1
EXHIBIT 10.6
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$100,000,000
CREDIT AGREEMENT
Dated as of December 22, 2000
among
INDUSTRIAL DISTRIBUTION GROUP, INC.,
as Borrower
and
EACH OF THOSE SUBSIDIARIES OF BORROWER CONSTITUTING
AFFILIATE GUARANTORS HEREUNDER
INCLUDING THOSE SUBSIDIARIES
INITIALLY A SIGNATORY HERETO
TOGETHER WITH THOSE ADDED
MADE PURSUANT TO SECTION 7.16 HEREOF,
as Affiliate Guarantors
EACH OF THE FINANCIAL INSTITUTIONS
INITIALLY A SIGNATORY HERETO,
TOGETHER WITH THOSE ASSIGNEES THEREOF
PURSUANT TO SECTION 14.6 HEREOF,
as Lenders,
FLEET CAPITAL CORPORATION,
as Documentation Agent
BANK OF AMERICA, N.A.,
as Syndication Agent
and
FIRST UNION NATIONAL BANK,
as Administrative Agent and Swingline Lender
with
FIRST UNION SECURITIES, INC.,
as Sole Arranger and Book Manager
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS...............................................................................2
1.1 General Definitions.........................................................................2
1.2 Accounting Terms and Determinations........................................................27
1.3 Other Definitional Terms...................................................................28
ARTICLE II LOANS....................................................................................28
2.1 Revolving Loans............................................................................28
2.2 Optional and Mandatory Prepayments; Reduction of Commitments...............................33
2.3 Payments and Computations..................................................................34
2.4 Maintenance of Account.....................................................................37
2.5 Statement of Account.......................................................................37
2.6 Taxes......................................................................................37
2.7 Sharing of Payments........................................................................39
2.8 Pro Rata Treatment.........................................................................40
2.9 Extensions and Conversions.................................................................40
2.10 Swingline Loan Subfacility.................................................................41
ARTICLE III LETTERS OF CREDIT........................................................................42
3.1 Issuance...................................................................................43
3.2 Notice and Reports.........................................................................43
3.3 Participation..............................................................................43
3.4 Reimbursement..............................................................................43
3.5 Repayment with Revolving Loans.............................................................44
3.6 Renewal, Extension.........................................................................45
3.7 Uniform Customs and Practices..............................................................45
3.8 Indemnification; Nature of Issuing Bank's Duties...........................................46
3.9 Responsibility of Issuing Bank.............................................................47
3.10 Conflict with Letter of Credit Documents...................................................47
ARTICLE IV INTEREST AND FEES........................................................................47
4.1 Interest on Loans..........................................................................47
4.2 Interest After Event of Default............................................................48
4.3 Unused Line Fee............................................................................48
4.4 Lenders' Fees/Administrative Agent's Fees..................................................48
4.5 Letter of Credit Fees......................................................................48
4.6 Authorization to Charge Account............................................................49
4.7 Indemnification in Certain Events..........................................................49
4.8 Inability To Determine Interest Rate.......................................................49
4.9 Illegality.................................................................................50
4.10 Funding Indemnity..........................................................................50
4.11 Early Termination Fee......................................................................51
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ARTICLE V CONDITIONS PRECEDENT.....................................................................51
5.1 Closing Conditions.........................................................................51
5.2 Condition to all Loans and Letters of Credit...............................................55
ARTICLE VI REPRESENTATIONS AND WARRANTIES...........................................................56
6.1 Organization and Qualification.............................................................56
6.2 Solvency...................................................................................56
6.3 Liens; Inventory...........................................................................57
6.4 No Conflict................................................................................57
6.5 Enforceability.............................................................................57
6.6 Financial Data; Material Adverse Change....................................................58
6.7 Locations of Offices, Records and Inventory................................................58
6.8 Fictitious Business Names..................................................................59
6.9 Subsidiaries...............................................................................59
6.10 No Judgments or Litigation.................................................................59
6.11 No Defaults................................................................................59
6.12 No Employee Disputes.......................................................................59
6.13 Compliance with Law........................................................................60
6.14 ERISA......................................................................................60
6.15 Compliance with Environmental Laws.........................................................60
6.16 Use of Proceeds............................................................................61
6.17 Intellectual Property......................................................................61
6.18 Licenses and Permits.......................................................................62
6.19 Title to Property..........................................................................62
6.20 Labor Matters..............................................................................63
6.21 Investment Company.........................................................................63
6.22 Margin Security............................................................................63
6.23 No Event of Default........................................................................64
6.24 Taxes and Tax Returns......................................................................64
6.25 No Other Indebtedness......................................................................64
6.26 Status of Accounts.........................................................................64
6.27 Representations and Warranties.............................................................64
6.28 Survival of Representations................................................................64
6.29 Affiliate Transactions.....................................................................65
6.30 Accuracy and Completeness of Information...................................................65
ARTICLE VII AFFIRMATIVE COVENANTS....................................................................65
7.1 Financial Information......................................................................65
7.2 Inventory..................................................................................67
7.3 Corporate Existence........................................................................68
7.4 ERISA......................................................................................68
7.5 Proceedings or Adverse Changes.............................................................69
7.6 Environmental Matters......................................................................69
7.7 Books and Records; Inspection..............................................................70
7.8 Collateral Records.........................................................................71
7.9 Security Interests.........................................................................71
7.10 Insurance; Casualty Loss...................................................................72
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7.11 Taxes......................................................................................73
7.12 Compliance With Laws.......................................................................73
7.13 Use of Proceeds............................................................................73
7.14 Fiscal Year................................................................................74
7.15 Notification of Certain Events.............................................................74
7.16 Additional Affiliate Guarantors............................................................74
7.17 Schedules of Accounts and Purchase Orders..................................................75
7.18 Collection of Accounts.....................................................................75
7.19 Notice; Credit Memoranda; and Returned Goods...............................................75
7.20 Acknowledgment Agreements..................................................................76
7.21 Trademarks.................................................................................76
7.22 Maintenance of Property....................................................................76
7.23 Revisions or Updates to Schedules..........................................................76
ARTICLE VIII FINANCIAL COVENANTS......................................................................77
8.1 Fixed Charge Coverage Ratio................................................................77
8.2 Capital Expenditures.......................................................................77
8.3 Minimum Excess Borrowing Base Availability.................................................77
8.4 Minimum Tangible Net Worth.................................................................77
ARTICLE IX NEGATIVE COVENANTS.......................................................................78
9.1 Restrictions on Liens......................................................................78
9.2 Restrictions on Additional Indebtedness....................................................78
9.3 Restrictions on Sale of Assets.............................................................78
9.4 No Corporate Changes.......................................................................78
9.5 No Guarantees..............................................................................79
9.6 No Restricted Payments.....................................................................79
9.7 No Investments.............................................................................79
9.8 No Affiliate Transactions..................................................................79
9.9 No Prohibited Transactions Under ERISA.....................................................79
9.10 No Additional Bank Accounts................................................................80
9.11 No Excess Cash.............................................................................81
9.12 Restrictions on Sale of Capital Stock of the Subsidiaries..................................81
9.13 Issuance of Stock by Subsidiaries..........................................................81
9.14 Additional Negative Pledges................................................................81
9.15 Indebtedness...............................................................................81
9.16 Sale and Leaseback.........................................................................82
9.17 Licenses, Etc..............................................................................82
9.18 Limitations................................................................................82
ARTICLE X POWERS...................................................................................82
10.1 Appointment as Attorney-in-Fact............................................................82
10.2 Limitation on Exercise of Power............................................................83
ARTICLE XI EVENTS OF DEFAULT AND REMEDIES...........................................................83
11.1 Events of Default..........................................................................83
11.2 Acceleration...............................................................................85
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ARTICLE XII TERMINATION..............................................................................86
ARTICLE XIII THE ADMINISTRATIVE AGENT.................................................................86
13.1 Appointment of Administrative Agent........................................................86
13.2 Nature of Duties of Administrative Agent...................................................87
13.3 Lack of Reliance on Administrative Agent...................................................87
13.4 Certain Rights of the Administrative Agent.................................................88
13.5 Reliance by Administrative Agent...........................................................88
13.6 Indemnification of Administrative Agent....................................................88
13.7 The Administrative Agent in its Individual Capacity........................................88
13.8 Holders of Notes...........................................................................89
13.9 Successor Administrative Agent.............................................................89
13.10 Collateral Matters.........................................................................90
13.11 Actions with Respect to Defaults...........................................................91
13.12 Delivery of Information....................................................................91
ARTICLE XIV MISCELLANEOUS............................................................................92
14.1 Waivers....................................................................................92
14.2 JURY TRIAL.................................................................................92
14.3 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE...........................................92
14.4 Arbitration................................................................................93
14.5 Notices....................................................................................94
14.6 Assignability..............................................................................95
14.7 Information................................................................................98
14.8 Payment of Expenses; Indemnification.......................................................98
14.9 Entire Agreement, Successors and Assigns...................................................99
14.10 Amendments, Etc............................................................................99
14.11 Nonliability of Administrative Agent and Lenders..........................................100
14.12 Independent Nature of Lenders' Rights.....................................................100
14.13 Counterparts..............................................................................100
14.14 Effectiveness.............................................................................100
14.15 Severability..............................................................................101
14.16 Headings Descriptive......................................................................101
14.17 Maximum Rate..............................................................................101
14.18 Right of Setoff...........................................................................102
14.19 Power of Attorney.........................................................................102
14.20 Replacement Lenders.......................................................................102
14.21 Limitation on Attorneys Fees and Expenses.................................................102
14.22 Certain Honorary Agents...................................................................103
14.23 Seals.....................................................................................103
ARTICLE XV AFFILIATE GUARANTY......................................................................103
15.1 The Guarantee.............................................................................103
15.2 Obligations Unconditional.................................................................103
15.3 Reinstatement.............................................................................104
15.4 Deferral of Subrogation Rights............................................................104
15.5 Remedies..................................................................................104
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15.6 Continuing Guaranty.......................................................................105
15.7 Rights of Contribution....................................................................105
15.8 Limitation on Guaranteed Obligations......................................................106
15.9 Subordination.............................................................................106
EXHIBITS AND SCHEDULES
EXHIBITS
Exhibit A Form of Assignment and Acceptance
Exhibit B Form of Customer Agreement
Exhibit C Form of Landlord Agreement
Exhibit D Form of Pledge Agreement
Exhibit E Form of Security Agreement
Exhibit F-1 Form of Revolving Note
Exhibit F-2 Form of Swingline Note
Exhibit G Form of Notice of Borrowing
Exhibit H Form of Lockbox Agreement
Exhibit I Form of Notice of Extension/Conversion
Exhibit J Form of Incumbency Certificate
Exhibit K Form of Opinion of Borrower's Counsel
Exhibit L Form of Loss Payee Endorsement
Exhibit M Form of Closing Certificate
Exhibit N Form of Account Designation Letter
Exhibit O Form of Collateral Disclosure Certificate
Exhibit P Form of Authorized Persons Letter
Exhibit Q Form of Disbursement Instructions Letter
Exhibit R Form of Trademark Security Agreement
Exhibit S Form of Compliance Certificate
Exhibit T Form of Borrowing Base Certificate
Exhibit U Form of Joinder Agreement
SCHEDULES
Schedule 1.1A Lenders and Commitments
Schedule 1.1B Liens
Schedule 1.1C Indebtedness
Schedule 1.1D Investments
Schedule 1.1E ERP Leases
Schedule 6.1 Jurisdictions of Organization
Schedule 6.7 Collateral Locations
Schedule 6.8 Fictitious Business Names
Schedule 6.9 Subsidiaries
Schedule 6.10 Litigation
Schedule 6.14 ERISA
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Schedule 6.15 Environmental Disclosures
Schedule 6.17 Intellectual Property
Schedule 6.19 Real Estate
Schedule 6.29 Affiliate Transactions
Schedule 9.10 Bank Accounts
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT is entered into as of December 22, 2000 among
INDUSTRIAL DISTRIBUTION GROUP, INC., a Delaware corporation (the "Borrower"),
those Subsidiaries of the Borrower identified on the signature pages hereto as
"Affiliate Guarantors" and any other Subsidiaries of the Borrower which may
become Affiliate Guarantors hereunder pursuant to Section 7.16 (collectively
referred to as the "Affiliate Guarantors" or individually referred to as a
"Affiliate Guarantor"; hereinafter, the Borrower and the Affiliate Guarantors
are sometimes collectively referred to as the "Obligors" or individually
referred to as an "Obligor"); FIRST UNION NATIONAL BANK, a national bank
("FUNB," "First Union" or the "Bank"), as a "Lender," together with each of the
other financial institutions identified as "Lenders" on the signature pages
hereto and any assignees thereof made pursuant to Section 14.6 (together with
each of their successors and assigns, referred to individually as a "Lender"
and, collectively, as the "Lenders"); First Union, as Swingline Lender pursuant
to Section 2.10; First Union, acting as agent for the Lenders (including the
Swingline Lender) in the manner and to the extent described in Article XIII
hereof (First Union, when acting in such capacity, herein called the
"Administrative Agent"); FLEET CAPITAL CORPORATION ("Fleet"), a Rhode Island
corporation, as a Lender and as Documentation Agent pursuant to Section 14.22;
and BANK OF AMERICA, N.A. ("Bank of America"), a national bank, as a Lender and
as Syndication Agent pursuant to Section 14.22.
W I T N E S S E T H:
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WHEREAS, the Obligors share an identity of interests as members of a
consolidated group of companies engaged in similar or related businesses wherein
the making available to the Borrower of financial accommodations will facilitate
and enhance the overall financial strength and stability of the consolidated
group; and
WHEREAS, in furtherance of the foregoing, the Borrower wishes to obtain
a credit facility to provide for the working capital, letter of credit and
general corporate needs of the Obligors, including certain acquisitions; and
WHEREAS, upon the terms and subject to the conditions set forth herein,
the Lenders are willing to make loans and advances to the Borrower for the
foregoing purposes;
NOW, THEREFORE, the Obligors, the Lenders and the Administrative Agent
hereby agree as follows:
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ARTICLE I
DEFINITIONS.
1.1 GENERAL DEFINITIONS.
As used herein, the following terms shall have the meanings herein
specified:
"Account Designation Letter" shall have the meaning given such term in
Section 5.1(o).
"Accounts" shall mean all of each Obligor's "accounts" (as defined in
the UCC), whether now existing or existing in the future, including, without
limitation, all (i) accounts receivable (whether or not specifically listed on
schedules furnished to the Administrative Agent), including, without limitation,
all accounts created by or arising from all of each Obligor's sales of goods or
rendition of services made under any of each Obligor's trade names or styles, or
through any of each Obligor's divisions; (ii) unpaid seller's rights (including
rescission, replevin, reclamation and stopping in transit) relating to the
foregoing or arising therefrom, (iii) rights to any goods represented by any of
the foregoing, including returned or repossessed goods; (iv) reserves and credit
balances held by each Obligor with respect to any such accounts receivable or
account debtors; (v) guarantees or collateral for any of the foregoing; and (vi)
insurance policies or rights relating to any of the foregoing.
"Acknowledgment Agreements" shall mean: (i) Customer Agreements; and
(ii) Landlord Agreements.
"Acquisition" shall mean the acquisition by an Obligor or any
Subsidiary of: (a) all, or a controlling interest in, the voting stock or other
equity securities of another Person; or (b) all, or substantially all, of assets
or property of a Person, or assets or property constituting all, or
substantially all assets or properties of a division or line of business of a
Person.
"Administrative Agent" shall mean First Union, as provided in the
preamble of this Credit Agreement, or any successor to First Union acting in
such capacity.
"Administrative Agent's Fees" shall mean the fees payable by the
Borrower to the Administrative Agent as described in the Fee Letter.
"Affiliate" shall mean any entity which directly or indirectly
Controls, is Controlled by, or is under common Control with, any Obligor or any
Subsidiary of any Obligor.
"Affiliate Guarantor" and "Affiliate Guarantors" shall have the
meanings given to such term in the preamble of this Credit Agreement.
"Applicable Percentage" shall mean for Eurodollar Loans, Base Rate
Loans and Unused Line Fees, the appropriate applicable percentages corresponding
to the Leverage Ratio in effect as of the most recent Calculation Date (as
defined below) as shown below:
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Tier Levels Leverage Ratio Applicable Percentage for Applicable Percentage for Applicable Percentage
Eurodollar Loans Base Rate Loans for Unused Line Fee
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1 > 4.5 to 1.0 2.75% 1.50% .375%
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2 > 4.0 to 1.0 but < 2.50% 1.25% .375%
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4.5 to 1.0
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3 > 3.5 to 1.0 but < 2.25% 1.00% .375%
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4.0 to 1.0
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4 > 3.0 to 1.0 but < 2.00% .75% .25%
-
3.5 to 1.0
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5 < 3.0 to 1.0 1.75% .50% .25%
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The Applicable Percentages shall be determined and adjusted quarterly on the
date (each a "Calculation Date") five (5) Business Days after the date on which
the Borrower provides the quarterly officer's certificate for each fiscal
quarter in accordance with the provisions of Section 7.1(d); provided, however,
that (i) the initial Applicable Percentages shall be based on Tier Level 3 of
the pricing grid based on the Leverage Ratio, as shown above and shall remain at
this Tier Level 3 until the first Calculation Date subsequent to June 30, 2001;
and, thereafter, the Tier Level shall be determined by the then current Leverage
Ratio and (ii) if the Borrower fails to provide the officer's certificate to the
Administrative Agent for any fiscal quarter as required by and within the time
limits set forth in Section 7.1(d), the Applicable Percentages from the
applicable date of such failure shall be based on Tier Level 1 until five (5)
Business Days after an appropriate officer's certificate is provided, whereupon
the Tier Level shall be determined by the then current Leverage Ratio. Except as
set forth above, each Applicable Percentage shall be effective from one
Calculation Date until the next Calculation Date.
"Approved Acquisition" means: (A) any Acquisition which meets each of
the following conditions, to the sole satisfaction of the Administrative Agent:
(i) at least fifteen (15) days prior to the intended closing date of such
Acquisition, the Administrative Agent shall have received a report from the
Borrower setting forth all financial and related information concerning the
Acquisition, in such form, manner and detail as then reasonably requested; (ii)
the Acquisition shall have been approved by the board of directors of the
Acquisition Target (as hereinafter defined); i.e., it is not a "hostile"
Acquisition; (iii) the Person, operating assets or line of business acquired
(herein, the "Acquisition Target"), must be in substantially similar line of
business as conducted (or to be conducted) by the Borrower and its Subsidiaries
as of the Closing Date; (iv) no Event of Default or Default shall exist at the
time of such Acquisition or shall result from, or be caused by, its
consummation; (v) the Administrative Agent shall have received at least three
(3) Business Days prior to the intended closing date of such Acquisition or the
date of their intended execution (if required or permitted to be executed prior
to such Acquisition being consummated, whichever is the earlier), copies of all
documents, instruments and agreements to be executed by the Borrower or any of
its Subsidiaries evidencing, governing or relating to such Acquisition (the
"Acquisition Documents"), and the Administrative Agent, in the exercise of its
commercially reasonable judgment, shall be satisfied therewith and with any
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change in the organization structure of the Borrower and its Subsidiaries
resulting therefrom; (vi) contemporaneously with the closing of such
Acquisition, the Administrative Agent shall have received (A) such documents and
instruments as may be necessary to grant or confirm to Agent a Lien on or
security interest in the equity interests, operating assets or line of business
so acquired subject to no other Liens, except Permitted Liens, and (B) if the
Person is acquired by, and not merged into, the Borrower, and the Person is a
Domestic Subsidiary, the joinder of such Person as an Affiliate Guarantor
pursuant to Section 7.16; (vii) at the time of the closing of such Acquisition,
the Borrower must be able to demonstrate to the satisfaction of the
Administrative Agent its compliance with all financial covenants set forth in
Article VIII hereof on a pro forma basis, giving effect to such Acquisition as
of the then most recently concluded fiscal quarter end of the Borrower for which
financial reports are then available, on both an historical and prospective
basis, for the respective twelve (12) month periods both preceding and
succeeding such fiscal quarter end, as reflected on restated and projected
financial statements (including income statements, balance sheets and cash flow
summaries) for each of such fiscal periods; (viii) at the time of closing of
such Acquisition, the Borrower must also be able to demonstrate to the
Administrative Agent's satisfaction that, on a pro forma basis, after factoring
in the Acquisition Target's share as a Subsidiary of the Borrower of historical
overhead, debt service and similar costs allocated to Borrower's Subsidiaries
over the twelve (12) months ending as of the most recently concluded fiscal
month of the Borrower prior to the Acquisition for which financial statements
are available, the Borrower has a Leverage Ratio of not more than 4.50:1; (ix)
at the time of the closing of such Acquisition, the Borrower must also be able
to demonstrate to the Administrative Agent's satisfaction that, after giving
effect to such Acquisition and any Loans or Letters of Credit associated
therewith, Average Excess Availability shall be at least Fifteen Million Dollars
($15,000,000); (x) the total cost to the Borrower or any Subsidiary for such
Acquisition, including, without limitation, cash paid, purchase money debt
incurred, other debt assumed or value of assets or equity interests exchanged
(herein, "Total Acquisition Cost"), shall not exceed, either individually or
when aggregated with the Total Acquisition Costs of all Approved Acquisitions
occurring within the most recent twelve (12) months' period, Ten Million Dollars
($10,000,000); and (xi) on or before the date of such Acquisition, the
Administrative Agent shall have received from an Authorized Officer of the
Borrower a certificate confirming compliance with all of the foregoing
conditions (including, where appropriate, calculations of covenant compliance);
or (B) any other Acquisition which has been approved by the Required Lenders.
"Approved Banks" shall have the meaning given such term in the
definition of "Cash Equivalents" herein.
"Asset Disposition" shall mean the disposition (other than (i) any
disposition described in clauses (a) of Section 9.3 or (ii) a disposition
described in clauses (b) or (c) of Section 9.3, so long as the proceeds thereof
are used to repair existing assets or acquire other assets or property useful in
the relevant Obligor's business within one hundred twenty (120) days of such
disposition) of any or all of the assets (including, without limitation, the
Capital Stock of an Obligor or Subsidiary of an Obligor) of any Obligor or its
Subsidiaries, whether by sale, lease, transfer or otherwise, in a single
transaction, or in a series of related transactions in any consecutive twelve
(12) month period (a) that have a fair market value in the aggregate in excess
of Two Hundred Fifty Thousand Dollars
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($250,000) or (b) for Net Cash Proceeds in the aggregate in excess of Two
Hundred Fifty Thousand ($250,000).
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by an assigning Lender and an assignee Lender, accepted by the
Administrative Agent and, if applicable, the Borrower, in accordance with
Section 14.6(f), in the form attached hereto as Exhibit A.
"Authorized Officer," for each Obligor, shall mean its chief executive
officer, chief operating officer, chief financial officer, director of treasury,
or controller (regardless of title), its President and any Vice President.
"Average Excess Availability" shall mean that amount, determined
monthly, as of the last Business Day of each calendar month, by which (A) the
lesser of (1) the Revolving Credit Committed Amount in effect on the first day
of such calendar month (or the Closing Date, for the initial such partial
month), or (2) the Borrowing Base reported at the end of such calendar month or,
as appropriate, at the end of the calendar week closest to such month end,
pursuant to Section 7.1(e), exceeds (B) the greater of (1) the total amount of
Loans and Letter of Credit Obligations outstanding at the end of such calendar
month, or (2) the daily mean average amount of Loans and Letter of Credit
Obligations for such calendar month.
"Base Rate" shall mean, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest whole multiple of 1/100 of 1%) equal to
the greater of (i) the Federal Funds Rate in effect on such day plus one-half of
one percent (1/2%) per annum, or (ii) the Prime Rate in effect on such day. If
for any reason the Administrative Agent shall have determined (which
determination shall be conclusive absent manifest error) that it is unable after
due inquiry to ascertain the Federal Funds Rate for any reason, including the
inability or failure of the Administrative Agent to obtain sufficient quotations
in accordance with the terms hereof, the Base Rate shall be determined without
regard to clause (i) of the first sentence of this definition until the
circumstances giving rise to such inability no longer exist. Any change in the
Base Rate due to a change in the Prime Rate or the Federal Funds Rate shall be
effective on the effective date of such change in the Prime Rate or the Federal
Funds Rate, respectively.
"Base Rate Loan" shall mean any Loan bearing interest at a rate
determined by reference to the Base Rate.
"Benefit Plan" shall mean a defined benefit plan as defined in Section
3(35) of ERISA (other than a Multiemployer Plan) in respect of which any
Borrower, any Subsidiary or any ERISA Affiliate is, or within the immediately
preceding six (6) years was, an "employer" as defined in Section 3(5) of ERISA.
"Borrower" shall have the meaning given to such term in the preamble of
this Credit Agreement.
"Borrowing Base" shall mean the following amount (the "Borrowing
Base"), calculated as follows:
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(1) an amount equal to eighty-five percent (85%) of
Eligible Accounts Receivable; plus
(2) an amount equal to the lesser of (i) the product of the
Eligible Inventory multiplied by Applicable Inventory Advance Rate (as
hereinafter defined), or (ii) Fifty Million Dollars ($50,000,000);
where "Applicable Inventory Advance Rate" means (i) fifty-five percent
(55%) for Non-Qualified Inventory (as hereinafter defined) and (ii)
seventy percent (70%) for Qualified Inventory (as hereinafter defined);
and where (i) "Qualified Inventory" means Eligible Inventory meeting
the following conditions: (1) it is situated at an ISA Site pursuant to
an existing ISA which is then in effect with a Customer whose credit
quality has been approved by the Administrative Agent in its
commercially reasonable judgment; (2) Acknowledgment Agreements in
regard to such Inventory in form satisfactory to the Administrative
Agent have been duly executed and are then in effect, and (3) the ISA
or Customer Agreement contains "buyback" or "buyout" provisions with
respect to such Inventory satisfactory to the Administrative Agent; and
(iii) "Non-Qualified Inventory" means any Eligible Inventory except
Qualified Inventory, including any Eligible Inventory at any ISA Site
which fails to meet any one of the foregoing criteria for "Qualified
Inventory"; minus
(3) reserves in respect of Eligible Accounts Receivable and
Eligible Inventory consistent with the definitions thereof, and such
other reserves as may be established by the Administrative Agent from
time to time in its commercially reasonable judgment.
"Borrowing Base Certificate" shall have the meaning given to such term
in Section 7.1(e).
"Business Day" shall mean any day other than a Saturday, a Sunday, a
legal holiday or a day on which banking institutions are authorized or required
by law or other governmental action to close in Charlotte, North Carolina,
Atlanta, Georgia or New York, New York; provided, however, that, in the case of
Eurodollar Loans, such day is also a day on which dealings between banks are
carried on in U.S. dollar deposits in the London interbank market.
"Capital Lease" shall mean, as applied to any Person, any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
accordance with GAAP, is or should be accounted for as a capital lease on the
balance sheet of that Person.
"Capital Stock" shall mean (i) in the case of a corporation, capital
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of capital stock, (iii) in the case of a partnership, partnership
interests (whether general or limited), (iv) in the case of a limited liability
company, membership interests and (v) any other equity interest or participation
that confers on a Person the right to receive a share of the profits and losses
of, or distributions of assets of, the issuing Person.
"Cash Equivalents" shall mean, as to any Person, (i) securities issued
or directly and fully guaranteed or insured by the United States or any agency
or instrumentality thereof (provided
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that the full faith and credit of the United States is pledged in support
thereof) having maturities of not more than one (1) year from the date of
acquisition, (ii) time deposits or certificates of deposit of any commercial
bank incorporated under the laws of the United States or any state thereof, of
recognized standing having capital and unimpaired surplus in excess of
$1,000,000,000 and whose short-term commercial paper rating at the time of
acquisition is at least A-1 or the equivalent thereof by Standard & Poor's
Corporation or at least P-1 or the equivalent thereof by ▇▇▇▇▇'▇ Investors
Services, Inc. (any such bank, an "Approved Bank"), with such deposits or
certificates having maturities of not more than one (1) year from the date of
acquisition, (iii) repurchase obligations with a term of not more than seven (7)
days for underlying securities of the types described in clauses (i) and (ii)
above entered into with any Approved Bank, (iv) commercial paper or finance
company paper issued by any Person incorporated under the laws of the United
States or any state thereof and rated at least A-1 or the equivalent thereof by
Standard & Poor's Corporation or at least P-1 or the equivalent thereof by
▇▇▇▇▇'▇ Investors Service, Inc., and in each case maturing not more than one
year after the date of acquisition, and (v) investments in money market funds
that are registered under the Investment Company Act of 1940, as amended, which
have net assets of at least $1,000,000,000 and at least eighty-five percent
(85%) of whose assets consist of securities and other obligations of the type
described in clauses (i) through (iv) above. All such Cash Equivalents must be
denominated solely for payment in Dollars.
"Casualty Loss" shall have the meaning given to such term in Section
7.10.
"Change of Control" shall mean the occurrence of either of the
following: (i) any Person (or group of Persons acting in concert), not in
Control of the Borrower on the Closing Date shall acquire Control of the
Borrower; or (ii) during any period of twelve (12) consecutive calendar months,
individuals who were directors of the Borrower on the first day of such period
shall cease to constitute a majority of the board of directors of the Borrower
other than because of the replacement as a result of death or disability of one
or more such directors.
"Closing" shall mean the consummation of the making of the initial Loan
by the Lenders to the Borrower under this Credit Agreement.
"Closing Date" shall mean the date on which the Closing occurs.
"Collateral" shall mean any and all assets and rights and interests in
or to property of the Obligors pledged from time to time as security for the
Obligations pursuant to the Security Documents, whether now owned or hereafter
acquired, including, without limitation, (i) all Accounts, Inventory and
Equipment of each Obligor and (ii) all Pledged Stock and all Proceeds thereof
pledged pursuant to the Pledge Agreement.
"Commitment" means the Revolving Credit Commitment of each Lender, the
Swingline Commitment of the Swingline Lender and the Letter of Credit Commitment
of the Issuing Bank, or each, as appropriate.
-7-
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"Consolidated" or "consolidated" with reference to any term defined
herein, shall mean that term as applied to the accounts of the Borrower and all
of its consolidated Subsidiaries, consolidated in accordance with GAAP.
"Consolidated Capital Expenditures" shall mean, for any applicable
period of computation, an amount equal to the consolidated aggregate
expenditures of the Borrower and its consolidated Subsidiaries during such
fiscal period for the acquisition (including the acquisition by capitalized
lease) or improvement of capital assets, as determined in accordance with GAAP.
"Consolidated Cash Taxes" shall mean, for any applicable period of
computation, the aggregate of all taxes of the Borrower and its consolidated
Subsidiaries on a consolidated basis determined in accordance with applicable
law and GAAP applied on a consistent basis, to the extent the same are paid in
cash during such period. The applicable period of computation shall be for the
four (4) consecutive fiscal quarters of the Borrower ending as of the date of
determination.
"Consolidated EBITDA" shall mean Consolidated Net Income plus to the
extent the following items are deducted in calculating Consolidated Net Income,
(i) interest expense, (ii) income taxes, and (iii) depreciation, amortization
and other non-cash charges. The applicable period of determination shall be for
the four (4) consecutive fiscal quarters of the Borrower ending as of the date
of computation. Notwithstanding the foregoing, however, Consolidated EBITDA
shall be computed exclusive of the ERP Lease Accounting Adjustment.
"Consolidated ERP Lease Expense" shall, for any applicable period of
computation, for the Borrower and its consolidated Subsidiaries, rent expense
incurred in respect of ERP Leases during such period, determined in accordance
with GAAP.
"Consolidated Fixed Charges" shall mean, for any applicable period of
computation, without duplication, the sum of (i) all Consolidated Interest
Expense for the applicable period plus (ii) Consolidated Scheduled Funded Debt
Payments made during the applicable period plus (iv) Consolidated ERP Lease
Expense for the applicable period, plus (v) cash income taxes, plus (vi)
Restricted Payments paid in cash by the Borrower during the applicable period.
The applicable period of computation shall be for the four (4) consecutive
fiscal quarters of the Borrower ending as of the date of determination.
"Consolidated Funded Debt" shall mean, as of the date of determination,
all Funded Indebtedness of the Borrower and its consolidated Subsidiaries,
determined on a consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" shall mean, for any applicable period
of computation, interest expense, net of interest income, in each case of the
Borrower and its consolidated Subsidiaries for such period, as determined in
accordance with GAAP.
"Consolidated Net Income" shall mean, for any applicable period of
computation, the consolidated net income (or net deficit) of the Borrower and
its consolidated Subsidiaries for any period, after deduction of all expenses,
taxes and other proper charges, all as determined in accordance with GAAP.
-8-
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"Consolidated Scheduled Funded Debt Payments" shall mean, as of the end
of each fiscal quarter of the Borrower and its consolidated Subsidiaries on a
consolidated basis, the sum of all scheduled payments of principal on
Consolidated Funded Debt for the applicable period ending on such date
(including the principal component of payments due on Capital Leases, but
specifically excluding any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product during the
applicable period ending on such date).
"Consolidated Tangible Net Worth" shall mean the sum of (i) total
shareholders' equity of the Borrower and its consolidated Subsidiaries on any
fiscal quarter end, as determined in accordance with GAAP, minus (without
duplication): (1) all intangible assets, including goodwill, (2) any surplus
resulting from the write-up of any assets; (3) any deferred assets; and (4) any
unamortized debt discount and expense.
"Contractual Obligations" shall mean, with respect to any Person, any
term or provision of any securities issued by such Person, or any indenture,
mortgage, deed of trust, contract, undertaking, document, instrument or other
agreement to which such Person is a party or by which it or any of its
properties is bound or to which it or any of its properties is subject.
"Control" and its correlative components, "Controlled" and
"Controlling" shall mean the possession, directly or indirectly, of the power to
(i) vote twenty percent (20%) or more of the securities having ordinary voting
power for the election of directors (or similar governing board) of such Person,
or (ii) direct or cause the direction of management and policies of a business,
whether through the ownership of voting securities, by contract or otherwise and
either alone or in conjunction with others or any group.
"Credit Agreement" shall mean this credit agreement, dated as of the
date hereof, as the same may be modified, amended, extended, restated or
supplemented from time to time; together with all exhibits and schedules
thereto.
"Credit Documents" shall mean, collectively, this Credit Agreement, the
Notes, the Letter of Credit Documents, the Security Documents and all other
documents, agreements, instruments, opinions and certificates executed and
delivered by any Obligor in connection herewith or therewith, as the same may be
modified, amended, extended, restated or supplemented from time to time.
"Customer" shall mean a Person party with an Obligor to an ISA.
"Customer Agreement" shall mean a Customer Waiver and Consent
Agreement, substantially in the form of Exhibit B hereto (or such other form as
shall be acceptable to the Administrative Agent in its commercially reasonable
judgment), between a Customer and the Administrative Agent.
"Default" shall mean an event, condition or default which, with the
giving of notice, the passage of time or both, would become an Event of Default.
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"Default Rate" shall have the meaning given to such term in Section
4.2.
"Defaulting Lender" shall have the meaning given to such term in
Section 2.1(d)(iii).
"DOL" shall mean the U.S. Department of Labor and any successor
department or agency.
"Dollars" and "$" shall mean dollars in lawful currency of the United
States of America.
"Domestic Subsidiaries" shall mean, with respect to any Person, any
Subsidiary of such Person which is incorporated or organized under the laws of
the United States, any State of the United States or the District of Columbia.
"Eligible Accounts Receivable" shall mean the aggregate face amount of
the Obligors' Accounts that conform to the warranties contained herein and at
all times continue to be acceptable to the Administrative Agent in its
commercially reasonable judgment, less the aggregate amount of all returns,
discounts, claims, credits, charges (including warehousemen's charges) and
allowances of any nature (whether issued, owing, granted or outstanding);
provided, however, that, subject to the succeeding paragraph hereof, no Account
shall be deemed to be an Eligible Account Receivable if:
(i) it arises out of a sale or lease made by any Obligor
to an Affiliate; or
(ii) the Account is unpaid more than ninety (90) days
after the original invoice date; or
(iii) the invoice for such Account provides that payment is
due more than sixty (60) days from the date of such invoice.
(iv) the Account is from the same account debtor (or any
affiliate thereof) and fifty percent (50%) or more, in face amount, of
other Accounts from such account debtor (or any affiliate thereof) are
unpaid more than ninety (90) days after the original invoice date; or
(v) the amount of the Account, when aggregated with all
other Accounts of the same account debtor, exceeds fifteen percent
(15%) in face value of all Eligible Accounts Receivable of the Obligors
then outstanding, to the extent of such excess; or
(vi) (A) the account debtor is also a creditor of any Obligor,
to the extent of the amount owed by such Obligor to the account debtor,
(B) the account debtor has disputed its liability on, or the account
debtor has made any claim with respect to, such Account or any other
Account due from such account debtor to such Obligor, which has not
been resolved, to the extent of the amount of such dispute or claim,
(C) the Account otherwise is or may become subject to any right of
setoff by the account debtor, to the extent of the amount of such
setoff; or
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(vii) the Account is owing by an account debtor that has
commenced a voluntary case under the federal bankruptcy laws, as now
constituted or hereafter amended, or made an assignment for the benefit
of creditors, or if a decree or order for relief has been entered by a
court having jurisdiction in the premises in respect to such account
debtor in an involuntary case under the federal bankruptcy laws, as now
constituted or hereafter amended, or if any other petition or other
application for relief under the federal bankruptcy laws has been filed
by or against the account debtor, or if such account debtor has failed,
suspended business, ceased to be solvent, or consented to or suffered a
receiver, trustee, liquidator or custodian to be appointed for it or
for all or a significant portion of its assets or affairs; or
(viii) the sale is to an account debtor outside the
continental United States, unless the sale is (A) on letter of credit,
guaranty or acceptance terms, or subject to credit insurance, in each
case acceptable to the Administrative Agent in its commercially
reasonable judgment, or (B) otherwise approved by and acceptable to the
Administrative Agent in its commercially reasonable judgment; or
(ix) the sale to the account debtor is on a ▇▇▇▇-and-hold,
guaranteed sale, sale-and-return, sale on approval or consignment basis
or made pursuant to any other written agreement providing for
repurchase or return; or
(x) the Administrative Agent believes, in its
commercially reasonable judgment, that collection of such Account is
insecure or that such Account may not be paid by reason of the account
debtor's financial inability to pay; or
(xi) the account debtor is the United States of America or
any department, agency or instrumentality thereof, unless the
applicable Borrower duly assigns its rights to payment of such Account
to the Administrative Agent pursuant to the Assignment of Claims Act of
1940, as amended (31 U.S.C. ss. 3727 et seq.); or
(xii) the goods giving rise to such Account have not been
shipped and delivered to and accepted by the account debtor or its
designee or the services giving rise to such Account have not been
performed by or on behalf of the applicable Borrower and accepted by
the account debtor or its designee or the Account otherwise does not
represent a final sale; or
(xiii) the Accounts owing by a particular account debtor
exceed a credit limit as to that account debtor determined by the
Administrative Agent, in its commercially reasonable judgment, to the
extent such Accounts owing by the particular account debtor exceed such
limit; or
(xiv) the Administrative Agent does not have a first
priority, perfected security interest in the Account; or
(xv) the Administrative Agent, in the exercise of its
commercially reasonable judgment, determines it to be ineligible.
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In addition to the foregoing, Eligible Accounts Receivable shall
include such Accounts as the Borrower shall request and that the Administrative
Agent approves in advance, in writing and in its commercially reasonable
judgment.
"Eligible Inventory" shall mean (i) the aggregate gross amount of each
Obligor's Inventory consisting of raw materials and finished goods, valued at
the lower of cost (on a FIFO basis) or market, which (A) is owned solely by such
Obligor and with respect to which such Obligor has good, valid and marketable
title, (B) is subject to a valid, enforceable and first priority Lien in favor
of Administrative Agent; (C) is located in the United States; and (D) is not
obsolete or slow moving and for which a markdown reserve has not been made, and
which otherwise conforms to the warranties contained herein and which at all
times continues to be acceptable to the Administrative Agent in its commercially
reasonable judgment, (ii) less Inventory consisting of supplies, (iii) less
markdown reserves, (iv) less any goods returned or rejected by such Obligor's
customers for which a credit has not yet been issued, (v) less goods in transit
to third parties, (vi) less damaged Inventory; (vii) less a reserve equal to the
amount of all sums owed or owing by such Obligor to any of those vendors holding
purchase money Liens on any Inventory of such Obligor on the Closing Date, as
more particularly described in Schedule 1.1(C) attached hereto, effective
beginning ninety (90) days after the Closing Date, unless, within such period,
Borrower has obtained an agreement of such vendor (a "Subordinating Vendor")
that its Lien on such Inventory shall be subordinate to the Lien of the
Administrative Agent thereon, in a form and substance satisfactory to the
Administrative Agent in its commercially reasonable judgment (such agreements
herein called "Vendor Subordination Agreements"); provided, however, to the
extent that the sums owing to all such Subordinating Vendors at any time or from
time to time exceed Two Million Dollars ($2,000,000), the Administrative Agent
may impose additional reserves hereunder equal to the amount of such excess,
notwithstanding that such Subordinating Vendors shall have executed Vendor
Subordination Agreements; (viii) less any reserves required by the
Administrative Agent in its commercially reasonable judgment for special order
goods and market value declines, (ix) less any Inventory which is held by any
Obligor pursuant to consignment, sale or return, sale on approval or similar
arrangement, and (x) less any Inventory that the Administrative Agent determines
in its commercially reasonable judgment to be ineligible. Without limitation of
the foregoing, to the extent that any Inventory is at any time situated on real
property that is not owned by an Obligor, including, for this purpose any real
property (A) rented or leased by an Obligor from a third party, including a
Customer or the landlord of a Customer, (B) owned and operated by a warehouseman
for use by an Obligor (among others), (C) owned and operated by any filler,
processor, packer or finisher of Inventory (the foregoing called, collectively,
"Third Party Property"), then, the following special eligibility rules shall
apply: (i) as to any Inventory located at Third Party Property on the Closing
Date, such Inventory will become ineligible hereunder ninety (90) days after the
Closing Date unless, within such period, either (A) Borrower has obtained
Acknowledgement Agreements, in form and substance satisfactory in the
commercially judgment of the Administrative Agent in regard thereto, and, to the
extent any such Inventory is on consignment, such Obligor has obtained the
"consignment notice" UCC financing statements referenced Section 5(h) of the
Security Agreement in regard thereto; or, (B) in lieu of the foregoing, the
Administrative Agent has imposed reserves on borrowing availability sufficient,
in the commercially reasonable judgment of the Administrative Agent, to protect
the interests of the Lenders in regard thereto (the foregoing called "Inventory
Protective Measures"); and (ii) as to any Inventory which becomes located at
Third Party Property
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subsequent to the Closing Date pursuant to an arrangement with a landlord,
Customer, warehouseman, filler, processor, packer or finisher not in privity of
contract with an Obligor on the Closing Date, such Inventory shall be ineligible
without benefit of any grace period subject to any Inventory Protective Measures
then or thereafter being obtained or implemented. In addition to the foregoing,
Eligible Inventory shall include such items of such Obligor's Inventory as such
Obligor shall request and that the Administrative Agent approves in advance, in
writing and in its commercially reasonable judgment.
"Equipment" shall mean all of each Obligor's present and hereafter
acquired machinery, machine tools, motors, equipment, furniture, furnishings,
fixtures, vehicles (including motor vehicles and trailers not subject to a
certificate of title), tools, parts, goods (other than consumer goods, farm
products, or Inventory), wherever located, including, (a) any interest of an
Obligor in any of the foregoing, and (b) all attachments, accessories,
accessions, replacements, substitutions, additions and improvements to any of
the foregoing.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, and any successor statute.
"ERISA Affiliate" shall mean any (i) corporation which is or was at any
time a member of the same controlled group of corporations (within the meaning
of Section 414(b) of the Internal Revenue Code) as the Obligors or any
Subsidiary; (ii) partnership or other trade or business (whether or not
incorporated) at any time under common control (within the meaning of Section
414(c) of the Internal Revenue Code) with the Obligors or any Subsidiary; and
(iii) member of the same affiliated service group (within the meaning of Section
414(m) of the Internal Revenue Code) as the Borrower or any Subsidiary, any
corporation described in clause (i) above, or any partnership or trade or
business described in clause (ii) above.
"ERP Leases" shall mean those operating leases of the Obligors,
existing on the Closing Date, and identified to the Enterprise Resource Planning
System, which leases are listed on Schedule 1.1(E).
"ERP Lease Accounting Adjustment" shall mean the accounting adjustment;
i.e., charge against earnings, of up to Fourteen Million Seven Hundred Thousand
Dollars ($14,700,000), to be made by the Borrower in the fourth fiscal quarter
of its 2000 fiscal year, made in accordance with GAAP.
"Eurodollar Loan" shall mean a Loan bearing interest based at a rate
determined by reference to the Eurodollar Rate.
"Eurodollar Rate" shall mean, for the Interest Period for each
Eurodollar Loan comprising part of the same borrowing (including conversions,
extensions and renewals), a per annum interest rate determined pursuant to the
following formula:
Eurodollar Rate = London Interbank Offered Rate
---------------------------------------
1 - Eurodollar Reserve Percentage
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"Eurodollar Reserve Percentage" shall mean for any day, that percentage
(expressed as a decimal) which is in effect from time to time under Regulation D
of the Board of Governors of the Federal Reserve System (or any successor), as
such regulation may be amended from time to time or any successor regulation, as
the maximum reserve requirement (including, without limitation, any basic,
supplemental, emergency, special, or marginal reserves) applicable with respect
to Eurocurrency liabilities as that term is defined in Regulation D (or against
any other category of liabilities that includes deposits by reference to which
the interest rate of Eurodollar Loans is determined), whether or not any Lender
has any Eurocurrency liabilities subject to such reserve requirement at that
time. Eurodollar Loans shall be deemed to constitute Eurocurrency liabilities
and as such shall be deemed subject to reserve requirements without benefits of
credits for proration, exceptions or offsets that may be available from time to
time to a Lender. The Eurodollar Rate shall be adjusted automatically on and as
of the effective date of any change in the Eurodollar Reserve Percentage.
"Event of Default" shall have the meaning provided for in Article XI.
"Excess Availability", as of any day, shall mean that amount by which
(A) the lesser of (1) the Revolving Credit Committed Amount on such day or (2)
the Borrowing Base, as then most recently reported pursuant to Section 7.1(e),
exceeds (B) the total amount of Loans and Letter of Credit Obligations
outstanding on such date.
"Excluded Taxes" shall have the meaning given to such term in Section
2.6.
"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 members 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 New York, or, if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three (3) Federal Funds
brokers of recognized standing selected by it.
"Fee Letter" shall mean the letter agreement, dated December 5, 2000,
by and between the Administrative Agent and the Borrower regarding the fees to
be paid by the Borrower to the Administrative Agent, as it may be supplemented,
modified or amended from time to time.
"Fees" shall mean, collectively, the Administrative Agent's Fees, the
Lenders' Fees, the Unused Line Fee, the Letter of Credit Fees and the Issuing
Bank Fees payable hereunder.
"Financials" shall have the meaning given to such term in Section 6.6.
"First Union" shall mean First Union National Bank, having its
principal office in Charlotte, North Carolina, and its successors and permitted
assigns.
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22
"Fixed Charge Coverage Ratio" shall mean, as of the last day of each
fiscal quarter of the Borrower, the ratio of (i)(A) Consolidated EBITDA minus
(B) Unfinanced Capital Expenditures (computed for the four fiscal quarterly
periods then ending) to (ii) Consolidated Fixed Charges.
"Foreign Lender" shall have the meaning given to such term in Section
2.6(a).
"First Union Account" shall mean an account established and maintained
in the name of the Administrative Agent at First Union, for the benefit of the
Lenders, in respect of the Borrower for purposes of this Agreement.
"Foreign Subsidiary" shall mean, with respect to any Person, any
Subsidiary of such Person which is not a Domestic Subsidiary.
"Funded Indebtedness" shall mean, with respect to any Person, without
duplication, (i)(a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property purchased by such Person (other than customary
reservations or retentions of title under agreements with suppliers entered into
in the ordinary course of business), (d) all obligations of such Person issued
or assumed as the deferred purchase price of property or services purchased by
such Person (other than trade debt incurred in the ordinary course of business
and due within six months of the incurrence thereof) which would appear as
liabilities on a balance sheet of such Person, (e) the principal portion of all
obligations of such Person under Capital Leases, (f) the maximum amount of all
letters of credit issued or bankers' acceptances facilities created for the
account of such Person and, without duplication, all drafts drawn thereunder (to
the extent unreimbursed) and (g) all preferred Capital Stock issued by such
Person and required by the terms thereof to be redeemed, or for which mandatory
sinking fund payments are due, by a fixed date, and (ii) all Indebtedness of
another Person of the type referred to in clause (i) above secured by (or for
which the holder of such Funded Indebtedness has an existing right, contingent
or otherwise, to be secured by) any Lien on, or payable out of the proceeds of
production from, property owned or acquired by such Person, whether or not the
obligations secured thereby have been assumed, (iii) all guaranties of such
Person with respect to Indebtedness of the type referred to in clause (i) above
of another Person and (iv) Indebtedness of the type referred to in clause (i)
above of any partnership or unincorporated joint venture in which such Person is
legally obligated or has a reasonable expectation of being liable with respect
thereto. "Funded Indebtedness" shall not be deemed to include, however, either
(a) the principal portion of any obligations of such Person under off-balance
sheet financing, and (b) any insurance premium financing obligations.
"Funding Bank" shall have the meaning given to such term in Section
4.7.
"GAAP" shall mean generally accepted accounting principles in the
United States of America, as in effect on the date hereof and, in respect of the
Obligors, applied on a consistent basis with the Financials.
"Governmental Authority" shall mean any federal, state, local or
foreign court or governmental agency, authority, instrumentality or regulatory
body.
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"Hedging Agreements" shall mean any Interest Rate Protection Agreement
or other interest rate protection agreement, foreign currency exchange
agreement, commodity purchase or option agreement or other interest or exchange
rate or commodity price hedging agreements
"Highest Lawful Rate" shall mean, at any given time during which any
Obligations shall be outstanding hereunder, the maximum nonusurious interest
rate, if any, that at any time or from time to time may be contracted for,
taken, reserved, charged or received on the indebtedness under this Credit
Agreement, under the laws of the State of Georgia (or the law of any other
jurisdiction whose laws may be mandatorily applicable notwithstanding other
provisions of this Credit Agreement and the other Credit Documents), or under
applicable federal laws which may presently or hereafter be in effect and which
allow a higher maximum nonusurious interest rate than under New York or such
other jurisdiction's law, in any case after taking into account, to the extent
permitted by applicable law, any and all relevant payments or charges under this
Credit Agreement and any other Credit Documents executed in connection herewith,
and any available exemptions, exceptions and exclusions.
"Indebtedness" shall mean, with respect to any Person, without
duplication, (a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property purchased by such Person (other than customary
reservations or retentions of title under agreements with suppliers entered into
in the ordinary course of business), (d) all obligations of such Person issued
or assumed as the deferred purchase price of property or services purchased by
such Person (other than trade debt incurred in the ordinary course of business
and due within six months of the incurrence thereof) which would appear as
liabilities on a balance sheet of such Person, (e) all obligations of such
Person under take-or-pay or similar arrangements or under commodities
agreements, (f) all Indebtedness of others secured by (or for which the holder
of such Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien on, or payable out of the proceeds of production from,
property owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed, (g) all guaranties of such Person with
respect to Indebtedness of the type referred in this definition of another
Person, (h) the principal portion of all obligations of such Person under
Capital Leases, (i) all obligations of such Person under Interest Rate
Protection Agreements, (j) the maximum amount of all letters of credit issued or
bankers' acceptances facilities created for the account of such Person and,
without duplication, all drafts drawn thereunder (to the extent unreimbursed),
(k) all preferred Capital Stock issued by such Person and required by the terms
thereof to be redeemed, or for which mandatory sinking fund payments are due, by
a fixed date, (l) the principal portion of all obligations of such Person under
off-balance sheet financing arrangements and (m) the Indebtedness of any
partnership or unincorporated joint venture in which such Person is a general
partner or a joint venturer in which such Person is legally obligated or has a
reasonable expectation of being liable with respect thereto.
"Independent Accountant" shall mean a firm of independent public
accountants of nationally recognized standing selected by the Board of Directors
of the Borrower, which is
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"independent" as that term is defined in Rule 2-01 of Regulation S-X promulgated
by the Securities and Exchange Commission.
"Interest Period" shall mean, as to Eurodollar Loans, a period of one
month, two months, three months or six months, as selected by the Borrower,
commencing on the date of the borrowing (including continuations and conversions
thereof); provided, however, (i) if any Interest Period would end on a day which
is not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day (except that where the next succeeding Business Day
falls in the next succeeding calendar month, then on the next preceding Business
Day), (ii) no Interest Period shall extend beyond the Maturity Date, (iii) any
Interest Period with respect to a Eurodollar Loan that begins on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of the relevant calendar month at the end of
such Interest Period.
"Interest Rate Protection Agreement" shall mean any interest rate
protection agreement, foreign currency exchange agreement, commodity purchase or
option agreement or other interest or exchange rate or commodity price hedging
agreements between any Borrower and any Lender, or any affiliate of a Lender.
"Internal Revenue" shall mean the Internal Revenue Service and any
successor agency.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986,
as amended from time to time, and any successor statute thereto and all rules
and regulations promulgated thereunder.
"Inventory" shall mean all of each Obligor's inventory, including
without limitation, (i) all raw materials, work in process, finished goods,
parts, components, assemblies, supplies and materials sold, used or consumed in
such Obligor's business; (ii) all goods, wares and merchandise, finished or
unfinished, held for sale or lease or leased or furnished or to be furnished
under contracts of service; and (iii) all goods returned to or repossessed by
such Obligor.
"Investment" in any Person shall mean (i) the acquisition (whether for
cash, property, services, assumption of Indebtedness, securities or otherwise,
but exclusive of the acquisition of inventory, supplies, equipment and other
property or assets used or consumed in the ordinary course of business of the
applicable Obligor or its Subsidiary and Consolidated Capital Expenditures not
otherwise prohibited hereunder) of assets, shares of Capital Stock, bonds,
notes, debentures, partnership interests, joint ventures or other ownership
interests or other securities of such Person, (ii) any deposit (other than
deposits constituting a Permitted Lien) with, or advance, loan or other
extension of credit (other than sales of inventory on credit in the ordinary
course of business and payable or dischargeable in accordance with customary
trade terms and sales on credit of the type described in clauses (c) or (d) of
Section 9.3) to, such Person or (iii) any other capital contribution to or
investment in such Person, including, without limitation, any obligation
incurred for the benefit of such Person. In determining the aggregate amount of
Investments outstanding at any particular time, (a) the amount of any Investment
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represented by a guaranty shall be taken at not less than the maximum principal
amount of the obligations guaranteed and still outstanding; (b) there shall be
deducted in respect of each such Investment any amount received as a return of
capital (but only by repurchase, redemption, retirement, repayment, liquidating
dividend or liquidating distribution); (c) there shall not be deducted in
respect of any Investment any amounts received as earnings on such Investment,
whether as dividends, interest or otherwise; and (d there shall not be deducted
from or added to the aggregate amount of Investments any decrease or increases,
as the case may be, in the market value thereof. Without limitation of the
foregoing, the term "Investments" shall include Acquisitions.
"ISA" shall mean an integrated supply agreement between an Obligor, as
supplier, and a Customer, as recipient, of certain goods and services.
"ISA Site" means the location of a Customer party to an ISA with an
Obligor at which Inventory identified to such ISA is located.
"Issuing Bank" shall mean First Union.
"Issuing Bank Fees" shall have the meaning given to such term in
Section 4.5(b).
"Landlord Agreement" shall mean a Landlord Waiver and Consent
Agreement, substantially in the form of Exhibit C (or such other form as shall
be acceptable to the Administrative Agent in its commercially reasonable
judgment), between an Obligor's landlord and the Administrative Agent,
acknowledging and agreeing, among other things, (i) that any Liens of such
Landlord on any of the property of such Obligor or any Subsidiary shall be
subordinate to the Liens of the Administrative Agent thereon, on terms and
conditions acceptable to the Administrative Agent, in its commercially
reasonable judgment, and (ii) to permit the Administrative Agent access to the
property for the purposes of exercising its remedies under the Security
Agreement. The term "Landlord Agreement," when used in respect of fillers,
processors, packers or finishers, shall mean a Landlord Waiver and Consent
Agreement augmented as appropriate to accommodate the special and more limited
interests of such third parties.
"Leases" shall have the meaning given to such term in Section 6.19.
"Lender" shall have the meaning given to such term in the preamble of
this Credit Agreement. The term "Lender" shall also include the Swingline
Lender, as appropriate.
"Lenders' Fees" shall mean the non-refundable fees payable to each of
the Lenders as set forth in each of the Lender's respective fee letters with the
Administrative Agent.
"Letter of Credit Committed Amount" shall have the meaning given to
such term in Section 3.1.
"Letter of Credit Documents" shall mean, with respect to any Letter of
Credit, such Letter of Credit, any amendments thereto, any documents delivered
in connection therewith, any
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application therefor, and any agreements, instruments, guarantees or other
documents (whether general in application or applicable only to such Letter of
Credit) governing or providing for (i) the rights and obligations of the parties
concerned or at risk or (ii) any collateral security for such obligations.
"Letter of Credit Fee" shall have the meaning given to such term in
Section 4.5.
"Letter of Credit Obligations" shall mean, at any time, the sum of (i)
the aggregate undrawn amount of all Letters of Credit outstanding at such time,
plus (ii) the aggregate amount of all drawings under Letters of Credit for which
the Issuing Bank has not at such time been reimbursed, plus (iii) without
duplication, the aggregate amount of all payments made by each Lender to the
Issuing Bank with respect to such Lender's participation in Letters of Credit as
provided in Section 3.3 for which the Borrower has not at such time reimbursed
the Lenders, whether by way of a Revolving Loan or otherwise. Notwithstanding
the foregoing, the term "Letter of Credit Obligations," as and when used in this
Credit Agreement for purposes of determining compliance with borrowing
limitations, shall mean, for trade Letters of Credit only, an amount equal to
one hundred percent (100%) of such Letter of Credit Obligations, minus the
product of fifty-five percent (55%) multiplied by the cost of the costs being
purchased with a drawing under such letter of credit, plus duty, freight and
costs of transport relative to such goods.
"Letters of Credit" shall mean all letters of credit (whether
documentary or stand-by and whether for the purchase of inventory, equipment or
otherwise) issued by the Issuing Bank for the account of the Borrower pursuant
to this Credit Agreement, and all amendments, renewals, extensions or
replacements thereof.
"Leverage Ratio" shall mean as of the last day of each fiscal quarter,
the ratio of (i) Consolidated Funded Debt to (ii) Consolidated EBITDA.
"Lien(s)" shall mean any lien, claim, charge, pledge, security
interest, deed of trust, mortgage, or other encumbrance.
"Loan" or "Loans" shall mean the Revolving Loans (or a portion of any
Revolving Loan), and the Swingline Loans, individually or collectively, as
appropriate.
"Lockbox" shall have the meaning given to such term in Section 2.3.
"Lockbox Account" shall have the meaning given to such term in Section
2.3.
"Lockbox Agreement" shall have the meaning given to such term in
Section 2.3.
"Lockbox Bank" shall have the meaning given to such term in Section
2.3.
"London Interbank Offered Rate" shall mean, with respect to any
Eurodollar Loan for the Interest Period applicable thereto, the rate of interest
per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing
on Telerate Page 3750 (or any successor page) as the
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London interbank offered rate for deposits in Dollars at approximately 11:00
A.M. (London time) two (2) Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period; provided, however, if more
than one (1) rate is specified on Telerate Page 3750, the applicable rate shall
be the arithmetic mean of all such rates. If, for any reason, such rate is not
available, the term "London Interbank Offered Rate" shall mean, with respect to
any Eurodollar Loan for the Interest Period applicable thereto, the rate of
interest per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
appearing on Reuters Screen LIBO Page as the London interbank offered rate for
deposits in Dollars at approximately 11:00 A.M. (London time) two (2) Business
Days prior to the first day of such Interest Period for a term comparable to
such Interest Period; provided, however, if more than one (1) rate is specified
on Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of
all such rates.
"Material Adverse Change" shall mean a material adverse change in (a)
the business, prospects, operations, results of operations, assets, liabilities
or condition (financial or otherwise) of the Borrower, individually, or the
Obligors, taken as a whole, (b) the Collateral, (c) the ability of the Borrower,
individually, or the Obligors, taken as a whole, to perform its or their
respective obligations under the Credit Documents, or (d) the rights and
remedies of the Lenders hereunder; in each case, as determined by the
Administrative Agent in its commercially reasonable judgment.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the business, prospects, operations, results of operations, assets, liabilities
or condition (financial or otherwise) of the Borrower, individually, or the
Obligors, taken as a whole, (b) the Collateral, (c) the ability of the Borrower,
individually, or the Obligors, taken as a whole, to perform its or their
respective obligations under the Credit Documents, or (d) the rights and
remedies of the Lenders hereunder; in each case, as determined by the
Administrative Agent in its commercially reasonable judgment.
"Maturity Date" shall mean March 31, 2004.
"Merchandise Returns" shall mean any of the products sold by the
Obligors or any of their Subsidiaries that are returned.
"Multiemployer Plan" shall mean a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA and (i) which is, or within the immediately
preceding six (6) years was, contributed to by any Obligor, any Subsidiary or
any ERISA Affiliate or (ii) with respect to which any Obligor or any Subsidiary
may incur any liability.
"Net Cash Proceeds" shall mean the aggregate cash proceeds received by
any Obligor in respect of any Asset Disposition, net of (a) direct costs
(including, without limitation, legal, accounting and investment banking fees,
and sales commissions) and (b) taxes paid or payable as a result thereof; it
being understood that "Net Cash Proceeds" shall include, without limitation, any
cash received upon the sale or other disposition of any non-cash consideration
received by an Obligor in any Asset Disposition.
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"Note" or "Notes" shall mean the Revolving Notes and the Swingline
Note, individually or collectively, as appropriate.
"Notice of Borrowing" shall have the meaning given to such term in
Section 2.1(d)(i).
"Notice of Extension/Conversion" shall have the meaning given to such
term in Section 2.9.
"Obligations" shall mean the Loans, any other loans and advances or
extensions of credit made or to be made by any Lender to any Obligor, or to
others for any Obligor's account in each case pursuant to the terms and
provisions of this Credit Agreement, together with interest thereon (including
interest which would be payable as post-petition interest in connection with any
bankruptcy or similar proceeding) and, including, without limitation, any
reimbursement obligation or indemnity of the Obligors on account of Letters of
Credit and all other Letter of Credit Obligations, and all indebtedness, fees,
liabilities and obligations which may at any time be owing by any Obligor to any
Lender in each case pursuant to this Credit Agreement or any other Credit
Document, whether now in existence or incurred by an Obligor from time to time
hereafter, whether unsecured or secured by pledge, Lien upon or security
interest in any of an Obligor's assets or property or the assets or property of
any other Person, whether such indebtedness is absolute or contingent, joint or
several, matured or unmatured, direct or indirect and whether such Obligor is
liable to such Lender for such indebtedness as principal, surety, endorser,
guarantor or otherwise. "Obligations" shall also include any other Indebtedness
owing to any Lender by any Obligor under this Credit Agreement and the other
Credit Documents, any Obligor's liability to any Lender pursuant to this Credit
Agreement as maker or endorser of any promissory note or other instrument for
the payment of money, any Borrower's liability to any Lender pursuant to this
Credit Agreement or any other Credit Document under any instrument of guaranty
or indemnity, or arising under any guaranty, endorsement or undertaking which
any Lender may make or issue to others for any such Obligor's account pursuant
to this Credit Agreement, including any accommodation extended with respect to
applications for Letters of Credit, and all liabilities and obligations owing
from any Borrower to any Lender, or any affiliate of a Lender, arising under
Interest Rate Protection Agreements entered into for the purpose of hedging
interest rate risk under this Credit Agreement and the other Credit Documents.
"Obligations" shall also include, to the extent not otherwise expressly provided
above and in any event, any indebtedness arising hereunder or under any Credit
Document to the Administrative Agent, the Swingline Lender or First Union,
individually.
"Obligor" and "Obligors" shall have the meaning given to such term in
the preamble of this Agreement.
"Other Taxes" shall have the meaning given to such term in Section
2.6(c).
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any
Person succeeding to the functions thereof.
"Permitted Indebtedness" shall mean:
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(i) Indebtedness to the Lenders with respect to the
Loans, the Letters of Credit or otherwise, pursuant to the Credit
Documents;
(ii) trade payables incurred in the ordinary course of an
Obligor's business;
(iii) purchase money Indebtedness (including Capital
Leases) hereafter incurred by the Obligors or any of their Subsidiaries
to finance the purchase of Equipment; provided that (A) the total of
all such Indebtedness for all such Persons, taken together, shall not
exceed an aggregate principal amount of Five Million Dollars
($5,000,000) at any one time outstanding (including any purchase money
Indebtedness incurred to finance Equipment existing on Closing Date and
referred to in clause (v) immediately below); (B) such Indebtedness
when incurred shall not exceed the purchase price of the Equipment so
financed; and (C) no such Indebtedness shall be refinanced for a
principal amount in excess of the principal balance outstanding thereon
at the time of such refinancing;
(iv) obligations of an Obligor in respect of Hedging
Agreements entered into in order to manage existing or anticipated
interest rate or exchange rate risks and not for speculative purposes;
(v) Indebtedness described on Schedule 1.1C attached
hereto and any refinancings of such Indebtedness; provided that the
aggregate principal amount of such Indebtedness is not increased, the
scheduled maturity dates of such Indebtedness are not shortened and
such refinancing is on terms and conditions no more restrictive than
the terms and conditions of the Indebtedness being refinanced;
(vi) Indebtedness acquired or incurred in connection with
any Approved Acquisition; and
(vii) other, unsecured Indebtedness, not otherwise
permitted in clauses (i) through (vi) above, not to exceed, however, in
aggregate amount outstanding at any one time, the sum of Two Million
Dollars ($2,000,000).
"Permitted Investments" shall mean:
(i) Cash Equivalents;
(ii) interest-bearing demand or time deposits (including
certificates of deposit) which are insured by the Federal Deposit
Insurance Corporation ("FDIC") or a similar federal insurance program;
provided, however, that the Borrower may, in the ordinary course of
their respective businesses, maintain in their disbursement accounts
from time to time amounts in excess of then applicable FDIC or other
program insurance limits;
(iii) Investments existing on the Closing Date and set
forth on Schedule 1.1D attached hereto;
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(iv) advances to officers, directors and employees for
expenses incurred or anticipated to be incurred in the ordinary course;
(v) loans and Investments by any Obligor in any other
Obligor;
(vi) investments (including debt obligations) received in
connection with the bankruptcy or reorganization of suppliers and
customers and in settlement of delinquent obligations of, and other
disputes with, customers and suppliers arising in the ordinary course
of business;
(vii) Approved Acquisitions; and
(viii) other investments, not described in clauses (i)
through (vii) above, which may be made at any time that no Default or
Event of Default exists, not to exceed, however, in aggregate amount
subsequent to the Closing Date, the sum of Five Hundred Thousand
Dollars ($500,000).
"Permitted Liens" shall mean:
(i) Liens granted to the Administrative Agent or the
Lenders by the Obligor pursuant to any Security Document;
(ii) Liens on fixed assets securing purchase money
Indebtedness (including Capital Leases) to the extent permitted under
Section 9.2, provided that any such Lien attaches to such assets
concurrently with or within thirty (30) days after the acquisition
thereof and only to the assets to be acquired or to other fixed assets
(but, in the latter case, any such Lien shall be subject and
subordinate to the Lien of the Administrative Agent thereon);
(iii) Liens of warehousemen, mechanics, materialmen,
workers, repairmen, fillers, packagers, processors, common carriers,
landlords and other similar Liens arising by operation of law or
otherwise, not waived in connection herewith, for amounts that are not
yet due and payable or which are being diligently contested in good
faith by the relevant Obligor by appropriate proceedings, provided that
in any such case an adequate reserve is being maintained by such
Obligor for the payment of same;
(iv) attachment or judgment Liens which individually or in
the aggregate would not result in an Event of Default;
(v) Liens for taxes, assessments or other governmental
charges not yet due and payable or which are being diligently contested
in good faith by an Obligor by appropriate proceedings, provided that
in any such case an adequate reserve is being maintained by such
Obligor for the payment of same in accordance with GAAP;
(vi) zoning ordinances, easements, covenants and other
customary restrictions on the use of real property and other title
exceptions that do not interfere in any material respect with the
ordinary course of business;
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(vii) deposits or pledges to secure obligations under
workmen's compensation, social security or similar laws, or under
unemployment insurance;
(viii) deposits or pledges to secure bids, tenders,
contracts (other than contracts for the payment of money), leases,
regulatory or statutory obligations, surety and appeal bonds and other
obligations of like nature arising in the ordinary course of business;
(ix) Liens on inventory securing purchase money
Indebtedness, to the extent existing on the Closing Date and disclosed
on Schedule 1.1C attached hereto;
(x) a Lien in favor of Bank One, N.A., consisting of cash
deposits aggregating Two Million Six Hundred Thousand Dollars
($2,600,000), approximately, securing certain letter of credit
reimbursement obligations of the Borrower being carried forward pending
the substitution therefor of Letters of Credit, which substitution
shall occur as soon as practicable after the Closing Date; and
(xi) other Liens (if any) listed on Schedule 1.1B attached
hereto.
"Person" shall mean any individual, sole proprietorship, partnership,
joint venture, limited liability company, trust, unincorporated organization,
association, corporation, institution, entity, party or government (including
any division, agency or department thereof), and, as applicable, the successors,
heirs and assigns of each.
"Plan" shall mean any employee benefit plan, program or arrangement,
whether oral or written, maintained or contributed to by any Obligor or any
Subsidiary, or with respect to which any Obligor or any such Subsidiary may
incur liability.
"Pledge Agreement" shall mean the Pledge Agreement, of even date
herewith, between the Administrative Agent and the Borrower, in the form
attached hereto as Exhibit D .
"Pledged Collateral" shall have the meaning given to such term in the
Pledge Agreement.
"Prime Rate" shall mean the rate which First Union announces from time
to time as its prime lending rate, as in effect from time to time. The Prime
Rate is a reference rate and does not necessarily represent the lowest or best
rate actually charged to any customer. First Union (and its affiliates) may make
commercial loans or other loans at rates of interest at, above or below the
Prime Rate.
"Proprietary Rights" shall have the meaning given to such term in
Section 6.17.
"Real Estate" shall mean any real property owned or leased by the
Borrower described in Schedule 6.19 attached hereto, together with all
Structures thereon.
"Reorganization" shall mean the reorganization of the corporate
structure of the Obligors pursuant to which (i) each of the Obligors other than
the Borrower, ▇▇▇▇▇▇ Bros. Inc., ▇.▇. ▇▇▇▇▇▇▇▇▇▇ Company, IDG - Mexico, Inc.,
the New England Group Industrial Distributors, Inc., Cardinal Machinery, Inc.,
and The Distribution Group, Inc., shall merge with and into The
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Distribution Group, Inc., and (ii) immediately thereafter, The Distribution
Group, Inc., shall elect to be a limited liability company organized under the
Georgia Limited Liability Company Act and shall change its name to "IDG USA,
LLC".
"Reportable Event" shall mean any of the events described in Section
4043 of ERISA and the regulations thereunder.
"Required Lenders" shall mean, at any time, Lenders which are then in
compliance with their obligations hereunder (as determined by the Administrative
Agent) and holding in the aggregate at least fifty-one percent (51%) of (i) the
Revolving Credit Commitments or (ii) if the Commitments have been terminated,
the outstanding Loans and participation interests (including the participation
interests of the Issuing Bank in any Letters of Credit).
"Restricted Payment" shall mean (i) any cash dividend or other cash
distribution, direct or indirect, on account of any shares of any class of
Capital Stock of any Obligor or any Subsidiary, as the case may be, now or
hereafter outstanding, (ii) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect, of any
shares of any class of Capital Stock of any Obligor or any Subsidiary now or
hereafter outstanding by such Obligor or any Subsidiary, as the case may be,
except for any redemption, retirement, sinking funds or similar payment payable
solely in such shares of that class of stock or in any class of stock junior to
that class, (iii) any cash payment made to redeem, purchase, repurchase or
retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire any shares of any class of Capital Stock of any Obligor
or any Subsidiary now or hereafter outstanding, or (iv) any payment to any
Affiliate of any Obligor, except to the extent otherwise expressly permitted in
this Credit Agreement.
"Retiree Health Plan" shall mean an "employee welfare benefit plan"
within the meaning of Section 3(1) of ERISA that provides benefits to persons
after termination of employment, other than as required by Section 601 of ERISA.
"Revolving Credit Commitment" shall mean, with respect to each Lender,
the commitment of such Lender to make its portion of the Revolving Loans in a
principal amount up to such Lender's Revolving Credit Commitment Percentage of
the Revolving Credit Committed Amount.
"Revolving Credit Commitment Percentage" shall mean, for any Lender,
the percentage identified as its Revolving Credit Commitment Percentage on
Schedule 1.1A, as such percentage may be modified in connection with any
assignment made in accordance with the provisions of Section 14.6
"Revolving Credit Committed Amount" shall mean the aggregate revolving
credit line extended by the Lenders to the Borrower for Revolving Loans,
Swingline Loans and Letters of Credit pursuant to and in accordance with the
terms of this Credit Agreement, in an amount up to One Hundred Million Dollars
($100,000,000), as such revolving credit line may be reduced from time to time
in accordance with Section 2.2(c).
