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EXHIBIT 10.27
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CREDIT AGREEMENT
dated as of February 24, 1999,
among
STERILE RECOVERIES, INC.
as Borrower,
CERTAIN SUBSIDIARIES OF THE BORROWER
as Guarantors,
THE LENDERS FROM TIME TO TIME
PARTY HERETO,
as Lenders,
and
FIRST UNION NATIONAL BANK,
as Agent
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TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINITIONS.............................................................................................1
SECTION 1.1 Definitions..................................................................................1
SECTION 1.2 Accounting Terms and Determinations.........................................................16
SECTION 1.3 Other Definitional Terms....................................................................17
ARTICLE II CREDIT FACILITY.......................................................................................17
SECTION 2.1 Revolving Loans.............................................................................17
SECTION 2.2 Procedure for Advances of Revolving Loans...................................................17
SECTION 2.3 Repayment of Revolving Loans................................................................19
SECTION 2.4 Revolving Note..............................................................................19
SECTION 2.5 Swingline Loan Subfacility..................................................................19
SECTION 2.6 Procedure for Advances of Swingline Loans...................................................20
SECTION 2.7 Repayment of Swingline Loans................................................................20
SECTION 2.8 Swingline Note..............................................................................21
SECTION 2.9 Prepayments of the Loans....................................................................21
SECTION 2.10 Termination and Reduction of Revolving Commitments.........................................23
SECTION 2.11 Termination Date...........................................................................23
SECTION 2.12 Use of Proceeds............................................................................23
ARTICLE III GENERAL LOAN PROVISIONS..............................................................................23
SECTION 3.1 Interest....................................................................................23
SECTION 3.2 Notice and Manner of Conversion or Continuation of Loans....................................25
SECTION 3.3 Fees........................................................................................26
SECTION 3.4 Manner of Payment...........................................................................26
SECTION 3.5 Changed Circumstances.......................................................................27
SECTION 3.6 Indemnity...................................................................................29
SECTION 3.7 Capital Requirement.........................................................................29
SECTION 3.8 Taxes.......................................................................................29
SECTION 3.9 Sharing of Payments.........................................................................31
SECTION 3.10 Pro Rata Treatment.........................................................................31
ARTICLE IV [Reserved]............................................................................................32
ARTICLE V CLOSING: CONDITIONS OF CLOSING AND BORROWING...........................................................32
SECTION 5.1 Conditions to Closing and Initial Loans.....................................................32
SECTION 5.2 Conditions to All Loans.....................................................................35
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE BORROWER........................................................35
SECTION 6.1 Representations and Warranties..............................................................35
SECTION 6.2 Survival of Representations and Warranties, Etc.............................................42
ARTICLE VII FINANCIAL INFORMATION AND NOTICES....................................................................42
SECTION 7.1 Financial Statements and Projections........................................................42
SECTION 7.2 Officer's Compliance Certificate............................................................43
SECTION 7.3 Notice of Litigation and Other Matters......................................................43
SECTION 7.4 Accuracy of Information.....................................................................44
ARTICLE VIII AFFIRMATIVE COVENANTS...............................................................................45
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SECTION 8.1 Preservation of Corporate Existence and Related Matters.....................................45
SECTION 8.2 Maintenance of Property.....................................................................45
SECTION 8.3 Insurance...................................................................................45
SECTION 8.4 Accounting Methods and Financial Records....................................................45
SECTION 8.5 Payment and Performance of Obligations......................................................46
SECTION 8.6 Compliance With Laws, Approvals and Agreements..............................................46
SECTION 8.7 Environmental Management....................................................................46
SECTION 8.8 Compliance with ERISA.......................................................................47
SECTION 8.9 Conduct of Business.........................................................................47
SECTION 8.10 Visits and Inspections.....................................................................47
SECTION 8.11 Year 2000 Compatibility....................................................................47
SECTION 8.12 Material Contracts.........................................................................47
SECTION 8.13 Further Assurances.........................................................................48
SECTION 8.14 Security Interests.........................................................................48
SECTION 8.15 Additional Guarantors......................................................................48
ARTICLE IX FINANCIAL COVENANTS...................................................................................49
SECTION 9.1 Minimum Consolidated Net Worth..............................................................49
SECTION 9.2 Consolidated Leverage Ratio.................................................................49
SECTION 9.3 Fixed Charge Coverage Ratio................................................................49
ARTICLE X NEGATIVE COVENANTS.....................................................................................49
SECTION 10.1 Limitations on Debt........................................................................49
SECTION 10.2 Limitations on Liens.......................................................................50
SECTION 10.3 Limitations on Loans, Advances, Investments and Acquisitions...............................51
SECTION 10.4 Limitations on Mergers and Liquidation.....................................................51
SECTION 10.5 Limitations on Sale of Assets..............................................................51
SECTION 10.6 Transactions with Affiliates...............................................................52
SECTION 10.7 Certain Accounting Changes.................................................................52
SECTION 10.8 No Restricted Payments.....................................................................52
SECTION 10.9 [Intentionally Omitted]....................................................................52
SECTION 10.10 Additional Negative Pledges...............................................................52
SECTION 10.11 Sale and Leaseback........................................................................52
SECTION 10.12 Licenses, Etc.............................................................................53
SECTION 10.13 Limitations...............................................................................53
SECTION 10.14 Amendments; Payments and Prepayments of Subordinated Debt.................................53
ARTICLE XI DEFAULT AND REMEDIES..................................................................................53
SECTION 11.1 Events of Default..........................................................................53
SECTION 11.2 Remedies...................................................................................56
SECTION 11.3 Rights and Remedies Cumulative; Non-Waiver; etc............................................56
SECTION 11.4 Crediting of Payments and Proceeds.........................................................57
ARTICLE XII THE AGENT............................................................................................57
SECTION 12.1 Appointment of Agent.......................................................................57
SECTION 12.2 Nature of Duties of Agent..................................................................57
SECTION 12.3 Lack of Reliance on Agent..................................................................58
SECTION 12.4 Certain Rights of the Agent................................................................58
SECTION 12.5 Reliance by Agent..........................................................................58
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SECTION 12.6 Indemnification of Agent...................................................................59
SECTION 12.7 The Agent in its Individual Capacity.......................................................59
SECTION 12.8 Holders of Notes...........................................................................59
SECTION 12.9 Successor Agent............................................................................59
SECTION 12.10 Actions with Respect to Defaults..........................................................60
SECTION 12.11 Delivery of Information...................................................................60
ARTICLE XIII MISCELLANEOUS.......................................................................................61
SECTION 13.1 Notices....................................................................................61
SECTION 13.2 Governing Law..............................................................................62
SECTION 13.3 Arbitration; Consent to Jurisdiction and Service of Process................................62
SECTION 13.4 Waiver of Jury Trial.......................................................................63
SECTION 13.5 Reversal of Payments.......................................................................63
SECTION 13.6 Injunctive Relief..........................................................................64
SECTION 13.7 [Reserved].................................................................................64
SECTION 13.8 Successors and Assigns; Participations.....................................................64
SECTION 13.9 Payment of Expenses; Indemnification.......................................................67
SECTION 13.10 Amendments, Waivers and Consents..........................................................68
SECTION 13.11 Information...............................................................................68
SECTION 13.12 Performance of Duties.....................................................................69
SECTION 13.13 Nonliability of Agent and Lenders.........................................................69
SECTION 13.14 All Powers Coupled with Interest..........................................................69
SECTION 13.15 Survival of Indemnities...................................................................69
SECTION 13.16 Titles and Captions.......................................................................70
SECTION 13.17 Severability of Provisions................................................................70
SECTION 13.18 Counterparts..............................................................................70
SECTION 13.19 Term of Agreement.........................................................................70
ARTICLE XIV GUARANTY.............................................................................................70
Section 14.1 The Guaranty...............................................................................70
Section 14.2 Bankruptcy.................................................................................71
Section 14.3 Nature of Liability........................................................................71
Section 14.4 Independent Obligation.....................................................................72
Section 14.5 Authorization..............................................................................72
Section 14.6 Reliance...................................................................................72
Section 14.7 Waiver.....................................................................................72
Section 14.8 Limitation on Enforcement..................................................................73
Section 14.9 Confirmation of Payment....................................................................74
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EXHIBITS
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Exhibit A Form of Assignment and Acceptance
Exhibit B-1 Form of Revolving Note
Exhibit B-2 Form of Swingline Note
Exhibit C Form of Notice of Borrowing
Exhibit D Form of Notice of Conversion/Continuation
Exhibit E Form of Officer's Compliance Certificate
Exhibit F Form of Joinder Agreement
SCHEDULES
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Schedule 1.1A Lenders and Commitments
Schedule 1.1B Sweep Plus Loan/Investment Services Description
Schedule 5.1 Corporate Structure
Schedule 6.1(p) Debt, Contingent Obligations and Liens
Schedule 6.1(w) Collateral Locations; Offices
Schedule 6.1(x) Fictitious Business Names
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this "Credit Agreement", or this "Agreement"),
dated as of February 24, 1999, is by and among STERILE RECOVERIES, INC., a
Florida corporation (the "Borrower"), certain Subsidiaries of the Borrower from
time to time party hereto (the "Guarantors"), each of those financial
institutions identified as Lenders on Schedule 1.1A hereto (together with each
of their successors and assigns, referred to individually as a "Lender" and,
collectively, as the "Lenders"), and FIRST UNION NATIONAL BANK ("First Union"),
acting in the manner and to the extent described in Article XII hereof (in such
capacity, the "Agent").
STATEMENT OF PURPOSE
The Borrower has requested, and the Lenders have agreed, to extend a
revolving credit facility to the Borrower in the aggregate principal amount of
up to $15,000,000 on the terms and conditions of this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, such
parties hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS.
The following terms when used in this Agreement shall have the meanings
assigned to them below:
"Additional Credit Party" shall mean each Person that becomes a Guarantor
by execution of a Joinder Agreement in accordance with Section 8.15.
"Adjusted LIBOR Rate" means for any LIBOR 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 LIBOR Rate for such LIBOR Loan for such Interest Period by (b)
a percentage equal to one hundred percent (100%) minus the Adjusted LIBOR Rate
Reserve Percentage for such LIBOR Loan for such Interest Period.
"Adjusted LIBOR Rate Reserve Percentage" means, for the Interest Period
for each LIBOR Loan comprising part of the same borrowing (including
conversions, extensions and renewals), the percentage applicable two (2)
Business Days before the first day of such Interest Period under regulations
issued from time to time by the Board of Governors of the Federal Reserve
System (or any successor) for determining the maximum reserve requirement
(including, without limitation, any emergency, supplemental or other marginal
reserve requirement) for a
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member bank of the Federal Reserve System in New York City with respect to
liabilities or assets consisting of or including "eurocurrency liabilities" (as
such term is used in Regulation D), or with respect to any other category of
liabilities which includes deposits by reference to which the interest rate on
LIBOR Loans is determined, having a term equal to the Interest Period for which
such Adjusted LIBOR Rate Reserve Percentage is determined.
"Affiliate" means, with respect to any Person, any other Person which
directly or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such Person. The term "control"
means (a) the power to vote ten percent (10%) or more of the securities or
other equity interests of a Person having ordinary voting power, or (b) the
possession, directly or indirectly, of any other power to direct or cause the
direction of the management and policies of a Person, whether through ownership
of voting securities, by contract or otherwise.
"Agent" means First Union as provided in the preamble to this Credit
Agreement or any successor to First Union.
"Agent's Office" means the office of Agent specified in or determined in
accordance with the provisions of Section 13.1.
"Agreement" means this Credit Agreement, as amended or supplemented from
time to time.
"Applicable Law" means all applicable provisions of constitutions,
statutes, rules, regulations and orders of all Governmental Authorities and all
orders and decrees of all courts and arbitrators.
"Applicable Margin" means for LIBOR Loans, LIBOR Market Index Swingline
Loans and Base Rate Loans, the appropriate applicable percentages corresponding
to the Consolidated Leverage Ratio in effect as of the most recent Calculation
Date as shown below:
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Applicable Margin for
LIBOR Loans and LIBOR
Market Index Swingline Applicable Margin for Base
Tier Levels Consolidated Leverage Ratio Loans Rate Loans
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I < 1.0 : 1.0 1.0% 0.0%
-
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II > 1.0 : 1.0 < 2.0 : 1.0 1.25% 0.25%
-
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III > 2.0 : 1.0 1.50% 0.50%
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The Applicable Margin shall be determined and adjusted quarterly on the date
(each a "Calculation Date") five Business Days after the date on which the
Agent receives the quarterly officer's certificate provided by the Borrower in
accordance with the provisions of Section 7.2; provided, however, that (i) the
initial Applicable Margin shall be based on Tier Level I (as shown
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above) and shall remain at Tier Level I until delivery of the Borrower's
audited financial statements for December 31, 1998 and, thereafter, the Tier
Level shall be determined by the then current Consolidated Leverage Ratio, 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 7.2, the Applicable Margins from the applicable date of such failure
shall be based on Tier Level III until five Business Days after an appropriate
officer's certificate is provided, whereupon the Tier Level shall be determined
by the then current Consolidated Leverage Ratio. Except as set forth above,
each Applicable Margin 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 the
Borrower or any of its Subsidiaries whether by sale, lease, transfer or
otherwise. The term "Asset Disposition" shall not include (a) any Equity
Issuance, (b) the sale of inventory in the ordinary course of business or (c)
the sale or other disposition of assets no longer necessary in the business of
the Borrower or any Subsidiary of the Borrower so long as the net proceeds
received from such sales or other dispositions during the term of this Credit
Agreement are not in excess of $100,000.
"Assignment and Acceptance" means an assignment and acceptance entered
into by an assigning Lender and an assignee Lender, accepted by the Agent, in
accordance with Section 13.8, in the form attached hereto as Exhibit A.
"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 in effect on such day. If for any reason the Agent shall
have determined (which determination shall be conclusive absent manifest error)
that it is unable after due inquiry to ascertain the Federal Funds Rate for any
reason, including the inability or failure of the Agent to obtain sufficient
quotations in accordance with the terms hereof, the Base Rate shall be
determined without regard to clause (i) of the first sentence of this
definition until the circumstances giving rise to such inability no longer
exist. 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, respectively.
"Base Rate Loan" means any Loan bearing interest at a rate based upon the
Base Rate plus the Applicable Margin.
"Borrower" means Sterile Recoveries, Inc., a Florida corporation, in its
capacity as borrower hereunder.
"Business Day" means (a) for all purposes other than as set forth in
clause (b) below, any day other than a Saturday, Sunday or legal holiday on
which banks in Charlotte, North Carolina and New York, New York, are open for
the conduct of their commercial banking business and (b) with respect to all
notices and determinations in connection with, and payments of principal and
interest or any other amounts with respect to, any LIBOR Loan, any day that is
a Business
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Day described in clause (a) and that is also a day on which commercial banks in
London are open for international business (including dealings in Dollar
deposits in the London interbank market).
"Capital Asset" means, with respect to the Borrower and its Subsidiaries,
any asset that should, in accordance with GAAP, be classified and accounted for
as a capital asset on a consolidated balance sheet of the Borrower and its
Subsidiaries.
"Capital Lease" means, with respect to the Borrower and its Subsidiaries,
any lease of any property that should, in accordance with GAAP, be classified
and accounted for as a capital lease on a consolidated balance sheet of the
Borrower and its Subsidiaries.
"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, as to any Person, (i) securities issued or
directly and fully guaranteed or insured by the United States or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States is pledged in support thereof) having maturities of not more than one
year from the date of acquisition, (ii) time deposits or certificates of
deposit of any commercial bank incorporated under the laws of the United States
or any state thereof, of recognized standing having capital and unimpaired
surplus in excess of $1,000,000,000 and whose short-term commercial paper
rating at the time of acquisition is at least A-1 or the equivalent thereof by
Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. ("S&P"), or at
least P-1 or the equivalent thereof by ▇▇▇▇▇'▇ Investors Service, Inc. (any
such bank, an "Approved Bank"), with such deposits or certificates having
maturities of not more than one year from the date of acquisition, (iii)
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clauses (i) and (ii) above entered into
with any Approved Bank, (iv) commercial paper or finance company paper issued
by any Person incorporated under the laws of the United States or any state
thereof and rated at least A-1 or the equivalent thereof by S&P or at least P-1
or the equivalent thereof by ▇▇▇▇▇'▇ Investors Service, Inc., and in each case
maturing not more than one year after the date of acquisition, and (v)
investments in money market funds that are registered under the Investment
Company Act of 1940, which have net assets of at least $1,000,000,000 and at
least 85% of whose assets consist of securities and other obligations of the
type described in clauses (i) through (iv) above. All such Cash Equivalents
must be denominated solely for payment in Dollars.
"Change in Control" means (a) any "person" or "group" of persons (within
the meaning of Section 13(d) of the Securities Exchange Act of 1934, as
amended) other than ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. shall have acquired beneficial ownership, directly or
indirectly, or shall have entered into a contract or arrangement that, upon
consummation, will result in its or their acquisition of, control over 20% or
more of the votes attributable to the voting stock of the Borrower; or (b)
individuals who at the beginning of any
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period of twenty-four (24) consecutive calendar months were directors of the
Borrower (together with any new directors whose election by the board of
directors of the Borrower or whose nomination for election by the shareholders
of the Borrower was approved by a vote of a least two-thirds of the directors
then still in office who either were directors at the beginning of such period
or whose election or nomination for election was previously so approved) cease
for any reason to constitute a majority of the board of directors of the
Borrower then in office.
"Closing Date" means the date of this Agreement.
"Code" means the Internal Revenue Code of 1986, and the rules and
regulations thereunder, each as amended or supplemented from time to time.
"Collateral" means, collectively, the Collateral as defined in the
Security Agreement and the Pledged Collateral as defined in the Pledge
Agreement.
"Collateral Agent" means First Union National Bank, in its capacity as
collateral agent for the Lenders and the ELLF Lenders under the Pledge
Agreement and the Security Agreement.
"Commitment" means the Revolving Commitment and the Swingline Commitment.
"Commitment Fee" means the fee required to be paid to the Agent for the
benefit of the Lenders at the end of each calendar quarter as partial
compensation for extending the Revolving Committed Amount to the Borrower,
calculated in accordance with Section 3.3(b).
"Consolidated" means, when used with reference to financial statements or
financial statement items of the Borrower and its Subsidiaries or any other
Person, such statements or items on a consolidated basis in accordance with
applicable principles of consolidation under GAAP.
"Consolidated EBITDA" means, with respect to the Borrower and its
Subsidiaries, for any period of determination, (a) Consolidated Net Income for
such period, plus (b) the sum of the following to the extent deducted in the
determination of Consolidated Net Income: (i) Consolidated Interest Expense,
(ii) income and franchise taxes and (iii) depreciation and amortization
expense, in each case determined in accordance with GAAP for such period.
"Consolidated Interest Expense" means, for any period of determination,
the gross interest expense of the Borrower and its Subsidiaries (including any
amount attributable to interest in respect of payments under Capital Leases and
any net amount payable under any Hedging Agreement), all determined for such
period on a Consolidated basis in accordance with GAAP.
"Consolidated Leverage Ratio" means, as of the last day of each fiscal
quarter of the Borrower, the ratio of Funded Debt of the Borrower and its
Subsidiaries (computed as of the last day of such fiscal quarter) to
Consolidated EBITDA (computed for the four fiscal quarter period then ending).
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"Consolidated Net Income" means, for any period of determination with
respect to the Borrower and its Subsidiaries, net income on a consolidated
basis determined in accordance with GAAP applied on a consistent basis, but
excluding for purposes of determining the Consolidated Leverage Ratio and the
Fixed Charge Coverage Ratio, any extraordinary gains or losses and related tax
effects thereon. Except as expressly provided otherwise, the applicable period
shall be for the four consecutive quarters ending as of the date of
determination.
"Consolidated Net Worth" means, at any date of determination for the
Borrower and its Subsidiaries, shareholders' equity or net worth as determined
in accordance with GAAP.
"Consolidated Rental Expense" means, for any period, rental expense under
Operating Leases of the Borrower and its Subsidiaries on a consolidated basis
for such period, as determined in accordance with GAAP.
"Consolidated Scheduled Funded Debt Payments" means, as of the end of each
fiscal quarter of the Borrower and its Subsidiaries, for the Borrower and its
Subsidiaries on a consolidated basis, the sum of all scheduled payments of
principal on Funded Debt for the applicable period ending on such date
(including the principal component of payments due on Capital Leases during the
twelve month period ending on such date); it being understood that Scheduled
Funded Debt Payments shall not include voluntary prepayments or the mandatory
prepayments required pursuant to this Agreement.
"Contingent Obligation" means, at any date of determination, any
obligation, contingent or otherwise, of the Borrower or any of its Subsidiaries
pursuant to which such Person has directly or indirectly guaranteed any Debt or
other obligation of any other Person and, without limiting the generality of
the foregoing, any obligation, direct or indirect, contingent or otherwise, of
any such Person (a) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Debt or other obligation (whether arising by
virtue of partnership arrangements, by agreement to keep well, to purchase
assets, goods, securities or services, to take-or-pay, or to maintain financial
statement condition or otherwise) or (b) entered into for the purpose of
assuring in any other manner the obligee of such Debt or other obligation of
the payment thereof or to protect such obligee against loss in respect thereof
(in whole or in part); provided, that the term Contingent Obligation shall not
include endorsements for collection or deposit in the ordinary course of
business.
"Credit Documents" means, collectively, this Agreement, the Notes, the
Pledge Agreement, the Security Agreement, each Joinder Agreement, any Hedging
Agreement executed by a Lender and each other document, instrument and
agreement executed and delivered to a Lender by any Credit Party in connection
with this Agreement or otherwise referred to herein or contemplated hereby, all
as may be amended, modified or otherwise supplemented from time to time.
"Credit Parties" means, collectively, the Borrower and the Guarantors.
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"Debt" 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 Debt of others secured by (or for which the holder of such
Debt has an existing right, contingent or otherwise, to be secured by) any Lien
on, or payable out of the proceeds of production from, property owned or
acquired by such Person, whether or not the obligations secured thereby have
been assumed, (g) all Contingent Obligations of any such Person, (h) the
principal portion of all obligations of such Person under Capital Leases, (i)
all obligations of such Person under Hedging Agreements, (j) the maximum amount
of all standby letters of credit issued or bankers' acceptances facilities
created for the account of such Person and, without duplication, all drafts
drawn thereunder (to the extent unreimbursed), (k) all preferred Capital Stock
issued by such Person and required by the terms thereof to be redeemed, or for
which mandatory sinking fund payments are due, prior to the Maturity Date, (l)
the principal balance outstanding under any synthetic lease, tax retention
operating lease, off-balance sheet loan or similar off-balance sheet financing
product to which such Person is a party, where such transaction is considered
borrowed money indebtedness for tax purposes but is classified as an operating
lease in accordance with GAAP, and (m) the Debt of any partnership or
unincorporated joint venture in which such Person is legally obligated or has a
reasonable expectation of being liable with respect thereto (excluding, for
purposes hereof, the Debt of any such partnership or unincorporated joint
venture which is not majority-owned by such Person as of the Closing Date until
such time, if ever, that such entity becomes majority-owned by such person).
"Debt Issuance" means the issuance of any Debt for borrowed money by the
Borrower or any of its Subsidiaries (other than Debt permitted by Section
10.1).
"Default" means any of the events specified in Section 11.1 which with the
passage of time, the giving of notice, or both, would constitute an Event of
Default.
"Default Rate" means the interest rate applicable to the Loans after the
occurrence and during the continuance of an Event of Default as described in
Section 3.1(c).
"Dollars" or "$" means, unless otherwise qualified, dollars in lawful
currency of the United States.
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"ELLF Lenders" means the lenders, holders and other Financing Parties from
time to time party to the ELLF Participation Agreement.
"ELLF Operative Agreements" means the ELLF Participation Agreement and
each of the other "Operative Agreements" as such term in defined in Appendix A
to the ELLF Participation Agreement.
"ELLF Participation Agreement" means that certain Participation Agreement
dated as of the date hereof among the Borrower, as the construction agent and
the lessee, First Security Bank, National Association, as owner trustee, the
lenders identified therein as lenders and the lenders identified therein as
holders.
"Employee Benefit Plan" means any employee benefit plan within the meaning
of Section 3(3) of ERISA which (a) is maintained for employees of the Borrower
or any ERISA Affiliate or (b) has at any time within the preceding six (6)
years been maintained for the employees of the Borrower or any current or
former ERISA Affiliate.
"Environmental Laws" means any and all federal, state and local laws,
statutes, ordinances, rules, regulations, permits, licenses, approvals,
interpretations and orders of courts or Governmental Authorities, relating to
the protection of human health, natural resources or the environment,
including, but not limited to, requirements pertaining to the manufacture,
processing, distribution, use, treatment, storage, disposal, transportation,
handling, reporting, licensing, permitting, investigation, removal or
remediation of Hazardous Materials or liability resulting from the release or
threatened release of Hazardous Materials into the environment. Environmental
Laws include, without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. ss. 9601 et seq.), the Hazardous
Material Transportation Act (33 U.S.C. ss. 1251 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. ss. 6901 et seq.), the Federal Water
Pollution Control Act (33 U.S.C. ss. 201 et seq.), the Clean Air Act (42 U.S.C.
ss. 7401 et. seq.), the Toxic substances control Act (15 U.S.C. ss. 2601 et
seq.), the Safe Drinking Water Act (42 U.S.C. ss. 300f et seq.), the Federal
Insecticide, Fungicide and Rodentizide Act (7 U.S.C. ss. 136 et seq.), the
Emergency Planning and Community Right-to-Know Act (42 U.S.C. ss. 11001 et
seq., as amended), the Environmental Protection Agency's regulations relating
to underground storage tanks (40 C.F.R. Parts 280 and 281), and the
Occupational Safety and Health Act (29 U.S.C. ss. 651 et seq.), analogous state
statutes and the rules and regulations promulgated under the foregoing, as such
statutes may be amended or supplemented from time to time as well as the common
law as it pertains to Hazardous Materials.
"Equity Issuance" means any issuance by the Borrower or any of its
Subsidiaries to any Person which is not a Credit Party of (a) shares of its
Capital Stock, (b) any shares of its Capital Stock pursuant to the exercise of
options or warrants or (c) any shares of its Capital Stock pursuant to the
conversion of any debt securities to equity. The term "Equity Issuance" shall
not include any Asset Disposition.
"ERISA" means the Employee Retirement Income Security Act of 1974, and the
rules and regulations thereunder, each as amended or supplemented from time to
time.
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"ERISA Affiliate" means any Person who together with the Borrower is
treated as a single employer within the meaning of Section 414(b), (c), (m) or
(o) of the Code or Section 4001(b) of ERISA.
"Event of Default" means any of the events specified as an Event of
Default in Section 11.1.
"Excluded Asset Disposition" means the sale, transfer, lease or other
disposition of assets described in clauses (a) and (b) of Section 10.5.
"Existing Debt" means the aggregate loans in the amount of up to
$15,000,000 made by First Union to the Borrower under the Loan Agreement dated
as of October 15, 1996.
"FDIC" means the Federal Deposit Insurance Corporation, or any successor
thereto.
"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 of the quotations
for such day on such transactions received by the Agent from three Federal
Funds brokers of recognized standing selected by it.
"Fees" means the Commitment Fee and any other fees payable to the Agent or
the Lenders pursuant to the Credit Documents.
"Financing Parties" shall have the meaning assigned thereto in Appendix A
to the ELLF Participation Agreement.
"Fiscal Year" means the fiscal year of the Borrower and its Subsidiaries
ending on December 31.
"Fixed Charge Coverage Ratio" means, as of the end of each fiscal quarter
of the Borrower and its Subsidiaries for the twelve month period ending on such
date, the ratio of (a) the sum of (i) Consolidated EBITDA for the applicable
period plus (ii) Consolidated Rental Expense for the applicable period to (b)
the sum of (i) Consolidated Interest Expense for the applicable period (but
only to the extent paid in cash) plus (ii) Consolidated Scheduled Funded Debt
Payments for the applicable period plus (iii) Consolidated Rental Expense for
the applicable period plus (iv) income and franchise taxes for the applicable
period plus (v) dividends paid by the Borrower for the applicable period.
"Foreign Lender" shall have the meaning given to such term in Section
3.8(a).
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"Funded Debt" means, with respect to any Person, without duplication, (i)
all Debt of such Person for borrowed money, (ii) all obligations of such Person
evidenced by bonds, debentures, notes or similar instruments, or upon which
interest payments are customarily made, (iii) all purchase money Indebtedness
(including for purposes hereof, indebtedness and obligations described in
clauses (c) and (d) of the definition of "Debt") of such Person, including
without limitation the principal portion of all obligations of such Person
under Capital Leases, (iv) all Contingent Obligations of such Person with
respect to Funded Debt of another Person, (v) the maximum available amount of
all standby letters of credit or acceptances issued or created for the account
of such Person, (vi) all Funded Debt of another Person secured by a Lien on any
Property of such Person, whether or not such Funded Debt has been assumed,
provided that for purposes hereof the amount of such Funded Debt shall be
limited to the greater of (A) the amount of such Funded Debt as to which there
is recourse to such Person and (B) the fair market value of the property which
is subject to the Lien, (vii) the outstanding attributed principal amount under
any securitization transaction, and (viii) the principal balance outstanding
under any synthetic lease, tax retention operating lease, off-balance sheet
loan or similar off-balance sheet financing product to which such Person is a
party, where such transaction is considered borrowed money indebtedness for tax
purposes but is classified as an operating lease in accordance with GAAP
(including, without limitation, the principal portion of all obligations due
and owing under the ELLF Operative Agreements. The Funded Debt of any Person
shall include the Funded Debt of any partnership or joint venture in which such
Person is a general partner or joint venturer, but only to the extent to which
there is recourse to such Person for the payment of such Funded Debt.
"GAAP" means generally accepted accounting principles, as recognized by
the American Institute of Certified Public Accountants and the Financial
Accounting Standards Board, maintained an a consistent basis for the Borrower
and its Subsidiaries throughout the period indicated and consistent with the
prior financial practice of the Borrower and its Subsidiaries.
"Governmental Approvals" means all authorizations, consents, approvals,
licenses and exemptions of, registrations and filings with, and reports to, all
Governmental Authorities.
"Governmental Authority" means any nation, province, state or political
subdivision thereof, and any government or any Person exercising executive,
legislative, regulatory or administrative functions of or pertaining to
government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"Guarantor" shall mean any of the Subsidiaries of the Borrower identified
as a "Guarantor" on the signature pages hereto and the Additional Credit
Parties which execute a Joinder Agreement, together with their successors and
permitted assigns.
"Guaranty" shall mean the guaranty given by the Guarantors pursuant to
Article XIV.
"Hazardous Materials" means any substances or materials (a) which are or
become defined as hazardous wastes, hazardous substances, pollutants,
contaminants, chemical substances or mixtures or toxic substances under any
Environmental Law, (b) which are toxic,
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explosive, corrosive, flammable, infectious, radioactive, carcinogenic,
mutagenic or otherwise harmful to human health, natural resources or the
environment and are or become regulated by any Governmental Authority, (c) the
presence of which require investigation, removal or remediation under any
Environmental Law or common law, (d) the discharge or emission or release of
which requires a permit or license under any Environmental Law or other
Governmental Approval, (e) which constitute a nuisance, a trespass or pose a
health or safety hazard to persons, plants, animals or neighboring properties
either currently or in the past or in the future, (f) which contain, without
limitation, asbestos, polychlorinated biphenyls, urea formaldehyde foam
insulation, petroleum hydrocarbons, petroleum derived substances or waste,
crude oil nuclear fuel, natural gas or synthetic gas, or (g) which are
materials described in clauses (a) through (f) above and are contained in or
intended for containment in underground or aboveground storage tanks, whether
empty, filled or partially filled with any such substances.
"Hedging Agreement" means any agreement with respect to an interest rate
swap, collar, cap, floor or a forward rate agreement or other agreement
regarding the hedging of interest rate risk exposure executed in connection
with hedging the interest rate exposure of the Borrower or any of its
Subsidiaries under any agreement executed in connection with any Debt, and any
confirming letter executed pursuant to such hedging agreement, all as amended
or supplemented from time to time.
"Interest Period" has the meaning assigned thereto in Section 3.1(b).
"Joinder Agreement" shall mean a Joinder Agreement substantially in the
form of Exhibit F, executed and delivered by an Additional Credit Party in
accordance with the provisions of Section 8.14.
"Lenders" shall have the meaning given such term in the introductory
paragraph of this Agreement.
"LIBOR Loan" means any Revolving Loan bearing interest at a rate based
upon the Adjusted LIBOR Rate plus the Applicable Margin.
"LIBOR Market Index Swingline Loan" means any Swingline Loan bearing
interest at a rate based upon the LIBOR Market Index Rate plus the Applicable
Margin.
"LIBOR Market Index Rate" means for any day, the rate for one month Dollar
deposits as reported on Telerate page 3750 as of 11:00 a.m., London time, on
such day, or if such day is not a Business Day, then the immediately preceding
Business Day (or if not so reported then as determined by the Swingline Lender
from another recognized source or interbank quotation).
"LIBOR Rate" means, for any LIBOR Loan for any Interest Period therefor,
the rate per annum 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 (2) Business Days prior to the first day of such
Interest Period for a term comparable to such Interest Period. If for any
reason such rate is not available, the term "LIBOR Rate" shall mean, for any
LIBOR Loan
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for any Interest Period therefor, the rate per annum 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 (2) 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 (1) rate is specified on Reuters
Screen LIBO Page, the applicable rate shall be the arithmetic mean of all such
rates.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
For the purposes of this Agreement, a Person's assets shall be deemed to be
subject to a Lien if such Person has acquired or holds such assets subject to
the interest of a vendor or lessor under any conditional sale agreement,
Capital Lease or other title retention agreement relating to such asset.
"Loan" means any Revolving Loan or any Swingline Loan (including any LIBOR
Market Index Swingline Loan) made to the Borrower hereunder.
"Material Adverse Effect" means a material adverse effect on (i) the
properties, business, operations, condition (financial or otherwise)
liabilities or capitalization of the Borrower and its Subsidiaries, taken as a
whole, (ii) the ability of any Credit Party to pay and perform its obligations
under this Agreement or any other Credit Document executed in connection
herewith or any credit agreement executed in replacement hereof, or (iii) the
validity or enforceability of any such Credit Documents or the rights and
remedies of the Lender thereunder, in each case as determined by the Agent in
its reasonable discretion.
"Material Contract" means any contract or other arrangement (other than
the Credit Documents), whether written or oral, to which the Borrower or any of
its Subsidiaries is a party as to which the breach, nonperformance,
cancellation or failure to renew by any party thereto could have a Material
Adverse Effect.
"Maturity Date" means February 28, 2002.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate is making, or
is accruing an obligation to make, contributions within the preceding six (6)
years.
"Net Cash Proceeds" means the aggregate cash proceeds received by the
Borrower and its Subsidiaries in respect of any Asset Disposition, Equity
Issuance or Debt Issuance, net of (a) direct costs (including, without
limitation, legal, accounting and investment banking fees, and sales
commissions) and (b) taxes paid or payable as a result thereof; it being
understood that "Net Cash Proceeds" shall include, without limitation, any cash
received upon the sale or other disposition of any non-cash consideration
received by the Borrower and its Subsidiaries in any Asset Disposition, Equity
Issuance or Debt Issuance.
"Notes" means the Revolving Notes and the Swingline Note.
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"Notice of Borrowing" has the meaning assigned thereto in Section 2.2(a)
and Section 2.6(a).
"Notice of Conversion/Continuation" has the meaning assigned thereto in
Section 3.2.
"Obligations" means the Loans, any other loans and advances or extensions
of credit made or to be made by any Lender to the Borrower pursuant to this
Credit Agreement, together with interest thereon (including interest which
would be payable as post-petition interest in connection with any bankruptcy or
similar proceeding) and all indebtedness, fees, liabilities and obligations
which may at any time be owing by the Borrower to any Lender in each case
pursuant to this Credit Agreement or any other Credit Document, whether now in
existence or incurred by the Borrower from time to time hereafter, whether
unsecured or secured by pledge, Lien upon or security interest in any of the
Credit Parties' assets or property or the assets or property of any other
Person, whether such indebtedness is absolute or contingent, joint or several,
matured or unmatured, direct or indirect and whether the Borrower is liable to
such Lender for such indebtedness as principal, surety, endorser, guarantor or
otherwise. Obligations shall also include any other indebtedness owing to any
Lender by the Borrower under this Credit Agreement and the other Credit
Documents, the Borrower's liability to any Lender pursuant to this Credit
Agreement as maker or endorser of any promissory note or other instrument for
the payment of money, the Borrower's liability to any Lender pursuant to this
Credit Agreement or any other Credit Document under any instrument of guaranty
or indemnity, or arising under any guaranty, endorsement or undertaking which
any Lender may make or issue to others for the Borrower's account pursuant to
this Credit Agreement, and all liabilities and obligations owing from the
Borrower to any Lender, or any affiliate of a Lender, arising under Hedging
Agreements entered into for the purpose of hedging interest rate risk under
this Credit Agreement and the other Credit Documents.
"Officer's Compliance Certificate" has the meaning assigned thereto in
Section 7.2.
"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.
"Other Taxes" has the meaning assigned thereto in Section 3.8(c).
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
agency.
"Pension Plan" means any Employee Benefit Plan, other than a Multiemployer
Plan, which is subject to the provisions of Title IV of ERISA or Section 412 of
the Code and which (a) is maintained for employees of the Borrower or any ERISA
Affiliates or (b) has at any time within the preceding six (6) years been
maintained for the employees of the Borrower or any of its current or former
ERISA Affiliates.
"Permitted Liens" has the meaning assigned thereto in Section 10.2.
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"Person" means an individual, corporation, partnership, limited liability
company, association, trust, business trust, joint venture, joint stock
company, pool, syndicate, sole proprietorship, unincorporated organization,
Governmental Authority or any other form of entity or group thereof
specifically listed herein.
"Pledge Agreement" means the Pledge Agreement dated as of the date hereof
entered into by the Credit Parties in favor of the Collateral Agent, as
amended, modified or otherwise supplemented from time to time.
"Prime Rate" means, at any time, the rate of interest per annum publicly
announced from time to time by the Agent as its prime rate in effect at its
principal office in Charlotte, North Carolina. The parties hereto acknowledge
that the rate so announced by the Agent as its Prime Rate is an index or base
rate and shall not necessarily be the lowest or best rate charged to its
customers or other banks.
"Purchase Money Debt" means any Debt incurred by a Person for all or any
part of the deferred purchase price of property or services acquired by such
Person (including obligations in respect of Capital Leases).
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"Reportable Event" means any reportable event as defined in Section 4043
of ERISA or the regulations issued thereunder with respect to an Employee
Benefit Plan.
"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) or (ii) if the Commitments have been
terminated, the outstanding Loans and participation interests.
"Restricted Payment" means (a) any cash dividend or other cash
distribution, direct or indirect, on account of any ownership interest or
shares of any class of Capital Stock of the Borrower or any of its
Subsidiaries, as the case may be, now or hereafter outstanding, (b) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any ownership interest or shares
of any class of Capital Stock of the Borrower or any of its Subsidiaries now or
hereafter outstanding by the Borrower or any of its Subsidiaries, as the case
may be, except for any redemption, retirement, sinking funds or similar payment
payable solely in such shares of that class of stock or in any class of stock
junior to that class, (c) any cash payment made to redeem, purchase, repurchase
or retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire any ownership interest or shares of any class of
Capital Stock of the Borrower or any of its Subsidiaries now or hereafter
outstanding, or (d) any payment to any Affiliate of the Borrower except to the
extent expressly permitted in this Agreement.
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"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 to make Revolving Loans in accordance with the provisions of Section
2.1.
"Revolving Commitment Percentage" means, for any Lender, the percentage
identified as its Revolving Commitment Percentage on Schedule 1.1A, as such
percentage may be modified in connection with any assignment made in accordance
with the provisions of Section 13.8.
"Revolving Committed Amount" means the aggregate revolving credit line
extended by the Lenders to the Borrower for Revolving Loans pursuant to and in
accordance with the terms of this Credit Agreement, in an amount up to
$15,000,000, as such revolving credit line may be reduced from time to time in
accordance with Sections 2.6.
"Revolving Loans" means the revolving credit loans made by the Lender to
the Borrower pursuant to Section 2.1.
"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, individually or collectively, as appropriate, as such promissory notes may
be amended, modified, restated, supplemented, extended, renewed or replaced
from time to time.
"Security Agreement" means the Security Agreement dated as of the date
hereof entered into by the Credit Parties in favor of the Collateral Agent, as
amended, modified or otherwise supplemented from time to time.
"Solvent" means, as to the Borrower and its Subsidiaries at any date of
determination, that the Borrower and its Subsidiaries, taken as a whole, (a)
have capital sufficient to carry on their business and transactions and all
business and transactions in which they engage and are able to pay their debts
as they mature, (b) own property having a value, both at fair valuation and at
present fair saleable value, greater than the amount required to pay their
probable liabilities (including contingencies) and (c) do not have debts or
liabilities beyond their ability to pay such debts or liabilities as they
mature.
"Subsidiary" means as to any Person, any other Person of which more than
fifty percent (50%) of the outstanding capital stock or other ownership
interests having ordinary voting power to elect a majority of the board of
directors or other managers of such other Person is at the time, directly or
indirectly, owned by or the management is otherwise controlled by such first
Person (irrespective of whether, at the time, capital stock or other ownership
interests of such other Person shall have or might have voting power by reason
of the happening of any contingency).
"Sweep Plus Arrangement" means the Sweep Plus Loan/Investment Services
Description attached hereto as Schedule 1.1B or any similar arrangement between
the Borrower and the Swingline Lender by which Swingline Loans may be advanced
and deposited from time to time
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into a specified account with the Swingline Lender and which deposits may be
applied to repay the Swingline Loans outstanding hereunder.
"Swingline Commitment" means the commitment of the Swingline Lender to
make Swingline Loans in an aggregate principal amount at any time outstanding
up to the Swingline Committed Amount and the commitment of the Lenders to
purchase participation interests in the Swingline Loans up to their respective
Revolving Commitment Percentage as provided in Section 2.7(b), as such amounts
may be reduced from time to time in accordance with the provisions hereof.
"Swingline Committed Amount" means $2,000,000.
"Swingline Lender" means First Union National Bank.
"Swingline Loan" means a swingline revolving loan made by the Swingline
Lender pursuant to the provisions of Section 2.5.
"Taxes" shall have the meaning assigned thereto in Section 3.8(a).
"Termination Date" means the earliest of the dates referred to in Section
2.11.
"Unused Revolving Committed Amount" means, for any period, the amount by
which (a) the then applicable Revolving Committed Amount exceeds (b) the daily
average for such period of the outstanding aggregate principal amount of all
Revolving Loans.
"Wholly-Owned" means, with respect to a Subsidiary, a Subsidiary in which
all of the shares of Capital Stock are owned or controlled, directly or
indirectly, by the Borrower and/or one or more of its Wholly-Owned
Subsidiaries.
SECTION 1.2 ACCOUNTING TERMS AND DETERMINATIONS
Except as otherwise expressly provided herein, all accounting terms used
herein shall be interpreted, and all financial statements and certificates and
reports as to financial matters required to be delivered to the Lenders
hereunder shall be prepared, in accordance with GAAP applied on a consistent
basis. All calculations made for the purposes of determining compliance with
this Credit Agreement shall (except as otherwise expressly provided herein) be
made by application of GAAP applied on a basis consistent with the most recent
annual or quarterly financial statements delivered pursuant to Section 7.1 (or,
prior to the delivery of the first financial statements pursuant to Section
7.1, consistent with the financial statements as of September 30, 1998);
provided, however, if (a) the Borrower shall object to determining such
compliance on such basis at the time of delivery of such financial statements
due to any change in GAAP or the rules promulgated with respect thereto or (b)
the Agent or the Required Lenders shall so object in writing within 60 days
after delivery of such financial statements, then such calculations shall be
made on a basis consistent with the most recent financial statements delivered
by the Borrower to the Lenders as to which no such objection shall have been
made.
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SECTION 1.3 OTHER DEFINITIONAL TERMS.
Terms not otherwise defined herein which are defined in the Uniform
Commercial Code as in effect in the State of Florida (the "Code") shall have
the meanings given them in the Code. All capitalized terms defined in this
Credit Agreement shall have the defined meanings when used in this Credit
Agreement, the Notes and the other Credit Documents or any certificate, report
or other document made or delivered pursuant to this Credit Agreement. Unless
otherwise specified, references to any times herein shall refer to Eastern
Standard time or, if then in effect, Eastern Daylight time.
ARTICLE II
CREDIT FACILITY
SECTION 2.1 REVOLVING LOANS.
(a) Subject to the terms and conditions of this Agreement and in
reliance upon the representations and warranties set forth herein, each Lender
agrees to make Revolving Loans to the Borrower from time to time from the
Closing Date through but not including the Termination Date as requested by the
Borrower in accordance with the terms of Section 2.2; provided, that the sum of
the aggregate principal amount of all outstanding Revolving Loans (after giving
effect to any amount requested) plus the aggregate principal amount of all
outstanding Swingline Loans shall not exceed the Revolving Committed Amount then
in effect. Subject to the terms and conditions hereof, the Borrower may borrow,
repay and reborrow Revolving Loans hereunder until the Termination Date.
(b) No Lender shall be obligated at any time to make available to the
Borrower its Revolving Commitment Percentage of any requested Revolving Loan if
such amount plus its Revolving Commitment Percentage of all Revolving Loans then
outstanding would exceed such Lender's Revolving Commitment at such time. The
aggregate balance of Revolving Loans outstanding shall not at any time exceed
the Revolving Committed Amount.
SECTION 2.2 PROCEDURE FOR ADVANCES OF REVOLVING LOANS.
(a) Requests for Borrowing.
(i) Each request for borrowings hereunder shall be made by notice in
the form attached hereto as Exhibit C from the Borrower to the Agent (the
"Notice of Borrowing"), given not later than 11:00 a.m. (A) on the Business
Day on which the proposed borrowing is requested to be made for Revolving
Loans that will be Base Rate Loans and (B) three Business Days prior to the
date of the requested borrowing of Revolving Loans that will be LIBOR
Loans; provided, however, that no LIBOR Loans shall be available to the
Borrower until the third Business Day after the Closing Date. Each Notice
of Borrowing shall be given by either telecopy, telex or cable setting
forth
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(1) the requested date of such borrowing, (2) the aggregate amount of such
requested borrowing, (3) whether such Revolving Loans will be Base Rate
Loans or LIBOR Loans, and if appropriate, the applicable Interest Period
and (4) certification by the Borrower that it has complied in all respects
with Article V, all of which shall be specified in such manner as is
necessary to comply with all limitations on Revolving Loans outstanding
hereunder. Each Notice of Borrowing shall be irrevocable by and binding on
the Borrower. Each Loan shall be in a minimum principal amount of $500,000
and integral multiples of $250,000 in excess thereof (or the remaining
amount of the Revolving Committed Amount, if less); provided that no more
than 5 LIBOR Loans shall be outstanding hereunder at any one time.
Revolving Loans may be repaid and reborrowed in accordance with the
provisions hereof.
The Agent shall give to each Lender prompt notice (but in no event
later than 2:00 P.M. on the date of the Agent's receipt of notice from the
Borrower) of each Notice of Borrowing by telecopy, telex or cable (other
than any Notice of Borrowing which will be funded by the Agent in
accordance with subsection (d)(ii) below). No later than 3:00 P.M. on the
date on which a borrowing is requested to be made pursuant to the
applicable Notice of Borrowing, each Lender will make available to the
Agent at the address of the Agent set forth in Section 13.1, in
immediately available funds, its Revolving Commitment Percentage of such
borrowing requested to be made. Unless the Agent shall have been notified
by any Lender prior to the date of borrowing that such Lender does not
intend to make available to the Agent its portion of the borrowing to be
made on such date, the Agent may assume that such Lender will make such
amount available to the Agent on such date of borrowing and the Agent may,
in reliance upon such assumption, make available the amount of the
borrowing to be provided by such Lender. Upon fulfillment of the
conditions set forth in Article V for such borrowing, the Agent will make
such funds available to the Borrower at the account specified by the
Borrower in such Notice of Borrowing.
(ii) If the amounts described in subsection (a)(i) of this Section
2.2 are not in fact made available to the Agent by a Lender (such Lender
being hereinafter referred to as a "Defaulting Lender") and the Agent has
made such amount available to the Borrower, the Agent shall be entitled to
recover such corresponding amount on demand from such Defaulting Lender.
If such Defaulting Lender does not pay such corresponding amount forthwith
upon the Agent's demand therefor, the Agent shall promptly notify the
Borrower and the Borrower shall immediately (but in no event later than
five Business Days after such demand) pay such corresponding amount to the
Agent. The Agent shall also be entitled to recover from such Defaulting
Lender and the Borrower, (A) 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 rate per annum equal to either (1)
if paid by such Defaulting Lender, the overnight Federal Funds Rate or (2)
if paid by the Borrower, the then applicable rate of interest, calculated
in accordance with Section 3.1, plus (B) in each case, an amount equal to
any costs (including legal expenses) and losses incurred as a result of
the failure of such Defaulting Lender to provide such amount as provided
in this
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Credit Agreement. Nothing herein shall be deemed to relieve any Lender
from its obligation to fulfill its commitments hereunder or to prejudice
any rights which the Borrower may have against any Lender as a result of
any default by such Lender hereunder, including, without limitation, the
right of the Borrower to seek reimbursement from any Defaulting Lender for
any amounts paid by the Borrower under clause (B) above on account of such
Defaulting Lender's default.
(iii) The failure of any Lender to make the Revolving Loan to be made
by it as part of any borrowing shall not relieve any other Lender of its
obligation, if any, hereunder to make its Revolving Loan on the date of
such borrowing, but no Lender shall be responsible for the failure of any
other Lender to make the Revolving Loan to be made by such other Lender on
the date of any borrowing.
(iv) Each Lender shall be entitled to earn interest at the then
applicable rate of interest, calculated in accordance with Article III, on
outstanding Revolving Loans which it has funded to the Agent from the date
such Lender funded such Revolving Loan to, but excluding, the date on
which such Lender is repaid with respect to such Revolving Loan.
SECTION 2.3 REPAYMENT OF REVOLVING LOANS.
The Borrower shall repay the outstanding principal amount of all Revolving
Loans on the Termination Date, if not sooner repaid, together with (i) all
accrued but unpaid interest thereon to but not including the date of repayment,
and (ii) all other amounts due under the Credit Documents.
SECTION 2.4 REVOLVING NOTE.
The Revolving Loans and the obligation of the Borrower to repay such
Revolving Loans, together with interest and all other fees, charges and other
amounts due thereon or in connection therewith, shall be evidenced by the
Revolving Note which shall be substantially in the form attached as Exhibit
B-1.
SECTION 2.5 SWINGLINE LOAN SUBFACILITY.
(a) Subject to the terms and conditions of this Agreement and in
reliance upon the representations and warranties set forth herein, the
Swingline Lender agrees to make Swingline Loans to the Borrower from time to
time from the Closing Date through but not including the Termination Date as
requested by the Borrower in accordance with the terms of Section 2.6;
provided, that (i) the aggregate principal amount of all outstanding Swingline
Loans (after giving effect to any amount requested) shall not exceed the
Swingline Committed Amount and (ii) the aggregate principal amount of all
outstanding Revolving Loans plus the aggregate principal amount of all
outstanding Swingline Loans (after giving effect to any amount requested) shall
not exceed the Revolving Committed Amount then in effect. Subject to the terms
and conditions hereof, the Borrower may borrow, repay and reborrow Swingline
Loans hereunder until the Termination Date.
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(b) The Swingline Lender shall not be obligated at any time to make
available to the Borrower any Swingline Loan if the amount of such Loan plus
the outstanding amount of all Revolving Loans advanced by such Lender would
exceed such Lender's Revolving Commitment at such time. The aggregate balance
of Swingline Loans outstanding shall not at any time exceed the Swingline
Committed Amount.
SECTION 2.6 PROCEDURE FOR ADVANCES OF SWINGLINE LOANS.
(a) Except as set forth in subsection (b) below, each request for
borrowings hereunder shall be made by notice in the form attached hereto as
Exhibit C from the Borrower to the Agent (the "Notice of Borrowing"), given not
later than 11:00 a.m. on the Business Day on which the proposed borrowing is
requested to be made. Each Notice of Borrowing shall be given by either
telecopy, telex or cable setting forth (1) the requested date of such
borrowing, (2) the aggregate amount of such requested borrowing, (3) whether
such Swingline Loans will be Base Rate Loans or LIBOR Market Index Swingline
Loans and (4) certification by the Borrower that it has complied in all
respects with Article V, all of which shall be specified in such manner as is
necessary to comply with all limitations on Swingline Loans outstanding
hereunder. Each Notice of Borrowing shall be irrevocable by and binding on the
Borrower. Each Swingline Loan requested pursuant to this subsection (a) shall
be in a minimum principal amount of $50,000 and integral multiples of $50,000
in excess thereof (or the remaining amount of the Revolving Committed Amount,
if less). Swingline Loans may be repaid and reborrowed in accordance with the
provisions hereof.
(b) Borrowings of Swingline Loans hereunder may be made from time to
time into a specified demand deposit account with the Swingline Lender pursuant
to the Sweep Plus Arrangement. Each such borrowing shall be deemed a
reaffirmation by the Borrower that the representations and warranties set forth
in Article VI are true and correct in all material respects as of the date of
such borrowing. Unless otherwise specified to the Swingline Lender by the
Borrower in writing, all Swingline Loans made pursuant to this subsection (b)
shall consist of LIBOR Market Index Swingline Loans. Each Swingline Loan
requested pursuant to this subsection (b) shall be in such minimum amounts, if
any, provided in the Sweep Plus Arrangement.
SECTION 2.7 REPAYMENT OF SWINGLINE LOANS.
(a) Unless repaid sooner in accordance with the Sweep Plus
Arrangement, the principal amount of all Swingline Loans shall be due and
payable in full on the earlier of (i) the maturity date agreed to by the
Swingline Lender and the Borrower with respect to such Loan (which maturity
date shall not be a date more than 30 Business Days from the date of advance
thereof) or (ii) the Termination Date. The Borrower shall repay the outstanding
principal amount of all Swingline Loans on the Termination Date, if not sooner
repaid, together with (i) all accrued but unpaid interest thereon to but not
including the date of repayment, and (ii) all other amounts due under the
Credit Documents.
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(b) 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 amount of such Swingline Loans; provided, however, that
any such demand shall be deemed to have been given one Business Day prior to
the Termination Date and on the date of the occurrence of any Event of Default
described in Section 11.1 and upon acceleration of the indebtedness hereunder
and the exercise of remedies in accordance with the provisions of Section 11.2.
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 U.S. 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 participation interests
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 2.10),
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 interest is funded and (B) 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 Swingline Lender, to the
extent not paid to the Swingline Lender by the Borrower in accordance with the
terms of Section 3.1(d), 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 the Federal Funds Rate.
SECTION 2.8 SWINGLINE NOTE.
The Swingline Loans and the obligation of the Borrower to repay such
Swingline Loans, together with interest and all other fees, charges and other
amounts due thereon or in connection therewith, shall be evidenced by the
Swingline Note which shall be substantially in the form attached as Exhibit
B-2.
SECTION 2.9 PREPAYMENTS OF THE LOANS.
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(a) Voluntary Prepayments. The Loans may be prepaid in whole or in
part without premium or penalty, except as provided in Section 3.6. Each
prepayment of Revolving Loans shall be in a minimum principal amount of
$500,000, and in integral multiples of $250,000. Each prepayment of Swingline
Loans shall be in a minimum principal amount of $50,000, and integral multiples
of $50,000, provided that in the case of Swingline Loans made pursuant to the
Sweep Plus Arrangement, prepayments shall be in such minimum amounts, if any,
provided by the Sweep Plus Arrangement.
(b) Mandatory Prepayments.
(i) If at any time the sum of the aggregate principal
amount of outstanding Revolving Loans outstanding plus the
aggregate principal amount of outstanding Swingline Loans
outstanding shall exceed the Revolving Committed Amount, the
Borrower shall immediately prepay the outstanding principal
balance on the Revolving Loans in an amount sufficient to
eliminate such excess.
(ii) If at any time the sum of the aggregate principal
amount of outstanding Swingline Loans outstanding shall exceed
the Swingline Committed Amount, the Borrower shall immediately
prepay the outstanding principal balance on the Swingline Loans
in an amount sufficient to eliminate such excess.
(iii) Asset Dispositions. Immediately upon the occurrence
of any Asset Disposition, the Borrower shall prepay the
Revolving Loans in an aggregate amount equal to the Net Cash
Proceeds of such Asset Disposition (such prepayment to be
applied as set forth in clause (vi) below).
(iv) Debt Issuances. Immediately upon receipt by the
Borrower or any of its Subsidiaries of proceeds from any Debt
Issuance, the Borrower shall prepay the Revolving Loans in an
aggregate amount equal to 100% of the Net Cash Proceeds of such
Debt Issuance to the Lenders (such prepayment to be applied as
set forth in clause (vi) below).
(v) Issuances of Equity. Immediately upon receipt by the
Borrower or any of its Subsidiaries of proceeds from any Equity
Issuance, the Borrower shall prepay the Revolving Loans in an
aggregate amount equal to 100% of the Net Cash Proceeds of such
Equity Issuance to the Lenders (such prepayment to be applied as
set forth in clause (v) below).
(vi) Application of Mandatory Prepayments. Prepayments
with respect to Revolving Loans shall be applied first to Base
Rate Loans and then to LIBOR Loans in direct order of Interest
Period maturities. Prepayments with respect to Swingline Loans
shall be applied first to Base Rate Loans and then to Swingline
Loans bearing interest at the LIBOR Market Index Rate. All
prepayments under this Section 2.9(b) shall be subject to
Section 3.6.
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SECTION 2.10 TERMINATION AND REDUCTION OF REVOLVING COMMITMENTS.
(a) Voluntary Reductions. The Revolving Commitments may be terminated
or permanently reduced in whole or in part by the Borrower upon five (5)
Business Days' prior written notice to the Agent, provided that (i) after
giving effect to any voluntary reduction, the aggregate amount of
outstanding Revolving Loans shall not exceed the aggregate Revolving
Committed Amount, as reduced, and (ii) partial reductions shall be in a
minimum principal amount of $2,500,000, and in integral multiples thereof.
The Agent shall promptly notify each affected Lender of receipt by the
Agent of any notice from the Borrower pursuant to this Section.
(b) General. The Borrower shall pay to the Agent for the account of
the Lenders in accordance with the terms of Section 3.3(b), on the date of
each termination or reduction of the Revolving Committed Amount, the
Commitment Fee accrued through the date of such termination or reduction
on the amount of the Revolving Committed Amount so terminated or reduced.
SECTION 2.11 TERMINATION DATE.
The Revolving Commitment shall terminate on the earliest of (i) the
Maturity Date, (ii) the date of permanent reduction of the Revolving Commitment
in whole by the Borrower pursuant to Section 2.10, and (iii) the date of
termination by the Agent at the request of the Required Lenders pursuant to
Section 11.2(a) (the "Termination Date").
SECTION 2.12 USE OF PROCEEDS.
The Borrower shall use the proceeds of the Loans for working capital,
capital expenditures and for other general corporate purposes, including
acquisitions permitted hereunder.
ARTICLE III
GENERAL LOAN PROVISIONS
SECTION 3.1 INTEREST.
(a) Interest Rate Options. Subject to the provisions of this Section
3.1, at the election of the Borrower in accordance with Article II, (i) the
unpaid principal balance of any Revolving Loan shall bear interest at (A) the
Base Rate plus the Applicable Margin or (B) the Adjusted LIBOR Rate plus the
Applicable Margin and (ii) the unpaid balance of any Swingline Loan shall bear
interest at the (A) Base Rate plus the Applicable Margin or (B) the LIBOR
Market Index Rate plus the Applicable Margin. Any Revolving Loan as to which
the Borrower has not duly specified an interest rate as provided herein shall
be deemed a Base Rate Loan. Except as set forth in Section 2.6 (b), any
Swingline Loan as to which the Borrower has not duly specified an interest rate
as provided herein shall be deemed a Base Rate Loan.
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(b) Interest Periods.
(i) In connection with each LIBOR Loan, the Borrower, by giving
notice at the times described in Sections 2.2 and 3.2, shall elect an
interest period (each, an "Interest Period") to be applicable to such
Loan, which Interest Period shall be a period of one (1) month, three (3)
months or six (6) months; provided that:
(A) each Interest Period shall commence on the date of advance
of or conversion to any LIBOR Loan and, in the case of immediately
successive Interest Periods, each successive Interest Period shall
commence on the date on which the next preceding Interest Period
expires;
(B) if any Interest Period would otherwise expire on a day that
is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided, that if any Interest Period would
otherwise expire an a day that is not a Business Day but is a day of
the month after which no further Business Day occurs in such month,
such Interest Period shall expire on the next preceding Business Day;
(C) any Interest Period that begins on the last Business Day of
a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the relevant calendar
month at the end of such Interest Period; and
(D) no Interest Period shall extend beyond the Termination Date
and there shall be no more than 5 different Interest Periods in
effect at any time.
(c) Default Rate. Upon the occurrence and during the continuance of an
Event of Default, (i) the Borrower shall no longer have the option to request
LIBOR Loans, (ii) all outstanding LIBOR Loans shall bear interest at a rate per
annum two percent (2%) in excess of the rate then applicable to LIBOR Loans
until the end of the applicable Interest Period and thereafter at a rate equal
to two percent (2%) in excess of the rate then applicable to Base Rate Loans
and (iii) all outstanding Base Rate Loans and LIBOR Market Index Swingline
Loans shall bear interest at a rate per annum equal to two percent (2%) in
excess of the rate then applicable to Base Rate Loans. To the extent permitted
by law, interest shall continue to accrue on the Notes after the filing by or
against the Borrower of any petition seeking any relief in bankruptcy or under
any act or law pertaining to insolvency or debtor relief, whether state,
federal or foreign.
(d) Interest Payment and Computation. Subject to the provisions of Section
3.1(c), interest on the Revolving Loans shall be payable (i) for Base Rate
Loans, quarterly in arrears as of the end of each calendar quarter and (ii) for
LIBOR Loans, on the last day of the applicable Interest Period (and with
respect to any LIBOR Loan with an Interest Period of 6 months, on the date 3
months after the making of such LIBOR Loan and on the last day of the
applicable Interest
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Period). Subject to the provisions of Section 3.1(c), interest on the Swingline
Loans shall be payable (i) on the maturity date agreed to by the Swingline
Lender pursuant to Section 2.7(a) with respect to such Loan and (ii) with
respect to Swingline Loans made pursuant to the Sweep Plus Arrangement, in
accordance with the Sweep Plus Arrangement. The interest rates hereunder for
all Loans shall be calculated based on a 360 day year for the actual number of
days elapsed.
(e) Maximum Rate. In no contingency or event whatsoever shall the
aggregate of all amounts deemed interest hereunder or under the Notes charged
or collected pursuant to the terms of this Agreement or pursuant to the Notes
exceed the highest rate permissible under any Applicable Law which a court of
competent jurisdiction shall, in a final determination, deem applicable hereto.
In the event that such a court determines that any Lender has charged or
received interest hereunder in excess of the highest applicable rate, the rate
in effect hereunder shall automatically be reduced to the maximum rate
permitted by Applicable Law and such Lender shall, at its option, promptly
refund to the Borrower any interest received by such Lender in excess of the
maximum lawful rate or apply such excess to the principal balance of the
Obligations. It is the intent hereof that the Borrower not pay or contract to
pay, and that the Lenders not receive or contract to receive, directly or
indirectly in any manner whatsoever, interest in excess of that which may be
paid by the Borrower under Applicable Law.
SECTION 3.2 NOTICE AND MANNER OF CONVERSION OR CONTINUATION OF LOANS.
The Borrower shall have the option to (a) convert at any time all or any
portion of its outstanding Base Rate Loans (other than Swingline Loans) in a
principal amount equal to $1,000,000 or any whole multiple of $250,000 in
excess thereof into one or more LIBOR Loans (so long as there are no more than
5 LIBOR Loans outstanding at any one time), or (b) upon the expiration of any
Interest Period, (i) convert all or any part of such outstanding LIBOR Loans
into Base Rate Loans or (ii) continue such LIBOR Loans as LIBOR Loans;
provided, that no outstanding Loan may be continued as, or converted into, a
LIBOR Loan when any Event of Default has occurred and is continuing. Whenever
the Borrower desires to convert or continue Loans as provided above, the
Borrower shall give the Agent irrevocable prior written notice in the form
attached as Exhibit D (a "Notice of Conversion/Continuation") not later than
11:00 a.m. on the same Business Day as, in the case of a Loan being converted
into or continued as a Base Rate Loan, and three (3) Business Days before, in
the case of a Loan being converted into or continued as a LIBOR Loan, the day
on which a proposed conversion or continuation of such Loan is to be effective
specifying (A) the Loans to be converted or continued and the amount thereof,
(B) in the case of any LIBOR Loans to be converted or continued, the last day
of the Interest Period therefor and the Interest Period to be applicable to the
converted or continued Loans and (C) the effective date of the conversion or
continuation (which shall be a Business Day). The Agent shall give each Lender
notice as promptly as practicable of any such proposed extension or conversion
affecting any Revolving Loan.
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SECTION 3.3 FEES.
(a) The Borrower shall pay to the Agent all fees payable to the Agent on
the Closing Date and from time to time thereafter.
(b) 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 "Commitment Fee") on the Unused Revolving Committed Amount
computed at a per annum rate (based on a year of 360 days) for each day during
the applicable Commitment Fee Calculation Period (hereinafter defined) at a
rate equal to 0.25%. The Commitment 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 2.10, or the Maturity Date) for the
immediately preceding quarter (or portion thereof) (each such quarter or
portion thereof for which the Commitment Fee is payable hereunder being herein
referred to as an "Commitment Fee Calculation Period"), beginning with the
first of such dates to occur after the Closing Date. For purposes of
computation of the Commitment Fee, Swingline Loans shall not be counted toward
or considered usage under the Revolving Committed Amount.
SECTION 3.4 MANNER OF PAYMENT.
Each payment by the Borrower on account of the principal of or interest on
the Loans or of any fee, commission or other amounts payable to the Lenders
under this Agreement or the Notes shall be made not later than 2:00 P.M. on the
date specified for payment under this Agreement to the Agent at its address
referred to in Section 13.1, in Dollars, in immediately available funds and
shall be made without any set-off, counterclaim or deduction whatsoever. Any
payment received after such time but before 5:00 P.M. on such day shall be
deemed a payment on such date for the purposes of Section 11.1, but for all
other purposes shall be deemed to have been made on the next succeeding
Business Day. Any payment received after 5:00 P.M. shall be deemed to have been
made on the next succeeding Business Day for all purposes. Subject to Section
3.1(b)(i)(B), if any payment under this Agreement or any Note shall be
specified to be made upon a day which is not a Business Day, it shall be made
on the next succeeding day which is a Business Day and such extension of time
shall in such case be included in computing any interest if payable along with
such payment.
As soon as practicable after the Agent receives payment from the Borrower,
the Agent will cause to be distributed like funds relating to the payment of
principal, interest, or Fees (other than amounts payable to the Agent to
reimburse the Agent for fees and expenses payable solely to it) or expenses
payable to the Agent and the Lenders in accordance with Section 13.9, ratably
(except in the case of Swingline Loans) to the Lenders, and like funds relating
to the payment of any other amounts payable to such Lender, in each case to be
distributed and applied in accordance with the terms of Section 3.10.
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SECTION 3.5 CHANGED CIRCUMSTANCES.
(a) Circumstances Affecting LIBOR Rate or LIBOR Market Index Rate
Availability. If prior to the first day of any Interest Period, (i) the Agent
shall have determined in good faith (which determination shall be conclusive
and binding upon the Borrower absent manifest error) that, by reason of
circumstances affecting the relevant market, adequate and reasonable means do
not exist for ascertaining the LIBOR Rate for such Interest Period, (ii) the
Agent has received notice from the Required Lenders that the LIBOR Rate
determined or to be determined for such Interest Period will not adequately and
fairly reflect the cost to such Lenders of making or maintaining their LIBOR
Loans during such Interest Period, or (iii) Dollar deposits in the principal
amounts of the LIBOR Loans to which such Interest Period is to be applicable
are not generally available in the London interbank market, the Agent shall
give telecopy or telephonic notice thereof to the Borrower and the Lenders as
soon as practicable thereafter, and will also give prompt written notice to the
Borrower when such conditions no longer exist. If such notice is given (i) any
LIBOR Loans requested to be made on the first day of such Interest Period shall
be made as Base Rate Loans, (ii) any Revolving Loans that were to have been
converted on the first day of such Interest Period to or continued as LIBOR
Loans shall be converted to or continued as Base Rate Loans and (iii) each
outstanding LIBOR Loan shall be converted, on the last day of the then-current
Interest Period thereof, to Base Rate Loans. Until such notice has been
withdrawn by the Agent, no further LIBOR Loans shall be made or continued as
such, nor shall the Borrower have the right to convert Base Rate Loans to LIBOR
Loans.
Notwithstanding any other provision of this Agreement, if (i) the
Swingline Lender shall reasonably determine (which determination shall be
conclusive and binding absent manifest error) that, by reason of circumstances
affecting the relevant market, reasonable and adequate means do not exist for
ascertaining the LIBOR Market Index Rate, or (ii) the Swingline Lender shall
reasonably determine (which determination shall be conclusive and binding
absent manifest error) that the LIBOR Market Index Rate does not adequately and
fairly reflect the cost of funding LIBOR Market Index Swingline Loans, the
Swingline Lender shall forthwith give telephone notice of such determination,
confirmed in writing, to the Borrower, and thereafter the right to request
LIBOR Market Index Swingline Loans shall be suspended until such time as the
conditions giving rise to such notice shall no longer exist. In the event LIBOR
Market Index Swingline Loans are not available on account of operation of this
Section, the Swingline Lender will endeavor to provide an alternative index or
reference rate which will provide a similar interest rate based on historical
data.
(b) Laws Affecting LIBOR Rate Availability. Notwithstanding any other
provision herein, if the adoption of or any change in any law, treaty, rule or
regulation or final, non-appealable determination of an arbitrator or a court
or other governmental authority or in the interpretation or application thereof
occurring after the Closing Date shall make it unlawful for any Lender to make
or maintain LIBOR Loans as contemplated by this Credit Agreement, (i) 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), (ii) the commitment of such Lender hereunder to make LIBOR
Loans, continue LIBOR Loans as such and convert a Base Rate Loan to LIBOR Loans
shall forthwith be canceled and, until such time
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as it shall no longer be unlawful for such Lender to make or maintain LIBOR
Loans, such Lender shall then have a commitment only to make a Base Rate Loan
when a LIBOR Loan is requested and (iii) such Lender's Revolving Loans then
outstanding as LIBOR 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 Revolving Loans or within such earlier period as required
by law. If any such conversion of a LIBOR 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 3.5(c).
(c) Increased Costs. If, after the date hereof, the introduction of, or
any change in, any Applicable Law, or in the interpretation or administration
thereof by any Governmental Authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance by the
Lender with any request or directive (whether or not having the force of law)
of such Governmental Authority, central bank or comparable agency:
(i) shall subject any Lender to any tax, duty or other charge with
respect to the Notes or shall change the basis of taxation of payments to
such Lender of the principal of or interest on the Notes or any other
amounts due under this Agreement in respect thereof (except for changes in
the rate of tax on the net income of such Lender imposed by the
jurisdiction in which such Lender is organized or is or should be
qualified to do business or the Lender's office is located); or
(ii) shall impose, modify or deem applicable any reserve (including,
without limitation, any imposed by the Board of Governors of the Federal
Reserve System but excluding any reserve included in the Adjusted LIBOR
Rate Reserve Percentage), special deposit, insurance or capital or similar
requirement against assets of, deposits with or for the account of, or
credit extended by any Lender or shall impose on any Lender or the foreign
exchange and interbank markets any other condition affecting the Notes;
and the result of any of the foregoing is to increase the costs to any Lender
of maintaining any LIBOR Loan or to reduce the yield or amount of any sum
received or receivable by such Lender under this Agreement or under the Notes
in respect of a LIBOR Loan then such Lender shall promptly notify the Borrower
of such fact and demand compensation therefor and, within fifteen (15) days
after such notice by such Lender, the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender for such increased
cost or reduction. Such Lender will promptly notify the Borrower of any event
of which it has knowledge which will entitle it to compensation pursuant to
this Section 3.5(c); provided, that such Lender shall incur no liability
whatsoever to the Borrower in the event it fails to do so. A certificate of the
Lender setting forth the basis for determining such amount or amounts necessary
to compensate the Lender shall be forwarded to the Borrower and shall be
conclusively presumed to be correct absent manifest error.
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SECTION 3.6 INDEMNITY.
The Borrower hereby indemnifies the Lenders against any loss or expense
which may result directly and primarily from any Lender's obtaining,
liquidating or employing deposits or other funds acquired to effect, fund or
maintain any Loan (a) as a consequence of any failure by the Borrower to make
any payment when due in connection with a LIBOR Loan, (b) due to any failure of
the Borrower to borrow on a date specified therefor in a Notice of Borrowing,
Notice of Conversion/Continuation or (c) due to any payment, prepayment or
conversion of any LIBOR Loan on a date other than the last day of the Interest
Period therefor. A certificate of such Lender setting forth the basis for
determining such amount or amounts necessary to compensate the Lender shall be
forwarded to the Borrower and shall be conclusively presumed to be correct
absent manifest error.
SECTION 3.7 CAPITAL REQUIREMENT.
If either (a) the introduction of, or any change in, or in the
interpretation of, any Applicable Law or (b) compliance with any guideline or
request from any central bank or comparable agency or other Governmental
Authority (whether or not having the force of law), has or would have the
effect of reducing the rate of return on the capital of, or has affected or
would affect the amount of capital required to be maintained by, any Lender or
any corporation controlling any Lender as a consequence of, or with reference
to the Revolving Commitment of any Lender and other commitments of this type,
below the rate which such Lender or such other corporation could have achieved
but for such introduction, change or compliance, then within five (5) Business
Days after written demand by such Lender, the Borrower shall pay to such Lender
from time to time as specified by such Lender additional amounts sufficient to
compensate such Lender or other corporation for such reduction. A certificate
as to such amounts submitted to the Borrower by such Lender shall be
conclusively presumed to be correct, absent manifest error.
SECTION 3.8 TAXES.
(a) Payments Free and Clear. Any and all payments by the Borrower
hereunder or under the Notes to or for the benefit of any Lender shall be made
free and clear of and without deduction for any and all present or future
taxes, levies, imposts, deductions, charges or withholding, and all liabilities
with respect thereto, excluding, in the case of each such Lender and the Agent,
income and franchise taxes imposed by the jurisdiction under the laws of which
such Lender or the Agent is organized or is or should be qualified to do
business or any political subdivision thereof (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If the Borrower shall be required by law
to deduct any Taxes from or in respect of any sum payable hereunder or under
the Notes to or for the benefit of any Lender or the Agent, (i) the sum payable
shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 3.8) such Lender or the Agent, as the case may be, receives an
amount equal to the amount it would have received had no such deductions been
made, (ii) the Borrower shall make such deductions, (iii) the Borrower shall
pay
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the full amount deducted to the relevant taxing authority or other authority
in accordance with applicable law and (iv) the Borrower shall deliver to such
Lender or the Agent, as the case may be, evidence of such payment to te
relevant taxing authority or other authority in the manner provided in Section
3.8(e); provided, however, that the Borrower shall be under no obligation to
increase the sum payable to any Lender not organized under the laws of the
United States or a state thereof (a "Foreign Lender") by an amount equal to the
amount of the United States tax required to be withheld under United States law
from the sums paid to such Foreign Lender, if such withholding is caused by the
failure of such Foreign Lender to be engaged in the active conduct of a trade
or business in the United States or all amounts of interest and fees to be paid
to such Foreign Lender hereunder are not effectively connected with such trade
or business within the meaning of United States Treasury Regulation
1.1441-4(a).
(b) Each Foreign Lender agrees that it will deliver to the Borrower and
the Agent (i) two duly completed copies of United States Internal Revenue
Service Form 1001 or 4224 or successor applicable form(s), as the case may be,
and (ii) an Internal Revenue Service Form W-8 or W-9 or successor applicable
form(s). Each such Lender also agrees to deliver to the Borrower and the Agent
two further copies of the said Form 1001 or 4224 and Form W-8 or W-9, or
successor applicable forms or other manner of certification, as the case may
be, on or before the date that any such form expires or becomes obsolete or
after the occurrence of any event requiring a change in the most recent form
previously delivered by it to the Borrower, and such extensions or renewals
thereof as may reasonably be requested by the Borrower or the Agent, unless in
any such case an event (including, without limitation, any change in treaty,
law or regulation) has occurred prior to the date on which any such delivery
would otherwise be required which renders all such forms inapplicable or which
would prevent such Lender from duly completing and delivering any such form
with respect to it and such Lender so advises the Borrower and the Agent. Such
Lender shall certify (A) in the case of a Form 1001 or 4224, that it is
entitled to receive payments under this Credit Agreement without deduction or
withholding of any United States federal income taxes and (B) in the case of a
Form W-8 or W-9, that it is entitled to an exemption from United States backup
withholding tax.
(c) Stamp and Other Taxes. In addition, the Borrower shall pay any present
or future stamp, registration, recordation or documentary taxes or any other
similar fees or charges or excise or property taxes, levies of the United
States or any state or political subdivision thereof or any applicable foreign
jurisdiction which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to this Agreement, the
Loans, the other Credit Documents, or the perfection of any rights or security
interest in respect thereto (hereinafter referred to as "Other Taxes").
(d) Indemnity. The Borrower shall indemnify each Lender and the Agent for
the full amount of Taxes and Other Taxes (including, without limitation, any
Taxes and Other Taxes imposed by any jurisdiction on amounts payable under this
Section 3.8) paid by such Lender or the Agent and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted.
Such indemnification shall be made within thirty (30) days from the date such
Lender or the Agent makes written demand therefor.
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(e) Evidence of Payment. Within thirty (30) days after the date of any
payment of Taxes or Other Taxes paid on behalf of the Agent or any Lender, the
Borrower shall furnish to the Agent or any such Lender, at its address referred
to in Section 13.1, the original or a certified copy of a receipt evidencing
payment thereof or other evidence of payment satisfactory to the Agent or any
such Lender.
(f) Survival. Without prejudice to the survival of any other agreement of
the Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section 3.8 shall survive the payment in full of the
Obligations and the termination of this Agreement.
SECTION 3.9 SHARING OF PAYMENTS.
If any Lender shall obtain any payment (whether voluntary, involuntary,
through the exercise of any right of set-off or otherwise) on account of the
Revolving Loans made by it in excess of its pro rata share of such payment as
provided for in this Credit Agreement, such Lender shall forthwith purchase
from the other Lenders such participations in the Revolving Loans made by them
as shall be necessary to cause such purchasing Lender to share such excess
payment with all Lenders in accordance with their respective ratable shares as
provided for in this Credit Agreement; provided, however, that if all or any
portion of such excess is thereafter recovered from such purchasing Lender,
such purchase from each Lender shall be rescinded and each such Lender shall
repay to the purchasing Lender the purchase price to the extent of such
recovery together with an amount equal to such Lender's ratable share
(according to the proportion of (i) the amount of such Lender's required
repayment to (ii) the total amount so recovered from the purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in
respect to the total amount so recovered. The Borrower agrees that any Lender
so purchasing a participation from another Lender pursuant to this Section 3.9
may, to the fullest extent permitted by law, exercise all of its rights of
payment (including the right of set-off) with respect to such participation as
fully as if such Lender were the direct creditor of the Borrower in the amount
of such participation.
SECTION 3.10 PRO RATA TREATMENT.
Each Revolving Loan, each payment or prepayment of principal of any
Revolving Loan, each payment of interest on the Revolving Loans, each payment
of the Commitment Fee, each reduction of the Revolving Commitment and each
conversion or extension of any Revolving Loan, shall be allocated pro rata
among the Lenders in accordance with the respective principal amounts of their
outstanding Revolving Loans; provided, however, that the foregoing fees payable
hereunder to the Lenders shall be allocated to each Lender based on such
Lender's Revolving Commitment Percentage.
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ARTICLE IV
[RESERVED]
ARTICLE V
CLOSING: CONDITIONS OF CLOSING AND BORROWING
SECTION 5.1 CONDITIONS TO CLOSING AND INITIAL LOANS.
The obligation of the Lenders to make any Revolving Loan hereunder is
subject to the satisfaction of, or waiver of, prior to or concurrently with the
making of such Revolving Loan, the following conditions precedent:
(a) Executed Credit Documents.
Each Credit Document shall have been duly authorized and executed by the
parties thereto, shall be in full force and effect and the Credit Parties shall
have delivered or caused to be delivered original counterparts thereof to the
Agent.
(b) Closing Certificates: etc.,
(i) Officer's Certificate of the Borrower. The Agent shall have
received a certificate from an officer of the Borrower, in form and
substance satisfactory to the Lenders, to the effect that (A) to the best
of his knowledge, all representations and warranties of the Credit Parties
contained in this Agreement and the other Credit Documents are true,
correct and complete; (B) the Credit Parties are not in violation of any
of the covenants contained in this Agreement and the other Credit
Documents; (C) after giving effect to the transactions contemplated by
this Agreement, no Default or Event of Default has occurred and is
continuing; and (D) that the Credit Parties have satisfied each of the
closing conditions described herein.
(ii) Certificates of Secretary or Assistant Secretary of the Credit
Parties. The Agent shall have received a certificate of the secretary or
an assistant secretary of each Credit Party certifying (A) that attached
thereto is a true and complete copy of the charter documents of such
Credit Party and all amendments thereto, certified as of a recent date by
the appropriate Governmental Authority in its jurisdiction of formation;
(B) that attached thereto is a true and complete copy of the bylaws of
such Credit Party, as in effect on the date of such certification; (C)
that attached thereto is a true and complete copy of resolutions duly
adopted by the Board of Directors of such Credit Party authorizing the
execution, delivery and performance of this Agreement and the other Credit
Documents to which it is a party and (D) as to the incumbency and
genuineness of the signature of each officer of such Credit Party
executing the Credit Documents and related documents and certificates to
which it is a party.
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(iii) Certificates of Good Standing and Tax Clearance. The Agent
shall have received certificates as of a recent date of the good standing
of each Credit Party under the laws of its respective jurisdiction of
organization and, to the extent customarily provided by such taxing
authorities and to the extent reasonably available, a certificate of the
relevant taxing authority of its jurisdiction of organization certifying
that such Credit Party has filed required tax returns and owes no
delinquent taxes.
(iv) Opinions of Counsel. The Agent shall have received favorable
opinions of counsel to the Credit Parties addressed to the Lenders, the
Credit Documents and related documents and certificates to which such
Person is a party, the security interests created thereby and such other
matters as the Agent and its counsel shall request.
(c) Consents; No Adverse Claim.
(i) Governmental and Third Party Approvals. All necessary approvals,
authorizations and consents, if required, of any Person and of all
Governmental Authorities and courts having jurisdiction with respect to
the transactions contemplated by this Agreement and the other Credit
Documents shall have been obtained.
(ii) No Injunction, Etc. No action, proceeding, investigation,
regulation or legislation shall have been instituted, threatened or
proposed before any Governmental Authority to enjoin, restrain or
prohibit, or to obtain substantial damages in respect of, or which is
related to or arises out of, this Agreement or the other Credit Documents
or the consummation of the transactions contemplated hereby or thereby, or
which, in the Lenders' reasonable discretion, would make it inadvisable to
consummate the transactions contemplated by this Agreement and the other
Credit Documents.
(iii) No Material Adverse Change. Since December 31, 1997, there
shall not have occurred any material adverse change in the business
condition (financial or otherwise), operations, properties or prospects of
the Borrower and its Subsidiaries or any event, condition or state of
facts that will or could be reasonably expected to have a Material Adverse
Effect.
(iv) No Event of Default. No Default or Event of Default shall have
occurred and be continuing.
(d) Financial Matters.
(i) Financial Statements. The Lenders shall have received the most
recent annual audited and interim unaudited Consolidated financial
statements of the Borrower, and its Subsidiaries or, in the event no such
financial statements are available, such other financial information as
shall be acceptable to the Lenders in their sole discretion.
(ii) Financial Projections. The Lenders shall have received an
opening pro forma balance sheet of the Borrower and its Subsidiaries as of
a recent date giving effect
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to the transactions contemplated herein and demonstrating compliance with
the financial covenants contained herein, together with projected annual
financial statements of the Borrower and its Subsidiaries through December
31, 2001, each in form and substance satisfactory to the Agent.
(iii) Opening Officer's Compliance Certificate. The Lenders shall
have received an Officer's Compliance Certificate demonstrating that the
Borrower and its Subsidiaries are in compliance with the financial
covenants set forth in Article IX as of the Closing Date.
(iv) Payment at Closing. There shall have been paid by the Borrower
to the Agent, the fees, set forth or referenced in Section 3.3 (to the
extent required to be paid on or prior to the Closing Date) and any other
accrued and unpaid fees due hereunder (including, without limitation,
legal fees and expenses).
(e) Collateral Matters. 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 Collateral 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 Collateral 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 Collateral
Agent's security interest in the Collateral;
(iv) all instruments and chattel paper in the possession of the
Credit Parties, together with allonges or assignments as may be necessary
or appropriate to perfect the Collateral Agent's security interest in the
Collateral to the extent required under the Security Agreement and/or the
Pledge Agreement;
(v) duly executed consents as are necessary, in the Agent's sole
discretion, to perfect the Collateral Agent's security interest in the
Collateral; and
(vi) satisfactory evidence that (A) the Collateral Agent, on behalf
of the Lenders, holds a perfected Lien on all Collateral and (B) none of
the Collateral is subject to any other Liens other than Permitted Liens.
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(f) Miscellaneous.
(i) Termination of Existing Debt. Each of the Borrower and its
Subsidiaries shall have paid and satisfied all of its obligations with
respect to the Existing Debt. Evidence of the satisfaction of all such
credit facilities and the documents related thereto shall have been
received and approved by the Agent.
(ii) Evidence of Insurance. The Agent shall have received copies of
insurance policies or certificates of insurance of the Credit Parties
evidencing liability and casualty insurance meeting the requirements set
forth herein and in the other Credit Documents, including, but not limited
to, naming the Agent as sole loss payee and additional insured.
(iii) Corporate Structure. The corporate capital and ownership
structure of the Borrower and its Subsidiaries shall be as described in
Schedule 5.1.
(iv) Other. The Agent shall have received all other documents and
information in connection with the transactions contemplated by this
Agreement as it may reasonably request.
SECTION 5.2 CONDITIONS TO ALL LOANS.
The obligation of the Lenders to make any Loan is subject to the
satisfaction of the following conditions precedent on the relevant borrowing
date:
(a) Continuation of Representations and Warranties. The representations
and warranties contained in Article VI shall be true and correct in all
material respects on and as of such borrowing date with the same effect as if
made on and as of such date (except to the extent such representations and
warranties are expressly made as of a specified date, in which event such
representations and warranties shall be true and correct in all material
respects as of such specified date).
(b) No Existing Default. No Default or Event of Default shall have
occurred and be continuing hereunder on the borrowing date with respect to such
Loan or after giving effect to the Loans to be made on such date.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE BORROWER
SECTION 6.1 REPRESENTATIONS AND WARRANTIES.
In order to induce the Lenders to enter into this Credit Agreement and to
make available the credit facilities contemplated hereby, each Credit Party
hereby represents and warrants to the Lenders as of the date hereof, the
Closing Date and on the date of each extension of credit hereunder, as follows:
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(a) Organization; Power; Qualification. Each Credit Party is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation, has the power and authority to
own its properties and to carry on its business as now being and hereafter
proposed to be conducted and is duly qualified and authorized to do business in
each jurisdiction in which the character of its properties or the nature of its
business requires such qualification and authorization, except where the
failure to be so qualified and authorized could not reasonably be expected to
have a Material Adverse Effect.
(b) Subsidiaries and Capitalization. As of the date hereof the corporate
ownership and capital structure of the Borrower and its Subsidiaries is as set
forth on Schedule 5.1.
(c) Authorization of Agreement, Credit Documents and Borrowing. Each
Credit Party has the corporate right, power and authority and has taken all
necessary corporate and other action to authorize the execution, delivery and
performance of this Agreement and each of the other Credit Documents to which
it is a party in accordance with their respective terms. This Agreement and
each of the other Credit Documents have been duly executed and delivered by the
duly authorized officers of the Credit Parties, and each such document
constitutes the legal, valid and binding obligation of the Credit Parties party
thereto, enforceable in accordance with its terms, except as such enforcement
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
state or federal debtor relief laws from time to time in effect which affect
the enforcement of creditors' rights in general and the availability of
equitable remedies.
(d) Compliance of Agreement, Credit Documents and Borrowing with Laws,
Etc. The execution, delivery and performance by each Credit Party of the Credit
Documents to which it is a party, in accordance with their respective terms,
the borrowings hereunder and the transactions contemplated hereby do not and
will not, by the passage of time, the giving of notice or otherwise, (i)
require any Governmental Approval or violate any Applicable Law relating to
such Credit Party, (ii) conflict with, result in a breach of or constitute a
default under the certificate of formation or other organizational documents of
such Credit Party or any material indenture, agreement or other instrument to
which such Person is a party or by which any of its properties may be bound or
any Governmental Approval relating to such Credit Party or (iii) result in or
require the creation or imposition of any Lien upon or with respect to any
property now owned or hereafter acquired by such Credit Party other than Liens
arising under the Credit Documents.
(e) Compliance with Law; Governmental Approvals. Each of the Borrower and
its Subsidiaries (i) has all Governmental Approvals required by any Applicable
Law for it to conduct its business, each of which is in full force and effect,
is final and not subject to review on appeal and is not the subject of any
pending or, to the best of its knowledge, threatened attack by direct or
collateral proceeding and (ii) is in compliance with each Governmental Approval
applicable to it and all other Applicable Laws relating to it or any of its
respective properties, except in each case under clause (i) and (ii) above to
the extent that (A) such requirement or compliance is contested in good faith
by appropriate proceedings or (B) the failure to do so could not reasonably be
expected to have a Material Adverse Effect.
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(f) Tax Returns and Payments. Each of the Borrower and its Subsidiaries
has duly filed or caused to be filed all federal, state, local and other tax
returns required by Applicable Law to be filed, and has paid, or made adequate
provision for the payment of, all federal, state, local and other taxes,
assessments and governmental charges or levies upon it and its property,
income, profits and assets which are due and payable, except for any such taxes
or charges being contested in good faith by appropriate proceedings. No
Governmental Authority has asserted any Lien or other claim against the
Borrower or any Subsidiary thereof with respect to unpaid taxes which has not
been discharged or resolved. The charges, accruals and reserves on the books of
the Borrower or any of its Subsidiaries in respect of federal, state, local and
other taxes are in the judgment of the Credit Parties adequate, and the Credit
Parties do not anticipate any material additional taxes or assessments for any
year or portion thereof.
(g) Intellectual Property Matters. Each of the Borrower and its
Subsidiaries owns or possesses all lawful rights to use all franchises,
licenses, patents, patent rights or licenses, patent applications, copyrights,
copyright applications, trademarks, trademark rights, trade names, trade name
rights and rights with respect to the foregoing which are necessary in any
material respect to conduct its business. To the knowledge of the Credit
Parties, no event has occurred which permits, or after notice or lapse of time
or both would permit, the revocation or termination of any such rights, and
neither the Borrower nor any Subsidiary thereof is liable to any Person for
infringement under Applicable Law with respect to any such rights as a result
of its business operations.
(h) Environmental Matters.
(i) To the best knowledge of the Credit Parties, the properties of
the Borrower and its Subsidiaries do not contain any Hazardous Materials
in amounts or concentrations which (A) constitute a material violation of
any Environmental Law, or (B) could give rise to material liability under,
applicable Environmental Laws or (C) could trigger investigation, removal,
remediation or other response activities under any Environmental Laws;
(ii) To the best knowledge of the Credit Parties, the properties of
the Borrower and its Subsidiaries, and all operations conducted in
connection therewith, are in compliance with all applicable Environmental
Laws in all material respects and there are no Hazardous Materials at or
under the properties of the Borrower and its Subsidiaries, or such
operations thereon in violation of applicable Environmental Laws or which
could materially interfere with the continued operation of such properties
or which damage or could damage natural resources on such properties in
material violation of any applicable Environmental Laws or materially
impair the fair saleable value thereof;
(iii) Neither the Borrower nor any Subsidiary has received any notice
of material violation, alleged material violation, noncompliance,
liability or potential liability regarding environmental matters or
compliance with Environmental Laws which remain unresolved with regard to
any of their properties or the operations conducted in
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connection therewith, nor does any Credit Party have knowledge or reason
to believe that any other such notice will be received or is being
threatened;
(iv) To the best knowledge of the Credit Parties, Hazardous Materials
have not been transported or disposed of from the properties of the
Borrower and its Subsidiaries in material violation of, or in a manner or
to a location which could give rise to material liability of the Borrower
or any of its Subsidiaries under, Environmental Laws, nor have any
Hazardous Materials been generated, treated, stored or disposed of at, on
or under any of such properties in material violation of, or in a manner
that could give rise to material liability of the Borrower or any of its
Subsidiaries under, any applicable Environmental Laws;
(v) No judicial proceedings or governmental or administrative action
is pending, or to the best knowledge of the Credit Parties, threatened,
under any Environmental Law to which the Borrower or any Subsidiary
thereof is or will be named as a party with respect to such properties or
operations conducted in connection therewith, nor are there any consent
decrees or other decrees, consent orders, administrative orders or other
orders, or other administrative or judicial requirements outstanding under
any Environmental Law with respect to such properties or such operations;
and
(vi) To the best knowledge of the Credit Parties, there has been no
release or threat of release of Hazardous Materials at or from such
properties, in violation of or in amounts or in a manner that could give
rise to material liability of the Borrower or any of its Subsidiaries
under Environmental Laws.
(i) ERISA. The Borrower and each ERISA Affiliate are in material
compliance with all applicable provisions of ERISA and the regulations and
published interpretations thereunder with respect to all Employee Benefit Plans
except for any required amendments for which the remedial amendment period as
defined in Section 401(b) of the Code has not yet expired. Each Employee
Benefit Plan that is intended to be qualified under Section 401(a) of the Code
has been determined by the Internal Revenue Service to be so qualified, and
each trust related to such plan has been determined to be exempt under Section
501(a) of the Code. No Reportable Event has occurred as to which the Borrower
or any ERISA Affiliate was required to file a report with the PBGC and no
liability (including without limitation any withdrawal liability under Section
4201 of ERISA) has been incurred by the Borrower or any ERISA Affiliate which
remains unsatisfied for any taxes or penalties with respect to any Employee
Benefit Plan or any Multiemployer Plan.
(j) Margin Stock. Neither the Borrower nor any Subsidiary thereof is
engaged principally or as one of its activities in the business of extending
credit for the purpose of "purchasing" or "carrying" any "margin stock" (as
each such term is defined or used in Regulation U of the Board of Governors of
the Federal Reserve System). No part of the proceeds of any of the Loans will
be used for purchasing or carrying margin stock or for any purpose which
violates, or which would be inconsistent with, the provisions of Regulation T,
U or X of such Board of Governors.
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(k) Government Regulation. Neither the Borrower nor any Subsidiary thereof
is an "investment company" or a company "controlled" by an "investment company"
(as each such term is defined or used in the Investment Company Act of 1940, as
amended) and neither the Borrower nor any Subsidiary thereof is, or after
giving effect to any Loan, will be, subject to regulation under the Public
Utility Holding Company Act of 1935 or the Interstate Commerce Act, each as
amended, or any other Applicable Law which limits its ability to incur or
consummate the transactions contemplated hereby.
(l) Employee Relations. Each of the Borrower and its Subsidiaries has a
stable work force in place and is not party to any collective bargaining
agreement nor has any labor union been recognized as the representative of its
employees. No Credit Party knows of any pending, threatened or contemplated
strikes, work stoppage or other collective labor disputes involving its
employees or those of its Subsidiaries.
(m) Financial Statements. The audited Consolidated balance sheet of the
Borrower and its Subsidiaries as of December 31, 1997, and the related
statements of income and retained earnings and cash flows for the Fiscal Year
then ended and unaudited Consolidated balance sheet of the Borrower and its
Subsidiaries as of September 30, 1998, and related unaudited interim statements
of income and retained earnings and cash flows for the fiscal period then
ended, copies of which have been furnished to the Lenders, fairly present in
all material respects the assets, liabilities and financial position of the
Borrower and its Subsidiaries as at such dates, and the results of the
operations and changes of financial position for the periods then ended. All
such financial statements, including the related schedules and notes thereto,
have been prepared in accordance with GAAP except as may be otherwise disclosed
therein or in the notes thereto (subject in the case of the interim statements
to year-end audit adjustments). As of the date hereof (after giving effect to
the repayment of the Existing Debt), except for Debt owed to Lenders, the
Borrower and its Subsidiaries have no Debt, obligation or other unusual forward
or long-term commitment which is not fairly reflected in the foregoing
financial statements or in the notes thereto.
(n) Solvency. As of the Closing Date and after giving effect to each Loan
made hereunder, the Borrower and its Subsidiaries, taken as a whole, will be
Solvent.
(o) Titles to Properties. Each of the Borrower and its Subsidiaries has
such title to the real property owned by it (or a lease of real property) as is
necessary to the conduct of its business and valid and legal title to all of
its personal property and assets reflected on the balance sheets of the
Borrower and its Subsidiaries described in Section 6.1(m) or in any financial
statements hereafter delivered pursuant to Section 7.1, except such assets
which have been disposed of by the Borrower or its Subsidiaries subsequent to
such date in the ordinary course of business or as otherwise expressly
permitted hereunder.
(p) Debt and Liens. Schedule 6.1(p) is a complete and correct list, as of
the date hereof, of each item of Debt of the Borrower and its Subsidiaries in
excess of $100,000 and each Lien securing such Debt, each of which is permitted
under the terms of Sections 10.1 and 10.2,
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respectively. The Borrower and its Subsidiaries have performed and are in
compliance with all of the terms of such Debt and Liens and all instruments and
agreements relating thereto, and no default or event of default, or event or
condition which with notice or lapse of time or both would constitute such a
default or event of default on the part of the Borrower or its Subsidiaries
exists with respect to any such Debt or Liens. None of the properties and
assets of the Borrower or any Subsidiary thereof is subject to any Lien, except
for Permitted Liens. 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 (other than Permitted Liens). Each Credit Party is or will be at the
time additional Collateral is acquired by it, the absolute owner 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. The Credit Parties will at their expense forever warrant and,
at the Agent's request, defend the Collateral from any and all 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).
(q) Litigation. There are no actions, suits or proceedings pending nor, to
the best knowledge of the Credit Parties, threatened against or in any other
way relating adversely to or affecting the Borrower or any Subsidiary thereof
or any of their respective properties in any court or before any arbitrator of
any kind or before or by any Governmental Authority, that, if adversely
determined, might reasonably be expected to have a Material Adverse Effect.
(r) Absence of Defaults. No event has occurred or is continuing which
constitutes a Default or an Event of Default, or which constitutes, or which
with the passage of time or giving of notice or both would constitute, a
default or event of default by the Borrower or any Subsidiary thereof under any
judgment, decree or order by which the Borrower or its Subsidiaries or any of
their respective properties may be bound or which would require the Borrower or
its Subsidiaries to make any payment thereunder prior to the scheduled maturity
date therefor.
(s) Accuracy and Completeness of Information. All written information,
reports and other papers and data produced by or on behalf of the Credit
Parties and furnished to the Lenders were, at the time the same were so
furnished and taken as a whole, true and correct in all material respects to
the extent necessary to give the recipient a true and accurate knowledge of the
subject matter. The documents and other written information furnished or
written statements made to the Lenders by the Credit Parties in connection with
the negotiation, preparation or execution of this Agreement or any of the
Credit Documents, taken as a whole, do not contain any untrue statement of a
material fact or omit to state a fact necessary in order to make the statements
contained therein not materially misleading. The Credit Parties are not aware
of any facts which it has not disclosed in writing to the Lenders which have a
Material Adverse Effect, or insofar as the Credit Parties can now foresee,
could reasonably be expected to have a Material Adverse Effect.
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(t) Burdensome Provisions. Neither the Borrower nor any of its
Subsidiaries is a party to any indenture, agreement, lease or other instrument,
or subject to any corporate or partnership restriction, Governmental Approval
or Applicable Law which is so unusual or burdensome as in the foreseeable
future could be reasonably expected to have a Material Adverse Effect. The
Credit Parties do not presently anticipate that future expenditures needed to
meet the provisions of any statutes, orders, rules or regulations of a
Governmental Authority will be so burdensome as to have a Material Adverse
Effect.
(u) Insurance. The properties of the Borrower and its Subsidiaries are
insured with financially sound and reputable insurance companies in such
amounts, with such deductibles and covering such risks as are customarily
carried by companies engaged in similar businesses and owning similar
properties in localities where the Borrower and its Subsidiaries operate.
(v) No Material Adverse Change. Since December 31, 1997, there has been no
material adverse change in the business, condition (financial or otherwise),
operations or properties of the Borrower and its Subsidiaries, taken as a
whole, or any event, condition or state of facts that will or could be
reasonably expected to have a Material Adverse Effect.
(w) Locations of Offices, Records and Inventory. Each Credit Party's
principal place of business and chief executive office are set forth in
Schedule 6.1(w) hereto, and the books and records of such Credit Party and all
chattel paper and all records of accounts are located at the principal place of
business and chief executive office of such Credit Party. There is no
jurisdiction in which any Credit Party maintains any Collateral other than
those jurisdictions listed on Schedule 6.1(w). Set forth in Schedule 6.1(w) is
a true, correct and complete list of (i) the address of the chief executive
offices of the Credit Parties and (ii) the address of all offices where records
and books of account of the Credit Parties are kept.
(x) Fictitious Business Names. No Credit Party has used any corporate or
fictitious name during the five (5) years preceding the date hereof, other than
the corporate name shown on its or such Credit Party's Articles or Certificate
of Incorporation or other organizational document and as set forth on Schedule
6.1(x).
(y) Material Contracts. None of the Material Contracts contains provisions
which could have a Material Adverse Effect. All of the Material Contracts are
in full force and effect, and no material defaults currently exist thereunder.
(z) Year 2000 Issue. Any reprogramming and related testing required to
permit the proper functioning of the Credit Parties' computer systems and other
equipment containing embedded microchips in and following the year 2000 will be
completed in all material respects prior to September 1, 1999 (that is, the
Credit Parties will be "Year 2000 Compliant"), and the cost to the Credit
Parties of such reprogramming and testing will not result in a Default or Event
of Default or a Material Adverse Effect. Except for this reprogramming
referenced to in the preceding sentence as may be necessary, the computer and
management information systems and other equipment containing embedded
microchips of the Credit Parties and their Subsidiaries are
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and, with ordinary course upgrading and maintenance, will continue for the term
of this Agreement to be, adequate for the conduct of its business.
SECTION 6.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC.
All representations and warranties set forth in this Article VI and all
representations and warranties contained in any certificate, or any of the
Credit Documents (including but not limited to any such representation or
warranty made in or in connection with any amendment thereto) shall constitute
representations and warranties made under this Agreement. All representations
and warranties made under this Agreement shall be made or deemed to be made at
and as of the Closing Date, shall survive the Closing Date and shall not be
waived by the execution and delivery of this Agreement, any investigation made
by or on behalf of the Lenders or any borrowing hereunder.
ARTICLE VII
FINANCIAL INFORMATION AND NOTICES
Until payment in full by the Borrower of all principal of and interest on
the Loans and all other amounts due hereunder and under the other Credit
Documents at the time of such payment, and the termination of the Revolving
Commitment, the Credit Parties will furnish or cause to be furnished to the
Agent and the Lenders:
SECTION 7.1 FINANCIAL STATEMENTS AND PROJECTIONS.
(a) Annual Financial Statements. As soon as practicable and in any event
within ninety (90) days after the end of each Fiscal Year, an audited
Consolidated balance sheet of the Borrower and its Subsidiaries as of the close
of such Fiscal Year and audited Consolidated statements of income, retained
earnings and cash flows for the Fiscal Year then ended, including the notes
thereto, all in reasonable detail setting forth in comparative form the
corresponding figures for the preceding Fiscal Year and prepared by an
independent certified public accounting firm reasonably acceptable to the Agent
in accordance with GAAP and, if applicable, containing disclosure of the effect
on the financial position or results of operations of any change in the
application of accounting principles and practices during the year, and
accompanied by a report thereon by such certified public accountants that is
not qualified with respect to scope limitations imposed by the Borrower or any
of its Subsidiaries or with respect to accounting principles followed by the
Borrower or any of its Subsidiaries not in accordance with GAAP.
(b) Quarterly Financial Statements. As soon as practicable and in any
event within forty-five (45) days after the end of each fiscal quarter, an
unaudited Consolidated balance sheet of the Borrower and its Subsidiaries as of
the close of such fiscal quarter and unaudited Consolidated statements of
income, retained earnings and cash flows for the fiscal quarter then ended and
that portion of the Fiscal Year then ended, including the notes thereto, all in
reasonable detail setting forth in comparative form the corresponding figures
for the preceding Fiscal Year and prepared by the Borrower in accordance with
GAAP and, if applicable,
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containing disclosure of the effect on the financial position or results of
operations of any change in the application of accounting principles and
practices during the period, and certified by the chief financial officer of
the Borrower to present fairly in all material respects the financial condition
of the Borrower and its Subsidiaries as of their respective dates and the
results of operations of the Borrower and its Subsidiaries for the respective
periods then ended, subject to audit and normal year-end adjustments.
(c) Operating Budget and Cash Flow Projections. As soon as practicable and
in any event not later than 30 days prior to the end of each Fiscal Year, an
annual operating budget together with annual cash flow projections of the
Borrower and its Subsidiaries for the upcoming Fiscal Year, each in form and
substance reasonably satisfactory to the Agent.
(d) Other Financial Information. Promptly upon receipt thereof, copies of
all reports, if any, submitted to any Credit Party or its member committee by
its independent public accountants in connection with their auditing function,
including, without limitation, any management report and any management
responses thereto and such other information regarding the operations, business
affairs and financial condition of the Borrower or any of its Subsidiaries as
the Agent or the Required Lenders may reasonably request.
SECTION 7.2 OFFICER'S COMPLIANCE CERTIFICATE.
At each time financial statements are delivered pursuant to Section 7.1(a)
or (b), a certificate of the chief financial officer of the Borrower in the
form of Exhibit E attached hereto (an "Officer's Compliance Certificate"):
(a) stating that such officer has reviewed such financial statements and
such statements fairly present in all material respects the financial condition
of the Borrower and its Subsidiaries as of the dates indicated and the results
of its operations and cash flows for the periods indicated;
(b) stating that to the best of such officer's knowledge, based on a
reasonable examination sufficient to enable him to make an informed statement,
no Default or Event of Default exists, or, if such is not the case, specifying
such Default or Event of Default and its nature, when it occurred, whether it
is continuing and the steps being taken by the Credit Parties with respect to
such Default or Event of Default; and
(c) setting forth as at the end of such fiscal quarter or Fiscal Year, as
the case may be, the calculations required to establish whether or not the
Borrower and its Subsidiaries were in compliance with the financial covenants
set forth in Article IX hereof as at the end of each respective period.
SECTION 7.3 NOTICE OF LITIGATION AND OTHER MATTERS.
(a) Promptly (but in no event later than five (5) days after an officer of
any Credit Party obtains knowledge thereof), telephonic and written notice of:
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(i) the commencement of all proceedings and investigations by or
before any Governmental Authority and all actions and proceedings in any
court or before any arbitrator against or involving the Borrower or any
Subsidiary thereof or any of their respective properties, assets or
businesses which in any such case could reasonably be expected to have a
Material Adverse Effect;
(ii) any notice of any violation received by the Borrower or any
Subsidiary thereof from any Governmental Authority including, without
limitation, any notice of violation of Environmental Laws, which in any
such case could reasonably be expected to have a Material Adverse Effect;
(iii) any labor controversy that has resulted in, or threatens to
result in, a strike or other work action against the Borrower or any
Subsidiary thereof which in any such case could reasonably be expected to
have a Material Adverse Effect;
(iv) any Reportable Event or "prohibited transaction", as such term
is defined in Section 406 of ERISA or Section 4975 of the Code, in
connection with any Employee Benefit Plan or any trust created thereunder
which could reasonably be expected to result in liability of the Borrower
or any ERISA Affiliate in an aggregate amount exceeding $250,000, along
with a description of the nature thereof, what action Credit Parties have
taken, are taking or propose to take with respect thereto and, when known,
any action taken or threatened by the Internal Revenue Service, the
Department of Labor or the PBGC with respect thereto; and
(v) any event which (A) makes any of the representations set forth in
Section 6.1 inaccurate in any material respect or (B) could reasonably be
expected to have a Material Adverse Effect.
(b) Promptly upon transmission or receipt thereof, copies of any
filings and registrations with, and reports to or from (A) the Securities
and Exchange Commission, or any successor agency or (B) the United States
Occupational Health and Safety Administration, or any state or local
agency responsible for health and safety matters, or an successor
agencies.
SECTION 7.4 ACCURACY OF INFORMATION.
All written information, reports, statements and other papers and data
furnished by or on behalf of the Credit Parties to the Lenders (other than
financial forecasts) whether pursuant to this Article VII or any other
provision of this Agreement or any of the other Credit Documents, shall be, at
the time the same is so furnished, and taken as a whole, true and correct in
all material respects to the extent necessary to give the Lenders true and
accurate knowledge of the subject matter based on the Credit Parties' knowledge
thereof.
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ARTICLE VIII
AFFIRMATIVE COVENANTS
Until payment in full by the Borrower of all principal of and interest on
the Loans and all other amounts due hereunder and under the other Credit
Documents at the time of such payment, and the termination of the Revolving
Commitment, each Credit Party will, and will cause each of its Subsidiaries to:
SECTION 8.1 PRESERVATION OF CORPORATE EXISTENCE AND RELATED MATTERS.
Except as permitted by Section 10.4, preserve and maintain its separate
corporate existence and all rights, franchises, licenses and privileges
necessary to the conduct of its business and qualify and remain qualified as a
foreign corporation and authorized to do business in each jurisdiction in which
it is required to be so qualified, except where the failure to be so qualified
and authorized could not reasonably be expected to have a Material Adverse
Effect.
SECTION 8.2 MAINTENANCE OF PROPERTY.
Protect and preserve all properties useful in and material to its
business, including copyrights, patents, trade names and trademarks; maintain
in good working order and condition all buildings, equipment and other tangible
real and personal property; and from time to time make or cause to be made all
renewals, replacements and additions to such property necessary for the conduct
of its business, so that the business carried on in connection therewith may be
properly and advantageously conducted at all times.
SECTION 8.3 INSURANCE.
Maintain insurance with financially sound and reputable insurance
companies against such risks and in such amounts as are customarily maintained
by similar businesses and as may be required by Applicable Law, and on the
Closing Date and from time to time thereafter deliver to the Agent, on behalf
of the Lenders, upon its request a detailed list of the insurance then in
effect, stating the names of the insurance companies, the amounts and rates of
the insurance, the dates of the expiration thereof and the properties and risks
covered thereby. The Agent shall be named as loss payee, as its interest may
appear, and/or as additional insured with respect to any such insurance
providing coverage in respect of any Collateral, and each provider of any such
insurance shall agree, by endorsement upon the policy or policies issued by it
or by independent instruments furnished to the Agent, that it will give the
Agent thirty (30) days prior written notice before any such policy or policies
shall be materially altered or canceled, and that no act or default of the
Borrower or any of its Subsidiaries or any other Person shall affect the rights
of the Agent under such policy or policies.
SECTION 8.4 ACCOUNTING METHODS AND FINANCIAL RECORDS.
Maintain a system of accounting, and keep such books, records and accounts
(which shall be true and complete in all material respects) as may be required
or as may be necessary to
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permit the preparation of financial statements in accordance with GAAP and in
material compliance with the regulations of any Governmental Authority having
jurisdiction over it or any of its properties.
SECTION 8.5 PAYMENT AND PERFORMANCE OF OBLIGATIONS.
Pay and perform all obligations under this Agreement and the other Credit
Documents, and pay or perform (a) all taxes, assessments and other governmental
charges that may be levied or assessed upon it or any of its property and (b)
all other Debt in accordance with its terms (subject to any applicable
subordination provisions); provided, that such Credit Party or such Subsidiary
may contest any item described in clause (a) and (b) of this Section 8.5 in
good faith so long as adequate reserves are maintained with respect thereto in
accordance with GAAP.
SECTION 8.6 COMPLIANCE WITH LAWS, APPROVALS AND AGREEMENTS.
Observe and remain in compliance with all Applicable Laws; maintain in
full force and effect all Governmental Approvals; and observe and remain in
compliance with all material agreements, in each case applicable to the conduct
of its business and in each case except to the extent the failure to do so
could not reasonably be expected to have a Material Adverse Effect.
SECTION 8.7 ENVIRONMENTAL MANAGEMENT.
In addition to and without limiting the generality of Section 8.6, (a)
comply with, and ensure such compliance by all tenants, subtenants and other
occupants of the properties of the Borrower or its Subsidiaries for whatever
reason, if any, with, all applicable Environmental Laws and obtain and comply
with and maintain, and ensure that all tenants, subtenants and other occupants
of such properties for whatever reason obtain and comply with and maintain, any
and all licenses, approvals, notifications, registrations or permits required
by applicable Environmental Laws; (b) promptly conduct and complete, or cause
to be conducted and completed, all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws, and promptly comply with all lawful orders and directives
of any Governmental Authority regarding Environmental Laws except to the extent
the Credit Party contests in good faith the orders and directives, and (c)
defend, indemnify and hold harmless the Agent, the Lenders, their Subsidiaries,
Affiliates, employees, agents, officers, directors, successors and assigns from
and against any claims, demands, penalties, fines, liabilities, settlements,
damages, costs and expenses of whatever kind or nature known or unknown,
contingent or otherwise, arising out of, or in any way relating to the
violation of, noncompliance with or liability under any Environmental Laws
applicable to the operations of the Borrower or its Subsidiaries, or the
current, future or former ownership or operation of such properties, activities
thereon and actions taken in relation thereto including, without limitation,
all liability now existing or which may arise in the future as a result of the
release, transportation or disposal of any Hazardous Material from such
properties to or at any location, or any orders, requirements or demands of
Governmental Authorities related thereto, including, without limitation,
reasonable attorneys' and consultants' fees, investigation and laboratory fees,
response costs, court costs and litigation expenses, except to the extent that
any of the foregoing
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arise out of the gross negligence or willful misconduct of the party seeking
indemnification therefor.
SECTION 8.8 COMPLIANCE WITH ERISA.
In addition to and without limiting the generality of Section 8.6, (a)
comply in all material respects with all applicable provisions of ERISA and the
regulations and published interpretations thereunder with respect to all
Employee Benefit Plans, (b) not take any action or fail to take action the
result of which could be a material liability to the PBGC or to a Multiemployer
Plan, and not participate in any prohibited transaction that could result in
any material civil penalty under ERISA or tax under the Code and (c) furnish to
any Lenders upon any Lender's request such additional information about any
Employee Benefit Plan or Multiemployer Plan as may be reasonably requested by
such Lender.
SECTION 8.9 CONDUCT OF BUSINESS.
Engage only in the business of manufacturing, reprocessing and
distribution of medical products and supplies and in lines of business
reasonably related thereto.
SECTION 8.10 VISITS AND INSPECTIONS.
Permit representatives of the Agent, from time to time, to visit and
inspect its properties; inspect, audit and make extracts from its books,
records and files, including, but not limited to, management letters prepared
by independent accountants; and discuss with its principal officers, and its
independent accountants, its business, assets, liabilities, financial
condition, results of operations and business prospects; provided, that all
such visits and inspections shall be at reasonable times during ordinary
business hours, with reasonable notice to the Credit Parties and shall be at
the Credit Parties' expense.
SECTION 8.11 YEAR 2000 COMPATIBILITY.
Take all action necessary to assure that its computer based systems and
other equipment containing embedded microchips are able to operate and
effectively process data including dates on and after January 1, 2000, and, at
the reasonable request of the Agent and the Required Lenders, provide
reasonable evidence to the Lenders of such year 2000 compatibility.
SECTION 8.12 MATERIAL CONTRACTS.
Perform, and cause each of its Subsidiaries to perform, each of its
obligations under its Material Contracts, except to the extent the Credit Party
contests in good faith its obligation to perform those obligations.
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SECTION 8.13 FURTHER ASSURANCES.
Make, execute and deliver all such additional and further acts, things,
deeds and instruments as the Agent or the Required Lenders may reasonably
require to document and consummate the transactions contemplated hereby and to
vest completely in and insure the Lenders their rights under this Credit
Agreement, the Notes, and the other Credit Documents.
SECTION 8.14 SECURITY INTERESTS.
(a) Cause all of the Collateral (to the extent deemed material by the
Agent and the Required Lenders) to be subject to a first priority security
interest in favor of the Collateral Agent, for the benefit of the Lenders,
subject to Permitted Liens.
(b) Defend the Collateral against all claims and demands of all Persons at
any time claiming the same or any interest therein. The Credit Parties agree to
comply with the requirements of all state and federal laws in order to grant to
the Collateral Agent a valid and perfected first security interest in the
Collateral. The Collateral Agent is hereby authorized by the Credit Parties to
file any financing statements covering the Collateral whether or not the
applicable Credit Party's signature appears thereon. The Credit Parties agree
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; 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 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
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 the Credit Parties under this 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 an Obligation secured hereby
and due to the Agent on demand.
SECTION 8.15 ADDITIONAL GUARANTORS.
Cause each of their domestic Subsidiaries, whether newly formed, after
acquired or otherwise existing, to promptly become a "Guarantor" hereunder by
way of execution of a Joinder Agreement. The guaranty obligations of any such
Additional Credit Party shall be secured by, among other things, the Collateral
of such Additional Credit Party and a pledge of 100% of the Capital Stock of
its domestic Subsidiaries and 65% of the Capital Stock of its foreign
Subsidiaries to the extent that such pledge is permissible under applicable
law. Each Credit Party shall pledge to the Collateral Agent, for the benefit of
the Lenders, 100% of the
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Capital Stock of each of its domestic Subsidiaries and 65% the Capital Stock of
each of its foreign Subsidiaries.
ARTICLE IX
FINANCIAL COVENANTS
Until payment in full by the Borrower of all principal of and interest on
the Loans and all other amounts due hereunder and under the other Credit
Documents at the time of such payment, and the termination of the Revolving
Commitment, the Borrower will not:
SECTION 9.1 MINIMUM CONSOLIDATED NET WORTH.
Permit, at any time, Consolidated Net Worth to be less than the sum of (a)
$34,900,000 plus (b) seventy-five percent (75%) of cumulative Consolidated Net
Income (to the extent positive) for each fiscal quarter occurring after the
Closing Date.
SECTION 9.2 CONSOLIDATED LEVERAGE RATIO.
Permit, as of any fiscal quarter end, the Consolidated Leverage Ratio as
of the last day of each such fiscal quarter of the Borrower and its
Subsidiaries, to exceed 2.5 to 1.0.
SECTION 9.3 FIXED CHARGE COVERAGE RATIO.
Permit, as of any fiscal quarter end for the periods shown below, the
Fixed Charge Coverage Ratio, as of the last day of each such fiscal quarter, to
be less than 2.8 to 1.0.
ARTICLE X
NEGATIVE COVENANTS
Until payment in full by the Borrower of all principal of and interest on
the Loans and all other amounts due hereunder and under the other Credit
Documents at the time of such payment, and the termination of the Revolving
Commitment, the Credit Parties will not and will not permit any of their
Subsidiaries to:
SECTION 10.1 LIMITATIONS ON DEBT.
Create, incur, assume or suffer to exist any Debt except:
(a) the Obligations and the obligations of the Credit Parties under the
ELLF Operative Agreements;
(b) Debt incurred in connection with a Hedging Agreement with a
counterparty and upon terms and conditions reasonably satisfactory to the
Required Lenders;
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(c) Contingent Obligations in favor of the Agent on behalf of the Lenders;
(d) Purchase Money Debt of the Borrower and its Subsidiaries in an
aggregate amount outstanding at any time not to exceed $500,000; and
(e) Debt existing on the Closing Date identified on Schedule 6.1(p).
SECTION 10.2 LIMITATIONS ON LIENS.
Create, incur, assume or suffer to exist, any Lien on or with respect to
any of its assets or properties (including specifically shares of Capital Stock
of any Subsidiary), real or personal, whether now owned or hereafter acquired,
except for the following (collectively, "Permitted Liens"):
(a) Liens for taxes, assessments and other governmental charges or levies
(excluding any Lien imposed pursuant to any of the provisions of ERISA or
Environmental Laws) not yet due or as to which the period of grace (not to
exceed thirty (30) days), if any, related thereto has not expired or which are
being contested in good faith and by appropriate proceedings if adequate
reserves are maintained to the extent required by GAAP;
(b) the claims of materialmen, mechanics, carriers, warehousemen,
processors or landlords for labor, materials, supplies or rentals incurred in
the ordinary course of business, (i) which are not overdue for a period of more
than thirty (30) days or (ii) which are being contested in good faith and by
appropriate proceedings if adequate reserves are maintained to the extent
required by GAAP;
(c) Liens consisting of deposits or pledges made in the ordinary course of
business (i) in connection with or to secure a payment of, obligations under
workers' compensation, unemployment insurance or similar legislation or (ii) to
secure the performance of letters of credit, bids, tenders, sales contracts,
leases, statutory obligations, surety, appeal and performance bonds and other
similar obligations, in each case not incurred in connection with the borrowing
of money or the payment of the deferred purchase price of property;
(d) Liens constituting encumbrances in the nature of zoning restrictions,
easements and rights or restrictions of record on the use of real property,
which in the aggregate are not substantial in amount and which do not, in any
case, materially detract from the value of such property or impair the use
thereof in the ordinary conduct of business;
(e) Liens in favor of the Agent created pursuant to the Credit Documents
and the ELLF Operative Agreements;
(f) Liens securing Purchase Money Debt permitted under Section 10.1(d) in
an amount not to exceed $500,000 at any time outstanding; provided, that the
Lien attaches only to the asset being purchased or leased and does not exceed
100% of the purchase price or fair market value of such asset at the time of
acquisition;
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(g) Liens existing on the Closing Date identified on Schedule 6.1(p); and
(h) attachment, judgment and similar Liens arising in connection with
court proceedings other than any such Lien which would create an Event of
Default under Sections 11.1(j) or 11.1(k).
SECTION 10.3 LIMITATIONS ON LOANS, ADVANCES, INVESTMENTS AND ACQUISITIONS.
Purchase, own, invest in or otherwise acquire, directly or indirectly, any
capital stock, interests in any partnership or joint venture, evidence of Debt
or other obligation or security, substantially all or a portion of the business
or assets of any other Person or any other investment or interest whatsoever in
any other Person; or make or permit to exist, directly or indirectly, any
loans, advances or extensions of credit to, or any investment in cash or by
delivery of property in, any Person; or enter into, directly or indirectly, any
commitment or option in respect of the foregoing except:
(a) loans and advances to employees for reasonable travel, relocation and
business expenses in the ordinary course of business;
(b) deposits for utilities, security deposits, leases and similar prepaid
expenses incurred in the ordinary course of business;
(c) trade accounts created in the ordinary course of business; and
(d) other investments of the Credit Parties not exceeding $1,000,000 per
annum.
SECTION 10.4 LIMITATIONS ON MERGERS AND LIQUIDATION.
Merge, consolidate or enter into any similar combination with any other
Person or liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution).
SECTION 10.5 LIMITATIONS ON SALE OF ASSETS.
Convey, sell, lease, assign, transfer or otherwise dispose of any of its
property, business or assets (including, without limitation, the sale of any
receivables and leasehold interests and any sale-leaseback or similar
transaction), whether now owned or hereafter acquired, except:
(a) the sale or other disposition of assets no longer necessary in the
business of the Borrower or such Subsidiary;
(b) the sale of inventory in the ordinary course of business; and
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(c) other sales, leases, assignments, transfers or dispositions of
property, business or assets not to exceed $100,000 in the aggregate.
SECTION 10.6 TRANSACTIONS WITH AFFILIATES.
Except as otherwise permitted hereunder, directly or indirectly: (a)
except in accordance with the terms of clause (b) below, subcontract any
operations to any of its Affiliates or enter into any arrangements with its
Affiliates for the provision to any Credit Party of services in the nature of
accounting and legal support, merchandising, catering and other related
services or (b) enter into, or be a party to, any transaction with any of its
Affiliates, except pursuant to the reasonable requirements of its business and
upon fair and reasonable terms that are no less favorable to it than it would
obtain in a comparable arm's length transaction with a Person not its
Affiliate.
SECTION 10.7 CERTAIN ACCOUNTING CHANGES.
Change its Fiscal Year end, or make any material change in its accounting
treatment and reporting practices except for a change required by GAAP or a
change that is permitted by GAAP and disclosed to Lender.
SECTION 10.8 NO RESTRICTED PAYMENTS.
Make a Restricted Payment other than (a) the payments of dividends from
any Subsidiary to the Borrower and (b) payment in each fiscal quarter of up to
$55,000 as dividends on the Borrower's Series A Preferred Stock, in each case
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.
SECTION 10.9 [INTENTIONALLY OMITTED]
SECTION 10.10 ADDITIONAL NEGATIVE PLEDGES.
Create or otherwise suffer to exist or become effective, directly or
indirectly, (a) 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 Lenders) on the creation or existence of
any Lien upon the assets of the Borrower or the Subsidiaries, other than
Permitted Liens or (b) any contractual obligation which may restrict or limit
the Lenders' rights or ability to sell or otherwise dispose of the Collateral
or any part thereof after the occurrence of an Event of Default.
SECTION 10.11 SALE AND LEASEBACK.
Enter into any arrangement, directly or indirectly, whereby such Credit
Party or any of its Subsidiaries shall sell or transfer any property owned by
it to a Person (other than the Borrower or any Subsidiary) in order then or
thereafter to lease such property or lease other property which
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the Borrower or any Subsidiary intends to use for substantially the same
purpose as the property being sold or transferred.
SECTION 10.12 LICENSES, ETC.
Enter into licenses of, or otherwise restrict the use of, any patents,
trademarks or copyrights which would prevent such Person from selling,
transferring, encumbering or otherwise disposing of any such patent, trademark
or copyright.
SECTION 10.13 LIMITATIONS.
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) pay dividends
or make any other distribution on any of such Person's Capital Stock or (b) pay
any Debt owed to the Borrower, except for encumbrances or restrictions existing
under or by reason of (i) customary non-assignment provisions in any lease
governing a leasehold interest, and (ii) this Agreement and the other Credit
Documents.
SECTION 10.14 AMENDMENTS; PAYMENTS AND PREPAYMENTS OF SUBORDINATED DEBT.
(a) Amend or modify (or permit the modification or amendment of) any of
the terms or provisions of any Debt subordinated to the Obligations or (b)
cancel or forgive, make any voluntary or optional or mandatory payment or
prepayment on, make any payment of interest on, or redeem or acquire for value
(including without limitation by way of depositing with any trustee with
respect thereto money or securities before due for the purpose of paying when
due) any subordinated Debt.
ARTICLE XI
DEFAULT AND REMEDIES
SECTION 11.1 EVENTS OF DEFAULT.
Each of the following shall constitute an Event of Default, whatever the
reason for such event and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment or order of any court
or any order, rule or regulation of any Governmental Authority or otherwise:
(a) Default in Payment of Principal of Loans. Any Credit Party shall
default in any payment of principal of any Loan or the Notes when and as due
(whether at maturity, by reason of acceleration or otherwise).
(b) Other Payment Default. Any Credit Party shall default in the payment
when and as due (whether at maturity, by reason of acceleration or otherwise)
of interest on any Loan or
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the Notes or the payment of any other Obligations and such amount shall remain
unpaid for a period of five (5) Business Days following the due date thereof.
(c) Misrepresentation. Any representation or warranty made or deemed to be
made by any Credit Party under this Agreement, any Credit Document or any
amendment hereto or thereto, shall at any time prove to have been incorrect or
misleading in any material respect when made or deemed made.
(d) Default in Performance of Certain Covenants. Any Credit Party shall
default in the performance or observance of any covenant or agreement (i)
contained in Sections 7.1, 7.2 or 7.3(a) and such default shall continue
unremedied for a period of ten (10) Business Days or (ii) contained in Sections
8.9, 8.10 or Articles IX or X of this Agreement.
(e) Default in Performance of Other Covenants and Conditions. Any Credit
Party shall default in the performance or observance of any term, covenant,
condition or agreement contained in this Agreement (other than as specifically
provided for otherwise in this Section 11.1) or any other Credit Document and
such default shall continue for a period of thirty (30) days following notice
from the Lenders of its occurrence.
(f) Hedging Agreement. Any termination payment shall be due from any
Credit Party under any Hedging Agreement and such amount is not paid within ten
(10) Business Days after the due date thereof.
(g) Debt Cross-Default. The Borrower or any of its Subsidiaries shall (i)
default in the payment of any Debt (other than the Notes) the aggregate
outstanding amount of which is in excess of $100,000 beyond the period of grace
if any, provided in the instrument or agreement under which such Debt was
created or (ii) default in the observance or performance of any other agreement
or condition relating to any Debt (other than the Notes) the aggregate
outstanding amount of which is in excess of $100,000 or contained in any
instrument or agreement evidencing, securing or relating thereto or any other
event shall occur or condition exist, the effect of which default or other
event or condition is to cause, or to permit the holder or holders of such Debt
(or a trustee or agent on behalf of such holder or holders) to cause, with the
giving of notice if required, any such Debt to become due prior to its stated
maturity (any applicable grace period having expired).
(h) Voluntary Bankruptcy Proceeding. The Borrower or any Subsidiary
thereof shall (i) commence a voluntary case under the federal bankruptcy laws
(as now or hereafter in effect), (ii) file a petition seeking to take advantage
of any other laws, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, winding up or composition for adjustment of debts, (iii)
consent to or fail to contest in a timely and appropriate manner any petition
filed against it in an involuntary case under such bankruptcy laws or other
laws, (iv) apply for or consent to, or fail to contest in a timely and
appropriate manner, the appointment of, or the taking of possession by, a
receiver, custodian, trustee, or liquidator of itself or of a substantial part
of its property, domestic or foreign, (v) admit in writing its inability to pay
its debts as they become due, (vi) make a
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general assignment for the benefit of creditors or (vii) take any corporate
action for the purpose of authorizing any of the foregoing.
(i) Involuntary Bankruptcy Proceeding. A case or other proceeding shall be
commenced against the Borrower or any Subsidiary thereof in any court of
competent jurisdiction seeking (i) relief under the federal bankruptcy laws (as
now or hereafter in effect) or under any other laws, domestic or foreign,
relating to bankruptcy, insolvency, reorganization, winding up or adjustment of
debts or (ii) the appointment of a trustee, receiver, custodian, liquidator or
the like for the Borrower or any Subsidiary thereof or for all or any
substantial part of their respective assets, domestic or foreign, and such case
or proceeding shall continue undismissed or unstayed for a period of sixty (60)
consecutive calendar days, or an order granting the relief requested in such
case or proceeding (including, but not limited to, an order for relief under
such federal bankruptcy laws) shall be entered.
(j) Judgment. A judgment or order for the payment of money which exceeds
$100,000 in amount shall be entered against the Borrower or any of its
Subsidiaries by any court and such judgment or order shall continue
undischarged or unstayed for a period of thirty (30) days.
(k) Attachment. A warrant or writ of attachment or execution or similar
process shall be issued against any property of the Borrower or any of its
Subsidiaries which exceeds $100,000 in value and such warrant or process shall
continue undischarged or unstayed for a period of thirty (30) days.
(l) Noncompliance with Environmental Laws. The Borrower or any of its
Subsidiaries or Affiliates shall be found by any applicable Governmental
Authority to be in violation of or liable under any material requirement of
Environmental Law which could reasonably be expected to have a Material Adverse
Effect unless (i) such finding is being contested in good faith, (ii) adequate
reserves with respect thereto are maintained by such Person in accordance with
GAAP and (iii) there is no violation of the terms and provisions of this
Agreement or any of the other Credit Documents resulting therefrom or arising
with respect thereto.
(m) Change in Control. A Change in Control shall occur.
(n) Validity. Any covenant, agreement or obligation of any party contained
in or evidenced by any of the Credit Documents shall cease to be enforceable in
accordance with its terms, or any party (other than the Agent or the Lenders)
to any Credit Document shall deny or disaffirm its obligations under any of the
Credit Documents, or any Credit Document shall be canceled, terminated, revoked
or rescinded without the express prior written consent of the Agent, or any
action or proceeding shall have been commenced by any Person (other than the
Agent or any Lender) seeking to cancel, revoke, rescind or disaffirm the
obligations of any party to any Credit Document, or any court or other
governmental authority shall issue a judgment, order, decree or ruling to the
effect that any of the obligations of any party to any Credit
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Document are illegal, invalid or unenforceable, or the Liens created under the
Security Agreement or the Pledge Agreements shall cease to be first priority
perfected Liens.
(o) Default Under ELLF Participation Agreement. A "default" or "event of
default" as defined in the ELLF Participation Agreement shall occur.
SECTION 11.2 REMEDIES.
Upon the occurrence of an Event of Default, the Agent shall, upon the
written request of the Required Lenders, and by delivery of written notice to
the Borrower from the Agent, without prejudice to the rights of the Agent, any
Lender or the holder of any Note to enforce its claims against the Borrower:
(a) Acceleration; Termination of Agreement. Declare the principal of and
interest on the Loans, the Notes at the time outstanding, and all other amounts
owed to the Agent and the Lenders under this Agreement or any of the other
Credit Documents and all other Obligations, to be forthwith due and payable,
whereupon the same shall immediately become due and payable without
presentment, demand, protest or other notice of the Agent or any Lender of any
kind, all of which are expressly waived, anything in this Agreement or the
other Credit Documents to the contrary notwithstanding, and terminate this
Agreement, the outstanding Revolving Commitment and any right of the Borrower
to request borrowings hereunder; provided, that upon the occurrence of an Event
of Default specified in Section 11.1(h) or (i), this Agreement and the
outstanding Revolving Commitment shall be automatically terminated and all
Obligations shall automatically become due and payable.
(b) Rights of Collection. Exercise all of its other rights and remedies
under this Agreement, the other Credit Documents and Applicable Law, including,
without limitation, all rights of set-off, in order to satisfy all of the
Borrower's Obligations.
SECTION 11.3 RIGHTS AND REMEDIES CUMULATIVE; NON-WAIVER; ETC.
The enumeration of the rights and remedies of the Agent and the Lenders
set forth in this Agreement is not intended to be exhaustive and the exercise
by the Agent or any Lender of any right or remedy shall not preclude the
exercise of any other rights or remedies, all of which shall be cumulative, and
shall be in addition to any other right or remedy given hereunder or under the
Credit Documents or that may now or hereafter exist in law or in equity or by
suit or otherwise. No delay or failure to take action on the part of the Agent
or any Lender in exercising any right, power or privilege shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or privilege preclude other or further exercise thereof or the exercise
of any other right, power or privilege or shall be construed to be a waiver of
any Event of Default. No course of dealing between the Credit Parties, the
Agent and the Lenders or their respective agents or employees shall be
effective to change, modify or discharge any provision of this Agreement or any
of the other Credit Documents or to constitute a waiver of any Event of
Default.
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SECTION 11.4 CREDITING OF PAYMENTS AND PROCEEDS.
In the event that the Credit Parties shall fail to pay any of the
Obligations when due and the Obligations have been accelerated pursuant to
Section 11.2, then during the continuance of any such Event of Default all
payments received by the Lenders upon the Notes and the other Obligations and
all net proceeds from the enforcement of the obligations shall be applied first
to all expenses then due and payable by the Credit Parties hereunder, then to
all indemnity obligations then due and payable by the Credit Parties hereunder,
then to all Fees payable to the Agent and the Lenders then due and payable,
then to all facility and other fees and commissions then due and payable, then
to accrued and unpaid interest on the Notes and any termination payments due in
respect of a Hedging Agreement (pro rata in accordance with all such amounts
due), and then to the principal amount outstanding under the Notes, in that
order.
ARTICLE XII
THE AGENT
SECTION 12.1 APPOINTMENT OF AGENT.
(a) Each Lender hereby designates First Union as Agent to act as herein
specified. Each Lender hereby irrevocably authorizes, and each holder of any
Note by the acceptance of a Note or participation shall be deemed irrevocably
to authorize, the Agent to take such action on its behalf under the provisions
of this Credit Agreement and the Notes and any other instruments and agreements
referred to herein and to exercise such powers and to perform such duties
hereunder and thereunder as are specifically delegated to or required of the
Agent by the terms hereof and thereof and such other powers as are reasonably
incidental thereto. The Agent shall hold all payments of principal, interest,
Fees, charges and expenses received pursuant to this Credit Agreement or any
other Credit Document for the ratable benefit of the Lenders. The Agent may
perform any of its duties hereunder by or through its agents or employees.
(b) The provisions of this Article XII are solely for the benefit of the
Agent and the Lenders, and the Credit Parties shall have no rights as a third
party beneficiary of any of the provisions hereof (other than Section 12.9). In
performing its functions and duties under this Credit Agreement, the Agent
shall act solely as agent of the Lenders and does not assume and shall not be
deemed to have assumed any obligation toward or relationship of agency or trust
with or for the Credit Parties.
SECTION 12.2 NATURE OF DUTIES OF AGENT.
The Agent shall have no duties or responsibilities except those expressly
set forth in this Credit Agreement. Neither the Agent nor any of its officers,
directors, employees or agents shall be liable for any action taken or omitted
by it as such hereunder or in connection herewith, unless caused by its or their
gross negligence or willful misconduct. The duties of the Agent shall be
mechanical and administrative in nature; the Agent shall not have by reason of
this Credit Agreement a fiduciary relationship in respect of any Lender; and
nothing in this Credit
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Agreement, expressed or implied, is intended to or shall be so construed as to
impose upon the Agent any obligations in respect of this Credit Agreement
except as expressly set forth herein.
SECTION 12.3 LACK OF RELIANCE ON AGENT.
(a) Independently and without reliance upon the Agent, each Lender, to the
extent it deems appropriate, has made and shall continue to make (i) its own
independent investigation of the financial or other condition and affairs of
the Borrower and the other Credit Parties in connection with the taking or not
taking of any action in connection herewith and (ii) its own appraisal of the
creditworthiness of the Borrower and the Credit Parties, and, except as
expressly provided in this Credit Agreement, the Agent shall have no duty or
responsibility, either initially or on a continuing basis, to provide any
Lender with any credit or other information with respect thereto, whether
coming into its possession before the making of the Loans or at any time or
times thereafter.
(b) The Agent shall not be responsible to any Lender for any recitals,
statements, information, representations or warranties herein or in any
document, certificate or other writing delivered in connection herewith or for
the execution, effectiveness, genuineness, validity, enforceability,
collectability, priority or sufficiency of this Credit Agreement or the Notes
or the financial or other condition of the Borrower and the other Credit
Parties. The Agent shall not be required to make any inquiry concerning either
the performance or observance of any of the terms, provisions or conditions of
this Credit Agreement or the Notes, or the financial condition of the Borrower,
or the existence or possible existence of any Default or Event of Default,
unless specifically requested to do so in writing by any Lender.
SECTION 12.4 CERTAIN RIGHTS OF THE AGENT.
The Agent shall have the right to request instructions from the Required
Lenders or, as required, each of the Lenders. If the Agent shall request
instructions from the Required Lenders with respect to any act or action
(including the failure to act) in connection with this Credit Agreement, the
Agent shall be entitled to refrain from such act or taking such action unless
and until the Agent shall have received instructions from the Required Lenders,
and the Agent shall not incur liability to any Person by reason of so
refraining. Without limiting the foregoing, no Lender shall have any right of
action whatsoever against the Agent as a result of the Agent acting or
refraining from acting hereunder in accordance with the instructions of the
Required Lenders.
SECTION 12.5 RELIANCE BY AGENT.
The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, statement, certificate or
other oral or written communication believed by it to be genuine and correct
and to have been signed, sent or made by the proper person. The Agent may
consult with legal counsel (including counsel for the Credit Parties with
respect to matters concerning the Credit Parties), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts.
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SECTION 12.6 INDEMNIFICATION OF AGENT.
To the extent the Agent is not reimbursed and indemnified by the Credit
Parties, each Lender will reimburse and indemnify the Agent, in proportion to
its respective Commitment, for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including counsel fees and disbursements) or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by or asserted
against the Agent in performing its duties hereunder, in any way relating to or
arising out of this Credit Agreement, provided that no Lender shall be liable
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from the
Agent's gross negligence or willful misconduct.
SECTION 12.7 THE AGENT IN ITS INDIVIDUAL CAPACITY.
With respect to its obligation to lend under this Credit Agreement, the
Loans made by it and the Notes issued to it and all of its rights and
obligations as a Lender hereunder and under the other Credit Documents, the
Agent shall have the same rights and powers hereunder as any other Lender or
holder of a Note or participation interests and may exercise the same as though
it was not performing the duties specified herein; and the terms "Lenders",
"Required Lenders", "holders of Notes", or any similar terms shall, unless the
context clearly otherwise indicates, include the Agent in its individual
capacity. The Agent may accept deposits from, lend money to, acquire equity
interests in, and generally engage in any kind of banking, trust, financial
advisory or other business with the Credit Parties or any Affiliate of the
Credit Parties as if it were not performing the duties specified herein, and
may accept fees and other consideration from the Credit Parties for services in
connection with this Credit Agreement and otherwise without having to account
for the same with the Lenders.
SECTION 12.8 HOLDERS OF NOTES.
The Agent may deem and treat the payee of any Note as the owner thereof
for all purposes hereof unless and until a written notice of the assignment or
transfer thereof shall have been filed with the Agent. Any request, authority
or consent of any Person who, at the time of making such request or giving such
authority or consent, is the holder of any Note, shall be conclusive and
binding on any subsequent holder, transferee or assignee of such Note or of any
Note or Notes issued in exchange therefor.
SECTION 12.9 SUCCESSOR AGENT.
(a) The Agent may, upon five (5) Business Days' notice to the Lenders and
the Borrower, resign at any time (effective upon the appointment of a successor
Agent pursuant to the provisions of this Section 12.9(a)) by giving written
notice thereof to the Lenders and the Borrower. Upon any such resignation, the
Required Lenders shall have the right, upon five (5) days' notice, to appoint a
successor Agent. If no successor Agent shall have been so appointed by the
Required Lenders, and shall have accepted such appointment, within thirty (30)
days after
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the retiring Agent's giving of notice of resignation, then, upon five (5) days'
notice, the retiring Agent may, on behalf of the Lenders, appoint a successor
Agent, which shall be a bank or a trust company or other financial institution
which maintains an office in the United States, or a commercial bank organized
under the laws of the United States or of any state thereof, or any affiliate
of such bank or trust company or other financial institution which is engaged
in the banking business, having a combined capital and surplus of at least
$500,000,000. Notwithstanding anything herein to the contrary, any successor
Agent (whether appointed by the Required Lenders or the Agent) shall have been
approved in writing by the Borrower (such approval not to be unreasonably
withheld).
(b) Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Agent, and the retiring Agent shall be discharged from its duties and
obligations under this Credit Agreement. After any retiring Agent's resignation
hereunder as Agent, the provisions of this Article XII shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Credit Agreement.
SECTION 12.10 ACTIONS WITH RESPECT TO DEFAULTS.
In addition to the Agent's right to take actions on its own accord as
permitted under this Credit Agreement, the Agent shall take such action with
respect to a Default or Event of Default as shall be directed by the Required
Lenders; provided that, 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 and in the best interests of the Lenders.
SECTION 12.11 DELIVERY OF INFORMATION.
The Agent shall not be required to deliver to any Lender originals or
copies of any documents, instruments, notices, communications or other
information received by the Agent from the Borrower, any Subsidiary, the
Required Lenders, any Lender or any other Person under or in connection with
this Credit Agreement or any other Credit Document except (i) as specifically
provided in this Credit Agreement or any other Credit Document and (ii) as
specifically requested from time to time in writing by any Lender with respect
to a specific document instrument, notice or other written communication
received by and in the possession of the Agent at the time of receipt of such
request and then only in accordance with such specific request.
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ARTICLE XIII
MISCELLANEOUS
SECTION 13.1 NOTICES.
(a) Method of Communication. Except as otherwise provided in this
Agreement, all notices and communications hereunder shall be in writing. Any
notice shall be effective if delivered by hand delivery or sent via telecopy,
recognized overnight courier service or certified mail, return receipt
requested, and shall be presumed to be received by a party hereto (i) on the
date of delivery if delivered by hand or sent by telecopy, (ii) on the next
Business Day if sent by recognized overnight courier service and (iii) on the
third Business Day following the date sent by certified mail, return receipt
requested.
(b) Addresses for Notices. Notices to any party shall be sent to it at
the following addresses, or any other address as to which all the other parties
are notified in writing.
If to the Borrower or any other Credit Party:
Sterile Recoveries, Inc.
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ Plaza, Suite 3700
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
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If to the Agent:
First Union National Bank
One First Union Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to any Lender: To the address specified for such Lender on
Schedule 1.1A.
(c) Agent's Office. The Agent hereby designates its office located at the
address set forth above, or any subsequent office which shall have been
specified for such purpose by written notice to the Borrower, as the Agent's
office referred to herein, to which payments due are to be made and at which
Loans will be disbursed.
SECTION 13.2 GOVERNING LAW.
This Agreement, the Notes and the other Credit Documents, unless otherwise
expressly set forth therein, shall be governed by, construed and enforced in
accordance with the laws of the State of Florida, without reference to the
conflicts or choice of law principles thereof.
SECTION 13.3 ARBITRATION; CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
(a) Upon demand of any party hereto, whether made before or after
institution of any judicial action, any dispute, claim or controversy
arising out of or connected herewith or with the Credit Documents
("Disputes") shall be resolved by binding arbitration as provided herein.
Disputes may include, without limitation, tort claims, counterclaims,
claims brought as class actions and claims arising herefrom or from Credit
Documents executed in the future. Arbitration shall be conducted under the
Commercial Financial Disputes Arbitration Rules (the "Arbitration Rules")
of the American Arbitration Association and Title 9 of the U.S. Code. All
arbitration hearings shall be conducted in St. Petersburg, Pinellas
County, Florida, or such other place as agreed to in writing by the
parties. A judgment upon the award may be entered in any court having
jurisdiction, and all decisions shall be in writing. The panel from which
all arbitrators are selected shall be comprised of licensed attorneys
having at least ten years' experience representing parties in secured
lending transactions. Notwithstanding the foregoing, this arbitration
provision does not apply to disputes under or related to Hedging
Agreements.
(b) Notwithstanding the preceding binding arbitration provision, the
Agent, on behalf of the Lenders, preserves certain remedies that may be
exercised during a Dispute. The Agent, on behalf of the Lenders, shall
have the right to proceed in any court of proper
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jurisdiction or by self help to exercise or prosecute the following
remedies, as applicable: (i) all rights to foreclose against any real or
personal property or other security by exercising a power of sale granted
in the Credit Documents or under applicable law, (ii) all rights of self
help including peaceful occupation of real property and collection of
rents, set-off and peaceful possession of personal property, (iii)
obtaining provisional or ancillary remedies including injunctive relief,
sequestration, garnishment, attachment and appointment of receiver, (iv)
when applicable, a judgment by confession of judgment and (v) other
remedies. Preservation of these remedies does not limit the power of an
arbitrator to grant similar remedies that may be requested by a party in a
Dispute.
(c) By execution and delivery of this Agreement, each of the parties
hereto accepts, for itself and in connection with its properties,
generally and unconditionally, the non-exclusive jurisdiction relating to
any arbitration proceedings conducted under the Arbitration Rules in St.
Petersburg, Pinellas County, Florida and irrevocably agrees to be bound by
any final judgment rendered thereby in connection with this Agreement from
which no appeal has been taken or is available. Each of the parties hereto
irrevocably agrees that all process in any such arbitration proceedings or
otherwise may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to it at its address set forth in Section 13.1(b) herein or at
such other address of which such party shall have been notified pursuant
thereto, such service being hereby acknowledged by each party hereto to be
effective and binding service in every respect. Each party hereto
irrevocably waives any objection, including, without limitation, any
objection to the laying of venue or based on the grounds of forum non
conveniens which it may now or hereafter have to the bringing of any such
action or proceeding in any such jurisdiction. Nothing herein shall affect
the right to serve process in any other manner permitted by law.
SECTION 13.4 WAIVER OF JURY TRIAL.
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE AGENT, THE LENDERS
AND EACH CREDIT PARTY HEREBY IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO A
JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM OR OTHER PROCEEDING ARISING OUT OF
ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, THE NOTES OR THE OTHER CREDIT
DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE
PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS.
SECTION 13.5 REVERSAL OF PAYMENTS.
To the extent any Credit Party makes a payment or payments to the Lenders,
which payments or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside and/or required to be repaid to a
trustee, receiver or any other party under any bankruptcy law, state or federal
law, common law or equitable cause, then, to the extent of such payment repaid,
the Obligations or part thereof intended to be satisfied shall be revived and
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continued in full force and effect as if such payment or proceeds had not been
received by the Lenders.
SECTION 13.6 INJUNCTIVE RELIEF.
The Credit Parties recognize that, in the event the Credit Parties fail to
perform, observe or discharge any of their obligations or liabilities under
this Agreement, any remedy of law may prove to be inadequate relief to the
Agent and the Lenders. Therefore, the Credit Parties agree that the Agent and
the Lenders, at the their option, shall be entitled to temporary and permanent
injunctive relief in any such case without the necessity of proving actual
damages.
SECTION 13.7 [RESERVED]
SECTION 13.8 SUCCESSORS AND ASSIGNS; PARTICIPATIONS.
(a) The Credit Parties shall not have the right to assign this Credit
Agreement or any interest herein except with the prior written consent of the
Lenders.
(b) Notwithstanding subsection (c) of this Section 13.8, nothing herein
shall restrict, prevent or prohibit any Lender from (i) pledging its Loans
hereunder to a Federal Reserve Bank in support of borrowings made by such
Lender from such Federal Reserve Bank or (ii) granting assignments or
participations in such Lender's Loans and/or Commitments hereunder to its
parent company and/or to any affiliate of such Lender or to any existing Lender
or affiliate thereof. Any Lender may make, carry or transfer Loans at, to or
for the account of, any of its branch offices or the office of an affiliate of
such Lender except to the extent such transfer would result in increased costs
to the Borrower.
(c) Each Lender may, with the consent of the Agent and, prior to the
occurrence of an Event of Default hereunder, the Borrower (such consent not to
be unreasonably withheld or delayed), but without the consent of any other
Lender, assign to one or more banks or other financial institutions all or a
portion of its rights and obligations under this Credit Agreement and the
Notes; provided that
(i) for each such assignment, the parties thereto shall execute and
deliver to the Agent, for its acceptance and recording in the Register (as
defined below), an Assignment and Acceptance, together with any Note or
Notes subject to such assignment and a processing and recordation fee of
$3,500 to be paid by the assignee,
(ii) such assignment plus the assignment of such Lender's interest
under the ELLF Participation Agreement, shall be for a minimum aggregate
amount of $5,000,000,
(iii) unless otherwise agreed to by the Borrower and the Agent, such
assigning Lender shall assign to such assignee (A) an identical percentage
of its Commitment (as defined in Appendix A to the ELLF
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Participation Agreement) and (B) an identical percentage of its Holder
Commitment (as defined in Appendix A to the ELLF Participation Agreement);
provided that to the extent an affiliate of any Lender holds any portion
of such Commitment or Holder Commitment, such Lender shall cause such
affiliate to assign to such assignee (C) an identical percentage of its
Commitment (as defined in Appendix A to the ELLF Participation Agreement)
and (D) an identical percentage of its Holder Commitment (as defined in
Appendix A to the ELLF Participation Agreement) and
(iv) if such assignee is a Foreign Lender, all of the requirements of
Section 3.8(b) shall have been satisfied as a condition to such
assignment.
Upon such execution and delivery of the Assignment and Acceptance to the Agent,
from and after the date specified as the effective date in the Assignment and
Acceptance (the "Acceptance Date"), (x) the assignee thereunder shall be a
party hereto, and, to the extent that rights and obligations hereunder have
been assigned to it pursuant to such Assignment and Acceptance, such assignee
shall have the rights and obligations of a Lender hereunder and (y) the
assignor thereunder shall, to the extent that rights and obligations hereunder
have been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights (other than any rights it may have pursuant to Section 13.9 which
will survive) and be released from its obligations under this Credit Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's rights and obligations under this Credit
Agreement, such Lender shall cease to be a party hereto).
(d) By executing and delivering an Assignment and Acceptance, the assignee
thereunder confirms and agrees as follows: (i) other than as provided in such
Assignment and Acceptance, the assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Credit
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Credit Agreement, the Notes or any other
instrument or document furnished pursuant hereto, (ii) such assigning Lender
makes no representation or warranty and assumes no responsibility with respect
to the financial condition of the Credit Parties or the performance or
observance by the Credit Parties of any of their obligations under this Credit
Agreement or any other instrument or document furnished pursuant hereto, (iii)
such assignee confirms that it has received a copy of this Credit Agreement,
together with copies of the financial statements referred to in Section 7.1 and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and Acceptance,
(iv) such assignee will, independently and without reliance upon the Agent,
such assigning Lender or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Credit Agreement,
(v) such assignee appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers under this Credit Agreement as
are delegated to the Agent by the terms hereof, together with such powers as
are reasonably incidental thereto and (vi) such assignee agrees that it will
perform in accordance with their terms all of the obligations which by the
terms of this Credit Agreement are required to be performed by it as a Lender.
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(e) The Agent shall maintain at its address referred to in Section 13.1 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
Commitments of, and 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 and copies of each Assignment and Acceptance shall be available for
inspection by the Borrower or any Lender at any reasonable time and from time
to time upon reasonable prior notice.
(f) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender, together with the Note or Notes subject to such assignment,
the Agent shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit A hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Borrower. Within five (5) Business Days
after its receipt of such notice, the Borrower shall execute and deliver to the
Agent in exchange for the surrendered Note or Notes (which the assigning Lender
agrees to promptly deliver to the Borrower) a new Note or Notes to the order of
the assignee in an amount equal to the Commitment or Commitments assumed by it
pursuant to such Assignment and Acceptance and, if the assigning Lender has
retained a Commitment or Commitments hereunder, a new Note or Notes to the
order of the assigning Lender in an amount equal to the Commitment or
Commitments retained by it hereunder. Such new Note or Notes shall re-evidence
the indebtedness outstanding under the old Note or Notes and shall be in an
aggregate principal amount equal to the aggregate principal amount of such
surrendered Note or Notes, shall be dated the Closing Date and shall otherwise
be in substantially the form of the Note or Notes subject to such assignments.
(g) Each Lender may sell participations (without the consent of the Agent,
the Borrower or any other Lender) to one or more parties in or to all or a
portion of its rights and obligations under this Credit Agreement (including,
without limitation, all or a portion of its Commitments, the Loans owing to it
and the Note or Notes held by it); provided that (i) such Lender's obligations
under this Credit Agreement (including, without limitation, its Commitments to
the Borrower hereunder) shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations, (iii) such Lender shall remain the holder of any such Note for all
purposes of this Credit Agreement, (iv) the Borrower, the Agent, and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Credit
Agreement and (v) such Lender shall not transfer, grant, assign or sell any
participation under which the participant shall have rights to approve any
amendment or waiver of this Credit Agreement except to the extent such
amendment or waiver would (A) extend the final Maturity Date or the date for
the payments of any installment of fees or principal or interest of any Loans
in which such participant is participating, (B) reduce the amount of any
installment of principal of the Loans in which such participant is
participating, (C) except as otherwise expressly provided in this Credit
Agreement, reduce the interest rate applicable to the Loans in which such
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participant is participating, or (D) except as otherwise expressly provided in
this Credit Agreement, reduce any Fees payable hereunder.
(h) Each Lender agrees that, without the prior written consent of the
Borrower and the Agent, it will not make any assignment or sell a participation
hereunder in any manner or under any circumstances that would require
registration or qualification of, or filings in respect of, any Loan, Note or
other Obligation under the securities laws of the United States of America or
of any jurisdiction.
(i) In connection with the efforts of any Lender to assign its rights or
obligations or to participate interests, such Lender may disclose any
information in its possession regarding the Borrower.
SECTION 13.9 PAYMENT OF EXPENSES; INDEMNIFICATION.
The Credit Parties agree to: (a) pay all reasonable out-of-pocket costs
and expenses of (i) the Agent in connection with (A) the negotiation,
preparation, execution and delivery and administration of this Credit Agreement
and the other Credit Documents and the documents and instruments referred to
therein (including, without limitation, the reasonable fees and expenses of
special counsel to the Agent and the reasonable fees and expenses of counsel
for the Agent in connection with collateral issues), and (B) any amendment,
waiver or consent relating hereto and thereto including, but not limited to,
any such amendments, waivers or consents resulting from or related to any
work-out, renegotiation or restructure relating to the performance by the
Credit Parties under this Credit Agreement and (ii) the Agent and the Lenders
in connection with enforcement of the Credit Documents and the documents and
instruments referred to therein, including, without limitation, in connection
with any such enforcement, the reasonable fees and disbursements of counsel for
the Agent and each of the Lenders. Each Credit Party shall and hereby does
agree to indemnify, defend and hold harmless the Agent and each of the Lenders
and their respective directors, officers, agents, employees and counsel from
and against (a) any and all losses, claims, damages, liabilities, deficiencies,
judgments or expenses incurred by any of them (except to the extent that it is
finally judicially determined to have resulted from their own gross negligence
or willful misconduct) arising out of or by reason of any litigation,
investigation, claim or proceeding which arises out of or is in any way related
to (i) this Credit Agreement or the transactions contemplated thereby, (ii) any
actual or proposed use by the Borrower of the proceeds of the Loans or (iii)
the Agent's or the Lenders' entering into this Credit Agreement, the other
Credit Documents or any other agreements and documents relating hereto,
including, without limitation, amounts paid in settlement, court costs and the
fees and disbursements of counsel incurred in connection with any such
litigation, investigation, claim or proceeding or any advice rendered in
connection with any of the foregoing and (b) any such losses, claims, damages,
liabilities, deficiencies, judgments or expenses incurred in connection with
any remedial or other action taken by the Credit Parties or any of the Lenders
in connection with compliance by the Credit Parties or any of their
Subsidiaries, or any of their respective properties, with any federal, state or
local environmental laws, acts, rules, regulations, orders, directions,
ordinances, criteria or guidelines. If and to the extent that the obligations
of any Credit Party hereunder are unenforceable for any reason, the Credit
Parties hereby agree to make
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the maximum contribution to the payment and satisfaction of such obligations
which is permissible under applicable law. The Credit Parties' obligations
hereunder shall survive any termination of this Credit Agreement and the other
Credit Documents and the payment in full of the Obligations, and are in
addition to, and not in substitution of, any other of its obligations set forth
in this Credit Agreement. In addition, the Credit Parties shall, upon demand,
pay to the Agent and any Lender all costs and expenses (including the
reasonable fees and disbursements of counsel and other professionals) paid or
incurred by the Agent or such Lender in (i) enforcing or defending its rights
under or in respect of this Credit Agreement, the other Credit Documents or any
other document or instrument now or hereafter executed and delivered in
connection herewith, (ii) in collecting the Loans and (iii) obtaining any
legal, accounting or other advice in connection with any of the foregoing.
SECTION 13.10 AMENDMENTS, WAIVERS AND CONSENTS.
No amendment or waiver of any provision of any Credit Document nor any
consent to any departure by any Credit Party therefrom, shall be effective
unless the same shall be agreed or consented to in writing by the Required
Lenders, or if the Lenders shall not be parties thereto, by the parties thereto
and consented to by the Required Lenders, and each such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given; provided that no amendment , waiver or consent shall unless in
writing and signed by all the Lenders, do any of the following: (a) increase
the Commitments of the Lenders or subject the Lenders to any additional
obligations, (b) except as otherwise expressly provided in this Credit
Agreement, reduce the principal of, or interest on, any Note or any fees
hereunder, (c) postpone any date fixed for any payment in respect of principal
of, or interest on, any Note or any fees hereunder, (d) change the percentage
of the Commitments, or any minimum requirement necessary for the Lenders or the
Required Lenders to take any action hereunder, (e) amend or waive this Section
13.10, or change the definition of Required Lenders, (f) release any material
portion of the Collateral and (g) change or waive any conditions precedent to
closing contained in Article V and, provided, further, that no amendment,
waiver or consent affecting the rights or duties of the Agent under any Credit
Document shall in any event be effective, unless in writing and signed by the
Agent, in addition to the Lenders required hereinabove to take such action.
Notwithstanding any of the foregoing to the contrary, the consent of the
Borrower shall not be required for any amendment, modification or waiver of the
provisions of Article XII (other than the provisions of Section 12.9). In
addition, the Borrower and the Lenders hereby authorize the Agent to modify
this Credit Agreement by unilaterally amending or supplementing Schedule 1.1A
from time to time in the manner requested by the Borrower, the Agent or any
Lender in order to reflect any assignments or transfers of the Loans as
provided for hereunder; provided, however, that the Agent shall promptly
deliver a copy of any such modification to the Borrower and each Lender.
SECTION 13.11 INFORMATION.
Each Credit Party hereby agrees that the Agent and the Lenders may
exchange any information concerning such Credit Party, including, without
limitation, information relating to the creditworthiness of such Credit Party
in the possession or control of the Agent or the
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Lenders, as the case may be: (i) with any of their respective affiliates,
counsel or other representatives; provided, however, that any such exchange,
and the nature, manner and extent thereof may be limited pursuant to any
written confidentiality agreement governing the obligations of the Agent or the
Lenders or such affiliate, as the case may be, with respect to such
information; provided, further, that neither the Agent nor any of the Lenders
shall in any event furnish any such information to any competitor of the
Borrower or any customer of the Borrower or any Person known by the Agent or
any Lender to be contemplating an acquisition of any Capital Stock or assets of
the Borrower or any agent or affiliate of any of the foregoing, except with the
prior written consent of the Borrower or as required by applicable law or
judicial order; (ii) with any regulatory authority having jurisdiction over any
Lender or (iii) with any other person, in connection with the exercise of the
Lender's rights hereunder or, under any of the other Credit Documents. Each
Credit Party further agrees and consents to the Agent's disclosure of
information relating to this transaction to Gold Sheets and other similar bank
trade publications. Such information will consist of deal terms and other
information customarily found in such publications.
SECTION 13.12 PERFORMANCE OF DUTIES.
The Credit Parties' obligations under this Agreement and each of the
Credit Documents shall be performed by the Credit Parties at their sole cost
and expense.
SECTION 13.13 NONLIABILITY OF AGENT AND LENDERS.
The relationship between the Borrower on the one hand and the Lenders and
the Agent on the other hand shall be solely that of borrower and lender.
Neither the Agent nor any Lender shall have any fiduciary responsibilities to
the Borrower or any other Credit Party. Neither the Agent nor any Lender
undertakes any responsibility to the Credit Parties to review or inform the
Credit Parties of any matter in connection with any phase of the Credit
Parties' business or operations.
SECTION 13.14 ALL POWERS COUPLED WITH INTEREST.
All powers of attorney and other authorizations granted to the Agent or
any Lender and any Persons designated by the Agent or any Lender pursuant to
any provisions of this Agreement or any of the other Credit Documents shall be
deemed coupled with an interest and shall be irrevocable so long as any of the
obligations remain unpaid or unsatisfied or this Agreement has not been
terminated.
SECTION 13.15 SURVIVAL OF INDEMNITIES.
Notwithstanding any termination of this Agreement, the indemnities to
which the Lenders are entitled under the provisions of this Article XIII and
any other provision of this Agreement and the Credit Documents shall continue
in full force and effect and shall protect the Lenders against events arising
after such termination as well as before.
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SECTION 13.16 TITLES AND CAPTIONS.
Titles and captions of Articles, Sections and subsections in this
Agreement are for convenience only, and neither limit nor amplify the
provisions of this Agreement.
SECTION 13.17 SEVERABILITY OF PROVISIONS.
Any provision of this Agreement or any other Credit Document which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective only to the extent of such prohibition or unenforceability
without invalidating the remainder of such provision or the remaining
provisions hereof or thereof or affecting the validity or enforceability of
such provision in any other jurisdiction.
SECTION 13.18 COUNTERPARTS.
This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and shall be binding upon all
parties, their successors and assigns, and all of which taken together shall
constitute one and the same agreement.
SECTION 13.19 TERM OF AGREEMENT.
This Agreement shall remain in effect from the Closing Date through and
including the date upon which the Borrower has paid in full all principal of
and interest on the Loans and all other amounts due hereunder and under the
other Credit Documents at the time of such payment, and the termination of the
Revolving Commitment. No termination of this Agreement shall affect the rights
and obligations of the parties hereto arising prior to such termination.
ARTICLE XIV
GUARANTY
SECTION 14.1 THE GUARANTY.
In order to induce the Lenders to enter into this Agreement and to extend
credit hereunder and in recognition of the direct benefits to be received by
the Guarantors from the Loans made hereunder, each of the Guarantors hereby
agrees with the Agent and the Lenders as follows: the Guarantor hereby
unconditionally and irrevocably jointly and severally guarantees as primary
obligor and not merely as surety the full and prompt payment when due, whether
upon maturity, by acceleration or otherwise, of any and all indebtedness of the
Borrower to the Agent and the Lenders. If any or all of the indebtedness of the
Borrower to the Agent and the Lenders becomes due and payable hereunder, each
Guarantor unconditionally promises to pay such indebtedness to the Agent and
the Lenders, or order, on demand, together with any and all reasonable expenses
which may be incurred by the Agent or the Lenders in collecting any of the
indebtedness. The word "indebtedness" is used in this Article XIV in its most
comprehensive sense and includes
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any and all advances, debts, obligations and liabilities of the Borrower
arising in connection with this Agreement, any of the other Credit Documents
and any of the ELLF Operative Agreements, in each case, heretofore, now, or
hereafter made, incurred or created, whether voluntarily or involuntarily,
absolute or contingent, liquidated or unliquidated, determined or undetermined,
whether or not such indebtedness is from time to time reduced, or extinguished
and thereafter increased or incurred, whether the Borrower may be liable
individually or jointly with others, whether or not recovery upon such
indebtedness may be or hereafter become barred by any statute of limitations,
and whether or not such indebtedness may be or hereafter become otherwise
unenforceable.
Notwithstanding any provision to the contrary contained herein or in any
other of the Credit Documents, to the extent the obligations of a Guarantor
shall be adjudicated to be invalid or unenforceable for any reason (including,
without limitation, because of any applicable state or federal law relating to
fraudulent conveyances or transfers) then the obligations of each such
Guarantor hereunder shall be limited to the maximum amount that is permissible
under applicable law (whether federal or state and including, without
limitation, the Bankruptcy Code).
SECTION 14.2 BANKRUPTCY.
Additionally, each of the Guarantors unconditionally and irrevocably
guarantees jointly and severally the payment of any and all indebtedness of the
Borrower to the Lenders whether or not due or payable by the Borrower upon the
occurrence of any of the events specified in Section 11.1(h) or (i), and
unconditionally promises to pay such indebtedness to the Agent for the account
of the Lenders, or order, on demand, in Dollars. Each of the Guarantors further
agrees that to the extent that the Borrower or a Guarantor shall make a payment
or a transfer of an interest in any property to the Agent or any Lender, which
payment or transfer or any part thereof is subsequently invalidated, declared
to be fraudulent or preferential, or otherwise is avoided, and/or required to
be repaid to the Borrower or a Guarantor, the estate of the Borrower or a
Guarantor, a trustee, receiver or any other party under any bankruptcy law,
state or federal law, common law or equitable cause, then to the extent of such
avoidance or repayment, the obligation or part thereof intended to be satisfied
shall be revived and continued in full force and effect as if said payment had
not been made.
SECTION 14.3 NATURE OF LIABILITY.
The liability of each Guarantor hereunder is exclusive and independent of
any security for or other guaranty of the indebtedness of the Borrower whether
executed by any such Guarantor, any other guarantor or by any other party, and
no Guarantor's liability hereunder shall be affected or impaired by (a) any
direction as to application of payment by the Borrower or by any other party,
or (b) any other continuing or other guaranty, undertaking or maximum liability
of a guarantor or of any other party as to the indebtedness of the Borrower, or
(c) any payment on or in reduction of any such other guaranty or undertaking,
or (d) any dissolution, termination or increase, decrease or change in
personnel by the Borrower, or (e) any payment made to the Agent or the Lenders
on the indebtedness which the Agent or such Lenders repay the Borrower pursuant
to court order in any bankruptcy, reorganization, arrangement, moratorium or
other
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debtor relief proceeding, and each of the Guarantors waives any right to
the deferral or modification of its obligations hereunder by reason of any such
proceeding.
SECTION 14.4 INDEPENDENT OBLIGATION.
The obligations of each Guarantor hereunder are independent of the
obligations of any other guarantor or the Borrower, and a separate action or
actions may be brought and prosecuted against each Guarantor whether or not
action is brought against any other guarantor or the Borrower and whether or
not any other Guarantor or the Borrower is joined in any such action or
actions.
SECTION 14.5 AUTHORIZATION.
Each of the Guarantors authorizes the Agent and each Lender without notice
or demand (except as shall be required by applicable statute and cannot be
waived), and without affecting or impairing its liability hereunder, from time
to time to (a) renew, compromise, extend, increase, accelerate or otherwise
change the time for payment of, or otherwise change the terms of the
indebtedness or any part thereof in accordance with this Agreement, including
any increase or decrease of the rate of interest thereon, (b) take and hold
security from any guarantor or any other party for the payment of this Guaranty
or the indebtedness and exchange, enforce waive and release any such security,
(c) apply such security and direct the order or manner of sale thereof as the
Agent and the Lenders in their discretion may determine and (d) release or
substitute any one or more endorsers, guarantors, the Borrower or other
obligors.
SECTION 14.6 RELIANCE.
It is not necessary for the Agent or the Lenders to inquire into the
capacity or powers of the Borrower or the officers, directors, partners or
agents acting or purporting to act on its behalf, and any indebtedness made or
created in reliance upon the professed exercise of such powers shall be
guaranteed hereunder.
SECTION 14.7 WAIVER.
(a) Each of the Guarantors waives any right (except as shall be
required by applicable statute and cannot be waived) to require the Agent
or any Lender to (i) proceed against the Borrower, any other guarantor or
any other party, (ii) proceed against or exhaust any security held from
the Borrower, any other guarantor or any other party, or (iii) pursue any
other remedy in the Agent's or any Lender's power whatsoever. Each of the
Guarantors waives any defense based on or arising out of any defense of
the Borrower, any other guarantor or any other party other than payment in
full of the indebtedness, including without limitation any defense based
on or arising out of the disability of the Borrower, any other guarantor
or any other party, or the unenforceability of the indebtedness or any
part thereof from any cause, or the cessation from any cause of the
liability of the Borrower other than payment in full of the indebtedness.
The Agent or any of the Lenders may, at their election, foreclose on any
security held by the Agent or a
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Lender by one or more judicial or nonjudicial sales, whether or not every
aspect of any such sale is commercially reasonable (to the extent such
sale is permitted by applicable law), or exercise any other right or
remedy the Agent and any Lender may have against the Borrower or any other
party, or any security, without affecting or impairing in any way the
liability of any Guarantor hereunder except to the extent the indebtedness
has been paid. Each of the Guarantors waives any defense arising out of
any such election by the Agent and each of the Lenders, even though such
election operates to impair or extinguish any right of reimbursement or
subrogation or other right or remedy of the Guarantors against the
Borrower or any other party or any security.
(b) Each of the Guarantors waives all presentments, demands for
performance, protests and notices, including without limitation notices of
nonperformance, notice of protest, notices of dishonor, notices of
acceptance of this Guaranty, and notices of the existence, creation or
incurring of new or additional indebtedness. Each Guarantor assumes all
responsibility for being and keeping itself informed of the Borrower's
financial condition and assets, and of all other circumstances bearing
upon the risk of nonpayment of the indebtedness and the nature, scope and
extent of the risks which such Guarantor assumes and incurs hereunder, and
agrees that neither the Agent nor any Lender shall have any duty to advise
such Guarantor of information known to it regarding such circumstances or
risks.
(c) Each of the Guarantors hereby agrees it will not exercise any
rights of subrogation which it may at any time otherwise have as a result
of this Guaranty (whether contractual, under Section 509 of the U.S.
Bankruptcy Code, or otherwise) to the claims of the Lenders against the
Borrower or any other guarantor of the indebtedness of the Borrower owing
to the Lenders (collectively, the "Other Parties") and all contractual,
statutory or common law rights of reimbursement, contribution or indemnity
from any Other Party which it may at any time otherwise have as a result
of this Guaranty until such time as the Loans hereunder shall have been
paid and the Commitments have been terminated. Each of the Guarantors
hereby further agrees not to exercise any right to enforce any other
remedy which the Agent and the Lenders now have or may hereafter have
against any Other Party, any endorser or any other guarantor of all or any
part of the indebtedness of the Borrower and any benefit of, and any right
to participate in, any security or collateral given to or for the benefit
of the Lenders to secure payment of the indebtedness of the Borrower until
such time as the Loans hereunder shall have been paid and the Commitments
have been terminated.
SECTION 14.8 LIMITATION ON ENFORCEMENT.
The Lenders agree that this Guaranty may be enforced only by the action of
the Agent acting upon the instructions of the Required Lenders and that no
Lender shall have any right individually to seek to enforce or to enforce this
Guaranty, it being understood and agreed that such rights and remedies may be
exercised by the Agent for the benefit of the Lenders upon the terms of this
Agreement. The Lenders further agree that this Guaranty may not be enforced
against any director, officer, employee or stockholder of the Guarantors.
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SECTION 14.9 CONFIRMATION OF PAYMENT.
The Agent and the Lenders will, upon request after payment of the
indebtedness and obligations which are the subject of this Guaranty and
termination of the commitments relating thereto, confirm to the Borrower, the
Guarantors or any other Person that the such indebtedness and obligations have
been paid and the commitments relating thereto terminated, subject to the
provisions of Section 14.2.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers, all as of the day and year first
written above.
BORROWER: STERILE RECOVERIES, INC.,
a Florida corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: EVP
GUARANTOR: ▇▇▇▇▇ SURGICAL ENTERPRISES, INC.,
an Ohio corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: EVP
LENDER: FIRST UNION NATIONAL BANK,
individually as a Lender and in
its capacity as Agent
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President