$300,000,000
CREDIT AGREEMENT
among
INTERNATIONAL SPEEDWAY CORPORATION,
as Borrower,
CERTAIN SUBSIDIARIES OF THE BORROWER,
as Guarantors,
THE LENDERS PARTIES HERETO,
SUNTRUST BANK, SOUTH FLORIDA, N.A.,
as Documentation Agent
and
FIRST UNION NATIONAL BANK,
as Administrative Agent
Dated as of July 21, 1999
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . .....1
Section 1.1 Defined Terms.. . . . . . . . . . . . . . . . .1
Section 1.2 Other Definitional Provisions.. . . . . . . . 18
Section 1.3 Accounting Terms. . . . . . . . . . . . . . . 18
ARTICLE II THE LOANS; AMOUNT AND TERMS. . . . . . . . . . ...... . 19
Section 2.1 Revolving Loans.. . . . . . . . . . . . . . . 19
Section 2.2 Swingline Loan Subfacility. . . . . . . . . . 20
Section 2.3 Letter of Credit Subfacility. . . . . . . . . 22
Section 2.4 Fees. . . . . . . . . . . . . . . . . . . . . 25
Section 2.5 Commitment Reductions.. . . . . . . . . . . . 25
Section 2.6 Prepayments.. . . . . . . . . . . . . . . . . 26
Section 2.7 Minimum Principal Amount of Tranches. . . . . 26
Section 2.8 Default Rate and Payment Dates. . . . . . . . 27
Section 2.9 Conversion Options. . . . . . . . . . . . . . 27
Section 2.10 Computation of Interest and Fees; Interest Rate
Limitation.. . . . . . . . . . . . . . . . . 27
Section 2.11 Pro Rata Treatment and Payments. . . . . . . 28
Section 2.12 Non-Receipt of Funds by the Administrative
Agent. . . . . . . . . . . . . . . . . . . . 28
Section 2.13 Inability to Determine Interest Rate.. . . . 29
Section 2.14 Illegality.. . . . . . . . . . . . . . . . . 30
Section 2.15 Requirements of Law. . . . . . . . . . . . . 30
Section 2.16 Indemnity. . . . . . . . . . . . . . . . . . 31
Section 2.17 Taxes. . . . . . . . . . . . . . . . . . . . 32
Section 2.18 Indemnification; Nature of Issuing Lender's
Duties.. . ... . . . . . . . . . . . . . . . 33
ARTICLE III REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . 35
Section 3.1 Financial Condition.. . . . . . . . . . . . . 35
Section 3.2 No Change.. . . . . . . . . . . . . . . . . . 35
Section 3.3 Corporate Existence; Compliance with Law. . . 35
Section 3.4 Corporate Power; Authorization; Enforceable
Obligations . . . . . . . . . . . . . . . . . 35
Section 3.5 No Legal Bar; No Default. . . . . . . . . . . 36
Section 3.6 No Material Litigation. . . . . . . . . . . . 36
Section 3.7 Investment Company Act. . . . . . . . . . . . 36
Section 3.8 Margin Regulations. . . . . . . . . . . . . . 36
Section 3.9 ERISA.. . . . . . . . . . . . . . . . . . . . 37
Section 3.10 Purpose of Loans.. . . . . . . . . . . . . . 37
Section 3.11 Subsidiaries.. . . . . . . . . . . . . . . . 37
Section 3.12 Ownership. . . . . . . . . . . . . . . . . . 37
Section 3.13 Indebtedness.. . . . . . . . . . . . . . . . 37
Section 3.14 Taxes. . . . . . . . . . . . . . . . . . . . 38
Section 3.15 Investments. . . . . . . . . . . . . . . . . 38
Section 3.16 No Burdensome Restrictions.. . . . . . . . . 38
Section 3.17 Brokers' Fees. . . . . . . . . . . . . . . . 38
Section 3.18 Labor Matters. . . . . . . . . . . . . . . . 38
Section 3.19 Accuracy and Completeness of Information.. . 38
Section 3.20 Year 2000 Issue. . . . . . . . . . . . . . . 39
Section 3.21 Possession of Franchises and Licenses. . . . 39
Section 3.22 Claims and Offsets.. . . . . . . . . . . . . 39
Section 3.23 Intent and Effect of Transactions. . . . . . 39
ARTICLE IV CONDITIONS PRECEDENT ...... . . . . . . . . . . . . . . 40
Section 4.1 Conditions to Closing Date and Initial Revolving
Loans. . . . . . . . . . . . . . . . . . . . 40
Section 4.2 Conditions to Initial Revolving Loans.. . . . 42
Section 4.3 Conditions to All Extensions of Credit. . . . 42
ARTICLE V AFFIRMATIVE COVENANTS ...... . . . . . . . . . . . . . . 43
Section 5.1 Financial Statements. . . . . . . . . . . . . 43
Section 5.2 Certificates; Other Information.. . . . . . . 44
Section 5.3 Payment of Obligations. . . . . . . . . . . . 45
Section 5.4 Conduct of Business and Maintenance of
Existence. .. . . . . . . . . . . . . . . . . 45
Section 5.5 Maintenance of Property; Insurance. . . . . . 45
Section 5.6 Inspection of Property; Books and Records;
Discussions. . . . . . . . . . . . . . . . . 46
Section 5.7 Notices.. . . . . . . . . . . . . . . . . . . 46
Section 5.8 Financial Covenants.. . . . . . . . . . . . . 47
Section 5.9 Additional Subsidiary Guarantors. . . . . . . 47
Section 5.10 Compliance with Law. . . . . . . . . . . . . 47
Section 5.11 Year 2000 Compliance.. . . . . . . . . . . . 47
ARTICLE VI NEGATIVE COVENANTS . . . ...... . . . . . . . . . . . . 48
Section 6.1 Indebtedness. . . . . . . . . . . . . . . . . 48
Section 6.2 Liens.. . . . . . . . . . . . . . . . . . . . 49
Section 6.3 Nature of Business. . . . . . . . . . . . . . 49
Section 6.4 Consolidation, Merger, Sale or Purchase of
Assets, etc. .. . . . . . . . . . . . . . . . 49
Section 6.5 Advances, Investments and Loans.. . . . . . . 49
Section 6.6 Issuance of Subsidiary Equity Securities. . . 50
Section 6.7 Transactions with Affiliates; Modification of
Documentation.......... . . . . . . . . . . . 50
Section 6.8 Fiscal Year; Accounting Method; Organizational
Documents. . . . . . . . . . . . . . .. . . . 50
Section 6.9 Limitation on Restricted Actions. . . . . . . 51
Section 6.10 Extraordinary Dividends and Other Payments.. 51
Section 6.11 Major Motorsports Events.. . . . . . . . . . 51
ARTICLE VII EVENTS OF DEFAULT . . . . . . . . . . . . . . ...... . 51
Section 7.1 Events of Default.. . . . . . . . . . . . . . 51
Section 7.2 Acceleration; Remedies. . . . . . . . . . . . 54
ARTICLE VIII THE AGENT. . . . . . . . . . . . . . . . . ...... . . 54
Section 8.1 Appointment.. . . . . . . . . . . . . . . . . 54
Section 8.2 Delegation of Duties. . . . . . . . . . . . . 54
Section 8.3 Exculpatory Provisions. . . . . . . . . . . . 55
Section 8.4 Reliance by Administrative Agent. . . . . . . 55
Section 8.5 Notice of Default.. . . . . . . . . . . . . . 55
Section 8.6 Non-Reliance on Administrative Agent and Other
Lenders. . . . . . . . . . . . . . . . . . . 56
Section 8.7 Indemnification.. . . . . . . . . . . . . . . 56
Section 8.8 Administrative Agent in Its Individual Capacity.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 8.9 Successor Administrative Agent. . . . . . . . 57
ARTICLE IX MISCELLANEOUS. . . . ...... . . . . . . . . . . . . . . 57
Section 9.1 Amendments and Waivers. . . . . . . . . . . . 57
Section 9.2 Notices.. . . . . . . . . . . . . . . . . . . 58
Section 9.3 No Waiver; Cumulative Remedies. . . . . . . . 59
Section 9.4 Survival of Representations and Warranties. . 59
Section 9.5 Payment of Expenses and Taxes.. . . . . . . . 59
Section 9.6 Successors and Assigns; Participations;
Purchasing Lenders.. .. . . . . . . . . . . . 60
Section 9.7 Adjustments; Set-off. . . . . . . . . . . . . 62
Section 9.8 Table of Contents and Section Headings. . . . 63
Section 9.9 Counterparts. . . . . . . . . . . . . . . . . 63
Section 9.10 Effectiveness. . . . . . . . . . . . . . . . 63
Section 9.11 Severability.. . . . . . . . . . . . . . . . 63
Section 9.12 Integration. . . . . . . . . . . . . . . . . 63
Section 9.13 Governing Law. . . . . . . . . . . . . . . . 64
Section 9.14 Consent to Jurisdiction and Service of
Process. . . . . . . . . . . . . . . . . . . 64
Section 9.15 Confidentiality. . . . . . . . . . . . . . . 64
Section 9.16 Acknowledgments. . . . . . . . . . . . . . . 65
Section 9.17 Waivers of Jury Trial. . . . . . . . . . . . 65
ARTICLE X GUARANTY. . . . . . ...... . . . . . . . . . . . . . . . 65
Section 10.1 The Guaranty.. . . . . . . . . . . . . . . . 65
Section 10.2 Bankruptcy.. . . . . . . . . . . . . . . . . 66
Section 10.3 Nature of Liability. . . . . . . . . . . . . 66
Section 10.4 Independent Obligation.. . . . . . . . . . . 66
Section 10.5 Authorization. . . . . . . . . . . . . . . . 67
Section 10.6 Reliance.. . . . . . . . . . . . . . . . . . 67
Section 10.7 Waiver.. . . . . . . . . . . . . . . . . . . 67
Section 10.8 Limitation on Enforcement. . . . . . . . . . 68
Section 10.9 Confirmation of Payment. . . . . . . . . . . 68
Schedules
Schedule 2.1(a) Schedule of Lenders and Commitments
Schedule 2.1(b)(i) Form of Notice of Borrowing
Schedule 2.1(e) Form of Revolving Note
Schedule 2.2(d) Form of Swingline Note
Schedule 2.9 Form of Notice of Conversion/Extension
Schedule 2.17 Section 2.17 Certificate
Schedule 3.6 Litigation
Schedule 3.9 ERISA
Schedule 3.11 Subsidiaries
Schedule 3.14 Taxes
Schedule 3.18 Labor Matters
Schedule 5.9 Form of Joinder Agreement
Schedule 6.1(b) Indebtedness
Schedule 6.2 Permitted Liens
Schedule 6.5 Investments
Schedule 6.9 Permitted Limitations on Restricted Actions
Schedule 9.2 Schedule of Lenders' Lending Offices
Schedule 9.6(c) Form of Commitment Transfer Supplement
THIS CREDIT AGREEMENT, dated as of July 21, 1999 (the "Credit
Agreement"), among INTERNATIONAL SPEEDWAY CORPORATION, a Florida
corporation (the "Borrower"), certain Subsidiaries of the Borrower
identified as a "Guarantor" on the signature pages hereto and such other
Subsidiaries of the Borrower as may from time to time become a party
hereto (collectively, the "Guarantors;" and individually, a "Guarantor"),
the several banks and other financial institutions as may from time to
time become parties to this Credit Agreement (collectively, the
"Lenders"; and individually, a "Lender"), and FIRST UNION NATIONAL BANK,
a national banking association, as administrative agent for the Lenders
hereunder (in such capacity, the "Administrative Agent").
W I T N E S S E T H:
WHEREAS, the Borrower has requested that the Lenders make loans and
other financial accommodations to the Borrower in the amount of up to
$300,000,000, as more particularly described herein;
WHEREAS, the Lenders have agreed to make such loans and other
financial accommodations to the Borrower on the terms and conditions
contained herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Defined Terms.
As used in this Credit Agreement, terms defined in the preamble to
this Credit Agreement have the meanings therein indicated, and the
following terms have the following meanings:
"Acquisition", by any Person, means the acquisition by such Person
of a majority of the Capital Stock or all or substantially all of the
Property of another Person, whether or not involving a merger or
consolidation with such Person.
"Acquisition Documents" shall mean all documents (including the
schedules and exhibits thereto) and instruments executed in connection
with the Penske Acquisitions, as such documents and instruments may be
amended, modified, supplemented or restated prior to the Closing Date.
"Additional Credit Party" shall mean each Person that becomes a
Guarantor by execution of a Joinder Agreement in accordance with
Section 5.9.
"Administrative Agent" shall have the meaning set forth in the first
paragraph of this Credit Agreement and any successors in such capacity.
"Affiliate" shall mean as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under
common control with, such Person. For purposes of this definition, a
Person shall be deemed to be "controlled by" a Person if such Person
possesses, directly or indirectly, power either (a) to vote 25% or more
of the securities having ordinary voting power for the election of
directors of such Person or (b) to direct or cause the direction of the
management and policies of such Person whether by contract or otherwise.
All Subsidiaries shall be deemed to be Affiliates.
"Alternate Base Rate" shall mean, for any day, a rate per annum
equal to the greater of (a) the Prime Rate in effect on such day and (b)
the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%.
For purposes hereof: "Prime Rate" shall mean, at any time, the rate of
interest per annum publicly announced from time to time by First Union
at its principal office in Charlotte, North Carolina as its prime rate.
Each change in the Prime Rate shall be effective as of the opening of
business on the day such change in the Prime Rate occurs. The parties
hereto acknowledge that the rate announced publicly by First Union as its
Prime Rate is an index or base rate and shall not necessarily be its
lowest or best rate charged to its customers or other banks; and "Federal
Funds Effective Rate" shall mean, for any day, 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
on the next succeeding Business Day by the Federal Reserve Bank of New
York, or, if such rate is not so published on the next succeeding
Business Day, the average of the quotations for the day of such
transactions received by the Administrative Agent from three federal
funds brokers of recognized standing selected by it. If for any reason
the Administrative Agent shall have determined (which determination shall
be conclusive in the absence of manifest error) that it is unable to
ascertain the Federal Funds Effective Rate, for any reason, including the
inability or failure of the Administrative Agent to obtain sufficient
quotations in accordance with the terms thereof, the Alternate Base Rate
shall be determined without regard to clause (b) of the first sentence
of this definition, as appropriate, until the circumstances giving rise
to such inability no longer exist. Any change in the Alternate Base Rate
due to a change in the Prime Rate or the Federal Funds Effective Rate
shall be effective on the opening of business on the date of such change.
"Alternate Base Rate Loans" shall mean Loans that bear interest at
an interest rate based on the Alternate Base Rate.
"Applicable Commitment Fee Percentage" shall mean, for any day, the
rate per annum set forth below opposite the applicable Level then in
effect.
Leverage Commitment
Level Ratio Fee
I greater than 2.75 to 1.0 0.225%
II less than 2.75 to 1.0 but
greater than 2.25 to 1.0 0.200%
III less than 2.25 to 1.0 but
greater than 1.75 to 1.0 0.175%
IV less than 1.75 to 1.0 but
greater than 1.50 to 1.0 0.150%
V less than 1.50 to 1.0 0.150%
The Applicable Commitment Fee Percentage and the Commitment Fee
shall, in each case, be determined and adjusted quarterly (i) on the date
five (5) Business Days after the date on which the Administrative Agent
has received from the Borrower the quarterly financial information and
certifications required to be delivered to the Administrative Agent and
the Lenders in accordance with the provisions of Sections 5.1(b) and
5.2(b) for each of the first three fiscal quarters of each fiscal year
and (ii) on the date five (5) Business Days after the date on which the
Administrative Agent has received from the Borrower the annual financial
information and certification required to be delivered to the
Administrative Agent and the Lenders in accordance with the provisions
of Sections 5.1(a) and 5.2(b) for the last fiscal quarter of each fiscal
year (each of such dates in subparagraphs (i) and (ii) a "Fee
Determination Date"). Each Applicable Commitment Fee Percentage shall
be effective from the applicable Fee Determination Date until the next
such Fee Determination Date. The initial Applicable Commitment Fee
Percentage shall be based on the opening Leverage Ratio set forth on the
pro forma balance sheet and EBITDA calculation delivered pursuant to
Section 4.1(k) until the first Fee Determination Date occurring after
November 30, 1999. After the Closing Date, if the Borrower shall fail
to provide the annual and quarterly financial information and
certifications in accordance with the provisions of Sections 5.1(a),
5.1(b) and 5.2(b), the Applicable Commitment Fee Percentage from such Fee
Determination Date shall, on the date five (5) Business Days after the
date by which the Borrower was so required to provide such financial
information and certifications to the Administrative Agent and the
Lenders, be based on Level I until such time as such information and
certifications are provided, whereupon the Level shall be determined by
the then current Leverage Ratio.
"Applicable Margin" shall mean, for any day, the rate per annum set
forth below opposite the applicable Level then in effect, it being
understood that the Applicable Margin for LIBOR Rate Loans and Letter of
Credit Fees shall be the percentage set forth under the column "LIBOR
Rate Margin".
Leverage LIBOR Rate
Level Ratio Margin
I greater than 2.75 to 1.0 1.000%
II less than 2.75 to 1.0 but
greater than 2.25 to 1.0 0.875%
III less than 2.25 to 1.0 but
greater than 1.75 to 1.0 0.750%
IV less than 1.75 to 1.0 but
greater than 1.50 to 1.0 0.625%
V less than 1.50 to 1.0 0.500%
The Applicable Margin shall, in each case, be determined and
adjusted quarterly (i) on the date five (5) Business Days after the date
on which the Administrative Agent has received from the Borrower the
quarterly financial information and certifications required to be
delivered to the Administrative Agent and the Lenders in accordance with
the provisions of Sections 5.1(b) and 5.2(b) for each of the first three
fiscal quarters of each fiscal year and (ii) on the date five (5)
Business Days after the date on which the Administrative Agent has
received from the Borrower the annual financial information and
certification required to be delivered to the Administrative Agent and
the Lenders in accordance with the provisions of Sections 5.11(a) and
5.2(b) for the last fiscal quarter of each fiscal year (each of such
dates in subparagraphs (i) and (ii) an "Interest Determination Date").
Each Applicable Margin shall be effective from the applicable Interest
Determination Date until the next such Interest Determination Date. The
initial Applicable Margins shall be based on the opening Leverage Ratio
set forth on the pro forma balance sheet EBITDA calculation delivered
pursuant to Section 4.1(k) until the first Interest Determination Date
occurring after November 30, 1999. After the Closing Date, if the
Borrower shall fail to provide the annual and quarterly financial
information and certifications in accordance with the provisions of
Sections 5.1(a), 5.1(b) and 5.2(b), the Applicable Margin from such
Interest Determination Date shall, on the date five (5) Business Days
after the date by which the Borrower was so required to provide such
financial information and certifications to the Administrative Agent and
the Lenders, be based on Level I until such time as such information and
certifications are provided, whereupon the Level shall be determined by
the then current Leverage Ratio.
"Asset Disposition" shall mean the disposition of any or all of the
assets (including, without limitation, the Capital Stock of a Subsidiary
or any ownership interest in a joint venture) of the Borrower or any
Subsidiary whether by sale, lease, transfer or otherwise. The term
"Asset Disposition" shall not include (a) Specified Sales, (b) any Equity
Issuance or (c) the sale or disposition of machinery and equipment no
longer used or useful in the conduct of the Borrower's or any
Subsidiary's business.
"Bankruptcy Code" shall mean the Bankruptcy Code in Title 11 of the
United States Code, as amended, modified, succeeded or replaced from time
to time.
"Borrower" shall have the meaning set forth in the first paragraph
of this Credit Agreement.
"Borrowing Date" shall mean, in respect of any Loan, the date such
Loan is made.
"Business Day" shall mean a day other than a Saturday, Sunday or
other day on which commercial banks in Charlotte, North Carolina or New
York, New York are authorized or required by law to close; provided,
however, that when used in connection with a rate determination,
borrowing or payment in respect of a LIBOR Rate Loan, the term "Business
Day" shall also exclude any day on which banks in London, England are not
open for dealings in Dollar deposits in the London interbank market.
"Capital Lease" shall mean any lease of property, real or personal,
the obligations with respect to which are required to be capitalized on
a balance sheet of the lessee in accordance with GAAP.
"Capital Stock" shall mean (a) in the case of a corporation, capital
stock, (b) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of capital stock, (c) in the case of a partnership,
partnership interests (whether general or limited), (d) in the case of
a limited liability company, membership interests and (e) any other
interest or participation that confers on a Person the right to receive
a share of the profits and losses of, or distributions of assets of, the
issuing Person.
"Cash Equivalents" shall mean (a) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency
or instrumentality thereof (provided that the full faith and credit of
the United States of America is pledged in support thereof) having
maturities of not more than twelve months from the date of acquisition
("Government Obligations"), (b) U.S. dollar denominated (or foreign
currency fully hedged) time deposits, certificates of deposit, Eurodollar
time deposits and Eurodollar certificates of deposit of (y) any domestic
commercial bank of recognized standing having capital and surplus in
excess of $250,000,000 or (z) any bank whose short-term commercial paper
rating from S&P is at least A-1 or the equivalent thereof or from ▇▇▇▇▇'▇
is at least P-1 or the equivalent thereof (any such bank being an
"Approved Bank"), in each case with maturities of not more than 364 days
from the date of acquisition, (c) U.S. dollar denominated deposits in and
cash management functions with non-Approved Banks provided that the
aggregate amount of such deposits shall not exceed $20,000,000 at any
time, (d) commercial paper and variable or fixed rate notes issued by any
Approved Bank (or by the parent company thereof) or any variable rate
notes issued by, or guaranteed by any domestic corporation rated A-1 (or
the equivalent thereof) or better by S&P or P-1 (or the equivalent
thereof) or better by Moody's and maturing within twelve months of the
date of acquisition and (e) repurchase agreements with a bank or trust
company (including a Lender) or a recognized securities dealer having
capital and surplus in excess of $500,000,000 for direct obligations
issued by or fully guaranteed by the United States of America.
"Chicago Agreements" shall mean the existing guaranty and keepwell
agreements executed by the Borrower for the benefit of Motorsports
Alliance LLC and/or Raceway Associates, LLC.
"Closing Date" shall mean the date of this Credit Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Commitment" shall mean the Revolving Commitment, the LOC Commitment
and the Swingline Commitment, individually or collectively, as
appropriate.
"Commitment Fee" shall have the meaning set forth in Section 2.4(a).
"Commitment Percentage" shall mean the Revolving Commitment
Percentage and/or LOC Commitment Percentage, as appropriate.
"Commitment Period" shall mean the period from and including the
Closing Date to but not including the Revolving Commitment Termination
Date.
"Commitment Transfer Supplement" shall mean a Commitment Transfer
Supplement, substantially in the form of Schedule 9.6(c).
"Commonly Controlled Entity" shall mean an entity, whether or not
incorporated, which is under common control with the Borrower within the
meaning of Section 4001 of ERISA or is part of a group which includes the
Borrower and which is treated as a single employer under Section 414 of
the Code.
"Consolidated EBITDA" means, for any period, the sum of (a)
Consolidated Net Income for such period, plus (b) an amount which, in the
determination of Consolidated Net Income for such period, has been
deducted for (i) Consolidated Interest Expense, (ii) total federal,
state, local and foreign income, value added and similar taxes and (iii)
depreciation, amortization expense (including, without limitation, the
amortization of goodwill and finance charges, but excluding amortization
related to goodwill in connection with equity investments).
"Consolidated Funded Indebtedness" means indebtedness constituting money
borrowed by the Borrower or any of its Subsidiaries that shall have been
or should be, in accordance with GAAP, recorded or classified as a
liability, on a consolidated basis. For purposes of this definition,
indebtedness shall specifically include endorsements, Guaranty
Obligations, unfunded vested benefits and capital or financing lease
obligations, and shall specifically exclude trade accounts payable,
deferred income, current and deferred income taxes payable, capitalized
payments in lieu of property taxes in accordance with GAAP and expenses
accrued in the ordinary course of business.
"Consolidated Interest Expense" means, for any period, all interest
expense of the Borrower and its Subsidiaries including the interest
component under Capital Leases, as determined in accordance with GAAP.
Except as expressly provided otherwise, the applicable period shall be
for the four consecutive quarters ending as of the date of the most
recent annual or quarterly financial statements provided to the Lenders
pursuant to Section 5.1(a) or 5.1(b). For purposes hereof, Consolidated
Interest Expense for the first three complete fiscal quarters to occur
after the Closing Date shall be determined by annualizing Consolidated
Interest Expense such that (i) for the first complete fiscal quarter to
occur after the Closing Date, Consolidated Interest Expense for such
quarter would be multiplied by four (4), (ii) for the second complete
fiscal quarter to occur after the Closing Date, Consolidated Interest
Expense for the first two complete fiscal quarters then ending would be
multiplied by two (2) and (iii) for the third complete fiscal quarter to
occur after the Closing Date, Consolidated Interest Expense for the first
three complete fiscal quarters then ending would be multiplied by one and
one-third (1 1/3).
"Consolidated Net Income" means, for any period, net income
(excluding extraordinary items) after taxes for such period of the
Borrower and its Subsidiaries on a consolidated basis, as determined in
accordance with GAAP.
"Contractual Obligation" shall mean, as to any Person, any provision
of any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Credit Agreement" shall mean this Credit Agreement, as amended,
modified or supplemented from time to time in accordance with its terms.
