EXHIBIT 10(vi)
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$85,000,000
364-DAY CREDIT AGREEMENT
among
GRAYBAR ELECTRIC COMPANY, INC.,
as Borrower,
certain Subsidiaries of the Borrower from time to time party hereto,
as Guarantors
THE LENDERS PARTIES HERETO
and
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent,
and
BANK OF AMERICA, N.A.
and
BANK ONE, NA,
as Syndication Agents
and
THE BANK OF NEW YORK
and
U.S. BANK NATIONAL ASSOCIATION,
as Documentation Agents
Dated as of July 22, 2004
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TABLE OF CONTENTS
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Page
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ARTICLE I DEFINITIONS............................................................................................1
Section 1.1 Defined Terms..........................................................................1
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Section 1.2 Other Definitional Provisions.........................................................14
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Section 1.3 Accounting Terms......................................................................14
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ARTICLE II THE LOANS; AMOUNT AND TERMS..........................................................................15
Section 2.1 Revolving Loans.......................................................................15
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Section 2.2 Intentionally Omitted.................................................................16
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Section 2.3 Swingline Loan Subfacility............................................................16
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Section 2.4 Intentionally Omitted.................................................................17
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Section 2.5 Facility Fee..........................................................................17
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Section 2.6 Commitment Reductions.................................................................18
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Section 2.7 Prepayments...........................................................................18
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Section 2.8 Minimum Principal Amount of Tranches..................................................18
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Section 2.9 Default Rate and Payment Dates........................................................18
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Section 2.10 Conversion Options....................................................................18
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Section 2.11 Computation of Interest and Fees......................................................19
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Section 2.12 Pro Rata Treatment and Payments.......................................................19
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Section 2.13 Non-Receipt of Funds by the Administrative Agent......................................20
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Section 2.14 Inability to Determine Interest Rate..................................................20
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Section 2.15 Illegality............................................................................21
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Section 2.16 Requirements of Law...................................................................21
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Section 2.17 Indemnity.............................................................................22
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Section 2.18 Taxes.................................................................................22
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Section 2.19 Intentionally Omitted.................................................................24
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ARTICLE III REPRESENTATIONS AND WARRANTIES......................................................................24
Section 3.1 Financial Condition...................................................................24
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Section 3.2 No Change.............................................................................24
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Section 3.3 Corporate Existence; Compliance with Law..............................................24
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Section 3.4 Corporate Power; Authorization; Enforceable Obligations...............................24
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Section 3.5 No Legal Bar; No Default..............................................................24
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Section 3.6 No Material Litigation................................................................25
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Section 3.7 Investment Company Act................................................................25
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Section 3.8 Margin Regulations....................................................................25
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Section 3.9 ERISA.................................................................................25
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Section 3.10 Purpose of Loans......................................................................25
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Section 3.11 Subsidiaries..........................................................................25
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Section 3.12 Ownership.............................................................................26
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Section 3.13 Indebtedness..........................................................................26
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Section 3.14 Taxes.................................................................................26
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Section 3.15 Investments...........................................................................26
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Section 3.16 No Burdensome Restrictions............................................................26
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Section 3.17 Brokers' Fees.........................................................................26
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Section 3.18 Labor Matters.........................................................................26
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Section 3.19 Accuracy and Completeness of Information..............................................26
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Section 3.20 Intentionally Omitted.................................................................27
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ARTICLE IV CONDITIONS PRECEDENT.................................................................................27
Section 4.1 Conditions to Closing Date and Initial Revolving Loans................................27
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Section 4.2 Conditions to All Extensions of Credit................................................28
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ARTICLE V AFFIRMATIVE COVENANTS.................................................................................29
Section 5.1 Financial Statements..................................................................29
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Section 5.2 Certificates; Other Information.......................................................30
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Section 5.3 Payment of Obligations................................................................30
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Section 5.4 Conduct of Business and Maintenance of Existence......................................31
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Section 5.5 Maintenance of Property; Insurance....................................................31
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Section 5.6 Inspection of Property; Books and Records; Discussions................................31
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Section 5.7 Notices...............................................................................31
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Section 5.8 Financial Covenants...................................................................32
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Section 5.9 Compliance with Law...................................................................32
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Section 5.10 Intentionally Omitted.................................................................32
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Section 5.11 Intentionally Omitted.................................................................32
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Section 5.12 Additional Subsidiary Guarantors......................................................32
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ARTICLE VI NEGATIVE COVENANTS...................................................................................33
Section 6.1 Indebtedness..........................................................................33
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Section 6.2 Liens.................................................................................33
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Section 6.3 Nature of Business....................................................................33
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Section 6.4 Consolidation, Merger, Sale or Purchase of Assets, etc................................33
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Section 6.5 Advances, Investments and Loans.......................................................34
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Section 6.6 Issuance of Equity Securities.........................................................34
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Section 6.7 Transactions with Affiliates; Modification of Documentation...........................34
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Section 6.8 Fiscal Year; Organizational Documents.................................................34
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Section 6.9 Limitation on Restricted Actions......................................................35
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Section 6.10 Restricted Payments...................................................................35
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Section 6.11 Limitation on Securitization Transactions.............................................35
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ARTICLE VII EVENTS OF DEFAULT...................................................................................35
Section 7.1 Events of Default.....................................................................35
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Section 7.2 Acceleration; Remedies................................................................37
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ARTICLE VIII THE AGENT..........................................................................................38
Section 8.1 Appointment...........................................................................38
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Section 8.2 Delegation of Duties..................................................................38
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Section 8.3 Exculpatory Provisions................................................................38
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Section 8.4 Reliance by Administrative Agent......................................................38
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Section 8.5 Notice of Default.....................................................................39
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Section 8.6 Non-Reliance on Administrative Agent and Other Lenders................................39
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Section 8.7 Indemnification.......................................................................39
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Section 8.8 Administrative Agent in Its Individual Capacity.......................................40
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Section 8.9 Successor Administrative Agent........................................................40
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Section 8.10 Syndication Agents....................................................................40
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ARTICLE IX MISCELLANEOUS........................................................................................40
Section 9.1 Amendments and Waivers................................................................40
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Section 9.2 Notices...............................................................................41
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Section 9.3 No Waiver; Cumulative Remedies........................................................42
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Section 9.4 Survival of Representations and Warranties............................................42
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Section 9.5 Payment of Expenses and Taxes; Indemnification........................................42
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Section 9.6 Successors and Assigns; Participations; Purchasing Lenders............................43
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Section 9.7 Adjustments; Set-off..................................................................45
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Section 9.8 Table of Contents and Section Headings................................................45
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Section 9.9 Counterparts..........................................................................45
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Section 9.10 Effectiveness.........................................................................45
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Section 9.11 Severability..........................................................................46
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Section 9.12 Integration...........................................................................46
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Section 9.13 Governing Law.........................................................................46
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Section 9.14 Consent to Jurisdiction and Service of Process........................................46
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Section 9.15 Intentionally Omitted.................................................................46
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Section 9.16 Confidentiality.......................................................................46
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Section 9.17 Acknowledgments.......................................................................47
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Section 9.18 Waivers of Jury Trial.................................................................47
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Section 9.19 USA Patriot Act Notice................................................................47
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ARTICLE X GUARANTY..............................................................................................47
Section 10.1 The Guaranty..........................................................................47
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Section 10.2 Bankruptcy............................................................................48
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Section 10.3 Nature of Liability...................................................................48
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Section 10.4 Independent Obligation................................................................48
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Section 10.5 Authorization.........................................................................48
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Section 10.6 Reliance..............................................................................48
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Section 10.7 Waiver................................................................................49
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Section 10.8 Limitation on Enforcement.............................................................49
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Section 10.9 Confirmation of Payment...............................................................49
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SCHEDULES
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Schedule 1.1(a) Account Designation Letter
Schedule 1.1(b) Senior Notes
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 2.3(d) Form of Swingline Note
Schedule 2.10 Form of Notice of Conversion/Extension
Schedule 2.18 Section 2.18 Certificate
Schedule 3.6 Litigation
Schedule 3.9 ERISA
Schedule 3.11 Subsidiaries
Schedule 3.18 Labor Matters
Schedule 5.12 Form of Joinder Agreement
Schedule 6.1(b) Indebtedness
Schedule 6.2 Permitted Liens
Schedule 6.5 Investments
Schedule 9.2 Schedule of Lenders' Lending Offices
Schedule 9.6(c) Form of Commitment Transfer Supplement
THIS 364-DAY CREDIT AGREEMENT, dated as of July 22, 2004 (the
"Credit Agreement"), among GRAYBAR ELECTRIC COMPANY, INC., a New York
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corporation (the "Borrower"), certain Material Domestic Subsidiaries of the
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Borrower as may from time to time become parties to this Agreement
(collectively, the "Guarantors"; and individually, a "Guarantor"), the
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several banks and other financial institutions as may from time to time
become parties to this Agreement (collectively, the "Lenders"; and
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individually, a "Lender"), WACHOVIA BANK, NATIONAL ASSOCIATION, as
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administrative agent for the Lenders hereunder (in such capacity, the
"Administrative Agent"), BANK OF AMERICA, N.A. AND BANK ONE, N.A., as
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syndication agents for the Lenders hereunder (in such capacity, the
"Syndication Agents") and THE BANK OF NEW YORK and U.S. BANK NATIONAL
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ASSOCIATION, as documentation agents for the Lenders hereunder (in such
capacity, the "Documentation Agents").
