EXHIBIT 10.1
EXECUTION COPY
$330,000,000
CREDIT AGREEMENT
dated as of October 28, 2004,
by and among
▇▇▇▇, INC.,
and the Subsidiaries of ▇▇▇▇, Inc. party hereto,
as Borrowers
the Lenders referred to herein,
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent and Sole Book Manager
BANK OF AMERICA, N.A.,
as Syndication Agent,
BRANCH BANKING AND TRUST COMPANY and
SUNTRUST BANK
as Documentation Agents
and
WACHOVIA CAPITAL MARKETS, LLC and
BANC OF AMERICA SECURITIES, LLC as Co-Lead Arrangers
TABLE OF CONTENTS
ARTICLE I DEFINITIONS..........................................................................1
SECTION 1.1 Definitions......................................................................1
SECTION 1.2 General.........................................................................15
SECTION 1.3 Other Definitions and Provisions................................................15
ARTICLE II REVOLVING CREDIT FACILITY..........................................................15
SECTION 2.1 Revolving Credit Loans..........................................................15
SECTION 2.2 Swingline Loans.................................................................16
SECTION 2.3 Procedure for Advances of Revolving Credit and Swingline Loans..................17
SECTION 2.4 Repayment of Loans..............................................................18
SECTION 2.5 Notes...........................................................................19
SECTION 2.6 Permanent Reduction of the Aggregate Commitment.................................19
SECTION 2.8 Increase of Aggregate Commitment................................................20
ARTICLE III LETTER OF CREDIT FACILITY.........................................................21
SECTION 3.2 Procedure for Issuance of Letters of Credit.....................................22
SECTION 3.3 Fees and Other Charges..........................................................22
SECTION 3.4 L/C Participations..............................................................23
SECTION 3.5 Reimbursement Obligation of the Borrowers.......................................24
SECTION 3.6 Obligations Absolute............................................................25
SECTION 3.7 Effect of Application...........................................................25
ARTICLE IV GENERAL LOAN PROVISIONS............................................................25
SECTION 4.1 Interest........................................................................25
SECTION 4.2 Notice and Manner of Conversion or Continuation of Loans........................28
SECTION 4.3 Fees............................................................................28
SECTION 4.4 Manner of Payment...............................................................29
SECTION 4.5 Crediting of Payments and Proceeds..............................................30
SECTION 4.6 Adjustments.....................................................................30
SECTION 4.7 Nature of Obligations of Lenders Regarding Extensions of Credit; Assumption
by the Administrative Agent.....................................................30
SECTION 4.8 Changed Circumstances...........................................................31
SECTION 4.9 Indemnity.......................................................................33
SECTION 4.10 Capital Requirements............................................................33
SECTION 4.11 Taxes...........................................................................34
ARTICLE V CLOSING; CONDITIONS OF CLOSING AND BORROWING........................................36
SECTION 5.1 Closing.........................................................................36
SECTION 5.2 Conditions to Closing and Initial Extensions of Credit..........................36
SECTION 5.3 Conditions to All Extensions of Credit..........................................38
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE BORROWERS....................................39
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SECTION 6.1 Representations and Warranties..................................................39
SECTION 6.2 Survival of Representations and Warranties, Etc.................................46
ARTICLE VII FINANCIAL INFORMATION AND NOTICES.................................................46
SECTION 7.1 Financial Statements and Projections............................................46
SECTION 7.2 Officer's Compliance Certificate................................................47
SECTION 7.3 Accountants' Certificate........................................................47
SECTION 7.4 Other Reports...................................................................47
SECTION 7.5 Notice of Litigation and Other Matters..........................................47
SECTION 7.6 Accuracy of Information.........................................................48
ARTICLE VIII AFFIRMATIVE COVENANTS............................................................49
SECTION 8.1 Preservation of Corporate Existence and Related Matters.........................49
SECTION 8.2 Maintenance of Property.........................................................49
SECTION 8.3 Insurance.......................................................................49
SECTION 8.4 Accounting Methods and Financial Records........................................49
SECTION 8.5 Payment and Performance of Obligations..........................................49
SECTION 8.6 Compliance With Laws and Approvals..............................................49
SECTION 8.7 Environmental Laws..............................................................50
SECTION 8.8 Compliance with ERISA...........................................................50
SECTION 8.9 Compliance With Agreements......................................................50
SECTION 8.10 Visits and Inspections..........................................................50
SECTION 8.11 Additional Subsidiaries.........................................................51
SECTION 8.12 Use of Proceeds.................................................................51
SECTION 8.13 Further Assurances..............................................................51
ARTICLE IX FINANCIAL COVENANTS................................................................51
SECTION 9.1 Leverage Ratio..................................................................51
SECTION 9.2 Fixed Charge Coverage Ratio.....................................................51
ARTICLE X NEGATIVE COVENANTS..................................................................52
SECTION 10.1 Limitations on Debt.............................................................52
SECTION 10.2 Limitations on Liens............................................................53
SECTION 10.3 Limitations on Loans, Advances, Investments and Acquisitions....................54
SECTION 10.4 Limitations on Mergers and Liquidation..........................................55
SECTION 10.5 Limitations on Sale of Assets...................................................56
SECTION 10.6 Limitations on Dividends and Distributions......................................56
SECTION 10.7 Limitations on Exchange and Issuance of Capital Stock...........................57
SECTION 10.8 Transactions with Affiliates....................................................57
SECTION 10.9 Certain Accounting Changes; Organizational Documents............................57
SECTION 10.10 Amendments; Payments and Prepayments of Subordinated Debt.......................57
SECTION 10.11 Restrictive Agreements..........................................................58
SECTION 10.12 Nature of Business..............................................................58
ARTICLE XI DEFAULT AND REMEDIES...............................................................58
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SECTION 11.1 Events of Default...............................................................58
SECTION 11.2 Remedies........................................................................60
SECTION 11.3 Rights and Remedies Cumulative; Non-Waiver; etc.................................61
ARTICLE XII THE ADMINISTRATIVE AGENT..........................................................62
SECTION 12.1 Appointment.....................................................................62
SECTION 12.2 Delegation of Duties............................................................62
SECTION 12.3 Exculpatory Provisions..........................................................62
SECTION 12.4 Reliance by the Administrative Agent............................................62
SECTION 12.5 Notice of Default...............................................................63
SECTION 12.6 Non-Reliance on the Administrative Agent and Other Lenders......................63
SECTION 12.7 Indemnification.................................................................64
SECTION 12.8 The Administrative Agent in Its Individual Capacity.............................64
SECTION 12.9 Resignation of the Administrative Agent; Successor Administrative Agent.........64
ARTICLE XIII MISCELLANEOUS....................................................................65
SECTION 13.1 Notices.........................................................................65
SECTION 13.2 Expenses; Indemnity.............................................................67
SECTION 13.3 Set-off.........................................................................67
SECTION 13.4 Governing Law...................................................................68
SECTION 13.5 Jurisdiction and Venue..........................................................68
SECTION 13.6 Reversal of Payments............................................................68
SECTION 13.7 Injunctive Relief; Punitive Damages.............................................69
SECTION 13.8 Accounting Matters..............................................................69
SECTION 13.9 Successors and Assigns; Participations..........................................69
SECTION 13.10 Amendments, Waivers and Consents................................................73
SECTION 13.11 Performance of Duties...........................................................73
SECTION 13.12 All Powers Coupled with Interest................................................73
SECTION 13.13 Survival of Indemnities.........................................................74
SECTION 13.14 Titles and Captions.............................................................74
SECTION 13.15 Severability of Provisions......................................................74
SECTION 13.16 Counterparts....................................................................74
SECTION 13.17 Term of Agreement...............................................................74
SECTION 13.18 Advice of Counsel...............................................................74
SECTION 13.19 No Strict Construction..........................................................74
SECTION 13.20 Inconsistencies with Other Documents; Independent Effect of Covenants...........75
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EXHIBITS
Exhibit A-1 - Form of Revolving Credit Note
Exhibit A-2 - Form of Swingline Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Notice of Account Designation
Exhibit D - Form of Notice of Repayment
Exhibit E - Form of Notice of Conversion/Continuation
Exhibit F - Form of Officer's Compliance Certificate
Exhibit G - Form of Assignment and Acceptance
SCHEDULES
Schedule 6.1(a) - Jurisdictions of Organization and Qualification
Schedule 6.1(b) - Subsidiaries and Capitalization
Schedule 6.1(i) - ERISA Plans
Schedule 6.1(f) Ongoing Tax Audits
Schedule 6.1(l) - Material Contracts
Schedule 6.1(m) - Labor and Collective Bargaining Agreements
Schedule 6.1(t) - Debt and Guaranty Obligations
Schedule 6.1(u) - Litigation
Schedule 8.3 Insurance
Schedule 10.2 - Existing Liens
Schedule 10.3 Existing Investments
Schedule 10.8 - Transactions with Affiliates
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CREDIT AGREEMENT, dated as of the 28th day of October, 2004, by and
among ▇▇▇▇, INC., a Delaware corporation (the "Company"), the Subsidiaries of
the Company listed on the signature pages hereto and each additional Subsidiary
of the Company which hereafter becomes a Borrower pursuant to Section 8.11
(collectively, the "Subsidiary Borrowers" and together with the Company, the
"Borrowers"), the lenders who are or may become a party to this Agreement, as
Lenders and WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association,
as Administrative Agent for the Lenders, BANK OF AMERICA, N.A. as Syndication
Agent and BRANCH BANKING AND TRUST COMPANY and SUNTRUST BANK, as Documentation
Agents.
STATEMENT OF PURPOSE
The Borrowers have requested, and, subject to the terms and conditions
hereof, the Lenders have agreed, to extend certain credit facilities to the
Borrowers.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, such parties
hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions. The following terms when used in this
Agreement shall have the meanings assigned to them below:
"Additional Debt" means, with respect to any Borrower or any Subsidiary
and to the extent not included as a liability on the consolidated balance sheet
of such Borrower or Subsidiary, in accordance with GAAP, any monetary obligation
(including, without limitation, all outstanding payment, recourse, repurchase,
hold harmless, indemnity or similar obligations) with respect to any Synthetic
Lease transaction, tax retention or off-balance sheet lease transaction, asset
securitization transaction (including any accounts receivable purchase facility)
or any other monetary obligation arising with respect to any other transaction
which does not appear on the balance sheet of such Borrower or Subsidiary, but
which (i) upon the insolvency or bankruptcy of such Borrower or Subsidiary would
be characterized as debt of such Borrower or Subsidiary or (ii) is the
functional equivalent of or takes the place of borrowing.
"Adjusted Debt" means the sum of (i) Funded Debt and (ii) the product
of (x) Rental Expense and (y) eight (8).
"Administrative Agent" means Wachovia in its capacity as Administrative
Agent hereunder, and any successor thereto appointed pursuant to Section 12.9.
"Administrative Agent's Office" means the office of the Administrative
Agent specified in or determined in accordance with the provisions of Section
13.1(c).
"Affiliate" means, with respect to any Person, any other Person (other
than a Borrower or a Subsidiary of a Borrower) which directly or indirectly
through one or more intermediaries, controls, or is controlled by, or is under
common control with, such first Person or any of its Subsidiaries. The term
"control" means (a) the power to vote five percent (5%) or more of the
securities or other equity interests of a Person having ordinary voting power,
or (b) the possession, directly or indirectly, of any other power to direct or
cause the direction of the management and policies of a Person, whether through
ownership of voting securities, by contract or otherwise.
"Aggregate Commitment" means the aggregate amount of the Lenders'
Revolving Credit Commitments hereunder, as such amount may be reduced, increased
or otherwise modified at any time or from time to time pursuant to the terms
hereof. On the Closing Date, the Aggregate Commitment shall be Three Hundred
Thirty Million and No/100 Dollars ($330,000,000).
"Agreement" means this Credit Agreement, as amended, restated,
supplemented or otherwise modified from time to time.
"Applicable Law" means all applicable provisions of constitutions,
laws, statutes, ordinances, rules, treaties, regulations, permits, licenses,
approvals, interpretations and orders of courts or Governmental Authorities and
all orders and decrees of all courts and arbitrators.
"Applicable Margin" shall have the meaning assigned thereto in Section
4.1(c).
"Application" means an application, in the form specified by the
Issuing Lender from time to time, requesting the Issuing Lender to issue a
Letter of Credit.
"Assignment and Acceptance" shall have the meaning assigned thereto in
Section 13.9.
"Available Revolving Credit Commitment" means, as to any Lender at any
time, an amount equal to (a) such Lender's Revolving Credit Commitment less (b)
such Lender's Extensions of Credit.
"Base Rate" means, at any time, the higher of (a) the Prime Rate and
(b) the Federal Funds Rate plus 1/2 of 1%; each change in the Base Rate shall
take effect simultaneously with the corresponding change or changes in the Prime
Rate or the Federal Funds Rate.
"Base Rate Loan" means any Loan bearing interest at a rate based upon
the Base Rate as provided in Section 4.1(a).
"Benefited Lender" shall have the meaning assigned thereto in Section
4.6.
"Borrowers" shall have the meaning assigned thereto in the preamble
hereof.
"Business Day" means (a) for all purposes other than as set forth in
clause (b) below, any day other than a Saturday, Sunday or legal holiday on
which banks in Charlotte, North Carolina and New York, New York, are open for
the conduct of their commercial banking business, and (b) with respect to all
notices and determinations in connection with, and payments of principal and
interest
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on, any LIBOR Rate Loan, any day that is a Business Day described in clause (a)
and that is also a day for trading by and between banks in Dollar deposits in
the London interbank market.
"Calculation Date" shall have the meaning assigned thereto in Section
4.1(c).
"Capital Asset" means, with respect to the Borrowers and their
Subsidiaries, any asset that should, in accordance with GAAP, be classified and
accounted for as a capital asset on a Consolidated balance sheet of the
Borrowers and their Subsidiaries.
"Capital Lease" means any lease of any property by any of the Borrowers
or any of their Subsidiaries, as lessee, that should, in accordance with GAAP,
be classified and accounted for as a capital lease on a Consolidated balance
sheet of the Borrowers and their Subsidiaries.
"Cash Collateral Account" means an account established by the Borrowers
with the Issuing Lender for the benefit of the Issuing Lender and the L/C
Participants.
"Change in Control" shall have the meaning assigned thereto in Section
11.1(i).
"Closing Date" means the date of this Agreement or such later Business
Day upon which each condition described in Section 5.2 shall be satisfied or
waived in all respects in a manner acceptable to the Administrative Agent, in
its sole discretion.
"Code" means the Internal Revenue Code of 1986, and the rules and
regulations thereunder, each as amended or modified from time to time.
"Company" shall have the meaning assigned thereto in the preamble
hereof.
"Consolidated" means, when used with reference to financial statements
or financial statement items of the Borrowers and their Subsidiaries, such
statements or items on a consolidated basis in accordance with applicable
principles of consolidation under GAAP.
"Credit Facility" means, collectively, the Revolving Credit Facility,
the Swingline Facility and the L/C Facility.
"Debt" means, with respect to the Borrowers and their Subsidiaries at
any date and without duplication, the sum of the following calculated in
accordance with GAAP: (a) all Funded Debt, (b) all Additional Debt, (c) all
obligations to pay the deferred purchase price of property or services of any
such Person (including, without limitation, all obligations under
non-competition agreements), except trade payables arising in the ordinary
course of business not more than ninety (90) days past due, (d) all Debt of any
other Person secured by a Lien on any asset of any such Person, (e) all Guaranty
Obligations of any such Person, (f) all obligations, contingent or otherwise, of
any such Person relative to the face amount of letters of credit, whether or not
drawn, including, without limitation, any Reimbursement Obligation, and banker's
acceptances issued for the account of any such Person, (g) all obligations of
any such Person to redeem, repurchase, exchange, defease or otherwise make
payments in respect of capital stock or other securities or partnership
interests of
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such Person and (h) all net payment obligations incurred by any such Person
pursuant to Hedging Agreements.
"Default" means any of the events specified in Section 11.1 which with
the passage of time, the giving of notice or any other condition, would
constitute an Event of Default.
"Documentation Agent" means each of Branch Banking and Trust Company
and SunTrust Bank in their capacity as a Documentation Agent hereunder.
"Dollars" or "$" means, unless otherwise qualified, dollars in lawful
currency of the United States.
"EBITDA" means, for any period, the sum of the following determined on
a Consolidated basis, without duplication, for the Borrowers and their
Subsidiaries in accordance with GAAP: (a) Net Income for such period plus (b)
the sum of the following to the extent deducted in determining Net Income: (i)
income and franchise taxes, (ii) Interest Expense, and (iii) amortization,
depreciation, and other non-cash charges, including those related to the closing
of store locations less (c) interest income and any extraordinary gains.
"EBITDAR" means, for any period, the sum of the following determined on
a Consolidated basis, without duplication, for the Borrowers and their
Subsidiaries in accordance with GAAP: (a) EBITDA for such period plus (b) Rental
Expense.
"Eligible Assignee" means, with respect to any assignment of the
rights, interest and obligations of a Lender hereunder, a Person that is at the
time of such assignment (a) a commercial bank organized under the laws of the
United States or any state thereof, having combined capital and surplus in
excess of $500,000,000, (b) a commercial bank organized under the laws of any
other country that is a member of the Organization of Economic Cooperation and
Development, or a political subdivision of any such country, having combined
capital and surplus in excess of $500,000,000, (c) a finance company, insurance
company or other financial institution which in the ordinary course of business
extends credit of the type extended hereunder and that has total assets in
excess of $1,000,000,000, (d) already a Lender hereunder (whether as an original
party to this Agreement or as the assignee of another Lender), (e) the successor
(whether by transfer of assets, merger or otherwise) to all or substantially all
of the commercial lending business of the assigning Lender, (f) any Affiliate of
assigning Lender or (g) any other Person that has been approved in writing as an
Eligible Assignee by the Company (other than upon the occurrence and during the
continuance of any Default or Event of Default) and the Administrative Agent.
"Employee Benefit Plan" means any employee benefit plan within the
meaning of Section 3(3) of ERISA which (a) is maintained for employees of any
Borrower or any ERISA Affiliate or (b) has at any time within the preceding six
(6) years been maintained for the employees of any Borrower or any current or
former ERISA Affiliate.
"Environmental Claims" means any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens, accusations,
allegations, notices of noncompliance or violation, investigations (other than
internal reports prepared by any Person in the ordinary course
4
of business and not in response to any third party action or request of any
kind) or proceedings relating in any way to any actual or alleged violation of
or liability under any Environmental Law or relating to any permit issued, or
any approval given, under any such Environmental Law, including, without
limitation, any and all claims by Governmental Authorities for enforcement,
cleanup, removal, response, remedial or other actions or damages, contribution,
indemnification cost recovery, compensation or injunctive relief resulting from
Hazardous Materials or arising from alleged injury or threat of injury to human
health or the environment.
"Environmental Laws" means any and all federal, foreign, state,
provincial and local laws, statutes, ordinances, rules, regulations, permits,
licenses, approvals, interpretations and orders of courts or Governmental
Authorities, relating to the protection of human health or the environment,
including, but not limited to, requirements pertaining to the manufacture,
processing, distribution, use, treatment, storage, disposal, transportation,
handling, reporting, licensing, permitting, investigation or remediation of
Hazardous Materials.
"ERISA" means the Employee Retirement Income Security Act of 1974, and
the rules and regulations thereunder, each as amended, or modified from time to
time.
"ERISA Affiliate" means any Person who together with any Borrower is
treated as a single employer within the meaning of Section 414(b), (c), (m) or
(o) of the Code or Section 4001(b) of ERISA.
"Eurodollar Reserve Percentage" means, for any day, the percentage
(expressed as a decimal and rounded upwards, if necessary, to the next higher
1/100th of 1%) which is in effect for such day as prescribed by the Federal
Reserve Board (or any successor) for determining the maximum reserve requirement
(including without limitation any basic, supplemental or emergency reserves) in
respect of eurocurrency liabilities or any similar category of liabilities for a
member bank of the Federal Reserve System in New York City.
"Event of Default" means any of the events specified in Section 11.1,
provided that any requirement for passage of time, giving of notice, or any
other condition, has been satisfied.
"Existing Credit Agreement" means the Credit Agreement, dated as of
June 28, 2002 (as amended, restated or otherwise modified from time to time
prior to the date hereof), among the Borrowers and the lenders party thereto.
"Existing L/C Termination Date" shall have the meaning assigned thereto
in Section 3.1(b).
"Existing Letter of Credit" means the standby letter of credit, dated
July 1, 1998 in a face of amount of $126,849,316 issued by First Union National
Bank (now Wachovia) to support the obligations of the Company to the trustee
under the Trust Indenture, dated as of July 1, 1998 between the Company, as
Borrower and First Union National Bank, as Trustee, as amended, restated,
supplemented or otherwise modified from time to time.
"Existing Letter of Credit Documents" means the Letter of Credit and
Reimbursement Agreement dated as of July 1, 1998 between the Company and First
Union National Bank (now
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Wachovia) with respect to the Existing Letter of Credit and all instruments and
agreements executed in connection therewith, as amended and restated by the
Amended and Restated Letter of Credit and Reimbursement Agreement by and among
the Borrowers and the Administrative Agent dated as of June 28, 2002.
"Extensions of Credit" means, as to any Lender at any time, (a) an
amount equal to the sum of (i) the aggregate principal amount of all Revolving
Credit Loans made by such Lender then outstanding, (ii) such Lender's Revolving
Credit Commitment Percentage of the L/C Obligations then outstanding and (iii)
such Lender's Revolving Credit Commitment Percentage of the Swingline Loans then
outstanding or (b) the making of any Loan or participation in any Letters of
Credit by such Lender, as the context requires.
"FDIC" means the Federal Deposit Insurance Corporation, or any
successor thereto.
"Federal Funds Rate" means, the rate per annum (rounded upwards, if
necessary, to the next higher 1/100th of 1%) representing the daily effective
federal funds rate as quoted by the Administrative Agent and confirmed in
Federal Reserve Board Statistical Release H.15 (519) or any successor or
substitute publication selected by the Administrative Agent. If, for any reason,
such rate is not available, then "Federal Funds Rate" shall mean a daily rate
which is determined, in the opinion of the Administrative Agent, to be the rate
at which federal funds are being offered for sale in the national federal funds
market at 9:00 a.m. (Eastern time). Rates for weekends or holidays shall be the
same as the rate for the most immediately preceding Business Day.
"Fiscal Year" means the fiscal year of the Borrowers and their
Subsidiaries ending on the Saturday closest to January 31 (whether such Saturday
occurs in January or February).
"Fixed Charges" means, for any period, the sum of the following
determined on a Consolidated basis, without duplication, for the Borrowers and
their Subsidiaries in accordance with GAAP: (a) Interest Expense, (b) Rental
Expense and (c) cash dividends and distributions (excluding repurchases of the
Company's stock permitted pursuant to Section 10.6(d)).
"Fixed Charge Coverage Ratio" means, as of the end of any fiscal
quarter of the Borrowers, the ratio of (a) EBITDAR for the period of four (4)
consecutive fiscal quarters ending on or immediately prior to such date to (b)
Fixed Charges for the period of four (4) consecutive fiscal quarters ending on
or immediately prior to such date.
"Funded Debt" means all liabilities, obligations and indebtedness of
the Borrowers for borrowed money including, but not limited to, obligations
evidenced by bonds, debentures, notes or other similar instruments and all
obligations under Capital Leases.
"GAAP" means generally accepted accounting principles, as recognized by
the American Institute of Certified Public Accountants and the Financial
Accounting Standards Board, consistently applied and maintained on a consistent
basis for the Borrowers and their Subsidiaries throughout the period indicated
and (subject to Section 13.8) consistent with the prior financial practice of
the Borrowers and their Subsidiaries.
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"Governmental Approvals" means all authorizations, consents, approvals,
licenses and exemptions of, registrations and filings with, and reports to, all
Governmental Authorities.
"Governmental Authority" means any nation, province, state or political
subdivision thereof, and any government or any Person exercising executive,
legislative, regulatory or administrative functions of or pertaining to
government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"Guaranty Obligation" means, with respect to the Borrowers and their
Subsidiaries, without duplication, any obligation, contingent or otherwise, of
any such Person pursuant to which such Person has directly or indirectly
guaranteed any Debt or other obligation of any other Person and, without
limiting the generality of the foregoing, any obligation, direct or indirect,
contingent or otherwise, of any such Person (a) to purchase or pay (or advance
or supply funds for the purchase or payment of) such Debt or other obligation
(whether arising by virtue of partnership arrangements, by agreement to keep
well, to purchase assets, goods, securities or services, to take-or-pay, or to
maintain financial statement condition or otherwise) or (b) entered into for the
purpose of assuring in any other manner the obligee of such Debt or other
obligation of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part); provided, that the term Guaranty
Obligation shall not include endorsements for collection or deposit in the
ordinary course of business.
"Hazardous Materials" means any substances or materials (a) which are
or become defined as hazardous wastes, hazardous substances, pollutants,
contaminants, chemical substances or mixtures or toxic substances under any
Environmental Law, (b) which are toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic or otherwise harmful to human
health or the environment and are or become regulated by any Governmental
Authority, (c) the presence of which require investigation or remediation under
any Environmental Law or common law, (d) the discharge or emission or release of
which requires a permit or license under any Environmental Law or other
Governmental Approval, (e) which are deemed to constitute a nuisance or a
trespass which pose a health or safety hazard to Persons or neighboring
properties, (f) which consist of underground or aboveground storage tanks,
whether empty, filled or partially filled with any substance, or (g) which
contain, without limitation, asbestos, polychlorinated biphenyls, urea
formaldehyde foam insulation, petroleum hydrocarbons, petroleum derived
substances or waste, crude oil, nuclear fuel, natural gas or synthetic gas.
"Hedging Agreement" means any agreement with respect to any Interest
Rate Contract, agreement, commodity swap, forward foreign exchange agreement,
currency swap agreement, cross-currency rate swap agreement, currency option
agreement or other agreement or arrangement designed to alter the risks of any
Person arising from fluctuations in rates, currency values or commodity prices,
all as amended, restated, supplemented or otherwise modified from time to time.
"Interest Expense" means, with respect to the Borrowers and their
Subsidiaries for any period, the gross interest expense (including, without
limitation, interest expense attributable to Capital Leases and all net payment
obligations pursuant to Hedging Agreements) of the Borrowers and their
Subsidiaries, all determined for such period on a Consolidated basis, without
duplication, in accordance with GAAP.
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"Interest Period" shall have the meaning assigned thereto in Section
4.1(b).
"Interest Rate Contract" means any interest rate swap agreement,
interest rate cap agreement, interest rate floor agreement, interest rate collar
agreement, interest rate option or any other agreement regarding the hedging of
interest rate risk exposure executed in connection with hedging the interest
rate exposure of any Person and any confirming letter executed pursuant to such
agreement, all as amended, restated, supplemented or otherwise modified from
time to time.
"ISP 98" means, the International Standby Practices (1998 Revision,
effective January 1, 1999), International Chamber of Commerce Publication No.
590, as amended.
"Issuing Lender" means Wachovia or Bank of America, N.A. in their
respective capacities as an issuer of any Letter of Credit, or any successor
thereto.
"Joinder Agreement" means, collectively, each joinder agreement in form
and substance acceptable to the Administrative Agent executed in favor of the
Administrative Agent for the ratable benefit of itself and the Lenders.
"L/C Commitment" means the lesser of (a) Two Hundred Twenty-Five
Million Dollars ($225,000,000) and (b) the Aggregate Commitment.
"L/C Facility" means the letter of credit facility established pursuant
to Article III.
"L/C Obligations" means at any time, an amount equal to the sum of (a)
the aggregate undrawn and unexpired amount of the then outstanding Letters of
Credit and (b) the aggregate amount of drawings under Letters of Credit which
have not then been reimbursed pursuant to Section 3.5.
"L/C Participant" means the collective reference to all the Lenders
other than the applicable Issuing Lender.
"Lender" means each Person executing this Agreement as a Lender
(including, without limitation, the Issuing Lender and the Swingline Lender
unless the context otherwise requires) set forth on the signature pages hereto,
each Person that hereafter becomes a party to this Agreement as a Lender
pursuant to Section 13.9, and each New Lender.
"Lending Office" means, with respect to any Lender, the office of such
Lender maintaining such Lender's Extensions of Credit.
"Letters of Credit" shall mean the collective reference to the Existing
Letter of Credit and any letter of credit issued by an Issuing Lender pursuant
to the terms of this Agreement, as such Letters of Credit may be amended,
modified, extended, renewed or replaced from time to time.
"Leverage Ratio" shall have the meaning assigned thereto in Section
9.1.
8
"LIBOR" means the rate of interest per annum determined on the basis of
the rate for deposits in Dollars in minimum amounts of at least $5,000,000 for a
period equal to the applicable Interest Period which appears on the Dow ▇▇▇▇▇
Market Screen 3750 at approximately 11:00 a.m. (London time) two (2) Business
Days prior to the first day of the applicable Interest Period (rounded upward,
if necessary, to the nearest 1/100th of 1%). If, for any reason, such rate does
not appear on Dow ▇▇▇▇▇ Market Screen 3750, then "LIBOR" shall be determined by
the Administrative Agent to be the arithmetic average of the rate per annum at
which deposits in Dollars in minimum amounts of at least $5,000,000 would be
offered by first class banks in the London interbank market to the
Administrative Agent at approximately 11:00 a.m. (London time) two (2) Business
Days prior to the first day of the applicable Interest Period for a period equal
to such Interest Period. Each calculation by the Administrative Agent of LIBOR
shall be conclusive and binding for all purposes, absent manifest error.
"LIBOR Rate" means 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" means any Loan bearing interest at a rate based upon
the LIBOR Rate as provided in Section 4.1(a).
"Lien" means, with respect to any asset, any mortgage, leasehold
mortgage, lien, pledge, charge, security interest, hypothecation or encumbrance
of any kind in respect of such asset. For the purposes of this Agreement, a
Person shall be deemed to own subject to a Lien any asset which it has acquired
or holds subject to the interest of a vendor or lessor under any conditional
sale agreement, Capital Lease or other title retention agreement relating to
such asset.
"Loan Documents" means, collectively, this Agreement, the Notes, the
Swingline Side Letter, the Applications, the Existing Letter of Credit, the
Existing Letter of Credit Documents, each Joinder Agreement and each other
document, instrument, certificate and agreement executed and delivered by the
Borrowers or any of their Subsidiaries in connection with any of the foregoing
or otherwise referred to herein or contemplated hereby (excluding any Hedging
Agreement), all as may be amended, restated, supplemented or otherwise modified
from time to time.
"Loans" means the collective reference to the Revolving Credit Loans
and the Swingline Loans and "Loan" means any of such Loans.
"Material Adverse Effect" means, with respect to the Borrowers or any
of their Subsidiaries, a material adverse effect on the properties, business,
prospects, operations or condition (financial or otherwise) of any such Person
or the ability of any such Person to perform its obligations under the Loan
Documents or Material Contracts, in each case to which it is a party.
"Material Contract" means (a) any contract or other agreement, written
or oral, of any Borrower or any of its Subsidiaries involving monetary liability
of or to any such Person in an amount in excess of $10,000,000 per annum, or (b)
any other contract or agreement, written or oral,
9
of any Borrower or any of its Subsidiaries the failure to comply with which
could reasonably be expected to have a Material Adverse Effect.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which any Borrower or any ERISA Affiliate is making, or
is accruing an obligation to make, or has accrued an obligation to make
contributions within the preceding six (6) years.
"Net Income" means, with respect to the Borrowers and their
Subsidiaries, for any period of determination, the net income (or loss) of the
Borrowers and their Subsidiaries for such period, determined on a Consolidated
basis in accordance with GAAP; provided that there shall be excluded from Net
Income (a) the net income (or loss) of any Person (other than a Subsidiary which
shall be subject to clause (c) below), in which any Borrower or any of its
Subsidiaries has a joint interest with a third party, except to the extent such
net income is actually paid to such Borrower or any of its Subsidiaries by
dividend or other distribution during such period, (b) the net income (or loss)
of any Person accrued prior to the date it becomes a Subsidiary of such Person
or is merged into or consolidated with such Person or any of its Subsidiaries or
that Person's assets are acquired by such Person or any of its Subsidiaries
except to the extent included pursuant to the foregoing clause (a), (c) the net
income (if positive) of any Subsidiary to the extent that the declaration or
payment of dividends or similar distributions by such Subsidiary to any Borrower
or any of its Subsidiaries of such net income (i) is not at the time permitted
by operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute rule or governmental regulation applicable to such
Subsidiary or (ii) would be subject to any taxes payable on such dividends or
distributions.
"Net Worth" means the amount of assets shown on the Consolidated
balance sheet of the Borrowers and their Subsidiaries (including any items which
would be treated as intangibles under GAAP, including, but not limited to
capitalized interest, debt discount and expense, goodwill, patents, trademarks,
copyrights, licenses and franchises), less all liabilities of the Borrowers and
their Subsidiaries, all computed in accordance with GAAP, applied on a
consistent basis (such calculation shall exclude any non-cash increase or
decrease to the Prepaid Pension Asset account, as required by GAAP).
"New Lender" shall have the meaning assigned thereto in Section 2.8(b).
"Notes" means the collective reference to the Revolving Credit Notes
and Swingline Notes and "Note" means any of such Notes.
"Notice of Account Designation" shall have the meaning assigned thereto
in Section 2.3(b).
"Notice of Borrowing" shall have the meaning assigned thereto in
Section 2.3(a).
"Notice of Conversion/Continuation" shall have the meaning assigned
thereto in Section 4.2.
"Notice of Repayment" shall have the meaning assigned thereto in
Section 2.4(c).
10
"Obligations" means, in each case, whether now in existence or
hereafter arising: (a) the principal of and interest on (including interest
accruing after the filing of any bankruptcy or similar petition) the Loans, (b)
the L/C Obligations, (c) all existing or future payment and other obligations
owing by any Borrower under any Hedging Agreement (which such Hedging Agreement
is permitted hereunder) with any Person that is a Lender hereunder at the time
such Hedging Agreement is executed (all such obligations with respect to any
such Hedging Agreement, "Hedging Obligations") and (d) all other fees and
commissions (including attorneys' fees), charges, indebtedness, loans,
liabilities, financial accommodations, obligations, covenants and duties owing
by any Borrower or any of its Subsidiaries to the Lenders or the Administrative
Agent, in each case under or in respect of this Agreement, any Note, any Letter
of Credit or any of the other Loan Documents of every kind, nature and
description, direct or indirect, absolute or contingent, due or to become due,
contractual or tortious, liquidated or unliquidated, and whether or not
evidenced by any note.
"Officer's Compliance Certificate" shall have the meaning assigned
thereto in Section 7.2.
"Operating Lease" shall mean, as to any Person as determined in
accordance with GAAP, any lease of property (whether real, personal or mixed) by
such Person as lessee which is not a Capital Lease.
"Other Taxes" shall have the meaning assigned thereto in Section
4.11(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
agency.
"Pension Plan" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to the provisions of Title IV of ERISA or
Section 412 of the Code and which (a) is maintained for the employees of any
Borrower or any ERISA Affiliates or (b) has at any time within the preceding six
(6) years been maintained for the employees of any Borrower or any of its
current or former ERISA Affiliates.
"Person" means an individual, corporation, limited liability company,
partnership, association, trust, business trust, joint venture, joint stock
company, pool, syndicate, sole proprietorship, unincorporated organization,
Governmental Authority or any other form of entity or group thereof.
"Prepaid Pension Asset" as of any date of determination, means the fair
value of the Pension Plans' assets plus unrecognized gains/losses, prior service
costs, and any unrecognized net obligation or asset from transitions in excess
of the projected benefit obligations, all determined in accordance with
Financial Accounting Standard No. 87-"Employer's Accounting for Pensions.
"Prime Rate" means, at any time, the rate of interest per annum
publicly announced from time to time by Wachovia 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 such 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.
11
"Receivables Purchase Facility" means the Note Purchase and Security
Agreement dated May 3, 1999 by and between Enterprise Funding Corporation, the
Company, The ▇▇▇▇ Center, Inc. and Bank of America, N.A. , as amended.
"Register" shall have the meaning assigned thereto in Section 13.9(d).
"Reimbursement Obligation" means the obligation of the Borrowers to
reimburse the Issuing Lender pursuant to Section 3.5 for amounts drawn under
Letters of Credit.
"Required Lenders" means at any date, any combination of Lenders whose
Revolving Credit Commitments constitute more than fifty percent (50%) of the
Aggregate Commitment (or, if the Credit Facility has been terminated pursuant to
Section 11.2, any combination of Lenders holding more than fifty percent (50%)
of the aggregate outstanding Extensions of Credit; provided, that at any time
there are six (6) or more Lenders, Required Lenders shall be comprised of at
least three (3) Lenders.
"Rental Expense" means payments made pursuant to all obligations of the
Borrowers and their Subsidiaries under leases of real property or personal
property, whether now existing or hereafter entered into.
"Responsible Officer" means any of the following: the chief executive
officer or chief financial officer of a Borrower or any other officer of a
Borrower reasonably acceptable to the Administrative Agent.
"Revolving Credit Commitment" means, as to any Lender, the obligation
of such Lender to make Loans to and issue or participate in Letters of Credit
issued for the account of the Borrowers hereunder in an aggregate principal or
face amount at any time outstanding not to exceed the amount set forth in the
Register, as the same may be reduced or modified at any time or from time to
time pursuant to the terms hereof.
"Revolving Credit Commitment Percentage" means, as to any Lender at any
time, the ratio of (a) the amount of the Revolving Credit Commitment of such
Lender to (b) the Aggregate Commitment.
"Revolving Credit Facility" means the revolving credit facility
established pursuant to Article II.
"Revolving Credit Loans" means any revolving loan made to the Borrowers
pursuant to Section 2.1 and Section 2.8, and all such revolving loans
collectively as the context requires.
"Revolving Credit Notes" means the collective reference to the
Revolving Credit Notes made by the Borrowers payable to the order of each
Lender, substantially in the form of Exhibit A-1 hereto, evidencing the
Revolving Credit Facility, and any amendments, supplements and modifications
thereto, any substitutes therefor, and any replacements, restatements, renewals
or extension thereof, in whole or in part; "Revolving Credit Note" means any of
such Revolving Credit Notes.
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"Revolving Credit Termination Date" means the earliest of the dates
referred to in Section 2.7.
"Series 1998 Revenue Bonds" means the ▇▇▇▇, Inc. Taxable Variable Rate
Demand Revenue Bonds, Series 1998, issued by ▇▇▇▇, Inc.
"Solvent" means, as to any Borrower and its Subsidiaries on a
particular date, that any such Person (a) has capital sufficient to carry on its
business and transactions and all business and transactions in which it is about
to engage and is able to pay its debts as they mature, (b) owns property having
a value, both at fair valuation and at present fair saleable value, greater than
the amount required to pay its probable liabilities (including contingencies),
and (c) does not believe that it will incur debts or liabilities beyond its
ability to pay such debts or liabilities as they mature.
"Subordinated Debt" means the collective reference to any Debt of any
Borrower or any Subsidiary subordinated in right and time of payment to the
Obligations and containing such other terms and conditions, in each case as are
satisfactory to the Required Lenders.
"Subsidiary" means as to any Person, any corporation, partnership,
limited liability company or other entity of which more than fifty percent (50%)
of the outstanding capital stock or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other managers of
such corporation, partnership, limited liability company or other entity is at
the time owned by or the management is otherwise controlled by such Person
(irrespective of whether, at the time, capital stock or other ownership
interests of any other class or classes of such corporation, partnership,
limited liability company or other entity shall have or might have voting power
by reason of the happening of any contingency). Unless otherwise qualified
references to "Subsidiary" or "Subsidiaries" herein shall refer to those of the
Borrowers.
"Subsidiary Borrowers" shall have the meaning assigned thereto in the
preamble hereof.
"Swingline Facility" means the swingline facility established pursuant
to Section 2.2.
"Swingline Lender" means Wachovia in its capacity as swingline lender
hereunder.
"Swingline Loan" means any swingline loan made by the Swingline Lender
to the Borrowers pursuant to Section 2.2, and all such swingline loans
collectively as the context requires.
"Swingline Note" means the Swingline Note made by the Borrowers payable
to the order of the Swingline Lender, substantially in the form of Exhibit A-2
hereto, evidencing the Swingline Loans, and any amendments, supplements and
modifications thereto, any substitutes therefor, and any replacements,
restatements, renewals or extensions thereof, in whole or in part.
"Swingline Side Letter" means the side letter dated as of the date
hereof executed by the Borrowers and the Administrative Agent detailing the
availability of Swingline Loans in connection with the Administrative Agent's
Financial Management Account program.
"Swingline Sublimit Amount" means Thirty-five Million Dollars
($35,000,000).
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"Swingline Termination Date" means the first to occur of (a) the
resignation of Wachovia as Administrative Agent in accordance with Section 12.9
and (b) the Revolving Credit Termination Date.
"Syndication Agent" means Bank of America, N.A. in its capacity as
Syndication Agent hereunder.
"Synthetic Lease" means any synthetic lease, tax retention operating
lease, off-balance sheet loan or similar off-balance sheet financing product
where such transaction is considered borrowed money indebtedness for tax
purposes but is classified as an Operating Lease in accordance with GAAP.
"Taxes" shall have the meaning assigned thereto in Section 4.11(a).
"Termination Event" means except for any such event or condition that
could not reasonably be expected to have a Material Adverse Effect: (a) a
"Reportable Event" described in Section 4043 of ERISA for which the notice
requirement has not been waived by the PBGC, or (b) the withdrawal of any
Borrower or any ERISA Affiliate from a Pension Plan during a plan year in which
it was a "substantial employer" as defined in Section 4001(a)(2) of ERISA, or
(c) the termination of a Pension Plan, the filing of a notice of intent to
terminate a Pension Plan or the treatment of a Pension Plan amendment as a
termination, under Section 4041 of ERISA, if the plan assets are not sufficient
to pay all plan liabilities or (d) the institution of proceedings to terminate,
or the appointment of a trustee with respect to, any Pension Plan by the PBGC,
or (e) any other event or condition which would constitute grounds under Section
4042(a) of ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan, or (f) the imposition of a Lien pursuant to
Section 412 of the Code or Section 302 of ERISA, or (g) the partial or complete
withdrawal of any Borrower of any ERISA Affiliate from a Multiemployer Plan if
withdrawal liability is asserted by such Plan, or (h) any event or condition
which results in the reorganization or insolvency of a Multiemployer Plan under
Sections 4241 or 4245 of ERISA, or (i) any event or condition which results in
the termination of a Multiemployer Plan under Section 4041A of ERISA or the
institution by PBGC of proceedings to terminate a Multiemployer Plan under
Section 4042 of ERISA.
"Uniform Customs" means the Uniform Customs and Practice for
Documentary Credits (1993 Revision), effective January 1994 International
Chamber of Commerce Publication No. 500, as amended.
"United States" means the United States of America.
"Wachovia" means Wachovia Bank, National Association, a national
banking association, and its successors.
"Wholly-Owned" means, with respect to a Subsidiary, that all of the
shares of capital stock or other ownership interests of such Subsidiary are,
directly or indirectly, owned or controlled by any Borrower and/or one or more
of its Wholly-Owned Subsidiaries (except for directors'
14
qualifying shares or other shares required by Applicable Law to be owned by a
Person other than such Borrower).
SECTION 1.2 General. Unless otherwise specified, a reference in this
Agreement to a particular article, section, subsection, Schedule or Exhibit is a
reference to that article, section, subsection, Schedule or Exhibit of this
Agreement. Wherever from the context it appears appropriate, each term stated in
either the singular or plural shall include the singular and plural, and
pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, the feminine and the neuter. Any reference herein to "Eastern time"
shall refer to the applicable time of day in Charlotte, North Carolina.
SECTION 1.3 Other Definitions and Provisions.
(a) Use of Capitalized Terms. Unless otherwise defined therein, all
capitalized terms defined in this Agreement shall have the defined meanings when
used in this Agreement, the Notes and the other Loan Documents or any
certificate, report or other document made or delivered pursuant to this
Agreement.
(b) Miscellaneous. 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.
ARTICLE II
REVOLVING CREDIT FACILITY
SECTION 2.1 Revolving Credit Loans. Subject to the terms and conditions
of this Agreement, and in reliance upon the representations and warranties set
forth herein, each Lender severally agrees to make Revolving Credit Loans to the
Borrowers from time to time from the Closing Date through, but not including,
the Revolving Credit Termination Date as requested by the Borrowers in
accordance with the terms of Section 2.3; provided, that (a) the aggregate
principal amount of all outstanding Revolving Credit Loans (after giving effect
to any amount requested) shall not exceed the Aggregate Commitment less (i) the
Swingline Sublimit Amount and (ii) the sum of all outstanding L/C Obligations
and (b) the aggregate principal amount of all outstanding Revolving Credit Loans
from any Lender to the Borrowers shall not at any time exceed such Lender's
Revolving Credit Commitment less (i) such Lender's Revolving Credit Commitment
Percentage of outstanding L/C Obligations with respect to Letters of Credit and
(ii) such Lender's Revolving Credit Commitment Percentage of the Swingline
Sublimit Amount. Each Revolving Credit Loan by a Lender shall be in a principal
amount equal to such Lender's Revolving Credit Commitment Percentage of the
aggregate principal amount of Revolving Credit Loans requested on such occasion.
Subject to the terms and conditions hereof, the Borrowers may borrow, repay and
reborrow Revolving Credit Loans hereunder until the Revolving Credit Termination
Date.
15
SECTION 2.2 Swingline Loans.
(a) Availability. Subject to the terms and conditions of this Agreement
and the Swingline Side Letter, the Swingline Lender agrees to make Swingline
Loans to the Borrowers from time to time from the Closing Date through, but not
including, the Swingline Termination Date; provided, that the aggregate
principal amount of all outstanding Swingline Loans (after giving effect to any
amount requested), shall not exceed the lesser of (a) the Aggregate Commitment
less the sum of all outstanding Revolving Credit Loans and L/C Obligations and
(b) the Swingline Sublimit Amount.
(b) Payment of Principal and Interest. Principal and interest on
Swingline Loans deemed requested pursuant to the Swingline Side Letter shall be
paid pursuant to the terms and conditions of the Swingline Side Letter without
any deduction, setoff or counterclaim whatsoever. Principal and interest on
Swingline Loans requested pursuant to Section 2.3 hereof shall be paid pursuant
to the terms of this Agreement. Unless sooner paid pursuant to the provisions
hereof or the provisions of the Swingline Side Letter, the principal of the
Swingline Loans shall be paid in full, together with accrued interest thereon,
on the earlier to occur of (i) demand for payment by the Swingline Lender or
(ii) the Swingline Termination Date.
(c) Refunding.
(i) Upon the occurrence and during the continuance of an Event
of Default, Swingline Loans shall be refunded by the Lenders on demand by the
Swingline Lender. Such refundings shall be made by the Lenders in accordance
with their respective Revolving Credit Commitment Percentages and shall
thereafter be reflected as Revolving Credit Loans of the Lenders on the books
and records of the Administrative Agent. Each Lender shall fund its respective
Revolving Credit Commitment Percentage of Revolving Credit Loans as required to
repay Swingline Loans outstanding to the Swingline Lender upon demand by the
Swingline Lender upon the occurrence and during the continuance of an Event of
Default but in no event later than 2:00 p.m. (Eastern time) on the next
succeeding Business Day after such demand is made. No Lender's obligation to
fund its respective Revolving Credit Commitment Percentage of a Swingline Loan
shall be affected by any other Lender's failure to fund its Revolving Credit
Commitment Percentage of a Swingline Loan, nor shall any Lender's Revolving
Credit Commitment Percentage be increased as a result of any such failure of any
other Lender to fund its Revolving Credit Commitment Percentage of a Swingline
Loan.
(ii) The Borrowers shall pay to the Swingline Lender on demand
the amount of such Swingline Loans to the extent amounts received from the
Lenders are not sufficient to repay in full the outstanding Swingline Loans
requested or required to be refunded. In addition, the Borrowers hereby
authorize the Administrative Agent to charge any account maintained by the
Borrowers with the Swingline Lender (up to the amount available therein) in
order to immediately pay the Swingline Lender the amount of such Swingline Loans
to the extent amounts received from the Lenders are not sufficient to repay in
full the outstanding Swingline Loans requested or required to be refunded. If
any portion of any such amount paid to the Swingline Lender shall be recovered
by or on behalf of the Borrowers from the Swingline Lender in bankruptcy or
otherwise, the loss of the amount so recovered shall be ratably shared among all
the Lenders in accordance with their
16
respective Revolving Credit Commitment Percentages (unless the amounts so
recovered by or on behalf of the Borrowers pertain to a Swingline Loan extended
after the occurrence and during the continuance of an Event of Default of which
the Administrative Agent has received notice in the manner required pursuant to
Section 12.5 and which such Event of Default has not been waived by the Required
Lenders or the Lenders, as applicable).
(iii) Each Lender acknowledges and agrees that its obligation
to refund Swingline Loans in accordance with the terms of this Section 2.2 is
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including, without limitation, non-satisfaction of the conditions
set forth in Article V. Further, each Lender agrees and acknowledges that if
prior to the refunding of any outstanding Swingline Loans pursuant to this
Section 2.2, one of the events described in Section 11.1(j) or (k) shall have
occurred, each Lender will, on the date the applicable Revolving Credit Loan
would have been made, purchase an undivided participating interest in the
Swingline Loan to be refunded in an amount equal to its Revolving Credit
Commitment Percentage (as in effect immediately prior to any such event) of the
aggregate amount of such Swingline Loan. Each Lender will immediately transfer
to the Swingline Lender, in immediately available funds, the amount of its
participation and upon receipt thereof the Swingline Lender will deliver to such
Lender a certificate evidencing such participation dated the date of receipt of
such funds and for such amount. Whenever, at any time after the Swingline Lender
has received from any Lender such Lender's participating interest in a Swingline
Loan, the Swingline Lender receives any payment on account thereof, the
Swingline Lender will distribute to such Lender its participating interest in
such amount (appropriately adjusted, in the case of interest payments, to
reflect the period of time during which such Lender's participating interest was
outstanding and funded).
SECTION 2.3 Procedure for Advances of Revolving Credit and Swingline
Loans.
(a) Requests for Borrowing. With the exception of Swingline Loans
deemed requested pursuant to the Swingline Side Letter, the Borrowers shall give
the Administrative Agent irrevocable prior written notice substantially in the
form attached hereto as Exhibit B (a "Notice of Borrowing") not later than 11:00
a.m. (Eastern time) (i) on the same Business Day as each Base Rate Loan and each
Swingline Loan and (ii) at least three (3) Business Days before each LIBOR Rate
Loan, of its intention to borrow, specifying (A) the date of such borrowing,
which shall be a Business Day, (B) the amount of such borrowing, which shall be,
(x) with respect to Base Rate Loans (other than Swingline Loans) in an aggregate
principal amount of $1,000,000 or a whole multiple of $500,000 in excess
thereof, (y) with respect to LIBOR Rate Loans in an aggregate principal amount
of $1,000,000 or a whole multiple of $500,000 in excess thereof and (z) with
respect to Swingline Loans (other than Swingline Loans deemed requested pursuant
to the Swingline Side Letter) in an aggregate principal amount of $100,000 or a
whole multiple of $100,000 in excess thereof, (C) whether such Loan is to be a
Revolving Credit Loan or Swingline Loan, (D) in the case of a Revolving Credit
Loan whether the Loans are to be LIBOR Rate Loans or Base Rate Loans, and (E) in
the case of a LIBOR Rate Loan, the duration of the Interest Period applicable
thereto. A Notice of Borrowing received after 11:00 a.m. (Eastern time) shall be
deemed received on the next Business Day. The Administrative Agent shall
promptly notify the Lenders of each Notice of Borrowing.