"Credit Documents" shall mean this Credit Agreement, each of the
Notes, any Joinder Agreement, the Letters of Credit and the LOC
Documents.
"Credit Party" shall mean any of the Borrower and the Guarantors.
"Credit Party Obligations" shall mean, without duplication, (a) all
of the obligations of the Credit Parties to the Lenders (including the
Issuing Lender) and the Administrative Agent, whenever arising, under
this Credit Agreement, the Notes or any of the other Credit Documents
(including, but not limited to, any interest accruing after the
occurrence of a filing of a petition of bankruptcy under the Bankruptcy
Code with respect to any Credit Party, regardless of whether such
interest is an allowed claim under the Bankruptcy Code) and (b) all
liabilities and obligations, whenever arising, owing from the Credit
Parties to any Lender, or any Affiliate of a Lender, arising under any
Hedging Agreement.
"Debt Issuance" shall mean the issuance of any Indebtedness for
borrowed money by the Borrower or any of its Subsidiaries (excluding, for
purposes hereof, any Equity Issuance or any Indebtedness of the Borrower
and its Subsidiaries permitted to be incurred pursuant to Section 6.1
hereof).
"Default" shall mean any of the events specified in Section 7.1,
whether or not any requirement for the giving of notice or the lapse of
time, or both, or any other condition, has been satisfied.
"Defaulting Lender" shall mean, at any time, any Lender that, at
such time (a) has failed to make a Loan required pursuant to the terms
of this Credit Agreement, including the funding of a Participation
Interest in accordance with the terms hereof, (b) has failed to pay to
the Administrative Agent or any Lender an amount owed by such Lender
pursuant to the terms of this Credit Agreement, or (c) has been deemed
insolvent or has become subject to a bankruptcy or insolvency proceeding
or to a receiver, trustee or similar official.
"Dollars" and "$" shall mean dollars in lawful currency of the
United States of America.
"Domestic Lending Office" shall mean, initially, the office of each
Lender designated as such Lender's Domestic Lending Office shown on
Schedule 9.2; and thereafter, such other office of such Lender as such
Lender may from time to time specify to the Administrative Agent and the
Borrower as the office of such Lender at which Alternate Base Rate Loans
of such Lender are to be made.
"Domestic Subsidiary" shall mean any Subsidiary that is organized
and existing under the laws of the United States or any state or
commonwealth thereof or under the laws of the District of Columbia.
"Environmental Laws" shall mean any and all applicable foreign,
Federal, state, local or municipal laws, rules, orders, regulations,
statutes, ordinances, codes, decrees, requirements of any Governmental
Authority or other Requirement of Law (including common law) regulating,
relating to or imposing liability or standards of conduct concerning
protection of human health or the environment, as now or may at any time
be in effect during the term of this Credit Agreement.
"Equity Issuance" shall mean any issuance by the Borrower or any
Subsidiary to any Person which is not the Borrower of (a) shares of its
Capital Stock, (b) any shares of its Capital Stock pursuant to the
exercise of options or warrants or (c) any shares of its Capital Stock
pursuant to the conversion of any debt securities to equity. The term
"Equity Issuance" shall not include any Asset Disposition, any Debt
Issuance or the issuance of common stock of the Borrower's Subsidiaries
to its officers, directors or employees in connection with stock offering
plans and other benefit plans of such Subsidiaries.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.
"Eurodollar Reserve Percentage" shall mean for any day, the
percentage (expressed as a decimal and rounded upwards, if necessary, to
the next higher 1/100th of 1%) which is in effect for such day as
prescribed by the Federal Reserve Board (or any successor) for
determining the maximum reserve requirement (including without limitation
any basic, supplemental or emergency reserves) in respect of Eurocurrency
liabilities, as defined in Regulation D of such Board as in effect from
time to time, or any similar category of liabilities for a member bank
of the Federal Reserve System in New York City.
"Event of Default" shall mean any of the events specified in Section
7.1; provided, however, that any requirement for the giving of notice or
the lapse of time, or both, or any other condition, has been satisfied.
"Existing Facilities" shall have the meaning set forth in Section
3.10(b).
"Extension of Credit" shall mean, as to any Lender, the making of
a Loan by such Lender or the issuance of, or participation in, a Letter
of Credit by such Lender.
"Federal Funds Effective Rate" shall have the meaning set forth in
the definition of "Alternate Base Rate".
"Fee Letter" shall mean the letter agreement dated June 24, 1999
addressed to the Borrower from the Administrative Agent, as amended,
modified or otherwise supplemented.
"First Union" shall mean First Union National Bank, a national
banking association.
"France Family" shall mean the France Family Group as defined in the
Borrower's most recent quarterly or annual filing with the SEC.
"GAAP" shall mean generally accepted accounting principles in effect
in the United States of America applied on a consistent basis, subject,
however, in the case of determination of compliance with the financial
covenants set out in Section 5.8 to the provisions of Section 1.3.
"Government Acts" shall have the meaning set forth in Section 2.18.
"Governmental Authority" shall mean any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions
of or pertaining to government.
"Guarantor" shall mean any of the Domestic Subsidiaries identified
as a "Guarantor" on the signature pages hereto and the Additional Credit
Parties which execute a Joinder Agreement, together with their successors
and permitted assigns.
"Guaranty Obligations" means, with respect to any Person, without
duplication, any obligations of such Person (other than endorsements in
the ordinary course of business of negotiable instruments for deposit or
collection) guaranteeing or intended to guarantee any Indebtedness of any
other Person in any manner, whether direct or indirect, and including
without limitation any obligation, whether or not contingent, (a) to
purchase any such Indebtedness or any property constituting security
therefor, (b) to advance or provide funds or other support for the
payment or purchase of any such Indebtedness or to maintain working
capital, solvency or other balance sheet condition of such other Person
(including without limitation keep well agreements (excluding the
Homestead Keepwell Agreement), maintenance agreements, comfort letters
or similar agreements or arrangements) for the benefit of any holder of
Indebtedness of such other Person, (c) to lease or purchase Property,
securities or services primarily for the purpose of assuring the holder
of such Indebtedness, or (d) to otherwise assure or hold harmless the
holder of such Indebtedness against loss in respect thereof. The amount
of any Guaranty Obligation hereunder shall (subject to any limitations
set forth in the documentation related thereto) be deemed to be an amount
equal to the outstanding principal amount (or maximum principal amount,
if larger) of the Indebtedness in respect of which such Guaranty
Obligation is made.
"Guaranty" shall mean the guaranty of the Guarantors set forth in
Article X.
"Hedging Agreements" shall mean, with respect to any Person, any
agreement entered into to protect such Person against fluctuations in
interest rates, or currency or raw materials values, including, without
limitation, any interest rate swap, cap or collar agreement or similar
arrangement between such Person and one or more counterparties, any
foreign currency exchange agreement, currency protection agreements,
commodity purchase or option agreements or other interest or exchange
rate or commodity price hedging agreements.
"Homestead Keepwell Agreement" shall mean that certain Keepwell
Agreement dated as of December, 1998 with respect to Homestead - Miami
Speedway, L.L.C.
"Indebtedness" of a Person means all indebtedness (other than
indebtedness to suppliers for the purchase of products and merchandise
incurred in the ordinary course of business), including, without
limitation, (a) indebtedness for borrowed money; indebtedness for (or
deferred purchase price in connection with) the acquisition of property
or assets; indebtedness obligations evidenced by debentures, notes or
other similar instruments; reimbursement or other similar obligations
arising in connection with letters of credit, surety bonds or
reimbursement obligations therefor; and indebtedness of third parties
secured by any lien, pledge or other encumbrance on the property or
assets of the Person in question, whether or not such indebtedness is
assumed; (b) all liability by way of endorsements (other than for
collection or deposit in the ordinary course of business); (c) all
guarantees of indebtedness (including any 'keepwell' or other agreement,
contingent or otherwise, to purchase any obligation representing such
indebtedness or property constituting security therefor, or to advance
or supply funds for such purpose or to maintain working capital or any
other balance sheet or income statement condition, or otherwise to assure
a creditor against loss in respect of indebtedness or obligations of
others, or any other arrangement in substance affecting any of the
foregoing); (d) liabilities in respect of unfunded vested benefits under
plans covered by Title IV of ERISA; and (e) obligations as lessee under
leases (including synthetic leases, tax retention operating leases, off-
balance sheet loans or similar off-balance sheet financing product) which
shall have been or should be, in accordance with GAAP, recorded or
classified as capital leases or financing leases; provided that, for
purposes of this Credit Agreement, the Homestead Keepwell Agreement shall
not be Indebtedness of the Borrower.
"Insolvency" shall mean, with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of such term as
used in Section 4245 of ERISA.
"Insolvent" shall mean being in a condition of Insolvency.
"Interest Coverage Ratio" means, with respect to the Borrower and
its Subsidiaries on a consolidated basis for the twelve month period
ending on the last day of any fiscal quarter of the Borrower and its
Subsidiaries, the ratio of (a) Consolidated EBITDA for such period to (b)
Consolidated Interest Expense for such period; provided, however, the
Interest Coverage Ratio may be adjusted from time to time with the mutual
consent of the Borrower and the Required Lenders to reflect the
postponement of major race events into subsequent accounting periods,
the rescheduling of major race events and the occurrence of major race
events in different fiscal accounting periods in different calendar
and/or fiscal years. For purposes of computing the Interest Coverage
Ratio for any applicable twelve month period of determination, the
acquisition of a Subsidiary during such twelve month period shall be
deemed to have occurred as of the first day of such twelve month period.
"Interest Payment Date" shall mean (a) as to any Alternate Base Rate
Loan or Swingline Loan, the last day of each November, February, May and
August and on the Revolving Commitment Termination Date, (b) as to any
LIBOR Rate Loan having an Interest Period of three months or less, the
last day of such Interest Period, and (c) as to any LIBOR Rate Loan
having an Interest Period longer than three months, the day which is
three months after the first day of such Interest Period and the last day
of such Interest Period.
"Interest Period" shall mean, with respect to any LIBOR Rate Loan,
(a) initially, the period commencing on the Borrowing Date or conversion
date, as the case may be, with respect to such LIBOR Rate Loan and ending
one, two, three or six months thereafter, as selected by the Borrower in
the notice of borrowing or notice of conversion given with respect
thereto and (b) thereafter, each period commencing on the last day of the
immediately preceding Interest Period applicable to such LIBOR Rate Loan
and ending one, two, three or six months thereafter, as selected by the
Borrower by irrevocable notice to the Administrative Agent not less than
three Business Days prior to the last day of the then current Interest
Period with respect thereto; provided, however, (i) if any Interest
Period pertaining to a LIBOR Rate Loan would otherwise end on a day that
is not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month in which event
such Interest Period shall end on the immediately preceding Business Day,
(ii) any Interest Period pertaining to a LIBOR Rate 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, (iii) if the Borrower shall fail to give notice as
provided above, the Borrower shall be deemed to have selected a Alternate
Base Rate Loan to replace the affected LIBOR Rate Loan, (iv) any Interest
Period in respect of any Loan that would otherwise extend beyond the
Revolving Commitment Termination Date is at least equal to the amount of
such principal amortization payment due on such date, and (v) no more
than six (6) LIBOR Rate Loans may be in effect at any time. For purposes
hereof, LIBOR Rate Loans with different Interest Periods shall be
considered as separate LIBOR Rate Loans, even if they shall begin on the
same date and have the same duration, although borrowings, extensions and
conversions may, in accordance with the provisions hereof, be combined
at the end of existing Interest Periods to constitute a new LIBOR Rate
Loan with a single Interest Period.
"Issuing Lender" shall mean First Union.
"Issuing Lender Costs" shall have the meaning set forth in Section
2.4(c).
"Joinder Agreement" shall mean a Joinder Agreement substantially in
the form of Schedule 5.9, executed and delivered by an Additional Credit
Party in accordance with the provisions of Section 5.9.
"Lender" shall have the meaning set forth in the first paragraph of
this Credit Agreement.
"Letters of Credit" shall mean any letter of credit issued by the
Issuing Lender pursuant to the terms hereof, as such Letters of Credit
may be amended, modified, extended, renewed or replaced from time to
time.
"Letter of Credit Fee" shall have the meaning set forth in Section
2.4(b).
"Leverage Ratio" means, with respect to the Borrower and its
Subsidiaries on a consolidated basis for the twelve month period ending
on the last day of any fiscal quarter, the ratio of (a) Consolidated
Funded Indebtedness on the last day of such period to (b) Consolidated
EBITDA for such period; provided, however, the Leverage Ratio may be
adjusted from time to time with the mutual consent of the Borrower and
the Required Lenders to reflect the postponement of major race events
into subsequent accounting periods, the rescheduling of major race events
and the occurrence of major race events in different fiscal accounting
periods in different calendar and/or fiscal years. For purposes of
computing the Leverage Ratio for any applicable twelve month period of
determination, the acquisition of a Subsidiary during such twelve month
period shall be deemed to have occurred as of the first day of such
twelve month period.
"LIBOR" shall mean, for any LIBOR Rate Loan for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor
page) as the London interbank offered rate for deposits in Dollars at
approximately 11:00 A.M. (London time) two Business Days prior to the
first day of such Interest Period for a term comparable to such Interest
Period. If for any reason such rate is not available, the term "LIBOR"
shall mean, for any LIBOR Rate Loan for any Interest Period therefor, the
rate per annum (rounded upwards, if necessary, to the nearest 1/100 of
1%) appearing on Reuters Screen LIBO Page as the London interbank offered
rate for deposits in Dollars at approximately 11:00 A.M. (London time)
two Business Days prior to the first day of such Interest Period for a
term comparable to such Interest Period; provided, however, if more than
one rate is specified on Reuters Screen LIBO Page, the applicable rate
shall be the arithmetic mean of all such rates (rounded upwards, if
necessary, to the nearest 1/100 of 1%). If, for any reason, neither of
such rates is available, then "LIBOR" shall mean the rate per annum at
which, as determined by the Administrative Agent, Dollars in an amount
comparable to the Loans then requested are being offered to leading banks
at approximately 11:00 A.M. London time, two (2) Business Days prior to
the commencement of the applicable Interest Period for settlement in
immediately available funds by leading banks in the London interbank
market for a period equal to the Interest Period selected.
"LIBOR Lending Office" shall mean, initially, the office of each
Lender designated as such Lender's LIBOR Lending Office shown on Schedule
9.2; and thereafter, such other office of such Lender as such Lender may
from time to time specify to the Administrative Agent and the Borrower
as the office of such Lender at which the LIBOR Rate Loans of such Lender
are to be made.
"LIBOR Market Index Rate" shall mean, for any day, the one-month
LIBOR rate for such day; provided that if such day is not a Business Day,
then for the immediately preceding Business Day.
"LIBOR Rate" shall mean a rate per annum (rounded upwards, if
necessary, to the next higher 1/100th of 1%) determined by the
Administrative Agent pursuant to the following formula:
LIBOR
LIBOR Rate = ---------------------------------------
1.00 - Eurodollar Reserve Percentage
"LIBOR Rate Loan" shall mean Loans the rate of interest applicable
to which is based on the LIBOR Rate.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or
other security interest or any preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title
retention agreement and any Capital Lease having substantially the same
economic effect as any of the foregoing).
"Loan" shall mean a Revolving Loan and/or a Swingline Loan, as
appropriate.
"LOC Commitment" shall mean the commitment of the Issuing Lender to
issue Letters of Credit and with respect to each Lender, the commitment
of such Lender to purchase participation interests in the Letters of
Credit up to such Lender's LOC Committed Amount as specified in Schedule
2.1(a).
"LOC Commitment Percentage" shall mean, for each Lender, the
percentage identified as its LOC Commitment Percentage on Schedule
2.1(a), as such percentage may be modified in connection with any
assignment made in accordance with the provisions of Section 9.6(c).
"LOC Committed Amount" shall mean, collectively, the aggregate
amount of all of the LOC Commitments of the Lenders to issue and
participate in Letters of Credit as referenced in Section 2.3 and,
individually, the amount of each Lender's LOC Commitment as specified in
Schedule 2.1(a).
"LOC Documents" shall mean, with respect to any Letter of Credit,
such Letter of Credit, any amendments thereto, any documents delivered
in connection therewith, any application therefor, and any agreements,
instruments, guarantees or other documents (whether general in
application or applicable only to such Letter of Credit) governing or
providing for (a) the rights and obligations of the parties concerned or
(b) any collateral security for such obligations.
"LOC Obligations" shall mean, at any time, the sum of (a) the
maximum amount which is, or at any time thereafter may become, available
to be drawn under Letters of Credit then outstanding, assuming compliance
with all requirements for drawings referred to in such Letters of Credit
plus (b) the aggregate amount of all drawings under Letters of Credit
honored by the Issuing Lender but not theretofore reimbursed.
"Mandatory Borrowing" shall have the meaning set forth in Section
2.2(b)(ii) or Section 2.3(e), as the context may require.
"Material Adverse Effect" shall mean a material adverse effect on
(a) the business, operations, property, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries taken as a
whole, (b) the ability of the Borrower or any Guarantor to perform its
obligations, when such obligations are required to be performed, under
this Credit Agreement, any of the Notes or any other Credit Document or
(c) the validity or enforceability of this Credit Agreement, any of the
Notes or any of the other Credit Documents or the rights or remedies of
the Administrative Agent or the Lenders hereunder or thereunder.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc.
"Multiemployer Plan" shall mean a Plan which is a multiemployer plan
as defined in Section 4001(a)(3) of ERISA.
"NASCAR" shall mean the National Association for Stock Car Auto
Racing, Inc.
"Note" or "Notes" shall mean the Revolving Notes and/or the
Swingline Note, collectively, separately or individually, as appropriate.
"Notice of Borrowing" shall mean the written notice of borrowing as
referenced and defined in Section 2.1(b)(i) or 2.2(b)(i), as appropriate.
"Notice of Conversion" shall mean the written notice of extension
or conversion as referenced and defined in Section 2.9.
"Obligations" shall mean, collectively, Loans and LOC Obligations.
"Participant" shall have the meaning set forth in Section 9.6(b).
"Participation Interest" shall mean the purchase by a Lender of a
participation interest in Swingline Loans as provided in Section
2.2(b)(ii) or in Letters of Credit as provided in Section 2.3.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA.
"Penske" shall mean Penske Motorsports Inc., a Delaware corporation.
"Penske Acquisitions" shall mean, collectively, (a) the Acquisition
of Penske by 88 Corp., a Delaware corporation, and the resulting merger
of Penske and 88 Corp. and (ii) the Acquisition of PSH Corp., a Delaware
corporation, by the Borrower and the resulting merger of PSH Corp. with
and into the Borrower.
"Permitted Acquisition" shall mean an Acquisition by the Borrower
or any Subsidiary of the Borrower for the fair market value of the
Capital Stock or Property acquired, provided that (a) the Capital Stock
or Property acquired in such Acquisition is related to the motorsports
entertainment industry or if not related to the motorsports entertainment
industry, the total amount of such acquisitions in any fiscal year shall
not exceed three percent (3%) of Total Shareholders' Equity (as of the
date of the most recent financial statement delivered to the
Administrative Agent and the Lenders pursuant to Section 5.1(a) or
5.1(b)); (b) in the case of an Acquisition of the Capital Stock of
another Person, the board of directors (or other comparable governing
body) of such other Person shall have duly approved such Acquisition; (c)
the representations and warranties made by the Borrower in any Credit
Document shall be true and correct in all material respects at and as if
made as of the date of such Acquisition (after giving effect thereto)
except to the extent such representations and warranties expressly relate
to an earlier date and no Default or Event of Default exists as of the
date of such Acquisition (after giving effect thereto); and (d) with
respect to any Acquisition exceeding five percent (5%) of Total
Shareholders' Equity (as of the date of the most recent financial
statements delivered to the Administrative Agent and the Lenders pursuant
to Section 5.1(a) or 5.1(b)), the Borrower shall have delivered to the
Administrative Agent a Pro Forma Compliance Certificate demonstrating
that, upon giving effect to such Acquisition on a Pro Forma Basis, the
Borrower will be in compliance with all of the financial covenants set
forth in Section 5.8.
"Permitted Investments" shall mean: (a) cash and Cash Equivalents;
(b) receivables owing to the Borrower or any of its Subsidiaries or any
receivables and advances to suppliers, in each case if created, acquired
or made in the ordinary course of business and payable or dischargeable
in accordance with customary trade terms; (c) investments in and loans
to any Credit Parties; (d) 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; (e) investments existing as of the Closing Date and set forth
in Schedule 6,5; (f) the Penske Acquisitions and other Permitted
Acquisitions; (g) minority investments in motorsports facilities or
related motorsports businesses so long as any such investments, in the
aggregate, do not have a Material Adverse Effect; (h) other loans,
advances and/or investments in or to non-wholly owned Subsidiaries which
are not Guarantors to the extent permitted in accordance with the proviso
set forth in clause (i) below, and (i) additional loans, advances and/or
investments of a nature not contemplated by the foregoing clauses hereof,
provided that such loans, advances and/or investments made pursuant to
this clause (i) together with clause (h) above shall not exceed an
aggregate amount of more than ten percent (10%) of the Total
Shareholder's Equity (as of the date of the most recent financial
statements delivered to the Administrative Agent and the Lenders pursuant
to Section 5.1(a) or 5.1(b)). As used herein, "investment" means all
investments, in cash or by delivery of property made, directly or
indirectly in, to or from any Person, whether by acquisition of shares
of Capital Stock, property, assets, indebtedness or other obligations or
securities or by loan advance, capital contribution or otherwise.
"Permitted Liens" means: (a) Liens existing as of the Closing Date
and set forth on Schedule 6.2; provided that (i) no such Lien shall at
any time be extended to or cover any Property other than the Property
subject thereto on the Closing Date (provided, however, that Liens on new
Property which arise in replacement of Liens on previously owned Property
to the extent that such new Property is acquired through like-kind
exchanges shall be permitted hereunder) and (ii) the principal amount of
the Indebtedness secured by such Liens shall not be extended, renewed,
refunded or refinanced; (b) Liens (other than Liens created or imposed
under ERISA) for taxes, assessments or governmental charges or levies not
yet due or Liens for taxes being contested in good faith by appropriate
proceedings for which adequate reserves determined in accordance with
GAAP have been established (and as to which the Property subject to any
such Lien is not yet subject to foreclosure, sale or loss on account
thereof); (c) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and suppliers and other Liens
imposed by law or pursuant to customary reservations or retentions of
title arising in the ordinary course of business, provided that such
Liens secure only amounts not yet due and payable or, if due and payable,
are unfiled and no other action has been taken to enforce the same or are
being contested in good faith by appropriate proceedings for which
adequate reserves determined in accordance with GAAP have been
established (and as to which the Property subject to any such Lien is not
yet subject to foreclosure, sale or loss on account thereof); (d) Liens
(other than Liens created or imposed under ERISA) incurred or deposits
made in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of social security,
or to secure the performance of tenders, statutory obligations, bids,
leases, government contracts, performance and return-of-money bonds and
other similar obligations (exclusive of obligations for the payment of
borrowed money); (e) Liens in connection with attachments or judgments
(including judgment or appeal bonds) provided that the judgments secured
shall, within 30 days after the entry thereof, have been discharged or
execution thereof stayed pending appeal, or shall have been discharged
within 30 days after the expiration of any such stay; (f)
easements, rights-of-way, restrictions (including zoning restrictions),
minor defects or irregularities in title and other similar charges or
encumbrances not, in any material respect, impairing the use of the
encumbered Property for its intended purposes; (g) Liens securing
purchase money Indebtedness (including Capital Leases), provided that any
such Lien attaches only to the Property financed and such Lien attaches
thereto concurrently with or within 90 days after the acquisition
thereof; (h) leases or subleases granted to others not interfering in any
material respect with the business of the Borrower and its Subsidiaries;
(i) any interest of title of a lessor under, and Liens arising from UCC
financing statements (or equivalent filings, registrations or agreements
in foreign jurisdictions) relating to, leases permitted by this Credit
Agreement; (j) normal and customary rights of setoff upon deposits of
cash in favor of banks or other depository institutions; (k) inchoate
Liens arising under ERISA to secure current service pension liabilities
as they are incurred under the provisions of any Plan; and (l) Liens
incurred or assumed in connection with a Permitted Acquisition.
"Person" shall mean an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or
other entity of whatever nature.
"Plan" shall mean, at any particular time, any employee benefit plan
which is covered by Title IV of ERISA and in respect of which the
Borrower or a Commonly Controlled Entity is (or, if such plan were
terminated at such time, would under Section 4069 of ERISA be deemed to
be) an "employer" as defined in Section 3(5) of ERISA.
"Prime Rate" shall have the meaning set forth in the definition of
Alternate Base Rate.
"Pro Forma Basis" means, for purposes of calculating compliance with
each of the financial covenants set forth in Section 5.8 in respect of
a proposed transaction, that such transaction shall be deemed to have
occurred as of the first day of the four fiscal-quarter period ending as
of the most recent fiscal quarter end preceding the date of such
transaction with respect to which the Agent has received the information
required pursuant to Section 5.1. In connection with any calculation of
the financial covenants set forth in Section 5.8, upon giving effect to
a transaction on a Pro Forma Basis, (a) any Indebtedness incurred by the
Borrower in connection with such transaction (i) shall be deemed to have
been incurred as of the first day of the applicable period and (ii) if
such Indebtedness has a floating or formula rate, shall have an implied
rate of interest for the applicable period for purposes of this
definition determined by utilizing the rate which is or would be in
effect with respect to such Indebtedness as at the relevant date of
determination, (b) income statement items (whether positive or negative)
attributable to the Property acquired in such transaction or to the
Acquisition comprising such transaction, as applicable, shall be included
to the extent relating to the relevant period and (c) pro forma
adjustments may be included to the extent that such adjustments give
effect to events that are (i) directly attributable to such transaction,
(ii) expected to continue to be applicable to the Borrower and (iii)
factually supportable.