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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
$85,000,000, 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.
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As used in this Agreement, terms defined in the preamble to this
Agreement have the meanings therein indicated, and the following terms have
the following meanings:
"Account Designation Letter" shall mean the Notice of Account
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Designation Letter dated the Closing Date from the Borrower to the
Administrative Agent substantially in the form attached hereto as Schedule
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1.1(a).
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"Accumulated Other Comprehensive Income and Losses" shall mean, as
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of any date with respect to the Borrower and its Subsidiaries on a
consolidated basis, accumulated other comprehensive income and losses, as
determined in accordance with GAAP.
"Acquisition", by any Person, means the acquisition by such Person
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of the capital stock or all or substantially all of the Property of another
Person, whether or not involving a merger or consolidation with such Person.
"Additional Credit Party" shall mean each Person that becomes a
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Guarantor by execution of a Joinder Agreement in accordance with Section
5.12.
"Administrative Agent" shall have the meaning set forth in the
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first paragraph of this Agreement and any successors in such capacity.
"Affiliate" shall mean as to any Person, any other Person
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(excluding any Subsidiary) 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
10% or more of the securities having ordinary voting power for the election
of directors of
1
such Person or (b) to direct or cause the direction of the management and
policies of such Person whether by contract or otherwise.
"Agreement" shall mean this Credit Agreement, as amended, modified
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or supplemented from time to time in accordance with its terms.
"Alternate Base Rate" shall mean, for any day, a rate per annum
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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
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per annum publicly announced from time to time by Wachovia 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 Wachovia 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
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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
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an interest rate based on the Alternate Base Rate.
"Applicable Margin" shall mean, for any day, the rate per annum set
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forth below opposite the applicable Level then in effect, it being
understood that the Applicable Margin for (a) Alternate Base Rate Loans
shall be the percentage set forth under the column "Alternate Base Rate
Margin", (b) LIBOR Rate Loans shall be the percentage set forth under the
column "LIBOR Rate Margin" and (c) the Facility Fee shall be the percentage
set forth under the column "Facility Fee".
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Alternate
Leverage Base Rate LIBOR Rate Facility
Level Ratio Margin Margin Fee
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I > 3.00 to 1.0 .25% 1.75% .50%
-
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II < 3.00 to 1.0 but .00% 1.50% .50%
> 2.50 to 1.0
-
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III < 2.50 to 1.0 .00% 1.25% .50%
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The Applicable Margin shall, in each case, be determined and
adjusted quarterly on the date five (5) Business Days after the date on
which the Administrative Agent has received from the Borrower the annual or
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(a), 5.1(b) and 5.2(b) (each an "Interest
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Determination Date"). Such Applicable Margin shall be effective from such
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Interest Determination Date until the next such Interest Determination Date.
The initial Applicable Margin shall be based on Level I until the Interest
Determination Date with respect to the fiscal quarter ending June 30, 2004.
After the Closing Date, if the Borrower shall fail to provide the annual or
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.
2
"Asset Disposition" shall mean the disposition of any or all of the
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assets (including, without limitation, the Capital Stock of a Subsidiary or
any ownership interest in a joint venture) of any Credit Party or any
Subsidiary whether by sale, lease, transfer or otherwise. The term "Asset
Disposition" shall not include (a) Specified Sales or (b) any Equity
Issuance.
"Bankruptcy Code" shall mean the Bankruptcy Code in Title 11 of the
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United States Code, as amended, modified, succeeded or replaced from time to
time.
"Borrower" shall have the meaning set forth in the first paragraph
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of this Agreement.
"Borrowing Date" shall mean, in respect of any Loan, the date such
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Loan is made.
"Business Day" shall mean a day other than a Saturday, Sunday or
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other day on which commercial banks in Charlotte, North Carolina or New
York, New York are authorized or required by law to close; provided,
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however, that when used in connection with a rate determination, borrowing
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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,
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the obligations with respect to which are required to be capitalized on a
balance sheet of the lessee in accordance with GAAP.
"Capital Lease Obligations" shall mean the capitalized lease
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obligations relating to a Capital Lease determined in accordance with GAAP.
"Capital Stock" shall mean (a) in the case of a corporation,
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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
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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
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Obligations"), (b) U.S. dollar denominated (or foreign currency fully
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hedged) time deposits, certificates of deposit, Eurodollar time deposits and
Eurodollar certificates of deposit of (i) any domestic commercial bank of
recognized standing having capital and surplus in excess of $250,000,000 or
(ii) any bank whose short-term commercial paper rating from S&P is at least
A-1 or the equivalent thereof or from ▇▇▇▇▇'▇ is at least P-1 or the
equivalent thereof (any such bank being an "Approved Bank"), in each case
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with maturities of not more than 364 days from the date of acquisition, (c)
commercial paper and variable or fixed rate notes issued by any Approved
Bank (or by the parent company thereof) or any variable rate notes issued
by, or guaranteed by any domestic corporation rated A-1 (or the equivalent
thereof) or better by S&P or P-1 (or the equivalent thereof) or better by
Moody's and maturing within six months of the date of acquisition, (d)
repurchase agreements 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, (e) obligations of any state of the United States
or any political subdivision thereof for the payment of the principal and
redemption price of and interest on which there shall have been irrevocably
deposited Government Obligations maturing as to principal and interest at
times and in amounts sufficient to provide such payment, and (f) auction
preferred stock rated in the highest short-term credit rating category by
S&P or Moody's.
"Closing Date" shall mean the date of this Agreement.
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"Code" shall mean the Internal Revenue Code of 1986, as amended
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from time to time.
"Commitment" shall mean the Revolving Commitment and the Swingline
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Commitment, individually or collectively, as appropriate.
"Commitment Percentage" shall mean the Revolving Commitment Percentage.
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3
"Commitment Period" shall mean the period from and including the
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Closing Date to but not including the Revolving Commitment Termination Date.
"Commitment Transfer Supplement" shall mean a Commitment Transfer
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Supplement, substantially in the form of Schedule 9.6(c).
"Commonly Controlled Entity" shall mean an entity, whether or not
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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)
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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, (iii) depreciation and
amortization expense and (iv) other extraordinary non-recurring, non-cash
charges.
"Consolidated Interest Expense" means, for any period, all interest
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expense of the Credit Parties and their Subsidiaries including the interest
component under Capital Leases and the implied interest component under
Securitization Transactions, 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 determination.
"Consolidated Net Income" means, for any period, net income
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(excluding extraordinary items) after taxes for such period of the Credit
Parties and their Subsidiaries on a consolidated basis, as determined in
accordance with GAAP.
"Consolidated Tangible Net Worth" means, as of any date with
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respect to the Credit Parties and their Subsidiaries on a consolidated
basis, Consolidated Total Tangible Assets minus Consolidated Total
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Liabilities plus the amount by which Accumulated Other Comprehensive Income
and Losses reduces shareholder's equity, all as determined in accordance
with GAAP.
"Consolidated Total Assets" means, as of any date with respect to
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the Credit Parties and their Subsidiaries on a consolidated basis, total
assets, as determined in accordance with GAAP.
"Consolidated Total Liabilities" means, as of any date with respect
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to the Credit Parties and their Subsidiaries on a consolidated basis, total
liabilities, as determined in accordance with GAAP.
"Consolidated Total Tangible Assets" means, as of any date with
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respect to the Credit Parties and their Subsidiaries on a consolidated
basis, Consolidated Total Assets minus (a) goodwill and (b) other items
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properly classified as "intangible assets" in each case as determined in
accordance with GAAP (but only if the sum of (a) and (b) equals or exceeds
5% of Consolidated Total Assets).
"Contractual Obligation" shall mean, as to any Person, any
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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 Documents" shall mean this Agreement and each of the Notes.
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"Credit Party" or "Credit Parties" shall mean any of the Borrower
------------ --------------
or the Guarantors, individually or collectively, as appropriate.
"Credit Party Obligations" shall mean, without duplication, (a) all
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of the obligations of the Credit Parties to the Lenders and the
Administrative Agent, whenever arising, under this Agreement and the Notes
(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 the Credit Parties, regardless of whether such interest is an
allowed claim under the Bankruptcy Code) and (b) all liabilities and
obligations, whenever arising, owing from any Credit Party or any of its
Subsidiaries to any Lender, or any Affiliate of a Lender, arising under any
Hedging Agreement.
4
"Default" shall mean any of the events specified in Section 7.1,
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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
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such time (a) has failed to make a Loan required pursuant to the term 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
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United States of America.
"Domestic Lending Office" shall mean, initially, the office of each
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Lender designated as such Lender's Domestic Lending Office shown on Schedule
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9.2; and thereafter, such other office of such Lender as such Lender may
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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.
"Equity Issuance" shall mean any issuance by any Credit Party or
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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 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
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1974, as amended from time to time.
"Eurodollar Reserve Percentage" shall mean for any day, the
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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
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Section 7.1; provided, however, that any requirement for the giving of
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notice or the lapse of time, or both, or any other condition, has been
satisfied.
"Excluded Amount" shall mean collectively each of the amounts set
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forth in the table below, provided that (i) for each related "Site Location"
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the Excluded Amount shall not exceed (but can be equal to or less than) the
amount set forth opposite such Site Location in the table below and (ii) for
each related Site Location, either (A) the Excluded Amount must relate to
the synthetic lease or other financing product in existence on the Closing
Date with respect to such Site Location or (B) the Borrower must own such
Site Location:
Site Location Excluded Amount
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Stafford, TX $7,660,000
Austell, GA $7,452,000
Youngstown, OH $7,008,000
▇▇▇▇▇▇, MN $6,600,000
Joliet, IL $9,917,744
Puyallup, WA $9,305,219
Cincinnati, OH $5,967,833
Tampa, FL $9,773,687
Taunton, MA $9,793,000
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Maximum Total Excluded Amount $73,477,483
5
"Existing Credit Agreement" shall mean the Borrower's existing
-------------------------
Credit Agreement dated as of July 30, 1999 by and among the Borrower, the
lenders from time to time party thereto and the Administrative Agent, as
amended or modified from time to time prior to the date hereof.
"Extension of Credit" shall mean, as to any Lender, the making of a
-------------------
Loan by such Lender.
"Facility Fee" shall have the meaning set forth in Section 2.5.
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"Federal Funds Effective Rate" shall have the meaning set forth in
----------------------------
the definition of "Alternate Base Rate".
"Funded Debt" shall mean, with respect to any Person, without
-----------
duplication, (a) all Indebtedness of such Person other than Indebtedness of
the types referred to in clause (e), (f), (g), (i) and (m) of the definition
of "Indebtedness" set forth in this Section 1.1, (b) all Funded Debt of
others of the type referred to in clause (a) above secured by (or for which
the holder of such Funded Debt has an existing right, contingent or
otherwise, to be secured by) any Lien on, or payable out of the proceeds of
production from, property owned or acquired by such Person, whether or not
the obligations secured thereby have been assumed, (c) all Guaranty
Obligations of such Person with respect to Funded Debt of the type referred
to in clause (a) above of another Person and (d) Funded Debt of the type
referred to in clause (a) above of any partnership or unincorporated joint
venture in which such Person is legally obligated or has a reasonable
expectation of being liable with respect thereto.
"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 2.19.
---------------
"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.
"Guarantors" shall have the meaning set forth in the first
----------
paragraph of this Agreement. As of the Closing Date there are no Guarantors.
"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, 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.
"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.
"Indebtedness" shall mean, with respect to any Person, without
------------
duplication, (a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to Property purchased by such Person (other than
customary reservations or retentions of title under agreements with
suppliers entered into in the ordinary course of business), (d) all
obligations of such Person issued or assumed as the deferred purchase price
of Property or services purchased by such Person (other than trade debt
incurred in the ordinary course of business and due within six months of the
incurrence thereof) which would appear as
6
liabilities on a balance sheet of such Person, (e) all obligations of such
Person under take-or-pay or similar arrangements or under commodities
agreements, (f) all Indebtedness of others secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise,
to be secured by) any Lien on, or payable out of the proceeds of production
from, Property owned or acquired by such Person, whether or not the
obligations secured thereby have been assumed, (g) all Guaranty Obligations
of such Person with respect to Indebtedness of another Person, (h) the
principal portion of all obligations of such Person under Capital Leases,
(i) all obligations of such Person under Hedging Agreements, (j) the maximum
amount of all standby letters of credit issued or bankers' acceptances
facilities created for the account of such Person and, without duplication,
all drafts drawn thereunder (to the extent unreimbursed), (k) all preferred
Capital Stock issued by such Person and which by the terms thereof could be
(at the request of the holders thereof or otherwise) subject to mandatory
sinking fund payments, redemption or other acceleration, (l) the principal
balance outstanding under any synthetic lease, tax retention operating
lease, off-balance sheet loan or similar off-balance sheet financing product
and (m) the Indebtedness of any partnership or unincorporated joint venture
in which such Person is a general partner or a joint venturer, but only to
the extent to which there is recourse to such Person for payment of such
Indebtedness.
"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.
"Interest Coverage Ratio" means, with respect to the Credit Parties
-----------------------
and their Subsidiaries on a consolidated basis for the twelve month period
ending on the last day of any fiscal quarter of the Credit Parties and their
Subsidiaries, the ratio of (a) Consolidated EBITDA for such period to (b)
Consolidated Interest Expense for such period.
"Interest Payment Date" shall mean (a) as to any Alternate Base
---------------------
Rate Loan or Swingline Loan, the last day of each March, June, September and
December and 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 the Revolving Commitment Termination Date, and (c)
as to any LIBOR Rate Loan having an Interest Period longer than three
months, each day which is three months after the first day of such Interest
Period and the last day of such Interest Period and the Revolving Commitment
Termination Date.
"Interest Period" shall mean with respect to any LIBOR Rate Loan,
---------------
(i) 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
(ii) 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, (A) 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, (B) 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, (C) if the Borrower shall fail to give
notice as provided above, the Borrower shall be deemed to have selected an
Alternate Base Rate Loan to replace the affected LIBOR Rate Loan, (D) any
Interest Period in respect of any Loan that would otherwise extend beyond
the Revolving Commitment Termination Date is due on the Revolving Commitment
Termination Date, and (E) 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.
"Joinder Agreement" shall mean a Joinder Agreement substantially in
-----------------
the form of Schedule 5.12, executed and delivered by an Additional Credit
-------------
Party in accordance with the provisions of Section 5.12.
"Lender" shall have the meaning set forth in the first paragraph of
------
this Agreement.
7
"Leverage Ratio" means, with respect to the Credit Parties and
--------------
their Subsidiaries on a consolidated basis for the twelve month period
ending on the last day of any fiscal quarter, the ratio of (a) Funded Debt
of the Credit Parties and their Subsidiaries on a consolidated basis
(excluding for purposes hereof, the Excluded Amount) on the last day of such
period to (b) Consolidated EBITDA for such 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 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 Rate = LIBOR
------------------------------------
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.
"Mandatory Borrowing" shall have the meaning set forth in Section
-------------------
2.3(b)(ii) or Section 2.4(e), as the context may require.
"Material Adverse Effect" shall mean a material adverse effect on
-----------------------
(a) the business, operations, property or condition (financial or otherwise)
of the Credit Parties and their Subsidiaries taken as a whole, (b) the
ability of any Credit Party to perform its obligations, when such
obligations are required to be performed, under this Agreement, any of the
Notes or any other Credit Document or (c) the validity or enforceability of
this 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.
"Material Domestic Subsidiary" shall mean any Subsidiary of the
----------------------------
Borrower 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
(excluding Graybar Commerce Corporation and Graybar Services, Inc.) which,
together with its Subsidiaries on a consolidated basis during the twelve
month period preceding such date of determination, represents 5% or more of
the consolidated revenues of the Borrower and its Subsidiaries.
8
"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.
"Net Cash Proceeds" shall mean the aggregate cash proceeds received
-----------------
by any Credit Party or any Subsidiary in respect of any Asset Disposition or
Equity Issuance, net of (a) direct costs (including, without limitation,
legal, accounting and investment banking fees, and sales commissions) and
(b) taxes paid or payable as a result thereof; it being understood that "Net
Cash Proceeds" shall include, without limitation, any cash received upon the
sale or other disposition of any non-cash consideration received by any
Credit Party or any Subsidiary in any Asset Disposition or Equity Issuance.
"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 2.3(b)(i), as appropriate.
"Notice of Conversion" shall mean the written notice of extension
--------------------
or conversion as referenced and defined in Section 2.10.
"Obligations" shall mean Loans.
-----------
"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 2.3(b)(ii).
"PBGC" shall mean the Pension Benefit Guaranty Corporation
----
established pursuant to Subtitle A of Title IV of ERISA.
"Permitted Acquisition" shall mean an Acquisition by any Credit
---------------------
Party or any Subsidiary of any Credit Party for the fair market value of the
capital stock or Property acquired, provided that (a) the capital stock or
--------
Property acquired in such Acquisition relates to a line of business similar
to the business of such Credit Party and its Subsidiaries engaged in on the
Closing Date; (b) in the case of an Acquisition of the capital stock of
another Person, (i) the board of directors (or other comparable governing
body) of such other Person shall have duly approved such Acquisition and
(ii) such Person shall become a wholly-owned direct or indirect Subsidiary
of the Credit Party; (c) the representations and warranties made by the
Credit Party 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); (d) any cash consideration paid by a Credit Party in connection
with such Acquisition shall be funded from a source other than Loans or
Extensions of Credit under this Agreement; and (e) if the aggregate
consideration for such Acquisition exceeds 1% of the Credit Party's
Consolidated Total Assets, the Credit Party shall have delivered to the
Administrative Agent a Pro Forma Compliance Certificate demonstrating that,
upon giving effect to the Acquisition on a Pro Forma Basis, the Credit Party
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 any Credit Party 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;
9
(c) 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;
(d) investments existing as of June 30, 2004 and set forth
in Schedule 6.5;
------------
(e) loans to employees, directors or officers in
connection with the award of convertible bonds or stock under a
stock incentive plan, stock option plan or other equity-based
compensation plan or arrangement in the aggregate not to exceed
$5,000,000 (calculated on the exercise price for any such shares)
in the aggregate at any time outstanding;
(f) other advances or loans to employees, directors,
officers, shareholders or agents not to exceed $10,000,000 in the
aggregate at any time outstanding;
(g) Permitted Acquisitions and, to the extent permitted by
Section 6.13, Securitization Transactions; and
(h) additional loan 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 (h) shall not exceed an aggregate amount of more than five
percent (5%) of the Consolidated Total Assets determined as of the
end of the most recently completed fiscal year.
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 June 30, 2004 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 June 30, 2004 (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 or similar substitutions 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
10
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 Credit Parties and
their 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;
(l) Liens assumed in connection with a Permitted
Acquisition, so long as such Liens cover only the assets acquired
pursuant to such Permitted Acquisition;
(m) additional Liens not otherwise permitted by the
foregoing clauses hereof; provided that such additional Liens
--------
permitted by this clause (m) do not encumber property and assets
which constitute more than ten percent (10%) of the Consolidated
Total Assets determined as of the end of the most recently
completed fiscal year;
(n) Liens created or deemed to exist in connection with a
Securitization Transaction permitted hereunder (including any
related filings of any financing statements), but only to the
extent that any such Lien relates to the applicable Securitization
Receivables actually sold, contributed, financed or otherwise
conveyed or pledged pursuant to such transaction.
"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 Administrative 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 any
Credit Party 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
11
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 Credit Party,
(iii) factually supportable and (iv) reasonably acceptable to the
Administrative Agent.
"Pro Forma Compliance Certificate" means a certificate of a
--------------------------------
Responsible Officer of the Borrower delivered to the Administrative Agent in
connection with any Acquisition as referred to in the definition of
"Permitted Acquisition" set forth in this Section 1.1, as applicable, and
---------------------
containing reasonably detailed calculations, upon giving effect to the
applicable transaction on a Pro Forma Basis, of the Leverage Ratio, Interest
Coverage Ratio and the Consolidated Tangible Net Worth 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, other than Defaulting
----------------
Lenders, which are then in compliance with their obligations hereunder (as
determined by the Administrative Agent) holding in the aggregate greater
than 50% of (i) the Revolving Commitments (and Participation Interests
therein) or (ii) if the Revolving Commitments have been terminated, the
outstanding Revolving Loans and Participation Interests (including the
Participation Interests of the Swingline Lender in any Swingline Loans).
"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, as to (a) the Borrower, either of
-------------------
the Chairman of the Board, President and Chief Executive Officer or the
Chief Financial Officer or the Vice President and Treasurer or (b) any other
Credit Party, any duly authorized officer thereof.
"Restricted Payment" shall have the meaning set forth in Section
------------------
6.10.
"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, 2005.
-------------------------------------
12
"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 any 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.
"Securitization Transaction" shall mean any transaction or series
--------------------------
of financing transactions that have been or may be entered into by the
Borrower or any Subsidiary of the Borrower pursuant to which the Borrower or
any Subsidiary of the Borrower may sell, convey or otherwise transfer to (i)
a Subsidiary or Affiliate of the Borrower (a "Securitization Subsidiary"),
-------------------------
or (ii) any other Person, or may grant a security interest in, any accounts
receivable, notes receivable, rights to future lease payments or residuals
or other similar rights to payment (the "Securitization Receivables")
--------------------------
(whether such Securitization Receivables are then existing or arising in the
future) of the Borrower or any Subsidiary of the Borrower, and any assets
related thereto, including without limitation, all security interests in
merchandise or services financed thereby, the proceeds of such
Securitization Receivables, and other assets which are customarily sold or
in respect of which security interests are customarily granted in connection
with securitization transactions involving such assets.
"Senior Notes" means those certain senior notes of the Borrower as
------------
referenced on Schedule 1.1(b).
---------------
"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 cash and Cash
Equivalents, so long as the applicable Credit Party or the applicable
Subsidiary receives, in return, cash, Cash Equivalents or other property
having a fair market value equal to the fair market value of such Cash
Equivalents.
"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 Agreement shall refer to a Subsidiary or Subsidiaries
of the Borrower.
"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 2.3(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 2.3(a).
"Swingline Lender" shall mean Wachovia, in its capacity as such.
----------------
13
"Swingline Loan" or "Swingline Loans" shall have the meaning set
-------------- ---------------
forth in Section 2.3(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 2.3(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 2.18.
-----
"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.
"2.18 Certificate" shall have the meaning set forth in Section 2.18.
----------------
"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.
"Utilized Revolving Commitment" means, for any day from the Closing
-----------------------------
Date to the Revolving Commitment Termination Date, an amount equal to the
outstanding aggregate principal amount of all Loans.
"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.
"Wachovia" means Wachovia Bank, National Association.
--------
SECTION 1.2 OTHER DEFINITIONAL PROVISIONS.
----------------------------------------------------
(a) Unless otherwise specified therein, all terms defined
in this 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 Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement, and Section, subsection, Schedule and Exhibit references
are to this 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
14
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 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 shall not exceed the Revolving Committed Amount. For purposes
hereof, the aggregate amount available hereunder shall be
EIGHTY-FIVE MILLION DOLLARS ($85,000,000) (as such aggregate
maximum amount may be reduced from time to time as provided in
Section 2.6, 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. All Revolving Loans
made on the Closing Date shall bear interest at the
Alternate Base Rate until the earlier of (i) the
completion of the syndication of the Commitments to
financial institutions which shall become Lenders
hereunder or (ii) thirty days from the Closing Date.
(ii) Minimum Amounts. Each Revolving Loan
---------------
borrowing that is a LIBOR Rate Loan shall be in a minimum
aggregate amount of $5,000,000 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 an 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).
15
(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
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 2.9,
--------
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 sum of the
Alternate Base Rate plus the Applicable Margin; 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 INTENTIONALLY OMITTED.
--------------------------------------------
SECTION 2.3 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 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 earlier of
(i) the date that is one Business Day after such Swingline
Loan is made and (ii) 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
16
the Borrower shall be deemed to have requested a Revolving
Loan borrowing comprised entirely of Alternate Base Rate
Loans 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), (C) 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 (D) 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 (A) the
---------------
amount of Mandatory Borrowing may not comply with the
minimum amount for borrowings of Revolving Loans otherwise
required hereunder, (B) whether any conditions specified
in Section 4.2 are then satisfied, (C) whether a Default
or an Event of Default then exists, (D) 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),
(E) the date of such Mandatory Borrowing, or (F) 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 2.9, Swingline Loans shall bear interest at a per annum
rate equal to the Alternate Base Rate plus the Applicable Margin
----
for Revolving Loans that are Alternate Base 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 2.3(d).
---------------
SECTION 2.4 INTENTIONALLY OMITTED.
--------------------------------------------
SECTION 2.5 FACILITY FEE.
-----------------------------------
In consideration of the Revolving Commitment, the Borrower
agrees to pay to the Administrative Agent for the ratable benefit
of the Lenders a facility fee (the "Facility Fee") in an amount
------------
equal to the Applicable Margin per annum for a Facility Fee on the
average daily aggregate Revolving Committed Amount. The Facility
Fee shall be payable quarterly in arrears on the 15th day following
the last day of each calendar quarter for the prior calendar
quarter.
17
SECTION 2.6 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 would exceed the Revolving Committed Amount.
----
(b) Revolving Commitment Termination Date. The Revolving
-------------------------------------
Commitment and the Swingline Commitment shall automatically
terminate on the Revolving Commitment Termination Date.
SECTION 2.7 PREPAYMENTS.
----------------------------------
(a) Optional Prepayments. The Borrower shall have the right to
--------------------
prepay Revolving Loans and Swingline 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.
(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 2.7(a) and 2.7(b) shall be subject to Section 2.17, 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 2.8 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 $5,000,000 or
a whole multiple of $1,000,000 in excess thereof.
SECTION 2.9 DEFAULT RATE AND PAYMENT DATES.
-----------------------------------------------------
Upon the occurrence, and during the continuance, of an Event of
Default, the principal of and, to the extent permitted by law, interest on
the Loans and any other amounts owing hereunder or under the other Credit
Documents shall bear interest, payable on demand, at a per annum rate 2%
greater than the rate which would otherwise be applicable (or if no rate is
applicable, whether in respect of interest, fees or other amounts, then the
Alternate Base Rate plus 2%).
----
SECTION 2.10 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
18
Business Days' prior irrevocable written notice of such election. A
form of Notice of Conversion/ Extension is attached as Schedule
--------
2.10. 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 $5,000,000 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
2.10(a); provided, that no LIBOR Rate Loan may be continued as such
--------
when any Default or Event of Default has occurred and is
continuing, in which case such Loan shall be automatically
converted to an Alternate Base Rate Loan at the end of the
applicable Interest Period with respect thereto. 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 2.11 COMPUTATION OF INTEREST AND FEES.
-------------------------------------------------------
(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 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.
SECTION 2.12 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 Agreement or
any Note shall be applied, first, to any fees then due and owing by the
Borrower pursuant to Section 2.5, 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 2.5 shall be made pro rata in accordance
--- ----
with the respective amounts due and owing. Each optional prepayment on
account of principal of the Loans shall be applied, to such of the Loans as
the Borrower may designate (to be applied pro rata among the Lenders);
--- ----
provided, that prepayments made pursuant to Section 2.15 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 2.7(b).
All payments (including prepayments) to be made by the Borrower on account
of principal, interest and fees shall be made without defense, set-off or
counterclaim (except as provided in Section 2.18(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
19
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 2.13 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 Funds Effective 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 2.13 shall be conclusive in the absence of manifest
error.
SECTION 2.14 INABILITY TO DETERMINE INTEREST RATE.
-----------------------------------------------------------
Notwithstanding any other provision of this Agreement, if (a) 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 Rate Loan
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.
20
SECTION 2.15 ILLEGALITY.
---------------------------------
Notwithstanding any other provision of this 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 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, upon 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 2.16 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 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 to reduce
any amount receivable hereunder or under any Note, then, in any
such case, the Borrower shall promptly pay such Lender, upon 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. 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
21
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 2.16 shall survive the
termination of this Agreement and payment of the Notes and all
other amounts payable hereunder.
SECTION 2.17 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 Agreement and payment of the Notes and all
other amounts payable hereunder.
SECTION 2.18 TAXES.
----------------------------
(a) All payments made by the Borrower hereunder or under
any Note will be, except as provided in Section 2.18(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 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,
upon written request of 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 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
22
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 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 2.18 (any such certificate, a "2.18 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
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 Agreement and any Note. Notwithstanding
anything to the contrary contained in Section 2.18(a), but subject
to the immediately succeeding sentence, (x) the 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 2.18(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 2.18(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 2.18, the Borrower agrees to
pay additional amounts and to indemnify each Lender in the manner
set forth in Section 2.18(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 2.18 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 2.18,
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 2.18 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 2.18 to the Borrower or any other party.
(e) The agreements in this Section 2.18 shall survive the
termination of this Agreement and the payment of the Notes and all
other amounts payable hereunder.
23
SECTION 2.19 INTENTIONALLY OMITTED.
--------------------------------------------
ARTICLE III
REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Agreement and to make the
Extensions of Credit herein provided for, the Credit Parties hereby
represent and warrant to the Administrative Agent and to each Lender that:
SECTION 3.1 FINANCIAL CONDITION.
------------------------------------------
The balance sheet and the related statements of income and of cash
flows of the Borrower for fiscal year 2003 audited by Ernst & Young, L.L.P.
are complete and correct and present fairly the financial condition of the
Borrower and its Subsidiaries on a consolidated basis as of such dates. 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).
SECTION 3.2 NO CHANGE.
--------------------------------
Since December 31, 2003 (and after delivery of annual audited
financial statements in accordance with 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.
SECTION 3.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW.
---------------------------------------------------------------
Each of the Credit Parties 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 Credit Party 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 any Credit Party.
Each Credit Document to which it is a party has been duly executed and
delivered on behalf of such Credit Party. Each Credit Document to which it
is a party constitutes a legal, valid and binding obligation of such Credit
Party, enforceable against such Credit Party in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable
principles (whether enforcement is sought by proceedings in equity or at
law).
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 Credit
24
Parties or their 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 any Liens arising under or contemplated in connection with the Credit
Documents. No Credit Party 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 any Credit Party, threatened by or against any Credit
Party 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.
---------------------------------------------
No Credit Party 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 Credit Parties and their Subsidiaries taken as a group do not own
"margin stock" except as identified in the financial statements referred to
in Section 3.1 and the aggregate value of all "margin stock" owned by the
Credit Parties and their 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. No Credit Party 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 provide liquidity for working capital, capital expenditures and
other general corporate purposes.
SECTION 3.11 SUBSIDIARIES.
-----------------------------------
Set forth on Schedule 3.11 is a complete and accurate list of all
-------------
Subsidiaries of each Credit Party. Information on the attached Schedule
includes state of incorporation and the percentage of outstanding shares of
each class of stock owned by each Credit Party.
25
SECTION 3.12 OWNERSHIP.
--------------------------------
Each Credit Party and its Subsidiaries is the owner of, and has
good and marketable title to, all of its respective assets, 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 Credit Parties
and their Subsidiaries have no Indebtedness.
SECTION 3.14 TAXES.
----------------------------
Each Credit Party and its Subsidiaries has filed, or caused to be
filed, all tax returns (federal, state, local and foreign) required to be
filed and paid (a) all amounts of taxes shown thereon to be due (including
interest and penalties) and (b) all other taxes, fees, assessments and other
governmental charges (including mortgage recording taxes, documentary stamp
taxes and intangibles taxes) owing by it, except for such taxes (i) which
are not yet delinquent or (ii) that are being contested in good faith and by
proper proceedings, and against which adequate reserves are being maintained
in accordance with GAAP. No Credit Party 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.
SECTION 3.15 INVESTMENTS.
----------------------------------
All Investments of each of the Credit Parties and their
Subsidiaries are Permitted Investments.
SECTION 3.16 NO BURDENSOME RESTRICTIONS.
-------------------------------------------------
No Credit Party nor 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.
------------------------------------
No Credit Party nor 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.
SECTION 3.18 LABOR MATTERS.
------------------------------------
There are no collective bargaining agreements or Multiemployer
Plans covering the employees of any Credit Party or any of its Subsidiaries
as of the Closing Date, other than as set forth in Schedule 3.18 hereto. No
-------------
Credit Party nor 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 which
could be reasonably expected to have a Material Adverse Effect.
SECTION 3.19 ACCURACY AND COMPLETENESS OF INFORMATION.
---------------------------------------------------------------
All factual information heretofore, contemporaneously or hereafter
furnished by or on behalf of any Credit Party or any of its Subsidiaries to
the Administrative Agent or any Lender for purposes of or in connection with
this Agreement or any other Credit Document, or any transaction contemplated
hereby or thereby, is or will be 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 any Credit
Party 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 such Credit Party and its Subsidiaries
furnished to the Administrative Agent and/or
26
the Lenders, or in any certificate, opinion or other written statement made
or furnished by such Credit Party to the Administrative Agent and/or the
Lenders.
SECTION 3.20 INTENTIONALLY OMITTED.
--------------------------------------------
SECTION 3.21 OBLIGATIONS PERMITTED UNDER SENIOR NOTES.
---------------------------------------------------------------
The Loans and all other Obligations owing hereunder are permitted
under the Senior Notes.
ARTICLE IV
CONDITIONS PRECEDENT
SECTION 4.1 CONDITIONS TO CLOSING DATE AND INITIAL REVOLVING
LOANS.
----------------------------------------------------------------------
This 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 Agreement. The Administrative Agent shall
----------------------
have received (i) counterparts of this 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.
(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 such Credit Party 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 ▇▇▇▇▇ ▇▇▇▇ LLP and the General
Counsel of the Borrower, in each case on behalf of 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 Lenders
and the Administrative Agent.
27
(e) Litigation. There shall not exist any pending
----------
litigation or investigation affecting or relating to any Credit
Party or any of their Subsidiaries, this Agreement and the other
Credit Documents that in the reasonable judgment of the
Administrative Agent could materially adversely affect such Credit
Party or any of their Subsidiaries, this Agreement and the other
Credit Documents, 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 each Credit Party and its Subsidiaries shall
be as described in Schedule 3.11.
-------------
(g) Consents. The Administrative Agent shall have received
--------
evidence that all governmental, shareholder and material third
party consents and approvals necessary in connection with the
financings and other transactions contemplated hereby 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 that could seek or threaten any of the foregoing.
(h) Compliance with Laws. The financings and other
--------------------
transactions contemplated hereby shall be in compliance with all
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 any Credit Party or any Subsidiary of
any Credit Party.
(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 satisfactory to it.
(k) Termination of Existing Indebtedness. The Existing
------------------------------------
Credit Agreement, together with all other existing Indebtedness for
borrowed money of the Borrower and its Subsidiaries (other than the
existing Senior Notes and the Indebtedness listed on Schedule
--------
6.1(b)) shall have been repaid in full and terminated.
------
(l) Account Designation Letter. The Administrative Agent
--------------------------
shall have received the executed Account Designation Letter in the
form of Schedule 1.1(a) hereto.
---------------
(m) Existing Credit Facility. The Administrative Agent
------------------------
shall have received evidence that the Existing Credit Agreement has
been or concurrently with the Closing Date is being terminated.
(n) Officer's Certificate. The Administrative Agent shall
---------------------
have received a certificate executed by a Responsible Officer of
the Borrower as of the Closing Date stating that immediately after
giving effect to this Agreement, the other Credit Documents and all
the transactions contemplated herein and therein to occur on such
date, (A) no Default or Event of Default exists and (B) all
representations and warranties contained herein and in the other
Credit Documents are true and correct in all material respects.
(o) Additional Matters. All other documents and legal
------------------
matters in connection with the transactions contemplated by this
Agreement shall be reasonably satisfactory in form and substance to
the Administrative Agent and its counsel.
SECTION 4.2 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.
28
(b) No Default or Event of Default. No Default or Event of
------------------------------
Default 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 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 shall not exceed the Revolving Committed Amount, and (ii) 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 2.3, all conditions set forth in such
Section shall have been satisfied.
(f) Securitization Transactions. Except with respect to
---------------------------
Swingline Loans, as of the date of such Extension of Credit (i)
there shall be no availability pursuant to any Securitization
Transaction and (ii) no default, event of default or termination or
liquidation event shall have occurred or be continuing under any
Securitization Transaction.
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 Credit Parties 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
Each Credit Party hereby covenants and agrees that on the Closing
Date, and thereafter for so long as this Agreement is in effect and until
the Commitments have terminated, no Note remains outstanding and unpaid and
the Credit Party Obligations, together with interest, Facility Fees and all
other amounts owing to the Administrative Agent or any Lender hereunder, are
paid in full, such Credit Party shall, and shall cause each of their
Subsidiaries (other than in the case of Sections 5.1, 5.2 or 5.7 hereof),
to:
SECTION 5.1 FINANCIAL STATEMENTS.
-------------------------------------------
Furnish to the Administrative Agent and each of the Lenders:
(a) Annual Financial Statements. As soon as available, but
---------------------------
in any event within one hundred and five (105) days after the end
of each fiscal year of the Borrower, a copy of the consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as
at the end of such fiscal year and the related consolidated
statements of income and retained earnings and of cash flows of the
Borrower and its consolidated Subsidiaries for such year, audited
by Ernst & Young, L.L.P., setting forth in each case in comparative
form the figures for the previous year, reported on without a
"going concern" or like qualification or exception, or
qualification indicating that the scope of the audit was inadequate
to permit such independent certified public accountants to certify
such financial statements without such qualification;
(b) Quarterly Financial Statements. As soon as available
------------------------------
and in any event within forty-five (45) days after the end of each
of the first three fiscal quarters of the Borrower, a
company-prepared consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at the end of such period and related
company-prepared statements of income and retained earnings and of
cash flows for the Borrower and its consolidated Subsidiaries for
such quarterly period and for the portion of the fiscal year ending
with such period, in each case setting forth in comparative form
consolidated figures for the
29
corresponding period or periods of the preceding fiscal year
(subject to normal recurring year-end audit adjustments); and
(c) Monthly Financial Statements. As soon as available and
----------------------------
in any event within thirty (30) days after the end of each calendar
month, a company-prepared consolidated balance sheet of the
Borrower and their consolidated Subsidiaries as at the end of such
period and related company-prepared statements of income for the
Borrower and their consolidated Subsidiaries for such monthly
period and for the portion of the fiscal year ending with such
period, in each case setting forth in comparative form consolidated
figures for the corresponding period or periods of the preceding
fiscal year (subject to normal recurring year-end audit
adjustments);
all such financial statements to be complete and correct in all material
respects and to be prepared in reasonable detail and, with respect to the
financial statements furnished pursuant to Section 5.1(a) and 5.1(b), in
accordance with GAAP applied consistently throughout the periods reflected
therein and further accompanied by a description of, and an estimation of
the effect on the financial statements on account of, a change, if any, in
the application of accounting principles as provided in Section 1.3.
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 Default or
Event of Default, 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, 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 Agreement to be
observed, performed or satisfied by it, 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 thirty (30) days after the same are sent,
copies of 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 any Credit Party sends to its
stockholders, and within thirty days after the same are filed,
copies of all financial statements and non-confidential reports
which any Credit Party may make to, or file with the Securities and
Exchange Commission or any successor or analogous Governmental
Authority;
(d) promptly upon receipt thereof, a copy of any other
report or "management letter" submitted by independent accountants
to any Credit Party or any of its Subsidiaries in connection with
any annual, interim or special audit of the books of such Person;
and
(e) 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 (including Federal, State, local and any other taxes)
of whatever nature 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
30
reserves, if applicable, in conformity with GAAP with respect thereto have
been provided on the books of the Credit Parties or their 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 existence and cooperative status 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 gross earnings coverage); and furnish to the
Administrative Agent, upon written request, full information as to
the insurance carried; provided, however, that the Credit Parties
-------- -------
and their 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 accounts 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 permit, during regular business hours and upon reasonable
notice by the Administrative Agent or any Lender (such notice not to be
required during the occurrence and continuance of an Event of Default), 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 Credit Parties 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 Credit Parties and their
Subsidiaries with officers and employees of the Credit Parties and their
Subsidiaries and with its independent certified public accountants.
SECTION 5.7 NOTICES.
------------------------------
Give notice in writing to the Administrative Agent (which shall
promptly transmit such notice to each Lender) of:
(a) within five Business Days after any Credit Party knows
or has reason to know thereof, the occurrence of any Default or
Event of Default;
(b) promptly, any default or event of default under any
Contractual Obligation of any Credit Party or any of its
Subsidiaries which could reasonably be expected to have a Material
Adverse Effect;
(c) promptly, any litigation, or any investigation or
proceeding known to any Credit Party, affecting such Credit Party
or any of its Subsidiaries which, if adversely determined, could
reasonably be expected to have a Material Adverse Effect;
(d) as soon as possible and in any event within thirty
(30) days after any Credit Party knows or has reason to know
thereof: (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
31
of any other action by the PBGC or the Borrower or 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) promptly, 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 of the applicable Credit Party setting forth details
of the occurrence referred to therein and stating what action such Credit
Party proposes to take with respect thereto. In the case of any notice of a
Default or Event of Default, the applicable Credit Party 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 4.0 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 2.5 to 1.0.
(c) Consolidated Tangible Net Worth. The Consolidated
-------------------------------
Tangible Net Worth shall not at any time be less than $410,298,000,
increased by the sum of (i) on a cumulative basis as of the end of
each fiscal quarter of the Borrower, commencing with the fiscal
quarter ending June 30, 2004, an amount equal to 50% of
Consolidated Net Income (to the extent positive) for the fiscal
quarter then ended plus (ii) commencing with the fiscal quarter
ending June 30, 2004, an amount equal to 100% of the Net Cash
Proceeds from any Equity Issuance occurring after the Closing Date.
SECTION 5.9 COMPLIANCE WITH LAW.
------------------------------------------
The Credit Parties will, and will cause each of their 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 5.10 INTENTIONALLY OMITTED.
--------------------------------------------
SECTION 5.11 INTENTIONALLY OMITTED.
--------------------------------------------
SECTION 5.12 ADDITIONAL SUBSIDIARY GUARANTORS.
-------------------------------------------------------
The Borrower will cause any and all of its direct and indirect
Material Domestic Subsidiaries, whether newly formed, after acquired or
otherwise existing, to promptly become a Guarantor hereunder by way of
execution of a Joinder Agreement. In connection therewith, the Borrower
shall give notice to the Administrative Agent not less than fifteen (15)
days prior to creating a Subsidiary, or acquiring the Capital Stock of any
other Person. In connection with the foregoing, the Borrower shall deliver
to the Administrative Agent such charter and organizational documents and
opinions of counsel as the Administrative Agent may reasonably request.
32
ARTICLE VI
NEGATIVE COVENANTS
Each Credit Party 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, Facility
Fees and all other amounts owing to the Administrative Agent or any Lender
hereunder, are paid in full, 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, the other Credit Documents and the existing Senior
Notes;
(b) Indebtedness of the Credit Parties and their
Subsidiaries existing as of June 30, 2004 (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 Credit Parties and their
Subsidiaries incurred after June 30, 2004 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 and (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;
(e) Indebtedness secured by Liens to the extent permitted
under subsection (m) of the definition of "Permitted Liens"; or
---------------
(f) other unsecured Indebtedness of the Credit Parties and
their Subsidiaries; 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.
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 or engage in any business other than
the business 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) any Credit Party may merge or consolidate with any
Subsidiary so long as the Credit Party shall be the continuing or
surviving corporation, (ii) any domestic Subsidiary of
33
any Credit Party may be merged with or into any other domestic
Subsidiary of any Credit Party (iii) any Credit Party or any
Subsidiary of any Credit Party may merge with any other Person in
connection with a Permitted Acquisition if such Credit Party 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 and
equipment no longer used or useful in the conduct of any Credit
Party's or any such Subsidiary's business, (iii) the sale or
disposition of Securitization Receivables in connection with a
Securitization Transaction, or (iv) such other Asset Dispositions,
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 any Credit Party and any of its Subsidiaries
during any single fiscal year shall not exceed 15% of the
Consolidated Total Assets 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.
SECTION 6.6 ISSUANCE OF 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 a Credit Party or a Subsidiary of a Credit Party
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 and (iii) transactions relating to a Securitization
Transaction.
(b) Permit any Credit Party 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; ORGANIZATIONAL DOCUMENTS.
------------------------------------------------------------
Change its fiscal year 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.
34
SECTION 6.9 LIMITATION ON RESTRICTED ACTIONS.
-------------------------------------------------------
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 any Credit Party or any of its Subsidiaries, (b) pay
Indebtedness owed to any Credit Party or any of its Subsidiaries, (c) make
loans or advances to any Credit Party or any of its Subsidiaries or (d)
transfer any of its properties or assets to any Credit Party or any of its
Subsidiaries.
SECTION 6.10 RESTRICTED PAYMENTS.
------------------------------------------
Directly or indirectly
(a) pay or declare any dividend, either in cash or
property, on any shares of any class of its capital stock or make
any other distribution on account of any shares of any class of its
capital stock; or
(b) redeem, purchase or otherwise acquire, directly or
indirectly, any shares of its capital stock of any class or any
warrants, rights or options to purchase or acquire any shares of
its capital stock of any class;
(c) make any other payment or distribution, either
directly or indirectly or through any Subsidiary, in respect of its
capital stock;
(d) make any optional prepayment, redemption, defeaseance
or acquisition for value of (including without limitation, by way
of depositing money or securities with the trustee with respect
thereto before due for the purpose of paying when due), or refund,
refinance or exchange of any Funded Debt (all of the foregoing
being herein called "Restricted Payments"),
unless (i) the aggregate amount of all Restricted Payments made during the
period from and after December 31, 1998 to and including the date of the
making of the Restricted Payment in question would not exceed the sum of (x)
$154,000,000 plus (y) 75% of cumulative Consolidated Net Income for such
----
period (or less 100% of cumulative Consolidated Net Income incurred for such
period if such Consolidated Net Income for such period is a deficit figure)
plus (z) the aggregate Net Cash Proceeds of the issuance or sale of the
----
Borrower's capital stock during such period and (ii) no Default or Event of
Default shall have occurred or would occur as a result of such Restricted
Payment. However, so long as no Event of Default shall have occurred and be
continuing nothing herein shall restrict the Borrower's ability to (i)
repurchase capital stock of the Borrower in an aggregate amount of up to
$7,000,000 in any 12-month period and such repurchases of less than
$7,000,000 shall not constitute Restricted Payments and (ii) make payments
or optional prepayments with respect to the Senior Notes.
SECTION 6.11 LIMITATION ON SECURITIZATION TRANSACTIONS.
----------------------------------------------------------------
Permit the aggregate outstanding amount owed by the Borrower or
Subsidiary of the Borrower under Securitization Transactions at any time to
exceed 25% of the Consolidated Total Assets determined as of the end of the
most recently completed fiscal year.
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"):
----------------
35
(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 pay any interest on any Note or any fee
or other amount payable hereunder when due in accordance with the
terms thereof or hereof and such failure shall continue unremedied
for three (3) Business Days; 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
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
(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 such Credit
Party, the Administrative Agent and the Lenders or executed by such
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) Any Credit Party or any of its Subsidiaries shall (i)
default in any payment of principal of or interest on any
Indebtedness (other than the Credit Party Obligations except in
respect of Hedging Agreements) in a principal amount outstanding of
at least $10,000,000 in the aggregate for the Credit Parties and
any of their 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 (other than the Credit Party
Obligations except in respect of Hedging Agreements) in a principal
amount outstanding of at least $10,000,000 in the aggregate for the
Credit Parties and their 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
(e) (i) Any Credit Party 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 any Credit Party
or any Subsidiary shall make a general assignment for the benefit
of its creditors; or (ii) there shall be commenced against any
Credit Party 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
any Credit Party 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) any Credit Party 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) any Credit Party 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
(f) One or more judgments or decrees shall be entered
against any Credit Party or any of its Subsidiaries involving in
the aggregate a liability (to the extent not paid when due or
covered by insurance) of $10,000,000 or more and all such judgments
or decrees shall not have been paid and satisfied, vacated,
discharged, stayed or bonded pending appeal within 10 days from the
entry thereof; or
36
(g) (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 the Borrower 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, any of its Subsidiaries 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
(h) Either (i) any Person or two or more Persons acting in
concert shall have acquired "beneficial ownership," directly or
indirectly, of, or shall have acquired by contract or otherwise, or
shall have entered into a contract or arrangement that, upon
consummation, will result in its or their acquisition of, control
over, Voting Stock of the Borrower (or other securities convertible
into such Voting Stock) representing 25% or more of the combined
voting power of all Voting Stock of the Borrower, or (ii) during
any period of up to 24 consecutive months, commencing after the
Closing Date, individuals who at the beginning of such 24 month
period were directors of the Borrower (together with any new
director whose election by the Borrower's Board of Directors or
whose nomination for election by the Borrower's shareholders was
approved by a vote of at least two-thirds of the directors then
still in office who either were directors at the beginning of such
period or whose election or nomination for election was previously
so approved) cease for any reason to constitute a majority of the
directors of the Borrower then in office. As used herein,
"beneficial ownership" shall have the meaning provided in Rule
13d-3 of the Securities and Exchange Commission under the
Securities Act of 1934; or
(i) Any other Credit Document shall fail to be in full
force and effect or to give the Administrative Agent and/or the
Lenders the security interests, liens, rights, powers and
privileges purported to be created thereby (except as such
documents may be terminated or no longer in force and effect in
accordance with the terms thereof, other than those indemnities and
provisions which by their terms shall survive); or
(j) There shall occur and be continuing any Event of
Default under and as defined in the indentures or other documents
evidencing the Senior Notes.
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(e)
above, automatically the Commitments shall immediately terminate and the
Loans (with accrued interest thereon), and all other amounts under the
Credit Documents 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 Credit Parties
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 Credit Parties, declare the Loans (with accrued interest
thereon) and all other amounts owing under the Credit Documents to be due
and payable forthwith.
37
ARTICLE VIII
THE AGENT
SECTION 8.1 APPOINTMENT.
----------------------------------
Each Lender hereby irrevocably designates and appoints Wachovia
Bank, National Association as the Administrative Agent of such Lender under
this Agreement, and each such Lender irrevocably authorizes Wachovia Bank,
National Association, as the Administrative Agent for such Lender, to take
such action on its behalf under the provisions of this Agreement and to
exercise such powers and perform such duties as are expressly delegated to
the Administrative Agent by the terms of this Agreement, together with such
other powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary elsewhere in this 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 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
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 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 the Borrower or any officer thereof
contained in this 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 Agreement or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency
of any of the Credit Documents or for any failure of the Borrower 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 Borrower of any of the agreements contained
in, or conditions of, this Agreement, or to inspect the properties, books or
records of the Borrower.
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 Borrower), 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 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
38
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 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 the Borrower
referring to this 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 Borrower, 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 Borrower
and made its own decision to make its Loans hereunder and enter into this
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 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 Borrower. 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 Borrower 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 Borrower and without
limiting the obligation of the Borrower 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 Agreement and payment of
the Notes and all other amounts payable hereunder.
39
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
Borrower 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 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 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
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 Agreement.
SECTION 8.10 SYNDICATION AGENTS.
-----------------------------------------
None of the Syndication Agents shall have any right, power, duty or
obligation under this Credit Agreement or any of the other Credit Documents
other than those applicable to all Lenders as such. Without limiting the
foregoing, none of such Lenders shall have or be deemed to have a fiduciary
relationship with any Lender. Each Lender hereby makes the same
acknowledgments with respect to such Lenders as it makes with respect to the
Agent in Section 8.6.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 AMENDMENTS AND WAIVERS.
---------------------------------------------
Neither this 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
Borrower written amendments, supplements or modifications hereto and to the
other Credit Documents for the purpose of adding any provisions to this
Agreement or the other Credit Documents or changing in any manner the rights
of the Lenders or of the Borrower 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 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 (including any mandatory prepayment), 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 beyond the Revolving Commitment
Termination Date, in each case without the written consent
of each Lender directly affected thereby, or
40
(ii) amend, modify or waive any provision of this
Section 9.1 or reduce the percentage specified in the
definition of Required Lenders, 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 all of the Lenders and, provided, further, that
-------- -------
no amendment, waiver or consent affecting the rights or
duties of the Administrative Agent under any Credit
Document shall in any event be effective, unless in
writing and signed by the Administrative Agent in addition
to the Lenders required hereinabove to take such action,
or
(v) release all or substantially all of the
Guarantors from their obligations under Article X hereof,
without the written consent of all of the Lenders, such
consent not to be unreasonably withheld.
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 Borrower 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 Borrower of any such amendment, modification or
waiver. In addition, the Borrower 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 the Borrower, 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 Borrower 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 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 as follows in the case of the Borrower, the other Credit
Parties and the Administrative Agent, and as set forth on Schedule 9.2 in
------------
the case of the Lenders, or to such other address as may be hereafter
notified by the respective parties hereto and any future holders of the
Notes:
41
The Borrower
and the other
Credit Parties: Graybar Electric Company, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇ ▇. ▇▇▇▇, Vice President
and Treasurer
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
The Administrative Wachovia Bank, National Association
Agent: Charlotte Plaza
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇, Syndication Agency
Services
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Wachovia Bank, National Association
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
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
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; INDEMNIFICATION.
---------------------------------------------------------------------
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
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 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 (each an "Indemnified Party") 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
42
whatsoever, even if instigated by a Credit Party, 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 any such Lender, 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 Agreement shall be binding upon and inure to the
benefit of the Borrower, the Lenders, the Administrative Agent, all
future holders of the Notes and their respective successors and
assigns, except that the Borrower may not assign or transfer any of
its rights or obligations under this 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 the
event of any such sale by a Lender of participating interests to a
Participant, such Lender's obligations under this Agreement to the
other parties to this 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 Agreement, and the Borrower 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
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 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) or (ii) consent to the assignment or transfer by
the Borrower of any of its rights and obligations under this
Agreement. In the case of any such participation, the Participant
shall not have any rights under this 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 2.16, 2.17, 2.18 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 Lender or any Affiliate thereof
and with the consent of the Administrative Agent and, so long as no
Event of Default has occurred and is continuing, the Borrower (in
each case, which consent shall not be unreasonably withheld), to
one or more additional banks or financial institutions ("Purchasing
----------
Lenders"), all or any part of its rights and obligations under this
-------
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, in the case of a Purchasing
Lender that is not then a Lender or an affiliate thereof, the
Administrative Agent and, so long as no Event of Default has
occurred and is continuing, the Borrower), and delivered to the
Administrative Agent for its acceptance and recording in the
Register; provided, however, that any sale or assignment to an
-------- -------
existing Lender or any Affiliate of an existing Lender shall not
require the consent of the
43
Administrative Agent or the Borrower nor shall any such sale or
assignment be subject to the minimum assignment amounts specified
herein. 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 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
Agreement, such transferor Lender shall cease to be a party
hereto). Such Commitment Transfer Supplement shall be deemed to
amend this 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
Agreement and the Notes. On or prior to the Transfer Effective Date
specified in such Commitment Transfer Supplement, the Borrower, at
its own expense, 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 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 Borrower authorizes each Lender to disclose to any
Participant or Purchasing Lender (each, a "Transferee") and any
----------
prospective Transferee any and all information in such Lender's
possession concerning the Borrower and its Affiliates which has
been delivered to such Lender by or on behalf of the Borrower
pursuant to this Agreement or which has been delivered to such
Lender by or on behalf of the Borrower in connection with such
Lender's credit evaluation of the Borrower and its Affiliates prior
to becoming a party to this Agreement, in each case subject to
Section 9.16.
(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 2.18 Certificate) described in Section
2.18.
(h) Nothing herein shall prohibit any Lender from pledging
or assigning any of its rights under this 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.
44
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 Borrower, any such notice being expressly waived by the
Borrower 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 the Borrower, or any
part thereof in such amounts as such Lender may elect, against and
on account of the obligations and liabilities of the Borrower to
such Lender hereunder and claims of every nature and description of
such Lender against the Borrower, 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 the Borrower or against any trustee in bankruptcy,
debtor in possession, assignee for the benefit of creditors,
receiver or execution, judgment or attachment creditor of the
Borrower, or against anyone else claiming through or against the
Borrower 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 Borrower 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 Agreement.
SECTION 9.9 COUNTERPARTS.
-----------------------------------
This Agreement may be executed by one or more of the parties to
this 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 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.
45
SECTION 9.11 SEVERABILITY.
-----------------------------------
Any provision of this 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 Agreement and the Notes represent the agreement of the
Borrower, 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 Borrower 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 Agreement and the Notes and the rights and obligations of the
parties under this Agreement and the Notes shall be governed by, and
construed and interpreted in accordance with, the law of the State of New
York.
SECTION 9.14 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
---------------------------------------------------------------------
All judicial proceedings brought against the Borrower and/or any
other Credit Party with respect to this Agreement, any Note or any of the
other Credit Documents may be brought in any state or federal court of
competent jurisdiction in the County of New York, State of New York or any
federal court located in the Southern District of New York, and, by
execution and delivery of this Agreement, each of the Borrower and the other
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 Agreement from which no appeal has
been taken or is available. Each of the Borrower and the other 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 the Borrower and
the other Credit Parties to be effective and binding service in every
respect. Each of the Borrower, the other 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 the
Borrower or the other Credit Parties in the court of any other jurisdiction.
SECTION 9.15 INTENTIONALLY OMITTED.
--------------------------------------------
SECTION 9.16 CONFIDENTIALITY.
--------------------------------------
The Administrative Agent and each of the Lenders agrees that it
will use its reasonable 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 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 9.16, (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 9.16 and shall have agreed to be bound
by its provisions as if it were a party to this Agreement or (e)
46
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 9.17 ACKNOWLEDGMENTS.
--------------------------------------
The Borrower and the other Credit Parties each 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 the Borrower or any
other Credit Party arising out of or in connection with this
Agreement and the relationship between Administrative Agent and
Lenders, on one hand, and the Borrower and the other Credit
Parties, 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 or the other Credit Parties and the Lenders.
SECTION 9.18 WAIVERS OF JURY TRIAL.
--------------------------------------------
THE BORROWER, THE OTHER CREDIT PARTIES, THE ADMINISTRATIVE AGENT
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.
SECTION 9.19 USA PATRIOT ACT NOTICE.
---------------------------------------------
Each Lender and the Administrative Agent (for itself and not on
behalf of any Lender) hereby notifies the Borrower that pursuant to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed
into law October 26, 2001)) (the "Act"), it is required to obtain, verify
---
and record information that identifies the Borrower, which information
includes the name and address of the Borrower and other information that
will allow such Lender or the Administrative Agent, as applicable, to
identify the Borrower in accordance with the Act.
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 any and all Guarantors from the Extensions of Credit
hereunder, each of the Guarantors (i) that becomes a party to this Agreement
pursuant to the terms of Section 5.12 or (ii) that is identified as a
"Guarantor" on the signature pages hereto (it being understood and agreed
that as of the Closing Date the Borrower has no Material Domestic
Subsidiaries, and therefore there are no "Guarantors" identified on the
signature pages hereto) hereby agrees with the Administrative Agent and the
Lenders to 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
Credit Party Obligations. If any or all of the Credit Party Obligations
becomes due and payable hereunder, each Guarantor unconditionally promises
to pay and perform such Credit Party Obligations to the Administrative
Agent, the Lenders, on order, or demand, together with any and all
reasonable expenses which may be incurred by the Administrative Agent or the
Lenders in collecting any of the Credit Party Obligations.
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
47
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
Credit Party Obligations 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 Credit
Party Obligations 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 Credit Party
Obligations 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 Credit Party Obligations 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 any other Guarantor, or (e) any
payment made to the Administrative Agent or the Lenders on the Credit Party
Obligations 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 Credit Party Obligations or any part
thereof in accordance with this Credit Agreement, as applicable, 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 Credit Party Obligations 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 Credit Party Obligations made or created in reliance upon
the professed exercise of such powers shall be guaranteed hereunder.
48
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 Credit Party Obligations (other than
contingent indemnity obligations), 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 Credit Party
Obligations 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
Credit Party Obligations. The Administrative Agent may, at its election,
foreclose on any security held by the Administrative Agent 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 or 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 Credit Party Obligations have
been paid in full and the Commitments have been terminated. Each of the
Guarantors waives any defense arising out of any such election by the
Administrative Agent or any 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 Credit Party Obligations. 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 Credit Party Obligations 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 or any Hedging Agreement
Provider against the Borrower or any other guarantor of the Credit Party
Obligations 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 and unless the
Credit Party Obligations shall have been indefeasibly paid in full. Each of
the Guarantors hereby further agrees not to exercise any right to enforce
any other remedy which the Administrative Agent or any Lender now have or
may hereafter have against any other party, any endorser or any other
guarantor of all or any part of the Credit Party Obligations 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 Credit Party Obligations of the Borrower.
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.
49
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered in Charlotte, North Carolina by its proper
and duly authorized officers as of the day and year first above written.
BORROWER: GRAYBAR ELECTRIC COMPANY, INC.
--------
By:
--------------------------------
Title:
ADMINISTRATIVE AGENT
--------------------
AND LENDERS: WACHOVIA BANK, NATIONAL ASSOCIATION,
----------- as Administrative Agent and as a Lender
By:
--------------------------------------
Name:
Title:
LENDERS:
-------
50