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"Revolving Loans" shall have the meaning given to such term in Section
2.1(b) and shall include Revolving Loans made as Base Rate Loans and Revolving
Loans made as Eurodollar Loans.
"Revolving Notes" shall have the meaning given to such term in Section
2.1(c).
"Security Agreement" shall mean the Security Agreement, of even date
herewith, between the Administrative Agent and the Obligors, in the form
attached hereto as Exhibit E.
"Security Documents" shall mean, collectively, the Pledge Agreement,
the Security Agreement, any Acknowledgment Agreement and any Lockbox Agreement.
"Structures" shall mean all plants, offices, manufacturing facilities,
warehouses, administration buildings and related facilities of the Borrower
located on the Real Estate described on Schedule 6.19 attached hereto.
"Subsidiary" shall mean, as to any Person, (a) any corporation more
than fifty percent (50%) of whose Capital Stock of any class or classes having
by the terms thereof ordinary voting power to elect a majority of the directors
of such corporation (irrespective of whether or not at the time, any class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time owned by such Person directly
or indirectly through Subsidiaries and (b) any partnership, association, joint
venture or other entity in which such Person directly or indirectly through
Subsidiaries has more than a fifty percent (50%) interest in the total capital,
total income and/or total ownership interests of such entity at any time.
Without limitation of the foregoing, unless otherwise provided herein, the term
"Subsidiary" when used herein shall mean and refer to each Subsidiary of any
Obligor or each Obligor, as appropriate.
"Swingline Committed Amount" shall have the meaning given to such term
in Section 2.10.
"Swingline Commitment" shall mean the commitment of the Swingline
Lender to make Swingline Loans in up to the Swingline Committed Amount in
accordance with Section 2.10.
"Swingline Lender" shall mean First Union, acting in such capacity
pursuant to Section 2.10, or any successor to First Union acting in such
capacity.
"Swingline Loan" shall have the meaning given to such term in Section
2.10.
"Swingline Note" shall have the meaning given to such term in Section
2.10.
"Taxes" shall mean any federal, state, local or foreign income, sales,
use, transfer, payroll, personal, property, occupancy, franchise or other tax,
levy, impost, fee, imposition, assessment or similar charge, together with any
interest or penalties thereon.
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"Termination Event" shall mean (i) a Reportable Event with respect to
any Benefit Plan or Multiemployer Plan; (ii) the withdrawal of any Obligor, any
Subsidiary or any ERISA Affiliate from a Benefit Plan during a plan year in
which such entity was a "substantial employer" as defined in Section 4001(a)(2)
of ERISA; (iii) the providing of notice of intent to terminate a Benefit Plan
pursuant to Section 4041 of ERISA; (iv) the institution by the PBGC of
proceedings to terminate a Benefit Plan or Multiemployer Plan; (v) any event or
condition (a) which might constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Benefit Plan
or Multiemployer Plan, or (b) that may result in termination of a Multiemployer
Plan pursuant to Section 4041A of ERISA; or (vi) the partial or complete
withdrawal within the meaning of Sections 4203 and 4205 of ERISA, of any
Borrower, any Subsidiary or any ERISA Affiliate from a Multiemployer Plan.
"UCC" shall mean the Uniform Commercial Code as in effect from time to
time in the State of Georgia.
"Unfinanced Capital Expenditures" shall mean for any period capital
expenditures made during such period and not financed from the proceeds of
Funded Indebtedness (excluding the Loans).
"Unused Line Fee" shall mean the fee required to be paid to the
Administrative Agent for the benefit of the Lenders at the end of each calendar
month as partial compensation for extending the Revolving Credit Committed
Amount to the Borrower, and shall be determined by multiplying (i) the positive
difference, if any, between (A) the Revolving Credit Committed Amount in effect
at such time and (B) the average daily Loans of the Borrower and the Letter of
Credit Obligations outstanding during such calendar month, by (ii) the
Applicable Percentage then in effect for the number of days in said calendar
month.
"Voting Stock" shall mean, with respect to any Person, Capital Stock
issued by such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even though the right so to vote
has been suspended by the happening of such a contingency.
1.2 ACCOUNTING TERMS AND DETERMINATIONS.
Unless otherwise defined or specified herein, all accounting terms
shall be construed herein and all accounting determinations for purposes of
determining compliance with Article VIII hereof and otherwise to be made under
this Credit Agreement shall be made in accordance with GAAP applied on a basis
consistent in all material respects with the Financials. All financial
statements required to be delivered hereunder from and after the Closing Date
and all financial records shall be maintained in accordance with GAAP. If GAAP
shall change from the basis used in preparing the Financials, the certificates
required to be delivered pursuant to Section 7.1 demonstrating compliance with
the covenants contained herein shall include calculations setting forth the
adjustments necessary to demonstrate how the Borrower is in compliance with the
financial covenants based upon GAAP as in effect on the Closing Date. If the
Borrower shall change its method of inventory accounting, all calculations
necessary to determine compliance with the covenants contained herein shall be
made as if such method of inventory accounting had not been so changed.
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The Borrower shall deliver to the Administrative Agent and each Lender
at the same time as the delivery of any annual financial statements given in
accordance with the provisions of Section 7.1, (i) a description in reasonable
detail of any material change in the application of accounting principles
employed in the preparation of such financial statements from those applied in
the most recently preceding annual financial statements and (ii) a reasonable
estimate of the effect on the financial statements on account of such changes in
application.
1.3 OTHER DEFINITIONAL TERMS.
Terms not otherwise defined herein which are defined in the UCC shall
have the meanings given them in the UCC. The words "hereof", "herein" and
"hereunder" and words of similar import when used in this Credit Agreement shall
refer to the Credit Agreement as a whole and not to any particular provision of
this Credit Agreement, unless otherwise specifically provided. References in
this Credit Agreement to "Articles", "Sections", "Schedules" or "Exhibits" shall
be to Articles, Sections, Schedules or Exhibits of or to this Credit Agreement
unless otherwise specifically provided. Any of the terms defined in Section 1.1
may, unless the context otherwise requires, be used in the singular or plural
depending on the reference. "Include", "includes" and "including" shall be
deemed to be followed by "without limitation" whether or not they are in fact
followed by such words or words of like import. "Writing", "written" and
comparable terms refer to printing, typing, computer disk, e-mail and other
means of reproducing words in a visible form. References to any agreement or
contract are to such agreement or contract as amended, modified or supplemented
from time to time in accordance with the terms hereof and thereof. References to
any Person include the successors and permitted assigns of such Person.
References "from" or "through" any date mean, unless otherwise specified, "from
and including" or "through and including", respectively. References to any times
herein shall refer to Eastern Standard or Day Light time, as applicable, in
Charlotte, North Carolina.
ARTICLE II
LOANS
2.1 REVOLVING LOANS.
(a) Commitment. Subject to the terms and conditions
hereof and in reliance upon the representations and warranties set
forth herein, each of the Lenders severally agrees to lend to the
Borrower at any time or from time to time on or after the Closing Date
and before the Maturity Date, such Lender's Revolving Credit Commitment
Percentage of the Revolving Loans as may be requested or deemed
requested by the Borrower.
(b) Determination of Borrowing Base.
(i) The Lenders agree, subject to the terms and
conditions of this Credit Agreement, from time to time, to
make loans and advances to the Borrower
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hereunder on a revolving basis. Such loans and advances to the
Borrower (each, a "Revolving Loan"; and collectively, the
"Revolving Loans") together with the Letter of Credit
Obligations outstanding with respect to the Letters of Credit
shall not in the aggregate exceed the lesser of:
(A) the Revolving Credit Committed
Amount then in effect; or
(B) the Borrowing Base.
(ii) No Lender shall be obligated at any time to
make available to the Borrower its Revolving Credit Commitment
Percentage of any requested Revolving Loan if such amount plus
its Revolving Credit Commitment Percentage of all Revolving
Loans and its Revolving Credit Commitment Percentage of all
Letter ---- of Credit Obligations then outstanding would
exceed such Lender's Revolving Credit Commitment at such time.
The aggregate balance of Revolving Loans plus the aggregate
amount of all Letter of Credit Obligations outstanding shall
not at any time exceed the Revolving Credit Committed ----
Amount. No Lender shall be obligated to make available, nor
shall the Administrative Agent make available, any Revolving
Loans to any of the Borrower to the extent such Revolving Loan
when added to the then outstanding Revolving Loans and all
Letter of Credit Obligations would cause the aggregate
outstanding Revolving Loans and all Letter of Credit
Obligations to exceed the Borrowing Base. The Borrower shall
promptly repay to the Administrative Agent for the account of
the Lenders from time to time the full amount of the excess,
if any of (A) the amount of all Revolving Loans and Letter of
Credit Obligations outstanding over (B) the lesser of (1) the
Revolving Credit Committed Amount and (2) the Borrowing
Base.
(c) Revolving Notes. The obligations of the Borrower to
repay the Revolving Loans and to pay interest thereon shall be
evidenced by separate promissory notes of the Borrower to each Lender
in substantially the form of Exhibit F-1 attached hereto (the
"Revolving Notes"), with appropriate insertions, with one (1) Revolving
Note being payable to the order of each Lender in a principal amount
equal to such Lender's Revolving Credit Commitment and representing the
obligations of the Borrower to pay such Lender the amount of such
Lender's Revolving Credit Commitment or, if less, the aggregate unpaid
principal amount of all Revolving Loans made by such Lender hereunder,
plus interest accrued thereon, as set forth herein. The Borrower
irrevocably authorizes each Lender to make or cause to be made
appropriate notations on its Revolving Note, or on a record pertaining
thereto, reflecting Revolving Loans and repayments thereof. The
outstanding amount of the Revolving Loans set forth on such Lender's
Revolving Note or record shall be prima facie evidence of the principal
amount thereof owing and unpaid to such Lender, but the failure to make
such notation or record, or any error in such notation or record shall
not limit or otherwise affect the obligations of the Borrower hereunder
or under any Revolving Note to make payments of principal of or
interest on any Revolving Note when due.
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(d) Borrowings under Revolving Notes.
(i) Each request for a borrowing hereunder shall
be made by a notice in the form attached hereto as Exhibit G
from the Borrower to the Administrative Agent (a "Notice of
Borrowing"), given not later than 11:00 A.M. (A) on the
Business Day on which the proposed borrowing is requested to
be made, for Revolving Loans that will be Base Rate Loans and
(B) three (3) Business Days prior to the date of the requested
borrowing, for Revolving Loans that will be Eurodollar Loans.
Each Notice of Borrowing shall be given by telecopy, setting
forth (1) the requested date of such borrowing, (2) the
aggregate amount of such requested borrowing, (3) whether such
Revolving Loans will be Base Rate Loans or Eurodollar Rate
Loans, and if appropriate, the applicable Interest Period, (4)
certification by the Borrower that it has complied in all
material respects with Article V, all of which shall be
specified in such manner as is necessary to comply with all
limitations on Revolving Loans outstanding hereunder
(including, without limitation, availability under the
Borrowing Base) and (5) the account at which such requested
funds should be made available. Each Notice of Borrowing shall
be irrevocable by and binding on the Borrower. Revolving Loans
made as Eurodollar Loans shall be made in a minimum principal
amount of One Million Dollars ($1,000,000) and integral
multiples of Five Hundred Thousand Dollars ($500,000) in
excess thereof; provided, that no more than five (5)
Eurodollar Loans shall be outstanding hereunder at any one
time. Revolving Loans may be repaid and reborrowed in
accordance with the provisions hereof.
The Administrative Agent shall give to each Lender
prompt notice (but in no event later than 2:00 P.M. on the
date of the Administrative Agent's receipt of notice from the
Borrower) of each Notice of Borrowing by telecopy, telex or
cable (other than any Notice of Borrowing which will be funded
by the Administrative Agent in accordance with subsection
(d)(ii) below). No later than 3:00 P.M. on the date on which a
borrowing is requested to be made pursuant to the applicable
Notice of Borrowing, each Lender will make available to the
Administrative Agent at the address of the Administrative
Agent set forth on the signature pages hereto, in immediately
available funds, its Revolving Credit Commitment Percentage of
such borrowing requested to be made. Unless the Administrative
Agent shall have been notified by any Lender prior to the date
of borrowing that such Lender does not intend to make
available to the Administrative Agent its portion of the
borrowing to be made on such date, the Administrative Agent
may assume that such Lender will make such amount available to
the Administrative Agent as required above and the
Administrative Agent may, in reliance upon such assumption,
make available the amount of the borrowing to be provided by
such Lender. Upon fulfillment of the conditions set forth in
Article V for such borrowing, the Administrative Agent will
make such funds available to the Borrower at the account
specified by the Borrower in such Notice of Borrowing.
(ii) Because the Borrower anticipates the
possibility of requesting borrowings of Revolving Loans on
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a daily basis and repaying Revolving Loans on a daily basis
through the collection of Accounts and the proceeds of other
Collateral, resulting in the amount of outstanding Revolving
Loans fluctuating from day to day, in order to administer the
Revolving Loans in an efficient manner and to minimize the
transfer of funds between the Administrative Agent and the
Lenders, with the Lenders' consent, the Swingline Lender has
agreed, subject to the terms and conditions set forth in
Section 2.10, to make Swingline Loans available to the
Borrower from time to time; without necessity of giving each
Lender prior notice of the proposed Swingline Loan borrowing,
of such Lender's Revolving Credit Commitment Percentage of any
resulting Revolving Loan and the other matters covered by the
Notice of Borrowing; provided, however, that the Swingline
Lender shall not make any such Swingline Loan if, prior to the
making thereof, the Swingline Lender has received, either
directly or from the Administrative Agent (if the Swingline
Lender is not then the Administrative Agent) (1) an officer's
certificate from the Borrower or any other Borrower pursuant
to and in accordance with Section 7.1(i) that a Default or
Event of Default is in existence or (2) a Notice of Borrowing
from the Borrower wherein the certification provided therein
states that the conditions to the making of the requested
Swingline Loan have not been satisfied or (3) a written notice
from the Administrative Agent that the conditions to such
borrowing specified in Section 5.2 have not been satisfied,
which officer's certificate, Notice of Borrowing or notice, in
each case, shall not have been rescinded, (provided that if
the Swingline Lender is the Administrative Agent, the notice
specified in subclause (3) shall be presumed if the
Administrative Agent has made such determination). If the
Swingline Lender makes any Swingline Loans, as provided in the
immediately preceding sentence, the amount of outstanding
Revolving Loans and each Lender's Revolving Credit Commitment
Percentage thereof shall be computed weekly rather than daily
and shall be adjusted upward or downward on the basis of the
amount of outstanding Revolving Loans as of 5:00 P.M. on the
Business Day immediately preceding the date of each
computation, determined in the manner prescribed below;
provided, however, that the Administrative Agent retains the
absolute right at any time or from time to time to make the
aforedescribed adjustments at intervals more frequently than
weekly. The Administrative Agent shall deliver to each of the
Lenders after the end of each week, or such lesser period or
periods as the Administrative Agent shall determine, a summary
statement of the amount of outstanding Revolving Loans for
such period after giving effect to the conversion of then
outstanding Swingline Loans into Revolving Loans in accordance
with Section 2.10 (such week or lesser period or periods being
hereafter referred to as a "Settlement Period"). If the
summary statement is sent by the Administrative Agent and
received by the Lenders prior to 12:00 Noon on any Business
Day each Lender shall make the transfers described in the next
succeeding sentence no later than 3:00 P.M. on the day such
summary statement was sent; and if such summary statement is
sent by the Administrative Agent and received by the Lenders
after 12:00 Noon on any Business Day, each Lender shall make
such transfers no later than 3:00 P.M. on the next succeeding
Business Day. If in any Settlement Period, the amount of a
Lender's Revolving Credit Commitment Percentage of the
Revolving Loans is in
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excess of the amount of Revolving Loans actually funded by
such Lender, such Lender shall forthwith (but in no event
later than the time set forth in the next preceding sentence)
transfer to the Administrative Agent by wire transfer in
immediately available funds the amount of such excess; and, on
the other hand, if the amount of a Lender's Revolving Credit
Commitment Percentage of the Revolving Loans in any Settlement
Period is less than the amount of Revolving Loans actually
funded by such Lender, the Administrative Agent shall
forthwith transfer to such Lender by wire transfer in
immediately available funds the amount of such difference. The
obligation of each of the Lenders to transfer such funds shall
be irrevocable and unconditional and without recourse to or
warranty by the Administrative Agent. Each of the
Administrative Agent and the Lenders agree to ▇▇▇▇ their
respective books and records at the end of each Settlement
Period to show at all times the dollar amount of their
respective Revolving Credit Commitment Percentages of the
outstanding Revolving Loans. All Revolving Loans under this
Section 2.1(d)(ii) shall be made as Base Rate Loans.
(iii) If the amounts described in subsection
(d)(i) or (d)(ii) of this Section 2.1 are not in fact made
available to the Administrative Agent by a Lender (such Lender
being hereinafter referred to as a "Defaulting Lender") and
the Administrative Agent has made such amount available to the
Borrower, the Administrative Agent shall be entitled to
recover such corresponding amount on demand from such
Defaulting Lender. If such Defaulting Lender does not pay such
corresponding amount forthwith upon the Administrative Agent's
demand therefor, the Administrative Agent shall promptly
notify the Borrower and the Borrower shall immediately (but in
no event later than five (5) Business Days after such demand)
pay such corresponding amount to the Administrative Agent. The
Administrative Agent shall also be entitled to recover from
such Defaulting Lender and the Borrower, (A) interest on such
corresponding amount in respect of each day from the date such
corresponding amount was made available by the Administrative
Agent to the Borrower to the date such corresponding amount is
recovered by the Administrative Agent, at a rate per annum
equal to either (1) if paid by such Defaulting Lender, the
overnight Federal Funds Rate or (2) if paid by the Borrower,
the then applicable rate of interest, calculated in accordance
with Section 4.1, plus (B) in each case, an amount equal to
any costs (including legal expenses) and losses incurred as a
result of the failure of such Defaulting Lender to provide
such amount as provided in this Credit Agreement. Nothing
herein shall be deemed to relieve any Lender from its
obligation to fulfill its commitments hereunder or to
prejudice any rights which the Borrower may have against any
Lender as a result of any default by such Lender hereunder,
including, without limitation, the right of the Borrower to
seek reimbursement from any Defaulting Lender for any amounts
paid by the Borrower under clause (B) above on account of such
Defaulting Lender's default.
(iv) The failure of any Lender to make the
Revolving Loan to be made by it as part of any borrowing shall
not relieve any other Lender of its obligation, if any,
hereunder to make its Revolving Loan on the date of such
borrowing, but
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no Lender shall be responsible for the failure of any
other Lender to make the Revolving Loan to be made by such
other Lender on the date of any borrowing.
(v) Each Lender shall be entitled to earn
interest at the then applicable rate of interest, calculated
in accordance with Article IV, on outstanding Revolving Loans
which it has funded to the Administrative Agent from the date
such Lender funded such Revolving Loan to, but excluding, the
date on which such Lender is repaid with respect to such
Revolving Loan.
(vi) In the event of any conflict between any
terms of this Section 2.1(d) and those of Section 2.10, the
terms of Section 2.10 shall be controlling.
2.2 OPTIONAL AND MANDATORY PREPAYMENTS; REDUCTION OF COMMITMENTS.
(a) Voluntary Prepayments. The Borrower shall have the right to
prepay Loans in whole or in part from time to time, but otherwise without
premium or penalty; provided, however, that (i) Loans that are Eurodollar Loans
may only be prepaid on three (3) Business Days' prior written notice to the
Administrative Agent specifying the applicable Loans to be prepaid; (ii) any
prepayment of Loans that are Eurodollar Loans will be subject to Section 4.10;
(iii) each such partial prepayment of Loans (other than Swingline Loans) shall
be in a minimum principal amount of One Million Dollars ($1,000,000) and
integral multiples of Five Hundred Thousand Dollars ($500,000). Subject to the
foregoing terms, amounts prepaid under this Section 2.2(a) shall be applied,
first, to Swingline Loans, and, then, to the Revolving Loans. Prepayments on
Revolving Loans shall be applied first to Base Rate Loans and then to Eurodollar
Loans in direct order of Interest Period maturities.
(b) Mandatory Prepayments.
(i) Revolving Credit Committed Amount. If at any time,
the sum of the aggregate principal amount of outstanding Loans plus all
Letter of Credit Obligations then outstanding shall exceed the lesser
of (A) the Revolving Credit Committed Amount and (B) the Borrowing
Base, the Borrower immediately shall prepay the Loans (with Swingline
Loans to be paid first) and (after all Loans have been repaid) cash
collateralize the Letter of Credit Obligations, in an amount sufficient
to eliminate such excess.
(ii) Casualty Loss. To the extent of cash proceeds
received by any Obligor in connection with a Casualty Loss, the
Borrower shall prepay the Loans in an amount equal to one hundred
percent (100%) of such cash proceeds if the Administrative Agent shall
have elected to apply the proceeds realized from such Casualty Loss to
the prepayment of the Loans pursuant to Section 7.10 (such prepayment
to be applied as set forth in clause (iv) below).
(iii) Asset Dispositions. Promptly and in any event within
five (5) days following the occurrence of any Asset Disposition by any
Obligor, the Borrower shall prepay the Loans in an aggregate amount
equal to the Net Cash Proceeds of
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the related Asset Disposition. Such prepayment shall be
applied as set forth in clause (iv) below.
(iv) Application of Mandatory Prepayments. All amounts
required to be paid pursuant to this Section 2.2(b) shall be applied to
Loans (with Swingline Loans to be paid first) and (after all Loans have
been repaid) to a cash collateral account held by the Administrative
Agent in respect of Letter of Credit Obligations. Within the parameters
of the applications set forth above for Loans, prepayments shall be
applied first to Base Rate Loans and then to Eurodollar Loans in direct
order of Interest Period maturities. All prepayments under this Section
2.2(b) shall be subject to Section 4.10.
(c) Reductions of the Revolving Credit Committed Amount. The
Borrower may from time to time permanently reduce or terminate the Revolving
Credit Committed Amount in whole or in part in minimum aggregate amounts of Five
Million Dollars ($5,000,000) or in integral multiples of One Million Dollars
($1,000,000) in excess thereof (or, if less, the full remaining amount of the
then applicable Revolving Credit Committed Amount) upon three (3) Business Days'
prior written notice to the Administrative Agent; provided, however, no such
termination or reduction shall be made which would cause the aggregate principal
amount of outstanding Loans plus Letter of Credit Obligations outstanding to
exceed the lesser of (A) the Revolving Credit Committed Amount and (B) the
Borrowing Base, unless, concurrently with such termination or reduction, the
Loans are repaid to the extent necessary to eliminate such excess (with
Swingline Loans to be paid first). The Administrative Agent shall promptly
notify each affected Lender of receipt by the Administrative Agent of any notice
from the Borrower pursuant to this Section 2.2(c).
(d) Maturity Date. The Revolving Credit Commitment of the Lenders,
the Swingline Commitment of the Swingline Lender, and the Letter of Credit
Commitment of the Issuing Bank shall automatically terminate on the Maturity
Date.
(e) General. The Borrower shall pay to the Administrative Agent
for the account of the Lenders in accordance with the terms of Section 4.3, on
the date of each termination or reduction of the Revolving Credit Committed
Amount, the Unused Line Fee accrued through the date of such termination or
reduction on the amount of the Revolving Credit Committed Amount so terminated
or reduced.
2.3 PAYMENTS AND COMPUTATIONS.
(a) The Borrower shall make each payment hereunder and under the
Notes not later than 2:00 P.M. on the day when due. Payments made by the
Borrower shall be in Dollars to the Administrative Agent at its address referred
to in Section 14.5 hereof in immediately available funds without deduction,
withholding, setoff or counterclaim. Payments shall be applied, first, with
respect to outstanding Swingline Loans and, then, with respect to Revolving
Loans. Payments made with respect to the Revolving Loans shall be applied to
repay Revolving Loans consisting of Base Rate Loans first and then Revolving
Loans consisting of Eurodollar Loans. As soon as practicable after the
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Administrative Agent receives payment from the Borrower, but in no event later
than one (1) Business Day after such payment has been made, subject to Section
2.1(d)(ii), the Administrative Agent will cause to be distributed like funds
relating to the payment of principal, interest, or Fees (other than amounts
payable to the Administrative Agent to reimburse the Administrative Agent and
the Issuing Bank for fees and expenses payable solely to them pursuant to
Article IV hereof and Swingline Loans, together with accrued interest thereon,
which shall be distributed solely to the Swingline Lender) or expenses payable
to the Administrative Agent and the Lenders in accordance with Section 14.8
hereof ratably to the Lenders, and like funds relating to the payment of any
other amounts payable to such Lender. The Borrower's obligations to the Lenders
with respect to such payments shall be discharged by making such payments to the
Administrative Agent pursuant to this Section 2.3(a) or if not timely paid or
any Event of Default then exists, may be added to the principal amount of the
Revolving Loans outstanding.
(b) (i) The Obligors, either individually or through the Borrower,
shall have each established as of the Closing Date and thereafter shall maintain
one or more lockboxes (each a "Lockbox") with financial institutions, including
First Union, selected by the Borrower and acceptable to the Administrative Agent
in its commercially reasonable judgment (each a "Lockbox Bank") and shall
instruct all account debtors on the Accounts of each Obligor to remit all
payments to its respective Lockboxes. All amounts received by the Obligors from
any account debtor, in addition to all other cash received from any other source
including but not limited to proceeds from asset sales and judgments, shall be
promptly deposited into the applicable Lockbox Account (as defined below).
(ii) Each Obligor, individually or through the Borrower,
the Administrative Agent and each Lockbox Bank shall enter into three
party agreements substantially in the form of Exhibit H hereto or in
such other form as the Administrative Agent, in its commercially
reasonable judgment, may request or approve from time to time (each a
"Lockbox Agreement"), providing, among other things, for the following:
(A) The Obligors, individually or through the
Borrower, will open and establish for the
benefit of the Administrative Agent on behalf of the Lenders
an account at each Lockbox Bank (each a "Lockbox Account").
Notwithstanding the foregoing, in lieu of establishing a
Lockbox Account with First Union, the First Union Account will
serve as the Obligors' Lockbox Account with respect to the
Lockboxes opened with First Union.
(B) All receipts held in the Lockboxes shall be
remitted daily to the appropriate Lockbox Account. All funds
deposited into the Lockbox Accounts on any Business Day shall
be transferred to the First Union Account. All funds deposited
on any Business Day to the First Union Account shall be
applied by the Administrative Agent on the following Business
Day to reduce the then outstanding balance of the Loans and to
pay accrued interest thereon and to pay any other outstanding
Obligations
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which are then due and payable hereunder; provided that for
the purpose of determining the availability of Loans
hereunder, such funds deposited into the First Union Account
shall be deemed to have reduced the outstanding Loans on the
Business Day such funds were deposited into such account; and,
provided, further, that all electronic payments made to, or
other immediately available funds deposited into the First
Union Account shall be applied by the Administrative Agent on
the date received in such account, if received before 2:00
P.M. on such day. All amounts received directly by the
Obligors from any account debtor, in addition to all other
cash received from any other source including but not limited
to proceeds from asset sales and judgments, shall be held in
trust by the Borrower and promptly deposited into the
applicable Lockbox Account or, if made by wire transfer,
directly to the First Union Account.
(C) Notwithstanding any terms of subsection (B)
above to the contrary, so long as (i) no Event of Default or
Default exists, and (ii) Average Excess Availability exceeds
Fifteen Million Dollars ($15,000,000), all or portions of any
funds deposited into the Lockbox Accounts on any Business Day
may, at the Borrower's option, be transferred to an account of
the Borrower other than the First Union Account, thereafter to
be used by the Borrower in a manner consistent with the terms
of this Credit Agreement. Should the Administrative Agent at
any time determine that either of the foregoing conditions is
not being met, then, forthwith, the Administrative Agent shall
notify the Borrower and the Lockbox Banks accordingly and the
special permission granted herein to the Borrower shall cease
to be effective until such time as the Administrative Agent,
by subsequent notice to the Borrower and the Lockbox Banks,
determine that each of the foregoing conditions is being met
and that the special permission granted herein to the Borrower
may be restored.
(iii) All funds deposited into the First Union Account
shall immediately become the property of the Administrative Agent and
the Borrower shall obtain the agreement by the Lockbox Banks to waive
any offset rights against the funds so deposited. The Administrative
Agent assumes no responsibility for the Lockbox arrangements, including
without limitation, any claim of accord and satisfaction or release
with respect to deposits accepted by the Lockbox Banks thereunder.
(iv) The Obligors may close Lockboxes and/or open new
Lockboxes with the prior written consent of the Administrative Agent
and subject to prior execution and delivery to the Administrative Agent
of Lockbox Agreements consistent with the provisions of this Section
2.3(b) and in form and substance satisfactory to the Administrative
Agent and its counsel.
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(c) The Obligors hereby authorize each Lender to charge from
time to time against any or all of the Obligors' accounts with such
Lender any of the Obligations which are then due and payable by such
Borrower. Each Lender receiving any payment as a result of charging any
such account shall promptly notify the Administrative Agent thereof and
make such arrangements as the Administrative Agent shall request to
share the benefit thereof in accordance with Section 2.7.
(d) Except as otherwise provided herein with respect to
Eurodollar Loans, any payments falling due under this Credit Agreement
on a day other than a Business Day shall be due and payable on the next
succeeding Business Day and shall accrue interest at the applicable
interest rate provided for in this Credit Agreement to but excluding
such Business Day. Except as otherwise provided herein, computation of
interest and fees hereunder shall be made on the basis of actual number
of days elapsed over a 360 day year.
2.4 MAINTENANCE OF ACCOUNT.
The Administrative Agent shall maintain an account on its books in the
name of the Borrower in which the Borrower will be charged with all Loans and
advances made by the Lenders to the Borrower or for the Borrower's account,
including the Revolving Loans, the Letter of Credit Obligations and any other
Obligations, including any and all costs, expenses and attorney's fees which the
Administrative Agent may incur, including, without limitation, in connection
with the exercise by or for the Lenders of any of the rights or powers herein
conferred upon the Administrative Agent (other than in connection with any
assignments or participations by any Lender) or in the prosecution or defense of
any action or proceeding by or against any Borrower or the Lenders concerning
any matter arising out of, connected with, or relating to this Credit Agreement
or the Accounts, or any Obligations owing to the Lenders by the Borrower. The
Borrower will be credited in accordance with Section 2.3(b)(ii)(B) above, with
all amounts received by the Lenders from the Borrower's or from others for the
Borrower's account, including, as above set forth, all amounts received by the
Administrative Agent in payment of Accounts. In no event shall prior recourse to
any Accounts or other Collateral be a prerequisite to the Administrative Agent's
right to demand payment of any Obligation upon its maturity. Further, it is
understood that the Administrative Agent shall have no obligation whatsoever to
perform in any respect any of the Borrower's contracts or obligations relating
to the Accounts.
2.5 STATEMENT OF ACCOUNT.
Within fifteen (15) days after the end of each calendar month, the
Administrative Agent shall send the Borrower a statement showing the accounting
for the charges, loans, advances and other transactions occurring between the
Lenders and the Borrower during that calendar month. Absent manifest error, the
monthly statements shall be deemed correct and binding upon the Borrower and
shall constitute an account stated between the Borrower and the Lenders unless
the Administrative Agent receives a written statement of the Borrower's
exceptions within thirty (30) days after same is mailed to the Borrower.
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2.6 TAXES.
(a) Any and all payments by the Borrower hereunder or
under the Notes to or for the benefit of any Lender shall be made, in
accordance with Section 2.3, free and clear of and without deduction
for any and all present or future Taxes, deductions, charges or
withholdings and all liabilities with respect thereto, excluding, in
the case of each such Lender and the Administrative Agent, Taxes
imposed on or measured by the Administrative Agent's or any Lender's
net income or receipts (any such excluded Taxes, collectively,
"Excluded Taxes"). If the Borrower shall be required by law to deduct
any Taxes (other than Excluded Taxes) from or in respect of any sum
payable hereunder or under any Note to or for the benefit of any Lender
or the Administrative Agent, (i) the sum payable shall be increased as
may be necessary so that after making all required deductions of Taxes
(including deductions of Taxes applicable to additional sums payable
under this Section 2.6) such Lender or the Administrative Agent, as the
case may be, receives an amount equal to the sum it would have received
had no such deductions been made, (ii) the Borrower shall make such
deductions and (iii) the Borrower shall pay the full amount so deducted
to the relevant taxation authority or other authority in accordance
with applicable law; provided, however, that the Borrower shall be
under no obligation to increase the sum payable to any Lender not
organized under the laws of the United States or a state thereof (a
"Foreign Lender") by an amount equal to the amount of the U.S. Tax
required to be withheld under United States law from the sums paid to
such Foreign Lender, if such withholding is caused by the failure of
such Foreign Lender to be engaged in the active conduct of a trade or
business in the United States or all amounts of interest and fees to be
paid to such Foreign Lender hereunder are not effectively connected
with such trade or business within the meaning of U.S. Treasury
Regulation 1.1441-4(a).
(b) Each Foreign Lender agrees that it will deliver to
the Borrower and the Administrative Agent (i) two duly completed copies
of United States Internal Revenue Service Form W-8 BEN or W-8 ECI or
successor applicable form(s), as the case may be, and (ii) an Internal
Revenue Service Form W-8 or W-9 or successor applicable form, together
with any other certificate or statement of exemption required under the
Internal Revenue Code or regulations issued thereunder. Each such
Lender also agrees to deliver to the Borrower and the Administrative
Agent two (2) further copies of the said Form W-8 BEN or W-8 ECI and
Form W-8 or W-9, or successor applicable forms or other manner of
certification, as the case may be, on or before the date that any such
form expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent form previously delivered by it
to the Borrower, and such extensions or renewals thereof as may
reasonably be requested by the Borrower or the Administrative Agent,
unless in any such case an event (including, without limitation, any
change in treaty, law or regulation) has occurred prior to the date on
which any such delivery would otherwise be required which renders all
such forms inapplicable or which would prevent such Lender from duly
completing and delivering any such form with respect to it and such
Lender so advises the Borrower and the Administrative Agent. Such
Lender shall certify (A) in the case of a Form W-8 BEN or W-8 ECI, that
it is entitled to receive payments under this Credit Agreement without
deduction or withholding of any U.S. federal income taxes and (B) in
the case of a Form W-8 or W-9, that it is entitled to an exemption from
U.S. backup withholding tax.
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(c) In addition, the Borrower agrees to pay any present
or future stamp, documentary, privilege, intangible or similar Taxes or
any other excise or property Taxes, charges or similar levies that
arise at any time or from time to time (other than Excluded Taxes) (i)
from any payment made under any and all Credit Documents, (ii) from the
transfer of the rights of any Lender under any Credit Documents to any
other Lender or Lenders or (iii) from the execution or delivery by the
Borrower of, or from the filing or recording or maintenance of, or
otherwise with respect to, any and all Credit Documents (hereinafter
referred to as "Other Taxes").
(d) The Borrower will indemnify each Lender and the
Administrative Agent for the full amount of Taxes (including, without
limitation and without duplication, any Taxes imposed by any
jurisdiction on amounts payable under this Section 2.6), subject to (i)
the exclusion set out in the first sentence of Section 2.6(a), (ii) the
provisions of Section 2.6(b), and (iii) the provisions of the proviso
set forth in Section 2.6(a), and will indemnify each Lender and the
Administrative Agent for the full amount of Other Taxes (including,
without limitation and without duplication, any Taxes imposed by any
jurisdiction on amounts payable under this Section 2.6) paid by such
Lender or the Administrative Agent (on its own behalf or on behalf of
any Lender), as the case may be, in respect of payments made or to be
made hereunder, and any liability (including penalties, interest and
expenses) arising solely therefrom or with respect thereto, whether or
not such Taxes or Other Taxes were correctly or legally asserted.
Payment of this indemnification shall be made within thirty (30) days
from the date such Lender or the Administrative Agent, as the case may
be, makes written demand therefor, with a description of the applicable
Taxes or Other Taxes.
(e) Within thirty (30) days after the date of any payment
of Taxes or Other Taxes, the applicable Borrower shall furnish to the
Administrative Agent, at its address referred to in Section 14.5, the
original or certified copy of a receipt evidencing payment thereof.
(f) Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and obligations of
the Borrower contained in this Section 2.6 shall survive the payment in
full of all Obligations hereunder and under the Revolving Notes.
2.7 SHARING OF PAYMENTS.
If any Lender shall obtain any payment (whether voluntary, involuntary,
through the exercise of any right of setoff or otherwise) on account of the
Revolving Loans made by it or its participation in Letters of Credit in excess
of its pro rata share of such payment as provided for in this Credit Agreement,
such Lender shall forthwith purchase from the other Lenders such participations
in the Revolving Loans made by them or in their participation in Letters of
Credit as shall be necessary to cause such purchasing Lender to share the excess
payment accruing to all Lenders in accordance with their respective ratable
shares as provided for in this Credit Agreement; provided, however, that if all
or any portion of such excess is thereafter recovered from such purchasing
Lender, such purchase from each Lender shall be rescinded and each such Lender
shall repay to the purchasing Lender the purchase price to the extent of such
recovery
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together with an amount equal to such Lender's ratable share (according to the
proportion of (i) the amount of such Lender's required repayment to (ii) the
total amount so recovered from the purchasing Lender) or any interest or other
amount paid or payable by the purchasing Lender in respect to the total amount
so recovered. The Borrower agrees that any Lender so purchasing a participation
from another Lender pursuant to this Section 2.7 may, to the fullest extent
permitted by law, exercise all of its rights of payment (including the right of
setoff) with respect to such participation as fully as if such Lender were the
direct creditor of the Borrower in the amount of such participation.
2.8 PRO RATA TREATMENT.
Each Loan, each payment or prepayment of principal of any Loan or
reimbursement obligations arising from drawings under Letters of Credit, each
payment of interest on the Loans, each payment of the Unused Line Fee, each
payment of the Letter of Credit Fee, each reduction of the Revolving Credit
Commitment and each conversion or extension of any Loan, shall be allocated pro
rata among the Lenders in accordance with the respective principal amounts of
their outstanding Revolving Loans and their participation interests in the
Letters of Credit; provided, however, that the foregoing fees payable hereunder
to the Lenders shall be allocated to each Lender based on such Lender's
Revolving Credit Commitment Percentage.
2.9 EXTENSIONS AND CONVERSIONS.
Subject to the terms of Article V, the Borrower shall have the option,
on any Business Day, to extend existing Eurodollar Loans into a subsequent
permissible Interest Period, to convert Base Rate Loans into Eurodollar Loans,
or to convert Eurodollar Loans into Base Rate Loans; provided, however, that (i)
except as provided in Section 4.10, Eurodollar Loans may be converted into Base
Rate Loans only on the last day of the Interest Period applicable
thereto, (ii) Eurodollar Loans may be extended, and Base Rate Loans may be
converted into Eurodollar Loans, only if no Default or Event of Default is in
existence on the date of extension or conversion, (iii) Loans extended as, or
converted into, Eurodollar Loans shall be subject to the terms of the definition
of "Interest Period" and shall be in such minimum amounts as provided in Section
2.1(d)(i) with respect to Revolving Loans, and (iv) no more than five (5)
separate Eurodollar Loans shall be outstanding hereunder at any time. Each such
extension or conversion shall be effected by the Borrower by giving a written
notice in the form of Exhibit I (a "Notice of Extension/Conversion") (or
telephone notice promptly confirmed in writing) to the Administrative Agent
prior to 11:00 A.M. on the Business Day of, in the case of the conversion of a
Eurodollar Loan into a Base Rate Loan, and on the third Business Day prior to,
in the case of the extension of a Eurodollar Loan as, or conversion of a Base
Rate Loan into, a Eurodollar Loan, the date of the proposed extension or
conversion, specifying the date of the proposed extension or conversion, the
Loans to be so extended or converted, the types of Loans into which such Loans
are to be converted and, if appropriate, the applicable Interest Periods with
respect thereto. Each request for extension or conversion shall constitute a
representation and warranty by the Borrower of the matters specified in Article
V. In the event the Borrower fail to request extension or conversion of any
Eurodollar Loan in accordance with this Section, or any such conversion or
extension is not permitted or required by this Section, then such Loan shall be
automatically converted into a Base Rate Loan at the end of the Interest Period
applicable
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thereto. The Administrative Agent shall give each Lender notice as promptly as
practicable of any such proposed extension or conversion affecting any Loan.
2.10 SWINGLINE LOAN SUBFACILITY.
(a) Swingline Commitment. During the period that the
Revolving Credit Commitments are in effect, subject to the terms and
conditions hereof, the Swingline Lender, in its individual capacity,
agrees to make certain Revolving Loans to the Borrower (each, a
"Swingline Loan" and, collectively, the "Swingline Loans") for the
purposes hereinafter set forth; provided, however, that: (i) the
aggregate amount of Swingline Loans outstanding at any time shall not
exceed Five Million Dollars ($5,000,000) (the "Swingline Committed
Amount"), and (ii) the sum of the aggregate amount of outstanding
Revolving Loans plus Swingline Loans plus Letter of Credit Obligations
shall not exceed the lesser of: (A) the Revolving Credit Committed
Amount then in effect; or (B) the Borrowing Base. Swingline Loans
hereunder may be repaid and reborrowed in accordance with the
provisions hereof.
(b) Swingline Loan Borrowings.
(i) Notice of Borrowing and Disbursement. The
Swingline Lender will make Swingline Loans available to the
Borrower on any Business Day upon request made by the Borrower
not later than 12:00 Noon on such Business Day. A notice of
request for Swingline Loan borrowing shall be made in the form
of a Notice of Borrowing, with appropriate modifications.
Swingline Loans hereunder shall be made in minimum amounts of
One Hundred Thousand Dollars ($100,000) and in integral
amounts of Fifty Thousand Dollars ($50,000) in excess thereof.
(ii) Repayment of Swingline Loans. Each Swingline
Loan shall be due and payable on the Maturity Date, if not
sooner due and payable in accordance with the terms set forth
hereinbelow. Upon each Business Day set by the Administrative
Agent for settlement among Lenders in respect of Revolving
Loans, as prescribed in Section 2.1(d)(ii) or earlier, on any
Business Day on which Swingline Loans are outstanding, if the
Swingline Lender shall so request, by written notice to the
Borrower and the Administrative Agent, the Borrower shall be
deemed to have requested a Revolving Loan comprised entirely
of Base Rate Loans in the amount of such Swingline Loans on
such Business Day; provided, however, that, in the following
circumstances, any such demand shall also be deemed to have
been given one (1) Business Day prior to each of (A) the
Maturity Date, (B) the occurrence of any Event of Default
described in Section 11.1(f), (C) upon acceleration of the
Obligations hereunder, whether on account of an Event of
Default described in Section 11.1(f) or any other Event of
Default, and (D) the exercise of remedies in accordance with
the provisions of Section 11.2 hereof (each such Revolving
Loan made on account of any such deemed request therefor as
provided herein being hereinafter referred to as a "Mandatory
Borrowing"). Each Lender hereby irrevocably agrees to make
such Revolving Loans promptly upon any such request or deemed
request on account of each
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Mandatory Borrowing in the amount and in the manner specified
in the preceding sentence and on the same such date
notwithstanding (i) the amount of Mandatory Borrowing then may
not comply with the minimum amount for borrowings of Revolving
Loans otherwise required hereunder (ii) whether any conditions
specified in Section 5.2 are then satisfied, (iii) whether a
Default or an Event of Default then exists, (iv) failure of
any such request or deemed request for Revolving Loans to be
made by the time otherwise required in Section 2.1(d), (v) the
date of such Mandatory Borrowing, or (vi) any reduction in the
Revolving Credit Committed Amount or termination of the
Revolving Credit Commitments immediately prior to such
Mandatory Borrowing or contemporaneously therewith. In the
event that any Mandatory Borrowing cannot for any reason be
made on the date otherwise required above (including, without
limitation, as a result of the commencement of a proceeding
under the Bankruptcy Code with respect to the Borrower), then,
each Lender hereby agrees that it shall forthwith purchase (as
of the date the Mandatory Borrowing would otherwise have
occurred, but adjusted for any payments received from the
Borrower on or after such date and prior to such purchase)
from the Swingline Lender such participations in the
outstanding Swingline Loans as shall be necessary to cause
each such Lender to share in such Swingline Loans ratably
based upon its respective Revolving Commitment Percentage
(determined before giving effect to any termination of the
Commitments pursuant to Section 11.2), provided that (x) all
interest payable on the Swingline Loans shall be for the
account of the Swingline Lender until the date as of which the
respective participation is purchased, and (y) at the time any
purchase of participations pursuant to this sentence is
actually made, the purchasing Lender shall be required to pay
to the Swingline Lender interest on the principal amount of
such participation purchased for each day from and including
the day upon which the Mandatory Borrowing would otherwise
have occurred to but excluding the date of payment for such
participation, at the rate equal to, if paid within two (2)
Business Days of the date of the Mandatory Borrowing, the
Federal Funds Effective Rate, and thereafter at a rate equal
to the Alternate Base Rate.
(c) Interest on Swingline Loans. Subject to the
provisions of Section 4.2, Swingline Loans shall bear interest at a per
annum rate equal to the Base Rate plus the Applicable Percentage for
Revolving Loans that are Base Rate Loans. Interest on Swingline Loans
shall be payable in arrears at the same time or times as prescribed
herein for Base Rate Loans.
(d) Swingline Note. The Swingline Loans shall be
evidenced by a duly executed promissory note of the Borrower to the
Swingline Lender in the original amount of the Swingline Committed
Amount and substantially in the form of Exhibit F-2.
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ARTICLE III
LETTERS OF CREDIT
3.1 ISSUANCE.
Subject to the terms and conditions hereof and of the Letter of Credit
Documents, if any, and any other terms and conditions which the Issuing Bank may
reasonably require, the Lenders will participate in the issuance by the Issuing
Bank from time to time of such Letters of Credit in Dollars from the Closing
Date until the Maturity Date as the Borrower may request, in a form acceptable
to the Issuing Bank; provided, however, that (a) the Letter of Credit
Obligations outstanding shall not at any time exceed Ten Million Dollars
($10,000,000) (the "Letter of Credit Committed Amount") and (b) the sum of the
aggregate principal amount of outstanding Revolving Loans plus Letter of Credit
Obligations outstanding shall not at any time exceed the lesser of (i) the
Revolving Credit Committed Amount and (ii) the Borrowing Base. No Letter of
Credit shall (x) have an original expiry date more than one (1) year from the
date of issuance or (y) as originally issued or as extended, have an expiry date
extending beyond the Maturity Date. Each Letter of Credit shall comply with the
related Letter of Credit Documents. The issuance and expiry date of each Letter
of Credit shall comply with the related Letter of Credit Documents. The issuance
and expiry date of each Letter of Credit shall be a Business Day.
3.2 NOTICE AND REPORTS.
The request for the issuance of a Letter of Credit shall be submitted
by the Borrower to the Issuing Bank at least three (3) Business Days prior to
the requested date of issuance. The Issuing Bank will, upon request, disseminate
to each of the Lenders a detailed report specifying the Letters of Credit which
are then issued and outstanding and any activity with respect thereto which may
have occurred since the date of the prior report, and including therein, among
other things, the beneficiary, the face amount and the expiry date as well as
any payment or expirations which may have occurred.
3.3 PARTICIPATION.
Each Lender, upon issuance of a Letter of Credit, shall be deemed to
have purchased without recourse a risk participation from the Issuing Bank in
such Letter of Credit and the obligations arising thereunder, in each case in an
amount equal to its Revolving Credit Commitment Percentage of such Letter of
Credit, and shall absolutely, unconditionally and irrevocably assume, as primary
obligor and not as surety, and be obligated to pay to the Issuing Bank therefor
and discharge when due, such Lender's Revolving Credit Commitment Percentage of
the obligations arising under such Letter of Credit. Without limiting the scope
and nature of each Lender's participation in any Letter of Credit, to the extent
that the Issuing Bank has not been reimbursed as required hereunder or under any
such Letter of Credit, each such Lender shall pay to the Issuing Bank its
Revolving Credit Commitment Percentage of such unreimbursed drawing pursuant to
the provisions of Section 3.4. The obligation of each Lender to so reimburse the
Issuing Bank shall be absolute and unconditional and shall not be affected by
the occurrence of a Default, an Event of Default or any other occurrence or
event. Any such reimbursement shall not relieve or otherwise impair the
obligation of the Borrower to reimburse the Issuing Bank under any Letter of
Credit, together with interest as hereinafter provided.
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3.4 REIMBURSEMENT.
In the event of any drawing under any Letter of Credit, the Issuing
Bank will promptly notify the Borrower. Unless the Borrower shall immediately
notify the Issuing Bank that the Borrower intends to otherwise reimburse the
Issuing Bank for such drawing, the Borrower shall be deemed to have requested
that the Lenders make a Revolving Loan in the amount of the drawing as provided
in Section 3.5 on the related Letter of Credit, the proceeds of which will be
used to satisfy the related reimbursement obligations. The Borrower promises to
reimburse the Issuing Bank on the day of drawing under any Letter of Credit
(either with the proceeds of a Revolving Loan obtained hereunder or otherwise)
in same day funds. If the Borrower shall fail to reimburse the Issuing Bank as
provided hereinabove, the unreimbursed amount of such drawing shall bear
interest at the Default Rate. The Borrower's reimbursement obligations hereunder
shall be absolute and unconditional under all circumstances irrespective of any
rights of setoff, counterclaim or defense to payment the Borrower may claim or
have against the Issuing Bank, the Administrative Agent, the Lenders, the
beneficiary of the Letter of Credit drawn upon or any other Person, including
without limitation any defense based on any failure of the Borrower to receive
consideration or the legality, validity, regularity or unenforceability of the
Letter of Credit. The Issuing Bank will promptly notify the other Lenders of the
amount of any unreimbursed drawing and each Lender shall promptly pay to the
Administrative Agent for the account of the Issuing Bank in Dollars and in
immediately available funds, the amount of such Lender's Revolving Credit
Commitment Percentage of such unreimbursed drawing. Such payment shall be made
on the Business Day such notice is received by such Lender from the Issuing Bank
if such notice is received at or before 2:00 P.M.; otherwise, such payment shall
be made at or before 12:00 Noon on the Business Day next succeeding the day such
notice is received. If such Lender does not pay such amount to the Issuing Bank
in full upon such request, such Lender shall, on demand, pay to the
Administrative Agent for the account of the Issuing Bank interest on the unpaid
amount during the period from the date of such drawing until such Lender pays
such amount to the Issuing Bank in full at a rate per annum equal to, if paid
within two (2) Business Days of the date that such Lender is required to make
payments of such amount pursuant to the preceding sentence, the Federal Funds
Rate and thereafter at a rate equal to the Base Rate. Each Lender's obligation
to make such payment to the Issuing Bank, and the right of the Issuing Bank to
receive the same, shall be absolute and unconditional, shall not be affected by
any circumstance whatsoever and without regard to the termination of this Credit
Agreement or the Commitments hereunder, the existence of a Default or Event of
Default or the acceleration of the obligations of the Borrower hereunder and
shall be made without any offset, abatement, withholding or reduction
whatsoever. Simultaneously with the making of each such payment by a Lender to
the Issuing Bank, such Lender shall, automatically and without any further
action on the part of the Issuing Bank or such Lender, acquire a participation
in an amount equal to such payment (excluding the portion of such payment
constituting interest owing to the Issuing Bank) in the related unreimbursed
drawing portion of the Letter of Credit Obligation and in the interest thereon
and in the related Letter of Credit Documents, and shall have a claim against
the Borrower with respect thereto.
3.5 REPAYMENT WITH REVOLVING LOANS.
On any day on which the Borrower shall have requested, or been deemed
to have requested, a Revolving Loan advance to reimburse a drawing under a
Letter of Credit, the Administrative Agent shall give notice to the Lenders that
a Revolving Loan has been requested or deemed requested by the Borrower to be
made in connection with a drawing under a Letter of
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Credit, in which case a Revolving Loan advance comprised of Base Rate Loans (or
Eurodollar Loans to the extent the Borrower has complied with the procedures of
Section 2.1(d)(i) with respect thereto) shall be immediately made to the
Borrower by all Lenders (notwithstanding any termination of the Commitments
pursuant to Section 11.2) pro rata based on the respective Revolving Credit
Commitment Percentages of the Lenders (determined before giving effect to any
termination of the Commitments pursuant to Section 11.2) and the proceeds
thereof shall be paid directly by the Administrative Agent to the Issuing Bank
for application to the respective Letter of Credit Obligations. Each such Lender
hereby irrevocably agrees to make its Revolving Credit Commitment Percentage of
each such Revolving Loan immediately upon any such request or deemed request in
the amount, in the manner and on the date specified in the preceding sentence
notwithstanding (i) the amount of such borrowing may not comply with the minimum
amount for advances of Revolving Loans otherwise required hereunder, (ii)
whether any conditions specified in Article V are then satisfied, (iii) whether
a Default or an Event of Default then exists, (iv) failure for any such request
or deemed request for Revolving Loan to be made by the time otherwise required
hereunder, (v) whether the date of such borrowing is a date on which Revolving
Loans are otherwise permitted to be made hereunder or (vi) any termination of
the Commitments relating thereto immediately prior to or contemporaneously with
such borrowing. In the event that any Revolving Loan cannot for any reason be
made on the date otherwise required above (including, without limitation, as a
result of the commencement of a bankruptcy or insolvency proceeding with respect
to any Borrower), then each such Lender hereby agrees that it shall forthwith
purchase (as of the date such borrowing would otherwise have occurred, but
adjusted for any payments received from the Borrower on or after such date and
prior to such purchase) from the Issuing Bank such participation in the
outstanding Letter of Credit Obligations as shall be necessary to cause each
such Lender to share in such Letter of Credit Obligations ratably (based upon
the respective Revolving Credit Commitment Percentages of the Lenders
(determined before giving effect to any termination of the Commitments pursuant
to Section 11.2)), provided that at the time any purchase of participation
pursuant to this sentence is actually made, the purchasing Lender shall be
required to pay to the Issuing Bank, to the extent not paid to the Issuing Bank
by the Borrower in accordance with the terms of Section 3.4, interest on the
principal amount of participation purchased for each day from and including the
day upon which such borrowing would otherwise have occurred to but excluding the
date of payment for such participation, at the rate equal to, if paid within two
(2) Business Days of the date of the Revolving Loan advance, the Federal Funds
Rate, and thereafter at a rate equal to the Base Rate.
3.6 RENEWAL, EXTENSION.
The renewal or extension of any Letter of Credit shall, for purposes
hereof, be treated in all respects the same as the issuance of a new Letter of
Credit hereunder.
3.7 UNIFORM CUSTOMS AND PRACTICES.
The Issuing Bank may provide that the Letters of Credit shall be
subject to The Uniform Customs and Practice for Documentary Credits, as
published as of the date of issue by the International Chamber of Commerce (the
"UCP"), in which case the UCP may be incorporated by reference therein and
deemed in all respects to be a part thereof.
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3.8 INDEMNIFICATION; NATURE OF ISSUING BANK'S DUTIES.
(a) In addition to its other obligations under this
Article III, the Borrower agrees to protect, indemnify, pay and save
the Issuing Bank harmless from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including
reasonable attorneys' fees) that the Issuing Bank may incur or be
subject to as a consequence, direct or indirect, of (A) the issuance of
any Letter of Credit or (B) the failure of the Issuing Bank to honor a
drawing under a Letter of Credit as a result of any act or omission,
whether rightful or wrongful, of any present or future de jure or de
facto government or Governmental Authority (all such acts or omissions,
herein called "Government Acts").
(b) As between the Borrower and the Issuing Bank, the
Borrower shall assume all risks of the acts, omissions or misuse of any
Letter of Credit by the beneficiary thereof. The Issuing Bank shall not
be responsible, in the absence of its gross negligence or willful
misconduct: (i) for the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in
connection with the application for and issuance of any Letter of
Credit, even if it should in fact prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged; (ii) for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, that may
prove to be invalid or ineffective for any reason; (iii) for errors,
omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise, whether or not
they be in cipher; (iv) for any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under a
Letter of Credit or of the proceeds thereof; and (v) for any
consequences arising from causes beyond the control of the Issuing
Bank, including, without limitation, any Government Acts. None of the
above shall affect, impair, or prevent the vesting of the Issuing
Bank's rights or powers hereunder.
(c) In furtherance and extension and not in limitation of
the specific provisions hereinabove set forth, any action taken or
omitted by the Issuing Bank, under or in connection with any Letter of
Credit or the related certificates, if taken or omitted in good faith,
shall not put such Issuing Bank under any resulting liability to any
Borrower. It is the intention of the parties that this Credit Agreement
shall be construed and applied to protect and indemnify the Issuing
Bank against any and all risks involved in the issuance of the Letters
of Credit, all of which risks are hereby assumed by the Borrower,
including, without limitation, any and all Government Acts. The Issuing
Bank shall not, in any way, be liable for any failure by the Issuing
Bank or anyone else to pay any drawing under any Letter of Credit as a
result of any Government Acts or any other cause beyond the control of
the Issuing Bank.
(d) Nothing in this Section 3.8 is intended to limit the
reimbursement obligations of the Borrower contained in Section 3.4
above. The obligations of the Borrower under this Section 3.8 shall
survive the termination of this Credit Agreement. No act or omission of
any current or prior beneficiary of a Letter of Credit shall in any
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way affect or impair the rights of the Issuing Bank to enforce any
right, power or benefit under this Credit Agreement.
(e) Notwithstanding anything to the contrary contained in
this Section 3.8, the Borrower shall have no obligation to indemnify
the Issuing Bank in respect of any liability incurred by the Issuing
Bank (i) to the extent arising out of the gross negligence or willful
misconduct of the Issuing Bank, as determined by a court of competent
jurisdiction, or (ii) caused by the Issuing Bank's failure to pay under
any Letter of Credit after presentation to it of a request strictly
complying with the terms and conditions of such Letter of Credit, as
determined by a court of competent jurisdiction, unless such payment is
prohibited by any law, regulation, court order or decree.
3.9 RESPONSIBILITY OF ISSUING BANK.
It is expressly understood and agreed that the obligations of the
Issuing Bank hereunder to the Lenders are only those expressly set forth in this
Credit Agreement and that the Issuing Bank shall be entitled to assume that the
conditions precedent set forth in Article III or V have been satisfied unless it
shall have acquired actual knowledge that any such condition precedent has not
been satisfied; provided, however, that nothing set forth in this Article III
shall be deemed to prejudice the right of any Lender to recover from the Issuing
Bank any amounts made available by such Lender to the Issuing Bank pursuant to
this Article III in the event that it is determined by a court of competent
jurisdiction that the payment with respect to a Letter of Credit constituted
gross negligence or willful misconduct on the part of the Issuing Bank.
3.10 CONFLICT WITH LETTER OF CREDIT DOCUMENTS.
In the event of any conflict between this Credit Agreement and any
Letter of Credit Document (including any letter of credit application), this
Credit Agreement shall control.
ARTICLE IV
INTEREST AND FEES
4.1 INTEREST ON LOANS.
Subject to the provisions of Section 4.2, interest on the Loans shall
be payable (a) for Swingline Loans (all of which must be Base Rate Loans) and
Revolving Loans that are Base Rate Loans, monthly in arrears on the last day of
each calendar month and the interest rate shall be equal to the Base Rate plus
the Applicable Percentage on the outstanding amount of each such Base Rate Loan,
and (b) for Revolving Loans that are Eurodollar Loans, on the last day of the
applicable Interest Period (unless the Interest Period is greater than three
months, then, also on the last day of each three-month period during such
Interest Period), and the interest rate shall be equal to the Eurodollar Rate
plus the Applicable Percentage on the outstanding amount of each such Eurodollar
Loan. In the event of any change in the Base Rate, the rate hereunder shall
change, effective as of the day the Base Rate changes. All interest rates and
fees hereunder shall be calculated based on a 360 day year for the actual number
of days elapsed, unless and except to
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the extent otherwise expressly provided herein. If an interest payment date
falls on a date which is not a Business Day, then, such interest payment date
shall be deemed to be the next succeeding Business Day, except that, in the case
of Eurodollar Loans, where the next succeeding Business Day falls in the next
succeeding calendar month, then, such interest payment date shall be deemed to
be the next preceding Business Day. The Base Rate on the date hereof is 9.50%
per annum; and, therefore, the rate of interest in effect hereunder on the date
hereof, expressed in simple interest terms, is 10.50% per annum with respect to
any portion of the Loans bearing interest as a Base Rate Loan made on the date
hereof.
4.2 INTEREST AFTER EVENT OF DEFAULT.
Interest on any amount of matured principal under the Loans, and
interest on the amount of principal under the Loans outstanding as of the date
an Event of Default occurs, and at all times thereafter until the earlier of the
date upon which (a) all Obligations have been paid and satisfied in full or (b)
such Event of Default shall have been cured or waived, shall be payable on
demand at a rate equal to the Base Rate, plus the highest Applicable Percentage,
plus two percent (2%) (the "Default Rate"). Interest shall be payable on any
other amount due hereunder and shall accrue at the Default Rate, from the date
due and payable until paid in full. The rates hereunder shall be calculated
based on a 360-day year for the actual number of days elapsed.
4.3 UNUSED LINE FEE.
On the last day of each calendar month, the Borrower shall pay to the
Administrative Agent for the benefit of the Lenders the Unused Line Fee due in
respect of such calendar month.
4.4 LENDERS' FEES/ADMINISTRATIVE AGENT'S FEES.
On the Closing Date, the Administrative Agent shall pay to each Lender
its respective Lender's Fees that are required to be paid on the Closing Date
pursuant to the terms of such Lender's fee letter with the Administrative Agent.
The Borrower shall pay all fees required to be paid to the Administrative Agent
under the Fee Letter at the times and in the amounts set forth therein.
4.5 LETTER OF CREDIT FEES.
(a) Letter of Credit Fees. In consideration of the
issuance of Letters of Credit hereunder, the Borrower shall pay to the
Administrative Agent for the account of each Lender a fee (the "Letter
of Credit Fee") on such Lender's Revolving Credit Commitment Percentage
of the average daily maximum amount available to be drawn under each
such standby Letter of Credit computed at a per annum rate for each day
from the date of issuance to the date of expiration equal to two
percent (2%) per annum. The Letter of Credit Fee will be payable
monthly in arrears on the last day of each calendar month.
(b) Issuing Bank Fees. In addition to the Letter of
Credit Fee payable pursuant to clause (a) above, the Borrower shall pay
to the Issuing Bank for its own account without sharing by the other
Lenders the letter of credit fronting and negotiation
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fees agreed to by the Borrower and the Issuing Bank from time to time
and the customary charges from time to time of the Issuing Bank with
respect to the issuance, amendment, transfer, administration,
cancellation and conversion of, and drawings under, such Letters of
Credit (collectively, the "Issuing Bank Fees").
4.6 AUTHORIZATION TO CHARGE ACCOUNT.
The Borrower hereby authorizes the Administrative Agent to charge the
Borrower's Loan accounts with the amount of all payments and fees due hereunder
to the Lenders, the Swingline Lender, the Administrative Agent and the Issuing
Bank as and when such payments become due. The Borrower confirms that any
charges which the Administrative Agent may so make to the Borrower's Loan
accounts as herein provided will be made as an accommodation to the Borrower and
solely at the Administrative Agent's discretion.
4.7 INDEMNIFICATION IN CERTAIN EVENTS.
If, after the Closing Date, either (a) any change in or in the
interpretation of any law or regulation is introduced, including, without
limitation, with respect to reserve requirements, applicable to First Union or
any other banking or financial institution from whom any of the Lenders borrow
funds or obtain credit (a "Funding Bank") or any of the Lenders, or (b) a
Funding Bank or any of the Lenders complies with any future guideline or request
from any central bank or other Governmental Authority or (c) a Funding Bank or
any of the Lenders determines that the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change therein, or any change in
the interpretation or administration thereof by any Governmental Authority,
central bank or comparable agency charged with the interpretation or
administration thereof has or would have the effect described below, or a
Funding Bank or any of the Lenders complies with any request or directive
regarding capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, and in the case of any event set
forth in this clause (c), such adoption, change or compliance has or would have
the direct or indirect effect of reducing the rate of return on any of the
Lenders' capital as a consequence of its obligations hereunder to a level below
that which such Lender could have achieved but for such adoption, change or
compliance (taking into consideration the Funding Bank's or Lenders' policies
with respect to capital adequacy) by an amount deemed by such Lender to be
material, and the result of any of the foregoing events described in clauses
(a), (b) or (c) is or results in an increase in the cost to any of the Lenders
of funding or maintaining the Revolving Credit Committed Amount, the Revolving
Loans or the Letters of Credit, then, the Borrower shall from time to time upon
demand by the Administrative Agent, pay to the Administrative Agent additional
amounts sufficient to indemnify the Lenders against such increased cost (without
duplication, however, of any costs included in the definition of "Eurodollar
Rate"). A certificate as to the amount of such increased cost shall be submitted
to the Borrower by the Administrative Agent and shall be conclusive and binding
absent manifest error.
4.8 INABILITY TO DETERMINE INTEREST RATE.
If prior to the first day of any Interest Period, (a) the
Administrative Agent shall have determined in good faith (which determination
shall be conclusive and binding upon the
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Borrower) that, by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the Eurodollar Rate
for such Interest Period, (b) the Administrative Agent has received notice from
the Required Lenders that the Eurodollar Rate determined or to be determined for
such Interest Period will not adequately and fairly reflect the cost to such
Lenders of making or maintaining their Eurodollar Loans during such Interest
Period, or (c) Dollar deposits in the principal amounts of the Eurodollar Loans
to which such Interest Period is to be applicable are not generally available in
the London interbank market, the Administrative Agent shall give telecopy or
telephonic notice thereof to the Borrower and the Lenders as soon as practicable
thereafter, and will also give prompt written notice to the Borrower when such
conditions no longer exist. If such notice is given (i) any Eurodollar Loans
requested to be made on the first day of such Interest Period shall be made as
Base Rate Loans, (ii) any Loans that were to have been converted on the first
day of such Interest Period to or continued as Eurodollar Loans shall be
converted to or continued as Base Rate Loans and (iii) each outstanding
Eurodollar Loan shall be converted, on the last day of the then current Interest
Period thereof, to Base Rate Loans. Until such notice has been withdrawn by the
Administrative Agent, no further Eurodollar Loans shall be made or continued as
such, nor shall the Borrower have the right to convert Base Rate Loans to
Eurodollar Loans.
4.9 ILLEGALITY.
Notwithstanding any other provision herein, if the adoption of or any
change in any law, treaty, rule or regulation or final, non-appealable
determination of an arbitrator or a court or other Governmental Authority or in
the interpretation or application thereof occurring after the Closing Date shall
make it unlawful for any Lender to make or maintain Eurodollar Loans as
contemplated by this Credit Agreement, (a) such Lender shall promptly give
written notice of such circumstances to the Borrower and the Administrative
Agent (which notice shall be withdrawn whenever such circumstances no longer
exist), (b) the commitment of such Lender hereunder to make Eurodollar Loans,
continue Eurodollar Loans as such and convert a Base Rate Loan to Eurodollar
Loans shall forthwith be canceled and, until such time as it shall no longer be
unlawful for such Lender to make or maintain Eurodollar Loans, such Lender shall
then have a commitment only to make a Base Rate Loan when a Eurodollar Loan is
requested and (c) such Lender's Loans then outstanding as Eurodollar Loans, if
any, shall be converted automatically to Base Rate Loans on the respective last
days of the then current Interest Periods with respect to such Loans or within
such earlier period as required by law. If any such conversion of a Eurodollar
Loan occurs on a day which is not the last day of the then current Interest
Period with respect thereto, the Borrower shall pay to such Lender such amounts,
if any, as may be required pursuant to Section 4.10.
4.10 FUNDING INDEMNITY.
The Borrower shall indemnify each Lender and to hold each Lender
harmless from any loss or expense which such Lender may sustain or incur (other
than through such Lender's gross negligence or willful misconduct) as a
consequence of (a) default by the Borrower in making a borrowing of, conversion
into or extension of Eurodollar Loans after the Borrower have given a notice
requesting the same in accordance with the provisions of this Credit Agreement,
(b) default by the Borrower in making any prepayment of a Eurodollar Loan after
the Borrower have given a notice thereof in accordance with the provisions of
this Credit Agreement, and (c) the
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making of a prepayment of Eurodollar Loans on a day which is not the last day of
an Interest Period with respect thereto. With respect to Eurodollar Loans, such
indemnification may include an amount equal to the excess, if any, of (i) the
amount of interest which would have accrued on the amount so prepaid, or not so
borrowed, converted or extended, for the period from the date of such prepayment
or of such failure to borrow, convert or extend to the last day of the
applicable Interest Period (or, in the case of a failure to borrow, convert or
extend, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Eurodollar
Loans provided for herein over (ii) the amount of interest (as reasonably
determined by such Lender) which would have accrued to such Lender on such
amount by placing such amount on deposit for a comparable period with leading
banks in the interbank Eurodollar market. This covenant shall survive the
termination of this Credit Agreement and the payment of the Loans and all other
amounts payable hereunder.
4.11 EARLY TERMINATION FEE.
In the event that, pursuant to Section 2.2(c), the Borrower voluntarily
prepays in full all Obligations and terminates all Commitments at any time prior
to the second anniversary of the Closing Date, then, notwithstanding any terms
thereof or of this Credit Agreement to the contrary, the Borrower shall pay to
the Administrative Agent, for the benefit of the Lenders, on the date on which
such prepayment and termination becomes effective, an early termination fee, to
compensate the Lenders for the loss of their bargain, and not as a penalty, an
amount equal to the product of (i) the original Revolving Credit Committed
Amount; i.e., $100,000,000, multiplied by (ii) a percentage, which shall equal
(A) one percent (1%), if the foregoing occurs on or prior to the first
anniversary of the Closing Date, and (B) one-half of one percent (1/2%), if the
foregoing occurs after the first such anniversary but on or before the second
anniversary of the Closing Date. This early termination fee shall be in addition
to, and separate from, any other fees and charges associated with such
prepayment and termination, as provided herein or in any other Credit Document.
ARTICLE V
CONDITIONS PRECEDENT
The obligation of the Lenders to make any Revolving Loan or of the
Issuing Bank to issue any Letter of Credit hereunder is subject to the
satisfaction of, or waiver of, immediately prior to or concurrently with the
making of such Revolving Loan or issuance of such Letter of Credit the following
conditions precedent:
5.1 CLOSING CONDITIONS.
The obligation of each Lender to make the Loans and/or of the
Issuing Bank to issue Letters of Credit hereunder shall be subject to the
satisfaction, on or prior to the Closing Date, of the following conditions
precedent:
(a) Executed Credit Documents. Receipt by the
Administrative Agent of duly executed originals of this Credit
Agreement; the Notes; the Security Documents; and all
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other Credit Documents, each in form and substance acceptable to the
Administrative Agent in its sole discretion.
(b) Organizational Documents. Receipt by the
Administrative Agent of the following for each Obligor:
(i) Charter Documents. Copies of the articles or
certificates of incorporation or other formation or charter
documents of each Obligor certified to be true and complete as
of a recent date by the appropriate Governmental Authority of
the state or other jurisdiction of its incorporation or
organization and certified by a secretary or assistant
secretary of such Obligor to be true and correct as of the
Closing Date.
(ii) Bylaws. A copy of the bylaws or operating
agreement or similar agreement of each Obligor certified by a
secretary or assistant secretary of such Obligor to be true
and correct as of the Closing Date.
(iii) Resolutions. Copies of resolutions of the
Board of Directors or similar managing body of each Obligor
approving and adopting the Credit Documents to which it is a
party, the transactions contemplated therein and authorizing
execution and delivery thereof, certified by a secretary or
assistant secretary of such Obligor to be true and correct and
in force and effect as of the Closing Date.
(iv) Good Standing. Copies of certificates of
good standing, existence or its equivalent with respect to
each Obligor certified as of a recent date by the appropriate
Governmental Authorities of the state or other jurisdiction of
incorporation or organization and each other jurisdiction in
which the failure to so qualify and be in good standing could
reasonably be expected to have a Material Adverse Effect.
(v) Incumbency. A certificate of each Obligor
certified by a secretary or assistant secretary to be true and
correct as of the Closing Date, confirming the incumbency of
the officer(s) of each Obligor authorized to execute the
Credit Documents, together with the matters disclosed in
clauses (i) through (iv) hereinabove; to be substantially in
the form of Exhibit J.
(c) Financial Statements. Receipt by the Administrative
Agent and the Lenders of the financial statements and other information
described in Section 6.6 and such other information relating to the
Obligors as the Administrative Agent may reasonably require in
connection with the structuring and syndication of credit facilities of
the type described herein.
(d) Opinions of Counsel. Receipt by the Administrative
Agent of an opinion, or opinions (which shall cover, among other
things, authority, legality, validity, binding effect, enforceability
and attachment and perfection of liens), satisfactory to the
Administrative Agent, addressed to the Administrative Agent and the
Lenders and dated
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the Closing Date, from legal counsel to the Obligor, to be
substantially in the form of Exhibit K.
(e) Personal Property Collateral. Receipt by the Administrative
Agent of:
(i) searches of Uniform Commercial Code filings
in the jurisdiction of the chief executive office of each
Obligor and each jurisdiction where any Collateral is located
or where a filing would need to be made in order to perfect
the Administrative Agent's security interest in the
Collateral, copies of the financing statements on file in such
jurisdictions and evidence that no Liens exist other than
Permitted Liens;
(ii) duly executed UCC financing statements for
each appropriate jurisdiction as is necessary, in the
Administrative Agent's commercially reasonable judgment, to
perfect the Administrative Agent's security interest in the
Collateral;
(iii) searches of ownership of intellectual
property in the appropriate governmental offices and such
patent/trademark/copyright filings as requested by the
Administrative Agent in order to perfect the Administrative
Agent's security interest in the Collateral;
(iv) all stock certificates evidencing the
Capital Stock pledged to the Administrative Agent pursuant to
the Pledge Agreement, together with duly executed in blank
undated stock powers attached thereto;
(v) all instruments and chattel paper in the
possession of any of the Obligors, together with allonges or
assignments as may be necessary or appropriate to perfect the
Administrative Agent's security interest in the Collateral to
the extent required under the Security Agreement; and
(vi) Lockbox Agreements with respect to all
deposit accounts of the Obligors, except for ▇▇▇▇▇ cash and
payroll accounts.
(f) Priority of Liens. Receipt by the Administrative Agent of
satisfactory evidence that (i) the Administrative Agent, on behalf of
the Lenders, holds a perfected, first priority Lien on all Collateral
(subject to clause (ii)) and (ii) none of the Collateral is subject to
any other Liens other than Permitted Liens.
(g) Opening Borrowing Base Certificate. Receipt by the
Administrative Agent of a Borrowing Base Certificate, substantially in
the form of Exhibit L and certified by an Authorized Officer of the
Borrower to be true and correct as of not earlier than November 30,
2000.
(h) Evidence of Insurance. Receipt by the Administrative Agent
of copies of insurance policies or certificates of insurance of the
Borrower evidencing liability and casualty insurance meeting the
requirements set forth in the Credit Documents, including, without
limitation, naming the Administrative Agent as loss payee on behalf of
the
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Lenders as additional insured and copies of credit insurance policies
insuring foreign Accounts to be included as Eligible Accounts
Receivable. Each loss payee endorsement shall be substantially in the
form of Exhibit L.
(i) Corporate Structure. The corporate capital and ownership
structure of the Borrower and its Subsidiaries is described in Schedule
6.9. Both the corporate capital and ownership structure and the senior
management shall be satisfactory to the Administrative Agent.
(j) Consents. Receipt by the Administrative Agent of evidence
that all governmental, shareholder and third party consents and
approvals required in connection with the transactions and the related
financings contemplated hereby and expiration of all applicable waiting
periods without any action being taken by any authority that could
restrain, prevent or impose any material adverse conditions on such
transactions or that could seek or threaten any of the foregoing, and
no law or regulation shall be applicable which in the judgment of the
Administrative Agent could have such effect.
(k) Litigation. There shall not exist any pending or
threatened action, suit, investigation or proceeding against any
Obligor or its assets that could reasonably be expected to have a
Material Adverse Effect.
(l) Other Indebtedness. Receipt by the Administrative Agent of
evidence that, after giving effect to the making of the Loans made on
the Closing Date, the Obligors shall have no Funded Indebtedness other
than the Indebtedness under the Credit Documents and as disclosed on
Schedule 1.1C.
(m) Closing Certificate. Receipt by the Administrative Agent
of a certificate or certificates executed by the president or chief
financial officer of the Borrower as of the Closing Date, to be
substantially in the form of Exhibit M, stating that (i) after giving
effect to the making of the Loans and application of the proceeds
thereof, each Obligor is in compliance with all existing financial
obligations, (ii) all governmental, shareholder and third party
consents and approvals, if any, with respect to the Credit Documents
and the transactions contemplated thereby have been obtained, (iii) no
action, suit, investigation or proceeding is pending or threatened in
any court or before any arbitrator or governmental instrumentality that
purports to affect any Obligor or any transaction contemplated by the
Credit Documents, if such action, suit, investigation or proceeding
could reasonably be expected to have a Material Adverse Effect and (iv)
immediately after giving effect to this Credit Agreement, the other
Credit Documents and all the transactions contemplated therein to occur
on such date, (A) each of the Obligors is solvent, (B) no Default or
Event of Default exists, (C) all representations and warranties
contained herein and in the other Credit Documents are true and correct
in all material respects, (D) the Borrower are in compliance with each
of the financial covenants set forth in Article VIII and (E) the
Borrower shall have Excess Availability of at least Twenty-Five Million
Dollars ($25,000,000).
(n) Fees and Expenses. Receipt of the Administrative Agent of
payment from the Borrower of all fees and expenses owed by them to the
Lenders and the
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Administrative Agent, including, without limitation, payment to the
Administrative Agent of the fees set forth in the Fee Letter.
(o) Account Designation Letter. Receipt by the
Administrative Agent of an account designation letter from the Borrower
(the "Account Designation Letter"), in substantially the form of
Exhibit N.
(p) Collateral Disclosure Certificate. Receipt by the
Administrative Agent of a Collateral Disclosure Certificate from each
Obligor, to be substantially in the form of Exhibit O.
(q) Authorized Persons Letter. Receipt by the
Administrative Agent of a letter from the Borrower regarding the
authorization of certain Persons (individuals) to request financial
accommodations hereunder on behalf of the Borrower, to be substantially
in the form of Exhibit P.
(r) Disbursement Instructions Letter. Receipt by the
Administrative Agent of a letter from the Borrower regarding the
disposition of the proceeds of the initial disbursements of Revolving
Loans hereunder, to be substantially in the form of Exhibit Q.
(s) Intellectual Property Agreements. Receipt by the
Administrative Agent of a Trademark Security Agreement, in
substantially the form of Exhibit R, executed by each Obligor owning
trademarks registered with the U.S. Patent & Trademark Office ("USPTO")
on the Closing Date.
(t) Material Adverse Change. No Material Adverse Change,
or development reasonably likely to have a Material Adverse Effect,
shall have occurred since December 31, 1999, (ii) no occurrence or
event which is reasonably likely to have a Material Adverse Effect
shall have occurred since December 31, 1999, and be continuing.
(u) Other. Receipt by the Administrative Agent of such
other documents, instruments, agreements or information as reasonably
requested by any Lender, including, without limitation, information
regarding litigation, tax, accounting, labor, insurance, pension
liabilities (actual or contingent), real estate leases, material
contracts, debt agreements, property ownership and contingent
liabilities of the Borrower.
5.2 CONDITION TO ALL LOANS AND LETTERS OF CREDIT.
(a) On the date of the making of any Loan or the issuance
of any Letter of Credit, both before and after giving effect thereto
and to the application of the proceeds therefrom, the following
statements shall be true to the satisfaction of the Administrative
Agent (and each request for a Loan and request for a Letter of Credit,
and the acceptance by the Borrower of the proceeds of such Loan or
issuance of such Letter of Credit, shall constitute a representation
and warranty by the Borrower that on the date of such Loan or issuance
of such Letter of Credit before and after giving effect thereto and to
the application of the proceeds therefrom, such statements are true):
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(i) the representations and warranties contained
in this Credit Agreement are true and correct in all material
respects on and as of the date of such Loan or issuance of
such Letter of Credit as though made on and as of such date,
except to the extent that such representations and warranties
expressly relate solely to an earlier date (in which case such
representations and warranties shall have been true and
complete in all material respects on and as of such earlier
date);
(ii) no event has occurred and is continuing, or
would result from such Loan or issuance of such Letter of
Credit or the application of the proceeds thereof, which would
constitute a Default or an Event of Default under this Credit
Agreement; and
(iii) no Material Adverse Change, or development
reasonably likely to have a Material Adverse Effect shall have
occurred and be continuing.
(b) Notice of Borrowing. On the date of the making of any
Revolving Loan, the Administrative Agent shall have received a Notice
of Borrowing to the extent such Notice of Borrowing is required to be
given with respect to the making of such Revolving Loan.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Credit Agreement and
the Issuing Bank to issue the Letters of Credit, and to make available the
credit facilities contemplated hereby, each Obligor hereby represents and
warrants to the Lenders and the Issuing Bank as of the Closing Date, the Closing
Date and on the date of each extension of credit hereunder, as follows:
6.1 ORGANIZATION AND QUALIFICATION.
Such Obligor and each of its Subsidiaries (i) is a corporation or
limited liability company duly organized, validly existing and in good standing
under the laws of the state of its organization, (ii) has the power and
authority to own its properties and assets and to transact the businesses in
which it is presently, or proposes to be, engaged, and (iii) is duly qualified
and is authorized to do business and is in good standing in every jurisdiction
in which the failure to be so qualified could reasonably be expected to have a
Material Adverse Effect. Schedule 6.1 contains a true, correct and complete list
of all jurisdictions in which such Obligor and its Subsidiaries are qualified to
do business as a foreign corporation or foreign limited liability company as of
the Closing Date.
6.2 SOLVENCY.
The fair saleable value of such Obligor's assets exceeds all probable
liabilities, including those to be incurred pursuant to this Credit Agreement.
Such Obligor (i) does not have
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unreasonably small capital in relation to the business in which it is or
proposes to be engaged or (ii) has not incurred, and does not believe that it
will incur after giving effect to the transactions contemplated by this Credit
Agreement, debts beyond its ability to pay such debts as they become due.
6.3 LIENS; INVENTORY.
There are no Liens in favor of third parties with respect to any of the
Collateral, including, without limitation, with respect to the Inventory,
wherever located, other than Permitted Liens. To the best of such Obligor's
knowledge, no lessor, warehouseman, filler, processor or packer of such Obligor
has granted any Lien with respect to the Inventory maintained by such Obligor at
the property of any such lessor, warehousemen, filler, processor or packer. Upon
the proper filing of financing statements and the proper recordation of other
applicable documents with the appropriate filing or recordation offices in each
of the necessary jurisdictions, the security interests granted pursuant to the
Credit Documents constitute and shall at all times constitute valid and
enforceable first, prior and perfected Liens on the Collateral (other than
Permitted Liens). The Obligors are or will be at the time additional Collateral
is acquired by them, the absolute owners of the Collateral with full right to
pledge, sell, consign, transfer and create a Lien therein, free and clear of any
and all Liens in favor of third parties, except Permitted Liens. The Obligors
and the Subsidiaries will at their expense warrant, until payment in full of the
Obligations and termination of the Commitments, and, at the Administrative
Agent's request, defend the Collateral from any and all Liens (other than
Permitted Liens) of any third party. The Obligors will not, and will not permit
any of their Subsidiaries to, grant, create or permit to exist, any Lien upon
the Collateral, or any proceeds thereof, in favor of any third party (other than
Permitted Liens).
6.4 NO CONFLICT.
The execution and delivery by such Obligor of this Credit Agreement and
each of the other Credit Documents executed and delivered in connection herewith
and the performance of the obligations of such Obligor hereunder and thereunder
and the consummation by such Obligor of the transactions contemplated hereby and
thereby: (i) are within the corporate or other organizational, as the case may
be, powers of such Obligor; (ii) are duly authorized by the Board of Directors
or similar managing body of such Obligor; (iii) are not in contravention of the
terms of the organizational documents of such Obligor or of any indenture,
contract, lease, agreement instrument or other commitment to which such Obligor
is a party or by which such Borrower or any of its properties are bound; (iv) do
not require the consent, registration or approval of any Governmental Authority
or any other Person (except such as have been duly obtained, made or given, and
are in full force and effect); (v) do not contravene any statute, law, ordinance
regulation, rule, order or other governmental restriction applicable to or
binding upon such Obligor; and (vi) will not, except as contemplated herein for
the benefit of the Administrative Agent on behalf of the Lenders, result in the
imposition of any Liens upon any property of such Obligor under any existing
indenture, mortgage, deed of trust, loan or credit agreement or other material
agreement or instrument to which such Obligor is a party or by which it or any
of its property may be bound or affected.
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6.5 ENFORCEABILITY.
This Credit Agreement and all of the other Credit Documents are the
legal, valid and binding obligations of such Obligor, and with respect to those
Credit Documents executed and delivered by any Subsidiary, of each such
Subsidiary, and are enforceable against such Obligor and such Subsidiaries, as
the case may be, in accordance with their terms except as such enforceability
may be limited by (i) the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
and (ii) general principles of equity.
6.6 FINANCIAL DATA; MATERIAL ADVERSE CHANGE.
(a) The Obligors have furnished to the Lenders the
following financial statements (the "Financials"): (i) the balance
sheet of the Obligors as of, AND statements of income, retained
earnings and changes in financial position for, the fiscal year ended
December 31, 1999 audited by independent certified public accountants,
and (ii) the unaudited balance sheet of the Obligors as of, and
statement of income, retained earnings and changes in financial
position for the period ending September 30, 2000 prepared by an
Authorized Officer of the Borrower. The Financials are and the
historical financial statements to be furnished to the Lenders in
accordance with subsection 7.1 below will be in accordance with the
books and records of the Obligors and fairly present the financial
condition of the Obligors at the dates thereof and the results of
operations for the periods indicated (subject, in the case of unaudited
financial statements, to normal year-end adjustments), and such
financial statements have been and will be prepared in conformity with
GAAP consistently applied throughout the periods involved.
(b) Since the date of the Financials, there have been no
changes in the condition, financial or otherwise, of any of the
Obligors as shown on the respective balance sheets of such predecessor
corporations and each of the Obligors described above, except (a) as
contemplated herein and (b) for changes in the ordinary course of
business (none of which individually or in the aggregate constitutes a
Material Adverse Change).
6.7 LOCATIONS OF OFFICES, RECORDS AND INVENTORY.
The Obligors' principal places of business and chief executive offices
are set forth in Schedule 6.7 hereto, and the books and records of the Obligors
and all chattel paper and all records of accounts are located at the principal
places of business and chief executive offices of the Obligors. There is no
jurisdiction in which any Obligor or any of its Subsidiaries has any Collateral
(except for vehicles, Inventory held for shipment by third Persons, Inventory in
transit, Inventory held for processing by third Persons, or immaterial
quantities of assets, equipment or Inventory) other than those jurisdictions
listed on Schedule 6.7. Schedule 6.7 is a true, correct and complete list of (i)
the legal names and addresses of each warehouseman, filler, processor and packer
at which Inventory is stored, (ii) the address of the chief executive offices of
the Obligors and each of their Subsidiaries and (iii) the address of all offices
where records and books of account of the Obligors and each of their
Subsidiaries are kept. None of the receipts received by any of the Obligors from
any warehouseman, filler, processor or packer states that the goods covered
thereby are to be delivered to bearer or to the order of a named person or to a
named person and such named person's assigns.
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6.8 FICTITIOUS BUSINESS NAMES.
Neither such Obligor nor any of its Subsidiaries has used any corporate
or fictitious name during the five (5) years preceding the date hereof, other
than the name shown on its or such Subsidiary's articles or certificate of
incorporation or formation and as set forth on Schedule 6.8.
6.9 SUBSIDIARIES.
The only direct or indirect Subsidiaries of the Obligors, both before
and after giving effect to the Reorganization, are those listed on Schedule 6.9
attached hereto. The Obligors are the record and beneficial owners of all of the
shares of Capital Stock of each of the Subsidiaries listed on Schedule 6.9 as
being owned by the Obligors, there are no proxies, irrevocable or otherwise,
with respect to such shares, and no equity securities of any of the Subsidiaries
are or may become required to be issued by reason of any options, warrants,
scrip, rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into or exchangeable for,
shares of any Capital Stock of any Subsidiary, and there are no contracts,
commitments, understandings or arrangements by which any Subsidiary is or may
become bound to issue additional shares of its Capital Stock or securities
convertible into or exchangeable for such shares (other than pursuant to the
Reorganization). All of such shares so owned by the Obligors are owned by them
free and clear of any Liens other than Permitted Liens.
6.10 NO JUDGMENTS OR LITIGATION.
Except as set forth on Schedule 6.10, no judgments, orders, writs or
decrees are outstanding against such Obligor or any of its Subsidiaries nor is
there now pending or, to the best of such Obligor's knowledge after diligent
inquiry, threatened any litigation, contested claim, investigation, arbitration,
or governmental proceeding by or against such Obligor or any of its Subsidiaries
except judgments and pending or threatened litigation, contested claims,
investigations, arbitrations and governmental proceedings which could not
reasonably be expected to have a Material Adverse Effect.
6.11 NO DEFAULTS.
Neither such Obligor nor any of its Subsidiaries is in default under
any term of any indenture, contract, lease, agreement, instrument or other
commitment to which any of them is a party or by which any of them is bound
which default has had or could be reasonably expected to have a Material Adverse
Effect. Such Obligor knows of no dispute regarding any indenture, contract,
lease, agreement, instrument or other commitment to which it is a party or by
which it is bound which could reasonably be expected to have a Material Adverse
Effect.
6.12 NO EMPLOYEE DISPUTES.
There are no controversies pending or, to the best of such Obligor's
knowledge after diligent inquiry, threatened between such Obligor or any of its
Subsidiaries and any of their
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respective employees, other than those arising in the ordinary course of
business which could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect.
6.13 COMPLIANCE WITH LAW.
Neither such Obligor nor any of its Subsidiaries has violated or failed
to comply with any statute, law, ordinance, regulation, rule or order of any
foreign, federal, state or local government, or any other Governmental Authority
or any self regulatory organization, or any judgment, decree or order of any
court, applicable to its business or operations except where the aggregate of
all such violations or failures to comply could not reasonably be expected to
have a Material Adverse Effect. The conduct of the business of such Obligor and
each of the Subsidiaries is in conformity with all securities, commodities,
energy, public utility, zoning, building code, health, OSHA and environmental
requirements and all other foreign, federal, state and local governmental and
regulatory requirements and requirements of any self regulatory organizations,
except where such non-conformities could not reasonably be expected to have a
Material Adverse Effect. Neither such Obligor nor any of its Subsidiaries has
received any notice to the effect that, or otherwise been advised that, it is
not in compliance with, and neither such Obligor nor any of its Subsidiaries has
any reason to anticipate that any currently existing circumstances are likely to
result in the violation of any such statute, law, ordinance, regulation, rule,
judgment, decree or order which failure or violation could reasonably be
expected to have a Material Adverse Effect.
6.14 ERISA.
None of such Obligor, any Subsidiary or any ERISA Affiliate maintains
or contributes to any Benefit Plan other than those listed on Schedule 6.14.
Each Benefit Plan has been and is being maintained and funded in accordance with
its terms and in compliance in all material respects with all provisions of
ERISA and the Internal Revenue Code applicable thereto. Such Obligor, each of
its Subsidiaries and each ERISA Affiliate has fulfilled all obligations related
to the minimum funding standards of ERISA and the Internal Revenue Code for each
Benefit Plan, is in compliance in all material respects with the currently
applicable provisions of ERISA and of the Internal Revenue Code and has not
incurred any liability (other than routine liability for premiums) under Title
IV of ERISA, except where such liability could not reasonably be expected to
have a Material Adverse Effect. No Termination Event has occurred nor has any
other event occurred that may result in such a Termination Event, which could
reasonably be expected to have a Material Adverse Effect. No event or events
have occurred in connection with which such Obligor, any of its Subsidiaries,
any ERISA Affiliate, any fiduciary of a Benefit Plan or any Benefit Plan,
directly or indirectly, would be subject to any material liability, individually
or in the aggregate, under ERISA, the Internal Revenue Code or any other law,
regulation or governmental order or under any agreement, instrument, statute,
rule of law or regulation pursuant to or under which any such entity has agreed
to indemnify or is required to indemnify any person against material liability
incurred under, or for a material violation or failure to satisfy the
requirements of, any such statute, regulation or order.
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6.15 COMPLIANCE WITH ENVIRONMENTAL LAWS.
Except as disclosed on Schedule 6.15 attached hereto, (a) the
operations of such Obligor and each of its Subsidiaries comply in all material
respects with all applicable federal, state or local environmental, health and
safety statutes, regulations, or ordinance and (b) none of the operations of
such Obligor or any of its Subsidiaries is the subject of any judicial or
administrative proceeding alleging the violation of any federal, state or local
environmental, health or safety statute, regulation or ordinance, which, if
determined adversely to such Obligor, could reasonably be expected to have a
Material Adverse Effect. Except as disclosed on Schedule 6.15, none of the
operations of such Obligor or any of its Subsidiaries is the subject of any
federal or state investigation evaluating whether such Obligor or any of its
Subsidiaries disposed any hazardous or toxic waste, substance or constituent or
other substance at any site that may require remedial action, or any federal or
state investigation evaluating whether any remedial action is needed to respond
to a release of any hazardous or toxic waste, substance or constituent, or other
substance into the environment, which could reasonably be expected to have a
Material Adverse Effect. Except as disclosed on Schedule 6.15, neither such
Obligor nor any of its Subsidiaries have filed any notice under any federal or
state law indicating past or present treatment, storage or disposal of a
hazardous waste or reporting a spill or release of a hazardous or toxic waste,
substance or constituent, or other substance into the environment. Except as
disclosed on Schedule 6.15, neither such Obligor nor any of its Subsidiaries
have any material contingent liability of which such Obligor has knowledge or
reasonably should have knowledge in connection with any release of any hazardous
or toxic waste, substance or constituent, or other substance into the
environment, nor has such Obligor or any of its Subsidiaries received any
notice, letter or other indication of potential material liability arising from
the disposal of any hazardous or toxic waste, substance or constituent or other
substance into the environment.
6.16 USE OF PROCEEDS.
All proceeds of the Loans will be used only in accordance with Section
7.13.
6.17 INTELLECTUAL PROPERTY.
Such Obligor and each of its Subsidiaries possesses adequate assets,
licenses, patents, patent applications, copyrights, service marks, trademarks
and trade names to continue to conduct its business as heretofore conducted by
it. Schedule 6.17 attached hereto sets forth (a) all of the federal, state and
foreign registrations of trademarks, service marks and other marks, trade names
or other trade rights of such Obligor and its Subsidiaries, and all pending
applications for any such registrations, (b) all of the patents and copyrights
of such Obligor and its Subsidiaries and all pending applications therefor and
(c) all other trademarks, service marks and other marks, trade names and other
trade rights used by such Obligor or any of its Subsidiaries in connection with
their businesses (collectively, the "Proprietary Rights"). Such Obligor and its
Subsidiaries are collectively the owners of each of the trademarks listed on
Schedule 6.17 as indicated on such schedule, and no other Person has the right
to use any of such marks in commerce either in the identical form or in such
near resemblance thereto as may be likely to cause confusion or to cause mistake
or to deceive. Each of the trademarks listed on Schedule 6.17 is a federally
registered trademark of such Obligor or its Subsidiaries having the registration
number and issue date set forth on Schedule 6.17. Except as disclosed on
Schedule 6.17, no person has a right to receive any royalty or similar payment
in respect of any Proprietary Rights pursuant to any contractual arrangements
entered into by such Obligor, or any of its
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Subsidiaries and no person otherwise has a right to receive any royalty or
similar payment in respect of any such Proprietary Rights except as disclosed on
Schedule 6.17. Neither such Obligor nor any of its Subsidiaries has granted any
license or sold or otherwise transferred any interest in any of the Proprietary
Rights to any other person. The use of each of the Proprietary Rights by such
Obligor and its Subsidiaries is not infringing upon or otherwise violating the
rights of any third party in or to such Proprietary Rights, and no proceeding
has been instituted against or notice received by such Obligor or any of its
Subsidiaries that are presently outstanding alleging that the use of any of the
Proprietary Rights infringes upon or otherwise violates the rights of any third
party in or to any of the Proprietary Rights, except where such infringement or
other violation could not reasonably be expected to have a Material Adverse
Effect. Neither such Obligor nor any of its Subsidiaries have given notice to
any Person that it is infringing on any of the Proprietary Rights and to the
best of such Obligor's knowledge, no Person is infringing on any of the
Proprietary Rights. All of the Proprietary Rights of such Obligor and its
Subsidiaries are valid and enforceable rights of such Obligor and its
Subsidiaries and will not cease to be valid and in full force and effect by
reason of the execution and delivery of this Credit Agreement or the Credit
Documents or the consummation of the transactions contemplated hereby or
thereby.
6.18 LICENSES AND PERMITS.
Such Obligor and each of its Subsidiaries have obtained and hold in
full force and effect, all material franchises, licenses, leases, permits,
certificates, authorizations, qualifications, easements, rights of way and other
rights and approvals which are necessary or appropriate for the operation of
their businesses as presently conducted and as proposed to be conducted. Neither
of such Obligor nor any of its Subsidiaries is in violation of the terms of any
such franchise, license, lease, permit, certificate, authorization,
qualification, easement, right of way, right or approval except in any such case
which could not reasonably be expected to have a Material Adverse Effect.
6.19 TITLE TO PROPERTY.
Such Obligor has (i) good and marketable fee simple title to or valid
leasehold interests in all of its real property, including, without limitation,
the Real Estate (all such real property and the nature of such Obligor's or any
Subsidiary's interest therein is disclosed on Schedule 6.19) and (ii) good and
marketable title to all of its other property (including without limitation, all
real and other property in each case as reflected in the Financial Statements
delivered to the Administrative Agent hereunder), other than, with respect to
properties described in clause (ii) above, properties disposed of in the
ordinary course of business or in any manner otherwise permitted under this
Credit Agreement since the date of the most recent audited consolidated balance
sheet of such Obligor, and in each case subject to no Liens other than Permitted
Liens. Such Obligor and its Subsidiaries enjoy peaceful and undisturbed
possession of all its real property, including, without limitation, the Real
Estate, and there is no pending or, to the best of their knowledge, threatened
condemnation proceeding relating to any such real property. The leases with
respect to the leased property, together with any leases of real property
entered into by such Obligor after the date hereof, are referred to collectively
as the "Leases". None of the Leases contains provisions which have or could
reasonably be expected to have a Material Adverse Effect. No material default
exists under any Lease. All of the Structures and other
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tangible assets owned, leased or used by such Obligor or any of its Subsidiaries
in the conduct of their respective businesses are (a) insured to the extent and
in a manner customary in the industry in which such Obligor or such Subsidiaries
are engaged, (b) structurally sound with no known defects which have or could
reasonably be expected to have a Material Adverse Effect, (c) in good operating
condition and repair, subject to ordinary wear and tear, (d) not in need of
maintenance or repair except for ordinary, routine maintenance and repair the
cost of which is immaterial, (e) sufficient for the operation of the businesses
of such Obligor and its Subsidiaries as currently conducted and (f) in
conformity with all applicable laws, ordinances, orders, regulations and other
requirements (including applicable zoning, environmental, motor vehicle safety,
occupational safety and health laws and regulations) relating thereto, except
where the failure to conform could not reasonably be expected to have a Material
Adverse Effect.
6.20 LABOR MATTERS.
Neither such Obligor nor any of its Subsidiaries is engaged in any
material unfair labor practice. There is (a) no material unfair labor practice
complaint pending against such Obligor or any of its Subsidiaries or, to the
best knowledge of such Obligor, threatened against any of them, before the
National Labor Relations Board, and no grievance or arbitration proceeding
arising out of or under collective bargaining agreements that has or could
reasonably be expected to have a Material Adverse Effect is so pending against
such Obligor or any of its Subsidiaries or, to the best knowledge of such
Obligor, threatened against any of them, (b) no strike, labor dispute, slowdown
or stoppage pending against either of such Obligor or any of its Subsidiaries
or, to the best knowledge of such Obligor, threatened against any of them which
could reasonably be expected to have a Material Adverse Effect, and (c) no union
representation questions with respect to the employees of such Obligor or any
Subsidiaries and no union organizing activities which could reasonably be
expected to have a Material Adverse Effect.
6.21 INVESTMENT COMPANY.
Neither such Obligor nor any of its Subsidiaries is (a) an "investment
company" or a company "controlled" by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended, (b) a "holding company" or a
"subsidiary company" of a "holding company," or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company," within the meaning
of the Public Utility Holding Company Act of 1935, as amended, or (c) subject to
any other law which purports to regulate or restrict its ability to borrow money
or to consummate the transactions contemplated by this Credit Agreement or the
other Credit Documents or to perform its obligations hereunder or thereunder.
6.22 MARGIN SECURITY.
Such Obligor does not own any margin stock and no portion of the
proceeds of any Loans or Letters of Credit shall be used by the Obligors for the
purpose of purchasing or carrying any "margin stock" (as defined in Regulation U
of the Board of Governors of the Federal Reserve System) or for any other
purpose which violates the provisions or Regulation T, U or X of said Board of
Governors or for any other purpose in violation of any applicable statute or
regulation, or of the terms and conditions of this Credit Agreement.
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6.23 NO EVENT OF DEFAULT.
No Default or Event of Default has occurred and is continuing.
6.24 TAXES AND TAX RETURNS.
Each Obligor has filed, or caused to be filed, all material tax returns
(federal, state, local and foreign) required to be filed and paid all amounts of
taxes shown thereon to be due (including interest and penalties) and has paid
all other material taxes, fees, assessments and other governmental charges
(including mortgage recording taxes, documentary stamp taxes and intangibles
taxes) owing by it, except for such taxes (a) that are not yet delinquent or (b)
that are being contested in good faith and by proper proceedings, and against
which adequate reserves are being maintained in accordance with GAAP. None of
the Obligors is aware of any proposed material tax assessments against it or any
other Obligor.
6.25 NO OTHER INDEBTEDNESS.
Such Obligor has no Indebtedness that is senior, pari passu or
subordinated in right of payment to their Indebtedness to the Lenders hereunder,
except for Permitted Indebtedness.
6.26 STATUS OF ACCOUNTS.
Each Account is based on an actual and bona fide sale and delivery of
goods or rendition of services to customers, made by such Obligor in the
ordinary course of its business; the goods and inventory being sold and the
Accounts created are its exclusive property and are not and shall not be subject
to any Lien, consignment arrangement, encumbrance, security interest or
financing statement whatsoever, other than the Permitted Liens; and such
Obligor's customers have accepted the goods or services, owe and are obligated
to pay the full amounts stated in the invoices according to their terms, without
any dispute, offset, defense, counterclaim or contra that could reasonably be
expected to have, when aggregated with any such other disputes, offsets,
defenses, counterclaims or contras, a Material Adverse Effect. Such Obligor
confirms to the Lenders that any and all taxes or fees relating to its business,
its sales, the Accounts or the goods relating thereto, are its sole
responsibility and that same will be paid by such Obligor when due (unless duly
contested and adequately reserved for) and that none of said taxes or fees is or
will become a lien on or claim against the Accounts.
6.27 REPRESENTATIONS AND WARRANTIES.
As of the Closing Date, each of the representations and warranties made
in the Credit Documents by each of the Obligors and their Subsidiaries, and to
the knowledge of each such Obligor and its Subsidiaries, each other party
thereto is true and correct in all material respects, and such representations
and warranties are hereby incorporated herein by reference with the same effect
as though set forth in their entirety herein, as qualified therein.
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6.28 SURVIVAL OF REPRESENTATIONS.
All representations made by such Obligor in this Credit Agreement and
in any other Credit Document shall survive the execution and delivery hereof and
thereof.
6.29 AFFILIATE TRANSACTIONS.
Except as set forth on Schedule 6.29, neither such Obligor nor any of
its Subsidiaries is a party to or bound by any agreement or arrangement (whether
oral or written) to which any Affiliate of such Obligor or Subsidiary is a party
except (a) in the ordinary course of, and pursuant to the reasonable
requirements of, such Obligor's or such Subsidiary's business and (b) upon fair
and reasonable terms no less favorable to such Obligor and such Subsidiary than
it could obtain in a comparable arm's-length transaction with an unaffiliated
Person.
6.30 ACCURACY AND COMPLETENESS OF INFORMATION.
All factual information heretofore, contemporaneously or hereafter
furnished by or on behalf of the Obligors or any of their respective
Subsidiaries in writing to the Administrative Agent, any Lender, or the
Independent Accountant for purposes of or in connection with this Credit
Agreement or any Credit Documents, or any transaction contemplated hereby or
thereby is or will be true and accurate in all material respects on the date as
of which such information is dated or certified and not incomplete by omitting
to state any material fact necessary to make such information not misleading at
such time. There is no fact now known to any officer of any Obligor or any of
its Subsidiaries which has, or would have, a Material Adverse Effect which fact
has not been set forth herein, in the Financials, or any certificate, opinion or
other written statement made or furnished by any Obligor to the Administrative
Agent.
ARTICLE VII
AFFIRMATIVE COVENANTS
Until termination of this Credit Agreement and the Commitments
hereunder and payment and satisfaction of all Obligations (other than then
contingent indemnification obligations) due or to become due hereunder, each
Obligor agrees that, unless the Required Lenders shall have otherwise consented
in writing:
7.1 FINANCIAL INFORMATION.
The Borrower will furnish to the Lenders the following information
within the following time periods:
(a) within ninety (90) days after the close of the fiscal
year of the Borrower, (i) the audited consolidated and unaudited
consolidating balance sheets and statements of income and retained
earnings and of changes in cash flow of the Borrower and its
Subsidiaries, for such year, each in reasonable detail, each setting
forth in comparative form the corresponding figures for the preceding
year, prepared in accordance with GAAP, and accompanied by a report and
unqualified opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ L.L.P.,
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or other Independent Accountant selected by the Borrower and approved
by the Administrative Agent.
(b) within forty-five (45) days after the end of each
fiscal quarter of the Borrower other than the final fiscal quarter,
unaudited consolidated and consolidating financial statements as of the
end of such period and for such period then ended and for the period
from the beginning of the current fiscal year to the end of such
period, setting forth in comparative form the corresponding figures for
the comparable period in the preceding fiscal year, prepared in
accordance with GAAP (except that such quarterly statements need not
include footnotes and subject to year-end audit adjustments) and
certified by any officer described in paragraph (d) below;
(c) within forty-five (45) days after the end of each
fiscal month of the Borrower, for the fiscal months ending January 31,
2001 and February 28, 2001, and, thereafter, within thirty (30) days
after the end of each fiscal month of the Borrower other than the final
month of each fiscal quarter, unaudited consolidated and consolidating
financial statements as of the end of such period and for such period
then ended and for the period from the beginning of the current fiscal
year to the end of such period, setting forth in comparative form the
corresponding figures for the comparable period in the preceding fiscal
year, prepared in accordance with GAAP (except that such monthly
statements need not include footnotes and subject to year-end audit
adjustments) and certified by an Authorized Officer of the Borrower;
(d) at the time of delivery of each quarterly and annual
statement, a certificate, executed by an Authorized Officer of the
Borrower, in substantially the form of Exhibit S attached hereto (the
"Compliance Certificate"), and stating that such officer has caused
this Credit Agreement to be reviewed and has no knowledge of any
Default or Event of Default during such month or quarter or at the end
of such year, or, if such officer has such knowledge, specifying each
Default or Event of Default and the nature thereof, and showing
compliance by the Borrower as of the date of such statement with the
financial covenants set forth in Article VIII;
(e) not later than 12:00 Noon on the second Business Day
of each week, a certificate, to be substantially in the form of Exhibit
T (the "Borrowing Base Certificate"), duly completed and certified by
an Authorized Officer of the Borrower, detailing the Obligors' Eligible
Accounts Receivable as of the most recent date of determination (which
shall be determined not less frequently than monthly) and Eligible
Inventory as of each Friday of the immediately preceding week (unless
the Administrative Agent requires otherwise, in its commercially
reasonable judgment). Notwithstanding the foregoing, however, if (i) no
Event of Default or Default exists, and (ii) Average Excess
Availability is at least Fifteen Million Dollars, the Borrower, at its
election, may defer the reporting of the Borrowing Base from weekly to
monthly, in which event such report shall be due not later than the
thirtieth (30th) day of each month (or if such day is not a Business
Day, then, on the next succeeding Business Day). In addition, on the
thirtieth (30th) day of each month (or if such day is not a Business
Day, then on the next succeeding Business Day), the Borrower shall
furnish a written report to the Lenders setting forth (i) the accounts
receivable aged trial balance at the immediately
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preceding month end for each account debtor, aged by due date, which
aging reports shall indicate which Accounts are current, up to 30,
30-to-60 and over 60 days past due and shall list the names and
addresses of all applicable account debtors, (ii) a monthly accounts
payable aging with such aging to be in form satisfactory to the
Administrative Agent, (iii) a schedule of Inventory owned by each
Obligor by location and category, in summary form, together with, on at
least a quarterly basis, a detailed report in respect thereof, and (iv)
a monthly report on the addition of any new locations of Inventory
(including ISA Sites) and the entry into any new ISA. The
Administrative Agent may, but shall not be required to, rely on each
Borrowing Base Certificate delivered hereunder as accurately setting
forth the available Borrowing Base for all purposes of this Credit
Agreement until such time as a new Borrowing Base Certificate is
delivered to the Administrative Agent in accordance herewith; Borrowing
Base Certificates may be prepared and submitted to the Lenders on a
more frequent basis than weekly (or, in the Administrative Agent's
discretion, less frequently, but in no case less than monthly),
provided, however, that such certificate complies with the requirements
set forth elsewhere herein;
(f) promptly upon receipt thereof, copies of all
management letters and other material reports which are submitted to
the Borrower by its Independent Accountant in connection with any
annual or interim audit of the books of the Borrower made by such
accountants;
(g) as soon as practicable but, in any event, within ten
(10) Business Days after the issuance thereof, copies of such other
financial statements and reports as the Borrower shall send to its
stockholders as such, and copies of all regular and periodic reports
which the Borrower may be required to file with the Securities and
Exchange Commission or any similar or corresponding governmental
commission, department or agency substituted therefor, or any similar
or corresponding Governmental Authority;
(h) no later than the last Business Day of January during
each year when this Credit Agreement is in effect, a business plan and
budget for the current fiscal year of the Borrower which includes
projected consolidated and consolidating balance sheets, statements of
income and statements of cash flows on a monthly basis for such fiscal
year, together with projections of Loan usage and excess availability
for such fiscal year;
(i) promptly and in any event within two (2) Business
Days after becoming aware of the occurrence of a Default or Event of
Default, a certificate of Authorized Officer of the Borrower specifying
the nature thereof and the Obligors' proposed response thereto, each in
reasonable detail; and
(j) with reasonable promptness, such other data as the
Administrative Agent or any of the Lenders may reasonably request.
7.2 INVENTORY.
Within fifteen (15) days after the end of each month, upon the request
of the Administrative Agent from time to time, the Obligors will provide to the
Administrative Agent
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written statements listing items of Inventory in reasonable detail as requested
by the Administrative Agent.
7.3 CORPORATE EXISTENCE.
Except for the Reorganization, each Obligor and each of its
Subsidiaries (a) will maintain its current corporate or other organizational
existence, will maintain in full force and effect all material licenses, bonds,
franchise, leases, trademarks and qualifications to do business, (b) will obtain
or maintain patents, contracts and other rights necessary or desirable to the
profitable conduct of their businesses, (c) will continue in, and limit their
operations to, the same general lines of business as that presently conducted by
them and (d) will comply with all applicable laws and regulations of any
federal, state or local Governmental Authority, except where noncompliance could
not reasonably be expected to have a Material Adverse Effect.
7.4 ERISA.
The Obligors will deliver to the Administrative Agent, at the Obligors'
expense, the following information at the times specified below:
(a) within ten (10) Business Days after any Obligor, any
Subsidiary or any ERISA Affiliate knows or has reason to know that a
Termination Event has occurred which could reasonably be expected to
have a Material Adverse Effect, a written statement of the chief
financial officer or controller of the Borrower describing such
Termination Event and the action, if any, which the Obligors or other
such entities have taken, are taking or propose to take with respect
thereto, and when known, any action taken or threatened by the Internal
Revenue Service, DOL or PBGC with respect thereto;
(b) within ten (10) Business Days after any Obligor, any
Subsidiary or any ERISA Affiliate knows or has reason to know that a
prohibited transaction (as defined in Section 406 of ERISA and Section
4975 of the Internal Revenue Code) has occurred which could reasonably
be expected to have a Material Adverse Effect, a statement of the chief
financial officer or controller of the Borrower describing such
transaction and the action which the Obligors or other such entities
have taken, are taking or propose to take with respect thereto;
(c) within three (3) Business Days after the filing
thereof with the Internal Revenue Service, a copy of each funding
waiver request filed with respect to any Benefit Plan and all
communications received by any Obligor, involving a sum in excess of
Five Hundred Thousand Dollars ($500,000) any Subsidiary or any ERISA
Affiliate with respect to such request;
(d) within three (3) Business Days after receipt by any
Obligor, any Subsidiary or any ERISA Affiliate of the PBGC's intention
to terminate a Benefit Plan or to have a trustee appointed to
administer a Benefit Plan, copies of each such notice;
(e) within ten (10) Business Days after receipt by any
Obligor, any Subsidiary or any ERISA Affiliate of a notice regarding
the imposition of withdrawal liability
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involving a sum in excess of Five Hundred Thousand Dollars ($500,000),
copies of each such notice;
(f) within ten (10) Business Days after any Obligor, any
Subsidiary or any ERISA Affiliate fail to make a required installment
or any other required payment under Section 412 of the Internal Revenue
Code on or before the due date for such installment or payment, a
notification of such failure; and
(g) within three (3) Business Days after any Obligor, any
Subsidiary or any ERISA Affiliate know (a) a Multiemployer Plan has
been terminated, (b) the administrator or plan sponsor of a
Multiemployer Plan intends to terminate a Multiemployer Plan, or (c)
the PBGC has instituted or will institute proceedings under Section
4042 of ERISA to terminate a Multiemployer Plan, a written statement
setting forth any such event or information, except where such
termination under clauses (a), (b) or (c) could not reasonably be
expected to have a Material Adverse Effect.
For purposes of this Section 7.4, any Obligor, any Subsidiary and any
ERISA Affiliate shall be deemed to know all facts known by the administrator of
any Plan of which such entity is the plan sponsor.
The Obligors will establish, maintain and operate all Plans to comply
in all material respects with the provisions of ERISA, the Internal Revenue
Code, and all other applicable laws, and the regulations and interpretations
thereunder other than to the extent that the Obligors are in good faith
contesting by appropriate proceedings the validity or implication of any such
provision, law, rule, regulation or interpretation.
7.5 PROCEEDINGS OR ADVERSE CHANGES.
The Obligors will as soon as possible, and in any event within five (5)
Business Days after any Obligor learns of the following, give written notice to
the Administrative Agent of (i) any material proceeding(s) in which the Obligors
are alleged to have liability in excess of Five Hundred Thousand Dollars
($500,000) being instituted or threatened to be instituted by or against any
Obligor or any of its Subsidiaries in any federal, state, local or foreign court
or before any commission or other regulatory body (federal, state, local or
foreign), and (ii) any Material Adverse Change. Provision of such notice by the
Obligors will not constitute a waiver or excuse of any Default or Event of
Default occurring as a result of such changes or events.
7.6 ENVIRONMENTAL MATTERS.
Each Obligor will conduct its business and the businesses of each of
the Subsidiaries so as to comply in all material respects with all environmental
laws, regulations, and ordinances in all jurisdictions in which any of them is
or may at any time be doing business including, without limitation,
environmental land use, occupational safety or health laws, regulations,
ordinances, or permits in all jurisdictions in which any of them is or may at
any time be doing business, except to the extent that any Obligor or any of its
Subsidiaries are contesting, in good faith by appropriate legal proceedings, any
such law, regulation, direction, ordinance, or permit or the interpretation
thereof or application thereof; provided, further, that each Obligor and each of
the
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Subsidiaries will materially comply with the order of any court or other
governmental body of the applicable jurisdiction relating to such laws unless
such Obligor or the Subsidiaries shall currently be prosecuting an appeal or
proceedings for review and shall have secured a stay of enforcement or execution
or other arrangement postponing enforcement or execution pending such appeal or
proceedings for review. If any Obligor or any of its Subsidiaries shall (a)
receive written notice that any material violation of any federal, state or
local environmental law, regulation, ordinance may have been committed or is
about to be committed by such Obligor or any of its Subsidiaries, (b) receive
written notice from a governmental agency that any administrative or judicial
complaint or order has been filed or is about to be filed against such Obligor
or any of its Subsidiaries alleging material violations of any federal, state or
local environmental law, regulation, ordinance or permit, or requiring such
Obligor or any of its Subsidiaries to take action in connection with the release
of toxic or hazardous substances into the environment or (c) receive any written
notice from a federal, state, or local governmental agency alleging that such
Obligor or any of its Subsidiaries may be materially liable or responsible for
costs associated with a response to or cleanup of a release of a toxic or
hazardous substance into the environment or any damages caused thereby, the
Obligors will provide the Administrative Agent with a copy of such notice within
forty-five (45) days after the receipt thereof by the applicable Obligor or any
of its Subsidiaries. Within forty-five (45) days after any Obligor learns of the
enactment or promulgation of any federal, state or local environmental law,
regulation, ordinance, which could reasonably have a Material Adverse Effect,
such Obligor will provide the Administrative Agent with notice thereof. Each
Obligor will promptly take all actions necessary to prevent the imposition of
any Liens on any of its properties arising out of or related to any
environmental matters.
7.7 BOOKS AND RECORDS; INSPECTION.
Each Obligor will, and will cause each of its Subsidiaries to, maintain
books and records pertaining to the Collateral in such detail, form and scope as
is consistent with good business practice. Each Obligor agrees that upon at
least three (3) Business Days advance notice (which notice requirement shall be
deemed waived during any time that an Event of Default exists), the
Administrative Agent or its agents may enter upon the premises of each Obligor
or any of its Subsidiaries at any time and from time to time, during normal
business hours, and at any time at all on and after the occurrence of an Event
of Default and during its continuance, for the purpose of (a) enabling the
Administrative Agent's internal auditors or outside third party designees to
conduct field examinations at such Obligor's expense, (b) inspecting the
Collateral, (c) inspecting and/or copying (at the Obligors' expense) any and all
records pertaining thereto, (d) discussing the affairs, finances and business of
any Obligor with any officers, employees and directors of any Obligor or with
the Independent Accountant, and (e) verifying (in the name of an Obligor)
Eligible Accounts Receivable and Eligible Inventory. The Lenders, in the
reasonable discretion of the Administrative Agent, may accompany the
Administrative Agent at their sole expense in connection with the foregoing
inspections. Each Obligor agrees to afford the Administrative Agent at least
thirty (30) days prior written notice of any change in the location of any
Collateral (other than Inventory held for shipment by third Persons, Inventory
in transit, Inventory held for processing by third Persons or immaterial
quantities of assets, equipment or Inventory) or in the location of its chief
executive office or place of business from the locations specified in Schedule
6.7, except pursuant to the Reorganization, and to execute in advance of such
change, cause to be filed and/or delivered to the Administrative Agent any
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financing statements or other documents required by the Administrative Agent,
all in form and substance satisfactory to the Administrative Agent. Each Obligor
agrees to advise the Administrative Agent promptly, in sufficient detail, of any
substantial change relating to the type, quantity or quality of the Collateral
or any event which could reasonably be expected to have a Material Adverse
Effect. Each Obligor agrees to furnish any Lender with such other information
regarding its business affairs and financial condition as such Lender may
reasonably request from time to time.
7.8 COLLATERAL RECORDS.
Each Obligor will, and will cause each of the Subsidiaries to, execute
and deliver to the Administrative Agent, from time to time, solely for the
Administrative Agent's convenience in maintaining a record of the Collateral,
such written statements and schedules as the Administrative Agent may reasonably
require, including without limitation, those described in Section 7.1 of this
Credit Agreement, designating, identifying or describing the Collateral pledged
to the Lenders hereunder. Each Obligor's or any Subsidiary's failure, however,
to promptly give the Administrative Agent such statements or schedules shall not
affect, diminish, modify or otherwise limit the Lenders' security interests in
the Collateral. Such Obligor agrees to maintain such books and records regarding
Accounts and the other Collateral as the Administrative Agent may reasonably
require, and agrees that such books and records will reflect the Lenders'
interest in the Accounts and such other Collateral.
7.9 SECURITY INTERESTS.
Each Obligor will defend the Collateral against all claims and demands
of all Persons at any time claiming the same or any interest therein. Each
Obligor agrees to comply with the requirements of all state and federal laws in
order to grant to the Lenders valid and perfected security interests in the
Collateral. The Administrative Agent is hereby authorized by each Obligor to
file any financing statements covering the Collateral whether or not any
Obligor's signature appears thereon. Each Obligor agrees to do whatever the
Administrative Agent may reasonably request, from time to time, by way of:
filing notices of liens, financing statements, fixture filings and amendments,
renewals and continuations thereof; cooperating with the Administrative Agent's
custodians; keeping stock records; using commercially reasonable efforts to
obtain waivers from landlords and mortgagees and from warehousemen, fillers,
processors and packers and their respective landlords and mortgagees; paying
claims, which might if unpaid, become a Lien (other than a Permitted Lien) on
the Collateral; assigning its rights to the payment of Accounts pursuant to the
Assignment of Claims Act of 1940, as amended (31 U.S.C. ss.3727 et seq.) (the
failure of which so to assign will permit the Administrative Agent to exclude
such Accounts from the Borrowing Base); and performing such further acts as the
Administrative Agent may reasonably require in order to effect the purposes of
this Credit Agreement and the other Credit Documents. Without limitation of the
foregoing, on or prior to the effective date of the Reorganization, the Borrower
shall cause each of the Obligors party thereto, and any surviving Obligor, to
execute and deliver to the Administrative Agent financing statements, or
amendments thereof, reflecting the Reorganization. Any and all fees, costs and
expenses of whatever kind and nature (including any Taxes, reasonable attorneys'
fees or costs for insurance in accordance with Section 7.10), which the
Administrative Agent may incur with respect to the Collateral or the
Obligations: in filing public notices; in preparing or filing documents; making
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title examinations or rendering opinions; in protecting, maintaining, or
preserving the Collateral or its interest therein; in enforcing or foreclosing
the Liens hereunder, whether through judicial procedures or otherwise; or in
defending or prosecuting any actions or proceedings arising out of or relating
to its transactions with any Obligor or any of its Subsidiaries under this
Credit Agreement or any other Credit Document, will be borne and paid by the
Obligors. If same are not promptly paid by the Obligors, the Administrative
Agent may pay same on the Obligors' behalf, and the amount thereof shall be an
Obligation secured hereby and due to the Administrative Agent on demand.
7.10 INSURANCE; CASUALTY LOSS.
Each Obligor will, and will cause each of the Subsidiaries to, maintain
public liability insurance, third party property damage insurance and
replacement value insurance on the Collateral under such policies of insurance,
with such insurance companies, in such amounts and covering such risks as are at
all times satisfactory to the Administrative Agent in its commercially
reasonable judgment. All policies covering the Collateral are to name the
Obligors and the Administrative Agent as mortgagee/loss payee in case of loss,
as their interests may appear, and are to contain such other provisions as the
Administrative Agent may reasonably require to fully protect the Administrative
Agent's interest in the Collateral and to any payments to be made under such
policies. All liability insurance policies are to name the Administrative Agent
as additional insured. True copies of all original insurance policies or
certificates of insurance evidencing such insurance covering the Collateral are
to be delivered to the Administrative Agent on or prior to the Closing Date,
premium prepaid, with the loss payable endorsement in the Administrative Agent's
favor, and shall provide for not less than twenty (20) days prior written notice
to the Administrative Agent, of the exercise of any right of cancellation. In
the event any Obligor or any of its Subsidiaries fail to respond in a timely and
appropriate manner (as determined by the Administrative Agent in its
commercially reasonable judgment) with respect to collecting under any insurance
policies required to be maintained under this Section 7.10, the Administrative
Agent shall have the right, in the name of the Administrative Agent, any Obligor
or any Subsidiary, to file claims under such insurance policies, to receive and
give acquittance for any payments that may be payable thereunder, and to execute
any and all endorsements, receipts, releases, assignments, reassignments or
other documents that may be necessary to effect the collection, compromise or
settlement of any claims under any such insurance policies. Each Obligor will
provide written notice to the Lenders of the occurrence of any of the following
events within five (5) Business Days after it receives knowledge or notice of
the occurrence of such event: any asset or property owned or used by any Obligor
or any of its Subsidiaries is (i) materially damaged or destroyed, or suffers
any other loss or (ii) is condemned, confiscated or otherwise taken, in whole or
in part, or the use thereof is otherwise diminished so as to render
impracticable or unreasonable the use of such asset or property for the purpose
to which such asset or property were used immediately prior to such
condemnation, confiscation or taking, by exercise of the powers of condemnation
or eminent domain or otherwise, and in either case the amount of the damage,
destruction, loss or diminution in value of the Collateral which is in excess of
Five Hundred Thousand Dollars ($500,000) (collectively, a "Casualty Loss"). Each
Obligor will diligently file and prosecute its claim or claims for any award or
payment in connection with a Casualty Loss. In the event of a Casualty Loss, the
Obligors will pay to the Administrative Agent, promptly upon receipt thereof,
any and all insurance proceeds and payments received by any Obligor or any of
its Subsidiaries on account
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of damage, destruction or loss of all or any portion of the Collateral. The
Administrative Agent may, at its election and in its commercially reasonable
judgment, either (a) apply the proceeds realized from Casualty Losses to payment
of accrued and unpaid interest or outstanding principal of the Revolving Loans
or (b) pay such proceeds to the Obligors to be used to repair, replace or
rebuild the asset or property or portion thereof that was the subject of the
Casualty Loss. After the occurrence and during the continuance of an Event of
Default, (i) no settlement on account of any such Casualty Loss shall be made
without the consent of the Lenders and (ii) the Administrative Agent may
participate in any such proceedings and the Obligors will deliver to the
Administrative Agent such documents as may be requested by the Administrative
Agent to permit such participation and will consult with the Administrative
Agent, its attorneys and agents in the making and prosecution of such claim or
claims. Each Obligor hereby irrevocably authorizes and appoints the
Administrative Agent its attorney-in-fact, after the occurrence and during the
continuance of an Event of Default, to collect and receive for any such award or
payment and to file and prosecute such claim or claims, which power of attorney
shall be irrevocable and shall be deemed to be coupled with an interest, and
each Obligor shall, upon demand of the Administrative Agent, make, execute and
deliver any and all assignments and other instruments sufficient for the purpose
of assigning any such award or payment to the Administrative Agent for the
benefit of the Lenders, free and clear of any encumbrances of any kind or nature
whatsoever.
7.11 TAXES.
Each Obligor will, and will cause each of the Subsidiaries to, pay,
when due and in any event prior to delinquency, all Taxes lawfully levied or
assessed against any Obligor, any Subsidiary or any of the Collateral; provided,
however, that unless such Taxes have become a federal tax or ERISA Lien on any
of the assets of any Obligor or any Subsidiary, no such Tax need be paid if the
same is being contested in good faith, by appropriate proceedings promptly
instituted and diligently conducted and if an adequate reserve or other
appropriate provision shall have been made therefor as required in order to be
in conformity with GAAP.
7.12 COMPLIANCE WITH LAWS.
Each Obligor will, and will cause each of the Subsidiaries to, comply
with all acts, rules, regulations, orders, directions and ordinances of any
legislative, administrative or judicial body or official applicable to the
Collateral or any part thereof, or to the operation of its business, except
where the failure to so comply could not reasonably be expected to have a
Material Adverse Effect.
7.13 USE OF PROCEEDS.
The proceeds of any Revolving Loan advances made hereunder shall be
used by the Obligors solely to finance the working capital needs of the
Obligors, to repay existing Indebtedness, and to finance other general corporate
purposes of the Obligors, provided, however, that in any event, no portion of
the proceeds of any such advances shall be used by the Obligors for the purpose
of purchasing or carrying any "margin stock" (as defined in Regulation U of the
Board of Governors of the Federal Reserve System) or for any other purpose which
violates the provisions or Regulation T, U or X of said Board of Governors or
for any other
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purpose in violation of any applicable statute or regulation, or of the terms
and conditions of this Credit Agreement.
7.14 FISCAL YEAR.
Each Obligor agrees that it will not change its fiscal year from a year
ending December 31 unless required by law, in which case such Obligor will give
the Administrative Agent at least thirty (30) days prior written notice thereof.
7.15 NOTIFICATION OF CERTAIN EVENTS.
Each Obligor agrees that it will promptly notify the Administrative
Agent of the occurrence of any of the following events:
(a) any order, judgment or decree in excess of Five
Hundred Thousand Dollars ($500,000) shall have been entered against any
Obligor or any of its Subsidiaries or any of their respective
properties or assets, or
(b) any notification of violation of any law or
regulation or any inquiry shall have been received by any Obligor or
any of its Subsidiaries from any local, state, federal or foreign
Governmental Authority or agency which violation could reasonably be
expected to have a Material Adverse Effect.
7.16 ADDITIONAL AFFILIATE GUARANTORS.
Upon any Person becoming a direct or indirect Subsidiary of any
Obligor, such Obligor will provide the Administrative Agent with written notice
thereof setting forth information in reasonable detail describing all of the
assets of such Person and shall (a) cause such Person (excluding any such Person
not organized under the laws of the United States or any state thereof) to
execute a Joinder Agreement in substantially the same form as Exhibit U hereto,
(b) cause such Person (excluding any such Person not organized under the laws of
the United States or any state thereof) to pledge all of its assets to the
Administrative Agent pursuant to a security agreement in substantially the form
of the Security Agreement and otherwise in a form and substance acceptable to
the Administrative Agent, (c) cause all of its Capital Stock (or in the case of
any Person not organized under the laws of the United States or any state
thereof, sixty-five percent (65%) of its Capital Stock) to be delivered to the
Administrative Agent (together with undated stock powers signed in blank and
pledged to the Administrative Agent pursuant to an appropriate pledge
agreement(s) in substantially the form of the Pledge Agreement and otherwise in
form acceptable to the Administrative Agent, and (d) deliver such other
documentation as the Administrative Agent may reasonably request in connection
with the foregoing, including, without limitation, appropriate UCC-1 financing
statements, Acknowledgment Agreements, certified resolutions and other
organizational and authorizing documents of such Person and favorable opinions
of counsel to such Person (which shall cover, among other things, the legality,
validity, binding effect and enforceability of the documentation referred to
above), all in form, content and scope reasonably satisfactory to the
Administrative Agent. Without limitation of the foregoing, the survivor of the
Reorganization, if not then an Obligor, shall be bound to
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become an Affiliate Guarantor hereunder and all of its Capital Stock shall be
pledged in accordance herewith.
7.17 SCHEDULES OF ACCOUNTS AND PURCHASE ORDERS.
In furtherance of the continuing assignment and security interest in
the Accounts of each Obligor granted pursuant to the Security Agreement, upon
the creation of Accounts, each Obligor will execute and deliver to the
Administrative Agent in such form and manner as the Administrative Agent may
require in its commercially reasonable judgment, solely for its convenience in
maintaining records of collateral, such confirmatory schedules of Accounts, and
other appropriate reports designating, identifying and describing the Accounts
as the Administrative Agent may require in its commercially reasonable judgment.
In addition, upon the Administrative Agent's request, each Obligor will provide
the Administrative Agent with copies of agreements with, or purchase orders
from, the customers of each Obligor and its Subsidiaries, and copies of invoices
to customers, proof of shipment or delivery and such other documentation and
information relating to said Accounts and other collateral as the Administrative
Agent may require. Failure to provide the Administrative Agent with any of the
foregoing shall in no way affect, diminish, modify or otherwise limit the
security interests granted herein. Each Obligor hereby authorizes the
Administrative Agent to regard such Obligor's or any Subsidiary's printed name
or rubber stamp signature on assignment schedules or invoices as the equivalent
of a manual signature by such Obligor's or such Subsidiary's authorized officers
or agents.
7.18 COLLECTION OF ACCOUNTS.
(a) Unless an Event of Default shall have occurred and be
continuing, each Obligor may and will enforce, collect and receive all
amounts owing on the Accounts, for the Lenders' benefit and on the
Lenders' behalf but at the Obligors' expense in accordance with the
provisions of Section 2.3; such privilege shall terminate
automatically, however, without notice to the Obligors which is hereby
expressly waived by the Obligors, upon the occurrence and during the
continuance of any Event of Default, the Administrative Agent shall be
entitled to enforce, collect and receive all amounts owing on the
Accounts and all other amounts for the Lenders' benefit and on the
Lenders' behalf (but at the Obligor's expense) pursuant to cash
management arrangements satisfactory to the Administrative Agent and in
accordance with the Security Agreement.
(b) Any checks, cash, notes or other instruments or
property received by any Obligor or any of its Subsidiaries with
respect to any Accounts shall be held by such Obligor or such
Subsidiary in trust for the benefit of the Lenders, separate from such
Obligor's or Subsidiary's own property and funds, and immediately
turned over to the Administrative Agent with proper assignments or
endorsements. No checks, drafts or other instruments received by the
Administrative Agent shall constitute final payment unless and until
such instruments have actually been collected.
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7.19 NOTICE; CREDIT MEMORANDA; AND RETURNED GOODS.
Each Obligor will notify the Administrative Agent promptly of any
matters materially affecting the value, enforceability or collectibility of any
Account, and of all material customer disputes, offsets, defenses,
counterclaims, returns and rejections, and all reclaimed or repossessed
merchandise or goods, provided, however, that such notice shall only be required
as to any such matter that affects Accounts outstanding at any one time from any
account debtor, which affected Accounts have a value greater than Two Hundred
Fifty Thousand Dollars ($250,000). Each Obligor will issue credit memoranda
promptly (with duplicates to the Administrative Agent upon its request for same)
upon accepting returns or granting allowances, and may continue to do so until
the occurrence of an Event of Default which continues beyond the expiration of
the applicable grace or cure period, or which has not otherwise been waived by
the Required Lenders. After the occurrence and during the continuance of an
Event of Default, each Obligor agrees that all returned, reclaimed or
repossessed merchandise or goods shall be set aside by such Obligor, marked with
the Lenders' name and held by such Obligor for the Lenders' account as owner and
assignee.
7.20 ACKNOWLEDGMENT AGREEMENTS.
Each Obligor will assist the Administrative Agent in attempting to
obtain executed Acknowledgment Agreements from each of the warehousemen,
processors, packers, fillers, landlords and mortgagees with whom such Obligor
conducts business from time to time.
7.21 TRADEMARKS.
Each Obligor will do and cause to be done all things necessary to
preserve and keep in full force and effect all registrations of trademarks,
service marks and other marks, trade names or other trade rights.
7.22 MAINTENANCE OF PROPERTY.
Each Obligor will, and will cause each of the Subsidiaries to, keep all
property useful and necessary to its respective business in good working order
and condition (ordinary wear and tear excepted) in accordance with their past
operating practices and not to commit or suffer any waste with respect to any of
its properties, except for properties which either individually or in the
aggregate are not material.
7.23 REVISIONS OR UPDATES TO SCHEDULES.
If any of the information or disclosures provided on any of Schedules
6.7, 6.8, 6.9, 6.17 or 6.19, originally attached hereto become outdated or
incorrect in any material respect, the Obligors shall deliver to the
Administrative Agent and the Lenders as part of the compliance certificate
required pursuant to Section 7.1(c) such revision or updates to such Schedule(s)
as may be necessary or appropriate to update or correct such Schedule(s), which
revisions shall be effective from the date accepted in writing by the
Administrative Agent, such acceptance not to be unreasonably withheld; provided,
that no such revisions or updates to any such Schedule(s) shall be deemed to
have cured any breach of warranty or misrepresentation occurring prior to the
delivery of such revision or update by reason of the inaccuracy or
incompleteness of any such
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Schedule(s) at the time such warranty or representation previously was made or
deemed to be made.
ARTICLE VIII
FINANCIAL COVENANTS
Until termination of this Credit Agreement and the Commitments
hereunder and payment and satisfaction of all Obligations (other than then
contingent indemnification obligations) due or to become due hereunder, the
Borrower agrees that, unless the Required Lenders shall have otherwise consented
in writing:
8.1 FIXED CHARGE COVERAGE RATIO.
The Borrower shall maintain a Fixed Charge Coverage Ratio of not less
than 1.10:1 as of the last day of each fiscal quarter, beginning with the fiscal
quarter ending March 31, 2001.
8.2 CAPITAL EXPENDITURES.
The Borrower shall not make, or permit to be made, Consolidated Capital
Expenditures in any fiscal year in excess of the greater of (i) Six Million Five
Hundred Thousand Dollars ($6,500,000), or (ii) one hundred fifteen percent
(115%) of depreciation expense for such fiscal year (it being understood and
agreed that the foregoing determinations shall be made exclusive of any
Consolidated Capital Expenditures associated with any Approved Acquisitions made
in such fiscal year).
8.3 MINIMUM EXCESS BORROWING BASE AVAILABILITY.
The Borrower shall maintain at all times an excess of (i) the Borrowing
Base then most recently reported pursuant hereto, over (ii) the total amount of
Loans and Letter of Credit Obligations then outstanding, equal to at least Ten
Million Dollars ($10,000,000).
8.4 MINIMUM TANGIBLE NET WORTH.
The Borrower shall maintain a minimum Consolidated Tangible Net Worth,
measured quarterly, at the end of each fiscal quarter, beginning on March 31,
2001, equal in amount to the sum of (i) eighty-five percent (85%) of actual
Tangible Net Worth as of December 31, 2000, as determined by the Administrative
Agent from the Borrower's audited financial statements for the fiscal year ended
December 31, 2000 delivered pursuant to Section 7.1(a) (the "Base Amount") plus
(ii) fifty percent (50%) of Consolidated Net Income (excluding losses),
determined quarterly for each fiscal quarter of the Borrower occurring then,
i.e., on March 31, 2001, and thereafter, on a cumulative basis.
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ARTICLE IX
NEGATIVE COVENANTS
Until termination of the Credit Agreement and the Commitments hereunder
and payment and satisfaction of all Obligations (other than then contingent
indemnification obligations) due or to become due hereunder, each Obligor agrees
that, unless the Required Lenders shall have otherwise consented in writing, it
will not, and will not permit any of the Subsidiaries to:
9.1 RESTRICTIONS ON LIENS.
Mortgage, assign, pledge, transfer or otherwise permit any Lien or
judgment (whether as a result of a purchase money or title retention
transaction, or other security interest, or otherwise) to exist on any of its
assets or properties, whether real, personal or mixed, whether now owned or
hereafter acquired, except for Permitted Liens.
9.2 RESTRICTIONS ON ADDITIONAL INDEBTEDNESS.
Incur or create any Indebtedness, other than Permitted Indebtedness.
9.3 RESTRICTIONS ON SALE OF ASSETS.
Except pursuant to the Reorganization, sell, lease, assign, transfer or
otherwise dispose of any assets (including the Capital Stock of any Subsidiary
of the Borrower) other than (a) sales of Inventory in the ordinary course of
business, (b) sales or other dispositions in the ordinary course of business of
assets or properties that are obsolete or that are no longer used or useful in
the conduct of such Obligor's or Subsidiary's business, (c) sales in the
ordinary course of business of assets or properties (other than Inventory) used
in such Obligor's or Subsidiary's business that are worn out or in need of
replacement and that are replaced with assets of reasonably equivalent value or
utility or (d) except when any Default or Event of Default exists, disposition
of the assets of any Obligor (or 100% of the stock of any Obligor) or any
division or business line thereof, so long as the aggregate consideration for
such obligations does not exceed One Million Dollars ($1,000,000) in any twelve
(12) month period; provided, however, that, in addition to the foregoing, to the
extent that any such asset disposition governed by this clause (d) shall include
the sale of any Inventory or any Accounts, then, the Borrower shall submit to
the Administrative Agent not later than three (3) Business Days prior to such
disposition occurring, a pro forma Borrowing Base Certificate reflecting the
impact of such disposition on the Borrowing Base and demonstrating the
Borrower's compliance with Sections 2.1(b) and 8.3 both before and after giving
effect to such disposition as a condition precedent thereto.
9.4 NO CORPORATE CHANGES.
Except pursuant to the Reorganization, (a) merge or consolidate with
any Person except that, unless an Event of Default exists, any Affiliate
Guarantor may merge or consolidate with any other Affiliate Guarantor or,
provided that the Borrower is the survivor of any such merger or consolidation,
with the Borrower, upon first giving the Administrative Agent at least ten (10)
days advance written notice to such effect; or (b) alter or modify any Obligor's
or any
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Subsidiary's Articles or Certificate of Incorporation or other equivalent
organizational document or form of organization; or (c) alter or modify any
legal names, principal places of business, structure, status or existence except
upon at least thirty (30) days advance written notice to the Administrative
Agent; or (d) enter into or engage in any business, operation or activity
materially different from that presently being conducted by the Obligors.
9.5 NO GUARANTEES.
Assume, guarantee, endorse, or otherwise become liable upon the
obligations of any other Person, including, without limitation, any Subsidiary
or Affiliate of any Obligor, except (a) by the endorsement of negotiable
instruments in the ordinary course of business, (b) by the giving of indemnities
in connection with the sale of Inventory or other asset dispositions permitted
hereunder and (c) in connection with the incurrence of Permitted Indebtedness.
9.6 NO RESTRICTED PAYMENTS.
Make a Restricted Payment, other than to pay dividends from any
Subsidiary to any Obligor; provided, however, that, notwithstanding, the
foregoing, the Borrower may from time to time repurchase its Capital Stock from
any shareholders who are directors, officers, managers or employees of the
Borrower or who acquired their Capital Stock in connection with the initial
public offering of the Borrower, through its direct share program, or in
connection with an Acquisition by an Obligor (or the estates of any of them, if
then deceased), subject, however, to compliance with each of the following
conditions: (i) the total amount of cash expended by the Borrower in all such
repurchases made on or subsequent to the Closing Date shall be Two Million
Dollars ($2,000,000); (ii) Average Excess Availability, both before and after
the making each such repurchase, must be at least Fifteen Million Dollars
($15,000,000); (iii) prior to any such repurchase being made, the Administrative
Agent shall have received a certificate from an Authorized Officer of the
Borrower demonstrating the Borrower's compliance with the financial covenants
set forth in Article VIII, giving effect to such repurchase as of the most
recent fiscal month end of the Borrower for which financial reports are then
available; and (iv) no Default or Event of Default otherwise then shall exist.
9.7 NO INVESTMENTS.
Make any Investment other than Permitted Investments.
9.8 NO AFFILIATE TRANSACTIONS.
Enter into any transaction with, including, without limitation, the
purchase, sale or exchange of property or the rendering of any service to, any
Subsidiary or Affiliate of any Obligor except (a) in the ordinary course of and
pursuant to the reasonable requirements of such Obligor's business and upon fair
and reasonable terms no less favorable to such Obligor than could be obtained in
a comparable arm's-length transaction with an unaffiliated Person and (b) as may
be permitted under Section 9.6.
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9.9 NO PROHIBITED TRANSACTIONS UNDER ERISA.
Except where a violation otherwise prohibited below (other than a
violation of Subsection (i) which could not reasonably be expected to have a
Material Adverse Effect:
(a) Engage, or permit any ERISA Affiliate to engage, in
any prohibited transaction which could result in a civil penalty or
excise tax described in Section 406 of ERISA or Section 4975 of the
Internal Revenue Code for which a statutory or class exemption is not
available or a private exemption has not been previously obtained from
the DOL;
(b) permit to exist with respect to any Benefit Plan any
accumulated funding (as defined in Sections 302 of ERISA and 412 of the
Internal Revenue Code), whether or not waived;
(c) fail, or permit any ERISA Affiliate to fail, to pay
timely required contributions or annual installments due with respect
to any waived funding deficiency to any Benefit Plan;
(d) terminate, or permit any ERISA Affiliate to
terminate, any Benefit Plan where such event would result in any
liability of the Obligor, any Subsidiary or any ERISA Affiliate under
Title IV of ERISA;
(e) fail, or permit any ERISA Affiliate to fail to make
any required contribution or payment to any Multiemployer Plan;
(f) fail, or permit any ERISA Affiliate to fail, to pay
any required installment or any other payment required under Section
412 of the Internal Revenue Code on or before the due date for such
installment or other payment;
(g) amend, or permit any ERISA Affiliate to amend, a
Benefit Plan resulting in an increase in current liability for the plan
year such that either of the Obligors, any Subsidiary or any ERISA
Affiliate is required to provide security to such Benefit Plan under
Section 401(a)(29) of the Internal Revenue Code;
(h) withdraw, or permit any ERISA Affiliate to withdraw,
from any Multiemployer Plan where such withdrawal may result in any
liability of any such entity under Title IV of ERISA; or
(i) allow any representation made in Section 6.14 to be
untrue in any material respect at any time during the term of this
Agreement.
9.10 NO ADDITIONAL BANK ACCOUNTS.
Open, maintain or otherwise have any checking, savings or other
accounts at any bank or other financial institution, or any other account where
money is or may be deposited or maintained with any Person, other than the
accounts set forth on Schedule 9.10 hereto and ▇▇▇▇▇ cash and payroll accounts
and after the Closing Date, such other accounts so long as each such account is
subject to a Lockbox Agreement satisfactory to the Administrative Agent.
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9.11 NO EXCESS CASH.
Maintain in the aggregate in all of the checking, savings or other
accounts of the Obligors, excepting, however, therefrom, Lockbox Accounts (and
related overnight accounts), total cash balances and Permitted Investments in
excess of Two Hundred Fifty Thousand Dollars ($250,000) at any time during which
any Loans are outstanding hereunder.
9.12 RESTRICTIONS ON SALE OF CAPITAL STOCK OF THE SUBSIDIARIES.
Except in connection with any transaction permitted under Section 9.4,
sell, transfer or otherwise dispose of any shares of Capital Stock in any
Subsidiary.
9.13 ISSUANCE OF STOCK BY SUBSIDIARIES.
Permit any Subsidiary to issue or distribute any Capital Stock, except
that a Subsidiary whose Capital Stock have been pledged to the Administrative
Agent pursuant hereto may issue and distribute additional such Capital Stock
from time to time hereafter, provided that such Capital Stock are also pledged
to the Administrative Agent promptly upon their issuance on terms and conditions
satisfactory to the Administrative Agent in its commercially reasonable
judgment.
9.14 ADDITIONAL NEGATIVE PLEDGES.
Create or otherwise cause or suffer to exist or become effective, or
permit any of the Subsidiaries to create or otherwise cause or suffer to exist
or become effective, directly or indirectly, (i) any prohibition or restriction
(including any agreement to provide equal and ratable security to any other
Person in the event a Lien is granted to or for the benefit of the
Administrative Agent and the Lenders) on the creation or existence of any Lien
upon the assets of any Obligor or the Subsidiaries, other than Permitted Liens
or (ii) any Contractual Obligation which may restrict or inhibit the
Administrative Agent's rights or ability to sell or otherwise dispose of the
Collateral or any part thereof after the occurrence of an Event of Default
(except customary non-assignment provisions contained in leases and purchase
agreements for assets secured by a purchase money security interest).
9.15 INDEBTEDNESS.
Effect or permit any change in or amendment to any document or
instrument pertaining to the subordination, terms of payment or required
prepayments of any Indebtedness, effect or permit any change in or amendment to
any document or instrument pertaining to the covenants or events of default of
any Indebtedness if the effect of any such change or amendment is to make such
covenants or events of default more restrictive, give any notice of optional
redemption or optional prepayment or offer to repurchase under any such document
or instrument, or, directly or indirectly, make any payment of principal of or
interest on or in redemption, retirement or repurchase of any Indebtedness,
except for the scheduled payments required by the terms of the documents and
instruments evidencing such Indebtedness and except as permitted under Section
9.6.
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9.16 SALE AND LEASEBACK.
Except in connection with asset dispositions permitted under Section
9.3(d), enter into any arrangement, directly or indirectly, whereby the Borrower
or any Subsidiary shall sell or transfer any property owned by it to a Person
(other than the Borrower or any Subsidiary) in order then or thereafter to lease
such property or lease other property which the Borrower or any Subsidiary
intends to use for substantially the same purpose as the property being sold or
transferred.
9.17 LICENSES, ETC.
Enter into licenses of, or otherwise restrict the use of, any patents,
trademarks or copyrights which would prevent the Borrower or any Subsidiary from
selling, transferring, encumbering or otherwise disposing of any such patent,
trademark or copyright.
9.18 LIMITATIONS.
Create, nor will it permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause, incur, assume, suffer or permit to exist
or become effective any consensual encumbrance or restriction of any kind on the
ability of any such Person to (a) pay dividends or make any other distribution
on any of such Person's Capital Stock, (b) pay any Indebtedness owed to the
Obligors, (c) make loans or advances to any other Obligor or (d) transfer any of
its property to any other Obligor, except for encumbrances or restrictions
existing under or by reason of (i) customary non-assignment provisions in any
lease governing a leasehold interest (or purchase agreements for assets secured
by a purchase money security interest), (ii) any agreement or other instrument
of a Person existing at the time it becomes a Subsidiary of a Obligor; provided
that such encumbrance or restriction is not applicable to any other Person, or
any property of any other Person, other than such Person becoming a Subsidiary
of a Obligor and was not entered into in contemplation of such Person becoming a
Subsidiary of a Obligor, and (iii) this Credit Agreement and the other Credit
Documents.
ARTICLE X
POWERS
10.1 APPOINTMENT AS ATTORNEY-IN-FACT.
Each Obligor hereby irrevocably authorizes and appoints the
Administrative Agent, or any Person or agent the Administrative Agent may
designate, as such Obligor's attorney-in-fact, at the Obligors' cost and
expense, to exercise, subject to the limitations set forth in Section 10.2, all
of the following powers, which being coupled with an interest, shall be
irrevocable until all of the Obligations to the Lenders have been paid and
satisfied in full and all of the Commitments have been terminated:
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(a) To receive, take, endorse, sign, assign and deliver,
all in the name of the Administrative Agent, the Lenders or such
Obligor, as the case may be, any and all checks, notes, drafts, and
other documents or instruments relating to the Collateral;
(b) To receive, open and dispose of all mail addressed to
such Obligor and to notify postal authorities to change the address for
delivery thereof to such address as the Administrative Agent may
designate;
(c) To request at any time from customers indebted on
Accounts, in the name of such Obligor or a third party designee of the
Administrative Agent, information concerning the Accounts and the
amounts owing thereon;
(d) To give customers indebted on Accounts notice of the
Lenders' interest therein, and/or to instruct such customers to make
payment directly to the Administrative Agent for such Obligor's
account;
(e) To take or bring, in the name of the Administrative
Agent, the Lenders or such Obligor, all steps, actions, suits or
proceedings deemed by the Administrative Agent necessary or desirable
to enforce or effect collection of the Accounts; and
(f) To file, record and register any or all of the
Lenders' security interest in intellectual property of the Borrower
with the United States Patent and Trademark Office.
10.2 LIMITATION ON EXERCISE OF POWER.
Notwithstanding anything hereinabove to the contrary, the powers set
forth in subparagraphs (b), (d) and (e) above may only be exercised by the
Administrative Agent on and after the occurrence of an Event of Default and
during its continuation which has not otherwise been waived by the
Administrative Agent. The powers set forth in subparagraphs (a), (c) and (f)
above may be exercised by the Administrative Agent at any time.
ARTICLE XI
EVENTS OF DEFAULT AND REMEDIES
11.1 EVENTS OF DEFAULT.
The occurrence of any of the following events shall constitute an
"Event of Default" hereunder:
(a) failure of the Borrower to pay (i) any interest or
Fees hereunder within three (3) Business Days of when due hereunder, in
each case whether at stated maturity, by acceleration, or otherwise,
(ii) any principal of the Revolving Loans or the Letter of Credit
Obligations when due, whether at stated maturity, by acceleration or
otherwise, or (iii) any expenses hereunder within ten (10) Business
Days after receipt by the Borrower from the Administrative Agent or any
applicable Lender of notice that such expenses are
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payable or (iv) any other Obligations, within ten (10) Business Days
after the stated due date for the payment thereof;
(b) any representation or warranty of any Obligor
contained in this Credit Agreement, the other Credit Documents or any
other agreement, document, instrument or certificate among any Obligor,
the Administrative Agent and the Lenders or executed by any Obligor in
favor of the Administrative Agent or the Lenders shall prove untrue in
any material respect on or as of the date it was made or was deemed to
have been made;
(c) failure of any Obligor to perform, comply with or
observe any term, covenant or agreement applicable to it contained in
Section 7.1, Section 7.3, Section 7.5, Section 7.7, Article VIII or
Article IX;
(d) failure to comply with any other covenant contained
in this Credit Agreement, the other Credit Documents or any other
agreement, document, instrument or certificate among any Obligor, the
Administrative Agent and the Lenders or executed by any Obligor in
favor of the Administrative Agent or the Lenders and, in the event such
breach or failure to comply is capable of cure, such breach or failure
to comply is not cured within thirty (30) days of its occurrence;
(e) dissolution, liquidation, winding up or cessation of
the business of any Obligor or any Subsidiary, or the failure of any
Obligor or any Subsidiary to meet its debts generally as they mature,
or the calling of a meeting of any Obligor's or any Subsidiary's
creditors for purposes of compromising any Obligor's or any
Subsidiary's debts, or the admission by any Obligor or its inability to
pay its debts as they become due;
(f) the commencement by or against any Obligor or any
Subsidiary of any bankruptcy, insolvency, arrangement, reorganization,
receivership or similar proceedings with respect to it under any
federal or state law and, in the event any such proceeding is commenced
against any Obligor of any Subsidiary, such proceeding is not dismissed
within sixty (60) days;
(g) the occurrence of a Change in Control;
(h) the occurrence of a default or event of default (in
each case which shall continue beyond the expiration of any applicable
grace periods) under, or the occurrence of any event that results in or
would permit the acceleration of the maturity of any note, agreement or
instrument evidencing any other Indebtedness of any Obligor or any of
its Subsidiaries and the aggregate principal amount of all such other
Indebtedness with respect to which a default or an event of default has
occurred, or the maturity of which is accelerated or permitted to be
accelerated, exceeds One Million Dollars ($1,000,000);
(i) any covenant, agreement or obligation of any party
contained in or evidenced by any of the Credit Documents shall cease to
be enforceable in accordance with its terms, or any party (other than
the Administrative Agent or the Lenders) to any Credit Document shall
deny or disaffirm its obligations under any of the Credit Documents, or
any Credit Document shall be canceled, terminated, revoked or rescinded
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without the express prior written consent of the Administrative Agent,
or any action or proceeding shall have been commenced by any Person
(other than the Administrative Agent or any Lender) seeking to cancel,
revoke, rescind or disaffirm the obligations of any party to any Credit
Document, or any court or other Governmental Authority shall issue a
judgment, order, decree or ruling to the effect that any of the
obligations of any party to any Credit Document are illegal, invalid or
unenforceable;
(j) one or more judgments or decrees shall be entered
against one or more of the Obligors or any Subsidiary involving a
liability of One Million Dollars ($1,000,000) or more in the aggregate
(to the extent not paid or fully covered by insurance provided by a
carrier who has acknowledged coverage and has the ability to perform)
and any such judgments or decrees shall not have been vacated,
discharged or stayed or bonded pending appeal within thirty (30) days
from the entry thereof;
(k) any Termination Event with respect to a Benefit Plan
shall have occurred and be continuing thirty (30) days after notice
thereof shall have been given to the Borrower by the Administrative
Agent or any Lender, and the then current value of such Benefit Plan's
benefits guaranteed under Title IV of ERISA exceeds the then current
value of such Benefit Plan's assets allocable to such benefits by more
than One Million Dollars ($1,000,000) (or in the case of a Termination
Event involving the withdrawal of a substantial employer, the
withdrawing employer's proportionate share of such excess exceeds such
amount); or
(l) any other Credit Document shall fail to be in full
force and effect or to give the Administrative Agent and/or the Lenders
the security interests, liens, rights, powers and privileges purported
to be created thereby (except as such documents may be terminated or no
longer in force and effect in accordance with the terms thereof, other
than those indemnities and provisions which by their terms shall
survive).
11.2 ACCELERATION.
Upon the occurrence and during the continuance of an Event of Default,
at the direction of the Required Lenders, the Administrative Agent shall, upon
the written, telecopied or telex request of the Required Lenders, and by
delivery of written notice to the Borrower from the Administrative Agent, take
any or all of the following actions, without prejudice to the rights of the
Administrative Agent, any Lender or the holder of any Note to enforce its claims
against any Borrower: (a) declare all Obligations to be immediately due and
payable (except with respect to any Event of Default set forth in Section
11.1(f) in which case all Obligations shall automatically become immediately due
and payable without the necessity of any notice or other demand) without
presentment, demand, protest or any other action or obligation of the
Administrative Agent or any Lender, (b) immediately terminate this Credit
Agreement and the Commitments hereunder; and (c) enforce any and all rights and
interests created and existing under the Credit Documents or arising under
applicable law, including, without limitation, all rights and remedies existing
under the Security Documents and all rights of setoff. The enumeration of the
foregoing rights is not intended to be exhaustive and the exercise of any right
shall not preclude the exercise of any other rights, all of which shall be
cumulative.
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In addition, upon demand by the Administrative Agent or the Required
Lenders upon the occurrence of any Event of Default, and at any time thereafter
unless and until such Event of Default has been waived by the requisite Lenders
(in accordance with the voting requirements of Section 14.10), the Borrower
shall deposit with the Administrative Agent for the benefit of the Lenders with
respect to each Letter of Credit then outstanding, promptly upon such demand,
cash or Cash Equivalents in an amount equal to the greatest amount for which
such Letter of Credit may be drawn. Such deposit shall be held by the
Administrative Agent for the benefit of the Issuing Bank and the other Lenders
as security for, and to provide for the payment of, outstanding Letters of
Credit.
ARTICLE XII
TERMINATION
Except as otherwise provided in Article XI of this Credit Agreement,
the Commitments made hereunder shall terminate on the Maturity Date and all
then outstanding Loans shall be immediately due and payable in full and all
outstanding Letters of Credit shall immediately terminate. Unless sooner
demanded, all Obligations shall become due and payable as of any termination
hereunder or under Article XI and, pending a final accounting, the
Administrative Agent may withhold any balances in the Borrower's Loan accounts,
in an amount sufficient, in the Administrative Agent's sole discretion, to
cover all of the Obligations, whether absolute or contingent, unless supplied
with a satisfactory indemnity to cover all of such Obligations. All of the
Administrative Agent's and the Lenders' rights, liens and security interests
shall continue after any termination until all Obligations (other than then
contingent indemnification obligations) have been paid and satisfied in full.
ARTICLE XIII
THE ADMINISTRATIVE AGENT
13.1 APPOINTMENT OF ADMINISTRATIVE AGENT.
(a) Each Lender hereby designates First Union as
Administrative Agent to act as herein specified. Each Lender hereby
irrevocably authorizes, and each holder of any Note or participation
in any Letter of Credit by the acceptance of a Note or participation
shall be deemed irrevocably to authorize, the Administrative Agent to
take such action on its behalf under the provisions of this Credit
Agreement and the Notes and any other instruments and agreements
referred to herein and to exercise such powers and to perform such
duties hereunder and thereunder as are specifically delegated to or
required of the Administrative Agent by the terms hereof and thereof
and such other powers as are reasonably incidental thereto. The
Administrative Agent shall hold all Collateral and all payments of
principal, interest, Fees, charges and expenses received pursuant to
this Credit Agreement or any other Credit Document for the ratable
benefit of the Lenders. The Administrative Agent may perform any of
its duties hereunder by or through its agents or employees.
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(b) The provisions of this Article XIII are solely for
the benefit of the Administrative Agent and the Lenders, and none of
the Obligors shall have any rights as a third party beneficiary of any
of the provisions hereof (other than Section 13.9). In performing its
functions and duties under this Credit Agreement, the Administrative
Agent shall act solely as agent of the Lenders and does not assume and
shall not be deemed to have assumed any obligation toward or
relationship of agency or trust with or for any Obligor.
(c) Without limiting the generality of this Section
13.1, each Lender expressly authorizes the Administrative Agent to
determine, subject to the terms of this Credit Agreement, on behalf of
such Lender whether or not (i) Accounts shall be deemed to constitute
Eligible Accounts Receivable, (ii) Inventory shall be deemed to
constitute Eligible Inventory, or (iii) Eligible Inventory shall be
deemed to constitute Qualified Inventory or Non-Qualified Inventory.
Such authorization may be withdrawn by the Required Lenders; provided,
however, that unless otherwise agreed by the Administrative Agent such
withdrawal of authorization shall not become effective until the
thirtieth Business Day after receipt of such notice by the
Administrative Agent. Thereafter, the Required Lenders shall jointly
instruct the Administrative Agent in writing regarding such matters
with such frequency as the Required Lenders shall jointly determine.
13.2 NATURE OF DUTIES OF ADMINISTRATIVE AGENT.
The Administrative Agent shall have no duties or responsibilities
except those expressly set forth in this Credit Agreement. Neither the
Administrative Agent nor any of its officers, directors, employees or agents
shall be liable for any action taken or omitted by it as such hereunder or in
connection herewith, unless caused by its or their gross negligence or willful
misconduct. The duties of the Administrative Agent shall be mechanical and
administrative in nature; the Administrative Agent shall not have by reason of
this Credit Agreement a fiduciary relationship in respect of any Lender; and
nothing in this Credit Agreement, expressed or implied, is intended to or shall
be so construed as to impose upon the Administrative Agent any obligations in
respect of this Credit Agreement except as expressly set forth herein.
13.3 LACK OF RELIANCE ON ADMINISTRATIVE AGENT.
(a) Independently and without reliance upon the
Administrative Agent, each Lender, to the extent it deems appropriate,
has made and shall continue to make (i) its own independent
investigation of the financial or other condition and affairs of each
Obligor in connection with the taking or not taking of any action in
connection herewith and (ii) its own appraisal of the creditworthiness
of each Obligor, and, except as expressly provided in this Credit
Agreement, the Administrative Agent shall have no duty or
responsibility, either initially or on a continuing basis, to provide
any Lender with any credit or other information with respect thereto,
whether coming into its possession before the making of the Revolving
Loans or at any time or times thereafter.
(b) The Administrative Agent shall not be responsible to
any Lender for any recitals, statements, information, representations
or warranties herein or in any document, certificate or other writing
delivered in connection herewith or for the execution,
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effectiveness, genuineness, validity, enforceability, collectibility,
priority or sufficiency of this Credit Agreement or the Notes or the
financial or other condition of any Obligor. The Administrative Agent
shall not be required to make any inquiry concerning either the
performance or observance of any of the terms, provisions or
conditions of this Credit Agreement or the Notes, or the financial
condition of any Obligor, or the existence or possible existence of
any Default or Event of Default, unless specifically requested to do
so in writing by any Lender.
13.4 CERTAIN RIGHTS OF THE ADMINISTRATIVE AGENT.
The Administrative Agent shall have the right to request instructions
from the Required Lenders or, as required, each of the Lenders. If the
Administrative Agent shall request instructions from the Required Lenders or
each of the Lenders, as the case may be, with respect to any act or action
(including the failure to act) in connection with this Credit Agreement, the
Administrative Agent shall be entitled to refrain from such act or taking such
action unless and until the Administrative Agent shall have received
instructions from the Required Lenders or each of the Lenders, as the case may
be, and the Administrative Agent shall not incur liability to any Person by
reason of so refraining. Without limiting the foregoing, no Lender shall have
any right of action whatsoever against the Administrative Agent as a result of
the Administrative Agent acting or refraining from acting hereunder in
accordance with the instructions of the Required Lenders or each of the
Lenders, as the case may be.
13.5 RELIANCE BY ADMINISTRATIVE AGENT.
The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any note, writing, resolution, notice, statement,
certificate, telex teletype or telecopier message, cablegram, radiogram, order
or other documentary, teletransmission or telephone message believed by it to
be genuine and correct and to have been signed, sent or made by the proper
person. The Administrative Agent may consult with legal counsel (including
counsel for the Obligors with respect to matters concerning the Obligors),
independent public accountants and other experts selected by it and shall not
be liable for any action taken or omitted to be taken by it in good faith in
accordance with the advice of such counsel, accountants or experts.
13.6 INDEMNIFICATION OF ADMINISTRATIVE AGENT.
To the extent the Administrative Agent is not reimbursed and
indemnified by the Obligors, each Lender will reimburse and indemnify the
Administrative Agent, in proportion to its respective Commitment, for and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses (including counsel fees and
disbursements) or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against the Administrative Agent in
performing its duties hereunder, in any way relating to or arising out of this
Credit Agreement, provided that no Lender shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the Administrative
Agent's gross negligence or willful misconduct.
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13.7 THE ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY.
With respect to its obligation to lend under this Credit Agreement,
the Loans made by it and the Notes issued to it, its participation in Letters
of Credit issued hereunder, and all of its rights and obligations as a Lender
hereunder and under the other Credit Documents, the Administrative Agent shall
have the same rights and powers hereunder as any other Lender or holder of a
Note or participation interests and may exercise the same as though it was not
performing the duties specified herein; and the terms "Lenders", "Required
Lenders", "holders of Notes", or any similar terms shall, unless the context
clearly otherwise indicates, include the Administrative Agent in its individual
capacity. The Administrative Agent may accept deposits from, lend money to,
acquire equity interests in, and generally engage in any kind of banking,
trust, financial advisory or other business with the Obligors or any Affiliate
of the Obligors as if it were not performing the duties specified herein, and
may accept fees and other consideration from the Obligors for services in
connection with this Credit Agreement and otherwise without having to account
for the same with the Lenders.
13.8 HOLDERS OF NOTES.
The Administrative Agent may deem and treat the payee of any Note as
the owner thereof for all purposes hereof unless and until a written notice of
the assignment or transfer thereof shall have been filed with the
Administrative Agent. Any request, authority or consent of any Person who, at
the time of making such request or giving such authority or consent, is the
holder of any Note, shall be conclusive and binding on any subsequent holder,
transferee or assignee of such Note or of any Note or Notes issued in exchange
therefor.
13.9 SUCCESSOR ADMINISTRATIVE AGENT.
(a) The Administrative Agent may, upon five (5) Business
Days' notice to the Lenders and the Obligors, resign at any time
(effective upon the appointment of a successor Administrative Agent
pursuant to the provisions of this Section 13.9(a)) by giving written
notice thereof to the Lenders and the Obligors. Upon any such
resignation, the Required Lenders shall have the right, upon five (5)
days' notice, to appoint a successor Administrative Agent. If no
successor Administrative Agent shall have been so appointed by the
Required Lenders, and shall have accepted such appointment, within
thirty (30) days after the retiring Administrative Agent's giving of
notice of resignation, then, upon five (5) days' notice , the retiring
Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent, which shall be a bank or a trust
company or other financial institution which maintains an office in
the United States, or a commercial bank organized under the laws of
the United States of America or of any State thereof, or any affiliate
of such bank or trust company or other financial institution which is
engaged in the banking business, having a combined capital and surplus
of at least $500,000,000. Notwithstanding anything herein to the
contrary, so long as no Event of Default shall have occurred and be
continuing, any successor Administrative Agent (whether appointed by
the Required Lenders or the Administrative Agent) shall have been
approved in writing by the Borrower (such approval not to be
unreasonably withheld).
(b) Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent,
such successor Administrative Agent
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shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Administrative Agent,
and the retiring Administrative Agent shall be discharged from its
duties and obligations under this Credit Agreement. After any retiring
Administrative Agent's resignation hereunder as Administrative Agent,
the provisions of this Article XIII shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was
Administrative Agent under this Credit Agreement.
13.10 COLLATERAL MATTERS.
(a) Each Lender authorizes and directs the
Administrative Agent to enter into the Security Documents for the
benefit of the Lenders. Each Lender authorizes and directs the
Administrative Agent to make such changes to the form Acknowledgment
Agreement attached hereto as Exhibit A as the Administrative Agent
deems necessary in order to obtain any Acknowledgment Agreement from
any customer, landlord, warehouseman, filler, packer or processor of
any Obligor. Each Lender also authorizes and directs the
Administrative Agent to review and approve all agreements regarding
the Lockboxes and the Lockbox Accounts (including the Lockbox Accounts
Agreements) on such terms as the Administrative Agent deems necessary.
Each Lender hereby agrees, and each holder of any Note by the
acceptance thereof will be deemed to agree, that, except as otherwise
set forth herein, any action taken by the Required Lenders or each of
the Lenders, as applicable, in accordance with the provisions of this
Credit Agreement or the Security Documents, and the exercise by the
Required Lenders or each of the Lenders, as applicable, of the powers
set forth herein or therein, together with such other powers as are
reasonably incidental thereto, shall be authorized and binding upon
all of the Lenders. The Administrative Agent is hereby authorized on
behalf of all of the Lenders, without the necessity of any notice to
or further consent from any Lender, from time to time prior to an
Event of Default, to take any action with respect to any Collateral or
Security Document which may be necessary or appropriate to perfect and
maintain perfected the security interest in and liens upon the
Collateral granted pursuant to the Security Documents.
(b) The Lenders hereby authorize the Administrative
Agent, at its option and in its discretion, to release any Lien
granted to or held by the Administrative Agent upon any Collateral (i)
upon termination of the Commitments and payment in cash and
satisfaction of all of the Obligations (including the Letter of Credit
Obligations) at any time arising under or in respect of this Credit
Agreement or the Credit Documents or the transactions contemplated
hereby or thereby, (ii) constituting property being sold or disposed
of upon receipt of the proceeds of such sale by the Administrative
Agent if the applicable Obligor certifies to the Administrative Agent
that the sale or disposition is made in compliance with Section 9.3
(and the Administrative Agent may rely conclusively on any such
certificate, without further inquiry) or (iii) if approved, authorized
or ratified in writing by the Required Lenders, unless such release is
required to be approved by all of the Lenders hereunder. Upon request
by the Administrative Agent at any time, the Lenders will confirm in
writing the Administrative Agent's authority to release particular
types or items of Collateral pursuant to this Section 13.10(b).
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(c) Upon any sale and transfer of Collateral which is
expressly permitted pursuant to the terms of this Credit Agreement, or
consented to in writing by the Required Lenders or all of the Lenders,
as applicable, and upon at least five (5) Business Days' prior written
request by the applicable Obligor, the Administrative Agent shall (and
is hereby irrevocably authorized by the Lenders to) execute such
documents as may be necessary to evidence the release of the Liens
granted to the Administrative Agent for the benefit of the Lenders
herein or pursuant hereto upon the Collateral that was sold or
transferred; provided that (i) the Administrative Agent shall not be
required to execute any such document on terms which, in the
Administrative Agent's opinion, would expose the Administrative Agent
to liability or create any obligation or entail any consequence other
than the release of such Liens without recourse or warranty and (ii)
such release shall not in any manner discharge, affect or impair the
Obligations or any Liens upon (or obligations of such Obligor or any
Subsidiary in respect of) all interests retained by such Obligor or
any Subsidiary, including (without limitation) the proceeds of the
sale, all of which shall continue to constitute part of the
Collateral. In the event of any sale or transfer of Collateral, or any
foreclosure with respect to any of the Collateral, the Administrative
Agent shall be authorized to deduct all of the expenses reasonably
incurred by the Administrative Agent from the proceeds of any such
sale, transfer or foreclosure.
(d) The Administrative Agent shall have no obligation
whatsoever to the Lenders or to any other Person to assure that the
Collateral exists or is owned by the Obligors or any Subsidiary or is
cared for, protected or insured or that the liens granted to the
Administrative Agent herein or pursuant hereto have been properly or
sufficiently or lawfully created, perfected, protected or enforced or
are entitled to any particular priority, or to exercise or to continue
exercising at all or in any manner or under any duty of care,
disclosure or fidelity any of the rights, authorities and powers
granted or available to the Administrative Agent in this Section 13.10
or in any of the Security Documents, it being understood and agreed
that in respect of the Collateral, or any act, omission or event
related thereto, the Administrative Agent may act in any manner it may
deem appropriate, in its sole discretion, given the Administrative
Agent's own interest in the Collateral as one of the Lenders and that
the Administrative Agent shall have no duty or liability whatsoever to
the Lenders, except for its gross negligence or willful misconduct.
13.11 ACTIONS WITH RESPECT TO DEFAULTS.
In addition to the Administrative Agent's right to take actions on its
own accord as permitted under this Credit Agreement, the Administrative Agent
shall take such action with respect to a Default or Event of Default as shall
be directed by the Required Lenders or all of the Lenders, as the case may be;
provided, however, that, until the Administrative Agent shall have received
such directions, the Administrative Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable and in the best
interests of the Lenders.
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13.12 DELIVERY OF INFORMATION.
The Administrative Agent shall not be required to deliver to any
Lender originals or copies of any documents, instruments, notices,
communications or other information received by the Administrative Agent from
the Obligors, any Subsidiary, the Required Lenders, any Lender or any other
Person under or in connection with this Credit Agreement or any other Credit
Document except (a) as specifically provided in this Credit Agreement or any
other Credit Document and (b) as specifically requested from time to time in
writing by any Lender with respect to a specific document instrument, notice or
other written communication received by and in the possession of the
Administrative Agent at the time of receipt of such request and then only in
accordance with such specific request.
ARTICLE XIV
MISCELLANEOUS
14.1 WAIVERS.
Each Obligor hereby waives due diligence, demand, presentment and
protest and any notices thereof as well as notice of nonpayment. No delay or
omission of the Administrative Agent or the Lenders to exercise any right or
remedy hereunder, whether before or after the happening of any Event of
Default, shall impair any such right or shall operate as a waiver thereof or as
a waiver of any such Event of Default. No single or partial exercise by the
Administrative Agent or the Lenders of any right or remedy shall preclude any
other or further exercise thereof, or preclude any other right or remedy.
14.2 JURY TRIAL.
TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OBLIGOR, THE
ADMINISTRATIVE AGENT AND THE LENDERS EACH HEREBY WAIVE ANY RIGHT TO A TRIAL BY
JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF THIS CREDIT AGREEMENT, THE
CREDIT DOCUMENTS OR ANY OTHER AGREEMENTS OR TRANSACTIONS RELATED HERETO OR
THERETO.
14.3 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE.
(a) THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS
AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER
SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF GEORGIA. Any legal action or proceeding with
respect to this Credit Agreement or any other Credit Document shall be
brought in the courts of the State of North Carolina in Mecklenburg
County or of the State of Georgia in ▇▇▇▇▇▇ County or of the United
States for the Western District of North Carolina or the Northern
District of Georgia, and, by execution and delivery of this Credit
Agreement, each of the Obligors hereby irrevocably accepts for itself
and in respect of its property, generally and unconditionally, the
nonexclusive jurisdiction of such courts. Each of the Obligors further
irrevocably consents to the service of process out of any of the
aforementioned
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courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to it at the
address set out for notices pursuant to Section 14.5, such service to
become effective three (3) days after such mailing. Nothing herein
shall affect the right of the Administrative Agent or any Lender to
serve process in any other manner permitted by law or to commence
legal proceedings or to otherwise proceed against any Obligor in any
other jurisdiction.
(b) Each of the Obligors hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of
any of the aforesaid actions or proceedings arising out of or in
connection with this Credit Agreement or any other Credit Document
brought in the courts referred to in subsection (a) above and hereby
further irrevocably waives and agrees not to plead or claim in any
such court that any such action or proceeding brought in any such
court has been brought in an inconvenient forum.
14.4 ARBITRATION.
(a) Notwithstanding the provisions of Section 14.3 to
the contrary, upon demand of any party hereto, whether made before or
after institution of any judicial proceeding, any dispute, claim or
controversy arising out of, connected with or relating to this Credit
Agreement and other Credit Documents ("Disputes") between or among
parties to this Credit Agreement shall be resolved by binding
arbitration as provided herein. Institution of a judicial proceeding
by a party does not waive the right of that party to demand
arbitration hereunder. Disputes may include, without limitation, tort
claims, counterclaims, disputes as to whether a matter is subject to
arbitration, claims brought as class actions, claims arising from
Credit Documents executed in the future, or claims arising out of or
connected with the transaction reflected by this Credit Agreement.
Arbitration shall be conducted under and governed by the Commercial
Financial Disputes Arbitration Rules (the "Arbitration Rules") of the
American Arbitration Association (the "AAA") and Title 9 of the U.S.
Code. All arbitration hearings shall be conducted in Charlotte,
North Carolina. A hearing shall begin within ninety (90) days of
demand for arbitration and all hearings shall be concluded within one
hundred twenty (120) days of demand for arbitration. These time
limitations may not be extended unless a party shows cause for
extension and then no more than a total extension of sixty (60) days.
The expedited procedures set forth in Rule 51 et seq. of the
Arbitration Rules shall be applicable to claims of less than One
Million Dollars ($1,000,000). All applicable statutes of limitation
shall apply to any Dispute. The panel from which all arbitrators are
selected shall be comprised of licensed attorneys selected from the
Commercial Financial Dispute Arbitration Panel of the AAA. The single
arbitrator selected for expedited procedure shall be a retired judge
from the highest court of general jurisdiction, state or federal, of
the state where the hearing will be conducted or if such person is not
available to serve, the single arbitrator may be a licensed attorney.
The parties hereto do not waive applicable Federal or state
substantive law except as provided herein. A judgment upon the award
may be entered in any court having jurisdiction. Notwithstanding the
foregoing, this arbitration provision does not apply to disputes under
or related to Hedging Agreements.
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(b) Notwithstanding the preceding binding arbitration
provisions, the Administrative Agent, the Lenders and the Obligors
agree to preserve, without diminution, certain remedies that the
Administrative Agent on behalf of the Lenders may employ or exercise
freely, independently or in connection with an arbitration proceeding
or after an arbitration action is brought. The Administrative Agent on
behalf of the Lenders shall have the right to proceed in any court of
proper jurisdiction or by self-help to exercise or prosecute the
following remedies, as applicable (i) all rights to foreclose against
any real or personal property or other security by exercising a power
of sale granted under Credit Documents or under applicable law or by
judicial foreclosure and sale, including a proceeding to confirm the
sale; (ii) all rights of self-help including peaceful occupation of
real property and collection of rents, setoff, and peaceful possession
of personal property; (iii) obtaining provisional or ancillary
remedies including injunctive relief, sequestration, garnishment,
attachment, appointment of receiver and filing an involuntary
bankruptcy proceeding; and (iv) when applicable, a judgment by
confession of judgment. Any claim or controversy with regard to the
Administrative Agent's entitlement on behalf of the Lenders to
exercise such remedies is a Dispute. Preservation of these remedies
does not limit the power of an arbitrator to grant similar remedies
that may be requested by a party in a Dispute.
(c) The parties hereto agree that they shall not have a
remedy of punitive or exemplary damages against the other in any
Dispute and hereby waive any right or claim to punitive or exemplary
damages they have now or which may arise in the future in connection
with any Dispute whether the Dispute is resolved by arbitration or
judicially.
(d) By execution and delivery of this Credit Agreement,
each of the parties hereto accepts, for itself and in connection with
its properties, generally and unconditionally, the non-exclusive
jurisdiction relating to any arbitration proceedings conducted under
the Arbitration Rules in Charlotte, North Carolina and irrevocably
agrees to be bound by any final judgment rendered thereby in
connection with this Credit Agreement from which no appeal has been
taken or is available.
14.5 NOTICES.
Except as otherwise provided herein, all notices and correspondences
hereunder shall be in writing and sent by certified or registered mail return
receipt requested, or by overnight delivery service, with all charges prepaid,
if to the Administrative Agent, then to First Union National Bank, NC 0479, ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇▇,
if to the Obligors, then to the Obligors at Industrial Distribution Group,
Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, and to any
Lender, at the address set forth beneath the signature of such Lender contained
herein, or by facsimile transmission, promptly confirmed in writing sent by
first class mail, if to the Administrative Agent, at (▇▇▇) ▇▇▇-▇▇▇▇, and if to
the Obligors at 404-949-2040 and if to any Lender at the facsimile number set
forth beneath the signature of such Lender contained herein. All such notices
and correspondence shall be deemed given (i) if sent by certified or registered
mail, three (3) Business Days after being postmarked, (ii) if sent by overnight
delivery service, when received at the above stated addresses or when delivery
is refused and (iii) if sent by facsimile transmission,
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when receipt of such transmission is acknowledged; provided that notices to the
Administrative Agent shall not be effective until received.
14.6 ASSIGNABILITY.
(a) No Obligor shall have the right to assign this
Credit Agreement or any interest therein except with the prior written
consent of the Lenders.
(b) Notwithstanding subsection (c) of this Section 14.6,
nothing herein shall restrict, prevent or prohibit any Lender from (i)
pledging its Loans hereunder to a Federal Reserve Bank in support of
borrowings made by such Lender from such Federal Reserve Bank or (ii)
granting assignments or participations in such Lender's Loans and/or
Commitments hereunder to its parent company and/or to any affiliate of
such Lender or to any existing Lender or affiliate thereof. Any Lender
may make, carry or transfer Loans at, to or for the account of, any of
its branch offices or the office of an affiliate of such Lender except
to the extent such transfer would result in increased costs to the
Obligors.
(c) Each Lender may, assign to one or more banks or
other financial institutions all or a portion of its rights and
obligations under this Credit Agreement and the Notes; provided,
however, that (i) unless the assignee is another Lender or an
affiliate of the assignor Lender, then, each of the Administrative
Agent and the Borrower shall have given its prior consent to such
assignment (neither such consent to be unreasonably withheld,
conditioned or delayed), provided that if a Default or Event of
Default then exists, the Borrower's consent shall be deemed waived
(but concurrent notice of such assignment shall be given to the
Borrower), (ii) for each such assignment, the parties thereto shall
execute and deliver to the Administrative Agent, for its acceptance
and recording in the Register (as defined below), an Assignment and
Acceptance, together with any Note or Notes subject to such assignment
and a processing and recordation fee of Three Thousand Five Hundred
Dollars ($3,500) to be paid by the assignee, (iii) no such assignment
shall be for less than Five Million Dollars ($5,000,000) or, if less,
the entire remaining Commitments of such Lender of the Commitments,
(iv) if such assignee is a Foreign Lender, all of the requirements of
Section 2.7(b) shall have been satisfied as a condition to such
assignment and (v) each such assignment shall be of a uniform, and not
a varying, percentage of all rights and obligations under and in
respect of both the Revolving Credit Commitment of such Lender and all
Loans of such Lender. Upon such execution and delivery of the
Assignment and Acceptance to the Administrative Agent, from and after
the date specified as the effective date in the Assignment and
Acceptance (the "Acceptance Date"), (x) the assignee thereunder shall
be a party hereto, and, to the extent that rights and obligations
hereunder have been assigned to it pursuant to such Assignment and
Acceptance, such assignee shall have the rights and obligations of a
Lender hereunder and (y) the assignor thereunder shall, to the extent
that rights and obligations hereunder have been assigned by it
pursuant to such Assignment and Acceptance, relinquish its rights
(other than any rights it may have pursuant to Section 14.8 which will
survive) and be released from its obligations under this Credit
Agreement (and, in the case of an Assignment and Acceptance covering
all or the remaining portion
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of an assigning Lender's rights and obligations under this Credit
Agreement, such Lender shall cease to be a party hereto).
(d) By executing and delivering an Assignment and
Acceptance, the assignee thereunder confirms and agrees as follows:
(i) other than as provided in such Assignment and Acceptance, the
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Credit Agreement or
the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Credit Agreement, the Notes or any other
instrument or document furnished pursuant hereto, (ii) such assigning
Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Obligors
or the performance or observance by the Obligors of any of its
obligations under this Credit Agreement or any other instrument or
document furnished pursuant hereto, (iii) such assignee confirms that
it has received a copy of this Credit Agreement, together with copies
of the financial statements referred to in Section 7.1 and such other
documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and
Acceptance, (iv) such assignee will, independently and without
reliance upon the Administrative Agent, such assigning Lender or any
other Lender and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Credit Agreement,
(v) such assignee appoints and authorizes the Administrative Agent to
take such action as agent on its behalf and to exercise such powers
under this Credit Agreement as are delegated to the Administrative
Agent by the terms hereof, together with such powers as are reasonably
incidental thereto and (vi) such assignee agrees that it will perform
in accordance with their terms all of the obligations which by the
terms of this Credit Agreement are required to be performed by it as a
Lender.
(e) The Administrative Agent shall maintain at its
address referred to in Section 14.5 a copy of each Assignment and
Acceptance delivered to and accepted by it and a register for the
recordation of the names and addresses of the Lenders and the
Commitments of, and principal amount of the Loans owing to, each
Lender from time to time (the "Register"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest
error, and the Obligors, the Administrative Agent and the Lenders may
treat each Person whose name is recorded in the Register as a Lender
hereunder for all purposes of this Credit Agreement. The Register and
copies of each Assignment and Acceptance shall be available for
inspection by the Obligors or any Lender at any reasonable time and
from time to time upon reasonable prior notice.
(f) Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender, together with the Note or Notes
subject to such assignment, the Administrative Agent shall, if such
Assignment and Acceptance has been completed, (i) accept such
Assignment and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to the
Obligors. Within five (5) Business Days after its receipt of such
notice, the Obligors shall execute and deliver to the Administrative
Agent in exchange for the surrendered Note or Notes (which the
assigning Lender agrees to promptly deliver to the Borrower) a new
Note or Notes to the order of
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the assignee in an amount equal to the Commitment or Commitments
assumed by it pursuant to such Assignment and Acceptance and, if the
assigning Lender has retained a Commitment or Commitments hereunder, a
new Note or Notes to the order of the assigning Lender in an amount
equal to the Commitment or Commitments retained by it hereunder. Such
new Note or Notes shall re-evidence the indebtedness outstanding under
the old Notes or Notes and shall be in an aggregate principal amount
equal to the aggregate principal amount of such surrendered Note or
Notes, shall be dated the Closing Date and shall otherwise be in
substantially the form of the Note or Notes subject to such
assignments.
(g) Each Lender may sell participations (without the
consent of the Administrative Agent, the Obligors or any other Lender)
to one or more parties in or to all or a portion of its rights and
obligations under this Credit Agreement (including, without
limitation, all or a portion of its Commitments, the Loans owing to it
and the Note or Notes held by it); provided that (i) such Lender's
obligations under this Credit Agreement (including, without
limitation, its Commitments to the Obligors hereunder) shall remain
unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations, (iii)
such Lender shall remain the holder of any such Note for all purposes
of this Credit Agreement, (iv) the Obligors, the Administrative Agent,
and the other Lenders shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations
under this Credit Agreement and (v) such Lender shall not transfer,
grant, assign or sell any participation under which the participant
shall have rights to approve any amendment or waiver of this Credit
Agreement except to the extent such amendment or waiver would (A)
extend the final maturity date or the date for the payments of any
installment of fees or principal or interest of any Loans or Letter of
Credit reimbursement obligations in which such participant is
participating, (B) reduce the amount of any installment of principal
of the Loans or Letter of Credit reimbursement obligations in which
such participant is participating, (C) except as otherwise expressly
provided in this Credit Agreement, reduce the interest rate applicable
to the Loans or Letter of Credit reimbursement obligations in which
such participant is participating, or (D) except as otherwise
expressly provided in this Credit Agreement, reduce any Fees payable
hereunder.
(h) Each Lender agrees that, without the prior written
consent of the Obligors and the Administrative Agent, it will not make
any assignment or sell a participation hereunder in any manner or
under any circumstances that would require registration or
qualification of, or filings in respect of, any Loan, Note or other
Obligation under the securities laws of the United States of America
or of any jurisdiction.
(i) In connection with the efforts of any Lender to
assign its rights or obligations or to participate interests, such
Lender may disclose any information in its possession regarding the
Obligors in accordance with Section 14.7.
(j) Anything in this Section to the contrary
notwithstanding, any Lender may assign and pledge all or any portion
of the Loans and/or obligations owing to it to any Federal Reserve
Bank or the United States Treasury as collateral security pursuant to
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Regulation A of the Board of Governors of the Federal Reserve System
and any Operating Circular issued by such Federal Reserve Bank,
provided that any payment in respect of such assigned Loans and/or
obligations made by the Borrower to the assigning and/or pledging
Lender in accordance with the terms of this Agreement shall satisfy
the Borrower's obligations hereunder in respect of such assigned Loans
and/or obligations to the extent of such payment. No such assignment
shall release the assigning and/or pledging Lender from its
obligations hereunder.
14.7 INFORMATION.
The Administrative Agent and each Lender (each, a "Lending Party")
agrees to keep confidential any information furnished or made available to it
by the Obligors pursuant to this Credit Agreement that is marked confidential;
provided that nothing herein shall prevent any Lending Party from disclosing
such information (a) to any other Lending Party or any affiliate of any Lending
Party, or any officer, director, employee, agent, or advisor of any Lending
Party or affiliate of any Lending Party, (b) to any other Person if reasonably
incidental to the administration of the credit facility provided herein, (c) as
required by any law, rule, or regulation, (d) upon the order of any court or
administrative agency, (e) upon the request or demand of any regulatory agency
or authority, (f) that is or becomes available to the public or that is or
becomes available to any Lending Party other than as a result of a disclosure
by any Lending Party prohibited by this Credit Agreement, (g) in connection
with any litigation to which such Lending Party or any of its affiliates may be
a party, (h) to the extent necessary in connection with the exercise of any
remedy under this Credit Agreement or any other Credit Document, (i) subject to
provisions substantially similar to those contained in this Section 14.7, to
any actual or proposed participant or assignee and (j) to Gold Sheets and other
similar bank trade publications; such information to consist of deal terms and
other information customarily found in such publications.
14.8 PAYMENT OF EXPENSES; INDEMNIFICATION.
The Obligors agree to: (a) pay all reasonable out-of-pocket costs and
expenses of (i) the Administrative Agent in connection with (A) the
negotiation, preparation, execution and delivery and administration of this
Credit Agreement and the other Credit Documents and the documents and
instruments referred to therein (including, without limitation, the reasonable
fees and expenses of special counsel to the Administrative Agent and the fees
and expenses of counsel for the Administrative Agent in connection with
collateral issues), and (B) any amendment, waiver or consent relating hereto
and thereto including, without limitation, any such amendments, waivers or
consents resulting from or related to any work-out, re-negotiation or
restructure relating to the performance by the Obligors under this Credit
Agreement and (ii) the Administrative Agent and the Lenders in connection with
enforcement of the Credit Documents and the documents and instruments referred
to therein, including but not limited to, any work-out, re-negotiation or
restructure relating to the performance by the Obligors under this Credit
Agreement, including, without limitation, in connection with any such
enforcement, the reasonable fees and disbursements of counsel for the
Administrative Agent and each of the Lenders (including the allocated costs of
internal counsel). The Obligors shall indemnify, defend and hold harmless the
Administrative Agent, the Issuing Bank and each of the Lenders and their
respective directors, officers, agents, employees and counsel from and against
(x) any and all
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losses, claims, damages, liabilities, deficiencies, judgments or expenses
incurred by any of them (except to the extent that it is finally judicially
determined to have resulted from their own gross negligence or willful
misconduct) arising out of or by reason of any litigation, investigation, claim
or proceeding which arises out of or is in any way related to (i) this Credit
Agreement, any Letter of Credit, any other Credit Documents or the transactions
contemplated hereby or thereby, (ii) any actual or proposed use by any Obligor
of the proceeds of the Loans or (iii) the Administrative Agent's, the Issuing
Bank's or the Lenders' entering into this Credit Agreement, the other Credit
Documents or any other agreements and documents relating hereto, including,
without limitation, amounts paid in settlement, court costs and the fees and
disbursements of counsel incurred in connection with any such litigation,
investigation, claim or proceeding or any advice rendered in connection with
any of the foregoing and (y) any such losses, claims, damages, liabilities,
deficiencies, judgments or expenses incurred in connection with any remedial or
other action taken by any Obligor or any of the Lenders in connection with
compliance by any Obligor or any of its Subsidiaries, or any of their
respective properties, with any federal, state or local environmental laws,
acts, rules, regulations, orders, directions, ordinances, criteria or
guidelines. If and to the extent that the obligations of any Obligor hereunder
are unenforceable for any reason, such Obligor hereby agrees to make the
maximum contribution to the payment and satisfaction of such obligations which
is permissible under applicable law. The Obligors' obligations under this
Section 14.8 shall survive any termination of this Credit Agreement and the
other Credit Documents and the payment in full of the Obligations, and are in
addition to, and not in substitution of, any other of their Obligations set
forth in this Credit Agreement. In addition, the Obligors shall, upon demand,
pay to the Administrative Agent and any Lender all costs and expenses
(including the reasonable fees and disbursements of counsel and other
professionals) paid or incurred by the Administrative Agent, the Issuing Bank
or such Lender in (A) enforcing or defending its rights under or in respect of
this Credit Agreement, the other Credit Documents or any other document or
instrument now or hereafter executed and delivered in connection herewith, (B)
in collecting the Loans, (C) in foreclosing or otherwise collecting upon the
Collateral or any part thereof and (D) obtaining any legal, accounting or other
advice in connection with any of the foregoing.
14.9 ENTIRE AGREEMENT, SUCCESSORS AND ASSIGNS.
This Credit Agreement along with the other Credit Documents and the
Fee Letter constitutes the entire agreement among the Obligors, the
Administrative Agent and the Lenders, supersedes any prior agreements among
them, and shall bind and benefit the Obligors and the Lenders and their
respective successors and permitted assigns.
14.10 AMENDMENTS, ETC.
Neither the amendment or waiver of any provision of this Credit
Agreement or any other Credit Document, nor the consent to any departure by any
Obligor therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Required Lenders (or if the Lenders shall not be
parties thereto, by the parties thereto and consented to by the Administrative
Agent) and the Borrower, and each such amendment, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided that no amendment, waiver or consent shall unless in writing
and signed by all the Lenders, do any of the following: (a) increase the
Commitments of the Lenders or subject the Lenders to any additional
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obligations, (b) except as otherwise expressly provided in this Credit
Agreement, reduce the principal of, or interest on, any Note or any Letter of
Credit reimbursement obligations or any fees hereunder, (c) postpone any date
fixed for any payment or mandatory prepayment in respect of principal of, or
interest on, any Note or any Letter of Credit reimbursement obligations or any
fees hereunder, (d) change the percentage of the Commitments, or any minimum
requirement necessary for the Lenders or the Required Lenders to take any
action hereunder, (e) amend or waive Section 2.3(b), Section 2.8, Section 2.9,
Section 7.16, Section 13.6 or this Section 14.10, or change the definition of
Required Lenders, (f) except as otherwise expressly provided in this Credit
Agreement, and other than in connection with the financing, refinancing, sale
or other disposition of any asset of the Obligors permitted under this Credit
Agreement, release any Liens in favor of the Lenders on any material portion of
the Collateral, (g) release any guaranties of the Obligations, or (h) except as
expressly permitted hereunder, increase the advance rates used to calculate the
Borrowing Base beyond that in effect on the Closing Date and, provided,
further, that no amendment, waiver or consent affecting the rights or duties of
the Administrative Agent or the Issuing Bank under any Credit Document shall in
any event be effective, unless in writing and signed by the Administrative
Agent and/or the Issuing Bank, as applicable, in addition to the Lenders
required hereinabove to take such action. Notwithstanding any of the foregoing
to the contrary, the consent of the Obligors shall not be required for any
amendment, modification or waiver of the provisions of Article XIII (other than
the provisions of Section 13.9). In addition, the Obligors and the Lenders
hereby authorize the Administrative Agent to modify this Credit Agreement by
unilaterally amending or supplementing Schedule 1.1A from time to time in the
manner requested by the Obligors, the Administrative Agent or any Lender in
order to reflect any assignments or transfers of the Loans as provided for
hereunder; provided, however, that the Administrative Agent shall promptly
deliver a copy of any such modification to the Obligors and each Lender.
14.11 NONLIABILITY OF ADMINISTRATIVE AGENT AND LENDERS.
The relationship between any Obligor on the one hand and the Lenders
and the Administrative Agent on the other hand shall be solely that of obligor
and lender. Neither the Administrative Agent nor any Lender shall have any
fiduciary responsibilities to any Obligor. Neither the Administrative Agent nor
any Lender undertakes any responsibility to any Obligor to review or inform
such Obligor of any matter in connection with any phase of such Obligor's
business or operations.
14.12 INDEPENDENT NATURE OF LENDERS' RIGHTS.
The amounts payable at any time hereunder to each Lender under such
Lender's Note or Notes shall be a separate and independent debt.
14.13 COUNTERPARTS.
This Credit Agreement may be executed in any number of counterparts
and by the different parties hereto in 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.
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14.14 EFFECTIVENESS.
This Credit Agreement shall become effective at such time when all of
the conditions set forth in Section 5.1 have been satisfied or waived by the
Lenders and it shall have been executed by each Obligor and the Administrative
Agent, and the Administrative Agent shall have received copies hereof
(telefaxed or otherwise) which, when taken together, bear the signatures of
each Lender, and thereafter this Credit Agreement shall be binding upon and
inure to the benefit of each Obligor, the Administrative Agent and each Lender
and their respective successors and assigns.
14.15 SEVERABILITY.
In case any provision in or obligation under this Credit Agreement or
the Notes or the other Credit Documents 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.
14.16 HEADINGS DESCRIPTIVE.
The headings of the several sections and subsections of this Credit
Agreement, and the Table of Contents, are inserted for convenience only and
shall not in any way affect the meaning or construction of any provision of
this Credit Agreement.
14.17 MAXIMUM RATE.
Notwithstanding anything to the contrary contained elsewhere in this
Credit Agreement or in any other Credit Document, the Obligors, the
Administrative Agent and the Lenders hereby agree that all agreements among
them under this Credit Agreement and the other Credit Documents, whether now
existing or hereafter arising and whether written or oral, are expressly
limited so that in no contingency or event whatsoever shall the amount paid, or
agreed to be paid, to the Administrative Agent or any Lender for the use,
forbearance, or detention of the money loaned to any Obligor and evidenced
hereby or thereby or for the performance or payment of any covenant or
obligation contained herein or therein, exceed the Highest Lawful Rate. If due
to any circumstance whatsoever, fulfillment of any provisions of this Credit
Agreement or any of the other Credit Documents at the time performance of such
provision shall be due shall exceed the Highest Lawful Rate, then,
automatically, (unless otherwise prohibited under applicable law) the
obligation to be fulfilled shall be modified or reduced to the extent necessary
to limit such interest to the Highest Lawful Rate, and if from any such
circumstance any Lender should ever receive anything of value deemed interest
by applicable law which would exceed the Highest Lawful Rate, such excessive
interest shall be applied (unless otherwise prohibited under applicable law) to
the reduction of the principal amount then outstanding hereunder or on account
of any other then outstanding Obligations and not to the payment of interest,
or if such excessive interest exceeds the principal unpaid balance then
outstanding hereunder and such other then outstanding Obligations, such excess
shall be refunded to the applicable Obligor. All sums paid or agreed to be paid
to the Administrative Agent or any Lender for the use, forbearance, or
detention of the Obligations and other indebtedness of the Obligors to the
Administrative Agent or any Lender shall, to the extent permitted by applicable
law, be amortized, prorated, allocated and spread throughout the full term of
such indebtedness until payment in full so that the actual rate of interest on
account of all such indebtedness does not exceed the Highest Lawful Rate
throughout the entire term of such indebtedness. The terms and
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provisions of this Section shall control every other provision of this Credit
Agreement and all agreements among the Obligors, the Administrative Agent and
the Lenders.
14.18 RIGHT OF SETOFF.
In addition to and not in limitation of all rights of offset that any
Lender or other holder of a Note may have under applicable law, each Lender or
other holder of a Note shall, if any Event of Default has occurred and is
continuing and whether or not such Lender or such holder has made any demand or
the Obligations of any Obligor are matured, have the right to appropriate and
apply to the payment of the Obligations of such Obligor all deposits (general
or special, time or demand, provisional or final) then or thereafter held by
and other indebtedness or property then or thereafter owing by such Lender or
other holder, including, without limitation, any and all amounts in the First
Union Account. Any amount received as a result of the exercise of such rights
shall be reallocated among the Lenders as set forth in Section 3.8.
14.19 POWER OF ATTORNEY.
Each Obligor appoints the Borrower and all senior officers of the
Borrower, to be its attorneys ("its Attorneys") and in its name and on its
behalf and as its act and deed or otherwise to sign all documents and carry out
all such acts as are necessary or appropriate in connection with executing any
Notice of Borrowing, Notice of Extension/Conversion or any Borrowing Base
Certificate or any security documents (the "Documents") in connection with this
Credit Agreement, provided that such Documents are in substantially the form
provided therefor in the applicable exhibits thereto. This Power of Attorney
shall be valid for the duration of the term of this Credit Agreement. Each
Subsidiary Obligor hereby undertakes to ratify everything which either of its
Attorneys shall do in order to execute the Documents mentioned herein.
14.20 REPLACEMENT LENDERS.
Within thirty (30) days after receipt by the Borrower of written
notice and demand from any Lender (an "Affected Lender") (i) for payment of
additional amounts or increased costs as provided in Section 4.7 or (ii) or of
the inability of a Lender to make Eurodollar Loans under Section 4.9, the
Borrower may, at its option, notify the Administrative Agent and such Affected
Lender of its intention to replace the Affected Lender. So long as no Event of
Default shall have occurred and be continuing, the Borrower, with the consent
of the Administrative Agent (such consent not to be unreasonably withheld), may
obtain, at the borrower's expense, a replacement Lender ("Replacement Lender")
for the Affected Lender. If the Borrower obtains a Replacement Lender within
ninety (90) days following notice of its intention to do so, the Affected
Lender must sell and assign its Loans and commitments to such Replacement
Lender for an amount equal to the principal balance of all Loans held by the
Affected Lender and all accrued interest and fees with respect thereto through
the date of such sale, provided that the Borrower shall have reimbursed such
Affected Lender for the additional amounts or increased costs that it is
entitled to receive under this Agreement through the date of such sale and
assignment.
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14.21 Limitation on Attorneys Fees and Expenses.
Notwithstanding any other provision of this Credit Agreement or any
other Credit Document, or any agreement or other document executed in
connection herewith or therewith, any reimbursement, indemnity, or other
Obligation of the Obligors for the attorneys' fees and expenses of the
Administrative Agent, the Issuing Bank, or any Lender shall be determined
without the benefit of any statutory presumption and shall be limited to the
reasonable, actually incurred attorneys' fees and expenses of such Person.
14.22 CERTAIN HONORARY AGENTS.
Fleet and Bank of America are, respectively, named as Documentation
Agent and Syndication Agent hereunder. These are honorary titles, and neither
Fleet nor Bank of America shall have any additional or different rights,
benefits or obligations hereunder than any other Lender because of such
appointments.
14.23 SEALS.
To the extent that in this Credit Agreement or any other Credit
Agreement, in reference to the execution of such Credit Documents by any
Person, provision is made for affixation of a seal, the word "seal" or the
symbol "L.S." shall itself be sufficient to connote such affixation.
ARTICLE XV
AFFILIATE GUARANTY
15.1 The Guarantee.
The Affiliate Guarantors hereby jointly and severally guarantee to the
Administrative Agent and the Lenders the prompt payment in full when due
(whether at stated maturity, by acceleration or otherwise) of all Obligations
(such Obligations herein called, collectively, the "Guaranteed Obligations"),
in each case strictly in accordance with the terms hereof. The Affiliate
Guarantors hereby further jointly and severally agree that if the Borrower
shall fail to pay in full when due (whether at stated maturity, by acceleration
or otherwise) any of the Guaranteed Obligations, the Affiliate Guarantors will
promptly pay the same, without any demand or notice whatsoever, and that in the
case of any extension of time of payment or renewal of any of the Guaranteed
Obligations, the same will be promptly paid in full when due (whether at
extended maturity, by acceleration or otherwise) in accordance with the terms
of such extension or renewal.
15.2 Obligations Unconditional.
The obligations of the Affiliate Guarantors hereunder are absolute and
unconditional, joint and several, irrespective of the value, genuineness,
validity, regularity or enforceability of the obligations of Borrower under
this Credit Agreement, the Notes or any other Credit Document or any
substitution, release or exchange of any other guarantee of or security for any
of the Guaranteed Obligations, and, to the fullest extent permitted by
applicable law, irrespective of any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor (other than full payment and satisfaction of all
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Guaranteed Obligations), it being the intent of this Section that the
obligations of the Affiliate Guarantors hereunder shall be absolute and
unconditional, joint and several, under any and all circumstances. Without
limiting the generality of the foregoing, it is agreed that, unless otherwise
prohibited by applicable law, the occurrence of any one or more of the
following shall not alter or impair the liability of the Affiliate Guarantors
hereunder which shall remain absolute and unconditional as described above: (i)
at any time or from time to time, without notice to any of the Affiliate
Guarantors, the time for any performance of or compliance with any of the
Guaranteed Obligations shall be extended, or such performance or compliance
shall be waived; (ii) any of the acts mentioned in any of the provisions of
this Agreement or the Notes or any other Credit Document shall fail to be done
or be omitted; (iii) the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right under this Agreement or
the Notes or any other Credit Document shall be waived or any other guarantee
of any of the Guaranteed Obligations or any security therefor shall be released
or exchanged in whole or in part or otherwise dealt with; or (iv) any lien or
security interest granted to, or in favor of, the Administrative Agent as
security for any of the Guaranteed Obligations shall fail to be perfected. The
Affiliate Guarantors further hereby expressly waive diligence, presentment,
demand of payment, protest and all notices whatsoever, and any requirement that
Administrative Agent or any Lender exhaust any right, power or remedy or
proceed against Borrower under this Agreement or the Notes or any other Credit
Document, or against any other Person under any other Guaranty of, or security
for, any of the Guaranteed Obligations.
15.3 REINSTATEMENT.
The obligations of the Affiliate Guarantors hereunder shall be
automatically reinstated if and to the extent that for any reason any payment
by or on behalf of the Borrower in respect of the Guaranteed Obligations is
rescinded or must be otherwise restored by any holder of any of the Guaranteed
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise and the Affiliate Guarantors jointly and severally
agree that they will indemnify each Administrative Agent and Lender on demand
for all reasonable costs and expenses (including, without limitation,
reasonable fees and disbursements of legal counsel) incurred by Administrative
Agent or such Lender in connection with such rescission or restoration,
including any such costs and expenses incurred in defending against any claim
alleging that such payment constituted a preference, fraudulent transfer or
similar payment under any bankruptcy, insolvency or similar law.
15.4 DEFERRAL OF SUBROGATION RIGHTS.
Each Affiliate Guarantor hereby subordinates to Administrative Agent
and the Lenders all rights of subrogation or contribution against the Borrower,
whether arising by contract or operation of law (including, without limitation,
any such right arising under the Bankruptcy Code) or otherwise by reason of any
payment by it pursuant to the provisions hereof until all Obligations (other
than any constituting contingent indemnity obligations) are fully paid and
satisfied and all Commitments are terminated.
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15.5 REMEDIES.
The Affiliate Guarantors jointly and severally agree that, as between
the Affiliate Guarantors and Administrative Agent and Lenders, the Guaranteed
Obligations may be declared to be forthwith due and payable as provided herein
(and shall be deemed to have become automatically due and payable in the
circumstances provided herein) for purposes hereof, notwithstanding any stay,
injunction or other prohibition preventing such declaration (or such
obligations from becoming automatically due and payable) as against the
Borrower and that, in the event of such declaration in accordance with the
terms hereof (whether or not due and payable by the Borrower) shall forthwith
become due and payable by the Affiliate Guarantors for purposes hereof.
15.6 CONTINUING GUARANTY.
The guaranty set forth herein is a continuing guaranty, and shall
apply to all Guaranteed Obligations, whenever and howsoever arising.
15.7 RIGHTS OF CONTRIBUTION.
The Affiliate Guarantors hereby agree, as between themselves, that if
any Affiliate Guarantor shall become an "Excess Funding Guarantor" (as defined
below) by reason of the payment by such Affiliate Guarantor of any Guaranteed
Obligations, each other Affiliate Guarantor shall, on demand of such Excess
Funding Guarantor (but subject to the next sentence), pay to such Excess
Funding Guarantor an amount equal to such Affiliate Guarantor's "Pro Rata
Share" (as defined below and determined, for this purpose, without reference to
the properties, debts and liabilities of such Excess Funding Guarantor) of the
"Excess Payment" (as defined below) in respect of such Guaranteed Obligations.
The payment obligation of an Affiliate Guarantor to any Excess Funding
Guarantor under this Section shall be subordinate and subject in right of
payment to the prior payment in full of the obligations of such Affiliate
Guarantor under the other provisions of this Section and such Excess Funding
Guarantor shall not exercise any right or remedy with respect to such excess
until payment and satisfaction in full of all such obligations. For purposes
hereof, (i) "Excess Funding Guarantor" means, in respect of any Guaranteed
Obligations, an Affiliate Guarantor that has paid an amount in excess of its
Pro Rata Share of such Guaranteed Obligations, (ii) "Excess Payment" means, in
respect of any Guaranteed Obligations, the amount paid by an Excess Funding
Guarantor in excess of its Pro Rata Share of such Guaranteed Obligations (iii)
"Pro Rata Share" means, for any Affiliate Guarantor, the ratio (expressed as a
percentage) of (x) the amount by which the aggregate present fair saleable
value of all assets of such Affiliate Guarantor (excluding any shares of stock
of any other Affiliate Guarantor) exceeds the amount of all the debts and
liabilities of such Affiliate Guarantor (including contingent, subordinated,
unmatured and unliquidated liabilities, but excluding the obligations of such
Affiliate Guarantor hereunder and any obligations of any other Affiliate
Guarantor that have been guaranteed by such Affiliate Guarantor) to (y) the
amount by which the aggregate fair saleable value of all assets of all of the
Affiliate Guarantors exceeds the amount of all the debts and liabilities
(including contingent, subordinated, unmatured and unliquidated liabilities,
but excluding the obligations of the Affiliate Guarantor hereunder) of the
Affiliate Guarantors, determined (A) with respect to any Affiliate Guarantor
that is a party hereto on the Closing Date, as of the Closing Date, and (B)
with respect to any other Affiliate Guarantor, as of the date such Affiliate
Guarantor becomes an Affiliate Guarantor hereunder.
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15.8 LIMITATION ON GUARANTEED OBLIGATIONS.
In any action or proceeding involving any state corporate law, or any
state or federal bankruptcy, insolvency, reorganization or other law affecting
the rights of creditors generally, if the obligations of the Affiliate
Guarantors hereunder, after giving effect to the contribution rights provided
herein above, would otherwise be held or determined to be void, invalid or
unenforceable, or subordinated to the claims of any other creditors, on account
of the amount of its liability hereunder, then, notwithstanding any other
provision hereof to the contrary, the amount of such liability shall, without
any further action by any Affiliate Guarantor, Administrative Agent, any Lender
or any other Person, be automatically limited and reduced to the highest amount
that is valid and enforceable and not subordinated to the claims of other
creditors as determined in such action or proceeding.
15.9 SUBORDINATION.
In the event that any Affiliate Guarantor shall advance any sums to
the Borrower, or in the event the Borrower has heretofore or shall hereafter
become indebted to any Affiliate Guarantor before the Obligations have been
paid in full and this Agreement is terminated, all such advances and
indebtedness shall be subordinate in all respects to the Obligations (the
foregoing herein called the "Affiliate Guarantor Subordinated Debt"). Any
payment to any Affiliate Guarantors on account of the Affiliate Guarantor
Subordinated Debt shall be collected and received by the Affiliate Guarantors
in trust for the Lenders and shall be paid over to the Administrative Agent on
account of the Obligations without impairing or releasing the obligations of
the Affiliate Guarantors hereunder. Without limitation of the forgoing, without
the prior written consent of the Required Lenders, the Affiliate Guarantors
shall not ask, demand, receive, accept, ▇▇▇ for, set off, collect or enforce
the Affiliate Guarantor Subordinated Debt or any collateral and security
therefor until all of the Obligations have been paid in full and this Agreement
is terminated. In the event of any sale, receivership, insolvency or bankruptcy
proceeding, or assignment for the benefit of creditors, or any proceeding by or
against the Borrower for any relief under any bankruptcy or insolvency law or
other laws relating to the relief of debtors, readjustment of indebtedness,
reorganizations, compositions or extensions, then and in any such event any
payment or distribution of any kind or character, either in cash ,securities or
other property, which shall be payable or deliverable upon, or with respect to,
all or any part of the Affiliate Guarantor Subordinated Debt or otherwise shall
be paid or delivered directly to the Administrative Agent for application to
the obligations and liabilities of the Affiliate Guarantors under this
Agreement (whether due or not due and in such order and manner as the
Administrative Agent may determine in the exercise of its sole discretion)
until the obligations of the Affiliate Guarantors hereunder shall have been
fully paid and satisfied. The Affiliate Guarantors hereby irrevocably authorize
and empower the Administrative Agent to demand, ▇▇▇ for, collect and receive
every such payment or distribution on account of the Affiliate Guarantor
Subordinated Debt and give acquittance therefor and to file claims and take
such other proceedings in the Administrative Agent's own name or in the name of
the Affiliate Guarantors or otherwise, as the Administrative Agent may deem
necessary or advisable to carry out the provisions of this Agreement. The
Affiliate Guarantors hereby agree to execute and deliver to the Administrative
Agent such powers of attorney, assignments, endorsements or other instruments
as may be requested by the Administrative Agent in order to enable the
Administrative Agent to enforce any and all claims upon, or with respect to,
the Affiliate
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Guarantor Subordinated Debt, and to collect and receive any and all payments or
distributions which may be payable or deliverable at any time upon or with
respect thereto. So as to secure the performance by the Affiliate Guarantors of
the provisions hereof, each Affiliate Guarantor assigns, pledges and grants to
the Administrative Agent a security interest in, and lien on, the Affiliate
Guarantor Subordinated Debt, all proceeds thereof and all any security and
collateral therefor. Upon the request of the Administrative Agent, the
Affiliate Guarantors shall endorse, assign and deliver to the Administrative
Agent all notes, instruments and agreements evidencing, securing, guarantying
or made in connection with the Affiliate Guarantor Subordinated Debt.
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[THIS PAGE LEFT BLANK INTENTIONALLY]
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IN WITNESS WHEREOF the parties hereto have caused this Credit
Agreement to be executed under seal and delivered by their proper and duly
authorized officers as of the date set forth above.
BORROWER:
INDUSTRIAL DISTRIBUTION GROUP, INC. (SEAL)
By:
---------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, Senior Vice President
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AFFILIATED GUARANTORS:
ASSOCIATED SUPPLIERS, INC. (SEAL)
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
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ATLANTIC INDUSTRIAL SUPPLY CO., INC. (SEAL)
By:
----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, Secretary
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▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, INC. (SEAL)
By:
----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, Secretary
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B&J INDUSTRIAL SUPPLY COMPANY (SEAL)
By:
----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, Secretary
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▇▇▇▇▇▇ BROS., INC. (SEAL)
By:
----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, Secretary
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CARDINAL MACHINERY, INC. (SEAL)
By:
----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, Secretary
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▇▇▇▇▇▇ INDUSTRIAL SUPPLIES, INC. (SEAL)
By:
----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, Secretary
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THE DISTRIBUTION GROUP, INC. (SEAL)
By:
----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, Secretary
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DYNAMIC TOOL & ABRASIVES, INC. (SEAL)
By:
----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, Secretary
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▇.▇. ▇▇▇▇▇▇▇▇▇▇ COMPANY (SEAL)
By:
----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, Secretary
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▇▇▇▇▇▇ INDUSTRIAL SUPPLIES, INC. (SEAL)
By:
----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, Secretary
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[IDG-MEXICO, INC.] (SEAL)
By:
----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, Secretary
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IDG REAL PROPERTIES, INC. (SEAL)
By:
----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, Secretary
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INDUSTRIAL DISTRIBUTION GROUP -
CALIFORNIA, INC. (SEAL)
By:
----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, Secretary
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THE INNOVATIVE DISTRIBUTOR GROUP,
INC. (SEAL)
By:
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▇▇▇▇ ▇. ▇▇▇▇▇▇, Secretary
-124-
▇▇▇
▇.▇. ▇▇▇▇▇▇▇ ▇▇. (▇▇▇▇)
By:
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▇▇▇▇ ▇. ▇▇▇▇▇▇, Secretary
-125-
133
▇.▇. SUPPLY, INC. (SEAL)
By:
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▇▇▇▇ ▇. ▇▇▇▇▇▇, Secretary
-126-
134
MEL'S INDUSTRIAL SUPPLIES, INC. (SEAL)
By:
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▇▇▇▇ ▇. ▇▇▇▇▇▇, Secretary
-127-
135
THE NEW ENGLAND GROUP INDUSTRIAL
DISTRIBUTORS, INC. (SEAL)
By:
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▇▇▇▇ ▇. ▇▇▇▇▇▇, Secretary
-128-
136
NORTHERN TOOL & SUPPLY, INC. (SEAL)
By:
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▇▇▇▇ ▇. ▇▇▇▇▇▇, Secretary
-129-
137
▇▇▇▇▇ & ▇▇▇▇▇▇, INC. (SEAL)
By:
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▇▇▇▇ ▇. ▇▇▇▇▇▇, Secretary
-130-
138
REFCO, INC. (SEAL)
By:
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▇▇▇▇ ▇. ▇▇▇▇▇▇, Secretary
-131-
139
▇▇▇▇▇▇▇ INDUSTRIAL SUPPLY CO. (SEAL)
By:
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▇▇▇▇ ▇. ▇▇▇▇▇▇, Secretary
-132-
140
TRI-STAR INDUSTRIAL SUPPLY, INC. (SEAL)
By:
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▇▇▇▇ ▇. ▇▇▇▇▇▇, Secretary
-133-
141
ADMINISTRATIVE AGENT AND LENDER:
FIRST UNION NATIONAL BANK, (SEAL)
as Administrative Agent and as a Lender
By:
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▇▇▇▇▇▇ ▇▇▇▇▇▇, Senior Vice President
Lending Office (Base Rate Loans)
Address: Charlotte Plaza
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Lending Office (Eurodollar Loans)
Address: Charlotte Plaza
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Notice Address
Address: Charlotte Plaza
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
-134-
142
OTHER LENDERS:
FLEET CAPITAL CORPORATION, (SEAL)
as Documentation Agent and as a Lender
By:
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Name:
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Title:
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Lending Office (Base Rate Loans)
Address: ▇▇ ▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Lending Office (Eurodollar Loans)
Address: ▇▇ ▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Notice ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇: ▇▇ ▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
-135-
143
BANK OF AMERICA, N.A., (SEAL)
as Syndication Agent and as a Lender
By:
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Name:
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Title:
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Lending Office (Base Rate Loans)
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Lending Office (Eurodollar Loans)
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Notice Address
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
-136-
144
PNC BANK, NATIONAL ASSOCIATION, (SEAL)
as a Lender
By:
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Name:
--------------------------------------
Title:
-------------------------------------
Lending Office (Base Rate Loans)
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Lending Office (Eurodollar Loans)
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Notice Address
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
-137-
145
IBJ WHITEHALL BUSINESS CREDIT (SEAL)
CORPORATION, as a Lender
By:
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Name:
--------------------------------------
Title:
-------------------------------------
Lending Office (Base Rate Loans)
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Lending Office (Eurodollar Loans)
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Notice Address
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
-138-