"Pro Forma Compliance Certificate" means if required to be provided
in accordance with the terms of this Credit Agreement, a certificate of
a Responsible Officer of the Borrower delivered to the Administrative
Agent in connection with (a) any Acquisition as referred to in the
definition of "Permitted Acquisition" set forth in this Section 1.1, (b)
any incurrence of Indebtedness as referred to in Section 6.1(d) or (c)
any Permitted Investment as referred to Section 6.5, as applicable, and
containing reasonably detailed calculations, upon giving effect to the
applicable transaction on a Pro Forma Basis, of the Leverage Ratio and
the Interest Coverage Ratio as of the most recent fiscal quarter end
preceding the date of the applicable transaction with respect to which
the Administrative Agent shall have received the financial information
required pursuant to Section 5.1.
"Property" means any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"Purchasing Lenders" shall have the meaning set forth in Section
9.6(c).
"Register" shall have the meaning set forth in Section 9.6(d).
"Reorganization" shall mean, with respect to any Multiemployer Plan,
the condition that such Plan is in reorganization within the meaning of
such term as used in Section 4241 of ERISA.
"Reportable Event" shall mean any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty-day
notice period is waived under PBGC Reg. Section4043.
"Required Lenders" shall mean Lenders holding in the aggregate more
than 50% of all Revolving Loans and LOC Obligations then outstanding at
such time plus the aggregate unused Revolving Commitments at such time
(treating for purposes hereof in the case of Swingline Loans and LOC
Obligations, in the case of the Swingline Lender and the Issuing Lender,
only the portion of the Swingline Loans and the LOC Obligations of the
Swingline Lender and the Issuing Lender, respectively, which is not
subject to the Participation Interests of the other Lenders and, in the
case of the Lenders other than the Swingline Lender and the Issuing
Lender, the Participation Interests of such Lenders in Swingline Loans
and LOC Obligations hereunder as direct Obligations); provided, however,
that if any Lender shall be a Defaulting Lender at such time, then there
shall be excluded from the determination of Required Lenders, Obligations
(including Participation Interests) owing to such Defaulting Lender and
such Defaulting Lender's Commitments, or after termination of the
Commitments, the principal balance of the Obligations owing to such
Defaulting Lender.
"Requirement of Law" shall mean, as to any Person, the Certificate
of Incorporation and By-laws or other organizational or governing
documents of such Person, and each law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or any
of its property or to which such Person or any of its property is
subject.
"Responsible Officer" shall mean the Chief Executive Officer, the
Executive Vice President, the Chief Financial Officer or the Chief
Operating Officer of the Borrower.
"Revolving Commitment" shall mean, with respect to each Lender, the
commitment of such Lender to make Revolving Loans in an aggregate
principal amount at any time outstanding up to such Lender's Revolving
Committed Amount as specified in Schedule 2.1(a), as such amount may be
reduced from time to time in accordance with the provisions hereof.
"Revolving Commitment Percentage" shall mean, for each Lender, the
percentage identified as its Revolving Commitment Percentage on Schedule
2.1(a), as such percentage may be modified in connection with any
assignment made in accordance with the provisions of Section 9.6(c).
"Revolving Commitment Termination Date" shall mean July 21, 2004.
"Revolving Committed Amount" shall mean, collectively, the aggregate
amount of all Revolving Commitments as referenced in Section 2.1(a), as
such amount may be reduced from time to time in accordance with the
provisions hereof, and, individually, the amount of each Lender's
Revolving Commitment as specified on Schedule 2.1(a).
"Revolving Loans" shall have the meaning set forth in Section 2.1.
"Revolving Note" or "Revolving Notes" shall mean the promissory
notes of the Borrower in favor of each of the Lenders evidencing the
Revolving Loans provided pursuant to Section 2.1(e), individually or
collectively, as appropriate, as such promissory notes may be amended,
modified, supplemented, extended, renewed or replaced from time to time.
"S&P" shall mean Standard & Poor's Ratings Group, a division of
McGraw Hill, Inc.
"Sale Leaseback Transaction" means any direct or indirect
arrangement with any Person or to which any such Person is a party,
providing for the leasing to a Credit Party of any Property, whether
owned by such Credit Party as of the Closing Date or later acquired,
which has been or is to be sold or transferred by such Credit Party to
such Person or to any other Person from whom funds have been, or are to
be, advanced by such Person on the security of such Property.
"SEC" shall mean the Securities and Exchange Commission or any
successor thereto.
"Senior Note Indenture" shall mean any indenture agreement entered
into by the Borrower pursuant to which the Borrower shall issue the
Senior Notes, and all documents and instruments executed in connection
with any such indenture agreement.
"Senior Notes" shall mean the senior unsecured notes to be issued
by the Borrower which (i) do not exceed $200,000,000 in the aggregate (or
such higher amount as agreed to by the Required Lenders), (ii) rank pari
passu with the Credit Party Obligations, (iii) are guaranteed only by the
Guarantors, (iv) which have a final maturity date not less than six
months beyond the Revolving Commitment Termination Date and (v) are not
subject to covenants more restrictive than the covenants set forth
herein.
"Single Employer Plan" shall mean any Plan which is not a
Multiemployer Plan.
"Specified Sales" shall mean (a) the sale, transfer, lease or other
disposition of inventory and materials in the ordinary course of business
and (b) the sale, transfer or other disposition of Permitted Investments
described in clause (a) of the definition thereof.
"Subsidiary" shall mean, as to any Person, a corporation,
partnership, limited liability company or other entity of which shares
of stock or other ownership interests having ordinary voting power (other
than stock or such other ownership interests having such power only by
reason of the happening of a contingency) to elect a majority of the
board of directors or other managers of such corporation, partnership or
other entity are at the time owned, or the management of which is
otherwise controlled, directly or indirectly through one or more
intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Credit
Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower.
For purposes of this Credit Agreement, all Subsidiaries are also
Affiliates.
"Swingline Commitment" shall mean the commitment of the Swingline
Lender to make Swingline Loans in an aggregate principal amount at any
time outstanding up to the Swingline Committed Amount, and the commitment
of the Lenders to purchase participation interests in the Swingline Loans
as provided in Section 2.2(b)(ii), as such amounts may be reduced from
time to time in accordance with the provisions hereof.
"Swingline Committed Amount" shall mean the amount of the Swingline
Lender's Swingline Commitment as specified in Section 2.2(a).
"Swingline Lender" shall mean First Union, in its capacity as such.
"Swingline Loan" or "Swingline Loans" shall have the meaning set
forth in Section 2.2(a).
"Swingline Note" shall mean the promissory note of the Borrower in
favor of the Swingline Lender evidencing the Swingline Loans provided
pursuant to Section 2.2(d), as such promissory note may be amended,
modified, supplemented, extended, renewed or replaced from time to time.
"Taxes" shall have the meaning set forth in Section 2.17.
"Total Shareholders' Equity" shall mean the Total Shareholders'
Equity as shown on the Borrower's most recent consolidated financial
statements filed with the SEC.
"Tranche" shall mean the collective reference to LIBOR Rate Loans
whose Interest Periods begin and end on the same day. A Tranche may
sometimes be referred to as a "LIBOR Tranche".
"Transfer Effective Date" shall have the meaning set forth in each
Commitment Transfer Supplement.
"2.17 Certificate" shall have the meaning set forth in Section 2.17.
"Type" shall mean, as to any Loan, its nature as an Alternate Base
Rate Loan, LIBOR Rate Loan or Swingline Loan, as the case may be.
"Voting Stock" means, with respect to any Person, Capital Stock
issued by such Person the holders of which are ordinarily, in the absence
of contingencies, entitled to vote for the election of directors (or
persons performing similar functions) of such Person, even though the
right so to vote has been suspended by the happening of such a
contingency.
"Year 2000 Compliant" shall have the meaning set forth in Section
3.20.
Section 1.2 Other Definitional Provisions.
(a) Unless otherwise specified therein, all terms defined in
this Credit Agreement shall have the defined meanings when used in
the Notes or other Credit Documents or any certificate or other
document made or delivered pursuant hereto.
(b) The words "hereof", "herein" and "hereunder" and words
of similar import when used in this Credit Agreement shall refer to
this Credit Agreement as a whole and not to any particular provision
of this Credit Agreement, and Section, subsection, Schedule and
Exhibit references are to this Credit Agreement unless otherwise
specified.
(c) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such
terms.
Section 1.3 Accounting Terms.
Unless otherwise specified herein, all accounting terms used herein
shall be interpreted, all accounting determinations hereunder shall be
made, and all financial statements required to be delivered hereunder
shall be prepared in accordance with GAAP applied on a basis consistent
with the most recent audited consolidated financial statements of the
Borrower delivered to the Lenders; provided that, if the Borrower
notifies the Administrative Agent that it wishes to amend any covenant
in Section 5.8 to eliminate the effect of any change in GAAP on the
operation of such covenant (or if the Administrative Agent notifies the
Borrower that the Required Lenders wish to amend Section 5.8 for such
purpose), then the Borrower's compliance with such covenant shall be
determined on the basis of GAAP in effect immediately before the relevant
change in GAAP became effective, until either such notice is withdrawn
or such covenant is amended in a manner satisfactory to the Borrower and
the Required Lenders.
The Borrower shall deliver to the Administrative Agent and each
Lender at the same time as the delivery of any annual or quarterly
financial statements given in accordance with the provisions of Section
5.1, (a) 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
quarterly or annual financial statements as to which no objection shall
have been made in accordance with the provisions above and (b) a
reasonable estimate of the effect on the financial statements on account
of such changes in application.
ARTICLE II
THE LOANS; AMOUNT AND TERMS
Section 2.1 Revolving Loans.
(a) Revolving Commitment. During the Commitment Period,
subject to the terms and conditions hereof, each Lender severally
agrees to make revolving credit loans ("Revolving Loans") to the
Borrower from time to time for the purposes hereinafter set forth;
provided, however, that (i) with regard to each Lender individually,
the sum of such Lender's share of outstanding Revolving Loans plus
such Lender's Revolving Commitment Percentage of Swingline Loans
plus such Lender's LOC Commitment Percentage of LOC Obligations
shall not exceed such Lender's Revolving Commitment Percentage of
the aggregate Revolving Committed Amount, and (ii) with regard to
the Lenders collectively, the sum of the aggregate amount of
outstanding Revolving Loans plus Swingline Loans plus LOC
Obligations shall not exceed the Revolving Committed Amount. For
purposes hereof, the aggregate amount available hereunder shall be
THREE HUNDRED MILLION DOLLARS ($300,000,000) (which amount shall be
reduced to TWO HUNDRED MILLION DOLLARS ($200,000,000) with a
corresponding reduction in each Lender's Commitment as set forth on
Schedule 2.1(a) upon the issuance of the Senior Notes, and as such
aggregate maximum amount may be further reduced from time to time
as provided in Section 2.5, the "Revolving Committed Amount").
Revolving Loans may consist of Alternate Base Rate Loans or LIBOR
Rate Loans, or a combination thereof, as the Borrower may request,
and may be repaid and reborrowed in accordance with the provisions
hereof. LIBOR Rate Loans shall be made by each Lender at its LIBOR
Lending Office and Alternate Base Rate Loans at its Domestic Lending
Office.
(b) Revolving Loan Borrowings.
(i) Notice of Borrowing. The Borrower shall request
a Revolving Loan borrowing by written notice (or telephone
notice promptly confirmed in writing which confirmation may be
by fax) to the Administrative Agent not later than 12:00 Noon
(Charlotte, North Carolina time) on the Business Day prior to
the date of requested borrowing in the case of Alternate Base
Rate Loans, and on the third Business Day prior to the date of
the requested borrowing in the case of LIBOR Rate Loans. Each
such request for borrowing shall be irrevocable and shall
specify (A) that a Revolving Loan is requested, (B) the date
of the requested borrowing (which shall be a Business Day),
(C) the aggregate principal amount to be borrowed, (D) whether
the borrowing shall be comprised of Alternate Base Rate Loans,
LIBOR Rate Loans or a combination thereof, and if LIBOR Rate
Loans are requested, the Interest Period(s) therefor. A form
of Notice of Borrowing (a "Notice of Borrowing") is attached
as Schedule 2.1(b)(i). If the Borrower shall fail to specify
in any such Notice of Borrowing (I) an applicable Interest
Period in the case of a LIBOR Rate Loan, then such notice
shall be deemed to be a request for an Interest Period of one
month, or (II) the type of Revolving Loan requested, then such
notice shall be deemed to be a request for an Alternate Base
Rate Loan hereunder. The Administrative Agent shall give
notice to each Lender promptly upon receipt of each Notice of
Borrowing, the contents thereof and each such Lender's share
thereof.
(ii) Minimum Amounts. Each Revolving Loan borrowing
that is a LIBOR Rate Loan shall be in a minimum aggregate
amount of $3,000,000 and integral multiples of $1,000,000 in
excess thereof (or the remaining amount of the Revolving
Committed Amount, if less). Each Revolving Loan borrowing
that is a Alternate Base Rate Loan shall be in a minimum
aggregate amount of $1,000,000 and integral multiples of
$250,000 in excess thereof (or the remaining amount of the
Revolving Committed Amount, if less).
(iii) Advances. Each Lender will make its
Revolving Commitment Percentage of each Revolving Loan
borrowing available to the Administrative Agent for the
account of the Borrower at the office of the Administrative
Agent specified in Schedule 9.2, or at such other office as
the Administrative Agent may designate in writing, by 1:00
P.M. (Charlotte, North Carolina time) on the date specified in
the applicable Notice of Borrowing in Dollars and in funds
immediately available to the Administrative Agent. Such
borrowing will then be made available to the Borrower by the
Administrative Agent by the close of business on the date
specified in the applicable Notice of Borrowing by crediting
the account of the Borrower on the books of such office with
the aggregate of the amounts made available to the
Administrative Agent by the Lenders and in like funds as
received by the Administrative Agent.
(c) Repayment. The principal amount of all Revolving Loans
shall be due and payable in full on the Revolving Commitment
Termination Date.
(d) Interest. Subject to the provisions of Section 2.8,
Revolving Loans shall bear interest as follows:
(i) Alternate Base Rate Loans. During such periods
as Revolving Loans shall be comprised of Alternate Base Rate
Loans, each such Alternate Base Rate Loan shall bear interest
at a per annum rate equal to the Alternate Base Rate; and
(ii) LIBOR Rate Loans. During such periods as
Revolving Loans shall be comprised of LIBOR Rate Loans, each such
LIBOR Rate Loan shall bear interest at a per annum rate equal to the
sum of the LIBOR Rate plus the Applicable Margin.
Interest on Revolving Loans shall be payable in arrears on each
Interest Payment Date.
(e) Revolving Notes. Each Lender's Revolving Commitment
Percentage of the Revolving Loans shall be evidenced by a duly
executed promissory note of the Borrower to such Lender in
substantially the form of Schedule 2.1(e).
Section 2.2 Swingline Loan Subfacility.
(a) Swingline Commitment. During the Commitment Period,
subject to the terms and conditions hereof, the Swingline Lender,
in its individual capacity, agrees to make certain revolving credit
loans to the Borrower (each a "Swingline Loan" and, collectively,
the "Swingline Loans") for the purposes hereinafter set forth;
provided, however, (i) the aggregate amount of Swingline Loans
outstanding at any time shall not exceed TEN MILLION DOLLARS
($10,000,000) (the "Swingline Committed Amount"), and (ii) the sum
of the aggregate amount of outstanding Revolving Loans plus
Swingline Loans plus LOC Obligations shall not exceed the Revolving
Committed Amount. 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 (Charlotte, North Carolina time) on
such Business Day. A notice of request for Swingline Loan
borrowing shall be made in the form of Schedule 2.1(b)(i) with
appropriate modifications. Swingline Loan borrowings
hereunder shall be made in minimum amounts of $100,000 and in
integral amounts of $100,000 in excess thereof.
(ii) Repayment of Swingline Loans. Each Swingline
Loan borrowing shall be due and payable on the Revolving Commitment
Termination Date. The Swingline Lender may, at any time, in
its sole discretion, by written notice to the Borrower and the
Administrative Agent, demand repayment of its Swingline Loans
by way of a Revolving Loan borrowing, in which case the
Borrower shall be deemed to have requested a Revolving Loan
borrowing comprised entirely of LIBOR Rate Loans (with
Interest Periods selected by the Borrower) in the amount of
such Swingline Loans; provided, however, that, in the
following circumstances, any such demand shall also be deemed
to have been given one Business Day prior to each of (A) the
Revolving Commitment Termination Date, (B) the occurrence of
any Event of Default described in Section 7.1(e), (iii) upon
acceleration of the Credit Party Obligations hereunder,
whether on account of an Event of Default described in Section
7.1(e) or any other Event of Default, and (iv) the exercise of
remedies in accordance with the provisions of Section 7.2
hereof (each such Revolving Loan borrowing 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 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 may not
comply with the minimum amount for borrowings of Revolving
Loans otherwise required hereunder, (II) whether any
conditions specified in Section 4.2 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(b)(i), (V) the date of such Mandatory Borrowing, or (VI)
any reduction in the Revolving Committed Amount or termination
of the Revolving 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 7.2), provided that (A) all
interest payable on the Swingline Loans shall be for the
account of the Swingline Lender until the date as of which the
respective participation is purchased, and (B) at the time any
purchase of participations pursuant to this sentence is
actually made, the purchasing Lender shall be required to pay
to the Swingline Lender 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 2.8, Swingline Loans shall bear interest at a per annum
rate equal to the LIBOR Market Index Rate plus the Applicable Margin
for Revolving Loans that are LIBOR Rate Loans. Interest on
Swingline Loans shall be payable in arrears on each Interest Payment
Date.
(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 Schedule 2.2(d).
Section 2.3 Letter of Credit Subfacility.
(a) Issuance. Subject to the terms and conditions hereof and
of the LOC Documents, if any, and any other terms and conditions
which the Issuing Lender may reasonably require, during the
Commitment Period the Issuing Lender shall issue, and the Lenders
shall participate in, Letters of Credit for the account of the
Borrower from time to time upon request in a form acceptable to the
Issuing Lender; provided, however, that (i) the aggregate amount of
LOC Obligations shall not at any time exceed FIFTEEN MILLION DOLLARS
($15,000,000) (the "LOC Committed Amount"), (ii) the sum of the
aggregate amount of Revolving Loans plus Swingline Loans plus LOC
Obligations shall not at any time exceed the Revolving Committed
Amount, (iii) all Letters of Credit shall be denominated in U.S.
Dollars and (iv) Letters of Credit shall be issued for lawful
corporate purposes and may be issued as standby letters of credit,
including in connection with workers' compensation and other
insurance programs. Except as otherwise expressly agreed upon by
all the Lenders, no Letter of Credit shall have an original expiry
date more than twelve (12) months from the date of issuance;
provided, however, so long as no Default or Event of Default has
occurred and is continuing and subject to the other terms and
conditions to the issuance of Letters of Credit hereunder, the
expiry dates of Letters of Credit may be extended annually or
periodically from time to time on the request of the Borrower or by
operation of the terms of the applicable Letter of Credit to a date
not more than twelve (12) months from the date of extension;
provided, further, that no Letter of Credit, as originally issued
or as extended, shall have an expiry date extending beyond the
Revolving Commitment Termination Date. Each Letter of Credit shall
comply with the related LOC Documents. The issuance and expiry date
of each Letter of Credit shall be a Business Day. Any Letters of
Credit issued hereunder shall be in a minimum original face amount
of $50,000. First Union shall be the Issuing Lender on all Letters
of Credit issued after the Closing Date.
(b) Notice and Reports. The request for the issuance of a
Letter of Credit shall be submitted to the Issuing Lender at least
five (5) Business Days prior to the requested date of issuance. The
Issuing Lender will promptly upon request provide to the
Administrative Agent for dissemination to 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 any prior report, and including therein,
among other things, the account party, the beneficiary, the face
amount, expiry date as well as any payments or expirations which may
have occurred. The Issuing Lender will further provide to the
Administrative Agent promptly upon request copies of the Letters of
Credit. The Issuing Lender will provide to the Administrative Agent
promptly upon request a summary report of the nature and extent of
LOC Obligations then outstanding.
(c) Participations. Each Lender upon issuance of a Letter
of Credit shall be deemed to have purchased without recourse a risk
participation from the Issuing Lender in such Letter of Credit and
the obligations arising thereunder and any collateral relating
thereto, in each case in an amount equal to its LOC Commitment
Percentage of the obligations under 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
Lender therefor and discharge when due, its LOC 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 Lender has
not been reimbursed as required hereunder or under any LOC Document,
each such Lender shall pay to the Issuing Lender its LOC Commitment
Percentage of such unreimbursed drawing in same day funds on the day
of notification by the Issuing Lender of an unreimbursed drawing
pursuant to the provisions of subsection (d) hereof. The obligation
of each Lender to so reimburse the Issuing Lender shall be absolute
and unconditional and shall not be affected by the occurrence of a
Default, an Event of Default or any other occurrence or event. Any
such reimbursement shall not relieve or otherwise impair the
obligation of the Borrower to reimburse the Issuing Lender under any
Letter of Credit, together with interest as hereinafter provided.
(d) Reimbursement. In the event of any drawing under any
Letter of Credit, the Issuing Lender will promptly notify the
Borrower and the Administrative Agent. The Borrower shall reimburse
the Issuing Lender on the day of drawing under any Letter of Credit
(either with the proceeds of a Swingline Loan or Revolving Loan
obtained hereunder or otherwise) in same day funds as provided
herein or in the LOC Documents. If the Borrower shall fail to
reimburse the Issuing Lender as provided herein, the unreimbursed
amount of such drawing shall bear interest at a per annum rate equal
to the Alternate Base Rate plus two percent (2%). Unless the
Borrower shall immediately notify the Issuing Lender and the
Administrative Agent of its intent to otherwise reimburse the
Issuing Lender, the Borrower shall be deemed to have requested a
Swingline Loan, or if and to the extent Swingline Loans shall not
be available, a Revolving Loan in the amount of the drawing as
provided in subsection (e) hereof, the proceeds of which will be
used to satisfy the reimbursement obligations. The Borrower's
reimbursement obligations hereunder shall be absolute and
unconditional under all circumstances irrespective of any rights of
set-off, counterclaim or defense to payment the Borrower may claim
or have against the Issuing Lender, 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 Lender 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
Lender in Dollars and in immediately available funds, the amount of
such Lender's LOC Commitment Percentage of such unreimbursed
drawing. Such payment shall be made on the day such notice is
received by such Lender from the Issuing Lender if such notice is
received at or before 2:00 P.M. (Charlotte, North Carolina time),
otherwise such payment shall be made at or before 12:00 Noon
(Charlotte, North Carolina time) on the Business Day next succeeding
the day such notice is received. If such Lender does not pay such
amount to the Issuing Lender in full upon such request, such Lender
shall, on demand, pay to the Administrative Agent for the account
of the Issuing Lender interest on the unpaid amount during the
period from the date of such drawing until such Lender pays such
amount to the Issuing Lender in full at a rate per annum equal to,
if paid within two (2) Business Days of the date of drawing, the
Federal Funds Effective Rate and thereafter at a rate equal to the
Alternate Base Rate. Each Lender's obligation to make such payment
to the Issuing Lender, and the right of the Issuing Lender to
receive the same, shall be absolute and unconditional, shall not be
affected by any circumstance whatsoever and without regard to the
termination of this Credit Agreement or the Commitments hereunder,
the existence of a Default or Event of Default or the acceleration
of the Credit Party Obligations hereunder and shall be made without
any offset, abatement, withholding or reduction whatsoever.
(e) Repayment with Revolving Loans. On any day on which the
Borrower shall have requested, or been deemed to have requested, (i)
a Swingline Loan borrowing to reimburse a drawing under a Letter of
Credit, the Swingline Lender shall make the Swingline Loan advance
pursuant to the terms of the request or deemed request in accordance
with the provisions for Swingline Loan advances hereunder, or (ii)
a Revolving Loan 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 in connection
with a drawing under a Letter of Credit, in which case a Revolving
Loan borrowing comprised entirely of Alternate Base Rate Loans (each
such borrowing, a "Mandatory Borrowing") shall be immediately made
(without giving effect to any termination of the Commitments
pursuant to Section 7.2) pro rata based on each Lender's respective
Revolving Commitment Percentage (determined before giving effect to
any termination of the Commitments pursuant to Section 7.2) and in
the case of both clauses (i) and (ii) the proceeds thereof shall be
paid directly to the Issuing Lender for application to the
respective LOC Obligations. Each Lender hereby irrevocably agrees
to make such Revolving Loans immediately upon any such request or
deemed request on account of each 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
may not comply with the minimum amount for borrowings of Revolving
Loans otherwise required hereunder, (ii) whether any conditions
specified in Section 4.2 are then satisfied, (iii) whether a Default
or an Event of Default then exists, (iv) failure for any such
request or deemed request for Revolving Loan to be made by the time
otherwise required in Section 2.1(b), (v) the date of such Mandatory
Borrowing, or (vi) any reduction in the Revolving Committed Amount
after any such Letter of Credit may have been drawn upon. 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 such Lender hereby
agrees that it shall forthwith fund (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) its Participation Interests in the outstanding LOC
Obligations; provided, further, that in the event any Lender shall
fail to fund its Participation Interest on the day the Mandatory
Borrowing would otherwise have occurred, then the amount of such
Lender's unfunded Participation Interest therein shall bear interest
payable to the Issuing Lender upon demand, at the rate equal to, if
paid within two (2) Business Days of such date, the Federal Funds
Effective Rate, and thereafter at a rate equal to the Alternate Base
Rate.
