CREDIT AGREEMENT
by and among
XXXXXX XXXXX & COMPANY,
as Borrower,
CERTAIN DOMESTIC SUBSIDIARIES OF THE BORROWER,
as Subsidiary Guarantors,
NATIONSBANK, N.A.,
as Agent,
and
THE BANKS PARTY HERETO
Dated as of June 30, 1998
$120,000,000
TABLE OF CONTENTS
PAGE
ARTICLE I. DEFINITIONS......................................................1
Section 1.1. Definitions............................................1
Section 1.2. Accounting Terms and Determinations....................16
Section 1.3. Other Definitional Provisions..........................16
ARTICLE II. LOANS AND PAYMENTS..............................................17
Section 2.1. Loans..................................................17
Section 2.2. Loan Procedures; Servicing.............................19
Section 2.3. The Banks' Obligations Under the Loans.................20
Section 2.4. Extension and Conversion...............................20
Section 2.5. Letters of Credit......................................21
Section 2.6. Repayment..............................................26
Section 2.7. Interest...............................................26
Section 2.8. Prepayments; Commitment Increase; Reduction or
Termination............................................27
Section 2.9. Fees...................................................29
Section 2.10. Method of Payment.....................................30
Section 2.11. Application of Collections............................30
Section 2.12. Capital Adequacy......................................32
Section 2.13. Inability To Determine Interest Rate..................32
Section 2.14. Illegality............................................33
Section 2.15. Requirements of Law...................................33
Section 2.16. Taxes.................................................34
Section 2.17. Indemnity.............................................36
ARTICLE III. SUBSIDIARY GUARANTY............................................37
Section 3.1 The Subsidiary Guarantee................................37
Section 3.2 Obligations Unconditional...............................37
Section 3.3 Reinstatement...........................................39
Section 3.4 Certain Additional Waivers..............................39
Section 3.5 Remedies................................................39
Section 3.6 Rights of Contribution..................................39
Section 3.7 Continuing Guarantee....................................40
ARTICLE IV. REPRESENTATIONS AND WARRANTIES..................................40
Section 4.1. Organization...........................................40
Section 4.2. Authorization..........................................41
Section 4.3. Validity...............................................41
Section 4.4. Governmental Approvals.................................42
Section 4.5. Litigation.............................................42
Section 4.6. Financial Condition....................................42
Section 4.7. Records, Business Location and Subsidiaries............42
Section 4.8. ERISA..................................................42
Section 4.9. Encumbrances...........................................43
Section 4.10. Margin Stock..........................................43
Section 4.11. Governmental Regulations..............................43
Section 4.12. Taxes.................................................43
Section 4.13. Burdensome Documents..................................43
Section 4.14. Environmental Matters.................................44
Section 4.15 Employee Loans; Stock Plan; Qualified Employee Status..44
Section 4.16 Use of Proceeds........................................44
Section 4.17 Year 2000 Compliance...................................44
Section 4.18 Accuracy and Completeness of Information...............45
ARTICLE V. CONDITIONS PRECEDENT.............................................45
Section 5.1 Conditions Precedent to Closing.........................45
Section 5.2. Conditions Precedent to Loans and Issuance of Letters
of Credit..............................................47
ARTICLE VI. AFFIRMATIVE COVENANTS...........................................48
Section 6.1. Payments Hereunder.....................................48
Section 6.2. Existence and Good Standing; Insurance; Conduct........48
Section 6.3. Taxes and Charges......................................48
Section 6.4. Financial Statements...................................48
Section 6.5 Reports.................................................50
Section 6.6. Loan Balances..........................................50
Section 6.7. Uncertificated Securities..............................50
Section 6.8. Positive Net Worth.....................................51
Section 6.9. Bylaws.................................................51
Section 6.10. Year 2000 Compliance..................................51
Section 6.11. Borrower Guaranty.....................................51
Section 6.12. Employee Pledge Agreements; Employee Pledged Shares...51
Section 6.13. Additional Guaranties, Stock Pledges and Further
Assurances............................................52
Section 6.14. Post-Closing Matters..................................53
ARTICLE VII. NEGATIVE COVENANTS.............................................54
Section 7.1. Indebtedness...........................................54
Section 7.2. Liens..................................................54
Section 7.3. Consolidation, Merger, Sale or Purchase of Assets,
etc....................................................55
Section 7.4. Fiscal Year; Governing Documents.......................56
Section 7.5. Investments............................................56
Section 7.6. Financial Covenants....................................56
Section 7.7. Franchises.............................................57
Section 7.8. Certificated Securities................................57
Section 7.9. Capital Expenditures...................................57
Section 7.10. Transaction with Affiliates...........................57
Section 7.11. Limitation on Restrictions on Subsidiary Dividends
and Other.............................................58
Distributions, etc..................................................58
Section 7.12 Issuance and Sale of Subsidiary Stock..................58
ARTICLE VIII. DEFAULT.......................................................58
Section 8.1. Events of Default......................................58
Section 8.2. Acceleration...........................................60
Section 8.3. Right of Setoff........................................60
ARTICLE IX. AGENCY PROVISIONS...............................................61
Section 9.1 Appointment.............................................61
Section 9.2 Delegation of Duties....................................61
Section 9.3 Exculpatory Provisions..................................62
Section 9.4 Reliance on Communications..............................62
Section 9.5 Notice of Default.......................................63
Section 9.6 Non-Reliance on Agent and Other Banks...................63
Section 9.7 Indemnification.........................................64
Section 9.8 Agent in its Individual Capacity........................64
Section 9.9 Successor Agent.........................................64
ARTICLE X. MISCELLANEOUS....................................................65
Section 10.1. Rights and Waivers....................................65
Section 10.2. Binding Effect; Assignment............................65
Section 10.3. Severability..........................................67
Section 10.4. Interpretation........................................67
Section 10.5. Governing Law; Jury Trial.............................67
Section 10.6. Payment of Expenses and Taxes; Indemnification........67
Section 10.7. Survival of Representations and Warranties............68
Section 10.8. Notices...............................................68
Section 10.9. Execution.............................................69
Section 10.10. Amendments..........................................69
Section 10.11. Relationship of the Parties.........................71
EXHIBITS
Exhibit A Form of Revolving Credit Note
Exhibit B Form of Employee Note
Exhibit C Form of Guaranty
Exhibit D-1 Form of Individual Employee Pledge Agreement
Exhibit D-2 Form of Personal Holding Company Employee Pledge Agreement
Exhibit E Form of Employee Stock Power
Exhibit F Truth in Lending Disclosure Statement
Exhibit G Initial Transaction Statement
Exhibit H Periodic Transaction Statement
Exhibit I Form of Agreement to Employee Pledge Agreements
Exhibit J Form of Notice of Borrowing
Exhibit K Form of Solvency Certificate
Exhibit L Form of Joinder Agreement
SCHEDULES
Schedule 1 Subsidiaries
Schedule 2 Permitted Noncompliance
Schedule 3 Litigation
Schedule 4 Burdensome Documents
Schedule 5 Real Property
Schedule 6 Indebtedness
Schedule 7 Investments
CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this "Agreement", or this "Credit Agreement") is
entered into as of this 30th day of June, 1998, by and among XXXXXX XXXXX &
COMPANY, a Delaware corporation (the "Borrower"), certain Domestic Subsidiaries
of the Borrower named herein as "Subsidiary Guarantors" and such other Domestic
Subsidiaries of the Borrower as may become a party hereto (the "Subsidiary
Guarantors"), the banks named herein and such other banks as may become a party
hereto (the "Banks") and NationsBank, N.A., a national banking association and
one of the Banks hereunder, as agent for the Banks (in such capacity, together
with any successor in such capacity, the "Agent").
WHEREAS, an $80 million credit facility was established in favor of the
Borrower and certain of its subsidiaries and affiliates pursuant to the terms of
that Third Amended and Restated Credit and Security Agreement dated as of
January 5, 1996 (as amended and modified, the "Prior Credit Agreement"), among
the Borrower and certain of its subsidiaries and affiliates identified therein,
the banks identified therein and the Agent;
WHEREAS, Borrower has requested, and the Banks have agreed, to amend
and modify the Prior Credit Agreement pursuant to the terms set forth herein;
WHEREAS, this Agreement is given in amendment to, restatement of and
substitution for the Prior Credit Agreement.
NOW, THEREFORE, in consideration of their mutual covenants and
agreements contained herein, the parties hereby covenant and agree, and the
Prior Agreement is hereby amended and restated in its entirety, as follows:
ARTICLE I. DEFINITIONS
Section 1.1. Definitions.
For purposes of this Agreement, terms bearing initial capitals and
defined in various sections hereof shall have the meanings stated therein; and
the following terms shall have the meanings stated below, except as the context
otherwise requires:
"Additional Credit Party" means each Person that becomes a Subsidiary
Guarantor after the Closing Date by execution of a Joinder Agreement.
"Adjusted Base Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest whole multiple of 1/100 of 1%) equal to
the greater of (a) the Federal Funds Rate in effect on such day plus 1/2 of
1.0% or (b) the Prime Rate in effect on such day, minus 1.0%. 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 Adjusted
Base Rate shall be determined without regard to clause (a) of the first sentence
of this definition until the circumstances giving rise to such inability no
longer exist. Any change in the Adjusted 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 the Federal Funds Rate, respectively.
"Affiliate" means, as to any Person, any other Person which directly or
indirectly controls, is under common control with, or is controlled by, such
Person.
"Agent" has the meaning stated on page 1 hereof and, with respect to
the Employee Loans, shall include NationsBank in its individual capacity.
"Agent's Fee" has the meaning stated in Section 2.9(c).
"Agent's Fee Letter" means the letter agreement between the Agent and
the Borrower dated as of April 28, 1998.
"Aggregate Revolving Credit Commitment" has the meaning stated in
Section 2.1(a).
"Agreement" has the meaning stated on page 1 hereof.
"Applicable Percentage" means, for purposes of calculating the
applicable interest rate for any day for any Eurodollar Loan or Base Rate Loan
or the applicable Unused Fee or the LOC Fee for any day for purposes of Section
2.9, the appropriate applicable percentage corresponding to the Leverage Ratio
in effect as of the most recent Calculation Date:
Pricing Leverage Applicable Applicable Applicable Applicable
Level Ratio Percentage Percentage Percentage Percentage
for for for for
Eurodollar LOC Fee Unused Fee Base Rate
Loans Loans
------------------------------------------------------------------------------
V Greater than or equal to 1.75% 1.75% 0.50% 0.50%
2.25 to 1.0
IV Less than 2.25 to 1.0 but 1.50% 1.50% 0.45% 0%
greater than or equal to
1.75 to 1.0
III Less than 1.75 to 1.0 but 1.25% 1.25% 0.375% 0%
greater than or equal to
1.25 to 1.0
II Less than 1.25 to 1.0 but 1.00% 1.00% 0.375% 0%
greater than or equal to
0.75 to 1.0
I Less than 0.75 0.75% 0.75% 0.30% 0%
Determination of the appropriate Applicable Percentages for the Loans
based on the Leverage Ratio shall be made as of each Calculation Date. The
Leverage Ratio in effect as of a Calculation Date shall establish the Applicable
Percentages that shall be effective as of the date designated by the Agent as
the Applicable Percentage Change Date; provided, however, that a new Applicable
Percentage shall apply to outstanding Eurodollar Loans only if and when such
Eurodollar Loans are extended into new Interest Periods. The Agent shall
determine the Applicable Percentages as of each Calculation Date and shall
promptly notify the Borrower and the Banks of the Applicable Percentages so
determined and of the Applicable Percentage Change Date. The Applicable
Percentage for the purpose of calculating LOC Fees shall be fixed for the term
of each related Letter of Credit based on the Applicable Percentage in effect
for LOC Fees at the time of issuance thereof. Any renewal or extension of a
Letter of Credit for the purpose of calculating the LOC Fee shall be considered
a new issuance thereof. Such determinations by the Agent of the Applicable
Percentages shall be conclusive absent demonstrable error. The initial
Applicable Percentages shall be based on Pricing Level III until the first
Applicable Percentage Change Date to occur with respect to the Required
Financial Information relating to the fiscal quarter ending September 30, 1998.
"Applicable Percentage Change Date" means, with respect to any
Calculation Date, a date designated by the Agent that is not more than fifteen
(15) Business Days after the receipt by the Agent of the Required Financial
Information for such Calculation Date; provided that in the event the Required
Financial Information is not delivered by the date required by Section 6.4,
notwithstanding the definition of Applicable Percentage herein, the Applicable
Percentage shall be based on Pricing Level V until such time as the Required
Financial Information is delivered.
"Applicable Rate" means (i) for all periods prior to and including
January 5, 2001, the Adjusted Base Rate and (ii) for all periods thereafter (a)
if no Cash Flow Deficiency exists as of the immediately preceding Calculation
Date, the Adjusted Base Rate and (b) if a Cash Flow Deficiency exists as of the
immediately preceding Calculation Date, the Prime Rate.
"Authorized Financial Officer" means any of the Borrower's Treasurer,
Controller or Vice President and Chief Financial Officer.
"Bank" and "Banks" have the meanings stated on page 1 hereof and shall
include any assignees thereof in accordance with Section 10.2.
"Base Rate" means, for any day, the rate per annum (rounded upwards, if
necessary, to the nearest whole multiple of 1/100 of 1%) equal to the greater of
(a) the Federal Funds Rate in effect on such day plus 1/2 of 1% or (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 (a) 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 the Federal Funds Rate, respectively.
"Base Rate Loan" means any Loan bearing interest at a rate determined
by reference to the Base Rate.
"Borrower" means Xxxxxx Xxxxx & Company, a Delaware corporation.
"Borrower Guaranty" has the meaning stated in Section 6.11.
"Business Day" means a day other than a Saturday, Sunday or other day
on which commercial banks in Charlotte, North Carolina or Bethesda, Maryland are
authorized or required by law to close, except that, when used in connection
with a Revolving Credit Loan that is a Eurodollar Loan, such day shall also be a
day on which dealings between banks are carried on in U.S. dollar deposits in
London, England and New York, New York.
"Calculation Date" means the last day of each fiscal quarter of the
Borrower.
"Canadian Loan Program" means the Borrower's employee loan program
established for the benefit of its Canadian employees.
"Capital Expenditures" means amounts expended for (i) the acquisition
of assets, whether tangible or intangible, having a useful life in excess of one
year and not intended for resale in the normal course of business, including but
not limited to land, buildings, fixtures, equipment and computer software, (ii)
additions or improvements to or rebuilding of existing assets, (iii)
improvements to leased property, and (iv) such other purposes typically and
customarily considered to be capital expenditures.
"Capital Lease" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
accordance with GAAP, is or should be accounted for as a capital lease on the
balance sheet of that Person.
"Cash Equivalents" means (i) demand deposits in Selected Banks; (ii)
marketable obligations of the United States or Canada; (iii) marketable
obligations guaranteed by or insured by the United States or Canada, or those
for which the full faith and credit of the United States or Canada is pledged
for the repayment of principal and interest thereon; (iv) marketable obligations
issued, guaranteed, or fully insured by any agency, instrumentality, or
corporation of the United States or Canada established or to be established by
the Congress or Parliament, respectively, for which the credit of such agency,
instrumentality, or corporation is pledged for the repayment of the principal
and interest thereof; (v) marketable general obligations of a state, a territory
or a possession of the United States, or any political subdivision of any of the
foregoing, or the District of Columbia (each, in this subsection, an "Entity"),
unconditionally secured by the full faith and credit of such Entity, if such
Entity has general taxing authority and the power to levy such taxes as may be
required for the payment of principal and interest thereof, and that such
obligations have a credit rating equal to at least Baa issued by Standard &
Poor's Corporation ("S&P") or BBB issued by Xxxxx'x Investors Service, Inc.
("Moody's"); (vi) domestic and LIBOR, negotiable time and variable rate
certificates of deposit issued by Selected Banks; (vii) marketable bankers'
acceptances and finance bills accepted by Selected Banks; (viii) prime
commercial paper having a credit rating equal to at least A-2 issued by S&P, P-2
issued by Moody's, or Xxxx-2 issued by Duff & Xxxxxx Inc.; (ix) marketable
corporate debt securities having an A credit rating issued by either S&P or
Moody's; and (x) repurchase, reverse repurchase agreements and security lending
agreements collateralized by securities of the type described in clauses (ii),
(iv), (viii) and (ix).
"Cash Flow Deficiency" means and shall exist at any time when the
Leverage Ratio of the Borrower, on a consolidated basis, is 2.5 or greater.
"Change of Control" means if any Person or two or more Persons acting
in concert shall have acquired beneficial ownership, directly or indirectly, of,
or shall have acquired by contract or otherwise, or shall have entered into a
contract or arrangement that, upon consummation, will result in its or their
acquisition of or control over, Voting Stock of the Borrower (or other
securities convertible into such Voting Stock) representing 20% or more of the
combined voting power of all Voting Stock of the Borrower. As used herein,
"beneficial ownership" shall have the meaning provided in Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange Act of 1934.
"Closing Date" means the later of the date stated on the first page
hereof and the date on which all of the conditions precedent stated in Section
5.1 have been satisfied and all of the parties have executed this Agreement.
"Collateral" has the meaning given to such term in the Credit Party
Pledge Agreement and the Security Agreement.
"Collections" means all monies or other assets received by the Agent or
any Bank, as repayment of amounts advanced under the Notes, on account of the
Subsidiary Guaranteed Obligations, as proceeds of Collateral or otherwise, for
credit against principal, interest, commitment fees, costs or expenses, or other
amounts due under the Notes.
"Consolidated EBITDA" means, for any period of calculation for the
Consolidated Group, the sum of (i) Consolidated Net Income for such period, plus
(ii) to the extent deducted in the calculation of Consolidated Net Income, the
sum of interest expense, income taxes, depreciation and amortization, plus (iii)
nonrecurring cash and non-cash charges incurred in connection with the Well
Spring Joint Venture write-down, determined on a consolidated basis in
accordance with GAAP.
"Consolidated EBITDAR" means, for any period of calculation for the
Consolidated Group, the sum of (i) Consolidated EBITDA for such period and (ii)
Lease Expenses for such period, determined on a consolidated basis in accordance
with GAAP.
"Consolidated Funded Debt" means Funded Debt of the Consolidated Group
determined on a consolidated basis in accordance with GAAP.
"Consolidated Group" means the Borrower and its consolidated
subsidiaries, as determined in accordance with GAAP.
"Consolidated Net Income" means for any period of calculation for the
Consolidated Group, net income on a consolidated basis determined in accordance
with GAAP.
"Controller" means the person holding the office, under whatever title,
most closely corresponding to the typical duties of a controller of a
corporation or the person acting in such capacity.
"Credit Documents" means a collective reference to this Credit
Agreement, the Revolving Credit Notes, the Employee Notes, the LOC Documents,
the Borrower Guaranty, the Credit Party Pledge Agreement, the Security
Agreement, the Employee Pledge Agreements, the Agent's Fee Letter, and all other
related agreements and documents issued or delivered hereunder or thereunder or
pursuant hereto or thereto.
"Credit Party Pledge Agreement" means the Pledge Agreement dated as of
the Closing Date given by the Credit Parties to the Agent, to secure the
obligations hereunder, as amended and modified.
"Credit Party" means any of the Borrower and the Subsidiary Guarantors.
"CSAP" means the Borrower's Canadian Separation Allowance Plan
established for the benefit of the Borrower's Canadian employees in connection
with the Canadian Loan Program.
"Defaulting Bank" means, at any time, any Bank that, at such time, (i)
has failed to make a Loan or purchase a participation interest required pursuant
to the terms of this Credit Agreement within one Business Day of when due, (ii)
other than as set forth in (i) above, has failed to pay to the Agent or any Bank
an amount owed by such Bank pursuant to the terms of the Credit Agreement or any
other of the Credit Documents within one Business Day of when due, or (iii) has
been deemed insolvent or has become subject to a bankruptcy or insolvency
proceeding or to a receiver, trustee or similar proceeding or with respect to
which (or with respect to any of assets of which) a receiver, trustee or similar
official has been appointed.
"Domestic Subsidiary" means any Subsidiary which is incorporated or
organized under the laws of any State of the United States or the District of
Columbia.
"Employee Loan Commitment" has the meaning stated in Section 2.1(d).
"Employee Loan Commitment Period" has the meaning stated in Section
2.1(e).
"Employee Loan Participation" has the meaning stated in Section 2.1(d).
"Employee Loan" and "Employee Loans" have the meanings stated in
Section 2.1(d).
"Employee Note" and "Employee Notes" have the meanings stated in
Section 2.1(g).
"Employee Pledge Agreements" has the meaning stated in Section 6.12(a).
"Employee Pledged Shares" has the meaning stated in Section 6.12(a).
"Employee Stock Powers" has the meaning stated in Section 6.12(b).
"ERISA" has the meaning stated in Section 4.8.
"Eurodollar Loan" means any Revolving Credit Loan bearing interest at a
rate determined by reference to the Eurodollar Rate.
"Eurodollar Rate" means, for the Interest Period for each Eurodollar
Loan comprising part of the same borrowing (including conversions, extensions
and renewals), a per annum interest rate determined pursuant to the following
formula:
Eurodollar Rate = Interbank Offered Rate
1 - Eurodollar Reserve Percentage
"Eurodollar Reserve Percentage" means for any day, that percentage
(expressed as a decimal) which is in effect from time to time under Regulation D
of the Board of Governors of the Federal Reserve System (or any successor), as
such regulation may be amended from time to time or any successor regulation, as
the maximum reserve requirement (including, without limitation, any basic,
supplemental, emergency, special, or marginal reserves) applicable with respect
to Eurocurrency liabilities as that term is defined in Regulation D (or against
any other category of liabilities that includes deposits by reference to which
the interest rate of Eurodollar Loans is determined), whether or not a Bank has
any Eurocurrency liabilities subject to such reserve requirement at that time.
Eurodollar Loans shall be deemed to constitute Eurocurrency liabilities and as
such shall be deemed subject to reserve requirements without benefits of credits
for proration, exceptions or offsets that may be available from time to time to
a Bank. The Eurodollar Rate shall be adjusted automatically on and as of the
effective date of any change in the Eurodollar Reserve Percentage.
"Event of Default" has the meaning stated in Section 8.1.
"Federal Funds Rate" means, for any day, the rate of interest per annum
(rounded upwards, if necessary, to the nearest whole multiple of 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 and (B) if no such rate is
so published on such next succeeding Business Day, the Federal Funds Rate for
such day shall be the average rate quoted to the Agent on such day on such
transactions as determined by the Agent.
"Fixed Charge Coverage Ratio" means the ratio of (i) Consolidated
EBITDAR to (ii) the sum of interest expense plus Lease Expenses plus scheduled
maturities of Funded Debt (excluding Employee Loans), in each case on a
consolidated basis determined in accordance with GAAP.
"Foreign Subsidiary" means a Subsidiary which is not a Domestic
Subsidiary.
"Funded Debt" means, with respect to any Person, without duplication,
(a) all Indebtedness of such Person other than the Indebtedness of such Person
of the types referred to in clauses (iv), (v), (vii), (ix), (x) and (xi) of the
definition of "Indebtedness" set forth in this Section 1.1, (b) all Indebtedness
of another Person of the type referred to in clause (a) above secured by (or for
which the holder of such Funded Debt has an existing right, contingent or
otherwise, to be secured by) any Lien on, or payable out of the proceeds of
production from, property owned or acquired by such Person, whether or not the
obligations secured thereby have been assumed, (c) all guaranty obligations of
such Person with respect to Indebtedness of the type referred to in clause (a)
above of another Person and (d) Indebtedness of the type referred to in clause
(a) above of any partnership or unincorporated joint venture in which such
Person is a general partner or a joint venturer (but only to the extent to which
such Person's assets are at risk in such joint venture).
"GAAP" means generally accepted accounting principles in the United
States applied on a consistent basis.
"General Counsel" means the person holding the office, under whatever
title, most closely corresponding to the typical duties of a general counsel of
a corporation or the person acting in such capacity.
"General Exceptions" has the meaning stated in Section 4.3.
"Governmental Authority" means any Federal, state, local or foreign
court or governmental agency, authority, instrumentality or regulatory body.
"Incipient Default" has the meaning stated in Section 5.2(a).
"Indebtedness" means, with respect to any Person, without duplication.
(i) all obligations of such Person for borrowed money, (ii) 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), (iii) 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, (iv) all obligations of such Person under
take-or-pay or similar arrangements or under commodities agreements, (v) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on,
or payable out of the proceeds of production from, property owned or acquired by
such Person, whether or not the obligations secured thereby have been assumed,
(vi) the principal portion of all obligations of such Person under Capital
Leases, (vii) all obligations of such Person in respect of Interest Rate
Protection Agreements and/or any other hedging or interest rate protection
agreements or other arrangements, (viii) 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), (ix) all preferred stock issued by such Person and
required by the terms thereof to be redeemed, or for which mandatory sinking
fund payments are due, by a fixed date, (x) the principal portion of all
obligations of such Person under synthetic lease transactions and other similar
offbalance sheet financing arrangements, and (xi) all guaranty and other
contingent obligations of such Person in respect of Indebtedness as defined in
this definition. The Indebtedness of any Person shall include the Indebtedness
of any partnership or joint venture in which such Person is a general partner or
a joint venturer (but only to the extent to which such Person's assets are at
risk in such joint venture).
"Interbank Offered Rate" means, for the Interest Period for each
Eurodollar Loan comprising part of the same borrowing (including conversions,
extensions and renewals), a per annum interest rate (rounded upwards, if
necessary, to the nearest whole multiple of 1/100 of 1%) equal to the rate of
interest, determined by the Agent on the basis of the offered rates for deposits
in dollars for a period of time corresponding to such Interest Period (and
commencing on the first day of such Interest Period), appearing on Telerate Page
3750 (or, if, for any reason, Telerate Page 3750 is not available, the Reuters
Screen LIBO Page) as of approximately 11:00 A.M. (London time) two (2) Business
Days before the first day of such Interest Period. As used herein, "Telerate
Page 3750" means the display designated as page 3750 by Dow Xxxxx Markets, Inc.
(or such other page as may replace such page on that service for the purpose of
displaying the British Bankers Association London interbank offered rates) and
"Reuters Screen LIBO Page" means the display designated as page "LIBO" on the
Reuters Monitor Money Rates Service (or such other page as may replace the LIBO
page on that service for the purpose of displaying London interbank offered
rates of major banks).
"Interest Payment Date" means (i) as to any Employee Loan, the third
Business Day of the month following the immediately preceding Calculation Date,
any date of repayment of principal of such Loan and the relevant Termination
Date, (ii) as to any Revolving Credit Loan which is a Base Rate Loan, the third
Business Day of the month immediately following the end of each preceding month,
any date of repayment of principal of such Loan and the relevant Termination
Date, and (iii) as to any Revolving Credit Loan which is a Eurodollar Loan, the
last day of each Interest Period for such Loan, any date of repayment of
principal of such Loan and the relevant Termination Date, and in addition where
the applicable Interest Period is more than three months, then also the date
three months from the beginning of the Interest Period, and each three months
thereafter. If an Interest Payment Date falls on a date which is not a Business
Day, such Interest Payment Date shall be deemed to be the next succeeding
Business Day, except that in the case of Eurodollar Loans where the next
succeeding Business Day falls in the next succeeding calendar month, then the
next preceding Business Day.
"Interest Period" means, as to Revolving Credit Loans that are
Eurodollar Loans, a period of one, two, three or six month's duration, as the
Borrower may elect, commencing in each case, on the date of the borrowing
(including conversions, extensions and renewals); provided, however, (A) if any
Interest Period would end on a day which is not a Business Day, such Interest
Period shall be extended to the next succeeding Business Day (except that in the
case of Eurodollar Loans where the next succeeding Business Day falls in the
next succeeding calendar month, then on the next preceding Business Day), (B) no
Interest Period shall extend beyond the Termination Date, and (C) where an
Interest Period begins on a day for which there is no numerically corresponding
day in the calendar month in which the Interest Period is to end, such Interest
Period shall end on the last day of such calendar month.
"Interest Rate Protection Agreement" means an interest rate swap, cap
or collar agreement or similar arrangement between the Borrower and a Bank, or
an Affiliate of a Bank, providing for the transfer or mitigation of interest
risks either generally or under specific contingencies.
"Interest Swap Provider" means a Bank, or an Affiliate of a Bank, party
to an Interest Rate Protection Agreement with the Borrower.
"Investment" in any Person by the Borrower means: (i) the amount paid
or committed to be paid, or the value of property or services contributed or
committed to be contributed, by the Borrower for or in connection with the
acquisition by the Borrower of any stock, bonds, note, debentures, partnership
or other ownership interests or other securities of or equity in such Person;
and (ii) the amount of any advance, loan or extension of credit to, or guaranty
or other similar obligation with respect to any Indebtedness of, such Person by
the Borrower and (without duplication) any amount committed to be advanced,
loaned, or extended to, or the payment of which is committed to be assured by a
guaranty or similar obligation for the benefit of, such Person by the Borrower.
"Issuing Bank" means NationsBank.
"Issuing Bank Fees" has the meaning stated in Section 2.9.
"Joinder Agreement" means a Joinder Agreement substantially in the form
of Exhibit L hereto, executed and delivered by an Additional Credit Party in
accordance with the provisions of Section 6.13.
"KPMG Acquisition" means the acquisition by the Borrower of the New
York, Boston and Cleveland retirement and healthcare consulting practices of
KPMG Peat Marwick
"Lease Expenses" means, for any period, all rental payments due under
leases for such period, irrespective of the term of any thereof, determined in
accordance with GAAP.
"Letter of Credit" means any irrevocable, standby letter of credit
issued by the Issuing Bank for the account of the Borrower or any subsidiary in
accordance with the terms of Section 2.5 and those letters of credit outstanding
on the Closing Date and listed on Schedule 6 hereto.
"Leverage Ratio" means the ratio of (i) Consolidated Funded Debt to
(ii) Consolidated EBITDA. For purposes of the Employee Notes, the Debt to Cash
Flow Ratio referred to therein used to calculate Cash Flow Deficiency referred
to therein shall be the Leverage Ratio as used herein.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, security interest, encumbrance, lien (statutory or otherwise),
preference, priority or charge of any kind (including any agreement to give any
of the foregoing, any conditional sale or other title retention agreement, any
financing or similar statement or notice filed under the Uniform Commercial Code
as adopted and in effect in the relevant jurisdiction or other similar recording
or notice statute, and any lease in the nature thereof).
"Loan" and "Loans" have the meanings stated in Section 2.2(a) herein
and shall include all loans made under the Prior Agreement which are outstanding
on the date hereof.
"LOC Documents" means, with respect to any Letter of Credit, such
Letter of Credit, any amendments thereto, any documents delivered in connection
therewith, any application therefor, and any agreements, instruments, guarantees
or other documents (whether general in application or applicable only to such
Letter of Credit) governing or providing for (i) the rights and obligations of
the parties concerned or at risk or (ii) any collateral security for such
obligations.
"LOC Fees" has the meaning stated in Section 2.9.
"LOC Obligations" means, at any time, the sum of (i) the maximum amount
which is, or at any time thereafter may become, available to be drawn under
Letters of Credit then outstanding, assuming compliance with all requirements
for drawings referred to in such Letters of Credit plus (ii) the aggregate
amount of all drawings under Letters of Credit honored by the Issuing Bank but
not theretofore reimbursed.
"Majority Banks" means the Banks the Ratable Shares of which aggregate
51 percent or more of all Ratable Shares at any time, or if the Total
Commitments have been terminated, Banks having more than 51% of the aggregate
principal amount of the Obligations outstanding (taking into account in each
case participation interests or obligation to participate therein); provided
that the Ratable Share of, and outstanding principal amount of Obligations
(taking into account participation interests therein) owing to, a Defaulting
Bank shall be excluded for purposes hereof in making a determination of Majority
Banks.
"Margin Stock Event" has the meaning stated in Section 2.8(b)(ii).
"Material Adverse Effect" means a material adverse effect on (i) the
financial condition, business, properties, operations or prospects of the
Borrower and its consolidated subsidiaries taken as a whole, (ii) the ability of
the Borrower to perform any material obligation under the Credit Documents to
which it is a party or (iii) the rights and remedies of the Banks under the
Credit Documents.
"Material Domestic Subsidiary" means a Domestic Subsidiary which is a
Material Subsidiary.
"Material Subsidiary" means a Subsidiary of the Borrower (i) the
accounts receivable of which comprise two percent (2%) or more of the Borrower's
consolidated accounts receivable or (ii) the assets of which comprise two
percent (2%) or more of the Borrower's consolidated assets.
"Maturity Date" means (i) with respect to the Revolving Credit
Commitments, June 30, 2003, and (ii) with respect to the Employee Loan
Commitments, June 30, 2001.
"NationsBank" means NationsBank, N.A., and its successors.
"Net Worth" means, for any period of calculation, the redemption value
of the total issued and outstanding shares of the Borrower's redeemable common
stock, as adjusted for redemption value greater than amounts paid by the
Borrower's shareholders, for such period, plus retained earnings plus or minus
cumulative translation adjustments, if any, for such period.
"Notes" has the meaning stated in Section 2.1(g).
"Notice of Borrowing" has the meaning stated in Section 5.2(b) hereof
and shall be in substantially the form of Exhibit J.
"Obligations" means, collectively, all of the obligations of the
Borrower, the Subsidiary Guarantors and the Qualified Employees under the Credit
Documents.
"Official" has the meaning stated in Section 8.1(e).
"PBGC" has the meaning stated in Section 4.8.
"Permitted CSAP Loan" means a loan extended under the Canadian Loan
Program to one of the Borrower's Canadian employees for which a Separation
Allowance Account is maintained having a balance not in excess of 90% of the
dollar amount credited from time to time to such account.
"Permitted Investments" means Investments which are either (i) cash and
Cash Equivalents; (ii) accounts receivable created, acquired or made in the
ordinary course of business and payable or dischargeable in accordance with
customary trade terms; (iii) Investments consisting of stock, obligations,
securities or other property received in settlement of accounts receivable
(created in the ordinary course of business) from bankrupt obligors; (iv)
Investments existing as of the Closing Date and to be set forth on Schedule 7
hereto within 30 days of the Closing Date, (v) guaranty and other contingent
obligations permitted by Section 7.1; (vi) acquisitions and other Investments
permitted by Section 7.3(c); (vii)(A) advances or loans to employees, directors,
officers or agents not to exceed $200,000 with respect to each such loan, (B)
short term loans to new or relocating employees to cover moving and other
relocation costs not to exceed $500,000 with respect to each such loan, which
loans under both clauses (A) and (B) shall not exceed in the aggregate at any
time outstanding $2,500,000; and (viii) Permitted CSAP Loans not to exceed
$6,000,000 in the aggregate at any time outstanding.
"Permitted Liens" means (i) encumbrances granted to the Agent and the
Banks hereunder; (ii) encumbrances for taxes not yet due or contested in good
faith by appropriate proceedings and with respect to which adequate reserves are
being maintained in accordance with GAAP; (iii) encumbrances arising out of
equipment leases in the ordinary course of business; (iv) encumbrances arising
out of the purchase of equipment in the ordinary course of business and limited
to the specific equipment purchased, provided, however, that the underlying
Indebtedness is permitted under Section 7.1(d) hereof; (v) pledges or deposits
in the ordinary course of business in connection with worker's compensation or
other forms of governmental insurance or benefits or to secure performance of
statutory obligations, leases and contracts (other than for borrowed money)
entered into in the ordinary course of business or to secure obligations on
surety or appeal bonds; (vi) encumbrances of mechanics and other similar
encumbrances arising in the ordinary course of business in respect of
obligations not delinquent or being contested in good faith and by appropriate
proceedings and with respect to which adequate reserves are being maintained in
accordance with GAAP; and (vii) encumbrances arising in the ordinary course of
business for sums being contested in good faith and by appropriate proceedings
and with respect to which adequate reserves are being maintained in accordance
with GAAP, or for sums not due, and in either case not involving any deposits or
advances for borrowed money or the deferred purchase price of property or
services.
"Person" means any individual, corporation, partnership, joint venture,
limited liability company, trust, unincorporated organization or a government or
any agency or political subdivision thereof.
"Plan" has the meaning stated in Section 4.8.
"Prime Rate" means the per annum rate of interest established from time
to time by the Agent at its principal office in Charlotte, North Carolina as its
Prime Rate. Any change in the interest rate resulting from a change in the Prime
Rate shall become effective as of 12:01 a.m. of the Business Day on which each
change in the Prime Rate is announced by the Agent. The Prime Rate is a
reference rate used by the Agent in determining interest rates on certain loans
and is not intended to be the lowest rate of interest charged on any extension
of credit to any debtor.
"Prior Agreement" has the meaning stated in the recitals hereof.
"Pro Forma Basis" means, with respect to any transaction, that such
transaction shall be deemed to have occurred as of the first day of the four
fiscal-quarter period ending as of the most recent fiscal quarter end preceding
the date of such transaction.
"Qualified Employees" means "Eligible Purchasers" as such term is
defined in Section 9.9(a) of the Borrower's Bylaws excluding therefrom outside
directors, Xxxxxx Xxxxx Partners and any other Person permitted to own stock
pursuant to the Borrower's Bylaws which is not a natural person.
"Ratable Share" has the meaning stated in Section 2.1(a) hereof.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Required Financial Information" means, with respect to the applicable
Calculation Date, (i) the financial statements of the Borrower required to be
delivered pursuant to Section 6.4 for the fiscal period or quarter ending as of
such Calculation Date, and (ii) the certificate of an Authorized Financial
Officer required by Section 6.4 to be delivered with the financial statements
described in clause (i) above.
"Requirement of Law" means, as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or to which any of its material property is
subject.
"Revolving Credit Commitment" has the meaning stated in Section 2.1(a).
"Revolving Credit Loan Commitment Period" has the meaning stated in
Section 2.1(b).
"Revolving Credit Loans" has the meaning stated in Section 2.1(a).
"Revolving Credit Note" has the meaning stated in Section 2.1(c).
"Security Agreement" means the Security Agreement dated as of the
Closing Date given by the Borrower to the Agent to secure the obligations
hereunder, as amended and modified.
"Selected Banks" (A) means the Banks which are signatories to this
Agreement and (B) the one hundred largest commercial banks which either are
United States national banking associations or are chartered under the laws of a
state of the United States and which have ratings by Xxxxxxxx BankWatch, Inc.
(or successor) no lower than the following: (i) for the largest fifty banks in
asset size: "C"; and (ii) for the next fifty banks in asset size: "B" and (C)
banks chartered under the laws of Canada and of a quality and/or rating
equivalent to or not less than the rating identified in (B)(ii) above.
"Separation Allowance Account" means the account established for the
Borrower's qualified Canadian employees to which, from time to time, the
Borrower may credit dollar amounts allocated to such employee based on such
employee's share in the CSAP. For the avoidance of doubt, no such account shall
be funded with actual dollars, but the dollar amount credited thereto shall be
reflected as a liability on the balance sheet of the Borrower.
"Subsidiaries" means the Persons identified on Schedule 1 and any other
Person in which, at any time subsequent to the Closing Date, the Borrower,
directly or indirectly, beneficially or legally, (i) owns more than fifty
percent (50%) of the stock having ordinary voting power for the election of
Directors, in the case of a corporation, or (ii) owns more than fifty percent
(50%) of the ownership interests of a partnership, limited liability company,
joint venture or other Person or is a general partner of a partnership.
"Subsidiary Guaranteed Obligations" means, as to each Subsidiary
Guarantor, without duplication, (i) all obligations of the Borrower (including
interest accruing after an event described in Section 8.1(e), regardless of
whether such interest is allowed as a claim under the Federal Bankruptcy Code)
to the Banks and the Agent, whenever arising, under this Credit Agreement, the
Notes or the other Credit Documents, and (ii) all liabilities and obligations,
whenever arising, owing from the Borrower to any Bank, or any Affiliate of a
Bank, arising under any Interest Rate Protection Agreement relating to
obligations hereunder.
"Subsidiary Guarantor" means each of the Domestic Subsidiaries of the
Borrower identified as a "Subsidiary Guarantor" on the signature pages hereto,
and each other Person which may hereafter become a Subsidiary Guarantor by
execution of a Joinder Agreement, together with their successors and permitted
assigns
"Termination Date" means (i) as to the Revolving Credit Loans, the
Maturity Date and (ii) as to any Employee Loan, the date of the final maturity
of such Employee Loan.
"Total Commitment" has the meaning stated in Section 2.1(a).
"Treasurer" means the person holding the office, under whatever title,
most closely corresponding to the typical duties of a treasurer of a corporation
or the person acting in such capacity.
"Unused Aggregate Total Commitment" means, for any date of calculation,
the amount by which (a) the aggregate of the then applicable Total Commitments
exceeds (b) the sum of (i) the outstanding aggregate principal amount of all
Revolving Credit Loans, (ii) the outstanding aggregate principal amount of all
Employee Loans and (iii) the LOC Obligations outstanding.
"Unused Fee" has the meaning stated in Section 2.9(b).
"Unused Fee Calculation Period" has the meaning stated in Section
2.9(b).
"Vice President and Chief Financial Officer" means the person holding
the office, under whatever title, most closely corresponding to the typical
duties of a chief financial officer of a corporation or the person acting in
such capacity.
"Voting Stock" means, with respect to any Person, capital stock issued
by such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even though the right so to vote
has been suspended by the happening of such a contingency.
"Wellspring Joint Venture" means the joint venture known as Wellspring
Resources, LLC, which was created by the Borrower and State Street Bank and
Trust Company effective March 31, 1996, with each of the Borrower and State
Street Bank and Trust Company having been, initially, a 50% co-owner in such
joint venture.
"Year 2000 Compliant" has the meaning stated in Section 4.17.
Section 1.2. Accounting Terms and Determinations.
Unless otherwise specified herein, all financial and accounting terms
used herein shall be interpreted, all accounting determinations hereunder shall
be made, and all financial statements required to be delivered hereunder shall
be prepared in accordance with GAAP, applied on a basis consistent (except for
changes concurred in by the Borrower's independent public accountants) with the
most recent audited consolidated financial statements of the Borrower and its
consolidated subsidiaries delivered to the Banks.
Section 1.3. Other Definitional Provisions.
References in this Agreement to "Articles", "Sections", "Schedules" or
"Exhibits" shall be to Articles, Sections, Schedules or Exhibits of or to this
Agreement unless otherwise specifically provided. Wherever used herein, the
singular number shall include the plural, and vice versa, whenever appropriate
to protect the interests of the Banks, and the conjunctive shall include the
disjunctive, and vice versa, whenever so appropriate. "Include", "includes" and
"including" shall be deemed to be followed by "without limitation" whether or
not they are in fact followed by such words or words of like import. "Writing",
"written" and comparable terms refer to printing, typing and other means of
reproducing words in a visible form. References to any agreement or contract are
to such agreement or contract as amended, modified or supplemented from time to
time in accordance with the terms hereof and thereof. References to any Person
include the successors and assigns of such Person. References "from" or
"through" any date mean, unless otherwise specified, "from and including" or
"through and including", respectively.
ARTICLE II. LOANS AND PAYMENTS
Section 2.1. Loans.
(a) Revolving Credit Commitment. Each of the Banks hereby
severally agrees to lend and the Borrower agrees to accept, subject to
the terms and conditions of this Agreement, revolving credit loans not
to exceed at any one time outstanding to the Borrower, together with
the LOC Obligations, such Bank's Ratable Share of $95,000,000 (the
"Aggregate Revolving Credit Commitment," and each Bank's Ratable Share
of the Aggregate Revolving Credit Commitment being a "Revolving Credit
Commitment"), as such amount may be increased or reduced from time to
time pursuant to Section 2.8. Each Bank's Revolving Credit Commitment,
as such amount may be increased or reduced from time to time pursuant
to Section 2.8, is set forth beneath such Bank's name on the signature
pages hereof opposite the caption "Revolving Credit Commitment." As
used herein, "Ratable Share" shall mean the proportion that a Bank's
Total Commitment bears to the Total Commitments of all of the Banks. As
to any Bank, "Total Commitment" shall mean the amount set forth beneath
such Bank's name on the signature pages hereof opposite the caption
"Total Commitment," as such amount may be reduced from time to time
pursuant to Section 2.8. A "Revolving Credit Loan" shall mean a
revolving credit loan made by a Bank to the Borrower pursuant to this
Section 2.1, and "Revolving Credit Loans" shall mean the Revolving
Credit Loans of all the Banks to the Borrower.
(b) Availability of Revolving Credit Loans. Revolving Credit
Loans will be made in accordance with Section 2.2 and may be requested
during the period beginning on the Closing Date and ending on the
Maturity Date for Revolving Credit Loans (the "Revolving Credit Loan
Commitment Period"). All Revolving Credit Loans shall be in minimum
principal amounts of $100,000 and integral multiples of $100,000 in
excess thereof. Revolving Credit Loans for less than $1,000,000 shall
consist of Base Rate Loans; Revolving Credit Loans for $1,000,000 and
greater may consist of Base Rate Loans or Eurodollar Loans, or a
combination thereof, as the Borrower may request; provided, however,
that no more than five (5) Eurodollar Loans shall be outstanding
hereunder at any time; provided, further, that no Eurodollar Loan shall
be made for less than $1,000,000. Revolving Credit Loans may be repaid
and reborrowed in accordance with the provisions hereof. For purposes
hereof, Eurodollar Loans with different Interest Periods shall be
considered as separate Eurodollar Loans, even if they begin on the same
date and have the same duration, although borrowings, extensions and
conversions may, in accordance with the provisions hereof, be combined
at the end of existing Interest Periods to constitute a new Eurodollar
Loan with a single Interest Period.
(c) Revolving Credit Notes. Each Revolving Credit Loan made by
a Bank under this Agreement shall be evidenced by a revolving
promissory note issued by the Borrower to the Bank making such
Revolving Credit Loan substantially in the form of Exhibit A and
maturing on the Maturity Date for Revolving Credit Loans (each such
note, together with all amendments, extensions, renewals, replacements,
or refundings thereof in whole or in part, is a "Revolving Credit Note"
and such Revolving Credit Notes are, collectively, the "Revolving
Credit Notes").
(d) Employee Loan Commitment. Subject to the terms and
conditions of this Agreement, NationsBank hereby also agrees to make
term loans to Qualified Employees (collectively, the "Employee Loans"
and each an "Employee Loan") not to exceed (i) at any one time
outstanding in the aggregate $25,000,000 (the "Employee Loan
Commitment"), as such amount may be increased or reduced from time to
time pursuant to Section 2.8, and (ii) with respect to any single such
Employee Loan, the book value of the shares of stock to be purchased or
refinanced with the proceeds of the Employee Loan, computed at the time
such Employee Loan is made in accordance with the Bylaws of the
Borrower. Subject to the terms and conditions of this Agreement, each
Bank hereby irrevocably agrees to purchase a participation in the
Employee Loans made or to be made hereunder, and a participation in all
security now or hereafter provided with respect hereto, equal to its
Ratable Share of such Employee Loans and security, not to exceed in the
aggregate such Bank's Employee Loan Participation (as defined below)
notwithstanding (i) the amount of such borrowing may not comply with
the minimum amount for advances of Employee Loans otherwise required
hereunder, (ii) whether any conditions specified in Section 5.2 are
then satisfied, (iii) whether an Incipient Default or an Event of
Default then exists, (iv) failure for any such request or deemed
request for an Employee Loan to be made by the time otherwise required
hereunder, (v) whether the date of such borrowing is a date on which
Employee Loans are otherwise permitted to be made hereunder or (vi) any
termination of the Total Commitments relating thereto immediately prior
to or contemporaneously with such borrowing. NationsBank shall have no
obligation under this Agreement to make any Employee Loan unless and
until it shall have received from each of the other Banks, in
accordance with this Agreement, such Bank's Ratable Share of such Loans
in accordance with this Section 2.1(d) and Section 5.2(c).
Simultaneously with the making of each such payment of its Ratable
Share of Employee Loans by a Bank to NationsBank, such Bank shall,
automatically and without any further action on the part of NationsBank
or such Bank, acquire a participation in an amount equal to such
payment in the related Employee Loan and in the interest thereon and in
the related Employee Notes, and shall have a claim against the
Qualified Employees with respect thereto. As to any Bank, "Employee
Loan Participation" shall mean the amount set forth beneath such Bank's
name on the signature pages hereof opposite the caption "Employee Loan
Participation," as such amount may be increased or reduced from time to
time pursuant to Section 2.8.
(e) Availability of Employee Loans. Employee Loans will be
made in accordance with Section 2.2. During the period from the Closing
Date through the Maturity Date for Employee Loans (the "Employee Loan
Commitment Period"), Employee Loans hereunder may be made (i) once
during each fiscal year of the Borrower on the ordinary sale date for
purchases by or for the benefit of Qualified Employees of the
Borrower's common stock, which occurs during the period from December 1
to March 31, and (ii) on such other dates as the Borrower and the Agent
may agree in writing. No single Employee Loan hereunder shall be in an
initial amount less than $500.00. Employee Loans shall consist of Base
Rate Loans. Amounts repaid on an Employee Loan may be reborrowed during
the Employee Loan Commitment Period.
(f) Delivery of Employee Loan Documents. Within 30 days of the
funding of an Employee Loan, the Borrower shall provide to NationsBank
in connection with such Employee Loan the following documents: (i) a
completed documentation checksheet in a form approved in writing by
NationsBank, an Employee Stock Power (for all Employee Pledged Shares
consisting of certificated securities, if any), an executed Truth in
Lending Disclosure Statement in the form of Exhibit F, an Employee
Note, and an Employee Pledge Agreement, all executed by the Qualified
Employee to whom the Employee Loan is to be made (or, as to a Note,
Employee Pledge Agreement and Employee Stock Power, if any, for
Employee Pledged Shares to be pledged by a personal holding company, by
such personal holding company and by the Qualified Employee, as
appropriate) (the Employee Stock Power, if any, in all cases to be
undated and executed in blank) and (ii) an Agreement to Employee Stock
Pledge Agreements, executed by the Borrower, substantially in the form
of Exhibit J and identifying by schedule each of the funded Employee
Loans.
(g) Employee Notes. Each of the Employee Loans shall be
evidenced by a promissory note (together with all amendments,
extensions, renewals, or replacements thereof, an "Employee Note" and,
collectively, all such notes, "Employee Notes") issued to NationsBank
by the Qualified Employee to whom the Employee Loan is made
substantially in the form of Exhibit B. Each Employee Note shall mature
on the earliest of (i) the seventh September 30 following the funding
of the corresponding Employee Loan, (ii) one calendar year after the
Qualified Employee to or for the benefit of whom the Employee Loan is
made ceases to be a Qualified Employee and (iii) the date upon which
any of the common stock purchased with the Employee Loan is sold. The
Revolving Credit Notes and the Employee Notes are sometimes herein
referred to collectively as the "Notes".
Section 2.2. Loan Procedures; Servicing
(a) Requests. Each request by the Borrower for a Loan shall be
submitted to the Agent in accordance with Section 5.2(b) or (c), as
applicable, of this Agreement. As used herein, "Loans" means the
Revolving Credit Loans and Employee Loans and "Loan" means any such
Revolving Credit Loan or Employee Loan individually. Employee Loans
shall be made to the Borrower and duly applied by the Borrower to the
purchase of such stock.
(b) Notice to Banks. The Agent shall notify each of the other
Banks as soon as practicable upon receipt of any request for a
Revolving Credit Loan or an Employee Loan, and that notice shall
include the date that the Borrower desires the Loan to be made and such
Bank's Ratable Share of such Loan. All funds constituting a Bank's
Ratable Share of such Loan shall be received by the Agent in
immediately available funds or other funds satisfactory to the Agent
not later than 2:00 p.m., Charlotte, North Carolina time, on the date
on which the Borrower has requested the Loan to be made. Unless the
Agent shall have been notified by telephone, confirmed in writing, by
any Bank by 12:00 noon, Charlotte, North Carolina time, on the day the
Borrower has requested that such Loan be made, that such Bank will not
make available the amount which would constitute its Ratable Share of
such requested Loan on the date specified therefor, the Agent may
assume that such Bank has made such amount available to the Agent and,
in reliance upon such assumption, make available to the Borrower or to
an appropriate escrow account, as appropriate, a corresponding amount.
If and to the extent that such Bank shall not have made such amount
available to the Agent, such Bank and the Borrower agrees to repay the
Agent forthwith on demand such corresponding amount, and such Bank
further agrees to pay to the Agent, upon demand, interest thereon, for
each day from the date the Agent made such amount available to the
Borrower to the date such amount is repaid to the Agent, at the
interest rate applicable at the time to Loans of the same type funded
by the Agent.
(c) Servicing. The Borrower agrees to act as servicer for the
Agent and NationsBank with respect to the Employee Loans (in such
capacity, the "Servicer"). On behalf of the Agent and NationsBank, the
Servicer will administer, service and collect payments in respect of
all Employee Loans, which duties shall include, without limitation, (i)
prior to the funding of an Employee Loan to a Qualified Employee, (A)
compiling and ensuring completion and execution, as applicable, of
those documents provided by such Qualified Employee pursuant to Section
2.1(f), and (B) confirming such person's status as a Qualified Employee
and (ii) subsequent to the funding of an Employee Loan to a Qualified
Employee, (A) collecting payments submitted by such Qualified Employee
pursuant to the relevant Employee Note, (B) recordkeeping regarding
current loan balances and other matters relating to such Employee Loan,
(C) responding to questions about such Employee Loan from such
Qualified Employee and (D) providing to the Agent, within 30 days after
the end of each calendar quarter, an Employee Loan delinquency report
for the immediately preceding calendar quarter. The Agent shall have
the exclusive right to remove the Servicer at any time for cause and
during the continuation of an Event of Default, and, upon 30 days
written notice, without cause. Upon any such removal, the Agent shall
promptly appoint a successor Servicer who shall be reasonably
acceptable to the Borrower; provided, however, that no approval of the
Borrower shall be required during the continuance of an Event of
Default. The Borrower, with the prior written consent of the Agent,
which consent shall not be unreasonably withheld, shall be permitted to
appoint a subservicer to perform its obligations under this Section
2.2(c).
Section 2.3. The Banks' Obligations Under the Loans.
Each Bank shall be obligated to fund Revolving Credit Loans requested
under Section 5.2(b) and its participation in Employee Loans requested under
Section 5.2(c) in accordance with its Ratable Share and Sections 2.1 and 2.2.
The obligations of each Bank hereunder are several and not joint. The failure of
any Bank to perform its obligations hereunder shall not affect the obligations
of any other Bank or the Borrower to any other party, nor shall any other party
be liable for the failure of such Bank to perform its obligations hereunder.
Section 2.4. Extension and Conversion.
Subject to the terms of Section 5.2, the Borrower shall have the
option, on any Business Day, to extend existing Revolving Credit Loans into a
subsequent permissible Interest Period or to convert Revolving Credit Loans into
Revolving Credit Loans of another type; provided, however, that (i) except as
provided in Section 2.14, Eurodollar Loans may be converted into Base Rate Loans
only on the last day of the Interest Period applicable thereto, (ii) Eurodollar
Loans may be extended, and Base Rate Loans may be converted into Eurodollar
Loans, only if no Incipient Default or Event of Default is in existence on the
date of extension or conversion, (iii) Revolving Credit Loans extended as, or
converted into, Eurodollar Loans shall be subject to the terms of the definition
of "Interest Period" and shall be in such minimum amounts as provided in Section
2.1(b), (iv) no more than 5 separate Eurodollar Loans shall be outstanding
hereunder at any time and (v) any request for extension or conversion of a
Eurodollar Loan which shall fail to specify an Interest Period shall be deemed
to be a request for an Interest Period of one month. Each such extension or
conversion shall be effected by the Borrower by giving a Notice of
Extension/Conversion (or telephone notice promptly confirmed in writing) to the
Agent prior to 11:00 A.M. (Charlotte, North Carolina time) on the Business Day
of, in the case of the conversion of a Eurodollar Loan into a Base Rate Loan,
and on the third Business Day prior to, in the case of the extension of a
Eurodollar Loan as, or conversion of a Base Rate Loan into, a Eurodollar Loan,
the date of the proposed extension or conversion, specifying the date of the
proposed extension or conversion, the Revolving Credit Loans to be so extended
or converted, the types of Revolving Credit Loans into which such Revolving
Credit Loans are to be converted and, if appropriate, the applicable Interest
Periods with respect thereto. Each request for extension or conversion shall
constitute a representation and warranty by the Borrower of the matters
specified in Section 5.2(a). In the event the Borrower fails to request
extension or conversion of any Eurodollar Loan in accordance with this Section,
or any such conversion or extension is not permitted or required by this
Section, then such Loan shall be automatically converted into a Base Rate Loan
at the end of the Interest Period applicable thereto. The Agent shall give each
Bank notice as promptly as practicable of any such proposed extension or
conversion affecting any Loan.
Section 2.5. Letters of Credit.
(a) Issuance. Subject to the terms and conditions hereof and
of the LOC Documents, if any, and any other terms and conditions which
the Issuing Bank may reasonably require, the Issuing Bank agrees from
time to time to issue Letters of Credit during the Revolving Credit
Loan Commitment Period as the Borrower may request, in a form
acceptable to the Issuing Bank; provided, however, that (i) the LOC
Obligations outstanding shall not at any time exceed $10,000,000 and
(ii) the sum of the aggregate principal amount of outstanding Revolving
Credit Loans plus LOC Obligations outstanding shall not at any time
exceed the Aggregate Revolving Credit Commitment. Except as otherwise
expressly agreed upon by all the Banks, no Letter of Credit shall have
an original expiry date more than two years from the date of issuance;
provided, further, that no Letter of Credit, as originally issued or as
extended, shall have an expiry date extending beyond the day before the
Maturity Date for Revolving Credit Loans. Each Letter of Credit shall
comply with the related LOC Documents. The issuance and expiry date of
each Letter of Credit shall be a Business Day.
(b) Notice and Reports. The request for the issuance of a
Letter of Credit shall be submitted by the Borrower to the Issuing Bank
at least three (3) Business Days prior to the requested date of
issuance. The Issuing Bank will, at least quarterly and more frequently
upon request, disseminate to each of the Banks a detailed report
specifying the Letters of Credit which are then issued and outstanding
and any activity with respect thereto which may have occurred since the
date of the prior report, and including therein, among other things,
the account party, the beneficiary, the face amount and expiry date as
well as any payment or expirations which may have occurred.
(c) Participation. Each Bank, upon issuance of a Letter of
Credit, shall be deemed to have purchased without recourse a risk
participation from the Issuing Bank in such Letter of Credit and the
obligations arising thereunder, in each case in an amount equal to its
pro rata share of the obligations under such Letter of Credit (based on
the respective Ratable Shares of the Banks) and shall absolutely,
unconditionally and irrevocably assume, as primary obligor and not as
surety, and be obligated to pay to the Issuing Bank therefor and
discharge when due, its pro rata share of the obligations arising under
such Letter of Credit. Without limiting the scope and nature of each
Bank's participation in any Letter of Credit, to the extent that the
Issuing Bank has not been reimbursed as required hereunder or under any
such Letter of Credit, each such Bank shall pay to the Issuing Bank its
pro rata share of such unreimbursed drawing in same day funds on the
day of notification by the Issuing Bank of an unreimbursed drawing
pursuant to the provisions of subsection (d) hereof. The obligation of
each Bank to so reimburse the Issuing Bank shall be absolute and
unconditional and shall not be affected by the occurrence of an
Incipient Default, an Event of Default or any other occurrence or
event. Any such reimbursement shall not relieve or otherwise impair the
obligation of the Borrower to reimburse the Issuing Bank under any
Letter of Credit, together with interest as hereinafter provided.
(d) Reimbursement. In the event of any drawing under any
Letter of Credit, the Issuing Bank will promptly notify the Borrower.
Unless the Borrower shall immediately notify the Issuing Bank that the
Borrower intends to otherwise immediately reimburse the Issuing Bank
for such drawing, the Borrower shall be deemed to have requested that
the Banks make a Revolving Credit Loan in the amount of the drawing as
provided in subsection (e) hereof on the related Letter of Credit, the
proceeds of which will be used to satisfy the related reimbursement
obligations. The Borrower promises to reimburse the Issuing Bank on the
day of drawing under any Letter of Credit (either with the proceeds of
a Revolving Credit Loan obtained hereunder or otherwise) in same day
funds. If the Borrower shall fail to reimburse the Issuing Bank as
provided hereinabove (and Revolving Credit Loans are not available to
effect such reimbursement), the unreimbursed amount of such drawing
shall bear interest at a per annum rate equal to the Base Rate plus two
percent (2%). The Borrower's reimbursement obligations hereunder shall
be absolute and unconditional under all circumstances irrespective of
any rights of setoff, counterclaim or defense to payment the Borrower
may claim or have against the Issuing Bank, the Agent, the Banks, the
beneficiary of the Letter of Credit drawn upon or any other Person,
including without limitation any defense based on any failure of the
applicable account party or the Borrower to receive consideration or
the legality, validity, regularity or unenforceability of the Letter of
Credit. The Issuing Bank will promptly notify the other Banks of the
amount of any unreimbursed drawing and each Bank shall promptly pay to
the Agent for the account of the Issuing Bank in dollars and in
immediately available funds, the amount of such Bank's pro rata share
of such unreimbursed drawing. Such payment shall be made on the day
such notice is received by such Bank from the Issuing Bank if such
notice is received at or before 2:00 P.M. (Charlotte, North Carolina
time); otherwise such payment shall be made at or before 12:00 Noon
(Charlotte, North Carolina time) on the Business Day next succeeding
the day such notice is received. If such Bank does not pay such amount
to the Issuing Bank in full upon such request, such Bank shall, on
demand, pay to the Agent for the account of the Issuing Bank interest
on the unpaid amount during the period from the date of such drawing
until such Bank pays such amount to the Issuing Bank in full at a rate
per annum equal to, if paid within two (2) Business Days of the date of
drawing, the Federal Funds Rate and thereafter at a rate equal to the
Base Rate. Each Bank's obligation to make such payment to the Issuing
Bank, and the right of the Issuing Bank to receive the same, shall be
absolute and unconditional, shall not be affected by any circumstance
whatsoever and without regard to the termination of this Agreement or
the Total Commitments hereunder, the existence of an Incipient Default
or Event of Default or the acceleration of the obligations of the
Borrower hereunder and shall be made without any offset, abatement,
withholding or reduction whatsoever. Simultaneously with the making of
each such payment by a Bank to the Issuing Bank, such Bank shall,
automatically and without any further action on the part of the Issuing
Bank or such Bank, acquire a participation in an amount equal to such
payment (excluding the portion of such payment constituting interest
owing to the Issuing Bank) in the related unreimbursed drawing portion
of the LOC Obligation and in the interest thereon and in the related
LOC Documents, and shall have a claim against the Borrower with respect
thereto.
(e) Repayment with Revolving Credit Loans. On any day on which
the Borrower shall have requested, or been deemed to have requested, a
Revolving Credit Loan to reimburse a drawing under a Letter of Credit,
the Agent shall give notice to the Banks that a Revolving Credit Loan
has been requested or deemed requested by the Borrower to be made in
connection with a drawing under a Letter of Credit, in which case a
Revolving Credit Loan comprised solely of Base Rate Loans shall be
immediately made to the Borrower by all Banks (notwithstanding any
termination of the Total Commitments pursuant to Section 8.2) pro rata
based on the respective Ratable Shares of the Banks (determined before
giving effect to any termination of the Total Commitments pursuant to
Section 8.2) and the proceeds thereof shall be paid directly to the
Issuing Bank for application to the respective LOC Obligations. Each
such Bank hereby irrevocably agrees to make its pro rata share of each
such Revolving Credit Loan immediately upon any such request or deemed
request in the amount, in the manner and on the date specified in the
preceding sentence notwithstanding (i) the amount of such borrowing may
not comply with the minimum amount for advances of Revolving Credit
Loans otherwise required hereunder, (ii) whether any conditions
specified in Section 5.2 are then satisfied, (iii) whether an Incipient
Default or an Event of Default then exists, (iv) failure of any such
request or deemed request for Revolving Credit Loans to be made by the
time otherwise required hereunder, (v) whether the date of such
borrowing is a date on which Revolving Credit Loans are otherwise
permitted to be made hereunder or (vi) any termination of the Total
Commitments relating thereto immediately prior to or contemporaneously
with such borrowing. In the event that any Revolving Credit 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 Federal Bankruptcy Code with respect to any of the Borrower),
then each such Bank hereby agrees that it shall forthwith purchase (as
of the date such borrowing would otherwise have occurred, but adjusted
for any payments received from the Borrower on or after such date and
prior to such purchase) from the Issuing Bank such participation in the
outstanding LOC Obligations as shall be necessary to cause each such
Bank to share in such LOC Obligations ratably (based upon the
respective Ratable Shares of the Banks (determined before giving effect
to any termination of the Total Commitments pursuant to Section 8.2)),
provided that at the time any purchase of participation pursuant to
this sentence is actually made, the purchasing Bank shall be required
to pay to the Issuing Bank, to the extent not paid to the Issuing Bank
by the Borrower in accordance with the terms of subsection (d) hereof,
interest on the principal amount of participation purchased for each
day from and including the day upon which such borrowing would
otherwise have occurred to but excluding the date of payment for such
participation, at the rate equal to, if paid within two (2) Business
Days of the date of the Revolving Credit Loan, the Federal Funds Rate,
and thereafter at a rate equal to the Base Rate.
(f) Designation of Subsidiaries as Account Parties.
Notwithstanding anything to the contrary set forth in this Agreement,
including without limitation subsection (a) hereof, a Letter of Credit
issued hereunder may contain a statement to the effect that such Letter
of Credit is issued for the account of a Subsidiary of the Borrower,
provided that notwithstanding such statement, the Borrower shall be the
actual account party for all purposes of this Agreement for such Letter
of Credit and such statement shall not affect the Borrower's
reimbursement obligations hereunder with respect to such Letter of
Credit.
(g) Renewal, Extension. The renewal or extension of any
Letter of Credit shall, for purposes hereof, be treated in all respects
the same as the issuance of a new Letter of Credit hereunder.
(h) Uniform Customs and Practices. The Issuing Bank may have
the Letters of Credit be subject to The Uniform Customs and Practice
for Documentary Credits, as published as of the date of issue by the
International Chamber of Commerce (the "UCP"), in which case the UCP
may be incorporated therein and deemed in all respects to be a part
thereof.
(i) Indemnification; Nature of Issuing Bank's Duties.
(i) In addition to its other obligations under this
Section 2.5, the Borrower hereby agrees to protect, indemnify,
pay and save the Issuing Bank harmless from and against any
and all claims, demands, liabilities, damages, losses, costs,
charges and expenses (including reasonable attorneys' fees)
that the Issuing Bank may incur or be subject to as a
consequence, direct or indirect, of (A) the issuance of any
Letter of Credit or (B) the failure of the Issuing Bank to
honor a drawing under a Letter of Credit as a result of any
act or omission, whether rightful or wrongful, of any present
or future de jure or de facto government or governmental
authority (all such acts or omissions, herein called
"Government Acts").
(ii) As between the Borrower and the Issuing Bank,
the Borrower shall assume all risks of the acts, omissions or
misuse of any Letter of Credit by the beneficiary thereof. The
Issuing Bank shall not be responsible: (A) for the form,
validity, sufficiency, accuracy, genuineness or legal effect
of any document submitted by any party in connection with the
application for and issuance of any Letter of Credit, even if
it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (B) for the
validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign any Letter of
Credit or the rights or benefits thereunder or proceeds
thereof, in whole or in part, that may prove to be invalid or
ineffective for any reason; (C) for errors, omissions,
interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise,
whether or not they be in cipher; (D) for any loss or delay in
the transmission or otherwise of any document required in
order to make a drawing under a Letter of Credit or of the
proceeds thereof; and (E) for any consequences arising from
causes beyond the control of the Issuing Bank, including,
without limitation, any Government Acts. None of the above
shall affect, impair, or prevent the vesting of the Issuing
Bank's rights or powers hereunder.
(iii) In furtherance and extension and not in
limitation of the specific provisions hereinabove set forth,
any action taken or omitted by the Issuing Bank, under or in
connection with any Letter of Credit or the related
certificates, if taken or omitted in good faith, shall not put
such Issuing Bank under any resulting liability to the
Borrower. It is the intention of the parties that this
Agreement shall be construed and applied to protect and
indemnify the Issuing Bank against any and all risks involved
in the issuance of the Letters of Credit, all of which risks
are hereby assumed by the Borrower including, without
limitation, any and all Government Acts. The Issuing Bank
shall not, in any way, be liable for any failure by the
Issuing Bank or anyone else to pay any drawing under any
Letter of Credit as a result of any Government Acts or any
other cause beyond the control of the Issuing Bank.
(iv) Nothing in this subsection (i) is intended to
limit the reimbursement obligations of the Borrower contained
in subsection (d) above. The obligations of the Borrower under
this subsection (i) shall survive the termination of this
Agreement. No act or omissions of any current or prior
beneficiary of a Letter of Credit shall in any way affect or
impair the rights of the Issuing Bank to enforce any right,
power or benefit under this Agreement.
(v) Notwithstanding anything to the contrary
contained in this subsection (i), the Borrower shall have no
obligation to indemnify the Issuing Bank in respect of any
claims, demands, liabilities, damages, losses, costs, charges
or expenses incurred by the Issuing Bank (A) arising out of
the gross negligence or willful misconduct of the Issuing
Bank, as determined by a court of competent jurisdiction, or
(B) caused by the Issuing Bank's failure to pay under any
Letter of Credit after presentation to it of a request
strictly complying with the terms and conditions of such
Letter of Credit, as determined by a court of competent
jurisdiction, unless such payment is prohibited by any law,
regulation, court order or decree.
(j) Responsibility of Issuing Bank. It is expressly understood
and agreed that the obligations of the Issuing Bank hereunder to the
Banks are only those expressly set forth in this Agreement and that the
Issuing Bank shall be entitled to assume that the conditions precedent
set forth in Section 5.2 have been satisfied unless it shall have
acquired actual knowledge that any such condition precedent has not
been satisfied; provided, however, that nothing set forth in this
Section 2.5 shall be deemed to prejudice the right of any Bank to
recover from the Issuing Bank any amounts made available by such Bank
to the Issuing Bank pursuant to this Section 2.5 in the event that it
is determined by a court of competent jurisdiction that the payment
with respect to a Letter of Credit constituted gross negligence or
willful misconduct on the part of the Issuing Bank.
(k) Conflict with LOC Documents. In the event of any
conflict between this Agreement and any LOC Document, this Agreement
shall control.
Section 2.6. Repayment.
The Borrower shall repay the outstanding principal balance under the
Revolving Credit Notes in full on the Maturity Date for Revolving Credit Loans.
The Borrower shall also repay the amount of the outstanding principal balance
under any Employee Note that is due and payable under such Employee Note,
whether by acceleration of maturity or otherwise, 30 days after such amount
becomes due and payable if such amount is then unpaid, provided, however, that
at any time that defaults under all or substantially all of the Employee Notes
have occurred and are continuing, the Borrower shall immediately repay the
aggregate principal amount outstanding under the Employee Notes upon demand
therefor by the Agent.
Section 2.7. Interest.
(a) Revolving Credit Loans. Subject to the provisions of
subsection (d) below, each Revolving Credit Loan shall bear interest
on the outstanding principal balance thereunder at a per annum
rate equal to:
(i) Base Rate Loans. During such periods as any
Revolving Credit Loan (or portion thereof) shall consist of
Base Rate Loans, at a per annum rate equal to the Base Rate
plus the Applicable Percentage for Base Rate Loans in effect
from time to time.
(ii) Eurodollar Loans. During such periods as any
Revolving Credit Loan (or any portion thereof) shall consist
of Eurodollar Loans, at a per annum rate equal to the sum of
the Eurodollar Rate for the Interest Period in effect for such
Eurodollar Loan plus the Applicable Percentage for Eurodollar
Loans in effect from time to time.
(b) Employee Loans. Subject to the provisions of
subsection (d) below, each Employee Loan shall bear interest on the
outstanding principal balance thereunder at a per annum rate equal to
the Applicable Rate.
(c) Payments and Accruals. Interest shall be payable in
arrears on each Interest Payment Date applicable to the Loan (or
portion thereof) unless otherwise specified herein. The interest due on
each Interest Payment Date shall be (i) with respect to Revolving
Credit Loans that are Base Rate Loans, the interest accrued during the
immediately preceding month, (ii) with respect to Revolving Credit
Loans that are Eurodollar Loans, the interest accrued during the
applicable Interest Period or, where the applicable Interest Period is
more than three months, the immediately preceding three-month portion
thereof and (iii) with respect to Employee Loans, the interest accrued
during the immediately preceding calendar quarter. Unless otherwise
specifically provided herein or in the Notes, all late payments of
principal and interest shall bear interest at the rate specified in
clause (d) immediately below.
(d) During an Event of Default. Notwithstanding the foregoing,
upon the occurrence, and during the continuance, of an Event of
Default, the principal of and, to the extent permitted by law, interest
on the Loans and any other amounts owing hereunder or under the Notes,
the Borrower Guaranty, the Employee Pledge Agreements and any other
Credit Documents shall bear interest, payable on demand, at a per annum
rate 2% greater than the rate which would otherwise be applicable (or
if no rate is applicable, whether in respect of interest, fees or other
amounts, then 2% greater than the Base Rate).
Section 2.8. Prepayments; Commitment Increase; Reduction or
Termination.
(a) Voluntary Prepayments. The Borrower shall have the right to prepay
the Revolving Credit Loans in whole or in part from time to time on any Business
Day without premium or penalty; provided, however, that (i) Revolving Credit
Loans that are Eurodollar Loans may only be prepaid on three Business Days'
prior written notice to the Agent specifying the applicable Loans to be prepaid;
(ii) any prepayment of Revolving Credit Loans that are Eurodollar Loans will be
subject to Section 2.17; (iii) each such partial prepayment of Loans shall be
(A) in the case of Revolving Credit Loans that are Eurodollar Loans, in a
minimum principal amount of $1,000,000 and in integral multiples of $100,000 in
excess thereof and (B) in the case of Revolving Credit Loans that are Base Rate
Loans, in a minimum principal amount of $100,000 and in integral multiples of
$100,000 in excess thereof. Subject to the foregoing terms, amounts prepaid
hereunder shall be applied as the Borrower may elect; provided, that if the
Borrower shall fail to specify application of a voluntary prepayment then such
prepayment shall be applied first to Base Rate Loans and then to Eurodollar
Loans in direct order of Interest Period maturities.
(b) Mandatory Prepayments; Purchase of Employee Notes.
(i) Overadvance. (A) If at any time the sum of the aggregate
amount of outstanding Revolving Credit Loans plus LOC Obligations
outstanding shall exceed the Aggregate Revolving Credit Commitment, the
Borrower promises to prepay immediately the outstanding principal
balance on the Revolving Credit Loans in an amount sufficient to
eliminate such excess.
(B) If at any time the sum of the aggregate amount of
outstanding Employee Loans shall exceed the Employee Loan
Commitment, then the Borrower shall purchase from NationsBank,
Employee Notes in an amount sufficient to eliminate such
excess.
(ii) Margin Stock Event. In the event that any of the Employee
Pledged Shares become "margin stock" as defined by Regulation U (a
"Margin Stock Event"), the Borrower promises to prepay immediately the
outstanding principal balance on the Revolving Credit Loans and/or to
purchase Employee Loans in an amount sufficient to bring the Loans into
compliance with Regulation U.
(iii) Noncompliance with Section 2.1(f). In the event that the
Borrower shall have failed timely to deliver the documentation required
to be delivered in accordance with Section 2.1(f), the Borrower
promises to purchase the applicable Employee Loans.
(iv) Application. All prepayments made pursuant to this
Section 2.8(b) shall (A) be subject to Section 2.17, and (B) be applied first to
Base Rate Loans and then to Eurodollar Loans in direct order of Interest Period
maturities.
(c) Notice of Prepayments; Reborrowing. The Borrower will provide
notice to the Agent of any prepayment by 12:00 noon (Charlotte, North Carolina
time) on the date of prepayment in the case of prepayments of Base Rate Loans
and on the third Business Day prior to the date of prepayment in the case of
prepayments of Revolving Credit Loans that are Eurodollar Loans. Amounts paid on
the Revolving Credit Loans under this Section 2.8 may be reborrowed in
accordance with the provisions hereof.
(d) Commitment Increase. Upon 15 days' advance written notice from the
Borrower to the Banks, and in increments of $2.5 million, up to $12.5 million of
the amount available under the Aggregate Revolving Credit Commitment may be
converted to amounts available under the Employee Loan Commitment, and up to
$12.5 million of the amount available under the Employee Loan Commitment may
similarly be converted to amounts available under the Aggregate Revolving Credit
Commitment; provided, however, that such conversions may be implemented on no
more than two occasions during any fiscal year of the Borrower; and provided,
further, that any Loans outstanding which would cause the applicable Commitment
as a result of such conversions to be exceeded shall be repaid in the amount of
such excess before giving effect to any such conversions. Each increase
hereunder in the Employee Loan Commitment or the Aggregate Revolving Credit
Commitment shall reduce, dollar for dollar, the amount available under the
Aggregate Revolving Credit Commitment or the Employee Loan Commitment,
respectively. The Revolving Credit Commitment and the Employee Loan
Participation of each Bank shall be ratably increased or decreased, as
appropriate, with each increase or decrease in the Aggregate Revolving Credit
Commitment and the Employee Loan Commitment. At no time shall (i) the Aggregate
Revolving Credit Commitment exceed $107.5 million, (ii) the Employee Loan
Commitment exceed $37.5 million, or (iii) the aggregate of the Total Commitments
exceed $120 million. The Aggregate Revolving Credit Commitment in effect on the
Maturity Date for Employees Loans, as such amount has been increased or
decreased pursuant to this subsection (d), shall continue in effect as the
Aggregate Revolving Credit Commitment thereafter, except as such amount may be
reduced pursuant to subsection (e) below.
(e) Reduction or Termination. The Borrower may (i) terminate the Total
Commitments at any time if no Loans or LOC Obligations are outstanding at such
time, and (ii) ratably and permanently reduce from time to time, by an aggregate
amount of not less than $3,000,000 and additional increments of $1,000,000, the
unused portion of the Total Commitments, and may, in increments of $1,000,000,
allocate such reductions to amounts available under the Revolving Credit
Commitments and the Employee Loan Participations.
Section 2.9. Fees.
(a) Arrangement Fee. The Borrower agrees to pay to the Agent
(or its designee) in immediately available funds on or before the Closing Date
the arrangement fee set forth in the Agent's Fee Letter.
(b) Unused Fee. In consideration of the aggregate Total Commitments
made available by the Banks hereunder, the Borrower agrees to pay to the Agent
for the account of the Banks a fee (the "Unused Fee") on the Unused Aggregate
Total Commitment computed at a per annum rate for each day during the applicable
Unused Fee Calculation Period (hereinafter defined) equal to the Applicable
Percentage for such Unused Fee. The Unused Fee shall commence to accrue on the
Closing Date and shall be due and payable in arrears on the third (3rd) Business
Day of each January, April, July and October (and the Termination Date) for the
immediately preceding fiscal quarter (or portion thereof) (each such fiscal
quarter or portion thereof for which the Unused Fee is payable hereunder being
herein referred to as an "Unused Fee Calculation Period"), beginning with the
first of such dates to occur after the Closing Date.
(c) Administrative Fees. The Borrower agrees to pay to the
Agent, for its own account, the annual administrative fee set forth in the
Agent's Fee Letter, payable on each anniversary of the Closing Date until and
including the last occurring Termination Date (the "Agent's Fee").
(d) Letter of Credit Fees.
(i) The Borrower agrees to pay to the Agent for account of the
Banks, a fee for each Letter of Credit issued hereunder (the "LOC Fee")
on the available amount to be drawn under such Letter of Credit
computed at a per annum rate for each day during the applicable LOC
Term (hereinafter defined) equal to the Applicable Percentage for such
LOC Fee. The LOC Fee shall commence to accrue on the issuance date for
each Letter of Credit and shall be due and payable in arrears on the
third (3rd) Business Day of each January, April, July and October (and
on the expiry date thereof) for the immediately preceding fiscal
quarter (or portion thereof) (each such fiscal quarter or portion
thereof for which the LOC Fee is payable hereunder being herein
referred to as an "LOC Term"), beginning with the first of such dates
to occur after the date of issuance of each Letter of Credit.
(ii) In addition to the Letter of Credit Fee payable pursuant
to clause (i) above, the Borrower shall pay to the Issuing Bank for its
own account without sharing by the other Banks the letter of credit
fronting fees of (i) 0.125% on the available amount to be drawn under
such Letter of Credit computed at a per annum rate for each day during
the applicable LOC Term and (ii) the customary charges from time to
time of the Issuing Bank with respect to the issuance, amendment,
transfer, administration, cancellation and conversion of, and drawing
under, such Letters of Credit (collectively, the "Issuing Bank Fees").
Section 2.10. Method of Payment.
Unless otherwise provided herein, whenever any payment of principal,
interest, fees or any other payment to be made hereunder becomes due on a day
other than a Business Day, such payment may be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of the amount of interest then to be paid. All payments and
prepayments by the Borrower hereunder and the makers of Employee Notes shall be
made to the Agent, at its address stated in Section 10.8 hereof, in such money
of the United States as at the time of payment shall be legal tender for the
payment of public and private debts and in immediately available funds, without
setoff, deduction or counterclaim. The Borrower and the Banks hereby authorize
the Agent to debit the deposit accounts of the Borrower, or to advance Revolving
Credit Loans on the Borrower's behalf, at the time any payment by the Borrower
to the Agent under this Agreement is due, in the amount of the required payment.
A payment must be received by the Agent or an instruction must be given the
Agent to debit one or more deposit accounts of the Borrower and having collected
balances sufficient to make such payment no later than 2:00 p.m., Charlotte,
North Carolina, time, in order to be credited to the Borrower on the day of
receipt. Except as expressly provided otherwise herein, all computations of
interest and fees shall be made on the basis of actual number of days elapsed
over a year of 360 days, except with respect to computation of interest on Base
Rate Loans and Employee Loans which (unless such rate is determined by reference
to the Federal Funds Rate) shall be calculated based on a year of 365 or 366
days, as appropriate.
Section 2.11. Application of Collections.
(a) Distribution to Banks. All payments of principal,
interest, fees, and costs or expenses by the Borrower prior to the
occurrence and continuance of an Event of Default under Article VIII
hereof, or by the issuer of an Employee Note prior to the occurrence
and continuance of a default under such Employee Note, shall be
distributed to the Banks by the Agent as provided in this Section. If
any other Bank shall at any time receive payment on any Loans directly
or indirectly from any assets of the Borrower (including, without
limitation, through exercise of setoff rights under Section 8.3 hereof)
or the maker of any Employee Note in a greater amount than the
proportionate amount of principal and interest due it under this
Agreement, then such Bank shall purchase for cash (immediately prior to
such payment, if necessary) a ratable proportion of the Revolving
Credit Loans or the amounts outstanding under Employee Loan
Participations held by the other Banks, including the Agent, so that
all recoveries of principal and interest shall be shared by the Banks
in accordance with their Ratable Shares. If all or any portion of such
excess payment is thereafter recovered from such Bank, such purchase
shall be rescinded and the purchase price restored to the extent of
such recovery, but without interest.
(b) Application of Collections Prior to Event of Default.
Prior to the occurrence and continuance of an Event of Default
hereunder or of a default under an Employee Note, the Agent shall apply
all Collections to the payment of costs or expenses, interest, fees,
and principal attributable to the Notes to which the Collections apply,
in that order. After the occurrence and continuance of any Event of
Default hereunder or a default under an Employee Note, all such
applications shall be made in accordance with the terms of clause (c)
immediately below. The Agent shall remit to the Banks in immediately
available funds, or retain for its own account, as applicable: (i) out
of the principal portion of any such Collections, each Bank's,
including the Agent's, Ratable Share thereof; (ii) out of the fees
portion of any such Collections each Bank's, including the Agent's,
Ratable Share thereof; (iii) out of the interest portion of any such
Collections, each Bank's, including the Agent's, Ratable Share thereof;
and (iv) out of the costs or expenses portion of any such Collections,
each Bank's, including the Agent's, costs or expenses, pursuant to
Section 10.6 hereof, as incurred. All remittances of principal,
interest, fees, and costs or expenses hereunder to each of the other
Banks shall be made as soon as practicable, but in no instance later
than the Business Day of their receipt by the Agent in immediately
available funds, if such receipt occurs no later than 12:00 noon
Charlotte, North Carolina time, or the next Business Day, if such
receipt occurs later than 12:00 noon, and all such remittances shall be
effected by the Agent's initiating wire transfers or by such other
means as are agreed in writing by both the Agent and such Bank. Unless
otherwise dictated by a court of competent jurisdiction, the Agent
shall, however, have no obligation to pay any Bank any amounts except
out of those amounts actually received in collected funds for
application to the Obligations, except as otherwise specifically
provided in clause (c) immediately below.
(c) Application of Collections After Event of Default.
Notwithstanding any other provisions of this Credit Agreement to the
contrary, after the occurrence and during the continuance of an Event
of Default, all amounts collected or received by the Agent or any Bank
in connection with the Loans or the Notes or on account of the
Subsidiary Guaranteed Obligations or any other amounts outstanding
under any of the Credit Documents shall be paid over or delivered as
follows:
FIRST, to the payment of all reasonable out-of-pocket costs
and expenses (including without limitation reasonable attorneys' fees)
of the Agent in connection with enforcing the rights of the Banks under
the Credit Documents;
SECOND, to payment of any fees owed to the Agent;
THIRD, to the payment of all reasonable out-of-pocket costs
and expenses (including without limitation, reasonable attorneys' fees)
of each of the Banks in connection with enforcing its rights under the
Credit Documents or otherwise with respect to the Obligations owing to
such Bank;
FOURTH, to the payment of all accrued interest and fees on or
in respect of the Obligations;
FIFTH, to the payment of the outstanding principal amount of
the Subsidiary Guaranteed Obligations (including the payment or cash
collateralization of the outstanding LOC Obligations);
SIXTH, to all other Obligations and other obligations which
shall have become due and payable under the Credit Documents or
otherwise and not repaid pursuant to clauses "FIRST" through "FIFTH"
above; and
SEVENTH, to the payment of the surplus, if any, to whoever may
be lawfully entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; and (ii) each of the Banks shall receive an amount equal to
its pro rata share (based on the proportion that the then outstanding
Obligations held by such Bank bears to the aggregate then outstanding
Obligations) of amounts available to be applied pursuant to clauses "THIRD",
"FOURTH", "FIFTH" and "SIXTH" above; and (iii) to the extent that any amounts
available for distribution pursuant to clause "FIFTH" above are attributable to
the issued but undrawn amount of outstanding Letters of Credit, such amounts
shall be held by the Agent in a cash collateral account and applied (A) first,
to reimburse the Issuing Bank for any drawings under such Letters of Credit and
(B) then, following the expiration of all Letters of Credit, to all other
obligations of the types described in clauses "FIFTH" and "SIXTH" above in the
manner provided in this Section 2.11(c).
Section 2.12. Capital Adequacy.
If, after the date hereof, any Bank has determined that the adoption or
the becoming effective of, or any change in, or any change by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof in the interpretation or administration of, any
applicable law, rule or regulation regarding capital adequacy, or compliance by
such Bank with any request or directive regarding capital adequacy (whether or
not having the force of law) of any such authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on such
Bank's capital or assets as a consequence of its commitments or obligations
hereunder to a level below that which such Bank could have achieved but for such
adoption, effectiveness, change or compliance (taking into consideration such
Bank's policies with respect to capital adequacy), then, upon notice from such
Bank to the Borrower, the Borrower shall be obligated to pay to such Bank such
additional amount or amounts as will compensate such Bank for such reduction.
Each determination by any such Bank of amounts owing under this Section shall,
absent manifest error, be conclusive and binding on the parties hereto.
Section 2.13. Inability To Determine Interest Rate.
If prior to the first day of any Interest Period, the Agent shall have
determined (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
Eurodollar Rate for such Interest Period, the Agent shall give telecopy or
telephonic notice thereof to the Borrower and the Banks as soon as practicable
thereafter. If such notice is given (x) any Eurodollar Loans requested to be
made on the first day of such Interest Period shall be made as Base Rate Loans,
(y) any Revolving Credit Loans that were to have been converted on the first day
of such Interest Period to or continued as Eurodollar Loans shall be converted
to or continued as Base Rate Loans and (z) any outstanding Eurodollar Loans
shall be converted, on the first day of such Interest Period, to Base Rate
Loans. Until such notice has been withdrawn by the Agent, no further Eurodollar
Loans shall be made or continued as such, nor shall the Borrower have the right
to convert Base Rate Loans to Eurodollar Loans.
Section 2.14. Illegality.
Notwithstanding any other provision herein, if the adoption of or any
change in any Requirement of Law or in the interpretation or application thereof
occurring after the Closing Date shall make it unlawful for any Bank to make or
maintain Eurodollar Loans as contemplated by this Credit Agreement, (a) such
Bank shall promptly give written notice of such circumstances to the Borrower
and the Agent (which notice shall be withdrawn whenever such circumstances no
longer exist), (b) the commitment of such Bank hereunder to make Eurodollar
Loans, continue Eurodollar Loans as such and convert Base Rate Loans to
Eurodollar Loans shall forthwith be canceled and, until such time as it shall no
longer be unlawful for such Bank to make or maintain Eurodollar Loans, such Bank
shall then have a commitment only to make a Base Rate Loan when a Eurodollar
Loan is requested and (c) such Bank's Loans then outstanding as Eurodollar
Loans, if any, shall be converted automatically to Base Rate Loans on the
respective last days or the then current Interest Periods with respect to such
Loans or within such earlier period as required by law. If any such conversion
of a Eurodollar Loan occurs on a day which is not the last day of the then
current Interest Period with respect thereto, the Borrower shall pay to such
Bank such amounts, if any, as may be required pursuant to Section 2.17.
Section 2.15. Requirements of Law.
If the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof applicable to any Bank, or compliance by
any Bank with any request or directive (whether or not having the force of law)
from any central bank or other Governmental Authority, in each case made
subsequent to the Closing Date (or, if later, the date on which such Bank
becomes a Bank):
(a) shall subject such Bank to any tax of any kind whatsoever
with respect to any Letter of Credit or any Eurodollar Loans made by it
or its obligation to make Eurodollar Loans, or change the basis of
taxation of payments to such Bank in respect thereof (except for
Non-Excluded Taxes covered by Section 2.16 (including Non-Excluded
Taxes imposed solely by reason of any failure of such Bank to comply
with its obligations under Section 2.16) and changes in taxes measured
by or imposed upon the overall net income, or franchise tax (imposed in
lieu of such net income tax), of such Bank or its applicable lending
office, branch, or any affiliate thereof);
(b) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in or for the account of,
advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Bank which is not otherwise
included in the determination of the Eurodollar Rate hereunder; or
(c) shall impose on such Bank any other condition
(excluding any tax of any kind whatsoever);
and the result of any of the foregoing is to increase the cost to such
Bank, by an amount which such Bank deems to be material, of making,
converting into, continuing or maintaining Eurodollar Loans or to
reduce any amount receivable hereunder in respect thereof, then, in any
such case, upon notice to the Borrower from such Bank, through the
Agent, in accordance herewith, the Borrower shall be obligated to
promptly pay such Bank, upon its demand, any additional amounts
necessary to compensate such Bank for such increased cost or reduced
amount receivable, provided that, in any such case, the Borrower may
elect to convert the Eurodollar Loans made by such Bank hereunder to
Base Rate Loans by giving the Agent at least one Business Day's notice
of such election, in which case the Borrower shall promptly pay to such
Bank, upon demand, without duplication, such amounts, if any, as may be
required pursuant to Section 2.17. If any Bank becomes entitled to
claim any additional amounts pursuant to this subsection, it shall
provide prompt notice thereof to the Borrower, through the Agent,
certifying (x) that one of the events described in this paragraph (a)
has occurred and describing in reasonable detail the nature of such
event, (y) as to the increased cost or reduced amount resulting from
such event and (z) as to the additional amount demanded by such Bank
and a reasonably detailed explanation of the calculation thereof. Such
a certificate as to any additional amounts payable pursuant to this
subsection submitted by such Bank, through the Agent, to the Borrower
shall be conclusive and binding on the parties hereto in the absence of
manifest error. This covenant shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable
hereunder.
Section 2.16. Taxes.
(a) Except as provided below in this subsection, all payments
made by the Borrower on behalf of itself or on behalf of any other
Person in connection with the Employee Loans under this Agreement, the
Revolving Credit Notes and the Employee Notes shall be made free and
clear of, and without deduction or withholding for or on account of,
any present or future income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions or withholdings, now or hereafter
imposed, levied, collected, withheld or assessed by any court, or
governmental body, agency or other official, excluding taxes measured
by or imposed upon the overall net income of any Bank or its applicable
lending office, or any branch or affiliate thereof, and all franchise
taxes, branch taxes, taxes on doing business or taxes on the overall
capital or net worth of any Bank or its applicable lending office, or
any branch or affiliate thereof, in each case imposed in lieu of net
income taxes, imposed: (i) by the jurisdiction under the laws of which
such Bank, applicable lending office, branch or affiliate is organized
or is located, or in which its principal executive office is located,
or any nation within which such jurisdiction is located or any
political subdivision thereof; or (ii) by reason of any connection
between the jurisdiction imposing such tax and such Bank, applicable
lending office, branch or affiliate other than a connection arising
solely from such Bank having executed, delivered or performed its
obligations, or received payment under or enforced, this Agreement. If
any such non-excluded taxes, levies, imposts, duties, charges, fees,
deductions or withholdings ("Non-Excluded Taxes") are required to be
withheld from any amounts payable to the Agent or any Bank hereunder,
(A) the amounts so payable to the Agent or such Bank shall be increased
to the extent necessary to yield to the Agent or such Bank (after
payment of all Non-Excluded Taxes) interest or any such other amounts
payable hereunder at the rates or in the amounts specified in this
Agreement, provided, however, that the Borrower shall be entitled to
deduct and withhold any Non-Excluded Taxes and shall not be required to
increase any such amounts payable to any Bank that is not organized
under the laws of the United States of America or a state thereof if
such Bank fails to comply with the requirements of paragraph (b) of
this subsection whenever any Non-Excluded Taxes are payable by the
Borrower, and (B) as promptly as possible thereafter the Borrower shall
send to the Agent for its own account or for the account of such Bank,
as the case may be, a certified copy of an original official receipt
received by the Borrower showing payment thereof. If the Borrower fails
to pay any Non-Excluded Taxes when due to the appropriate taxing
authority or fail to remit to the Agent the required receipts or other
required documentary evidence, the Borrower shall indemnify the Agent
and the Banks for any incremental taxes, interest or penalties that may
become payable by the Agent or any Bank as a result of any such
failure. The agreements in this subsection shall survive the
termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.
(b) Each Bank that is not incorporated under the laws of
the United States of America or a state thereof shall:
(X) (i) on or before the date of any payment by the
Borrower under this Agreement to such Bank, deliver to the
Borrower and the Agent (A) two (2) duly completed copies of
United States Internal Revenue Service Form 1001 or 4224, or
successor applicable form, as the case may be, certifying that
it is entitled to receive payments under this Agreement
without deduction or withholding of any United States federal
income taxes and (B) an Internal Revenue Service Form W-8 or
W-9, or successor applicable form, as the case may be,
certifying that it is entitled to an exemption from United
States backup withholding tax;
(ii) deliver to the Borrower and the Agent two (2)
further copies of any such form or certification on or before
the date that any such form or certification expires or
becomes obsolete and after the occurrence of any event
requiring a change in the most recent form previously
delivered by it to the Borrower; and
(iii) obtain such extensions of time for filing and
complete such forms or certifications as may reasonably be
requested by the Borrower or the Agent; or
(Y) in the case of any such Bank that is not a "bank"
within the meaning of Section 881(c)(3)(A) of the Internal
Revenue Code, (i) represent to the Borrower (for the benefit
of the Borrower and the Agent) that it is not a bank within
the meaning of Section 881(c)(3)(A) of the Internal Revenue
Code, (ii) agree to furnish to the Borrower on or before the
date of any payment by the Borrower, with a copy to the Agent
two (2) accurate and complete original signed copies of
Internal Revenue Service Form W-8, or successor applicable
form certifying to such Bank's legal entitlement at the date
of such certificate to an exemption from U.S. withholding tax
under the provisions of Section 881(c) of the Internal Revenue
Code with respect to payments to be made under this Agreement
(and to deliver to the Borrower and the Agent two (2) further
copies of such form on or before the date it expires or
becomes obsolete and after the occurrence of any event
requiring a change in the most recently provided form and, if
necessary, obtain any extensions of time reasonably requested
by the Borrower or the Agent for filing and completing such
forms), and (iii) agree, to the extent legally entitled to do
so, upon reasonable request by the Borrower, to provide to the
Borrower (for the benefit of the Borrower and the Agent) such
other forms as may be reasonably required in order to
establish the legal entitlement of such Bank to an exemption
from withholding with respect to payments under this
Agreement;
unless in any such case any change in treaty, law or
regulation has occurred after the date such Person becomes a
Bank hereunder which renders all such forms inapplicable or
which would prevent such Bank from duly completing and
delivering any such form with respect to it and such Bank so
advises the Borrower and the Agent. Each Person that shall
become a Bank or a participant of a Bank pursuant to Section
10.2 shall, upon the effectiveness of the related transfer, be
required to provide all of the forms, certifications and
statements required pursuant to this subsection, provided that
in the case of a participant of a Bank the obligations of such
participant of a Bank pursuant to this subsection (b) shall be
determined as if the participant of a Bank were a Bank except
that such participant of a Bank shall furnish all such
required forms, certifications and statements to the Bank from
which the related participation shall have been purchased.
Section 2.17. Indemnity.
The Borrower promises to indemnify each Bank and to hold each Bank
harmless from any loss or expense which such Bank may sustain or incur (other
than through such Bank's gross negligence or willful misconduct) as a
consequence of (a) default by the Borrower in making a borrowing of, conversion
into or continuation of Eurodollar Loans after the Borrower has given a notice
requesting the same in accordance with the provisions of this Agreement, (b)
default by the Borrower in making any prepayment of a Eurodollar Loan after the
Borrower has given a notice thereof in accordance with the provisions of this
Agreement or (c) the making of a prepayment of Eurodollar Loans on a day which
is not the last day of an Interest Period with respect thereto. With respect to
Revolving Credit Loans that are Eurodollar Loans, such indemnification may
include an amount equal to the excess, if any, of (i) the amount of interest
which would have accrued on the amount so prepaid, or not so borrowed, converted
or continued, for the period from the date of such prepayment or of such failure
to borrow, convert or continue to the last day of the applicable Interest Period
(or, in the case of a failure to borrow, convert or continue, the Interest
Period that would have commenced on the date of such failure) in each case at
the applicable rate of interest for such Eurodollar Loans provided for herein
(excluding, however, the Applicable Percentage included therein, if any) over
(ii) the amount of interest (as reasonably determined by such Bank) which would
have accrued to such Bank on such amount by placing such amount on deposit for a
comparable period with leading banks in the interbank Eurodollar market. This
covenant shall survive the termination of this Agreement and the payment of the
Loans and all other amounts payable hereunder.
ARTICLE III. SUBSIDIARY GUARANTY
Section 3.1 The Subsidiary Guarantee.
Each of the Subsidiary Guarantors hereby jointly and severally
guarantees to each Bank, to each Affiliate of a Bank that enters into an
Interest Rate Protection Agreement and to the Agent as hereinafter provided the
prompt payment of the Subsidiary Guaranteed Obligations in full when due
(whether at stated maturity, as a mandatory prepayment, by acceleration, a
mandatory cash collateralization or otherwise) strictly in accordance with the
terms thereof. The Subsidiary Guarantors hereby further agree that if any of the
Subsidiary Guaranteed Obligations are not paid in full when due (whether at
stated maturity, as a mandatory prepayment, by acceleration, as mandatory cash
collateralization or otherwise), the Subsidiary Guarantors will, jointly and
severally, promptly pay the same, without any demand or notice whatsoever, and
that in the case of any extension of time of payment or renewal of any of the
Subsidiary Guaranteed Obligations, the same will be promptly paid in full when
due (whether at extended maturity, as a mandatory prepayment, by acceleration or
otherwise) in accordance with the terms of such extension or renewal.
Notwithstanding any provision to the contrary contained herein or in
any other of the Credit Documents or Interest Rate Protection Agreements, to the
extent the obligations of a Subsidiary 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 Subsidiary Guarantor hereunder shall be
limited to the maximum amount that is permissible under applicable law (whether
federal or state and including, without limitation, the Federal Bankruptcy
Code).
Section 3.2 Obligations Unconditional.
The obligations of the Subsidiary Guarantors under Section 3.1 hereof
are joint and several, absolute and unconditional, irrespective of the value,
genuineness, validity, regularity or enforceability of any of the Credit
Documents or Interest Rate Protection Agreements, or any other agreement or
instrument referred to therein, or any substitution, release or exchange of any
other guarantee of or security for any of the Subsidiary Guaranteed Obligations,
and, to the fullest extent permitted by applicable law, irrespective of any
other circumstance whatsoever which might otherwise constitute a legal or
equitable discharge or defense of a surety or Subsidiary Guarantor, it being the
intent of this Section 3.2 that the obligations of the Subsidiary Guarantors
hereunder shall be absolute and unconditional under any and all circumstances.
Each Subsidiary Guarantor agrees that such Subsidiary Guarantor shall have no
right of subrogation, indemnity, reimbursement or contribution against the
Borrower or any other Subsidiary Guarantor of the Subsidiary Guaranteed
Obligations for amounts paid under this Subsidiary Guaranty until such time as
the Banks (and any Affiliates of Banks entering into Interest Rate Protection
Agreements) have been paid in full, the Total Commitments under this Credit
Agreement have been terminated and no Person or Governmental Authority shall
have any right to request any return or reimbursement of funds from the Banks in
connection with monies received under the Credit Documents or Interest Rate
Protection Agreements. Without limiting the generality of the foregoing, it is
agreed that, to the fullest extent permitted by law, the occurrence of any one
or more of the following shall not alter or impair the liability of any
Subsidiary Guarantor hereunder which shall remain absolute and unconditional as
described above:
(i) at any time or from time to time, without notice to any
Subsidiary Guarantor, the time for any performance of or compliance
with any of the Subsidiary Guaranteed Obligations shall be extended, or
such performance or compliance shall be waived;
(ii) any of the acts mentioned in any of the provisions of any
of the Credit Documents, any Interest Rate Protection Agreement or any
other agreement or instrument referred to in the Credit Documents or
Interest Rate Protection Agreements shall be done or omitted;
(iii) the maturity of any of the Subsidiary Guaranteed
Obligations shall be accelerated, or any of the Subsidiary Guaranteed
Obligations shall be modified, supplemented or amended in any respect,
or any right under any of the Credit Documents, any Interest Rate
Protection Agreement or any other agreement or instrument referred to
in the Credit Documents or Interest Rate Protection Agreements shall be
waived or any other guarantee of any of the Subsidiary Guaranteed
Obligations or any security therefor shall be released or exchanged in
whole or in part or otherwise dealt with;
(iv) any Lien granted to, or in favor of, the Agent or any
Bank or Banks as security for any of the Subsidiary Guaranteed
Obligations shall fail to attach or be perfected; or
(v) any of the Subsidiary Guaranteed Obligations shall be
determined to be void or voidable (including, without limitation, for
the benefit of any creditor of any Subsidiary Guarantor) or shall be
subordinated to the claims of any Person (including, without
limitation, any creditor of any Subsidiary Guarantor).
With respect to its obligations hereunder, each Subsidiary Guarantor hereby
expressly waives diligence, presentment, demand of payment, protest and all
notices whatsoever, and any requirement that the Agent or any Bank exhaust any
right, power or remedy or proceed against any Person under any of the Credit
Documents, any Interest Rate Protection Agreement or any other agreement or
instrument referred to in the Credit Documents or Interest Rate Protection
Agreements, or against any other Person under any other guarantee of, or
security for, any of the Subsidiary Guaranteed Obligations.
Section 3.3 Reinstatement.
The obligations of the Subsidiary Guarantors under this Section 3 shall
be automatically reinstated if and to the extent that for any reason any payment
by or on behalf of any Person in respect of the Subsidiary Guaranteed
Obligations is rescinded or must be otherwise restored by any holder of any of
the Subsidiary Guaranteed Obligations, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise, and each Subsidiary Guarantor agrees
that it will indemnify the Agent and each Bank on demand for all reasonable
costs and expenses (including, without limitation, fees and expenses of counsel)
incurred by the Agent or such Bank in connection with such rescission or
restoration, including any such costs and expenses incurred in defending against
any claim alleging that such payment constituted a preference, fraudulent
transfer or similar payment under any bankruptcy, insolvency or similar law.
Section 3.4 Certain Additional Waivers.
Without limiting the generality of the provisions of this Section 3,
each Subsidiary Guarantor hereby specifically waives the benefits of N.C. Gen.
Stat. xx.xx. 26-7 through 26-9, inclusive. Each Subsidiary Guarantor further
agrees that such Subsidiary Guarantor shall have no right of recourse to
security for the Subsidiary Guaranteed Obligations, except through the exercise
of the rights of subrogation pursuant to Section 3.2.
Section 3.5 Remedies.
The Subsidiary Guarantors agree that, to the fullest extent permitted
by law, as between the Subsidiary Guarantors, on the one hand, and the Agent and
the Banks, on the other hand, the Subsidiary Guaranteed Obligations may be
declared to be forthwith due and payable as provided in Section 8.2 hereof (and
shall be deemed to have become automatically due and payable in the
circumstances provided in said Section 8.2) for purposes of Section 3.1 hereof
notwithstanding any stay, injunction or other prohibition preventing such
declaration (or preventing the Subsidiary Guaranteed Obligations from becoming
automatically due and payable) as against any other Person and that, in the
event of such declaration (or the Subsidiary Guaranteed Obligations being deemed
to have become automatically due and payable), the Subsidiary Guaranteed
Obligations (whether or not due and payable by any other Person) shall forthwith
become due and payable by the Subsidiary Guarantors for purposes of said Section
3.1.
Section 3.6 Rights of Contribution.
The Subsidiary Guarantors hereby agree, as among themselves, that if
any Subsidiary Guarantor shall become an Excess Funding Subsidiary Guarantor (as
defined below), each other Subsidiary Guarantor shall, on demand of such Excess
Funding Subsidiary Guarantor (but subject to the succeeding provisions of this
Section 3.6), pay to such Excess Funding Subsidiary Guarantor an amount equal to
such Subsidiary Guarantor's Pro Rata Share (as defined below and determined, for
this purpose, without reference to the properties, assets, liabilities and debts
of such Excess Funding Subsidiary Guarantor) of such Excess Payment (as defined
below). The payment obligation of any Subsidiary Guarantor to any Excess Funding
Subsidiary Guarantor under this Section 3.6 shall be subordinate and subject in
right of payment to the prior payment in full of the obligations of such
Subsidiary Guarantor under the other provisions of this Section 3, and such
Excess Funding Subsidiary Guarantor shall not exercise any right or remedy with
respect to such excess until payment and satisfaction in full of all of such
obligations. For purposes hereof, (i) "Excess Funding Subsidiary Guarantor"
shall mean, in respect of any obligations arising under the other provisions of
this Section 3 (hereafter, the "Guarantied Obligations"), a Subsidiary Guarantor
that has paid an amount in excess of its Pro Rata Share of the Guarantied
Obligations; (ii) "Excess Payment" shall mean, in respect of any Guarantied
Obligations, the amount paid by an Excess Funding Subsidiary Guarantor in excess
of its Pro Rata Share of such Guarantied Obligations; and (iii) "Pro Rata
Share", for the purposes of this Section 3.6, shall mean, for any Subsidiary
Guarantor, the ratio (expressed as a percentage) of (a) the amount by which the
aggregate present fair saleable value of all of its assets and properties
exceeds the amount of all debts and liabilities of such Subsidiary Guarantor
(including contingent, subordinated, unmatured, and unliquidated liabilities,
but excluding the obligations of such Subsidiary Guarantor hereunder) to (b) the
amount by which the aggregate present fair saleable value of all assets and
other properties of the Borrower and all of the Subsidiary Guarantors exceeds
the amount of all of the debts and liabilities (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of the Borrower and the Subsidiary Guarantors hereunder) of the
Borrower and all of the Subsidiary Guarantors, all as of the Closing Date (if
any Subsidiary Guarantor becomes a party hereto subsequent to the Closing Date,
then for the purposes of this Section 3.6 such subsequent Subsidiary Guarantor
shall be deemed to have been a Subsidiary Guarantor as of the Closing Date and
the information pertaining to, and only pertaining to, such Subsidiary Guarantor
as of the date such Subsidiary Guarantor became a Subsidiary Guarantor shall be
deemed true as of the Closing Date).
Section 3.7 Continuing Guarantee.
The guarantee in this Section 3 is a continuing guarantee, and shall
apply to all Subsidiary Guaranteed Obligations whenever arising.
ARTICLE IV. REPRESENTATIONS AND WARRANTIES
In order to induce the Agent and the Banks to enter into this
Agreement, each Credit Party hereby warrants and represents to the Agent and
each of the Banks, as of the Closing Date and as of the date of funding of each
Loan, as follows:
Section 4.1. Organization.
Each of the Borrower and the other Credit Parties is a corporation,
limited liability company or limited partnership, as the case may be, validly
existing and in good standing under the laws of the jurisdiction of its
organization, is duly qualified to do business in every jurisdiction where such
qualification is necessary (except for jurisdictions the failure in which to
qualify would not reasonably be expected to have a Material Adverse Effect),
will promptly correct any failure to qualify upon receipt of notice of such
failure, has the power and authority to own its assets and transact the business
in which it is engaged, and has obtained all necessary certificates, franchises,
and licenses (collectively "Licenses") for the operation of the business in
which it is engaged, except for Licenses the absence of which would not
reasonably be expected to have a Material Adverse Effect.
Section 4.2. Authorization.
(a) The execution, delivery and performance of the
Credit Documents required to be delivered by each Credit Party
(i) are within the organizational powers of
such Credit Party;
(ii) have been duly authorized by all necessary
organizational action of such Credit Party;
(iii) do not violate any provision of the Articles or
Certificate of Incorporation or Bylaws of such Credit Party or
of any law or material rule, regulation (including, without
limitation, Regulation U), order, writ, judgment, injunction,
decree, determination or award presently in effect and having
applicability to such Credit Party;
(iv) are not in conflict with and do not result in a
breach of or constitute a default under any material
indenture, loan or credit agreement, or any other material
agreement, lease or instrument to which such Credit Party is a
party or by which it or its properties may be bound or
affected; and
(v) do not result in, or require the creation or
imposition of, any mortgage, deed of trust, pledge, lien,
security, interest or other charge or encumbrance of any
nature upon or with respect to any of the properties now owned
or hereafter acquired by such Credit Party, except for the
encumbrances granted or to be granted to the Agent, for the
benefit of the Banks, pursuant to the Security Agreement and
the Credit Party Pledge Agreement.
(b) Except as listed on Schedule 2, the Borrower and each of
its Subsidiaries (if any) is in compliance with all applicable laws,
rules, regulations, writs, judgments, orders, injunctions, decrees,
determinations or awards applicable to it and is not materially in
default under any indenture, agreement, lease or instrument, where such
noncompliance or default would reasonably be expected to have a
Material Adverse Effect (the term "default" as used herein includes any
Event of Default or Incipient Default, as defined in Sections 8.1 and
5.2(a), respectively).
Section 4.3. Validity.
Each Credit Document to which it is a party have been or shall be duly
executed and delivered by each Credit Party under the terms of this Agreement,
and, when so executed, constitute the legal, valid and binding obligations of
such Credit Party, enforceable against such Credit Party and the Collateral in
accordance with their terms, except as such enforcement may be limited by
applicable bankruptcy, reorganization, or similar laws affecting the
enforceability of creditors' rights in general and except for generally
applicable principles of equity (collectively, the "General Exceptions").
Section 4.4. Governmental Approvals.
No filing with or action or approval of any Governmental Authority is
or will be required under existing law in connection with the valid execution,
delivery or performance by each of the Credit Parties of the Credit Documents to
which it is a party, or in connection with the validity and enforceability of
the security interests in the Collateral, except as has been accomplished or
obtained and none of which has been or is threatened to be rejected or revoked,
and except for the filing of the financing statements required under the
Security Agreement.
Section 4.5. Litigation.
Except as identified on Schedule 3, there are no actions, suits,
investigations or other proceedings pending or, to the knowledge of the Credit
Parties, threatened against or affecting the Borrower or any of its Subsidiaries
or any of their properties before any court or Governmental Authority which, if
determined adversely to the Borrower or any Subsidiary, would reasonably be
expected to have a Material Adverse Effect.
Section 4.6. Financial Condition.
(a) The financial statements delivered to the Agent pursuant
to Section 5.1(k) fairly present the financial condition of the
Borrower and its consolidated subsidiaries, on a consolidated basis, as
of the dates stated therein, and the results of the operations of the
Borrower and its consolidated subsidiaries, on a consolidated basis,
for the accounting periods covered therein; except as stated on
Schedule 2, as of the Closing Date the Borrower has no material
contingent tax or other liability not disclosed by or reserved against
in the balance sheets delivered as part of such financial statements;
there are no material unrealized or anticipated losses from any
commitment of the Borrower; and since the date and period covered by
such financial statements, there has been no circumstance, development
or event which would reasonably be expected to have a Material Adverse
Effect.
(b) As of the Closing Date, each Credit Party had a
positive net worth of at least one dollar.
Section 4.7. Records, Business Location and Subsidiaries.
The chief executive office and principal place of business of each of
the Credit Parties and the office where each of the Credit Parties keeps its
corporate and accounting records (including records relating to the Collateral)
is and, in the absence of 15 days' prior written notice to the Agent will
remain, located at 0000 Xxxxxxxxx Xxxx., Xxxxx 000, Xxxxxxxx, Xxxxxxxx 00000.
The Subsidiaries, including all Domestic and Foreign Subsidiaries, of each of
the Credit Parties are identified on Schedule 1, hereto.
Section 4.8. ERISA.
With respect to any employee benefit plan for the benefit of employees
of the Borrower or any of its subsidiaries ("Plan") that is subject to the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and
regulations issued pursuant to ERISA, the Borrower and its Subsidiaries are in
compliance in all material respects with the applicable provisions of ERISA,
except as stated in Schedule 2; no Plan maintained by the Borrower or any of its
subsidiaries has incurred any "accumulated funding deficiency" as defined in
Section 302 of ERISA or Section 412 of the Internal Revenue Code; no Reportable
Event as defined in Section 4043(b) of ERISA that requires notification of the
Pension Benefit Guaranty Corporation ("PBGC") has occurred with respect to any
Plan; and no provision of this Agreement will result in a Reportable Event or
violation of ERISA.
Section 4.9. Encumbrances.
None of the Collateral is subject to any assignment, lien, security
interest, charge or encumbrance, except for Permitted Liens. No effective
financing statement or other instrument similar in effect covering any of the
Collateral is on file in any recording office, except such as have been or will
promptly be filed in favor of the Agent relating to the Security Agreement,
Credit Party Pledge Agreement or the Prior Agreement and as permitted under
Section 7.2.
Section 4.10. Margin Stock.
The Credit Parties are not and will not be engaged in the business of
purchasing, carrying, or extending credit for the purpose of purchasing or
carrying "margin stock," as defined by Regulation U, the Employee Pledged Shares
are not "margin stock" as defined by Regulation U, and no proceeds of any Loan
hereunder will be used for the purpose of purchasing or carrying margin stock or
extending credit for such purpose.
Section 4.11. Governmental Regulations.
Neither the Borrower nor any of its Subsidiaries is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act or the Investment Company Act of 1940, each as amended. In addition,
neither the Borrower nor any of its Subsidiaries is (i) an "investment company"
registered or required to be registered under the Investment Company Act of
1940, as amended, and is not controlled by such a company, or (ii) a "holding
company", or a "subsidiary company" of a "holding company", or an "affiliate" of
a "holding company" or of a "subsidiary" of a "holding company", within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
Section 4.12. Taxes.
The Borrower and each of its Subsidiaries has filed all United States
income tax returns and all state and municipal tax returns which are required to
be filed, and has paid, or made provision for the payment of, all taxes which
have become due pursuant to said returns or pursuant to any assessment received
by it, except such taxes, if any, as are being contested in good faith and as to
which adequate reserves have been provided or which the failure to pay would not
reasonably be expected to have a Material Adverse Effect.
Section 4.13. Burdensome Documents.
Except as identified on Schedule 4, neither the Borrower nor any of its
Subsidiaries is a party to or bound by, nor are any of their respective
properties or operations materially affected by, any agreement, ordinance,
decree, regulation, order, injunction, award or judgment that, to the actual
knowledge of the Borrower's Vice President and Chief Financial Officer or
General Counsel, would reasonably be expected to have a Material Adverse Effect.
Section 4.14. Environmental Matters.
Neither the Borrower nor any of its Subsidiaries owns any real property
except as listed on Schedule 5. Neither the Borrower's Vice President and Chief
Financial Officer nor its General Counsel has received any actual notice that
any property owned, leased or operated by the Borrower or any of its
Subsidiaries has been listed or proposed for listing on the National Priorities
List established by the United States Environmental Protection Agency, or on any
other list developed or maintained by any federal, state or local governmental
entity and purporting to identify properties posing the threat of pollution or
contamination due to the presence of hazardous substances, nor has either
received notice or knowledge of such pollution or contamination of any property
owned, leased, or operated by the Borrower or any of its Subsidiaries.
Section 4.15 Employee Loans; Stock Plan; Qualified Employee
Status.
The Borrower's annual stock purchase plan for Qualified Employees (the
"Stock Plan"), and the Qualified Employee loan program offered in connection
therewith under the terms and provisions of this Agreement and the Employee
Notes (the "Employee Loan Program") comply in all material respects with all
applicable laws. The Borrower has complied with all applicable federal and state
securities laws in its disclosure to the Qualified Employees of the attendant
risks and burdens of purchasing the Borrower's common stock under the Stock
Plan. Each person receiving an Employee Loan, was at the time of the making
thereof, a Qualified Employee.
Section 4.16 Use of Proceeds.
Letters of Credit and all proceeds of the Revolving Credit Loans shall
be used by the Borrower for working capital, capital expenditures, shareholder
loans and general corporate purposes, provided, however, that proceeds of the
Revolving Credit Loans shall not be used to make payments of principal,
interest, or fees under or in connection with the Employee Loans at any time
that defaults under all or substantially all of the Employee Notes have occurred
and are continuing. All proceeds of the Employee Loans shall be used for
purchases by or for the benefit of Qualified Employees of common stock of the
Borrower.
Section 4.17 Year 2000 Compliance.
The Borrower has (i) initiated a review and assessment of all areas
within its and each of its Subsidiaries' business and operations (including
those affected by principal suppliers or vendors) that could be adversely
affected by the "Year 2000 Problem" (that is, the risk that computer
applications used by the Borrower or any of its Subsidiaries (or principal
suppliers or vendors) may be unable to recognize and perform properly
date-sensitive functions involving certain dates prior to and any date after
December 31, 1999), (ii) developed a plan and timeline for addressing the "Year
2000 Problem" on a timely basis and (iii) to date, implemented that plan in
accordance with that timetable. Based on the foregoing, the Borrower believes
that all computer applications (including those of its principal suppliers or
vendors) that are material to its or any of its Subsidiaries' business and
operations are reasonably expected on a timely basis to be able to perform
properly date-sensitive functions for all dates before and after January 1, 2000
(that is, be "Year 2000 Compliant"), except to the extent that a failure to do
so could not reasonably be expected to have a Material Adverse Effect.
Section 4.18 Accuracy and Completeness of Information.
All factual information heretofore, contemporaneously or hereafter
furnished by or on behalf of the Borrower or any of its Subsidiaries in writing
to the Agent or any Bank for purposes of or in connection with this Credit
Agreement or any Credit Documents, or any transaction contemplated hereby or
thereby is or will be true and accurate in all material respects on the date as
of which such information is dated or certified and not incomplete by omitting
to state any material fact necessary to make such information not misleading at
such time. There is no fact now known to the President, CEO, any Authorized
Financial Officer or the General Counsel of the Borrower or any of its
Subsidiaries, after due inquiry, which has, or would have, a Material Adverse
Effect which fact has not been set forth herein, in the financials statements
previously delivered to the Agent and the Banks, or any certificate, opinion or
other written statement made or furnished by the Borrower to the Agent.
ARTICLE V. CONDITIONS PRECEDENT
Section 5.1 Conditions Precedent to Closing.
The Banks' obligations under this Agreement are subject to the receipt
by the Agent, in form and substance satisfactory to the Agent and its counsel,
of each of the following:
(a) the Revolving Credit Notes, executed by the Borrower;
(b) this Agreement, with all Exhibits and Schedules,
executed by the Credit Parties;
(c) the Borrower Guaranty, executed by the Borrower;
(d) the Credit Party Pledge Agreement, executed by the
Credit Parties;
(e) the Security Agreement, executed by the Credit
Parties;
(f) financing statements executed by appropriate
officers of the Credit Parties and covering the
Collateral;
(g) a certificate of good standing issued by the appropriate
state officer with respect to the good standing of each of the Credit
Parties and their organizational documents on file;
(h) copies, certified by its Secretary or other
authorized representative, of each Credit
Party's organizational documents, with any amendments thereto;
(i) resolutions of the Board of Directors or other appropriate
authorizations of each Credit Party, certified by its Secretary or
other authorized representative authorizing the execution, delivery and
performance, as applicable, of each of the Credit Documents, and all
other documents necessary for performance of the obligations of such
Credit Party under this Agreement, and identifying by title all
officers or other authorized representatives of such Credit Party
authorized to execute requests for Loans under Section 5.2;
(j) favorable opinions of counsel (including Canadian
counsel as to perfection of the
Canadian Collateral) for the Credit Parties;
(k) financial statements of the Borrower and its consolidated
subsidiaries, as follows: (i) a balance sheet and statements of cash
flow, net worth, and income, all prepared on a consolidated basis and
in accordance with GAAP and all certified as to fair and complete
presentation by an Authorized Financial Officer as of the close of and
for the third quarter of the current fiscal year of the Borrower, (ii)
financial statements prepared on a consolidated basis, in accordance
with GAAP and certified as to fair and complete presentation by an
Authorized Financial Officer and by independent accountants of
recognized standing acceptable to the Agent and containing no material
qualifications, as of the close of and for the fiscal years 1996 and
1997 of the Borrower; and (iii) a statement of projected net worth and
income for the Borrower's 1998 fiscal year, prepared on a consolidated
basis and certified as to fair and complete presentation by an
Authorized Financial Officer;
(l) certificates of each Credit Party, executed by the
Secretary or other authorized representative of such Credit Party, as
to the incumbency and authenticity of signatures of the officers or
other authorized representatives of such Credit Party executing this
Agreement and any other documents required as conditions precedent
under this Section and containing specimen signatures of all officers
or other authorized representatives identified by such Credit Party
under subsection 5.1(g) above;
(m) a solvency certificate of each of the Credit
Parties, executed by its chief financial officer or other authorized
representative, substantially in the form of Exhibit K;
(n) evidence of insurance in compliance with Section 6.2(b)
hereof and insurance certificates naming the Agent as loss payee and
additional insured on all insurance policies (excluding workers'
compensation policies); and
(o) such other documents as the Agent may reasonably
request.
Section 5.2. Conditions Precedent to Loans and Issuance of
Letters of Credit.
(a) All Loans and Letters of Credit. As a condition precedent
to the funding of a Loan or the issuance of a Letter of Credit
hereunder (a "Credit Event"), (i) there shall exist no Event of Default
or event (an "Incipient Default") which, with notice or lapse of time,
or both, would constitute an Event of Default, either immediately prior
to, or after giving effect to such Credit Event (ii) the Borrower shall
have complied with all of the conditions stated in Section 5.1, (iii) a
Margin Stock Event shall not have occurred, (iv) all necessary
deliveries and filings to perfect the Agent's security interests in the
Collateral shall have been accomplished, and (v) the representations
and warranties of the Borrower set forth in Article IV hereof shall be
true and correct as if made and restated on the date of such Credit
Event.
(b) Revolving Credit Loans. As a further condition precedent
to the funding of a Revolving Credit Loan, the Borrower shall request a
Revolving Credit Loan borrowing by written notice (or telephone notice
promptly confirmed in writing) to the Agent not later than 12:00 noon
(Charlotte, North Carolina time) on the Business Day of the requested
borrowing in the case of Base Rate Loans, and on the third Business Day
prior to the date of the requested borrowing in the case of Eurodollar
Loans. Each such request for a borrowing (a "Notice of Borrowing")
shall be irrevocable and shall specify (A) that a Revolving Credit Loan
is requested, (B) the date of the requested borrowing (which shall be a
Business Day), (C) the aggregate principal amount to be borrowed, and
(D) whether the borrowing shall be comprised of Base Rate Loans,
Eurodollar Loans or a combination thereof, and if Eurodollar Loans are
requested, the Interest Period(s) therefor. If the Borrower shall fail
to specify in any such Notice of Borrowing (I) an applicable Interest
Period in the case of a Eurodollar Loan, then such notice shall be
deemed to be a request for an Interest Period of one month, or (II) the
type of Revolving Credit Loan requested, then such notice shall be
deemed to be a request for a Base Rate Loan hereunder.
(c) Employee Loans. As a further condition precedent to the
funding of any Employee Loan, the Borrower shall deliver to NationsBank
not later than 12:00 noon (Charlotte, North Carolina time) on the
requested funding date, an appropriate Notice of Borrowing specifying
that the funding of Employee Loans is requested, the date of the
requested borrowing (which shall be a Business Day) and the amount to
be borrowed.
As an additional condition precedent to the funding of any
Employee Loan, the Borrower and/or its transfer agent shall have
received from the Qualified Employee (or personal holding company) to
whom the Employee Loan is to be made, such additional pledge
instruction, if any, as the Borrower and/or its transfer agent may
require in order to register on its books the pledge to NationsBank of
the Employee Pledged Shares.
(d) Funding Obligations. In no event shall the Agent or
NationsBank be required to fund any portion of the Loans requested
hereunder in an amount in excess of the actual funds received from the
Banks (including NationsBank in its capacity as a Bank) pursuant to a
Notice of Borrowing.
ARTICLE VI. AFFIRMATIVE COVENANTS
Each of the Credit Parties covenants and agrees that, until all of its
obligations under the Credit Documents have been satisfied in full (or waived)
and until the Total Commitments have been terminated:
Section 6.1. Payments Hereunder.
Each Credit Party shall make all payments of principal, interest, fees,
and all other payments required hereunder, under the Revolving Credit Notes,
under the Borrower Guaranty and under any other agreements with any of the Banks
to which such Credit Party is party, as and when due.
Section 6.2. Existence and Good Standing; Insurance; Conduct.
The Borrower shall do or cause to be done all things necessary, with
respect to itself and each of its subsidiaries, (a) to preserve and keep in full
force and effect its existence, employee stock plans, rights, licenses, permits,
and franchises and comply with all applicable laws and all rules, regulations
and orders of federal, state and local regulatory bodies having jurisdiction
applicable to it except for any noncompliance with which would reasonably be
expected to have a Material Adverse Effect; (b) to maintain and protect its
material assets or properties used or useful in the conduct of its operations in
a prudent manner including, without limitation, the maintenance at all times of
such insurance upon its insurable properties, operations and professional
services with reputable insurers as would be prudent for companies in the same
or similar business as the Borrower or such Guarantor; (c) to conduct its
operations and continue the conduct of its business without any substantial
change in the general nature of such operations or business from that in effect
on the Closing Date; and (d) to keep proper books of records and accounts in
which full, true and correct entries in conformity with GAAP and Requirements of
Law shall be made of all dealings and transactions in relation to its business
and activities.
Section 6.3. Taxes and Charges.
The Borrower shall, and shall cause each of its Subsidiaries to, timely
file returns and pay and discharge all material taxes, assessments and
governmental fees, charges or levies imposed upon it or its income or profits or
upon its properties or any part thereof, before the same shall be in default, as
well as all lawful claims which, if unpaid, might become a lien or charge upon
such properties or any part thereof; provided, however, that the Borrower shall
not be required to pay and discharge or cause to be paid and discharged any such
tax, assessment, charge, levy or claim so long as the validity or amount thereof
shall be contested in good faith by appropriate proceedings and the Borrower
shall have set aside on its books adequate reserves therefor.
Section 6.4. Financial Statements.
The Borrower shall deliver or cause to be delivered to the Agent and
the Banks,
(a) within 120 days after the end of each fiscal year of the
Borrower, (i) the annual financial statements of the Borrower and its
consolidated subsidiaries, on a consolidated basis, containing a
balance sheet as at the end of such fiscal year and statements of
income, cash flows, and changes in stockholders' equity for such fiscal
year, prepared in accordance with GAAP, certified as to fair and
complete presentation by an Authorized Financial Officer and certified
by independent accountants of recognized standing acceptable to the
Agent, which accountants shall also include an opinion stating that
their examination of the financial statements was conducted in
accordance with generally accepted auditing standards and, if they have
prepared a management letter as part of their responsibilities to the
Borrower, a copy of such management letter promptly upon completion of
such letter; and (ii) calculations, reviewed and certified by an
Authorized Financial Officer, showing the Borrower's compliance with
the applicable financial standards contained in Section 7.6;
(b) within 50 days after the end of each of the first three
quarters of each fiscal year of the Borrower (except with respect to
item (b)(ii) below, which shall be required to be delivered within 50
days after the end of each of the second and third quarters of each
fiscal year of the Borrower only) (i) a balance sheet of the Borrower
and its consolidated subsidiaries and related statements of income,
cash flow, and net worth, all prepared on a consolidated basis and in
accordance with GAAP, and all certified as to fair and complete
presentation by an Authorized Financial Officer as of the close of and
for such period; (ii) a statement of projected net worth and income,
prepared on a consolidated basis and certified as to fair and complete
presentation by an Authorized Financial Officer of the Borrower for the
Borrower's then-current fiscal year; and (iii) calculations, reviewed
and certified by an Authorized Financial Officer, showing the
Borrower's compliance with the applicable financial standards contained
in Section 7.6 hereof;
(c) no later than 120 days after the commencement of each
fiscal year of the Borrower, a projected balance sheet and income
statement for such fiscal year, on a consolidated basis;
(d) concurrently with the delivery of the financial statements
referred to in Sections 6.4(a) and 6.4(b), a certificate as to the
Borrower's compliance with clause (viii) of the definition of
"Permitted Investments" and specifying the aggregate balance (i)
credited to all Separation Allowance Accounts and (ii) the aggregate
balance of Permitted CSAP Loans, reviewed and certified by an
Authorized Financial Officer;
(e) upon the written request of the Agent and with reasonable
notice, such other financial statements and reports as the Agent may reasonably
deem necessary to provide current financial information; and
(f) concurrently with the delivery of the financial statements
and calculations required under subsections (a)-(f) of this Section, a
certificate of an Authorized Financial Officer certifying the fair and complete
presentation of the data and information used in making the calculations and
stating that such annual financial statements have been prepared in accordance
with GAAP and that there exists no Event of Default or Incipient Default
hereunder.
Section 6.5 Reports.
Each Credit Party shall deliver to the Agent and the Banks:
(a) as soon as reasonably possible, and, in any event, within
five Business Days after the Credit Party receives notice or knowledge
thereof or learns facts which would lead a reasonable Person to
undertake diligent inquiry, a report or statement executed by a senior
officer of the Credit Party with respect to (i) the occurrence of any
Reportable Event as defined by ERISA and regulations thereunder that
requires notification to the PBGC, (ii) the occurrence of any Event of
Default or Incipient Default or the material failure to observe or
perform any covenant set forth herein or in any other agreement with
any of the Banks to which the Borrower or any Subsidiary is a party,
and any action taken or contemplated with respect thereto, and (iii)
(A) any pending or threatened litigation or administrative proceedings
or investigations against or affecting the Borrower or any of its
Subsidiaries which, if determined adversely to the Borrower or any
Subsidiary would reasonably be expected to have a Material Adverse
Effect, and (B) any reserves set aside or to be set aside in connection
with such proceedings, in accordance with GAAP; and
(b) such other reports as the Agent may, from time to time,
reasonably request in writing from the Borrower.
Section 6.6. Loan Balances.
(a) Revolving Credit Notes. The aggregate outstanding
principal balance under the Revolving Credit Notes, plus LOC
Obligations will, at no time, exceed an amount equal to $95,000,000
(except only as such amount may be increased to a maximum of
$107,500,000, with a corresponding decrease in the Employee Loan
Commitment, pursuant to Section 2.8(d) or decreased pursuant to Section
2.8(e));
(b) Employee Notes. The aggregate outstanding principal
balance under the Employee Notes will, at no time, exceed an amount
equal to $25,000,000 (except only as such amount may be increased to a
maximum of $37,500,000, with a corresponding decrease in the Aggregate
Revolving Credit Commitment, pursuant to Section 2.8(d) or decreased
pursuant to Section 2.8(e)); and
(c) Aggregate Total Commitments. The aggregate outstanding
balance under the Revolving Credit Notes and the Employee Notes, plus
the LOC Obligations will, at no time, exceed $120,000,000 (except only
as such amount may be decreased pursuant to Section 2.8(e)).
Section 6.7. Uncertificated Securities.
With respect to all Employee Pledged Shares that consist of
uncertificated securities, the Borrower shall, or shall cause its transfer agent
to, at all times and without limitation of any other requirements imposed by
applicable laws comply with an issuer's obligations and duties regarding
uncertificated securities and pledges thereof or security interests therein
under Articles 8 and 9 of the Uniform Commercial Code as in effect in North
Carolina (the "U.C.C."), including without limitation Article 8, Sections 207
(Rights and Duties of Issuer with Respect to Registered Owners and Registered
Pledgees), 401 (Duty of Issuer to Register Transfer, Pledge, or Release), and
408 (Statements of Uncertificated Securities). All statements of uncertificated
securities as required by Sections 8-408(1), (2) and (7) of the U.C.C. shall be
substantially in the forms of Exhibits G and H, as applicable. Such other
statements of uncertificated securities as are required by Section 8-408 of the
U.C.C. or may from time to time be properly issued by the Borrower and/or its
transfer agent shall conform generally to the forms of Exhibits G and H as
appropriate.
Section 6.8. Positive Net Worth.
Each of the Borrower and the Subsidiary Guarantors shall maintain at
all times a positive net worth of at least one dollar.
Section 6.9. Bylaws.
The Borrower shall use all reasonable best efforts to cause Section 9.4
of its Bylaws to be amended to clarify that the liens granted by Qualified
Employees in favor of the Agent on their Employee Stock do not constitute the
type of liens referenced in such Section 9.4 for the purposes thereof.
Section 6.10. Year 2000 Compliance.
The Borrower will promptly notify the Agent in the event the Borrower
discovers or determines that any computer application (including those of its
principal suppliers or vendors) that is material to it or any of its
Subsidiaries' business or operations will not be Year 2000 Compliant, except to
the extent that such failure could not reasonably be expected to have a Material
Adverse Effect.
Section 6.11. Borrower Guaranty.
All Employee Loans shall be unconditionally guaranteed by the Borrower
under a guaranty in the form of Exhibit C in the full amount of the Employee
Loans (the "Borrower Guaranty").
Section 6.12. Employee Pledge Agreements; Employee Pledged Shares.
(a) Employee Pledge Agreements. All common stock of the
Borrower purchased or refinanced with the proceeds of the Employee
Loans (the "Employee Pledged Shares") shall be pledged to NationsBank
and the Banks, to the extent of their participations, by the purchasers
of the Employee Pledged Shares pursuant to stock pledge letter
agreements ("Employee Pledge Agreements") substantially in the form of
Exhibit D-1 (for individual purchasers) or D-2 (for personal holding
companies).
(b) Delivery of Certificates; Book Entries. (i) The Borrower
shall cause all certificates and any other instruments or documents
evidencing ownership of Employee Pledged Shares, if any, to be
delivered to NationsBank at the address specified in Section 10.8
hereof promptly upon the funding of the related Employee Loans, shall
cause all such certificates to be accompanied by executed assignments
separate from the certificates in blank in the form of Exhibit E hereto
("Employee Stock Powers"), and shall cause the following legend to be
placed on all such certificates:
"In the event the shares represented by this certificate are
sold, the purchaser may be required to remit the purchase
price directly to the Company to be applied in payment of
certain Indebtedness of the registered holder to NationsBank,
N.A., as agent for itself and certain other banks."
(ii) With respect to all Employee Pledged Shares that consist
of uncertificated securities, the Borrower shall, or shall cause its
transfer agent to, (A) register on its books the pledges to NationsBank
of such Employee Pledged Shares promptly upon the funding of the
related Employee Loans, (B) identify on all initial and periodic
statements and all other statements or notices respecting the Employee
Pledged Shares the pledges to NationsBank of the Employee Pledged
Shares and the restriction that any purchaser of the Employee Pledged
Shares may be required to remit the purchase price directly to the
Borrower to be applied in payment of the related Employee Loan, and (C)
have all pledgee notices and statements respecting the Employee Pledged
Shares delivered to NationsBank at the address specified in Section
10.8 hereof.
(c) Sales. Upon the occurrence of any event giving NationsBank
the option to accelerate the maturity date under any Employee Note or
the termination of employment of the maker of any Employee Note as
provided in Section 9.4 of the Borrower's Bylaws, the Borrower may
treat such event or termination as an offer to sell to the Borrower or
to one or more Qualified Employees the Employee Pledged Shares affected
thereby or pledged pursuant to the Employee Note affected thereby under
the terms and conditions of Section 9.4 of the Borrower's Bylaws. In
the event that any or all Employee Pledged Shares are sold to one or
more Qualified Employees prior to repayment of the associated Employee
Loan, the Borrower shall direct such Qualified Employees to remit the
purchase price directly to the Borrower. The Borrower shall apply the
proceeds of any sale of Employee Pledged Shares (i) first, to pay any
remaining balance under the Employee Note secured by the Employee
Pledged Shares sold (including principal, interest, and collection
expenses), (ii) second, to pay any other amounts required by applicable
law, and (iii) third, to the maker of the related Employee Note to the
extent, if any, of any surplus proceeds. Upon payment by the Borrower
of the remaining amounts owed under the Employee Note secured by the
Employee Pledged Shares sold, NationsBank shall return such Employee
Pledged Shares to the Borrower.
Section 6.13. Additional Guaranties, Stock Pledges and Further
Assurances.
(a) Domestic Subsidiaries, Etc.. At any time any Person
becomes a Material Domestic Subsidiary of the Borrower, the Borrower
shall promptly notify the Agent thereof, and shall (i) promptly cause
such Domestic Subsidiary to become a Subsidiary Guarantor by execution
of a Joinder Agreement, (ii) deliver with the Joinder Agreement,
supporting resolutions, incumbency certificates, corporate formation
and organizational documentation and opinions of counsel as the Agent
may reasonably request, and (iii) deliver stock certificates and
related pledge agreements or pledge joinder agreements evidencing the
pledge of 100% of the Voting Stock of such Domestic Subsidiary and all
Material Domestic Subsidiaries of such Domestic Subsidiary and, upon
the request of the Agent or the Majority Banks, 65% of the Voting Stock
of all Foreign Subsidiaries of such Domestic Subsidiary and such other
ownership interests of such Domestic Subsidiary in foreign Persons,
together, in each case, with undated stock or other transfer powers
executed in blank.
(b) Foreign Subsidiaries, Etc.. At any time any Person becomes
a Foreign Subsidiary or the Borrower or any Subsidiary Guarantor shall
acquire an ownership interest in any foreign Person, the Borrower shall
promptly notify the Agent thereof, and shall, upon request of the Agent
or the Majority Banks, (i) deliver supporting resolutions, incumbency
certificates, corporation formation and organizational documentation
and opinions of counsel, and (ii) deliver stock certificates or other
evidence of ownership (where required for perfection under local law)
and a related pledge agreement evidencing the pledge of 65% of the
Voting Stock of such Foreign Subsidiary or, if less, all of the
ownership interests in such other Person acquired by the Borrower or
any such Subsidiary Guarantor, together with undated stock or other
transfer powers executed in blank.
(c) Further Assurances. Each Credit Party shall, and shall
cause each of its Subsidiaries to, take such action at its own expense
as requested by the Agent, to ensure that the Agent has a first
priority perfected lien to secure the Obligations in all personal
property of the Credit Parties located in the United States and Canada
and, to the extent deemed material by the Agent or the Majority Banks,
in its or their sole reasonable discretion, all other personal property
of the Credit Parties now or hereafter owned or acquired by the Credit
Parties. Each Credit Party shall, and shall cause each of its
Subsidiaries to, adhere to the covenants regarding the location of
personal property as set forth in the Security Agreement.
Section 6.14. Post-Closing Matters.
Within 45 days from the Closing Date, the following conditions
subsequent shall have been satisfied:
(a) Receipt by the Agent of Schedule 7 to this Credit
Agreement setting forth Investments of the Borrower and its
Subsidiaries existing as of the Closing Date, as referenced in clause
(iv) of the definition of "Permitted Investments";
(b) Receipt by the Agent of revised Schedule 6 to this Credit
Agreement updating such Schedule to include Indebtedness of the
Borrower and its Subsidiaries as of June 30, 1998; such Indebtedness
shall not differ materially in type and kind from that listed on
Schedule 6 delivered on the Closing Date; and
(c) Receipt by the Agent of favorable opinions of Canadian
counsel (as to perfection of the Canadian Collateral) for the Credit
Parties and evidence of filing of financing statements (or their
equivalent) under Canadian law to perfect the security interests in the
Canadian Collateral.
ARTICLE VII. NEGATIVE COVENANTS
Each of the Credit Parties covenants and agrees that, until such time
as all obligations under the Credit Documents have been satisfied in full (or
waived) and until the Total Commitments have been terminated:
Section 7.1. Indebtedness.
Neither the Borrower nor any if its Subsidiaries shall contract,
create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness arising or existing under this Credit
Agreement and the other Credit Documents;
(b) Indebtedness outstanding on the date hereof and set forth
in Schedule 6, and renewals, refinancings and extensions thereof on
terms and conditions no less favorable than for such existing
Indebtedness;
(c) Indebtedness to any Interest Swap Provider relating
to the obligations hereunder;
(d) purchase money Indebtedness (including obligations in
respect of Capital Leases) hereafter incurred to finance the purchase
of fixed assets, provided that (i) the total of all such Indebtedness
(including any such Indebtedness referred to in Section (b) above)
shall not exceed an aggregate principal amount of $1,000,000 at any one
time outstanding, (ii) such Indebtedness when incurred shall not exceed
the purchase price of the asset(s) financed, and (iii) no such
Indebtedness shall be refinanced for a principal amount in excess of
the principal balance outstanding thereon at the time of such
refinancing;
(e) unsecured Indebtedness incurred in connection with
any acquisition or Investment permitted under Section 7.3(c) hereof;
(f) guaranty and other contingent obligations of the Borrower
in favor of its Subsidiaries in connection with Indebtedness permitted
under this Section 7.1.
Section 7.2. Liens.
Neither the Borrower nor any of its Subsidiaries shall contract,
create, incur, assume or permit to exist any Lien with respect to any of their
respective property or assets of any kind (whether real or personal, tangible or
intangible), whether now owned or hereafter acquired, except for Permitted
Liens.
Section 7.3. Consolidation, Merger, Sale or Purchase of Assets,
etc.
Neither the Borrower nor any of its Subsidiaries shall:
(a) Enter into a transaction of merger or consolidation,
except (i) a member of the Consolidated Group may be a party to a transaction of
merger or consolidation with another member of the Consolidated Group and (ii)
any acquisition permitted pursuant to clause (c) immediately below may be
effected by a merger with and into a Credit Party or Subsidiary of a Credit
Party so long as, in either case, (A) if the Borrower is a party thereto, (x)
the Borrower shall be the surviving corporation and (y) the Borrower shall not
alter or amend its existing capital structure in a manner changing its status as
an employee-owned corporation, (B) if a Subsidiary Guarantor is a party thereto
and the Borrower is not a party thereto, the Subsidiary Guarantor shall be the
surviving corporation, and (C) no Default or Event of Default shall exist either
immediately prior to or immediately after giving effect thereto;
(b) Sell, lease, transfer or otherwise dispose of assets,
property and/or operations (including any sale-leaseback transaction, but
excluding (x) the sale of inventory in the ordinary course of business; (y) the
sale or disposition of plant, property and equipment which is no longer useful
in the business or as to which the proceeds therefrom are reinvested in plant,
property and equipment within six months thereof; and (z) the sale, lease,
transfer or other disposition of the Wystar record keeping software system),
unless
(i) the book value of such assets, property
and/or operations do not in the
aggregate exceed $5,000,000 in any fiscal year, and
(ii) no Default of Event of Default exists or
would exist after giving effect
thereto on a Pro Forma Basis,
without the prior written consent of the Majority Banks;
(c) Acquire all or any portion of the capital stock or other
ownership interest in any Person or all or any substantial portion of the
assets, property and/or operations of any Person or make any Investment in any
Subsidiary, without the prior written consent of the Majority Banks, unless
(i) the amount of any such acquisition or Investment,
together with any other acquisitions or Investments made pursuant to
this subsection (c) shall not exceed the sum of (A) $10,000,000 in the
aggregate in any fiscal year plus (B) the amount of any payment due in
such fiscal year in connection with the KPMG Acquisition (of which sum,
not more than $10,000,000 may be paid in cash in such fiscal year);
provided, however, that the total amount of any such acquisition or
Investment in any one Person or any one Subsidiary shall not exceed
$20,000,000 in the aggregate at any one time; and provided, further,
that, notwithstanding the foregoing, the total amount paid in
connection with the KPMG Acquisition shall not exceed $16,000,000;
(ii) the Board of Directors of the Person which
is the subject of the acquisition
shall have approved the acquisition; and
(iii) no Default or Event of Default would exist
after giving effect thereto on a Pro Forma Basis; or
(d) In the case of the Borrower and any Material Subsidiary
which is not wholly-owned, liquidate, wind-up or dissolve, whether voluntarily
or involuntarily (or suffer to permit any such liquidation or dissolution).
Section 7.4. Fiscal Year; Governing Documents.
None of the Credit Parties shall (a) change its fiscal year, unless (i)
required to do so by law, (ii) 60 days' advance written notice thereof is given
to the Agent, and (iii) covenants and agreements in this Agreement are amended
as appropriate to accommodate such change, (b) materially amend or alter its
certificate of incorporation or (c) materially amend or alter any provision of
its Bylaws (including, without limitation, Section 9 of its Bylaws) relating in
any way to such Credit Party's representations and warranties or ability fully
and timely to comply with all of its obligations under this Agreement.
Section 7.5. Investments.
Neither the Borrower nor any of its subsidiaries shall lend money or
extend credit or make advances to any Person, or purchase or acquire any stock,
obligations or securities of, or any other interest in, or make any capital
contribution to, or otherwise make an Investment in, any Person except for
Permitted Investments.
Section 7.6. Financial Covenants.
The Borrower, on a consolidated basis with its consolidated
subsidiaries, shall not:
(a) As of the end of each fiscal quarter, cause or suffer its Net Worth
to be less than the following amounts during the applicable periods indicated
below:
Period Amount
Closing Date to June 29, 1999 $2,500,000
June 30, 1999 to June 29, 2000 $2,500,000 plus 50% net income
for the fiscal year ended June 30, 1999
June 30, 2000 to June 29, 2001 $2,500,000 plus 50% cumulative net income
for the fiscal years ended June 30, 1999 and
2000
June 30, 2001 to June 29, 2002 $2,500,000 plus 50% cumulative net income
for the fiscal years ended June 30, 1999,
2000 and 2001
June 30, 2002 to June 29, 2003 $2,500,000 plus 50% cumulative net income
for the fiscal years ended June 30, 1999,
2000, 2001, and 2002
June 30, 2003 to June 29, 2004 $2,500,000 plus 50% cumulative net income
for the fiscal years ended June 30, 1999,
2000, 2001, 2002 and 2003
(b) As of the end of each fiscal quarter, cause or suffer the Fixed
Charge Coverage Ratio to be less than 1.5 to 1 for the immediately preceding
four fiscal quarters as of each Calculation Date.
(c) As of the end of each fiscal quarter, cause or suffer the Leverage
Ratio to be greater than 2.5 to 1.0 for the immediately preceding four fiscal
quarters as of each Calculation Date.
Section 7.7. Franchises.
Neither the Borrower nor any of its subsidiaries shall suffer the final
revocation, suspension, material amendment or termination of any franchise,
agreement, permit, or license as a result of which it is reasonably likely to
suffer a Material Adverse Effect.
Section 7.8. Certificated Securities.
The Borrower shall not issue certificates for any Employee Pledged
Shares except upon 30 days' prior written notice to the Agent.
Section 7.9. Capital Expenditures.
The Borrower and its Subsidiaries shall not incur Capital Expenditures
in excess of $25,000,000 in the aggregate in any fiscal year plus, for fiscal
years occurring after the current fiscal year, the unused portion from the
immediately preceding fiscal year beginning with the first fiscal year to occur
after the Closing Date.
Section 7.10. Transaction with Affiliates.
Neither the Borrower nor any of its subsidiaries shall enter into or
permit to exist any transaction or series of transactions with any officer,
director, shareholder, subsidiary or Affiliate of such Person other than (a)
transactions permitted by Section 7.1, Section 7.2, Section 7.3 or Section 7.5,
(b) normal compensation and reimbursement of expenses of officers and directors,
(c) provision of financial and other services and the sharing of know-how,
technology and office space in the ordinary course of business, and (d) except
as otherwise specifically limited in this Agreement, other transactions which
are entered into in the ordinary course of such Person's business on terms and
conditions substantially as favorable to such Person as would be obtainable by
it in a comparable arms-length transactions with a Person other than an officer,
director, shareholder, subsidiary or Affiliate.
Section 7.11. Limitation on Restrictions on Subsidiary Dividends
and Other Distributions, etc.
Neither the Borrower nor any of its Subsidiaries shall, 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 Person to (a) pay dividends or make any other distribution on any
of such Person's capital stock, (b) subject to subordination provisions, pay any
Indebtedness owed to the Borrower, (c) make loans or advances to the Borrower or
(d) transfer any of its property 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, (ii) any agreement or
other instrument of a Person existing at the time it becomes a Subsidiary of the
Borrower in accordance with Section 7.5, provided that such encumbrance or
restriction is not applicable to any other Person, or any property of any other
Person, other than such Person becoming a Subsidiary of the Borrower and was not
entered into in contemplation of such Person becoming a Subsidiary of the
Borrower and (iii) this Agreement and the other Credit Documents.
Section 7.12 Issuance and Sale of Subsidiary Stock.
The Borrower will not, except to qualified directors or other nominees
(of nominal amounts of stock) where required by applicable law, sell, transfer
or otherwise dispose of, any shares of capital stock of any of its Subsidiaries
or permit any of its Subsidiaries to issue, sell or otherwise dispose of, any
shares of capital stock of any of its Subsidiaries to any Person other than the
Borrower or its Subsidiaries.
ARTICLE VIII. DEFAULT
Section 8.1. Events of Default.
Each of the following events shall constitute an "Event of Default"
hereunder if such event shall not be remedied within the time period set forth
below:
(a) The Borrower shall fail to pay (i) any amount of principal
(except required prepayments) hereunder or under the Revolving Credit
Notes when due and payable, or (ii) any amount of interest or required
prepayment of principal or fee required to be paid hereunder, within
five days after the date when due and payable;
(b) The Borrower or any of the Borrower's Subsidiaries shall
fail to pay any Indebtedness in excess of $3,000,000 (other than under
this Agreement) when due (whether by scheduled maturity, by required
prepayment, by acceleration, by demand or otherwise), shall fail to
meet its obligations under the terms of the Borrower Guaranty or any
other material guaranty when called upon to do so, or shall fail to
perform any material term, covenant or agreement on its part to be
performed under any agreement or instrument evidencing or securing or
relating to any such Indebtedness or guaranty when required to be
performed, if the effect of any such failure is to accelerate, or to
permit the holder or holders of such Indebtedness or the trustee under
any such agreement or instrument to accelerate, the maturity of such
Indebtedness or of any obligation guaranteed by the Borrower, and the
Borrower has not cured such failure within the grace period provided by
the applicable agreement or instrument, whether or not such holders or
trustees elect to exercise such remedy or to waive such failure;
(c) Any representation or warranty made by the Borrower or any
of its Subsidiaries herein or in any certificate, agreement,
instrument, report or statement contemplated by or made or delivered
pursuant to or in connection herewith or any other agreement with any
of the Banks to which the Borrower or such Subsidiary is a party, shall
be, at the time of the making or deemed making of such representation
or warranty, incorrect in any material respect;
(d) The Borrower or any of its Subsidiaries shall fail to
observe or perform any covenant or agreement contained in (i) Section
2.6 (as it pertains to Employee Notes), Section 2.8(b), the
organizational existence clause of Section 6.2(a), Section 6.4, Section
6.5(a) or Sections 7.1, 7.2, 7.3, 7.5, 7.6, 7.9, 7.11 and 7.12, or (ii)
any other Section of this Agreement and such failure shall continue for
more than 20 days after the Borrower shall have notice, knowledge or
reason to know of any cause giving rise to such failure;
(e) The Borrower or any of the Borrower's Material
Subsidiaries shall generally not pay its debts as they become due or
admit in writing its inability generally so to pay its debts, make a
material assignment for the benefit of creditors, seek an order for
relief in bankruptcy, become insolvent within the meaning of the
Federal Bankruptcy Code, petition or apply to any tribunal for the
appointment of any receiver, custodian, liquidator, trustee, or similar
official (hereinafter "Official") for it or any substantial part of its
property, commence any proceeding relating to it under any bankruptcy,
reorganization, arrangement, readjustment of debt, dissolution or
liquidation law or statute of any jurisdiction (including, without
limitation, the Federal Bankruptcy Code) or there shall be commenced
against the Borrower any such proceeding which remains unstayed or
undismissed for a period of 60 days, or the Borrower shall consent to,
approve of or acquiesce in any such proceeding or the appointment of
any such Official;
(f) The Borrower or any of the Borrower's Subsidiaries shall
suffer the entry of judgment against it by any court of record having
jurisdiction over it or any of its properties for the payment of money,
if the aggregate of all such judgments outstanding against the
Borrower, on a consolidated basis, is in excess of $3,000,000, or shall
suffer the issuance of a writ of attachment of any material portion of
its assets, and the Borrower shall not discharge the same, fully bond
or insure against its discharge, provide for its discharge in
accordance with its terms, or procure a stay of execution thereon
within 45 days from the date of entry thereof, unless execution thereon
is effectively stayed pending further proceedings;
(g) Any security interest or lien granted or reaffirmed in the
Security Agreement or the Credit Party Pledge Agreement in any material
portion of the Collateral shall, in any material respect, for any
reason cease to be a valid and perfected security interest, encumbrance
or lien having first priority as provided therein;
(h) Any Reportable Event (as defined in Section 4043 of ERISA)
that requires notification to the PBGC and which the Agent determines
in good faith might constitute grounds for the termination of any Plan
covered by Title IV of ERISA or for the appointment by the appropriate
United States District Court of a trustee to administer any such Plan
shall have occurred and be continuing 45 days after written notice to
such effect shall have been given to the Borrower by the Agent, or any
such Plan shall be terminated, or a trustee shall be appointed by an
appropriate United States District Court to administer any such Plan,
or the PBGC shall institute proceedings to terminate any such Plan or
to appoint a trustee to administer any such Plan, and in any such case
the aggregate amount of vested unfunded liabilities under such Plan
shall exceed $3,000,000;
(i) Defaults under all or substantially all of the
Employee Notes have occurred and are continuing;
(j) The Borrower Guaranty shall be held invalid or
unenforceable against the Borrower, or
the Borrower shall deny or disaffirm its obligations thereunder;
(k) Except to the extent permitted under this Credit
Agreement, the guaranty given by any Subsidiary Guarantor hereunder or
any material provision thereof shall cease to be in full force and
effect, or any Subsidiary Guarantor hereunder or any Person acting by
or on behalf of such Subsidiary Guarantor shall deny or disaffirm such
Subsidiary Guarantor's obligations under such guaranty, or any
Subsidiary Guarantor shall default in the due performance or observance
of any term, covenant or agreement on its part to be performed or
observed pursuant to such guaranty; or
(l) A Change of Control shall occur.
Section 8.2. Acceleration.
Upon the occurrence of any Event of Default, the Majority Banks, by
written notice to the Agent and the Borrower, may terminate the Total
Commitments and instruct the Agent to declare the entire Indebtedness of the
Credit Parties then outstanding hereunder or under the Notes immediately due and
payable (including the payment of cash collateral as additional security for the
LOC Obligations) without presentment, demand, protest, notice of protest or any
other notice of any kind, all of which are hereby expressly waived.
Notwithstanding the foregoing provisions of this section, the entire
Indebtedness of the Credit Parties then outstanding hereunder or under the Notes
shall become immediately due and payable (and the Borrower shall pay one hundred
percent cash collateral as additional security for the LOC Obligations) and the
Total Commitments shall terminate, without notice or election of any kind and
without need for any action by the Banks or the Agent, if an Event of Default
specified in Section 8.1(e) hereof shall occur. The Banks shall have no
obligation to make any Loans or disburse any loan proceeds during the existence
of any Event of Default or Incipient Default.
Section 8.3. Right of Setoff.
Upon the occurrence and during the continuance of any Event of Default
not cured in accordance with this Agreement, each of the Banks is hereby
authorized at any time and from time to time, without notice to the Credit
Parties (any such notice being hereby expressly waived by the Credit Parties),
to set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held, and any other Indebtedness at any time
owing, by such Bank to or for the credit or the account of any Credit Party
against all of the obligations of such Credit Party, irrespective of whether or
not the Agent shall have made any demand under this Agreement or the Notes, and
although such obligations may be unmatured. All amounts set off by a Bank
pursuant to this Section shall be applied to all of the Credit Party's
obligations to such Bank, including those under or in connection with this
Agreement, and to such Bank's Employee Loan Participation pro rata in accordance
with the amount then outstanding under each such obligation. For purposes of
this Section, each of the Banks shall be considered to be a "creditor" under the
Federal Bankruptcy Code with respect to this Agreement, the Revolving Credit
Notes, the Employee Notes and the Borrower Guaranty. The Banks agree to act in
good faith and promptly to notify the affected Credit Party after any such
setoff and application, provided that the failure to give such notice shall not
affect the validity of such setoff and application. The rights of the Banks
under this Section are in addition to other rights and remedies (including,
without limitation, other rights of setoff) which the Banks may have.
ARTICLE IX. AGENCY PROVISIONS
Section 9.1 Appointment.
Each Bank hereby designates and appoints NationsBank, N.A. as
administrative agent (in such capacity, the " Agent") of such Bank to act as
specified herein and the other Credit Documents, and each such Bank hereby
authorizes the Agent, as Agent for such Bank, to take such action on its behalf
under the provisions of this Credit Agreement and the other Credit Documents and
to exercise such powers and perform such duties as are expressly delegated by
the terms hereof and of the other Credit Documents, together with such other
powers as are reasonably incidental thereto. Each Bank further directs and
authorizes the Agent to execute releases (or similar agreements) to give effect
to the provisions of this Credit Agreement and the other Credit Documents,
including specifically without limitation the provisions of Section 7.3 hereof.
Notwithstanding any provision to the contrary elsewhere herein and in the other
Credit Documents, the Agent shall not have any duties or responsibilities,
except those expressly set forth herein and therein, or any fiduciary
relationship with any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Credit Agreement or any of the other Credit Documents, or shall otherwise exist
against the Agent. The provisions of this Section are solely for the benefit of
the Agent and the Banks and none of the Credit Parties shall have any rights as
a third party beneficiary of the provisions hereof. In performing its functions
and duties under this Credit Agreement and the other Credit Documents, the Agent
shall act solely as Agent of the Banks and does not assume and shall not be
deemed to have assumed any obligation or relationship of agency or trust with or
for any Credit Party or any of their respective Affiliates.
Section 9.2 Delegation of Duties.
The Agent may execute any of its duties hereunder or under the other
Credit Documents by or through agents or attorneys-in-fact and shall be entitled
to advice of counsel concerning all matters pertaining to such duties. The Agent
shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
Section 9.3 Exculpatory Provisions.
The Agent and its officers, directors, employees, agents,
attorneys-in-fact or affiliates shall not be (i) liable for any action lawfully
taken or omitted to be taken by it or such Person under or in connection
herewith or in connection with any of the other Credit Documents (except for its
or such Person's own gross negligence or willful misconduct), or (ii)
responsible in any manner to any of the Banks for any recitals, statements,
representations or warranties made by any of the Credit Parties contained herein
or in any of the other Credit Documents or in any certificate, report, document,
financial statement or other written or oral statement referred to or provided
for in, or received by the Agent under or in connection herewith or in
connection with the other Credit Documents, or enforceability or sufficiency
therefor of any of the other Credit Documents, or for any failure of any Credit
Party to perform its obligations hereunder or thereunder. The Agent shall not be
responsible to any Bank for the effectiveness, genuineness, validity,
enforceability, collectability or sufficiency of this Agreement, or any of the
other Credit Documents or for any representations, warranties, recitals or
statements made herein or therein or made by the Borrower or any Credit Party in
any written or oral statement or in any financial or other statements,
instruments, reports, certificates or any other documents in connection herewith
or therewith furnished or made by the Agent to the Bank or by or on behalf of
the Credit Parties to the Agent or any Bank or be required to ascertain or
inquire as to the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained herein or therein or as to the use
of the proceeds of the Loans or the use of the Letters of Credit or of the
existence or possible existence of any Incipient Default or Event of Default or
to inspect the properties, books or records of the Credit Parties or any of
their respective Affiliates.
Section 9.4 Reliance on Communications.
The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to any of the Credit Parties, independent accountants and
other experts selected by the Agent with reasonable care). The Agent may deem
and treat the Banks as the owners of their respective interests hereunder for
all purposes unless a written notice of assignment, negotiation or transfer
thereof shall have been filed with the Agent in accordance with Section 10.2(b)
hereof. The Agent shall be fully justified in failing or refusing to take any
action under this Agreement or under any of the other Credit Documents unless it
shall first receive such advice or concurrence of the Majority Banks as it deems
appropriate or it shall first be indemnified to its satisfaction by the Banks
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder or under any
of the other Credit Documents in accordance with a request of the Majority Banks
(or to the extent specifically provided in Section 10.10, all the Banks) and
such request and any action taken or failure to act pursuant thereto shall be
binding upon all the Banks (including their successors and assigns).
Section 9.5 Notice of Default.
The Agent shall not be deemed to have knowledge or notice of the
occurrence of any Incipient Default or Event of Default hereunder unless the
Agent has received notice from a Bank or a Credit Party referring to the Credit
Document, describing such Incipient Default or Event of Default and stating that
such notice is a "notice of default." In the event that the Agent receives such
a notice, the Agent shall give prompt notice thereof to the Banks. The Agent
shall take such action with respect to such Incipient Default or Event of
Default as shall be reasonably directed by the Majority Banks.
Section 9.6 Non-Reliance on Agent and Other Banks.
Each Bank expressly acknowledges that each of the Agent and its
officers, directors, employees, agents, attorneys-in-fact or affiliates has not
made any representations or warranties to it and that no act by the Agent or any
affiliate thereof hereinafter taken, including any review of the affairs of any
Credit Party or any of their respective Affiliates, shall be deemed to
constitute any representation or warranty by the Agent to any Bank. Each Bank
represents to the Agent that it has, independently and without reliance upon the
Agent or any other Bank, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, assets, operations, property, financial and other conditions,
prospects and creditworthiness of the Borrower, the other Credit Parties or
their respective Affiliates and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Bank also represents that it will,
independently and without reliance upon the Agent or any other Bank, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement, and to make such investigation as it
deems necessary to inform itself as to the business, assets, operations,
property, financial and other conditions, prospects and credit-worthiness of the
Borrower, the other Credit Parties and their respective Affiliates. Except for
notices, reports and other documents expressly required to be furnished to the
Banks by the Agent hereunder, the Agent shall not have any duty or
responsibility to provide any Bank with any credit or other information
concerning the business, operations, assets, property, financial or other
conditions, prospects or creditworthiness of the Borrower, the other Credit
Parties or any of their respective Affiliates which may come into the possession
of the Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates.
Section 9.7 Indemnification.
The Banks agree to indemnify the Agent in its capacity as such (to the
extent not reimbursed by the Borrower and without limiting the obligation of the
Borrower to do so), ratably according to their respective Total Commitments (or
if the Total Commitments have expired or been terminated, in accordance with the
respective principal amounts of outstanding Loans and Participation Interests of
the Banks), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever which may at any time (including without limitation at
any time following the final payment of all of the obligations of the Borrower
hereunder and under the other Credit Documents) be imposed on, incurred by or
asserted against the Agent in its capacity as such in any way relating to or
arising out of this Agreement or the other Credit Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the Agent under
or in connection with any of the foregoing; provided that no Bank shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the gross negligence or willful misconduct of the Agent. If any
indemnity furnished to the Agent for any purpose shall, in the opinion of the
Agent, be insufficient or become impaired, the Agent may call for additional
indemnity and cease, or not commence, to do the acts indemnified against until
such additional indemnity is furnished. The agreements in this Section shall
survive the repayment of the Loans, LOC Obligations and other obligations under
the Credit Documents and the termination of the Total Commitments hereunder.
Section 9.8 Agent in its Individual Capacity.
The Agent and its affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower, its Subsidiaries
or their respective Affiliates as though the Agent were not the Agent hereunder.
With respect to the Loans made by and all obligations of the Borrower hereunder
and under the other Credit Documents, the Agent shall have the same rights and
powers under this Agreement as any Bank and may exercise the same as though it
were not the Agent, and the terms "Bank" and "Banks" shall include the Agent in
its individual capacity.
Section 9.9 Successor Agent.
The Agent may, at any time, resign upon 20 days' written notice to the
Banks, and may be removed, upon show of cause, by the Majority Banks upon 30
days' written notice to the Agent. Upon any such resignation or removal, the
Majority Banks shall have the right to appoint a successor Agent. If no
successor Agent shall have been so appointed by the Majority Banks, and shall
have accepted such appointment, within 30 days after the notice of resignation
or notice of removal, as appropriate, then the retiring Agent shall select a
successor Agent provided such successor is a Bank hereunder or a commercial bank
organized under the laws of the United States of America or of any State thereof
and has a combined capital and surplus of at least $400,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor, 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 as Agent, as appropriate, under this
Agreement and the other Credit Documents and the provisions of this Section 9.9
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent under this Agreement.
ARTICLE X. MISCELLANEOUS
Section 10.1. Rights and Waivers.
All rights, remedies and powers granted to the Agent or the Banks
herein or in any other Credit Document, whether express or implied, shall be
cumulative and may be exercised singly or concurrently with such other rights as
the Agent or the Banks may have, and shall include, without limitation, the
right to apply to a court of equity for any injunction to restrain a breach or
threatened breach of this Agreement and all rights as stated in Article VIII
hereof. No failure or delay on the part of the Agent or the Banks in exercising
any right, power or privilege hereunder or under any other Credit Document, or
under applicable law, shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder or thereunder
preclude any other or further exercise thereof or the exercise of any other
right, power, or privilege. No waiver or modification of any right, power or
privilege of the Agent or the Banks or of any obligation of the Borrower or any
other Credit Party shall be effective unless such waiver or modification is in
writing, signed by the Agent or the Banks, as required herein, and then only to
the extent set forth therein. A waiver by the Agent or the Banks of any right,
power or privilege hereunder or under any other Credit Document on any one
occasion shall not be construed as a bar to, or a waiver of, any such right,
power or privilege which the Agent or the Banks otherwise would have on any
subsequent occasion. Neither the Agent nor the Banks shall have any liability to
the Borrower or any other Credit Party for failure to fund any loan on the date
set for such funding if such failure is due to forces or circumstances beyond
the control of the Banks, including, without limitation, Acts of God, concerted
work stoppages, or delays in wire transfer systems.
Section 10.2. Binding Effect; Assignment.
(a) This Agreement shall bind and inure to the benefit of the
parties, their legal representatives, successors and assigns, except
that neither the Borrower nor any Guarantor may assign or transfer its
rights hereunder or any interests herein without the prior written
consent of all the Banks.
(b) Each Bank may assign all or a portion of its rights and
obligations hereunder (including, without limitation, all or a portion
of its Total Commitments or its Loans) to (i) a Bank, (ii) an affiliate
of a Bank or (iii) any other commercial bank or financial institution
reasonably acceptable to the Agent and, so long as no Default or Event
of Default has occurred and is continuing, the Borrower (the consent of
the Borrower shall not be unreasonably withheld or delayed and such
consent shall be deemed given if the Borrower does not notify the
assigning Bank and the Agent of any objection within two Business Days
after the Borrower has been provided notice of the proposed assignment
by the assigning Bank or the Agent); provided that (i) any such
assignment shall be in a minimum aggregate amount of $5,000,000 (or, if
less, the remaining amount of the Total Commitment of the assigning
Bank) of the Total Commitments and in integral multiples of $1,000,000
above such amount and (ii) any such assignment shall be of a constant,
not varying, percentage of all the assigning Bank's rights and
obligations under this Agreement. Upon receipt by the assigning Bank of
the Agent's and Borrower's (provided no Default or Event of Default has
occurred and is continuing) written consent, the execution and delivery
to the Agent of an assignment agreement between the assigning Bank and
the assignee, the delivery to the Agent of a transfer fee of $3,500
payable to the Agent for its own account, and the making of any payment
by the assignee required by the assigning Bank, this Agreement shall be
deemed to be amended to the extent, and only to the extent, necessary
to reflect the addition of such assignee, and the assignee shall for
all purposes be a Bank party hereto and shall have, to the extent of
such assignment, the same rights and obligations as a Bank hereunder.
Upon the consummation of any assignment, the assigning Bank shall be
relieved from its obligations hereunder to the extent of the
obligations so assigned. Notwithstanding anything herein to the
contrary, nothing herein shall prevent an assignment by any Bank to a
Federal Reserve Bank in support of borrowings made by such Bank from
such Federal Reseve Bank.
(c) Each Bank may grant participations in all or any part of
its Revolving Credit Loans and may grant subparticipations in all or
any part of its Employee Loan Participations to any commercial bank or
other financial institution. Each participation shall be in an amount
equal to or in excess of $5,000,000. A participant shall not have any
rights under this Agreement or any other document delivered in
connection herewith (the participant's rights against the Bank in
respect of such participation to be those set forth in the agreement
executed by the Bank in favor of the participant relating thereto,
which agreement with respect to such participation shall not restrict
the Bank's ability to make any modification, amendment or waiver to
this Agreement without the consent of the participant, except that the
Bank may agree with any participant that the Bank will not, without
such participant's consent, (i) extend or increase the amount of the
Revolving Credit Commitments or the Employee Loan Participations, (ii)
agree to extend the final maturity of the Notes, (iii) agree to reduce
the principal amount of, or rate of interest on, the Notes, (iv) agree
to release any material portion of the collateral or Employee Pledged
Shares and (v) except as permitted under Section 7.3(a) or (b), agree
to release the Borrower or all or substantially all of the Guarantors
from its or their respective obligations under the Credit Documents).
All amounts payable by the Borrower under this Agreement shall be
determined as if a Bank had not sold such participation. The Borrower
acknowledges and agrees that any participant described in this Section
10.2 will, for purposes of Sections 2.12, 2.14, 2.16 and 2.17, be
deemed to be a Bank hereunder, provided that such participant shall not
be entitled to receive any more than the Bank would have received had
such participation not been made. In the event of any such sale by a
Bank of participating interests to a participant, such Bank's
obligations under this Agreement shall remain unchanged, such Bank
shall remain solely responsible for the performance thereof, such Bank
shall remain the holder of any obligation for all purposes under this
Agreement, and the Borrower shall continue to deal solely and directly
with such Bank in connection with the Bank's rights and obligations
under this Agreement.
Section 10.3. Severability.
Any provision of this Agreement prohibited by the laws of any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition, or modified to conform with such laws, without invalidating
the remaining provisions of this Agreement, and any such prohibition in any
jurisdiction shall not invalidate such provisions in any other jurisdiction.
Section 10.4. Interpretation.
All parties have participated in the drafting of this Agreement, and
this Agreement shall be interpreted without reference to any rule of
construction providing for interpretation of documents against the Persons
drafting them.
Section 10.5. Governing Law; Jury Trial.
This Agreement and the other Credit Documents shall be construed in
accordance with and governed by the internal laws of the State of North
Carolina, excluding its choice of law rules. The parties hereto (a) individually
with respect to each instance and each issue as to which the right to a trial by
jury would otherwise accrue, waive and elect not to assert their right to trial
by jury on any issue triable of right by a jury to the full extent that any such
right shall now or hereafter exist, and certify that no representative or agent
of the Agent or the Banks (including without limitation the Agent's counsel) has
represented, expressly or otherwise, to any Credit Party that the Agent or the
Banks will not seek to enforce this waiver of right to jury trial provision, (b)
consent to the jurisdiction of the courts of the State of North Carolina,
including its federal district courts, and (c) consent to service of process by
registered mail, return receipt requested.
Section 10.6. Payment of Expenses and Taxes; Indemnification.
(a) The Borrower agrees to pay all out of pocket costs and
expenses of the Agent, including the reasonable fees and disbursements
of special counsel for the Agent, in connection with the negotiation,
preparation, execution and delivery of this Agreement, the Notes, the
Borrower Guaranty, the Employee Pledge Agreements, and any other Credit
Document, to pay all reasonable out of pocket costs and expenses of the
Banks in connection with the enforcement of this Agreement, the Notes,
and any other Credit Document, including reasonable attorneys' fees and
disbursements arising in connection therewith (whether or not suit is
instituted), and also to pay all reasonable actual out-of-pocket costs
of the Banks in connection with any inspections, investigations, or
examinations performed under the Security Agreement.
(b) The Borrower agrees to indemnify the Agent and the Banks
from and against any and all liabilities, losses, damages, penalties,
actions, judgments, costs, expenses (including, without limitation,
reasonable attorneys' fees and disbursements) or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by, or
asserted against the Agent and the Banks in any litigation, proceeding
or investigation instituted or conducted by any Person other than the
Borrower with respect to any aspect of, or any transaction contemplated
by, or referred to in, or any matter related to, any Loans made
hereunder, including, without limitation, in connection with the
Borrower's servicing role hereunder and any consumer lending or
securities law violations arising from or related to the Employee
Loans. The Borrower also agrees to pay, and to save the Banks harmless
from any delay in paying, all stamp and other taxes, if any, which may
be payable or determined to be payable in connection with the execution
and delivery of this Agreement, the Notes, the Borrower Guaranty, the
Employee Pledge Agreements, and any other Credit Document, or any
modification hereof or thereof, and all filing and recording fees in
connection therewith.
Section 10.7. Survival of Representations and Warranties.
All representations and warranties made in this Agreement and in any
certificates or other documents delivered pursuant hereto shall survive the
execution and delivery of this Agreement and the making of the Loans hereunder,
and the provisions of Section 10.6 shall survive payment of the Notes.
Section 10.8. Notices.
All notices, requests and demands to or upon any party hereto shall be
deemed to have been given or made when delivered by hand, when sent by
telecopier or telegram or when mailed, first-class, postage prepaid, addressed
to such party as follows or to such other address as may be hereafter designated
in writing by such party to the other parties hereto:
(a) if to the Agent, to:
NationsBank, N.A.
Corporate Bank
6th Floor
0000 Xxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Senior Vice President
with a copy to:
Xxx Xxxxxx
Agency Services
NationsBank, N.A.
000 Xxxxx Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxx, XX 00000
(b) if to the Borrower or the Subsidiary Guarantors, to:
Xxxxxx Xxxxx & Company
0000 Xxxxxxxxx Xxxx., Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxx
Treasurer
with copies to:
Xxxxxx X. Xxxxxxxxxxxx, Esq.
General Counsel
Xxxxxx Xxxxx & Company
0000 Xxxxxxxxx Xxxx., Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
(c) if to any Bank, to its address set forth below its
name on the signature pages hereof, with a copy to the Agent.
Section 10.9. Execution.
This Agreement may be executed by the parties hereto individually or in
any combination of the parties hereto in several separate counterparts, each of
which shall be an original and all of which taken together shall constitute one
and the same Agreement.
Section 10.10. Amendments.
Neither this Agreement nor any other Credit Document nor any of the
terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is in
writing entered into by, or approved in writing by, the Majority Banks and the
Borrower, provided, however, that:
(a) without the consent of each Bank affected thereby, neither
this Agreement nor any of the other Credit Documents may be amended to
(i) extend the final maturity of any Loan or the time of
payment of any reimbursement obligation, or any portion
thereof, arising from drawings under Letters of Credit, or
extend or waive any principal amortization payment of any
Loan, or any portion thereof,
(ii) reduce the rate or extend the time of payment of
interest (other than as a result of waiving the applicability
of any increase in interest rates after the occurrence of an
Event of Default or on account of a failure to deliver
financial statements on a timely basis) thereon or fees
hereunder,
(iii) reduce or waive the principal amount of any Loan
or of any reimbursement obligation, or any portion thereof,
arising from drawings under Letters of Credit,
(iv) increase the Revolving Credit Commitment or Employee
Loan Participation of a Bank over the amount thereof in
effect, except as provided in Section 2.8(d) (it being
understood and agreed that a waiver of any Default or Event of
Default shall not constitute a change in the Revolving Credit
Commitment or Employee Loan Participation of any Bank),
(v) except as permitted under Section 7.3(a) or (b),
release the Borrower or all or substantially all of the
Subsidiary Guarantors from its or their respective obligations
under the Credit Documents,
(vi) except as the result of or in connection
with a disposition permitted under Section 7.3(b), release
all or substantially all of the Collateral,
(vii) amend, modify or waive any provision of this Section
10.10 or Section 2.8(d), 2.12, 2.13, 2.14, 2.15, 2.16, 2.17,
8.1(a), 10.6 or 10.7,
(viii) reduce any percentage specified in, or
otherwise modify, the definition of Majority Banks, or
(ix) consent to the assignment or transfer by
the Borrower of any of its rights and obligations under
(or in respect of) the Credit Documents except as permitted thereby;
(b) without the consent of the Agent, no provision of
Section 9 may be amended;
(c) without the consent of the Issuing Bank, no
provision of Section 2.5 may be amended.
Notwithstanding the fact that the consent of all the Banks is required
in certain circumstances as set forth above, (x) each Bank is entitled to vote
as such Bank sees fit on any bankruptcy reorganization plan that affects the
Loans, and each Bank acknowledges that the provisions of Section 1126(c) of the
Federal Bankruptcy Code supersedes the unanimous consent provisions set forth
herein and (y) the Majority Banks may consent to allow the Borrower to use cash
collateral in the context of a bankruptcy or insolvency proceeding.
Section 10.11. Relationship of the Parties.
This Agreement provides for the making of loans by the Banks, in their
capacity as Banks, to the Borrower, and for the payment of interest and
repayment of principal by the Borrower to the Banks. The relationship between
the Banks (including, throughout this Section, the Agent) and the Borrower is
limited to that of creditors/secured parties, on the one hand, and debtor, on
the other hand. The provisions herein for compliance with financial covenants,
delivery of financial statements, and financial inspections, investigations,
audits, or examinations are intended solely for the benefit of the Banks to
protect their interests as lenders in assuring payments of interest and
repayment of principal, and nothing contained in this Agreement shall be
construed as permitting or obligating the Banks to act as financial or business
advisors or consultants to the Borrower, as permitting or obligating any Bank to
control the Borrower or to conduct the Borrower's operations, as creating any
fiduciary obligation on the part of the Banks to the Borrower, or as creating
any joint venture, agency, or other relationship between the parties other than
as explicitly and specifically stated in this Agreement. The Borrower
acknowledges that it has had the opportunity to obtain the advice of experienced
counsel of its own choosing in connection with the negotiation and execution of
this Agreement and to obtain the advice of such counsel with respect to all
matters contained herein, including, without limitation, the provision in
Section 10.5 for waiver of trial by jury. The Borrower further acknowledges that
it is experienced with respect to financial and credit matters and has made its
own independent decision to apply to the Banks for credit and to execute and
deliver this Agreement.
IN WITNESS WHEREOF, the parties have caused this Credit Agreement to be
duly executed and delivered as of the date stated on the first page hereof.
BORROWER
XXXXXX XXXXX & COMPANY
(d/b/a Xxxxxx Xxxxx Worldwide),
a Delaware corporation
ATTEST: /s/ Xxxxxx X. Xxxxxxxxxxxx By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxxxxxxxx Name: Xxxxxxx X. Xxxxxx
Title: Secretary Title: Vice President and
Chief Financial Officer
SUBSIDIARY GUARANTOR XXXXXX XXXXX INVESTMENT
CONSULTING, INC.,
a Delaware corporation
ATTEST: /s/ Xxxxxx X. Xxxxxxxxxxxx By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxxxxxxxx Name: Xxxxxxx X. Xxxxxx
Title: Secretary Title: Chief Financial Officer
SUBSIDIARY GUARANTOR XXXXX DATA SERVICES, INC.,
a Delaware corporation
ATTEST: /s/ Xxxxxx X. Xxxxxxxxxxxx By: /s/ Xxxx X. Xxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxxxxx Name: Xxxx X. Xxxxxxxxx
Title: Secretary Title: Treasurer
SUBSIDIARY GUARANTOR XXXXXX XXXXX INTERNATIONAL, INC.,
a Nevada corporation
ATTEST: /s/ Xxxxxx X. Xxxxxxxxxxxx By: /s/ Xxxx X. Xxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxxxxx Name: Xxxx X. Xxxxxxxxx
Title: Secretary Title: Treasurer
BANKS NATIONSBANK, N.A., as a Bank and as Agent
By: /s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President
All Administrative Notices:
Address: NationsBank, N.A.
000 Xxxxx Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxx Xxxxxx
Agency Services
All Other Notices:
Address: 0000 Xxxxxxxxx Xxxxx
XX0-000-00-00
Xxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx,
Senior Vice President
Revolving Credit Commitment: $19,395,833.34
Employee Loan Participation: $ 5,104,166.66
Total Commitment: $24,500,000.00
PNC BANK, NATIONAL ASSOCIATION,
as a Bank and as Co-Agent
By: /s/Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Assistant Vice President
Administrative Notices:
Address: 0000 Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx Xxxxx,
Loan Administrator
All Other Notices:
Address: 0000 Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx
Assistant Vice President
Revolving Credit Commitment: $17,812,500.00
Employee Loan Participation: $ 4,687,500.00
Total Commitment: $22,500,000.00
COMERICA BANK,
as a Bank and as Co-Agent
By: /s/ Xxx X. Xxxxx
Name: Xxx X. Xxxxx
Title: Vice President
Administrative Notices:
Address: U.S. Banking East
000 Xxxxxxxx Xxxxxx
0xx Xxxxx, XX 0000
Xxxxxxx, XX 00000-0000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxx Xxxxxx,
Customer Assistant
All Other Notices:
Address: U.S. Banking East
000 Xxxxxxxx Xxxxxx
0xx Xxxxx, XX 0000
Xxxxxxx, XX 00000-0000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxx X. Xxxxx,
Vice President
Revolving Credit Commitment: $17,812,500.00
Employee Loan Participation: $ 4,687,500.00
Total Commitment: $22,500,000.00
FIRST UNION NATIONAL BANK,
as a Bank and as Co-Agent
By: /s/Xxxxxxx X. Angel
Name: Xxxxxxx X. Angel
Title: Vice President
All Notices:
Address: 0000 Xxxxx Xxxxxx Xxxx
0xx Xxxxx
XxXxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx Xxxxx
Vice President
Revolving Credit Commitment: $17,812,500.00
Employee Loan Participation: $ 4,687,500.00
Total Commitment: $22,500,000.00
CRESTAR BANK
By: /s/Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
Administrative Notices:
Address: 0000 Xxx Xxxx Xxxxxx, XX
Xxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxx Xxxxxxx
All Other Notices:
Address: 0000 Xxx Xxxx Xxxxxx, XX
0xx Xxxxx
Xxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx
Revolving Credit Commitment: $11,083,333.33
Employee Loan Participation: $ 2,916,666.67
Total Commitment: $14,000,000.00
THE BANK OF NOVA SCOTIA
By: /s/X.X. Xxxxxxxx
Name: X.X. Xxxxxxxx
Title: Unite Head
Administrative Notices:
Address: Xxx Xxxxxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxx Xxxxxx
All Other Notices:
Address: Xxx Xxxxxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxx Xxxxxxxx
Revolving Credit Commitment: $11,083,333.33
Employee Loan Participation: $ 2,916,666.67
Total Commitment: $14,000,000.00
EXHIBIT A
FORM OF REVOLVING CREDIT NOTE
$__________.00 Bethesda, MD
June 30, 1998
FOR VALUE RECEIVED, the undersigned Borrower hereby promises to pay to the
order of ______________________, and its successors and assigns, on or
before June 30, 2003 to the office of the Agent in immediately available
funds as provided in the Credit Agreement, the principal amount of
__________ DOLLARS ($__________.00) or the aggregate unpaid principal
amount of all Revolving Credit Loans owing to such Bank, together with
interest thereon at the rates and as provided in the Credit Agreement. This
Revolving Credit Note is one of the Revolving Credit Notes referred to in
the Credit Agreement dated as of June 30, 1998 (as amended and modified,
the "Credit Agreement") among Xxxxxx Xxxxx & Company, a Delaware
corporation, the Subsidiary Guarantors and Lenders identified therein and
NationsBank, N.A., as Agent. Terms used but not otherwise defined herein
shall have the meanings provided in the Credit Agreement. The holder may
endorse and attach a schedule to reflect borrowings evidenced by this
Revolving Credit Note and all payments and prepayments thereon; provided
that any failure to endorse such information shall not affect the
obligation of the undersigned Borrower to pay amounts evidenced hereby.
Upon the occurrence of an Event of Default, all amounts evidenced by this
Revolving Note may, or shall, become immediately due and payable as
provided in the Credit Agreement without presentment, demand, protest or
notice of any kind, all of which are waived by the undersigned Borrower. In
the event payment of amounts evidenced by this Revolving Credit Note is not
made at any stated or accelerated maturity, the undersigned Borrower agrees
to pay, in addition to principal and interest, all costs of collection,
including reasonable attorneys' fees. This Revolving Credit Note and the
Loans and amounts evidenced hereby may be transferred only as provided in
the Credit Agreement.
This Revolving Credit Note shall be governed by, and construed and
interpreted in accordance with, the law of the State of North Carolina. In
WITNESS WHEREOF, the undersigned Borrower has caused this Revolving Credit
Note to be duly executed as of the date first above written.
XXXXXX XXXXX & COMPANY,
a Delaware corporation
ATTEST: By:
Name: Xxxxxx X. Xxxxxxxxxxxx Name: Xxxxxxx X. Xxxxxx
Title: Secretary Title: Vice President and
Chief Financial Officer
EXHIBIT B
FORM OF PROMISSORY NOTE
Name: __________________ Bethesda, MD
Office:_________________ June 30, 1998
$-----------------------
FOR VALUE RECEIVED, the undersigned promises to pay to the order of
NATIONSBANK, N.A. (the "Agent"), at ______________,
__________________________ or at such other address as the Agent shall
subsequently state to the undersigned in writing, the principal sum of
_______________________________/100 U.S. DOLLARS (U.S. $_________), plus
interest on the unpaid balance thereof at a fluctuating rate per annum
equal to the Applicable Rate. Interest shall be computed on the basis of
the actual number of days elapsed over a year of 365 or 366 days, as the
case may be [or if the Federal Funds Rate (defined below) shall then apply,
360 days], for the period commencing with the date hereof and ending on the
date on which this Note has been paid in full. Interest shall be payable
quarterly in arrears, commencing on ____________________ for the first
calendar quarter ending after the date hereof and continuing on the 3rd
business day of the month immediately following each calendar quarter
occurring thereafter, and on the Maturity Date. For purposes hereof, the
"Applicable Rate" means (i) for all periods prior to and including January
5, 2001, the Adjusted Base Rate and (ii) for all periods thereafter (a) if
no Cash Flow Deficiency exists as of the immediately preceding Calculation
Date, the Adjusted Base Rate and (b) if a Cash Flow Deficiency exists as of
the immediately preceding Calculation Date, the Prime Rate. "Adjusted Base
Rate" means, for any day, the rate per annum (rounded upwards, if
necessary, to the nearest whole multiple of 1/100 of 1%) equal to the
greater of (a) the Federal Funds Rate in effect on such day plus 1/2 of
1.0% or (b) the Prime Rate in effect on such day, minus 1.0%. 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 Adjusted Base Rate shall be determined without regard to
clause (a) of the first sentence of this definition until the circumstances
giving rise to such inability no longer exist. Any change in the Adjusted
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 the
Federal Funds Rate, respectively. "Federal Funds Rate" means, for any day,
the rate of interest per annum (rounded upwards, if necessary, to the
nearest whole multiple of 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 and (B) if no such rate is so published on such next
succeeding business day, the Federal Funds Rate for such day shall be the
average rate quoted to the Agent on such day on such transactions as
determined by the Agent. "Prime Rate" means the per annum rate of interest
established from time to time by the Agent at its principal office in
Charlotte, North Carolina as its Prime Rate. Any change in the interest
rate resulting from a change in the Prime Rate shall become effective as of
12:01 a.m. of the business day on which each change in the Prime Rate is
announced by the Agent. The Prime Rate is a reference rate used by the
Agent in determining interest rates on certain loans and is not intended to
be the lowest rate of interest charged on any extension of credit to any
debtor. "Calculation Date" means the last day of each fiscal quarter of
Xxxxxx Xxxxx & Company. A "Cash Flow Deficiency" shall exist at any time
when the Leverage Ratio of the Xxxxxx Xxxxx & Company, on a consolidated
basis, is 2.5 or greater, as more fully described in the Loan Documents
referenced below. Principal hereunder shall be payable in seven consecutive
annual installments of (U.S. $_____________) each on the 30th day of each
September hereafter beginning September 30, 199__. This Note shall mature
on September 30, ________ (the "Maturity Date"); provided however, that
this Note shall mature on the earlier of (a) one calendar year after
termination (whether voluntary or involuntary) of the undersigned from
Xxxxxx Xxxxx & Company or any of its subsidiaries or affiliates (such
termination is, hereinafter, a "Termination"), or (b) immediately upon the
sale of the common stock securing payment of this Promissory Note, if
either such date is earlier than the Maturity Date. Whenever any principal
of or interest on this Note shall not be paid when due, whether at the
stated maturity or by acceleration or otherwise, interest on such unpaid
amounts shall thereafter [and in the case of late principal payments, 50
days thereafter if no other default shall then exist under this Note or
under any other Loan Document (as such term is defined hereinafter)] be
payable at a rate per annum equal to two (2) percentage points above the
stated rate of interest under this Note until such amounts shall be paid,
but in no event shall the rate of interest payable hereon exceed the
highest rate allowed by law. Payments shall be made in lawful money of the
United States and in immediately available funds and shall be applied first
to interest, then to principal. The undersigned may prepay the principal
hereof, in whole or in part, at any time without penalty, provided,
however, that any prepayments of principal shall be applied against the
installments of principal hereunder in their inverse order of maturity.
Whenever this Note, or any other liability of any of the undersigned to the
Agent matures, whether at the stated maturity or by acceleration or
otherwise, the Agent may set-off against the balance hereof any and all
credits, money, stocks, bonds or other security or property of any nature
whatsoever on deposit with or held by, or in the possession of, the Agent,
to the credit of or for the account of the undersigned, without notice to
or consent by the undersigned. The undersigned promptly shall provide such
financial, operational or business information in each instance and in such
form as the Agent in its sole discretion shall require. This Note is
secured by, among other things, common stock of Xxxxxx Xxxxx & Company
purchased or refinanced with the proceeds of the loan evidenced by this
Note and as provided by a certain stock pledge agreement from the
undersigned to the Agent dated this date, and this Note is entitled to the
benefits of said stock pledge agreement, including, without limitation,
waiver by the undersigned of demand, presentment, protest, and other
notices, all as provided in the stock pledge agreement. Upon failure of the
undersigned to pay any payment hereon in full when due, or the failure of
the undersigned to perform or comply with any of the provisions hereof
and/or any of the provisions of any pledge agreement, guaranty, or any
other document previously, simultaneously or hereafter executed and
delivered by the undersigned to the Agent in connection with this Note
(collectively, and including without limitation that certain Credit
Agreement dated June 30, 1998, as amended, among Xxxxxx Xxxxx & Company,
the Subsidiary Guarantors identified therein, the banks party thereto and
NationsBank, N.A., as Agent, the "Loan Documents"), or the occurrence of a
default on the part of the undersigned or Xxxxxx Xxxxx & Company under any
of the Loan Documents; or if any information contained in any financial
statement, application, schedule, report or any other document delivered by
the undersigned or any other party in connection with the obligations of
the undersigned or such other party omitted to state any material fact or
any fact necessary to make such information not misleading; or if any
judgment shall be entered against the undersigned; or if an attachment
shall be levied against any assets of the undersigned in the possession of
the Agent; or if the undersigned shall become the subject of any bankruptcy
or insolvency proceeding; or if any event other than Termination shall
occur that Xxxxxx Xxxxx & Company may, under Section 9.4 of its Bylaws,
treat as an offer to sell the shares of common stock securing this Note; or
if the Agent shall in good xxxxx xxxx itself insecure or unsafe as a result
of acts or events which bear upon the financial condition of the
undersigned or the repayment of this Note, then the entire unpaid principal
balance hereof plus accrued and unpaid interest thereon shall, at the
option of the Agent, mature and become immediately due and payable without
presentment, demand, protest, notice of protest or any other notice of any
kind, all of which are hereby expressly waived. The undersigned hereby
agrees to pay, in addition to all other sums or money due, all costs of
collection and reasonable attorneys' fees, whether suit be brought or not,
if this Note is not paid in full when due, whether at the stated maturity
or by acceleration. The undersigned hereby certifies to Agent that the
proceeds hereof are not to be used in whole or in part for personal, family
or household purposes, but only for the purpose of financing and/or
refinancing the purchase of common stock of Xxxxxx Xxxxx & Company.
This instrument is an instrument under seal and shall be governed in all
respects by the laws of the State of North Carolina, excluding its choice
of law rules. The undersigned hereby consents to the jurisdiction of the
courts of North Carolina, including the federal district court, and
consents to service of process by registered mail, return receipt
requested. The undersigned further specifically consents to venue in
Mecklenburg County, North Carolina.
Witness:__________________ Signed:__________________ (Seal)
(Signature)
Name:____________________ Name:___________________
(Print or Type) (Print or Type)
EXHIBIT C
FORM OF GUARANTY AGREEMENT
IS GUARANTY AGREEMENT, dated as of June 30, 1998 (the "Guaranty"), is given
by XXXXXX XXXXX & COMPANY, a Delaware corporation (the "Guarantor"), to
NATIONSBANK, N.A., a national banking association, as Agent for the Banks
party to the Credit Agreement referred to below (the "Agent"). All
capitalized terms used and not defined herein have the meanings stated in
the Credit Agreement.
W I T N E S S E T H :
WHEREAS, the Guarantor, as borrower and otherwise, is a party to that
Credit Agreement, dated as of the date hereof, among the Guarantor, the
Agent and the Banks named therein (as the same may be amended, modified or
extended, the "Credit Agreement"); and WHEREAS, in consideration of and to
induce advances made or to be made, or other financial accommodations from
time to time afforded or to be afforded, to or at the request of the
individuals listed on Exhibit A attached hereto, as such Exhibit may be
amended from time to time upon the making of additional advances to or for
the benefit of persons employed by the Guarantor or its affiliates or
subsidiaries (each such person individually an "Employee Borrower" and all
collectively the "Employee Borrowers"; in addition, such term shall mean
and include all entities eligible to purchase shares of common stock of the
Guarantor and to or for the benefit of whom Employee Loans are made under
the Credit Agreement), such advances or other financial accommodations
being for the purpose of financing the purchase from the Guarantor of stock
of the Guarantor, the Guarantor has agreed to guarantee the performance of
the obligations of the Employee Borrowers under the Employee Notes issued
pursuant to the Credit Agreement; NOW, THEREFORE, in consideration of the
premises and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Guarantor hereby agrees as
follows:
1. Guaranty of Liabilities. The Guarantor hereby unconditionally guarantees
and becomes surety for the full and prompt payment to the Agent and the
Banks at maturity, whether by acceleration or otherwise, and at all times
thereafter, and upon a Default hereunder, of the Employee Loans and all
indebtedness, obligations and liabilities of the Employee Borrowers to the
Agent and the Banks, whether now existing or hereafter created or arising,
matured or unmatured, and whether absolute or contingent, joint, several,
or joint and several, arising out of the financing by the Agent and the
Banks of the acquisition by the Employee Borrowers of any shares of stock
issued or to be issued by the Guarantor (all of which are hereinafter
called the "Guaranteed Debt").
In the event any Employee Borrower shall at any time fail to pay the Agent
or any Bank any principal of or interest on or other sums constituting any
Guaranteed Debt at its maturity, whether by acceleration or otherwise, or
in the event of any Default hereunder as defined herein, the Guarantor
promises to pay such amount to the Agent and such Bank forthwith on demand,
in the same manner as if the Guaranteed Debt constituted the direct and
primary liability of the Guarantor, this being a guaranty of payment rather
than of collection.
2. In the Event of a Default. In case of the occurrence of a default under
the terms of any Employee Borrower's note evidencing Guaranteed Debt, any
Employee Borrower's pledge agreement providing security for Guaranteed
Debt, or any other document or instrument pertaining thereto, or in case of
the death or incompetence of any Employee Borrower, or in case any
dissolution, liquidation, bankruptcy, reorganization, receivership,
assignment, debt arrangement or other proceeding under any bankruptcy or
insolvency law or procedure is instituted by or against an Employee
Borrower, each of such events or occurrences constituting a "Default"
hereunder, all Guaranteed Debt of such Employee Borrower shall at the
option of the Agent and the Banks immediately become due and payable from
the Guarantor; and in any such event the Guarantor hereby authorizes the
Agent and the Banks, without notice or demand, to advance a Revolving
Credit Loan, as defined in the Credit Agreement, for the account of the
Guarantor or to appropriate and apply any property, balances, credits,
deposits, accounts or moneys of the Guarantor then in the possession of the
Agent, or standing to the credit of the Guarantor, to the payment of such
Guaranteed Debt. In the event of the occurrence and continuance of any
Event of Default under and as defined in the Credit Agreement, all
Guaranteed Debt of all Employee Borrowers shall at the option of the Agent
and the Banks become immediately due and payable, irrespective of whether
there exists a default under any note issued by a Employee Borrower.
3. Agreements and Waivers. The Guarantor hereby (a) agrees (i) to any
modifications of any terms or conditions of any Guaranteed Debt and/or to
any extensions or renewals of time of payment or performance by any
Employee Borrower or the Guarantor; and (ii) that it shall not be necessary
for the Agent to resort to legal remedies against any Employee Borrower, or
against any collateral, before proceeding against the Guarantor; (b) waives
notice of any election, acceptance, demand, protest, notice of protest and
notice of default, presentment for payment, diligence in collection, and
waives, to the extent permitted by law, all benefit of valuation,
appraisement, and all exemptions under the laws of the North Carolina,
and/or any other state or territory of the United States; (c) agrees, if
any Guaranteed Debt is not paid in accordance with the terms hereof, to
pay, in addition to all other sums of money due, all costs of collection
including costs of suit and (whether or not suit is brought) the Agent's
and the Banks' reasonable attorneys' fees and disbursements; (d) agrees
that the Agent and the Banks shall have no obligation to verify the
signature of the Employee Borrower on any note, pledge agreement or other
document delivered in connection with any Guaranteed Debt; and (e) agrees
that the Guarantor's liability hereunder shall in no way be affected or
impaired by the failure of such note, pledge agreement or other document to
be valid, binding or enforceable as against such Employee Borrower.
4. Certain Rights of the Agent and the Banks. The Guarantor's liability
hereunder shall in no way be affected or impaired by any of the following
(any or all of which may be done or omitted by the Agent or the Banks
without notice to anyone and irrespective of whether the Guaranteed Debt
shall be increased or decreased thereby), namely: (a) any acceptance by the
Agent or the Banks of any security or collateral for, or other guarantors
or obligors upon, any Guaranteed Debt; (b) any compromise, settlement,
surrender, release, discharge, renewal, extension, alteration, exchange,
sale, pledge or other disposition of, or substitution for, or indulgence
with respect to, or failure, neglect or omission to realize upon, or to
enforce, exercise or perfect any liens or right of appropriation or other
rights with respect to any Guaranteed Debt or any security or collateral
therefor, or any claims against any person or persons primarily or
secondarily liable thereon; (c) the granting of credit from time to time by
the Agent or any Bank to any Employee Borrower in excess of the amount, if
any, to which the right of recovery under this Guaranty may be limited; or
(d) any act of commission or omission of any kind or at any time upon the
part of the Agent or any Bank with respect to any matter whatsoever other
than the execution and delivery by the Agent or any Bank to the Guarantor
of an express written release or cancellation of this Guaranty. The Agent
shall have the right to determine how, when and what application of
payments and credits, if any, whether derived from a Employee Borrower or
any other source, shall be made on the Guaranteed Debt, and this Guaranty
shall apply to and secure any ultimate balance that shall remain owing to
the Agent or any Bank. This Guaranty is secured by the Collateral as
defined in the Credit Agreement.
5. No Waiver, Etc. No postponement or delay on the part of the Agent or any
Bank in the enforcement of any right hereunder shall constitute a waiver of
such right, and all rights of the Agent and the Banks hereunder shall be
cumulative and not alternative and shall be in addition to any other rights
granted to the Agent or any Bank in any other agreement, or by Law. If any
provision hereof shall be or shall be declared to be illegal or
unenforceable in any respect, such illegal or unenforceable provision shall
be and become absolutely null and void and of no force and effect as though
such provision were not in fact set forth herein, but all other covenants,
terms, conditions and provisions hereof shall nevertheless continue to be
valid and enforceable and this Guaranty shall be so construed.
6. Continuing Guaranty. This Guaranty shall continue in force in any event
for so long as any Employee Borrower shall be indebted to the Agent and the
Banks, and thereafter until the Agent and the Banks shall have actually
received written notice of the termination hereof from the Guarantor and
until all Guaranteed Debt incurred or contracted before receipt of such
notice shall have been fully and finally paid plus interest, costs, and
attorneys' fees as above described, it being contemplated that the Employee
Borrowers may borrow, repay and subsequently borrow money from, or become
indebted to, the Agent and the Banks from time to time, and the Guarantor,
not having given notice of the termination hereof as herein provided for,
shall be deemed to have permitted this Guaranty to remain in full force and
effect with respect to such additional or subsequent Guaranteed Debt.
7. Agent Has No Duty to Advise; Waiver. The Guarantor assumes the risk for
its failure to be and keep informed of the financial condition of the
Employee Borrowers and of all other circumstances bearing upon the risk of
non-payment and non-performance of the Guaranteed Debt; and the Agent and
the Banks shall have no duty to advise the Guarantor of information known
to the Agent or any Bank regarding such condition or any such
circumstances. Furthermore, the Guarantor hereby waives any defense based
on the failure of the Agent to conduct a credit review of an Employee
Borrower prior to making or during the existence of any Employee Loan.
8. Subordination; Rescission. The Guarantor agrees that all claims of the
Guarantor against any and all of the Employee Borrowers, whether now
existing or hereafter arising, are and shall be at all times subject and
subordinate to the Guaranteed Debt, for so long as any Guaranteed Debt or
such claim or claims shall exist. The Guarantor waives all rights of
subrogation that it might have arising out of this Guaranty. The Guarantor
agrees that it shall not, without the prior written consent of the Agent:
(a) receive any payment of or collect, in whole or in part, or xxx upon,
any claim or claims now or hereafter existing which the Guarantor may hold
against the Employee Borrower; or (b) enforce any lien which the Guarantor
may now or in the future have on any of the Employee Borrowers' properties,
real or personal, as security for the payment of any debt or claim owing by
any Employee Borrower to the Guarantor. The liability of the Guarantor
hereunder shall be reinstated and revived and the rights of the Agent and
the Banks shall continue if and to the extent that for any reason any
payment by or on behalf of any Employee Borrower or the Guarantor is
rescinded or must be otherwise restored by the Agent or any Bank, whether
as a result of any proceedings in bankruptcy or reorganization or
otherwise, provided, however, that if the Agent or any Bank chooses to
contest any such matter at the request of the Guarantor, the Guarantor
agrees to indemnify and hold the Agent and any such Bank harmless with
respect to all costs (including, without limitation, attorneys' fees) of
such litigation. If any Employee Borrower becomes a debtor in a case under
the Federal Bankruptcy Code and the Guarantor is an "insider" as defined in
such Code, the Guarantor agrees, upon request by a debtor-in-possession or
trustee (collectively "Official") for such Employee Borrower, to pay to the
estate of such Employee Borrower an amount equal to any amount of
Guaranteed Debt previously paid to the Agent or any Bank by such Employee
Borrower and reasonably contended by such official to be avoidable under
Section 547 of such Code.
9. Miscellaneous. This Guaranty shall be governed in all respects by the
internal laws of the State of North Carolina but excluding its choice of
law rules and shall be binding upon and shall inure to the benefit of the
parties hereto and their respective heirs, executors, administrators,
personal representatives, successors and assigns. This Guaranty, together
with the Credit Agreement and the other documents executed thereunder
(collectively, as the same may be modified or amended, the "Credit
Documents"), constitute the entire agreement of the Agent on behalf of
itself and the Banks and the Guarantor with respect to its subject matter,
superseding and replacing any previous guaranty and applicable to all
obligations guaranteed by the Guarantor under any previous guaranty as well
as to all subsequently incurred Guaranteed Debt, and no provision hereof
may be modified, altered, amended or waived except by a writing executed by
the person against whom it is sought to be applied or enforced. All parties
have participated in the drafting of this Guaranty, and this Guaranty shall
be interpreted without reference to any rule of construction providing for
interpretation of documents against the Persons drafting them. This
Guaranty may be executed by the parties hereto individually or in any
combination of the parties hereto in several separate counterparts, each of
which shall be an original and all of which taken together shall constitute
one and the same Guaranty.
10. Venue, Etc. The Guarantor and the Agent agree that, at the option of
the Agent, all litigation arising out of this Guaranty shall be in the
local or federal courts located in the State of North Carolina, and the
Guarantor hereby waives any defense of inconvenient forum. The Guarantor
and the Agent further agree that process may be served upon any party
hereto by certified or registered mail, return receipt requested, directed
to such party at its address stated in the Credit Agreement, and each party
waives any defense of insufficiency of service with respect to process so
served. The Guarantor and the Agent further agree that, because of the
complexities of commercial transactions and the need for expeditious
resolution of disputes, any litigation arising out of this Guaranty shall
be before a court sitting without a jury, and both parties hereby waive
trial by jury in all such litigation, after having received the advice of
their respective independent counsel.
11. Limitation on Obligations. Notwithstanding any provision to the
contrary contained herein or in any other of the Credit Documents, to the
extent the obligations of the 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 the 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).
WITNESS the due execution hereof with the intent of being legally bound as
of the date stated on the first page hereof.
XXXXXX XXXXX & COMPANY,
a Delaware corporation,
ATTEST:__________________________ By:_________________________
Name: Xxxxxx X. Xxxxxxxxxxxx Name: Xxxxxxx X. Xxxxxx
Title: Secretary Title: Vice President and
Chief Financial Officer
EXHIBIT A
TO
GUARANTY AGREEMENT
[To be supplied by Guarantor)
EXHIBIT D-1
Name: ______________________
Home Address: _______________
Date: ______________________
Xxxxxx Xxxxx & Company
0000 Xxxxxxxxx Xxxx.
Xxxxxxxx, XX 00000
Attn: Xx. Xxxxxx X. Xxxxxxxxxxxx, General Counsel & Secretary
Gentlemen:
I have issued a promissory note in the principal amount of $_________ to
NationsBank, N.A. (the "Agent"), as agent for itself and certain other
banks. That note evidences a loan made to me by the Agent to enable me to
purchase, or to refinance the purchase of, ____________ shares of the
common stock of Xxxxxx Xxxxx & Company (the "Company").
As security for the timely satisfaction of my obligations under the note, I
hereby pledge to the Agent all shares purchased or refinanced with the
proceeds of the loan as stated above (the "Employee Pledged Shares"), and
grant to the Agent a lien on and security interest in those shares and all
proceeds thereof. I have not, and I agree that until the note has been paid
in full I will not, sell or otherwise dispose of any of the Employee
Pledged Shares or create, incur or permit to exist any other pledge, lien,
encumbrance, or security interest in the Employee Pledged Shares or their
proceeds except as provided in this letter.
The Agent is authorized to remit the proceeds of my loan directly to the
Company. The Company and/or its transfer agent is hereby authorized and
directed, upon disbursement by the Agent of the proceeds of my loan, to
register on its books my pledge to the Agent of the Employee Pledged
Shares, to identify said pledge of the Employee Pledged Shares on all
initial and periodic statements and all other statements or notices
respecting the Employee Pledged Shares, and to have all pledgee notices and
statements respecting the Employee Pledged Shares as well as any and all
certificates or any other instruments or documents evidencing my ownership
of the Employee Pledged Shares sent directly to the Agent at the following
address:
NationsBank, N.A.
000 Xxxxx Xxxxx Xxxxxx
Independence Center, 15th Floor
NC1-001-15-04
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxx Xxxxxx
Agency Services
I agree that the Agent shall take and maintain possession of all such
statements, notices, certificates, instruments and documents in its
capacity as pledgee.
In the event of (i) a default under my note, or (ii) my death, termination
of employment, or bankruptcy or the imposition of a lien or attachment on
the Employee Pledged Shares as described in Section 9.4 of the Company's
Bylaws before all principal and interest payments have been made on the
note, I agree and direct that such event may be considered by the Company
as an offer to sell the Employee Pledged Shares to the Company or to one or
more Eligible Purchasers as of the date of such event under the terms and
conditions of Section 9.4 of the Company's Bylaws. ("Eligible Purchaser" as
used in this letter has the meaning given to that term in Section 9.9(a) of
the Company's Bylaws). I agree to execute all necessary or appropriate
instruments and documents, including stock powers and notices or
instructions to register stock transfers, to permit the Company to sell the
Employee Pledged Shares in accordance with this letter, and I authorize the
Agent to give notices or instructions to register stock transfers or to
return all certificates for the Employee Pledged Shares, if any, to the
Company as necessary to effect such sale. I further agree and direct that
the Company shall apply the proceeds of any such sale (a) first, to pay any
remaining balance on the note (including principal and interest), (b)
second, to pay any other amounts required by applicable law, and (c) third,
to me to the extent, if any, of any surplus proceeds. In the event of the
sale of the Employee Pledged Shares upon termination of my employment with
the Company, the Company may deduct from any sums then due to me from the
Company (including without limitation accrued salary and vacation pay, if
any) the difference, if any, between the remaining balance on my note and
the proceeds of the sale of the Employee Pledged Shares, and the Company
may apply the amount so deducted as provided in (a) and (b) above. I agree
that I will have no right, either against the Company or against the Agent,
to any amounts applied under (a) or (b) above.
In the event that any or all of the Employee Pledged Shares are sold to one
or more Eligible Purchasers prior to repayment of my loan from the Agent, I
agree and direct that such Eligible Purchaser(s) shall be directed to remit
the purchase price to the Company and that the Company shall apply the
proceeds of such sale in the manner provided above. To facilitate the
foregoing, I agree and direct that the Company and/or its transfer agent
register on its books and identify on all transaction and periodic
statements respecting the Employee Pledged Shares the restriction that any
purchaser of the Employee Pledged Shares may be required to remit the
purchase price directly to the Company to be applied in payment of my
indebtedness to the Agent, and I further agree and direct that the
following legend shall be placed on all certificates, if any, for the
Employee Pledged Shares:
"In the event the shares represented by this certificate are sold, the
purchaser may be required to remit the purchase price directly to the
Company to be applied in payment of certain indebtedness of the registered
holder to NationsBank, N.A., as agent for itself and certain other banks."
You agree to have such legend removed from any certificate if and when you
are advised in writing by the Agent that my indebtedness to it has been
repaid in full.
Upon the payment in full of all amounts due under my note issued to the
Agent, I understand that with respect to all of the Employee Pledged Shares
that have not been sold or otherwise disposed of under the terms of this
letter, the Agent will direct the Company and/or its transfer agent to
register on its books the release of the Agent's lien on and the foregoing
restrictions respecting such Employee Pledged Shares, and will have
delivered to me, at its expense, free of liens and encumbrances, and
without recourse or representation, all certificates, if any, for such
Employee Pledged Shares. I agree that beyond the exercise of reasonable
care, the Agent shall have no duty or liability to preserve rights
pertaining to the Employee Pledged Shares, and shall be relieved of all
responsibility for the Employee Pledged Shares upon issuing a direction to
the Company and/or its transfer agent to register the release of its lien
on and the foregoing restriction respecting the Employee Pledged Shares and
upon surrendering or tendering surrender to me of all certificates, if any,
respecting the Employee Pledged Shares.
I agree that all rights, remedies and powers granted to the Agent in this
letter, in my note, in your guaranty of my note, or in any other document
previously, simultaneously or hereafter executed and delivered by me or by
any other party to the Agent in connection with this letter or my note
(collectively, the "Loan Documents"), whether express or implied, shall be
cumulative and may be exercised singly or concurrently with such other
rights as the Agent may have. I also agree that no failure or delay on the
part of the Agent in exercising any right, power or privilege hereunder,
under any of the Loan Documents, or under applicable law, shall operate as
a waiver thereof; nor shall any single or partial exercise of any right,
power or privilege hereunder or thereunder preclude any other or further
exercise thereof or the exercise of any other right, power, or privilege. I
further agree that no waiver or modification of any right, power or
privilege of the Agent or of any obligation of mine shall be effective
unless such waiver or modification is in writing, signed by the Agent, and
then only to the extent set forth therein, and I agree that a waiver by the
Agent of any right, power or privilege hereunder on any one occasion shall
not be construed as a bar to, or a waiver of, any such right, power or
privilege which the Agent otherwise would have on any subsequent occasion.
This letter constitutes a security agreement in favor of the Agent, and I
understand that the Agent is entitled to rights and remedies as a secured
party under this agreement and applicable law. I authorize and direct you
to provide a copy of this letter to the Agent, and I understand that the
Agent is relying on this letter, in addition to your guaranty of my note,
in making its loan to me.
Witness:_____________________ Signed:_____________________
(Signature)
Name: ________________________ Name:_______________________
(Print or Type) (Print or Type)
Tax ID No.:_________________
EXHIBIT D-2
Name:
Address:
Date:
Xxxxxx Xxxxx & Company
0000 Xxxxxxxxx Xxxx.
Xxxxxxxx, XX 00000
Attn: Xx. Xxxxxx X. Xxxxxxxxxxxx, General Counsel & Secretary
Gentlemen:
The undersigned employee [Employee Name] (the "Employee") has issued a
promissory note in the principal amount of $________ (the "Note") to
NationsBank, N.A. (the "Agent"), as agent for itself and certain other
banks. The Note evidences a loan made to the Employee by the Agent (the
"Loan") for the purpose of financing or refinancing the purchase by the
undersigned personal holding company [Personal Holding Company Name] (the
"Holding Company") of ___________ shares of the common stock of Xxxxxx
Xxxxx & Company (the "Company").
As security for the timely satisfaction of all obligations under the Note,
the undersigned hereby pledge to the Agent all shares purchased or
refinanced with the proceeds of the Loan as stated above (the "Employee
Pledged Shares"), and grant to the Agent a lien on and security interest in
the Employee Pledged Shares and all proceeds thereof. The undersigned have
not, and agree that until the Note has been paid in full they will not,
sell or otherwise dispose of any of the Employee Pledged Shares or create,
incur or permit to exist any other pledge, lien, encumbrance, or security
interest in the Employee Pledged Shares or their proceeds except as
provided in this letter.
The Agent is authorized to remit the proceeds of the Loan directly to the
Company. The Company and/or its transfer agent is hereby authorized and
directed, upon disbursement by the Agent of the proceeds of the Loan, to
register on its books the undersigned's pledge to the Agent of the Employee
Pledged Shares, to identify said pledge of the Employee Pledged Shares on
all initial and periodic statements and all other statements or notices
respecting the Employee Pledged Shares, and to have all pledgee notices and
statements respecting the Employee Pledged Shares as well as any and all
certificates or any other instruments or documents evidencing ownership of
the Employee Pledged Shares sent directly to the Agent at the following
address:
NationsBank, N.A.
000 Xxxxx Xxxxx Xxxxxx
Independence Center, 15th Floor
NC1-001-15-04
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxx Xxxxxx
Agency Services
The undersigned agree that the Agent shall take and maintain possession of
any and all such statements, notices, certificates, instruments and
documents in its capacity as pledgee.
In the event of (i) a default under the Note or (ii) the death, termination
of employment, or bankruptcy of the Employee or the imposition of a lien or
attachment on the Employee Pledged Shares as described in Section 9.4 of
the Company's Bylaws before all principal and interest payments have been
made on the Note, such event may be considered by the Company as an offer
to sell the Employee Pledged Shares to the Company or to one or more
Eligible Purchasers as of the date of such event under the terms and
conditions of Section 9.4 of the Company's Bylaws ("Eligible Purchaser" as
used in this letter has the meaning given to that term in Section 9.9(a) of
the Company's Bylaws). The undersigned agree to execute all necessary or
appropriate instruments and documents, including stock powers and notices
or instructions to register stock transfers, to permit the Company to sell
the Employee Pledged Shares in accordance with this letter, and the Agent
is hereby authorized to give notices or instructions to register stock
transfers or to return all certificates for the Employee Pledged Shares, if
any, to the Company as necessary to effect such sale. The undersigned
further agree and direct that the Company shall apply the proceeds of any
such sale (a) first, to pay any remaining balance on the Note (including
principal and interest), (b) second, to pay any other amounts required by
applicable law, and (c) third, to the Employee to the extent, if any, of
any surplus proceeds. In the event of the sale of the Employee Pledged
Shares upon the Employee's termination of employment as described above,
the Company may deduct from any sums then due to the Employee from the
Company (including without limitation accrued salary and vacation pay, if
any) the difference, if any, between the remaining balance on the Note and
the proceeds of the sale of the Employee Pledged Shares, and the Company
may apply the amount so deducted as provided in (a) and (b) above. The
undersigned agree that they will have no right, either against the Company
or against the Agent, to any amounts applied under (a) or (b) above.
In the event that any or all of the Employee Pledged Shares are sold to one
or more Eligible Purchasers prior to repayment of the Loan from the Agent,
such Eligible Purchaser(s) shall be directed to remit the purchase price to
the Company and that the Company shall apply the proceeds of such sale in
the manner provided above. To facilitate the foregoing, the undersigned
agree and direct that the Company and/or its transfer agent register on its
books and identify on all transaction and period statements respecting the
Employee Pledged Shares the restriction that any purchaser of the Employee
Pledged Shares may be required to remit the purchase price directly to the
Company to be applied in payment of the Employee's indebtedness to the
Agent, and the undersigned further agree and direct that the following
legend shall be placed on all certificates, if any, for the Employee
Pledged Shares:
"In the event the shares represented by this certificate are sold, the
purchaser may be required to remit the purchase price directly to the
Company to be applied in payment of certain indebtedness of the registered
holder to NationsBank, N.A., as agent for itself and certain other banks."
Such legend shall be removed from any certificate if and when the Company
is advised in writing by the Agent that all indebtedness to the Agent under
the Note has been repaid in full.
Upon the payment in full of all amounts due under the Note issued to the
Agent and with respect to all of the Employee Pledged Shares that have not
been sold or otherwise disposed of under the terms of this letter, the
Agent will direct the Company and/or its transfer agent to register on its
books the release of the Agent's lien on and restriction respecting such
Employee Pledged Shares, and will have delivered to the Holding Company, at
its expense, free of liens and encumbrances, and without recourse or
representation, all certificates, if any, for such Employee Pledged Shares.
The undersigned agree that beyond the exercise of reasonable care, the
Agent shall have no duty or liability to preserve rights pertaining to the
Employee Pledged Shares, and shall be relieved of all responsibility for
the Employee Pledged Shares upon issuing a direction to the Company and/or
its transfer agent to register the release of its lien on and the foregoing
restriction respecting the Employee Pledged Shares and upon surrendering or
tendering surrender to the Holding Company of all certificates, if any,
respecting the Employee Pledged Shares.
All rights, remedies and powers granted to the Agent in this letter, in the
Note, in your guaranty of the Note, or in any other document previously,
simultaneously or hereafter executed and delivered by either or both of the
undersigned or by any other party to the Agent in connection with this
letter or the Note (collectively, the "Loan Documents"), whether express or
implied, shall be cumulative and may be exercised singly or concurrently
with such other rights as the Agent may have. No failure or delay on the
part of the Agent in exercising any right, power or privilege hereunder,
under any of the Loan Documents, or under applicable law, shall operate as
a waiver thereof; nor shall any single or partial exercise of any right,
power or privilege hereunder or thereunder preclude any other or further
exercise thereof or the exercise of any other right, power, or privilege.
No waiver or modification of any right, power or privilege of the Agent or
of any obligation of either or both of the undersigned shall be effective
unless such waiver or modification is in writing, signed by the Agent, and
then only to the extent set forth therein, and a waiver by the Agent of any
right, power or privilege hereunder on any one occasion shall not be
construed as a bar to, or a waiver of, any such right, power or privilege
which the Agent otherwise would have on any subsequent occasion.
This letter constitutes a security agreement in favor of the Agent, and the
undersigned understand that the Agent is entitled to rights and remedies as
a secured party under this agreement and applicable law. The undersigned
authorize and direct the Company to provide a copy of this letter to the
Agent and understand that the Agent is relying on this letter, in addition
to the Company's guaranty of the Note, in making the Loan.
Employee:
Witness: Signed:
(Signature) (Employee Signature)
Name: Name:
(Print or Type) (Print or Type)
Personal Holding
Company:
Witness: Signed:
(Signature) (Name of Personal
Holding Co.)
Name: Tax ID No.:
(Type or Print Name) (Print or Type)
By:
(Employee Signature)
Name:
(Type or Print
Employee Name)
EXHIBIT E
EMPLOYEE STOCK POWER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers to
the following shares of the common stock of _________________, a
___________ corporation:
No. of Shares Certificate No.
and irrevocably appoints __________________________________ its agent and
attorney-in-fact to transfer all or any part of such common stock and to
take all necessary and appropriate action to effect any such transfer. The
agent and attorney-in-fact may substitute and appoint one or more persons
to act for him. The effectiveness of a transfer pursuant to this stock
power shall be subject to any and all transfer restrictions referenced on
the face of the certificates evidencing such interest or in the certificate
of incorporation or bylaws of the subject corporation, to the extent they
may from time to time exist.
Date: _____________
By:_____________________________
Name:
Title:
EXHIBIT F
TRUTH IN LENDING DISCLOSURE STATEMENT
Creditor: NationsBank, N.A., as Agent (the "Agent") under that
Credit
Agreement dated as of June 30, 1998 among Xxxxxx
Xxxxx &
Company (the "Borrower"), the Subsidiary Guarantors
identified
therein, the banks party thereto (the "Banks")
and
NationsBank, N.A. (the "Agent") (as the same may be
amended,
modified, extended or restated from time to time, the
"Credit
Agreement").
ANNUAL
PERCENTAGE RATE FINANCE CHARGE Amount Financed Total of Payments
The cost of your The dollar amount the The amount of credit
credit as a yearly credit will cost you. provided to you or on The amount you
rate your behalf. will have paid
after you have
made all
payments as
scheduled
% $ $ $
------------------------------------------------------------------------------
Your payment schedule will be:
Except as provided below, 27 interest payments with the first interest
payment due April __, 19__ and subsequent interest payments due on the 3rd
business day of each July, October, January and April thereafter, until
this debt is paid in full, and, except as provided below, seven (7)
principal payments of $__________ each, with the first payment due
September 30, 19__ and subsequent payments due on September 30 of each year
thereafter, with the final payment due September 30, 200__. The amounts of
interest payments will vary. Based on the current ANNUAL PERCENTAGE RATE,
the largest interest payment will be $_________________ and the smallest
interest payment will be $_________________, assuming that principal
payments are made in accordance with the foregoing schedule.
All principal on this loan shall be due on the earlier of (i) one calendar
year after termination (whether voluntary or involuntary) of your
employment with Xxxxxx Xxxxx & Company or any of its subsidiaries or
affiliates, or (ii) immediately upon the sale of the common stock securing
payment of this loan, if either such date is earlier than September 30,
200__.
The annual percentage rate may increase during the term of this transaction
if the Applicable Rate increases. For purposes hereof, "Applicable Rate"
means (i) for all periods prior to and including January 5, 2001, the
Adjusted Base Rate and (ii) for all periods thereafter (a) if no Cash Flow
Deficiency exists as of the immediately preceding Calculation Date, the
Adjusted Base Rate and (b) if a Cash Flow Deficiency exists as of the
immediately preceding Calculation Date, the Prime Rate. "Adjusted Base
Rate" means, for any day, the rate per annum (rounded upwards, if
necessary, to the nearest whole multiple of 1/100 of 1%) equal to the
greater of (a) the Federal Funds Rate in effect on such day plus 1/2 of
1.0% or (b) the Prime Rate in effect on such day, minus 1.0%. 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 Adjusted Base Rate shall be determined without regard to
clause (a) of the first sentence of this definition until the circumstances
giving rise to such inability no longer exist. Any change in the Adjusted
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 the
Federal Funds Rate, respectively. "Federal Funds Rate" means, for any day,
the rate of interest per annum (rounded upwards, if necessary, to the
nearest whole multiple of 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 and (B) if no such rate is so published on such next
succeeding business day, the Federal Funds Rate for such day shall be the
average rate quoted to the Agent on such day on such transactions as
determined by the Agent. "Prime Rate" means the per annum rate of interest
established from time to time by the Agent at its principal office in
Charlotte, North Carolina as its Prime Rate. Any change in the interest
rate resulting from a change in the Prime Rate shall become effective as of
12:01 a.m. of the business day on which each change in the Prime Rate is
announced by the Agent. The Prime Rate is a reference rate used by the
Agent in determining interest rates on certain loans and is not intended to
be the lowest rate of interest charged on any extension of credit to any
debtor. "Calculation Date" means the last day of the fiscal quarter of the
Borrower. A "Cash Flow Deficiency" shall exist at any time when the
Leverage Ratio of the Borrower, on a consolidated basis, is 2.5 or greater.
"Leverage Ratio" means the ratio of (i) Consolidated Funded Debt to (ii)
Consolidated EBITDA. "Consolidated Funded Debt" means Funded Debt of the
Consolidated Group determined on a consolidated basis in accordance with
GAAP and "Funded Debt" means, with respect to any person, without
duplication, (i) all obligations of such person for borrowed money, (ii)
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), (iii) 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, (iv) the principal portion of all obligations of such
person under capital leases, (v) 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 draft drawn thereunder (to the
extent unreimbursed), (vi) all Funded Debt of another person secured by (or
for which the holder of such Funded Debt has an existing right, contingent
or otherwise, to be secured by) any lien on, or payable out of the proceeds
of production from, property owned or acquired by such person, whether or
not the obligations secured thereby have been assumed, (vii) all guaranty
obligations of such person with respect to Funded Debt of another person
and (viii) Funded Debt of any partnership or unincorporated joint venture
in which such person is a general partner or a joint venturer (but only to
the extent to which such person's assets are at risk in such joint
venture). "Consolidated EBITDA" means, for any period for the Consolidated
Group, the sum of (i) Consolidated Net Income for such period, plus (ii) to
the extent deducted in the calculation of Consolidated Net Income, the sum
of interest expense, income taxes, depreciation and amortization, plus
(iii) nonrecurring cash and non-cash charges incurred in connection with
the Well Spring Joint Venture write-down, determined on a consolidated
basis in accordance with GAAP. "Consolidated Net Income" means for any
period for the Consolidated Group, net income on a consolidated basis
determined in accordance with GAAP. "Consolidated Group" means the Borrower
and its consolidated subsidiaries, as determined in accordance with GAAP.
"GAAP" means generally accepted accounting principles in the United States
applied on a consistent basis.
Any increase in the annual percentage rate will take the form of higher
quarterly interest payments.
If your loan were for $3,000.00 at 8% per year for seven (7) years and the
rate increased to 9% per year after the first interest payment but prior to
the first principal payment, then your quarterly interest payments would
increase by $7.50 until the first principal payment had been made, and by
something less than $7.50 during subsequent years as the principal amount
is paid down and the amount of interest payments decrease.
Security: You are giving a security interest in common stock
of Xxxxxx Xxxxx & Company purchased
or refinanced with the proceeds of this loan.
Late Charge: If an interest payment is late you will be
charged interest on such payment at the
Applicable
Rate plus 2%, and if a principal payment is fifty
(50) days or more late, you will be charged
interest
on such payment at the Applicable Rate plus 2%.
Prepayment: If you pay off early, you will not have to pay a
penalty.
See your contract documents for any additional information about
nonpayment, default, any required repayment in full before the scheduled
date, and prepayment refunds and penalties.
-----------------------------------------------------------------------------
Itemization of Amount Financed
Itemization of Amount Financed of $_________________.
This entire amount will be paid to Xxxxxx Xxxxx & Company on
your
behalf.
------------------------------------------------------------------------------
I acknowledge receipt of the foregoing Truth in Lending Disclosures.
-----------------------------------
Printed Name:_______________________
Date:______________________________
EXHIBIT G
INITIAL TRANSACTION STATEMENT
Shares of Common Stock of
XXXXXX XXXXX & COMPANY
Par Value $1.00 per Share
1. Registered Owner: [Name, address, and Tax ID No. of owner (Qualified
Employee, pension plan or personal holding company, as applicable)]
2. Registered Pledgee: NationsBank, N.A.
000 Xxxxx Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Agency Services
Tax ID No.: 00-0000000
3. Date of Registration of Transfer and Pledge:
4. Number of Shares Transferred to Registered Owner:
5. Number of Shares Pledged to Registered Pledgee:
6. Liens, Restrictions and Adverse Claims: Any purchaser of the
subject shares may be required to remit the purchase price
directly to Xxxxxx Xxxxx & Company to be applied in payment of
certain indebtedness of the Registered Owner to the Registered
Pledgee, as agent for itself and certain other banks.
THIS STATEMENT IS MERELY A RECORD OF THE RIGHTS OF THE ADDRESSEE AS OF THE
TIME OF ITS ISSUANCE. DELIVERY OF THIS STATEMENT, OF ITSELF, CONFERS NO
RIGHTS ON THE RECIPIENT. THIS STATEMENT IS NEITHER A NEGOTIABLE INSTRUMENT
NOR A SECURITY.
XXXXXX XXXXX & COMPANY
By:______________________________
Name:____________________________
Title:_____________________________
EXHIBIT H
PERIODIC TRANSACTION STATEMENT
Dated: ______________
Shares of Common Stock of
XXXXXX XXXXX & COMPANY
Par Value $1.00 per Share
1. Registered Owner: [Name, address, and Tax ID No. of owner (Qualified
Employee, pension plan or personal holding company, as applicable)]
2. Registered Pledgee: NationsBank, N.A.
000 Xxxxx Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Agency Services
Tax ID No.: 00-0000000
3. Number of Shares Registered to Registered Owner:
4. Number of Shares Pledged to Registered Pledges:
5. Liens, Restrictions and Adverse Claims: Any purchaser of the
subject shares may be required to remit the purchase price
directly to Xxxxxx Xxxxx & Company to be applied in payment of
certain indebtedness of the Registered Owner to the Registered
Pledgee, as agent for itself and certain other banks.
THIS STATEMENT IS MERELY A RECORD OF THE RIGHTS OF THE ADDRESSEE AS OF THE
TIME OF ITS ISSUANCE. DELIVERY OF THIS STATEMENT, OF ITSELF, CONFERS NO
RIGHTS ON THE RECIPIENT. THIS STATEMENT IS NEITHER A NEGOTIABLE INSTRUMENT
NOR A SECURITY.
XXXXXX XXXXX & COMPANY
By:___________________________
Name:_________________________
Title:________________________
EXHIBIT I
FORM OF AGREEMENT TO EMPLOYEE PLEDGE AGREEMENTS
In consideration of financial accommodations made by NationsBank, N.A., as
Agent for the Banks party to the Credit Agreement referred to below
("Agent"), to or at the request of Xxxxxx Xxxxx & Company (the "Borrower"),
and the mutual covenants contained in that certain Credit Agreement, dated
as of June 30, 1998, among the Borrower, the Subsidiary Guarantors
identified therein, the Agent and the Banks party thereto (the "Banks"), as
said agreement may have been or may be amended from time to time (the
"Credit Agreement"), and having reviewed the Employee Pledge Agreements
executed and delivered in connection with Employee Loans as identified on
the attached schedule (which schedule identifies all Employee Pledge
Agreements executed and delivered after ___________________), the Borrower
hereby reaffirms its prior acknowledgment of and agreement to certain of
the Employee Pledge Agreements, and hereby further acknowledges and agrees
to the terms and conditions of each and every one of the Employee Pledge
Agreements.
This Agreement to Employee Pledge Agreements is executed and delivered with
the intent that the Borrower shall be bound by each of the Employee Pledge
Agreements and that the Agent and the Banks shall rely hereon and thereon
in making or participating in Employee Loans.
Capitalized terms used but not defined herein shall have the meanings
stated in the Credit Agreement. As used herein, "Employee Pledge
Agreements" shall include any and all amendments to the Employee Pledge
Agreements.
XXXXXX XXXXX & COMPANY
By: ___________________
Name: ___________________
Title:___________________
Exhibit I, Page 2
Schedule of Employee Loans
and Employee Pledge Agreements
Number of
Name Initial Loan Amount Shares Pledged Date
EXHIBIT J
FORM OF NOTICE OF BORROWING
TO: NATIONSBANK, N.A., as Agent
000 Xxxxx Xxxxx Xxxxxx
Independence Center, 15th Floor
NC1-001-15-04
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxx Xxxxxx
Agency Services
RE: Credit Agreement dated as of June 30, 1998 among Xxxxxx Xxxxx & Company
(the "Borrower"), the Subsidiary Guarantors identified therein, the
banks party thereto (the "Banks") and NationsBank, N.A., as Agent (as
the same may be amended, modified, extended or restated from time to
time, the "Credit Agreement")
DATE: _____________, 199__
1. This Notice of Borrowing is made pursuant to the terms of the Credit
Agreement. All capitalized terms used herein unless otherwise defined
shall have the meanings set forth in the Credit Agreement.
2. Please be advised that:
______ (a) the Borrower is requesting Revolving
Credit Loans in the amount of $__________ to
be funded on ____________, 199__ at the
interest rate option set forth in paragraph
3 below.
Subsequent to the funding of the requested
Revolving Credit Loans, the aggregate amount
of outstanding Revolving Credit Loans,
together with outstanding LOC Obligations,
will be $_________ which is less than or
equal to the Aggregate Revolving Credit
Commitment.
______ (b) the Borrower is requesting that a
portion of the current outstanding Revolving
Credit Loans in the amount of $__________ be
extended or converted at the interest rate
option set forth in paragraph 3 below.
______ (c) on behalf of the Qualified Employees,
the Borrower is requesting Employee Loans in
the amount of $__________ to be funded on
____________, 199__.
Subsequent to the funding of the requested Employee
Loans, the aggregate amount of outstanding Employee
Loans will be $_________ which is less than or equal
to the Employee Loan Commitment.
Subsequent to the funding of each individual Employee
Loan, the amount funded in connection with such
Employee Loan will not exceed the book value of the
shares of stock to be purchased or refinanced with
the proceeds of such Employee Loan, as computed in
accordance with Section 2.1(d) of the Credit
Agreement.
3. The interest rate option applicable to the requested Revolving Credit
Loans (or the extension or conversion of all or part of the existing
Revolving Credit Loans), as set forth above, shall be:
a. ________ the Base Rate
b. ________ the Eurodollar Rate plus the Applicable Percentage
for an Interest Period of:
________ one month
________ two months
________ three months
________ six months
4. The representations and warranties set forth in the Credit Documents
are true and correct in all material respects as if made on the date
hereof and shall be true and correct as of the date of the borrowing
(or continuation or conversion thereof).
5. As of the date hereof, no Incipient Default or Event of Default has
occurred and is continuing or would be caused by this Notice of
Borrowing or the making of Loans requested hereby and no Incipient
Default or Event of Default shall exist as of the date of the borrowing
(or continuation or conversion thereof).
7. No material adverse effect has occurred in the financial conditio
of the Borrower since the Closing Date.
8. No Margin Stock Event has occurred.
XXXXXX XXXXX & COMPANY
By:___________________
Name:__________________
Title:_________________
EXHIBIT K
FORM OF SOLVENCY CERTIFICATE
The undersigned treasurer of Xxxxxx Xxxxx & Company, a Delaware corporation
("Xxxxxx Xxxxx"), is familiar with the properties, businesses, assets and
liabilities of Xxxxxx Xxxxx and is duly authorized to execute this
certificate on behalf of Xxxxxx Xxxxx
Reference is made to that Credit Agreement dated as of June 30, 1998 among
Xxxxxx Xxxxx, the Subsidiary Guarantors identified therein, the banks party
thereto (the "Banks") and NationsBank, N.A., as Agent (the "Agent") (as the
same may be amended, modified, extended or restated from time to time, the
"Credit Agreement"). All capitalized terms used and not defined herein have
the meanings stated in the Credit Agreement.
1. The undersigned certifies that he has made such investigation and
inquiries as to the financial condition of Xxxxxx Xxxxx as he deems
necessary and prudent for the purpose of providing this Certificate. The
undersigned acknowledges that the Agent and the Banks are relying on the
truth and accuracy of this Certificate in connection with making of the
Loans under the Credit Agreement.
2. The undersigned certifies that the financial information, projections
and assumptions which underlie and form the basis for the representations
made in this Certificate were reasonable when made and were made in good
faith and continue to be reasonable as of the date hereof.
BASED ON THE FOREGOING, the undersigned certifies that, both before and
after giving effect to the Loans:
A. Xxxxxx Xxxxx has assets having a fair saleable value which exceeds its
liabilities.
B. Xxxxxx Xxxxx is able to and anticipates that it will be able to meet its
debts as they mature.
C. Xxxxxx Xxxxx has adequate capital to conduct the business in which it is
and proposes to be engaged.
D. The representations and warranties of Xxxxxx Xxxxx set forth in the
Credit Agreement are true and correct.
E. No Incipient Default or Event of Default under the Credit Agreement
exists or would exist.
F. The Financial Statements delivered to the Banks pursuant to Section
5.1(k) of the Credit Agreement fairly and completely present the financial
condition of Xxxxxx Xxxxx.
IN WITNESS WHEREOF, the undersigned has executed this Certificate this 30th
day of June, 1998, in his capacity as the treasurer of Xxxxxx Xxxxx.
-----------------------------
Xxxx X. Xxxxxxxxx
Title: Treasurer of Xxxxxx
Xxxxx & Company
EXHIBIT L
FORM OF JOINDER AGREEMENT
THIS JOINDER AGREEMENT (the "Agreement"), dated as of ___________________,
1998, is by and between _______________________, a ________________ (the
"Applicant Guarantor"), and NATIONSBANK, N.A., in its capacity as Agent
under that certain Credit Agreement dated as of June 30, 1998 (as amended
and modified, the "Credit Agreement") by and among Xxxxxx Xxxxx & Company,
a Delaware corporation, the Subsidiary Guarantors and Banks identified
therein and NationsBank, N.A., as Agent. All of the defined terms in the
Credit Agreement are incorporated herein by reference.
The Applicant Guarantor has indicated its desire to become a Subsidiary
Guarantor or is required by the terms of Section 6.13 of the Credit
Agreement to become a Subsidiary Guarantor under the Credit Agreement.
Accordingly, the Applicant Guarantor hereby agrees as follows with the
Agent for the benefit of the Banks:
1. The Applicant Guarantor hereby acknowledges, agrees and confirms that,
by its execution of this Agreement, the Applicant Guarantor will be deemed
to be a party to the Credit Agreement and a "Subsidiary Guarantor" for all
purposes of the Credit Agreement and the other Credit Documents, and shall
have all of the obligations of a Subsidiary Guarantor thereunder as if it
had executed the Credit Agreement and the other Credit Documents. The
Applicant Guarantor agrees to be bound by all of the terms, provisions and
conditions contained in the Credit Documents, including without limitation
(i) all of the affirmative and negative covenants set forth in Articles VI
and VII of the Credit Agreement and (ii) all of the undertakings and
waivers set forth in Article IV of the Credit Agreement. Without limiting
the generality of the foregoing terms of this paragraph 1, the Applicant
Guarantor hereby (A) jointly and severally together with the other
Subsidiary Guarantors, guarantees to each Bank, the Agent and the Issuing
Bank as provided in Article III of the Credit Agreement, the prompt payment
and performance of the Subsidiary Guaranteed Obligations in full when due
(whether at stated maturity, as a mandatory prepayment, by acceleration, as
a mandatory cash collateralization or otherwise) strictly in accordance
with the terms thereof, (B) agrees that if any of the Subsidiary Guaranteed
Obligations are not paid or performed in full when due (whether at stated
maturity, as a mandatory prepayment, by acceleration, as a mandatory cash
collateralization or otherwise), the Applicant Guarantor will, jointly and
severally together with the other Subsidiary Guarantors, promptly pay and
perform the same, without any demand or notice whatsoever, and that in the
case of any extension of time of payment or renewal of any of the
Subsidiary Guaranteed Obligations, the same will be promptly paid in full
when due (whether at extended maturity, as a mandatory prepayment, by
acceleration, as a mandatory cash collateralization or otherwise) in
accordance with the terms of such extension or renewal, (C) grants to the
Agent a security interest in its Collateral as referred in, and pursuant to
the terms of, the Security Agreement, and
(D) pledges and grants a security interest to the Agent in the Pledged
Stock identified in Schedule A attached hereto and the other Collateral as
referred in, and pursuant to the terms of, the Credit Party Pledge
Agreement.
2. The Applicant Guarantor acknowledges and confirms that it has received a
copy of the Credit Agreement and the Schedules and Exhibits thereto. The
information on the Schedules to the Credit Agreement, the Security
Agreement and the Credit Party Pledge Agreement are amended to provide the
information shown on the attached Schedule A.
3. The Applicant Guarantor hereby waives acceptance by the Agent and the
Banks of the guaranty by the Applicant Guarantor under Article III of the
Credit Agreement upon the execution of this Joinder Agreement by the
Applicant Guarantor.
4. This Agreement may be executed in two or more counterparts, each of
which shall constitute an original but all of which when taken together
shall constitute one contract.
5. This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the State of North Carolina.
IN WITNESS WHEREOF, the Applicant Guarantor has caused this Joinder
Agreement to be duly executed by its authorized officers, and the Agent,
for the benefit of the Banks, has caused the same to be accepted by its
authorized officer, as of the day and year first above written.
APPLICANT GUARANTOR
By: ______________________________
Name:
Title:
Address for Notices:
Attn:
Telephone:
Telecopy:
Acknowledged and accepted:
NATIONSBANK, N.A., as Agent
By: ______________________________
Name:
Title:
Schedule A
to
Joinder Agreement
Schedule 1(b) to Security Agreement
Intellectual Property
Schedule 4(a) to Security Agreement
Chief Executive Office
Schedule 4(b) to Security Agreement
Locations of Collateral
Schedule 4(c) to Security Agreement
Mergers, Consolidations, Change in Structure or Use of Tradenames
Schedule 2(a) to Pledge Agreement
Description of Pledged Shares
Applicant Guarantor
No. of Certificate
Name of Subsidia Shares No. Percentage
STATE OF _______________ )
)
COUNTY OF _____________ )
VERIFICATION
The undersigned, being first duly sworn, deposes and says that he is the
treasurer of Xxxxxx Xxxxx & Company, a Delaware corporation, that he has
read the foregoing and to his personal knowledge the matters and statements
contained therein are true and accurate.
This the 30th day of June, 1998.
----------------------------
Sworn to and subscribed before me this 30th day of June, 1998.
----------------------------------
Notary Public
My Commission Expires:
----------------------------------
SCHEDULE 1 to
Credit Agreement
XXXXXX XXXXX & COMPANY
SUBSIDIARIES AND AFFILIATES
LOCATION NAME OWNERSHIP1
Argentina Xxxxxx Xxxxx Argentina S.A. 4 100%
Australia Xxxxxx Xxxxx Australia Pty Ltd 100%
Australia WyComp Pty. Limited15 100%
Belgium G&H Consulting Actuaries B.V.6 100%
Belgium Xxxxxx Xxxxx S.A. 50.1%
Brazil Xxxxxx Xxxxx Brasil Ltda. 9 99%
Canada Xxxxxx Xxxxx Company Limited 100%
China: Shanghai Xxxxxx Xxxxx China Ltd. 4 100%
Colombia Xxxxxx Xxxxx Colombia S.A. 4 100%
France Xxxxxx Xxxxx S.A.R.L. 50.1%
Germany Xxxxxx Xxxxx GmbH 50.1%
Germany Xxxxx Xxxx Xxxxxxx GmbH10 50%
Hong Kong Xxxxxx Xxxxx Hong Kong Limited4 100%
Hong Kong Xxxxxx Xxxxx Systems Limited13 100%
India Xxxxxx Xxxxx India Private Limited5 60%
Indonesia P.T. Xxxxxx Xxxxx Purbajaga 60%
Italy Xxxxxx Xxxxx S.r.l. 50.1%
Japan Xxxxxx Xxxxx K.K. 4 100%
Malaysia Xxxxxx Xxxxx (Malaysia) Sdn. Bhd. 4 100%
Mauritius Xxxxxx Xxxxx Holdings (Mauritius) Limited11 100%
Mexico Xxxxx Internacional, S.A. de C.V. 4 100%
Mexico Xxxxxx Xxxxx Mexico, S.A. de C.V. 16 100%
Netherlands Xxxxxx Xxxxx B.V. 50.1%
New Zealand Retirement Advisory Services (NZ) Limited 100%
New Zealand Retirement Trustees NZ Limited 100%
New Zealand Xxxxxx Xxxxx New Zealand Limited4 100%
Philippines Xxxxxx Xxxxx Philippines, Inc. 2, 4 100%
Puerto Rico Xxxxxx Xxxxx Puerto Rico, Inc. 100%
Singapore Xxxxxx Xxxxx Singapore Pte. Ltd. 4 100%
Spain Xxxxxx Xxxxx de Espana, S.A. 50.1%
Sri Lanka Xxxxxx Xxxxx Lanka (Private) Limited12 100%
Sweden Xxxxxx Xxxxx AB 50.1%
Switzerland Xxxxxx Xxxxx AG 50.1%
Thailand Xxxxxx Xxxxx (Thailand) Ltd. 100%
U.K. Xxxxxx & Company Limited7 100%
U.K. PCL (1991) Limited 100%
U.K. PCL Limited7 100%
U.K. The Xxxxx Company (UK) Limited7 100%
U.K. The Xxxxx Company Holdings Limited4 100%
U.K. Xxxxxx Xxxxx Holdings (Europe) Limited 50.1%
U.K. Xxxxxx Xxxxx International Pension Trustees, Ltd 50.1%
U.K. Xxxxxx Xxxxx Limited 50.1%
U.K. Xxxxx Financial Services Limited7 100%
U.K. Xxxxx Pension Plan Trustee Limited7 100%
U.S. Delaware Xxxxxx Xxxxx Investment Consulting, Inc. 100%
U.S. Delaware Xxxxx Data Services, Inc. 100%
U.S. Delaware Xxxxx Preferred Choice, L.P. 3 100%
U.S. Delaware Xxxxx Preferred Choice, L.L.C. 100%
U.S. Massachusetts Xxxxx Asset Services, Inc. 100%
U.S. Nevada Xxxxxx Xxxxx & Company II (nameholder) 100%
U.S. Nevada Xxxxxx Xxxxx International, Inc. 100%
------------------------------------------------------
1 Includes direct and indirect ownership by Xxxxxx Xxxxx & Company
2 Other 60% held by Philippine nationals; nominee shareholders
3 General Partner: Xxxxxx Xxxxx & Company, Limited Partner is Xxxxx
Preferred Choice, L.L.C.
4 100% held by Xxxxxx Xxxxx International, Inc.
5 Joint Venture; Other 40% held by ABC Consultants Private, Limited
6 100% held by Xxxxxx Xxxxx S.A. (Belgium subsidiary)
7 100% held by The Xxxxx Company Holdings Limited
8 Owned beneficially 100% by Xxxxxx Xxxxx & Company
9 Other 1% held by Xxxxx Data Services, Inc.
10 Other 50% held by Drs. Bode and Xxxxxxx
11 60% held by Xxxxxx Xxxxx International, Inc.; 20% held by each of Xxxxxx
Xxxxx Hong Kong Limited and Xxxxxx Xxxxx Company Limited
12 100% held by Xxxxxx Xxxxx Singapore Pte. Ltd.
13 100% held by Xxxxxx Xxxxx Hong Kong Limited
14 Intentionally blank
15 100% held by Xxxxxx Xxxxx Australia Pty. Ltd.
16 100% owned by Xxxxx Internacional, S.A. de C.V.(this company formerly
known as Xxxxxx Xxxxx Mexico, S.A. de C.V.)
SCHEDULE 2
To Credit Agreement
PERMITTED NONCOMPLIANCE
None.
SCHEDULE 3
To Credit Agreement
LITIGATION
None.
SCHEDULE 4
To Credit Agreement
BURDENSOME DOCUMENTS
None.
SCHEDULE 5
To Credit Agreement
REAL PROPERTY
Parque Reforma Piso 2
Xxxxxx Xxxxxxx 400
Col. Xxxxx xx Xxxxxxxxxxx
Xxxxxx Xxxx, Xxxxxx 00000
(Office condominium on 2nd floor of commercial office building.)
SCHEDULE 6
To Credit Agreement
INDEBTEDNESS
Letters of Credit issued by NationsBank totaling $2.25 million as
indicated
below:
Beneficiary Amount Purpose
Royal Indemnity Company $225,000 1998 Workers Compensation Program
Xxxxxx Bank $1.5 million Insurance Captive Initial
Capitalization
Sanyo North America $500,000 Xxxxx Data Services Office Lease
Bank overdrafts incurred in the normal course of business.
Deed of Guarantee issued to Midland Bank plc in connection with the
overdraft facility for Xxxxxx Xxxxx Limited in the amount of
(pound)250,000.
Performance payments due to HR Best Practices (d/b/a People Management
Resources) for the period ending June 30, 1998 in connection with the Asset
Purchase Agreement dated May 12, 1995 by and between HR Best Practices and
The Xxxxx Company.
Agreement dated June 30, 1998 between Xxxxxx Xxxxx & Company and PeopleSoft
USA, Inc, for approximately $1.2 million. This is a fully cancelable
contract on or before September 25, 1998 and provides software licensing
and maintenance for four years.
Potential tax liability associated with the Brussels, Belgium office. The
statute of limitations expire at the end of 1999, and the current liability
of approximately $200,000 has been fully reserved by the Company.
SCHEDULE 7
To Credit Agreement
INVESTMENTS
To be delivered post-closing.
