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[EXECUTION COPY]
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$50,000,000
CREDIT AGREEMENT
among
▇▇▇▇▇▇▇ FURNITURE INDUSTRIES, INCORPORATED,
as Borrower,
THE DOMESTIC SUBSIDIARIES
OF THE BORROWER
FROM TIME TO TIME PARTIES HERETO
as Guarantors,
THE LENDERS PARTIES HERETO
and
FIRST UNION NATIONAL BANK,
as Administrative Agent
Dated as of October 19, 1999
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS ...........................................................................................1
Section 1.1 Defined Terms..........................................................................1
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Section 1.2 Other Definitional Provisions.........................................................20
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Section 1.3 Accounting Terms......................................................................20
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ARTICLE II THE LOANS; AMOUNT AND TERMS..........................................................................21
Section 2.1 Loans.................................................................................21
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Section 2.2 Letter of Credit Subfacility..........................................................23
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Section 2.3 Fees..................................................................................26
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Section 2.4 Commitment Reductions.................................................................27
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Section 2.5 Prepayments...........................................................................27
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Section 2.6 Minimum Principal Amount of Tranches..................................................28
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Section 2.7 Default Rate and Payment Dates........................................................28
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Section 2.8 Conversion Options....................................................................28
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Section 2.9 Computation of Interest and Fees......................................................29
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Section 2.10 Pro Rata Treatment and Payments.......................................................29
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Section 2.11 Non-Receipt of Funds by the Administrative Agent......................................31
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Section 2.12 Inability to Determine Interest Rate..................................................32
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Section 2.13 Illegality............................................................................32
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Section 2.14 Requirements of Law...................................................................33
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Section 2.15 Indemnity.............................................................................34
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Section 2.16 Taxes.................................................................................35
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Section 2.17 Indemnification; Nature of Issuing Lender's Duties....................................37
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ARTICLE III REPRESENTATIONS AND WARRANTIES......................................................................38
Section 3.1 Financial Condition...................................................................38
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Section 3.2 No Change.............................................................................39
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Section 3.3 Corporate Existence; Compliance with Law..............................................39
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Section 3.4 Corporate Power; Authorization; Enforceable Obligations; No Consents..................39
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Section 3.5 No Legal Bar; No Default..............................................................40
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Section 3.6 No Material Litigation................................................................40
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Section 3.7 Investment Company Act................................................................40
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Section 3.8 Margin Regulations....................................................................40
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Section 3.9 ERISA.................................................................................40
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Section 3.10 Environmental Matters.................................................................41
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Section 3.11 Use of Proceeds.......................................................................42
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Section 3.12 Subsidiaries..........................................................................42
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Section 3.13 Ownership.............................................................................42
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Section 3.14 Indebtedness..........................................................................42
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Section 3.15 Taxes.................................................................................43
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Section 3.16 Intellectual Property.................................................................43
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Section 3.17 Solvency..............................................................................43
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Section 3.18 Investments...........................................................................43
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Section 3.19 No Burdensome Restrictions............................................................43
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Section 3.20 Brokers' Fees.........................................................................44
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Section 3.21 Labor Matters.........................................................................44
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Section 3.22 Accuracy and Completeness of Information..............................................44
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Section 3.23 Year 2000 Issue.......................................................................44
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ARTICLE IV CONDITIONS PRECEDENT.................................................................................45
Section 4.1 Conditions to Closing Date and Initial Loans..........................................45
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Section 4.2 Conditions to All Extensions of Credit................................................47
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ARTICLE V AFFIRMATIVE COVENANTS.................................................................................48
Section 5.1 Financial Statements..................................................................48
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Section 5.2 Certificates; Other Information.......................................................49
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Section 5.3 Payment of Obligations................................................................50
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Section 5.4 Conduct of Business and Maintenance of Existence......................................50
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Section 5.5 Maintenance of Property; Insurance....................................................50
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Section 5.6 Inspection of Property; Books and Records; Discussions................................51
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Section 5.7 Notices...............................................................................51
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Section 5.8 Environmental Laws....................................................................52
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Section 5.9 Financial Covenants...................................................................53
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Section 5.10 Additional Subsidiary Guarantors......................................................53
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Section 5.11 Compliance with Law...................................................................53
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Section 5.12 Year 2000 Compliance..................................................................53
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ARTICLE VI NEGATIVE COVENANTS...................................................................................53
Section 6.1 Indebtedness..........................................................................54
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Section 6.2 Liens.................................................................................55
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Section 6.3 Nature of Business....................................................................55
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Section 6.4 Consolidation, Merger, Sale or Purchase of Assets, etc................................55
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Section 6.5 Advances, Investments and Loans.......................................................57
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Section 6.6 Transactions with Affiliates..........................................................57
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Section 6.7 Ownership of Subsidiaries; Restrictions...............................................57
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Section 6.8 Fiscal Year; Organizational Documents; Material Contracts.............................57
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Section 6.9 Limitation on Restricted Actions......................................................57
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Section 6.10 Restricted Payments...................................................................58
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Section 6.11 Prepayments of Indebtedness, etc......................................................58
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Section 6.12 Sale Leasebacks.......................................................................58
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Section 6.13 No Further Negative Pledges...........................................................59
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ARTICLE VII EVENTS OF DEFAULT...................................................................................59
Section 7.1 Events of Default.....................................................................59
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Section 7.2 Acceleration; Remedies................................................................61
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ARTICLE VIII THE AGENT .........................................................................................62
Section 8.1 Appointment...........................................................................62
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Section 8.2 Delegation of Duties..................................................................62
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Section 8.3 Exculpatory Provisions................................................................62
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Section 8.4 Reliance by Administrative Agent......................................................63
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Section 8.5 Notice of Default.....................................................................63
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Section 8.6 Non-Reliance on Administrative Agent and Other Lenders................................64
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Section 8.7 Indemnification.......................................................................64
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Section 8.8 Administrative Agent in Its Individual Capacity.......................................65
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Section 8.9 Successor Administrative Agent........................................................65
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ARTICLE IX MISCELLANEOUS .......................................................................................65
Section 9.1 Amendments and Waivers................................................................65
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Section 9.2 Notices...............................................................................67
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Section 9.3 No Waiver; Cumulative Remedies........................................................67
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Section 9.4 Survival of Representations and Warranties............................................67
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Section 9.5 Payment of Expenses and Taxes.........................................................67
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Section 9.6 Successors and Assigns; Participations; Purchasing Lenders............................68
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Section 9.7 Adjustments; Set-off..................................................................71
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Section 9.8 Table of Contents and Section Headings................................................72
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Section 9.9 Counterparts..........................................................................72
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Section 9.10 Effectiveness.........................................................................72
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Section 9.11 Severability..........................................................................72
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Section 9.12 Integration...........................................................................72
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Section 9.13 Governing Law.........................................................................73
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Section 9.14 Consent to Jurisdiction and Service of Process........................................73
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Section 9.15 Arbitration...........................................................................73
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Section 9.16 Confidentiality.......................................................................75
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Section 9.17 Acknowledgments.......................................................................75
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Section 9.18 Waivers of Jury Trial.................................................................75
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ARTICLE X GUARANTY .............................................................................................76
Section 10.1 The Guaranty..........................................................................76
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Section 10.2 Bankruptcy............................................................................76
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Section 10.3 Nature of Liability...................................................................77
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Section 10.4 Independent Obligation................................................................77
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Section 10.5 Authorization.........................................................................77
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Section 10.6 Reliance..............................................................................77
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Section 10.7 Waiver................................................................................78
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Section 10.8 Limitation on Enforcement.............................................................79
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Section 10.9 Confirmation of Payment...............................................................79
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SCHEDULES
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Schedule 1.1(a) Account Designation Letter
Schedule 1.1(b) Existing Investments
Schedule 1.1(c) Existing Liens
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 Note
Schedule 2.8 Form of Notice of Conversion/Extension
Schedule 2.16 Section 2.16 Certificate
Schedule 3.6 Litigation
Schedule 3.10 Environmental Matters
Schedule 3.12 Subsidiaries
Schedule 4.1(b) Form of Secretary's Certificate
Schedule 4.1(e) Form of Solvency Certificate
Schedule 5.10 Form of Joinder Agreement
Schedule 6.1(b) Indebtedness
Schedule 9.2 Notices/Lending Offices
Schedule 9.6(c) Form of Commitment Transfer Supplement
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CREDIT AGREEMENT, dated as of October 19, 1999, among ▇▇▇▇▇▇▇ FURNITURE
INDUSTRIES, INCORPORATED, a Virginia corporation (the "Borrower"), 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 (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 FIRST UNION NATIONAL BANK, a national banking association, as
administrative agent for the Lenders hereunder (in such capacity, the
"Administrative Agent").
W I T N E S S E T H:
WHEREAS, the Borrower has requested that the Lenders make loans and other
financial accommodations to the Borrower in the amount of up to $50,000,000, as
more particularly described herein;
WHEREAS, the Lenders have agreed to make such loans and other financial
accommodations to the Borrower on the terms and conditions contained herein;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINED TERMS.
As used in this Agreement, terms defined in the first paragraph of this
Agreement have the meanings therein indicated, and the following terms have the
following meanings:
"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(a).
"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.
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"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" shall mean this Credit Agreement, as amended, modified or
supplemented from time to time in accordance with its terms.
"Alternate Base Rate" shall mean, for any day, a rate per annum equal to
the greater of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. For purposes hereof:
"Prime Rate" shall mean, at any time, the rate of interest per annum publicly
announced from time to time by First Union at its principal office in Charlotte,
North Carolina as its prime rate. Each change in the Prime Rate shall be
effective as of the opening of business on the day such change in the Prime Rate
occurs. The parties hereto acknowledge that the rate announced publicly by First
Union as its Prime Rate is an index or base rate and shall not necessarily be
its lowest or best rate charged to its customers or other banks; and "Federal
Funds Effective Rate" shall mean, for any day, the weighted average of the rates
on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published on the next succeeding
Business Day by the Federal Reserve Bank of New York, or, if such rate is not so
published on the next succeeding Business Day, the average of the quotations for
the day of such transactions received by the Administrative Agent from three
federal funds brokers of recognized standing selected by it. If the
Administrative Agent shall have determined in good faith (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 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 until the
circumstances giving rise to such inability no longer exist. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective on the opening of business on the date of such
change.
"Alternate Base Rate Loans" shall mean Loans that bear interest at an
interest rate based on the Alternate Base Rate.
"Applicable 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 which are Alternate Base Rate Loans
shall be the percentage set forth under the column "Alternate Base Rate Margin
", (ii) Loans which 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":
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LIBOR Rate
Margin for
Alternate Loans
Leverage Base Rate and Letter of Commitment
Level Ratio Margin Credit Fee Fee
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I < 0.75 to 1.0 0% 0.50% 0.15%
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II > 0.75 to 1.0
-
but< 1.25 to 1.0 0% 0.625% 0.175%
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III > 1.25 to 1.0
-
but< 1.75 to 1.0 0% 0.75% 0.20%
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IV > 1.75 to 1.0
-
but< 2.50 to 1.0 0% 1.00% 0.25%
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V > 2.50 to 1.0 0% 1.25% 0.30%
-
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The Applicable Percentage shall, in each case, be determined and adjusted
on the date five (5) Business Days after the date on which the Administrative
Agent has received from the Borrower the quarterly financial information and
certifications required to be delivered to the Administrative Agent and the
Lenders in accordance with the provisions of Sections 5.1(a), 5.1(b) and 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 I
until the first Interest Determination Date occurring after August 31, 1999.
After the Closing Date, if the Borrower shall fail to provide the financial
information and certifications in accordance with the provisions of Sections
5.1(a), 5.1(b) and 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 V
until such time as such information and certifications are provided, whereupon
the Level shall be determined by the then current Leverage Ratio.
"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.
"BFD Financing Policy" shall mean the policy of the Borrower or any
Subsidiary to allow a BFD Licensee up to one year to pay for such BFD Licensee's
initial stock of inventory purchased from the Borrower or a Subsidiary.
"BFD Licensee" shall mean any Person who is party to a license agreement
with the Borrower or any of its Subsidiaries which entitles such Person to
engage in the retail sale of
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merchandise purchased from the Borrower or any of its Subsidiaries using the
tradename "▇▇▇▇▇▇▇ Furniture Direct" or any other name approved by the Borrower
or such Subsidiary.
"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 3.10.
"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 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 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
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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, and (vi) auction preferred stock
rated in the highest short-term credit rating category by S&P or Moody's.
"Change of Control" shall mean either (i) any Person or two or more
Persons acting in concert shall have acquired "beneficial ownership," directly
or indirectly, of, or shall have acquired by contract or otherwise, or shall
have entered into a contract or arrangement that, upon consummation, will result
in its or their acquisition of, control over, Voting Stock of the Borrower (or
other securities convertible into such Voting Stock) representing 35% or more of
the combined voting power of all Voting Stock of the Borrower, or (ii) during
any period of up to 24 consecutive months, commencing after the Closing Date,
individuals who at the beginning of such 24 month period were directors of the
Borrower (together with any new director whose election by the Borrower's Board
of Directors or whose nomination for election by the Borrower's shareholders was
approved by a vote of at least a majority of the directors then still in office
who either were directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of the directors of the Borrower then in office. As used
herein, "beneficial ownership" shall have the meaning provided in Rule 13d-3 of
the Securities and Exchange Commission under the Securities Exchange Act of
1934.
"Closing Date" shall mean the date of this Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
"Commitment" shall mean the Revolving Commitment and the LOC Commitment,
individually or collectively, as appropriate.
"Commitment Fee" shall have the meaning set forth in Section 2.3(a).
"Commitment Letter" shall mean the letter agreement dated June 24, 1999
addressed to the Borrower from the Administrative Agent, as amended, modified or
otherwise supplemented.
"Commitment Percentage" shall mean the Revolving Commitment Percentage
and/or the LOC Commitment Percentage, as appropriate.
"Commitment Period" shall mean the period from and including the Closing
Date to but not including the Maturity Date.
"Commitment Transfer Supplement" shall mean a Commitment Transfer
Supplement, substantially in the form of Schedule 9.6(c).
"Commonly Controlled Entity" shall mean an entity, whether or not
incorporated, which is under common control with the Borrower within the meaning
of Section 4001 of ERISA or is
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part of a group which includes 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 Borrower and its consolidated Subsidiaries for such
period, as determined in accordance with GAAP. The term "Consolidated Capital
Expenditures" shall not include capital expenditures in respect of the
reinvestment of proceeds derived from Recovery Events received by the Credit
Parties to the extent that such reinvestment is permitted under the Credit
Documents.
"Consolidated EBLIT" shall mean, for any period, the sum of (i)
Consolidated Net Income for such period, plus (ii) the amount which, in the
determination of Consolidated Net Income for such period, has been deducted for
(A) Consolidated Interest Expense, (B) total federal, state, local and foreign
income, value added and similar taxes and (C) Consolidated Lease Expense, all as
determined in accordance with GAAP.
"Consolidated EBLITDA" shall mean, for any period, the sum of (i)
Consolidated Net Income for such period, plus (ii) the amount which, in the
determination of Consolidated Net Income for such period, has been deducted for
(A) Consolidated Interest Expense, (B) total federal, state, local and foreign
income, value added and similar taxes, (C) Consolidated Lease Expense and (D)
depreciation, amortization expense and other non-cash charges, all as determined
in accordance with GAAP.
"Consolidated Interest Expense" shall mean, for any period, all interest
expense of the Borrower and its consolidated Subsidiaries for such period
including the interest component under Capital Leases, as determined in
accordance with GAAP.
"Consolidated Lease Expense" shall mean, for any period, all rental
expense of the Borrower and its consolidated Subsidiaries for such period under
operating leases, as determined in accordance with GAAP.
"Consolidated Net Income" shall mean, for any period, net income
(excluding (i) extraordinary items and (ii) to the extent not distributed to a
Credit Party in cash, equity and net income attributable to such Credit Party's
ownership of Minority Interests) after taxes for such period of the Borrower and
its consolidated Subsidiaries, as determined in accordance with GAAP.
"Consolidated Working Capital" shall mean, at any time, the excess of (i)
current assets of the Borrower and its consolidated Subsidiaries at such time
less (ii) current liabilities (including the Credit Party Obligations and
excluding current maturities of long-term Indebtedness) of the Borrower and its
consolidated Subsidiaries at such time, all as determined in accordance with
GAAP.
"Contractual Obligation" shall mean, as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound.
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"Credit Documents" shall mean this Agreement, each of the Notes, any
Joinder Agreement, the Letters of Credit and the LOC Documents.
"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, 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 to any Lender, or any Affiliate of a Lender, arising under any
Hedging Agreement.
"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.
"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 lawful and applicable
Federal, state, local and foreign statutes, laws, regulations, ordinances,
rules, judgments, orders, decrees, permits, concessions, grants, franchises,
licenses, agreements or other governmental restrictions relating to the
environment or to emissions, discharges, releases or threatened releases of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes into the environment including, without limitation, ambient
air, surface water, ground water, or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of pollutants, contaminants, chemicals, or industrial,
toxic or hazardous substances or wastes.
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"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurodollar Reserve Percentage" shall mean for any day, the percentage
(expressed as a decimal and rounded upwards, if necessary, to the next higher
1/100th of 1%) which is in effect for such day as prescribed by the Federal
Reserve Board (or any successor) for determining the maximum reserve requirement
(including without limitation any basic, supplemental or emergency reserves) in
respect of Eurocurrency liabilities, as defined in Regulation D of such Board as
in effect from time to time, or any similar category of liabilities for a member
bank of the Federal Reserve System in New York City.
"Event of Default" shall mean any of the events specified in Section 7.1;
provided, however, that any requirement for the giving of notice or the lapse of
time, or both, or any other condition, has been satisfied.
"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".
"First Union" shall mean First Union National Bank, a national banking
association.
"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 Indebtedness of such Person other than Indebtedness of the
types referred to in clauses (e), (f), (g), (i) and (m) of the definition of
"Indebtedness" set forth in this Section 1.1, (b) all Funded Debt of others of
the type referred to in clause (a) above secured by (or for which the holder of
such Funded Debt has an existing right, contingent or otherwise, to be secured
by) any Lien on, or payable out of the proceeds of production from, property
owned or acquired by such Person, whether or not the obligations secured thereby
have been assumed, (c) all Guaranty Obligations of such Person with respect to
Funded Debt of the type referred to in clause (a) above of another Person and
(d) Funded Debt of the type referred to in clause (a) above of any partnership
or unincorporated joint venture in which such Person is a general partner or a
joint venturer, to the extent such Person would under applicable law or any
governing agreement or instrument be liable therefor as a result of such
Person's ownership interest in or other relationship with such partnership or
unincorporated joint venture, except to the extent the terms of such
Indebtedness provide that such Person shall not be liable therefor.
"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 2.17.
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"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.
"Guaranty Obligations" means, with respect to any Person, without
duplication, any obligations of such Person (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or collection)
guaranteeing or intended to guarantee any Indebtedness of any other Person in
any manner, whether direct or indirect, and including without limitation any
obligation, whether or not contingent, (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 conditions 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 of the payment thereof, 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.
"Guarantor" shall mean (a) any of the Domestic Subsidiaries which is an
operating company and is identified as a "Guarantor" on the signature pages
hereto and (b) the Additional Credit Parties which execute a Joinder Agreement,
together with their successors and permitted assigns.
"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, the value of equity securities, currency values or raw material values,
including, without limitation, any interest rate swap, cap or collar agreement,
equity 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 (excluding
borrowings against life insurance policies incurred to pay the premiums under
such life insurance policies owned by such Person to the extent the amount
outstanding does not exceed the termination value of such policies), (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property purchased by such Person (other than customary
reservations or retentions of title under agreements with suppliers entered into
in the ordinary course of business), (d) all obligations of such Person issued
or assumed as the deferred purchase price of property or services purchased by
such Person (other than trade debt incurred in
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the ordinary course of business) which would appear as liabilities on a balance
sheet of such Person, (e) all obligations of such Person under take-or-pay or
similar arrangements or under commodities agreements, (f) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on, or payable out of
the proceeds of production from, property owned or acquired by such Person,
whether or not the obligations secured thereby have been assumed, provided, that
the amount of any Indebtedness of others that constitutes Indebtedness of such
Person solely by reason of this clause (f) shall not for purposes of this
Agreement exceed the greater of the book value or the fair market value of the
property subject to such Lien, (g) all Guaranty Obligations of such Person with
respect to Indebtedness of another Person, (h) the principal portion of all
obligations of such Person under Capital Leases, (i) all obligations of such
Person under Hedging Agreements, (j) the maximum amount of all standby letters
of credit issued or bankers' acceptances facilities created for the account of
such Person and, without duplication, all drafts drawn thereunder (to the extent
unreimbursed), (k) all preferred Capital Stock issued by such Person and which
by the terms thereof could be (at the request of the holders thereof or
otherwise) subject to mandatory sinking fund payments, redemption or other
acceleration, (l) the principal balance outstanding under any synthetic lease,
tax retention operating lease, off-balance sheet loan or similar off-balance
sheet financing product, and (m) the Indebtedness of any partnership or
unincorporated joint venture in which such Person is a general partner or a
joint venturer to the extent such Person would under applicable law or any
governing agreement or instrument be liable therefor as a result of such
Person's ownership interest in or other relationship with such partnership or
unincorporated joint venture, except to the extent the terms of such
Indebtedness provide that such Person shall not be liable therefor.
"Insolvency" shall mean, with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of such term as used in
Section 4245 of ERISA.
"Insolvent" shall mean being in a condition of Insolvency.
"Interest and Leases Coverage Ratio" shall mean, with respect to the
Borrower and its consolidated Subsidiaries on a consolidated basis for the
twelve month period ending on the last day of any fiscal quarter of the
Borrower, the ratio of (a) Consolidated EBLIT for such period to (b) the sum of
(i) Consolidated Interest Expense for such period plus (ii) Consolidated Lease
Expense for such period.
"Interest Payment Date" shall mean (a) as to any Alternate Base Rate
Loan, the last day of each March, June, September and December and on the
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, and (c) as to any LIBOR
Rate Loan having an Interest Period longer than three months, the day which is
three months after the first day of such Interest Period and the last day of
such Interest Period.
"Interest Period" shall mean, with respect to any LIBOR Rate Loan,
(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,
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three or six months thereafter, as selected by the Borrower in the notice
of borrowing or notice of conversion given with respect thereto; and
(ii) thereafter, each period commencing on the last day of the
immediately preceding Interest Period applicable to such LIBOR Rate Loan
and ending one, two, three or six months thereafter, as selected by the
Borrower by irrevocable notice to the Administrative Agent not less than
three Business Days prior to the last day of the then current Interest
Period with respect thereto;
provided 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
calendar month at the end of such Interest Period;
(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 Maturity Date shall end on
the Maturity Date; and
(E) no more than five(5) LIBOR Tranches may be in
effect at any time. For purposes hereof, LIBOR Rate Loans with
different Interest Periods shall be considered as separate LIBOR
Tranches, 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 Tranche.
"Investment" shall mean all investments, in cash or by delivery of
property made, directly or indirectly, in, to or from any Person, whether by
acquisition of shares of Capital Stock, property, assets, indebtedness or other
obligations or securities or by loan advance, capital contribution or otherwise.
"Issuing Lender" shall mean First Union.
"Issuing Lender Fees" shall have the meaning set forth in Section 2.3(c).
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"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 2.3
(b).
"Leverage Ratio" shall mean, with respect to the Borrower and its
consolidated Subsidiaries on a consolidated basis for the twelve month period
ending on the last day of any fiscal quarter of the Borrower, the ratio of (a)
Funded Debt of the Borrower and its consolidated Subsidiaries on a consolidated
basis on the last day of such period to (b) Consolidated EBLITDA for such
period.
"LIBOR" shall mean, for any LIBOR Rate Loan for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the
London interbank offered rate for deposits in Dollars at approximately 11:00
A.M. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period. If for any reason such
rate is not available, the term "LIBOR" shall mean, for any LIBOR Rate Loan for
any Interest Period therefor, the rate per annum (rounded upwards, if necessary,
to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London
interbank offered rate for deposits in Dollars at approximately 11:00 A.M.
(London time) two Business Days prior to the first day of such Interest Period
for a term comparable to such Interest Period; provided, however, if more than
one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be
the arithmetic mean of all such rates (rounded upwards, if necessary, to the
nearest 1/100 of 1%). If, for any reason, neither of such rates is available,
then "LIBOR" shall mean, for any LIBOR Rate Loan for any Interest Period
therefor, the rate per annum at which, as determined by the Administrative
Agent, Dollars in an amount comparable to such LIBOR Rate Loan 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.
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"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).
"Loans" shall have the meaning set forth in Section 2.1.
"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 the LOC Commitment Percentage for such Lender on Schedule 2.1(a),
as such percentage may be modified in connection with any assignment made in
accordance with the provisions of Section 9.6(c).
"LOC Committed Amount" shall mean, collectively, the aggregate amount of
all of the LOC Commitments of the Lenders to issue and participate in Letters of
Credit as referenced in Section 2.2 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.
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"Mandatory Borrowing" shall have the meaning set forth in Section 2.2(e).
"Material Adverse Effect" shall mean a material adverse effect on (a) the
business, operations, property and condition (financial or otherwise) of the
Credit Parties 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, whether
written or oral, to which the Borrower or any Subsidiary 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.
"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, materials
containing greater than 1% asbestos, polychlorinated biphenyls and
urea-formaldehyde insulation.
"Maturity Date" shall mean October 19, 2002.
"Minority Interest" shall mean with respect to any Credit Party, a Person
(other than a Subsidiary) with respect to which shares of its Capital Stock are
owned by such Credit Party.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc.
"Multiemployer Plan" shall mean a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Note" or "Notes" shall mean the promissory notes of the Borrower in
favor of each of the Lenders evidencing the 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.
"Notice of Borrowing" shall mean the written notice of borrowing as
referenced and defined in Section 2.1(b)(i).
"Notice of Conversion" shall mean the written notice of extension or
conversion as referenced and defined in Section 2.8.
"Obligations" shall mean, collectively, Loans and LOC Obligations.
"Participant" shall have the meaning set forth in Section 9.6(b).
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"Participation Interest" shall mean the purchase by a Lender of a
participation interest in Letters of Credit as provided in Section 2.2.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"Permitted Investments" shall mean:
(i) cash and Cash Equivalents;
(ii) receivables owing to the Borrower or any Subsidiary or
any 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, including receivables owing by a
BFD Licensee made and payable in accordance with the BFD Financing
Policy;
(iii) investments in and loans to any Credit Parties;
(iv) loans and advances to officers, directors, employees and
Affiliates made in the ordinary course of business plus such other loans
and advances to officers, directors, employees and Affiliates that do not
in the aggregate exceed $5,000,000 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) investments existing on the Closing Date and set forth
on Schedule 1.1(b);
(viii) investments in Foreign Subsidiaries (including any
minority-owned foreign entities or joint ventures) not to exceed an
aggregate amount of $15,000,000 at any time outstanding; and
(ix) additional loans, advances and/or investments to the
extent not permitted by the foregoing clauses hereof, provided that such
loans, advances and/or investments made pursuant to this clause (viii)
shall not exceed an aggregate amount of $10,000,000 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 Lenders or the Administrative Agent;
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(ii) purchase money Liens securing purchase money indebtedness
(and refinancings thereof) (A) to the extent permitted under Section
6.1(c) or (B) securing Indebtedness of the type described in Section
6.1(c) incurred by a Subsidiary of the Borrower which is not a Guarantor;
(iii) 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 the
Borrower or its Subsidiaries, as the case may be, in conformity with GAAP
(or, in the case of Subsidiaries with significant operations outside of
the United States of America, generally accepted accounting principles in
effect from time to time in their respective jurisdictions of
incorporation);
(iv) carriers', warehousemen's, 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 do
not in the aggregate materially detract from the value of the property
subject to such Lien or materially impair the use of such property in the
operation of the business of the Credit Parties or which are being
contested in good faith by appropriate proceedings;
(v) 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;
(vi) 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,
and deposits securing liabilities to insurance carriers under insurance
or self-insurance arrangements;
(vii) judgment liens in respect of judgments that have not
resulted in an Event of Default under Section 7.1(f);
(viii) easements, zoning restrictions, rights-of-way and
similar encumbrances on real property imposed by law or arising in the
ordinary course of business that are not incurred in connection with the
borrowing of money and do not in the aggregate materially detract from
the value of such property or materially impair the use of such property
in the operation of the business of the Credit Parties;
(ix) 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 (plus
improvements on such property);
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(x) Liens existing on the Closing Date and set forth on
Schedule 1.1(c); 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 shall not be extended, renewed,
refunded or refinanced;
(xi) Liens securing Indebtedness permitted by Section 6.1(i);
(xii) Liens incidental to the conduct of the business of the
Borrower and its Subsidiaries or the ownership of the property and assets
of the Borrower and its Subsidiaries, other than Liens on current assets,
not contemplated by the foregoing clauses but only to the extent that the
aggregate amount of Indebtedness or other obligations secured by such
Liens does not at any time exceed $5,000,000;
(xiii) leases or subleases granted to others not interfering
in any material respect with the business of any Credit Party; and
(xiv) any interest of title of a lessor under, and Liens
arising from UCC financing statements (or equivalent filings,
registrations or agreements in foreign jurisdictions) relating to, leases
permitted by this Credit Agreement.
"Person" shall mean an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
"Plan" shall mean, at any particular time, any employee benefit plan
which is covered by Title IV of ERISA and in respect of which the Borrower or a
Commonly Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"Prime Rate" shall have the meaning set forth in the definition of
Alternate Base Rate.
"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 the Borrower 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).
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"Reorganization" shall mean, with respect to any Multiemployer Plan, the
condition that such Plan is in reorganization within the meaning of such term as
used in Section 4241 of ERISA.
"Reportable Event" shall mean any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty-day notice
period is waived under PBGC Reg. Section 4043.
"Required Lenders" shall mean Lenders holding in the aggregate greater
than 50% of the Commitments and Participation Interests therein or outstanding
Loans and Participation Interests (including the Participation Interests of the
Issuing Lender in any Letters of Credit), as the case may be, provided, however,
that if any Lender shall be a Defaulting Lender at such time, then there shall
be excluded from the determination of Required Lenders, Obligations (including
Participation Interests) owing to such Defaulting Lender and such Defaulting
Lender's Commitments, or after termination of the Commitments, the principal
balance of the Obligations owing to such Defaulting Lender.
"Requirement of Law" shall mean, as to any Person, the Certificate of
Incorporation and Bylaws or other organizational or governing documents of such
Person, and each law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Responsible Officer" shall mean, as to (a) the Borrower, the Chief
Executive Officer, the Chief Operating Officer, the Vice President or the Chief
Accounting Officer or (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
the Borrower 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 the Borrower 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 the Borrower or any of its Subsidiaries, now or hereafter outstanding,
or (d) 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 Debt.
"Revolving Commitment" shall mean, with respect to each Lender, the
commitment of such Lender to make Loans in an aggregate principal amount at any
time outstanding up to such Lender's Revolving Committed Amount as specified in
Schedule 2.1(a), as such amount may be reduced from time to time in accordance
with the provisions hereof.
"Revolving Commitment Percentage" shall mean, for each Lender, the
percentage identified as its Revolving Commitment Percentage on Schedule 2.1(a),
as such percentage may
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be modified in connection with any assignment made in accordance with the
provisions of Section 9.6(c).
"Revolving Committed Amount" shall mean, collectively, the aggregate
amount of all Revolving Commitments as referenced in Section 2.1(a), as such
amount may be reduced from time to time in accordance with the provisions
hereof, and, individually, the amount of each Lender's Revolving Commitment as
specified on Schedule 2.1(a).
"S&P" shall mean Standard & Poor's, a division of The McGraw Hill
Companies, Inc.
"Scheduled Funded Debt Payments" shall mean, as of any date of
determination for the Borrower and its consolidated Subsidiaries, the sum of all
scheduled payments of principal on Funded Debt for the applicable 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).
"Single Employer Plan" shall mean any Plan which is not a Multiemployer
Plan.
"Solvent" shall mean, with respect to the Borrower and its Subsidiaries
on a particular date, that any such Person (a) has capital sufficient to carry
on its business and transactions and all business and transactions in which it
is about to engage and is able to pay its debts as they mature, (b) owns
property having a value, both at fair valuation and at present fair saleable
value, greater than the amount required to pay its probable liabilities
(including contingencies), and (c) does not believe that it will incur debts or
liabilities beyond its ability to pay such debts or liabilities as they mature.
"Specified Sales" shall mean (a) the sale, transfer, lease or other
disposition of inventory and materials in the ordinary course of business and
(b) the sale, transfer or other disposition of Permitted Investments described
in clause (i) of the definition thereof.
"Subordinated Debt" shall means any Indebtedness incurred by any Credit
Party which by its terms is specifically subordinated in right of payment to the
prior payment of the Credit Party Obligations.
"Subsidiary" shall mean, as to any Person at any time, (a) any
corporation more than 50% of whose Capital Stock of any class or classes having
by the terms thereof ordinary voting power to elect a majority of the directors
of such corporation (irrespective of whether or not at such time, any class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at such time owned by such Person directly
or indirectly through Subsidiaries, and (b) any partnership, association, joint
venture or other entity of which such Person directly or indirectly through
Subsidiaries owns at such time more than 50% of the Capital Stock. Unless
otherwise qualified, all references to a "Subsidiary" or to "Subsidiaries" in
this Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower.
"Taxes" shall have the meaning set forth in Section 2.16.
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"Tranche" shall mean the collective reference to LIBOR Rate Loans whose
Interest Periods begin and end on the same day. A Tranche may sometimes be
referred to as a "LIBOR Tranche".
"Transfer Effective Date" shall have the meaning set forth in each
Commitment Transfer Supplement.
"2.16 Certificate" shall have the meaning set forth in Section 2.16.
"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" means, with respect to any Person, Capital Stock issued by
such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even though the right so to vote
has been suspended by the happening of such a contingency.
"Year 2000 Compliant" shall have the meaning set forth in Section 3.25.
SECTION 1.2 OTHER DEFINITIONAL PROVISIONS.
(a) Unless otherwise specified therein, all terms defined in
this Agreement shall have the defined meanings when used in the Notes or
other Credit Documents or any certificate or other document made or
delivered pursuant hereto.
(b) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement
as a whole and not to any particular provision of this Agreement, and
Section, Subsection, Schedule and Exhibit references are to this
Agreement unless otherwise specified.
(c) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
SECTION 1.3 ACCOUNTING TERMS.
Unless otherwise specified herein, all accounting terms used herein shall
be interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP applied on a basis consistent with the most recent audited
consolidated financial statements of the Borrower delivered to the Lenders;
provided that, if the Borrower notifies the Administrative Agent that it wishes
to amend any covenant in Section 5.9 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 Borrower and the Required Lenders.
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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.
ARTICLE II
THE LOANS; AMOUNT AND TERMS
SECTION 2.1 LOANS.
(a) Revolving Commitment. During the Commitment Period,
subject to the terms and conditions hereof, each Lender severally agrees
to make revolving credit loans ("Loans") to the Borrower from time to
time for the purposes hereinafter set forth; provided, however, that (i)
with regard to each Lender individually, the sum of such Lender's share
of outstanding Loans plus such Lender's LOC Commitment Percentage of
outstanding LOC Obligations shall not exceed such Lender's Revolving
Commitment Percentage of the aggregate Revolving Committed Amount, and
(ii) with regard to the Lenders collectively, the sum of the aggregate
amount of outstanding Loans plus outstanding LOC Obligations shall not
exceed the Revolving Committed Amount. For purposes hereof, the aggregate
amount available hereunder shall be FIFTY MILLION DOLLARS ($50,000,000)
(as such aggregate maximum amount may be reduced from time to time as
provided in Section 2.4, the "Revolving Committed Amount"). 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 that no
more than five (5) separate LIBOR Tranches shall be outstanding at any
one time. LIBOR Rate Loans shall be made by each Lender at its LIBOR
Lending Office and Alternate Base Rate Loans at its Domestic Lending
Office.
(b) Loan Borrowings.
(i) Notice of Borrowing. The Borrower shall request a
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 date of the 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 Loan is requested, (B) the date of the
requested borrowing (which shall be a
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Business Day), (C) the aggregate principal amount to be borrowed,
(D) whether the borrowing shall be comprised of Alternate Base
Rate Loans, LIBOR Rate Loans or a combination thereof, and if
LIBOR Rate Loans are requested, the Interest Period(s) therefor.
A form of Notice of Borrowing (a "Notice of Borrowing") is
attached as Schedule 2.1(b)(i). If the Borrower shall fail to
specify in any such Notice of Borrowing (I) an applicable
Interest Period in the case of a LIBOR Rate Loan, then such
notice shall be deemed to be a request for an Interest Period of
one month, or (II) the type of Loan requested, then such notice
shall be deemed to be a request for an Alternate Base Rate Loan
hereunder. The Administrative Agent shall give notice to each
Lender promptly upon receipt of each Notice of Borrowing, the
contents thereof and each such Lender's share thereof.
(ii) Minimum Amounts. Each Loan borrowing shall be in
a minimum aggregate amount of (A) with respect to LIBOR Rate
Loans, $1,000,000 and integral multiples of $500,000 in excess
thereof (or the remaining amount of the Revolving Committed
Amount, if less) or (B) with respect to Alternate Base Rate
Loans, $500,000 and integral multiples of $100,000 in excess
thereof (or the remaining amount of the Revolving Committed
Amount, if less).
(iii) Advances. Each Lender will make its Revolving
Commitment Percentage of each Loan borrowing available to the
Administrative Agent for the account of the Borrower at the
office of the Administrative Agent specified in Schedule 9.2, or
at such other office as the Administrative Agent may designate in
writing, by 1:00 P.M. (Charlotte, North Carolina time) on the
date specified in the applicable Notice of Borrowing in Dollars
and in funds immediately available to the Administrative Agent.
Such borrowing will then be made available to the Borrower by the
Administrative Agent by crediting the account of the Borrower on
the books of such office with the aggregate of the amounts made
available to the Administrative Agent by the Lenders and in like
funds as received by the Administrative Agent.
(c) Repayment. The principal amount of all Loans shall be due
and payable in full on the Maturity Date.
(d) Interest. Subject to the provisions of Section 2.9, Loans
shall bear interest as follows:
(i) Alternate Base Rate Loans. During such periods as
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 Loans
shall be comprised of LIBOR Rate Loans, each such LIBOR Rate Loan
shall bear interest
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at a per annum rate equal to the sum of the LIBOR Rate for the
related Interest Period plus the Applicable Percentage.
Interest on Loans shall be payable in arrears on each Interest Payment
Date.
(e) Notes. Each Lender's Revolving Commitment Percentage of
the Loans shall be evidenced by a duly executed promissory note of the
Borrower to such Lender in substantially the form of Schedule 2.1(e).
SECTION 2.2 LETTER OF CREDIT SUBFACILITY.
(a) Issuance. Subject to the terms and conditions hereof and
of the LOC Documents, if any, and any other terms and conditions which
the Issuing Lender may reasonably require, during the Commitment Period
the Issuing Lender shall issue, and the Lenders shall participate in,
Letters of Credit for the account of the Borrower from time to time upon
request in a form acceptable to the Issuing Lender; provided, however,
that (i) the aggregate amount of LOC Obligations shall not at any time
exceed TEN MILLION DOLLARS ($10,000,000) (the "LOC Committed Amount"),
(ii) the sum of the aggregate amount of Loans outstanding plus LOC
Obligations outstanding shall not at any time exceed the Revolving
Committed Amount, (iii) all Letters of Credit shall be denominated in
U.S. Dollars and (iv) Letters of Credit shall be issued for lawful
corporate purposes and may be issued as standby letters of credit,
including in connection with workers' compensation and other insurance
programs, and trade letters of credit. Except as otherwise expressly
agreed upon by all the Lenders, no Letter of Credit shall have an
original expiry date more than twelve (12) months from the date of
issuance; provided, however, so long as no Default or Event of Default
has occurred and is continuing and subject to the other terms and
conditions to the issuance of Letters of Credit hereunder, the expiry
dates of Letters of Credit may be extended annually or periodically from
time to time on the request of the Borrower or by operation of the terms
of the applicable Letter of Credit to a date not more than twelve (12)
months from the date of extension; provided, further, that no Letter of
Credit, as originally issued or as extended, shall have an expiry date
extending beyond the Maturity Date. Each Letter of Credit shall comply
with the related LOC Documents. The issuance and expiry date of each
Letter of Credit shall be a Business Day. First Union shall be the
Issuing Lender on all Letters of Credit issued after the Closing Date.
(b) Notice and Reports. The request for the issuance of a
Letter of Credit shall be submitted to the Issuing Lender at least three
(3) 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
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of Credit. The Issuing Lender will provide to the Administrative Agent
promptly upon request a summary report of the nature and extent of LOC
Obligations then outstanding.
(c) Participations. Each Lender upon issuance of a Letter of
Credit shall be deemed to have purchased without recourse a risk
participation from the Issuing Lender in such Letter of Credit and the
obligations arising thereunder and any collateral relating thereto, in
each case in an amount equal to its LOC Commitment Percentage of the
obligations under such Letter of Credit and shall absolutely,
unconditionally and irrevocably assume, as primary obligor and not as
surety, and be obligated to pay to the Issuing Lender therefor and
discharge when due, its LOC Commitment Percentage of the obligations
arising under such Letter of Credit. Without limiting the scope and
nature of each Lender's participation in any Letter of Credit, to the
extent that the Issuing Lender has not been reimbursed as required
hereunder or under any LOC Document, each such Lender shall pay to the
Issuing Lender its LOC Commitment Percentage of such unreimbursed drawing
in same day funds on the day of notification by the Issuing Lender of an
unreimbursed drawing pursuant to the provisions of subsection (d) hereof.
The obligation of each Lender to so reimburse the Issuing Lender shall be
absolute and unconditional and shall not be affected by the occurrence of
a Default, an Event of Default or any other occurrence or event. Any such
reimbursement shall not relieve or otherwise impair the obligation of the
Borrower to reimburse the Issuing Lender under any Letter of Credit,
together with interest as hereinafter provided.
(d) Reimbursement. In the event of any drawing under any
Letter of Credit, the Issuing Lender will promptly notify the Borrower
and the Administrative Agent. The Borrower shall reimburse the Issuing
Lender on the day of drawing under any Letter of Credit (with the
proceeds of a 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 Loan in the amount of the drawing as provided
in subsection (e) hereof, the proceeds of which will be used to satisfy
the reimbursement obligations. The Borrower's reimbursement obligations
hereunder shall be absolute and unconditional under all circumstances
irrespective of any rights of set-off, counterclaim or defense to payment
the Borrower may claim or have against the Issuing Lender, the
Administrative Agent, the Lenders, the beneficiary of the Letter of
Credit drawn upon or any other Person, including without limitation any
defense based on any failure of the Borrower to receive consideration or
the legality, validity, regularity or unenforceability of the Letter of
Credit. The Issuing Lender will promptly notify the other Lenders of the
amount of any unreimbursed drawing and each Lender shall promptly pay to
the Administrative Agent for the account of the Issuing Lender in Dollars
and in immediately available funds, the amount of such Lender's LOC
Commitment Percentage of such unreimbursed drawing. Such payment shall be
made on the day such notice is received by such Lender from the Issuing
Lender if such notice is received at or before 2:00 P.M. (Charlotte,
North Carolina time), otherwise such payment shall be made at or before
12:00 Noon
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(Charlotte, North Carolina time) on the Business Day next succeeding the
day such notice is received. If such Lender does not pay such amount to
the Issuing Lender in full upon such request, such Lender shall, on
demand, pay to the Administrative Agent for the account of the Issuing
Lender interest on the unpaid amount during the period from the date of
such drawing until such Lender pays such amount to the Issuing Lender in
full at a rate per annum equal to, if paid within two (2) Business Days
of the date of drawing, the Federal Funds Effective Rate and thereafter
at a rate equal to the Alternate Base Rate. Each Lender's obligation to
make such payment to the Issuing Lender, and the right of the Issuing
Lender to receive the same, shall be absolute and unconditional, shall
not be affected by any circumstance whatsoever and without regard to the
termination of this Agreement or the Commitments hereunder, the existence
of a Default or Event of Default or the acceleration of the Credit Party
Obligations hereunder and shall be made without any offset, abatement,
withholding or reduction whatsoever.
(e) Repayment with Loans. On any day on which the Borrower
shall have requested, or been deemed to have requested, a Loan to
reimburse a drawing under a Letter of Credit, the Administrative Agent
shall give notice to the Lenders that a Loan has been requested or deemed
requested in connection with a drawing under a Letter of Credit, in which
case a Loan borrowing comprised entirely of Alternate Base Rate Loans
(each such borrowing, a "Mandatory Borrowing") shall be immediately made
(without giving effect to any termination of the Commitments pursuant to
Section 7.2) pro rata based on each Lender's respective Revolving
Commitment Percentage (determined before giving effect to any termination
of the Commitments pursuant to Section 7.2) and the proceeds thereof
shall be paid directly to the Issuing Lender for application to the
respective LOC Obligations. Each Lender hereby irrevocably agrees to make
such 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 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 a Loan to be made by the time otherwise
required in Section 2.1(b), (v) the date of such Mandatory Borrowing, or
(vi) any reduction in the Revolving Committed Amount after any such
Letter of Credit may have been drawn upon; provided, however, that in the
event any such Mandatory Borrowing should be less than the minimum amount
for borrowings of 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 with respect to the Borrower), then
each such Lender hereby agrees that it shall forthwith fund (as of the
date the Mandatory Borrowing would otherwise have occurred, but adjusted
for any payments received from the Borrower on or after such date and
prior to such purchase) its Participation Interests in the outstanding
LOC Obligations; provided, further, that in the event any Lender shall
fail to fund its Participation Interest on the day the Mandatory
Borrowing would otherwise have occurred, then the amount of such Lender's
unfunded
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Participation Interest therein shall bear interest payable to the Issuing
Lender upon demand, at the rate equal to, if paid within two (2) Business
Days of such date, the Federal Funds Effective Rate, and thereafter at a
rate equal to the Alternate Base Rate.
(f) Modification, Extension. The issuance of any supplement,
modification, amendment, renewal, or extension to any Letter of Credit
shall, for purposes hereof, be treated in all respects the same as the
issuance of a new Letter of Credit hereunder.
(g) Uniform Customs and Practices. The Issuing Lender shall
have the Letters of Credit be subject to The Uniform Customs and Practice
for Documentary Credits (the "UCP") or the International Standby
Practices 1998 (the "ISP98"), in either case as published as of the date
of issue by the International Chamber of Commerce, in which case the UCP
or the ISP98, as applicable, may be incorporated therein and deemed in
all respects to be a part thereof.
SECTION 2.3 FEES.
(a) Commitment Fee. In consideration of the Revolving
Commitment, the Borrower agrees to pay to the Administrative Agent for
the ratable benefit of the Lenders a commitment fee (the "Commitment
Fee") in an amount equal to the Applicable Percentage per annum on the
average daily unused amount 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 calendar quarter for the prior calendar
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-eighth of one percent (.125 %) per annum on
the average daily maximum amount available to be drawn under each such
Letter of Credit issued by it. The Issuing Lender shall promptly pay over
to the Administrative Agent for the ratable benefit of the Lenders
(including the Issuing Lender) the Letter of Credit Fee. The Letter of
Credit Fee shall be payable quarterly in arrears on the 15th day
following the last day of each calendar quarter for the prior calendar
quarter.
(c) Issuing Lender Fees. In addition to the Letter of Credit
Fees payable pursuant to subsection (b) hereof, the Borrower shall pay to
the Issuing Lender for its own account without sharing by the other
Lenders the reasonable and customary charges from time to time of the
Issuing Lender with respect to the amendment, transfer, administration,
cancellation and conversion of, and drawings under, such Letters of
Credit (collectively, the "Issuing Lender Fees").
(d) Administrative Fee. The Borrower agrees to pay to the
Administrative Agent the annual administrative fee as described in the
Commitment Letter.
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SECTION 2.4 COMMITMENT REDUCTIONS.
(a) Voluntary Reductions. The Borrower shall have the right
to terminate or permanently reduce the unused portion of the Revolving
Committed Amount at any time or from time to time upon not less than five
Business Days' prior notice to the Administrative Agent (which shall
notify the Lenders thereof as soon as practicable of each such
termination or reduction), which notice shall specify the effective date
thereof and the amount of any such reduction which shall be in a minimum
amount of $1,000,000 or a whole multiple of $100,000 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 then outstanding aggregate
principal amount of the Loans plus outstanding LOC Obligations would
exceed the Revolving Committed Amount.
(b) Maturity Date. The Revolving Commitment and the LOC
Commitment shall automatically terminate on the Maturity Date.
SECTION 2.5 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 Loans shall be in a minimum principal
amount of $1,000,000 and integral multiples of $500,000 in excess thereof
with respect to LIBOR Rate Loans, and $500,000 and integral multiples of
$100,000 in excess thereof with respect to Alternate Base Rate Loans. 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 2.5(a) shall be applied first to Alternate Base Rate Loans
and then to LIBOR Rate Loans in direct order of Interest Period
maturities. All prepayments under this Section 2.5(a) shall be subject to
Section 2.15, but otherwise without premium or penalty. Interest on the
principal amount prepaid shall be payable on the next occurring Interest
Payment Date that would have occurred had such loan not been prepaid or,
at the request of the Administrative Agent, interest on the principal
amount prepaid shall be payable on any date that a prepayment is made
hereunder through the date of prepayment. Amounts prepaid on the Loans
may be reborrowed in accordance with the terms hereof.
(b) Mandatory Prepayments.
(i) Revolving Committed Amount. If at any time after
the Closing Date, the sum of the aggregate principal amount of
outstanding Loans plus outstanding LOC Obligations shall exceed
the Revolving Committed Amount, the Borrower immediately shall
prepay the Loans and (after all Loans have been
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repaid) cash collateralize the LOC Obligations, in an amount
sufficient to eliminate such excess.
(ii) Application of Mandatory Prepayments. All
amounts required to be paid pursuant to this Section 2.5(b) shall
be applied first to the Loans and (after all Loans have been
repaid) to a cash collateral account in respect of LOC
Obligations. 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. All prepayments under this Section 2.5(b)
shall be subject to Section 2.15 and be accompanied by interest
on the principal amount prepaid through the date of prepayment.
SECTION 2.6 MINIMUM PRINCIPAL AMOUNT OF TRANCHES.
All borrowings, payments and prepayments in respect of the 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 Loans comprising any
Tranche shall not be less than $500,000 or a whole multiple of $100,000 in
excess thereof.
SECTION 2.7 DEFAULT RATE AND PAYMENT DATES.
Upon the occurrence, and during the continuance, of an Event of Default,
the principal of and, to the extent permitted by law, interest on the Loans and
any other amounts owing hereunder or under the other Credit Documents shall bear
interest, payable on demand, at a per annum rate 2% greater than the rate which
would otherwise be applicable (or if no rate is applicable, whether in respect
of interest, fees or other amounts, then the Alternate Base Rate plus 2%).
SECTION 2.8 CONVERSION OPTIONS.
(a) The Borrower may elect from time to time to convert
Alternate Base Rate Loans to LIBOR Rate Loans, by giving the
Administrative Agent irrevocable written notice of such election not
later than 11:00 a.m. (Charlotte, North Carolina time) on the date which
is three Business Days prior to the requested date of conversion. A form
of Notice of Conversion/ Extension is attached as Schedule 2.8. If the
date upon which an Alternate Base Rate Loan is to be converted to a LIBOR
Rate Loan is not a Business Day, then such conversion shall be made on
the next succeeding Business Day and during the period from such last day
of an Interest Period to such succeeding Business Day such Loan shall
bear interest as if it were an Alternate Base Rate Loan. All or any part
of outstanding Alternate Base Rate Loans may be converted as provided
herein, provided that (i) no Loan may be converted into a LIBOR Rate Loan
when any Default or Event of Default has occurred and is continuing and
(ii) partial conversions shall be in an aggregate principal amount of
$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
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provisions contained in Section 2.8(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 2.9 COMPUTATION OF INTEREST AND FEES.
(a) Interest payable hereunder with respect to Alternate Base
Rate Loans shall be calculated on the basis of a year of 365 days (or 366
days, as applicable) for the actual days elapsed. All other fees,
interest and all other amounts payable hereunder shall be calculated on
the basis of a 360 day year for the actual days elapsed. The
Administrative Agent shall as soon as practicable notify the Borrower and
the Lenders of each determination of a LIBOR Rate on the Business Day of
the determination thereof. Any change in the interest rate on a Loan
resulting from a change in the Alternate Base Rate shall become effective
as of the opening of business on the day on which such change in the
Alternate Base Rate shall become effective. The Administrative Agent
shall as soon as practicable notify the Borrower and the Lenders of the
effective date and the amount of each such change.
(b) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall be
conclusive and binding on the Borrower and the Lenders in the absence of
manifest error. The Administrative Agent shall, at the request of the
Borrower, deliver to the Borrower a statement showing in reasonable
detail the computations used by the Administrative Agent in determining
any interest rate.
SECTION 2.10 PRO RATA TREATMENT AND PAYMENTS.
(a) Each borrowing of Loans and any reduction of the Revolving
Commitments shall be made pro rata according to the respective Commitment
Percentages of the Lenders. Each payment under this Agreement or any Note shall
be applied, first, to any fees then due and owing by the Borrower pursuant to
Section 2.3, 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
2.3 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 Loans, shall be made
pro rata according to the respective amounts due and owing in accordance with
Section 2.5 hereof. Each optional prepayment on account of principal of the
Loans shall be applied to such of the Loans as the Borrower may designate (to be
applied pro rata among the Lenders); provided, that prepayments made pursuant to
Section 2.11 shall be applied in accordance with such section. Each mandatory
prepayment on account of principal of the Loans
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shall be applied in accordance with Section 2.5(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 2.16(b)) and shall be made to the Administrative Agent for the
account of the Lenders at the Administrative Agent's office specified on
Schedule 9.2 in Dollars and in immediately available funds not later than 1:00
P.M. (Charlotte, North Carolina time) on the date when due. The Administrative
Agent shall distribute such payments to the Lenders entitled thereto promptly
upon receipt in like funds as received. If any payment hereunder (other than
payments on the LIBOR Rate Loans) becomes due and payable on a day other than a
Business Day, such payment shall be extended to the next succeeding Business
Day, and, with respect to payments of principal, interest thereon shall be
payable at the then applicable rate during such extension. If any payment on a
LIBOR Rate Loan becomes due and payable on a day other than a Business Day, the
maturity thereof shall be extended to the next succeeding Business Day unless
the result of such extension would be to extend such payment into another
calendar month, in which event such payment shall be made on the immediately
preceding Business Day.
(b) Allocation of Payments After Event of Default. Notwithstanding
any other provisions of this 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
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;
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;
FIFTH, to the payment of the outstanding principal amount of the
Credit Party Obligations (including the payment or cash collateralization
of the outstanding LOC Obligations);
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.
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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 and LOC Obligations held by such Lender bears to the
aggregate then outstanding Loans and LOC Obligations) 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", "SIXTH", and "SEVENTH" above in the
manner provided in this Section 2.10(b).
SECTION 2.11 NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE AGENT.
(a) Unless the Administrative Agent shall have been notified in
writing by a Lender prior to the date a Loan is to be made by such Lender
(which notice shall be effective upon receipt) that such Lender does not
intend to make the proceeds of such Loan available to the Administrative
Agent, the Administrative Agent may assume that such Lender has made such
proceeds available to the Administrative Agent on such date, and the
Administrative Agent may in reliance upon such assumption (but shall not
be required to) make available to the Borrower a corresponding amount. If
such corresponding amount is not in fact made available to the
Administrative Agent, the Administrative Agent shall be able to recover
such corresponding amount from such Lender. If such Lender does not pay
such corresponding amount forthwith upon the Administrative Agent's
demand therefor, the Administrative Agent will promptly notify the
Borrower, and the Borrower shall immediately pay such corresponding
amount to the Administrative Agent. The Administrative Agent shall also
be entitled to recover from the Lender or the Borrower, as the case may
be, interest on such corresponding amount in respect of each day from the
date such corresponding amount was made available by the Administrative
Agent to the Borrower to the date such corresponding amount is recovered
by the Administrative Agent at a per annum rate equal to (i) from the
Borrower at the applicable rate for the applicable borrowing pursuant to
the Notice of Borrowing and (ii) from a Lender at the Federal Effective
Funds Rate.
(b) Unless the Administrative Agent shall have been notified
in writing by the Borrower, prior to the date on which any payment is due
from it hereunder (which notice shall be effective upon receipt) that the
Borrower does not intend to make such payment, the Administrative Agent
may assume that such Borrower has made such payment when due, and the
Administrative Agent may in reliance upon such assumption (but shall not
be required to) make available to each Lender on such payment date an
amount equal to the portion of such assumed payment to which such Lender
is entitled hereunder, and if the Borrower has not in fact made such
payment to the Administrative Agent, such Lender shall, on demand, repay
to the Administrative Agent the amount made available
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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 2.11 showing in reasonable detail the computations used by the
Administrative Agent in determining such amounts shall be conclusive in
the absence of manifest error.
SECTION 2.12 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 be converted into
Alternate Base Rate Loans. Until any such notice has been withdrawn by the
Administrative Agent, no further Loans shall be made as, continued as, or
converted into, LIBOR Rate Loans for the Interest Periods so affected.
SECTION 2.13 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, in each case made
subsequent to the date hereof, 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 (which notice shall be given promptly after
such condition or situation 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
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Period for such Loans or within such earlier period as required by law as
Alternate Base Rate Loans. The Borrower hereby agrees promptly to pay any
Lender, within fifteen (15) days after demand by such Lender, any additional
amounts necessary to compensate such Lender for actual and direct costs (but not
including anticipated profits) reasonably incurred by such Lender in making any
repayment in accordance with this Section including, but not limited to, any
interest or fees payable by such Lender to lenders of funds obtained by it in
order to make or maintain its LIBOR Rate Loans hereunder. A certificate as to
any additional amounts payable pursuant to this Section submitted by such
Lender, through the Administrative Agent, to the Borrower showing in reasonable
detail the computations used by such Lender in determining such amounts 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 reasonably deemed by such Lender to be material.
SECTION 2.14 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, or 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 taxes excluded under
Section 2.16(a));
(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
in connection with this Agreement (except for any tax of any kind
which are separately addressed in Section 2.16);
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 pay such Lender, within fifteen (15)
days after demand by such Lender, 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
reasonably 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 showing in reasonable
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detail the computations used by such Lender in determining such amounts
and the method by which such Lender allocated such amounts to the
Borrower (which method must have been applied by such Lender in good
faith) 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 reasonably deemed by such Lender to
be material.
(b) If the adoption of or any change in any Requirement of
Law regarding capital adequacy or in the interpretation or application
thereof or compliance by any Lender or any corporation controlling such
Lender with any request or directive regarding capital adequacy (whether
or not having the force of law) from any central bank or Governmental
Authority made subsequent to the date hereof does or shall have the
effect of reducing the rate of return on such Lender's or such
corporation's capital as a consequence of its obligations hereunder to a
level below that which such Lender or such corporation could have
achieved but for such adoption, change or compliance (taking into
consideration such Lender's or such corporation's policies with respect
to capital adequacy) by an amount reasonably deemed by such Lender to be
material, then from time to time, within fifteen (15) days after demand
by such Lender, the Borrower shall pay to such Lender such additional
amount as shall be certified by such Lender as being required to
compensate it for such reduction. Such a certificate as to any additional
amounts payable under this Section submitted by a Lender (which
certificate shall include a reasonably detailed description of the basis
for the computation and the method by which such Lender allocated such
amounts to the Borrower which method must have been applied by such
Lender in good faith), through the Administrative Agent, to the Borrower
shall be conclusive absent 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 reasonably deemed by such Lender to be material.
(c) The agreements in this Section 2.14 shall survive the
termination of this Agreement and payment of the Notes and all other
amounts payable hereunder.
SECTION 2.15 INDEMNITY.
The Borrower hereby agrees to indemnify each Lender and to hold such
Lender harmless from any funding loss or expense which such Lender may sustain
or incur as a consequence of (a) default by the Borrower in payment of the
principal amount of or interest on any Loan by such Lender in accordance with
the terms hereof, (b) default by the Borrower in accepting a borrowing after the
Borrower has given a notice in accordance with the terms hereof, (c) default by
the Borrower in making any prepayment after the Borrower has given a notice in
accordance with the terms hereof, and/or (d) the making by the Borrower of a
prepayment of a Loan, or the
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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 show in reasonable detail the
computations used by such Lender in determining such amounts) 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 2.16 TAXES.
(a) All payments made by the Borrower hereunder or under any
Note will be, except as provided in Section 2.16(b), made free and clear
of, and without deduction or withholding for, any present or future
taxes, levies, imposts, duties, fees, assessments or other charges of
whatever nature now or hereafter imposed by any Governmental Authority or
by any political subdivision or taxing authority thereof or therein with
respect to such payments (but excluding any tax imposed on or measured by
the overall gross or net income or profits of a Lender and any franchise
taxes imposed on 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 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
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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 2.16 (any such
certificate, a "2.16 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
2.16(a), but subject to the immediately succeeding sentence, (x) each
Borrower shall be entitled, to the extent it is required to do so by law,
to deduct or withhold Taxes imposed by the United States (or any
political subdivision or taxing authority thereof or therein) from
interest, fees or other amounts payable hereunder for the account of any
Lender which is not a United States person (as such term is defined in
Section 7701(a)(30) of the Code) for U.S. Federal income tax purposes to
the extent that such Lender has not provided to the Borrower U.S.
Internal Revenue Service Forms that establish a complete exemption from
such deduction or withholding and (y) the Borrower shall not be obligated
pursuant to Section 2.16(a) 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 2.16(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 2.16, the Borrower agrees to pay additional amounts and
to indemnify each Lender in the manner set forth in Section 2.16(a)
(without regard to the identity of the jurisdiction requiring the
deduction or withholding) in respect of any amounts deducted or withheld
by it as described in the immediately preceding sentence as a result of
any changes after the Closing Date in any applicable law, treaty,
governmental rule, regulation, guideline or order, or in the
interpretation thereof, relating to the deducting or withholding of
Taxes.
(c) Each Lender agrees to use reasonable efforts (including
reasonable efforts to change its Domestic Lending Office or LIBOR Lending
Office, as the case may be) to avoid or to minimize any amounts which
might otherwise be payable pursuant to this Section; provided, however,
that such efforts shall not cause the imposition on such Lender of any
additional costs or legal or regulatory burdens reasonably deemed by such
Lender to be material.
(d) If the Borrower pays any additional amount pursuant to
this Section 2.16 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
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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 2.16, 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 2.16 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 2.16 to the Borrower or any other
party.
(e) The agreements in this Section 2.16 shall survive the
termination of this Agreement and the payment of the Notes and all other
amounts payable hereunder.
SECTION 2.17 INDEMNIFICATION; NATURE OF ISSUING LENDER'S DUTIES.
(a) In addition to its other obligations under Section 2.4,
the Borrower hereby agrees to protect, indemnify, pay and save each
Issuing Lender harmless from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including
reasonable attorneys' fees) that the Issuing Lender may incur or be
subject to as a consequence, direct or indirect, of (i) the issuance of
any Letter of Credit or (ii) the failure of the Issuing Lender to honor a
drawing under a Letter of Credit as a result of any act or omission,
whether rightful or wrongful, of any present or future de jure or de
facto government or governmental authority (all such acts or omissions,
herein called "Government Acts").
(b) As between the Borrower and the Issuing Lender, the
Borrower shall assume all risks of the acts, omissions or misuse of any
Letter of Credit by the beneficiary thereof. The Issuing Lender shall not
be responsible: (i) for the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in
connection with the application for and issuance of any Letter of Credit,
even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (ii) for the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, that may prove to be
invalid or ineffective for any reason; (iii) for its refusal to honor any
draw under a Letter of Credit where the beneficiary has failed to comply
fully with conditions required in order to draw upon such Letter of
Credit; (iv) for errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they be in cipher; (v) for errors in
interpretation of technical terms; (vi) for any loss or delay in the
transmission or otherwise of any document required in order to make a
drawing under a Letter of Credit or of the proceeds thereof; and (vii)
for any consequences arising from causes beyond the control of the
Issuing Lender, including, without limitation, any Government Acts. None
of the above shall affect, impair, or prevent the vesting of the Issuing
Lender's rights or powers hereunder.
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(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 2.17 is intended to limit the
reimbursement obligation of the Borrower contained in Section 2.2(d)
hereof. The obligations of the Borrower under this Section 2.17 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 2.17, the Borrower shall have no obligation to indemnify any
Issuing Lender in respect of any liability incurred by such Issuing
Lender arising out of the gross negligence or willful misconduct of the
Issuing Lender (including action not taken by an Issuing Lender), or
caused by such Issuing Lender's failure to pay under any Letter of Credit
after presentation to it of a request strictly complying with the terms
and conditions of such Letter of Credit, unless such payment is
prohibited by any law, regulation, court order or decree.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Agreement and to make the
Extensions of Credit herein provided for, the Credit Parties hereby represent
and warrant to the Administrative Agent and to each Lender that:
SECTION 3.1 FINANCIAL CONDITION.
The balance sheets of the Borrower and its consolidated Subsidiaries as
of November 30, 1997 and November 28, 1998 and the related statements of income
and of cash flows of the Borrower and its consolidated Subsidiaries for the
fiscal years then ended audited by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP are complete and correct
and present fairly the financial condition of the Borrower and its consolidated
Subsidiaries as of such dates and the results of their operations
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and cash flows for such fiscal years. All such financial statements, including
the related schedules and notes thereto, have been prepared in accordance with
GAAP applied consistently throughout the periods involved (except as disclosed
therein). Additionally, the company-prepared pro forma balance sheets and the
five-year projections have been prepared in good faith based upon reasonable
assumptions.
SECTION 3.2 NO CHANGE.
Since May 29, 1999 (and, after delivery of annual audited financial
statements in accordance Section 5.1(a), from the date of the most recently
delivered annual audited financial statements), there has been no development or
event which has had or could reasonably be expected to have a Material Adverse
Effect.
SECTION 3.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW.
Each of the Credit Parties (a) is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, (b) has
the requisite power and authority and the legal right to own and operate all its
material property, to lease the material property it operates as lessee and to
conduct the business in which it is currently engaged, (c) is duly qualified to
conduct business and in good standing under the laws of each jurisdiction where
its ownership, lease or operation of property or the conduct of its business
requires such qualification except to the extent that the failure to so qualify
or be in good standing could not, in the aggregate, reasonably be expected to
have a Material Adverse Effect and (d) is in compliance with all Requirements of
Law except to the extent that the failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
SECTION 3.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS;
NO CONSENTS.
Each of the Borrower and the other Credit Parties has full power and
authority and the legal right to make, deliver and perform the Credit Documents
to which it is party and has taken all necessary limited liability company or
corporate action to authorize the execution, delivery and performance by it of
the Credit Documents to which it is party. No consent or authorization of,
filing with, notice to or other act by or in respect of, any Governmental
Authority or any other Person is required in connection with the borrowings
hereunder or with the execution, delivery or performance of any Credit Document
by the Borrower 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'
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rights generally and by general equitable principles (whether enforcement is
sought by proceedings in equity or at law).
SECTION 3.5 NO LEGAL BAR; NO DEFAULT.
The execution, delivery and performance of the Credit Documents, the
borrowings thereunder and the use of the proceeds of the Loans will not violate
any Requirement of Law, any organizational document or any Contractual
Obligation of the Borrower or its Subsidiaries (except those as to which waivers
or consents have been obtained or, in the case of Contractual Obligations,
violations which could not reasonably be expected to have a Material Adverse
Effect), and will not result in, or require, the creation or imposition of any
Lien on any of its or their respective properties or revenues pursuant to any
Requirement of Law or Contractual Obligation other than the Liens arising under
or contemplated in connection with the Credit Documents. Neither the Borrower
nor any of its Subsidiaries is in default under or with respect to any of its
Contractual Obligations in any respect which could reasonably be expected to
have a Material Adverse Effect. No Default or Event of Default has occurred and
is continuing.
SECTION 3.6 NO MATERIAL LITIGATION.
Except as set forth on Schedule 3.6, no litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the best knowledge of the Borrower, threatened by or against the Borrower or
any of its Subsidiaries or against any of its or their respective properties or
revenues (a) with respect to the Credit Documents or any Loan or any of the
transactions contemplated hereby, or (b) which could reasonably be expected to
have a Material Adverse Effect.
SECTION 3.7 INVESTMENT COMPANY ACT.
Neither the Borrower nor any 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 Borrower
and its Subsidiaries taken as a group do not own "margin stock" except as
identified in the financial statements referred to in Section 3.1 and on
Schedule 1.1B and the aggregate value of all "margin stock" owned by the Credit
Parties taken as a group does not exceed 25% of the value of their assets.
SECTION 3.9 ERISA.
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
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prior to the date on which this representation is made or deemed made with
respect to any Plan, and each Plan has complied in all material respects with
the applicable provisions of ERISA and the Code, except to the extent that any
such occurrence or failure to comply would not reasonably be expected to have a
Material Adverse Effect. No termination of a Single Employer Plan has occurred
resulting in any liability that has remained underfunded, and no Lien in favor
of the PBGC or a Plan has arisen, during such five-year period which could
reasonably be expected to have a Material Adverse Effect. The present value of
all accrued benefits under each Single Employer Plan (based on those assumptions
used to fund such Plans) did not, as of the last annual valuation date prior to
the date on which this representation is made or deemed made, exceed the value
of the assets of such Plan allocable to such accrued benefits by an amount
which, as determined in accordance with GAAP, could reasonably be expected to
have a Material Adverse Effect. Neither the Borrower nor any Commonly Controlled
Entity is currently subject to any liability for a complete or partial
withdrawal from a Multiemployer Plan which could reasonably be expected to have
a Material Adverse Effect.
SECTION 3.10 ENVIRONMENTAL MATTERS.
Except as set forth on Schedule 3.10, which matters, in the aggregate,
are, to the knowledge of Borrower, not reasonably expected to have a Material
Adverse Effect:
(a) To the best knowledge of the Borrower, the facilities and
properties owned, leased or operated by the Borrower or any of its
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) To the best knowledge of the Borrower, the Properties and
all operations of the Borrower and/or its Subsidiaries at the Properties
are in compliance in all material respects, and have in the last five
years been in compliance in all material respects, with all applicable
Environmental Laws, and there is no violation of any Environmental Law
with respect to the Properties or the business operated by the Borrower
or any of its Subsidiaries (the "Business").
(c) Neither the Borrower nor any of its Subsidiaries 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 its
Subsidiaries have knowledge or reason to believe that any such notice
will be received or is being threatened.
(d) To the best knowledge of the Borrower, 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.
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(e) No judicial proceeding or governmental or administrative
action is pending or, to the knowledge of the Borrower, threatened, under
any Environmental Law to which the Borrower or any 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) To the best knowledge of the Borrower, 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 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 Loans hereunder shall be used solely by the Borrower
to (i) provide for working capital, capital expenditures and other general
corporate purposes and (ii) finance acquisitions as permitted by the terms
hereof. The Letters of Credit shall be used only for or in connection with
appeal bonds, reimbursement obligations arising in connection with surety and
reclamation bonds, reinsurance, domestic or international trade transactions and
obligations not otherwise aforementioned relating to transactions entered into
by the applicable account party in the ordinary course of business.
SECTION 3.12 SUBSIDIARIES.
Set forth on Schedule 3.12 is a complete and accurate list of all
Subsidiaries of the Borrower. Information on the attached Schedule includes
state of incorporation; 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 stock; and the number and effect, if exercised, of all
outstanding options, warrants, rights of conversion or purchase and similar
rights. The outstanding Capital Stock and other equity interests of all such
Subsidiaries are validly issued, fully paid and non-assessable and are owned,
free and clear of all Liens (other than Permitted Liens).
SECTION 3.13 OWNERSHIP.
Each of the Credit Parties 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 except for defects in title that do not interfere in any
material respect with the operation of the business of the Credit Parties and
could not, in the aggregate, reasonably be expected to have a Material Adverse
Effect, and none of such assets is subject to any Lien other than Permitted
Liens.
SECTION 3.14 INDEBTEDNESS.
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Except as otherwise permitted under Section 6.1, the Credit Parties have
no Indebtedness.
SECTION 3.15 TAXES.
Each of the Credit Parties has filed, or caused to be filed, all tax
returns (federal, state, local and foreign) required to be filed and paid (a)
all amounts of taxes shown thereon to be due (including interest and penalties)
and (b) all other taxes, fees, assessments and other governmental charges
(including mortgage recording taxes, documentary stamp taxes and intangibles
taxes) owing by it, except for such taxes (i) which are not yet delinquent or
(ii) that are being contested in good faith and by proper proceedings, and
against which adequate reserves are being maintained in accordance with GAAP.
Neither the Borrower nor any of its Subsidiaries is aware as of the Closing Date
of any proposed tax assessments against them or any of their Subsidiaries which
could reasonably be expected to have a Material Adverse Effect.
SECTION 3.16 INTELLECTUAL PROPERTY.
Each of the Credit Parties owns, or has the legal right to use, all
trademarks, tradenames, copyrights, technology, know-how and processes necessary
for each of them to conduct its business as currently conducted. No claim has
been asserted and is pending by any Person challenging or questioning the use of
any such Intellectual Property or the validity or effectiveness of any such
Intellectual Property, nor does the Borrower or any of its Subsidiaries know of
any such claim, and, to the knowledge of the Borrower or any of its
Subsidiaries, the use of such Intellectual Property by the Borrower or any of
its Subsidiaries does not infringe on the rights of any Person, except for such
claims and infringements that, in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
SECTION 3.17 SOLVENCY.
The fair saleable value of each Credit Party's assets, measured on a
going concern basis, exceeds all probable liabilities, including those to be
incurred pursuant to this 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 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 are Permitted Investments.
SECTION 3.19 NO BURDENSOME RESTRICTIONS.
None of the Borrower or any of its Subsidiaries is a party to any
agreement or instrument or subject to any other obligation or any charter or
corporate restriction or any provision of any applicable law, rule or regulation
which, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
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SECTION 3.20 BROKERS' FEES.
None of the Borrower or any of its Subsidiaries has any obligation to any
Person in respect of any finder's, broker's, investment banking or other similar
fee in connection with any of the transactions contemplated under the Credit
Documents other than the closing and other fees payable pursuant to this
Agreement.
SECTION 3.21 LABOR MATTERS.
There are no collective bargaining agreements or Multiemployer Plans
covering the employees of the Borrower or any of its Subsidiaries as of the
Closing Date, and none of the Borrower or any of its Subsidiaries (i) has
suffered any strikes, walkouts, work stoppages or other material labor
difficulty within the last five years or (ii) has knowledge of any potential or
pending strike, walkout or work stoppage which could reasonably be expected to
have a Material Adverse Effect.
SECTION 3.22 ACCURACY AND COMPLETENESS OF INFORMATION.
All factual information heretofore, contemporaneously or hereafter
furnished by or on behalf of the Borrower or any of its Subsidiaries to the
Administrative Agent or any Lender in writing for purposes of or in connection
with this Agreement or any other Credit Document, or any transaction
contemplated hereby or thereby, is or will be true and accurate in all material
respects and not incomplete by omitting to state any material fact necessary to
make such information not misleading, in each case as of the date stated or
certified; provided, however, that, with respect to pro forma and projected
financial information, the Credit Parties represent only that such information
was prepared in good faith based upon reasonable assumptions. There is no fact
now known to any Credit Party which has, or could reasonably be expected to
have, a Material Adverse Effect which fact has not been set forth herein, in the
financial statements of the Credit Parties furnished to the Administrative Agent
and/or the Lenders, or in any certificate, opinion or other written statement
made or furnished by the Borrower to the Administrative Agent and/or the
Lenders.
SECTION 3.23 YEAR 2000 ISSUE.
Any reprogramming and related testing required to permit the proper
functioning of the computer systems of the Borrower and its Subsidiaries in and
following the year 2000 will be completed in all material respects prior to
November 27, 1999 (that is, the Borrower and its Subsidiaries will be "Year 2000
Compliant"), and the cost to the Borrower and its Subsidiaries of such
reprogramming and testing will not result in a Default or Event of Default or a
Material Adverse Effect. Except for such reprogramming referred to in the
preceding sentence as may be necessary, the computer and management information
systems of the Borrower, and its Subsidiaries are and, with ordinary course
upgrading and maintenance, will continue for the term of this Agreement to be,
adequate for the conduct of its business.
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ARTICLE IV
CONDITIONS PRECEDENT
SECTION 4.1 CONDITIONS TO CLOSING DATE AND INITIAL LOANS.
This Agreement shall become effective upon, and the obligation of each
Lender to make the initial Loans on the Closing Date is subject to, the
satisfaction of the following conditions precedent:
(a) Execution of Agreement. The Administrative Agent shall have
received (i) counterparts of this Agreement, executed by a duly authorized
officer of each party hereto, (ii) Notes for the account of each Lender and
(iii) all other Credit Documents, each in form and substance reasonably
acceptable to the Administrative Agent in its sole discretion.
(b) Authority Documents. The Administrative Agent shall have
received the following:
(i) Organizational Documents. A copy of the articles of
organization, articles of incorporation or other organizational
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 organization.
(ii) Resolutions. A copy of the resolutions of the managing
member (or, if required, of all members) or board of directors of
each Credit Party approving and adopting the Credit Documents,
the transactions contemplated therein and authorizing execution
and delivery thereof, certified by an officer of such Credit
Party as of the Closing Date to be true and correct and in force
and effect as of such date.
(iii) Bylaws. A copy of the operating agreement or bylaws of
each Credit Party, if applicable, certified by an officer of such
Credit Party as of the Closing Date to be true and correct and in
force and effect as of such date.
(iv) Good Standing. Copies of certificates of good standing,
existence or its equivalent with respect to each Credit Party
certified as of a recent date by the appropriate governmental
authorities of the state of 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 in such state.
(v) Incumbency. An incumbency certificate of each Credit
Party certified by a secretary or assistant secretary to be true
and correct as of the Closing Date.
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(c) Legal Opinions of Counsel. The Administrative Agent shall
have received an opinion of McGuire, Woods, Battle & ▇▇▇▇▇▇ LLP, counsel
for the Credit Parties, dated the Closing Date and addressed to the
Administrative Agent and the Lenders, in form and substance acceptable to
the Administrative Agent (including, without limitation, a satisfactory
no-conflicts opinion).
(d) Fees. The Administrative Agent shall have received all fees,
if any, owing pursuant to the Commitment Letter and Section 2.3.
(e) Solvency Evidence. The Administrative Agent shall have
received an officer's certificate for each Credit Party prepared by the
principal financial officer of each such Credit Party as to the financial
condition, solvency and related matters of each such Credit Party, in each
case after giving effect to the initial borrowings under the Credit
Documents, in substantially the form of Schedule 4.1(e) hereto.
(f) Account Designation Letter. The Administrative Agent shall
have received the executed Account Designation Letter in the form of
Schedule 1.1(a) hereto.
(g) Ownership Structure. The capital and ownership structure of
the Subsidiaries of the Borrower and any Minority Interests (after giving
effect to the transactions contemplated hereby) shall be as described in
Schedule 3.12. The Administrative Agent shall be satisfied with management
structure, legal structure, voting control, liquidity, total leverage and
total capitalization of the Borrower as of the Closing Date.
(h) Consents. The Administrative Agent shall have received
evidence that all governmental, shareholder and material third party
consents and approvals necessary in connection with the financings and
other transactions contemplated hereby have been obtained and all
applicable waiting periods have expired without any action being taken by
any authority or third party that could restrain, prevent or impose any
material adverse conditions on such transactions or that could seek or
threaten any of the foregoing.
(i) 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).
(j) Bankruptcy. There shall be no bankruptcy or insolvency
proceedings with respect to the Borrower or any of its Subsidiaries.
(k) Material Adverse Effect. No material adverse change shall
have occurred since May 29, 1999 in the business, properties, operations or
conditions (financial or otherwise) of the Credit Parties taken as a whole.
(l) Financial Statements. The Administrative Agent shall have
received copies of all of the financial statements referred to in Section
3.1, each in form and substance reasonably satisfactory to it.
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(m) Year 2000 Plan. The Administrative Agent shall have received
the Borrower's plan for becoming Year 2000 Compliant, which plan shall be
in form and substance reasonably satisfactory to the Administrative Agent.
(n) Officer's Certificates. The Administrative Agent shall have
received a certificate or certificates 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 threatened in any court or before
any arbitrator or governmental instrumentality that purports to affect the
Borrower or any Subsidiary or any transaction contemplated by the Credit
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, the other Credit
Documents and all the transactions contemplated therein to occur on such
date, (A) each of the Credit Parties is Solvent, (B) no Default or Event of
Default exists, (C) all representations and warranties contained herein and
in the other Credit Documents are true and correct in all material
respects, and (D) the Credit Parties are in compliance with each of the
financial covenants set forth in Section 5.9.
(o) Additional Matters. All other documents and legal matters in
connection with the transactions contemplated by this Agreement shall be
reasonably satisfactory in form and substance to the Administrative Agent
and its counsel.
SECTION 4.2 CONDITIONS TO ALL EXTENSIONS OF CREDIT.
The obligation of each Lender to make any Extension of Credit hereunder is
subject to the satisfaction of the following conditions precedent on the date of
making such Extension of Credit:
(a) Representations and Warranties. The representations and
warranties made by the Credit Parties herein or which are contained in any
certificate furnished at any time under or in connection herewith, except
as such relate explicitly to an earlier date, shall be true and correct in
all material respects on and as of the date of such Extension of Credit as
if made on and as of such date.
(b) No Default or Event of Default. No Default or Event of
Default shall have occurred and be continuing on such date or after giving
effect to the Extension of Credit to be made on such date unless such
Default or Event of Default shall have been waived in accordance with this
Agreement.
(c) Compliance with Commitments. Immediately after giving effect
to the making of any such Extension of Credit (and the application of the
proceeds thereof), (i) the sum of the aggregate principal amount of
outstanding Loans plus outstanding LOC Obligations shall not exceed the
Revolving Committed Amount and (ii) the outstanding LOC Obligations shall
not exceed the LOC Committed Amount.
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(d) Additional Conditions to Loans. If such Loan is made pursuant
to Section 2.1, all conditions set forth in such Section shall have been
satisfied.
(e) Additional Conditions to Letters of Credit. If such Extension
of Credit is made pursuant to Section 2.2, all conditions set fort in such
Section shall have been satisfied.
Each request for an Extension of Credit and each acceptance by the Borrower
of any such Extension of Credit shall be deemed to constitute a representation
and warranty by the Borrower as of the date of such Extension of Credit that the
applicable conditions in paragraphs (a) through (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
Borrower shall, and shall cause each of its Subsidiaries (other than in the case
of Sections 5.1, 5.2 or 5.7 hereof), to:
SECTION 5.1 FINANCIAL STATEMENTS.
Furnish to the Administrative Agent and each of the Lenders:
(a) Annual Financial Statements. As soon as available, but in any
event within ninety (90) days after the end of each fiscal year of the
Borrower, (i) a copy of the consolidated balance sheet of the Borrower and
its consolidated Subsidiaries as at the end of such fiscal year and the
related consolidated statements of income and retained earnings and of cash
flows of the Borrower and its consolidated Subsidiaries for such year,
audited by a "Big Five" accounting firm, setting forth in each case in
comparative form the figures for the previous year, reported on without a
"going concern" or like qualification or exception, or qualification
indicating that the scope of the audit was inadequate to permit such
independent certified public accountants to certify such financial
statements without such qualification and (ii) a company-prepared
consolidating balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such fiscal year and the related
company-prepared consolidating statements of income and retained earnings
and of cash flows of the Borrower and its consolidated Subsidiaries for
such year, in each case setting forth in comparative form consolidating
figures for the corresponding period or periods of the preceding fiscal
year;
(b) Quarterly Financial Statements. As soon as available and in
any event within forty-five (45) days after the end of each of the first
three fiscal quarters of the
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Borrower, a company-prepared consolidated balance sheet of the Borrower and
its consolidated Subsidiaries as at the end of such period and related
company-prepared consolidated statements of income and retained earnings
and of cash flows for the Borrower and its consolidated Subsidiaries for
such quarterly period and for the portion of the fiscal year ending with
such period, in each case setting forth in comparative form consolidated
figures for the corresponding period or periods of the preceding fiscal
year (subject to normal recurring year-end audit adjustments); and
(c) Annual Budget Plan. As soon as available, but in any event
within forty-five (45) days after the end of each fiscal year, a copy of
the detailed annual operating budget or plan of the Borrower for the next
fiscal year on a month-by-month 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 be complete and correct in all material
respects (subject, in the case of interim statements, to normal recurring
year-end audit adjustments) and to be 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 and further accompanied by a
description of, and an estimation of the effect on the financial statements on
account of, a change, if any, in the application of accounting principles as
provided in Section 1.3.
SECTION 5.2 CERTIFICATES; OTHER INFORMATION.
Furnish to the Administrative Agent and each of the Lenders:
(a) concurrently with the delivery of the financial statements
referred to in Section 5.1(a) above, a certificate of the independent
certified public accountants reporting on such financial statements stating
that in making the examination necessary therefor no knowledge was obtained
of any Default or Event of Default, except as specified in such
certificate;
(b) concurrently with the delivery of the financial statements
referred to in Sections 5.1(a) and 5.1(b) above, a certificate of a
Responsible Officer stating that, to the best of such Responsible Officer's
knowledge, each of the Credit Parties during such period observed or
performed in all material respects all of its covenants and other
agreements, and satisfied in all material respects every condition,
contained in this Agreement to be observed, performed or satisfied by it,
and that such Responsible Officer has obtained no knowledge of any Default
or Event of Default except as specified in such certificate and such
certificate shall include the calculations in reasonable detail required to
indicate compliance with Section 5.9 as of the last day of such period;
(c) within thirty (30) days after the same are sent, copies of
all reports (other than those otherwise provided pursuant to Section 5.1
and those which are of a promotional nature) and other financial
information which the Borrower sends to its
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shareholders, and within thirty days after the same are filed, copies of
all financial statements and non-confidential reports which the Borrower
may make to, or file with the Securities and Exchange Commission or any
successor or analogous Governmental Authority;
(d) promptly upon receipt thereof, a copy of any other report or
"management letter" submitted by independent accountants to the Borrower or
any of its Subsidiaries in connection with any annual, interim or special
audit of the books of such Person; and
(e) promptly, such additional financial and other information as
the Administrative Agent, on behalf of any Lender, may from time to time
reasonably request.
SECTION 5.3 PAYMENT OF OBLIGATIONS.
Pay, discharge or otherwise satisfy at or before maturity or before they
become delinquent, as the case may be, in accordance with industry and
historical company practice (subject, where applicable, to specified grace
periods) all its material obligations (including, without limitation, all taxes)
of whatever nature and any additional costs that are imposed as a result of any
failure to so pay, discharge or otherwise satisfy such obligations, except when
the amount or validity of such obligations and costs is currently being
contested in good faith by appropriate proceedings and reserves, if applicable,
in conformity with GAAP with respect thereto have been provided on the books of
the Borrower or its Subsidiaries, as the case may be.
SECTION 5.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE.
Continue to engage in business of the same general type as now conducted by
it on the Closing Date and preserve, renew and keep in full force and effect its
existence as a corporation or limited liability company, as applicable, and take
all reasonable action to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business; comply with all
Contractual Obligations and Requirements of Law applicable to it except to the
extent that failure to comply therewith could not, in the aggregate, reasonably
be expected to have a Material Adverse Effect.
SECTION 5.5 MAINTENANCE OF PROPERTY; INSURANCE.
(a) Keep all material property useful and necessary in its
business in good working order and condition (ordinary wear and tear and
obsolescence excepted); and
(b) Maintain with financially sound and reputable insurance
companies (or through self-insurance in accordance with practices customary
for companies engaged in the same or a similar business) insurance on all
its material property in at least such amounts and against at least such
risks as are usually insured against in the same general area by companies
engaged in the same or a similar business; and furnish to the
Administrative Agent, upon written request, full information as to the
insurance carried;
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provided, however, that the Credit Parties may maintain self insurance
plans to the extent companies of similar size and in similar businesses do
so.
SECTION 5.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS.
Keep proper books of records and account in which full, true and correct
entries in conformity with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its businesses and activities; and
permit during regular business hours and upon reasonable notice by the
Administrative Agent or any Lender, the Administrative Agent or any Lender to
visit and inspect any of its properties and examine and make abstracts from any
of its books and records (other than materials protected by the attorney-client
privilege and materials which the Borrower may not disclose without violation of
a confidentiality obligation binding upon it) at any reasonable time and as
often as may reasonably be desired, and to discuss the business, operations,
properties and financial and other condition of the Credit Parties with officers
and employees of the Credit Parties and with its independent certified public
accountants. The Administrative Agent and the Lenders shall be solely
responsible for all costs and expenses incurred in connection with any such
visit, inspection or examination conducted or held other than during the
continuance of an Event of Default. The Borrower shall be solely responsible for
all costs and expenses incurred in connection with any such visit, inspection or
examination conducted or held during the continuance of an Event of Default.
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 the Borrower has knowledge thereof, the occurrence of any Default or
Event of Default;
(b) promptly, any default or event of default under any
Contractual Obligation of the Borrower or any of its Subsidiaries which
could reasonably be expected to have a Material Adverse Effect;
(c) promptly, any litigation, or any investigation or proceeding
(including, without limitation, any governmental or environmental
proceeding) known to the Borrower, affecting the Borrower or any of its
Subsidiaries which, if adversely determined, could reasonably be expected
to have a Material Adverse Effect;
(d) as soon as practicable and in any event within thirty (30)
days after the Borrower knows or has reason to know thereof: (i) the
occurrence or expected occurrence of any Reportable Event with respect to
any Plan, a failure to make any required contribution to a Plan, the
creation of any Lien in favor of the PBGC (other than a Permitted Lien) or
a Plan or any withdrawal from, or the termination, Reorganization or
Insolvency of, any Multiemployer Plan or (ii) the institution of
proceedings or the taking of any other action by the PBGC or the Borrower
or any Commonly Controlled Entity or
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any Multiemployer Plan with respect to the withdrawal from, or the
terminating, Reorganization or Insolvency of, any Plan; and
(e) promptly, any other development or event which could
reasonably be expected to have a Material Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Borrower proposes to take with respect thereto. In
the case of any notice of a Default or Event of Default, the Borrower shall
specify that such notice is a Default or Event of Default notice on the face
thereof.
SECTION 5.8 ENVIRONMENTAL LAWS.
(a) Comply in all material respects with, and use reasonably
efforts to 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 use reasonable
efforts to 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 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 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, from and against any and all claims, demands, penalties, fines,
liabilities, settlements, damages, costs and expenses of whatever kind or
nature 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 Borrower 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 acts or omissions 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 for a period of five (5) years.
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SECTION 5.9 FINANCIAL COVENANTS.
Commencing on the day immediately following the Closing Date, the Credit
Parties shall comply with the following financial covenants:
(a) Leverage Ratio. The Leverage Ratio, as of the last day of
each fiscal quarter of the Borrower, shall be less than or equal to 3.0 to
1.0.
(b) Interest and Leases Coverage Ratio. The Interest and Leases
Coverage Ratio, as of the last day of each fiscal quarter of the Borrower,
shall be greater than or equal to 2.50 to 1.0.
(c) Minimum Consolidated Working Capital. Consolidated Working
Capital, as of the last day of each fiscal quarter of the Borrower, shall
be greater than or equal $50,000,000.
SECTION 5.10 ADDITIONAL SUBSIDIARY GUARANTORS.
The Credit Parties will cause each of their wholly-owned Domestic
Subsidiaries which is an operating company, whether newly formed, after acquired
or otherwise existing, to promptly become a Guarantor hereunder by way of
execution of a Joinder Agreement.
SECTION 5.11 COMPLIANCE WITH LAW.
Each Credit Party will, and will cause each of its Subsidiaries to, comply
with all laws, rules, regulations and orders, and all applicable restrictions
imposed by all Governmental Authorities, applicable to it and its Property
(including, without limitation, all ERISA laws and regulations) if noncompliance
with any such law, rule, regulation, order or restriction could reasonably be
expected to have a Material Adverse Effect.
SECTION 5.12 YEAR 2000 COMPLIANCE.
Each Credit Party will promptly notify the Administrative Agent in the
event any Credit Party discovers or determines that any computer application
(including those of its suppliers, vendors and customers) that is material to
its or any of its Subsidiaries' business and operations will not be Year 2000
Compliant, except to the extent that such failure could not reasonably be
expected to have a Material Adverse Effect.
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,
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Commitment Fees and all other amounts owing to the Administrative Agent or any
Lender hereunder, are paid in full that:
SECTION 6.1 INDEBTEDNESS.
The Credit Parties will not contract, create, incur, assume or permit to
exist any Indebtedness, except:
(a) Indebtedness arising or existing under this Agreement and the
other Credit Documents;
(b) Indebtedness of the Credit Parties 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)) 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 Credit Parties 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 shall not exceed
$10,000,000 at any time outstanding;
(d) Unsecured intercompany Indebtedness among the Credit Parties,
provided that any such Indebtedness shall be fully subordinated to the
Credit Party Obligations hereunder on terms substantially similar to those
set forth in Schedule 6.1(d);
(e) Indebtedness and obligations owing under Hedging Agreements
relating to the Loans hereunder and other Hedging Agreements entered into
in order to manage existing or anticipated interest rate, equity value
exchange rate or commodity price risks and not for speculative purposes;
(f) Indebtedness and obligations of Credit Parties owing under
documentary letters of credit for the purchase of goods or other
merchandise generally (but not under standby, direct pay or other letters
of credit except for the Letters of Credit hereunder);
(g) Indebtedness of the Credit Parties in respect of Guaranty
Obligations incurred after the Closing Date guarantying loans having
maturities not exceeding one year of BFD Licensees incurred to finance the
acquisition of real property and/or construction of improvements on real
property to be used in the business of the BFD Licensees as such in an
aggregate amount not to exceed $10,000,000 at any time outstanding;
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(h) Indebtedness of the Credit Parties in respect of Guaranty
Obligations guarantying loans of BFD Licensees incurred to finance working
capital needs in an aggregate amount not to exceed $15,000,000 at any time
outstanding;
(i) Indebtedness incurred in connection with any securitization,
synthetic lease, tax retention operating lease, off-balance sheet loan or
other similar off-balance sheet financing product in an aggregate amount
not to exceed $30,000,000 at any time outstanding and containing terms and
conditions reasonably satisfactory to the Agent; and
(j) other unsecured Indebtedness of the Credit Parties which does
not exceed $10,000,000 in the aggregate at any time outstanding, provided
such Indebtedness contains covenants no more restrictive than those
contained in this Credit Agreement.
SECTION 6.2 LIENS.
The Borrower will not, 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.
The Borrower will not, nor will it permit any Subsidiary to, alter the
character of its business in any material respect from that conducted as of the
Closing Date.
SECTION 6.4 CONSOLIDATION, MERGER, SALE OR PURCHASE OF ASSETS, ETC.
The Borrower will not, nor will it permit any Subsidiary to,
(a) dissolve, liquidate or wind up its affairs, sell, transfer,
lease 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) Specified Sales; and
(ii) the sale, transfer, lease or other disposition of
property or assets (a) to an unrelated party not in the ordinary
course of business (other than Specified Sales), where and to the
extent that they are the result of a Recovery Event or (b) the
sale, lease, transfer or other disposition of property or assets
no longer used or useful in the conduct of the business of the
Borrower or any of its Subsidiaries, as appropriate in its
reasonable discretion, so long as the net cash proceeds from such
sale, lease, transfer or other disposition are used by the
Borrower or such Subsidiary to (A) acquire replacement property
or assets of a similar character within 90 days after receipt of
such net cash proceeds or (B) prepay the Loans
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hereunder, with a corresponding permanent reduction in the
Revolving Committed Amount in the amount of such prepayment;
(iii) (A) the sale, lease or transfer of property or assets
among the Credit Parties (at fair value) or from Subsidiaries
which are not Credit Parties to Credit Parties (at not more than
fair value), and (B) the sale, lease or transfer of real property
or non-operating assets (at fair value) among the Credit Parties
and their Subsidiaries which are not Credit Parties;
(iv) the sale or lease of real property and improvements
thereon to a BFD Licensee and the sale to any other Person of
real property, fixtures and improvements thereon leased or to be
leased by a BFD Licensee, provided that such sale or lease is at
fair market value and the property is or will be used in the
conduct of the BFD Licensee's business as such; and
(v) the sale, lease or transfer of property or assets not
to exceed $10,000,000 in the aggregate in any fiscal year;
provided, that with respect to subclauses (ii) and (iv) above, at least 75%
of the aggregate consideration received therefor by the Borrower or any
such Subsidiary is in the form of cash or Cash Equivalents; or
(b) (i) purchase, lease or otherwise acquire (in a single
transaction or a series of related transactions) the property or assets of
any Person (other than (A) purchases, leases or other acquisitions of
property or assets in the ordinary course of business, except as otherwise
limited or prohibited herein, (B) in connection with transactions permitted
by Section 6.4(a)(iii) and (C) transactions permitted by Section 6.5);
provided that so long as no Default or Event of Default shall have occurred
and be continuing or would result therefrom, the Borrower may acquire
Capital Stock or other ownership interest in any Person (in a similar or
complementary line of business) or any or all of the assets, property
and/or operations of a Person (in a similar or complementary line of
business) in an aggregate amount not to exceed $20,000,000 in any fiscal
year; provided, that (A) such acquisition is not hostile in nature and (B)
immediately before and after giving effect to any such acquisition, the
Borrower can demonstrate to the Administrative Agent pro forma compliance
with all provisions of this Agreement, 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
Subsidiary with and into a Credit Party, provided that such Credit Party
will be the surviving corporation and if the Borrower is a party thereto,
the Borrower will be the surviving corporation, (C) the merger of another
Person into a Credit Party in a transaction in which the Credit Party is
the surviving corporation in a transaction otherwise permitted by clause
(b)(i) above and (D) the merger or consolidation of a Subsidiary (other
than a Credit Party) into or with another Person in a transaction otherwise
permitted by clause (b)(i) above if the Borrower determines in good faith
that such merger or consolidation is in the best interests of the Borrower
and is not materially disadvantageous to the Lenders.
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SECTION 6.5 ADVANCES, INVESTMENTS AND LOANS.
The Borrower will not, nor will it permit any Subsidiary to, lend money or
extend credit or make advances to any Person, or purchase or acquire any stock,
obligations or securities of, or any other interest in, or make any capital
contribution to, any Person except for Permitted Investments.
SECTION 6.6 TRANSACTIONS WITH AFFILIATES.
Except as permitted in subsection (iv) of the definition of Permitted
Investments, The Borrower will not, 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, shareholder or Affiliate other
than on terms and conditions substantially as favorable as would be obtainable
in a comparable arm's-length transaction with a Person other than an officer,
director, shareholder or Affiliate.
SECTION 6.7 OWNERSHIP OF SUBSIDIARIES; RESTRICTIONS.
The Borrower will not sell, transfer, pledge or otherwise dispose of any
Capital Stock or other equity interests 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.
SECTION 6.8 FISCAL YEAR; ORGANIZATIONAL DOCUMENTS; MATERIAL CONTRACTS.
The Borrower will not, nor will it permit any of its Subsidiaries to,
change its fiscal year. The Borrower will not, nor will it permit any Subsidiary
to, amend, modify or change its limited liability company operating agreement or
articles of incorporation, as applicable (or corporate charter or other similar
organizational document) or bylaws (or other similar document) in a manner
materially adverse to the Lenders without the prior written consent of the
Required Lenders. The Borrower will not, nor will it permit any of its
Subsidiaries to, without the prior written consent of the Administrative Agent,
amend, modify, cancel or terminate any of the Material Contracts, except in the
event that such amendments, modifications, cancellations or terminations could
not reasonably be expected to have a Material Adverse Effect.
SECTION 6.9 LIMITATION ON RESTRICTED ACTIONS.
The Borrower will not, 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 the Borrower or any Subsidiary 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
the Borrower or any Subsidiary, (c) make loans or advances to the Borrower or
any Subsidiary, (d) sell, lease or transfer any of its properties or assets to
the Borrower or any Subsidiary, 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
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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(c), provided that any such restriction contained therein relates
only to the asset or assets constructed or acquired in connection therewith or
(iv) any Permitted Lien 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.
SECTION 6.10 RESTRICTED PAYMENTS.
The Borrower will not, 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 or (b) to make dividends or other distributions
payable in whole or in part to the Borrower or any Subsidiary (directly or
indirectly through Subsidiaries); provided, however, so long as no Default or
Event of Default would exist after giving pro forma effect to such transaction,
(i) during any fiscal year, the Borrower may make cash dividend payments to the
holders of shares of its outstanding Capital Stock not to exceed an aggregate
annual amount equal to 100% of Consolidated Net Income for such fiscal year and
(ii) the Borrower may repurchase outstanding shares of its Capital Stock for an
aggregate purchase price not to exceed $45,000,000 during the term of this
Agreement.
SECTION 6.11 PREPAYMENTS OF INDEBTEDNESS, ETC.
The Borrower will not, nor will it permit any Subsidiary to (a) after the
occurrence and during the continuance of an Event of Default, amend or modify
(or permit the amendment or modification of) any of the terms of any
Indebtedness if such amendment or modification would add or change any terms in
a manner adverse to the issuer of such Indebtedness, or shorten the final
maturity or average life to maturity or require any payment to be made sooner
than originally scheduled or increase the interest rate applicable thereto or
(b) change any subordination provision of any Indebtedness.
SECTION 6.12 SALE LEASEBACKS.
The Borrower will not, 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 requiring rental payments in excess of $5,000,000 in the aggregate on
an annual basis, (a) which the Borrower or any Subsidiary has sold or
transferred or is to sell or transfer to a Person which is not the Borrower or
any Subsidiary or (b) which the Borrower 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 the Borrower or any Subsidiary to another Person
which is not the Borrower or any Subsidiary in connection with such lease.
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SECTION 6.13 NO FURTHER NEGATIVE PLEDGES.
The Borrower will not, 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) pursuant to any document
or instrument governing Indebtedness incurred pursuant to Section 6.1(c) or any
similar type of Funded Debt incurred by a Subsidiary which is not a Guarantor,
provided that any such restriction contained therein relates only to the asset
or assets constructed or acquired in connection therewith and (c) in connection
with any Permitted Lien 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.
ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.1 EVENTS OF DEFAULT.
An Event of Default shall exist upon the occurrence of any of the following
specified events (each an "Event of Default"):
(a) The Borrower shall fail to pay any principal on any Note when
due in accordance with the terms thereof or hereof; or the Borrower shall
fail to reimburse the Issuing Lender for any LOC Obligations when due in
accordance with the terms hereof; or the Borrower shall fail to pay any
interest on any Note or any fee or other amount payable hereunder when due
in accordance with the terms thereof or hereof and such failure shall
continue unremedied for five (5) 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); or
(b) Any representation or warranty made or deemed made herein or
in any of the other Credit Documents or which is contained in any
certificate, document or financial or other statement furnished at any time
under or in connection with this Agreement shall prove to have been
incorrect, false or misleading in any material respect on or as of the date
made or deemed made; or
(c) (i) Any Credit Party shall fail to perform, comply with or
observe any term, covenant or agreement applicable to it contained in
Section 5.7(a), Section 5.9 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) or 7.1(c)(i) above),
and in the
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event such breach or failure to comply is capable of cure, is not cured
within thirty (30) days of any Credit Party becoming aware of its
occurrence; or
(d) The Borrower or any of its Subsidiaries shall (i) default in
any payment of principal of or interest on any Indebtedness (other than the
Notes) in a principal amount outstanding of at least $5,000,000 in the
aggregate for the Borrower and any of its Subsidiaries beyond the period of
grace (not to exceed 30 days), if any, provided in the instrument or
agreement under which such Indebtedness was created; or (ii) default in the
observance or performance of any other agreement or condition relating to
any Indebtedness in a principal amount outstanding of at least $5,000,000
in the aggregate for the Borrower or any of its Subsidiaries or contained
in any instrument or agreement evidencing, securing or relating thereto, or
any other event shall occur or condition exist, the effect of which default
or other event or condition is to cause, or to permit the holder or holders
of such Indebtedness or beneficiary or beneficiaries of such Indebtedness
(or a trustee or agent on behalf of such holder or holders or beneficiary
or beneficiaries) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity; or
(e) (i) The Borrower or any of its Subsidiaries shall commence
any case, proceeding or other action (A) under any existing or future law
of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order
for relief entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with
respect to it or its debts, or (B) seeking appointment of a receiver,
trustee, custodian, conservator or other similar official for it or for all
or any substantial part of its assets, or the Borrower or any Subsidiary
shall make a general assignment for the benefit of its creditors; or (ii)
there shall be commenced against the Borrower or any Subsidiary any case,
proceeding or other action of a nature referred to in clause (i) above
which (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or (iii) there shall be commenced against
the Borrower or any Subsidiary any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar
process against all or any substantial part of its assets which results in
the entry of an order for any such relief which shall not have been
vacated, discharged, or stayed or bonded pending appeal within 60 days from
the entry thereof; or (iv) the Borrower or any Subsidiary shall take any
action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or (iii)
above; or (v) the Borrower or any Subsidiary shall generally not, or shall
be unable to, or shall admit in writing its inability to, pay its debts as
they become due; or
(f) One or more judgments or decrees shall be entered against the
Borrower or any of its Subsidiaries involving in the aggregate a liability
(to the extent not paid when due or covered by insurance) of $5,000,000 or
more and all such judgments or decrees shall not have been paid and
satisfied, vacated, discharged, stayed or bonded pending appeal within 10
Business Days from the entry thereof; or
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(g) (i) Any Person shall engage in any "prohibited transaction"
(as defined in Section 406 of ERISA or Section 4975 of the Code) for which
no exemption exists under Section 408 of ERISA or Section 4975(c)(2) or (d)
if the Code involving any Plan, (ii) any "accumulated funding deficiency"
(as defined in Section 302 of ERISA), whether or not waived, shall exist
with respect to any Plan or any Lien in favor of the PBGC or a Plan (other
than a Permitted Lien) shall arise on the assets of the Borrower or any
Commonly Controlled Entity, (iii) a Reportable Event shall occur with
respect to, or proceedings shall commence to have a trustee appointed, or a
trustee shall be appointed, to administer or to terminate, any Single
Employer Plan, which Reportable Event or commencement of proceedings or
appointment of a Trustee is, in the reasonable opinion of the Required
Lenders, likely to result in the termination of such Plan for purposes of
Title IV of ERISA, (iv) any Single Employer Plan shall terminate for
purposes of Title IV of ERISA, (v) the Borrower, any of its Subsidiaries or
any Commonly Controlled Entity shall, or in the reasonable opinion of the
Required Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, any Multiemployer
Plan or (vi) any other similar event or condition shall occur or exist with
respect to a Plan; and in each case in clauses (i) through (vi) above, such
event or condition, together with all other such events or conditions, if
any, could have a Material Adverse Effect; or
(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).
SECTION 7.2 ACCELERATION; REMEDIES.
Upon the occurrence of an Event of Default, then, and in any such event,
(a) if such event is an Event of Default specified in Section 7.1(e) above,
automatically the Commitments shall immediately terminate and the Loans (with
accrued interest thereon), and all other amounts under the Credit Documents
(including without limitation the maximum amount of all contingent liabilities
under Letters of Credit) shall immediately become due and payable, and (b) if
such event is any other Event of Default, either or both of the following
actions may be taken: (i) the Administrative Agent may, or upon the written
request of the Required Lenders, the Administrative Agent shall, by notice to
the Borrower declare the Commitments to be terminated forthwith, whereupon the
Commitments shall immediately terminate; and (ii) 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
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other amounts owing under this Agreement and the Notes to be due and payable
forthwith, whereupon the same shall become immediately due and payable, and
direct the Borrower to pay to the Administrative Agent cash collateral as
security for the LOC Obligations for subsequent drawings under then outstanding
Letters of Credit in an amount equal to the maximum amount which may be drawn
under Letters of Credit then outstanding.
ARTICLE VIII
THE AGENT
SECTION 8.1 APPOINTMENT.
Each Lender hereby irrevocably designates and appoints First Union National
Bank as the Administrative Agent of such Lender under this Agreement, and each
such Lender irrevocably authorizes First Union National Bank, as the
Administrative Agent for such Lender, to take such action on its behalf under
the provisions of this Agreement and to exercise such powers and perform such
duties as are expressly delegated to the Administrative Agent by the terms of
this Agreement, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere in this
Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Administrative Agent.
SECTION 8.2 DELEGATION OF DUTIES.
The Administrative Agent may execute any of its duties under this Agreement
by or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care. Without limiting the
foregoing, the Administrative Agent may appoint one of its affiliates as its
agent to perform the functions of the Administrative Agent hereunder relating to
the advancing of funds to the Borrower and distribution of funds to the Lenders
and to perform such other related functions of the Administrative Agent
hereunder as are reasonably incidental to such functions.
SECTION 8.3 EXCULPATORY PROVISIONS.
Neither the Administrative Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates shall be (i) liable for any
action lawfully taken or omitted to be taken by it or such Person under or in
connection with this Agreement (except for its or such Person's own gross
negligence or willful misconduct) or (ii) responsible in any manner to any of
the Lenders for any recitals, statements, representations or warranties made by
the Borrower or any officer thereof contained in this Agreement or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Administrative Agent under or in
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connection with, this Agreement or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of any of the Credit Documents or for
any failure of the Borrower to perform its obligations hereunder or thereunder.
The Administrative Agent shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance by the Borrower of
any of the agreements contained in, or conditions of, this Agreement, or to
inspect the properties, books or records of the Borrower.
SECTION 8.4 RELIANCE BY ADMINISTRATIVE AGENT.
The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any Note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it in
good faith to be genuine and correct and to have been signed, sent or made by
the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Borrower), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless (a) a written notice of assignment, negotiation
or transfer thereof shall have been filed with the Administrative Agent and (b)
the Administrative Agent shall have received the written agreement of such
assignee to be bound hereby as fully and to the same extent as if such assignee
were an original Lender party hereto, in each case in form satisfactory to the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement unless it shall
first receive such advice or concurrence of the Required Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
any of the Credit Documents in accordance with a request of the Required Lenders
or all of the Lenders, as may be required under this Agreement, and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Lenders and all future holders of the Notes.
SECTION 8.5 NOTICE OF DEFAULT.
The Administrative Agent shall not be deemed to have knowledge or notice of
the occurrence of any Default or Event of Default hereunder unless the
Administrative Agent has received notice from a Lender or the Borrower referring
to this Agreement, describing such Default or Event of Default and stating on
the face thereof 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.
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SECTION 8.6 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS.
Each Lender expressly acknowledges that neither the Administrative Agent
nor any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates has made any representation or warranty to it and that no act by the
Administrative Agent hereinafter taken, including any review of the affairs of
the Borrower, shall be deemed to constitute any representation or warranty by
the Administrative Agent to any Lender. Each Lender represents to the
Administrative Agent that it has, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Borrower and made its own decision to make
its Loans hereunder and enter into this Agreement. Each Lender also represents
that it will, independently and without reliance upon the Administrative Agent
or any other Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement,
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Borrower which may come into
the possession of the Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates.
SECTION 8.7 INDEMNIFICATION.
The Lenders agree to indemnify the Administrative Agent in its capacity
hereunder (to the extent not reimbursed by the Borrower and without limiting the
obligation of the Borrower to do so), ratably according to their respective
Commitment Percentages in effect on the date on which indemnification is sought
under this Section, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever which may at any time (including, without
limitation, at any time following the payment of the Notes) be imposed on,
incurred by or asserted against the Administrative Agent in any way relating to
or arising out of any Credit Document or any documents contemplated by or
referred to herein or therein or the transactions contemplated hereby or thereby
or any action taken or omitted by the Administrative Agent under or in
connection with any of the foregoing; provided, however, that no Lender shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
to the extent resulting from the Administrative Agent's gross negligence or
willful misconduct, as determined by a court of competent jurisdiction. The
agreements in this Section 8.7 shall survive the termination of this Agreement
and payment of the Notes and all other amounts payable hereunder.
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SECTION 8.8 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY.
The Administrative Agent and its affiliates may make loans to, accept
deposits from and generally engage in any kind of business with the Borrower as
though the Administrative Agent were not the Administrative Agent hereunder.
With respect to its Loans made or renewed by it and any Note issued to it, the
Administrative Agent shall have the same rights and powers under this Agreement
as any Lender and may exercise the same as though it were not the Administrative
Agent, and the terms "Lender" and "Lenders" shall include the Administrative
Agent in its individual capacity.
SECTION 8.9 SUCCESSOR ADMINISTRATIVE AGENT.
The Administrative Agent may resign as Administrative Agent upon 30 days'
prior notice to the Borrower and the Lenders. If the Administrative Agent shall
resign as Administrative Agent under this Agreement and the Notes, then the
Required Lenders shall appoint from among the Lenders a successor agent for the
Lenders, which successor agent shall be approved by the Borrower, whereupon such
successor agent shall succeed to the rights, powers and duties of the
Administrative Agent, and the term "Administrative Agent" shall mean such
successor agent effective upon such appointment and approval, and the former
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 Agreement or any
holders of the Notes. After any retiring Administrative Agent's resignation as
Administrative Agent, the provisions of this Section 8.9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 AMENDMENTS AND WAIVERS.
Neither this Agreement, nor any of the Notes, nor any of the other Credit
Documents, nor any terms hereof or thereof may be amended, supplemented, waived
or modified except in accordance with the provisions of this Section nor may be
released except as specifically provided herein or in accordance with the
provisions of this Section 9.1. The Required Lenders may, or, with the written
consent of the Required Lenders, the Administrative Agent may, from time to
time, (a) enter into with the Borrower written amendments, supplements or
modifications hereto and to the other Credit Documents for the purpose of adding
any provisions to this Agreement or the other Credit Documents or changing in
any manner the rights of the Lenders or of the Borrower hereunder or thereunder
or (b) waive, on such terms and conditions as the Required Lenders may specify
in such instrument, any of the requirements of this Agreement or the other
Credit Documents or any Default or Event of Default and its consequences;
provided, however, that no such waiver and no such amendment, waiver,
supplement, modification or release shall:
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(i) reduce the amount or extend the scheduled date of
maturity of any Loan or Note or any installment thereon, or
reduce the stated rate of any interest or fee payable hereunder
(other than interest at the increased post-default rate) or
extend the scheduled date of any payment thereof or increase the
amount or extend the expiration date of any Lender's Commitment,
in each case without the written consent of each Lender directly
affected thereby, or
(ii) amend, modify or waive any provision of this Section
9.1 or reduce the percentage specified in the definition of
Required Lenders, 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 any of the Guarantors from their obligations
under the Guaranty, without the written consent of all of the
Lenders, or
(v) amend, modify or waive any provision of the Credit
Documents requiring consent, approval or request of the Required
Lenders or all Lenders, without the written consent of all of the
Required Lenders or Lenders as appropriate and, provided,
further, that no amendment, waiver or consent affecting the
rights or duties of the Administrative Agent or the Issuing
Lender under any Credit Document shall in any event be effective,
unless in writing and signed by the Administrative Agent and/or
the Issuing Lender, as applicable, in addition to the Lenders
required hereinabove to take such action.
Any such waiver, any such amendment, supplement or modification and any
such release shall apply equally to each of the Lenders and shall be binding
upon the Borrower, the 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 waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon.
Notwithstanding any of the foregoing to the contrary, the consent of the
Borrower shall not be required for any amendment, modification or waiver of the
provisions of Article VIII (other than the provisions of Section 8.9); provided,
however, that the Administrative Agent will provide written notice to the
Borrower of any such amendment, modification or waiver. In addition, the
Borrower and the Lenders hereby authorize the Administrative Agent to modify
this Credit Agreement by unilaterally amending or supplementing Schedule 2.1(a)
from time to time in the manner requested by the Borrower, the Administrative
Agent or any Lender in order to reflect any assignments or transfers of the
Loans as provided for hereunder; provided, however, that the Administrative
Agent shall promptly deliver a copy of any such modification to the Borrower and
each Lender.
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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 supersede the unanimous consent provisions set forth herein
and (y) the Required Lenders may consent to allow a Credit Party to use cash
collateral in the context of a bankruptcy or insolvency proceeding.
SECTION 9.2 NOTICES.
Except as otherwise provided in Article II, all notices, requests and
demands to or upon the respective parties hereto to be effective shall be in
writing (including by telecopy), and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made (a) when delivered by
hand, (b) when transmitted via telecopy (or other facsimile device) to the
number set out herein, (c) the day following the day on which the same has been
delivered prepaid to a reputable national overnight air courier service, or (d)
the third Business Day following the day on which the same is sent by certified
or registered mail, postage prepaid, in each case, addressed to each such party
at the address set forth on Schedule 9.2, or to such other address as may be
hereafter notified by the respective parties hereto and any future holders of
the Notes.
SECTION 9.3 NO WAIVER; CUMULATIVE REMEDIES.
No failure to exercise and no delay in exercising, on the part of the
Administrative Agent or any Lender, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
SECTION 9.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All representations and warranties made hereunder and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the Notes and the
making of the Loans, provided that all such representations and warranties shall
terminate on the date upon which the Commitments have been terminated and all
amounts owing hereunder and under any Notes have been paid in full.
SECTION 9.5 PAYMENT OF EXPENSES AND TAXES.
The Borrower agrees (a) to pay or reimburse the Administrative Agent for
all its reasonable out-of-pocket costs and expenses incurred in connection with
the development, preparation, negotiation, printing and execution of, and any
amendment, supplement or modification to, this Agreement and the other Credit
Documents and any other documents prepared in connection herewith or therewith,
and the consummation and administration of the transactions contemplated hereby
and thereby, together with the reasonable fees and disbursements of counsel to
the Administrative Agent, (b) to pay or reimburse each Lender and
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the Administrative Agent for all its costs and expenses incurred in connection
with the enforcement or preservation of any rights under, or defense against any
actions arising out of, this Agreement, the Notes and any such other documents,
including, without limitation, the reasonable fees and disbursements of counsel
to the Administrative Agent and to the Lenders (including reasonable allocated
costs of in-house legal counsel), and (c) on demand, to pay, indemnify, and hold
each Lender and the Administrative Agent harmless from, any and all recording
and filing fees and any and all liabilities with respect to, or resulting from
any delay in paying, stamp, excise and other similar taxes, if any, which may be
payable or determined to be payable in connection with the execution and
delivery of, or consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, the Credit Documents and any such other
documents, and (d) to pay, indemnify, and hold each Lender and the
Administrative Agent and their Affiliates harmless from and against, any and all
other liabilities, obligations, losses, damages, penalties, claims, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, enforcement, performance and
administration of the Credit Documents and any such other documents and the use,
or proposed use, of proceeds of the Loans (all of the foregoing, collectively,
the "indemnified liabilities"); provided, however, that the Borrower shall not
have any obligation hereunder to the Administrative Agent or any Lender with
respect to indemnified liabilities arising from the gross negligence or willful
misconduct of the Administrative Agent or any such Lender. The agreements in
this Section 9.5 shall survive repayment of the Loans, Notes and all other
amounts payable hereunder.
SECTION 9.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS; PURCHASING LENDERS.
(a) This Agreement shall be binding upon and inure to the benefit
of the Borrower, the Lenders, the Administrative Agent, all future holders
of the Notes and their respective successors and assigns, except that the
Borrower may not assign or transfer any of its rights or obligations under
this Agreement or the other Credit Documents without the prior written
consent of each Lender.
(b) Any Lender may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time sell to
one or more banks or other entities ("Participants") participating
interests in any Loan owing to such Lender, any Note held by such Lender,
any Commitment of such Lender, or any other interest of such Lender
hereunder. In the event of any such sale by a Lender of participating
interests to a Participant, such Lender's obligations under this Agreement
to the other parties to this Agreement shall remain unchanged, such Lender
shall remain solely responsible for the performance thereof, such Lender
shall remain the holder of any such Note for all purposes under this
Agreement, and the Borrower and the Administrative Agent shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement. No Lender shall transfer or
grant any participation under which the Participant shall have rights to
approve any amendment to or waiver of this Agreement or any other Credit
Document except to the extent such amendment or waiver would (i) extend the
scheduled maturity of any Loan or Note or any installment thereon in which
such Participant is participating, or reduce the stated
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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 any of the Guarantors from their obligations
under the Guaranty or (iii) consent to the assignment or transfer by the
Borrower of any of its rights and obligations under this Agreement. In the
case of any such participation, the Participant shall not have any rights
under this Agreement or any of the other Credit Documents (the
Participant's rights against such Lender in respect of such participation
to be those set forth in the agreement executed by such Lender in favor of
the Participant relating thereto) and all amounts payable by the Borrower
hereunder shall be determined as if such Lender had not sold such
participation, provided that each Participant shall be entitled to the
benefits of Sections 2.14, 2.15, 2.16 and 9.5 with respect to its
participation in the Commitments and the Loans outstanding from time to
time; provided, that no Participant shall be entitled to receive any
greater amount pursuant to such Sections than the transferor Lender would
have been entitled to receive in respect of the amount of the participation
transferred by such transferor Lender to such Participant had no such
transfer occurred.
(c) Any Lender may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time, sell
or assign to any Lender or any affiliate thereof and with the consent of
the Administrative Agent and, so long as no Default or Event of Default has
occurred and is continuing, the Borrower (in each case, which consent shall
not be unreasonably withheld), to one or more additional banks or financial
institutions ("Purchasing Lenders"), all or any part of its rights and
obligations under this Agreement and the Notes in minimum amounts of
$5,000,000 with respect to its Revolving Commitment and its Loans (or, if
less, the entire amount of such Lender's obligations), pursuant to a
Commitment Transfer Supplement, executed by such Purchasing Lender and such
transferor Lender (and, in the case of a Purchasing Lender that is not then
a Lender or an affiliate thereof, the Administrative Agent and, so long as
no Default or Event of Default has occurred and is continuing, the
Borrower), and delivered to the Administrative Agent for its acceptance and
recording in the Register; provided, however, that any sale or assignment
to an existing Lender 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
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hereto). Such Commitment Transfer Supplement shall be deemed to amend this
Agreement to the extent, and only to the extent, necessary to reflect the
addition of such Purchasing Lender and the resulting adjustment of
Commitment Percentages arising from the purchase by such Purchasing Lender
of all or a portion of the rights and obligations of such transferor Lender
under this Agreement and the Notes. On or prior to the Transfer Effective
Date specified in such Commitment Transfer Supplement, the Borrower, at its
own expense, shall execute and deliver to the Administrative Agent in
exchange for the Notes delivered to the Administrative Agent pursuant to
such Commitment Transfer Supplement new Notes to the order of such
Purchasing Lender in an amount equal to the Commitment assumed by it
pursuant to such Commitment Transfer Supplement and, unless the transferor
Lender has not retained a Commitment hereunder, new Notes to the order of
the transferor Lender in an amount equal to the Commitment retained by it
hereunder. Such new Notes shall be dated the Closing Date and shall
otherwise be in the form of the Notes replaced thereby. The Notes
surrendered by the transferor Lender shall be returned by the
Administrative Agent to the Borrower marked "canceled".
(d) The Administrative Agent shall maintain at its address
referred to in Section 9.2 a copy of each Commitment Transfer Supplement
delivered to it and a register (the "Register") for the recordation of the
names and addresses of the Lenders and the Commitment of, and principal
amount of the Loans owing to, each Lender from time to time. The entries in
the Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Administrative Agent and the Lenders may treat each Person
whose name is recorded in the Register as the owner of the Loan recorded
therein for all purposes of this Agreement. The Register shall be available
for inspection by the Borrower or any Lender at any reasonable time and
from time to time upon reasonable prior notice.
(e) Upon its receipt of a duly executed Commitment Transfer
Supplement, together with payment to the Administrative Agent by the
transferor Lender or the Purchasing Lender, as agreed between them, of a
registration and processing fee of $3,000 for each Purchasing Lender listed
in such Commitment Transfer Supplement and the Notes subject to such
Commitment Transfer Supplement, the Administrative Agent shall (i) accept
such Commitment Transfer Supplement, (ii) record the information contained
therein in the Register and (iii) give prompt notice of such acceptance and
recordation to the Lenders and the Borrower.
(f) The Borrower authorizes each Lender to disclose to any
Participant or Purchasing Lender (each, a "Transferee") and any prospective
Transferee any and all 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
Affiliates prior to becoming a party to this Agreement, in each case
subject to Section 9.16.
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(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 2.16 Certificate)
described in Section 2.16.
(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 Borrower agrees that each Lender so purchasing a
portion of another Lender's Loans may exercise all rights of payment
(including, without limitation, rights of set-off) with respect to such
portion as fully as if such Lender were the direct holder of such portion.
(b) In addition to any rights and remedies of the Lenders
provided by law (including, without limitation, other rights of set-off),
each Lender shall have the right, without prior notice to the Borrower, any
such notice being expressly waived by the Borrower to the extent permitted
by applicable law, upon the occurrence of any Event of Default, to setoff
and appropriate and apply any and all deposits (general or special, time or
demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Lender or any branch or agency thereof to or for the credit
or the account of the Borrower, or any part thereof in such amounts as such
Lender may elect, against and on account of the obligations and liabilities
of the Borrower to such Lender hereunder and claims of every nature and
description of such Lender against the Borrower, in any currency, whether
arising hereunder, under the Notes or under any documents contemplated by
or referred to herein or therein, as such Lender may elect, whether or not
such Lender has made any demand
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for payment and although such obligations, liabilities and claims may be
contingent or unmatured. The aforesaid right of set-off may be exercised by
such Lender against the Borrower or against any trustee in bankruptcy,
debtor in possession, assignee for the benefit of creditors, receiver or
execution, judgment or attachment creditor of the Borrower, or against
anyone else claiming through or against the Borrower or any such trustee in
bankruptcy, debtor in possession, assignee for the benefit of creditors,
receiver, or execution, judgment or attachment creditor, notwithstanding
the fact that such right of set-off shall not have been exercised by such
Lender prior to the occurrence of any Event of Default. Each Lender agrees
promptly to notify the Borrower and the Administrative Agent after any such
set-off and application made by such Lender; provided, however, that the
failure to give such notice shall not affect the validity of such set-off
and application.
SECTION 9.8 TABLE OF CONTENTS AND SECTION HEADINGS.
The table of contents and the Section and subsection headings herein are
intended for convenience only and shall be ignored in construing this Agreement.
SECTION 9.9 COUNTERPARTS.
This Agreement may be executed by one or more of the parties to this
Agreement on any number of separate counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same instrument. A set
of the copies of this Agreement signed by all the parties shall be lodged with
the Borrower and the Administrative Agent.
SECTION 9.10 EFFECTIVENESS.
This Credit Agreement shall become effective on the date on which all of
the parties have signed a copy hereof (whether the same or different copies) and
shall have delivered the same to the Administrative Agent pursuant to Section
9.2 or, in the case of the Lenders, shall have given to the Administrative Agent
written, telecopied or telex notice (actually received) at such office that the
same has been signed and mailed to it.
SECTION 9.11 SEVERABILITY.
Any provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
SECTION 9.12 INTEGRATION.
This Agreement and the Notes represent the agreement of the Borrower, the
Administrative Agent and the Lenders with respect to the subject matter hereof,
and there are no promises, undertakings, representations or warranties by the
Administrative Agent, the Borrower
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or any Lender relative to the subject matter hereof not expressly set forth or
referred to herein or in the Notes.
SECTION 9.13 GOVERNING LAW.
This Agreement and the Notes and the rights and obligations of the parties
under this Agreement and the Notes shall be governed by, and construed and
interpreted in accordance with, the law of the State of 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
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 or based on the grounds of forum non conveniens
which it may now or hereafter have to the bringing of any such action or
proceeding in any such jurisdiction. Nothing herein shall affect the right to
serve process in any other manner permitted by law or shall limit the right of
any Lender to bring proceedings against the Borrower or the other Credit Parties
in the court of any other jurisdiction.
SECTION 9.15 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
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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.
(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.
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SECTION 9.16 CONFIDENTIALITY.
The Administrative Agent and each of the Lenders agrees 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 which is furnished pursuant to this Agreement, any
other Credit Document or any documents contemplated by or referred to herein or
therein and which is designated by the Borrower to the Lenders in writing as
confidential or as to which it is otherwise reasonably clear such information is
not public, except that any Lender may disclose any such information (a) as has
become generally available to the public other than by a breach of this Section
9.16, (b) as may be required or appropriate in any report, statement or
testimony submitted to any municipal, state or federal regulatory body having or
claiming to have jurisdiction over such Lender or to the Federal Reserve Board
or the Federal Deposit Insurance Corporation or the OCC or the NAIC or similar
organizations (whether in the United States or elsewhere) or their successors,
(c) as may be required or appropriate in response to any summons or subpoena or
any law, order, regulation or ruling applicable to such Lender, (d) to any
prospective Participant or assignee in connection with any contemplated transfer
pursuant to Section 9.6, provided that such prospective transferee shall have
been made aware of this Section 9.16 and shall have agreed to be bound by its
provisions as if it were a party to this Agreement or (e) to Gold Sheets and
other similar bank trade publications, such information to consist of deal terms
and other information regarding the credit facilities evidenced by this Credit
Agreement customarily found in such publications.
SECTION 9.17 ACKNOWLEDGMENTS.
The Borrower and the other Credit Parties each hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution
and delivery of each Credit Document;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to the Borrower or any other Credit
Party arising out of or in connection with this Agreement and the
relationship between Administrative Agent and Lenders, on one hand, and the
Borrower and the other Credit Parties, on the other hand, in connection
herewith is solely that of debtor and creditor; and
(c) no joint venture exists among the Lenders or among the
Borrower or the other Credit Parties and the Lenders.
SECTION 9.18 WAIVERS OF JURY TRIAL.
THE BORROWER, THE OTHER CREDIT PARTIES, THE ADMINISTRATIVE AGENT AND THE
LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
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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 indebtedness of the Borrower to the Administrative Agent and the
Lenders. If any or all of the indebtedness of the Borrower to the Administrative
Agent and the Lenders becomes due and payable hereunder, each Guarantor
unconditionally promises to pay such indebtedness to the Administrative Agent
and the Lenders, or order, on demand, together with any and all reasonable
expenses which may be incurred by the Administrative Agent or the Lenders in
collecting any of the indebtedness. The word "indebtedness" is used in this
Article X in its most comprehensive sense and includes any and all advances,
debts, obligations and liabilities of the Borrower arising in connection with
this Agreement, in each case, heretofore, now, or hereafter made, incurred or
created, whether voluntarily or involuntarily, absolute or contingent,
liquidated or unliquidated, determined or undetermined, whether or not such
indebtedness is from time to time reduced, or extinguished and thereafter
increased or incurred, whether the Borrower may be liable individually or
jointly with others, whether or not recovery upon such indebtedness may be or
hereafter become barred by any statute of limitations, and whether or not such
indebtedness may be or hereafter become otherwise unenforceable.
Notwithstanding any provision to the contrary contained herein or in any
other of the Credit Documents, to the extent the obligations of a Guarantor
shall be adjudicated to be invalid or unenforceable for any reason (including,
without limitation, because of any applicable state or federal law relating to
fraudulent conveyances or transfers) then the obligations of each such Guarantor
hereunder shall be limited to the maximum amount that is permissible under
applicable law (whether federal or state and including, without limitation, the
Bankruptcy Code).
SECTION 10.2 BANKRUPTCY.
Additionally, each of the Guarantors unconditionally and irrevocably
guarantees jointly and severally the payment of any and all indebtedness of the
Borrower to the Lenders whether or not due or payable by the Borrower upon the
occurrence of any of the events specified in Section 7.1(e), and unconditionally
promises to pay such indebtedness to the Administrative Agent for the account of
the Lenders, or order, on demand, in lawful money of the United States. Each of
the Guarantors further agrees that to the extent that the Borrower or a
Guarantor shall make a payment or a transfer of an interest in any property to
the Administrative Agent or any Lender, which payment or transfer or any part
thereof is subsequently invalidated, declared to be fraudulent or preferential,
or otherwise is avoided, and/or required to be repaid to the Borrower or a
Guarantor, the estate of the Borrower or a Guarantor, a trustee, receiver or any
other party
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under any bankruptcy law, state or federal law, common law or equitable cause,
then to the extent of such avoidance or repayment, the obligation or part
thereof intended to be satisfied shall be revived and continued in full force
and effect as if said payment had not been made.
SECTION 10.3 NATURE OF LIABILITY.
The liability of each Guarantor hereunder is exclusive and independent of
any security for or other guaranty of the indebtedness of the Borrower whether
executed by any such Guarantor, any other guarantor or by any other party, and
no Guarantor's liability hereunder shall be affected or impaired by (a) any
direction as to application of payment by the Borrower or by any other party, or
(b) any other continuing or other guaranty, undertaking or maximum liability of
a guarantor or of any other party as to the indebtedness of the Borrower, or (c)
any payment on or in reduction of any such other guaranty or undertaking, or (d)
any dissolution, termination or increase, decrease or change in personnel by the
Borrower, or (e) any payment made to the Administrative Agent or the Lenders on
the indebtedness which the Administrative Agent or such Lenders repay the
Borrower pursuant to court order in any bankruptcy, reorganization, arrangement,
moratorium or other debtor relief proceeding, and each of the Guarantors waives
any right to the deferral or modification of its obligations hereunder by reason
of any such proceeding.
SECTION 10.4 INDEPENDENT OBLIGATION.
The obligations of each Guarantor hereunder are independent of the
obligations of any other guarantor or the Borrower, and a separate action or
actions may be brought and prosecuted against each Guarantor whether or not
action is brought against any other guarantor or the Borrower and whether or not
any other Guarantor or the Borrower is joined in any such action or actions.
SECTION 10.5 AUTHORIZATION.
Each of the Guarantors authorizes the Administrative Agent and each Lender
without notice or demand (except as shall be required by applicable statute and
cannot be waived), and without affecting or impairing its liability hereunder,
from time to time to (a) renew, compromise, extend, increase, accelerate or
otherwise change the time for payment of, or otherwise change the terms of the
indebtedness or any part thereof in accordance with this Agreement, including
any increase or decrease of the rate of interest thereon, (b) take and hold
security from any guarantor or any other party for the payment of this Guaranty
or the indebtedness and exchange, enforce waive and release any such security,
(c) apply such security and direct the order or manner of sale thereof as the
Administrative Agent and the Lenders in their discretion may determine and (d)
release or substitute any one or more endorsers, guarantors, the Borrower or
other obligors.
SECTION 10.6 RELIANCE.
It is not necessary for the Administrative Agent or the Lenders to inquire
into the capacity or powers of the Borrower or the officers, directors, members,
partners or agents acting
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or purporting to act on its behalf, and any indebtedness made or created in
reliance upon the professed exercise of such powers shall be guaranteed
hereunder.
SECTION 10.7 WAIVER.
(a) Each of the Guarantors waives any right (except as shall be
required by applicable statute and cannot be waived) to require the
Administrative Agent or any Lender to (i) proceed against the Borrower, any
other guarantor or any other party, (ii) proceed against or exhaust any
security held from the Borrower, any other guarantor or any other party, or
(iii) pursue any other remedy in the Administrative Agent's or any Lender's
power whatsoever. Each of the Guarantors waives any defense based on or
arising out of any defense of the Borrower, any other guarantor or any
other party other than payment in full of the indebtedness, including
without limitation any defense based on or arising out of the disability of
the Borrower, any other guarantor or any other party, or the
unenforceability of the indebtedness or any part thereof from any cause, or
the cessation from any cause of the liability of the Borrower other than
payment in full of the indebtedness. Without limiting the generality of the
provisions of this Article X, each of the Guarantors hereby specifically
waives the benefits of N.C. Gen. Stat. Section 26-7 through 26-9,
inclusive. The Administrative Agent or any of the Lenders may, at their
election, foreclose on any security held by the Administrative Agent or a
Lender by one or more judicial or nonjudicial sales, whether or not every
aspect of any such sale is commercially reasonable (to the extent such sale
is permitted by applicable law), or exercise any other right or remedy the
Administrative Agent and any Lender may have against the Borrower or any
other party, or any security, without affecting or impairing in any way the
liability of any Guarantor hereunder except to the extent the indebtedness
has been paid. Each of the Guarantors waives any defense arising out of any
such election by the Administrative Agent and each of the Lenders, even
though such election operates to impair or extinguish any right of
reimbursement or subrogation or other right or remedy of the Guarantors
against the Borrower or any other party or any security.
(b) Each of the Guarantors waives all presentments, demands for
performance, protests and notices, including without limitation notices of
nonperformance, notice of protest, notices of dishonor, notices of
acceptance of this Guaranty, and notices of the existence, creation or
incurring of new or additional indebtedness. Each Guarantor assumes all
responsibility for being and keeping itself informed of the Borrower's
financial condition and assets, and of all other circumstances bearing upon
the risk of nonpayment of the indebtedness and the nature, scope and extent
of the risks which such Guarantor assumes and incurs hereunder, and agrees
that neither the Administrative Agent nor any Lender shall have any duty to
advise such Guarantor of information known to it regarding such
circumstances or risks.
(c) Each of the Guarantors hereby agrees it will not exercise any
rights of subrogation which it may at any time otherwise have as a result
of this Guaranty (whether contractual, under Section 509 of the U.S.
Bankruptcy Code, or otherwise) to the claims of the Lenders against the
Borrower or any other guarantor of the indebtedness of the Borrower owing
to the Lenders (collectively, the "Other Parties") and all contractual,
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statutory or common law rights of reimbursement, contribution or indemnity
from any Other Party which it may at any time otherwise have as a result of
this Guaranty until such time as the Loans hereunder shall have been paid
and the Commitments have been terminated. Each of the Guarantors hereby
further agrees not to exercise any right to enforce any other remedy which
the Administrative Agent and the Lenders now have or may hereafter have
against any Other Party, any endorser or any other guarantor of all or any
part of the indebtedness of the Borrower and any benefit of, and any right
to participate in, any security or collateral given to or for the benefit
of the Lenders to secure payment of the indebtedness of the Borrower until
such time as the Loans hereunder shall have been paid and the Commitments
have been terminated.
SECTION 10.8 LIMITATION ON ENFORCEMENT.
The Lenders agree that this Guaranty may be enforced only by the action of
the Administrative Agent acting upon the instructions of the Required Lenders
and that no Lender shall have any right individually to seek to enforce or to
enforce this Guaranty, it being understood and agreed that such rights and
remedies may be exercised by the Administrative Agent for the benefit of the
Lenders under the terms of this Agreement. The Lenders further agree that this
Guaranty may not be enforced against any director, officer, employee or
stockholder of the Guarantors.
SECTION 10.9 CONFIRMATION OF PAYMENT.
The Administrative Agent and the Lenders will, upon request after payment
of the indebtedness and obligations which are the subject of this Guaranty and
termination of the Commitments relating thereto, confirm to the Borrower, the
Guarantors or any other Person that the such indebtedness and obligations have
been paid and the Commitments relating thereto terminated, subject to the
provisions of Section 10.2.
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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: ▇▇▇▇▇▇▇ FURNITURE INDUSTRIES,
INCORPORATED
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
GUARANTORS: ▇▇▇▇▇▇▇ FURNITURE INDUSTRIES
OF NORTH CAROLINA, INC.
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
▇.▇. ▇▇▇▇▇▇ CORPORATION, INC.
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
BASSETT DIRECT STORES, INC.
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
BASSETT DIRECT SC, LLC
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
BASSETT DIRECT NC, LLC
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
86
Schedule 2.1(e)
[FORM OF NOTE]
NOTE
$_____________________ October 19, 1999
FOR VALUE RECEIVED, the undersigned, ▇▇▇▇▇▇▇ FURNITURE INDUSTRIES,
INCORPORATED, a Virginia corporation, hereby unconditionally promises to pay, on
the Maturity Date (as defined in the Credit Agreement referred to below), to the
order of ___________ (the "Lender") at the office of First Union National Bank
located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, in lawful
money of the United States of America and in immediately available funds, the
principal amount of (a) ________________ DOLLARS ($____________), or, if less,
(b) the aggregate unpaid principal amount of all Loans made by the Lender to the
undersigned pursuant to Section 2.1 of the Credit Agreement referred to below.
The undersigned further agrees to pay interest in like money at such office on
the unpaid principal amount hereof and, to the extent permitted by law, accrued
interest in respect hereof from time to time from the date hereof until payment
in full of the principal amount hereof and accrued interest hereon, at the rates
and on the dates set forth in the Credit Agreement.
The holder of this Note is authorized to endorse the date and amount of
each Loan pursuant to Section 2.1 of the Credit Agreement and each payment of
principal and interest with respect thereto and its character as a LIBOR Rate
Loan or an Alternate Base Rate Loan on Schedule I annexed hereto and made a part
hereof, or on a continuation thereof which shall be attached hereto and made a
part hereof, which endorsement shall constitute prima facie evidence of the
accuracy of the information endorsed; provided, however, that the failure to
make any such endorsement shall not affect the obligations of the undersigned
under this Note.
This Note is one of the Notes referred to in the Credit Agreement dated as
of the date hereof among ▇▇▇▇▇▇▇ Furniture Industries, Incorporated, a Virginia
corporation, the other Credit Parties identified therein, the Lender, the other
banks and financial institutions from time to time parties thereto and First
Union National Bank, as Administrative Agent (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"), and is entitled
to the benefits thereof. Terms used but not otherwise defined herein shall have
the meanings provided in the Credit Agreement.
Upon the occurrence of any one or more of the Events of Default specified
in the Credit Agreement, all amounts then remaining unpaid on this Note shall
become, or may be declared to be, immediately due and payable, all as provided
therein. In the event this Note is not paid when due at any stated or
accelerated maturity, the Borrower agrees to pay, in addition to principal and
interest, all costs of collection, including reasonable attorneys' fees.
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, endorser or otherwise, hereby waive presentment,
demand, protest and all other notices of any kind.
Terms defined in the Credit Agreement are used herein with their defined
meanings unless otherwise defined herein. This Note shall be governed by, and
construed and interpreted in accordance with, the law of the State of North
Carolina.
▇▇▇▇▇▇▇ FURNITURE INDUSTRIES, INCORPORATED
By:
------------------------------
Title:
---------------------------
87
SCHEDULE 1
to
Note
LOANS AND PAYMENTS OF PRINCIPAL
Principal
Amount Type Paid
of of Interest Interest Maturity or Principal Notation
Date Loan Loan(1) Rate Period Date Converted Balance Made By
---- ---- ---- ---- ------ ----- --------- ------- -------
------ ------- ------ ---------- --------- -------- --------- --------- --------
------ ------- ------ ---------- --------- -------- --------- --------- --------
------ ------- ------ ---------- --------- -------- --------- --------- --------
------ ------- ------ ---------- --------- -------- --------- --------- --------
------ ------- ------ ---------- --------- -------- --------- --------- --------
------ ------- ------ ---------- --------- -------- --------- --------- --------
------ ------- ------ ---------- --------- -------- --------- --------- --------
------ ------- ------ ---------- --------- -------- --------- --------- --------
------ ------- ------ ---------- --------- -------- --------- --------- --------
------ ------- ------ ---------- --------- -------- --------- --------- --------
------ ------- ------ ---------- --------- -------- --------- --------- --------
------ ------- ------ ---------- --------- -------- --------- --------- --------
------ ------- ------ ---------- --------- -------- --------- --------- --------
------ ------- ------ ---------- --------- -------- --------- --------- --------
------ ------- ------ ---------- --------- -------- --------- --------- --------
------ ------- ------ ---------- --------- -------- --------- --------- --------
------ ------- ------ ---------- --------- -------- --------- --------- --------
------ ------- ------ ---------- --------- -------- --------- --------- --------
------ ------- ------ ---------- --------- -------- --------- --------- --------
------ ------- ------ ---------- --------- -------- --------- --------- --------
----------
(1) The type of Loan may be represented by "L" for LIBOR Rate Loans or "ABR"
for Alternate Base Rate Loans.
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Schedule 5.10
FORM OF JOINDER AGREEMENT
THIS JOINDER AGREEMENT (the "Agreement"), dated as of _____________, ____,
is by and between _____________________, a ___________________ (the "Subsidiary
Guarantor"), and FIRST UNION NATIONAL BANK, in its capacity as Administrative
Agent under that certain Credit Agreement (as it may be amended, modified,
extended or restated from time to time, the "Credit Agreement"), dated as of
October 19, 1999 by and among ▇▇▇▇▇▇▇ FURNITURE INDUSTRIES, INCORPORATED, a
Virginia corporation, as Borrower, certain Subsidiaries of the Borrower as
Guarantors, the Lenders and First Union National Bank, as Administrative Agent
(the "Administrative Agent"). All of the defined terms in the Credit Agreement
are incorporated herein by reference.
The Subsidiary Guarantor is an Additional Credit Party, and, consequently,
the Credit Parties are required by Section 5.10 of the Credit Agreement to cause
the Subsidiary Guarantor to become a "Guarantor" thereunder.
Accordingly, the Subsidiary Guarantor hereby agrees as follows with the
Administrative Agent, for the benefit of the Lenders:
1. The Subsidiary Guarantor hereby acknowledges, agrees and confirms
that, by its execution of this Agreement, the Subsidiary will be deemed to be a
party to the Credit Agreement and a "Guarantor" for all purposes of the Credit
Agreement and the other Credit Documents, and shall have all of the obligations
of a Guarantor thereunder as if it had executed the Credit Agreement and the
other Credit Documents. The Subsidiary hereby ratifies, as of the date hereof,
and agrees to be bound by, all of the terms, provisions and conditions contained
in the Credit Documents, including without limitation (i) all of the
representations and warranties of the Credit Parties set forth in Article III of
the Credit Agreement and (ii) all of the affirmative and negative covenants set
forth in Articles V and VI of the Credit Agreement. Without limiting the
generality of the foregoing terms of this paragraph 1, the Subsidiary hereby (i)
jointly and severally together with the other Guarantors, guarantees to each
Lender, the Administrative Agent and the Issuing Lender as provided in the
Credit Agreement the prompt payment and performance of the Credit Party
Obligations of the Borrower in full when due (whether at stated maturity, as a
mandatory prepayment, by acceleration, as a mandatory cash collateralization or
otherwise) strictly in accordance with the terms thereof and agrees that if any
of such Credit Party Obligations are not paid or performed in full when due
(whether at stated maturity, as a mandatory prepayment, by acceleration, as a
mandatory cash collateralization or otherwise), the Subsidiary will, jointly and
severally together with the other Guarantors, promptly pay and perform the same,
without any demand or notice whatsoever, and that in the case of any extension
of time of payment or renewal of any of the Credit Party Obligations of the
Borrower, the same will be promptly paid in full when due (whether at extended
maturity, as a mandatory prepayment, by acceleration, as a mandatory cash
collateralization or otherwise) in accordance with the terms of such extension
or renewal.
2. The Subsidiary Guarantor acknowledges and confirms that it has
received a copy of the Credit Agreement and the schedules and exhibits thereto.
The information on the schedules to the Credit Agreement are hereby amended to
provide the information shown on the attached Schedule A.
3. The Borrower confirms that all of its obligations under the Credit
Agreement are, and upon the Subsidiary Guarantor becoming a Guarantor, shall
continue to be, in full force and effect. The parties hereto confirm and agree
that immediately upon the Subsidiary Guarantor becoming a Guarantor the term
"Credit Party Obligations," as used in the Credit Agreement, shall include all
obligations of such Subsidiary Guarantor under the Credit Agreement and under
each other Credit Document.
4. The Subsidiary Guarantor hereby agrees that upon becoming a
Guarantor it will assume all Credit Party Obligations of a Guarantor as set
forth in the Credit Agreement.
5. Each of the Borrower and the Subsidiary Guarantor agrees that at
any time and from time to time, upon the written request of the Administrative
Agent, it will execute and deliver such further documents and do such further
acts and things as the Administrative Agent may reasonably request in order to
effect the purposes of this Agreement.
6. This Agreement may be executed in two or more counterparts, each of
which shall constitute an original but all of which when taken together shall
constitute one contract.
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7. This Agreement shall be governed by and construed and interpreted
in accordance with the laws of the State of North Carolina.
IN WITNESS WHEREOF, each of the Borrower and the Subsidiary Guarantor has
caused this Joinder Agreement to be duly executed by its authorized officer, and
the Administrative Agent, for the benefit of the Lenders, has caused the same to
be accepted by its authorized officer, as of the day and year first above
written.
▇▇▇▇▇▇▇ FURNITURE INDUSTRIES, INCORPORATED
By
------------------------------------------
Title
---------------------------------------
[SUBSIDIARY GUARANTOR]
By
------------------------------------------
Title
---------------------------------------
Acknowledged and accepted:
FIRST UNION NATIONAL BANK,
as Administrative Agent
By
------------------------------------------
Title
---------------------------------------
-2-
90
SCHEDULE A
to
Joinder Agreement
Schedules to Credit Agreement
-2-