Exhibit 10.7
EXECUTION COPY
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CREDIT AGREEMENT
Dated as of March 4, 1998,
among
JTM INDUSTRIES, INC.,
INDUSTRIAL SERVICES GROUP, INC.,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTY HERETO,
NATIONSBANK, N.A.,
as Administrative Agent and Issuing Lender
AND
CANADIAN IMPERIAL BANK OF COMMERCE,
as Documentation Agent
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NATIONSBANC XXXXXXXXXX SECURITIES LLC,
as Arranger
TABLE OF CONTENTS
SECTION 1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Computation of Time Periods. . . . . . . . . . . . . . . . . . . . 29
1.3 Accounting Terms . . . . . . . . . . . . . . . . . . . . . . . . . 29
1.4 Terms Generally. . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 2 CREDIT FACILITIES . . . . . . . . . . . . . . . . . . . . . . . . 30
2.1 Revolving Loans. . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.2 Letter of Credit Subfacility . . . . . . . . . . . . . . . . . . . 32
SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES. . . . . . . . . . 37
3.1 Default Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
3.2 Extension and Conversion . . . . . . . . . . . . . . . . . . . . . 38
3.3 Prepayments. . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
3.4 Termination and Reduction of Commitments . . . . . . . . . . . . . 41
3.5 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
3.6 Increased Cost and Reduced Return. . . . . . . . . . . . . . . . . 43
3.7 Limitation on Types of Loans . . . . . . . . . . . . . . . . . . . 44
3.8 Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
3.9 Treatment of Affected Loans. . . . . . . . . . . . . . . . . . . . 45
3.10 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
3.11 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
3.12 Pro Rata Treatment . . . . . . . . . . . . . . . . . . . . . . . . 48
3.13 Sharing of Payments. . . . . . . . . . . . . . . . . . . . . . . . 48
3.14 Payments, Computations, Etc. . . . . . . . . . . . . . . . . . . . 49
3.15 Evidence of Debt . . . . . . . . . . . . . . . . . . . . . . . . . 51
3.16 Assignment of Commitments Under Certain Circumstances . . . . . . 52
SECTION 4 CONDITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
4.1 Closing Conditions . . . . . . . . . . . . . . . . . . . . . . . . 52
4.2 Conditions to all Extensions of Credit . . . . . . . . . . . . . . 58
SECTION 5 REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . . 59
5.1 Financial Condition. . . . . . . . . . . . . . . . . . . . . . . . 59
5.2 Certain Payments . . . . . . . . . . . . . . . . . . . . . . . . . 60
5.3 Organization and Good Standing . . . . . . . . . . . . . . . . . . 61
5.4 Power; Authorization; Enforceable Obligations. . . . . . . . . . . 61
5.5 No Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
5.6 No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
5.7 Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
5.8 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
5.9 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
5.10 Compliance with Law. . . . . . . . . . . . . . . . . . . . . . . . 62
5.11 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
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5.12 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
5.13 Governmental Regulations, Etc. . . . . . . . . . . . . . . . . . . 65
5.14 Purpose of Loans and Letters of Credit . . . . . . . . . . . . . . 65
5.15 Environmental Matters. . . . . . . . . . . . . . . . . . . . . . . 66
5.16 Intellectual Property. . . . . . . . . . . . . . . . . . . . . . . 67
5.17 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
5.18 Investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
5.19 Location of Collateral . . . . . . . . . . . . . . . . . . . . . . 68
5.20 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
5.21 No Burdensome Restrictions; Material Agreements. . . . . . . . . . 69
5.22 Brokers' Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . 70
5.23 Labor Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . 70
5.24 Nature of Business . . . . . . . . . . . . . . . . . . . . . . . . 70
5.25 Representations and Warranties from Other Agreements . . . . . . . 70
5.26 Security Documents . . . . . . . . . . . . . . . . . . . . . . . . 70
5.27 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . 71
5.28 Ownership. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
5.29 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
5.30 Certain Transactions . . . . . . . . . . . . . . . . . . . . . . . 72
5.31 Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 6 AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . 73
6.1 Information Covenants. . . . . . . . . . . . . . . . . . . . . . . 73
6.2 Preservation of Existence and Franchises.. . . . . . . . . . . . . 77
6.3 Books and Records. . . . . . . . . . . . . . . . . . . . . . . . . 77
6.4 Compliance with Law. . . . . . . . . . . . . . . . . . . . . . . . 77
6.5 Payment of Taxes and Other Indebtedness. . . . . . . . . . . . . . 77
6.6 Insurance; Certain Proceeds. . . . . . . . . . . . . . . . . . . . 78
6.7 Maintenance of Property. . . . . . . . . . . . . . . . . . . . . . 79
6.8 Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . 80
6.9 Audits/Inspections . . . . . . . . . . . . . . . . . . . . . . . . 80
6.10 Additional Credit Parties. . . . . . . . . . . . . . . . . . . . . 80
6.11 Pledged Assets . . . . . . . . . . . . . . . . . . . . . . . . . . 81
6.12 Interest Rate Protection Agreements. . . . . . . . . . . . . . . . 82
6.13 Senior Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
6.14 Real Property Collateral . . . . . . . . . . . . . . . . . . . . . 82
6.15 Post-Closing Conditions. . . . . . . . . . . . . . . . . . . . . . 83
SECTION 7 NEGATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . 83
7.1 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
7.2 Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
7.3 Nature of Business . . . . . . . . . . . . . . . . . . . . . . . . 85
7.4 Consolidation, Merger, Dissolution, etc. . . . . . . . . . . . . . 85
7.5 Asset Dispositions . . . . . . . . . . . . . . . . . . . . . . . . 86
7.6 Investments; Acquisitions. . . . . . . . . . . . . . . . . . . . . 87
7.7 Restricted Payments. . . . . . . . . . . . . . . . . . . . . . . . 87
7.8 Prepayments of Indebtedness, etc . . . . . . . . . . . . . . . . . 87
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7.9 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . 87
7.10 Fiscal Year; Organizational Documents. . . . . . . . . . . . . . . 88
7.11 Limitation on Restricted Actions . . . . . . . . . . . . . . . . . 88
7.12 Ownership of Subsidiaries; Limitations on Parent and Borrower. . . 89
7.13 Sale Leasebacks. . . . . . . . . . . . . . . . . . . . . . . . . . 90
7.14 Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . 90
7.15 No Further Negative Pledges. . . . . . . . . . . . . . . . . . . . 90
7.16 Operating Lease Obligations. . . . . . . . . . . . . . . . . . . . 90
7.17 Impairment of Security Interests . . . . . . . . . . . . . . . . . 90
7.18 Sales of Receivables . . . . . . . . . . . . . . . . . . . . . . . 90
7.19 Financial Covenants. . . . . . . . . . . . . . . . . . . . . . . . 90
7.20 Xxxxx Cash Accounts. . . . . . . . . . . . . . . . . . . . . . . . 91
SECTION 8 EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . 91
8.1 Events of Default. . . . . . . . . . . . . . . . . . . . . . . . . 91
8.2 Acceleration; Remedies . . . . . . . . . . . . . . . . . . . . . . 94
8.3 Equitable Remedies.. . . . . . . . . . . . . . . . . . . . . . . . 95
SECTION 9 AGENCY PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . 96
9.1 Appointment, Powers and Immunities . . . . . . . . . . . . . . . . 96
9.2 Reliance by Agents . . . . . . . . . . . . . . . . . . . . . . . . 96
9.3 Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
9.4 Rights as Lender . . . . . . . . . . . . . . . . . . . . . . . . . 97
9.5 Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . 98
9.6 Non-Reliance on Agents and Other Lenders . . . . . . . . . . . . . 98
9.7 Resignation of Administrative Agent. . . . . . . . . . . . . . . . 98
SECTION 10 MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . 99
10.1 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
10.2 Right of Set-Off . . . . . . . . . . . . . . . . . . . . . . . . . 100
10.3 Benefit of Agreement . . . . . . . . . . . . . . . . . . . . . . . 100
10.4 No Waiver; Remedies Cumulative . . . . . . . . . . . . . . . . . . 102
10.5 Expenses; Indemnification. . . . . . . . . . . . . . . . . . . . . 103
10.6 Amendments, Waivers and Consents . . . . . . . . . . . . . . . . . 104
10.7 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
10.8 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
10.9 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
10.10 Governing Law; Submission to Jurisdiction; Venue. . . . . . . . . 106
10.11 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . 107
10.12 Entirety. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
10.13 Binding Effect; Termination . . . . . . . . . . . . . . . . . . . 107
10.14 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . 108
10.15 Source of Funds . . . . . . . . . . . . . . . . . . . . . . . . . 108
10.16 Conflict. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
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SCHEDULES
Schedule 1.1A Investments
Schedule 1.1B Liens
Schedule 1.1C Lenders
Schedule 5.1 Liabilities
Schedule 5.4 Required Consents, Authorizations, Notices and Filings
Schedule 5.8 Litigation
Schedule 5.10 Compliance with Law
Schedule 5.11 ERISA
Schedule 5.12 Subsidiaries
Schedule 5.15 Environmental Matters
Schedule 5.16 Intellectual Property
Schedule 5.19 Properties
Schedule 5.21 Material Contracts
Schedule 5.23 Labor Matters
Schedule 5.26 Recordings
Schedule 5.27 Transactions with Affiliates
Schedule 5.28 Ownership
Schedule 5.29 Insurance
Schedule 5.31 Licenses
Schedule 7.1 Indebtedness
Schedule 7.9 Transactions with Affiliates
EXHIBITS
Exhibit A Form of Assignment and Acceptance
Exhibit B Form of Depository Bank Agreement
Exhibit C Form of Indemnity, Subrogation and Contribution Agreement
Exhibit D Form of Intercompany Note
Exhibit E Form of Joinder Agreement
Exhibit F Form of Notice of Borrowing
Exhibit G Form of Notice of Extension/Conversion
Exhibit H Form of Parent Guarantee Agreement
Exhibit I Form of Perfection Certificate
Exhibit J Form of Security Agreement
Exhibit K Form of Subsidiaries Guarantee Agreement
Exhibit L Form of Revolving Note
Exhibit M-1 Form of Legal Opinion (General External Counsel)
Exhibit M-2 Form of Legal Opinion (Local Corporate Counsel)
Exhibit M-3 Form of Legal Opinion (Local Collateral Counsel)
Exhibit N Form of Officer's Compliance Certificate
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CREDIT AGREEMENT dated as of March 4, 1998 (as amended, modified, restated
or supplemented from time to time, this "AGREEMENT"), among JTM INDUSTRIES,
INC., a Texas corporation (the "BORROWER"), INDUSTRIAL SERVICES GROUP, INC., a
Delaware corporation (the "PARENT"), the Lenders (as defined herein),
NATIONSBANK, N.A., as Administrative Agent for the Lenders (in such capacity,
the "ADMINISTRATIVE AGENT") and Issuing Lender, and CANADIAN IMPERIAL BANK OF
COMMERCE, as Documentation Agent ("CIBC" or the "DOCUMENTATION AGENT").
The Parent and the Borrower have requested that the Lenders provide credit
facilities to the Borrower in the aggregate principal amount of $42,000,000 for
the purposes hereinafter set forth. The Lenders have agreed to make the
requested credit facilities available to the Borrower on the terms and subject
to the conditions hereinafter set forth. Accordingly, the parties hereto agree
as follows:
SECTION 1
DEFINITIONS
1.1 DEFINITIONS. As used in this Agreement, the following terms shall
have the meanings specified below unless the context otherwise requires:
"ACQUISITION" shall mean the transactions contemplated by the Acquisition
Agreement.
"ACQUISITION AGREEMENT" shall mean, collectively, (i) the Purchase
Agreement dated as of February 27, 1998, by and among the Borrower, PRI and the
Sellers, (ii) the Kokan Escrow Agreement dated as of March 4, 1998 among the
Borrower, Kokan and The Chase Manhattan Bank, acting through its London Branch,
as Escrow Agent, (iii) the Tax Escrow Agreement dated as of March 4, 1998 among
the Borrower, the Sellers and The Chase Manhattan Bank, N.A., as Escrow Agent,
(iv) the Phase II Escrow Agreement dated as of March 4, 1998 among the Borrower,
the Sellers and The Chase Manhattan Bank, N.A., as Escrow Agent and (v)
Indemnification and Guarantee Agreement dated as of February 27, 1998 among the
Borrower, the Parent and Xxxxxxxxx Trust, a trust formed under the laws of Hong
Kong.
"ADDITIONAL SUBSIDIARY GUARANTOR" shall mean each Person that becomes a
Subsidiary Guarantor after the Closing Date by execution of a Joinder Agreement.
"ADJUSTED EURODOLLAR RATE" shall mean the Eurodollar Rate PLUS 2.50%.
"ADJUSTED BASE RATE" shall mean the Base Rate PLUS 1.25%.
"ADMINISTRATIVE AGENT" shall have the meaning assigned to such term in the
heading hereof, together with its successors.
"AFFECTED LOANS" shall have the meaning assigned to such term in
Section 3.9.
"AFFECTED TYPE" shall have the meaning assigned to such term in
Section 3.9.
"AFFILIATE" shall mean (a) with respect to any Person (including the
Consolidated Parties), any other Person directly or indirectly controlling or
controlled by or under direct or indirect common control with such Person and
(b) with respect to any of the Consolidated Parties, any Person directly or
indirectly owning or holding five percent (5%) or more of the equity interest in
such Person. For purposes of this definition, "control" when used with respect
to any Person shall mean the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"AGENCY SERVICES ADDRESS" shall mean NationsBank, N.A., NC1-001-15-04,
000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, Attn: Xxxx Xxxx Agency
Services, or such other address as may be identified by written notice from the
Administrative Agent to the Borrower.
"AGENTS" shall mean the Administrative Agent and the Documentation Agent.
"AGENT'S FEE LETTER" shall mean the letter agreement, dated as of February
20, 1998, among the Administrative Agent, NMS, the Documentation Agent and the
Borrower, as amended, modified, restated or supplemented from time to time.
"APPLICABLE LENDING OFFICE" shall mean, 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 Schedule 1.1C or such other office of such
Lender (or an Affiliate of such Lender) as such Lender may from time to time
specify to the Administrative 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.
"ASSET DISPOSITION" shall mean the disposition of any or all of the assets
of any Consolidated Party (including the Capital Stock of a Subsidiary), whether
by sale, lease (including any Sale and Leaseback Transaction), transfer,
Casualty, Condemnation or otherwise; PROVIDED that the foregoing definition
shall not be deemed to imply that any such Asset Disposition is permitted under
this Agreement. The term "Asset Disposition" shall not include any Equity
Issuance.
"ASSIGNMENT AND ACCEPTANCE" shall mean an assignment and acceptance entered
into by a Lender and its assignee in the form of EXHIBIT A or such other similar
form as shall be approved by the Administrative Agent.
"BANKRUPTCY CODE" shall mean the Bankruptcy Code in Title 11 of the United
States Code, as amended, modified, succeeded or replaced from time to time.
"BANKRUPTCY EVENT" shall mean, with respect to any Person, the occurrence
of any of the following with respect to such Person: (a) a court or governmental
agency having jurisdiction in the premises shall enter a decree or order for
relief in respect of such Person
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in an involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of such Person
or for any substantial part of its Property or ordering the winding up or
liquidation of its affairs; or (b) there shall be commenced against such Person
an involuntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, or any case, proceeding or other action for the
appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of such Person or for any substantial part of
its Property or for the winding up or liquidation of its affairs, and such
involuntary case or other case, proceeding or other action shall remain
undismissed, undischarged or unbonded for a period of sixty (60) consecutive
days; or (c) such Person shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
consent to the entry of an order for relief in an involuntary case under any
such law, or consent to the appointment or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar official) of
such Person or for any substantial part of its Property or make any general
assignment for the benefit of creditors; or (d) such Person shall be unable to,
or shall admit in writing its inability to, pay its debts generally as they
become due.
"BASE RATE" shall mean, for any day, the rate per annum equal to the higher
of (a) the Federal Funds Rate for such day plus one-half of one percent (0.5%)
and (b) the Prime Rate for such day. Any change in the Base Rate due to a
change in the Federal Funds Rate or the Prime Rate shall be effective on the
effective date of such change in the Federal Funds Rate or the Prime Rate.
"BASE RATE LOAN" shall mean any Loan bearing interest at a rate determined
by reference to the Base Rate.
"BORROWER" shall mean the Person identified as such in the heading hereof,
together with its permitted successors and assigns.
"BUSINESS DAY" shall mean a day (other than a Saturday, Sunday or other day
on which commercial banks in Charlotte, North Carolina or New York, New York are
authorized or required by law to close), EXCEPT THAT, when used in connection
with a Eurodollar Loan, such day shall also be a day on which dealings between
banks are carried on in U.S. dollar deposits in London, England.
"BUSINESSES" shall have the meaning assigned to such term in Section 5.16.
"CCT" shall mean CCT Partners IV, L.P., a New York limited partnership.
"CVC CO-INVESTORS shall mean, collectively, the Natasha Partnership,
Xxxxxxx Xxxxxx, Xxxxx Xxxxxx and Xxxxxx Xxxxxxxxx.
"CVC SUBSCRIPTION AGREEMENT" shall mean the CVC Subscription Agreement
among the Parent, the Sponsor, CCT and the CVC Co-Investors dated as of October
14, 1997.
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"CIBC" shall have the meaning assigned to such term in the heading hereof,
together with its successors.
"CAPITAL LEASE" shall mean, as applied to any Person, any lease of any
Property (whether real, personal or mixed) by that Person as lessee which, in
accordance with GAAP, is or should be accounted for as a capital lease on the
balance sheet of such Person.
"CAPITAL STOCK" shall mean (a) in the case of a corporation, capital stock,
(b) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
capital stock, (c) in the case of a partnership, partnership interests (whether
general or limited), (d) in the case of a limited liability company, membership
interests, (e) any other interest or participation that confers on a Person the
right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person and (f) all rights to purchase, warrants, options
and other securities exercisable for, exchangeable for or convertible into any
of the foregoing.
"CASH EQUIVALENTS" shall mean (a) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (PROVIDED that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than twelve (12) months from the date of acquisition, (b) U.S. dollar
denominated certificates of deposit of (i) any Lender, (ii) any domestic
commercial bank of recognized standing having capital and surplus in excess of
$500,000,000 or (iii) any bank whose short-term commercial paper rating from S&P
is at least A-1 or the equivalent thereof or from Xxxxx'x is at least P-1 or the
equivalent thereof (any such bank being an "APPROVED BANK"), in each case with
maturities of not more than 270 days from the date of acquisition,
(c) commercial paper and variable or fixed rate notes issued by any Approved
Bank (or by the parent company thereof) or any variable rate notes issued by, or
guaranteed by, any domestic corporation rated A-1 (or the equivalent thereof) or
better by S&P or P-1 (or the equivalent thereof) or better by Moody's and
maturing within six (6) months of the date of acquisition, (d) repurchase
agreements with a bank or trust company (including any of the Lenders) or
recognized securities dealer having capital and surplus in excess of
$500,000,000 for direct obligations issued by or fully guaranteed by the United
States of America in which the Borrower or any Subsidiary shall have a perfected
first priority security interest (subject to no other Liens) and having, on the
date of purchase thereof, a fair market value of at least 100% of the amount of
the repurchase obligations and (e) Investments, classified in accordance with
GAAP as current assets, in money market investment programs registered under the
Investment Company Act of 1940, as amended, which are administered by reputable
financial institutions having capital of at least $500,000,000 and the
portfolios of which are limited to Investments of the character described in the
foregoing subdivisions (a) through (d).
"CASUALTY" shall mean any casualty or other loss, damage or destruction.
"CHANGE OF CONTROL" shall mean the occurrence of any of the following
events: (a) the Parent shall beneficially own less than 100% of the Capital
Stock of the Borrower (on a fully diluted basis); (b) any Person or "group"
(within the meaning of Rule 13d-5 under the Exchange Act), together with its
Affiliates, other than the Sponsor Group, shall beneficially
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own, directly or indirectly, Capital Stock of the Parent entitled to 35% or more
of the Total Voting Power of the Parent; (c) the Sponsor Group shall
beneficially own, directly or indirectly, outstanding shares of common stock of
the Parent entitled to less than (i) a majority of the Total Voting Power of the
Parent prior to an IPO by the Parent or (ii) 33% of the Total Voting Power of
the Parent after an IPO by the Parent; (d) the failure at any time of a majority
of the seats (excluding vacant seats) on the board of directors of the Borrower
to be occupied by persons who were nominated by or on behalf of the Sponsor
Group; or (e) the occurrence of a "Change of Control" under and as defined in
the Senior Note Agreement.
"CLASS A COMMON STOCK" shall mean the Parent's Class A Common Stock, par
value $.01 per share.
"CLASS B COMMON STOCK" shall mean the Parent's Class B Common Stock, par
value $.01 per share.
"CLOSING DATE" shall mean the date on which this Agreement is executed and
delivered by the parties hereto and the first Loans are made in accordance with
Section 4.
"CODE" shall mean the Internal Revenue Code of 1986, as amended, and any
successor statute thereto, as interpreted by the rules and regulations issued
thereunder, in each case as in effect from time to time. References to sections
of the Code shall be construed also to refer to any successor sections.
"COLLATERAL" shall mean all the collateral which is identified in, and at
any time is purported to be covered by, the Collateral Documents.
"COLLATERAL DOCUMENTS" shall mean the Security Agreement, the Perfection
Certificate, the Depository Bank Agreements and such other documents executed
and delivered in connection with the attachment and perfection of the
Administrative Agent's security interests and liens arising thereunder,
including UCC financing statements, patent and trademark filings and, with
respect to property acquired after the Closing Date, such other additional
security documents as the Administrative Agent shall reasonably request.
"COMMITMENT" shall mean (a) with respect to each Lender, the Revolving
Commitment of such Lender and (b) with respect to the Issuing Lender, the LOC
Commitment.
"COMMITMENT FEE" shall have the meaning assigned to such term in Section
3.5(b).
"COMMITMENT FEE CALCULATION PERIOD" shall have the meaning assigned to such
term in Section 3.5(b).
"COMPANY PROPERTIES" shall have the meaning assigned to such term in
Section 5.16.
5
"CONDEMNATION" shall mean any taking of Property, or any part thereof or
interest therein, for public or quasi-public use under the power of eminent
domain, by reason of any public improvement or condemnation proceeding, or in
any other manner.
"CONDEMNATION AWARD" shall mean all proceeds of any Condemnation or
transfer in lieu thereof.
"CONSOLIDATED CAPITAL EXPENDITURES" shall mean, for any period, the sum of
all amounts that would, in accordance with GAAP, be included as additions to
property, plant and equipment and other capital expenditures on a consolidated
statement of cash flows for the Borrower and its Consolidated Subsidiaries
during such period (including the amount of assets leased under any Capital
Lease). Notwithstanding the foregoing, the term "Consolidated Capital
Expenditures" shall not include (a) capital expenditures in respect of the
reinvestment of Insurance Proceeds and Condemnation Awards received by the
Borrower and its Subsidiaries to the extent that such reinvestment is permitted
under the Credit Documents and (b) for purposes of Section 7.14 only, capital
expenditures for Permitted Acquisitions.
"CONSOLIDATED CASH INTEREST EXPENSE" shall mean, for any period, the gross
amount of interest expense of the Borrower and its Consolidated Subsidiaries,
determined on a consolidated basis in accordance with GAAP, during such period,
including (a) the portion of any payments or accruals with respect to Capital
Leases that are allocable to interest expense in accordance with GAAP, (b) net
costs under Interest Rate Protection Agreements during such period and (c) all
fees, charges, discounts and other costs paid in respect of Indebtedness during
such period; PROVIDED that (i) all non-cash interest expense shall be excluded
and (ii) any cash interest on Indebtedness of another Person that is guaranteed
by the Borrower or any of its Consolidated Subsidiaries or secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) a Lien on, or payable out of the proceeds of the
sale of or production from, assets of the Borrower or any of its Consolidated
Subsidiaries (whether or not such guarantee or Lien is called upon) shall be
included.
"CONSOLIDATED EBITDA" shall mean, for any period, the sum of (a)
Consolidated Net Income for such period, PLUS (b) an amount which, in the
determination of Consolidated Net Income for such period, has been deducted for
(i) interest expense, (ii) total federal, state, local and foreign income, value
added and similar taxes and (iii) depreciation and amortization expense, MINUS
(c) an amount which, in the determination of Consolidated Net Income for such
period, has been added for (i) interest income and (ii) any non-cash income or
non-cash gains, all as determined in accordance with GAAP.
"CONSOLIDATED NET INCOME" shall mean, for any period, net income (or loss)
after taxes of the Borrower and its Consolidated Subsidiaries, determined on a
consolidated basis in accordance with GAAP, for such period; PROVIDED that there
shall be excluded from such calculation of net income (or loss) (a) the income
of any Person in which any other Person (other than the Borrower or any of its
Subsidiaries) has any equity interest, except to the extent of the amount of
dividends or other distributions actually paid to the Borrower or any of its
Subsidiaries by such Person during such period, (b) the income (or loss) of any
Person
6
accrued prior to the date it becomes a Subsidiary of the Borrower or is merged
into or consolidated with the Borrower or any of its Subsidiaries or the date
such Person's assets are acquired by the Borrower or any of its Subsidiaries,
except as provided in the definition of Pro Forma Basis set forth in this
Section 1.1, (c) the income of any Subsidiary of the Borrower to the extent that
the declaration or payment of dividends or similar distributions by such
Subsidiary of that income is not at the time permitted by operation of the terms
of its charter or any agreement, instrument, judgment, decree, order, statute,
rule or governmental regulation applicable to such Subsidiary, (d) except for
purposes of Section 7.19(d), any after-tax gains or losses attributable to sales
of assets out of the ordinary course of business and (e) except for purposes of
Section 7.19(d), to the extent not included in clauses (a) through (d) above,
any non-cash extraordinary gains or non-cash extraordinary losses.
"CONSOLIDATED NET WORTH" shall mean, as of any date, shareholders' equity
or net worth of the Borrower and its Consolidated Subsidiaries, as determined on
a consolidated basis in accordance with GAAP, excluding amounts attributable to
Disqualified Stock.
"CONSOLIDATED PARTIES" shall mean the Parent, the Borrower and their
respective Subsidiaries, including, without limitation, PRI, and "CONSOLIDATED
PARTY" shall mean any one of them.
"CONSOLIDATED SUBSIDIARIES" of any Person shall mean all subsidiaries of
such Person that should be consolidated with such Person for financial reporting
purposes in accordance with GAAP.
"CONSOLIDATED TOTAL ASSETS" shall mean, as of any date, all assets which
would, in accordance with GAAP, be included on a consolidated balance sheet of
the Borrower and its Consolidated Subsidiaries as of such date as assets.
"CONTINUE", "CONTINUATION", and "CONTINUED" shall refer to the continuation
pursuant to Section 3.2 of a Fixed Rate Loan of one Type as a Fixed Rate Loan of
the same Type from one Interest Period to the next Interest Period.
"CONTRIBUTION AND ASSIGNMENT AGREEMENT" shall mean the Contribution and
Assignment Agreement dated as of October 14, 1997 between the Parent, R. Xxxxxxx
Xxxxxxx and Xxxx X. Xxxxxxx, XX.
"CONTRIBUTION AND SUBSCRIPTION AGREEMENT" among RACT, R. Xxxxxxx Xxxxxxx,
J. I. Everest, II and the Parent dated as of October 14, 1997.
"CONVERT", "CONVERSION", and "CONVERTED" shall refer to a conversion
pursuant to Section 3.2 or Section 3.9 of one Type of Loan into another Type of
Loan.
"CREDIT DOCUMENTS" shall mean a collective reference to this Agreement, the
Notes, the LOC Documents, each Joinder Agreement, the Collateral Documents, the
Parent Guarantee Agreement, the Subsidiaries Guarantee Agreement, the Indemnity,
Subrogation and Contribution Agreement, the Intercompany Notes, and all other
related agreements and documents issued or delivered hereunder or thereunder or
pursuant hereto or thereto (in each
7
case as the same may be amended, modified, restated, supplemented, extended,
renewed or replaced from time to time), and "CREDIT DOCUMENT" shall mean any one
of them.
"CREDIT OBLIGATIONS" shall mean, without duplication, (a) all of the
obligations of the Credit Parties to the Lenders, the Issuing Lender or the
Administrative Agent, whenever arising, under this Agreement, the Notes, the
Collateral Documents, the Parent Guarantee Agreement, the Subsidiaries Guarantee
Agreement or any of the other Credit Documents (including any interest accruing
after the occurrence of a Bankruptcy Event with respect to any Credit Party,
regardless of whether such interest is an allowed claim under the Bankruptcy
Code) and (b) all liabilities and obligations, whenever arising, owing from the
Borrower or any of its Subsidiaries under any Lender Hedging Agreement to any
Person that is or was a Lender (or an Affiliate of a Lender) at the time such
agreement was entered into).
"CREDIT PARTIES" shall mean the Parent, the Borrower and the Subsidiary
Guarantors, and "CREDIT PARTY" shall mean any one of them.
"DEBT ISSUANCE" shall mean the issuance of any Indebtedness for borrowed
money by any Consolidated Party; PROVIDED that the foregoing definition shall
not be deemed to imply that any such Debt Issuance is permitted under this
Agreement.
"DEFAULT" shall mean any event, act or condition which with notice or lapse
of time, or both, would constitute an Event of Default.
"DEJU SUBSCRIPTION AGREEMENT" shall mean the Subscription Agreement between
the Parent and Xxxx Xxxx dated as of October 14, 1997.
"DEPOSITORY BANK AGREEMENT" shall mean each agreement between any Credit
Party and any bank or other depository institution in substantially the form of
EXHIBIT B.
"DISQUALIFIED STOCK" of any Person shall mean (a) any Capital Stock of such
Person which by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable or exercisable), upon the happening
of any event or otherwise (i) matures or is mandatorily redeemable or subject to
any mandatory repurchase requirement, pursuant to a sinking fund obligation or
otherwise or (ii) is convertible into or exchangeable or exercisable for
Indebtedness or Disqualified Stock and (b) if such Person is a Subsidiary of the
Borrower, any Preferred Stock of such Person.
"DOCUMENTATION AGENT" shall mean the Person identified as such in the
heading hereof, together with its permitted successors and assigns.
"DOLLARS" and "$" shall mean dollars in lawful currency of the United
States of America.
"DOMESTIC SUBSIDIARY" shall mean, with respect to any Person, any
Subsidiary of such Person which is incorporated or organized under the laws of
any State of the United States or the District of Columbia.
8
"ELIGIBLE ASSIGNEE" shall mean: (a) any Lender; (b) any Affiliate of a
Lender; and (c) any other commercial bank, financial institution or "accredited
investor" (as defined in Regulation D under the Securities Act of 1933, as
amended) approved by the Administrative Agent and, unless an Event of Default
has occurred and is continuing at the time any assignment is effected in
accordance with Section 10.3(b), the Borrower, such approval not to be
unreasonably withheld or delayed by the Borrower and such approval to be deemed
given by the Borrower if no objection from the Borrower is received by the
assigning Lender and the Administrative Agent within two Business Days after
notice of such proposed assignment has been provided by the assigning Lender to
the Borrower; PROVIDED, HOWEVER, that neither the Borrower nor any Affiliate of
the Borrower shall qualify as an Eligible Assignee.
"EMPLOYMENT AGREEMENTS" shall mean, collectively, (i) the Employment
Agreement between the Parent and R. Xxxxxxx Xxxxxxx dated as of October 14,
1997, (ii) the Employment Agreement between the Parent and J. I. Everest, II
dated as of October 14, 1997 and (iii) the Employment Agreement between the
Parent and Xxxx Xxxx dated as of October 14, 1997.
"ENVIRONMENTAL LAWS" shall mean any and all applicable Federal, state,
local and foreign statutes, laws, regulations, ordinances, rules, judgments,
orders, decrees, permits, concessions, grants, franchises, licenses, approvals,
consents, authorizations, agreements or other governmental restrictions relating
to the environment or to emissions, discharges, releases or threatened releases
of pollutants, contaminants, chemicals or industrial, toxic or hazardous
substances or wastes into the environment, including, ambient air, surface
water, ground water, or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, chemicals or industrial, toxic or
hazardous substances or wastes.
"EQUITY ISSUANCE" shall mean any issuance by any Consolidated Party of any
Capital Stock to any Person or the receipt by any such Person of a capital
contribution from any other Person, including the issuance of any of its Capital
Stock pursuant to the exercise of options or warrants and the conversion of any
Indebtedness to equity; PROVIDED that the foregoing definition shall not be
deemed to imply that any such issuance is permitted under this Agreement.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto, including the rules and regulations
thereunder, all as the same may be in effect from time to time. References to
sections of ERISA shall be construed also to refer to any successor sections.
"ERISA AFFILIATE" shall mean an entity which is under common control with
any Consolidated Party within the meaning of Section 4001(a)(14) of ERISA, or is
a member of a group which includes any Consolidated Party and which is treated
as a single employer under Sections 414(b) or (c) of the Code.
"ERISA EVENT" shall mean (a) with respect to any Plan, the occurrence of a
Reportable Event or the substantial cessation of operations (within the meaning
of
9
Section 4062(e) of ERISA); (b) the withdrawal by any Consolidated Party or any
ERISA Affiliate from a Multiple Employer Plan during a plan year in which it was
a substantial employer (as such term is defined in Section 4001(a)(2) of ERISA),
or the termination of a Multiple Employer Plan; (c) the distribution of a notice
of intent to terminate or the actual termination of a Plan pursuant to Section
4041(a)(2) or 4041A of ERISA; (d) the institution of proceedings to terminate or
the actual termination of a Plan by the PBGC under Section 4042 of ERISA; (e)
any event or condition which might constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer, any
Plan; (f) the complete or partial withdrawal of any Consolidated Party or any
ERISA Affiliate from a Multiemployer Plan; (g) the conditions for imposition of
a lien under Section 302(f) of ERISA exist with respect to any Plan; or (h) the
adoption of an amendment to any Plan requiring the provision of security to such
Plan pursuant to Section 307 of ERISA.
"EURODOLLAR LOAN" shall mean any Loan bearing interest at a rate determined
by reference to the Eurodollar Rate.
"EURODOLLAR RATE" shall mean, for any Eurodollar Loan for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) determined by the Administrative Agent to be equal to the
quotient obtained by dividing (a) the Interbank Offered Rate for such Eurodollar
Loan for such Interest Period by (b) 1 minus the Reserve Requirement for such
Eurodollar Loan for such Interest Period.
"EVENT OF DEFAULT" shall have the meaning assigned to such term in Section
8.1.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended.
"EXCLUDED ASSET DISPOSITION" shall mean (a) any Asset Disposition by any
Consolidated Party to the Borrower or any of the Subsidiary Guarantors if (i)
the Credit Parties shall cause to be executed and delivered such documents,
instruments and certificates as the Administrative Agent may request so as to
cause the Credit Parties to be in compliance with the terms of Section 6.12
after giving effect to such Asset Disposition and (ii) after giving effect such
Asset Disposition, no Default or Event of Default exists, (b) the sale of
inventory in the ordinary course of business for fair value and on an arms'
length basis, (c) the liquidation or sale of Cash Equivalents for the account of
the Borrower and the Subsidiaries, (d) the sale, lease, transfer, assignment or
other disposition of assets (other than in connection with any Casualty or
Condemnation) of the Borrower or any of its Subsidiaries to any other Person to
the extent that the aggregate Net Cash Proceeds from such sale, lease, transfer,
assignment or other disposition do not exceed $50,000, so long as the fair
market value of all property disposed of as provided in this clause (d) does not
exceed $250,000 in the aggregate in any fiscal year of the Borrower, (e) the
disposition of machinery or equipment of the Borrower or any of its Subsidiaries
which will be replaced or upgraded with machinery or equipment put to a similar
use and owned by such Person, PROVIDED that (i) such replacement or upgraded
machinery and equipment is acquired within 90 days after such disposition, (ii)
the fair market value of all property disposed of as provided in this clause (e)
does not exceed $250,000 in the aggregate in any fiscal year of the Borrower and
(iii) upon their acquisition, such replacement assets become subject to the Lien
of the Administrative Agent in favor of the Lenders under the Collateral
Documents and (f) the
10
disposition of damaged, worn out or obsolete tangible asset in the ordinary
course of business and in a commercially reasonable manner.
"EXCLUDED DEBT ISSUANCE" shall mean any issuance of Indebtedness permitted
by Section 7.1(a), (c), (d), (e) and (g).
"EXCLUDED EQUITY ISSUANCE" shall mean (a) any issuance by any Subsidiary of
the Borrower of its Capital Stock to the Borrower or any other Subsidiary of the
Borrower, (b) any receipt by any Subsidiary of the Borrower of a capital
contribution from the Borrower or any other Subsidiary of the Borrower, (c) any
issuance by the Parent of ISG Common Stock pursuant to the exercise of the
Warrants and (d) the issuance of common stock of the Parent, the aggregate value
of which does not exceed $2,000,000, such common stock being issued in
connection with the financing of a Permitted Acquisition.
"EXCLUDED TAXES" shall mean (A) all present and future taxes, levies,
imposts, duties, deductions, fees, liabilities and similar charges imposed on or
measured by the overall net income of the Administrative Agent, any Lender or
its Applicable Lending Office, branch or subsidiary, and all franchise taxes,
taxes on doing business or taxes measured by capital or net worth imposed on the
Administrative Agent, any Lender or its Applicable Lending Office, branch or
subsidiary, in each case, imposed: (i) by the United States of America or any
political subdivision or taxing authority thereof or therein; (ii) by the
jurisdiction under the laws of which such Administrative Agent or such Lender is
organized, or in which its principal executive office may be located, or in
which it is doing business, or any nation within which such jurisdiction is
located or any political subdivision thereof; (iii) by the jurisdiction in which
the Administrative Agent or the Applicable Lending Office or other branch or
subsidiary of such Lender is located or doing business, or in which its
principal executive office may be located, or under the laws of which it is
organized, or by any nation within which any such jurisdiction is located or any
political subdivision thereof; or (iv) by reason of any connection between the
jurisdiction imposing such tax and the Administrative Agent or such Lender other
than a connection arising solely form this Agreement or any transaction
contemplated hereby; and (B) all present and future taxes, levies, imposts,
duties, deductions, withholdings, fees, liabilities and similar charges imposed
by reason of the failure of the Administrative Agent or any Lender to comply
with its obligations under Section 3.10(d).
"EXTEND", "EXTENSION", "EXTENDING" and "EXTENDED" shall refer to an
extension pursuant to Section 3.2 or Section 3.9 of existing Loans into a
subsequent permissible Interest Period.
"FEDERAL FUNDS RATE" shall mean, 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
11
Rate for such day shall be the average rate charged to the Administrative Agent
(in its individual capacity) on such day on such transactions as determined by
the Administrative Agent.
"FEES" shall mean all fees payable pursuant to Section 3.5.
"FIXED RATE LOANS" shall mean Eurodollar Loans.
"FOREIGN SUBSIDIARY" shall mean, with respect to any Person, any Subsidiary
of such Person which is not a Domestic Subsidiary of such Person.
"FUNDED INDEBTEDNESS" shall mean, with respect to any Person, without
duplication, (a) all Indebtedness of such Person other than Indebtedness of the
types referred to in clause (e), (f), (g), (i) and (k) of the definition of
"Indebtedness" set forth in this Section 1.1, (b) all Indebtedness of another
Person of the type referred to in clause (a) above secured by (or for which the
holder of such Funded Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on, or payable out of the proceeds of
production from, Property owned or acquired by such Person, whether or not the
obligations secured thereby have been assumed, (c) all Guaranty Obligations of
such Person with respect to Indebtedness of the type referred to in clause (a)
above of another Person and (d) Indebtedness of the type referred to in clause
(a) above of any partnership or unincorporated joint venture in which such
Person is general partner or for which such Person is otherwise legally
obligated or has a reasonable expectation of being liable with respect thereto.
"GAAP" shall mean generally accepted accounting principles in the United
States applied on a consistent basis, subject to the terms of Section 1.3.
"GOVERNMENT ACTS" shall have the meaning assigned to such term in
Section 2.2(i).
"GOVERNMENTAL AUTHORITY" shall mean any Federal, state, local or foreign
court or governmental agency, commission, board, bureau, authority,
instrumentality or judicial or regulatory body or entity.
"GUARANTORS" shall mean the Parent and each of the Subsidiary Guarantors,
together with their successors and permitted assigns, and "GUARANTOR" shall mean
any one of them.
"GUARANTY OBLIGATIONS" shall mean, with respect to any Person, without
duplication, any obligations of such Person (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or collection)
guaranteeing any Indebtedness of any other Person in any manner, whether direct
or indirect, and including any obligation, whether or not contingent, (a) to
purchase any such Indebtedness or any Property constituting security therefor,
(b) to advance or provide funds or other support for the payment or purchase of
any such Indebtedness or to maintain working capital, solvency or other balance
sheet condition of such other Person (including keep well agreements,
maintenance agreements, comfort letters or similar agreements or arrangements)
for the benefit of any holder of Indebtedness of such other Person or (c) to
lease or purchase Property, securities or services primarily for the purpose of
assuring the holder of such Indebtedness against loss in respect thereof. For
12
purposes hereof, the amount of any Guaranty Obligation shall (subject to any
limitations set forth therein) be deemed to be an amount equal to the
outstanding principal amount (or maximum principal amount, if larger) of the
Indebtedness in respect of which such Guaranty Obligation is made.
"ISG COMMON STOCK" shall mean, collectively, the Class A Common Stock and
the Class B Common Stock.
"INDEBTEDNESS" of any Person shall mean (a) all obligations of such Person
for borrowed money, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, or upon which interest payments are
customarily made, (c) all obligations of such Person under conditional sale or
other title retention agreements relating to Property purchased by such Person
(other than customary reservations or retentions of title under agreements with
suppliers entered into in the ordinary course of business), (d) all obligations
of such Person issued or assumed as the deferred purchase price of Property or
services purchased by such Person (other than trade debt incurred in the
ordinary course of business and due within six (6) months of the incurrence
thereof) which would appear as liabilities on a balance sheet of such Person,
(e) all obligations of such Person under take-or-pay or similar arrangements or
under commodities agreements, (f) all Indebtedness of others secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on, or payable out of the proceeds of
production from, Property owned or acquired by such Person, whether or not the
obligations secured thereby have been assumed, (g) all Guaranty Obligations of
such Person, (h) the principal portion of all obligations of such Person under
Capital Leases, (i) all net payment obligations of such Person under Interest
Rate Protection Agreements or foreign currency exchange agreements, (j) the
maximum amount of all standby letters of credit issued or bankers' acceptances
facilities created for the account of such Person and, without duplication, all
drafts drawn thereunder (to the extent unreimbursed), (k) all Disqualified Stock
of such Person and (l) and the Indebtedness of any partnership or unincorporated
joint venture in which such Person is a general partner or a joint venturer.
"INDEMNIFIED PARTY" shall have the meaning assigned to such term in Section
10.5(b).
"INDEMNITY, SUBROGATION AND CONTRIBUTION AGREEMENT" shall mean the
Indemnity, Subrogation and Contribution Agreement dated as of the Closing Date
in the form of EXHIBIT C to be executed by the Subsidiary Guarantors, as
amended, modified, restated or supplemented from time to time.
"INSURANCE PROCEEDS" shall mean all insurance proceeds (other than business
interruption insurance proceeds), damages, awards, claims and rights of action
with respect to any Casualty.
"INTELLECTUAL PROPERTY" shall have the meaning assigned to such term in
Section 5.17.
"INTERBANK OFFERED RATE" shall mean, for any Eurodollar Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor page)
as the London interbank offered
13
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, for any Eurodollar Loan
for any Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as
the London interbank offered rate for deposits in Dollars at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period; PROVIDED, HOWEVER, if more
than one rate is 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%).
"INTERCOMPANY NOTES" shall mean the promissory notes issued as contemplated
by clause (h) of the definition of Permitted Investments set forth in this
Section 1.1, in the form of EXHIBIT D.
"INTEREST COVERAGE RATIO" shall mean, as of any day, the ratio of (a)
Consolidated EBITDA for the period of four consecutive fiscal quarters of the
Borrower ending on, or most recently preceding, such last day to
(b) Consolidated Cash Interest Expense for such period.
"INTEREST PAYMENT DATE" shall mean (a) as to Base Rate Loans, the last
Business Day of each March, June, September and December, (b) as to Eurodollar
Loans, the last day of each applicable Interest Period for any such Loan and, in
addition, where the applicable Interest Period for any such Loan is greater than
three months, the date three months from the beginning of the Interest Period
and each three months thereafter and (c) as to all Loans, the Maturity Date of
such Loans.
"INTEREST PERIOD" shall mean as to Eurodollar Loans, a period of one, two,
three or six months' duration, as the Borrower may elect, commencing, in each
case, on the date of the borrowing (including conversions and extensions
thereof) ; PROVIDED, HOWEVER, (i) if any Interest Period would end on a day
which is not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day (except that in the case of Eurodollar Loans where the
next succeeding Business Day falls in the next succeeding calendar month, then
on the next preceding Business Day), (ii) no Interest Period for any Loan shall
extend beyond the Maturity Date for such Loan, and (iii) in the case of
Eurodollar Loans, where an Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month in which the Interest Period
is to end, such Interest Period shall end on the last Business Day of such
calendar month.
"INTEREST RATE PROTECTION AGREEMENT" shall mean any interest rate swap,
collar, cap or other arrangement requiring payments contingent upon interest
rates.
"INVESTMENT" in any Person shall mean (a) the acquisition (whether for
cash, Property, services, assumption of Indebtedness, securities or otherwise)
of assets, shares of Capital Stock, bonds, notes, debentures, partnership, joint
venture or other ownership interests or other securities of such other Person or
(b) any deposit with, or advance, loan or other extension of credit to, such
Person (other than deposits made in connection with the
14
purchase of equipment or other assets in the ordinary course of business) or (c)
any other capital contribution to or investment in such Person, including any
Guaranty Obligations (including any support for a letter of credit issued on
behalf of such Person) incurred for the benefit of such Person.
"INVESTOR GROUP" shall mean, collectively, RACT, Xxxx Xxxx, Xxxx X.
Xxxxxxx, XX and R. Xxxxxxx Xxxxxxx.
"INVESTOR STOCKHOLDERS" shall mean, collectively, Xxxx Xxxx, Xxxx X.
Xxxxxxx, XX and R. Xxxxxxx Xxxxxxx.
"IPO" with respect to any Person shall mean an initial public offering
pursuant to an effective registration statement under the Securities Act of 1933
covering the offer and sale of common stock of such Person to the public,
underwritten by an investment banking firm of nationally recognized standing.
"ISSUING LENDER" shall mean NationsBank, in its capacity as the issuer of
Letters of Credit, and its successors in such capacity.
"ISSUING LENDER FEES" shall have the meaning assigned to such term in
Section 3.5(c)(iii).
"JOINDER AGREEMENT" shall mean a Joinder Agreement substantially in the
form of EXHIBIT E, executed and delivered by an Additional Subsidiary Guarantor
in accordance with the provisions of Section 6.11.
"KOKAN" shall mean Kokan Company Limited, a company organized and existing
under the laws of the British Virgin Islands.
"XXXXXXX" shall mean Xxxxxxx Transportation, Inc., a Delaware corporation.
"XXXXXXX BRIDGE AGREEMENT" shall mean the Senior Bridge Note Purchase
Agreement dated as of October 14, 1997, between the Parent and Xxxxxxx, as in
effect on the date hereof.
"XXXXXXX BRIDGE NOTE" shall mean the Promissory Note in a principal amount
not to exceed $29,000,000 issued by Parent pursuant to the Xxxxxxx Bridge
Agreement, as in effect on the date hereof.
"LEASE" shall have the meaning assigned to such term in Section 6.14(a).
"LENDER" shall mean any of the Persons identified as a "Lender" on the
signature pages hereto, and any Person which may become a Lender by way of
assignment in accordance with the terms hereof, together with their successors
and permitted assigns. Unless the context clearly indicates otherwise, the term
"Lenders" shall include the Issuing Lender.
15
"LENDER HEDGING AGREEMENT" shall mean any Interest Rate Protection
Agreement or foreign currency exchange agreement between the Borrower or any of
its Subsidiaries and any Person that is or was a Lender (or an Affiliate of a
Lender) at the time such Agreement was entered into.
"LENDING PARTY" shall have the meaning assigned to such term in Section
10.14.
"LETTER OF CREDIT" shall mean any letter of credit issued by the Issuing
Lender for the account of the Borrower in accordance with the terms of Section
2.2.
"LEVERAGE RATIO" shall mean, as of any day, the ratio of (a) Total Debt as
of such day to (b) Consolidated EBITDA for the period of four consecutive fiscal
quarters of the Borrower ending on, or most recently preceding, such day.
"LICENSES" means all licenses, permits, certificates of authority,
authorizations, approvals, registrations, franchises and similar consents
granted or issued by any Governmental Authority.
"LIEN" shall mean any mortgage, deed of trust, pledge, hypothecation,
easement, assignment, deposit arrangement, restriction, restrictive covenant,
lease, sublease, option, security interest, encumbrance, lien (statutory or
otherwise), preference, priority or charge of any kind (including any agreement
to give any of the foregoing, any conditional sale or other title retention
agreement, any financing or similar statement or notice filed under the Uniform
Commercial Code as adopted and in effect in the relevant jurisdiction or other
similar recording or notice statute, and any lease in the nature thereof).
"LOAN" or "LOANS" shall mean the Revolving Loans and, by Type, the Base
Rate Loans and Eurodollar Loans. Loans may be designated by Type. As the
context requires, a "Loan" of a particular Type refers to a portion of the total
outstanding Loans of such Type as to which a single Interest Period is in
effect.
"LOC COMMITMENT" shall mean the commitment of the Issuing Lender to issue
Letters of Credit in an aggregate face amount at any time outstanding (together
with the amounts of any unreimbursed drawings thereon) of up to the LOC
Committed Amount.
"LOC COMMITTED AMOUNT" shall have the meaning assigned to such term in
Section 2.2.
"LOC DOCUMENTS" shall mean, with respect to any Letter of Credit, such
Letter of Credit, any amendments thereto, any documents delivered in connection
therewith, any application therefor, and any agreements, instruments, guarantees
or other documents (whether general in application or applicable only to such
Letter of Credit) governing or providing for (a) the rights and obligations of
the parties concerned or at risk or (b) any collateral security for such
obligations.
"LOC OBLIGATIONS" shall mean the Borrower's reimbursement obligations
hereunder (actual or contingent) arising from drawings under Letters of Credit.
The amount of the
16
LOC Obligations outstanding at any time equals the sum of (a) the maximum
aggregate amount which is, or at any time thereafter may become, available to be
drawn under Letters of Credit then outstanding, assuming compliance with all
requirements for drawings referred to in such Letters of Credit, PLUS (b) the
aggregate amount of all drawings under Letters of Credit honored by the Issuing
Lender but not theretofore reimbursed by the Borrower. The LOC Obligations of
any Lender at any time shall mean its Revolving Commitment Percentage of the
aggregate LOC Obligations at such time.
"MANAGEMENT GROUP" shall mean, collectively, R. Xxxxxxx Xxxxxxx, Xxxx Xxxx
and X. X. Xxxxxxx, XX.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on (a) the
financial condition, operations, business, assets, liabilities (actual or
contingent), historical cash flows or prospects of the Consolidated Parties
taken as a whole, (b) the ability of any Credit Party to perform any material
obligation under the Credit Documents to which it is a party or (c) the material
rights and remedies of the Lenders under the Credit Documents. In determining
whether any individual event or occurrence of the foregoing types would result
in a Material Adverse Effect, notwithstanding that a particular event or
occurrence does not itself have such effect, a Material Adverse Effect shall be
deemed to have occurred if the cumulative effect of such event or occurrence and
all other events or occurrences of the foregoing types which have occurred would
result in a Material Adverse Effect.
"MATERIAL CONTRACTS" shall have the meaning assigned to such term in
Section 5.22.
"MATERIAL INTELLECTUAL PROPERTY" shall have the meaning assigned to such
term in Section 5.17.
"MATERIAL LICENSED INTELLECTUAL PROPERTY" shall have the meaning assigned
to such term in Section 5.17.
"MATERIAL OWNED INTELLECTUAL PROPERTY" shall have the meaning assigned to
such term in Section 5.17.
"MATERIALS OF ENVIRONMENTAL CONCERN" shall mean any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous, toxic, radioactive or explosive substances, materials or wastes,
defined or regulated as such in or under any Environmental Laws, including
asbestos, polychlorinated biphenyls and ureaformaldehyde insulation and all
other substances or wastes of any nature regulated pursuant to any Environmental
Law.
"MATURITY DATE" shall mean as to the Revolving Loan, the Termination Date.
"MOODY'S" shall mean Xxxxx'x Investors Service, Inc., or any successor to
such company in the business of rating securities.
"MORTGAGE INSTRUMENTS" shall have the meaning assigned such term in Section
6.14(a).
17
"MORTGAGED PROPERTIES" shall have the meaning assigned such term in Section
6.14(a).
"MULTIEMPLOYER PLAN" shall mean a Plan which is a multiemployer plan as
defined in Section 3(37) or 4001(a)(3) of ERISA.
"MULTIPLE EMPLOYER PLAN" shall mean a Plan which any Consolidated Party or
any ERISA Affiliate and at least one employer other than any Consolidated Party
or any ERISA Affiliate are contributing sponsors.
"NATIONSBANK" shall mean NationsBank, N.A. and its successors.
"NET CASH PROCEEDS" shall mean (a) with respect to any Asset Disposition,
(i) the gross amount of cash proceeds (including Insurance Proceeds and
Condemnation Awards in the case of any Casualty or Condemnation except to the
extent and for long as such Insurance Proceeds or Condemnation Awards are
Reinvestment Funds or unless such Insurance Proceeds or Condemnation Awards are
to be used for repair, restoration or replacement pursuant to plans approved by
the Required Lenders) actually paid to or actually received by any Consolidated
Party in respect of such Asset Disposition (including cash proceeds subsequently
received at any time in respect of such Asset Disposition from non-cash
consideration initially received or otherwise), LESS (ii) the sum of (A) the
amount, if any, of all taxes (other than income taxes) and the Borrower's
good-faith best estimate of all income taxes (to the extent that such amount
shall have been set aside for the purpose of paying such taxes when due), and
customary fees, brokerage fees, commissions, costs and other expenses (other
than those payable to any Consolidated Party or any Affiliate of any such
Person) that are incurred in connection with such Asset Disposition and are
payable by the seller or the transferor of the assets or Property to which such
Asset Disposition relates, but only to the extent not already deducted in
arriving at the amount referred to in clause (a)(i) above, (B) appropriate
amounts that must be set aside as a reserve in accordance with GAAP against any
liabilities associated with such Asset Disposition and (C) if applicable, the
amount of Indebtedness secured by a Permitted Lien that has been repaid or
refinanced as required in accordance with its terms with the proceeds of such
Asset Disposition; and (b) with respect to any Equity Issuance or Debt Issuance,
the gross amount of cash proceeds paid to or received by any Consolidated Party
in respect of such Equity Issuance or Debt Issuance, as the case may be
(including cash proceeds subsequently received at any time in respect of such
Equity Issuance or Debt Issuance from non-cash consideration initially received
or otherwise), net of underwriting discounts and commissions or placement fees,
investment banking fees, legal fees, consulting fees, accounting fees and other
customary fees and expenses directly incurred by any Consolidated Party in
connection therewith (other than those payable to any Consolidated Party or any
Affiliate of any such Person).
"NMS" shall mean NationsBanc Xxxxxxxxxx Securities LLC.
"NOTE" or "NOTES" shall mean the Revolving Notes, individually or
collectively, as appropriate.
"NOTICE OF BORROWING" shall mean a written notice of borrowing in
substantially the form of EXHIBIT F, as required by Section 2.1(b)(i).
18
"NOTICE OF EXTENSION/CONVERSION" shall mean the written notice of extension
or conversion in substantially the form of EXHIBIT G, as required by Section
3.2.
"OPERATING LEASE" shall mean, as applied to any Person, any lease
(including leases which may be terminated by the lessee at any time) of any
Property (whether real, personal or mixed) by such Person as lessee which is not
a Capital Lease.
"OPERATIVE DOCUMENTS" shall mean the Credit Documents, the Acquisition
Agreement, the Stockholders Agreement, the Xxxxxxx Bridge Agreement, the Senior
Note Agreement, the Subordinated Note, the CVC Subscription Agreement, the
Contribution and Assignment Agreement, the Contribution and Subscription
Agreement, the Deju Subscription Agreement, the Registration Rights Agreement
and the Warrants.
"OTHER TAXES" shall have the meaning assigned to such term in Section
3.10(b).
"PARENT" shall mean the Person identified as such in the heading hereof,
together with any permitted successors and assigns.
"PARENT GUARANTEE AGREEMENT" shall mean the Guarantee Agreement dated as of
the Closing Date in the form of EXHIBIT H to be executed in favor of the
Administrative Agent by the Parent, as amended, modified, restated or
supplemented from time to time.
"PARTICIPATION INTEREST" shall mean a purchase by a Lender of a
participation in Letters of Credit or LOC Obligations as provided in Section 2.2
or in any Loans or other obligations as provided in Section 3.13.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA and any successor thereof.
"PERFECTION CERTIFICATE" shall mean a certificate from the Credit Parties
substantially in the form of EXHIBIT I.
"PERMITTED ACQUISITION" shall mean an acquisition by the Borrower or any
Subsidiary of the Borrower of the Capital Stock or all or any substantial part
(in either case for which audited financial statements or other financial
information satisfactory to the Administrative Agent is available) of the
Property of another Person (including by merger or consolidation or by
incorporation of a new Subsidiary) for up to the fair market value of the
Capital Stock or Property acquired as determined by the Board of Directors of
the Borrower based upon their reasonable business judgment; PROVIDED that (a)
the Capital Stock or Property acquired in such acquisition relates to a line of
business similar to the business of the Borrower or any of its Subsidiaries
engaged in on the Closing Date, (b) the representations and warranties made by
the Credit Parties in each Credit Document shall be true and correct in all
material respects at and as of the date of such acquisition (as if made on such
date after giving effect to such acquisition) except to the extent such
representations and warranties expressly relate to an earlier date (in which
case such representations and warranties shall be true and correct in all
material respects at and as of such earlier date), (c) the Agent shall have
received all items in respect of the Capital Stock or Property acquired in such
acquisition (and/or the
19
seller thereof) required to be delivered by the terms of Section 6.11 and/or
Section 6.12, (d) in the case of an acquisition of the Capital Stock of another
Person, (i) except in the case of the incorporation of a new Subsidiary, the
board of directors (or other comparable governing body) of such other Person
shall have duly approved such acquisition and (ii) the Capital Stock acquired
shall constitute at least 85% of the Total Voting Power and ownership interest
of the issuer thereof, (e) no Default or Event of Default shall have occurred
and be continuing immediately before or immediately after giving effect to such
acquisition and the Borrower shall have delivered to the Agent a Pro Forma
Compliance Certificate demonstrating that, upon giving effect to such
acquisition on a Pro Forma Basis, the Borrower shall be in compliance with all
of the financial covenants set forth in Section 7.19 as of the last day of the
most recent period of four consecutive fiscal quarters of the Borrower which
precedes or ends on the date of such acquisition and with respect to which the
Agent has received the Required Financial Information and (f) the liabilities
(determined in accordance with GAAP and in any event including contingent
obligations) acquired by the Borrower and its Subsidiaries on a consolidated
basis in such acquisition and the Indebtedness issued by the Borrower and its
Subsidiaries on a consolidated basis from such acquisition shall not in the
aggregate exceed 25% of the purchase price paid for the related Capital Stock or
assets.
"PERMITTED INVESTMENTS" shall mean Investments which consist of (a) cash
held in a deposit account with the Administrative Agent or any other reputable
bank or other depository institution which has executed and delivered a
Depository Bank Agreement with the Administrative Agent; (b) Cash Equivalents
subject to a perfected first priority security interest of the Administrative
Agent in favor of the Secured Parties; (c) accounts receivable created, acquired
or made by the Borrower and its Subsidiaries in the ordinary course of business
and payable or dischargeable in accordance with customary trade terms; (d)
Investments consisting of Capital Stock, obligations, securities or other
Property received by the Borrower and its Subsidiaries in settlement of accounts
receivable (created in the ordinary course of business) from bankrupt obligors;
(e) Investments existing as of the Closing Date and set forth in SCHEDULE 1.1A;
(f) Guaranty Obligations permitted by Section 7.1; (g) advances to employees for
moving and travel expenses in the ordinary course of business consistent with
past practices; (h) Investments in the Borrower or any Subsidiary of the
Borrower, so long as (i) all such Investments in the Borrower shall be made by
the Parent or any Subsidiary of the Borrower, shall be made in cash and shall
consist of common stock (or additional capital contributions in respect of
outstanding common stock) pledged to the Administrative Agent for the benefit of
the Lenders, (ii) all such Investments in Subsidiaries of the Borrower shall be
made by the Borrower or any other Subsidiary of the Borrower and (iii) all such
Investments in Subsidiaries of the Borrower shall (A) in the case of the initial
capitalization of any such Subsidiary, consist of common stock which is issued
for consideration equal to the par value (or the equivalent, in the case of any
Foreign Subsidiary) of such shares and which is pledged to the Administrative
Agent for the benefit of the Secured Parties or (B) in all other cases, be
evidenced by Intercompany Notes pledged to the Administrative Agent for the
benefit of the Secured Parties and (i) Permitted Acquisitions.
"PERMITTED LIENS" shall mean (a) Liens in favor of the Administrative Agent
on behalf of the Secured Parties; (b) Liens (other than Liens created or imposed
under ERISA) for taxes or other governmental charges, assessments or levies
which are not yet due or being
20
contested in good faith by appropriate proceedings diligently pursued and for
which adequate reserves determined in accordance with GAAP have been established
(and as to which the Property subject to any such Lien is not yet subject to
foreclosure, sale or loss on account thereof); (c) statutory Liens of landlords
and Liens of carriers, warehousemen, mechanics, materialmen and suppliers and
other Liens imposed by law or pursuant to customary reservations or retentions
of title arising in the ordinary course of business, PROVIDED that such Liens
secure only amounts which are not yet due and payable (or, if due and payable,
are unfiled and no other action has been taken to enforce the same) or are being
contested in good faith by appropriate proceedings diligently pursued and for
which adequate reserves determined in accordance with GAAP have been established
(and as to which the Property subject to any such Lien is not yet subject to
foreclosure, sale or loss on account thereof); (d) Liens (other than Liens
created or imposed under ERISA) incurred or deposits made by the Borrower or any
of its Subsidiaries in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of social
security, or to secure the performance of tenders, statutory obligations, bids,
leases, government contracts, performance and return-of-money bonds and other
similar obligations (exclusive of obligations for the payment of Indebtedness);
(e) Liens in connection with attachments or judgments (including judgment or
appeal bonds), PROVIDED that the judgments secured shall, within 30 days after
the entry thereof, have been discharged or execution thereof stayed pending
appeal (and shall have been discharged within 30 days after the expiration of
any such stay); (f) easements, rights-of-way, restrictions (including zoning
restrictions), minor defects or irregularities in title and other similar
charges or encumbrances not, in any material respect, impairing the use of the
encumbered Property for its intended purposes; (g) Liens on Property securing
purchase money Indebtedness (including Capital Leases) to the extent permitted
under Section 7.1(c), PROVIDED that (i) any such Indebtedness is incurred and
such Lien attaches to such Property concurrently with or within 90 days after
the acquisition thereof and (ii) such Indebtedness is not secured by a Lien on
any other assets; (h) leases or subleases granted to others not interfering in
any material respect with the business of the Borrower and its Subsidiaries; (i)
any interest of title of a lessor under, and Liens arising from UCC financing
statements (or equivalent filings, registrations or agreements in foreign
jurisdictions) relating to, leases (excluding Capital Leases) permitted by this
Agreement; (j) normal and customary rights of setoff upon deposits of cash in
favor of the Administrative Agent or any other bank or other depository
institution which has executed and delivered a Depository Bank Agreement with
the Administrative Agent; and (k) Liens existing as of the Closing Date and set
forth on SCHEDULE 1.1B; PROVIDED that (i) no such Lien shall at any time be
extended to or cover any Property other than the Property subject thereto on the
Closing Date and (ii) the principal amount of the Indebtedness or other
obligations secured by such Liens shall not be extended, renewed, refunded or
refinanced.
"PERSON" shall mean any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other enterprise
(whether or not incorporated) or any Governmental Authority or any other entity.
"PERSONNEL" shall have the meaning assigned to such term in Section 5.17.
"XXXXX CASH ACCOUNTS" shall mean, collectively, (i) the deposit account
maintained by the Borrower with Zions Bank in Salt Lake City, Utah, Account
Number 000000000 and (i)
21
the deposit account maintained by the Borrower with Sun Trust Bank in Kennesaw,
Georgia, Account Number 000000000.
"PLAN" shall mean any employee benefit plan (as defined in Section 3(3) of
ERISA) which is covered by Title IV of ERISA and with respect to which any
Consolidated Party or any ERISA Affiliate is (or, if such plan were terminated
at such time, would under Section 4069 of ERISA be deemed to be) an "employer"
within the meaning of Section 3(5) of ERISA.
"PRI" shall mean Pozzolanic Resources, Inc., a Washington corporation.
"PREPAYMENT ACCOUNT" shall have the meaning assigned to such term in
Section 3.3(b)(vi).
"PREFERRED STOCK", as applied to the Capital Stock of any person, shall
mean Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends or distributions, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such corporation, over the Capital Stock of any other class of
such person.
"PRIME RATE" shall mean 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.
"PRO FORMA BASIS" shall mean that, for purposes of calculating compliance
in respect of any transaction with each of the financial covenants set forth in
Section 7.19, such transaction (and any other transaction which occurred during
the relevant four-fiscal-quarter period) shall be deemed to have occurred as of
the first day of the most recent period of four consecutive fiscal quarters of
the Borrower which precedes or ends on the date of such transaction with respect
to which the Administrative Agent has received the Required Financial
Information. As used in this definition, "transaction" shall mean (a) any
incurrence or assumption of Indebtedness (and the concurrent retirement of any
other Indebtedness) as referred to in Section 7.1(i), (b) any merger or
consolidation as referred to in Section 7.4(d), (c) any Asset Disposition of a
business or business unit as referred to in Section 7.5(a), or (d) any
"Permitted Acquisition" set forth in this Section 1.1. In connection with any
calculation of the financial covenants set forth in Section 7.19 upon giving
effect to a transaction (and any other transaction which occurred during the
relevant four-fiscal-quarter period) on a Pro Forma Basis for purposes of
Section 7.1(i), Section 7.4, Section 7.5 or clause (e) of the definition of
"Permitted Acquisition" set forth in this Section 1.1, as applicable:
(i) for purposes of any such calculation in respect of any incurrence
or assumption of Indebtedness as referred to in Section 7.1(i), (A) if such
Indebtedness has a floating or formula rate, the rate of interest for such
Indebtedness for the applicable period for purposes of the calculations
contemplated by this definition shall be determined by utilizing the rate
which is or would be in effect with respect to such Indebtedness as the
relevant date of such calculations and (B) any other Indebtedness
22
which is retired concurrently with such incurrence or assumption shall be
excluded and deemed to have been retired as of the first day of the
relevant four fiscal-quarter period;
(ii) for purposes of any such calculation in respect of any Asset
Disposition of a business or business unit as referred to in Section 7.5,
(1) income statement items (whether positive or negative) attributable to
the Property disposed of in such Asset Disposition shall be excluded to the
extent relating to any period prior to the date of such transaction and (2)
any Indebtedness which is retired in connection with such Asset Disposition
shall be excluded and deemed to have been retired as of the first day of
the relevant four fiscal-quarter period; and
(iii) for purposes of any such calculation in respect of any merger or
consolidation as referred to in Section 7.4(d) and the definition of
"Permitted Acquisition" set forth in this Section 1.1, (A) any Indebtedness
incurred by the Borrower or any of its Subsidiaries in connection with such
transaction shall be deemed to have been incurred as of the first day of
the relevant four fiscal-quarter period (B) if such Indebtedness has a
floating or formula rate, then the rate of interest for such Indebtedness
for the applicable period for purposes of the calculations contemplated by
this definition shall be determined by utilizing the rate which is or would
be in effect with respect to such Indebtedness as at the relevant date of
such calculations and (C) income statement items (whether positive or
negative) attributable to the Property acquired in such transaction or to
the Investment comprising such transaction, as applicable, shall be
included as if such transaction had occurred as of the first day of the
relevant four fiscal-quarter period; PROVIDED, HOWEVER, that extraordinary
and non-recurring revenues and expenses attributable to such Property or
Investment, as the case may be, shall be excluded from the income statement
calculation for such four fiscal-quarter period; and
"PRO FORMA COMPLIANCE CERTIFICATE" shall mean a certificate of the chief
financial officer of the Borrower delivered to the Administrative Agent in
connection with (i) any incurrence or assumption of Indebtedness (and the
concurrent retirement of any other Indebtedness) as referred to in Section
7.1(i), (ii) any merger or consolidation as referred to in Section 7.4(d),
(iii) any Asset Disposition as referred to in Section 7.5(a) or (iv) the
definition of "Permitted Acquisition" set forth in this Section 1.1, as
applicable, and containing reasonably detailed calculations, upon giving effect
to the applicable transaction on a Pro Forma Basis, of the Interest Coverage
Ratio, and the Leverage Ratio as of the last day of the most recent period of
four consecutive fiscal quarters of the Borrower which precede or end on the
date of the applicable transaction and with respect to which the Administrative
Agent shall have received the Required Financial Information.
"PROPERTY" shall mean any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"RACT" shall mean RACT, Inc., a Utah corporation.
"REGISTER" shall have the meaning assigned to such term in Section 10.3(c).
23
"REGISTRATION RIGHTS AGREEMENT" shall mean the Registration Rights
Agreement among the Parent, the Sponsor, the CVC Co-Investors and the Investor
Group dated as of October 14, 1997.
"REGULATION G, T, U OR X" shall mean Regulation G, T, U or X, respectively,
of the Board of Governors of the Federal Reserve System as from time to time in
effect and any successor to all or a portion thereof.
"REINVESTMENT FUNDS" shall mean, with respect to any Insurance Proceeds
from a Casualty or any Condemnation Award from a Condemnation, that portion of
such funds as shall, according to a certificate of a Responsible Officer of the
Borrower delivered to the Administrative Agent within 30 days after the
occurrence of such Casualty or Condemnation (and in any case prior to the
receipt thereof by any Consolidated Party), be reinvested, within 365 days of
the receipt of such funds in the repair, restoration or replacement of the
Properties that were the subject of such Casualty or Condemnation; PROVIDED that
(a) the aggregate amount of such proceeds with respect to any such event or
series of related events shall not exceed $500,000 without the prior written
consent of the Required Lenders, (b) such certificate shall be accompanied by
evidence reasonably satisfactory to the Administrative Agent that any Property
subject to such Casualty or Condemnation has been or will be repaired, restored
or replaced to its condition immediately prior to such Casualty or Condemnation,
(c) pending such reinvestment, the entire amount of such proceeds shall be
deposited in an account with the Administrative Agent for the benefit of the
Secured Parties, over which the Administrative Agent shall have sole control and
exclusive right of withdrawal, (d) from and after the date of delivery of such
certificate, the Borrower shall diligently proceed, in a commercially reasonable
manner, to complete the repair, restoration or replacement of the Properties
that were the subject of such Casualty or Condemnation as described in such
certificate and (e) no Default or Event of Default shall have occurred and be
continuing; and PROVIDED FURTHER that, if any of the foregoing conditions shall
cease to be satisfied at any time, such funds shall no longer be deemed
Reinvestment Funds and such funds shall immediately be applied to prepayment of
the Credit Obligations in accordance with Section 3.3(b).
"RELEASE" shall mean any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping or disposing into
the environment (including the abandonment or discarding of barrels, containers
and other closed receptacles containing any Materials of Environmental Concern).
"REPORTABLE EVENT" shall mean any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the notice requirement has
been waived by regulation.
"REQUIRED FINANCIAL INFORMATION" shall mean, with respect to any period,
the financial statements of the Borrower with respect to such period required
under Section 6.1(a) and (b).
"REQUIRED LENDERS" shall mean, at any time, Lenders which are then in
compliance with their obligations hereunder (as determined by the Administrative
Agent) and holding in the aggregate at least 662/3% of the total Revolving
Commitments (or, if the Revolving
24
Commitments have been terminated in whole, the outstanding Revolving Loans and
Participation Interests in outstanding Letters of Credit). For purposes of the
foregoing, (A) the interest of any Lender holding a Loan in which any other
Lender has a Participation Interest pursuant to Section 3.13 shall be calculated
net of all such Participation Interests of other Lenders and (B) the
Participation Interest of any Lender pursuant to Section 3.13 in a Loan held by
any other Lender shall be counted as if such Lender holding such Participation
Interest held a proportionate part of the related Loan directly.
"REQUIREMENT OF LAW" shall mean, as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule, regulation, order, writ, judgment,
injunction, decree, permit or determination of an arbitrator or a court or other
Governmental Authority or other restriction imposed by any Governmental
Authority, in each case applicable to or binding upon such Person or to which
any of its Property is subject.
"RESERVE REQUIREMENT" shall mean, at any time, the maximum rate at which
reserves (including 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 Loans. The Eurodollar Rate shall be adjusted automatically
on and as of the effective date of any change in the Reserve Requirement.
"RESPONSIBLE OFFICER" shall mean, as to any Person, the president, chief
executive officer, chief operating officer, any financial officer, any vice
president or the general counsel of such Person (or, in the case of a
partnership, of the managing general partner of such Person).
"RESTRICTED PAYMENT" shall mean (i) any dividend or other distribution,
direct or indirect, on account of any class of Capital Stock of any Consolidated
Party, now or hereafter outstanding, (ii) any redemption, retirement, sinking
fund or similar payment, purchase or other acquisition for value, direct or
indirect, of any class of Capital Stock of any Consolidated Party, now or
hereafter outstanding, (iii) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire any
class of Capital Stock of any Consolidated Party, now or hereafter outstanding,
(iv) any payment or prepayment of principal of, premium, if any, or interest on,
redemption, purchase, retirement, defeasance, sinking fund or similar payment
with respect to the Xxxxxxx Bridge Note, (v) any payment or prepayment of
principal of, premium, if any, or interest on, redemption, purchase, retirement,
defeasance, sinking fund or similar payment with respect to the Senior Note,
(vi) any payment or repayment of principal of, premium, if any, or interest on
(other than payment in kind interest), redemption, purchase, retirement,
defeasance, sinking fund or similar payment with respect to the Subordinated
Note and (vii) any loan, advance, tax sharing payment or indemnification payment
to, or other
25
investment in, the Parent or any of its Affiliates (other than the Borrower and
its Subsidiaries).
"REVOLVING COMMITMENT" shall mean, with respect to any Lender, the
commitment of such Lender, in an aggregate principal amount at any time
outstanding of up to such Lender's Revolving Commitment Percentage of the
Revolving Committed Amount, (i) to make Revolving Loans in accordance with the
provisions of Section 2.1(a) and (ii) to purchase Participation Interests in
Letters of Credit in accordance with the provisions of Section 2.2(c).
"REVOLVING COMMITMENT PERCENTAGE" shall mean, for any Lender, the
percentage, if any, identified as its Revolving Commitment Percentage on
SCHEDULE 1.1C (or in the Assignment and Acceptance pursuant to which such Lender
assumed its Revolving Commitment), as such percentage may be modified in
connection with any assignment made in accordance with the provisions of this
Agreement.
"REVOLVING COMMITTED AMOUNT" shall have the meaning assigned to such term
in Section 2.1(a).
"REVOLVING CREDIT FACILITY OBLIGATIONS" shall mean, collectively, Revolving
Loans and LOC Obligations.
"REVOLVING LOANS" shall have the meaning assigned to such term in Section
2.1(a).
"REVOLVING NOTE" or "REVOLVING NOTES" shall mean the promissory notes of
the Borrower in favor of each of the applicable Lenders evidencing the Revolving
Loans provided pursuant to Section 2.1(e), individually or collectively, as
appropriate, as such promissory notes may be amended, modified, restated,
supplemented, extended, renewed or replaced from time to time.
"S&P" shall mean Standard & Poor's Ratings Group, a division of McGraw
Hill, Inc., or any successor or assignee of the business of such division in the
business of rating securities.
"SALE AND LEASEBACK TRANSACTION" shall mean any direct or indirect
arrangement with any Person or to which any such Person is a party, providing
for the leasing to any Consolidated Party of any Property, whether owned by any
Consolidated Party as of the Closing Date or later acquired, which has been or
is to be sold or transferred by any Consolidated Party to such Person or to any
other Person from whom funds have been, or are to be, advanced by such Person on
the security of such Property.
"SECURED PARTIES" shall mean (a) the Lenders, (b) the Administrative Agent,
in its capacity as such under each Credit Document, (c) each Lender or Affiliate
thereof with which the Borrower or any of its Subsidiaries enters into a Lender
Hedging Agreement as permitted hereunder, in its capacity as a party to such
Lender Hedging Agreement, (d) the beneficiaries of each indemnification
obligation undertaken by any Consolidated Party under any Credit Document and
(e) the successors and assigns of the foregoing.
26
"SECURITY AGREEMENT" shall mean the Pledge and Security Agreement dated as
of the Closing Date in the form of EXHIBIT J to be executed in favor of the
Administrative Agent by each of the Credit Parties, as amended, modified,
restated or supplemented from time to time.
"SELLERS" shall mean, collectively, Xxxxxx X. Xxxxxxx, Xx., Xxxxxxxx X.
Xxxxxxx and Kokan.
"SENIOR NOTE" shall mean any one of the unsecured obligations of the
Borrower in an aggregate principal amount not in excess of $100,000,000 issued
by the Borrower in favor of the Senior Noteholders pursuant to the Senior Note
Agreement, as such Senior Notes may be amended, modified, restated or
supplemented and in effect from time to time, and in form and substance
satisfactory to the Administrative Agent, in its sole discretion.
"SENIOR NOTE AGREEMENT" shall mean the agreement pursuant to which the
Senior Notes are issued, by and between the Borrower and the Senior Noteholders,
in form and substance satisfactory to the Administrative Agent, in its sole
discretion, as the same may be amended, modified, restated or supplemented and
in effect from time to time.
"SENIOR NOTEHOLDER" shall mean any one of the holders from time to time of
the Senior Notes.
"SOLVENT" or "SOLVENCY" shall mean, with respect to any Person as of a
particular date, that on such date (i) such Person is able to realize upon its
assets and pay its debts and other liabilities, contingent obligations and other
commitments as they mature in the normal course of business, (ii) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay such debts and liabilities as
they mature in their ordinary course, taking into account the timing of and
amounts of cash to be received by such Person and the timing of and amounts of
cash to be payable on or in respect of debts and liabilities of such Person,
(iii) such Person is not engaged in a business or a transaction, and is not
about to engage in a business or a transaction, for which such Person's Property
would constitute unreasonably small capital after giving due consideration to
the prevailing practice in the industry in which such Person is engaged or is to
engage, (iv) the fair value of the Property of such Person is greater than the
total amount of liabilities, including contingent liabilities, of such Person
and (v) the present fair salable value of the assets of such Person is not less
than the amount that will be required to pay the probable liability of such
Person on its debts and liabilities as they become absolute and matured. In
computing the amount of contingent liabilities at any time, it is intended that
such liabilities will be computed at the amount which, in light of all the facts
and circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
"SPONSOR" shall mean Citicorp Venture Capital, Ltd., a New York
corporation.
"SPONSOR GROUP" shall mean the Sponsor, any of the Sponsor's Affiliates and
the Management Group, PROVIDED that each such Affiliate is reasonably acceptable
to the Administrative Agent.
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"SPONSOR REVOLVING LOAN" shall mean the Senior Secured Revolving Credit
Agreement dated as of October 14, 1997, between Borrower and Citicorp Venture
Capital, Ltd.
"STANDBY LETTER OF CREDIT FEE" shall have the meaning assigned to such term
in Section 3.5(b)(i).
"STOCKHOLDERS AGREEMENT" shall mean the Stockholders Agreement dated as of
October 14, 1997 among the Parent, the Sponsor, CCT, the CVC Co-Investors and
the Investor Stockholders.
"SUBORDINATED NOTE" shall mean, collectively, the Junior Subordinated
Promissory Note due 2005, dated October 14, 1997, issued by the Parent in favor
of Xxxxxxx in an original principal amount of $17,500,000, and any Secondary
Note (as defined in the Subordinate Note) issued pursuant to the terms and
conditions of the Subordinated Note.
"SUBSIDIARIES GUARANTEE AGREEMENT" shall mean the Guarantee Agreement dated
as of the Closing Date in the form of EXHIBIT K to be executed in favor of the
Administrative Agent by the Subsidiary Guarantors, as amended, modified,
restated or supplemented from time to time.
"SUBSIDIARY" shall mean, as to any Person, (a) any corporation more than
50% of whose Capital Stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time, any class or classes of such
corporation shall have or might have voting power by reason of the happening of
any contingency) is at the time owned by such Person directly or indirectly
through Subsidiaries, and (b) any partnership, association, joint venture,
limited liability company or other business entity in which such Person directly
or indirectly through Subsidiaries has more than 50% of the equity interests at
any time.
"SUBSIDIARY GUARANTORS" shall mean each of the Domestic Subsidiaries of the
Borrower on the Closing Date which has executed the Subsidiaries Guarantee
Agreement and each Additional Subsidiary Guarantor which may thereafter execute
a Joinder Agreement, together with their successors and permitted assigns, and
"SUBSIDIARY GUARANTOR" shall mean any one of them.
"TAXES" shall have the meaning assigned to such term in Section 3.10.
"TERMINATION DATE" shall mean September 4, 2003.
"TOTAL DEBT" shall mean, as of any day, the total amount of Funded
Indebtedness of the Borrower and its Consolidated Subsidiaries on a consolidated
basis as of such day.
"TOTAL VOTING POWER" with respect to any Person on any date shall mean the
total number of votes which may be cast in the election of directors of such
Person at any meeting of stockholders of such Person if all securities entitled
to vote in the election of directors of such Person (on a fully diluted basis,
assuming the exercise, conversion or exchange of all
28
rights, warrants, options and securities outstanding on such date which are or
may thereafter become exercisable for, exchangeable for or convertible into,
such voting securities) were present and voted at such meeting (other than votes
that may be cast only upon the happening of a contingency).
"TRADE LETTER OF CREDIT FEE" shall have the meaning assigned to such term
in Section 3.5(c)(ii).
"TYPE", with respect to a Loan, refers to whether such Loan is a Eurodollar
Loan or Base Rate Loan.
"UCC" shall mean the Uniform Commercial Code.
"UCP" shall have the meaning assigned to such term in Section 2.2(h).
"UNUSED REVOLVING COMMITTED AMOUNT" shall mean, for any period, the amount
by which (a) the then applicable Revolving Committed Amount exceeds (b) the
daily average sum for such period of (i) the aggregate principal amount of all
outstanding Revolving Loans PLUS (ii) the aggregate principal amount of all
outstanding LOC Obligations.
"WARRANTS" shall mean, collectively, the Series A Stock Purchase Warrants
to purchase an aggregate of 5,000 shares of ISG Common Stock issued pursuant to
the CVC Subscription Agreement.
"WHOLLY OWNED SUBSIDIARY" of any Person shall mean any Subsidiary 100% of
whose Capital Stock (on a fully diluted basis) is at the time owned by such
Person directly or indirectly through other Wholly Owned Subsidiaries.
1.2 COMPUTATION OF TIME PERIODS. For purposes of computation of periods
of time hereunder, the word "from" shall mean "from and including" and the words
"to" and "until" each shall mean "to but excluding."
1.3 ACCOUNTING TERMS. Except as otherwise expressly provided herein, all
accounting terms used herein shall be interpreted, and all financial statements
and certificates and reports as to financial matters required to be delivered to
the Lenders hereunder shall be prepared, in accordance with GAAP applied on a
consistent basis. All calculations made for the purposes of determining
compliance with this Agreement shall (except as otherwise expressly provided
herein) be made by application of GAAP applied on a basis consistent with the
most recent annual or quarterly financial statements delivered pursuant to
Section 6.1 (or, prior to the delivery of the first financial statements
pursuant to Section 6.1, consistent with the financial statements as at December
31, 1996); PROVIDED, HOWEVER, that if (i) the Borrower shall object to
determining such compliance on such basis at the time of delivery of such
financial statements due to any change in GAAP or the rules promulgated with
respect thereto after the Closing Date or (ii) the Administrative Agent or the
Required Lenders shall so object in writing within 90 days after delivery of
such financial statements, then such calculations shall be made on a basis
consistent with the most recent financial
29
statements delivered by the Borrower to the Lenders as to which no such
objection shall have been made.
1.4 TERMS GENERALLY. The definitions in Section 1.1 shall apply equally
to both the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including"
shall be deemed to be followed by the phrase "without limitation". All
references herein to Sections, Exhibits and Schedules shall be deemed references
to Sections of, and Exhibits and Schedules to, this Agreement unless the context
shall otherwise require. Unless otherwise expressly provided herein, the word
"day" means a calendar day.
SECTION 2
CREDIT FACILITIES
2.1 REVOLVING LOANS. (a) REVOLVING COMMITMENT. Subject to the terms and
conditions hereof and in reliance upon the representations and warranties set
forth herein, each Lender severally agrees to make available to the Borrower
such Lender's Revolving Commitment Percentage of revolving credit loans
requested by the Borrower in Dollars ("REVOLVING LOANS") from time to time from
the Closing Date until the Termination Date, or such earlier date as the
Revolving Commitments shall have been terminated as provided herein for the
purposes hereinafter set forth; PROVIDED, HOWEVER, that the sum of the aggregate
principal amount of outstanding Revolving Loans PLUS the aggregate amount of
outstanding LOC Obligations shall not at any time exceed FORTY-TWO MILLION
DOLLARS ($42,000,000) (as such aggregate maximum amount may be reduced from time
to time as provided in Section 3.4, the "REVOLVING COMMITTED AMOUNT"); PROVIDED,
FURTHER, with regard to each Lender individually, that such Lender's outstanding
Revolving Loans PLUS Participation Interests in outstanding LOC Obligations
shall not at any time exceed such Lender's Revolving Commitment Percentage of
the Revolving Committed Amount. Revolving Loans may consist of Base Rate Loans
or Eurodollar Loans, or a combination thereof, as the Borrower may request, and
may be repaid and reborrowed in accordance with the provisions hereof; PROVIDED,
HOWEVER, that the Revolving Loans outstanding at any time shall consist of no
more than six (6) separate Eurodollar Loans. For purposes hereof, Eurodollar
Loans with different Interest Periods shall be considered as separate Eurodollar
Loans, even if they begin on the same date, although borrowings of Eurodollar
Loans may, in accordance with the provisions hereof, be combined through
extensions or conversions at the end of existing Interest Periods to constitute
a single new Eurodollar Loan with the same Interest Period. Revolving Loans
hereunder may be repaid and reborrowed in accordance with the provisions hereof.
(b) REVOLVING LOAN BORROWINGS.
(i) NOTICE OF BORROWING. The Borrower shall request a Revolving Loan
borrowing by written notice (or telephonic notice promptly confirmed in
writing) to the Administrative Agent not later than 11:00 A.M. (Charlotte,
North Carolina time) on the Business Day prior to the date of the requested
borrowing in the case of Base
30
Rate Loans, and on the third Business Day prior to the date of the
requested borrowing in the case of Eurodollar Loans. Each such request for
borrowing shall be irrevocable and shall specify (A) the date of the
requested borrowing (which shall be a Business Day), (B) the aggregate
principal amount to be borrowed and (C) whether the borrowing shall be
comprised of Base Rate Loans, Eurodollar Loans or a combination thereof,
and if Eurodollar Loans are requested, the Interest Period(s) therefor. If
the Borrower shall fail to specify in any such Notice of Borrowing (I) an
applicable Interest Period in the case of a Eurodollar Loan, then such
notice shall be deemed to be a request for an Interest Period of one month
or (II) the Type of Revolving Loan requested, then such notice shall be
deemed to be a request for a Base Rate Loan hereunder. Promptly upon
receipt of each Notice of Borrowing pursuant to this Section 2.1(b)(i), the
Administrative Agent shall notify each affected Lender of the contents
thereof and each such Lender's share of any borrowing to be made pursuant
thereto.
(ii) MINIMUM AMOUNTS. Each Eurodollar Loan or Base Rate Loan that
comprises part of the Revolving Loans shall be in a minimum aggregate
principal amount (for the applicable Lenders, collectively) of $1,000,000
and integral multiples of $500,000 in excess thereof (or the then remaining
amount of the Revolving Committed Amount, if less).
(iii) ADVANCES. Each Lender will make its Revolving Commitment
Percentage of each Revolving Loan borrowing available to the Administrative
Agent for the account of the Borrower at the office of the Administrative
Agent specified in SCHEDULE 1.1C, or in such other manner as the
Administrative Agent may designate in writing, by 1:00 P.M. (Charlotte,
North Carolina time) on the date specified in the applicable Notice of
Borrowing in Dollars and in funds immediately available to the
Administrative Agent. Such borrowing will then be made available to the
Borrower by the Administrative Agent by crediting the account of the
Borrower on the books of such office with the aggregate of the amounts made
available to the Administrative Agent by the Lenders and in like funds as
received by the Administrative Agent.
(c) REPAYMENT. The principal amount of all Revolving Loans shall be due
and payable in full on the Termination Date, unless accelerated sooner pursuant
to Section 8.2.
(d) INTEREST. Subject to the provisions of Section 3.1:
(i) BASE RATE LOANS. During such periods as Revolving Loans shall be
comprised in whole or in part of Base Rate Loans, such Base Rate Loans
shall bear interest at a per annum rate equal to the Adjusted Base Rate.
(ii) EURODOLLAR LOANS. During such periods as Revolving Loans shall
be comprised in whole or in part of Eurodollar Loans, such Eurodollar Loans
shall bear interest at a per annum rate equal to the Adjusted Eurodollar
Rate.
Interest on Revolving Loans shall be payable in arrears on each applicable
Interest Payment Date (and at such other times as may be specified herein).
31
(e) REVOLVING NOTES. The Revolving Loans made by each Lender shall
be evidenced by a duly executed promissory note of the Borrower to such
Lender in substantially the form of EXHIBIT L and in a principal amount
equal to such Lender's Revolving Commitment Percentage of the Revolving
Committed Amount.
2.2 LETTER OF CREDIT SUBFACILITY. (a) ISSUANCE. Subject to the terms
and conditions hereof and of the LOC Documents, if any, and any other terms and
conditions which the Issuing Lender may reasonably require and in reliance upon
the representations and warranties set forth herein, the Issuing Lender agrees
to issue, and each Lender severally agrees to participate on the terms set forth
in this Section 2.2 in the issuance by the Issuing Lender of, standby and trade
Letters of Credit in Dollars from time to time from the Closing Date until the
Termination Date as the Borrower may request, in a form acceptable to the
Issuing Lender; PROVIDED, HOWEVER, that (i) the LOC Obligations outstanding
shall not at any time exceed FIVE MILLION DOLLARS ($5,000,000) (the "LOC
COMMITTED AMOUNT") and (ii) the sum of the aggregate principal amount of
outstanding Revolving Loans, PLUS the aggregate amount of outstanding LOC
Obligations shall not at any time exceed the Revolving Committed Amount. No
Letter of Credit shall (x) have an original expiry date more than one year from
the date of issuance or (y) as originally issued or as extended, have an expiry
date extending beyond the Termination Date. Each Letter of Credit shall comply
with the related LOC Documents. The issuance and expiry dates of each Letter of
Credit shall each be a Business Day.
(b) NOTICE AND REPORTS. The request for the issuance of a Letter of
Credit shall be submitted by the Borrower to the Issuing Lender at least three
(3) Business Days prior to the requested date of issuance. The Issuing Lender
will, at least quarterly and more frequently upon request, disseminate to each
of the affected Lenders a detailed report specifying the Letters of Credit which
are then issued and outstanding and any activity with respect thereto which may
have occurred since the date of the most recent prior report, and including
therein, among other things, the beneficiary, the face amount and the expiry
date, as well as any payments or expirations which may have occurred.
(c) PARTICIPATION. Each Lender, upon issuance of a Letter of Credit,
shall be deemed to have purchased without recourse from the Issuing Lender a
Participation Interest in such Letter of Credit and the obligations arising
thereunder and any collateral relating thereto, in each case in an amount equal
to its Revolving Commitment Percentage of the obligations under such Letter of
Credit and shall absolutely, unconditionally and irrevocably assume and be
obligated to pay to the Issuing Lender and discharge when due its Revolving
Commitment Percentage of the obligations arising under such Letter of Credit.
Without limiting the scope and nature of each Lender's Participation Interest in
any Letter of Credit, to the extent that the Issuing Lender has not been
reimbursed as required hereunder or under any such Letter of Credit, each such
Lender shall pay to the Issuing Lender its Revolving Commitment Percentage of
such unreimbursed drawing pursuant to subsection (d) below. The obligation of
each Lender to so reimburse the Issuing Lender shall be absolute and
unconditional and shall not be affected by the occurrence of a Default, an Event
of Default or any other occurrence or event. Any such reimbursement shall not
relieve or otherwise impair the obligation of the Borrower to reimburse the
Issuing Lender under any Letter of Credit, together with interest as hereinafter
provided.
32
(d) REIMBURSEMENT. In the event of any drawing under any Letter of
Credit, the Issuing Lender will promptly notify the Borrower. The Borrower
promises to reimburse the Issuing Lender on the day of drawing under any Letter
of Credit (either with the proceeds of a Revolving Loan obtained as provided in
subsection (e) below or with funds from other sources) in same day funds.
Unless the Borrower shall immediately notify the Issuing Lender that the
Borrower intends to reimburse the Issuing Lender for such drawing from other
sources of funds, the Borrower shall be deemed to have requested that the
Lenders make a Revolving Loan as provided in subsection (e) below in the amount
of the drawing on the related Letter of Credit and the proceeds of such Loan
will be used to reimburse the Issuing Lender for such drawing. If the Borrower
shall fail to reimburse the Issuing Lender as provided hereinabove, the
unreimbursed amount of such drawing shall bear interest at a per annum rate
equal to the Adjusted Base Rate PLUS 2%. The Borrower's reimbursement
obligations hereunder shall be absolute and unconditional under all
circumstances irrespective of any rights of setoff, counterclaim or defense to
payment the Borrower may claim or have against the Issuing Lender, the
Administrative Agent, the Lenders, the beneficiary of the Letter of Credit drawn
upon or any other Person, including any defense based on any failure of the
Borrower or any other Credit Party to receive consideration or the legality,
validity, regularity or unenforceability of the Letter of Credit. The Issuing
Lender will promptly notify the other affected Lenders of the amount of any
unreimbursed drawing and each Lender shall promptly pay to the Administrative
Agent for the account of the Issuing Lender, in Dollars and in immediately
available funds, the amount of such Lender's Revolving Commitment Percentage of
such unreimbursed drawing. Such payment shall be made on the day such notice is
received by such Lender from the Issuing Lender if such notice is received at or
before 2:00 P.M. (Charlotte, North Carolina time) and otherwise such payment
shall be made at or before 12:00 Noon (Charlotte, North Carolina time) on the
Business Day next succeeding the day such notice is received. If such Lender
does not pay such amount to the Issuing Lender in full upon such request, such
Lender shall, on demand, pay to the Administrative Agent for the account of the
Issuing Lender interest on the unpaid amount during the period from the date of
such drawing until such Lender pays such amount to the Issuing Lender in full at
a rate per annum equal to, if paid within two (2) Business Days of the date that
such Lender is required to make payment of such amount pursuant to the preceding
sentence, the Federal Funds Rate and, if paid thereafter, the Base Rate. Each
Lender's obligation to make such payment to the Issuing Lender, and the right of
the Issuing Lender to receive the same, shall be absolute and unconditional,
shall not be affected by any circumstance whatsoever, shall be satisfied without
regard to the termination of this Agreement or the Commitments hereunder, the
existence of a Default or Event of Default or the acceleration of the
obligations of the Borrower hereunder and shall be made without any offset,
abatement, withholding or reduction whatsoever. Simultaneously with the making
of each such payment by a Lender to the Issuing Lender, such Lender shall,
automatically and without any further action on the part of the Issuing Lender
or such Lender, acquire a Participation Interest in an amount equal to such
payment (excluding the portion of such payment constituting interest owing to
the Issuing Lender) in the unreimbursed drawn portion of the related Letter of
Credit, in the interest on the LOC Obligations in respect thereof and the
related LOC Documents, and shall have a claim against the Borrower with respect
thereto.
33
(e) REPAYMENT WITH REVOLVING LOANS. On any day on which the Borrower
shall have requested, or been deemed to have requested, a Revolving Loan advance
to reimburse a drawing under a Letter of Credit, the Administrative Agent shall
give notice to the affected Lenders that a Revolving Loan has been requested or
deemed requested by the Borrower to be made in connection with a drawing under a
Letter of Credit, in which case a Revolving Loan advance comprised of Base Rate
Loans (or Eurodollar Loans to the extent the Borrower has complied with the
procedures of Section 2.1(b)(i) with respect thereto) shall be immediately made
to the Borrower by all Lenders (notwithstanding any termination of the
Commitments pursuant to Section 8.2) pro rata based on the respective Revolving
Commitment Percentages of the Lenders (determined before giving effect to any
termination of the Commitments pursuant to Section 8.2) and the proceeds thereof
shall be paid directly to the Issuing Lender for application to the related LOC
Obligations. Each such Lender hereby irrevocably agrees to make its Revolving
Commitment Percentage of each such Revolving Loan immediately upon any such
request or deemed request in the amount, in the manner and on the date specified
in the preceding sentence notwithstanding (i) the amount of such borrowing may
not comply with the minimum amount for advances of Revolving Loans otherwise
required hereunder, (ii) whether any conditions specified in Section 4.2 are
then satisfied, (iii) whether a Default or an Event of Default then exists, (iv)
failure of any such request or deemed request for a Revolving Loan to be made by
the time otherwise required hereunder, (v) whether the date of such borrowing is
a date on which Revolving Loans are otherwise permitted to be made hereunder or
(vi) any termination of the Commitments relating thereto immediately prior to or
contemporaneously with such borrowing. In the event that any Revolving Loan
cannot for any reason be made on the date otherwise required above (including as
a result of the commencement of a proceeding under the Bankruptcy Code with
respect to the Borrower or any other Credit Party), then each such Lender hereby
agrees that it shall forthwith purchase (as of the date such borrowing would
otherwise have occurred, but adjusted for any payments received from the
Borrower on or after such date and prior to such purchase) from the Issuing
Lender such Participation Interests in the outstanding LOC Obligations as shall
be necessary to cause each such Lender to share in such LOC Obligations ratably
based upon the respective Revolving Commitment Percentages of the Lenders
(determined before giving effect to any termination of the Commitments pursuant
to Section 8.2), PROVIDED that at the time any purchase of Participation
Interests pursuant to this sentence is actually made, the purchasing Lender
shall be required to pay to the Issuing Lender, to the extent not paid to the
Issuing Lender by the Borrower in accordance with the terms of subsection (d)
above, interest on the principal amount of Participation Interests purchased for
each day from and including the day upon which such borrowing would otherwise
have occurred to but excluding the date of payment for such Participation
Interests, at the rate equal to, if paid within two (2) Business Days of the
date as which the Revolving Loan advance was required, the Federal Funds Rate,
and, if paid thereafter, the Base Rate.
(f) DESIGNATION OF SUBSIDIARIES AS ACCOUNT PARTIES. Notwithstanding
anything to the contrary set forth in this Agreement, including Section 2.2(a),
a Letter of Credit issued hereunder may contain a statement to the effect that
such Letter of Credit is issued for the account of a Subsidiary of the Borrower,
PROVIDED that notwithstanding such statement, the Borrower shall be the actual
account party for all purposes of this Agreement for such Letter
34
of Credit and such statement shall not affect the Borrower's reimbursement
obligations hereunder with respect to such Letter of Credit.
(g) RENEWAL, EXTENSION. The renewal or extension of any Letter of Credit
shall, for purposes hereof, be treated in all respects the same as the issuance
of a new Letter of Credit hereunder.
(h) UNIFORM CUSTOMS AND PRACTICES. The Issuing Lender may have the
Letters of Credit be subject to The Uniform Customs and Practices for
Documentary Credits, as published as of the date of issue by the International
Chamber of Commerce (the "UCP"), in which case the UCP may be incorporated
therein and deemed in all respects to be a part thereof.
(i) INDEMNIFICATION; NATURE OF ISSUING LENDER'S DUTIES.
(i) In addition to its other obligations under this Section 2.2, the
Borrower hereby agrees to pay, and protect, indemnify and save each Lender
harmless from and against, any and all claims, demands, liabilities,
damages, losses, costs, charges and expenses (including reasonable
attorneys' fees) that such Lender may incur or be subject to as a
consequence, direct or indirect, of (A) the issuance of any Letter of
Credit or (B) the failure of such Lender to honor a drawing under a Letter
of Credit as a result of any act or omission, whether rightful or wrongful,
of any present or future de jure or de facto government or governmental
authority (all such acts or omissions, herein called "GOVERNMENT ACTS").
(ii) As between the Borrower and the Lenders (including the Issuing
Lender), the Borrower shall assume all risks of the acts, omissions or
misuse of any Letter of Credit by the beneficiary thereof. No Lender
(including the Issuing Lender) shall be responsible: (A) for the form,
validity, sufficiency, accuracy, genuineness or legal effect of any
document submitted by any party in connection with the application for and
issuance of any Letter of Credit, even if it should in fact prove to be in
any or all respects invalid, insufficient, inaccurate, fraudulent or
forged; (B) for the validity or sufficiency of any instrument transferring
or assigning or purporting to transfer or assign any Letter of Credit or
the rights or benefits thereunder or proceeds thereof, in whole or in part,
that may prove to be invalid or ineffective for any reason; (C) for errors,
omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise, whether or not
they be written; (D) for any loss or delay in the transmission or otherwise
of any document required in order to make a drawing under a Letter of
Credit or of the proceeds thereof; and (E) for any consequences arising
from causes beyond the control of such Lender, including any Government
Acts. None of the above shall affect, impair, or prevent the vesting of
the Issuing Lender's rights or powers hereunder.
(iii) In furtherance and not in limitation of the specific provisions
hereinabove set forth, any action taken or omitted by any Lender (including
the Issuing Lender) under or in connection with any Letter of Credit or the
related certificates, if taken or omitted in good faith, shall not put such
Lender under any
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resulting liability to the Borrower or any other Credit Party. It is the
intention of the parties that this Agreement shall be construed and applied
to protect and indemnify each Lender (including the Issuing Lender) against
any and all risks involved in the issuance of the Letters of Credit, all of
which risks are hereby assumed by the Borrower (on behalf of itself and
each of the other Credit Parties), including any and all Government Acts.
No Lender (including the Issuing Lender) shall, in any way, be liable for
any failure by such Lender or anyone else to pay any drawing under any
Letter of Credit as a result of any Government Acts or any other cause
beyond the control of such Lender.
(iv) Nothing in this subsection (i) is intended to limit the
reimbursement obligations of the Borrower contained in subsection (d)
above. No act or omission of any current or prior beneficiary of a Letter
of Credit shall in any way affect or impair the rights of the Lenders
(including the Issuing Lender) to enforce any right, power or benefit under
this Agreement.
(v) Notwithstanding anything to the contrary contained in this
subsection (i), the Borrower shall have no obligation to indemnify any
Lender (including the Issuing Lender) in respect of any liability incurred
by such Lender (A) arising solely out of the gross negligence or willful
misconduct of such Lender, as determined by a court of competent
jurisdiction, or (B) caused by such Lender's failure to pay under any
Letter of Credit after presentation to it of a request strictly complying
with the terms and conditions of such Letter of Credit, as determined by a
court of competent jurisdiction, unless such payment is prohibited by any
law, regulation, court order or decree or such failure to pay is a result
of any Government Act.
(j) RESPONSIBILITY OF ISSUING LENDER. It is expressly understood and
agreed that the obligations of the Issuing Lender hereunder to the Lenders are
only those expressly set forth in this Agreement and that the Issuing Lender
shall be entitled to assume that the conditions precedent set forth in Section
4.2 have been satisfied unless it shall have acquired actual knowledge that any
such condition precedent has not been satisfied; PROVIDED, HOWEVER, that nothing
set forth in this Section 2.2 shall be deemed to prejudice the right of any
Lender to recover from the Issuing Lender any amounts made available by such
Lender to the Issuing Lender pursuant to this Section 2.2 in the event that it
is determined by a court of competent jurisdiction that the payment with respect
to a Letter of Credit constituted gross negligence or willful misconduct on the
part of the Issuing Lender.
(k) CONFLICT WITH LOC DOCUMENTS. In the event of any conflict between
this Agreement and any LOC Document (including any letter of credit
application), this Agreement shall control.
(l) CASH COLLATERAL. In the event that the Borrower is required pursuant
to the terms of this Agreement or any other Credit Document to cash
collateralize any LOC Obligations, the Borrower shall deposit in an account with
the Administrative Agent an amount in cash equal to 100% of such LOC
Obligations. Such deposit shall be held by the Administrative Agent as
collateral for the payment and performance of the LOC Obligations.
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The Administrative Agent shall have exclusive dominion and control, including
the exclusive right of withdrawal, over such account. The Administrative Agent
will, at the request of the Borrower, invest amounts deposited in such account
in Cash Equivalents; PROVIDED, however, that (i) amounts deposited in such
account in connection with any prepayment of Eurodollar Loans shall be invested
in Cash Equivalents that mature prior to the last day of the applicable Interest
Periods of the Eurodollar Loans to be prepaid, (ii) the Administrative Agent
shall not be required to make any investment that, in its sole judgment, would
require or cause the Administrative Agent to be in, or would result in any,
violation of any law, statute, rule or regulation, (iii) such Cash Equivalents
shall be subjected to a first priority perfected security interest in favor of
the Administrative Agent and (iv) if an Event of Default shall have occurred and
be continuing, the selection of such Cash Equivalents shall be in the sole
discretion of the Administrative Agent. The Borrower shall indemnify the
Administrative Agent for any losses relating to such investments in Cash
Equivalents. Other than any interest or profits earned on such investments,
such deposits shall not bear interest. Interest or profits, if any, on such
investments shall accumulate in such account. Moneys in such account shall be
applied by the Administrative Agent to reimburse the Issuing Lender immediately
for drawings under Letters of Credit and, if the maturity of the Loans has been
accelerated, to satisfy the LOC Obligations. If the Borrower is required to
provide an amount of cash collateral hereunder as a result of an Event of
Default, such amount (to the extent not applied as aforesaid) shall be returned
to the Borrower within three Business Days after all Events of Default have been
cured or waived. If the Borrower is required to provide an amount of cash
collateral hereunder pursuant to Section 3.3(b)(i), such amount (to the extent
not applied as aforesaid) shall be returned to the Borrower upon demand;
PROVIDED that, after giving effect to such return, (i) the sum of the aggregate
amount of outstanding LOC Obligations, PLUS the aggregate principal amount of
outstanding Revolving Loans would not exceed the aggregate Revolving Committed
Amount and (ii) no Default or Event of Default shall have occurred and be
continuing. If the Borrower is required to deposit an amount of cash collateral
hereunder pursuant to Section 3.3(b)(ii), (iii) or (iv), interest or profits
thereon (to the extent not applied as aforesaid) shall be returned to the
Borrower after the full amount of such deposit has been applied by the
Administrative Agent to reimburse the Issuing Lender for drawings under Letters
of Credit. The Borrower hereby pledges and assigns to the Administrative Agent,
for its benefit and the benefit of the Lenders, the cash collateral account
established hereunder (and all monies and investments held therein) to secure
the Credit Obligations.
SECTION 3
OTHER PROVISIONS RELATING TO CREDIT FACILITIES
3.1 DEFAULT RATE. Upon the occurrence, and during the continuance, of an
Event of Default, the principal of and, to the extent permitted by law, interest
on the Loans and any other amounts owing hereunder or under the other Credit
Documents shall bear interest, payable on demand, at a per annum rate equal to
(a) in the case of principal of any Loan, the rate applicable to such Loan
during such period pursuant to Section 2, PLUS 2.00%, (b) in the case of
interest on any Loan, the Adjusted Base Rate during such period, PLUS 2.00% and
(c) in the case of any other amount, the Adjusted Base Rate for Revolving Loans
during such period, PLUS 2.00%).
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3.2 EXTENSION AND CONVERSION. Subject to the terms of Section 4.2, the
Borrower shall have the option, on any Business Day, to extend existing Loans
into a subsequent permissible Interest Period or to convert Loans into Loans of
another type; PROVIDED, HOWEVER, that (i) except pursuant to Section 3.8,
Eurodollar Loans may be converted into Base Rate Loans only on the last day of
the Interest Period applicable thereto, (ii) Eurodollar Loans may be extended,
and Base Rate Loans may be converted into Eurodollar Loans, only if no Default
or Event of Default is in existence on the date of extension or conversion,
(iii) Loans extended as, or converted into, Eurodollar Loans shall be subject to
the terms of the definition of "Interest Period" set forth in Section 1.1 and
shall be in such minimum amounts as provided in Section 2.1(b)(ii), (iv) the
total number of Eurodollar Loans outstanding at any time shall be no greater
than the maximum number provided in Section 2.1(a) (it being understood that,
for purposes hereof, Eurodollar Loans with different Interest Periods shall be
considered as separate Eurodollar Loans, even if they begin on the same date,
although borrowings may, in accordance with the provisions hereof, be combined
through extensions or conversions at the end of existing Interest Periods to
constitute a single new Eurodollar Loan with the same Interest Period) and (v)
any request for extension or conversion of a Eurodollar Loan which shall fail to
specify an Interest Period shall be deemed to be a request for an Interest
Period of one month. Each such extension or conversion shall be effected by the
Borrower by giving a Notice of Extension/Conversion (or telephonic notice
promptly confirmed in writing) to the office of the Administrative Agent
specified in specified in SCHEDULE 1.1C, or at such other office as the
Administrative Agent may designate in writing, prior to 11:00 A.M. (Charlotte,
North Carolina time) on the Business Day of, in the case of the conversion of a
Eurodollar Loan into a Base Rate Loan, and on the third Business Day prior to,
in the case of the extension of a Eurodollar Loan as, or conversion of a Base
Rate Loan into, a Eurodollar Loan, the date of the proposed extension or
conversion, specifying the date of the proposed extension or conversion, the
Loans to be so extended or converted, the types of Loans into which such Loans
are to be converted and, if appropriate, the applicable Interest Periods with
respect thereto. Each request for extension or conversion shall be irrevocable
and shall constitute a representation and warranty by the Borrower of the
matters specified in subsections (b), (c), (d), (e) and (f) of Section 4.2. In
the event the Borrower fails to request an extension or conversion of any
Eurodollar Loan in accordance with this Section 3.2 or any such requested
conversion or extension is not permitted by this Agreement, then such Eurodollar
Loan shall be automatically converted into a Base Rate Loan at the end of the
Interest Period applicable thereto. The Administrative Agent shall give each
affected Lender notice as promptly as practicable of any such proposed extension
or conversion of any Loan. Each extension or conversion shall be effected by
each Lender and the Administrative Agent by recording for the account of such
Lender the new Loan of such Lender resulting from such extension or conversion
and reducing the Loan (or portion thereof) of such Lender being extended or
converted by an equivalent principal amount. Accrued interest on a Loan (or
portion thereof) being extended or converted shall be paid by the Borrower (A)
with respect to any Base Rate Loan being converted to a Eurodollar Loan, on the
last day of the first fiscal quarter of the Borrower ending on or after the date
of conversion and (B) otherwise, on the date of extension or conversion.
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3.3 PREPAYMENTS. (a) VOLUNTARY PREPAYMENTS. The Borrower shall have the
right to prepay Loans in whole or in part from time to time, subject to Section
3.11 but otherwise without premium or penalty; PROVIDED, HOWEVER, that (i) each
partial prepayment of Loans shall be in a minimum principal amount of $1,000,000
and integral multiples of $500,000 in excess thereof and (ii) the Borrower shall
have given prior written or telecopy notice (or telephone notice promptly
confirmed by written or telecopy notice) to the Administrative Agent, in the
case of any Revolving Loan which is a Base Rate Loan, by 11:00 A.M. (Charlotte,
North Carolina time), on the date of prepayment and, in the case of any other
Loan, by 10:00 A.M. (Charlotte, North Carolina time), at least three (3)
Business Days prior to the date of prepayment. Each notice of prepayment shall
specify the prepayment date, the principal amount to be prepaid, whether the
Loan to be prepaid is a Eurodollar Loan or Base Rate Loan and, in the case of a
Eurodollar Loan, the Interest Period of such Loan. Each notice of prepayment
shall be irrevocable and shall commit the Borrower to prepay such Loan by the
amount stated therein on the date stated therein. All prepayments under this
Section 3.3(a) shall be subject to Section 3.11. All prepayments under this
Section 3.3(a) shall be accompanied by accrued interest on the principal amount
being prepaid to the date of payment.
(b) MANDATORY PREPAYMENTS.
(i) REVOLVING COMMITTED AMOUNT. If at any time, the sum of the
aggregate principal amount of outstanding Revolving Loans, PLUS the
aggregate amount of the outstanding LOC Obligations shall exceed the
Revolving Committed Amount at such time, the Borrower immediately shall
prepay the Revolving Loans and/or cash collateralize or pay the LOC
Obligations, in an aggregate amount sufficient to eliminate such excess.
(ii) ASSET DISPOSITIONS. Immediately upon receipt by any
Consolidated Party of proceeds from any Asset Disposition (other than any
Excluded Asset Disposition) or any reduction after the Closing Date of the
cash consideration paid to the Sellers under the Acquisition Agreement
(including as a result of any indemnity payment by the Sellers or any party
guarantying any obligation of any of the Sellers under the Acquisition
Agreement to the Parent or the Borrower), the Borrower shall prepay the
Loans and/or cash collateralize or pay the LOC Obligations in an aggregate
amount equal to 100% of the Net Cash Proceeds of such Asset Disposition or
100% of the proceeds of such reduction, as applicable.
(iii) DEBT ISSUANCES. Immediately upon receipt by any Consolidated
Party of proceeds from any Debt Issuance (other than any Excluded Debt
Issuance), the Borrower shall prepay the Loans and/or cash collateralize
the LOC Obligations in an aggregate amount equal to 100% of the Net Cash
Proceeds of such Debt Issuance; PROVIDED, THAT, in the case of the issuance
of the Senior Notes, the Net Cash Proceeds therefrom shall be applied
FIRST, to repay the Xxxxxxx Bridge Note and SECOND, to prepay the Loans
and/or cash collateralize the LOC Obligations pursuant to this subclause
(iii).
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(iv) ISSUANCES OF EQUITY. Immediately upon receipt by any
Consolidated Party of proceeds from any Equity Issuance (other than any
Excluded Equity Issuance), the Borrower shall prepay the Loans and/or cash
collateralize the LOC Obligations pursuant to Section 2.2(l) in an
aggregate amount equal to 100% of the Net Cash Proceeds of such Equity
Issuance.
(v) APPLICATION OF MANDATORY PREPAYMENTS. All amounts required to
be paid pursuant to this Section 3.3(b) shall be applied to Revolving
Credit Facility Obligations.
(vi) PREPAYMENT ACCOUNTS. Amounts to be applied as provided in
subsection (v) above to the prepayment of Loans shall be applied first to
reduce outstanding Base Rate Loans. Any amounts remaining after each such
application shall, at the option of the Borrower, be applied to prepay
Eurodollar Loans immediately and/or shall be deposited in a separate
Prepayment Account (as defined below). The Administrative Agent shall
apply any cash deposited in the Prepayment Account for any Eurodollar Loans
to prepay such Loans on the last day of their respective Interest Periods
(or, at the direction of the Borrower, on any earlier date) until all
outstanding Eurodollar Loans have been prepaid or until all the allocable
cash on deposit in the Prepayment Account for such Loans has been
exhausted. For purposes of this Agreement, the term "PREPAYMENT ACCOUNT"
for any Eurodollar Loans shall mean an account established by the Borrower
with the Administrative Agent and over which the Administrative Agent shall
have exclusive dominion and control, including the exclusive right of
withdrawal for application in accordance with this subsection. The
Administrative Agent will, at the request of the Borrower, invest amounts
on deposit in the Prepayment Account for any Eurodollar Loans in Cash
Equivalents that mature prior to the last day of the applicable Interest
Periods of Eurodollar Loans to be prepaid; PROVIDED, HOWEVER, that (i) the
Administrative Agent shall not be required to make any investment that, in
its sole judgment, would require or cause the Administrative Agent to be
in, or would result in any, violation of any law, statute, rule or
regulation, (ii) such Cash Equivalents shall be subjected to a first
priority perfected security interest in favor of the Administrative Agent
and (iii) if an Event of Default shall have occurred and be continuing, the
selection of such Cash Equivalents shall be in the sole discretion of the
Administrative Agent. The Borrower shall indemnify the Administrative
Agent for any losses relating to such investments in Cash Equivalents so
that the amount available to prepay Eurodollar Loans on the last day of the
applicable Interest Periods is not less than the amount that would have
been available had no investments been made pursuant thereto. Other than
any interest or profits earned on such investments, the Prepayment Accounts
shall not bear interest. Interest or profits, if any, on the investments
in any Prepayment Account shall accumulate in such Prepayment Account. If
the maturity of the Loans has been accelerated pursuant to Section 8.2, the
Administrative Agent may, in its sole discretion, apply all amounts on
deposit in the Prepayment Account for any Eurodollar Loans to satisfy any
of the Credit Obligations related to such Loans. The Borrower hereby
pledges and assigns to the Administrative Agent, for its benefit and the
benefit of the Lenders, each Prepayment Account established hereunder to
secure the Credit Obligations.
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(vii) NOTICE. The Borrower shall give to the Administrative Agent
and the Lenders at least five (5) Business Days' prior written or telecopy
notice of each and every event or occurrence requiring a prepayment under
Section 3.3(b)(ii), (iii) or (iv), including the amount of Net Cash
Proceeds expected to be received therefrom and the expected schedule for
receiving such proceeds; PROVIDED, HOWEVER, that in the case of any
prepayment event consisting of a Casualty or Condemnation, the Borrower
shall give such notice within five (5) Business Days after the occurrence
of such event.
3.4 TERMINATION AND REDUCTION OF COMMITMENTS. (a) VOLUNTARY REDUCTIONS.
The Borrower may from time to time permanently reduce or terminate the Revolving
Committed Amount in whole or in part (in minimum aggregate amounts of $1,000,000
or in integral multiples of $500,000 in excess thereof (or, if less, the full
remaining amount of the then applicable Revolving Committed Amount)) upon five
(5) Business Days' prior written or telecopy notice to the Administrative Agent;
PROVIDED, HOWEVER, no such termination or reduction shall be made which would
cause the sum at any time of (i) the aggregate principal amount of outstanding
Revolving Loans, PLUS (ii) the aggregate amount of outstanding LOC Obligations
to exceed the Revolving Committed Amount as so terminated or reduced, unless,
concurrently with such termination or reduction, the Revolving Loans are repaid
(and, after the Revolving Loans have been paid in full, the LOC Obligations are
cash collateralized) to the extent necessary to eliminate such excess. The
Administrative Agent shall promptly notify each affected Lender of the receipt
by the Administrative Agent of any notice from the Borrower pursuant to this
Section 3.4(a).
(b) MANDATORY REDUCTIONS.
(i) On any date that any Revolving Loans are required to be
prepaid and/or LOC Obligations are required to be cash collateralized
pursuant to the terms of Section 3.3(b)(ii), (iii), (iv) (or would be so
required if any Revolving Loans, or LOC Obligations were outstanding), the
Revolving Committed Amount shall be automatically and permanently reduced
by the total amount of such required prepayments and cash collateral (and,
in the event that the amount of any payment referred to in
Section 3.3(b)(ii), (iii) or (iv) which is allocable to the Revolving
Credit Facility Obligations exceeds the amount of all outstanding Revolving
Credit Facility Obligations, the Revolving Committed Amount shall be
further reduced by 100% of such excess); PROVIDED, HOWEVER, that in the
event of any prepayment pursuant to Section 3.3(b)(iii) relating to the
issuance of the Senior Notes, the Revolving Committed Amount shall be
reduced to $35,000,000.
(c) TERMINATION. The Revolving Commitments of the Lenders and the LOC
Commitment of the Issuing Lender shall automatically terminate on the
Termination Date.
(d) GENERAL. The Borrower shall pay to the Administrative Agent for the
account of the Lenders in accordance with the terms of Section 3.5(b), on the
date of each termination or reduction of the Revolving Committed Amount, the
Commitment Fee accrued through the date of such termination or reduction on the
amount of the Revolving Committed Amount so terminated or reduced.
41
3.5 FEES. (a) UNDERWRITING FEES. The Borrower agrees to pay to the
Administrative Agent in immediately available funds on or before the Closing
Date an underwriting fee (the "UNDERWRITING FEE") in the amount provided in the
Agent's Fee Letter. The Underwriting Fee shall be allocated among the Lenders
in the manner previously described by the Administrative Agent and the
Documentation Agent to the other Lenders. It is understood that no underwriting
fee will be charged by the Administrative Agent or the Documentation Agent in
the event this Agreement is amended and restated in connection with the issuance
of the Senior Notes.
(b) COMMITMENT FEE. In consideration of the Revolving Commitments of the
Lenders hereunder, the Borrower agrees to pay to the Administrative Agent for
the account of each Lender a fee (the "COMMITMENT FEE") on such Lender's
Revolving Commitment Percentage of the Unused Revolving Committed Amount,
computed at a per annum rate for each day during the applicable Commitment Fee
Calculation Period at a rate equal to 0.50%. The Commitment Fee shall commence
to accrue on the Closing Date and shall be due and payable in arrears on the
last business day of each March, June, September and December (and any date that
the Revolving Committed Amount is reduced as provided in Section 3.4(a) or (b)
and the Termination Date) for the immediately preceding quarter or portion
thereof (each such quarter or portion thereof being herein referred to as an
"COMMITMENT FEE CALCULATION PERIOD"), beginning with the first of such dates to
occur after the Closing Date.
(c) LETTER OF CREDIT FEES.
(i) STANDBY LETTER OF CREDIT ISSUANCE FEE. In consideration of
the issuance of standby Letters of Credit hereunder, the Borrower promises
to pay to the Administrative Agent for the account of each Lender a fee
(the "STANDBY LETTER OF CREDIT FEE") on such Lender's Revolving Commitment
Percentage of the average daily maximum amount available to be drawn under
each such standby Letter of Credit computed at a per annum rate for each
day from the date of issuance to the date of expiration equal to 0.125%.
The Standby Letter of Credit Fee will be payable quarterly in arrears on
the last Business Day of each March, June, September and December for the
immediately preceding quarter (or portion thereof), beginning with the
first of such dates to occur after the Closing Date.
(ii) TRADE LETTER OF CREDIT DRAWING FEE. In consideration of the
issuance of trade Letters of Credit hereunder, the Borrower promises to pay
to the Administrative Agent for the account of each Lender a fee (the
"TRADE LETTER OF CREDIT FEE") equal to 0.125% on such Lender's Revolving
Commitment Percentage of the amount of each drawing under any such trade
Letter of Credit. The Trade Letter of Credit Fee will be payable on each
date of drawing under a trade Letter of Credit.
(iii) ISSUING LENDER FEES. In addition to the Standby Letter of
Credit Fee payable pursuant to clause (i) above and the Trade Letter of
Credit Fee payable pursuant to clause (ii) above, the Borrower promises to
pay to the Issuing Lender for its own account without sharing by the other
Lenders the letter of credit fronting and negotiation fees agreed to by the
Borrower and the Issuing Lender from time to time and the customary charges
from time to time of the Issuing Lender with respect to the
42
issuance, amendment, transfer, administration, cancellation and conversion
of, and drawings under, such Letters of Credit (collectively, the "ISSUING
LENDER FEES").
(d) AGENT'S FEES. The Borrower agrees to pay to each of the
Administrative Agent, the Documentation Agent and NMS, for its own account, any
other fees payable to such party by the Borrower pursuant to the Agent's Fee
Letter.
3.6 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 Fixed Rate Loans, any
of its Notes or its obligation to make Fixed Rate Loans, or change the
basis of taxation of any amounts payable to such Lender (or its Applicable
Lending Office) under this Agreement or any of its Notes in respect of any
Fixed Rate Loans (other than Excluded Taxes);
(ii) shall impose, modify or deem applicable any reserve, special
deposit, assessment, compulsory loan or similar requirement (other than the
Reserve Requirement utilized in the determination of the Adjusted
Eurodollar Rate) relating to any extensions of credit or other assets of,
or any deposits with or other liabilities or commitments of, such Lender
(or its Applicable Lending Office), including any of the Commitments 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 any of its Notes or any of such extensions of credit or
liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such Lender
(or its Applicable Lending Office) of making, Converting into, Extending, or
maintaining any Fixed Rate Loans or to reduce any sum received or receivable by
such Lender (or its Applicable Lending Office) under this Agreement or any of
its Notes with respect to any Fixed 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 3.6, the Borrower may, by notice to such Lender
(with a copy to the Administrative Agent), suspend the obligation of such Lender
to make or Extend 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 3.9 shall be applicable); PROVIDED that
such suspension shall not affect the right of such Lender to receive the
compensation so requested.
43
(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 Administrative
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 3.6 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 3.6 shall furnish to the Borrower and
the Administrative Agent a statement setting forth the additional amount or
amounts to be paid to it hereunder which shall be conclusive in the absence of
manifest error. In determining such amount, such Lender may use any reasonable
averaging and attribution methods.
3.7 LIMITATION ON TYPES OF LOANS. If on or prior to the first day of any
Interest Period for any Eurodollar Loan:
(a) the Administrative 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 Administrative Agent that the Adjusted
Eurodollar Rate will not adequately and fairly reflect the cost to the
Lenders of funding Eurodollar Loans for such Interest Period;
then the Administrative Agent shall give the Borrower prompt notice thereof
specifying the relevant amounts or periods, and so long as such condition
remains in effect, the Lenders shall be under no obligation to make additional
Eurodollar Loans, Extend Eurodollar Loans or to Convert Base Rate Loans into
Eurodollar Loans and the Borrower shall, on the last day(s) of the then current
Interest Period(s) for the outstanding Eurodollar Loans, either prepay such
Loans or Convert such Loans into Base Rate Loans in accordance with the terms of
this Agreement.
3.8 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,
44
or fund Eurodollar Loans hereunder, then such Lender shall promptly notify the
Borrower thereof and such Lender's obligation to make or Extend Eurodollar Loans
and to Convert Base Rate Loans into Eurodollar Loans shall be suspended until
such time as such Lender may again make, maintain and fund Eurodollar Loans (in
which case the provisions of Section 3.9 shall be applicable).
3.9 TREATMENT OF AFFECTED LOANS. If the obligation of any Lender to make
Eurodollar Loans or to Extend, or to Convert Base Rate Loans into, Eurodollar
Loans shall be suspended pursuant to Section 3.6 or 3.8 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 3.8
hereof, on such earlier date as such Lender may specify to the Borrower with a
copy to the Administrative Agent) and, unless and until such Lender gives notice
as provided below that the circumstances specified in Section 3.6 or 3.8 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 Extended by such
Lender as Loans of the Affected Type shall be made or Extended 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 Administrative
Agent) that the circumstances specified in Section 3.6 or 3.8 hereof that gave
rise to the Conversion of such Lender's Affected Loans pursuant to this Section
3.9 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 Commitments.
3.10 TAXES. (a) Any and all payments by the Borrower to or for the
account of any Lender or the Administrative Agent hereunder or under any other
Credit Document shall be made free and clear of and without deduction for any
and all present or future taxes, duties, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, EXCLUDING, in the case
of each Lender and the Administrative Agent, Excluded Taxes imposed on such
Lender (or its Applicable Lending Office) or the Administrative Agent (as the
case may be) (all such non-Excluded Taxes 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 Credit Document
to any Lender or the Administrative Agent, (i) the sum payable shall be
increased as necessary so that after
45
making all required deductions (including deductions applicable to additional
sums payable under this Section 3.10) such Lender or the Administrative 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 Administrative Agent, at the office of the Administrative Agent
specified in SCHEDULE 1.1C, 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 (including mortgage recording taxes and similar taxes) which
arise from any payment made under this Agreement or any other Credit Document or
from the execution or delivery of, or otherwise with respect to, this Agreement
or any other Credit Document (hereinafter referred to as "OTHER TAXES").
(c) The Borrower agrees to indemnify each Lender and the Administrative
Agent for the full amount of Taxes and Other Taxes (including any Taxes or Other
Taxes imposed or asserted by any jurisdiction on amounts payable under this
Section 3.10) paid by such Lender or the Administrative 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 Administrative Agent, on or before the date, if any, such Lender changes
its Applicable Lending Office by designating a different Applicable Lending
Office (a "NEW LENDING OFFICE") and promptly upon the obsolescence or inability
of any form delivered pursuant to this Section 3.10(d) (but only so long as such
Lender remains lawfully able to do so), shall provide the Borrower and the
Administrative Agent with (i) two accurate and complete original signed copies
of Internal Revenue Service Form 1001 or 4224, as appropriate, or any successor
form prescribed by the Internal Revenue Service, certifying that such Lender is
entitled to benefits under an income tax treaty to which the United States is a
party which reduces the rate of withholding tax on payments of interest or
certifying that the income receivable pursuant to this 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 Administrative Agent with the appropriate form pursuant to
Section 3.10(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 3.10(a), 3.10(b) or 3.10(c) with respect to Taxes
46
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 3.10, 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) The Borrower shall not be required to indemnify any Lender or to pay
any additional amounts to any Lender, in respect of United States federal
withholding tax pursuant to Section 3.10(a), (b) or (c) above to the extent that
the obligation to withhold amounts with respect to United States federal
withholding tax existed on the date such Lender became a party to this Agreement
or, with respect to payments to a New Lending Office, the date such Lender
designated such New Lending Office with respect to a Loan; provided that this
Section 3.10(g) shall not apply (i) to any Lender as a result of an assignment
of a new Lender or designation of a New Lending Office made at the request of
the Borrower and (ii) to the extent the indemnity payment or additional amounts
any Lender would be entitled to receive (without regard to this paragraph (g))
do not exceed the indemnity payment or additional amounts that the Lender making
the assignment to a new Lender or designation of New Lending Office would have
been entitled to receive in the absence of such assignment or designation.
(h) If the Borrower pays any additional amount or indemnification under
this Section 3.10 to a Lender or the Administrative Agent, such Lender or the
Administrative Agent shall take reasonable steps within its power to obtain any
refund, reduction or credit which may be available with respect to the Taxes
giving rise to such additional amount or indemnification, and if such Lender or
the Administrative Agent determines that it has received or realized in
connection therewith any refund or any reduction of, or credit against, its tax
liabilities such Lender or the Administrative Agent shall pay to the Borrower an
amount that is equal to the net benefit, after tax, which was obtained by the
Lender or the Administrative Agent as a consequence of such refund, reduction or
credit.
3.11 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 Extension of a Fixed Rate Loan for
any reason (including the acceleration of the Loans pursuant to
Section 8.2) on a date other than the last day of the Interest Period for
such Loan;
(b) any failure by the Borrower for any reason (including the
failure of any condition precedent specified in Section 4 to be satisfied)
to borrow, Convert, Extend or prepay a Fixed Rate Loan on the date for such
borrowing, Conversion, Extension
47
or prepayment specified in the relevant notice of borrowing, prepayment,
Extension or Conversion under this Agreement; or
(c) any assignment or participation arranged by NMS within 180
days after the Closing Date.
3.12 PRO RATA TREATMENT. Except to the extent otherwise provided herein:
(a) LOANS. Each Loan, each payment or prepayment of principal of
any Loan or reimbursement obligations arising from drawings under Letters
of Credit, each payment of interest on the Loans or reimbursement
obligations arising from drawings under Letters of Credit, each payment of
Commitment Fees, each payment of the Standby Letter of Credit Fee, each
payment of the Trade Letter of Credit Fee, each reduction of the Revolving
Committed Amount and each Conversion or Extension of any Loan, shall be
allocated pro rata among the Lenders in accordance with the respective
principal amounts of their outstanding Loans and Participation Interests.
(b) ADVANCES. No Lender shall be responsible for the failure or
delay by any other Lender in its obligation to make its ratable share of a
borrowing hereunder; PROVIDED, HOWEVER, that the failure of any Lender to
fulfill its obligations hereunder shall not relieve any other Lender of its
obligations hereunder. Unless the Administrative Agent shall have been
notified by any Lender prior to the date of any requested borrowing that
such Lender does not intend to make available to the Administrative Agent
its ratable share of such borrowing to be made on such date, the
Administrative Agent may assume that such Lender has made such amount
available to the Administrative Agent on the date of such borrowing, and
the Administrative Agent in reliance upon such assumption, may (in its sole
discretion but without any obligation to do so) make available to the
Borrower a corresponding amount. If such corresponding amount is not in
fact made available to the Administrative Agent, the Administrative Agent
shall be able to recover such corresponding amount from such Lender. If
such Lender does not pay such corresponding amount forthwith upon the
Administrative Agent's demand therefor, the Administrative Agent will
promptly notify the Borrower, and the Borrower shall immediately pay such
corresponding amount to the Administrative Agent. The Administrative Agent
shall also be entitled to recover from the Lender or the Borrower, as the
case may be, interest on such corresponding amount in respect of each day
from the date such corresponding amount was made available by the
Administrative Agent to the Borrower to the date such corresponding amount
is recovered by the Administrative Agent at a per annum rate equal to (i)
from the Borrower, the applicable rate for the applicable borrowing
pursuant to the Notice of Borrowing and (ii) from a Lender, if paid within
two (2) Business Days of the date such corresponding amount was made
available by the Administrative Agent to the Borrower, the Federal Funds
Rate and, if paid thereafter, the Base Rate.
3.13 SHARING OF PAYMENTS. The Lenders agree among themselves that, in the
event that any Lender shall obtain payment in respect of any Loan, LOC
Obligation or any other
48
obligation owing to such Lender under this Agreement through the exercise of a
right of setoff, banker's lien or counterclaim, or pursuant to a secured claim
under Section 506 of Title 11 of the United States Code or other security or
interest arising from, or in lieu of, such secured claim, received by such
Lender under any applicable bankruptcy, insolvency or other similar law or
otherwise, or by any other means (whether voluntarily or involuntarily by
set-off or otherwise), in excess of its pro rata share of such payment as
provided for in this Agreement, such Lender shall promptly purchase from the
other Lenders a Participation Interest in such Loan, LOC Obligation or other
obligation in such amounts, and make such other adjustments from time to time,
as shall be equitable to the end that all Lenders share such payment in
accordance with their respective ratable shares as provided for in this
Agreement. The Lenders further agree among themselves that if payment to a
Lender obtained by such Lender through the exercise of a right of setoff,
banker's lien, counterclaim or other event as aforesaid shall be rescinded or
must otherwise be restored, each Lender which shall have shared the benefit of
such payment shall, by repurchase of a Participation Interest theretofore sold,
return its share of that benefit (together with its share of any accrued
interest payable with respect thereto) to each Lender whose payment shall have
been rescinded or otherwise restored. The Borrower agrees that any Lender so
purchasing such a Participation Interest pursuant to this Section 3.13 may, to
the fullest extent permitted by law, exercise all rights of payment, including
setoff, banker's lien or counterclaim, with respect to such Participation
Interest as fully as if such Lender were a holder of such Loan, LOC Obligations
or other obligation in the amount of such Participation Interest. Except as
otherwise expressly provided in this Agreement, if any Lender or the
Administrative Agent shall fail to remit to the Administrative Agent or any
other Lender an amount payable by such Lender or the Administrative Agent to the
Administrative Agent or such other Lender pursuant to this Agreement on the date
when such amount is due, such payments shall be made together with interest
thereon for each date from the date such amount is due until the date such
amount is paid to the Administrative Agent or such other Lender at a rate per
annum equal to the Federal Funds Rate. If under any applicable bankruptcy,
insolvency or other similar law, any Lender receives a secured claim in lieu of
a setoff to which this Section 3.13 applies, such Lender shall, to the extent
practicable, exercise its rights in respect of such secured claim in a manner
consistent with the rights of the Lenders under this Section 3.13 to share in
the benefits of any recovery on such secured claim.
3.14 PAYMENTS, COMPUTATIONS, ETC. (a) Except as otherwise specifically
provided herein, all payments hereunder shall be made to the Administrative
Agent in Dollars in immediately available funds, without offset, deduction,
counterclaim or withholding of any kind, at the Administrative Agent's office
specified in SCHEDULE 1.1C not later than 2:00 P.M. (Charlotte, North Carolina
time) on the date when due. Payments received after such time shall be deemed
to have been received on the next succeeding Business Day. The Administrative
Agent may (but shall not be obligated to) debit the amount of any such payment
which is not made by such time to any ordinary deposit account of the Borrower
maintained with the Administrative Agent (with notice to the Borrower). The
Borrower shall, at the time it makes any payment under this Agreement, specify
to the Administrative Agent the Loans, LOC Obligations, Fees, interest or other
amounts payable by the Borrower hereunder to which such payment is to be applied
(and in the event that it fails so to specify, or if such application would be
inconsistent with the terms hereof, the Administrative Agent shall distribute
such payment to the Lenders in such manner as the Administrative Agent may
49
determine to be appropriate in respect of obligations owing by the Borrower
hereunder, subject to the terms of Section 3.12(a)). The Administrative Agent
will distribute such payments to such Lenders, if any such payment is received
prior to 12:00 Noon (Charlotte, North Carolina time) on a Business Day in like
funds as received prior to the end of such Business Day and otherwise the
Administrative Agent will distribute such payment to such Lenders on the next
succeeding Business Day. Whenever any payment hereunder shall be stated to be
due on a day which is not a Business Day, the due date thereof shall be extended
to the next succeeding Business Day (subject to accrual of interest and Fees for
the period of such extension), except that in the case of Eurodollar Loans, if
the extension would cause the payment to be made in the next following calendar
month, then such payment shall instead be made on the next preceding Business
Day. Except as expressly provided otherwise herein, all computations of
interest and Fees shall be made on the basis of actual number of days elapsed
over a year of 360 days. Interest shall accrue from and include the date of
borrowing, but shall exclude the date of payment.
(b) ALLOCATION OF PAYMENTS AFTER EVENT OF DEFAULT. Notwithstanding any
other provisions of this Agreement to the contrary, after the occurrence and
during the continuance of an Event of Default, all amounts collected or received
by the Administrative Agent or any other Lender on account of the Credit
Obligations or any other amounts outstanding under any of the Credit Documents
or in respect of the Collateral shall be paid over or delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket costs and
expenses (including reasonable attorneys' fees) of the Administrative Agent
in connection with enforcing the rights of the Secured Parties under the
Credit Documents and any protective advances made by the Administrative
Agent with respect to the Collateral under or pursuant to the terms of the
Collateral Documents;
SECOND, to payment of any fees owed to the Administrative Agent;
THIRD, to the payment of all reasonable out-of-pocket costs and
expenses (including reasonable attorneys' fees) of each of the Lenders in
connection with enforcing its rights under the Credit Documents or
otherwise with respect to the Credit Obligations owing to such Lender;
FOURTH, to the payment of all of the Credit Obligations consisting of
accrued fees and interest;
FIFTH, to the payment of the outstanding principal amount of the
Credit Obligations (including the payment or cash collateralization of the
outstanding LOC Obligations);
SIXTH, to all other Credit Obligations and other obligations which
shall have become due and payable under the Credit Documents or otherwise
and not repaid pursuant to clauses "FIRST" through "FIFTH" above; and
50
SEVENTH, to the payment of the surplus, if any, to whoever may be
lawfully entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (ii) each of the Lenders shall receive an amount equal to
its pro rata share (based on the proportion that the then outstanding Loans and
Participation Interest in LOC Obligations held by such Lender bears to the
aggregate amount of the then outstanding Loans and Participation Interest in LOC
Obligations) of amounts available to be applied pursuant to clauses "THIRD",
"FOURTH", "FIFTH" and "SIXTH" above; and (iii) to the extent that any amounts
available for distribution pursuant to clause "FIFTH" above are attributable to
the issued but undrawn amount of outstanding Letters of Credit, such amounts
shall be held by the Administrative Agent in a cash collateral account pursuant
to Section 2.2(l) and applied (A) first, to reimburse the Issuing Lender from
time to time for any drawings under such Letters of Credit and (B) then,
following the expiration of all Letters of Credit, to all other obligations of
the types described in clauses "FIFTH" and "SIXTH" above in the manner provided
in this Section 3.14(b). Notwithstanding the foregoing provisions of this
Section 3.14(b), (I) amounts on deposit in a Prepayment Account for any Loans
upon the occurrence of any such Event of Default shall be applied, first, to pay
such Loans and, second, after all such Loans have been paid in full, to the
other Credit Obligations in the manner provided in this Section 3.14(b) and (II)
amounts on deposit in a cash collateral account pursuant to Section 2.2(l) upon
the occurrence of any such Event of Default shall be applied, first, to
reimburse the Issuing Lender from time to time for any drawings under any
Letters of Credit and, second, following the expiration of all Letters of
Credit, to the other Credit Obligations in the manner provided in this Section
3.14(b).
3.15 EVIDENCE OF DEBT. (a) Each Lender shall maintain an account or
accounts evidencing each Loan made by such Lender to the Borrower from time to
time, including the amounts of principal and interest payable and paid to such
Lender from time to time under this Agreement. Each Lender will make reasonable
efforts to maintain the accuracy of its account or accounts and to promptly
update its account or accounts from time to time, as necessary.
(b) The Administrative Agent shall maintain the Register pursuant to
Section 10.3(c), and a subaccount for each Lender, in which Register and
subaccounts (taken together) shall be recorded (i) the amount, type and Interest
Period of each such Loan hereunder, (ii) the amount of any principal or interest
due and payable or to become due and payable to each Lender hereunder and (iii)
the amount of any sum received by the Administrative Agent hereunder from or for
the account of the Borrower and each Lender's share thereof. The Administrative
Agent will make reasonable efforts to maintain the accuracy of the subaccounts
referred to in the preceding sentence and to promptly update such subaccounts
from time to time, as necessary.
(c) The entries made in the accounts, Register and subaccounts maintained
pursuant to subsection (b) of this Section 3.15 (and, if consistent with the
entries of the Administrative Agent, subsection (a)) shall be prima facie
evidence of the existence and amounts of the obligations of the Borrower therein
recorded; PROVIDED, HOWEVER, that the
51
failure of any Lender or the Administrative Agent to maintain any such account,
such Register or such subaccount, as applicable, or any error therein, shall not
in any manner affect the obligation of the Borrower to repay the Loans made by
such Lender in accordance with the terms hereof.
3.16 ASSIGNMENT OF COMMITMENTS UNDER CERTAIN CIRCUMSTANCES. In the event
(a) any Lender requests compensation pursuant to Section 3.6, (b) any Lender
delivers a notice described in Section 3.8 or (c) the Borrower is required to
pay any additional amount to any Lender or any Governmental Authority on account
of any Lender pursuant to Section 3.10, the Borrower may, at its sole expense
and effort (including with respect to the processing and recordation fee
referred to in Section 10.3(b)), upon notice to such Lender and the
Administrative Agent, require such Lender to transfer and assign, without
recourse (in accordance with and subject to the restrictions contained in
Section 10.3(b)), all of its interests, rights and obligations under this
Agreement to an Eligible Assignee that shall assume such assigned obligations
(which assignee may be another Lender, if a Lender accepts such assignment),
PROVIDED that (A) such assignment shall not conflict with any law, rule or
regulation or order of any court or other Governmental Authority having
jurisdiction, (B) no Event of Default shall have occurred and be continuing and
(C) the Borrower or such assignee shall have paid to the affected Lender in
immediately available funds an amount equal to the sum of 100% of the principal
of and interest accrued to the date of such payment on the outstanding Loans of
such Lender, respectively, plus all Fees and other amounts accrued for the
account of such Lender hereunder (including any amounts under Section 3.6, 3.10
and Section 3.11); PROVIDED FURTHER that if prior to any such assignment the
circumstances or event that resulted in such Lender's request or notice under
Section 3.6 or 3.8 or demand for additional amounts under Section 3.10, as the
case may be, shall cease to exist or become inapplicable for any reason or if
such Lender shall waive its rights in respect of such circumstances or event
under Section 3.6, 3.8 or 3.10, as the case may be, then such Lender shall not
thereafter be required to make such assignment hereunder.
SECTION 4
CONDITIONS
4.1 CLOSING CONDITIONS. The obligations of the Lenders to make the
initial Loans under this Agreement shall be subject to satisfaction of the
following conditions (in form and substance acceptable to the Lenders):
(a) EXECUTED CREDIT DOCUMENTS. The Administrative Agent shall
have received duly executed copies of (i) this Agreement; (ii) the Notes;
(iii) the Collateral Documents and (iv) all other Credit Documents, each in
form and substance acceptable to the Lenders in their sole discretion.
(b) CORPORATE DOCUMENTS. The Administrative Agent shall have
received the following:
(i) CHARTER DOCUMENTS. Copies of the articles or
certificates of incorporation or other charter documents of each
Credit Party certified to be
53
true and complete as of a recent date by the appropriate Governmental
Authority of the state or other jurisdiction of its incorporation and
certified by a secretary or assistant secretary of such Credit Party
to be true and correct as of the Closing Date.
(ii) BYLAWS. A copy of the bylaws of each Credit Party
certified by a secretary or assistant secretary of such Credit Party
to be true and correct as of the Closing Date.
(iii) RESOLUTIONS. Copies of resolutions of the Board of
Directors of each Credit Party approving and adopting the Credit
Documents to which it is a party, the transactions contemplated
therein and authorizing the execution, delivery and performance
thereof, certified by a secretary or assistant secretary of such
Credit Party to be true and correct and in full force and effect as of
the Closing Date.
(iv) GOOD STANDING. Copies of (A) certificates of good
standing, existence or the equivalent with respect to each Credit
Party certified as of a recent date by the appropriate Governmental
Authority of its state or other jurisdiction of incorporation and each
other jurisdiction in which the failure to be qualified to do business
and in good standing could reasonably be expected to have a Material
Adverse Effect and (B) to the extent available, a certificate
indicating payment of all corporate franchise taxes certified as of a
recent date by the appropriate governmental taxing authority of its
state or other jurisdiction of incorporation and each other
jurisdiction referred to in clause (A) above.
(v) INCUMBENCY. A certificate of each Credit Party as to
the incumbency and specimen signature of each officer executing any
Credit Document or any other document delivered in connection herewith
on behalf of such Credit Party, certified by a secretary or assistant
secretary of such Credit Party to be true and correct as of the
Closing Date.
(c) FINANCIAL STATEMENTS. The Administrative Agent and the
Lenders shall have received and, in each case, be satisfied with (i) (A)
the consolidated and consolidating financial statements of the Borrower and
its Subsidiaries, including balance sheets as of, and income statements and
cash flow statements for the fiscal years ended on, August 31, of each of
1995, 1996 and 1997, audited by independent public accountants of
recognized national standing and prepared in conformity with GAAP and (B)
the consolidated and consolidating financial statements of PRI and its
Subsidiaries, including balance sheets as of, and income statements and
cash flow statements for the fiscal years ended on December 31, 1995, 1996
and 1997, audited by independent public accountants of recognized national
standing and prepared in conformity with GAAP, (ii) interim unaudited
monthly financial statements of the Borrower and its Subsidiaries and PRI
for the period since the last audited financial statements referred to in
clause (i) above through the last month prior to the Closing Date for which
financial information is available, (iii) monthly working capital detail
53
for the twelve (12) months prior to the Closing Date and first projected
year after the Closing Date with respect to the Borrower and its
Subsidiaries and PRI, (iv) an estimated pro forma consolidated balance
sheet of the Borrower and its Subsidiaries as of December 31, 1997 giving
effect to the transactions contemplated by the Acquisition Agreement and
reflecting estimated purchase price accounting adjustments, (v) projections
of the Borrower and its Subsidiaries for each 12-month period through the
12-month period ending December 31, 2003 and (vi) such other information
relating to the Borrower and its Subsidiaries or the Acquisition as the
Administrative Agent may reasonably require in connection with the
structuring and syndication of credit facilities of the type described
herein.
(d) OPINIONS OF COUNSEL. The Administrative Agent shall have
received, in each case dated as of the Closing Date:
(i) a legal opinion of Xxxxxx, Xxxxx & Xxxxxxx, special New
York counsel for the Credit Parties, in substantially the form of
EXHIBIT M-1;
(ii) a legal opinion of special local counsel for each
Credit Party not incorporated in the State of New York, in
substantially the form of EXHIBIT M-3;
(iii) a legal opinion of special local counsel for the Credit
Parties for each State in which any Collateral is located, in
substantially the form of EXHIBIT M-3; and
(vi) copies of the opinions to be delivered by counsel to
any party to the Acquisition Agreement, accompanied in each case by a
letter from such counsel stating that the Administrative Agent and the
Lenders are entitled to rely on such opinions as if they were
addressed to the Administrative Agent.
(e) ENVIRONMENTAL REPORTS. The Administrative Agent shall have
received in form and substance satisfactory to it environmental assessment
reports and related documents of a recent date with respect to all real
property owned or leased by any Consolidated Party.
(f) PERSONAL PROPERTY COLLATERAL. The Administrative Agent shall
have received:
(i) searches of Uniform Commercial Code filings in the
jurisdiction of the chief executive office of each Credit Party and
each jurisdiction where any Collateral is located or where a filing
would need to be made in order to perfect the Administrative Agent's
security interest in the Collateral, copies of the financing
statements on file in such jurisdictions and evidence that no Liens
exist other than Permitted Liens;
(ii) duly executed financing statements (Form UCC-1) for
each appropriate jurisdiction as is necessary, in the Administrative
Agent's sole
54
discretion, to perfect the Administrative Agent's security interest in
the Collateral;
(iii) appropriate duly executed termination statements (Form
UCC-3) signed by all Persons disclosed as secured parties in the
jurisdictions referred to in clause (i) above in form for filing under
the Uniform Commercial Code of such jurisdictions, except that no
termination statement shall be required as to any Permitted Liens;
(iv) searches of ownership of Intellectual Property in the
appropriate governmental offices;
(v) all stock certificates evidencing the Capital Stock
pledged to the Administrative Agent pursuant to the Security
Agreement, together with duly executed in blank undated stock powers
attached thereto (unless, with respect to the pledged Capital Stock of
any Foreign Subsidiary, such stock powers are deemed unnecessary by
the Administrative Agent in its reasonable discretion under the law of
the jurisdiction of incorporation of such Person);
(vi) such patent, trademark and copyright filings as
requested by the Administrative Agent in order to perfect the
Administrative Agent's security interest in the Collateral;
(vii) all instruments and chattel paper in the possession of
any of the Credit Parties, together with such allonges or assignments
as may be necessary or appropriate to perfect the Administrative
Agent's security interest in the Collateral;
(viii) a Depository Bank Agreement from NationsBank and each
other bank or depository institution where any Credit Party maintains
a deposit account, except with respect to the Xxxxx Cash Accounts;
(ix) in the case of each lease of material personal property
under which any Credit Party is lessee, such estoppel letters,
consents and waivers from the lessors of such personal property as may
be required by the Administrative Agent, which instruments shall be in
form and substance satisfactory to the Administrative Agent; and
(x) duly executed consents as are necessary, in the
Administrative Agent's sole discretion, to perfect the security
interest of the Secured Parties in the Collateral.
(g) PRIORITY OF LIENS. The Administrative Agent, on behalf of the
Secured Parties, shall hold a perfected, first priority Lien, subject to no
other Liens other than Permitted Liens, on all Collateral.
55
(h) AVAILABILITY. After giving effect to the initial Loans made
and Letters of Credit issued hereunder on the Closing Date, the Revolving
Committed Amount, LESS the aggregate principal amount of the Revolving
Credit Facility Obligations shall be equal to at least $3,000,000.
(i) EVIDENCE OF INSURANCE. The Administrative Agent shall have
received (i) a report from the Borrower's independent insurance consultant,
in form and substance satisfactory to the Administrative Agent, to the
effect that insurance satisfying the requirements set forth in the Credit
Documents is in effect and (ii) satisfactory evidence of such insurance and
the endorsement thereof in accordance with the Credit Documents, including
a "standard" or "New York" lender's loss payable endorsement in the name of
the Administrative Agent on Accord Form 27.
(j) CORPORATE STRUCTURE. After giving effect to the transactions
contemplated by the Acquisition Agreement, the ownership, capital,
corporate, tax, organizational and legal structure (including articles of
incorporation and bylaws, shareholders agreements and management) of the
Consolidated Parties shall be satisfactory to the Lenders.
(k) REFINANCE OF SPONSOR REVOLVING LOAN. The Administrative Agent
shall have received evidence satisfactory to the Administrative Agent, in
its sole discretion, of the termination and payment in full of all amounts
due under or in respect of the Sponsor Revolving Loan.
(l) CONSENTS AND APPROVALS. The Sponsor Group, the Borrower, the
Parent, the other Credit Parties and the Sellers shall have obtained all
governmental, shareholder and third party consents and approvals necessary,
including, without limitation, Xxxxxxx with respect to the Xxxxxxx Bridge
Agreement or, in the opinion of the Administrative Agent, desirable in
connection with the transactions contemplated by the Acquisition Agreement,
the execution, delivery and performance of this Agreement and the other
Credit Documents (including the exercise of remedies under the Collateral
Documents) the other related financings and transactions contemplated
hereby and the continuing operations of the Borrower and its Subsidiaries
following the Closing Date, and all applicable waiting periods (including
any applicable waiting period under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976) shall have expired, in each case, without any
action being taken by any Governmental Authority that could restrain,
prevent or impose any material adverse condition on the Consolidated
Parties taken as a whole or such transactions or that could seek or
threaten any of the foregoing, and no law or regulation shall be applicable
which in the judgment of the Administrative Agent could have such effect.
(m) MATERIAL ADVERSE EFFECT. From August 31, 1997 to the Closing
Date, nothing shall have occurred (and neither the Lenders nor the
Administrative Agent shall have become aware of any facts or circumstances
not previously known) which has, or could reasonably be expected to have, a
Material Adverse Effect.
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(n) LITIGATION. There shall not exist any order, decree,
judgment, ruling or injunction or any pending or threatened action, suit,
investigation or proceeding that purports to affect the transactions
contemplated by the Acquisition Agreement, the Credit Facilities or the
other related financings or that could reasonably be expected to have a
Material Adverse Effect.
(o) OTHER INDEBTEDNESS. After consummation of the transactions
contemplated by the Acquisition Agreement on the Closing Date, the
Consolidated Parties shall have no material liabilities (actual or
contingent) or Preferred Stock, except (i) as disclosed in the most recent
interim balance sheet referred to in Section 5.1(a), (ii) for items
disclosed in SCHEDULE 5.1, (iii) for accounts payable incurred in the
ordinary course of business consistent with past practice since the date of
the most recent interim balance sheet referred to in Section 5.1(a) and not
in violation of the Acquisition Agreement, (iv) Indebtedness under the
Credit Documents and (v) Indebtedness set forth on SCHEDULE 7.1.
(p) ACQUISITION AGREEMENT. The Parent and the Borrower shall have
executed and delivered the Acquisition Agreement on terms satisfactory to
the Administrative Agent, in its sole discretion; there shall not have been
any modification, amendment, supplement or waiver to the Acquisition
Agreement without the prior written consent of the Administrative Agent, in
its sole discretion, including any modification, amendment, supplement or
waiver relating to the amount or type of consideration to be paid in
connection with the transactions contemplated by the Acquisition Agreement
or the contents of any disclosure schedules and exhibits; the conditions
set forth in the Acquisition Agreement to the obligations of the Parent
shall have been satisfied (without any waiver or amendment thereof); the
transactions contemplated by the Acquisition Agreement shall be consummated
simultaneously with the initial borrowing under this Agreement; the
aggregate consideration paid by the Parent and the Borrower on the Closing
Date (including purchase price, refinancing of existing Indebtedness) shall
not exceed $40,000,000; the fees and expenses related to such transactions
shall not exceed $1,000,000; and the Administrative Agent shall have
received a final Acquisition Agreement, together with all exhibits and
schedules thereto, certified by an officer of the Borrower.
(q) CHANGE IN MARKET. There shall not exist any material
disruption of, or a material adverse change in, the market for syndicated
bank credit facilities or financial, banking or capital market conditions.
(r) FEES AND EXPENSES. The Credit Parties and the Sponsor Group
shall have paid all fees and expenses owed by them to the Lenders, the
Administrative Agent, the Documentation Agent and NMS, including payment to
the Administrative Agent, the Documentation Agent and NMS of the fees and
reimbursement of the expenses as set forth in the Agent's Fee Letter.
(s) OFFICER'S CERTIFICATES. The Administrative Agent shall have
received a certificate or certificates executed by an executive officer of
the Borrower, dated as of the Closing Date, certifying that (i) each
Consolidated Party is in compliance with all
57
existing financial obligations, (ii) the conditions set forth in
subsections 4.1 (g), (l), (m), (n), (o) and (q) shall have been satisfied,
and (iii) immediately after giving effect to the execution and delivery of
this Agreement and, the other Credit Documents and the consummation of all
the transactions contemplated therein to occur on the Closing Date,
(A) each of the Credit Parties is Solvent, (B) no Default or Event of
Default exists, (C) all representations and warranties contained herein and
in the other Credit Documents are true and correct in all material respects
and (D) the Credit Parties are in compliance on a Pro Forma Basis with each
of the financial covenants set forth in Section 7.19 as of the last day of
the most recent fiscal quarter of the Borrower (as if the opening levels
applicable to such covenants were in effect on such day).
(t) OTHER. The Lenders shall have received such other documents,
instruments, agreements or information as reasonably requested by any
Lender, including information regarding litigation, investigations and
other proceedings, compliance with applicable laws, regulations and consent
orders, tax matters, accounting matters, labor agreements, pension
liabilities (actual or contingent) and other employee benefits, and other
employee-related matters, insurance coverage, real estate leases, material
contracts and relationships, debt agreements, transactions with Affiliates
and former Affiliates, property ownership, Capital Leases, trademarks,
other proprietary rights and related licenses, capital stock, options and
warrants, and contingent liabilities of the Consolidated Parties. The
Administrative Agent shall have reviewed and be satisfied with the results
of any reports or other information from third parties performing due
diligence on behalf of the Sponsor Group.
4.2 CONDITIONS TO ALL EXTENSIONS OF CREDIT. The obligations of each
Lender to make any Loan (including the initial Loans), Convert any existing Loan
into a Loan of another Type or Extend any existing Loan into a subsequent
Interest Period and of the Issuing Lender to issue or extend any Letter of
Credit are subject to satisfaction on the date such Loan is made, Converted or
Extended or the date such Letter of Credit is issued or extended, as applicable,
to satisfaction of the following conditions:
(a) The Borrower shall have delivered (i) in the case of any
Revolving Loan, an appropriate Notice of Borrowing or Notice of
Extension/Conversion or (ii) in the case of any Letter of Credit, the
Issuing Lender shall have received an appropriate request for issuance or
extension in accordance with the provisions of Section 2.2(b);
(b) The representations and warranties set forth in Section 5 and
in each of the other Credit Documents shall be true and correct in all
material respects as of such date (except for those which expressly relate
to an earlier date, in which case such representations and warranties shall
be true and correct in all material respects on and as of such earlier
date);
(c) There shall not have been commenced against any Credit Party
an involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or any case, proceeding or other
action for the appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or
58
similar official) of such Person or for any substantial part of its
Property or for the winding up or liquidation of its affairs, which
involuntary case or other case, proceeding or other action shall remain
undismissed, undischarged or unbonded;
(d) No Default or Event of Default shall exist and be continuing
either prior to the making, Conversion or Extension of such Loan or the
issuance or extension of such Letter of Credit or after giving effect
thereto;
(e) No material adverse change shall have occurred or become known
since December 31, 1997 in the condition (financial or otherwise),
business, assets, liabilities (actual or contingent), historical or
projected revenues or cash flows, operations, material relationships,
management or prospects of the Consolidated Parties taken as a whole; and
(f) Immediately after giving effect to the making, Conversion or
Extension of such Loan (and the application of the proceeds thereof) or to
the issuance or extension of such Letter of Credit, as applicable, the
aggregate principal amount of outstanding Revolving Loans and the aggregate
amount of outstanding LOC Obligations shall not exceed any of the
limitations applicable thereto set forth in Section 2.
The delivery of each Notice of Borrowing, each Notice of Extension/Conversion
and each request for the issuance or extension of a Letter of Credit pursuant to
Section 2.2(b) shall constitute a representation and warranty by the Borrower of
the correctness of the matters specified in subsections (b), (c), (d), (e) and
(f) above.
SECTION 5
REPRESENTATIONS AND WARRANTIES
The Parent and the Borrower hereby represent, jointly and severally, to the
Administrative Agent and each Lender that:
5.1 FINANCIAL CONDITION. (a) The audited consolidated and consolidating
balance sheets of the Borrower and its Subsidiaries as of August 31, 1995,
August 31, 1996 and August 31, 1997, and the audited consolidated
and consolidating statements of earnings and statements of cash flows of the
Borrower and its Subsidiaries for the years ended August 31, 1995, August 31,
1996 and August 31, 1997 have heretofore been furnished to each Lender. Such
financial statements (including the notes thereto) (i) have been audited by
Ernst & Young, (ii) have been prepared in accordance with GAAP consistently
applied throughout the periods covered thereby and (iii) present fairly (on the
basis disclosed in the footnotes to such financial statements) the consolidated
and consolidating financial condition, results of operations and cash flows of
the Borrower and its Subsidiaries as of such dates and for such periods. The
unaudited interim balance sheets of the Borrower and its Subsidiaries as at the
end of, and the related unaudited interim statements of earnings and of cash
flows for, each fiscal month and quarterly period ended after December 31, 1997
and prior to the Closing Date for which financial information is available have
heretofore been furnished to each
59
Lender. Such interim financial statements for each such period (i) have been
prepared in accordance with GAAP consistently applied throughout the periods
covered thereby, except for the absence of footnotes, and (ii) present fairly
the consolidated and consolidating financial condition, results of operations
and cash flows of the Borrower and its Subsidiaries as of such dates and for
such periods, except for recurring annual audit adjustments. During the period
from December 31, 1997 to and including the Closing Date, there has been no
sale, transfer or other disposition by any Consolidated Party of any material
part of the business or property of the Consolidated Parties, taken as a whole,
and no purchase or other acquisition by any of them of any business or property
(including any capital stock of any other Person) material in relation to the
consolidated financial condition of the Consolidated Parties, taken as a whole,
in each case, which is not reflected in the foregoing financial statements or in
the notes thereto. Except as disclosed in SCHEDULE 5.1, the balance sheets and
the notes thereto included in the foregoing financial statements disclose all
material liabilities, actual or contingent, of the Borrower and its Subsidiaries
as of the dates thereof.
(b) As of the Closing Date, the Consolidated Parties do not have any
material liabilities, actual or contingent, or Preferred Stock except (i) as
disclosed in the most recent interim balance sheet referred to in subsection (a)
above, (ii) for items disclosed in SCHEDULE 5.1, (iii) for accounts payable
incurred in the ordinary course of business consistent with past practice since
the date of the most recent interim balance sheet referred to in subsection (a)
above and not in violation of the Acquisition Agreement, (iv) Indebtedness under
the Credit Documents and (v) Indebtedness set forth on Schedule 7.1.
(c) The consolidated balance sheet of the Borrower and its Subsidiaries as
of the end of the most recent fiscal month prior to the Closing Date for which
financial information is available, prepared on a pro forma basis giving effect
to the consummation of the transactions contemplated by the Acquisition
Agreement, has heretofore been furnished to each Lender. Such pro forma balance
sheet has been prepared in good faith by the Borrower, is based on the best
information available to the Borrower as of the date of delivery thereof,
accurately reflects all material adjustments required to be made to give effect
to the transactions contemplated by the Acquisition Agreement, including
estimated purchase price accounting adjustments, and presents fairly on a pro
forma basis the estimated consolidated financial position of the Borrower and
its Subsidiaries as of December 31, 1997, assuming that the transactions
contemplated by the Acquisition Agreement had actually occurred on that date.
None of the Consolidated Parties has any reason to believe that such pro forma
balance sheet is misleading in any material respect in light of the
circumstances existing at the time of the preparation thereof.
(d) The financial statements delivered to the Lenders pursuant to Section
6.1(a) and (b), if any, (i) have been prepared in accordance with GAAP (except
as may otherwise be permitted under Section 6.1(a) and (b)) and (ii) present
fairly (on the basis disclosed in the footnotes to such financial statements, if
any) the consolidated and consolidating financial condition, results of
operations and cash flows of the Borrower and its Consolidated Subsidiaries as
of the respective dates thereof and for the respective periods covered thereby.
5.2 CERTAIN PAYMENTS. Except for dividends paid after the Closing Date as
permitted under this Agreement, no dividends or other distributions have been
declared, paid
60
or made upon the Capital Stock of any Consolidated Party nor has any of the
Capital Stock of any Consolidated Party been redeemed, retired, purchased or
otherwise acquired for value.
5.3 ORGANIZATION AND GOOD STANDING. Each of the Consolidated Parties (a)
is duly organized, validly existing and is in good standing under the laws of
the jurisdiction of its incorporation or organization, (b) has the corporate or
other necessary power and authority, and the legal right, to own and operate its
Property, to lease the Property it operates as lessee and to conduct the
business in which it is currently engaged and (c) is duly qualified as a foreign
entity and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of Property or the conduct of its business
requires such qualification, other than in such jurisdictions where the failure
to be so qualified and in good standing would not reasonably be expected to have
a Material Adverse Effect.
5.4 POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. Each of the Credit
Parties has the corporate or other necessary power and authority, and the legal
right, to execute, deliver and perform the Operative Documents to which it is a
party and, in the case of the Borrower, to obtain extensions of credit
hereunder, and has taken all necessary corporate action to authorize the
borrowings and other extensions of credit on the terms and conditions of this
Agreement and to authorize the execution, delivery and performance of the
Operative Documents to which it is a party. No consent or authorization of,
filing with, notice to or other similar act by or in respect of, any
Governmental Authority or any other Person is required to be obtained or made by
or on behalf of any Credit Party in connection with the borrowings or other
extensions of credit hereunder or with the execution, delivery, performance,
validity or enforceability of the Operative Documents to which such Credit Party
is a party, except for (i) consents, authorizations, notices and filings
disclosed in SCHEDULE 5.4, all of which have been obtained or made, and (ii)
filings to perfect the Liens created by the Collateral Documents. This
Agreement has been, and each other Operative Document to which any Credit Party
is a party will be, duly executed and delivered on behalf of such Credit Party.
This Agreement constitutes, and each other Operative Document to which any
Credit Party or the Sellers is a party when executed and delivered will
constitute, a legal, valid and binding obligation of such Credit Party and, to
the knowledge of the Credit Parties, of the Sellers, enforceable against such
Person in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).
5.5 NO CONFLICTS. Neither the execution and delivery by any Credit Party
of the Operative Documents to which it is a party, nor the consummation of the
transactions contemplated therein, nor performance of and compliance with the
terms and provisions thereof by such Credit Party, nor the exercise of remedies
by the Secured Parties under the Credit Documents, will (a) violate or conflict
with any provision of its articles or certificate of incorporation or bylaws or
other organizational or governing documents of such Person, (b) violate,
contravene or conflict with any Requirement of Law (including Regulation U or
Regulation X) applicable to it or its Properties, (c) violate, contravene or
conflict with contractual provisions of, cause an event of default under, or
give rise to material increased,
61
additional, accelerated or guaranteed rights of any Person under, any indenture,
loan agreement, mortgage, deed of trust, contract or other agreement or
instrument to which it is a party or by which it may be bound, or (d) result in
or require the creation of any Lien (other than the Lien of the Collateral
Documents) upon or with respect to its Properties.
5.6 NO DEFAULT. As of the Closing Date, no Consolidated Party is in
default in any respect under (a) any loan agreement, indenture, mortgage,
security agreement or other agreement relating to Indebtedness or any other
contract, lease, agreement or obligation to which it is a party or by which any
of its Properties is bound which default could reasonably be expected to have a
Material Adverse Effect or (b) the Xxxxxxx Bridge Agreement. As of the Closing
Date, no Default or Event of Default has occurred or exists.
5.7 ASSETS. As of the Closing Date, each Consolidated Party is the owner
of, and has good and marketable title to, all of its respective assets and none
of such assets is subject to any Lien, other than Permitted Liens, which could
reasonably be expected to have a Material Adverse Effect. As of the Closing
Date, after giving effect to consummation of the transactions contemplated by
the Acquisition Agreement, the Sellers and its Affiliates and their relatives
(other than the Borrower and its Subsidiaries) do not own any Properties used,
or which have been used in the year prior to the Closing Date, in the business
of the Borrower and its Subsidiaries.
5.8 LITIGATION. Except as disclosed in SCHEDULE 5.8, there are no
actions, suits, investigations or legal, equitable, arbitration or
administrative proceedings pending for which service of process or other written
notice has been received or, to the knowledge of any Credit Party, threatened
against or affecting any Consolidated Party which could reasonably be expected
to have a Material Adverse Effect or which are pending or, to the knowledge of
any Credit Party, threatened as of the Closing Date.
5.9 TAXES. Each Consolidated Party has filed, or caused to be filed, all
tax returns (including federal, state, local and foreign tax returns) required
to be filed and paid (a) all amounts of taxes shown thereon to be due (including
interest and penalties) and (b) all other taxes, fees, assessments and other
governmental charges (including mortgage recording taxes, documentary stamp
taxes and intangibles taxes) owing by it, except for such taxes (i) which are
not yet delinquent, (ii) that are being contested in good faith and by proper
proceedings diligently pursued, and against which adequate reserves are being
maintained in accordance with GAAP or (iii) the failure of which to pay would
not be reasonably expected to have a Material Adverse Effect. No Credit Party
knows as of the Closing Date of any pending investigation of such party by any
taxing authority or proposed tax assessments against it or any other
Consolidated Party.
5.10 COMPLIANCE WITH LAW. Each Consolidated Party is in compliance with
all Requirements of Law (including Environmental Laws) applicable to it or to
its Properties, except for any such failure to comply which could not reasonably
be expected to have a Material Adverse Effect. No Requirement of Law could
reasonably be expected to cause a Material Adverse Effect. To the knowledge of
the Credit Parties, as of the Closing Date, none of the Consolidated Parties or
any of their respective material Properties or assets is subject to or in
default with respect to any judgment, writ, injunction, decree or order of any
62
court or other Governmental Authority. Except as disclosed in SCHEDULE 5.10,
none of the Consolidated Parties has received any written communication prior to
the Closing Date from any Governmental Authority that alleges that any of the
Consolidated Parties is not in compliance in any material respect with any
Requirement of Law, except for allegations that have been satisfactorily
resolved and are no longer outstanding.
5.11 ERISA. Except as disclosed in SCHEDULE 5.11 and except, with respect
to any Plan or Multiemployer plan sponsored or contributed to by any ERISA
Affiliate of the Sponsor, other than any Consolidated Party, to the extent any
of the following would not, either individually or in the aggregate, result in a
Material Adverse Effect:
(a) During the five-year period prior to the date on which this
representation is made or deemed made: (i) no ERISA Event has occurred,
and, to the knowledge of the Credit Parties, no event or condition has
occurred or exists as a result of which any ERISA Event could reasonably be
expected to occur, with respect to any Plan; (ii) no "accumulated funding
deficiency," as such term is defined in Section 302 of ERISA and Section
412 of the Code, whether or not waived, has occurred with respect to any
Plan; (iii) each Plan and, to the knowledge of the Credit Parties, each
Multiemployer Plan has been maintained, operated, and funded in compliance
with its own terms and in material compliance with the provisions of ERISA,
the Code, and any other applicable federal or state laws; and (iv) no lien
in favor of the PBGC or a Plan has arisen or is reasonably likely to arise
on account of any Plan.
(b) The actuarial present value of all "benefit liabilities" (as
defined in Section 4001(a)(16) of ERISA), whether or not vested, under each
Plan, as of the last annual valuation date prior to the date on which this
representation is made or deemed made (determined, in each case, in
accordance with Financial Accounting Standards Board Statement 87,
utilizing the actuarial assumptions used in such Plan's most recent
actuarial valuation report), did not exceed as of such valuation date the
fair market value of the assets of such Plan.
(c) Neither any Consolidated Party nor any ERISA Affiliate has
incurred, or, to the knowledge of the Credit Parties, could be reasonably
expected to incur, any withdrawal liability under ERISA to any
Multiemployer Plan or Multiple Employer Plan. Neither any Consolidated
Party nor any ERISA Affiliate would become subject to any withdrawal
liability under ERISA if any Consolidated Party or any ERISA Affiliate were
to withdraw completely from all Multiemployer Plans and Multiple Employer
Plans as of the valuation date most closely preceding the date on which
this representation is made or deemed made. Neither any Consolidated Party
nor any ERISA Affiliate has received any notification that any
Multiemployer Plan is in reorganization (within the meaning of Section 4241
of ERISA), is insolvent (within the meaning of Section 4245 of ERISA), or
has been terminated (within the meaning of Title IV of ERISA), and no
Multiemployer Plan is, to the knowledge of the Credit Parties, reasonably
expected to be in reorganization, insolvent, or terminated.
63
(d) No prohibited transaction (within the meaning of Section 406
of ERISA or Section 4975 of the Code) or breach of fiduciary responsibility
has occurred with respect to a Plan which has subjected or may subject any
Consolidated Party or any ERISA Affiliate to any liability under Section
406, 409, 502(i) or 502(1) of ERISA or Section 4975 of the Code, or under
any agreement or other instrument pursuant to which any Consolidated Party
or any ERISA Affiliate has agreed or is required to indemnify any Person
against any such liability.
(e) Neither any Consolidated Party nor any ERISA Affiliate has any
material liability with respect to "expected post-retirement benefit
obligations" within the meaning of the Financial Accounting Standards Board
Statement 106. Each Plan which is a welfare plan (as defined in Section
3(1) of ERISA) to which Sections 601 through 609 of ERISA and Section 4980B
of the Code apply has been administered in compliance in all material
respects of such sections.
(f) Neither the execution and delivery of this Agreement nor the
consummation of the financing transactions contemplated hereunder will
involve any transaction which is subject to the prohibitions of Sections
404, 406 or 407 of ERISA or in connection with which a tax could be imposed
pursuant to Section 4975 of the Code. The representation by the Credit
Parties in the preceding sentence is made in reliance upon and subject to
the accuracy of the Lenders' representation in Section 10.15 with respect
to their source of funds and is subject, in the event that the source of
the funds used by the Lenders in connection with this transaction is an
insurance company's general asset account, to the application of Prohibited
Transaction Class Exemption 95-60, 60 Fed. Reg. 35,925 (1995), compliance
with the regulations issued under Section 401(c)(1)(A) of ERISA, or the
issuance of any other prohibited transaction exemption or similar relief,
to the effect that assets in an insurance company's general asset account
do not constitute assets of an "employee benefit plan" within the meaning
of Section 3(3) of ERISA of a "plan" within the meaning of Section
4975(e)(1) of the Code.
5.12 SUBSIDIARIES. SCHEDULE 5.12 sets forth a complete and accurate list
as of the Closing Date of all Subsidiaries of the Borrower. SCHEDULE 5.12 sets
forth as of the Closing Date the jurisdiction of incorporation of each such
Subsidiary, the number of authorized shares of each class of Capital Stock of
each such Subsidiary, the number of outstanding shares of each class of Capital
Stock, the number and percentage of outstanding shares of each class of Capital
Stock of each such Subsidiary owned (directly or indirectly) by any Person; and
the number and effect, if exercised, of all outstanding options, warrants,
rights of conversion or purchase and all other similar rights with respect to
Capital Stock of each such Subsidiary. All the outstanding Capital Stock of
each Subsidiary of the Borrower is validly issued, fully paid and non-assessable
and, as of the Closing Date, is owned by the Borrower, directly or indirectly,
free and clear of all Liens (other than those arising under the Collateral
Documents). Other than as set forth in SCHEDULE 5.12, as of the Closing Date no
such Subsidiary has outstanding any securities convertible into or exchangeable
for its Capital Stock nor does any such Person have outstanding any rights to
subscribe for or to purchase or any options for the purchase of, or any
agreements providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating
64
to, its Capital Stock. The Parent has no Subsidiaries, other than the Borrower
and its Subsidiaries.
5.13 GOVERNMENTAL REGULATIONS, ETC. (a) No part of the Letters of Credit
or proceeds of the Loans will be used, directly or indirectly, for the purpose
of purchasing or carrying any "margin stock" within the meaning of Regulation G
or Regulation U, or for the purpose of purchasing or carrying or trading in any
securities. If requested by any Lender or the Administrative Agent, the
Borrower will furnish to the Administrative Agent and each Lender a statement to
the foregoing effect in conformity with the requirements of FR Form U-1 referred
to in Regulation U. No indebtedness being reduced or retired out of the
proceeds of the Loans was or will be incurred for the purpose of purchasing or
carrying any margin stock within the meaning of Regulation U or any "margin
security" within the meaning of Regulation T. "Margin stock" within the meaning
of Regulation U does not constitute more than 25% of the value of the
consolidated assets of the Consolidated Parties. None of the transactions
contemplated by this Agreement (including the direct or indirect use of the
proceeds of the Loans) will violate or result in a violation of the Securities
Act of 1933, as amended, the Exchange Act or regulations issued pursuant
thereto, or Regulation G, T, U or X.
(b) No Consolidated Party is subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act or the Investment
Company Act of 1940, each as amended. In addition, no Consolidated Party is (i)
an "investment company" registered or required to be registered under the
Investment Company Act of 1940, as amended, (ii) controlled by such a company,
or (iii) a "holding company", a "subsidiary company" of a "holding company", or
an "affiliate" of a "holding company" or of a "subsidiary" of a "holding
company", within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
(c) No director, executive officer or principal holder of Capital Stock of
any Consolidated Party is a director, executive officer or principal shareholder
of any Lender. For the purposes hereof the terms "director", "executive
officer" and "principal shareholder" (when used with reference to any Lender)
have the respective meanings assigned thereto in Regulation O issued by the
Board of Governors of the Federal Reserve System.
(d) Each Consolidated Party has obtained and holds in full force and
effect all franchises, licenses, permits, certificates, authorizations,
qualifications, accreditations, easements, rights of way and other rights,
consents and approvals which are necessary for the ownership of its respective
Property and to the conduct of its respective businesses as presently conducted.
(e) Each Consolidated Party is current with all material reports and
documents, if any, required to be filed with any state or federal securities
commission or similar agency and is in full compliance in all material respects
with all applicable rules and regulations of such commissions.
5.14 PURPOSE OF LOANS AND LETTERS OF CREDIT. The proceeds of the Revolving
Loans made on the Closing Date will be used solely (i) to fund a portion of the
consideration paid
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pursuant to the Acquisition Agreement, (ii) to refinance the Sponsor Revolving
Loan, not in excess of $5,000,000, and (iii) to pay fees and expenses incurred
in connection with the transactions contemplated by the Acquisition Agreement.
The proceeds of the Revolving Loans made after the Closing Date will be used
solely to provide for the working capital requirements of the Borrower and its
Subsidiaries and for the general corporate purposes of the Borrower and its
Subsidiaries, including Permitted Acquisitions. The Letters of Credit shall be
used only for or in connection with appeal bonds, reimbursement obligations
arising in connection with surety and reclamation bonds, reinsurance, domestic
or international trade transactions and other obligations relating to
transactions entered into by the Borrower and its Subsidiaries in the ordinary
course of business.
5.15 ENVIRONMENTAL MATTERS. Except as disclosed in SCHEDULE 5.15:
(a) Each of the facilities and properties currently or previously
owned, leased or operated by the Consolidated Parties (the "COMPANY
PROPERTIES") and all operations at the Company Properties are in material
compliance with all applicable Environmental Laws, and there is no material
violation of any Environmental Law with respect to the Company Properties
or the businesses operated by the Consolidated Parties (the "BUSINESSES"),
and there are no conditions or circumstances relating to the Businesses or
Company Properties or any former facilities, properties or businesses of
the Consolidated Parties that is reasonably likely to give rise to
liability of any Consolidated Party under any applicable Environmental Laws
or under any agreement or other instrument pursuant to which any
Consolidated Party has agreed or is required to indemnify any Person
against any such liability.
(b) None of the Company Properties contains, or, to the Knowledge
of the Borrower, has previously contained, any Materials of Environmental
Concern at, on or under the Company Properties in amounts or concentrations
that constitute or constituted a violation of, or is reasonably likely to
give rise to liability of any Consolidated Party under, Environmental Laws
or under any agreement or other instrument pursuant to which any
Consolidated Party has agreed or is required to indemnify any Person
against any such liability.
(c) No Consolidated Party has received prior to the Closing Date
any written or verbal notice of, or inquiry from any Governmental Authority
regarding, any violation, alleged violation, non-compliance, liability or
potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Company Properties or the
Businesses, nor does any Consolidated Party have knowledge or reason to
believe as of the Closing Date that any such notice will be received or is
being threatened.
(d) Materials of Environmental Concern have not been transported
or disposed of from the Company Properties, or generated, treated, stored
or disposed of at, on or under any of the Company Properties or any other
location, in each case by or on behalf of any Consolidated Party in
violation of, or in a manner that is reasonably likely to give rise to
liability of any Consolidated Party under, any applicable Environmental Law
or under any agreement or other instrument pursuant
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to which any Consolidated Party has agreed or is required to indemnify any
Person against any such liability.
(e) No judicial proceeding or governmental or administrative
action is pending or, to the knowledge of any Credit Party, threatened,
under any Environmental Law to which any Consolidated Party is or will be
named as a party, nor are there any consent decrees, consent orders,
administrative orders, other decrees or orders or other administrative or
judicial requirements outstanding under any Environmental Law with respect
to the Consolidated Parties, the Company Properties or the Businesses.
(f) There has been no release or threat of release of Materials of
Environmental Concern at or from the Company Properties, or arising from or
related to the operations (including disposal) of any Consolidated Party in
connection with the Company Properties or otherwise in connection with the
Businesses, in violation of or in amounts or in a manner that is reasonably
likely to give rise to liability under Environmental Laws or under any
agreement or other instrument pursuant to which any Consolidated Party has
agreed or is required to indemnify any Person against any such liability.
5.16 INTELLECTUAL PROPERTY. Except as disclosed in SCHEDULE 5.16:
(a) Each Consolidated Party owns, or has the legal right to use, all
trademarks, tradenames, copyrights, service marks, proprietary techniques,
patents, patent applications, trade secrets, technology, know-how and processes
(the "INTELLECTUAL PROPERTY") necessary for each of them to conduct its business
as currently conducted except for those the failure to own or have such legal
right to use could not reasonably be expected to have a Material Adverse Effect.
All material Intellectual Property owned by any Consolidated Party (is referred
to herein as the "MATERIAL OWNED INTELLECTUAL PROPERTY") and all material
Intellectual Property that any Consolidated Party has the right to use, but not
ownership of "MATERIAL LICENSED INTELLECTUAL PROPERTY." The Material Owned
Intellectual Property and the Material Licensed Intellectual Property is
referred to collectively as the "MATERIAL INTELLECTUAL PROPERTY". SCHEDULE 5.16
sets forth a complete and accurate list as of the Closing Date of each of the
Material Owned Intellectual Property and the Material Licensed Intellectual
Property. None of the Consolidated Parties has granted any options, licenses or
agreements of any kind relating to Material Intellectual Property.
(b) No claim has been asserted and is pending by any Person challenging or
questioning the use, ownership or enforceability of any Material Intellectual
Property or the validity or effectiveness of any Material Intellectual Property,
nor does any Credit Party know of any such claim, and to the Credit Parties'
knowledge the use of the Material Intellectual Property by any Consolidated
Party does not infringe on the rights of any Person. None of the Consolidated
Parties is in breach of any material provision of any license, sublicense or
other agreement which relates to any of the Material Licensed Intellectual
Property, and none of the Consolidated Parties have taken any action which would
impair or otherwise adversely affect its rights in any of the Material
Intellectual Property. All the Material Owned Intellectual Property is valid
and enforceable, except that, with respect to
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the applications to register any unregistered Intellectual Property (but not
with respect to the underlying Intellectual Property rights that are the subject
of such applications), the Credit Parties only represent and warrant that such
applications are pending and in good standing all without challenge of any kind.
(c) The Material Owned Intellectual Property has been maintained in
confidence in accordance with protection procedures customarily used to protect
rights of like importance. To the knowledge of the Credit Parties, all former
and current members of management and key personnel of each Consolidated Party,
including all former and current employees, agents, consultants and independent
contractors who have contributed to or participated in the conception and
development of any of the Material Owned Intellectual Property (collectively,
"PERSONNEL"), have executed and delivered to such Consolidated Party a
proprietary information agreement restricting such Person's right to disclose
proprietary information of the Consolidated Parties and their respective
clients. All former and current Personnel, either (A) have been party to a
"work-for-hire" arrangement or agreement with the Consolidated Parties, in
accordance with applicable Federal and state law, that has accorded the
Consolidated Parties full, effective, exclusive and original ownership of all
tangible and intangible property thereby arising or (B) have executed
appropriate instruments of assignment in favor of the Consolidated Parties as
assignee that have conveyed to the Consolidated Parties full, effective and
exclusive ownership of all tangible and intangible property thereby arising. No
former or current Personnel have any claim against the Consolidated Parties in
connection with such Person's involvement in the conception and development of
any Intellectual Property and no such claim has been asserted or is threatened.
None of the current officers and employees of any of the Consolidated Parties
have any patents issued or applications pending for any device, process, design
or invention of any kind now used or needed by any of the Consolidated Parties
in the furtherance of its business operations, which patents or applications
have not been assigned to the Consolidated Parties, with such assignment duly
recorded in the United States Patent Office.
5.17 SOLVENCY. Each Credit Party is and, after consummation of the
transactions contemplated by this Agreement (including the transactions
contemplated by the Acquisition Agreement), will be Solvent. The total amount
of any distributions paid by the Borrower in connection with the transactions
contemplated by the Acquisition Agreement will not exceed the aggregate amount
of funds of the Borrower legally available therefor at the time of consummation
of the Acquisition.
5.18 INVESTMENTS. All Investments of any Consolidated Party are Permitted
Investments.
5.19 LOCATION OF COLLATERAL. SCHEDULE 5.19(A) sets forth a complete and
accurate list as of the Closing Date of (i) each real property owned by the
Consolidated Parties and (ii) each real property leased by the Consolidated
Parties for which annual rental payments exceed $50,000, in each case with
street address, county, state and country where located. Set forth on SCHEDULE
5.19(B) is a complete and accurate list as of the Closing Date of all real
property asset in which any Credit Party has a fee interest and/or leasehold
interest with street address, county, state and country where located. Set
forth on SCHEDULE 5.19(C) is a complete and accurate list as of the Closing Date
of all locations where any tangible personal
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property of a Credit Party is located, including county and state where located.
Set forth on SCHEDULE 5.19(D) is the chief executive office and principal place
of business of each Consolidated Party as of the Closing Date.
5.20 DISCLOSURE. Neither this Agreement nor any financial statements
delivered to the Lenders pursuant hereto nor any other document or certificate
furnished to the Lenders in writing by or on behalf of any Consolidated Party in
connection with the transactions contemplated hereby (other than final
projections) contains any untrue statement of a material fact or omits to state
a material fact necessary in order to make the statements contained therein or
herein not misleading. All financial projections that have been made available
to the Administrative Agent or the Lenders by any Consolidated Party or any
representatives thereof in connection with the transactions contemplated hereby
have been prepared in good faith based upon assumptions believed by the
Consolidated Parties to be reasonable.
5.21 NO BURDENSOME RESTRICTIONS; MATERIAL AGREEMENTS. No Consolidated
Party is a party to any agreement or instrument or subject to any other
obligation or any charter or corporate restriction or any provision of any
applicable law, rule or regulation which, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect. SCHEDULE 5.21
sets forth a complete and accurate list as of the Closing Date of each
agreement, contract, lease, license, commitment or other instrument to which any
Consolidated Party is a party or by which it or any of its Properties are or may
be bound, after giving effect to the transactions contemplated by the
Acquisition Agreement, the loss of which could, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect
(collectively, the "MATERIAL CONTRACTS").
(b) Except as set forth in SCHEDULE 5.21, as of the Closing Date, after
giving effect to the transactions contemplated by the Acquisition Agreement,
each Material Contract will be in all material respects valid, binding and in
full force and effect and will be enforceable by the Borrower or the Subsidiary
of the Borrower which is a party thereto in accordance with its terms, except as
affected by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or similar laws affecting creditors' rights generally and general
equitable principles (whether in equity or at law). Except as set forth in
SCHEDULE 5.21, as of the Closing Date, after giving effect to the transactions
contemplated by the Acquisition Agreement, each of the Borrower and the
Subsidiaries will have performed in all material respects all obligations
required to be performed by it to date under the Material Contracts and it will
not be (with or without the lapse of time or the giving of notice, or both) in
breach or default in any material respect thereunder and, to the knowledge of
the Credit Parties, no other party to any of the Material Contracts will be
(with or without the lapse of time or the giving of notice, or both) in breach
or default in any material respect thereunder. As of the Closing Date, after
giving effect to the transactions contemplated by the Acquisition Agreement,
neither the Borrower nor any of the Subsidiaries, nor, to the knowledge of the
Borrower, any other party to any Material Contract, will have given notice of
termination of, or taken any action inconsistent with the continuation of, any
Material Contract. As of the Closing Date, after giving effect to the
transactions contemplated by the Acquisition Agreement, none of such other
parties will have any presently exercisable right to terminate any Material
Contract for any reason, including as a result of the execution, delivery or
performance of the Operative Documents, the collateral assignment of such
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Material Contract to the Administrative Agent on behalf of the Lenders or the
consummation of the transactions contemplated by the Acquisition Agreement,
except as set forth on SCHEDULE 5.21.
(c) As of the Closing Date, none of the Consolidated Parties has any
knowledge of any actual or threatened materially adverse change in the
relationship between any Consolidated Party and any material customer, supplier
distributor or other party with whom such Consolidated Party does business,
whether as a result of the transactions contemplated by the Acquisition
Agreement or otherwise.
5.22 BROKERS' FEES. No Consolidated Party has any obligation to any Person
in respect of any finder's, broker's, investment banking or other similar fee in
connection with any of the transactions contemplated by the Acquisition
Agreement.
5.23 LABOR MATTERS. Except as disclosed in SCHEDULE 5.23, there are no
collective bargaining agreements or Multiemployer Plans covering the employees
of a Consolidated Party as of the Closing Date and none of the Consolidated
Parties has suffered any strike, walkout, work stoppage, unfair labor practice
complaint or other material labor difficulty within the five years prior to the
Closing Date. To the knowledge of the Credit Parties, as of the Closing Date,
no union representation question exists with respect to the employees of the
Consolidated Parties and no union organizing activities are taking place. The
hours worked by and payments made to employees of the Consolidated Parties have
not been in violation in any material respect of the Fair Labor Standards Act or
any other applicable Federal, state, local or foreign law dealing with such
matters. All payments due from any Consolidated Party, or for which any claim
may be made against any Consolidated Party, on account of wages, employee health
and welfare insurance or other benefits, have been paid or accrued as a
liability on the books of the Consolidated Parties. The consummation of the
transactions contemplated by the Acquisition Agreement will not give rise to any
right of termination or right of renegotiation on the part of any union under
any collective bargaining agreement to which any Consolidated Party is bound.
5.24 NATURE OF BUSINESS. As of the Closing Date, the Consolidated Parties
are engaged in the business of managing and marketing coal combustion
by-products and other by-products.
5.25 REPRESENTATIONS AND WARRANTIES FROM OTHER AGREEMENTS. As of the
Closing Date, each of the representations and warranties made in the Acquisition
Agreement by the parties thereto is true and correct in all material respects
and each of the representations and warranties made by any Consolidated Party in
any of the other Operative Documents is true and correct in all material
respects.
5.26 SECURITY DOCUMENTS. (a) The Security Agreement is effective to
create in favor of the Administrative Agent, for the ratable benefit of the
Secured Parties, a legal, valid and enforceable first priority security interest
in the Collateral (as defined in the Security Agreement), other than Real Estate
(as defined in the Security Agreement) and, when financing statements in
appropriate form are filed in the offices specified on Schedule 6 to the
Perfection Certificate and the Pledged Securities are delivered to the
Administrative
70
Agent, the Security Agreement shall constitute a fully perfected Lien on, and
security interest in, all right, title and interest of the grantors thereunder
in such of the Collateral in which a security interest can be perfected under
Article 8 or 9 of the Uniform Commercial Code, in each case prior and superior
in right to any other Person, other than with respect to Permitted Liens.
(b) When the Assignment of Patents and Trademarks, substantially in the
form of Exhibit A to the Security Agreement, is filed in the United States
Patent and Trademark Office and the Assignment of Copyrights, substantially in
the form of Exhibit B to the Security Agreement, is filed in the United States
Copyright Office, the Security Agreement shall constitute a fully perfected Lien
on, and security interest in, all right, title and interest of the grantors
thereunder in the Intellectual Property covered in the Security Agreement, in
each case prior and superior in right to any other Person (it being understood
that subsequent recordings in the United States Patent and Trademark Office and
the United States Copyright Office may be necessary to perfect a lien on
registered trademarks, trademark applications and copyrights acquired by the
grantors after the Closing Date).
(c) The Administrative Agent, for the ratable benefit of the Secured
Parties, will at all times have the Liens provided for in the Collateral
Documents and, subject to the filing by the Administrative Agent of continuation
statements to the extent required by the Uniform Commercial Code, the Collateral
Documents will at all times constitute a valid and continuing lien of record and
first priority perfected security interest in all the Collateral referred to
therein, except as priority may be affected by Permitted Liens. No filings or
recordings are required in order to perfect the security interests created under
the Collateral Documents, except for filings or recordings listed on SCHEDULE
5.26(C).
5.27 TRANSACTIONS WITH AFFILIATES. Except as set forth in SCHEDULE 5.27
and except for agreements and arrangements among the Borrower and its Wholly
Owned Subsidiaries or among Wholly Owned Subsidiaries of the Borrower, neither
the Borrower nor any of its Subsidiaries will be, immediately after giving
effect to the transactions contemplated by the Acquisition Agreement on the
Closing Date, a party to or engaged in any transaction with, and none of the
properties and assets of the Borrower or any of its Subsidiaries will be,
immediately after giving effect to the transactions contemplated by the
Acquisition Agreement on the Closing Date, subject to or bound by any agreement
or arrangement with, (a) any Affiliate of any Consolidated Party, (b) the
Sellers or any of its Affiliates or (c) the Sponsor or any of its Affiliates.
5.28 OWNERSHIP. (a) The authorized Capital Stock of the Parent consists
of (i) 500,000 shares of the common stock, $0.01 par value, of which 495,000
shares are issued and outstanding on Closing Date after giving effect to the
transactions contemplated by the Acquisition Agreement on the Closing Date, and
(ii) 35,000 shares of Series A Preferred Stock and 35,050 shares of Series B
Preferred Stock, all of which are outstanding. All of the outstanding shares of
the common stock of the Parent and the Borrower have been duly and validly
authorized and issued, are fully paid and nonassessable, and were not issued in
violation of the preemptive rights of any stockholder. The Parent owns good,
valid and marketable title to all the outstanding common stock of the Borrower,
free and clear of all Liens of every kind, whether absolute, matured, contingent
or otherwise, other than those
71
arising under the Collateral Documents. Other than as set forth on SCHEDULE
5.28, as of the Closing Date, the Borrower has no outstanding securities
convertible into or exchangeable for its Capital Stock, no outstanding rights to
subscribe for or purchase its Capital Stock, no outstanding options for the
purchase of its Capital Stock, no agreements providing for the issuance
(contingent or otherwise) of its Capital Stock, no incentive units, phantom
stock or similar arrangements and no calls, commitments or claims of any
character relating to its Capital Stock. Except as set forth on SCHEDULE 5.28,
there are no shareholders agreements or other agreements pertaining to the
Parent's beneficial ownership of the common stock of the Borrower, including any
agreement that would restrict the Parent's right to dispose of such common stock
and/or its right to vote such common stock.
(b) SCHEDULE 5.28 sets forth a true and accurate list as of the Closing
Date of each holder of Capital Stock of the Parent or the Borrower, indicating
the name of each such holder and the Capital Stock held by each such Person.
Except as set forth on SCHEDULE 5.28, there are no shareholders agreements or
other agreements pertaining to the Sponsor Group's beneficial ownership of the
common stock of the Parent, including any agreement that would restrict the
Sponsor Group's right to dispose of such common stock and/or its right to vote
such common stock.
5.29 INSURANCE. The Consolidated Parties maintain policies of fire and
casualty, liability, business interruption and other forms of insurance in such
amounts, with such deductibles and against such risks and losses as are in
accordance with normal industry practice for the business and assets of the
Consolidated Parties. All such policies are in full force and effect, all
premiums due and payable thereon have been paid (other than retroactive or
retrospective premium adjustments that are not yet, but may be, required to be
paid with respect to any prior period under comprehensive general liability and
workmen's compensation insurance policies), and no notice of cancellation or
termination has been received with respect to any such policy which has not been
replaced on substantially similar terms prior to the date of such cancellation.
The activities and operations of the Consolidated Parties have been conducted in
a manner so as to conform in all material respects to all applicable provisions
of such insurance policies. SCHEDULE 5.29 sets forth the insurance coverage of
the Consolidated Parties by carrier, policy number, expiration date, type and
amount as of the Closing Date.
5.30 CERTAIN TRANSACTIONS. (a) On the Closing Date, (i) the Acquisition
Agreement shall not have been amended or modified, nor any condition thereof
waived by the Parent, without the prior written consent of the Administrative
Agent, (ii) all conditions to the obligations of the Parent to consummate the
transactions contemplated by the Acquisition Agreement shall have been
satisfied, (iii) all funds advanced on the Closing Date by the Lenders will be
used in accordance with Section 5.14 and (iv) the transactions contemplated by
the Acquisition Agreement will be consummated in accordance with the Acquisition
Agreement and all applicable Requirements of Law.
(b) On the Closing Date, the Xxxxxxx Bridge Agreement shall not have been
amended or modified, nor any condition thereof waived by the Parent in a manner
adverse in any material respect to the rights or interests of the Lenders.
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(c) On the Closing Date, the CVC Subscription Agreement shall not have
been amended or modified, nor any condition thereof waived by the Parent in a
manner adverse in any material respect to the rights or interests of the
Lenders.
(d) On the Closing Date, the Subordinated Note shall not have been amended
or modified, nor any condition thereof waived by the Parent in a manner adverse
in any material respect to the rights or interests of the Lenders.
5.31 LICENSES. SCHEDULE 5.31 contains a true and complete list of all
Licenses (including, without limitation, any issued by the Federal Highway
Administration or by the Department of Transportation) used in and material to
the business or operations of the Consolidated Parties, setting forth the owner,
the function and the expiration and renewal date of each. Except as disclosed
on SCHEDULE 3.31 OF THE DISCLOSURE SCHEDULE:
(a) the Consolidated Parties own or validly hold all Licenses that
are material to their respective business or operations;
(b) each License listed on SCHEDULE 5.31 is valid, binding and in
full force and effect; and
(c) no Consolidated Party is, or has received any notice that it
is, in default (or with the giving of notice or lapse of time or both,
would be in default) under any such License.
SECTION 6
AFFIRMATIVE COVENANTS
The Parent and the Borrower hereby covenant and agree, jointly and
severally, that so long as this Agreement is in effect or any amounts payable
hereunder or under any other Credit Document shall remain outstanding and until
all of the Commitments hereunder shall have terminated and all Letters of Credit
shall have expired or been cancelled:
6.1 INFORMATION COVENANTS. The Borrower will furnish, or cause to be
furnished, to the Administrative Agent and each of the Lenders:
(a) ANNUAL FINANCIAL STATEMENTS. As soon as available, and in any
event within 90 days after the end of each fiscal year of the Parent, a
consolidated and consolidating balance sheet and income statement of the
Parent and its Consolidated Subsidiaries, as of the end of such fiscal
year, together with related consolidated and consolidating statements of
operations and retained earnings and of cash flows for such fiscal year,
setting forth in comparative form consolidated and consolidating figures
for the preceding fiscal year, all such financial statements to be in
reasonable form and detail and audited by independent certified public
accountants of recognized national standing reasonably acceptable to the
Administrative Agent and accompanied by an opinion of such accountants
(which shall not be qualified or limited in any material respect) to the
effect that such financial statements have been prepared in
73
accordance with GAAP and fairly present the consolidated financial position
and consolidated results of operations and cash flows of the Parent and its
Consolidated Subsidiaries in accordance with GAAP consistently applied
(except for changes with which such accountants concur).
(b) MONTHLY FINANCIAL STATEMENTS. As soon as available, and in
any event within 45 days after the end of each month in each fiscal year of
the Parent, a consolidated and consolidating balance sheet of the Parent
and its Consolidated Subsidiaries as of the end of such month, together
with related consolidated and consolidating statements of operations and
retained earnings and of cash flows for such month and the then elapsed
portion of such fiscal year, setting forth in comparative form consolidated
and consolidating figures for the corresponding period of the preceding
fiscal year, all such financial statements to be in reasonable form and
detail and reasonably acceptable to the Administrative Agent, and
accompanied by a certificate of the chief financial officer of the Parent
to the effect that such monthly financial statements have been prepared in
accordance with GAAP and fairly present in all material respects the
consolidated financial position and consolidated results of operations and
cash flows of the Parent and its Consolidated Subsidiaries in accordance
with GAAP consistently applied, subject to changes resulting from normal
year-end audit adjustments.
(c) OFFICER'S CERTIFICATE. At the time of delivery of the
financial statements provided for in Sections 6.1(a) and 6.1(b) above, a
certificate of the chief financial officer of the Borrower substantially in
the form of EXHIBIT N (i) demonstrating compliance with the financial
covenants contained in Section 7.19 by calculation thereof as of the end of
each such fiscal period, (ii) stating that no Default or Event of Default
exists, or if any Default or Event of Default does exist, specifying the
nature and extent thereof and what action the Borrower proposes to take
with respect thereto and (iii) stating whether, since the date of the most
recent financial statements delivered hereunder, there has been any
material change in the generally accepted accounting principles applied in
the preparation of the financial statements of the Parent and its
Consolidated Subsidiaries, and, if so, describing such change.
(d) ANNUAL BUSINESS PLAN AND BUDGETS. At least 30 days prior to
the end of each fiscal year of the Borrower, beginning with the fiscal year
ending December 31, 1998, an annual business plan and budget of the
Borrower and its Consolidated Subsidiaries containing, among other things,
projected financial statements for the next fiscal year.
(e) COMPLIANCE WITH CERTAIN PROVISIONS OF THIS AGREEMENT. Within
90 days after the end of each fiscal year of the Borrower, a certificate
containing information regarding the amount of Net Cash Proceeds from Asset
Disposition (other than Excluded Asset Dispositions), Debt Issuances (other
than Excluded Debt Issuances) and Equity Issuances (other than Excluded
Equity Issuances) that were made during the prior fiscal year.
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(f) ACCOUNTANT'S CERTIFICATE. Within the period for delivery of
the annual financial statements provided for in Section 6.1(a), a
certificate of the accountants conducting the annual audit stating that
they have reviewed this Agreement and stating further whether, in the
course of their audit, they have become aware of any Default or Event of
Default and, if any such Default or Event of Default exists, specifying the
nature and extent thereof as it relates to accounting matters.
(g) AUDITOR'S REPORTS. Promptly upon receipt thereof, a copy of
any other report or "management letter" submitted by independent
accountants to any Consolidated Party in connection with any annual,
interim or special audit of the books of such Consolidated Party.
(h) REPORTS. Promptly upon transmission or receipt thereof, (i)
copies of all filings and registrations with, and reports to or from, the
Securities and Exchange Commission, or any successor agency, and copies of
all financial statements, proxy statements, notices and reports as any
Consolidated Party shall send to its shareholders or to a holder of any
Indebtedness owed by any Consolidated Party in its capacity as such a
holder and (ii) upon the request of the Administrative Agent or the
Required Lenders, all reports and written information to and from the
United States Environmental Protection Agency, or any state or local agency
responsible for environmental matters, the United States Occupational
Health and Safety Administration, or any state or local agency responsible
for health and safety matters, or any successor agencies or authorities
concerning environmental, health or safety matters.
(i) NOTICES. Upon obtaining knowledge thereof, the Borrower will
give written notice to the Administrative Agent immediately of (i) the
occurrence of any event or condition consisting of a Default or Event of
Default, specifying the nature and existence thereof and what action the
Borrower proposes to take with respect thereto, and (ii) the occurrence of
any of the following with respect to any Consolidated Party: (A) the
pendency or commencement of any litigation, arbitral or governmental
proceeding against such Person which if adversely determined could
reasonably be expected to have a Material Adverse Effect; or (B) the
institution of any proceedings against such Person with respect to, or the
receipt of notice by such Person of potential liability or responsibility
(direct or indirect) for violation, or alleged violation of any federal,
state or local law, rule or regulation, including Environmental Laws, the
violation of which could reasonably be expected to have a Material Adverse
Effect.
(j) ERISA. The Borrower will give written notice to the
Administrative Agent promptly (and in any event within five (5) Business
Days) after any officer of any Consolidated Party obtains knowledge thereof
of: (i) any event or condition, including any Reportable Event, that
constitutes, or is reasonably likely to lead to, an ERISA Event; (ii) with
respect to any Multiemployer Plan, the receipt of notice as prescribed in
ERISA or otherwise of any withdrawal liability assessed against the
Borrower or any of its ERISA Affiliates, or of a determination that any
Multiemployer Plan is in reorganization or insolvent (both within the
meaning of Title
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IV of ERISA); (iii) the failure to make full payment on or before the due
date (including extensions) thereof of all amounts which any Consolidated
Party or any ERISA Affiliate is required to contribute to each Plan
pursuant to its terms and as required to meet the minimum funding standard
set forth in ERISA and the Code with respect thereto; or (iv) any change in
the funding status of any Plan that could have a Material Adverse Effect,
together with a description of any such event or condition or a copy of any
such notice and a statement by the chief financial officer of the Borrower
briefly setting forth the details regarding such event, condition or notice
and the action, if any, which has been or is being taken or is proposed to
be taken by the Borrower with respect thereto. Promptly upon request, the
Consolidated Parties shall furnish the Administrative Agent and the Lenders
with such additional information concerning any Plan as may be reasonably
requested, including copies of each annual report/return (Form 5500
series), as well as all schedules and attachments thereto required to be
filed with the Department of Labor and/or the Internal Revenue Service
pursuant to ERISA and the Code, respectively, for each "plan year" (within
the meaning of Section 3(39) of ERISA) as to any Plan maintained by them.
(k) ENVIRONMENTAL.
(i) Upon the written request of the Administrative Agent,
if the Administrative Agent has determined (in the exercise of its
reasonable good faith discretion) that Materials of Environmental
Concern may exist on any Company Properties in amounts or
concentrations that are reasonably likely to give rise to liability of
any Consolidated Party under Environmental Laws or that a material
violation of Environmental Laws at Company Properties may exist, then
the Consolidated Parties will furnish or cause to be furnished to the
Administrative Agent, at the expense of the Borrower, a report of an
environmental assessment of reasonable scope, form and depth
(including, where appropriate, invasive soil or groundwater sampling)
by a consultant acceptable to the Administrative Agent as to the
nature and extent of the presence of any Materials of Environmental
Concern on any Company Properties and as to the compliance by any
Consolidated Party with Environmental Laws at the Company Properties.
If any Consolidated Party fails to deliver such an environmental
report within seventy-five (75) days after receipt of such written
request, then the Administrative Agent may arrange for the same, and
the Parent and the Borrower hereby grant, and agree to cause the other
Consolidated Parties to grant, to the Administrative Agent and their
representatives access to the Company Properties to reasonably
undertake such an assessment (including, where appropriate, invasive
soil or groundwater sampling). The reasonable cost of any assessment
arranged by the Administrative Agent pursuant to this provision shall
be payable by the Borrower on demand and shall be added to the
obligations secured by the Collateral Documents.
(ii) The Consolidated Parties will conduct and complete all
investigations, studies, sampling, and testing and all remedial,
removal and other actions necessary to address all Materials of
Environmental Concern on,
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from or affecting any of the Company Properties to the extent
necessary to be in compliance with all Environmental Laws and with the
validly issued orders and directives of all Governmental Authorities
with jurisdiction over the Company Properties to the extent any
failure to take the foregoing actions could reasonably be expected to
have a Material Adverse Effect. The Borrower acknowledges and agrees
that if any Consolidated Party fails to perform any of the actions
required under this Section 6.1(l)(ii), the Administrative Agent shall
have the right (but not the obligation) to do so for such Consolidated
Party. The Borrower further acknowledges and agrees that if any
Consolidated Party fails to cooperate (E.G., by allowing access to any
premises or permitting the drilling of core samples, etc.), the
Administrative Agent and the Lenders will not have an adequate remedy
at law.
(l) ADDITIONAL PATENTS AND TRADEMARKS. At the time of delivery of
the financial statements and reports provided for in Section 6.1(a), a
report signed by the chief financial officer of the Borrower setting forth
(i) a list of registration numbers for all patents, trademarks, service
marks, tradenames and copyrights awarded to any Consolidated Party since
the last day of the immediately preceding fiscal year of the Borrower and
(ii) a list of all patent applications, trademark applications, service
xxxx applications, trade name applications and copyright applications
submitted by any Consolidated Party since the last day of the immediately
preceding fiscal year and the status of each such application, all in such
form as shall be reasonably satisfactory to the Administrative Agent.
(m) OTHER INFORMATION. With reasonable promptness upon request
therefor, such other information regarding the business, properties or
financial condition of any Consolidated Party as the Administrative Agent
or the Required Lenders may reasonably request.
6.2 PRESERVATION OF EXISTENCE AND FRANCHISES. Except as a result of or in
connection with a dissolution, merger or disposition of a Subsidiary permitted
under Section 7.4 or Section 7.5, each of the Consolidated Parties will do all
things necessary to preserve and keep in full force and effect its existence,
rights, franchises and authority except, solely with respect to the franchises
and authority of each of the Consolidated Parties, as could reasonably be
expected not to have a Material Adverse Effect.
6.3 BOOKS AND RECORDS. Each of the Consolidated Parties will keep
complete and accurate books and records of its transactions in accordance with
good accounting practices on the basis of GAAP (including the establishment and
maintenance of appropriate reserves).
6.4 COMPLIANCE WITH LAW. Each of the Consolidated Parties will comply
with all Requirements of Law applicable to it and its Properties to the extent
that noncompliance with any such Requirement of Law could reasonably be expected
to have a Material Adverse Effect.
6.5 PAYMENT OF TAXES AND OTHER INDEBTEDNESS. Each of the Consolidated
Parties will pay and discharge (a) all taxes, assessments and other governmental
charges or levies
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imposed upon it, or upon its income or profits, or upon any of its Properties,
before they shall become delinquent, (b) all lawful claims (including claims for
labor, materials and supplies) which, if unpaid, might give rise to a Lien upon
any of its Properties, and (c) except as prohibited hereunder, all of its other
Indebtedness as it shall become due; PROVIDED, HOWEVER, that no Consolidated
Party shall be required to pay any such tax, assessment, charge, levy, claim or
Indebtedness which is being contested in good faith by appropriate proceedings
diligently pursued and as to which adequate reserves therefor have been
established in accordance with GAAP, unless the failure to make any such payment
(i) could give rise to an immediate right to foreclose on a Lien securing such
amounts or (ii) could reasonably be expected to have a Material Adverse Effect.
6.6 INSURANCE; CERTAIN PROCEEDS. (a) Each of the Consolidated Parties
will at all times maintain in full force and effect insurance (including
worker's compensation insurance, liability insurance, casualty insurance and
business interruption insurance) in such amounts, covering such risks and
liabilities and with such deductibles or self-insurance retentions as are in
accordance with normal industry practice (or as are otherwise required by the
Collateral Documents). The Administrative Agent shall be named as loss payee or
mortgagee, as its interest may appear, with respect to all such property and
casualty policy and additional insured with respect to all such other policies
(other than workers' compensation and employee health policies), and each
provider of any such insurance shall agree, by endorsement upon the policy or
policies issued by it or by independent instruments furnished to the
Administrative Agent, that if the insurance carrier shall have received written
notice from the Administrative Agent of the occurrence of an Event of Default,
the insurance carrier shall pay all proceeds otherwise payable to the
Consolidated Parties under such policies directly to the Administrative Agent
(which agreement shall be evidenced by a "standard" or "New York" lender's loss
payable endorsement in the name of the Administrative Agent on Accord Form 27)
and that it will give the Administrative Agent thirty (30) days' prior written
notice before any such policy or policies shall be altered or canceled, and that
no act or default of any Consolidated Party or any other Person shall affect the
rights of the Administrative Agent or the Lenders under such policy or policies.
(b) In case of any Casualty or Condemnation with respect to any Property
of any Consolidated Party or any part thereof, the Borrower shall promptly give
written notice thereof to the Administrative Agent generally describing the
nature and extent of such damage, destruction or taking. In such case, the
Borrower shall, or shall cause such Consolidated Party to, promptly repair,
restore or replace the Property of such Consolidated Party (or part thereof)
which was subject to such Casualty or Condemnation, at such Consolidated Party's
cost and expense, whether or not the Insurance Proceeds or Condemnation Award,
if any, received on account of such event shall be sufficient for that purpose;
PROVIDED, HOWEVER, that such Property need not be repaired, restored or replaced
to the extent the failure to make such repair, restoration or replacement (i)(A)
is desirable to the proper conduct of the business of such Consolidated Party in
the ordinary course and otherwise in the best interest of such Consolidated
Party and (B) would not materially impair the rights and benefits of the
Administrative Agent or the Secured Parties under the Collateral Documents or
any other Credit Document or (ii) the failure to repair, restore or replace the
Property is attributable to the application of the Insurance Proceeds from such
Casualty or the Condemnation Award from such Condemnation to payment of the
Credit
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Obligations in accordance with the following provisions of this Section 6.6(b).
In the event a Consolidated Party shall receive any Insurance Proceeds from a
Casualty or Condemnation Award from a Condemnation, such Consolidated Party will
immediately pay over such proceeds to the Administrative Agent, for payment of
the Credit Obligations in accordance with Section 3.3(b) or, if such funds
constitute Reinvestment Funds, to be held by the Administrative Agent. The
Administrative Agent agrees to release such Insurance Proceeds or Condemnation
Awards to the Borrower upon its request and as needed from time to time to pay
for the repair, restoration or replacement of the portion of the Property
subject to such Casualty or Condemnation if, but only if, the conditions set
forth in the definition of "Reinvestment Funds" are satisfied at the time of
such request.
(c) In connection with the covenants set forth in this Section 6.6, it is
understood and agreed that:
(i) none of the Administrative Agent, the Lenders or their
respective agents or employees shall be liable for any loss or damage
insured by the insurance policies required to be maintained under this
Section 6.6, it being understood that (A) the Consolidated Parties shall
look solely to their insurance companies or any other parties other than
the aforesaid parties for the recovery of such loss or damage and (B) such
insurance companies shall have no rights of subrogation against the
Administrative Agent, the Lenders or their agents or employees. If,
however, the insurance policies do not provide waiver of subrogation rights
against such parties, as required above, then each of the Parent and the
Borrower hereby agrees to, and to cause each of the Consolidated Parties
to, waive its right of recovery, if any, against the Administrative Agent,
the Lenders and their agents and employees, to the extent permitted by law;
(ii) the Consolidated Parties will permit an insurance consultant
retained by the Administrative Agent, at the expense of the Borrower, to
review from time to time the insurance policies maintained by the
Consolidated Parties annually or upon the occurrence of an Event of
Default; and
(iii) the Required Lenders shall have the right from time to time
to require the Consolidated Parties to keep other insurance in such form
and amount as the Administrative Agent or the Required Lenders may
reasonably request; PROVIDED that such insurance shall be obtainable on
commercially reasonable terms; and PROVIDED FURTHER that the designation of
any form, type or amount of insurance coverage by the Administrative Agent
or the Required Lenders under this Section 6.6 shall in no event be deemed
a representation, warranty or advice by the Administrative Agent or the
Lenders that such insurance is adequate for the purposes of the business of
the Consolidated Parties or the protection of their properties.
6.7 MAINTENANCE OF PROPERTY. Each of the Consolidated Parties will
maintain and preserve its properties and equipment material to the conduct of
its business in good repair, working order and condition, normal wear and tear
and Casualty and Condemnation excepted, and will make, or cause to be made, as
to such properties and equipment from time to time all repairs, renewals,
replacements, extensions, additions, betterments and
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improvements thereto as may be needed or proper, to the extent and in the manner
customary for companies in similar businesses.
6.8 USE OF PROCEEDS. The Borrower will use the proceeds of the Loans and
will use the Letters of Credit solely for the purposes set forth in Section
5.14.
6.9 AUDITS/INSPECTIONS. Upon reasonable notice and during normal business
hours, each of the Consolidated Parties will permit representatives appointed by
the Administrative Agent or the Required Lenders, including independent
accountants, agents, employees, attorneys and appraisers, to visit and inspect
its Property, including its books and records, its accounts receivable and
inventory, its facilities and its other business assets, and to make photocopies
or photographs thereof and to write down and record any information such
representatives obtain and shall permit the Administrative Agent or such
representatives to investigate and verify the accuracy of information provided
to the Lenders and to discuss all such matters with the officers, employees,
independent accountants, attorneys and representatives of the Consolidated
Parties. Each of the Parent and the Borrower agrees that the Administrative
Agent, and its representatives, may conduct an audit of the Collateral, at the
expense of the Borrower, annually or upon the occurrence of an Event of Default.
Each of the Parent and the Borrower hereby irrevocably authorizes and directs
all accountants and auditors employed by it at any time during the term of this
Agreement to exhibit and deliver to the Administrative Agent and the Lenders
copies of any of the financial statements, trial balances or other accounting
records of any sort of the Consolidated Parties in the accountant's or auditor's
possession, and to disclose to the Administrative Agent and the Lenders any
information they may have concerning the financial status and business operation
of the Consolidated Parties. Each of the Parent and the Borrower hereby
irrevocably authorizes all federal, state and municipal authorities to furnish
to the Lenders copies of reports or examinations relating to the Consolidated
Parties, whether made by any Consolidated Party or otherwise.
6.10 ADDITIONAL CREDIT PARTIES. As soon as practicable and in any event
within (i) thirty (30) days after any Person becomes a direct or indirect
Subsidiary of any Credit Party or (ii) ten (10) days after the date hereof as to
clause (b) of this Section 6.10 in connection with the pledge of the Capital
Stock of Pozzolanic N.W. FCS, Inc., the Borrower shall provide the
Administrative Agent with written notice thereof setting forth information in
reasonable detail describing all of the assets of such Person and shall (a) if
such Person is a Domestic Subsidiary of a Credit Party, cause such Person to
execute a Joinder Agreement, (b) if such Person is a Subsidiary of a Credit
Party (except if such Person is a Foreign Subsidiary which is not a direct
Foreign Subsidiary of any Credit Party), cause 100% (or 65% if such Person is a
direct Foreign Subsidiary of a Credit Party for so long as the pledge of any
greater percentage would have adverse tax consequences to the Credit Parties) of
the Capital Stock of such Person to be delivered to the Administrative Agent,
together with undated stock powers signed in blank (unless, with respect to a
direct Foreign Subsidiary, such stock powers are deemed unnecessary by the
Administrative Agent in its reasonable discretion under the law of the
jurisdiction of incorporation of such Person), and to be subject at all times to
a first priority, perfected Lien in favor of the Administrative Agent pursuant
to the Collateral Documents, subject only to Permitted Liens, (c) if such Person
owns or leases any real property located in the United States of America or, to
the extent
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deemed to be material by the Administrative Agent or the Required Lenders in its
or their sole reasonable discretion, located elsewhere, cause such Person to
deliver to the Administrative Agent with respect to such real property (as
required pursuant to Section 6.14) (other than immaterial leased properties)
documents, instruments and other items of the types required to be delivered
pursuant to Section 6.14, all in form, content and scope satisfactory to the
Administrative Agent, and (d) cause such Person to deliver such other
documentation as the Administrative Agent may reasonably request in connection
with the foregoing, including appropriate UCC-1 financing statements,
environmental reports, landlord's waivers, certified resolutions and other
organizational and authorizing documents of such Person and favorable opinions
of counsel to such Person (which shall cover, among other things, the legality,
validity, binding effect and enforceability of the documentation referred to
above and the perfection of the Administrative Agent's liens thereunder), all in
form, content and scope reasonably satisfactory to the Administrative Agent.
6.11 PLEDGED ASSETS. (a) Each of the Consolidated Parties will cause,
subject to the requirements of Section 6.14, (i) all of its owned real
properties and personal property located in the United States, (ii) to the
extent deemed to be material by the Administrative Agent or the Required Lenders
in its or their sole reasonable discretion, all of its other owned real
properties and personal property and (iii) all of its leased real properties
located in the United States (other than immaterial lease properties) to be
subject at all times to first priority, perfected and, in the case of real
property (whether leased or owned), title insured Liens in favor of the
Administrative Agent pursuant to the Collateral Documents, subject in each case
only to Permitted Liens. With respect to any real property (whether leased or
owned) located in the United States of America acquired or leased by any
Consolidated Party subsequent to the Closing Date, such Person will cause to be
delivered to the Administrative Agent with respect to such real property (as
required pursuant to Section 6.14) (other than immaterial leased properties)
documents, instruments and other items of the types required to be delivered
pursuant to Section 6.14, all in form, content and scope satisfactory to the
Administrative Agent. In furtherance of the foregoing terms of this Section
6.11, the Borrower agrees to promptly provide the Administrative Agent with
written notice of the acquisition by any Consolidated Party of any real property
located in the United States of America having a market value greater than
$50,000 or the entering into a lease by any Consolidated Party of any real
property located in the United States of America for annual rent of $5,000 or
more, setting forth in reasonable detail the location and a description of the
asset(s) so acquired or leased. Without limiting the generality of the
foregoing, the Credit Parties will cause 100% of the Capital Stock of each of
their direct and indirect Subsidiaries (or 65% of such Capital Stock if such
subsidiary is a direct Foreign Subsidiary for so long as the pledge of any
greater percentage could have adverse tax consequences to the Credit Parties),
excluding the Capital Stock of any Foreign Subsidiary which is not a direct
Foreign Subsidiary of any Credit Party, to be subject at all times to a first
priority, perfected Lien in favor of the Administrative Agent pursuant to the
terms and conditions of the Collateral Documents.
(b) If, subsequent to the Closing Date, a Credit Party shall acquire any
Intellectual Property, securities, instruments, chattel paper or other personal
property required to be delivered to the Administrative Agent as Collateral
hereunder or under any of the Collateral Documents, the Borrower shall promptly
(and in any event within three (3) Business Days
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after any officer of any Credit Party acquires knowledge of the same) notify the
Administrative Agent of the same. Each of the Credit Parties shall adhere to
the covenants regarding the location of personal property as set forth in the
Security Agreement.
6.12 INTEREST RATE PROTECTION AGREEMENTS. In the event the Senior Notes
are not issued pursuant to the Senior Note Agreement, within 90 days after the
Closing date, the Borrower will enter into and thereafter maintain in full force
and effect Interest Rate Protection Agreements at rates and on terms
satisfactory to the Administrative Agent, the effect of which shall be to fix or
limit the interest that would be payable in connection with Loans (whether or
not such Loans are then outstanding) in the principal amount of not less than
$21,000,000 for a period expiring no earlier than 60 months after the Closing
Date. The Borrower will promptly deliver evidence of the execution and delivery
of such Interest Rate Protection Agreements to the Administrative Agent.
6.13 SENIOR NOTES. In the event the Borrower enters into the Senior Note
Agreement, such Agreement shall be (i) on terms that are satisfactory to the
Required Lenders, in their reasonable discretion, consistent with commercially
customary terms, (ii) the Borrower shall execute the Senior Notes on terms that
are satisfactory to the Required Lenders, in their reasonable discretion, (iii)
the Administrative Agent shall receive a copy, certified by an officer of the
Borrower as true and complete, of the Senior Note Agreement and each of the
Senior Notes as originally executed and delivered and (iv) the Borrower shall
receive cash proceeds from the sale of Senior Notes in an aggregate principal
amount of not less than $100,000,000.
6.14 REAL PROPERTY COLLATERAL. The Borrower will within sixty (60) days
after the Administrative Agent's request, which request the Administrative Agent
may make at any time in its sole discretion, either (x) prior to the issuance of
the Senior Notes, upon the occurrence of a Default, (y) after the issuance of
the Senior Notes, upon the occurrence of a Default or (y) in the event the
Senior Notes are not issued, upon an Event of Default, to the extent not cured
or waived, deliver to the Administrative Agent, in form and substance reasonably
satisfactory to the Administrative Agent:
(a) for each fee interest or leasehold interest of any
Consolidated Party in a real property asset, or in the case of subclause
(y) above, each fee interest of any Consolidated Party in a real property
asset with an appraised value in excess of $250,000, it being understood
that the Borrower shall deliver, at the Borrowers expense, a appraisal of
any such real property reasonably requested by the Administrative Agent, a
fully executed and notarized mortgage, deed of trust or deed to secure debt
in substantially the form agreed by the Borrower and the Administrative
Agent within 15 days after such request by the Administrative Agent (each,
as the same may be amended, modified, restated or supplemented from time to
time, a "MORTGAGE INSTRUMENT" and collectively the "MORTGAGE INSTRUMENTS")
encumbering such fee interest or leasehold interest (each a "MORTGAGED
PROPERTY" and collectively the "MORTGAGED PROPERTIES");
(b) for each real property encumbered by a Mortgage Instrument, a
title report obtained by the Credit Parties in respect of each of the
Mortgaged Properties;
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(c) in the case of each Mortgaged Property, (i) maps or plats of
an as-built survey of the sites of the real property covered by the
Mortgaged Instruments, (ii) title insurance policies, (iii) flood hazard
insurance, (iv) evidence of zoning and (v) any other document, certificate
or report requested by the Administrative Agent, in its reasonable
discretion; and
(d) in the case of each real property leasehold encumbered by a
Mortgage Instrument, to the extent permitted by the applicable lease,
evidence that the applicable lease, a memorandum of lease with respect
thereto, or other evidence of such lease in form and substance satisfactory
to the Administrative Agent, has been or will be recorded in all places to
the extent necessary or desirable, in the reasonable judgment of the
Administrative Agent, so as to enable the Mortgage Instrument encumbering
such leasehold interest to effectively create a valid and enforceable first
priority lien (subject to Permitted Liens) on such leasehold interest in
favor of the Administrative Agent (or such other Person as may be required
or desired under local law) for the benefit of the Secured Parties.
6.15 POST-CLOSING CONDITIONS. (a) Within 15 days of the Closing Date, the
Borrower will deliver or cause to be delivered to the Administrative Agent the
financial statements required to be delivered pursuant to Section 4.1(c)(i)(A),
(ii) and (vi) for the Borrower and its Subsidiaries for the fiscal years ended
December 31, of each of 1995 and 1996 and the period from January 1, 1997 to
October 14, 1997 and from October 15, 1997 to December 31, 1997.
(b) Within 30 days of the Closing Date, the Borrower shall cause itself to
be (i) reinstated to do business in the State of Utah and (ii) qualified to do
business in the State of New Jersey to the extent necessary to the business of
the Borrower or any of its Subsidiaries or to the extent the absence of
qualification could result in a Material Adverse Effect on the Borrower and its
Subsidiaries taken as a whole.
(c) Within 90 days of the Closing Date, the Borrower will use its best
efforts to provide the Administrative Agent legal descriptions of all real
property, either owned or leased by any Consolidated Party with respect to
filing UCC Financing Statements relating to owned personal property of any
Consolidated Party deemed a fixture to such real property.
SECTION 7
NEGATIVE COVENANTS
The Parent and the Borrower hereby covenant and agree, jointly and
severally, that so long as this Agreement is in effect or any amounts payable
hereunder or under any other Credit Document shall remain outstanding and until
all of the Commitments hereunder shall have terminated and all Letters of Credit
shall have expired or been cancelled:
7.1 INDEBTEDNESS. None of the Consolidated Parties will contract, create,
incur, assume or permit to exist any Indebtedness, except:
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(a) Indebtedness arising under this Agreement and the other Credit
Documents;
(b) Indebtedness of the Borrower and its Subsidiaries in existence
on the Closing Date to the extent disclosed in SCHEDULE 7.1;
(c) purchase money Indebtedness (including Capital Leases)
incurred by the Borrower or any of its Subsidiaries after the Closing Date
to finance the purchase of fixed assets acquired after the Closing Date;
PROVIDED that (i) the total of all such Indebtedness for the Borrower and
its Subsidiaries taken together shall not exceed an aggregate principal
amount of $500,000 at any time outstanding; (ii) such Indebtedness when
incurred shall not exceed the purchase price of the asset(s) financed;
(iii) no such Indebtedness shall be refinanced for a principal amount in
excess of the principal balance outstanding thereon at the time of such
refinancing or on terms or conditions more favorable in any respect to the
holders thereof than the terms and conditions in effect at the time of such
refinancing; and (iv) such Indebtedness is issued and any Liens securing
such Indebtedness are created at the time of, or within 90 days after, the
acquisition of such assets and such Indebtedness is not secured by a Lien
on any other assets; PROVIDED, FURTHER, that the Borrower may incur,
purchase money Indebtedness after the Closing Date to finance a Permitted
Acquisition; PROVIDED that (i) the total of all such Indebtedness for the
Borrower shall not exceed an aggregate principal amount of $2,500,000 and
(ii) such Indebtedness shall be unsecured.
(d) Indebtedness of the Borrower or any of its Subsidiaries in
respect of Interest Rate Protection Agreements, if any, entered into in
order to limit exposure to floating rate indebtedness of the Borrower or
any of its Subsidiaries and not for speculative purposes;
(e) intercompany Indebtedness of any Subsidiaries of the Borrower
arising out of loans and advances permitted under Section 7.6;
(f) Indebtedness arising under the Senior Note Agreement and the
Senior Notes (but not including any renewal, refinancing or extension
thereof);
(g) Indebtedness created pursuant to the Xxxxxxx Bridge Agreement
and evidenced by the Xxxxxxx Bridge Note (including any renewal,
refinancing or extension thereof, to the extent that any such renewal,
refinancing or extension of the Xxxxxxx Bridge Agreement or the Xxxxxxx
Bridge Note is (i) on the same terms and conditions as the Xxxxxxx Bridge
Agreement and the Xxxxxxx Bridge Note, and (ii) the maturity date is
satisfactory to the Administrative Agent, in its sole discretion);
(h) Indebtedness created pursuant to and evidenced by the
Subordinated Note (but not including any renewal, refinancing or extension
thereof); and
(i) in addition to the Indebtedness otherwise permitted by this
Section 7.1, other Indebtedness incurred after the Closing Date by the
Borrower; PROVIDED that (A)
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the loan documentation with respect to such Indebtedness shall not contain
covenants or default provisions relating to any Consolidated Party that are
more restrictive than the covenants and default provisions contained in the
Credit Documents, (B) no Default or Event of Default shall have occurred
and be continuing immediately before or immediately after giving effect to
such incurrence and the Borrower shall have delivered to the Administrative
Agent a Pro Forma Compliance Certificate demonstrating that, upon giving
effect on a Pro Forma Basis to the incurrence of such Indebtedness and to
the concurrent retirement of any other Indebtedness of any Consolidated
Party, the Credit Parties shall be in compliance with all of the financial
covenants set forth in Section 7.19 and (C) the aggregate principal amount
of such Indebtedness shall not exceed $1,000,000 at any time outstanding.
7.2 LIENS. None of the Consolidated Parties will contract, create, incur,
assume or permit to exist any Lien with respect to any of its Property, whether
now owned or hereafter acquired, except for Permitted Liens.
7.3 NATURE OF BUSINESS. None of the Consolidated Parties will alter the
character or conduct of the business conducted by such Person as of the Closing
Date.
7.4 CONSOLIDATION, MERGER, DISSOLUTION, ETC. Except in connection with an
Asset Disposition permitted by the terms of Section 7.5, none of the
Consolidated Parties will enter into any transaction of merger or consolidation
or liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution); PROVIDED that, notwithstanding the foregoing provisions of this
Section 7.4:
(a) the Borrower may merge or consolidate with any of its Wholly
Owned Subsidiaries; PROVIDED that (i) the Borrower shall be the continuing
or surviving corporation in such merger or consolidation, (ii) the Credit
Parties shall cause to be executed and delivered such documents,
instruments and certificates as the Administrative Agent may request so as
to cause the Credit Parties to be in compliance with the terms of
Section 6.12 after giving effect to such transaction and (iii) no Default
or Event of Default shall have occurred and be continuing immediately
before or immediately after giving effect to such transaction;
(b) any Wholly Owned Subsidiary of the Borrower may merge or
consolidate with any other Wholly Owned Subsidiary of the Borrower;
PROVIDED that (i) the Credit Parties shall cause to be executed and
delivered such documents, instruments and certificates as the
Administrative Agent may request so as to cause the Credit Parties to be in
compliance with the terms of Section 6.12 after giving effect to such
transaction and (ii) no Default or Event of Default shall have occurred and
be continuing immediately before or immediately after giving effect to such
transaction;
(c) any Wholly Owned Subsidiary of the Borrower may dissolve,
liquidate or wind up its affairs at any time; PROVIDED that (i) the Credit
Parties shall cause to be executed and delivered such documents,
instruments and certificates as the Administrative Agent may request to
cause the Credit Parties to be in compliance with
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the terms of Section 6.12 after giving effect to such transaction and (ii)
no Default or Event of Default shall have occurred and be continuing
immediately before or after giving effect to such transaction; and
(d) the Borrower or any Subsidiary of the Borrower may merge with
any Person (other than a Consolidated Party) in connection with a Permitted
Acquisition if (i) the Borrower or such Subsidiary shall be the continuing
or surviving corporation in such merger or consolidation, (ii) the Credit
Parties shall cause to be executed and delivered such documents,
instruments and certificates as the Agent may request so as to cause the
Credit Parties to be in compliance with the terms of Section 6.11 after
giving effect to such transaction, (iii) no Default or Event of Default
shall have occurred and be continuing immediately before or immediately
after giving effect to such transaction and (iv) the Borrower shall have
delivered to the Administrative Agent a Pro Forma Compliance Certificate
demonstrating that, upon giving effect on a Pro Forma Basis to such
transaction, the Credit Parties shall be in compliance with all of the
financial covenants set forth in Section 7.19 as of the last day of the
most recent period of four consecutive fiscal quarters of the Borrower
which precedes or ends on the date of such transaction and with respect to
which the Administrative Agent has received the Required Financial
Information.
7.5 ASSET DISPOSITIONS. None of the Consolidated Parties will make any
Asset Disposition (other than a Casualty or Condemnation); PROVIDED that the
foregoing provisions of this Section 7.5 shall not prohibit the following:
(a) Excluded Asset Dispositions; and
(b) any other Asset Disposition; provided that (i) the consideration
therewith is cash or Cash Equivalents; (ii) if such transaction is a Sale
and Leaseback Transaction, such transaction is permitted by the terms of
Sections 7.1 and 7.13; (iii) such transaction does not involve the sale or
other disposition of a minority equity interest in any Consolidated Party;
(iv) the aggregate net book value of all of the assets sold or otherwise
disposed of by the Consolidated Parties in all such transactions in
reliance on this paragraph shall not exceed $500,000 in any fiscal year of
the Borrower or $2,500,000 in the aggregate from and after the Closing
Date; and (v) no Default or Event of Default shall have occurred and be
continuing immediately before or immediately after giving effect to such
transaction and the Borrower shall have delivered to the Administrative
Agent a Pro Forma Compliance Certificate demonstrating that, upon giving
effect on a Pro Forma Basis to such transaction, the Credit Parties shall
be in compliance with all of the financial covenants set forth in Section
7.19.
Upon consummation of an Asset Disposition permitted by this Section 7.5, the
Administrative Agent shall (to the extent applicable) deliver to the Borrower,
upon the Borrower's request and at the Borrower's expense, such documentation as
is reasonably necessary to evidence the release of the Administrative Agent's
security interest, if any, in the assets being disposed of, including amendments
or terminations of UCC financing statements, if any, the return of stock
certificates, if any, and the release of any Subsidiary
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being disposed of in its entirety from all of its obligations, if any, under the
Credit Documents.
7.6 INVESTMENTS; ACQUISITIONS. None of the Consolidated Parties will make
any Investment in, to or for the benefit of any Person or purchase, lease or
otherwise acquire (in one transaction or a series of transactions) all or any
substantial part of the assets of any other Person; PROVIDED that any
Consolidated Party (other than the Parent) may purchase inventory in the
ordinary course of business and may make Permitted Investments.
7.7 RESTRICTED PAYMENTS. None of the Consolidated Parties will, directly
or indirectly, declare, order, make or set apart any sum for or pay any
Restricted Payment, except (a) dividends payable solely in common stock of such
Person, (b) dividends or other distributions payable to the Borrower or any
Wholly Owned Subsidiary of the Borrower, (c) repurchases of common stock of the
Parent from any employee of the Consolidated Parties (other than any such Person
which is a director, officer or employee of or holder of Capital Stock of the
Sponsor or any of its Affiliates) upon the termination of employment of such
Person, PROVIDED that the aggregate amount paid in all such repurchases shall
not exceed $500,000 in the aggregate from and after the Closing Date, (d) cash
advances made or cash dividends paid by the Borrower to the Parent which
advances or dividends are used solely to fund administrative and other
miscellaneous expenses incurred by the Parent in accordance with Section
7.12(b), (e) payments of accrued interest on the Senior Notes and (f) tax
sharing payments for taxes (including estimated taxes) that are paid on a
combined, consolidated, unitary or similar basis, to the extent that such
payments do not exceed the amount that the payor would have paid to the relevant
taxing authority if the payor filed a separate tax return for the period in
question.
7.8 PREPAYMENTS OF INDEBTEDNESS, ETC. None of the Consolidated Parties
will (a) after the issuance thereof, amend, waive or modify (or permit the
amendment, waiver or modification of) any of the terms, agreements, covenants or
conditions of or applicable to any Indebtedness issued by such Consolidated
Party if such amendment, waiver or modification would add or change any terms,
agreements, covenants or conditions in a manner adverse to any Consolidated
Party, or shorten the final maturity or average life to maturity or require any
payment to be made sooner than originally scheduled or increase the interest
rate applicable thereto or change any subordination provision thereof, or (b)
directly or indirectly redeem, purchase, prepay, retire, defease or otherwise
acquire for value, prior to scheduled maturity, scheduled repayment or scheduled
sinking fund payment, any Indebtedness (other than Credit Obligations), or set
aside any funds for such purpose, whether such redemption, purchase, prepayment,
retirement or acquisition is made at the option of any Consolidated Party or at
the option of the holder thereof, and whether or not any such redemption,
purchase, prepayment, retirement or acquisition is required under the term and
conditions applicable to such Indebtedness, including, without limitation, any
Indebtedness arising under the Senior Note Agreement and the Senior Notes or any
Indebtedness arising under the Subordinated Note or (c) release, cancel,
compromise or forgive in whole or in part the Indebtedness evidenced by the
Intercompany Notes.
7.9 TRANSACTIONS WITH AFFILIATES. None of the Consolidated Parties will
engage in any transaction or series of transactions with (a) any officer,
director, holder of Capital
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Stock, Subsidiary or Affiliate of any Consolidated Party, (b) any Affiliate of
any such officer, director, holder, Subsidiary or Affiliate or (c) the Sponsor
or any officer, director, holder of Capital Stock, Subsidiary or Affiliate of
the Sponsor, other than (i) transfers of assets to any Credit Party other than
the Parent permitted by Section 7.5, (ii) transactions expressly permitted by
Section 7.1, Section 7.4, Section 7.5, Section 7.6 or Section 7.7, (iii) normal
compensation and reimbursement of reasonable expenses of officers and directors,
(iv) other transactions with the Sponsor and its Affiliates in existence on
Closing Date to the extent disclosed in SCHEDULE 7.9 (v) any transaction entered
into among the Borrower and its Wholly Owned Subsidiaries or among such Wholly
Owned Subsidiaries, and (vi) so long as no Default or Event of Default has
occurred and is continuing, other transactions which are engaged in by any
Consolidated Party in the ordinary course of its business on terms and
conditions as favorable to such Person as would be obtainable by it in a
comparable arms'-length transaction with an independent, unrelated third party.
None of the Consolidated Parties will enter into any management, employment,
consulting or similar agreement or arrangement with, or otherwise pay any
professional, consulting management or similar fees to or for the benefit of,
the Sponsor, any members of their families, any Affiliates of the Sponsor or
such family members, any director, officer or security holder of any of the
foregoing, or any successor or transferee of any of the foregoing.
7.10 FISCAL YEAR; ORGANIZATIONAL DOCUMENTS. None of the Consolidated
Parties will (a) change its fiscal year or (b) amend, modify or change its
articles of incorporation (or corporate charter or other similar organizational
document) in any respect or amend, modify or change its bylaws (or other similar
document) in any manner adverse in any respect to the rights or interests of the
Lenders or (c) enter into any amendment, modification or waiver that is adverse
in any respect to the Lenders to (i) any Material Contract as in effect on the
Closing Date, (ii) the Acquisition Agreement as in effect on the Closing Date,
(iii) the Stockholders Agreement as in effect on the Closing Date, (iv) the CVC
Subscription Agreement, the Warrants, the Contribution and Assignment Agreement,
the Contribution and Subscription Agreement, the Deju Subscription Agreement,
the Registration Rights Agreement or any shareholders or similar agreement
relating to Capital Stock or the Warrants, as the case may be, of the Parent as
in effect on the Closing Date, (v) the Xxxxxxx Bridge Agreement as in effect on
the Closing Date or any other documents establishing and setting forth the
rights and terms of the Xxxxxxx Bridge Note as in effect on the Closing Date,
(vi) the Senior Note Agreement or any other documents establishing and setting
forth the rights and terms of the Senior Notes or (vii) the Subordinated Note or
any other documents establishing and setting forth the rights and terms of the
Subordinated Note. The Credit Parties will cause the Consolidated Parties to
promptly provide the Lenders with copies of all proposed amendments to the
foregoing documents and instruments as in effect as of the Closing Date.
7.11 LIMITATION ON RESTRICTED ACTIONS. None of the Consolidated
Parties will, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction on the
ability of any such Person to (a) pay dividends or make any other distributions
to any Credit Party on its Capital Stock or with respect to any other interest
or participation in, or measured by, its profits, (b) pay any Indebtedness or
other obligation owed to any Credit Party, (c) make loans or advances to any
Credit Party, (d) sell, lease or transfer any of its properties or assets to any
Credit Party or (e) act as a
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Guarantor and pledge its assets pursuant to the Credit Documents or any
renewals, refinancings, exchanges, refundings or extension thereof, except (in
respect of any of the matters referred to in clauses (a)-(d) above) for such
encumbrances or restrictions existing under or by reason of (i) this Agreement
and the other Credit Documents, (ii) the Senior Note Agreement and the Senior
Notes, (iii) the Subordinated Note, (iv) applicable law, (v) any document or
instrument governing Indebtedness incurred pursuant to Section 7.1(c), PROVIDED
that any such restriction contained therein relates only to the asset or assets
constructed or acquired in connection therewith (and any renewals, refinancings,
exchanges, refundings or extensions thereof, so long as the terms of such
encumbrances or restrictions are no more onerous than those with respect to such
Indebtedness upon the original incurrence thereof) or (vi) customary
non-assignment provisions in any lease governing a leasehold interest.
7.12 OWNERSHIP OF SUBSIDIARIES; LIMITATIONS ON PARENT AND BORROWER. (a)
The Parent and the Borrower will not (i) permit any Person (other than the
Borrower or any Wholly Owned Subsidiary of the Borrower) to own any Capital
Stock of any Subsidiary of the Borrower, (ii) permit any Subsidiary of the
Borrower to issue Capital Stock to any Person, except (A) the Borrower or any
Wholly Owned Subsidiary of the Borrower or (B) to qualify directors where
required by applicable law or to satisfy other requirements of applicable law
with respect to the ownership of Capital Stock of Foreign Subsidiaries or (iii)
permit the Borrower or any Subsidiary of the Borrower to issue any shares of
Preferred Stock.
(b) The Parent shall not (i) hold any assets other than the Capital Stock
of the Borrower, (ii) have any material liabilities other than (A) liabilities
under the Credit Documents and (B) tax liabilities in the ordinary course of
business or (iii) engage in any business or activity other than (A) owning the
common stock of the Borrower (including purchasing additional shares of common
stock after the Closing Date) and activities incidental or related thereto or to
the maintenance of the corporate existence of the Parent or compliance with
applicable law, (B) acting as a Guarantor hereunder and pledging its assets to
the Administrative Agent, for the benefit of the Lenders, pursuant to the
Collateral Documents to which it is a party, (C) issuing the Xxxxxxx Bridge Note
pursuant to the Xxxxxxx Bridge Agreement, (D) issuing its own Capital Stock
(other than Disqualified Stock), (E) entering into the Employment Agreements,
the Deju Subscription Agreement, the Contribution and Subscription Agreement,
the Stockholders Agreement, the Registration Rights Agreement, the CVC
Subscription Agreement and the Contribution and Assignment Agreement,
(F) entering into the Acquisition Agreement, (G) issuing the Senior Notes as
permitted pursuant to Section 6.13 and (H) issuing the Subordinated Note.
(c) The Parent and the Borrower (i) will not permit any Person other than
the Parent to hold any common stock of the Borrower (or any warrants,
securities, options or other rights exercisable for, convertible into or
exchangeable for common stock), (ii) will not permit the Parent to hold any
Capital Stock of the Borrower (other than outstanding shares of common stock)
and (iii) will not permit any other Person to hold any other Capital Stock of
the Borrower.
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7.13 SALE LEASEBACKS. None of the Consolidated Parties will, directly or
indirectly, become or remain liable as lessee or as guarantor or other surety
with respect to any lease, whether an Operating Lease or a Capital Lease, of any
Property (whether real or personal or mixed), whether now owned or hereafter
acquired, (a) which such Consolidated Party has sold or transferred or is to
sell or transfer to a Person which is not a Consolidated Party or (b) which such
Consolidated Party intends to use for substantially the same purpose as any
other Property which has been sold or is to be sold or transferred by such
Consolidated Party to another Person which is not a Consolidated Party in
connection with such lease.
7.14 CAPITAL EXPENDITURES. The Borrower will not permit Consolidated
Capital Expenditures for any fiscal year of the Borrower to be more than the sum
of (a) $6,000,000 and (b) an amount equal to 50% of the actual amount of
permitted but unused Consolidated Capital Expenditures for the immediately
preceding fiscal year of the Borrower.
7.15 NO FURTHER NEGATIVE PLEDGES. None of the Consolidated Parties will
enter into, assume or become subject to any agreement prohibiting or otherwise
restricting the creation or assumption of any Lien upon its properties or
assets, whether now owned or hereafter acquired, or requiring the grant of any
security for such obligation if security is given for some other obligation,
except (a) pursuant to this Agreement and the other Credit Documents, (b)
pursuant to the Xxxxxxx Bridge Agreement and the Xxxxxxx Bridge Note and (c)
pursuant to any document or instrument governing Indebtedness incurred pursuant
to Section 7.1(c), PROVIDED that any such restriction contained therein relates
only to the asset or assets constructed or acquired in connection therewith,
7.16 OPERATING LEASE OBLIGATIONS. None of the Consolidated Parties will
enter into, assume or permit to exist any obligations for the payment of rent
under Operating Leases which in the aggregate for the Borrower and its
Consolidated Subsidiaries, determined on a consolidated basis, exceed or would
exceed $6,000,000 in any fiscal year of the Borrower.
7.17 IMPAIRMENT OF SECURITY INTERESTS. None of the Consolidated Parties
will take or omit to take any action, which action or omission might or would
have the result of materially impairing the security interests in favor of the
Administrative Agent on behalf of the Secured Parties with respect to the
Collateral and none of the Consolidated Parties will grant to any Person (other
than the Secured Parties pursuant to the Collateral Documents) any interest
whatsoever in the Collateral, except for Permitted Liens.
7.18 SALES OF RECEIVABLES. None of the Consolidated Parties will sell with
recourse, discount or otherwise sell or dispose of its notes or accounts
receivable.
7.19 FINANCIAL COVENANTS. (a) INTEREST COVERAGE RATIO. The Borrower will
not permit the Interest Coverage Ratio, as of the last day of any fiscal quarter
of the Borrower, to be less than 3.50 to 1.00.
(b) LEVERAGE RATIO. The Borrower will not permit the Leverage Ratio, as
of the last day of any fiscal quarter of the Borrower, to be greater than 6.0 to
1.00.
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(c) CONSOLIDATED NET WORTH. The Borrower will not permit Consolidated Net
Worth as of the last day of any fiscal quarter of the Borrower to be less than
the "Minimum Compliance Level". The Minimum Compliance Level shall be
$24,000,000 on the Closing Date, and shall be increased as of the last day of
each fiscal quarter of the Borrower ending after the Closing Date, commencing
with the fiscal quarter ending March 31, 1998, by an amount equal to the sum of
50% of Consolidated Net Income (if positive) for such fiscal quarter and 100% of
the Net Cash Proceeds (and the fair market value of any noncash proceeds) of any
Equity Issuance by any Consolidated Party during such fiscal quarter (other than
any capital contribution by the Borrower or any of its Wholly Owned Subsidiaries
to any Wholly Owned Subsidiary of the Borrower). The foregoing increases in the
Minimum Compliance Level shall be fully cumulative and no reduction in the
Minimum Compliance Level shall be made to reflect negative Net Income for any
period.
(d) ADJUSTMENT OF FINANCIAL COVENANTS. The parties hereto agree that upon
the issuance of the Senior Notes, the financial covenants contained in this
Section 7.19 shall be adjusted as mutually agreed by the Borrower and the
Required Lenders.
7.20 XXXXX CASH ACCOUNTS. The Borrower will not permit the balance of
either of the Xxxxx Cash Accounts to exceed $15,000.00 in the aggregate at any
time, unless a Depository Bank Agreement shall be delivered with respect to
either Xxxxx Cash Account.
SECTION 8
EVENTS OF DEFAULT
8.1 EVENTS OF DEFAULT. An Event of Default shall exist upon the
occurrence of any of the following specified events (each an "EVENT OF
DEFAULT"):
(a) PAYMENT. Any Credit Party shall:
(i) default in the payment when due of any principal of any
of the Loans or of any reimbursement obligations arising from drawings
under Letters of Credit when and as the same shall become due and
payable, whether at the due date thereof or at a date fixed for
prepayment thereof or by acceleration thereof or otherwise; or
(ii) default, and such default shall continue unremedied for
three (3) or more Business Days, in the payment when due of any
interest on the Loans or on any reimbursement obligations arising from
drawings under Letters of Credit, or of any Fees or other Credit
Obligations owing hereunder, under any of the other Credit Documents
or otherwise;
(b) REPRESENTATIONS. Any representation, warranty or statement
made or deemed to be made by any Credit Party herein, in any of the other
Credit Documents or in any statement or certificate delivered or required
to be delivered pursuant hereto or thereto shall prove to have been false
or misleading in any material respect on the date as of which it was made,
deemed to have been made or delivered;
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(c) COVENANTS. Any Credit Party shall:
(i) default in the due performance or observance of any
term, covenant or agreement contained in Section 6.1(a), (b), (c),
(d), (e), (f) or (i), 6.2, 6.9, 6.11, 6.12 or 7.1 through 7.19,
inclusive;
(ii) default in the due performance or observance of any
term, covenant or agreement contained in Section 6.1, (g), (h), (j),
(k), (l) or (m) and such default shall continue unremedied for a
period of at least 15 days after the earlier of a Responsible Officer
of a Credit Party becoming aware of such default or notice thereof by
the Administrative Agent or the Required Lenders; or
(iii) default in the due performance or observance of any
term, covenant or agreement (other than those referred to in
subsection (a), (b), (c)(i) or (c)(ii) of this Section 8.1) contained
in this Agreement, any of the other Credit Documents or any Lender
Hedging Agreement and such default shall continue unremedied for a
period of at least 30 days after the earlier of a Responsible Officer
of a Credit Party becoming aware of such default or notice thereof by
the Administrative Agent or the Required Lenders;
(d) CREDIT DOCUMENTS. Except as applicable to a Subsidiary of the
Borrower as a result of or in connection with a dissolution, merger or
disposition of such Subsidiary permitted under this Agreement and except as
a result of releases of Collateral in accordance with all applicable
provisions of the Credit Documents, any Credit Document shall fail to be in
full force and effect or to give the Administrative Agent or any other
Secured Party the Liens, rights, powers and privileges purported to be
created thereby, or any Credit Party or any Person acting by or on behalf
of any Credit Party shall so state in writing;
(e) BANKRUPTCY, ETC. Any Bankruptcy Event shall occur with
respect to any Consolidated Party;
(f) DEFAULTS UNDER OTHER AGREEMENTS. With respect to any
Indebtedness (other than Indebtedness outstanding under the Credit
Documents) in excess of $500,000 in the aggregate for the Consolidated
Parties taken as a whole, (A) any Consolidated Party shall default in any
payment (beyond the applicable grace period with respect thereto, if any)
with respect to any such Indebtedness, (B) any Consolidated Party shall
default in the observance or performance of any other term, covenant,
condition or agreement relating to such Indebtedness or contained in any
instrument or agreement evidencing or securing such Indebtedness or
relating thereto, or any other event or condition shall occur or condition
exist, the effect of which default or other event or condition is to cause,
or permit the holder or holders of such Indebtedness (or any trustee or
agent on behalf of such holders) to cause (determined without regard to
whether any notice or lapse of time is required) any such Indebtedness (or
any portion thereof) to become due prior to its stated maturity, (C) any
such Indebtedness (or any portion thereof) shall be declared due and
payable, or
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shall be required to be prepaid (other than by a regularly scheduled
required payment) prior to the stated maturity thereof or (D) any
Consolidated Party shall be required by the terms of such Indebtedness to
offer to prepay or repurchase such Indebtedness (or any portion thereof)
prior to the stated maturity thereof;
(g) JUDGMENTS. One or more judgments or decrees shall be entered
against one or more of the Consolidated Parties involving a liability of
$250,000 or more in the aggregate (to the extent not paid or fully covered
by insurance provided by a carrier which has acknowledged coverage and has
the ability to perform) and any such judgments or decrees shall not have
been vacated, discharged or stayed or bonded pending appeal within 30 days
from the entry thereof, or any action shall be legally taken by a judgment
creditor to levy upon assets or properties of any Consolidated Party to
enforce any such judgment;
(h) ERISA. Any of the following events or conditions shall occur:
(i) any "accumulated funding deficiency," as such term is defined in
Section 302 of ERISA and Section 412 of the Code, whether or not waived,
shall exist with respect to any Plan, or any lien shall arise on the assets
of any Consolidated Party or any ERISA Affiliate in favor of the PBGC or a
Plan; (ii) an ERISA Event shall occur with respect to a Plan, which is, in
the opinion of the Administrative Agent or the Required Lenders, likely to
result in the termination of such Plan for purposes of Title IV of ERISA;
(iii) an ERISA Event shall occur with respect to a Multiemployer Plan or
Multiple Employer Plan, which is, in the opinion of the Administrative
Agent or the Required Lenders, reasonably likely to result in (A) the
termination of such Plan for purposes of Title IV of ERISA or (B) any
Consolidated Party or any ERISA Affiliate incurring any liability in
connection with a withdrawal from, reorganization of (within the meaning of
Section 4241 of ERISA), or insolvency of (within the meaning of Section
4245 of ERISA) such Plan; (iv) any prohibited transaction (within the
meaning of Section 406 of ERISA or Section 4975 of the Code) or breach of
fiduciary responsibility shall occur which may subject any Consolidated
Party or any ERISA Affiliate to any liability under Section 406, 409,
502(i) or 502(1) of ERISA or Section 4975 of the Code or under any
agreement or other instrument pursuant to which any Consolidated Party or
any ERISA Affiliate has agreed or is required to indemnify any Person
against any such liability; or (v) any other event or condition out of the
ordinary course of business shall occur or exist with respect to any Plan;
and, in each case in clauses (i) through (v) above, such event or
condition, together with all other such events or conditions, if any, could
reasonably be expected to involve possible taxes, penalties and other
liabilities affecting the Consolidated Parties in an aggregate amount in
excess of $500,000 or require payments by the Consolidated Parties
exceeding $100,000 in any fiscal year of the Borrower;
(i) INTELLECTUAL PROPERTY. Any Material Intellectual Property or
any material license relating thereto shall be invalid or unenforceable in
whole or in part or shall for any reason not be in full force and effect
and enforceable by the Consolidated Parties or shall infringe the rights of
any other Person or any other adverse change in the Material Intellectual
Property rights of the Consolidated Parties
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shall occur and such event or condition, together with all other such
events or conditions, if any, could reasonably be expected to have a
Material Adverse Effect;
(j) ENVIRONMENTAL MATTERS. Either (i) any Consolidated Party
shall be liable, whether directly, indirectly through required
indemnification of any Person or otherwise, for the costs of investigation
and/or remediation of any Materials of Environmental Concern originating
from or affecting any property or properties, whether or not owned, leased
or operated by any Consolidated Party, which liability, together with all
other liabilities of the Consolidated Parties arising out of Materials of
Environmental Concern could reasonably be expected to exceed $250,000 in
the aggregate or require payments by the Consolidated Parties exceeding
$100,000 in any fiscal year of the Borrower or (ii) any Federal, state,
regional, local or other environmental regulatory agency or authority shall
commence an investigation or take any other action that, individually or in
the aggregate, could reasonably be expected to have a Material Adverse
Effect;
(k) CHANGE OF CONTROL. There shall occur any Change of Control;
(l) MATERIAL CONTRACTS. Any Material Contract shall be declared
by any Governmental Authority to be invalid or unenforceable in whole or in
part or shall for any other reason not be, or shall be asserted by any
Consolidated Party or any Person acting by or on behalf of any Consolidated
Party not to be, in full force and effect and enforceable in accordance
with its terms and such event or condition, together with all other such
events or conditions, if any, could reasonably be expected to have a
Material Adverse Effect;
(m) XXXXXXX BRIDGE AGREEMENT. There shall occur and be continuing
under the Xxxxxxx Bridge Agreement any Event of Default (as defined
therein);
(n) SUBORDINATED NOTE. There shall occur and be continuing under
the Subordinated Note any Event of Default (as defined therein); or
(o) SENIOR NOTE AGREEMENT. There shall occur and be continuing
under the Senior Note Agreement any Event of Default (as defined therein).
8.2 ACCELERATION; REMEDIES. Upon the occurrence of an Event of Default,
and at any time thereafter unless and until such Event of Default has been
waived by the requisite Lenders (pursuant to the voting requirements of Section
10.6) or cured to the satisfaction of the requisite Lenders (pursuant to the
voting requirements of Section 10.6), the Administrative Agent may, and upon the
request and direction of the Required Lenders shall (subject to Section 9.1), by
written notice to the Borrower, take any or all of the following actions
(without prejudice to the rights of the Administrative Agent or any Lender to
enforce its claims against the Credit Parties, except as otherwise specifically
provided for in this Agreement):
(a) TERMINATION OF COMMITMENTS. Declare the Commitments
terminated, whereupon the Commitments shall be immediately terminated.
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(b) ACCELERATION. Declare the unpaid principal of all Loans, any
reimbursement obligations arising from drawings under Letters of Credit,
all accrued interest in respect thereof, all accrued and unpaid Fees, all
other Credit Obligations and any and all other indebtedness or obligations
of any and every kind owing by any Credit Party to the Administrative Agent
and/or any of the Secured Parties under the Credit Documents to be due
whereupon the same shall be immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived.
(c) CASH COLLATERAL. Direct the Borrower to pay (and the Borrower
agrees that upon receipt of such notice, or upon the occurrence and during
the continuance of an Event of Default under Section 8.1(e), it will
immediately pay) to the Administrative Agent additional cash, to be held by
the Administrative Agent, in a cash collateral account pursuant to Section
2.2(l), in an amount equal to the aggregate amount of the outstanding LOC
Obligations (including the maximum aggregate amount which is, or at any
time thereafter may become, available to be drawn under all Letters of
Credit then outstanding) and terminate any Letter of Credit which may be
terminated in accordance with its terms.
(d) ENFORCEMENT OF RIGHTS. Enforce any and all rights and
interests created and existing under the Credit Documents, including all
rights and remedies existing under the Collateral Documents, all rights and
remedies against the Guarantors and all rights of set-off.
Notwithstanding the foregoing, (x) if an Event of Default specified in Section
8.1(e) shall occur, then the Commitments shall automatically terminate and all
Loans, all reimbursement obligations arising from drawings under Letters of
Credit, all accrued interest in respect thereof, all accrued and unpaid Fees,
all other Credit Obligations and any and all other indebtedness or obligations
owing to the Administrative Agent and/or any of the Secured Parties under the
Credit Documents automatically shall immediately become due and payable without
the giving of any notice or other action by the Administrative Agent or the
Lenders and (y) upon the request and at the direction of Lenders holding a
majority of the Revolving Credit Facility Obligations, the Administrative Agent
shall take the actions specified in Section 8.2(a) and/or 8.2(c).
8.3 EQUITABLE REMEDIES. In case any one or more of the covenants and/or
agreements set forth in this Agreement or any other Credit Document shall have
been breached by any Credit Party, then the Administrative Agent may proceed to
protect and enforce the Lenders' rights either by suit in equity and/or by
action at law, including an action for damages as a result of any such breach
and/or an action for specific performance of any such covenant or agreement
contained in this Agreement or such other Credit Document. Without limitation
of the foregoing, each of the Parent and the Borrower agrees that failure to
comply with any of the covenants contained herein will cause irreparable harm
and that specific performance shall be available in the event of any breach
thereof. The Administrative Agent acting pursuant to this paragraph shall be
indemnified by the Borrower against all liability, loss or damage, together with
all reasonable costs and expenses related
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thereto (including reasonable legal and accounting fees and expenses) in
accordance with Section 10.5.
SECTION 9
AGENCY PROVISIONS
9.1 APPOINTMENT, POWERS AND IMMUNITIES. Each Lender hereby irrevocably
appoints and authorizes the Administrative Agent to act as its administrative
agent under this Agreement and the other Credit Documents with such powers and
discretion as are specifically delegated to the Administrative Agent by the
terms of this Agreement and the other Credit Documents, together with such other
powers as are reasonably incidental thereto. The Administrative Agent (which
term as used in this sentence and in Section 9.5 and the first two sentences of
Section 9.6 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 the
other Credit Documents and shall not be a trustee or fiduciary for any Lender or
other Secured Party; (b) shall not be responsible to the Secured Parties for any
recital, statement, representation or warranty (whether written or oral) made in
or in connection with any Credit Document or any certificate or other document
referred to or provided for in, or received by any of them under, any Credit
Document, or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of any Credit Document, or any other document referred to or
provided for therein or for any failure by any Credit Party or any other Person
to perform any of its obligations thereunder; (c) shall not be responsible for
or have any duty to ascertain, inquire into or verify the performance or
observance of any covenants or agreements by any Credit Party or the
satisfaction of any condition or the use of the proceeds of the Loans or the use
of the Letters of Credit or the existence or possible existence of any Default
or Event of Default or to inspect the property (including the books and records)
of any Credit Party or any of its Subsidiaries or Affiliates; (d) shall not be
required to initiate or conduct any litigation or collection proceedings under
any Credit Document; and (e) shall not be responsible for any action taken or
omitted to be taken by it under or in connection with any Credit Document,
except for its own gross negligence or willful misconduct. The Administrative
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. Without limiting the generality of the foregoing, the
Administrative Agent is hereby expressly authorized to execute any and all
documents (including releases) with respect to the Collateral and the rights of
the Lenders with respect thereto, as contemplated by and in accordance with the
provisions of this Agreement and the Collateral Documents. The provisions of
this Section 9 are solely for the benefit of the Administrative Agent and the
Lenders and none of the Credit Parties shall have any rights as a third party
beneficiary of the provisions hereof. In performing its functions and duties
under this Agreement and the other Credit Documents, the Administrative Agent
shall act solely as agent of the Lenders and does not assume and shall not be
deemed to have assumed any obligation or relationship of agency or trust with or
for any Credit Party or any of their respective Affiliates.
9.2 RELIANCE BY AGENTS. The Agents shall be entitled to rely upon any
certification, notice, instrument, writing or other communication (including any
thereof by
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telephone or telecopy) believed by it to be genuine and correct and to have been
signed, sent or made by or on behalf of the proper Person or Persons, and upon
advice and statements of legal counsel (including counsel for any Credit Party),
independent accountants and other experts selected by the Administrative Agent.
The Administrative Agent may deem and treat the payee of any Note as the holder
thereof for all purposes hereof unless and until the Administrative Agent
receives and accepts an Assignment and Acceptance executed in accordance with
Section 10.3 hereof. As to any matters not expressly provided for by this
Agreement and the other Credit Documents, the Administrative 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 (or to the
extent specifically provided in Section 10.6, all the Lenders), and such
instructions shall be binding on all of the Lenders; PROVIDED, HOWEVER, that the
Administrative Agent shall not be required to take any action that exposes the
Administrative Agent to personal liability or that is contrary to any Credit
Document or applicable law or unless it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking any such action.
9.3 DEFAULTS. The Agents shall not be deemed to have knowledge or notice
of the occurrence of a Default or Event of Default unless the Administrative
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 Administrative Agent receives such a notice of
the occurrence of a Default or Event of Default, the Administrative Agent shall
give prompt notice thereof to the Lenders. The Administrative Agent shall
(subject to Section 9.2 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 Administrative Agent shall have received
such directions, the Administrative Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable in the best interests of
the Lenders.
9.4 RIGHTS AS LENDER. With respect to its Commitments and the Loans made
by them, each of NationsBank and CIBC (and any successor acting as
Administrative Agent or Documentation Agent, as the case may be,) 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 Administrative Agent or Documentation Agent, as the case may be, and the
term "Lender" or "Lenders" shall, unless the context otherwise indicates,
include the Administrative Agent or Documentation Agent, as the case may be, in
its individual capacity. NationsBank (and any successor acting as
Administrative Agent) and CIBC (and any successor acting as Documentation Agent)
and their respective Affiliates may (without having to account therefor to any
Lender) accept deposits from, lend money to, make investments in, provide
services to, and generally engage in any kind of lending, trust or other
business with any Credit Party or any of its Subsidiaries or Affiliates as if it
were not acting as Administrative Agent or Documentation Agent, as the case may
be, and NationsBank (and any successor acting as Administrative Agent) and its
Affiliates may accept fees and other consideration from any Credit Party or any
of its Subsidiaries or Affiliates for
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services in connection with this Agreement or otherwise without having to
account for the same to the Secured Parties.
9.5 INDEMNIFICATION. The Lenders agree to indemnify the Agents (to the
extent not reimbursed under Section 10.5 hereof, but without limiting the
obligations of the Borrower under Section 10.5) ratably in accordance with their
respective Commitments (or, if the Commitments have expired or been terminated,
in accordance with the respective principal amounts of outstanding Loans and
Participation Interests of the Lenders), for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including attorneys' fees) or disbursements of any kind and nature
whatsoever that may at any time (including at any time following the final
payment of all of the obligations of the Borrower hereunder and under the other
Credit Documents) be imposed on, incurred by or asserted against either the
Administrative Agent or the Documentation Agent (including by any Lender) in any
way relating to or arising out of any Credit Document or the transactions
contemplated thereby or any action taken or omitted by either the Administrative
Agent or the Documentation Agent under any Credit 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 Agents
promptly upon demand for their ratable share of any costs or expenses payable by
the Borrower under Section 10.5, to the extent that the Agents are not promptly
reimbursed for such costs and expenses by the Borrower.
9.6 NON-RELIANCE ON AGENTS AND OTHER LENDERS. Each Lender expressly
acknowledges that the Agents have not made any representations or warranties to
it and that no act by the Agents hereinafter taken, including any review of the
affairs of any Credit Party or any of their respective Affiliates, shall be
deemed to constitute any representation or warranty by the Agents to any Secured
Party. Each Lender agrees that it has, independently and without reliance on
the Agents or any other Lender, and based on such documents and information as
it has deemed appropriate, made its own credit analysis of the Consolidated
Parties and decision to enter into this Agreement and that it will,
independently and without reliance upon the Agents or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own analysis and decisions in taking or not taking
action under the Credit Documents. Except for notices, reports and other
documents and information expressly required to be furnished to the Lenders by
the Administrative Agent hereunder, the Agents shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the affairs, financial condition or business of any Credit Party or
any other Consolidated Party or any of their Affiliates that may come into the
possession of the Agents or any of their respective Affiliates.
9.7 RESIGNATION OF ADMINISTRATIVE AGENT. The Administrative 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 Administrative Agent. If no successor Administrative Agent shall
have been so appointed by the Required Lenders and shall have accepted such
appointment within thirty (30) days after the retiring Administrative Agent's
giving of notice of resignation, then the retiring Administrative Agent may, on
behalf of the Lenders, appoint a successor Administrative Agent which shall be a
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commercial bank organized under the laws of the United States of America having
combined capital and surplus of at least $100,000,000. Upon the acceptance of
any appointment as Administrative 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 Administrative Agent, and the
retiring Administrative Agent shall be discharged from its duties and
obligations hereunder. After any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the provisions of this Section 9 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 Administrative Agent.
SECTION 10
MISCELLANEOUS
10.1 NOTICES. Except as otherwise expressly provided herein, all notices
and other communications shall have been duly given and shall be effective (a)
when delivered, (b) when transmitted via telecopy (or other facsimile device) to
the number set forth below, (c) on the Business Day following the day on which
the same has been delivered prepaid to a reputable national overnight air
courier service or (d) on the third Business Day following the day on which the
same is sent by certified or registered mail, postage prepaid, in each case to
the respective parties at the address, in the case of the Borrower, the Parent
and the Administrative Agent, set forth below, and, in the case of the Lenders,
set forth on SCHEDULE 1.1C, or at such other address as such party may specify
by written notice to the other parties hereto:
if to the Borrower or the Parent,
JTM Industries, Inc.
000 Xxxxx 000 Xxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Attn: J. I. Everest, II
Telephone: (000) 000-0000
Telecopy: (000) 000-0000; and
if to the Administrative Agent,
NationsBank, N.A.
Independence Center, 15th Floor
NC1-001-15-04
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxx Xxxx, Agency Services
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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With a copy to
NationsBank, N. A.
000 Xxxxx Xxxxx Xxxxxx
XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
10.2 RIGHT OF SET-OFF. Upon the occurrence and during the continuance of
an Event of Default, each Lender (and each of its Affiliates) is authorized at
any time and from time to time, to the fullest extent permitted by law, without
presentment, demand, protest or other notice of any kind (all of which rights
being hereby expressly waived), to set-off and to appropriate and apply any and
all deposits (general or special, time or demand, provisional or final) and any
other indebtedness at any time held or owing by such Lender (including branches,
agencies or Affiliates of such Lender wherever located) to or for the credit or
the account of any Credit Party against obligations and liabilities of such
Person to such Lender (and its Affiliates) hereunder, under the Notes, under the
other Credit Documents or otherwise, irrespective of whether such Lender (or
Affiliate) shall have made any demand hereunder and although such obligations,
liabilities or claims, or any of them, may be contingent or unmatured. Any such
set-off shall be deemed to have been made immediately upon the occurrence of an
Event of Default even though such charge is made or entered on the books of such
Lender subsequent thereto. Each Lender agrees promptly to notify the Borrower
after any such set-off and application made by such Lender (or any of its
Affiliates); PROVIDED, HOWEVER, that the failure to give such notice shall not
affect the validity of such set-off and application. Any Person purchasing a
Participation Interest in the Loans and Commitments hereunder pursuant to
Section 3.13 or 10.3(d) may exercise all rights of setoff with respect to its
Participation Interest as fully as if such Person were a Lender hereunder. The
rights of each Lender (and its Affiliates) under this Section 10.2 are in
addition to (and not in limitation of) any other rights and remedies (including
other rights of set-off) that such Lender may have under applicable law or
otherwise.
10.3 BENEFIT OF AGREEMENT. (a) GENERALLY. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto; PROVIDED that neither the Parent
nor the Borrower may assign or transfer any of its interests and obligations
without prior written consent of all the Lenders (and any such purported
assignment or transfer without such consent shall be void); PROVIDED FURTHER
that the rights of each Lender to transfer, assign or grant participations in
its rights and/or obligations hereunder shall be limited as set forth in this
Section 10.3.
(b) ASSIGNMENTS. Each Lender may assign to one or more Eligible Assignees
all or a portion of its rights and obligations under this Agreement (including
all or a portion of its Loans, its Notes and its Commitments); PROVIDED,
HOWEVER, that
(i) each such assignment shall be to an Eligible Assignee;
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(ii) each such assignment shall be in an amount at least equal to
$5,000,000, except in the case of (A) an assignment to another Lender or
any Affiliate of a Lender or an assignment of all of a Lender's rights and
obligations under this Agreement or (B) the occurrence and continuation of
an Event of Default;
(iii) each such assignment by a Lender shall be of a constant, and
not varying, percentage of all of its rights and obligations in respect of
its Commitments under this Agreement and the other Credit Documents; and
(iv) the assignor and the assignee under such assignment shall
execute and deliver to the Administrative Agent for its acceptance an
Assignment and Acceptance, together with any Notes subject to such
assignment and a processing fee of $3,500.
Upon the later of (A) the execution, delivery and acceptance of such Assignment
and Acceptance and (B) the effective date specified in 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 under
this Agreement and the other Credit Documents and the assigning Lender shall, to
the extent of such assignment, relinquish its rights and be released from its
obligations under this Agreement and the other Credit Documents. Upon the
consummation of any assignment pursuant to this Section 10.3(b), the assignor,
the Administrative Agent and the Borrower shall make appropriate arrangements so
that, if required, new promissory notes reflecting such assignment are issued to
the assignor and the assignee in the amount of their respective interests and in
substantially the form of the original Notes (but with notation thereon that
such new Notes are given in substitution for and replacement of the original
Notes or any replacements thereof). 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 Administrative Agent certification as to exemption from
deduction or withholding of Taxes in accordance with Section 3.10.
(c) REGISTER. The Administrative Agent shall maintain at its address
referred to in SCHEDULE 1.1C a copy of each Assignment and Acceptance delivered
to and accepted by it and a register for the recordation of the names and
addresses of the Lenders and the Commitments of, and principal amounts and
Interest Periods of the Loans of each Type 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
Administrative 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. Upon its receipt of an Assignment and Acceptance executed by the
parties thereto, together with any Notes subject to such assignment and payment
of the processing fee, the Administrative Agent shall, if such Assignment and
Acceptance has been completed and is in accordance with the applicable
requirements hereof, (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) PARTICIPATIONS. 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
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(including all or a portion of its Commitments or 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 provisions contained in Sections 3.6, 3.9, 3.10 and 3.11 and
the right of set-off contained in Section 10.2 on the same basis as if it were a
Lender, (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 Loans, its Notes and its Commitments (except for
the obligations to such participant referred to in the foregoing clause (iii))
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 Loans or Notes
in which such participant is participating, extending any scheduled principal
payment date or scheduled interest payment date in respect of such Loans or
Notes in which such participant is participating, extending such Commitments in
which such participant is participating or, except as expressly provided in the
Credit Documents, releasing all or substantially all the Collateral from the
lien of the Collateral Documents or all or substantially all the Subsidiary
Guarantors from the Subsidiaries Guarantee Agreement) and (v) subparticipations
by any participant shall be prohibited and (vi) each such participation shall be
in an amount equal to at least $5,000,000, except in the case of a participation
to another Lender or any Affiliate of a Lender or a participation of all of a
Lender's rights and obligations under this Agreement.
(e) REGULATORY MATTERS. 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 Notes to any Federal Reserve Bank as collateral security
pursuant to Regulation A and any Operating Circular issued by such Federal
Reserve Bank. No such assignment shall release the assigning Lender from its
obligations hereunder.
(f) INFORMATION. Any Lender may furnish any information concerning any
Credit Party or any of its Subsidiaries or other Affiliates in the possession of
such Lender from time to time to assignees and participants (including
prospective assignees and participants), subject, however, to the provisions of
Section 10.14 hereof.
10.4 NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the part of
the Administrative Agent or any other Secured Party in exercising any right,
power or privilege hereunder or under any other Credit Document and no course of
dealing between the Administrative Agent or any other Secured Party and any of
the Credit Parties shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder or under any other
Credit Document preclude any other or further exercise thereof or the exercise
of any other right, power or privilege hereunder or thereunder. The rights and
remedies of the Administrative Agent and the other Secured Parties hereunder and
under the other Credit Documents are cumulative and not exclusive of any rights
or remedies which the Administrative Agent or any other Secured Party would
otherwise have at law or otherwise. No notice to or demand on any Credit Party
in any case shall entitle the Borrower or any other Credit Party to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of the Administrative Agent or the
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other Secured Parties to any other or further action in any circumstances
without notice or demand.
10.5 EXPENSES; INDEMNIFICATION. (a) The Borrower agrees to pay on demand
all reasonable costs and expenses of the Administrative Agent in connection with
the syndication, preparation, execution, delivery, administration, modification
and amendment of this Agreement, the other Credit Documents and the other
documents to be delivered hereunder, including the reasonable fees and expenses
of counsel for the Administrative Agent (including the cost of internal counsel,
to the extent not duplicative of work completed by external counsel to the
Administrative Agent) with respect thereto and with respect to advising the
Administrative Agent as to its rights and responsibilities under the Credit
Documents. The Borrower further agrees to pay on demand all reasonable costs
and expenses of the Administrative Agent and the Lenders, if any (including
reasonable attorneys' fees and expenses and the cost of internal counsel), in
connection with (i) the enforcement (whether through negotiations, legal
proceedings or otherwise) of the Credit Documents and the other documents to be
delivered hereunder and (ii) any claim in respect of any of the Credit
Obligations in any bankruptcy or insolvency proceeding relating to any Credit
Party.
(b) The Borrower agrees to indemnify and hold harmless the Administrative
Agent, the Documentation 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 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 in
connection with any investigation, litigation or proceeding or preparation of
defense in connection therewith) (i) the Credit Documents, any of the
transactions contemplated herein or the actual or proposed use of the proceeds
of the Loans or of the Letters of Credit or (ii) the presence or Release of any
Materials of Environmental Concern at, under or from any Property owned,
operated or leased at any time before or after the date hereof by any
Consolidated Party, or the failure by any Consolidated Party to comply with any
Environmental Law, 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 or from a violation of Environmental Laws with
respect to any real property or the presence, release, use, generation,
discharge, disposal, storage or similar action regarding Materials of
Environmental Concern with respect to any real property, which violation or
action first occurs after such real property is transferred to any Indemnified
Party or its successor or assignee by foreclosure sale, deed in lieu of
foreclosure or similar transfer (except to the extent actually caused by any
Consolidated Party). In the case of an investigation, litigation or other
proceeding to which the indemnity in this Section 10.5(b) applies, such
indemnity shall be effective whether or not such investigation, litigation or
proceeding is brought by any Credit Party, its 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 Borrower agrees not to assert any claim against the
Administrative Agent, the Documentation Agent, any Lender, any other Secured
Party, any of their Affiliates or any of their respective directors, officers,
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employees, attorneys, agents and advisers, on any theory of liability, for
special, indirect, consequential or punitive damages arising out of or otherwise
relating to the Credit Documents, any of the transactions contemplated herein or
the actual or proposed use of the proceeds of the Loans or of the Letters of
Credit.
10.6 AMENDMENTS, WAIVERS AND CONSENTS. Neither this Agreement nor any
other Credit Document nor any of the terms hereof or thereof may be amended,
modified or waived, unless such amendment, modification or waiver is in writing
entered into by, or approved in writing by, the Required Lenders, the Borrower
and the Parent, PROVIDED, HOWEVER, that no such amendment, modification or
waiver shall:
(a) extend the final maturity of any Loan or the time of payment of any
reimbursement obligation (or any portion thereof) arising from a drawing under a
Letter of Credit, without the prior written consent of each Lender holding such
Loan or a Participation Interest in such Letter of Credit;
(b) reduce the rate of interest applicable to any Credit Obligation (other
than as a result of waiving the applicability of any post-default increase in
interest rates), extend the time of payment of any interest thereon (other than
as a result of waiving any mandatory prepayment), reduce any Fees payable
hereunder or extend the time of payment of any Fees hereunder, without the prior
written consent of each Lender to whom such interest, Credit Obligation or Fee
is owed;
(c) reduce or waive the principal amount of any Loan or of any
reimbursement obligation (or any portion thereof) arising from a drawing under a
Letter of Credit, without the prior written consent of each Lender holding such
Loan or a Participation interest in such Letter of Credit;
(d) increase the Commitment of a Lender over the amount thereof in effect
or extend the date fixed for the termination of the Commitment of a Lender (it
being understood and agreed that a waiver of any Default or Event of Default or
of any mandatory reduction in the Commitments shall not constitute an increase
in the terms of any Commitment of any Lender), without the prior written consent
of such Lender;
(e) release all or substantially all of the Collateral from the Lien of
the Collateral Documents (except as expressly provided in the Credit Documents),
without the prior written consent of each Lender;
(f) release the Borrower or the Parent or, except as expressly provided in
the Credit Documents, all or substantially all of the Subsidiary Guarantors from
its or their obligations under the Credit Documents, without the prior written
consent of each Lender;
(g) consent to the assignment or transfer by the Borrower or the Parent
or, except as expressly provided in the Credit Documents, all or substantially
all the Subsidiary Guarantors of its or their rights and obligations under or in
respect of the Credit Documents, without the prior written consent of each
Lender;
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(h) amend, modify or waive any provision of this Section 10.6 or Section
3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 8.1(a), 10.2, 10.3, 10.5 or 10.9,
without the prior written consent of each Lender;
(i) reduce any percentage specified in, or otherwise modify, the
definition of Required Lenders, or otherwise change the percentage of the
Commitments, the percentage of the aggregate unpaid principal amount of the
Notes or the number of Lenders which shall be required for the Lenders or any of
them to take action under any provision of this Agreement or any other Credit
Document, without the prior written consent of each Lender;
(j) increase the total Commitments or otherwise increase the aggregate
principal amount of obligations which are secured by the Collateral, without the
prior written consent of each Lender;
(k) extend the time for, reduce the amount of or modify the manner of
application of proceeds of any mandatory prepayment required by Section
3.3(b)(ii), (iii), (iv) or (v), without the prior written consent of the
Required Lenders;
(l) effect any waiver of the conditions to funding any Revolving Loan or
to issuing any Letter of Credit, without the prior written consent of Lenders
having in the aggregate at least a majority of the outstanding principal amount
of Revolving Loans, LOC Obligations and Unused Revolving Credit Commitments;
(m) effect any waiver, amendment or modification of Section 7.8(a) with
respect to the subordination provisions of any Indebtedness, without the prior
written consent of each Lender;
(n) amend any provision of Section 9 or otherwise affect any rights or
duties of the Administrative Agent, without the prior written consent of the
Administrative Agent; or
(o) amend any provision of Section 2.2 or otherwise affect any rights or
duties of the Issuing Lender, without the prior written consent of the Issuing
Lender.
Notwithstanding the fact that the consent of all the Lenders is required in
certain circumstances as set forth above, (x) each Lender is entitled to vote as
such Lender sees fit on any bankruptcy reorganization plan that affects the
Loans, and each Lender acknowledges that the provisions of Section 1126(c) of
the Bankruptcy Code supersedes the unanimous consent provisions set forth herein
and (y) the Required Lenders may consent to allow a Credit Party to use cash
collateral in the context of a bankruptcy or insolvency proceeding. The various
requirements of this Section 10.6 are cumulative. Each Lender and each holder
of a Note shall be bound by any waiver, amendment or modification authorized by
this Section 10.6 regardless of whether its Note shall have been marked to make
reference thereto, and any consent by any Lender or holder of a Note pursuant to
this Section 1 0.6 shall bind any Person subsequently acquiring a Note from it,
whether or not such Note shall have been so marked.
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10.7 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall constitute one and the same instrument. It shall not be
necessary in making proof of this Agreement to produce or account for more than
one such counterpart for each of the parties hereto. Delivery by facsimile by
any of the parties hereto of an executed counterpart of this Agreement shall be
as effective as an original executed counterpart hereof and shall be deemed a
representation that an original executed counterpart hereof will be delivered,
but the failure to deliver a manually executed counterpart shall not affect the
validity, enforceability or binding effect of this Agreement.
10.8 HEADINGS. Section headings and the Table of Contents used herein are
for convenience of reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.
10.9 SURVIVAL. All indemnities set forth herein, including those set forth
in Sections 2.2(i), 3.6, 3.10, 3.11, 9.5 and 10.5, shall survive the execution
and delivery of this Agreement, the making of the Loans, the issuance of the
Letters of Credit, the repayment of the Loans, LOC Obligations and other
obligations under the Credit Documents, the termination of the Commitments
hereunder and the termination of this Agreement. All representations and
warranties made by the Parent and the Borrower herein shall survive delivery of
the Notes, the making of the Loans hereunder and the issuance of the Letters of
Credit hereunder.
10.10 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE. (a) THIS
AGREEMENT AND THE OTHER CREDIT DOCUMENTS (OTHER THAN LETTERS OF CREDIT AND OTHER
THAN AS EXPRESSLY SET FORTH IN SUCH OTHER CREDIT DOCUMENTS) AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
EACH LETTER OF CREDIT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE
WITH, THE LAWS OR RULES DESIGNATED IN SUCH LETTER OF CREDIT, OR IF NO SUCH LAWS
OR RULES ARE DESIGNATED, THE UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY
CREDITS (1993 REVISION), INTERNATIONAL CHAMBER OF COMMERCE, PUBLICATION NO. 500
AND, AS TO MATTERS NOT GOVERNED BY SUCH UNIFORM CUSTOMS, THE LAWS OF THE STATE
OF NEW YORK. Any legal action or proceeding with respect to this Agreement or
any other Credit Document may be brought in the courts of the State of New York
in New York County, or of the United States for the Southern District of New
York, and, by execution and delivery of this Agreement, each of the Parent and
the Borrower hereby irrevocably accepts for itself and in respect of its
property, generally and unconditionally, the nonexclusive jurisdiction of such
courts. Each of the Parent and the Borrower further irrevocably consents to the
service of process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to it at the address set forth for notices pursuant to Section
10.1, such service to become effective three (3) days after such mailing.
Nothing herein shall affect the right of the Administrative Agent or any Lender
to serve process in
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any other manner permitted by law or to commence legal proceedings or to
otherwise proceed against any Credit Party in any other jurisdiction.
(b) Each of the Parent and the Borrower hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of any of
the aforesaid actions or proceedings arising out of or in connection with this
Agreement or any other Credit Document brought in the courts referred to in
subsection (a) above and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding brought in
any such court has been brought in an inconvenient forum.
(c) TO THE EXTENT PERMITTED BY LAW, EACH OF THE ADMINISTRATIVE AGENT, THE
LENDERS, THE PARENT AND THE BORROWER HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
10.11 SEVERABILITY. If any provision of any of the Credit Documents
is determined to be illegal, invalid or unenforceable, such provision shall be
fully severable and the remaining provisions shall remain in full force and
effect and shall be construed without giving effect to the illegal, invalid or
unenforceable provisions. The parties hereto shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.
10.12 ENTIRETY. This Agreement, the other Credit Documents and the
Lender Hedging Agreements, if any, represent the entire agreement of the parties
hereto and thereto regarding the subject matter hereof and thereof and supersede
all prior agreements and understandings, oral or written, if any (including any
commitment letters or correspondence) relating to such subject matters. Nothing
in this Agreement or any other Credit Document, expressed or implied, is
intended to confer upon any party (other than the parties hereto and thereto and
the other Secured Parties) any rights, remedies, obligations or liabilities
under or by reason of this Agreement and the other Credit Documents.
10.13 BINDING EFFECT; TERMINATION. (a) This Agreement shall become
effective at such time on or after the Closing Date when it shall have been
executed by the Borrower, the Parent and the Administrative Agent, and the
Administrative Agent shall have received copies hereof (telefaxed or otherwise)
which, when taken together, bear the signatures of each Lender, and thereafter
this Agreement shall be binding upon and inure to the benefit of the Borrower,
the Parent, the Administrative Agent and each Lender and their respective
permitted successors and assigns.
(b) The term of this Agreement shall be until no Loans, LOC Obligations or
any other amounts payable hereunder or under any of the other Credit Documents
shall remain outstanding, no Letters of Credit shall be outstanding, all of the
Credit Obligations have been irrevocably satisfied in full and all of the
Commitments hereunder shall have expired or been terminated.
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10.14 CONFIDENTIALITY. Each of the Administrative Agents and the
Lenders (each, a "LENDING PARTY") agrees to keep confidential any information
furnished or made available to it by any Credit Party pursuant to this Agreement
that is marked confidential; PROVIDED that nothing herein shall prevent any
Lending Party from disclosing such information (a) to any other Lending Party or
any Affiliate of any Lending Party, or any officer, director, employee, agent or
advisor of any Lending Party or Affiliate of any Lending Party, (b) to any other
Person if reasonably incidental to the administration of the credit facilities
provided herein, (c) as required by any law, rule or regulation, (d) upon the
order of any court or administrative agency, (e) upon the request or demand of
any regulatory agency or authority, (f) that is or becomes available to the
public or that is or becomes available to any Lending Party other than as a
result of a disclosure by any Lending Party prohibited by this Agreement, (g) in
connection with any litigation to which such Lending Party or any of its
Affiliates may be a party, (h) to the extent necessary in connection with the
exercise of any remedy under this Agreement or any other Credit Document, (i)
subject to provisions substantially similar to those contained in this Section
10.14, to any actual or proposed participant or assignee and (j) to the extent
that the Borrower shall have consented in writing to such disclosure. Nothing
set forth in this Section 10.14 shall obligate the Administrative Agent or any
Lender to return any materials furnished by the Credit Parties.
10.15 SOURCE OF FUNDS. Each of the Lenders hereby represents and
warrants to the Borrower that at least one of the following statements is an
accurate representation as to the source of funds to be used by such Lender in
connection with the financing hereunder:
(a) no part of such funds constitutes assets allocated to any
separate account maintained by such Lender in which any employee benefit
plan (or its related trust) has any interest;
(b) to the extent that any part of such funds constitutes assets
allocated to any separate account maintained by such Lender, such Lender
has disclosed to the Borrower the name of each employee benefit plan whose
assets in such account exceed 10% of the total assets of such account as of
the date of such purchase (and, for purposes of this subsection (b), all
employee benefit plans maintained by the same employer or employee
organization are deemed to be a single plan);
(c) to the extent that any part of such funds constitutes assets
of an insurance company's general account, such insurance company has
complied with all of the requirements of the regulations issued under
Section 401(c)(1)(A) of ERISA; or
(d) such funds constitute assets of one or more specific benefit
plans which such Lender has identified in writing to the Borrower.
As used in this Section 10.15, the terms "employee benefit plan" and "separate
account" shall have the respective meanings assigned to such terms in Section 3
of ERISA.
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10.16 CONFLICT. To the extent that there is a conflict or
inconsistency between any provision hereof, on the one hand, and any provision
of any other Credit Document, on the other hand, this Agreement shall control.
[Signature Page to Follow]
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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this Agreement to be duly executed and delivered as of the date first above
written.
BORROWER: JTM INDUSTRIES, INC.,
a Texas corporation
By: /s/ J.I. Everest, II
------------------------------------
Name: J.I. Everest, II
----------------------------------
Title: Treasurer and CEO
---------------------------------
PARENT: INDUSTRIAL SERVICES GROUP, INC.,
a Delaware corporation
By: /s/ J.I. Everest, II
------------------------------------
Name: J.I. Everest, II
----------------------------------
Title: Treasurer and CEO
---------------------------------
LENDERS: NATIONSBANK, N. A.,
individually in its capacity as a
Lender and in its capacity as Administrative
gent and Issuing Lender
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxxx
----------------------------------
Title: Vice President
---------------------------------
CANADIAN IMPERIAL BANK OF
COMMERCE, as a Lender
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxx
----------------------------------
Title: Agent for CIBC
---------------------------------
