1
Exhibit 4.1
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AMENDED AND RESTATED
CREDIT AGREEMENT
by and among
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ RETAIL, INC.
(formerly known as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Inc.),
as Borrower,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, INC.
(formerly known as FloraFax International, Inc.),
as Guarantor,
NATIONSBANK, NATIONAL ASSOCIATION,
as Agent and as Lender
and
THE LENDERS PARTY HERETO FROM TIME TO TIME
June 4, 1999
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TABLE OF CONTENTS
Page
ARTICLE I
Definitions and Terms
1.1. Amendment and Restatement............................................................................3
1.2. Definitions..........................................................................................3
1.3. Rules of Interpretation.............................................................................28
ARTICLE II
The Revolving Credit Facility
2.1. Loans...............................................................................................30
2.2. Payment of Interest.................................................................................32
2.3. Payment of Principal................................................................................32
2.4. Manner of Payment...................................................................................33
2.5. Notes...............................................................................................33
2.6. Pro Rata Payments...................................................................................34
2.7. Reductions..........................................................................................34
2.8. Conversions and Elections of Subsequent Interest Periods............................................34
2.9. Increase and Decrease in Amounts....................................................................35
2.10. Facility Fees.......................................................................................35
2.11. Deficiency Advances; Failure to Purchase Participations.............................................35
2.12. Use of Proceeds.....................................................................................36
ARTICLE III
Letters of Credit
3.1. Letters of Credit...................................................................................38
3.2. Reimbursement.......................................................................................38
3.3. Letter of Credit Facility Fees......................................................................41
3.4. Administrative Fees.................................................................................42
ARTICLE IV
Security
4.1. Security............................................................................................43
4.2. Further Assurances..................................................................................43
4.3. Information Regarding Collateral....................................................................43
ARTICLE V
Change in Circumstances
5.1. Increased Cost and Reduced Return...................................................................45
5.2. Limitation on Types of Loans........................................................................46
5.3. Illegality..........................................................................................46
5.4. Treatment of Affected Loans.........................................................................47
5.5. Compensation........................................................................................47
5.6. Taxes...............................................................................................48
ARTICLE VI
Conditions to Making Loans and Issuing Letters of Credit
6.1. Conditions of Initial Advance.......................................................................50
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6.2. Conditions of Loans and Letter of Credit............................................................52
ARTICLE VII
Representations and Warranties
7.1. Organization and Authority..........................................................................54
7.2. Loan Documents......................................................................................54
7.3. Solvency............................................................................................55
7.4. Subsidiaries and Stockholders.......................................................................55
7.5. Ownership Interests.................................................................................55
7.6. Financial Condition.................................................................................55
7.7. Title to Properties.................................................................................56
7.8. Taxes...............................................................................................57
7.9. Other Agreements....................................................................................57
7.10. Litigation..........................................................................................57
7.11. Margin Stock........................................................................................57
7.12. Investment Company..................................................................................57
7.13. Patents, Etc........................................................................................58
7.14. No Untrue Statement.................................................................................58
7.15. No Consents, Etc....................................................................................58
7.16. Employee Benefit Plans..............................................................................58
7.17. No Default..........................................................................................60
7.18. Environmental Laws..................................................................................60
7.19. Employment Matters..................................................................................60
7.20. RICO................................................................................................60
7.21. Year 2000 Compliance................................................................................60
ARTICLE VIII
Affirmative Covenants
8.1. Financial Reports, Etc..............................................................................62
8.2. Maintain Properties.................................................................................63
8.3. Existence, Qualification, Etc.......................................................................63
8.4. Regulations and Taxes...............................................................................64
8.5. Insurance...........................................................................................64
8.6. True Books..........................................................................................64
8.7. Year 2000 Compliance................................................................................64
8.8. Right of Inspection.................................................................................64
8.9. Observe all Laws....................................................................................64
8.10. Governmental Licenses...............................................................................65
8.11. Covenants Extending to Other Persons................................................................65
8.12. Officer's Knowledge of Default......................................................................65
8.13. Suits or Other Proceedings..........................................................................65
8.14. Notice of Environmental Complaint or Condition......................................................65
8.15. Environmental Compliance............................................................................65
8.16. Indemnification.....................................................................................66
8.17. Further Assurances..................................................................................66
8.18. Employee Benefit Plans..............................................................................66
8.19. Continued Operations................................................................................67
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8.20. New Subsidiaries....................................................................................67
ARTICLE IX
Negative Covenants
9.1. Financial Covenants.................................................................................70
9.2. Acquisitions........................................................................................71
9.3. Ownership...........................................................................................71
9.4. Liens...............................................................................................71
9.5. Indebtedness........................................................................................72
9.6. Transfer of Assets..................................................................................73
9.7. Investments.........................................................................................73
9.8. Merger or Consolidation.............................................................................74
9.9. Restricted Payments.................................................................................74
9.10. Transactions with Affiliates........................................................................74
9.11. Compliance with ERISA...............................................................................75
9.12. Fiscal Year.........................................................................................76
9.13. Dissolution, etc....................................................................................76
9.14. Limitations on Sales and Leasebacks.................................................................76
9.15. Change in Control...................................................................................76
9.16. Rate Hedging Obligations............................................................................76
9.17. Negative Pledge Clauses.............................................................................76
ARTICLE X
Events of Default and Acceleration
10.1. Events of Default...................................................................................77
10.2. Agent to Act........................................................................................80
10.3. Cumulative Rights...................................................................................80
10.4. No Waiver...........................................................................................80
10.5. Allocation of Proceeds..............................................................................80
ARTICLE XI
Guaranty
11.1. Parent Guaranty.....................................................................................82
11.2. Guaranty Absolute...................................................................................82
11.3. Reinstatement, etc..................................................................................83
11.4. Waiver..............................................................................................83
11.5. Waiver of Subrogation Rights........................................................................83
11.6. Subsidiary Guaranty.................................................................................84
ARTICLE XII
The Agent
12.1. Appointment, Powers, and Immunities.................................................................85
12.2. Reliance by Agent...................................................................................85
12.3. Defaults............................................................................................86
12.4. Rights as Lender....................................................................................86
12.5. Indemnification.....................................................................................86
12.6. Non-Reliance on Agent and Other Lenders.............................................................87
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12.7. Resignation of Agent................................................................................87
12.8. Fees................................................................................................87
12.9. Sole Lender.........................................................................................87
ARTICLE XIII
Miscellaneous
13.1. Assignments and Participations......................................................................88
13.2. Notices.............................................................................................89
13.3. Right of Set-off; Adjustments.......................................................................91
13.4. Survival............................................................................................91
13.5. Expenses............................................................................................92
13.6. Amendments and Waivers..............................................................................92
13.7. Counterparts........................................................................................92
13.8. Termination.........................................................................................92
13.9. Indemnification; Limitation of Liability............................................................93
13.10. Severability........................................................................................94
13.11. Entire Agreement....................................................................................94
13.12. Agreement Controls..................................................................................94
13.13. Usury Savings Clause................................................................................94
13.14. Payments............................................................................................95
13.15. GOVERNING LAW; WAIVER OF JURY TRIAL.................................................................95
EXHIBIT A Applicable Commitment Percentages....................................................A-1
EXHIBIT B Form of Assignment and Acceptance....................................................B-1
EXHIBIT C Notice of Appointment (or Revocation) of Authorized
Representative.......................................................................C-1
EXHIBIT D-1 Form of Borrowing Notice...........................................................D-1-1
[EXHIBIT D-2 Form of Borrowing Notice--Swing Line Loans.........................................D-2-1
EXHIBIT E Form of Interest Rate Selection Notice...............................................E-1
EXHIBIT F-1 Form of Revolving Note.............................................................F-1-1
EXHIBIT F-2 Form of Swing Line Note............................................................F-2-1
EXHIBIT G Form of Opinion of Borrower's Counsel................................................G-1
EXHIBIT H Compliance Certificate...............................................................H-1
EXHIBIT I Form of Facility Guaranty............................................................I-1
EXHIBIT J Form of Security Agreement...........................................................J-1
EXHIBIT K Form of Pledge Agreement.............................................................K-1
Schedule 1.1 Existing Letters of Credit...........................................................S-1
Schedule 4.3 Information Regarding Collateral.....................................................S-2
Schedule 7.4 Subsidiaries and Investments in Other Persons........................................S-3
Schedule 7.6(b) Indebtedness.........................................................................S-4
Schedule 7.7 Liens................................................................................S-5
Schedule 7.8 Tax Matters..........................................................................S-6
Schedule 7.10 Litigation...........................................................................S-7
Schedule 7.18 Environmental........................................................................S-8
Schedule 8.5 Insurance............................................................................S-9
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AMENDED AND RESTATED
CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of June 4, 1999
(the "Agreement"), is made by and among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, INC. (formerly known as
FloraFax International, Inc.), a Delaware corporation having its principal place
of business in Fort Lauderdale, Florida (the "Parent"), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ RETAIL,
INC. (formerly known as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Inc.), a Delaware corporation having its
principal place of business in Fort Lauderdale, Florida (the "Borrower"),
NATIONSBANK, NATIONAL ASSOCIATION, a national banking association organized and
existing under the laws of the United States, in its capacity as a Lender
("NationsBank"), and each other financial institution executing and delivering a
signature page hereto and each other financial institution which may hereafter
execute and deliver an instrument of assignment with respect to this Agreement
pursuant to Section 13.1 (hereinafter such financial institutions may be
referred to individually as a "Lender" or collectively as the "Lenders"), and
NATIONSBANK, NATIONAL ASSOCIATION, a national banking association organized and
existing under the laws of the United States, in its capacity as agent for the
Lenders (in such capacity, and together with any successor agent appointed in
accordance with the terms of Section 12.7, the "Agent");
W I T N E S S E T H:
WHEREAS, the Borrower is presently a party to a Credit Agreement dated
September 30, 1998, as amended by Amendment Agreement No. 1 (the "Existing
Agreement") with NationsBank as Agent and sole lender (the "Existing Lender")
pursuant to which the Existing Lender has made available to the Borrower a
revolving credit facility of up to $40,000,000, including a sublimit of
$3,000,000 for the issuance of standby letters of credit; and
WHEREAS, the Parent has agreed to acquire all of the issued and
outstanding capital stock of the Borrower and the Borrower and the Parent have
requested that the Agent and Existing Lender (i) consent to the acquisition by
the Parent of all the capital stock of the Borrower and (ii) amend and restate
the Existing Agreement in its entirety upon the terms and conditions set forth
herein which terms include increasing the letter of credit facility and
including a swing line facility; and
WHEREAS, in connection with the acquisition by the Parent of all of the
outstanding capital stock of the Borrower, the Parent has changed its name to
"▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Inc." and the Borrower has changed its name to "▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Retail, Inc."; and
WHEREAS, as a condition to amending and restating the Existing
Agreement the Parent has agreed to join in this Agreement and to guarantee
payment of the Obligations, all as provided herein;
NOW, THEREFORE, the Borrower, the Parent, the Lenders and the Agent
hereby agree as follows:
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ARTICLE I
Definitions and Terms
1.1. Amendment and Restatement. The Borrower, the Parent, the Agent and
the Lenders hereby agree that upon the effectiveness of this Agreement, the
terms and provisions of the Existing Agreement shall be and hereby are amended
and restated in their entirety by the terms and conditions of this Agreement and
the terms and provisions of the Existing Agreement, except as otherwise provided
herein, shall be superseded by this Agreement. By their execution of this
Agreement, the Agent and the Lenders consent to the Merger Transaction.
Notwithstanding the amendment and restatement of the Existing Agreement
by this Agreement, the Borrower shall continue to be liable to the Agent and the
Existing Lender with respect to (and to the extent of) agreements on the part of
the Borrower under the Existing Agreement to indemnify and hold harmless the
Agent and the Existing Lender from and against all claims, demands, liabilities,
damages, losses, costs, charges and expenses to which the Agent and the Existing
Lender may be subject arising in connection with the Existing Agreement. This
Agreement is given as a substitution of, and not as a payment of, the
obligations of Borrower under the Existing Agreement and is not intended to
constitute a novation of the Existing Agreement. Except as otherwise selected by
the Borrower by delivery of a Borrowing Notice or Interest Rate Selection Notice
prior to the Closing Date in accordance with the terms hereof, upon the
effectiveness of this Agreement all amounts outstanding and owing by Borrower
under the Existing Agreement as of the Closing Date, as determined by the
Lenders, shall constitute Advances hereunder accruing interest with respect to
the Base Rate Loans under the Existing Agreement, at the Base Rate hereunder.
The Borrower shall furnish to the Agent Interest Rate Selection Notices for
existing Loans and Borrowing Notices for additional Loans as may be required in
connection with the allocation of Loans among Lenders in accordance with their
Applicable Commitment Percentages. Except as otherwise provided for by the
Borrower by delivery to NationsBank of an Application and Agreement for Letters
of Credit prior to the Closing Date in accordance with the terms hereof, upon
the effectiveness of this Agreement, all Letters of Credit issued for the
account of the Borrower under the Existing Agreement as of the Closing Date
shall constitute Letters of Credit hereunder.
1.2. Definitions. For the purposes of this Agreement, in addition to
the definitions set forth above, the following terms shall have the respective
meanings set forth below:
"Acquisition" means the acquisition of (i) a controlling
equity interest in another Person (including the purchase of an option,
warrant or convertible or similar type security to acquire such a
controlling interest at the time it becomes exercisable by the holder
thereof), whether by purchase of such equity interest or upon exercise
of an option or warrant for, or conversion of securities into, such
equity interest, or (ii) assets of another Person which constitute all
or any material part of the assets of such Person or of a line or lines
of business conducted by such Person.
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"Advance" means a borrowing under the Revolving Credit
Facility consisting of a Base Rate Loan or a Eurodollar Rate Loan.
"Affiliate" means any Person (i) which directly or indirectly
through one or more intermediaries controls, or is controlled by, or is
under common control with the Borrower; or (ii) which beneficially owns
or holds 10% or more of any class of the outstanding voting stock (or
in the case of a Person which is not a corporation, 10% or more of the
equity interest) of the Borrower; or 10% or more of any class of the
outstanding voting stock (or in the case of a Person which is not a
corporation, 10% or more of the equity interest) of which is
beneficially owned or held by the Borrower; provided, however, at the
time the Borrower registers any security issued by it pursuant to the
Securities Act of 1933, as amended, the figure "10%" used in this
definition shall automatically change to "5%" without further action.
The term "control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies
of a Person, whether through ownership of voting stock, by contract or
otherwise.
"Applicable Commitment Percentage" means, with respect to each
Lender at any time, a fraction, the numerator of which shall be such
Lender's Revolving Credit Commitment and the denominator of which shall
be the Total Revolving Credit Commitment, which Applicable Commitment
Percentage for each Lender as of the Closing Date is as set forth in
Exhibit A; provided that the Applicable Commitment Percentage of each
Lender shall be increased or decreased to reflect any assignments to or
by such Lender effected in accordance with Section 13.1.
"Applicable Lending Office" means, for each Lender and for
each Type of Loan, the "Lending Office" of such Lender (or of an
affiliate of such Lender) designated for such Type of Loan on the
signature pages hereof or such other office of such Lender (or an
affiliate of such Lender) as such Lender may from time to time specify
to the Agent and the Borrower by written notice in accordance with the
terms hereof as the office by which its Loans of such Type are to be
made and maintained.
"Applicable Margin" for Eurodollar Rate Loans and Base Rate
Loans means that percent per annum set forth below, which shall be
based upon the Consolidated Leverage Ratio for the Four-Quarter Period
most recently ended as specified below:
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Applicable Margin
--------------------------
Eurodollar Base
Consolidated Leverage Ratio Rate Loans Rate Loans
--------------------------- ---------- ----------
(a) Equal to or Less than 1.00
to 1.00 1 1/4% 0%
(b) Greater than 1.00 to 1.00 and
Equal to or Less than 1.50
to 1.00 1 1/2% 0%
(c) Greater than 1.50 to 1.00 and
Equal to or Less than 2.00
to 1.00 1 3/4% 1/4%
(d) Greater than 2.00 to 1.00 and
Equal to or Less than 2.50
to 1.00 2% 1/2%
(e) Greater than 2.50 to 1.00 2 1/2% 1%
The Applicable Margin shall be established at the end of each fiscal
quarter of the Borrower (each, a "Determination Date"). Any change in
the Applicable Margin following each Determination Date shall be
determined based upon the computations set forth in the certificate
furnished to the Agent pursuant to Section 8.1(a)(ii) and Section
8.1(b)(ii), subject to review and approval of such computations by the
Agent, and shall be effective commencing on the fifth Business Day
following the date such certificate is received until the fifth
Business Day following the date on which a new certificate is delivered
or is required to be delivered, whichever shall first occur; provided
however, if the Borrower shall fail to deliver any such certificate
within the time period required by Section 8.1, then the Applicable
Margin shall be 2 1/2% for Eurodollar Rate Loans until the appropriate
certificate is so delivered. From the Closing Date until Consolidated
EBITDA shall equal or exceed $25,000,000 the Applicable Margin shall
not be less than 1 3/4% for Eurodollar Rate Loans and 1/4% for Base
Rate Loans.
"Applicable Unused Fee" means that percent per annum set forth
below, which shall be based upon the Consolidated Leverage Ratio for
the Four-Quarter Period most recently ended as specified below:
Applicable
Consolidated Leverage Ratio Unused Fee
--------------------------- ----------
(a) Equal to or Less than 1.00
to 1.00 3/8%
(b) Greater than 1.00 to 1.00 and
Equal to or Less than 1.50
to 1.00 3/8%
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(c) Greater than 1.50 to 1.00 and
Equal to or Less than 2.00
to 1.00 3/8%
(d) Greater than 2.00 to 1.00 and
Equal to or Less than 2.50
to 1.00 1/2%
(e) Greater than 2.50 to 1.00 1/2%
The Applicable Unused Fee shall be established at the end of each
fiscal quarter of the Borrower (the "Determination Date"). Any change
in the Applicable Unused Fee following each Determination Date shall be
determined based upon the computations set forth in the certificate
furnished to the Agent pursuant to Section 8.1(a)(ii) and Section
8.1(b)(ii), subject to review and approval of such computations by the
Agent and shall be effective commencing on the fifth Business Day
following the date such certificate is received until the fifth
Business Day following the date on which a new certificate is delivered
or is required to be delivered, whichever shall first occur; provided
however, if the Borrower shall fail to deliver any such certificate
within the time period required by Section 8.1, then the Applicable
Unused Fee shall be 1/2% until the appropriate certificate is so
delivered. From the Closing Date until the fifth Business Day following
receipt of a certificate required pursuant to Section 8.1 for the first
Determination Date following the Closing Date, the Applicable Unused
Fee shall be 3/8%.
"Applications and Agreements for Letters of Credit" means,
collectively, the Applications and Agreements for Letters of Credit, or
similar documentation, executed by the Borrower from time to time and
delivered to the Issuing Bank to support the issuance of Letters of
Credit.
"Assignment and Acceptance" shall mean an Assignment and
Acceptance in the form of Exhibit B (with blanks appropriately filled
in) delivered to the Agent in connection with an assignment of a
Lender's interest under this Agreement pursuant to Section 13.1.
"Authorized Representative" means any of the President, any
Senior Vice President, any Vice President, the Chief Financial Officer
or Controller of the Borrower or, with respect to financial matters,
the chief financial officer of the Parent, or any other Person
expressly designated by the Board of Directors of the Borrower or the
Parent, as the case may be, (or the appropriate committee thereof) as
an Authorized Representative of the Borrower or the Parent, as the case
may be, as set forth from time to time in a certificate in the form of
Exhibit C.
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"Base Rate" means, for any day, the rate per annum equal to
the sum of (a) the higher of (i) the Federal Funds Rate for such day
plus one-half of one percent (0.5%) and (ii) the Prime Rate for such
day plus (b) the Applicable Margin for Base Rate Loans. Any change in
the Base Rate due to a change in the Prime Rate or the Federal Funds
Rate shall be effective on the effective date of such change in the
Prime Rate or Federal Funds Rate.
"Base Rate Loan" means a Loan for which the rate of interest
is determined by reference to the Base Rate.
"Base Rate Refunding Loan" means a Base Rate Loan or Swing
Line Loan to satisfy (i) Reimbursement Obligations arising from a
drawing under a Letter of Credit or (ii) pay NationsBank in respect of
Swing Line Outstandings.
"Board" means the Board of Governors of the Federal Reserve
System (or any successor body).
"Borrower's Account" means a demand deposit account number
3751069957 or any successor account with the Agent, which may be
maintained at one or more offices of the Agent or an agent of the
Agent.
"Borrowing Notice" means the notice delivered by an Authorized
Representative in connection with an Advance under the Revolving Credit
Facility or a Swing Line Loan, in the forms of Exhibits D-1 and D-2,
respectively.
"Business Day" means, (i) with respect to any Base Rate Loan,
any day which is not a Saturday, Sunday or a day on which banks in the
States of New York and North Carolina are authorized or obligated by
law, executive order or governmental decree to be closed and, (ii) with
respect to any Eurodollar Rate Loan, any day which is a Business Day,
as described above, and on which the relevant international financial
markets are open for the transaction of business contemplated by this
Agreement in London, England, New York, New York and Charlotte, North
Carolina.
"Capital Expenditures" means, with respect to the Parent and
its Subsidiaries, for any period the sum of (without duplication) (i)
all expenditures (whether paid in cash or accrued as liabilities) by
the Parent or any Subsidiary during such period for items that would be
classified as "property, plant or equipment" or comparable items on the
consolidated balance sheet of the Parent and its Subsidiaries,
including without limitation all transactional costs incurred in
connection with such expenditures provided the same have been
capitalized, excluding, however, the amount of any Capital Expenditures
paid for with proceeds of casualty insurance as evidenced in writing
and submitted to the Agent together with any compliance certificate
delivered pursuant to Section 8.1(a) or (b), and (ii) with respect to
any Capital Lease entered into by the Parent or its Subsidiaries during
such period, the present value of the lease payments due under such
Capital Lease over the term of such Capital Lease applying a discount
rate equal to the interest rate provided in such lease (or in the
absence of a stated
12
interest rate, that rate used in the preparation of the financial
statements described in Section 8.1(a) or (b)), all the foregoing in
accordance with GAAP applied on a Consistent Basis.
"Capital Leases" means all leases which have been or should be
capitalized in accordance with GAAP as in effect from time to time
including Statement No. 13 of the Financial Accounting Standards Board
and any successor thereof.
"Change of Control" means, at any time:
(i) any "person" or "group" (each as used in Sections
13(d)(3) and 14(d)(2) of the Exchange Act) other than SB
Management Corp., a Delaware limited partnership d/b/a New
River or any of its affiliates either (A) becomes the
"beneficial owner" (as defined in Rule 13d-3 of the Exchange
Act ), directly or indirectly, of Voting Stock of the Parent
(or securities convertible into or exchangeable for such
Voting Stock) representing 33-1/3% or more of the combined
voting power of all Voting Stock of the Parent (on a fully
diluted basis) or (B) otherwise has the ability, directly or
indirectly, to elect a majority of the board of directors of
the Parent;
(ii) during any period of up to 24 consecutive
months, commencing on the Closing Date, individuals who at the
beginning of such 24-month period were directors of the Parent
shall cease for any reason (other than the death, disability
or retirement of an officer of the Parent that is serving as a
director at such time so long as another officer of the Parent
replaces such Person as a director) to constitute a majority
of the board of directors of the Parent; or
(iii) except as provided in the Shareholder
Agreement, any Person or two or more Persons acting in concert
shall have acquired by contract or otherwise, or shall have
entered into a contract or arrangement that, upon consummation
thereof, will result in its or their acquisition of the power
to exercise, directly or indirectly, a controlling influence
on the management or policies of the Parent.
"Closing Date" means the date as of which this Agreement is
executed by the Borrower, the Parent, the Lenders and the Agent and on
which the conditions set forth in Section 6.1 have been satisfied.
"Code" means the Internal Revenue Code of 1986, as amended,
and any regulations promulgated thereunder.
"Collateral" means, collectively, all property of the
Borrower, the Parent, any Subsidiary or any other Person in which the
Agent or any Lender is granted a Lien as security for all or any
portion of the Obligations under any Security Instrument.
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"Consistent Basis" in reference to the application of GAAP
means the accounting principles observed in the period referred to are
comparable in all material respects to those applied in the preparation
of the audited financial statements of the Parent referred to in
Section 7.6(a).
"Consolidated EBIT" means, with respect to the Parent and its
Subsidiaries for any Four-Quarter Period ending on the date of
computation thereof, the sum of, without duplication, (i) Consolidated
Net Income, (ii) Consolidated Interest Expense and (iii) taxes on
income, all determined on a consolidated basis in accordance with GAAP
applied on a Consistent Basis; provided, however, that with respect to
an Acquisition that is accounted for as a "purchase", for the
Four-Quarter Periods ending next following the date of such
Acquisition, Consolidated EBIT shall include the results of operations
of the Person or assets so acquired, which amounts shall be determined
on a historical pro forma basis as if such Acquisition had been
consummated as a "pooling of interests", inclusive of reasonable
normalizing adjustments; provided, further, that there shall be added
back to Consolidated Net Income for the four Four-Quarter Periods
ending after May 31, 1999 (i) merger costs incurred in connection with
FloraFax Transaction in an amount of up to $4,500,000, (ii) the
non-cash compensation charges relating to certain stock option grants
in connection with the FloraFax Transaction not to exceed $1,400,000
and (iii) non-recurring charges associated with the assessment of
whether the Parent and its Subsidiaries are Year 2000 Compliant.
"Consolidated EBITDA" means, with respect to the Parent and
its Subsidiaries for any Four-Quarter Period ending on the date of
computation thereof, the sum of, without duplication, (i) Consolidated
EBIT, (ii) amortization and (iii) depreciation, all determined on a
consolidated basis in accordance with GAAP applied on a Consistent
Basis; provided, however, that with respect to an Acquisition that is
accounted for as a "purchase", for the Four-Quarter Periods ending next
following the date of such Acquisition, Consolidated EBITDA shall
include the results of operations of the Person or assets so acquired,
which amounts shall be determined on a historical pro forma basis as if
such Acquisition had been consummated as a "pooling of interests",
inclusive of reasonable normalizing adjustments; provided, further,
that there shall be added back to Consolidated Net Income for the four
Four-Quarter Periods ending after May 31, 1999 (i) merger costs
incurred in connection with FloraFax Transaction in an amount of up to
$4,500,000, (ii) the non-cash compensation charges relating to certain
stock option grants in connection with the FloraFax Transaction not to
exceed $1,400,000 and (iii) non-recurring charges associated with the
assessment of whether the Parent and its Subsidiaries are Year 2000
Compliant.
"Consolidated Fixed Charge Ratio" means, with respect to the
Parent and its Subsidiaries for any Four-Quarter Period ending on the
date of computation thereof, the ratio of (i) Consolidated EBIT for
such period plus Consolidated Proforma Lease Payments, to (ii)
Consolidated Fixed Charges for such period.
"Consolidated Fixed Charges" means, with respect to Parent and
its Subsidiaries
14
for any Four-Quarter Period ending on the date of computation thereof,
the sum of, without duplication, (i) Consolidated Interest Expense,
adjusted to give effect on an historical basis for Indebtedness
incurred to make any Acquisition, (ii) current maturities of
Consolidated Indebtedness other than Indebtedness arising under this
Agreement, (iii) cash income taxes accrued during such period, and (iv)
Consolidated Proforma Lease Payments, all determined on a consolidated
basis in accordance with GAAP applied on a Consistent Basis; provided,
however, that with respect to an Acquisition that is accounted for as a
"purchase", for the Four-Quarter Periods ending next following the date
of such Acquisition, Consolidated Fixed Charges shall include the
results of operations of the Person or assets so acquired, which
amounts shall be determined on a historical pro forma basis as if such
Acquisition had been consummated as a "pooling of interests", inclusive
of reasonable normalizing adjustments.
"Consolidated Indebtedness" means all Indebtedness of the
Parent and its Subsidiaries, all determined on a consolidated basis.
"Consolidated Interest Expense" means, with respect to any
period of computation thereof, the gross interest expense of the Parent
and its Subsidiaries, including without limitation (i) the current
amortized portion of debt discounts to the extent included in gross
interest expense, (ii) the current amortized portion of all fees
(including fees payable in respect of any Swap Agreement) payable in
connection with the incurrence of Indebtedness to the extent included
in gross interest expense and (iii) the portion of any payments made in
connection with Capital Leases allocable to interest expense, all
determined on a consolidated basis in accordance with GAAP applied on a
Consistent Basis.
"Consolidated Lease Payments" means the gross amount of all
lease or rental payments, whether or not characterized as rent, of the
Parent and its Subsidiaries, excluding payments in respect of Capital
Leases constituting Indebtedness, all determined on a consolidated
basis in accordance with GAAP applied on a Consistent Basis.
"Consolidated Leverage Ratio" means, as of the date of
computation thereof, the ratio of (i) the sum of (without duplication)
Consolidated Indebtedness (determined as at such date) to (ii)
Consolidated EBITDA (for the Four-Quarter Period ending on (or most
recently ended prior to) such date).
"Consolidated Net Income" means, for any period of computation
thereof, the gross revenues from operations of the Parent and its
Subsidiaries (including payments received by the Parent and its
Subsidiaries of (i) interest income, and (ii) dividends and
distributions made in the ordinary course of their businesses by
Persons in which investment is permitted pursuant to this Agreement and
not related to an extraordinary event), less all operating and
non-operating expenses of the Parent and its Subsidiaries including
taxes on income, all determined on a consolidated basis in accordance
with
15
GAAP applied on a Consistent Basis; but excluding (for all purposes
other than (x) compliance with Section 9.1(a) hereof) as income: (i)
net gains on the sale, conversion or other disposition of capital
assets, (ii) net gains on the acquisition, retirement, sale or other
disposition of capital stock and other securities of the Parent or its
Subsidiaries, (iii) net gains on the collection of proceeds of life
insurance policies, (iv) any write-up of any asset, and (y) any other
net gain or credit of an extraordinary nature as determined in
accordance with GAAP applied on a Consistent Basis.
"Consolidated Net Worth" means, as of any date on which the
amount thereof is to be determined, Consolidated Shareholders' Equity
minus (without duplication of deductions in respect of items already
deducted in arriving at surplus and retained earnings) all reserves
(other than contingency reserves not allocated to any particular
purpose), including without limitation reserves for depreciation,
depletion, amortization, obsolescence, deferred income taxes, insurance
and inventory valuation all as determined on a consolidated basis in
accordance with GAAP applied on a Consistent Basis.
"Consolidated Pro Forma Lease Payments" means the amount of
Consolidated Lease Payments for the quarterly period most recently
ended, multiplied by four.
"Consolidated Shareholders' Equity" means, as of any date on
which the amount thereof is to be determined, the sum of the following
in respect of the Parent and its Subsidiaries (determined on a
consolidated basis and excluding any upward adjustment after the
Closing Date due to revaluation of assets): (i) the amount of issued
and outstanding share capital, plus (ii) the amount of additional
paid-in capital and retained earnings (or, in the case of a deficit,
minus the amount of such deficit), plus (iii) the amount of any foreign
currency translation adjustment (if positive, or, if negative, minus
the amount of such translation adjustment), minus (iv) the amount of
any treasury stock, all as determined in accordance with GAAP applied
on a Consistent Basis.
"Consolidated Total Assets" means, as of any date on which the
amount thereof is to be determined, the net book value of all assets of
the Parent and its Subsidiaries as determined on a consolidated basis
in accordance with GAAP applied on a Consistent Basis.
"Consolidated Total Capitalization" means, as of any date on
which the amount thereof is to be determined, the sum of Consolidated
Indebtedness plus Consolidated Shareholders' Equity.
"Contingent Obligation" means, as to any Person, any direct or
indirect liability of that Person with respect to any Indebtedness,
lease, dividend, guaranty, letter of credit or other obligation (each a
"primary obligation") of another Person (the "primary obligor"),
whether or not contingent, (a) to purchase, repurchase or otherwise
acquire any such primary obligation or any property constituting direct
or indirect security therefor, or (b) to advance or provide funds (i)
for the payment or discharge of any
16
such primary obligation, or (ii) to maintain working capital or equity
capital of the primary obligor in respect of any such primary
obligation or otherwise to maintain the net worth or solvency or any
balance sheet item, level of income or financial condition of such
primary obligor, or (c) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor thereof to make
payment of such primary obligation, or (d) otherwise to assure or hold
harmless the owner of any such primary obligation against loss or
failure or inability to perform in respect thereof. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of
which such Contingent Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect
thereof.
"Continue", "Continuation", and "Continued" shall refer to the
continuation pursuant to Section 2.8 hereof of a Eurodollar Rate Loan
of one Type as a Eurodollar Rate Loan of the same Type from one
Interest Period to the next Interest Period.
"Convert", "Conversion", and "Converted" shall refer to a
conversion pursuant to Sections 2.8 or Article III of one Type of Loan
into another Type of Loan.
"Cost of Acquisition" means, with respect to any Acquisition,
as at the date of entering into any agreement therefor, the sum of the
following (without duplication): (i) the value of the capital stock,
warrants or options to acquire capital stock of the Parent or any
Subsidiary to be transferred in connection therewith, (ii) the amount
of any cash and fair market value of other property (excluding property
described in clause (i) and the unpaid principal amount of any debt
instrument) given as consideration, (iii) the amount (determined by
using the face amount or the amount payable at maturity, whichever is
greater) of any Indebtedness incurred, assumed or acquired by the
Parent or any Subsidiary in connection with such Acquisition, (iv) all
additional purchase price amounts in the form of earnouts and other
contingent obligations that should be recorded as a liability on the
financial statements of the Parent and its Subsidiaries in accordance
with GAAP, (v) all amounts paid in respect of covenants not to compete
or consulting agreements that should be recorded as a liability on
financial statements of the Parent and its Subsidiaries in accordance
with GAAP, and other affiliated contracts in connection with such
Acquisition, (vi) the aggregate fair market value of all other
consideration given by the Parent or any Subsidiary in connection with
such Acquisition, and (vii) out of pocket transaction costs for the
services and expenses of attorneys, accountants and other consultants
incurred in effecting such transaction, and other similar transaction
costs so incurred. For purposes of determining the Cost of Acquisition
for any transaction, if the contract or agreement specifies the
aggregate Cost of Acquisition in Dollars and provides that a specific
percentage or Dollar amount of the Cost of Acquisition shall be paid in
common stock, then the terms of the contract or agreement shall control
for purposes of Section 9.2(iv), otherwise, (A) the capital stock of
the Parent shall be valued (I) in the case of capital stock that is
then designated as a national market system security by the
17
National Association of Securities Dealers, Inc. ("NASDAQ") or is
listed on a national securities exchange, the average of the last
reported bid and ask quotations or the last prices reported thereon,
and (II) with respect to shares that are not freely tradeable, as
determined by a committee composed of the disinterested members of the
Board of Directors of the Parent and, if requested by the Agent,
determined to be a reasonable valuation by the independent public
accountants referred to in Section 8.1(a), (B) the capital stock of any
Subsidiary shall be valued as determined by a committee composed of the
disinterested members of the Board of Directors of such Subsidiary and,
if requested by the Agent, determined to be a reasonable valuation by
the independent public accountants referred to in Section 8.1(a),
and (C) with respect to any Acquisition accomplished pursuant to the
exercise of options or warrants or the conversion of securities, the
Cost of Acquisition shall include both the cost of acquiring such
option, warrant or convertible security as well as the cost of exercise
or conversion.
"Credit Party" means, collectively, the Borrower, the Parent,
each Guarantor and each other Person providing Collateral pursuant to
any Security Instrument.
"Default" means any event or condition which, with the giving
or receipt of notice or lapse of time or both, would constitute an
Event of Default hereunder.
"Default Rate" means (i) with respect to each Eurodollar Rate
Loan, until the end of the Interest Period applicable thereto, a rate
of two percent (2%) above the Eurodollar Rate applicable to such Loan,
and thereafter at a rate of interest per annum which shall be two
percent (2%) above the Base Rate, (ii) with respect to Base Rate Loans,
Swing Line Loans, and Reimbursement Obligations, at a rate of interest
per annum which shall be two percent (2%) above the Base Rate and (iii)
in any case, the maximum rate permitted by applicable law, if lower.
"Dollars" and the symbol "$" means dollars constituting legal
tender for the payment of public and private debts in the United States
of America.
"Eligible Assignee" means (i) a Lender, (ii) an affiliate of a
Lender, and (iii) any other Person approved by the Agent and, unless an
Event of Default has occurred and is continuing at the time any
assignment is effected in accordance with Section 13.1, the Borrower,
such approval not to be unreasonably withheld or delayed by the
Borrower or the Agent and such approval to be deemed given by the
Borrower within two Business Days after notice of such proposed
assignment has been provided by the assigning Lender to the Borrower it
being agreed, however, that the Borrower may withhold its approval if
as a result of such assignment the Borrower incurs increased cost under
Section 5.5; provided, however, that neither the Borrower nor an
affiliate of the Borrower shall qualify as an Eligible Assignee.
"Eligible Securities" means the following obligations and any
other obligations previously approved in writing by the Agent:
18
(a) Government Securities;
(b) obligations of any corporation organized under
the laws of any state of the United States of America or under
the laws of any other nation, payable in the United States of
America, expressed to mature not later than 92 days following
the date of issuance thereof and rated in an investment grade
rating category by S&P and ▇▇▇▇▇'▇;
(c) interest bearing demand or time deposits issued
by any Lender or certificates of deposit maturing within one
year from the date of issuance thereof and issued by a bank or
trust company organized under the laws of the United States or
of any state thereof having capital surplus and undivided
profits aggregating at least $400,000,000 and being rated "A-"
or better by S&P or "A" or better by ▇▇▇▇▇'▇;
(d) Repurchase Agreements;
(e) Municipal Obligations;
(f) Pre-Refunded Municipal Obligations;
(g) shares of mutual funds which invest in
obligations described in paragraphs (a) through (f) above, the
shares of which mutual funds are at all times rated "AAA" by
S&P;
(h) tax-exempt or taxable adjustable rate preferred
stock issued by a Person having a rating of its long term
unsecured debt of "A" or better by S&P or "A-3" or better by
▇▇▇▇▇'▇; and
(i) asset-backed remarketed certificates of
participation representing a fractional undivided interest in
the assets of a trust, which certificates are rated at least
"A-1" by S&P and "P-1" by ▇▇▇▇▇'▇.
"Employee Benefit Plan" means any employee benefit plan within
the meaning of Section 3(3) of ERISA which (i) is maintained for
employees of the Parent or any of its ERISA Affiliates or is assumed by
the Parent or any of its ERISA Affiliates in connection with any
Acquisition or (ii) has at any time been maintained for the employees
of the Parent or any current or former ERISA Affiliate.
"Environmental Laws" means any federal, state or local
statute, law, ordinance, code, rule, regulation, order, decree, permit
or license regulating, relating to, or imposing liability or standards
of conduct concerning, any environmental matters or conditions,
environmental protection or conservation, including without limitation,
the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended; the Superfund Amendments and Reauthorization
Act of 1986, as amended;
19
the Resource Conservation and Recovery Act, as amended; the Toxic
Substances Control Act, as amended; the Clean Air Act, as amended; the
Clean Water Act, as amended; together with all regulations promulgated
thereunder, and any other "Superfund" or "Superlien" law.
"Equity Event" means the receipt by the Parent of not less
than $50,000,000 of net proceeds from the sale of shares of its capital
stock.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute and all
rules and regulations promulgated thereunder.
"ERISA Affiliate", as applied to the Parent, means any Person
or trade or business which is a member of a group which is under common
control with the Parent, who together with the Parent, is treated as a
single employer within the meaning of Section 414(b) and (c) of the
Code.
"Eurodollar Rate Loan" means a Loan for which the rate of
interest is determined by reference to the Eurodollar Rate.
"Eurodollar Rate" means the interest rate per annum calculated
according to the following formula:
Eurodollar = Interbank Offered Rate + Applicable
------------------------------
Rate 1- Reserve Requirement Margin
"Event of Default" means any of the occurrences set forth as
such in Section 10.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the regulations promulgated thereunder.
"Existing Letters of Credit" means those Letters of Credit
issued by NationsBank described on Schedule 1.1 hereto.
"Facility Guaranty" means each Guaranty and Suretyship
Agreement between one or more Guarantors and the Agent for the benefit
of the Lenders, delivered in connection with the Existing Agreement or
as of the Closing Date and otherwise pursuant to Section 8.20, as the
same may be amended, modified or supplemented.
"Facility Termination Date" means such date as all of the
following shall have occurred: (a) the Borrower shall have permanently
terminated the Revolving Credit Facility and the Swing Line by payment
in full of all Revolving Credit Outstandings and Letter of Credit
Outstandings and Swing Line Outstandings, together with all accrued and
unpaid interest thereon, except for such issued and undrawn Letters of
20
Credit as have been fully cash collateralized in a manner consistent
with the terms of Section 10.1(B), (b) all Swap Agreements shall have
been terminated, expired or cash collateralized, (c) all Revolving
Credit Commitments and Letter of Credit Commitments shall have
terminated or expired and (d) the Borrower shall have fully, finally
and irrevocably paid and satisfied in full all Obligations (other than
Obligations consisting of continuing indemnities and other contingent
obligations of the Borrower or any Guarantor that may be owing to the
Lenders pursuant to the Loan Documents and expressly survive
termination of this Agreement);
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to
the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published by the Federal Reserve
Bank of New York on the Business Day next succeeding such day; provided
that (a) if such day is not a Business Day, the Federal Funds Rate for
such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and
(b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate
charged to the Agent (in its individual capacity) on such day on such
transactions as determined by the Agent.
"Fiscal Year" means the twelve month fiscal period of the
Borrower and its Subsidiaries commencing on September 1 of each
calendar year and ending on August 31 of each calendar year.
"FloraFax Transaction" means the reorganization described in
the Registration Statement pursuant to which the Borrower has become a
Subsidiary of the Parent.
"Foreign Benefit Law" means any applicable statute, law,
ordinance, code, rule, regulation, order or decree of any foreign
nation or any province, state, territory, protectorate or other
political subdivision thereof regulating, relating to, or imposing
liability or standards of conduct concerning, any Employee Benefit
Plan.
"Four-Quarter Period" means a period of four full consecutive
fiscal quarters of the Parent and its Subsidiaries, taken together as
one accounting period.
"GAAP" or "Generally Accepted Accounting Principles" means
generally accepted accounting principles, being those principles of
accounting set forth in pronouncements of the Financial Accounting
Standards Board, the American Institute of Certified Public Accountants
or which have other substantial authoritative support and are
applicable in the circumstances as of the date of a report.
"Government Securities" means direct obligations of, or
obligations the timely payment of principal and interest on which are
fully and unconditionally guaranteed by, the United States of America.
21
"Governmental Authority" shall mean any Federal, state,
municipal, national or other governmental department, commission,
board, bureau, court, agency or instrumentality or political
subdivision thereof or any entity or officer exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to any government or any court, in each case whether
associated with a state of the United States, the United States, or a
foreign entity or government.
"Guaranties" means all obligations of the Parent or any
Subsidiary directly or indirectly guaranteeing, or in effect
guaranteeing, any Indebtedness or other obligation of any other Person.
"Guarantors" means, at any date, the Subsidiaries who are
required to be parties to a Facility Guaranty at such date.
"Hazardous Material" means and includes any pollutant,
contaminant, or hazardous, toxic or dangerous waste, substance or
material (including without limitation petroleum products,
asbestos-containing materials and lead), the generation, handling,
storage, transportation, disposal, treatment, release, discharge or
emission of which is subject to any Environmental Law.
"Indebtedness" means as to any Person, without duplication,
(a) all Indebtedness for Money Borrowed of such Person, (b) all Rate
Hedging Obligations of such Person, (c) all indebtedness secured by any
Lien on any property or asset owned or held by such Person regardless
or whether the indebtedness secured thereby shall have been assumed by
such Person or is non-recourse to the credit of such Person, and (d)
all Contingent Obligations of such Person.
"Indebtedness for Money Borrowed" means with respect to any
Person, without duplication, all indebtedness in respect of money
borrowed, including without limitation, all obligations under Capital
Leases, the deferred purchase price of any property or services, and
payment and reimbursement obligations in respect of surety bonds,
letters of credit, and bankers' acceptances, whether or not matured,
evidenced by a promissory note, bond, debenture or similar written
obligation for the payment of money (including reimbursement agreements
and conditional sales or similar title retention agreements), other
than trade payables and accrued expenses incurred in the ordinary
course of business.
"Interbank Offered Rate" means, with respect to any Eurodollar
Rate Loan for the Interest Period applicable thereto, the rate per
annum (rounded upwards, if necessary), to the nearest 1/100 of 1%)
appearing on Telerate Page 3750 (or any successor page) as the London
interbank offered rate for deposits in Dollars at approximately 11:00
A.M. (London time) two Business Days prior to the first day of such
Interest Period for a term comparable to such Interest Period. If for
any reason such rate is not available, the term "Interbank Offered
Rate" shall mean, with respect to any Eurodollar Rate Loan for the
Interest Period applicable thereto, the rate per annum
22
(rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing
on Reuters Screen LIBO Page as the London interbank offered rate for
deposits in Dollars at approximately 11:00 A.M. (London time) two
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period, provided, however; if more than one
rate is specified on Reuters Screen LIBO Page, the applicable rate
shall be the arithmetic mean of all such rates (rounded upwards, if
necessary, to the nearest 1/100 of 1%).
"Interest Period" means, for each Eurodollar Rate Loan, a
period commencing on the date such Eurodollar Rate Loan is made or
Converted and ending, at the Parent's option, on the date one, two,
three or six months thereafter as notified to the Agent by the
Authorized Representative three (3) Business Days prior to the
beginning of such Interest Period; provided, that,
(i) if the Authorized Representative fails to notify
the Agent of the length of an Interest Period three (3)
Business Days prior to the first day of such Interest Period,
the Eurodollar Rate Loan for which such Interest Period was to
be determined shall be deemed to be a Base Rate Loan as of the
first day thereof;
(ii) if an Interest Period for a Eurodollar Rate Loan
would end on a day which is not a Business Day, such Interest
Period shall be extended to the next Business Day (unless such
extension would cause the applicable Interest Period to end in
the succeeding calendar month, in which case such Interest
Period shall end on the next preceding Business Day);
(iii) any Interest Period which begins on the last
Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last
Business Day of a calendar month;
(iv) no Interest Period shall extend past the Stated
Termination Date for Loans; and
(v) there shall not be more than seven (7) Interest
Periods in effect on any day.
"Interest Rate Selection Notice" means the written notice
delivered by an Authorized Representative in connection with the
election of a subsequent Interest Period for any Eurodollar Rate Loan
or the Conversion of any Eurodollar Rate Loan into a Base Rate Loan or
the Conversion of any Base Rate Loan into a Eurodollar Rate Loan, in
the form of Exhibit E.
"Issuing Bank" means initially NationsBank and thereafter any
Lender which is
23
successor to NationsBank as issuer of Letters of Credit under Article
III.
"LC Account Agreement" means the LC Account Agreement dated
September 30, 1998 between the Borrower and the Agent, as amended,
modified or supplemented from time to time.
"Letter of Credit" means a standby letter of credit issued by
the Issuing Bank pursuant to Article III hereof for the account of the
Borrower in favor of a Person advancing credit or securing an
obligation on behalf of the Borrower, including the Existing Letters of
Credit.
"Letter of Credit Commitment" means, with respect to each
Lender, the obligation of such Lender to acquire Participations in
respect of Letters of Credit and Reimbursement Obligations up to an
aggregate amount at any one time outstanding equal to such Lender's
Applicable Commitment Percentage of the Total Letter of Credit
Commitment as the same may be increased or decreased from time to time
pursuant to this Agreement.
"Letter of Credit Facility" means the facility described in
Article III hereof providing for the issuance by the Issuing Bank for
the account of the Borrower of Letters of Credit in an aggregate stated
amount at any time outstanding not exceeding the Total Letter of Credit
Commitment.
"Letter of Credit Outstandings" means, as of any date of
determination, the aggregate amount available to be drawn under all
Letters of Credit plus Reimbursement Obligations then outstanding.
"Lien" means any interest in property securing any obligation
owed to, or a claim by, a Person other than the owner of the property,
whether such interest is based on the common law, statute or contract,
and including but not limited to the lien or security interest arising
from a mortgage, encumbrance, pledge, security agreement, conditional
sale or trust receipt or a lease, consignment or bailment for security
purposes. For the purposes of this Agreement, the Parent and any
Subsidiary shall be deemed to be the owner of any property which it has
acquired or holds subject to a conditional sale agreement, financing
lease, or other arrangement pursuant to which title to the property has
been retained by or vested in some other Person for security purposes.
"Loan" or "Loans" means, collectively, the Swing Line Loans
and the Revolving Loans.
"Loan Documents" means this Agreement, the Notes, the Security
Instruments, the Facility Guaranties, the LC Account Agreement, the
Applications and Agreements for Letter of Credit, and all other
instruments and documents heretofore or hereafter executed or delivered
to or in favor of any Lender or the Agent in connection with the
24
Loans made and transactions contemplated under this Agreement, as the
same may be amended, supplemented or replaced from the time to time.
"Material Adverse Effect" means a material adverse effect on
(i) the business, properties, operations or condition, financial or
otherwise, of the Parent and its Subsidiaries, taken as a whole, (ii)
the ability of any Credit Party to pay or perform its respective
obligations, liabilities and indebtedness under the Loan Documents as
such payment or performance becomes due in accordance with the terms
thereof, or (iii) the rights, powers and remedies of the Agent or any
Lender under any Loan Document or the validity, legality or
enforceability thereof.
"Merger Transaction" means the transaction whereby a
wholly-owned Subsidiary of the Parent, Red ▇▇▇▇▇▇ Acquisition Corp., is
merged with and into the Borrower and the Borrower becomes a
wholly-owned Subsidiary of the Parent.
"Merger Transaction Documents" means the Merger Agreement
among the Parent, the Borrower and Red ▇▇▇▇▇▇ Acquisition Corp. and all
other agreements, instruments and documents delivered in connection
therewith.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Mortgage" means the Mortgage dated September 30, 1998 from
▇▇▇▇▇▇ the Florist, Inc. to the Agent for the benefit of the Lenders.
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA to which the Borrower or any ERISA
Affiliate is making, or is accruing an obligation to make,
contributions or has made, or been obligated to make, contributions
within the preceding six (6) Fiscal Years.
"Municipal Obligations" means general obligations issued by,
and supported by the full taxing authority of, any state of the United
States of America or of any municipal corporation or other public body
organized under the laws of any such state which are rated in the
highest investment rating category by both S&P and Moody's.
"NationsBank" means NationsBank, National Association.
"New River" means New River Capital Partnership, a Delaware
limited partnership whose general partner is SB Management Corp., a
Delaware limited partnership.
"Notes" means, collectively, the Revolving Notes and the Swing
Line Note.
"Obligations" means the obligations, liabilities and
Indebtedness of the Borrower with respect to (i) the principal and
interest on the Loans as evidenced by the Notes, (ii)
25
the Reimbursement Obligations and otherwise in respect of the Letters
of Credit, (iii) all liabilities of Borrower to any Lender which arise
under a Swap Agreement, and (iii) the payment and performance of all
other obligations, liabilities and Indebtedness of the Borrower to the
Lenders or the Agent hereunder, under any one or more of the other Loan
Documents or with respect to the Loans.
"Operating Documents" means with respect to any corporation,
limited liability company, partnership, limited partnership, limited
liability partnership or other legally authorized incorporated or
unincorporated entity, the bylaws, operating agreement, partnership
agreement, limited partnership agreement or other applicable documents
relating to the operation, governance or management of such entity.
"Organizational Action" means with respect to any corporation,
limited liability company, partnership, limited partnership, limited
liability partnership or other legally authorized incorporated or
unincorporated entity, any corporate, organizational or partnership
action (including any required shareholder, member or partner action),
or other similar official action, as applicable, taken by such entity.
"Organizational Documents" means with respect to any
corporation, limited liability company, partnership, limited
partnership, limited liability partnership or other legally authorized
incorporated or unincorporated entity, the articles of incorporation,
certificate of incorporation, articles of organization, certificate of
limited partnership or other applicable organizational or charter
documents relating to the creation of such entity.
"Outstandings" means, collectively, at any date, the Letter of
Credit Outstandings, Swing Line Outstandings and Revolving Credit
Outstandings on such date.
"Participation" means, (i) with respect to any Lender (other
than the Issuing Bank) and a Letter of Credit, the extension of credit
represented by the participation of such Lender hereunder in the
liability of the Issuing Bank in respect of a Letter of Credit issued
by the Issuing Bank in accordance with the terms hereof and (ii) with
respect to any Lender (other than NationsBank) and a Swing Line Loan,
the extension of credit represented by the participation of such Lender
hereunder in the liability of NationsBank in respect of a Swing Line
Loan made by NationsBank in accordance with the terms hereof.
"Partnership Interests" shall have the meaning therefor
provided in the Pledge Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation and any
successor thereto.
"Pension Plan" means any employee pension benefit plan within
the meaning of
26
Section 3(2) of ERISA, other than a Multiemployer Plan, which is
subject to the provisions of Title IV of ERISA or Section 412 of the
Code and which (i) is maintained for employees of the Parent or any of
its ERISA Affiliates or is assumed by the Borrower or any of its ERISA
Affiliates in connection with any Acquisition or (ii) has at any time
been maintained for the employees of the Parent or any current or
former ERISA Affiliate.
"Person" means an individual, partnership, corporation,
limited liability company, limited liability partnership, trust,
unincorporated organization, association, joint venture or a government
or agency or political subdivision thereof.
"Pledge Agreement" means, collectively (or individually as the
context may indicate), (i) those Stock Pledge Agreements between the
Borrower and the Agent delivered in connection with the Existing
Agreement, (ii) that certain Stock Pledge Agreement dated as of the
date hereof between the Parent and the Agent for the benefit of the
Agent and the Lenders, and (iii) any additional Stock Pledge Agreement
delivered to the Agent pursuant to Section 8.20, as hereafter amended,
supplemented or replaced from time to time.
"Pledge Agreement Supplement" means, with respect to each
Pledge Agreement, the Pledge Agreement Supplement in the form affixed
as an Exhibit to such Pledge Agreement.
"Pledged Interests" means the Subsidiary Securities required
to be pledged as Collateral pursuant to Article IV or the terms of any
Pledge Agreement.
"Pledged Stock" has the meaning given to such term in the
Pledge Agreement.
"Pre-Refunded Municipal Obligations" means obligations of any
state of the United States of America or of any municipal corporation
or other public body organized under the laws of any such state which
are rated, based on the escrow, in the highest investment rating
category by both S&P and Moody's and which have been irrevocably called
for redemption and advance refunded through the deposit in escrow of
Government Securities or other debt securities which are (i) not
callable at the option of the issuer thereof prior to maturity, (ii)
irrevocably pledged solely to the payment of all principal and interest
on such obligations as the same becomes due and (iii) in a principal
amount and bear such rate or rates of interest as shall be sufficient
to pay in full all principal of, interest, and premium, if any, on such
obligations as the same becomes due as verified by a nationally
recognized firm of certified public accountants.
"Prime Rate" means the per annum rate of interest established
from time to time by NationsBank as its prime rate, which rate may not
be the lowest rate of interest charged by NationsBank to its customers.
"Principal Office" means the principal office of NationsBank,
presently located
27
at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇-▇▇-▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Agency Services, or such other office and
address as the Agent may from time to time designate.
"Rate Hedging Obligations" means any and all obligations of
the Parent or any Subsidiary, whether absolute or contingent and
howsoever and whensoever created, arising, evidenced or acquired
(including all renewals, extensions and modifications thereof and
substitutions therefor), under (i) any and all agreements, devices or
arrangements designed to protect at least one of the parties thereto
from the fluctuations of interest rates, exchange rates or forward
rates applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to, Dollar-denominated or
cross-currency interest rate exchange agreements, forward currency
exchange agreements, interest rate cap or collar protection agreements,
forward rate currency or interest rate options, puts, warrants and
those commonly known as interest rate "swap" agreements; (ii) all other
"derivative instruments" as defined in FASB 133 and which are subject
to the reporting requirements of FASB 133; and (iii) any and all
cancellations, buybacks, reversals, terminations or assignments of any
of the foregoing.
"Registrar" means, with respect to any Subsidiary Securities,
any Person authorized or obligated to maintain records of the
registration of ownership or transfer of ownership of interests in such
Subsidiary Securities, and in the event no such Person shall have been
expressly designated by the related Subsidiary, shall mean (i) as to
any corporation or limited liability company, its Secretary (or
comparable official), and (ii) as to any partnership, its general
partner (or managing general partner if one shall have been appointed).
"Registration Statement" means Registration Statement No.
333-76109 on Form 14A declared effective by the Securities and Exchange
Commission on April 12, 1999.
"Regulation D" means Regulation D of the Board as the same may
be amended or supplemented from time to time.
"Reimbursement Obligation" shall mean at any time, the
obligation of the Borrower with respect to any Letter of Credit to
reimburse the Issuing Bank and the Lenders to the extent of their
respective Participations (including by the receipt by the Issuing Bank
of proceeds of Loans pursuant to Section 2.1(c)) for amounts
theretofore paid by the Issuing Bank pursuant to a drawing under such
Letter of Credit.
"Repurchase Agreement" means a repurchase agreement entered
into with any financial institution whose debt obligations or
commercial paper are rated "A" by either of S&P or Moody's or "A-1" by
S&P or "P-1" by Moody's.
"Required Lenders" means, as of any date, Lenders on such date
having Credit Exposures (as defined below) aggregating (i) if there
shall be fewer than three (3) Lenders, 100% of the aggregate Credit
Exposures of all Lenders on such date, and (ii)
28
if there shall be three (3) or more Lenders, at least 51% of the
aggregate Credit Exposures of all the Lenders on such date. For
purposes of the preceding sentence, the amount of the "Credit Exposure"
of each Lender shall be equal at all times (a) other than following the
occurrence and during the continuance of an Event of Default, to the
sum of its Revolving Credit Commitment, and (b) following the
occurrence and during the continuance of an Event of Default, to the
sum of (i) the aggregate principal amount of such Lender's Applicable
Commitment Percentage of Revolving Credit Outstandings plus (ii) the
amount of such Lender's Applicable Commitment Percentage of Letter of
Credit Outstandings and Swing Line Outstandings; provided that, for the
purpose of this definition only, (A) if any Lender shall have failed to
fund its Applicable Commitment Percentage of any Advance,
the Revolving Credit Commitment of such Lender shall be deemed reduced
by the amount it so failed to fund for so long as such failure shall
continue and such Lender's Credit Exposure attributable to such failure
shall be deemed held by any Lender making more than its Applicable
Commitment Percentage of such Advance to the extent it covers such
failure, (B) if any Lender shall have failed to pay to the Issuing Bank
upon demand its Applicable Commitment Percentage of any drawing under
any Letter of Credit resulting in an outstanding Reimbursement
Obligation, such Lender's Credit Exposure attributable to such Letter
of Credit Outstandings shall be deemed to be held by Issuing Bank and
(C) if any Lender shall have failed to pay to NationsBank on demand its
Applicable Commitment Percentage of any Swing Line Loan (whether by
funding its Participation therein or otherwise), such Lender's Credit
Exposure attributable to all Swing Line Outstandings shall be deemed to
be held by NationsBank until such Lender shall pay such deficiency
amount to NationsBank together with interest thereon as provided in
Section 2.11.
"Reserve Requirement" means, at any time, the maximum rate at
which reserves (including, without limitation, any marginal, special,
supplemental, or emergency reserves) are required to be maintained
under regulations issued from time to time by the Board of Governors of
the Federal Reserve System (or any successor) by member banks of the
Federal Reserve System against "Eurocurrency liabilities" (as such term
is used in Regulation D). Without limiting the effect of the foregoing,
the Reserve Requirement shall reflect any other reserves required to be
maintained by such member banks with respect to (i) any category of
liabilities which includes deposits by reference to which the
Eurodollar Rate is to be determined, or (ii) any category of extensions
of credit or other assets which include Eurodollar Rate Loans. The
Eurodollar Rate shall be adjusted automatically on and as of the
effective date of any change in the Reserve Requirement.
"Restricted Payment" means (a) any dividend or other
distribution, direct or indirect, on account of any shares of any class
of stock of the Parent or any of its Subsidiaries (other than those
payable or distributable solely to the Parent or any Guarantor) now or
hereafter outstanding, except a dividend payable solely in shares of a
class of stock to the holders of that class; (b) any redemption,
conversion, exchange, retirement or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class
of stock of the Parent or any of its Subsidiaries (other than those
payable or distributable solely to the Parent or any Guarantor) now or
29
hereafter outstanding; (c) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to
acquire shares of any class of stock of Parent or any of its
Subsidiaries now or hereafter outstanding; and (d) any issuance and
sale of capital stock of any Subsidiary of the Parent (or any option,
warrant or right to acquire such stock) other than to the Parent or any
Guarantor.
"Revolving Credit Commitment" means, with respect to each
Lender, the obligation of such Lender to make Loans to the Borrower up
to an aggregate principal amount at any one time outstanding equal to
such Lender's Applicable Commitment Percentage of the Total Revolving
Credit Commitment.
"Revolving Credit Facility" means the facility described in
Article II hereof providing for Loans to the Borrower by the Lenders in
the aggregate principal amount of the Total Revolving Credit
Commitment.
"Revolving Credit Outstandings" means, as of any date of
determination, the aggregate principal amount of all Loans then
outstanding.
"Revolving Credit Termination Date" means (i) the Stated
Termination Date or (ii) such earlier date of termination of Lenders'
obligations pursuant to Section 10.1 upon the occurrence of an Event of
Default, or (iii) such date as the Borrower may voluntarily and
permanently terminate the Revolving Credit Facility by payment in full
of all Revolving Credit Outstandings, Swing Line Outstandings and
Letter of Credit Outstandings and cancellation of all Letters of
Credit, together with all accrued and unpaid interest thereon.
"Revolving Loan" means any borrowing pursuant to an Advance
under the Revolving Credit Facility in accordance with Section 2.1.
"Revolving Notes" means, collectively, the promissory notes of
the Borrower evidencing Revolving Loans executed and delivered to the
Lenders as provided in Section 2.5(a) substantially in the form of
Exhibit F-1, with appropriate insertions as to amounts, dates and names
of Lenders.
"S&P" means Standard & Poor's Ratings Group, a division of
▇▇▇▇▇▇-▇▇▇▇.
"Security Agreement" means, collectively (or individually as
the context may indicate), (i) the Security Agreements by the Borrower
and its Subsidiaries delivered in connection with the Existing
Agreement, (ii) the Security Agreement dated as of the date hereof by
the Parent to the Agent, and (iii) any additional Security Agreement
delivered to the Agent pursuant to Section 8.20, as hereafter modified,
amended or supplemented from time to time.
"Security Instruments" means, collectively, the Pledge
Agreement, the Security Agreement, the Mortgage and all other
agreements, instruments and other documents,
30
whether now existing or hereafter in effect, pursuant to which the
Borrower, the Parent or any Subsidiary shall grant or convey to the
Agent or the Lenders a Lien in property as security for all or any
portion of the Obligations, as any of them may be amended, modified or
supplemented from time to time.
"Services Agreement" means the Services Agreement dated May 7,
1998 between the Borrower and New River.
"Shareholders Agreement" means the Shareholder Agreement dated
August 31, 1998 among the Borrower and the Stockholders of the
Borrower.
"Single Employer Plan" means any employee pension benefit plan
covered by Title IV of ERISA in respect of which the Parent or any
Subsidiary is an "employer" as described in Section 4001(b) of ERISA
and which is not a Multiemployer Plan.
"Solvent" means, when used with respect to any Person, that at
the time of determination:
(i) the fair value of its assets (both at fair
valuation and at present fair saleable value on an orderly
basis) is in excess of the total amount of its liabilities,
including Contingent Obligations; and
(ii) it is then able and expects to be able to pay
its debts as they mature; and
(iii) it has capital sufficient to carry on its
business as conducted and as proposed to be conducted.
"Stated Termination Date" means June 3, 2002.
"Subsidiary" means any corporation or other entity in which
more than 50% of its outstanding voting stock or more than 50% of all
equity interests is owned directly or indirectly by the Parent and/or
by one or more of the Parent's Subsidiaries.
"Subsidiary Securities" means the shares of capital stock or
the other equity interests issued by or equity participations in any
Subsidiary, whether or not constituting a "security" under Article 8 of
the Uniform Commercial Code as in effect in any jurisdiction.
"Swap Agreement" means one or more agreements between the
Parent and any Lender with respect to Indebtedness evidenced by any or
all of the Notes, on terms mutually acceptable to the Parent and such
Lender, which agreements create Rate Hedging Obligations.
"Swing Line" means the revolving line of credit established by
NationsBank in
31
favor of the Borrower pursuant to Section 2.5(b).
"Swing Line Loans" means loans made by NationsBank to the
Borrower pursuant to Section 2.13.
"Swing Line Note" means the promissory note of the Borrower
evidencing the Swing Line executed and delivered to NationsBank as
provided in Section 2.5(b) substantially in the form of Exhibit F-2.
"Swing Line Outstandings" means, as of any date of
determination, the aggregate principal amount of all Swing Line Loans
then outstanding.
"Termination Event" means: (i) a "Reportable Event" described
in Section 4043 of ERISA and the regulations issued thereunder (unless
the notice requirement has been waived by applicable regulation); or
(ii) the withdrawal of the Parent or any ERISA Affiliate from a Pension
Plan during a plan year in which it was a "substantial employer" as
defined in Section 4001(a)(2) of ERISA or was deemed such under Section
4062(e) of ERISA; or (iii) the termination of a Pension Plan, the
filing of a notice of intent to terminate a Pension Plan or the
treatment of a Pension Plan amendment as a termination under Section
4041 of ERISA; or (iv) the institution of proceedings to terminate a
Pension Plan by the PBGC; or (v) any other event or condition which
would constitute grounds under Section 4042(a) of ERISA for the
termination of, or the appointment of a trustee to administer, any
Pension Plan; or (vi) the partial or complete withdrawal of the Parent
or any ERISA Affiliate from a Multiemployer Plan; or (vii) the
imposition of a Lien pursuant to Section 412 of the Code or Section 302
of ERISA; or (viii) any event or condition which results in the
reorganization or insolvency of a Multiemployer Plan under Section 4241
or Section 4245 of ERISA, respectively; or (ix) any event or condition
which results in the termination of a Multiemployer Plan under Section
4041A of ERISA or the institution by the PBGC of proceedings to
terminate a Multiemployer Plan under Section 4042 of ERISA.
"Total Letter of Credit Commitment" means an amount not to
exceed $5,000,000.
"Total Revolving Credit Commitment" means a principal amount
equal to $40,000,000, as such amounts are reduced from time to time in
accordance with Section 2.7; provided, however, that until written
notification to increase the Total Revolving Credit Commitment from
$30,000,000 to $40,000,000 is given by the Borrower to the Agent, the
amount of the Total Revolving Credit Commitment which shall be
available to the Borrower shall not exceed $30,000,000.
"Type" shall mean any type of Loan (i.e., a Base Rate Loan or
a Eurodollar Rate Loan).
32
"Voting Stock" means shares of capital stock issued by a
corporation, or equivalent interests in any other 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 if the right so to vote has been
suspended by the happening of such a contingency.
"Year 2000 Compliant" means all computer applications
(including those affected by information received from its suppliers
and vendors) that are material to the Parent's or any of its
Subsidiaries' business and operations will on a timely basis be able to
perform properly data-sensitive functions involving all dates on and
after January 1, 2000;
"Year 2000 Problem" means the risk that computer applications
used by the Parent and any of its Subsidiaries (including those
affected by information received from its suppliers and vendors) may be
unable to recognize and perform properly data-sensitive functions
involving certain dates on and after January 1, 2000.
1.3. Rules of Interpretation.
(a) All accounting terms not specifically defined herein shall
have the meanings assigned to such terms and shall be interpreted in
accordance with GAAP applied on a Consistent Basis.
(b) Each term defined in Article 1 or 9 of the Florida Uniform
Commercial Code shall have the meaning given therein unless otherwise
defined herein, except to the extent that the Uniform Commercial Code
of another jurisdiction is controlling, in which case such terms shall
have the meaning given in the Uniform Commercial Code of the applicable
jurisdiction.
(c) The headings, subheadings and table of contents used
herein or in any other Loan Document are solely for convenience of
reference and shall not constitute a part of any such document or
affect the meaning, construction or effect of any provision thereof.
(d) Except as otherwise expressly provided, references herein
to articles, sections, paragraphs, clauses, annexes, appendices,
exhibits and schedules are references to articles, sections,
paragraphs, clauses, annexes, appendices, exhibits and schedules in or
to this Agreement.
(e) All definitions set forth herein or in any other Loan
Document shall apply to the singular as well as the plural form of such
defined term, and all references to the masculine gender shall include
reference to the feminine or neuter gender, and vice versa, as the
context may require.
(f) When used herein or in any other Loan Document, words such
as
33
"hereunder", "hereto", "hereof" and "herein" and other words of like
import shall, unless the context clearly indicates to the contrary,
refer to the whole of the applicable document and not to any particular
article, section, subsection, paragraph or clause thereof.
(g) References to "including" means including without limiting
the generality of any description preceding such term, and for purposes
hereof the rule of ejusdem generis shall not be applicable to limit a
general statement, followed by or referable to an enumeration of
specific matters, to matters similar to those specifically mentioned.
(h) All dates and times of day specified herein shall refer to
such dates and times at Charlotte, North Carolina.
(i) Each of the parties to the Loan Documents and their
counsel have reviewed and revised, or requested (or had the opportunity
to request) revisions to, the Loan Documents, and any rule of
construction that ambiguities are to be resolved against the drafting
party shall be inapplicable in the construing and interpretation of the
Loan Documents and all exhibits, schedules and appendices thereto.
(j) Any reference to an officer of the Borrower or Parent or
any other Person by reference to the title of such officer shall be
deemed to refer to each other officer of such Person, however titled,
exercising the same or substantially similar functions.
(k) All references to any agreement or document as amended,
modified or supplemented, or words of similar effect, shall mean such
document or agreement, as the case may be, as amended, modified or
supplemented from time to time only as and to the extent permitted
therein and in the Loan Documents.
34
ARTICLE II
The Revolving Credit Facility
2.1. Loans.
(a) Commitment. Subject to the terms and conditions of this
Agreement, each Lender severally agrees to make Advances to the Borrower under
the Revolving Credit Facility from time to time from the Closing Date until the
Revolving Credit Termination Date on a pro rata basis as to the total borrowing
requested by the Borrower on any day determined by such Lender's Applicable
Commitment Percentage up to but not exceeding the Revolving Credit Commitment of
such Lender, provided, however, that the Lenders will not be required and shall
have no obligation to make any such Advance (i) so long as a Default or an Event
of Default has occurred and is continuing or (ii) if the Agent has accelerated
the maturity of any of the Notes as a result of an Event of Default; provided
further, however, that immediately after giving effect to each such Advance, the
amount of Revolving Credit Outstandings plus Letter of Credit Outstandings plus
Swing Line Outstandings shall not exceed the Total Revolving Credit Commitment.
Within such limits, the Borrower may borrow, repay and reborrow under the
Revolving Credit Facility on a Business Day from the Closing Date until, but (as
to borrowings and reborrowings) not including, the Revolving Credit Termination
Date; provided, however, that (y) no Loan that is a Eurodollar Rate Loan shall
be made which has an Interest Period that extends beyond the Stated Termination
Date and (z) each Loan that is a Eurodollar Rate Loan may, subject to the
provisions of Section 2.7, be repaid only on the last day of the Interest Period
with respect thereto unless such payment is accompanied by the additional
payment, if any, required by Section 5.5.
(b) Amounts. Except as otherwise permitted by the Lenders from
time to time, the amount of Revolving Credit Outstandings plus Letter of Credit
Outstandings plus Swing Line Outstandings shall not exceed at any time the Total
Revolving Credit Commitment, and, in the event there shall be outstanding any
such excess, the Borrower shall immediately make such payments and prepayments
as shall be necessary to comply with this restriction. Each Loan hereunder,
other than Base Rate Refunding Loans, and each Conversion under Section 2.8,
shall be (i) in the case of a Base Rate Loan, in an amount of at least $100,000,
and, if greater than $100,000, an integral multiple of $10,000, and (ii) in the
case of a Eurodollar Rate Loan in an amount of at least $500,000, and, if
greater than $500,000, an integral multiple of $100,000.
(c) Advances. (i) An Authorized Representative shall give the
Agent (1) at least three (3) Business Days' irrevocable telephonic notice of
each Revolving Loan that is a Eurodollar Rate Loan (whether representing an
additional borrowing hereunder or the Conversion of a borrowing hereunder from
Base Rate Loans to Eurodollar Rate Loans) prior to 10:30 A.M. and (2)
irrevocable telephonic notice of each Loan (other than Base Rate Refunding Loans
to the extent the same are effected without notice pursuant to Section
2.1(c)(iv)) that is a Base Rate Loan (whether representing an additional
borrowing hereunder or the Conversion of borrowing hereunder from Eurodollar
Rate Loans to Base Rate Loans)
35
prior to 10:30 A.M. on the day of such proposed Revolving Loan. Each such notice
shall specify the amount of the borrowing, the Type of Revolving Loan, the date
of borrowing and, if a Eurodollar Rate Loan, the Interest Period to be used in
the computation of interest. The Authorized Representative shall provide the
Agent written confirmation of each such telephonic notice in the form of a
Borrowing Notice or Interest Rate Selection Notice (as applicable) with
appropriate insertions, but failure to provide such notice shall not affect the
validity of such telephonic notice. Notice of receipt of such Borrowing Notice
or Interest Rate Selection Notice, as the case may be, together with the amount
of each Lender's portion of an Advance requested thereunder, shall be provided
by the Agent to each Lender by telefacsimile transmission with reasonable
promptness, but (provided the Agent shall have received such notice by 10:30
A.M.) not later than 1:00 P.M. on the same day as the Agent's receipt of such
notice.
(ii) Not later than 2:00 P.M. on the date specified for each borrowing
under this Section 2.1, each Lender shall, pursuant to the terms and subject to
the conditions of this Agreement, make the amount of the Advance or Advances to
be made by it on such day available by wire transfer to the Agent in the amount
of its pro rata share, determined according to such Lender's Applicable
Commitment Percentage of the Revolving Loan or Revolving Loans to be made on
such day. Such wire transfer shall be directed to the Agent at the Principal
Office and shall be in the form of Dollars constituting immediately available
funds. The amount so received by the Agent shall, subject to the terms and
conditions of this Agreement, be made available to the Borrower by delivery of
the proceeds thereof to the Borrower's Account or otherwise as shall be directed
in the applicable Borrowing Notice by the Authorized Representative and
reasonably acceptable to the Agent.
(iii) The Borrower shall have the option to elect the duration of the
initial and any subsequent Interest Periods and to Convert the Revolving Loans
in accordance with Section 2.8. Eurodollar Rate Loans and Base Rate Loans may be
outstanding at the same time, provided, however, there shall not be outstanding
at any one time Eurodollar Rate Loans having more than seven (7) different
Interest Periods. If the Agent does not receive a Borrowing Notice or an
Interest Rate Selection Notice giving notice of election of the duration of an
Interest Period or of Conversion of any Revolving Loan to or Continuation of a
Revolving Loan as a Eurodollar Rate Loan by the time prescribed by Section
2.1(c) or 2.8, the Borrower shall be deemed to have elected to Convert such
Segment to (or Continue such Segment as) a Base Rate Loan until the Borrower
notifies the Agent in accordance with Section 2.8.
(iv) Notwithstanding the foregoing, if a drawing is made under any
Letter of Credit, such drawing is honored by the Issuing Bank prior to the
Stated Termination Date, and the Borrower shall not immediately fully reimburse
the Issuing Bank in respect of such drawing, (A) provided that the conditions to
making a Revolving Loan as herein provided shall then be satisfied, the
Reimbursement Obligation arising from such drawing shall be paid to the Issuing
Bank by the Agent without the requirement of notice to or from the Borrower from
immediately available funds which shall be advanced as a Base Rate Refunding
Loan by each Lender under the Revolving Credit Facility in an amount equal to
such Lender's Applicable
36
Commitment Percentage of such Reimbursement Obligation, and (B) if the
conditions to making a Revolving Loan as herein provided shall not then be
satisfied, each of the Lenders shall fund by payment to the Agent (for the
benefit of the Issuing Bank) in immediately available funds the purchase from
the Issuing Bank of their respective Participations in the related Reimbursement
Obligation based on their respective Applicable Commitment Percentages of the
Total Letter of Credit Commitment. If a drawing is presented under any Letter of
Credit in accordance with the terms thereof and the Borrower shall not
immediately reimburse the Issuing Bank in respect thereof, then notice of such
drawing or payment shall be provided promptly by the Issuing Bank to the Agent
and the Agent shall provide notice to each Lender by telephone or telefacsimile
transmission. If notice to the Lenders of a drawing under any Letter of Credit
is given by the Agent at or before 12:00 noon on any Business Day, each Lender
shall, pursuant to the conditions specified in this Section 2.1(c)(iv), either
make a Base Rate Refunding Loan or fund the purchase of its Participation in the
amount of such Lender's Applicable Commitment Percentage of such drawing or
payment and shall pay such amount to the Agent for the account of the Issuing
Bank at the Principal Office in Dollars and in immediately available funds
before 2:30 P.M. on the same Business Day. If notice to the Lenders of a drawing
under a Letter of Credit is given by the Agent after 12:00 noon on any Business
Day, each Lender shall, pursuant to the conditions specified in this Section
2.1(c)(iv), either make a Base Rate Refunding Loan or fund the purchase of its
Participation in the amount of such Lender's Applicable Commitment Percentage of
such drawing or payment and shall pay such amount to the Agent for the account
of the Issuing Bank at the Principal Office in Dollars and in immediately
available funds before 12:00 noon on the next following Business Day. Any such
Base Rate Refunding Loan shall be advanced as, and shall Continue as, a Base
Rate Loan unless and until the Borrower Converts such Base Rate Loan in
accordance with the terms of Section 2.8.
2.2. Payment of Interest. (a) The Borrower shall pay interest to the
Agent for the account of each Lender on the outstanding and unpaid principal
amount of each Loan made by such Lender for the period commencing on the date of
such Loan until such Loan shall be due at the then applicable Base Rate for Base
Rate Loans or applicable Eurodollar Rate for Eurodollar Rate Loans, as
designated by the Authorized Representative pursuant to Section 2.1; provided,
however, that if any Event of Default shall occur and be continuing, all amounts
outstanding hereunder shall bear interest thereafter at the Default Rate.
(b) Interest on each Loan shall be computed on the basis of a
year of 360 days and calculated in each case for the actual number of days
elapsed. Interest on each Loan shall be paid (i) quarterly in arrears on the
last Business Day of each March, June, September and December, commencing June
30, 1999 for each Base Rate Loan, (ii) on the last day of the applicable
Interest Period for each Eurodollar Rate Loan and, if such Interest Period
extends for more than three (3) months, at intervals of three (3) months after
the first day of such Interest Period, and (iii) upon payment in full of the
principal amount of such Loan.
2.3. Payment of Principal. The principal amount of each Loan shall be
due and payable to the Agent for the benefit of each Lender in full on the
Revolving Credit Termination Date, or earlier as specifically provided herein.
The principal amount of any
37
Base Rate Loan may be prepaid in whole or in part at any time. The principal
amount of any Eurodollar Rate Loan may be prepaid only at the end of the
applicable Interest Period unless the Borrower shall pay to the Agent for the
account of the Lenders the additional amount, if any, required under Section
5.5. All prepayments of Loans made by the Borrower shall be in the amount of
$100,000 or such greater amount which is an integral multiple of $10,000, or the
amount equal to all Revolving Credit Outstandings, or such other amount as
necessary to comply with Section 2.1(b) or Section 2.8.
2.4. Manner of Payment. (a) Each payment of principal (including any
prepayment) and payment of interest and fees, and any other amount required to
be paid by or on behalf of the Borrower to the Lenders, the Issuing Bank, the
Agent, or NationsBank with respect to the Loans, Letter of Credit Reimbursement
Obligation, or Swing Line Loan shall be made to the Agent at the Principal
Office, for the account of each Lender, in Dollars and in immediately available
funds without setoff, deduction or counterclaim before 12:30 P.M. on the date
such payment is due. The Agent may, but shall not be obligated to, debit the
amount of any such payment which is not made by such time to any ordinary
deposit account, if any, of the Borrower with the Agent.
(b) The Agent shall deem any payment made by or on behalf of the
Borrower hereunder that is not made both in Dollars and in immediately available
funds and prior to 12:30 P.M. to be a non-conforming payment. Any such payment
shall not be deemed to be received by the Agent until the later of (i) the time
such funds become available funds and (ii) the next Business Day. Any
non-conforming payment may constitute or become a Default or Event of Default.
Interest shall continue to accrue on any principal as to which a non-conforming
payment is made until the later of (x) the date such funds become available
funds or (y) the next Business Day at the Default Rate from the date such amount
was due and payable.
(c) In the event that any payment hereunder or under the Notes becomes
due and payable on a day other than a Business Day, then such due date shall be
extended to the next succeeding Business Day unless provided otherwise under
clause (ii) of the definition of "Interest Period"; provided that interest shall
continue to accrue during the period of any such extension and provided further,
that in no event shall any such due date be extended beyond the Revolving Credit
Termination Date.
2.5. Notes.
(a) Revolving Notes. Revolving Loans made by each Lender shall be
evidenced by the Revolving Note payable to the order of such Lender in the
respective amount of its Applicable Commitment Percentage of the Total Revolving
Credit Commitment, which Revolving Note shall be dated the Closing Date or a
later date pursuant to an Assignment and Acceptance and shall be duly completed,
executed and delivered by the Borrower.
(b) Swing Line Note. The Swing Line Outstandings shall be evidenced by
a
38
separate Swing Line Note payable to the order of the NationsBank in the amount
of the Swing Line, which Swing Line Note shall be dated the Closing Date and
shall be duly completed, executed and delivered by the Borrower.
2.6. Pro Rata Payments. Except as otherwise provided herein, (a) each
payment on account of the principal of and interest on the Revolving Loans and
the fees described in Section 2.10 shall be made to the Agent for the account of
the Lenders pro rata based on their Applicable Commitment Percentages, (b) all
payments to be made by the Borrower for the account of each of the Lenders on
account of principal, interest and fees, shall be made without diminution,
setoff, recoupment or counterclaim, and (c) the Agent will promptly distribute
to the Lenders in immediately available funds payments received in fully
collected, immediately available funds from the Borrower.
2.7. Reductions. The Borrower shall, by notice from an Authorized
Representative, have the right from time to time but not more frequently than
once each calendar month, upon not less than three (3) Business Days' written
notice to the Agent, effective upon receipt, to reduce the Total Revolving
Credit Commitment. The Agent shall give each Lender, within one (1) Business Day
of receipt of such notice, telefacsimile notice, or telephonic notice (confirmed
in writing), of such reduction. Each such reduction shall be in the aggregate
amount of $1,000,000 or such greater amount which is in an integral multiple of
$100,000, or the entire remaining Total Revolving Credit Commitment, and shall
permanently reduce the Total Revolving Credit Commitment. Each reduction of the
Total Revolving Credit Commitment shall be accompanied by payment of the Loans
to the extent that the principal amount of Revolving Credit Outstandings plus
Letter of Credit Outstandings plus Swing Line Outstandings exceeds the Total
Revolving Credit Commitment after giving effect to such reduction, together with
accrued and unpaid interest on the amounts prepaid. No such reduction shall
result in the payment of any Eurodollar Rate Loan other than on the last day of
the Interest Period of such Eurodollar Rate Loan unless such prepayment is
accompanied by amounts due, if any, under Section 5.5.
2.8. Conversions and Elections of Subsequent Interest Periods. Subject
to the limitations set forth below and in Article V, the Borrower may:
(a) upon delivery, effective upon receipt, of a properly
completed Interest Rate Selection Notice to the Agent on or before 10:30 A.M. on
any Business Day, Convert all or a part of Eurodollar Rate Loans to Base Rate
Loans on the last day of the Interest Period for such Eurodollar Rate Loans; and
(b) provided that no Default or Event of Default shall have
occurred and be continuing and upon delivery, effective upon receipt, of a
properly completed Interest Rate Selection Notice to the Agent on or before
10:30 A.M. three (3) Business Days' prior to the date of such election or
Conversion:
(i) elect a subsequent Interest Period for all or a
portion of Eurodollar Rate Loans to begin on the last day of
the then current Interest Period for such Eurodollar Rate
Loans; and
39
(ii) Convert Base Rate Loans to Eurodollar Rate Loans
on any Business Day.
Each election and Conversion pursuant to this Section 2.8 shall be
subject to the limitations on Eurodollar Rate Loans set forth in the definition
of "Interest Period" herein and in Sections 2.1, 2.3 and Article V. The Agent
shall give written notice to each Lender of such notice of election or
Conversion prior to 3:00 P.M. on the day such notice of election or Conversion
is received. All such Continuations or Conversions of Loans shall be effected
pro rata based on the Applicable Commitment Percentages of the Lenders.
2.9. Increase and Decrease in Amounts. The amount of the Total
Revolving Credit Commitment which shall be available to the Borrower as Advances
shall be reduced by the aggregate amount of Revolving Credit Outstandings and
Letters of Credit Outstandings and Swing Line Outstandings.
2.10. Facility Fees. For the period beginning on the Closing Date and
ending on the Revolving Credit Termination Date, the Borrower agrees to pay to
the Agent, for the pro rata benefit of the Lenders based on their Applicable
Commitment Percentages, an unused fee equal to the Applicable Unused Fee
multiplied by the average daily amount by which the Total Revolving Credit
Commitment exceeds the sum of (i) Revolving Credit Outstandings (without giving
effect to Swing Line Outstandings) plus (ii) Letter of Credit Outstandings. Such
fees shall be due quarterly in arrears on the last Business Day of each March,
June, September and December commencing June 30, 1999 to and on the Revolving
Credit Termination Date. Notwithstanding the foregoing, so long as any Lender
fails to make available any portion of its Revolving Credit Commitment when
requested, such Lender shall not be entitled to receive payment of its pro rata
share of such fee until such Lender shall make available such portion. Such fee
shall be calculated on the basis of a year of 360 days for the actual number of
days elapsed.
2.11. Deficiency Advances; Failure to Purchase Participations. No
Lender shall be responsible for any default of any other Lender in respect to
such other Lender's obligation to make any Loan hereunder or fund its purchase
of any Participation hereunder nor shall the Revolving Credit Commitment of any
Lender hereunder be increased as a result of such default of any other Lender.
Without limiting the generality of the foregoing, in the event any Lender shall
fail to advance funds to the Borrower as herein provided, the Agent may in its
discretion, but shall not be obligated to, advance under the applicable
Revolving Note in its favor as a Lender all or any portion of such amount or
amounts (each, a "deficiency advance") and shall thereafter be entitled to
payments of principal of and interest on such deficiency advance in the same
manner and at the same interest rate or rates to which such other Lender would
have been entitled had it made such Advance under its Revolving Note; provided
that, (i) such defaulting Lender shall not be entitled to receive payments of
principal, interest or fees with respect to such deficiency advance until such
deficiency advance shall be paid by such Lender and (ii) upon payment to the
Agent from such other Lender of the entire outstanding amount of each such
deficiency advance, together with accrued and unpaid interest thereon,
40
from the most recent date or dates interest was paid to the Agent by a Borrower
on each Loan comprising the deficiency advance at the interest rate per annum
for overnight borrowing by the Agent from the Federal Reserve Bank, then such
payment shall be credited against the applicable Revolving Note of the Agent in
full payment of such deficiency advance and such Borrower shall be deemed to
have borrowed the amount of such deficiency advance from such other Lender as of
the most recent date or dates, as the case may be, upon which any payments of
interest were made by such Borrower thereon. In the event any Lender shall fail
to fund its purchase of a Participation after notice from the Issuing Bank or
NationsBank as the Swing Line lender, as applicable, such Lender shall pay to
the Issuing Bank or NationsBank as the Swing Line lender, as applicable,
interest on the amount so due from the date of such notice at the interest rate
per annum for overnight borrowing by the Agent from the Federal Reserve Bank to
the date such purchase price is received by the Issuing Bank or NationsBank as
the Swing Line lender, as applicable. The failure of one Lender to make a
required Advance shall not relieve any other Lender of its obligation to make an
Advance hereunder.
2.12. Use of Proceeds. The proceeds of the Loans made pursuant to the
Revolving Credit Facility hereunder shall be used by the Borrower for general
working capital needs and other corporate purposes, including the making of
Acquisitions permitted hereunder.
2.13. Swing Line. (a) Notwithstanding any other provision of this
Agreement to the contrary, in order to administer the Revolving Credit Facility
in an efficient manner and to minimize the transfer of funds between the Agent
and the Lenders, NationsBank shall make available Swing Line Loans to the
Borrower prior to the Revolving Credit Termination Date. NationsBank shall not
be obligated to make any Swing Line Loan pursuant hereto (i) if to the actual
knowledge of NationsBank the Borrower is not in compliance with all the
conditions to the making of Revolving Loans set forth in this Agreement, (ii) if
after giving effect to such Swing Line Loan, the Swing Line Outstandings exceed
$2,000,000, or (iii) if after giving effect to such Swing Line Loan, the sum of
the Swing Line Outstandings, Revolving Credit Outstandings and Letter of Credit
Outstandings exceeds the Total Revolving Credit Commitment. The Company may,
subject to the conditions set forth in the preceding sentence, borrow, repay and
reborrow under this Section 2.13. Unless notified to the contrary by
NationsBank, borrowings under the Swing Line shall be made in the minimum amount
of $10,000 or, if greater, in amounts which are integral multiples of $10,000,
or in the amount necessary to effect a Base Rate Refunding Loan, upon written
request by telefacsimile transmission, effective upon receipt, by an Authorized
Representative of the Borrower made to NationsBank not later than 12:30 P.M. on
the Business Day of the requested borrowing. Each such Borrowing Notice shall
specify the amount of the borrowing and the date of borrowing, and shall be in
the form of Exhibit D-2, with appropriate insertions. Unless notified to the
contrary by NationsBank, each repayment of a Swing Line Loan shall be in an
amount which is an integral multiple of $10,000 or the aggregate amount of all
Swing Line Outstandings.
(b) The interest payable on Swing Line Loans is solely for the account
of NationsBank. Swing Line Loans shall bear interest solely at the Base Rate.
Upon the occurrence of an Event of Default Swing Line Loans shall accrue
interest at the Default Rate, and all accrued and unpaid interest on Swing Line
Loans shall be payable, on the dates and in
41
the manner provided in Sections 2.2 with respect to interest on Base Rate Loans.
(c) Upon the making of a Swing Line Loan, each Lender shall be deemed
to have purchased from NationsBank a Participation therein in an amount equal to
that Lender's Applicable Commitment Percentage of such Swing Line Loan. Upon
demand made by NationsBank, each Lender shall, according to its Applicable
Commitment Percentage of such Swing Line Loan, promptly provide to NationsBank
its purchase price therefor in an amount equal to its Participation therein. Any
Advance made by a Lender pursuant to demand of NationsBank of the purchase price
of its Participation shall when made be deemed to be (i) provided that the
conditions to making Revolving Loans shall be satisfied, a Base Rate Refunding
Loan under Section 2.1, and (ii) in all other cases, the funding by each Lender
of the purchase price of its Participation in such Swing Line Loan. The
obligation of each Lender to so provide its purchase price to NationsBank shall
be absolute and unconditional and shall not be affected by the occurrence of an
Event of Default or any other occurrence or event.
The Borrower, at its option and subject to the terms hereof, may
request an Advance pursuant to Section 2.1 in an amount sufficient to repay
Swing Line Outstandings on any date and the Agent shall provide from the
proceeds of such Advance to NationsBank the amount necessary to repay such Swing
Line Outstandings (which NationsBank shall then apply to such repayment) and
credit any balance of the Advance in immediately available funds in the manner
directed by the Borrower pursuant to Section 2.1(c)(ii). The proceeds of such
Advances shall be paid to NationsBank for application to the Swing Line
Outstandings and the Lenders shall then be deemed to have made Loans in the
amount of such Advances. The Swing Line shall continue in effect until the
Revolving Credit Termination Date, at which time all Swing Line Outstandings and
accrued interest thereon shall be due and payable in full.
42
ARTICLE III
Letters of Credit
3.1. Letters of Credit. The Issuing Bank agrees, subject to the terms
and conditions of this Agreement, upon request of the Borrower to issue from
time to time for the account of the Borrower Letters of Credit upon delivery to
the Issuing Bank of an Application and Agreement for Letter of Credit relating
thereto in form and content acceptable to the Issuing Bank; provided, that (i)
the Letter of Credit Outstandings shall not exceed the Total Letter of Credit
Commitment and (ii) no Letter of Credit shall be issued if, after giving effect
thereto, Letter of Credit Outstandings plus Revolving Credit Outstandings plus
Swing Line Outstandings shall exceed the Total Revolving Credit Commitment. No
Letter of Credit shall have an expiry date (including all rights of the Borrower
or any beneficiary named in such Letter of Credit to require renewal) or payment
date occurring later than the earlier to occur of one year after the date of its
issuance or the fifth Business Day prior to the Stated Termination Date.
3.2. Reimbursement.
(a) The Borrower hereby unconditionally agrees to pay to the
Issuing Bank immediately on demand at the Principal Office all amounts required
to pay all drafts drawn or purporting to be drawn under the Letters of Credit
and all reasonable expenses incurred by the Issuing Bank in connection with the
Letters of Credit, and in any event and without demand to place in possession of
the Issuing Bank (which shall include Advances under the Revolving Credit
Facility if permitted by Section 2.1 and Swing Line Loans if permitted by
Section 2.1(c)(iv)) sufficient funds to pay all debts and liabilities arising
under any Letter of Credit. The Issuing Bank agrees to give the Borrower prompt
notice of any request for a draw under a Letter of Credit. The Issuing Bank may
charge any account the Borrower may have with it for any and all amounts the
Issuing Bank pays under a Letter of Credit, plus charges and reasonable expenses
as from time to time agreed to by the Issuing Bank and the Borrower; provided
that to the extent permitted by Section 2.1(c)(iv), amounts shall be paid
pursuant to Advances under the Revolving Credit Facility or, if the Borrower
shall elect, by Swing Line Loans. The Borrower agrees to pay the Issuing Bank
interest on any Reimbursement Obligations not paid when due hereunder at the
Default Rate, such rate to be calculated on the basis of a year of 360 days for
actual days elapsed.
(b) In accordance with the provisions of Section 2.1(c), the
Issuing Bank shall notify the Agent of any drawing under any Letter of Credit
promptly following the receipt by the Issuing Bank of such drawing.
(c) Each Lender (other than the Issuing Bank) shall
automatically acquire on the date of issuance thereof, a Participation in the
liability of the Issuing Bank in respect of each Letter of Credit in an amount
equal to such Lender's Applicable Commitment Percentage of such liability, and
to the extent that the Borrower is obligated to pay the Issuing Bank under
Section 3.2(a), each Lender (other than the Issuing Bank) thereby shall
absolutely,
43
unconditionally and irrevocably assume, and shall be unconditionally obligated
to pay to the Issuing Bank as hereinafter described, its Applicable Commitment
Percentage of the liability of the Issuing Bank under such Letter of Credit.
(i) Each Lender (including the Issuing Bank in its
capacity as a Lender) shall, subject to the terms and
conditions of Article II, pay to the Agent for the account of
the Issuing Bank at the Principal Office in Dollars and in
immediately available funds, an amount equal to its Applicable
Commitment Percentage of any drawing under a Letter of Credit,
such funds to be provided in the manner described in Section
2.1(c)(iv).
(ii) Simultaneously with the making of each payment
by a Lender to the Issuing Bank pursuant to Section
2.1(c)(iv)(B), such Lender shall, automatically and without
any further action on the part of the Issuing Bank or such
Lender, acquire a Participation in an amount equal to such
payment (excluding the portion thereof constituting interest
accrued prior to the date the Lender made its payment) in the
related Reimbursement Obligation of the Borrower. The
Reimbursement Obligations of the Borrower shall be immediately
due and payable whether by Advances made in accordance with
Section 2.1(c)(iv) or otherwise.
(iii) Each Lender's obligation to make payment to the
Agent for the account of the Issuing Bank pursuant to Section
2.1(c)(iv) and this Section 3.2(c), 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 shall be made without any offset, abatement,
withholding or reduction whatsoever. If any Lender is
obligated to pay but does not pay amounts to the Agent for the
account of the Issuing Bank in full upon such request as
required by Section 2.1(c)(iv) or this Section 3.2(c), such
Lender shall, on demand, pay to the Agent for the account of
the Issuing Bank interest on the unpaid amount for each day
during the period commencing on the date of notice given to
such Lender pursuant to Section 2.1(c) until such Lender pays
such amount to the Agent for the account of the Issuing Bank
in full at the interest rate per annum for overnight borrowing
by the Agent from the Federal Reserve Bank.
(iv) In the event the Lenders have purchased
Participations in any Reimbursement Obligation as set forth in
clause (ii) above, then at any time payment (in fully
collected, immediately available funds) of such Reimbursement
Obligation, in whole or in part, is received by Issuing Bank
from the Borrower, Issuing Bank shall promptly pay to each
Lender an amount equal to its Applicable Commitment Percentage
44
of such payment from the Borrower.
(d) Promptly following the end of each calendar quarter, the
Issuing Bank shall deliver to the Agent a notice describing the aggregate
undrawn amount of all Letters of Credit at the end of such quarter. Upon the
request of any Lender from time to time, the Issuing Bank shall deliver to the
Agent, and the Agent shall deliver to such Lender, any other information
reasonably requested by such Lender with respect to each Letter of Credit
outstanding.
(e) The issuance by the Issuing Bank of each Letter of Credit
shall, in addition to the conditions precedent set forth in Article VI, be
subject to the conditions that such Letter of Credit be in such form and contain
such terms as shall be reasonably satisfactory to the Issuing Bank consistent
with the then current practices and procedures of the Issuing Bank with respect
to similar letters of credit, and the Borrower shall have executed and delivered
such other instruments and agreements relating to such Letters of Credit as the
Issuing Bank shall have reasonably requested consistent with such practices and
procedures and shall not be in conflict with any of the express terms herein
contained. All Letters of Credit shall be issued pursuant to and subject to the
Uniform Customs and Practice for Documentary Credits, 1993 revision,
International Chamber of Commerce Publication No. 500, or if the Issuing Bank
shall elect by express reference in an affected Letter of Credit, the
International Chamber of Commerce International Standby Practices commonly
referred to as "ISP98" or any subsequent amendments and revisions of either
thereof.
(f) The Borrower agrees that Issuing Bank may, in its sole
discretion, accept or pay, as complying with the terms of any Letter of Credit,
any drafts or other documents otherwise in order which may be signed or issued
by an administrator, executor, trustee in bankruptcy, debtor in possession,
assignee for the benefit of creditors, liquidator, receiver, attorney in fact or
other legal representative of a party who is authorized under such Letter of
Credit to draw or issue any drafts or other documents.
(g) Without limiting the generality of the provisions of
Section 13.9, the Borrower hereby agrees to indemnify and hold harmless the
Issuing Bank, each other Lender and the Agent from and against any and all
claims and damages, losses, liabilities, reasonable costs and expenses which the
Issuing Bank, such other Lender or the Agent may incur (or which may be claimed
against the Issuing Bank, such other Lender or the Agent) by any Person by
reason of or in connection with the issuance or transfer of or payment or
failure to pay under any Letter of Credit; provided that the Borrower shall not
be required to indemnify the Issuing Bank, any other Lender or the Agent for any
claims, damages, losses, liabilities, costs or expenses to the extent, but only
to the extent, (i) caused by the willful misconduct or gross negligence of the
party to be indemnified or (ii) caused by the failure of the Issuing Bank to pay
under any Letter of Credit after the presentation to it of a request for payment
strictly complying with the terms and conditions of such Letter of Credit,
unless such payment is prohibited by any law, regulation, court order or decree.
The indemnification and hold harmless provisions of this Section 3.2(g) shall
survive repayment of the Obligations, occurrence of the Revolving Credit
Termination Date and expiration or termination of this Agreement.
45
(h) Without limiting Borrower's rights as set forth in Section
3.2(g), the obligation of the Borrower to immediately reimburse the Issuing Bank
for drawings made under Letters of Credit and the Issuing Bank's right to
receive such payment shall be absolute, unconditional and irrevocable, and that
such obligations of the Borrower shall be performed strictly in accordance with
the terms of this Agreement and such Letters of Credit and the related
Applications and Agreement for any Letter of Credit, under all circumstances
whatsoever, including the following circumstances:
(i) any lack of validity or enforceability of the
Letter of Credit, the obligation supported by the Letter of
Credit or any other agreement or instrument relating thereto
(collectively, the "Related LC Documents");
(ii) any amendment or waiver of or any consent to or
departure from all or any of the Related LC Documents;
(iii) the existence of any claim, setoff, defense
(other than the defense of payment in accordance with the
terms of this Agreement) or other rights which the Borrower
may have at any time against any beneficiary or any transferee
of a Letter of Credit (or any persons or entities for whom any
such beneficiary or any such transferee may be acting), the
Agent, the Lenders or any other Person, whether in connection
with the Loan Documents, the Related LC Documents or any
unrelated transaction;
(iv) any breach of contract or other dispute between
the Borrower and any beneficiary or any transferee of a Letter
of Credit (or any persons or entities for whom such
beneficiary or any such transferee may be acting), the Agent,
the Lenders or any other Person;
(v) any draft, statement or any other document
presented under the Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect
whatsoever;
(vi) any delay, extension of time, renewal,
compromise or other indulgence or modification granted or
agreed to by the Agent, with or without notice to or approval
by the Borrower in respect of any of Borrower's Obligations
under this Agreement; or
(vii) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing.
46
3.3. Letter of Credit Facility Fees. The Borrower shall pay to the
Agent, for the pro rata benefit of the Lenders based on their Applicable
Commitment Percentages, a fee on the aggregate amount available to be drawn on
each outstanding Letter of Credit at a rate equal to the Applicable Margin for
Eurodollar Rate Loans. Such fees shall be due with respect to each Letter of
Credit quarterly in arrears on the last Business Day of each March, June,
September and December, the first such payment to be made on the first such date
occurring after the date of issuance of a Letter of Credit. The fees described
in this Section 3.3 shall be calculated on the basis of a year of 360 days for
the actual number of days elapsed.
3.4. Administrative Fees. The Borrower shall pay to the Issuing Bank
such administrative fee and other fees, if any, in connection with the Letters
of Credit in such amounts and at such times as the Issuing Bank and the Borrower
shall agree from time to time.
47
ARTICLE IV
Security
4.1. Security. As security for the full and timely payment and
performance of all Obligations, the Credit Parties shall on or before the
Closing Date do or cause to be done all things necessary in the reasonable
opinion of the Agent and its counsel to grant to the Agent for the benefit of
the Lenders a duly perfected first priority mortgage and/or security interest in
all Collateral subject to no prior Lien or other encumbrance or restriction on
transfer (other than restrictions on transfer imposed by applicable securities
laws or permitted under Section 9.4).
4.2. Further Assurances. At the request of the Agent, the Parent will
or will cause its Subsidiaries, as the case may be to execute, by its duly
authorized officers, alone or with the Agent, any certificate, instrument,
statement or document, or to procure any such certificate, instrument, statement
or document, or to take such other action (and pay all connected costs) which
the Agent reasonably deems necessary from time to time to create, continue or
preserve the liens and security interests in Collateral (and the perfection and
priority thereof) of the Agent contemplated hereby and by the other Loan
Documents and specifically including all Collateral acquired by the Parent, the
Borrower or any Guarantor after the Closing Date. The Agent is hereby
irrevocably authorized to execute and file or cause to be filed, with or if
permitted by applicable law without the signature of the Borrower or any Credit
Party appearing thereon, all Uniform Commercial Code financing statements
reflecting the Borrower or any other Credit Party as "debtor" and the Agent as
"secured party", and continuations thereof and amendments thereto, as the Agent
reasonably deems necessary or advisable to give effect to the transactions
contemplated hereby and by the other Loan Documents.
4.3. Information Regarding Collateral. The Parent and the Borrower
represent, warrant and covenant that (i) the chief executive office of the
Parent, the Borrower and each other Person providing Collateral pursuant to a
Security Instrument (each, a "Grantor") at the Closing Date is located at the
address or addresses specified on Schedule 4.3, and (ii) Schedule 4.3 contains a
true and complete list of (a) the name and address of each Grantor and of each
other Person that has effected any merger or consolidation with a Grantor or
contributed or transferred to a Grantor any property constituting Collateral at
any time since January 1, 1994 (excluding Persons making sales in the ordinary
course of their businesses to a Grantor of property constituting inventory in
the hands of such seller), (b) each location of the chief executive office of
each Grantor at any time since January 1, 1994, (c) each location in which goods
constituting Collateral are or have been located since January 1, 1994 (together
with the name of each owner of the property located at such address if not the
applicable Grantor, and a summary description of the relationship between the
applicable Grantor and such Person), and (d) each trade style used by any
Grantor since January 1, 1994 and the purposes for which it was used. Borrower
shall not change, and shall not permit any other Grantor to change the location
of its chief executive office or any location specified in clause (c) of the
immediately preceding sentence other than to an existing location of Collateral,
or use or permit any other
48
Grantor to use, any additional trade style, except upon giving not less than
thirty (30) days' prior written notice to the Agent and taking or causing to be
taken all such action at Borrower's or such other Grantor's expense as may be
reasonably requested by the Agent to perfect or maintain the perfection of the
Lien of the Agent in Collateral.
49
ARTICLE V
Change in Circumstances
5.1. Increased Cost and Reduced Return.
(a) If, after the date hereof, the adoption of any applicable law,
rule, or regulation, or any change in any applicable law, rule, or regulation,
or any change in the interpretation or administration thereof by any
governmental authority, central bank, or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or its
Applicable Lending Office) with any request or directive (whether or not having
the force of law) of any such governmental authority, central bank, or
comparable agency:
(i) shall subject such Lender (or its Applicable
Lending Office) to any tax, duty, or other charge with respect to any
Eurodollar Rate Loans, its Revolving Note, or its obligation to make
Eurodollar Rate Loans, or change the basis of taxation of any amounts
payable to such Lender (or its Applicable Lending Office) under this
Agreement or its Revolving Note in respect of any Eurodollar Rate Loans
(other than taxes imposed on the overall net income of such Lender by
the jurisdiction in which such Lender has its principal office or such
Applicable Lending Office);
(ii) shall impose, modify, or deem applicable any
reserve, special deposit, assessment, or similar requirement (other
than the Reserve Requirement utilized in the determination of the
Eurodollar Rate) relating to any extensions of credit or other assets
of, or any deposits with or other liabilities or commitments of, such
Lender (or its Applicable Lending Office), including the Revolving
Credit Commitment of such Lender hereunder; or
(iii) shall impose on such Lender (or its Applicable
Lending Office) or on the London interbank market any other condition
affecting this Agreement or its Revolving Note or any of such
extensions of credit or liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such Lender
(or its Applicable Lending Office) of making, Converting into, Continuing, or
maintaining any Loans or to reduce any sum received or receivable by such Lender
(or its Applicable Lending Office) under this Agreement or its Revolving Note
with respect to any Eurodollar Rate Loans, then the Borrower shall pay to such
Lender on demand such amount or amounts as will compensate such Lender for such
increased cost or reduction. If any Lender requests compensation by the Borrower
under this Section 5.1(a), the Borrower may, by notice to such Lender (with a
copy to the Agent), suspend the obligation of such Lender to make or Continue
Loans of the Type with respect to which such compensation is requested, or to
Convert Loans of any other Type into Loans of such Type, until the event or
condition giving rise to such request ceases to be in effect (in which case the
provisions of Section 5.4 shall be applicable); provided that such suspension
shall not affect the right of such Lender to receive the compensation so
requested.
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(b) If, after the date hereof, any Lender shall have determined that
the adoption of any applicable law, rule, or regulation regarding capital
adequacy or any change therein or in the interpretation or administration
thereof by any governmental authority, central bank, or comparable agency
charged with the interpretation or administration thereof, or any request or
directive regarding capital adequacy (whether or not having the force of law) of
any such governmental authority, central bank, or comparable agency, has or
would have the effect of reducing the rate of return on the capital of such
Lender or any corporation controlling such Lender as a consequence of such
Lender's obligations hereunder to a level below that which such Lender or such
corporation could have achieved but for such adoption, change, request, or
directive (taking into consideration its policies with respect to capital
adequacy), then from time to time upon demand the Borrower shall pay to such
Lender such additional amount or amounts as will compensate such Lender for such
reduction.
(c) Each Lender shall promptly notify the Borrower and the Agent of any
event of which it has knowledge, occurring after the date hereof, which will
entitle such Lender to compensation pursuant to this Section 5.1 and will
designate a different Applicable Lending Office if such designation will avoid
the need for, or reduce the amount of, such compensation and will not, in the
judgment of such Lender, be otherwise disadvantageous to it. Any Lender claiming
compensation under this Section 5.1 shall furnish to the Borrower and the Agent
a statement setting forth the additional amount or amounts to be paid to it
hereunder which shall be conclusive in the absence of manifest error. In
determining such amount, such Lender may use any reasonable averaging and
attribution methods.
5.2. Limitation on Types of Loans. If on or prior to the first day of
any Interest Period for any Eurodollar Rate Loan:
(a) the Agent determines (which determination shall be
conclusive) that by reason of circumstances affecting the relevant
market, adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate for such Interest Period; or
(b) the Required Lenders determine (which determination shall
be conclusive) and notify the Agent that the Eurodollar Rate will not
adequately and fairly reflect the cost to the Lenders of funding
Eurodollar Rate Loans for such Interest Period;
then the Agent shall give the Borrower prompt notice thereof specifying the
relevant Type of Loans and the relevant amounts or periods, and so long as such
condition remains in effect, the Lenders shall be under no obligation to make
additional Loans of such Type, Continue Loans of such Type, or to Convert Loans
of any other Type into Loans of such Type and the Borrower shall, on the last
day(s) of the then current Interest Period(s) for the outstanding Loans of the
affected Type, either prepay such Loans or Convert such Loans into another Type
of Loan in accordance with the terms of this Agreement.
5.3. Illegality. Notwithstanding any other provision of this Agreement,
in the event that it becomes unlawful for any Lender or its Applicable Lending
Office to make, maintain, or fund Eurodollar Rate Loans hereunder, then such
Lender shall promptly notify the Borrower
51
thereof and such Lender's obligation to make or Continue Eurodollar Rate Loans
and to Convert other Types of Loans into Eurodollar Rate Loans shall be
suspended until such time as such Lender may again make, maintain, and fund
Eurodollar Rate Loans (in which case the provisions of Section 5.4 shall be
applicable).
5.4. Treatment of Affected Loans. If the obligation of any Lender to
make a Eurodollar Rate Loan or to Continue, or to Convert Loans of any other
Type into, Loans of a particular Type shall be suspended pursuant to Section 5.1
or 5.3 hereof (Loans of such Type being herein called "Affected Loans" and such
Type being herein called the "Affected Type"), such Lender's Affected Loans
shall be automatically Converted into Base Rate Loans on the last day(s) of the
then current Interest Period(s) for Affected Loans (or, in the case of a
Conversion required by Section 5.3 hereof, on such earlier date as such Lender
may specify to the Borrower with a copy to the Agent) and, unless and until such
Lender gives notice as provided below that the circumstances specified in
Section 5.1 or 5.3 hereof that gave rise to such Conversion no longer exist:
(a) to the extent that such Lender's Affected Loans have been
so Converted, all payments and prepayments of principal that would
otherwise be applied to such Lender's Affected Loans shall be applied
instead to its Base Rate Loans; and
(b) all Loans that would otherwise be made or Continued by
such Lender as Loans of the Affected Type shall be made or Continued
instead as Base Rate Loans, and all Loans of such Lender that would
otherwise be Converted into Loans of the Affected Type shall be
Converted instead into (or shall remain as) Base Rate Loans.
If such Lender gives notice to the Borrower (with a copy to the Agent) that the
circumstances specified in Section 5.1 or 5.3 hereof that gave rise to the
Conversion of such Lender's Affected Loans pursuant to this Section 5.4 no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Loans of the Affected Type made by other
Lenders are outstanding, such Lender's Base Rate Loans shall be automatically
Converted, on the first day(s) of the next succeeding Interest Period(s) for
such outstanding Loans of the Affected Type, to the extent necessary so that,
after giving effect thereto, all Loans held by the Lenders holding Loans of the
Affected Type and by such Lender are held pro rata (as to principal amounts,
Types, and Interest Periods) in accordance with their respective Revolving
Credit Commitments.
5.5. Compensation. Upon the request of any Lender, the Borrower shall
pay to such Lender such amount or amounts as shall be sufficient (in the
reasonable opinion of such Lender) to compensate it for any loss, cost, or
expense (including loss of anticipated profits) incurred by it as a result of:
(a) any payment, prepayment, or Conversion of a Eurodollar
Rate Loan for any reason (including, without limitation, the
acceleration of the Loans pursuant to Section 10.1) on a date other
than the last day of the Interest Period for such Loan; or
52
(b) any failure by the Borrower for any reason (including,
without limitation, the failure of any condition precedent specified in
Article VI to be satisfied) to borrow, Convert, Continue, or prepay a
Eurodollar Rate Loan on the date for such borrowing, Conversion,
Continuation, or prepayment specified in the relevant notice of
borrowing, prepayment, Continuation, or Conversion under this
Agreement.
5.6. Taxes. (a) Any and all payments by the Borrower to or for the
account of any Lender or the Agent hereunder or under any other Loan Document
shall be made free and clear of and without deduction for any and all present or
future taxes, duties, levies, imposts, deductions, charges or withholdings, and
all liabilities with respect thereto, excluding, in the case of each Lender and
the Agent, taxes imposed on its income, and franchise taxes imposed on it, by
the jurisdiction under the laws of which such Lender (or its Applicable Lending
Office) or the Agent (as the case may be) is organized or any political
subdivision thereof (all such non-excluded taxes, duties, levies, imposts,
deductions, charges, withholdings, and liabilities being hereinafter referred to
as "Taxes"). If the Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable under this Agreement or any other Loan Document
to any Lender or the Agent, (i) the sum payable shall be increased as necessary
so that after making all required deductions (including deductions applicable to
additional sums payable under this Section 5.6) such Lender or the Agent
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions, (iii) the
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law, and (iv) the Borrower
shall furnish to the Agent, at its address referred to in Section 13.2, the
original or a certified copy of a receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any and all present or
future stamp or documentary taxes and any other excise or property taxes or
charges or similar levies which arise from any payment made under this Agreement
or any other Loan Document or from the execution or delivery of, or otherwise
with respect to, this Agreement or any other Loan Document (hereinafter referred
to as "Other Taxes").
(c) The Borrower agrees to indemnify each Lender and the Agent for the
full amount of Taxes and Other Taxes (including, without limitation, any Taxes
or Other Taxes imposed or asserted by any jurisdiction on amounts payable under
this Section 5.6) paid by such Lender or the Agent (as the case may be) and any
liability (including penalties, interest, and expenses) arising therefrom or
with respect thereto.
(d) Each Lender organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Lender listed on the signature pages hereof and on
or prior to the date on which it becomes a Lender in the case of each other
Lender, and from time to time thereafter if requested in writing by the Borrower
or the Agent (but only so long as such Lender remains lawfully able to do so),
shall provide the Borrower and the Agent with (i) Internal Revenue Service Form
1001 or 4224, as appropriate, or any successor form prescribed by the Internal
Revenue Service, certifying that such Lender is entitled to benefits under an
income tax treaty to which the United States is a
53
party which reduces the rate of withholding tax on payments of interest or
certifying that the income receivable pursuant to this Agreement is effectively
connected with the conduct of a trade or business in the United States, (ii)
Internal Revenue Service Form W-8 or W-9, as appropriate, or any successor form
prescribed by the Internal Revenue Service, and (iii) any other form or
certificate required by any taxing authority (including any certificate required
by Sections 871(h) and 881(c) of the Internal Revenue Code), certifying that
such Lender is entitled to an exemption from or a reduced rate of tax on
payments pursuant to this Agreement or any of the other Loan Documents.
(e) For any period with respect to which a Lender has failed to provide
the Borrower and the Agent with the appropriate form pursuant to Section 5.6(d)
(unless such failure is due to a change in treaty, law, or regulation occurring
subsequent to the date on which a form originally was required to be provided),
such Lender shall not be entitled to indemnification under Section 5.6(a) or
5.6(b) with respect to Taxes imposed by the United States; provided, however,
that should a Lender, which is otherwise exempt from or subject to a reduced
rate of withholding tax, become subject to Taxes because of its failure to
deliver a form required hereunder, the Borrower shall take such steps as such
Lender shall reasonably request to assist such Lender to recover such Taxes.
(f) If the Borrower is required to pay additional amounts to or for the
account of any Lender pursuant to this Section 5.6, then such Lender will agree
to use reasonable efforts to change the jurisdiction of its Applicable Lending
Office so as to eliminate or reduce any such additional payment which may
thereafter accrue if such change, in the judgment of such Lender, is not
otherwise disadvantageous to such Lender.
(g) Within thirty (30) days after the date of any payment of Taxes, the
Borrower shall furnish to the Agent the original or a certified copy of a
receipt evidencing such payment.
(h) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 5.6 shall survive the termination of the Revolving Credit
Commitments and the payment in full of the Revolving Notes.
54
ARTICLE VI
Conditions to Making Loans and Issuing Letters of Credit
6.1. Conditions of Initial Advance. The obligation of the Lenders to
make the further Advances under the Revolving Credit Facility, and of the
Issuing Bank to issue any additional Letter of Credit and of NationsBank to make
any Swing Line Loan is subject to the conditions precedent that:
(a) the Agent shall have received on or prior to the date of
the initial Advance, in form and substance satisfactory to the Agent
and Lenders, the following:
(i) executed originals of each of this Agreement,
the Notes, the additional Facility Guaranties, the Security
Instruments, the LC Account Agreement the other Loan
Documents, together with all schedules and exhibits thereto;
(ii) the favorable written opinion or opinions with
respect to the Loan Documents and the transactions
contemplated thereby of special counsel to the Credit Parties
dated the Closing Date, addressed to the Agent and the Lenders
and satisfactory to ▇▇▇▇▇ ▇▇▇▇▇ Mulliss & ▇▇▇▇▇, L.L.P.,
special counsel to the Agent, substantially in the form of
Exhibit G;
(iii) resolutions of the boards of directors or other
appropriate governing body (or of the appropriate committee
thereof) of each Credit Party certified by its secretary or
assistant secretary as of the Closing Date, approving and
adopting the Loan Documents to be executed by such Person, and
authorizing the execution and delivery thereof;
(iv) specimen signatures of officers of each of the
Credit Parties executing the Loan Documents on behalf of such
Credit Party, certified by the secretary or assistant
secretary of such Credit Party;
(v) the Organizational Documents of each of the
Credit Parties certified as of a recent date by the Secretary
of State of its state of organization, or a certification by
the secretary of assistant secretary as to no change since the
date such documents were previously delivered to the Agent;
(vi) Operating Documents of each of the Credit
Parties certified as of the Closing Date as true and correct
by its secretary or assistant secretary, or a certification by
the secretary of assistant secretary as to no change since the
date such documents were previously delivered to the Agent;
55
(vii) certificates issued as of a recent date by the
Secretaries of State of the respective jurisdictions of
formation of each of the Credit Parties as to the due
existence and good standing of such Person;
(viii) appropriate certificates of qualification to
do business, good standing and, where appropriate, authority
to conduct business under assumed name, issued in respect of
each of the Credit Parties as of a recent date by the
Secretary of State or comparable official of each jurisdiction
in which the failure to be qualified to do business or
authorized so to conduct business could have a Material
Adverse Effect;
(ix) notice of appointment of the initial Authorized
Representative(s);
(x) evidence of all insurance required by the Loan
Documents;
(xi) an initial Borrowing Notice, if any, and, if
elected by the Borrower, Interest Rate Selection Notice;
(xii) evidence of the filing of Uniform Commercial
Code financing statements reflecting the filing in all places
required by applicable law to perfect the Liens of the Agent
under the Security Instruments as a first priority Lien as to
items of Collateral in which a security interest may be
perfected by the filing of financing statements, and such
other documents and/or evidence of other actions as may be
necessary under applicable law to perfect the Liens of the
Agent under the Security Instruments as a first priority Lien
in and to such other Collateral as the Agent may require,
including without limitation:
(i) the delivery by the Borrower of all
stock certificates evidencing Pledged Stock and
certificates, if any, evidencing ownership of
Partnership Interests, accompanied in each case by
duly executed stock powers (or other appropriate
transfer documents) in blank affixed thereto; and
(ii) the delivery by the Borrower of
certificates of the Registrar of each partnership
Subsidiary evidencing the due registration on the
registration books of such partnership of the Lien in
favor of the Agent conferred under the Security
Instruments;
(xiii) evidence that all fees payable by the Borrower
on the Closing Date to the Agent and the Lenders have been
paid in full;
56
(xiv) Uniform Commercial Code search results showing
only those Liens as are acceptable to the Lenders;
(xv) evidence of consummation of the Merger
Transaction;
(xvi) true and correct copies of the Merger
Transaction Documents;
(xvii) a true and correct copy of the Registration
Statement which shall have been declared effective by the
Securities and Exchange Commission; and
(xviii) such other documents, instruments, certificates
and opinions as the Agent or any Lender may reasonably request
on or prior to the Closing Date in connection with the
consummation of the transactions contemplated hereby; and
(b) In the good faith judgment of the Agent and the Lenders:
(i) there shall not have occurred or become known to
the Agent or the Lenders any event, condition, situation or
status since the date of the information contained in the
financial and business projections, budgets, pro forma data
and forecasts concerning the Borrower and its Subsidiaries
delivered to the Agent prior to the Closing Date that has had
or could reasonably be expected to result in a Material
Adverse Effect;
(ii) no litigation, action, suit, investigation or
other arbitral, administrative or judicial proceeding shall be
pending or threatened which could reasonably be likely to
result in a Material Adverse Effect; and
(iii) the Credit Parties shall have received all
approvals, consents and waivers, and shall have made or given
all necessary filings and notices as shall be required to
consummate the transactions contemplated hereby without the
occurrence of any default under, conflict with or violation of
(A) any applicable law, rule, regulation, order or decree of
any Governmental Authority or arbitral authority or (B) any
agreement, document or instrument to which any of the Credit
Parties is a party or by which any of them or their properties
is bound, except for such approvals, consents, waivers,
filings and notices the receipt, making or giving of which
will not have a Material Adverse Effect.
6.2. Conditions of Loans and Letter of Credit. The obligations of the
Lenders to
57
make any Revolving Loans, and the Issuing Bank to issue Letters of Credit and
NationsBank to make Swing Line Loans, hereunder on or subsequent to the Closing
Date are subject to the satisfaction of the following conditions:
(a) the Agent or, in the case of Swing Line Loans, NationsBank
shall have received a Borrowing Notice if required by Article II;
(b) the representations and warranties of the Credit Parties
set forth in Article VII and in each of the other Loan Documents shall
be true and correct in all material respects on and as of the date of
such Advance, Swing Line Loan or Letter of Credit issuance or renewal,
with the same effect as though such representations and warranties had
been made on and as of such date, except to the extent that such
representations and warranties expressly relate to an earlier date and
except that the financial statements referred to in Section 7.6(a)(i)
shall be deemed to be those financial statements most recently
delivered to the Agent and the Lenders pursuant to Section 8.1 from the
date financial statements are delivered to the Agent and the Lenders in
accordance with such Section;
(c) in the case of the issuance of a Letter of Credit, the
Borrower shall have executed and delivered to the Issuing Bank an
Application and Agreement for Letter of Credit in form and content
acceptable to the Issuing Bank together with such other instruments and
documents as it shall request;
(d) at the time of (and after giving effect to) each Advance
or Swing Line Loan or the issuance of a Letter of Credit, no Default or
Event of Default specified in Article X shall have occurred and be
continuing; and
(e) immediately after giving effect to:
(i) a Revolving Loan, the aggregate
principal balance of all outstanding Revolving Loans for each
Lender shall not exceed such Lender's Revolving Credit
Commitment;
(ii) a Letter of Credit or renewal thereof,
the aggregate principal balance of all outstanding
Participations in Letters of Credit and Reimbursement
Obligations (or in the case of the Issuing Bank, its remaining
interest after deduction of all Participations in Letters of
Credit and Reimbursement Obligations of other Lenders) for
each Lender and in the aggregate shall not exceed,
respectively, (x) such Lender's Letter of Credit Commitment or
(y) the Total Letter of Credit Commitment;
(iii) a Swing Line Loan, the Swing Line
Outstandings shall not exceed $2,000,000;
(iv) a Revolving Loan, Swing Line Loan or a
Letter of Credit
58
or renewal thereof, the sum of Letter of Credit Outstandings
plus Revolving Credit Outstandings plus Swing Line
Outstandings shall not exceed the Total Revolving Credit
Commitment.
59
ARTICLE VII
Representations and Warranties
Each of the Parent and the Borrower represents and warrants with
respect to itself and to its Subsidiaries (which representations and warranties
shall survive the delivery of the documents mentioned herein and the making of
Loans), that:
7.1. Organization and Authority.
(a) The Parent, the Borrower and each Subsidiary is a
corporation partnership duly organized and validly existing under the
laws of the jurisdiction of its formation;
(b) The Parent, the Borrower and each Subsidiary (i) has the
requisite power and authority to own its properties and assets and to
carry on its business as now being conducted and as contemplated in the
Loan Documents, and (ii) is qualified to do business in every
jurisdiction in which failure so to qualify would have a Material
Adverse Effect;
(c) The Parent and the Borrower have the power and authority
to execute, deliver and perform this Agreement and the Notes, and to
borrow hereunder, and to execute, deliver and perform each of the other
Loan Documents to which they are a party;
(d) Each Credit Party (other than the Parent and the Borrower)
has the power and authority to execute, deliver and perform the
Facility Guaranty and each of the other Loan Documents to which it is a
party; and
(e) When executed and delivered, each of the Loan Documents to
which any Credit Party is a party will be the legal, valid and binding
obligation or agreement, as the case may be, of such Credit Party,
enforceable against such Credit Party in accordance with its terms,
subject to the effect of any applicable bankruptcy, moratorium,
insolvency, reorganization or other similar law affecting the
enforceability of creditors' rights generally and to the effect of
general principles of equity (whether considered in a proceeding at law
or in equity).
7.2. Loan Documents. The execution, delivery and performance by each
Credit Party of each of the Loan Documents to which it is a party:
(a) have been duly authorized by all requisite Organizational
Action of such Credit Party required for the lawful execution, delivery
and performance thereof;
60
(b) do not violate any provisions of (i) applicable law, rule
or regulation, (ii) any judgment, writ, order, determination, decree or
arbitral award of any Governmental Authority or arbitral authority
binding on such Credit Party or its properties, or (iii) the
Organizational Documents or Operating Documents of such Credit Party;
(c) does not and will not be in conflict with, result in a
breach of or constitute an event of default, or an event which, with
notice or lapse of time or both, would constitute an event of default,
under any contract, indenture, agreement or other instrument or
document to which such Credit Party is a party, or by which the
properties or assets of such Credit Party are bound; and
(d) does not and will not result in the creation or imposition
of any Lien upon any of the properties or assets of such Credit Party
or any Subsidiary except any Liens in favor of the Agent and the
Lenders created by the Security Instruments.
7.3. Solvency. Each Credit Party is Solvent after giving effect to the
transactions contemplated by the Loan Documents.
7.4. Subsidiaries and Stockholders. The Parent has no Subsidiaries
other than those Persons listed as Subsidiaries in Schedule 7.4 and additional
Subsidiaries created or acquired after the Closing Date in compliance with
Section 8.20; Schedule 7.4 states as of the date hereof the organizational form
of each entity, the authorized and issued capitalization of each Subsidiary
listed thereon, the number of shares or other equity interests of each class of
capital stock or interest issued and outstanding of each such Subsidiary and the
number and/or percentage of outstanding shares or other equity interest
(including options, warrants and other rights to acquire any interest) of each
such class of capital stock or other equity interest owned by Borrower or by any
such Subsidiary; the outstanding shares or other equity interests of each such
Subsidiary have been duly authorized and validly issued and are fully paid and
nonassessable; and Borrower and each such Subsidiary owns beneficially and of
record all the shares and other interests it is listed as owning in Schedule
7.4, free and clear of any Lien.
7.5. Ownership Interests. The Parent owns no interest in any Person
other than the Persons listed in Schedule 7.4, equity investments in Persons not
constituting Subsidiaries permitted under Section 9.7 and additional
Subsidiaries created or acquired after the Closing Date in compliance with
Section 8.20.
7.6. Financial Condition.
(a) The Borrower has hereto furnished to each Lender (i) a
consolidated balance sheet of the Borrower and its Subsidiaries as at
September 30, 1998 and a statement of income for the period from May 7,
1998 (date of inception) to September 30, 1998, all prepared in
accordance with GAAP applied on a Consistent Basis and containing an
opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP and (ii) an unaudited balance sheet of
the Borrower and its Subsidiaries as
61
at March 31, 1999 and related statement of income for the three month
period then ended. Except as set forth therein, such financial
statements (including the notes thereto) present fairly the financial
condition of the Borrower and its Subsidiaries for such periods and
results of operations for such periods, all in conformity with GAAP
applied on a Consistent Basis, subject in the case of unaudited interim
statements to year end adjustments. Nothing has come to the attention
of the Parent or the Borrower that would lead either of them to believe
that such financial statements or data are not true, accurate and
correct, and to the best of their knowledge the historical pro forma
combined and adjusted pro forma financial data set forth therein
present fairly the financial condition and results of operations of the
Borrower and Parent and Borrower on a combined basis subject to the
adjustments and assumptions described therein.
(b) The Parent has heretofore furnished to each Lender an (i)
audited consolidated balance sheet of the Parent and its Subsidiaries
(other than the Borrower and its Subsidiaries) for its fiscal years
ending August 31, 1994 through 1998 and related statement of income as
examined and certified by Ernst & Young L.L.P. for the years 1994
through 1997 and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, L.L.P. for the fiscal year 1998, and
(ii) an unaudited consolidated balance sheet and consolidated statement
of income for the six month period ending February 28, 1999. Except as
set forth therein, such financial statements (including the notes
thereto) present fairly the financial condition of the Parent and its
Subsidiaries (other than the Borrower and its Subsidiaries) as of the
end of such fiscal years and the three month period and results of
operations for such fiscal years and interim period then ended, all in
conformity with GAAP applied on a Consistent Basis is, subject,
however, in the case of unaudited interim statements to year end
adjustments.
(c) The Parent and the Borrower have furnished to each Lender
a true and correct copy of the Registration Statement containing (i) on
page 8 thereof Summary Unaudited Pro Forma Consolidated Financial Data
FloraFax, (ii) on page 9 thereof Summary Unaudited Pro Forma
Consolidated Financial Data ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, and (ii) on pages PF-1
through PF-13 Pro Forma Consolidated Financial Statements (Unaudited)
for the Parent and the Borrower, including in each case a consolidated
balance sheet at November 30, 1998 or December 31, 1998 and
consolidated statements of operations for the periods described
therein.
(d) Since the later of (i) the date of the financial
statements described in Section 7.6(a) and (b) or (ii) the date of the
audited financial statements most recently delivered pursuant to
Section 8.1(a) hereof, there has been no material adverse change in the
condition, financial or otherwise, of the Parent or any of its
Subsidiaries or in the businesses, properties, performance, prospects
or operations of the Parent or its Subsidiaries, nor have such
businesses or properties been materially adversely affected as a result
of any fire, explosion,
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earthquake, accident, strike, lockout, combination of workers, flood,
embargo or act of God.
(e) Except as set forth in the financial statements referred
to in Section 7.6(a) and (b) or permitted by Section 9.5, neither the
Parent nor any Subsidiary has incurred, other than in the ordinary
course of business, any material Indebtedness, Contingent Obligation or
other commitment or liability which remains outstanding or unsatisfied.
7.7. Title to Properties. The Parent and each of its Subsidiaries has
good and marketable title to all its real and personal properties, subject to no
transfer restrictions or Liens of any kind, except for the transfer restrictions
and Liens described in Schedule 7.7 and Liens permitted by Section 9.4.
7.8. Taxes. Except as set forth in Schedule 7.8, the Parent and each of
its Subsidiaries has filed or caused to be filed all federal, state and local
tax returns which are required to be filed by it and, except for taxes and
assessments being contested in good faith by appropriate proceedings diligently
conducted and against which reserves reflected in the financial statements
described in Section 7.6(a) and satisfactory to the Parent's independent
certified public accountants have been established, have paid or caused to be
paid all taxes as shown on said returns or on any assessment received by it, to
the extent that such taxes have become due.
7.9. Other Agreements. Neither the Parent nor any Subsidiary is
(a) a party to or subject to any judgment, order, decree,
agreement, lease or instrument, or subject to other restrictions, which
individually or in the aggregate could reasonably be expected to have a
Material Adverse Effect; or
(b) in default in the performance, observance or fulfillment
of any of the obligations, covenants or conditions contained in any
agreement or instrument to which the Parent or any Subsidiary is a
party, which default has, or if not remedied within any applicable
grace period could reasonably be likely to have, a Material Adverse
Effect.
7.10. Litigation. Except as set forth in Schedule 7.10, there is no
action, suit, investigation or proceeding at law or in equity or by or before
any governmental instrumentality or agency or arbitral body pending, or, to the
knowledge of the Parent or the Borrower, threatened by or against the Parent or
any Subsidiary or affecting the Parent or any Subsidiary or any properties or
rights of the Parent or any Subsidiary, which could reasonably be likely to have
a Material Adverse Effect.
7.11. Margin Stock. The proceeds of the borrowings made hereunder will
be used by the Borrower only for the purposes expressly authorized herein. None
of such proceeds will be used, directly or indirectly, for the purpose of
purchasing or carrying any margin stock or
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for the purpose of reducing or retiring any Indebtedness which was originally
incurred to purchase or carry margin stock or for any other purpose which might
constitute any of the Loans under this Agreement a "purpose credit" within the
meaning of said Regulation U or Regulation X (12 C.F.R. Part 224) of the Board.
Neither the Borrower nor any agent acting in its behalf has taken or will take
any action which might cause this Agreement or any of the documents or
instruments delivered pursuant hereto to violate any regulation of the Board or
to violate the Securities Exchange Act of 1934, as amended, or the Securities
Act of 1933, as amended, or any state securities laws, in each case as in effect
on the date hereof.
7.12. Investment Company. No Credit Party is an "investment company,"
or an "affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company", as such terms are defined in the Investment Company Act of
1940, as amended (15 U.S.C. ss. 80a-1, et seq.). The application of the proceeds
of the Loans and repayment thereof by the Borrower and the performance by the
Borrower and the other Credit Parties of the transactions contemplated by the
Loan Documents will not violate any provision of said Act, or any rule,
regulation or order issued by the Securities and Exchange Commission thereunder,
in each case as in effect on the date hereof.
7.13. Patents, Etc. The Parent and each Subsidiary owns or has the
right to use, under valid license agreements or otherwise, all material patents,
licenses, franchises, trademarks, trademark rights, trade names, trade name
rights, trade secrets and copyrights necessary to or used in the conduct of its
businesses as now conducted and as contemplated by the Loan Documents, without
known conflict with any patent, license, franchise, trademark, trade secret,
trade name, copyright, other proprietary right of any other Person.
7.14. No Untrue Statement. Neither (a) this Agreement nor any other
Loan Document or certificate or document executed and delivered by or on behalf
of the Parent, the Borrower or any other Credit Party in accordance with or
pursuant to any Loan Document nor (b) any statement, representation, or warranty
provided to the Agent in connection with the negotiation or preparation of the
Loan Documents contains any misrepresentation or untrue statement of material
fact or omits to state a material fact necessary, in light of the circumstance
under which it was made, in order to make any such warranty, representation or
statement contained therein not misleading.
7.15. No Consents, Etc. Neither the respective businesses or properties
of the Parent or any Subsidiary, nor any relationship among the Parent or any
Subsidiary and any other Person, nor any circumstance in connection with the
execution, delivery and performance of the Loan Documents and the transactions
contemplated thereby, is such as to require a consent, approval or authorization
of, or filing, registration or qualification with, any Governmental Authority or
any other Person on the part of any Credit Party as a condition to the
execution, delivery and performance of, or consummation of the transactions
contemplated by the Loan Documents, which, if not obtained or effected, would be
reasonably likely to have a Material Adverse Effect, or if so, such consent,
approval, authorization, filing, registration or qualification has been duly
obtained or effected, as the case may be.
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7.16. Employee Benefit Plans.
(a) The Parent and each ERISA Affiliate is in compliance with
all applicable provisions of ERISA and the regulations and published
interpretations thereunder and in compliance with all Foreign Benefit
Laws with respect to all Employee Benefit Plans except for any required
amendments for which the remedial amendment period as defined in
Section 401(b) of the Code has not yet expired. Each Employee Benefit
Plan that is intended to be qualified under Section 401(a) or Section
408 of the Code has been determined by the Internal Revenue Service to
be so qualified, and each trust related to such plan has been
determined to be exempt under Section 501(a) of the Code or, for any
Employee Benefit Plan that utilizes a standardized prototype plan
document, that the plan sponsor has received an opinion letter from the
Internal Revenue Service. No material liability has been incurred by
the Parent or any ERISA Affiliate which remains unsatisfied for any
taxes or penalties with respect to any Employee Benefit Plan or any
Multiemployer Plan;
(b) Neither the Parent nor any ERISA Affiliate has (i) engaged
in a nonexempt prohibited transaction described in Section 4975 of the
Code or Section 406 of ERISA affecting any of the Employee Benefit
Plans or the trusts created thereunder which could subject any such
Employee Benefit Plan or trust to a material tax or penalty on
prohibited transactions imposed under Internal Revenue Code Section
4975 or ERISA, (ii) incurred any accumulated funding deficiency with
respect to any Employee Benefit Plan, whether or not waived, or any
other liability to the PBGC which remains outstanding other than the
payment of premiums and there are no premium payments which are due and
unpaid, (iii) failed to make a required contribution or payment to a
Multiemployer Plan, or (iv) failed to make a required installment or
other required payment under Section 412 of the Code, Section 302 of
ERISA or the terms of such Employee Benefit Plan;
(c) No Termination Event (except the voluntary termination of
a Pension Plan by the Parent or the filing of a notice of intent to
voluntarily terminate a Pension Plan) has occurred or is reasonably
expected to occur with respect to any Pension Plan or Multiemployer
Plan, and neither the Parent nor any ERISA Affiliate has incurred any
unpaid withdrawal liability with respect to any Multiemployer Plan;
(d) To the best of the Parent's knowledge, the present value
of all vested accrued benefits under each Employee Benefit Plan which
is subject to Title IV of ERISA, did not, as of the most recent
valuation date for each such plan, exceed the then current value of the
assets of such Employee Benefit Plan allocable to such benefits by an
amount that has had or could reasonably be expected to result in a
Material Adverse Effect;
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(e) To the best of the Parent's knowledge, each Employee
Benefit Plan subject to Title IV of ERISA, maintained by the Parent or
any ERISA Affiliate, has been adminis tered in accordance with its
terms in all material respects and is in compliance in all material
respects with all applicable requirements of ERISA and other applicable
laws, regulations and rules;
(f) The consummation of the Loans and the issuance of the
Letters of Credit provided for herein will not involve any prohibited
transaction under ERISA which is not subject to a statutory or
administrative exemption; and
(g) No material proceeding, claim, lawsuit and/or
investigation exists or, to the best knowledge of the Parent or the
Borrower after due inquiry, is threatened concerning or involving any
Employee Benefit Plan.
7.17. No Default. As of the date hereof, there does not exist any
Default or Event of Default hereunder.
7.18. Environmental Laws. Except as listed on Schedule 7.18, the Parent
and each Subsidiary is in compliance in all material respects with all
applicable Environmental Laws and has been issued and currently maintains all
required federal, state and local permits, licenses, certificates and approvals.
Except as listed on Schedule 7.18, neither the Parent nor any Subsidiary has
been notified in writing of any pending or threatened action, suit, proceeding
or investigation, and neither the Parent nor any Subsidiary has knowledge of any
facts, which (a) indicate non-compliance by the Parent or any Subsidiary with
any Environmental Laws, (b) seeks, or could reasonably be expected to form the
basis of a meritorious proceeding, to suspend, revoke or terminate any license,
permit or approval necessary for the operation of the Parent's or any
Subsidiary's business or facilities or for the generation, handling, storage,
treatment or disposal of any Hazardous Materials, or (c) seeks to cause, or
could reasonably be expected to form the basis of a meritorious proceeding to
cause, any property of the Parent or any Subsidiary to be subject to any
restrictions on ownership, use, occupancy or transferability under any
Environmental Law.
7.19. Employment Matters. (a) None of the employees of the Parent or
any Subsidiary is subject to any collective bargaining agreement and there are
no strikes, work stoppages, election or decertification petitions or
proceedings, unfair labor charges, equal opportunity proceedings, or other
material labor/employee related controversies or proceedings pending or, to the
best knowledge of the Parent and the Borrower, threatened against the Parent or
any Subsidiary or between the Parent or any Subsidiary and any of its employees,
other than employee grievances arising in the ordinary course of business which
could not reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect; and
(b) Except to the extent a failure to maintain compliance would not
have a Material Adverse Effect, the Parent and each Subsidiary is in compliance
in all respects with all applicable laws, rules and regulations pertaining to
labor or employment matters, including
66
without limitation those pertaining to wages, hours, occupational safety and
taxation and there is neither pending or threatened any litigation,
administrative proceeding nor, to the knowledge of the Borrower, any
investigation, in respect of such matters which, if decided adversely, could
reasonably be likely, individually or in the aggregate, to have a Material
Adverse Effect.
7.20. RICO. Neither the Parent nor any Subsidiary is engaged in or has
engaged in any course of conduct that could subject any of their respective
properties to any Lien, seizure or other forfeiture under any criminal law,
racketeer influenced and corrupt organizations law, civil or criminal, or other
similar laws.
7.21. Year 2000 Compliance. The Parent and its Subsidiaries have (i)
initiated a review and assessment of all areas within its and each of its
Subsidiaries' business and operations (including those affected by information
received from suppliers and vendors) that could reasonably be expected to be
adversely affected by the Year 2000 Problem, (ii) developed a plan and time line
for addressing the Year 2000 Problem on a timely basis, and (iii) are
implementing that plan substantially in accordance with that timetable. The
Parent and the Borrower reasonably believes that all computer applications
(including those affected by information received from its suppliers and
vendors) that are material to its or any of its Subsidiaries' business and
operations will on a timely basis be Year 2000 Compliant, except to the extent
that a failure to do so could not reasonably be expected to have Material
Adverse Effect.
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ARTICLE VIII
Affirmative Covenants
Until the Facility Termination Date, unless the Required Lenders shall
otherwise consent in writing, each of the Parent and the Borrower will, and
where applicable will cause each Subsidiary to:
8.1. Financial Reports, Etc. (a) As soon as practical and in any event
within 90 days after the end of each Fiscal Year of the Parent, deliver or cause
to be delivered to the Agent and each Lender (i) consolidated and consolidating
balance sheets of the Parent and its Subsidiaries as at the end of such Fiscal
Year, and the notes thereto, and the related consolidated and consolidating
statements of income, stockholders' equity and cash flows, and the respective
notes thereto, for such Fiscal Year, setting forth (other than for consolidating
statements) comparative financial statements for the preceding Fiscal Year, all
prepared in accordance with GAAP applied on a Consistent Basis and containing,
with respect to the consolidated financial statements, opinions of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP, or other such independent certified public accountants selected by
the Parent and approved by the Agent, which are unqualified as to the scope of
the audit performed and as to the "going concern" status of the Borrower and
without any exception not acceptable to the Lenders, and (ii) a certificate of
an Authorized Representative demonstrating compliance with Sections 9.1(a)
through 9.1(d), which certificate shall be in the form of Exhibit H;
(b) as soon as practical and in any event within 45 days after the end
of each fiscal quarter (except the last fiscal quarter of the Fiscal Year),
deliver to the Agent and each Lender (i) consolidated and consolidating balance
sheets of the Parent and its Subsidiaries as at the end of such fiscal quarter,
and the related consolidated and consolidating statements of income,
stockholders' equity and cash flows for such fiscal quarter and for the period
from the beginning of the then current Fiscal Year through the end of such
reporting period, and accompanied by a certificate of an Authorized
Representative to the effect that such financial statements present fairly the
financial position of the Parent and its Subsidiaries as of the end of such
fiscal period and the results of their operations and the changes in their
financial position for such fiscal period, and were prepared in accordance with
GAAP applied on a Consistent Basis, and (ii) a certificate of an Authorized
Representative containing computations for such quarter comparable to that
required pursuant to Section 8.1(a)(ii);
(c) together with each delivery of the financial statements required by
Section 8.1(a)(i), deliver to the Agent and each Lender a letter from the
Parent's accountants specified in Section 8.1(a)(i) stating that in performing
the audit necessary to render an opinion on the financial statements delivered
under Section 8.1(a)(i), they obtained no knowledge of any Default or Event of
Default by the Parent in the fulfillment of the terms and provisions of this
Agreement insofar as they relate to financial matters (which at the date of such
statement remains uncured); or if the accountants have obtained knowledge of
such Default or Event of Default, a statement specifying the nature and period
of existence thereof;
(d) promptly upon their becoming available to the Parent, the Parent
shall deliver to
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the Agent and each Lender a copy of (i) all regular or special reports or
effective registration statements which Parent or any Subsidiary shall file with
the Securities and Exchange Commission (or any successor thereto) or any
securities exchange, (ii) any proxy statement distributed by the Parent or any
Subsidiary to its shareholders, bondholders or the financial community in
general, and (iii) any management letter or other report submitted to the Parent
or any Subsidiary by independent accountants in connection with any annual,
interim or special audit of the Borrower or any Subsidiary; and
(e) not later than 30 days after the last Business Day of each Fiscal
Year, deliver to the Agent and each Lender a capital and operating expense
budget and consolidated financial projections for the Parent and its
Subsidiaries for the next Fiscal Year, prepared in accordance with GAAP applied
on a Consistent Basis;
(f) if requested by the Agent as soon as practicable and in any event
within 45 days following the end of a fiscal quarter, deliver to the Agent and
each Lender an accounts receivable aging report in form and detail substantially
similar to that furnished to the Agent prior to the Closing Date;
(g) promptly, from time to time, deliver or cause to be delivered to
the Agent and each Lender such other information regarding Parent's and any
Subsidiary's operations, business affairs and financial condition as the Agent
or such Lender may reasonably request;
The Agent and the Lenders are hereby authorized to deliver a copy of
any such financial or other information delivered hereunder to the Lenders (or
any affiliate of any Lender) or to the Agent, to any Governmental Authority
having jurisdiction over the Agent or any of the Lenders pursuant to any written
request therefor or in the ordinary course of examination of loan files, or to
any other Person who shall acquire or consider the assignment of, or acquisition
of any participation interest in, any Obligation permitted by this Agreement.
8.2. Maintain Properties. Maintain all properties necessary to its
operations in good working order and condition, subject to ordinary wear and
tear and obsolescence, make all needed repairs, replacements and renewals to
such properties, and maintain free from Liens all trademarks, trade names,
patents, copyrights, trade secrets, know-how, and other intellectual property
and proprietary information (or adequate licenses thereto), in each case as are
reasonably necessary to conduct its business as currently conducted or as
contemplated hereby, all in accordance with customary and prudent business
practices.
8.3. Existence, Qualification, Etc. Except as otherwise expressly
permitted under Section 9.8, do or cause to be done all things necessary to
preserve and keep in full force and effect its existence and all material rights
and franchises, and maintain its license or qualification to do business as a
foreign corporation and good standing in each jurisdiction in which its
ownership or lease of property or the nature of its business makes such license
or qualification necessary.
8.4. Regulations and Taxes. Comply in all material respects with or
contest in good faith all statutes and governmental regulations and pay all
taxes, assessments, governmental
69
charges, claims for labor, supplies, rent and any other obligation which, if
unpaid, would become a Lien against any of its properties except liabilities
being contested in good faith by appropriate proceedings diligently conducted
and against which adequate reserves acceptable to the Parent's independent
certified public accountants have been established unless and until any Lien
resulting therefrom attaches to any of its property and becomes enforceable
against its creditors.
8.5. Insurance. (a) Keep all of its insurable properties adequately
insured at all times with responsible insurance carriers against loss or damage
by fire and other hazards to the extent and in the manner as are customarily
insured against by similar businesses owning such properties similarly situated
and otherwise as required by the Security Instruments, (b) maintain general
public liability insurance at all times with responsible insurance carriers
against liability on account of damage to persons and property and (c) maintain
insurance under all applicable workers' compensation laws (or in the
alternative, maintain required reserves if self-insured for workers'
compensation purposes) and against loss by reason of business interruption such
policies of insurance to have such limits, deductibles, exclusions, co-insurance
and other provisions providing no less coverages than that specified in Schedule
8.5, such insurance policies to be in form reasonably satisfactory to the Agent.
Each of the policies of insurance described in this Section 8.5 shall provide
that the insurer shall give the Agent not less than thirty (30) days' prior
written notice before any such policy shall be terminated, lapse or be altered
in any manner.
8.6. True Books. Keep true books of record and account in which full,
true and correct entries will be made of all of its dealings and transactions,
and set up on its books such reserves as may be required by GAAP with respect to
doubtful accounts and all taxes, assessments, charges, levies and claims and
with respect to its business in general, and include such reserves in interim as
well as year-end financial statements.
8.7. Year 2000 Compliance. Promptly notify the Agent and the Lenders in
the event it discovers or determines that any computer application (including
those affected by information received from its suppliers and vendors) that is
material to its or any of its Subsidiaries' business and operations will not be
Year 2000 Compliant on a timely basis, except to the extent that such failure
could not reasonably be expected to have a Material Adverse Effect.
8.8. Right of Inspection. Permit any Person designated by any Lender or
the Agent at its expense to visit and inspect any of the properties, corporate
books and financial reports of the Parent or any Subsidiary and to discuss its
affairs, finances and accounts with its principal officers and independent
certified public accountants, all at reasonable times, at reasonable intervals
and with reasonable prior notice.
8.9. Observe all Laws. Conform to and duly observe in all material
respects all laws, rules and regulations and all other valid requirements of any
Governmental Authority with respect to the conduct of its business.
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8.10. Governmental Licenses. Obtain and maintain all licenses, permits,
certifications and approvals of all applicable Governmental Authorities as are
required for the conduct of its business as currently conducted and as
contemplated by the Loan Documents the failure of which to obtain or maintain
would have a Material Adverse Effect.
8.11. Covenants Extending to Other Persons. Cause each of its
Subsidiaries to do with respect to itself, its business and its assets, each of
the things required of the Parent and the Borrower in Sections 8.2 through 8.10,
and 8.20 inclusive.
8.12. Officer's Knowledge of Default. Upon any officer of the Parent or
the Borrower obtaining knowledge of any Default or Event of Default hereunder or
under any other obligation of the Parent, the Borrower or any Subsidiary to any
Lender, or any event, development or occurrence which could reasonably be
expected to have a Material Adverse Effect, cause such officer or an Authorized
Representative to promptly notify the Agent of the nature thereof, the period of
existence thereof, and what action the Parent, the Borrower or such Subsidiary
proposes to take with respect thereto.
8.13. Suits or Other Proceedings. Upon any officer of the Parent or the
Borrower obtaining knowledge of any litigation or other proceedings being
instituted against the Parent or the Borrower or any Subsidiary or other Credit
Party, or any attachment, levy, execution or other process being instituted
against any assets of the Parent or the Borrower or any Subsidiary, making a
claim or claims in an aggregate amount greater than $100,000 not otherwise
covered by insurance, promptly deliver to the Agent written notice thereof
stating the nature and status of such litigation, dispute, proceeding, levy,
execution or other process.
8.14. Notice of Environmental Complaint or Condition. Promptly provide
to the Agent true, accurate and complete copies of any and all written notices,
complaints, orders, directives, claims or citations received by it or any
Subsidiary relating to any (a) violation or alleged violation by it or any
Subsidiary of any applicable Environmental Law; (b) release or threatened
release by it or any Subsidiary, or by any Person handling, transporting or
disposing of any Hazardous Material on behalf of it or any Subsidiary, or at any
facility or property owned or leased or operated by it or any Subsidiary, of any
Hazardous Material, except where occurring legally pursuant to a permit or
license; or (c) liability or alleged liability of it or any Subsidiary for the
costs of cleaning up, removing, remediating or responding to a release of
Hazardous Materials.
8.15. Environmental Compliance. If it or any Subsidiary shall receive
any letter, written notice, complaint, order, directive, claim or citation
alleging that it or any Subsidiary has violated any Environmental Law, has
released any Hazardous Material, or is liable for the costs of cleaning up,
removing, remediating or responding to a release of Hazardous Materials, it and
any Subsidiary shall, within the time period permitted and to the extent
required by the applicable Environmental Law or the Governmental Authority
responsible for enforcing such Environmental Law, remove or remedy, or cause the
applicable Subsidiary to remove or remedy, such violation or release or satisfy
such liability.
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8.16. Indemnification. Without limiting the generality of Section 13.9,
the Parent and the Borrower hereby agree to indemnify and hold the Agent and the
Lenders, and their respective officers, directors, employees and agents,
harmless from and against any and all claims, losses, penalties, liabilities,
damages and expenses (including assessment and cleanup costs and reasonable
attorneys', consultants' or other expert fees, expenses and disbursements)
arising directly or indirectly from, out of or by reason of (a) the violation of
any Environmental Law by the Parent, the Borrower or any Subsidiary or with
respect to any property owned, operated or leased by the Parent, the Borrower or
any Subsidiary or (b) the handling, storage, transportation, treatment,
emission, release, discharge or disposal of any Hazardous Materials by or on
behalf of the Parent, the Borrower or any Subsidiary, or on or with respect to
property owned or leased or operated by the Parent, the Borrower or any
Subsidiary. The provisions of this Section 8.16 shall survive repayment of the
Facility Termination Date and expiration or termination of this Agreement.
8.17. Further Assurances. At it's cost and expense, upon request of the
Agent, duly execute and deliver or cause to be duly executed and delivered, to
the Agent such further instruments, documents, certificates, financing and
continuation statements, and do and cause to be done such further acts that may
be reasonably necessary or advisable in the reasonable opinion of the Agent to
carry out more effectively the provisions and purposes of this Agreement, the
Security Instruments and the other Loan Documents.
8.18. Employee Benefit Plans.
(a) With reasonable promptness, and in any event within thirty
(30) days thereof, give notice to the Agent of (a) the establishment of
any new Pension Plan (which notice shall include a copy of such plan),
(b) the commencement of contributions to any Employee Benefit Plan in a
material amount to which the Parent or any of its ERISA Affiliates was
not previously contributing, (c) any material increase in the benefits
of any existing Employee Benefit Plan, (d) each funding waiver request
filed with respect to any Pension Plan and all communications received
or sent by the Parent or any ERISA Affiliate with respect to such
request and (e) the failure of the Parent or any ERISA Affiliate to
make a required installment or payment under Section 302 of ERISA or
Section 412 of the Code by the due date;
(b) Promptly and in any event within thirty (30) days of
becoming aware of the occurrence or forthcoming occurrence of any (a)
Termination Event or (b) nonexempt "prohibited transaction," as such
term is defined in Section 406 of ERISA or Section 4975 of the Code, in
connection with any Pension Plan or any trust created thereunder,
deliver to the Agent a notice specifying the nature thereof, what
action the Parent or any ERISA Affiliate has taken, is taking or
proposes to take with respect thereto and, when known, any action taken
or threatened by the Internal Revenue Service, the Department of Labor
or the PBGC with respect thereto; and
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(c) With reasonable promptness but in any event within thirty
(30) days for purposes of clauses (a), (b) and (c), deliver to the
Agent copies of (a) any unfavorable determination letter from the
Internal Revenue Service regarding the qualification of an Employee
Benefit Plan under Section 401(a) of the Code, (b) all notices received
by the Parent or any ERISA Affiliate of the PBGC's intent to terminate
any Pension Plan or to have a trustee appointed to administer any
Pension Plans and (c) all notices received by the Parent or any ERISA
Affiliate from a Multiemployer Plan sponsor concerning the imposition
or amount of withdrawal liability pursuant to Section 4202 of ERISA.
The Parent will notify the Agent in writing within fifteen (15)
Business Days of the Parent or any ERISA Affiliate obtaining knowledge
or reason to know that the Parent or any ERISA Affiliate has filed or
intends to file a notice of intent to terminate any Pension Plan under
a distress termination within the meaning of Section 4041(c) of ERISA.
8.19. Continued Operations. Continue at all times to conduct its
business and engage principally in the same line or lines of business
substantially as heretofore conducted.
8.20. New Subsidiaries. Not later than sixty (60) days following the
acquisition or creation of any Subsidiary cause to be delivered to the Agent for
the benefit of the Lenders each of the following:
(a) a Facility Guaranty executed by such Subsidiary
substantially in the form of Exhibit I;
(b) a Security Agreement of such Subsidiary substantially in
the form of Exhibit J, together with such Uniform Commercial Code
financing statements on Form UCC-1 or otherwise duly executed by such
Subsidiary as "Debtor" and naming the Agent for the benefit of the
Agent and the Lenders as "Secured Party", in form, substance and number
sufficient in the reasonable opinion of the Agent and its special
counsel to be filed in all Uniform Commercial Code filing offices in
all jurisdictions in which filing is necessary or advisable to perfect
in favor of the Agent for the benefit of the Agent and the Lenders the
Lien on Collateral conferred under such Security Instrument to the
extent such Lien may be perfected by Uniform Commercial Code filing;
(c) if the Subsidiary Securities issued by such Subsidiary
that are, or are required to become, Pledged Interests, shall be owned
by a Subsidiary who has not then executed and delivered to the Agent a
Pledge Agreement granting a Lien to the Agent, for the benefit of the
Agent and the Lenders, in such equity interests, a Pledge Agreement
executed by the Subsidiary that directly owns such Subsidiary
Securities substantially in the form attached hereto as Exhibit K, and
if such Subsidiary Securities shall be owned by the Borrower or a
Subsidiary who has previously executed a Pledge Agreement, a Pledge
Agreement Supplement in the form required by such Pledge Agreement
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pertaining to such Subsidiary Securities;
(d) if the Pledged Interests issued by such Subsidiary
constitute securities under Article 8 of the Uniform Commercial Code
(i) the certificates representing 100% of such Subsidiary Securities
and (ii) duly executed, undated stock powers or other appropriate
powers of assignment in blank affixed thereto;
(e) if the Pledged Interests issued by such Subsidiary do not
constitute securities and such Subsidiary has not elected to have such
interests treated as securities under Article 8 of the applicable
Uniform Commercial Code, (i) Uniform Commercial Code financing
statements on form UCC-1 or otherwise duly executed by the pledgor as
"Debtor" and naming the Agent for the benefit of the Agent and the
Lenders as "Secured Party," in form, substance and number sufficient in
the reasonable opinion of the Agent and its special counsel to be filed
in all Uniform Commercial Code filing offices and in all jurisdictions
in which filing is necessary or advisable to perfect in favor of the
Agent for the benefit of the Agent and the Lenders the Lien on such
Subsidiary Securities and (B) a control agreement from the Registrar of
such Subsidiary, in form and substance acceptable to the Agent and in
which the Registrar (1) acknowledges that the pledgor is at the date of
such acknowledgment the sole record, and to its knowledge, beneficial
owner of such Subsidiary Securities, (2) acknowledges the Lien in favor
of the Agent conferred under the Pledge Agreement and that such Lien
will be reflected on the registry for such Subsidiary Securities, (3)
agrees that it will not register any transfer of such Subsidiary
Securities nor acknowledge any Lien in favor of any other Person on
such Subsidiary Securities, without the prior written consent of the
Agent, in each instance, until it receives notice from the Agent that
all Liens on such Collateral in favor of the Agent for the benefit of
the Agent and the Lenders have been released or terminated, and (4)
agrees that upon receipt of notice from the Agent that an Event of
Default has occurred and is continuing and that the Subsidiary
Securities identified in such notice have been transferred to a
transferee identified in such notice, it will duly record such transfer
of Subsidiary Securities on the appropriate registry without requiring
further consent from the pledgor and shall thereafter treat the
transferee as the sole record and beneficial owner of such Subsidiary
Securities pending further transfer, notwithstanding any contrary
instruction received from the pledgor;
(f) an opinion of counsel to the Subsidiary dated as of the
date of delivery of the Facility Guaranty and other Loan Documents
provided for in this Section 8.20 and addressed to the Agent and the
Lenders, in form and substance reasonably acceptable to the Agent
(which opinion may include assumptions and qualifications of similar
effect to those contained in the opinions of counsel delivered pursuant
to Section 6.1(a)), to the effect that:
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(i) such Subsidiary is duly organized, validly
existing and in good standing in the jurisdiction of its
formation, has the requisite power and authority to own its
properties and conduct its business as then owned and then
conducted and proposed to be conducted and to execute, deliver
and perform the Facility Guaranty and other Loan Documents
described in this Section 8.20 to which such Subsidiary is a
signatory, and is duly qualified to transact business and is
in good standing as a foreign corporation or partnership in
each other jurisdiction in which the character of the
properties owned or leased, or the business carried on by it,
requires such qualification and the failure to be so qualified
would reasonably be likely to result in a Material Adverse
Effect;
(ii) the execution, delivery and performance of the
Facility Guaranty and other Loan Documents described in this
Section 8.20 to which such Subsidiary is a signatory have been
duly authorized by all requisite corporate or partnership
action (including any required shareholder or partner
approval), each of such agreements has been duly executed and
delivered and constitutes the valid and binding agreement of
such Subsidiary, enforceable against such Subsidiary in
accordance with its terms, subject to the effect of any
applicable bankruptcy, moratorium, insolvency, reorganization
or other similar law affecting the enforceability of
creditors' rights generally and to the effect of general
principles of equity (whether considered in a proceeding at
law or in equity);
(iii) the Subsidiary Securities of such Subsidiary
are duly authorized, validly issued, fully paid and
nonassessable, and free of any preemptive rights, and the
applicable Security Instrument is effective to create a valid
security interest in favor of the Agent for the benefit of the
Agent and the Lenders in such Subsidiary Securities as
constitute Pledged Interests; and
(iv) the Uniform Commercial Code financing statements
on Form UCC- 1 delivered to the Agent by the Subsidiary in
connection with the delivery of the Security Instruments of
such Subsidiary have been duly executed by the Subsidiary and,
if requested by the Agent, an opinion to the effect that are
in form, substance and number sufficient for filing in all
Uniform Commercial Code filing offices in all jurisdictions in
which filing is necessary to perfect in favor of the Agent for
the benefit of the Agent and the Lenders the Lien on
Collateral conferred under such Security Instruments to the
extent such Lien may be perfected by Uniform Commercial Code
filing.
(h) current copies of the Organizational Documents and
Operating Documents of such Subsidiary, minutes of duly called and
conducted meetings
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(or duly effected consent actions) of the Board of Directors, partners,
or appropriate committees thereof (and, if required by such
Organizational Documents, Operating Documents or applicable law, of the
shareholders, members or partners) of such Subsidiary authorizing the
actions and the execution and delivery of documents described in this
Section 8.20.
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ARTICLE IX
Negative Covenants
Until the Obligations have been paid and satisfied in full, no Letters
of Credit remain outstanding and this Agreement has been terminated in
accordance with the terms hereof, unless the Required Lenders shall otherwise
consent in writing, the Parent and the Borrower will not, nor will they permit
any Subsidiary to:
9.1. Financial Covenants.
(a) Consolidated Shareholders' Equity. Permit Consolidated
Shareholders' Equity to be less than (i) 85% of Shareholders' Equity as at the
end of the fiscal quarter preceding Closing Date and (ii) as at the last day of
each succeeding fiscal quarter of the Borrower and until (but excluding) the
last day of the next following fiscal quarter of the Borrower, the sum of (A)
the amount of Consolidated Net Worth required to be maintained pursuant to this
Section 9.1(a) as at the end of the immediately preceding fiscal quarter, plus
(B) 75% of Consolidated Net Income (with no reduction for net losses during any
period) for the fiscal quarter of the Borrower ending on such day (including
within "Consolidated Net Income" certain items otherwise excluded, as provided
for in the definition of "Consolidated Net Income"), plus (C) 100% of the
aggregate amount of all increases in the stated capital and additional paid-in
capital accounts of the Borrower resulting from the issuance of equity
securities or other capital investments.
(b) Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio
as of the end of any Four-Quarter Period ending on or prior to August 31, 1999
to be greater than 3.00 to 1.00 and at the end of any Four-Quarter Period
thereafter to be greater than 2.75 to 1.00.
(c) Consolidated Fixed Charge Ratio. Permit at any time the
Consolidated Fixed Charge Ratio to be less than (i) 1.10 to 1.00 for the periods
ending prior to December 31, 2000 and (ii) 1.25 to 1.00 thereafter.
(d) Consolidated Total Capitalization. Permit at any time the ratio of
Consolidated Indebtedness to Consolidated Total Capitalization to be greater
than .50 to 1.00.
(e) Capital Expenditures. Make or become committed to make Capital
Expenditures (on a limited noncumulative basis, with the effect that amounts not
expended in excess of $5,000,000 may not be carried forward to a subsequent
period) which exceed in the aggregate in any Fiscal Year of the Parent preceding
the occurrence of an Equity Event, twenty percent (20%) of Consolidated
Shareholders Equity, and after the occurrence of an Equity Event, in any Fiscal
Year of the Parent, the amount set forth opposite each such period:
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Capital Expenditures
Fiscal Year Ending: Not to Exceed:
------------------- --------------------
1999 $22,000,000
2000 $42,000,000
2001 $50,000,000
2002 $52,000,000
9.2. Acquisitions. Make or consummate any Acquisition, or take any
action to solicit the tender of securities or proxies in respect thereof in
order to effect any Acquisition, unless (i) the Person to be (or whose assets
are to be) acquired does not oppose such Acquisition and the line or lines of
business of the Person to be acquired are substantially the same as one or more
line or lines of business of the Borrower and its Subsidiaries described in the
Private Placement Memorandum, (ii) no Default or Event of Default shall have
occurred and be continuing either immediately prior to or immediately after
giving effect to such Acquisition, (iii) the Person acquired shall be a
wholly-owned Subsidiary, or be merged into the Parent or a wholly-owned
Subsidiary, immediately upon consummation of the Acquisition (or if assets are
being acquired, the acquiror shall be the Parent or a wholly-owned Subsidiary),
(iv) the Parent shall have furnished to the Agent (A) pro forma historical
financial statements as of the end of the most recently completed Fiscal Year of
the Parent and most recent interim fiscal quarter, if applicable giving effect
to such Acquisition, (B) a certificate in the form of Exhibit I prepared on a
historical pro forma basis giving effect to such Acquisition, which certificate
shall demonstrate that no Default or Event of Default would exist immediately
after giving effect thereto and (C) financial statements of the acquired Person
or entity for not less than the most recent three years, the most recent of
which shall be audited if required under Regulation SX of the Securities Act of
1933, as amended, (v) at least 35% of the Cost of Acquisition shall be paid in
the form of common stock of the Parent, (vi) the proceeds of Loans used to pay
the Cost of Acquisition shall not exceed three (3) times the consolidated EBITDA
of the acquired Person or assets for the preceding 12 calendar months
(determined in the same manner as set forth in the definition of "Consolidated
EBITDA") but for the acquired Person or assets), and (vii) the Required Lenders
shall consent to such Acquisition in their discretion; provided, however, that
the conditions set forth in clauses (iv), (v), (vi) and (vii) of this Section
9.2 shall not apply in the case of an Acquisition where either (x), prior to the
occurrence of the Equity Event the Consolidated Leverage Ratio is equal to or
less than 1.50 to 1.00 before and after giving effect to such Acquisition, and
after the Equity Event is equal to or less than 2.00 to 1.00, or (y) the cash
portion of the Cost of Acquisition is not greater than $3,000,000.
9.3. Ownership. Permit the Parent to own less than 100% of the capital
stock of the Borrower.
9.4. Liens. Incur, create or permit to exist any Lien, charge or other
encumbrance of any nature whatsoever with respect to any property or assets now
owned or hereafter acquired by the Parent or any Subsidiary, other than
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(a) Liens created under the Security Instruments in favor of
the Agent and the Lenders, and otherwise existing as of the date hereof
and as set forth in Schedule 7.7;
(b) Liens imposed by law for taxes, assessments or charges of
any Governmental Authority for claims not yet due or which are being
contested in good faith by appropriate proceedings diligently conducted
and with respect to which adequate reserves or other appropriate
provisions are being maintained in accordance with GAAP and which Liens
are not yet enforceable against other creditors;
(c) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other Liens imposed by law or
created in the ordinary course of business and in existence less than
90 days from the date of creation thereof for amounts not yet due or
which are being contested in good faith by appropriate proceedings
diligently conducted and with respect to which adequate reserves or
other appropriate provisions are being maintained in accordance with
GAAP and which Liens are not yet enforceable against other creditors;
(d) Liens incurred or deposits made in the ordinary course of
business (including, without limitation, surety bonds and appeal bonds)
in connection with workers' compensation, unemployment insurance and
other types of social security benefits or to secure the performance of
tenders, bids, leases, contracts (other than for the repayment of
Indebtedness), statutory obligations and other similar obligations or
arising as a result of progress payments under government contracts;
(e) easements (including reciprocal easement agreements and
utility agreements), rights-of-way, covenants, consents, reservations,
encroachments, variations and zoning and other restrictions, charges or
encumbrances (whether or not recorded), which do not interfere
materially with the ordinary conduct of the business of the Borrower or
any Subsidiary and which do not materially detract from the value of
the property to which they attach or materially impair the use thereof
to the Borrower or any Subsidiary;
(f) purchase money Liens to secure Indebtedness permitted
under Section 9.5(d) and incurred to purchase fixed assets, provided
such Indebtedness represents not less than 75% of the purchase price of
such assets as of the date of purchase thereof and no property other
than the assets so purchased secures such Indebtedness; and
(g) Liens arising in connection with Capital Leases permitted
under Section 9.5(d); provided that no such Lien shall extend to any
Collateral or to any other property other than the assets subject to
such Capital Leases.
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9.5. Indebtedness. Incur, create, assume or permit to exist any
Indebtedness or Contingent Obligation, howsoever evidenced, except:
(a) Indebtedness existing as of the Closing Date as set forth
in Schedule 7.6(b); provided, none of the instruments and agreements
evidencing or governing such Indebtedness shall be amended, modified or
supplemented after the Closing Date to change any terms of
subordination, repayment or rights of conversion, put, exchange or
other rights from such terms and rights as in effect on the Closing
Date;
(b) Indebtedness owing to the Agent or any Lender in
connection with this Agreement, any Note or other Loan Document;
(c) the endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business;
(d) purchase money Indebtedness described in Section 9.4(f)
and Capital Leases described in Section 9.4(g) not to exceed an
aggregate outstanding amount at any time of $1,000,000;
(e) Indebtedness arising from Rate Hedging Obligations
permitted under Section 9.16;
(f) unsecured intercompany Indebtedness for loans and advances
made by the Borrower or any Guarantor to the Borrower or any Guarantor,
provided that such intercompany Indebtedness is evidenced by a
promissory note or similar written instrument acceptable to the Agent
which provides that such Indebtedness is subordinated to obligations,
liabilities and undertakings of the holder or owner thereof under the
Loan Documents;
(g) additional unsecured Indebtedness for Money Borrowed not
otherwise covered by clauses (a) through (f) above, provided that the
aggregate outstanding principal amount of all such other Indebtedness
permitted under this clause (g) shall in no event exceed $500,000 at
any time; and
(h) guarantees of Indebtedness permitted under clause (g) of
Section 9.5.
9.6. Transfer of Assets. Sell, lease, transfer or otherwise dispose of
any assets of the Parent or any Subsidiary other than (a) dispositions of
inventory in the ordinary course of business, (b) dispositions of property that
is substantially worn, damaged, obsolete or, in the judgment of the Parent, no
longer best used or useful in its business or that of any Subsidiary, (c)
transfers of assets necessary to give effect to merger or consolidation
transactions permitted by Section 9.8, and (d) the disposition of Eligible
Securities in the ordinary course of
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management of the investment portfolio of the Parent and its Subsidiaries.
9.7. Investments. Purchase, own, invest in or otherwise acquire,
directly or indirectly, any stock or other securities, or make or permit to
exist any interest whatsoever in any other Person or permit to exist any loans
or advances to any Person, except that the Parent and the Borrower may maintain
investments or invest in:
(a) securities of any Person acquired in an Acquisition
permitted hereunder;
(b) Eligible Securities;
(c) investments existing as of the date hereof and as set
forth in Schedule 7.4;
(d) accounts receivable arising and trade credit granted in
the ordinary course of business and any securities received in
satisfaction or partial satisfaction thereof in connection with
accounts of financially troubled Persons to the extent reasonably
necessary in order to prevent or limit loss; and
(e) investments in Subsidiaries which are Guarantors; and
(f) loans between the Borrower and the Guarantors described in
Section 9.5(f).
9.8. Merger or Consolidation. (a) Consolidate with or merge into any
other Person, or (b) permit any other Person to merge into it, or (c) liquidate,
wind-up or dissolve or sell, transfer or lease or otherwise dispose of all or a
substantial part of its assets (other than sales permitted under Section 9.6);
provided, however, (i) any Subsidiary of the Parent may merge or transfer all or
substantially all of its assets into or consolidate with the Parent or any
wholly-owned Subsidiary of the Parent, and (ii) any other Person may merge into
or consolidate with the Parent or any wholly-owned Subsidiary and any Subsidiary
may merge into or consolidate with any other Person in order to consummate an
Acquisition permitted by Section 9.2, provided further, that any resulting or
surviving entity shall execute and deliver such agreements and other documents,
including a Facility Guaranty, and take such other action as the Agent may
reasonably require to evidence or confirm its express assumption of the
obligations and liabilities of its predecessor entities under the Loan
Documents.
9.9. Restricted Payments. Make any Restricted Payment or apply or set
apart any of their assets therefor or agree to do any of the foregoing except
the Parent may repurchase shares of its common stock pursuant to the terms of
the Stockholders Agreement so long as the aggregate amount expended in any
Fiscal Year to purchase common stock shall not exceed $250,000 and no Default or
Event of Default shall exist either before or after giving effect to such
purchase.
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9.10. Transactions with Affiliates. Other than transactions permitted
under Sections 9.7 and 9.8, enter into any transaction after the Closing Date,
including, without limitation, the purchase, sale, lease or exchange of
property, real or personal, or the rendering of any service, with any Affiliate
of the Parent, except (a) that such Persons may render services to the Parent or
its Subsidiaries for compensation at the same rates generally paid by Persons
engaged in the same or similar businesses for the same or similar services, (b)
that the Parent or any Subsidiary may render services to such Persons for
compensation at the same rates generally charged by the Parent or such
Subsidiary, (c) in either case in the ordinary course of business and pursuant
to the reasonable requirements of the Parent's (or any Subsidiary's) business
consistent with past practice of the Parent and its Subsidiaries and upon fair
and reasonable terms no less favorable to the Parent (or any Subsidiary) than
would be obtained in a comparable arm's-length transaction with a Person not an
Affiliate and (d) the Services Agreement may continue in effect so long as the
amount paid by the Borrower and its Subsidiaries to New River for (i) services
rendered during any Fiscal Year shall not exceed $200,000 and (ii) out-of-pocket
expenses and expenses incurred by New River for the benefit of the Borrower
prior to the initial Advance hereunder which shall not exceed in the aggregate
$550,000.
9.11. Compliance with ERISA. With respect to any Pension Plan, Employee
Benefit Plan or Multiemployer Plan:
(a) permit the occurrence of any Termination Event (except the
Parent's voluntary termination of a Pension Plan or the filing of a
notice of intent to voluntarily terminate a Pension Plan) which would
result in a liability on the part of the Parent or any ERISA Affiliate
to the PBGC; or
(b) permit the present value of all benefit liabilities under
all Pension Plans to exceed the current value of the assets of such
Pension Plans allocable to such benefit liabilities that has had or
could reasonably be expected to result in a Material Adverse Effect; or
(c) permit any accumulated funding deficiency (as defined in
Section 302 of ERISA and Section 412 of the Code) with respect to any
Pension Plan, whether or not waived that has had or could reasonably be
expected to result in a Material Adverse Effect; or
(d) fail to make any contribution or payment to any
Multiemployer Plan which the Parent or any ERISA Affiliate may be
required to make under any agreement relating to such Multiemployer
Plan, or any law pertaining thereto; or
(e) engage, or permit any Parent or any ERISA Affiliate to
engage, in any prohibited transaction under Section 406 of ERISA or
Sections 4975 of the Code for which a civil penalty pursuant to Section
502(I) of ERISA or a tax pursuant to Section 4975 of the Code may be
imposed; or
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(f) (i) permit the establishment of any Employee Benefit Plan
providing post-retirement welfare benefits or (ii) establish or amend
any Employee Benefit Plan which establishment or amendment could result
in liability to the Parent or any ERISA Affiliate or increase the
obligation of the Parent or any ERISA Affiliate to a Multiemployer Plan
which liability or increase, individually or together with all similar
liabilities and increases, is in excess of $100,000 could reasonably be
expected to result in a Material Adverse Effect; or
(g) fail, or permit the Parent or any ERISA Affiliate to fail,
to establish, maintain and operate each Employee Benefit Plan in
compliance in all material respects with the provisions of ERISA, the
Code, all applicable Foreign Benefit Laws and all other applicable laws
and the regulations and interpretations thereof.
9.12. Fiscal Year. Change its Fiscal Year; provided, however, that
beginning July 1, 2000 the Borrower may change its fiscal year to the period
beginning July 1 and ending on June 30 in the following calendar year beginning
July 1, 2000 so long as no Default or Event of Default exists hereunder.
9.13. Dissolution, etc. Wind up, liquidate or dissolve (voluntarily or
involuntarily) or commence or suffer any proceedings seeking any such winding
up, liquidation or dissolution, except in connection with a merger or
consolidation permitted pursuant to Section 9.8.
9.14. Limitations on Sales and Leasebacks. Enter into any arrangement
with any Person providing for the leasing by the Parent or any Subsidiary of
real or personal property, whether now owned or hereafter acquired in a related
transaction or series of related transactions, which has been or is to be sold
or transferred by the Parent or any Subsidiary to such Person or to any other
Person to whom funds have been or are to be advanced by such Person on the
security of such property or rental obligations of the Parent or any Subsidiary.
9.15. Change in Control. Cause, suffer or permit to exist or occur any
Change of Control.
9.16. Rate Hedging Obligations. Incur any Rate Hedging Obligations or
enter into any agreements, arrangements, devices or instruments relating to Rate
Hedging Obligations, except pursuant to Swap Agreements.
9.17. Negative Pledge Clauses. Enter into or cause, suffer or permit to
exist any agreement with any Person other than the Agent and the Lenders
pursuant to this Agreement or any other Loan Documents which prohibits or limits
the ability of any of the Parent or any Subsidiary to create, incur, assume or
suffer to exist any Lien upon any of its property, assets or revenues, whether
now owned or hereafter acquired, provided that the Parent and any Subsidiary may
enter into such an agreement in connection with property acquired with the
proceeds of purchase money Indebtedness and Capital Leases permitted hereunder.
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ARTICLE X
Events of Default and Acceleration
10.1. Events of Default. If any one or more of the following events
(herein called "Events of Default") shall occur for any reason whatsoever (and
whether such occurrence shall be voluntary or involuntary or come about or be
effected by operation of law or pursuant to or in compliance with any judgment,
decree or order of any court or any order, rule or regulation of any
Governmental Authority), that is to say:
(a) if default shall be made in the due and punctual payment
of the principal of any Loan, Reimbursement Obligation or other
Obligation, when and as the same shall be due and payable whether
pursuant to any provision of Article II or Article III, at maturity, by
acceleration or otherwise; or
(b) if default shall be made in the due and punctual payment
of any amount of interest on any Loan, Reimbursement Obligation or
other Obligation or of any fees or other amounts payable to any of the
Lenders or the Agent on the date on which the same shall be due and
payable; or
(c) if default shall be made in the performance or observance
of any covenant set forth in Section 8.8, 8.12, 8.13, 8.20 or Article
IX;
(d) if a default shall be made in the performance or
observance of, or shall occur under, any covenant, agreement or
provision contained in this Agreement or the Notes (other than as
described in clauses (a), (b) or (c) above) and such default shall
continue for 30 or more days after the earlier of receipt of notice of
such default by the Authorized Representative from the Agent or an
officer of the Parent becomes aware of such default, or if a default
shall be made in the performance or observance of, or shall occur
under, any covenant, agreement or provision contained in any of the
other Loan Documents (beyond any applicable grace period, if any,
contained therein) or in any instrument or document evidencing or
creating any obligation, guaranty, or Lien in favor of the Agent or any
of the Lenders or delivered to the Agent or any of the Lenders in
connection with or pursuant to this Agreement or any of the Obligations
(beyond any applicable grace period, if any, contained therein), or if
any Loan Document ceases to be in full force and effect (other than by
reason of any action by the Agent), or if without the written consent
of the Lenders, this Agreement or any other Loan Document shall be
disaffirmed or shall terminate, be terminable or be terminated or
become void or unenforceable for any reason whatsoever (other than in
accordance with its terms in the absence of default or by reason of any
action by the Lenders or the Agent); or
(e) if there shall occur (i) a default, which is not waived,
in the payment of any principal, interest, premium or other amount with
respect to any
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Indebtedness, Contingent Obligation or Rate Hedging Obligation (other
than the Loans and other Obligations) of the Parent or any Subsidiary
in an amount not less than $100,000 in the aggregate outstanding, or
(ii) a default, which is not waived, in the performance, observance or
fulfillment of any term or covenant contained in any agreement or
instrument under or pursuant to which any such Indebtedness, Contingent
Obligation or Rate Hedging Obligation may have been issued, created,
assumed, guaranteed or secured by the Parent or any Subsidiary, or
(iii) any other event of default as specified in any agreement or
instrument under or pursuant to which any such Indebtedness, Contingent
Obligation or Rate Hedging Obligation may have been issued, created,
assumed, guaranteed or secured by the Parent or any Subsidiary, and in
the case of clauses (i), (ii) and (iii) such default or event of
default shall continue for more than the period of grace, if any,
therein specified, or such default or event of default shall permit the
holder of any such Indebtedness (or any agent or trustee acting on
behalf of one or more holders) to accelerate the maturity thereof; or
(f) if any representation, warranty or other statement of fact
contained in any Loan Document or in any writing, certificate, report
or statement at any time furnished to the Agent or any Lender by or on
behalf of the Parent, the Borrower or any other Credit Party pursuant
to or in connection with any Loan Document, or otherwise, shall be
false or misleading in any material respect when given; or
(g) if the Parent or any Subsidiary shall be unable to pay its
debts generally as they become due; file a petition to take advantage
of any insolvency statute; make an assignment for the benefit of its
creditors; commence a proceeding for the appointment of a receiver,
trustee, liquidator or conservator of itself or of the whole or any
substantial part of its property; file a petition or answer seeking
liquidation, reorganization or arrangement or similar relief under the
federal bankruptcy laws or any other applicable law or statute; or
(h) if a court of competent jurisdiction shall enter an order,
judgment or decree appointing a custodian, receiver, trustee,
liquidator or conservator of the Parent or any Subsidiary of the whole
or any substantial part of its properties and such order, judgment or
decree continues unstayed and in effect for a period of sixty (60)
days, or approve a petition filed against the Parent or any Subsidiary
seeking liquidation, reorganization or arrangement or similar relief
under the federal bankruptcy laws or any other applicable law or
statute of the United States of America or any state, which petition is
not dismissed within sixty (60) days; or if, under the provisions of
any other law for the relief or aid of debtors, a court of competent
jurisdiction shall assume custody or control of the Parent or any
Subsidiary or of the whole or any substantial part of its properties,
which control is not relinquished within sixty (60) days; or if there
is commenced against the Parent or any Subsidiary any proceeding or
petition seeking reorganization, arrangement or similar relief under
the federal
85
bankruptcy laws or any other applicable law or statute of the United
States of America or any state which proceeding or petition remains
undismissed for a period of sixty (60) days; or if the Parent or any
Subsidiary takes any action to indicate its consent to or approval of
any such proceeding or petition; or
(i) if (i) one or more judgments or orders where the amount
not covered by insurance (or the amount as to which the insurer denies
liability) is in excess of $100,000 is rendered against the Parent or
any Subsidiary, or (ii) there is any attachment, injunction or
execution against any of the Parent's or Subsidiaries' properties for
any amount in excess of $100,000 in the aggregate; and such judgment,
attachment, injunction or execution remains unpaid, unstayed,
undischarged, unbonded or undismissed for a period of thirty (30) days;
or
(j) if the Parent or any Subsidiary shall, other than in the
ordinary course of business (as determined by past practices), suspend
all or any part of its operations material to the conduct of the
business of the Parent or such Subsidiary for a period of more than 60
days; or
(k) if the Parent or any Subsidiary shall breach any of the
material terms or conditions of any agreement under which any Rate
Hedging Obligations permitted hereby is created and such breach shall
continue beyond any grace period, if any, relating thereto pursuant to
the terms of such agreement, or if the Parent or any Subsidiary shall
disaffirm or seek to disaffirm any such agreement or any of its
obligations thereunder; or
(l) if there shall occur and not be waived an Event of Default
as defined in any of the other Loan Documents;
then, and in any such event and at any time thereafter, if such Event of Default
or any other Event of Default shall have not been waived,
(A) either or both of the following actions may be
taken: (i) the Agent, with the consent of the Required
Lenders, may, and at the direction of the Required Lenders
shall, declare any obligation of the Lenders and the Issuing
Bank to make further Revolving Loans and Swing Line Loans or
to issue additional Letters of Credit terminated, whereupon
the obligation of each Lender to make further Revolving Loans,
of NationsBank to make further Swing Line Loans, and of the
Issuing Bank to issue additional Letters of Credit, hereunder
shall terminate immediately, and (ii) the Agent shall at the
direction of the Required Lenders, at their option, declare by
notice to the Borrower any or all of the Obligations to be
immediately due and payable, and the same, including all
interest accrued thereon and all other obligations of the
Borrower to the Agent and the Lenders, shall forthwith become
86
immediately due and payable without presentment, demand,
protest, notice or other formality of any kind, all of which
are hereby expressly waived, anything contained herein or in
any instrument evidencing the Obligations to the contrary
notwithstanding; provided, however, that notwithstanding the
above, if there shall occur an Event of Default under clause
(g) or (h) above, then the obligation of the Lenders to make
Revolving Loans, of NationsBank to make further Swing Line
Loans, and of the Issuing Bank to issue Letters of Credit
hereunder shall automatically terminate and any and all of the
Obligations shall be immediately due and payable without the
necessity of any action by the Agent or the Required Lenders
or notice to the Agent or the Lenders;
(B) The Borrower shall, upon demand of the Agent or
the Required Lenders, deposit cash with the Agent in an amount
equal to the amount of any Letter of Credit Outstandings, as
collateral security for the repayment of any future drawings
or payments under such Letters of Credit, and such amounts
shall be held by the Agent pursuant to the terms of the LC
Account Agreement; and
(C) the Agent and each of the Lenders shall have all
of the rights and remedies available under the Loan Documents
or under any applicable law.
10.2. Agent to Act. In case any one or more Events of Default shall
occur and not have been waived, the Agent may, and at the direction of the
Required Lenders shall, proceed to protect and enforce their rights or remedies
either by suit in equity or by action at law, or both, whether for the specific
performance of any covenant, agreement or other provision contained herein or in
any other Loan Document, or to enforce the payment of the Obligations or any
other legal or equitable right or remedy.
10.3. Cumulative Rights. No right or remedy herein conferred upon the
Lenders or the Agent is intended to be exclusive of any other rights or remedies
contained herein or in any other Loan Document, and every such right or remedy
shall be cumulative and shall be in addition to every other such right or remedy
contained herein and therein or now or hereafter existing at law or in equity or
by statute, or otherwise.
10.4. No Waiver. No course of dealing between the Borrower and any
Lender or the Agent or any failure or delay on the part of any Lender or the
Agent in exercising any rights or remedies under any Loan Document or otherwise
available to it shall operate as a waiver of any rights or remedies and no
single or partial exercise of any rights or remedies shall operate as a waiver
or preclude the exercise of any other rights or remedies hereunder or of the
same right or remedy on a future occasion.
10.5. Allocation of Proceeds. If an Event of Default has occurred and
not been waived, and the maturity of the Notes has been accelerated pursuant to
Article X hereof, all
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payments received by the Agent hereunder, in respect of any principal of or
interest on the Obligations or any other amounts payable by the Borrower
hereunder, shall be applied by the Agent in the following order:
(a) amounts due to the Lenders pursuant to Sections 2.10, 3.3,
3.4 and 13.5;
(b) amounts due to the Agent pursuant to Section 12.8;
(c) payments of interest on Loans, Swing Line Loans and
Reimbursement Obligations, to be applied for the ratable benefit of the
Lenders (with amounts payable in respect of Swing Line Outstandings
being included in such calculation and paid to NationsBank);
(d) payments of principal of Loans, Swing Line Loans and
Reimbursement Obligations, to be applied for the ratable benefit of the
Lenders (with amounts payable in respect of Swing Line Outstandings
being included in such calculation and paid to NationsBank);
(e) payments of cash amounts to the Agent in respect of
outstanding Letters of Credit pursuant to Section 10.1(B);
(f) amounts due to the Lenders pursuant to Sections 3.2(g),
8.16 and 13.9;
(g) payments of all other amounts due under any of the Loan
Documents, if any, to be applied for the ratable benefit of the
Lenders;
(h) amounts due to any of the Lenders in respect of
Obligations consisting of liabilities under any Swap Agreement with any
of the Lenders on a pro rata basis according to the amounts owed; and
(i) any surplus remaining after application as provided for
herein, to the Borrower or otherwise as may be required by applicable
law.
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ARTICLE XI
Guaranty
11.1. Parent Guaranty. The Parent absolutely, unconditionally and
irrevocably guaranties to the Agent for the benefit of the Agent and the Lenders
the full and punctual payment and performance when due, whether at stated
maturity, by scheduled repayment, required prepayment, declaration,
acceleration, demand or otherwise (including all amounts which would have become
due but for the operation of the automatic stay under Section 362(a) of the
Federal Bankruptcy Code, 11 U.S.C. 362(a)), of all of the Obligations in
accordance with their respective terms, whether such Obligations are outstanding
on the date of this Agreement or arise or are incurred at any time or times
thereafter. The guaranty hereby made constitutes a guaranty of payment and
performance in full when due and not of collection only, and the Parent
individually agrees that it shall not be necessary or required that the Agent
and the Lenders exercise any rights, assert any claim or demand or enforce any
remedy whatsoever before or as a condition to the obligation of the Parent
hereunder with the exception that the Agent or the Lenders shall have first
declared that the Borrower is in Default. The liability of the Parent to the
Agent or the Lenders under this guaranty shall be unlimited.
11.2. Guaranty Absolute. The obligation of the Parent under Section
11.1 is and shall be construed as a continuing, absolute and unconditional
guaranty of payment and performance in full, and shall remain in full force and
effect until all Obligations have been paid in full and the Obligations are paid
in full. The Parent guarantees that the Obligations will be paid and performed
strictly in accordance with the terms of this Agreement and the other Loan
Documents, regardless of any applicable law now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of the Agent or the
Lenders with respect thereto. The liability of the Parent under this guaranty
shall be to the fullest extent permitted by law, absolute, unconditional and
irrevocable irrespective of:
(a) any lack of validity or enforceability of this Agreement or
any other Loan Document or any other instrument relating to any thereof or to
any of the Obligations;
(b) any change in the existence or ownership of the Borrower,
or any insolvency, bankruptcy, reorganization or other similar proceeding
affecting the Borrower or any property of the Borrower or any resulting release
or discharge of any Obligation contained in this Agreement or any other Loan
Document;
(c) the failure of the Agent or the Lenders to assert any
claim or demand or to enforce any right or remedy against the Borrower, the
Parent, any other Guarantor or any other Person under the provisions of this
Agreement or any other Loan Document or any other instrument relating to any
thereof or under any applicable law;
(d) any change in the time, manner or place of payment or
performance of, or in any other term of, all or any of the Obligations, or any
other compromise, renewal, extension,
89
acceleration or release with respect thereto, or any other amendment to,
rescission, waiver or other modification of or any consent to departure from any
of the terms of this Agreement or any other Loan Document or any other
instrument relating to any thereof;
(e) any increase, reduction, limitation, impairment or
termination of the Obligations for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and any defense or setoff,
counterclaim, recoupment or termination whatsoever by reason of the invalidity,
illegality, nongenuineness, irregularity, compromise, or unenforceability of, or
any other event or occurrence affecting, any of the Obligations (and the Parent
hereby waives any right to or claim of any such defense or set-off,
counterclaim, recoupment or termination);
(f) any defense, set-off or counterclaim which may at any time
be available to or be asserted by the Borrower against the Agent or the Lenders;
or
(g) any other circumstance which might otherwise constitute a
suretyship or other defense available to, or a legal or equitable discharge of,
the Borrower or any of the Guarantors.
11.3. Reinstatement, etc. The Parent agrees that this guaranty shall
continue to be effective or be reinstated, as the case may be, if at any time
any payment (in whole or in part) of any of the Obligations is rescinded or must
otherwise be restored by the Agent or the Lenders in connection with any
bankruptcy or insolvency proceeding relating to the Borrower or otherwise, all
as though such payment had not been made.
11.4. Waiver. To the maximum extent permitted by applicable law, the
Parent hereby waives promptness, diligence, notice of acceptance and any other
notice with respect to any of the Obligations or its guaranty, other than as
provided in this Agreement, and any requirement that the Agent or the Lenders
protect, secure, perfect or insure any Lien or any property subject thereto or
exhaust any right or take any action against the Borrower, the Guarantors or any
other Person or entity.
11.5. Waiver of Subrogation Rights. The rights (including any right of
subrogation, reimbursement or contribution) which the Parent shall acquire
against the Borrower as a consequence of making any payment under this guaranty
are, in this Section 11.5, collectively called "Subrogation Rights." All
Subrogation Rights of the Parent shall in all respects be subordinate and junior
in right of payment to the prior payment in full of all the Obligations and, if
any payment shall be made to the Parent on account of such Subrogation Rights
prior to the payment in full of all the Obligations, such payment shall
forthwith be paid to the Agent for the benefit of itself and the Lenders to be
credited and applied against the Obligations to the extent necessary to cause
the payment in full of all the Obligations. Upon payment by the Parent of any
sum to the Agent for the benefit of itself and the Lenders hereunder, subject to
the payment in full of all the Obligations, the Parent shall be subrogated to
the rights of the Agent and the Lenders to receive payments of such Obligations;
provided, however, that to the extent any Subrogation Rights which the Parent
otherwise would have pursuant to this Agreement, under
90
applicable law or otherwise would result in the Parent being a "creditor" of the
Borrower within the meaning of Section 547 of Title 11 of the United States Code
as now in effect or hereafter amended, or any comparable provision of any
successor statute, the Parent hereby irrevocably, to the extent permitted by
law, waives all such Subrogation Rights.
11.6. Subsidiary Guaranty. As security for the full and timely payment
and performance of all Obligations, the Parent shall on or before the Closing
Date do or cause to be done all things necessary to cause each Subsidiary
organized under the laws of the United States or a state or territory thereof,
to execute and deliver to the Agent a Facility Guaranty and shall further cause
each Person who hereafter becomes a Subsidiary organized under the laws of the
United States or a state or territory thereof to do all those things required by
Section 8.20 hereof.
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ARTICLE XII
The Agent
12.1. Appointment, Powers, and Immunities. Each Lender hereby
irrevocably appoints and authorizes the Agent to act as its agent under this
Agreement and the other Loan Documents with such powers and discretion as are
specifically delegated to the Agent by the terms of this Agreement and the other
Loan Documents, together with such other powers as are reasonably incidental
thereto. The Agent (which term as used in this sentence and in Section 12.5 and
the first sentence of Section 12.6 hereof shall include its affiliates and its
own and its affiliates' officers, directors, employees, and agents):
(a) shall not have any duties or responsibilities except those
expressly set forth in this Agreement and shall not be a trustee or
fiduciary for any Lender;
(b) shall not be responsible to the Lenders for any recital,
statement, representation, or warranty (whether written or oral) made
in or in connection with any Loan Document or any certificate or other
document referred to or provided for in, or received by any of them
under, any Loan Document, or for the value, validity, effectiveness,
genuineness, enforceability, or sufficiency of any Loan Document, or
any other document referred to or provided for therein or for any
failure by any Credit Party or any other Person to perform any of its
obligations thereunder;
(c) shall not be responsible for or have any duty to
ascertain, inquire into, or verify the performance or observance of any
covenants or agreements by any Credit Party or the satisfaction of any
condition or to inspect the property (including the books and records)
of the Parent or any of its Subsidiaries or affiliates;
(d) shall not be required to initiate or conduct any
litigation or collection proceedings under any Loan Document; and
(e) shall not be responsible for any action taken or omitted
to be taken by it under or in connection with any Loan Document, except
for its own gross negligence or willful misconduct.
The Agent may employ agents and attorneys-in-fact and shall not be responsible
for the negligence or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care.
12.2. Reliance by Agent. The Agent shall be entitled to rely upon any
certification, notice, instrument, writing, or other communication (including,
without limitation, any thereof by telephone or telefacsimile) believed by it to
be genuine and correct and to have been signed,
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sent or made by or on behalf of the proper Person or Persons, and upon advice
and statements of legal counsel (including counsel for any Credit Party),
independent accountants, and other experts selected by the Agent. The Agent may
deem and treat the payee of any Note as the holder thereof for all purposes
hereof unless and until the Agent receives and accepts an Assignment and
Acceptance executed in accordance with Section 13.1 hereof. As to any matters
not expressly provided for by this Agreement, the Agent shall not be required to
exercise any discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding on all of the Lenders; provided, however, that the
Agent shall not be required to take any action that exposes the Agent to
personal liability or that is contrary to any Loan Document or applicable law or
unless it shall first be indemnified to its satisfaction by the Lenders against
any and all liability and expense which may be incurred by it by reason of
taking any such action.
12.3. Defaults. The Agent shall not be deemed to have knowledge or
notice of the occurrence of a Default or Event of Default unless the Agent has
received written notice from a Lender or the Borrower specifying such Default or
Event of Default and stating that such notice is a "Notice of Default". In the
event that the Agent receives such a notice of the occurrence of a Default or
Event of Default, the Agent shall give prompt notice thereof to the Lenders. The
Agent shall (subject to Section 12.2 hereof) take such action with respect to
such Default or Event of Default as shall reasonably be directed by the Required
Lenders, provided that, unless and until the Agent shall have received such
directions, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interest of the Lenders.
12.4. Rights as Lender. With respect to its Revolving Credit Commitment
and the Loans made by it, NationsBank (and any successor acting as Agent) in its
capacity as a Lender hereunder shall have the same rights and powers hereunder
as any other Lender and may exercise the same as though it were not acting as
the Agent, and the term "Lender" or "Lenders" shall, unless the context
otherwise indicates, include the Agent in its individual capacity. NationsBank
(and any successor acting as Agent) and its affiliates may (without having to
account therefor to any Lender) accept deposits from, lend money to, make
investments in, provide services to, and generally engage in any kind of
lending, trust, or other business with the Parent or any of its Subsidiaries or
affiliates as if it were not acting as Agent, and NationsBank (and any successor
acting as Agent) and its affiliates may accept fees and other consideration from
the Parent or any of its Subsidiaries or affiliates for services in connection
with this Agreement or otherwise without having to account for the same to the
Lenders.
12.5. Indemnification. The Lenders agree to indemnify the Agent (to the
extent not reimbursed under Section 13.9 hereof, but without limiting the
obligations of the Borrower under such Section) ratably in accordance with their
respective Revolving Credit Commitments, for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including attorneys' fees), or disbursements of any kind and
93
nature whatsoever that may be imposed on, incurred by or asserted against the
Agent (including by any Lender) in any way relating to or arising out of any
Loan Document or the transactions contemplated thereby or any action taken or
omitted by the Agent under any Loan Document; provided that no Lender shall be
liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the Person to be indemnified. Without
limitation of the foregoing, each Lender agrees to reimburse the Agent promptly
upon demand for its ratable share of any costs or expenses payable by the
Borrower under Section 13.5, to the extent that the Agent is not promptly
reimbursed for such costs and expenses by the Borrower. The agreements contained
in this Section 12.5 shall survive payment in full of the Loans and all other
amounts payable under this Agreement.
12.6. Non-Reliance on Agent and Other Lenders. Each Lender agrees that
it has, independently and without reliance on the Agent or any other Lender, and
based on such documents and information as it has deemed appropriate, made its
own credit analysis of the Parent, the Borrower and their Subsidiaries and
decision to enter into this Agreement and that it will, independently and
without reliance upon the Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own analysis and decisions in taking or not taking action under the Loan
Documents. Except for notices, reports, and other documents and information
expressly required to be furnished to the Lenders by the Agent hereunder, the
Agent shall not have any duty or responsibility to provide any Lender with any
credit or other information concerning the affairs, financial condition, or
business of the Parent or any of its Subsidiaries or affiliates that may come
into the possession of the Agent or any of its affiliates.
12.7. Resignation of Agent. The Agent may resign at any time by giving
notice thereof to the Lenders and the Borrower. Upon any such resignation, the
Required Lenders shall have the right to appoint a successor Agent. If no
successor Agent shall have been so appointed by the Required Lenders and shall
have accepted such appointment within thirty (30) days after the retiring
Agent's giving of notice of resignation, then the retiring Agent may, on behalf
of the Lenders, appoint a successor Agent which shall be a commercial bank
organized under the laws of the United States of America having combined capital
and surplus of at least $500,000,000. Upon the acceptance of any appointment as
Agent hereunder by a successor, such successor shall thereupon succeed to and
become vested with all the rights, powers, discretion, privileges, and duties of
the retiring Agent, and the retiring Agent shall be discharged from its duties
and obligations hereunder. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Article XII shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Agent.
12.8. Fees. The Borrower agrees to pay to the Agent, for its individual
account, an annual Agent's fee as from time to time agreed to by the Borrower
and Agent in writing.
12.9. Sole Lender. Notwithstanding anything to the contrary contained
herein, until there shall be two or more Lenders, all references to the Agent
herein and in the other Loan Documents shall be deemed to refer to NationsBank
as Lender.
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ARTICLE XIII
Miscellaneous
13.1. Assignments and Participations. (a) Each Lender may assign to one
or more Eligible Assignees all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its Loans,
its Revolving Note, and its Revolving Credit Commitment; provided, however, that
(i) each such assignment shall be to an Eligible Assignee;
(ii) except in the case of an assignment to another Lender or
an assignment of all of a Lender's rights and obligations under this Agreement,
any such partial assignment shall be in an amount at least equal to $1,000,000
or an integral multiple of $500,000 in excess thereof;
(iii) each such assignment by a Lender shall be of a constant,
and not varying, percentage of all of its rights and obligations under this
Agreement and the Revolving Note (except that any assignment by NationsBank
shall not include its rights, benefits or duties as the Issuing Bank or as the
provider of Swing Line Loans); and
(iv) the parties to such assignment shall execute and deliver
to the Agent for its acceptance an Assignment and Acceptance in the form of
Exhibit B hereto, together with any Revolving Note subject to such assignment
and a processing fee of $3,500.
Upon execution, delivery, and acceptance of such Assignment and Acceptance, the
assignee thereunder shall be a party hereto and, to the extent of such
assignment, have the obligations, rights, and benefits of a Lender hereunder and
the assigning Lender shall, to the extent of such assignment, relinquish its
rights and be released from its obligations under this Agreement. Upon the
consummation of any assignment pursuant to this Section, the assignor, the Agent
and the Borrower shall make appropriate arrangements so that, if required, new
Revolving Notes are issued to the assignor and the assignee. If the assignee is
not incorporated under the laws of the United States of America or a state
thereof, it shall deliver to the Borrower and the Agent certification as to
exemption from deduction or withholding of Taxes in accordance with Section 5.6.
(b) The Agent shall maintain at its address referred to in Section
13.2 a copy of each Assignment and Acceptance delivered to and accepted by it
and a register for the recordation of the names and addresses of the Lenders and
the Revolving Credit Commitment of, and principal amount of the Revolving Loans
owing to, each Lender from time to time (the "Register"). The entries in the
Register shall be conclusive and binding for all purposes, absent manifest
error, and the Borrower, the Agent and the Lenders may treat each Person whose
name is recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.
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(c) Upon its receipt of an Assignment and Acceptance executed by the
parties thereto, together with any Revolving Note subject to such assignment and
payment of the processing fee, the Agent shall, if such Assignment and
Acceptance has been completed and is in substantially the form of Exhibit B
hereto, (i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to the
parties thereto.
(d) Each Lender may sell participations to one or more Persons in
all or a portion of its rights, obligations or rights and obligations under this
Agreement (including all or a portion of its Revolving Credit Commitment or its
Revolving Loans); provided, however, that (i) such Lender's obligations under
this Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) the participant shall be entitled to the benefit of the yield protection
provisions contained in Article V and the right of set-off contained in Section
13.3, and (iv) the Borrower shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement, and such Lender shall retain the sole right to enforce the
obligations of the Borrower relating to its Revolving Loans and its Revolving
Note and to approve any amendment, modification, or waiver of any provision of
this Agreement (other than amendments, modifications, or waivers decreasing the
amount of principal of or the rate at which interest is payable on such
Revolving Loans or Revolving Note, extending any scheduled principal payment
date or date fixed for the payment of interest on such Revolving Loans or
Revolving Note, or extending its Revolving Credit Commitment).
(e) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time assign and pledge all or any portion of its Loans and
its Note to any Federal Reserve Bank as collateral security pursuant to
Regulation A and any Operating Circular issued by such Federal Reserve Bank. No
such assignment shall release the assigning Lender from its obligations
hereunder.
(f) Any Lender may furnish any information concerning the Borrower
or any of its Subsidiaries in the possession of such Lender from time to time to
assignees and participants (including prospective assignees and participants).
13.2. Notices. Any notice shall be conclusively deemed to have been
received by any party hereto and be effective (i) on the day on which delivered
(including hand delivery by commercial courier service) to such party (against
receipt therefor), (ii) on the date of receipt at such address, telefacsimile
number or telex number as may from time to time be specified by such party in
written notice to the other parties hereto or otherwise received), in the case
of notice by telegram, telefacsimile or telex, respectively (where the receipt
of such message is verified by return), or (iii) on the fifth Business Day after
the day on which mailed, if sent prepaid by certified or registered mail, return
receipt requested, in each case delivered, transmitted or mailed, as the case
may be, to the address, telex number or telefacsimile number, as appropriate,
set forth below or such other address or number as such party shall specify by
notice hereunder:
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(a) if to the Borrower or Parent:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Retail, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇ ▇▇▇▇, Chief Financial Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Akerman, Senterfitt & ▇▇▇▇▇▇, P.A.
▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇, Ext. 4615
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the Agent:
NationsBank, National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇-▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Agency Services
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
NationsBank, National Association
▇▇▇ ▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(c) if to the Lenders:
At the addresses set forth on the signature pages
hereof and on the signature page of each Assignment
and Acceptance;
(d) if to any other Credit Party, at the address set
forth on the signature page of the Facility Guaranty
or Security Instrument executed by such Credit Party,
as the case may be.
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13.3. Right of Set-off; Adjustments. (a) Upon the occurrence and during
the continuance of any Event of Default, each Lender (and each of its
affiliates) is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by such Lender (or any of its affiliates)
to or for the credit or the account of the Parent or the Borrower against any
and all of the obligations of the Parent or the Borrower now or hereafter
existing under this Agreement and the Revolving Note held by such Lender,
irrespective of whether such Lender shall have made any demand under this
Agreement or such Revolving Note and although such obligations may be unmatured.
Each Lender agrees promptly to notify the Parent or the Borrower, as the case
may be, after any such set-off and application made by such Lender; provided,
however, that the failure to give such notice shall not affect the validity of
such set-off and application. The rights of each Lender under this Section 13.3
are in addition to other rights and remedies (including, without limitation,
other rights of set-off) that such Lender may have.
(b) If any Lender (a "benefitted Lender") shall at any time receive
any payment of all or part of the Loans owing to it, or interest thereon, or
receive any collateral in respect thereof (whether voluntarily or involuntarily,
by set-off, or otherwise), in a greater proportion than any such payment to or
collateral received by any other Lender, if any, in respect of such other
Lender's Loans owing to it, or interest thereon, such benefitted Lender shall
purchase for cash from the other Lenders a participating interest in such
portion of each such other Lender's Loans owing to it, or shall provide such
other Lenders with the benefits of any such collateral, or the proceeds thereof,
as shall be necessary to cause such benefitted Lender to share the excess
payment or benefits of such collateral or proceeds ratably with each of the
Lenders; provided, however, that if all or any portion of such excess payment or
benefits is thereafter recovered from such benefitted Lender, such purchase
shall be rescinded, and the purchase price and benefits returned, to the extent
of such recovery, but without interest. The Borrower agrees that any Lender so
purchasing a participation from a Lender pursuant to this Section 13.3 may, to
the fullest extent permitted by law, exercise all of its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Person were the direct creditor of the Borrower in the amount of such
participation.
13.4. Survival. All covenants, agreements, representations and
warranties made herein shall survive the making by the Lenders of the Loans and
the issuance of the Letters of Credit and the execution and delivery to the
Lenders of this Agreement and the Notes and shall continue in full force and
effect so long as any of Obligations remain outstanding or any Lender has any
Revolving Credit Commitment hereunder or the Borrower has continuing obligations
hereunder unless otherwise provided herein. Whenever in this Agreement any of
the parties hereto is referred to, such reference shall be deemed to include the
successors and permitted assigns of such party and all covenants, provisions and
agreements by or on behalf of the Parent or the Borrower which are contained in
the Loan Documents shall inure to the benefit of the successors and permitted
assigns of the Lenders or any of them.
13.5. Expenses. The Borrower agrees to pay on demand all costs and
expenses of the Agent in connection with the syndication, preparation,
execution, delivery, administration,
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modification, and amendment of this Agreement, the other Loan Documents, and the
other documents to be delivered hereunder, including, without limitation, the
reasonable fees and expenses of counsel for the Agent with respect thereto and
with respect to advising the Agent as to its rights and responsibilities under
the Loan Documents. The Borrower further agrees to pay on demand all costs and
expenses of the Agent and the Lenders, if any (including, without limitation,
reasonable attorneys' fees and expenses and the cost of internal counsel), in
connection with the enforcement (whether through negotiations, legal
proceedings, or otherwise) of the Loan Documents and the other documents to be
delivered hereunder.
13.6. Amendments and Waivers. Any provision of this Agreement or any
other Loan Document may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed by the Borrower and the Required Lenders
(and, if Article XII or the rights or duties of the Agent are affected thereby,
by the Agent); provided that no such amendment or waiver shall, unless signed by
all the Lenders, (i) increase the Revolving Credit Commitment of the Lenders or
the Total Revolving Credit Commitment, (ii) reduce the principal of or rate of
interest on any Revolving Loan or any fees or other amounts payable hereunder,
(iii) postpone any date fixed for the payment of any scheduled installment of
principal of or interest on any Revolving Loan or any fees or other amounts
payable hereunder or for termination of any Revolving Credit Loan Commitment, or
(iv) change the percentage of the Revolving Credit Loan Commitment or of the
unpaid principal amount of the Revolving Notes, or the number of Lenders, which
shall be required for the Lenders or any of them to take any action under this
Section 13.6 or any other provision of this Agreement or (v) release any
Guarantor or all or substantially all of the Collateral; and provided, further,
that no such amendment or waiver that affects the rights, privileges or
obligations of NationsBank as provider of Swing Line Loans, shall be effective
unless signed in writing by NationsBank or that affects privileges or
obligations of the Issuing Bank as issuer of Letters of Credit, shall be
effective unless signed in writing by the Issuing Bank.
No notice to or demand on the Borrower in any case shall entitle the
Borrower to any other or further notice or demand in similar or other
circumstances, except as otherwise expressly provided herein. No delay or
omission on any Lender's or the Agent's part in exercising any right, remedy or
option shall operate as a waiver of such or any other right, remedy or option or
of any Default or Event of Default.
13.7. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, and it shall not be necessary in making proof of this Agreement to
produce or account for more than one such fully- executed counterpart.
13.8. Termination. The termination of this Agreement shall not affect
any rights of the Parent, the Borrower, the Lenders or the Agent or any
obligation of the Parent, the Borrower, the Lenders or the Agent, arising prior
to the effective date of such termination, and the provisions hereof shall
continue to be fully operative until all transactions entered into or rights
created or obligations incurred prior to such termination have been fully
disposed of, concluded or liquidated and the Obligations arising prior to or
after such termination have been
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irrevocably paid in full. The rights granted to the Agent for the benefit of
the Lenders under the Loan Documents shall continue in full force and effect,
notwithstanding the termination of this Agreement, until all of the Obligations
have been paid in full after the termination hereof (other than Obligations in
the nature of continuing indemnities or expense reimbursement obligations not
yet due and payable, which shall continue) or the Parent and the Borrower have
furnished the Lenders and the Agent with an indemnification satisfactory to the
Agent and each Lender with respect thereto. All representations, warranties,
covenants, waivers and agreements contained herein shall survive termination
hereof until payment in full of the Obligations unless otherwise provided
herein. Notwithstanding the foregoing, if after receipt of any payment of all or
any part of the Obligations, any Lender is for any reason compelled to surrender
such payment to any Person because such payment is determined to be void or
voidable as a preference, impermissible setoff, a diversion of trust funds or
for any other reason, this Agreement shall continue in full force and the Parent
and the Borrower shall be liable to, and shall indemnify and hold the Agent or
such Lender harmless for, the amount of such payment surrendered until the Agent
or such Lender shall have been finally and irrevocably paid in full. The
provisions of the foregoing sentence shall be and remain effective
notwithstanding any contrary action which may have been taken by the Agent or
the Lenders in reliance upon such payment, and any such contrary action so taken
shall be without prejudice to the Agent or the Lenders' rights under this
Agreement and shall be deemed to have been conditioned upon such payment having
become final and irrevocable.
13.9. Indemnification; Limitation of Liability. (a) The Parent and the
Borrower agree to indemnify and hold harmless the Agent and each Lender and each
of their affiliates and their respective officers, directors, employees, agents,
and advisors (each, an "Indemnified Party") from and against any and all claims,
damages, losses, liabilities, costs, and expenses (including, without
limitation, reasonable attorneys' fees) that may be incurred by or asserted or
awarded against any Indemnified Party, in each case arising out of or in
connection with or by reason of (including, without limitation, in connection
with any investigation, litigation, or proceeding or preparation of defense in
connection therewith) the Loan Documents, any of the transactions contemplated
herein or therein or the actual or proposed use of the proceeds of the Loans,
except to the extent such claim, damage, loss, liability, cost, or expense is
found in a final, non-appealable judgment by a court of competent jurisdiction
to have resulted from such Indemnified Party's gross negligence or willful
misconduct. In the case of an investigation, litigation or other proceeding to
which the indemnity in this Section 13.9 applies, such indemnity shall be
effective whether or not such investigation, litigation or proceeding is brought
by the Parent or the Borrower or any of their directors, shareholders or
creditors or an Indemnified Party or any other Person or any Indemnified Party
is otherwise a party thereto and whether or not the transactions contemplated
hereby are consummated. The Parent and the Borrower agree that no Indemnified
Party shall have any liability (whether direct or indirect, in contract or tort
or otherwise) to it, any of its Subsidiaries, any Guarantor, or any security
holders or creditors thereof arising out of, related to or in connection with
the transactions contemplated herein, except to the extent that such liability
is found in a final non-appealable judgment by a court of competent jurisdiction
to have directly resulted from such Indemnified Party's gross negligence or
willful misconduct. The Parent and the Borrower agree not to assert any claim
against the Agent, any Lender, any of their affiliates, or any of their
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respective directors, officers, employees, attorneys, agents, and advisers, on
any theory of liability, for special, indirect, consequential, or punitive
damages arising out of or otherwise relating to the Loan Documents, any of the
transactions contemplated herein or the actual or proposed use of the proceeds
of the Loans.
(b) Without prejudice to the survival of any other agreement of the
Parent and the Borrower hereunder, the agreements and obligations of the Parent
and the Borrower contained in this Section 13.9 shall survive the payment in
full of the Loans and all other amounts payable under this Agreement.
13.10. Severability. If any provision of this Agreement or the other
Loan Documents shall be determined to be illegal or invalid as to one or more of
the parties hereto, then such provision shall remain in effect with respect to
all parties, if any, as to whom such provision is neither illegal nor invalid,
and in any event all other provisions hereof shall remain effective and binding
on the parties hereto.
13.11. Entire Agreement. This Agreement, together with the other Loan
Documents, constitutes the entire agreement among the parties with respect to
the subject matter hereof and supersedes all previous proposals, negotiations,
representations, Eurodollar Rate Loans and other communications between or among
the parties, both oral and written, with respect thereto.
13.12. Agreement Controls. In the event that any term of any of the
Loan Documents other than this Agreement conflicts with any express term of this
Agreement, the terms and provisions of this Agreement shall control to the
extent of such conflict.
13.13. Usury Savings Clause. Notwithstanding any other provision
herein, the aggregate interest rate charged under any of the Notes, including
all charges or fees in connection therewith deemed in the nature of interest
under applicable law shall not exceed the Highest Lawful Rate (as such term is
defined below). If the rate of interest (determined without regard to the
preceding sentence) under this Agreement at any time exceeds the Highest Lawful
Rate (as defined below), the outstanding amount of the Loans made hereunder
shall bear interest at the Highest Lawful Rate until the total amount of
interest due hereunder equals the amount of interest which would have been due
hereunder if the stated rates of interest set forth in this Agreement had at all
times been in effect. In addition, if when the Loans made hereunder are repaid
in full the total interest due hereunder (taking into account the increase
provided for above) is less than the total amount of interest which would have
been due hereunder if the stated rates of interest set forth in this Agreement
had at all times been in effect, then to the extent permitted by law, the
Borrower shall pay to the Agent an amount equal to the difference between the
amount of interest paid and the amount of interest which would have been paid if
the Highest Lawful Rate had at all times been in effect. Notwithstanding the
foregoing, it is the intention of the Lenders and the Borrower to conform
strictly to any applicable usury laws. Accordingly, if any Lender contracts for,
charges, or receives any consideration which constitutes interest in excess of
the Highest Lawful Rate, then any such excess shall be cancelled automatically
and, if previously paid, shall at such
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Lender's option be applied to the outstanding amount of the Loans made hereunder
or be refunded to the Borrower. As used in this paragraph, the term "Highest
Lawful Rate" means the maximum lawful interest rate, if any, that at any time or
from time to time may be contracted for, charged, or received under the laws
applicable to such Lender which are presently in effect or, to the extent
allowed by law, under such applicable laws which may hereafter be in effect and
which allow a higher maximum nonusurious interest rate than applicable laws now
allow.
13.14. Payments. All principal, interest, and other amounts to be paid
by the Borrower under this Agreement and the other Loan Documents shall be paid
to the Agent at the Principal Office in Dollars and in immediately available
funds, without setoff, deduction or counterclaim. Subject to the definition of
"Interest Period" herein, whenever any payment under this Agreement or any other
Loan Document shall be stated to be due on a day that is not a Business Day,
such payment may be made on the next succeeding Business Day, and such extension
of time in such case shall be included in the computation of interest and fees,
as applicable, and as the case may be.
13.15. GOVERNING LAW; WAIVER OF JURY TRIAL.
(A) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
(OTHER THAN THOSE SECURITY INSTRUMENTS WHICH EXPRESSLY PROVIDE
THAT THEY SHALL BE GOVERNED BY THE LAWS OF ANOTHER
JURISDICTION) SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF FLORIDA APPLICABLE
TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH
STATE.
(B) THE PARENT AND THE BORROWER HEREBY EXPRESSLY AND
IRREVOCABLY AGREE AND CONSENT THAT ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND
THE TRANSACTIONS CONTEMPLATED HEREIN MAY BE INSTITUTED IN ANY
STATE OR FEDERAL COURT SITTING IN THE COUNTY OF BROWARD, STATE
OF FLORIDA, UNITED STATES OF AMERICA AND, BY THE EXECUTION AND
DELIVERY OF THIS AGREEMENT, THE PARENT AND THE BORROWER
EXPRESSLY WAIVE ANY OBJECTION THAT IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF VENUE IN, OR TO THE EXERCISE OF
JURISDICTION OVER IT AND ITS PROPERTY BY, ANY SUCH COURT IN
ANY SUCH SUIT, ACTION OR PROCEEDING, AND THE BORROWER HEREBY
IRREVOCABLY SUBMITS GENERALLY AND UNCONDITIONALLY TO THE
JURISDICTION OF ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR
PROCEEDING.
(C) EACH OF THE PARENT AND THE BORROWER AGREES
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THAT SERVICE OF PROCESS MAY BE MADE BY PERSONAL SERVICE OF A COPY OF
THE SUMMONS AND COMPLAINT OR OTHER LEGAL PROCESS IN ANY SUCH SUIT,
ACTION OR PROCEEDING, OR BY REGISTERED OR CERTIFIED MAIL (POSTAGE
PREPAID) TO THE ADDRESS OF THE PARENT AND THE BORROWER PROVIDED IN
SECTION 13.2, OR BY ANY OTHER METHOD OF SERVICE PROVIDED FOR UNDER THE
APPLICABLE LAWS IN EFFECT IN THE STATE OF FLORIDA.
(D) NOTHING CONTAINED IN SUBSECTIONS (A) OR (B) HEREOF SHALL
PRECLUDE THE AGENT OR ANY LENDER FROM BRINGING ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT IN THE
COURTS OF ANY JURISDICTION WHERE THE PARENT OR THE BORROWER OR ANY OF
THE PARENT'S OR BORROWER'S PROPERTY OR ASSETS MAY BE FOUND OR LOCATED.
TO THE EXTENT PERMITTED BY THE APPLICABLE LAWS OF ANY SUCH
JURISDICTION, THE PARENT AND THE BORROWER HEREBY IRREVOCABLY SUBMIT TO
THE JURISDICTION OF ANY SUCH COURT AND EXPRESSLY WAIVES, IN RESPECT OF
ANY SUCH SUIT, ACTION OR PROCEEDING, OBJECTION TO THE EXERCISE OF
JURISDICTION OVER IT AND ITS PROPERTY BY ANY SUCH OTHER COURT OR COURTS
WHICH NOW OR HEREAFTER MAY BE AVAILABLE UNDER APPLICABLE LAW.
(E) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS OR REMEDIES UNDER OR RELATED TO ANY LOAN DOCUMENT OR ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN
THE FUTURE BE DELIVERED IN CONNECTION THEREWITH, THE PARENT, THE
BORROWER, THE AGENT AND THE LENDERS HEREBY AGREE, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, THAT ANY SUCH ACTION OR PROCEEDING SHALL
BE TRIED BEFORE A COURT AND NOT BEFORE A JURY AND HEREBY IRREVOCABLY
WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PERSON
MAY HAVE TO TRIAL BY JURY IN ANY SUCH ACTION OR PROCEEDING.
[Signatures on following pages]
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be made, executed and delivered by their duly authorized officers as of the day
and year first above written.
BORROWER:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ RETAIL, INC.
WITNESS:
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------- ---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------
Title: Senior Vice President and
Chief Financial Officer
-------------------------------------
GUARANTOR:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, INC.
WITNESS:
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------- ---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------
Title: Senior Vice President and
Chief Financial Officer
-------------------------------------
104
NATIONSBANK, NATIONAL ASSOCIATION,
as Agent for the Lenders
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
NATIONSBANK, NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
