[EXECUTION COPY]
Exhibit 10.3
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$205,000,000
FIVE-YEAR CREDIT AGREEMENT
among
GRAYBAR ELECTRIC COMPANY, INC.,
as Borrower,
THE LENDERS PARTIES HERETO
and
FIRST UNION NATIONAL BANK,
as Administrative Agent,
BANK OF AMERICA, N.A.
and
THE FIRST NATIONAL BANK OF CHICAGO,
as Syndication Agents
Dated as of July 30, 1999
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TABLE OF CONTENTS
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Page
ARTICLE I DEFINITIONS.......................................................1
Section 1.1 Defined Terms...........................................1
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Section 1.2 Other Definitional Provisions..........................20
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Section 1.3 Accounting Terms.......................................20
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ARTICLE II THE LOANS; AMOUNT AND TERMS.....................................21
Section 2.1 Revolving Loans........................................21
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Section 2.2 Competitive Loan Subfacility...........................23
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Section 2.3 Swingline Loan Subfacility.............................25
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Section 2.4 Letter of Credit Subfacility...........................27
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Section 2.5 Fees...................................................30
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Section 2.6 Commitment Reductions..................................31
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Section 2.7 Prepayments............................................32
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Section 2.8 Minimum Principal Amount of Tranches...................33
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Section 2.9 Default Rate and Payment Dates.........................33
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Section 2.10 Conversion Options....................................33
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Section 2.11 Computation of Interest and Fees......................34
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Section 2.12 Pro Rata Treatment and Payments.......................34
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Section 2.13 Non-Receipt of Funds by the Administrative Agent......35
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Section 2.14 Inability to Determine Interest Rate..................36
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Section 2.15 Illegality............................................36
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Section 2.16 Requirements of Law...................................37
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Section 2.17 Indemnity.............................................38
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Section 2.18 Taxes.................................................38
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Section 2.19 Indemnification; Nature of Issuing Lender's Duties....41
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ARTICLE III REPRESENTATIONS AND WARRANTIES.................................42
Section 3.1 Financial Condition....................................42
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Section 3.2 No Change..............................................42
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Section 3.3 Corporate Existence; Compliance with Law...............42
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Section 3.4 Corporate Power; Authorization; Enforceable
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Obligations............................................43
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Section 3.5 No Legal Bar; No Default...............................43
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Section 3.6 No Material Litigation.................................43
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Section 3.7 Investment Company Act.................................44
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Section 3.8 Margin Regulations.....................................44
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Section 3.9 ERISA..................................................44
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Section 3.10 Purpose of Loans......................................44
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Section 3.11 Subsidiaries..........................................45
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Section 3.12 Ownership.............................................45
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Section 3.13 Indebtedness..........................................45
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Section 3.14 Taxes.................................................45
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Section 3.15 Investments...........................................45
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Section 3.16 No Burdensome Restrictions............................45
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Section 3.17 Brokers' Fees.........................................46
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Section 3.18 Labor Matters.........................................46
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Section 3.19 Accuracy and Completeness of Information..............46
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Section 3.20 Year 2000 Issue.......................................46
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ARTICLE IV CONDITIONS PRECEDENT............................................47
Section 4.1 Conditions to Closing Date and Initial Revolving Loans.47
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Section 4.2 Conditions to All Extensions of Credit.................49
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ARTICLE V AFFIRMATIVE COVENANTS............................................50
Section 5.1 Financial Statements...................................50
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Section 5.2 Certificates; Other Information........................51
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Section 5.3 Payment of Obligations.................................52
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Section 5.4 Conduct of Business and Maintenance of Existence.......52
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Section 5.5 Maintenance of Property; Insurance.....................52
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Section 5.6 Inspection of Property; Books and Records; Discussions.52
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Section 5.7 Notices................................................53
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Section 5.8 Financial Covenants....................................53
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Section 5.9 Compliance with Law....................................54
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Section 5.10 Year 2000 Compliance..................................54
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Section 5.11 Further Assurances....................................54
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ARTICLE VI NEGATIVE COVENANTS..............................................54
Section 6.1 Indebtedness...........................................55
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Section 6.2 Liens..................................................55
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Section 6.3 Nature of Business.....................................56
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Section 6.4 Consolidation, Merger, Sale or Purchase of Assets, etc.56
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Section 6.5 Advances, Investments and Loans........................56
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Section 6.6 Issuance of Equity Securities..........................56
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Section 6.7 Transactions with Affiliates; Modification of
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Documentation..........................................57
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Section 6.8 Fiscal Year; Organizational Documents..................57
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Section 6.9 Limitation on Restricted Actions.......................57
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Section 6.10 Restricted Payments...................................57
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ARTICLE VII EVENTS OF DEFAULT..............................................58
Section 7.1 Events of Default......................................58
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Section 7.2 Acceleration; Remedies.................................61
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ARTICLE VIII THE AGENT.....................................................61
Section 8.1 Appointment............................................61
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Section 8.2 Delegation of Duties...................................62
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Section 8.3 Exculpatory Provisions.................................62
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Section 8.4 Reliance by Administrative Agent.......................62
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Section 8.5 Notice of Default......................................63
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Section 8.6 Non-Reliance on Administrative Agent and Other
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Lenders................................................63
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Section 8.7 Indemnification........................................64
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Section 8.8 Administrative Agent in Its Individual Capacity........64
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Section 8.9 Successor Administrative Agent.........................64
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Section 8.10 Syndication Agents....................................65
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ARTICLE IX MISCELLANEOUS...................................................65
Section 9.1 Amendments and Waivers.................................65
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Section 9.2 Notices................................................66
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Section 9.3 No Waiver; Cumulative Remedies.........................67
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Section 9.4 Survival of Representations and Warranties.............67
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Section 9.5 Payment of Expenses and Taxes..........................68
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Section 9.6 Successors and Assigns; Participations; Purchasing
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Lenders...............................................68
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Section 9.7 Adjustments; Set-off..................................71
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Section 9.8 Table of Contents and Section Headings................72
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Section 9.9 Counterparts..........................................72
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Section 9.10 Effectiveness........................................72
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Section 9.11 Severability.........................................73
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Section 9.12 Integration..........................................73
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Section 9.13 Governing Law........................................73
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Section 9.14 Consent to Jurisdiction and Service of Process.......73
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Section 9.15 Arbitration..........................................74
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Section 9.16 Confidentiality......................................75
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Section 9.17 Acknowledgments......................................75
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Section 9.18 Waivers of Jury Trial................................76
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iii
THIS FIVE-YEAR CREDIT AGREEMENT, dated as of July 30, 1999 (the
"Credit Agreement"), among GRAYBAR ELECTRIC COMPANY, INC., a New York
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corporation (the "Borrower"), the several banks and other financial
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institutions as may from time to time become parties to this Agreement
(collectively, the "Lenders"; and individually, a "Lender"), FIRST UNION
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NATIONAL BANK, a national banking association, as administrative agent for
the Lenders hereunder (in such capacity, the "Administrative Agent") and
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BANK OF AMERICA, N.A. and THE FIRST NATIONAL BANK OF CHICAGO, as syndication
agents for the Lenders hereunder (in such capacity, the "Syndication
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Agents").
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W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Borrower has requested that the Lenders make loans and
other financial accommodations to the Borrower in the amount of up to
$205,000,000, as more particularly described herein;
WHEREAS, the Lenders have agreed to make such loans and other
financial accommodations to the Borrower on the terms and conditions
contained herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINED TERMS.
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As used in this Agreement, terms defined in the preamble to this
Agreement have the meanings therein indicated, and the following terms have
the following meanings:
"Account Designation Letter" shall mean the Notice of Account
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Designation Letter dated the Closing Date from the Borrower to the
Administrative Agent substantially in the form attached hereto as
Schedule 1.1(a).
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"Acquisition", by any Person, means the acquisition by such Person
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of the capital stock or all or substantially all of the Property of another
Person, whether or not involving a merger or consolidation with such Person.
"Administrative Agent" shall have the meaning set forth in the
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first paragraph of this Agreement and any successors in such capacity.
"Affiliate" shall mean as to any Person, any other Person
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(excluding any Subsidiary) which, directly or indirectly, is in control of,
is controlled by, or is under common control with, such Person. For purposes
of this definition, a Person shall be deemed to be "controlled by" a Person
if such Person possesses, directly or indirectly, power either (a) to vote
10% or more of the securities having ordinary voting power for the election
of directors of such Person or (b) to direct or cause the direction of the
management and policies of such Person whether by contract or otherwise.
"Agreement" shall mean this Credit Agreement, as amended, modified
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or supplemented from time to time in accordance with its terms.
"Alternate Base Rate" shall mean, for any day, a rate per annum
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equal to the greater of (a) the Prime Rate in effect on such day and (b) the
Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. For
purposes hereof: "Prime Rate" shall mean, at any time, the rate of interest
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per annum publicly announced from time to time by First Union at its
principal office in Charlotte, North Carolina as its prime rate. Each change
in the Prime Rate shall be effective as of the opening of business on the
day such change in the Prime Rate occurs. The parties hereto acknowledge
that the rate announced publicly by First Union as its Prime Rate is an
index or base rate and shall not necessarily be its lowest or best rate
charged to its customers or other banks; and "Federal Funds Effective Rate"
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shall mean, for any day, the weighted average of the rates on overnight
federal funds transactions with members of the Federal Reserve System
arranged by federal funds brokers, as published on the next succeeding
Business Day by the Federal Reserve Bank of New York, or, if such rate is
not so published on the next succeeding Business Day, the average of the
quotations for the day of such transactions received by the Administrative
Agent from three federal funds brokers of recognized standing selected by
it. If for any reason the Administrative Agent shall have determined (which
determination shall be conclusive in the absence of manifest error) that it
is unable to ascertain the Federal Funds Effective Rate, for any reason,
including the inability or failure of the Administrative Agent to obtain
sufficient quotations in accordance with the terms thereof, the Alternate
Base Rate shall be determined without regard to clause (b) of the first
sentence of this definition, as appropriate, until the circumstances giving
rise to such inability no longer exist. Any change in the Alternate Base
Rate due to a change in the Prime Rate or the Federal Funds Effective Rate
shall be effective on the opening of business on the date of such change.
"Alternate Base Rate Loans" shall mean Loans that bear interest at
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an interest rate based on the Alternate Base Rate.
"Applicable Margin" shall mean, for any day, the rate per annum set
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forth below opposite the applicable Level then in effect, it being
understood that the Applicable Margin for (a) Alternate Base Rate Loans
shall be the percentage set forth under the column "Alternate Base Rate
Margin", (b) LIBOR Rate Loans shall be the percentage set forth under the
column "LIBOR Rate Margin", (c) the Letter of Credit Fee shall be the
percentage set forth under the column "LIBOR Rate Margin" and (d) the
Facility Fee shall be the percentage set forth under the column "Facility
Fee."
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Alternate
Leverage Base Rate LIBOR Rate Facility
Level Ratio Margin Margin Fee
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I greater than or equal to 3.50 to 1.0 .00% .95% .30%
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II < 3.50 to 1.0 .00% .75% .25%
but greater than or equal to 3.00
to 1.0
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III < 3.00 to 1.0 .00% .55% .20%
but greater than or equal to 2.25
to 1.0
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IV < 2.25 to 1.0 .00% .475% .15%
but greater than or equal to 1.75
to 1.0
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V < 1.75 to 1.0 .00% .375% .125%
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The Applicable Margin shall, in each case, be determined and
adjusted quarterly on the date five (5) Business Days after the date on
which the Administrative Agent has received from the Borrower the annual or
quarterly financial information and certifications required to be delivered
to the Administrative Agent and the Lenders in accordance with the
provisions of Sections 5.1(a), 5.1(b) and 5.2(b) (each an "Interest
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Determination Date"). Such Applicable Margin shall be effective from such
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Interest Determination Date until the next such Interest Determination Date.
The initial Applicable Margins shall be based on Level III until the first
Interest Determination Date occurring after June 30, 1999. After the Closing
Date, if the Borrower shall fail to provide the annual or quarterly
financial information and certifications in accordance with the provisions
of Sections 5.1(a), 5.1(b) and 5.2(b), the Applicable Margin from such
Interest Determination Date shall, on the date five (5) Business Days after
the date by which the Borrower was so required to provide such financial
information and certifications to the Administrative Agent and the Lenders,
be based on Level I until such time as such information and certifications
are provided, whereupon the Level shall be determined by the then current
Leverage Ratio.
"Asset Disposition" shall mean the disposition of any or all of the
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assets (including, without limitation, the Capital Stock of a Subsidiary or
any ownership interest in a joint venture) of the Borrower or any Subsidiary
whether by sale, lease, transfer or otherwise. The term "Asset Disposition"
shall not include (a) Specified Sales or (b) any Equity Issuance.
"Bankruptcy Code" shall mean the Bankruptcy Code in Title 11 of the
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United States Code, as amended, modified, succeeded or replaced from time to
time.
"Borrower" shall have the meaning set forth in the first paragraph
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of this Agreement.
"Borrower Obligations" shall mean, without duplication, (a) all of
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the obligations of the Borrower to the Lenders (including the Issuing
Lender) and the Administrative Agent, whenever arising, under this
Agreement, the Notes or any of the other Credit Documents (including, but
not limited to, any interest accruing after the occurrence of a filing of a
petition of bankruptcy under the Bankruptcy Code with respect to the
Borrower, regardless of whether such interest is an allowed claim under the
Bankruptcy Code) and (b) all liabilities and obligations, whenever
3
arising, owing from the Borrower or any of its Subsidiaries to any Lender, or
any Affiliate of a Lender, arising under any Hedging Agreement.
"Borrowing Date" shall mean, in respect of any Loan, the date such
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Loan is made.
"Business Day" shall mean a day other than a Saturday, Sunday or
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other day on which commercial banks in Charlotte, North Carolina or New
York, New York are authorized or required by law to close; provided,
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however, that when used in connection with a rate determination, borrowing
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or payment in respect of a LIBOR Rate Loan, the term "Business Day" shall
also exclude any day on which banks in London, England are not open for
dealings in Dollar deposits in the London interbank market.
"Capital Lease" shall mean any lease of property, real or personal,
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the obligations with respect to which are required to be capitalized on a
balance sheet of the lessee in accordance with GAAP.
"Capital Lease Obligations" shall mean the capitalized lease
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obligations relating to a Capital Lease determined in accordance with GAAP.
"Capital Stock" shall mean (a) in the case of a corporation,
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capital stock, (b) in the case of an association or business entity, any and
all shares, interests, participations, rights or other equivalents (however
designated) of capital stock, (c) in the case of a partnership, partnership
interests (whether general or limited), (d) in the case of a limited
liability company, membership interests and (e) any other interest or
participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person.
"Cash Equivalents" shall mean (a) securities issued or directly and
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fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the
United States of America is pledged in support thereof) having maturities of
not more than twelve months from the date of acquisition ("Government
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Obligations"), (b) U.S. dollar denominated (or foreign currency fully
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hedged) time deposits, certificates of deposit, Eurodollar time deposits and
Eurodollar certificates of deposit of (y) any domestic commercial bank of
recognized standing having capital and surplus in excess of $250,000,000 or
(z) any bank whose short-term commercial paper rating from S&P is at least
A-1 or the equivalent thereof or from ▇▇▇▇▇'▇ is at least P-1 or the
equivalent thereof (any such bank being an "Approved Bank"), in each case
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with maturities of not more than 364 days from the date of acquisition, (c)
commercial paper and variable or fixed rate notes issued by any Approved
Bank (or by the parent company thereof) or any variable rate notes issued
by, or guaranteed by any domestic corporation rated A-1 (or the equivalent
thereof) or better by S&P or P-1 (or the equivalent thereof) or better by
Moody's and maturing within six months of the date of acquisition, (d)
repurchase agreements with a bank or trust company (including a Lender) or a
recognized securities dealer having capital and surplus in excess of
$500,000,000 for direct obligations issued by or fully guaranteed by the
United States of America, (e) obligations of any state of the United States
or any political subdivision thereof for the payment of the principal and
redemption price of and interest on which there shall have been irrevocably
deposited
4
Government Obligations maturing as to principal and interest at times and
in amounts sufficient to provide such payment, and (f) auction preferred
stock rated in the highest short-term credit rating category by S&P or Moody's.
"Closing Date" shall mean the date of this Agreement.
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"Code" shall mean the Internal Revenue Code of 1986, as amended
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from time to time.
"Commitment" shall mean the Revolving Commitment, the LOC
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Commitment and the Swingline Commitment, individually or collectively, as
appropriate.
"Commitment Percentage" shall mean the Revolving Commitment
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Percentage and/or LOC Commitment Percentage, as appropriate.
"Commitment Period" shall mean the period from and including the
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Closing Date to but not including the Revolving Commitment Termination Date.
"Commitment Transfer Supplement" shall mean a Commitment Transfer
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Supplement, substantially in the form of Schedule 9.6(c).
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"Commonly Controlled Entity" shall mean an entity, whether or not
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incorporated, which is under common control with the Borrower within the
meaning of Section 4001 of ERISA or is part of a group which includes the
Borrower and which is treated as a single employer under Section 414 of the
Code.
"Competitive Bid" means an offer by a Lender to make a Competitive
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Loan pursuant to the terms of Section 2.2.
"Competitive Bid Rate" means, as to any Competitive Bid made by a
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Lender in accordance with the provisions of Section 2.2, the fixed rate of
interest offered by the Lender making the Competitive Bid.
"Competitive Bid Request" means a request by the Borrower for
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Competitive Bids in accordance with the provisions of Section 2.2(b).
"Competitive Loan" means a loan made by a Lender in its discretion
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pursuant to the provisions of Section 2.2.
"Competitive Loan Lenders" means, at any time, those Lenders which
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have Competitive Loans outstanding.
"Competitive Loan Notes" means the promissory notes of the Borrower
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in favor of each Lender evidencing the Competitive Loans provided pursuant
to Section 2.2, individually or collectively, as appropriate, as such
promissory notes may be amended, modified, supplemented or replaced from
time to time.
5
"Consolidated Cash Taxes" means, for any period, the aggregate of
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all taxes of the Borrower and its Subsidiaries on a consolidated basis for
such period, as determined in accordance with GAAP, to the extent the same
are paid in cash during such period.
"Consolidated EBITDA" means, for any period, the sum of (a)
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Consolidated Net Income for such period, plus (b) an amount which, in the
determination of Consolidated Net Income for such period, has been deducted
for (i) Consolidated Interest Expense, (ii) total federal, state, local and
foreign income, value added and similar taxes, (iii) depreciation and
amortization expense and (iv) other extraordinary non-recurring, non-cash
charges.
"Consolidated Interest Expense" means, for any period, all interest
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expense of the Borrower and its Subsidiaries including the interest
component under Capital Leases, as determined in accordance with GAAP.
Except as expressly provided otherwise, the applicable period shall be for
the four consecutive quarters ending as of the date of determination.
"Consolidated Net Income" means, for any period, net income
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(excluding extraordinary items) after taxes for such period of the Borrower
and its Subsidiaries on a consolidated basis, as determined in accordance
with GAAP.
"Consolidated Tangible Net Worth" means, as of any date with
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respect to the Borrower and its Subsidiaries on a consolidated basis,
Consolidated Total Tangible Assets minus Consolidated Total Liabilities, as
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determined in accordance with GAAP.
"Consolidated Total Assets" means, as of any date with respect to
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the Borrower and its Subsidiaries on a consolidated basis, total assets, as
determined in accordance with GAAP.
"Consolidated Total Liabilities" means, as of any date with respect
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to the Borrower and its Subsidiaries on a consolidated basis, total
liabilities, as determined in accordance with GAAP.
"Consolidated Total Tangible Assets" means, as of any date with
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respect to the Borrower and its Subsidiaries on a consolidated basis,
Consolidated Total Assets minus (a) goodwill and (b) other items properly
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classified as "intangible assets" in each case as determined in accordance
with GAAP (but only if the sum of (a) and (b) equals or exceeds 5% of
Consolidated Total Assets).
"Contractual Obligation" shall mean, as to any Person, any
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provision of any security issued by such Person or of any agreement,
instrument or undertaking to which such Person is a party or by which it or
any of its property is bound.
"Credit Documents" shall mean this Agreement, each of the Notes,
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the 364-Day Credit Agreement, the Letters of Credit and the LOC Documents.
6
"Default" shall mean any of the events specified in Section 7.1,
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whether or not any requirement for the giving of notice or the lapse of
time, or both, or any other condition, has been satisfied.
"Defaulting Lender" shall mean, at any time, any Lender that, at
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such time (a) has failed to make a Loan required pursuant to the term of
this Credit Agreement, including the funding of a Participation Interest in
accordance with the terms hereof, (b) has failed to pay to the
Administrative Agent or any Lender an amount owed by such Lender pursuant to
the terms of this Credit Agreement, or (c) has been deemed insolvent or has
become subject to a bankruptcy or insolvency proceeding or to a receiver,
trustee or similar official.
"Dollars" and "$" shall mean dollars in lawful currency of the
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United States of America.
"Domestic Lending Office" shall mean, initially, the office of each
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Lender designated as such Lender's Domestic Lending Office shown on
Schedule 9.2; and thereafter, such other office of such Lender as such Lender
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may from time to time specify to the Administrative Agent and the Borrower as
the office of such Lender at which Alternate Base Rate Loans of such Lender
are to be made.
"Equity Issuance" shall mean any issuance by the Borrower or any
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Subsidiary to any Person which is not the Borrower of (a) shares of its
Capital Stock, (b) any shares of its Capital Stock pursuant to the exercise
of options or warrants or (c) any shares of its Capital Stock pursuant to
the conversion of any debt securities to equity. The term "Equity Issuance"
shall not include any Asset Disposition or the issuance of common stock of
the Borrower's Subsidiaries to its officers, directors or employees in
connection with stock offering plans and other benefit plans of such
Subsidiaries.
"ERISA" shall mean the Employee Retirement Income Security Act of
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1974, as amended from time to time.
"Eurodollar Reserve Percentage" shall mean for any day, the
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percentage (expressed as a decimal and rounded upwards, if necessary, to the
next higher 1/100th of 1%) which is in effect for such day as prescribed by
the Federal Reserve Board (or any successor) for determining the maximum
reserve requirement (including without limitation any basic, supplemental or
emergency reserves) in respect of Eurocurrency liabilities, as defined in
Regulation D of such Board as in effect from time to time, or any similar
category of liabilities for a member bank of the Federal Reserve System in
New York City.
"Event of Default" shall mean any of the events specified in
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Section 7.1; provided, however, that any requirement for the giving of
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notice or the lapse of time, or both, or any other condition, has been
satisfied.
"Extension of Credit" shall mean, as to any Lender, the making of a
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Loan by such Lender or the issuance of, or participation in, a Letter of
Credit by such Lender.
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"Facility Fee" shall have the meaning set forth in Section 2.5(a).
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"Federal Funds Effective Rate" shall have the meaning set forth in
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the definition of "Alternate Base Rate".
"First Union" shall mean First Union National Bank, a national
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banking association.
"Funded Debt" shall mean, with respect to any Person, without
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duplication, (a) all Indebtedness of such Person other than Indebtedness of
the types referred to in clause (e), (f), (g), (i) and (m) of the definition
of "Indebtedness" set forth in this Section 1.1, (b) all Funded Debt of
others of the type referred to in clause (a) above secured by (or for which
the holder of such Funded Debt has an existing right, contingent or
otherwise, to be secured by) any Lien on, or payable out of the proceeds of
production from, property owned or acquired by such Person, whether or not
the obligations secured thereby have been assumed, (c) all Guaranty
Obligations of such Person with respect to Funded Debt of the type referred
to in clause (a) above of another Person and (d) Funded Debt of the type
referred to in clause (a) above of any partnership or unincorporated joint
venture in which such Person is legally obligated or has a reasonable
expectation of being liable with respect thereto.
"GAAP" shall mean generally accepted accounting principles in
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effect in the United States of America applied on a consistent basis,
subject, however, in the case of determination of compliance with the
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financial covenants set out in Section 5.8 to the provisions of Section 1.3.
"Government Acts" shall have the meaning set forth in Section 2.19.
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"Governmental Authority" shall mean any nation or government, any
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state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of
or pertaining to government.
"Guaranty Obligations" means, with respect to any Person, without
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duplication, any obligations of such Person (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or
collection) guaranteeing or intended to guarantee any Indebtedness of any
other Person in any manner, whether direct or indirect, and including
without limitation any obligation, whether or not contingent, (a) to
purchase any such Indebtedness or any property constituting security
therefor, (b) to advance or provide funds or other support for the payment
or purchase of any such Indebtedness or to maintain working capital,
solvency or other balance sheet condition of such other Person (including
without limitation keep well agreements, maintenance agreements, comfort
letters or similar agreements or arrangements) for the benefit of any holder
of Indebtedness of such other Person, (c) to lease or purchase Property,
securities or services primarily for the purpose of assuring the holder of
such Indebtedness, or (d) to otherwise assure or hold harmless the holder of
such Indebtedness against loss in respect thereof.
"Hedging Agreements" shall mean, with respect to any Person, any
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agreement entered into to protect such Person against fluctuations in
interest rates, or currency or raw materials values, including, without
limitation, any interest rate swap, cap or collar agreement or similar
8
arrangement between such Person and one or more counterparties, any foreign
currency exchange agreement, currency protection agreements, commodity
purchase or option agreements or other interest or exchange rate or
commodity price hedging agreements.
"Indebtedness" shall mean, with respect to any Person, without
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duplication, (a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to Property purchased by such Person (other than
customary reservations or retentions of title under agreements with
suppliers entered into in the ordinary course of business), (d) all
obligations of such Person issued or assumed as the deferred purchase price
of Property or services purchased by such Person (other than trade debt
incurred in the ordinary course of business and due within six months of the
incurrence thereof) which would appear as liabilities on a balance sheet of
such Person, (e) all obligations of such Person under take-or-pay or similar
arrangements or under commodities agreements, (f) all Indebtedness of others
secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on, or payable
out of the proceeds of production from, Property owned or acquired by such
Person, whether or not the obligations secured thereby have been assumed,
(g) all Guaranty Obligations of such Person with respect to Indebtedness of
another Person, (h) the principal portion of all obligations of such Person
under Capital Leases, (i) all obligations of such Person under Hedging
Agreements, (j) the maximum amount of all standby letters of credit issued
or bankers' acceptances facilities created for the account of such Person
and, without duplication, all drafts drawn thereunder (to the extent
unreimbursed), (k) all preferred Capital Stock issued by such Person and
which by the terms thereof could be (at the request of the holders thereof
or otherwise) subject to mandatory sinking fund payments, redemption or
other acceleration, (l) the principal balance outstanding under any
synthetic lease, tax retention operating lease, off-balance sheet loan or
similar off-balance sheet financing product, and (m) the Indebtedness of any
partnership or unincorporated joint venture in which such Person is a
general partner or a joint venturer, but only to the extent to which there
is recourse to such Person for payment of such Indebtedness.
"Insolvency" shall mean, with respect to any Multiemployer Plan,
----------
the condition that such Plan is insolvent within the meaning of such term as
used in Section 4245 of ERISA.
"Interest Coverage Ratio" means, with respect to the Borrower and
-----------------------
its Subsidiaries on a consolidated basis for the twelve month period ending
on the last day of any fiscal quarter of the Borrower and its Subsidiaries,
the ratio of (a) Consolidated EBITDA for such period to (b) Consolidated
Interest Expense for such period.
"Interest Payment Date" shall mean (a) as to any Alternate Base
---------------------
Rate Loan or Swingline Loan, the last day of each March, June, September and
December and the Revolving Commitment Termination Date, (b) as to any LIBOR
Rate Loan or Competitive Loan having an Interest Period of three months or
less, the last day of such Interest Period, and (c) as to any LIBOR Rate
Loan or Competitive Loan having an Interest Period longer than three months,
each day which is three months after the first day of such Interest Period
and the last day of such Interest Period.
9
"Interest Period" shall mean (a) with respect to any LIBOR Rate
---------------
Loan, (i) initially, the period commencing on the Borrowing Date or
conversion date, as the case may be, with respect to such LIBOR Rate Loan
and ending one, two, three or six months thereafter, as selected by the
Borrower in the notice of borrowing or notice of conversion given with
respect thereto and (ii) thereafter, each period commencing on the last day
of the immediately preceding Interest Period applicable to such LIBOR Rate
Loan and ending one, two, three or six months thereafter, as selected by the
Borrower by irrevocable notice to the Administrative Agent not less than
three Business Days prior to the last day of the then current Interest
Period with respect thereto and (b) with respect to any Competitive Loan, a
period of not less than 7 nor more than 180 days' duration, as the Borrower
may request and the Competitive Lender may agree in accordance with the
provisions of Section 2.2; provided, however, (A) if any Interest Period
-------- -------
pertaining to a LIBOR Rate Loan would otherwise end on a day that is not a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless the result of such extension would be to carry such
Interest Period into another calendar month in which event such Interest
Period shall end on the immediately preceding Business Day, (B) any Interest
Period pertaining to a LIBOR Rate Loan that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of the relevant calendar month, (C) if
the Borrower shall fail to give notice as provided above, the Borrower shall
be deemed to have selected an Alternate Base Rate Loan to replace the
affected LIBOR Rate Loan, (D) any Interest Period in respect of any Loan
that would otherwise extend beyond the Revolving Commitment Termination Date
is due on the Revolving Commitment Termination Date, and (E) no more than
six (6) LIBOR Rate Loans may be in effect at any time. For purposes hereof,
LIBOR Rate Loans with different Interest Periods shall be considered as
separate LIBOR Rate Loans, even if they shall begin on the same date and
have the same duration, although borrowings, extensions and conversions may,
in accordance with the provisions hereof, be combined at the end of existing
Interest Periods to constitute a new LIBOR Rate Loan with a single Interest
Period.
"Issuing Lender" shall mean First Union.
--------------
"Issuing Lender Fees" shall have the meaning set forth in Section
-------------------
2.5(d).
"Lender" shall have the meaning set forth in the first paragraph of
------
this Agreement.
"Letters of Credit" shall mean any letter of credit issued by the
-----------------
Issuing Lender pursuant to the terms hereof, as such Letters of Credit may
be amended, modified, extended, renewed or replaced from time to time.
"Letter of Credit Fee" shall have the meaning set forth in Section
--------------------
2.5(c).
"Leverage Ratio" means, with respect to the Borrower and its
--------------
Subsidiaries on a consolidated basis for the twelve month period ending on
the last day of any fiscal quarter, the ratio of (a) Funded Debt of the
Borrower and its Subsidiaries on a consolidated basis (excluding for
purposes hereof, Funded Debt of the type set forth in subsection (l) of the
definition of
10
"Indebtedness" set forth in this Section 1.1 to the extent that it is less
than $75,000,000 in the aggregate) on the last day of such period to
(b) Consolidated EBITDA for such period.
"LIBOR" shall mean, for any LIBOR Rate Loan for any Interest Period
-----
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the
London interbank offered rate for deposits in Dollars at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period. If for any reason such
rate is not available, the term "LIBOR" shall mean, for any LIBOR Rate Loan
for any Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page
as the London interbank offered rate for deposits in Dollars at
approximately 11:00 a.m. (London time) two Business Days prior to the first
day of such Interest Period for a term comparable to such Interest Period;
provided, however, if more than one rate is specified on Reuters Screen LIBO
-------- -------
Page, the applicable rate shall be the arithmetic mean of all such rates
(rounded upwards, if necessary, to the nearest 1/100 of 1%). If, for any
reason, neither of such rates is available, then "LIBOR" shall mean the rate
per annum at which, as determined by the Administrative Agent, Dollars in an
amount comparable to the Loans then requested are being offered to leading
banks at approximately 11:00 A.M. London time, two (2) Business Days prior
to the commencement of the applicable Interest Period for settlement in
immediately available funds by leading banks in the London interbank market
for a period equal to the Interest Period selected.
"LIBOR Lending Office" shall mean, initially, the office of each
--------------------
Lender designated as such Lender's LIBOR Lending Office shown on Schedule 9.2;
------------
and thereafter, such other office of such Lender as such Lender may
from time to time specify to the Administrative Agent and the Borrower as
the office of such Lender at which the LIBOR Rate Loans of such Lender are
to be made.
"LIBOR Rate" shall mean a rate per annum (rounded upwards, if
----------
necessary, to the next higher 1/100th of 1%) determined by the
Administrative Agent pursuant to the following formula:
LIBOR Rate = LIBOR
------------------------------------
1.00 - Eurodollar Reserve Percentage
"LIBOR Rate Loan" shall mean Loans the rate of interest applicable
---------------
to which is based on the LIBOR Rate.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
----
deposit arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including,
without limitation, any conditional sale or other title retention agreement
and any Capital Lease having substantially the same economic effect as any
of the foregoing).
11
"Loan" shall mean a Revolving Loan, a Swingline Loan and/or
----
Competitive Loans, as appropriate.
"LOC Commitment" shall mean the commitment of the Issuing Lender to
--------------
issue Letters of Credit and with respect to each Lender, the commitment of
such Lender to purchase participation interests in the Letters of Credit up
to such Lender's LOC Committed Amount as specified in Schedule 2.1(a), as
---------------
such amount may be reduced from time to time in accordance with the
provisions hereof.
"LOC Commitment Percentage" shall mean, for each Lender, the
-------------------------
percentage identified as its LOC Commitment Percentage on Schedule 2.1(a),
---------------
as such percentage may be modified in connection with any assignment made in
accordance with the provisions of Section 9.6(c).
"LOC Committed Amount" shall mean, collectively, the aggregate
--------------------
amount of all of the LOC Commitments of the Lenders to issue and participate
in Letters of Credit as referenced in Section 2.4 and, individually, the
amount of each Lender's LOC Commitment as specified in Schedule 2.1(a).
---------------
"LOC Documents" shall mean, with respect to any Letter of Credit,
-------------
such Letter of Credit, any amendments thereto, any documents delivered in
connection therewith, any application therefor, and any agreements,
instruments, guarantees or other documents (whether general in application
or applicable only to such Letter of Credit) governing or providing for (a)
the rights and obligations of the parties concerned or (b) any collateral
security for such obligations.
"LOC Obligations" shall mean, at any time, the sum of (a) the
---------------
maximum amount which is, or at any time thereafter may become, available to
be drawn under Letters of Credit then outstanding, assuming compliance with
all requirements for drawings referred to in such Letters of Credit plus (b)
----
the aggregate amount of all drawings under Letters of Credit honored by the
Issuing Lender but not theretofore reimbursed.
"Mandatory Borrowing" shall have the meaning set forth in Section
-------------------
2.3(b)(ii) or Section 2.4(e), as the context may require.
"Material Adverse Effect" shall mean a material adverse effect on
-----------------------
(a) the business, operations, property or condition (financial or otherwise)
of the Borrower and its Subsidiaries taken as a whole, (b) the ability of
the Borrower to perform its obligations, when such obligations are required
to be performed, under this Agreement, any of the Notes or any other Credit
Document or (c) the validity or enforceability of this Agreement, any of the
Notes or any of the other Credit Documents or the rights or remedies of the
Administrative Agent or the Lenders hereunder or thereunder.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc.
-------
"Multiemployer Plan" shall mean a Plan which is a multiemployer
------------------
plan as defined in Section 4001(a)(3) of ERISA.
12
"Net Cash Proceeds" shall mean the aggregate cash proceeds received
-----------------
by the Borrower or any Subsidiary in respect of any Asset Disposition or
Equity Issuance, net of (a) direct costs (including, without limitation,
legal, accounting and investment banking fees, and sales commissions) and
(b) taxes paid or payable as a result thereof; it being understood that "Net
Cash Proceeds" shall include, without limitation, any cash received upon the
sale or other disposition of any non-cash consideration received by the
Borrower or any Subsidiary in any Asset Disposition or Equity Issuance.
"Note" or "Notes" shall mean the Revolving Notes, Competitive Loan
---- -----
Notes and/or the Swingline Note, collectively, separately or individually,
as appropriate.
"Notice of Borrowing" shall mean the written notice of borrowing as
-------------------
referenced and defined in Section 2.1(b)(i) or 2.3(b)(i), as appropriate.
"Notice of Conversion" shall mean the written notice of extension
--------------------
or conversion as referenced and defined in Section 2.10.
"Obligations" shall mean, collectively, Loans and LOC Obligations.
-----------
"Participant" shall have the meaning set forth in Section 9.6(b).
-----------
"Participation Interest" shall mean the purchase by a Lender of a
----------------------
participation interest in Swingline Loans as provided in Section 2.3(b)(ii)
or in Letters of Credit as provided in Section 2.4.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
----
established pursuant to Subtitle A of Title IV of ERISA.
"Permitted Acquisition" shall means an Acquisition by the Borrower
---------------------
or any Subsidiary of the Borrower for the fair market value of the capital
stock or Property acquired, provided that (a) the capital stock or Property
--------
acquired in such Acquisition relates to a line of business similar to the
business of the Borrower and its Subsidiaries engaged in on the Closing
Date; (b) in the case of an Acquisition of the capital stock of another
Person, (i) the board of directors (or other comparable governing body) of
such other Person shall have duly approved such Acquisition and (ii) such
Person shall become a wholly-owned direct or indirect Subsidiary of the
Borrower; (c) the representations and warranties made by the Borrower in any
Credit Document shall be true and correct in all material respects at and as
if made as of the date of such Acquisition (after giving effect thereto)
except to the extent such representations and warranties expressly relate to
an earlier date and no Default or Event of Default exists as of the date of
such Acquisition (after giving effect thereto); and (d) if the aggregate
consideration for such Acquisition exceeds 1% of the Borrower's Consolidated
Total Assets, the Borrower shall have delivered to the Agent a Pro Forma
Compliance Certificate demonstrating that, upon giving effect to the
Acquisition on a Pro Forma Basis, the Borrower will be in compliance with
all of the financial covenants set forth in Section 5.8.
13
"Permitted Investments" shall mean:
---------------------
(a) cash and Cash Equivalents;
(b) receivables owing to the Borrower or any of its
Subsidiaries or any receivables and advances to suppliers, in each
case if created, acquired or made in the ordinary course of
business and payable or dischargeable in accordance with customary
trade terms;
(c) investments (including debt obligations) received in
connection with the bankruptcy or reorganization of suppliers and
customers and in settlement of delinquent obligations of, and other
disputes with, customers and suppliers arising in the ordinary
course of business;
(d) investments existing as of the Closing Date and set
forth in Schedule 6.5;
------------
(e) loans to employees, directors or officers in
connection with the award of convertible bonds or stock under a
stock incentive plan, stock option plan or other equity-based
compensation plan or arrangement in the aggregate not to exceed
$5,000,000 (calculated on the exercise price for any such shares)
in the aggregate at any time outstanding;
(f) other advances or loans to employees, directors,
officers, shareholders or agents not to exceed $10,000,000 in the
aggregate at any time outstanding,
(g) Permitted Acquisitions; and
(h) additional loan advances and/or investments of a
nature not contemplated by the foregoing clauses hereof, provided
--------
that such loans, advances and/or investments made pursuant to this
clause (h) shall not exceed an aggregate amount of more than five
percent (5%) of the Consolidated Total Assets determined as of the
end of the most recently completed fiscal year.
As used herein, "investment" means all investments, in cash or by
----------
delivery of property made, directly or indirectly in, to or from any Person,
whether by acquisition of shares of Capital Stock, property, assets,
indebtedness or other obligations or securities or by loan advance, capital
contribution or otherwise.
"Permitted Liens" means:
---------------
(a) Liens existing as of the Closing Date and set forth on
Schedule 6.2; provided that (i) no such Lien shall at any time be
------------ --------
extended to or cover any Property other than the Property subject
thereto on the Closing Date (provided, however, that Liens on new
Property which arise in replacement of Liens on previously owned
Property to the extent
14
that such new Property is acquired through like-kind exchanges or
similar substitutions shall be permitted hereunder) and (ii) the
principal amount of the Indebtedness secured by such Liens shall
not be extended, renewed, refunded or refinanced.
(b) Liens (other than Liens created or imposed under
ERISA) for taxes, assessments or governmental charges or levies not
yet due or Liens for taxes being contested in good faith by
appropriate proceedings for which adequate reserves determined in
accordance with GAAP have been established (and as to which the
Property subject to any such Lien is not yet subject to
foreclosure, sale or loss on account thereof);
(c) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and suppliers and other Liens
imposed by law or pursuant to customary reservations or retentions
of title arising in the ordinary course of business, provided that
--------
such Liens secure only amounts not yet due and payable or, if due
and payable, are unfiled and no other action has been taken to
enforce the same or are being contested in good faith by
appropriate proceedings for which adequate reserves determined in
accordance with GAAP have been established (and as to which the
Property subject to any such Lien is not yet subject to
foreclosure, sale or loss on account thereof);
(d) Liens (other than Liens created or imposed under
ERISA) incurred or deposits made in the ordinary course of business
in connection with workers' compensation, unemployment insurance
and other types of social security, or to secure the performance of
tenders, statutory obligations, bids, leases, government contracts,
performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money);
(e) Liens in connection with attachments or judgments
(including judgment or appeal bonds) provided that the judgments
--------
secured shall, within 30 days after the entry thereof, have been
discharged or execution thereof stayed pending appeal, or shall
have been discharged within 30 days after the expiration of any
such stay;
(f) easements, rights-of-way, restrictions (including
zoning restrictions), minor defects or irregularities in title and
other similar charges or encumbrances not, in any material respect,
impairing the use of the encumbered Property for its intended
purposes;
(g) Liens securing purchase money Indebtedness (including
Capital Leases), provided that any such Lien attaches only to the
--------
Property financed and such Lien attaches thereto concurrently with
or within 90 days after the acquisition thereof;
(h) leases or subleases granted to others not interfering
in any material respect with the business of the Borrower and its
Subsidiaries;
(i) any interest of title of a lessor under, and Liens
arising from UCC financing statements (or equivalent filings,
registrations or agreements in foreign jurisdictions) relating to,
leases permitted by this Credit Agreement;
15
(j) normal and customary rights of setoff upon deposits of
cash in favor of banks or other depository institutions;
(k) inchoate Liens arising under ERISA to secure current
service pension liabilities as they are incurred under the
provisions of any Plan;
(l) Liens assumed in connection with a Permitted
Acquisition, so long as such Liens cover only the assets acquired
pursuant to such Permitted Acquisition; and
(m) additional Liens not otherwise permitted by the
foregoing clauses hereof provided that such additional Liens
--------
permitted by this clause (m) do not encumber property and assets
which constitute more than fifteen percent (15%) of the
Consolidated Total Assets determined as of the end of the most
recently completed fiscal year.
"Person" shall mean an individual, partnership, corporation,
------
limited liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or other
entity of whatever nature.
"Plan" shall mean, at any particular time, any employee benefit
----
plan which is covered by Title IV of ERISA and in respect of which the
Borrower or a Commonly Controlled Entity is (or, if such plan were
terminated at such time, would under Section 4069 of ERISA be deemed to be)
an "employer" as defined in Section 3(5) of ERISA.
"Prime Rate" shall have the meaning set forth in the definition of
----------
Alternate Base Rate.
"Pro Forma Basis" means, for purposes of calculating compliance
---------------
with each of the financial covenants set forth in Section 5.8 in
respect of a proposed transaction, that such transaction shall be deemed to
have occurred as of the first day of the four fiscal-quarter period ending
as of the most recent fiscal quarter end preceding the date of such
transaction with respect to which the Administrative Agent has received the
information required pursuant to Section 5.1 In connection with any
calculation of the financial covenants set forth in Section 5.8 upon giving
effect to a transaction on a Pro Forma Basis, (a) any Indebtedness incurred
by the Borrower in connection with such transaction (i) shall be deemed to
have been incurred as of the first day of the applicable period and (ii) if
such Indebtedness has a floating or formula rate, shall have an implied rate
of interest for the applicable period for purposes of this definition
determined by utilizing the rate which is or would be in effect with respect
to such Indebtedness as at the relevant date of determination, (b) income
statement items (whether positive or negative) attributable to the Property
acquired in such transaction or to the Acquisition comprising such
transaction, as applicable, shall be included to the extent relating to the
relevant period and (c) pro forma adjustments may be included to the extent
that such adjustments give effect to events that are (i) directly
attributable to such transaction, (ii) expected to continue to be applicable
to the Borrower and (iii) factually supportable.
16
"Pro Forma Compliance Certificate" means a certificate of an
--------------------------------
Responsible Officer of the Borrower delivered to the Administrative Agent in
connection with any Acquisition as referred to in the definition of
"Permitted Acquisition" set forth in this Section 1.1, as applicable, and
---------------------
containing reasonably detailed calculations, upon giving effect to the
applicable transaction on a Pro Forma Basis, of the Leverage Ratio, Interest
Coverage Ratio and the Consolidated Tangible Net Worth as of the most recent
fiscal quarter end preceding the date of the applicable transaction with
respect to which the Administrative Agent shall have received the financial
information required pursuant to Section 5.1.
"Property" means any interest in any kind of property or asset,
--------
whether real, personal or mixed, or tangible or intangible.
"Purchasing Lenders" shall have the meaning set forth in
------------------
Section 9.6(c).
"Register" shall have the meaning set forth in Section 9.6(d).
--------
"Reorganization" shall mean, with respect to any Multiemployer
--------------
Plan, the condition that such Plan is in reorganization within the meaning
of such term as used in Section 4241 of ERISA.
"Reportable Event" shall mean any of the events set forth in
----------------
Section 4043(c) of ERISA, other than those events as to which the thirty-day
notice period is waived under PBGC Reg. Section 4043.
"Required Lenders" shall mean Lenders, other than Defaulting
----------------
Lenders, which are then in compliance with their obligations hereunder (as
determined by the Administrative Agent) holding in the aggregate greater
than 50% of (i) the Revolving Commitments (and Participation Interests
therein) or (ii) if the Revolving Commitments have been terminated, the
outstanding Competitive Loans, Revolving Loans and Participation Interests
(including the Participation Interests of the Issuing Lender in any Letters
of Credit and of the Swingline Lender in any Swingline Loans).
"Requirement of Law" shall mean, as to any Person, the Certificate
------------------
of Incorporation and By-laws or other organizational or governing documents
of such Person, and each law, treaty, rule or regulation or determination of
an arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its property or to which
such Person or any of its property is subject.
"Responsible Officer" shall mean, the President and Chief Executive
-------------------
Officer or the Vice President and Treasurer of the Borrower.
"Restricted Payment" shall have the meaning set forth in
------------------
Section 6.10.
"Revolving Commitment" shall mean, with respect to each Lender, the
--------------------
commitment of such Lender to make Revolving Loans in an aggregate principal
amount at any time outstanding
17
up to such Lender's Revolving Committed Amount as specified in Schedule 2.1(a),
---------------
as such amount may be reduced from time to time in accordance with
the provisions hereof.
"Revolving Commitment Percentage" shall mean, for each Lender, the
-------------------------------
percentage identified as its Revolving Commitment Percentage on Schedule 2.1(a),
---------------
as such percentage may be modified in connection with any assignment
made in accordance with the provisions of Section 9.6(c).
"Revolving Commitment Termination Date" shall mean July 30, 2004.
-------------------------------------
"Revolving Committed Amount" shall mean, collectively, the
--------------------------
aggregate amount of all Revolving Commitments as referenced in Section
2.1(a), as such amount may be reduced from time to time in accordance with
the provisions hereof, and, individually, the amount of each Lender's
Revolving Commitment as specified on Schedule 2.1(a).
---------------
"Revolving Loans" shall have the meaning set forth in Section 2.1.
---------------
"Revolving Note" or "Revolving Notes" shall mean the promissory
-------------- ---------------
notes of the Borrower in favor of each of the Lenders evidencing the
Revolving Loans provided pursuant to Section 2.1(e), individually or
collectively, as appropriate, as such promissory notes may be amended,
modified, supplemented, extended, renewed or replaced from time to time.
"S&P" shall mean Standard & Poor's Ratings Group, a division of
---
McGraw Hill, Inc.
"Sale Leaseback Transaction" means any direct or indirect
--------------------------
arrangement with any Person or to which any such Person is a party,
providing for the leasing to the Borrower of any Property, whether owned by
the Borrower as of the Closing Date or later acquired, which has been or is
to be sold or transferred by the Borrower to such Person or to any other
Person from whom funds have been, or are to be, advanced by such Person on
the security of such Property.
"Senior Notes" means those certain senior notes of the Borrower as
------------
referenced on Schedule 1.1(b).
---------------
"Single Employer Plan" shall mean any Plan which is not a
--------------------
Multiemployer Plan.
"Specified Sales" shall mean (a) the sale, transfer, lease or other
---------------
disposition of inventory and materials in the ordinary course of business
and (b) the sale, transfer or other disposition of cash and Cash
Equivalents, so long as the Borrower or the applicable Subsidiary receives,
in return, cash, Cash Equivalents or other property having a fair market
value equal to the fair market value of such Cash Equivalents.
"Subsidiary" shall mean, as to any Person, a corporation,
----------
partnership, limited liability company or other entity of which shares of
stock or other ownership interests having ordinary voting power (other than
stock or such other ownership interests having such power only by reason of
the happening of a contingency) to elect a majority of the board of
directors or other
18
managers of such corporation, partnership or other entity are at the time
owned, or the management of which is otherwise controlled, directly or
indirectly through one or more intermediaries, or both, by such Person.
Unless otherwise qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries
of the Borrower.
"Swingline Commitment" shall mean the commitment of the Swingline
--------------------
Lender to make Swingline Loans in an aggregate principal amount at any time
outstanding up to the Swingline Committed Amount, and the commitment of the
Lenders to purchase participation interests in the Swingline Loans as
provided in Section 2.3(b)(ii), as such amounts may be reduced from time to
time in accordance with the provisions hereof.
"Swingline Committed Amount" shall mean the amount of the Swingline
--------------------------
Lender's Swingline Commitment as specified in Section 2.3(a).
"Swingline Lender" shall mean First Union, in its capacity as such.
----------------
"Swingline Loan" or "Swingline Loans" shall have the meaning set
-------------- ---------------
forth in Section 2.3(a).
"Swingline Note" shall mean the promissory note of the Borrower in
--------------
favor of the Swingline Lender evidencing the Swingline Loans provided
pursuant to Section 2.3(d), as such promissory note may be amended,
modified, supplemented, extended, renewed or replaced from time to time.
"Taxes" shall have the meaning set forth in Section 2.18.
-----
"Tranche" shall mean the collective reference to LIBOR Rate Loans
-------
whose Interest Periods begin and end on the same day. A Tranche may
sometimes be referred to as a "LIBOR Tranche".
"Transfer Effective Date" shall have the meaning set forth in each
-----------------------
Commitment Transfer Supplement.
"2.18 Certificate" shall have the meaning set forth in Section 2.18.
----------------
"Type" shall mean, as to any Loan, its nature as an Alternate Base
----
Rate Loan, LIBOR Rate Loan or Swingline Loan, as the case may be.
"Utilization Fees" has the meaning set forth in Section 2.5(b).
----------------
"Utilized Revolving Commitment" means, for any day from the Closing
-----------------------------
Date to the Revolving Commitment Termination Date, an amount equal to the
outstanding aggregate principal amount of all Loans and undrawn Letters of
Credit.
19
"Voting Stock" means, with respect to any Person, Capital Stock
------------
issued by such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even though the right so to
vote has been suspended by the happening of such a contingency.
"Year 2000 Compliant" shall have the meaning set forth in
-------------------
Section 3.20.
"364-Day Credit Agreement" means that 364-Day Credit Agreement
------------------------
dated as of the date hereof, as amended and modified, among the Borrower,
the lenders identified therein and First Union National Bank, as
Administrative Agent.
SECTION 1.2 OTHER DEFINITIONAL PROVISIONS.
-----------------------------
(a) Unless otherwise specified therein, all terms defined
in this Agreement shall have the defined meanings when used in the
Notes or other Credit Documents or any certificate or other
document made or delivered pursuant hereto.
(b) The words "hereof", "herein" and "hereunder" and words
of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement, and Section, subsection, Schedule and Exhibit references
are to this Agreement unless otherwise specified.
(c) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such
terms.
SECTION 1.3 ACCOUNTING TERMS.
----------------
Unless otherwise specified herein, all accounting terms used herein
shall be interpreted, all accounting determinations hereunder shall be made,
and all financial statements required to be delivered hereunder shall be
prepared in accordance with GAAP applied on a basis consistent with the most
recent audited consolidated financial statements of the Borrower delivered
to the Lenders; provided that, if the Borrower notifies the Administrative
--------
Agent that it wishes to amend any covenant in Section 5.8 to eliminate the
effect of any change in GAAP on the operation of such covenant (or if the
Administrative Agent notifies the Borrower that the Required Lenders wish to
amend Section 5.8 for such purpose), then the Borrower's compliance with
such covenant shall be determined on the basis of GAAP in effect immediately
before the relevant change in GAAP became effective, until either such
notice is withdrawn or such covenant is amended in a manner satisfactory to
the Borrower and the Required Lenders.
The Borrower shall deliver to the Administrative Agent and each
Lender at the same time as the delivery of any annual or quarterly financial
statements given in accordance with the provisions of Section 5.1, (a) a
description in reasonable detail of any material change in the application
of accounting principles employed in the preparation of such financial
statements from those applied in the most recently preceding quarterly or
annual financial statements as to which no objection shall have been made in
accordance with the provisions above and (b) a
20
reasonable estimate of the effect on the financial statements on account of
such changes in application.
ARTICLE II
THE LOANS; AMOUNT AND TERMS
SECTION 2.1 REVOLVING LOANS.
---------------
(a) Revolving Commitment. During the Commitment Period,
--------------------
subject to the terms and conditions hereof, each Lender severally
agrees to make revolving credit loans ("Revolving Loans") to the
---------------
Borrower from time to time for the purposes hereinafter set forth;
provided, however, that (i) with regard to each Lender
-------- -------
individually, the sum of such Lender's share of outstanding
Revolving Loans plus such Lender's Revolving Commitment Percentage
----
of Swingline Loans plus such Lender's LOC Commitment Percentage of
----
LOC Obligations shall not exceed such Lender's Revolving Commitment
Percentage of the aggregate Revolving Committed Amount, and (ii)
with regard to the Lenders collectively, the sum of the aggregate
amount of outstanding Revolving Loans plus Swingline Loans plus LOC
---- ----
Obligations, plus Competitive Loans shall not exceed the Revolving
----
Committed Amount. For purposes hereof, the aggregate amount
available hereunder shall be TWO Hundred FIVE Million DOLLARS
($205,000,000) (as such aggregate maximum amount may be reduced
from time to time as provided in Section 2.6, the "Revolving
---------
Committed Amount"). Revolving Loans may consist of Alternate Base
----------------
Rate Loans or LIBOR Rate Loans, or a combination thereof, as the
Borrower may request, and may be repaid and reborrowed in
accordance with the provisions hereof. LIBOR Rate Loans shall be
made by each Lender at its LIBOR Lending Office and Alternate Base
Rate Loans at its Domestic Lending Office.
(b) Revolving Loan Borrowings.
-------------------------
(i) Notice of Borrowing. The Borrower shall
-------------------
request a Revolving Loan borrowing by written notice (or
telephone notice promptly confirmed in writing which
confirmation may be by fax) to the Administrative Agent
not later than 12:00 Noon (Charlotte, North Carolina time)
on the Business Day prior to the date of requested
borrowing in the case of Alternate Base Rate Loans, and on
the third Business Day prior to the date of the requested
borrowing in the case of LIBOR Rate Loans. Each such
request for borrowing shall be irrevocable and shall
specify (A) that a Revolving Loan is requested, (B) the
date of the requested borrowing (which shall be a Business
Day), (C) the aggregate principal amount to be borrowed,
(D) whether the borrowing shall be comprised of Alternate
Base Rate Loans, LIBOR Rate Loans or a combination
thereof, and if LIBOR Rate Loans are requested, the
Interest Period(s) therefor. A form of Notice of Borrowing
(a "Notice of Borrowing") is attached as Schedule 2.1(b)(i).
------------------- ------------------
If the Borrower shall fail to specify in any such
Notice of Borrowing (I) an applicable
21
Interest Period in the case of a LIBOR Rate Loan, then such
notice shall be deemed to be a request for an Interest Period
of one month, or (II) the Type of Revolving Loan requested,
then such notice shall be deemed to be a request for an
Alternate Base Rate Loan hereunder. The Administrative
Agent shall give notice to each Lender promptly upon
receipt of each Notice of Borrowing, the contents thereof
and each such Lender's share thereof. All Revolving Loans
made on the Closing Date shall bear interest at the
Alternate Base Rate until the earlier of (i) the
completion of the syndication of the Commitments to
financial institutions which shall become Lenders
hereunder or (ii) thirty days from the Closing Date.
(ii) Minimum Amounts. Each Revolving Loan
---------------
borrowing that is a LIBOR Rate Loan shall be in a minimum
aggregate amount of $5,000,000 and integral multiples of
$1,000,000 in excess thereof (or the remaining amount of
the Revolving Committed Amount, if less). Each Revolving
Loan borrowing that is a Alternate Base Rate Loan shall be
in a minimum aggregate amount of $1,000,000 and integral
multiples of $250,000 in excess thereof (or the remaining
amount of the Revolving Committed Amount, if less).
(iii) Advances. Each Lender will make its
--------
Revolving Commitment Percentage of each Revolving Loan
borrowing available to the Administrative Agent for the
account of the Borrower at the office of the
Administrative Agent specified in Schedule 9.2, or at such
------------
other office as the Administrative Agent may designate in
writing, by 1:00 P.M. (Charlotte, North Carolina time) on
the date specified in the applicable Notice of Borrowing
in Dollars and in funds immediately available to the
Administrative Agent. Such borrowing will then be made
available to the Borrower by the Administrative Agent by
crediting the account of the Borrower on the books of such
office with the aggregate of the amounts made available to
the Administrative Agent by the Lenders and in like funds
as received by the Administrative Agent.
(c) Repayment. The principal amount of all Revolving Loans
---------
shall be due and payable in full on the Revolving Commitment
Termination Date.
(d) Interest. Subject to the provisions of Section 2.9,
--------
Revolving Loans shall bear interest as follows:
(i) Alternate Base Rate Loans. During such
-------------------------
periods as Revolving Loans shall be comprised of Alternate
Base Rate Loans, each such Alternate Base Rate Loan shall
bear interest at a per annum rate equal to the sum of the
Alternate Base Rate plus the Applicable Margin; and
----
(ii) LIBOR Rate Loans. During such periods as
----------------
Revolving Loans shall be comprised of LIBOR Rate Loans,
each such LIBOR Rate Loan shall bear interest at a per
annum rate equal to the sum of the LIBOR Rate plus the
----
Applicable Margin.
22
Interest on Revolving Loans shall be payable in arrears on each
Interest Payment Date.
(e) Revolving Notes. Each Lender's Revolving Commitment
---------------
Percentage of the Revolving Loans shall be evidenced by a duly
executed promissory note of the Borrower to such Lender in
substantially the form of Schedule 2.1(e).
---------------
SECTION 2.2 COMPETITIVE LOAN SUBFACILITY.
----------------------------
(a) Competitive Loans. Subject to the terms and conditions
-----------------
hereof and in reliance upon the representations and warranties set
forth herein, the Borrower may, during the Commitment Period,
request and each Lender may, in its sole discretion, agree to make,
Competitive Loans to the Borrower; provided, however, that (i) with
-------- -------
regard to each Lender individually, the sum of such Lender's share
of outstanding Revolving Loans plus such Lender's Revolving
----
Commitment Percentage of Swingline Loans plus such Lender's LOC
----
Commitment Percentage of LOC Obligations shall not exceed such
Lender's Revolving Commitment Percentage of the aggregate Revolving
Committed Amount and (ii) with regard to the Lenders collectively,
the sum of the aggregate amount of outstanding Revolving Loans plus
----
Swingline Loans plus LOC Obligations plus Competitive Loans shall
---- ----
not exceed the Revolving Committed Amount. Each Competitive Loan
shall be not less than $5,000,000 in the aggregate and integral
multiples of $1,000,000 in excess thereof (or the remaining portion
of the Revolving Committed Amount, if less).
(b) Competitive Bid Requests. The Borrower may solicit
------------------------
Competitive Bids by delivery of a Competitive Bid Request
substantially in the form of Exhibit 2.2(b)-1 to the Administrative
----------------
Agent by 12:00 Noon (Charlotte, North Carolina time) on a Business
Day not less than three (3) Business Days prior to the date of a
requested Competitive Loan borrowing. A Competitive Bid Request
shall specify (i) the date of the requested Competitive Loan
borrowing (which shall be a Business Day), (ii) the amount of the
requested Competitive Loan borrowing and (iii) the applicable
Interest Periods requested. The Administrative Agent shall,
promptly following its receipt of a Competitive Bid Request under
this subsection (b), notify the affected Lenders of its receipt and
the contents thereof and invite the Lenders to submit Competitive
Bids in response thereto. A form of such notice is provided in
Exhibit 2.2(b)-2. No more than three (3) Competitive Bid Requests
----------------
(e.g., the Borrower may request Competitive Bids for no more than
three (3) different Interest Periods at a time) shall be submitted
at any one time and Competitive Bid Requests may be made no more
frequently than once every five (5) Business Days.
(c) Competitive Bid Procedure. Each Lender may, in its
-------------------------
sole discretion, make one or more Competitive Bids to the Borrower
in response to a Competitive Bid Request. Each Competitive Bid must
be received by the Administrative Agent not later than 10:00 A.M.
(Charlotte, North Carolina time) on the Business Day next
succeeding the date of receipt by the Administrative Agent of the
related Competitive Bid Request. A Lender may offer to make all or
part of the requested Competitive Loan borrowing and may submit
multiple Competitive Bids in response to a Competitive Bid Request.
The Competitive Bid
23
shall specify (i) the particular Competitive Bid Request as to
which the Competitive Bid is submitted, (ii) the minimum (which
shall be not less than $1,000,000 and integral multiples of
$500,000 in excess thereof) and maximum principal amounts of the
requested Competitive Loan or Loans as to which the Lender is
willing to make, and (iii) the applicable interest rate or
rates and Interest Period or Periods therefor. A form of such
Competitive Bid is provided in Exhibit 2.2(c). A Competitive Bid
--------------
submitted by a Lender in accordance with the provisions hereof
shall be irrevocable. The Administrative Agent shall promptly
notify the Borrower of all Competitive Bids made and the terms
thereof. The Administrative Agent shall send a copy of each of the
Competitive Bids to the Borrower for its records as soon as
practicable.
(d) Submission of Competitive Bids by Administrative
------------------------------------------------
Agent. If the Administrative Agent, in its capacity as a Lender,
-----
elects to submit a Competitive Bid in response to any Competitive
Bid Request, it shall submit such Competitive Bid directly to the
Borrower one-half of an hour earlier than the latest time at which
the other Lenders are required to submit their Competitive Bids to
the Administrative Agent in response to such Competitive Bid
Request pursuant to subsection (c) above.
(e) Acceptance of Competitive Bids. The Borrower may, in
------------------------------
its sole and absolute discretion, subject only to the provisions of
this subsection (e), accept or refuse any Competitive Bid offered
to it. To accept a Competitive Bid, the Borrower shall give written
notification (or telephonic notice promptly confirmed in writing)
substantially in the form of Exhibit 2.2(e) of its acceptance of
--------------
any or all such Competitive Bids to the Administrative Agent by
11:00 A.M.. (Charlotte, North Carolina time) on the date on which
notice of election to make a Competitive Bid is to be given to the
Administrative Agent by the Lenders; provided, however, (i) the
-------- -------
failure by the Borrower to give timely notice of its acceptance of
a Competitive Bid shall be deemed to be a refusal thereof, (ii) the
Borrower may accept Competitive Bids only in ascending order of
rates, (iii) the aggregate amount of Competitive Bids accepted by
the Borrower shall not exceed the principal amount specified in the
Competitive Bid Request, (iv) the Borrower may accept a portion of
a Competitive Bid in the event, and to the extent, acceptance of
the entire amount thereof would cause the Borrower to exceed the
principal amount specified in the Competitive Bid Request, subject
however to the minimum amounts provided herein (and provided that
where two or more Lenders submit such a Competitive Bid at the same
Competitive Bid Rate, then pro rata between or among such Lenders)
and (v) no bid shall be accepted for a Competitive Loan unless such
Competitive Loan is in a minimum principal amount of $1,000,000 and
integral multiples of $500,000 in excess thereof, except that where
a portion of a Competitive Bid is accepted in accordance with the
provisions of subsection (iv) hereof, then in a minimum principal
amount of $500,000 and integral multiples of $100,000 in excess
thereof (but not in any event less than the minimum amount
specified in the Competitive Bid), and in calculating the pro rata
allocation of acceptances of portions of multiple bids at a
particular Competitive Bid Rate pursuant to subsection (iv) hereof,
the amounts shall be rounded to integral multiples of $100,000 in a
manner which shall be in the discretion of the Borrower. A notice
of acceptance of a Competitive Bid given by the Borrower in
accordance with the provisions hereof shall be irrevocable. The
Administrative Agent shall, not later than 12:00
24
Noon (Charlotte, North Carolina time) on the date of receipt by the
Administrative Agent of a notification from the Borrower of its
acceptance and/or refusal of Competitive Bids, notify each affected
Lender of its receipt and the contents thereof. Upon its receipt from
the Administrative Agent of notification of the Borrower's acceptance
of its Competitive Bid in accordance with the terms of this
subsection (e), each successful bidding Lender will thereupon
become bound, subject to the other applicable conditions hereof, to
make the Competitive Loan in respect of which its bid has been
accepted.
(f) Funding of Competitive Loans. Each Lender which is to
----------------------------
make a Competitive Loan shall make its Competitive Loan borrowing
available to the Administrative Agent for the account of the
Borrower at the office of the Administrative Agent specified in
Schedule 9.2, or at such other office as the Administrative Agent
------------
may designate in writing, by 1:30 P.M. (Charlotte, North Carolina
time) on the date specified in the Competitive Bid Request in funds
immediately available to the Administrative Agent. Such borrowing
will then be made available to the Borrower by crediting the
account of the Borrower on the books of such office with the
aggregate of the amount made available to the Administrative Agent
by the applicable Competitive Loan Lenders and in like funds as
received by the Administrative Agent.
(g) Maturity of Competitive Loans. Each Competitive Loan
-----------------------------
shall mature and be due and payable in full on the last day of the
Interest Period applicable thereto, unless accelerated sooner
pursuant to Section 7.2. Unless the Borrower shall give notice to
the Administrative Agent otherwise, the Borrower shall be deemed to
have requested a Revolving Loan borrowing in the amount of the
maturing Competitive Loan, the proceeds of which will be used to
repay such Competitive Loan.
(h) Interest on Competitive Loans. Subject to the
-----------------------------
provisions of Section 2.9, Competitive Loans shall bear interest in
each case at the Competitive Bid Rate applicable thereto. Interest
on Competitive Loans shall be payable in arrears on each Interest
Payment Date.
(i) Competitive Loan Notes. The Competitive Loans made by
----------------------
each Lender shall be evidenced by a duly executed promissory note
of the Borrower to such Lender in substantially the form of
Schedule 2.2(i).
---------------
SECTION 2.3 SWINGLINE LOAN SUBFACILITY.
--------------------------
(a) Swingline Commitment. During the Commitment Period,
--------------------
subject to the terms and conditions hereof, the Swingline Lender,
in its individual capacity, agrees to make certain revolving credit
loans to the Borrower (each a "Swingline Loan" and, collectively,
--------------
the "Swingline Loans") for the purposes hereinafter set forth;
---------------
provided, however, (i) the aggregate amount of Swingline Loans
-------- -------
outstanding at any time shall not exceed TWENTY FIVE MILLION
DOLLARS ($25,000,000) (the "Swingline Committed Amount"), and (ii)
--------------------------
the sum of the aggregate amount of outstanding Revolving Loans plus
----
Swingline Loans plus LOC Obligations plus Competitive Loans shall
---- ----
not
25
exceed the Revolving Committed Amount. Swingline Loans
hereunder may be repaid and reborrowed in accordance with the
provisions hereof.
(b) Swingline Loan Borrowings.
-------------------------
(i) Notice of Borrowing and Disbursement. The
------------------------------------
Swingline Lender will make Swingline Loans available to
the Borrower on any Business Day upon request made by the
Borrower not later than 12:00 Noon (Charlotte, North
Carolina time) on such Business Day. A notice of request
for Swingline Loan borrowing shall be made in the form of
Schedule 2.1(b)(i) with appropriate modifications.
------------------
Swingline Loan borrowings hereunder shall be made in
minimum amounts of $100,000 and in integral amounts of
$100,000 in excess thereof.
(ii) Repayment of Swingline Loans. Each Swingline
----------------------------
Loan borrowing shall be due and payable on the Revolving
Commitment Termination Date. The Swingline Lender may, at
any time, in its sole discretion, by written notice to the
Borrower and the Administrative Agent, demand repayment of
its Swingline Loans by way of a Revolving Loan borrowing,
in which case the Borrower shall be deemed to have
requested a Revolving Loan borrowing comprised entirely of
Alternate Base Rate Loans in the amount of such Swingline
Loans; provided, however, that, in the following
-------- -------
circumstances, any such demand shall also be deemed to
have been given one Business Day prior to each of (A) the
Revolving Commitment Termination Date, (B) the occurrence
of any Event of Default described in Section 7.1(e), (C)
upon acceleration of the Borrower Obligations hereunder,
whether on account of an Event of Default described in
Section 7.1(e) or any other Event of Default and (D) the
exercise of remedies in accordance with the provisions of
Section 7.2 hereof (each such Revolving Loan borrowing
made on account of any such deemed request therefor as
provided herein being hereinafter referred to as a
"Mandatory Borrowing"). Each Lender hereby irrevocably
-------------------
agrees to make such Revolving Loans promptly upon any such
request or deemed request on account of each Mandatory
Borrowing in the amount and in the manner specified in the
preceding sentence and on the same such date
notwithstanding (A) the amount of Mandatory Borrowing may
---------------
not comply with the minimum amount for borrowings of
Revolving Loans otherwise required hereunder, (B) whether
any conditions specified in Section 4.2 are then
satisfied, (C) whether a Default or an Event of Default
then exists, (D) failure of any such request or deemed
request for Revolving Loans to be made by the time
otherwise required in Section 2.1(b)(i), (E) the date of
such Mandatory Borrowing, or (F) any reduction in the
Revolving Committed Amount or termination of the Revolving
Commitments immediately prior to such Mandatory Borrowing
or contemporaneously therewith. In the event that any
Mandatory Borrowing cannot for any reason be made on the
date otherwise required above (including, without
limitation, as a result of the commencement of a
proceeding under the Bankruptcy Code with respect to the
Borrower), then each Lender hereby agrees that it shall
forthwith purchase (as of the date the Mandatory Borrowing
would otherwise
26
have occurred, but adjusted for any payments received from
the Borrower on or after such date and prior to such
purchase) from the Swingline Lender such participations in
the outstanding Swingline Loans as shall be necessary to
cause each such Lender to share in such Swingline Loans
ratably based upon its respective Revolving Commitment
Percentage (determined before giving effect to any
termination of the Commitments pursuant to Section 7.2),
provided that (A) all interest payable on the Swingline
--------
Loans shall be for the account of the Swingline Lender
until the date as of which the respective participation is
purchased, and (B) at the time any purchase of
participations pursuant to this sentence is actually made,
the purchasing Lender shall be required to pay to the
Swingline Lender interest on the principal amount of such
participation purchased for each day from and including the
day upon which the Mandatory Borrowing would otherwise have
occurred to but excluding the date of payment for such
participation, at the rate equal to, if paid within two (2)
Business Days of the date of the Mandatory Borrowing, the
Federal Funds Effective Rate, and thereafter at a rate
equal to the Alternate Base Rate.
(c) Interest on Swingline Loans. Subject to the provisions
---------------------------
of Section 2.9, Swingline Loans shall bear interest at a per annum
rate equal to the Alternate Base Rate plus the Applicable Margin
----
for Revolving Loans that are Alternate Base Rate Loans. Interest on
Swingline Loans shall be payable in arrears on each Interest
Payment Date.
(d) Swingline Note. The Swingline Loans shall be evidenced
--------------
by a duly executed promissory note of the Borrower to the Swingline
Lender in the original amount of the Swingline Committed Amount and
substantially in the form of Schedule 2.3(d).
---------------
SECTION 2.4 LETTER OF CREDIT SUBFACILITY.
----------------------------
(a) Issuance. Subject to the terms and conditions hereof
--------
and of the LOC Documents, if any, and any other terms and
conditions which the Issuing Lender may reasonably require, during
the Commitment Period the Issuing Lender shall issue, and the
Lenders shall participate in, Letters of Credit for the account of
the Borrower from time to time upon request in a form acceptable to
the Issuing Lender; provided, however, that (i) the aggregate
-------- -------
amount of LOC Obligations shall not at any time exceed FIVE MILLION
DOLLARS ($5,000,000) (the "LOC Committed Amount"), (ii) the sum of
--------------------
the aggregate amount of Revolving Loans plus Swingline Loans plus
---- ----
LOC Obligations plus Competitive Loans shall not at any time exceed
----
the Revolving Committed Amount, (iii) all Letters of Credit shall
be denominated in U.S. Dollars and (iv) Letters of Credit shall be
issued for lawful corporate purposes and may be issued as standby
letters of credit, including in connection with workers'
compensation and other insurance programs, and trade letters of
credit. Except as otherwise expressly agreed upon by all the
Lenders, no Letter of Credit shall have an original expiry date
more than twelve (12) months from the date of issuance; provided,
--------
however, so long as no Default or Event of Default has occurred and
-------
is continuing and subject to the other terms and conditions to the
issuance of Letters of Credit hereunder, the expiry dates of
Letters of Credit may be extended
27
annually or periodically from time to time on the request of the
Borrower or by operation of the terms of the applicable Letter of
Credit to a date not more than twelve (12) months from the date of
extension; provided, further, that no Letter of Credit, as
-------- -------
originally issued or as extended, shall have an expiry date
extending beyond the Revolving Commitment Termination Date. Each
Letter of Credit shall comply with the related LOC Documents. The
issuance and expiry date of each Letter of Credit shall be a
Business Day. Any Letters of Credit issued hereunder shall be in a
minimum original face amount of $150,000. First Union shall be the
Issuing Lender on all Letters of Credit issued after the Closing
Date.
(b) Notice and Reports. The request for the issuance of a
------------------
Letter of Credit shall be submitted to the Issuing Lender at least
five (5) Business Days prior to the requested date of issuance. The
Issuing Lender will promptly upon request provide to the
Administrative Agent for dissemination to the Lenders a detailed
report specifying the Letters of Credit which are then issued and
outstanding and any activity with respect thereto which may have
occurred since the date of any prior report, and including therein,
among other things, the account party, the beneficiary, the face
amount, expiry date as well as any payments or expirations which
may have occurred. The Issuing Lender will further provide to the
Administrative Agent promptly upon request copies of the Letters of
Credit. The Issuing Lender will provide to the Administrative Agent
promptly upon request a summary report of the nature and extent of
LOC Obligations then outstanding.
(c) Participations. Each Lender upon issuance of a Letter
--------------
of Credit shall be deemed to have purchased without recourse a risk
participation from the Issuing Lender in such Letter of Credit and
the obligations arising thereunder and any collateral relating
thereto, in each case in an amount equal to its LOC Commitment
Percentage of the obligations under such Letter of Credit and shall
absolutely, unconditionally and irrevocably assume, as primary
obligor and not as surety, and be obligated to pay to the Issuing
Lender therefor and discharge when due, its LOC Commitment
Percentage of the obligations arising under such Letter of Credit.
Without limiting the scope and nature of each Lender's
participation in any Letter of Credit, to the extent that the
Issuing Lender has not been reimbursed as required hereunder or
under any LOC Document, each such Lender shall pay to the Issuing
Lender its LOC Commitment Percentage of such unreimbursed drawing
in same day funds on the day of notification by the Issuing Lender
of an unreimbursed drawing pursuant to the provisions of subsection
(d) hereof. The obligation of each Lender to so reimburse the
Issuing Lender shall be absolute and unconditional and shall not be
affected by the occurrence of a Default, an Event of Default or any
other occurrence or event. Any such reimbursement shall not relieve
or otherwise impair the obligation of the Borrower to reimburse the
Issuing Lender under any Letter of Credit, together with interest
as hereinafter provided.
(d) Reimbursement. In the event of any drawing under any
-------------
Letter of Credit, the Issuing Lender will promptly notify the
Borrower and the Administrative Agent. The Borrower shall reimburse
the Issuing Lender on the day of drawing under any Letter of Credit
(either with the proceeds of a Swingline Loan or Revolving Loan
obtained
28
hereunder or otherwise) in same day funds as provided herein or in
the LOC Documents. If the Borrower shall fail to reimburse the
Issuing Lender as provided herein, the unreimbursed amount of such
drawing shall bear interest at a per annum rate equal to the
Alternate Base Rate plus two percent (2%). Unless the Borrower
shall immediately notify the Issuing Lender and the Administrative
Agent of its intent to otherwise reimburse the Issuing Lender, the
Borrower shall be deemed to have requested a Swingline Loan, or if
and to the extent Swingline Loans shall not be available, a
Revolving Loan in the amount of the drawing as provided in
subsection (e) hereof, the proceeds of which will be used to
satisfy the reimbursement obligations. The Borrower's reimbursement
obligations hereunder shall be absolute and unconditional under all
circumstances irrespective of any rights of set-off, counterclaim
or defense to payment the Borrower may claim or have against the
Issuing Lender, the Administrative Agent, the Lenders, the
beneficiary of the Letter of Credit drawn upon or any other Person,
including without limitation any defense based on any failure of
the Borrower to receive consideration or the legality, validity,
regularity or unenforceability of the Letter of Credit. The Issuing
Lender will promptly notify the other Lenders of the amount of any
unreimbursed drawing and each Lender shall promptly pay to the
Administrative Agent for the account of the Issuing Lender in
Dollars and in immediately available funds, the amount of such
Lender's LOC Commitment Percentage of such unreimbursed drawing.
Such payment shall be made on the day such notice is received by
such Lender from the Issuing Lender if such notice is received at
or before 2:00 P.M. (Charlotte, North Carolina time), otherwise
such payment shall be made at or before 12:00 Noon (Charlotte,
North Carolina time) on the Business Day next succeeding the day
such notice is received. If such Lender does not pay such amount to
the Issuing Lender in full upon such request, such Lender shall, on
demand, pay to the Administrative Agent for the account of the
Issuing Lender interest on the unpaid amount during the period from
the date of such drawing until such Lender pays such amount to the
Issuing Lender in full at a rate per annum equal to, if paid within
two (2) Business Days of the date of drawing, the Federal Funds
Effective Rate and thereafter at a rate equal to the Alternate Base
Rate. Each Lender's obligation to make such payment to the Issuing
Lender, and the right of the Issuing Lender to receive the same,
shall be absolute and unconditional, shall not be affected by any
circumstance whatsoever and without regard to the termination of
this Agreement or the Commitments hereunder, the existence of a
Default or Event of Default or the acceleration of the Borrower
Obligations hereunder and shall be made without any offset,
abatement, withholding or reduction whatsoever.
(e) Repayment with Revolving Loans. On any day on which
------------------------------
the Borrower shall have requested, or been deemed to have
requested, (i) a Swingline Loan borrowing to reimburse a drawing
under a Letter of Credit, the Swingline Lender shall make the
Swingline Loan advance pursuant to the terms of the request or
deemed request in accordance with the provisions for Swingline Loan
advances hereunder, or (ii) a Revolving Loan to reimburse a drawing
under a Letter of Credit, the Administrative Agent shall give
notice to the Lenders that a Revolving Loan has been requested or
deemed requested in connection with a drawing under a Letter of
Credit, in which case a Revolving Loan borrowing comprised entirely
of Alternate Base Rate Loans (each such
29
borrowing, a "Mandatory Borrowing") shall be immediately made
-------------------
(without giving effect to any termination of the Commitments
pursuant to Section 7.2) pro rata based on each Lender's respective
--- ----
Revolving Commitment Percentage (determined before giving effect to
any termination of the Commitments pursuant to Section 7.2) and in
the case of both clauses (i) and (ii) the proceeds thereof shall be
paid directly to the Issuing Lender for application to the
respective LOC Obligations. Each Lender hereby irrevocably agrees
to make such Revolving Loans immediately upon any such request or
deemed request on account of each Mandatory Borrowing in the amount
and in the manner specified in the preceding sentence and on the
same such date notwithstanding (i) the amount of Mandatory
---------------
Borrowing may not comply with the minimum amount for borrowings of
Revolving Loans otherwise required hereunder, (ii) whether any
conditions specified in Section 4.2 are then satisfied, (iii)
whether a Default or an Event of Default then exists, (iv) failure
for any such request or deemed request for Revolving Loan to be
made by the time otherwise required in Section 2.1(b), (v) the date
of such Mandatory Borrowing, or (vi) any reduction in the Revolving
Committed Amount after any such Letter of Credit may have been
drawn upon. In the event that any Mandatory Borrowing cannot for
any reason be made on the date otherwise required above (including,
without limitation, as a result of the commencement of a proceeding
under the Bankruptcy Code with respect to the Borrower), then each
such Lender hereby agrees that it shall forthwith fund (as of the
date the Mandatory Borrowing would otherwise have occurred, but
adjusted for any payments received from the Borrower on or after
such date and prior to such purchase) its Participation Interests
in the outstanding LOC Obligations; provided, further, that in the
-------- -------
event any Lender shall fail to fund its Participation Interest on
the day the Mandatory Borrowing would otherwise have occurred, then
the amount of such Lender's unfunded Participation Interest therein
shall bear interest payable to the Issuing Lender upon demand, at
the rate equal to, if paid within two (2) Business Days of such
date, the Federal Funds Effective Rate, and thereafter at a rate
equal to the Alternate Base Rate.
(f) Modification, Extension. The issuance of any
-----------------------
supplement, modification, amendment, renewal, or extension to any
Letter of Credit shall, for purposes hereof, be treated in all
respects the same as the issuance of a new Letter of Credit
hereunder.
(g) Uniform Customs and Practices. The Issuing Lender
-----------------------------
shall have the Letters of Credit be subject to The Uniform Customs
and Practice for Documentary Credits, as published as of the date
of issue by the International Chamber of Commerce (the "UCP"), in
---
which case the UCP may be incorporated therein and deemed in all
respects to be a part thereof.
SECTION 2.5 FEES.
----
(a) Facility Fee. In consideration of the Revolving
------------
Commitment, the Borrower agrees to pay to the Administrative Agent
for the ratable benefit of the Lenders a facility fee (the
"Facility Fee") in an amount equal to the Applicable Margin per
------------
annum on the average daily aggregate Revolving Committed Amount.
The Facility Fee shall be
30
payable quarterly in arrears on the 15th day following the last day
of each calendar quarter for the prior calendar quarter.
(b) Utilization Fees.
----------------
(i) If on any day the Utilized Revolving
Commitment hereunder together with the "Utilized Revolving
Commitment" under the 364-Day Credit Agreement, (as such
term is defined therein) exceeds the product of (A)
one-half (1/2) times (B) the Revolving Committed Amount
-----
hereunder plus the Revolving Committed Amount under the
----
364-Day Credit Agreement, the Borrower agrees to pay to
the Administrative Agent, for the pro rata benefit of each
Lender, a per annum fee equal to 12.5 basis points on the
Utilized Revolving Commitment (the "Utilization Fees").
----------------
(ii) The accrued Utilization Fees shall be due
and payable in arrears fifteen days after the end of each
fiscal quarter of the Borrower (as well as on the
Revolving Commitment Termination Date) for the immediately
preceding fiscal quarter (or portion thereof), beginning
with the first of such dates to occur after the Closing
Date.
(c) Letter of Credit Fees. In consideration of the LOC
---------------------
Commitments, the Borrower agrees to pay to the Issuing Lender a fee
(the "Letter of Credit Fee") equal to the Applicable Margin per
--------------------
annum on the average daily maximum amount available to be drawn
under each Letter of Credit from the date of issuance to the date
of expiration. In addition to such Letter of Credit Fee, the
Issuing Lender may charge, and retain for its own account without
sharing by the other Lenders, an additional facing fee of
one-eighth of one percent (1/8%) per annum on the average daily
maximum amount available to be drawn under each such Letter of
Credit issued by it. The Issuing Lender shall promptly pay over to
the Administrative Agent for the ratable benefit of the Lenders
(including the Issuing Lender) the Letter of Credit Fee. The Letter
of Credit Fee shall be payable quarterly in arrears on the 15th day
following the last day of each calendar quarter for the prior
calendar quarter.
(d) Issuing Lender Fees. In addition to the Letter of
-------------------
Credit Fees payable pursuant to subsection (b) hereof, the Borrower
shall pay to the Issuing Lender for its own account without sharing
by the other Lenders the reasonable and customary charges from time
to time of the Issuing Lender with respect to the amendment,
transfer, administration, cancellation and conversion of, and
drawings under, such Letters of Credit (collectively, the "Issuing
-------
Lender Fees").
-----------
SECTION 2.6 COMMITMENT REDUCTIONS.
---------------------
(a) Voluntary Reductions. The Borrower shall have the
--------------------
right to terminate or permanently reduce the unused portion of the
Revolving Committed Amount at any time or from time to time upon
not less than five Business Days' prior notice to the
31
Administrative Agent (which shall notify the Lenders thereof as
soon as practicable) of each such termination or reduction, which
notice shall specify the effective date thereof and the amount of
any such reduction which shall be in a minimum amount of $5,000,000
or a whole multiple of $1,000,000 in excess thereof and shall be
irrevocable and effective upon receipt by the Administrative Agent,
provided that no such reduction or termination shall be permitted
--------
if after giving effect thereto, and to any prepayments of the
Revolving Loans made on the effective date thereof, the sum of the
then outstanding aggregate principal amount of the Revolving Loans
plus Swingline Loans plus LOC Obligations plus Competitive Loans
---- ---- ----
would exceed the Revolving Committed Amount.
(b) Revolving Commitment Termination Date. The Revolving
-------------------------------------
Commitment, the LOC Commitment and the Swingline Commitment shall
automatically terminate on the Revolving Commitment Termination
Date.
SECTION 2.7 PREPAYMENTS.
-----------
(a) Optional Prepayments. The Borrower shall have the
--------------------
right to prepay Revolving Loans, Swingline Loans and, with the
consent of the applicable Competitive Loan Lender or Lenders,
Competitive Loans, in whole or in part from time to time; provided,
--------
however, that each partial prepayment of Revolving Loans shall be
-------
in a minimum principal amount of $1,000,000 and integral multiples
of $100,000 in excess thereof and each prepayment of Swingline
Loans shall be in a minimum principal amount of $100,000 and
integral multiples of $100,000 in excess thereof. The Borrower
shall give three Business Days' irrevocable notice in the case of
LIBOR Rate Loans and Competitive Loans and one Business Day's
irrevocable notice in the case of Alternate Base Rate Loans, to the
Administrative Agent (which shall notify the Lenders thereof as
soon as practicable).
(b) Mandatory Prepayments. If at any time, the aggregate
---------------------
principal amount of Loans and LOC Obligations shall exceed the
Revolving Committed Amount, the Borrower shall immediately make
payment on the Loans in an amount sufficient to eliminate the
deficiency.
(c) Application. Unless otherwise specified by the
-----------
Borrower, prepayments made hereunder shall be applied first to
Revolving Loans which are Base Rate Loans, then to Revolving Loans
which are LIBOR Rate Loans in direct order of Interest Period
maturities and then to Competitive Loans in direct order of
Interest Period maturities. All prepayments under Section 2.7(a)
and 2.7(b) shall be subject to Section 2.17, but otherwise without
premium or penalty. Interest on the principal amount prepaid shall
be payable on the next occurring Interest Payment Date that would
have occurred had such loan not been prepaid or, at the request of
the Administrative Agent, interest on the principal amount prepaid
shall be payable on any date that a prepayment is made hereunder
through the date of prepayment. Amounts prepaid on the Swingline
Loan and the Revolving Loans may be reborrowed in accordance with
the terms hereof.
32
SECTION 2.8 MINIMUM PRINCIPAL AMOUNT OF TRANCHES.
------------------------------------
All borrowings, payments and prepayments in respect of Revolving
Loans shall be in such amounts and be made pursuant to such elections so
that after giving effect thereto the aggregate principal amount of the
Revolving Loans comprising any Tranche shall not be less than $5,000,000 or
a whole multiple of $1,000,000 in excess thereof.
SECTION 2.9 DEFAULT RATE AND PAYMENT DATES.
------------------------------
Upon the occurrence, and during the continuance, of an Event of
Default, the principal of and, to the extent permitted by law, interest on
the Loans and any other amounts owing hereunder or under the other Credit
Documents shall bear interest, payable on demand, at a per annum rate 2%
greater than the rate which would otherwise be applicable (or if no rate is
applicable, whether in respect of interest, fees or other amounts, then the
Alternate Base Rate plus 2%).
----
SECTION 2.10 CONVERSION OPTIONS.
------------------
(a) The Borrower may, in the case of Revolving Loans elect
from time to time to convert Alternate Base Rate Loans to LIBOR
Rate Loans, by giving the Administrative Agent at least three
Business Days' prior irrevocable written notice of such election. A
form of Notice of Conversion/Extension is attached as Schedule 2.10.
-------------
If the date upon which an Alternate Base Rate Loan is to be
converted to a LIBOR Rate Loan is not a Business Day, then such
conversion shall be made on the next succeeding Business Day and
during the period from such last day of an Interest Period to such
succeeding Business Day such Loan shall bear interest as if it were
an Alternate Base Rate Loan. All or any part of outstanding
Alternate Base Rate Loans may be converted as provided herein,
provided that (i) no Loan may be converted into a LIBOR Rate Loan
--------
when any Default or Event of Default has occurred and is continuing
and (ii) partial conversions shall be in an aggregate principal
amount of $5,000,000 or a whole multiple of $1,000,000 in excess
thereof.
(b) Any LIBOR Rate Loans may be continued as such upon the
expiration of an Interest Period with respect thereto by compliance
by the Borrower with the notice provisions contained in Section
2.10(a); provided, that no LIBOR Rate Loan may be continued as such
--------
when any Default or Event of Default has occurred and is
continuing, in which case such Loan shall be automatically
converted to an Alternate Base Rate Loan at the end of the
applicable Interest Period with respect thereto. If the Borrower
shall fail to give timely notice of an election to continue a LIBOR
Rate Loan, or the continuation of LIBOR Rate Loans is not permitted
hereunder, such LIBOR Rate Loans shall be automatically converted
to Alternate Base Rate Loans at the end of the applicable Interest
Period with respect thereto.
33
SECTION 2.11 COMPUTATION OF INTEREST AND FEES.
--------------------------------
(a) Interest payable hereunder with respect to Alternate
Base Rate Loans shall be calculated on the basis of a year of 365
days (or 366 days, as applicable) for the actual days elapsed. All
other fees, interest and all other amounts payable hereunder shall
be calculated on the basis of a 360 day year for the actual days
elapsed. The Administrative Agent shall as soon as practicable
notify the Borrower and the Lenders of each determination of a
LIBOR Rate on the Business Day of the determination thereof. Any
change in the interest rate on a Loan resulting from a change in
the Alternate Base Rate shall become effective as of the opening of
business on the day on which such change in the Alternate Base Rate
shall become effective. The Administrative Agent shall as soon as
practicable notify the Borrower and the Lenders of the effective
date and the amount of each such change.
(b) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement
shall be conclusive and binding on the Borrower and the Lenders in
the absence of manifest error. The Administrative Agent shall, at
the request of the Borrower, deliver to the Borrower a statement
showing the computations used by the Administrative Agent in
determining any interest rate.
SECTION 2.12 PRO RATA TREATMENT AND PAYMENTS.
-------------------------------
Each borrowing of Revolving Loans and any reduction of the
Revolving Commitments shall be made pro rata according to the respective
--- ----
Commitment Percentages of the Lenders. Each payment under this Agreement or
any Note shall be applied, first, to any fees then due and owing by the
Borrower pursuant to Section 2.5, second, to interest then due and owing in
respect of the Notes of the Borrower and, third, to principal then due and
owing hereunder and under the Notes of the Borrower. Each payment on account
of any fees pursuant to Section 2.5 shall be made pro rata in accordance
--- ----
with the respective amounts due and owing (except as to the portion of the
Letter of Credit retained by the Issuing Lender and the Issuing Lender
Fees). Each optional prepayment on account of principal of the Loans shall
be applied, to such of the Loans as the Borrower may designate (to be
applied pro rata among the Lenders); provided, that prepayments made
--- ---- --------
pursuant to Section 2.15 shall be applied in accordance with such section.
Each mandatory prepayment on account of principal of the Loans shall be
applied in accordance with Section 2.7(b). With respect to Competitive
Loans, if the Borrower fails to specify the particular Competitive Loan or
Loans as to which any payment or other amount should be applied and it is
not otherwise clear as to the particular Competitive Loan or Loans to which
such payment or other amounts relate, or any such payment or other amount is
to be applied to Competitive Loans without regard to any such direction by
the Borrower, then each payment or prepayment of principal on Competitive
Loans and each payment of interest or other amount on or in respect of
Competitive Loans, shall be allocated pro rata among the relevant
Competitive Loan Lenders in accordance with the then outstanding amounts of
their respective Competitive Loans. All payments (including prepayments) to
be made by the Borrower on account of principal, interest and fees shall be
made without defense, set-off or counterclaim (except as provided in Section
2.18(b)) and shall be made to the Administrative Agent for the account of
the Lenders at the
34
Administrative Agent's office specified on Schedule 9.2 in Dollars and in
------------
immediately available funds not later than 1:00 P.M. (Charlotte, North
Carolina time) on the date when due. The Administrative Agent shall
distribute such payments to the Lenders entitled thereto promptly upon
receipt in like funds as received. If any payment hereunder (other than
payments on the LIBOR Rate Loans) becomes due and payable on a day other
than a Business Day, such payment shall be extended to the next succeeding
Business Day, and, with respect to payments of principal, interest thereon
shall be payable at the then applicable rate during such extension. If any
payment on a LIBOR Rate Loan becomes due and payable on a day other than a
Business Day, the maturity thereof shall be extended to the next succeeding
Business Day unless the result of such extension would be to extend such
payment into another calendar month, in which event such payment shall be
made on the immediately preceding Business Day.
SECTION 2.13 NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE AGENT.
------------------------------------------------
(a) Unless the Administrative Agent shall have been
notified in writing by a Lender prior to the date a Loan is to be
made by such Lender (which notice shall be effective upon receipt)
that such Lender does not intend to make the proceeds of such Loan
available to the Administrative Agent, the Administrative Agent may
assume that such Lender has made such proceeds available to the
Administrative Agent on such date, and the Administrative Agent may
in reliance upon such assumption (but shall not be required to)
make available to the Borrower a corresponding amount. If such
corresponding amount is not in fact made available to the
Administrative Agent, the Administrative Agent shall be able to
recover such corresponding amount from such Lender. If such Lender
does not pay such corresponding amount forthwith upon the
Administrative Agent's demand therefor, the Administrative Agent
will promptly notify the Borrower, and the Borrower shall
immediately pay such corresponding amount to the Administrative
Agent. The Administrative Agent shall also be entitled to recover
from the Lender or the Borrower, as the case may be, interest on
such corresponding amount in respect of each day from the date such
corresponding amount was made available by the Administrative Agent
to the Borrower to the date such corresponding amount is recovered
by the Administrative Agent at a per annum rate equal to (i) from
the Borrower at the applicable rate for the applicable borrowing
pursuant to the Notice of Borrowing and (ii) from a Lender at the
Federal Funds Effective Rate.
(b) Unless the Administrative Agent shall have been
notified in writing by the Borrower, prior to the date on which any
payment is due from it hereunder (which notice shall be effective
upon receipt) that the Borrower does not intend to make such
payment, the Administrative Agent may assume that such Borrower has
made such payment when due, and the Administrative Agent may in
reliance upon such assumption (but shall not be required to) make
available to each Lender on such payment date an amount equal to
the portion of such assumed payment to which such Lender is
entitled hereunder, and if the Borrower has not in fact made such
payment to the Administrative Agent, such Lender shall, on demand,
repay to the Administrative Agent the amount made available to such
Lender. If such amount is repaid to the Administrative Agent on a
date after the date such amount was made available to such Lender,
such Lender shall pay to the
35
Administrative Agent on demand interest on such amount in respect
of each day from the date such amount was made available by the
Administrative Agent to such Lender to the date such amount is
recovered by the Administrative Agent at a per annum rate equal to
the Federal Funds Effective Rate.
(c) A certificate of the Administrative Agent submitted to
the Borrower or any Lender with respect to any amount owing under
this Section 2.13 shall be conclusive in the absence of manifest
error.
SECTION 2.14 INABILITY TO DETERMINE INTEREST RATE.
------------------------------------
Notwithstanding any other provision of this Agreement, if (a) the
Administrative Agent shall reasonably determine (which determination shall
be conclusive and binding absent manifest error) that, by reason of
circumstances affecting the relevant market, reasonable and adequate means
do not exist for ascertaining LIBOR for such Interest Period, or (b) the
Required Lenders shall reasonably determine (which determination shall be
conclusive and binding absent manifest error) that the LIBOR Rate does not
adequately and fairly reflect the cost to such Lenders of funding LIBOR Rate
Loans that the Borrower has requested be outstanding as a LIBOR Rate Loan
during such Interest Period, the Administrative Agent shall forthwith give
telephone notice of such determination, confirmed in writing, to the
Borrower, and the Lenders at least two Business Days prior to the first day
of such Interest Period. Unless the Borrower shall have notified the
Administrative Agent upon receipt of such telephone notice that it wishes to
rescind or modify its request regarding such LIBOR Rate Loans, any Loans
that were requested to be made as LIBOR Rate Loans shall be made as
Alternate Base Rate Loans and any Loans that were requested to be converted
into or continued as LIBOR Rate Loans shall be converted into Alternate Base
Rate Loans. Until any such notice has been withdrawn by the Administrative
Agent, no further Loans shall be made as, continued as, or converted into,
LIBOR Rate Loans for the Interest Periods so affected.
SECTION 2.15 ILLEGALITY.
----------
Notwithstanding any other provision of this Agreement, if the
adoption of or any change in any Requirement of Law or in the interpretation
or application thereof by the relevant Governmental Authority to any Lender
shall make it unlawful for such Lender or its LIBOR Lending Office to make
or maintain LIBOR Rate Loans as contemplated by this Agreement or to obtain
in the interbank eurodollar market through its LIBOR Lending Office the
funds with which to make such Loans, (a) such Lender shall promptly notify
the Administrative Agent and the Borrower thereof, (b) the commitment of
such Lender hereunder to make LIBOR Rate Loans or continue LIBOR Rate Loans
as such shall forthwith be suspended until the Administrative Agent shall
give notice that the condition or situation which gave rise to the
suspension shall no longer exist, and (c) such Lender's Loans then
outstanding as LIBOR Rate Loans, if any, shall be converted on the last day
of the Interest Period for such Loans or within such earlier period as
required by law as Alternate Base Rate Loans. The Borrower hereby agrees
promptly to pay any Lender, upon its demand, any additional amounts
necessary to compensate such Lender for actual and direct costs (but not
including anticipated profits) reasonably incurred by such Lender in
36
making any repayment in accordance with this Section including, but not
limited to, any interest or fees payable by such Lender to lenders of funds
obtained by it in order to make or maintain its LIBOR Rate Loans hereunder.
A certificate as to any additional amounts payable pursuant to this Section
submitted by such Lender, through the Administrative Agent, to the Borrower
shall be conclusive in the absence of manifest error. Each Lender agrees to
use reasonable efforts (including reasonable efforts to change its LIBOR
Lending Office) to avoid or to minimize any amounts which may otherwise be
payable pursuant to this Section; provided, however, that such efforts shall
-------- -------
not cause the imposition on such Lender of any additional costs or legal or
regulatory burdens deemed by such Lender in its sole discretion to be
material.
SECTION 2.16 REQUIREMENTS OF LAW.
-------------------
(a) If the adoption of or any change in any Requirement of
Law or in the interpretation or application thereof or compliance
by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental
Authority made subsequent to the date hereof:
(i) shall subject such Lender to any tax of any
kind whatsoever with respect to any Letter of Credit or
any application relating thereto, any LIBOR Rate Loan made
by it, or change the basis of taxation of payments to such
Lender in respect thereof (except for changes in the rate
of tax on the overall net income of such Lender);
(ii) shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar
requirement against assets held by, deposits or other
liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of
funds by, any office of such Lender which is not otherwise
included in the determination of the LIBOR Rate hereunder;
or
(iii) shall impose on such Lender any other
condition;
and the result of any of the foregoing is to increase the cost to
such Lender of making or maintaining LIBOR Rate Loans or the
Letters of Credit or to reduce any amount receivable hereunder or
under any Note, then, in any such case, the Borrower shall promptly
pay such Lender, upon its demand, any additional amounts necessary
to compensate such Lender for such additional cost or reduced
amount receivable which such Lender reasonably deems to be material
as determined by such Lender with respect to its LIBOR Rate Loans
or Letters of Credit. A certificate as to any additional amounts
payable pursuant to this Section submitted by such Lender, through
the Administrative Agent, to the Borrower shall be conclusive in
the absence of manifest error. Each Lender agrees to use reasonable
efforts (including reasonable efforts to change its Domestic
Lending Office or LIBOR Lending Office, as the case may be) to
avoid or to minimize any amounts which might otherwise be payable
pursuant to this paragraph of this Section; provided, however, that
-------- -------
such efforts shall not cause the imposition on such Lender of any
additional costs or legal or regulatory burdens deemed by such
Lender to be material.
37
(b) If any Lender shall have reasonably determined that
the adoption of or any change in any Requirement of Law regarding
capital adequacy or in the interpretation or application thereof or
compliance by such Lender or any corporation controlling such
Lender with any request or directive regarding capital adequacy
(whether or not having the force of law) from any central bank or
Governmental Authority made subsequent to the date hereof does or
shall have the effect of reducing the rate of return on such
Lender's or such corporation's capital as a consequence of its
obligations hereunder to a level below that which such Lender or
such corporation could have achieved but for such adoption, change
or compliance (taking into consideration such Lender's or such
corporation's policies with respect to capital adequacy) by an
amount reasonably deemed by such Lender to be material, then from
time to time, within fifteen (15) days after demand by such Lender,
the Borrower shall pay to such Lender such additional amount as
shall be certified by such Lender as being required to compensate
it for such reduction. Such a certificate as to any additional
amounts payable under this Section submitted by a Lender (which
certificate shall include a description of the basis for the
computation), through the Administrative Agent, to the Borrower
shall be conclusive absent manifest error.
(c) The agreements in this Section 2.16 shall survive the
termination of this Agreement and payment of the Notes and all
other amounts payable hereunder.
SECTION 2.17 INDEMNITY.
---------
The Borrower hereby agrees to indemnify each Lender and to hold
such Lender harmless from any funding loss or expense which such Lender may
sustain or incur as a consequence of (a) default by the Borrower in payment
of the principal amount of or interest on any Loan by such Lender in
accordance with the terms hereof, (b) default by the Borrower in accepting a
borrowing after the Borrower has given a notice in accordance with the terms
hereof, (c) default by the Borrower in making any prepayment after the
Borrower has given a notice in accordance with the terms hereof, and/or (d)
the making by the Borrower of a prepayment of a Loan, or the conversion
thereof, on a day which is not the last day of the Interest Period with
respect thereto, in each case including, but not limited to, any such loss
or expense arising from interest or fees payable by such Lender to lenders
of funds obtained by it in order to maintain its Loans hereunder. A
certificate as to any additional amounts payable pursuant to this Section
submitted by any Lender, through the Administrative Agent, to the Borrower
(which certificate must be delivered to the Administrative Agent within
thirty days following such default, prepayment or conversion) shall be
conclusive in the absence of manifest error. The agreements in this Section
shall survive termination of this Agreement and payment of the Notes and all
other amounts payable hereunder.
SECTION 2.18 TAXES.
-----
(a) All payments made by the Borrower hereunder or under
any Note will be, except as provided in Section 2.18(b), made free
and clear of, and without deduction or
38
withholding for, any present or future taxes, levies, imposts,
duties, fees, assessments or other charges of whatever nature now
or hereafter imposed by any Governmental Authority or by any
political subdivision or taxing authority thereof or therein with
respect to such payments (but excluding any tax imposed on or
measured by the net income or profits of a Lender pursuant to the
laws of the jurisdiction in which it is organized or the
jurisdiction in which the principal office or applicable lending
office of such Lender is located or any subdivision thereof or
therein) and all interest, penalties or similar liabilities with
respect thereto (all such non-excluded taxes, levies, imposts,
duties, fees, assessments or other charges being referred to
collectively as "Taxes"). If any Taxes are so levied or imposed,
-----
the Borrower agrees to pay the full amount of such Taxes, and such
additional amounts as may be necessary so that every payment of all
amounts due under this Agreement or under any Note, after
withholding or deduction for or on account of any Taxes, will not
be less than the amount provided for herein or in such Note. The
Borrower will furnish to the Administrative Agent, upon written
request of the Administrative Agent, as soon as practicable after
the date the payment of any Taxes is due pursuant to applicable law
certified copies (to the extent reasonably available and required
by law) of tax receipts evidencing such payment by the Borrower.
The Borrower agrees to indemnify and hold harmless each Lender, and
reimburse such Lender upon its written request, for the amount of
any Taxes so levied or imposed and paid by such Lender.
(b) Each Lender that is not a United States person (as
such term is defined in Section 7701(a)(30) of the Code) agrees to
deliver to the Borrower and the Administrative Agent on or prior to
the Closing Date, or in the case of a Lender that is an assignee or
transferee of an interest under this Agreement pursuant to Section
9.6(d) (unless the respective Lender was already a Lender hereunder
immediately prior to such assignment or transfer), on the date of
such assignment or transfer to such Lender, (i) if the Lender is a
"bank" within the meaning of Section 881(c)(3)(A) of the Code, two
accurate and complete original signed copies of Internal Revenue
Service Form 4224 or 1001 (or successor forms) certifying such
Lender's entitlement to a complete exemption from United States
withholding tax with respect to payments to be made under this
Agreement and under any Note, or (ii) if the Lender is not a "bank"
within the meaning of Section 881(c)(3)(A) of the Code, either
Internal Revenue Service Form 1001 or 4224 as set forth in clause
(i) above, or (x) a certificate substantially in the form of
Schedule 2.18 (any such certificate, a "2.18 Certificate") and (y)
------------- ----------------
two accurate and complete original signed copies of Internal
Revenue Service Form W-8 (or successor form) certifying such
Lender's entitlement to an exemption from United States withholding
tax with respect to payments of interest to be made under this
Agreement and under any Note. In addition, each Lender agrees that
it will deliver upon the Borrower's request updated versions of the
foregoing, as applicable, whenever the previous certification has
become obsolete or inaccurate in any material respect, together
with such other forms as may be required in order to confirm or
establish the entitlement of such Lender to a continued exemption
from or reduction in United States withholding tax with respect to
payments under this Agreement and any Note. Notwithstanding
anything to the contrary contained in Section 2.18(a), but subject
to the immediately succeeding sentence, (x) the Borrower shall be
39
entitled, to the extent it is required to do so by law, to deduct
or withhold Taxes imposed by the United States (or any political
subdivision or taxing authority thereof or therein) from interest,
fees or other amounts payable hereunder for the account of any
Lender which is not a United States person (as such term is defined
in Section 7701(a)(30) of the Code) for U.S. Federal income tax
purposes to the extent that such Lender has not provided to the
Borrower U.S. Internal Revenue Service Forms that establish a
complete exemption from such deduction or withholding and (y) the
Borrower shall not be obligated pursuant to Section 2.18(a) hereof
to gross-up payments to be made to a Lender in respect of Taxes
imposed by the United States if (I) such Lender has not provided to
the Borrower the Internal Revenue Service Forms required to be
provided to the Borrower pursuant to this Section 2.18(b) or (II)
in the case of a payment, other than interest, to a Lender
described in clause (ii) above, to the extent that such Forms do
not establish a complete exemption from withholding of such Taxes.
Notwithstanding anything to the contrary contained in the preceding
sentence or elsewhere in this Section 2.18, the Borrower agrees to
pay additional amounts and to indemnify each Lender in the manner
set forth in Section 2.18(a) (without regard to the identity of the
jurisdiction requiring the deduction or withholding) in respect of
any amounts deducted or withheld by it as described in the
immediately preceding sentence as a result of any changes after the
Closing Date in any applicable law, treaty, governmental rule,
regulation, guideline or order, or in the interpretation thereof,
relating to the deducting or withholding of Taxes.
(c) Each Lender agrees to use reasonable efforts
(including reasonable efforts to change its Domestic Lending Office
or LIBOR Lending Office, as the case may be) to avoid or to
minimize any amounts which might otherwise be payable pursuant to
this Section; provided, however, that such efforts shall not cause
-------- -------
the imposition on such Lender of any additional costs or legal or
regulatory burdens deemed by such Lender in its sole discretion to
be material.
(d) If the Borrower pays any additional amount pursuant to
this Section 2.18 with respect to a Lender, such Lender shall use
reasonable efforts to obtain a refund of tax or credit against its
tax liabilities on account of such payment; provided that such
--------
Lender shall have no obligation to use such reasonable efforts if
either (i) it is in an excess foreign tax credit position or (ii)
it believes in good faith, in its sole discretion, that claiming a
refund or credit would cause adverse tax consequences to it. In the
event that such Lender receives such a refund or credit, such
Lender shall pay to the Borrower an amount that such Lender
reasonably determines is equal to the net tax benefit obtained by
such Lender as a result of such payment by the Borrower. In the
event that no refund or credit is obtained with respect to the
Borrower's payments to such Lender pursuant to this Section 2.18,
then such Lender shall upon request provide a certification that
such Lender has not received a refund or credit for such payments.
Nothing contained in this Section 2.18 shall require a Lender to
disclose or detail the basis of its calculation of the amount of
any tax benefit or any other amount or the basis of its
determination referred to in the proviso to the first sentence of
this Section 2.18 to the Borrower or any other party.
40
(e) The agreements in this Section 2.18 shall survive the
termination of this Agreement and the payment of the Notes and all
other amounts payable hereunder.
SECTION 2.19 INDEMNIFICATION; NATURE OF ISSUING LENDER'S DUTIES.
--------------------------------------------------
(a) In addition to its other obligations under Section
2.4, the Borrower hereby agrees to protect, indemnify, pay and save
the Issuing Lender harmless from and against any and all claims,
demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable attorneys' fees) that the Issuing Lender may
incur or be subject to as a consequence, direct or indirect, of (i)
the issuance of any Letter of Credit or (ii) the failure of the
Issuing Lender to honor a drawing under a Letter of Credit as a
result of any act or omission, whether rightful or wrongful, of any
present or future de jure or de facto government or governmental
authority (all such acts or omissions, herein called "Government
----------
Acts").
----
(b) As between the Borrower and the Issuing Lender, the
Borrower shall assume all risks of the acts, omissions or misuse of
any Letter of Credit by the beneficiary thereof. The Issuing Lender
shall not be responsible: (i) for the form, validity, sufficiency,
accuracy, genuineness or legal effect of any document submitted by
any party in connection with the application for and issuance of
any Letter of Credit, even if it should in fact prove to be in any
or all respects invalid, insufficient, inaccurate, fraudulent or
forged; (ii) for the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign any
Letter of Credit or the rights or benefits thereunder or proceeds
thereof, in whole or in part, that may prove to be invalid or
ineffective for any reason; (iii) for failure of the beneficiary of
a Letter of Credit to comply fully with conditions required in
order to draw upon a Letter of Credit; (iv) for errors, omissions,
interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise, whether or
not they be in cipher; (v) for errors in interpretation of
technical terms; (vi) for any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under
a Letter of Credit or of the proceeds thereof; and (vii) for any
consequences arising from causes beyond the control of the Issuing
Lender, including, without limitation, any Government Acts. None of
the above shall affect, impair, or prevent the vesting of the
Issuing Lender's rights or powers hereunder.
(c) In furtherance and extension and not in limitation of
the specific provisions hereinabove set forth, any action taken or
omitted by the Issuing Lender, under or in connection with any
Letter of Credit or the related certificates, if taken or omitted
in good faith, shall not put such Issuing Lender under any
resulting liability to the Borrower. It is the intention of the
parties that this Agreement shall be construed and applied to
protect and indemnify the Issuing Lender against any and all risks
involved in the issuance of the Letters of Credit, all of which
risks are hereby assumed by the Borrower, including, without
limitation, any and all risks of the acts or omissions, whether
rightful or wrongful, of any Government Authority. The Issuing
Lender shall not, in any way, be liable for any failure by the
Issuing Lender or anyone else to pay any drawing under any
41
Letter of Credit as a result of any Government Acts or any other
cause beyond the control of the Issuing Lender.
(d) Nothing in this Section 2.19 is intended to limit the
reimbursement obligation of the Borrower contained in Section
2.4(d) hereof. The obligations of the Borrower under this Section
2.19 shall survive the termination of this Agreement. No act or
omissions of any current or prior beneficiary of a Letter of Credit
shall in any way affect or impair the rights of the Issuing Lender
to enforce any right, power or benefit under this Agreement.
(e) Notwithstanding anything to the contrary contained in
this Section 2.19, the Borrower shall have no obligation to
indemnify any Issuing Lender in respect of any liability incurred
by such Issuing Lender arising out of the gross negligence or
willful misconduct of the Issuing Lender (including action not
taken by an Issuing Lender), as determined by a court of competent
jurisdiction.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Agreement and to make the
Extensions of Credit herein provided for, the Borrower hereby represents and
warrants to the Administrative Agent and to each Lender that:
SECTION 3.1 FINANCIAL CONDITION.
-------------------
Borrower and its Subsidiaries on a consolidated basis as of such
dates. All such financial statements, including the related schedules and
notes thereto, have been prepared in accordance with GAAP applied
consistently throughout the periods involved (except as disclosed therein).
SECTION 3.2 NO CHANGE.
---------
Since December 31, 1998 (and after delivery of annual audited
financial statements in accordance with Section 5.1(a), from the date of the
most recently delivered annual audited financial statements) there has been
no development or event which has had or could reasonably be expected to
have a Material Adverse Effect.
SECTION 3.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW.
----------------------------------------
Each of the Borrower and its Subsidiaries (a) is duly organized,
validly existing and in good standing under the laws of the jurisdiction of
its organization, (b) has the requisite power
42
and authority and the legal right to own and operate all its material
property, to lease the material property it operates as lessee and to
conduct the business in which it is currently engaged, (c) is duly qualified
to conduct business and in good standing under the laws of each jurisdiction
where its ownership, lease or operation of property or the conduct of its
business requires such qualification except to the extent that the failure
to so qualify or be in good standing could not, in the aggregate, reasonably
be expected to have a Material Adverse Effect and (d) is in compliance with
all Requirements of Law (including without limitation, environmental laws),
except to the extent that the failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
SECTION 3.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.
-------------------------------------------------------
The Borrower has the full power and authority and the legal right
to make, deliver and perform the Credit Documents to which it is party and
has taken all necessary limited liability company or corporate action to
authorize the execution, delivery and performance by it of the Credit
Documents to which it is party. No consent or authorization of, filing with,
notice to or other act by or in respect of, any Governmental Authority or
any other Person is required in connection with the borrowings hereunder or
with the execution, delivery or performance of any Credit Document by the
Borrower (other than those which have been obtained) or with the validity or
enforceability of any Credit Document against the Borrower. Each Credit
Document to which it is a party has been duly executed and delivered on
behalf of the Borrower. Each Credit Document to which it is a party
constitutes a legal, valid and binding obligation of the Borrower,
enforceable against the Borrower in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
SECTION 3.5 NO LEGAL BAR; NO DEFAULT.
------------------------
The execution, delivery and performance of the Credit Documents,
the borrowings thereunder and the use of the proceeds of the Loans will not
violate any Requirement of Law or any Contractual Obligation of the Borrower
or its Subsidiaries (except those as to which waivers or consents have been
obtained), and will not result in, or require, the creation or imposition of
any Lien on any of its or their respective properties or revenues pursuant
to any Requirement of Law or Contractual Obligation other than any Liens
arising under or contemplated in connection with the Credit Documents.
Neither the Borrower nor any of its Subsidiaries is in default under or with
respect to any of its Contractual Obligations in any respect which could
reasonably be expected to have a Material Adverse Effect. No Default or
Event of Default has occurred and is continuing.
SECTION 3.6 NO MATERIAL LITIGATION.
----------------------
Except as set forth in Schedule 3.6, no litigation, investigation
------------
or proceeding (including without limitation, any environmental proceeding)
of or before any arbitrator or Governmental Authority is pending or, to the
best knowledge of the Borrower, threatened by or against the
43
Borrower or any of its Subsidiaries or against any of its or their
respective properties or revenues (a) with respect to the Credit Documents
or any Loan or any of the transactions contemplated hereby, or (b) which, if
adversely determined, could reasonably be expected to have a Material
Adverse Effect.
SECTION 3.7 INVESTMENT COMPANY ACT.
----------------------
The Borrower is not an "investment company", or a company
"controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended.
SECTION 3.8 MARGIN REGULATIONS.
------------------
No part of the proceeds of any Loan hereunder will be used directly
or indirectly for any purpose which violates, or which would be inconsistent
with, the provisions of Regulation T, U or X of the Board of Governors of
the Federal Reserve System as now and from time to time hereafter in effect.
The Borrower and its Subsidiaries taken as a group do not own "margin stock"
except as identified in the financial statements referred to in Section 3.1
and the aggregate value of all "margin stock" owned by the Borrower and its
Subsidiaries taken as a group does not exceed 25% of the value of their
assets.
SECTION 3.9 ERISA.
-----
Except as set forth in Schedule 3.9, neither a Reportable Event nor
------------
an "accumulated funding deficiency" (within the meaning of Section 412 of
the Code or Section 302 of ERISA) has occurred during the five-year period
prior to the date on which this representation is made or deemed made with
respect to any Plan, and each Plan has complied in all material respects
with the applicable provisions of ERISA and the Code, except to the extent
that any such occurrence or failure to comply would not reasonably be
expected to have a Material Adverse Effect. No termination of a Single
Employer Plan has occurred resulting in any liability that has remained
underfunded, and no Lien in favor of the PBGC or a Plan has arisen, during
such five-year period which could reasonably be expected to have a Material
Adverse Effect. The present value of all accrued benefits under each Single
Employer Plan (based on those assumptions used to fund such Plans) did not,
as of the last annual valuation date prior to the date on which this
representation is made or deemed made, exceed the value of the assets of
such Plan allocable to such accrued benefits by an amount which, as
determined in accordance with GAAP, could reasonably be expected to have a
Material Adverse Effect. Neither the Borrower nor any Commonly Controlled
Entity is currently subject to any liability for a complete or partial
withdrawal from a Multiemployer Plan which could reasonably be expected to
have a Material Adverse Effect.
SECTION 3.10 PURPOSE OF LOANS.
----------------
The proceeds of the Loans hereunder shall be used solely by the
Borrower to (a) refinance existing Indebtedness of the Borrower and to pay
certain fees and expenses related thereto, and (b)
44
provide for working capital and other general corporate purposes, including
commercial paper back-up. The Letters of Credit shall be used only for or in
connection with appeal bonds, reimbursement obligations arising in
connection with surety and reclamation bonds, reinsurance, domestic or
international trade transactions and obligations not otherwise
aforementioned relating to transactions entered into by the applicable
account party in the ordinary course of business.
SECTION 3.11 SUBSIDIARIES.
------------
Set forth on Schedule 3.11 is a complete and accurate list of all
-------------
Subsidiaries of the Borrower. Information on the attached Schedule includes
state of incorporation and the percentage of outstanding shares of each
class of stock owned by the Borrower.
SECTION 3.12 OWNERSHIP.
---------
Each of the Borrower and its Subsidiaries is the owner of, and has
good and marketable title to, all of its respective assets, except as may be
permitted pursuant Section 6.13 hereof, and none of such assets is subject
to any Lien other than Permitted Liens.
SECTION 3.13 INDEBTEDNESS.
------------
Except as otherwise permitted under Section 6.1, the Borrower and
its Subsidiaries have no Indebtedness.
SECTION 3.14 TAXES.
-----
Each of the Borrower and its Subsidiaries has filed, or caused to
be filed, all tax returns (federal, state, local and foreign) required to be
filed and paid (a) all amounts of taxes shown thereon to be due (including
interest and penalties) and (b) all other taxes, fees, assessments and other
governmental charges (including mortgage recording taxes, documentary stamp
taxes and intangibles taxes) owing by it, except for such taxes (i) which
are not yet delinquent or (ii) that are being contested in good faith and by
proper proceedings, and against which adequate reserves are being maintained
in accordance with GAAP. Neither the Borrower nor any of its Subsidiaries is
aware as of the Closing Date of any proposed tax assessments against it or
any of its Subsidiaries which could reasonably be expected to have a
Material Adverse Effect.
SECTION 3.15 INVESTMENTS.
-----------
All Investments of each of the Borrower and its Subsidiaries are
Permitted Investments.
SECTION 3.16 NO BURDENSOME RESTRICTIONS.
--------------------------
None of the Borrower or any of its Subsidiaries is a party to any
agreement or instrument or subject to any other obligation or any charter or
corporate restriction or any provision of any applicable law, rule or
regulation which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
45
SECTION 3.17 BROKERS' FEES.
-------------
None of the Borrower or any of its Subsidiaries has any obligation
to any Person in respect of any finder's, broker's, investment banking or
other similar fee in connection with any of the transactions contemplated
under the Credit Documents other than the closing and other fees payable
pursuant to this Credit Agreement.
SECTION 3.18 LABOR MATTERS.
-------------
There are no collective bargaining agreements or Multiemployer
Plans covering the employees of the Borrower or any of its Subsidiaries as
of the Closing Date, other than as set forth in Schedule 3.18 hereto.
-------------
Neither the Borrower nor any of its Subsidiaries (a) has suffered any
strikes, walkouts, work stoppages or other material labor difficulty within
the last five years, other than as set forth in Schedule 3.18 hereto or (b)
-------------
has knowledge of any potential or pending strike, walkout or work stoppage
which could be reasonably expected to have a Material Adverse Effect.
SECTION 3.19 ACCURACY AND COMPLETENESS OF INFORMATION.
----------------------------------------
All factual information heretofore, contemporaneously or hereafter
furnished by or on behalf of the Borrower or any of its Subsidiaries to the
Administrative Agent or any Lender for purposes of or in connection with
this Agreement or any other Credit Document, or any transaction contemplated
hereby or thereby, is or will be true and accurate in all material respects
and not incomplete by omitting to state any material fact necessary to make
such information not misleading. There is no fact now known to the Borrower
or any of its Subsidiaries which has, or could reasonably be expected to
have, a Material Adverse Effect which fact has not been set forth herein, in
the financial statements of the Borrower and its Subsidiaries furnished to
the Administrative Agent and/or the Lenders, or in any certificate, opinion
or other written statement made or furnished by the Borrower to the
Administrative Agent and/or the Lenders.
SECTION 3.20 YEAR 2000 ISSUE.
---------------
Any reprogramming and related testing required to permit the proper
functioning of the Borrower's and its Subsidiaries' computer systems in and
following the year 2000 will be completed in all material respects prior to
September 1, 1999 (that is, the Borrower will be "Year 2000 Compliant"), and
the cost to the Borrower and its Subsidiaries of such reprogramming and
testing will not result in a Default or Event of Default or a Material
Adverse Effect. Except for such reprogramming referred to in the preceding
sentence as may be necessary, the computer and management information
systems of the Borrower and its Subsidiaries are and, with ordinary course
upgrading and maintenance, will continue for the term of this Agreement to
be, adequate for the conduct of its business.
46
ARTICLE IV
CONDITIONS PRECEDENT
SECTION 4.1 CONDITIONS TO CLOSING DATE AND INITIAL REVOLVING LOANS.
------------------------------------------------------
This Agreement shall become effective upon, and the obligation of
each Lender to make the initial Revolving Loans on the Closing Date is
subject to, the satisfaction of the following conditions precedent:
(a) Execution of Agreement. The Administrative Agent shall
----------------------
have received (i) counterparts of this Agreement, executed by a
duly authorized officer of each party hereto, (ii) for the account
of each Lender, Revolving Notes and Competitive Loan Notes and for
the account of the Swingline Lender, a Swingline Note and (iii) an
executed copy of the 364-Day Credit Agreement and documentation
related thereto.
(b) Authority Documents. The Administrative Agent shall
-------------------
have received the following:
(i) Articles of Incorporation. Copies of the
-------------------------
articles of incorporation or other charter documents, as
applicable, of the Borrower certified to be true and
complete as of a recent date by the appropriate
governmental authority of the state of its incorporation.
(ii) Resolutions. Copies of resolutions of the
-----------
board of directors of the Borrower approving and adopting
the Credit Documents, the transactions contemplated
therein and authorizing execution and delivery thereof,
certified by an officer of the Borrower as of the Closing
Date to be true and correct and in force and effect as of
such date.
(iii) Bylaws. A copy of the bylaws of the
------
Borrower certified by an officer of the Borrower as of the
Closing Date to be true and correct and in force and
effect as of such date.
(iv) Good Standing. Copies of (A) certificates of
-------------
good standing, existence or its equivalent with respect to
the Borrower certified as of a recent date by the
appropriate governmental authorities of the state of
incorporation and each other state in which the failure to
so qualify and be in good standing could reasonably be
expected to have a Material Adverse Effect on the business
or operations of the Borrower and its Subsidiaries in such
state and (B) a certificate indicating payment of all
corporate franchise taxes certified as of a recent date by
the appropriate governmental taxing authorities.
(v) Incumbency. An incumbency certificate of the
----------
Borrower certified by a secretary or assistant secretary
to be true and correct as of the Closing Date.
47
(c) Legal Opinions of Counsel. The Administrative Agent
-------------------------
shall have received an opinion of ▇▇▇▇▇ ▇▇▇▇ LLP and the General
Counsel of the Borrower, dated the Closing Date and addressed to
the Administrative Agent and the Lenders, in form and substance
acceptable to the Administrative Agent.
(d) Fees and Expenses. The Administrative Agent shall have
-----------------
received all fees and expenses owed by the Borrower to the Lenders
and the Administrative Agent.
(e) Litigation. There shall not exist any pending
----------
litigation or investigation affecting or relating to the Borrower
or any of its Subsidiaries, this Agreement and the other Credit
Documents that in the reasonable judgment of the Administrative
Agent could materially adversely affect the Borrower or any of its
Subsidiaries, this Agreement and the other Credit Documents, that
has not been settled, dismissed, vacated, discharged or terminated
prior to the Closing Date.
(f) Corporate Structure. The corporate capital and
-------------------
ownership structure of the Borrower and its Subsidiaries shall be
as described in Schedule 3.11.
-------------
(g) Government Consent. The Administrative Agent shall
------------------
have received evidence that all governmental, shareholder and
material third party consents and approvals necessary in connection
with the financings and other transactions contemplated hereby have
been obtained and all applicable waiting periods have expired
without any action being taken by any authority that could
restrain, prevent or impose any material adverse conditions on such
transactions or that could seek or threaten any of the foregoing.
(h) Compliance with Laws. The financings and other
--------------------
transactions contemplated hereby shall be in compliance with all
applicable laws and regulations (including all applicable
securities and banking laws, rules and regulations).
(i) Bankruptcy. There shall be no bankruptcy or insolvency
----------
proceedings with respect to the Borrower or any of its
Subsidiaries.
(j) Financial Statements. The Administrative Agent shall
--------------------
have received copies of the financial statements referred to in
Section 3.1 hereof, each in form and substance satisfactory to it.
(k) Year 2000 Plan. The Administrative Agent shall have
--------------
received the Borrower's plan for becoming Year 2000 Compliant,
which plan shall be in form and substance satisfactory to the
Administrative Agent.
(l) Termination of Existing Indebtedness. All existing
------------------------------------
Indebtedness for borrowed money of the Borrower and its
Subsidiaries (other than the existing Senior
48
Notes and the Indebtedness listed on Schedule 6.1(b)) shall have
---------------
been repaid in full and terminated.
(m) Account Designation Letter. The Administrative Agent
--------------------------
shall have received the executed Account Designation Letter in the
form of Schedule 1.1(a) hereto.
---------------
(n) Additional Matters. All other documents and legal
------------------
matters in connection with the transactions contemplated by this
Agreement shall be reasonably satisfactory in form and substance to
the Administrative Agent and its counsel.
SECTION 4.2 CONDITIONS TO ALL EXTENSIONS OF CREDIT.
--------------------------------------
The obligation of each Lender to make any Extension of Credit
hereunder is subject to the satisfaction of the following conditions
precedent on the date of making such Extension of Credit:
(a) Representations and Warranties. The representations
------------------------------
and warranties made by the Borrower herein or which are contained
in any certificate furnished at any time under or in connection
herewith shall be true and correct in all material respects on and
as of the date of such Extension of Credit as if made on and as of
such date.
(b) No Default or Event of Default. No Default or Event of
------------------------------
Default shall have occurred and be continuing on such date or after
giving effect to the Extension of Credit to be made on such date
unless such Default or Event of Default shall have been waived in
accordance with this Agreement.
(c) Compliance with Commitments. Immediately after giving
---------------------------
effect to the making of any such Extension of Credit (and the
application of the proceeds thereof), (i) the sum of the aggregate
principal amount of outstanding Revolving Loans plus Swingline
----
Loans plus LOC Obligations plus Competitive Loans shall not exceed
---- ----
the Revolving Committed Amount, (ii) the LOC Obligations shall not
exceed the LOC Committed Amount and (iii) the Swingline Loans shall
not exceed the Swingline Commitment.
(d) Additional Conditions to Revolving Loans. If such Loan
----------------------------------------
is made pursuant to Section 2.1, all conditions set forth in such
Section shall have been satisfied.
(e) Additional Conditions to Competitive Loans. If a
------------------------------------------
Competitive Loan is made pursuant to Section 2.2, all conditions
set forth therein shall have been satisfied.
(f) Additional Conditions to Swingline Loan. If such Loan
---------------------------------------
is made pursuant to Section 2.3, all conditions set forth in such
Section shall have been satisfied.
49
(g) Additional Conditions to Letters of Credit. If such
------------------------------------------
Extension of Credit is made pursuant to Section 2.4, all conditions
set fort in such Section shall have been satisfied.
Each request for an Extension of Credit and each acceptance by the
Borrower of any such Extension of Credit shall be deemed to constitute a
representation and warranty by the Borrower as of the date of such Extension
of Credit that the applicable conditions in paragraphs (a) through (g) of
this Section have been satisfied.
ARTICLE V
AFFIRMATIVE COVENANTS
The Borrower hereby covenants and agrees that on the Closing Date,
and thereafter for so long as this Agreement is in effect and until the
Commitments have terminated, no Note remains outstanding and unpaid and the
Borrower Obligations, together with interest, Facility Fees and all other
amounts owing to the Administrative Agent or any Lender hereunder, are paid
in full, the Borrower shall, and shall cause each of its Subsidiaries (other
than in the case of Sections 5.1, 5.2 or 5.7 hereof), to:
SECTION 5.1 FINANCIAL STATEMENTS.
--------------------
Furnish to the Administrative Agent and each of the Lenders:
(a) Annual Financial Statements. As soon as available, but
---------------------------
in any event within one hundred and five (105) days after the end
of each fiscal year of the Borrower, a copy of the consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as
at the end of such fiscal year and the related consolidated
statements of income and retained earnings and of cash flows of the
Borrower and its consolidated Subsidiaries for such year, audited
by Ernst & Young, L.L.P., setting forth in each case in comparative
form the figures for the previous year, reported on without a
"going concern" or like qualification or exception, or
qualification indicating that the scope of the audit was inadequate
to permit such independent certified public accountants to certify
such financial statements without such qualification; and
(b) Quarterly Financial Statements. As soon as available
------------------------------
and in any event within forty-five (45) days after the end of each
of the first three fiscal quarters of the Borrower, a
company-prepared consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at the end of such period and related
company-prepared statements of income and retained earnings and of
cash flows for the Borrower and its consolidated Subsidiaries for
such quarterly period and for the portion of the fiscal year ending
with such period, in each case setting forth in comparative form
consolidated figures for the corresponding period or periods of the
preceding fiscal year (subject to normal recurring year-end audit
adjustments);
50
all such financial statements to be complete and correct in all material
respects and to be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and further
accompanied by a description of, and an estimation of the effect on the
financial statements on account of, a change, if any, in the application of
accounting principles as provided in Section 1.3.
SECTION 5.2 CERTIFICATES; OTHER INFORMATION.
-------------------------------
Furnish to the Administrative Agent and each of the Lenders:
(a) concurrently with the delivery of the financial
statements referred to in Section 5.1(a) above, a certificate of
the independent certified public accountants reporting on such
financial statements stating that in making the examination
necessary therefor no knowledge was obtained of any Default or
Event of Default, except as specified in such certificate;
(b) concurrently with the delivery of the financial
statements referred to in Sections 5.1(a) and 5.1(b) above, a
certificate of a Responsible Officer stating that, to the best of
such Responsible Officer's knowledge, the Borrower during such
period observed or performed in all material respects all of its
covenants and other agreements, and satisfied in all material
respects every condition, contained in this Agreement to be
observed, performed or satisfied by it, and that such Responsible
Officer has obtained no knowledge of any Default or Event of
Default except as specified in such certificate and such
certificate shall include the calculations in reasonable detail
required to indicate compliance with Section 5.8 as of the last day
of such period;
(c) within thirty (30) days after the same are sent,
copies of all reports (other than those otherwise provided pursuant
to Section 5.1 and those which are of a promotional nature) and
other financial information which the Borrower sends to its
stockholders, and within thirty days after the same are filed,
copies of all financial statements and non-confidential reports
which the Borrower may make to, or file with the Securities and
Exchange Commission or any successor or analogous Governmental
Authority;
(d) promptly upon receipt thereof, a copy of any other
report or "management letter" submitted by independent accountants
to the Borrower or any of its Subsidiaries in connection with any
annual, interim or special audit of the books of such Person; and
(e) promptly, such additional financial and other
information as the Administrative Agent, on behalf of any Lender,
may from time to time reasonably request.
51
SECTION 5.3 PAYMENT OF OBLIGATIONS.
----------------------
Pay, discharge or otherwise satisfy at or before maturity or before
they become delinquent, as the case may be, in accordance with industry
practice (subject, where applicable, to specified grace periods) all its
material obligations of whatever nature and any additional costs that are
imposed as a result of any failure to so pay, discharge or otherwise satisfy
such obligations, except when the amount or validity of such obligations and
costs is currently being contested in good faith by appropriate proceedings
and reserves, if applicable, in conformity with GAAP with respect thereto
have been provided on the books of the Borrower or its Subsidiaries, as the
case may be.
SECTION 5.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE.
------------------------------------------------
Continue to engage in business of the same general type as now
conducted by it on the Closing Date and preserve, renew and keep in full
force and effect its corporate existence and cooperative status and take all
reasonable action to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business; comply with
all Contractual Obligations and Requirements of Law applicable to it except
to the extent that failure to comply therewith could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.
SECTION 5.5 MAINTENANCE OF PROPERTY; INSURANCE.
----------------------------------
(a) Keep all material property useful and necessary in its
business in good working order and condition (ordinary wear and
tear and obsolescence excepted);
(b) Maintain with financially sound and reputable
insurance companies insurance on all its material property in at
least such amounts and against at least such risks as are usually
insured against in the same general area by companies engaged in
the same or a similar business (including, without limitation,
hazard and business interruption coverage); and furnish to the
Administrative Agent, upon written request, full information as to
the insurance carried; provided, however, that the Borrower and its
-------- -------
Subsidiaries may maintain self insurance plans to the extent
companies of similar size and in similar businesses do so.
SECTION 5.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS.
------------------------------------------------------
Keep proper books of records and account in which full, true and
correct entries in conformity with GAAP and all Requirements of Law shall be
made of all dealings and transactions in relation to its businesses and
activities; and permit, during regular business hours and upon reasonable
notice by the Administrative Agent or any Lender, the Administrative Agent
or any Lender to visit and inspect any of its properties and examine and
make abstracts from any of its books and records (other than materials
protected by the attorney-client privilege and materials which the Borrower
may not disclose without violation of a confidentiality obligation binding
upon it) at any reasonable time and as often as may reasonably be desired,
and to discuss the business, operations, properties and financial and other
condition of the Borrower and its
52
Subsidiaries with officers and employees of the Borrower and its
Subsidiaries and with its independent certified public accountants.
SECTION 5.7 NOTICES.
-------
Give notice in writing to the Administrative Agent (which shall
promptly transmit such notice to each Lender) of:
(a) within five Business Days after the Borrower knows or
has reason to know thereof, the occurrence of any Default or Event
of Default;
(b) promptly, any default or event of default under any
Contractual Obligation of the Borrower or any of its Subsidiaries
which could reasonably be expected to have a Material Adverse
Effect;
(c) promptly, any litigation, or any investigation or
proceeding known to the Borrower, affecting the Borrower or any of
its Subsidiaries which, if adversely determined, could reasonably
be expected to have a Material Adverse Effect;
(d) as soon as possible and in any event within thirty
(30) days after the Borrower knows or has reason to know thereof:
(i) the occurrence or expected occurrence of any Reportable Event
with respect to any Plan, a failure to make any required
contribution to a Plan, the creation of any Lien in favor of the
PBGC (other than a Permitted Lien) or a Plan or any withdrawal
from, or the termination, Reorganization or Insolvency of, any
Multiemployer Plan or (ii) the institution of proceedings or the
taking of any other action by the PBGC or the Borrower or any
Commonly Controlled Entity or any Multiemployer Plan with respect
to the withdrawal from, or the terminating, Reorganization or
Insolvency of, any Plan; and
(e) promptly, any other development or event which could
reasonably be expected to have a Material Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the Borrower proposes to take with respect
thereto. In the case of any notice of a Default or Event of Default, the
Borrower shall specify that such notice is a Default or Event of Default
notice on the face thereof.
SECTION 5.8 FINANCIAL COVENANTS.
-------------------
Commencing on the day immediately following the Closing Date, the
Borrower shall, and shall cause each of its Subsidiaries to, comply with the
following financial covenants:
(a) Leverage Ratio. The Leverage Ratio, as of the last day
--------------
of each fiscal quarter of the Borrower, shall be less than or equal
to 4.0 to 1.0.
53
(b) Interest Coverage Ratio. The Interest Coverage Ratio,
-----------------------
as of the last day of each fiscal quarter of the Borrower, shall be
greater than or equal to 2.5 to 1.0.
(c) Consolidated Tangible Net Worth. The Consolidated
-------------------------------
Tangible Net Worth shall not at any time be less than $273,103,000,
increased by the sum of (i) on a cumulative basis as of the end of
each fiscal quarter of the Borrower, commencing with the fiscal
quarter ending June 30, 1999, an amount equal to 50% of
Consolidated Net Income (to the extent positive) for the fiscal
quarter then ended plus (ii) an amount equal to 100% of the Net
Cash Proceeds from any Equity Issuance occurring after the Closing
Date.
SECTION 5.9 COMPLIANCE WITH LAW.
-------------------
The Borrower will, and will cause each of its Subsidiaries to,
comply with all laws, rules, regulations and orders, and all applicable
restrictions imposed by all Governmental Authorities Law (including without
limitation, environmental laws), applicable to it and its Property if
noncompliance with any such law, rule, regulation, order or restriction
could reasonably be expected to have a Material Adverse Effect.
SECTION 5.10 YEAR 2000 COMPLIANCE.
--------------------
The Borrower will promptly notify the Administrative Agent in the
event that it discovers or determines that any computer application
(including those of its suppliers, vendors and customers) that is material
to its or any of its Subsidiaries' business and operations will not be Year
2000 Compliant, except to the extent that such failure could not reasonably
be expected to have a Material Adverse Effect.
SECTION 5.11 FURTHER ASSURANCES.
------------------
As soon as available, but in any event within 15 Business Days of
the Closing Date, the Borrower shall have provided the Administrative Agent
with certificates of good standing, existence or its equivalent in each
jurisdiction where any of the Borrower or its Subsidiaries conducts its
operations or business.
ARTICLE VI
NEGATIVE COVENANTS
The Borrower hereby covenants and agrees that on the Closing Date,
and thereafter for so long as this Credit Agreement is in effect and until
the Commitments have terminated, no Note remains outstanding and unpaid and
the Borrower Obligations, together with interest, Facility Fees and all
other amounts owing to the Administrative Agent or any Lender hereunder, are
paid in full, the Borrower will not, nor will it permit any of its
Subsidiaries to, either directly or indirectly:
54
SECTION 6.1 INDEBTEDNESS.
------------
Incur, create, assume or permit to exist any other Indebtedness or
liability on account of borrowed money, represented by any notes, bonds,
debentures or similar obligations, or on account of the deferred purchase
price of any property, or any other deposits, advance or progress payments
under contracts, except:
------
(a) Indebtedness arising or existing under this Credit
Agreement, the other Credit Documents and the existing Senior
Notes;
(b) Indebtedness of the Borrower and its Subsidiaries
existing as of the Closing Date (and set forth in Schedule 6.1(b)
---------------
hereto) and renewals, refinancings and extensions thereof in a
principal amount not in excess of that outstanding as of the date
of such renewal, refinancing or extension;
(c) Indebtedness and obligations owing under Hedging
Agreements relating to the Loans hereunder and other Hedging
Agreements entered into in order to manage existing or anticipated
interest rate, exchange rate or commodity price risks and not for
speculative purposes;
(d) Indebtedness of the Borrower and its Subsidiaries
incurred after the Closing Date consisting of Capital Leases or
Indebtedness incurred to provide all or a portion of the purchase
price or cost of construction of an asset provided that (i) such
Indebtedness when incurred shall not exceed the purchase price or
cost of construction of such asset and (ii) no such Indebtedness
shall be refinanced for a principal amount in excess of the
principal balance outstanding thereon at the time of such
refinancing;
(e) Indebtedness secured by Liens to the extent permitted
under subsection (m) of the definition of "Permitted Liens";
---------------
(f) other unsecured Indebtedness of the Borrower and its
Subsidiaries; provided that such Indebtedness is not senior in
right of payment to the payment of the Indebtedness arising or
existing under this Credit Agreement and the other Credit
Documents.
SECTION 6.2 LIENS.
-----
Contract, create, incur, assume or permit to exist any Lien with
respect to any of their respective property or assets of any kind (whether
real or personal, tangible or intangible), whether now owned or hereafter
acquired, except for Permitted Liens.
55
SECTION 6.3 NATURE OF BUSINESS.
------------------
Alter the character of their business in any material respect from
that conducted as of the Closing Date or engage in any business other than
the business conducted as of the Closing Date.
SECTION 6.4 CONSOLIDATION, MERGER, SALE OR PURCHASE OF ASSETS, ETC.
-------------------------------------------------------
(a) Dissolve, liquidate or wind up their affairs or enter
into any transaction of merger or consolidation; provided, however
that (i) the Borrower may merge or consolidate with any Subsidiary
so long as the Borrower shall be the continuing or surviving
corporation, (ii) any domestic Subsidiary of the Borrower may be
merged with or into any other domestic Subsidiary of the Borrower
(iii) the Borrower or any Subsidiary of the Borrower may merge with
any other Person in connection with a Permitted Acquisition if the
Borrower or such Subsidiary shall be the continuing or surviving
corporation.
(b) Make any Asset Dispositions (including, without
limitation, any Sale Leaseback Transaction) other than (i) the sale
of inventory in the ordinary course of business for fair
consideration, (ii) the sale or disposition of machinery and
equipment no longer used or useful in the conduct of Borrower's or
any such Subsidiary's business, or (iii) such other Asset
Dispositions, provided that (A) the consideration for such assets
disposed of represents the fair market value of such assets at the
time of such Asset Disposition; and (B) the cumulative net book
value of all Asset Dispositions by the Borrower and any of its
Subsidiaries during any single fiscal year shall not exceed 15% of
the Consolidated Total Assets determined as of the end of the most
recently completed fiscal year;
(c) Acquire all or substantially all of the assets or
business of any Person except in connection with a Permitted
Acquisition.
SECTION 6.5 ADVANCES, INVESTMENTS AND LOANS.
-------------------------------
Lend money or extend credit or make advances to any Person, or
purchase or acquire any stock, obligations or securities of, or any other
interest in, or make any capital contribution to, or otherwise make an
investment in, any Person except for Permitted Investments.
SECTION 6.6 ISSUANCE OF EQUITY SECURITIES.
-----------------------------
Issue, sell, transfer, pledge or otherwise dispose of any shares of
capital stock or other equity or ownership interests ("Equity Interests") in
----------------
any Subsidiary, except (a) in connection with the sale of all of the capital
stock of a Subsidiary pursuant to a transaction permitted by Section 6.4(b),
(b) the issuance, sale or transfer of Equity Interests by a Subsidiary (the
"Issuing Subsidiary") to the Borrower or a Subsidiary of the Borrower that
owns such Issuing Subsidiary and (c) as needed to qualify directors under
applicable law.
56
SECTION 6.7 TRANSACTIONS WITH AFFILIATES; MODIFICATION OF
---------------------------------------------
DOCUMENTATION.
-------------
(a) Except as permitted in subsection (e) of the
definition of Permitted Investments, enter into or permit to exist
any transaction or series of transactions, whether or not in the
ordinary course of business, with any officer, director,
shareholder, Subsidiary or Affiliate other than (i) customary fees
and expenses paid to directors and (ii) where such transactions are
on terms and conditions substantially as favorable as would be
obtainable in a comparable arm's-length transaction with a Person
other than an officer, director, shareholder, Subsidiary or
Affiliate.
(b) Permit the Borrower or any Subsidiary to, if any
Default or Event of Default has occurred and is continuing or would
be directly or indirectly caused as a result thereof, after the
issuance thereof, amend or modify (or permit the amendment or
modification of) any of the terms of any Indebtedness if such
amendment or modification would add or change any terms in a manner
adverse to the issuer of such Indebtedness, or shorten the final
maturity or average life to maturity or require any payment to be
made sooner than originally scheduled or increase the interest rate
applicable thereto or change any subordination provision thereof
SECTION 6.8 FISCAL YEAR; ORGANIZATIONAL DOCUMENTS.
-------------------------------------
Change its fiscal year or amend, modify or change its articles of
incorporation in any manner adverse to the Lenders (or corporate charter or
other similar organizational document) or bylaws (or other similar document)
without the prior written consent of the Required Lenders.
SECTION 6.9 LIMITATION ON RESTRICTED ACTIONS.
--------------------------------
Create or permit to exist any restriction of any kind on the
ability of any Subsidiary to (a) pay dividends or make any other
distributions to the Borrower or any of its Subsidiaries, (b) pay
Indebtedness owed to the Borrower or any of its Subsidiaries, (c) make loans
or advances to the Borrower or any of its Subsidiaries or (d) transfer any
of its properties or assets to the Borrower or any of its Subsidiaries.
SECTION 6.10 RESTRICTED PAYMENTS.
-------------------
Directly or indirectly
(a) pay or declare any dividend, either in cash or
property, on any shares of any class of its capital stock or make
any other distribution on account of any shares of any class of its
capital stock; or
(b) redeem, purchase or otherwise acquire, directly or
indirectly, any shares of its capital stock of any class or any
warrants, rights or options to purchase or acquire any shares of
its capital stock of any class;
57
(c) make any other payment or distribution, either
directly or indirectly or through any Subsidiary, in respect of its
capital stock;
(d) make any prepayment, redemption, defeaseance or
acquisition for value of (including without limitation, by way of
depositing money or securities with the trustee with respect
thereto before due for the purpose of paying when due), or refund,
refinance or exchange of any Funded Debt (all of the foregoing
being herein called "Restricted Payments"),
unless (i) the aggregate amount of all Restricted Payments made during the
period from and after December 31, 1998 to and including the date of the
making of the Restricted Payment in question would not exceed the sum of (x)
$154,000,000 plus (y) 75% of cumulative Consolidated Net Income for such
----
period (or less 100% of cumulative Consolidated Net Income incurred for such
period if such Consolidated Net Income for such period is a deficit figure)
plus (z) the aggregate Net Cash Proceeds of the issuance or sale of the
----
Borrower's capital stock during such period and (ii) no Default or Event of
Default shall have occurred or would occur as a result of such Restricted
Payment. However, so long as no Event of Default shall have occurred and be
continuing nothing herein shall restrict the Borrower's ability to (i)
repurchase capital stock of the Borrower in an aggregate amount of up to
$7,000,000 in any 12-month period and such repurchases of less than
$7,000,000 shall not constitute Restricted Payments and (ii) make payments
or prepayments with respect to the Senior Notes.
ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.1 EVENTS OF DEFAULT.
-----------------
An Event of Default shall exist upon the occurrence of any of the
following specified events (each an "Event of Default"):
----------------
(a) The Borrower shall fail to pay any principal on any
Note when due in accordance with the terms thereof or hereof; or
the Borrower shall fail to reimburse the Issuing Lender for any LOC
Obligations when due in accordance with the terms hereof; or the
Borrower shall fail to pay any interest on any Note or any fee or
other amount payable hereunder when due in accordance with the
terms thereof or hereof and such failure shall continue unremedied
for three (3) Business Days; or
(b) Any representation or warranty made or deemed made
herein or in any of the other Credit Documents or which is
contained in any certificate, document or financial or other
statement furnished at any time under or in connection with this
Agreement shall prove to have been incorrect, false or misleading
in any material respect on or as of the date made or deemed made;
or
58
(c) (i) The Borrower shall fail to perform, comply with or
observe any term, covenant or agreement applicable to it contained
in Section 5.7(a), Section 5.8 or Article VI hereof; or (ii) the
Borrower shall fail to comply with any other covenant, contained in
this Credit Agreement or the other Credit Documents or any other
agreement, document or instrument among the Borrower, the
Administrative Agent and the Lenders or executed by the Borrower in
favor of the Administrative Agent or the Lenders (other than as
described in Sections 7.1(a) or 7.1(c)(i) above), and in the event
such breach or failure to comply is capable of cure, is not cured
within thirty (30) days of its occurrence; or
(d) The occurrence of an Event of Default under the
364-Day Credit Agreement; or
(e) The Borrower or any of its Subsidiaries shall (i)
default in any payment of principal of or interest on any
Indebtedness (other than the Borrower Obligations) in a principal
amount outstanding of at least $10,000,000 in the aggregate for the
Borrower and any of its Subsidiaries beyond the period of grace
(not to exceed 30 days), if any, provided in the instrument or
agreement under which such Indebtedness was created; or (ii)
default in the observance or performance of any other agreement or
condition relating to any Indebtedness (other than the Borrower
Obligations) in a principal amount outstanding of at least
$10,000,000 in the aggregate for the Borrower and its Subsidiaries
or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event shall occur or condition
exist, the effect of which default or other event or condition is
to cause, or to permit the holder or holders of such Indebtedness
or beneficiary or beneficiaries of such Indebtedness (or a trustee
or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, with the giving of notice if required,
such Indebtedness to become due prior to its stated maturity; or
(f) (i) The Borrower or any of its Subsidiaries shall
commence any case, proceeding or other action (A) under any
existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect
to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect
to it or its debts, or (B) seeking appointment of a receiver,
trustee, custodian, conservator or other similar official for it or
for all or any substantial part of its assets, or the Borrower or
any Subsidiary shall make a general assignment for the benefit of
its creditors; or (ii) there shall be commenced against the
Borrower or any Subsidiary any case, proceeding or other action of
a nature referred to in clause (i) above which (A) results in the
entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged or unbonded
for a period of 60 days; or (iii) there shall be commenced against
the Borrower or any Subsidiary any case, proceeding or other action
seeking issuance of a warrant of attachment, execution, distraint
or similar process against all or any substantial part of its
assets which results in the entry of an order for any such relief
which shall not have been vacated, discharged, or stayed or bonded
pending appeal within 60 days from the entry thereof; or (iv) the
Borrower or any Subsidiary shall take any
59
action in furtherance of, or indicating its consent to, approval
of, or acquiescence in, any of the acts set forth in clause (i),
(ii), or (iii) above; or (v) the Borrower or any Subsidiary shall
generally not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due; or
(g) One or more judgments or decrees shall be entered
against the Borrower or any of its Subsidiaries involving in the
aggregate a liability (to the extent not paid when due or covered
by insurance) of $7,500,000 or more and all such judgments or
decrees shall not have been paid and satisfied, vacated,
discharged, stayed or bonded pending appeal within 10 days from the
entry thereof; or
(h) (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of
the Code) involving any Plan, (ii) any "accumulated funding
deficiency" (as defined in Section 302 of ERISA), whether or not
waived, shall exist with respect to any Plan or any Lien in favor
of the PBGC or a Plan (other than a Permitted Lien) shall arise on
the assets of the Borrower or any Commonly Controlled Entity, (iii)
a Reportable Event shall occur with respect to, or proceedings
shall commence to have a trustee appointed, or a trustee shall be
appointed, to administer or to terminate, any Single Employer Plan,
which Reportable Event or commencement of proceedings or
appointment of a Trustee is, in the reasonable opinion of the
Required Lenders, likely to result in the termination of such Plan
for purposes of Title IV of ERISA, (iv) any Single Employer Plan
shall terminate for purposes of Title IV of ERISA, (v) the
Borrower, any of its Subsidiaries or any Commonly Controlled Entity
shall, or in the reasonable opinion of the Required Lenders is
likely to, incur any liability in connection with a withdrawal
from, or the Insolvency or Reorganization of, any Multiemployer
Plan or (vi) any other similar event or condition shall occur or
exist with respect to a Plan; and in each case in clauses (i)
through (vi) above, such event or condition, together with all
other such events or conditions, if any, could have a Material
Adverse Effect; or
(i) Either (i) any Person or two or more Persons acting in
concert shall have acquired "beneficial ownership," directly or
indirectly, of, or shall have acquired by contract or otherwise, or
shall have entered into a contract or arrangement that, upon
consummation, will result in its or their acquisition of, control
over, Voting Stock of the Borrower (or other securities convertible
into such Voting Stock) representing 25% or more of the combined
voting power of all Voting Stock of the Borrower, or (ii) during
any period of up to 24 consecutive months, commencing after the
Closing Date, individuals who at the beginning of such 24 month
period were directors of the Borrower (together with any new
director whose election by the Borrower's Board of Directors or
whose nomination for election by the Borrower's shareholders was
approved by a vote of at least two-thirds of the directors then
still in office who either were directors at the beginning of such
period or whose election or nomination for election was previously
so approved) cease for any reason to constitute a majority of the
directors of the Borrower then in office. As used herein,
"beneficial ownership" shall have the meaning provided in Rule
13d-3 of the Securities and Exchange Commission under the
Securities Act of 1934; or
60
(j) Any other Credit Document shall fail to be in full
force and effect or to give the Administrative Agent and/or the
Lenders the security interests, liens, rights, powers and
privileges purported to be created thereby (except as such
documents may be terminated or no longer in force and effect in
accordance with the terms thereof, other than those indemnities and
provisions which by their terms shall survive); or
(k) There shall occur and be continuing any Event of
Default under and as defined in the indentures or other documents
evidencing the Senior Notes.
SECTION 7.2 ACCELERATION; REMEDIES.
----------------------
Upon the occurrence of an Event of Default, then, and in any such
event, (a) if such event is an Event of Default specified in Section 7.1(f)
above, automatically the Commitments shall immediately terminate and the
Loans (with accrued interest thereon), and all other amounts under the
Credit Documents (including without limitation the maximum amount of all
contingent liabilities under Letters of Credit) shall immediately become due
and payable, and (b) if such event is any other Event of Default, either or
both of the following actions may be taken: (i) with the written consent of
the Required Lenders, the Administrative Agent may, or upon the written
request of the Required Lenders, the Administrative Agent shall, by notice
to the Borrower declare the Commitments to be terminated forthwith,
whereupon the Commitments shall immediately terminate; and (ii) with the
written consent of the Required Lenders, the Administrative Agent may, or
upon the written request of the Required Lenders, the Administrative Agent
shall, by notice of default to the Borrower, declare the Loans (with accrued
interest thereon) and all other amounts owing under this Agreement and the
Notes to be due and payable forthwith and direct the Borrower to pay to the
Administrative Agent cash collateral as security for the LOC Obligations for
subsequent drawings under then outstanding Letters of Credit in an amount
equal to the maximum amount which may be drawn under Letters of Credit then
outstanding, whereupon the same shall immediately become due and payable.
ARTICLE VIII
THE AGENT
SECTION 8.1 APPOINTMENT.
-----------
Each Lender hereby irrevocably designates and appoints First Union
National Bank as the Administrative Agent of such Lender under this
Agreement, and each such Lender irrevocably authorizes First Union National
Bank, as the Administrative Agent for such Lender, to take such action on
its behalf under the provisions of this Agreement and to exercise such
powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of this Agreement, together with such
other powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary elsewhere in this Agreement, the Administrative
Agent shall not have any duties or responsibilities, except those expressly
set forth herein, or any
61
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Administrative Agent.
SECTION 8.2 DELEGATION OF DUTIES.
--------------------
The Administrative Agent may execute any of its duties under this
Agreement by or through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible for the negligence or
misconduct of any agents or attorneys-in-fact selected by it with reasonable
care. Without limiting the foregoing, the Administrative Agent may appoint
one of its affiliates as its agent to perform the functions of the
Administrative Agent hereunder relating to the advancing of funds to the
Borrower and distribution of funds to the Lenders and to perform such other
related functions of the Administrative Agent hereunder as are reasonably
incidental to such functions.
SECTION 8.3 EXCULPATORY PROVISIONS.
----------------------
Neither the Administrative Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates shall be (a)
liable for any action lawfully taken or omitted to be taken by it or such
Person under or in connection with this Agreement (except for its or such
Person's own gross negligence or willful misconduct) or (b) responsible in
any manner to any of the Lenders for any recitals, statements,
representations or warranties made by the Borrower or any officer thereof
contained in this Agreement or in any certificate, report, statement or
other document referred to or provided for in, or received by the
Administrative Agent under or in connection with, this Agreement or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency
of any of the Credit Documents or for any failure of the Borrower to perform
its obligations hereunder or thereunder. The Administrative Agent shall not
be under any obligation to any Lender to ascertain or to inquire as to the
observance or performance by the Borrower of any of the agreements contained
in, or conditions of, this Agreement, or to inspect the properties, books or
records of the Borrower.
SECTION 8.4 RELIANCE BY ADMINISTRATIVE AGENT.
--------------------------------
The Administrative Agent shall be entitled to rely, and shall be
fully protected in relying, upon any Note, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, telecopy,
telex or teletype message, statement, order or other document or
conversation believed by it in good faith to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons and upon
advice and statements of legal counsel (including, without limitation,
counsel to the Borrower), independent accountants and other experts selected
by the Administrative Agent. The Administrative Agent may deem and treat the
payee of any Note as the owner thereof for all purposes unless (a) a written
notice of assignment, negotiation or transfer thereof shall have been filed
with the Administrative Agent and (b) the Administrative Agent shall have
received the written agreement of such assignee to be bound hereby as fully
and to the same extent as if such assignee were an original Lender party
hereto, in each case in form satisfactory to the Administrative Agent. The
Administrative Agent shall be fully justified in
62
failing or refusing to take any action under this Agreement unless it shall
first receive such advice or concurrence of the Required Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action. The
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under any of the Credit Documents in accordance with
a request of the Required Lenders or all of the Lenders, as may be required
under this Agreement, and such request and any action taken or failure to
act pursuant thereto shall be binding upon all the Lenders and all future
holders of the Notes.
SECTION 8.5 NOTICE OF DEFAULT.
-----------------
The Administrative Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless
the Administrative Agent has received notice from a Lender or the Borrower
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall
give prompt notice thereof to the Lenders. The Administrative Agent shall
take such action with respect to such Default or Event of Default as shall
be reasonably directed by the Required Lenders; provided, however, that
-------- -------
unless and until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable in the best interests
of the Lenders except to the extent that this Credit Agreement expressly
requires that such action be taken, or not taken, only with the consent or
upon the authorization of the Required Lenders, or all of the Lenders, as
the case may be.
SECTION 8.6 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS.
------------------------------------------------------
Each Lender expressly acknowledges that neither the Administrative
Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates has made any representation or warranty to
it and that no act by the Administrative Agent hereinafter taken, including
any review of the affairs of the Borrower, shall be deemed to constitute any
representation or warranty by the Administrative Agent to any Lender. Each
Lender represents to the Administrative Agent that it has, independently and
without reliance upon the Administrative Agent or any other Lender, and
based on such documents and information as it has deemed appropriate, made
its own appraisal of and investigation into the business, operations,
property, financial and other condition and creditworthiness of the Borrower
and made its own decision to make its Loans hereunder and enter into this
Agreement. Each Lender also represents that it will, independently and
without reliance upon the Administrative Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of
the Borrower. Except for notices, reports and other documents expressly
required to be furnished to the Lenders by the Administrative Agent
hereunder, the Administrative Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the
63
business, operations, property, condition (financial or otherwise),
prospects or creditworthiness of the Borrower which may come into the
possession of the Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates.
SECTION 8.7 INDEMNIFICATION.
---------------
The Lenders agree to indemnify the Administrative Agent in its
capacity hereunder (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so), ratably according to
their respective Commitment Percentages in effect on the date on which
indemnification is sought under this Section, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever which may at
any time (including, without limitation, at any time following the payment
of the Notes) be imposed on, incurred by or asserted against the
Administrative Agent in any way relating to or arising out of any Credit
Document or any documents contemplated by or referred to herein or therein
or the transactions contemplated hereby or thereby or any action taken or
omitted by the Administrative Agent under or in connection with any of the
foregoing; provided, however, that no Lender shall be liable for the payment
-------- -------
of any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements to the extent
resulting from the Agent's gross negligence or willful misconduct, as
determined by a court of competent jurisdiction. The agreements in this
Section 8.7 shall survive the termination of this Agreement and payment of
the Notes and all other amounts payable hereunder.
SECTION 8.8 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY.
-----------------------------------------------
The Administrative Agent and its affiliates may make loans to,
accept deposits from and generally engage in any kind of business with the
Borrower as though the Administrative Agent were not the Administrative
Agent hereunder. With respect to its Loans made or renewed by it and any
Note issued to it, the Administrative Agent shall have the same rights and
powers under this Agreement as any Lender and may exercise the same as
though it were not the Administrative Agent, and the terms "Lender" and
"Lenders" shall include the Administrative Agent in its individual capacity.
SECTION 8.9 SUCCESSOR ADMINISTRATIVE AGENT.
------------------------------
The Administrative Agent may resign as Administrative Agent upon 30
days' prior notice to the Borrower and the Lenders. If the Administrative
Agent shall resign as Administrative Agent under this Agreement and the
Notes, then the Required Lenders shall appoint from among the Lenders a
successor agent for the Lenders, which successor agent shall be approved by
the Borrower, whereupon such successor agent shall succeed to the rights,
powers and duties of the Administrative Agent, and the term "Administrative
Agent" shall mean such successor agent effective upon such appointment and
approval, and the former Agent's rights, powers and duties as Administrative
Agent shall be terminated, without any other or further act or deed on the
part of such former Administrative Agent or any of the parties to this
Agreement or any holders of the Notes. After any retiring Agent's
resignation as Administrative Agent, the provisions of this
64
Section 8.9 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Administrative Agent under this Agreement.
SECTION 8.10 SYNDICATION AGENTS.
------------------
Neither of the Syndication Agents shall have any right, power, duty
or obligation under this Credit Agreement or any of the other Credit
Documents other than those applicable to all Lenders as such. Without
limiting the foregoing, none of such Lenders shall have or be deemed to have
a fiduciary relationship with any Lender. Each Lender hereby makes the same
acknowledgments with respect to such Lenders as it makes with respect to the
Agent in Section 8.6.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 AMENDMENTS AND WAIVERS.
----------------------
Neither this Agreement, nor any of the Notes, nor any of the other
Credit Documents, nor any terms hereof or thereof may be amended,
supplemented, waived or modified except in accordance with the provisions of
this Section nor may be released except as specifically provided herein or
in accordance with the provisions of this Section 9.1. The Required Lenders
may, or, with the written consent of the Required Lenders, the
Administrative Agent may, from time to time, (a) enter into with the
Borrower written amendments, supplements or modifications hereto and to the
other Credit Documents for the purpose of adding any provisions to this
Agreement or the other Credit Documents or changing in any manner the rights
of the Lenders or of the Borrower hereunder or thereunder or (b) waive, on
such terms and conditions as the Required Lenders may specify in such
instrument, any of the requirements of this Agreement or the other Credit
Documents or any Default or Event of Default and its consequences; provided,
--------
however, that no such waiver and no such amendment, waiver, supplement,
-------
modification or release shall:
(i) reduce the amount or extend the scheduled
date of maturity of any Loan, LOC Obligation or Note or
any installment thereon (including any mandatory
prepayment), or reduce the stated rate of any interest or
fee payable hereunder (other than interest at the
increased post-default rate) or extend the scheduled date
of any payment thereof or increase the amount or extend
the expiration date of any Lender's Commitment or any LOC
Obligation beyond the Revolving Commitment Termination
Date, in each case without the written consent of each
Lender directly affected thereby, or
(ii) amend, modify or waive any provision of this
Section 9.1 or reduce the percentage specified in the
definition of Required Lenders, without the written
consent of all the Lenders, or
65
(iii) amend, modify or waive any provision of
Article VIII without the written consent of the then
Administrative Agent, or
(iv) amend, modify or waive any provision of the
Credit Documents requiring consent, approval or request of
the Required Lenders or all Lenders, without the written
consent of all of the Lenders and, provided, further, that
-------- -------
no amendment, waiver or consent affecting the rights or
duties of the Administrative Agent or the Issuing Lender
under any Credit Document shall in any event be effective,
unless in writing and signed by the Administrative Agent
and/or the Issuing Lender, as applicable, in addition to
the Lenders required hereinabove to take such action.
Any such waiver, any such amendment, supplement or modification and
any such release shall apply equally to each of the Lenders and shall be
binding upon the Borrower, the Lenders, the Administrative Agent and all
future holders of the Notes. In the case of any waiver, the Borrower, the
Lenders and the Administrative Agent shall be restored to their former
position and rights hereunder and under the outstanding Loans and Notes and
other Credit Documents, and any Default or Event of Default waived shall be
deemed to be cured and not continuing; but no such waiver shall extend to
any subsequent or other Default or Event of Default, or impair any right
consequent thereon.
Notwithstanding any of the foregoing to the contrary, the consent
of the Borrower shall not be required for any amendment, modification or
waiver of the provisions of Article VIII (other than the provisions of
Section 8.9); provided, however, that the Administrative Agent will provide
-------- -------
written notice to the Borrower of any such amendment, modification or
waiver. In addition, the Borrower and the Lenders hereby authorize the
Administrative Agent to modify this Credit Agreement by unilaterally
amending or supplementing Schedule 2.1(a) from time to time in the manner
---------------
requested by the Borrower, the Administrative Agent or any Lender in order
to reflect any assignments or transfers of the Loans as provided for
hereunder; provided, however, that the Administrative Agent shall promptly
-------- -------
deliver a copy of any such modification to the Borrower and each Lender.
Notwithstanding the fact that the consent of all the Lenders is
required in certain circumstances as set forth above, (x) each Lender is
entitled to vote as such Lender sees fit on any bankruptcy reorganization
plan that affects the Loans, and each Lender acknowledges that the
provisions of Section 1126(c) of the Bankruptcy Code supersedes the
unanimous consent provisions set forth herein and (y) the Required Lenders
may consent to allow the Borrower to use cash collateral in the context of a
bankruptcy or insolvency proceeding.
SECTION 9.2 NOTICES.
-------
Except as otherwise provided in Article II, all notices, requests
and demands to or upon the respective parties hereto to be effective shall
be in writing (including by telecopy), and, unless otherwise expressly
provided herein, shall be deemed to have been duly given or made (a) when
delivered by hand, (b) when transmitted via telecopy (or other facsimile
device) to the
66
number set out herein, (c) the day following the day on which the same has
been delivered prepaid to a reputable national overnight air courier
service, or (d) the third Business Day following the day on which the same
is sent by certified or registered mail, postage prepaid, in each case,
addressed as follows in the case of the Borrower and the Administrative
Agent, and as set forth on Schedule 9.2 in the case of the Lenders, or to
------------
such other address as may be hereafter notified by the respective parties
hereto and any future holders of the Notes:
The Borrower Graybar Electric Company, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇ ▇. ▇▇▇▇, Assistant Treasurer
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
The Administrative First Union National Bank
Agent: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Syndication Agency Services
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
First Union National Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
SECTION 9.3 NO WAIVER; CUMULATIVE REMEDIES.
------------------------------
No failure to exercise and no delay in exercising, on the part of
the Administrative Agent or any Lender, any right, remedy, power or
privilege hereunder shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and
privileges herein provided are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.
SECTION 9.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
------------------------------------------
All representations and warranties made hereunder and in any
document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this
Agreement and the Notes and the making of the Loans, provided that all such
--------
67
representations and warranties shall terminate on the date upon which the
Commitments have been terminated and all amounts owing hereunder and under
any Notes have been paid in full.
SECTION 9.5 PAYMENT OF EXPENSES AND TAXES.
-----------------------------
The Borrower agrees (a) to pay or reimburse the Administrative
Agent for all its reasonable out-of-pocket costs and expenses incurred in
connection with the development, preparation, negotiation, printing and
execution of, and any amendment, supplement or modification to, this
Agreement and the other Credit Documents and any other documents prepared in
connection herewith or therewith, and the consummation and administration of
the transactions contemplated hereby and thereby, together with the
reasonable fees and disbursements of counsel to the Administrative Agent,
(b) to pay or reimburse each Lender and the Administrative Agent for all its
costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the Notes and any such
other documents, including, without limitation, the reasonable fees and
disbursements of counsel to the Administrative Agent and to the Lenders
(including reasonable allocated costs of in-house legal counsel), and (c) on
demand, to pay, indemnify, and hold each Lender and the Administrative Agent
harmless from, any and all recording and filing fees and any and all
liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other similar taxes, if any, which may be payable or determined
to be payable in connection with the execution and delivery of, or
consummation or administration of any of the transactions contemplated by,
or any amendment, supplement or modification of, or any waiver or consent
under or in respect of, the Credit Documents and any such other documents,
and (d) to pay, indemnify, and hold each Lender and the Administrative Agent
and their Affiliates harmless from and against, any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever
with respect to the execution, delivery, enforcement, performance and
administration of the Credit Documents and any such other documents and the
use, or proposed use, of proceeds of the Loans (all of the foregoing,
collectively, the "indemnified liabilities"); provided, however, that the
----------------------- -------- -------
Borrower shall not have any obligation hereunder to the Administrative Agent
or any Lender with respect to indemnified liabilities arising from the gross
negligence or willful misconduct of the Administrative Agent or any such
Lender, as determined by a court of competent jurisdiction. The agreements
in this Section 9.5 shall survive repayment of the Loans, Notes and all
other amounts payable hereunder.
SECTION 9.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS; PURCHASING
--------------------------------------------------
LENDERS.
-------
(a) This Agreement shall be binding upon and inure to the
benefit of the Borrower, the Lenders, the Administrative Agent, all
future holders of the Notes and their respective successors and
assigns, except that the Borrower may not assign or transfer any of
its rights or obligations under this Agreement or the other Credit
Documents without the prior written consent of each Lender.
(b) Any Lender may, in the ordinary course of its
commercial banking business and in accordance with applicable law,
at any time sell to one or more banks or other entities
("Participants") participating interests in any Loan owing to such
------------
Lender,
68
any Note held by such Lender, any Commitment of such Lender, or any
other interest of such Lender hereunder. In the event of any such
sale by a Lender of participating interests to a Participant, such
Lender's obligations under this Agreement to the other parties to
this Agreement shall remain unchanged, such Lender shall remain
solely responsible for the performance thereof, such Lender shall
remain the holder of any such Note for all purposes under this
Agreement, and the Borrower and the Administrative Agent shall
continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under this Agreement. No
Lender shall transfer or grant any participation under which the
Participant shall have rights to approve any amendment to or waiver
of this Agreement or any other Credit Document except to the extent
such amendment or waiver would (i) extend the scheduled maturity of
any Loan or Note or any installment thereon in which such
Participant is participating, or reduce the stated rate or extend
the time of payment of interest or fees thereon (except in
connection with a waiver of interest at the increased post-default
rate) or reduce the principal amount thereof, or increase the
amount of the Participant's participation over the amount thereof
then in effect (it being understood that a waiver of any Default or
Event of Default shall not constitute a change in the terms of such
participation, and that an increase in any Commitment or Loan shall
be permitted without consent of any participant if the
Participant's participation is not increased as a result thereof)
or (ii) consent to the assignment or transfer by the Borrower of
any of its rights and obligations under this Agreement. In the case
of any such participation, the Participant shall not have any
rights under this Agreement or any of the other Credit Documents
(the Participant's rights against such Lender in respect of such
participation to be those set forth in the agreement executed by
such Lender in favor of the Participant relating thereto) and all
amounts payable by the Borrower hereunder shall be determined as if
such Lender had not sold such participation, provided that each
--------
Participant shall be entitled to the benefits of Sections 2.16,
2.17, 2.18 and 9.5 with respect to its participation in the
Commitments and the Loans outstanding from time to time; provided,
--------
that no Participant shall be entitled to receive any greater amount
pursuant to such Sections than the transferor Lender would have
been entitled to receive in respect of the amount of the
participation transferred by such transferor Lender to such
Participant had no such transfer occurred.
(c) Any Lender may, in the ordinary course of its
commercial banking business and in accordance with applicable law,
at any time, sell or assign to any Lender or any affiliate thereof
and with the consent of the Administrative Agent and, so long as no
Event of Default has occurred and is continuing, the Borrower (in
each case, which consent shall not be unreasonably withheld), to
one or more additional banks or financial institutions ("Purchasing
----------
Lenders"), all or any part of its rights and obligations under this
-------
Agreement and the Notes in minimum amounts of $5,000,000 with
respect to its Revolving Commitment and its Revolving Loans (or, if
less, the entire amount of such Lender's obligations), pursuant to
a Commitment Transfer Supplement, executed by such Purchasing
Lender and such transferor Lender (and, in the case of a Purchasing
Lender that is not then a Lender or an affiliate thereof, the
Administrative Agent and, so long as no Event of Default has
occurred and is continuing, the Borrower), and delivered to the
Administrative Agent for its acceptance and recording in the
Register; provided, however,
-------- -------
69
that any sale or assignment to an existing Lender or any Affiliate
of an existing Lender shall not require the consent of the
Administrative Agent or the Borrower nor shall any such sale or
assignment be subject to the minimum assignment amounts specified
herein. Upon such execution, delivery, acceptance and recording,
from and after the Transfer Effective Date specified in such
Commitment Transfer Supplement, (x) the Purchasing Lender
thereunder shall be a party hereto and, to the extent provided in
such Commitment Transfer Supplement, have the rights and
obligations of a Lender hereunder with a Commitment as set forth
therein, and (y) the transferor Lender thereunder shall, to the
extent provided in such Commitment Transfer Supplement, be released
from its obligations under this Agreement (and, in the case of a
Commitment Transfer Supplement covering all or the remaining
portion of a transferor Lender's rights and obligations under this
Agreement, such transferor Lender shall cease to be a party
hereto). Such Commitment Transfer Supplement shall be deemed to
amend this Agreement to the extent, and only to the extent,
necessary to reflect the addition of such Purchasing Lender and the
resulting adjustment of Commitment Percentages arising from the
purchase by such Purchasing Lender of all or a portion of the
rights and obligations of such transferor Lender under this
Agreement and the Notes. On or prior to the Transfer Effective Date
specified in such Commitment Transfer Supplement, the Borrower, at
its own expense, shall execute and deliver to the Administrative
Agent in exchange for the Notes delivered to the Administrative
Agent pursuant to such Commitment Transfer Supplement new Notes to
the order of such Purchasing Lender in an amount equal to the
Commitment assumed by it pursuant to such Commitment Transfer
Supplement and, unless the transferor Lender has not retained a
Commitment hereunder, new Notes to the order of the transferor
Lender in an amount equal to the Commitment retained by it
hereunder. Such new Notes shall be dated the Closing Date and shall
otherwise be in the form of the Notes replaced thereby. The Notes
surrendered by the transferor Lender shall be returned by the
Administrative Agent to the Borrower marked "canceled".
(d) The Administrative Agent shall maintain at its address
referred to in Section 9.2 a copy of each Commitment Transfer
Supplement delivered to it and a register (the "Register") for the
--------
recordation of the names and addresses of the Lenders and the
Commitment of, and principal amount of the Loans owing to, each
Lender from time to time. The entries in the Register shall be
conclusive, in the absence of manifest error, and the Borrower, the
Administrative Agent and the Lenders may treat each Person whose
name is recorded in the Register as the owner of the Loan recorded
therein for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of a duly executed Commitment
Transfer Supplement, together with payment to the Administrative
Agent by the transferor Lender or the Purchasing Lender, as agreed
between them, of a registration and processing fee of $3,000 for
each Purchasing Lender listed in such Commitment Transfer
Supplement and the Notes subject to such Commitment Transfer
Supplement, the Administrative Agent shall (i) accept such
Commitment Transfer Supplement, (ii) record the information
70
contained therein in the Register and (iii) give prompt notice of
such acceptance and recordation to the Lenders and the Borrower.
(f) The Borrower authorizes each Lender to disclose to any
Participant or Purchasing Lender (each, a "Transferee") and any
----------
prospective Transferee any and all information in such Lender's
possession concerning the Borrower and its Affiliates which has
been delivered to such Lender by or on behalf of the Borrower
pursuant to this Agreement or which has been delivered to such
Lender by or on behalf of the Borrower in connection with such
Lender's credit evaluation of the Borrower and its Affiliates prior
to becoming a party to this Agreement, in each case subject to
Section 9.16.
(g) At the time of each assignment pursuant to this
Section 9.6 to a Person which is not already a Lender hereunder and
which is not a United States person (as such term is defined in
Section 7701(a)(30) of the Code) for Federal income tax purposes,
the respective assignee Lender shall provide to the Borrower and
the Administrative Agent the appropriate Internal Revenue Service
Forms (and, if applicable, a 2.18 Certificate) described in Section
2.18.
(h) Nothing herein shall prohibit any Lender from pledging
or assigning any of its rights under this Agreement (including,
without limitation, any right to payment of principal and interest
under any Note) to any Federal Reserve Bank in accordance with
applicable laws.
SECTION 9.7 ADJUSTMENTS; SET-OFF.
--------------------
(a) Each Lender agrees that if any Lender (a "benefited
---------
Lender") shall at any time receive any payment of all or part of
------
its Loans, or interest thereon, in respect thereof (whether
voluntarily or involuntarily, by set-off, pursuant to events or
proceedings of the nature referred to in Section 7.1(f), or
otherwise) in a greater proportion than any such payment to any
other Lender, if any, in respect of such other Lender's Loans, or
interest thereon, such benefited Lender shall purchase for cash
from the other Lenders a participating interest in such portion of
each such other Lender's Loan, as shall be necessary to cause such
benefited Lender to share the excess payment ratably with each of
the Lenders; provided, however, that if all or any portion of such
-------- -------
excess payment or benefits is thereafter recovered from such
benefited Lender, such purchase shall be rescinded, and the
purchase price and benefits returned, to the extent of such
recovery, but without interest. The Borrower agrees that each
Lender so purchasing a portion of another Lender's Loans may
exercise all rights of payment (including, without limitation,
rights of set-off) with respect to such portion as fully as if such
Lender were the direct holder of such portion.
(b) In addition to any rights and remedies of the Lenders
provided by law (including, without limitation, other rights of
set-off), each Lender shall have the right, without prior notice to
the Borrower, any such notice being expressly waived by the
Borrower to the extent permitted by applicable law, upon the
occurrence of any Event of
71
Default, to setoff and appropriate and apply any and all deposits
(general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such
Lender or any branch or agency thereof to or for the credit or the
account of the Borrower, or any part thereof in such amounts as
such Lender may elect, against and on account of the obligations
and liabilities of the Borrower to such Lender hereunder and claims
of every nature and description of such Lender against the
Borrower, in any currency, whether arising hereunder, under the
Notes or under any documents contemplated by or referred to herein
or therein, as such Lender may elect, whether or not such Lender
has made any demand for payment and although such obligations,
liabilities and claims may be contingent or unmatured. The
aforesaid right of set-off may be exercised by such Lender against
the Borrower or against any trustee in bankruptcy, debtor in
possession, assignee for the benefit of creditors, receiver or
execution, judgment or attachment creditor of the Borrower, or
against anyone else claiming through or against the Borrower or any
such trustee in bankruptcy, debtor in possession, assignee for the
benefit of creditors, receiver, or execution, judgment or
attachment creditor, notwithstanding the fact that such right of
set-off shall not have been exercised by such Lender prior to the
occurrence of any Event of Default. Each Lender agrees promptly to
notify the Borrower and the Administrative Agent after any such
set-off and application made by such Lender; provided, however,
-------- -------
that the failure to give such notice shall not affect the validity
of such set-off and application.
SECTION 9.8 TABLE OF CONTENTS AND SECTION HEADINGS.
--------------------------------------
The table of contents and the Section and subsection headings
herein are intended for convenience only and shall be ignored in construing
this Agreement.
SECTION 9.9 COUNTERPARTS.
------------
This Agreement may be executed by one or more of the parties to
this Agreement on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Agreement signed by all the parties
shall be lodged with the Borrower and the Administrative Agent.
SECTION 9.10 EFFECTIVENESS.
-------------
This Credit Agreement shall become effective on the date on which
all of the parties have signed a copy hereof (whether the same or different
copies) and shall have delivered the same to the Administrative Agent
pursuant to Section 9.2 or, in the case of the Lenders, shall have given to
-----------
the Administrative Agent written, telecopied or telex notice (actually
received) at such office that the same has been signed and mailed to it.
72
SECTION 9.11 SEVERABILITY.
------------
Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 9.12 INTEGRATION.
-----------
This Agreement and the Notes represent the agreement of the
Borrower, the Administrative Agent and the Lenders with respect to the
subject matter hereof, and there are no promises, undertakings,
representations or warranties by the Administrative Agent, the Borrower or
any Lender relative to the subject matter hereof not expressly set forth or
referred to herein or in the Notes.
SECTION 9.13 GOVERNING LAW.
-------------
This Agreement and the Notes and the rights and obligations of the
parties under this Agreement and the Notes shall be governed by, and
construed and interpreted in accordance with, the law of the State of New
York. The Borrower agrees that Sections 5-1401 and 5-1402 of the General
Obligations law of the State of New York shall apply to this Credit
Agreement and the other Credit Documents.
SECTION 9.14 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
----------------------------------------------
All judicial proceedings brought against the Borrower with respect
to this Agreement, any Note or any of the other Credit Documents may be
brought in any state or federal court of competent jurisdiction in the
County of New York, State of New York or any federal court located in the
Southern District of New York, and, by execution and delivery of this
Agreement, the Borrower accepts, for itself and in connection with its
properties, generally and unconditionally, the non-exclusive jurisdiction of
the aforesaid courts and irrevocably agrees to be bound by any final
judgment rendered thereby in connection with this Agreement from which no
appeal has been taken or is available. The Borrower irrevocably agrees that
all service of process in any such proceedings in any such court may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to it at its address
set forth in Section 9.2 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto, such service
being hereby acknowledged by the Borrower to be effective and binding
service in every respect. Each of the Borrower, the Administrative Agent and
the Lenders irrevocably waives any objection, including, without limitation,
any objection to the laying of venue or based on the grounds of forum non
conveniens which it may now or hereafter have to the bringing of any such
action or proceeding in any such jurisdiction. Nothing herein shall affect
the right to serve process in any other manner permitted by law or shall
limit the right of any Lender to bring proceedings against the Borrower in
the court of any other jurisdiction.
73
SECTION 9.15 ARBITRATION.
-----------
(a) Notwithstanding the provisions of Section 9.14 to the
contrary, upon demand of any party hereto, whether made before or
within three (3) months after institution of any judicial
proceeding, any dispute, claim or controversy arising out of,
connected with or relating to this Agreement and other Credit
Documents ("Disputes") between or among parties to this Agreement
shall be subject to non-binding arbitration as provided herein.
Institution of a judicial proceeding by a party does not waive the
right of that party to demand arbitration hereunder. Disputes may
include, without limitation, tort claims, counterclaims, disputes
as to whether a matter is subject to arbitration, claims brought as
class actions, claims arising from Credit Documents executed in the
future, or claims arising out of or connected with the transaction
reflected by this Agreement.
Arbitration shall be conducted under and governed by the
Commercial Arbitration Rules (the "Arbitration Rules") of the
American Arbitration Association (the "AAA") and Title 9 of the
U.S. Code. All arbitration hearings shall be conducted in New York,
New York. A hearing shall begin within 90 days of demand for
arbitration and all hearings shall be concluded within 120 days of
demand for arbitration. These time limitations may not be extended
unless a party shows cause for extension and then no more than a
total extension of 60 days. The expedited procedures set forth in
Rule 51 et seq. of the Arbitration Rules shall be applicable to
claims of less than $1,000,000. All applicable statutes of
limitation shall apply to any Dispute. Arbitrators shall be
licensed attorneys selected from the Commercial Financial Dispute
Arbitration Panel of the AAA. The parties hereto do not waive
applicable Federal or state substantive law except as provided
herein. Notwithstanding the foregoing, this arbitration provision
does not apply to disputes under or related to Hedging Agreements.
(b) Notwithstanding the preceding arbitration provisions,
the Administrative Agent, the Lenders and the Borrower agree to
preserve, without diminution, certain remedies that the
Administrative Agent on behalf of the Lenders may employ or
exercise freely, independently or in connection with an arbitration
proceeding or after an arbitration action is brought. The
Administrative Agent on behalf of the Lenders shall have the right
to proceed in any court of proper jurisdiction or by self-help to
exercise or prosecute the following remedies, as applicable (i) any
rights to foreclose against any real or personal property or other
security by exercising a power of sale granted under Credit
Documents or under applicable law or by judicial foreclosure and
sale, including a proceeding to confirm the sale; (ii) any rights
of self-help including peaceful occupation of real property and
collection of rents, set-off, and peaceful possession of personal
property; (iii) obtaining provisional or ancillary remedies
including injunctive relief, sequestration, garnishment,
attachment, appointment of receiver and filing an involuntary
bankruptcy proceeding; and (iv) when applicable, a judgment by
confession of judgment. Preservation of these remedies does not
limit the power of an arbitrator to grant similar remedies that may
be requested by a party in a Dispute.
74
(c) The parties hereto agree that they shall not have a
remedy of punitive or exemplary damages against the other in any
Dispute and hereby waive any right or claim to punitive or
exemplary damages they have now or which may arise in the future in
connection with any Dispute whether the Dispute is resolved by
arbitration or judicially.
(d) By execution and delivery of this Agreement, each of
the parties hereto accepts, for itself and in connection with its
properties, generally and unconditionally, the non-exclusive
jurisdiction relating to any arbitration proceedings conducted
under the Arbitration Rules in New York, New York and irrevocably
SECTION 9.16 CONFIDENTIALITY.
---------------
The Administrative Agent and each of the Lenders agrees that it
will use its reasonable best efforts not to disclose without the prior
consent of the Borrower (other than to its employees, affiliates, auditors
or counsel or to another Lender) any information with respect to the
Borrower and its Subsidiaries which is furnished pursuant to this Agreement,
any other Credit Document or any documents contemplated by or referred to
herein or therein and which is designated by the Borrower to the Lenders in
writing as confidential or as to which it is otherwise reasonably clear such
information is not public, except that any Lender may disclose any such
information (a) as has become generally available to the public other than
by a breach of this Section 9.16, (b) as may be required or appropriate in
any report, statement or testimony submitted to any municipal, state or
federal regulatory body having or claiming to have jurisdiction over such
Lender or to the Federal Reserve Board or the Federal Deposit Insurance
Corporation or the OCC or the NAIC or similar organizations (whether in the
United States or elsewhere) or their successors, (c) as may be required or
appropriate in response to any summons or subpoena or any law, order,
regulation or ruling applicable to such Lender, (d) to any prospective
Participant or assignee in connection with any contemplated transfer
pursuant to Section 9.6, provided that such prospective transferee shall
--------
have been made aware of this Section 9.16 and shall have agreed to be bound
by its provisions as if it were a party to this Agreement or (e) to Gold
----
Sheets and other similar bank trade publications; such information to
------
consist of deal terms and other information regarding the credit facilities
evidenced by this Credit Agreement customarily found in such publications.
SECTION 9.17 ACKNOWLEDGMENTS.
---------------
The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of each Credit Document;
(b) neither the Administrative Agent nor any Lender has
any fiduciary relationship with or duty to the Borrower arising out
of or in connection with this Agreement and the relationship
between Administrative Agent and Lenders, on one hand,
75
and the Borrower, on the other hand, in connection herewith is
solely that of debtor and creditor; and
(c) no joint venture exists among the Lenders or among the
Borrower and the Lenders.
SECTION 9.18 WAIVERS OF JURY TRIAL.
---------------------
THE BORROWER, THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
76
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered in Charlotte, North Carolina by its proper
and duly authorized officers as of the day and year first above written.
BORROWER: GRAYBAR ELECTRIC COMPANY, INC.
--------
By:
-----------------------------------------
Title:
ADMINISTRATIVE AGENT
AND LENDERS: FIRST UNION NATIONAL BANK,
------------ as Administrative Agent and as a Lender
By:
----------------------------------------
Name:
Title:
BANK OF AMERICA, N.A.,
as Syndication Agent and as a Lender
By:
----------------------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
as Syndication Agent and as a Lender
By:
----------------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as a Lender
By:
----------------------------------------
Name:
Title:
▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
as a Lender
By:
----------------------------------------
Name:
Title:
COMERICA BANK,
as a Lender
By:
----------------------------------------
Name:
Title:
COMMERCE BANK, N.A.,
as a Lender
By:
----------------------------------------
Name:
Title:
FIFTH THIRD BANK,
as a Lender
By:
----------------------------------------
Name:
Title:
KEYBANK NATIONAL ASSOCIATION,
as a Lender
By:
----------------------------------------
Name:
Title:
78
THE NORTHERN TRUST COMPANY,
as a Lender
By:
----------------------------------------
Name:
Title:
MERCANTILE BANK NATIONAL ASSOCIATION,
as a Lender
By:
----------------------------------------
Name:
Title:
SUNTRUST BANK, ATLANTA,
as a Lender
By:
----------------------------------------
Name:
Title:
UMB BANK OF ST. LOUIS, N.A.,
as a Lender
By:
----------------------------------------
Name:
Title:
WACHOVIA BANK, N.A.,
as a Lender
By:
----------------------------------------
Name:
Title:
79
▇▇▇▇▇ FARGO BANK, N.A.,
as a Lender
By:
----------------------------------------
Name:
Title:
80
FIRST AMENDMENT TO FIVE-YEAR CREDIT AGREEMENT
THIS FIRST AMENDMENT TO FIVE-YEAR CREDIT AGREEMENT (this
"Amendment"), dated as of May 12, 2000, is by and among GRAYBAR ELECTRIC
---------
COMPANY, INC. (the "Borrower"), the lenders identified on the signature
--------
pages hereto (the "Lenders"), FIRST UNION NATIONAL BANK, a national banking
-------
association, as administrative agent for the Lenders hereunder (in such
capacity, the "Administrative Agent") and BANK OF AMERICA, N.A. and BANK
--------------------
ONE, NA (formerly known as The First National Bank of Chicago), as
syndication agents for the Lenders hereunder (in such capacity, the
"Syndication Agents"). Capitalized terms used herein which are not defined
------------------
herein and which are defined in the Existing Credit Agreement (defined
below) shall have the same meanings as therein defined.
W I T N E S S E T H
WHEREAS, the Borrower, the Lenders and the Agents have entered into
that certain Five-Year Credit Agreement dated as of July 30, 1999, as
amended, supplemented or otherwise modified from time to time (the "Existing
--------
Credit Agreement");
----------------
WHEREAS, the Borrower has requested certain amendments to the
Existing Credit Agreement and the parties to the Existing Credit Agreement
have agreed to amend the Existing Credit Agreement as provided herein; and
NOW, THEREFORE, in consideration of the agreements hereinafter set
forth, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as
follows:
PART I
DEFINITIONS
SUBPART 1.1 Certain Definitions. Unless otherwise defined herein or
-------------------
the context otherwise requires, the following terms used in this Amendment,
including its preamble and recitals, have the following meanings:
"Amended Credit Agreement" means the Existing Credit
------------------------
Agreement as amended hereby.
"Amendment No. 1 Effective Date" is defined in Subpart 3.1.
------------------------------ -----------
SUBPART 1.2 Other Definitions. Unless otherwise defined herein or
-----------------
the context otherwise requires, terms used in this Amendment, including its
preamble and recitals, have the meanings provided in the Amended Credit
Agreement.
PART II
AMENDMENTS TO EXISTING CREDIT AGREEMENT
SUBPART 2.1 Amendment to Section 1.1. Section 1.1 of the Existing
------------------------
Credit Agreement is hereby amended as follows:
(a) The definition of "Consolidated Interest Expense" is
hereby amended in its entirety to read as follows:
"Consolidated Interest Expense" means, for any period, all
-----------------------------
interest expense of the Borrower and its Subsidiaries including the
interest component under Capital Leases and the implied interest
component under Securitization Transactions, as determined in
accordance with GAAP. Except as expressly provided otherwise, the
applicable period shall be for the four consecutive quarters ending
as of the date of determination.
(b) The clause (g) of the definition of "Permitted
Investments" is hereby amended in its entirety to read as follows:
"Permitted Investments" means:
---------------------
********
(g) Permitted Acquisitions and, to the extent
permitted by Section 6.11, Securitization Transactions;
and
********
(c) The clause (m) of the definition of "Permitted Liens"
is hereby amended in its entirety to read as follows:
"Permitted Liens" means:
---------------
********
(m) additional Liens not otherwise permitted by
the foregoing clauses hereof; provided that such
--------
additional Liens permitted by this clause (m) do not
encumber property and assets which constitute more than
ten percent (10%) of the Consolidated Total Assets
determined as of the end of the most recently completed
fiscal year; and
(d) The definition of "Permitted Liens" is hereby amended
by adding the following new clause (n):
(n) Liens created or deemed to exist in
connection with a Securitization Transaction permitted
hereunder (including any related filings of any financing
statements), but only to the extent that any such Lien
relates to the
2
applicable Securitization Receivables actually sold,
contributed, financed or otherwise conveyed or pledged
pursuant to such transaction.
(e) Section 1.1 of the Credit Agreement is hereby amended
by adding the following new definition:
"Securitization Transaction" shall mean any transaction or
--------------------------
series of financing transactions that have been or may be entered
into by the Borrower or any Subsidiary of the Borrower pursuant to
which the Borrower or any Subsidiary of the Borrower may sell,
convey or otherwise transfer to (i) a Subsidiary or Affiliate of
the Borrower (a "Securitization Subsidiary"), or (ii) any other
-------------------------
Person, or may grant a security interest in, any accounts
receivable, notes receivable, rights to future lease payments or
residuals or other similar rights to payment (the "Securitization
--------------
Receivables") (whether such Securitization Receivables are then
-----------
existing or arising in the future) of the Borrower or any
Subsidiary of the Borrower, and any assets related thereto,
including without limitation, all security interests in merchandise
or services financed thereby, the proceeds of such Securitization
Receivables, and other assets which are customarily sold or in
respect of which security interests are customarily granted in
connection with securitization transactions involving such assets.
SUBPART 2.2 Amendment to Section 6.4(b). Section 6.4(b) of
---------------------------
the Existing Credit Agreement is hereby amended in its entirety to
read as follows:
SECTION 6.4 CONSOLIDATION, MERGER, SALE OR PURCHASE OF ASSETS, ETC.
-------------------------------------------------------
********
(b) Make any Asset Dispositions (including,
without limitation, any Sale Leaseback Transaction) other
than (i) the sale of inventory in the ordinary course of
business for fair consideration, (ii) the sale or
disposition of machinery and equipment no longer used or
useful in the conduct of Borrower's or any such
Subsidiary's business, (iii) the sale or disposition of
Securitization Receivables in connection with a
Securitization Transaction or (iv) such other Asset
Dispositions, provided that (A) the consideration for such
assets disposed of represents the fair market value of
such assets at the time of such Asset Disposition; and (B)
the cumulative net book value of such Asset Dispositions
by the Borrower and any of its Subsidiaries pursuant to
this clause (iv) during any single fiscal year shall not
exceed ten percent 10% of the Consolidated Total Assets
determined as of the end of the most recently completed
fiscal year;
********
SUBPART 2.3 Amendment to Section 6.7(a). Section 6.7(a) of the
---------------------------
Existing Credit Agreement is hereby amended in its entirety to read as
follows:
SECTION 6.7 TRANSACTIONS WITH AFFILIATES; MODIFICATION OF
---------------------------------------------
DOCUMENTATION.
-------------
3
(a) Except as permitted in subsection (e) of the
definition of Permitted Investments, enter into or permit to exist
any transaction or series of transactions, whether or not in the
ordinary course of business, with any officer, director,
shareholder, Subsidiary or Affiliate other than (i) customary fees
and expenses paid to directors, (ii) where such transactions are on
terms and conditions substantially as favorable as would be
obtainable in a comparable arm's-length transaction with a Person
other than an officer, director, shareholder, Subsidiary or
Affiliate and (iii) transactions between the Borrower and any
Securitization Subsidiary.
********
SUBPART 2.4 New Section. The following new Section 6.11 is added to
-----------
the Existing Credit Agreement immediately following existing Section 6.10
thereof:
SECTION 6.11 LIMITATION ON SECURITIZATION TRANSACTIONS.
-----------------------------------------
Permit the aggregate outstanding amount owed by the
Borrower or Subsidiary of the Borrower under Securitization
Transactions at any time to exceed 15% of the Consolidated Total
Assets determined as of the end of the most recently completed
fiscal year.
PART III
CONDITIONS TO EFFECTIVENESS
SUBPART 3.1 Amendment No. 1 Effective Date. This Amendment shall be
------------------------------
and become effective as of the date hereof (the "Amendment No. 1 Effective
-------------------------
Date") when all of the conditions set forth in this Part III shall have been
---- --------
satisfied, and thereafter this Amendment shall be known, and may be referred
to, as "Amendment No. 1".
---------------
SUBPART 3.2 Execution of Counterparts of Amendment. The
--------------------------------------
Administrative Agent shall have received counterparts (or other evidence of
execution, including telephonic message, satisfactory to the Administrative
Agent) of this Amendment, which collectively shall have been duly executed
on behalf of each of the Borrower, the Lenders and the Agents.
SUBPART 3.3 Other Items. The Administrative Agent shall have
-----------
received such other documents, agreements or information which may be
reasonably requested by the Administrative Agent.
PART IV
MISCELLANEOUS
SUBPART 4.1 Representations and Warranties. The Borrower hereby
------------------------------
represents and warrants to the Administrative Agent and the Lenders that,
after giving effect to this Amendment, (a) no Default or Event of Default
exists under the Credit Agreement or any of the other Credit
4
Documents and (b) the representations and warranties set forth in Article
III of the Existing Credit Agreement are, subject to the limitations set
forth therein, true and correct in all material respects as of the date
hereof (except for those which expressly relate to an earlier date).
SUBPART 4.2 Reaffirmation of Credit Party Obligations. Each Credit
-----------------------------------------
Party hereby ratifies the Credit Agreement and acknowledges and reaffirms
(a) that it is bound by all terms of the Credit Agreement applicable to it
and (b) that it is responsible for the observance and full performance of
its respective Credit Party Obligations.
SUBPART 4.3 Cross-References. References in this Amendment to any
----------------
Part or Subpart are, unless otherwise specified, to such Part or Subpart of
this Amendment.
SUBPART 4.4 Instrument Pursuant to Existing Credit Agreement. This
------------------------------------------------
Amendment is a Credit Document executed pursuant to the Existing Credit
Agreement and shall (unless otherwise expressly indicated therein) be
construed, administered and applied in accordance with the terms and
provisions of the Existing Credit Agreement.
SUBPART 4.5 References in Other Credit Documents. At such time as
------------------------------------
this Amendment shall become effective pursuant to the terms of Subpart 3.1,
-----------
all references in the Credit Documents to the "Credit Agreement" shall be
deemed to refer to the Credit Agreement as amended by this Amendment.
SUBPART 4.6 Counterparts/Telecopy. This Amendment may be executed
---------------------
by the parties hereto in several counterparts, each of which shall be deemed
to be an original and all of which shall constitute together but one and the
same agreement. Delivery of executed counterparts of the Amendment by
telecopy shall be effective as an original and shall constitute a
representation that an original shall be delivered.
SUBPART 4.7 Governing Law. THIS AMENDMENT SHALL BE DEEMED TO BE A
-------------
CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW
YORK.
SUBPART 4.8 Successors and Assigns. This Amendment shall be binding
----------------------
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
[Remainder of page intentionally left blank]
5
IN WITNESS WHEREOF the Borrower, the Lenders and the Agents have
caused this Amendment to be duly executed on the date first above written.
BORROWER: GRAYBAR ELECTRIC COMPANY, INC.
--------
By:
----------------------------------------
Title:
ADMINISTRATIVE AGENT
AND LENDERS: FIRST UNION NATIONAL BANK,
----------- as Administrative Agent and as a Lender
By:
----------------------------------------
Name:
Title:
BANK OF AMERICA, N.A.,
as Syndication Agent and as a Lender
By:
----------------------------------------
Name:
Title:
BANK ONE, NA
(formerly known as The First National Bank
of Chicago, as Syndication Agent and as
a Lender)
By:
----------------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as a Lender
By:
----------------------------------------
Name:
Title:
THE BANK OF NOVA SCOTIA,
as a Lender
By:
----------------------------------------
Name:
Title:
COMERICA BANK,
as a Lender
By:
----------------------------------------
Name:
Title:
COMMERCE BANK, N.A.,
as a Lender
By:
----------------------------------------
Name:
Title:
FIFTH THIRD BANK,
as a Lender
By:
----------------------------------------
Name:
Title:
KEYBANK NATIONAL ASSOCIATION,
as a Lender
By:
----------------------------------------
Name:
Title:
THE NORTHERN TRUST COMPANY,
as a Lender
By:
----------------------------------------
Name:
Title:
MERCANTILE BANK NATIONAL ASSOCIATION,
as a Lender
By:
----------------------------------------
Name:
Title:
SUNTRUST BANK,
as a Lender
By:
----------------------------------------
Name:
Title:
UMB BANK OF ST. LOUIS, N.A.,
as a Lender
By:
----------------------------------------
Name:
Title:
WACHOVIA BANK, N.A.,
as a Lender
By:
----------------------------------------
Name:
Title:
▇▇▇▇▇ FARGO BANK, N.A.,
as a Lender
By:
----------------------------------------
Name:
Title: