Exhibit 10.3
REAL ESTATE TERM CREDIT AGREEMENT
Dated as of May 31, 2002
By and Among
▇▇▇▇▇▇ SUPPLY SHARED SERVICES, INC.,
as Borrower
▇▇▇▇▇▇ SUPPLY, INC.,
as Parent
AND
SUNTRUST BANK,
as Lender
================================================================================
King & Spalding
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS; CONSTRUCTION ................................................ 1
Section 1.01 Definitions ...................................................... 1
Section 1.02 Accounting Terms and Determination ............................... 14
Section 1.03 Other Definitional Terms ......................................... 14
Section 1.04 Exhibits and Schedules ........................................... 14
ARTICLE II TERM CREDIT COMMITMENT ............................................... 14
Section 2.01 Term Credit Commitment; Use of Proceeds .......................... 14
Section 2.02 Term Credit Note; Repayment of Principal ......................... 15
Section 2.03 Voluntary Reduction of Term Credit Commitment .................... 15
ARTICLE III GENERAL LOAN TERMS ................................................... 15
Section 3.01 Funding Notices .................................................. 15
Section 3.02 Disbursement of Funds ............................................ 16
Section 3.03 Interest. ........................................................ 16
Section 3.04 Interest Periods ................................................. 17
Section 3.05 Fees. ............................................................ 18
Section 3.06 Voluntary Prepayments of Borrowings .............................. 18
Section 3.07 Payments, etc. ................................................... 19
Section 3.08 Interest Rate Not Ascertainable, etc. ............................ 20
Section 3.09 Illegality. ...................................................... 20
Section 3.10 Increased Costs. ................................................. 20
Section 3.11 Lending Office. .................................................. 22
Section 3.12 Funding Losses. .................................................. 22
Section 3.13 Assumptions Concerning Funding of Eurodollar Advances. ........... 22
Section 3.14 Capital Adequacy. ................................................ 22
Section 3.15 Limitation on Certain Payment Obligations. ....................... 23
ARTICLE IV CONDITIONS TO BORROWINGS ............................................. 23
Section 4.01 Conditions Precedent to Initial Term Credit Loan. ................ 24
Section 4.02 Conditions to All Term Credit Loans. ............................. 26
ARTICLE V REPRESENTATIONS AND WARRANTIES ....................................... 27
Section 5.01 Organization and Qualification. .................................. 27
Section 5.02 Corporate Authority. ............................................. 27
Section 5.03 Financial Statements. ............................................ 27
Section 5.04 Tax Returns. ..................................................... 28
Section 5.05 Actions Pending. ................................................. 28
Section 5.06 Representations; No Defaults. .................................... 28
Section 5.07 Title to Properties. ............................................. 28
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Section 5.08 Enforceability of Agreement. ............................... 29
Section 5.09 No Consent. ................................................ 29
Section 5.10 Use of Proceeds; Federal Reserve Regulations. .............. 29
Section 5.11 ERISA. ..................................................... 29
Section 5.12 Subsidiaries. .............................................. 30
Section 5.13 Outstanding Indebtedness. .................................. 30
Section 5.14 Conflicting Agreements. .................................... 30
Section 5.15 Pollution and Other Regulations. ........................... 30
Section 5.16 Possession of Franchises, Licenses, Etc. ................... 31
Section 5.17 Patents, Etc. .............................................. 31
Section 5.18 Governmental Consent. ...................................... 32
Section 5.19 Disclosure. ................................................ 32
Section 5.20 Insurance Coverage. ........................................ 32
Section 5.21 Labor Matters. ............................................. 32
Section 5.22 Intercompany Loans; Dividends. ............................. 33
Section 5.23 Burdensome Restrictions. ................................... 33
Section 5.24 Investment Company Act, Etc. ............................... 33
Section 5.25 Notice of Non-Compliance with Laws. ........................ 33
ARTICLE VI AFFIRMATIVE COVENANTS ......................................... 33
Section 6.01 Corporate Existence, Etc. .................................. 33
Section 6.02 Compliance with Laws Etc. .................................. 34
Section 6.03 Payment of Taxes and Claims, Etc. .......................... 34
Section 6.04 Keeping of Books. .......................................... 34
Section 6.05 Visitation, Inspection, Etc. ............................... 34
Section 6.06 Insurance; Maintenance of Properties. ...................... 34
Section 6.07 Reporting Covenants. ....................................... 35
Section 6.08 Financial Covenants. ....................................... 38
Section 6.09 Notices Under Certain Other Indebtedness. .................. 39
Section 6.10 Additional Guarantors. ..................................... 39
Section 6.11 Financial Statements; Fiscal Year. ......................... 39
Section 6.12 Ownership of Guarantors. ................................... 39
ARTICLE VII NEGATIVE COVENANTS ............................................ 39
Section 7.01 Indebtedness. .............................................. 40
Section 7.02 Liens. ..................................................... 40
Section 7.03 Mergers, Acquisitions, Sales, Etc. ......................... 41
Section 7.04 Investments, Loans, Etc. ................................... 42
Section 7.05 Sale and Leaseback Transactions. ........................... 43
Section 7.06 Transactions with Affiliates. .............................. 43
Section 7.07 Optional Prepayments. ...................................... 44
Section 7.08 Chances in Business. ....................................... 44
Section 7.09 ERISA. ..................................................... 44
Section 7.10 Additional Negative Pledge. ................................ 44
Section 7.11 Payment Restrictions Affecting Consolidated Companies. ..... 44
Section 7.12 Actions Under Certain Documents. ........................... 45
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ARTICLE IX EVENTS OF DEFAULT ............................................. 47
Section 9.01 Payments. .................................................. 47
Section 9.02 Covenants Without Notice. .................................. 47
Section 9.03 Other Covenants. ........................................... 47
Section 9.04 Representations. ........................................... 47
Section 9.05 Non-Payments of Other Indebtedness. ........................ 48
Section 9.06 Defaults Under Other Agreements ............................ 48
Section 9.07 Bankruptcy. ................................................ 48
Section 9.08 ERISA. ..................................................... 48
Section 9.09 Money Judgment. ............................................ 49
Section 9.10 Ownership of Credit Parties. ............................... 49
Section 9.11 Change in Control of Borrower. ............................. 49
Section 9.12 Default Under Other Credit Documents. ...................... 49
Section 9.13 Attachments. ............................................... 50
ARTICLE X MISCELLANEOUS ................................................. 50
Section 10.01 Notices. ................................................... 50
Section 10.02 Amendments, Etc. ........................................... 50
Section 10.03 No Waiver; Remedies Cumulative. ............................ 51
Section 10.04 Payment of Expenses Etc. ................................... 51
Section 10.05 Right of Setoff. ........................................... 52
Section 10.06 Benefit of Agreement. ...................................... 52
Section 10.07 Governing Law; Submission to Jurisdiction. ................. 54
Section 10.08 Counterparts. .............................................. 55
Section 10.09 Effectiveness; Survival. ................................... 55
Section 10.10 Severability. .............................................. 55
Section 10.11 Independence of Covenants. ................................. 55
Section 10.12 Change in Accounting Principles; Fiscal Year or Tax Laws. .. 56
Section 10.13 Headings Descriptive; Entire Agreement. .................... 56
Section 10.14 Time is of the Essence. .................................... 56
Section 10.15 Usury. ..................................................... 56
Section 10.16 Construction. .............................................. 56
Section 10.17 Waiver of Effect of Corporate Seal. ........................ 56
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SCHEDULES
Schedule 5.01 Organization and Ownership of Subsidiaries
Schedule 5.11 Employee Benefit Matters
Schedule 5.14 Conflicting Agreements
Schedule 5.15(a) Environmental Compliance
Schedule 5.22 Intercompany Loans
Schedule 7.01(b) Existing Indebtedness
Schedule 7.02 Existing Liens
EXHIBITS
Exhibit A Form of Assignment and Acceptance
Exhibit B Form of Term Credit Note
Exhibit C Form of Closing Certificate
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REAL ESTATE TERM CREDIT AGREEMENT
THIS REAL ESTATE TERM CREDIT AGREEMENT, dated as of May 31,
2002 (the "Agreement") by and among ▇▇▇▇▇▇ SUPPLY SHARED SERVICES, INC., a
Delaware corporation ("Borrower"), ▇▇▇▇▇▇ SUPPLY, INC., a Florida corporation
("Parent"), and SUNTRUST BANK, a Georgia banking corporation (the "Lender").
W I T N E S S E T H:
WHEREAS, Borrower and Parent have requested that the Lender
establish a $25,000,000 real estate term credit facility in favor of Borrower,
and the Lender is willing to establish such real estate term credit facility in
favor of Borrower subject to the terms and conditions set forth below;
NOW, THEREFORE, in consideration of the mutual covenants made
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, agree as follows:
ARTICLE I
DEFINITIONS; CONSTRUCTION
Section 1.01 Definitions. As used in this Agreement, and in
any instrument, certificate, document or report delivered pursuant hereto, the
following terms shall have the following meanings (to be equally applicable to
both the singular and plural forms of the term defined):
"1999 Line of Credit Agreement" shall mean that certain Line
of Credit Agreement, dated as of January 26, 1999, by and among Parent, SunTrust
Bank, Central Florida, National Association (now SunTrust Bank), as
Administrative Agent, First Union National Bank, as Documentation Agent,
NationsBank N.A., as Syndication Agent, SouthTrust Bank, National Association,
as Co-Agent, and the banks and lending institutions from time to time parties
thereto, as the same has been and may hereafter be amended, restated,
supplemented or otherwise modified from time to time.
"1999 Revolving Credit Agreement" shall mean that certain
Revolving Credit Agreement, dated as of January 26, 1999, by and among Parent,
SunTrust Bank, Central Florida, National Association (now SunTrust Bank), as
Administrative Agent, First Union National Bank, as Documentation Agent,
NationsBank N.A., as Syndication Agent, SouthTrust Bank, National Association,
as Co-Agent, and the banks and lending institutions from time to time parties
thereto, as the same may be amended, restated, supplemented or otherwise
modified from time to time.
"Adjusted LIBO Rate" shall mean with respect to each Interest
Period for a Eurodollar Advance, the rate obtained by dividing (A) LIBOR for
such Interest Period by (B) a
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percentage equal to 1 minus the then stated maximum rate (stated as a decimal)
of all reserves requirements (including, without limitation, any marginal,
emergency, supplemental, special or other reserves) applicable to any member
bank of the Federal Reserve System in respect of Eurodollar liabilities as
defined in Regulation D (or against any successor category of liabilities as
defined in Regulation D). The Lender shall promptly notify Borrower of any such
reserve requirements that become applicable.
"Advance" shall mean any principal amount advanced and
remaining outstanding at any time under the Term Credit Loans, which Advance
shall be made or outstanding as a Base Rate Advance or Eurodollar Advance, as
the case may be.
"Affiliate" of any Person means any other Person directly or
indirectly controlling, controlled by, or under common control with, such
Person, whether through the ownership of voting securities, by contract or
otherwise. For purposes of this definition, "control" (including with
correlative meanings, the terms "controlling", "controlled by", and "under
common control with") as applied to any Person, means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of that Person.
"Agreement" shall mean this Real Estate Term Credit Agreement,
either as originally executed or as it may be from time to time supplemented,
amended, restated, renewed or extended and in effect.
"Applicable Facility Fee Percentage" shall mean the percentage
designated below based on Parent's Leverage Ratio for the most recently ended
fiscal quarter for which financial statements have been delivered pursuant to
Section 6.07(a) or (b):
--------------------------------------------------------------------------------
Leverage Ratio Applicable Facility Fee
Percentage for Term Credit
Commitment:
--------------------------------------------------------------------------------
Less than 0.40:1.00 0.150%
--------------------------------------------------------------------------------
Greater than or equal to 0.40:1.00 0.175%
But less than 0.45:1.00
--------------------------------------------------------------------------------
Greater than or equal to 0.45:1.00 0.200%
But less than 0.50:1.00
--------------------------------------------------------------------------------
Greater than or equal to 0.50:1.00 0.250%
But less than 0.55:1.00
--------------------------------------------------------------------------------
Greater than or equal to 0.55:1.00 0.300%
--------------------------------------------------------------------------------
provided, however, that:
(a) The Applicable Facility Fee Percentage in effect
as of the date of execution and delivery of this Agreement is
0.175% and such percentage shall remain in effect until such
time as the Applicable Facility Fee Percentage may be adjusted
as hereinafter provided;
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(b) Adjustments, if any, to the Applicable Facility
Fee Percentages based on changes in the ratios set forth above
shall be made and become effective (i) on the first day of the
fiscal quarter immediately following delivery of the financial
statements required pursuant to Section 6.07(b), and (ii) on
the first day of the second fiscal quarter immediately
following the last day of any fiscal year of Parent; and
(c) Notwithstanding the foregoing, at any time during
which the financial statements and certificates when required
by Section 6.07(a) and (b), as the case may be, have not been
delivered to the Lender when due, the Applicable Facility Fee
Percentage shall be 0.300% until such time as the delinquent
financial statements are delivered at which time the
Applicable Facility Fee Percentage shall be reset as provided
above.
"Applicable Margin" shall mean the percentage designated below
based on Parent's Leverage Ratio for the most recently ended fiscal quarter for
which financial statements have been delivered pursuant to Section 6.07(a) or
(b):
--------------------------------------------------------------------------------
Leverage Ratio Applicable Margin for
Term Credit Loans
--------------------------------------------------------------------------------
Less than 0.40:1.00 1.025%
--------------------------------------------------------------------------------
Greater than or equal to
0.40:1.00 but less than 0.45:1.00 1.125%
--------------------------------------------------------------------------------
Greater than or equal to
0.45:1.00 but less than 0.50:1.00 1.375%
--------------------------------------------------------------------------------
Greater than or equal to
0.50:1.00 but less than 0.55:1.00 1.500%
--------------------------------------------------------------------------------
Greater than or equal to
0.55:1.00 1.750%
--------------------------------------------------------------------------------
provided, however, that:
(a) The Applicable Margin in effect as of the date of
execution and delivery of this Agreement is 1.125 and such
percentage shall remain in effect until such time as the
Applicable Margin may be adjusted as hereinafter provided;
(b) Adjustments, if any, to the Applicable Margin
based on changes in the ratios set forth above shall be made
and become effective (i) on the first day of the fiscal
quarter immediately following delivery of the financial
statements required pursuant to Section 6.07(b), and (ii) on
the first day of the second fiscal quarter immediately
following the last day of any fiscal year of Parent; and
(c) Notwithstanding the foregoing, at any time during
which the financial statements and certificates when required
by Section 6.07(a) and (b), as the case may be, have not been
delivered to the Lender when due, the Applicable
3
Margin shall be 1.750% until such time as the delinquent
financial statements are delivered at which time the
Applicable Margin shall be reset as provided above.
"Asbestos Laws" means the common law in all federal, state and
local and foreign jurisdictions and other laws in such jurisdictions, and
regulations, codes, orders, decrees, judgments or injunctions issued,
promulgated, approved or entered thereunder, now or hereafter in effect relating
to or concerning asbestos or asbestos-containing material, including without
limitation, exposure to asbestos or asbestos-containing material.
"Asset Value" shall mean, with respect to any property or
asset of any Consolidated Company as of any particular date, an amount equal to
the greater of (i) the then book value of such property or asset as established
in accordance with GAAP, and (ii) the then fair market value of such property or
asset as determined in good faith by the board of directors of such Consolidated
Company.
"Assignment and Acceptance" shall mean an assignment and
acceptance entered into by the Lender and an Eligible Assignee in accordance
with the terms of this Agreement and substantially in the form of Exhibit A
attached hereto.
"Bankruptcy Code" shall mean The Bankruptcy Code of 1978, as
amended and in effect from time to time (11 U.S.C. (S) 101 et seq.).
"Base Rate" shall mean (with any change in the Base Rate to be
effective as of the date of change of either of the following rates) the higher
of (a) the rate which the Lender designates from time to time to be its prime
lending rate, as in effect from time to time, and (b) the Federal Funds Rate, as
in effect from time to time, plus one-half of one percent (0.50%) per annum. The
Lender's prime lending rate is a reference rate and does not necessarily
represent the lowest or best rate charged to customers; the Lender may make
commercial loans or other loans at rates of interest at, above or below the
Lender's prime lending rate.
"Base Rate Advance" shall mean an Advance bearing interest
based on the Base Rate.
"Base Rate Loan" shall mean any Term Credit Loan hereunder
which bears interest at the Base Rate.
"Borrowing" shall mean the incurrence by Borrower of Advances
of one Type concurrently having the same Interest Period or the continuation or
conversion of an existing Borrowing or Borrowings in whole or in part.
"Business Day" shall mean, with respect to Eurodollar Loans,
any day other than a day on which commercial banks are closed or required to be
closed for domestic and international business, including dealings in Dollar
deposits on the London interbank market, and with respect to all other Term
Credit Loans and matters, any day other than Saturday, Sunday and a day on which
commercial banks are required to be closed for business in Atlanta, Georgia, or
Orlando, Florida.
4
"Capitalized Lease Obligations" shall mean all lease
obligations which have been or are required to be, in accordance with GAAP,
capitalized on the books of the lessee.
"CERCLA" has the meaning set forth in Section 5.15(a) of this
Agreement.
"Change in Control Provision" shall mean any term or provision
contained in any indenture, debenture, note, or other agreement or document
evidencing or governing Indebtedness of Parent evidencing debt or a commitment
to extend loans in excess of $5,000,000 which requires, or permits the holder(s)
of such Indebtedness of Parent to require that such Indebtedness of Parent be
redeemed, repurchased, defeased, prepaid or repaid, either in whole or in part,
or the maturity of such Indebtedness of Borrower or Parent, as the case may be,
to be accelerated in any respect, as a result of a change in ownership of the
capital stock of Parent or voting rights with respect thereto.
"Closing Date" shall mean the later of (i) May 31, 2002 or
(ii) the date on which the initial Term Credit Loan is made and the conditions
set forth in Section 4.01 are satisfied or waived in accordance with Section
9.02.
"Consolidated Amortization" shall mean, for any fiscal period
of Parent, amortization of the Consolidated Companies for such period determined
on a consolidated basis in accordance with GAAP.
"Consolidated Companies" shall mean, collectively, Borrower,
Parent and all of Parent's other Subsidiaries.
"Consolidated Depreciation" shall mean, for any fiscal period
of Parent, depreciation of the Consolidated Companies for such period determined
on a consolidated basis in accordance with GAAP.
"Consolidated EBITR" shall mean, for any fiscal period of
Parent, an amount equal to Consolidated Net Income (Loss) for such period, plus
to the extent deducted in determining Consolidated Net Income (Loss), (i)
Consolidated Tax Expense for such period, (ii) Consolidated Interest Expense for
such period, and (iii) Consolidated Rental Expense for such period.
"Consolidated EBITDAR" shall mean, for any fiscal period of
Borrower, an amount equal to Consolidated Net Income (Loss) for such period plus
to the extent deducted in determining Consolidated Net Income (Loss), (i)
Consolidated Interest Expense for such period, (ii) Consolidated Tax Expense for
such period, (iii) Consolidated Depreciation for such period, (iv) Consolidated
Amortization for such period and (v) Consolidated Rental Expense for such
period.
"Consolidated Interest Expense" shall mean, for any fiscal
period of Parent, total interest expense (including without limitation, interest
expense attributable to capitalized leases in accordance with the GAAP and any
program costs incurred in connection with sales of accounts receivable pursuant
to a securitization program) of the Consolidated Companies for such period,
determined on a consolidated basis.
5
"Consolidated Net Income (Loss)" shall mean, for any fiscal
period of Parent, the net income (or loss) of the Consolidated Companies for
such period (taken as a single accounting period) determined on a consolidated
basis in conformity with GAAP; provided that there shall be excluded therefrom
(i) any items of gain or loss which were included in determining such
Consolidated Net Income and were not realized in the ordinary course of business
or the result of a sale of assets other than in the ordinary course of business;
and (ii) the income (or loss) of any party accrued prior to the date such
becomes a Subsidiary of Parent or is merged into or consolidated with Parent or
any of its Subsidiaries, or such party's assets are acquired by any Consolidated
Company, unless such party is acquired in a transaction accounted for as a
pooling of interests.
"Consolidated Net Worth" shall mean as of the date of
determination, Parent's total shareholders' equity of such date as determined in
accordance with GAAP.
"Consolidated Rental Expense" shall mean, for any fiscal
period of Parent, total operating lease expense of the Consolidated Companies
for such period, determined on a consolidated basis in accordance with GAAP.
"Consolidated Tax Expense" shall mean, for any fiscal period
of Parent, tax expense of the Consolidated Companies for such period determined
on a consolidated basis in accordance with GAAP.
"Contractual Obligation" of any Person shall mean any
provision of any security issued by such Person or of any agreement, instrument
or undertaking under which such Person is obligated or by which it or any of the
property owned by it is bound.
"Credit Documents" shall mean, collectively, this Agreement,
the Term Credit Note, the Guaranty Agreement, and all other Security Documents,
if any.
"Credit Parties" shall mean, collectively, each of Borrower,
Parent, the other Guarantors, and every other Person who, from time to time,
executes a Credit Document with respect to all or any portion of the
Obligations.
"Default" shall mean any condition or event which, with notice
or lapse of time or both, would constitute an Event of Default.
"Dollar" and "U.S. Dollar" and the sign "$" shall mean lawful
money of the United States of America.
"Eligible Assignee" shall mean (i) a commercial bank organized
under the laws of the United States of America, or any state thereof, or
organized under the laws of any other country with a Lending Office in the
United States of America, having total assets in excess of $1,000,000,000 or any
commercial finance or asset based lending Affiliate of any such commercial bank
and (ii) any Lender or any Affiliate of any Lender.
"Environmental Laws" shall mean all federal, state, local and
foreign statutes and codes or regulations, rules or ordinances issued,
promulgated, or approved thereunder, now or
6
hereafter in effect (including, without limitation, Asbestos Laws), relating to
pollution or protection of the environment and relating to public health and
safety, relating to (i) emissions, discharges, releases or threatened releases
of pollutants, contaminants, chemicals or industrial toxic or hazardous
constituents, substances or wastes, including without limitation, any Hazardous
Substance, petroleum including crude oil or any fraction thereof, any petroleum
product or other waste, chemicals or substances regulated by any Environmental
Law into the environment (including without limitation, ambient air, surface
water, ground water, land surface or subsurface strata), or (ii) the
manufacture, processing, distribution, use, generation, treatment, storage,
disposal, transport or handling of any Hazardous Substance, petroleum including
crude oil or any fraction thereof, any petroleum product or other waste,
chemicals or substances regulated by any Environmental Law, and (iii)
underground storage tanks and related piping, and emissions, discharges and
releases or threatened releases therefrom, such Environmental Laws to include,
without limitation (i) the Clean Air Act (42 U.S.C.(S) 7401 et seq.), (ii) the
Clean Water Act (33 U.S.C.(S) 1251 et seq.), (iii) the Resource Conservation and
Recovery Act (42 U.S.C.(S) 6901 et seq.), (iv) the Toxic Substances Control Act
(15 U.S.C.(S) 2601 et seq.) and (v) the Comprehensive Environmental Response
Compensation and Liability Act, as amended by the Superfund Amendments and
Reauthorization Act (42 U.S.C.(S) 9601 et seq.).
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended and in effect from time to time.
"ERISA Affiliate" shall mean, with respect to any Person, each
trade or business (whether or not incorporated) which is a member of a group of
which that Person is a member and which is under common control within the
meaning of the regulations promulgated under Section 414 of the Tax Code.
"Eurodollar Advance" shall mean an Advance bearing interest
based on the Adjusted LIBO Rate.
"Eurodollar Loan" shall mean any Term Credit Loan hereunder
which bears interest based on the Adjusted LIBO Rate.
"Event of Default" shall have the meaning set forth in Article
VIII.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended from time to time, and any successor statute thereto.
"Executive Officer" shall mean with respect to Borrower or
Parent, the President, Vice Presidents, Chief Financial Officer, Treasurer,
Secretary and any Person holding comparable offices or duties of Borrower or
Parent, as the case may be, and with respect to any other Credit Party, the
President.
"Existing Synthetic Lease" shall mean, collectively, (i) that
certain Master Agreement dated as of June 22, 2001 among Parent, as "Guarantor,"
Parent and certain of its Subsidiaries that may become party thereto, as
"Lessees," Atlantic Financial Group, LTD., as "Lessor," the certain financial
institutions party thereto, as "Lenders," and Lender, as "Agent"
7
and (ii) that certain Master Lease Agreement dated as of June 22, 2001 between
Atlantic Financial Group, LTC, as "Lessor," and Parent with certain of its
Subsidiaries, and "Lessees."
"Extension of Credit" shall mean the making of a Term Credit
Loan or the conversion of a Term Credit Loan of one Type into a Term Credit Loan
of another Type.
"Facility" or "Facilities" shall mean the Term Credit
Commitment and Term Credit Loans.
