EXHIBIT 4.6
EXECUTION COPY
AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of August 6, 1999
and
Amended as of December 31, 2001
among
NATIONAL EQUIPMENT SERVICES, INC.,
as Borrower,
and
CERTAIN SUBSIDIARIES OF THE BORROWER
FROM TIME TO TIME PARTY HERETO,
as Guarantors,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTY HERETO
and
FIRST UNION NATIONAL BANK,
as Agent
TABLE OF CONTENTS
SECTION 1 DEFINITIONS...................................................... 1
1.1 DEFINITIONS..................................................... 1
1.2 COMPUTATION OF TIME PERIODS..................................... 29
1.3 ACCOUNTING TERMS................................................ 30
SECTION 2 CREDIT FACILITIES................................................ 30
2.1 REVOLVING LOANS................................................. 30
2.2 LETTER OF CREDIT SUBFACILITY.................................... 32
2.3 SWINGLINE LOAN SUBFACILITY...................................... 38
2.4 TERM LOAN....................................................... 40
SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES................... 41
3.1 DEFAULT RATE.................................................... 41
3.2 EXTENSION AND CONVERSION........................................ 41
3.3 PREPAYMENTS..................................................... 42
3.4 TERMINATION, REDUCTION OF REVOLVING COMMITTED AMOUNT............ 44
3.5 FEES............................................................ 44
3.6 CAPITAL ADEQUACY................................................ 45
3.7 LIMITATION ON EURODOLLAR LOANS.................................. 46
3.8 ILLEGALITY...................................................... 46
3.9 REQUIREMENTS OF LAW............................................. 47
3.10 TREATMENT OF AFFECTED LOANS..................................... 48
3.11 TAXES........................................................... 48
3.12 COMPENSATION.................................................... 50
3.13 PRO RATA TREATMENT.............................................. 51
3.14 SHARING OF PAYMENTS............................................. 52
3.15 PAYMENTS, COMPUTATIONS, ETC..................................... 52
3.16 CASH MANAGEMENT................................................. 54
3.17 EVIDENCE OF DEBT................................................ 56
SECTION 4 GUARANTY......................................................... 56
4.1 THE GUARANTY.................................................... 56
4.2 OBLIGATIONS UNCONDITIONAL....................................... 57
4.3 REINSTATEMENT................................................... 58
4.4 CERTAIN ADDITIONAL WAIVERS...................................... 59
4.5 REMEDIES........................................................ 59
4.6 RIGHTS OF CONTRIBUTION.......................................... 59
4.7 GUARANTEE OF PAYMENT; CONTINUING GUARANTEE...................... 60
SECTION 5 CONDITIONS....................................................... 60
5.1 CLOSING CONDITIONS.............................................. 60
5.2 CONDITIONS TO ALL EXTENSIONS OF CREDIT.......................... 64
SECTION 6 REPRESENTATIONS AND WARRANTIES................................... 65
6.1 FINANCIAL CONDITION............................................. 65
6.2 NO MATERIAL CHANGE.............................................. 65
6.3 ORGANIZATION AND GOOD STANDING.................................. 65
6.4 POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS................... 66
6.5 NO CONFLICTS.................................................... 66
6.6 NO DEFAULT...................................................... 67
6.7 OWNERSHIP....................................................... 67
6.8 INDEBTEDNESS.................................................... 67
6.9 LITIGATION...................................................... 67
6.10 TAXES........................................................... 68
6.11 COMPLIANCE WITH LAW............................................. 68
6.12 ERISA........................................................... 68
6.13 SUBSIDIARIES.................................................... 69
6.14 GOVERNMENTAL REGULATIONS, ETC................................... 70
6.15 PURPOSE OF LOANS AND LETTERS OF CREDIT.......................... 71
6.16 ENVIRONMENTAL MATTERS........................................... 71
6.17 INTELLECTUAL PROPERTY........................................... 72
6.18 SOLVENCY........................................................ 72
6.19 INVESTMENTS..................................................... 73
6.20 LOCATION OF COLLATERAL.......................................... 73
6.21 DISCLOSURE...................................................... 73
6.22 NO BURDENSOME RESTRICTIONS...................................... 73
6.23 BROKERS' FEES................................................... 73
6.24 LABOR MATTERS................................................... 74
6.25 [INTENTIONALLY OMITTED]......................................... 74
6.26 MATERIAL CONTRACTS.............................................. 74
6.27 SENIOR DEBT..................................................... 74
6.28 LIENS; INVENTORY................................................ 74
6.29 STATUS OF ACCOUNTS.............................................. 74
6.30 TRADE SUPPLIERS................................................. 75
SECTION 7 AFFIRMATIVE COVENANTS............................................ 75
7.1 INFORMATION COVENANTS........................................... 75
7.2 PRESERVATION OF EXISTENCE AND FRANCHISES........................ 80
7.3 BOOKS AND RECORDS............................................... 80
7.4 COMPLIANCE WITH LAW............................................. 80
7.5 PAYMENT OF TAXES AND OTHER INDEBTEDNESS......................... 80
7.6 INSURANCE; CONDEMNATION......................................... 80
7.7 MAINTENANCE OF PROPERTY......................................... 82
7.8 PERFORMANCE OF OBLIGATIONS...................................... 82
7.9 USE OF PROCEEDS................................................. 82
7.10 AUDITS/INSPECTIONS; APPRAISALS; INVENTORY AND OTHER COLLATERAL.. 82
7.11 FINANCIAL COVENANTS............................................. 83
7.12 ADDITIONAL CREDIT PARTIES....................................... 84
7.13 ENVIRONMENTAL LAWS.............................................. 85
7.14 COLLATERAL...................................................... 85
7.15 PLEDGED REAL ESTATE ASSETS...................................... 87
7.16 SCHEDULES OF ACCOUNTS AND PURCHASE ORDERS....................... 88
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7.17 COLLECTION OF ACCOUNTS.......................................... 88
7.18 NOTICE; CREDIT MEMORANDA; AND RETURNED GOODS.................... 88
7.19 ACKNOWLEDGMENT AGREEMENTS....................................... 89
7.20 REVISIONS OR UPDATES TO SCHEDULES............................... 89
SECTION 8 NEGATIVE COVENANTS............................................... 89
8.1 INDEBTEDNESS.................................................... 90
8.2 LIENS........................................................... 91
8.3 NATURE OF BUSINESS.............................................. 91
8.4 CONSOLIDATION, MERGER, DISSOLUTION, ETC......................... 91
8.5 ASSET SALES..................................................... 92
8.6 INVESTMENTS..................................................... 92
8.7 RESTRICTED PAYMENTS............................................. 92
8.8 PREPAYMENTS OF INDEBTEDNESS, ETC................................ 93
8.9 TRANSACTIONS WITH AFFILIATES.................................... 93
8.10 ACCOUNTING; ORGANIZATIONAL DOCUMENTS; MATERIAL CONTRACTS........ 93
8.11 LIMITATION ON RESTRICTED ACTIONS................................ 94
8.12 OWNERSHIP OF SUBSIDIARIES....................................... 94
8.13 SALE LEASEBACKS................................................. 94
8.14 NO FURTHER NEGATIVE PLEDGES..................................... 95
8.15 NO ADDITIONAL BANK ACCOUNTS..................................... 95
SECTION 9 EVENTS OF DEFAULT................................................ 95
9.1 EVENTS OF DEFAULT............................................... 95
9.2 ACCELERATION; REMEDIES.......................................... 98
SECTION 10 AGENCY PROVISIONS................................................ 99
10.1 APPOINTMENT, POWERS AND IMMUNITIES.............................. 99
10.2 RELIANCE BY AGENT............................................... 99
10.3 DEFAULTS........................................................ 100
10.4 RIGHTS AS A LENDER.............................................. 100
10.5 INDEMNIFICATION................................................. 100
10.6 NON-RELIANCE ON AGENT AND OTHER LENDERS......................... 101
10.7 SUCCESSOR AGENT................................................. 101
10.8 COLLATERAL MATTERS.............................................. 102
SECTION 11 MISCELLANEOUS.................................................... 103
11.1 NOTICES......................................................... 103
11.2 RIGHT OF SET-OFF; ADJUSTMENTS................................... 104
11.3 BENEFIT OF AGREEMENT............................................ 105
11.4 NO WAIVER; REMEDIES CUMULATIVE.................................. 106
11.5 EXPENSES; INDEMNIFICATION....................................... 107
11.6 AMENDMENTS, WAIVERS AND CONSENTS................................ 108
11.7 COUNTERPARTS.................................................... 109
11.8 HEADINGS........................................................ 110
11.9 SURVIVAL........................................................ 110
11.10 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF
TRIAL BY JURY.................................................. 110
11.11 SEVERABILITY.................................................... 111
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11.12 ENTIRETY........................................................ 111
11.13 BINDING EFFECT; TERMINATION OF THIS
CREDIT AGREEMENT;
TERMINATION OF EXISTING
CREDIT AGREEMENT....................... 111
11.14 CONFIDENTIALITY................................................. 112
11.15 CONFLICT........................................................ 112
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SCHEDULES
Schedule 1.1(a) Investments
Schedule 1.1(b) Liens
Schedule 1.1(c) Brambles Transactions
Schedule 2.1(a) Lenders
Schedule 6.7 Owned and Leased Real Estate
Schedule 6.13 Subsidiaries
Schedule 6.17 Intellectual Property
Schedule 6.20 Collateral Locations/Chief Executive Offices/Principal Places of Business
Schedule 6.24 Labor Matters
Schedule 6.26 Material Contracts
Schedule 6.30 Trade Suppliers
Schedule 8.1 Indebtedness
Schedule 8.15 Bank Accounts
EXHIBITS
Exhibit 1 Form of Acknowledgement Agreement
Exhibit 1A Form of Landlord Agreement
Exhibit 2.1(b)(i) Form of Notice of Borrowing
Exhibit 2.1(e) Form of Revolving Note
Exhibit 2.3(d) Form of Swingline Note
Exhibit 2.4(f) Form of Term Note
Exhibit 3.2 Form of Notice of Extension/Conversion
Exhibit 3.16(a) Form of Blocked Account Agreement
Exhibit 5.1(t) Form of Account Designation Letter
Exhibit 7.1(c) Form of Officer's Compliance Certificate
Exhibit 7.1(d) Form of Borrowing Base Certificate
Exhibit 7.12 Form of Joinder Agreement
Exhibit 11.3(b) Form of Assignment and Acceptance
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AMENDED AND RESTATED
CREDIT AGREEMENT
THIS AMENDED AND RESTATED
CREDIT AGREEMENT, dated as of August 6, 1999 and
as amended as of December 31, 2001 (as amended, modified, restated or
supplemented from time to time, the "
CREDIT AGREEMENT"), is by and among
NATIONAL EQUIPMENT SERVICES, INC., a Delaware corporation (the "BORROWER"), the
Subsidiary Guarantors (as defined herein), the Lenders (as defined herein) and
FIRST UNION NATIONAL BANK, as Agent for the Lenders (in such capacity, the
"AGENT").
WITNESSETH
WHEREAS, the Borrower has requested the Lenders to extend certain credit
facilities to the Borrower;
WHEREAS, the Lenders have agreed to make the requested credit facilities
available to the Borrower on the terms and conditions hereinafter set forth;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS
1.1 DEFINITIONS.
As used in this
Credit Agreement, the following terms shall have the
meanings specified below unless the context otherwise requires:
"ACCOUNT DESIGNATION LETTER" has the meaning given to such term in Section
5.1(q) hereof
"ACCOUNTS" means all of each Credit Party's accounts, as such term is
defined in the UCC, whether now existing or existing in the future, including,
without limitation, all (i) accounts receivable (whether or not specifically
listed on schedules furnished to the Agent), including without limitation, all
accounts created by or arising from each Credit Party's sales or leases of goods
or rendition of services made under any trade names or styles, or through any
divisions; (ii) unpaid seller's or lessor's rights (including rescission,
replevin, reclamation and stopping in transit) relating to the foregoing or
arising therefrom; (iii) rights to any goods represented by any of the
foregoing, including returned or repossessed goods; (iv) reserves and credit
balances held by each Credit Party with respect to any such accounts receivable
or account debtors; (v) guarantees or collateral for any of the foregoing; and
(vi) insurance policies or rights relating to any of the foregoing.
"ACKNOWLEDGMENT AGREEMENTS" means (i) the Acknowledgment Agreements,
substantially in the form of EXHIBIT 1 hereto, between each Credit Party's
warehousemen, fillers, packers and processors and the Agent, in each case
acknowledging and agreeing, among other things, (A) that such warehousemen,
fillers, packers and processors do not have any Liens on any of the property of
any Credit Party or any Subsidiary and (B) to the collateral assignment by each
Credit Party to the Agent of each such Credit Party's interest in the contracts
with each of such warehousemen, fillers, packers and processors and (ii)
Landlord Agreements.
"ACQUISITION" means the purchase of a business unit as a going concern
which purchase may be of (i) the Capital Stock of a Person, (ii) the assets of
such Person through merger or consolidation with such Person or (iii) the plant,
property and equipment of such Person, or a portion thereof, together with the
related current assets and intangible assets of such Person.
"ACQUIRED COMPANY" means any Person (or assets thereof) which is acquired
pursuant to an Acquisition.
"ADDITIONAL CREDIT PARTY" means each Person that becomes a Subsidiary
Guarantor after the Closing Date by execution of a Joinder Agreement.
"ADJUSTED BASE RATE" means the Base Rate PLUS the Applicable Percentage for
Base Rate Loans.
"ADJUSTED EURODOLLAR RATE" means the Eurodollar Rate PLUS the Applicable
Percentage for Eurodollar Loans.
"AFFILIATE" means, with respect to any Person, any other Person (i)
directly or indirectly controlling or controlled by or under direct or indirect
common control with such Person or (ii) directly or indirectly owning or holding
twenty percent (20%) or more of the Capital Stock in such Person. For purposes
of this definition, "control" when used with respect to any Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"AGENCY AND CUSTODIAN AGREEMENTS" means each of the Amended and Restated
Agency and Custodian Agreements, of even date herewith, among the Agent, the
Borrower, on behalf of itself and the other Credit Parties, and the applicable
Operating Region Representative.
"AGENCY SERVICES ADDRESS" means First Union National Bank, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: Agency Services,
or such other address as may be identified by written notice from the Agent to
the Borrower.
"AGENT" has the meaning ascribed to such term in the heading hereof,
together with any successors or assigns.
2
"AGENT'S FEE LETTER" means the letter agreement, dated as of December 31,
2001, between the Agent and the Borrower, as amended, modified, restated or
supplemented from time to time.
"AGENT'S FEES" has the meaning ascribed to such term in Section 3.5(c).
"AMENDMENT NO. 5 EFFECTIVE DATE" means December 31, 2001
"APPLICABLE LENDING OFFICE" means, for each Lender, the office of such
Lender (or of an Affiliate of such Lender) as such Lender may from time to time
specify to the Agent and the Borrower by written notice as the office by which
its Eurodollar Loans are made and maintained.
"APPLICABLE PERCENTAGE" means for Base Rate Loans, Eurodollar Loans and
Unused Line Fees, the appropriate applicable percentages corresponding to the
Total Debt Leverage Ratio in effect as of the most recent Calculation Date as
shown below:
--------------------------------------------------------------------------------------------------------------------------
Tier Total Debt Applicable Applicable Applicable
Level Leverage Ratio Percentage for Percentage for Base Percentage for
Eurodollar Loans Rate Loans Unused Line Fees
--------------------------------------------------------------------------------------------------------------------------
Revolving Term Revolving Term
Loans Loan Loans Loan
--------------------------------------------------------------------------------------------------------------------------
1 GREATER THAN OR 3.00% 3.00% 1.75% 1.75% 0.50%
EQUAL TO
3.50 to 1.0
--------------------------------------------------------------------------------------------------------------------------
2 LESS THAN 2.75% 2.75% 1.50% 1.50% 0.50%
3.50 to 1.0
--------------------------------------------------------------------------------------------------------------------------
The Applicable Percentages shall be determined and adjusted (a) quarterly on the
date five Business Days after the date on which the Agent has received from the
Borrower the quarterly officer's certificate required to be delivered to the
Agent and the Lenders in accordance with the provisions of Section 7.1(c) and
(b) upon the consummation of a Permitted Acquisition (each such date referred to
in clauses (a) and (b), a "Calculation Date"); PROVIDED, HOWEVER, that (i) the
initial Applicable Percentages shall be based on Tier Level 1 and (ii) if the
Borrower fails to provide the officer's certificate to the Agent for any fiscal
quarter as required by and within the time limits set forth in Section 7.1(c),
the Applicable Percentages from the applicable date of such failure shall be
based on Tier Level 1 until five Business Days after an appropriate officer's
certificate is provided to the Agent, whereupon the Tier Level shall be
determined by the Total Debt Leverage Ratio set forth in such certificate.
Except as set forth above, each Applicable Percentage shall be effective from
one Calculation Date until the next Calculation Date.
"ASSET DISPOSITION" means the disposition of any or all of the assets
(including without limitation the Capital Stock of a Subsidiary) of any
Consolidated Party whether by sale, lease, transfer or otherwise, but excluding
(i) dispositions of Equipment Held for Resale in the ordinary course of
business, (ii) dispositions of Rental Equipment by a Consolidated Party in any
calendar month to the extent that the aggregate Net Cash Proceeds from such
dispositions when combined
3
with all other such dispositions previously made by all the Consolidated Parties
in such calendar month do not exceed 5% of the net book value of all Rental
Equipment of the Credit Parties, (iii) dispositions of obsolete or worn
equipment by a Credit Party, other than the sale or other disposition of
equipment described in clauses (i) or (ii) immediately above, in any fiscal year
to the extent that the aggregate Net Cash Proceeds from such dispositions when
combined with all other such dispositions previously made by all the
Consolidated Parties in such fiscal year do not exceed $1,000,000, (iv)
dispositions of Cash Equivalents and (v) dispositions of real estate assets by a
Consolidated Party during any fiscal year to the extent that the aggregate Net
Cash Proceeds from such dispositions when combined with all other such
dispositions previously made by all the Consolidated Parties in such fiscal year
do not exceed $5,000,000.
"BANKRUPTCY CODE" means the Bankruptcy Code in Title 11 of the United
States Code, as amended, modified, succeeded or replaced from time to time.
"BANKRUPTCY EVENT" means, with respect to any Person, the occurrence of any
of the following with respect to such Person: (i) a court or governmental agency
having jurisdiction in the premises shall enter a decree or order for relief in
respect of such Person in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of such Person or for any substantial part of its Property or ordering
the winding up or liquidation of its affairs; or (ii) there shall be commenced
against such Person an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or any case,
proceeding or other action for the appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of such Person
or for any substantial part of its Property or for the winding up or liquidation
of its affairs, and such involuntary case or other case, proceeding or other
action shall remain undismissed, undischarged or unbonded for a period of sixty
(60) consecutive days; or (iii) such Person shall commence a voluntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or consent to the entry of an order for relief in an
involuntary case under any such law, or consent to the appointment or taking
possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of such Person or for any substantial part of its Property
or make any general assignment for the benefit of creditors; or (iv) such Person
shall be unable to, or shall admit in writing its inability to, pay its debts
generally as they become due.
"BASE RATE" means, for any day, the rate per annum equal to the higher of
(a) the Federal Funds Rate for such day plus one-half of one percent (0.5%) and
(b) the Prime Rate for such day. Any change in the Base Rate due to a change in
the Prime Rate or the Federal Funds Rate shall be effective on the effective
date of such change in the Prime Rate or Federal Funds Rate.
"BASE RATE LOAN" means any Loan bearing interest at a rate determined by
reference to the Base Rate.
"BLOCKED ACCOUNTS" has the meaning ascribed to such term in SECTION
3.16(a).
4
"BLOCKED ACCOUNT AGREEMENT" has the meaning ascribed to such term in
SECTION 3.16(a).
"BORROWER" means the Person identified as such in the heading hereof,
together with any permitted successors and assigns.
"BORROWING BASE" means, as of any day, an amount equal to the sum of (1)
eighty percent (80%) of the aggregate face amount of Eligible Accounts
Receivable, PLUS (2) fifty percent (50%) of the net book value (determined at
the lower of cost or market) of Eligible Parts and Supplies Inventory, PLUS (3)
eighty percent (80%) of the Orderly Liquidation Value of the Original Brambles
Eligible Rental Equipment (PROVIDED, HOWEVER, on the last day of each month, the
aggregate amount of Eligible Rental Equipment as of such date shall be reduced
by an amount equal to 1/60th of such amount), PLUS (4) seventy-eight percent
(78%) of the net book value of the Serialized Eligible Rental Equipment, PLUS
(5) fifty-six percent (56%) of the net book value of the Non-Serialized Eligible
Rental Equipment, PLUS (6) eighty percent (80%) of the Delivered Cost of
Eligible Equipment Held For Resale, in each case as set forth in the most recent
Borrowing Base Certificate delivered to the Agent and the Lenders in accordance
with the terms of Section 7.1(d), PLUS (7) an amount equal to (a) from the
Amendment No. 5 Effective Date through March 31, 2002, $50,000,000, (b) from
April 1, 2002 through June 30, 2002, $37,500,000, (c) from July 1, 2002 through
September 30, 2002, $25,000,000, (d) from October 1, 2002 through December 31,
2002, $12,500,000 and (e) thereafter, $-0-, MINUS (8) reserves established by
the Agent from time to time in its reasonable discretion. Notwithstanding the
foregoing to the contrary, following the Amendment No. 5 Effective Date, (a) the
advance rate on the Serialized Eligible Rental Equipment shall be readjusted
periodically based on each new Equipment Appraisal thereof to equal the product
(calculated as a percentage) of (x) the ratio of (1) the Orderly Liquidation
Value of the Serialized Eligible Rental Equipment to (2) the net book value of
the Serialized Eligible Rental Equipment MULTIPLIED by (y) eighty percent (80%)
and (b) the advance rate on the Non-Serialized Eligible Rental Equipment shall
be readjusted periodically based on each new Equipment Appraisal thereof to
equal the product (calculated as a percentage) of (x) the ratio of (1) the
Orderly Liquidation Value of the Non-Serialized Eligible Rental Equipment to (2)
the net book value of the Non-Serialized Eligible Rental Equipment MULTIPLIED by
(y) eighty percent (80%). Notwithstanding the foregoing, the Accounts of
Brambles originated on or prior to the December 31, 2001 will be excluded from
the Borrowing Base.
"BORROWING BASE CERTIFICATE" has the meaning ascribed to such term in
Section 7.1(d) hereof.
"BRAMBLES" means Brambles Equipment Services, Inc., Brambles Equipment
Services, Inc. (Canada), and the assets being acquired pursuant to the Brambles
Purchase Agreement.
"BRAMBLES ACQUISITION" means the Acquisition of Brambles pursuant to the
Brambles Purchase Agreement and as further described in SCHEDULE 1.1(c) hereto.
5
"BRAMBLES PURCHASE AGREEMENT" means the Purchase Agreement by and among
National Equipment Services, Inc., NES Equipment Services Corporation, NES
Equipment Rental, L.P., Brambles Equipment Services, Inc., Brambles Equipment
Services, Inc. (Canada), Brambles Equipment Services Holding, Inc., Brambles
Equipment Services, Inc. (Michigan), Brambles Canada and Brambles U.S.A., dated
as of December 31, 2001.
"BUSINESS DAY" means a day other than a Saturday, Sunday or other day on
which commercial banks in Charlotte, North Carolina are authorized or required
by law to close, EXCEPT THAT, when used in connection with a Eurodollar Loan,
such day shall also be a day on which dealings between banks are carried on in
U.S. dollar deposits in London, England.
"CAPITAL LEASE" means, as applied to any Person, any lease of any Property
(whether real, personal or mixed) by that Person as lessee which, in accordance
with GAAP, is or should be accounted for as a capital lease on the balance sheet
of that Person.
"CAPITAL STOCK" means (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" means (a) 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, (b) U.S. dollar denominated
time deposits and certificates of deposit of (i) any Lender, (ii) any domestic
commercial bank of recognized standing having capital and surplus in excess of
$500,000,000 or (iii) 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 270 days from the date of acquisition, (c)
commercial paper and variable or fixed rate notes issued by any Approved Bank
(or by the parent company thereof) or any variable rate notes issued by, or
guaranteed by, any domestic corporation rated A-1 (or the equivalent thereof) or
better by S&P or P-1 (or the equivalent thereof) or better by Moody's and
maturing within six months of the date of acquisition, (d) repurchase agreements
entered into by any Person with a bank or trust company (including any of the
Lenders) or 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 in which such Person shall have a perfected first priority
security interest (subject to no other Liens) and having, on the date of
purchase thereof, a fair market value of at least 100% of the amount of the
repurchase obligations and (e) Investments, classified in accordance with GAAP
as current assets, in money market investment programs registered under the
Investment Company Act of 1940, as amended, which are administered by reputable
financial institutions having capital of at least $500,000,000 and the
portfolios of which
6
are limited to Investments primarily of the character described in the foregoing
subdivisions (a) through (d).
"CASH MANAGEMENT EVENT" has the meaning ascribed to such term in SECTION
7.17.
"CHANGE OF CONTROL" means the occurrence of any of the following events:
(i) any Person or two or more Persons acting in concert (other than the
Principal Stockholders) 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, or control over, Voting Stock of the Borrower (or
other securities convertible into such Voting Stock) representing 20% or more of
the combined voting power of all Voting Stock of the Borrower, (ii) a majority
of the Borrower's Board of Directors shall consist of Persons other than
"Continuing Directors," (iii) immediately after any merger, consolidation,
combination, reclassification or recapitalization or similar transaction, the
Principal Stockholders shall be the "beneficial owner", directly or indirectly,
of outstanding shares of stock of the Borrower (or any Person surviving such
transaction) entitling the Principal Stockholders to exercise 50% or more of the
total voting power of all classes of stock of the Borrower (or the surviving
Person in such transaction) entitled to vote in the elections of the directors
and, in an anticipation of, in connection with or as a result of, such
transaction, the Borrower (or such surviving Person) shall have incurred or
issued additional Indebtedness such that the total Indebtedness so incurred or
issued equals at least 50% of the consideration payable in such transaction;
PROVIDED, HOWEVER, that any such transaction shall not be considered a Change of
Control if the Purchasers shall have participated therein on no less than a PARI
PASSU basis (assuming conversion of all of the Preferred Stock into common stock
of the Borrower) with the Principal Stockholders, (iv) the stockholders of the
Borrower shall have approved a reorganization, merger or consolidation or
similar transaction, in each case, with respect to which all or substantially
all the Persons who were the "beneficial owners" of the outstanding shares of
capital stock of the Borrower immediately prior to such reorganization, merger
or consolidation, beneficially own, directly or indirectly, less than 50% of the
Voting Stock of the Borrower (excluding the Voting Stock that the Purchasers
shall be entitled to receive as a result of such reorganization, merger or
consolidation) resulting from such reorganization, merger or consolidation, (v)
the stockholders of the Borrower shall have approved the sale or other
disposition of all or substantially all of the assets of the Borrower in one
transaction or in a series of related transactions, or (vi) any transaction
shall occur, the result of which is that the common stock of the Borrower is not
required to be registered under Section 12 of the Securities Exchange Act of
1934, as amended (the "EXCHANGE ACT"), and the holders of such common stock
shall not receive common stock of the Person surviving such transaction which is
required to be registered under Section 12 of said Act. As used herein,
"beneficial ownership" and "beneficial owner" shall have the respective meanings
provided in Rule 13d-3 promulgated under the Exchange Act, "Continuing Director"
shall mean any member of the Board of Directors of the Borrower on the Closing
Date, any director elected pursuant to Section 10.10 of the Stock Purchase
Agreement and any other member of the Board of Directors who shall be
recommended or elected to succeed a Continuing Director by a majority of
Continuing Directors who are the members of the Board of Directors and
"Principal Stockholders" shall mean Golder, Thoma, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ Fund V, L.P.,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ or any Affiliates of any such Person.
7
"CLOSING DATE" means August 6, 1999.
"CODE" means the Internal Revenue Code of 1986, as amended, and any
successor statute thereto, as interpreted by the rules and regulations issued
thereunder, in each case as in effect from time to time. References to sections
of the Code shall be construed also to refer to any successor sections.
"COLLATERAL" means a collective reference to the collateral which is
identified in, and at any time will be covered by, the Collateral Documents.
"COLLATERAL DOCUMENTS" means a collective reference to the Security
Agreement, the Pledge Agreement, the Agency and Custodian Agreements, the
Blocked Account Agreements and such other documents executed and delivered in
connection with the attachment and perfection of the Agent's security interests
and liens arising thereunder, including without limitation, UCC financing
statements and intellectual property filings.
"COMMITMENT" means the Revolving Commitment, the Term Loan Commitment, the
LOC Commitment and the Swingline Commitment.
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, all capital
expenditures of the Consolidated Parties on a consolidated basis for such
period, as determined in accordance with GAAP.
"CONSOLIDATED CASH TAXES" means, for any period of computation, the
aggregate of all taxes of the Consolidated Parties on a consolidated basis, as
determined in accordance with GAAP, to the extent the same are paid in cash
during such period (whether such taxes are due in such period or any other
period). Consolidated Cash Taxes shall be calculated to give effect to any
Permitted Acquisition on a Pro Forma Basis.
"CONSOLIDATED EBITDA" means, for any period, the sum of (i) Consolidated
Net Income for such period, but excluding therefrom all non-recurring items of
income or loss, plus (ii) an 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) depreciation and amortization expense, all as determined
in accordance with GAAP, plus (iii) pro forma expense adjustments and cost
savings related to the Brambles Acquisition not to exceed $3,000,000 for the
period commencing with the Amendment No. 5 Effective Date and ending June 30,
2002. Consolidated EBITDA shall be calculated to give effect to any Permitted
Acquisition on a Pro Forma Basis and the portion of Consolidated EBITDA
allocated to Brambles will equal $12,600,000 for the fiscal quarter ended March
31, 2001, $13,000,000 for the fiscal quarter ended June 30, 2001, $13,900,000
for the fiscal quarter ended September 30, 2001 and $14,000,000 (estimated) for
the fiscal quarter ended December 31, 2001 (the Brambles EBITDA amount for the
December 31, 2001 fiscal quarter
8
will be the actual amount based on the audited financial statements of the
Consolidated Parties for the fiscal year ended December 31, 2001 upon issuance
of such financial statements).
"CONSOLIDATED EBITDAR" means, for any period of computation, the sum of (i)
Consolidated EBITDA for such period PLUS (ii) Consolidated Rental Expense for
such period.
"CONSOLIDATED FIXED CHARGES" means, for any period of computation, the sum
of (i) Consolidated Interest Expense for the applicable period PLUS (ii)
Consolidated Funded Debt Payments for the applicable period.
"CONSOLIDATED FUNDED INDEBTEDNESS" means, as of the date of determination,
all Funded Indebtedness of the Consolidated Parties.
"CONSOLIDATED FUNDED DEBT PAYMENTS" means, as of the end of each fiscal
quarter of the Consolidated Parties on a consolidated basis, the sum of all
scheduled payments of principal on Consolidated Funded Indebtedness (including
the principal component of payments due on Capital Leases during the applicable
period ending on such date); it being understood that Consolidated Funded Debt
Payments shall not include voluntary prepayments or mandatory prepayments of the
Term Loans required pursuant to SECTION 3.3.
"CONSOLIDATED INTEREST EXPENSE" means, for any period of computation,
interest expense (including the amortization of debt discount and premium, the
interest component under Capital Leases and the implied interest component under
Synthetic Leases) of the Consolidated Parties on a consolidated basis for such
period, as determined in accordance with GAAP. Consolidated Interest Expense
shall be calculated to give effect to any Permitted Acquisition on a Pro Forma
Basis.
"CONSOLIDATED NET CAPITAL EXPENDITURES" means, for any period, Consolidated
Capital Expenditures made during such period, net of the net book value of
Rental Equipment sold during such period.
"CONSOLIDATED NET INCOME" means, for any period of computation, net income
(excluding extraordinary items) after taxes for such period of the Consolidated
Parties on a consolidated basis, as determined in accordance with GAAP.
Consolidated Net Income shall be calculated to give effect to any Permitted
Acquisition on a Pro Forma Basis.
"CONSOLIDATED NET WORTH" means, as of any date of determination,
shareholders' equity or net worth of the Consolidated Parties on a consolidated
basis, as determined in accordance with GAAP. Consolidated Net Worth shall be
calculated to give effect to any Permitted Acquisition on a Pro Forma Basis.
"CONSOLIDATED PARTIES" means a collective reference to the Borrower and its
Subsidiaries, and "CONSOLIDATED PARTY" means any one of them.
9
"CONSOLIDATED RENTAL EXPENSE" means, for any period of computation, the sum
of all rental expense of the Consolidated Parties on a consolidated basis for
such period, determined in accordance with GAAP. Consolidated Rental Expense
shall be calculated to give effect to any Permitted Acquisition on a Pro Forma
Basis.
"CONSOLIDATED SENIOR INDEBTEDNESS" means, as of the date of determination,
Consolidated Funded Indebtedness LESS Subordinated Debt.
"CONTRACTUAL OBLIGATIONS" means, with respect to any Person, any term or
provision of any securities issued by such Person, or any indenture, mortgage,
deed of trust, contract, undertaking, document, instrument or other agreement to
which such Person is a party or by which it or any of its properties is bound or
to which it or any of its properties is subject.
"CREDIT DOCUMENTS" means a collective reference to this
Credit Agreement,
the Notes, the LOC Documents, each Joinder Agreement, the Agent's Fee Letter,
the Collateral Documents and all other related agreements and documents issued
or delivered hereunder or thereunder or pursuant hereto or thereto (in each case
as the same may be amended, modified, restated, supplemented, extended, renewed
or replaced from time to time), and "CREDIT DOCUMENT" means any one of them.
"CREDIT PARTIES" means a collective reference to the Borrower and the
Guarantors, and "CREDIT PARTY" means any one of them.
"CREDIT PARTY OBLIGATIONS" means, without duplication, (i) all of the
obligations of the Credit Parties to the Lenders (including the Issuing Lender
and the Swingline Lender) and the Agent, whenever arising, under this
Credit
Agreement, the Notes, the Collateral Documents or any of the other Credit
Documents (including, but not limited to, any interest accruing after the
occurrence of a Bankruptcy Event 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" means any event, act or condition which with notice or lapse of
time, or both, would constitute an Event of Default.
"DELIVERED COST" means the purchase price of Equipment Held For Resale,
less freight and other delivery charges.
"DEPOSITORY BANK" has the meaning ascribed to such term in SECTION 3.16(a).
"DOLLARS" and "$" means dollars in lawful currency of the United States of
America.
10
"DOMESTIC SUBSIDIARY" means, with respect to any Person, any Subsidiary of
such Person which is incorporated or organized under the laws of any State of
the United States or the District of Columbia.
"ELIGIBLE ACCOUNTS RECEIVABLE" means the Accounts of the Credit Parties
that conform to the warranties contained herein and in the Security Agreement.
Unless otherwise approved in writing by the Agent (such approval not to be
unreasonably withheld), no Account shall be deemed to be an Eligible Account
Receivable if:
(i) it arises out of a sale or lease made by any Credit Party to an
Affiliate unless such Affiliate is a Portfolio Company and such sale or
lease is made on an arm's length basis; or
(ii) the Account is unpaid 90 days or more from the original invoice
date; or
(iii) such Account is from the same account debtor (or any affiliate
thereof) and twenty-five percent (25%) or more, in face amount, of other
Accounts from such account debtor (or any affiliate thereof) are unpaid 90
days or more after the original invoice date; or
(iv) the Account, when aggregated with all other Accounts of such
account debtor, exceeds fifteen percent (15%) in face value of all Accounts
of the Credit Parties in the aggregate then outstanding, to the extent of
such excess; or
(v) (A) the account debtor is also a creditor of any Credit Party,
to the extent of the amount owed by such Credit Party to the account
debtor, (B) the account debtor has disputed its liability on, or the
account debtor has made any claim with respect to, such Account or any
other Account due from such account debtor to such Credit Party, which has
not been resolved or (C) the Account otherwise is or may become subject to
any right of setoff by the account debtor, to the extent of the amount of
such setoff; or
(vi) the account debtor has commenced a voluntary case under the
federal bankruptcy laws, as now constituted or hereafter amended, or made
an assignment for the benefit of creditors, or if a decree or order for
relief has been entered by a court having jurisdiction in the premises in
respect to the account debtor in an involuntary case under the federal
bankruptcy laws, as now constituted or hereafter amended, or if any other
petition or other application for relief under the federal bankruptcy laws
has been filed by or against the account debtor, or if the account debtor
has failed, suspended business, ceased to be solvent, or consented to or
suffered a receiver, trustee, liquidator or custodian to be appointed for
it or for all or a significant portion of its assets or affairs; or
(vii) the sale is to an account debtor outside the continental United
States or Canada, unless the sale is on letter of credit, guaranty or
acceptance terms acceptable to
11
the Agent in its sole discretion, or is otherwise approved by and
acceptable to the Agent in its sole discretion; or
(viii) the sale to the account debtor is on a ▇▇▇▇-and-hold,
retainage, guaranteed sale, sale-and-return, sale on approval or
consignment basis or made pursuant to any other written agreement providing
for repurchase or return; or
(ix) the account debtor is the United States of America or any
department, agency or instrumentality thereof, unless the applicable Credit
Party duly and effectively assigns its rights to payment of such Account to
the Agent pursuant to the Assignment of Claims Act of 1940, as amended (31
U.S.C. Section 3727 et seq.); or
(x) the goods giving rise to such Account have not been shipped and
delivered to and accepted by the account debtor or the services giving rise
to such Account have not been performed by the applicable Credit Party and
accepted by the account debtor or the Account otherwise does not represent
a final sale; or
(xi) the Account is not subject to a valid, enforceable and first
priority perfected Lien in favor of the Agent; or
(xii) the Account has been converted into a note or other instrument
or put on a payment plan; or
(xiii) the Agent, in the exercise of its reasonable discretion,
determines it to be ineligible.
"ELIGIBLE EQUIPMENT HELD FOR RESALE" means (A) Equipment Held for Resale of
the Credit Parties which (i) is owned solely by a Credit Party and with respect
to which such Credit Party has good, valid and marketable title; (ii) is stored
on property that is either owned or leased by such Credit Party when not rented
to an account debtor pursuant to an equipment lease (PROVIDED, that, with
respect to Equipment Held for Resale stored on property leased by such Credit
Party, such Credit Party shall have delivered in favor of the Agent an
Acknowledgment Agreement from the landlord of such leased property); (iii) is
subject to a valid, enforceable and first priority perfected Lien (and no other
Liens other than Permitted Liens) in favor of the Agent; (iv) is located in the
United States; and (v) is not obsolete or slow moving, and which otherwise
conforms to the warranties contained herein and in the Security Agreement; and
(B) LESS any Equipment Held for Resale that the Agent determines in its
reasonable discretion to be ineligible. In addition to the foregoing, Eligible
Equipment Held for Resale shall include such items of such Credit Party's
Equipment Held for Resale as such Credit Party shall request and that the Agent
approves in advance, in writing and in its reasonable discretion.
"ELIGIBLE PARTS AND SUPPLIES INVENTORY" means (A) the Parts and Supplies
Inventory of the Credit Parties which (i) is owned solely by a Credit Party and
with respect to which such Credit Party has good, valid and marketable title;
(ii) is stored on property that is either owned or
12
leased by such Credit Party (PROVIDED, that, with respect to Parts and Supplies
Inventory stored on property leased by such Credit Party, such Credit Party
shall have delivered in favor of the Agent an Acknowledgment Agreement from the
landlord of such leased property) and is not in transit; (iii) is subject to a
valid, enforceable and first priority perfected Lien (and no other Liens other
than Permitted Liens) in favor of Agent; (iv) is located in the United States;
and (v) is not obsolete or slow moving, and which otherwise conforms to the
warranties contained herein and in the Security Agreement; and (B) LESS any
Parts and Supplies Inventory that the Agent determines in its reasonable
discretion to be ineligible. In addition to the foregoing, Eligible Parts and
Supplies Inventory shall include such items of such Credit Party's Parts and
Supplies Inventory as such Credit Party shall request and that the Agent
approves in advance, in writing and in its reasonable discretion.
"ELIGIBLE RENTAL EQUIPMENT" means (A) the Rental Equipment of the Credit
Parties which (i) is owned solely by a Credit Party and with respect to which
such Credit Party has good, valid and marketable title, (ii) is located on
property of a customer of such Credit Party or is stored on property that is
either owned or leased by such Credit Party (PROVIDED, that, with respect to
Rental Equipment stored on property leased by such Credit Party, such Credit
Party shall have delivered in favor of the Agent an Acknowledgment Agreement
from the landlord of such leased property); (iii) is subject to a valid,
enforceable and first priority perfected Lien (and no other Liens other than
Permitted Liens) in favor of the Agent; (iv) is located in the United States;
and (v) is not obsolete or slow moving, and which otherwise conforms to the
warranties contained herein and in the Security Agreement; and (B) LESS any
Rental Equipment that the Agent determines in its reasonable discretion to be
ineligible. In addition to the foregoing, Eligible Rental Equipment shall
include such items of such Credit Party's Rental Equipment as such Credit Party
shall request and that the Agent approves in advance, in writing and in its
reasonable discretion.
"ELIGIBLE ASSETS" means another business or any substantial part of another
business or other long-term assets, in each case, in, or used or useful in, the
same or a similar line of business as the Borrower and its Subsidiaries were
engaged in on the Closing Date, or any reasonable extensions or expansions
thereof.
"ELIGIBLE ASSIGNEE" means (i) a Lender; (ii) an Affiliate of a Lender; and
(iii) any other Person approved by the Agent (such approval not to be
unreasonably withheld or delayed) and, unless an Event of Default has occurred
and is continuing at the time any assignment is effected in accordance with
Section 11.3, the Borrower (such approval not to be unreasonably withheld or
delayed by the Borrower and such approval to be deemed given by the Borrower if
no objection is received by the assigning Lender and the Agent from the Borrower
within five Business Days after notice of such proposed assignment has been
provided by the assigning Lender to the Borrower); PROVIDED, HOWEVER, that
neither the Borrower nor an Affiliate of the Borrower shall qualify as an
Eligible Assignee.
"ENVIRONMENTAL LAWS" means any and all lawful and applicable Federal,
state, local and foreign statutes, laws, regulations, ordinances, rules,
judgments, orders, decrees, permits,
13
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.
"EQUIPMENT APPRAISAL" means an appraisal of the Rental Equipment performed
by an appraiser selected by the Agent and the Borrower, in form and substance
satisfactory to the Agent.
"EQUIPMENT HELD FOR RESALE" means all of each Credit Party's Inventory
consisting of new equipment less than one year old which is held for resale or
held for lease by such Credit Party; PROVIDED, HOWEVER, such equipment held for
lease by such Credit Party shall become "Rental Equipment" and no longer be
"Equipment Held for Resale" upon the leasing of such equipment by such Credit
Party.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto, as interpreted by the rules and
regulations thereunder, all as the same may be in effect from time to time.
References to sections of ERISA shall be construed also to refer to any
successor sections.
"ERISA AFFILIATE" means an entity which is under common control with any
Consolidated Party within the meaning of Section 4001(a)(14) of ERISA, or is a
member of a group which includes any Consolidated Party and which is treated as
a single employer under Sections 414(b) or (c) of the Code.
"ERISA EVENT" means (i) with respect to any Plan, the occurrence of a
Reportable Event or the substantial cessation of operations (within the meaning
of Section 4062(e) of ERISA); (ii) the withdrawal by any Consolidated Party or
any ERISA Affiliate from a Multiple Employer Plan during a plan year in which it
was a substantial employer (as such term is defined in Section 4001(a)(2) of
ERISA), or the termination of a Multiple Employer Plan; (iii) the distribution
of a notice of intent to terminate or the actual termination of a Plan pursuant
to Section 4041(a)(2) or 4041A of ERISA; (iv) the institution of proceedings to
terminate or the actual termination of a Plan by the PBGC under Section 4042 of
ERISA; (v) any event or condition which might constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan; (vi) the complete or partial withdrawal of any
Consolidated Party or any ERISA Affiliate from a Multiemployer Plan; (vii) the
conditions for imposition of a lien under Section 302(f) of ERISA exist with
respect to any Plan; or (viii) the adoption of an amendment to any Plan
requiring the provision of security to such Plan pursuant to Section 307 of
ERISA.
"EURODOLLAR LOAN" means any Loan that bears interest at a rate based upon
the Eurodollar Rate.
14
"EURODOLLAR RATE" means, for any Eurodollar Loan for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) determined by the Agent to be equal to the quotient obtained by
dividing (a) the Interbank Offered Rate for such Eurodollar Loan for such
Interest Period by (b) 1 minus the Eurodollar Reserve Requirement for such
Eurodollar Loan for such Interest Period.
"EURODOLLAR RESERVE REQUIREMENT" means, at any time, the maximum rate at
which reserves (including, without limitation, any marginal, special,
supplemental, or emergency reserves) are required to be maintained under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System (or any successor) by member banks of the Federal Reserve System
against "Eurodollar liabilities" (as such term is used in Regulation D). Without
limiting the effect of the foregoing, the Eurodollar Reserve Requirement shall
reflect any other reserves required to be maintained by such member banks with
respect to (i) any category of liabilities which includes deposits by reference
to which the Adjusted Eurodollar Rate is to be determined, or (ii) any category
of extensions of credit or other assets which include Eurodollar Loans. The
Adjusted Eurodollar Rate shall be adjusted automatically on and as of the
effective date of any change in the Eurodollar Reserve Requirement.
"EVENT OF DEFAULT" has the meaning ascribed to such term in Section 9.1.
"EXECUTIVE OFFICER" of any Person means any of the chief executive officer,
chief operating officer, president, vice president, chief financial officer or
treasurer of such Person.
"EXISTING
CREDIT AGREEMENT" means that certain Credit Agreement dated as of
July 17, 1998, as amended from time to time thereafter, among the Borrower, the
guarantors party thereto, the lenders party thereto and First Union National
Bank, as agent for such Lenders.
"FEES" means all fees payable pursuant to Section 3.5.
"FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of
New York on the Business Day next succeeding such
day; PROVIDED that (a) if such day is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate charged to the Agent (in its
individual capacity) on such day on such transactions as determined by the
Agent.
"FIRST UNION ACCOUNT" means the deposit account, established and maintained
in the name of the Agent at First Union, for the benefit of the Lenders, in
connection with this Agreement and the other Credit Documents.
15
"FIXED CHARGE COVERAGE RATIO" means, as of the last day of each fiscal
quarter, the ratio of Consolidated EBITDA MINUS Consolidated Cash Taxes, cash
dividends and Consolidated Net Capital Expenditures (each computed for the four
fiscal quarters then ending) to Consolidated Fixed Charges (computed for the
four fiscal quarters then ending).
"FOREIGN SUBSIDIARY" means, with respect to any Person, any Subsidiary of
such Person which is not a Domestic Subsidiary of such Person.
"FUNDED INDEBTEDNESS" means, with respect to any Person, without
duplication, (a) all Indebtedness of such Person other than Indebtedness of the
types referred to in clause (e), (f), (g), (i) and (m) of the definition of
"Indebtedness" set forth in this Section 1.1, (b) all Indebtedness of another
Person of the type referred to in clause (a) above secured by (or for which the
holder of such Funded 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, (c) all Guaranty Obligations of
such Person with respect to Indebtedness of the type referred to in clause (a)
above of another Person and (d) Indebtedness 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 and is legally obligated or has
a reasonable expectation of being liable with respect thereto.
"GAAP" means generally accepted accounting principles in the United States
applied on a consistent basis and subject to the terms of Section 1.3.
"▇▇▇▇▇▇ ▇▇▇▇▇" means Golder, Thoma, Cressey, Rauner, Inc., and its
successors and permitted assigns.
"GOVERNMENTAL AUTHORITY" means any Federal, state, local or foreign court
or governmental agency, authority, instrumentality or regulatory body.
"GUARANTORS" means a collective reference to each of the Subsidiary
Guarantors, together with their successors and permitted assigns, and
"GUARANTOR" means any one of them.
"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 condition of such
other Person (including without limitation keep well agreements, maintenance
agreements, comfort letters or similar agreements or arrangements) for the
benefit of any holder of Indebtedness of such other Person, (iii) to lease or
purchase Property, securities or services primarily for the purpose of assuring
the holder of such Indebtedness, or (iv) to otherwise assure or hold harmless
the holder of such Indebtedness against loss in respect thereof. The amount
16
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.
"HEDGING AGREEMENTS" means any interest rate protection agreement or
foreign currency exchange agreement between Borrower and any Lender, or any
Affiliate of a Lender.
"INDEBTEDNESS" means, with respect to any Person, without duplication, (a)
all obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, or upon
which interest payments are customarily made, (c) all obligations of such Person
under conditional sale or other title retention agreements relating to Property
purchased by such Person (other than customary reservations or retentions of
title under agreements with suppliers entered into in the ordinary course of
business), (d) all obligations of such Person issued or assumed as the deferred
purchase price of Property or services purchased by such Person (other than
trade debt incurred in the ordinary course of business and due within six months
of the incurrence thereof) which would appear as liabilities on a balance sheet
of such Person, (e) all obligations of such Person under take-or-pay or similar
arrangements or under commodities agreements, (f) all Indebtedness of others
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on, or payable out of the
proceeds of production from, Property owned or acquired by such Person, whether
or not the obligations secured thereby have been assumed, (g) all Guaranty
Obligations of such Person, (h) the principal portion of all obligations of such
Person under Capital Leases, (i) all obligations of such Person under Hedging
Agreements or other interest rate protection agreements or other 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 required by the terms
thereof to be redeemed or for which mandatory sinking fund payments are due on
or prior to the Maturity Date and all preferred Capital Stock issued by a Person
which has a current pay coupon, (l) the principal portion of all obligations of
such Person under Synthetic Leases and (m) the Indebtedness of any partnership
or unincorporated joint venture in which such Person is a general partner or a
joint venturer.
"INTERBANK OFFERED RATE" means, for any Eurodollar 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; PROVIDED, HOWEVER, if more
than one rate is specified on Telerate Page 3750, 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 such rate is not available, the term
"Interbank Offered Rate" means, for any Eurodollar 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
17
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%).
"INTEREST COVERAGE RATIO" means the ratio of Consolidated EBITDA (computed
for the four fiscal quarters then ending) to Consolidated Interest Expense
payable in cash (computed for the four fiscal quarters then ending.
"INTEREST PAYMENT DATE" means (a) as to Base Rate Loans (including
Swingline Loans), the last day of each month, the date of repayment of principal
of such Loan and the Maturity Date and (b) as to Eurodollar Loans, the last day
of each applicable Interest Period, the date of repayment of principal of such
Loan and the Maturity Date, and in addition where the applicable Interest Period
for a Eurodollar Loan is greater than three months, then also the date three
months from the beginning of the Interest Period and each three months
thereafter.
"INTEREST PERIOD" means, as to Eurodollar Loans, a period of one, two,
three or six months' duration, as the Borrower may elect, commencing, in each
case, on the date of the borrowing (including continuations and conversions
thereof); PROVIDED, HOWEVER, (a) if any Interest Period would end on a day which
is not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day (except that where the next succeeding Business Day
falls in the next succeeding calendar month, then on the next preceding Business
Day), (b) no Interest Period shall extend beyond the Maturity Date, and (c)
where an Interest Period begins on a day for which there is no numerically
corresponding day in the calendar month in which the Interest Period is to end,
such Interest Period shall end on the last Business Day of such calendar month.
"INTEREST-RENTAL EXPENSE COVERAGE RATIO" means, as of the last day of each
fiscal quarter, the ratio of Consolidated EBITDAR (computed for the four fiscal
quarters then ending) to the sum of Consolidated Interest Expense and
Consolidated Rental Expense (each computed for the four fiscal quarters then
ending).
"INVENTORY" means all of each Credit Party's inventory, including without
limitation, (i) all raw materials, work in process, parts, components,
assemblies, supplies and materials used or consumed in the Credit Parties'
business; (ii) all goods, wares and merchandise, finished or unfinished, held
for sale or lease or leased or furnished or to be furnished under contracts of
service; and (iii) all goods returned to or repossessed by the Credit Parties.
"INVESTMENT" means (a) the acquisition (whether for cash, property,
services, assumption of Indebtedness, securities or otherwise) of assets,
Capital Stock, bonds, notes, debentures, partnership, joint ventures or other
ownership interests or other securities of any Person or (b) any deposit with,
or advance, loan or other extension of credit to, any Person (other than
deposits made in connection with the purchase of equipment or other assets in
the ordinary course of business) or (c) any other capital contribution to or
investment in any Person, including, without limitation, any Guaranty
Obligations (including any support for a letter of credit issued on behalf of
such Person) incurred for the benefit of such Person.
18
"ISSUING LENDER" means First Union National Bank.
"ISSUING LENDER FEES" has the meaning ascribed to such term in SECTION
3.5(b)(iii).
"JOINDER AGREEMENT" means a Joinder Agreement substantially in the form of
EXHIBIT 7.12 hereto, executed and delivered by an Additional Credit Party in
accordance with the provisions of SECTION 7.12.
"LANDLORD AGREEMENTS" means the Landlord Lien Waiver Agreements,
substantially in the form of EXHIBIT 1A hereto, between each Credit Party's
landlords and the Agent, in each case acknowledging and agreeing, among other
things, (i) that such landlords do not have any Liens on any of the property of
any Credit Party or any Subsidiary and (ii) to permit the Agent access to the
property for the purposes of exercising its remedies under the Security
Agreement.
"LENDER" means any of the Persons identified as a "Lender" on the signature
pages hereto, and any Person which may become a Lender by way of assignment in
accordance with the terms hereof, together with their successors and permitted
assigns.
"LETTER OF CREDIT" means any letter of credit issued by the Issuing Lender
for the account of the Borrower in accordance with the terms of SECTION 2.2 and
the letters of credit listed on SCHEDULE 8.1.
"LIEN" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, security interest, encumbrance, lien (statutory or otherwise),
preference, priority or charge of any kind (including any agreement to give any
of the foregoing, any conditional sale or other title retention agreement, any
financing or similar statement or notice filed under the Uniform Commercial Code
as adopted and in effect in the relevant jurisdiction or other similar recording
or notice statute, and any lease in the nature thereof).
"LOAN" or "LOANS" means the Revolving Loans and/or the Term Loan (or a
portion of any Revolving Loan or Term Loan) bearing interest at the Adjusted
Base Rate or the Adjusted Eurodollar Rate and/or any Swingline Loans,
individually or collectively, as appropriate.
"LOC COMMITMENT" means the commitment of the Issuing Lender to issue
Letters of Credit, and to honor payment obligations under, Letters of Credit
hereunder in an aggregate stated amount at any time outstanding (together with
the amounts of any unreimbursed drawings thereon) of up to the LOC Committed
Amount and with respect to each Lender, the commitment of each Lender to
purchase participation interests in the Letters of Credit.
"LOC COMMITTED AMOUNT" has the meaning ascribed to such term in SECTION
2.2.
"LOC DOCUMENTS" means, 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
19
applicable only to such Letter of Credit) governing or providing for (i) the
rights and obligations of the parties concerned or at risk or (ii) any
collateral security for such obligations.
"LOC OBLIGATIONS" means, 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 by the Borrower.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the
condition (financial or otherwise), operations, business, assets, liabilities or
prospects of the Consolidated Parties, taken as a whole, (ii) the ability of any
Credit Party to perform any obligation under the Credit Documents to which it is
a party, (iii) the material rights and remedies of the Lenders under the Credit
Documents or (iv) the Collateral taken as a whole, in each case determined by
the Agent in its reasonable discretion.
"MATERIAL CONTRACT" means any contract or other arrangement (other than any
leases of real property or the Credit Documents), whether written or oral, to
which any Consolidated Party 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" means 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 Laws, including, without limitation, asbestos,
polychlorinated biphenyls and urea-formaldehyde insulation.
"MATURITY DATE" means July 17, 2003.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc., or any successor or
assignee of the business of such company in the business of rating securities.
"MORTGAGES" means the mortgages granted by the Credit Parties in favor of
the Agent to secure the Credit Party Obligations on all owned Real Estate.
"MORTGAGED REAL ESTATE" means any Real Estate subject to a Mortgage.
"MULTIEMPLOYER PLAN" means a Plan which is a multiemployer plan as defined
in Sections 3(37) or 4001(a)(3) of ERISA.
"MULTIPLE EMPLOYER PLAN" means a Plan which any Consolidated Party or any
ERISA Affiliate and at least one employer other than the Consolidated Parties or
any ERISA Affiliate are contributing sponsors.
20
"NES" means the Borrower and the Guarantors as constituted immediately
prior to the consummation of the Brambles Acquisition.
"NET CASH PROCEEDS" means the aggregate cash proceeds received by the
Consolidated Parties in respect of any Asset Disposition, net of (a) direct
costs (including, without limitation, legal, accounting and investment banking
fees, and sales commissions), (b) taxes paid or payable as a result thereof and
(c) reasonable reserves established for indemnification obligations in
connection with such Asset Disposition; it being understood that "Net Cash
Proceeds" shall include, without limitation, any cash received upon the sale or
other disposition of any non-cash consideration received by the Consolidated
Parties in any Asset Disposition.
"NON-SERIALIZED ELIGIBLE RENTAL EQUIPMENT" means Eligible Rental Equipment
other than Serialized Eligible Rental Equipment and shall consist of (i) on the
Amendment No.5 Effective Date and at all times thereafter, the Non-Serialized
Eligible Rent Equipment of NES, (ii) on the Amendment No.5 Effective Date and
until completion of an initial Equipment Appraisal thereof, the Traffic Safety
and Trench Shoring Equipment, and (iii) all Non-Serialized Eligible Rental
Equipment acquired by Brambles after the Amendment No. 5 Effective Date.
"NOTE" or "NOTES" means the Revolving Notes, the Swingline Note and/or the
Term Notes, individually or collectively, as appropriate.
"NOTICE OF BORROWING" means a written notice of borrowing in substantially
the form of EXHIBIT 2.1(b)(i), as required by Section 2.1(b)(i).
"NOTICE OF EXTENSION/CONVERSION" means the written notice of extension or
conversion in substantially the form of EXHIBIT 3.2, as required by Section 3.2.
"OPERATING LEASE" means, as applied to any Person, any lease (including,
without limitation, leases which may be terminated by the lessee at any time) of
any Property (whether real, personal or mixed) which is not a Capital Lease
other than any such lease in which that Person is the lessor.
"OPERATING REGION REPRESENTATIVE" means the regional financial manager of
an Operating Region employed by the Borrower or one of the Guarantors
responsible for the financial matters of an Operating Region.
"OPERATING REGIONS" means each of the following geographical operating
regions of the Borrower and the Guarantors: East, Northcentral, Southcentral,
Gulf Coast, Trench Shoring, Traffic Safety and West.
"ORIGINAL BRAMBLES ELIGIBLE RENTAL EQUIPMENT" means the Eligible Rental
Equipment of Brambles as of the Amendment No. 5 Effective Date.
"OTHER TAXES" has the meaning ascribed to such term in SECTION 3.11.
21
"ORDERLY LIQUIDATION VALUE" means with respect to the Rental Equipment, the
orderly liquidation value of the Rental Equipment as set forth in the most
recent Equipment Appraisal relating thereto delivered to and accepted by the
Agent in accordance with the terms of this Credit Agreement.
"PARTICIPATION INTEREST" means a purchase by a Lender of a participation in
Letters of Credit or LOC Obligations as provided in SECTION 2.2, in Swingline
Loans as provided in SECTION 2.3 or in any Loans as provided in SECTION 3.14.
"PARTS AND SUPPLIES INVENTORY" means all of each Credit Party's Inventory
consisting of parts and supplies.
"PAYMENT DIRECTION NOTICE" has the meaning ascribed to such term in SECTION
3.16(a).
"PBGC" means the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA and any successor thereof.
"PERMITTED ACQUISITION" means (a) the Brambles Acquisition and (b) with the
prior written consent of the Agent and the Required Lenders, any other
Acquisition by any Credit Party.
"PERMITTED INVESTMENTS" means Investments which are either (i) cash and
Cash Equivalents; (ii) accounts receivable created, acquired or made by any
Consolidated Party in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms; (iii) Investments
consisting of Capital Stock, obligations, securities or other property received
by any Consolidated Party in settlement of accounts receivable (created in the
ordinary course of business) from bankrupt obligors; (iv) Investments existing
as of the Closing Date and set forth in SCHEDULE 1.1(a), (v) Guaranty
Obligations permitted by SECTION 8.1; (vi) advances or loans to directors or
officers that do not exceed $500,000 in the aggregate at any one time
outstanding for all of the Consolidated Parties for the purchase of Capital
Stock of the Borrower; (vii) Investments in any Credit Party, (viii) advances to
officers, directors and employees for travel, entertainment or other
business-related expenses incurred or anticipated to be incurred in the ordinary
course of business, (ix) promissory notes and other instruments received by a
Credit Party as consideration in connection with asset sales permitted hereunder
and (x) Permitted Acquisitions.
"PERMITTED LIENS" means:
(i) Liens in favor of the Agent to secure the Credit Party
Obligations;
(ii) Liens (other than Liens created or imposed under ERISA) for
taxes, assessments or governmental charges or levies not yet due or Liens
for taxes being contested in good faith by appropriate proceedings for
which adequate reserves determined in accordance with GAAP have been
established (and as to which the Property subject to any such Lien is not
yet subject to foreclosure, sale or loss on account thereof);
22
(iii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and suppliers and other Liens imposed
by law or pursuant to customary reservations or retentions of title arising
in the ordinary course of business, PROVIDED that such Liens secure only
amounts not yet due and payable or, if due and payable, are unfiled and no
other action has been taken to enforce the same or are being contested in
good faith by appropriate proceedings for which adequate reserves
determined in accordance with GAAP have been established (and as to which
the Property subject to any such Lien is not yet subject to foreclosure,
sale or loss on account thereof);
(iv) Liens (other than Liens created or imposed under ERISA)
incurred or deposits made by any Consolidated Party in the ordinary course
of business in connection with workers' compensation, unemployment
insurance and other types of social security, or to secure the performance
of tenders, statutory obligations, bids, leases, government contracts,
performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money);
(v) Liens in connection with attachments or judgments (including
judgment or appeal bonds) PROVIDED that the judgments secured shall, within
30 days after the entry thereof, have been discharged or execution thereof
stayed pending appeal, or shall have been discharged within 30 days after
the expiration of any such stay;
(vi) easements, rights-of-way, restrictions (including zoning
restrictions), minor defects or irregularities in title and other similar
charges or encumbrances not, in any material respect, impairing the use of
the encumbered Property for its intended purposes;
(vii) Liens on Property of any Person securing purchase money
Indebtedness (including Capital Leases and Synthetic Leases) of such Person
to the extent permitted under Section 8.1(c), PROVIDED that any such Lien
attaches to such Property concurrently with or within 90 days after the
acquisition thereof;
(viii) leases or subleases granted to others not interfering in any
material respect with the business of any Consolidated Party;
(ix) liens evidenced by precautionary filings of lessors under
operating leases;
(x) normal and customary rights of setoff upon deposits of cash in
favor of banks or other depository institutions; and
(xi) Liens existing as of the Closing Date and set forth on SCHEDULE
1.1(b); PROVIDED that (a) no such Lien shall at any time be extended to or
cover any Property other than the Property 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.
23
"PERSON" means any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other enterprise
(whether or not incorporated) or any Governmental Authority.
"PLAN" means any employee benefit plan (as defined in Section 3(3) of
ERISA) which is covered by ERISA and with respect to which any Consolidated
Party or any ERISA Affiliate is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" within the
meaning of Section 3(5) of ERISA.
"PLEDGE AGREEMENT" means the amended and restated pledge agreement dated as
of the Closing Date executed in favor of the Agent by each of the Credit
Parties, as amended, modified, restated or supplemented from time to time.
"PORTFOLIO COMPANY" means any Affiliate of ▇▇▇▇▇▇ ▇▇▇▇▇ which is not in the
chain of ownership between the Borrower and any of its Subsidiaries and is not
part of the Borrower's consolidated financial group.
"PRIME RATE" means the per annum rate of interest established from time to
time by First Union National Bank as its prime rate, which rate may not be the
lowest rate of interest charged by First Union National Bank to its customers.
"PRO FORMA BASIS" means, with respect to any Permitted Acquisition or other
transaction permitted hereunder, that such Permitted Acquisition or other
transaction shall be deemed to have occurred as of the first day of the four
fiscal-quarter period ending as of the most recent fiscal quarter end preceding
the date of such Permitted Acquisition or other transaction. In connection with
any calculation of the financial covenants set forth in Section 7.11, upon
giving effect to a Permitted Acquisition or other transaction on a Pro Forma
Basis, any Indebtedness of the Acquired Company which is retired in connection
with such transaction, any Indebtedness incurred by a Credit Party to finance
such Permitted Acquisition or other transaction and any other financial
statement components shall be adjusted in a manner mutually satisfactory to the
Agent and the Borrower. For purposes of any such calculation, the principles set
forth in the second paragraph of Section 1.3 shall be applicable.
"PRO FORMA COMPLIANCE CERTIFICATE" means a certificate of an Executive
Officer of the Borrower delivered to the Agent in connection with a Permitted
Acquisition and containing reasonably detailed calculations, upon giving effect
to the applicable transaction on a Pro Forma Basis, of the financial covenants
set forth in Section 7.11 as of the most recent fiscal quarter end preceding the
date of such Permitted Acquisition.
"PROPERTY" means any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
"PURCHASERS" means The 1818 Fund III, L.P., Co-Investment Partners, L.P.,
Erie Indemnity Company, Erie Insurance Exchange and Aquila Limited Partnership.
24
"REAL ESTATE" means the real property owned or leased by the Credit Parties
described in SCHEDULE 6.7 attached hereto, together with all improvements and
structures thereon.
"REGISTER" has the meaning ascribed to such term in SECTION 11.3(c).
"REGULATION T, U, OR X" means Regulation T, U or X, respectively, of the
Board of Governors of the Federal Reserve System as from time to time in effect
and any successor to all or a portion thereof.
"RELEASE" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping or disposing into
the environment (including the abandonment or discarding of barrels, containers
and other closed receptacles) of any Materials of Environmental Concern.
"RENTAL EQUIPMENT" means all of each Credit Party's Inventory consisting of
equipment which is rented by such Credit Party in the ordinary course of
business or is held for lease by such Credit Party.
"REPORTABLE EVENT" means any of the events set forth in Section 4043(c) of
ERISA, other than those events as to which the notice requirement has been
waived by regulation.
"REQUIRED LENDERS" means, at any time, Lenders which are then in compliance
with their obligations hereunder (as determined by the Agent) and holding in the
aggregate at least 51% of (i) the Revolving Commitments (and Participation
Interests therein) and the outstanding Term Loan Commitments or (ii) if the
Commitments have been terminated, the outstanding Loans and Participation
Interests (including the Participation Interests of the Issuing Lender in any
Letters of Credit).
"REQUIREMENT OF LAW" means, as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and any 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 material property is subject.
"RESTRICTED PAYMENT" means (i) any dividend or other payment or
distribution, direct or indirect, on account of any shares of any class of
Capital Stock of any Consolidated Party, now or hereafter outstanding (including
without limitation any payment in connection with any merger or consolidation
involving any Consolidated Party), or to the direct or indirect holders of any
shares of any class of Capital Stock of any Consolidated Party, now or hereafter
outstanding, in their capacity as such (other than dividends or distributions
payable in the same class of Capital Stock of the applicable Person or to any
Credit Party (directly or indirectly through Subsidiaries)), (ii) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of Capital
Stock of any Consolidated Party, now or hereafter outstanding, (iii) any payment
made to retire, or to obtain the surrender of, any
25
outstanding warrants, options or other rights to acquire shares of any class of
Capital Stock of any Consolidated Party, now or hereafter outstanding and (iv)
any payment to any Affiliate of any Credit Party except to the extent expressly
permitted in this Credit Agreement.
"REVOLVING COMMITMENT" means, with respect to each Lender, the commitment
of such Lender in an aggregate principal amount at any time outstanding of up to
such Lender's Revolving Commitment Percentage of the Revolving Committed Amount,
(i) to make Revolving Loans in accordance with the provisions of Section 2.1(a),
(ii) to purchase Participation Interests in Letters of Credit in accordance with
the provisions of Section 2.2(c) and (iii) to purchase Participation Interests
in Swingline Loans in accordance with the provisions of Section 2.3(b).
"REVOLVING COMMITMENT PERCENTAGE" means, for any Lender, the percentage
identified as its Revolving Commitment Percentage on SCHEDULE 2.1(a), as such
percentage may be modified in connection with any assignment made in accordance
with the provisions of Section 11.3.
"REVOLVING COMMITTED AMOUNT" has the meaning ascribed to such term in
Section 2.1(a).
"REVOLVING LOANS" has the meaning ascribed to such term in Section 2.1(a).
"REVOLVING NOTE" or "REVOLVING NOTES" means the promissory notes of the
Borrower in favor of each of the Lenders evidencing the Revolving Loans provided
pursuant to Section 2.1(e), individually or collectively, as appropriate, as
such promissory notes may be amended, modified, restated, supplemented,
extended, renewed or replaced from time to time.
"REVOLVING OBLIGATIONS" means, collectively, the Revolving Loans, the
Swingline Loans and the LOC Obligations.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw Hill,
Inc., or any successor or assignee of the business of such division in the
business of rating securities.
"SALE AND LEASEBACK TRANSACTION" means any direct or indirect arrangement
with any Person or to which any such Person is a party, providing for the
leasing to any Consolidated Party of any Property, whether owned by such
Consolidated Party as of the Closing Date or later acquired, which has been or
is to be sold or transferred by such Consolidated Party to such Person or to any
other Person from whom funds have been, or are to be, advanced by such Person on
the security of such Property.
"SECURITY AGREEMENT" means the amended and restated security agreement
dated as of the Closing Date executed in favor of the Agent by each of the
Credit Parties, as amended, modified, restated or supplemented from time to
time.
"SENIOR DEBT LEVERAGE RATIO" means, as of the last day of each fiscal
quarter, the ratio of Consolidated Senior Indebtedness (computed as of the last
day of each such fiscal quarter) to Consolidated EBITDA (computed for the four
fiscal quarters then ending).
26
"SENIOR SUBORDINATED NOTES" means the aggregate $275,000,000 Senior
Subordinated Notes of the Borrower issued pursuant to the Indenture dated
November 25, 1997 and the Indenture dated December 11, 1998, as supplemented.
"SERIALIZED ELIGIBLE RENTAL EQUIPMENT" means Eligible Rental Equipment
marked with and identifiable by serial number and shall consist of (i) on the
Amendment No.5 Effective Date and at all times thereafter, the Serialized
Eligible Rent Equipment of NES, (ii) on and after the completion of an initial
Equipment Appraisal thereof, the Traffic Safety and Trench Shoring Equipment,
and (iii) all Serialized Eligible Rental Equipment acquired by Brambles after
the Amendment No. 5 Effective Date.
"SINGLE EMPLOYER PLAN" means any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan or a Multiple Employer Plan.
"SOLVENT" or "SOLVENCY" means, with respect to any Person as of a
particular date, that on such date (i) such Person is able to realize upon its
assets and pay its debts and other liabilities, contingent obligations and other
commitments as they mature in the normal course of business, (ii) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and liabilities
mature in their ordinary course, (iii) such Person is not engaged in a business
or a transaction, and is not about to engage in a business or a transaction, for
which such Person's Property would constitute unreasonably small capital after
giving due consideration to the prevailing practice in the industry in which
such Person is engaged or is to engage, (iv) the fair value of the Property of
such Person taken on a going concern basis is greater than the total amount of
liabilities, including, without limitation, contingent liabilities, of such
Person and (v) the present fair salable value of the assets of such Person taken
on a going concern basis is not less than the amount that will be required to
pay the probable liability of such Person on its debts as they become absolute
and matured. In computing the amount of contingent liabilities at any time, it
is intended that such liabilities will be computed at the amount which, in light
of all the facts and circumstances existing at such time, represents the amount
that can reasonably be expected to become an actual or matured liability.
"STANDBY LETTER OF CREDIT FEE" has the meaning ascribed to such term in
Section 3.5(b)(i).
"STOCK PURCHASE AGREEMENT" means the Stock Purchase Agreement dated as of
April 27, 1999 between the Borrower and the Purchasers.
"SUBORDINATED DEBT" means (a) the Senior Subordinated Notes and (b) any
other publicly-issued unsecured Indebtedness incurred by the Borrower, which is
expressly subordinated and made junior to the payment and performance in full of
the Credit Party Obligations and contains terms and conditions reasonably
satisfactory to the Required Lenders.
"SUBORDINATED PAYMENTS" means any fees, expenses or other payments incurred
or owing by any Credit Party, which, in each case, are specifically subordinated
in right of payment to the
27
prior payment of the Credit Party Obligations on terms and conditions
satisfactory to the Required Lenders.
"SUBSIDIARY" means, 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, limited liability company or other entity of which such Person directly
or indirectly through Subsidiaries owns at such time more than 50% of the
Capital Stock.
"SUBSIDIARY GUARANTOR" means each of the Persons identified as a
"Subsidiary Guarantor" on the signature pages hereto and each Subsidiary of a
Credit Party which may hereafter execute a Joinder Agreement, together with
their successors and permitted assigns, and "SUBSIDIARY GUARANTOR" means any one
of them.
"SWINGLINE COMMITMENT" means the commitment of the Swingline Lender to make
Swingline Loans in an aggregate principal amount at any time outstanding of up
to the Swingline Committed Amount.
"SWINGLINE COMMITTED AMOUNT" has the meaning ascribed to such term in
Section 2.3(a).
"SWINGLINE LENDER" means First Union National Bank.
"SWINGLINE LOAN" has the meaning ascribed to such term in Section 2.3(a).
"SWINGLINE NOTE" means the promissory note of the Borrower in favor of the
Swingline Lender in the original principal amount of $5,000,000, as such
promissory note may be amended, modified, restated or replaced from time to
time.
"SYNTHETIC LEASE" means any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product where such
transaction is considered borrowed money indebtedness for tax purposes but is
classified as an Operating Lease.
"TAXES" has the meaning ascribed to such term in Section 3.11.
"TERM LOAN" has the meaning ascribed to such term in Section 2.4(a).
"TERM LOAN COMMITMENT" means, with respect to each Lender, the commitment
of such Lender to make its portion of the Term Loan in a principal amount equal
to such Lender's Term Loan Commitment Percentage of the Term Loan Committed
Amount.
28
"TERM LOAN COMMITMENT PERCENTAGE" means, for any Lender, the percentage
identified as its Term Loan Commitment Percentage on SCHEDULE 2.1(a), as such
percentage may be modified in connection with any assignment made in accordance
with the provisions of Section 11.3.
"TERM LOAN COMMITTED AMOUNT" has the meaning ascribed to such term in
Section 2.4(a).
"TERM NOTE" or "TERM NOTES" means the promissory notes of the Borrower in
favor of each of the Lenders evidencing the Term Loan provided pursuant to
Section 2.4(f), individually or collectively, as appropriate, as such promissory
notes may be amended, modified, restated, supplemented, extended, renewed or
replaced from time to time.
"TOTAL DEBT LEVERAGE RATIO" means, as of the last day of each fiscal
quarter of the Borrower, the ratio of Consolidated Funded Indebtedness to
Consolidated EBITDA (computed for the four fiscal quarters then ending).
"TRADE LETTER OF CREDIT FEE" has the meaning ascribed to such term in
Section 3.5(b)(ii).
"TRAFFIC SAFETY AND TRENCH SHORING EQUIPMENT" means the Rental Equipment of
the Credit Parties consisting of traffic safety and trench shoring equipment.
"UNUSED LINE FEE" has the meaning ascribed to such term in Section 3.5(a).
"UNUSED LINE FEE CALCULATION PERIOD" has the meaning ascribed to such term
in Section 3.5(a).
"UNUSED REVOLVING COMMITTED AMOUNT" means, for any period, the amount by
which (a) the then applicable Revolving Committed Amount exceeds (b) the daily
average sum for such period of (i) the outstanding aggregate principal amount of
all Revolving Loans PLUS (ii) the outstanding aggregate principal amount of all
LOC Obligations.
"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.
"WHOLLY OWNED SUBSIDIARY" of any Person means any Subsidiary 100% of whose
Voting Stock is at the time owned by such Person directly or indirectly through
other Wholly Owned Subsidiaries.
1.2 COMPUTATION OF TIME PERIODS.
For purposes of computation of periods of time hereunder, the word "from"
means "from and including" and the words "to" and "until" each mean "to but
excluding."
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1.3 ACCOUNTING TERMS.
Unless otherwise defined or specified herein, all accounting terms shall be
construed herein and all accounting determinations for purposes of determining
compliance with Section 7.11 hereof and otherwise to be made under this Credit
Agreement shall be made in accordance with GAAP applied on a basis consistent in
all material respects with the financial statements delivered pursuant to
Section 5.1(c) (the "FINANCIALS"). All financial statements required to be
delivered hereunder from and after the Amendment No. 5 Effective Date and all
financial records shall be maintained in accordance with GAAP as in effect as of
the date of the Financials. If GAAP shall change from the basis used in
preparing the Financials, the certificates required to be delivered pursuant to
Section 7.1 demonstrating compliance with the covenants contained herein shall
include calculations setting forth the adjustments necessary to demonstrate how
the Consolidated Parties are in compliance with the financial covenants based
upon GAAP as in effect on the Amendment No. 5 Effective Date. If the Credit
Parties shall change their method of inventory accounting, all calculations
necessary to determine compliance with the covenants contained herein shall be
made as if such method of inventory accounting had not been so changed.
Notwithstanding the above, the parties hereto acknowledge and agree that,
for purposes of all calculations made in determining compliance for any
applicable period with the financial covenants set forth in Section 7.11
(including without limitation for purposes of the definitions of "Applicable
Percentage" and "Pro Forma Basis" set forth in Section 1.1), any Indebtedness of
an Acquired Company which is retired in connection with a Permitted Acquisition
shall be excluded from such calculations and deemed to have been retired as of
the first day of such applicable period and income statement items and other
balance sheet items (whether positive or negative) attributable to the Acquired
Company acquired in such transaction shall be included in such calculations to
the extent relating to such applicable period, subject to adjustments mutually
acceptable to the Agent and the Borrower.
SECTION 2
CREDIT FACILITIES
2.1 REVOLVING LOANS.
(a) REVOLVING COMMITMENT. Subject to the terms and conditions
hereof and in reliance upon the representations and warranties set forth
herein, each Lender severally agrees to make available to the Borrower such
Lender's Revolving Commitment Percentage of revolving credit loans
requested by the Borrower in Dollars ("REVOLVING LOANS") from time to time
from the Closing Date until the Maturity Date, or such earlier date as the
Revolving Commitments shall have been terminated as provided herein;
PROVIDED, HOWEVER, that (i) with regard to the Lenders collectively, the
amount of Revolving Obligations outstanding shall not exceed the lesser of
(A) FIVE HUNDRED FIFTY
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MILLION DOLLARS ($550,000,000) (as such aggregate maximum amount may be
reduced from time to time as provided in Section 3.4, the "REVOLVING
COMMITTED AMOUNT") and (B) the Borrowing Base LESS the outstanding Term
Loan; PROVIDED, FURTHER, (ii) with regard to each Lender individually, the
amount of such Lender's Revolving Commitment Percentage of the sum of the
Revolving Loans PLUS LOC Obligations PLUS Swingline Loans outstanding shall
not exceed such Lender's Revolving Committed Amount. Revolving Loans may
consist of Base Rate Loans or Eurodollar Loans, or a combination thereof,
as the Borrower may request; PROVIDED, HOWEVER, that no more than ten (10)
Eurodollar Loans shall be outstanding hereunder at any time, of which no
more than seven (7) of such Eurodollar Loans shall be Revolving Loans (it
being understood that, for purposes hereof, Eurodollar Loans with different
Interest Periods shall be considered as separate Eurodollar Loans, even if
they begin on the same date, 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 Eurodollar Loan
with a single Interest Period). Revolving Loans hereunder may be repaid and
reborrowed in accordance with the provisions hereof.
(b) REVOLVING LOAN BORROWINGS.
(i) NOTICE OF BORROWING. The Borrower shall request a
Revolving Loan borrowing by written notice (or telephonic notice
promptly confirmed in writing) to the Agent not later than 12:00 P.M.
(Charlotte, North Carolina time) on the Business Day of the requested
borrowing in the case of Base Rate Loans, and on the third Business
Day prior to the date of the requested borrowing in the case of
Eurodollar Loans. Each such request for borrowing shall be
irrevocable and shall specify (A) that a Revolving Loan is requested,
(B) the date of the requested borrowing (which shall be a Business
Day), (C) the aggregate principal amount to be borrowed, and (D)
whether the borrowing shall be comprised of Base Rate Loans,
Eurodollar Loans or a combination thereof, and if Eurodollar Loans
are requested, the Interest Period(s) therefor. If the Borrower shall
fail to specify in any such Notice of Borrowing (I) an applicable
Interest Period in the case of a Eurodollar Loan, then such notice
shall be deemed to be a request for an Interest Period of one month,
or (II) the type of Revolving Loan requested, then such notice shall
be deemed to be a request for a Base Rate Loan hereunder. The Agent
shall give notice to each affected Lender promptly upon receipt of
each Notice of Borrowing pursuant to this Section 2.1(b)(i), the
contents thereof and each such Lender's share of any borrowing to be
made pursuant thereto.
(ii) MINIMUM AMOUNTS. Each Revolving Loan that is a Base Rate
Loan shall be in a minimum aggregate principal amount of $1,000,000
and integral multiples of $1,000,000 in excess thereof (or the
remaining amount of the Revolving Committed Amount, if less). Each
Revolving Loan that is a Eurodollar Loan shall be in a minimum
aggregate principal amount of $5,000,000 and integral multiples of
$1,000,000 in excess thereof.
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(iii) ADVANCES. Each Lender will make its Revolving Commitment
Percentage of each Revolving Loan borrowing available to the Agent
for the account of the Borrower as specified in Section 3.15(a), or
in such other manner as the Agent may specify 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 Agent. Such borrowing will then be made available to
the Borrower by the Agent by crediting the account of the Borrower on
the books of such office with the aggregate of the amounts made
available to the Agent by the Lenders and in like funds as received
by the Agent.
(c) REPAYMENT. The principal amount of all Revolving Loans shall be
due and payable in full on the Maturity Date, unless accelerated sooner
pursuant to Section 9.2.
(d) INTEREST. Subject to the provisions of Section 3.1,
(i) BASE RATE LOANS. During such periods as Revolving Loans
shall be comprised in whole or in part of Base Rate Loans, such Base
Rate Loans shall bear interest at a per annum rate equal to the
Adjusted Base Rate.
(ii) EURODOLLAR LOANS. During such periods as Revolving Loans
shall be comprised in whole or in part of Eurodollar Loans, such
Eurodollar Loans shall bear interest at a per annum rate equal to the
Adjusted Eurodollar Rate.
Interest on Revolving Loans shall be payable in arrears on each applicable
Interest Payment Date (or at such other times as may be specified herein).
(e) REVOLVING NOTES. The Revolving Loans made by each Lender shall
be evidenced by a duly executed promissory note of the Borrower to such
Lender in an original principal amount equal to such Lender's Revolving
Commitment Percentage of the Revolving Committed Amount and in
substantially the form of Exhibit 2.1(e).
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 and in reliance upon the representations and
warranties set forth herein, the Issuing Lender agrees to issue, and each
Lender severally agrees to participate in the issuance by the Issuing
Lender of Letters of Credit in Dollars from time to time from the Closing
Date until the Maturity Date as the Borrower may request, in a form
acceptable to the Issuing Lender; PROVIDED, HOWEVER, that (i) the LOC
Obligations outstanding shall not at any time exceed TWENTY-FIVE MILLION
DOLLARS ($25,000,000) (the "LOC COMMITTED AMOUNT"), (ii) with regard to the
Lenders collectively, the amount of the Revolving Obligations shall not
exceed the lesser of (A) the Revolving Committed Amount
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and (B) the Borrowing Base LESS the outstanding Term Loan and (iii) with
regard to each Lender individually, the amount of such Lender's Revolving
Commitment Percentage of the sum of Revolving Loans PLUS LOC Obligations
PLUS Swingline Loans outstanding shall not exceed such Lender's Revolving
Commitment Percentage of the Revolving Committed Amount. No Letter of
Credit shall (x) have an original expiry date more than one year from the
date of issuance or (y) as originally issued or as extended, have an expiry
date extending beyond the Maturity Date. Each Letter of Credit shall comply
with the related LOC Documents. The issuance and expiry dates of each
Letter of Credit shall be a Business Day.
(b) NOTICE AND REPORTS. The request for the issuance of a Letter of
Credit shall be submitted by the Borrower to the Issuing Lender at least
three (3) Business Days prior to the requested date of issuance. The
Issuing Lender will, at least quarterly and more frequently upon request,
disseminate to each of 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 the prior report,
and including therein, among other things, the beneficiary, the face amount
and the expiry date, as well as any payment or expirations which may have
occurred.
(c) PARTICIPATION. Each Lender, upon issuance of a Letter of
Credit, shall be deemed to have purchased without recourse a Participation
Interest 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 pro rata share of the obligations under such
Letter of Credit (based on the respective Revolving Commitment Percentages
of the Lenders) and shall absolutely, unconditionally and irrevocably
assume and be obligated to pay to the Issuing Lender and discharge when
due, its pro rata share of the obligations arising in connection with such
Letter of Credit. Without limiting the scope and nature of each Lender's
Participation Interest in any Letter of Credit, to the extent that the
Issuing Lender has not been reimbursed as required hereunder or under any
such Letter of Credit, each such Lender shall pay to the Issuing Lender its
pro rata share 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) below. 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. Unless the
Borrower shall immediately notify the Issuing Lender that the Borrower
intends to otherwise reimburse the Issuing Lender for such drawing, the
Borrower shall be deemed to have requested that the Lenders make a
Revolving Loan in the amount of the drawing as provided in subsection (e)
below on the related Letter of Credit, the proceeds of which will be used
to satisfy the related reimbursement obligations. The Borrower promises to
reimburse the Issuing Lender on the
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day of drawing under any Letter of Credit (either with the proceeds of a
Revolving Loan obtained hereunder or otherwise) in same day funds. If the
Borrower shall fail to reimburse the Issuing Lender as provided
hereinabove, the unreimbursed amount of such drawing shall bear interest at
a per annum rate equal to the Adjusted Base Rate PLUS 2%. The Borrower's
reimbursement obligations hereunder shall be absolute and unconditional
under all circumstances irrespective of any rights of setoff, counterclaim
or defense to payment the Borrower may claim or have against the Issuing
Lender, the 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 or any other Credit Party 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 Agent for the account of the Issuing Lender in Dollars
and in immediately available funds, the amount of such Lender's pro rata
share of such unreimbursed drawing. Such payment shall be made on the day
such notice is received by such Lender from the Issuing Lender if such
notice is received at or before 2:00 P.M. (Charlotte, North Carolina time)
otherwise such payment shall be made at or before 12:00 Noon (Charlotte,
North Carolina time) on the Business Day next succeeding the day such
notice is received. If such Lender does not pay such amount to the Issuing
Lender in full upon such request, such Lender shall, on demand, pay to the
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 that such Lender is required to
make payments of such amount pursuant to the preceding sentence, the
Federal Funds Rate and thereafter at a rate equal to the 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 Credit Agreement or the
Commitments hereunder, the existence of a Default or Event of Default or
the acceleration of the obligations of the Borrower hereunder and shall be
made without any offset, abatement, withholding or reduction whatsoever.
Simultaneously with the making of each such payment by a Lender to the
Issuing Lender, such Lender shall, automatically and without any further
action on the part of the Issuing Lender or such Lender, acquire a
Participation Interest in an amount equal to such payment (excluding the
portion of such payment constituting interest owing to the Issuing Lender)
in the related unreimbursed drawing portion of the LOC Obligation and in
the interest thereon and in the related LOC Documents, and shall have a
claim against the Borrower with respect thereto.
(e) REPAYMENT WITH REVOLVING LOANS. On any day on which the
Borrower shall have requested, or been deemed to have requested, a
Revolving Loan advance to reimburse a drawing under a Letter of Credit, the
Agent shall give notice to the Lenders that a Revolving Loan has been
requested or deemed requested by the Borrower to be made in connection with
a drawing under a Letter of Credit, in which case a Revolving Loan advance
comprised of Base Rate Loans (or Eurodollar Loans to the extent the
Borrower has complied with the procedures of Section 2.1(b)(i) with respect
thereto) shall be immediately
34
made to the Borrower by all Lenders (notwithstanding any termination of the
Commitments pursuant to Section 9.2) PRO RATA based on the respective
Revolving Commitment Percentages of the Lenders (determined before giving
effect to any termination of the Commitments pursuant to Section 9.2) and
the proceeds thereof shall be paid directly to the Issuing Lender for
application to the respective LOC Obligations. Each such Lender hereby
irrevocably agrees to make its pro rata share of each such Revolving Loan
immediately upon any such request or deemed request in the amount, in the
manner and on the date specified in the preceding sentence NOTWITHSTANDING
(i) the amount of such borrowing may not comply with the minimum amount for
advances of Revolving Loans otherwise required hereunder, (ii) whether any
conditions specified in Section 5.2 are then satisfied, (iii) whether a
Default or an Event of Default then exists, (iv) failure for any such
request or deemed request for Revolving Loan to be made by the time
otherwise required hereunder, (v) whether the date of such borrowing is a
date on which Revolving Loans are otherwise permitted to be made hereunder
or (vi) any termination of the Commitments relating thereto immediately
prior to or contemporaneously with such borrowing. In the event that any
Revolving Loan 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 or any
other Credit Party), then each such Lender hereby agrees that it shall
forthwith purchase (as of the date such borrowing would otherwise have
occurred, but adjusted for any payments received from the Borrower on or
after such date and prior to such purchase) from the Issuing Lender such
Participation Interests in the outstanding LOC Obligations as shall be
necessary to cause each such Lender to share in such LOC Obligations
ratably (based upon the respective Revolving Commitment Percentages of the
Lenders (determined before giving effect to any termination of the
Commitments pursuant to Section 9.2)), PROVIDED that at the time any
purchase of Participation Interests pursuant to this sentence is actually
made, the purchasing Lender shall be required to pay to the Issuing Lender,
to the extent not paid to the Issuer by the Borrower in accordance with the
terms of subsection (d) above, interest on the principal amount of
Participation Interests purchased for each day from and including the day
upon which such borrowing would otherwise have occurred to but excluding
the date of payment for such Participation Interests, at the rate equal to,
if paid within two (2) Business Days of the date of the Revolving Loan
advance, the Federal Funds Rate, and thereafter at a rate equal to the Base
Rate. In the event that the Borrower pays any such interest on its
reimbursement obligations to the Issuing Lender following the payment by a
Lender of interest on the principal amount of the Participation Interest
purchased by such Lender in accordance with the foregoing, then the Issuing
Lender shall rebate to such Lender its pro rata share of the interest so
paid by the Borrower.
(f) DESIGNATION OF CREDIT PARTIES AS ACCOUNT PARTIES.
Notwithstanding anything to the contrary set forth in this Credit
Agreement, including without limitation Section 2.2(a), a Letter of Credit
issued hereunder may contain a statement to the effect that such Letter of
Credit is issued for the account of a Credit Party other than the Borrower,
provided that notwithstanding such statement, the Borrower shall be the
actual account party for all purposes of this Credit Agreement for such
Letter of Credit and such statement shall not
35
affect the Borrower's reimbursement obligations hereunder with respect to
such Letter of Credit.
(g) RENEWAL, EXTENSION. The renewal or extension of 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.
(h) UNIFORM CUSTOMS AND PRACTICES. The Issuing Lender shall have
the Letters of Credit be subject to The Uniform Customs and Practice for
Documentary Credits, as published as of the date of issue by the
International Chamber of Commerce (the "UCP"), in which case the UCP may be
incorporated therein and deemed in all respects to be a part thereof.
(i) INDEMNIFICATION; NATURE OF ISSUING LENDER'S DUTIES.
(i) In addition to its other obligations under this Section
2.2, the Borrower hereby agrees to pay, and protect, indemnify and
save each Lender harmless from and against, any and all claims,
demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable attorneys' fees) that such Lender may incur or
be subject to as a consequence, direct or indirect, of (A) the
issuance of any Letter of Credit or (B) the failure of such 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").
(ii) As between the Borrower and the Lenders (including the
Issuing Lender), the Borrower shall assume all risks of the acts,
omissions or misuse of any Letter of Credit by the beneficiary
thereof. No Lender (including the Issuing Lender) shall be
responsible: (A) 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; (B) 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; (C)
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; (D) 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 (E) for any consequences arising from causes beyond the
control of such 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.
36
(iii) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or
omitted by any Lender (including 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 Lender under any
resulting liability to the Borrower or any other Credit Party. It is
the intention of the parties that this Credit Agreement shall be
construed and applied to protect and indemnify each Lender (including
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 (on behalf of itself and each of the other
Credit Parties), including, without limitation, any and all
Government Acts. No Lender (including the Issuing Lender) shall, in
any way, be liable for any failure by such 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 such Lender.
(iv) Nothing in this subsection (i) is intended to limit the
reimbursement obligations of the Borrower contained in subsection (d)
above. The obligations of the Borrower under this subsection (i)
shall survive the termination of this Credit Agreement. No act or
omission of any current or prior beneficiary of a Letter of Credit
shall in any way affect or impair the rights of the Lenders
(including the Issuing Lender) to enforce any right, power or benefit
under this Credit Agreement.
(j) Notwithstanding anything to the contrary contained in this
subsection (j), the Borrower shall have no obligation to indemnify any
Lender (including the Issuing Lender) in respect of any liability incurred
by such Lender (A) arising out of the gross negligence or willful
misconduct of such Lender, as determined by a court of competent
jurisdiction, or (B) caused by such 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, as determined by a
court of competent jurisdiction, unless such payment is prohibited by any
law, regulation, court order or decree.
(k) RESPONSIBILITY OF ISSUING LENDER. It is expressly understood
and agreed that the obligations of the Issuing Lender hereunder to the
Lenders are only those expressly set forth in this Credit Agreement and
that the Issuing Lender shall be entitled to assume that the conditions
precedent set forth in Section 5.2 have been satisfied unless it shall have
acquired actual knowledge that any such condition precedent has not been
satisfied; PROVIDED, HOWEVER, that nothing set forth in this Section 2.2
shall be deemed to prejudice the right of any Lender to recover from the
Issuing Lender any amounts made available by such Lender to the Issuing
Lender pursuant to this Section 2.2 in the event that it is determined by a
court of competent jurisdiction that the payment with respect to a Letter
of Credit constituted gross negligence or willful misconduct on the part of
the Issuing Lender.
(l) Conflict with LOC Documents. In the event of any conflict
between this Credit Agreement and any LOC Document (including any letter of
credit application), this Credit Agreement shall control.
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2.3 SWINGLINE LOAN SUBFACILITY.
(a) SWINGLINE COMMITMENT. Subject to the terms and conditions hereof, the
Swingline Lender, in its individual capacity, agrees to make certain revolving
credit loans to the Borrower (each a "SWINGLINE LOAN" and, collectively, the
"SWINGLINE LOANS") from time to time from the Closing Date until the Maturity
Date for the purposes hereinafter set forth; PROVIDED, HOWEVER, (i) the
aggregate amount of Swingline Loans outstanding at any time shall not exceed
FIVE MILLION DOLLARS ($5,000,000.00) (the "SWINGLINE COMMITTED AMOUNT"), (ii)
with regard to the Lenders collectively, the amount of the Revolving Obligations
shall not exceed the lesser of (A) the Revolving Committed Amount and (B) the
Borrowing Base LESS the outstanding Term Loan and (iii) with regard to each
Lender individually, the amount of such Lender's Revolving Commitment Percentage
of the sum of the Revolving Loans PLUS LOC Obligations PLUS Swingline Loans
outstanding shall not exceed such Lender's Revolving Commitment Percentage of
the Revolving Committed Amount. Swingline Loans hereunder shall be made in
accordance with the provisions of this Section 2.3, and may be repaid and
reborrowed in accordance with the provisions hereof.
(b) SWINGLINE LOAN ADVANCES.
(i) NOTICES; DISBURSEMENT. The Borrower shall request a Swingline
Loan borrowing by written notice (or telephonic notice promptly confirmed
in writing) to the Agent not later than 1:00 P.M. (Charlotte, North
Carolina time) on the Business Day of the requested borrowing. Each such
request for borrowing shall be irrevocable and shall specify (A) that a
Swingline Loan is requested, (B) the date of the requested borrowing (which
shall be a Business Day) and (C) the aggregate principal amount to be
borrowed. Each Swingline Loan shall have such maturity date as the
Swingline Lender and the Borrower shall agree upon receipt by the Swingline
Lender of any such notice from the Borrower. The Swingline Lender shall
initiate the transfer of funds representing the Swingline Loan advance to
the Borrower by 3:00 P.M. (Charlotte, North Carolina time) on the Business
Day of the requested borrowing.
(ii) MINIMUM AMOUNTS. Each Swingline Loan shall be in a minimum
principal amount of $500,000 and in integral multiples of $100,000 in
excess thereof.
(iii) REPAYMENT OF SWINGLINE LOANS. The principal amount of all
Swingline Loans shall be due and payable on the Maturity Date. The
Swingline Lender may, at any time, in its sole discretion, by written
notice to the Borrower and the Lenders, demand repayment of its Swingline
Loans by way of a Revolving Loan advance, in which case the Borrower shall
be deemed to have requested a Revolving Loan advance comprised solely of
Base Rate Loans in the
38
amount of such Swingline Loans; PROVIDED, HOWEVER, that any such demand
shall be deemed to have been given one Business Day prior to the Maturity
Date and on the date of the occurrence of any Event of Default described in
Section 9.1 and upon acceleration of the indebtedness hereunder and the
exercise of remedies in accordance with the provisions of Section 9.2. Each
Lender hereby irrevocably agrees to make its pro rata share of each such
Revolving Loan in the amount, in the manner and on the date specified in
the preceding sentence NOTWITHSTANDING (I) the amount of such borrowing may
not comply with the minimum amount for advances of Revolving Loans
otherwise required hereunder, (II) whether any conditions specified in
Section 5.2 are then satisfied, (III) whether a Default or an Event of
Default then exists, (IV) failure of any such request or deemed request for
Revolving Loan to be made by the time otherwise required hereunder, (V)
whether the date of such borrowing is a date on which Revolving Loans are
otherwise permitted to be made hereunder or (VI) any termination of the
Commitments relating thereto immediately prior to or contemporaneously with
such borrowing. In the event that any Revolving Loan 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 or any other Credit Party),
then each Lender hereby agrees that it shall forthwith purchase (as of the
date such borrowing would otherwise have occurred, but adjusted for any
payments received from the Borrower on or after such date and prior to such
purchase) from the Swingline Lender such participations in the outstanding
Swingline Loans as shall be necessary to cause each such Lender to share in
such Swingline Loans ratably based upon its Revolving Commitment Percentage
of the Revolving Committed Amount (determined before giving effect to any
termination of the Commitments pursuant to Section 3.4), PROVIDED that (A)
all interest payable on the Swingline Loans shall be for the account of the
Swingline Lender until the date as of which the respective participation is
purchased and (B) at the time any purchase of participations pursuant to
this sentence is actually made, the purchasing Lender shall be required to
pay to the Swingline Lender, to the extent not paid to the Swingline Lender
by the Borrower in accordance with the terms of subsection (c) below,
interest on the principal amount of participation purchased for each day
from and including the day upon which such borrowing would otherwise have
occurred to but excluding the date of payment for such participation, at
the rate equal to the Federal Funds Rate. In the event that the Borrower
pays any such interest owing on the Swingline Loans, following the payment
by a Lender of the interest on the principal amount of the participation
purchased by such Lender in accordance with the foregoing, then the
Swingline Lender shall rebate to such Lender, its pro rata share of the
interest so paid by the Borrower.
(c) INTEREST ON SWINGLINE LOANS. Subject to the provisions of Section
3.1, each Swingline Loan shall bear interest at a per annum rate equal to the
Adjusted Base
39
Rate. Interest on Swingline Loans shall be payable in arrears on each applicable
Interest Payment Date (or at such other times as may be specified herein).
(d) SWINGLINE NOTE. The Swingline Loans shall be evidenced by a duly
executed promissory note of the Borrower to the Swingline Lender in
substantially the form of EXHIBIT 2.3(d).
2.4 TERM LOAN.
(a) TERM COMMITMENT. Subject to the terms and conditions hereof and in
reliance upon the representations and warranties set forth herein each Lender
severally agrees to make available to the Borrower on the Closing Date such
Lender's Term Loan Commitment Percentage of a term loan in Dollars (the "TERM
LOAN") in the aggregate principal amount of ONE HUNDRED MILLION DOLLARS
($100,000,000) (the "TERM LOAN COMMITTED AMOUNT"). The Term Loan may consist of
Base Rate Loans or Eurodollar Loans, or a combination thereof, as the Borrower
may request; PROVIDED, HOWEVER, that no more than ten (10) Eurodollar Loans
shall be outstanding hereunder at any time of which no more than three (3) of
such Eurodollar Loans shall be Term Loans (it being understood that, for
purposes hereof, Eurodollar Loans with different Interest Periods shall be
considered as separate Eurodollar Loans, even if they begin on the same date,
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 Eurodollar Loan with a single Interest Period). Amounts repaid
on the Term Loan may not be reborrowed.
(b) BORROWING PROCEDURES. The Borrower shall submit an appropriate Notice
of Borrowing to the Agent not later than 11:00 A.M. (Charlotte, North Carolina
time) on the Closing Date, with respect to the portion of the Term Loan
initially consisting of a Base Rate Loan, or on the third Business Day prior to
the Closing Date, with respect to the portion of the Term Loan initially
consisting of one or more Eurodollar Loans, which Notice of Borrowing shall be
irrevocable and shall specify (i) that the funding of a Term Loan is requested
and (ii) whether the funding of the Term Loan shall be comprised of Base Rate
Loans, Eurodollar Loans or a combination thereof, and if Eurodollar Loans are
requested, the Interest Period(s) therefor. If the Borrower shall fail to
deliver such Notice of Borrowing to the Agent by 11:00 A.M. (Charlotte, North
Carolina time) on the third Business Day prior to the Closing Date, then the
full amount of the Term Loan shall be disbursed on the Closing Date as a Base
Rate Loan. Each Lender shall make its Term Loan Commitment Percentage of the
Term Loan available to the Agent for the account of the Borrower at the office
of the Agent specified in SCHEDULE 2.1(a), or at such other office as the Agent
may designate in writing, by 1:00 P.M. (Charlotte, North Carolina time) on the
Closing Date in Dollars and in funds immediately available to the Agent.
(c) MINIMUM AMOUNTS. Each Eurodollar Loan or Base Rate Loan that is part
of the Term Loan shall be in an aggregate principal amount that is not less than
$1,000,000
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and integral multiples of $500,000 (or the then remaining principal balance
of the Term Loan, if less).
(d) REPAYMENT OF TERM LOAN. The principal amount of the Term Loan shall be
due and payable in full on the Maturity Date, unless accelerated sooner pursuant
to Section 9.2.
(e) INTEREST. Subject to the provisions of Section 3.1, the Term Loan
shall bear interest at a per annum rate equal to:
(i) BASE RATE LOANS. During such periods as the Term Loan shall
be comprised in whole or in part of Base Rate Loans, such Base Rate
Loans shall bear interest at a per annum rate equal to the Adjusted
Base Rate.
(ii) EURODOLLAR LOANS. During such periods as the Term Loan shall be
comprised in whole or in part of Eurodollar Loans, such Eurodollar
Loans shall bear interest at a per annum rate equal to the Adjusted
Eurodollar Rate.
Interest on the Term Loan shall be payable in arrears on each applicable
Interest Payment Date (or at such other times as may be specified herein).
(f) TERM NOTES. The portion of the Term Loan made by each Lender
shall be evidenced by a duly executed promissory note of the Borrower to
such Lender in an original principal amount equal to such Lender's Term
Loan Commitment Percentage of the Term Loan and substantially in the form
of EXHIBIT 2.4(f).
SECTION 3
OTHER PROVISIONS RELATING TO CREDIT FACILITIES
3.1 DEFAULT RATE.
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 Adjusted Base Rate PLUS 2%).
3.2 EXTENSION AND CONVERSION.
The Borrower shall have the option, on any Business Day, to extend existing
Loans into a subsequent permissible Interest Period or to convert Loans into
Loans of another interest rate type; PROVIDED, HOWEVER, that (i) except as
provided in Section 3.8, Eurodollar Loans may be converted
41
into Base Rate Loans or extended as Eurodollar Loans for new Interest Periods
only on the last day of the Interest Period applicable thereto, (ii) without the
consent of the Required Lenders, Eurodollar Loans may be extended, and Base Rate
Loans may be converted into Eurodollar Loans, only if the conditions precedent
set forth in Section 5.2 are satisfied on the date of extension or conversion,
(iii) Loans extended as, or converted into, Eurodollar Loans shall be subject to
the terms of the definition of "INTEREST PERIOD" set forth in Section 1.1 and
shall be in such minimum amounts as provided in, with respect to Revolving
Loans, Section 2.1(b)(ii) or, with respect to the Term Loan, Section 2.4(c),
(iv) no more than ten (10) Eurodollar Loans shall be outstanding hereunder at
any time, of which no more than seven (7) of such Eurodollar Loans shall be
Revolving Loans and no more than (3) of such Eurodollar Loans shall be Term
Loans (it being understood that, for purposes hereof, Eurodollar Loans with
different Interest Periods shall be considered as separate Eurodollar Loans,
even if they begin on the same date, 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 Eurodollar Loan with a
single Interest Period) and (v) any request for extension or conversion of a
Eurodollar Loan which shall fail to specify an Interest Period shall be deemed
to be a request for an Interest Period of one month. Each such extension or
conversion shall be effected by the Borrower by giving a Notice of
Extension/Conversion (or telephonic notice promptly confirmed in writing) to the
office of the Agent specified in SCHEDULE 2.1(a), or at such other office as the
Agent may designate in writing, prior to 12:00 P.M. (Charlotte, North Carolina
time) on the Business Day of, in the case of the conversion of a Eurodollar Loan
into a Base Rate Loan, and on the third Business Day prior to, in the case of
the extension of a Eurodollar Loan as, or conversion of a Base Rate Loan into, a
Eurodollar Loan, the date of the proposed extension or conversion, specifying
the date of the proposed extension or conversion, the Loans to be so extended or
converted, the types of Loans into which such Loans are to be converted and, if
appropriate, the applicable Interest Periods with respect thereto. Each request
for extension or conversion shall be irrevocable and shall constitute a
representation and warranty by the Borrower of the matters specified in
subsections (b), (c), (d), (e) and (f) of Section 5.2. In the event the Borrower
fails to request extension or conversion of any Eurodollar Loan in accordance
with this Section, or any such conversion or extension is not permitted or
required by this Section, then such Eurodollar Loan shall be automatically
converted into a Base Rate Loan at the end of the Interest Period applicable
thereto. The Agent shall give each Lender notice as promptly as practicable of
any such proposed extension or conversion affecting any Loan.
3.3 PREPAYMENTS.
(a) VOLUNTARY 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
$5,000,000 and integral multiples of $1,000,000. Subject to the foregoing
terms, amounts prepaid under this Section 3.3(a) shall be applied as the
Borrower may elect; PROVIDED that if the Borrower fails to specify a
voluntary prepayment then such prepayment shall be applied first to
Revolving Loans and then to the Term Loan, in each case first to Base Rate
Loans and then to Eurodollar Loans
42
in direct order of Interest Period maturities. All prepayments under this
Section 3.3(a) shall be subject to Section 3.12, but otherwise without
premium or penalty.
(b) MANDATORY PREPAYMENTS.
(i) REVOLVING COMMITTED AMOUNT. If at any time (A) the amount
of the Revolving Obligations then outstanding shall exceed the lesser
of (x) the Revolving Committed Amount and (y) the Borrowing Base LESS
the outstanding Term Loan (B) the aggregate amount of LOC Obligations
outstanding shall exceed the LOC Committed Amount or (C) the amount
of Swingline Loans outstanding shall exceed the Swingline Committed
Amount, the Borrower shall immediately make payment on the Loans
and/or to a cash collateral account in respect of the LOC
Obligations, in an amount sufficient to eliminate the deficiency.
(ii) ASSET DISPOSITION. At such time as the Borrower or any of
its Subsidiaries consummates an Asset Disposition, the Borrower shall
immediately notify the Agent of (a) the consummation of such Asset
Disposition and (b) the amount of Net Cash Proceeds received by the
Borrower or Subsidiary in connection with such Asset Disposition. The
Credit Parties hereby agree that the Borrower shall forward 100% of
the Net Cash Proceeds of such Asset Disposition to the Lenders as a
prepayment of the Loans (to be applied as set forth in Section
3.3(b)(v) below).
(iii) CASUALTY AND CONDEMNATION PROCEEDS. At such time as the
Borrower or any of its Subsidiaries shall be required to pay cash
proceeds to the Agent from any insurance policy or from any
condemnation or taking pursuant to Section 7.6 hereof, the Borrower
shall immediately notify the Agent thereof and shall forward 100% of
the cash proceeds to the Agent as required by Section 7.6. If the
Agent elects to apply such proceeds to the prepayment of the Loans
pursuant to Section 7.6, such prepayment shall be applied as set
forth in Section 3.3(b)(v) below.
(iv) TERM LOAN. If at any time after the Revolving Commitments
have been terminated in full and permanently reduced to zero the
amount of the Term Loans outstanding shall exceed the Borrowing Base,
the Borrower shall immediately make payment on the Term Loans in an
amount sufficient to eliminate the deficiency.
(v) APPLICATION OF MANDATORY PREPAYMENTS. All amounts
required to be paid pursuant to Section 3.3(b)(i) shall be applied
first to Revolving Loans and then to a cash collateral account to
secure LOC Obligations. All amounts required to be prepaid pursuant
to Sections 3.3(b)(ii) and (iii) above shall be applied pro rata to
(1) Revolving Loans and (after all Revolving Loans have been repaid)
to a cash collateral account in respect of LOC Obligations and (2)
the Term Loan. One or more holders of the Term Loan may decline to
accept a mandatory prepayment
43
under Sections 3.3(b)(ii) or (iii) to the extent there are sufficient
amounts outstanding under the Term Loan to be prepaid with such
prepayment, in which case such declined prepayments shall be
allocated pro rata among (x) the Revolving Loans and (y) pro rata
among the Term Loans held by Lenders accepting such prepayments. All
amounts required to be paid pursuant to Section 3.3(b)(iv) above
shall be applied to the Term Loan. Within the parameters of the
applications set forth above, prepayments shall be applied first to
Base Rate Loans and then to Eurodollar Loans in direct order of
Interest Period maturities. All prepayments under this Section 3.3(b)
shall be subject to Section 3.12.
3.4 TERMINATION, REDUCTION OF REVOLVING COMMITTED AMOUNT.
The Borrower may from time to time permanently reduce or terminate the
Revolving Committed Amount in whole or in part (in minimum aggregate amounts of
$5,000,000 or in integral multiples of $1,000,000 in excess thereof (or, if
less, the full remaining amount of the then applicable Revolving Committed
Amount)) upon five Business Days' prior written notice to the Agent; PROVIDED,
that, no such termination or reduction shall be made which would cause the
amount of the Revolving Obligations outstanding to exceed the lesser of (A) the
Revolving Committed Amount and (B) the Borrowing Base LESS the outstanding Term
Loan, unless, concurrently with such termination or reduction, the Loans are
repaid to the extent necessary to eliminate such excess. The Agent shall
promptly notify each affected Lender of receipt by the Agent of any notice from
the Borrower pursuant to this Section 3.4.
3.5 FEES.
(a) UNUSED LINE FEE. In consideration of the Revolving Commitments
of the Lenders hereunder, the Borrower agrees to pay to the Agent for the
account of each Lender a fee (the "UNUSED LINE FEE") computed at a per
annum rate equal to the Applicable Percentage for Unused Line Fee then in
effect on the Unused Revolving Committed Amount for each day during the
applicable Unused Line Fee Calculation Period (hereinafter defined). The
Unused Line Fee shall commence to accrue on the Closing Date and shall be
due and payable in arrears on the last business day of each March, June,
September and December (and any date that the Revolving Committed Amount is
reduced as provided in Section 3.4 and the Maturity Date) for the
immediately preceding quarter (or portion thereof) (each such quarter or
portion thereof for which the Unused Line Fee is payable hereunder being
herein referred to as an "UNUSED LINE FEE CALCULATION PERIOD"), beginning
with the first of such dates to occur after the Closing Date. For purposes
of computation of the Unused Fee, the Swingline Loans shall not be counted
toward or considered usage under the Revolving Committed Amount.
(b) LETTER OF CREDIT FEES.
(i) LETTER OF CREDIT ISSUANCE FEE. In consideration of the
issuance of standby Letters of Credit hereunder, the Borrower
promises to pay to the Agent for
44
the account of each Lender a fee (the "STANDBY LETTER OF CREDIT FEE")
on such Lender's Revolving Commitment Percentage of the average daily
maximum amount available to be drawn under each such standby Letter
of Credit computed at a per annum rate for each day from the date of
issuance to the date of expiration equal to the Applicable Percentage
for Revolving Loans which are Eurodollar Loans then in effect. The
Standby Letter of Credit Fee will be payable monthly in arrears on
the last Business Day of each calendar month for the immediately
preceding calendar month (or a portion thereof).
(ii) TRADE LETTER OF CREDIT FEE. In consideration of the
issuance of trade Letters of Credit hereunder, the Borrower promises
to pay to the Agent for the account of each Lender a fee (the "TRADE
LETTER OF CREDIT FEE") on such Lender's Revolving Commitment
Percentage of the amount of each drawing under any such trade Letter
of Credit equal to three-eighths percent (3/8%). The Trade Letter of
Credit Fee will be payable on each date of drawing under a trade
Letter of Credit.
(iii) ISSUING LENDER FEES. In addition to the Standby Letter of
Credit Fee payable pursuant to clause (i) above and the Trade Letter
of Credit Fee payable pursuant to clause (ii) above, the Borrower
promises to pay to the Issuing Lender for its own account without
sharing by the other Lenders (A) a letter of credit fronting fee of
one-quarter percent (1/4%) per annum on the average daily maximum
amount available to be drawn under outstanding Letters of Credit
payable monthly in arrears with the Standby Letter of Credit Fee and
the Trade Letter of Credit Fee, and (B) customary charges from time
to time of the Issuing Lender with respect to the issuance,
amendment, transfer, administration, cancellation and conversion of,
and drawings under, such Letters of Credit (collectively, the
"ISSUING LENDER FEES").
(c) ADMINISTRATIVE FEES. The Borrower agrees to pay to the Agent,
for its own account and First Union Securities, Inc., as applicable, the
fees referred to in the Agent's Fee Letter (collectively, the "AGENT'S
FEES").
3.6 CAPITAL ADEQUACY.
If any Lender has determined in good faith, after the Closing Date, that
the adoption or the becoming effective of, or any change in, or any change by
any Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof, in the interpretation or
administration of, any applicable law, rule or regulation regarding capital
adequacy, or compliance by such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on such Lender's capital or assets as a consequence of its
commitments or obligations hereunder to a level below that which such Lender
could have achieved but for such adoption, effectiveness, change or compliance
(taking into consideration such Lender's policies with respect to capital
adequacy), then, upon notice from such Lender to the Borrower, the Borrower
shall be obligated to pay to such Lender such additional
45
amount or amounts as will compensate such Lender for such reduction. Each
determination by any such Lender of amounts owing under this Section shall,
absent manifest error, be conclusive and binding on the parties hereto.
3.7 LIMITATION ON EURODOLLAR LOANS.
If on or prior to the first day of any Interest Period for any Eurodollar
Loan:
(a) the Agent determines (which determination shall be conclusive)
that by reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for such
Interest Period; or
(b) the Required Lenders determine (which determination shall be
conclusive) and notify the Agent that the Eurodollar Rate will not
adequately and fairly reflect the cost to the Lenders of funding Eurodollar
Loans for such Interest Period;
then the Agent shall give the Borrower prompt notice thereof, and so long as
such condition remains in effect, the Lenders shall be under no obligation to
make additional Eurodollar Loans, continue Eurodollar Loans, or to convert Base
Rate Loans into Eurodollar Loans and the Borrower shall, on the last day(s) of
the then current Interest Period(s) for the outstanding Eurodollar Loans, either
prepay such Eurodollar Loans or convert such Eurodollar Loans into Base Rate
Loans in accordance with the terms of this Credit Agreement.
3.8 ILLEGALITY.
Notwithstanding any other provision herein, if the adoption of or any
change in any Requirement of Law or in the interpretation or application thereof
occurring after the Closing Date shall make it unlawful for any Lender to make
or maintain Eurodollar Loans as contemplated by this Credit Agreement, (a) such
Lender shall promptly give written notice of such circumstances to the Borrower
and the Agent (which notice shall be withdrawn whenever such circumstances no
longer exist), (b) the commitment of such Lender hereunder to make Eurodollar
Loans, continue Eurodollar Loans as such and convert a Base Rate Loan to
Eurodollar Loans, shall forthwith be canceled and, until such time as it shall
no longer be unlawful for such Lender to make or maintain Eurodollar Loans, such
Lender shall then have a commitment only to make a Base Rate Loan when a
Eurodollar Loan is requested and (c) such Lender's Loans then outstanding as
Eurodollar Loans, if any, shall be converted automatically to Base Rate Loans on
the respective last days of the then current Interest Periods with respect to
such Loans or within such earlier period as required by law. If any such
conversion of a Eurodollar Loan occurs on a day which is not the last day of the
then current Interest Period with respect thereto, the Borrower shall pay to
such Lender such amounts, if any, as may be required pursuant to Section 3.13.
46
3.9 REQUIREMENTS OF LAW.
If, after the Closing Date, the adoption of any applicable law, rule, or
regulation, or any change in any applicable law, rule, or regulation, or any
change in the interpretation or administration thereof by any Governmental
Authority, central bank, or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its Applicable Lending
Office) with any request or directive (whether or not having the force of law)
of any such Governmental Authority, central bank, or comparable agency:
(i) shall subject such Lender (or its Applicable Lending Office)
to any tax, duty, or other charge with respect to any Eurodollar Loans, its
Notes, or its obligation to make Eurodollar Loans, or change the basis of
taxation of any amounts payable to such Lender (or its Applicable Lending
Office) under this Credit Agreement or its Notes in respect of any
Eurodollar Loans (other than taxes imposed on the overall net income of
such Lender by the jurisdiction in which such Lender has its principal
office or such Applicable Lending Office);
(ii) shall impose, modify, or deem applicable any reserve, special
deposit, assessment, or similar requirement (other than the Eurodollar
Reserve Requirement utilized in the determination of the Adjusted
Eurodollar Rate) relating to any extensions of credit or other assets of,
or any deposits with or other liabilities or commitments of, such Lender
(or its Applicable Lending Office), including the Commitment of such Lender
hereunder; or
(iii) shall impose on such Lender (or its Applicable Lending
Office) or the London interbank market any other condition affecting this
Credit Agreement or its Notes or any of such extensions of credit or
liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such Lender
(or its Applicable Lending Office) of making, converting into, continuing, or
maintaining any Eurodollar Loans or to reduce any sum received or receivable by
such Lender (or its Applicable Lending Office) under this Credit Agreement or
its Notes with respect to any Eurodollar Loans, then the Borrower shall pay to
such Lender on demand such amount or amounts as will compensate such Lender for
such increased cost or reduction. If any Lender requests compensation by the
Borrower under this Section 3.9, the Borrower may, by notice to such Lender
(with a copy to the Agent), suspend the obligation of such Lender to make or
continue Eurodollar Loans, or to convert Base Rate Loans into Eurodollar Loans,
until the event or condition giving rise to such request ceases to be in effect
(in which case the provisions of Section 3.10 shall be applicable); PROVIDED
that such suspension shall not affect the right of such Lender to receive the
compensation so requested. Each Lender shall promptly notify the Borrower and
the Agent of any event of which it has knowledge, occurring after the Closing
Date, which will entitle such Lender to compensation pursuant to this Section
3.9 and will designate a different Applicable Lending Office if such designation
will avoid the need for, or reduce the amount of, such compensation and will
not, in the judgment of such Lender, be otherwise disadvantageous to it. Any
Lender claiming compensation under this Section
47
3.9 shall furnish to the Borrower and the Agent a statement setting forth the
additional amount or amounts to be paid to it hereunder which shall be
conclusive in the absence of manifest error. In determining such amount, such
Lender may use any reasonable averaging and attribution methods.
3.10 TREATMENT OF AFFECTED LOANS.
If the obligation of any Lender to make any Eurodollar Loan or to continue,
or to convert Base Rate Loans into, Eurodollar Loans shall be suspended pursuant
to Section 3.8 or 3.9 hereof, such Lender's Eurodollar Loans shall be
automatically converted into Base Rate Loans on the last day(s) of the then
current Interest Period(s) for such Eurodollar Loans (or, in the case of a
conversion required by Section 3.8 hereof, on such earlier date as such Lender
may specify to the Borrower with a copy to the Agent) and, unless and until such
Lender gives notice as provided below that the circumstances specified in
Section 3.8 or 3.9 hereof that gave rise to such conversion no longer exist:
(a) to the extent that such Lender's Eurodollar Loans have been so
converted, all payments and prepayments of principal that would otherwise
be applied to such Lender's Eurodollar Loans shall be applied instead to
its Base Rate Loans; and
(b) all Loans that would otherwise be made or continued by such
Lender as Eurodollar Loans shall be made or continued instead as Base Rate
Loans, and all Base Rate Loans of such Lender that would otherwise be
converted into Eurodollar Loans shall remain as Base Rate Loans.
If such Lender gives notice to the Borrower (with a copy to the Agent) that the
circumstances specified in Section 3.8 or 3.9 hereof that gave rise to the
conversion of such Lender's Eurodollar Loans pursuant to this Section 3.10 no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Eurodollar Loans made by other Lenders are
outstanding, such Lender's Base Rate Loans shall be automatically converted, on
the first day(s) of the next succeeding Interest Period(s) for such outstanding
Eurodollar Loans, to the extent necessary so that, after giving effect thereto,
all Loans held by the Lenders holding Eurodollar Loans and by such Lender are
held pro rata (as to principal amounts, interest rate basis, and Interest
Periods) in accordance with their respective Commitments.
3.11 TAXES.
(a) Any and all payments by any Credit Party to or for the account
of any Lender or the Agent hereunder or under any other Credit Document
shall be made free and clear of and without deduction for any and all
present or future taxes, duties, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, EXCLUDING, in the
case of each Lender and the Agent, taxes imposed on its income, and
franchise taxes imposed on it, by the jurisdiction under the laws of which
such Lender (or its Applicable Lending Office) or the Agent (as the case
may be) is organized or any political subdivision thereof (all such
non-excluded taxes, duties, levies, imposts,
48
deductions, charges, withholdings, and liabilities being hereinafter
referred to as "TAXES"). If any Credit Party shall be required by law to
deduct any Taxes from or in respect of any sum payable under this Credit
Agreement or any other Credit Document to any Lender or the Agent, (i) the
sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums
payable under this Section 3.11) such Lender or the Agent receives an
amount equal to the sum it would have received had no such deductions been
made, (ii) such Credit Party shall make such deductions, (iii) such Credit
Party shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law, and (iv) such Credit
Party shall furnish to the Agent, at its address referred to in Section
11.1, the original or a certified copy of a receipt evidencing payment
thereof.
(b) In addition, the Borrower agrees to pay any and all present or
future stamp or documentary taxes and any other excise or property taxes or
charges or similar levies which arise from any payment made under this
Credit Agreement or any other Credit Document or from the execution or
delivery of, or otherwise with respect to, this Credit Agreement or any
other Credit Document (hereinafter referred to as "OTHER TAXES").
(c) The Borrower agrees to indemnify each Lender and the Agent for
the full amount of Taxes and Other Taxes (including, without limitation,
any Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts
payable under this Section 3.11) paid by such Lender or the Agent (as the
case may be) and any liability (including penalties, interest, and
expenses) arising therefrom or with respect thereto.
(d) Each Lender that is not a United States person under Section
7701(a)(30) of the Code, on or prior to the date of its execution and
delivery of this Credit Agreement in the case of each Lender listed on the
signature pages hereof and on or prior to the date on which it becomes a
Lender in the case of each other Lender, and from time to time thereafter
if requested in writing by the Borrower or the Agent (but only so long as
such Lender remains lawfully able to do so), shall provide the Borrower and
the Agent with (i) Internal Revenue Service Form 1001 or 4224, as
appropriate, or any successor form prescribed by the Internal Revenue
Service, certifying that such Lender is entitled to benefits under an
income tax treaty to which the United States is a party which reduces the
rate of withholding tax on payments of interest or certifying that the
income receivable pursuant to this Credit Agreement is effectively
connected with the conduct of a trade or business in the United States,
(ii) Internal Revenue Service Form W-8 or W-9, as appropriate, or any
successor form prescribed by the Internal Revenue Service, and (iii) any
other form or certificate required by any taxing authority (including any
certificate required by Sections 871(h) and 881(c) of the Internal Revenue
Code), certifying that such Lender is entitled to an exemption from or a
reduced rate of tax on payments pursuant to this Credit Agreement or any of
the other Credit Documents.
(e) For any period with respect to which a Lender has failed to
provide the Borrower and the Agent with the appropriate form pursuant to
Section 3.11(d) (unless
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such failure is due to a change in treaty, law, or regulation occurring
subsequent to the date on which a form originally was required to be
provided), such Lender shall not be entitled to indemnification under
Section 3.11(a) or 3.11(b) with respect to Taxes imposed by the United
States; PROVIDED, HOWEVER, that should a Lender, which is otherwise exempt
from or subject to a reduced rate of withholding tax, become subject to
Taxes because of its failure to deliver a form required hereunder, the
Borrower shall take such steps as such Lender shall reasonably request to
assist such Lender to recover such Taxes.
(f) If any Credit Party is required to pay additional amounts to or
for the account of any Lender pursuant to this Section 3.11, then such
Lender will agree to use reasonable efforts to change the jurisdiction of
its Applicable Lending Office so as to eliminate or reduce any such
additional payment which may thereafter accrue if such change, in the
judgment of such Lender, is not otherwise disadvantageous to such Lender.
(g) Within thirty (30) days after the date of any payment of Taxes,
the applicable Credit Party shall furnish to the Agent the original or a
certified copy of a receipt evidencing such payment.
(h) Without prejudice to the survival of any other agreement of the
Credit Parties hereunder, the agreements and obligations of the Credit
Parties contained in this Section 3.11 shall survive the repayment of the
Loans, LOC Obligations and other obligations under the Credit Documents and
the termination of the Commitments hereunder.
3.12 COMPENSATION.
Upon the request of any Lender, the Borrower shall pay to such Lender such
amount or amounts as shall be sufficient (in the reasonable opinion of such
Lender) to compensate it for any loss, cost, or expense (including loss of
anticipated profits) incurred by it as a result of:
(a) any payment, prepayment, or conversion of a Eurodollar Loan for
any reason (including, without limitation, the acceleration of the Loans
pursuant to Section 9.2) on a date other than the last day of the Interest
Period for such Loan; or
(b) any failure by the Borrower for any reason (including, without
limitation, the failure of any condition precedent specified in Section 5
to be satisfied) to borrow, convert, continue, or prepay a Eurodollar Loan
on the date for such borrowing, conversion, continuation, or prepayment
specified in the relevant notice of borrowing, prepayment, continuation, or
conversion under this Credit Agreement.
With respect to Eurodollar Loans, such indemnification may include an amount
equal to the excess, if any, of (a) the amount of interest which would have
accrued on the amount so prepaid, or not so borrowed, converted or continued,
for the period from the date of such prepayment or of such
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failure to borrow, convert or continue to the last day of the applicable
Interest Period (or, in the case of a failure to borrow, convert or continue,
the Interest Period that would have commenced on the date of such failure) in
each case at the applicable rate of interest for such Eurodollar Loans provided
for herein (excluding, however, the Applicable Percentage included therein, if
any) over (b) the amount of interest (as reasonably determined by such Lender)
which would have accrued to such Lender on such amount by placing such amount on
deposit for a comparable period with leading banks in the interbank Eurodollar
market. The covenants of the Borrower set forth in this Section 3.12 shall
survive the repayment of the Loans, LOC Obligations and other obligations under
the Credit Documents and the termination of the Commitments hereunder.
3.13 PRO RATA TREATMENT.
Except to the extent otherwise provided herein:
(a) LOANS. Each Loan, each payment or (subject to the terms of
Section 3.3) prepayment of principal of any Loan or reimbursement
obligations arising from drawings under Letters of Credit, each payment of
interest on the Loans or reimbursement obligations arising from drawings
under Letters of Credit, each payment of Unused Fees, each payment of the
Standby Letter of Credit Fee, each payment of the Trade Letter of Credit
Fee, each reduction in Commitments and each conversion or extension of any
Loan, shall be allocated pro rata among the Lenders in accordance with the
respective principal amounts of their outstanding Loans and Participation
Interests.
(b) ADVANCES. No Lender shall be responsible for the failure or
delay by any other Lender in its obligation to make its ratable share of a
borrowing hereunder; PROVIDED, HOWEVER, that the failure of any Lender to
fulfill its obligations hereunder shall not relieve any other Lender of its
obligations hereunder. Unless the Agent shall have been notified in writing
by any Lender prior to the date of any requested borrowing that such Lender
does not intend to make available to the Agent its ratable share of such
borrowing to be made on such date, the Agent may assume that such Lender
has made such amount available to the Agent on the date of such borrowing,
and the Agent in reliance upon such assumption, may (in its sole discretion
but without any obligation to do so) make available to the Borrower a
corresponding amount. If such corresponding amount is not in fact made
available to the Agent, the Agent shall be able to recover such
corresponding amount from such Lender. If such Lender does not pay such
corresponding amount forthwith upon the Agent's demand therefor, the Agent
will promptly notify the Borrower, and the Borrower shall immediately pay
such corresponding amount to the Agent. The 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 Agent to the Borrower to the
date such corresponding amount is recovered by the Agent at a per annum
rate equal to (i) from the Borrower at the applicable rate for the
applicable borrowing pursuant to the Notice of Borrowing and (ii) from a
Lender at the Federal Funds Rate.
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3.14 SHARING OF PAYMENTS.
The Lenders agree among themselves that, in the event that any Lender shall
obtain payment in respect of any Loan, LOC Obligations or any other obligation
owing to such Lender under this Credit Agreement through the exercise of a right
of setoff, banker's lien or counterclaim, or pursuant to a secured claim under
Section 506 of Title 11 of the United States Code or other security or interest
arising from, or in lieu of, such secured claim, received by such Lender under
any applicable bankruptcy, insolvency or other similar law or otherwise, or by
any other means, in excess of its pro rata share of such payment as provided for
in this Credit Agreement, such Lender shall promptly purchase from the other
Lenders a Participation Interest in such Loans, LOC Obligations and other
obligations in such amounts, and make such other adjustments from time to time,
as shall be equitable to the end that all Lenders share such payment in
accordance with their respective ratable shares as provided for in this Credit
Agreement. The Lenders further agree among themselves that if payment to a
Lender obtained by such Lender through the exercise of a right of setoff,
banker's lien, counterclaim or other event as aforesaid shall be rescinded or
must otherwise be restored, each Lender which shall have shared the benefit of
such payment shall, by repurchase of a Participation Interest theretofore sold,
return its share of that benefit (together with its share of any accrued
interest payable with respect thereto) to each Lender whose payment shall have
been rescinded or otherwise restored. The Borrower agrees that any Lender so
purchasing such a Participation Interest may, to the fullest extent permitted by
law, exercise all rights of payment, including setoff, banker's lien or
counterclaim, with respect to such Participation Interest as fully as if such
Lender were a holder of such Loan, LOC Obligations or other obligation in the
amount of such Participation Interest. Except as otherwise expressly provided in
this Credit Agreement, if any Lender or the Agent shall fail to remit to the
Agent or any other Lender an amount payable by such Lender or the Agent to the
Agent or such other Lender pursuant to this Credit Agreement on the date when
such amount is due, such payments shall be made together with interest thereon
for each date from the date such amount is due until the date such amount is
paid to the Agent or such other Lender at a rate per annum equal to the Federal
Funds Rate. If under any applicable bankruptcy, insolvency or other similar law,
any Lender receives a secured claim in lieu of a setoff to which this Section
3.14 applies, such Lender shall, to the extent practicable, exercise its rights
in respect of such secured claim in a manner consistent with the rights of the
Lenders under this Section 3.14 to share in the benefits of any recovery on such
secured claim.
3.15 PAYMENTS, COMPUTATIONS, ETC.
(a) Except as otherwise specifically provided herein, all payments
hereunder shall be made to the Agent in dollars in immediately available
funds, without setoff, deduction, counterclaim or withholding of any kind,
at the Agent's office specified in SCHEDULE 2.1(a) not later than 2:00 P.M.
(Charlotte, North Carolina time) on the date when due. Payments received
after such time shall be deemed to have been received on the next
succeeding Business Day. The Agent may (but shall not be obligated to)
debit the amount of any such payment which is not made by such time to any
ordinary deposit account of the Borrower or any other Credit Party
maintained with the Agent (with notice to the Borrower or such other Credit
Party). The Borrower shall, at the time it makes any payment under
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this Credit Agreement, specify to the Agent the Loans, LOC Obligations,
Fees, interest or other amounts payable by the Borrower hereunder to which
such payment is to be applied (and in the event that it fails so to
specify, or if such application would be inconsistent with the terms
hereof, the Agent shall distribute such payment to the Lenders in such
manner as the Agent may determine to be appropriate in respect of
obligations owing by the Borrower hereunder, subject to the terms of
Section 3.13(a)). The Agent will distribute such payments to such Lenders,
if any such payment is received prior to 12:00 Noon (Charlotte, North
Carolina time) on a Business Day in like funds as received prior to the end
of such Business Day and otherwise the Agent will distribute such payment
to such Lenders on the next succeeding Business Day. Whenever any payment
hereunder shall be stated to be due on a day which is not a Business Day,
the due date thereof shall be extended to the next succeeding Business Day
(subject to accrual of interest and Fees for the period of such extension),
except that in the case of Eurodollar Loans, if the extension would cause
the payment to be made in the next following calendar month, then such
payment shall instead be made on the next preceding Business Day. Except as
expressly provided otherwise herein, all computations of interest and fees
shall be made on the basis of actual number of days elapsed over a year of
360 days, except with respect to computation of interest on Base Rate Loans
which (unless the Base Rate is determined by reference to the Federal Funds
Rate) shall be calculated based on a year of 365 or 366 days, as
appropriate. Interest shall accrue from and include the date of borrowing,
but exclude the date of payment.
(b) ALLOCATION OF PAYMENTS AFTER EVENT OF DEFAULT. Notwithstanding
any other provisions of this Credit Agreement to the contrary, after the
occurrence and during the continuance of an Event of Default, all amounts
collected or received by the Agent or any Lender on account of the Credit
Party Obligations or any other amounts outstanding under any of the Credit
Documents or in respect of the Collateral shall be paid over or delivered
as follows:
FIRST, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation reasonable attorneys' fees) of the
Agent in connection with enforcing the rights of the Lenders under the
Credit Documents and any protective advances made by the Agent with respect
to the Collateral under or pursuant to the terms of the Collateral
Documents;
SECOND, to payment of any fees owed to the 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;
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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 but excluding Credit Party Obligations
to the extent they consist of Obligations under Hedging Agreements);
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;
SEVENTH, to all Credit Party Obligations consisting of Obligations
under Hedging Agreements; and
EIGHTH, to the payment of the surplus, if any, to whoever may be
lawfully entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (ii) each of the Lenders shall receive an amount equal
to its pro rata share (based on the proportion that the then outstanding
Loans 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 Agent in a
cash collateral account and applied (A) first, to reimburse the Issuing
Lender from time to time for any drawings under such Letters of Credit and
(B) then, following the expiration of all Letters of Credit, to all other
obligations of the types described in clauses "FIFTH" and "SIXTH" above in
the manner provided in this Section 3.15(b).
3.16 CASH MANAGEMENT.
(a) CASH MANAGEMENT. Unless a Cash Management Event shall have
occurred, the Credit Parties shall be permitted to receive directly for
their own account all payments or other remittances of Accounts of the
Credit Parties and other proceeds of the Collateral. Upon the occurrence of
a Cash Management Event, the Agent may in its sole discretion give to the
Credit Parties and the Depository Banks (as defined hereinafter) a written
payment direction notice (a "Payment Direction Notice") (which notice in
the case of an Event of Default described in SECTION 9.1(f) shall be deemed
given to the Credit Parties without any further act by the Agent or any
Lender) directing that (x) the Credit Parties, individually or through the
Borrower, each (A) establish and maintain a Blocked Account with financial
institutions, including First Union, selected by the Company and approved
by the Agent (the "Depository Banks") and (B) instruct all account debtors
on the Accounts of any of the Credit Parties or which owe other obligations
to any of the Credit Parties to remit all payments to its respective
Depository
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Bank and (y) all such payments or other remittances received by the
Depository Bank be deposited into the Blocked Accounts pursuant to the
terms of the Blocked Account Agreements. Each Credit Party, individually or
through the Borrower, the Agent and each Depository Bank shall enter into
three party agreements in the form of EXHIBIT 3.16(a) hereto (the "Blocked
Account Agreements"), providing, among other things, for the following:
(i) The Borrowers, individually or through the Company,
will open and establish for the benefit of the Agent on behalf
of the Lenders an account at each Depository Bank (each a
"Blocked Account"). Notwithstanding the foregoing, in lieu of
establishing a Blocked Account with First Union, the First
Union Account will serve as the Credit Parties' Blocked Account
with First Union.
(ii) All receipts received by the Depository Banks shall
be remitted daily to the appropriate Blocked Account or the
First Union Account, as applicable. Upon the terms and subject
to the conditions set forth in the Blocked Account Agreements,
all amounts held in the Blocked Accounts with Depository Banks
other than First Union shall be deposited daily into the First
Union Account.
(iii) All good funds deposited into the First Union
Account on any Business Day shall be applied by the Agent on
such Business Day to the payment of the Credit Party
Obligations. All amounts received directly by the Credit
Parties from any account debtor, in addition to all other cash
received from any other source including but not limited to
proceeds from asset sales and judgments, shall be held in trust
by the Credit Parties and promptly deposited into the
applicable Blocked Account or, if made by wire transfer,
directly to the First Union Account.
(iv) All funds deposited into the First Union Account
shall immediately become the property of the Agent and each of
the Credit Parties shall obtain the agreement by the Depository
Banks to waive any offset rights against the funds so
deposited. The Agent assumes no responsibility for the blocked
account arrangements, including without limitation, any claim
of accord and satisfaction or release with respect to deposits
accepted by the Depository Banks thereunder.
(v) The Credit Parties may close Blocked Accounts and/or
open new Blocked Accounts with the prior written consent of the
Agent and subject to prior execution and delivery to the Agent
of Blocked Account Agreements consistent with the provisions of
this SECTION 3.16(a) and in form and substance satisfactory to
the Agent and its counsel.
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(b) On and after the occurrence of a Cash Management Event, the
Agent shall be entitled to establish such settlement procedures among the
Lenders for the disbursement of Loans and the application of collections to
the repayment of Loans as the Agent shall deem necessary to effect the
purpose of clause (a) immediately above.
(c) The Credit Parties hereby authorize each Lender to charge from
time to time against any or all of the Credit Parties' accounts with such
Lender any of the Credit Party Obligations which are then due and payable.
Each Lender receiving any payment as a result of charging any such account
shall promptly notify the Agent thereof and make such arrangements as the
Agent shall request to share the benefit thereof in accordance with SECTION
3.14 hereof.
3.17 EVIDENCE OF DEBT.
(a) Each Lender shall maintain an account or accounts evidencing
each Loan made by such Lender to the Borrower from time to time, including
the amounts of principal and interest payable and paid to such Lender from
time to time under this Credit Agreement. Each Lender will make reasonable
efforts to maintain the accuracy of its account or accounts and to promptly
update its account or accounts from time to time, as necessary.
(b) The Agent shall maintain the Register pursuant to Section
11.3(c), and a subaccount for each Lender, in which Register and
subaccounts (taken together) shall be recorded (i) the amount, type and
Interest Period of each such Loan hereunder, (ii) the amount of any
principal or interest due and payable or to become due and payable to each
Lender hereunder and (iii) the amount of any sum received by the Agent
hereunder from or for the account of any Credit Party and each Lender's
share thereof. The Agent will make reasonable efforts to maintain the
accuracy of the subaccounts referred to in the preceding sentence and to
promptly update such subaccounts from time to time, as necessary.
(c) The entries made in the accounts, Register and subaccounts
maintained pursuant to subsection (b) of this Section 3.16 (and, if
consistent with the entries of the Agent, subsection (a)) shall be prima
facie evidence of the existence and amounts of the obligations of the
Credit Parties therein recorded; PROVIDED, HOWEVER, that the failure of any
Lender or the Agent to maintain any such account, such Register or such
subaccount, as applicable, or any error therein, shall not in any manner
affect the obligation of the Credit Parties to repay the Credit Party
obligations owing to such Lender.
SECTION 4
GUARANTY
4.1 THE GUARANTY.
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Each of the Guarantors hereby jointly and severally guarantees to each
Lender, each Affiliate of a Lender that enters into a Hedging Agreement, and the
Agent as hereinafter provided, as primary obligor and not as surety, the prompt
payment of the Credit Party Obligations 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.
The Guarantors hereby further agree that if any of the Credit Party Obligations
are not paid in full when due (whether at stated maturity, as a mandatory
prepayment, by acceleration, as a mandatory cash collateralization or
otherwise), the Guarantors will, jointly and severally, promptly pay 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, 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.
Notwithstanding any provision to the contrary contained herein or in any
other of the Credit Documents or Hedging Agreements, the obligations of each
Guarantor hereunder shall be limited to an aggregate amount equal to the largest
amount that would not render its obligations hereunder subject to avoidance
under Section 548 of the Bankruptcy Code or any comparable provisions of any
applicable state law.
4.2 OBLIGATIONS UNCONDITIONAL.
The obligations of the Guarantors under Section 4.1 are joint and several,
absolute and unconditional, irrespective of the value, genuineness, validity,
regularity or enforceability of any of the Credit Documents or Hedging
Agreements, or any other agreement or instrument referred to therein, or any
substitution, release, impairment or exchange of any other guarantee of or
security for any of the Credit Party Obligations, and, to the fullest extent
permitted by applicable law, irrespective of any other circumstance whatsoever
which might otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor, it being the intent of this Section 4.2 that the
obligations of the Guarantors hereunder shall be absolute and unconditional
under any and all circumstances. Each Guarantor agrees that such Guarantor shall
have no right of subrogation, indemnity, reimbursement or contribution against
the Borrower or any other Guarantor for amounts paid under this Section 4 until
such time as the Lenders (and any Affiliates of Lenders entering into Hedging
Agreements) have been paid in full, all Commitments under this Credit Agreement
have been terminated and no Person or Governmental Authority shall have any
right to request any return or reimbursement of funds from the Lenders in
connection with monies received under the Credit Documents or Hedging
Agreements. Without limiting the generality of the foregoing, it is agreed that,
to the fullest extent permitted by law, the occurrence of any one or more of the
following shall not alter or impair the liability of any Guarantor hereunder
which shall remain absolute and unconditional as described above:
(a) at any time or from time to time, without notice to any
Guarantor, the time for any performance of or compliance with any of the
Credit Party Obligations shall be extended, or such performance or
compliance shall be waived;
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(b) any of the acts mentioned in any of the provisions of any of
the Credit Documents, any Hedging Agreement or any other agreement or
instrument referred to in the Credit Documents or Hedging Agreements shall
be done or omitted;
(c) the maturity of any of the Credit Party Obligations shall be
accelerated, or any of the Credit Party Obligations shall be modified,
supplemented or amended in any respect, or any right under any of the
Credit Documents, any Hedging Agreement or any other agreement or
instrument referred to in the Credit Documents or Hedging Agreements shall
be waived or any other guarantee of any of the Credit Party Obligations or
any security therefor shall be released, impaired or exchanged in whole or
in part or otherwise dealt with;
(d) any Lien granted to, or in favor of, the Agent or any Lender or
Lenders as security for any of the Credit Party Obligations shall fail to
attach or be perfected; or
(e) any of the Credit Party Obligations shall be determined to be
void or voidable (including, without limitation, for the benefit of any
creditor of any Guarantor) or shall be subordinated to the claims of any
Person (including, without limitation, any creditor of any Guarantor).
With respect to its obligations hereunder, each Guarantor hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the Agent or any Lender exhaust any right,
power or remedy or proceed against any Person under any of the Credit Documents,
any Hedging Agreement or any other agreement or instrument referred to in the
Credit Documents or Hedging Agreements, or against any other Person under any
other guarantee of, or security for, any of the Credit Party Obligations.
4.3 REINSTATEMENT.
The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Credit Party Obligations is
rescinded or must be otherwise restored by any holder of any of the Credit Party
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Agent and each Lender on demand for all reasonable costs and expenses
(including, without limitation, fees and expenses of counsel) incurred by the
Agent or such Lender in connection with such rescission or restoration,
including any such costs and expenses incurred in defending against any claim
alleging that such payment constituted a preference, fraudulent transfer or
similar payment under any bankruptcy, insolvency or similar law.
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4.4 CERTAIN ADDITIONAL WAIVERS.
Each Guarantor agrees that such Guarantor shall have no right of recourse
to security for the Credit Party Obligations, except through the exercise of
rights of subrogation pursuant to Section 4.2 and through the exercise of rights
of contribution pursuant to Section 4.6.
4.5 REMEDIES.
The Guarantors agree that, to the fullest extent permitted by law, as
between the Guarantors, on the one hand, and the Agent and the Lenders, on the
other hand, the Credit Party Obligations may be declared to be forthwith due and
payable as provided in Section 9.2 (and shall be deemed to have become
automatically due and payable in the circumstances provided in said Section 9.2)
for purposes of Section 4.1 notwithstanding any stay, injunction or other
prohibition preventing such declaration (or preventing the Credit Party
Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or the Credit Party
Obligations being deemed to have become automatically due and payable), the
Credit Party Obligations (whether or not due and payable by any other Person)
shall forthwith become due and payable by the Guarantors for purposes of Section
4.1. The Guarantors acknowledge and agree that their obligations hereunder are
secured in accordance with the terms of the Security Agreement and the other
Collateral Documents and that the Lenders may exercise their remedies thereunder
in accordance with the terms thereof.
4.6 RIGHTS OF CONTRIBUTION.
The Guarantors hereby agree as among themselves that, if any Guarantor
shall make an Excess Payment (as defined below), such Guarantor shall have a
right of contribution from each other Guarantor in an amount equal to such other
Guarantor's Contribution Share (as defined below) of such Excess Payment. The
payment obligations of any Guarantor under this Section 4.6 shall be subordinate
and subject in right of payment to the prior payment in full to the Agent and
the Lenders of the Guaranteed Obligations, and none of the Guarantors shall
exercise any right or remedy under this Section 4.6 against any other Guarantor
until payment and satisfaction in full of all of such Guaranteed Obligations.
For purposes of this Section 4.6, (a) "GUARANTEED OBLIGATIONS" shall mean any
obligations arising under the other provisions of this Section 4; (b) "EXCESS
PAYMENT" shall mean the amount paid by any Guarantor in excess of its Pro Rata
Share of any Guaranteed Obligations; (c) "PRO RATA SHARE" shall mean, for any
Guarantor in respect of any payment of Guaranteed Obligations, the ratio
(expressed as a percentage) as of the date of such payment of Guaranteed
Obligations of (i) the amount by which the aggregate present fair salable value
of all of its assets and properties taken as a going concern exceeds the amount
of all debts and liabilities of such Guarantor (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of such Guarantor hereunder) to (ii) the amount by which the
aggregate present fair salable value of all assets and other properties of all
of the Credit Parties taken as a going concern exceeds the amount of all of the
debts and liabilities (including contingent, subordinated, unmatured, and
unliquidated liabilities, but excluding the obligations of the Credit Parties
hereunder) of the Credit Parties; PROVIDED, HOWEVER, that, for purposes of
calculating the
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Pro Rata Shares of the Guarantors in respect of any payment of Guaranteed
Obligations, any Guarantor that became a Guarantor subsequent to the date of any
such payment shall be deemed to have been a Guarantor on the date of such
payment and the financial information for such Guarantor as of the date such
Guarantor became a Guarantor shall be utilized for such Guarantor in connection
with such payment; and (d) "CONTRIBUTION SHARE" shall mean, for any Guarantor in
respect of any Excess Payment made by any other Guarantor, the ratio (expressed
as a percentage) as of the date of such Excess Payment of (i) the amount by
which the aggregate present fair salable value of all of its assets and
properties exceeds the amount of all debts and liabilities of such Guarantor
(including contingent, subordinated, unmatured, and unliquidated liabilities,
but excluding the obligations of such Guarantor hereunder) to (ii) the amount by
which the aggregate present fair salable value of all assets and other
properties of the Credit Parties other than the maker of such Excess Payment
exceeds the amount of all of the debts and liabilities (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of the Credit Parties) of the Credit Parties other than the maker of
such Excess Payment; PROVIDED, HOWEVER, that, for purposes of calculating the
Contribution Shares of the Guarantors in respect of any Excess Payment, any
Guarantor that became a Guarantor subsequent to the date of any such Excess
Payment shall be deemed to have been a Guarantor on the date of such Excess
Payment and the financial information for such Guarantor as of the date such
Guarantor became a Guarantor shall be utilized for such Guarantor in connection
with such Excess Payment. This Section 4.6 shall not be deemed to affect any
right of subrogation, indemnity, reimbursement or contribution that any
Guarantor may have under applicable law against the Borrower in respect of any
payment of Guaranteed Obligations.
4.7 GUARANTEE OF PAYMENT; CONTINUING GUARANTEE.
The guarantee in this Section 4 is a guaranty of payment and not of
collection, is a continuing guarantee, and shall apply to all Credit Party
Obligations whenever arising.
SECTION 5
CONDITIONS
5.1 CLOSING CONDITIONS.
This Credit Agreement became effective on August 6, 1999 upon the
satisfaction of the following conditions:
(a) EXECUTED CREDIT DOCUMENTS. Receipt by the Agent of duly
executed copies of: (i) this Credit Agreement, (ii) the Notes, (iii) the
Collateral Documents and (iv) all other Credit Documents, each in form and
substance reasonably acceptable to the Agent in its sole discretion.
(b) CORPORATE DOCUMENTS. Receipt by the Agent of the following:
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(i) CHARTER DOCUMENTS. Copies of the articles or certificates
of incorporation or other charter documents of each Credit Party
certified to be true and complete as of a recent date by the
appropriate Governmental Authority of the state or other jurisdiction
of its incorporation and certified by a secretary or assistant
secretary of such Credit Party to be true and correct as of the
Closing Date.
(ii) BYLAWS. A copy of the bylaws of each Credit Party
certified by a secretary or assistant secretary of such Credit Party
to be true and correct as of the Closing Date.
(iii) RESOLUTIONS. Copies of resolutions of the Board of
Directors of each Credit Party approving and adopting the Credit
Documents to which it is a party, the transactions contemplated
therein and authorizing execution and delivery thereof, certified by
a secretary or assistant secretary of such Credit Party to be true
and correct and in force and effect as of the Closing 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 or other jurisdiction of incorporation and
each other jurisdiction in which the failure to so qualify and be in
good standing could have a Material Adverse Effect.
(v) INCUMBENCY. An incumbency certificate of each Credit
Party certified by a secretary or assistant secretary to be true and
correct as of the Closing Date.
(c) FINANCIAL STATEMENTS. Receipt by the Agent of (i) the audited
consolidated financial statements of the Borrower and its Subsidiaries,
including balance sheets and income and cash flow statements for the fiscal
years ending December 31, 1997 and 1998, in each case prepared in
conformity with GAAP and in form and substance reasonably satisfactory to
the Agent, (ii) the unaudited consolidated financial statements of the
Borrower and its Subsidiaries, including balance sheets and income and cash
flow statements for the three-month period ended March 31, 1999, in each
case prepared in conformity with GAAP and in form and substance reasonably
satisfactory to the Agent, (iii) satisfactory financial projections for the
Borrower and its Subsidiaries for each twelve-month period through the
twelve-month period occurring five (5) years from the Closing Date and (iv)
such other information relating to the Borrower and its Subsidiaries as the
Agent may reasonably require in connection with the structuring and
syndication of credit facilities of the type described herein.
(d) OPINIONS OF COUNSEL. The Agent shall have received a legal
opinion in form and substance reasonably satisfactory to the Lenders dated
as of the Closing Date from counsel to the Credit Parties.
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(e) PERSONAL PROPERTY COLLATERAL. The Agent shall have received:
(i) searches of Uniform Commercial Code filings in the
jurisdiction of the chief executive office of each Credit Party and each
jurisdiction where any Collateral is located or where a filing would need
to be made in order to perfect the Agent's security interest in the
Collateral, copies of the financing statements on file in such
jurisdictions and evidence that no Liens exist other than Permitted Liens;
(ii) duly executed UCC financing statements for each appropriate
jurisdiction as is necessary, in the Agent's sole discretion, to perfect
the Agent's security interest in the Collateral;
(iii) searches of ownership of intellectual property in the
appropriate governmental offices and such patent/trademark/copyright
filings as requested by the Agent in order to perfect the Agent's security
interest in the Collateral;
(iv) all stock certificates evidencing the Capital Stock pledged
to the Agent pursuant to the Pledge Agreement, together with duly executed
in blank, undated stock powers attached thereto (unless, with respect to
the pledged Capital Stock of any Foreign Subsidiary, such stock powers are
deemed unnecessary by the Agent in its reasonable discretion under the law
of the jurisdiction of incorporation of such Person); and
(v) duly executed consents as are necessary, in the Agent's
reasonable discretion, to perfect the Agent's security interest in the
Collateral.
(f) PRIORITY OF LIENS. The Agent shall have received satisfactory
evidence that (i) the Agent, on behalf of the Lenders, holds a perfected,
first priority Lien on all Collateral (provided that the Agent's perfected
Lien shall not be required to be first priority with respect to Collateral
subject to a previously perfected Permitted Lien) and (ii) none of the
Collateral is subject to any other Liens other than Permitted Liens.
(g) OPENING BORROWING BASE. Receipt by the Agent of a Borrowing
Base Certificate as of the Closing Date, substantially in the form of
EXHIBIT 7.1(d) and certified by the chief financial officer of the Borrower
to be true and correct as of the Closing Date.
(h) EVIDENCE OF INSURANCE. Receipt by the Agent of copies of
insurance policies or certificates of insurance of the Consolidated Parties
evidencing liability and casualty insurance meeting the requirements set
forth in the Credit Documents, including, but not limited to, naming the
Agent as sole loss payee on behalf of the Lenders.
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(i) MATERIAL ADVERSE EFFECT. No material adverse change shall have
occurred since December 31, 1998 in the condition (financial or otherwise),
business, assets, operations, management or prospects of the Consolidated
Parties taken as a whole.
(j) LITIGATION. There shall not exist any pending or threatened
action, suit, investigation or proceeding against a Consolidated Party that
could reasonably be expected to have a Material Adverse Effect.
(k) OFFICER'S CERTIFICATES. The Agent shall have received a
certificate or certificates executed by an Executive Officer of the
Borrower as of the Closing Date certifying that (A) each Credit Party is in
compliance with all existing financial obligations, including, without
limitation, the Senior Subordinated Notes, (B) all governmental,
shareholder and third party consents and approvals, if any, with respect to
the Credit Documents and the transactions contemplated thereby have been
obtained, (C) no action, suit, investigation or proceeding is pending or
threatened in any court or before any arbitrator or governmental
instrumentality that purports to affect any Credit Party 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 (D) immediately after giving effect to this Credit Agreement,
the other Credit Documents and all the transactions contemplated therein to
occur on such date, (1) each of the Credit Parties is Solvent, (2) no
Default or Event of Default exists, (3) all representations and warranties
contained herein and in the other Credit Documents are true and correct in
all material respects, (4) the Credit Parties are in pro forma compliance
with each of the financial covenants set forth in Section 7.11 as of June
30, 1999 (which certificate shall set forth the calculations therefor in
reasonable detail), and (5) Consolidated Funded Indebtedness does not
exceed $680 million (of which at least $270 million is comprised of
Indebtedness evidenced by the Senior Subordinated Notes.
(l) CORPORATE STRUCTURE. The corporate capital and ownership
structure of the Consolidated Parties shall be as described in SCHEDULE
6.13.
(m) GOVERNMENT CONSENT. Receipt by the Agent of evidence that all
governmental, shareholder and material third party consents and approvals
necessary or desirable in connection with the financings and other
transactions contemplated hereby have been obtained except for those the
failure of which to so obtain could not reasonably be expected to have a
Material Adverse Effect.
(n) FEES AND EXPENSES. Payment by the Credit Parties of all fees
and expenses owed by them to the Lenders and the Agent, including, without
limitation, payment to the Agent of the fees set forth in the Fee Letter.
(o) FINANCIAL REQUIREMENTS. Receipt by the Agent of satisfactory
evidence that Consolidated Funded Indebtedness does not exceed $680 million
(of which at least $270 million is comprised of Indebtedness evidenced by
the Senior Subordinated Notes).
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(p) FUNDS FLOW MEMORANDUM. Receipt by the Agent of (i) a statement
of sources and uses of funds covering all payments reasonably expected to
be made by the Credit Parties in connection with the transactions
contemplated by the Credit Documents to be consummated on the Closing Date
and (ii) payment instructions with respect to each wire transfer to be made
by the Agent, or the Credit Parties on the Closing Date setting forth the
amount of such transfer, the purpose of such transfer, the name and number
of the account to which such transfer is to be made, the name and ABA
number of the bank or other financial institution where such account is
located and the name and telephone number of an individual that can be
contacted to confirm receipt of such transfer.
(q) ACCOUNT DESIGNATION LETTER. Receipt by the Agent of an account
designation letter (the "ACCOUNT DESIGNATION LETTER") in the form of
EXHIBIT 5.1(t) hereto.
(r) OTHER. Receipt by the Lenders of such other documents,
instruments, agreements or information as reasonably requested by any
Lender, including, but not limited to, information regarding litigation,
tax, accounting, labor, insurance, pension liabilities (actual or
contingent), real estate leases, material contracts, debt agreements,
property ownership and contingent liabilities of the Consolidated Parties.
5.2 CONDITIONS TO ALL EXTENSIONS OF CREDIT.
The obligations of each Lender to make, convert or extend any Loan and of
the Issuing Lender to issue or extend any Letter of Credit (including the
initial Loans and the initial Letter of Credit) are subject to satisfaction of
the following conditions:
(a) The Borrower shall have delivered (i) in the case of any
Revolving Loan or any portion of the Term Loan, an appropriate Notice of
Borrowing or Notice of Extension/Conversion or (ii) in the case of any
Letter of Credit, the Issuing Lender shall have received an appropriate
request for issuance in accordance with the provisions of Section 2.2(b);
(b) The representations and warranties set forth in Section 6
shall, subject to the limitations set forth therein, be true and correct in
all material respects as of such date (except for those which expressly
relate to an earlier date);
(c) There shall not have been commenced against any Consolidated
Party an involuntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or any case, proceeding or
other action for the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of such Person or
for any substantial part of its Property or for the winding up or
liquidation of its affairs, and such involuntary case or other case,
proceeding or other action shall remain undismissed, undischarged or
unbonded;
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(d) No Default or Event of Default shall exist and be continuing
either prior to or after giving effect thereto;
(e) No circumstances, events or conditions shall have occurred
since December 31, 1998 which would have a Material Adverse Effect; and
(f) Immediately after giving effect to the making of such Loan (and
the application of the proceeds thereof) or to the issuance of such Letter
of Credit, as the case may be, (i) the amount of the Revolving Obligations
shall not exceed the lesser of (A) the Revolving Committed Amount and (B)
the Borrowing Base LESS the outstanding Term Loan, (ii) the LOC Obligations
shall not exceed the LOC Committed Amount and (iii) the outstanding
Swingline Loans shall not exceed the Swingline Committed Amount.
The delivery of each Notice of Borrowing, each Notice of Extension/Conversion
and each request for a Letter of Credit pursuant to Section 2.2(b) shall
constitute a representation and warranty by the Credit Parties of the
correctness of the matters specified in subsections (b), (c), (d), (e) and (f)
above.
SECTION 6
REPRESENTATIONS AND WARRANTIES
The Credit Parties hereby represent and warrant to the Agent and each
Lender that:
6.1 FINANCIAL CONDITION.
The financial statements delivered to the Lenders pursuant to Section
5.1(c) and Sections 7.1(a) and (b) (i) have been prepared in accordance with
GAAP and (ii) present fairly in all material respects (on the basis disclosed in
the footnotes to such financial statements) the consolidated and consolidating
financial condition, results of operations and cash flows of the Consolidated
Parties as of such date and for such periods.
6.2 NO MATERIAL CHANGE.
Since September 30, 2001 (a) there has been no development or event
relating to or affecting a Consolidated Party which has had or could reasonably
be expected to have a Material Adverse Effect and (b) except as otherwise
permitted under this Credit Agreement, no dividends or other distributions have
been declared, paid or made upon the Capital Stock in a Consolidated Party nor
has any of the Capital Stock in a Consolidated Party been redeemed, retired,
purchased or otherwise acquired for value.
6.3 ORGANIZATION AND GOOD STANDING.
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Each of the Consolidated Parties (a) is duly organized, validly existing
and is in good standing under the laws of the jurisdiction of its incorporation
or organization, (b) has the corporate or other necessary power and authority,
and the legal right, to own and operate its property, to lease the property it
operates as lessee and to conduct the business in which it is currently engaged
and (c) is duly qualified as a foreign entity 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, other than in such
jurisdictions where the failure to be so qualified and in good standing could
reasonably be expected to have a Material Adverse Effect.
6.4 POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.
Each of the Credit Parties has the corporate or other necessary power and
authority, and the legal right, to make, deliver and perform the Credit
Documents to which it is a party, and in the case of the Borrower, to obtain
extensions of credit hereunder, and has taken all necessary corporate action to
authorize the borrowings and other extensions of credit on the terms and
conditions of this Credit Agreement and to authorize the execution, delivery and
performance of the Credit Documents to which it is a party. No consent or
authorization of, filing with, notice to or other similar act by or in respect
of, any Governmental Authority or any other Person is required to be obtained or
made by or on behalf of any Credit Party in connection with the borrowings or
other extensions of credit hereunder or with the execution, delivery,
performance, validity or enforceability of the Credit Documents to which such
Credit Party is a party, except for filings to perfect the Liens created by the
Collateral Documents and filings required from time to time by the Securities
Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
This Credit Agreement has been, and each other Credit Document to which any
Credit Party is a party will be, duly executed and delivered on behalf of the
Credit Parties. This Credit Agreement constitutes, and each other Credit
Document to which any Credit Party is a party when executed and delivered will
constitute, a legal, valid and binding obligation of such Credit Party
enforceable against such party in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
6.5 NO CONFLICTS.
Neither the execution and delivery of the Credit Documents, nor the
consummation of the transactions contemplated therein, nor performance of and
compliance with the terms and provisions thereof by such Credit Party will (a)
violate or conflict with any provision of its articles or certificate of
incorporation or bylaws or other organizational or governing documents of such
Person, (b) violate, contravene or conflict with any Requirement of Law or any
other law, regulation (including, without limitation, Regulation T, U or X),
order, writ, judgment, injunction, decree or permit applicable to it except
where such violation, conflict or contravention could not reasonably be expected
to have a Material Adverse Effect, (c) violate, contravene or conflict with
contractual provisions of, or cause an event of default under, any indenture,
loan agreement,
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mortgage, deed of trust, contract or other agreement or instrument to which it
is a party or by which it may be bound, the violation of which could reasonably
be expected to have a Material Adverse Effect, or (d) result in or require the
creation of any Lien (other than those contemplated in or created in connection
with the Credit Documents) upon or with respect to its properties.
6.6 NO DEFAULT.
No Consolidated Party is in default in any respect under any contract,
lease, loan agreement, indenture, mortgage, security agreement or other
agreement or obligation to which it is a party or by which any of its properties
is bound which default could reasonably be expected to have a Material Adverse
Effect. No Default or Event of Default has occurred or exists except as
previously disclosed in writing to the Lenders.
6.7 OWNERSHIP.
Each Consolidated Party has (i) good and marketable fee simple title to or
valid leasehold interests in all of its real property, including, without
limitation, the Mortgaged Real Estate (all such real property and the nature of
such Borrower's or any Subsidiary's interest therein is disclosed on SCHEDULE
6.7) and (ii) good and marketable title to all of its other assets, in each case
subject to no Liens other than Permitted Liens. Each Consolidated Party enjoys
peaceful and undisturbed possession of all its real property, including, without
limitation, the Mortgaged Real Estate, and there is no pending or, to the best
of their knowledge, threatened condemnation proceeding relating to any such real
property. The leases with respect to the leased property, together with any
leases of real property entered into by any Credit Party after the Closing Date,
are referred to collectively as the "Leases." All of the real property and the
structures thereon and other tangible assets owned, leased or used by any Credit
Party in the conduct of its business are (a) insured to the extent and in a
manner customary in the industry in which the Credit Parties are engaged, (b)
structurally sound with no known material defects, (c) in good operating
condition and repair, subject to ordinary wear and tear, (d) not in need of
maintenance or repair except for ordinary, routine maintenance and repair the
cost of which would not be material, (e) sufficient for the operation of the
business of such Credit Party as presently conducted thereon and (f) in
conformity with all applicable laws, ordinances, orders, regulations and other
requirements (including applicable zoning, environmental, motor vehicle safety,
occupational safety and health laws and regulations) relating thereto, except
where the failure to comply or conform with any of the foregoing could not
reasonably be expected to have a Material Adverse Effect.
6.8 INDEBTEDNESS.
Except as otherwise permitted under Section 8.1, the Consolidated Parties
have no Indebtedness.
6.9 LITIGATION.
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There are no actions, suits or legal, equitable, arbitration or
administrative proceedings, pending or, to the knowledge of any Credit Party,
threatened against any Consolidated Party which could reasonably be expected to
have a Material Adverse Effect.
6.10 TAXES.
Each Consolidated Party 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) known
by such Consolidated Party to be due and owing by it, except for such taxes (i)
which are not yet delinquent or (ii) that are being contested in good faith and
by proper proceedings, and against which adequate reserves are being maintained
in accordance with GAAP. No Credit Party is aware as of the Amendment No. 5
Effective Date of any proposed tax assessments against it or any other
Consolidated Party.
6.11 COMPLIANCE WITH LAW.
Each Consolidated Party is in compliance with all Requirements of Law and
all other laws, rules, regulations, orders and decrees (including without
limitation Environmental Laws) applicable to it, or to its properties, unless
such failure to comply could not reasonably be expected to have a Material
Adverse Effect.
6.12 ERISA.
(a) During the five-year period prior to the date on which this
representation is made or deemed made: (i) no ERISA Event has occurred,
and, to the best knowledge of the Credit Parties, no event or condition has
occurred or exists as a result of which any ERISA Event could reasonably be
expected to occur, with respect to any Plan; (ii) no "accumulated funding
deficiency," as such term is defined in Section 302 of ERISA and Section
412 of the Code, whether or not waived, has occurred with respect to any
Plan; (iii) each Plan has been maintained, operated, and funded in
compliance with its own terms and in material compliance with the
provisions of ERISA, the Code, and any other applicable federal or state
laws; and (iv) no lien in favor of the PBGC or a Plan has arisen or is
reasonably likely to arise on account of any Plan.
(b) The actuarial present value of all "benefit liabilities" (as
defined in Section 4001(a)(16) of ERISA), whether or not vested, under each
Single Employer Plan, as of the last annual valuation date prior to the
date on which this representation is made or deemed made (determined, in
each case, in accordance with Financial Accounting Standards Board
Statement 87, utilizing the actuarial assumptions used in such Plan's most
recent actuarial valuation report), did not exceed as of such valuation
date the fair market value of the assets of such Plan.
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(c) Except as would not have a Material Adverse Effect, neither any
Consolidated Party nor any ERISA Affiliate has incurred, or, to the best
knowledge of the Credit Parties, could be reasonably expected to incur, any
withdrawal liability under ERISA to any Multiemployer Plan or Multiple
Employer Plan. Except as would not have a Material Adverse Effect, neither
any Consolidated Party nor any ERISA Affiliate would become subject to any
withdrawal liability under ERISA if any Consolidated Party or any ERISA
Affiliate were to withdraw completely from all Multiemployer Plans and
Multiple Employer Plans as of the valuation date most closely preceding the
date on which this representation is made or deemed made. Neither any
Consolidated Party nor any ERISA Affiliate has received any notification
that any Multiemployer Plan is in reorganization (within the meaning of
Section 4241 of ERISA), is insolvent (within the meaning of Section 4245 of
ERISA), or has been terminated (within the meaning of Title IV of ERISA),
and no Multiemployer Plan is, to the best knowledge of the Credit Parties,
reasonably expected to be in reorganization, insolvent, or terminated.
(d) No prohibited transaction (within the meaning of Section 406 of
ERISA or Section 4975 of the Code) or breach of fiduciary responsibility
has occurred with respect to a Plan which has subjected or may subject any
Consolidated Party or any ERISA Affiliate to any liability under Sections
406, 409, 502(i), or 502(l) of ERISA or Section 4975 of the Code, or under
any agreement or other instrument pursuant to which any Consolidated Party
or any ERISA Affiliate has agreed or is required to indemnify any Person
against any such liability.
(e) Neither any Consolidated Party nor any ERISA Affiliate has any
material liability with respect to "expected post-retirement benefit
obligations" within the meaning of the Financial Accounting Standards Board
Statement 106. Each Plan which is a welfare plan (as defined in Section
3(1) of ERISA) to which Sections 601-609 of ERISA and Section 4980B of the
Code apply has been administered in compliance in all material respects of
such sections.
(f) Neither the execution and delivery of this Credit Agreement nor
the consummation of the financing transactions contemplated thereunder will
involve any transaction which is subject to the prohibitions of Sections
404, 406 or 407 of ERISA or in connection with which a tax could be imposed
pursuant to Section 4975 of the Code. The representation by the Credit
Parties in the preceding sentence is subject, in the event that the source
of the funds used by the Lenders in connection with this transaction is an
insurance company's general asset account, to the application of Prohibited
Transaction Class Exemption 95-60, 60 Fed. Reg. 35,925 (1995), compliance
with the regulations issued under Section 401(c)(1)(A) of ERISA, or the
issuance of any other prohibited transaction exemption or similar relief,
to the effect that assets in an insurance company's general asset account
do not constitute assets of an "employee benefit plan" within the meaning
of Section 3(3) of ERISA of a "plan" within the meaning of Section
4975(e)(1) of the Code.
6.13 SUBSIDIARIES.
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Set forth on SCHEDULE 6.13 is a complete and accurate list of all
Subsidiaries of each Consolidated Party. Information on SCHEDULE 6.13 includes
jurisdiction of incorporation, the number of shares of each class of Capital
Stock outstanding, the number and percentage of outstanding shares of each class
owned (directly or indirectly) by such Consolidated Party; and the number and
effect, if exercised, of all outstanding options, warrants, rights of conversion
or purchase and all other similar rights with respect thereto. The outstanding
Capital Stock of all such Subsidiaries is validly issued, fully paid and
non-assessable and is owned by each such Consolidated Party, directly or
indirectly, free and clear of all Liens (other than those arising under or
contemplated in connection with the Credit Documents). Other than as set forth
in SCHEDULE 6.13, no Subsidiary has outstanding any securities convertible into
or exchangeable for its Capital Stock nor does any such Person have outstanding
any rights to subscribe for or to purchase or any options for the purchase of,
or any agreements providing for the issuance (contingent or otherwise) of, or
any calls, commitments or claims of any character relating to its Capital Stock.
6.14 GOVERNMENTAL REGULATIONS, ETC.
(a) No part of the Letters of Credit or proceeds of the Loans will
be used, directly or indirectly, for the purpose of purchasing or carrying
any "margin stock" within the meaning of Regulation U, or for the purpose
of purchasing or carrying or trading in any securities. If requested by any
Lender or the Agent, the Borrower will furnish to the Agent and each Lender
a statement to the foregoing effect in conformity with the requirements of
FR Form U-1 referred to in Regulation U. No indebtedness being reduced or
retired out of the proceeds of the Loans was or will be incurred for the
purpose of purchasing or carrying any margin stock within the meaning of
Regulation U or any "margin security" within the meaning of Regulation T.
"Margin stock" within the meaning of Regulation U does not constitute more
than 25% of the value of the consolidated assets of the Consolidated
Parties. None of the transactions contemplated by this Credit Agreement
(including, without limitation, the direct or indirect use of the proceeds
of the Loans) will violate or result in a violation of the Securities Act
of 1933, as amended, or the Securities Exchange Act of 1934, as amended, or
regulations issued pursuant thereto, or Regulation T, U or X.
(b) No Consolidated Party is subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act or the
Investment Company Act of 1940, each as amended. In addition, no
Consolidated Party is (i) an "investment company" registered or required to
be registered under the Investment Company Act of 1940, as amended, and is
not controlled by such a company, or (ii) a "holding company", or a
"subsidiary company" of a "holding company", or an "affiliate" of a
"holding company" or of a "subsidiary" of a "holding company", within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
(c) As of the Amendment No. 5 Effective Date, no director,
executive officer or principal shareholder of any Consolidated Party is a
director, executive officer or principal shareholder of any Lender. For the
purposes hereof the terms "director", "executive
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officer" and "principal shareholder" (when used with reference to any
Lender) have the respective meanings assigned thereto in Regulation O
issued by the Board of Governors of the Federal Reserve System.
(d) Each Consolidated Party has obtained and holds in full force
and effect, all franchises, licenses, permits, certificates,
authorizations, qualifications, accreditations, easements, rights of way
and other rights, consents and approvals which are necessary for the
ownership of its respective Property and to the conduct of its respective
businesses as presently conducted except where the failure to so obtain or
maintain could not reasonably be expected to have a Material Adverse
Effect.
(e) No Consolidated Party is in violation of any applicable
statute, regulation or ordinance of the United States of America, or of any
state, city, town, municipality, county or any other jurisdiction, or of
any agency thereof (including without limitation, environmental laws and
regulations), which violation could have a Material Adverse Effect.
(f) Each Consolidated Party is current with all material reports
and documents, if any, required to be filed with any state or federal
securities commission or similar agency and is in full compliance in all
material respects with all applicable rules and regulations of such
commissions.
6.15 PURPOSE OF LOANS AND LETTERS OF CREDIT.
The proceeds of the Loans hereunder shall be used solely by the Borrower
(i) for working capital, (ii) for refinancing certain existing Indebtedness of
the Consolidated Parties, (iii) to make Permitted Acquisitions (and to pay
related fees and expenses) and (iv) for general corporate purposes.
6.16 ENVIRONMENTAL MATTERS.
Except as would not have a Material Adverse Effect,
(a) Each of the facilities and properties owned, leased or operated
by the Consolidated Parties (the "PROPERTIES") and all operations at the
Properties are in compliance with all applicable Environmental Laws, and
there is no violation of any Environmental Law with respect to the
Properties or the businesses operated by the Consolidated Parties (the
"BUSINESSES"), and there are no conditions relating to the Businesses or
Properties that could give rise to liability under any applicable
Environmental Laws.
(b) None of the Properties contains, or has previously contained,
any Materials of Environmental Concern at, on or under the Properties in
amounts or concentrations that constitute or constituted a violation of, or
could give rise to liability under, Environmental Laws.
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(c) No Consolidated Party has received any written or verbal notice
of, or inquiry from any Governmental Authority regarding, any 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 Businesses, nor does any
Consolidated Party have knowledge or reason to believe that any such notice
will be received or is being threatened.
(d) Materials of Environmental Concern have not been transported or
disposed of from the Properties, or generated, treated, stored or disposed
of at, on or under any of the Properties or any other location, in each
case by or on behalf of any Consolidated Party in violation of, or in a
manner that could give rise to liability under, any applicable
Environmental Law.
(e) No judicial proceeding or governmental or administrative action
is pending or, to the best knowledge of any Credit Party, threatened, under
any Environmental Law to which any Consolidated Party is or will be named
as a party, 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 Consolidated Parties, the Properties or the Businesses.
(f) There has been no release, or threat of release, of Materials
of Environmental Concern at or from the Properties, or arising from or
related to the operations (including, without limitation, disposal) of any
Consolidated Party in connection with the Properties or otherwise in
connection with the Businesses, in violation of or in amounts or in a
manner that could give rise to liability under Environmental Laws.
6.17 INTELLECTUAL PROPERTY.
Each Consolidated Party owns, or has the legal right to use, all
trademarks, tradenames, copyrights, technology, know-how and processes (the
"INTELLECTUAL PROPERTY") necessary for each of them to conduct its business as
currently conducted except for those the failure to own or have such legal right
to use could not reasonably be expected to have a Material Adverse Effect. Set
forth on SCHEDULE 6.17 is a list of all Intellectual Property owned by each
Consolidated Party or that any Consolidated Party has the right to use. Except
as provided on SCHEDULE 6.17, 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 any
Credit Party know of any such claim, and to the Credit Parties' knowledge the
use of such Intellectual Property by any Consolidated Party 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.
6.18 SOLVENCY.
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Each Credit Party is and, after consummation of the transactions
contemplated by this Credit Agreement, will be Solvent.
6.19 INVESTMENTS.
All Investments of each Consolidated Party are Permitted Investments.
6.20 LOCATION OF COLLATERAL.
Set forth on SCHEDULE 6.20 is a list of all locations where any tangible
personal property of a Consolidated Party is located, including county and state
where located. Set forth on SCHEDULE 6.20 is the chief executive office and
principal place of business of each Consolidated Party. The books and records of
the Consolidated Parties and all chattel paper and all records of accounts are
located at the principal places of business and chief executive offices of the
Consolidated Parties. There is no jurisdiction in which any Consolidated Party
has any assets, equipment or Inventory (except for vehicles, Rental Equipment
under lease, Inventory in transit for processing, or immaterial items) other
than those locations listed on SCHEDULE 6.20. Set forth on SCHEDULE 6.20 is a
true, correct and complete list of the legal names and addresses of each
warehouseman, filler, processor and packer at which Inventory is stored. None of
the receipts received by any Consolidated Party from any warehouseman, filler,
processor or packer states that the goods covered thereby are to be delivered to
bearer or to the order of a named person or to a named person and such named
person's assigns.
6.21 DISCLOSURE.
Neither this Credit Agreement nor any financial statements delivered to the
Lenders nor any other document, certificate or statement furnished to the
Lenders by or on behalf of any Consolidated Party in connection with the
transactions contemplated hereby contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
contained therein or herein not misleading.
6.22 NO BURDENSOME RESTRICTIONS.
No Consolidated Party is a party to any agreement or instrument, or is in
breach of or in violation of 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.
6.23 BROKERS' FEES.
Except for fees payable to First Union Securities, Inc. in connection with
the closing and syndication of this Credit Agreement, no Consolidated Party 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 to occur on the Amendment No. 5
Effective Date.
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6.24 LABOR MATTERS.
Except as set forth on SCHEDULE 6.24, there are no collective bargaining
agreements or Multiemployer Plans covering the employees of a Consolidated Party
as of the Amendment No. 5 Effective Date and none of the Consolidated Parties
has suffered any strikes, walkouts, work stoppages or other material labor
difficulty within the last five years.
6.25 [INTENTIONALLY OMITTED].
6.26 MATERIAL CONTRACTS.
Attached hereto as SCHEDULE 6.26 is a true, correct and complete list of
all the Material Contracts currently in effect on the Amendment No. 5 Effective
Date. All of the Material Contracts are in full force and effect.
6.27 SENIOR DEBT.
The Loans and other extensions of credit under this Credit Agreement
constitute "Senior Debt" under the indenture for the Senior Subordinated Notes.
6.28 LIENS; INVENTORY.
There are no Liens in favor of third parties with respect to any of the
Collateral, including, without limitation, with respect to the Inventory,
wherever located, other than Permitted Liens. To the best of each Credit Party's
knowledge, no lessor, warehouseman, filler, processor or packer of such Credit
Party has granted any Lien with respect to the Inventory maintained by such
Credit Party at the property of any such lessor, warehousemen, filler, processor
or packer. Upon the proper filing of financing statements and the proper
recordation of other applicable documents with the appropriate filing or
recordation offices in each of the necessary jurisdictions, the security
interests granted pursuant to the Credit Documents constitute and shall at all
times constitute valid and enforceable first, prior and perfected Liens on the
Collateral. The Credit Parties are or will be at the time additional Collateral
is acquired by them, the absolute owners of the Collateral with full right to
pledge, sell, consign, transfer and create a Lien therein, free and clear of any
and all Liens in favor of third parties, except Permitted Liens.
6.29 STATUS OF ACCOUNTS.
Each Account of each Credit Party is based on an actual and bona fide sale
and delivery of goods or rendition of services to customers, made by such Credit
Party in the ordinary course of its business, except for those Accounts made by
such Credit Party outside the ordinary course of business which, individually or
in the aggregate, could not reasonably be expected to have a Material Adverse
Effect; the goods and inventory being sold or leased and the Accounts created
are its exclusive property and are not and shall not be subject to any Lien,
consignment
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arrangement, encumbrance, security interest or financing statement whatsoever,
other than the Permitted Liens; and such Credit Party's customers have accepted
the goods or services, owe and are obligated to pay the full amounts stated in
the invoices according to their terms, without any dispute, offset, defense,
counterclaim or contra that could reasonably be expected to have, when
aggregated with any such other disputes, offsets, defenses, counterclaims or
contras, a Material Adverse Effect. Each Credit Party confirms to the Lenders
that any and all taxes or fees relating to its business, its sales, the Accounts
or the goods relating thereto, are its sole responsibility and that same will be
paid by such Credit Party when due (unless duly contested and adequately
reserved for) and that none of said taxes or fees is or will become a lien on or
claim against the Accounts.
6.30 TRADE SUPPLIERS.
Attached hereto as SCHEDULE 6.30 is a true, correct and complete list of
all of the suppliers who have sold goods to any Credit Party (or their
predecessor entities) during the twelve-month period ended November 30, 2001 for
an amount representing five (5) percent or more of the accounts of such Credit
Party payable for such year.
SECTION 7
AFFIRMATIVE COVENANTS
Each Credit Party hereby covenants and agrees that, so long as this Credit
Agreement is in effect or any Credit Party Obligations shall remain outstanding
(other than contingent indemnity obligations), and until all of the Commitments
hereunder shall have terminated:
7.1 INFORMATION COVENANTS.
The Credit Parties will furnish, or cause to be furnished, to the Agent and
each of the Lenders:
(a) ANNUAL FINANCIAL STATEMENTS. As soon as available, and in any
event within 90 days after the close of each fiscal year of the
Consolidated Parties, (i) a consolidated balance sheet and income statement
of the Consolidated Parties, as of the end of such fiscal year, together
with related consolidated statements of operations and retained earnings
and of cash flows for such fiscal year, setting forth in comparative form
consolidated figures for the preceding fiscal year, all such financial
information described above to be in reasonable form and detail and audited
by independent certified public accountants of recognized national standing
reasonably acceptable to the Agent and whose opinion shall be to the effect
that such financial statements have been prepared in accordance with GAAP
(except for changes with which such accountants concur) and shall not be
limited as to the scope of the audit or qualified as to the status of the
Consolidated Parties as a going concern, and (b) unaudited consolidating
balance sheets and income statements of the Consolidated Parties
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for each Operating Region, as of the end of such fiscal year, together with
related consolidating statements of operations and retained earnings and of
cash flows for such fiscal year for each Operating Region, in each case
setting forth in comparative form consolidating figures for the preceding
fiscal year for each Operating Region, all such financial information
described above to be in reasonable form and detail and reasonably
acceptable to the Agent, and accompanied by a certificate of the chief
financial officer of the Borrower to the effect that such unaudited
consolidating financial statements fairly present in all material respects
the financial condition of the Consolidated Parties and have been prepared
in accordance with GAAP, subject to changes resulting from audit and normal
year-end audit adjustments and footnote disclosure.
(b) INTERIM FINANCIAL STATEMENTS.
(i) QUARTERLY FINANCIAL STATEMENTS. As soon as available, and
in any event within 45 days after the close of each fiscal quarter of the
Consolidated Parties (other than the fourth fiscal quarter, in which case
90 days after the end thereof), consolidated and consolidating (for each
Operating Region) balance sheets and income statements of the Consolidated
Parties, as of the end of such fiscal quarter, together with related
consolidated and consolidating (for each Operating Region) statements of
operations and retained earnings and of cash flows for such fiscal quarter,
in each case setting forth in comparative form consolidated and
consolidating (for each Operating Region) figures for the corresponding
period of the preceding fiscal year, all such financial information
described above to be in reasonable form and detail and reasonably
acceptable to the Agent, and accompanied by a certificate of the chief
financial officer of the Borrower to the effect that such quarterly
financial statements fairly present in all material respects the financial
condition of the Consolidated Parties and have been prepared in accordance
with GAAP, subject to changes resulting from audit and normal year-end
audit adjustments.
(ii) MONTHLY FINANCIAL STATEMENTS. As soon as available, and in
any event within 30 days after the close of each fiscal month of the
Consolidated Parties (other than the last month of each fiscal quarter),
consolidated and consolidating (for each Operating Region) financial
statements of the Consolidated Parties as of the end of such month
substantially in the form of the monthly financial statements prepared in
connection with the fiscal month ended October 31, 2001 and in form and
detail reasonably acceptable to the Agent (as such form may be updated or
modified from time to time in a manner reasonably acceptable to the Agent).
(c) OFFICER'S CERTIFICATE. At the time of delivery of the financial
statements provided for in Sections 7.1(a) and 7.1(b)(i) above, a
certificate of the chief financial officer of the Borrower substantially in
the form of EXHIBIT 7.1(c), (i) demonstrating compliance with the financial
covenants contained in Section 7.11 by calculation thereof as of the end of
each such fiscal period, (ii) stating that no Default or Event of Default
exists, or if any Default or Event of Default does exist, specifying the
nature and extent thereof and what action the Credit Parties propose to
take with respect thereto and (iii) setting forth a
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complete listing of the Rental Equipment of the Credit Parties subject to
any Operating Lease or Capital Lease.
(d) BORROWING BASE CERTIFICATES. A report on the Borrowing Base (a
"Borrowing Base Certificate") substantially in the form of EXHIBIT 7.1(d)
(i) on or before the 15th day after the end of each month (as of the last
day of such month), together with a monthly summary of Parts and Supplies
Inventory for each Operating Region, a monthly summary of Rental Equipment
for each Operating Region, a monthly summary of Equipment Held for Resale
for each Operating Region, a monthly Rental Equipment summary roll forward
report for the Original Brambles Eligible Rental Equipment, a monthly
summary of accounts receivable aging and accounts payable aging and monthly
sales and cash receipt reports (each as of the last day of such month),
(ii) simultaneously with the consummation of any Asset Disposition for
which a mandatory prepayment is required hereunder giving effect to such
Asset Disposition and (iii) promptly as of any other date requested by the
Agent, together in each case with such other supporting data as may
reasonably be requested by the Agent;
(e) ANNUAL BUDGETS. No later than 30 days after the beginning of
each fiscal year, a budget for such fiscal year of the Borrower which
includes (i) a projected consolidated and consolidating (for each Operating
Region) balance sheet and statement of income of the Credit Parties for
such fiscal year and a projected consolidated and consolidating (for each
Operating Region) statement of cash flows of the Credit Parties for such
fiscal year and (ii) projected consolidated and consolidating (for each
Operating Region) balance sheets, statements of income and statements of
cash flows of the Credit Parties on a monthly basis for such fiscal year.
(f) ACCOUNTANT'S CERTIFICATE. Within the period for delivery of the
annual financial statements provided in Section 7.1(a), a certificate of
the accountants conducting the annual audit stating that they have reviewed
this Credit Agreement and stating further whether, in the course of their
audit, they have become aware of any Default or Event of Default and, if
any such Default or Event of Default exists, specifying the nature and
extent thereof.
(g) AUDITOR'S REPORTS. Promptly upon receipt thereof, a copy of any
other report or "management letter" submitted by independent accountants to
any Consolidated Party in connection with any annual, interim or special
audit of the books of such Person.
(h) REPORTS. Promptly upon transmission or receipt thereof, (i)
copies of any filings and registrations with, and reports to or from, the
Securities and Exchange Commission, or any successor agency, and copies of
all financial statements, proxy statements, notices and reports as any
Consolidated Party shall send to its shareholders generally or to a holder
of any Indebtedness owed by any Consolidated Party in its capacity as such
a holder and (ii) upon the request of the Agent, all reports and written
information to
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and from the United States Environmental Protection Agency, or any state or
local agency responsible for environmental matters, the United States
Occupational Health and Safety Administration, or any state or local agency
responsible for health and safety matters, or any successor agencies or
authorities concerning environmental, health or safety matters.
(i) NOTICES. Upon obtaining knowledge thereof, the Credit Parties
will give written notice to the Agent immediately of (i) the occurrence of
an event or condition consisting of a Default or Event of Default,
specifying the nature and existence thereof and what action the Credit
Parties propose to take with respect thereto, and (ii) the occurrence of
any of the following with respect to any Consolidated Party: (A) the
pendency or commencement of any litigation, arbitral or governmental
proceeding against such Consolidated Party which if adversely determined
could reasonably be expected to have a Material Adverse Effect, (B) the
institution of any proceedings against such Consolidated Party with respect
to, or the receipt of notice by such Consolidated Party of potential
liability or responsibility for violation, or alleged violation of any
federal, state or local law, rule or regulation, including but not limited
to, Environmental Laws, the violation of which could reasonably be expected
to have a Material Adverse Effect, or (C) any notice or determination
concerning the imposition of any withdrawal liability by a Multiemployer
Plan against such Consolidated Party or any ERISA Affiliate, the
determination that a Multiemployer Plan is, or is expected to be, in
reorganization within the meaning of Title IV of ERISA or the termination
of any Plan.
(j) ERISA. Upon obtaining knowledge thereof, the Credit Parties
will give written notice to the Agent promptly (and in any event within
five business days) of: (i) any event or condition, including, but not
limited to, any Reportable Event, that constitutes, or might reasonably
lead to, an ERISA Event; (ii) with respect to any Multiemployer Plan, the
receipt of notice as prescribed in ERISA or otherwise of any withdrawal
liability assessed against the Credit Parties or any ERISA Affiliates, or
of a determination that any Multiemployer Plan is in reorganization or
insolvent (both within the meaning of Title IV of ERISA); (iii) the failure
to make full payment on or before the due date (including extensions)
thereof of all amounts which any Consolidated Party or any ERISA Affiliate
is required to contribute to each Plan pursuant to its terms and as
required to meet the minimum funding standard set forth in ERISA and the
Code with respect thereto; or (iv) any change in the funding status of any
Plan that could have a Material Adverse Effect, together with a description
of any such event or condition or a copy of any such notice and a statement
by the chief financial officer of the Borrower briefly setting forth the
details regarding such event, condition, or notice, and the action, if any,
which has been or is being taken or is proposed to be taken by the Credit
Parties with respect thereto. Promptly upon request, the Credit Parties
shall furnish the Agent and the Lenders with such additional information
concerning any Plan as may be reasonably requested, including, but not
limited to, copies of each annual report/return (Form 5500 series), as well
as all schedules and attachments thereto required to be filed with the
Department of Labor and/or the Internal Revenue Service pursuant to ERISA
and the Code, respectively, for each "plan year" (within the meaning of
Section 3(39) of ERISA).
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(k) ENVIRONMENTAL.
(i) Upon the reasonable written request of the Agent, the
Credit Parties will furnish or cause to be furnished to the Agent, at
the Credit Parties' expense, a report of an environmental assessment
of reasonable scope, form and depth, (including, where appropriate,
invasive soil or groundwater sampling) by a consultant reasonably
acceptable to the Agent as to the nature and extent of the presence
of any Materials of Environmental Concern on any Properties (as
defined in Section 6.16) and as to the compliance by any Consolidated
Party with Environmental Laws at such Properties. If the Credit
Parties fail to deliver such an environmental report within
seventy-five (75) days after receipt of such written request then the
Agent may arrange for same, and the Consolidated Parties hereby grant
to the Agent and their representatives access to the Properties to
reasonably undertake such an assessment (including, where
appropriate, invasive soil or groundwater sampling). The reasonable
cost of any assessment arranged for by the Agent pursuant to this
provision will be payable by the Credit Parties on demand and added
to the obligations secured by the Collateral Documents.
(ii) The Consolidated Parties will conduct and complete all
investigations, studies, sampling, and testing and all remedial,
removal, and other actions necessary to address all Materials of
Environmental Concern on, from or affecting any of the Properties to
the extent necessary to be in compliance with all Environmental Laws
and with the validly issued orders and directives of all Governmental
Authorities with jurisdiction over such Properties to the extent any
failure could have a Material Adverse Effect.
(l) ADDITIONAL PATENTS AND TRADEMARKS. At the time of delivery of
the financial statements and reports provided for in Section 7.1(a), a
report signed by the chief financial officer or treasurer of the Borrower
setting forth (i) a list of registration numbers for all patents,
trademarks, service marks, tradenames and copyrights awarded to any
Consolidated Party since the last day of the immediately preceding fiscal
year and (ii) a list of all patent applications, trademark applications,
service ▇▇▇▇ applications, trade name applications and copyright
applications submitted by any Consolidated Party since the last day of the
immediately preceding fiscal year and the status of each such application,
all in such form as shall be reasonably satisfactory to the Agent.
(m) OTHER INFORMATION. With reasonable promptness upon any such
request, such other information regarding the business, properties or
financial condition of any Consolidated Party as the Agent or the Required
Lenders may reasonably request.
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7.2 PRESERVATION OF EXISTENCE AND FRANCHISES.
Except as a result of or in connection with a merger of a Subsidiary
permitted under Section 8.4, each Credit Party will, and will cause each of its
Subsidiaries to, do all things necessary to preserve and keep in full force and
effect its existence, rights, franchises and authority except where the failure
to so preserve could not reasonably be expected to have a Material Adverse
Effect.
7.3 BOOKS AND RECORDS.
Each Credit Party will, and will cause each of its Subsidiaries to, keep
complete and accurate books and records of its transactions in accordance with
good accounting practices on the basis of GAAP (including the establishment and
maintenance of appropriate reserves).
7.4 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 if
noncompliance with any such law, rule, regulation, order or restriction could
reasonably be expected to have a Material Adverse Effect.
7.5 PAYMENT OF TAXES AND OTHER INDEBTEDNESS.
Each Credit Party will, and will cause each of its Subsidiaries to, pay and
discharge (a) all taxes, assessments and governmental charges or levies imposed
upon it, or upon its income or profits, or upon any of its properties, before
they shall become delinquent, (b) all lawful claims (including claims for labor,
materials and supplies) which, if unpaid, might give rise to a Lien upon any of
its properties, and (c) except as prohibited hereunder, all of its other
Indebtedness as it shall become due; PROVIDED, HOWEVER, that no Consolidated
Party shall be required to pay any such tax, assessment, charge, levy, claim or
Indebtedness which is being contested in good faith by appropriate proceedings
and as to which adequate reserves therefor have been established in accordance
with GAAP, unless the failure to make any such payment (i) could give rise to an
immediate right to foreclose on a Lien securing such amounts or (ii) could
reasonably be expected to have a Material Adverse Effect.
7.6 INSURANCE; CONDEMNATION.
Each Credit Party will, and will cause each of the Consolidated Parties to,
maintain public liability insurance, third party property damage insurance and
replacement value insurance on the Collateral under such policies of insurance,
with such insurance companies, in such amounts and covering such risks as are
commercially reasonable and customary in the industry in which such Consolidated
Parties are engaged. In addition, the Credit Parties will obtain and maintain,
within 60 days of the Closing Date, general liability insurance in the minimum
aggregate amount of $10,000,000 for the Consolidated Parties. All policies
covering the Collateral are to name the Borrower and the Agent, on behalf of the
Lenders, as loss payees, on
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casualty insurance policies, and to name the Borrower, the Agent and the Lenders
as additional insureds on liability insurance policies, and are to contain such
other provisions as the Agent may reasonably require to fully protect the
Agent's interest in the Collateral and to any payments to be made under such
policies. True copies of all original insurance policies are to be delivered to
the Agent on or prior to the Closing Date, premium prepaid, with the loss
payable endorsement in the Agent's favor, and shall provide for not less than
thirty (30) days prior written notice to the Agent, of the exercise of any right
of cancellation. In the event any Consolidated Party fails to respond in a
timely and appropriate manner (as determined by the Agent in its reasonable
discretion) with respect to making a claim under any insurance policies required
to be maintained under this Section 7.6, the Agent shall have the right, in the
name of the Agent or any Consolidated Party, to file claims under such insurance
policies, to receive and give acquittance for any payments that may be payable
thereunder, and to execute any and all endorsements, receipts, releases,
assignments, reassignments or other documents that may be necessary to effect
the collection, compromise or settlement of any claims under any such insurance
policies. Each Credit Party will provide written notice to the Lenders of the
occurrence of any of the following events within five (5) Business Days after an
Executive Officer of such Credit Party learns of the occurrence of such event:
any asset or property owned or used by any Consolidated Party is (a) materially
damaged or destroyed, or suffers any other loss or (b) is condemned, confiscated
or otherwise taken, in whole or in part, or the use thereof is otherwise
diminished so as to render impracticable or unreasonable the use of such asset
or property for the purpose to which such asset or property was used immediately
prior to such condemnation, confiscation or taking, by exercise of the powers of
condemnation or eminent domain or otherwise, and in either case the amount of
the damage, destruction, loss or diminution in value of the Collateral is in
excess of $1,000,000 (each such event or occurrence in excess of $1,000,000
being herein referred to as a "Casualty Loss"). Each Credit Party will
diligently file and prosecute its claim or claims for any award or payment in
connection with a Casualty Loss. In the event of a Casualty Loss, the Credit
Parties will pay to the Agent, promptly upon receipt thereof, any and all
insurance proceeds and payments received by any Consolidated Party on account of
damage, destruction or loss of all or any portion of the Collateral. The Agent
may, at its election and in its sole discretion (and with the approval of the
Required Lenders if such Casualty Loss is in excess of $8,750,000), either (i)
apply the proceeds realized from Casualty Losses to payment of accrued and
unpaid interest on, or outstanding principal of, the Term Loans or the Revolving
Loans, as provided in Section 3.3(b), or (ii) pay such proceeds to the Credit
Parties to be used to repair, replace or rebuild the asset or property or
portion thereof that was the subject of the Casualty Loss. After the occurrence
and during the continuance of an Event of Default, (A) no settlement on account
of any such Casualty Loss shall be made without the consent of the Required
Lenders and (B) the Agent may participate in any such proceedings and the Credit
Parties will deliver to the Agent such documents as may be requested by the
Agent to permit such participation and will consult with the Agent, its
attorneys and agents in the making and prosecution of such claim or claims. Each
Credit Party hereby irrevocably authorizes and appoints the Agent its
attorney-in-fact, after the occurrence and during the continuance of an Event of
Default, to collect and receive any such award or payment and to file and
prosecute such claim or claims, which power of attorney shall be irrevocable and
shall be deemed to be coupled with an interest, and each Credit Party shall,
upon demand of the Agent,
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make, execute and deliver any and all assignments and other instruments
sufficient for the purpose of assigning any such award or payment to the Agent
for the benefit of the Lenders, free and clear of any encumbrances of any kind
or nature whatsoever.
7.7 MAINTENANCE OF PROPERTY.
Each Credit Party will, and will cause each of its Subsidiaries to,
maintain and preserve its properties and equipment material to the conduct of
its business in good repair, working order and condition, normal wear and tear
and casualty and condemnation excepted, and will make, or cause to be made, in
such properties and equipment from time to time all repairs, renewals,
replacements, extensions, additions, betterments and improvements thereto as may
be needed or proper, to the extent and in the manner customary for companies in
similar businesses.
7.8 PERFORMANCE OF OBLIGATIONS.
Each Credit Party will, and will cause each of its Subsidiaries to, perform
in all material respects all of its obligations under the terms of all material
agreements, indentures, mortgages, security agreements or other debt instruments
to which it is a party or by which it is bound.
7.9 USE OF PROCEEDS.
The Borrower will use the proceeds of the Loans and will use the Letters of
Credit solely for the purposes set forth in Section 6.15.
7.10 AUDITS/INSPECTIONS; APPRAISALS; INVENTORY AND OTHER COLLATERAL.
(a) Each Credit Party will, and will cause each of its Subsidiaries
to, at the expense of the Credit Parties, permit the Agent and
representatives appointed by the Agent (including, without limitation,
independent accountants, agents, attorneys, and appraisers) at any time,
upon reasonable notice, in the Agent's sole discretion or at the direction
of the Required Lenders to visit and inspect its property, including its
books and records, its accounts receivable and inventory, its facilities
and its other business assets, to conduct periodic field exams and/or
appraisals of the rental fleet of the Consolidated Parties and to make
photocopies or photographs thereof and to write down and record any
information such representative obtains and shall permit the Agent or its
representatives to investigate and verify the accuracy of information
provided to the Lenders and to discuss all such matters with the officers,
employees and representatives of such Person. Notwithstanding the
foregoing, the Credit Parties shall only be required to pay the cost and
expenses of four (4) such inspections per year unless an Event of Default
has occurred and is continuing, after which all such costs and expenses
shall be paid by the Credit Parties; such costs and expenses shall include
all out-of-pocket costs and a $750 per diem per examiner.
(b) The Credit Parties will, by each September 30 and each March 31
following the Amendment No. 5 Effective Date, deliver to each Lender and
the Agent an
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Equipment Appraisal of the Orderly Liquidation Value of the Rental
Equipment as of the last day of the six month period ending with the month
immediately preceding such date. Prior to the occurrence of an Event of
Default, upon the reasonable request of the Agent, the Borrowers shall
deliver to the Agent and the Lenders additional Equipment Appraisals of the
Orderly Liquidation Value of the Rental Equipment within 45 days of any
such request but in any event, no more than once per fiscal quarter. Upon
the occurrence and during the continuation of an Event of Default, the
Borrowers shall deliver to the Agent and the Lenders additional Equipment
Appraisals of the Orderly Liquidation Value of the Rental Equipment
promptly upon request of the Agent. All Equipment Appraisals conducted
pursuant to this SECTION 7.10 shall be at the Credit Parties' expense.
(c) The Credit Parties will conduct annually a physical count of
their Inventory and a copy of such count will be promptly supplied to the
Agent accompanied by a report of the value (valued at FIFO) of such
Inventory; PROVIDED that the Credit Parties will conduct such a physical
count at such other times and as of such dates as the Agent shall
reasonably request.
(d) Each Credit Party will, and will cause each of its Subsidiaries
to, execute and deliver to the Agent, from time to time, solely for the
Agent's convenience in maintaining a record of the Collateral, such written
statements and schedules as the Agent may reasonably require, including
without limitation those described in SECTION 7.1 of this Credit Agreement,
designating, identifying or describing the Collateral pledged to the
Lenders hereunder. Each Credit Party's or any Subsidiary's failure,
however, to promptly give the Agent such statements or schedules shall not
affect, diminish, modify or otherwise limit the Lenders' security interests
in the Collateral. Such Credit Party agrees to maintain such books and
records regarding Accounts and the other Collateral as the Agent may
reasonably require, and agrees that, upon the reasonable request of the
Agent, such books and records will reflect the Lenders' interest in the
Accounts and such other Collateral.
7.11 FINANCIAL COVENANTS.
(a) INTEREST COVERAGE RATIO. The Interest Coverage Ratio, as of the
last day of each fiscal quarter of the Consolidated Parties, shall be
greater than or equal to 2.50 to 1.00.
(b) TOTAL DEBT LEVERAGE RATIO. The Total Debt Leverage Ratio, as of
the last day of each fiscal quarter of the Consolidated Parties, shall be
less than or equal to (i) 4.25 to 1.00 for the fiscal quarters ending
December 31, 2001, March 31, 2002 and June 30, 2002, (ii) 3.85 to 1.00 for
the fiscal quarter ending September 30, 2002, and (iii) 3.50 to 1.00 for
each fiscal quarter thereafter.
(c) SENIOR DEBT LEVERAGE RATIO. The Senior Debt Leverage Ratio, as
of the last day of each fiscal quarter of the Consolidated Parties, shall
be less than or equal to (i)
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3.00 to 1.0 for the fiscal quarters ending December 31, 2001, March 31,
2002 and June 30, 2002, (ii) 2.75 to 1.00 for the fiscal quarter ending
September 30, 2002, and (iii) 2.50 to 1.00 for each fiscal quarter
thereafter.
(d) CONSOLIDATED NET WORTH. At all times Consolidated Net Worth
shall be greater than or equal to $185,000,000, as such amount may be
adjusted in the reasonable judgment of the Agent and the Borrower, as a
result of the effect of FASB 141 and 142.
(e) FIXED CHARGE COVERAGE RATIO. The Fixed Charge Coverage Ratio,
as of the last day of each fiscal quarter of the Consolidated Parties,
shall be greater than or equal to 2.00 to 1.00.
(f) INTEREST-RENTAL EXPENSE COVERAGE RATIO. The Interest-Rental
Expense Coverage Ratio, as of the last day of each fiscal quarter of the
Consolidated Parties, shall be greater than or equal to 2.15 to 1.00.
(g) CONSOLIDATED NET CAPITAL EXPENDITURES. Consolidated Net Capital
Expenditures shall not exceed (i) 40,000,000 in the aggregate during fiscal
year 2002 of the Borrower, with no more than $15,000,000 in the aggregate
in any fiscal quarter of the Borrower during such fiscal year, and (ii)
$75,000,000 in the aggregate during fiscal year 2003 of the Borrower, with
no more than $35,000,000 in the aggregate in any fiscal quarter of the
Borrower during such fiscal year.
7.12 ADDITIONAL CREDIT PARTIES.
(a) On or before the date any Person becomes a Subsidiary of any
Credit Party, the Borrower shall provide the Agent with written notice
thereof setting forth information in reasonable detail describing all of
the assets of such Person and shall (a) if such Person is a Domestic
Subsidiary of a Credit Party, cause such Person to execute a Joinder
Agreement in substantially the same form as EXHIBIT 7.12, (b) cause 100%
(if such Person is a Domestic Subsidiary of a Credit Party) or 65% (if such
Person is a direct Foreign Subsidiary of a Credit Party) of the Capital
Stock of such Person to be delivered to the Agent (together with undated
stock powers signed in blank (unless, with respect to a Foreign Subsidiary,
such stock powers are deemed unnecessary by the Agent in its reasonable
discretion under the law of the jurisdiction of incorporation of such
Person)) and pledged to the Agent pursuant to an appropriate pledge
agreement(s) in form acceptable to the Agent and (c) cause such Person to
deliver appropriate UCC-1 financing statements reasonably satisfactory to
the Agent.
(b) As soon as practicable and in any event not later than 30 days
after any Person becomes a Subsidiary of any Credit Party, the Borrower
shall cause such Person to deliver such other documentation as the Agent
may reasonably request in connection with the foregoing, including, without
limitation, real estate title insurance policies, environmental reports,
certified resolutions and other organizational and authorizing
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documents of such Person, and favorable opinions of counsel to such Person
all in form, content and scope reasonably satisfactory to the Agent.
7.13 ENVIRONMENTAL LAWS.
(a) The Consolidated Parties shall comply in all material respects
with, and take reasonable actions 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 take reasonable actions 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 would not reasonably be expected to have a Material Adverse
Effect;
(b) The Consolidated Parties shall 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 failure to do or the pendency of such proceedings would not
reasonably be expected to have a Material Adverse Effect; and
(c) The Consolidated Parties shall defend, indemnify and hold
harmless the 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 known or unknown, contingent or otherwise, arising
out of, or in any way relating to the violation of, noncompliance with or
liability under, any Environmental Law applicable to the operations of the
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 gross negligence or willful misconduct of the party seeking
indemnification therefor. The agreements in this paragraph shall survive
repayment of the Loans and all other amounts payable hereunder, and
termination of the Commitments.
7.14 COLLATERAL.
(a) If, subsequent to the Closing Date, a Credit Party shall
acquire any intellectual property, securities instruments, chattel paper or
other personal property required to be delivered to the Agent as Collateral
hereunder or under any of the Collateral Documents, the Borrower shall
notify the Agent of the same in each case as soon as practicable after the
acquisition thereof. Each Credit Party shall take such action as requested
by the Agent and at its own expense, to ensure that the Agent shall have a
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first priority perfected Lien in all personal property of the Credit
Parties (whether now owned or hereafter acquired), subject only to
Permitted Liens. Each Credit Party shall, and shall cause each of its
Subsidiaries to, adhere to the covenants regarding the location of personal
property as set forth in the Security Agreement. Each Credit Party shall
use its best efforts to deliver to the Agent (i) with respect to all real
property leased by any Credit Party as of the Closing Date, landlord
waivers and consents with respect to each such leased property no later
than 90 days after the Closing Date and (ii) with respect to all leases for
real property entered into by any Credit Party subsequent to the Closing
Date, landlord waivers and consents with respect to each such leased
property, in each case in form and substance reasonably satisfactory to the
Agent.
(b) Each Credit Party and its Subsidiaries will at its expense, for
so long as the Credit Documents remain effective, warrant and defend the
Collateral against any and all claims, demands and Liens (other than
Permitted Liens) of any third party. The Credit Parties will not, and will
not permit any of their Subsidiaries to, grant, create or permit to exist,
any Lien upon the Collateral, or any proceeds thereof, in favor of any
third party (other than Permitted Liens). Each Credit Party agrees to
comply with the requirements of all state and federal laws in order to
grant to the Lenders valid and perfected first security interest in the
Collateral (subject only to Permitted Liens). The Agent is hereby
authorized by each Credit Party to file any financing statements covering
the Collateral. Each Credit Party agrees to do whatever the Agent may
reasonably request, from time to time, by way of: filing notices of liens,
financing statements, fixture filings and amendments, renewals and
continuations thereof; cooperating with the Agent's custodians; keeping
stock records; obtaining waivers from landlords and mortgagees and from
warehousemen, fillers, processors and packers and their respective
landlords and mortgagees; paying claims, which might if unpaid, become a
Lien (other than a Permitted Lien) on the Collateral; and performing such
further acts as the Agent may reasonably require in order to effect the
purposes of this Credit Agreement and the other Credit Documents. Any and
all fees, costs and expenses of whatever kind and nature (including any
Taxes, reasonable attorneys' fees or costs for insurance of any kind),
which the Agent may incur with respect to the Collateral or the Credit
Party Obligations: in filing public notices; in preparing or filing
documents; making title examinations or rendering opinions; in protecting,
maintaining, or preserving the Collateral or its interest therein; in
enforcing or foreclosing the Liens hereunder, whether through judicial
procedures or otherwise; or in defending or prosecuting any actions or
proceedings arising out of or relating to its transactions with any
Borrower or any of its Subsidiaries under this Credit Agreement or any
other Credit Document, will be borne and paid by the Credit Parties. If
same are not promptly paid by the Credit Parties, the Agent may pay same on
the Credit Parties' behalf, and the amount thereof shall be a Credit Party
Obligation secured hereby and due to the Agent on demand.
(c) In accordance with the foregoing clause (b), each Credit Party
shall promptly notify the Agent of any delivery of Rental Equipment to a
state or county of a state in which a financing statement covering the
property of such Credit Party or any of
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its Subsidiaries has not yet been filed if the filing of a financing
statement is so required in such state or county to perfect the Agent's
security interest in the property so located and shall promptly prepare
such financing statement naming the Agent as "Secured Party" for the
Lenders and cause it to be duly filed in the appropriate filing office in
such state. In addition, each Credit Party shall (i) within sixty (30) days
following the Amendment No. 5 Effective Date and (ii) within thirty (30)
days following the acquisition of any equipment or the consummation of a
Permitted Acquisition, cause each document of title evidencing such Credit
Party's or any of its Subsidiaries' ownership of an item of equipment to
duly name on the face thereof the Agent as lienholder of such title for the
benefit of the Lenders.
(d) All equipment leases entered into by the Credit Parties with
their respective customers shall contain satisfactory provisions to the
effect that each such lease has been assigned to the Agent for the benefit
of the Lenders as collateral security for the Credit Party Obligations or
that assignment of such leases is not prohibited.
7.15 PLEDGED REAL ESTATE ASSETS.
(a) Within ninety (90) days following the Amendment No. 5 Effective
Date, each Credit Party will, and will cause each of its Subsidiaries to,
cause all of its owned real property owned as of the Amendment No. 5
Effective Date, to be subject at all times to first priority, perfected and
title insured Liens in favor of the Agent pursuant to the terms and
conditions of a Mortgage and such other security documents and instruments,
in form and substance satisfactory to the Agent, as the Agent shall
reasonably request. In connection with each Mortgage delivered pursuant to
this SECTION 7.15, the Agent shall be entitled to receive a title report,
title insurance, such maps, plats or surveys as it may reasonably request,
flood insurance as required by law, evidence that the subject real property
is in compliance with all zoning and environmental laws and such other
information and documents as the Agent shall reasonably request.
(b) Upon the request of the Agent, each Credit Party will, and will
cause each of its Subsidiaries to, cause (a) all of its owned real property
and (b) any Material Leased Site (defined below), whether owned or leased
as of, or subsequent to, the Amendment No. 5 Effective Date, to be subject
at all times to first priority, perfected and title insured Liens in favor
of the Agent pursuant to the terms and conditions of such security
documents and instruments, in form and substance satisfactory to the Agent,
as the Agent shall reasonably request. In connection with any Mortgage in
favor of the Agent delivered pursuant to this SECTION 7.15, the Agent shall
be entitled to receive a title report, title insurance, such maps, plats or
surveys as it may reasonably request, flood insurance as required by law,
evidence that the subject real property is in compliance with all zoning
and environmental laws and such other information and documents as the
Agent shall reasonably request. In furtherance of the foregoing terms of
this Section 7.15, each Credit Party agrees to promptly provide the Agent
with written notice of the acquisition by, or the entering into a lease by,
any Consolidated Party of any real property assets
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having a market value greater than $250,000 or annual lease payments in
excess of $250,000 (a "Material Leased Site"), setting forth in reasonable
detail the location and a description of the real property assets so
acquired or leased.
7.16 SCHEDULES OF ACCOUNTS AND PURCHASE ORDERS.
In furtherance of the continuing assignment and security interest in the
Accounts of each Credit Party granted pursuant to the Security Agreement, in
connection with the creation of Accounts, upon the reasonable request of the
Agent, each Credit Party will execute and deliver to the Agent in such form and
manner as the Agent may reasonably require, solely for its convenience in
maintaining records of collateral, such confirmatory schedules of Accounts,
customer lists and other appropriate reports designating, identifying and
describing the Accounts. In addition, upon the Agent's reasonable request, each
Credit Party will provide the Agent with copies of agreements with, or purchase
orders from, the customers of each Credit Party and its Subsidiaries, and copies
of invoices to customers, proof of shipment or delivery and such other
documentation and information relating to said Accounts and other collateral as
the Agent may reasonably require. Failure to provide the Agent with any of the
foregoing shall in no way affect, diminish, modify or otherwise limit the
security interests granted herein. Each Credit Party hereby authorizes the Agent
to regard such Credit Party's or any Subsidiary's printed name or rubber stamp
signature on assignment schedules or invoices as the equivalent of a manual
signature by such Credit Party's or such Subsidiary's authorized officers or
agents.
7.17 COLLECTION OF ACCOUNTS.
Unless (a) the Agent shall have, in its reasonable discretion, elected to
enforce, collect and receive all amounts owing on the Accounts and/or other
Collateral, or (b) an Event of Default has occurred and is continuing and the
Agent or the Required Lenders shall have, in their sole discretion, elected to
enforce, collect and receive all amounts owing on the Accounts and/or other
Collateral (each a "Cash Management Event"), each Borrower may and will enforce,
collect and receive all amounts owing on the Accounts and other Collateral, for
the benefit, and on behalf, of the Lenders, but at the Borrowers' sole expense
in accordance with the provisions of SECTION 3.16(a) hereof; such privilege
shall terminate automatically, however, if an Event of Default has occurred and
is continuing under SECTION 9.1(a) OR (f) hereof. Upon the occurrence of a Cash
Management Event (i) any checks, cash, notes or other instruments or property
received by any Credit Party or any of its Subsidiaries with respect to any
Accounts and/or other Collateral shall be held by such Credit Party or such
Subsidiary in trust for the benefit of the Lenders, separate from such Credit
Party's or Subsidiary's own property and funds, and immediately turned over to
the Agent in accordance with SECTION 3.16(a) with proper assignments or
endorsements and (ii) no checks, drafts or other instruments received by the
Agent shall constitute final payment unless and until such instruments have
actually been collected.
7.18 NOTICE; CREDIT MEMORANDA; AND RETURNED GOODS.
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Each Credit Party will notify the Agent promptly of any matters materially
affecting the value, enforceability or collectibility of any Account, and of all
material customer disputes, offsets, defenses, counterclaims, returns and
rejections, and all reclaimed or repossessed merchandise or goods, PROVIDED,
HOWEVER, that such notice shall only be required as to any such matter that
affects Accounts outstanding at any one time from any account debtor having a
value greater than $35,000. Each Credit Party will prepare credit memoranda
promptly (with duplicates to the Agent upon its request for same) upon accepting
returns or granting allowances, and may continue to do so until the occurrence
of an Event of Default which continues beyond the expiration of the applicable
grace or cure period, or which has not otherwise been waived by the Agent. After
the occurrence and during the continuance of an Event of Default, each Credit
Party agrees that all returned, reclaimed or repossessed merchandise or goods
shall be set aside by such Credit Party, marked with the Lenders' name and held
by such Credit Party for the Lenders' account as owner and assignee.
7.19 ACKNOWLEDGMENT AGREEMENTS.
Each Credit Party will assist the Agent in obtaining executed
Acknowledgment Agreements from each of the warehousemen, processors, packers,
fillers, landlords and mortgagees with whom such Credit Party conducts business
from time to time.
7.20 REVISIONS OR UPDATES TO SCHEDULES.
If any of the information or disclosures provided on any of SCHEDULES 6.7,
6.13, 6.17, 6.20 OR 6.26, originally attached hereto become outdated or
incorrect in any material respect, the Borrowers shall deliver to the Agent and
the Lenders as part of the compliance certificate required pursuant to SECTION
7.1(c) such revision or updates to such Schedule(s) as may be necessary or
appropriate to update or correct such Schedule(s), PROVIDED, that no such
revisions or updates to any such Schedule(s) shall be deemed to have amended,
modified or superseded such Schedule(s) as originally attached hereto, or to
have cured any breach of warranty or representation resulting from the
inaccuracy or incompleteness of any such Schedule(s), unless and until the
Required Lenders, in their sole and absolute discretion, shall have accepted in
writing such revisions or updates to such Schedule(s) or unless such revision or
updates to such Schedule(s) would not have a Material Adverse Affect and would
not cause or result in a breach of a covenant hereunder or otherwise cause or
result in a Default or Event of Default hereunder.
SECTION 8
NEGATIVE COVENANTS
Each Credit Party hereby covenants and agrees that, so long as this Credit
Agreement is in effect or any Credit Party Obligations shall remain outstanding
(other than contingent indemnity obligations), and until all of the Commitments
hereunder shall have terminated:
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8.1 INDEBTEDNESS.
The Credit Parties will not permit any Consolidated Party to contract,
create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness arising under this Credit Agreement and the other
Credit Documents;
(b) Indebtedness of the Borrower set forth in SCHEDULE 8.1 (and
renewals, refinancings and extensions thereof on terms and conditions no
less favorable to such Person than such existing Indebtedness);
(c) purchase money Indebtedness (including obligations in respect
of Capital Leases or Synthetic Leases) hereafter incurred by the Credit
Parties to finance the purchase of fixed assets PROVIDED that (i) the total
of all such Indebtedness (including any such Indebtedness referred to on
SCHEDULE 8.1) shall not exceed $5,000,000 in aggregate principal amount at
any one time outstanding in fiscal year 2002 and $10,000,000 in aggregate
principal amount at any one time outstanding in fiscal year 2003; (ii) such
Indebtedness when incurred shall not exceed the purchase price of the
asset(s) financed; and (iii) no such Indebtedness shall be refinanced for a
principal amount in excess of the principal balance outstanding thereon at
the time of such refinancing;
(d) obligations of the Borrower in respect of Hedging Agreements
entered into in order to manage existing or anticipated interest rate or
exchange rate risks and not for speculative purposes;
(e) Subordinated Debt;
(f) Guaranty Obligations of any Credit Party with respect to
Indebtedness permitted pursuant to this SECTION 8.1 or other amounts with
respect to ordinary course obligations of a Credit Party in the nature of
operating leases or supply contracts;
(g) intercompany loans and advances made by the Borrower to any
Credit Party, by any Credit Party to the Borrower or by any Credit Party to
another Credit Party;
(h) indemnity obligations of any Credit Party arising in connection
with the representations and warranties made by such Credit Party with
respect to the sale or acquisition by such Credit Party of a Person or a
business unit of such Person sold or purchased as a going concern;
(i) Indebtedness in connection with attachment or judgment Liens
which are Permitted Liens, PROVIDED that the total of all such Indebtedness
for all the Consolidated Parties taken together shall not exceed $1,000,000
by in the aggregate at any one time outstanding;
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(j) Indebtedness of any Credit Party evidenced by promissory notes
or other instruments given to officers or directors of such Credit Party in
consideration for the repurchase of Capital Stock or options of such Credit
Party; provided that such promissory notes or other instruments shall not
provide for any current payment of interest or principal on or prior to the
Maturity Date; and
(k) other unsecured Indebtedness of the Consolidated Parties in an
amount not to exceed $10,000,000 in the aggregate at any one time.
8.2 LIENS.
The Credit Parties will not permit any Consolidated Party to contract,
create, incur, assume or permit to exist any Lien with respect to any of its
Property, whether now owned or after acquired, except for Permitted Liens.
8.3 NATURE OF BUSINESS.
The Credit Parties will not permit any Consolidated Party to substantively
alter the character or conduct of the business conducted by such Person as of
the Closing Date.
8.4 CONSOLIDATION, MERGER, DISSOLUTION, ETC.
The Credit Parties will not permit any Consolidated Party to enter into any
transaction of merger or consolidation or liquidate, wind up or dissolve itself
(or suffer any liquidation or dissolution); PROVIDED that, notwithstanding the
foregoing provisions of this Section 8.4, (a) the Borrower may merge or
consolidate with any of its Subsidiaries PROVIDED that (i) the Borrower shall be
the continuing or surviving corporation, (ii) the Credit Parties shall cause to
be executed and delivered such documents, instruments and certificates as the
Agent may request in order to maintain the perfection and priority of the
Agent's liens on the assets of the Credit Parties as required by Section 7.14
after giving effect to such transaction and (iii) after giving effect to such
transaction, no Default or Event of Default exists, (b) any Credit Party other
than the Borrower may merge or consolidate with any other Credit Party other
than the Borrower PROVIDED that (i) the Credit Parties shall cause to be
executed and delivered such documents, instruments and certificates as the Agent
may request in order to maintain the perfection and priority of the Agent's
liens on the assets of the Credit Parties as required by Section 7.14 after
giving effect to such transaction and (ii) after giving effect to such
transaction, no Default or Event of Default exists, (c) any Consolidated Party
which is not a Credit Party may be merged or consolidated with or into any
Credit Party PROVIDED that (i) such Credit Party shall be the continuing or
surviving corporation, (ii) the Credit Parties shall cause to be executed and
delivered such documents, instruments and certificates as the Agent may request
in order to maintain the perfection and priority of the Agent's liens on the
assets of the Credit Parties as required by Section 7.14 after giving effect to
such transaction and (iii) after giving effect to such transaction, no Default
or Event of Default exists, (d) any Consolidated Party which is not a Credit
Party may be merged or consolidated with or into any other Consolidated
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Party which is not a Credit Party PROVIDED that, after giving effect to such
transaction, no Default or Event of Default exists and (e) any Consolidated
Party may merge with any Person other than another Consolidated Party in
connection with a Permitted Acquisition if such Consolidated Party shall be the
continuing or surviving corporation.
8.5 ASSET SALES.
The Credit Parties will not permit any Consolidated Party to sell, lease,
transfer or otherwise dispose of, directly or indirectly, any of its assets
other than (a) sales or other dispositions of Equipment Held for Resale in the
ordinary course of business, (b) sales or other dispositions of Rental Equipment
in any calendar month so long as (i) the aggregate Net Cash Proceeds from such
dispositions when combined with all other such dispositions previously made by
all the Consolidated Parties in such calendar month do not exceed 5% of the net
book value of all Rental Equipment of the Credit Parties, (ii) the aggregate Net
Cash Proceeds from such dispositions when combined with all other such
dispositions previously made by all the Consolidated Parties in the fiscal year
in which such dispositions were made do not exceed 15% of the net book value of
all Rental Equipment of the Credit Parties and (iii) not more than 25% of the
purchase price paid for such assets is in the form of a promissory note or other
deferred payment instrument, (c) sales or other dispositions of obsolete or worn
equipment by a Credit Party other than the sale or other disposition of
equipment described in clauses (a) or (b) immediately above, (d) sales or other
dispositions of Cash Equivalents, (e) Sale and Leaseback Transactions permitted
pursuant to Section 8.13 hereof and (f) sales or other dispositions for cash and
fair value of real estate assets in any fiscal year so long as the aggregate Net
Cash Proceeds from such dispositions when combined with all other such
dispositions previously made by all the Consolidated Parties in such fiscal year
do not exceed $10,000,000.
8.6 INVESTMENTS.
The Credit Parties will not permit any Consolidated Party to make
Investments in or to any Person, except for Permitted Investments.
8.7 RESTRICTED PAYMENTS.
The Credit Parties will not permit any Consolidated Party to, directly or
indirectly, make a Restricted Payment other than the following Restricted
Payments so long as no Default or Event of Default shall exist immediately prior
to or immediately after the making of any such permitted Restricted Payment: (a)
the payments of dividends from any Consolidated Party to the Borrower or to
another Consolidated Party that is a direct Parent of such Consolidated Party,
(b) the payment of reasonable salaries and bonuses to management by the
Consolidated Parties, (c) repurchases of Capital Stock or options of any Credit
Party held by management of such Credit Party, PROVIDED that the aggregate
amount of such repurchases shall not exceed $1,000,000 in cash per fiscal year,
(d) customary and reasonable corporate overhead reimbursements payable by the
Subsidiary Guarantors to the Borrower, and (e) payments of the types described
in clauses (vi) and (viii) of the definition of "Permitted Investments".
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8.8 PREPAYMENTS OF INDEBTEDNESS, ETC.
The Credit Parties will not permit any Consolidated Party to (a) after the
issuance thereof, amend or modify (or permit the amendment or modification of)
any of the terms of any Indebtedness (including, without limitation,
Subordinated Debt) if such amendment or modification would add or change any
terms in a manner adverse to the issuer of such Indebtedness, or shorten the
final maturity or average life to maturity or require any payment to be made
sooner than originally scheduled or increase the interest rate applicable
thereto or change any subordination provision thereof, or (b) make (or give any
notice with respect thereto) any voluntary or optional payment or prepayment or
redemption or acquisition for value of (including without limitation, by way of
depositing money or securities with the trustee with respect thereto before due
for the purpose of paying when due), refund, refinance or exchange of any other
Indebtedness.
8.9 TRANSACTIONS WITH AFFILIATES.
The Credit Parties will not permit any Consolidated Party to enter into any
transaction with, including, without limitation, the purchase, sale or exchange
of property or the rendering of any service to, any Subsidiary or Affiliate of
any Consolidated Party except (a) in the ordinary course of and pursuant to the
reasonable requirements of such Consolidated Party's business and upon fair and
reasonable terms no less favorable to such Consolidated Party than could be
obtained in a comparable arm's-length transaction with an unaffiliated Person,
(b) as permitted under Section 8.1 or Section 8.7 hereof, (c) for intercompany
loans and advances from the Borrower to any Subsidiary Guarantor or from any
Subsidiary Guarantor to the Borrower or any other Subsidiary Guarantor and (d)
for intercompany transfers of equipment among Subsidiary Guarantors for the
purpose of meeting customer demand for Rental Equipment, PROVIDED that the
Subsidiary Guarantors shall keep adequate internal records of all such
transfers.
8.10 ACCOUNTING; ORGANIZATIONAL DOCUMENTS; MATERIAL CONTRACTS.
(i) The Credit Parties will not and will not permit any Consolidated
Party to change its fiscal year or otherwise materially change its accounting
practices (including, without limitation, depreciation methodology as applied by
the Borrower and its Subsidiaries pursuant to the Borrower's Control Bulletin
No. 5, as revised March 31, 1998) without the prior written consent of the
Required Lenders, except for such changes necessary to conform the fiscal year
or the accounting practices of an Acquired Company to that of the Borrower.
(ii) The Credit Parties will not and will not permit any Consolidated
Party to amend, modify or change its articles of incorporation (or corporate
charter or other similar organizational document) or bylaws (or other similar
document) in a manner adverse to the Lenders.
(iii) The Credit Parties will not and will not permit any Consolidated
Party to, without the prior written consent of the Agent, amend, modify, cancel
or terminate or permit the amendment, modification, cancellation or termination
of any of the Material Contracts, except in
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the event that such amendments, modifications, cancellations or terminations
could not reasonably be expected to have a Material Adverse Effect.
8.11 LIMITATION ON RESTRICTED ACTIONS.
The Credit Parties will not permit any Consolidated Party to, directly or
indirectly, create or otherwise cause, incur, assume, suffer or permit to exist
or become effective any consensual encumbrance or restriction of any kind on the
ability of any such Person to (a) in the case of any Subsidiary Guarantors, pay
dividends or make any other distribution on any of such Person's Capital Stock
other than pursuant to the indenture for the Senior Subordinated Notes, (b) pay
any Indebtedness owed to the Credit Parties, (c) make loans or advances to any
other Credit Party or (d) transfer any of its property to any other Credit
Party, except for encumbrances or restrictions existing under or by reason of
(i) customary non-assignment provisions in any lease governing a leasehold
interest, (ii) any agreement or other instrument of a Person existing at the
time it becomes a Subsidiary of a Credit Party; PROVIDED that such encumbrance
or restriction is not applicable to any other Person, or any property of any
other Person, other than such Person becoming a Subsidiary of a Credit Party and
was not entered into in contemplation of such Person becoming a Subsidiary of a
Credit Party, (iii) customary provisions contained in purchase money financing
arrangements permitted by Section 8.1(c) and (iv) this Credit Agreement and the
other Credit Documents.
8.12 OWNERSHIP OF SUBSIDIARIES.
Notwithstanding any other provisions of this Credit Agreement to the
contrary, the Credit Parties will not permit any Consolidated Party to (i)
permit any Person (other than the Borrower or any Wholly-Owned Subsidiary of the
Borrower) to own any Capital Stock of any Subsidiary of the Borrower, (ii)
permit any Subsidiary of the Borrower to issue Capital Stock (except to the
Borrower or to a Wholly-Owned Subsidiary of the Borrower), (iii) permit, create,
incur, assume or suffer to exist any Lien thereon, in each case except (A) to
qualify directors where required by applicable law or to satisfy other
requirements of applicable law with respect to the ownership of Capital Stock of
Foreign Subsidiaries or (B) for Permitted Liens and (iv) notwithstanding
anything to the contrary contained in clause (ii) above, permit any Subsidiary
of the Borrower to issue any shares of preferred Capital Stock.
8.13 SALE LEASEBACKS.
The Credit Parties will not permit any Consolidated Party to, directly or
indirectly, enter into any Sale and Leaseback Transaction other than any Sale
Leaseback Transaction pursuant to which the consideration paid, when aggregated
with the consideration received from all other Sale and Leaseback Transactions
of the Credit Parties, does not exceed $50,000,000.
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8.14 NO FURTHER NEGATIVE PLEDGES.
The Credit Parties will not, and will not permit any Consolidated Party to,
create or otherwise cause or suffer to exist or become effective, directly or
indirectly, (i) any prohibition or restriction (including any agreement to
provide equal and ratable security to any other Person in the event a Lien is
granted to or for the benefit of the Agent and the Lenders) on the creation or
existence of any Lien upon the assets of any Consolidated Party, other than
pursuant to the indenture for the Senior Subordinated Notes or pursuant to
documentation relating to purchase money financing arrangements permitted by
Section 8.1(c) or (ii) any Contractual Obligation which may restrict or limit
the Agent's rights or ability to sell or otherwise dispose of the Collateral or
any part thereof after the occurrence of an Event of Default other than standard
and customary subordination, nondisturbance and attornment agreements under or
in connection with leases of Rental Equipment.
8.15 NO ADDITIONAL BANK ACCOUNTS.
The Credit Parties will not, and will not permit any Consolidated Party to,
open, maintain or otherwise have any checking, savings or other accounts at any
bank or other financial institution, or any other account where money is or may
be deposited or maintained with any Person unless each such account is subject
to a Blocked Account Agreement or other similar agreement satisfactory to the
Agent; PROVIDED, HOWEVER, that the accounts set forth on Part B of SCHEDULE 8.15
hereto may be maintained by the Credit Parties so long as each such account
becomes subject to a Blocked Account Agreement or other similar agreement
satisfactory to the Agent within 45 days following the Amendment No. 5 Effective
Date.
SECTION 9
EVENTS OF DEFAULT
9.1 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) PAYMENT. Any Credit Party shall fail to pay (i) any interest or
Fees hereunder within three (3) Business Days of when due hereunder, in
each case whether at stated maturity, by acceleration, or otherwise, (ii)
any principal of the Revolving Loans, the Term Loan or the LOC Obligations
when due, whether at stated maturity, by acceleration or otherwise or (iii)
any expenses hereunder within five (5) Business Days after receipt of
notice by the Credit Parties from the Agent or any applicable Lender that
such expenses are payable; or
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(b) REPRESENTATIONS. Any representation, warranty or statement made
or deemed to be made by any Credit Party herein, in any of the other Credit
Documents, or in any statement or certificate delivered or required to be
delivered pursuant hereto or thereto shall prove untrue in any material
respect on the date as of which it was deemed to have been made; or
(c) COVENANTS. Any Credit Party shall
(i) default in the due performance or observance of any term,
covenant or agreement contained in Sections 7.2, 7.4, 7.9, 7.11 or
8.1 through 8.14, inclusive;
(ii) default in the due performance or observance of any term,
covenant or agreement contained in Sections 7.1(a), (b), (c) or (d)
and such default shall continue unremedied for a period of at least 5
Business Days after the earlier of any chairman, president, chief
executive officer, chief financial officer or vice president of a
Credit Party becoming aware of such default or notice thereof by the
Agent; or
(iii) default in the due performance or observance of any other
covenant, contained in this Credit Agreement, the other Credit
Documents (including Hedging Agreements), and in the event such
breach or failure to comply is capable of cure, is not cured within
thirty (30) days of its occurrence;
(d) OTHER CREDIT DOCUMENTS. (i) Any Credit Party shall default in
the due performance or observance of any term, covenant or agreement in any
of the other Credit Documents (subject to applicable grace or cure periods,
if any), or (ii) except as a result of or in connection with a merger of a
Subsidiary permitted under Section 8.4, any Credit Document shall fail to
be in full force and effect or to give the Agent and/or the Lenders the
Liens, rights, powers and privileges purported to be created thereby, or
any Credit Party shall so state in writing; or
(e) GUARANTIES. Except as the result of or in connection with a
merger of a Subsidiary permitted under Section 8.4, the guaranty given by
any Subsidiary Guarantor hereunder (including any Additional Credit Party)
or any provision thereof shall cease to be in full force and effect, or any
Subsidiary Guarantor (including any Additional Credit Party) hereunder or
any Person acting by or on behalf of such Subsidiary Guarantor shall deny
or disaffirm such Subsidiary Guarantor's obligations under such guaranty,
or any Subsidiary Guarantor shall default in the due performance or
observance of any term, covenant or agreement on its part to be performed
or observed pursuant to any guaranty; or
(f) BANKRUPTCY, ETC. Any Bankruptcy Event shall occur with respect
to any Consolidated Party; or
(g) DEFAULTS UNDER OTHER AGREEMENTS.
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(i) Any Consolidated Party shall default in the performance
or observance (beyond the applicable grace period with respect
thereto, if any) of any Material Contract;
(ii) With respect to (x) any Subordinated Debt or (y) any
other Indebtedness (other than Indebtedness outstanding under this
Credit Agreement) in excess of $5,000,000 in the aggregate for the
Consolidated Parties taken as a whole, (A) any Consolidated Party
shall (1) default in any payment (beyond the applicable grace period
with respect thereto, if any) with respect to any such Indebtedness,
or (2) the occurrence and continuance of a default in the observance
or performance relating to such Indebtedness or contained in any
instrument or agreement evidencing, securing or relating thereto, or
any other event or condition shall occur or condition exist, the
effect of which default or other event or condition is to cause, or
permit, the holder or holders of such Indebtedness (or trustee or
agent on behalf of such holders) to cause (determined without regard
to whether any notice or lapse of time is required), any such
Indebtedness to become due prior to its stated maturity; or (B) any
such Indebtedness shall be declared due and payable, or required to
be prepaid other than by a regularly scheduled required prepayment,
prior to the stated maturity thereof; or
(iii) (a) any holder of Subordinated Debt alleges (or any
Governmental Authority with applicable jurisdiction determines) that
the Subordinated Debt is not subordinated to any of the Credit Party
Obligations or (b) the subordination provisions in any agreement
relating to Subordinated Debt shall, in whole or in part, terminate,
cease to be effective or cease to be legally valid, binding and
enforceable as to any holder of the Subordinated Debt; or
(h) JUDGMENTS. One or more judgments or decrees shall be entered
against one or more of the Consolidated Parties involving a liability of
$1,000,000 or more in the aggregate (to the extent not paid or fully
covered by insurance provided by a carrier who has acknowledged coverage
and has the ability to perform) and any such judgments or decrees shall not
have been vacated, discharged or stayed or bonded pending appeal within 30
days from the entry thereof; or
(i) ERISA. Any of the following events or conditions, if such event
or condition could have a Material Adverse Effect: (i) any "accumulated
funding deficiency," as such term is defined in Section 302 of ERISA and
Section 412 of the Code, whether or not waived, shall exist with respect to
any Plan, or any lien shall arise on the assets of any Consolidated Party
or any ERISA Affiliate in favor of the PBGC or a Plan; (ii) an ERISA Event
shall occur with respect to a Single Employer Plan, which is, in the
reasonable opinion of the Agent, likely to result in the termination of
such Plan for purposes of Title IV of ERISA; (iii) an ERISA Event shall
occur with respect to a Multiemployer Plan or Multiple Employer Plan, which
is, in the reasonable opinion of the Agent, likely to result in (A) the
termination of such Plan for purposes of Title IV of ERISA, or (B) any
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Consolidated Party or any ERISA Affiliate incurring any liability in
connection with a withdrawal from, reorganization of (within the meaning of
Section 4241 of ERISA), or insolvency or (within the meaning of Section
4245 of ERISA) such Plan; or (iv) any prohibited transaction (within the
meaning of Section 406 of ERISA or Section 4975 of the Code) or breach of
fiduciary responsibility shall occur which may subject any Consolidated
Party or any ERISA Affiliate to any liability under Sections 406, 409,
502(i), or 502(l) of ERISA or Section 4975 of the Code, or under any
agreement or other instrument pursuant to which any Consolidated Party or
any ERISA Affiliate has agreed or is required to indemnify any person
against any such liability; or
(j) OWNERSHIP. There shall occur a Change of Control.
9.2 ACCELERATION; REMEDIES.
Upon the occurrence of an Event of Default, and at any time thereafter
unless and until such Event of Default has been waived by the Required Lenders
or cured to the satisfaction of the Required Lenders, the Agent shall, upon the
request and direction of the Required Lenders, by written notice to the Credit
Parties, take any of the following actions:
(a) TERMINATION OF COMMITMENTS. Declare the Commitments terminated
whereupon the Commitments shall be immediately terminated.
(b) ACCELERATION. Declare the unpaid principal of and any accrued
interest in respect of all Loans, any reimbursement obligations arising
from drawings under Letters of Credit and any and all other indebtedness or
obligations of any and every kind owing by the Credit Parties to the Agent
and/or any of the Lenders hereunder to be due whereupon the same shall be
immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Credit Parties.
(c) CASH COLLATERAL. Direct the Credit Parties to pay (and the
Credit Parties agree that upon receipt of such notice, or upon the
occurrence of an Event of Default under Section 9.1(f), they will
immediately pay) to the Agent additional cash, to be held by the Agent, for
the benefit of the Lenders, in a cash collateral account as additional
security for the LOC Obligations in respect of subsequent drawings under
all then outstanding Letters of Credit in an amount equal to the maximum
aggregate amount which may be drawn under all Letters of Credits then
outstanding.
(d) ENFORCEMENT OF RIGHTS. Enforce any and all rights and interests
created and existing under the Credit Documents including, without
limitation, all rights and remedies existing under the Collateral
Documents, all rights and remedies against a Subsidiary Guarantor and all
rights of set-off.
Notwithstanding the foregoing, if an Event of Default specified in Section
9.1(f) shall occur with respect to any Credit Party, then the Commitments shall
automatically terminate and all
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Loans, all reimbursement obligations arising from drawings under Letters of
Credit, all accrued interest in respect thereof, all accrued and unpaid Fees and
other indebtedness or obligations owing to the Agent and/or any of the Lenders
hereunder automatically shall immediately become due and payable without the
giving of any notice or other action by the Agent or the Lenders.
SECTION 10
AGENCY PROVISIONS
10.1 APPOINTMENT, POWERS AND IMMUNITIES.
Each Lender hereby irrevocably appoints and authorizes the Agent to act as
its agent under this Credit Agreement and the other Credit Documents with such
powers and discretion as are specifically delegated to the Agent by the terms of
this Credit Agreement and the other Credit Documents, together with such other
powers as are reasonably incidental thereto. The Agent (which term as used in
this sentence and in Section 10.5 and the first sentence of Section 10.6 hereof
shall include its Affiliates and its own and its Affiliates' officers,
directors, employees, and agents): (a) shall not have any duties or
responsibilities except those expressly set forth in this Credit Agreement and
shall not be a trustee or fiduciary for any Lender; (b) shall not be responsible
to the Lenders for any recital, statement, representation, or warranty (whether
written or oral) made in or in connection with any Credit Document or any
certificate or other document referred to or provided for in, or received by any
of them under, any Credit Document, or for the value, validity, effectiveness,
genuineness, enforceability, or sufficiency of any Credit Document, or any other
document referred to or provided for therein or for any failure by any Credit
Party or any other Person to perform any of its obligations thereunder; (c)
shall not be responsible for or have any duty to ascertain, inquire into, or
verify the performance or observance of any covenants or agreements by any
Credit Party or the satisfaction of any condition or to inspect the property
(including the books and records) of any Credit Party or any of its Subsidiaries
or Affiliates; (d) shall not be required to initiate or conduct any litigation
or collection proceedings under any Credit Document; and (e) shall not be
responsible for any action taken or omitted to be taken by it under or in
connection with any Credit Document, except for its own gross negligence or
willful misconduct. The Agent may employ agents and attorneys-in-fact and shall
not be responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care.
10.2 RELIANCE BY AGENT.
The Agent shall be entitled to rely upon any certification, notice,
instrument, writing, or other communication (including, without limitation, any
thereof by telephone or telecopy) believed by it to be genuine and correct and
to have been signed, sent or made by or on behalf of the proper Person or
Persons, and upon advice and statements of legal counsel (including counsel for
any Credit Party), independent accountants, and other experts selected by the
Agent. The Agent may deem and treat the payee of any Note as the holder thereof
for all purposes hereof
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unless and until the Agent receives and accepts an Assignment and Acceptance
executed in accordance with Section 11.3(b) hereof. As to any matters not
expressly provided for by this Credit Agreement, the Agent shall not be required
to exercise any discretion or take any action, but shall be required to act or
to refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding on all of the Lenders; PROVIDED, HOWEVER, that the
Agent shall not be required to take any action that exposes the Agent to
personal liability or that is contrary to any Credit Document or applicable law
or unless 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 any such action.
10.3 DEFAULTS.
The Agent shall not be deemed to have knowledge or notice of the occurrence
of a Default or Event of Default unless the Agent has received written notice
from a Lender or the a Credit Party specifying such Default or Event of Default
and stating that such notice is a "Notice of Default". In the event that the
Agent receives such a notice of the occurrence of a Default or Event of Default,
the Agent shall give prompt notice thereof to the Lenders. The Agent shall
(subject to Section 10.2 hereof) take such action with respect to such Default
or Event of Default as shall reasonably be directed by the Required Lenders,
PROVIDED THAT, unless and until the Agent shall have received such directions,
the 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 interest of the Lenders.
10.4 RIGHTS AS A LENDER.
With respect to its Commitment and the Loans made by it, First Union
National Bank (and any successor acting as Agent) in its capacity as a Lender
hereunder shall have the same rights and powers hereunder as any other Lender
and may exercise the same as though it were not acting as the Agent, and the
term "Lender" or "Lenders" shall, unless the context otherwise indicates,
include the Agent in its individual capacity. First Union National Bank (and any
successor acting as Agent) and its Affiliates may (without having to account
therefor to any Lender) accept deposits from, lend money to, make investments
in, provide services to, and generally engage in any kind of lending, trust, or
other business with any Credit Party or any of its Subsidiaries or Affiliates as
if it were not acting as Agent, and First Union National Bank (and any successor
acting as Agent) and its Affiliates may accept fees and other consideration from
any Credit Party or any of its Subsidiaries or Affiliates for services in
connection with this Credit Agreement or otherwise without having to account for
the same to the Lenders.
10.5 INDEMNIFICATION.
The Lenders agree to indemnify the Agent (to the extent not reimbursed
under Section 11.5 hereof, but without limiting the obligations of the Credit
Parties under such Section) ratably in accordance with their respective
Commitments, for any and all liabilities, obligations, losses,
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damages, penalties, actions, judgments, suits, costs, expenses (including
attorneys' fees), or disbursements of any kind and nature whatsoever that may be
imposed on, incurred by or asserted against the Agent (including by any Lender)
in any way relating to or arising out of any Credit Document or the transactions
contemplated thereby or any action taken or omitted by the Agent under any
Credit Document (including any of the foregoing arising from the negligence of
the Agent); PROVIDED that no Lender shall be liable for any of the foregoing to
the extent they arise from the gross negligence or willful misconduct of the
Person to be indemnified. Without limitation of the foregoing, each Lender
agrees to reimburse the Agent promptly upon demand for its ratable share of any
costs or expenses payable by the Credit Parties under Section 11.5, to the
extent that the Agent is not promptly reimbursed for such costs and expenses by
the Credit Parties. The agreements in this Section 10.5 shall survive the
repayment of the Loans, LOC Obligations and other obligations under the Credit
Documents and the termination of the Commitments hereunder.
10.6 NON-RELIANCE ON AGENT AND OTHER LENDERS.
Each Lender agrees that it has, independently and without reliance on the
Agent or any other Lender, and based on such documents and information as it has
deemed appropriate, made its own credit analysis of the Credit Parties and their
Subsidiaries and decision to enter into this Credit Agreement and that it will,
independently and without reliance upon the 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 analysis and decisions in taking or not taking action
under the Credit Documents. Except for notices, reports, and other documents and
information expressly required to be furnished to the Lenders by the Agent
hereunder, the Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the affairs, financial
condition, or business of any Credit Party or any of its Subsidiaries or
Affiliates that may come into the possession of the Agent or any of its
Affiliates.
10.7 SUCCESSOR AGENT.
The Agent may resign at any time by giving notice thereof to the Lenders
and the Credit Parties. Upon any such resignation, the Required Lenders shall
have the right to appoint a successor Agent with the approval of the Borrower
(so long as no Event of Default has occurred and is continuing), which approval
shall not be unreasonably withheld or delayed. If no successor Agent shall have
been so appointed by the Required Lenders and shall have accepted such
appointment within thirty (30) days after the retiring Agent's giving of notice
of resignation, then the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent which shall be a commercial bank organized under the laws of the
United States of America having combined capital and surplus of at least
$100,000,000. Upon the acceptance of any appointment as Agent hereunder by a
successor, such successor shall thereupon succeed to and become vested with all
the rights, powers, discretion, privileges, and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Section 10 shall continue
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in effect for its benefit in respect of any actions taken or omitted to be taken
by it while it was acting as Agent.
10.8 COLLATERAL MATTERS.
(a) Each Lender authorizes and directs the Agent to enter into the
Security Documents for the benefit of the Lenders. Each Lender authorizes
and directs the Agent to make such changes to the form Acknowledgment
Agreement attached hereto as EXHIBIT 1 as the Agent deems necessary in
order to obtain any Acknowledgment Agreement from any landlord,
warehouseman, filler, packer or processor of any Credit Party. Each Lender
hereby agrees, and each holder of any Note by the acceptance thereof will
be deemed to agree, that, except as otherwise set forth herein, any action
taken by the Required Lenders or each of the Lenders, as applicable, in
accordance with the provisions of this Credit Agreement or the Security
Documents, and the exercise by the Required Lenders or each of the Lenders,
as applicable, of the powers set forth herein or therein, together with
such other powers as are reasonably incidental thereto, shall be authorized
and binding upon all of the Lenders. The Agent is hereby authorized on
behalf of all of the Lenders, without the necessity of any notice to or
further consent from any Lender, from time to time prior to an Event of
Default, to take any action with respect to any Collateral or Security
Document which may be necessary or appropriate to perfect and maintain
perfected the security interest in and liens upon the Collateral granted
pursuant to the Security Documents.
(b) The Lenders hereby authorize the Agent, at its option and in
its discretion, to release any Lien granted to or held by the Agent upon
any Collateral (i) upon termination of the Commitments and payment in cash
and satisfaction of all of the Credit Party Obligations at any time arising
under or in respect of this Credit Agreement or the Credit Documents or the
transactions contemplated hereby or thereby or (ii) constituting property
being sold or disposed of pursuant to a sale or disposition made in
compliance with SECTION 8.5 hereof. Upon request by the Agent at any time,
the Lenders will confirm in writing the Agent's authority to release
particular types or items of Collateral pursuant to this SECTION 10.8(b).
(c) Upon any sale and transfer of Collateral which is expressly
permitted pursuant to the terms of this Credit Agreement, or consented to
in writing by the Required Lenders or all of the Lenders, as applicable,
and upon at least five (5) Business Days' prior written request by the
applicable Credit Party, the Agent shall (and is hereby irrevocably
authorized by the Lenders to) execute such documents as may be necessary to
evidence the release of the Liens granted to the Agent for the benefit of
the Lenders herein or pursuant hereto upon the Collateral that was sold or
transferred; PROVIDED, that (i) the Agent shall not be required to execute
any such document on terms which, in the Agent's opinion, would expose the
Agent to liability or create any obligation or entail any consequence other
than the release of such Liens without recourse or warranty and (ii) such
release shall not in any manner discharge, affect or impair the Credit
Party
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Obligations or any Liens upon (or obligations of such Credit Party or any
Subsidiary in respect of) all interests retained by such Credit Party or
any Subsidiary, including (without limitation) the proceeds of the sale,
all of which shall continue to constitute part of the Collateral. In the
event of any sale or transfer of Collateral, or any foreclosure with
respect to any of the Collateral, the Agent shall be authorized to deduct
all of the expenses reasonably incurred by the Agent from the proceeds of
any such sale, transfer or foreclosure.
(d) The Agent shall have no obligation whatsoever to the Lenders or
to any other Person to assure that the Collateral exists or is owned by the
Credit Parties or any Subsidiary or is cared for, protected or insured or
that the liens granted to the Agent herein or pursuant hereto have been
properly or sufficiently or lawfully created, perfected, protected or
enforced or are entitled to any particular priority, or to exercise or to
continue exercising at all or in any manner or under any duty of care,
disclosure or fidelity any of the rights, authorities and powers granted or
available to the Agent in this SECTION 10.8 or in any of the Security
Documents, it being understood and agreed that in respect of the
Collateral, or any act, omission or event related thereto, the Agent may
act in any manner it may deem appropriate, in its sole discretion, given
the Agent's own interest in the Collateral as one of the Lenders and that
the Agent shall have no duty or liability whatsoever to the Lenders, except
for its gross negligence or willful misconduct.
SECTION 11
MISCELLANEOUS
11.1 NOTICES.
Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (a) when
delivered, (b) when transmitted via telecopy (or other facsimile device) to the
number set out below, (c) the Business 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 to the
respective parties at the address, in the case of the Credit Parties and the
Agent, set forth below, and, in the case of the Lenders, set forth on SCHEDULE
2.1(a), or at such other address as such party may specify by written notice to
the other parties hereto:
if to any Credit Party:
National Equipment Services, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Vice President, Secretary
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ (ext. 11)
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Sandford E. Perl, Esq.
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
if to the Agent:
First Union National Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Agency Services
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
First Union National Bank
One First Union Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
11.2 RIGHT OF SET-OFF; ADJUSTMENTS.
Upon the occurrence and during the continuance of any Event of Default,
each Lender (and each of its Affiliates) is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender (or any
of its Affiliates) to or for the credit or the account of any Credit Party
against any and all of the obligations of such Person now or hereafter existing
under this Credit Agreement, under the Notes, under any other Credit Document or
otherwise, irrespective of whether such Lender shall have made any demand under
hereunder or thereunder and although such obligations may be unmatured. Each
Lender agrees promptly to notify any affected Credit Party after any such
set-off and application made by such Lender; PROVIDED, HOWEVER, that the failure
to
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give such notice shall not affect the validity of such set-off and application.
The rights of each Lender under this Section 11.2 are in addition to other
rights and remedies (including, without limitation, other rights of set-off)
that such Lender may have.
11.3 BENEFIT OF AGREEMENT.
(a) This Credit Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and assigns of
the parties hereto; PROVIDED that none of the Credit Parties may assign or
transfer any of its interests and obligations without prior written consent
of the Lenders; PROVIDED FURTHER that the rights of each Lender to
transfer, assign or grant participations in its rights and/or obligations
hereunder shall be limited as set forth in this Section 11.3.
(b) Each Lender may assign to one or more Eligible Assignees all or
a portion of its rights and obligations under this Credit Agreement
(including, without limitation, all or a portion of its Loans, its Notes,
and its Commitment); PROVIDED, HOWEVER, that
(i) each such assignment shall be to an Eligible Assignee;
(ii) except in the case of an assignment to another Lender or
an assignment of all of a Lender's rights and obligations under this
Credit Agreement, any such partial assignment shall be in an amount
at least equal to $5,000,000 (or, if less, the remaining amount of
the Commitment being assigned by such Lender) or an integral multiple
of $1,000,000 in excess thereof; and
(iii) the parties to such assignment shall execute and deliver
to the Agent for its acceptance an Assignment and Acceptance in the
form of EXHIBIT 11.3(b) hereto, together with any Note subject to
such assignment and a processing fee of $3,500.
Upon execution, delivery, and acceptance of such Assignment and Acceptance,
the assignee thereunder shall be a party hereto and, to the extent of such
assignment, have the obligations, rights, and benefits of a Lender
hereunder and the assigning Lender shall, to the extent of such assignment,
relinquish its rights and be released from its obligations under this
Credit Agreement. Upon the consummation of any assignment pursuant to this
Section 11.3(b), the assignor, the Agent and the Credit Parties shall make
appropriate arrangements so that, if required, new Notes are issued to the
assignor and the assignee. If the assignee is not a United States person
under Section 7701(a)(30) of the Code, it shall deliver to the Credit
Parties and the Agent certification as to exemption from deduction or
withholding of Taxes in accordance with Section 3.11.
(c) The Agent shall maintain at its address referred to in Section
11.1 a copy of each Assignment and Acceptance delivered to and accepted by
it and a register for the recordation of the names and addresses of the
Lenders and the Commitment of, and
105
principal amount of the Loans owing to, each Lender from time to time (the
"REGISTER"). The entries in the Register shall be conclusive and binding
for all purposes, absent manifest error, and the Credit Parties, the Agent
and the Lenders may treat each Person whose name is recorded in the
Register as a Lender hereunder for all purposes of this Credit Agreement.
The Register shall be available for inspection by the Credit Parties or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.
(d) Upon its receipt of an Assignment and Acceptance executed by
the parties thereto, together with any Note subject to such assignment and
payment of the processing fee, the Agent shall, if such Assignment and
Acceptance has been completed and is in substantially the form of EXHIBIT
11.3(b) hereto, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the parties thereto.
(e) Each Lender may sell participations to one or more Persons in
all or a portion of its rights, obligations or rights and obligations under
this Credit Agreement (including all or a portion of its Commitment or its
Loans); PROVIDED, HOWEVER, that (i) such Lender's obligations under this
Credit Agreement shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations, (iii) the participant shall be entitled to the benefit of the
yield protection provisions contained in Sections 3.7 through 3.12,
inclusive, and the right of set-off contained in Section 11.2, and (iv) the
Credit Parties shall continue to deal solely and directly with such Lender
in connection with such Lender's rights and obligations under this Credit
Agreement, and such Lender shall retain the sole right to enforce the
obligations of the Credit Parties relating to the Credit Party Obligations
owing to such Lender and to approve any amendment, modification, or waiver
of any provision of this Credit Agreement (other than amendments,
modifications, or waivers decreasing the amount of principal of or the rate
at which interest is payable on such Loans or Notes, extending any
scheduled principal payment date or date fixed for the payment of interest
on such Loans or Notes, or extending its Commitment).
(f) Notwithstanding any other provision set forth in this Credit
Agreement, any Lender may at any time assign and pledge all or any portion
of its Loans and its Notes to any Federal Reserve Bank as collateral
security pursuant to Regulation A and any Operating Circular issued by such
Federal Reserve Bank. No such assignment shall release the assigning Lender
from its obligations hereunder.
(g) Any Lender may furnish any information concerning the
Consolidated Parties in the possession of such Lender from time to time to
assignees and participants (including prospective assignees and
participants), subject, however, to the provisions of Section 11.15 hereof.
11.4 NO WAIVER; REMEDIES CUMULATIVE.
106
No failure or delay on the part of the Agent or any Lender in exercising
any right, power or privilege hereunder or under any other Credit Document and
no course of dealing between the Agent or any Lender and any of the Credit
Parties shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or under any other Credit
Document preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder or thereunder. The rights and remedies
provided herein are cumulative and not exclusive of any rights or remedies which
the Agent or any Lender would otherwise have. No notice to or demand on any
Credit Party in any case shall entitle the Credit Parties to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of the Agent or the Lenders to any other or further action
in any circumstances without notice or demand.
11.5 EXPENSES; INDEMNIFICATION.
(a) The Credit Parties jointly and severally agree to pay on demand all
costs and expenses of the Agent in connection with the syndication, preparation,
execution, delivery, administration, modification, and amendment of this Credit
Agreement, the other Credit Documents, and the other documents to be delivered
hereunder, including, without limitation, the reasonable fees and expenses of
counsel for the Agent (including the cost of internal counsel) with respect
thereto and with respect to advising the Agent as to its rights and
responsibilities under the Credit Documents. The Credit Parties further jointly
and severally agree to pay on demand all costs and expenses of the Agent and the
Lenders, if any (including, without limitation, reasonable attorneys' fees and
expenses and the cost of internal counsel), incurred in connection with any
Default or Event of Default (whether through negotiations, legal proceedings, or
otherwise) of the Credit Documents and the other documents to be delivered
hereunder.
(b) The Credit Parties jointly and severally agree to indemnify and hold
harmless the Agent and each Lender and each of their Affiliates and their
respective officers, directors, employees, agents, and advisors (each, an
"INDEMNIFIED PARTY") from and against any and all claims, damages, losses,
liabilities, costs, and expenses (including, without limitation, reasonable
attorneys' fees) that may be incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection with or by
reason of (including, without limitation, in connection with any investigation,
litigation, or proceeding or preparation of defense in connection therewith) the
Credit Documents, any of the transactions contemplated herein or the actual or
proposed use of the proceeds of the Loans (including any of the foregoing
arising from the negligence of the Indemnified Party), except to the extent such
claim, damage, loss, liability, cost, or expense is found in a final,
non-appealable judgment by a court of competent jurisdiction to have resulted
from such Indemnified Party's gross negligence or willful misconduct. In the
case of an investigation, litigation or other proceeding to which the indemnity
in this Section 11.5 applies, such indemnity shall be effective whether or not
such investigation, litigation or proceeding is brought by any of the Credit
Parties, their respective directors, shareholders or creditors or an Indemnified
Party or any other Person or any Indemnified Party is otherwise a party thereto
and whether or not the transactions contemplated hereby are consummated. The
Credit Parties agree not to assert any claim against the Agent, any Lender, any
of their Affiliates,
107
or any of their respective directors, officers, employees, attorneys, agents,
and advisers, on any theory of liability, for special, indirect, consequential,
or punitive damages arising out of or otherwise relating to the Credit
Documents, any of the transactions contemplated herein or the actual or proposed
use of the proceeds of the Loans.
(c) Without prejudice to the survival of any other agreement of the
Credit Parties hereunder, the agreements and obligations of the Credit Parties
contained in this Section 11.5 shall survive the repayment of the Loans, LOC
Obligations and other obligations under the Credit Documents and the termination
of the Commitments hereunder.
11.6 AMENDMENTS, WAIVERS AND CONSENTS.
Neither this Credit Agreement nor any other Credit Document nor any of the
terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is in
writing entered into by, or approved in writing by, the Required Lenders and the
Borrower, PROVIDED, HOWEVER, that:
(i) without the consent of each Lender affected thereby, neither
this Credit Agreement nor any other Credit Document may be amended to
(a) extend the final maturity of any Loan or of any
reimbursement obligation, or any portion thereof, arising from
drawings under Letters of Credit,
(b) reduce the rate or extend the time of payment of interest
(other than as a result of waiving the applicability of any
post-default increase in interest rates) thereon or Fees hereunder,
(c) reduce or waive the principal amount of any Loan or of any
reimbursement obligation, or any portion thereof, arising from
drawings under Letters of Credit,
(d) increase the Commitment of a Lender over the amount thereof
in effect (it being understood and agreed that a waiver of any
Default or Event of Default or mandatory reduction in the Commitments
shall not constitute a change in the terms of any Commitment of any
Lender),
(e) release the Borrower or substantially all of the other
Credit Parties from its or their obligations under the Credit
Documents,
(f) except as the result of or in connection with an Asset
Disposition permitted by Section 8.5, release all or substantially
all of the Collateral,
108
(g) amend, modify or waive any provision of this Section 11.6
or Section 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14, 3.15,
9.1(a), 11.2, 11.3, 11.5 or 11.9,
(h) reduce any percentage specified in, or otherwise modify,
the definition of Required Lenders, or
(i) consent to the assignment or transfer by the Borrower or all or
substantially all of the other Credit Parties of any of its or their rights
and obligations under (or in respect of) the Credit Documents except as
permitted thereby;
(ii) without the consent of Lenders holding in the aggregate more
than 50% of the outstanding Term Loan, extend the time for or the amount or
the manner of application of proceeds of any mandatory prepayment required
by Sections 3.3(b)(ii) or (iii) hereof;
(iii) without the consent of the Agent, no provision of Section 10
may be amended; and
(iv) without the consent of the Issuing Lender, no provision of
Section 2.2 may be amended, and without the consent of the Swingline
Lender, no provision of Section 2.3 may be amended.
Notwithstanding the fact that the consent of all the Lenders is required in
certain circumstances as set forth above, (x) each Lender is entitled to
vote as such Lender sees fit on any bankruptcy reorganization plan that
affects the Loans, and each Lender acknowledges that the provisions of
Section 1126(c) of the Bankruptcy Code supersedes the unanimous consent
provisions set forth herein and (y) Lenders holding at least 75% of the
aggregate Commitments may consent to allow a Credit Party to use cash
collateral in the context of a bankruptcy or insolvency proceeding.
11.7 COUNTERPARTS.
This Credit Agreement may be executed in any number of counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall constitute one and the same instrument. It shall not be necessary in
making proof of this Credit Agreement to produce or account for more than one
such counterpart for each of the parties hereto. Delivery by facsimile by any of
the parties hereto of an executed counterpart of this Credit Agreement shall be
as effective as an original executed counterpart hereof and shall be deemed a
representation that an original executed counterpart hereof will be delivered.
109
11.8 HEADINGS.
The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Credit Agreement.
11.9 SURVIVAL.
All indemnities set forth herein, including, without limitation, in Section
2.2(i), 3.11, 3.12, 10.5 or 11.5 shall survive the execution and delivery of
this Credit Agreement, the making of the Loans, the issuance of the Letters of
Credit, the repayment of the Loans, LOC Obligations and other obligations under
the Credit Documents and the termination of the Commitments hereunder, and all
representations and warranties made by the Credit Parties herein shall survive
delivery of the Notes and the making of the Loans hereunder.
11.10 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF TRIAL BY
JURY.
(a) THIS CREDIT AGREEMENT AND, UNLESS OTHERWISE EXPRESSLY
PROVIDED THEREIN, THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK. Any
legal action or proceeding with respect to this Credit Agreement or any
other Credit Document may be brought in the courts of the State of North
Carolina in Mecklenburg County or of the United States for the Western
District of North Carolina or of the State of
New York or of the United
States for the Southern District of
New York, and, by execution and
delivery of this Credit Agreement, each of the Credit Parties hereby
irrevocably accepts for itself and in respect of its property, generally
and unconditionally, the nonexclusive jurisdiction of such courts. Each of
the Credit Parties further irrevocably consents to the service of process
out of any of the aforementioned courts in any such action or proceeding by
the mailing of copies thereof by registered or certified mail, postage
prepaid, to it at the address set out for notices pursuant to Section 11.1,
such service to become effective three (3) days after such mailing. Nothing
herein shall affect the right of the Agent or any Lender to serve process
in any other manner permitted by law or to commence legal proceedings or to
otherwise proceed against any Credit Party in any other jurisdiction.
(b) Each of the Credit Parties hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of any
of the aforesaid actions or proceedings arising out of or in connection
with this Credit Agreement or any other Credit Document brought in the
courts referred to in subsection (a) above and hereby further irrevocably
waives and agrees not to plead or claim in any such court that any such
action or proceeding brought in any such court has been brought in an
inconvenient forum.
110
(c) TO THE EXTENT PERMITTED BY LAW, EACH OF THE AGENT, THE LENDERS
AND EACH OF THE CREDIT PARTIES HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
(d) The parties hereto agree that they shall not have a remedy of
punitive or exemplary damages against any other party hereto in any action,
proceeding or counterclaim arising out of or relating to this Credit
Agreement, any of the other Credit Documents or the transactions
contemplated herein or therein 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 action, proceeding or counterclaim arising
out of or relating to this Credit Agreement, any of the other Credit
Documents or the transactions contemplated herein or therein.
11.11 SEVERABILITY.
If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
11.12 ENTIRETY.
This Credit Agreement together with the other Credit Documents represent
the entire agreement of the parties hereto and thereto, and supersede all prior
agreements and understandings, oral or written, if any, including any commitment
letters or correspondence relating to the Credit Documents or the transactions
contemplated herein and therein (but excluding the Agent's Fee Letter).
11.13 BINDING EFFECT; TERMINATION OF THIS CREDIT AGREEMENT; TERMINATION OF
EXISTING CREDIT AGREEMENT.
(a) This Credit Agreement shall become effective at such time when
all of the conditions set forth in Section 5.1 have been satisfied or
waived by the Lenders and it shall have been executed by each Credit Party
and the Agent, and the Agent shall have received copies hereof (telefaxed
or otherwise) which, when taken together, bear the signatures of each
Lender, and thereafter this Credit Agreement shall be binding upon and
inure to the benefit of each Credit Party, the Agent and each Lender and
their respective successors and assigns.
(b) The term of this Credit Agreement shall be until no Loans, LOC
Obligations or any other amounts payable hereunder or under any of the
other Credit Documents shall
111
remain outstanding, no Letters of Credit shall be outstanding, all of the
Credit Party Obligations have been irrevocably satisfied in full and all of
the Commitments hereunder shall have expired or been terminated.
(c) The Credit Parties and the Lenders (including the Issuing
Lender) party to the Existing Credit Agreement each hereby agrees that, at
such time as this Credit Agreement shall have become effective pursuant to
the terms of subsection (a) above, (i) the Existing Credit Agreement
automatically shall be deemed amended and restated in its entirety by this
Credit Agreement, (ii) the Commitments under the Existing Credit Agreement
and as defined therein automatically shall be terminated and replaced with
the Commitments hereunder and (iii) all of the promissory notes executed by
the Borrower in connection with the Existing Credit Agreement automatically
shall be canceled and replaced by the Notes.
11.14 CONFIDENTIALITY.
The Agent and each Lender (each, a "LENDING PARTY") agrees to keep
confidential any information furnished or made available to it by the Credit
Parties pursuant to this Credit Agreement that is marked confidential; PROVIDED
that nothing herein shall prevent any Lending Party from disclosing such
information (a) to any other Lending Party or any Affiliate of any Lending
Party, or any officer, director, employee, agent, auditor, attorney or advisor
of any Lending Party or Affiliate of any Lending Party, (b) to any other Person
if it is reasonably necessary for the administration of the credit facility
provided herein, (c) as required by any law, rule, or regulation, (d) upon the
order of any court or administrative agency, (e) upon the request or demand of
any regulatory agency or authority, (f) that is or becomes available to the
public or that is or becomes available to any Lending Party other than as a
result of a disclosure by any Lending Party prohibited by this Credit Agreement,
(g) in connection with any litigation to which such Lending Party or any of its
Affiliates may be a party, (h) to the extent necessary in connection with the
exercise of any remedy under this Credit Agreement or any other Credit Document,
(i) subject to provisions substantially similar to those contained in this
Section 11.14, to any actual or proposed participant or assignee and (j) to GOLD
SHEETS and other similar bank trade publications (such information to consist of
deal terms and other information customarily found in such publications).
11.15 CONFLICT.
To the extent that there is a conflict or inconsistency between any
provision hereof, on the one hand, and any provision of any Credit Document, on
the other hand, this Credit Agreement shall control.
[Signature Page to Follow]
112
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this Credit Agreement to be duly executed and delivered as of the date first
above written.
BORROWER: NATIONAL EQUIPMENT SERVICES, INC.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
SUBSIDIARY
GUARANTORS: NES EQUIPMENT SERVICES CORPORATION
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
REBEL STUDIO RENTALS, INC.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
NES SHORING ACQUISITION, INC.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
NES MANAGEMENT SERVICE CORPORATION
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
NES PARTNERS, INC.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
NES COMPANIES, L.P.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
FALCONITE REBUILD CENTER, INC.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
NES INDIANA PARTNERS, INC.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
BRAMBLES EQUIPMENT SERVICES, INC.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
NES EQUPMENT RENTAL, L.P.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
NES TRAFFIC SAFETY, L.P.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
LENDERS: FIRST UNION NATIONAL BANK,
individually in its capacity as a Lender and in its
capacity as Agent
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
COMERICA BANK,
as a Lender
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
THE CIT GROUP/BUSINESS CREDIT, INC.,
as a Lender
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO,
as a Lender
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
US BANK, NATIONAL ASSOCIATION,
as a Lender
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
TRANSAMERICA BUSINESS CAPITAL CORPORATION,
as a Lender
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ BUSINESS FINANCIAL SERVICES INC.,
as a Lender
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
NATIONAL BANK OF CANADA, A CANADIAN CHARTERED BANK,
as a Lender
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
COMPASS BANK,
as a Lender
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
FLEET NATIONAL BANK,
as a Lender
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
BANKERS TRUST COMPANY,
as a Lender
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
LASALLE BANK NATIONAL ASSOCIATION,
as a Lender
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
CITICORP DEL-LEASE, INC.,
as a Lender
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
KEY CORPORATE CAPITAL INC.,
as a Lender
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
THE PROVIDENT BANK,
as a Lender
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
WACHOVIA BANK, N.A.,
as a Lender
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
▇▇▇▇▇▇ TRUST AND SAVINGS BANK,
as a Lender
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
CITIZENS BUSINESS CREDIT CORPORATION,
A DIVISION OF CITIZENS ISLAND CORPORATION,
as a Lender
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
ERSTE BANK DER OESTERREICHISCHEN SPARKASSEN AG,
as a Lender
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
THE FUJI BANK, LIMITED,
as a Lender
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
NATIONAL CITY BANK,
as a Lender
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
GENERAL ELECTRIC CAPITAL CORPORATION,
as a Lender
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
SUNTRUST BANK, ATLANTA,
as a Lender
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
UNION BANK OF CALIFORNIA, N.A.,
as a Lender
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
REGIONS BANK,
as a Lender
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
DEUTSCHE FINANCIAL SERVICES CORPORATION,
as a Lender
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
DRESDNER BANK AG,
NEW YORK AND GRAND CAYMAN BRANCHES,
as a Lender
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
ALLFIRST BANK,
as a Lender
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
DIME COMMERCIAL CORP.,
as a Lender
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
SOVEREIGN BANK,
as a Lender
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
GMAC COMMERCIAL CREDIT LLC
as a Lender
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
HARBOUR TOWN FUNDING TRUST,
as a Lender
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
RACE POINT CLO, LIMITED,
as a Lender
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------