(f) Modification, Extension. The issuance of any supplement,
modification, amendment, renewal, or extension to 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.
(g) Uniform Customs and Practices. The Issuing Lender shall
have the Letters of Credit be subject to The Uniform Customs and
Practice for Documentary Credits, as published as of the date of
issue by the International Chamber of Commerce (the "UCP"), in which
case the UCP may be incorporated therein and deemed in all respects
to be a part thereof.
Section 2.4 Fees.
(a) Commitment Fee. In consideration of the Revolving
Commitment, the Borrower agrees to pay to the Administrative Agent
for the ratable benefit of the Lenders a commitment fee (the
"Commitment Fee") in an amount equal to the Applicable Commitment
Fee Percentage per annum on the average daily unused portion of the
Revolving Committed Amount (with LOC Obligations constituting usage
of the Revolving Committed Amount). The Commitment Fee shall be
payable quarterly in arrears on the last day of each November,
February, May and August.
(b) Letter of Credit Fees. In consideration of the LOC
Commitments, the Borrower agrees to pay to the Issuing Lender a fee
(the "Letter of Credit Fee") equal to the Applicable Margin per
annum on the average daily maximum amount available to be drawn
under each Letter of Credit from the date of issuance to the date
of expiration. In addition to such Letter of Credit Fee, the
Issuing Lender may charge, and retain for its own account without
sharing by the other Lenders, an additional facing fee of one-eighth
of one percent (1/8%) per annum on the average daily maximum amount
available to be drawn under each such Letter of Credit issued by it.
The Issuing Lender shall promptly pay over to the Administrative
Agent for the ratable benefit of the Lenders (including the Issuing
Lender) the Letter of Credit Fee. The Letter of Credit Fee shall
be payable quarterly in arrears on the 15th day following the last
day of each calendar quarter for the prior calendar quarter.
(c) Issuing Lender Costs. In addition to the Letter of
Credit Fees payable pursuant to subsection (b) hereof, the Borrower
shall pay to the Issuing Lender for its own account without sharing
by the other Lenders the reasonable and customary costs from time
to time of the Issuing Lender with respect to the amendment,
transfer, administration, cancellation and conversion of, and
drawings under, such Letters of Credit (collectively, the "Issuing
Lender Costs").
(d) Administrative Fee. The Borrower agrees to pay to the
Administrative Agent the annual administrative fee as described in
the Fee Letter.
Section 2.5 Commitment Reductions.
(a) Voluntary Reductions. The Borrower shall have the right
to terminate or permanently reduce the unused portion of the
Revolving Committed Amount at any time or from time to time upon not
less than five Business Days' prior notice to the Administrative
Agent (which shall notify the Lenders thereof as soon as
practicable) of each such termination or reduction, which notice
shall specify the effective date thereof and the amount of any such
reduction which shall be in a minimum amount of $5,000,000 or a
whole multiple of $1,000,000 in excess thereof and shall be
irrevocable and effective upon receipt by the Administrative Agent,
provided that no such reduction or termination shall be permitted
if after giving effect thereto, and to any prepayments of the
Revolving Loans made on the effective date thereof, the sum of the
then outstanding aggregate principal amount of the Revolving Loans
plus Swingline Loans plus LOC Obligations would exceed the Revolving
Committed Amount.
(b) Revolving Commitment Termination Date. The Revolving
Commitment, the LOC Commitment and the Swingline Commitment shall
automatically terminate on the Revolving Commitment Termination
Date.
(c) Mandatory Reduction. On the date the proceeds of the
Senior Notes become available to the Borrower a mandatory prepayment
pursuant to Section 2.6(b) shall be made and the Revolving Committed
Amount shall be automatically reduced to $200,000,000 with each
Lender's Commitment to be reduced as set forth on Schedule 2.1(a).
Section 2.6 Prepayments.
(a) Optional Prepayments. The Borrower shall have the right to
prepay Loans in whole or in part from time to time; provided, however,
that each partial prepayment of Revolving Loans shall be in a minimum
principal amount of $1,000,000 and integral multiples of $100,000 in
excess thereof and each prepayment of Swingline Loans shall be in a
minimum principal amount of $100,000 and integral multiples of $100,000
in excess thereof. The Borrower shall give three Business Days'
irrevocable notice in the case of LIBOR Rate Loans and one Business Day's
irrevocable notice in the case of Alternate Base Rate Loans, to the
Administrative Agent (which shall notify the Lenders thereof as soon as
practicable).
(b) Mandatory Prepayments. If at any time, the aggregate
principal amount of Loans shall exceed the Revolving Committed Amount,
the Borrower shall immediately make payment on the Loans in an amount
sufficient to eliminate the deficiency. If at the time of the issuance
of the Senior Notes the aggregate principal amount of the Loans shall
exceed $200,000,000, the Borrower shall make a payment on the Loans at
the time the proceeds of the Senior Notes become available to the
Borrower in an amount sufficient to eliminate such excess.
(c) Application. Unless otherwise specified by the Borrower,
prepayments made hereunder shall be applied first to Revolving Loans
which are Alternate Base Rate Loans, then to Revolving Loans which are
LIBOR Rate Loans in direct order of Interest Period maturities. All
prepayments under Section 2.6(a) shall be subject to Section 2.16, but
otherwise without premium or penalty. Interest on the principal amount
prepaid shall be payable on the next occurring Interest Payment Date that
would have occurred had such Loan not been prepaid or, at the request of
the Administrative Agent, interest on the principal amount prepaid shall
be payable on any date that a prepayment is made hereunder through the
date of prepayment. Amounts prepaid on the Swingline Loan and the
Revolving Loans may be reborrowed in accordance with the terms hereof.
Section 2.7 Minimum Principal Amount of Tranches.
All borrowings, payments and prepayments in respect of Revolving
Loans shall be in such amounts and be made pursuant to such elections so
that after giving effect thereto the aggregate principal amount of the
Revolving Loans comprising any Tranche shall not be less than $3,000,000
or a whole multiple of $1,000,000 in excess thereof.
Section 2.8 Default Rate and Payment Dates.
Upon the occurrence, and during the continuance, of an Event of
Default, at the Required Lender's option, (i) the Borrower shall no
longer have the option to request LIBOR Rate Loans or Swingline Loans and
(ii) the principal of and, to the extent permitted by law, interest on
the Loans and any other amounts owing hereunder or under the other Credit
Documents shall bear interest, payable on demand, at a per annum rate 2%
greater than the rate which would otherwise be applicable (or if no rate
is applicable, whether in respect of interest, fees or other amounts,
then the Alternate Base Rate plus 2%).
Section 2.9 Conversion Options.
(a) The Borrower may, in the case of Revolving Loans, elect
from time to time to convert Alternate Base Rate Loans to LIBOR Rate
Loans by giving the Administrative Agent at least three Business
Days' prior irrevocable written notice of such election. A form of
Notice of Conversion/Extension is attached as Schedule 2.9. If the
date upon which an Alternate Base Rate Loan is to be converted to
a LIBOR Rate Loan is not a Business Day, then such conversion shall
be made on the next succeeding Business Day and during the period
from such last day of an Interest Period to such succeeding Business
Day such Loan shall bear interest as if it were an Alternate Base
Rate Loan. All or any part of outstanding Alternate Base Rate Loans
may be converted as provided herein, provided that (i) no Loan may
be converted into a LIBOR Rate Loan when any Default or Event of
Default has occurred and is continuing and (ii) partial conversions
shall be in an aggregate principal amount of $3,000,000 or a whole
multiple of $1,000,000 in excess thereof.
(b) Any LIBOR Rate Loans may be continued as such upon the
expiration of an Interest Period with respect thereto by compliance
by the Borrower with the notice provisions contained in Section
2.9(a); provided, that no LIBOR Rate Loan may be continued as such
when any Default or Event of Default has occurred and is continuing.
If the Borrower shall fail to give timely notice of an election to
continue a LIBOR Rate Loan, or the continuation of LIBOR Rate Loans
is not permitted hereunder, such LIBOR Rate Loans shall be
automatically converted to Alternate Base Rate Loans at the end of
the applicable Interest Period with respect thereto.
Section 2.10 Computation of Interest and Fees; Interest Rate
Limitation.
(a) Interest payable hereunder with respect to Alternate Base
Rate Loans shall be calculated on the basis of a year of 365 days
(or 366 days, as applicable) for the actual days elapsed. All other
fees, interest and all other amounts payable hereunder shall be
calculated on the basis of a 360 day year for the actual days
elapsed. The Administrative Agent shall as soon as practicable
notify the Borrower and the Lenders of each determination of a LIBOR
Rate on the Business Day of the determination thereof. Any change
in the interest rate on a Loan resulting from a change in the
Alternate Base Rate shall become effective as of the opening of
business on the day on which such change in the Alternate Base Rate
shall become effective. The Administrative Agent shall as soon as
practicable notify the Borrower and the Lenders of the effective
date and the amount of each such change.
(b) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Credit
Agreement shall be conclusive and binding on the Borrower and the
Lenders in the absence of manifest error. The Administrative Agent
shall, at the request of the Borrower, deliver to the Borrower a
statement showing the computations used by the Administrative Agent
in determining any interest rate.
(c) Notwithstanding anything to the contrary contained in any
of the Credit Documents, if any specified interest rate shall exceed
the maximum rate permitted by applicable law as in effect from time
to time, the Borrower shall pay interest at the highest permissible
rate, which rate shall change as and when the highest permissible
rate shall change. If the Borrower makes an interest payment under
any of the Credit Documents that exceeds the maximum amount of
interest permitted by applicable law, the excess of such payment
above the maximum amount that lawfully may be paid shall be refunded
to the Borrower or, at the Borrower's option, credited toward the
payment of principal due under such Credit Document (as directed by
the Borrower); or, if the Borrower makes an interest payment that
exceeds the maximum amount of interest permitted by applicable law
and all principal thereunder shall have been previously or thereby
paid in full, such payment shall be deemed to have been the result
of mathematical error and the Administrative Agent shall refund to
the Borrower the amount of such payment that is in excess of the
amount that lawfully may be paid.
Section 2.11 Pro Rata Treatment and Payments.
Each borrowing of Revolving Loans and any reduction of the Revolving
Commitments shall be made pro rata according to the respective Commitment
Percentages of the Lenders. Each payment under this Credit Agreement or
any Note shall be applied, first, to any fees then due and owing by the
Borrower pursuant to Section 2.4, second, to interest then due and owing
in respect of the Notes of the Borrower and, third, to principal then due
and owing hereunder and under the Notes of the Borrower. Each payment
on account of any fees pursuant to Section 2.4 shall be made pro rata in
accordance with the respective amounts due and owing (except as to the
portion of the Letter of Credit Fee retained by the Issuing Lender and
the Issuing Lender Fees). Each optional prepayment of principal of the
Loans shall be applied to the Loans as the Borrower may designate (to be
applied pro rata among the Lenders); provided, that prepayments made
pursuant to Section 2.14 shall be applied in accordance with such
section. Each mandatory prepayment on account of principal of the Loans
shall be applied in accordance with Section 2.6(b). All payments
(including prepayments) to be made by the Borrower of principal, interest
and fees shall be made without defense, set-off or counterclaim (except
as provided in Section 2.17(b)) and shall be made to the Administrative
Agent for the account of the Lenders at the Administrative Agent's office
specified on Schedule 9.2 in Dollars and in immediately available funds
not later than 1:00 P.M. (Charlotte, North Carolina time) on the date
when due. The Administrative Agent shall distribute such payments to the
Lenders entitled thereto promptly upon receipt in like funds as received.
If any payment hereunder (other than payments on the LIBOR Rate Loans)
becomes due and payable on a day other than a Business Day, such payment
shall be extended to the next succeeding Business Day, and, with respect
to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension. If any payment on a LIBOR Rate
Loan becomes due and payable on a day other than a Business Day, the
maturity thereof shall be extended to the next succeeding Business Day
unless the result of such extension would be to extend such payment into
another calendar month, in which event such payment shall be made on the
immediately preceding Business Day.
Section 2.12 Non-Receipt of Funds by the Administrative Agent.
(a) Unless the Administrative Agent shall have been notified
in writing by a Lender prior to the date a Loan is to be made by such
Lender (which notice shall be effective upon receipt) that such Lender
does not intend to make the proceeds of such Loan available to the
Administrative Agent, the Administrative Agent may assume that such
Lender has made such proceeds available to the Administrative Agent on
such date, and the Administrative Agent may in reliance upon such
assumption (but shall not be required to) make available to the Borrower
a corresponding amount. If such corresponding amount is not in fact made
available to the Administrative Agent, the Administrative Agent shall be
able to recover such corresponding amount from such Lender. If such
Lender does not pay such corresponding amount forthwith upon the
Administrative Agent's demand therefor, the Administrative Agent will
promptly notify the Borrower, and the Borrower shall immediately pay such
corresponding amount to the Administrative Agent. The Administrative
Agent shall also be entitled to recover from the Lender or the Borrower,
as the case may be, interest on such corresponding amount in respect of
each day from the date such corresponding amount was made available by
the Administrative Agent to the Borrower to the date such corresponding
amount is recovered by the Administrative Agent at a per annum rate equal
to (i) from the Borrower at the applicable rate for the applicable
borrowing pursuant to the Notice of Borrowing and (ii) from a Lender at
the Federal Effective Funds Rate.
(b) Unless the Administrative Agent shall have been notified
in writing by the Borrower, prior to the date on which any payment
is due from it hereunder (which notice shall be effective upon
receipt) that the Borrower does not intend to make such payment, the
Administrative Agent may assume that such Borrower has made such
payment when due, and the Administrative Agent may in reliance upon
such assumption (but shall not be required to) make available to
each Lender on such payment date an amount equal to the portion of
such assumed payment to which such Lender is entitled hereunder, and
if the Borrower has not in fact made such payment to the
Administrative Agent, such Lender shall, on demand, repay to the
Administrative Agent the amount made available to such Lender. If
such amount is repaid to the Administrative Agent on a date after
the date such amount was made available to such Lender, such Lender
shall pay to the Administrative Agent on demand interest on such
amount in respect of each day from the date such amount was made
available by the Administrative Agent to such Lender to the date
such amount is recovered by the Administrative Agent at a per annum
rate equal to the Federal Funds Effective Rate.
(c) A certificate of the Administrative Agent submitted to
the Borrower or any Lender with respect to any amount owing under
this Section 2.12 shall be conclusive in the absence of manifest
error.
Section 2.13 Inability to Determine Interest Rate.
Notwithstanding any other provision of this Credit Agreement, if (a)
at the time of the request for a LIBOR Rate Loan, the Administrative
Agent shall reasonably determine (which determination shall be conclusive
and binding absent manifest error) that, by reason of circumstances
affecting the relevant market, reasonable and adequate means do not exist
for ascertaining LIBOR for such Interest Period, or (b) the Required
Lenders shall reasonably determine (which determination shall be
conclusive and binding absent manifest error) that the LIBOR Rate does
not adequately and fairly reflect the cost to such Lenders of funding
LIBOR Rate Loans that the Borrower has requested be outstanding as a
LIBOR Tranche during such Interest Period, the Administrative Agent shall
forthwith give telephone notice of such determination, confirmed in
writing, to the Borrower, and the Lenders at least two Business Days
prior to the first day of such Interest Period. Unless the Borrower
shall have notified the Administrative Agent upon receipt of such
telephone notice that it wishes to rescind or modify its request
regarding such LIBOR Rate Loans, any Loans that were requested to be made
as LIBOR Rate Loans shall be made as Alternate Base Rate Loans and any
Loans that were requested to be converted into or continued as LIBOR Rate
Loans shall be converted into Alternate Base Rate Loans. Until any such
notice has been withdrawn by the Administrative Agent, no further Loans
shall be made as, continued as, or converted into, LIBOR Rate Loans for
the Interest Periods so affected.
Section 2.14 Illegality.
Notwithstanding any other provision of this Credit Agreement, if the
adoption of or any change in any Requirement of Law or in the
interpretation or application thereof by the relevant Governmental
Authority to any Lender shall make it unlawful for such Lender or its
LIBOR Lending Office to make or maintain LIBOR Rate Loans as contemplated
by this Credit Agreement or to obtain in the interbank eurodollar market
through its LIBOR Lending Office the funds with which to make such Loans,
(a) such Lender shall promptly notify the Administrative Agent and the
Borrower thereof, (b) the commitment of such Lender hereunder to make
LIBOR Rate Loans or continue LIBOR Rate Loans as such shall forthwith be
suspended until the Administrative Agent shall give notice that the
condition or situation which gave rise to the suspension shall no longer
exist, and (c) such Lender's Loans then outstanding as LIBOR Rate Loans,
if any, shall be converted on the last day of the Interest Period for
such Loans or within such earlier period as required by law as Alternate
Base Rate Loans. The Borrower hereby agrees promptly to pay any Lender,
within 15 days after its demand, any additional amounts necessary to
compensate such Lender for actual and direct costs (but not including
anticipated profits) reasonably incurred by such Lender in making any
repayment in accordance with this Section including, but not limited to,
any interest or fees payable by such Lender to lenders of funds obtained
by it in order to make or maintain its LIBOR Rate Loans hereunder. A
certificate as to any additional amounts payable pursuant to this Section
submitted by such Lender, through the Administrative Agent, to the
Borrower shall be conclusive in the absence of manifest error. Each
Lender agrees to use reasonable efforts (including reasonable efforts to
change its LIBOR Lending Office) to avoid or to minimize any amounts
which may otherwise be payable pursuant to this Section; provided,
however, that such efforts shall not cause the imposition on such Lender
of any additional costs or legal or regulatory burdens deemed by such
Lender in its sole discretion to be material.
Section 2.15 Requirements of Law.
(a) If the adoption of or any change in any Requirement of
Law or in the interpretation or application thereof or compliance
by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental
Authority made subsequent to the date hereof:
(i) shall subject such Lender to any tax of any kind
whatsoever with respect to any Letter of Credit or any
application relating thereto, any LIBOR Rate Loan made by it,
or change the basis of taxation of payments to such Lender in
respect thereof (except for changes in the rate of tax on the
overall net income of such Lender);
(ii) shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar
requirement against assets held by, deposits or other
liabilities in or for the account of, advances, loans or other
extensions of credit by, or any other acquisition of funds by,
any office of such Lender which is not otherwise included in
the determination of the LIBOR Rate hereunder; or
(iii) shall impose on such Lender any other
condition;
and the result of any of the foregoing is to increase the cost to
such Lender of making or maintaining LIBOR Rate Loans or the Letters
of Credit or to reduce any amount receivable hereunder or under any
Note, then, in any such case, the Borrower shall promptly pay such
Lender, within 15 days after its demand, any additional amounts
necessary to compensate such Lender for such additional cost or
reduced amount receivable which such Lender reasonably deems to be
material as determined by such Lender with respect to its LIBOR Rate
Loans or Letters of Credit. A certificate as to any additional
amounts payable pursuant to this Section submitted by such Lender,
through the Administrative Agent, to the Borrower shall be
conclusive in the absence of manifest error. Each Lender agrees to
use reasonable efforts (including reasonable efforts to change its
Domestic Lending Office or LIBOR Lending Office, as the case may be)
to avoid or to minimize any amounts which might otherwise be payable
pursuant to this paragraph of this Section; provided, however, that
such efforts shall not cause the imposition on such Lender of any
additional costs or legal or regulatory burdens deemed by such
Lender to be material.
(b) If any Lender shall have reasonably determined that the
adoption of or any change in any Requirement of Law regarding
capital adequacy or in the interpretation or application thereof or
compliance by such Lender or any corporation controlling such Lender
with any request or directive regarding capital adequacy (whether
or not having the force of law) from any central bank or
Governmental Authority made subsequent to the date hereof does or
shall have the effect of reducing the rate of return on such
Lender's or such corporation's capital as a consequence of its
obligations hereunder to a level below that which such Lender or
such corporation could have achieved but for such adoption, change
or compliance (taking into consideration such Lender's or such
corporation's policies with respect to capital adequacy) by an
amount reasonably deemed by such Lender to be material, then from
time to time, within fifteen (15) days after demand by such Lender,
the Borrower shall pay to such Lender such additional amount as
shall be certified by such Lender as being required to compensate
it for such reduction. Such a certificate as to any additional
amounts payable under this Section submitted by a Lender (which
certificate shall include a description of the basis for the
computation), through the Administrative Agent, to the Borrower
shall be conclusive absent manifest error.
(c) The agreements in this Section 2.15 shall survive the
termination of this Credit Agreement and payment of the Notes and
all other amounts payable hereunder.
Section 2.16 Indemnity.
The Borrower hereby agrees to indemnify each Lender and to hold such
Lender harmless from any funding loss or expense which such Lender may
sustain or incur as a consequence of (a) default by the Borrower in
payment of the principal amount of or interest on any Loan by such Lender
in accordance with the terms hereof, (b) default by the Borrower in
accepting a borrowing after the Borrower has given a notice in accordance
with the terms hereof, (c) default by the Borrower in making any
prepayment after the Borrower has given a notice in accordance with the
terms hereof, and/or (d) the making by the Borrower of a prepayment of
a Loan, or the conversion thereof, on a day which is not the last day of
the Interest Period with respect thereto, in each case including, but not
limited to, any such loss or expense arising from interest or fees
payable by such Lender to lenders of funds obtained by it in order to
maintain its Loans hereunder. A certificate as to any additional amounts
payable pursuant to this Section submitted by any Lender, through the
Administrative Agent, to the Borrower (which certificate must be
delivered to the Administrative Agent within thirty days following such
default, prepayment or conversion) shall be conclusive in the absence of
manifest error. The agreements in this Section shall survive termination
of this Credit Agreement and payment of the Notes and all other amounts
payable hereunder.
Section 2.17 Taxes.
(a) All payments made by the Borrower hereunder or under any
Note will be, except as provided in Section 2.17(b), made free and
clear of, and without deduction or withholding for, any present or
future taxes, levies, imposts, duties, fees, assessments or other
charges of whatever nature now or hereafter imposed by any
Governmental Authority or by any political subdivision or taxing
authority thereof or therein with respect to such payments (but
excluding any tax imposed on or measured by the net income or
profits of a Lender pursuant to the laws of the jurisdiction in
which it is organized or the jurisdiction in which the principal
office or applicable lending office of such Lender is located or any
subdivision thereof or therein) and all interest, penalties or
similar liabilities with respect thereto (all such non-excluded
taxes, levies, imposts, duties, fees, assessments or other charges
being referred to collectively as "Taxes"). If any Taxes are so
levied or imposed, the Borrower agrees to pay the full amount of
such Taxes, and such additional amounts as may be necessary so that
every payment of all amounts due under this Credit Agreement or
under any Note, after withholding or deduction for or on account of
any Taxes, will not be less than the amount provided for herein or
in such Note. The Borrower will furnish to the Administrative Agent
as soon as practicable after the date the payment of any Taxes is
due pursuant to applicable law certified copies (to the extent
reasonably available and required by law) of tax receipts evidencing
such payment by the Borrower. The Borrower agrees to indemnify and
hold harmless each Lender, and reimburse such Lender upon its
written request, for the amount of any Taxes so levied or imposed
and paid by such Lender.
(b) Each Lender that is not a United States person (as such
term is defined in Section 7701(a)(30) of the Code) agrees to
deliver to the Borrower and the Administrative Agent on or prior to
the Closing Date, or in the case of a Lender that is an assignee or
transferee of an interest under this Credit Agreement pursuant to
Section 9.6(d) (unless the respective Lender was already a Lender
hereunder immediately prior to such assignment or transfer), on the
date of such assignment or transfer to such Lender, (i) if the
Lender is a "bank" within the meaning of Section 881(c)(3)(A) of the
Code, two accurate and complete original signed copies of Internal
Revenue Service Form 4224 or 1001 (or successor forms) certifying
such Lender's entitlement to a complete exemption from United States
withholding tax with respect to payments to be made under this
Credit Agreement and under any Note, or (ii) if the Lender is not
a "bank" within the meaning of Section 881(c)(3)(A) of the Code,
either Internal Revenue Service Form 1001 or 4224 as set forth in
clause (i) above, or (x) a certificate substantially in the form of
Schedule 2.17 (any such certificate, a "2.17 Certificate") and (y)
two accurate and complete original signed copies of Internal Revenue
Service Form W-8 (or successor form) certifying such Lender's
entitlement to an exemption from United States withholding tax with
respect to payments of interest to be made under this Credit
Agreement and under any Note. In addition, each Lender agrees that
it will deliver upon the Borrower's request updated versions of the
foregoing, as applicable, whenever the previous certification has
become obsolete or inaccurate in any material respect, together with
such other forms as may be required in order to confirm or establish
the entitlement of such Lender to a continued exemption from or
reduction in United States withholding tax with respect to payments
under this Credit Agreement and any Note. Notwithstanding anything
to the contrary contained in Section 2.17(a), but subject to the
immediately succeeding sentence, (x) each Borrower shall be
entitled, to the extent it is required to do so by law, to deduct
or withhold Taxes imposed by the United States (or any political
subdivision or taxing authority thereof or therein) from interest,
fees or other amounts payable hereunder for the account of any
Lender which is not a United States person (as such term is defined
in Section 7701(a)(30) of the Code) for U.S. Federal income tax
purposes to the extent that such Lender has not provided to the
Borrower U.S. Internal Revenue Service Forms that establish a
complete exemption from such deduction or withholding and (y) the
Borrower shall not be obligated pursuant to Section 2.17(a) hereof
to gross-up payments to be made to a Lender in respect of Taxes
imposed by the United States if (I) such Lender has not provided to
the Borrower the Internal Revenue Service Forms required to be
provided to the Borrower pursuant to this Section 2.17(b) or (II)
in the case of a payment, other than interest, to a Lender described
in clause (ii) above, to the extent that such Forms do not establish
a complete exemption from withholding of such Taxes.
Notwithstanding anything to the contrary contained in the preceding
sentence or elsewhere in this Section 2.17, the Borrower agrees to
pay additional amounts and to indemnify each Lender in the manner
set forth in Section 2.17(a) (without regard to the identity of the
jurisdiction requiring the deduction or withholding) in respect of
any amounts deducted or withheld by it as described in the
immediately preceding sentence as a result of any changes after the
Closing Date in any applicable law, treaty, governmental rule,
regulation, guideline or order, or in the interpretation thereof,
relating to the deducting or withholding of Taxes.
(c) Each Lender agrees to use reasonable efforts (including
reasonable efforts to change its Domestic Lending Office or LIBOR
Lending Office, as the case may be) to avoid or to minimize any
amounts which might otherwise be payable pursuant to this Section;
provided, however, that such efforts shall not cause the imposition
on such Lender of any additional costs or legal or regulatory
burdens deemed by such Lender in its sole discretion to be material.
(d) If the Borrower pays any additional amount pursuant to
this Section 2.17 with respect to a Lender, such Lender shall use
reasonable efforts to obtain a refund of tax or credit against its
tax liabilities on account of such payment; provided that such
Lender shall have no obligation to use such reasonable efforts if
either (i) it is in an excess foreign tax credit position or (ii)
it believes in good faith, in its sole discretion, that claiming a
refund or credit would cause adverse tax consequences to it. In the
event that such Lender receives such a refund or credit, such Lender
shall pay to the Borrower an amount that such Lender reasonably
determines is equal to the net tax benefit obtained by such Lender
as a result of such payment by the Borrower. In the event that no
refund or credit is obtained with respect to the Borrower's payments
to such Lender pursuant to this Section 2.17, then such Lender shall
upon request provide a certification that such Lender has not
received a refund or credit for such payments. Nothing contained
in this Section 2.17 shall require a Lender to disclose or detail
the basis of its calculation of the amount of any tax benefit or any
other amount or the basis of its determination referred to in the
proviso to the first sentence of this Section 2.17 to the Borrower
or any other party.
(e) The agreements in this Section 2.17 shall survive the
termination of this Credit Agreement and the payment of the Notes
and all other amounts payable hereunder.
Section 2.18 Indemnification; Nature of Issuing Lender's Duties.
(a) In addition to its other obligations under Section 2.3,
the Borrower hereby agrees to protect, indemnify, pay and save each
Issuing Lender harmless from and against any and all claims,
demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable attorneys' fees) that the Issuing Lender may
incur or be subject to as a consequence, direct or indirect, of (i)
the issuance of any Letter of Credit or (ii) the failure of the
Issuing Lender to honor a drawing under a Letter of Credit as a
result of any act or omission, whether rightful or wrongful, of any
present or future de jure or de facto government or governmental
authority (all such acts or omissions, herein called "Government
Acts").
(b) As between the Borrower and the Issuing Lender, the
Borrower shall assume all risks of the acts, omissions or misuse of
any Letter of Credit by the beneficiary thereof. The Issuing Lender
shall not be responsible: (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 failure of the beneficiary of
a Letter of Credit to comply fully with conditions required in order
to draw upon a Letter of Credit; (iv) 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; (v) for errors in interpretation of technical terms;
(vi) 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 (vii) for any consequences
arising from causes beyond the control of the Issuing Lender,
including, without limitation, any Government Acts. None of the
above shall affect, impair, or prevent the vesting of the Issuing
Lender's rights or powers hereunder.
(c) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or
omitted by the Issuing Lender, under or in connection with any
Letter of Credit or the related certificates, if taken or omitted
in good faith, shall not put such Issuing Lender under any resulting
liability to the Borrower. It is the intention of the parties that
this Credit Agreement shall be construed and applied to protect and
indemnify the Issuing Lender against any and all risks involved in
the issuance of the Letters of Credit, all of which risks are hereby
assumed by the Borrower, including, without limitation, any and all
risks of the acts or omissions, whether rightful or wrongful, of any
Government Authority. The Issuing Lender shall not, in any way, be
liable for any failure by the Issuing Lender or anyone else to pay
any drawing under any Letter of Credit as a result of any Government
Acts or any other cause beyond the control of the Issuing Lender.
(d) Nothing in this Section 2.18 is intended to limit the
reimbursement obligation of the Borrower contained in Section 2.3(d)
hereof. The obligations of the Borrower under this Section 2.18
shall survive the termination of this Credit Agreement. No act or
omissions of any current or prior beneficiary of a Letter of Credit
shall in any way affect or impair the rights of the Issuing Lender
to enforce any right, power or benefit under this Credit Agreement.
(e) Notwithstanding anything to the contrary contained in
this Section 2.18, the Borrower shall have no obligation to
indemnify any Issuing Lender in respect of any liability incurred
by such Issuing Lender arising out of the gross negligence or
willful misconduct of the Issuing Lender (including action not taken
by an Issuing Lender), as determined by a court of competent
jurisdiction.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Credit Agreement and to
make the Extensions of Credit herein provided for, each of the Credit
Parties hereby represents and warrants to the Administrative Agent and
to each Lender that:
Section 3.1 Financial Condition.
The balance sheets and the related statements of income and of cash
flows of the Borrower and its Subsidiaries for fiscal year 1998 audited
by Ernst & Young LLP are complete and correct in all material respects
and present fairly the financial condition of the Borrower and its
Subsidiaries on a consolidated basis as of the date of such financial
statements. To the best of the Borrower's knowledge after reasonable
investigation, the balance sheets and related statements of income and
of cash flows of Penske and its Subsidiaries for fiscal year 1998 audited
by Deloitte & Touche LLP are complete and correct in all material
respects and present fairly the financial condition of Penske and its
Subsidiaries on a consolidated basis as of the date of such financial
statements. All such financial statements, including the related
schedules and notes thereto, have been prepared in accordance with GAAP
applied consistently throughout the periods involved (except as disclosed
therein). To the best of the Borrower's knowledge after reasonable
investigation, the unaudited balance sheet and the related statement of
income of PSH and its Subsidiaries are complete and accurate in all
material respects and present fairly the financial condition of PSH and
its Subsidiaries on a consolidated basis.
Section 3.2 No Change.
Since November 30, 1998 (and after delivery of annual audited
financial statements in accordance Section 5.1(a), from the date of the
most recently delivered annual audited financial statements) there has
been no development or event which has had or could reasonably be
expected to have a Material Adverse Effect and the Credit Parties have
incurred no material liabilities other than those incurred in the
ordinary course of business which are not disclosed on Schedule 6.1(b).
Section 3.3 Corporate Existence; Compliance with Law.
Each of the Borrower and its Subsidiaries (a) is duly organized,
validly existing and in good standing under the laws of the jurisdiction
of its organization, (b) has the requisite power and authority and the
legal right to own and operate all its material property, to lease the
material property it operates as lessee and to conduct the business in
which it is currently engaged, (c) is duly qualified to conduct business
and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification except to the extent that the failure to so
qualify or be in good standing could not, in the aggregate, reasonably
be expected to have a Material Adverse Effect and (d) is in compliance
with all Requirements of Law (including without limitation, Environmental
Laws), except to the extent that the failure to comply therewith could
not, in the aggregate, reasonably be expected to have a Material Adverse
Effect.
Section 3.4 Corporate Power; Authorization; Enforceable
Obligations.
Each of the Credit Parties has the full power and authority and the
legal right to make, deliver and perform the Credit Documents to which
it is party and has taken all necessary limited liability company or
corporate action to authorize the execution, delivery and performance by
it of the Credit Documents to which it is party. No consent or
authorization of, filing with, notice to or other act by or in respect
of, any Governmental Authority or any other Person is required in
connection with the borrowings hereunder or with the execution, delivery
or performance of any Credit Document by any Credit Party (other than
those which have been obtained) or with the validity or enforceability
of any Credit Document against the Credit Parties. Each Credit Document
has been duly executed and delivered on behalf of the Credit Parties that
are a party thereto. Each Credit Document constitutes a legal, valid and
binding obligation of the Credit Parties that are a party thereto,
enforceable against such Credit Parties in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable
principles (whether enforcement is sought by proceedings in equity or at
law).
Section 3.5 No Legal Bar; No Default.
The execution, delivery and performance of the Credit Documents, the
borrowings thereunder and the use of the proceeds of the Loans will not
violate any Requirement of Law or any Contractual Obligation of the
Borrower or its Subsidiaries (except those as to which waivers or
consents have been obtained), and will not result in, or require, the
creation or imposition of any Lien on any of its or their respective
properties or revenues pursuant to any Requirement of Law or Contractual
Obligation other than the Liens arising under or contemplated in
connection with the Credit Documents. Neither the Borrower nor any of
its Subsidiaries is in default under or with respect to any of its
Contractual Obligations in any respect which could reasonably be expected
to have a Material Adverse Effect. No Default or Event of Default has
occurred and is continuing.
Section 3.6 No Material Litigation.
Except as set forth in Schedule 3.6, no litigation, investigation
or proceeding (including without limitation, any environmental
proceeding) of or before any arbitrator or Governmental Authority is
pending or, to the best knowledge of the Credit Parties, threatened by
or against the Borrower or any of its Subsidiaries or against any of its
or their respective properties or revenues (a) with respect to the Credit
Documents or any Loan or any of the transactions contemplated hereby, or
(b) which, if adversely determined, could reasonably be expected to have
a Material Adverse Effect.
Section 3.7 Investment Company Act.
None of the Credit Parties is an "investment company", or a company
"controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended.
Section 3.8 Margin Regulations.
No part of the proceeds of any Loan hereunder will be used directly
or indirectly for any purpose which violates, or which would be
inconsistent with, the provisions of Regulation T, U or X of the Board
of Governors of the Federal Reserve System as now and from time to time
hereafter in effect. The Borrower and its Subsidiaries taken as a group
do not own "margin stock" except as identified in the financial
statements referred to in Section 3.1 and, following the application of
the proceeds of each Loan, the aggregate value of all "margin stock"
owned by the Borrower and its Subsidiaries taken as a group does not
exceed 25% of the value of their assets.
Section 3.9 ERISA.
Except as set forth in Schedule 3.9, neither a Reportable Event nor
an "accumulated funding deficiency" (within the meaning of Section 412
of the Code or Section 302 of ERISA) has occurred during the five-year
period prior to the date on which this representation is made or deemed
made with respect to any Plan, and each Plan has complied in all material
respects with the applicable provisions of ERISA and the Code, except to
the extent that any such occurrence or failure to comply would not
reasonably be expected to have a Material Adverse Effect. No termination
of a Single Employer Plan has occurred resulting in any liability that
has remained underfunded, and no Lien in favor of the PBGC or a Plan has
arisen, during such five-year period which could reasonably be expected
to have a Material Adverse Effect. The present value of all accrued
benefits under each Single Employer Plan (based on those assumptions used
to fund such Plans) did not, as of the last annual valuation date prior
to the date on which this representation is made or deemed made, exceed
the value of the assets of such Plan allocable to such accrued benefits
by an amount which, as determined in accordance with GAAP, could
reasonably be expected to have a Material Adverse Effect. Neither the
Borrower nor any Commonly Controlled Entity is currently subject to any
liability for a complete or partial withdrawal from a Multiemployer Plan
which could reasonably be expected to have a Material Adverse Effect.
Section 3.10 Purpose of Loans.
The proceeds of the Loans hereunder shall be used solely by the
Borrower to (a) finance the cash portion of the Penske Acquisitions, (b)
refinance existing Indebtedness of the Borrower and Penske (collectively,
the "Existing Facilities") and to pay certain fees and expenses related
thereto, and (c) provide for working capital and other general corporate
purposes of the Credit Parties, including track development, Permitted
Investments and Permitted Acquisitions. The Letters of Credit shall be
used only for transactions entered into by the Borrower for general
corporate purposes.
Section 3.11 Subsidiaries.
Set forth on Schedule 3.11 is a complete and accurate list of all
Subsidiaries of the Borrower. Information on the attached Schedule
includes state of incorporation, the number and percentage of shares of
each class of Capital Stock or other equity interests outstanding, and
the number and effect, if exercised, of all outstanding options,
warrants, rights of conversion or purchase and similar rights.
Section 3.12 Ownership.
Each of the Borrower and its Subsidiaries is the owner of, and has
good and marketable title to, all of its respective assets necessary to
operate its business in the ordinary course, except as may be permitted
pursuant Section 6.13 hereof, and none of such assets is subject to any
Lien other than Permitted Liens.
Section 3.13 Indebtedness.
Except as otherwise permitted under Section 6.1, the Borrower and
its Subsidiaries have no Indebtedness.
Section 3.14 Taxes.
Each of the Borrower and its Subsidiaries has filed, or caused to
be filed, all material tax returns (federal, state, local and foreign)
required to be filed and paid (a) all amounts of taxes shown thereon to
be due (including interest and penalties) and (b) all other taxes, fees,
assessments and other governmental charges (including mortgage recording
taxes, documentary stamp taxes and intangibles taxes) owing by it, except
for such taxes (i) which are not yet delinquent, (ii) that are being
contested in good faith and by proper proceedings or (iii) which are not
material, and against which adequate reserves are being maintained in
accordance with GAAP. Neither the Borrower nor any of its Subsidiaries
is aware as of the Closing Date of any proposed tax assessments against
it or any of its Subsidiaries which could reasonably be expected to have
a Material Adverse Effect. Except as set forth on Schedule 3.14, there
are no outstanding agreements or waivers extending the statutory period
of limitation applicable to any tax return required to be filed with
respect to any of the Credit Parties.
Section 3.15 Investments.
All Investments of each of the Borrower and its Subsidiaries are
Permitted Investments.
Section 3.16 No Burdensome Restrictions.
None of the Borrower or any of its Subsidiaries is a party to any
agreement or instrument or subject to any other obligation or any charter
or corporate restriction or any provision of any applicable law, rule or
regulation which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
Section 3.17 Brokers' Fees.
None of the Borrower or any of its Subsidiaries has any obligation
to any Person in respect of any finder's, broker's, investment banking
or other similar fee in connection with any of the transactions
contemplated under the Credit Documents other than the closing and other
fees payable pursuant to this Credit Agreement and the Penske
Acquisitions.
Section 3.18 Labor Matters.
There are no collective bargaining agreements or Multiemployer Plans
covering the employees of the Borrower or any of its Subsidiaries as of
the Closing Date, other than as set forth in Schedule 3.18 hereto, and
none of the Borrower or any of its Subsidiaries (a) has suffered any
strikes, walkouts, work stoppages or other material labor difficulty
within the last five years, other than as set forth in Schedule 3.18
hereto or (b) has knowledge of any potential or pending strike, walkout
or work stoppage.
Section 3.19 Accuracy and Completeness of Information.
All factual information heretofore, contemporaneously or hereafter
furnished by or on behalf of the Borrower or any of its Subsidiaries to
the Administrative Agent or any Lender for purposes of or in connection
with this Credit Agreement or any other Credit Document, or any
transaction contemplated hereby or thereby, is or will be, at the time
it is provided, true and accurate in all material respects and not
incomplete by omitting to state any material fact necessary to make such
information not misleading. There is no fact now known to the Borrower
or any of its Subsidiaries which has, or could reasonably be expected to
have, a Material Adverse Effect which fact has not been set forth herein,
in the financial statements of the Borrower and its Subsidiaries
furnished to the Administrative Agent and/or the Lenders, or in any
certificate, opinion or other written statement made or furnished by the
Borrower to the Administrative Agent and/or the Lenders.
Section 3.20 Year 2000 Issue.
Any reprogramming and related testing required to permit the proper
functioning of the Credit Parties' material computer systems in and
following the year 2000 will be completed in all material respects prior
to December 1, 1999 (that is, the Credit Parties will be "Year 2000
Compliant"), and the cost to the Credit Parties of such reprogramming and
testing will not result in a Default or Event of Default or a Material
Adverse Effect. Except for such reprogramming referred to in the
preceding sentence as may be necessary, the computer and management
information systems of the Credit Parties are and, with ordinary course
upgrading and maintenance, will continue for the term of this Credit
Agreement to be, adequate for the conduct of its business as reasonably
determined by the Borrower.
Section 3.21 Possession of Franchises and Licenses.
Each of the Borrower and its Subsidiaries possesses all material
franchises, certificates, licenses, permits and other authorizations
from Governmental Authorities, free from material restrictions, that
are necessary in any material respect for the ownership, maintenance
or operation of its properties and the conduct of its business as
presently conducted, and each of the Borrower and its Subsidiaries is
not in material violation of any thereof.
Section 3.22 Claims and Offsets.
There is no defense, setoff or counterclaim against payment of
principal of or interest under the Notes or against any other amounts
due or that may become due under the Credit Documents. To the extent
permitted by applicable law, each of the Credit Parties hereby forever
waives, releases and discharges all defenses, setoffs, counterclaims
or claims of any nature, if any, whether known or unknown, held by
such Credit Party against any of the Lenders, any of their Affiliates,
any of their officers, directors, shareholders, agents, attorneys and
employees, and their respective successors, assigns, heirs and legal
representatives.
Section 3.23 Intent and Effect of Transactions.
The transactions contemplated by this Credit Agreement and the other
Credit Documents:
(a) Are not made or incurred with the intent to hinder, delay or
defraud any Person to whom any of the Credit Parties has been, is now or
may hereafter become indebted;
(b) Do not render any of the Credit Parties insolvent, nor are any
of the Credit Parties insolvent at the time the transactions provided for
herein and the other Credit Documents are entered into;
(c) Do not leave any of the Credit Parties with unreasonably small
capital with which to engage in its business, or in any business or
transaction in which it intends to engage; and
(d) Are not entered into with the intent to incur, or with the
belief that any of the Credit Parties would incur, debts that would be
beyond its ability to pay as such debts mature.
Section 3.24 Senior Debt Status.
The Credit Party Obligations constitute "senior indebtedness" for
purposes of the Senior Note Indenture.
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.1 Conditions to Closing Date and Initial Revolving
Loans.
This Credit Agreement shall become effective upon, and the
obligation of each Lender to make the initial Revolving Loans on the
Closing Date is subject to, the satisfaction of the following conditions
precedent:
(a) Execution of Credit Agreement. The Administrative Agent
shall have received (i) counterparts of this Credit Agreement,
executed by a duly authorized officer of each party hereto and (ii)
for the account of each Lender, Revolving Notes and for the account
of the Swingline Lender, a Swingline Note, executed by a duly
authorized officer of the Borrower.
(b) Authority Documents. The Administrative Agent shall have
received the following:
(i) Articles of Incorporation. Copies of the
articles of incorporation or other charter documents, as applicable,
of each Credit Party certified to be true and complete as of a
recent date by the appropriate governmental authority of the
state of its incorporation.
(ii) Resolutions. Copies of resolutions of the board
of directors of each Credit Party approving and adopting the
Credit Documents, the transactions contemplated therein and
authorizing execution and delivery thereof, certified by an
officer of such Credit Party as of the Closing Date to be true
and correct and in force and effect as of such date.
(iii) Bylaws. A copy of the bylaws of each
Credit Party certified by an officer of such Credit Party as of the
Closing Date to be true and correct and in force and effect as
of such date.
(iv) Good Standing. Copies of (A) certificates of
good standing, existence or its equivalent with respect to each
Credit Party certified as of a recent date by the appropriate
governmental authorities of the state of incorporation and
each other state in which the failure to so qualify and be in
good standing could reasonably be expected to have a Material
Adverse Effect on the business or operations of the Borrower
and its Subsidiaries in such state and (B) a certificate
indicating payment of all corporate franchise taxes certified
as of a recent date by the appropriate governmental taxing
authorities.
(v) Incumbency. An incumbency certificate of each
Credit Party certified by a secretary or assistant secretary
to be true and correct as of the Closing Date.
(c) Legal Opinions of Counsel. The Administrative Agent
shall have received an opinion of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, assistant
general counsel for the Credit Parties, dated the Closing Date and
addressed to the Administrative Agent and the Lenders, in form and
substance acceptable to the Administrative Agent.
(d) Fees and Expenses. The Administrative Agent shall have
received all fees and expenses owed by the Borrower to the
Administrative Agent and its legal counsel.
(e) Litigation. There shall not exist any pending litigation
or investigation affecting or relating to the Borrower or any of its
Subsidiaries or this Credit Agreement and the other Credit Documents
that in the reasonable judgment of the Administrative Agent could
reasonably be expected to have a Material Adverse Effect that has
not been settled, dismissed, vacated, discharged or terminated prior
to the Closing Date.
(f) Corporate Structure. The corporate capital and ownership
structure of the Borrower and its Subsidiaries shall be as described
in Schedule 3.11.
(g) Government Consent. The Administrative Agent shall have
received evidence that all governmental, shareholder and material
third party consents and approvals (including ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
clearance) necessary in connection with the financings and other
transactions contemplated hereby and in connection with the Penske
Acquisitions have been obtained and all applicable waiting periods
have expired without any action being taken by any authority that
could restrain, prevent or impose any material adverse conditions
on such transactions or Acquisitions or that could seek or threaten
any of the foregoing.
(h) Compliance with Laws. The financings and other
transactions contemplated hereby shall be in material compliance
with all material applicable laws and regulations (including all
applicable securities and banking laws, rules and regulations).
(i) Bankruptcy. There shall be no bankruptcy or insolvency
proceedings with respect to the Borrower or any of its Subsidiaries.
(j) Financial Statements. The Administrative Agent shall
have received copies of the financial statements referred to in
Section 3.1 hereof, each in form and substance reasonably
satisfactory to it.
(k) Pro Forma Balance Sheet and EBITDA Calculation. The
Administrative Agent shall have received a pro form balance sheet
as of the Closing Date and a pro forma EBITDA calculation of the
Borrower and its Subsidiaries for the period commencing on July 1,
1998 through June 30, 1999 after giving effect to the Penske
Acquisitions
(l) Material Contracts. The Administrative Agent shall have
received and reviewed all material contracts (including, without
limitation, the Acquisition Documents) and agreements of the
Borrower and its Subsidiaries as reported to the Securities Exchange
Commission, the terms and conditions of which shall be satisfactory
to the Administrative Agent in its reasonable discretion.
(m) Year 2000 Evidence. The Administrative Agent shall have
received evidence that the representation set forth in Section 3.20
is true and correct in all material respects.
(n) No Material Adverse Change. There shall not have
occurred any material adverse change in the business, properties,
prospects, operations, condition (financial or otherwise) of the
Borrower and its Subsidiaries taken as a whole or Penske and its
Subsidiaries taken as whole.
(o) Additional Matters. All other documents and legal
matters in connection with the transactions contemplated by this
Credit Agreement and the Penske Acquisitions shall be reasonably
satisfactory in form and substance to the Administrative Agent and
its counsel.
Section 4.2 Conditions to Initial Revolving Loans.
The obligation of each Lender to make the initial Revolving Loans
on the Closing Date is subject to, the satisfaction of the following
additional conditions precedent:
(a) Repayment of Existing Indebtedness. All existing
Indebtedness for borrowed money of the Borrower and its Subsidiaries
(including the Existing Facilities, but excluding the existing
Indebtedness listed on Schedule 6.1(b)) shall have been repaid in
full and terminated and the Administrative Agent shall have received
such evidence of such repayment and termination as the
Administrative Agent may reasonably require.
(b) Penske Acquisitions.
(i) The Penske Acquisitions shall have been
consummated on terms consistent with the Acquisition Documents, as
reviewed by the Lenders.
(ii) The Administrative Agent shall have received
evidence that the Borrower shall have had a sufficient number
of shares of PSH and Penske tendered to it to obtain voting
control of PSH and Penske.
(iii) The Administrative Agent shall have received complete
executed copies of the Acquisition Documents (and all schedules and
exhibits thereto), certified to be true and correct copies, and to
not have been amended prior to the date of such certification except
as attached to such certificate, by a Responsible Officer of the
Borrower.
(c) Satisfaction of Section 4.1 Conditions. The
conditions set forth in Section 4.1 shall have been satisfied.
Section 4.3 Conditions to All Extensions of Credit.
The obligation of each Lender to make any Extension of Credit
hereunder is subject to the satisfaction of the following conditions
precedent on the date of making such Extension of Credit:
(a) Representations and Warranties. The representations and
warranties made by the Credit Parties herein or which are contained
in any certificate furnished at any time under or in connection
herewith shall be true and correct in all material respects on and
as of the date of such Extension of Credit as if made on and as of
such date.
(b) No Default or Event of Default. No Event of Default, nor
any Default that can be cured with the payment of money, shall have
occurred and be continuing on such date or after giving effect to
the Extension of Credit to be made on such date unless such Default
or Event of Default shall have been waived in accordance with this
Credit Agreement.
(c) Compliance with Commitments. Immediately after giving
effect to the making of any such Extension of Credit (and the
application of the proceeds thereof), (i) the sum of the aggregate
principal amount of outstanding Revolving Loans plus Swingline Loans
plus LOC Obligations shall not exceed the Revolving Committed
Amount, (ii) the LOC Obligations shall not exceed the LOC Committed
Amount and (iii) the Swingline Loans shall not exceed the Swingline
Commitment.
(d) Additional Conditions to Revolving Loans. If such Loan
is made pursuant to Section 2.1, all conditions set forth in such
Section shall have been satisfied.
(e) Additional Conditions to Swingline Loan. If such Loan
is made pursuant to Section 2.2, all conditions set forth in such
Section shall have been satisfied.
(f) Additional Conditions to Letters of Credit. If such
Extension of Credit is made pursuant to Section 2.3, all conditions
set fort in such Section shall have been satisfied.
Each request for an Extension of Credit and each acceptance by the
Borrower of any such Extension of Credit shall be deemed to constitute
a representation and warranty by the Borrower as of the date of such
Extension of Credit that the applicable conditions in paragraphs (a)
through (f) of this Section have been satisfied.
ARTICLE V
AFFIRMATIVE COVENANTS
The Credit Parties hereby covenant and agree that on the Closing
Date, and thereafter for so long as this Credit Agreement is in effect
and until the Commitments have terminated, no Note remains outstanding
and unpaid and the Credit Party Obligations, together with interest,
Commitment Fees and all other amounts owing to the Administrative Agent
or any Lender hereunder, are paid in full, the Credit Parties shall, and
shall cause each of their Subsidiaries (other than in the case of
Sections 5.1 or 5.2 hereof), to:
Section 5.1 Financial Statements.
Furnish to the Administrative Agent and each of the Lenders:
(a) Annual Financials. As soon as available, but in any
event within ninety (90) days after the end of each fiscal year of
the Borrower, the Borrower shall furnish a copy of the consolidated
financial statements of the Borrower prepared in accordance with
GAAP, consistently applied, together with an unqualified letter of
an independent certified public accounting firm selected by the
Borrower and acceptable to the Required Lenders and such other
information as may be reasonably requested by the Required Lenders.
Such statements shall include a balance sheet, a statement of income
and expenses, a statement of cash flow and such other and further
reports and schedules as may reasonably be requested by the Required
Lenders, including without limitation verification of the Borrower's
compliance with the financial covenants set forth in Section 5.8.
Such statements shall be certified as to their correctness by a
Responsible Officer of Borrower.
(b) Quarterly Financials. As soon as available, but in
any event, within forty-five (45) days after the end of each
fiscal quarter of the Borrower (other than the last fiscal
quarter of each fiscal year), the Borrower shall furnish to each
Lender a copy of the unaudited management-prepared quarterly
consolidated financial statements of the Borrower, prepared in
accordance with GAAP, consistently applied. Such statements
shall include a balance sheet, a statement of income and
expenses, a statement of cash flow and such other and further
reports and schedules as may reasonably be requested by the
Required Lenders, and verification of the Borrower's compliance
with the financial covenants set forth in Section 5.8. Such
statements shall also be certified as to their correctness by a
Responsible Officer of the Borrower.
Section 5.2 Certificates; Other Information.
Furnish to the Administrative Agent and each of the Lenders:
(a) concurrently with the delivery of the financial
statements referred to in Section 5.1(a) above, a certificate of the
independent certified public accountants reporting on such financial
statements stating that in making the examination necessary therefor
no knowledge was obtained of any violation of the financial
covenants contained in Section 5.8, except as specified in such
certificate;
(b) concurrently with the delivery of the financial
statements referred to in Sections 5.1(a) and 5.1(b) above, a
certificate of a Responsible Officer stating that, to the best of
such Responsible Officer's knowledge, each of the Credit Parties
during such period observed or performed in all material respects
all of its covenants and other agreements, and satisfied in all
material respects every condition, contained in this Credit
Agreement to be observed, performed or satisfied by it, that no
financial statement accompanying such certificate contains any
untrue statement or omits to state a material fact necessary to make
the facts contained therein not misleading and that such Responsible
Officer has obtained no knowledge of any Default or Event of Default
except as specified in such certificate and such certificate shall
include the calculations in reasonable detail required to indicate
compliance with Section 5.8 as of the last day of such period;
(c) within ten (10) days after the same are sent, filed or
distributed, copies of (i) all reports (other than those otherwise
provided pursuant to Section 5.1 and those which are of a
promotional nature) and other financial information which the
Borrower sends to its shareholders, (ii) copies of all financial
statements and non-confidential reports which the Borrower may make
to or file with the SEC or any successor or analogous Governmental
Authority and (iii) all official press releases distributed by the
investor relations department of the Borrower that may be of general
interest to the investment community and other public announcements
of financial results (such as earnings, etc.) made by the Borrower;
provided, however, unless a Default or an Event of Default shall
have occurred and be continuing, the Borrower shall not be required
to furnish any tax return information to the Administrative Agent
and the Lenders.
(d) within ninety (90) days after the end of each fiscal year
of the Borrower, a certificate containing information regarding the
amount of all Asset Dispositions and Investments made pursuant to
subsections (f) and (g) of the definition of Permitted Investments
unless such information has previously been disclosed in the
financial statements delivered pursuant to Section 5.1 or 5.2;
(e) promptly upon receipt thereof, a copy of any other report
or "management letter" submitted by independent accountants to the
Borrower or any of its Subsidiaries in connection with any annual,
interim or special audit of the books of such Person;
(f) after the occurrence and during the continuation of an
Event of Default, access to the unaudited consolidating financial
statements of the Borrower and its Subsidiaries at the offices of
the Borrower; and
(g) promptly, such additional financial and other information
as the Administrative Agent, on behalf of any Lender, may from time
to time reasonably request.
Section 5.3 Payment of Obligations.
Pay, discharge or otherwise satisfy at or before maturity or before
they become delinquent, as the case may be, in accordance with industry
practice (subject, where applicable, to specified grace periods) all its
material obligations of whatever nature (including, without limitation,
taxes assessments and governmental charges or levies) and any additional
costs that are imposed as a result of any failure to so pay, discharge
or otherwise satisfy such obligations, except when the amount or validity
of such obligations and costs is currently being contested in good faith
by appropriate proceedings and reserves, if applicable, in conformity
with GAAP with respect thereto have been provided on the books of the
Borrower or its Subsidiaries, as the case may be.
Section 5.4 Conduct of Business and Maintenance of Existence.
Continue to engage in business of the same general type as now
conducted by it on the Closing Date and preserve, renew and keep in full
force and effect its corporate, partnership or limited liability company
existence and take all reasonable action to maintain all rights,
privileges and franchises necessary or desirable in the normal conduct
of its business; comply with all Contractual Obligations and Requirements
of Law applicable to it except to the extent that failure to comply
therewith could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect.
Section 5.5 Maintenance of Property; Insurance.
(a) Keep all material property useful and necessary in its
business in good working order and condition (ordinary wear and tear
and obsolescence excepted);
(b) Maintain with financially sound and reputable insurance
companies insurance on all its material property in at least such
amounts and against at least such risks as are usually insured
against in the same general area by companies engaged in the same
or a similar business (including, without limitation, hazard and
other relevant coverage); and furnish to the Administrative Agent,
upon written request, full information as to the insurance carried;
provided, however, that the Borrower and its Subsidiaries may
maintain self insurance plans to the extent companies of similar
size and in similar businesses do so.
Section 5.6 Inspection of Property; Books and Records;
Discussions.
Keep proper books of records and account in which full, true and
correct entries in conformity with GAAP and all Requirements of Law shall
be made of all dealings and transactions in relation to its businesses
and activities; and except as limited by the Credit Agreement or any
Confidentiality Agreement executed by any Lender, permit, during regular
business hours and upon reasonable notice by the Administrative Agent or
any Lender, the Administrative Agent or any Lender to visit and inspect
any of its properties and examine and make abstracts from any of its
books and records (other than materials protected by the attorney-client
privilege and materials which the Borrower may not disclose without
violation of a confidentiality obligation binding upon it) at any
reasonable time and as often as may reasonably be desired, and to discuss
the business, operations, properties and financial and other condition
of the Borrower and its Subsidiaries with officers and employees of the
Borrower and its Subsidiaries and with its independent certified public
accountants.
Section 5.7 Notices.
Give prompt notice in writing to the Administrative Agent (which
shall promptly transmit such notice to each Lender) of:
(a) the occurrence of any Default or Event of Default;
(b) the occurrence of any default or event of default under
any Contractual Obligation of the Borrower or any of its
Subsidiaries which could reasonably be expected to have a Material
Adverse Effect;
(c) any litigation, or any investigation or proceeding known
to the Borrower or any of its Subsidiaries, affecting the Borrower
or any of its Subsidiaries which, if adversely determined, could
reasonably be expected to have a Material Adverse Effect;
(d) (i) the occurrence or expected occurrence of any
Reportable Event with respect to any Plan, a failure to make any
required contribution to a Plan, the creation of any Lien in favor
of the PBGC (other than a Permitted Lien) or a Plan or any
withdrawal from, or the termination, Reorganization or Insolvency
of, any Multiemployer Plan or (ii) the institution of proceedings
or the taking of any other action by the PBGC, any Credit Party, any
Commonly Controlled Entity or any Multiemployer Plan with respect
to the withdrawal from, or the terminating, Reorganization or
Insolvency of, any Plan; and
(e) any other development or event which could reasonably be
expected to have a Material Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a statement
of a Responsible Officer setting forth details of the occurrence referred
to therein and stating what action the Credit Parties propose to take
with respect thereto. In the case of any notice of a Default or Event
of Default, the Borrower shall specify that such notice is a Default or
Event of Default notice on the face thereof.
Section 5.8 Financial Covenants.
Commencing on the day immediately following the Closing Date, the
Borrower shall, and shall cause each of its Subsidiaries to, comply with
the following financial covenants:
(a) Leverage Ratio. The Leverage Ratio, as of the last day
of each fiscal quarter of the Borrower, shall be less than or equal
to 3.25 to 1.0.
(b) Interest Coverage Ratio. The Interest Coverage Ratio,
as of the last day of each fiscal quarter of the Borrower, shall be
greater than or equal to 3.0 to 1.0.
Section 5.9 Additional Subsidiary Guarantors.
The Credit Parties will cause each of their Domestic
Subsidiaries, whether newly formed, after acquired or otherwise
existing (except as to certain Subsidiaries existing as of the date
hereof which are expressly prohibited by a Contractual Obligation from
guaranteeing the Credit Party Obligations and except for non-wholly
owned Subsidiaries of the Borrower which are designated by the
Borrower from time to time), to promptly become a Guarantor hereunder
by way of execution of a Joinder Agreement.
Section 5.10 Compliance with Law.
The Borrower will, and will cause each of its Subsidiaries to,
comply with all laws, rules, regulations and orders, and all
applicable restrictions imposed by all Governmental Authorities Law
(including without limitation, Environmental Laws), applicable to it
and its Property if noncompliance with any such law, rule, regulation,
order or restriction could reasonably be expected to have a Material
Adverse Effect.
Section 5.11 Year 2000 Compliance.
The Borrower will promptly notify the Administrative Agent in the
event that it discovers or determines that any computer application
(including those of its suppliers, vendors and customers) that is
material to its or any of its Subsidiaries' business and operations
(taken as a whole) will not be Year 2000 Compliant, except to the extent
that such failure could not reasonably be expected to have a Material
Adverse Effect.
Section 5.12 Penske Acquisitions.
As soon as practicable, but in any event within ten (10) Business
Days after the Closing Date, the Borrower shall have caused each of
the wholly-owned entities acquired in connection with the Penske
Acquisitions to have become a Guarantor hereunder by way of execution
of a Joinder Agreement and the Borrower shall have delivered all other
documentation required hereunder and as reasonably requested by the
Administrative Agent relating thereto.
ARTICLE VI
NEGATIVE COVENANTS
Each of the Credit Parties hereby covenants and agrees that on the
Closing Date, and thereafter for so long as this Credit Agreement is in
effect and until the Commitments have terminated, no Note remains
outstanding and unpaid and the Credit Party Obligations, together with
interest, Commitment Fees and all other amounts owing to the
Administrative Agent or any Lender hereunder, are paid in full, unless
the Required Lenders shall otherwise consent in writing, such Credit
Party will not, nor will it permit any of its Subsidiaries to, either
directly or indirectly:
Section 6.1 Indebtedness.
Incur, create, assume or permit to exist any other indebtedness or
liability on account of borrowed money, represented by any notes, bonds,
debentures or similar obligations, or on account of the deferred purchase
price of any property, or any other deposits, advance or progress
payments under contracts, except:
(a) Indebtedness arising or existing under this Credit
Agreement and the other Credit Documents;
(b) Indebtedness of the Borrower and its Subsidiaries
existing as of the Closing Date (and set forth in Schedule 6.1(b)
hereto) and renewals, refinancings and extensions thereof in a
principal amount not in excess of that outstanding as of the date
of such renewal, refinancing or extension;
(c) Indebtedness and obligations owing under Hedging
Agreements relating to the Loans hereunder and other Hedging
Agreements entered into in order to manage existing or anticipated
interest rate, exchange rate or commodity price risks and not for
speculative purposes;
(d) Indebtedness of the Borrower and its Subsidiaries
incurred after the Closing Date consisting of Capital Leases or
Indebtedness incurred to provide all or a portion of the purchase
price or cost of construction of an asset provided that (i) such
Indebtedness when incurred shall not exceed the purchase price or
cost of construction of such asset, (ii) no such Indebtedness shall
be refinanced for a principal amount in excess of the principal
balance outstanding thereon at the time of such refinancing and
(iii) with respect to any such Indebtedness exceeding five percent
(5%) of Total Shareholders' Equity (as of the date of the most
recent financial statements delivered to the Administrative Agent
and the Lenders pursuant to Section 5.1(a) or 5.1(b)), the Borrower
shall have delivered to the Administrative Agent a Pro Forma
Compliance Certificate demonstrating that, upon giving effect to the
incurrence of such Indebtedness on a Pro Forma Basis, the Leverage
Ratio shall be less than or equal to 3.25 to 1.0;
(e) Indebtedness evidenced by the Senior Notes;
(f) Indebtedness of the Borrower the repayment of which is
subordinated to the payment of the Indebtedness arising or existing
under this Credit Agreement and the other Credit Documents provided
the terms of such subordination and all other terms and provisions
relating to such Indebtedness (including, without limitation, the
terms relating to the interest rate, maturity, amortization and
covenants of such Indebtedness) are reasonably satisfactory to the
Required Lenders; and
(g) other unsecured Indebtedness of the Borrower; provided
that such Indebtedness is not senior in right of payment to the
payment of the Indebtedness arising or existing under this Credit
Agreement and the other Credit Documents and such Indebtedness does
not exceed ten percent (10%) of the Total Shareholders' Equity (as
shown on its most recent consolidated financial statements filed
with the SEC).
Section 6.2 Liens.
Contract, create, incur, assume or permit to exist any Lien with
respect to any of their respective property or assets of any kind
(whether real or personal, tangible or intangible), whether now owned or
hereafter acquired, except for Permitted Liens.
Section 6.3 Nature of Business.
Alter the character of their business in any material respect from
that conducted as of the Closing Date.
Section 6.4 Consolidation, Merger, Sale or Purchase of
Assets, etc.
(a) Dissolve, liquidate or wind up their affairs or enter
into any transaction of merger or consolidation; provided, however
that (i) the Borrower may merge or consolidate with any Subsidiary
so long as the Borrower shall be the continuing or surviving
corporation, (ii) any Domestic Subsidiary of the Borrower may be
merged with or into any other Domestic Subsidiary of the Borrower
(iii) the Borrower or any Subsidiary of the Borrower may merge with
any other Person in connection with a Permitted Acquisition if the
Borrower or such Subsidiary shall be the continuing or surviving
corporation.
(b) Make any Asset Dispositions (including, without
limitation, any Sale-Leaseback Transaction) other than (i) the sale
of inventory in the ordinary course of business for fair
consideration, (ii) the sale or disposition of machinery, equipment
and other assets no longer used or useful in the conduct of
Borrower's or any such Subsidiary's business, or (iii) such other
Asset Dispositions (excluding for purposes hereof, any sale or other
disposition of Capital Stock of a Credit Party), provided that (A)
the consideration for such assets disposed of represents the fair
market value of such assets at the time of such Asset Disposition;
and (B) the cumulative net book value of all Asset Dispositions by
the Borrower and any of its Subsidiaries during any single fiscal
year shall not exceed 15% of the Total Shareholders' Equity
determined as of the end of the most recently completed fiscal year;
(c) Acquire all or substantially all of the assets or
business of any Person except in connection with a Permitted
Acquisition.
Section 6.5 Advances, Investments and Loans.
Lend money or extend credit or make advances to any Person, or
purchase or acquire any stock, obligations or securities of, or any other
interest in, or make any capital contribution to, or otherwise make an
Investment in, any Person except for Permitted Investments; provided that
(a) immediately before and after giving effect to any Permitted
Investment, no Default or Event of Default shall exist and (b) with
respect to any Permitted Investment exceeding five percent (5%) of Total
Shareholders' Equity (as of the date of the most recent financial
statements delivered to the Administrative Agent and the Lenders pursuant
to Section 5.1(a) or 5.1(b)), the Borrower shall have delivered to the
Administrative Agent a Pro Forma Compliance Certificate demonstrating
that, upon giving effect to such Permitted Investment on a Pro Forma
Basis, the Borrower will be in compliance with all of the financial
covenants set forth in Section 5.8.
Section 6.6 Issuance of Subsidiary Equity Securities.
Issue, sell, transfer, pledge or otherwise dispose of any shares
of Capital Stock or other equity or ownership interests ("Equity
Interests") in any Subsidiary, except (a) in connection with the sale
of all of the Capital Stock of a Subsidiary pursuant to a transaction
permitted by Section 6.4(b), (b) the issuance, sale or transfer of
Equity Interests by a Subsidiary (the "Issuing Subsidiary") to the
Borrower or a Subsidiary of the Borrower that owns such Issuing
Subsidiary and (c) as needed to qualify directors under applicable
law.
Section 6.7 Transactions with Affiliates; Modification of
Documentation..
(a) Except as permitted in subsection (e) of the definition
of Permitted Investments, enter into or permit to exist any transaction
or series of transactions, whether or not in the ordinary course of
business, with any officer, director, shareholder, Subsidiary or
Affiliate other than (i) customary fees and expenses paid to directors,
(ii) where such transactions are on terms and conditions substantially
as favorable as would be obtainable in a comparable arm's-length
transaction with a Person other than an officer, director, shareholder,
Subsidiary or Affiliate, (iii) the Homestead Keepwell Agreement and the
Chicago Agreements and (iv) provided that no Default or Event of Default
shall result therefrom, transactions involving payments to the France
family individually (or family-related entities controlled by France
family members) or to NASCAR in the ordinary course of business in
accordance with past practices of the Credit Parties.
(b) Permit the Borrower or any Subsidiary to, if any Default
or Event of Default has occurred and is continuing or would be
directly or indirectly caused as a result thereof, after the
issuance thereof, amend or modify (or permit the amendment or
modification of) any of the terms of any Indebtedness if such
amendment or modification would add or change any terms in a manner
adverse to the issuer of such Indebtedness, or shorten the final
maturity or average life to maturity or require any payment to be
made sooner than originally scheduled or increase the interest rate
applicable thereto or change any subordination provision thereof
Section 6.8 Fiscal Year; Accounting Method; Organizational
Documents.
Unless required by applicable law, change its fiscal year or method
of accounting or amend, modify or change its articles of incorporation
in any manner adverse to the Lenders (or corporate charter or other
similar organizational document) or bylaws (or other similar document)
without the prior written consent of the Required Lenders.
Section 6.9 Limitation on Restricted Actions.
Except as set forth on Schedule 6.9, create or permit to exist
any restriction of any kind on the ability of any Subsidiary to (a)
pay dividends or make any other distributions to the Borrower or any
of its Subsidiaries, (b) pay Indebtedness owed to the Borrower or any
of its Subsidiaries, (c) make loans or advances to the Borrower or any
of its Subsidiaries or (d) transfer any of its properties or assets to
the Borrower or any of its Subsidiaries.
Section 6.10 Extraordinary Dividends and Other Payments.
(a) Directly or indirectly purchase, redeem or otherwise retire
any Capital Stock in advance of a regularly scheduled date for such
retirement, or apply or set apart any of its assets therefor, other
than repurchases, redemptions or retirements in connection with the
Borrower's long-term incentive compensation plans approved by the
Borrower's shareholders and on file with the SEC, (b) make any other
extraordinary distribution (by reduction of capital or otherwise) in
respect of any such Capital Stock (other than ordinary dividends and
transfers expressly contemplated herein), or agree to do any of the
foregoing, (c) open market repurchases of Capital Stock of the
Borrower in an aggregate amount during the term of this Agreement not
to exceed 10% of Total Shareholders' Equity (determined as of the date
of the most recent financial statements delivered pursuant to Section
5.1(a) and 5.1(b)) or (d) make any loan or other payment (other than
(i) salary and other payments expressly permitted herein, (ii)
payments of Indebtedness permitted by Section 6.1, (iii) payments
owing under the Homestead Keepwell Agreement and the Chicago
Agreements and (iv) payments owing to any Affiliate).
Section 6.11 Major Motorsports Events.
Voluntarily change the scope and magnitude of major motorsports
events conducted at facilities controlled by the Borrower or any of its
Subsidiaries except to the extent that any such change could not
reasonably be expected to have a Material Adverse Effect.
ARTICLE VII
EVENTS OF DEFAULT
Section 7.1 Events of Default.
An Event of Default shall exist upon the occurrence of any of the
following specified events (each an "Event of Default"):
(a) The Borrower shall fail to pay any principal on any Note
when due in accordance with the terms thereof or hereof; or the
Borrower shall fail to reimburse the Issuing Lender for any LOC
Obligations within two Business Days after such LOC Obligations
become due in accordance with the terms hereof; or the Borrower
shall fail to pay any interest on any Note or any fee or other
amount payable hereunder when due in accordance with the terms
thereof or hereof; or any Guarantor shall fail to pay on the
Guaranty in respect of any of the foregoing or in respect of any
other Guaranty Obligations hereunder; or
(b) Any representation or warranty made or deemed made herein
or in any of the other Credit Documents or which is contained in any
certificate, document or financial or other statement furnished at
any time under or in connection with this Credit Agreement shall
prove to have been incorrect, false or misleading in any material
respect on or as of the date made or deemed made or reaffirmed; or
(c) (i) Any Credit Party shall fail to perform, comply with
or observe any term, covenant or agreement applicable to it
contained in Section 5.7(a), Section 5.8 or Article VI hereof; or
(ii) any Credit Party shall fail to comply with any other covenant
contained in this Credit Agreement or the other Credit Documents or
any other agreement, document or instrument among any Credit Party,
the Administrative Agent and the Lenders or executed by any Credit
Party in favor of the Administrative Agent or the Lenders (other
than as described in Sections 7.1(a) or 7.1(c)(i) above), and in the
event such breach or failure to comply is capable of cure, is not
cured within thirty (30) days of its occurrence; or
(d) The occurrence of an event of default under the Homestead
Keepwell Agreement or any Chicago Agreement; or
(e) The Borrower or any of its Subsidiaries shall (i) default
in any payment of principal of or interest on any Indebtedness in
a principal amount outstanding of at least $5,000,000 in the
aggregate for the Borrower and any of its Subsidiaries beyond the
period of grace (not to exceed 30 days), if any, provided in the
instrument or agreement under which such Indebtedness was created;
or (ii) default in the observance or performance of any other
agreement or condition relating to any Indebtedness in a principal
amount outstanding of at least $5,000,000 in the aggregate for the
Borrower and its Subsidiaries or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other
event shall occur or condition exist, the effect of which default
or other event or condition is to cause, or to permit the holder or
holders of such Indebtedness or beneficiary or beneficiaries of such
Indebtedness (or a trustee or agent on behalf of such holder or
holders or beneficiary or beneficiaries) to cause, with the giving
of notice if required, such Indebtedness to become due prior to its
stated maturity; or
(f) (i) The Borrower or any of its Subsidiaries shall
commence any case, proceeding or other action (A) under any existing
or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking
to have an order for relief entered with respect to it, or seeking
to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian, conservator
or other similar official for it or for all or any substantial part
of its assets, or the Borrower or any Subsidiary shall make a
general assignment for the benefit of its creditors; or (ii) there
shall be commenced against the Borrower or any Subsidiary any case,
proceeding or other action of a nature referred to in clause (i)
above which (A) results in the entry of an order for relief or any
such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 60 days; or (iii) there
shall be commenced against the Borrower or any Subsidiary any case,
proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or
any substantial part of its assets which results in the entry of an
order for any such relief which shall not have been vacated,
discharged, or stayed or bonded pending appeal within 60 days from
the entry thereof; or (iv) the Borrower or any Subsidiary shall take
any action in furtherance of, or indicating its consent to, approval
of, or acquiescence in, any of the acts set forth in clause (i),
(ii) or (iii) above; or (v) the Borrower or any Subsidiary shall
generally not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due; or
(g) One or more judgments or decrees shall be entered against
the Borrower or any of its Subsidiaries involving in the aggregate
a liability (to the extent not paid when due or covered by
insurance) of $5,000,000 or more and all such judgments or decrees
shall not have been paid and satisfied, vacated, discharged, stayed
or bonded pending appeal within 30 days from the entry thereof; or
(h) (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of
the Code) involving any Plan, (ii) any "accumulated funding
deficiency" (as defined in Section 302 of ERISA), whether or not
waived, shall exist with respect to any Plan or any Lien in favor
of the PBGC or a Plan (other than a Permitted Lien) shall arise on
the assets of any Credit Party or any Commonly Controlled Entity,
(iii) a Reportable Event shall occur with respect to, or proceedings
shall commence to have a trustee appointed, or a trustee shall be
appointed, to administer or to terminate, any Single Employer Plan,
which Reportable Event or commencement of proceedings or appointment
of a Trustee is, in the reasonable opinion of the Required Lenders,
likely to result in the termination of such Plan for purposes of
Title IV of ERISA, (iv) any Single Employer Plan shall terminate for
purposes of Title IV of ERISA, (v) any Credit Party or any Commonly
Controlled Entity shall, or in the reasonable opinion of the
Required Lenders is likely to, incur any liability in connection
with a withdrawal from, or the Insolvency or Reorganization of, any
Multiemployer Plan or (vi) any other similar event or condition
shall occur or exist with respect to a Plan; and in each case in
clauses (i) through (vi) above, such event or condition, together
with all other such events or conditions, if any, could have a
Material Adverse Effect; or
(i) (i) the France Family shall fail to own capital stock of
the Borrower which represents a majority of the voting power of the
Borrower or (ii) during any period of up to 24 consecutive months,
commencing after the Closing Date, individuals who at the beginning
of such 24 month period were directors of the Borrower (together
with any new director whose election by the Borrower's Board of
Directors or whose nomination for election by the Borrower's
shareholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the
beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to
constitute a majority of the directors of the Borrower then in
office; or
(j) The Guaranty or any provision thereof shall cease to be
in full force and effect or any Guarantor or any Person acting by
or on behalf of any Guarantor shall deny or disaffirm any
Guarantor's obligations under the Guaranty; or
(k) Any other Credit Document shall fail to be in full force
and effect or to give the Administrative Agent and/or the Lenders
the 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); or
(l) There shall occur and be continuing any Event of Default
under and as defined in Senior Note Indenture or the Credit Party
Obligations shall cease to be classified as "senior indebtedness"
under the Senior Note Indenture.
Section 7.2 Acceleration; Remedies.
Upon the occurrence of an Event of Default, then, and in any such
event, (a) if such event is an Event of Default specified in Section
7.1(f) above, automatically the Commitments shall immediately terminate
and the Loans (with accrued interest thereon), and all other amounts
under the Credit Documents (including without limitation the maximum
amount of all contingent liabilities under Letters of Credit) shall
immediately become due and payable, and (b) if such event is any other
Event of Default, either or both of the following actions may be taken:
(i) with the written consent of the Required Lenders, the Administrative
Agent may, or upon the written request of the Required Lenders, the
Administrative Agent shall, by notice to the Borrower declare the
Commitments to be terminated forthwith, whereupon the Commitments shall
immediately terminate; and (ii) with the written consent of the Required
Lenders, the Administrative Agent may, or upon the written request of the
Required Lenders, the Administrative Agent shall, by notice of default
to the Borrower, declare the Loans (with accrued interest thereon) and
all other amounts owing under this Credit Agreement and the Notes to be
due and payable forthwith and direct the Borrower to pay to the
Administrative Agent cash collateral as security for the LOC Obligations
for subsequent drawings under then outstanding Letters of Credit an
amount equal to the maximum amount of which may be drawn under Letters
of Credit then outstanding, whereupon the same shall immediately become
due and payable.
ARTICLE VIII
THE AGENT
Section 8.1 Appointment.
Each Lender hereby irrevocably designates and appoints First Union
National Bank as the Administrative Agent of such Lender under this
Credit Agreement, and each such Lender irrevocably authorizes First Union
National Bank, as the Administrative Agent for such Lender, to take such
action on its behalf under the provisions of this Credit Agreement and
to exercise such powers and perform such duties as are expressly
delegated to the Administrative Agent by the terms of this Credit
Agreement, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere in this
Credit Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any
fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be
read into this Credit Agreement or otherwise exist against the
Administrative Agent.
Section 8.2 Delegation of Duties.
The Administrative Agent may execute any of its duties under this
Credit Agreement by or through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such
duties. The Administrative Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by
it with reasonable care. Without limiting the foregoing, the
Administrative Agent may appoint one of its affiliates as its agent to
perform the functions of the Administrative Agent hereunder relating to
the advancing of funds to the Borrower and distribution of funds to the
Lenders and to perform such other related functions of the Administrative
Agent hereunder as are reasonably incidental to such functions.
Section 8.3 Exculpatory Provisions.
Neither the Administrative Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates shall be (a) liable
for any action lawfully taken or omitted to be taken by it or such Person
under or in connection with this Credit Agreement (except for its or such
Person's own gross negligence or willful misconduct) or (b) responsible
in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by any of the Credit Parties or any
officer thereof contained in this Credit Agreement or in any certificate,
report, statement or other document referred to or provided for in, or
received by the Administrative Agent under or in connection with, this
Credit Agreement or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of any of the Credit Documents or for any
failure of any of the Credit Parties to perform its obligations hereunder
or thereunder. The Administrative Agent shall not be under any
obligation to any Lender to ascertain or to inquire as to the observance
or performance by the Credit Parties of any of the agreements contained
in, or conditions of, this Credit Agreement, or to inspect the
properties, books or records of the Credit Parties.
Section 8.4 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,
consent, certificate, affidavit, letter, cablegram, telegram, telecopy,
telex or teletype message, statement, order or other document or
conversation believed by it in good faith to be genuine and correct and
to have been signed, sent or made by the proper Person or Persons and
upon advice and statements of legal counsel (including, without
limitation, counsel to the Credit Parties), independent accountants and
other experts selected by the Administrative Agent. The Administrative
Agent may deem and treat the payee of any Note as the owner thereof for
all purposes unless (a) a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Administrative Agent and
(b) the Administrative Agent shall have received the written agreement
of such assignee to be bound hereby as fully and to the same extent as
if such assignee were an original Lender party hereto, in each case in
form satisfactory to the Administrative Agent. The Administrative Agent
shall be fully justified in failing or refusing to take any action under
this Credit Agreement unless it shall first receive such advice or
concurrence of the Required Lenders as it deems appropriate or it shall
first be indemnified to its satisfaction by the Lenders against any and
all liability and expense which may be incurred by it by reason of taking
or continuing to take any such action. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting,
under any of the Credit Documents in accordance with a request of the
Required Lenders or all of the Lenders, as may be required under this
Credit Agreement, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders and all future
holders of the Notes.
Section 8.5 Notice of Default.
The Administrative Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder
unless the Administrative Agent has received notice from a Lender or a
Credit Party referring to this Credit Agreement, describing such Default
or Event of Default and stating that such notice is a "notice of
default". In the event that the Administrative Agent receives such a
notice, the Administrative Agent shall give prompt notice thereof to the
Lenders. The Administrative Agent shall take such action with respect
to such Default or Event of Default as shall be reasonably directed by
the Required Lenders; provided, however, that unless and 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 in the best interests of
the Lenders except to the extent that this Credit Agreement expressly
requires that such action be taken, or not taken, only with the consent
or upon the authorization of the Required Lenders, or all of the Lenders,
as the case may be.
Section 8.6 Non-Reliance on Administrative Agent and Other
Lenders.
Each Lender expressly acknowledges that neither the Administrative
Agent nor any of its officers, directors, employees, agents, attorneys-
in-fact or affiliates has made any representation or warranty to it and
that no act by the Administrative Agent hereinafter taken, including any
review of the affairs of the Credit Parties, shall be deemed to
constitute any representation or warranty by the Administrative Agent to
any Lender. Each Lender represents to the Administrative Agent that it
has, independently and without reliance upon the Administrative Agent or
any other Lender, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of the Credit Parties and made its own decision to make
its Loans hereunder and enter into this Credit Agreement. Each Lender
also represents that it will, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make
its own credit analysis, appraisals and decisions in taking or not taking
action under this Credit Agreement, and to make such investigation as it
deems necessary to inform itself as to the business, operations,
property, financial and other condition and creditworthiness of the
Credit Parties. Except for notices, reports and other documents
expressly required to be furnished to the Lenders by the Administrative
Agent hereunder, the Administrative Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Credit Parties which may
come into the possession of the Administrative Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates.
Section 8.7 Indemnification.
The Lenders agree to indemnify the Administrative Agent in its
capacity hereunder (to the extent not reimbursed by the Credit Parties
and without limiting the obligation of the Credit Parties to do so),
ratably according to their respective Commitment Percentages in effect
on the date on which indemnification is sought under this Section, from
and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever which may at any time (including, without
limitation, at any time following the payment of the Notes) be imposed
on, incurred by or asserted against the Administrative Agent in any way
relating to or arising out of any Credit Document or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the
Administrative Agent under or in connection with any of the foregoing;
provided, however, that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements to the extent
resulting from the Agent's gross negligence or willful misconduct, as
determined by a court of competent jurisdiction. The agreements in this
Section 8.7 shall survive the termination of this Credit Agreement and
payment of the Notes and all other amounts payable hereunder.
Section 8.8 Administrative Agent in Its Individual Capacity.
The Administrative Agent and its affiliates may make loans to,
accept deposits from and generally engage in any kind of business with
the Credit Parties as though the Administrative Agent were not the
Administrative Agent hereunder. With respect to its Loans made or
renewed by it and any Note issued to it, the Administrative Agent shall
have the same rights and powers under this Credit Agreement as any Lender
and may exercise the same as though it were not the Administrative Agent,
and the terms "Lender" and "Lenders" shall include the Administrative
Agent in its individual capacity.
Section 8.9 Successor Administrative Agent.
The Administrative Agent may resign as Administrative Agent upon 30
days' prior notice to the Borrower and the Lenders. If the
Administrative Agent shall resign as Administrative Agent under this
Credit Agreement and the Notes, then the Required Lenders shall appoint
from among the Lenders a successor agent for the Lenders, which successor
agent shall be approved by the Borrower, whereupon such successor agent
shall succeed to the rights, powers and duties of the Administrative
Agent, and the term "Administrative Agent" shall mean such successor
agent effective upon such appointment and approval, and the former
Agent's rights, powers and duties as Administrative Agent shall be
terminated, without any other or further act or deed on the part of such
former Administrative Agent or any of the parties to this Credit
Agreement or any holders of the Notes. After any retiring Agent's
resignation as Administrative Agent, the provisions of this Section 8.9
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.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Amendments and Waivers.
Neither this Credit Agreement, nor any of the Notes, nor any of the
other Credit Documents, nor any terms hereof or thereof may be amended,
supplemented, waived or modified except in accordance with the provisions
of this Section nor may be released except as specifically provided
herein or in accordance with the provisions of this Section 9.1. The
Required Lenders may, or, with the written consent of the Required
Lenders, the Administrative Agent may, from time to time, (a) enter into
with the Credit Parties written amendments, supplements or modifications
hereto and to the other Credit Documents for the purpose of adding any
provisions to this Credit Agreement or the other Credit Documents or
changing in any manner the rights of the Lenders or of the Credit Parties
hereunder or thereunder or (b) waive, on such terms and conditions as the
Required Lenders may specify in such instrument, any of the requirements
of this Credit Agreement or the other Credit Documents or any Default or
Event of Default and its consequences; provided, however, that no such
waiver and no such amendment, waiver, supplement, modification or release
shall:
(i) reduce the amount or extend the scheduled date of
maturity of any Loan or Note or any installment thereon, or
reduce the stated rate of any interest or fee payable
hereunder (other than interest at the increased post-default
rate) or extend the scheduled date of any payment thereof or
increase the amount or extend the expiration date of any
Lender's Commitment, in each case without the written consent
of each Lender directly affected thereby, or
(ii) amend, modify or waive any provision of this
Section 9.1 or reduce the percentage specified in the
definition of Required Lenders or release all or substantially
all of the Guarantors from their obligations hereunder,
without the written consent of all the Lenders, or
(iii) amend, modify or waive any provision of
Article VIII without the written consent of the then
Administrative Agent, or
(iv) amend, modify or waive any provision of the Credit
Documents requiring consent, approval or request of the
Required Lenders or all Lenders, without the written consent
of the Required Lenders or all of the Lenders as the case may
be and, provided, further, that no amendment, waiver or
consent affecting the rights or duties of the Administrative
Agent or the Issuing Lender under any Credit Document shall in
any event be effective, unless in writing and signed by the
Administrative Agent and/or the Issuing Lender, as applicable,
in addition to the Lenders required hereinabove to take such
action.
Any such waiver, any such amendment, supplement or modification and
any such release shall apply equally to each of the Lenders and shall be
binding upon the Credit Parties, the Lenders, the Administrative Agent
and all future holders of the Notes. In the case of any waiver, the
Credit Parties, the Lenders and the Administrative Agent shall be
restored to their former position and rights hereunder and under the
outstanding Loans and Notes and other Credit Documents, and any Default
or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other
Default or Event of Default, or impair any right consequent thereon.
Notwithstanding any of the foregoing to the contrary, the consent
of the Credit Parties shall not be required for any amendment,
modification or waiver of the provisions of Article VIII (other than the
provisions of Section 8.9); provided, however, that the Administrative
Agent will provide written notice to the Credit Parties of any such
amendment, modification or waiver. In addition, the Credit Parties and
the Lenders hereby authorize the Administrative Agent to modify this
Credit Agreement by unilaterally amending or supplementing Schedule
2.1(a) from time to time in the manner requested by any Credit Party, 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 Credit Parties and each Lender.
Notwithstanding the fact that the consent of all the Lenders is
required in certain circumstances as set forth above, (x) each Lender is
entitled to vote as such Lender sees fit on any bankruptcy reorganization
plan that affects the Loans, and each Lender acknowledges that the
provisions of Section 1126(c) of the Bankruptcy Code supersedes the
unanimous consent provisions set forth herein and (y) the Required
Lenders may consent to allow a Credit Party to use cash collateral in the
context of a bankruptcy or insolvency proceeding.
Section 9.2 Notices.
Except as otherwise provided in Article II, all notices, requests
and demands to or upon the respective parties hereto to be effective
shall be in writing (including by telecopy), and, unless otherwise
expressly provided herein, shall be deemed to have been duly given or
made (a) when delivered by hand, (b) when transmitted via telecopy (or
other facsimile device) to the number set out herein, (c) the day
following the day on which the same has been delivered prepaid (or
pursuant to an invoice arrangement) to a reputable national overnight air
courier service, or (d) the third Business Day following the day on which
the same is sent by certified or registered mail, postage prepaid, in
each case addressed to the respective parties hereto as set forth on
Schedule 9.2, or to such other address as may be hereafter notified by
the respective parties hereto and any future holders of the Notes:
Section 9.3 No Waiver; Cumulative Remedies.
No failure to exercise and no delay in exercising, on the part of
the Administrative Agent or any Lender, any right, remedy, power or
privilege hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise
of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.
Section 9.4 Survival of Representations and Warranties.
All representations and warranties made hereunder and in any
document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this
Credit Agreement and the Notes and the making of the Loans, provided that
all such representations and warranties shall terminate on the date upon
which the Commitments have been terminated and all amounts owing
hereunder and under any Notes have been paid in full.
Section 9.5 Payment of Expenses and Taxes.
The Borrower agrees (a) to pay or reimburse the Administrative Agent
for all its reasonable out-of-pocket costs and expenses incurred in
connection with the development, preparation, negotiation, printing and
execution of, and any amendment, supplement or modification to, this
Credit Agreement and the other Credit Documents and any other documents
prepared in connection herewith or therewith, and the consummation and
administration of the transactions contemplated hereby and thereby,
together with the reasonable fees and disbursements of counsel to the
Administrative Agent, (b) to pay or reimburse each Lender and the
Administrative Agent for all its costs and expenses incurred in
connection with the enforcement or preservation of any rights under this
Credit Agreement, the Notes and any such other documents, including,
without limitation, the reasonable fees and disbursements of counsel to
the Administrative Agent and to the Lenders (including reasonable
allocated costs of in-house legal counsel), and (c) on demand, to pay,
indemnify, and hold each Lender and the Administrative Agent harmless
from, any and all recording and filing fees and any and all liabilities
with respect to, or resulting from any delay in paying, stamp, excise and
other similar taxes, if any, which may be payable or determined to be
payable in connection with the execution and delivery of, or consummation
or administration of any of the transactions contemplated by, or any
amendment, supplement or modification of, or any waiver or consent under
or in respect of, the Credit Documents and any such other documents, and
(d) to pay, indemnify, and hold each Lender and the Administrative Agent
and their Affiliates harmless from and against, any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever
with respect to the execution, delivery, enforcement, performance and
administration of the Credit Documents and any such other documents and
the use, or proposed use, of proceeds of the Loans (all of the foregoing,
collectively, the "indemnified liabilities"); provided, however, that the
Borrower shall not have any obligation hereunder to the Administrative
Agent or any Lender with respect to indemnified liabilities arising from
the gross negligence or willful misconduct of the Administrative Agent
or such Lender, as the case may be, as determined by a court of competent
jurisdiction. The agreements in this Section 9.5 shall survive repayment
of the Loans, Notes and all other amounts payable hereunder.
Section 9.6 Successors and Assigns; Participations;
Purchasing Lenders.
(a) This Credit Agreement shall be binding upon and inure to
the benefit of the Credit Parties, the Lenders, the Administrative
Agent, all future holders of the Notes and their respective
successors and assigns, except that the Credit Parties may not
assign or transfer any of its rights or obligations under this
Credit Agreement or the other Credit Documents without the prior
written consent of each Lender.
(b) Any Lender may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time
sell to one or more banks or other entities ("Participants")
participating interests in any Loan owing to such Lender, any Note
held by such Lender, any Commitment of such Lender, or any other
interest of such Lender hereunder, in each case in minimum amounts
of $5,000,000 (or, if such participation is to an Affiliate of such
Lender, such lesser amount as agreed to by the Borrower). In the
event of any such sale by a Lender of participating interests to a
Participant, such Lender's obligations under this Credit Agreement
to the other parties to this Credit Agreement shall remain
unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any such
Note for all purposes under this Credit Agreement, and the Credit
Parties and the Administrative Agent shall continue to deal solely
and directly with such Lender in connection with such Lender's
rights and obligations under this Credit Agreement. No Lender shall
transfer or grant any participation under which the Participant
shall have rights to approve any amendment to or waiver of this
Credit Agreement or any other Credit Document except to the extent
such amendment or waiver would (i) extend the scheduled maturity of
any Loan or Note or any installment thereon in which such
Participant is participating, or reduce the stated rate or extend
the time of payment of interest or fees thereon (except in
connection with a waiver of interest at the increased post-default
rate) or reduce the principal amount thereof, or increase the amount
of the Participant's participation over the amount thereof then in
effect (it being understood that a waiver of any Default or Event
of Default shall not constitute a change in the terms of such
participation, and that an increase in any Commitment or Loan shall
be permitted without consent of any participant if the Participant's
participation is not increased as a result thereof), (ii) release
all or substantially all of the Guarantors from their obligations
under the Guaranty or (iii) consent to the assignment or transfer
by the Borrower of any of its rights and obligations under this
Credit Agreement. In the case of any such participation, the
Participant shall not have any rights under this Credit Agreement
or any of the other Credit Documents (the Participant's rights
against such Lender in respect of such participation to be those set
forth in the agreement executed by such Lender in favor of the
Participant relating thereto) and all amounts payable by the
Borrower hereunder shall be determined as if such Lender had not
sold such participation, provided that each Participant shall be
entitled to the benefits of Sections 2.15, 2.16, 2.17 and 9.5 with
respect to its participation in the Commitments and the Loans
outstanding from time to time; provided, that no Participant shall
be entitled to receive any greater amount pursuant to such Sections
than the transferor Lender would have been entitled to receive in
respect of the amount of the participation transferred by such
transferor Lender to such Participant had no such transfer occurred.
(c) Any Lender may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time,
sell or assign to any Affiliate thereof or with the consent of the
Administrative Agent and, so long as no Event of Default or Default
that can be cured with the payment of money has occurred and is
continuing, the Borrower (which consent shall not be unreasonably
withheld or delayed), to one or more other Lenders, banks or
financial institutions ("Purchasing Lenders"), all or any part of
its rights and obligations under this Credit Agreement and the Notes
in minimum amounts of $5,000,000 with respect to its Revolving
Commitment and its Revolving Loans (or, if less, the entire amount
of such Lender's obligations), pursuant to a Commitment Transfer
Supplement, executed by such Purchasing Lender and such transferor
Lender (and the Administrative Agent and, so long as no Event of
Default or Default that can be cured with the payment of money has
occurred and is continuing, the Borrower), and delivered to the
Administrative Agent for its acceptance and recording in the
Register; provided, however, if the Borrower refuses to grant its
consent to any such sale or assignment and fails to obtain a
substitute purchaser reasonably satisfactory to the selling Lender
and the Administrative Agent within thirty (30) days after such
refusal, the Borrower shall be deemed to have granted its consent
to such sale or assignment. Upon such execution, delivery,
acceptance and recording, from and after the Transfer Effective Date
specified in such Commitment Transfer Supplement, (x) the Purchasing
Lender thereunder shall be a party hereto and, to the extent
provided in such Commitment Transfer Supplement, have the rights and
obligations of a Lender hereunder with a Commitment as set forth
therein, and (y) the transferor Lender thereunder shall, to the
extent provided in such Commitment Transfer Supplement, be released
from its obligations under this Credit Agreement (and, in the case
of a Commitment Transfer Supplement covering all or the remaining
portion of a transferor Lender's rights and obligations under this
Credit Agreement, such transferor Lender shall cease to be a party
hereto). Such Commitment Transfer Supplement shall be deemed to
amend this Credit Agreement to the extent, and only to the extent,
necessary to reflect the addition of such Purchasing Lender and the
resulting adjustment of Commitment Percentages arising from the
purchase by such Purchasing Lender of all or a portion of the rights
and obligations of such transferor Lender under this Credit
Agreement and the Notes. On or prior to the Transfer Effective Date
specified in such Commitment Transfer Supplement, the Borrower shall
execute and deliver to the Administrative Agent in exchange for the
Notes delivered to the Administrative Agent pursuant to such
Commitment Transfer Supplement new Notes to the order of such
Purchasing Lender in an amount equal to the Commitment assumed by
it pursuant to such Commitment Transfer Supplement and, unless the
transferor Lender has not retained a Commitment hereunder, new Notes
to the order of the transferor Lender in an amount equal to the
Commitment retained by it hereunder. Such new Notes shall be dated
the Closing Date and shall otherwise be in the form of the Notes
replaced thereby. The Notes surrendered by the transferor Lender
shall be returned by the Administrative Agent to the Borrower marked
"canceled".
(d) The Administrative Agent shall maintain at its address
referred to in Section 9.2 a copy of each Commitment Transfer
Supplement delivered to it and a register (the "Register") for the
recordation of the names and addresses of the Lenders and the
Commitment of, and principal amount of the Loans owing to, each
Lender from time to time. The entries in the Register shall be
conclusive, in the absence of manifest error, and the Borrower, the
Administrative Agent and the Lenders may treat each Person whose
name is recorded in the Register as the owner of the Loan recorded
therein for all purposes of this Credit Agreement. The Register
shall be available for inspection by the Borrower or any Lender at
any reasonable time and from time to time upon reasonable prior
notice.
(e) Upon its receipt of a duly executed Commitment Transfer
Supplement, together with payment to the Administrative Agent by the
transferor Lender or the Purchasing Lender, as agreed between them,
of a registration and processing fee of $3,000 for each Purchasing
Lender listed in such Commitment Transfer Supplement and the Notes
subject to such Commitment Transfer Supplement, the Administrative
Agent shall (i) accept such Commitment Transfer Supplement, (ii)
record the information contained therein in the Register and (iii)
give prompt notice of such acceptance and recordation to the Lenders
and the Borrower.
(f) The Credit Parties authorize each Lender to disclose to
any Participant or Purchasing Lender (each, a "Transferee") and any
prospective Transferee any and all financial information in such
Lender's possession concerning the Credit Parties and their
Affiliates which has been delivered to such Lender by or on behalf
of the Borrower pursuant to this Credit Agreement or which has been
delivered to such Lender by or on behalf of the Credit Parties in
connection with such Lender's credit evaluation of the Credit
Parties and their Affiliates prior to becoming a party to this
Credit Agreement, in each case subject to Section 9.15 and in each
case subject to the prior consent of the Borrower, such consent not
to be unreasonably withheld.
(g) At the time of each assignment pursuant to this Section
9.6 to a Person which is not already a Lender hereunder and which
is not a United States person (as such term is defined in Section
7701(a)(30) of the Code) for Federal income tax purposes, the
respective assignee Lender shall provide to the Borrower and the
Administrative Agent the appropriate Internal Revenue Service Forms
(and, if applicable, a 2.17 Certificate) described in Section 2.17.
(h) Nothing herein shall prohibit any Lender from pledging
or assigning any of its rights under this Credit Agreement
(including, without limitation, any right to payment of principal
and interest under any Note) to any Federal Reserve Bank in
accordance with applicable laws.
Section 9.7 Adjustments; Set-off.
(a) Each Lender agrees that if any Lender (a "benefited
Lender") shall at any time receive any payment of all or part of its
Loans, or interest thereon, in respect thereof (whether voluntarily
or involuntarily, by set-off, pursuant to events or proceedings of
the nature referred to in Section 7.1(f), or otherwise) in a greater
proportion than any such payment to any other Lender, if any, in
respect of such other Lender's Loans, or interest thereon, such
benefited Lender shall purchase for cash from the other Lenders a
participating interest in such portion of each such other Lender's
Loan, as shall be necessary to cause such benefited Lender to share
the excess payment ratably with each of the Lenders; provided,
however, that if all or any portion of such excess payment or
benefits is thereafter recovered from such benefited Lender, such
purchase shall be rescinded, and the purchase price and benefits
returned, to the extent of such recovery, but without interest. The
Borrower agrees that each Lender so purchasing a portion of another
Lender's Loans may exercise all rights of payment (including,
without limitation, rights of set-off) with respect to such portion
as fully as if such Lender were the direct holder of such portion.
(b) In addition to any rights and remedies of the Lenders
provided by law (including, without limitation, other rights of set-
off), each Lender shall have the right, without prior notice to the
Credit Parties, any such notice being expressly waived by the Credit
Parties to the extent permitted by applicable law, upon the
occurrence of any Event of Default, to setoff and appropriate and
apply any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct
or indirect, absolute or contingent, matured or unmatured, at any
time held or owing by such Lender or any branch or agency thereof
to or for the credit or the account of any Credit Party, or any part
thereof in such amounts as such Lender may elect, against and on
account of the obligations and liabilities of the such Credit Party
to such Lender hereunder and claims of every nature and description
of such Lender against such Credit Party, in any currency, whether
arising hereunder, under the Notes or under any documents
contemplated by or referred to herein or therein, as such Lender may
elect, whether or not such Lender has made any demand for payment
and although such obligations, liabilities and claims may be
contingent or unmatured. The aforesaid right of set-off may be
exercised by such Lender against such Credit Party or against any
trustee in bankruptcy, debtor in possession, assignee for the
benefit of creditors, receiver or execution, judgment or attachment
creditor of such Credit Party, or against anyone else claiming
through or against such Credit Party or any such trustee in
bankruptcy, debtor in possession, assignee for the benefit of
creditors, receiver, or execution, judgment or attachment creditor,
notwithstanding the fact that such right of set-off shall not have
been exercised by such Lender prior to the occurrence of any Event
of Default. Each Lender agrees promptly to notify the applicable
Credit Party and the Administrative Agent after any such set-off and
application made by such Lender; provided, however, that the failure
to give such notice shall not affect the validity of such set-off
and application.
Section 9.8 Table of Contents and Section Headings.
The table of contents and the Section and subsection headings herein
are intended for convenience only and shall be ignored in construing this
Credit Agreement.
Section 9.9 Counterparts.
This Credit Agreement may be executed by one or more of the parties
to this Credit Agreement on any number of separate counterparts, and all
of said counterparts taken together shall be deemed to constitute one and
the same instrument. A set of the copies of this Credit Agreement signed
by all the parties shall be lodged with the Borrower and the
Administrative Agent.
Section 9.10 Effectiveness.
This Credit Agreement shall become effective on the date on which
all of the parties have signed a copy hereof (whether the same or
different copies) and shall have delivered the same to the Administrative
Agent pursuant to Section 9.2 or, in the case of the Lenders, shall have
given to the Administrative Agent written, telecopied or telex notice
(actually received) at such office that the same has been signed and
mailed to it.
Section 9.11 Severability.
Any provision of this Credit Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition
or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 9.12 Integration.
This Credit Agreement and the Notes represent the agreement of the
Credit Parties, the Administrative Agent and the Lenders with respect to
the subject matter hereof, and there are no promises, undertakings,
representations or warranties by the Administrative Agent, the Credit
Parties or any Lender relative to the subject matter hereof not expressly
set forth or referred to herein or in the Notes.
Section 9.13 Governing Law.
This Credit Agreement and the Notes and the rights and obligations
of the parties under this Credit Agreement and the Notes shall be
governed by, and construed and interpreted in accordance with, the law
of the State of North Carolina.
Section 9.14 Consent to Jurisdiction and Service of Process.
All judicial proceedings brought against any Credit Party with
respect to this Credit Agreement, any Note or any of the other Credit
Documents may be brought in any state or federal court of competent
jurisdiction in the State of North Carolina, and, by execution and
delivery of this Credit Agreement, each of the Credit Parties accepts,
for itself and in connection with its properties, generally and
unconditionally, the non-exclusive jurisdiction of the aforesaid courts
and irrevocably agrees to be bound by any final judgment rendered thereby
in connection with this Credit Agreement from which no appeal has been
taken or is available. Each of the Credit Parties irrevocably agrees
that all service of process in any such proceedings in any such court may
be effected by mailing a copy thereof by registered or certified mail (or
any substantially similar form of mail), postage prepaid, to it at its
address set forth in Section 9.2 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto, such
service being hereby acknowledged by each of the Credit Parties to be
effective and binding service in every respect. Each of the Credit
Parties, the Administrative Agent and the Lenders irrevocably waives any
objection, including, without limitation, any objection to the laying of
venue or based on the grounds of forum non conveniens which it may now
or hereafter have to the bringing of any such action or proceeding in any
such jurisdiction. Nothing herein shall affect the right to serve
process in any other manner permitted by law or shall limit the right of
any Lender to bring proceedings against any Credit Party in the court of
any other jurisdiction.
Section 9.15 Confidentiality.
The Administrative Agent and each Lender party to this Credit
Agreement as of the date hereof have each executed a Confidentiality
Agreement with the Borrower. Each Purchasing Lender agrees to execute
a Confidentiality Agreement with the Borrower in the same form as the
Confidentiality Agreement executed by its transferor Lender or in a
modified form acceptable to the Borrower. The Administrative Agent and
each of the Lenders agree it will use its best efforts not to disclose
without the prior consent of the Borrower (other than to its employees,
affiliates, auditors or counsel or to another Lender) any information
with respect to the Borrower and its Subsidiaries which is furnished
pursuant to this Credit Agreement, any other Credit Document or any
documents contemplated by or referred to herein or therein and which is
designated by the Borrower to the Lenders in writing as confidential or
as to which it is otherwise reasonably clear such information is not
public, except that any Lender may disclose any such information (a) as
has become generally available to the public other than by a breach of
this Section 9.15, (b) as may be required or appropriate in any report,
statement or testimony submitted to any municipal, state or federal
regulatory body having or claiming to have jurisdiction over such Lender
or to the Federal Reserve Board or the Federal Deposit Insurance
Corporation or the OCC or the NAIC or similar organizations (whether in
the United States or elsewhere) or their successors, (c) as may be
required or appropriate in response to any summons or subpoena or any
law, order, regulation or ruling applicable to such Lender, (d) to any
prospective Participant or assignee in connection with any contemplated
transfer pursuant to Section 9.6, provided that such prospective
transferee shall have been made aware of this Section 9.15 and shall have
agreed to be bound by its provisions as if it were a party to this Credit
Agreement or (e) to Gold Sheets and other similar bank trade
publications; such information to consist of deal terms and other
information regarding the credit facilities evidenced by this Credit
Agreement customarily found in such publications.
Section 9.16 Acknowledgments.
Each of the Credit Parties hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of each Credit Document;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to such Credit Party arising out
of or in connection with this Credit Agreement and the relationship
between Administrative Agent and Lenders, on one hand, and such
Credit Party, on the other hand, in connection herewith is solely
that of debtor and creditor; and
(c) no joint venture exists among the Lenders or among the
Borrower and the Lenders.
Section 9.17 Waivers of Jury Trial.
THE CREDIT PARTIES AND THE LENDERS HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TRIAL
BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR
ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
ARTICLE X
GUARANTY
Section 10.1 The Guaranty.
In order to induce the Lenders to enter into this Credit
Agreement and to extend credit hereunder and in recognition of the
direct benefits to be received by the Guarantors from the Extensions
of Credit hereunder, each of the Guarantors hereby agrees with the
Administrative Agent and the Lenders as follows: the Guarantor hereby
unconditionally and irrevocably jointly and severally guarantees as
primary obligor and not merely as surety the full and prompt payment
when due, whether upon maturity, by acceleration or otherwise, of any
and all indebtedness of the Borrower to the Administrative Agent and
the Lenders. If any or all of the indebtedness of the Borrower to the
Administrative Agent and the Lenders becomes due and payable
hereunder, each Guarantor unconditionally promises to pay such
indebtedness to the Administrative Agent and the Lenders, or order, on
demand, together with any and all reasonable expenses which may be
incurred by the Administrative Agent or the Lenders in collecting any
of the indebtedness. The word "indebtedness" is used in this Article
X in its most comprehensive sense and includes any and all advances,
debts, obligations and liabilities of the Borrower arising in
connection with this Credit Agreement, in each case, heretofore, now,
or hereafter made, incurred or created, whether voluntarily or
involuntarily, absolute or contingent, liquidated or unliquidated,
determined or undetermined, whether or not such indebtedness is from
time to time reduced, or extinguished and thereafter increased or
incurred, whether the Borrower may be liable individually or jointly
with others, whether or not recovery upon such indebtedness may be or
hereafter become barred by any statute of limitations, and whether or
not such indebtedness may be or hereafter become otherwise
unenforceable.
Notwithstanding any provision to the contrary contained herein or
in any other of the Credit Documents, to the extent the obligations of
a Guarantor shall be adjudicated to be invalid or unenforceable for
any reason (including, without limitation, because of any applicable
state or federal law relating to fraudulent conveyances or transfers)
then the obligations of each such Guarantor hereunder shall be limited
to the maximum amount that is permissible under applicable law
(whether federal or state and including, without limitation, the
Bankruptcy Code).
Section 10.2 Bankruptcy.
Additionally, each of the Guarantors unconditionally and
irrevocably guarantees jointly and severally the payment of any and
all indebtedness of the Borrower to the Lenders whether or not due or
payable by the Borrower upon the occurrence of any of the events
specified in Section 7.1(e), and unconditionally promises to pay such
indebtedness to the Administrative Agent for the account of the
Lenders, or order, on demand, in lawful money of the United States.
Each of the Guarantors further agrees that to the extent that the
Borrower or a Guarantor shall make a payment or a transfer of an
interest in any property to the Administrative Agent or any Lender,
which payment or transfer or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, or otherwise
is avoided, and/or required to be repaid to the Borrower or a
Guarantor, the estate of the Borrower or a Guarantor, a trustee,
receiver or any other party under any bankruptcy law, state or federal
law, common law or equitable cause, then to the extent of such
avoidance or repayment, the obligation or part thereof intended to be
satisfied shall be revived and continued in full force and effect as
if said payment had not been made.
Section 10.3 Nature of Liability.
The liability of each Guarantor hereunder is exclusive and
independent of any security for or other guaranty of the indebtedness
of the Borrower whether executed by any such Guarantor, any other
guarantor or by any other party, and no Guarantor's liability
hereunder shall be affected or impaired by (a) any direction as to
application of payment by the Borrower or by any other party, or (b)
any other continuing or other guaranty, undertaking or maximum
liability of a guarantor or of any other party as to the indebtedness
of the Borrower, or (c) any payment on or in reduction of any such
other guaranty or undertaking, or (d) any dissolution, termination or
increase, decrease or change in personnel by the Borrower, or (e) any
payment made to the Administrative Agent or the Lenders on the
indebtedness which the Administrative Agent or such Lenders repay the
Borrower pursuant to court order in any bankruptcy, reorganization,
arrangement, moratorium or other debtor relief proceeding, and each of
the Guarantors waives any right to the deferral or modification of its
obligations hereunder by reason of any such proceeding.
Section 10.4 Independent Obligation.
The obligations of each Guarantor hereunder are independent of
the obligations of any other guarantor or the Borrower, and a separate
action or actions may be brought and prosecuted against each Guarantor
whether or not action is brought against any other guarantor or the
Borrower and whether or not any other Guarantor or the Borrower is
joined in any such action or actions.
Section 10.5 Authorization.
Each of the Guarantors authorizes the Administrative Agent and
each Lender without notice or demand (except as shall be required by
applicable statute and cannot be waived), and without affecting or
impairing its liability hereunder, from time to time to (a) renew,
compromise, extend, increase, accelerate or otherwise change the time
for payment of, or otherwise change the terms of the indebtedness or
any part thereof in accordance with this Credit Agreement, including
any increase or decrease of the rate of interest thereon, (b) take and
hold security from any guarantor or any other party for the payment of
this Guaranty or the indebtedness and exchange, enforce waive and
release any such security, (c) apply such security and direct the
order or manner of sale thereof as the Administrative Agent and the
Lenders in their discretion may determine and (d) release or
substitute any one or more endorsers, guarantors, the Borrower or
other obligors.
Section 10.6 Reliance.
It is not necessary for the Administrative Agent or the Lenders
to inquire into the capacity or powers of the Borrower or the
officers, directors, members, partners or agents acting or purporting
to act on its behalf, and any indebtedness made or created in reliance
upon the professed exercise of such powers shall be guaranteed
hereunder.
Section 10.7 Waiver.
(a) Each of the Guarantors waives any right (except as
shall be required by applicable statute and cannot be waived) to
require the Administrative Agent or any Lender to (i) proceed
against the Borrower, any other guarantor or any other party,
(ii) proceed against or exhaust any security held from the
Borrower, any other guarantor or any other party, or (iii) pursue
any other remedy in the Administrative Agent's or any Lender's
power whatsoever. Each of the Guarantors waives any defense
based on or arising out of any defense of the Borrower, any other
guarantor or any other party other than payment in full of the
indebtedness, including without limitation any defense based on
or arising out of the disability of the Borrower, any other
guarantor or any other party, or the unenforceability of the
indebtedness or any part thereof from any cause, or the cessation
from any cause of the liability of the Borrower other than
payment in full of the indebtedness. Without limiting the
generality of the provisions of this Article X, each of the
Guarantors hereby specifically waives the benefits of N.C. Gen.
Stat. Section 26-7 through 26-9, inclusive. The Administrative Agent
or any of the Lenders may, at their election, foreclose on any
security held by the Administrative Agent or a Lender by one or
more judicial or nonjudicial sales, whether or not every aspect
of any such sale is commercially reasonable (to the extent such
sale is permitted by applicable law), or exercise any other right
or remedy the Administrative Agent and any Lender may have
against the Borrower or any other party, or any security, without
affecting or impairing in any way the liability of any Guarantor
hereunder except to the extent the indebtedness has been paid.
Each of the Guarantors waives any defense arising out of any such
election by the Administrative Agent and each of the Lenders,
even though such election operates to impair or extinguish any
right of reimbursement or subrogation or other right or remedy of
the Guarantors against the Borrower or any other party or any
security.
(b) Each of the Guarantors waives all presentments,
demands for performance, protests and notices, including without
limitation notices of nonperformance, notice of protest, notices
of dishonor, notices of acceptance of this Guaranty, and notices
of the existence, creation or incurring of new or additional
indebtedness. Each Guarantor assumes all responsibility for
being and keeping itself informed of the Borrower's financial
condition and assets, and of all other circumstances bearing upon
the risk of nonpayment of the indebtedness and the nature, scope
and extent of the risks which such Guarantor assumes and incurs
hereunder, and agrees that neither the Administrative Agent nor
any Lender shall have any duty to advise such Guarantor of
information known to it regarding such circumstances or risks.
(c) Each of the Guarantors hereby agrees it will not
exercise any rights of subrogation which it may at any time
otherwise have as a result of this Guaranty (whether contractual,
under Section 509 of the U.S. Bankruptcy Code, or otherwise) to
the claims of the Lenders against the Borrower or any other
guarantor of the indebtedness of the Borrower owing to the
Lenders (collectively, the "Other Parties") and all contractual,
statutory or common law rights of reimbursement, contribution or
indemnity from any Other Party which it may at any time otherwise
have as a result of this Guaranty until such time as the Loans
hereunder shall have been paid and the Commitments have been
terminated. Each of the Guarantors hereby further agrees not to
exercise any right to enforce any other remedy which the
Administrative Agent and the Lenders now have or may hereafter
have against any Other Party, any endorser or any other guarantor
of all or any part of the indebtedness of the Borrower and any
benefit of, and any right to participate in, any security or
collateral given to or for the benefit of the Lenders to secure
payment of the indebtedness of the Borrower until such time as
the Loans hereunder shall have been paid and the Commitments have
been terminated.
Section 10.8 Limitation on Enforcement.
The Lenders agree that this Guaranty may be enforced only by the
action of the Administrative Agent acting upon the instructions of the
Required Lenders and that no Lender shall have any right individually
to seek to enforce or to enforce this Guaranty, it being understood
and agreed that such rights and remedies may be exercised by the
Administrative Agent for the benefit of the Lenders under the terms of
this Credit Agreement. The Lenders further agree that this Guaranty
may not be enforced against any director, officer, employee or
stockholder of the Guarantors.
Section 10.9 Confirmation of Payment.
The Administrative Agent and the Lenders will, upon request after
payment of the indebtedness and obligations which are the subject of
this Guaranty and termination of the Commitments relating thereto,
confirm to the Borrower, the Guarantors or any other Person that such
indebtedness and obligations have been paid and the Commitments
relating thereto terminated, subject to the provisions of Section
10.2.
IN WITNESS WHEREOF, the parties hereto have caused this Credit Agreement
to be duly executed and delivered by its proper and duly authorized officers as
of the day and year first above written.
BORROWER: INTERNATIONAL SPEEDWAY CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Title: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Assistant Secretary
GUARANTORS: CHICAGO HOLDINGS, INC.
EVENT EQUIPMENT LEASING, INC.
EVENT SUPPORT CORPORATION
GREAT WESTERN SPORTS, INC.
MIAMI SPEEDWAY CORP.
NEW YORK INTERNATIONAL SPEEDWAY
CORPORATION
NORTH AMERICAN TESTING COMPANY
PHOENIX SPEEDWAY CORP.
SEASONAL SERVICES, INC.
SOUTH CAROLINA INTERNATIONAL SPEEDWAY
CORPORATION
▇▇▇▇▇▇▇ ▇▇▇▇ INTERNATIONAL, INC.
88 CORP.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Title: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Assistant Secretary
AMERICROWN SERVICE CORPORATION
ISC PROPERTIES, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Title: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Secretary
[Signature Pages Continue]
ADMINISTRATIVE AGENT
AND LENDERS: FIRST UNION NATIONAL BANK,
as Administrative Agent and as a Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Title: Senior Vice President
SUNTRUST BANK, SOUTH FLORIDA, N.A.,
By: /s/ W. ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Title: Vice President
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Title: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Vice President
CITICORP USA, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
---------------------------------
Title: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. Attorney-in-fact
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (the "First Amendment") dated as
of September 23, 1999, is to that Credit Agreement dated as of July 21, 1999 (as
may be subsequently amended and modified from time to time, the "Credit
Agreement"; terms used but not otherwise defined herein shall have the meanings
provided in the Credit Agreement), by and among INTERNATIONAL SPEEDWAY
CORPORATION, a Florida corporation (the "Borrower"), the Guarantors identified
therein, the several banks and other financial institutions identified therein
(the "Lenders") and FIRST UNION NATIONAL BANK, as agent for the Lenders
thereunder (in such capacity, the "Agent").
W I T N E S S E T H:
WHEREAS, the Lenders have established a $300,000,000 credit facility for
the benefit of the Borrower pursuant to the terms of the Credit Agreement;
WHEREAS, the Borrower wishes to amend the Credit Agreement to modify
certain provisions contained therein;
WHEREAS, the Required Lenders have agreed to the requested amendment on
the terms and conditions hereinafter set forth;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
A. The Credit Agreement is amended in the following respect:
1. The definition of "Revolving Commitment Termination Date" in
Section 1.1 of the Credit Agreement is hereby deleted in its entirety and
the following substituted therefor:
"Revolving Commitment Termination Date" shall mean March 31, 2004.
B. Except as modified hereby, all of the terms and provisions of the
Credit Agreement (and Exhibits) remain in full force and effect.
C. This First Amendment may be executed in any number of counterparts,
each of which when so executed and delivered shall be deemed an original and it
shall not be necessary in making proof of this First Amendment to produce or
account for more than one such counterpart.
D. This First Amendment and the Credit Agreement, as amended hereby,
shall be deemed to be contracts made under, and for all purposes shall be
construed in accordance with the laws of the State of North Carolina.
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this First Amendment to be duly executed and delivered as of the date and year
first above written.
BORROWER: INTERNATIONAL SPEEDWAY CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Title: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Assistant Secretary
GUARANTORS: CHICAGO HOLDINGS, INC.
EVENT EQUIPMENT LEASING, INC.
EVENT SUPPORT CORPORATION
GREAT WESTERN SPORTS, INC.
MIAMI SPEEDWAY CORP.
NEW YORK INTERNATIONAL SPEEDWAY
CORPORATION
NORTH AMERICAN TESTING COMPANY
PHOENIX SPEEDWAY CORP.
SEASONAL SERVICES, INC.
SOUTH CAROLINA INTERNATIONAL SPEEDWAY
CORPORATION
▇▇▇▇▇▇▇ ▇▇▇▇ INTERNATIONAL, INC.
88 CORP.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Title: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Assistant Secretary
AMERICROWN SERVICE CORPORATION
ISC PROPERTIES, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Title: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Secretary
[Signature Pages Continue]
ADMINISTRATIVE AGENT
AND LENDERS: FIRST UNION NATIONAL BANK,
as Administrative Agent and as a Lender
By: /s/ ▇▇▇▇ ▇▇▇▇▇
------------------------------------
Title: Vice President
SUNTRUST BANK, SOUTH FLORIDA, N.A.,
By: /s/ W. ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Title: Vice President
BANK ONE, NA
formerly known as
The First National Bank of Chicago
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Title: Officer
CITICORP USA, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
Title:
CONSENT
THIS CONSENT (the "Consent") dated as of October 5, 1999, is to that
Credit Agreement dated as of July 21, 1999 (as amended by that First Amendment
to Credit Agreement dated as of September 23, 1999 and as may be subsequently
amended and modified from time to time, the "Credit Agreement"; terms used but
not otherwise defined herein shall have the meanings provided in the Credit
Agreement), by and among INTERNATIONAL SPEEDWAY CORPORATION, a Florida
corporation (the "Borrower"), the Guarantors identified therein, the several
banks and other financial institutions identified therein (the "Lenders") and
FIRST UNION NATIONAL BANK, as agent for the Lenders thereunder (in such
capacity, the "Agent").
W I T N E S S E T H:
WHEREAS, the Lenders have established a $300,000,000 credit facility for
the benefit of the Borrower pursuant to the terms of the Credit Agreement;
WHEREAS, the Borrower wishes to increase the amount of Senior Notes which
the Borrower may issue pursuant to the terms of the Credit Agreement from
$200,000,000 to $225,000,000 and has requested that the Required Lenders consent
to such increase as provided for in the definition of "Senior Notes";
WHEREAS, the Required Lenders have agreed to increase the amount of Senior
Notes which the Borrower may issue to $225,000,000 on the terms and conditions
hereinafter set forth;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
A. Pursuant to the terms of the definition of "Senior Notes", the
Required Lenders hereby consent to the increase in the amount of Senior Notes
which the Borrower may issue from $200,000,000 to $225,000,000.
B. Except as modified hereby, all of the terms and provisions of the
Credit Agreement (and Exhibits) remain in full force and effect.
C. This Consent may be executed in any number of counterparts, each of
which when so executed and delivered shall be deemed an original and it shall
not be necessary in making proof of this Consent to produce or account for more
than one such counterpart.
D. This Consent and the Credit Agreement, as modified hereby, shall be
deemed to be contracts made under, and for all purposes shall be construed in
accordance with the laws of the State of North Carolina.
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this Consent to be duly executed and delivered as of the date and year first
above written.
BORROWER: INTERNATIONAL SPEEDWAY CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Title: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Assistant Secretary
GUARANTORS: CHICAGO HOLDINGS, INC.
EVENT EQUIPMENT LEASING, INC.
EVENT SUPPORT CORPORATION
GREAT WESTERN SPORTS, INC.
MIAMI SPEEDWAY CORP.
NEW YORK INTERNATIONAL SPEEDWAY
CORPORATION
NORTH AMERICAN TESTING COMPANY
PHOENIX SPEEDWAY CORP.
SEASONAL SERVICES, INC.
SOUTH CAROLINA INTERNATIONAL SPEEDWAY
CORPORATION
▇▇▇▇▇▇▇ ▇▇▇▇ INTERNATIONAL, INC.
88 CORP.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Title: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Assistant Secretary
AMERICROWN SERVICE CORPORATION
ISC PROPERTIES, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Title: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Secretary
[Signature Pages Continue]
ADMINISTRATIVE AGENT
AND LENDERS: FIRST UNION NATIONAL BANK,
as Administrative Agent and as a Lender
By: /s/ ▇▇▇▇ ▇▇▇▇▇
--------------------------------------
Title: Vice President
SUNTRUST BANK, SOUTH FLORIDA, N.A.,
By: /s/ W. ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Title: Vice President
BANK ONE, NA
formerly known as
The First National Bank of Chicago
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Title: Officer
CITICORP USA, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------------
Title: