 2.75 to 1.0
May 31, 2001 and thereafter 3.00 to 1.0
80
(b) LEVERAGE RATIO. The Leverage Ratio, as of the last day of
each fiscal quarter of the Consolidated Parties during the periods
shown below, shall be less than or equal to:
PERIOD RATIO
August 31, 1998 through May 31, 1999 5.35 to 1.0
August 31, 1999 4.75 to 1.0
November 30, 1999 4.50 to 1.0
February 29, 2000 through May 31, 2000 4.25 to 1.0
August 31, 2000 4.00 to 1.0
November 30, 2000 through February 28, 2001 3.75 to 1.0
May 31, 2001 through November 30, 2001 3.50 to 1.0
February 28, 2002 through November 30, 2002 3.25 to 1.0
February 28, 2003 and thereafter 3.00 to 1.0
(c) SENIOR LEVERAGE RATIO. The Senior Leverage Ratio, as of
the last day of each fiscal quarter of the Consolidated Parties during
the periods shown below, shall be less than or equal to:
PERIOD RATIO
August 31, 1998 through May 31, 1999 4.60 to 1.0
August 31, 1999 4.25 to 1.0
November 30, 1999 4.00 to 1.0
February 29, 2000 through May 31, 2000 3.75 to 1.0
August 31, 2000 3.50 to 1.0
November 30, 2000 through February 28, 2001 3.25 to 1.0
May 31, 2001 through November 30, 2001 3.00 to 1.0
February 28, 2001 through November 30, 2002 2.75 to 1.0
February 28, 2003 and thereafter 2.50 to 1.0
(d) CONSOLIDATED NET WORTH. At all times the Consolidated Net
Worth of the Borrower shall be greater than or equal to $60,000,000
(decreased by the after-tax losses associated with the Divested
Businesses at the time incurred in an aggregate amount not to exceed
$4,800,000), increased on a cumulative basis as of the end of each
fiscal quarter of the Consolidated Parties, commencing with the fiscal
quarter ending August 31, 1998, by an amount equal to 50% of
Consolidated Net Income (to the extent positive) for the fiscal quarter
then ended.
(e) CAPITAL EXPENDITURES. The Credit Parties will not permit
Consolidated Capital Expenditures (excluding any capital expenditures
made with the proceeds of an Excluded Issuance) for any fiscal year to
exceed the amounts set forth below during the periods set forth below:
PERIOD AMOUNT
Closing Date through the 1998
fiscal year end $4,000,000
81
Each fiscal year occurring thereafter $6,500,000
provided, however, that the Credit Parties may apply any amounts not
utilized in any fiscal year to the amount otherwise available for the
next fiscal year only.
7.12 ADDITIONAL CREDIT PARTIES.
As soon as practicable and in any event within 30 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 65% (if such Person
is a direct Foreign Subsidiary of the Borrower or a Domestic Subsidiary) 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 substantially the
form of the Pledge Agreement and otherwise in form acceptable to the Agent and
(c) cause such Person (if such Person is a Domestic Subsidiary) to (i) if such
Person owns or leases any real property located in the United States of America
or deemed to be material by the Agent or the Required Lenders in its or their
sole reasonable discretion, deliver to the Agent with respect to such real
property documents, instruments and other items of the types required to be
delivered by the Agent all in form, content and scope reasonably satisfactory to
the Agent and (ii) 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, favorable opinions of
counsel to such Person (which shall cover, among other things, the legality,
validity, binding effect and enforceability of the documentation referred to
above and the perfection of the Agent's liens thereunder) and other items of the
types required to be delivered pursuant to Section 5.1(f), all in form, content
and scope reasonably satisfactory to the Agent.
7.13 PLEDGED ASSETS.
Each Credit Party will, and will cause each of its Domestic
Subsidiaries to, cause (i) all of its owned real and personal property located
in the United States, (ii) to the extent deemed to be material by the Agent or
the Required Lenders in its or their sole reasonable discretion, all of its
other owned real and personal property and (iii) to the extent deemed material
by the Agent or the Required Lenders in its or their sole reasonable discretion
all of its leased real property located in the United States, to be subject at
all times to first priority, perfected and, in the case of real property
(whether leased or owned), title insured Liens in favor of the Agent pursuant to
the terms and conditions of the Collateral Documents or, with respect to any
such property acquired subsequent to the Closing Date, such other additional
security documents as the Agent shall reasonably request; PROVIDED, HOWEVER that
upon the Borrower's request, the Agent may in its reasonable discretion, waive
certain of the requirements hereunder if it is determined that the
82
costs of compliance with the provisions hereof are excessive in light of the
benefit to be obtained in connection therewith. With respect to any real
property (whether leased or owned) located in the United States of America
acquired by any direct or indirect Domestic Subsidiary of the Borrower
subsequent to the Closing Date, such Person will cause to be delivered to the
Agent with respect to such real property documents, instruments and other items
of the types required to be delivered pursuant to Section 5.1(h) in form
acceptable to the Agent. In furtherance of the foregoing terms of this Section
7.13, the Borrower agrees to promptly provide the Agent with written notice of
the acquisition by, or the entering into a leasing by, any Credit Party of any
asset(s) having a market value greater than $500,000, setting forth in
reasonable detail the location and a description of the asset(s) so acquired.
Without limiting the generality of the above, the Credit Parties will cause 100%
of the Capital Stock of the Borrower and each other direct or indirect Domestic
Subsidiaries of the Borrower and 65% of the Capital Stock in each of the direct
Foreign Subsidiaries of the Borrower and its Domestic Subsidiaries to be subject
at all times to a first priority, perfected Lien in favor of the Agent pursuant
to the terms and conditions of the Collateral Documents or such other security
documents as the Agent shall reasonably request.
If, subsequent to the Closing Date, a Credit Party shall (a) 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 or (b) acquire or lease any real
property, the Borrower shall promptly (and in any event within three (3)
Business Days) after any Executive Officer of a Credit Party acquires knowledge
of same notify the Agent of same. Each Credit Party shall, and shall cause each
of its Subsidiaries to, take such action (including but not limited to the
actions set forth in Sections 5.1(f) and 5.1(i) at its own expense as requested
by the Agent to ensure that the Agent has a first priority perfected Lien to
secure the Credit Party Obligations in (i) all owned real property and personal
property of the Credit Parties located in the United States, (ii) to the extent
deemed to be material by the Agent or the Required Lenders in its or their sole
reasonable discretion, all other owned real and personal property of the Credit
Parties and (iii) to the extent deemed material by the Agent or the Required
Lenders in its or their sole reasonable discretion, all leased real property
located in the United States, subject in each case only to Permitted Liens. Each
Credit Party shall, and shall cause each of its Domestic Subsidiaries to, adhere
to the covenants regarding the location of personal property as set forth in the
Security Agreements.
7.14 YEAR 2000 COMPLIANCE.
The Borrower will promptly notify the Agent in the event that the
Borrower discovers or determines that any computer application (including those
of its suppliers and vendors) that is material to its or any of its Subsidiaries
business and operations will not be Year 2000 compliant (as such term is defined
in Section 6.25), except to the extent that such failure could not reasonably be
expected to have a Material Adverse Effect.
7.15 ANNUAL MEETING.
The Borrower will assist the Agent in organizing an annual bank meeting
where members of management will be available to meet with representatives of
the Lenders.
83
7.16 NAME CHANGE DOCUMENTATION.
As soon as practicable, but in any event within 5 Business Days after
the Closing Date, the Credit Parties shall have filed all documentation
applicable and/or appropriate in all relevant jurisdictions to effectuate each
relevant name change as required under the Purchase Agreement for each of the
Designated Corporations.
7.17 IRB FACILITY.
As soon as practicable, but in any event within 45 days after the
Closing Date, the Credit Parties shall have either (i) obtained the consent of
the First National Bank of Maryland, as trustee under the Illinois IRB, to the
transfer of the Capital Stock of ▇▇▇▇ Antenna Products, Inc. from CRSI, Inc. to
the Borrower, in which case, the Credit Parties may maintain and continue the
industrial revenue bond facility until October 15, 1998, upon which time, the
industrial revenue bond facility shall be terminated and the real and personal
property assets securing the loan agreement in connection with the same shall be
pledged to secure the Credit Party Obligations or (ii) failed to obtain the
consent of the First National Bank of Maryland to the transfer of the Capital
Stock of ▇▇▇▇ Antenna Products, Inc., terminated the industrial revenue bond
facility and pledged the real and personal property assets securing the loan
agreement in connection with such facility to secure the Credit Party
Obligations.
7.18 NORTH CAROLINA SURVEY.
As soon as practicable, but in any event within 45 days after the
Closing Date, the Credit Parties shall have provided the Agent with a survey
reasonably satisfactory to the Agent of the real property assets owned by any
Credit Party located in Catawba County, North Carolina.
7.19 INTEREST RATE PROTECTION.
Within 180 days after the Closing Date, the Borrower shall have entered
into interest rate protection agreements protecting against fluctuations in
interest rates as to which the material terms are reasonably satisfactory to the
Agent, which agreements shall provide coverage in an amount and for a duration
satisfactory to the Agent.
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:
84
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 and its Subsidiaries 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 Capital Leases) or
Synthetic Leases hereafter incurred by the Borrower or any of its
Subsidiaries to finance the purchase of fixed assets PROVIDED that (i)
the total of all such Indebtedness for all such Persons taken together
shall not exceed an aggregate principal amount of $5,000,000 at any one
time (including any such Indebtedness referred to in subsection (b)
above); (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 or any of its Subsidiaries in
respect of Hedging Agreements entered into in order to manage existing
or anticipated interest rate or exchange rate risks and not for
speculative purposes;
(e) intercompany Indebtedness arising out of loans and
advances permitted under Section 8.6;
(f) indebtedness in respect of the Senior Subordinated Notes
referred to in Section 3.3(b) and additional Senior Subordinated Notes
on the same terms and conditions or on other terms and conditions
reasonably acceptable to the Lenders; and
(g) in addition to the Indebtedness otherwise permitted by
this Section 8.1, other Indebtedness hereafter incurred by the Borrower
or any of its Subsidiaries PROVIDED that (A) the loan documentation
with respect to such Indebtedness shall be on terms and conditions
reasonably satisfactory to the Required Lenders, shall be subordinated
to the Credit Party Obligations and shall not contain covenants or
default provisions relating to any Consolidated Party that are more
restrictive than the covenants and default provisions contained in the
Credit Documents, (B) the Borrower shall have delivered to the Agent a
Pro Forma Compliance Certificate demonstrating that, upon giving effect
on a Pro Forma Basis to the incurrence of such Indebtedness and to the
concurrent retirement of any other Indebtedness of any Consolidated
Party, no Default or Event of Default would exist hereunder.
(h) Guarantees by the Borrower or any other Credit Party of
any Indebtedness of the Borrower or another Credit Party otherwise
permitted hereunder.
85
(i) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument
inadvertently (except in the case of daylight overdrafts) drawn against
insufficient funds in the ordinary course of business provided that
such Indebtedness is extinguished within two Business Days of its
incurrence.
(j) Indebtedness arising from agreements of the Borrower or
any other Credit Party providing for indemnification, adjustment of
purchase price or similar obligations, in each case incurred or assumed
in connection with the disposition of any business, assets or any
Subsidiary.