"Facility Fee" shall have the meaning assigned to such term in
Section 3.05(a).
"Federal Funds Rate" shall mean for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with member banks
of the Federal Reserve System arranged by Federal funds brokers, as published
for such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of Atlanta, or, if such rate is not so
published for any day which is a Business Day, the average of the quotations for
such day on such transactions received by the Lender from three Federal funds
brokers of recognized standing selected by the Lender.
"Fixed Charge Coverage Ratio" shall mean, as of any date of
determination, the ratio of (A) Consolidated EBITDAR to (B) the sum of (i)
Consolidated Interest Expense plus (ii) Consolidated Rental Expense, in each
case measured for the four fiscal quarter period ending on such date (or if such
date is not the last day of any fiscal quarter, for the four fiscal quarter
period ending immediately prior to such date).
"GAAP" shall mean generally accepted accounting principles in
the United States of America applied on a consistent basis and subject to the
terms of Section 1.02.
"Guaranteed Indebtedness" shall mean, as to any Person, any
obligation of such Person guaranteeing any indebtedness, lease, dividend, or
other obligation ("primary obligation") of any other Person (the "primary
obligor") in any manner including, without limitation, any obligation or
arrangement of such Person (a) to purchase or repurchase any such primary
obligation, (b) to advance or supply funds (i) for the purchase or payment of
any such primary obligation or (ii) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth or
solvency or any balance sheet condition of the primary obligor, (c) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation, or (d) to indemnify the owner of such
primary obligation against loss in respect thereof.
"Guarantors" shall mean, collectively, Parent and each
Material Subsidiary of Parent that has executed the Guaranty Agreement as of the
Closing Date, together with all other Material Subsidiaries that hereafter
execute supplements to the Guaranty Agreement, and their respective successors
and permitted assigns.
8
"Guaranty Agreement" shall mean the Guaranty Agreement, dated
as of the date hereof, executed by certain of Parent's Material Subsidiaries in
favor of the Lender, as the same may be amended, restated or supplemented from
time to time.
"Hazardous Materials" shall mean oil, petroleum or chemical
liquids or solids, liquid or gaseous products, asbestos, or any other hazardous
waste or hazardous substances, including, without limitation, hazardous medical
waste or any other substance described in any Hazardous Materials Law.
"Hazardous Materials Law" shall mean the Comprehensive
Environmental Response Compensation and Liability Act as amended by the Super
Fund Amendments and Reauthorization Act, 42 U.S.C. (S) 9601, the Resource
Conservation and Recovery Act, 42 U.S.C.(S) 6901, the state hazardous waste
laws, as such laws may from time to time be in effect, and related regulations,
and all similar laws and regulations.
"Hazardous Substances" has the meaning assigned to that term
in CERCLA.
"▇▇▇▇▇▇ Family" shall mean (i) ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, (ii) any of their direct family members (including,
without limitation, lineal ancestors and descendants, siblings, and lineal
descendants of siblings), (iii) any trusts and profit sharing plans and stock
option plans established for the sole benefit of the foregoing, and (iv) the
heirs and personal representatives of the foregoing.
"Indebtedness" of any Person shall mean, without duplication
(i) all obligations of such Person which in accordance with GAAP would be shown
on the balance sheet of such Person as a liability (including, without
limitation, obligations for borrowed money and for the deferred purchase price
of property or services, and obligations evidenced by bonds, debentures, notes
or other similar instruments); (ii) all Guaranteed Indebtedness of such Person
(including contingent reimbursements obligations under undrawn financial letters
of credit but not performance letters of credit) (iii) all Capitalized Lease
Obligations; (iv) all Indebtedness of others secured by any Lien upon property
owned by such Person, whether or not assumed; and (v) all obligations or other
liabilities under currency contracts, interest rate contracts, interest rate
protection agreements, or similar agreements or combinations thereof.
Notwithstanding the foregoing, in determining the Indebtedness of any Person,
there shall be included all obligations of such Person of the character referred
to in clauses (i) through (v) above deemed to be extinguished under GAAP but for
which such Person remains legally liable except to the extent that such
obligations (x) have been defeased in accordance with the terms of the
applicable instruments governing such obligations and (y) the accounts or other
assets dedicated to such defeasance are not included as assets on the balance
sheet of such Person.
"Intercompany Loan Documents" shall mean, collectively, the
promissory notes and all related loan, subordination, and other agreements, to
the extent that they exist, relating in any manner to the Intercompany Loans.
"Intercompany Loans" shall mean, collectively, (i) the loans
more particularly described on Schedule 5.22 and (ii) those loans or other
extensions of credit made by any
9
Consolidated Company to another Consolidated Company satisfying the terms and
conditions set forth in Section 7.01 or as may otherwise be approved in writing
by the Lender.
"Interest Period" shall mean with respect to Eurodollar Advances, the
period of 1, 2, 3 or 6 months selected by Borrower, subject to customary
adjustments in duration; provided, that (a) the first day of an Interest Period
must be a Business Day, (b) any Interest Period that would otherwise end on a
day that is not a Business Day for Eurodollar Loans shall be extended to the
next succeeding Business Day for Eurodollar Loans, unless such Business Day
falls in the next calendar month, in which case the Interest Period shall end on
the next preceding Business Day for Eurodollar Loans, and (c) Borrower may not
elect an Interest Period that would extend beyond the Term Credit Termination
Date.
"Investment" shall mean, when used with respect to any Person, any
direct or indirect advance, loan or other extension of credit (other than the
creation of receivables in the ordinary course of business) or capital
contribution by such Person (by means of transfers of property to others or
payments for property or services for the account or use of others, or
otherwise) to any Person, or any direct or indirect purchase or other
acquisition by such Person of, or of a beneficial interest in, capital stock,
partnership interests, bonds, notes, debentures or other securities issued by
any other Person.
"Lender" shall have the meaning assigned in the introductory paragraph
hereto.
"Lending Office" shall mean the office Lender may designate in writing
from time to time to Borrower.
"Leverage Ratio" shall mean, as of any date of determination, the
ratio of Total Funded Debt as of such date to Total Capitalization as of such
date.
"LIBOR" shall mean, for any Interest Period, the offered rates for
deposits in U.S. dollars for a period comparable to the Interest Period
appearing on the Telerate Page 3750, as of 11:00 a.m. London time on the day
that is two business days prior to the Interest Period. If at least two such
rates appear on the Telerate Page 3750, the rate for that Interest Period will
be the arithmetic mean of such rates, rounded, if necessary, to the next higher
1/16 of 1.0%. If the foregoing rate is unavailable from the Telerate Page 3750
for any reason, then such rate shall be determined by the Lender from the
Reuters Screen LIBOR Page, or if such rate is also unavailable on such service,
then on any other interest rate reporting service of recognized standing
designated in writing by the Lender to Borrower; in any such case rounded, if
necessary, to the next higher 1/16 of 1.0%, if the rate is not such a multiple.
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind or description and shall include,
without limitation, any agreement to give any of the foregoing, any conditional
sale or other title retention agreement, any capital lease in the nature thereof
including any lease or similar arrangement with a public authority executed in
connection with the issuance of industrial development revenue bonds or
pollution control revenue bonds, and the filing of or agreement to give any
financing statement under the Uniform Commercial Code of any jurisdiction.
10
"Materially Adverse Effect" shall mean the occurrence of an event
which would (i) cause the recognition of a liability, as required by Statement
of Financial Accounting Standards No. 5, in the current quarter financial
statements in the amount of $15,000,000 or more, or (ii) cause an auditor to
have a substantial doubt about the ability of Parent or Borrower to continue as
a going concern after consideration of management's plans as described in
Statement of Auditing Standards, No. 59.
"Material Subsidiary" shall mean each Subsidiary of Parent, now
existing or hereinafter established or acquired, that at any time prior to the
Term Credit Termination Date, has or acquires total assets in excess of
$1,000,000 or that accounted for or produced more than 5% of the Consolidated
EBITR of Parent on a consolidated basis during any of the three most recently
completed fiscal years of Parent.
"Multiemployer Plan" shall have the meaning set forth in Section
4001(a)(3) of ERISA.
"Notice of Borrowing" shall have the meaning provided in Section 3.01.
"Notice of Continuation/Conversion" shall have the meaning provided in
Section 3.01.
"Obligations" shall mean all amounts owing to the Lender pursuant to
the terms of this Agreement or any other Credit Document, including without
limitation, all Term Credit Loans (including all principal and interest payments
due thereunder), fees, expenses, indemnification and reimbursement obligations,
payments, indebtedness, liabilities, and obligations of the Credit Parties,
direct or indirect, absolute or contingent, liquidated or unliquidated, now
existing or hereafter arising, together with all renewals, extensions,
modifications or refinancings thereof.
"Parent" shall have the meaning assigned in the introductory paragraph
hereto.
"Payment Office" shall mean the "Payment Office" listed on the
signature page to this Agreement.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, and any
successor thereto.
"Permitted Liens" shall mean those Liens expressly permitted by
Section 7.02.
"Person" shall mean and shall include an individual, a partnership, a
joint venture, a corporation, a trust, an unincorporated association, a
government or any department or agency thereof and any other entity whatsoever.
"Plan" shall mean any employee benefit plan, program, arrangement,
practice or contract, maintained by or on behalf of Borrower or an ERISA
Affiliate, which provides benefits or compensation to or on behalf of employees
or former employees, whether formal or informal, whether or not written,
including but not limited to the following types of plans:
11
(i) Executive Arrangements - any bonus, incentive compensation,
stock option, deferred compensation, commission, severance, "golden
parachute", "rabbi trust", or other executive compensation plan, program,
contract, arrangement or practice;
(ii) ERISA Plans- any "employee benefit plan" as defined in Section
3(3) of ERISA), including, but not limited to, any defined benefit pension
plan, profit sharing plan, money purchase pension plan, savings or thrift
plan, stock bonus plan, employee stock ownership plan, Multiemployer Plan,
or any plan, fund, program, arrangement or practice providing for medical
(including post-retirement medical), hospitalization, accident, sickness,
disability, or life insurance benefits;
(iii) Other Employee Fringe Benefits- any stock purchase, vacation,
scholarship, day care, prepaid legal services, severance pay or other
fringe benefit plan, program, arrangement, contract or practice.
"Requested Commitment Amount" shall have the meaning assigned to it in
Section 3.03.
"Requirement of Law" for any Person shall mean the articles or
certificate of incorporation and by-laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation, or
determination of an arbitrator or a court or other governmental authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"Reuters Screen" shall mean, when used in connection with any
designated page and LIBOR, the display page so designated on the Reuter Monitor
Money Rates Service (or such other page as may replace that page on that service
for the purpose of displaying rates comparable to LIBOR).
"Security Documents" shall mean, collectively, the Guaranty Agreement,
and each other guaranty agreement, mortgage, deed of trust, security agreement,
pledge agreement, or other security or collateral document guaranteeing or
securing the Obligations or the amounts owed pursuant to the Guaranty Agreement,
in each case, as the same may be amended, restated, or supplemented from time to
time.
"Subordinated Debt" shall mean all Indebtedness of Borrower, Parent
and Parent's other Subsidiaries subordinated to all obligations of Borrower,
Parent and Parent's other Subsidiaries or any other Credit Party arising under
this Agreement, the Term Credit Note and the Guaranty Agreement on terms and
conditions satisfactory in all respects to the Lender, including without
limitation, with respect to interest rates, payment terms, maturities,
amortization schedules, covenants, defaults, remedies, and subordination
provisions, as evidenced by the written approval of the Lender.
"Subsidiary" shall mean, with respect to any Person, any corporation
or other entity (including, without limitation, partnerships, joint ventures,
and associations) regardless of its jurisdiction of organization or formation,
at least a majority of the total combined voting
12
power of all classes of voting stock or other ownership interests of which
shall, at the time as of which any determination is being made, be owned by such
Person, either directly or indirectly through one or more other Subsidiaries.
"Tax Code" shall mean the Internal Revenue Code of 1986, as amended
and in effect from time to time.
"Taxes" shall mean any present or future taxes, levies, imposts,
duties, fees, assessments, deductions, withholdings or other charges of whatever
nature, including without limitation, income, receipts, excise, property, sales,
transfer, license, payroll, withholding, social security and franchise taxes now
or hereafter imposed or levied by the United States of America, or any state,
local or foreign government or by any department, agency or other political
subdivision or taxing authority thereof or therein and all interest, penalties,
additions to tax and similar liabilities with respect thereto.
"Telerate" shall mean, when used in connection with any designated
page and "LIBOR," the display page so designated on the Dow ▇▇▇▇▇ Telerate
Service (or such other page as may replace that page on that service for the
purpose of displaying rates comparable to "LIBOR").
"Term Credit Loans" or "Loans" shall mean, collectively, the term
credit loans made to Borrower by the Lender pursuant to Section 2.01.
"Term Credit Commitment" or "Commitment" shall mean Twenty Five
Million and No/100 Dollars ($25,000,000.00) as the same may be increased or
decreased from time to time as a result of any reduction thereof pursuant to
Section 2.03 or any amendment thereof pursuant to Section 9.02.
"Term Credit Termination Date" shall mean the earlier of (i) July 31,
2005, and (ii) the date on which the Term Credit Commitment is terminated in
accordance with Article VIII.
"Term Credit Note" or "Note" shall mean that certain promissory note
evidencing the Term Credit Loans in substantially the form of Exhibit B attached
hereto.
"Total Capitalization" shall mean, as of any date of determination,
the sum of (i) Total Funded Debt plus (ii) Consolidated Net Worth as of such
date.
"Total Funded Debt" shall mean all Indebtedness of the Consolidated
Companies that by its terms or by the terms of any instrument or agreement
relating thereto matures, or which is otherwise payable or unpaid, one year or
more from, or is directly or indirectly renewable or extendable at the option of
the debtor to a date one year or more (including an option of the debtor under a
revolving credit or similar agreement obligating the lender or lenders to extend
credit over a period of one year or more) from, the date of the creation
thereof, provided that Total Funded Debt shall include, as at any date of
determination, any portion of such Indebtedness outstanding on such date which
matures on demand or within one year from such date (whether by sinking fund,
other required prepayment, or final payment at maturity) and
13
shall also include all Indebtedness of the Consolidated Companies for borrowed
money under a line of credit, guidance line, revolving credit, bankers
acceptance facility or similar arrangement for borrowed money, including,
without limitation, all unpaid drawings under letters of credit and unreimbursed
amounts pursuant to letter of credit reimbursement agreements, regardless of the
maturity date thereof.
"Type" of Borrowing shall mean a Borrowing consisting of Base Rate
Advances or Eurodollar Advances.
"United States of America" shall mean the fifty (50) States and the
District of Columbia.
"Wholly Owned Subsidiary" shall mean any Subsidiary, all the stock or
ownership interest of every class of which, except directors' qualifying shares,
shall, at the time as of which any determination is being made, be owned by
Borrower either directly or indirectly.
Section 1.02 Accounting Terms and Determination. Unless otherwise
defined or specified herein, all accounting terms shall be construed herein, all
accounting determinations hereunder shall be made, all financial statements
required to be delivered hereunder shall be prepared, and all financial records
shall be maintained in accordance with, GAAP.
Section 1.03 Other Definitional Terms. The words "hereof", "herein"
and "hereunder" and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement, and Article, Section, Schedule, Exhibit and like references are to
this Agreement unless otherwise specified.
Section 1.04 Exhibits and Schedules. All Exhibits and Schedules
attached hereto are by reference made a part hereof.
ARTICLE II
TERM CREDIT COMMITMENT
Section 2.01 Term Credit Commitment; Use of Proceeds.
(a) Subject to and upon the terms and conditions herein set forth,
the Lender agrees to make to Borrower from time to time on and after the Closing
Date, but prior to the Term Credit Termination Date, Term Credit Loans in an
aggregate amount outstanding at any time not to exceed the Term Credit
Commitment. Borrower shall not be entitled to reborrow any amounts repaid with
respect to the Term Credit Loans.
(b) Each Term Credit Loan shall, at the option of Borrower, be made
or continued as, or converted into, part of one or more Borrowings comprised of
Base Rate Advances or Eurodollar Advances. The aggregate principal amount of
each Borrowing of Term
14
Credit Loans comprised of Eurodollar Advances shall not be less than $5,000,000
or a greater integral multiple of $100,000. The aggregate principal amount of
each Borrowing of Term Credit Loans comprised of Base Rate Advances shall not be
less than $1,000,000 or a greater integral multiple of $100,000. The parties
hereto agree that the aggregate principal balance of the Term Credit Loans shall
at no time exceed the Term Credit Commitment.
(c) The proceeds of the Term Credit Loans shall be used solely
to pay costs and expenses incurred in connection with the construction of
Borrower's headquarters located in Orlando, Florida.
Section 2.02 Term Credit Note; Repayment of Principal.
(a) Borrower's obligations to pay the principal of, and interest
on, the Term Credit Loans shall be evidenced by the records of the Lender and by
the Term Credit Note payable to the Lender (or the assignee of the Lender)
completed in conformity with this Agreement.
(b) All outstanding principal amounts under the Term Credit
Loans shall be due and payable in full on the Term Credit Termination Date.
Section 2.03 Voluntary Reduction of Term Credit Commitment. Upon
at least three (3) Business Days' prior telephonic notice (promptly confirmed in
writing) to the Lender, Borrower shall have the right, without premium or
penalty, to terminate the Term Credit Commitment, in part or in whole, provided
that (i) any partial termination pursuant to this Section 2.03 shall be in an
amount of at least $5,000,000 and integral multiples of $1,000,000, and (ii) no
such reduction shall be permitted if prohibited or without payment of all costs
required to be paid hereunder with respect to a prepayment. If the aggregate
outstanding amount of the Term Credit Loans exceeds the amount of the Term
Credit Commitment as so reduced, Borrower shall immediately repay the Term
Credit Loans by an amount equal to such excess, together with all accrued but
unpaid interest on such excess amount and any amounts due under Section 3.12
hereof.
ARTICLE III
GENERAL LOAN TERMS
Section 3.01 Funding Notices.
(a) Whenever Borrower desires to make a Borrowing under its Term
Credit Commitment, it shall give the Lender prior written notice (or telephonic
notice promptly confirmed in writing) of such Borrowing (a "Notice of
Borrowing") at its Payment Office such Notice of Borrowing to be given prior to
(x) 11:00 A.M. (local time for the Lender) one (1) Business Day prior to the
requested date of such Borrowing in the case of Base Rate Advances and (y) 11:00
A.M. (local time for the Lender) three (3) Business Days prior to the requested
date of such Borrowing in the case of Eurodollar Advances. Notices received
after 11:00 A.M.
15
for Base Rate Advances and Eurodollar Advances shall be deemed received on the
next Business Day. Each Notice of Borrowing shall be irrevocable and shall
specify the aggregate principal amount of the Borrowing, the date of Borrowing
(which shall be a Business Day), and whether the Borrowing is to consist of Base
Rate Advances or Eurodollar Advances and (in the case of Eurodollar Advances)
the Interest Period to be applicable thereto.
(b) Whenever Borrower desires to convert all or a portion of an
outstanding Borrowing of Term Credit Loans, which Borrowing consists of Base
Rate Advances, into one or more Borrowings consisting of Eurodollar Advances or
to continue outstanding a Borrowing consisting of Eurodollar Advances for a new
Interest Period, it shall give the Lender at least three Business Days' prior
written notice (or telephonic notice promptly confirmed in writing) of each such
Borrowing to be converted into or continued as Eurodollar Advances. Such notice
(a "Notice of Continuation/Conversion") shall be given prior to 11:00 A.M.
(local time for the Lender) on the date specified at the Payment Office of the
Lender. Each such Notice of Continuation/Conversion shall be irrevocable and
shall specify the aggregate principal amount of the Advances to be converted or
continued, the date of such conversion or continuation and the Interest Period
applicable thereto. If, upon the expiration of any Interest Period in respect of
any Borrowing, Borrower shall have failed to deliver the Notice of
Continuation/Conversion, Borrower shall be deemed to have elected to convert or
continue such Borrowing as a Borrowing consisting of Base Rate Advances. So long
as any Executive Officer of Borrower has knowledge that any Default or Event of
Default shall have occurred and be continuing, no Borrowing may be converted
into or continued as (upon expiration of the current Interest Period) Eurodollar
Advances unless the Lender shall have otherwise consented in writing. No
conversion of any Borrowing of Eurodollar Advances shall be permitted except on
the last day of the Interest Period in respect thereof.
(c) Without in any way limiting Borrower's obligation to confirm
in writing any telephonic notice, the Lender may act without liability upon the
basis of telephonic notice believed by the Lender in good faith to be from
Borrower prior to receipt of written confirmation. In each such case, Borrower
hereby waives the right to dispute the Lender's record of the terms of such
telephonic notice.
Section 3.02 Disbursement of Funds. No later than 11:00 A.M.
(local time for the Lender) on the date of each Borrowing of Term Credit Loans
(other than one resulting from a conversion or continuation pursuant to Section
3.01(b)), the Lender will make available to Borrower the amount of such
Borrowing in immediately available funds at the Payment Office of the Lender.
The Lender will make available to Borrower the amounts (if any) by crediting
such amount to Borrower's demand deposit account maintained with the Lender or,
at Borrower's option, by effecting a wire transfer of such amounts to Borrower's
account specified by Borrower, by the close of business on such Business Day.
Section 3.03 Interest.
(a) Borrower agrees to pay interest in respect of all unpaid
principal amounts of the Term Credit Loans from the respective dates such
principal amounts were advanced to
16
maturity (whether by acceleration, notice of prepayment or otherwise) at rates
per annum (on the basis of a 360-day year) equal to the applicable rates
indicated below:
(i) For Base Rate Advances--The Base Rate in effect from time to
time; and
(ii) For Eurodollar Advances--The relevant Adjusted LIBO Rate
plus the Applicable Margin.
(b) Overdue principal and, to the extent not prohibited by
applicable law, overdue interest, in respect of the Term Credit Loans and all
other overdue amounts owing hereunder, shall bear interest from each date that
such amounts are overdue:
(i) in the case of overdue principal and interest with respect
to all Term Credit Loans outstanding as Eurodollar Advances, at the
rate otherwise applicable for the then-current Interest Period plus an
additional two percent (2.0%) per annum; thereafter at the rate in
effect for Base Rate Advances plus an additional two percent (2.0%)
per annum; and
(ii) in the case of overdue principal and interest with respect
to all other Term Credit Loans outstanding as Base Rate Advances, and
all other Obligations hereunder (other than Term Credit Loans), at a
rate equal to the applicable Base Rate plus an additional two percent
(2.0%) per annum;
provided that no Term Credit Loan shall bear interest after maturity, whether by
non-payment at scheduled due date, acceleration, notice of prepayment or
otherwise at a rate per annum less than two percent (2.0%) per annum in excess
of the rate of interest applicable thereto at maturity.
(c) Interest on each Term Credit Loan shall accrue from and
including the date of such Term Credit Loan to, but excluding, the date of any
repayment thereof; provided that, if a Term Credit Loan is repaid on the same
day made, one day's interest shall be paid on such Term Credit Loan. Interest on
all outstanding Base Rate Advances shall be payable quarterly in arrears on the
last calendar day of each fiscal quarter of Borrower in each year. Interest on
all outstanding Eurodollar Advances shall be payable on the last day of each
Interest Period applicable thereto, and, in the case of Eurodollar Advances
having an Interest Period in excess of three months, on each day which occurs
every three months, as the case may be, after the initial date of such Interest
Period. Interest on all Term Credit Loans shall be payable on any conversion of
any Advances comprising such Term Credit Loans into Advances of another Type,
prepayment (on the amount prepaid), at maturity (whether by acceleration, notice
of prepayment or otherwise) and, after maturity, on demand.
(d) The Lender, upon determining the Adjusted LIBO Rate for any
Interest Period, shall promptly notify Borrower by telephone (confirmed in
writing) or in writing. Any such determination shall, absent manifest error, be
final, conclusive and binding for all purposes.
Section 3.04 Interest Periods. In connection with the making or
continuation of, or conversion into, each Borrowing of Term Credit Loans
comprised of Eurodollar Advances,
17
Borrower shall select an interest period (each an "Interest Period") to be
applicable to such Eurodollar Advances, which Interest Period shall be either a
1, 2, 3 or 6 month period, provided that:
(a) The initial Interest Period for any Borrowing of Eurodollar
Advances shall commence on the date of such Borrowing (including the date of any
conversion from a Borrowing consisting of Advances of another Type) and each
Interest Period occurring thereafter in respect of such Borrowing shall commence
on the day on which the next preceding Interest Period expires;
(b) If any Interest Period would otherwise expire on a day which
is not a Business Day, such Interest Period shall expire on the next succeeding
Business Day, provided that if any Interest Period in respect of Eurodollar
Advances would otherwise expire on a day that is not a Business Day but is a day
of the month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day;
(c) Any Interest Period in respect of Eurodollar Advances which
begins on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period shall, subject to part (iv)
below, expire on the last Business Day of such calendar month;
(d) No Interest Period shall extend beyond any date upon which
any principal payment is due with respect to the Term Credit Loans.
Section 3.05 Fees. Borrower shall pay to the Lender, a facility
fee (the "Facility Fee") for the period commencing on the Closing Date to and
including the Term Credit Termination Date based on the Applicable Facility Fee
Percentage and the daily amount of the undrawn portion of the Term Credit
Commitment, such fee being payable quarterly in arrears on the last calendar day
of each fiscal quarter of Borrower and on the Term Credit Termination Date.
Section 3.06 Voluntary Prepayments of Borrowings.
(a) Borrower may, at its option, prepay Borrowings consisting of
Base Rate Advances at any time in whole, or from time to time in part, in
amounts aggregating $1,000,000 or any greater integral multiple of $1,000,000,
by paying the principal amount to be prepaid together with interest accrued and
unpaid thereon to the date of prepayment. Those Borrowings consisting of
Eurodollar Advances may be prepaid, at Borrower's option, in whole, or from time
to time in part, in amounts aggregating $5,000,000 or any greater integral
multiple of $1,000,000, by paying the principal amount to be prepaid, together
with interest accrued and unpaid thereon to the date of prepayment and all
compensation payments pursuant to Section 3.12 if such prepayment is made on a
date other than the last day of an Interest Period applicable thereto. Each such
optional prepayment shall be applied in accordance with Section 3.07(c) below.
(b) Borrower shall give written notice (or telephonic notice
confirmed in writing) to the Lender of any intended prepayment of (i) Base Rate
Advances not less than one
18
Business Day prior to any such prepayments and (ii) Eurodollar Advances not less
than three Business Days prior to any such prepayment. Such notice, once given,
shall be irrevocable.
(c) Borrower, when providing notice of prepayment pursuant to
Section 3.06(b) may designate the Types of Advances and the specific Borrowing
or Borrowings which are to be prepaid, provided that if any prepayment of
Eurodollar Advances made pursuant to a single Borrowing of the Term Credit Loans
shall reduce the outstanding Advances made pursuant to such Borrowing to an
amount less than $1,000,000, such Borrowing shall immediately be converted into
Base Rate Advances. All voluntary prepayments shall be applied to the payment of
any unpaid interest before application to principal.
Section 3.07 Payments, etc.
(a) Except as otherwise specifically provided herein, all
payments under this Agreement and the other Credit Documents, other than the
payments specified in clause (ii) below, shall be made without defense, set-off
or counterclaim to the Lender, not later than 2:00 P.M. (local time for the
Lender) on the date when due and shall be made in Dollars in immediately
available funds at the Payment Office.
(b) All such payments shall be made free and clear of and
without deduction or withholding for any Taxes in respect of this Agreement, the
Term Credit Note or other Credit Documents, or any payments of principal,
interest, fees or other amounts payable hereunder or thereunder (but excluding
any Taxes imposed on the overall net income of the Lender pursuant to the laws
of the jurisdiction in which the principal executive office or appropriate
Lending Office of the Lender is located). If any Taxes are so levied or imposed,
Borrower agrees (A) to pay the full amount of such Taxes, and such additional
amounts as may be necessary so that every net payment of all amounts due
hereunder and under the Term Credit Note and the other Credit Documents, after
withholding or deduction for or on account of any such Taxes (including
additional sums payable under this Section 3.07), will not be less than the full
amount provided for herein had no such deduction or withholding been required,
(B) to make such withholding or deduction and (C) to pay the full amount
deducted to the relevant authority in accordance with applicable law. Borrower
will furnish to the Lender within 30 days after the date the payment of any
Taxes is due pursuant to applicable law, certified copies of tax receipts
evidencing such payment by Borrower. Borrower will indemnify and hold harmless
the Lender and reimburse the Lender upon written request for the amount of any
Taxes so levied or imposed and paid by the Lender and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes were correctly or illegally asserted. A certificate as
to the amount of such payment by the Lender, absent manifest error, shall be
final, conclusive and binding for all purposes.
(c) All computations of interest and fees shall be made on the
basis of a year of 360 days for the actual number of days (including the first
day but excluding the last day) occurring in the period for which such interest
or fees are payable (to the extent computed on the basis of days elapsed).
Interest on Base Rate Advances shall be calculated based on the Base Rate from
and including the date of such Term Credit Loan to but excluding the date of the
repayment or conversion thereof. Interest on Eurodollar Advances shall be
calculated as to each
19
Interest Period from and including the first day thereof to but excluding the
last day thereof. Each determination by the Lender of an interest rate or fee
hereunder shall be made in good faith and, except for manifest error, shall be
final, conclusive and binding for all purposes.
Section 3.08 Interest Rate Not Ascertainable, etc. In the
event that the Lender, in the case of the Adjusted LIBO Rate, shall have
determined (which determination shall be made in good faith and, absent manifest
error, shall be final, conclusive and binding upon all parties) that on any date
for determining the Adjusted LIBO Rate for any Interest Period, by reason of any
changes arising after the date of this Agreement affecting the London interbank
market or the Lender's position in such market, adequate and fair means do not
exist for ascertaining the applicable interest rate on the basis provided for in
the definition of Adjusted LIBO Rate then, and in any such event, the Lender
shall forthwith give notice (by telephone confirmed in writing) to Borrower and
a summary of the basis for such determination. Until the Lender notifies
Borrower that the circumstances giving rise to the suspension described herein
no longer exist, the obligations of the Lender to make or permit portions of the
Term Credit Loans to remain outstanding past the last day of the then current
Interest Periods as Eurodollar Advances shall be suspended, and such affected
Advances shall bear the same interest as Base Rate Advances.
Section 3.09 Illegality.
(a) In the event that the Lender shall have determined (which
determination shall be made in good faith and, absent manifest error, shall be
final, conclusive and binding upon all parties) at any time that the making or
continuance of any Eurodollar Advance has become unlawful by compliance by the
Lender in good faith with any applicable law, governmental rule, regulation,
guideline or order (whether or not having the force of law and whether or not
failure to comply therewith would be unlawful), then, in any such event, the
Lender shall give prompt notice (by telephone confirmed in writing) to Borrower
of such determination and a summary of the basis for such determination.
(b) Upon the giving of the notice to Borrower referred to in
subsection (a) above, (i) Borrower's right to request and the Lender's
obligation to make Eurodollar Advances shall be immediately suspended, and the
Lender shall make all Advances requested as Base Rate Advances, and (ii) if the
affected Eurodollar Advance or Advances are then outstanding, Borrower shall
immediately, or if permitted by applicable law, no later than the date permitted
thereby, upon at least one Business Day's written notice to the Lender convert
each such Advance into an Advance or Advances of a different Type with an
Interest Period ending on the date on which the Interest Period applicable to
the affected Eurodollar Advances expires.
Section 3.10 Increased Costs.
(a) If, by reason of (x) after the date hereof, the
introduction of or any change (including, without limitation, any change by way
of imposition or increase of reserve requirements) in or in the interpretation
of any law or regulation, or (y) the compliance with any guideline or request
from any central bank or other governmental authority or quasi
20
governmental authority exercising control over banks or financial institutions
generally (whether or not having the force of law):
(i) the Lender (or its applicable Lending Office) shall be
subject to any tax, duty or other charge with respect to its
Eurodollar Advances or its obligation to make Eurodollar Advances, or
the basis of taxation of payments to the Lender of the principal of or
interest on its Eurodollar Advances or its obligation to make
Eurodollar Advances shall have changed (except for changes in the tax
on the overall net income of the Lender or its applicable Lending
Office imposed by the jurisdiction in which the Lender's principal
executive office or applicable Lending Office is located); or
(ii) any reserve (including, without limitation, any imposed
by the Board of Governors of the Federal Reserve System), special
deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by, the Lender's Lending Office
shall be imposed or deemed applicable or any other condition affecting
its Eurodollar Advances or its obligation to make Eurodollar Advances
shall be imposed on the Lender or its applicable Lending Office or the
London interbank market;
and as a result thereof there shall be any increase in the cost to the Lender of
agreeing to make or making, funding or maintaining Eurodollar Advances (except
to the extent already included in the determination of the applicable Adjusted
LIBO Rate for Eurodollar Advances), or there shall be a reduction in the amount
received or receivable by the Lender or its applicable Lending Office, then
Borrower shall from time to time (subject, in the case of certain Taxes, to the
applicable provisions of Section 3.07(b)), upon written notice from and demand
by the Lender on Borrower, pay to the Lender within five Business Days after the
date of such notice and demand, additional amounts sufficient to indemnify the
Lender against such increased cost. A certificate as to the amount of such
increased cost, submitted to Borrower by the Lender in good faith and
accompanied by a statement prepared by the Lender describing in reasonable
detail the basis for and calculation of such increased cost, shall, except for
manifest error, be final, conclusive and binding for all purposes.
(b) If the Lender shall advise Borrower that at any time,
because of the circumstances described in clauses (x) or (y) in Section 3.10 (a)
or any other circumstances beyond the Lender's reasonable control arising after
the date of this Agreement affecting the Lender or the London interbank market
or the Lender's position in such market, the Adjusted LIBO Rate, as determined
by the Lender, will not adequately and fairly reflect the cost to the Lender of
funding its Eurodollar Advances, then, and in any such event:
(i) the Lender shall forthwith give notice (by telephone
confirmed in writing) to Borrower of such advice;
(ii) Borrower's right to request and the Lender's obligation
to make or permit portions of the Term Credit Loans to remain
outstanding past the last day of the then current Interest Periods as
Eurodollar Advances shall be immediately suspended; and
21
(iii) the Lender shall make a Term Credit Loan as part of the
requested Borrowing of Eurodollar Advances as a Base Rate Advance,
which such Base Rate Advance shall, for all other purposes, be
considered part of such Borrowing.
Section 3.11 Lending Office. The Lender agrees that, if
requested by Borrower, it will use reasonable efforts (subject to overall policy
considerations of the Lender) to designate an alternate Lending Office with
respect to any of its Eurodollar Advances affected by the matters or
circumstances described in Sections 3.07(b), 3.08, 3.09 or 3.10 to reduce the
liability of Borrower or avoid the results provided thereunder, so long as such
designation is not disadvantageous to the Lender as determined by the Lender,
which determination if made in good faith, shall be conclusive and binding on
all parties hereto. Nothing in this Section 3.11 shall affect or postpone any of
the obligations of Borrower provided hereunder.
Section 3.12 Funding Losses. Borrower shall compensate the
Lender, upon its written request to Borrower (which request shall set forth the
basis for requesting such amounts in reasonable detail and which request shall
be made in good faith and, absent manifest error, shall be final, conclusive and
binding upon all of the parties hereto), for all losses, expenses and
liabilities (including, without limitation, any interest paid by the Lender to
lenders of funds borrowed by it to make or carry its Eurodollar Advances, in
either case to the extent not recovered by the Lender in connection with the
re-employment of such funds and including loss of anticipated profits), which
the Lender may sustain: (i) if for any reason (other than a default by the
Lender) a borrowing of, or conversion to or continuation of Eurodollar Advances
to Borrower does not occur on the date specified therefor in a Notice of
Borrowing or Notice of Continuation/Conversion (whether or not withdrawn), (ii)
if any repayment (including mandatory prepayments and any conversions pursuant
to Section 3.09(b)) of any Eurodollar Advances to Borrower occurs on a date
which is not the last day of an Interest Period applicable thereto, or (iii),
if, for any reason, Borrower defaults in its obligation to repay its Eurodollar
Advances when required by the terms of this Agreement.
Section 3.13 Assumptions Concerning Funding of Eurodollar
Advances. Calculation of all amounts payable to the Lender under this Article
III shall be made as though that Lender had actually funded its relevant
Eurodollar Advances through the purchase of deposits in the relevant market
bearing interest at the rate applicable to such Eurodollar Advances in an amount
equal to the amount of the Eurodollar Advances and having a maturity comparable
to the relevant Interest Period and through the transfer of such Eurodollar
Advances from an offshore office of the Lender to a domestic office of the
Lender in the United States of America; provided, however, that the Lender may
fund each of its Eurodollar Advances in any manner it sees fit and the foregoing
assumption shall be used only for calculation of amounts payable under this
Article III.
Section 3.14 Capital Adequacy. Without limiting any other
provision of this Agreement, in the event that the Lender shall have determined
that any law, treaty, governmental (or quasi-governmental) rule, regulation,
guideline or order regarding capital adequacy not currently in effect or fully
applicable as of the Closing Date, or any change therein or in the
interpretation or application thereof after the Closing Date, or compliance by
the Lender with any request or directive regarding capital adequacy not
currently in effect or fully applicable as of the
22
Closing Date (whether or not having the force of law and whether or not failure
to comply therewith would be unlawful) from a central bank or governmental
authority or body having jurisdiction, does or shall have the effect of reducing
the rate of return on the Lender's capital as a consequence of its obligations
hereunder to a level below that which the Lender could have achieved but for
such law, treaty, rule, regulation, guideline or order, or such change or
compliance by an amount reasonably deemed by the Lender to be material, then
within ten (10) Business Days after written notice and demand by the Lender,
Borrower shall from time to time pay to the Lender additional amounts sufficient
to compensate the Lender for such reduction (but, in the case of outstanding
Base Rate Advances, without duplication of any amounts already recovered by the
Lender by reason of an adjustment in the applicable Base Rate). Each certificate
as to the amount payable under this Section 3.14 (which certificate shall set
forth the basis for requesting such amounts in reasonable detail), submitted to
Borrower by the Lender in good faith, shall, absent manifest error, be final,
conclusive and binding for all purposes.
Section 3.15 Limitation on Certain Payment Obligations.
(a) The Lender shall make written demand on Borrower for
indemnification or compensation pursuant to Section 3.07 no later than 90 days
after the earlier of (i) the date on which the Lender makes payment of such
Taxes, and (ii) the date on which the relevant taxing authority or other
governmental authority makes written demand upon the Lender for payment of such
Taxes.
(b) The Lender shall make written demand on Borrower for
indemnification or compensation pursuant to Sections 3.12 and 3.13 no later than
90 days after the event giving rise to the claim for indemnification or
compensation occurs.
(c) The Lender shall make written demand on Borrower for
indemnification or compensation pursuant to Sections 3.10 and 3.14 no later than
90 days after the Lender receives actual notice or obtains actual knowledge of
the promulgation of a law, rule, order or interpretation or occurrence of
another event giving rise to a claim pursuant to such sections.
(d) In the event that the Lender fails to give Borrower notice
within the time limitations prescribed in (a) or (b) above, Borrower shall not
have any obligation to pay such claim for compensation or indemnification. In
the event that the Lender fails to give Borrower notice within the time
limitation prescribed in (c) above, Borrower shall not have any obligation to
pay any amount with respect to claims accruing prior to the ninetieth day
preceding such written demand.
ARTICLE IV
CONDITIONS TO BORROWINGS
The obligations of the Lender to make Advances to Borrower
hereunder is subject to the satisfaction of the following conditions:
23
Section 4.01 Conditions Precedent to Initial Term Credit Loan.
At the time of the making of the initial Term Credit Loan hereunder on the
Closing Date, all obligations of Borrower hereunder incurred prior to the
initial Term Credit Loan (including, without limitation, Borrower's obligations
to reimburse the reasonable fees and expenses of counsel to the Lender and any
fees and expenses payable to the Lender as previously agreed with Borrower),
shall have been paid in full, and the Lender shall have received the following,
in form and substance reasonably satisfactory in all respects to the Lender:
(a) the duly executed counterparts of this Agreement;
(b) the duly completed Term Credit Note;
(c) the duly executed Guaranty Agreement;
(d) certificate of Borrower in substantially the form of
Exhibit C attached hereto and appropriately completed;
(e) [reserved];
(f) certificates of the Secretary or Assistant Secretary of
each of the Credit Parties attaching and certifying copies of the resolutions of
the boards of directors of the Credit Parties, applicable the execution,
delivery and performance of the Credit Documents;
(g) certificates of the Secretary or an Assistant Secretary of
each of the Credit Parties certifying (i) the name, title and true signature of
each officer of such entities executing the Credit Documents, (ii) the bylaws or
comparable governing documents of such entities; and (iii) the certificate or
articles of incorporation of each Credit Party;
(h) certificates of good standing or existence, as may be
available from the Secretary of State of the jurisdiction of incorporation or
organization of such Credit Party;
(i) copies of all documents and instruments, including all
consents, authorizations and filings, required or advisable under any
Requirement of Law or by any material Contractual Obligation of the Credit
Parties, in connection with the execution, delivery, performance, validity and
enforceability of the Credit Documents and the other documents to be executed
and delivered hereunder, and such consents, authorizations, filings and orders
shall be in full force and effect and all applicable waiting periods shall have
expired;
(j) certified copies of the Intercompany Loan Documents, to
the extent that they exist and have not previously been certified to the Lender;
(k) duly executed solvency certificates of Borrower, Parent,
and each of the other Guarantors, in form and substance satisfactory to the
Lender;
(l) acknowledgment from CSC Network Corporation System, Inc.
as to its appointment as agent for service of process for the various Credit
Parties;
24
(m) certified copies of indentures, credit agreements, leases,
capital leases, instruments, and other documents evidencing or securing
Indebtedness of any Consolidated Company described on Schedule 7.01(b), in any
single case in an amount not less than $500,000 and to the extent not previously
certified to the Lender;
(n) certificates, reports and other information as the Lender
may reasonably request from any Consolidated Company in order to satisfy itself
as to the absence of any material liabilities or obligations arising from
matters relating to employees of the Consolidated Companies, including employee
relations, collective bargaining agreements, Plans, and other compensation and
employee benefit plans;
(o) certificates, reports, environmental audits and
investigations, and other information as the Lender may reasonably request from
any Consolidated Company in order to satisfy itself as to the absence of any
material liabilities or obligations arising from environmental and employee
health and safety exposures to which the Consolidated Companies may be subject,
and the plans of the Consolidated Companies with respect thereto;
(p) certificates, reports and other information as the Lender
may reasonably request from any Consolidated Company in order to satisfy itself
as to the absence of any material liabilities or obligations arising from
litigation (including without limitation, products liability and patent
infringement claims) pending or threatened against the Consolidated Companies;
(q) a certificate of insurance summarizing, in form and detail
reasonably acceptable to the Lender, of the types and amounts of insurance
(property and liability) maintained by the Consolidated Companies;
(r) the favorable opinion of counsel to the Credit Parties
addressed to the Lender;
(s) financial statements of Parent and its Subsidiaries,
audited on a consolidated basis for the fiscal year ended on January 25, 2002
and unaudited on a consolidated basis for the fiscal quarter ended on January
25, 2002; and
(t) arrangements satisfactory to the Lender in its sole
discretion that the Existing Synthetic Lease and any related financing
agreements and collateral instruments are being terminated and released, that
any interest, fees, principal, rents, and other amounts owing under the Existing
Synthetic Lease and related financing agreements through the Closing Date will
be paid in full from the initial Term Credit Loan, that any collateral
instruments affecting any real and personal property subject to the Existing
Synthetic Leases have been released, and that any such real and personal
property has been conveyed to one or more of the Credit Parties, in each case
together with evidence satisfactory to the Lender that arrangements have been
made for any appropriate recording of such terminations, releases and
conveyances, and payment of any filing and recording fees, costs, and expenses,
including any transfer taxes and other amounts payable in respect thereof
25
In addition to the foregoing, the following conditions shall have been satisfied
or shall exist, all to the satisfaction of the Lender, as of the time the
initial Term Credit Loan is made hereunder:
(x) the Term Credit Loan to be made on the Closing Date and
the use of proceeds thereof shall not contravene, violate or conflict
with, or involve the Lender in a violation of, any law, rule,
injunction, or regulation, or determination of any court of law or
other governmental authority;
(y) all corporate proceedings and all other legal matters in
connection with the authorization, legality, validity and
enforceability of the Credit Documents shall be reasonably satisfactory
in form and substance to the Lender; and
(z) the status of all pending and threatened litigation
(including products liability and patent claims) which might result in
a Materially Adverse Effect, including a description of any damages
sought and the claims constituting the basis therefor, shall have been
reported in writing to the Lender and the Lender shall be satisfied
with such status.
Section 4.02 Conditions to All Term Credit Loans. At the time
of the making of each Term Credit Loan (before as well as after giving effect to
such Term Credit Loans and to the proposed use of the proceeds thereof), the
following conditions shall have been satisfied or shall exist:
(a) there shall exist no Default or Event of Default;
(b) all representations and warranties by Borrower or Parent
contained herein shall be true and correct in all material respects with the
same effect as though such representations and warranties had been made on and
as of the date of such Term Credit Loan;
(c) since the date of the most recent financial statements of
the Consolidated Companies described in Section 5.03, there shall have been no
change which has had or could reasonably be expected to have a Materially
Adverse Effect.
(d) there shall be no action or proceeding instituted or
pending before any court or other governmental authority or, to the knowledge of
Borrower or Parent, threatened (i) which reasonably could be expected to have a
Materially Adverse Effect, or (ii) seeking to prohibit or restrict one or more
Credit Party's ownership or operation of any portion of its business or assets,
or to compel one or more Credit Party to dispose of or hold separate all or any
portion of its businesses or assets, where such portion or portions of such
business(es)or assets, as the case may be, constitute a material portion of the
total businesses or assets of the Consolidated Companies;
(e) the Term Credit Loan to be made and the use of proceeds
thereof shall not contravene, violate or conflict with, or involve the Lender in
a violation of, any law, rule, injunction, or regulation, or determination of
any court of law or other governmental authority applicable to Borrower or
Parent; and
26
(f) the Lender shall have received such other documents or
legal opinions as the Lender may reasonably request, all in form and substance
reasonably satisfactory to the Lender.
Each request for a Borrowing and the acceptance by Borrower of the proceeds
thereof shall constitute a representation and warranty by Borrower and Parent,
as of the date of the Term Credit Loans comprising such Borrowing, that the
applicable conditions specified in Sections 4.01 and 4.02 have been satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Each of Borrower and Parent represents, warrants and covenants
to Lender that:
Section 5.01 Organization and Qualification. Borrower is a
corporation duly organized and existing in good standing under the laws of the
State of Delaware. Parent is a corporation duly organized and existing in good
standing under the laws of the State of Florida. Each other Subsidiary of Parent
is a corporation duly organized and existing under the laws of the jurisdiction
of its incorporation. Borrower, Parent and each of Parent's other Subsidiaries
are duly qualified to do business as a foreign corporation and are in good
standing in each jurisdiction in which the character of their properties or the
nature of their business makes such qualification necessary, except for such
jurisdictions in which a failure to qualify to do business would not have a
Materially Adverse Effect. Borrower, Parent and each of Parent's other
Subsidiaries have the corporate power to own their respective properties and to
carry on their respective businesses as now being conducted. The jurisdiction of
incorporation or organization, and the ownership of all issued and outstanding
capital stock, for each Subsidiary of Parent as of the date of this Agreement is
accurately described on Schedule 5.01. Schedule 5.01 also designates the
Material Subsidiaries as of the Closing Date.
Section 5.02 Corporate Authority. The execution and delivery
by Borrower, Parent and the other Guarantors of and the performance by Borrower,
Parent and the other Guarantors of their obligations under the Credit Documents
have been duly authorized by all requisite corporate action and all requisite
shareholder action, if any, on the part of Borrower, Parent and the other
Guarantors and do not and will not (i) violate any provision of any law, rule or
regulation, any judgment, order or ruling of any court or governmental agency,
the organizational papers or bylaws of Borrower, Parent or the other Guarantors,
or any indenture, agreement or other instrument to which Borrower, Parent or the
other Guarantors are a party or by which Borrower, Parent or the other
Guarantors or any of their properties is bound, or (ii) be in conflict with,
result in a breach of, or constitute with notice or lapse of time or both a
default under any such indenture, agreement or other instrument.
Section 5.03 Financial Statements. Parent has furnished the
Lender with the following financial statements: (i) consolidated balance sheets
and consolidated statements of income, stockholders' equity and cash flow of
Parent for the fiscal year ended on January 25, 2002, audited by
PriceWaterhouseCoopers LLP and (ii) unaudited consolidated balance sheets
27
and consolidated statements of income, stockholders' equity and cash flow of
Parent for the fiscal quarter ending on January 25, 2002. Such financial
statements (including any related schedules and notes) are true and correct in
all material respects (subject, as to interim statements, to changes resulting
from audits and year end adjustments), have been prepared in accordance with
GAAP consistently applied throughout the period or periods in question and show,
in the case of audited statements, all liabilities, direct or contingent, of
Parent and its Subsidiaries, required to be shown in accordance with GAAP
consistently applied throughout the period or periods in question and fairly
present the consolidated financial position and the consolidated results of
operations of Parent and its Subsidiaries for the periods indicated therein.
There has been no material adverse change in the business, condition or
operations, financial or otherwise, of Parent and its Subsidiaries since January
25, 2002.
Section 5.04 Tax Returns. Each of Borrower, Parent and
Parent's other Subsidiaries has filed all federal, state and other income tax
returns which, to the best knowledge of the executive officers of Borrower,
Parent and Parent's other Subsidiaries, are required to be filed, and each has
paid all taxes as shown on said returns and on all assessments received by it to
the extent that such taxes have become due or except such as are being contested
in good faith by appropriate proceedings for which adequate reserves have been
established in accordance with GAAP.
Section 5.05 Actions Pending. There is no action, suit,
investigation or proceeding pending or, to the knowledge of either Borrower or
Parent, threatened against or affecting Borrower, Parent or any of Parent's
other Subsidiaries or any of their properties or rights, by or before any court,
arbitrator or administrative or governmental body, which might result in any
Materially Adverse Effect.
Section 5.06 Representations; No Defaults. At the time of each
Extension of Credit there shall exist no Default or Event of Default, and each
Extension of Credit shall be deemed a renewal by Borrower and Parent of the
representations and warranties contained in this Agreement and an affirmative
statement by Borrower and Parent that such representations and warranties are
true and correct on and as of such time with the same effect as though such
representations and warranties had been made on and as of such time.
Section 5.07 Title to Properties. Each of Borrower, Parent and
Parent's other Subsidiaries has (i) good and marketable fee simple title to its
respective real properties (other than real properties which it leases from
others), including such real properties reflected in the consolidated balance
sheet of Parent and Parent's Subsidiaries as of January 25, 2002, hereinabove
described (other than real properties disposed of in the ordinary course of
business), subject to no Lien of any kind except Liens permitted by Section 7.02
and (ii) good title to all of its other respective properties and assets (other
than properties and assets which it leases from others), including the other
properties and assets reflected in the consolidated balance sheet of Parent and
its Subsidiaries at January 25, 2002, hereinabove described (other than
properties and assets disposed of in the ordinary course of business), subject
to no Lien of any kind except Liens permitted by Section 7.02. Each of Borrower,
Parent and Parent's other Subsidiaries enjoys peaceful and undisturbed
possession under all leases necessary in any material respect for the operation
of its respective properties and assets, none of which contains any unusual or
28
burdensome provisions which might materially affect or impair the operation of
such properties and assets, and all such leases are valid and subsisting and in
full force and effect.
Section 5.08 Enforceability of Agreement. This Agreement is
the legal, valid and binding agreement of Borrower and Parent enforceable
against Borrower and Parent, in accordance with its terms, and the Term Credit
Note, and all other Credit Documents, when executed and delivered, will be
similarly legal, valid, binding and enforceable, except as the enforceability of
the Term Credit Note and other Credit Documents may be limited by bankruptcy,
insolvency, reorganization, moratorium and other laws affecting creditors'
rights and remedies in general and by general principles of equity, whether
considered in a proceeding at law or in equity.
Section 5.09 No Consent. No consent, permission,
authorization, order or license of any governmental authority or Person is
necessary in connection with the execution, delivery, performance or enforcement
of the Credit Documents, or in order to constitute the indebtedness to be
incurred hereunder and under the Term Credit Note and the other Credit Documents
as "Senior Debt" or any similar term defined within the documents evidencing any
Subordinated Debt.
Section 5.10 Use of Proceeds; Federal Reserve Regulations. The
proceeds of the Term Credit Note will be used solely for the purposes specified
in Section 2.01(c) and none of such proceeds will be used, directly or
indirectly, for the purpose of purchasing or carrying any "margin security" or
"margin stock" or for the purpose of reducing or retiring any indebtedness that
originally was incurred to purchase or carry a "margin security" or "margin
stock" or for any other purpose that might constitute this transaction a
"purpose credit" within the meaning of the regulations of the Board of Governors
of the Federal Reserve System.
Section 5.11 ERISA.
(a) Identification of Certain Plans. Schedule 5.11 hereto sets
forth all Plans of Borrower, Parent and Parent's other Subsidiaries;
(b) Compliance. Each Plan is being maintained, by its terms
and in operation, in accordance with all applicable laws, except such
noncompliances (when taken as a whole) that will not have a Materially Adverse
Effect;
(c) Liabilities. Neither Borrower, nor Parent nor any
Subsidiary of Parent is currently or will become subject to any liability
(including withdrawal liability), tax or penalty whatsoever to any person
whomsoever with respect to any Plan including, but not limited to, any tax,
penalty or liability arising under Title I or Title IV of ERISA or Chapter 43 of
the Tax Code, except such liabilities (when taken as a whole) as will not have a
Materially Adverse Effect; and
(d) Funding. Borrower, Parent and each ERISA Affiliate of
Borrower or Parent, as the case may be, has made full and timely payment of all
amounts (i) required to be contributed under the terms of each Plan and
applicable law and (ii) required to be paid as expenses of each Plan, except
where such non-payment would not have a Materially Adverse
29
Effect. No Plan has an "amount of unfunded benefit liabilities" (as defined in
Section 4001(a)(18) of ERISA) except as disclosed on Schedule 5.11. No Plan is
subject to a waiver or extension of the minimum funding requirements under ERISA
or the Tax Code, and no request for such waiver or extension is pending.
Section 5.12 Subsidiaries. All the outstanding shares of stock of
each such Subsidiary of Parent have been validly issued and are fully paid and
nonassessable and all such outstanding shares, except as noted on such Schedule
5.01, are owned by Parent or a Wholly Owned Subsidiary of Parent free of any
Lien or claim.
Section 5.13 Outstanding Indebtedness. As of the date of closing
and after giving effect to the transactions contemplated by this Agreement,
neither Borrower, nor Parent nor any of Parent's other Subsidiaries has
outstanding any Indebtedness except as permitted by Section 7.01 and there
exists no default under the provisions of any instrument evidencing such
Indebtedness or of any agreement relating thereto.
Section 5.14 Conflicting Agreements. Neither Borrower, nor
Parent, nor any of Parent's other Subsidiaries is a party to any contract or
agreement or other burdensome restrictions or subject to any charter or other
corporate restriction which materially and adversely affects its business,
property or assets, or financial condition. Assuming the consummation of the
transactions contemplated by this Agreement, neither the execution or delivery
of this Agreement or the Credit Documents, nor fulfillment of or compliance with
the terms and provisions hereof and thereof, will conflict with, or result in a
breach of the terms, conditions or provisions of, or constitute a default under,
or result in any violation of, or result in the creation of any Lien upon any of
the properties or assets of Borrower, Parent or any of Parent's other
Subsidiaries pursuant to, the charter or By-Laws of Borrower, Parent or any of
Parent's other Subsidiaries, any award of any arbitrator or any agreement
(including any agreement with stockholders), instrument, order, judgment,
decree, statute, law, rule or regulation to which Borrower, Parent or any of
Parent's other Subsidiaries is subject, and neither Borrower, nor Parent, nor
any of Parent's other Subsidiaries is a party to, or otherwise subject to any
provision contained in, any instrument evidencing Indebtedness of Borrower,
Parent or any of Parent's other Subsidiaries, any agreement relating thereto or
any other contract or agreement (including its charter) which limits the amount
of, or otherwise imposes restrictions on the incurring of, Indebtedness of the
type to be evidenced by the Term Credit Note or contains dividend or redemption
limitations on Common Stock of Borrower or Parent, or any of Parent's other
Subsidiaries, except for this Agreement, the 1999 Revolving Credit Agreement,
the 1999 Line of Credit Agreement, Borrower's Articles of Incorporation,
Parent's Articles of Incorporation and those matters listed on Schedule 5.14
attached hereto.
Section 5.15 Pollution and Other Regulations.
(a) Each of Borrower, Parent and Parent's other Subsidiaries has
complied in all material respects with all applicable Environmental Laws,
including without limitation, compliance with permits, licenses, standards,
schedules and timetables, and is not in violation of, and does not presently
have outstanding any liability under, has not been notified that it is or may be
liable under and does not have knowledge of any liability or potential liability
(including any
30
liability relating to matters set forth on Schedule 5.15(a)) except as set forth
on Schedule 5.15(a), under any applicable Environmental Law, including without
limitation, the Resource Conservation and Recovery Act of 1976, as amended
("RCRA"), the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of
1986 ("CERCLA"), the Federal Water Pollution Control Act, as amended ("FWPCA"),
the Federal Clean Air Act, as amended ("FCAA"), and the Toxic Substance Control
Act ("TSCA"), which violation, liability or potential liability could reasonably
be expected to have a Materially Adverse Effect.
(b) Neither Borrower, nor Parent, nor any of Parent's other
Subsidiaries has received a written request for information under CERCLA, any
other Environmental Laws or any comparable state law, or any public health or
safety or welfare law or written notice that any such entity has been identified
as a potential responsible party under CERCLA, and other Environmental Laws, or
any comparable state law, or any public health or safety or welfare law, nor has
any such entity received any written notification that any Hazardous Substance
that it or any of its respective predecessors in interest has generated, stored,
treated, handled, transported, or disposed of, has been released or is
threatened to be released at any site at which any Person intends to conduct or
is conducting a remedial investigation or other action pursuant to any
applicable Environmental Law, or any other Environmental Laws.
(c) Each of Borrower, Parent and Parent's other Subsidiaries has
obtained all permits, licenses or other authorizations required for the conduct
of their respective operations under all applicable Environmental Laws and each
such authorization is in full force and effect.
(d) Each of Borrower, Parent and Parent's other Subsidiaries
complies in all material respects with all laws and regulations relating to
equal employment opportunity and employee safety in all jurisdictions in which
it is presently doing business, and each of Borrower and Parent will use its
best efforts to comply, and to cause each of Parent's other Subsidiaries to
comply, with all such laws and regulations which may be legally imposed in the
future in jurisdictions in which Borrower, Parent or any of Parent's other
Subsidiaries may then be doing business.
Section 5.16 Possession of Franchises, Licenses, Etc. Each of
Borrower, Parent and Parent's other Subsidiaries possesses all franchises,
certificates, licenses, permits and other authorizations from governmental
political subdivisions or regulatory authorities, free from burdensome
restrictions, that are necessary in any material respect for the ownership,
maintenance and operation of its properties and assets, and neither Borrower,
nor Parent, nor any of Parent's other Subsidiaries is in violation of any
thereof in any material respect.
Section 5.17 Patents, Etc. Each of Borrower, Parent and Parent's
other Subsidiaries owns or has the right to use all patents, trademarks, service
marks, trade names, copyrights, licenses and other rights, free from burdensome
restrictions, which are necessary for the operation of its business as presently
conducted. Nothing has come to the attention of Borrower, Parent or any of
Parent's other Subsidiaries or any of their respective directors and officers to
the effect that (i) any product, process, method, substance, part or other
material presently contemplated to be sold by or employed by Borrower, Parent or
any of Parent's other
31
Subsidiaries in connection with its business may infringe any patent, trademark,
service ▇▇▇▇, trade name, copyright, license or other right owned by any other
Person, (ii) there is pending or threatened any claim or litigation against or
affecting Borrower, Parent or any of Parent's other Subsidiaries contesting its
right to sell or use any such product, process, method, substance, part or other
material or (iii) there is, or there is pending or proposed, any patent,
invention, device, application or principle or any statute, law, rule,
regulation, standard or code which would prevent, inhibit or render obsolete the
production or sale of any products of, or substantially reduce the projected
revenues of, or otherwise materially adversely affect the business, condition or
operations of, Borrower, Parent or any of Parent's other Subsidiaries.
Section 5.18 Governmental Consent. Neither the nature of
Borrower, Parent or any of Parent's other Subsidiaries nor any of their
respective businesses or properties, nor any relationship between Borrower,
Parent and any other Person, nor any circumstance in connection with the
execution and delivery of the Credit Documents and the consummation of the
transactions contemplated thereby is such as to require on behalf of Borrower,
Parent or any of Parent's other Subsidiaries any consent, approval or other
action by or any notice to or filing with any court or administrative or
governmental body in connection with the execution and delivery of this
Agreement and the Credit Documents.
Section 5.19 Disclosure. Neither this Agreement nor the Credit
Documents nor any other document, certificate or written statement furnished to
the Lender by or on behalf of Borrower or Parent in connection herewith contains
any untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements contained herein or therein not
misleading. There is no fact peculiar to Borrower or Parent which materially
adversely affects or in the future may (so far as Borrower or Parent can now
foresee) materially adversely affect the business, property or assets, financial
condition or prospects of Borrower or Parent which has not been set forth in
this Agreement or in the Credit Documents, certificates and written statements
furnished to the Lender by or on behalf of Borrower or Parent prior to the date
hereof in connection with the transactions contemplated hereby.
Section 5.20 Insurance Coverage. Each property of Borrower,
Parent or any of Parent's other Subsidiaries is insured within terms acceptable
to the Lender for the benefit of Borrower, Parent or another Subsidiary of
Parent in amounts deemed adequate by both Borrower's and Parent's management and
no less than those amounts customary in the industry in which Borrower, Parent
and Parent's other Subsidiaries operate against risks usually insured against by
Persons operating businesses similar to those of Borrower, Parent or Parent's
other Subsidiaries in the localities where such properties are located.
Section 5.21 Labor Matters. Borrower, Parent and Parent's other
Subsidiaries have experienced no strikes, labor disputes, slow downs or work
stoppages due to labor disagreements which have had, or would reasonably be
expected to have, a Materially Adverse Effect, and, to the best knowledge of
either Borrower's or Parent's respective Executive Officers, there are no such
strikes, disputes, slow downs or work stoppages threatened against Borrower,
Parent or any of Parent's other Subsidiaries. The hours worked and payment made
to employees of Borrower, Parent and Parent's other Subsidiaries have not been
in violation in any material respect of the Fair Labor Standards Act or any
other applicable law dealing with such matters.
32
All payments due from Borrower, Parent and Parent's other Subsidiaries, or for
which any claim may be made against the Consolidated Companies, on account of
wages and employee health and welfare insurance and other benefits have been
paid or accrued as liabilities on the books of Borrower, Parent and Parent's
other Subsidiaries where the failure to pay or accrue such liabilities would
reasonably be expected to have a Materially Adverse Effect.
Section 5.22 Intercompany Loans; Dividends. The Intercompany
Loans and the Intercompany Loan Documents, to the extent that they exist, have
been duly authorized and approved by all necessary corporate and shareholder
action on the part of the parties thereto, and constitute the legal, valid and
binding obligations of the parties thereto, enforceable against each of them in
accordance with their respective terms, except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting
creditors' rights generally, and by general principles of equity. There are no
restrictions on the power of any Consolidated Company to repay any Intercompany
Loan or to pay dividends on the capital stock. Intercompany Loans as of the
Closing Date are described in Schedule 5.22.
Section 5.23 Burdensome Restrictions. None of the Consolidated
Companies is a party to or bound by any Contractual Obligation or Requirement of
Law which has had or would reasonably be expected to have a Materially Adverse
Effect.
Section 5.24 Investment Company Act, Etc. None of the
Consolidated Companies is an "investment company" or a company "controlled" by
an "investment company" (as each of the quoted terms is defined or used in the
Investment Company Act of 1940, as amended). None of the Consolidated Companies
is subject to regulation under the Public Utility Holding Company Act of 1935,
the Federal Power Act, or any foreign, federal or local statute or regulation
limiting its ability to incur indebtedness for money borrowed, guarantee such
indebtedness, or pledge its assets to secure such indebtedness, as contemplated
hereby or by any other Credit Document.
Section 5.25 Notice of Non-Compliance with Laws. Neither
Borrower, nor Parent, nor any of Parent's other Subsidiaries has received notice
of any violation of Law, statute, order, rule, regulation, or judgment entered
by any court that may reasonably be expected to have a Materially Adverse
Effect.
ARTICLE VI
AFFIRMATIVE COVENANTS
Each of Borrower and Parent covenants and agrees that so long as
Borrower may borrow under this Agreement or so long as any indebtedness remains
outstanding under the Term Credit Note that it will:
Section 6.01 Corporate Existence, Etc. Preserve and maintain, and
cause each of its Material Subsidiaries to preserve and maintain, its corporate
existence, its material rights, franchises, and licenses, and its material
patents and copyrights (for the scheduled duration thereof), trademarks, trade
names, and service marks, necessary or desirable in the normal
33
conduct of its business, and its qualification to do business as a foreign
corporation in all jurisdictions where it conducts business or other activities
making such qualification necessary, where the failure to do so would reasonably
be expected to have a Materially Adverse Effect.
Section 6.02 Compliance with Laws Etc. Comply, and cause each of
its Subsidiaries to comply with all Requirements of Law (including, without
limitation, the Environmental Laws, subject to the exception set forth in
Section 6.07(f) where the penalties, claims, fines, and other liabilities
resulting from noncompliance with such Environmental Laws do not involve amounts
in excess of $10,000,000 in the aggregate) and Contractual Obligations
applicable to or binding on any of them where the failure to comply with such
Requirements of Law and Contractual Obligations would reasonably be expected to
have a Materially Adverse Effect.
Section 6.03 Payment of Taxes and Claims, Etc. Pay, and cause
each of its Subsidiaries to pay, (i) all taxes, assessments and governmental
charges imposed upon it or upon its property, and (ii) all claims (including,
without limitation, claims for labor, materials, supplies or services) which
might, if unpaid, become a Lien upon its property, unless, in each case, the
validity or amount thereof is being contested in good faith by appropriate
proceedings and adequate reserves are maintained with respect thereto.
Section 6.04 Keeping of Books. Keep, and cause each of its
Subsidiaries to keep, proper books of record and account, containing complete
and accurate entries of all their respective financial and business
transactions.
Section 6.05 Visitation, Inspection, Etc. Permit, and cause each
of its Subsidiaries to permit, any representative of the Lender to visit and
inspect any of its property, to examine its books and records and to make copies
and take extracts therefrom, and to discuss its affairs, finances and accounts
with its officers, all at such reasonable times and as often as the Lender may
reasonably request after reasonable prior notice to Borrower or Parent, as the
case may be; provided, however, that at any time following the occurrence and
during the continuance of a Default or an Event of Default, no prior notice to
either Borrower or Parent shall be required.
Section 6.06 Insurance; Maintenance of Properties.
(a) Maintain or cause to be maintained with financially sound
and reputable insurers, insurance with respect to its properties and business,
and the properties and business of its Subsidiaries, against loss or damage of
the kinds customarily insured against by reputable companies in the same or
similar businesses, such insurance to be of such types and in such amounts,
including such self-insurance and deductible provisions, as is customary for
such companies under similar circumstances; provided, however, that in any event
each of Borrower and Parent shall use its best efforts to maintain, or cause to
be maintained, insurance in amounts and with coverages not materially less
favorable to any Consolidated Company as in effect on the date of this
Agreement, except where the costs of maintaining such insurance would, in the
judgment of both Borrower and the Lender, be excessive.
34
(b) Cause, and cause each of the Consolidated Companies to
ensure that, all properties used or useful in the conduct of its business to be
maintained and kept in good condition, repair and working order and supplied
with all necessary equipment and will cause to be made all necessary repairs,
renewals, replacements, settlements and improvements thereof, all as in the
judgment of Borrower may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
provided, however, that nothing in this Section shall prevent Borrower from
discontinuing the operation or maintenance of any such properties if such
discontinuance is, in the judgment of Borrower, desirable in the conduct of its
business or the business of any Consolidated Company.
Section 6.07 Reporting Covenants. Furnish or cause to be
furnished to the Lender:
(a) Annual Financial Statements. As soon as available and in any
event within 95 days after the end of each fiscal year of Parent, balance sheets
of the Consolidated Companies as at the end of such year, presented on a
consolidated basis, and the related statements of income, shareholders' equity,
and cash flows of the Consolidated Companies for such fiscal year, presented on
a consolidated basis, setting forth in each case in comparative form the figures
for the previous fiscal year, all in reasonable detail and accompanied by a
report thereon of independent public accountants of recognized national standing
reasonably acceptable to the Lender, which such report shall be unqualified as
to going concern and scope of audit and shall state that such financial
statements present fairly in all material respects the financial condition as at
the end of such fiscal year on a consolidated basis, and the results of
operations and statements of cash flows of the Consolidated Companies for such
fiscal year in accordance with GAAP and that the examination by such accountants
in connection with such consolidated financial statements has been made in
accordance with generally accepted auditing standards;
(b) Quarterly Financial Statements. As soon as available and in
any event within 60 days after the end of each fiscal quarter of Parent (other
than the fourth fiscal quarter), balance sheets of the Consolidated Companies as
at the end of such quarter presented on a consolidated basis and the related
statements of income, shareholders' equity, and cash flows of the Consolidated
Companies for such fiscal quarter and for the portion of Parent's fiscal year
ended at the end of such quarter, presented on a consolidated basis setting
forth in each case in comparative form the figures for the corresponding quarter
and the corresponding portion of Parent's previous fiscal year, all in
reasonable detail and certified by the chief financial officer or principal
accounting officer of Parent that such financial statements fairly present in
all material respects the financial condition of the Consolidated Companies as
at the end of such fiscal quarter on a consolidated basis, and the results of
operations and statements of cash flows of the Consolidated Companies for such
fiscal quarter and such portion of Parent's fiscal year, in accordance with GAAP
consistently applied (subject to normal year-end audit adjustments and the
absence of certain footnotes);
(c) No Default/Compliance Certificate. Together with the
financial statements required pursuant to subsections (a) and (b) above, a
certificate of the president, chief financial officer or principal accounting
officer of Parent (the "Compliance Certificate") (i) to the effect that, based
upon a review of the activities of the Consolidated Companies and such
35
financial statements during the period covered thereby, there exists no Event of
Default and no Default under this Agreement, or if there exists an Event of
Default or a Default hereunder, specifying the nature thereof and the proposed
response thereto, and (ii) demonstrating in reasonable detail compliance as at
the end of such fiscal year or such fiscal quarter with Section 6.08 and
Sections 7.01 through 7.04;
(d) Notice of Default. Promptly after any Executive Officer of
Borrower or Parent has notice or knowledge of the occurrence of an Event of
Default or a Default, a certificate of the chief financial officer or principal
accounting officer of Borrower or Parent specifying the nature thereof and the
proposed response thereto;
(e) Litigation. Promptly after (i) the occurrence thereof,
notice of the institution of or any adverse development in any action, suit or
proceeding or any governmental investigation or any arbitration, before any
court or arbitrator or any governmental or administrative body, agency or
official, against any Consolidated Company, or any material property thereof
which might have a Materially Adverse Effect, or (ii) actual knowledge thereof,
notice of the threat of any such action, suit, proceeding, investigation or
arbitration;
(f) Environmental Notices. Promptly after receipt thereof,
notice of any actual or alleged violation, or notice of any action, claim or
request for information, either judicial or administrative, from any
governmental authority relating to any actual or alleged claim, notice of
potential responsibility under or violation of any Environmental Law, or any
actual or alleged spill, leak, disposal or other release of any waste, petroleum
product, or hazardous waste or Hazardous Substance by any Consolidated Company
which could result in penalties, fines, claims or other liabilities to any
Consolidated Company in amounts in excess of $5,000,000 individually or in the
aggregate;
(g) ERISA.
(i) Promptly after the occurrence thereof with respect to any
Plan of any Consolidated Company or any ERISA Affiliate thereof, or
any trust established thereunder, notice of (x) a "reportable event"
described in Section 4043 of ERISA and the regulations issued from
time to time thereunder (other than a "reportable event" not subject
to the provisions for 30-day notice to the PBGC under such
regulations), or (y) any other event which could subject any
Consolidated Company to any tax, penalty or liability under Title I or
Title IV of ERISA or Chapter 43 of the Tax Code, or any tax or penalty
resulting from a loss of deduction under Sections 162, 404 or 419 of
the Tax Code, where any such taxes, penalties or liabilities exceed or
could exceed $1,000,000 in the aggregate;
(ii) Promptly after such notice must be provided to the PBGC, or
to a Plan participant, beneficiary or alternative payee, any notice
required under Section 101(d), 302(f)(4), 303, 307, 4041(b)(1)(A) or
4041(c)(1)(A) of ERISA or under Section 401(a)(29) or 412 of the Tax
Code with respect to any Plan of any Consolidated Company or any ERISA
Affiliate thereof;
36
(iii) Promptly after receipt, any notice received by any
Consolidated Company or any ERISA Affiliate thereof concerning the
intent of the PBGC or any other governmental authority to terminate a
Plan of such Company or ERISA Affiliate thereof which is subject to
Title IV of ERISA, to impose any liability on such Company or ERISA
Affiliate under Title IV of ERISA or Chapter 43 of the Tax Code;
(iv) Upon the request of the Lender, promptly upon the filing
thereof with the Internal Revenue Service ("IRS") or the Department of
Labor ("DOL"), a copy of IRS Form 5500 or annual report for each Plan
of any Consolidated Company or ERISA Affiliate thereof which is
subject to Title IV of ERISA;
(v) Upon the request of the Lender, (A) true and complete
copies of any and all documents, government reports and IRS
determination or opinion letters or rulings for any Plan of any
Consolidated Company from the IRS, PBGC or DOL, (B) any reports filed
with the IRS, PBGC or DOL with respect to a Plan of the Consolidated
Companies or any ERISA Affiliate thereof, or (C) a current statement
of withdrawal liability for each Multiemployer Plan of any
Consolidated Company or any ERISA Affiliate thereof;
(h) Liens. Promptly upon any Consolidated Company becoming
aware thereof, notice of the filing of any federal statutory Lien, tax or other
state or local government Lien or any other Lien affecting their respective
properties, other than those Liens expressly permitted by Section 7.02;
(i) Public Filings Etc. Promptly upon the filing thereof or
otherwise becoming available, copies of all financial statements, annual,
quarterly and special reports, proxy statements and notices sent or made
available generally by Parent to its public security holders, of all regular and
periodic reports and all registration statements and prospectuses (other than
registration statements filed on Form S-3 of the Securities and Exchange
Commission regarding the issuance of restricted stock in acquisitions), if any,
filed by any of them with any securities exchange, and of all press releases and
other statements made available generally to the public containing material
developments in the business or financial condition of Borrower, Parent and the
other Consolidated Companies;
(j) Accountants' Reports. Promptly upon receipt thereof, copies
of all financial statements of, and all reports submitted by, independent public
accountants to Parent in connection with each annual, interim, or special audit
of Parent's consolidated financial statements;
(k) Burdensome Restrictions Etc. Promptly upon the existence or
occurrence thereof, notice of the existence or occurrence of (i) any Contractual
Obligation or Requirement of Law described in Section 5.23, (ii) failure of any
Consolidated Company to hold in full force and effect those material trademarks,
service marks, patents, trade names, copyrights, licenses and similar rights
necessary in the normal conduct of its business, and (iii) any strike, labor
dispute, slow down or work stoppage as described in Section 5.21;
37
(l) New Material Subsidiaries. Simultaneously with the delivery
of each Compliance Certificate, a written list of all Material Subsidiaries
formed, acquired, or created from a transfer of assets or through any other
event, during the period commencing on the Closing Date and ending on the date
on which the first Compliance Certificate is delivered, and thereafter since the
date of the most recently delivered Compliance Certificate; such written list
shall include the name of each new Material Subsidiary, its state of
incorporation, list of its officers and any other information that the Lender
shall reasonably request.
(m) Intercompany Asset Transfers. Promptly upon the occurrence
thereof, notice of the transfer of any assets from Borrower, Parent or any other
Guarantor to any other Consolidated Company that is not Borrower or a Guarantor
(in any transaction or series of related transactions), excluding sales or other
transfers of assets in the ordinary course of business, where the Asset Value of
such assets is greater than $5,000,000 per transfer; and
(n) Other Information. With reasonable promptness, such other
information about the Consolidated Companies as the Lender may reasonably
request from time to time.
Section 6.08 Financial Covenants.
(a) Fixed Charge Coverage Ratio. Maintain as of the last day of
each fiscal quarter, a Fixed Charge Coverage Ratio of greater than 1.50:1.00.
(b) Leverage Ratio. Maintain as of the last day of each fiscal
quarter, a Leverage Ratio of less than or equal to 0.60:1.00.
(c) Minimum Net Worth. Maintain a Consolidated Net Worth of not
less than (i) $3 65,000,000 plus (ii) 50% of Consolidated Net Income (but not
Consolidated Net Loss) for each fiscal quarter ended after January 30, 1998 and
on or prior to the date of determination.
(d) Dividends. Not declare or pay any dividend on its capital
stock, or make any payment to purchase, redeem, retire or acquire any of its
Subordinated Debt or capital stock or any option, warrant, or other right to
acquire such Subordinated Debt or capital stock, other than:
(i) dividends payable by Parent solely in shares of capital
stock;
(ii) any payments made for the repurchase of outstanding capital
stock previously issued by Parent in an aggregate amount at any time
not to exceed $60,000,000; and
(iii) cash dividends declared and paid, and all other such
payments made, by Parent after January 29, 1993, in an aggregate
amount at any time not to exceed (x) $1,000,000, plus (y) 50% of
Consolidated Net Income (or minus 100% of Consolidated Net Loss)
earned during Borrower's fiscal year ended January 29, 1993, and
thereafter (such period to be treated as one accounting period);
provided, further, however, no such dividend or other payment may be
declared or paid pursuant to clause (ii) or (iii) above
38
unless no Default or Event of Default exists at the time of such
declaration or payment, or would exist as a result of such declaration
or payment.
provided, further, however, no such dividend or other payment may be declared or
paid pursuant to clause (ii) above unless no Default or Event of Default exists
at the time of such declaration or payment, or would exist as a result of such
declaration or payment.
Section 6.09 Notices Under Certain Other Indebtedness.
Immediately upon its receipt thereof, Borrower and Parent shall furnish the
Lender a copy of any notice received by either of them or any other Consolidated
Company from the holder(s) of Indebtedness referred to in Section 7.01 (or from
any trustee, agent, attorney, or other party acting on behalf of such holder(s))
in an amount which, in the aggregate, exceeds $5,000,000, where such notice
states or claims (i) the existence or occurrence of any default or event of
default with respect to such Indebtedness under the terms of any indenture, loan
or credit agreement, debenture, note, or other document evidencing or governing
such Indebtedness, or (ii) the existence or occurrence of any event or condition
which requires or permits holder(s) of any Indebtedness to exercise rights under
any Change in Control Provision. Borrower and Parent agree to take such actions
as may be necessary to require the holder(s) of any Indebtedness (or any trustee
or agent acting on their behalf) incurred pursuant to documents executed or
amended and restated after the Closing Date, to furnish copies of all such
notices directly to the Lender simultaneously with the furnishing thereof to
Borrower and/or Parent, as the case may be, and that such requirement may not be
altered or rescinded without the prior written consent of the Lender.
Section 6.10 Additional Guarantors. Parent shall cause each new
Material Subsidiary reported to the Lender pursuant to Section 6.07(l) above to
execute and deliver to the Lender, simultaneously with the report given pursuant
to Section 6.07(l) above, a supplement to the Guaranty Agreement, together with
related documents of the kind described in Section 4.01, as appropriate, all in
form and substance satisfactory to the Lender.
Section 6.11 Financial Statements; Fiscal Year. Parent shall make
no change in the dates of the fiscal year now employed for accounting and
reporting purposes without the prior written consent of the Lender, which
consent shall not be unreasonably withheld.
Section 6.12 Ownership of Guarantors. Each of Borrower and Parent
shall maintain its percentage of ownership existing as of the date hereof of all
Guarantors, and shall not decrease its ownership percentage in each Person which
becomes a Guarantor after the date hereof, as such ownership exists at the time
such Person becomes a Guarantor.
ARTICLE VII
NEGATIVE COVENANTS
So long as any Term Credit Commitment remains in effect hereunder
or the Term Credit Note shall remain unpaid, neither Borrower nor Parent will
and neither Borrower nor Parent will permit any Subsidiary to:
39
Section 7.01 Indebtedness. Create, incur, assume or suffer to
exist any Indebtedness, other than:
(a) Indebtedness under this Agreement, the 1999 Revolving Credit
Agreement, and the 1999 Line of Credit Agreement;
(b) Indebtedness outstanding on the date hereof or pursuant to
lines of credit in effect on the date hereof and described on Schedule 7.01 (b);
(c) purchase money Indebtedness to the extent secured by a Lien
permitted by Section 7.02(b) provided such purchase money Indebtedness does not
exceed $20,000,000;
(d) unsecured current liabilities (other than liabilities for
borrowed money or liabilities evidenced by promissory notes, bonds or similar
instruments) incurred in the ordinary course of business and either (i) not more
than 30 days past due, or (ii) being disputed in good faith by appropriate
proceedings with reserves for such disputed liability maintained in conformity
with GAAP;
(e) any Intercompany Loans; provided, however, that the
aggregate principal amount of all Intercompany Loans made to any Consolidated
Companies that are not Guarantors shall not exceed $5,000,000 in the any one
time outstanding unless otherwise agreed in writing by the Lender;
(f) other Subordinated Debt in form and substance acceptable to
the Lender, and evidenced by its written consent thereto;
(g) other Indebtedness not to exceed $75,000,000 at any one time
outstanding;
(h) Indebtedness consisting of (x) Series A Senior Notes dated
on or about December 21, 2000 due November 30, 2003, with an average life of
three years in the aggregate amount of $19,000,000 with an interest rate of
8.27%; (y) Series B Senior Notes dated on or about December 21, 2000 due
November 30, 2005, with an average life of three years in the aggregate amount
of $28,000,000 with an interest rate of 8.27%; and (z) Series C Senior Notes
dated on or about December 21, 2000 due November 30, 2007, with an average life
of five years in the aggregate amount of $103,000,000 with an interest rate of
8.42%; and
(i) Indebtedness incurred in connection with financing the
construction of Parent's new branch located in Miami, Florida; provided that the
aggregate principal amount of Indebtedness incurred in connection with the Miami
branch does not exceed $15,000,000.
Section 7.02 Liens. Subject to the final sentence of this Section
7.02, create, incur, assume or suffer to exist any Lien on any of its property
now owned or hereafter acquired to secure any Indebtedness, other than:
(a) Liens existing on the date hereof disclosed on Schedule
7.02;
40
(b) any Lien on any property securing Indebtedness incurred or
assumed for the purpose of financing all or any part of the acquisition cost of
such property and any refinancing thereof, provided that such Lien does not
extend to any other property, and provided further that the aggregate principal
amount of Indebtedness secured by all such Liens at any time does not exceed
$20,000,000;
(c) Liens for taxes not yet due, and Liens for taxes or Liens
imposed by ERISA which are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves are being maintained;
(d) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other Liens imposed by law created in
the ordinary course of business for amounts not yet due or which are being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves are being maintained;
(e) Liens incurred or deposits made 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, surety and appeal bonds, bids, leases, government
contracts, performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money); and
(f) any Lien on any property securing Indebtedness described
in Section 7.01(i), incurred for the purpose of financing all or any part of the
construction cost of such property and any refinancing thereof; provided that
such Lien does not extend to any other property; and
(g) Liens (other than those permitted by paragraphs (a)
through (f) of this Section 7.02) encumbering assets having an Asset Value not
greater than $20,000,000 in the aggregate at any one time.
This Section 7.02 shall have no force or effect until the occurrence of one of
the following events, whichever is first to occur: (x) each of the 1999
Revolving Credit Agreement and 1999 Line of Credit Agreement expires or is
terminated, or (y) the provisions of Section 7.10 of each of the 1999 Revolving
Credit Agreement and 1999 Line of Credit Agreement shall be modified or waived
so as to permit this Section 7.02 to become effective without conflict
therewith; and in either such case, this Section 7.02 shall automatically become
effective without need of further action hereunder by Borrower, Parent, or the
Lender.
Section 7.03 Mergers, Acquisitions, Sales, Etc. Merge or
consolidate with any other Person, other than with Parent or Borrower, or
another Guarantor, or sell, lease, or otherwise dispose of its accounts,
property or other assets (including capital stock of Subsidiaries), or purchase,
lease or otherwise acquire all or any substantial portion of the property or
assets (including capital stock) of any Person; provided, however, that the
foregoing restrictions on asset sales shall not be applicable to (i) sales of
equipment or other personal property being replaced by other equipment or other
personal property purchased as a capital expenditure item, (ii) sales of
accounts receivable pursuant to a securitization program, provided
41
further that any program costs incurred by Parent in pursuing such a program
shall be considered interest under this Credit Agreement, (iii) other asset
sales (including the stock of Subsidiaries) where, on the date of execution of a
binding obligation to make such asset sale (provided that if the asset sale is
not consummated within six (6) months of such execution, then on the date of
consummation of such asset sale rather than on the date of execution of such
binding obligation), the Asset Value of asset sales occurring after the Closing
Date, taking into account the Asset Value of the proposed asset sale, would not
exceed ten percent (10%) of Parent's Consolidated Net Worth, since the Closing
Date, and (iv) sales of inventory in the ordinary course of business; provided,
further, that the foregoing restrictions on mergers shall not apply to mergers
involving Borrower or Parent and another entity, provided Borrower or Parent, as
the case may be, is the surviving entity, and mergers between another Subsidiary
of Parent and Parent or between other Subsidiaries of Parent provided that, in
either case, upon consummation of such mergers, Borrower and Parent are in
compliance with the other provisions hereof; provided, further, that the
foregoing restrictions on asset purchases shall not apply to asset purchases by
Parent to the extent that (i) after giving effect to such purchases, Parent is
in compliance with Section 7.04 hereof and (ii) the Board of Directors or other
governing body of such Person whose assets or stock is being purchased has
approved the terms of such acquisition; provided, however, that no transaction
pursuant to clauses (i), (ii) or (iii) or the second or third provisos above
shall be permitted if any Default or Event of Default otherwise exists at the
time of such transaction or would otherwise exist as a result of such
transaction.
Section 7.04 Investments, Loans, Etc. Make, permit or hold any
Investments in any Person, or otherwise acquire or hold any Subsidiaries, other
than:
(a) Investments in Subsidiaries that are Guarantors under this
Agreement, whether such Subsidiaries are Guarantors on the Closing Date or
become Guarantors in accordance with Section 6.10 after the Closing Date;
provided, however, nothing in this Section 7.04 shall be deemed to authorize an
investment pursuant to this subsection (a) in any entity that is not a
Subsidiary and a Guarantor prior to such investment;
(b) Investments in Subsidiaries, other than those Subsidiaries
that are or become Guarantors under this Agreement, or persons that thereafter
become Subsidiaries, in an aggregate amount not to exceed $25,000,000 unless
otherwise consented to in writing by the Lender;
(c) Investments in other Persons that are not, and do not
become, Subsidiaries in an aggregate amount not to exceed $25,000,000 unless
otherwise consented to in writing by the Lender;
(d) direct obligations of the United States of America or any
agency thereof, or obligations guaranteed by the United States of America or any
agency thereof, in each case supported by the full faith and credit of the
United States of America and maturing within one year from the date of creation
thereof;
(e) commercial paper maturing within one year from the date of
creation thereof rated in the highest grade by a nationally recognized credit
rating agency;
42
(f) time deposits maturing within one year from the date of
creation thereof with, including certificates of deposit issued by the Lender
and any office located in the United States of America of any bank or trust
company which is organized under the laws of the United States of America or any
state thereof and has total assets aggregating at least $500,000,000, including
without limitation, any such deposits in Eurodollars issued by a foreign branch
of any such bank or trust company;
(g) Investments made by Plans; and
(h) permitted Intercompany Loans on terms and conditions
acceptable to the Lender.
Section 7.05 Sale and Leaseback Transactions. Sell or transfer
any property, real or personal, whether now owned or hereafter acquired, and
thereafter rent or lease such property or other property which any Consolidated
Company intends to use for substantially the same purpose or purposes as the
property being sold or transferred, except to the extent that at the time any
such property is sold and leased back, and after giving effect thereto, the
aggregate amount paid (whether in cash or otherwise) for all such property sold
and leased back by the Consolidated Companies since January 26, 1999 does not
exceed five percent (5%) of the Consolidated Companies' total assets as reported
in the most recent audited annual financial statements delivered to the Lender
pursuant to Section 6.07(a).
Section 7.06 Transactions with Affiliates.
(a) Enter into any material transaction or series of related
transactions which in the aggregate would be material, whether or not in the
ordinary course of business, with any Affiliate of any Consolidated Company (but
excluding any Affiliate which is also a Consolidated Company), other than on
terms and conditions substantially as favorable to such Consolidated Company as
would be obtained by such Consolidated Company at the time in a comparable
arm's-length transaction with a Person other than an Affiliate.
(b) Subject to the final sentence of this Section 7.06(b),
convey or transfer to any other Person (including any other Consolidated
Company) any real property, buildings, or fixtures used in the manufacturing or
production operations of any Consolidated Company, or convey or transfer to any
other Consolidated Company any other assets (excluding conveyances or transfers
in the ordinary course of business) if at the time of such conveyance or
transfer any Default or Event of Default exists or would exist as a result of
such conveyance or transfer. This Section 7.06(b) shall have no force or effect
until the occurrence of one of the following events, whichever is first to
occur: (x) each of the 1999 Revolving Credit Agreement and 1999 Line of Credit
Agreement expires or is terminated, or (y) the provisions of Section 7.11 of
each of the 1999 Revolving Credit Agreement and 1999 Line of Credit Agreement
shall be modified or waived so as to permit this Section 7.06(b) to become
effective without conflict therewith; and in either such case, this Section
7.06(b) shall automatically become effective without need of further action
hereunder by Borrower or the Lender.
43
Section 7.07 Optional Prepayments. Directly or indirectly,
prepay, purchase, redeem, retire, defease or otherwise acquire, or make any
optional payment on account of any principal of, interest on, or premium payable
in connection with the optional prepayment, redemption or retirement of, any of
its Indebtedness, or give a notice of redemption with respect to any such
Indebtedness, or make any payment in violation of the subordination provisions
of any Subordinated Debt, except with respect to (i) the Obligations under this
Agreement and the Term Credit Note, (ii) prepayments of Indebtedness outstanding
pursuant to revolving credit, overdraft and term credit facilities permitted
pursuant to Section 7.01, (iii) Intercompany Loans made or outstanding pursuant
to Section 7.01, and (iv) Subordinated Debt, in form and substance acceptable to
the Lender, as evidenced by its written consent, issued to refinance existing
Subordinated Debt.
Section 7.08 Chances in Business. Enter into any business
which is substantially different from that presently conducted by the
Consolidated Companies taken as a whole except where the Investment made, and
other funds expended or committed with respect to such business, do not exceed
$5,000,000 in each new business.
Section 7.09 ERISA. Take or fail to take any action with
respect to any Plan of any Consolidated Company or, with respect to its ERISA
Affiliates, any Plans which are subject to Title IV of ERISA or to continuation
health care requirements for group health plans under the Tax Code, including
without limitation (i) establishing any such Plan, (ii) amending any such Plan
(except where required to comply with applicable law), (iii) terminating or
withdrawing from any such Plan, or (iv) incurring an amount of unfunded benefit
liabilities, as defined in Section 4001(a)(18) of ERISA, or any withdrawal
liability under Title IV of ERISA with respect to any such Plan, without first
obtaining the written approval of the Lender, where such actions or failures
could result in a Materially Adverse Effect.
Section 7.10 Additional Negative Pledge. Create or otherwise
cause or suffer to exist or become effective, directly or indirectly, any
prohibition or restriction on the creation or existence of any Lien upon any
asset of any Consolidated Company, other than pursuant to (i) the terms of any
agreement, instrument or other document pursuant to which any Indebtedness
permitted by Section 7.01(a) or (b) is incurred by any Consolidated Company, so
long as such prohibition or restriction applies only to the property or asset
being financed by such Indebtedness, and (ii) any requirement of applicable law
or any regulatory authority having jurisdiction over any of the Consolidated
Companies.
Section 7.11 Payment Restrictions Affecting Consolidated
Companies. Create or otherwise cause or suffer to exist or become effective, any
consensual encumbrance or restriction on the ability of any Consolidated Company
to (i) pay dividends or make any other distributions on such Consolidated
Company's stock, or (ii) pay any indebtedness owed to Borrower, Parent, or any
other Consolidated Company, or (iii) transfer any of its property or assets to
Borrower, Parent, or any other Consolidated Company, except any consensual
encumbrance or restriction existing under this Agreement, the 1999 Revolving
Credit Agreement, or 1999 Line of Credit Agreement.
44
Section 7.12 Actions Under Certain Documents. Without the
prior written consent of the Lender (which consent shall not be unreasonably
withheld), modify, amend, cancel or rescind any agreements or documents
evidencing or governing Subordinated Debt or the senior Indebtedness permitted
pursuant to Section 7.01 hereof, or make demand of payment or accept payment on
any Intercompany Loans permitted by Section 7.01, except that current interest
accrued thereon as of the date of this Agreement and all interest subsequently
accruing thereon (whether or not paid currently) may be paid unless a Default or
Event of Default has occurred and is continuing.
ARTICLE VIII
GUARANTY
Section 8.01 Parent Guaranty.
In consideration of the substantial direct and indirect
benefits to be derived by Parent as a result of the Lender making the Term
Credit Loans available to Borrower, Parent hereby absolutely, unconditionally
and irrevocably, guarantees to the Lender the due and punctual payment and
performance of the Term Credit Loans and all other Obligations of Borrower
(including interest accruing during the pendency of any bankruptcy, insolvency,
receivorship or other similar proceeding, regardless of whether allowed or
allowable in such proceeding) as and when the same shall become due and payable,
whether at maturity, by acceleration, mandatory prepayment or otherwise,
according to their terms (the obligations of Parent in respect of such
guarantee, the "Parent Guaranty Obligations"). In case of failure by Borrower
punctually to pay or perform the Term Credit Loans and all other Obligations,
Parent hereby unconditionally and irrevocably agrees to cause such payment or
performance to be made punctually as and when the same shall become due and
payable, whether at maturity, by prepayment, declaration or otherwise, and as if
such payment or performance were made by Borrower. The foregoing guarantee (the
"Parent Guaranty") shall be a guarantee of payment and not of collection merely.
Section 8.02 Guarantee Unconditional. The obligations of
Parent under this Article VIII shall be continuing, unconditional and absolute
and, without limiting the generality of the foregoing, shall not be released,
discharged or otherwise affected by:
(a) any extension, renewal, settlement, compromise, waiver or
release in respect of any obligation of Borrower under this Agreement,
the Term Credit Note or any other Credit Document, by operation of law
or otherwise;
(b) any modification or amendment of or supplement to this
Agreement, the Term Credit Note or any other Credit Document;
(c) any modification, amendment, waiver, release,
non-perfection or invalidity of any direct or indirect security, or of
any guaranty or other liability of any third party, for any obligation
of Borrower under this Agreement, the Term Credit Note or any other
Credit Document;
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(d) any change in the corporate existence, structure or
ownership of Borrower, or any insolvency, bankruptcy, reorganization
or other similar proceeding affecting Borrower, or any of its assets,
or any resulting release or discharge of any obligation contained in
this Agreement, the Term Credit Note or any other Credit Document;
(e) the existence of any claim, set off or other right which
Parent may have at any time against Borrower, the Lender or any other
person or entity, whether or not arising in connection with this
Agreement, the Term Credit Note or any other Credit Document;
(f) any invalidity or unenforceability relating to or against
Borrower for any reason of the whole or any provision of this
Agreement, the Term Credit Note or other Credit Document, or any
provision of Applicable Law purporting to prohibit the payment by
Borrower of any Obligation, or any other amount payable by it under
this Agreement, the Term Credit Note or any other Credit Document;
(g) any other act or omission to act or delay of any kind by
Borrower, the Lender or any other person or entity, or any other
circumstance whatsoever, that might constitute a legal or equitable
discharge of the obligations of Parent under this Article VIII; or
(h) any future changes in conditions, including any change of
law or any invalidity or irregularity with respect to the issuance of
the Credit Documents.
Section 8.03 Discharge Only Upon Payment in Full;
Reinstatement in Certain Circumstances. Parent's obligations under this Article
VIII shall remain in full force and effect until the Term Credit Loans and all
other amounts payable by Borrower under this Agreement, the Term Credit Note and
the other Credit Documents shall have been paid in full. If at any time any
payment of the Term Credit Loans or any other amount payable by Borrower under
this Agreement, the Term Credit Note or other Credit Documents is rescinded or
must otherwise be restored or returned upon the insolvency, bankruptcy or
reorganization of Borrower or otherwise, Parent's obligation under this Article
VIII with respect to such payment shall be reinstated at such time as though
such payment had become due but not been made at such time.
Section 8.04 Waiver. Parent irrevocably waives acceptance
hereof, presentment, demand, protest and any notice not provided for herein or
required by law, as well as any requirement that at any time any action be taken
or, if commenced, be pursued thereafter with diligence, by any person or entity
against Borrower or any other person or entity, or any collateral granted to
secure the Term Credit Loans or the Parent Guaranty Obligations. Parent further
waives any rights, defenses or claims of release or discharge from any of its
obligations under this Article VIII as a consequence of any actions taken or
failed to be taken by the Lender as set forth in Section 8.02 or otherwise.
Section 8.05 Waiver of Subrogation. Parent hereby waives, to
the fullest extent permitted by law, as against Borrower and its assets,
any and all rights, whether at law, in equity,
46
by agreement or otherwise, to subrogation, indemnity, reimbursement,
contribution, or any other similar claim, cause of action or remedy that
otherwise would arise out of Parent's payment or performance of the Parent
Guaranty Obligations until the first year anniversary of the date on which
all of the Obligations are paid in full. The preceding waiver is intended
by Parent and the Lender to be for the benefit of Borrower and any of its
successors or assigns as an absolute defense to any action by Parent
against Borrower or its assets that arises out of Parent's having made any
payment to the Lender with respect to any of the Obligations guaranteed
hereunder. Upon the bankruptcy of Borrower, Lender's rights hereunder shall
not be affected or impaired by its omission to prove all or any portion of
its claim, and the Lender may, in its discretion, value or refrain from
valuing any security held by it without in any way releasing, reducing or
otherwise affecting Parent's obligations hereunder.
Section 8.06 Stay of Acceleration. If acceleration of the time
for payment of any amount payable by Borrower under this Agreement is
stayed upon the insolvency, bankruptcy or reorganization of Borrower, all
such amounts otherwise subject to acceleration under the terms of this
Agreement shall nonetheless be immediately payable in full by Parent
hereunder.
ARTICLE IX
EVENTS OF DEFAULT
Upon the occurrence and during the continuance of any of the
following specified events (each an "Event of Default"):
Section 9.01 Payments. Borrower shall fail to make promptly
when due (including, without limitation, by mandatory prepayment) any
principal payment with respect to the Term Credit Loans, or Borrower shall
fail to make within five (5) Business Days after the due date thereof any
payment of interest, fee or other amount payable hereunder;
Section 9.02 Covenants Without Notice. Borrower or Parent
shall fail to observe or perform any covenant or agreement contained in
Sections 6.07, 6.08, 6.11, and Article VII;
Section 9.03 Other Covenants. Borrower or Parent shall fail to
observe or perform any covenant or agreement contained in this Agreement,
other than those referred to in Sections 9.01 and 9.02, and, if capable of
being remedied, such failure shall remain unremedied for 30 days after the
earlier of (i) Borrower's or Parent's obtaining knowledge thereof, or (ii)
written notice thereof shall have been given to Borrower or Parent by the
Lender
Section 9.04 Representations. Any representation or warranty
made or deemed to be made by Borrower, Parent, or any other Credit Party or
by any of its officers under this Agreement or any other Credit Document
(including the Schedules attached thereto), or any certificate or other
document submitted to the Lender by any such Person pursuant to the terms
of
47
this Agreement or any other Credit Document, shall be incorrect in any
material respect when made or deemed to be made or submitted;
Section 9.05 Non-Payments of Other Indebtedness. Any
Consolidated Company shall fail to make when due (whether at stated
maturity, by acceleration, on demand or otherwise, and after giving effect
to any applicable grace period) any payment of principal of or interest on
any Indebtedness (other than the Obligations) exceeding $5,000,000 in the
aggregate including, without limitation, Indebtedness outstanding under the
1999 Revolving Credit Agreement and 1999 Line of Credit Agreement;
Section 9.06 Defaults Under Other Agreements Any Consolidated
Company shall fail to observe or perform within any applicable grace period
any covenants or agreements contained in any agreements or instruments
relating to any of its Indebtedness exceeding $5,000,000 in the aggregate
including, without limitation, Indebtedness outstanding under the 1999
Revolving Credit Agreement and 1999 Line of Credit Agreement, or any other
event shall occur if the effect of such failure or other event is to
accelerate, or to permit the holder of such Indebtedness or any other
Person to accelerate, the maturity of such Indebtedness; or any such
Indebtedness shall be required to be prepaid (other than by a regularly
scheduled required prepayment) in whole or in part prior to its stated
maturity;
Section 9.07 Bankruptcy. Borrower, Parent or any other
Consolidated Company shall commence a voluntary case concerning itself
under the Bankruptcy Code or an involuntary case for bankruptcy is
commenced against any Consolidated Company and the petition is not
controverted within 10 days, or is not dismissed within 60 days, after
commencement of the case; or a custodian (as defined in the Bankruptcy
Code) is appointed for, or takes charge of, all or any substantial part of
the property of any Consolidated Company; or any Consolidated Company
commences proceedings of its own bankruptcy or to be granted a suspension
of payments or any other proceeding under any reorganization, arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or similar law of any jurisdiction, whether now or hereafter in
effect, relating to any Consolidated Company or there is commenced against
any Consolidated Company any such proceeding which remains undismissed for
a period of 60 days; or any Consolidated Company is adjudicated insolvent
or bankrupt; or any order of relief or other order approving any such case
or proceeding is entered; or any Consolidated Company suffers any
appointment of any custodian or the like for it or any substantial part of
its property to continue undischarged or unstayed for a period of 60 days;
or any Consolidated Company makes a general assignment for the benefit of
creditors; or any Consolidated Company shall fail to pay, or shall state
that it is unable to pay, or shall be unable to pay, its debts generally as
they become due; or any Consolidated Company shall call a meeting of its
creditors with a view to arranging a composition or adjustment of its
debts; or any Consolidated Company shall by any act or failure to act
indicate its consent to, approval of or acquiescence in any of the
foregoing; or any corporate action is taken by any Consolidated Company for
the purpose of effecting any of the foregoing;
Section 9.08 ERISA. A Plan of a Consolidated Company or a Plan
subject to Title IV of ERISA of any of its ERISA Affiliates:
48
(i) shall fail to be funded in accordance with the minimum
funding standard required by applicable law, the terms of such Plan,
Section 412 of the Tax Code or Section 302 of ERISA for any plan year
or a waiver of such standard is sought or granted with respect to such
Plan under applicable law, the terms of such Plan or Section 412 of
the Tax Code or Section 303 of ERISA; or
(ii) is being, or has been, terminated or the subject of
termination proceedings under applicable law or the terms of such
Plan; or
(iii) shall require a Consolidated Company to provide security
under applicable law, the terms of such Plan, Section 401 or 412 of
the Tax Code or Section 306 or 307 of ERISA; or
(iv) results in a liability to a Consolidated Company under
applicable law, the terms of such Plan, or Title IV of ERISA;
and there shall result from any such failure, waiver, termination or other
event a liability to the PBGC or a Plan that would have a Materially
Adverse Effect;
Section 9.09 Money Judgment. A judgment or order for the
payment of money in excess of $5,000,000 or otherwise having a Materially
Adverse Effect shall be rendered against Borrower, Parent, or any other
Consolidated Company and such judgment or order shall continue unsatisfied
in the case of a money judgment) and in effect for a period of 30 days
during which execution shall not be effectively stayed or deferred (whether
by action of a court, by agreement or otherwise);
Section 9.10 Ownership of Credit Parties. If Parent shall at
any time fail to own and control all the voting stock of Borrower or any
other Guarantor, either directly or indirectly through a Wholly Owned
Subsidiary of Parent;
Section 9.11 Change in Control of Borrower. (a) Any "person"
or "group" (within the meaning of Sections 13(d) and 14(d)(2) of the
Exchange Act), other than the ▇▇▇▇▇▇ Family, shall become the "beneficial
owner(s)" (as defined in said Rule 13d-3) of more than twenty-five percent
(25%) of the shares of the outstanding common stock of Parent entitled to
vote for members of Parent's board of directors, or (b) any event or
condition shall occur or exist which, pursuant to the terms of any change
in control provision, requires or permits the holder(s) of Indebtedness of
any Consolidated Company to require that such Indebtedness be redeemed,
repurchased, defeased, prepaid or repaid, in whole or in part, or the
maturity of such Indebtedness to be accelerated in any respect;
Section 9.12 Default Under Other Credit Documents. There shall
exist or occur any "Event of Default" as provided under the terms of any
other Credit Document, or any Credit Document ceases to be in full force
and effect or the validity or enforceability thereof is disaffirmed by or
on behalf of Borrower, Parent or any other Credit Party, or at any time it
is or becomes unlawful for Borrower, Parent or any other Credit Party to
perform or comply with its obligations under any Credit Document, or the
obligations of Borrower, Parent or any other
49
Credit Party under any Credit Document are not or cease to be legal, valid
and binding on Borrower, Parent or any such Credit Party, including,
without limitation, the Article VIII of this Agreement;
Section 9.13 Attachments. An attachment or similar action
shall be made on or taken against any of the assets of any Consolidated
Company with an Asset Value exceeding $5,000,000 in aggregate and is not
removed, suspended or enjoined within 60 days of the same being made or any
suspension or injunction being lifted;
then, and in any such event, and at any time thereafter if any Event of
Default shall then be continuing, the Lender may by written notice to
Borrower or Parent, take any or all of the following actions, without
prejudice to the rights of the Lender or the holder of any Term Credit Note
to enforce its claims against Borrower, Parent, or any other Credit Party:
(i) declare the Term Credit Commitment terminated, whereupon the Term
Credit Commitment of the Lender shall terminate immediately and all fees
shall forthwith become due and payable without any other notice of any
kind; and (ii) declare the principal of and any accrued interest on the
Term Credit Loans, and all other Obligations owing hereunder, to be,
whereupon the same shall become, forthwith due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by Borrower and Parent; provided, that, if an Event of
Default specified in Section 9.07 shall occur, the result which would occur
upon the giving of written notice by the Lender to any Credit Party, as
specified in clauses (i) and (ii) above, shall occur automatically without
the giving of any such notice.
ARTICLE X
MISCELLANEOUS
Section 10.01 Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including bank
wire, telex, telecopy or similar teletransmission or writing) and shall be
given to such party at its address or applicable teletransmission number
set forth on the signature pages hereof, or such other address or
applicable teletransmission number as such party may hereafter specify by
notice to the other party. Each such notice, request or other communication
shall be effective (i) if given by telex, when such telex is transmitted to
the telex number specified in this Section and the appropriate answerback
is received, (ii) if given by mail, 72 hours after such communication is
deposited in the mails with first class postage prepaid, addressed as
aforesaid, (iii) if given by telecopy, when such telecopy is transmitted to
the telecopy number specified in this Section and the appropriate
confirmation is received, or (iv) if given by any other means (including,
without limitation, by air courier), when delivered or received at the
address specified in this Section; provided that notices to the Lender
shall not be effective until received.
Section 10.02 Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the other Credit Documents, nor consent to
any departure by any Credit Party therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Lender, and
then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
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Section 10.03 No Waiver; Remedies Cumulative. No failure or
delay on the part of the Lender or any holder of the Term Credit Note in
exercising any right or remedy hereunder or under any other Credit Document, and
no course of dealing between any Credit Party and the Lender or the holder of
any Term Credit Note shall operate as a waiver thereof, nor shall any single or
partial exercise of any right or remedy hereunder or under any other Credit
Document preclude any other or further exercise thereof or the exercise of any
other right or remedy hereunder or thereunder. The rights and remedies herein
expressly provided are cumulative and not exclusive of any rights or remedies
which the Lender or the holder of any Term Credit Note would otherwise have. No
notice to or demand on any Credit Party not required hereunder or under any
other Credit Document in any case shall entitle any Credit Party to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of the Lender or the holder of any Term Credit Note to any
other or further action in any circumstances without notice or demand.
Section 10.04 Payment of Expenses Etc. Borrower shall:
(i) whether or not the transactions hereby contemplated are
consummated, pay all reasonable, out-of-pocket costs and expenses of
the Lender in the administration (both before and after the execution
hereof and including reasonable expenses actually incurred relating to
advice of counsel as to the rights and duties of the Lender with
respect thereto) of, and in connection with the preparation, execution
and delivery of, preservation of rights under, enforcement of, and,
after a Default or Event of Default, refinancing, renegotiation or
restructuring of, this Agreement and the other Credit Documents and
the documents and instruments referred to therein, and any amendment,
waiver or consent relating thereto (including, without limitation, the
reasonable fees actually incurred and disbursements of counsel for the
Lender);
(ii) subject, in the case of certain Taxes, to the applicable
provisions of Section 3.07(b), pay and hold the Lender harmless from
and against any and all present and future stamp, documentary, and
other similar Taxes with respect to this Agreement, the Term Credit
Note and any other Credit Documents, any collateral described therein,
or any payments due thereunder, and save the Lender harmless from and
against any and all liabilities with respect to or resulting from any
delay or omission to pay such Taxes; and
(iii) indemnify the Lender and each director, officer,
employee, affiliate and agent thereof (each, an "Indemnitee") from,
and hold each of them harmless against, and reimburse each Indemnitee,
upon its demand, for any losses, claims, damages, liabilities or other
expenses ("Losses") incurred by such Indemnitee insofar as such Losses
arise out of or are in any way related to or result from this
Agreement, the Term Credit Note or any other Credit Documents or the
financing provided hereby, including, without limitation, Losses
arising in connection with any legal proceeding relating to any of the
foregoing (whether or not such Indemnitee is a party thereto) and the
reasonable attorneys fees and expenses actually incurred in connection
therewith; provided, however, that the foregoing shall not apply to
any Losses resulting from the gross negligence or willful misconduct
of such Indemnitee.
51
(iv) without limiting the indemnities set forth in subsection
(iii) above, indemnify each Indemnitee for any and all expenses and costs
(including without limitation, remedial, removal, response, abatement,
cleanup, investigative, closure and monitoring costs), losses, claims
(including claims for contribution or indemnity and including the cost of
investigating or defending any claim and whether or not such claim is
ultimately defeated, and whether such claim arose before, during or alter
any Credit Party's ownership, operation, possession or control of its
business, property or facilities or before, on or after the date hereof,
and including also any amounts paid incidental to any compromise or
settlement by the Indemnitee or Indemnitees to the holders of any such
claim), lawsuits, liabilities, obligations, actions, judgments, suits,
disbursements, encumbrances, liens, damages (including without limitation
damages for contamination or destruction of natural resources), penalties
and fines of any kind or nature whatsoever (including without limitation in
all cases the reasonable fees actually incurred, other charges and
disbursements of counsel in connection therewith) incurred, suffered or
sustained by that Indemnitee based upon, arising under or relating to
Environmental Laws based on, arising out of or relating to in whole or in
part, the existence or exercise of any rights or remedies by any Indemnitee
under this Agreement, any other Credit Document or any related documents
(but excluding those incurred, suffered or sustained by any Indemnitee as a
result of any action taken by or on behalf of the Lender with respect to
any Subsidiary of Borrower or Parent (or the assets thereof) owned or
controlled by the Lender.
If and to the extent that the obligations of Borrower under this Section 10.04
are unenforceable for any reason, Borrower hereby agrees to make the maximum
contribution to the payment and satisfaction of such obligations which is
permissible under applicable law.
Section 10.05 Right of Setoff. In addition to and not in
limitation of all rights of offset that the Lender or other holder of the Term
Credit Note may have under applicable law, the Lender or other holder of the
Term Credit Note shall, upon the occurrence of any Event of Default and whether
or not the Lender or such holder has made any demand or any Credit Party's
obligations are matured, have the right to appropriate and apply to the payment
of any Credit Party's obligations hereunder and under the other Credit
Documents, all deposits of any Credit Party (general or special, time or demand,
provisional or final) then or thereafter held by and other indebtedness or
property then or thereafter owing by the Lender or other holder of the Term
Credit Note to any Credit Party, whether or not related to this Agreement or any
transaction hereunder. The Lender shall promptly notify Borrower of any offset
hereunder.
Section 10.06 Benefit of Agreement.
(a) This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and assigns of the
parties hereto, provided that Borrower may not assign or transfer any of its
interest hereunder without the prior written consent of the Lender.
(b) The Lender may make, carry or transfer Term Credit Loans at,
to or for the account of, any of its branch offices or the office of an
Affiliate of the Lender.
52
(c) The Lender may assign all or a portion of its interests,
rights and obligations under this Agreement (including all or a portion of any
of its Term Credit Commitment and the Term Credit Loans at the time owing to it
and the Term Credit Note held by it) to any Eligible Assignee; provided,
however, that, so long as no Event of Default has occurred and is continuing,
Borrower must give its prior written consent to such assignment (which consent
shall not be unreasonably withheld or delayed) unless such assignment is to an
Affiliate of the Lender. Borrower shall not be responsible for such processing
and recordation fee or any costs or expenses incurred by the Lender in
connection with such assignment. From and after the effective date specified in
each Assignment and Acceptance, which effective date shall be at least five (5)
Business Days after the execution thereof, the assignee thereunder shall be a
party hereto and to the extent of the interest assigned by such Assignment and
Acceptance, have the rights and obligations of the Lender under this Agreement.
Within five (5) Business Days after receipt of the notice and the Assignment and
Acceptance, Borrower, at its own expense, shall execute and deliver to the
Lender, in exchange for the surrendered Term Credit Note, a new Term Credit Note
or Term Credit Notes to the order of such assignee in a principal amount equal
to the applicable portion of the Term Credit Commitment or Term Credit Loans
assumed by it pursuant to such Assignment and Acceptance and new Term Credit
Note or Term Credit Notes to the assigning Lender in the amount of its retained
portion of the Term Credit Commitment or amount of its retained Term Credit
Loans. Such new Term Credit Note or Term Credit Notes shall be in an aggregate
principal amount equal to the aggregate principal amount of such surrendered
Term Credit Note, shall be dated the date of the surrendered Term Credit Note
which they replace, and shall otherwise be in substantially the form attached
hereto.
(d) The Lender may, without the consent of Borrower, sell
participations without restriction to one or more banks or other entities in all
or a portion of its rights and obligations under this Agreement (including all
or a portion of the Term Credit Loans owing to it and the Term Credit Note held
by it), provided, however, that (i) the Lender's obligations under this
Agreement shall remain unchanged, (ii) the Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) the participating bank or other entity shall not be entitled to the
benefit (except through its selling Lender) of the cost protection provisions
contained in Article II of this Agreement, and (iv) Borrower shall continue to
deal solely and directly with the Lender in connection with the Lender's rights
and obligations under this Agreement and the other Credit Documents, and the
Lender shall retain the sole right to enforce the obligations of Borrower
relating to the Term Credit Loans and to approve any amendment, modification or
waiver of any provisions of this Agreement. If the Lender sells a participation
hereunder it shall provide prompt written notice to Borrower of the name of such
participant.
(e) The Lender or participant may, in connection with the
assignment or participation or proposed assignment or participation, pursuant to
this Section, disclose to the assignee or participant or proposed assignee or
participant any information relating to Borrower or the other Consolidated
Companies furnished to the Lender by or on behalf of Borrower or any other
Consolidated Company. With respect to any disclosure of confidential,
non-public, proprietary information, such proposed assignee or participant shall
agree to use the information only for the purpose of making any necessary credit
judgments with respect to this credit facility and not to use the information in
any manner prohibited by any law, including without limitation,
53
the securities laws of the United States of America. The proposed participant or
assignee shall agree not to disclose any of such information except (i) to
directors, employees, auditors or counsel to whom it is necessary to show such
information, each of whom shall be informed of the confidential nature of the
information, (ii) in any statement or testimony pursuant to a subpoena or order
by any court, governmental body or other agency asserting jurisdiction over such
entity, or as otherwise required by law (provided prior notice is given to
Borrower and the Lender unless otherwise prohibited by the subpoena, order or
law), and (iii) upon the request or demand of any regulatory agency or authority
with proper jurisdiction. The proposed participant or assignee shall further
agree to return all documents or other written material and copies thereof
received from the Lender or Borrower relating to such confidential information
unless otherwise properly disposed of by such entity.
(f) The Lender may at any time assign all or any portion of
its rights in this Agreement and the Term Credit Note issued to it to a Federal
Reserve Bank; provided that no such assignment shall release the Lender from any
of its obligations hereunder.
Section 10.07 Governing Law; Submission to Jurisdiction.
(a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER AND UNDER THE TERM CREDIT NOTE SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW (WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAW PRINCIPLES THEREOF) OF THE STATE OF GEORGIA.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT, THE TERM CREDIT NOTE OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN
THE SUPERIOR COURT OF ▇▇▇▇▇▇ COUNTY, GEORGIA, OR ANY OTHER COURT OF THE STATE OF
GEORGIA OR OF THE UNITED STATES OF AMERICA FOR THE NORTHERN DISTRICT OF GEORGIA,
AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF BORROWER AND PARENT
HEREBY ACCEPT FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVE TRIAL BY JURY, AND BORROWER AND PARENT HEREBY
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION
TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN
SUCH RESPECTIVE JURISDICTIONS.
(c) EACH OF BORROWER AND PARENT HEREBY IRREVOCABLY DESIGNATES
THE CORPORATION SERVICE COMPANY, ATLANTA, GEORGIA, AS ITS DESIGNEE, APPOINTEE
AND LOCAL AGENT TO RECEIVE, FOR AND ON ITS BEHALF, SERVICE OF PROCESS IN SUCH
RESPECTIVE JURISDICTIONS IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR THE TERM CREDIT NOTE OR ANY DOCUMENT RELATED THERETO. IT IS
54
UNDERSTOOD THAT A COPY OF SUCH PROCESS SERVED ON SUCH LOCAL AGENT WILL BE
PROMPTLY FORWARDED BY SUCH LOCAL AGENT AND BY THE SERVER OF SUCH PROCESS BY MAIL
TO BORROWER AT ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE BELOW, BUT THE
FAILURE OF BORROWER OR PARENT TO RECEIVE SUCH COPY SHALL NOT AFFECT IN ANY WAY
THE SERVICE OF SUCH PROCESS. EACH OF BORROWER AND PARENT FURTHER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY
SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO BORROWER AND PARENT AT PARENT'S SAID
ADDRESS, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING.
(d) Nothing herein shall affect the right of the Lender irany
holder of the Term Credit Note to serve process in any other manner permitted by
law or to commence legal proceedings or otherwise proceed against Borrower or
Parent in any other jurisdiction.
Section 10.08 Counterparts. This Agreement may be executed in
any number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument.
Section 10.09 Effectiveness; Survival.
(a) This Agreement shall become effective on the date (the
"Effective Date") on which Lender shall have executed this Agreement and both
Borrower and Parent shall have executed a counterpart hereof (whether the same
or different counterparts) and shall have delivered the same to the Lender
pursuant to Section 10.01.
(b) The obligations of Borrower and Parent under Sections
3.07(b), 3.10, 3.12, 3.14 and 10.04 hereof shall survive for ninety (90) days
after the payment in full of the Term Credit Note after the Term Credit
Termination Date. All representations and warranties made herein, in the
certificates, reports, notices, and other documents delivered pursuant to this
Agreement shall survive the execution and delivery of this Agreement, the other
Credit Documents, and such other agreements and documents, the making of the
Term Credit Loans hereunder, and the execution and delivery of the Term Credit
Note.
Section 10.10 Severability. In case any provision in or
obligation under this Agreement or the other Credit Documents shall be invalid,
illegal or unenforceable, in whole or in part, in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
Section 10.11 Independence of Covenants. All covenants
hereunder shall be given independent effect so that if a particular action or
condition is not permitted by any of such covenants, the fact that it would be
permitted by an exception to, or be otherwise within the
55
limitation of, another covenant, shall not avoid the occurrence of a Default or
an Event of Default if such action is taken or condition exists.
Section 10.12 Change in Accounting Principles; Fiscal Year or
Tax Laws. If (i) any preparation of the financial statements referred to in
Section 6.07 hereafter occasioned by the promulgation of rules, regulations,
pronouncements and opinions by or required by the Financial Accounting Standards
Board or the American Institute of Certified Public Accounts (or successors
thereto or agencies with similar functions) (other than changes mandated by FASB
106) result in a material change in the method of calculation of financial
covenants, standards or terms found in this Agreement, (ii) there is any change
in Parent's fiscal quarter or fiscal year, or (iii) there is a material change
in federal tax laws which materially affects any of the Consolidated Companies'
ability to comply with the financial covenants, standards or terms found in this
Agreement, Borrower, Parent, and the Lender agree to enter into negotiations in
order to amend such provisions so as to equitably reflect such changes with the
desired result that the criteria for evaluating any of the Consolidated
Companies' financial condition shall be the same after such changes as if such
changes had not been made. Unless and until such provisions have been so
amended, the provisions of this Agreement shall govern.
Section 10.13 Headings Descriptive; Entire Agreement. The
headings of the several sections and subsections of this Agreement are inserted
for convenience only and shall not in any way affect the meaning or construction
of any provision of this Agreement. This Agreement, the other Credit Documents,
and the agreements and documents required to be delivered pursuant to the terms
of this Agreement constitute the entire agreement among the parties hereto and
thereto regarding the subject matters hereof and thereof and supersede all prior
agreements, representations and understandings related to such subject matters.
Section 10.14 Time is of the Essence. Time is of the essence in interpreting and
performing this Agreement and all other Credit Documents.
Section 10.15 Usury. It is the intent of the parties hereto
not to violate any federal or state law, rule or regulation pertaining either to
usury or to the contracting for or charging or collecting of interest, and
Borrower and the Lender agree that, should any provision of this Agreement or of
the Term Credit Note, or any act performed hereunder or thereunder, violate any
such law, rule or regulation, then the excess of interest contracted for or
charged or collected over the maximum lawful rate of interest shall be applied
to the outstanding principal indebtedness due to Lender by Borrower under this
Agreement.
Section 10.16 Construction. Should any provision of this
Agreement require judicial interpretation, the parties hereto agree that the
court interpreting or construing the same shall not apply a presumption that the
terms of this Agreement shall be more strictly construed against one party by
reason of the rule of construction that a document is to be more strictly
construed against the party who itself or through its agents prepared the same,
it being agreed that Borrower, the Lender and their respective agents have
participated in the preparation hereof.
Section 10.17 Waiver of Effect of Corporate Seal. Each of
Borrower and Parent represents and warrants that it is not required to affix its
corporate seal to this Agreement or any
56
other Credit Document pursuant to any Requirement of Law and waives any
shortening of the statute of limitations that may result from not affixing the
corporate seal to this Agreement or the other Credit Documents.
57
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered in Atlanta, Georgia, by their duly
authorized officers as of the day and year first above written.
Address for Notices: BORROWER:
▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ SUPPLY SHARED SERVICES, INC.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: J. ▇▇▇▇▇▇▇ ▇▇▇▇
By:________________________________
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Secretary
Address for Notices: PARENT:
▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ SUPPLY, INC.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: J. ▇▇▇▇▇▇▇ ▇▇▇▇ By:________________________________
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Secretary
Address for Notices: LENDER
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ SUNTRUST BANK
MC 2064
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
By: _______________________________
Telecopy No. 407/237-4076 Name:
Title:
Payment Office:
200 S. Orange Avenue
MC 2064
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
[SIGNATURE PAGE TO REAL ESTATE TERM CREDIT LOAN AGREEMENT]
TERM CREDIT NOTE
May 31, 2002
$25,000,000.00
Atlanta,
Georgia
FOR VALUE RECEIVED, the undersigned, ▇▇▇▇▇▇ SUPPLY SHARED SERVICES,
INC., a Delaware corporation (the "Borrower"), promises to pay to the order of
SUNTRUST BANK, a Georgia banking corporation (the "Lender"), at the office of
the Lender at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other
place as the Lender may designate by notice in writing to the Borrower, in
immediately available funds in lawful money of the United States of America, on
the sooner of (i) the Term Credit Termination Date, as set forth in that certain
Real Estate Term Credit Agreement, dated as of May __, 2002, between the
Borrower and the Lender (as hereafter amended, modified or supplemented, the
"Agreement"), or (ii) acceleration of this indebtedness as hereinafter provided,
the lesser of (x) the principal sum of TWENTY-FIVE MILLION AND NO/100 DOLLARS
($25,000,000.00), or (y) so much thereof as shall have been from time to time
disbursed hereunder in the sole discretion of the Lender in accordance with the
Agreement and not theretofore repaid, as shown on the books and records of the
Lender.
In addition to principal, the Borrower agrees to pay interest on the
principal amounts disbursed hereunder from time to time from the date of each
disbursement until paid at such simple rates of interest per annum and upon such
dates as provided for in the Agreement. Interest shall accrue on the outstanding
principal balance from the date hereof up to and through the date on which all
principal and interest hereunder is paid in full, and shall be computed on the
basis of the actual number of days elapsed in a 360-day year. Such interest is
to be paid to the Lender at the principal office specified above.
This Term Credit Note (this "Note") is the Term Credit Note referred to
in the Agreement, and evidences Term Credit Loans incurred pursuant to the terms
and conditions of the Agreement to which reference is hereby made for a full and
complete description of such terms and conditions. All capitalized terms used in
this Note and not defined herein shall have the same meanings as set forth in
the Agreement.
The Lender shall at all times have a right of set-off against any
deposit balances of the Borrower in the possession of the Lender, and the Lender
may apply the same against payment of this Note or any other indebtedness of the
Borrower to the Lender. The payment of any indebtedness evidenced by this Note
prior to the Term Credit Termination Date or demand shall not affect the
enforceability of this Note as to any future, different or other indebtedness
incurred hereunder by the Borrower. In the event the indebtedness evidenced by
this Note is collected by legal action or through an attorney-at-law, the Lender
shall be entitled to recover from the Bor-
1
rower all costs of collection, including, without limitation, reasonable
attorneys' fees if collected by or through an attorney-at-law.
The Borrower acknowledges that the actual crediting of the amount of
any disbursement under the Agreement to an account of the Borrower or recording
such amount in the books of the Lender shall, in the absence of manifest error,
constitute presumptive evidence of such disbursement and that such advance was
made and borrowed under the Agreement. Such account records shall constitute, in
the absence of manifest error, presumptive evidence of principal amounts
outstanding and the payments made under the Agreement at any time and from time
to time, provided that the failure of the Lender to record in its books or in
such account the type or amount of any advance shall not affect the obligation
of the undersigned to repay such amount together with interest thereon in
accordance with this Note and the Agreement.
Upon the existence or occurrence of any Event of Default as defined in
the Agreement, the principal and all accrued interest hereof shall automatically
become, or may be declared, due and payable in the manner and with the effect
provided in the Agreement.
Prepayment of this Note in part or in whole is permitted subject to the
conditions set forth in Section 3.06 of the Agreement.
Failure or forbearance of the Lender to exercise any right hereunder,
or otherwise granted by the Agreement or by law, shall not affect or release the
liability of the Borrower hereunder, and shall not constitute a waiver of such
right unless so stated by the Lender in writing. THIS NOTE SHALL BE DEEMED TO BE
MADE UNDER, AND SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY, THE LAWS
OF THE STATE OF GEORGIA. Time is of the essence of this Note.
PRESENTMENT FOR PAYMENT, NOTICE OF DISHONOR AND PROTEST ARE HEREBY
WAIVED.
2
Executed under hand of the Borrower as of the day and year first above
written.
▇▇▇▇▇▇ SUPPLY SHARED SERVICES, INC.
By: _______________________________
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Secretary
[SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT]
ACKNOWLEDGMENT
STATE OF GEORGIA
COUNTY OF ▇▇▇▇▇▇
I, ____________________, a Notary Public in and for said county in said
state hereby certify that ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, as Secretary of ▇▇▇▇▇▇ Supply
Shared Services, Inc., a Delaware corporation, is signed to the foregoing
conveyance and who is known to me, acknowledged before me on this day that,
being informed of the contents of the conveyance, he, in his capacity as such
Secretary of ▇▇▇▇▇▇ Supply Shared Services, Inc., executed the same voluntarily
on this date.
GIVEN UNDER MY HAND this ____ day of May, 2002.
______________________________
Notary Public
My Commission Expires:
______________________ _______________________________
Witness
[NOTARIAL SEAL]
1
SUBSIDIARY GUARANTY AGREEMENT
(Term Credit Agreement)
THIS SUBSIDIARY GUARANTY AGREEMENT (this "Guaranty"), dated as
of May 31, 2002, made by each of the Material Subsidiaries of ▇▇▇▇▇▇ Supply,
Inc., a Florida corporation ("▇▇▇▇▇▇"), listed on the signature pages hereof,
together with all other Material Subsidiaries of ▇▇▇▇▇▇ that hereafter become
parties hereto (individually, a "Guarantor" and collectively, the "Guarantors"),
in favor of SUNTRUST BANK, a Georgia banking corporation (the "Lender"; the
Lender and each other assignee, if any, of all or any portion of the Term Credit
Commitment and/or Term Credit Loans under the Term Credit Agreement described
below being collectively referred to herein as the "Guaranteed Parties").
W I T N E S S E T H:
WHEREAS, ▇▇▇▇▇▇, ▇▇▇▇▇▇ Supply Shared Services, Inc., a
Delaware corporation (the "Borrower"), and the Lender have entered into that
certain Real Estate Term Credit Agreement dated as of the date hereof (as
hereafter amended, restated, supplemented or otherwise modified from time to
time, and including all schedules, riders, and supplements thereto, the "Term
Credit Agreement"; terms defined therein and not otherwise defined herein being
used herein as therein defined);
WHEREAS, ▇▇▇▇▇▇ owns, directly or indirectly, all or a
majority of the outstanding capital stock of each of the Guarantors;
WHEREAS, ▇▇▇▇▇▇, the Borrower and the Guarantors share an
identity of interest as members of a consolidated group of companies engaged in
substantially similar businesses with ▇▇▇▇▇▇ providing certain centralized
financial, accounting and management services to the Borrower and each of the
Guarantors by virtue of intercompany advances and loans such that financial
accommodations to the Borrower under the Term Credit Agreement shall inure to
the direct and material benefit of the Guarantors; and
WHEREAS, consummation of the transactions pursuant to the Term
Credit Agreement will facilitate expansion and enhance the overall financial
strength and stability of ▇▇▇▇▇▇'▇ entire corporate group, including the
Guarantors; and
WHEREAS, it is a condition precedent to the Lender's
obligations to enter into the Term Credit Agreement and to make extensions of
credit thereunder that the Guarantors enter into this Guaranty to satisfy such
condition precedent;
1
NOW, THEREFORE, in consideration of the premises and in order
to induce the Lender to enter into and perform its obligations under the Term
Credit Agreement, the Guarantors hereby jointly and severally agree as follows:
SECTION 1. Guaranty. The Guarantors hereby jointly and
severally, irrevocably and unconditionally, guarantee the punctual payment when
due, whether at stated maturity, by acceleration or otherwise, of (i) all Term
Credit Loans and all other Obligations owing by Borrower to the Guaranteed
Parties or any of them, jointly or severally under the Term Credit Agreement,
the Term Credit Notes and the other Credit Documents, including all renewals,
extensions, modifications and refinancings thereof, now or hereafter owing,
whether for principal, interest, fees, expenses or otherwise, (ii) all
liabilities and obligations, whenever arising, owing from Borrower to any Lender
or any Affiliate of the Lender, arising under currency contracts, interest rate
contracts, interest rate protection agreements or similar agreements and (iii)
any and all reasonable out-of-pocket expenses (including reasonable attorneys'
fees actually incurred and expenses) incurred by the Guaranteed Parties in
enforcing any rights under this Guaranty (collectively, the "Guaranteed
Obligations"), including without limitation, all interest which, but for the
filing of a petition in bankruptcy with respect to Borrower, would accrue on any
principal portion of the Guaranteed Obligations. Any and all payments by the
Guarantors hereunder shall be made free and clear of and without deduction for
any set-off, counterclaim, or withholding so that, in each case, each Guaranteed
Party will receive, after giving effect to any Taxes (as such term is defined in
the Term Credit Agreement, but excluding Taxes imposed on overall net income of
the Guaranteed Party to the same extent as excluded pursuant to the Term Credit
Agreement), the full amount that it would otherwise be entitled to receive with
respect to the Guaranteed Obligations (but without duplication of amounts for
Taxes already included in the Guaranteed Obligations). The Guarantors
acknowledge and agree that this is a guarantee of payment when due, and not of
collection, and that this Guaranty may be enforced up to the full amount of the
Guaranteed Obligations without proceeding against Borrower, against any security
for the Guaranteed Obligations, against any other Guarantor or under any other
guaranty covering any portion of the Guaranteed Obligations.
SECTION 2. Guaranty Absolute. The Guarantors guarantee that
the Guaranteed Obligations will be paid strictly in accordance with the terms of
the Credit Documents, regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of any Guaranteed Party with respect thereto. The liability of each
Guarantor under this Guaranty shall be absolute and unconditional in accordance
with its terms and shall remain in full force and effect without regard to, and
shall not be released, suspended, discharged, terminated or otherwise affected
by, any circumstance or occurrence whatsoever, including, without limitation,
the following (whether or not such Guarantor consents thereto or has notice
thereof):
(a) any change in the time, place or manner of payment of, or
in any other term of, all or any of the Guaranteed Obligations, any
waiver, indulgence, renewal, extension, amendment or modification of or
addition, consent or supplement to or deletion from or any other action
or inaction under or in respect of the Term Credit Agreement, the other
Credit Documents, or any other documents, instruments or agreements
relating to the
2
Guaranteed Obligations or any other instrument or agreement referred to
therein or any assignment or transfer of any thereof;
(b) any lack of validity or enforceability of the Term Credit
Agreement, the other Credit Documents, or any other document,
instrument or agreement referred to therein or any assignment or
transfer of any thereof;
(c) any furnishing to the Guaranteed Parties of any additional
security for the Guaranteed Obligations, or any sale, exchange, release
or surrender of, or realization on, any security for the Guaranteed
Obligations;
(d) any settlement or compromise of any of the Guaranteed
Obligations, any security therefor, or any liability of any other party
with respect to the Guaranteed Obligations, or any subordination of the
payment of the Guaranteed Obligations to the payment of any other
liability of ▇▇▇▇▇▇;
(e) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating
to any Guarantor or ▇▇▇▇▇▇, or any action taken with respect to this
Guaranty by any trustee or receiver, or by any court, in any such
proceeding;
(f) any nonperfection of any security interest or lien on any
collateral, or any amendment or waiver of or consent to departure from
any guaranty or security, for all or any of the Guaranteed Obligations;
(g) any application of sums paid by ▇▇▇▇▇▇ or any other Person
with respect to the liabilities of ▇▇▇▇▇▇ to the Guaranteed Parties,
regardless of what liabilities of ▇▇▇▇▇▇ remain unpaid;
(h) any act or failure to act by any Guaranteed Party which
may adversely affect a Guarantor's subrogation rights, if any, against
▇▇▇▇▇▇ to recover payments made under this Guaranty; and
(i) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, any Guarantor.
If claim is ever made upon any Guaranteed Party for repayment or recovery of any
amount or amounts received in payment or on account of any of the Guaranteed
Obligations, and any Guaranteed Party repays all or part of said amount by
reason of (a) any judgment, decree or order of any court or administrative body
having jurisdiction over the Guaranteed Party or any of its property, or (b) any
settlement or compromise of any such claim effected by the Guaranteed Party with
any such claimant (including ▇▇▇▇▇▇ or a trustee in bankruptcy for ▇▇▇▇▇▇), then
and in such event the Guarantors agree that any such judgment, decree, order,
settlement or compromise shall be binding on it, notwithstanding any revocation
hereof or the cancellation of the Term Credit Agreement, the other Credit
Documents, or any other instrument evidencing any liability
3
of ▇▇▇▇▇▇, and the Guarantors shall be and remain liable to the Guaranteed Party
for the amounts so repaid or recovered to the same extent as if such amount had
never originally been paid to the Guaranteed Party.
SECTION 3. Waiver. The Guarantors hereby waive notice of
acceptance of this Guaranty, notice of any liability to which it may apply, and
further waive presentment, demand of payment, protest, notice of dishonor or
nonpayment of any such liabilities, suit or taking of other action by the
Guaranteed Parties against, and any other notice to, ▇▇▇▇▇▇ or any other party
liable with respect to the Guaranteed Obligations (including the Guarantors or
any other Person executing a guaranty of the obligations of ▇▇▇▇▇▇).
SECTION 4. Waiver of Subrogation. Upon the making by any
Guarantor of any payment hereunder for the account of ▇▇▇▇▇▇, such Guarantor
shall be subrogated to the rights of the payee against ▇▇▇▇▇▇ with respect to
such payment; provided that such Guarantor shall not enforce any right or
receive any payment by way of subrogation until all of the Guaranteed
Obligations have been paid in full and the Term Credit Agreement and the Line of
Credit Commitments have been terminated. If, prior to the payment in full of the
Guaranteed Obligations and the termination of the Term Credit Agreement and the
Line of Credit Commitments, any amount shall be paid to any Guarantor on account
of such subrogation, reimbursement, contribution or setoff rights, such amount
shall be held in trust for the benefit of the Guaranteed Parties and any other
holders of the Guaranteed Obligations and shall forthwith be paid to the
Guaranteed Parties to be credited and applied upon the Guaranteed Obligations,
whether matured or unmatured, in accordance with the terms of the Term Credit
Agreement or to be held by the Guaranteed Parties as collateral security for any
Guaranteed Obligations thereafter existing.
SECTION 5. Contribution. For the purpose of establishing
rights and obligations of contribution among ▇▇▇▇▇▇ and the Guarantors for the
benefit of themselves and for the benefit of the Lender, the Guarantors hereby
agree and ▇▇▇▇▇▇ acknowledges the following contribution provisions:
(a) Indemnity and Subrogation. In addition to all such rights
of indemnity and subrogation as the Guarantors may have under applicable law
(but subject subsection (c) below), ▇▇▇▇▇▇ agrees that (i) in the event a
payment shall be made by any Guarantor under this Guaranty in respect of the
obligations of ▇▇▇▇▇▇ under the terms of the Term Credit Agreement, ▇▇▇▇▇▇ shall
indemnify such Guarantor for the full amount of such payment and (ii) in the
event any assets of any Guarantor shall be sold pursuant to any stock pledge
agreement or similar instrument or agreement to satisfy a claim of any
Guaranteed Party, ▇▇▇▇▇▇ shall indemnify such Guarantor in an amount equal to
the greater of the book value or the fair market value of the assets so sold.
Each Guarantor has subordinated its rights to subrogation, pursuant to Section 4
of this Guaranty.
(b) Contribution and Subrogation. Each Guarantor agrees
(subject to subsection (c) below) that in the event a payment shall be made by
any Guarantor under this Guaranty or assets of any Guarantor shall be sold
pursuant to any stock pledge agreement or
4
similar instrument or agreement to satisfy a claim of any Guaranteed Party, and
such Guarantor (the "Claiming Guarantor") shall not have been indemnified by
▇▇▇▇▇▇ as provided in subsection (a) above, each other Guarantor (a
"Contributing Guarantor") shall indemnify the Claiming Guarantor in an amount
equal to the amount of such payment or the greater of the book value or the fair
market value of such assets, as the case may be, multiplied by a fraction, the
numerator of which shall be the Consolidated Net Worth of the Contributing
Guarantor on the date hereof, and the denominator of which shall be the sum of
the Consolidated Net Worth of all the Guarantors on the date hereof. Any
Contributing Guarantor making any payment to a Claiming Guarantor pursuant to
this subsection (b) shall be subrogated to the rights of such Claiming Guarantor
under subsection (a) to the extent of such payment.
(c) Subordination. Notwithstanding any provision of this
Guaranty to the contrary, (i) all rights of the Guarantors under subsection (a)
or (b) and all other rights of indemnity or contribution under applicable law or
otherwise shall be fully subordinated to the indefeasible payment in full of the
Guaranteed Obligations, and (ii) no such rights shall be exercised until all of
the Guaranteed Obligations shall have been irrevocably paid in full and the Term
Credit Agreement and the Line of Credit Commitments shall have been irrevocably
terminated. If any amount shall be paid to any Guarantor on account of such
indemnity or contribution rights at any time when all of the Guaranteed
Obligations shall not have been paid in full, such amount shall be held in trust
for the benefit of the Guaranteed Parties and shall forthwith be paid to the
Guaranteed Parties to be credited and applied upon the Guaranteed Obligations,
whether matured or unmatured, in accordance with the terms of the Term Credit
Agreement. No failure on the part of ▇▇▇▇▇▇ or any Guarantor to make the
payments required by subsection (a) or (b) (or any other payments required under
applicable law or otherwise) shall in any respect limit the obligations and
liabilities of any Guarantor with respect to this Guaranty, and each Guarantor
shall remain liable for the full amount of the obligations of such Guarantor
under this Guaranty.
(d) Allocation. If at any time there exists more than one
Claiming Guarantor with respect to this Guaranty, then payment from other
Guarantors pursuant to this Section 5 shall be allocated among such Claiming
Guarantors in proportion to the total amount of money paid for or on account of
the Guaranteed Obligations by each such Claiming Guarantor pursuant to the
Guaranty.
(e) Preservation of Rights. This Section 5 shall not limit or
affect any right which any Guarantor may have against any other Person that is
not a party hereto.
(f) Subsidiary Payment. The amount of contribution payable
under this Section 5 by any Guarantor with respect to the Guaranty shall be
reduced by the amount of any contribution paid hereunder by a Subsidiary of such
Guarantor with respect to the Guaranty.
(g) Asset Sale. If all of the stock of any Guarantor shall be
sold or otherwise disposed of (including by merger or consolidation) in an asset
sale not prohibited by the Term Credit Agreement or otherwise consented to by
the Required Lenders under the Term Credit Agreement, the agreements of such
Guarantor hereunder shall automatically be discharged and released without any
further action by such Guarantor and shall be assumed in full by the
5
corporation which prior to such asset sale or consent owned the stock of such
Guarantor, effective as of the time of such asset sale or consent. ▇▇▇▇▇▇ shall
cause any such corporation which is not a Guarantor to become a party to this
Guaranty unless otherwise agreed in writing by the Required Lenders.
(h) Equitable Allocation. If as a result of any
reorganization, recapitalization or other corporate change in ▇▇▇▇▇▇ or any of
its Subsidiaries, or as a result of any amendment, waiver or modification of the
terms and conditions governing the Guaranty or any of the Guaranteed
Obligations, or for any other reason, the contributions under this Section 5
become inequitable, the parties hereto shall promptly modify and amend this
Section 5 to provide for an equitable allocation of contributions. All such
modifications and amendments shall be in writing and signed by the Guarantors,
▇▇▇▇▇▇, and the Guaranteed Parties.
(i) Asset of Party to Which Contribution and Indemnification
Are Owing. The parties hereto acknowledge that the right to contribution and
indemnification hereunder shall each constitute an asset in favor of the party
to which such contribution or indemnification is owing.
SECTION 6. Severability. Any provision of this Guaranty which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
SECTION 7. Successors and Assigns; Amendments. This Guaranty
shall be binding upon each party hereto and its respective successors and
assigns and shall inure to the benefit of the Guaranteed Parties and their
respective successors and assigns. None of any Guarantor's rights or any
interest therein under this Section 7 may be assigned or transferred without the
written consent of the Guaranteed Parties. In the event of any such transfer or
assignment of rights by any Guarantor, the rights and privileges herein
conferred upon that Guarantor shall automatically extend to and be vested in
such transferee or assignee, all subject to the terms and conditions hereof.
This Section 7 shall not be amended without the prior written consent of the
Guaranteed Parties.
SECTION 8. Notices. All notices and other communications
provided for hereunder shall be given in the manner specified in the Term Credit
Agreement (i) in the case of the Guaranteed Parties, at the address specified
for the Lender in the Term Credit Agreement, and (ii) in the case of the
Guarantors, at the respective addresses specified for such Guarantors in this
Guaranty.
SECTION 9. No Waiver; Remedies. No failure on the part of the
Guaranteed Parties to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right hereunder preclude any other or further exercise thereof or the
exercise of any other right. No notice to or demand on any Guarantor in any case
shall entitle such Guarantor to any other further notice or demand in any
6
similar or other circumstances or constitute a waiver of the rights of the
Guaranteed Parties to any other or further action in any circumstances without
notice or demand. The remedies herein provided are cumulative and not exclusive
of any remedies provided by law.
SECTION 10. Right Of Set Off. In addition to and not in
limitation of all rights of offset that the Guaranteed Parties may have under
applicable law, the Guaranteed Parties shall, upon the occurrence of any Event
of Default and whether or not the Guaranteed Parties have made any demand or the
Guaranteed Obligations are matured, have the right to appropriate and apply to
the payment of the Guaranteed Obligations, all deposits of any Guarantor
(general or special, time or demand, provisional or final) then or thereafter
held by and other indebtedness or property then or thereafter owing by any of
the Guaranteed Parties to any Guarantor, whether or not related to this Guaranty
or any transaction hereunder. The Guaranteed Parties shall promptly notify the
relevant Guarantor of any offset hereunder.
SECTION 11. Continuing Guaranty; Transfer Of Obligations. This
Guaranty is a continuing guaranty and shall (i) remain in full force and effect
until payment in full of the Guaranteed Obligations and all other amounts
payable under this Guaranty and the termination of the Term Credit Commitment,
(ii) be binding upon each Guarantor, its successors and assigns, and (iii) inure
to the benefit of and be enforceable by the Guaranteed Parties.
SECTION 12. Governing Law; Appointment Of Agent For Service Of
Process; Submission To Jurisdiction; Waiver of Jury Trial.
(a) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAWS OF THE STATE OF GEORGIA (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW
PRINCIPLES THEREOF).
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
GUARANTY OR OTHERWISE RELATED HERETO MAY BE BROUGHT IN THE SUPERIOR COURT OF
▇▇▇▇▇▇ COUNTY OF THE STATE OF GEORGIA OR OF THE UNITED STATES OF AMERICA FOR THE
NORTHERN DISTRICT OF GEORGIA, AND, BY EXECUTION AND DELIVERY OF THIS GUARANTY,
EACH GUARANTOR HEREBY CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO
THE JURISDICTION OF THE AFORESAID COURTS SOLELY FOR THE PURPOSE OF ADJUDICATING
ITS RIGHTS OR THE RIGHTS OF THE GUARANTEED PARTIES WITH RESPECT TO THIS GUARANTY
OR ANY DOCUMENT RELATED HERETO. EACH GUARANTOR HEREBY IRREVOCABLY DESIGNATES
CORPORATION SERVICE COMPANY AS THE DESIGNEE, APPOINTEE AND AGENT OF SUCH
GUARANTOR TO RECEIVE, FOR AND ON BEHALF OF SUCH GUARANTOR, SERVICE OF PROCESS IN
SUCH JURISDICTION IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
GUARANTY OR ANY DOCUMENT RELATED HERETO AND SUCH SERVICE SHALL BE DEEMED
COMPLETED THIRTY DAYS AFTER MAILING THEREOF TO SAID AGENT. IT IS UNDERSTOOD THAT
A COPY OF SUCH PROCESS SERVED ON SUCH AGENT WILL BE PROMPTLY FORWARDED BY SUCH
LOCAL AGENT AND BY THE SERVER OF
7
PROCESS BY MAIL TO THE RESPECTIVE GUARANTOR AT ITS ADDRESS SET FORTH HEREIN, BUT
THE FAILURE OF SUCH GUARANTOR TO RECEIVE SUCH COPY SHALL NOT, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, AFFECT IN ANY WAY THE SERVICE OF SUCH PROCESS. EACH
GUARANTOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT
LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS IN RESPECT OF THIS
GUARANTY OR ANY DOCUMENT RELATED THERETO. NOTHING HEREIN SHALL AFFECT THE RIGHT
OF THE GUARANTEED PARTIES TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW
OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY GUARANTOR IN
ANY OTHER JURISDICTION.
(c) TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH GUARANTOR
HEREBY IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS GUARANTY OR ANY OTHER
CREDIT DOCUMENT OR ANY MATTER ARISING IN CONNECTION HEREUNDER OR THEREUNDER.
SECTION 13. Subordination Of ▇▇▇▇▇▇'▇ Obligations To the
Guarantors. As an independent covenant, each Guarantor hereby expressly
covenants and agrees for the benefit of the Guaranteed Parties that all
obligations and liabilities of Hughes to such Guarantor of whatsoever
description including, without limitation, all intercompany receivables of such
Guarantor from Hughes ("Junior Claims") shall be subordinate and junior in right
of payment to all obligations of Hughes to the Guaranteed Parties under the
terms of the Term Credit Agreement and the other Credit Documents ("Senior
Claims").
If an Event of Default shall occur, then, unless and until
such Event of Default shall have been cured, waived, or shall have ceased to
exist, no direct or indirect payment (in cash, property, securities by setoff or
otherwise) shall be made by Hughes to any Guarantor on account of or in any
manner in respect of any Junior Claim except such payments and distributions the
proceeds of which shall be applied to the payment of Senior Claims.
In the event of a Proceeding (as hereinafter defined), all
Senior Claims shall first be paid in full before any direct or indirect payment
or distribution (in cash, property, securities by setoff or otherwise) shall be
made to any Guarantor on account of or in any manner in respect of any Junior
Claim except such payments and distributions the proceeds of which shall be
applied to the payment of Senior Claims. For the purposes of the previous
sentence, "Proceeding" means Hughes or any Guarantor shall commence a voluntary
case concerning itself under the Bankruptcy Code or any other applicable
bankruptcy laws; or any involuntary case is commenced against Hughes or any
Guarantor; or a custodian (as defined in the Bankruptcy Code or any other
applicable bankruptcy laws) is appointed for, or takes charge of, all or any
substantial part of the property of Hughes or any Guarantor, or Hughes or any
Guarantor commences any other proceedings under any reorganization arrangement,
adjustment of debt,
8
relief of debtor, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to Hughes or any
Guarantor, or any such proceeding is commenced against Hughes or any Guarantor,
or Hughes or any Guarantor is adjudicated insolvent or bankrupt; or any order of
relief or other order approving any such case or proceeding is entered; or
Hughes or any Guarantor suffers any appointment of any custodian or the like for
it or any substantial part of its property; or Hughes or any Guarantor makes a
general assignment for the benefit of creditors; or Hughes or any Guarantor
shall fail to pay, or shall state that it is unable to pay, or shall be unable
to pay, its debts generally as they become due; or Hughes or any Guarantor shall
call a meeting of its creditors with a view to arranging a composition or
adjustment of its debts; or Hughes or any Guarantor shall by any act or failure
to act indicate its consent to, approval of or acquiescence in any of the
foregoing; or any corporate action shall be taken by Hughes or any Guarantor for
the purpose of effecting any of the foregoing.
In the event any direct or indirect payment or distribution is
made to a Guarantor in contravention of this Section 13, such payment or
distribution shall be deemed received in trust for the benefit of the Guaranteed
Parties and shall be immediately paid over to the Guaranteed Parties for
application against the Guaranteed Obligations in accordance with the terms of
the Term Credit Agreement.
Each Guarantor agrees to execute such additional documents as
the Guaranteed Parties may reasonably request to evidence the subordination
provided for in this Section 13.
SECTION 14. Judgment Currency. (a) The Guarantors' obligations
hereunder to make payments in a particular currency (the "Obligation Currency")
shall not be discharged or satisfied by any tender or recovery pursuant to any
judgment expressed in or converted into any currency other than the Obligation
Currency, except to the extent that such tender or recovery results in the
effective receipt by the Guaranteed Parties of the full amount of the Obligation
Currency expressed to be payable under this Guaranty or the Term Credit
Agreement. If for the purpose of obtaining or enforcing judgment against any
Guarantor in any court or in any jurisdiction, it becomes necessary to convert
into or from any currency other than the Obligation Currency (such other
currency being hereinafter referred to as the "Judgment Currency") an amount due
in the Obligation Currency, the conversion shall be made, at the currency
equivalent determined, in each case, as on the day immediately preceding the day
on which the judgment is given (such Business Day being hereafter referred to as
the "Judgment Currency Conversion Date").
(b) If there is a change in the rate of exchange prevailing
between the Judgment Currency Conversion Date and the date of actual payment of
the amount due, the Guarantors covenant and agree to pay, or cause to be paid,
such additional amounts, if any (but in any event not a lesser amount), as may
be necessary to ensure that the amount paid in the Judgment Currency, when
converted at the rate of exchange prevailing on the date of payment, will
produce the amount of the Obligation Currency which could have been purchased
with the amount of Judgment Currency stipulated in the judgment or judicial
award at the rate of exchange prevailing on the Judgment Currency Conversion
Date.
9
(c) For purposes of determining the currency equivalent for
this Section, such amounts shall include any premium and costs payable in
connection with the purchase of the Obligation Currency.
(d) If the Obligation Currency is U.S. Dollars, the currency
equivalent shall be the Dollar Equivalent. For purposes of this Guaranty, the
term "Dollar Equivalent" shall mean, with respect to any monetary amount in a
currency other than U.S. Dollars, at any time for the determination thereof, the
amount of U.S. Dollars obtained by converting such currency involved in such
computation into U.S. Dollars at the spot rate for the purchase of U.S. Dollars
with the applicable currency as quoted by the Lender at 11:00 a.m. (local time
for the Lender) on the date of determination thereof specified herein or, if the
date of determination thereof is not otherwise specified herein, on the date two
applicable Business Days prior to such determination.
SECTION 15. Automatic Acceleration in Certain Events. Upon the
occurrence of an Event of Default specified in Article VIII of the Term Credit
Agreement, all Guaranteed Obligations shall automatically become immediately due
and payable by the Guarantors, without notice or other action on the part of the
Guaranteed Parties, and regardless of whether payment of the Guaranteed
Obligations by Hughes has then been accelerated. In addition, if any event of
the types described in Article VIII of the Term Credit Agreement should occur
with respect to any Guarantor, then the Guaranteed Obligations shall
automatically become immediately due and payable by such Guarantor, without
notice or other action on the part of the Guaranteed Parties, and regardless of
whether payment of the Guaranteed Obligations by Hughes has then been
accelerated.
SECTION 16. Savings Clause. (a) It is the intent of each
Guarantor and the Guaranteed Parties that each Guarantor's maximum obligations
hereunder shall be:
(i) in a case or proceeding commenced by or against such
Guarantor under the Bankruptcy Code on or within one year from the
date on which any of the Guaranteed Obligations are incurred, the
maximum amount which would not otherwise cause the Guaranteed
Obligations (or any other obligations of such Guarantor to the
Guaranteed Parties) to be avoidable or unenforceable against such
Guarantor under (A) Section 548 of the Bankruptcy Code or (B) any
state fraudulent transfer or fraudulent conveyance act or statute
applied in such case or proceeding by virtue of Section 544 of the
Bankruptcy Code; or
(ii) in a case or proceeding commenced by or against such
Guarantor under the Bankruptcy Code subsequent to one year from the
date on which any of the Guaranteed Obligations are incurred, the
maximum amount which would not otherwise cause the Guaranteed
Obligations (or any other obligations of the Guarantor to the
Guaranteed Parties) to be avoidable or unenforceable against such
Guarantor under any state fraudulent transfer or fraudulent conveyance
act or statute applied in any such case or proceeding by virtue of
Section 544 of the Bankruptcy Code; or
10
(iii) in a case or proceeding commenced by or against such
Guarantor under any law, statute or regulation other than the
Bankruptcy Code (including, without limitation, any other bankruptcy,
reorganization, arrangement, moratorium, readjustment of debt,
dissolution, liquidation or similar debtor relief laws), the maximum
amount which would not otherwise cause the Guaranteed Obligations (or
any other obligations of such Guarantor to the Guaranteed Parties) to
be avoidable or unenforceable against such Guarantor under such law,
statute or regulation including, without limitation, any state
fraudulent transfer or fraudulent conveyance act or statute applied in
any such case or proceeding.
(The substantive laws under which the possible avoidance or unenforceability of
the Guaranteed Obligations (or any other obligations of such Guarantor to the
Guaranteed Parties) shall be determined in any such case or proceeding shall
hereinafter be referred to as the "Avoidance Provisions").
(b) To the end set forth in Section 16(a), but only to the
extent that the Guaranteed Obligations would otherwise be subject to
avoidance under the Avoidance Provisions if such Guarantor is not
deemed to have received valuable consideration, fair value or
reasonably equivalent value for the Guaranteed Obligations, or if the
Guaranteed Obligations would render the Guarantor insolvent, or leave
the Guarantor with an unreasonably small capital to conduct its
business, or cause the Guarantor to have incurred debts (or to have
intended to have incurred debts) beyond its ability to pay such debts
as they mature, in each case as of the time any of the Guaranteed
Obligations are deemed to have been incurred under the Avoidance
Provisions and after giving effect to contribution as among Guarantors,
the maximum Guaranteed Obligations for which such Guarantor shall be
liable hereunder shall be reduced to that amount which, after giving
effect thereto, would not cause the Guaranteed Obligations (or any
other obligations of such Guarantor to the Guaranteed Parties), as so
reduced, to be subject to avoidance under the Avoidance Provisions.
This Section 16(b) is intended solely to preserve the rights of the
Guaranteed Parties hereunder to the maximum extent that would not cause
the Guaranteed Obligations of any Guarantor to be subject to avoidance
under the Avoidance Provisions, and neither such Guarantor nor any
other Person shall have any right or claim under this Section 16 as
against the Guaranteed Parties that would not otherwise be available to
such Person under the Avoidance Provisions.
(c) None of the provisions of this Section 16 are intended in
any manner to alter the obligations of any holder of Subordinated Debt
or the rights of the holders of "senior indebtedness" as provided by
the terms of the Subordinated Debt. Accordingly, it is the intent of
each of the Guarantors that, in the event that any payment or
distribution is made with respect to the Subordinated Debt prior to the
payment in full of the Guaranteed Obligations by virtue of the
provisions of this Section 16, in any case or proceeding of the kinds
described in clauses (i)-(iii) of Section 16(a), the holders of the
Subordinated Debt shall be obligated to pay or deliver such payment or
distribution to or for the benefit of the Guaranteed Parties.
Furthermore, in respect of the Avoidance Provisions, it is the intent
of each Guarantor that the subrogation rights of the holders of
Subordinated Debt
11
with respect to the obligations of the Guarantor under this Guaranty,
be subject in all respects to the provisions of Section 16(b).
SECTION 17. Information. Each of the Guarantors assumes all
responsibility for being and keeping itself informed of ▇▇▇▇▇▇'▇ financial
condition and assets, and of all other circumstances bearing upon the risk of
nonpayment of the Guaranteed Obligations and the nature, scope and extent of the
risks that such Guarantor assumes and incurs hereunder, and agrees that none of
the Guaranteed Parties will have any duty to advise any of the Guarantors of
information known to it or any of them regarding such circumstances or risks.
SECTION 18. Representations and Warranties. Each Guarantor
represents and warrants as to itself that all representations and warranties
relating to it contained in Sections 5.01 through 5.26 of the Term Credit
Agreement are true and correct.
SECTION 19. Survival of Term Credit Agreement. All agreements,
representations and warranties made herein shall survive the execution and
delivery of this Guaranty and the Term Credit Agreement, the making of the Line
of Credit Loans and the execution and delivery of the Term Credit Notes and the
other Credit Documents.
SECTION 20. Counterparts. This Guaranty and any amendments,
waivers, consents or supplements may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument.
SECTION 21. Currency of Payment. All payments to be made by
the Guarantors hereunder shall be made in the relevant currency or currencies in
which the Guaranteed Obligations are denominated in immediately available funds.
If any Guarantor is unable for any reason to effect payment of any of the
Guaranteed Obligations in the currency in which such Guaranteed Obligations are
denominated, the Guaranteed Parties may, at their option, require such payment
to be made in the Dollar Equivalent of such currency. If in any case where any
of the Guarantors shall make any such payment in the Dollar Equivalent, the
Guarantors agree to hold the Guaranteed Parties harmless from any loss incurred
by the Lenders arising from any change in the value of Dollars in relation to
such currency between the date such payment became due and the date of payment
thereof.
SECTION 22. Additional Guarantors. Upon execution and delivery
by any Subsidiary of Hughes of an instrument in the form of Annex 1, such
Subsidiary of Hughes shall become a Guarantor hereunder with the same force and
effect as if originally named a Guarantor herein (each an "Additional
Guarantor"). The execution and delivery of any such instrument shall not require
the consent of any Guarantor hereunder. The rights and obligations of each
Guarantor hereunder shall remain in full force and effect notwithstanding the
addition of any Additional Guarantor as a party to this Guaranty.
12
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be
duly executed and delivered by their respective duly authorized officers as of
the date first above written.
GUARANTORS:
Address: CAROLINA PUMP & SUPPLY CORP.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ CAYESTEEL, INC.
Suite 200 CF FLUID CONTROLS, INC.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇ SUPPLY, INC.
Attn: J. ▇▇▇▇▇▇▇ ▇▇▇▇ COASTAL WHOLESALE, INC.
DOMINION PIPE & SUPPLY CO.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & ASSOCIATES, INC.
ELASCO AGENCY SALES, INC.
ELECTRIC LABORATORIES AND SALES
CORPORATION
FES MERGER CORP., INC.
▇▇▇▇▇ SUPPLY COMPANY, INC.
▇▇▇▇▇▇▇▇▇ CONCRETE PRODUCTS, INC.
H VENTURE CORP.
HHH, LLC
HSI ACQUISITION CORPORATION
HSI CORP.
HSI FUSION SERVICES, INC.
HSI INDIANA, LLC
HSI NORTH CAROLINA, LLC
HUGHES WATER & SEWER COMPANY
▇▇▇▇▇▇ SUPPLY MANAGEMENT SERVICES,
INC.
JUNO INDUSTRIES, INC.
KAMEN SUPPLY COMPANY, INC.
KINGSTON PIPE INDUSTRIES, INC.
L&T OF DELAWARE, INC.
MEREX CORPORATION
METALS INCORPORATED
METALS, INC. - GULF COAST DIVISION
▇▇▇▇▇ & ▇▇▇▇▇▇ SUPPLY COMPANY
▇▇▇▇▇ ELECTRIC SUPPLY, INC.
MOUNTAIN COUNTRY SUPPLY, INC.
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, INCORPORATED
ONE-STOP SUPPLY, INC.
▇▇▇▇▇ SUPPLY OF ▇▇▇▇▇▇▇, INC.
PALM POOL PRODUCTS, INC.
PANHANDLE PIPE AND SUPPLY CO., INC.
REACTION SUPPLY CORPORATION
▇▇▇▇▇▇▇ HOLDING COMPANY, INC.
SOUTHWEST STAINLESS, L.P.
STAINLESS TUBULAR PRODUCTS, INC.
USCO INCORPORATED
UNION MERGER CORPORATION
U.S. FUSION SERVICES, INC.
VIRGINIA WATER & WASTE SUPPLY COMPANY,
WCC MERGER CORPORATION
WATERWORKS HOLDING COMPANY
WATERWORKS SALES COMPANY
WHOLESALE ELECTRIC SUPPLY CORPORATION
Z&L ACQUISITION CORP.
By: ____________________________
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Secretary
SECTION 5 OF THE
FOREGOING GUARANTY
ACKNOWLEDGED AND
AGREED TO:
▇▇▇▇▇▇ SUPPLY, INC.
By:__________________________
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Secretary
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ANNEX I
SUPPLEMENT
TO
SUBSIDIARY GUARANTY AGREEMENT
THIS SUPPLEMENT TO SUBSIDIARY GUARANTY AGREEMENT (this
"Supplement to Guaranty Agreement"), dated as of __________________, made by
______________________, a _______________ (the "Additional Guarantor"), in favor
of SUNTRUST BANK, a Georgia banking corporation (the "Lender"; the Lender and
each other assignee, if any, of all or any portion of the Term Credit Commitment
and/or Term Credit Loans under the Term Credit Agreement described below being
collectively referred to herein as the "Guaranteed Parties").
W I T N E S S E T H:
WHEREAS, ▇▇▇▇▇▇ Supply, Inc., a Florida corporation
("Hughes"), ▇▇▇▇▇▇ Supply Shared Services, Inc., a Delaware corporation (the
"Borrower") and the Lender are parties to a Term Credit Agreement, dated as of
May __, 2002 (as amended, restated, supplemented or otherwise modified from time
to time, the "Term Credit Agreement"), pursuant to which the Lender has made a
commitment to make loans to Borrower;
WHEREAS, certain Subsidiaries (the "Subsidiary Guarantors") of
Hughes have executed and delivered a Subsidiary Guaranty Agreement, dated as of
May __, 2002 (as amended, restated, supplemented or otherwise modified from time
to time, the "Subsidiary Guaranty"), pursuant to which the Subsidiary Guarantors
have agreed to guarantee all of the obligations of the Borrower under the Term
Credit Agreement and the other Credit Documents (as defined in the Term Credit
Agreement);
WHEREAS, Hughes, the Borrower, the Subsidiary Guarantors and
the Additional Guarantor share an identity of interests as members of a
consolidated group of companies engaged in substantially similar businesses;
Hughes provides certain centralized financial, accounting and management
services to the Additional Guarantor; the making of the loans will facilitate
expansion and enhance the overall financial strength and stability of the
▇▇▇▇▇▇'▇ corporate group, including the Additional Guarantor; and by virtue of
intercompany advances and loans, the financial accommodations to Borrower under
the Term Credit Agreement shall inure to the direct and material benefit of
Guarantors; and
WHEREAS, it is a condition subsequent to the Guaranteed
Parties' obligation to make loans to Borrower under the Term Credit Agreement
that the Additional Guarantor execute and deliver to the Guaranteed Parties this
Supplement to Guaranty Agreement, and the
[
Additional Guarantor desires to execute and deliver this Supplement to Guaranty
Agreement to satisfy such condition subsequent;
NOW, THEREFORE, in consideration of the premises and in order to
induce the Guaranteed Parties to make the loans to Borrower under the Term
Credit Agreement, the Additional Guarantor hereby agrees as follows:
SECTION 2. Defined Terms. Capitalized terms not otherwise defined
herein shall have the meanings specified for such terms in the Subsidiary
Guaranty.
SECTION 3. Additional Guarantor. The Additional Guarantor agrees
that it shall be and become a Guarantor for all purposes of the Subsidiary
Guaranty and shall be fully liable thereunder to the Guaranteed Parties to the
same extent and with the same effect as though the Additional Guarantor had been
one of the Guarantors originally executing and delivering the Subsidiary
Guaranty. Without limiting the foregoing, the Additional Guarantor hereby
jointly and severally (with respect to the guaranties made by the Subsidiary
Guarantors under the Subsidiary Guaranty), irrevocably and unconditionally,
guarantees the punctual payment when due, whether at stated maturity by
acceleration or otherwise, of all Term Credit Loans and all other Obligations
(as defined in the Term Credit Agreement), including all renewals, extensions,
modifications and refinancings thereof, now or hereafter existing, whether for
principal, interest, fees, expenses or otherwise, and any and all expenses
(including reasonable attorneys' fees actually incurred and reasonable
out-of-pocket expenses) incurred by the Guaranteed Parties in enforcing any
rights under the Subsidiary Guaranty (as supplemented hereby), subject, however,
to the limitations expressly provided in the Subsidiary Guaranty in Section 16
thereof. All references in the Subsidiary Guaranty to "Guarantors" or any
"Guarantor" shall be deemed to include the Additional Guarantor as if such
Additional Guarantor was one of the original Guarantors executing the Subsidiary
Guaranty.
3. Enforceability. This Supplement has been duly authorized, executed
and delivered by Additional Guarantor and constitutes a legal, valid and binding
obligation of Additional Guarantor, enforceable against it in accordance with
its terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting creditors
rights generally and by general principles of equity (regardless of whether such
enforceability is considered in a proceeding at law or in equity).
4. Counterparts. This Supplement and any amendments, waivers, consents
or supplements may be executed in any number of counterparts, each
of which when so executed and delivered shall be deemed an original,
but all such counterparts shall constitute but one and the same
instrument.
5. Effective Upon Delivery. This Supplement shall become effective upon
execution by Additional Guarantor and delivery of this Supplement, as executed,
to the Guaranteed Parties.
6. Governing Law; Appointment of Agent for Service of Process;
[
Submission to Jurisdiction; Waiver of Jury Trial.
(a) THIS SUPPLEMENT TO GUARANTY AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
BE GOVERNED BY THE LAWS OF THE STATE OF GEORGIA (WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAW PRINCIPLES THEREOF).
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
SUPPLEMENT TO GUARANTY AGREEMENT RELATED HERETO MAY BE BROUGHT IN THE SUPERIOR
COURT OF ▇▇▇▇▇▇ COUNTY OF THE STATE OF GEORGIA OR OF THE UNITED STATES OF
AMERICA FOR THE NORTHERN DISTRICT OF GEORGIA, AND, BY EXECUTION AND DELIVERY OF
THIS SUPPLEMENT TO GUARANTY AGREEMENT, THE ADDITIONAL GUARANTOR HEREBY CONSENTS,
FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE JURISDICTION OF THE AFORESAID
COURTS SOLELY FOR THE PURPOSE OF ADJUDICATING ITS RIGHTS OR THE RIGHTS OF THE
GUARANTEED PARTIES WITH RESPECT TO THIS SUPPLEMENT TO GUARANTY AGREEMENT OR ANY
DOCUMENT RELATED HERETO. THE ADDITIONAL GUARANTOR HEREBY IRREVOCABLY DESIGNATES
CORPORATION SERVICE COMPANY AS THE DESIGNEE, APPOINTEE AND AGENT OF THE
ADDITIONAL GUARANTOR TO RECEIVE, FOR AND ON BEHALF OF THE ADDITIONAL GUARANTOR,
SERVICE OF PROCESS IN SUCH JURISDICTION IN ANY LEGAL ACTION OR PROCEEDING WITH
RESPECT TO THIS SUPPLEMENT TO GUARANTY AGREEMENT OR ANY DOCUMENT RELATED HERETO
AND SUCH SERVICE SHALL BE DEEMED COMPLETED THIRTY (30) DAYS AFTER MAILING
THEREOF TO SAID AGENT. IT IS UNDERSTOOD THAT A COPY OF SUCH PROCESS SERVED ON
SUCH AGENT WILL BE PROMPTLY FORWARDED BY SUCH LOCAL AGENT AND BY THE SERVER OF
PROCESS BY MAIL TO THE ADDITIONAL GUARANTOR AT ITS ADDRESS SET FORTH HEREIN, BUT
THE FAILURE OF THE ADDITIONAL GUARANTOR TO RECEIVE SUCH COPY SHALL NOT, TO THE
EXTENT PERMITTED BY APPLICABLE LAW, AFFECT IN ANY WAY THE SERVICE OF SUCH
PROCESS. THE ADDITIONAL GUARANTOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS IN RESPECT
OF THIS SUPPLEMENT TO GUARANTY AGREEMENT OR ANY DOCUMENT RELATED THERETO.
NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE GUARANTEED PARTIES TO SERVE PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR
OTHERWISE PROCEED AGAINST THE ADDITIONAL GUARANTOR IN ANY OTHER JURISDICTION.
(c) TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE ADDITIONAL
GUARANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
[
IN CONNECTION WITH THIS SUPPLEMENT TO GUARANTY AGREEMENT OR ANY OTHER CREDIT
DOCUMENT OR ANY MATTER ARISING IN CONNECTION HEREUNDER OR THEREUNDER.
7. Severability. In case any provision in or obligation under
this Supplement shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
IN WITNESS WHEREOF, the Additional Guarantor has caused this
Supplement to Guaranty Agreement to be duly executed and delivered to the
Guaranteed Parties under seal by its duly authorized officer as of the date
first above written.
Address for Notices: ADDITIONAL GUARANTOR:
____________________
By:___________________________
Title:__________________
[