17
(b) Disbursement of Revolving Credit and Swingline Loans. Not later
than 2:00 p.m. (Eastern time) on the proposed borrowing date, (i) each Lender
will make available to the Administrative Agent, for the account of the
Borrowers, at the office of the Administrative Agent in funds immediately
available to the Administrative Agent, such Lender's Revolving Credit Commitment
Percentage of the Revolving Credit Loans to be made on such borrowing date and
(ii) the Swingline Lender will make available to the Administrative Agent, for
the account of the Borrowers, at the office of the Administrative Agent in funds
immediately available to the Administrative Agent, the Swingline Loans (other
than Swingline Loans deemed requested pursuant to the Swingline Side Letter) to
be made on such borrowing date. The Borrowers hereby irrevocably authorize the
Administrative Agent to disburse the proceeds of each borrowing requested
pursuant to this Section 2.3 in immediately available funds by crediting or
wiring such proceeds to the deposit account of the Company identified in the
most recent notice substantially in the form of Exhibit C hereto (a "Notice of
Account Designation") delivered by the Borrowers to the Administrative Agent or
as may be otherwise agreed upon by the Borrowers and the Administrative Agent
from time to time. Subject to Section 4.7 hereof, the Administrative Agent shall
not be obligated to disburse the portion of the proceeds of any Revolving Credit
Loan requested pursuant to this Section 2.3 to the extent that any Lender has
not made available to the Administrative Agent its Revolving Credit Commitment
Percentage of such Loan. Revolving Credit Loans to be made for the purpose of
refunding Swingline Loans shall be made by the Lenders as provided in Section
2.2(c).
SECTION 2.4 Repayment of Loans.
(a) Repayment on Termination Date. The Borrowers hereby agree to repay
the outstanding principal amount of (i) all Revolving Credit Loans in full on
the Revolving Credit Termination Date, and (ii) all Swingline Loans in
accordance with Section 2.2, together, in each case, with all accrued but unpaid
interest thereon.
(b) Mandatory Repayments. If at any time the outstanding principal
amount of all Revolving Credit Loans plus the sum of all outstanding Swingline
Loans and L/C Obligations exceeds the Aggregate Commitment, the Borrowers agree
to repay immediately upon notice from the Administrative Agent, by payment to
the Administrative Agent for the account of the Lenders of an amount equal to
such excess with each such repayment applied first to the outstanding principal
amount of outstanding Swingline Loans, second to the principal amount of
outstanding Revolving Credit Loans and third, with respect to any Letters of
Credit then outstanding, a payment of cash collateral into the Cash Collateral
Account for the benefit of the L/C Participants in an amount equal to the
aggregate then undrawn and unexpired amount of such Letters of Credit (all such
cash collateral to be applied in accordance with Section 11.2(b)).
(c) Optional Repayments. The Borrowers may at any time and from time to
time repay the Loans, in whole or in part, upon at least three (3) Business
Days' irrevocable notice to the Administrative Agent with respect to LIBOR Rate
Loans and one (1) Business Day irrevocable notice with respect to Base Rate
Loans and Swingline Loans, substantially in the form attached hereto as Exhibit
D (a "Notice of Repayment") specifying the date and amount of repayment and
whether the repayment is of LIBOR Rate Loans, Base Rate Loans, Swingline Loans
or a combination thereof, and, if of a combination thereof, the amount allocable
to each. Upon receipt of
18
such notice, the Administrative Agent shall promptly notify each Lender, except
with respect to any repayment of Swingline Loans. If any such notice is given,
the amount specified in such notice shall be due and payable on the date set
forth in such notice. Partial repayments shall be in an aggregate amount of
$3,000,000 or a whole multiple of $1,000,000 in excess thereof with respect to
Base Rate Loans (other than Swingline Loans), $5,000,000 or a whole multiple of
$1,000,000 in excess thereof with respect to LIBOR Rate Loans and $100,000 or a
whole multiple of $100,000 in excess thereof with respect to Swingline Loans.
Each such repayment shall be accompanied by any amount required to be paid
pursuant to Section 4.9 hereof.
(d) Limitation on Repayment of LIBOR Rate Loans. The Borrowers may not
repay any LIBOR Rate Loan on any day other than on the last day of the Interest
Period applicable thereto unless such repayment is accompanied by any amount
required to be paid pursuant to Section 4.9 hereof.
(e) Hedging Agreements. No repayment or prepayment pursuant to this
Section 2.4 shall affect any Borrower's obligations under any Hedging Agreement.
SECTION 2.5 Notes.
(a) Revolving Credit Notes. Except as otherwise provided in Section
13.9 (a)-(e), at the request of a Lender, such Lender's Revolving Credit Loans
and the obligation of the Borrowers to repay such Revolving Credit Loans shall
be evidenced by a separate Revolving Credit Note executed by the Borrowers
payable to the order of such Lender.
(b) Swingline Notes. The Swingline Loans and the obligation of the
Borrowers to repay such Swingline Loans shall be evidenced by a Swingline Note
executed by the Borrowers payable to the order of the Swingline Lender.
SECTION 2.6 Permanent Reduction of the Aggregate Commitment.
(a) Voluntary Reduction. The Borrowers shall have the right at any time
and from time to time, upon at least five (5) Business Days prior written notice
to the Administrative Agent, to permanently reduce, without premium or penalty,
(i) the entire Aggregate Commitment or (ii) portions of the Revolving Credit
Commitment, in an aggregate principal amount of not less than $3,000,000 or any
whole multiple of $1,000,000 in excess thereof. The amount of each partial
permanent reduction shall be applied pro rata to reduce the remaining mandatory
reduction amounts required under Section 2.6(b), and such reduction shall
permanently reduce the Lenders' Revolving Credit Commitments to make Loans and
issue or participate in Letters of Credit pro rata in accordance with their
respective Revolving Credit Commitment Percentages.
(b) Corresponding Payment. Each permanent reduction permitted pursuant
to this Section 2.6 shall be accompanied by a payment of principal sufficient to
reduce the aggregate outstanding Revolving Credit Loans, Swingline Loans and L/C
Obligations, as applicable, after such reduction to the Aggregate Commitment as
so reduced and if the Aggregate Commitment as so reduced is less than the
aggregate amount of all outstanding Letters of Credit, the Borrowers shall be
required to deposit cash collateral in the Cash Collateral Account in an amount
equal to
19
the aggregate then undrawn and unexpired amount of such Letters of Credit. Such
cash collateral shall be applied in accordance with Section 11.2(b). Any
reduction of the Aggregate Commitment to zero shall be accompanied by payment of
all outstanding Revolving Credit Loans and Swingline Loans (and furnishing of
cash collateral satisfactory to the Administrative Agent for all L/C
Obligations) and shall result in the termination of the Revolving Credit
Commitments and the Revolving Credit Facility. Such cash collateral shall be
applied in accordance with Section 11.2(b). If the reduction of the Aggregate
Commitment requires the repayment of any LIBOR Rate Loan, such repayment shall
be accompanied by any amount required to be paid pursuant to Section 4.9 hereof.
SECTION 2.7 Termination of Credit Facility. The Credit Facility shall
terminate on the earliest of (a) October 28, 2009, (b) the date of termination
by the Borrowers pursuant to Section 2.6 or (c) the date of termination pursuant
to Section 11.2(a).
SECTION 2.8 Increase of Aggregate Commitment. So long as no Default or
Event of Default shall have occurred and be continuing, at any time prior to the
third (3rd) anniversary of the Closing Date, the Borrower shall have the right
from time to time upon not less than thirty (30) days prior written notice to
the Administrative Agent to increase the Aggregate Commitment; provided that in
no event shall the Aggregate Commitment be increased to an amount greater than
$380,000,000; provided further that:
(a) Each existing Lender shall have the right, but not the obligation,
to commit to all or a portion of the proposed increase. Any increase in the
Aggregate Commitment which is accomplished by increasing the Revolving Credit
Commitment of any Lender or Lenders who are at the time of such increase party
to this Agreement (which Lender or Lenders shall consent to such increase in
their sole and absolute discretion) shall be accomplished as follows: (i) this
Agreement will be amended by the Borrowers, the Administrative Agent and those
Lender(s) whose Revolving Credit Commitment(s) is or are being increased (but
without any requirement that the consent of the Required Lenders be obtained) to
reflect the revised Revolving Credit Commitment amounts of each of the Lenders,
(ii) the Administrative Agent will update the Register to reflect the revised
Revolving Credit Commitment amount and Revolving Credit Commitment Percentage of
each of the Lenders, (iii) the Extensions of Credit of each Lender will be
reallocated on the effective date of such increase among the Lenders in
accordance with their revised Revolving Credit Commitment Percentages (and the
Lenders agree to make all payments and adjustments necessary to effect the
reallocation and the Borrowers shall pay any and all costs required pursuant to
Section 4.9 in connection with such reallocation as if such reallocation were a
repayment) and (iv) if requested by such Lender or Lenders, the Borrowers will
deliver new Revolving Credit Note(s) to the Lender or Lenders whose
Commitment(s) is or are being increased reflecting the revised Revolving Credit
Commitment amount of such Lender(s).
(b) If the Administrative Agent does not receive sufficient commitments
from the existing Lenders to fund the entire amount of the proposed increase,
Borrower may then solicit commitments from other banks, financial institutions
or investment funds. The failure by any existing Lender to respond to a request
for such increase shall be deemed to be a refusal of such request by such
existing Lender. Any increase in the Aggregate Commitment which is
20
accomplished by addition of a new Lender under the Agreement (each such new
Lender, a "New Lender") shall be accomplished as follows: (i) such New Lender
shall be an Eligible Assignee and shall be subject to the consent of the
Administrative Agent, which consent shall not be unreasonably withheld, (ii)
this Agreement will be amended by the Borrowers, the Administrative Agent and by
the party becoming a New Lender hereunder (but without any requirement that the
consent of the Required Lenders be obtained) solely to reflect the addition of
such party as a Lender hereunder, (iii) the Administrative Agent will update the
Register to reflect the revised Revolving Credit Commitment and Revolving Credit
Commitment Percentage of each of the Lenders, (iv) the Extensions of Credit of
each of the Lenders will be reallocated on the effective date of such increase
among the Lenders in accordance with their revised Revolving Credit Commitment
Percentages (and the Lenders agree to make all payments and adjustments
necessary to effect the reallocation and the Borrowers shall pay any and all
costs required pursuant to Section 4.9 in connection with such reallocation as
if such reallocation were a repayment) and (v) at the request of any Lender, the
Borrowers will deliver a Revolving Credit Note to such Lender.
ARTICLE III
LETTER OF CREDIT FACILITY
SECTION 3.1 L/C Commitments.
(a) Subject to the terms and conditions hereof, the Issuing Lender, in
reliance on the agreements of the other Lenders set forth in Section 3.4(a),
agrees to issue standby and trade Letters of Credit for the account of the
Borrowers on any Business Day from the Closing Date through but not including
the tenth (10th) Business Day prior to the Revolving Credit Termination Date in
such form as may be approved from time to time by the Issuing Lender; provided,
that the Issuing Lender shall have no obligation to issue any Letter of Credit
if, after giving effect to such issuance, (a) the L/C Obligations would exceed
the L/C Commitment or (b) the Available Revolving Credit Commitment of any
Lender would be zero or less than zero. Each Letter of Credit (other than the
Existing Letter of Credit) shall (i) be denominated in Dollars in a minimum
amount of $15,000, (ii) be a standby letter of credit or trade letter of credit
issued to support obligations of the Borrowers or any of their Subsidiaries,
contingent or otherwise, incurred in the ordinary course of business, (iii)
expire on a date satisfactory to the Issuing Lender, which date shall be no
later than the earlier of (a) one (1) year after its date of issuance and (b)
the tenth (10th) Business Day prior to the Revolving Credit Termination Date and
(iv) be subject to the Uniform Customs and/or ISP 98, as set forth in the
Application or as determined by the Issuing Lender and, to the extent not
inconsistent therewith, the laws of the State of North Carolina.
(b) Subject to the terms and conditions hereof, the Issuing Lender, in
reliance on the agreements of the other Lenders, if any, set forth in Section
3.4(b), agrees to maintain the Existing Letter of Credit for the account of the
Company from the Closing Date through and including July 31, 2005; provided,
that, so long as (i) no default or event of default shall have occurred under
the Existing Letter of Credit and (ii) no Default or Event of Default has
occurred under this Agreement, the Issuing Lender, may in its sole discretion,
annually renew the Existing Letter of Credit for a period ending July 31, 2008
(the "Existing L/C Termination Date"). The
21
Existing Letter of Credit shall (i) be denominated in Dollars in the initial
amount of $126,849,316 and (ii) be a standby letter of credit issued to support
obligations of the Company to the trustee under the Trust Indenture, dated as of
July 1, 1998 between the Company, as Borrower and First Union National Bank (now
Wachovia), as Trustee. The Existing Letter of Credit shall be deemed to be a
Letter of Credit issued under and pursuant to the terms of this Agreement.
(c) The Issuing Lender shall not at any time be obligated to issue or
maintain any Letter of Credit hereunder if such issuance or maintenance would
conflict with, or cause the Issuing Lender or any L/C Participant to exceed any
limits imposed by, any Applicable Law. References herein to "issue", "maintain"
and derivations thereof with respect to the Letters of Credit shall also include
extensions or modifications of any existing Letters of Credit, unless the
context otherwise requires.
SECTION 3.2 Procedure for Issuance of Letters of Credit. The Borrowers
may from time to time request that the Issuing Lender issue a Letter of Credit
by delivering to the Issuing Lender at the Administrative Agent's Office an
Application therefor, completed to the satisfaction of the Issuing Lender, and
such other certificates, documents and other papers and information as the
Issuing Lender may request. Upon receipt of any Application, the Issuing Lender
shall process such Application and the certificates, documents and other papers
and information delivered to it in connection therewith in accordance with its
customary procedures and shall, subject to Section 3.1(a) and Article V hereof,
promptly issue the Letter of Credit requested thereby (but in no event shall the
Issuing Lender be required to issue any Letter of Credit earlier than three (3)
Business Days after its receipt of the Application therefor and all such other
certificates, documents and other papers and information relating thereto) by
issuing the original of such Letter of Credit to the beneficiary thereof or as
otherwise may be agreed by the Issuing Lender and the Borrowers. The Issuing
Lender shall, contemporaneously with the issuance of each Letter of Credit,
deliver a copy thereof to the Administrative Agent. The Issuing Lender shall
promptly furnish to the Company a copy of such Letter of Credit and promptly
notify each Lender of the issuance and upon request by any Lender, furnish to
such Lender a copy of such Letter of Credit and the amount of such Lender's
participation therein.
SECTION 3.3 Fees and Other Charges.
(a) The Borrowers shall pay to the Administrative Agent, for the
account of the Issuing Lender and the L/C Participants, a letter of credit fee
with respect to each Letter of Credit in an amount equal to the average
outstanding amount of such Letter of Credit during the calendar quarter for
which such fee applies multiplied by the Applicable Margin with respect to
Revolving Credit Loans which are LIBOR Rate Loans (determined on a per annum
basis). Such fee shall be payable quarterly in arrears on the last Business Day
of each calendar quarter and on the Revolving Credit Termination Date. The
Administrative Agent shall, promptly following its receipt thereof, distribute
to the Issuing Lender and the L/C Participants all fees received pursuant to
this Section 3.3(a) in accordance with their respective Revolving Credit
Commitment Percentages.
(b) In addition to the foregoing letter of credit fee, the Borrowers
shall pay to the Administrative Agent, for the account of the Issuing Lender, an
issuance fee with respect to each Letter of Credit (other than the Existing
Letter of Credit) in an amount equal to the face amount of
22
such Letter of Credit multiplied by one-eighth of one percent (.125%) per annum.
Such issuance fee shall be payable quarterly in arrears on the last Business Day
of each calendar quarter and on the Revolving Credit Termination Date.
(c) In addition to the foregoing fees, the Borrowers shall pay or
reimburse the Issuing Lender for such normal and customary costs and expenses as
are incurred or charged by the Issuing Lender in issuing, effecting payment
under, amending or otherwise administering any Letter of Credit.
SECTION 3.4 L/C Participations.
(a) The Issuing Lender irrevocably agrees to grant and hereby grants to
each L/C Participant, and, to induce the Issuing Lender to issue Letters of
Credit hereunder, each L/C Participant irrevocably agrees to accept and purchase
and hereby accepts and purchases from the Issuing Lender, on the terms and
conditions hereinafter stated, for such L/C Participant's own account and risk
an undivided interest equal to such L/C Participant's Revolving Credit
Commitment Percentage in the Issuing Lender's obligations and rights under and
in respect of each Letter of Credit issued hereunder and the amount of each
draft paid by the Issuing Lender thereunder. Each L/C Participant
unconditionally and irrevocably agrees with the Issuing Lender that, if a draft
is paid under any Letter of Credit for which the Issuing Lender is not
reimbursed in full by the Borrowers through a Revolving Credit Loan or otherwise
in accordance with the terms of this Agreement, such L/C Participant shall pay
to the Issuing Lender upon demand at the Issuing Lender's address for notices
specified herein an amount equal to such L/C Participant's Revolving Credit
Commitment Percentage of the amount of such draft, or any part thereof, which is
not so reimbursed.
(b) The Issuing Lender irrevocably agrees to grant and hereby grants to
each L/C Participant, and each L/C Participant irrevocably agrees to accept and
purchase and hereby accepts and purchases from the Issuing Lender, on the terms
and conditions hereinafter stated, for such L/C Participant's own account and
risk an undivided interest equal to the amount set forth in the Register
representing such L/C Participant's L/C Commitment Percentage in the Issuing
Lender's obligations and rights under and in respect of the Existing Letter of
Credit and the amount of each draft paid by the Issuing Lender thereunder. Each
L/C Participant unconditionally and irrevocably agrees with the Issuing Lender
that, if a draft is paid under the Existing Letter of Credit for which the
Issuing Lender is not reimbursed in full by the Company, such L/C Participant
shall pay to the Issuing Lender upon demand at the Issuing Lender's address for
notices specified herein an amount equal to such L/C Participant's L/C
Commitment Percentage of the amount of such draft, or any part thereof, which is
not so reimbursed.
(c) Upon becoming aware of any amount required to be paid by any L/C
Participant to the Issuing Lender pursuant to Section 3.4(a) or (b) in respect
of any unreimbursed portion of any payment made by the Issuing Lender under any
Letter of Credit, the Issuing Lender shall notify the Administrative Agent and
each L/C Participant of the amount and due date of such required payment and
such L/C Participant shall pay to the Issuing Lender the amount specified on the
applicable due date. If any such amount is paid to the Issuing Lender after the
date such payment is due, such L/C Participant shall pay to the Issuing Lender
on demand, in addition to such amount,
23
the product of (i) such amount, times (ii) the daily average Federal Funds Rate
as determined by the Administrative Agent during the period from and including
the date such payment is due to the date on which such payment is immediately
available to the Issuing Lender, times (iii) a fraction the numerator of which
is the number of days that elapse during such period and the denominator of
which is 360. A certificate of the Issuing Lender with respect to any amounts
owing under this Section 3.4(c) shall be conclusive in the absence of manifest
error. With respect to payment to the Issuing Lender of the unreimbursed amounts
described in this Section 3.4(c), if the L/C Participants receive notice that
any such payment is due (A) prior to 1:00 p.m. (Eastern time) on any Business
Day, such payment shall be due that Business Day, and (B) after 1:00 p.m.
(Eastern time) on any Business Day, such payment shall be due on the following
Business Day.
(d) Whenever, at any time after the Issuing Lender has made payment
under any Letter of Credit and has received from any L/C Participant its
Revolving Credit Commitment Percentage of such payment in accordance with this
Section 3.4, the Issuing Lender receives any payment related to such Letter of
Credit (whether directly from a Borrower or otherwise, or any payment of
interest on account thereof), the Issuing Lender will distribute to such L/C
Participant its pro-rata share thereof; provided, that in the event that any
such payment received by the Issuing Lender shall be required to be returned by
the Issuing Lender, such L/C Participant shall return to the Issuing Lender the
portion thereof previously distributed by the Issuing Lender to it.
SECTION 3.5 Reimbursement Obligation of the Borrowers. In the event of
any drawing under any Letter of Credit, the Borrowers agree to reimburse the
Issuing Lender in same day funds (either with the proceeds of a Revolving Credit
Loan as provided for in this Section 3.5 or with funds from other sources) on
each date on which the Issuing Lender notifies the Company of the date and
amount of a draft paid under any Letter of Credit. The amount of the
Reimbursement Obligation shall equal the amount of (a) such draft so paid and
(b) any amounts referred to in Section 3.3(c) incurred by the Issuing Lender in
connection with such payment. Unless the Borrowers shall immediately notify the
Issuing Lender that the Borrowers intend to reimburse the Issuing Lender for
such drawing from other sources or funds, the Borrowers shall be deemed to have
timely given a Notice of Borrowing to the Administrative Agent requesting that
the Lenders make a Revolving Credit Loan bearing interest at the Base Rate on
such date in the amount of (a) such draft so paid and (b) any amounts referred
to in Section 3.3(c) incurred by the Issuing Lender in connection with such
payment, and the Lenders shall make a Revolving Credit Loan bearing interest at
the Base Rate in such amount, the proceeds of which shall be applied to
reimburse the Issuing Lender for the amount of the related drawing and costs and
expenses. Each Lender acknowledges and agrees that its obligation to fund a
Revolving Credit Loan in accordance with this Section 3.5 to reimburse the
Issuing Lender for any draft paid under a Letter of Credit is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including, without limitation, non-satisfaction of the conditions set forth in
this Agreement. If the Borrowers elect to pay the amount of such drawing with
funds from other sources and fail to reimburse the Issuing Lender as provided
above, the unreimbursed amount of such drawing shall bear interest at the rate
which would be payable on any outstanding Base Rate Loans which were then
overdue from the date such amounts become payable (whether at stated maturity,
by acceleration or otherwise) until payment in full.
24
SECTION 3.6 Obligations Absolute. The Borrowers' obligations under this
Article III (including without limitation the Reimbursement Obligation) shall be
absolute and unconditional under any and all circumstances and irrespective of
any set-off, counterclaim or defense to payment which the Borrowers may have or
have had against the Issuing Lender or any beneficiary of a Letter of Credit or
any other Person. The Borrowers also agree that the Issuing Lender and the L/C
Participants shall not be responsible for, and the Borrowers' Reimbursement
Obligation under Section 3.5 shall not be affected by, among other things, the
validity or genuineness of documents or of any endorsements thereon, even though
such documents shall in fact prove to be invalid, fraudulent or forged, or any
dispute between or among any Borrower and any beneficiary of any Letter of
Credit or any other party to which such Letter of Credit may be transferred or
any claims whatsoever of any Borrower against any beneficiary of such Letter of
Credit or any such transferee. The Issuing Lender shall not be liable for any
error, omission, interruption or delay in transmission, dispatch or delivery of
any message or advice, however transmitted, in connection with any Letter of
Credit, except for errors or omissions caused by the Issuing Lender's gross
negligence or willful misconduct. The Borrowers agree that any action taken or
omitted by the Issuing Lender under or in connection with any Letter of Credit
or the related drafts or documents, if done in the absence of gross negligence
or willful misconduct, shall be binding on each Borrower and shall not result in
any liability of the Issuing Lender or any L/C Participant to any Borrower. The
responsibility of the Issuing Lender to the Borrowers in connection with any
draft presented for payment under any Letter of Credit shall, in addition to any
payment obligation expressly provided for in such Letter of Credit, be limited
to determining that the documents (including each draft) delivered under such
Letter of Credit in connection with such presentment are in conformity with such
Letter of Credit.
SECTION 3.7 Effect of Application. To the extent that any provision of
any Application related to any Letter of Credit is inconsistent with the
provisions of this Article III, the provisions of this Article III shall apply.
ARTICLE IV
GENERAL LOAN PROVISIONS
SECTION 4.1 Interest.
(a) Interest Rate Options. Subject to the provisions of this Section
4.1, at the election of the Borrowers, (i) Revolving Credit Loans shall bear
interest at (A) the Base Rate plus the Applicable Margin or (B) the LIBOR Rate
plus the Applicable Margin (provided that the LIBOR Rate shall not be available
until three (3) Business Days after the Closing Date) and (ii) any Swingline
Loan shall bear interest at the rate mutually agreed upon by the Swingline
Lender and the Borrowers. The Borrowers shall select the rate of interest and
Interest Period, if any, applicable to any Loan at the time a Notice of
Borrowing is given or at the time a Notice of Conversion/Continuation is given
pursuant to Section 4.2. Any Loan or any portion thereof as to which the
Borrowers have not duly specified an interest rate as provided herein shall be
deemed a Base Rate Loan.
(b) Interest Periods. In connection with each LIBOR Rate Loan, the
Borrowers, by giving notice at the times described in Section 4.1(a), shall
elect an interest period (each, an
25
"Interest Period") to be applicable to such Loan, which Interest Period shall be
a period of one (1), two (2), three (3) or six (6) months with respect to each
LIBOR Rate Loan; provided that:
(i) the Interest Period shall commence on the date of advance
of or conversion to any LIBOR Rate Loan and, in the case of immediately
successive Interest Periods, each successive Interest Period shall commence on
the date on which the immediately preceding Interest Period expires;
(ii) if any Interest Period would otherwise expire on a day
that is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided, that if any Interest Period with respect to a
LIBOR Rate Loan would otherwise expire on a day that is not a Business Day but
is a day of the month after which no further Business Day occurs in such month,
such Interest Period shall expire on the immediately preceding Business Day;
(iii) any Interest Period with respect 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 at the end of such Interest Period;
(iv) no Interest Period shall extend beyond the Revolving
Credit Termination Date; and
(v) there shall be no more than ten (10) Interest Periods in
effect at any time.
(c) Applicable Margin. The Applicable Margin provided for in Section
4.1(a) with respect to any Loan (the "Applicable Margin") shall be based upon
the table set forth below and shall be determined and adjusted quarterly on the
date (each a "Calculation Date") ten (10) Business Days after the date by which
the Borrowers are required to provide an Officer's Compliance Certificate for
the most recently ended fiscal quarter of the Borrowers; provided, however, that
(a) the initial Applicable Margin shall be based on Pricing Level IV (as shown
below) and shall remain at Pricing Level IV until the first Calculation Date
occurring after the Closing Date and, thereafter the Pricing Level shall be
determined by reference to the Leverage Ratio as of the last day of the most
recently ended fiscal quarter of the Borrowers preceding the applicable
Calculation Date, and (b) if the Borrowers fail to provide the Officer's
Compliance Certificate as required by Section 7.2 for the most recently ended
fiscal quarter of the Borrowers preceding the applicable Calculation Date, the
Applicable Margin from such Calculation Date shall be based on Pricing Level I
(as shown below) until such time as an appropriate Officer's Compliance
Certificate is provided, at which time the Pricing Level shall be determined by
reference to the Leverage Ratio as of the last day of the most recently ended
fiscal quarter of the Borrowers preceding such Calculation Date. The Applicable
Margin shall be effective from one Calculation Date until the next Calculation
Date. Any adjustment in the Applicable Margin shall be applicable to all
Extensions of Credit then existing or subsequently made or issued.
--------------------------------------------------------------------
--------------- ----------------------------- --------- ------------
PRICING LEVEL LEVERAGE RATIO LIBOR BASE RATE
--------------- ----------------------------- --------- ------------
I Greater than or equal to 1.250% 0%
3.00 to 1.00
--------------- ----------------------------- --------- ------------
26
--------------- ----------------------------- --------- ------------
II Greater than or equal to 1.000% 0%
2.50 to 1.00, but less than
3.00 to 1.00
--------------- ----------------------------- --------- ------------
III Greater than or equal to 0.750% 0%
2.00 to 1.00, but less than
2.50 to 1.00
--------------- ----------------------------- --------- ------------
IV Greater than or equal to 0.625% 0%
1.50 to 1.00, but less
than 2.00 to 1.00
--------------- ----------------------------- --------- ------------
V Greater than or equal to 0.500% 0%
1.00 to 1.00 but less than
1.50 to 1.0
--------------- ----------------------------- --------- ------------
VI Less than 1.00 to 1.00 0.400% 0%
--------------- ----------------------------- --------- ------------
(d) Default Rate. Subject to Section 11.3, at the discretion of the
Administrative Agent or as directed by the Required Lenders, upon the occurrence
and during the continuance of an Event of Default, (i) the Borrowers shall no
longer have the option to request LIBOR Rate Loans or Swingline Loans, (ii) all
outstanding LIBOR Rate Loans shall bear interest at a rate per annum of two
percent (2%) in excess of the rate then applicable to LIBOR Rate Loans until the
end of the applicable Interest Period and thereafter at a rate equal to two
percent (2%) in excess of the rate then applicable to Base Rate Loans, and (iii)
all outstanding Base Rate Loans and other Obligations arising hereunder or under
any other Loan Document shall bear interest at a rate per annum equal to two
percent (2%) in excess of the rate then applicable to Base Rate Loans or such
other Obligations arising hereunder or under any other Loan Document. Interest
shall continue to accrue on the Notes after the filing by or against any
Borrower of any petition seeking any relief in bankruptcy or under any act or
law pertaining to insolvency or debtor relief, whether state, federal or
foreign.
(e) Interest Payment and Computation. Interest on each Base Rate Loan
shall be payable in arrears on the last Business Day of each calendar quarter
commencing December 31, 2004; and interest on each LIBOR Rate Loan shall be
payable on the last day of each Interest Period applicable thereto or, in the
case of any LIBOR Rate Loan having an Interest Period of six (6) months, every
three (3) months. Interest on LIBOR Rate Loans and all fees payable hereunder
shall be computed on the basis of a 360-day year and assessed for the actual
number of days elapsed and interest on Base Rate Loans shall be computed on the
basis of a 365/66-day year and assessed for the actual number of days elapsed.
(f) Maximum Rate. In no contingency or event whatsoever shall the
aggregate of all amounts deemed interest hereunder or under any of the Notes
charged or collected pursuant to the terms of this Agreement or pursuant to any
of the Notes exceed the highest rate permissible under any Applicable Law which
a court of competent jurisdiction shall, in a final determination, deem
applicable hereto. In the event that such a court determines that the Lenders
have charged or received interest hereunder in excess of the highest applicable
rate, the rate in effect hereunder shall automatically be reduced to the maximum
rate permitted by Applicable Law and the Lenders shall at the Administrative
Agent's option (i) promptly refund to the Borrowers any interest received by the
Lenders in excess of the maximum lawful rate or (ii) apply such excess to the
principal balance of the Obligations on a pro rata basis. It is the intent
hereof that the Borrowers not pay or contract to pay, and that neither the
Administrative Agent nor any Lender receive or contract to receive,
27
directly or indirectly in any manner whatsoever, interest in excess of that
which may be paid by the Borrowers under Applicable Law.
SECTION 4.2 Notice and Manner of Conversion or Continuation of Loans.
Provided that no Default or Event of Default has occurred and is then
continuing, the Borrowers shall have the option to (a) convert at any time
following the third Business Day after the Closing Date all or any portion of
any outstanding Base Rate Loans (other than Swingline Loans) in a principal
amount equal to $5,000,000 or any whole multiple of $1,000,000 in excess thereof
into one or more LIBOR Rate Loans and (b) upon the expiration of any Interest
Period, (i) convert all or any part of its outstanding LIBOR Rate Loans in a
principal amount equal to $3,000,000 or a whole multiple of $1,000,000 in excess
thereof into Base Rate Loans (other than Swingline Loans) or (ii) continue such
LIBOR Rate Loans as LIBOR Rate Loans. Whenever the Borrowers desire to convert
or continue Loans as provided above, the Borrowers shall give the Administrative
Agent irrevocable prior written notice in the form attached as Exhibit E (a
"Notice of Conversion/Continuation") not later than 11:00 a.m. (Eastern time)
three (3) Business Days before the day on which a proposed conversion or
continuation of such Loan is to be effective specifying (A) the Loans to be
converted or continued, and, in the case of any LIBOR Rate Loan to be converted
or continued, the last day of the Interest Period therefor, (B) the effective
date of such conversion or continuation (which shall be a Business Day), (C) the
principal amount of such Loans to be converted or continued, and (D) the
Interest Period to be applicable to such converted or continued LIBOR Rate Loan.
The Administrative Agent shall promptly notify the Lenders of such Notice of
Conversion/Continuation.
SECTION 4.3 Fees.
(a) Commitment Fee. Commencing on the Closing Date, the Borrowers shall
pay to the Administrative Agent, for the account of the Lenders, a
non-refundable commitment fee at a rate per annum equal to the applicable rate
set forth below on the average daily unused portion of the Revolving Credit
Commitment. The applicable commitment fee rate shall be based upon the table set
forth below and shall be determined and adjusted quarterly on each Calculation
Date; provided, however, that (a) the initial commitment fee rate shall be based
on Pricing Level IV (as shown below) and shall remain at Pricing Level IV until
the first Calculation Date occurring after the Closing Date and, thereafter the
Pricing Level shall be determined by reference to the Coverage Ratio as of the
last day of the most recently ended fiscal quarter of the Borrowers preceding
the applicable Calculation Date, and (b) if the Borrowers fail to provide the
Officer's Compliance Certificate as required by Section 7.2 for the most
recently ended fiscal quarter of the Borrowers preceding the applicable
Calculation Date, the commitment fee from such Calculation Date shall be based
on Pricing Level I (as shown below) until such time as an appropriate Officer's
Compliance Certificate is provided, at which time the Pricing Level shall be
determined by reference to the Leverage Ratio as of the last day of the most
recently ended fiscal quarter of the Borrowers preceding such Calculation Date.
The commitment fee rate shall be effective from one Calculation Date until the
next Calculation Date. Any adjustment in the commitment fee rate shall be
applicable to all Extensions of Credit then existing or subsequently made or
issued. The commitment fee shall be payable in arrears on the last Business Day
of each calendar quarter during the term of this Agreement commencing December
31, 2004, and on the Revolving Credit Termination Date. Notwithstanding anything
to the contrary contained herein, for purposes of calculating the
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commitment fee payable at any time to any Lender other than the Swingline
Lender, amounts outstanding under the Swingline Facility shall not be included
in the calculation of the unused portion of the Revolving Credit Commitment.
--------------------------------------------------------------------------
PRICING LEVEL LEVERAGE RATIO COMMITMENT FEE
--------------- --------------------------------------- ------------------
I Greater than or equal to 3.00 to 1.00 0.250%
--------------- --------------------------------------- ------------------
II Greater than or equal to 2.50 to 1.00, 0.225%
but less than 3.00 to 1.00
--------------- --------------------------------------- ------------------
III Greater than or equal to 2.00 to 1.00, 0.175%
but less than 2.50 to 1.00
--------------- --------------------------------------- ------------------
IV Greater than or equal to 1.50 to 1.00 0.150%
but less than 2.00 to 1.00
--------------- --------------------------------------- ------------------
V Greater than or equal to 1.00 to 1.00 0.125%
but less than 1.50 to 1.00
--------------- --------------------------------------- ------------------
VI Less than 1.0 to 1.0 0.100%
--------------- --------------------------------------- ------------------
(b) Administrative Agent's and Other Fees. To compensate the
Administrative Agent for structuring and syndicating the Loans and for its
obligations hereunder, the Borrowers agree to pay to the Administrative Agent,
for its account, the fees set forth in the separate fee letter agreement
executed by the Borrowers and the Administrative Agent dated October 1, 2004.
SECTION 4.4 Manner of Payment. Each payment by the Borrowers on account
of the principal of or interest on the Loans or of any fee, commission or other
amounts (including the Reimbursement Obligation) payable to the Lenders under
this Agreement or any Note shall be made not later than 1:00 p.m. (Eastern time)
on the date specified for payment under this Agreement to the Administrative
Agent at the Administrative Agent's Office for the account of the Lenders pro
rata in accordance with their respective Revolving Credit Commitment
Percentages, in Dollars, in immediately available funds and shall be made
without any set-off, counterclaim or deduction whatsoever. Any payment received
after such time but before 2:00 p.m. (Eastern time) on such day shall be deemed
a payment on such date for the purposes of Section 11.1, but for all other
purposes shall be deemed to have been made on the next succeeding Business Day.
Any payment received after 2:00 p.m. (Eastern time) shall be deemed to have been
made on the next succeeding Business Day for all purposes. Upon receipt by the
Administrative Agent of each such payment, the Administrative Agent shall
distribute to each Lender at its address for notices set forth herein its pro
rata share of such payment in accordance with such Lender's Revolving Credit
Commitment Percentage, with respect to Extensions of Credit and shall wire
advice of the amount of such credit to each Lender. Each payment to the
Administrative Agent of the Issuing Lender's fees or L/C Participants'
commissions shall be made in like manner, but for the account of the Issuing
Lender or
29
the L/C Participants, as the case may be. Each payment to the Administrative
Agent of Administrative Agent's fees or expenses shall be made for the account
of the Administrative Agent and any amount payable to any Lender under Sections
4.8, 4.9, 4.10, 4.11 or 13.2 shall be paid to the Administrative Agent for the
account of the applicable Lender. Subject to Section 4.1(b)(ii) if any payment
under this Agreement or any Note shall be specified to be made upon a day which
is not a Business Day, it shall be made on the next succeeding day which is a
Business Day and such extension of time shall in such case be included in
computing any interest if payable along with such payment.
SECTION 4.5 Crediting of Payments and Proceeds. In the event that the
Borrowers shall fail to pay any of the Obligations when due and the Obligations
have been accelerated pursuant to Section 11.2, all payments received by the
Lenders upon the Notes and the other Obligations and all net proceeds from the
enforcement of the Obligations shall be applied: (a) first to all expenses then
due and payable by the Borrowers hereunder and under the other Loan Documents,
(b) then to all indemnity obligations then due and payable by the Borrowers
hereunder and under the other Loan Documents, (c) then to all Administrative
Agent's and Issuing Lender's fees then due and payable, (d) then to all
commitment and other fees and commissions then due and payable, (e) then to
accrued and unpaid interest on the Swingline Note to the Swingline Lender, (f)
then to the principal amount outstanding under the Swingline Note to the
Swingline Lender, (g) then to accrued and unpaid interest on the Revolving
Credit Notes, accrued and unpaid interest on the Reimbursement Obligation (pro
rata in accordance with all such amounts due), (h) then to the principal amount
of the Revolving Credit Notes and Reimbursement Obligations and any Hedging
Obligations (including any termination payments and any accrued and unpaid
interest thereon) pro rata in accordance with all such amounts due, (i) then to
the Cash Collateral Account described in Section 11.2(b) and Section 11.2(c)
hereof to the extent of any L/C Obligations then outstanding, in that order.
SECTION 4.6 Adjustments. If any Lender (a "Benefited Lender") shall at
any time receive any payment of all or part of the Obligations owing to it, or
interest thereon, or if any Lender shall at any time receive any collateral in
respect to the Obligations owing to it (whether voluntarily or involuntarily, by
set-off or otherwise) (other than pursuant to Sections 4.8, 4.9, 4.10, 4.11 or
13.2 hereof) in a greater proportion than any such payment to and collateral
received by any other Lender, if any, in respect of the similar Obligations
owing to such other Lender, or interest thereon, such Benefited Lender shall
purchase for cash from the other Lenders such portion of each such other
Lender's Extensions of Credit, or shall provide such other Lenders with the
benefits of any such collateral, or the proceeds thereof, as shall be necessary
to cause such Benefited Lender to share the excess payment or benefits of such
collateral or proceeds ratably with each of the Lenders; provided, 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
Borrowers agree that each Lender so purchasing a portion of another Lender's
Extensions of Credit 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.
SECTION 4.7 Nature of Obligations of Lenders Regarding Extensions of
Credit; Assumption by the Administrative Agent. The obligations of the Lenders
under this Agreement to
30
make the Loans and issue or participate in Letters of Credit are several and are
not joint or joint and several. Unless the Administrative Agent shall have
received notice from a Lender prior to a proposed borrowing date that such
Lender will not make available to the Administrative Agent such Lender's ratable
portion of the amount to be borrowed on such date (which notice shall not
release such Lender of its obligations hereunder), the Administrative Agent may
assume that such Lender has made such portion available to the Administrative
Agent on the proposed borrowing date in accordance with Sections 2.3(b) and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrowers on such date a corresponding amount. If such amount is made
available to the Administrative Agent on a date after such borrowing date, such
Lender shall pay to the Administrative Agent on demand an amount, until paid,
equal to the product of (a) the amount not made available by such Lender in
accordance with the terms hereof, times (b) the daily average Federal Funds Rate
during such period as determined by the Administrative Agent, times (c) a
fraction the numerator of which is the number of days that elapse from and
including such borrowing date to the date on which such amount not made
available by such Lender in accordance with the terms hereof shall have become
immediately available to the Administrative Agent and the denominator of which
is 360. A certificate of the Administrative Agent with respect to any amounts
owing under this Section 4.7 shall be conclusive, absent manifest error. If such
Lender's Revolving Commitment Percentage of such borrowing is not made available
to the Administrative Agent by such Lender within three (3) Business Days after
such borrowing date, the Administrative Agent shall be entitled to recover such
amount made available by the Administrative Agent with interest thereon at the
rate per annum applicable to Base Rate Loans hereunder, on demand, from the
Borrowers. The failure of any Lender to make available its Revolving Commitment
Percentage of any Loan requested by the Borrowers shall not relieve it or any
other Lender of its obligation, if any, hereunder to make its Revolving
Commitment Percentage of such Loan available on the borrowing date, but no
Lender shall be responsible for the failure of any other Lender to make its
Revolving Commitment Percentage of such Loan available on the borrowing date.
Notwithstanding anything set forth herein to the contrary, any Lender that fails
to make available its Revolving Commitment Percentage of any Loan shall not (a)
have any voting or consent rights under or with respect to any Loan Document or
(b) constitute a "Lender" (or be included in the calculation of Required Lenders
hereunder) for any voting or consent rights under or with respect to any Loan
Document.
SECTION 4.8 Changed Circumstances.
(a) Circumstances Affecting LIBOR Rate Availability. If with respect to
any Interest Period the Administrative Agent or any Lender (after consultation
with the Administrative Agent) shall determine that, by reason of circumstances
affecting the foreign exchange and interbank markets generally, deposits in
eurodollars, in the applicable amounts are not being quoted via the Dow ▇▇▇▇▇
Market Screen 3750 or offered to the Administrative Agent or such Lender for
such Interest Period, then the Administrative Agent shall forthwith give notice
thereof to the Company. Thereafter, until the Administrative Agent notifies the
Company that such circumstances no longer exist, the obligation of the Lenders
to make LIBOR Rate Loans and the right of the Borrowers to convert any Loan to
or continue any Loan as a LIBOR Rate Loan shall be suspended, and the Borrowers
shall repay in full (or cause to be repaid in full) the then outstanding
principal amount of each such LIBOR Rate Loan together with accrued interest
thereon, on the last day of the then current Interest Period applicable to such
LIBOR Rate Loan or convert the then outstanding
31
principal amount of each such LIBOR Rate Loan to a Base Rate Loan as of the last
day of such Interest Period.
(b) Laws Affecting LIBOR Rate Availability. If, after the date hereof,
the introduction of, or any change in, any Applicable Law or any change in the
interpretation or administration thereof by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any of the Lenders (or any of their respective Lending
Offices) with any request or directive (whether or not having the force of law)
of any such Governmental Authority, central bank or comparable agency, shall
make it unlawful or impossible for any of the Lenders (or any of their
respective Lending Offices) to honor its obligations hereunder to make or
maintain any LIBOR Rate Loan, such Lender shall promptly give notice thereof to
the Administrative Agent and the Administrative Agent shall promptly give notice
to the Company and the other Lenders. Thereafter, until the Administrative Agent
notifies the Company that such circumstances no longer exist, (i) the
obligations of the Lenders to make LIBOR Rate Loans and the right of the
Borrowers to convert any Loan or continue any Loan as a LIBOR Rate Loan shall be
suspended and thereafter the Borrowers may select only Base Rate Loans
hereunder, and (ii) if any of the Lenders may not lawfully continue to maintain
a LIBOR Rate Loan to the end of the then current Interest Period applicable
thereto as a LIBOR Rate Loan, the applicable LIBOR Rate Loan shall immediately
be converted to a Base Rate Loan for the remainder of such Interest Period.
(c) Increased Costs. If, after the date hereof, the introduction of, or
any change in, any Applicable Law, or in the interpretation or administration
thereof by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any of the
Lenders (or any of their respective Lending Offices) with any request or
directive (whether or not having the force of law) of such Governmental
Authority, central bank or comparable agency:
(i) shall (except as provided in Section 4.11(e)) subject any
of the Lenders (or any of their respective Lending Offices) to any tax, duty or
other charge with respect to any Note, Letter of Credit or Application or shall
change the basis of taxation of payments to any of the Lenders (or any of their
respective Lending Offices) of the principal of or interest on any Note, Letter
of Credit or Application or any other amounts due under this Agreement in
respect thereof (except for changes in the rate of franchise tax or tax on the
overall net income of any of the Lenders or any of their respective Lending
Offices imposed by the jurisdiction in which such Lender is organized or is or
should be qualified to do business or such Lending Office is located); provided
that the Borrowers shall not be obligated to pay any amounts pursuant to this
Section 4.8(c)(i) to the extent that such amounts are duplicative of any amounts
paid by the Borrowers pursuant to Section 4.11; or
(ii) shall impose, modify or deem applicable any reserve
(including, without limitation, any reserve imposed by the Board of Governors of
the Federal Reserve System), special deposit, insurance or capital or similar
requirement against assets of, deposits with or for the account of, or credit
extended by any of the Lenders (or any of their respective Lending Offices) or
shall impose on any of the Lenders (or any of their respective Lending Offices)
or the foreign exchange and interbank markets any other condition affecting any
Note; and the result of any of the
32
foregoing events described in clause (i) or (ii) above is to increase the costs
to any of the Lenders of maintaining any LIBOR Rate Loan or issuing or
participating in Letters of Credit or to reduce the yield or amount of any sum
received or receivable by any of the Lenders under this Agreement or under the
Notes in respect of a LIBOR Rate Loan or Letter of Credit or Application, then
such Lender shall promptly notify the Administrative Agent, and the
Administrative Agent shall promptly notify the Company of such fact and demand
compensation therefor and, within fifteen (15) days after such notice by the
Administrative Agent, the Borrowers shall pay to such Lender such additional
amount or amounts as will compensate such Lender or Lenders for such increased
cost or reduction. The Administrative Agent will promptly notify the Company of
any event of which it has knowledge which will entitle such Lender to
compensation pursuant to this Section 4.8(c); provided, that the Administrative
Agent shall incur no liability whatsoever to the Lenders or the Borrowers in the
event it fails to do so. The amount of such compensation shall be determined, in
the applicable Lender's sole discretion, based upon the assumption that such
Lender funded its Revolving Commitment Percentage of the LIBOR Rate Loans in the
London interbank market and using any reasonable attribution or averaging
methods which such Lender deems appropriate and practical. A certificate of such
Lender setting forth the basis for determining such amount or amounts necessary
to compensate such Lender shall be forwarded to the Company through the
Administrative Agent and shall be conclusively presumed to be correct save for
manifest error.
SECTION 4.9 Indemnity. The Borrowers hereby indemnify each of the
Lenders against any loss or expense which may arise or be attributable to each
Lender's obtaining, liquidating or employing deposits or other funds acquired to
effect, fund or maintain any LIBOR Rate Loan (a) as a consequence of any failure
by the Borrowers to make any payment when due of any amount due hereunder in
connection with a LIBOR Rate Loan, (b) due to any failure of the Borrowers to
borrow, continue or convert on a date specified therefor in a Notice of
Borrowing or Notice of Conversion/Continuation or (c) due to any payment,
prepayment or conversion of any LIBOR Rate Loan on a date other than the last
day of the Interest Period therefor. The amount of such loss or expense shall be
determined, in the applicable Lender's sole discretion, based upon the
assumption that such Lender funded its Revolving Commitment Percentage of the
LIBOR Rate Loans in the London interbank market and using any reasonable
attribution or averaging methods which such Lender deems appropriate and
practical. A certificate of such Lender setting forth the basis for determining
such amount or amounts necessary to compensate such Lender shall be forwarded to
the Company through the Administrative Agent and shall be conclusively presumed
to be correct save for manifest error.
SECTION 4.10 Capital Requirements. If either (a) the introduction of,
or any change in, or in the interpretation of, any Applicable Law or (b)
compliance with any guideline or request from any central bank or comparable
agency or other Governmental Authority (whether or not having the force of law),
has or would have the effect of reducing the rate of return on the capital of,
or has affected or would affect the amount of capital required to be maintained
by, any Lender or any corporation controlling such Lender as a consequence of,
or with reference to the Commitments and other commitments of this type, below
the rate which such Lender or such other corporation could have achieved but for
such introduction, change or compliance, then within five (5) Business Days
after written demand by any such Lender, the Borrowers shall pay to such Lender
from time to time as specified by such Lender additional amounts sufficient to
compensate such Lender or other corporation for such reduction. A certificate as
to such amounts submitted to the
33
Company and the Administrative Agent by such Lender, shall, in the absence of
manifest error, be presumed to be correct and binding for all purposes.
SECTION 4.11 Taxes.
(a) Payments Free and Clear. Except as otherwise provided in Section
4.11(e), any and all payments by any Borrower hereunder or under the Notes or
the Letters of Credit shall be made free and clear of and without deduction for
any and all present or future taxes, levies, imposts, deductions, charges or
withholding, and all liabilities with respect thereto excluding, (i) in the case
of each Lender and the Administrative Agent, income and franchise taxes imposed
by the jurisdiction under the laws of which such Lender or the Administrative
Agent (as the case may be) is organized or is or should be qualified to do
business or any political subdivision thereof and (ii) in the case of each
Lender, income and franchise taxes imposed by the jurisdiction of such Lender's
Lending Office or any political subdivision thereof (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If the Borrowers shall be required by law
to deduct or withhold any Taxes from or in respect of any sum payable hereunder
or under any Note or in respect of any Letter of Credit to any Lender or the
Administrative Agent, (A) except as otherwise provided in Section 4.11(e), the
sum payable shall be increased as may be necessary so that after making all
required deductions or withholdings (including deductions or withholdings
applicable to additional sums payable under this Section 4.11) such Lender or
the Administrative Agent (as the case may be) receives an amount equal to the
amount such party would have received had no such deductions or withholdings
been made, (B) the Borrowers shall make such deductions or withholdings, (C) the
Borrowers shall pay the full amount deducted to the relevant taxing authority or
other authority in accordance with Applicable Law, and (D) the Borrowers shall
deliver to the Administrative Agent and such Lender evidence of such payment to
the relevant taxing authority or other Governmental Authority in the manner
provided in Section 4.11(d).
(b) Stamp and Other Taxes. In addition, the Borrowers shall pay any
present or future stamp, registration, recordation or documentary taxes or any
other similar fees or charges or excise or property taxes, levies of the United
States or any state or political subdivision thereof or any applicable foreign
jurisdiction which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement, the
Loans, the Letters of Credit, or the other Loan Documents, or the perfection of
any rights or security interest in respect thereof (hereinafter referred to as
"Other Taxes").
(c) Indemnity. Except as otherwise provided in Section 4.11(e), the
Borrowers shall indemnify each Lender and the Administrative Agent for the full
amount of Taxes and Other Taxes (including, without limitation, any Taxes and
Other Taxes imposed by any jurisdiction on amounts payable under this Section
4.11) paid by such Lender or the Administrative Agent (as the case may be) and
any liability (including penalties, interest and expenses) arising therefrom or
with respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted. Such indemnification shall be made within thirty (30) days
from the date such Lender or the Administrative Agent (as the case may be) makes
written demand therefor.
34
(d) Evidence of Payment. Within thirty (30) days after the date of any
payment of Taxes or Other Taxes, the Borrowers shall furnish to the
Administrative Agent and the applicable Lender, at its address referred to in
Section 13.1, the original or a certified copy of a receipt evidencing payment
thereof or other evidence of payment satisfactory to the Administrative Agent.
(e) Delivery of Tax Forms. To the extent required by Applicable Law to
reduce or eliminate withholding or payment of taxes, each Lender and the
Administrative Agent shall deliver to the Company, with a copy to the
Administrative Agent, on the Closing Date or concurrently with the delivery of
the relevant Assignment and Acceptance, as applicable, (i) two United States
Internal Revenue Service Forms W-9, Forms W-8ECI or Forms W-8BEN, as applicable
(or successor forms) properly completed and certifying in each case that such
Lender is entitled to a complete exemption from withholding or deduction for or
on account of any United States federal income taxes, and (ii) an Internal
Revenue Service Form W-8BEN or W-8ECI or successor applicable form, as the case
may be, to establish an exemption from United States backup withholding taxes.
Each such Lender further agrees to deliver to the Company, with a copy to the
Administrative Agent, as applicable, two Form W-9, Form W-8BEN or W-8ECI, or
successor applicable forms or manner of certification, as the case may be, on or
before the date that any such form expires or becomes obsolete or after the
occurrence of any event requiring a change in the most recent form previously
delivered by it to the Company, certifying in the case of a Form W-9, Form
W-8BEN or W-8ECI (or successor forms) that such Lender is entitled to receive
payments under this Agreement without deduction or withholding of any United
States federal income taxes (unless in any such case an event (including without
limitation any change in treaty, law or regulation) has occurred prior to the
date on which any such delivery would otherwise be required which renders such
forms inapplicable or the exemption to which such forms relate unavailable and
such Lender notifies the Company and the Administrative Agent that it is not
entitled to receive payments without deduction or withholding of United States
federal income taxes) and, in the case of a Form W-9, Form W-8BEN or W-8ECI,
establishing an exemption from United States backup withholding tax.
Notwithstanding anything in any Loan Document to the contrary, the Borrowers
shall not be required to pay additional amounts to any Lender or the
Administrative Agent under Section 4.11 or Section 4.8(c), (i) if such Lender or
the Administrative Agent fails to comply with the requirements of this Section
4.11(e), other than to the extent that such failure is due to a change in law
occurring after the date on which such Lender or the Administrative Agent became
a party to this Agreement or (ii) that are the result of such Lender's or the
Administrative Agent's gross negligence or willful misconduct, as applicable.
(f) Survival. Without prejudice to the survival of any other agreement
of any Borrower hereunder, the agreements and obligations of the Borrowers
contained in this Section 4.11 shall survive the payment in full of the
Obligations and the termination of the Commitments.
35
ARTICLE V
CLOSING; CONDITIONS OF CLOSING AND BORROWING
SECTION 5.1 Closing. The closing shall take place at the offices of
Kennedy, Covington, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P. at 10:00 a.m. on October 28, 2004,
or on such other place, date and time as the parties hereto shall mutually
agree.
SECTION 5.2 Conditions to Closing and Initial Extensions of Credit. The
obligation of the Lenders to close this Agreement and to make the initial Loan
or issue or participate in any Letter of Credit is subject to the satisfaction
of each of the following conditions:
(a) Executed Loan Documents. This Agreement, the Revolving Credit
Notes, the Swingline Note, together with any other applicable Loan Documents,
shall have been duly authorized, executed and delivered to the Administrative
Agent by the parties thereto, shall be in full force and effect and no Default
or Event of Default shall exist thereunder, and the Borrowers shall have
delivered original counterparts thereof to the Administrative Agent.
(b) Closing Certificates; etc.
(i) Officer's Certificate of the Borrowers. The Administrative
Agent shall have received a certificate from a Responsible Officer, in form and
substance satisfactory to the Administrative Agent, to the effect that all
representations and warranties of the Borrowers contained in this Agreement and
the other Loan Documents are true, correct and complete; that the Borrowers are
not in violation of any of the covenants contained in this Agreement and the
other Loan Documents; that, after giving effect to the transactions contemplated
by this Agreement, no Default or Event of Default has occurred and is
continuing; and that the Borrowers have satisfied each of the closing
conditions.
(ii) Certificate of Secretary of the Borrowers. The
Administrative Agent shall have received a certificate of the secretary or
assistant secretary of each Borrower certifying as to the incumbency and
genuineness of the signature of each officer of each Borrower executing Loan
Documents to which it is a party and certifying that attached thereto is a true,
correct and complete copy of (A) the articles of incorporation of such Borrower
and all amendments thereto, certified as of a recent date by the appropriate
Governmental Authority in its jurisdiction of incorporation, (B) the bylaws of
such Borrower as in effect on the date of such certifications, (C) resolutions
duly adopted by the Board of Directors of such Borrower authorizing the
borrowings contemplated hereunder and the execution, delivery and performance of
this Agreement and the other Loan Documents to which it is a party, and (D) each
certificate required to be delivered pursuant to Section 5.2(b)(iii).
(iii) Certificates of Good Standing. The Administrative Agent
shall have received long-form certificates as of a recent date of the good
standing of each Borrower under the laws of its jurisdiction of organization
and, to the extent requested by the Administrative Agent, each other
jurisdiction where such Borrower is qualified to do business and a certificate
of the relevant taxing authorities of such jurisdictions certifying that such
Person has filed required tax
36
returns and owes no delinquent taxes.
(iv) Opinions of Counsel. The Administrative Agent shall have
received favorable opinions of counsel to the Borrowers addressed to the
Administrative Agent and the Lenders with respect to the Borrowers, the Loan
Documents and such other matters as the Lenders shall request.
(v) Tax Forms. The Administrative Agent shall have received
copies of the United States Internal Revenue Service forms required by Section
4.11(e) hereof.
(c) Consents; Defaults.
(i) Governmental and Third Party Approvals. The Borrowers
shall have obtained all necessary approvals, authorizations and consents of any
Person and of all Governmental Authorities and courts having jurisdiction with
respect to the transactions contemplated by this Agreement and the other Loan
Documents.
(ii) No Injunction, Etc. No action, proceeding, investigation,
regulation or legislation shall have been instituted, threatened or proposed
before any Governmental Authority to enjoin, restrain, or prohibit, or to obtain
substantial damages in respect of, or which is related to or arises out of this
Agreement or the other Loan Documents or the consummation of the transactions
contemplated hereby or thereby, or which, in the Administrative Agent's sole
discretion, would make it inadvisable to consummate the transactions
contemplated by this Agreement and such other Loan Documents.
(iii) No Event of Default. No Default or Event of Default
shall have occurred and be continuing.
(d) Financial Matters.
(i) Financial Statements. The Administrative Agent shall have
received the audited Consolidated financial statements of the Borrowers and
their Subsidiaries as of January 31, 2004.
(ii) Financial Condition Certificate. The Borrowers shall have
delivered to the Administrative Agent a certificate, in form and substance
satisfactory to the Administrative Agent, and certified as accurate by a
Responsible Officer, that (A) the Borrowers and each of their Subsidiaries are
each Solvent, (B) attached thereto are calculations evidencing compliance on a
pro forma basis with the covenants contained in Article IX hereof, (C) the
financial projections previously delivered to the Administrative Agent represent
the good faith estimates (utilizing reasonable assumptions) of the financial
condition and operations of the Borrowers and their Subsidiaries and (D)
attached thereto is a calculation of the Applicable Margin pursuant to Section
4.1(c).
(iii) Payment at Closing; Fee Letters. The Borrowers shall
have paid to the Administrative Agent and the Lenders the fees set forth or
referenced in Section 4.3 and any
37
other accrued and unpaid fees or commissions due hereunder (including, without
limitation, legal fees and expenses) and to any other Person such amount as may
be due thereto in connection with the transactions contemplated hereby,
including all taxes, fees and other charges in connection with the execution,
delivery, recording, filing and registration of any of the Loan Documents.
(e) Miscellaneous.
(i) Notice of Borrowing. The Administrative Agent shall have
received a Notice of Borrowing, as applicable, from the Borrowers in accordance
with Section 2.3(a), and a Notice of Account Designation specifying the account
or accounts to which the proceeds of any Loans made after the Closing Date are
to be disbursed.
(ii) Repayment of Loans under the Existing Credit Agreement.
On the Closing Date, (i) all Loans outstanding under the Existing Credit
Agreement together with all accrued but unpaid interest due on the Loans to but
excluding the closing date shall have been paid in cash in full, (ii) there
shall have been paid in cash in full all accrued but unpaid fees under the
Existing Credit Agreement due to but excluding the Closing Date and all other
amounts, costs and expenses then owing, if any, to any of the lenders under the
Existing Credit Agreement to the satisfaction of such lenders under the Existing
Credit Agreement, regardless of whether or not such amounts would otherwise be
due and payable at such time pursuant to the terms of the Existing Credit
Agreement, and (iii) the Existing Credit Agreement shall be terminated.
(iii) Existing Letter of Credit. The Administrative Agent
shall have received evidence to its satisfaction that there are no outstanding
unpaid draws or any existing default or event of default under the Existing
Letter of Credit or any Existing Letter of Credit Documents.
(iv) Other Documents. All opinions, certificates and other
instruments and all proceedings in connection with the transactions contemplated
by this Agreement shall be satisfactory in form and substance to the
Administrative Agent. The Administrative Agent shall have received copies of all
other documents, certificates and instruments reasonably requested thereby, with
respect to the transactions contemplated by this Agreement.
SECTION 5.3 Conditions to All Extensions of Credit. The obligations of
the Lenders to make any Extensions of Credit (including the initial Extension of
Credit), participate in any Letter of Credit, convert or continue any Loan
and/or the Issuing Lender to issue or extend any Letter of Credit are subject to
the satisfaction of the following conditions precedent on the relevant
borrowing, continuation, conversion, issuance or extension date:
(a) Continuation of Representations and Warranties. The
representations and warranties contained in Article VI shall be true and correct
on and as of such borrowing, continuation, conversion, issuance or extension
date with the same effect as if made on and as of such date; except for any
representation and warranty made as of an earlier date, which representation and
warranty shall remain true and correct as of such earlier date.
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(b) No Existing Default. No Default or Event of Default shall
have occurred and be continuing (i) on the borrowing, continuation or conversion
date with respect to such Loan or after giving effect to the Loans to be made,
continued or converted on such date or (ii) on the issuance or extension date
with respect to such Letter of Credit or after giving effect to the issuance or
extension of such Letter of Credit on such date.
(c) Notices. The Administrative Agent shall have received a
Notice of Borrowing or Notice of Conversion/Continuation, as applicable, from
the Borrowers in accordance with Section 2.3(a).
(d) Additional Documents. The Administrative Agent shall have
received each additional document, instrument, legal opinion or other item
reasonably requested by it.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE BORROWERS
SECTION 6.1 Representations and Warranties. To induce the
Administrative Agent and Lenders to enter into this Agreement and to induce the
Lenders to make Extensions of Credit and/or participate in the Existing Letter
of Credit, the Borrowers hereby represent and warrant to the Administrative
Agent and Lenders both before and after giving effect to the transactions
contemplated hereunder that:
(a) Organization; Power; Qualification. Each of the Borrowers and their
Subsidiaries is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or formation, has the power and
authority to own its properties and to carry on its business as now being and
hereafter proposed to be conducted and is duly qualified and authorized to do
business in each jurisdiction in which the character of its properties or the
nature of its business requires such qualification and authorization. The
jurisdictions in which the Borrowers and their Subsidiaries are organized and
qualified to do business as of the Closing Date are described on Schedule
6.1(a).
(b) Ownership. Each Subsidiary of any Borrower as of the Closing Date
is listed on Schedule 6.1(b). As of the Closing Date, the capitalization of the
Borrowers and their Subsidiaries consists of the number of shares, authorized,
issued and outstanding, of such classes and series, with or without par value,
described on Schedule 6.1(b). All outstanding shares have been duly authorized
and validly issued and are fully paid and nonassessable, with no personal
liability attaching to the ownership thereof, and not subject to any preemptive
or similar rights. The shareholders of the Subsidiaries of each Borrower and the
number of shares owned by each as of the Closing Date are described on Schedule
6.1(b). As of the Closing Date, there are no outstanding stock purchase
warrants, subscriptions, options, securities, instruments or other rights of any
type or nature, which are convertible into Debt or which are exchangeable for or
otherwise provide for or permit the issuance of capital stock of the Borrowers
or their Subsidiaries in an amount which in the aggregate for any Borrower or
Subsidiary exceeds twenty (20%) percent of the issued and outstanding capital
stock of such Borrower or Subsidiary.
39
(c) Authorization of Agreement, Loan Documents and Borrowing. Each of
the Borrowers and their Subsidiaries has the right, power and authority and has
taken all necessary corporate and other action to authorize the execution,
delivery and performance of this Agreement and each of the other Loan Documents
to which it is a party in accordance with their respective terms. This Agreement
and each of the other Loan Documents have been duly executed and delivered by
the duly authorized officers of each Borrower and each of its Subsidiaries party
thereto, and each such document constitutes the legal, valid and binding
obligation of each Borrower or its Subsidiary party thereto, enforceable in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar state or federal
debtor relief laws from time to time in effect which affect the enforcement of
creditors' rights in general and the availability of equitable remedies.
(d) Compliance of Agreement, Loan Documents and Borrowing with Laws,
Etc. The execution, delivery and performance by the Borrowers and their
Subsidiaries of the Loan Documents to which each such Person is a party, in
accordance with their respective terms, the Extensions of Credit hereunder and
the transactions contemplated hereby do not and will not, by the passage of
time, the giving of notice or otherwise, (i) require any Governmental Approval
or violate any Applicable Law relating to the Borrowers or any of their
Subsidiaries, (ii) conflict with, result in a breach of or constitute a default
under the articles of incorporation, bylaws or other organizational documents of
any Borrower or any of its Subsidiaries or any indenture, agreement or other
instrument to which such Person is a party or by which any of its properties may
be bound or any Governmental Approval relating to such Person, (iii) result in
or require the creation or imposition of any Lien upon or with respect to any
property now owned or hereafter acquired by such Person other than Liens arising
under the Loan Documents or (iv) require any consent or authorization of, filing
with, or other act in respect of, an arbitrator or Governmental Authority and no
consent of any other Person is required in connection with the execution,
delivery, performance, validity or enforceability of this Agreement.
(e) Compliance with Law; Governmental Approvals. Except in each case
where the failure to so comply could not reasonably be expected to have a
Material Adverse Effect, each of the Borrowers and its Subsidiaries (i) has all
Governmental Approvals required by any Applicable Law for it to conduct its
business, each of which is in full force and effect, is final and not subject to
review on appeal and is not the subject of any pending or, to the best of its
knowledge, threatened attack by direct or collateral proceeding, (ii) is in
compliance with each Governmental Approval applicable to it and in compliance
with all other Applicable Laws relating to it or any of its respective
properties and (iii) has timely filed all material reports, documents and other
materials required to be filed by it under all Applicable Laws with any
Governmental Authority and has retained all material records and documents
required to be retained by it under Applicable Law.
(f) Tax Returns and Payments. Each of the Borrowers and its
Subsidiaries has duly filed or caused to be filed all federal, state, local and
other tax returns required by Applicable Law to be filed, and has paid, or made
adequate provision for the payment of, all federal, state, local and other
taxes, assessments and governmental charges or levies upon it and its property,
income, profits and assets which are due and payable. Such returns accurately
reflect in all material respects all liability for taxes of the Borrowers and
their Subsidiaries for the periods covered thereby. Except as
40
set forth on Schedule 6.1(f), there is no ongoing audit or examination or, to
the knowledge of any Borrower, other investigation by any Governmental Authority
of the tax liability of any Borrower and its Subsidiaries. No Governmental
Authority has asserted any Lien or other claim against any Borrower or any
Subsidiary thereof with respect to unpaid taxes which has not been discharged or
resolved. The charges, accruals and reserves on the books of the Borrowers and
any of their Subsidiaries in respect of federal, state, local and other taxes
for all Fiscal Years and portions thereof since the organization of each
Borrower and any of its Subsidiaries are in the judgment of the Borrowers
adequate, and such Borrower does not anticipate any additional taxes or
assessments for any of such years.
(g) Intellectual Property Matters. Each of the Borrowers and its
Subsidiaries owns or possesses rights to use all franchises, licenses,
copyrights, copyright applications, patents, patent rights or licenses, patent
applications, trademarks, trademark rights, service ▇▇▇▇, service ▇▇▇▇ rights,
trade names, trade name rights, copyrights and rights with respect to the
foregoing which are required to conduct its business. No event has occurred
which permits, or after notice or lapse of time or both would permit, the
revocation or termination of any such rights, and neither the Borrowers nor any
Subsidiaries thereof are liable to any Person for infringement under Applicable
Law with respect to any such rights as a result of its business operations.
(h) Environmental Matters.
(i) To the best of each Borrower's knowledge, the properties
owned, leased or operated by any Borrower and its Subsidiaries now or in the
past do not contain, and have not previously contained, any Hazardous Materials
in amounts or concentrations which (A) constitute or constituted a violation of
applicable Environmental Laws or (B) could give rise to liability under
applicable Environmental Laws;
(ii) To the best of each Borrower's knowledge, each Borrower,
each Subsidiary and such properties and all operations conducted in connection
therewith are in compliance, and have been in compliance, with all applicable
Environmental Laws, and there is no contamination at, under or about such
properties or such operations which could interfere with the continued operation
of such properties or impair the fair saleable value thereof;
(iii) No Borrower or any Subsidiary thereof has received any
notice of violation, alleged violation, non-compliance, liability or potential
liability regarding environmental matters, Hazardous Materials, or compliance
with Environmental Laws, nor does any Borrower or any Subsidiary thereof have
knowledge or reason to believe that any such notice will be received or is being
threatened;
(iv) To the best of each Borrower's knowledge, Hazardous
Materials have not been transported or disposed of to or from the properties
owned, leased or operated by any Borrower and its Subsidiaries in violation of,
or in a manner or to a location which could give rise to liability under,
Environmental Laws, nor have any Hazardous Materials been generated, treated,
stored or disposed of at, on or under any of such properties in violation of, or
in a manner that could give rise to liability under, any applicable
Environmental Laws;
41
(v) No judicial proceedings or governmental or administrative
action is pending, or, to the knowledge of any Borrower, threatened, under any
Environmental Law to which any Borrower or any Subsidiary thereof is or will be
named as a potentially responsible party with respect to such properties or
operations conducted in connection therewith, nor are there any consent decrees
or other decrees, consent orders, administrative orders or other orders, or
other administrative or judicial requirements outstanding under any
Environmental Law with respect to any Borrower, any Subsidiary or such
properties or such operations; and
(vi) To the best of each Borrower's knowledge, there has been
no release or threat of release of Hazardous Materials at or from properties
owned, leased or operated by any Borrower or any Subsidiary, now or in the past,
in violation of or in amounts or in a manner that could give rise to liability
under Environmental Laws.
(i) ERISA.
(i) As of the Closing Date, no Borrower or any ERISA Affiliate
maintains or contributes to, or has any obligation under, any Employee Benefit
Plans other than those identified on Schedule 6.1(i);
(ii) Each Borrower and each ERISA Affiliate is in material
compliance with all applicable provisions of ERISA and the regulations and
published interpretations thereunder with respect to all Employee Benefit Plans
except for any required amendments for which the remedial amendment period as
defined in Section 401(b) of the Code has not yet expired and except where a
failure to so comply could not reasonably be expected to have a Material Adverse
Effect. Each Employee Benefit Plan that is intended to be qualified under
Section 401(a) of the Code has been determined by the Internal Revenue Service
to be so qualified, and each trust related to such plan has been determined to
be exempt under Section 501(a) of the Code except for such plans that have not
yet received determination letters but for which the remedial amendment period
for submitting a determination letter has not yet expired. No liability has been
incurred by any Borrower or any ERISA Affiliate which remains unsatisfied for
any taxes or penalties with respect to any Employee Benefit Plan or any
Multiemployer Plan except for a liability that could not reasonably be expected
to have a Material Adverse Effect;
(iii) As of the Closing Date, no Pension Plan has been
terminated, nor has any accumulated funding deficiency (as defined in Section
412 of the Code) been incurred (without regard to any waiver granted under
Section 412 of the Code), nor has any funding waiver from the Internal Revenue
Service been received or requested with respect to any Pension Plan, nor has any
Borrower or any ERISA Affiliate failed to make any contributions or to pay any
amounts due and owing as required by Section 412 of the Code, Section 302 of
ERISA or the terms of any Pension Plan prior to the due dates of such
contributions under Section 412 of the Code or Section 302 of ERISA, nor has
there been any event requiring any disclosure under Section 4041(c)(3)(C) or
4063(a) of ERISA with respect to any Pension Plan;
(iv) Except where the failure of any of the following
representations to be correct in all material respects could not reasonably be
expected to have a Material Adverse Effect, no Borrower or any ERISA Affiliate
has: (A) engaged in a nonexempt prohibited
42
transaction described in Section 406 of the ERISA or Section 4975 of the Code,
(B) incurred any liability to the PBGC which remains outstanding other than the
payment of premiums and there are no premium payments which are due and unpaid,
(C) failed to make a required contribution or payment to a Multiemployer Plan,
or (D) failed to make a required installment or other required payment under
Section 412 of the Code;
(v) No Termination Event has occurred or is reasonably
expected to occur; and
(vi) Except where the failure of any of the following
representations to be correct in all material respects could not reasonably be
expected to have a Material Adverse Effect, no proceeding, claim (other than a
benefits claim in the ordinary course of business), lawsuit and/or investigation
is existing or, to the best knowledge of any Borrower after due inquiry,
threatened concerning or involving any (A) employee welfare benefit plan (as
defined in Section 3(1) of ERISA) currently maintained or contributed to by any
Borrower or any ERISA Affiliate, (B) Pension Plan or (C) Multiemployer Plan.
(j) Margin Stock. No Borrower or any Subsidiary thereof is engaged
principally or as one of its activities in the business of extending credit for
the purpose of "purchasing" or "carrying" any "margin stock" (as each such term
is defined or used, directly or indirectly, in Regulation U of the Board of
Governors of the Federal Reserve System). No part of the proceeds of any of the
Loans or Letters of Credit will be used for purchasing or carrying margin stock
or for any purpose which violates, or which would be inconsistent with, the
provisions of Regulation T, U or X of such Board of Governors.
(k) Government Regulation. No Borrower or any Subsidiary thereof is an
"investment company" or a company "controlled" by an "investment company" (as
each such term is defined or used in the Investment Company Act of 1940, as
amended) and no Borrower or any Subsidiary thereof is, or after giving effect to
the transactions contemplated by this Agreement will be, subject to regulation
under the Public Utility Holding Company Act of 1935 or the Interstate Commerce
Act, each as amended, or any other Applicable Law which limits its ability to
incur or consummate the transactions contemplated hereby.
(l) Material Contracts. Schedule 6.1(l) sets forth a complete and
accurate list of all Material Contracts of any Borrower and its Subsidiaries in
effect as of the Closing Date not listed on any other Schedule hereto; other
than as set forth in Schedule 6.1(l), each such Material Contract is, and after
giving effect to the consummation of the transactions contemplated by the Loan
Documents will be, in full force and effect in accordance with the terms
thereof. No Borrower or any Subsidiary (nor, to the knowledge of any Borrower,
any other party thereto) is in breach of or in default under any Material
Contract in any material respect.
(m) Employee Relations. Each Borrower and its Subsidiaries has a stable
work force in place and is not, as of the Closing Date, party to any collective
bargaining agreement nor has any labor union been recognized as the
representative of its employees except as set forth on Schedule 6.1(m). No
Borrower knows of any pending, threatened or contemplated strikes, work stoppage
or other collective labor disputes involving its employees or those of its
Subsidiaries.
43
(n) Burdensome Provisions. No Borrower or any Subsidiary thereof is a
party to any indenture, agreement, lease or other instrument, or subject to any
corporate or partnership restriction, Governmental Approval or Applicable Law
which is so unusual or burdensome as in the foreseeable future could be
reasonably expected to have a Material Adverse Effect. The Borrowers and their
Subsidiaries do not presently anticipate that future expenditures needed to meet
the provisions of any statutes, orders, rules or regulations of a Governmental
Authority will be so burdensome as to have a Material Adverse Effect. No
Subsidiary is party to any agreement or instrument or otherwise subject to any
restriction or encumbrance that restricts or limits its ability to make dividend
payments or other distributions in respect of its capital stock to its parent
Borrower or any Subsidiary or to transfer any of its assets or properties to its
parent Borrower or any other Subsidiary in each case other than existing under
or by reason of the Loan Documents or Applicable Law.
(o) Financial Statements. The audited Consolidated balance sheet of the
Borrowers and their Subsidiaries as of January 31, 2004 and the related audited
statements of income and retained earnings and cash flows for the Fiscal Year
then ended, copies of which have been furnished to the Administrative Agent and
each Lender, are complete and correct and fairly present on a Consolidated basis
the assets, liabilities and financial position of the Borrowers and their
Subsidiaries as at such dates, and the results of the operations and changes of
financial position for the periods then ended (other than customary year-end
adjustments for unaudited financial statements). All such financial statements,
including the related schedules and notes thereto, have been prepared in
accordance with GAAP. The Borrowers and their Subsidiaries have no Debt,
obligation or other unusual forward or long-term commitment which is not fairly
reflected in the foregoing financial statements or in the notes thereto.
(p) No Material Adverse Change. Since January 31, 2004, there has been
no material adverse change in the properties, business, operations, prospects,
or condition (financial or otherwise) of the Borrowers and their Subsidiaries
and no event has occurred or condition arisen that could reasonably be expected
to have a Material Adverse Effect.
(q) Solvency. As of the Closing Date and after giving effect to each
Extension of Credit made hereunder, each Borrower and each of its Subsidiaries
will be Solvent.
(r) Titles to Properties. Each Borrower and its Subsidiaries has such
title to the real property owned or leased by it as is necessary or desirable to
the conduct of its business and valid and legal title to all of its personal
property and assets, including, but not limited to, those reflected on the
balance sheets of the Borrowers and their Subsidiaries delivered pursuant to
Section 6.1(o), except those which have been disposed of by such Borrower or its
Subsidiaries subsequent to such date which dispositions have been in the
ordinary course of business or as otherwise expressly permitted hereunder.
(s) Liens. None of the properties and assets of any Borrower or any
Subsidiary thereof is subject to any Lien, except Liens permitted pursuant to
Section 10.2. No financing statement under the Uniform Commercial Code of any
state which names any Borrower or any Subsidiary thereof or any of their
respective trade names or divisions as debtor and which has not been
44
terminated, has been filed in any state or other jurisdiction and no Borrower or
any Subsidiary thereof has signed any such financing statement or any security
agreement authorizing any secured party thereunder to file any such financing
statement, except to perfect those Liens permitted by Section 10.2 hereof.
(t) Debt and Guaranty Obligations. Schedule 6.1(t) is a complete and
correct listing of all Debt and Guaranty Obligations of each Borrower and its
Subsidiaries as of the Closing Date in excess of $1,000,000. Each Borrower and
its Subsidiaries have performed and are in compliance with all of the terms of
such Debt and Guaranty Obligations and all instruments and agreements relating
thereto, and no default or event of default, or event or condition which with
notice or lapse of time or both would constitute such a default or event of
default on the part of any Borrower or any of its Subsidiaries exists with
respect to any such Debt or Guaranty Obligation.
(u) Litigation. Except for matters existing on the Closing Date and set
forth on Schedule 6.1(u), there are no actions, suits or proceedings pending
nor, to the knowledge of any Borrower, threatened against or in any other way
relating adversely to or affecting any Borrower or any Subsidiary thereof or any
of their respective properties in any court or before any arbitrator of any kind
or before or by any Governmental Authority except for any such actions, suits or
proceedings which individually and in the aggregate could not reasonably be
expected to have a Material Adverse Effect.
(v) Absence of Defaults. No event has occurred or is continuing which
constitutes a Default or an Event of Default, or which constitutes, or which
with the passage of time or giving of notice or both would constitute, a default
or event of default by any Borrower or any Subsidiary thereof under any Material
Contract or judgment, decree or order to which such Borrower or its Subsidiaries
is a party or by which such Borrower or its Subsidiaries or any of their
respective properties may be bound or which would require such Borrower or its
Subsidiaries to make any payment thereunder prior to the scheduled maturity date
therefor.
(w) Senior Debt Status. The Obligations of the Borrowers and each of
their Subsidiaries under this Agreement and each of the other Loan Documents
ranks and shall continue to rank at least senior in priority of payment to all
Subordinated Debt of each such Person and is designated as "Senior Indebtedness"
under all instruments and documents, now or in the future, relating to all
Subordinated Debt and all senior unsecured Debt of such Person.
(x) Accuracy and Completeness of Information. All written information,
reports and other papers and data produced by or on behalf of each Borrower or
any Subsidiary thereof (other than financial projections, which shall be subject
to the standard set forth in Section 7.1(c)) and furnished to the Lenders were,
at the time the same were so furnished, complete and correct in all material
respects to the extent necessary to give the recipient a true and accurate
knowledge of the subject matter. No document furnished or written statement made
to the Administrative Agent or the Lenders by any Borrower or any Subsidiary
thereof in connection with the negotiation, preparation or execution of this
Agreement or any of the Loan Documents contains or will contain any untrue
statement of a fact material to the creditworthiness of each Borrower or its
Subsidiaries or omits or will omit to state a fact necessary in order to make
the statements contained therein not misleading. No Borrower is aware of any
facts which it has not disclosed in writing to the
45
Administrative Agent having a Material Adverse Effect, or insofar as such
Borrower can now foresee, which could reasonably be expected to have a Material
Adverse Effect.
SECTION 6.2 Survival of Representations and Warranties, Etc. All
representations and warranties set forth in this Article VI and all
representations and warranties contained in any certificate, or any of the Loan
Documents (including, but not limited to, any such representation or warranty
made in or in connection with any amendment thereto) shall constitute
representations and warranties made under this Agreement. All representations
and warranties made under this Agreement shall be made or deemed to be made at
and as of the Closing Date (except those that are expressly made as of a
specific date), shall survive the Closing Date and shall not be waived by the
execution and delivery of this Agreement, any investigation made by or on behalf
of the Lenders or any borrowing hereunder.
ARTICLE VII
FINANCIAL INFORMATION AND NOTICES
Until all the Obligations have been paid and satisfied in full and the
Commitments terminated, unless consent has been obtained in the manner set forth
in Section 13.10 hereof, the Company will furnish or cause to be furnished to
the Administrative Agent at the Administrative Agent's Office at the address set
forth in Section 13.1 and to the Lenders at their respective addresses as set
forth in the Register and/or provided to the Administrative Agent from time to
time, or such other office as may be designated by the Administrative Agent and
Lenders from time to time:
SECTION 7.1 Financial Statements and Projections.
(a) Quarterly Financial Statements. As soon as practicable and in any
event within sixty (60) days after the end of each of the first three (3) fiscal
quarters of each Fiscal Year, an unaudited Consolidated balance sheet of the
Borrowers and their Subsidiaries as of the close of such fiscal quarter and an
unaudited Consolidated statement of income for the fiscal quarter then ended,
together with statements of retained earnings and cash flows for the portion of
the Fiscal Year then ended, including the notes thereto, all in reasonable
detail setting forth in comparative form the corresponding figures as of the end
of and for the corresponding period in the preceding Fiscal Year and prepared by
the Company in accordance with GAAP and, if applicable, containing disclosure of
the effect on the financial position or results of operations of any change in
the application of accounting principles and practices during the period, and
certified by the chief financial officer of the Company to present fairly in all
material respects the financial condition of the Borrowers and their
Subsidiaries on a Consolidated basis as of their respective dates and the
results of operations of the Borrowers and their Subsidiaries for the respective
periods then ended, subject to normal year end adjustments.
(b) Annual Financial Statements. As soon as practicable and in any
event within ninety (90) days after the end of each Fiscal Year, an audited
Consolidated balance sheet of the Borrowers and their Subsidiaries as of the
close of such Fiscal Year and audited Consolidated statements of
46
income, retained earnings and cash flows for the Fiscal Year then ended,
including the notes thereto, all in reasonable detail setting forth in
comparative form the corresponding figures as of the end of and for the
preceding Fiscal Year and prepared in accordance with GAAP and, if applicable,
containing disclosure of the effect on the financial position or results of
operations of any change in the application of accounting principles and
practices during the year, to be accompanied by a report thereon by an
independent certified public accounting firm, reasonably acceptable to the
Administrative Agent, that is not qualified with respect to scope limitations
imposed by any Borrower or any of its Subsidiaries or with respect to accounting
principles followed by any Borrower or any of its Subsidiaries not in accordance
with GAAP.
(c) Annual Business Plan and Financial Projections. As soon as
practicable and in any event prior to the end of the first fiscal quarter of
each Fiscal Year, a business plan of the Borrowers and their Subsidiaries for
such Fiscal Year, such plan to be prepared in accordance with GAAP and to
include, on a quarterly basis, the following: a quarterly operating and capital
budget, a projected income statement, statement of cash flows and balance sheet
and a report containing management's discussion and analysis of such
projections, accompanied by a certificate from the chief financial officer of
the Company to the effect that, to the best of such officer's knowledge, such
projections are good faith estimates (utilizing reasonable assumptions) of the
financial condition and operations of the Borrowers and their Subsidiaries for
such four (4) quarter period.
SECTION 7.2 Officer's Compliance Certificate. At each time financial
statements are delivered pursuant to Sections 7.1 (a) or (b) and at such other
times as the Administrative Agent shall reasonably request, a certificate of the
chief financial officer or the treasurer of the Company in the form of Exhibit F
attached hereto (an "Officer's Compliance Certificate").
SECTION 7.3 Accountants' Certificate At each time financial statements
are delivered pursuant to Section 7.1(b), a certificate of the independent
public accountants certifying such financial statements addressed to the
Administrative Agent for the benefit of the Lenders stating that in making the
examination necessary for the certification of such financial statements, they
obtained no knowledge of any Default or Event of Default or, if such is not the
case, specifying such Default or Event of Default and its nature and period of
existence.
SECTION 7.4 Other Reports
Such information regarding the operations, business affairs and
financial condition of any Borrower or any of its Subsidiaries as the
Administrative Agent or any Lender may reasonably request.
SECTION 7.5 Notice of Litigation and Other Matters. Prompt (but in no
event later than ten (10) days after an officer of any Borrower obtains
knowledge thereof) telephonic and written notice of:
(a) the commencement of all proceedings and investigations by or before
any Governmental Authority and all actions and proceedings in any court or
before any arbitrator against or involving any Borrower or any Subsidiary
thereof or any of their respective properties,
47
assets or businesses which involves an amount in excess of $5,000,000
individually or $10,000,000 in the aggregate;
(b) any notice of any violation received by any Borrower or any
Subsidiary thereof from any Governmental Authority including, without
limitation, any notice of violation of Environmental Laws involving an amount in
excess of $5,000,000 individually or in the aggregate;
(c) any labor controversy that has resulted in, or threatens to result
in, a strike or other work action against any Borrower or any Subsidiary thereof
at any material business location of any Borrower or any Subsidiary;
(d) any attachment, judgment, lien, levy or order exceeding $1,000,000
that may be assessed against any Borrower or any Subsidiary thereof;
(e) (i) any Default or Event of Default, (ii) the occurrence or
existence of any event or circumstance that foreseeably will become a Default or
Event of Default or (iii) any event which constitutes or which with the passage
of time or giving of notice or both would constitute a default or event of
default under any Material Contract to which any Borrower or any of its
Subsidiaries is a party or by which any Borrower or any Subsidiary thereof or
any of their respective properties may be bound if such default or event of
default shall have a Material Adverse Effect on any Borrower or any Subsidiary;
(f) (i) any unfavorable determination letter from the Internal Revenue
Service regarding the qualification of an Employee Benefit Plan under Section
401(a) of the Code (along with a copy thereof), (ii) all notices received by any
Borrower or any ERISA Affiliate of the PBGC's intent to terminate any Pension
Plan or to have a trustee appointed to administer any Pension Plan, (iii) all
notices received by any Borrower or any ERISA Affiliate from a Multiemployer
Plan sponsor concerning the imposition or amount of withdrawal liability
pursuant to Section 4202 of ERISA and (iv) any Borrower obtaining knowledge or
reason to know that any Borrower or any ERISA Affiliate has filed or intends to
file a notice of intent to terminate any Pension Plan under a distress
termination within the meaning of Section 4041(c) of ERISA; and
(g) any event which makes any of the representations set forth in
Section 6.1 inaccurate in any material respect.
SECTION 7.6 Accuracy of Information. All written information, reports,
statements and other papers and data furnished by or on behalf of any Borrower
to the Administrative Agent or any Lender whether pursuant to this Article VII
or any other provision of this Agreement shall be, at the time the same is so
furnished, in compliance with the representations and warranties set forth in
Section 6.1(x).
48
ARTICLE VIII
AFFIRMATIVE COVENANTS
Until all of the Obligations have been paid and satisfied in full and
the Commitments terminated, unless consent has been obtained in the manner
provided for in Section 13.10, each Borrower will, and will cause each of its
Subsidiaries to:
SECTION 8.1 Preservation of Corporate Existence and Related Matters.
Except as permitted by Section 10.4, preserve and maintain its separate
corporate existence and all rights, franchises, licenses and privileges
necessary to the conduct of its business, and qualify and remain qualified as a
foreign corporation and authorized to do business in each jurisdiction where the
nature and scope of its activities require it to so qualify under Applicable
Law.
SECTION 8.2 Maintenance of Property. Protect and preserve all
properties useful in and material to its business, including copyrights,
patents, trade names, service marks and trademarks; maintain in good working
order and condition all buildings, equipment and other tangible real and
personal property; and from time to time make or cause to be made all renewals,
replacements and additions to such property necessary for the conduct of its
business, so that the business carried on in connection therewith may be
conducted in a commercially reasonable matter.
SECTION 8.3 Insurance. Maintain insurance with financially sound and
reputable insurance companies against such risks and in such amounts as are
customarily maintained by similar businesses and as may be required by
Applicable Law, and on the Closing Date and from time to time thereafter deliver
to the Administrative Agent upon its request a detailed list of the insurance
then in effect, stating the names of the insurance companies, the amounts and
rates of the insurance, the dates of the expiration thereof and the properties
and risks covered thereby. As of the Closing Date, the Borrowers maintain the
insurance described on Schedule 8.3.
SECTION 8.4 Accounting Methods and Financial Records. Maintain a system
of accounting, and keep such books, records and accounts (which shall be true
and complete in all material respects) as may be required or as may be necessary
to permit the preparation of financial statements in accordance with GAAP and in
compliance with the regulations of any Governmental Authority having
jurisdiction over it or any of its properties.
SECTION 8.5 Payment and Performance of Obligations. Pay and perform all
Obligations under this Agreement and the other Loan Documents, and pay or
perform (a) all taxes, assessments and other governmental charges that may be
levied or assessed upon it or any of its property, and (b) all other
indebtedness, obligations and liabilities in accordance with customary trade
practices; provided, that any Borrower or such Subsidiary may contest any item
described in clauses (a) or (b) of this Section 8.5 in good faith so long as
adequate reserves are maintained with respect thereto in accordance with GAAP.
SECTION 8.6 Compliance With Laws and Approvals. Observe and remain in
compliance in all material respects with all Applicable Laws and maintain in
full force and effect all Governmental Approvals, in each case applicable to the
conduct of its business.
49
SECTION 8.7 Environmental Laws. In addition to and without limiting the
generality of Section 8.6, (a) comply with, and ensure such compliance in all
material respects by all tenants and subtenants with all applicable
Environmental Laws and obtain and comply with and maintain, and ensure that all
tenants and subtenants, if any, obtain and comply with and maintain, any and all
licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws, (b) conduct and complete all investigations,
studies, sampling and testing, and all remedial, removal and other actions
required under Environmental Laws, and promptly comply with all lawful orders
and directives of any Governmental Authority regarding Environmental Laws,
unless such lawful orders and directives are being contested in good faith and
by appropriate proceedings and for which adequate reserves are maintained to the
extent required by GAAP, and (c) defend, indemnify and hold harmless the
Administrative Agent and the Lenders, and their respective parents,
Subsidiaries, Affiliates, employees, agents, officers and directors, from and
against any claims, demands, penalties, fines, liabilities, settlements,
damages, costs and expenses of whatever kind or nature known or unknown,
contingent or otherwise, arising out of, or in any way relating to the presence
of Hazardous Materials, or the violation of, noncompliance with or liability
under any Environmental Laws applicable to the operations of any Borrower or any
such Subsidiary, or any orders, requirements or demands of Governmental
Authorities related thereto, including, without limitation, reasonable
attorney's and consultant's fees, investigation and laboratory fees, response
costs, court costs and litigation expenses, except to the extent that any of the
foregoing directly result from the gross negligence or willful misconduct of the
party seeking indemnification therefor.
SECTION 8.8 Compliance with ERISA. In addition to and without limiting
the generality of Section 8.6, (a) except where the failure to so comply could
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, (i) comply with all material applicable provisions of ERISA and
the regulations and published interpretations thereunder with respect to all
Employee Benefit Plans, (ii) not take any action or fail to take action the
result of which could be a liability to the PBGC or to a Multiemployer Plan,
(iii) not participate in any prohibited transaction that could result in any
civil penalty under ERISA or tax under the Code and (iv) operate each Employee
Benefit Plan in such a manner that will not incur any tax liability under
Section 4980B of the Code or any liability to any qualified beneficiary as
defined in Section 4980B of the Code and (b) furnish to the Administrative Agent
upon the Administrative Agent's request such additional information about any
Employee Benefit Plan as may be reasonably requested by the Administrative
Agent.
SECTION 8.9 Compliance With Agreements. Comply in all material respects
with each term, condition and provision of all material leases, agreements and
other instruments entered into in the conduct of its business including, without
limitation, any Material Contract.
SECTION 8.10 Visits and Inspections. Permit representatives of the
Administrative Agent or any Lender, from time to time, during normal business
hours, to visit and inspect its properties; inspect, audit and make extracts
from its books, records and files, including, but not limited to, management
letters prepared by independent accountants; and discuss with its principal
officers, and its independent accountants, its business, assets, liabilities,
financial condition, results of operations and business prospects.
50
SECTION 8.11 Additional Subsidiaries. Notify the Administrative Agent
within ten (10) days of the creation or acquisition of any Subsidiary of any
Borrower, which is created or acquired after the Closing Date and which engages
in any business operations or owns assets with a fair market value in excess of
$5,000,000, and promptly thereafter (and in any event within thirty (30) days
following the creation or acquisition of such Subsidiary) cause to be executed
and delivered to the Administrative Agent (a) a duly executed Joinder Agreement
and (b) favorable legal opinions addressed to the Administrative Agent and
Lenders in form and substance satisfactory thereto with respect to such Joinder
Agreement and such other documents and closing certificates as may be requested
by the Administrative Agent.
SECTION 8.12 Use of Proceeds. Use the proceeds of the Extensions of
Credit (a) to finance acquisitions permitted by Section 10.3 hereof, (b) to
refinance the Existing Credit Agreement, (c) to prepay or refinance Debt
permitted pursuant to Section 10.1(c), provided no Default or Event of Default
shall have occurred and be continuing both before and after giving effect to
such refinance or prepayment, and (d) for working capital and general corporate
requirements of the Borrowers and their Subsidiaries, including the payment of
certain fees and expenses incurred in connection with the transactions.
SECTION 8.13 Further Assurances. Make, execute and deliver all such
additional and further acts, things, deeds and instruments as the Administrative
Agent or the Required Lenders (through the Administrative Agent) may reasonably
require to document and consummate the transactions contemplated hereby and to
vest completely in and insure the Administrative Agent and the Lenders their
respective rights under this Agreement, the Notes, the Letters of Credit and the
other Loan Documents.
ARTICLE IX
FINANCIAL COVENANTS
Until all of the Obligations have been paid and satisfied in full and
the Commitments terminated, unless consent has been obtained in the manner set
forth in Section 13.10 hereof, the Borrowers and their Subsidiaries on a
Consolidated basis will not:
SECTION 9.1 Leverage Ratio. As of any fiscal quarter end, permit the
ratio of (a) Adjusted Debt on such date to (b) EBITDAR for the period of four
(4) consecutive fiscal quarters ending on or immediately prior to such date (the
"Leverage Ratio") to be greater than 3.75 to 1.0.
SECTION 9.2 Fixed Charge Coverage Ratio. As of the end of any fiscal
quarter, permit the Fixed Charge Coverage Ratio to be less than 2.00 to 1.0.
51
ARTICLE X
NEGATIVE COVENANTS
Until all of the Obligations have been paid and satisfied in full and
the Commitments terminated, unless consent has been obtained in the manner set
forth in Section 13.10, each of the Borrowers has not and will not and will not
permit any of its Subsidiaries to:
SECTION 10.1 Limitations on Debt. Create, incur, assume or suffer to
exist any Debt or Additional Debt except:
(a) the Obligations (excluding Hedging Obligations permitted pursuant
to Section 10.1(b));
(b) Debt incurred in connection with a Hedging Agreement which is
non-speculative and entered into in the ordinary course of a Borrower's
business.
(c) Debt existing on the Closing Date and not otherwise permitted under
this Section 10.1, as set forth on Schedule 6.1(t), and the renewal,
refinancing, extension and replacement thereof (but not the increase in the
aggregate principal amount, except that the maximum principal amount of the
Company's Receivables Purchase Facility may be increased by an amount equal to
the amount of any reduction in the principal amount of the Company's Series 1998
Revenue Bonds resulting from any payments or prepayments thereof made by the
Company following the date hereof);
(d) Debt of the Borrowers and their Subsidiaries incurred in connection
with Capitalized Leases in an aggregate amount not to exceed $85,000,000 on any
date of determination;
(e) purchase money Debt of the Borrowers and their Subsidiaries in an
aggregate amount not to exceed $50,000,000 on any date of determination;
(f) Guaranty Obligations in favor of the Administrative Agent for the
benefit of the Administrative Agent and the Lenders;
(g) Guaranty Obligations with respect to Debt permitted pursuant to
subsections (a) through (e) of this Section 10.1;
(h) Guaranty Obligations of the Company consisting of guarantees of
operating leases for store locations entered into by any other Borrower in the
ordinary course of its business;
(i) Debt with respect to trade letter of credit facilities in an
aggregate amount not to exceed $100,000,000 on any date of determination (which
amount shall include the amount set forth on Item 7 of Schedule 6.1(t));
(j) Guaranty Obligations with respect to Debt permitted pursuant to
subsection (i) of this Section 10.1; and
52
(k) Additional Debt in an aggregate amount not to exceed $75,000,000 on
any date of determination.
provided, that no agreement or instrument with respect to Debt permitted to be
incurred by this Section shall restrict, limit or otherwise encumber (by
covenant or otherwise) the ability of any Subsidiary of any Borrower to make any
payment to such Borrower or any of its Subsidiaries (in the form of dividends,
intercompany advances or otherwise) for the purpose of enabling such Borrower to
pay the Obligations.
SECTION 10.2 Limitations on Liens. Create, incur, assume or suffer to
exist, any Lien on or with respect to any of its assets or properties
(including, without limitation, shares of capital stock or other ownership
interests), real or personal, whether now owned or hereafter acquired, except:
(a) Liens for taxes, assessments and other governmental charges or
levies (excluding any Lien imposed pursuant to any of the provisions of ERISA or
Environmental Laws) not yet due or as to which the period of grace (not to
exceed thirty (30) days), if any, related thereto has not expired or which are
being contested in good faith and by appropriate proceedings and for which
adequate reserves are maintained to the extent required by GAAP;
(b) the claims of materialmen, contractors, mechanics, carriers,
warehousemen, processors or landlords for labor, materials, supplies or rentals
incurred in the ordinary course of business, (i) which are not overdue for a
period of more than thirty (30) days or (ii) which are being contested in good
faith and by appropriate proceedings;
(c) Liens consisting of deposits or pledges made in the ordinary course
of business in connection with, or to secure payment of, obligations under
workers' compensation, unemployment insurance or similar legislation;
(d) Liens constituting encumbrances in the nature of zoning
restrictions, easements and rights or restrictions of record on the use of real
property, which in the aggregate are not substantial in amount and which do not,
in any case, detract from the value of such property or impair the use thereof
in the ordinary conduct of business;
(e) Liens of the Administrative Agent for the benefit of the
Administrative Agent and the Lenders;
(f) Liens not otherwise permitted by this Section 10.2 and in existence
on the Closing Date and described on Schedule 10.2; and
(g) Liens securing Debt permitted under Sections 10.1(d) and (e);
provided that (i) such Liens shall be created substantially simultaneously with
the acquisition or lease of the related asset, (ii) such Liens do not at any
time encumber any property other than the property financed by such Debt, (iii)
the amount of Debt secured thereby is not increased and (iv) the principal
amount of Debt
53
secured by any such Lien shall at no time exceed one hundred percent (100%) of
the original purchase price or lease payment amount of such property at the time
it was acquired.
SECTION 10.3 Limitations on Loans, Advances, Investments and
Acquisitions. Purchase, own, invest in or otherwise acquire, directly or
indirectly, any capital stock, interests in any partnership or joint venture
(including, without limitation, the creation or capitalization of any
Subsidiary), evidence of Debt or other obligation or security, substantially all
or a portion of the business or assets of any other Person or any other
investment or interest whatsoever in any other Person, or make or permit to
exist, directly or indirectly, any loans, advances or extensions of credit to,
or any investment in cash or by delivery of property in, any Person except:
(a) investments in (i) Subsidiaries existing on the Closing Date, (ii)
in Subsidiaries formed or acquired after the Closing Date so long as the
Borrowers and their Subsidiaries comply with the applicable provisions of
Section 8.11 and the other terms and provisions of this Agreement and (iii) the
other loans, advances and investments described on Schedule 10.3 existing on the
Closing Date;
(b) investments in (i) marketable direct obligations issued or
unconditionally guaranteed by the United States of America or any agency or
instrumentality thereof or by the Federal Home Loan Mortgage Corporation,
Government National Mortgage Association, Federal Farm Credit Bank, Federal Home
Loan Mortgage Corp., Federal Housing Administration, Student Loan Marketing
Association or the Tennessee Valley Authority, maturing within ten (10) years
from the date of acquisition thereof, (ii) obligations of state and local
governments or agencies thereof (including variable rate demand notes and
auction rate securities), maturing or resetting within three (3) years from the
date of acquisition thereof, (iii) commercial paper maturing no more than two
hundred seventy (270) days from the date of creation thereof and currently
having a rating of "A-2" or better from Standard & Poor's Ratings Services, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. or a rating of "P2" or better from
▇▇▇▇▇'▇ Investors Service, Inc., (iv) certificates of deposit maturing no more
than one year from the date of creation thereof issued by commercial banks
incorporated under the laws of the United States of America, each having
combined capital, surplus and undivided profits of not less than $500,000,000
and having a rating of "A" or better by a nationally recognized rating agency;
provided, that the aggregate amount invested in such certificates of deposit
shall not at any time exceed $10,000,000 for any one such certificate of deposit
and $25,000,000 for any one such bank, (v) money market mutual funds, maturing
within one year from the date of acquisition thereof, provided that the asset
value of the issue shall exceed $1,000,000,000, (vi) corporate notes (including
variable rate demand notes, auction rate securities and Eurodollar notes) issued
by a corporation (except an Affiliate of Borrowers) organized under the laws of
any State of the United States of America or the District of Columbia and rated
at least A-2 by Standard & Poor's Ratings Services or at least A by ▇▇▇▇▇'▇
Investors Service, Inc., (vii) repurchase obligations with a term of not more
than thirty (30) days for underlying securities of the types described in clause
(i) above entered into with any financial institution having combined capital
and surplus and undivided profits of not less than $500,000,000, (viii)
repurchase agreements and reverse repurchase agreements relating to marketable
direct obligations issued or unconditionally guaranteed by the United States of
America or issued by any governmental agency thereof and backed by the full
faith and credit of the United States of
54
America, in each case maturing within one year or less from the date of
acquisition (provided that the terms of such agreements comply with the
guidelines set forth in the Federal Financial Agreements of Depository
Institutions with Securities Dealers and Others, as adopted by the Comptroller
of the Currency on October 31, 1985), (ix) time deposits maturing no more than
thirty (30) days from the date of creation thereof with commercial banks or
savings banks or savings and loan associations each having membership either in
the FDIC or the deposits of which are insured by the FDIC and in amounts not
exceeding the maximum amounts of insurance thereunder, and (x) investments in
money market funds and mutual funds which invest substantially all of their
assets in securities of the types described in clauses (i) through (ix) above.
(c) investments in the form of the acquisition of all or substantially
all of the business or a line of business (whether by the acquisition of capital
stock, assets or any combination thereof) of any other Person, if (i) no Default
or Event of Default then exists or would be created thereby, (ii) the Borrowers
have delivered to the Administrative Agent a certificate of a Responsible
Officer (on behalf of the Borrowers) demonstrating pro forma compliance with the
covenants contained in Article IX both before and after giving effect to such
acquisition, and (iii) the aggregate consideration (including cash and non-cash
consideration, whether in the form of earned-out payments or other deferred
payments) and any assumption of liabilities does not exceed (A) $75,000,000 for
any single acquisition or an aggregate of $250,000,000 for all acquisitions from
the date hereof through the Revolving Credit Termination Date so long as the
Leverage Ratio is less than 3.25 to 1.00 before and immediately after giving
effect to such acquisition or (B) $25,000,000 for any single acquisition or an
aggregate of $100,000,000 for all acquisitions from the date hereof through the
Revolving Credit Termination Date so long as the Leverage Ratio is greater than
or equal to 3.25 to 1.00 before or immediately after giving effect to such
acquisition, without the prior written consent of the Required Lenders;
(d) Hedging Agreements permitted pursuant to Section 10.1;
(e) purchases of assets in the ordinary course of business;
(f) investments consisting of extensions of credit in the nature of
accounts receivable or notes receivable arising from the grant of trade credit
in the ordinary course of business, and investments received in satisfaction or
partial satisfaction thereof from financially troubled account debtors to the
extent reasonably necessary to prevent loss; and
(g) other investments not exceeding $50,000,000 in the aggregate in any
Fiscal Year of the Borrowers.
SECTION 10.4 Limitations on Mergers and Liquidation. Merge, consolidate
or enter into any similar combination with any other Person or liquidate,
wind-up or dissolve itself (or suffer any liquidation or dissolution) except:
(a) any Subsidiary of any Borrower may merge with the Company, such
Borrower or any other Subsidiary of such Borrower; provided that in any merger
involving the Company or a Borrower, the Company or such Borrower shall be the
surviving entity;
55
(b) any Wholly-Owned Subsidiary of any Borrower may merge into the
Person such Wholly-Owned Subsidiary was formed to acquire in connection with an
acquisition permitted by Section 10.3(c); and
(c) any Wholly-Owned Subsidiary of any Borrower may wind-up into such
Borrower or any other Wholly-Owned Subsidiary of such Borrower.
SECTION 10.5 Limitations on Sale of Assets. Convey, sell, lease,
assign, transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, the sale of any receivables and leasehold
interests and any sale-leaseback or similar transaction), whether now owned or
hereafter acquired except:
(a) the sale of inventory in the ordinary course of business;
(b) the sale of obsolete assets no longer used or usable in the
business of any Borrower or any of its Subsidiaries;
(c) the transfer of assets to any Borrower or any Wholly-Owned
Subsidiary of any Borrower pursuant to Section 10.4(c);
(d) the sale or discount without recourse of accounts receivable
arising in the ordinary course of business in connection with the compromise or
collection thereof;
(e) the disposition of any Hedging Agreement;
(f) sale and leaseback transactions with respect to construction of new
store locations of the Borrowers in the ordinary course of the Borrowers'
business; and
(g) any other sale of any asset not otherwise permitted by this Section
10.5; provided that the aggregate amount of all sales permitted by this
paragraph (f) does not exceed five percent (5%) of such Borrower's Net Worth in
any Fiscal Year.
SECTION 10.6 Limitations on Dividends and Distributions. Declare or pay
any dividends upon any of its capital stock or any other ownership interests;
purchase, redeem, retire or otherwise acquire, directly or indirectly, any
shares of its capital stock or other ownership interests, or make any
distribution of cash, property or assets among the holders of shares of its
capital stock or other ownership interests, or make any change in its capital
structure; provided that:
(a) any Borrower or any Subsidiary may pay dividends in shares of its
own capital stock;
(b) any Subsidiary may pay cash dividends to a Borrower;
56
(c) any Borrower or any Subsidiary may pay any other dividends or
distributions not otherwise permitted by this Section 10.6; provided that the
aggregate of all dividends and distributions permitted by this paragraph (c)
during any Fiscal Year shall not exceed five percent (5%) of the Net Worth of
such Borrower or such Subsidiary for such Fiscal Year; and
(d) the Company may purchase, redeem, retire or otherwise acquire,
directly or indirectly shares of its capital stock in an amount not to exceed
(i) $75,000,000 in the aggregate during any consecutive twelve (12) month period
and (ii) $250,000,000 in the aggregate during the term of this Agreement
(provided that no Default or Event of Default shall have occurred and be
continuing both before and after giving effect to such purchase, redemption,
retirement or acquisition).
SECTION 10.7 Limitations on Exchange and Issuance of Capital Stock.
Issue, sell or otherwise dispose of any class or series of capital stock that,
by its terms or by the terms of any security into which it is convertible or
exchangeable, is, or upon the happening of an event or passage of time would be,
(a) convertible or exchangeable into Debt or (b) required to be redeemed or
repurchased, including at the option of the holder, in whole or in part, or has,
or upon the happening of an event or passage of time would have, a redemption or
similar payment due.
SECTION 10.8 Transactions with Affiliates. Except for transactions
permitted by 10.3, 10.6, 10.7, and loans and advances not exceeding $10,000,000
in the aggregate at any one time outstanding to officers and employees of
Borrowers for the purchase of a residence in connection with the relocation of
such officers and employees and those transactions existing on the Closing Date
and identified on Schedule 10.8 directly or indirectly (a) make any loan or
advance to, or purchase or assume any note or other obligation to or from, any
of its officers, directors, shareholders or other Affiliates, or to or from any
member of the immediate family of any of its officers, directors, shareholders
or other Affiliates, or subcontract any operations to any of its Affiliates or
(b) enter into, or be a party to, any other transaction not described in clause
(a) above with any of its Affiliates, except pursuant to the reasonable
requirements of its business and upon fair and reasonable terms that are fully
disclosed to and approved in writing by the Required Lenders prior to the
consummation thereof and are no less favorable to it than it would obtain in a
comparable arm's length transaction with a Person not its Affiliate.
SECTION 10.9 Certain Accounting Changes; Organizational Documents.. (a)
Change their Fiscal Year end, or make any change in their accounting treatment
and reporting practices except as required or permitted by GAAP or (b) amend,
modify or change its articles of incorporation (or corporate charter or other
similar organizational documents) or amend, modify or change its bylaws (or
other similar documents) in any manner adverse in any respect to the rights or
interests of the Lenders.
SECTION 10.10 Amendments; Payments and Prepayments of Subordinated
Debt. Amend or modify (or permit the modification or amendment of) any of the
terms or provisions of any Subordinated Debt, or cancel or forgive, make any
voluntary or optional payment or prepayment on, or redeem or acquire for value
(including without limitation by way of depositing with any trustee with respect
thereto money or securities before due for the purpose of paying when due) any
Subordinated Debt.
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SECTION 10.11 Restrictive Agreements.
(a) Enter into any Debt which contains any negative pledge on assets or
any covenants more restrictive than the provisions of Articles VIII, IX and X
hereof, or which restricts, limits or otherwise encumbers its ability to incur
Liens on or with respect to any of its assets or properties other than the
assets or properties securing such Debt.
(b) Enter into or permit to exist any agreement which impairs or limits
the ability of any Subsidiary of a Borrower to pay dividends to such Borrower.
SECTION 10.12 Nature of Business. Substantively alter the character or
conduct of the business conducted by any Borrower and its Subsidiaries as of the
Closing Date.
ARTICLE XI
DEFAULT AND REMEDIES
SECTION 11.1 Events of Default. Each of the following shall constitute
an Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment or order of any court or any order, rule or regulation of any
Governmental Authority or otherwise:
(a) Default in Payment of Principal of Loans and Reimbursement
Obligations. The Borrowers shall default in any payment of principal of any
Loan, Note or Reimbursement Obligation when and as due (whether at maturity, by
reason of acceleration or otherwise).
(b) Other Payment Default. The Borrowers shall default in the payment
when and as due (whether at maturity, by reason of acceleration or otherwise) of
interest on any Loan, Note or Reimbursement Obligation or the payment of any
other Obligation.
(c) Misrepresentation. Any representation or warranty made or deemed to
be made by the Borrowers or any of their Subsidiaries under this Agreement, any
other Loan Document or any amendment hereto or thereto, shall at any time prove
to have been incorrect or misleading in any material respect when made or deemed
made.
(d) Default in Performance of Certain Covenants. The Borrowers shall
default in the performance or observance of any covenant or agreement contained
in Sections 7.1, 7.2 or 7.5(e)(i) or Articles IX or X of this Agreement.
(e) Default in Performance of Other Covenants and Conditions. The
Borrowers or any of their Subsidiaries shall default in the performance or
observance of any term, covenant, condition or agreement contained in this
Agreement (other than as specifically provided for otherwise in this Section
11.1) or any other Loan Document (other than as specifically provided for
otherwise in this
58
Section 11.1) and such default shall continue for a period of thirty (30) days
after written notice thereof has been given to the Company by the Administrative
Agent.
(f) Hedging Agreement. The Borrowers shall default in the performance
or observance of any terms, covenant, condition or agreement (after giving
effect to any applicable grace or cure period) under any Hedging Agreement
representing an aggregate liability to the Borrowers in excess of $1,000,000 and
such default causes the termination of such Hedging Agreement or permits any
counterparty to such Hedging Agreement to terminate any such Hedging Agreement.
(g) Debt Cross-Default. The Borrowers or any of their Subsidiaries
shall (i) default in the payment of any Debt (other than the Notes or any
Reimbursement Obligation) the aggregate outstanding amount of which Debt is in
excess of $10,000,000 beyond the period of grace if any, provided in the
instrument or agreement under which such Debt was created, or (ii) default in
the observance or performance of any other agreement or condition relating to
any Debt (other than the Notes or any Reimbursement Obligation) the aggregate
outstanding amount of which Debt is in excess of $10,000,000 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 Debt (or a
trustee or agent on behalf of such holder or holders) to cause, with the giving
of notice if required, any such Debt to become due prior to its stated maturity
(any applicable grace period having expired).
(h) Other Cross-Defaults. The occurrence of any default or event of
default under any of the Existing Letter of Credit Documents.
(i) Change in Control. Any person or group of persons (within the
meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended)
other than ▇▇▇▇ ▇▇▇▇ and/or members of the Belk family (and any trusts of which
he and/or any of such family members are beneficiaries and any other Persons of
which he or any of such family members is the beneficial equityholder) shall
obtain ownership or control in one or more series of transactions of more than
fifty-one percent (51%) of the common stock or fifty-one percent (51%) of the
voting power of the Company entitled to vote in the election of members of the
board of directors of the Company or there shall have occurred under any
indenture or other instrument evidencing any Debt in excess of $1,000,000 any
"change in control" (as defined in such indenture or other evidence of Debt)
obligating any Borrower to repurchase, redeem or repay all or any part of the
Debt or capital stock provided for therein (any such event, a "Change in
Control").
(j) Voluntary Bankruptcy Proceeding. Any Borrower or any Subsidiary
thereof shall (i) commence a voluntary case under the federal bankruptcy laws
(as now or hereafter in effect), (ii) file a petition seeking to take advantage
of any other laws, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, winding up or composition for adjustment of debts, (iii) consent
to or fail to contest in a timely and appropriate manner any petition filed
against it in an involuntary case under such bankruptcy laws or other laws, (iv)
apply for or consent to, or fail to contest in a timely and appropriate manner,
the appointment of, or the taking of possession by, a receiver, custodian,
trustee, or liquidator of itself or of a substantial part of its property,
domestic or foreign, (v) admit in writing its inability to pay its debts as they
become due, (vi) make a general
59
assignment for the benefit of creditors, or (vii) take any corporate action for
the purpose of authorizing any of the foregoing.
(k) Involuntary Bankruptcy Proceeding. A case or other proceeding shall
be commenced against any Borrower or any Subsidiary thereof in any court of
competent jurisdiction seeking (i) relief under the federal bankruptcy laws (as
now or hereafter in effect) or under any other laws, domestic or foreign,
relating to bankruptcy, insolvency, reorganization, winding up or adjustment of
debts, or (ii) the appointment of a trustee, receiver, custodian, liquidator or
the like for any Borrower or any Subsidiary thereof or for all or any
substantial part of their respective assets, domestic or foreign, and such case
or proceeding shall continue without dismissal or stay for a period of ninety
(90) consecutive days, or an order granting the relief requested in such case or
proceeding (including, but not limited to, an order for relief under such
federal bankruptcy laws) shall be entered.
(l) Failure of Agreements. Any provision of this Agreement or any
provision of any other Loan Document shall for any reason cease to be valid and
binding on any Borrower or Subsidiary party thereto or any such Person shall so
state in writing, other than in accordance with the express terms hereof or
thereof.
(m) Termination Event. The occurrence of any of the following events:
(i) any Borrower or any ERISA Affiliate fails to make full payment when due of
all amounts which, under the provisions of any Pension Plan or Section 412 of
the Code, any Borrower or any ERISA Affiliate is required to pay as
contributions thereto, (ii) an accumulated funding deficiency in excess of
$2,000,000 occurs or exists, whether or not waived, with respect to any Pension
Plan, (iii) a Termination Event or (iv) any Borrower or any ERISA Affiliate as
employers under one or more Multiemployer Plans makes a complete or partial
withdrawal from any such Multiemployer Plan and the plan sponsor of such
Multiemployer Plans notifies such withdrawing employer that such employer has
incurred a withdrawal liability requiring payments in an amount exceeding
$2,000,000.
(n) Judgment. A judgment or order for the payment of money which causes
the aggregate amount of all such judgments to exceed $10,000,000 in any Fiscal
Year shall be entered against any Borrower or any of its Subsidiaries by any
court and such judgment or order shall continue without discharge or stay for a
period of thirty (30) days.
(o) Environmental. Any one or more Environmental Claims shall have been
asserted against any Borrower or any of its Subsidiaries; the Borrower or
Subsidiary would be reasonable likely to incur liability as a result thereof;
and such liability would be reasonably likely, individually or in the aggregate,
to have a Material Adverse Effect.
SECTION 11.2 Remedies. Upon the occurrence of an Event of Default, with
the consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, by notice to
the Company:
(a) Acceleration; Termination of Facilities. Declare the principal of
and interest on the Loans, the Notes and the Reimbursement Obligations at the
time outstanding, and all other amounts
60
owed to the Lenders and to the Administrative Agent under this Agreement or any
of the other Loan Documents (including, without limitation, all L/C Obligations,
whether or not the beneficiaries of the then outstanding Letters of Credit shall
have presented or shall be entitled to present the documents required
thereunder) and all other Obligations (other than Hedging Obligations), to be
forthwith due and payable, whereupon the same shall immediately become due and
payable without presentment, demand, protest or other notice of any kind, all of
which are expressly waived, anything in this Agreement or the other Loan
Documents to the contrary notwithstanding, and terminate the Credit Facility and
any right of the Borrowers to request borrowings or Letters of Credit
thereunder; provided, that upon the occurrence of an Event of Default specified
in Section 11.1(j) or (k), the Credit Facility shall be automatically terminated
and all Obligations (other than Hedging Obligations) shall automatically become
due and payable without presentment, demand, protest or other notice of any
kind, all of which are expressly waived, anything in this Agreement or in any
other Loan Document to the contrary notwithstanding.
(b) Letters of Credit. With respect to all Letters of Credit with
respect to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to Section 11.2(a), the Borrowers shall at such time
deposit in the Cash Collateral Account an amount equal to the aggregate then
undrawn and unexpired amount of such Letters of Credit. Amounts held in the Cash
Collateral Account shall be applied by the Administrative Agent to the payment
of drafts drawn under the Letters of Credit and the unused portion thereof after
all such Letters of Credit shall have expired or shall have been fully drawn
upon, if any, shall be applied to repay the other Obligations on a pro rata
basis. After all such Letters of Credit shall expire or shall have been fully
drawn upon, the Reimbursement Obligation shall have been satisfied with respect
to all Letters of Credit and all other Obligations shall have been paid in full,
the balance, if any, in the Cash Collateral Account shall be returned to the
Company.
(c) Rights of Collection. Exercise on behalf of the Lenders all of its
other rights and remedies under this Agreement, the other Loan Documents and
Applicable Law, in order to satisfy all of the Borrowers' Obligations.
SECTION 11.3 Rights and Remedies Cumulative; Non-Waiver; etc. The
enumeration of the rights and remedies of the Administrative Agent and the
Lenders set forth in this Agreement is not intended to be exhaustive and the
exercise by the Administrative Agent and the Lenders of any right or remedy
shall not preclude the exercise of any other rights or remedies, all of which
shall be cumulative, and shall be in addition to any other right or remedy given
hereunder or under the other Loan Documents or that may now or hereafter exist
at law or in equity or by suit or otherwise. No delay or failure to take action
on the part of the Administrative Agent or any Lender in exercising any right,
power or privilege shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or privilege preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
or shall be construed to be a waiver of any Event of Default. No course of
dealing between any Borrower, the Administrative Agent and the Lenders or their
respective agents or employees shall be effective to change, modify or discharge
any provision of this Agreement or any of the other Loan Documents or to
constitute a waiver of any Event of Default.
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ARTICLE XII
THE ADMINISTRATIVE AGENT
SECTION 12.1 Appointment. Each of the Lenders hereby irrevocably
designates and appoints Wachovia as Administrative Agent of such Lender under
this Agreement and the other Loan Documents for the term hereof and each such
Lender irrevocably authorizes Wachovia as Administrative Agent for such Lender,
to take such action on its behalf under the provisions of this Agreement and the
other Loan Documents and to exercise such powers and perform such duties as are
expressly delegated to the Administrative Agent by the terms of this Agreement
and such other Loan Documents, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere in
this Agreement or such other Loan Documents, the Administrative Agent shall not
have any duties or responsibilities, except those expressly set forth herein and
therein, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or the other Loan Documents or otherwise exist
against the Administrative Agent. Any reference to the Administrative Agent in
this Article XII shall be deemed to refer to the Administrative Agent solely in
its capacity as Administrative Agent and not in its capacity as a Lender.
SECTION 12.2 Delegation of Duties. The Administrative Agent may execute
any of its respective duties under this Agreement and the other Loan Documents
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 the Administrative Agent with reasonable care.
SECTION 12.3 Exculpatory Provisions. Neither the Administrative Agent
nor any of its officers, directors, employees, agents, attorneys-in-fact,
Subsidiaries 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 or the other Loan Documents (except for actions occasioned solely by
its or such Person's own gross negligence or willful misconduct), or (b)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by any Borrower or any of its Subsidiaries or
any officer thereof contained in this Agreement or the other Loan Documents 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 the other Loan Documents or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
the other Loan Documents or for any failure of any Borrower or any of its
Subsidiaries 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 of any of the
agreements contained in, or conditions of, this Agreement, or to inspect the
properties, books or records of the Borrowers or any of their Subsidiaries.
SECTION 12.4 Reliance by the 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 to be genuine and correct and to
62
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
Borrowers), 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 such Note shall have been
transferred in accordance with Section 13.9. The Administrative Agent shall be
fully justified in failing or refusing to take any action under this Agreement
and the other Loan Documents unless it shall first receive such advice or
concurrence of the Required Lenders (or, when expressly required hereby or by
the relevant other Loan Documents, all the 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 except for its own gross negligence or
willful misconduct. The Administrative Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
Notes in accordance with a request of the Required Lenders (or, when expressly
required hereby, all the Lenders), 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 12.5 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 unless it has received notice from a Lender or any 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, it shall promptly give 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 (or,
when expressly required hereby, all the Lenders); provided 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
other provisions of this Agreement expressly require that any such action be
taken or not be taken only with the consent and authorization or the request of
the Lenders or Required Lenders, as applicable.
SECTION 12.6 Non-Reliance on the Administrative Agent and Other
Lenders. Each Lender expressly acknowledges that neither the Administrative
Agent nor any of its respective officers, directors, employees, agents,
attorneys-in-fact, Subsidiaries or Affiliates has made any representations or
warranties to it and that no act by the Administrative Agent hereafter taken,
including any review of the affairs of the Borrowers or any of their
Subsidiaries, 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 Borrowers and their Subsidiaries and made
its own decision to make its Loans and issue or participate in Letters of Credit
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 the other
Loan Documents, and to make such investigation as it deems necessary to inform
itself as to the business,
63
operations, property, financial and other condition and creditworthiness of the
Borrowers and their Subsidiaries. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder or by the other Loan Documents, 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, financial and other condition or creditworthiness of the Borrowers or
any of their Subsidiaries which may come into the possession of the
Administrative Agent or any of its respective officers, directors, employees,
agents, attorneys-in-fact, Subsidiaries or Affiliates.
SECTION 12.7 Indemnification. The Lenders agree to indemnify the
Administrative Agent in its capacity as such and (to the extent not reimbursed
by the Borrowers and without limiting the obligation of the Borrowers to do so),
ratably according to the respective amounts of their Revolving Commitment
Percentages 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 or any Reimbursement Obligation) be
imposed on, incurred by or asserted against the Administrative Agent in its
capacity as such in any way relating to or arising out of this Agreement or the
other Loan Documents, or any documents, reports or other information provided to
the Administrative Agent or any Lender or 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 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 resulting solely from the
Administrative Agent's bad faith, gross negligence or willful misconduct. The
agreements in this Section 12.7 shall survive the payment of the Notes, any
Reimbursement Obligation and all other amounts payable hereunder and the
termination of this Agreement.
SECTION 12.8 The Administrative Agent in Its Individual Capacity. The
Administrative Agent and its respective Subsidiaries and Affiliates may make
loans to, accept deposits from and generally engage in any kind of business with
the Borrowers as though the Administrative Agent were not the Administrative
Agent hereunder. With respect to any Loans made or renewed by it and any Note
issued to it and with respect to any Letter of Credit issued by it or
participated in by it, the Administrative Agent shall have the same rights and
powers under this Agreement and the other Loan Documents 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 12.9 Resignation of the Administrative Agent; Successor
Administrative Agent. Subject to the appointment and acceptance of a successor
as provided below, the Administrative Agent may resign at any time by giving
notice thereof to the Lenders and the Company. Upon any such resignation, the
Required Lenders shall have the right to appoint a successor Administrative
Agent, which successor shall have minimum capital and surplus of at least
$500,000,000. If no successor Administrative Agent shall have been so appointed
by the Required Lenders and shall have accepted such appointment within thirty
(30) days after the Administrative Agent's giving of notice of resignation, then
the Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which successor shall have minimum capital
64
and surplus of at least $500,000,000. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to and become vested with
all rights, powers, privileges and duties of the retiring Administrative Agent,
and the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder. After any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the provisions of this Section 12.9 shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as Administrative Agent. Notwithstanding
anything to the contrary contained herein, if at any time Bank of America, N.A.
assigns all of its Revolving Credit Commitment and Loans pursuant to Section
13.9, Bank of America, N.A. may, (i) upon 30 days' notice to the Company and the
Administrative Agent, resign as Issuing Lender. In the event of any such
resignation as Issuing Lender, the Borrower shall be entitled to appoint from
among the Lenders a successor Issuing Lender hereunder acceptable to the
Administrative Agent; provided, however, that no failure by the Borrower to
appoint any such successor shall affect the resignation of Bank of America, N.A.
as Issuing Lender. If Bank of America, N.A. resigns as Issuing Lender, it shall
retain all the rights and obligations of the Issuing Lender hereunder with
respect to all Letters of Credit outstanding as of the effective date of its
resignation as Issuing Lender and all Obligations with respect thereto
(including the right to require the Lenders to fund risk participations).
SECTION 12.10 Other Agents. None of the Lenders identified on the facing page,
in the introductory paragraph or on the signature pages to this Agreement as a
Syndication Agent or Documentation Agent shall have any right, power,
obligation, liability, responsibility or duty under this Agreement other than
those applicable to all Lenders as such. Without limiting the foregoing, none of
the Lenders so identified shall have or be deemed to have any fiduciary
relationship with any Lender. Each Lender acknowledges that it has not relied,
and will not rely, on any of the Lenders so identified in deciding to enter into
this Agreement or in taking or not taking action hereunder.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1 Notices.
(a) Method of Communication. Except as otherwise provided in this
Agreement, all notices and communications hereunder shall be in writing (for
purposes hereof, the term "writing" shall include information in electronic
format such as electronic mail and internet web pages), or by telephone
subsequently confirmed in writing. Any notice shall be effective if: (i)
delivered by hand delivery (ii) sent via electronic mail, provided that the
party sending such electronic mail does not receive notice that such electronic
mail has failed to reach the Person or Persons to whom such notice is to be
given, (iii) posting on an internet web page accessible by the Person or Persons
to whom the notice is to be given, immediately following notice of such posting
by electronic mail, (iv) telecopy, (v) recognized overnight courier service or
(vi) certified mail, return receipt requested, and shall be presumed to be
received by a party hereto (a) on the date of delivery if delivered by hand or
sent by electronic mail as provided in (ii) above, posting on an internet web
page as
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provided in (iii) above, telecopy, (b) on the next Business Day if sent by
recognized overnight courier service and (c) on the third Business Day following
the date sent by certified mail, return receipt requested. A telephonic notice
to the Administrative Agent as understood by the Administrative Agent will be
deemed to be the controlling and proper notice in the event of a discrepancy
with or failure to receive a confirming written notice.
(b) Addresses for Notices. Notices to any party shall be sent to it at
the following addresses, or any other address as to which all the other parties
are notified in writing.
If to the Borrowers: ▇▇▇▇, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Chief Financial Officer
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to: ▇▇▇▇ Stores Services, Inc.
Legal Department
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: General Counsel
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Wachovia as Wachovia Bank, National Association
Administrative Agent: Charlotte Plaza, CP-8
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Syndication Agency Services
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to: Wachovia Bank, National Association
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P.
Bank of America Corporate Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
66
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to any Lender: To the address set forth in the Register.
(c) Administrative Agent's Office. The Administrative Agent hereby
designates its office located at the address set forth above, or any subsequent
office which shall have been specified for such purpose by written notice to the
Company and Lenders, as the Administrative Agent's Office referred to herein, to
which payments due are to be made and at which Loans will be disbursed and
Letters of Credit issued.
SECTION 13.2 Expenses; Indemnity. The Borrowers will (a) pay all
reasonable out-of-pocket expenses (including, without limitation, all costs of
electronic or internet distribution of any information hereunder) of the
Administrative Agent in connection with (i) the preparation, execution and
delivery of this Agreement and each other Loan Document, whenever the same shall
be executed and delivered, including without limitation all out-of-pocket
syndication and due diligence expenses and reasonable fees and disbursements of
counsel for the Administrative Agent and (ii) the preparation, execution and
delivery of any waiver, amendment or consent by the Administrative Agent or the
Lenders relating to this Agreement or any other Loan Document, including without
limitation reasonable fees and disbursements of counsel for the Administrative
Agent, (b) pay all reasonable out-of-pocket expenses of the Administrative Agent
and each Lender actually incurred in connection with the administration and
enforcement of any rights and remedies of the Administrative Agent and Lenders
under the Credit Facility, including, without limitation, in connection with any
workout, restructuring, bankruptcy or other similar proceeding, enforcing any
Obligations of, or collecting any payments due from, any Borrower or by reason
of an Event of Default; consulting with appraisers, accountants, engineers,
attorneys and other Persons concerning the nature, scope or value of any right
or remedy of the Administrative Agent or any Lender hereunder or under any other
Loan Document or any factual matters in connection therewith, which expenses
shall include without limitation the reasonable fees and disbursements of such
Persons, and (c) defend, indemnify and hold harmless the Administrative Agent
and the Lenders, and their respective parents, Subsidiaries, Affiliates,
employees, agents, officers and directors, from and against any losses,
penalties, fines, liabilities, settlements, damages, costs and expenses,
suffered by any such Person in connection with any claim (including, without
limitation, any Environmental Claims), investigation, litigation or other
proceeding (whether or not the Administrative Agent or any Lender is a party
thereto, and whether or not any such claim, investigation, litigation or other
proceeding is brought or otherwise instituted by any Borrower or any third
party) and the prosecution and defense thereof, arising out of or in any way
connected with the Loans, this Agreement, any other Loan Document or any
documents, reports or other information provided to the Administrative Agent or
any Lender or contemplated by or referred herein or therein or the transactions
contemplated hereby or thereby, including, without limitation, reasonable
attorney's and consultant's fees, except to the extent that any of the foregoing
directly result from the gross negligence or willful misconduct of the party
seeking indemnification therefor.
SECTION 13.3 Set-off. In addition to any rights now or hereafter
granted under Applicable Law and not by way of limitation of any such rights,
upon and after the occurrence of
67
any Event of Default and during the continuance thereof, the Lenders and any
assignee or participant of a Lender in accordance with Section 13.9 are hereby
authorized by the Borrowers at any time or from time to time, without notice to
the Borrowers or to any other Person, any such notice being hereby expressly
waived, to set off and to appropriate and to apply any and all deposits (general
or special, time or demand, including, but not limited to, indebtedness
evidenced by certificates of deposit, whether matured or unmatured) and any
other indebtedness at any time held or owing by the Lenders, or any such
assignee or participant to or for the credit or the account of any Borrower
against and on account of the Obligations irrespective of whether or not (a) the
Lenders shall have made any demand under this Agreement or any of the other Loan
Documents or (b) the Administrative Agent shall have declared any or all of the
Obligations to be due and payable as permitted by Section 11.2 and although such
Obligations shall be contingent or unmatured. Notwithstanding the preceding
sentence, each Lender agrees to notify the Company and the Administrative Agent
after any such set-off and application, provided that the failure to give such
notice shall not affect the validity of such set-off and application.
SECTION 13.4 Governing Law. This Agreement, the Notes and the other
Loan Documents, unless otherwise expressly set forth therein, shall be governed
by, construed and enforced in accordance with the laws of the State of North
Carolina, without reference to the conflicts or choice of law principles
thereof.
SECTION 13.5 Jurisdiction and Venue.
(a) Jurisdiction. The Borrowers hereby irrevocably consent to the
personal jurisdiction of the state and federal courts located in Mecklenburg
County, North Carolina (and any courts from which an appeal from any of such
courts must or may be taken), in any action, claim or other proceeding arising
out of any dispute in connection with this Agreement, the Notes and the other
Loan Documents, any rights or obligations hereunder or thereunder, or the
performance of such rights and obligations. The Borrowers hereby irrevocably
consent to the service of a summons and complaint and other process in any
action, claim or proceeding brought by the Administrative Agent or any Lender in
connection with this Agreement, the Notes or the other Loan Documents, any
rights or obligations hereunder or thereunder, or the performance of such rights
and obligations, on behalf of itself or its property, in the manner specified in
Section 13.1. Nothing in this Section 13.5 shall affect the right of the
Administrative Agent or any Lender to serve legal process in any other manner
permitted by Applicable Law or affect the right of the Administrative Agent or
any Lender to bring any action or proceeding against any Borrower or its
properties in the courts of any other jurisdictions.
(b) Venue. The Borrowers hereby irrevocably waive any objection they
may have now or in the future to the laying of venue in the aforesaid
jurisdiction in any action, claim or other proceeding arising out of or in
connection with this Agreement, any other Loan Document or the rights and
obligations of the parties hereunder or thereunder. The Borrowers irrevocably
waive, in connection with such action, claim or proceeding, any plea or claim
that the action, claim or other proceeding has been brought in an inconvenient
forum.
SECTION 13.6 Reversal of Payments. To the extent any Borrower makes a
payment or payments to the Administrative Agent for the ratable benefit of the
Lenders or the
68
Administrative Agent receives any payment or proceeds of the collateral which
payments or proceeds or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside and/or required to be repaid to 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 payment or
proceeds repaid, the Obligations or part thereof intended to be satisfied shall
be revived and continued in full force and effect as if such payment or proceeds
had not been received by the Administrative Agent.
SECTION 13.7 Injunctive Relief; Punitive Damages.
(a) The Borrowers recognize that, in the event a Borrower fails to
perform, observe or discharge any of its obligations or liabilities under this
Agreement, any remedy of law may prove to be inadequate relief to the Lenders.
Therefore, the Borrowers agree that the Lenders, at the Lenders' option, shall
be entitled to temporary and permanent injunctive relief in any such case
without the necessity of proving actual damages.
(b) The Administrative Agent, the Lenders and the Company (on behalf of
itself and its Subsidiaries) hereby agree that no such Person shall have a
remedy of punitive or exemplary damages against any other party to a Loan
Document and each such Person hereby waives any right or claim to punitive or
exemplary damages that they may now have or may arise in the future in
connection with any dispute, whether such dispute is resolved through
arbitration or judicially.
SECTION 13.8 Accounting Matters. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time, provided that, if the
Borrowers notify the Administrative Agent that the Borrowers request an
amendment to any provision hereof to eliminate the effect of any change
occurring after the date hereof in GAAP or in the application thereof on the
operation of such provision (or if the Administrative Agent notifies the Company
that the Required Lenders request an amendment to any provision hereof for such
purpose), regardless of whether any such notice is given before or after such
change in GAAP or in the application thereof, then such provision shall be
interpreted on the basis of GAAP as in effect and applied immediately before
such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance therewith.
SECTION 13.9 Successors and Assigns; Participations.
(a) Benefit of Agreement. This Agreement shall be binding upon and
inure to the benefit of the Borrowers, the Administrative Agent and the Lenders,
all future holders of the Notes, and their respective successors and assigns,
except that the Borrowers shall not assign or transfer any of their rights or
obligations under this Agreement without the prior written consent of each
Lender.
(b) Assignment by Lenders. Each Lender may, in the ordinary course of
its business and in accordance with Applicable Law, sell or assign to any Lender
or any Affiliate of a Lender and with the consent of the Company (so long as no
Default or Event of Default has occurred and is continuing) and the consent of
the Administrative Agent, which consents shall not be unreasonably
69
withheld or delayed, assign to one or more other Eligible Assignees all or a
portion of its interests, rights and obligations under this Agreement and the
other Loan Documents (including, without limitation, all or a portion of the
Extensions of Credit at the time owing to it and the Notes held by it or
participating interest in the Existing Letter of Credit); provided that:
(i) each such assignment shall be of a constant, and not a
varying, percentage of all the assigning Lender's rights and obligations under
this Agreement;
(ii) if less than all of the assigning Lender's Revolving
Credit Commitment is to be assigned, the Commitment so assigned shall not be
less than $5,000,000;
(iii) the assignee shall have delivered to the Administrative
Agent all United States Internal Revenue Service Forms required pursuant to
Section 4.11(e) and all of the parties to each such assignment shall execute and
deliver to the Administrative Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance substantially in the form of Exhibit G
attached hereto (an "Assignment and Acceptance"), together with any Note or
Notes subject to such assignment;
(iiv) where consent of the Borrower to an assignment to a
assignee is required hereunder, the Borrower shall be deemed to have given its
consent five (5) Business Days after the date written notice thereof has been
delivered by the assigning Lender (through the Administrative Agent) unless such
consent is expressly refused by the Borrower prior to such fifth (5th) Business
Day;
(v) such assignment shall not, without the consent of the
Company, require any Borrower to file a registration statement with the
Securities and Exchange Commission or apply to or qualify the Loans or the Notes
under the blue sky laws of any state; and
(vi) the assigning Lender shall pay to the Administrative
Agent an assignment fee of $3,500 upon the execution by such Lender of the
Assignment and Acceptance; provided that no such fee shall be payable upon any
assignment by a Lender to an Affiliate thereof.
Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, which effective date
shall be at least five (5) Business Days after the execution thereof (unless
otherwise agreed to by the Administrative Agent), (A) the assignee thereunder
shall be a party hereto and, to the extent provided in such Assignment and
Acceptance, have the rights and obligations of a Lender hereby and (B) the
Lender thereunder shall, to the extent provided in such assignment, be released
from its obligations under this Agreement.
(c) Rights and Duties Upon Assignment. By executing and delivering an
Assignment and Acceptance, the assigning Lender thereunder and the assignee
thereunder confirm to and agree with each other and the other parties hereto as
set forth in such Assignment and Acceptance.
(d) Register. The Administrative Agent shall maintain a copy of each
Assignment and Acceptance delivered to it and a register for the recordation of
the name and address of each Lender, the amount of the Revolving Credit
Commitment with respect to each Lender from time to time and
70
the amount of Extensions of Credit with respect to each Lender from time to time
(the "Register"). The entries in the Register shall be conclusive, in the
absence of manifest error, and the Borrowers, the Administrative Agent and the
Lenders may treat each person whose name is recorded in the Register as a Lender
hereunder for all purposes of this Agreement. The Register shall be available
for inspection by the Company or any Lender at any reasonable time and from time
to time upon reasonable prior notice.
(e) Issuance of New Notes. Upon its receipt of an Assignment and
Acceptance executed by an assigning Lender and an Eligible Assignee together
with any Note or Notes (if applicable) subject to such assignment and (if
applicable) the written consent to such assignment, the Administrative Agent
shall, if such Assignment and Acceptance has been completed and is substantially
in the form of Exhibit G:
(i) accept such Assignment and Acceptance;
(ii) record the information contained therein in the Register;
(iii) give prompt notice thereof to the Lenders and the Company; and
(iv) promptly deliver a copy of such Assignment and Acceptance to the
Company.
Within five (5) Business Days after receipt of notice, the Borrowers shall
execute and deliver to the Administrative Agent, in exchange for the surrendered
Note or Notes, a new Note or Notes to the order of such Eligible Assignee (to
the extent requested thereby) in amounts equal to the Commitment assumed by it
pursuant to such Assignment and Acceptance and a new Note or Notes to the order
of the assigning Lender (to the extent requested thereby) in an amount equal to
the Commitment retained by it hereunder. Such new Note or Notes shall be in an
aggregate principal amount equal to the aggregate principal amount of such
surrendered Note or Notes, shall be dated the effective date of such Assignment
and Acceptance and shall otherwise be in substantially the form of the assigned
Notes delivered to the assigning Lender. Each surrendered Note or Notes shall be
canceled and returned to the Company.
(f) Participations. Each Lender may, without notice to and without the
consent of the Borrower (except that the Borrower's consent may be required in
accordance with the last paragraph of this clause (f)) or the Administrative
Agent, in the ordinary course of its commercial banking business and in
accordance with Applicable Law, sell participations to one or more banks or
other entities in all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Extensions of
Credit and the Notes held by it); provided that:
(i) each such participation shall be in an amount not less
than $5,000,000;
(ii) such Lender's obligations under this Agreement
(including, without limitation, its Commitment) shall remain unchanged;
71
(iii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations;
(iv) such Lender shall remain the holder of the Notes held by
it for all purposes of this Agreement;
(v) the Borrowers, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement;
(vi) such Lender shall not permit such participant the right
to approve any waivers, amendments or other modifications to this Agreement or
any other Loan Document other than waivers, amendments or modifications which
would reduce the principal of or the interest rate on any Loan or Reimbursement
Obligation, extend the term or increase the amount of the Commitment, reduce the
amount of any fees to which such participant is entitled or extend any scheduled
payment date for principal of any Loan; and
(vii) any such disposition shall not, without the consent of
the Company, require any Borrower to file a registration statement with the
Securities and Exchange Commission to apply to qualify the Loans or the Notes
under the blue sky law of any state.
The Borrower agrees that each participant shall be entitled to the
benefits of Section 4.7, Section 4.8, Section 4.9, Section 4.10, Section 4.11
and Section 13.2 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to paragraph (b) of this Section 13.9; provided
that a participant shall not be entitled to receive any greater payment under
Section 4.7, Section 4.8, Section 4.9, Section 4.10, and Section 4.11 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such participant, unless the sale of the participation to
such participant is made with the Borrower's prior written consent and such
participant shall have delivered to the Administrative Agent all United States
Internal Revenue Service Forms required pursuant to Section 4.11(e).
(g) Disclosure of Information; Confidentiality. The Administrative
Agent and the Lenders shall hold all non-public information with respect to the
Borrowers obtained pursuant to the Loan Documents (or any Hedging Agreement with
a Lender or the Administrative Agent) in accordance with their customary
procedures for handling confidential information; provided, that the
Administrative Agent and each of the institutions identified on the cover page
hereof as "Co-Lead Arrangers" may disclose information relating to this
Agreement to Gold Sheets and other similar bank trade publications, such
information to consist of deal terms and other information customarily found in
such publications and provided further, that the Administrative Agent or any
Lender may disclose any such information to the extent such disclosure is (i)
required by law or requested or required pursuant to any legal process, (ii)
requested by, or required to be disclosed to, any rating agency, or regulatory
or similar authority (including, without limitation, the National Association of
Insurance Commissioners), (iii) used in any suit, action or proceeding for the
purpose of defending itself, reducing its liability or protecting any of its
claims, rights, remedies or interests under or in connection with the Loan
Documents (or any Hedging Agreement with a
72
Lender or the Administrative Agent) or (iv) otherwise consented to by the
Company. The Administrative Agent or any Lender may, in connection with any
sale, proposed sale, assignment, proposed assignment, participation or proposed
participation pursuant to Section 2.8 or this Section 13.9, disclose to the
assignee, participant, proposed assignee, proposed participant or to any direct
or indirect contractual counterparty in swap agreements or such contractual
counterparty's professional advisor, any information relating to the Borrowers
furnished to such Lender by or on behalf of the Borrowers; provided, that prior
to any such disclosure, each such New Lender or proposed New Lender, assignee,
proposed assignee, participant, proposed participant or professional advisor
shall agree to be bound by the provisions of this Section 13.9(g).
(h) Certain Pledges or Assignments. Any Lender may at any time pledge
or assign a security interest in all or any portion of its rights under this
Agreement or any other Loan Document to secure obligations of such Lender,
including without limitation any pledge or assignment to secure obligations to a
Federal Reserve Bank; provided that no such pledge or assignment of a security
interest shall release a Lender form any of its obligations hereunder or
substitute such pledgee or assignee for such Lender as a party hereto.
SECTION 13.10 Amendments, Waivers and Consents. Except as set forth
below or as specifically provided in any Loan Document, including, without
limitation, Section 2.8 hereof, any term, covenant, agreement or condition of
this Agreement or any of the other Loan Documents may be amended or waived by
the Lenders, and any consent given by the Lenders, if, but only if, such
amendment, waiver or consent is in writing signed by the Required Lenders (or by
the Administrative Agent with the consent of the Required Lenders) and delivered
to the Administrative Agent and, in the case of an amendment, signed by the
Borrowers; provided, that no amendment, waiver or consent shall (a) increase the
Aggregate Commitment or increase the amount of the Loans, (b) reduce the rate of
interest or fees payable on any Loan or Reimbursement Obligation, (c) reduce or
forgive the principal amount of any Loan or Reimbursement Obligation, (d) extend
the originally scheduled time or times of payment of the principal of any Loan
or Reimbursement Obligation or the time or times of payment of interest on any
Loan or Reimbursement Obligation or any fee or commission with respect thereto,
(e) permit any subordination of the principal or interest on any Loan or
Reimbursement Obligation, (f) release any Borrower from the Obligations (other
than Hedging Obligations) hereunder, (g) permit any assignment (other than as
specifically permitted or contemplated in this Agreement) of any of a Borrower's
rights and obligations hereunder, (h) amend the provisions of this Section 13.10
or the definition of Required Lenders, in each case, without the prior written
consent of each Lender or (i) extend the time of the obligation of the Lenders
holding Revolving Credit Commitments to make or issue or participate in Letters
of Credit, in each case, without the prior written consent of each Lender. In
addition, no amendment, waiver or consent to the provisions of (a) Article XII
shall be made without the written consent of the Administrative Agent and (b)
Article III without the written consent of the Issuing Lender.
SECTION 13.11 Performance of Duties. The Borrowers' obligations under
this Agreement and each of the other Loan Documents shall be performed by the
Borrowers at their sole cost and expense.
SECTION 13.12 All Powers Coupled with Interest. All powers of attorney
and other authorizations granted to the Lenders, the Administrative Agent and
any Persons designated by the
73
Administrative Agent or any Lender pursuant to any provisions of this Agreement
or any of the other Loan Documents shall be deemed coupled with an interest and
shall be irrevocable so long as any of the Obligations remain unpaid or
unsatisfied, any of the Commitments remain in effect or the Credit Facility has
not been terminated.
SECTION 13.13 Survival of Indemnities. Notwithstanding any termination
of this Agreement, the indemnities to which the Administrative Agent and the
Lenders are entitled under the provisions of this Article XIII and any other
provision of this Agreement and the other Loan Documents shall continue in full
force and effect and shall protect the Administrative Agent and the Lenders
against events arising after such termination as well as before.
SECTION 13.14 Titles and Captions. Titles and captions of Articles,
Sections and subsections in, and the table of contents of, this Agreement are
for convenience only, and neither limit nor amplify the provisions of this
Agreement.
SECTION 13.15 Severability of Provisions. Any provision of this
Agreement or any other Loan Document which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective only to the extent
of such prohibition or unenforceability without invalidating the remainder of
such provision or the remaining provisions hereof or thereof or affecting the
validity or enforceability of such provision in any other jurisdiction.
SECTION 13.16 Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and shall be
binding upon all parties, their successors and assigns, and all of which taken
together shall constitute one and the same agreement.
SECTION 13.17 Term of Agreement. This Agreement shall remain in effect
from the Closing Date through and including the date upon which all Obligations
arising hereunder or under any other Loan Document shall have been indefeasibly
and irrevocably paid and satisfied in full and all Commitments have been
terminated. No termination of this Agreement shall affect the rights and
obligations of the parties hereto arising prior to such termination or in
respect of any provision of this Agreement which survives such termination.
SECTION 13.18 Advice of Counsel. Each of the parties represents to each
other party hereto that it has discussed this Agreement with its counsel.
SECTION 13.19 No Strict Construction. The parties hereto have
participated jointly in the negotiation and drafting of this Agreement. In the
event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties hereto and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Agreement.
74
SECTION 13.20 Inconsistencies with Other Documents; Independent Effect
of Covenants.
(a) In the event there is a conflict or inconsistency between this
Agreement and any other Loan Document, the terms of this Agreement shall
control.
(b) The Borrowers expressly acknowledge and agree that each covenant
contained in Articles VIII, IX, or X hereof shall be given independent effect.
Accordingly, the Borrowers shall not engage in any transaction or other act
otherwise prohibited under any covenant contained in Articles VIII, IX, or X if,
before or after giving effect to such transaction or act, the Borrowers shall or
would be in breach of any other covenant contained in Articles VIII, IX, or X.
[Signature pages to follow]
75
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed under seal by their duly authorized officers, all as of the day and
year first written above.
[CORPORATE SEAL] ▇▇▇▇, INC., as a Borrower
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Title: Executive Vice President
-----------------------------------
BELK ADMINISTRATION COMPANY, as a Borrower
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Title: Executive Vice President
-----------------------------------
BELK INTERNATIONAL, INC., as a Borrower
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
Title: President
-----------------------------------
▇▇▇▇ STORES SERVICES, INC., as a Borrower
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Title: Executive Vice President
-----------------------------------
▇▇▇▇-▇▇▇▇▇▇▇ COMPANY, GREENVILLE,
SOUTH CAROLINA, as a Borrower
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Title: Executive Vice President
-----------------------------------
[Signature Pages Continue]
THE ▇▇▇▇ CENTER, INC., as a Borrower
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Title: Executive Vice President
-----------------------------------
UNITED ELECTRONIC SERVICES, INC., as a
Borrower
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
Title: President
-----------------------------------
BELK ACCOUNTS RECEIVABLE LLC, as a Borrower
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Title: Executive Vice President
-----------------------------------
▇▇▇▇ STORES OF VIRGINIA LLC, as a Borrower
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Title: Executive Vice President
-----------------------------------
BELK GIFT CARD COMPANY LLC, as a Borrower
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Title: Executive Vice President
-----------------------------------
[Signature Pages Continue]
BELK MERCHANDISING, LLC, as a Borrower
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Title: Executive Vice President
-----------------------------------
BELK TEXAS HOLDINGS LLC, as a Borrower
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
Title: Manager
-----------------------------------
BELK TEXAS LP, as a Borrower
By: ▇▇▇▇, Inc., its General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Title: Executive Vice President
-----------------------------------
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent and Lender
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Title: Director
-----------------------------------
BANK OF AMERICA, N.A.,
as Syndication Agent and Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
Title: Vice President
-----------------------------------
BRANCH BANKING AND TRUST COMPANY,
as Documentation Agent and Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Title: Senior Vice President
-----------------------------------
SUNTRUST BANK,
as Documentation Agent and Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Title: Vice President
-----------------------------------
RBC CENTURA BANK, as Lender
By: /s/ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇
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Name: ▇. ▇▇▇▇▇▇ ▇▇▇▇▇
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Title: Account Manager, Commercial Markets
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CAROLINA FIRST BANK, as Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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Title: Executive Vice President
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REGIONS BANK, as Lender
By: /s/ LEBP
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: Assistant Vice President
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Corporate Banking
Regions Bank