(k) Other Indebtedness of the Borrower in an amount not to
exceed $1,000,000 in the aggregate at any time outstanding.
8.2 LIENS.
The Credit Parties will not permit any Consolidated Party to contract,
create, incur, assume or permit to exist any Lien with respect to any of its
Property, whether now owned or after acquired, except for Permitted Liens.
8.3 NATURE OF BUSINESS.
The Credit Parties will not permit any Consolidated Party to engage in
business substantively different in nature from that set forth in Section 6.23
or reasonable extensions or expansions thereof.
8.4 CONSOLIDATION, MERGER, DISSOLUTION, ETC.
Except in connection with an Asset Disposition permitted by the terms
of Section 8.5, 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 reasonably request so as to cause the Credit
Parties to be in compliance with the terms of Section 7.13 after giving effect
to such transaction and (iii) the Borrower shall have delivered to the Agent a
Pro Forma Compliance Certificate demonstrating that, upon giving effect on a Pro
Forma Basis to such transaction, no Default or Event of Default would exist, (b)
any Credit Party other than the
86
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
so as to cause the Credit Parties to be in compliance with the terms of Section
7.13 after giving effect to such transaction and (ii) the Borrower shall have
delivered to the Agent a Pro Forma Compliance Certificate demonstrating that,
upon giving effect on a Pro Forma Basis to such transaction, no Default or Event
of Default would exist, (c) any Consolidated Party which is not a Credit Party
may be merged or consolidated with or into any Credit Party other than the
Borrower 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
so as to cause the Credit Parties to be in compliance with the terms of Section
7.13 after giving effect to such transaction and (iii) the Borrower shall have
delivered to the Agent a Pro Forma Compliance Certificate demonstrating that,
upon giving effect on a Pro Forma Basis to such transaction, no Default or Event
of Default would exist, (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 the Borrower shall have delivered to the Agent a Pro
Forma Compliance Certificate demonstrating that, upon giving effect on a Pro
Forma Basis to such transaction, no Default or Event of Default would exist, (e)
the Borrower or any of its Subsidiaries may acquire all or a portion of the
capital stock or other ownership interest in any Person which is not a
Subsidiary or all or any substantial portion of the assets, property and/or
operations of a Person which is not a Subsidiary in an aggregate amount not to
exceed $5,000,000 in any fiscal year; PROVIDED, HOWEVER, (i) the Borrower shall
comply with the provisions of Section 7.12 and (ii) no Default or Event of
Default would exist after giving effect to such acquisitions on a Pro Forma
Basis, and (f) any Wholly-Owned Subsidiary of the Borrower may dissolve,
liquidate or wind up its affairs at any time.
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 the sale of assets of the Divested Businesses unless (a)
the consideration paid in connection therewith is cash, Cash Equivalents or
other noncash consideration (PROVIDED that non-cash consideration (excluding
liabilities assumed by the acquiror and assets received in a trade-in or similar
transaction) shall not comprise in excess of 15% of the total value of proceeds
received in connection with any Asset Disposition), (b) if such transaction is a
Sale and Leaseback Transaction, such transaction is permitted by the terms of
Section 8.13, (c) such transaction does not involve the sale or other
disposition of a minority equity interest in any Consolidated Party, (d) the
aggregate net book value of all of the assets sold or otherwise disposed of by
the Consolidated Parties (excluding for purposes hereof assets sold in
connection with the sale of the Divested Businesses) in all such transactions
(excluding the sale of real estate no longer used or useful in such Consolidated
Parties business) after the Closing Date shall not exceed $5,000,000, (c) the
Borrower shall have delivered to the Agent a Pro Forma Compliance Certificate
demonstrating that, upon giving effect on a Pro Forma Basis to such transaction,
no Default or Event of Default would exist hereunder, and (f) no later than 30
days prior to such Asset Disposition, the Agent and the Lenders shall have
received a certificate of an officer of the Borrower specifying the anticipated
or actual date of such Asset Disposition, briefly describing the assets to be
sold or otherwise disposed of and setting forth the net book value of such
assets, the aggregate consideration and the Net Cash Proceeds to be received for
such assets in connection with such Asset Disposition, and thereafter the
Borrower shall, within the period of 180 days following the consummation of such
Asset Disposition (with respect to any such Asset Disposition, the "APPLICATION
PERIOD"), apply (or cause to be applied) an amount equal to the Net Cash
Proceeds of such Asset Disposition to (i) the purchase, acquisition or, in the
case of improvements to real property, construction of Eligible Assets or (ii)
to the prepayment of the Loans in accordance with the terms of Section
3.3(b)(iii).
87
Upon a sale or other disposition of assets the Agent shall (to the
extent applicable) deliver to the Borrower, upon the Borrower's request and at
the Borrower's expense, such documentation as is reasonably necessary to
evidence the release of the Agent's security interest, if any, in such assets or
Capital Stock, including, without limitation, amendments or terminations of UCC
financing statements, if any, the return of stock certificates, if any, and the
release of such Subsidiary from all of its obligations, if any, under the Credit
Documents.
8.6 INVESTMENTS.
The Credit Parties will not permit any Consolidated Party to make
Investments in or to any Person, except for Permitted Investments.
8.7 RESTRICTED PAYMENTS.
(a) 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 (i) to make dividends payable
solely in the same class of Capital Stock of such Person, (ii) to make
dividends or other distributions payable to the Borrower or a
Wholly-Owned Subsidiary of the Borrower (directly or indirectly through
Subsidiaries), (iii) as permitted by Section 8.8, (iv), transactions
permitted by Section 8.9, (v) provided that no Default or Event of
Default has occurred and is continuing at such time or would be
directly or indirectly caused as a result thereof, the Borrower may pay
dividends or repay the Senior Subordinated Notes during the term of
this Agreement in an amount that, together with any dividends and other
payments of the Senior Subordinated Notes previously paid during the
term of this Agreement, does not exceed the Maximum Payment Amount as
of the date of such payment; PROVIDED, however, that no preferred stock
shall be redeemed or repurchased nor shall any dividend payments with
respect to such preferred stock be declared (other than on a
cumulative, compounded basis) until such time as the pending litigation
with respect to Anghel Laboratories, Inc. shall have been settled or
otherwise concluded to the satisfaction of the Required Lenders and
(vi) the Borrower may make payments permitted by the provisos to
Sections 3.3(b)(iii) and 3.3(b)(iv).
(b) The Credit Parties will not permit any Consolidated Party
to engage in any Equity Issuance other than (i) an Equity Issuance made
by a Subsidiary of a Credit Party to a Credit Party and (ii) any Equity
Issuance made by the Borrower provided that prepayments are made to the
extent required by Section 3.3(b)(v).
8.8 PREPAYMENTS OF INDEBTEDNESS, ETC.
The Credit Parties will not permit any Consolidated Party to (a) after
the issuance thereof, amend or modify (or permit the amendment or modification
of) any of the terms of any subordinated Indebtedness if such amendment or
modification would add or change any terms in a manner adverse to the issuer of
such Indebtedness, or shorten the final maturity or average life to maturity or
require any payment to be made sooner than originally scheduled or increase the
interest rate applicable thereto (provided, that the Borrower may change the
interest rate owing with respect to the Senior Subordinated Notes from a
floating rate to a fixed rate on terms and conditions
88
satisfactory to the Agent) or change any subordination provision thereof, or (b)
(i) if any Default or Event of Default has occurred and is continuing or would
be directly or indirectly caused as a result thereof, make (or give any notice
with respect thereto) any voluntary or optional payment or prepayment or
redemption or acquisition for value of (including without limitation, by way of
depositing money or securities with the trustee with respect thereto before due
for the purpose of paying when due), refund, refinance or exchange of any other
subordinated Indebtedness (including without limitation any Indebtedness
permitted by Section 8.1(f) or (ii) make (or give any notice with respect
thereto) any voluntary or optional payment or prepayment, redemption,
acquisition for value or defeasance of (including without limitation, by way of
depositing money or securities with the trustee with respect thereto before due
for the purpose of paying when due), refund, refinance or exchange of any
subordinated Indebtedness except that the Borrower make payments permitted by
the provisos to Sections 3.3(b)(iii) and 3.3(b)(iv).
8.9 TRANSACTIONS WITH AFFILIATES.
Except as set forth on SCHEDULE 8.9, 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) advances of working capital to any
Credit Party, (b) transfers of cash and assets to any Credit Party other than
the Borrower, (c) transactions permitted by Section 8.1, Section 8.4, Section
8.5, Section 8.6, or Section 8.7, (d) normal compensation and reimbursement of
expenses of officers and directors, (e) payments pursuant to the Tax Sharing
Agreement as in effect on the date hereof and (f) 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 (other than the Acquired Company and its Subsidiaries to conform
with the Borrower's 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.
8.11 LIMITATION ON RESTRICTED ACTIONS.
Except for conditions and restrictions existing as of the date hereof
and described on SCHEDULE 8.11, 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
89
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) the Senior Subordinated Note documentation as in
effect as of the Closing Date, (iii) applicable law, (iv) any document or
instrument governing Indebtedness incurred pursuant to Section 8.1(c), PROVIDED,
HOWEVER, that any such restriction contained therein relates only to the asset
or assets constructed or acquired in connection therewith, (v) any Permitted
Lien or any document or instrument governing any Permitted Lien, provided that
any such restriction contained therein relates only to the asset or assets
subject to such Permitted Lien PROVIDED, FURTHER, that no such lien shall
encumber any of the Consolidated Parties' fee simple owned real property or
leasehold assets, (vi) customary restrictions and conditions contained in
agreements relating to Asset Dispositions otherwise permitted hereunder pending
such sale, provided that such restrictions and conditions apply only to the
assets which are to be sold (including the assets of a Subsidiary being sold)
and (vii) customary provisions in leases, licenses and similar contracts
restricting the subletting, assignment or transfer thereof, or any property or
asset the subject thereof.
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)
except 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, (B) except as a result of or in connection with a
dissolution, merger or disposition of a Subsidiary permitted under Section 8.4
or Section 8.5 or (C) except 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 in connection with a purchase money financing permitted by
Section 8.1(c), 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 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
90
security for such obligation if security is given for some other obligation,
except (a) pursuant to this Credit Agreement and the other Credit Documents, (b)
pursuant to Indebtedness referred to in Section 8.1(f), in each case as in
effect as of the Closing Date and (c) pursuant to any document or instrument
governing Indebtedness incurred pursuant to Section 8.1(c), PROVIDED, HOWEVER,
that any such restriction contained therein relates only to the asset or assets
constructed or acquired in connection therewith, (d) customary restrictions and
conditions contained in agreements relating to Asset Dispositions otherwise
permitted hereunder pending such sale, provided that such restrictions and
conditions apply only to the assets which are to be sold (including the assets
of a Subsidiary being sold) and (e) customary provisions in leases, licenses and
similar contracts restricting the subletting, assignment or transfer thereof, or
any property or asset the subject thereof.
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
(i) default in the payment when due of any principal
of any of the Loans or of any reimbursement obligations
arising from drawings under Letters of Credit, or
(ii) default, and such default shall continue for
three (3) or more Business Days, in the payment when due of
any interest on the Loans or on any reimbursement obligations
arising from drawings under Letters of Credit, or of any Fees
or other amounts owing hereunder, under any of the other
Credit Documents or in connection herewith or therewith; or
(b) REPRESENTATIONS. Any representation, warranty or statement
made or deemed to be made by any Credit Party herein, in any of the
other Credit Documents, or in any statement or certificate delivered or
required to be delivered pursuant hereto or thereto shall prove untrue
in any material respect on the date as of which it was made or 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,
7.11 or 8.1 through 8.14, inclusive;
91
(ii) default in the due performance or observance of
any term, covenant or agreement contained in Sections 7.1(a),
(b), (c) or (d), 7.9, 7.12 or 7.13 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 dissolution, merger or disposition of a Subsidiary permitted
under Section 8.4 or Section 8.5, any Credit Document shall fail to be
in full force and effect or to give the Agent and/or the Lenders the
Liens, rights, powers and privileges purported to be created thereby,
or any Credit Party shall so state in writing; or
(e) GUARANTIES. Except as the result of or in connection with
a dissolution, merger or disposition of a Subsidiary permitted under
Section 8.4 or Section 8.5, 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; or
(f) BANKRUPTCY, ETC. Any Bankruptcy Event shall occur with
respect to any Consolidated Party; or
(g) DEFAULTS UNDER OTHER AGREEMENTS. 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
92
(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
(i) ERISA. Any of the following events or conditions, if such
event or condition could reasonably be expected to 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) SENIOR SUBORDINATED NOTES. (i) There shall occur and be
continuing any Event of Default under and as defined in the Senior
Subordinated Notes or (ii) any of the Credit Party Obligations for any
reason shall cease to be "Designated Senior Indebtedness" under and as
defined in the Senior Subordinated Notes.
(k) OWNERSHIP. There shall occur a Change of Control.
(l) DEBARMENT. There shall occur a Debarment Event.
(m) LIABILITY LIMIT. Any Consolidated Party individually, or
collectively with other Consolidated Parties, shall incur liability
(either through a judgment, settlement, order or decree) relating to
the "whistleblower suit" against Anghel Laboratories, Inc. (net of
proceeds actually obtained from Comsat Corporation under relevant
indemnification agreements) in an aggregate amount with respect to all
the Consolidated Parties in excess of $7,000,000.
93
9.2 ACCELERATION; REMEDIES.
Upon the occurrence of an Event of Default, and at any time thereafter
unless and until such Event of Default has been waived by the requisite Lenders
(pursuant to the voting requirements of Section 11.6) or cured to the
satisfaction of the requisite Lenders (pursuant to the voting procedures in
Section 11.6), the Agent may, with the consent of the Required Lenders, and 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 Borrower
to the Agent and/or any of the Lenders hereunder to be due whereupon
the same shall be immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby
waived by the Borrower.
(c) CASH COLLATERAL. Direct the Borrower to pay (and the
Borrower agrees that upon receipt of such notice, or upon the
occurrence of an Event of Default under Section 9.1(f), it will
immediately pay) to the Agent additional cash, to be held by the Agent,
for the benefit of the Lenders, in a cash collateral account as
additional security for the LOC Obligations in respect of subsequent
drawings under all then outstanding Letters of Credit in an amount
equal to the maximum aggregate amount which may be drawn under all
Letters of Credits then outstanding.
(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, 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. If an
Event of Default occurs, all U.S. and foreign government classified information
in possession of any Credit Party shall remain the property of the U.S.
Government and the applicable foreign government(s).
In the event that the Agent determines to commence foreclosure proceedings under
any of the Credit Documents, or the Agent is instructed by the Required Lenders
to do so, the Agent will promptly deliver (by hand delivery or facsimile
transmission) to the U.S. Department of Defense, Defense Security Service, at
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇,
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇, notice of such determination, or a copy of such
instructions. The
94
Agent will not commence such foreclosure proceedings earlier than the day
following the fifth Business Day after the date that such notice was sent to the
Defense Security Service (including the date the notice was sent) as provided
above unless instructed otherwise by the Required Lenders. Notwithstanding
anything to the contrary therein, each Credit Document shall be subject to the
foregoing provisions of this Section 9.2.
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.
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
95
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 Borrower 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, First Union
National Bank (and any successor acting as Agent) in its capacity as a Lender
hereunder shall have the same rights and powers hereunder as any other Lender
and may exercise the same as though it were not acting as the Agent, and the
term "Lender" or "Lenders" shall, unless the context otherwise indicates,
include the Agent in its individual capacity. First Union National Bank (and any
successor acting as Agent) and its Affiliates may (without having to account
therefor to any Lender) accept deposits from, lend money to, make investments
in, provide services to, and generally engage in any kind of lending, trust, or
other business with any Credit Party or any of its Subsidiaries or Affiliates as
if it were not acting as Agent, and First Union National Bank (and any successor
acting as Agent) and its Affiliates may accept fees and other consideration from
any Credit Party or any of its Subsidiaries or Affiliates for services in
connection with this Credit Agreement or otherwise without having to account for
the same to the Lenders.
10.5 INDEMNIFICATION.
The Lenders agree to indemnify the Agent (to the extent not reimbursed
under Section 11.5 hereof, but without limiting the obligations of the Borrower
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
96
Credit Document or the transactions contemplated thereby or any action taken or
omitted by the Agent under any Credit Document; 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
Borrower under Section 11.5, to the extent that the Agent is not promptly
reimbursed for such costs and expenses by the Borrower. 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 Borrower. 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. 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.
If the Agent shall become aware that it has become a "foreign interest"
(as such term is defined in paragraph 1.231-1 of the Department of Defense
Industrial Security Regulation, D.O.D. 5220.22-R (December 1985)) at any time
during the term of this Agreement, the Agent shall resign as Agent under this
Agreement and
97
the other Credit Documents. If the Required Lenders shall become aware that the
Agent shall have become a "foreign interest" (as so defined), then the Required
Lenders shall remove the Agent as Agent under this Agreement and the other
Credit Documents. If the Agent shall become aware that any subagent, deed of
trust trustee or other Person acting in a fiduciary or representative capacity
under any of the Credit Documents shall become a "foreign interest" (as so
defined), then the Agent shall remove such Person from acting in such capacity.
Notwithstanding anything to the contrary contained therein, each Credit Document
shall be subject to the foregoing provisions of this Section 10.7. Any successor
Agent, or other Person appointed to act in a fiduciary or representative
capacity shall not be a "foreign interest" (as so defined).
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 provided that such transmission is made on a Business Day,
receipt is confirmed and a copy of such notice is also sent by overnight
courier, (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 Borrower, Guarantors and the Agent, set forth
below, and, in the case of the Lenders, set forth on SCHEDULE 2.1(A), or at such
other address as such party may specify by written notice to the other parties
hereto:
if to the Borrower or the Guarantors:
Prodelin Holding Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Agent:
First Union National Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇-▇
▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
First Union National Bank
98
Agency Services
One First Union Center
NC-0608
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With respect to any notice delivered to the Agent to the effect that a
Default or an Event of Default exists, the Borrower shall promptly deliver a
copy thereof (by hand delivery or facsimile transmission) to the U.S. Department
of Defense, Defense Security Service, at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇.
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 in connection with Hedging Agreements)
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 in connection with
Hedging Agreements) 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.
(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;
99
(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) 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 Borrower shall make appropriate arrangements so that, if
required, new Notes are issued to the assignor and the assignee. If the
assignee is not incorporated under the laws of the United States of
America or a state thereof, it shall deliver to the Borrower and the
Agent certification as to exemption from deduction or withholding of
Taxes in accordance with Section 3.11. No assignee shall be entitled to
receive any greater payment or indemnification under Section 3.11 than
the assigning Lender would have been entitled to receive with respect
to the rights assigned unless such assignment shall have been made at a
time when the circumstances giving rise to such greater payment did not
exist.
(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 Borrower, 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 Borrower or any
Lender at any reasonable time and from time to time upon reasonable
prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed
by the parties thereto, together with any Note subject to such
assignment and payment of the processing fee, the Agent shall, if such
Assignment and Acceptance has been completed and is in substantially
the form of Exhibit 11.3(b) hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the parties thereto.
(e) Each Lender may sell participations to one or more Persons
in all or a portion of its rights and obligations under this Credit
Agreement (including all or a portion of its Commitment and its Loans);
PROVIDED, HOWEVER, that (i) such Lender's
100
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 (PROVIDED that the Borrower's liability in
aggregate for both the Lender and its participant shall be limited to
the amount it would owe the Lender granting the participation),
inclusive, and the right of set-off contained in Section 11.2, and (iv)
the Borrower 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 Borrower relating to its Loans and its
Notes 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
Borrower or any of its Subsidiaries 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 11.16 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 Borrower or any other
Credit Party to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Agent or the Lenders
to any other or further action in any circumstances without notice or demand.
11.5 EXPENSES; INDEMNIFICATION.
(a) The Borrower agrees to pay on demand all costs and expenses of the
Agent in connection with the syndication, preparation, execution, delivery,
administration, modification, and amendment of this Credit Agreement, the other
Credit Documents, and the other documents
101
to be delivered hereunder, including, without limitation, the reasonable fees
and expenses of counsel for the Agent (including the reasonable cost of internal
counsel) with respect thereto and with respect to advising the Agent as to its
rights and responsibilities under the Credit Documents. The Borrower further
agrees to pay on demand all costs and expenses of the Agent and the Lenders, if
any (including, without limitation, reasonable attorneys' fees and expenses and
the reasonable 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 Borrower agrees 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, 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 the Borrower, its directors, shareholders or creditors or an
Indemnified Party or any other Person or any Indemnified Party is otherwise a
party thereto and whether or not the transactions contemplated hereby are
consummated. The Borrower agrees 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
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 11.5 shall survive the repayment of the Loans, LOC Obligations and
other obligations under the Credit Documents and the termination of the
Commitments hereunder.
11.6 AMENDMENTS, WAIVERS AND CONSENTS.
Neither this Credit Agreement nor any other Credit Document nor any of
the terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is in
writing entered into by, or approved in writing by, the Required Lenders and the
Borrower, PROVIDED, HOWEVER, that:
(a) without the consent of each Lender affected thereby,
102
(i) extend the final maturity of any Loan or the time of
payment of any reimbursement obligation, or any portion
thereof, arising from drawings under Letters of Credit, or
extend or waive any Principal Amortization Payment of any
Loan, or any portion thereof,
(ii) reduce the rate or extend the time of payment of
interest (other than as a result of waiving the applicability
of any post-default increase in interest rates) thereon or
Fees hereunder,
(iii) reduce or waive the principal amount of any Loan or
of any reimbursement obligation, or any portion thereof,
arising from drawings under Letters of Credit,
(iv) increase the 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),
(v) except as the result of or in connection with an
Asset Disposition permitted by Section 8.5, release all or
substantially all of the Collateral,
(vi) except as the result of or in connection with a
dissolution, merger or disposition of a Subsidiary permitted
under Section 8.4, release the Borrower or substantially all
of the other Credit Parties from its or their obligations
under the Credit Documents,
(vii) except 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, 9.1(a), 11.2, 11.3, 11.5 or 11.9,
(viii) reduce any percentage specified in, or
otherwise modify, the definition of Required Lenders, or
(ix) 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;
(b) without the consent of Lenders holding in the aggregate
more than 50% of the outstanding Tranche A Term Loans and more than 50%
of the outstanding Tranche B Term Loans, extend the time for or the
amount or the manner of application of proceeds of any mandatory
prepayment required by Section 3.3(b)(ii), (iii), (iv) or (v) hereof;
(c) without the consent of the Agent, no provision of Section
10 may be amended;
(d) without the consent of the Issuing Lender, no provision of
Section 2.2 may be amended.
103
(e) without the consent of the Swingline Lender, no provision
of Section 2.3 may be amended.
Notwithstanding the fact that the consent of all the Lenders is
required in certain circumstances as set forth above, (x) each Lender
is entitled to vote as such Lender sees fit on any bankruptcy
reorganization plan that affects the Loans, and each Lender
acknowledges that the provisions of Section 1126(c) of the Bankruptcy
Code supersedes the unanimous consent provisions set forth herein and
(y) the Required Lenders may consent to allow a Credit Party to use
cash collateral in the context of a bankruptcy or insolvency
proceeding.
11.7 COUNTERPARTS.
This Credit Agreement may be executed in any number of counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall constitute one and the same instrument. It shall not be necessary in
making proof of this Credit Agreement to produce or account for more than one
such counterpart for each of the parties hereto. Delivery by facsimile by any of
the parties hereto of an executed counterpart of this Credit Agreement shall be
as effective as an 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 THE OTHER CREDIT DOCUMENTS AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER
SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NORTH CAROLINA. Any legal action or proceeding
with respect to this Credit Agreement or any other Credit Document may
be brought in the courts of the State of North Carolina in Mecklenburg
County, or of the United States for the Western District of North
Carolina, and, by execution and delivery of this Credit Agreement, each
of the Credit Parties
104
hereby irrevocably accepts for itself and in respect of its property,
generally and unconditionally, the nonexclusive jurisdiction of such
courts. Each of the Credit Parties further irrevocably consents to the
service of process out of any of the aforementioned courts in any such
action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to it at the address set out for
notices pursuant to Section 11.1, such service to become effective
three (3) Business 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, THE BORROWER AND THE CREDIT PARTIES HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER
CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY.
11.11 SEVERABILITY.
If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
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
on or after the Closing Date when it shall have been executed by the
Borrower, the Guarantors 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 the
Borrower, the Guarantors, the Agent and each Lender and their
respective successors and assigns.
105
(b) The term of this Credit Agreement shall be until no Loans,
LOC Obligations or any other amounts payable hereunder or under any of
the other Credit Documents shall remain outstanding, no Letters of
Credit shall be outstanding, all of the Credit Party Obligations have
been irrevocably satisfied in full and all of the Commitments hereunder
shall have expired or been terminated.
11.14 SOURCE OF FUNDS.
Each of the Lenders hereby represents and warrants to the Borrower that
at least one of the following statements is an accurate representation as to the
source of funds to be used by such Lender in connection with the financing
hereunder:
(a) no part of such funds constitutes assets allocated to any
separate account maintained by such Lender in which any employee
benefit plan (or its related trust) has any interest;
(b) to the extent that any part of such funds constitutes
assets allocated to any separate account maintained by such Lender,
such Lender has disclosed to the Borrower the name of each employee
benefit plan whose assets in such account exceed 10% of the total
assets of such account as of the date of such purchase (and, for
purposes of this subsection (b), all employee benefit plans maintained
by the same employer or employee organization are deemed to be a single
plan);
(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.
As used in this Section 11.14, the terms "employee benefit plan" and "separate
account" shall have the respective meanings assigned to such terms in Section 3
of ERISA.
11.15 CONFLICT.
To the extent that there is a conflict or inconsistency between any
provision hereof, on the one hand, and any provision of any Credit Document, on
the other hand, this Credit Agreement shall control.
11.16 CONFIDENTIALITY.
The Agent and each Lender will hold all non-public information,
obtained pursuant to the requirements of this Credit Agreement (and including
the financial information), in accordance with its customary procedure for
handling confidential information of such nature and in accordance with safe and
sound commercial lending practices, but may, in any event, make
106
disclosure (i) on a confidential basis to its officers, directors, employees,
agents, representatives and advisers (including regular and special accountants
and legal counsel), (ii) to any transferee or participant, or prospective
transferee or participant, in connection with the contemplated transfer of the
Loans and Commitments hereunder or participations thereof; provided such
transferees or participants, or prospective transferees or participants, shall
consent in writing to be bound by the terms of this Section 11.16, (iii) as
required or requested by any governmental agency or representative thereof in
the ordinary course of the Lender's regulatory compliance or the National
Association of Insurance Commissioners to the extent so required, or (iv)
pursuant to legal process; PROVIDED that (A) such party shall, to the extent
reasonably possible, give the Borrower five days prior written notice thereof;
it being understood, however, that the failure to give any such notice shall not
give rise to any action or claim on account of any such failure and (B) neither
the Agent, nor any of the Lenders shall have any obligation under this Section
11.16 to the extent that any such information becomes available on a
non-confidential basis from a source other than the Borrower or its
Subsidiaries, or that any such information becomes publicly available other than
by breach of this Section 11.16.
11.17 ARBITRATION; CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
(a) Upon demand of any party hereto, whether made before or after
institution of any judicial action, any dispute, claim or controversy arising
out of or connected herewith or with the Credit Documents ("Disputes") shall be
resolved by binding arbitration as provided herein. Disputes may include,
without limitation, tort claims, counterclaims, claims brought as class actions
and claims arising herefrom or from Credit Documents executed in the future.
Arbitration shall be conducted under the Commercial Financial Disputes
Arbitration Rules (the "Arbitration Rules") of the American Arbitration
Association and Title 9 of the U.S. Code. All arbitration hearings shall be
conducted in Charlotte, Mecklenburg County, North Carolina, or such other place
as agreed to in writing by the parties. A judgment upon the award may be entered
in any court having jurisdiction, and all decisions shall be in writing. The
panel from which all arbitrators are selected shall be comprised of licensed
attorneys having at least ten years' experience representing parties in secured
lending transactions. Notwithstanding the foregoing, this arbitration provision
does not apply to disputes under or related to interest protection agreements.
(b) Notwithstanding the preceding binding arbitration provision, the
Agent, on behalf of the Lenders, preserves certain remedies that may be
exercised during a Dispute. The Agent, on behalf of the Lenders, shall have the
right to proceed in any court of proper jurisdiction or by self help to exercise
or prosecute the following remedies, as applicable: (i) all rights to foreclose
against any real or personal property or other security by exercising a power of
sale granted in the Credit Documents or under applicable law, (ii) all rights of
self help including peaceful occupation of real property and collection of
rents, set-off and peaceful possession of personal property, (iii) obtaining
provisional or ancillary remedies including injunctive relief, sequestration,
garnishment, attachment and appointment of receiver, and (iv) other remedies.
Preservation of these remedies does not limit the power of an arbitrator to
grant similar remedies that may be requested by a party in a Dispute.
107
(c) By execution and delivery of this Credit Agreement, each of the
parties hereto accepts, for itself and in connection with its properties,
generally and unconditionally, the non-exclusive jurisdiction relating to any
arbitration proceedings conducted under the Arbitration Rules in Charlotte,
Mecklenburg County, North Carolina and irrevocably agrees to be bound by any
final judgment rendered thereby in connection with this Credit Agreement from
which no appeal has been taken or is available. Each of the parties hereto
irrevocably agrees that all process in any such arbitration proceedings or
otherwise may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to it at its
address set forth in Section 11.1 or at such other address of which such party
shall have been notified pursuant thereto, such service being hereby
acknowledged by each party hereto to be effective and binding service in every
respect. Each party hereto irrevocably waives any objection, including, without
limitation, any objection to the laying of venue or based on the grounds of
forum non conveniens which it may now or hereafter have to the bringing of any
such action or proceeding in any such jurisdiction. Nothing herein shall affect
the right to serve process in any other manner permitted by law or shall limit
the right of any party to bring proceedings against the Borrower or any party
hereto in any court or pursuant to arbitration proceedings in any other
jurisdiction.
[Signature Page to Follow]
108
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: PRODELIN HOLDING CORPORATION
a Delaware corporation
By:
---------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
SUBSIDIARY
GUARANTORS: PRODELIN CORPORATION,
----------
a North Carolina corporation
SATSYSTEMS, INC.,
a Delaware corporation
C&S ANTENNAS, INC.,
a Delaware corporation
▇▇▇▇ ANTENNA PRODUCTS, INC.
a Nevada corporation
RSI COMMUNICATIONS CORP.,
a Delaware corporation
CRSI, INC.,
a Delaware corporation
ANGHEL LABORATORIES, INC.,
a Delaware corporation
RSI MARYLAND, INC.,
a Delaware corporation
UNIVERSAL ANTENNAS INCORPORATED,
a Nevada corporation
RADIATION SYSTEMS PRECISION
CONTROLS, INC., a Nevada
corporation POWER TECHNOLOGIES,
INC., a Delaware corporation MEXIA
FABRICATORS, INC., a Texas
corporation
By:
---------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
LENDERS: FIRST UNION NATIONAL BANK,
individually in its capacity as a
Lender and in its capacity as Agent
By:
---------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
ALLSTATE INSURANCE COMPANY
By:
---------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
ALLSTATE LIFE INSURANCE COMPANY
By:
---------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
▇▇▇▇▇▇ FINANCIAL, INC.
By:
---------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
IBJ ▇▇▇▇▇▇▇▇ BANK & TRUST COMPANY
By:
---------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
▇▇▇▇▇▇▇ NATIONAL LIFE
INSURANCE COMPANY
By: PPM America, Inc., as attorney in fact, on behalf
of ▇▇▇▇▇▇▇ National Life Insurance Company
By:
----------------------------
▇▇▇▇▇▇▇ DiRe
Managing Director
PILGRIM AMERICA PRIME RATE TRUST
By:
--------------------------------
Name:
------------------------------
Title:
------------------------------
SENIOR DEBT PORTFOLIO
By: Boston Management and Research,
as Investment Advisors
By:
--------------------------------
Name:
------------------------------
Title:
------------------------------
TORONTO DOMINION
(TEXAS), INC.
By:
--------------------------------
Name:
------------------------------
Title:
------------------------------
EXHIBIT 3.2(A)(III)
NOTICE OF ACCOUNT DESIGNATION
Dated _____________, 1998
First Union National Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Syndication Agency Services
Ladies and Gentlemen:
This Notice of Account Designation is delivered to you by Prodelin
Holding Corporation (the "Borrower"), a corporation organized under the laws of
______________, under Section 2.1(b)(iii) of the Credit Agreement dated as of
________________, 1998 (as amended, restated or otherwise modified, the "Credit
Agreement") by and among the Company, the Guarantors party thereto, the Lenders
party thereto and First Union National Bank, as Agent.
The Agent is hereby authorized to disburse all Loan proceeds into the
following account, unless the Borrower shall designate, in writing to the Agent,
one or more other accounts:
Bank: First Union National Bank
ABA #: ____________________________________
Account: ____________________________________
Notwithstanding the foregoing, on the closing date of the Credit
Agreement, funds borrowed under the Credit Agreement shall be sent to the
institutions and/or persons designated on the attached payment instructions.
IN WITNESS WHEREOF, the undersigned has executed this Notice of Account
Designation this ____ day of _____________, 1998.
[CORPORATE SEAL] Prodelin Holding Corporation
By:_____________________________
Name:
Title: