EXHIBIT 4.2
--------------------------------------------------------------------------------
$85,000,000
CREDIT AGREEMENT
among
MEDSOURCE TECHNOLOGIES, LLC,
as Borrower,
MEDSOURCE TECHNOLOGIES, INC.,
as Parent
and
THE DOMESTIC SUBSIDIARIES OF THE BORROWER
FROM TIME TO TIME PARTY HERETO,
as Guarantors,
THE LENDERS PARTY HERETO,
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent,
U.S. BANK NATIONAL ASSOCIATION,
as Syndication Agent
and
▇▇▇▇▇▇ TRUST AND SAVINGS BANK,
as Documentation Agent
Dated as of April [2], 2002
FIRST UNION SECURITIES, INC.,
d/b/a WACHOVIA SECURITIES,
as Lead Arranger
--------------------------------------------------------------------------------
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I DEFINITIONS............................................................................................1
Section 1.1 Defined Terms..........................................................................1
-------------
Section 1.2 Other Definitional Provisions.........................................................28
-----------------------------
Section 1.3 Accounting Terms......................................................................28
----------------
ARTICLE II THE LOANS; AMOUNT AND TERMS..........................................................................29
Section 2.1 Revolving Loans.......................................................................29
---------------
Section 2.2 Tranche A Term Loan Facility..........................................................31
----------------------------
Section 2.3 Delayed Draw Term Loan Facility.......................................................33
-------------------------------
Section 2.4 Letter of Credit Subfacility..........................................................36
----------------------------
Section 2.5 Swingline Loan Subfacility............................................................39
--------------------------
Section 2.6 Fees..................................................................................41
----
Section 2.7 Commitment Reductions.................................................................42
---------------------
Section 2.8 Prepayments...........................................................................42
-----------
Section 2.9 Minimum Principal Amount of Tranches; Lending Offices.................................45
-----------------------------------------------------
Section 2.10 Default Rate and Payment Dates........................................................45
------------------------------
Section 2.11 Conversion Options....................................................................45
------------------
Section 2.12 Computation of Interest and Fees......................................................46
--------------------------------
Section 2.13 Pro Rata Treatment and Payments.......................................................47
-------------------------------
Section 2.14 Non-Receipt of Funds by the Administrative Agent......................................49
------------------------------------------------
Section 2.15 Inability to Determine Interest Rate..................................................50
------------------------------------
Section 2.16 Illegality............................................................................51
----------
Section 2.17 Requirements of Law...................................................................51
-------------------
Section 2.18 Indemnity.............................................................................53
---------
Section 2.19 Taxes.................................................................................53
-----
Section 2.20 Indemnification; Nature of Issuing Lender's Duties....................................55
--------------------------------------------------
Section 2.21 Replacement of Lenders................................................................56
----------------------
ARTICLE III REPRESENTATIONS AND WARRANTIES......................................................................57
Section 3.1 Financial Condition...................................................................57
-------------------
Section 3.2 No Change.............................................................................58
---------
Section 3.3 Corporate Existence; Compliance with Law..............................................58
----------------------------------------
Section 3.4 Corporate Power; Authorization; Enforceable Obligations...............................58
-------------------------------------------------------
Section 3.5 No Legal Bar; No Default..............................................................59
------------------------
Section 3.6 No Material Litigation................................................................59
----------------------
Section 3.7 Investment Company Act................................................................59
----------------------
Section 3.8 Margin Regulations....................................................................59
------------------
Section 3.9 ERISA.................................................................................59
-----
Section 3.10 Environmental Matters.................................................................60
---------------------
Section 3.11 Use of Proceeds.......................................................................61
---------------
Section 3.12 Subsidiaries..........................................................................61
------------
Section 3.13 Ownership.............................................................................62
---------
Section 3.14 Indebtedness..........................................................................62
------------
i
Section 3.15 Taxes.................................................................................62
-----
Section 3.16 Intellectual Property.................................................................62
---------------------
Section 3.17 Solvency..............................................................................63
--------
Section 3.18 Investments...........................................................................63
-----------
Section 3.19 Location of Collateral................................................................63
----------------------
Section 3.20 No Burdensome Restrictions............................................................64
--------------------------
Section 3.21 Brokers' Fees.........................................................................64
-------------
Section 3.22 Labor Matters.........................................................................64
-------------
Section 3.23 Security Documents....................................................................64
------------------
Section 3.24 Accuracy and Completeness of Information..............................................64
----------------------------------------
Section 3.25 Consummation of IPO; Representations and Warranties from Other Documents..............65
------------------------------------------------------------------------
Section 3.26 Licensing and Accreditation...........................................................65
---------------------------
Section 3.27 Other Regulatory Protection...........................................................65
---------------------------
Section 3.28 Material Contracts....................................................................65
------------------
Section 3.29 Insurance.............................................................................66
---------
Section 3.30 Classification as Senior Indebtedness.................................................66
-------------------------------------
ARTICLE IV CONDITIONS PRECEDENT.................................................................................66
Section 4.1 Conditions to Closing Date and Initial Extensions of Credit...........................66
-----------------------------------------------------------
Section 4.2 Conditions to All Extensions of Credit................................................73
--------------------------------------
ARTICLE V AFFIRMATIVE COVENANTS.................................................................................74
Section 5.1 Financial Statements..................................................................74
--------------------
Section 5.2 Certificates; Other Information.......................................................76
-------------------------------
Section 5.3 Payment of Obligations................................................................76
----------------------
Section 5.4 Conduct of Business and Maintenance of Existence......................................77
------------------------------------------------
Section 5.5 Maintenance of Property; Insurance....................................................77
----------------------------------
Section 5.6 Inspection of Property; Books and Records; Discussions................................78
------------------------------------------------------
Section 5.7 Notices...............................................................................78
-------
Section 5.8 Environmental Laws....................................................................79
------------------
Section 5.9 Financial Covenants...................................................................80
-------------------
Section 5.10 Additional Subsidiary Guarantors......................................................81
--------------------------------
Section 5.11 Compliance with Law...................................................................81
-------------------
Section 5.12 Pledged Assets........................................................................82
--------------
Section 5.13 Interest Rate Protection Agreements...................................................82
-----------------------------------
ARTICLE VI NEGATIVE COVENANTS...................................................................................82
Section 6.1 Indebtedness..........................................................................82
------------
Section 6.2 Liens.................................................................................84
-----
Section 6.3 Nature of Business....................................................................84
------------------
Section 6.4 Consolidation, Merger, Sale or Purchase of Assets, etc................................84
------------------------------------------------------
Section 6.5 Advances, Investments and Loans.......................................................85
-------------------------------
Section 6.6 Transactions with Affiliates..........................................................85
----------------------------
Section 6.7 Ownership of Subsidiaries; Restrictions...............................................86
---------------------------------------
Section 6.8 Fiscal Year; Organizational Documents; Material Contracts.............................86
---------------------------------------------------------
Section 6.9 Limitation on Restricted Actions......................................................86
--------------------------------
ii
Section 6.10 Restricted Payments...................................................................87
-------------------
Section 6.11 Sale Leasebacks.......................................................................87
---------------
Section 6.12 No Further Negative Pledges...........................................................87
---------------------------
Section 6.13 Operating Lease Obligations...........................................................88
---------------------------
Section 6.14 Parent Holding Company................................................................88
----------------------
ARTICLE VII EVENTS OF DEFAULT...................................................................................88
Section 7.1 Events of Default.....................................................................88
-----------------
ARTICLE VIII THE AGENT..........................................................................................91
Section 8.1 Appointment...........................................................................91
-----------
Section 8.2 Delegation of Duties..................................................................91
--------------------
Section 8.3 Exculpatory Provisions................................................................92
----------------------
Section 8.4 Reliance by Administrative Agent......................................................92
--------------------------------
Section 8.5 Notice of Default.....................................................................93
-----------------
Section 8.6 Non-Reliance on Administrative Agent and Other Lenders................................93
------------------------------------------------------
Section 8.7 Indemnification.......................................................................93
---------------
Section 8.8 Administrative Agent in Its Individual Capacity.......................................94
-----------------------------------------------
Section 8.9 Successor Administrative Agent........................................................94
------------------------------
Section 8.10 Other Agents..........................................................................94
------------
ARTICLE IX MISCELLANEOUS........................................................................................95
Section 9.1 Amendments, Waivers and Release of Collateral.........................................95
---------------------------------------------
Section 9.2 Notices...............................................................................96
-------
Section 9.3 No Waiver; Cumulative Remedies........................................................97
------------------------------
Section 9.4 Survival of Representations and Warranties............................................97
------------------------------------------
Section 9.5 Payment of Expenses and Taxes.........................................................98
-----------------------------
Section 9.6 Successors and Assigns; Participations; Purchasing Lenders............................98
----------------------------------------------------------
Section 9.7 Adjustments; Set-off.................................................................101
--------------------
Section 9.8 Table of Contents and Section Headings...............................................102
--------------------------------------
Section 9.9 Counterparts.........................................................................102
------------
Section 9.10 Effectiveness........................................................................102
-------------
Section 9.11 Severability.........................................................................103
------------
Section 9.12 Integration..........................................................................103
-----------
Section 9.13 Governing Law........................................................................103
-------------
Section 9.14 Consent to Jurisdiction and Service of Process.......................................103
----------------------------------------------
Section 9.15 Arbitration..........................................................................104
-----------
Section 9.16 Confidentiality......................................................................105
---------------
Section 9.17 Acknowledgments......................................................................105
---------------
Section 9.18 Waivers of Jury Trial................................................................106
---------------------
ARTICLE X GUARANTY.............................................................................................106
Section 10.1 The Guaranty.........................................................................106
------------
Section 10.2 Bankruptcy...........................................................................106
----------
Section 10.3 Nature of Liability..................................................................107
-------------------
Section 10.4 Independent Obligation...............................................................107
----------------------
Section 10.5 Authorization........................................................................107
-------------
iii
Section 10.6 Reliance.............................................................................108
--------
Section 10.7 Waiver...............................................................................108
------
Section 10.8 Limitation on Enforcement............................................................109
-------------------------
Section 10.9 Confirmation of Payment..............................................................109
-----------------------
iv
Schedules
---------
Schedule 1.1-1 Account Designation Letter
Schedule 1.1-2 Existing Significant Shareholders
Schedule 1.1-3 Existing Investments
Schedule 1.1-4 Permitted Liens
Schedule 1.1-5 Add-backs to Consolidated EBITDA
Schedule 2.1(a) Schedule of Lenders and Commitments
Schedule 2.1(b)(i) Form of Notice of Borrowing
Schedule 2.1(e) Form of Revolving Note
Schedule 2.2(d) Form of Tranche A Term Note
Schedule 2.3(d) Form of Delayed Draw Term Note
Schedule 2.5(d) Form of Swingline Note
Schedule 2.11 Form of Notice of Conversion/Extension
Schedule 2.19 2.19 Certificate
Schedule 3.9 ERISA
Schedule 3.12 Subsidiaries
Schedule 3.16(a) Material Intellectual Property
Schedule 3.16(b) Intellectual Property
Schedule 3.19(a) Location of Real Property
Schedule 3.19(b) Location of Collateral
Schedule 3.19(c) Chief Executive Offices
Schedule 3.21 Brokers' Fees
Schedule 3.22 Labor Matters
Schedule 3.28 Material Contracts
Schedule 3.29 Insurance
Schedule 3.34 Capital Structure
Schedule 4.1-1 Form of Secretary's Certificate
Schedule 4.1-2 Form of Solvency Certificate
Schedule 4.1(f)(i)(a) Owned Mortgaged Properties
Schedule 4.1(f)(i)(b) Leased Mortgaged Properties
Schedule 4.1(z) Pro Forma Covenant Calculations as of the Closing Date
Schedule 5.10 Form of Joinder Agreement
Schedule 6.1(b) Indebtedness
Schedule 6.6 Transactions with Affiliates
Schedule 9.2 Schedule of Lenders' Lending Offices
Schedule 9.6(c) Form of Commitment Transfer Supplement
v
CREDIT AGREEMENT, dated as of April [2], 2002, among MEDSOURCE
TECHNOLOGIES, LLC, a Delaware limited liability company (the "Borrower"),
MEDSOURCE TECHNOLOGIES, INC., a Delaware corporation (the "Parent"), those
Domestic Subsidiaries of the Borrower identified as a "Guarantor" on the
signature pages hereto and such other Domestic Subsidiaries of the Borrower as
may from time to time become a party hereto (individually a "Subsidiary
Guarantor" and collectively, the "Subsidiary Guarantors" and together with the
Parent, individually, a "Guarantor" and collectively, the "Guarantors"), the
several banks and other financial institutions as may from time to time become
parties to this Agreement (collectively, the "Lenders"; and individually, a
"Lender"), and WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking
association, as administrative agent for the Lenders hereunder (in such
capacity, the "Administrative Agent"), U.S. BANK NATIONAL ASSOCIATION, as
syndication agent for the Lenders hereunder (in such capacity, the "Syndication
Agent") and ▇▇▇▇▇▇ TRUST AND SAVINGS BANK as documentation agent for the Lenders
hereunder (in such capacity, the "Documentation Agent").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Borrower has requested that the Lenders make loans and
other financial accommodations to the Borrower in the amount of up to
$85,000,000, as more particularly described herein; and
WHEREAS, the Lenders have agreed to make such loans and other financial
accommodations to the Borrower on the terms and conditions contained herein.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Defined Terms.
-------------
As used in this Agreement, terms defined in the preamble to this
Agreement have the meanings therein indicated, and the following terms have the
following meanings:
"2.19 Certificate" shall have the meaning set forth in Section 2.19(b).
----------------
"Account Designation Letter" shall mean the Notice of Account
Designation Letter dated the Closing Date from the Borrower to the
Administrative Agent substantially in the form attached hereto as Schedule
1.1-1.
1
"Additional Credit Party" shall mean each Person that becomes a
Guarantor by execution of a Joinder Agreement in accordance with Section 5.10.
"Administrative Agent" shall have the meaning set forth in the first
paragraph of this Agreement and any successors in such capacity.
"Affiliate" shall mean as to any Person, any other Person (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" or "Credit Agreement" shall mean this Credit Agreement, as
amended, modified or supplemented from time to time in accordance with its
terms.
"Aggregate Revolving Committed Amount" shall have the meaning set forth
in Section 2.1.
"Alternate Base Rate" shall mean, for any day, a rate per annum equal
to the greater of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. For purposes hereof:
"Prime Rate" shall mean, at any time, the rate of interest per annum publicly
announced from time to time by First Union at its principal office in Charlotte,
North Carolina as its prime rate. Each change in the Prime Rate shall be
effective as of the opening of business on the day such change in the Prime Rate
occurs. The parties hereto acknowledge that the rate announced publicly by First
Union as its Prime Rate is an index or base rate and may not necessarily be its
lowest or best rate charged to its customers or other banks; and "Federal Funds
Effective Rate" shall mean, for any day, the weighted average of the rates on
overnight federal funds transactions with members of the Federal Reserve System
arranged by federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published on the next succeeding Business Day, the average of the quotations for
the day of such transactions received by the Administrative Agent from three
federal funds brokers of recognized standing selected by it. If for any reason
the Administrative Agent shall have determined (which determination shall be
conclusive in the absence of manifest error) that it is unable to ascertain the
Federal Funds Effective Rate, for any reason, including the inability or failure
of the Administrative Agent to obtain sufficient quotations in accordance with
the terms thereof, the Alternate Base Rate shall be determined without regard to
clause (b) of the first sentence of this definition, as appropriate, until the
circumstances giving rise to such inability no longer exist. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective on the opening of business on the date of such
change.
"Alternate Base Rate Loans" shall mean Loans that bear interest at an
interest rate based on the Alternate Base Rate.
2
"Applicable Percentage" shall mean, for any day, the rate per annum set
forth below opposite the applicable level then in effect, it being understood
that the Applicable Percentage for (i) Loans that are Alternate Base Rate Loans
shall be the percentage set forth under the column "Alternate Base Rate Margin
for Loans", (ii) Loans that are LIBOR Rate Loans shall be the percentage set
forth under the column "LIBOR Rate Margin for Loans and Letter of Credit Fee",
(iii) the Letter of Credit Fee shall be the percentage set forth under the
column "LIBOR Rate Margin for Loans and Letter of Credit Fee", and (iv) the
Commitment Fee shall be the percentage set forth under the column "Commitment
Fee":
--------------------------------------------------------------------------------
LIBOR Rate
Margin for Alternate
Loans and Base Rate
Leverage Letter of Margin for Commitment
Level Ratio Credit Fee Loans Fee
--------------------------------------------------------------------------------
I * 2.50 to 1.0 3.00% 1.25% 0.50%
--------------------------------------------------------------------------------
II * 2.25 to 1.0 but 2.75% 1.00% 0.50%
** 2.50 to 1.0
--------------------------------------------------------------------------------
III * 2.00 to 1.0 but 2.50% 0.75% 0.50%
** 2.25 to 1.0
--------------------------------------------------------------------------------
IV * 1.75 to 1.0 but 2.25% 0.50% 0.375%
** 2.00 to 1.0
--------------------------------------------------------------------------------
V * 1.50 to 1.0 but 2.00% 0.25% 0.375%
** 1.75 to 1.0
--------------------------------------------------------------------------------
VI ** 1.50 to 1.0 1.75% 0.00% 0.375%
--------------------------------------------------------------------------------
* Greater Than
** Less Than or Equal to
The Applicable Percentage 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 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) and
(b) and Section 5.2(b) (each an "Interest Determination Date"). Such Applicable
Percentage shall be effective from such Interest Determination Date until the
next such Interest Determination Date. The initial Applicable Percentages shall
be based on Level III until the first Interest Determination Date occurring
after the delivery of the officer's compliance certificate pursuant to Section
5.2(b) for the fiscal quarter ended September 30, 2002; provided that upon the
Delayed Draw Funding Date, the Leverage Ratio will be recalculated on a Pro
Forma Basis and the Applicable Percentages shall be adjusted in accordance
therewith but in no event shall the Applicable Percentages be based on any Level
higher than Level III (i.e. Levels IV, V and VI shall not be available) until
the first Interest Determination Date occurring after the delivery of the
officer's compliance certificate pursuant to Section 5.2(b) for the fiscal
quarter ended September 30, 2002. 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) and (b) and Section 5.2(b),
the Applicable Percentage 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
3
and certifications are provided, whereupon the Level shall be determined based
upon the Leverage Ratio as of the fiscal quarter end to which such financial
information and certifications relate.
"Arranger" shall mean First Union Securities, Inc., d/b/a Wachovia
Securities, as Lead Arranger.
"Asset Disposition" shall mean the disposition of any or all of the
assets (including, without limitation, the Capital Stock of a Subsidiary or any
ownership interest in a joint venture) of any Credit Party or any Subsidiary
whether by sale, lease, transfer or otherwise. The term "Asset Disposition"
shall not include (i) the sale, lease, transfer or other disposition of assets
permitted by Section 6.4(a)(i), (ii), (iii), (iv) or (v) hereof or (ii) any
Equity Issuance.
"Bankruptcy Code" shall mean the Bankruptcy Code in Title 11 of the
United States Code, as amended, modified, succeeded or replaced from time to
time.
"Borrower" shall have the meaning set forth in the first paragraph of
this Agreement.
"Borrowing Date" shall mean, in respect of any Loan, the date such Loan
is made.
"Business" shall have the meaning set forth in Section 6.3.
"Business Day" shall mean a day other than a Saturday, Sunday or other
day on which commercial banks in Charlotte, North Carolina or New York, New York
are authorized or required by law to close; provided, however, that when used in
connection with a rate determination, borrowing or payment in respect of a LIBOR
Rate Loan, the term "Business Day" shall also exclude any day on which banks in
London, England are not open for dealings in Dollar deposits in the London
interbank market.
"Capital Lease" shall mean any lease of property, real or personal, the
obligations with respect to which are required to be capitalized on a balance
sheet of the lessee in accordance with GAAP.
"Capital Lease Obligations" shall mean the capitalized lease
obligations relating to a Capital Lease determined in accordance with GAAP.
"Capital Stock" shall mean (i) in the case of a corporation, capital
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of capital stock, (iii) in the case of a partnership, partnership
interests (whether general or limited), (iv) in the case of a limited liability
company, membership interests and (v) any other 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 (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having
4
maturities of not more than twelve months from the date of acquisition
("Government Obligations"), (ii) U.S. dollar denominated (or foreign currency
fully hedged) time deposits, certificates of deposit, Eurodollar time deposits
and Eurodollar certificates of deposit of (y) any domestic commercial bank of
recognized standing having capital and surplus in excess of $250,000,000 or (z)
any bank whose short-term commercial paper rating from S&P is at least A-1 or
the equivalent thereof or from ▇▇▇▇▇'▇ is at least P-1 or the equivalent thereof
(any such bank being an "Approved Bank"), in each case with maturities of not
more than 364 days from the date of acquisition, (iii) commercial paper and
variable or fixed rate notes issued by any Approved Bank (or by the parent
company thereof) or any commercial paper or 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, (iv) 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, (v) obligations of any state of the United States or any political
subdivision thereof for the payment of the principal and redemption price of and
interest on which there shall have been irrevocably deposited Government
Obligations maturing as to principal and interest at times and in amounts
sufficient to provide such payment, (vi) auction preferred stock rated in the
highest short-term credit rating category by S&P or Moody's and (vii) shares of
money market mutual or similar funds which invest primarily in assets satisfying
the requirements of clauses (i) though (vi) of this definition.
"Change of Control" shall mean the occurrence of any of the following
events: (a) any "person" or "group" (within the meaning of Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934), other than Existing
Significant Shareholders, becomes the "beneficial owner" (as defined in Rule
l3d-3 under the Securities Exchange Act of 1934) of more than 35% of then
outstanding Voting Stock of the Parent, measured by voting power rather than the
number of shares; (b) one or more of the Existing Significant Shareholders
becomes the "beneficial owner" (as defined in Rule l3d-3 under the Securities
Exchange Act of 1934) of more than 49% of then outstanding Voting Stock of the
Parent, measured by voting power rather than the number of shares; (c)
Continuing Directors shall cease for any reason to constitute a majority of the
members of the board of directors of the Parent then in office; (d) the
occurrence of a "Change of Control" (or any comparable term) under, and as
defined in, the documents evidencing or governing any Subordinated Indebtedness
excluding for purposes hereof, the Series E Preferred Stock; or (e) the Parent
shall fail to own 100% of the membership interests in the Borrower.
"Closing Date" shall mean the date of this Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral" shall mean a collective reference to the collateral which
is identified in, and at any time will be covered by, the Security Documents.
"Commitment" shall mean the Revolving Commitment, the LOC Commitment,
the Swingline Commitment, the Tranche A Term Loan Commitment and the Delayed
Draw Term Loan Commitment, individually or collectively, as appropriate.
5
"Commitment Fee" shall have the meaning set forth in Section 2.6(a).
"Commitment Percentage" shall mean the Revolving Commitment Percentage,
the LOC Commitment Percentage, the Tranche A Term Loan Commitment Percentage
and/or the Delayed Draw Term Loan Commitment Percentage, as appropriate.
"Commitment Period" shall mean the period from and including the
Closing Date to but not including the Revolving Commitment Termination Date.
"Commitment Transfer Supplement" shall mean a Commitment Transfer
Supplement, substantially in the form of Schedule 9.6(c).
"Commonly Controlled Entity" shall mean an entity, whether or not
incorporated, which is under common control with the Parent or the Borrower
within the meaning of Section 4001(a)(14) of ERISA or is part of a group which
includes the Parent or the Borrower and which is treated as a single employer
under Section 414 of the Code.
"Consolidated Capital Expenditures" shall mean, for any period, all
capital expenditures of the Parent and its Subsidiaries on a consolidated basis
for such period, as determined in accordance with GAAP. The term "Consolidated
Capital Expenditures" shall not include (i) capital expenditures in respect of
the reinvestment of proceeds derived from Recovery Events received by the Parent
and its Subsidiaries to the extent that such reinvestment is permitted under the
Credit Documents and (ii) Capital Leases entered into by the Parent and its
Subsidiaries and payments made thereunder.
"Consolidated EBITDA" shall mean, for any period, the sum of (a)
Consolidated Net Income for such period, plus (b) an amount which, in the
determination of Consolidated Net Income for such period, has been deducted for
(i) Consolidated Interest Expense (provided, that for the fiscal quarters ending
on or about June 30, 2002, September, 30, 2002 and December 31, 2002 such
calculations shall be based on historical interest expense and not annualized as
set forth in the definition thereof), (ii) total federal, state, local and
foreign income taxes, (iii) depreciation and amortization expense, (iv) non-cash
losses and non-cash charges in an aggregate amount not to exceed $1,000,000 for
any twelve-month period unless otherwise approved in writing by the Required
Lenders and (v) for determinations utilizing the fiscal quarters ending on or
about June 30, 2002, September 30, 2002 and December 31, 2002, the add-backs set
forth on Schedule 1.1-5 attached hereto, all as determined in accordance with
GAAP and in the case of each of the foregoing to the extent taken into account
in the calculation of Consolidated Net Income for such period.
"Consolidated Interest Expense" shall mean (unless otherwise
indicated), for any period, all cash interest expense of the Parent and its
Subsidiaries (including, without limitation, the interest component under
Capital Leases and any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product), as
determined in accordance with GAAP. For purposes hereof, Consolidated Interest
Expense for the fiscal quarters ending on or about June 30, 2002, September 30,
2002 and December 31, 2002 shall be
6
determined by annualizing Consolidated Interest Expense such that for the fiscal
quarter ending on or about June 30, 2002 such components would be multiplied by
four (4), for the two fiscal quarters ending on or about September 30, 2002 such
components would be multiplied by two (2) and for the three fiscal quarters
ending on or about December 31, 2002 such components would be multiplied by one
and one-third (1 1/3).
"Consolidated Net Income" shall mean, for any period, net income
(excluding extraordinary items) after taxes for such period of the Parent and
its Subsidiaries on a consolidated basis, as determined in accordance with GAAP.
"Consolidated Working Capital" shall mean at any time, the excess of
(i) current assets of the Parent and its Subsidiaries on a consolidated basis at
such time less (ii) current liabilities of the Parent and its Subsidiaries on a
consolidated basis at such time excluding current maturities of long-term
Indebtedness, all in accordance with GAAP.
"Continuing Directors" shall mean, 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 Parent (together with
any new director whose election by the Parent's board of directors or whose
nomination for election by the Parent'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).
"Contractual Obligation" shall mean, as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Copyright Licenses" shall mean any agreement naming any Credit Party
as licensor and granting any right under any Copyright including, without
limitation, any thereof referred to in Schedule 3.16.
"Copyrights" shall mean (a) all copyrights throughout the world in all
Works, now existing or hereafter created or acquired, all registrations and
recordings thereof, and all applications in connection therewith, including,
without limitation, registrations, recordings and applications in the United
States Copyright Office including, without limitation, any thereof referred to
in Schedule 3.16, and (b) all renewals thereof including, without limitation,
any thereof referred to in Schedule 3.16.
"Credit Documents" shall mean this Agreement, each of the Notes, any
Joinder Agreement, the LOC Documents and the Security Documents and such other
instruments, documents or agreements as may from time to time be entered into
with respect to the foregoing.
"Credit Party" shall mean any of the Borrower or the Guarantors.
"Credit Party Obligations" shall mean, without duplication, (i) all of
the obligations of the Credit Parties to the Lenders (including the Issuing
Lender) and the Administrative Agent,
7
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 any Credit Party, regardless of whether such interest is an
allowed claim under the Bankruptcy Code) and (ii) all liabilities and
obligations, whenever arising, owing from any Credit Party or any of its
Subsidiaries to any Lender, or any Affiliate of a Lender, arising under any
Hedging Agreement.
"Debt Issuance" shall mean the issuance of any Indebtedness for
borrowed money by any Credit Party or any of its Subsidiaries (excluding, for
purposes hereof, any Equity Issuance or any Indebtedness of any Credit Party and
its Subsidiaries permitted to be incurred pursuant to Section 6.1 hereof).
"Default" shall mean any of the events specified in Section 7.1,
whether or not any requirement for the giving of notice or the lapse of time, or
both, or any other condition, has been satisfied.
"Defaulting Lender" shall mean, at any time, any Lender that, at such
time (a) has failed to make a Loan required pursuant to the 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.
"Delayed Draw Commitment Period" shall mean the period from the Closing
Date to the date that is six months after the Closing Date.
"Delayed Draw Funding Date" shall mean the day on which the Borrower,
directly or through a Subsidiary Guarantor, consummates a Permitted Acquisition
for which it has notified the Lenders it intends to utilize the proceeds of the
Delayed Draw Term Loan to consummate such acquisition, which in any event shall
be a Business Day occurring on or prior to the date that is six months after the
Closing Date.
"Delayed Draw Term Loan" shall have the meaning set forth in Section
2.3(a).
"Delayed Draw Term Loan Commitment" shall mean, with respect to each
Lender, the commitment of such Lender to make its portion of the Delayed Draw
Term Loan in a principal amount equal to such Lender's Delayed Draw Term Loan
Commitment Percentage of the Delayed Draw Term Loan Committed Amount (and for
purposes of making determinations of Required Lenders hereunder after the
Delayed Draw Funding Date, the principal amount outstanding on the Delayed Draw
Term Loan).
"Delayed Draw Term Loan Commitment Percentage" shall mean, for any
Lender, the percentage identified as its Delayed Draw Term Loan 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.
8
"Delayed Draw Term Loan Committed Amount" shall have the meaning set
forth in Section 2.3(a).
"Delayed Draw Term Loan Fee" shall have the meaning set forth in
Section 2.6(e).
"Delayed Draw Term Loan Maturity Date" shall mean [March 31], 2007.
"Delayed Draw Term Note" or "Delayed Draw Term Notes" shall mean the
promissory notes of the Borrower in favor of each of the Lenders evidencing the
portion of the Delayed Draw Term Loan provided pursuant to Section 2.3(d),
individually or collectively, as appropriate, as such promissory notes may be
amended, modified, restated, supplemented, extended, renewed or replaced from
time to time.
"Documentation Agent" shall have the meaning set forth in the first
paragraph of this Agreement and any successors in such capacity.
"Dollars" and "$" shall mean dollars in lawful currency of the United
States of America.
"Domestic Lending Office" shall mean, initially, the office of each
Lender designated as such Lender's Domestic Lending Office shown on Schedule
9.2; and thereafter, such other office of such Lender as such Lender may from
time to time specify to the Administrative Agent and the Borrower as the office
of such Lender at which Alternate Base Rate Loans of such Lender are to be made.
"Domestic Subsidiary" shall mean any Subsidiary that is organized and
existing under the laws of the United States or any state or commonwealth
thereof or under the laws of the District of Columbia.
"Environmental Laws" shall mean any and all applicable foreign,
Federal, state, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental Authority or other
Requirement of Law (including common law) regulating, relating to or imposing
liability or standards of conduct concerning protection of human health or the
environment, as now or may at any time be in effect during the term of this
Agreement.
"Equity Issuance" shall mean any issuance by any Credit Party or any
Subsidiary to any Person which is not a Credit Party of (a) shares of its
Capital Stock (including, without limitation, issuances of Capital Stock for
cash, issuances pursuant to the exercise of options or warrants and issuances
pursuant to the conversion of any debt securities to equity) or (b) warrants or
options which are exercisable for shares of its Capital Stock. The term "Equity
Issuance" shall not include (i) any Asset Disposition, (ii) any Debt Issuance,
(iii) the IPO, (iv) equity issuances made for the purposes of consummating
Permitted Acquisitions or (v) equity issuances to directors, officers, employees
and consultants of the Parent and its Subsidiaries in connection with stock
option plans or other incentive plans in the ordinary course of business and
consistent with past practices of the Parent and its Subsidiaries.
9
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurodollar Reserve Percentage" shall mean for any day, the percentage
(expressed as a decimal and rounded upwards, if necessary, to the next higher
1/100th of 1%) which is in effect for such day as prescribed by the Federal
Reserve Board (or any successor) for determining the maximum reserve requirement
(including without limitation any basic, supplemental or emergency reserves) in
respect of Eurocurrency liabilities, as defined in Regulation D of such Board as
in effect from time to time, or any similar category of liabilities for a member
bank of the Federal Reserve System in New York City.
"Event of Default" shall mean any of the events specified in Section
7.1; provided, however, with respect to any such event, that any requirement for
the giving of notice or the lapse of time, or both, or any other condition with
respect thereto, has been satisfied.
"Excess Cash Flow" shall mean, with respect to fiscal year 2002, the
period from the Closing Date until June 30, 2002 (calculated on a pro rata basis
for such period), and thereafter with respect to any fiscal year period of the
Parent and its Subsidiaries on a consolidated basis, an amount equal to (a)
Consolidated EBITDA for such period minus (b) Consolidated Capital Expenditures
for such period minus (c) Scheduled Funded Debt Payments made during such period
minus (d) Consolidated Interest Expense for such period (provided, that for the
fiscal quarters ending on or about June 30, 2002, September, 30, 2002 and
December 31, 2002 such calculations shall be based on historical interest
expense and not annualized as set forth in the definition thereof) minus (e)
amounts paid in respect of federal, state, local and foreign income taxes with
respect to such period minus (f) increases (or plus decreases) in Consolidated
Working Capital for such period from the prior period.
"Existing Significant Shareholders" shall mean Whitney & Co., LLC, ▇▇▇▇
& Company, LLC, ▇▇▇▇▇ Brothers ▇▇▇▇▇▇▇▇ & Co. and their Affiliates including any
funds they sponsor or manage; and those certain management shareholders set
forth on Schedule 1.1-2 attached hereto.
"Extension of Credit" shall mean, as to any Lender, the making of a
Loan by such Lender or the issuance of, or participation in, a Letter of Credit
by such Lender.
"Federal Funds Effective Rate" shall have the meaning set forth in the
definition of "Alternate Base Rate".
"Fee Letter" shall mean the letter agreement dated January 31, 2002
addressed to the Parent from First Union and First Union Securities, Inc., as
amended, modified or otherwise supplemented.
"First Union" shall mean First Union National Bank, a national banking
association now known as Wachovia Bank, National Association.
"Fixed Charge Coverage Ratio" shall mean, with respect to the Parent
and its Subsidiaries on a consolidated basis for the four fiscal quarter period
ending on the last day of any fiscal quarter
10
of the Parent, the ratio of (i) the sum of Consolidated EBITDA for such period
minus Consolidated Capital Expenditures for such period (excluding capital
expenditures associated with any Permitted Acquisition consummated on the
Delayed Draw Funding Date) to (ii) the sum of Consolidated Interest Expense for
such period plus Scheduled Funded Debt Payments for such period plus cash taxes
paid during such period. Notwithstanding the foregoing, for purposes of
calculating the Fixed Charge Coverage Ratio for the fiscal quarter periods
ending on or about June 30, 2002, September 20, 2002 and December 31, 2002, the
Fixed Charge Coverage Ratio shall be determined by annualizing the components of
the denominator thereof such that for the fiscal quarter ending on or about June
30, 2002 such components would be multiplied by four (4), for the two fiscal
quarters ending on or about September 30, 2002 such components would be
multiplied by two (2) and for the three fiscal quarters ending on or about
December 31, 2002 such components would be multiplied by one and one-third (1
1/3).
"Flood Hazard Property" shall have the meaning set forth in Section
4.1(f)(iv).
"Foreign Subsidiary" shall mean any Subsidiary that is not a Domestic
Subsidiary.
"Funded Debt" shall mean, with respect to any Person, without
duplication, (a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property purchased by such Person (other than customary
reservations or retentions of title under agreements with suppliers entered into
in the ordinary course of business), (d) all obligations of such Person
incurred, issued or assumed as the deferred purchase price of property or
services purchased by such Person (other than trade debt incurred in the
ordinary course of business and due within six months of the incurrence thereof)
which would appear as liabilities on a balance sheet of such Person, (e) the
principal portion of all obligations of such Person under Capital Leases plus
any accrued interest thereon, (f) all net obligations of such Person under
Hedging Agreements, (g) the maximum amount of all letters of credit issued or
bankers' acceptances facilities created for the account of such Person and,
without duplication, all drafts drawn thereunder (to the extent unreimbursed),
(h) 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, in each case
other than at the option of such issuer, (i) the principal balance outstanding
under any synthetic lease, tax retention operating lease, off-balance sheet loan
or similar off-balance sheet financing product, (j) all Indebtedness of others
of the type described in clauses (a) through (i) hereof 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, (k) all Guaranty Obligations of such Person
with respect to Indebtedness of another Person of the type described in clauses
(a) through (i) hereof, and (l) all Indebtedness of the type described in
clauses (a) through (i) hereof of any partnership or unincorporated joint
venture in which such Person is a general partner or a joint venturer; provided,
however, that Funded Debt shall not include Indebtedness among the Credit
Parties to the extent such Indebtedness would be eliminated on a consolidated
basis.
11
"GAAP" shall mean generally accepted accounting principles in effect in
the United States of America applied on a consistent basis, subject, however, in
the case of determination of compliance with the financial covenants set out in
Section 5.9 to the provisions of Section 1.3.
"Government Acts" shall have the meaning set forth in Section 2.20.
"Governmental Authority" shall mean any nation or government, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Guarantor" shall have the meaning set forth in the first paragraph of
this Agreement, including their respective successors and assigns.
"Guaranty Obligations" shall mean, with respect to any Person, without
duplication, any obligations of such Person (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or collection)
guaranteeing or intended to guarantee any Indebtedness of any other Person in
any manner, whether direct or indirect, and including without limitation any
obligation, whether or not contingent, (i) to purchase any such Indebtedness or
any property constituting security therefor, (ii) 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, (iii) to lease or
purchase Property, securities or services primarily for the purpose of assuring
the holder of such Indebtedness, or (iv) to otherwise assure or hold harmless
the holder of such Indebtedness against loss in respect thereof. The amount of
any Guaranty Obligation hereunder shall (subject to any limitations set forth
therein) be deemed to be an amount equal to the outstanding principal amount (or
maximum principal amount, if larger) of the Indebtedness in respect of which
such Guaranty Obligation is made.
"Guaranty" shall mean the guaranty of the Guarantors set forth in
Article X.
"Hedging Agreements" shall mean, with respect to any Person, any
agreement entered into to protect such Person against fluctuations in interest
rates, or currency or raw materials values, including, without limitation, any
interest rate swap, cap or collar agreement or similar arrangement between such
Person and one or more counterparties, any foreign currency exchange agreement,
currency protection agreements, commodity purchase or option agreements or other
interest or exchange rate or commodity price hedging agreements.
"Indebtedness" shall mean, with respect to any Person, without
duplication, (a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property purchased by such Person (other than customary
reservations or retentions of title under agreements with suppliers entered into
in the ordinary course of business), (d) all obligations of such Person
incurred, 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
12
and due within six months of the incurrence thereof) which would appear as
liabilities on a balance sheet of such Person, (e) the principal portion of all
obligations of such Person under Capital Leases plus any accrued interest
thereon, (f) all net obligations of such Person under Hedging Agreements, (g)
the maximum amount of all letters of credit issued or bankers' acceptances
facilities created for the account of such Person and, without duplication, all
drafts drawn thereunder (to the extent unreimbursed), (h) 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, in each case other than at the
option of such issuer, (i) the principal balance outstanding under any synthetic
lease, tax retention operating lease, off-balance sheet loan or similar
off-balance sheet financing product plus any accrued interest thereon, (j) 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,
(k) all Guaranty Obligations of such Person with respect to Indebtedness of
another Person, (l) the Indebtedness of any partnership or unincorporated joint
venture in which such Person is a general partner or a joint venturer and (m)
all obligations of such Person under take-or-pay or similar arrangements or
under commodities agreements.
"Insolvency" shall mean, with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of such term as used in
Section 4245 of ERISA.
"Insolvent" shall mean being in a condition of Insolvency.
"Intellectual Property" shall mean, collectively, all Copyrights,
Copyright Licenses, Patents, Patent Licenses, Trademarks and Trademark Licenses.
"Interest Coverage Ratio" shall mean, with respect to the Parent and
its Subsidiaries on a consolidated basis for the four fiscal quarter period
ending on the last day of any fiscal quarter of the Parent, the ratio of (a)
Consolidated EBITDA for such period to (b) Consolidated Interest Expense for
such period.
"Interest Determination Date" shall have the meaning assigned thereto
in the definition of "Applicable Percentage".
"Interest Payment Date" shall mean (a) as to any Alternate Base Rate
Loan or Swingline Loan, the last Business Day of each March, June, September and
December during the term of this Agreement and on the applicable Maturity Date,
(b) as to any LIBOR Rate Loan having an Interest Period of three months or less,
the last day of such Interest Period, (c) as to any LIBOR Rate Loan having an
Interest Period longer than three months, each day which is three months after
the first day of such Interest Period and the last day of such Interest Period
and (d) as to any Loan which is the subject of a mandatory prepayment required
pursuant to Section 2.8(b) hereof, the date of such prepayment.
13
"Interest Period" shall mean, with respect to any LIBOR Rate Loan,
(i) initially, the period commencing on the Borrowing
Date or conversion date, as the case may be, with respect to such LIBOR
Rate Loan and ending one, two, three or six months thereafter, and if
available, nine or twelve 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 and, if available, nine
or twelve months thereafter, as selected by the Borrower by irrevocable
notice to the Administrative Agent not less than three Business Days
prior to the last day of the then current Interest Period with respect
thereto;
provided that the foregoing provisions are subject to
the following:
(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 applicable Maturity
Date for such Loan shall end on such Maturity Date;
(E) with regard to the Term Loans, no Interest
Period shall extend beyond any principal amortization payment
date unless the portion of the Term Loans consisting of
Alternate Base Rate Loans together with the portion of the
Term Loans consisting of LIBOR Rate Loans with Interest
Periods expiring prior to or concurrently with the date such
principal amortization payment date is due, is at least equal
to the amount of such principal amortization payment due on
such date; and
(F) no more than eight (8) LIBOR Rate Loans may
be in effect at any time; provided that, for purposes hereof,
LIBOR Rate Loans with different Interest Periods shall be
considered as separate LIBOR Rate Loans, even if they
14
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.
"Investment" shall mean all investments made directly or indirectly in,
to or from any Person, whether in cash or by acquisition of shares of Capital
Stock, property, assets, indebtedness or other obligations or securities or by
loan advance, capital contribution or otherwise.
"IPO" shall mean an equity issuance on or before the Closing Date by
the Parent consisting of an underwritten primary public offering of the common
Capital Stock of the Parent (i) pursuant to the Transaction Documents (including
without limitation an effective registration statement filed with the Securities
and Exchange Commission in accordance with the Securities Act) and (ii)
resulting in net cash proceeds to the Parent of at least $85,000,000; and shall
include the exercise thereafter of any over-allotment option that exists based
on over-subscriptions as of the Closing Date.
"Issuing Lender" shall mean First Union.
"Issuing Lender Fees" shall have the meaning set forth in Section
2.6(c).
"Joinder Agreement" shall mean a Joinder Agreement substantially in the
form of Schedule 5.10, executed and delivered by an Additional Credit Party in
accordance with the provisions of Section 5.10.
"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
2.6(b).
"Leverage Ratio" shall mean, with respect to the Parent and its
Subsidiaries on a consolidated basis for the four fiscal quarter period ending
on the last day of any fiscal quarter of the Parent, the ratio of (a) Funded
Debt of the Parent and its Subsidiaries on a consolidated basis 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
15
LIBO Page as the London interbank offered rate for deposits in Dollars at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period for a term comparable to such Interest Period; provided,
however, if more than one rate is specified on Reuters Screen LIBO Page, the
applicable rate shall be the arithmetic mean of all such rates (rounded upwards,
if necessary, to the nearest 1/100 of 1%). If, for any reason, neither of such
rates is available, then "LIBOR" shall mean the rate per annum at which, as
determined by the Administrative Agent, Dollars in an amount comparable to the
Loans then requested are being offered to leading banks at approximately 11:00
A.M. London time, two (2) Business Days prior to the commencement of the
applicable Interest Period for settlement in immediately available funds by
leading banks in the London interbank market for a period equal to the Interest
Period selected.
"LIBOR Lending Office" shall mean, initially, the office of each Lender
designated as such Lender's LIBOR Lending Office shown on Schedule 9.2; and
thereafter, such other office of such Lender as such Lender may from time to
time specify to the Administrative Agent and the Borrower as the office of such
Lender at which the LIBOR Rate Loans of such Lender are to be made.
"LIBOR Rate" shall mean a rate per annum (rounded upwards, if
necessary, to the next higher 1/100th of 1%) determined by the Administrative
Agent pursuant to the following formula:
LIBOR Rate = LIBOR
------------------------------------
1.00 - Eurodollar Reserve Percentage
"LIBOR Rate Loan" shall mean Loans the rate of interest applicable to
which is based on the LIBOR Rate.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement and any
Capital Lease having substantially the same economic effect as any of the
foregoing).
"Loan" shall mean a Revolving Loan, a Swingline Loan, the Tranche A
Term Loan and/or the Delayed Draw Term Loan, as appropriate.
"LOC Commitment" shall mean the commitment of the Issuing Lender to
issue Letters of Credit and with respect to each Lender, the commitment of such
Lender to purchase participation interests in the Letters of Credit up to such
Lender's LOC Committed Amount as specified in Schedule 2.1(a), 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).
16
"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 (i) the rights and obligations of
the parties concerned or (ii) any collateral security for such obligations.
"LOC Obligations" shall mean, at any time, the sum of (i) 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 (ii) 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
2.4(e) and Section 2.5(b)(ii), as the context may require.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the business, operations, property or financial condition of the Borrower,
individually, or of the Parent and its Subsidiaries taken as a whole, (b) the
ability of the Borrower or any Guarantor to perform its obligations, when such
obligations are required to be performed, under this Agreement, any of the Notes
or any other Credit Document or (c) the validity or enforceability of this
Agreement, any of the Notes or any of the other Credit Documents or the rights
or remedies of the Administrative Agent or the Lenders hereunder or thereunder.
"Material Contract" shall mean any contract or other arrangement (other
than any Credit Document), whether written or oral, to which any Credit Party or
any of its Subsidiaries is a party as to which the breach, nonperformance,
cancellation or failure to renew by any party thereto could reasonably be
expected to have a Material Adverse Effect.
"Material Intellectual Property" shall have the meaning set forth in
Section 3.16.
"Materials of Environmental Concern" shall mean any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum products or
any hazardous or toxic substances, materials or wastes, defined or regulated as
such in or under any Environmental Law, including, without limitation, asbestos,
polychlorinated biphenyls and urea-formaldehyde insulation.
"Maturity Date" shall mean (i) with respect to the Tranche A Term Loan,
the Tranche A Term Loan Maturity Date, (ii) with respect to the Delayed Draw
Term Loan, the Delayed Draw Term Loan Maturity Date and (iii) with respect to
the Revolving Loans and Swingline Loans, the Revolving Commitment Termination
Date.
17
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc.
"Mortgage Instruments" shall have the meaning set forth in Section
4.1(f)(i).
"Mortgage Policies" shall have the meaning set forth in Section
4.1(f)(iii).
"Mortgaged Properties" shall have the meaning set forth in Section
4.1(f)(i).
"Multiemployer Plan" shall mean a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds" shall mean the aggregate cash proceeds received by
any Credit Party or any Subsidiary in respect of any Asset Disposition, Equity
Issuance or Debt Issuance, net of (a) direct costs paid or payable as a result
thereof (including, without limitation, reasonable legal, accounting and
investment banking fees, and sales commissions), (b) taxes paid or payable as a
result thereof and (c) with respect to any asset sold in an Asset Disposition,
amounts paid to retire Indebtedness secured by a Lien on any such asset; it
being understood that "Net Cash Proceeds" shall include, without limitation, any
cash received upon the sale or other disposition of any non-cash consideration
received by any Credit Party or any Subsidiary in respect of any Asset
Disposition, Equity Issuance or Debt Issuance.
"Note" or "Notes" shall mean the Revolving Notes, the Swingline Note,
the Tranche A Term Notes and/or the Delayed Draw Term Notes, 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(e), or as referenced (but not
defined) in Section 2.5(b)(i), as appropriate.
"Notice of Conversion/Extension" shall mean the written notice of
extension or conversion as referenced in Section 2.11.
"Obligations" shall mean, collectively, Loans and LOC Obligations.
"Operating Lease" shall mean, as applied to any Person, any lease
(including, without limitation, leases which may be terminated by the lessee at
any time) of any property (whether real, personal or mixed) which is not a
Capital Lease other than any such lease in which that Person is the lessor.
"Parent" shall have the meaning set forth in the first paragraph of
this Agreement.
"Participants" 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 Letters of Credit as provided in Section 2.4 and in
Swingline Loans as provided in Section 2.5.
18
"Patent License" shall mean all agreements, whether written or oral,
providing for the grant by or to an Credit Party of any right to manufacture,
use or sell any invention covered by a Patent, including, without limitation,
any thereof referred to in Schedule 3.16.
"Patents" shall mean (a) all letters patent of the United States or any
other country and all reissues and extensions thereof, including, without
limitation, any thereof referred to in Schedule 3.16, and (b) all applications
for letters patent of the United States or any other country and all divisions,
continuations and continuations-in-part thereof, including, without limitation,
any thereof referred to in Schedule 3.16.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"Permitted Acquisition" shall mean: (i) any acquisition or any series
of related acquisitions by a Credit Party of the assets or a majority of the
Voting Stock of a Person that is incorporated, formed or organized in the United
States, or any division, line of business or other business unit of a Person
that is incorporated, formed or organized in the United States (such Person or
such division, line of business or other business unit of such Person referred
to herein as the "Target"), in each case that is a type of business (or assets
used in a type of business) permitted to be engaged in by the Credit Parties and
their Subsidiaries pursuant to Section 6.3 hereof, (which acquisition may
include the acquisition of a foreign entity to the extent that foreign entity is
a Subsidiary of the Target), so long as (a) no Default or Event of Default shall
then exist or would exist after giving effect thereto, (b) the Credit Parties
shall demonstrate to the reasonable satisfaction of the Administrative Agent and
the Required Lenders that the Credit Parties will be in compliance on a Pro
Forma Basis with all of the terms and provisions of the financial covenants set
forth in Section 5.9, (c) the Administrative Agent, on behalf of the Lenders,
shall have received (or shall receive in connection with the closing of such
acquisition), to the extent provided in the Security Documents, a first priority
perfected security interest in all property (including, without limitation,
Capital Stock) acquired with respect to the Target and the Target, if a Person,
shall have executed a Joinder Agreement in accordance with the terms of Section
5.10, (d) the Target has earnings before interest, taxes, depreciation and
amortization for the most recent four fiscal quarters prior to the acquisition
date for which financial statements are available in an amount greater than $0,
(e) such acquisition is not a "hostile" acquisition and has been approved by the
Board of Directors and/or shareholders of the applicable Credit Party and the
Target, (f) after giving effect to the acquisition, there shall be at least
$10,000,000 of borrowing availability under the Aggregate Revolving Committed
Amount, (g) the Administrative Agent shall have received a certificate from a
Responsible Officer of the Borrower certifying that, in the reasonable judgment
of the Borrower, the Credit Parties have conducted such financial, legal,
environmental and consulting due diligence with respect to the Target as a
substantially similarly situated prudent purchaser acquiring substantially
similar property and/or assets would customarily conduct and (h) for each
acquisition, total consideration (including, without limitation, assumed
Indebtedness, earnout payments and any other deferred payment) for the net
assets, Capital Stock, division, line of business or other business unit
acquired in such acquisition or series of related acquisitions shall not exceed
(x) for any individual acquisition (or series of related acquisitions) (A)
$5,000,000 in cash (including proceeds of Loans), deferred payments (including
earnout obligations) and the assumption of
19
Indebtedness and (B) $10,000,000 in aggregate consideration (including Capital
Stock of the Parent) and (y) in the aggregate for all acquisitions during any
fiscal year, (A) $10,000,000 in cash (including proceeds of Loans), deferred
payments (including earnout obligations) and the assumption of Indebtedness and
(B) $20,000,000 in aggregate consideration (including Capital Stock of the
Parent); and (ii) any other acquisition approved by the Required Lenders. For
purposes of determining "total consideration" under subclause (h) of clause (i)
above, the amount of any earnout payment or other contingent payment shall be
considered the maximum amount of such earnout payment or contingent payment
assuming all requirements or contingencies to the making of such payment have
been satisfied or are no longer applicable.
"Permitted Investments" shall mean:
(i) cash and Cash Equivalents;
(ii) 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;
(iii) Investments by any Credit Party in, and loans by any
Credit Party to, any other Credit Party;
(iv) loans and advances to officers, directors, employees
and Affiliates in the ordinary course of business in an aggregate
amount not to exceed $300,000 at any time outstanding;
(v) 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;
(vi) Investments, acquisitions or transactions permitted
under Section 6.4(b);
(vii) Permitted Acquisitions;
(viii) Investments existing as of the Closing Date as set
forth on Schedule 1.1-3;
(ix) Investments made by the Credit Parties in Foreign
Subsidiaries not to exceed in the aggregate $1,000,000;
(x) Investments in the form of promissory notes received
by the Credit Parties as consideration for the sale of one or more of
the facilities referenced in Section 6.4(a)(ix); and
(xi) additional loan advances and/or Investments of a
nature not contemplated by the foregoing clauses hereof, provided that
such loans, advances and/or Investments
20
made pursuant to this clause (xi) shall not exceed an aggregate amount
of $100,000 at any time outstanding.
"Permitted Liens" shall mean:
(i) Liens created by or otherwise existing, under or in
connection with this Agreement or the other Credit Documents in favor
of the Administrative Agent or its designee, on behalf of the Lenders;
(ii) Liens in favor of a Lender hereunder in connection
with Hedging Agreements permitted under Section 6.1(e), but only (A) to
the extent such Liens secure obligations under Hedging Agreements with
any Lender or any Affiliate of a Lender, (B) to the extent such Liens
are on the same collateral as to which the Administrative Agent on
behalf of the Lenders also has a Lien and (C) if such provider and the
Lenders shall share pari passu in the collateral subject to such Liens;
(iii) Liens securing purchase money Indebtedness and
Capital Lease Obligations to the extent permitted under Section 6.1(c);
provided, that (A) any such Lien attaches to such property concurrently
with or within 60 days after the acquisition thereof and (B) such Lien
attaches solely to the property so acquired in such transaction any
incidental related contract rights and proceeds;
(iv) Liens for taxes, assessments, charges or other
governmental levies not yet due or as to which the period of grace (not
to exceed 60 days), if any, related thereto has not expired or which
are being contested in good faith by appropriate proceedings, provided
that adequate reserves with respect thereto are maintained on the books
of any Credit Party or its Subsidiaries, as the case may be, in
conformity with GAAP;
(v) carriers', warehousemen's, landlords', mechanics',
materialmen's, repairmen's or other like Liens arising in the ordinary
course of business which are not overdue for a period of more than 60
days or which are being contested in good faith by appropriate
proceedings;
(vi) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation and deposits securing liability to insurance carriers under
insurance or self-insurance arrangements incurred in the ordinary
course of business;
(vii) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business;
(viii) any extension, renewal or replacement (or successive
extensions, renewals or replacements), in whole or in part, of any Lien
referred to in the foregoing clauses; provided that such extension,
renewal or replacement Lien shall be limited to all or a part of the
property which secured the Lien so extended, renewed or replaced;
21
(ix) Liens existing on the Closing Date and set forth on
Schedule 1.1-4; provided that (a) no such Lien shall at any time be
extended to cover property or assets other than the property or assets
subject thereto on the Closing Date and (b) the principal amount of the
Indebtedness secured by such Liens may only be extended, renewed,
refunded or refinanced in accordance with the terms of Section 6.1(b);
(x) easements, rights-of-way, covenants, encroachments,
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 and all title exceptions set forth in the
Mortgage Policies;
(xi) Liens on equipment arising from precautionary UCC
financing statements relating to the lease of such equipment to the
extent permitted by this Agreement;
(xii) Liens arising from judgments, decrees or attachments
in circumstances not constituting an Event of Default under Section
7.1(f);
(xiii) Liens with respect to funds escrowed and/or deposited
in connection with Permitted Acquisitions in an aggregate amount not to
exceed $500,000 for any such Permitted Acquisition;
(xiv) any zoning or similar law or right reserved to or
vested in any Governmental Authority to control or regulate the use of
real property; and
(xv) any right, title or interest of a lessor or sublessor
to levy and distraint under any lease or sublease, whether arising by
statute, contract, common law or otherwise or any other right, title,
interest, claim, power, privilege or remedy under any operating lease
and any lien to which the title of such lessor or sublessor is subject.
"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 any Credit Party
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.
"Pledge Agreement" shall mean the Pledge Agreement dated as of the
Closing Date executed by the Credit Parties in favor of the Administrative
Agent, as amended, modified, restated or supplemented from time to time.
"Prime Rate" shall have the meaning set forth in the definition of
Alternate Base Rate.
22
"Pro Forma Basis" shall mean, with respect to any transaction, that
such transaction shall be deemed to have occurred as of the first day of the
twelve fiscal month period ending as of the most recent fiscal month end
preceding the date of such transaction.
"Pro Forma EBITDA" shall mean Consolidated EBITDA of the Parent and its
Subsidiaries, after giving effect to the IPO and the initial Extensions of
Credit hereunder on a Pro Forma Basis, for the twelve fiscal month period ending
as of the fiscal month end most recently occurring prior to the Closing Date for
which such information is available and which calculations shall have been
reviewed by a nationally recognized accounting firm acceptable to the
Administrative Agent plus any pro forma adjustments approved by the Lenders.
"Properties" shall have the meaning set forth in Section 3.10(a).
"Purchasing Lenders" shall have the meaning set forth in Section
9.6(c).
"Recovery Event" shall mean the receipt by any Credit Party or any of
its Subsidiaries of any cash insurance proceeds or condemnation award payable by
reason of theft, loss, physical destruction or damage, taking or similar event
with respect to any of their respective property or assets.
"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.
"Related Fund" shall mean, with respect to any Lender, any fund or
trust or entity that invests in commercial bank loans in the ordinary course of
business and is advised or managed by (i) such Lender, (ii) an Affiliate of such
Lender, (iii) any other Lender or any Affiliate thereof or (iv) the same
investment advisor as any Person described in clauses (i) - (iii).
"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. ss.4043.
"Required Lenders" shall mean, (i) with respect to determinations
related to any acquisition permitted under clause (ii) of the definition of
Permitted Acquisition, at any time, Lenders holding in the aggregate 75% or more
of (x) the Commitments (and Participation Interests therein) or (y) if the
Commitments have been terminated, the outstanding Loans and Participation
Interests (including the Participation Interests of the Issuing Lender in any
Letters of Credit and of the Swingline Lender in Swingline Loans) and (ii) for
all other matters, at any time, Lenders holding in the aggregate a majority of
(x) the Commitments (and Participation Interests therein) or (y) if the
Commitments have been terminated, the outstanding Loans and Participation
Interests (including the Participation Interests of the Issuing Lender in any
Letters of Credit and of the Swingline Lender in Swingline Loans) provided,
however, that in each case, if any Lender shall be a Defaulting Lender at such
time, then there shall be excluded from the
23
determination of Required Lenders, Obligations (including Participation
Interests) owing to such Defaulting Lender and such Defaulting Lender's
Commitments, or after termination of the Commitments, the principal balance of
the Obligations owing to such Defaulting Lender.
"Requirement of Law" shall mean, as to any Person, the Certificate of
Incorporation and By-laws or other organizational or governing documents of such
Person, and each law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Responsible Officer" shall mean, as to (a) the Parent or the Borrower,
any of the President, the Chairman, the Chief Executive Officer or the Chief
Financial Officer (or, if the Chief Financial Officer is unavailable, the
Controller or Assistant Controller), (b) any other Credit Party, any duly
authorized officer thereof.
"Restricted Payment" shall mean (a) any dividend or other distribution,
direct or indirect, on account of any shares of any class of Capital Stock of
any Credit Party or any of its Subsidiaries, now or hereafter outstanding, (b)
any redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of Capital
Stock of any Credit Party or any of its Subsidiaries, now or hereafter
outstanding, (c) any payment made to retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire shares of any class of
Capital Stock of any Credit Party or any of its Subsidiaries, now or hereafter
outstanding, (d) any payment with respect to any earnout obligation, (e) any
payment or prepayment of principal of, premium, if any, or interest on,
redemption, purchase, retirement, defeasance, sinking fund or similar payment
with respect to, any Subordinated Indebtedness or (f) the payment by any Credit
Party or any of its Subsidiaries of any management or consulting fee to any
Person or of any salary, bonus or other form of compensation to any Person who
is directly or indirectly a significant partner, shareholder, owner or executive
officer of any such Person, to the extent such salary, bonus or other form of
compensation is not included in the corporate overhead of such Credit Party or
such Subsidiary.
"Revolving Commitment" shall mean, with respect to each Lender, the
commitment of such Lender to make Revolving Loans in an aggregate principal
amount at any time outstanding up to such Lender's Revolving Committed Amount.
"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 [March 31], 2007.
"Revolving Committed Amount" shall mean the amount of each Lender's
Revolving Commitment as specified on Schedule 2.1(a), as such amount may be
reduced from time to time in accordance with the provisions hereof.
24
"Revolving Lender" shall mean each Lender with a Revolving Commitment.
"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.
"Scheduled Funded Debt Payments" shall mean, as of any date of
determination for the Credit Parties and their Subsidiaries, the sum of all
scheduled payments of principal on Funded Debt for the applied period ending on
the date of determination (including the principal component of payments due on
Capital Leases during the applicable period ending on the date of
determination).
"Security Agreement" shall mean the Security Agreement dated as of the
Closing Date executed by the Credit Parties in favor of the Administrative
Agent, as amended, modified or supplemented from time to time in accordance with
its terms.
"Securities Act" shall mean the Securities Act of 1933, together with
any amendment thereto or replacement thereof and any rules or regulations
promulgated thereunder.
"Security Documents" shall mean the Security Agreement, the Pledge
Agreement, the Mortgage Instruments and such other documents executed and
delivered in connection with the attachment and perfection of the Administrative
Agent's security interests and liens arising thereunder, including, without
limitation, UCC financing statements.
"Series E Preferred Stock" shall mean that certain 6% Series E
Preferred Stock issued by the Parent as in effect on the Closing Date.
"Single Employer Plan" shall mean any Plan which is not a Multiemployer
Plan.
"Subordinated Indebtedness" shall mean any Indebtedness incurred by any
Credit Party that is specifically subordinated in right of payment to the prior
payment of the Credit Party Obligations on terms acceptable to the
Administrative Agent and the Lenders.
"Subsidiary" shall mean, as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such other
ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers of
such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a
25
"Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a Subsidiary
or Subsidiaries of the Parent.
"Subsidiary Guarantor" shall have the meaning set forth in the first
paragraph of this Agreement.
"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 2.5(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 2.5(a).
"Swingline Lender" shall mean First Union.
"Swingline Loan" or "Swingline Loans" shall have the meaning set forth
in Section 2.5(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 2.5(d), as such promissory note may be amended, modified,
supplemented, extended, renewed or replaced from time to time.
"Syndication Agent" shall have the meaning set forth in the first
paragraph of this Agreement and any successors in such capacity.
"Taxes" shall have the meaning set forth in Section 2.19.
"Term Loans" shall mean collectively, the Tranche A Term Loan and the
Delayed Draw Term Loan.
"Title Insurance Company" shall have the meaning set forth in Section
4.1(f)(iii).
"Trademark License" shall means any agreement, written or oral,
providing for the grant by or to an Credit Party of any right to use any
Trademark, including, without limitation, any thereof referred to in Schedule
3.16.
"Trademarks" shall mean (a) all trademarks, trade names, corporate
names, company names, business names, fictitious business names, trade dress and
service marks, logos and other source or business identifiers, and the goodwill
associated therewith, now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all applications in connection
therewith, whether in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any State thereof or any other
country or any political subdivision
26
thereof, or otherwise, including, without limitation, any thereof referred to in
Schedule 3.16, and (b) all renewals thereof, including, without limitation, any
thereof referred to in Schedule 3.16.
"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".
"Tranche A Term Loan" shall have the meaning set forth in Section
2.2(a).
"Tranche A Term Loan Commitment" shall mean, with respect to each
Lender, the commitment of such Lender to make its portion of the Tranche A Term
Loan in a principal amount equal to such Lender's Tranche A Term Loan Commitment
Percentage of the Tranche A Term Loan Committed Amount (and for purposes of
making determinations of Required Lenders hereunder after the Closing Date, the
principal amount outstanding on the Tranche A Term Loan).
"Tranche A Term Loan Commitment Percentage" shall mean, for any Lender,
the percentage identified as its Tranche A Term Loan 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.
"Tranche A Term Loan Committed Amount" shall have the meaning set forth
in Section 2.2(a).
"Tranche A Term Loan Maturity Date" shall mean [March 31], 2007.
"Tranche A Term Note" or "Tranche A Term Notes" shall mean the
promissory notes of the Borrower in favor of each of the Lenders evidencing the
portion of the Tranche A Term Loan provided pursuant to Section 2.2(d),
individually or collectively, as appropriate, as such promissory notes may be
amended, modified, restated, supplemented, extended, renewed or replaced from
time to time.
"Transaction Documents" shall mean the Form S-1 Registration Statement
filed by the Parent on January 16, 2002, as amended and in effect as of the
Closing Date and such other agreements and documents delivered in connection
with the IPO.
"Transfer Effective Date" shall have the meaning set forth in each
Commitment Transfer Supplement.
"Type" shall mean, as to any Loan, its nature as an Alternate Base Rate
Loan or LIBOR Rate Loan, as the case may be.
"Voting Stock" shall mean, with respect to any Person, Capital Stock
issued by such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even though the right so to vote
may be or have been suspended by the happening of such a contingency.
27
"Works" shall mean all works which are subject to copyright protection
pursuant to Title 17 of the United States Code.
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 Parent delivered to the Lenders;
provided that, if the Borrower notifies the Administrative Agent that it wishes
to amend any covenant in Section 5.9 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 5.9 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 Credit Parties 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, (i) a description in
reasonable detail of any material change in the application of accounting
principles employed in the preparation of such financial statements from those
applied in the most recently preceding quarterly or annual financial statements
as to which no objection shall have been made in accordance with the provisions
above and (ii) a reasonable estimate of the effect on the financial statements
on account of such changes in application.
Notwithstanding the above, the parties hereto acknowledge and agree
that, for purposes of all calculations made in determining compliance for any
applicable period with the financial covenants set forth in Section 5.9
(including without limitation for purposes of the definition of "Pro Forma
Basis" set forth in Section 1.1), after consummation of any Permitted
Acquisition, (A) income statement items and other balance sheet items (whether
positive or negative)
28
attributable to the Target acquired in such transaction shall be included in
such calculations to the extent relating to such applicable period, and (B)
Indebtedness of a Target which is retired in connection with a Permitted
Acquisition shall be excluded from such calculations and deemed to have been
retired as of the first day of such applicable period.
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 Revolving Lender
severally, but not jointly, agrees to make revolving credit loans
("Revolving Loans") to the Borrower from time to time in an aggregate
principal amount of up to TWENTY-FIVE Million DOLLARS ($25,000,000) (as
such aggregate maximum amount may be increased as provided in Section
2.5 or reduced from time to time as provided in Section 2.7, the
"Aggregate Revolving Committed Amount") for the purposes hereinafter
set forth; provided, however, that (i) with regard to each Revolving
Lender individually, the sum of such Revolving Lender's Revolving
Commitment Percentage of outstanding Revolving Loans plus such
Revolving Lender's Revolving Commitment Percentage of outstanding
Swingline Loans plus such Revolving Lender's LOC Commitment Percentage
of LOC Obligations shall not exceed such Revolving Lender's Revolving
Committed Amount, (ii) with regard to the Revolving Lenders
collectively, the sum of the outstanding Revolving Loans plus
outstanding Swingline Loans plus LOC Obligations shall not exceed the
Aggregate Revolving Committed Amount and (iii) no Revolving Loans may
be borrowed on the Closing Date. 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; provided, however, Revolving
Loans made on any of two Business Days following the Closing Date may
only consist of Alternate Base Rate Loans. LIBOR Rate Loans shall be
made by each Revolving 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 11:00 A.M. (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
29
be borrowed, (D) whether the borrowing shall be comprised of
Alternate Base Rate Loans, LIBOR Rate Loans or a combination
thereof, and if LIBOR Rate Loans are requested, the Interest
Period(s) therefor. A form of Notice of Borrowing (a "Notice
of Borrowing") is attached as Schedule 2.1(b)(i). If the
Borrower shall fail to specify in any such Notice of Borrowing
(I) an applicable Interest Period in the case of a LIBOR Rate
Loan, then such notice shall be deemed to be a request for an
Interest Period of one month, or (II) the type of Revolving
Loan requested, then such notice shall be deemed to be a
request for an Alternate Base Rate Loan hereunder. The
Administrative Agent shall give notice to each Revolving
Lender promptly upon receipt of each Notice of Borrowing, the
contents thereof and each such Revolving Lender's share
thereof.
(ii) Minimum Amounts. Except for Mandatory
Borrowings under Section 2.4(e) or 2.5(b)(ii), each Revolving
Loan shall be in a minimum aggregate amount of (A) with
respect to LIBOR Rate Loans, $2,000,000 and in integral
multiples of $1,000,000 in excess thereof and (B) with respect
to Alternate Base Rate Loans, $1,000,000 and in integral
multiples of $500,000 in excess thereof (or the remaining
amount of the Aggregate Revolving Committed Amount, if less).
(iii) Advances. Each Revolving 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 Section 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 Revolving
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, unless accelerated sooner pursuant to Section 7.2.
(d) Interest. Subject to the provisions of Section 2.10,
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 Percentage; 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
30
interest at a per annum rate equal to the sum of the LIBOR
Rate plus the Applicable Percentage.
Interest on Revolving Loans shall be payable in arrears on
each Interest Payment Date, except as otherwise provided in Section
2.8.
(e) Revolving Notes. Each Revolving Lender's Revolving
Committed Amount shall be evidenced by a duly executed promissory note
of the Borrower to such Revolving Lender in substantially the form of
Schedule 2.1(e).
Section 2.2 Tranche A Term Loan Facility.
----------------------------
(a) Tranche A Term Loan. Subject to the terms and
conditions hereof and in reliance upon the representations and
warranties set forth herein, each Lender severally, but not jointly,
agrees to make available to the Borrower on the Closing Date such
Lender's Tranche A Term Loan Commitment Percentage of a term loan in
Dollars (the "Tranche A Term Loan") in the aggregate principal amount
of FORTY MILLION DOLLARS ($40,000,000) (the "Tranche A Term Loan
Committed Amount") for the purposes set forth in Section 3.11. The
Tranche A Term Loan may consist of Alternate Base Rate Loans or LIBOR
Rate Loans, or a combination thereof, as the Borrower may request;
provided, however, the Tranche A Term Loan made on the Closing Date may
only consist of Alternate Base Rate Loans. Amounts repaid on the
Tranche A Term Loan may not be reborrowed.
(b) Repayment of Tranche A Term Loan. The principal
amount of the Tranche A Term Loan shall be repaid in twenty (20)
consecutive quarterly installments as follows:
=====================================================================
Principal Amortization Tranche A Term Loan Principal
Payment Date Amortization Payment
---------------------------------------------------------------------
Fiscal quarter ending on or about $1,333,333.33
September 30, 2002
---------------------------------------------------------------------
Fiscal quarter ending on or about $1,333,333.33
December 31, 2002
---------------------------------------------------------------------
Fiscal quarter ending on or about $1,333,333.34
March 31, 2003
---------------------------------------------------------------------
Fiscal quarter ending on or about $1,500,000
June 30, 2003
---------------------------------------------------------------------
Fiscal quarter ending on or about $1,500,000
September 30, 2003
---------------------------------------------------------------------
31
=====================================================================
Principal Amortization Tranche A Term Loan Principal
Payment Date Amortization Payment
---------------------------------------------------------------------
Fiscal quarter ending on or about $1,500,000
December 31, 2003
---------------------------------------------------------------------
Fiscal quarter ending on or about $1,500,000
March 31, 2004
---------------------------------------------------------------------
Fiscal quarter ending on or about $2,000,000
June 30, 2004
---------------------------------------------------------------------
Fiscal quarter ending on or about $2,000,000
September 30, 2004
---------------------------------------------------------------------
Fiscal quarter ending on or about $2,000,000
December 31, 2004
---------------------------------------------------------------------
Fiscal quarter ending on or about $2,000,000
March 31, 2005
---------------------------------------------------------------------
Fiscal quarter ending on or about $2,500,000
June 30, 2005
---------------------------------------------------------------------
Fiscal quarter ending on or about $2,500,000
September 30, 2005
---------------------------------------------------------------------
Fiscal quarter ending on or about $2,500,000
December 31, 2005
---------------------------------------------------------------------
Fiscal quarter ending on or about $2,500,000
March 31, 2006
---------------------------------------------------------------------
Fiscal quarter ending on or about $3,000,000
June 30, 2006
---------------------------------------------------------------------
Fiscal quarter ending on or about $3,000,000
September 30, 2006
---------------------------------------------------------------------
Fiscal quarter ending on or about $3,000,000
December 31, 2006
---------------------------------------------------------------------
Tranche A Term Loan Maturity Date $3,000,000
=====================================================================
(c) Interest on the Tranche A Term Loan. Subject to the
provisions of Section 2.10, the Tranche A Term Loan shall bear interest
as follows:
(i) Alternate Base Rate Loans. During such
periods as the Tranche A Term Loan 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 Percentage; and
32
(ii) LIBOR Rate Loans. During such periods as the
Tranche A Term Loan 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
Percentage.
Interest on the Tranche A Term Loan shall be payable in
arrears on each Interest Payment Date, subject to Section 2.8.
(d) Tranche A Term Notes. Each Lender's Tranche A Term
Loan Commitment Percentage of the Tranche A Term Loan Committed Amount
shall be evidenced by a duly executed promissory note of the Borrower
to such Lender in substantially the form of Schedule 2.2(d).
Section 2.3 Delayed Draw Term Loan Facility.
-------------------------------
(a) Delayed Draw Term Loan. During the Delayed Draw
Commitment Period, subject to the terms and conditions hereof
(including the requirements set forth in Section 5.14) and in reliance
upon the representations and warranties set forth herein, each Lender
severally agrees to make available to the Borrower on the Delayed Draw
Funding Date such Lender's Delayed Draw Term Loan Commitment Percentage
of a term loan in Dollars (the "Delayed Draw Term Loan") in an
aggregate principal amount of up to TWENTY MILLION DOLLARS
($20,000,000) (the "Delayed Draw Term Loan Committed Amount") for the
purposes set forth in Section 3.11. The Delayed Draw Term Loan may
consist of Alternate Base Rate Loans or LIBOR Rate Loans, or a
combination thereof, as the Borrower may request. LIBOR Rate Loans
shall be made by each Lender at its LIBOR Lending Office and Alternate
Base Rate Loans at its Domestic Lending Office. Amounts repaid on the
Delayed Draw Term Loan may not be reborrowed.
(b) Repayment of Delayed Draw Term Loan. The principal
amount of the Delayed Draw Term Loan shall be repaid in fifteen (15)
consecutive quarterly installments as follows:
=======================================================================
Principal Amortization Delayed Draw Term Loan
Payment Date Principal Amortization Payment*
-----------------------------------------------------------------------
Fiscal quarter ending on or about 5.00%
September 30, 2003
-----------------------------------------------------------------------
Fiscal quarter ending on or about 5.00%
December 31, 2003
-----------------------------------------------------------------------
Fiscal quarter ending on or about 5.00%
March 31, 2004
-----------------------------------------------------------------------
Fiscal quarter ending on or about 5.00%
June 30, 2004
-----------------------------------------------------------------------
33
=======================================================================
Principal Amortization Delayed Draw Term Loan
Payment Date Principal Amortization Payment*
-----------------------------------------------------------------------
Fiscal quarter ending on or about 5.00%
September 30, 2004
-----------------------------------------------------------------------
Fiscal quarter ending on or about 5.00%
December 31, 2004
-----------------------------------------------------------------------
Fiscal quarter ending on or about 5.00%
March 31, 2005
-----------------------------------------------------------------------
Fiscal quarter ending on or about 7.50%
June 30, 2005
-----------------------------------------------------------------------
Fiscal quarter ending on or about 7.50%
September 30, 2005
-----------------------------------------------------------------------
Fiscal quarter ending on or about 7.50%
December 31, 2005
-----------------------------------------------------------------------
Fiscal quarter ending on or about 7.50%
March 31, 2006
-----------------------------------------------------------------------
Fiscal quarter ending on or about 8.75%
June 30, 2006
-----------------------------------------------------------------------
Fiscal quarter ending on or about 8.75%
September 30, 2006
-----------------------------------------------------------------------
Fiscal quarter ending on or about 8.75%
December 31, 2006
-----------------------------------------------------------------------
Delayed Draw Term Loan 8.75%
Maturity Date
-----------------------------------------------------------------------
* to be calculated as a percentage of the actual original
principal amount of the Delayed Draw Term Loan.
(c) Interest on the Delayed Draw Term Loan. Subject to
the provisions of Section 2.10, the Delayed Draw Term Loan shall bear
interest as follows:
(i) Alternate Base Rate Loans. During such
periods as the Delayed Draw Term Loan 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 Percentage; and
(ii) LIBOR Rate Loans. During such periods as the
Delayed Draw Term Loan 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
Percentage.
34
Interest on the Delayed Draw Term Loan shall be payable in
arrears on each Interest Payment Date, subject to Section 2.8.
(d) Delayed Draw Term Notes. Each Lender's Delayed Draw
Term Loan Commitment Percentage of the Delayed Draw Term Loan Committed
Amount shall be evidenced by a duly executed promissory note of the
Borrower to such Lender in substantially the form of Schedule 2.3(d).
(e) Notice of Borrowing. The Borrower shall request the
Delayed Draw Term 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 11:00 a.m. (Charlotte, North
Carolina time ) on the Business Day prior to the Delayed Draw Funding
Date in the case of Alternate Base Rate Loans, and on the third
Business Day prior to the Delayed Draw Funding Date in the case of
LIBOR Rate Loans. Such request for borrowing shall be irrevocable and
shall specify (A) that the Delayed Draw Term Loan is requested, (B) the
date of the Delayed Draw Funding Date (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 such Notice of Borrowing (I) an
applicable Interest Period in the case of a LIBOR Rate Loan, then such
notice shall be deemed to be a request for an Interest Period of one
month, or (II) the type of 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 the Notice of Borrowing with respect to the Delayed Draw
Term Loan, the contents thereof and each such Lender's share thereof.
(f) Delayed Draw Term Loan Advance. Each Lender will make
its Delayed Draw Term Loan Commitment Percentage of the Delayed Draw
Term Loan available to the Administrative Agent for the account of the
Borrower at the office of the Administrative Agent specified in Section
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
Delayed Draw Funding Date 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.
(g) Termination of Delayed Draw Term Loan Commitment. If
a Permitted Acquisition for which the Borrower intends to use the
Delayed Draw Term Loan to fund such acquisition does not occur during
the Delayed Draw Commitment Period, (i) the Delayed Draw Term Loan
Commitment of the Lenders shall terminate automatically as of such date
with no portion of the Delayed Draw Term Loan having been funded to the
35
Borrower, and (ii) the Borrower shall promptly pay to the Lenders any
accrued and unpaid amounts due and owing with respect to the Delayed
Draw Term Loan Fee.
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 Revolving 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 outstanding Revolving Loans
plus outstanding Swingline Loans plus LOC Obligations shall not at any
time exceed the Aggregate 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 of the Parent and
its Subsidiaries 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 the Issuing Lender, no Letter of Credit shall have an
original expiry date more than twelve (12) months from the date of
issuance; provided, however, so long as no Default or Event of Default
has occurred and is continuing and subject to the other terms and
conditions to the issuance of Letters of Credit hereunder, the expiry
dates of Letters of Credit may be extended annually or periodically
from time to time at 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
unless cash collateralized on terms satisfactory to the Administrative
Agent in its reasonable discretion. 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 $100,000,
unless the Issuing Lender otherwise permits in its discretion. First
Union shall be the Issuing Lender on all Letters of Credit issued on or
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.
36
(c) Participations. Each Revolving 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 Revolving 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
Revolving 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
Revolving 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 (with the
proceeds of a Revolving Loan obtained hereunder or otherwise) in same
day funds as provided herein or in the LOC Documents. If the Borrower
shall fail to reimburse the Issuing Lender as provided herein, the
unreimbursed amount of such drawing shall bear interest at a per annum
rate equal to the Alternate Base Rate plus two percent (2%). Unless the
Borrower shall immediately notify the Issuing Lender and the
Administrative Agent of its intent to otherwise reimburse the Issuing
Lender, the Borrower shall be deemed to have requested a 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 Revolving Lenders of the amount
of any unreimbursed drawing and each Revolving 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
Revolving Lender's LOC Commitment Percentage of such unreimbursed
drawing. Such payment shall be made on the day such notice is received
by such Revolving 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
37
is received. If such Revolving Lender does not pay such amount to the
Issuing Lender in full upon such request, such Revolving 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 Revolving 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 Credit Party Obligations
hereunder and shall be made without any offset, abatement, withholding
or reduction whatsoever.
(e) Repayment with Revolving Loans. On any day on which
the Borrower shall have requested, or been deemed to have requested, a
Revolving Loan to reimburse a drawing under a Letter of Credit, the
Administrative Agent shall give notice to the Revolving Lenders that a
Revolving Loan has been requested or deemed requested in connection
with a drawing under a Letter of Credit, in which case a Revolving Loan
borrowing comprised entirely of Alternate Base Rate Loans (each such
borrowing, a "Mandatory Borrowing") shall be immediately made (without
giving effect to any termination of the Commitments pursuant to Section
7.2) pro rata based on each Revolving Lender's respective Revolving
Commitment Percentage (determined before giving effect to any
termination of the Commitments pursuant to Section 7.2) and the
proceeds thereof shall be paid directly to the Issuing Lender for
application to the respective LOC Obligations. Each Revolving 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 Aggregate
Revolving Committed Amount after any such Letter of Credit may have
been drawn upon; provided, however, that in the event any such
Mandatory Borrowing should be less than the minimum amount for
borrowings of Revolving Loans otherwise provided in Section 2.1(b)(ii),
the Borrower shall pay to the Administrative Agent for its own account
an administrative fee of $500. 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), then each such Revolving
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 LOC Obligations;
provided, further, that in the event any Revolving Lender shall fail to
fund its Participation Interest on the
38
day the Mandatory Borrowing would otherwise have occurred, then the
amount of such Revolving Lender's unfunded Participation Interest
therein shall bear interest payable by such Revolving Lender 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 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 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 FIVE MILLION DOLLARS ($5,000,000) (the "Swingline Committed
Amount"), and (ii) the sum of the outstanding Revolving Loans plus
outstanding Swingline Loans plus LOC Obligations shall not exceed the
Aggregate 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 2:00 P.M. (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. The Swingline Lender
will make such Swingline Loan borrowing available to the
Administrative Agent for the account of the Borrower at the
office of the Administrative Agent specified in Section 9.2,
or at such other office as the Administrative Agent may
designate in writing, by 4:00 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
39
amounts made available to the Administrative Agent by the
Swingline Lender and in like funds as received by the
Administrative Agent.
(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 (i) the Revolving Commitment Termination Date, (ii)
the occurrence of any Event of Default described in Section
7.1(e), (iii) upon acceleration of the Credit Party
Obligations hereunder, whether on account of an Event of
Default described in Section 7.1(e) or any other Event of
Default, and (iv) the exercise of remedies in accordance with
the provisions of Section 7.2 hereof (each such Revolving Loan
borrowing made on account of any such deemed request therefor
as provided herein being hereinafter referred to as "Mandatory
Borrowing"). Each Lender hereby irrevocably agrees to make
such Revolving Loans promptly upon any such request or deemed
request on account of each Mandatory Borrowing in the amount
and in the manner specified in the preceding sentence and on
the same such date notwithstanding (I) the amount of Mandatory
Borrowing may not comply with the minimum amount for
borrowings of Revolving Loans otherwise required hereunder,
(II) whether any conditions specified in Section 4.2 are then
satisfied, (III) whether a Default or an Event of Default then
exists, (IV) failure of any such request or deemed request for
Revolving Loans to be made by the time otherwise required in
Section 2.1(b)(i), (V) the date of such Mandatory Borrowing,
or (VI) any reduction in the Revolving Committed Amount or
termination of the Revolving Commitments immediately prior to
such Mandatory Borrowing or Contemporaneously therewith. In
the event that any Mandatory Borrowing cannot for any reason
be made on the date otherwise required above (including,
without limitation, as a result of the commencement of a
proceeding under the Bankruptcy Code), then each Revolving
Lender hereby agrees that it shall forthwith purchase (as of
the date the Mandatory Borrowing would otherwise have
occurred, but adjusted for any payments received from the
Borrower on or after such date and prior to such purchase)
from the Swingline Lender such participations in the
outstanding Swingline Loans as shall be necessary to cause
each such Revolving 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 Revolving Lender shall be
required to pay to the Swingline Lender interest on the
principal amount of
40
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 2.10, Swingline Loans shall bear interest at a
per annum rate equal to the Alternate Base Rate plus the applicable
Percentage for Revolving Loans that are Alternate Base Rate Loans.
Interest on Swingline Loans shall be payable in arrears on each
Interest Payment Date, subject to Section 2.8.
(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 2.5(d).
Section 2.6 Fees.
----
(a) Commitment Fee. In consideration of the Revolving
Commitments, the Borrower agrees to pay to the Administrative Agent for
the ratable benefit of the Revolving Lenders holding Revolving
Commitments a commitment fee (the "Commitment Fee") in an amount equal
to the Applicable Percentage per annum on the average daily unused
amount of the Aggregate Revolving Committed Amount. For purposes of
computation of the Commitment Fee, LOC Obligations shall be considered
usage of the Aggregate Revolving Committed Amount but Swingline Loans
shall not be considered usage of the Aggregate Revolving Committed
Amount; provided, however, that with respect to the Commitment Fee paid
to any Lender that is also the Swingline Lender, Swingline Loans shall
be deemed usage of the Aggregate Revolving Committed Amount. The
Commitment Fee shall be payable quarterly in arrears on the 15th day
following the last day of each fiscal quarter for the prior fiscal
quarter.
(b) Letter of Credit Fees. In consideration of the LOC
Commitments, the Borrower agrees to pay to the Issuing Lender a fee
(the "Letter of Credit Fee") equal to the Applicable Percentage 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-fourth of one
percent (0.25%) 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
fiscal quarter for the prior fiscal quarter.
(c) 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
41
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").
(d) Administrative Fee. The Borrower agrees to pay to the
Administrative Agent the annual administrative fee as described in the
Fee Letter.
(e) Delayed Draw Term Loan Fee. The Borrower agrees to
pay to the Administrative Agent for the ratable benefit of Lenders
holding Delayed Draw Term Loan Commitments from the Closing Date until
the earlier of (x) the Delayed Draw Funding Date and (y) the date on
which the Delayed Draw Term Loan Commitment terminates, a fee (the
"Delayed Draw Term Loan Fee") in an amount equal to 1.00% per annum on
the Delayed Draw Term Loan Committed Amount. The Delayed Draw Term Loan
Fee shall be payable quarterly in arrears on the 15th day following the
last day of each fiscal quarter for the prior fiscal quarter.
Section 2.7 Commitment Reductions.
---------------------
(a) Voluntary Reductions. The Borrower shall have the
right to terminate or permanently reduce the unused portion of the
Aggregate Revolving Committed Amount at any time or from time to time
upon not less than five Business Days' prior notice to the
Administrative Agent (which shall notify the Lenders thereof as soon as
practicable) of each such termination or reduction, which notice shall
specify the effective date thereof and the amount of any such reduction
which shall be in a minimum amount of $1,000,000 or a whole multiple of
$500,000 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 Loans made on the effective date thereof, the
sum of the outstanding Revolving Loans plus outstanding Swingline Loans
plus LOC Obligations would exceed the Aggregate Revolving Committed
Amount as so reduced.
(b) Mandatory Reductions. On any date that the Revolving
Loans are required to be prepaid pursuant to the terms of Section
2.8(b) (ii), (iii), (iv) and (v), the Aggregate Revolving Committed
Amount shall be automatically permanently reduced by the amount of such
required prepayment and/or reduction.
(c) Revolving Commitment Termination Date. The Revolving
Commitment, the Swingline Commitment and the LOC Commitment shall
automatically terminate on the Revolving Commitment Termination Date.
Section 2.8 Prepayments.
-----------
(a) Optional Prepayments. The Borrower shall have the
right to prepay Loans in whole or in part from time to time; provided,
however, that each partial prepayment of any Loan shall, (i) in the
case of Alternate Base Rate Loans, be in a minimum principal
42
amount of $1,000,000 and integral multiples of $500,000 in excess
thereof, (ii) in the case of LIBOR Rate Loans, be in a minimum
principal amount of $2,000,000 and integral multiples of $1,000,000 in
excess thereof, and (iii) in the case of each partial prepayment of a
Swingline Loan, be in a minimum principal amount of $100,000 and
integral multiples of $100,000 in excess thereof. The Borrower shall
give three Business Days' irrevocable notice in the case of LIBOR Rate
Loans and one Business Day's irrevocable notice in the case of
Alternate Base Rate Loans, to the Administrative Agent (which shall
notify the Lenders thereof as soon as practicable). Amounts prepaid
under this Section 2.8(a) shall be applied to the outstanding Loans as
the Borrower may elect; provided that each Lender shall receive its pro
rata share (except with respect to prepayments of Swingline Loans) of
any such prepayment based on its Revolving Commitment Percentage,
Tranche A Term Loan Commitment Percentage or Delayed Draw Term Loan
Commitment Percentage, as applicable. All prepayments under this
Section 2.8(a) shall be subject to Section 2.18, 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 Loans 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 Revolving Loans and the
Swingline Loans may be reborrowed in accordance with the terms hereof.
Amounts prepaid on the Term Loans may not be reborrowed.
(b) Mandatory Prepayments.
(i) Aggregate Revolving Committed Amount. If at
any time after the Closing Date, the sum of the outstanding
Revolving Loans plus outstanding Swingline Loans plus LOC
Obligations shall exceed the Aggregate Revolving Committed
Amount, the Borrower immediately shall prepay the Loans and
cash collateralize the LOC Obligations in an amount sufficient
to eliminate such excess (such prepayment to be applied as set
forth in clause (vi) below).
(ii) Asset Dispositions. Promptly following any
Asset Disposition, the Borrower shall prepay the Loans and
cash collateralize the LOC Obligations in an aggregate amount
equal to the Net Cash Proceeds derived from such Asset
Disposition (such prepayment to be applied as set forth in
clause (vi) below); provided, however, that such Net Cash
Proceeds in an aggregate amount during the term of this
Agreement not to exceed $10,000,000 shall not be required to
be so applied to the extent the Borrower delivers to the
Administrative Agent promptly following such Asset Disposition
a certificate stating that the Credit Parties intend to use
such Net Cash Proceeds to acquire fixed or capital assets used
in the Credit Parties' business within 180 days of the receipt
of such Net Cash Proceeds, it being expressly agreed that any
Net Cash Proceeds not so reinvested shall be applied to prepay
the Loans and cash collateralize the LOC Obligations
immediately thereafter (such prepayment to be applied as set
forth in clause (vi) below).
43
(iii) Issuances. Promptly following receipt by any
Credit Party of proceeds from (A) any Debt Issuance, the
Borrower shall prepay the Loans and cash collateralize the LOC
Obligations in an aggregate amount equal to one hundred
percent (100%) of the Net Cash Proceeds of such Debt Issuance
(such prepayment to be applied as set forth in clause (vi)
below) or (B) any Equity Issuance, the Borrower shall prepay
the Loans and cash collateralize the LOC Obligations in an
aggregate amount equal to one hundred percent (100%) of the
Net Cash Proceeds of such Equity Issuance (such prepayment to
be applied as set forth in clause (vi) below); provided,
however, if after giving effect to such Equity Issuance on a
pro forma basis (taking into account any contemplated
repayments of Indebtedness in connection with such Equity
Issuance) the Leverage Ratio is less than or equal to 2.0 to
1.0, then the Borrower shall not be required to prepay the
Loans and cash collateralize the LOC Obligations with the Net
Cash Proceeds of such Equity Issuance; provided, further that
the Borrower shall only be required to make a prepayment equal
to 50% of the Net Cash Proceeds received in connection with
any Equity Issuance consisting of any secondary public
offering of the Common Stock of the Parent.
(iv) Recovery Event. To the extent of cash
proceeds received in connection with a Recovery Event which
are not applied in accordance with Section 6.4(a)(iii),
promptly following the expiration of the period allowed for
reinvesting of such cash proceeds pursuant to Section
6.4(a)(iii), the Borrower shall prepay the Loans and cash
collateralize the LOC Obligations in an aggregate amount equal
to one-hundred percent (100%) of such cash proceeds (such
prepayment to be applied as set forth in clause (vi) below).
(v) Excess Cash Flow. Within 90 days after the
end of each fiscal year (commencing with the fiscal year
ending June 30, 2002), the Borrower shall prepay the Loans and
cash collateralize the LOC Obligations in an amount equal to
50% of the Excess Cash Flow earned during such prior fiscal
year (or, for the fiscal year ending June 30, 2002, earned
during the period from the Closing Date through the end of
such fiscal year (calculated on a pro rata basis for such
period)) (such prepayments to be applied as set forth in
clause (vi) below); provided, however, if the Leverage Ratio
is less than or equal to 2.25 to 1.00 as of the end of the
fiscal year for which Excess Cash Flow is then being
calculated, then no prepayment shall be required.
(vi) Application of Mandatory Prepayments. All
amounts required to be paid pursuant to this Section 2.8(b)
shall be applied as follows: (A) with respect to all amounts
prepaid pursuant to Section 2.8(b)(i), (1) first, to the
Revolving Loans, (2) second, to the Swingline Loans and (3)
third, to a cash collateral account in respect of LOC
Obligations, (B) with respect to all amounts prepaid pursuant
to Sections 2.8(b)(ii) through (v), (1) first, pro rata to the
Tranche A Term Loan and the Delayed Draw Term Loan (and,
within each such Term Loan, shall be applied ratably to the
remaining principal installments thereof) and (2) second to
the Revolving Loans with a corresponding reduction of
44
the Aggregate Revolving Committed Amount. Within the
parameters of the applications set forth above, prepayments
shall be applied first to Alternate Base Rate Loans and then
to LIBOR Rate Loans in direct order of Interest Period
maturities. Each Lender shall receive its pro rata share
(except with respect to prepayments of Swingline Loans) of any
such prepayment based on its Revolving Commitment Percentage,
Tranche A Term Loan Commitment Percentage or Delayed Draw Term
Loan Commitment Percentage, as applicable. All prepayments
under this Section 2.8(b) shall be subject to Section 2.18 and
be accompanied by interest on the principal amount prepaid
through the date of prepayment.
Section 2.9 Minimum Principal Amount of Tranches; Lending
---------------------------------------------
Offices.
-------
(a) All borrowings, payments and prepayments in respect
of Revolving Loans and the Term 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 and the Term Loans
comprising any borrowing shall be (i) with respect to LIBOR Rate Loans,
$2,000,000 or a whole multiple of $1,000,000 in excess thereof, and
(ii) with respect to Alternate Base Rate Loans, $1,000,000 or a whole
multiple of $500,000 in excess thereof.
(b) LIBOR Rate Loans shall be made by each Lender at its
LIBOR Lending Office and Alternate Base Rate Loans at its Domestic
Lending Office.
Section 2.10 Default Rate and Payment Dates.
------------------------------
The Required Lenders in their discretion may require that 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 at a per annum rate 2% greater than (x) the Alternate Base
Rate plus (y) the Applicable Percentage with respect to Alternate Base Rate
Loans).
Section 2.11 Conversion Options.
------------------
(a) The Borrower may, in the case of Revolving Loans and
the Term 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 2.11.
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
45
LIBOR Rate Loan when any Default or Event of Default has occurred and
is continuing and (ii) partial conversions (x) into LIBOR Rate Loans
shall be in an aggregate principal amount of $2,000,000 or a whole
multiple of $1,000,000 in excess thereof and (y) into Base Rate Loans
shall be in an aggregate principal amount of $1,000,000 or a whole
multiple of $500,000 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
2.11(a); provided, that no LIBOR Rate Loan may be continued as such
when any Default or Event of Default has occurred and is continuing, in
which case such Loan shall be automatically converted to an Alternate
Base Rate Loan at the end of the applicable Interest Period with
respect thereto. If the Borrower shall fail to give timely notice of an
election to continue a LIBOR Rate Loan, or the continuation of LIBOR
Rate Loans is not permitted hereunder, such LIBOR Rate Loans shall be
automatically converted to Alternate Base Rate Loans at the end of the
applicable Interest Period with respect thereto.
Section 2.12 Computation of Interest and Fees.
--------------------------------
(a) Interest payable hereunder with respect to Alternate
Base Rate Loans based on the Prime Rate 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.
(c) It is the intent of the Lenders and the Credit
Parties to conform to and contract in strict compliance with applicable
usury law from time to time in effect. All agreements between the
Lenders and the Credit Parties are hereby limited by the provisions of
this paragraph which shall override and control all such agreements,
whether now existing or hereafter arising and whether written or oral.
In no way, nor in any event or contingency (including but not limited
to prepayment or acceleration of the maturity of any obligation), shall
the interest taken, reserved, contracted for, charged, or received
under this Credit Agreement, under the Notes or otherwise, exceed the
maximum nonusurious amount permissible under applicable law. If, from
any possible
46
construction of any of the Credit Documents or any other document,
interest would otherwise be payable in excess of the maximum
nonusurious amount, any such construction shall be subject to the
provisions of this paragraph and such interest shall be automatically
reduced to the maximum nonusurious amount permitted under applicable
law, without the necessity of execution of any amendment or new
document. If any Lender shall ever receive anything of value which is
characterized as interest on the Loans under applicable law and which
would, apart from this provision, be in excess of the maximum
nonusurious amount, an amount equal to the amount which would have been
excessive interest shall, without penalty, be applied to the reduction
of the principal amount owing on the Loans and not to the payment of
interest, or refunded to the Borrower or the other payor thereof if and
to the extent such amount which would have been excessive exceeds such
unpaid principal amount of the Loans. The right to demand payment of
the Loans or any other Indebtedness evidenced by any of the Credit
Documents does not include the right to receive any interest which has
not otherwise accrued on the date of such demand, and the Lenders do
not intend to charge or receive any unearned interest in the event of
such demand. All interest paid or agreed to be paid to the Lenders with
respect to the Loans shall, to the extent permitted by applicable law,
be amortized, prorated, allocated, and spread throughout the full
stated term (including any renewal or extension) of this Agreement so
that the amount of interest on account of such Indebtedness does not
exceed the maximum nonusurious amount permitted by applicable law.
Section 2.13 Pro Rata Treatment and Payments.
-------------------------------
(a) Pro Rata Treatment. Each borrowing of Revolving Loans
and any reduction of the Revolving Commitments shall be made pro rata
according to the respective Revolving Commitment Percentages of the
Lenders. Except as otherwise provided in this Section or in Section
2.14(a), 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 2.6, 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 2.6 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 payment (other than prepayments) by the
Borrower on account of principal of and interest on the Revolving Loans
and the Term Loans shall be made pro rata according to the respective
amounts due and owing in accordance with Section 2.8 hereof.
Prepayments made pursuant to Section 2.16 shall be applied in
accordance with such section. Each optional prepayment on account of
principal of the Loans shall be applied in accordance with Section
2.8(a) and each mandatory prepayment on account of principal of the
Loans shall be applied in accordance with Section 2.8(b). All payments
(including prepayments) to be made by the Borrower on account of
principal, interest and fees shall be made without defense, set-off or
counterclaim (except as provided in Section 2.19(b)) and shall be made
to the Administrative Agent for the account of the Lenders at the
Administrative Agent's office specified on Schedule 9.2 in Dollars and
in immediately available funds not later than 1:00 P.M. (Charlotte,
North Carolina time) on
47
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.
(b) Allocation of Payments After Event of Default.
Notwithstanding any other provision of this Credit Agreement to the
contrary, after the occurrence and during the continuance of an Event
of Default, all amounts collected or received by the Administrative
Agent or any Lender on account of the Credit Party Obligations or any
other amounts outstanding under any of the Credit Documents or in
respect of the Collateral shall be paid over or delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket
costs and expenses (including without limitation reasonable
attorneys' fees) of the Administrative Agent in connection
with enforcing the rights of the Lenders under the Credit
Documents and any protective advances made by the
Administrative Agent with respect to the Collateral under or
pursuant to the terms of the Security Documents;
SECOND, to payment of any fees owed to the
Administrative Agent;
THIRD, to the payment of all reasonable out-of-pocket
costs and expenses (including without limitation, reasonable
attorneys' fees) of each of the Lenders in connection with
enforcing its rights under the Credit Documents or otherwise
with respect to the Credit Party Obligations owing to such
Lender;
FOURTH, to the payment of all of the Credit Party
Obligations consisting of accrued fees and interest and
including with respect to any Hedging Agreement between any
Credit Party and any Lender, or any Affiliate of a Lender, to
the extent such Hedging Agreement is permitted by Section
6.1(e), any fees, premiums and scheduled periodic payments due
under such Hedging Agreement and any interest accrued thereon;
FIFTH, to the payment of the outstanding principal
amount of the Credit Party Obligations, the payment or cash
collateralization of the outstanding LOC Obligations and
including with respect to any Hedging Agreement between any
Credit Party and any Lender, or any Affiliate of a Lender, to
the extent such Hedging Agreement is permitted by Section
6.1(e), any breakage, termination or other payments due under
such Hedging Agreement and any interest accrued thereon;
48
SIXTH, to all other Credit Party Obligations and
other obligations which shall have become due and payable
under the Credit Documents or otherwise and not repaid
pursuant to clauses "FIRST" through "FIFTH" above; and
SEVENTH, to the payment of the surplus, if any, to
whoever may be lawfully entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be
applied in the numerical order provided until exhausted prior
to application to the next succeeding category; (ii) each of
the Lenders shall receive an amount equal to its pro rata
share (based on the proportion that the then outstanding
Loans, LOC Obligations and obligations outstanding under any
Hedging Agreements held by such Lender (and its Affiliates, in
the case of Hedging Agreement obligations) bears to the
aggregate then outstanding Loans, LOC Obligations and
obligations outstanding under any Hedging Agreements between
any Credit Party and any Lender or any Affiliate of a Lender)
of amounts available to be applied pursuant to clauses
"THIRD", "FOURTH", "FIFTH" and "SIXTH" above; and (iii) to the
extent that any amounts available for distribution pursuant to
clause "FIFTH" above are attributable to the issued but
undrawn amount of outstanding Letters of Credit, such amounts
shall be held by the Administrative Agent in a cash collateral
account and applied (A) first, to reimburse the Issuing Lender
from time to time for any drawings under such Letters of
Credit and (B) then, following the expiration of all Letters
of Credit, to all other obligations of the types described in
clauses "FIFTH" and "SIXTH" above in the manner provided in
this Section 2.13(b).
Section 2.14 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,
which shall be applied to the unfunded Loan. 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
49
annum rate equal to (i) from the Borrower at the applicable rate for
the applicable borrowing pursuant to the Notice of Borrowing and (ii)
from a Lender at the Federal Funds Effective Rate.
(b) Unless the Administrative Agent shall have been
notified in writing by the Borrower, prior to the date on which any
payment is due from it hereunder (which notice shall be effective upon
receipt) that the Borrower does not intend to make such payment, the
Administrative Agent may assume that such Borrower has made such
payment when due, and the Administrative Agent may in reliance upon
such assumption (but shall not be required to) make available to each
Lender on such payment date an amount equal to the portion of such
assumed payment to which such Lender is entitled hereunder, and if the
Borrower has not in fact made such payment to the Administrative Agent,
such Lender shall, on demand, repay to the Administrative Agent the
amount made available to such Lender. If such amount is repaid to the
Administrative Agent on a date after the date such amount was made
available to such Lender, such Lender shall pay to the Administrative
Agent on demand interest on such amount in respect of each day from the
date such amount was made available by the Administrative Agent to such
Lender to the date such amount is recovered by the Administrative Agent
at a per annum rate equal to the Federal Funds Effective Rate.
(c) A certificate of the Administrative Agent submitted
to the Borrower or any Lender with respect to any amount owing under
this Section 2.14 shall be conclusive in the absence of manifest error.
Section 2.15 Inability to Determine Interest Rate.
------------------------------------
Notwithstanding any other provision of this Agreement, if (i) 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 (ii) the Required Lenders shall
reasonably determine (which determination shall be conclusive and binding absent
manifest error) that the LIBOR Rate does not adequately and fairly reflect the
cost to such Lenders of funding LIBOR Rate Loans that the Borrower has requested
be outstanding as a LIBOR Tranche during such Interest Period, the
Administrative Agent shall forthwith give telephone notice of such
determination, confirmed in writing, to the Borrower, and the Lenders at least
two Business Days prior to the first day of such Interest Period. Unless the
Borrower shall have notified the Administrative Agent upon receipt of such
telephone notice that it wishes to rescind or modify its request regarding such
LIBOR Rate Loans, any Loans that were requested to be made as LIBOR Rate Loans
shall be made as Alternate Base Rate Loans and any Loans that were requested to
be converted into or continued as LIBOR Rate Loans shall remain as or 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.
50
Section 2.16 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 to 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 connection with the
foregoing, 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 2.17 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;
51
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 in its sole discretion to be material. Each Lender, upon
determining that any amounts will be payable pursuant to this Section,
will give prompt written notice thereof to the Borrower, which notice
shall show in reasonable detail the basis for calculation of such
additional amounts.
(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 in
its sole discretion 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. Each Lender,
upon determining that any amounts will be payable pursuant to this
Section, will give prompt written notice thereof to the Borrower, which
notice shall show in reasonable detail the basis for calculation of
such additional amounts.
(c) The agreements in this Section 2.17 shall survive the
termination of this Agreement and payment of the Notes and all other
amounts payable hereunder.
52
Section 2.18 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, in connection with LIBOR Rate Loans, 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 and must contain calculations of such additional amount in
reasonable detail) 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 2.19 Taxes.
-----
(a) All payments made by the Borrower hereunder or under
any Note will be, except as provided in Section 2.19(b), made free and
clear of, and without deduction or withholding for, any present or
future taxes, levies, imposts, duties, fees, assessments or other
charges of whatever nature now or hereafter imposed by any United
States 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 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
53
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 2.19
(any such certificate, a "2.19 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 2.19(a),
but subject to the immediately succeeding sentence, (x) the Borrower
shall be entitled, to the extent it is required to do so by law, to
deduct or withhold Taxes imposed by the United States (or any political
subdivision or taxing authority thereof or therein) from interest, fees
or other amounts payable hereunder for the account of any Lender which
is not a United States person (as such term is defined in Section
7701(a)(30) of the Code) for U.S. Federal income tax purposes to the
extent that such Lender has not provided to the Borrower U.S. Internal
Revenue Service Forms that establish a complete exemption from such
deduction or withholding and (y) the Borrower shall not be obligated
pursuant to Section 2.19(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
2.19(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 2.19, the Borrower agrees to pay
additional amounts and to indemnify each Lender in the manner set forth
in Section 2.19(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 (or, as to
Lenders joining this Credit Agreement after the Closing Date, after the
date of such joinder) in any applicable law, treaty, governmental rule,
regulation, guideline or order, or in the interpretation thereof,
relating to the deducting or withholding of Taxes.
54
(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 2.19 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 2.19, 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 2.19 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 2.19 to the Borrower or any other party.
(e) The agreements in this Section 2.19 shall survive the
termination of this Agreement and the payment of the Notes and all
other amounts payable hereunder.
Section 2.20 Indemnification; Nature of Issuing Lender's Duties.
--------------------------------------------------
(a) In addition to its other obligations under Section
2.5, the Borrower hereby agrees to protect, indemnify, pay and save
each Issuing Lender harmless from and against any and all claims,
demands, liabilities, damages, losses, costs, charges and reasonable
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 for: (i) 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) 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
55
thereunder or proceeds thereof, in whole or in part, that may prove to
be invalid or ineffective for any reason; (iii) 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) 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) errors in interpretation of technical terms;
(vi) 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) 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 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 2.20 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 2.20 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 2.20 or elsewhere in this Agreement or in any other Credit
Document, the Borrower shall have no obligation to indemnify the
Issuing Lender in respect of, and the Issuing Lender shall not be
exculpated from, any liability incurred by the Issuing Lender arising
out of the gross negligence or willful misconduct of the Issuing Lender
(including action not taken by the Issuing Lender), as determined by a
court of competent jurisdiction.
Section 2.21 Replacement of Lenders.
----------------------
If any Lender shall become affected by any of the changes or events
described in Sections 2.16, 2.17 or 2.19 (any such Lender being hereinafter
referred to as a "Replaced Lender") and shall petition the Borrower for any
increased cost or amounts thereunder, then in such case, the Borrower may, upon
at least fifteen (15) Business Days' notice to the Administrative Agent and such
Replaced Lender, designate a replacement lender (a
56
"Replacement Lender") acceptable to the Administrative Agent in its reasonable
discretion, to which such Replaced Lender shall, subject to its receipt (unless
a later date for the remittance thereof shall be agreed upon by the Borrower and
the Replaced Lender) of all amounts owed to such Replaced Lender under Sections
2.16, 2.17 or 2.19, assign all (but not less than all) of its rights,
obligations, Loans and Commitment hereunder; provided, that all amounts owed to
such Replaced Lender by the Borrower (except liabilities which by the terms
hereof survive the payment in full of the Loans and termination of this
Agreement) shall be paid in full as of the date of such assignment. Upon any
assignment by any Lender pursuant to this Section 2.21 becoming effective, the
Replacement Lender shall thereupon be deemed to be a "Lender" for all purposes
of this Agreement and such Replaced Lender shall thereupon cease to be a
"Lender" for all purposes of this Agreement and shall have no further rights or
obligations hereunder (other than pursuant to Sections 2.16, 2.17, 2.19, and 9.5
while such Replaced Lender was a Lender). If any Replaced Lender shall refuse to
assign its rights, obligations, Loans and Commitment in accordance with the
terms of this Section 2.21, the Replaced Lender shall cease to be a "Lender" for
all purposes of this Agreement upon payment to the Replaced Lender of all
amounts owing to such Replaced Lender in accordance with the terms of this
Section 2.21 without any further action of such Replaced Lender.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Agreement and to make the
Extensions of Credit herein provided for, the Credit Parties hereby represent
and warrant to the Administrative Agent and to each Lender that:
Section 3.1 Financial Condition.
-------------------
The Borrower has delivered to the Administrative Agent and the Lenders
(a) balance sheets and the related statements of operations, stockholders'
equity and cash flows of the Parent and its Subsidiaries for fiscal years ended
on or about July 1, 2000 and June 30, 2001 audited by Ernst & Young LLP which
present fairly in all material respects the financial condition of the Parent
and its Subsidiaries as of such dates, (b) a company-prepared unaudited balance
sheet and related statements of operations, stockholders' equity and cash flows
for the month ending February 28, 2002, (c) an unaudited pro forma balance sheet
as of December 30, 2001 in form and substance satisfactory to the Administrative
Agent and the Lenders and (d) the projections of the Parent for the five-year
period ending March 31, 2007. Such projections have been prepared by the Parent
in good faith based upon assumptions that were reasonable at the time of such
preparation. All such financial statements, including the related schedules and
notes thereto (if any), have been prepared (to the extent applicable) in
accordance with GAAP applied consistently throughout the periods involved
(subject to year-end audit adjustments and the absence of notes, other than as
to the financial statements in subsection (a), and in all cases except as
otherwise disclosed therein).
57
Section 3.2 No Change.
---------
Since June 30, 2001 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 the other Credit Parties (a) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization, (b) has the requisite power
and authority and the legal right to own and operate all its material property,
to lease the material property it operates as lessee and to conduct the business
in which it is currently engaged, (c) is duly qualified to conduct business and
in good standing under the laws of each jurisdiction where its ownership, lease
or operation of property or the conduct of its business requires such
qualification except to the extent that the failure to so qualify or be in good
standing could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect and (d) is in compliance with all Requirements of Law except to
the extent that the failure to comply therewith could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect. Other than as
expressly described in this Agreement, including without limitation Section
3.27, the business of the Borrower, the other Credit Parties and their
Subsidiaries is not subject to direct governmental regulation other than the
laws and regulations generally applicable to businesses in the jurisdictions in
which each operates. Without in any way limiting the foregoing, the Borrower and
the Credit Parties and their Subsidiaries do not engage in any activities
prohibited by 42 U.S.C. Section 1320a-7b(b)(1) or (b)(2) and 42 U.S.C. Section
1395nn.
Section 3.4 Corporate Power; Authorization; Enforceable
-------------------------------------------
Obligations.
-----------
Each of the Borrower and the other Credit Parties has full corporate or
limited liability company 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 or the other Credit Parties
(other than those which have been obtained) or with the validity or
enforceability of any Credit Document against the Borrower or the other Credit
Parties (except such filings as are necessary in connection with the perfection
of the Liens created by such Credit Documents). Each Credit Document to which it
is a party has been duly executed and delivered on behalf of the Borrower or the
other Credit Parties, as the case may be. Each Credit Document to which it is a
party constitutes a legal, valid and binding obligation of the Borrower or the
other Credit Parties, as the case may be, enforceable against the Borrower or
such other Credit Party, as the case may be, 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).
58
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 under any Material Contract
of the Borrower or any other Credit Party (except those as to which waivers or
consents have been obtained), and will not result in, or require, the creation
or imposition of any Lien on any of its or their respective properties or
revenues pursuant to any Requirement of Law or Contractual Obligation other than
the Liens arising under or contemplated in connection with the Credit Documents.
Neither the Borrower nor any other Credit Party 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.
----------------------
No litigation, investigation, claim, criminal prosecution, civil
investigative demand, imposition of criminal or civil fines and penalties, or
any other proceeding of or before any arbitrator or Governmental Authority is
pending or, to the best knowledge of the Credit Parties, threatened by or
against any Credit Party or any of its Subsidiaries or against any of its or
their respective properties or revenues (a) with respect to the Credit Documents
or any Loan or any of the transactions contemplated hereby, or (b) which, if
adversely determined, could reasonably be expected to have a Material Adverse
Effect.
Section 3.7 Investment Company Act.
----------------------
Neither the Borrower nor any other Credit Party is an "investment
company", or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.
Section 3.8 Margin Regulations.
------------------
No part of the proceeds of any Loan hereunder will be used directly or
indirectly for any purpose which violates, or which would be inconsistent with,
the provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve System as now and from time to time hereafter in effect. The Credit
Parties and their Subsidiaries taken as a group do not own "margin stock" except
as identified in the financial statements referred to in Section 3.1 and the
aggregate value of all "margin stock" owned by the Credit Parties and their
Subsidiaries taken as a group does not exceed 25% of the value of their assets.
Section 3.9 ERISA.
-----
Except as set forth in Schedule 3.9, neither a Reportable Event nor an
"accumulated funding deficiency" (within the meaning of Section 412 of the Code
or Section 302 of ERISA) has occurred during the five-year period prior to the
date on which this representation is made or deemed made with respect to any
Plan, and each Plan has complied in all material respects with the applicable
provisions of ERISA and the Code, except to the extent that any such occurrence
59
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 any Credit Party nor any Commonly Controlled Entity is currently
subject to any liability for a complete or partial withdrawal from a
Multiemployer Plan which could reasonably be expected to have a Material Adverse
Effect.
Section 3.10 Environmental Matters.
---------------------
Except for matters which could not reasonably be expected to have a
Material Adverse Effect:
(a) The facilities and properties owned, leased or
operated by the Borrower and the other Credit Parties or any of their
Subsidiaries (the "Properties") do not contain any Materials of
Environmental Concern in amounts or concentrations which (i) constitute
a violation of, or (ii) could give rise to liability under, any
Environmental Law.
(b) The Properties and all operations of the Borrower and
the other Credit Parties and/or their Subsidiaries at the Properties
are in compliance, and have in the last five years been in compliance,
in all material respects with all applicable Environmental Laws, and
there is no contamination at, under or about the Properties or
violation of any Environmental Law with respect to the Properties or
the Business.
(c) Neither the Borrower nor any of the other Credit
Parties has received any written or actual notice of violation, alleged
violation, non-compliance, liability or potential liability regarding
environmental matters or compliance with Environmental Laws with regard
to any of the Properties or the Business, nor does the Borrower or any
of the other Credit Parties nor any of their Subsidiaries have
knowledge or reason to believe that any such notice will be received or
is being threatened.
(d) Materials of Environmental Concern have not been
transported or disposed of from the Properties in violation of, or in a
manner or to a location which could give rise to liability under any
Environmental Law, nor have any Materials of Environmental Concern been
generated, treated, stored or disposed of at, on or under any of the
Properties in violation of, or in a manner that could give rise to
liability under, any applicable Environmental Law.
(e) No judicial proceeding or governmental or
administrative action is pending or, to the knowledge of the Borrower
and the other Credit Parties, threatened, under any Environmental Law
to which the Borrower or any other Credit Party or any
60
Subsidiary is or will be named as a party with respect to the
Properties or the Business, nor are there any consent decrees or other
decrees, consent orders, administrative orders or other orders, or
other administrative or judicial requirements outstanding under any
Environmental Law with respect to the Properties or the Business.
(f) There has been no release or threat of release of
Materials of Environmental Concern at or from the Properties, or
arising from or related to the operations of the Borrower or any other
Credit Party or any Subsidiary in connection with the Properties or
otherwise in connection with the Business, in violation of or in
amounts or in a manner that could give rise to liability under
Environmental Laws.
Section 3.11 Use of Proceeds.
---------------
The proceeds of the Extensions of Credit shall be used solely by the
Borrower as follows:
(a) with respect to the Revolving Loans and the
Tranche A Term Loan, to (i) finance the IPO and to pay certain
costs, fees and expenses in connection therewith, (ii)
refinance certain existing Indebtedness of the Parent and its
Subsidiaries, (iii) pay fees and expenses owing to the Lenders
and the Administrative Agent in connection with this
Agreement, and (iv) provide for working capital and other
general corporate purposes of the Borrower and its
Subsidiaries, including, without limitation, Permitted
Acquisitions;
(b) with respect to the Delayed Draw Term Loan,
to finance a Permitted Acquisition consummated on the Delayed
Draw Funding Date and to pay certain costs, fees and expenses
in connection therewith; and
(c) 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 Parent or its Subsidiaries in
the ordinary course of business.
Section 3.12 Subsidiaries.
------------
Set forth on Schedule 3.12 is a complete and accurate list of all
Subsidiaries of the Credit Parties. Information on the attached Schedule
includes state or other jurisdiction of incorporation or organization; the
number of shares of each class of Capital Stock or other equity interests
outstanding; the number and percentage of outstanding shares of each class of
Capital Stock; and the number and effect, if exercised, of all outstanding
options, warrants, rights of conversion or purchase and similar rights. To the
extent owned by the Borrower or any of its Subsidiaries, the outstanding Capital
Stock and other equity interests of all such Subsidiaries is validly issued,
fully paid and non-assessable and is owned, free and clear of all Liens (other
than those arising under or contemplated in connection with the Credit
Documents, and other Permitted Liens). Schedule 3.12 may be updated from time to
time by the Borrower by giving written notice thereof to the Administrative
Agent.
61
Section 3.13 Ownership.
---------
Each Credit Party and its Subsidiaries is the owner of, and has good
and marketable title to, all of its respective assets, except as may be
permitted pursuant Section 6.13 hereof, and none of such assets is subject to
any Lien other than Permitted Liens.
Section 3.14 Indebtedness.
------------
Except as otherwise permitted under Section 6.1, the Credit Parties and
their Subsidiaries have no Indebtedness.
Section 3.15 Taxes.
-----
Each of the Credit Parties 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 any of the Credit Parties nor any of its
Subsidiaries are 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 3.16 Intellectual Property.
---------------------
(a) Each of the Credit Parties and its Subsidiaries owns, has a
license to use or otherwise has the legal right to use, all Intellectual
Property necessary for each of them to conduct its business as currently
conducted. Set forth on Schedule 3.16(a) is a list of all material registered
and unregistered Intellectual Property (the "Material Intellectual Property")
owned by each of the Credit Parties and its Subsidiaries or that each of the
Credit Parties or any of its Subsidiaries has the right to use. Except as
disclosed in Schedule 3.16(a) hereto, (a) the specified Credit Party has the
right to use the Material Intellectual Property hereto in perpetuity and without
payment of royalties, (b) all registrations with and applications to
Governmental Authorities in respect of the Material Intellectual Property are
valid and in full force and effect, and (c) there are no restrictions on the
direct or indirect transfer of any Contractual Obligation, or any interest
therein, held by any of the Credit Parties in respect of the Material
Intellectual Property. None of the Credit Parties is in default (or with the
giving of notice or lapse of time or both, would be in default) under any
license to use the Material Intellectual Property; no claim has been asserted
and is pending by any Person challenging or questioning the use of any of the
Material Intellectual Property or the validity or effectiveness of any of the
Material Intellectual Property, nor does the Credit Parties or any of their
Subsidiaries know of any such claim; and, to the knowledge of the Credit Parties
or any of their Subsidiaries, the use of the Material Intellectual Property by
any of the Credit Parties or any of its Subsidiaries does not infringe on the
rights of any Person. The Credit Parties have recorded or deposited with and
paid to the
62
United States Copyright Office, the Register of Copyrights, the Copyrights
Royalty Tribunal or other Governmental Authority, all notices, statements of
account, royalty fees and other documents and instruments required under the
terms and conditions of any Contractual Obligation of the Credit Parties and/or
under Title 17 of the United States Code and the rules and regulations issued
thereunder (collectively, the "Copyright Act") pertaining to all registered
Material Intellectual Property, and are not liable to any Person for copyright
infringement under the Copyright Act or any other law, rule, regulation,
contract or license as a result of their business operations.
(b) Set forth on Schedule 3.16(b) is a list of all Intellectual
Property (whether or not Material Intellectual Property) that is (i) registered
(or the subject of an application for registration) with any Governmental
Authority and is (ii) owned by each of the Credit Parties and its Subsidiaries
or that each of the Credit Parties or any of its Subsidiaries has the right to
use.
(c) Schedules 3.16(a) and (b) may be updated from time to time by
the Borrower to include new Intellectual Property, or to reflect changes to
matters already referenced therein, by giving written notice thereof to the
Administrative Agent.
Section 3.17 Solvency.
--------
The fair saleable value of each Credit Party's assets (including credit
extensions under the Credit Documents and subrogations and contribution claims
in respect thereof), measured on a going concern basis, exceeds all probable
liabilities, including those to be incurred pursuant to this Credit Agreement.
None of the Credit Parties (a) has unreasonably small capital in relation to the
business in which it is or proposes to be engaged or (b) has incurred, or
believes that it will incur after giving effect to the transactions contemplated
by this Credit Agreement, debts beyond its ability to pay such debts as they
become due.
Section 3.18 Investments.
-----------
All Investments of each of the Credit Parties and its Subsidiaries are
Permitted Investments.
Section 3.19 Location of Collateral.
----------------------
Set forth on Schedule 3.19(a) is a list of the Properties of the Credit
Parties and their Subsidiaries with street address, county and state and country
where located. Set forth on Schedule 3.19(b) is a list of all locations where
any tangible personal property of the Credit Parties and their Subsidiaries is
located, including county and state and country where located. Set forth on
Schedule 3.19(c) is the chief executive office and principal place of business
of each of the Credit Parties and their Subsidiaries and the state or other
jurisdiction of incorporation or organization of each such Person. Schedule
3.19(a), 3.19(b) and 3.19(c) may be updated from time to time by the Borrower by
giving written notice thereof to the Administrative Agent.
63
Section 3.20 No Burdensome Restrictions.
--------------------------
None of the Credit Parties or any of its Subsidiaries is a party to any
agreement or instrument or subject to any other obligation or any charter or
corporate restriction or any provision of any applicable law, rule or regulation
which, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
Section 3.21 Brokers' Fees.
-------------
Except as set forth on Schedule 3.21, none of the Credit Parties or any
of its Subsidiaries has any obligation to any Person in respect of any finder's,
broker's, investment banking or other similar fee in connection with any of the
transactions contemplated under the Credit Documents other than the closing and
other fees payable pursuant to this Credit Agreement and the Fee Letter.
Section 3.22 Labor Matters.
-------------
There are no collective bargaining agreements or Multiemployer Plans
covering the employees of any of the Credit Parties or any of its Subsidiaries
as of the Closing Date, other than as set forth in Schedule 3.22 hereto, and
none of the Credit Parties or any of its Subsidiaries (i) has suffered any
material strikes, walkouts, work stoppages or other material labor difficulty
within the last five years, other than as set forth in Schedule 3.22 hereto or
(ii) has knowledge of any potential or pending material strike, walkout or work
stoppage. Other than as set forth on Schedule 3.22, no material unfair labor
practice complaint is pending against any Credit Party or any of its
Subsidiaries or, to the best knowledge of the Credit Parties, before any
Governmental Authority. Schedule 3.22 may be updated from time to time by the
Borrower by giving written notice to the Administrative Agent.
Section 3.23 Security Documents.
------------------
The Security Documents create valid security interests in, and Liens
on, the Collateral purported to be covered thereby, which security interests and
Liens are currently (or will be, upon the filing of appropriate financing
statements and the recordation of the applicable Mortgage Instruments in each
case in favor of the Administrative Agent, on behalf of the Lenders) perfected
security interests and Liens, prior to all other Liens other than Permitted
Liens.
Section 3.24 Accuracy and Completeness of Information.
----------------------------------------
All written factual information heretofore, contemporaneously or
hereafter furnished by or on behalf of any Credit Party or any of its
Subsidiaries to the Administrative Agent or any Lender for purposes of or in
connection with this Agreement or any other Credit Document, or any transaction
contemplated hereby or thereby is or will be true and accurate in all material
respects on the date as of which information is dated or certified 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, any
other Credit Party or any of their Subsidiaries which has, or
64
could reasonably be expected to have, a Material Adverse Effect which fact has
not been set forth herein, in the financial statements of the Parent 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 any Credit
Party to the Administrative Agent and/or the Lenders.
Section 3.25 Consummation of IPO; Representations and Warranties
---------------------------------------------------
from Other Documents.
--------------------
The IPO and related transactions have been consummated substantially in
accordance with the terms of the Transaction Documents. As of the Closing Date,
the Transaction Documents have not been altered, amended or otherwise modified
or supplemented in any material respect nor has any material condition thereof
been waived without the prior written consent of the Administrative Agent.
Section 3.26 Licensing and Accreditation.
---------------------------
Each of the Credit Parties has, to the extent applicable: (i) obtained
and maintains in good standing all required licenses the lack of which could
reasonably be expected to have a Material Adverse Effect; and (ii) to the extent
prudent and customary in the industry in which it is engaged, obtained and
maintains accreditation from all generally recognized accrediting agencies. To
the knowledge of the officers of the Credit Parties, all such required licenses
are in full force and effect on the date hereof and have not been revoked or
suspended or otherwise limited, except to the extent the same could not
reasonably be expected to have a Material Adverse Effect.
Section 3.27 Other Regulatory Protection.
---------------------------
Each of the Credit Parties and its Subsidiaries represent that it does
not manufacture pharmaceutical products and is in compliance with all rules,
regulations and other requirements of the Food and Drug Administration ("FDA"),
the Drug Enforcement Administration ("DEA"), the Federal Trade Commission
("FTC"), the Occupational Safety and Health Administration ("OSHA"), the
Department of Agriculture ("USDA"), the Consumer Product Safety Commission, the
United States Customs Service and the United States Postal Service and other
state or federal regulatory authorities or jurisdictions in which any of the
Credit Parties or any of its Subsidiaries do business or distribute and market
pharmaceutical products, except to the extent that any such noncompliance would
not have a Material Adverse Effect. Neither the FDA, the DEA, the FTC, OSHA, the
USDA, the Consumer Product Safety Commission, nor any other such regulatory
authority has requested (or, to the Credit Parties' knowledge, are considering
requesting) any product recalls or other enforcement actions that (a) if not
complied with would result in a Material Adverse Effect and (b) with which the
Credit Parties have not complied within the time period allowed.
Section 3.28 Material Contracts.
------------------
Schedule 3.28 sets forth a true and correct and complete list of all
Material Contracts currently in effect. All of the Material Contracts are in
full force and effect and no material
65
defaults currently exist thereunder, except to the extent the same does not
constitute an Event of Default. Schedule 3.28 may be updated from time to time
by the Borrower by giving written notice to the Administrative Agent.
Section 3.29 Insurance.
---------
The insurance coverage of the Credit Parties and their Subsidiaries
existing as of the Closing Date is outlined as to carrier, policy number,
expiration date, type and amount on Schedule 3.29 and such insurance coverage
complies with the requirements set forth in Section 5.5(b).
Section 3.30 Classification as Senior Indebtedness.
-------------------------------------
The Credit Party Obligations constitute "Senior Indebtedness" under and
as defined in any agreement governing any outstanding Subordinated Indebtedness
and the subordination provisions set forth in each such agreement are legally
valid and enforceable against the parties thereto.
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.1 Conditions to Closing Date and Initial Extensions of
----------------------------------------------------
Credit.
------
This Agreement shall become effective upon, and the obligation of each
Lender to make the initial Revolving Loans, the initial Swingline Loans and the
Tranche A Term Loan 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, (ii) for the
account of each applicable Lender, a Revolving Note, a Tranche A Term
Note and a Delayed Draw Term Note, (iii) for the account of the
Swingline Lender, the Swingline Note, and (iv) counterparts of the
Security Agreement, the Pledge Agreement and each Mortgage Instrument,
in each case conforming to the requirements of this Agreement and
executed by a duly authorized officer of each party thereto, and in
each case in form and substance reasonably satisfactory to the Lenders.
(b) Authority Documents. The Administrative Agent shall
have received the following:
(i) Articles of Incorporation/Charter Documents.
Copies of the articles of incorporation or other charter
documents, as applicable, of each Credit Party certified to be
true and complete as of a recent date by the appropriate
Governmental Authority of the state of its incorporation.
66
(ii) Resolutions. Copies of resolutions of the
board of directors of each Credit Party approving and adopting
the Credit Documents, the transactions contemplated therein
and authorizing execution and delivery thereof, certified by a
secretary or assistant secretary of such Credit Party
(pursuant to a secretary's certificate in substantially the
form of Schedule 4.1-1 attached hereto) as of the Closing Date
to be true and correct and in force and effect as of such
date.
(iii) Bylaws/Operating Agreement. A copy of the
bylaws or comparable operating agreement of each Credit Party
certified by a secretary or assistant secretary of such Credit
Party (pursuant to a secretary's certificate in substantially
the form of Schedule 4.1-1 attached hereto) as of the Closing
Date to be true and correct and in force and effect as of such
date.
(iv) Good Standing. Copies of (i) certificates of
good standing, existence or its equivalent with respect to the
each Credit Party certified as of a recent date by the
appropriate Governmental Authorities of the state of
incorporation or organization 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 Credit Parties and their
Subsidiaries in such state and (ii) a certificate indicating
payment of all corporate franchise taxes certified as of a
recent date by the appropriate governmental taxing
authorities.
(v) Incumbency. An incumbency certificate of
each Credit Party certified by a secretary or assistant
secretary (pursuant to a secretary's certificate in
substantially the form of Schedule 4.1-1 attached hereto) to
be true and correct as of the Closing Date.
(c) Legal Opinions of Counsel. The Administrative Agent
shall have received opinions of legal counsel (including local counsel
to the extent required by the Administrative Agent) for the Credit
Parties, dated the Closing Date and addressed to the Administrative
Agent and the Lenders, which opinions shall provide, among other
things, that the Credit Parties and their Subsidiaries are in
compliance with all regulatory requirements, corporate instruments and
material agreements on the Closing Date after giving effect to the IPO
and the other transactions contemplated herein and shall otherwise be
in form and substance acceptable to the Administrative Agent.
(d) Reliance. The Administrative Agent shall have
received a copy of each opinion, report, agreement, and other document
required to be delivered pursuant to the Transaction Documents in
connection with the IPO and related transactions, together with
evidence that the Administrative Agent and the Lenders have been
authorized to rely on each such opinion, all in form and substance
reasonably satisfactory to the Administrative Agent.
(e) Personal Property Collateral. The Administrative
Agent shall have received, in form and substance satisfactory to the
Administrative Agent:
67
(i) searches of Uniform Commercial Code filings
in the jurisdiction of the chief executive office of each
Credit Party, the state of incorporation or organization of
each Credit Party and each jurisdiction where any Collateral
is located or where a filing would need to be made in order to
perfect the Administrative Agent's security interest in the
Collateral, copies of the financing statements on file in such
jurisdictions and evidence that no Liens exist other than
Permitted Liens;
(ii) UCC financing statements for each
appropriate jurisdiction as is necessary, in the
Administrative Agent's sole discretion, to perfect the
Administrative Agent's security interest in the Collateral;
(iii) duly executed consents as are necessary, in
the Administrative Agent's sole discretion, to perfect the
Lenders' security interest in the Collateral; and
(iv) in the case of any warehouse, plant or other
real property material to the Credit Parties' business that is
leased by a Credit Party, such estoppel letters, consents and
waivers from the landlords on such real property as may be
required by the Administrative Agent.
(f) Real Property Collateral. The Administrative Agent
shall have received, in form and substance satisfactory to the Agents:
(i) fully executed and notarized mortgages,
deeds of trust or deeds to secure debt (each, as the same may
be amended, modified, restated or supplemented from time to
time, a "Mortgage Instrument" and collectively the "Mortgage
Instruments") encumbering the fee interest in the properties
listed in Schedule 4.1(f)(i)(a) as properties owned by the
Credit Parties and, to the extent required by the
Administrative Agent, the leasehold interest in the properties
listed in Schedule 4.1(f)(i)(b) as properties that are
warehouses, plants or other real properties material to the
conduct of the Credit Parties' business and are leased by the
Credit Parties (each a "Mortgaged Property" and collectively
the "Mortgaged Properties");
(ii) a title report in respect of each of the
Mortgaged Properties;
(iii) with respect to each Mortgaged Property, an
ALTA mortgagee title insurance policies issued by Fidelity
National Title Insurance Company of New York or such other
title insurance company (the "Title Insurance Company")
selected by the Borrower and reasonably acceptable to the
Administrative Agent (the "Mortgage Policies"), in amounts
satisfactory to the Administrative Agent, assuring the
Administrative Agent that each of the Mortgage Instruments
creates a valid and enforceable first priority mortgage lien
on the applicable Mortgaged Property, free and clear of all
defects and encumbrances except Permitted Liens,
68
which Mortgage Policies shall be in form and substance
reasonably satisfactory to the Administrative Agent and shall
provide for affirmative insurance and such reinsurance as the
Administrative Agent may reasonably request, all of the
foregoing in form and substance reasonably satisfactory to the
Administrative Agent;
(iv) evidence as to (A) whether any Mortgaged
Property is in an area designated by the Federal Emergency
Management Agency as having special flood or mud slide hazards
(a "Flood Hazard Property") and (B) if any Mortgaged Property
is a Flood Hazard Property, (1) whether the community in which
such Mortgaged Property is located is participating in the
National Flood Insurance Program, (2) the applicable Credit
Party's written acknowledgment of receipt of written
notification from the Administrative Agent (y) as to the fact
that such Mortgaged Property is a Flood Hazard Property and
(z) as to whether the community in which each such Flood
Hazard Property is located is participating in the National
Flood Insurance Program and (3) copies of insurance policies
or certificates of insurance of the Credit Parties and their
Subsidiaries evidencing flood insurance reasonably
satisfactory to the Administrative Agent and naming the
Administrative Agent as loss payee on behalf of the Lenders;
(v) maps or plats of an as-built survey of the
sites of the Mortgaged Properties certified to the
Administrative Agent and the Title Insurance Company in a
manner reasonably satisfactory to them, dated a date
satisfactory to each of the Administrative Agent and the Title
Insurance Company by an independent professional licensed land
surveyor selected by the Borrower and reasonably satisfactory
to each of the Administrative Agent and the Title Insurance
Company, which maps or plats and the surveys on which they are
based shall be sufficient to delete any standard printed
survey exception contained in the applicable title policy and
be made in accordance with the Minimum Standard Detail
Requirements for Land Title Surveys jointly established and
adopted by the American Land Title Association and the
American Congress on Surveying and Mapping in 1992, and,
without limiting the generality of the foregoing, there shall
be surveyed and shown on such maps, plats or surveys the
following: (A) the locations on such sites of all the
buildings, structures and other improvements and the
established building setback lines; (B) the lines of streets
abutting the sites and width thereof; (C) all access and other
easements appurtenant to the sites necessary to use the sites;
(D) all roadways, paths, driveways, easements, encroachments
and overhanging projections and similar encumbrances affecting
the site, whether recorded, apparent from a physical
inspection of the sites or otherwise known to the surveyor;
(E) any encroachments on any adjoining property by the
building structures and improvements on the sites; and (F) if
the site is described as being on a filed map, a legend
relating the survey to said map;
(vi) satisfactory environmental reviews of all
owned Mortgaged Properties, including but not limited to Phase
I environmental assessments, together with reliance letters in
favor of the Lenders;
69
(vii) opinions of counsel to the Credit Parties
for each jurisdiction in which the Mortgaged Properties are
located;
(viii) to the extent available, zoning letters from
each municipality or other Governmental Authority for each
jurisdiction in which the Mortgaged Properties are located;
(ix) an appraisal of each owned Mortgaged
Property, to be in form and substance satisfactory to the
Administrative Agent; and
(x) to the extent requested by the
Administrative Agent, with respect to each leased Mortgaged
Property (i) a survey certified to the Administrative Agent by
a firm of surveyors reasonably satisfactory to the
Administrative Agent and (ii) a landlord waiver in form and
substance satisfactory to the Administrative Agent.
(g) Liability, Casualty and Business Interruption
Insurance. The Administrative Agent shall have received copies of
insurance policies or certificates of insurance evidencing liability
and casualty insurance meeting the requirements set forth herein or in
the Security Documents and business interruption insurance satisfactory
to the Administrative Agent. The Administrative Agent shall be named as
loss payee or mortgagee, as its interest may appear, and/or additional
insured with respect to any such insurance providing coverage in
respect of any Collateral, and each provider of any such insurance
shall agree, by endorsement upon the policy or policies issued by it or
by independent instruments furnished to the Administrative Agent, that
it will give the Administrative Agent thirty (30) days prior written
notice before any such policy or policies shall be altered or canceled.
(h) Fees. The Administrative Agent and the Lenders shall
have received all fees, if any, owing pursuant to the Fee Letter and
Section 2.6.
(i) Litigation. There shall not exist any material
pending litigation, investigation, bankruptcy or insolvency,
injunction, order or claim affecting or relating to any Credit Party or
any of its Subsidiaries, this Agreement and the other Credit Documents
or the IPO, that has not been settled, dismissed, vacated, discharged
or terminated prior to the Closing Date.
(j) Solvency Certificate. The Administrative Agent shall
have received an officer's certificate prepared by the chief financial
officer of the Borrower as to the financial condition, solvency and
related matters of each Credit Party, in each case after giving effect
to the IPO and the initial borrowings under the Credit Documents, in
substantially the form of Schedule 4.1-2 hereto.
(k) Account Designation Letter. The Administrative Agent
shall have received the executed Account Designation Letter in the form
of Schedule 1.1-1 hereto.
70
(l) Corporate Structure. The corporate, capital and
ownership structure of the Credit Parties and their Subsidiaries (after
giving effect to the IPO) shall be as described in Schedule 3.12, and
shall otherwise be satisfactory to the Administrative Agent and the
Lenders. The Administrative Agent and the Lenders shall be satisfied
with the management of the Credit Parties and their Subsidiaries and
with all legal, tax, accounting, business and other matters relating
the IPO or to the Credit Parties and their Subsidiaries, in each case
after giving effect to the IPO.
(m) Transaction Documents. The Administrative Agent shall
have reviewed and approved in its sole discretion all of the
Transaction Documents and there shall not have been any material
modification, amendment, supplement or waiver to the Transaction
Documents without the prior written consent of the Administrative
Agent, and the IPO shall have been consummated in accordance with the
terms of the Transaction Documents (without waiver of any conditions
precedent to the obligations of any party thereto). The Administrative
Agent shall have received a copy, certified by an officer of the
Borrower as true and complete, of each Transaction Document as
originally executed and delivered, together with all exhibits and
schedules thereto.
(n) IPO Proceeds. The Parent shall have received (or
simultaneously with the closing of the Loans hereunder, the Parent will
receive) net cash equity proceeds from the IPO in an amount not less
than $85,000,000 on terms and conditions reasonably acceptable to the
Administrative Agent.
(o) Consents. The Administrative Agent shall have
received evidence that all governmental, shareholder, board of director
and material third party consents and approvals necessary in connection
with the financings and other transactions contemplated hereby
(including the IPO) 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 such
transactions.
(p) Due Diligence. The Administrative Agent and the
Arranger shall have completed in form and scope reasonably satisfactory
thereto their business, legal, financial and environmental due
diligence of the Credit Parties and their Subsidiaries (including due
diligence relating to management, strategy, material customers and
contracts) and shall be satisfied with the corporate and capital
structure of the Parent and its Subsidiaries in all material aspects.
(q) 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).
(r) Bankruptcy. There shall be no bankruptcy or
insolvency proceedings with respect to the any Credit Party or any of
its Subsidiaries.
71
(s) Material Adverse Effect. No material adverse change
shall have occurred since June 30, 2001 in the business, properties,
operations or financial condition of the Parent or of the Credit
Parties and their Subsidiaries taken as a whole.
(t) Funded Debt. After giving effect to the IPO and the
closing of this Agreement and the initial Extensions of Credit
hereunder, there shall be no more than $40,000,000 in total Funded Debt
(excluding Capital Leases, obligations in respect of Hedging
Agreements, LOC Obligations issued hereunder and the Series E Preferred
Stock) of the Credit Parties and their Subsidiaries on a consolidated
basis (including the initial Extensions of Credit hereunder).
(u) Minimum Pro Forma EBITDA. The Administrative Agent
shall have received evidence satisfactory thereto provided by the
Borrower that Pro Forma EBITDA of the Credit Parties and their
Subsidiaries is not less than $19,000,000 for the twelve fiscal month
period ending as of the fiscal quarter end most recently occurring
prior to the Closing Date for which such information is available.
(v) Maximum Total Leverage Ratio. The Administrative
Agent shall receive evidence satisfactory thereto provided by the
Borrower that the Leverage Ratio of the Credit Parties and their
Subsidiaries as of the Closing Date on a Pro Forma Basis is less than
or equal to 2.25 to 1.0.
(w) Minimum Cash. The Administrative Agent shall received
evidence satisfactory thereto that the Borrower shall have cash on its
balance sheet of at least $30,000,000 on the Closing Date after giving
effect to the transactions contemplated herein (including without
limitation, the IPO, the closing of this Agreement and the initial
Extensions of Credit hereunder).
(x) 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.
(y) Termination of Existing Indebtedness. All existing
Indebtedness for borrowed money of the Credit Parties and their
Subsidiaries (other than the Indebtedness listed on Schedule 6.1(b))
shall have been repaid in full and terminated and all Liens relating
thereto shall have been terminated.
(z) Officer's Certificates. The Administrative Agent
shall have received a certificate executed by a Responsible Officer of
the Borrower as of the Closing Date stating that (i) no action, suit,
investigation or proceeding is pending or, to the knowledge of any
Credit Party, threatened in any court or before any arbitrator or
governmental instrumentality that purports to affect any Credit Party
or the IPO or any other transaction contemplated by the Credit
Documents and the Transaction Documents, if such action, suit,
investigation or proceeding could reasonably be expected to have a
Material Adverse Effect and (ii) immediately after giving effect to
this Credit Agreement (including the initial Extensions of Credit
hereunder), the other Credit Documents, the
72
IPO and the Transaction Documents and all the transactions contemplated
therein to occur on such date, (A) no Default or Event of Default
exists, (B) all representations and warranties contained herein and in
the other Credit Documents are true and correct in all material
respects, and (C) the Credit Parties are in compliance with each of the
financial covenants set forth in Section 5.9 on a pro forma basis
(which for purposes hereof shall be calculated in the manner set forth
on Schedule 4.1(z)), and demonstrating compliance with such financial
covenants.
(aa) 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, other than any Mandatory Borrowing, is subject to the satisfaction of
the following conditions precedent on the date of making such Extension of
Credit:
(a) Representations and Warranties. The representations
and warranties made by the Credit Parties herein, in the Security
Documents 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 except for those representations and
warranties that expressly relate to an earlier date, and with respect
to which, such representations and warranties were true and correct 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 outstanding
Revolving Loans plus outstanding Swingline Loans plus LOC Obligations
shall not exceed the Aggregate Revolving Committed Amount, (ii) the LOC
Obligations shall not exceed the LOC Committed Amount and (iii) the
Swingline Loans shall not exceed the Swingline Committed Amount.
(d) Additional Conditions to Extensions of Credit. If
such Extension of Credit is made pursuant to Sections 2.1, 2.2, 2.3,
2.4 or 2.5, all conditions set forth in such Section shall have been
satisfied.
(e) Additional Conditions to Revolving Loans Made to Fund
Permitted Acquisitions and the Delayed Draw Term Loan. If a Revolving
Loan is requested to fund a Permitted Acquisition or when the Delayed
Draw Term Loan is requested, in addition to the conditions set forth in
Section 2.1 and Section 2.3, as applicable, the Borrower
73
shall deliver to the Administrative Agent a compliance certificate
attaching pro forma financial and other information with respect to the
Credit Parties and their Subsidiaries (after giving effect to the
Permitted Acquisition and the making of the related Revolving Loan
and/or Delayed Draw Term Loan), which compliance certificate shall be
in form and substance reasonably satisfactory to the Administrative
Agent.
Except in connection with Mandatory Borrowings, 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 (e) of this Section have been satisfied.
ARTICLE V
AFFIRMATIVE COVENANTS
The Credit Parties hereby covenant and agree that on the Closing Date,
and thereafter for so long as this Agreement is in effect and until the
Commitments have terminated, no Note remains outstanding and unpaid and the
Credit Party Obligations, together with interest, Commitment Fees and all other
amounts owing to the Administrative Agent or any Lender hereunder, are paid in
full, the Credit Parties shall, and shall cause each of their Subsidiaries, 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 ninety (90) days after the end of each fiscal
year of the Parent, a copy of the consolidated and consolidating
balance sheet of the Parent and its consolidated Subsidiaries as at the
end of such fiscal year and the related consolidated and consolidating
statements of operations, stockholders' equity and of cash flows of the
Parent and its consolidated Subsidiaries for such year, audited (with
respect to the consolidated statements only) by a firm of independent
certified public accountants of nationally recognized standing
reasonably acceptable to the Administrative Agent, in each case setting
forth in comparative form consolidated and consolidating figures for
the preceding fiscal year, reported on without a "going concern" or
like qualification or exception, or qualification indicating that the
scope of the audit was inadequate to permit such independent certified
public accountants to certify such financial statements without such
qualification;
(b) Quarterly Financial Statements. As soon as available
and in any event within (i) sixty (60) days after the end of the fiscal
quarter ending on or about June 30, 2002, a company prepared
consolidated and consolidating balance sheet of the Parent and its
consolidated Subsidiaries as at the end of such period and related
company-prepared consolidated and consolidating statements of
operations, stockholders' equity and of cash
74
flows for the Parent and its consolidated Subsidiaries for such
quarterly period and for the portion of the fiscal year ending with
such period and (ii) forty-five (45) days after the end of the first
three fiscal quarters of each fiscal year of the Parent, a
company-prepared consolidated and consolidating balance sheet of the
Parent and its consolidated Subsidiaries as at the end of such period
and related company-prepared consolidated and consolidating statements
of operations, stockholders' equity and of cash flows for the Parent
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 and consolidating
figures for the corresponding period or periods of the preceding fiscal
year (subject to normal recurring year-end audit adjustments) and
(other than in the case of the statements delivered pursuant to clause
(i)) including management discussion and analysis of operating results
inclusive of operating metrics in comparative form and a summary of
accounts receivable and accounts payable aging reports in form
reasonably satisfactory to the Lenders;
(c) Monthly Financial Statements. As soon as available
and in any event within thirty (30) days after the end of each fiscal
month of the Parent (other than at the end of a fiscal quarter, in
which case forty-five (45) days after the end thereof), a
company-prepared consolidated balance sheet of the Parent and its
consolidated Subsidiaries as at the end of such period and related
company-prepared consolidated statements of operations, stockholders'
equity and of cash flows for the Parent and its consolidated
Subsidiaries for such monthly period and for the portion of the fiscal
year ending with such period, in each case setting forth in comparative
form consolidated figures for the corresponding period or periods of
the preceding fiscal year (subject to normal recurring year-end audit
adjustments); and
(d) Annual Budget Plan. Within fifteen (15) days
following the first meeting of the Board of Directors of the Parent
occurring within a fiscal year, but in any event within sixty (60) days
after the beginning of each fiscal year, a copy of the detailed annual
budget or plan of the Parent for such next fiscal year on a quarterly
basis, in form and detail reasonably acceptable to the Administrative
Agent and the Required Lenders, together with a summary of the material
assumptions made in the preparation of such annual budget or plan;
all such financial statements to present fairly the information contained
therein and to be in all material respects prepared in reasonable detail and, in
the case of the annual and quarterly financial statements provided in accordance
with subsections (a) and (b) above, in accordance with GAAP applied consistently
throughout the periods reflected therein (subject, with respect to interim
financial statements, to normal year-end audit adjustments and the absence of
notes) 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.
75
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 which had
occurred and was then continuing, 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, no Default or Event of Default had
occurred and was then continuing except as specified in such
certificate and such certificate shall include the calculations in
reasonable detail required to indicate compliance with Section 5.9 as
of the last day of such period;
(c) within ten (10) 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 Parent sends to its members and equity holders
generally, and within ten (10) days after the same are filed, copies of
all financial statements and non-confidential reports which the Parent
may make to, or file with the Securities and Exchange Commission or any
successor or analogous Governmental Authority;
(d) within ninety (90) days after the end of each fiscal
year of the Parent, a certificate containing information regarding the
amount of all Asset Dispositions, Debt Issuances, and Equity Issuances
that were made during the prior fiscal year and amounts received in
connection with any Recovery Event during the prior fiscal year;
(e) promptly upon receipt thereof, a copy of any other
report or "management letter" submitted by independent accountants to
any Credit Party or any of its Subsidiaries in connection with any
annual, interim or special audit of the books of such Person; and
(f) promptly, such additional financial and other
information as the Administrative Agent, on behalf of any Lender, may
from time to time reasonably request.
Section 5.3 Payment of Obligations.
----------------------
Pay, discharge or otherwise satisfy at or before maturity or before
they become delinquent, as the case may be, all its taxes (Federal, state, local
and any other taxes) and all its other material obligations and liabilities 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 and
liabilities, except when the amount or validity of such obligations, liabilities
and costs is currently being contested in good faith by appropriate proceedings
and reserves, if applicable, in
76
conformity with GAAP with respect thereto have been provided on the books of the
Parent 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 conducted by
it on the Closing Date and preserve, renew and keep in full force and effect its
corporate existence and take all reasonable action to maintain all rights,
privileges and franchises necessary or desirable in the normal conduct of its
business; and comply with all Contractual Obligations and Requirements of Law
applicable to it; except, in each case, (x) as otherwise permitted under this
Agreement or any other Credit Document or (y) 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 (including
without limitation its material tangible Collateral) 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; and furnish to the Administrative Agent, upon written
request, full information as to the insurance carried; provided,
however, that the Credit Parties and their Subsidiaries may maintain
self insurance plans to the extent companies of similar size and in
similar businesses do so. The Administrative Agent shall be named as
loss payee or mortgagee, as its interest may appear, and/or additional
insured with respect to any such insurance providing coverage in
respect of any Collateral, and each provider of any such insurance
shall agree, by endorsement upon the policy or policies issued by it or
by independent instruments furnished to the Administrative Agent, that
it will give the Administrative Agent thirty (30) days prior written
notice before any such policy or policies shall be altered or canceled,
and that no act or default of any Credit Party or any of its
Subsidiaries or any other Person shall affect the rights of the
Administrative Agent or the Lenders under such policy or policies; and
(c) In case of any material loss, damage to or
destruction of the Collateral of any Credit Party or any material part
thereof, such Credit Party shall promptly give written notice thereof
to the Administrative Agent generally describing the nature and extent
of such damage or destruction. In case of any loss, damage to or
destruction of the Collateral of any Credit Party or any material part
thereof, such Credit Party, whether or not the insurance proceeds, if
any, received on account of such damage or destruction shall be
sufficient for that purpose, at such Credit Party's cost and expense,
will promptly repair or replace the Collateral of such Credit Party so
lost, damaged or destroyed, other than in connection with Recovery
Events for which the Borrower has prepayed the Loans with the proceeds
therefrom in accordance with Section 2.8(b)(iv).
77
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 (provided that if no Event of Default
has occurred and is continuing such visits shall be coordinated through the
Administrative Agent), 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 a Credit Party or a Subsidiary thereof may not
disclose without violation of a confidentiality obligation binding upon it) at
any reasonable time and as often as may reasonably be desired, and to discuss
the business, operations, properties and financial and other condition of the
Credit Parties and their Subsidiaries with officers and employees of the Credit
Parties and their Subsidiaries and with its independent certified public
accountants, in each case at the Borrower's reasonable expense.
Section 5.7 Notices.
-------
Give notice in writing to the Administrative Agent (which shall
promptly transmit such notice to each Lender) of:
(a) promptly, but in any event within two (2) Business
Days after any Credit Party knows or has reason to know thereof, the
occurrence of any Default or Event of Default;
(b) promptly, any default or event of default under any
Contractual Obligation of any Credit Party or any of its Subsidiaries
which could reasonably be expected to have a Material Adverse Effect or
involve a monetary claim in excess of $1,000,000;
(c) promptly, any litigation, or any investigation or
proceeding known to a Credit Party, affecting any Credit Party or any
of its Subsidiaries which, if adversely determined, could reasonably be
expected to have a Material Adverse Effect;
(d) as soon as possible and in any event within thirty
(30) days after any Credit Party knows 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 any Credit
Party or any Commonly Controlled Entity or any Multiemployer Plan with
respect to the withdrawal from, or the terminating, Reorganization or
Insolvency of, any Plan;
(e) promptly, after any Credit Party becomes involved in
a pending civil or criminal investigation, criminal action or civil
proposed debarment, exclusion or other sanctioning action related to
any Federal or state healthcare program; and
78
(f) 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 Environmental Laws.
------------------
(a) Comply in all material respects with, and ensure
compliance in all material respects by all tenants and subtenants, if
any, with, all applicable Environmental Laws and obtain and comply in
all material respects with and maintain, and ensure that all tenants
and subtenants obtain and comply in all material respects with and
maintain, any and all licenses, approvals, notifications, registrations
or permits required by applicable Environmental Laws, in each case
except to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect;
(b) Conduct and complete all investigations, studies,
sampling and testing, and all remedial, removal and other actions
required under Environmental Laws and promptly comply in all material
respects with all lawful orders and directives of all Governmental
Authorities regarding Environmental Laws, in each case except to the
extent that the same are being contested in good faith by appropriate
proceedings and the pendency of such proceedings could not reasonably
be expected to have a Material Adverse Effect; and
(c) Defend, indemnify and hold harmless the
Administrative Agent and the Lenders, and their respective employees,
agents, officers and directors and affiliates, from and against any and
all claims, demands, penalties, fines, liabilities, settlements,
damages, costs and reasonable expenses of whatever kind or nature known
or unknown, contingent or otherwise, arising out of, or in any way
relating to the violation of, noncompliance with or liability under,
any Environmental Law applicable to the operations of the any Credit
Party or any of its Subsidiaries or the Properties, or any orders,
requirements or demands of Governmental Authorities related thereto,
including, without limitation, reasonable attorney's and consultant's
fees, investigation and laboratory fees, response costs, court costs
and litigation expenses, except to the extent that any of the foregoing
arise out of the gross negligence or willful misconduct of the party
seeking indemnification therefor. The agreements in this paragraph
shall survive repayment of the Notes and all other amounts payable
hereunder.
79
Section 5.9 Financial Covenants.
-------------------
Commencing on the day immediately following the Closing Date, each of
the Credit Parties 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 Parent occurring during the periods
indicated below, shall be less than or equal to the following:
Period Ratio
------ -----
Closing Date through and including the fiscal quarter 2.50 to 1.00
ending on or about June 30, 2003
Thereafter 2.25 to 1.00
(b) Fixed Charge Coverage Ratio. The Fixed Charge
Coverage Ratio, as of the last day of each fiscal quarter of the Parent
occurring during the periods indicated below, shall be greater than or
equal to the following:
Period Ratio
------ -----
Closing Date through and including the fiscal quarter 1.25 to 1.00
ending on or about June 30, 2002
Thereafter, through and including the fiscal quarter 1.15 to 1.00
ending on or about September 30, 2002
Thereafter, through and including the fiscal quarter 1.25 to 1.00
ending on or about December 31, 2002
Thereafter 1.50 to 1.00
(c) Interest Coverage Ratio. The Interest Coverage Ratio,
as of the last day of each fiscal quarter of the Parent (ending on or
after the Closing Date) occurring during the periods indicated below,
shall be greater than or equal to the following:
Period Ratio
------ -----
Closing Date through and including the fiscal quarter 3.50 to 1.00
ending on or about September 30, 2002
Thereafter, through and including the fiscal quarter 4.00 to 1.00
ending on or about March 31, 2003
Thereafter 4.50 to 1.00
80
(d) Consolidated Capital Expenditures. Consolidated
Capital Expenditures as of the end of each fiscal year of the Parent
indicated below shall be less than or equal to the following:
Fiscal Year Amount
----------- ------
2002 $12,000,000
2003 $14,700,000
2004 $16,800,000
2005 $18,900,000
2006 $21,000,000
2007 $23,100,000
plus the unused amount available for Consolidated Capital Expenditures
under this Section 5.9 for the immediately preceding fiscal year
(excluding any carry forward available from any prior fiscal year),
provided, that with respect to any fiscal year, Capital Expenditures
made during any such fiscal year shall be deemed to be made first with
respect to the applicable limitation for such year and then with
respect to any carry forward amount to the extent applicable.
Section 5.10 Additional Subsidiary Guarantors.
--------------------------------
The Credit Parties will cause each of their Domestic Subsidiaries,
whether newly formed, after acquired or otherwise existing, to promptly become a
Guarantor hereunder by way of execution of a Joinder Agreement. The guaranty
obligations of any such Additional Credit Party shall be secured by, among other
things, the Collateral of the Additional Credit Party and such Domestic
Subsidiary shall execute and deliver to the Administrative Agent such Security
Documents, legal opinions and related documents as the Administrative Agent may
reasonably request with respect to such Collateral.
Section 5.11 Compliance with Law.
-------------------
Each Credit Party will, and will cause each of its Subsidiaries to, (a)
comply with all laws, rules, regulations and orders, and all applicable
restrictions imposed by all Governmental Authorities, 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 and
(b) conform with and duly observe all laws, rules and regulations and all other
valid requirements of any regulatory authority with respect to the conduct of
its business, and all laws, rules and regulations of Governmental Authorities,
pertaining to the business of the Credit Parties if noncompliance with any such
law, rule, regulation or other requirement could reasonably be expected to have
a Material Adverse Effect; and (c) obtain and maintain all licenses, permits,
certifications and approvals of all applicable Governmental Authorities as are
required for the conduct of its business as currently conducted and herein
contemplated, including without limitation professional licenses, if failure to
do so could have a Material Adverse Effect.
81
Section 5.12 Pledged Assets.
--------------
Each Credit Party will be, and will cause each of its Subsidiaries to
be, subject at all times to a first priority, perfected Lien with respect to all
(or such lesser portion as the Administrative Agent may agree) of such Credit
Party's or such Subsidiary's real property and tangible and intangible personal
property (subject in each case to Permitted Liens) in favor of the
Administrative Agent pursuant to the terms and conditions of the Security
Documents or such other security documents as the Administrative Agent shall
reasonably request. Each Credit Party shall, and shall cause each of its
Subsidiaries to, adhere to the covenants set forth in the Security Documents.
Section 5.13 Interest Rate Protection Agreements.
-----------------------------------
The Borrower shall, (i) within 90 days after the Closing Date, enter
into interest rate protection agreements protecting against fluctuations in
interest rates, which agreements shall provide for coverage in a minimum amount
of at least 50% of the Tranche A Term Loan for a period of not less than 3 years
and (ii) within 90 days after the Delayed Draw Funding Date, enter into interest
rate protection agreements protecting against fluctuations in interest rates,
which agreements shall provide for coverage in a minimum amount of at least 50%
of the Delayed Draw Term Loan for a period of not less than 3 years, in each
case on terms reasonably satisfactory to the Administrative Agent.
Section 5.14 Further Assurances.
------------------
The Credit Parties shall, within 90 days after the Closing Date,
deliver to the Administrative Agent those documents required pursuant to Section
4.1(f) with respect to the facility located in Pittsfield, Massachusetts, to the
extent such facility has not been sold as of such date as permitted by Section
6.4(a)(ix).
ARTICLE VI
NEGATIVE COVENANTS
The Credit Parties hereby covenant and agree that on the Closing Date,
and thereafter for so long as this Agreement is in effect and until the
Commitments have terminated, no Note remains outstanding and unpaid and the
Credit Party Obligations, together with interest, Commitment Fee and all other
amounts owing to the Administrative Agent or any Lender hereunder, are paid in
full that:
Section 6.1 Indebtedness.
------------
No Credit Party will, nor will it permit any Subsidiary to, contract,
create, incur, assume or permit to exist any Indebtedness, except:
82
(a) Indebtedness arising or existing under this Agreement
and the other Credit Documents;
(b) Indebtedness of the Parent and its Subsidiaries
existing as of the Closing Date as referenced in the financial
statements referenced in Section 3.1 (and set out more specifically in
Schedule 6.1(b)) hereto and renewals, refinancings or extensions
thereof in a principal amount not in excess of that outstanding as of
the date of such renewal, refinancing or extension;
(c) Indebtedness of the Borrower and its Subsidiaries
incurred after the Closing Date consisting of Capital Leases or
Indebtedness incurred to provide all or a portion of the purchase price
or cost of construction of an asset provided that (i) such Indebtedness
when incurred shall not exceed the purchase price or cost of
construction of such asset; (ii) no such Indebtedness shall be
refinanced for a principal amount in excess of the principal balance
outstanding thereon at the time of such refinancing; and (iii) the
total amount of all such Indebtedness (x) incurred in any fiscal year
shall not exceed $1,500,000 and (y) outstanding at any time shall not
exceed $4,000,000 in the aggregate;
(d) Unsecured intercompany Indebtedness among the Credit
Parties, provided that any such Indebtedness shall be (i) fully
subordinated to the Credit Party Obligations hereunder on terms
reasonably satisfactory to the Administrative Agent and (ii) evidenced
by promissory notes which shall be pledged to the Administrative Agent
as Collateral for the Credit Party Obligations;
(e) Indebtedness owing from Foreign Subsidiaries to the
Credit Parties to the extent permitted under Section 6.5;
(f) Indebtedness and obligations owing under Hedging
Agreements entered into pursuant to Section 5.13 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;
(g) Indebtedness and obligations of Credit Parties owing
under documentary letters of credit for the purchase of goods or other
merchandise (but not under standby, direct pay or other letters of
credit except for the Letters of Credit hereunder) generally;
(h) Guaranty Obligations in respect of Indebtedness of a
Credit Party to the extent such Indebtedness is permitted to exist or
be incurred pursuant to this Section 6.1;
(i) Indebtedness consisting of earnout obligations
incurred in connection with Permitted Acquisitions;
(j) Indebtedness in the form of subordinated seller notes
or redeemable preferred stock issued in connection with Permitted
Acquisitions; and
83
(k) other Indebtedness of the Parent and its Subsidiaries
which does not exceed $1,000,000 in the aggregate at any time
outstanding.
Section 6.2 Liens.
-----
No Credit Party will, nor will it permit any Subsidiary to, contract,
create, incur, assume or permit to exist any Lien with respect to any of its
property or assets of any kind (whether real or personal, tangible or
intangible), whether now owned or hereafter acquired, except for Permitted
Liens.
Section 6.3 Nature of Business.
------------------
No Credit Party will, nor will it permit any Subsidiary to, alter the
character of its business in any material respect from the business as conducted
by the Borrower and its Subsidiaries as of the Closing Date and any reasonable
extensions thereof (collectively, the "Business").
Section 6.4 Consolidation, Merger, Sale or Purchase of Assets,
--------------------------------------------------
etc.
---
No Credit Party will, nor will it permit any Subsidiary to,
(a) dissolve, liquidate or wind up its affairs, sell,
transfer, lease (as lessor) or otherwise dispose of its property or
assets or agree to do so at a future time except the following, without
duplication, shall be expressly permitted:
(i) the sale, transfer, lease or other
disposition of inventory and materials in the ordinary course
of business;
(ii) the sale, transfer or other disposition of
cash and Cash Equivalents;
(iii) (A) the disposition of property or assets as
a direct result of a Recovery Event or (B) the sale, lease,
transfer or other disposition of machinery, parts and
equipment no longer used or useful in the conduct of the
business of the Parent or any of its Subsidiaries, so long as
the net proceeds therefrom are used to replace such machinery,
parts and equipment or to purchase or otherwise acquire new
assets or property within 180 days of receipt of the net
proceeds;
(iv) the sale, lease or transfer of property or
assets from the Borrower to another Credit Party;
(v) the sale, lease or transfer of property or
assets from a Credit Party (other than the Borrower) to the
Borrower or another Credit Party;
(vi) the transfer of assets in connection with
the merger of a Credit Party or a Subsidiary permitted
pursuant to subsection (b) below;
84
(vii) the transfer of assets by any Credit Party
to Foreign Subsidiaries to the extent permitted under Section
6.5;
(viii) the transfer of assets of any Subsidiary to
a Credit Party in connection with the voluntary dissolution or
liquidation of any such Subsidiary;
(ix) the sale or other disposition of the
facilities located in East Longmeadow, Massachusetts,
Pittsfield, Massachusetts and Danbury, Connecticut; and
(x) the sale, lease or transfer of property or
assets not to exceed $1,000,000 in the aggregate in any fiscal
year;
provided, that, in the case of clauses (ii), (iii), and (x) above, at
least 75% of the consideration received therefor by the Borrower or any
other Credit Party is in the form of cash or Cash Equivalents;
provided, further, that with respect to transactions permitted
hereunder only, the Administrative Agent shall be entitled, without the
consent of the Required Lenders, to release its Liens relating to the
particular assets transferred; or
(b) (i) purchase, lease (as lessee) or otherwise acquire
(in a single transaction or a series of related transactions) the
property or assets of any Person (other than purchases, leases or other
acquisitions of inventory, materials, property and equipment permitted
hereunder or otherwise in the ordinary course of business, except as
otherwise limited or prohibited herein) or (ii) enter into any
transaction of merger or consolidation, except for (A) investments or
acquisitions permitted pursuant to Section 6.5, (B) the merger or
consolidation of a Credit Party or Subsidiary with and into another
Credit Party and (C) the dissolution or liquidation of a Subsidiary;
provided that if (x) the Borrower is a party thereto, the Borrower will
be the surviving corporation and (y) if a Credit Party is a party
thereto, a Credit Party will be the surviving entity.
Section 6.5 Advances, Investments and Loans.
-------------------------------
No Credit Party will, nor will it permit any Subsidiary to, make any
Investment except for Permitted Investments.
Section 6.6 Transactions with Affiliates.
----------------------------
Except for (x) transactions as permitted in subsection (iv) of the
definition of Permitted Investments, (y) transactions between any one or more of
the Parent and its Subsidiaries to the extent otherwise permitted hereunder and
(z) as set forth on Schedule 6.6, no Credit Party will, nor will it permit any
Subsidiary to, enter into any transaction or series of transactions, whether or
not in the ordinary course of business, with any officer, director or Affiliate
other than on terms and conditions substantially as favorable to the Borrower
and/or the Subsidiaries party thereto as would be obtainable in a comparable
arm's-length transaction with a Person other than an officer, director or
Affiliate.
85
Section 6.7 Ownership of Subsidiaries; Restrictions.
---------------------------------------
No Credit Party will, nor will it permit any Subsidiary to, create,
form or acquire any Subsidiaries, except for Domestic Subsidiaries which are
joined as Additional Credit Parties in accordance with the terms hereof and
Foreign Subsidiaries. The Parent will not sell, transfer, pledge or otherwise
dispose of any Capital Stock or other equity interests it holds in any of its
Subsidiaries, nor will it permit any of its Subsidiaries to issue, sell,
transfer, pledge or otherwise dispose of any of their Capital Stock or other
equity interests, except in a transaction permitted by Section 6.4 or 6.5.
Section 6.8 Fiscal Year; Organizational Documents; Material
-----------------------------------------------
Contracts.
---------
No Credit Party will, nor will it permit any Subsidiary to, change its
fiscal year or its accounting policies (except as contemplated in Section 1.3).
Each of the Credit Parties will not, nor will it permit any Subsidiary to,
amend, modify or change its articles of incorporation (or corporate charter or
other similar organizational document) or bylaws (or other similar document)
without the prior written consent of the Required Lenders, unless such
amendment, modification or change (x) is permitted under this Agreement or any
other Credit Document or (y) could not reasonably be expected to be adverse to
the interests of the Lenders hereunder. No Credit Party will, nor will it permit
any Subsidiary to, without the prior written consent of the Administrative
Agent, amend, modify, cancel or terminate or fail to renew or extend or permit
the amendment, modification, cancellation or termination of any of the Material
Contracts or the Transaction Documents, except in the event that such
amendments, modifications, cancellations or terminations could not reasonably be
expected to have a Material Adverse Effect. The Borrower will not, without the
prior written consent of the Required Lenders, amend, modify, waive or extend or
permit the amendment, modification, waiver or extension of any Subordinated
Indebtedness or of any documentation governing or evidencing such Subordinated
Indebtedness in a manner that is adverse to the interests of the Lenders or the
issuer of such Subordinated Indebtedness.
Section 6.9 Limitation on Restricted Actions.
--------------------------------
No Credit Party will, nor will it permit any Subsidiary to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any such Person to (a) pay
dividends or make any other distributions to any Credit Party on its Capital
Stock or with respect to any other interest or participation in, or measured by,
its profits, (b) pay any Indebtedness or other obligation owed to any Credit
Party, (c) make loans or advances to any Credit Party, (d) sell, lease or
transfer any of its properties or assets to any Credit Party, or (e) act as a
Guarantor and pledge its assets pursuant to the Credit Documents or any
renewals, refinancings, exchanges, refundings or extension thereof, except (in
respect of any of the matters referred to in clauses (a)-(d) above) for such
encumbrances or restrictions existing under or by reason of (i) this Agreement
and the other Credit Documents, (ii) applicable law, (iii) any document or
instrument governing Indebtedness incurred pursuant to Section 6.1(b) and
Section 6.1(c); provided that any such restriction contained therein relates
only to the asset or assets constructed or acquired in connection therewith,
(iv) any Permitted Lien or any document or instrument governing any Permitted
Lien; provided that any such restriction contained therein
86
relates only to the asset or assets subject to such Permitted Lien and (v)
customary non-assignment provisions in any lease, contract, permit or license to
the extent permitted hereunder.
Section 6.10 Restricted Payments.
-------------------
No Credit Party will, nor will it permit any Subsidiary to, directly or
indirectly, declare, order, make or set apart any sum for or pay any Restricted
Payment, except (a) to make dividends payable solely in the same class of
Capital Stock of such Person, (b) to make dividends or other distributions
payable to any Credit Party other than the Parent (directly or indirectly
through Subsidiaries), (c) to make dividends or other distributions payable to
the Parent for the payment of taxes actually due and owing and other customary
expenses of the Parent so long as such expense payments by the Parent are in the
ordinary course of business of the Parent in accordance with Section 6.14 and
consistent with past practices of the Parent and (d) so long as no Default or
Event of Default then exists or would result therefrom on an actual or Pro Forma
Basis, (i) the redemption of the Series E Preferred Stock of the Parent in an
aggregate amount not to exceed $6,400,000, (ii) payments on earnout obligations
required in connection with any Permitted Acquisition, (iii) repurchase of the
Capital Stock of the Parent from directors, officers, employees and consultants
in an aggregate amount not to exceed $500,000, (iv) the purchase or redemption
of Capital Stock of the Parent issued to sellers in connection with Permitted
Acquisitions, (v) customary directors' fees paid to the directors of the Parent,
(vi) the payment of cash in lieu of the issuance of fractional shares of Capital
Stock and (vii) the acquisition by the Parent of shares of its Capital Stock if
such shares are received as consideration for the sale of one or more of the
facilities contemplated in Section 6.4(a)(ix).
Section 6.11 Sale Leasebacks.
---------------
No Credit Party will, nor will it permit any Subsidiary to, directly or
indirectly become or remain liable as lessee or as guarantor or other surety
with respect to any lease, whether an operating lease or a Capital Lease, of any
property (whether real, personal or mixed), whether now owned or hereafter
acquired, (a) which any Credit Party or any Subsidiary has sold or transferred
or is to sell or transfer to a Person which is not another Credit Party or
Subsidiary or (b) which any Credit Party or any Subsidiary intends to use for
substantially the same purpose as any other property which has been sold or is
to be sold or transferred by such Credit Party or such Subsidiary to another
Person which is not another Credit Party or Subsidiary in connection with such
lease.
Section 6.12 No Further Negative Pledges.
---------------------------
No Credit Party will, nor will it permit any Subsidiary to, enter into,
assume or become subject to any agreement prohibiting or otherwise restricting
the creation or assumption of any Lien upon its properties or assets, whether
now owned or hereafter acquired, or requiring the grant of any security for such
obligation if security is given for some other obligation, except (a) pursuant
to this Agreement and the other Credit Documents, (b) applicable law, (c)
pursuant to any document or instrument governing Indebtedness incurred pursuant
to Section 6.1 (b) and Section 6.1(c), provided that any such restriction
contained therein relates only to the asset or assets constructed or acquired in
connection therewith, (d) in connection with any Permitted Lien
87
or any document or instrument governing any Permitted Lien, provided that any
such restriction contained therein relates only to the asset or assets subject
to such Permitted Lien and (e) customary non-assignment clauses provisions in
any lease, contract, permit or license to the extent permitted hereunder.
Section 6.13 Operating Lease Obligations.
---------------------------
No Credit Party will, nor will it permit any Subsidiary to, enter into,
assume or permit to exist any obligations for the payment of rent under
Operating Leases which in the aggregate for all such Persons would exceed
$4,000,000 in any fiscal year.
Section 6.14 Parent Holding Company.
----------------------
The Parent shall not engage in any activities or operations whatsoever,
other than (a) general administrative and other functions required by law, (b)
owning all of the Capital Stock of the Borrower, (c) guaranteeing the Credit
Party Obligations pursuant to the terms of this Agreement and the other Credit
Documents and performing its obligations hereunder and thereunder and (d) those
activities or operations that are incidental to its status as a parent holding
company.
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
Loan 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 Loan 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 any Guarantor shall fail to pay on the Guaranty in
respect of any of the foregoing or in respect of any other Guaranty
Obligations thereunder within the aforesaid period of time); or
(b) Any representation or warranty of any Credit Party
made or deemed made herein, in the Security Documents or in any of the
other Credit Documents or which is contained in any certificate,
document or financial or other statement furnished at any time under or
in connection with this Agreement shall prove to have been incorrect,
false or misleading in any material respect on or as of the date made
or deemed made; or
(c) (i) Any Credit Party shall fail to perform, comply
with or observe any term, covenant or agreement applicable to it
contained in Section 5.4, Section 5.7(a),
88
Section 5.9 or Article VI hereof; or (ii) any Credit Party shall fail
to comply with any other covenant, contained in this Credit Agreement
or the other Credit Documents or any other agreement, document or
instrument among any Credit Party, the Administrative Agent and the
Lenders or executed by any Credit Party in favor of the Administrative
Agent or the Lenders (other than as described in Sections 7.1(a),
7.1(b) or 7.1(c)(i) above), and in the event such breach or failure to
comply is capable of cure, is not cured within thirty (30) days of its
occurrence; or
(d) Any Credit Party or any of its Subsidiaries shall (i)
default in any payment of principal of or interest on any Indebtedness
(other than the Credit Party Obligations) in a principal amount
outstanding of at least $1,000,000 in the aggregate for the Credit
Parties and their Subsidiaries beyond the period of grace (not to
exceed 30 days), if any, provided in the instrument or agreement under
which such Indebtedness was created; or (ii) default in the observance
or performance of any other agreement or condition relating to any
Indebtedness in a principal amount outstanding of at least $1,000,000
in the aggregate for the Credit Parties and their Subsidiaries or
contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event shall occur or condition exist,
the effect of which default or other event or condition is to cause, or
to permit the holder or holders of such Indebtedness or beneficiary or
beneficiaries of such Indebtedness (or a trustee or agent on behalf of
such holder or holders or beneficiary or beneficiaries) to cause, with
the giving of notice if required, such Indebtedness to become due prior
to its stated maturity; or
(e) (i) The Parent or any of the Parent's 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 Parent or any Subsidiary shall
make a general assignment for the benefit of its creditors; or (ii)
there shall be commenced against the Parent or any of the Parent's
Subsidiaries 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 Parent or any of the Parent's
Subsidiaries 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 Parent or any of the Parent's Subsidiaries
shall take any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts set forth in clauses
(i), (ii), or (iii) above; or (v) the Parent or any of the Parent's
Subsidiaries shall generally not, or shall be unable to, or shall admit
in writing its inability to, pay its debts as they become due; or
89
(f) One or more judgments or decrees shall be entered
against any Credit Party or any of its Subsidiaries involving in the
aggregate a liability (to the extent not paid when due or covered by
insurance) of $1,000,000 or more and all such judgments or decrees
shall not have been paid and satisfied, vacated, discharged, stayed or
bonded pending appeal within 30 days from the entry thereof; or
(g) (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the
Code) involving any Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist
with respect to any Plan or any Lien in favor of the PBGC or a Plan
(other than a Permitted Lien) shall arise on the assets of any Credit
Party or any Commonly Controlled Entity, (iii) a Reportable Event shall
occur with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or
commencement of proceedings or appointment of a Trustee is, in the
reasonable opinion of the Required Lenders, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any
Single Employer Plan shall terminate for purposes of Title IV of ERISA,
(v) any Credit Party or any of its Subsidiaries or any Commonly
Controlled Entity shall, or in the reasonable opinion of the Required
Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, any
Multiemployer Plan or (vi) any other similar event or condition shall
occur or exist with respect to a Plan; and in each case in clauses (i)
through (vi) above, such event or condition, together with all other
such events or conditions, if any, could have a Material Adverse
Effect; or
(h) There shall occur a Change of Control; or
(i) The Guaranty or any provision thereof shall cease to
be in full force and effect or any Guarantor or any Person acting by or
on behalf of any Guarantor shall deny or disaffirm any Guarantor's
obligations under the Guaranty; or
(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) The subordination provisions contained in any
Subordinated Indebtedness shall cease to be in full force and effect or
to give the Lenders the rights, powers and privileges purported to be
created thereby.
Section 7.2 Acceleration; Remedies.
----------------------
Upon the occurrence of an Event of Default, then, and in any such
event, (a) if such event is an Event of Default specified in Section 7.1(e)
above, automatically the Commitments shall immediately terminate and the Loans
(with accrued interest thereon), and all other amounts
90
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, any or all 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; (ii) 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 of which may be drawn under Letters of Credit then outstanding,
whereupon the same shall immediately become due and payable; (iii) exercise any
rights or remedies of the Administrative Agent or the Lenders under this
Agreement or any other Credit Document, including, without limitation, any
rights or remedies with respect to the Collateral; and (iv) exercise any rights
or remedies available to the Administrative Agent or Lenders under applicable
law.
ARTICLE VIII
THE AGENT
Section 8.1 Appointment.
-----------
Each Lender hereby irrevocably designates and appoints First Union as
the Administrative Agent of such Lender under this Credit Agreement, and each
such Lender irrevocably authorizes First Union, as the Administrative Agent for
such Lender, to take such action on its behalf under the provisions of this
Credit Agreement and to exercise such powers and perform such duties as are
expressly delegated to the Administrative Agent by the terms of this Credit
Agreement, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Credit
Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Credit Agreement or otherwise exist against the Administrative Agent.
Section 8.2 Delegation of Duties.
--------------------
The Administrative Agent may execute any of its duties under this
Credit Agreement by or through agents or attorneys-in-fact and shall be entitled
to advice of counsel concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible for the negligence or misconduct
of any agents or attorneys-in-fact selected by it with reasonable care. Without
limiting the foregoing, the Administrative Agent may appoint one of its
affiliates as its agent to perform the functions of the Administrative Agent
hereunder relating to the advancing of funds to the Borrower and distribution of
funds to the Lenders and to perform such other
91
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 (i) liable for any
action lawfully taken or omitted to be taken by it or such Person under or in
connection with this Credit Agreement (except for its or such Person's own gross
negligence or willful misconduct) or (ii) responsible in any manner to any of
the Lenders for any recitals, statements, representations or warranties made by
any Credit Party or any officer thereof contained in this Credit Agreement or in
any certificate, report, statement or other document referred to or provided for
in, or received by the Administrative Agent under or in connection with, this
Credit Agreement or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of any of the Credit Documents or for any failure
of any Credit Party 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 any Credit Party
of any of the agreements contained in, or conditions of, this Credit Agreement,
or to inspect the properties, books or records of any Credit Party.
Section 8.4 Reliance by Administrative Agent.
--------------------------------
The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any Note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it in
good faith to be genuine and correct and to have been signed, sent or made by
the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Credit Parties), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless (a) a written notice of assignment, negotiation
or transfer thereof shall have been filed with the Administrative Agent and (b)
the Administrative Agent shall have received the written agreement of such
assignee to be bound hereby as fully and to the same extent as if such assignee
were an original Lender party hereto, in each case in form satisfactory to the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Credit Agreement unless it
shall first receive such advice or concurrence of the Required Lenders as it
deems appropriate or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The Administrative Agent
shall in all cases be fully protected in acting, or in refraining from acting,
under any of the Credit Documents in accordance with a request of the Required
Lenders or all of the Lenders, as may be required under this Credit Agreement,
and such request and any action taken or failure to act pursuant thereto shall
be binding upon all the Lenders and all future holders of the Notes.
92
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 Credit Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall give
prompt notice thereof to the Lenders. The Administrative Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders; provided, however, that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders except to the extent that
this Credit Agreement expressly requires that such action be taken, or not
taken, only with the consent or upon the authorization of the Required Lenders,
or all of the Lenders, as the case may be.
Section 8.6 Non-Reliance on Administrative Agent and Other
----------------------------------------------
Lenders.
-------
Each Lender expressly acknowledges that neither the Administrative
Agent nor any of its officers, directors, employees, agents, attorneys-in-fact
or affiliates has made any representation or warranty to it and that no act by
the Administrative Agent hereinafter taken, including any review of the affairs
of the Credit Parties, shall be deemed to constitute any representation or
warranty by the Administrative Agent to any Lender. Each Lender represents to
the Administrative Agent that it has, independently and without reliance upon
the Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Credit Parties and made its own decision
to make its Loans hereunder and enter into this Credit Agreement. Each Lender
also represents that it will, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Credit Agreement, and to make such investigation as it deems necessary to
inform itself as to the business, operations, property, financial and other
condition and creditworthiness of the Credit Parties. Except for notices,
reports and other documents expressly required to be furnished to the Lenders by
the Administrative Agent hereunder, the Administrative Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, property, condition (financial
or otherwise), prospects or creditworthiness of the Credit Parties which may
come into the possession of the Administrative Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates.
Section 8.7 Indemnification.
---------------
The Lenders agree to indemnify the Administrative Agent in its capacity
hereunder (to the extent not reimbursed by the Credit Parties and without
limiting the obligation of the Credit Parties to do so), ratably according to
their respective Commitment Percentages in effect on the
93
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 Administrative Agent's gross negligence or willful misconduct, as determined
by a court of competent jurisdiction pursuant to a final, non-appealable
judgment. The agreements in this Section 8.7 shall survive the termination of
this Credit Agreement and payment of the Notes and all other amounts payable
hereunder.
Section 8.8 Administrative Agent in Its Individual Capacity.
-----------------------------------------------
The Administrative Agent and its affiliates may make loans to, accept
deposits from and generally engage in any kind of business with the Parent and
its Subsidiaries as though the Administrative Agent were not the Administrative
Agent hereunder. With respect to its Loans made or renewed by it and any Note
issued to it, the Administrative Agent shall have the same rights and powers
under this Credit Agreement as any Lender and may exercise the same as though it
were not the Administrative Agent, and the terms "Lender" and "Lenders" shall
include the Administrative Agent in its individual capacity.
Section 8.9 Successor Administrative Agent.
------------------------------
The Administrative Agent may resign as Administrative Agent upon 30
days' prior notice to the Borrower and the Lenders. If the Administrative Agent
shall resign as Administrative Agent under this Credit Agreement and the other
Credit Documents, 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 Administrative Agent's rights, powers and duties as
Administrative Agent shall be terminated, without any other or further act or
deed on the part of such former Administrative Agent or any of the parties to
this Credit Agreement or any holders of the Notes. After any retiring
Administrative Agent's resignation as Administrative Agent, the provisions of
this Section 9.9 shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Administrative Agent under this Credit Agreement.
Section 8.10 Other Agents.
------------
Each of the Syndication Agent and the Documentation Agent shall have no
duties or obligations, and thus no liabilities, in their capacity as a
Syndication Agent and Documentation, respectively, under this Agreement and the
other Credit Documents.
94
ARTICLE IX
MISCELLANEOUS
Section 9.1 Amendments, Waivers and Release of Collateral.
---------------------------------------------
Neither this Agreement, 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. The Required Lenders may, or,
with the written consent of the Required Lenders, the Administrative Agent may,
from time to time, (a) enter into with the Credit Parties written amendments,
supplements or modifications hereto and to the other Credit Documents to which
the applicable Credit Parties are party 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 Credit Parties hereunder or thereunder or (b)
waive, on such terms and conditions as the Required Lenders may specify in such
instrument, any of the requirements of this Agreement or the other Credit
Documents or any Default or Event of Default and its consequences; provided,
however, that no such waiver and no such amendment, waiver, supplement,
modification or release shall:
(i) reduce the amount or extend the scheduled
date of maturity of any Loan or Note or any installment
thereon, or reduce the stated rate of any interest or fee
payable hereunder (except in connection with a waiver of
interest at the increased post-default rate) or extend the
scheduled date of any payment thereof or increase the amount
or extend the expiration date of any Lender's Commitment, in
each case without the written consent of each Lender directly
affected thereby; or
(ii) amend, modify or waive any provision of this
Section 9.1 or reduce the percentage specified in the
definition of Required Lenders, without the written consent of
all the Lenders; or
(iii) amend, modify or waive any provision of
Article VIII without the written consent of the then
Administrative Agent; or
(iv) release all or substantially all of the
Guarantors from their obligations under the Guaranty, without
the written consent of all of the Lenders; or
(v) release all or substantially all of the
Collateral, without the written consent of all of the Lenders;
or
(vi) amend, modify or waive any provision of the
Credit Documents requiring consent, approval or request of the
Required Lenders or all Lenders,
95
without the written consent of all of the Required Lenders or
Lenders as appropriate;
provided, further, that no amendment, waiver or consent affecting the rights or
duties of the Administrative Agent, the Issuing Lender or the Swingline Lender
under any Credit Document shall in any event be effective, unless in writing and
signed by the Administrative Agent, the Issuing Lender and/or the Swingline
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 other Credit Parties, the Lenders, the Administrative
Agent and all future holders of the Notes. In the case of any waiver, the
Borrower, the other Credit Parties, the Lenders and the Administrative Agent
shall be restored to their former position and rights hereunder and under the
outstanding Loans and Notes and other Credit Documents, and any Default or Event
of Default permanently waived shall be deemed to be cured and not continuing;
but no such waiver shall extend to any subsequent or other Default or Event of
Default, or impair any right consequent thereon.
Notwithstanding any of the foregoing to the contrary, the consent of
the Credit Parties shall not be required for any amendment, modification or
waiver of the provisions of Article VIII (other than the provisions of Section
8.9); provided, however, that the Administrative Agent will provide written
notice to the Borrower of any such amendment, modification or waiver. In
addition, the Credit Parties and the Lenders hereby authorize the Administrative
Agent to modify this Credit Agreement by unilaterally amending or supplementing
Schedule 2.1(a) from time to time in the manner requested by the Credit Parties,
the Administrative Agent or any Lender in order to reflect any assignments or
transfers of the Loans as provided for hereunder; provided further, however,
that the Administrative Agent shall promptly deliver a copy of any such
modification to the Borrower and each Lender.
Notwithstanding the fact that the consent of all the Lenders is
required in certain circumstances as set forth above, (x) each Lender is
entitled to vote as such Lender sees fit on any bankruptcy reorganization plan
that affects the Loans, and each Lender acknowledges that the provisions of
Section 1126(c) of the Bankruptcy Code supersedes the unanimous consent
provisions set forth herein and (y) the Required Lenders may consent to allow a
Credit Party to use cash collateral in the context of a bankruptcy or insolvency
proceeding.
Section 9.2 Notices.
-------
Except as otherwise provided in Article II, all notices, requests and
demands to or upon the respective parties hereto to be effective shall be in
writing (including by telecopy), and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made (a) when delivered by
hand, (b) when transmitted via telecopy (or other facsimile device) to the
number set out herein, (c) the day following the day on which the same has been
delivered prepaid (or pursuant to an invoice arrangement) to a reputable
national overnight air courier service, or (d) the third Business Day following
the day on which the same is sent by certified or registered mail, postage
prepaid, in each case addressed as follows in the case of the Borrower,
96
the other Credit Parties and the Administrative Agent, and as set forth on
Schedule 9.2 in the case of the Lenders, or to such other address as may be
hereafter notified by the respective parties hereto and any future holders of
the Notes:
The Borrower MedSource Technologies, LLC
and the other ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
Credit Parties: ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇,
Chief Financial Officer
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
The Administrative Wachovia Bank, National Association, as Administrative
Agent: Agent
Charlotte Plaza
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Syndication Agency Services
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Wachovia Bank, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇
Mail Code GA8050
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Section 9.3 No Waiver; Cumulative Remedies.
------------------------------
No failure to exercise and no delay in exercising, on the part of the
Administrative Agent or any Lender, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
Section 9.4 Survival of Representations and Warranties.
------------------------------------------
All representations and warranties made hereunder and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the Notes and the
making of the Loans; provided that all such representations and warranties shall
terminate on the date upon which the Commitments have been terminated and all
Credit Party Obligations have been paid in full.
97
Section 9.5 Payment of Expenses and Taxes.
-----------------------------
The Borrower agrees (a) to pay or reimburse the Administrative Agent
and the Arranger for all their 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 and the Arranger, (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 and the other Credit 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, bad faith or
willful misconduct of the Administrative Agent or any such Lender, as determined
by a court of competent jurisdiction pursuant to a final non-appealable
judgment. The agreements in this Section 9.5 shall survive repayment of the
Loans, Notes and all other Credit Party Obligations.
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 Guarantors, the Lenders, the
Administrative Agent, all future holders of the Notes and their
respective successors and assigns, except that neither the Borrower nor
any other Credit Party may assign or transfer any of its rights or
obligations under this Agreement or the other Credit Documents without
the prior written consent of each Lender.
(b) Any Lender may, in the ordinary course of its
commercial banking business and in accordance with applicable law, at
any time sell to one or more banks or other entities ("Participants")
participating interests in any Loan owing to such Lender, any Note held
by such Lender, any Commitment of such Lender, or any other interest of
98
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 Credit Parties and
the Administrative Agent shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and
obligations under this 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), (ii) release all or substantially all
of the Guarantors from their obligations under the Guaranty, (iii)
release all or substantially all of the Collateral, or (iv) consent to
the assignment or transfer by the Borrower or any other Credit Party 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 Credit
Parties 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 further, 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 or Related Fund
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 or
delayed), to one or more additional banks or financial institutions or
entities having capital and surplus in excess of $250,000,000 (each a
"Purchasing Lender"), 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, its Revolving Loans, its
Tranche A Term Loan, its Delayed Draw Term Loan Commitment or its
Delayed Draw Term Loan (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, to the extent
required above, the Administrative Agent and the Borrower), and
delivered to the
99
Administrative Agent for its acceptance and recording in the Register;
provided, however, that any sale or assignment to 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; provided, however,
that such Lender shall still be entitled to any indemnification rights
that expressly survive hereunder). 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 $3,500.00 for each
Purchasing Lender listed in such Commitment Transfer Supplement and the
Notes subject to such Commitment Transfer Supplement, the
Administrative
100
Agent shall (i) accept such Commitment Transfer Supplement, (ii) record
the information contained therein in the Register and (iii) give prompt
notice of such acceptance and recordation to the Lenders and the
Borrower.
(f) The Borrower authorizes each Lender to disclose to
any Participant or Purchasing Lender (each, a "Transferee") and any
prospective Transferee any and all financial 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 Subsidiaries prior to becoming a
party to this Agreement, in each case subject to Section 9.15.
(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 2.19 Certificate) described in Section 2.19.
(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, or receive any collateral in respect
thereof (whether voluntarily or involuntarily, by set-off, pursuant to
events or proceedings of the nature referred to in Section 7.1(e), or
otherwise) in a greater proportion than any such payment to or
collateral received by 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, or shall provide such
other Lenders with the benefits of any such collateral, or the proceeds
thereof, as shall be necessary to cause such benefited Lender to share
the excess payment or benefits of such collateral or proceeds ratably
with each of the Lenders; provided, 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 Credit Parties agree 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.
101
(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 any
Credit Party, any such notice being expressly waived by the Credit
Parties to the extent permitted by applicable law, upon the occurrence
of any Event of Default, to setoff and appropriate and apply any and
all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims,
in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such
Lender or any branch or agency thereof to or for the credit or the
account of any Credit Party, or any part thereof in such amounts as
such Lender may elect, against and on account of the obligations and
liabilities of the Borrower and the other Credit Parties to such Lender
hereunder and claims of every nature and description of such Lender
against the Borrower and the other Credit Parties, 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 any Credit Party or against any trustee in bankruptcy,
debtor in possession, assignee for the benefit of creditors, receiver
or execution, judgment or attachment creditor of any such Credit Party,
or against anyone else claiming through or against any such Credit
Party or any such trustee in bankruptcy, debtor in possession, assignee
for the benefit of creditors, receiver, or execution, judgment or
attachment creditor, notwithstanding the fact that such right of
set-off shall not have been exercised by such Lender prior to the
occurrence of any Event of Default. Each Lender agrees promptly to
notify the applicable Credit Party and the Administrative Agent after
any such set-off and application made by such Lender; provided,
however, that the failure to give such notice shall not affect the
validity of such set-off and application.
Section 9.8 Table of Contents and Section Headings.
--------------------------------------
The table of contents and the Section and subsection headings herein
are intended for convenience only and shall be ignored in construing this
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 agreement.
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.
102
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 other Credit Documents represent the agreement
of the Borrower, the Guarantors, 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, the
other Credit Parties or any Lender relative to the subject matter hereof not
expressly set forth or referred to herein or in the other Credit Documents.
Section 9.13 Governing Law.
-------------
This Agreement and the other Credit Documents and the rights and
obligations of the parties under this Agreement and the other Credit Documents
shall be governed by, and construed and interpreted in accordance with, the law
of the State of North Carolina.
Section 9.14 Consent to Jurisdiction and Service of Process.
----------------------------------------------
All judicial proceedings brought against the Borrower and/or any other
Credit Party with respect to this Agreement, any Note or any of the other Credit
Documents may be brought in any state or federal court of competent jurisdiction
in the State of North Carolina, and, by execution and delivery of this
Agreement, each of the Borrower and the other Credit Parties accepts, for itself
and in connection with its properties, generally and unconditionally, the
non-exclusive jurisdiction of the aforesaid courts and irrevocably agrees to be
bound by any final judgment rendered thereby in connection with this Agreement,
any Note or any other Credit Document from which no appeal has been taken or is
available. Each of the Borrower and the other Credit Parties irrevocably agrees
that all service of process in any such proceedings in any such court may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to it at its address set
forth in Section 9.2 or at such other address of which the Administrative Agent
shall have been notified pursuant thereto, such service being hereby
acknowledged by the each of the Borrower and the other Credit Parties to be
effective and binding service in every respect. Each of the Borrower, the other
Credit Parties, the Administrative Agent and the Lenders irrevocably waives any
objection, including, without limitation, any objection to the laying of venue
based on the grounds of forum non conveniens which it may now or hereafter have
to the bringing of any such action or proceeding in any such jurisdiction.
Nothing herein shall affect the right to serve process in any other manner
permitted by law or shall limit the right of any Lender to bring proceedings
against the Borrower or the other Credit Parties in the court of any other
jurisdiction.
103
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 resolved by binding
arbitration as provided herein. Institution of a judicial proceeding by
a party does not waive the right of that party to demand arbitration
hereunder. Disputes may include, without limitation, tort claims,
counterclaims, disputes as to whether a matter is subject to
arbitration, claims brought as class actions, claims arising from
Credit Documents executed in the future, or claims arising out of or
connected with the transaction reflected by this 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 Charlotte, North Carolina. 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. A
judgment upon the award may be entered in any court having
jurisdiction. 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 binding arbitration
provisions, the Administrative Agent, the Lenders, the Borrower and the
other Credit Parties agree to preserve, without diminution, certain
remedies that the Administrative Agent on behalf of the Lenders may
employ or exercise freely, independently or in connection with an
arbitration proceeding or after an arbitration action is brought. The
Administrative Agent on behalf of the Lenders shall have the right to
proceed in any court of proper jurisdiction or by self-help to exercise
or prosecute the following remedies, as applicable (i) all rights to
foreclose against any real or personal property or other security by
exercising a power of sale granted under Credit Documents or under
applicable law or by judicial foreclosure and sale, including a
proceeding to confirm the sale; (ii) all rights of self-help including
peaceful occupation of real property and collection of rents, 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.
104
(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 Charlotte, North Carolina 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.
Section 9.16 Confidentiality.
---------------
The Administrative Agent and each of the Lenders agrees that it will
use its best efforts not to disclose without the prior consent of the Borrower
(other than to its employees, affiliates, auditors or counsel or to another
Lender) any information with respect to the Credit Parties and their
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 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 and the other Credit Parties each hereby acknowledges
that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of each Credit Document;
(b) neither the Administrative Agent nor any Lender has
any fiduciary relationship with or duty to the Borrower or any other
Credit Party arising out of or in connection with this Agreement and
the relationship between Administrative Agent and Lenders, on one hand,
and the Borrower and the other Credit Parties, on the other hand, in
connection herewith is solely that of debtor and creditor; and
105
(c) no joint venture exists among the Lenders or among
the Borrower or the other Credit Parties and the Lenders.
Section 9.18 Waivers of Jury Trial.
---------------------
THE BORROWER, THE OTHER CREDIT PARTIES, THE ADMINISTRATIVE AGENT AND
THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM
THEREIN.
ARTICLE X
GUARANTY
Section 10.1 The Guaranty.
------------
In order to induce the Lenders to enter into this Agreement and to
extend credit hereunder and in recognition of the direct benefits to be received
by the Guarantors from the Extensions of Credit hereunder, each of the
Guarantors hereby agrees with the Administrative Agent and the Lenders as
follows: the Guarantor hereby unconditionally and irrevocably jointly and
severally guarantees as primary obligor and not merely as surety the full and
prompt payment when due, whether upon maturity, by acceleration or otherwise, of
any and all Credit Party Obligations. If any or all of the Credit Party
Obligations becomes due and payable hereunder, each Guarantor unconditionally
promises to pay such Credit Party Obligations to the Administrative Agent and
the Lenders, on order, or demand, together with any and all reasonable expenses
which may be incurred by the Administrative Agent or the Lenders in collecting
any of the Credit Party Obligations.
Notwithstanding any provision to the contrary contained herein or in
any other of the Credit Documents, to the extent the obligations of a Guarantor
shall be adjudicated to be invalid or unenforceable for any reason (including,
without limitation, because of any applicable state or federal law relating to
fraudulent conveyances or transfers) then the obligations of each such Guarantor
hereunder shall be limited to the maximum amount that is permissible under
applicable law (whether federal or state and including, without limitation, the
Bankruptcy Code).
Section 10.2 Bankruptcy.
----------
Additionally, each of the Guarantors unconditionally and irrevocably
guarantees jointly and severally the payment of any and all Credit Party
Obligations of the Borrower to the Lenders whether or not due or payable by the
Borrower upon the occurrence of any of the events specified in Section 7.1(e),
and unconditionally promises to pay such Credit Party Obligations to the
Administrative Agent for the account of the Lenders, or order, on demand, in
lawful money of the United States. Each of the Guarantors further agrees that to
the extent that the Borrower
106
or a Guarantor shall make a payment or a transfer of an interest in any property
to the Administrative Agent or any Lender, which payment or transfer or any part
thereof is subsequently invalidated, declared to be fraudulent or preferential,
or otherwise is avoided, and/or required to be repaid to the Borrower or a
Guarantor, the estate of the Borrower or a Guarantor, a trustee, receiver or any
other party under any bankruptcy law, state or federal law, common law or
equitable cause, then to the extent of such avoidance or repayment, the
obligation or part thereof intended to be satisfied shall be revived and
continued in full force and effect as if said payment had not been made.
Section 10.3 Nature of Liability.
-------------------
The liability of each Guarantor hereunder is exclusive and independent
of any security for or other guaranty of the Credit Party Obligations of the
Borrower whether executed by any such Guarantor, any other guarantor or by any
other party, and no Guarantor's liability hereunder shall be affected or
impaired by (a) any direction as to application of payment by the Borrower or by
any other party, or (b) any other continuing or other guaranty, undertaking or
maximum liability of a guarantor or of any other party as to the Credit Party
Obligations of the Borrower, or (c) any payment on or in reduction of any such
other guaranty or undertaking, or (d) any dissolution, termination or increase,
decrease or change in personnel by the Borrower, or (e) any payment made to the
Administrative Agent or the Lenders on the Credit Party Obligations which the
Administrative Agent or such Lenders repay the Borrower pursuant to court order
in any bankruptcy, reorganization, arrangement, moratorium or other debtor
relief proceeding, and each of the Guarantors waives any right to the deferral
or modification of its obligations hereunder by reason of any such proceeding.
Section 10.4 Independent Obligation.
----------------------
The obligations of each Guarantor hereunder are independent of the
obligations of any other guarantor or the Borrower, and a separate action or
actions may be brought and prosecuted against each Guarantor whether or not
action is brought against any other guarantor or the Borrower and whether or not
any other Guarantor or the Borrower is joined in any such action or actions.
Section 10.5 Authorization.
-------------
For purposes of assuring its continued liability under this Article X,
each of the Guarantors hereby authorizes the Administrative Agent and each
Lender without notice or demand (except as shall be required by applicable
statute and cannot be waived), from time to time to (a) renew, compromise,
extend, increase, accelerate or otherwise change the time for payment of, or
otherwise change the terms of the Credit Party Obligations or any part thereof
in accordance with this Agreement, including any increase or decrease of the
rate of interest thereon, (b) take and hold security from any guarantor or any
other party for the payment of this Guaranty or the Credit Party Obligations and
exchange, enforce waive and release any such security, (c) apply such security
and direct the order or manner of sale thereof as the Administrative Agent and
the Lenders in their discretion may determine and (d) release or substitute any
one or more endorsers, guarantors, the Borrower or other obligors; and each such
107
Guarantor acknowledges and agrees that no such events shall affect or impair
such Guarantor's liability under this Article X.
Section 10.6 Reliance.
--------
It is not necessary for the Administrative Agent or the Lenders to
inquire into the capacity or powers of the Borrower or the officers, directors,
members, partners or agents acting or purporting to act on its behalf, and any
indebtedness made or created in reliance upon the professed exercise of such
powers shall be guaranteed hereunder.
Section 10.7 Waiver.
------
(a) Each of the Guarantors waives any right (except as
shall be required by applicable statute and cannot be waived) to
require the Administrative Agent or any Lender to (i) proceed against
the Borrower, any other guarantor or any other party, (ii) proceed
against or exhaust any security held from the Borrower, any other
guarantor or any other party, or (iii) pursue any other remedy in the
Administrative Agent's or any Lender's power whatsoever. Each of the
Guarantors waives any defense based on or arising out of any defense of
the Borrower, any other guarantor or any other party other than payment
in full of the Credit Party Obligations, including without limitation
any defense based on or arising out of the disability of the Borrower,
any other guarantor or any other party, or the unenforceability of the
Credit Party Obligations or any part thereof from any cause, or the
cessation from any cause of the liability of the Borrower other than
payment in full of the Credit Party Obligations. The Administrative
Agent or any of the Lenders may, at their election, foreclose on any
security held by the Administrative Agent or a Lender by one or more
judicial or nonjudicial sales, whether or not every aspect of any such
sale is commercially reasonable (to the extent such sale is permitted
by applicable law), or exercise any other right or remedy the
Administrative Agent and any Lender may have against the Borrower or
any other party, or any security, without affecting or impairing in any
way the liability of any Guarantor hereunder except to the extent the
Credit Party Obligations have been paid in full. Each of the Guarantors
waives any defense arising out of any such election by the
Administrative Agent and each of the Lenders, even though such election
operates to impair or extinguish any right of reimbursement or
subrogation or other right or remedy of the Guarantors against the
Borrower or any other party or any security.
(b) Each of the Guarantors waives all presentments,
demands for performance, protests and notices, including without
limitation notices of nonperformance, notice of protest, notices of
dishonor, notices of acceptance of this Guaranty, and notices of the
existence, creation or incurring of new or additional Credit Party
Obligations. Each Guarantor assumes all responsibility for being and
keeping itself informed of the Borrower's financial condition and
assets, and of all other circumstances bearing upon the risk of
nonpayment of the Credit Party Obligations and the nature, scope and
extent of the risks which such Guarantor assumes and incurs hereunder,
and agrees that neither the Administrative Agent nor any Lender shall
have any duty to advise such Guarantor of information known to it
regarding such circumstances or risks.
108
(c) Each of the Guarantors hereby agrees it will not
exercise any rights of subrogation which it may at any time otherwise
have as a result of this Guaranty (whether contractual, under Section
509 of the U.S. Bankruptcy Code, or otherwise) to the claims of the
Lenders against the Borrower or any other guarantor of the Credit Party
Obligations of the Borrower owing to the Lenders (collectively, the
"Other Parties") and all contractual, statutory or common law rights of
reimbursement, contribution or indemnity from any Other Party which it
may at any time otherwise have as a result of this Guaranty until such
time as the Credit Party Obligations shall have been paid in full and
the Commitments have been terminated. Each of the Guarantors hereby
further agrees not to exercise any right to enforce any other remedy
which the Administrative Agent and the Lenders now have or may
hereafter have against any Other Party, any endorser or any other
guarantor of all or any part of the Credit Party Obligations of the
Borrower and any benefit of, and any right to participate in, any
security or collateral given to or for the benefit of the Lenders to
secure payment of the Credit Party Obligations of the Borrower until
such time as the Credit Party Obligations shall have been paid in full
and the Commitments have been terminated.
Section 10.8 Limitation on Enforcement.
-------------------------
The Lenders agree that this Guaranty may be enforced only by the action
of the Administrative Agent acting upon the instructions of the Required Lenders
and that no Lender shall have any right individually to seek to enforce or to
enforce this Guaranty, it being understood and agreed that such rights and
remedies may be exercised by the Administrative Agent for the benefit of the
Lenders under the terms of this Agreement. The Lenders further agree that this
Guaranty may not be enforced against any director, officer, employee or
stockholder of the Guarantors.
Section 10.9 Confirmation of Payment.
-----------------------
The Administrative Agent and the Lenders will, upon request after
payment of the Credit Party Obligations which are the subject of this Guaranty
and termination of the Commitments relating thereto, confirm to the Borrower,
the Guarantors or any other Person that the Credit Party Obligations have been
paid in full and the Commitments relating thereto terminated, subject to the
provisions of Section 10.2.
109
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by its proper and duly authorized officers as of the
day and year first above written.
BORROWER: MEDSOURCE TECHNOLOGIES, LLC,
-------- a Delaware limited liability company
By:
------------------------------------
Name:
Title:
GUARANTORS: MEDSOURCE TECHNOLOGIES, INC.,
----------- a Delaware corporation
By:
------------------------------------
Name:
Title:
BRIMFIELD PRECISION, LLC,
a Delaware limited liability company
By:
------------------------------------
Name:
Title:
KELCO ACQUISITION LLC,
a Delaware limited liability company
By:
------------------------------------
Name:
Title:
HAYDEN PRECISION INDUSTRIES, LLC
a Delaware limited liability company
By:
------------------------------------
Name:
Title:
NATIONAL WIRE & STAMPING, INC.,
a Colorado corporation
By:
------------------------------------
Name:
Title:
PORTLYN, LLC,
a Delaware limited liability company
By:
------------------------------------
Name:
Title:
TEXCEL, INC.,
a Massachusetts corporation
By:
------------------------------------
Name:
Title:
THE MICROSPRING COMPANY, LLC,
a Delaware limited liability company
By:
------------------------------------
Name:
Title:
TENAX, LLC,
a Delaware limited liability company
By:
------------------------------------
Name:
Title:
A.P.X. ACQUISITION CORP.,
a Delaware corporation
By:
------------------------------------
Name:
Title:
THERMAT ACQUISITION CORP.,
a Delaware corporation
By:
------------------------------------
Name:
Title:
MEDSOURCE TECHNOLOGIES, ▇▇▇▇▇▇ INC.,
a Delaware corporation
By:
------------------------------------
Name:
Title:
MEDSOURCE TRENTON, INC.,
a Delaware corporation
By:
------------------------------------
Name:
Title:
ADMINISTRATIVE AGENT
AND LENDERS: WACHOVIA BANK, NATIONAL ASSOCIATION,
------------ as Administrative Agent and as a Lender
By:
------------------------------------
Name:
Title:
U.S. BANK NATIONAL ASSOCIATION,
as Syndication Agent and as a Lender
By:
------------------------------------
Name:
Title:
▇▇▇▇▇▇ TRUST AND SAVINGS BANK,
as Documentation Agent and as a Lender
By:
------------------------------------
Name:
Title: