EXHIBIT 10.13
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$315,000,000
CREDIT AGREEMENT
among
ADVANCED GLASSFIBER YARNS LLC,
as Borrower,
ITS DOMESTIC SUBSIDIARIES
FROM TIME TO TIME PARTIES HERETO
as Guarantors,
THE LENDERS PARTIES HERETO
and
FIRST UNION NATIONAL BANK,
as Administrative Agent
Dated as of September 30, 1998
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TABLE OF CONTENTS
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Page
ARTICLE I DEFINITIONS................................................................. 1
Section 1.1 Defined Terms..................................................... 1
Section 1.2 Other Definitional Provisions..................................... 26
Section 1.3 Accounting Terms.................................................. 27
ARTICLE II THE LOANS; AMOUNT AND TERMS................................................ 27
Section 2.1 Revolving Loans................................................... 27
Section 2.2A Tranche A Term Loan.............................................. 29
Section 2.2B Tranche B Term Loan.............................................. 31
Section 2.3 Swingline Loan Subfacility........................................ 32
Section 2.4 Letter of Credit Subfacility...................................... 34
Section 2.5 Fees.............................................................. 37
Section 2.6 Commitment Reductions............................................. 38
Section 2.7 Prepayments....................................................... 38
Section 2.8 Minimum Principal Amount of Tranches.............................. 41
Section 2.9 Default Rate and Payment Dates.................................... 41
Section 2.10 Conversion Options............................................... 42
Section 2.11 Computation of Interest and Fees................................. 42
Section 2.12 Pro Rata Treatment and Payments.................................. 43
Section 2.13 Non-Receipt of Funds by the Agent................................ 43
Section 2.14 Inability to Determine Interest Rate............................. 44
Section 2.15 Illegality....................................................... 45
Section 2.16 Requirements of Law.............................................. 45
Section 2.17 Indemnity........................................................ 46
Section 2.18 Taxes............................................................ 47
Section 2.19 Indemnification; Nature of Issuing Lender's Duties............... 49
Section 2.20 Defaulting Lenders............................................... 50
ARTICLE III REPRESENTATIONS AND WARRANTIES............................................ 51
Section 3.1 Financial Condition............................................... 51
Section 3.2 No Change......................................................... 52
Section 3.3 Corporate Existence; Compliance with Law.......................... 52
Section 3.4 Corporate Power; Authorization; Enforceable Obligations........... 52
Section 3.5 No Legal Bar; No Default.......................................... 53
Section 3.6 No Material Litigation............................................ 53
Section 3.7 Investment Company Act............................................ 53
Section 3.8 Margin Regulations................................................ 53
Section 3.9 ERISA............................................................. 53
Section 3.10 Environmental Matters............................................ 54
Section 3.11 Purpose of Loans................................................. 55
Section 3.12 Subsidiaries..................................................... 55
Section 3.13 Ownership........................................................ 55
Section 3.14 Indebtedness..................................................... 55
Section 3.15 Taxes............................................................ 56
Section 3.16 Intellectual Property............................................ 56
Section 3.17 Solvency......................................................... 56
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Section 3.18 Investments.............................................................. 56
Section 3.19 Location of Collateral................................................... 56
Section 3.20 No Burdensome Restrictions............................................... 57
Section 3.21 Brokers'Fees............................................................. 57
Section 3.22 Labor Matters............................................................ 57
Section 3.23 Accuracy and Completeness of Information................................. 57
Section 3.24 Representations and Warranties from Acquisition Agreements............... 57
Section 3.25 Year 2000 Issue.......................................................... 58
Section 3.26 Entire Business.......................................................... 58
ARTICLE IV CONDITIONS PRECEDENT............................................................... 58
Section 4.1 Conditions to Closing Date and Initial Revolving Loans and Term Loans
made in connection with the Acquisition................................. 58
Section 4.2 Conditions to All Extensions of Credit.................................... 64
ARTICLE V AFFIRMATIVE COVENANTS............................................................... 65
Section 5.1 Financial Statements...................................................... 66
Section 5.2 Certificates; Other Information........................................... 67
Section 5.3 Payment of Obligations.................................................... 67
Section 5.4 Conduct of Business and Maintenance of Existence.......................... 68
Section 5.5 Maintenance of Property; Insurance........................................ 68
Section 5.6 Inspection of Property; Books and Records; Discussions.................... 69
Section 5.7 Notices................................................................... 69
Section 5.8 Environmental Laws........................................................ 70
Section 5.9 Financial Covenants....................................................... 71
Section 5.10 Additional Guarantors.................................................... 73
Section 5.11 Compliance with Law...................................................... 73
Section 5.12 Pledged Assets........................................................... 73
Section 5.13 Interest Rate Protection Agreements...................................... 74
Section 5.14 Year 2000 Compliance..................................................... 74
ARTICLE VI NEGATIVE COVENANTS................................................................. 74
Section 6.1 Indebtedness.............................................................. 74
Section 6.2 Liens..................................................................... 76
Section 6.3 Guaranty Obligations...................................................... 76
Section 6.4 Nature of Business........................................................ 76
Section 6.5 Consolidation, Merger, Sale or Purchase of Assets, etc.................... 76
Section 6.6 Advances, Investments and Loans........................................... 77
Section 6.7 Ownership of Subsidiaries; Restrictions................................... 78
Section 6.8 Fiscal Year; Organizational Documents; Material Contracts................. 78
Section 6.9 Limitation on Restricted Actions.......................................... 78
Section 6.10 Restricted Payments...................................................... 79
Section 6.11 Prepayments of Indebtedness, etc......................................... 79
Section 6.12 Sale Leasebacks.......................................................... 80
Section 6.13 No Further Negative Pledges.............................................. 80
ARTICLE VII EVENTS OF DEFAULT................................................................. 80
Section 7.1 Events of Default......................................................... 80
Section 7.2 Acceleration; Remedies.................................................... 83
ARTICLE VIII THE AGENT........................................................................ 84
Section 8.1 Appointment............................................................... 84
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Section 8.2 Delegation of Duties.................................................. 84
Section 8.3 Exculpatory Provisions................................................ 84
Section 8.4 Reliance by Agent..................................................... 85
Section 8.5 Notice of Default..................................................... 85
Section 8.6 Non-Reliance on Agent and Other Lenders............................... 85
Section 8.7 Indemnification....................................................... 86
Section 8.8 Agent in Its Individual Capacity...................................... 86
Section 8.9 Successor Agent....................................................... 86
ARTICLE IX MISCELLANEOUS.................................................................. 87
Section 9.1 Amendments, Waivers and Release of Collateral......................... 87
Section 9.2 Notices............................................................... 89
Section 9.3 No Waiver; Cumulative Remedies........................................ 90
Section 9.4 Survival of Representations and Warranties............................ 90
Section 9.5 Payment of Expenses and Taxes......................................... 90
Section 9.6 Successors and Assigns; Participations; Purchasing Lenders............ 91
Section 9.7 Adjustments; Set-off.................................................. 94
Section 9.8 Table of Contents and Section Headings................................ 95
Section 9.9 Counterparts.......................................................... 95
Section 9.10 Effectiveness........................................................ 95
Section 9.11 Severability......................................................... 95
Section 9.12 Integration.......................................................... 95
Section 9.13 Governing Law........................................................ 95
Section 9.14 Consent to Jurisdiction and Service of Process....................... 96
Section 9.15 Arbitration.......................................................... 96
Section 9.16 Confidentiality...................................................... 97
Section 9.17 Acknowledgments...................................................... 98
Section 9.18 Waivers of Jury Trial................................................ 98
ARTICLE X GUARANTY........................................................................ 98
Section 10.1 The Guaranty......................................................... 98
Section 10.2 Bankruptcy........................................................... 99
Section 10.3 Nature of Liability.................................................. 99
Section 10.4 Independent Obligation............................................... 100
Section 10.5 Authorization........................................................ 100
Section 10.6 Reliance............................................................. 100
Section 10.7 Waiver............................................................... 100
Section 10.8 Limitation on Enforcement............................................ 102
Section 10.9 Confirmation of Payment.............................................. 102
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SCHEDULES
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Schedule 1.1(a) Account Designation Letter
Schedule 1.1(a)(i) Acquisition Expenses
Schedule 1.1(b) Joint Venture Contracts
Schedule 1.1(c) Liens
Schedule 2.1(a) Schedule of Lenders and Commitments
Schedule 2.1(b)(i) Form of Notice of Borrowing
Schedule 2.1(e) Form of Revolving Note
Schedule 2.2A(d) Form of Tranche A Term Note
Schedule 2.2B(d) Form of Tranche B Term Note
Schedule 2.3(d) Form of Swingline Note
Schedule 2.10 Form of Notice of Conversion/Extension
Schedule 2.18 Section 2.18 Certificate
Schedule 3.6 Litigation
Schedule 3.9 ERISA
Schedule 3.10 Environmental Matters
Schedule 3.12 Subsidiaries
Schedule 3.16 Intellectual Property
Schedule 3.19(a) Location of Real Property
Schedule 3.19(b) Location of Collateral
Schedule 3.19(c) Chief Executive Offices
Schedule 3.22 Labor Matters
Schedule 4.1(b) Form of Secretary's Certificate
Schedule 4.1(i-A) Form of Solvency Certificate
Schedule 5.5(b) Insurance
Schedule 5.10 Form of Joinder Agreement
Schedule 6.1(b) Indebtedness
Schedule 9.2 Schedule of Lenders' Lending Offices
Schedule 9.6(c) Form of Commitment Transfer Supplement
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CONFORMED COPY
CREDIT AGREEMENT, dated as of September 30, 1998, among ADVANCED GLASSFIBER
YARNS LLC, a Delaware limited liability company (the "Borrower"), those Domestic
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Subsidiaries of the Borrower identified as a "Guarantor" on the signature pages
hereto and such other Domestic Subsidiaries of the Borrower as may from time to
time become a party hereto (collectively, the "Guarantors"), the several banks
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and other financial institutions as may from time to time become parties to this
Agreement (collectively, the "Lenders"; and individually, a "Lender"), and FIRST
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UNION NATIONAL BANK, a national banking association, as agent for the Lenders
hereunder (in such capacity, the "Agent").
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W I T N E S S E T H:
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WHEREAS, the Borrower has requested that the Lenders make loans and other
financial accommodations to the Borrower in the amount of up to $315,000,000, as
more particularly described herein;
WHEREAS, the Lenders have agreed to make such loans and other financial
accommodations to the Borrower on the terms and conditions contained herein;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINED TERMS.
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As used in this Agreement, terms defined in the preamble to this Agreement
have the meanings therein indicated, and the following terms have the following
meanings:
"Account Designation Letter" shall mean the Notice of Account Designation
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Letter dated the Closing Date from the Borrower to the Agent substantially in
the form attached hereto as Schedule 1.1(a).
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"Acquired Business" shall mean the glass yarn and specialty materials
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business of Xxxxx Corning and all assets and liabilities related thereto
contributed to the Borrower pursuant to the Acquisition Documents.
"Acquisition Agreements" shall mean (i) the LLC Interest Sale and Purchase
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Agreement (the "LLC Purchase Agreement"), dated as of July 31, 1998, among Xxxxx
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Corning, the Borrower, and Glass Holdings, (ii) the Amended and Restated Asset
Contribution Agreement, dated as of July 31, 1998, between Xxxxx Corning and the
Borrower, (iii) the NVOC Asset
Purchase Agreement, dated as of the Closing Date, between N.V. Xxxxx Corning
S.A., a Belgian corporation, and the Borrower, (iv) the OCC Asset Purchase
Agreement, dated as of the Closing Date, between Xxxxx-Xxxxxxx Canada Inc., a
Canadian corporation, and the Borrower, as the same may from time to time be
amended, supplemented or otherwise modified in accordance with the terms hereof
and thereof.
"Acquisition Documents" shall mean the Acquisition Agreements, including
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the exhibits and schedules thereto, and all agreements, documents and
instruments executed and delivered pursuant thereto or in connection therewith.
"Acquisition" shall mean the purchases, contributions and other
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acquisitions of assets contemplated by the Acquisition Documents.
"Additional Credit Party" shall mean each Person that becomes a Guarantor
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by execution of a Joinder Agreement in accordance with Section 5.10.
"Affiliate" shall mean as to any Person, any other Person (excluding any
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Subsidiary) which, directly or indirectly, is in control of, is controlled by,
or is under common control with, such Person. For purposes of this definition,
a Person shall be deemed to be "controlled by" a Person if such Person
possesses, directly or indirectly, power either (a) to vote 10% or more of the
securities having ordinary voting power for the election of directors of such
Person or (b) to direct or cause the direction of the management and policies of
such Person whether by contract or otherwise.
"Agent" shall have the meaning set forth in the first paragraph of this
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Agreement and any successors in such capacity.
"Agreement" shall mean this Credit Agreement, as amended, modified or
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supplemented from time to time in accordance with its terms.
"Alternate Base Rate" shall mean, for any day, a rate per annum equal to
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the greater of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. For purposes hereof:
"Prime Rate" shall mean, at any time, the rate of interest per annum publicly
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announced from time to time by First Union at its principal office in Charlotte,
North Carolina as its prime rate. Each change in the Prime Rate shall be
effective as of the opening of business on the day such change in the Prime Rate
occurs. The parties hereto acknowledge that the rate announced publicly by First
Union as its Prime Rate is an index or base rate and shall not necessarily be
its lowest or best rate charged to its customers or other banks; and "Federal
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Funds Effective Rate" shall mean, for any day, the weighted average of the rates
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on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published on the next succeeding
Business Day by the Federal Reserve Bank of New York, or, if such rate is not so
published on the next succeeding Business Day, the average of the quotations for
the day of such transactions received by the Agent from three federal funds
brokers of recognized standing selected by it. If for any reason the Agent shall
have determined (which determination shall be conclusive in the absence of
manifest error) that it is unable to ascertain the Federal Funds Effective Rate,
for any reason, including the inability or
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failure of the Agent to obtain sufficient quotations in accordance with the
terms thereof, the Alternate Base Rate shall be determined without regard to
clause (b) of the first sentence of this definition, as appropriate, until the
circumstances giving rise to such inability no longer exist. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective on the opening of business on the date of such
change.
"Alternate Base Rate Loans" shall mean Loans that bear interest at an
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interest rate based on the Alternate Base Rate.
"Applicable Percentage" shall mean, for any day, the rate per annum set
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forth below opposite the applicable Level then in effect, it being understood
that the Applicable Percentage for (i) Revolving Loans which are Alternate Base
Rate Loans shall be the percentage set forth under the column "Alternate Base
Rate Margin for Revolving Loans", (ii) Revolving Loans which are LIBOR Rate
Loans shall be the percentage set forth under the column "LIBOR Rate Margin for
Revolving Loans and Letter of Credit Fee", (iii) the Commitment Fee shall be the
percentage set forth under the column "Commitment Fee", (iv) Tranche A Term
Loans which are Alternate Base Rate Loans shall be the percentage set forth
under the column "Alternate Base Rate Margin for Tranche A Term Loans", (v)
Tranche A Term Loans which are LIBOR Rate Loans shall be the percentage set
forth under the column "LIBOR Rate Margin for Tranche A Term Loans", (vi)
Tranche B Term Loans which are Alternate Base Rate Loans shall be the percentage
set forth under the column "Alternate Base Rate Margin for Tranche B Term
Loans", (vii) Tranche B Term Loans which are LIBOR Rate Loans shall be the
percentage set forth under the column "LIBOR Rate Margin for Tranche B Term
Loans" and (viii) the Letter of Credit Fee shall be the percentage set forth
under the column "LIBOR Rate Margin for Revolving Loans and Letter of Credit
Fee":
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LIBOR Rate
Alternate Margin for
Base Rate Revolving Loans, Alternate
Margin for Tranche A Term Base Rate LIBOR Rate
Revolving Loans Margin for Margin for
Leverage Tranche A and Letter of Commitment Tranche B Tranche B
Level Ratio Term Loans Credit Fee Fee Term Loans Term Loans
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I greater than or equal to
5.0 to 1.0 1.75% 3.00% 0.50% 2.50% 3.75%
II greater than or equal to
4.5 to 1.0 but less than 1.50% 2.75% 0.50% 2.25% 3.50%
5.0 to 1.0
III greater than or equal to
4.0 to 1.0 but less than 1.25% 2.50% 0.50% 2.25% 3.50%
4.5 to 1.0
IV greater than or equal to
3.5 to 1.0 but less than 1.00% 2.25% 0.50% 2.25% 3.50%
4.0 to 1.0
V greater than or equal to
3.0 to 1.0 but less than 0.75% 2.00% 0.375% 2.25% 3.50%
3.5 to 1.0
VI less than 3.0 to 1.0 0.50% 1.75% 0.375% 2.25% 3.50%
The Applicable Percentage shall, in each case, be determined and adjusted
quarterly on the date five (5) Business Days after the date on which the Agent
has received from the Borrower the quarterly financial information and
certifications required to be delivered to the Agent and the Lenders in
accordance with the provisions of Sections 5.1(b) and 5.2(b) (each an "Interest
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Determination Date"). Such Applicable Percentage shall be effective from such
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Interest Determination Date until the next such Interest Determination Date.
The initial Applicable Percentages on the Closing Date shall be based on Level
II. Subsequent to the Closing Date, the Applicable Percentages shall not be
less than the interest rates for Level II until the first Interest Determination
Date occurring after March 31, 1999. After the Closing Date, if the Borrower
shall fail to provide the quarterly financial information and certifications in
accordance with the provisions of Sections 5.1(b) and 5.2(b), the Applicable
Percentages from such Interest Determination Date shall, on the date five (5)
Business Days after the date by which the Borrower was so required to provide
such financial information and certifications to the Agent and the Lenders, be
based on Level I until such time as such information and certifications are
provided, whereupon the Level shall be determined by the then current Leverage
Ratio. For purposes hereof, the Leverage Ratio shall be determined in
accordance with Section 5.9(a).
"Asset Disposition" shall mean the disposition of any or all of the assets
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(including, without limitation, the Capital Stock of a Subsidiary or any
ownership interest in a joint venture) of the Borrower or any Subsidiary whether
by sale, lease, transfer or otherwise. The term "Asset Disposition" (i) shall
include any "Asset Sale" under the Subordinated Debt Documentation and (ii)
shall not include (a) Specified Sales, (b) the sale, lease or transfer of assets
permitted by Section 6.5(a)(iii) or (iv) hereof, or (c) any Equity Issuance.
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"Bankruptcy Code" shall mean the Bankruptcy Code in Title 11 of the United
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States Code, as amended, modified, succeeded or replaced from time to time.
"BGF" shall mean BGF Industries, Inc., a Delaware corporation and wholly
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owned Subsidiary of Glass Holdings.
"Borrower" shall have the meaning set forth in the first paragraph of this
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Agreement.
"Borrowing Date" shall mean, in respect of any Loan, the date such Loan is
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made.
"Business" shall have the meaning set forth in Section 3.10.
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"Business Day" shall mean a day other than a Saturday, Sunday or other day
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on which commercial banks in Charlotte, North Carolina or New York, New York are
authorized or required by law to close; provided, however, that when used in
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connection with a rate determination, borrowing or payment in respect of a LIBOR
Rate Loan, the term "Business Day" shall also exclude any day on which banks in
London, England are not open for dealings in Dollar deposits in the London
interbank market.
"Capital Expenditures" shall mean all expenditures which in accordance with
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GAAP would be classified as capital expenditures, including without limitation,
Capital Lease Obligations.
"Capital Lease" shall mean any lease of property, real or personal, the
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obligations with respect to which are required to be capitalized on a balance
sheet of the lessee in accordance with GAAP.
"Capital Lease Obligations" shall mean the capitalized lease obligations
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relating to a Capital Lease determined in accordance with GAAP.
"Capital Stock" shall mean (i) in the case of a corporation, capital stock,
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(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
capital stock, (iii) in the case of a partnership, partnership interests
(whether general or limited), (iv) in the case of a limited liability company,
membership interests and (v) any other interest or participation that confers on
a Person the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
"Cash Equivalents" shall mean (i) securities issued or directly and fully
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guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than twelve months from the date of acquisition ("Government Obligations"), (ii)
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U.S. dollar denominated (or foreign currency fully hedged) time deposits,
certificates of deposit, Eurodollar time deposits and Eurodollar certificates of
deposit of (y) any domestic commercial bank of recognized standing having
capital and surplus in excess of $250,000,000 or (z) 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
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being an "Approved Bank"), in each case with maturities of not more than 364
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days from the date of acquisition, (iii) commercial paper and variable or fixed
rate notes issued by any Approved Bank (or by the parent company thereof) or any
variable rate notes issued by, or guaranteed by any domestic corporation rated
A-1 (or the equivalent thereof) or better by S&P or P-1 (or the equivalent
thereof) or better by Moody's and maturing within six months of the date of
acquisition, (iv) repurchase agreements with a bank or trust company (including
a Lender) or a 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, (v) obligations of any state of the United States or
any political subdivision thereof for the payment of the principal and
redemption price of and interest on which there shall have been irrevocably
deposited Government Obligations maturing as to principal and interest at times
and in amounts sufficient to provide such payment, and (vi) auction preferred
stock rated in the highest short-term credit rating category by S&P or Moody's.
"Closing Date" shall mean the date of this Agreement.
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"Code" shall mean the Internal Revenue Code of 1986, as amended from time
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to time.
"Collateral" shall mean a collective reference to the collateral which is
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identified in, and at any time will be covered by, the Security Documents.
"Collateral Assignment of Contract Rights" shall mean the Collateral
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Assignment of Contract Rights dated as of the Closing Date between the Borrower
and the Agent, as amended, modified or supplemented from time to time in
accordance with its terms.
"Commitment" shall mean the Revolving Commitment, the LOC Commitment, the
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Swingline Commitment, the Tranche A Term Loan Commitment and the Tranche B Term
Loan Commitment, individually or collectively, as appropriate.
"Commitment Fee" shall have the meaning set forth in Section 2.5(a).
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"Commitment Percentage" shall mean the Revolving Commitment Percentage, the
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LOC Commitment Percentage, the Tranche A Term Loan Commitment Percentage and/or
the Tranche B Term Loan Commitment Percentage, as appropriate.
"Commitment Period" shall mean the period from and including the Closing
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Date to but not including the Revolving Commitment Termination Date.
"Commitment Transfer Supplement" shall mean a Commitment Transfer
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Supplement, substantially in the form of Schedule 9.6(c).
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"Commonly Controlled Entity" shall mean an entity, whether or not
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incorporated, which is under common control with the Borrower within the meaning
of Section 4001 of ERISA or is part of a group which includes the Borrower and
which is treated as a single employer under Section 414 of the Code.
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"Consolidated Cash Tax Payments" shall mean, for any period, the aggregate
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of all taxes of the Borrower and its Subsidiaries on a consolidated basis
determined in accordance with GAAP applied on a consistent basis and all
distributions made to the LLC Members by the Borrower for the payment of income
taxes, for such period, to the extent the same are paid in cash during such
period. The applicable period shall be for the four consecutive quarters ending
as of the date of computation.
"Consolidated EBITDA" shall mean, for any period, Consolidated Net Income
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plus the sum of (i) Consolidated Interest Expense plus interest expense not
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payable in cash and amortization of debt discount and premium, for such period,
plus, to the extent the following items are deducted in calculating Consolidated
Net Income, (ii) all provisions for any Federal, state, local and foreign
income, value added, ad valorem and similar taxes for such period, plus (iii)
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depreciation, amortization and nonrecurring noncash charges for such period,
plus (iv) losses (or minus gains) on the sale or disposition of assets outside
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the ordinary course of business for such period, plus (v) restructuring charges
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or other non-recurring items or expenses incurred in connection with the
Acquisition (A) up to the amounts and for the fiscal quarters as set forth on
Schedule 1.1(a)(i) and (B) as agreed to by the Agent up to an aggregate amount
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not to exceed $2,000,000 for the fiscal quarters ending on or prior to September
30, 1999, for such period, of the Borrower and its Subsidiaries on a
consolidated basis as determined in accordance with GAAP applied on a consistent
basis. Except as otherwise specified, the applicable period shall be for the
four consecutive quarters ending as of the date of determination.
"Consolidated Fixed Charges" shall mean, for any period, the sum of (i)
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Consolidated Interest Expense for such period plus (ii) Consolidated Scheduled
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Funded Debt Payments for the next four fiscal quarters following the end of such
period plus (iii) consolidated Capital Expenditures (in excess of $10,000,000)
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for the four fiscal quarters most recently ending (without duplication of items
in clause (ii)) plus (iv) Consolidated Cash Tax Payments for such period of the
Borrower and its Subsidiaries on a consolidated basis determined in accordance
with GAAP applied on a consistent basis. Except as otherwise specified, the
applicable period shall be for the four consecutive quarters ending as of the
date of computation. For purposes of the definition of "Consolidated Fixed
Charges", investments in Foreign Subsidiaries shall be deemed Capital
Expenditures described in clause (iii) above.
"Consolidated Funded Debt" shall mean, on any date of calculation, Funded
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Debt of the Borrower and its Subsidiaries on a consolidated basis.
"Consolidated Interest Expense" shall mean, for any period, all interest
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expense (excluding interest expense not payable in cash and amortization of debt
discount and premium), including the interest component under Capital Leases for
such period of the Borrower and its Subsidiaries on a consolidated basis
determined in accordance with GAAP applied on a consistent basis. Except as
otherwise specified, the applicable period shall be for the four consecutive
quarters ending as of the date of computation.
"Consolidated Net Income" shall mean, for any period, the net income
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(excluding extraordinary items) of the Borrower and its Subsidiaries on a
consolidated basis determined in accordance with GAAP applied on a consistent
basis for such period. Except as otherwise
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specified, the applicable period shall be for the four consecutive quarters
ending as of the date of computation.
"Consolidated Net Worth" shall mean total stockholders' equity for the
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Borrower and its Subsidiaries on a consolidated basis as determined at a
particular date in accordance with GAAP applied on a consistent basis.
"Consolidated Scheduled Funded Debt Payments" shall mean, on any date of
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determination, with respect to the Borrower and its Subsidiaries on a
consolidated basis, the sum of all scheduled payments of principal on
Consolidated Funded Debt to be made (including the principal component of
payments due on Capital Leases); it being understood that scheduled payments on
Consolidated Funded Debt shall not include optional prepayments or the mandatory
prepayments required pursuant to Section 2.7.
"Continuing Director" shall have the meaning set forth in Section 7.1(h).
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"Contractual Obligation" shall mean, as to any Person, any provision of any
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security issued by such Person or of any agreement, instrument or undertaking to
which such Person is a party or by which it or any of its property is bound.
"Credit Documents" shall mean this Agreement, each of the Notes, any
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Joinder Agreement, the Letters of Credit, LOC Documents and the Security
Documents.
"Credit Party" shall mean any of the Borrower or the Guarantors.
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"Credit Party Obligations" shall mean, without duplication, (i) all of the
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obligations of the Credit Parties to the Lenders (including the Issuing Lender)
and the Agent, whenever arising, under this Agreement, the Notes or any of the
other Credit Documents (including, but not limited to, any interest accruing
after the occurrence of a filing of a petition of bankruptcy under the
Bankruptcy Code with respect to any Credit Party, regardless of whether such
interest is an allowed claim under the Bankruptcy Code) and (ii) all liabilities
and obligations, whenever arising, owing from the Borrower or any of its
Subsidiaries to any Lender, or any Affiliate of a Lender, arising under any
Hedging Agreement (if and only if the Lender and the Borrower expressly provide
in the documents evidencing any such Hedge Agreement that such liabilities and
obligations shall be classified as "Credit Party Obligations" hereunder).
"Debt Issuance" shall mean the issuance of any Indebtedness for borrowed
-------------
money by the Borrower or any of its Subsidiaries (excluding any Equity Issuance
or any Indebtedness of the Borrower and its Subsidiaries permitted to be
incurred pursuant to Section 6.1 hereof).
"Default" shall mean any of the events specified in Section 7.1, whether or
-------
not any requirement for the giving of notice or the lapse of time, or both, or
any other condition, has been satisfied.
"Default Rate" shall have the meaning set forth in Section 2.9(b).
------------
-8-
"Defaulting Lender" shall mean, at any time, any Lender that, at such time
-----------------
(a) has failed to make a Loan required pursuant to the term of this Credit
Agreement, including the funding of a Participation Interest in accordance with
the terms hereof, (b) has failed to pay to the Agent or any Lender an amount
owed by such Lender pursuant to the terms of this Credit Agreement, (c) has been
deemed insolvent or has become subject to a bankruptcy or insolvency proceeding
or to a receiver, trustee or similar official or (d) has failed to perform any
of its obligations under this Agreement or any other Credit Document within the
time specified herein or therein or, if no time is so specified, within 5
Business Days of notice by the Agent of such failure to perform.
"Dollars" and "$" shall mean dollars in lawful currency of the United
------- -
States of America.
"Domestic Lending Office" shall mean, initially, the office of each Lender
-----------------------
designated as such Lender's Domestic Lending Office shown on Schedule 9.2; and
------------
thereafter, such other office of such Lender as such Lender may from time to
time specify to the Agent and the Borrower as the office of such Lender at which
Alternate Base Rate Loans of such Lender are to be made.
"Domestic Subsidiary" shall mean any Subsidiary that is organized and
-------------------
existing under the laws of the United States or any state or commonwealth
thereof or under the laws of the District of Columbia.
"Eligible Assignee" shall mean (i) a Lender; (ii) any Affiliate of a Lender
-----------------
or any fund that invests in bank loans and is managed by an investment advisor
to a Lender; and (iii) any bank, financial institution, finance company,
investment fund, insurance company, or other lending entity having capital and
surplus in excess of $100,000,000
"Environmental Laws" shall mean any and all applicable foreign, Federal,
------------------
state, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental Authority or other
Requirement of Law (including common law) regulating, relating to or imposing
liability or standards of conduct concerning protection of human health or the
environment, as are now or may at any time be in effect during the term of this
Agreement.
"Equity Issuance" shall mean any issuance by the Borrower or any Subsidiary
---------------
to any Person which is not a Credit Party of (a) shares of its Capital Stock,
(b) any shares of its Capital Stock pursuant to the exercise of options or
warrants or (c) any shares of its Capital Stock pursuant to the conversion of
any debt securities to equity. The term "Equity Issuance" shall not include any
Asset Disposition, any Debt Issuance or the issuance of common stock of the
Borrower's Subsidiaries to its officers, directors or employees in connection
with stock offering plans and other benefit plans of such Subsidiaries.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
-----
amended from time to time.
"Eurodollar Reserve Percentage" shall mean for any day, the percentage
-----------------------------
(expressed as a decimal and rounded upwards, if necessary, to the next higher
1/100th of 1%) which is in effect for such day as prescribed by the Federal
Reserve Board (or any successor) for determining the maximum reserve requirement
(including without limitation any basic, supplemental or emergency
-9-
reserves) in respect of Eurocurrency liabilities, as defined in Regulation D of
such Board as in effect from time to time, or any similar category of
liabilities for a member bank of the Federal Reserve System in New York City.
"Event of Default" shall mean any of the events specified in Section 7.1;
----------------
provided, however, that any requirement for the giving of notice or the lapse of
-------- -------
time, or both, or any other condition, has been satisfied.
"Excess Cash Flow" shall mean, with respect to any fiscal year period of
----------------
the Borrower and its Subsidiaries on a consolidated basis, an amount equal to
(a) Consolidated EBITDA for such period minus (b) consolidated Capital
Expenditures for such period minus (c) Consolidated Interest Expense for such
-----
period minus (d) Consolidated Cash Tax Payments paid during such period minus
----- -----
(e) Consolidated Scheduled Funded Debt Payments made during such period plus (f)
----
Net Cash Proceeds of Asset Dispositions outside the ordinary course of business
except to the extent such Net Cash Proceeds are used to prepay the Loans
pursuant to Section 2.7(b)(iii).
"Extension of Credit" shall mean, as to any Lender, the making of a Loan by
-------------------
such Lender or the issuance of, or participation in, a Letter of Credit by such
Lender.
"Federal Funds Effective Rate" shall have the meaning set forth in the
----------------------------
definition of "Alternate Base Rate".
"Fee Letter" shall mean the letter agreement dated July 31, 1998 addressed
----------
to BGF and Xxxxx Corning from the Agent, as amended, modified or otherwise
supplemented.
"First Union" shall mean First Union National Bank, a national banking
-----------
association.
"Fixed Charge Coverage Ratio" shall mean the ratio of (i) Consolidated
---------------------------
EBITDA to (ii) Consolidated Fixed Charges.
"Foreign Subsidiary" shall mean any Subsidiary that is not a Domestic
------------------
Subsidiary.
"FQ1 Financials" shall mean the consolidated statements of income and of
--------------
cash flows of the Acquired Business for the first fiscal quarter of 1998,
reviewed by Xxxxxx Xxxxxxxx & Co. and prepared in accordance with the
assumptions and methodologies used in preparation of the annual audited
financial statements of the Acquired Business for the fiscal year ended 1997 and
giving effect to the Acquisition as if it had occurred on January 1, 1998 and
taking into account expense adjustments, as applicable, for selling, general and
administrative expenses and for expenses incurred pursuant to the Joint Venture
Contracts.
"FQ2 Financials" shall mean the consolidated statements of income and of
--------------
cash flows of the Acquired Business for the second fiscal quarter of 1998,
reviewed by Xxxxxx Xxxxxxxx & Co. and prepared in accordance with the
assumptions and methodologies used in preparation of the FQ1 Financials.
-10-
"FQ3 Financials" shall mean the consolidated statements of income and of
--------------
cash flows of the Acquired Business for the third fiscal quarter of 1998,
reviewed by Price Waterhouse Coopers and prepared in accordance with the
assumptions and methodologies used in preparation of the FQ1 Financials and FQ2
Financials.
"Funded Debt" 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 (m) of the definition of
"Indebtedness" set forth in this Section 1.1, (b) all Funded Debt of others of
the type referred to in clause (a) above secured by (or for which the holder of
such Funded Debt has an existing right, contingent or otherwise, to be secured
by) any Lien on, or payable out of the proceeds of production from, Property
owned or acquired by such Person, whether or not the obligations secured thereby
have been assumed, the amount of such Funded Debt being deemed to be the lesser
of the fair market value of such Property or the amount of Funded Debt so
secured, (c) all Guaranty Obligations of such Person with respect to Funded Debt
of the type referred to in clause (a) above of another Person and (d) Funded
Debt of the type referred to in clause (a) above of any partnership or
unincorporated joint venture in which such Person is legally obligated but only
to the extent such Person is obligated therefor.
"GAAP" shall mean generally accepted accounting principles in effect in the
----
United States of America applied on a consistent basis, subject, however, in the
------- -------
case of determination of compliance with the financial covenants set out in
Section 5.9 to the provisions of Section 1.3.
"GHC Sub" shall mean AGY Holdings, Inc., a Delaware corporation, and wholly
-------
owned Subsidiary of Glass Holdings.
"Glass Holdings" shall mean Glass Holdings, Corp., a Delaware corporation.
--------------
"Government Acts" shall have the meaning set forth in Section 2.19.
---------------
"Governmental Authority" shall mean any nation or government, any state or
----------------------
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Guaranty Obligation" shall mean, as to any Person (the "guaranteeing
------------------- ------------
person"), any obligation of (a) the guaranteeing person or (b) another Person
------
(including, without limitation, any bank under any letter of credit) to induce
the creation of which the guaranteeing person has issued a reimbursement,
counterindemnity or similar obligation, in either case guaranteeing or in effect
guaranteeing any Indebtedness, leases, dividends or other obligations (the
"primary obligations") of any other third Person (the "primary obligor") in any
------------------- ---------------
manner, whether directly or indirectly, including, without limitation, any
obligation of the guaranteeing person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (1) for the purchase
or payment of any such primary obligation or (2) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
-11-
obligation or (iv) otherwise to assure or hold harmless the owner of any such
primary obligation against loss in respect thereof; provided, however, that the
-------- -------
term Guaranty Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any
Guaranty Obligation of any guaranteeing person shall be deemed to be the lower
of (a) an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Guaranty Obligation is made and (b) the
maximum amount for which such guaranteeing person may be liable pursuant to the
terms of the instrument embodying such Guaranty Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing person may be
liable are not stated or determinable, in which case the amount of such Guaranty
Obligation shall be such guaranteeing person's maximum reasonably anticipated
liability in respect thereof as determined by the Borrower in good faith.
"Guarantor" shall mean any of the Domestic Subsidiaries identified as a
---------
"Guarantor" on the signature pages hereto and the Additional Credit Parties
which execute a Joinder Agreement, together with their successors and permitted
assigns.
"Guaranty" shall mean the guaranty of the Guarantors set forth in Article
--------
X.
"Hedging Agreements" shall mean, with respect to any Person, any agreement
------------------
entered into to protect such Person against fluctuations in interest rates, or
currency or raw materials values, including, without limitation, any interest
rate swap, cap or collar agreement or similar arrangement between such Person
and one or more counterparties, any foreign currency exchange agreement,
currency protection agreements, commodity purchase or option agreements or other
interest or exchange rate or commodity price hedging agreements.
"Indebtedness" shall mean, with respect to any Person, without duplication,
------------
(a) all obligations of such Person for borrowed money, (b) all obligations of
such Person evidenced by bonds, debentures, notes or similar instruments, or
upon which interest payments are customarily made, (c) all obligations of such
Person under conditional sale or other title retention agreements relating to
Property purchased by such Person (other than customary reservations or
retentions of title under agreements with suppliers entered into in the ordinary
course of business), (d) all obligations of such Person issued or assumed as the
deferred purchase price of Property or services purchased by such Person (other
than trade debt incurred in the ordinary course of business and due within six
months of the incurrence thereof) which would appear as liabilities on a balance
sheet of such Person, (e) all obligations of such Person under take-or-pay or
similar arrangements or under commodities agreements (excluding the Joint
Venture Contracts), (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, the amount of such Indebtedness being deemed
to be the lesser of the fair market value of such Property or the amount of
Indebtedness so secured, (g) all Guaranty Obligations of such Person with
respect to Indebtedness of another Person, (h) the principal portion of all
obligations of such Person under Capital Leases, (i) all obligations of such
Person under Hedging Agreements, (j) the maximum amount of all standby letters
of credit issued or bankers' acceptances facilities created for the account of
such Person and, without duplication, all drafts drawn thereunder (to the extent
unreimbursed), (k) all preferred Capital Stock issued by such Person and which
by the terms thereof could be (at the request of the holders thereof or
otherwise) subject to
-12-
mandatory sinking fund payments, redemption or other acceleration prior to the
Maturity Date, (l) the principal balance outstanding under any synthetic lease,
tax retention operating lease, off-balance sheet loan or similar off-balance
sheet financing product, and (m) the Indebtedness of any partnership or
unincorporated joint venture in which such Person is a general partner or a
joint venturer to the extent such Person is legally obligated therefor.
"Insolvency" shall mean, with respect to any Multiemployer Plan, the
----------
condition that such Plan is insolvent within the meaning of such term as used in
Section 4245 of ERISA.
"Insolvent" shall mean being in a condition of Insolvency.
---------
"Intercreditor Agreement" shall mean the Assignment and Assumption and
-----------------------
Intercreditor Agreement, relating to the Keep-Well Agreement, to be entered into
by and among the Borrower, Xxxxx Corning, the Agent, on behalf of the Lenders
and First Union Investors, Inc. and Warburg Dillon Read LLC, as co-agents, on
behalf of the lenders of the Subordinated Debt, as such agreement may be
amended, modified or supplemented from time to time in accordance with the terms
hereof and thereof.
"Interest Coverage Ratio" shall mean the ratio of (i) Consolidated EBITDA
-----------------------
to (ii) Consolidated Interest Expense.
"Interest Payment Date" shall mean (a) as to any Alternate Base Rate Loan
---------------------
or Swingline Loan, the last day of each March, June, September and December and
on the applicable Maturity Date, (b) as to any LIBOR Rate Loan having an
Interest Period of three months or less, the last day of such Interest Period,
and (c) as to any LIBOR Rate Loan having an Interest Period longer than three
months, each day which is three months after the first day of such Interest
Period and the last day of such Interest Period.
"Interest Period" shall mean, with respect to any LIBOR Rate Loan,
---------------
(i) initially, the period commencing on the Borrowing Date or
conversion date, as the case may be, with respect to such LIBOR Rate Loan
and ending one, two, three or six months thereafter, as selected by the
Borrower in the notice of borrowing or notice of conversion given with
respect thereto; and
(ii) thereafter, each period commencing on the last day of the
immediately preceding Interest Period applicable to such LIBOR Rate Loan
and ending one, two, three or six months thereafter, as selected by the
Borrower by irrevocable notice to the Agent not less than three Business
Days prior to the last day of the then current Interest Period with respect
thereto;
provided that the foregoing provisions are subject to the following:
--------
(A) if any Interest Period pertaining to a LIBOR Rate Loan would
otherwise end on a day that is not a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless
the result of such extension
-13-
would be to carry such Interest Period into another calendar month in
which event such Interest Period shall end on the immediately
preceding Business Day;
(B) any Interest Period pertaining to a LIBOR Rate loan that
begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall end on the last Business Day
of the relevant calendar month;
(C) if the Borrower shall fail to give notice as provided above,
the Borrower shall be deemed to have selected an Alternate Base Rate
Loan to replace the affected LIBOR Rate Loan;
(D) any Interest Period in respect of any Loan that would
otherwise extend beyond the applicable Maturity Date and, further with
regard to the Term Loans, no Interest Period shall extend beyond any
principal amortization payment date unless the portion of such Term
Loan consisting of Alternate Base Rate Loans together with the portion
of such Term Loan consisting of LIBOR Rate Loans with Interest Periods
expiring prior to or concurrently with the date such principal
amortization payment date is due, is at least equal to the amount of
such principal amortization payment due on such date; and
(E) no more than ten (10) LIBOR Rate Loans may be in effect at
any time. For purposes hereof, LIBOR Rate Loans with different
Interest Periods shall be considered as separate LIBOR Rate Loans,
even if they shall begin on the same date and have the same duration,
although borrowings, extensions and conversions may, in accordance
with the provisions hereof, be combined at the end of existing
Interest Periods to constitute a new LIBOR Rate Loan with a single
Interest Period.
"Issuing Lender" shall mean First Union.
--------------
"Issuing Lender Fees" shall have the meaning set forth in Section 2.5(c).
-------------------
"Jefferson" shall mean Jefferson Holdings, Inc., a Delaware corporation.
---------
"Joinder Agreement" shall mean a Joinder Agreement substantially in the
-----------------
form of Schedule 5.10, executed and delivered by an Additional Credit Party in
-------------
accordance with the provisions of Section 5.10.
"Joint Venture Contracts" shall mean those contracts listed on Schedule
----------------------- --------
1.1(b) and all amendments, modifications, supplements, extensions and renewals
------
thereof.
"Keep-Well Agreement" shall mean the Keep-Well Agreement to be entered into
-------------------
by Xxxxx Corning in favor of the Borrower providing for the making of loans by
Xxxxx Corning to the Borrower to enable the Borrower to pay interest hereunder
in the event the Borrower has insufficient cash on hand to make such payments of
interest when due, in form and substance
-14-
satisfactory to the Agent, as such agreement may be amended, modified or
supplemented from time to time in accordance with the terms hereof and thereof.
"Lender" shall have the meaning set forth in the first paragraph of this
------
Agreement.
"Letters of Credit" shall mean any letter of credit issued by the Issuing
-----------------
Lender for the account of the Borrower pursuant to the terms hereof, as such
Letters of Credit may be amended, modified, extended, renewed or replaced from
time to time.
"Letter of Credit Fee" shall have the meaning set forth in Section 2.5(b).
--------------------
"Leverage Ratio" shall mean the ratio of (i) Consolidated Funded Debt to
--------------
(ii) Consolidated EBITDA.
"LIBOR" shall mean, for any LIBOR Rate Loan for any Interest Period
-----
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the
London interbank offered rate for deposits in Dollars at approximately 11:00
A.M. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period. If for any reason such
rate is not available, the term "LIBOR" shall mean, for any LIBOR Rate 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%). If, for any reason, neither of such rates is available,
then "LIBOR" shall mean the rate per annum at which, as determined by the Agent,
Dollars in an amount comparable to the Loans then requested are being offered to
leading banks at approximately 11:00 A.M. London time, two (2) Business Days
prior to the commencement of the applicable Interest Period for settlement in
immediately available funds by leading banks in the London interbank market for
a period equal to the Interest Period selected.
"LIBOR Lending Office" shall mean, initially, the office of each Lender
--------------------
designated as such Lender's LIBOR Lending Office shown on Schedule 9.2; and
------------
thereafter, such other office of such Lender as such Lender may from time to
time specify to the Agent and the Borrower as the office of such Lender at which
the LIBOR Rate Loans of such Lender are to be made.
"LIBOR Rate" shall mean a rate per annum (rounded upwards, if necessary, to
----------
the next higher 1/100th of 1%) determined by the Agent pursuant to the following
formula:
LIBOR Rate = LIBOR
------------------------------------------
1.00 - Eurodollar Reserve Percentage
"LIBOR Rate Loan" shall mean Loans the rate of interest applicable to which
---------------
is based on the LIBOR Rate.
-15-
"Lien" shall mean any mortgage, pledge, hypothecation, assignment, deposit
----
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement and any Capital Lease having
substantially the same economic effect as any of the foregoing).
"LLC Members" shall mean, collectively, Jefferson and GHC Sub, and,
-----------
individually, either of them.
"LLC Operating Agreement" shall mean the Amended and Restated Limited
-----------------------
Liability Operating Agreement for the Borrower, dated as of the Closing Date, by
and between GHC Sub and Jefferson.
"Loan" shall mean a Revolving Loan, a Swingline Loan and/or the Term Loans,
----
as appropriate.
"LOC Commitment" shall mean the commitment of the Issuing Lender to issue
--------------
Letters of Credit and with respect to each Lender, the commitment of such Lender
to purchase participation interests in the Letters of Credit up to such Lender's
LOC Committed Amount as specified in Schedule 2.1(a), as such amount may be
---------------
reduced from time to time in accordance with the provisions hereof.
"LOC Commitment Percentage" shall mean, for each Lender, the percentage
-------------------------
identified as its LOC Commitment Percentage on Schedule 2.1(a), as such
---------------
percentage may be modified in connection with any assignment made in accordance
with the provisions of Section 9.6(c).
"LOC Committed Amount" shall mean, collectively, the aggregate amount of
--------------------
all of the LOC Commitments of the Lenders to issue and participate in Letters of
Credit as referenced in Section 2.4 and, individually, the amount of each
Lender's LOC Commitment as specified in Schedule 2.1(a).
---------------
"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 (i) the rights and obligations of
the parties concerned or (ii) any collateral security for such obligations.
"LOC Obligations" shall mean, at any time, the sum of (i) the maximum
---------------
amount which is, or at any time thereafter may become, available to be drawn
under Letters of Credit then outstanding, assuming compliance with all
requirements for drawings referred to in such Letters of Credit plus (ii) the
----
aggregate amount of all drawings under Letters of Credit honored by the Issuing
Lender but not theretofore reimbursed.
"Mandatory Borrowing" shall have the meaning set forth in Section
-------------------
2.3(b)(ii) or Section 2.4(e), as the context may require.
-16-
"Material Adverse Effect" shall mean a material adverse effect on (a) the
-----------------------
business, operations, property or condition (financial or otherwise) of the
Borrower and its Subsidiaries taken as a whole, (b) the ability of the Borrower
or any Guarantor to perform its obligations, when such obligations are required
to be performed, under this Agreement, any of the Notes or any other Credit
Document, (c) the business, operations, property or condition (financial or
otherwise) of the Acquired Business through and including the Closing Date or
(d) the validity or enforceability of this Agreement, any of the Notes or any of
the other Credit Documents or the rights or remedies of the Agent or the Lenders
hereunder or thereunder.
"Material Contract" shall mean any written contract or other written
-----------------
arrangement, to which the Borrower or any of its Subsidiaries is a party as to
which the breach, nonperformance, cancellation or failure to renew by any party
thereto could reasonably be expected to have a Material Adverse Effect.
"Materials of Environmental Concern" shall mean any gasoline or petroleum
----------------------------------
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Law, including, without limitation, asbestos,
polychlorinated biphenyls and urea-formaldehyde insulation.
"Maturity Date" shall mean (i) with respect to the Tranche A Term Loan, the
-------------
last scheduled quarterly payment date for the Tranche A Term Loan set forth in
Section 2.2A(b), (ii) with respect to the Tranche B Term Loan, the last
scheduled quarterly payment date for the Tranche B Term Loan set forth in
Section 2.2B(b) and (iii) with respect to the Revolving Loans or any Swingline
Loan, the Revolving Commitment Termination Date.
"Member Negative Pledge Agreement" shall mean the Negative Pledge Agreement
--------------------------------
dated as of the Closing Date given by Jefferson to the Agent, as the same may
from time to time be amended, supplemented or otherwise modified in accordance
with the terms hereof and thereof.
"Member Pledge Agreement" shall mean the Member Pledge Agreement dated as
-----------------------
of the Closing Date given by GHC Sub to the Agent, as the same may from time to
time be amended, supplemented or otherwise modified in accordance with the terms
hereof and thereof.
"Moody's" shall mean Xxxxx'x Investors Service, Inc. and its successors and
-------
assigns.
"Mortgage Instruments" shall have the meaning set forth in Section 4.1(e).
--------------------
"Mortgage Policies" shall have the meaning set forth in Section 4.1(e).
-----------------
"Mortgaged Properties" shall have the meaning set forth in Section 4.1(e).
--------------------
"Multiemployer Plan" shall mean a Plan which is a multiemployer plan as
------------------
defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds" shall mean the aggregate cash proceeds received by the
-----------------
Borrower or any Subsidiary in respect of any Asset Disposition, Equity Issuance
or Debt Issuance, net of (a)
-17-
direct costs (including, without limitation, legal, accounting and investment
banking fees, and sales commissions) (b) repayment of Indebtedness that would be
required in connection with any Asset Disposition contemplated as part of the
purchase price or otherwise related to such disposed assets, (c) appropriate
amounts to be provided by the Borrower or a Subsidiary, as the case may be, as a
reserve, in accordance with GAAP, against any liabilities associated with an
Asset Disposition and retained by the Borrower or such Subsidiary, as the case
may be, after such Asset Disposition, including, without limitation, pension and
benefit liabilities, liabilities related to environmental matters or liabilities
under any indemnification obligations associated with such Asset Disposition
except that such reserves shall become Net Cash Proceeds when released and (d)
taxes paid or payable as a result thereof; it being understood that "Net Cash
Proceeds" shall include, without limitation, (i) any cash received upon the sale
or other disposition of any non-cash consideration received by the Borrower or
any Subsidiary in any Asset Disposition, Equity Issuance or Debt Issuance and
(ii) any "Net Cash Proceeds" under the Subordinated Debt Documentation.
"Non-Compete Agreement" shall mean that Non-Compete Agreement dated as of
---------------------
the Closing Date, by and among Groupe Porcher Industries, Glass Holdings, Xxxxx
Corning and the Borrower.
"Note" or "Notes" shall mean the Revolving Notes, the Swingline Note and/or
---- -----
the Term Notes, collectively, separately or individually, as appropriate.
"Notice of Borrowing" shall mean the written notice of borrowing as
-------------------
referenced and defined in Section 2.1(b)(i) or 2.3(b)(i), as appropriate.
"Notice of Conversion" shall mean the written notice of extension or
--------------------
conversion as referenced and defined in Section 2.10.
"Obligations" shall mean, collectively, Loans and LOC Obligations.
-----------
"Xxxxx Corning" shall mean Xxxxx Corning, a Delaware corporation.
-------------
"Participant" shall have the meaning set forth in Section 9.6(b).
-----------
"Participation Interest" shall mean the purchase by a Lender of a
----------------------
participation interest in Swingline Loans as provided in Section 2.3(b)(ii) or
in Letters of Credit as provided in Section 2.4.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
----
pursuant to Subtitle A of Title IV of ERISA.
"Permitted Business" shall mean the business conducted by the Borrower and
------------------
its Subsidiaries as of the Closing Date and any business reasonably related
thereto.
-18-
"Permitted Investments" shall mean:
---------------------
(i) cash and Cash Equivalents;
(ii) receivables owing to the Borrower or any of its Subsidiaries
or any receivables and advances to suppliers, in each case if created,
acquired or made in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms;
(iii) investments in and loans to any Credit Parties;
(iv) loans and advances to officers, directors, employees and
Affiliates in an aggregate amount not to exceed (i) from the Closing Date
through and including December 31, 1999, $4,000,000 at any time outstanding
and (ii) thereafter, $2,000,000 at any time outstanding;
(v) investments (including debt obligations) received in
connection with the bankruptcy or reorganization of suppliers and customers
and in settlement of delinquent obligations of, and other disputes with,
customers and suppliers arising in the ordinary course of business;
(vi) investments, acquisitions or transactions permitted under
Section 6.5(b);
(vii) investments in Foreign Subsidiaries engaged in a Permitted
Business in an aggregate amount not to exceed $30,000,000;
(viii) additional loan advances and/or investments of a nature not
contemplated by the foregoing clauses hereof, provided that such loans,
--------
advances and/or investments made pursuant to this clause (viii) shall not
exceed an aggregate amount of $7,500,000; and
(ix) investments in non-cash consideration to the extent permitted
by Section 6.5(a)(v).
As used herein, "investment" means all investments, in cash or by delivery
----------
of property made, directly or indirectly in, to or from any Person, whether by
acquisition of shares of Capital Stock, property, assets, indebtedness or other
obligations or securities or by loan advance, capital contribution or otherwise.
"Permitted Liens" shall mean:
---------------
(i) Liens created by or otherwise existing, under or in connection
with this Agreement or the other Credit Documents in favor of the Lenders;
(ii) Liens in favor of a Lender hereunder in connection with
Hedging Agreements, but only (A) to the extent such Liens secure
obligations under Hedging
-19-
Agreements with any Lender, or any Affiliate of a Lender, (B) to the extent
such Liens are on the same collateral as to which the Agent on behalf of
the Lenders also has a Lien and (C) if such provider and the Lenders shall
share pari passu in the collateral subject to such Liens;
---- -----
(iii) purchase money Liens securing purchase money indebtedness and
Liens arising under Capital Leases (and refinancings thereof) to the extent
permitted under Section 6.1(c);
(iv) Liens for taxes, assessments, charges or other governmental
levies not yet due or as to which the period of grace (not to exceed 60
days), if any, related thereto has not expired or which are being contested
in good faith by appropriate proceedings, provided that adequate reserves
--------
with respect thereto are maintained on the books of the Borrower or its
Subsidiaries, as the case may be, in conformity with GAAP (or, in the case
of Subsidiaries with significant operations outside of the United States of
America, generally accepted accounting principles in effect from time to
time in their respective jurisdictions of incorporation);
(v) carriers', warehousemen's, mechanics', materialmen's,
repairmen's, contractor's, subcontractor's or other like Liens arising in
the ordinary course of business which are not overdue for a period of more
than 60 days or which are being contested in good faith by appropriate
proceedings;
(vi) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation and deposits
securing liability to insurance carriers under insurance or self-insurance
arrangements;
(vii) deposits to secure the performance of bids, trade contracts,
(other than for borrowed money), leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business;
(viii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and suppliers (including sellers of
goods) and other Liens imposed by law or pursuant to customary reservations
or retentions of title arising in the ordinary course of business, provided
--------
that such Liens secure only amounts not yet due and payable or, if due and
payable, are unfiled and no other action has been taken to enforce the same
or are being contested in good faith by appropriate proceedings for which
adequate reserves determined in accordance with GAAP have been established
(and as to which the Property subject to any such Lien is not yet subject
to foreclosure, sale or loss on account thereof);
(ix) Liens in connection with attachments or judgments (including
judgment or appeal bonds) provided that the judgments secured shall, within
--------
30 days after the entry thereof, have been discharged or execution thereof
stayed pending appeal, or shall have been discharged within 30 days after
the expiration of any such stay;
-20-
(x) (a) easements (including, without limitation, reciprocal
easement agreements and utility agreements), rights-of-way, covenants,
consents, reservations, encroachments, variations and other restrictions,
charges or encumbrances (whether or not recorded) affecting the use of
property, which do not materially detract from the value of such property
or impair the use thereof and (b) any other Lien or exception to coverage
described in mortgagee policies of title insurance issued in favor of and
accepted by the Agent with respect to the Mortgaged Properties;
(xi) leases or subleases granted to others not interfering in any
material respect with the business of any Credit Party;
(xii) 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 permitted by this
Credit Agreement;
(xiii) Liens deemed to exist in connection with Investments in
repurchase agreements permitted under Section 6.6;
(xiv) normal and customary rights of setoff upon deposits of cash in
favor of banks or other depository institutions;
(xv) Liens securing Indebtedness not to exceed $2,500,000 in an
aggregate principal amount outstanding at any time;
(xvi) any extension, renewal or replacement (or successive
extensions, renewals or replacements), in whole or in part, of any Lien
referred to in the foregoing clauses; provided that such extension, renewal
--------
or replacement Lien shall be limited to all or a part of the Property which
secured the Lien so extended, renewed or replaced (plus improvements on
such Property); and
(xvii) Liens existing as of the Closing Date and set forth on
Schedule 1.1(c); provided that (a) no such Lien shall at any time be
--------------- --------
extended to or cover any Property other than the Property subject thereto
on the Closing Date and (b) the principal amount of the Indebtedness
secured by such Liens shall not be extended, renewed, refunded or
refinanced.
"Person" shall mean an individual, partnership, corporation, limited
------
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
"Plan" shall mean, at any particular time, any employee benefit plan which
----
is covered by Title IV of ERISA and in respect of which the Borrower or a
Commonly Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
-21-
"Pledge Agreement" shall mean the Pledge Agreement dated as of the Closing
----------------
Date given by the Borrower and the other Credit Parties to the Agent, as the
same may from time to time be amended, supplemented or otherwise modified in
accordance with the terms hereof and thereof.
"Prime Rate" shall have the meaning set forth in the definition of
----------
Alternate Base Rate.
"Pro Forma Basis" shall mean, with respect to any transaction, that such
---------------
transaction shall be deemed to have occurred as of the first day of the four-
fiscal quarter period ending as of the end of the fiscal quarter most recently
ended prior to the date of such transaction with respect to which the Agent has
received the financial information required under Section 5.1. As used herein,
"transaction" means any merger or consolidation or acquisition as referenced in
-----------
Section 6.5(b).
"Properties" shall have the meaning set forth in Section 3.10(a).
----------
"Property" shall mean any interest in any kind of property or asset,
--------
whether real, personal or mixed, or tangible or intangible.
"Purchasing Lenders" shall have the meaning set forth in Section 9.6(c).
------------------
"Recovery Event" shall mean the receipt by the Borrower or any of its
--------------
Subsidiaries of any cash insurance proceeds or condemnation award payable by
reason of theft, loss, physical destruction or damage, taking or similar event
with respect to any of their respective property or assets.
"Register" shall have the meaning set forth in Section 9.6(d).
--------
"Reorganization" shall mean, with respect to any Multiemployer Plan, the
--------------
condition that such Plan is in reorganization within the meaning of such term as
used in Section 4241 of ERISA.
"Reportable Event" shall mean any of the events set forth in Section
----------------
4043(c) of ERISA, other than those events as to which the thirty-day notice
period is waived under PBGC Reg. (S)4043.
"Required Lenders" shall mean (i) Lenders holding in the aggregate not less
----------------
than 51% of all Revolving Loans and LOC Obligations then outstanding at such
time plus the aggregate unused Revolving Commitments at such time (treating for
----
purposes hereof in the case of Swingline Loans and LOC Obligations, in the case
of the Swingline Lender and the Issuing Lender, only the portion of the
Swingline Loans and the LOC Obligations of the Swingline Lender and the Issuing
Lender, respectively, which is not subject to the Participation Interests of the
other Lenders and, in the case of the Lenders other than the Swingline Lender
and the Issuing Lender, the Participation Interests of such Lenders in Swingline
Loans and LOC Obligations hereunder as direct Obligations), (ii) Lenders holding
in the aggregate not less than 51% of all Tranche A Term Loans then outstanding
at such time and (iii) Lenders holding in the aggregate not less than 51% of all
Tranche B Term Loans then outstanding at such time; provided, however, that if
-------- -------
any Lender shall be a Defaulting Lender at such time, then there shall be
excluded from the
-22-
determination of Required Lenders, Obligations (including Participation
Interests) owing to such Defaulting Lender and such Defaulting Lender's
Commitments, or after termination of the Commitments, the principal balance of
the Obligations owing to such Defaulting Lender.
"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 each law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Responsible Officer" shall mean, as to any Credit Party, the President,
-------------------
Chief Executive Officer, Chief Financial Officer or General Manager thereof.
"Restricted Payment" shall mean (a) any dividend or other distribution,
------------------
direct or indirect, on account of any shares of any class of Capital Stock of
the Borrower or any of its Subsidiaries, now or hereafter outstanding, (b) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of Capital
Stock of the Borrower or any of its Subsidiaries, now or hereafter outstanding,
(c) any payment made to retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire shares of any class of Capital
Stock of the Borrower or any of its Subsidiaries, now or hereafter outstanding,
or (d) 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 Subordinated Debt.
"Revolving Commitment" shall mean, with respect to each Lender, the
--------------------
commitment of such Lender to make Revolving Loans in an aggregate principal
amount at any time outstanding up to such Lender's Revolving Committed Amount as
specified in Schedule 2.1(a), as such amount may be reduced from time to time in
---------------
accordance with the provisions hereof.
"Revolving Commitment Percentage" shall mean, for each Lender, the
-------------------------------
percentage identified as its Revolving Commitment Percentage on Schedule 2.1(a),
---------------
as such percentage may be modified in connection with any assignment made in
accordance with the provisions of Section 9.6(c).
"Revolving Commitment Termination Date" shall mean September 30, 2004.
-------------------------------------
"Revolving Committed Amount" shall mean, collectively, the aggregate amount
--------------------------
of all Revolving Commitments as referenced in Section 2.1(a), as such amount may
be reduced from time to time in accordance with the provisions hereof, and,
individually, the amount of each Lender's Revolving Commitment as specified on
Schedule 2.1(a).
---------------
"Revolving Loans" shall have the meaning set forth in Section 2.1.
---------------
"Revolving Note" or "Revolving Notes" shall mean the promissory notes of
-------------- ---------------
the Borrower in favor of each of the Lenders evidencing the Revolving Loans
provided pursuant to Section
-23-
2.1(e), individually or collectively, as appropriate, as such promissory notes
may be amended, modified, supplemented, extended, renewed or replaced from time
to time.
"S&P" shall mean Standard & Poor's Ratings Group, a division of McGraw
---
Hill, Inc., and its successors and assigns.
"Security Agreement" shall mean the Security Agreement dated as of the
------------------
Closing Date given by the Borrower and the other Credit Parties to the Agent, as
amended, modified or supplemented from time to time in accordance with its
terms.
"Security Documents" shall mean the Security Agreement, the Pledge
------------------
Agreement, the Member Pledge Agreement, the Member Negative Pledge Agreement,
the Collateral Assignment of Contract Rights, the Keep-Well Agreement, the
Intercreditor Agreement, any Mortgage Instrument and such other documents
executed and delivered in connection with the attachment and perfection of the
Agent's security interests and liens arising thereunder, including, without
limitation, UCC financing statements and patent and trademark filings.
"Single Employer Plan" shall mean any Plan which is not a Multiemployer
--------------------
Plan.
"Specified Sales" shall mean (a) the sale, transfer, lease or other
---------------
disposition of inventory and materials in the ordinary course of business and
(b) the sale, transfer or other disposition of Permitted Investments described
in clause (i) of the definition thereof.
"Subordinated Debt" shall mean (a) the Bridge Notes due 2008 (the "Bridge
-----------------
Notes") in the principal amount of $150,000,000 issued by the Borrower and AGY
Capital Corp. pursuant to the Senior Subordinated Credit Agreement among the
Borrower, AGY Capital Corp., the subsidiary guarantors from time to time party
thereto, the lenders from time to time party thereto and First Union Investors,
Inc. and Warburg Dillon Read LLC, as co-agents, dated as of the Closing Date
(the "Senior Subordinated Credit Agreement") and (b) any refinancing thereof in
------------------------------------
accordance with the terms hereof.
"Subordinated Debt Documentation" shall mean the agreements, indentures,
-------------------------------
notes and other documentation and instruments evidencing the Subordinated Debt.
"Subsidiary" shall mean, as to any Person, a corporation, partnership,
----------
limited liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such other
ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers of
such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified,
all references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall
refer to a Subsidiary or Subsidiaries of the Borrower.
-24-
"Supply and Services Agreements" shall mean the Glass Marbles Supply
------------------------------
Agreement, the Alloy Services Agreement and the Borates Supply Agreement, each
dated as of the Closing Date, by and between Xxxxx Corning and the Borrower.
"Swingline Commitment" shall mean the commitment of the Swingline Lender to
--------------------
make Swingline Loans in an aggregate principal amount at any time outstanding up
to the Swingline Committed Amount, and the commitment of the Lenders to purchase
participation interests in the Swingline Loans as provided in Section
2.3(b)(ii), as such amounts may be reduced from time to time in accordance with
the provisions hereof.
"Swingline Committed Amount" shall mean the amount of the Swingline
--------------------------
Lender's Swingline Commitment as specified in Section 2.3(a).
"Swingline Lender" shall mean First Union, in its capacity as such.
----------------
"Swingline Loan" or "Swingline Loans" shall have the meaning set forth in
-------------- ---------------
Section 2.3(a).
"Swingline Note" shall mean the promissory note of the Borrower in favor of
--------------
the Swingline Lender evidencing the Swingline Loans provided pursuant to Section
2.3(d), as such promissory note may be amended, modified, supplemented,
extended, renewed or replaced from time to time.
"Taxes" shall have the meaning set forth in Section 2.18.
-----
"Term Loans" shall mean the Tranche A Term Loan and the Tranche B Term
----------
Loan.
"Term Notes" shall mean the Tranche A Term Notes and the Tranche B Term
----------
Notes.
"Tranche" shall mean the collective reference to LIBOR Rate Loans whose
-------
Interest Periods begin and end on the same day. A Tranche may sometimes be
referred to as a "Eurodollar Tranche".
"Tranche A Term Loan" shall have the meaning set forth in Section 2.2A(a).
-------------------
"Tranche A Term Loan Commitment" shall mean, with respect to each Lender,
------------------------------
the commitment of such Lender to make its portion of the Tranche A Term Loan in
a principal amount equal to such Lender's Tranche A Term Loan Commitment
Percentage of the Tranche A Term Loan Committed Amount (and for purposes of
making determinations of Required Lenders hereunder after the Closing Date, the
principal amount outstanding on the Tranche A Term Loan).
"Tranche A Term Loan Commitment Percentage" shall mean, for any Lender, the
-----------------------------------------
percentage identified as its Tranche A Term Loan Commitment Percentage on
Schedule 2.1(a), as such percentage may be modified in connection with any
---------------
assignment made in accordance with the provisions of Section 9.6.
-25-
"Tranche A Term Loan Committed Amount" shall have the meaning set forth in
------------------------------------
Section 2.2A(a).
"Tranche A Term Note" or "Tranche A Term Notes" shall mean the promissory
------------------- --------------------
notes of the Borrower in favor of each of the Lenders evidencing the portion of
the Tranche A Term Loan provided pursuant to Section 2.2A(d), individually or
collectively, as appropriate, as such promissory notes may be amended, modified,
restated, supplemented, extended, renewed or replaced from time to time.
"Tranche B Term Loan" shall have the meaning set forth in Section 2.2B(a).
-------------------
"Tranche B Term Loan Commitment" shall mean, with respect to each Lender,
------------------------------
the commitment of such Lender to make its portion of the Tranche B Term Loan in
a principal amount equal to such Lender's Tranche B Term Loan Commitment
Percentage of the Tranche B Term Loan Committed Amount (and for purposes of
making determinations of Required Lenders hereunder after the Closing Date, the
principal amount outstanding on the Tranche B Term Loan).
"Tranche B Term Loan Commitment Percentage" shall mean, for any Lender, the
-----------------------------------------
percentage identified as its Tranche B Term Loan Commitment Percentage on
Schedule 2.1(a), as such percentage may be modified in connection with any
---------------
assignment made in accordance with the provisions of Section 9.6.
"Tranche B Term Loan Committed Amount" shall have the meaning set forth in
------------------------------------
Section 2.2B(a).
"Tranche B Term Note" or "Tranche B Term Notes" shall mean the promissory
------------------- --------------------
notes of the Borrower in favor of each of the Lenders evidencing the portion of
the Tranche B Term Loan provided pursuant to Section 2.2B(d), individually or
collectively, as appropriate, as such promissory notes may be amended, modified,
restated, supplemented, extended, renewed or replaced from time to time.
"Transfer Effective Date" shall have the meaning set forth in each
-----------------------
Commitment Transfer Supplement.
"2.18 Certificate" shall have the meaning set forth in Section 2.18.
----------------
"Type" shall mean, as to any Loan, its nature as an Alternate Base Rate
----
Loan, LIBOR Rate Loan or Swingline Loan, as the case may be.
"Year 2000 Compliant" shall have the meaning set forth in Section 3.25.
-------------------
SECTION 1.2 OTHER DEFINITIONAL PROVISIONS.
-----------------------------
(a) Unless otherwise specified therein, all terms defined in this
Agreement shall have the defined meanings when used in the Notes or other
Credit Documents or any certificate or other document made or delivered
pursuant hereto.
-26-
(b) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole
and not to any particular provision of this Agreement, and Section,
subsection, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
(c) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 1.3 ACCOUNTING TERMS.
----------------
Unless otherwise specified herein, all accounting terms used herein shall
be interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP applied on a basis consistent with the most recent audited
consolidated financial statements of the Borrower delivered to the Lenders;
provided that, if the Borrower notifies the Agent that it wishes to amend any
--------
covenant in Section 5.9 (including, without limitation, for the purposes of the
definition of "Applicable Percentage" set forth in Section 1.1) to eliminate the
effect of any change in GAAP on the operation of such covenant (or if the Agent
notifies the Borrower that the Required Lenders wish to amend Section 5.9 for
such purpose), then the Borrower's compliance with such covenant shall be
determined on the basis of GAAP in effect immediately before the relevant change
in GAAP became effective, until either such notice is withdrawn or such covenant
is amended in a manner satisfactory to the Borrower and the Required Lenders.
The Borrower shall deliver to the Agent and each Lender at the same time as
the delivery of any annual or quarterly financial statements given in accordance
with the provisions of Section 5.1, (i) a description in reasonable detail of
any material change in the application of accounting principles employed in the
preparation of such financial statements from those applied in the most recently
preceding quarterly or annual financial statements as to which no objection
shall have been made in accordance with the provisions above and (ii) a
reasonable estimate of the effect on the financial statements on account of such
changes in application.
ARTICLE II
THE LOANS; AMOUNT AND TERMS
SECTION 2.1 REVOLVING LOANS.
---------------
(a) Revolving Commitment. During the Commitment Period, subject
--------------------
to the terms and conditions hereof, each Lender severally agrees to make
revolving credit loans ("Revolving Loans") to the Borrower from time to
---------------
time for the purposes hereinafter set forth; provided, however, that (i)
-------- -------
with regard to each Lender individually, the sum of such Lender's share of
outstanding Revolving Loans plus such Lender's Revolving Commitment
----
Percentage of Swingline Loans plus such Lender's LOC Commitment
----
-27-
Percentage of LOC Obligations shall not exceed such Lender's Revolving
Commitment Percentage of the aggregate Revolving Committed Amount, and (ii)
with regard to the Lenders collectively, the sum of the aggregate amount of
outstanding Revolving Loans plus Swingline Loans plus LOC Obligations shall
---- ----
not exceed the aggregate Revolving Committed Amount then in effect. For
purposes hereof, the aggregate amount available hereunder shall be SEVENTY-
FIVE MILLION DOLLARS ($75,000,000) (as such aggregate maximum amount may be
reduced from time to time as provided in Section 2.6, the "Revolving
---------
Committed Amount"). Revolving Loans may consist of Alternate Base Rate
----------------
Loans or LIBOR Rate Loans, or a combination thereof, as the Borrower may
request, and may be repaid and reborrowed in accordance with the provisions
hereof. LIBOR Rate Loans shall be made by each Lender at its LIBOR Lending
Office and Alternate Base Rate Loans at its Domestic Lending Office.
Notwithstanding any provision herein to the contrary, (x) the initial LIBOR
borrowing under Section 2.1 shall be made as a LIBOR Rate Loan having an
Interest Period of fourteen (14) days and (y) subsequent to such initial
LIBOR borrowing but prior to the closing of the initial syndication of the
Commitment and the Loans to the Lenders, all LIBOR Rate Loans under Section
2.1 shall be made or continued, at the Borrower's election, as LIBOR Rate
Loans having an Interest Period of fourteen (14) days. All LIBOR Rate
Loans having an Interest Period of fourteen (14) days shall bear interest
at the same rate as LIBOR Rate Loans having an Interest Period of one
month.
(b) Revolving Loan Borrowings.
-------------------------
(i) Notice of Borrowing. The Borrower shall request a Revolving
-------------------
Loan borrowing by written notice (or telephone notice promptly
confirmed in writing which confirmation may be by fax) to the Agent
not later than 11:00 A.M. (Charlotte, North Carolina time) on the
Business Day prior to the date of requested borrowing in the case of
Alternate Base Rate Loans, and on the third Business Day prior to the
date of the requested borrowing in the case of LIBOR Rate Loans. Each
such request for borrowing shall be irrevocable and shall specify (A)
that a Revolving Loan is requested, (B) the date of the requested
borrowing (which shall be a Business Day), (C) the aggregate principal
amount to be borrowed and (D) whether the borrowing shall be comprised
of Alternate Base Rate Loans, LIBOR Rate Loans or a combination
thereof, and if LIBOR Rate Loans are requested, the Interest Period(s)
therefor. A form of Notice of Borrowing (a "Notice of Borrowing") is
-------------------
attached as Schedule 2.1(b)(i). If the Borrower shall fail to specify
------------------
in any such Notice of Borrowing (I) an applicable Interest Period in
the case of a LIBOR Rate 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 an Alternate Base Rate Loan hereunder. The Agent shall
give notice to each Lender promptly upon receipt of each Notice of
Borrowing, the contents thereof and each such Lender's share thereof.
(ii) Minimum Amounts. Each Revolving Loan borrowing shall be in
---------------
a minimum aggregate amount of $5,000,000 and integral multiples of
$1,000,000 in
-28-
excess thereof (or the 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 Agent for
the account of the Borrower at the office of the Agent specified in
Schedule 9.2, or at such other office as the 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 Agent. Such borrowing will then be
made available to the Borrower by the Agent by crediting the account
of the Borrower on the books of such office with the aggregate of the
amounts made available to the Agent by the Lenders and in like funds
as received by the Agent.
(c) Repayment. The principal amount of all Revolving Loans shall be
---------
due and payable in full on the Revolving Commitment Termination Date.
(d) Interest. Subject to the provisions of Section 2.9, Revolving
--------
Loans shall bear interest as follows:
(i) Alternate Base Rate Loans. During such periods as
-------------------------
Revolving Loans shall be comprised of Alternate Base Rate Loans, each
such Alternate Base Rate Loan shall bear interest at a per annum rate
equal to the sum of the Alternate Base Rate plus the Applicable
----
Percentage; and
(ii) LIBOR Rate Loans. During such periods as Revolving Loans
----------------
shall be comprised of LIBOR Rate Loans, each such LIBOR Rate Loan
shall bear interest at a per annum rate equal to the sum of the LIBOR
Rate plus the Applicable Percentage.
----
Interest on Revolving Loans shall be payable in arrears on each Interest
Payment Date.
(e) Revolving Notes. Each Lender's Revolving Commitment Percentage
---------------
of the Revolving Loans shall be evidenced by a duly executed promissory
note of the Borrower to such Lender in substantially the form of Schedule
--------
2.1(e).
---
SECTION 2.2A TRANCHE A TERM LOAN.
-------------------
(a) Tranche A Term Loan. Subject to the terms and conditions hereof
-------------------
and in reliance upon the representations and warranties set forth herein,
each Lender severally agrees to make available to the Borrower on the
Closing Date such Lender's Tranche A Term Loan Commitment Percentage of a
term loan in Dollars (the "Tranche A Term Loan") in the aggregate principal
-------------------
amount of ONE HUNDRED FIFTEEN MILLION DOLLARS ($115,000,000) (the "Tranche
-------
A Term Loan Committed Amount") for the purposes hereinafter set forth. The
----------------------------
Tranche A Term Loan may consist of Alternate Base Rate Loans or LIBOR Rate
Loans, or a combination thereof, as the Borrower may request. The Borrower
shall request the initial Tranche A Term Loan borrowing by
-29-
written notice (or telephone notice promptly confirmed in writing which
confirmation may be by fax) to the Agent not later than 11:00 A.M.
(Charlotte, North Carolina time) on the Business Day prior to the date of
requested borrowing. Amounts repaid on the Tranche A Term Loan may not be
reborrowed. LIBOR Rate Loans shall be made by each Lender at its LIBOR
Lending Office and Alternate Base Rate Loans at its Domestic Lending
Office. Notwithstanding any provision herein to the contrary, (x) the LIBOR
borrowing under Section 2.2A shall be made as a LIBOR Rate Loan having an
Interest Period of fourteen (14) days and (y) subsequent to such initial
LIBOR borrowing but prior to the closing of the initial syndication of the
Commitment and the Loans to the Lenders, all LIBOR Rate Loans under Section
2.2A shall be continued, at the Borrower's election, as LIBOR Rate Loans
having an Interest Period of fourteen (14) days. All LIBOR Rate Loans
having an Interest Period of fourteen (14) days shall bear interest at the
same rate as LIBOR Rate Loans having an Interest Period of one month.
(b) Repayment of Tranche A Term Loan. The principal amount of the
--------------------------------
Tranche A Term Loan shall be repaid in twenty-four (24) consecutive fiscal
quarterly installments, unless accelerated sooner pursuant to Section 7.2,
commencing on December 31, 1998 and ending on September 30, 2004 payable as
follows:
Payment Date Amount
------------ ------
December 31, 1998 $2,875,000
March 31, 1999 $2,875,000
June 30, 1999 $2,875,000
September 30, 1999 $2,875,000
December 31, 1999 $4,312,500
March 31, 2000 $4,312,500
June 30, 2000 $4,312,500
September 30, 2000 $4,312,500
December 31, 2000 $4,312,500
March 31, 2001 $4,312,500
June 30, 2001 $4,312,500
September 30, 2001 $4,312,500
December 31, 2001 $5,750,000
March 31, 2002 $5,750,000
June 30, 2002 $5,750,000
September 30, 2002 $5,750,000
December 31, 2002 $5,750,000
March 31, 2003 $5,750,000
June 30, 2003 $5,750,000
September 30, 2003 $5,750,000
December 31, 2003 $5,750,000
March 31, 2004 $5,750,000
June 30, 2004 $5,750,000
September 30, 2004 $5,750,000
-30-
(c) Interest on the Tranche A Term Loan. Subject to the
-----------------------------------
provisions of Section 2.9, the Tranche A Term Loan shall bear interest as
follows:
(i) Alternate Base Rate Loans. During such periods as the
-------------------------
Tranche A Term Loan shall be comprised of Alternate Base Rate Loans,
each such Alternate Base Rate Loan shall bear interest at a per
annum rate equal to the sum of the Alternate Base Rate plus the
----
Applicable Percentage; and
(ii) LIBOR Rate Loans. During such periods as the Tranche
----------------
A Term Loan shall be comprised of LIBOR Rate Loans, each such LIBOR
Rate Loan shall bear interest at a per annum rate equal to the sum
of the LIBOR Rate plus the Applicable Percentage.
----
Interest on the Tranche A Term Loan shall be payable in
arrears on each Interest Payment Date.
(d) Tranche A Term Notes. Each Lender's Tranche A Term Loan
--------------------
Commitment Percentage of the Tranche A Term Loan outstanding as of the
Closing Date shall be evidenced by a duly executed promissory note of the
Borrower to such Lender in substantially the form of Schedule 2.2A(d).
----------------
SECTION 2.2B TRANCHE B TERM LOAN.
-------------------
(a) Tranche B Term Loan. Subject to the terms and conditions
-------------------
hereof and in reliance upon the representations and warranties set forth
herein, each Lender severally agrees to make available to the Borrower on
the Closing Date such Lender's Tranche B Term Loan Commitment Percentage of
a term loan in Dollars (the "Tranche B Term Loan") in the aggregate
-------------------
principal amount of ONE HUNDRED TWENTY-FIVE MILLION DOLLARS ($125,000,000)
(the "Tranche B Term Loan Committed Amount") for the purposes hereinafter
------------------------------------
set forth. The Tranche B Term Loan may consist of Alternate Base Rate Loans
or LIBOR Rate Loans, or a combination thereof, as the Borrower may request.
The Borrower shall request the initial Tranche B Term Loan borrowing by
written notice (or telephone notice promptly confirmed in writing which
confirmation may be by fax) to the Agent not later than 11:00 A.M.
(Charlotte, North Carolina time) on the Business Day prior to the date of
requested borrowing. Amounts repaid on the Tranche B Term Loan may not be
reborrowed. LIBOR Rate Loans shall be made by each Lender at its LIBOR
Lending Office and Alternate Base Rate Loans at its Domestic Lending
Office. Notwithstanding any provision herein to the contrary, (x) the LIBOR
borrowing under Section 2.2B shall be made as a LIBOR Rate Loan having an
Interest Period of fourteen (14) days and (y) subsequent to such initial
LIBOR borrowing but prior to the closing of the initial syndication of the
Commitment and the Loans to the Lenders, all LIBOR Rate Loans under Section
2.2B shall be continued, at the Borrower's election, as LIBOR Rate Loans
having an Interest Period of fourteen (14) days. All LIBOR Rate Loans
having an Interest Period of fourteen (14) days shall bear interest at the
same rate as LIBOR Rate Loans having an Interest Period of one month.
-31-
(b) Repayment of Tranche B Term Loan. The principal amount of the
--------------------------------
Tranche B Term Loan shall be repaid in twenty-eight (28) consecutive fiscal
quarterly installments, unless accelerated sooner pursuant to Section 7.2,
commencing on December 31, 1998 and ending on September 30, 2005.
Installments one (1) through twenty-four (24), inclusive, shall each be in
the amount of $312,500 and installments twenty-five (25) through twenty-
eight (28), inclusive, shall each be in the amount of $29,375,000.
(c) Interest on the Tranche B Term Loan. Subject to the
-----------------------------------
provisions of Section 2.9, the Tranche B Term Loan shall bear interest as
follows:
(i) Alternate Base Rate Loans. During such periods as the
-------------------------
Tranche B Term Loan shall be comprised of Alternate Base Rate Loans,
each such Alternate Base Rate Loan shall bear interest at a per annum
rate equal to the sum of the Alternate Base Rate plus the Applicable
----
Percentage; and
(ii) LIBOR Rate Loans. During such periods as the Tranche
----------------
B Term Loan shall be comprised of LIBOR Rate Loans, each such LIBOR
Rate Loan shall bear interest at a per annum rate equal to the sum of
the LIBOR Rate plus the Applicable Percentage.
----
Interest on the Tranche B Term Loan shall be payable in
arrears on each Interest Payment Date.
(d) Tranche B Term Notes. Each Lender's Tranche B Term Loan
--------------------
Commitment Percentage of the Tranche B Term Loan outstanding as of the
Closing Date shall be evidenced by a duly executed promissory note of the
Borrower to such Lender in substantially the form of Schedule 2.2B(d).
----------------
SECTION 2.3 SWINGLINE LOAN SUBFACILITY.
--------------------------
(a) Swingline Commitment. During the Commitment Period, subject
--------------------
to the terms and conditions hereof, the Swingline Lender, in its individual
capacity, agrees to make certain revolving credit loans to the Borrower
(each a "Swingline Loan" and, collectively, the "Swingline Loans") for the
-------------- ---------------
purposes hereinafter set forth; provided, however, (i) the aggregate amount
-------- -------
of Swingline Loans outstanding at any time shall not exceed TEN MILLION
DOLLARS ($10,000,000) (the "Swingline Committed Amount"), and (ii) the sum
--------------------------
of the aggregate amount of outstanding Revolving Loans plus Swingline Loans
----
plus LOC Obligations shall not exceed the aggregate Revolving Committed
----
Amount then in effect. Swingline Loans hereunder may be repaid and
reborrowed in accordance with the provisions hereof.
(b) Swingline Loan Borrowings.
-------------------------
(i) Notice of Borrowing and Disbursement. The Swingline
------------------------------------
Lender will make Swingline Loans available to the Borrower on any
Business Day upon request made by the Borrower not later than 12:00
Noon (Charlotte, North
-32-
Carolina time) on such Business Day. A notice of request for Swingline
Loan borrowing shall be made in the form of Schedule 2.1(b)(i) with
------------------
appropriate modifications. Swingline Loan borrowings hereunder shall
be made in minimum amounts of $100,000 and in integral amounts of
$100,000 in excess thereof.
(ii) Repayment of Swingline Loans. Each Swingline Loan borrowing
----------------------------
shall be due and payable on the Revolving Commitment Termination Date.
The Swingline Lender may, at any time, in its sole discretion, by
written notice to the Borrower and the Agent, demand repayment of its
Swingline Loans by way of a Revolving Loan borrowing, in which case
the Borrower shall be deemed to have requested a Revolving Loan
borrowing comprised entirely of Alternate Base Rate Loans in the
amount of such Swingline Loans; provided, however, that, in the
-------- -------
following circumstances, any such demand shall also be deemed to have
been given one Business Day prior to each of (i) the Revolving
Commitment Termination Date, (ii) the occurrence of any Event of
Default described in Section 7.1(e), (iii) upon acceleration of the
Credit Party Obligations hereunder, whether on account of an Event of
Default described in Section 7.1(e) or any other Event of Default, and
(iv) the exercise of remedies in accordance with the provisions of
Section 7.2 hereof (each such Revolving Loan borrowing made on account
of any such deemed request therefor as provided herein being
hereinafter referred to as a "Mandatory Borrowing"). Each Lender
-------------------
hereby irrevocably agrees to make such Revolving Loans promptly upon
any such request or deemed request on account of each Mandatory
Borrowing in the amount and in the manner specified in the preceding
sentence and on the same such date notwithstanding (I) the amount of
---------------
Mandatory Borrowing may not comply with the minimum amount for
borrowings 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 Revolving Loans to
be made by the time otherwise required in Section 2.1(b)(i), (V) the
date of such Mandatory Borrowing, or (VI) any reduction in the
Revolving Committed Amount or termination of the Revolving Commitments
immediately prior to such Mandatory Borrowing or contemporaneously
therewith. In the event that any Mandatory Borrowing cannot for any
reason be made on the date otherwise required above (including,
without limitation, as a result of the commencement of a proceeding
under the Bankruptcy Code with respect to the Borrower), then each
Lender hereby agrees that it shall forthwith purchase (as of the date
the Mandatory Borrowing would otherwise have occurred, but adjusted
for any payments received from the Borrower on or after such date and
prior to such purchase) from the Swingline Lender such participations
in the outstanding Swingline Loans as shall be necessary to cause each
such Lender to share in such Swingline Loans ratably based upon its
respective Revolving Commitment Percentage (determined before giving
effect to any termination of the Commitments pursuant to Section 7.2),
provided that (A) all interest payable on the Swingline Loans shall be
--------
for the account of the Swingline Lender until the date as of which the
respective participation is purchased, and (B) at the time any
purchase of participations pursuant to this sentence is actually made,
the
-33-
purchasing Lender shall be required to pay to the Swingline Lender
interest on the principal amount of such participation purchased for
each day from and including the day upon which the Mandatory Borrowing
would otherwise have occurred to but excluding the date of payment for
such participation, at the rate equal to, if paid within two (2)
Business Days of the date of the Mandatory Borrowing, the Federal
Funds Effective Rate, and thereafter at a rate equal to the Alternate
Base Rate.
(c) Interest on Swingline Loans. Subject to the provisions of
---------------------------
Section 2.9, Swingline Loans shall bear interest at a per annum rate equal
to the Alternate Base Rate plus the Applicable Percentage for Revolving
----
Loans that are Alternate Base Rate Loans. Interest on Swingline Loans shall
be payable in arrears on each Interest Payment Date.
(d) Swingline Note. The Swingline Loans shall be evidenced by
--------------
a duly executed promissory note of the Borrower to the Swingline Lender in
the original amount of the Swingline Committed Amount and substantially in
the form of Schedule 2.3(d).
---------------
SECTION 2.4 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, during the Commitment Period the
Issuing Lender shall issue, and the Lenders shall participate in, Letters
of Credit for the account of the Borrower from time to time upon request in
a form acceptable to the Issuing Lender; provided, however, that (i) the
-------- -------
aggregate amount of LOC Obligations shall not at any time exceed THIRTY
MILLION DOLLARS ($30,000,000) (the "LOC Committed Amount"), (ii) the sum of
--------------------
the aggregate amount of Revolving Loans plus Swingline Loans plus LOC
---- ----
Obligations shall not at any time exceed the aggregate Revolving Committed
Amount then in effect, (iii) all Letters of Credit shall be denominated in
U.S. Dollars and (iv) Letters of Credit shall be issued for the purpose of
supporting tax-advantaged variable rate demand note financing and for other
lawful corporate purposes and may be issued as standby letters of credit,
including in connection with workers' compensation and other insurance
programs, and trade letters of credit. Except as otherwise expressly
agreed upon by all the Lenders, no Letter of Credit shall have an original
expiry date more than twelve (12) months from the date of issuance;
provided, however, so long as no Default or Event of Default has occurred
-------- -------
and is continuing and subject to the other terms and conditions to the
issuance of Letters of Credit hereunder, the expiry dates of Letters of
Credit may be extended annually or periodically from time to time on the
request of the Borrower or by operation of the terms of the applicable
Letter of Credit to a date not more than twelve (12) months from the date
of extension; provided, further, that no Letter of Credit, as originally
-------- -------
issued or as extended, shall have an expiry date extending beyond the
Revolving Commitment Termination Date. Each Letter of Credit shall comply
with the related LOC Documents. The issuance and expiry date of each
Letter of Credit shall be a Business Day. Any Letters of Credit issued
hereunder shall be in a minimum original face amount of $50,000 or such
other amount as agreed by the Agent and the Borrower. There will be no
more than twelve (12) Letters of Credit outstanding at any time or such
other amount as agreed
-34-
by the Agent and the Borrower. First Union shall be the Issuing Lender on
all Letters of Credit issued after the Closing Date.
(b) Notice and Reports. The request for the issuance of a Letter of
------------------
Credit shall be submitted to the Issuing Lender at least four (4) Business
Days prior to the requested date of issuance. The Issuing Lender will
promptly upon request provide to the Agent for dissemination to the Lenders
a detailed report specifying the Letters of Credit which are then issued
and outstanding and any activity with respect thereto which may have
occurred since the date of any prior report, and including therein, among
other things, the account party, the beneficiary, the face amount, expiry
date as well as any payments or expirations which may have occurred. The
Issuing Lender will further provide to the Agent promptly upon request
copies of the Letters of Credit. The Issuing Lender will provide to the
Agent promptly upon request a summary report of the nature and extent of
LOC Obligations then outstanding.
(c) Participations. Each Lender upon issuance of a Letter of Credit,
--------------
shall be deemed to have purchased without recourse a risk participation
from the Issuing Lender in such Letter of Credit and the obligations
arising thereunder and any collateral relating thereto, in each case in an
amount equal to its LOC Commitment Percentage of the obligations under such
Letter of Credit and shall absolutely, unconditionally and irrevocably
assume, as primary obligor and not as surety, and be obligated to pay to
the Issuing Lender therefor and discharge when due, its LOC Commitment
Percentage of the obligations arising under such Letter of Credit. Without
limiting the scope and nature of each Lender's participation in any Letter
of Credit, to the extent that the Issuing Lender has not been reimbursed as
required hereunder or under any LOC Document, each such Lender shall pay to
the Issuing Lender its LOC Commitment Percentage of such unreimbursed
drawing in same day funds on the day of notification by the Issuing Lender
of an unreimbursed drawing pursuant to the provisions of subsection (d)
hereof. The obligation of each Lender to so reimburse the Issuing Lender
shall be absolute and unconditional and shall not be affected by the
occurrence of a Default, an Event of Default or any other occurrence or
event. Any such reimbursement shall not relieve or otherwise impair the
obligation of the Borrower to reimburse the Issuing Lender under any Letter
of Credit, together with interest as hereinafter provided.
(d) Reimbursement. In the event of any drawing under any Letter of
-------------
Credit, the Issuing Lender will promptly notify the Borrower and the Agent.
The Borrower shall reimburse the Issuing Lender on the day of drawing under
any Letter of Credit (either with the proceeds of a Swingline Loan or
Revolving Loan obtained hereunder or otherwise) in same day funds as
provided herein or in the LOC Documents. If the Borrower shall fail to
reimburse the Issuing Lender as provided herein, the unreimbursed amount of
such drawing shall bear interest at the Default Rate. Unless the Borrower
shall immediately notify the Issuing Lender and the Agent of its intent to
otherwise reimburse the Issuing Lender, the Borrower shall be deemed to
have requested a Swingline Loan, or if and to the extent Swingline Loans
shall not be available, a Revolving Loan in the amount of the drawing as
provided in subsection (e) hereof, the proceeds of which will be used to
satisfy the reimbursement obligations. The Borrower's reimbursement
obligations hereunder
-35-
shall be absolute and unconditional under all circumstances irrespective of
any rights of set-off, counterclaim or defense to payment the Borrower may
claim or have against the Issuing Lender, the Agent, the Lenders, the
beneficiary of the Letter of Credit drawn upon or any other Person,
including without limitation any defense based on any failure of the
Borrower to receive consideration or the legality, validity, regularity or
unenforceability of the Letter of Credit. The Issuing Lender will promptly
notify the other Lenders of the amount of any unreimbursed drawing and each
Lender shall promptly pay to the Agent for the account of the Issuing
Lender in Dollars and in immediately available funds, the amount of such
Lender's LOC 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), otherwise such payment shall be made at
or before 12:00 Noon (Charlotte, North Carolina time) on the Business Day
next succeeding the day such notice is received. If such Lender does not
pay such amount to the Issuing Lender in full upon such request, such
Lender shall, on demand, pay to the Agent for the account of the Issuing
Lender interest on the unpaid amount during the period from the date of
such drawing until such Lender pays such amount to the Issuing Lender in
full at a rate per annum equal to, if paid within two (2) Business Days of
the date of drawing, the Federal Funds Effective Rate and thereafter at a
rate equal to the Alternate Base Rate. Each Lender's obligation to make
such payment to the Issuing Lender, and the right of the Issuing Lender to
receive the same, shall be absolute and unconditional, shall not be
affected by any circumstance whatsoever and without regard to the
termination of this Agreement or the Commitments hereunder, the existence
of a Default or Event of Default or the acceleration of the Credit Party
Obligations hereunder and shall be made without any offset, abatement,
withholding or reduction whatsoever.
(e) Repayment with Revolving Loans. On any day on which the Borrower
------------------------------
shall have requested, or been deemed to have requested, (i) a Swingline
Loan borrowing to reimburse a drawing under a Letter of Credit, the
Swingline Lender shall make the Swingline Loan advance pursuant to the
terms of the request or deemed request in accordance with the provisions
for Swingline Loan advances hereunder, or (ii) a Revolving Loan to
reimburse a drawing under a Letter of Credit, the Agent shall give notice
to the Lenders that a Revolving Loan has been requested or deemed requested
in connection with a drawing under a Letter of Credit, in which case a
Revolving Loan borrowing comprised entirely of Alternate Base Rate Loans
(each such borrowing, a "Mandatory Borrowing") shall be immediately made
--------------------
(without giving effect to any termination of the Commitments pursuant to
Section 7.2) pro rata based on each Lender's respective Revolving
--- ----
Commitment Percentage (determined before giving effect to any termination
of the Commitments pursuant to Section 7.2) and in the case of both clauses
(i) and (ii) the proceeds thereof shall be paid directly to the Issuing
Lender for application to the respective LOC Obligations. Each Lender
hereby irrevocably agrees to make such Revolving Loans immediately upon any
such request or deemed request on account of each Mandatory Borrowing in
the amount and in the manner specified in the preceding sentence and on the
same such date notwithstanding (i) the amount of Mandatory Borrowing may
---------------
not comply with the minimum amount for borrowings of Revolving Loans
otherwise required hereunder, (ii) whether any conditions specified in
Section 4.2 are then
-36-
satisfied, (iii) whether a Default or an Event of Default then exists, (iv)
failure for any such request or deemed request for Revolving Loan to be
made by the time otherwise required in Section 2.1(b), (v) the date of such
Mandatory Borrowing, or (vi) any reduction in the Revolving Committed
Amount after any such Letter of Credit may have been drawn upon; provided,
--------
however, that in the event any such Mandatory Borrowing should be less than
-------
the minimum amount for borrowings of Revolving Loans otherwise provided in
Section 2.1(b)(ii), the Borrower shall pay to the Agent for its own account
an administrative fee of $500. In the event that any Mandatory Borrowing
cannot for any reason be made on the date otherwise required above
(including, without limitation, as a result of the commencement of a
proceeding under the Bankruptcy Code with respect to the Borrower), then
each such Lender hereby agrees that it shall forthwith fund (as of the date
the Mandatory Borrowing would otherwise have occurred, but adjusted for any
payments received from the Borrower on or after such date and prior to such
purchase) its Participation Interests in the outstanding LOC Obligations;
provided, further, that in the event any Lender shall fail to fund its
-------- -------
Participation Interest on the day the Mandatory Borrowing would otherwise
have occurred, then the amount of such Lender's unfunded Participation
Interest therein shall bear interest payable to the Issuing Lender upon
demand, at the rate equal to, if paid within two (2) Business Days of such
date, the Federal Funds Effective Rate, and thereafter at a rate equal to
the Alternate Base Rate.
(f) Modification, Extension. The issuance of any supplement,
-----------------------
modification, amendment, renewal, or extension to 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.
(g) Uniform Customs and Practices. The Issuing Lender shall have
-----------------------------
the Letters of Credit be subject to The Uniform Customs and Practice for
Documentary Credits, as published as of the date of issue by the
International Chamber of Commerce (the "UCP"), in which case the UCP may be
---
incorporated therein and deemed in all respects to be a part thereof.
SECTION 2.5 FEES.
----
(a) Commitment Fee. In consideration of the Revolving
--------------
Commitment, the Borrower agrees to pay to the Agent for the ratable benefit
of the Lenders a commitment fee (the "Commitment Fee") in an amount equal
--------------
to the Applicable Percentage per annum on the average daily unused amount
of the aggregate Revolving Committed Amount. For purposes of computing the
Commitment hereunder, Swingline Loans and LOC Obligations shall be
considered usage under the aggregate Revolving Committed Amount. The
Commitment Fee shall be payable quarterly in arrears on the 15th day
following the last day of each calendar quarter for the prior calendar
quarter.
(b) Letter of Credit Fees. In consideration of the LOC
---------------------
Commitments, the Borrower agrees to pay to the Issuing Lender a fee (the
"Letter of Credit Fee") equal to the Applicable Percentage per annum on
--------------------
the average daily maximum amount available to be drawn under each Letter of
Credit from the date of issuance to the date of expiration. In addition to
such Letter of Credit Fee, the Issuing Lender may charge, and retain for
its
-37-
own account without sharing by the other Lenders, an additional facing fee
of one-fourth of one percent (1/4%) per annum on the average daily maximum
amount available to be drawn under each such Letter of Credit issued by it.
The Issuing Lender shall promptly pay over to the Agent for the ratable
benefit of the Lenders (including the Issuing Lender) the Letter of Credit
Fee. The Letter of Credit Fee shall be payable quarterly in arrears on the
15th day following the last day of each calendar quarter for the prior
calendar quarter.
(c) Issuing Lender Fees. In addition to the Letter of Credit
-------------------
Fees payable pursuant to subsection (b) hereof, the Borrower shall pay to
the Issuing Lender for its own account without sharing by the other Lenders
the reasonable and customary charges from time to time of the Issuing
Lender with respect to the amendment, transfer, administration,
cancellation and conversion of, and drawings under, such Letters of Credit
(collectively, the "Issuing Lender Fees").
-------------------
(d) Administrative Fee. The Borrower agrees to pay to the Agent
------------------
the annual administrative fee as described in the Fee Letter.
SECTION 2.6 COMMITMENT REDUCTIONS.
---------------------
(a) Voluntary Reductions. The Borrower shall have the right to
--------------------
terminate or permanently reduce the unused portion of the Revolving
Committed Amount at any time or from time to time upon not less than three
Business Days' prior notice to the Agent (which shall notify the Lenders
thereof as soon as practicable) of each such termination or reduction,
which notice shall specify the effective date thereof and the amount of any
such reduction which shall be in a minimum amount of $5,000,000 or a whole
multiple of $1,000,000 in excess thereof and shall be irrevocable and
effective upon receipt by the Agent, provided that no such reduction or
--------
termination shall be permitted if after giving effect thereto, and to any
prepayments of the Revolving Loans made on the effective date thereof, the
sum of the then outstanding aggregate principal amount of the Revolving
Loans plus Swingline Loans plus LOC Obligations would exceed the aggregate
---- ----
Revolving Committed Amount then in effect.
(b) Mandatory Reductions. On any date that the Revolving Loans
--------------------
are required to be prepaid pursuant to the terms of Section 2.7(b) (ii),
(iii), (iv), (v), and (vi), the Revolving Committed Amount shall be
automatically permanently reduced by the amount of such required prepayment
and/or reduction.
(c) Revolving Commitment Termination Date. The Revolving
-------------------------------------
Commitment, the LOC Commitment and the Swingline Commitment shall
automatically terminate on the Revolving Commitment Termination Date.
SECTION 2.7 PREPAYMENTS.
-----------
(a) Optional Prepayments. The Borrower shall have the right to
--------------------
prepay Loans in whole or in part from time to time; provided, however, that
-------- -------
each partial prepayment of Revolving Loans and Term Loans shall be in a
minimum principal amount of $5,000,000
-38-
and integral multiples of $1,000,000 in excess thereof and each prepayment
of Swingline Loans shall be in a minimum principal amount of $100,000 (or
if the outstanding principal balance of the Swingline Loans is less than
$100,000, such lesser amount) and integral multiples of $100,000 in excess
thereof. The Borrower shall give three Business Days' irrevocable notice in
the case of LIBOR Rate Loans and one Business Day's irrevocable notice in
the case of Alternate Base Rate Loans, to the Agent (which shall notify the
Lenders thereof as soon as practicable). Subject to the foregoing terms,
amounts prepaid under this Section 2.7(a) shall be applied as the Borrower
may elect; provided that if the Borrower fails to specify the application
--------
of an optional prepayment then such prepayment shall be applied first to
Revolving Loans and then pro rata to the remaining principal installments
--- ----
of the Term Loans, in each case first to Alternate Base Rate Loans and then
to LIBOR Rate Loans in direct order of Interest Period maturities. All
prepayments under this Section 2.7(a) shall be subject to Section 2.17, but
otherwise without premium or penalty. Interest on the principal amount
prepaid shall be payable on the next occurring Interest Payment Date that
would have occurred had such loan not been prepaid or, at the request of
the Agent, interest on the principal amount prepaid shall be payable on any
date that a prepayment is made hereunder through the date of prepayment.
Amounts prepaid on the Swingline Loan and the Revolving Loans may be
reborrowed in accordance with the terms hereof. Amounts prepaid on the Term
Loans may not be reborrowed.
(b) Mandatory Prepayments.
---------------------
(i) Revolving Committed Amount. If at any time the sum of the
--------------------------
aggregate principal amount of outstanding Revolving Loans plus
----
Swingline Loans plus LOC Obligations shall exceed the aggregate
----
Revolving Committed Amount then in effect, the Borrower immediately
shall prepay the Revolving Loans and (after all Revolving Loans have
been repaid) cash collateralize the LOC Obligations, in an amount
sufficient to eliminate such excess.
(ii) Excess Cash Flow. Within ninety (90) days after the end of
----------------
each fiscal year (commencing with the fiscal year ending December 31,
1999), the Borrower shall prepay the Term Loans in an amount equal to
(x) fifty percent (50%) of Excess Cash Flow earned during such prior
fiscal year less (y) the amount of any optional prepayments of the
Term Loans or (to the extent accompanied by a permanent reduction in
the Revolving Committed Amount) the Revolving Loans during such prior
fiscal year. Any payments of Excess Cash Flow shall be applied as set
forth in clause (vii) below. Notwithstanding the foregoing to the
contrary, the prepayment of Loans from Excess Cash Flow shall not be
required for any prior fiscal year if the Leverage Ratio for the four
fiscal quarters ending on the last day of such fiscal year is less
than 3.5 to 1.0.
(iii) Asset Dispositions. Upon any Asset Disposition (except in
------------------
connection with a Recovery Event), the Borrower shall prepay the
Loans in an aggregate amount equal to the Net Cash Proceeds derived
from such Asset Disposition to the extent such Net Cash Proceeds are
not used to purchase or otherwise acquire replacement assets or
property within 90 days prior to or 180
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days after receipt of such cash proceeds (or such shorter period as
specified in the Subordinated Debt Documentation) (such prepayment to
be applied as set forth in clause (vii) below).
(iv) Debt Issuances. Immediately upon receipt by any Credit
--------------
Party of proceeds from any Debt Issuance (other than the issuance of
the Subordinated Debt), the Borrower shall prepay the Loans in an
aggregate amount equal to one-hundred percent (100%) of the Net Cash
Proceeds of such Debt Issuance to the Lenders (such prepayment to be
applied as set forth in clause (vii) below).
(v) Issuances of Equity. Immediately upon receipt by a
-------------------
Credit Party of proceeds from any Equity Issuance (other than equity
contributed by the LLC Members), the Borrower shall prepay the Loans
in an aggregate amount equal to: (A) seventy-five percent (75%) of the
Net Cash Proceeds of such Equity Issuance if the Leverage Ratio for
the four fiscal quarters ending on the last day of the fiscal quarter
most recently ended for which the Agent shall have received the
compliance certificate described in Section 5.2(b) shall be greater
than or equal to 3.5 to 1.0 and (B) fifty percent (50%) of the Net
Cash Proceeds of such Equity Issuance if the Leverage Ratio for the
four fiscal quarters ending on the last day of the fiscal quarter most
recently ended for which the Agent shall have received the compliance
certificate described in Section 5.2(b) shall be less than 3.5 to 1.0
(such prepayment to be applied as set forth in clause (vii) below).
(vi) Recovery Event. To the extent of cash proceeds received
--------------
in connection with a Recovery Event, the Borrower shall prepay the
Loans in an aggregate amount equal to one-hundred percent (100%) of
such cash proceeds to the Lenders to the extent such cash proceeds are
not used (A) to repair such damaged assets within 180 days after
receipt of such cash proceeds or property or (B) to purchase or
otherwise acquire replacement assets or property, provided that such
purchase or acquisition is committed within 180 days after receipt of
such cash proceeds and consummated within 270 days thereof (or such
shorter period as specified in the Subordinated Debt Documentation)
(such prepayment to be applied as set forth in clause (vii) below).
Notwithstanding anything to the contrary contained herein, after the
occurrence and during the continuation of an Event of Default, the
Required Lenders shall have the option to require such cash proceeds
to be applied immediately to prepay the Loans in accordance with
clause (vii) below.
(vii) Application of Mandatory Prepayments. All amounts
------------------------------------
required to be paid pursuant to this Section 2.7(b) shall be applied
as follows: (A) with respect to all amounts prepaid pursuant to
Section 2.7(b)(i), to Revolving Loans and (after all Revolving Loans
have been repaid) to a cash collateral account in respect of LOC
Obligations and (B) with respect to all amounts prepaid pursuant to
Sections 2.7(b)(ii) through (vi), (1) first pro rata to the Term Loans
----- --- ----
(ratably to the remaining principal installments thereof) and (2)
second to the Revolving Loans and (after all Revolving Loans have been
------
repaid) to a cash collateral account in
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respect of LOC Obligations. One or more holders of the Tranche B Term
Loans may decline to accept a mandatory prepayment under Sections
2.7(b)(ii), (iii), (iv), (v) or (vi) to the extent there are
sufficient Tranche A Term Loans outstanding to be paid with such
prepayment, in which case 50% of such declined prepayments shall be
allocated pro rata among the Tranche A Term Loans and the Tranche B
Term Loans held by Lenders accepting such prepayments and the
remaining 50% of such declined payment shall be returned to the
Borrower. Within the parameters of the applications set forth above,
prepayments shall be applied first to Alternate Base Rate Loans and
then to LIBOR Rate Loans in direct order of Interest Period
maturities. All prepayments under this Section 2.7(b) shall be subject
to Section 2.17 and be accompanied by interest on the principal amount
prepaid through the date of prepayment.
SECTION 2.8 MINIMUM PRINCIPAL AMOUNT OF TRANCHES.
------------------------------------
All borrowings, payments and prepayments in respect of Revolving Loans and
Term Loans shall be in such amounts and be made pursuant to such elections so
that after giving effect thereto the aggregate principal amount of the Revolving
Loans and Term Loans comprising any Tranche shall not be less than $5,000,000 or
a whole multiple of $1,000,000 in excess thereof.
SECTION 2.9 DEFAULT RATE AND PAYMENT DATES.
------------------------------
(a) If all or a portion of the principal amount of any Loan which
is a LIBOR Rate Loan shall not be paid when due or continued as a LIBOR
Rate Loan in accordance with the provisions of Section 2.10 (whether at the
stated maturity, by acceleration or otherwise), such overdue principal
amount of such Loan shall be converted to an Alternate Base Rate Loan at
the end of the Interest Period applicable thereto.
(b) If all or a portion of (i) the principal amount of any Loan,
(ii) any interest payable thereon, or (iii) any fee or other amount payable
hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest at a
rate per annum (the "Default Rate") which is (x) in the case of overdue
principal, the rate that would otherwise be applicable thereto assuming
Level I interest rate margins (as appearing in the definition of
"Applicable Percentage") were then in effect, plus 2% or (y) in the case of
----
overdue interest (to the extent permitted by applicable law), fees or other
amounts, the Alternate Base Rate, plus the highest Applicable Percentage
----
for Term Loans which are Alternate Base Rate Loans, plus 2%, in each case
----
from the date of such non-payment until such amount is paid in full (after
as well as before judgment). Upon the occurrence and during the
continuance of any other Event of Default hereunder, 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 the Default Rate (after as well as before judgment).
(c) Interest on each Loan shall be payable in arrears on each
Interest Payment Date, provided that interest accruing pursuant to
paragraph (b) of this Section 2.9 shall be payable from time to time on
demand.
-41-
SECTION 2.10 CONVERSION OPTIONS.
------------------
(a) The Borrower may, in the case of Revolving Loans and the
Term Loans, elect from time to time to convert Alternate Base Rate Loans to
LIBOR Rate Loans, by giving the Agent at least three Business Days' prior
irrevocable written notice of such election. A form of Notice of
Conversion/ Extension is attached as Schedule 2.10. If the date upon which
-------------
an Alternate Base Rate Loan is to be converted to a LIBOR Rate Loan is not
a Business Day, then such conversion shall be made on the next succeeding
Business Day and during the period from such last day of an Interest Period
to such succeeding Business Day such Loan shall bear interest as if it were
an Alternate Base Rate Loan. All or any part of outstanding Alternate Base
Rate Loans may be converted as provided herein, provided that (i) no Loan
--------
may be converted into a LIBOR Rate Loan when any Default or Event of
Default has occurred and is continuing and (ii) partial conversions shall
be in an aggregate principal amount of $5,000,000 or a whole multiple of
$1,000,000 in excess thereof.
(b) Any LIBOR Rate Loans may be continued as such upon the
expiration of an Interest Period with respect thereto by compliance by the
Borrower with the notice provisions contained in Section 2.10(a); provided,
--------
that no LIBOR Rate Loan may be continued as such when any Default or Event
of Default has occurred and is continuing, in which case such Loan shall be
automatically converted to an Alternate Base Rate Loan at the end of the
applicable Interest Period with respect thereto. If the Borrower shall fail
to give timely notice of an election to continue a LIBOR Rate Loan, or the
continuation of LIBOR Rate Loans is not permitted hereunder, such LIBOR
Rate Loans shall be automatically converted to Alternate Base Rate Loans at
the end of the applicable Interest Period with respect thereto.
SECTION 2.11 COMPUTATION OF INTEREST AND FEES.
--------------------------------
(a) Interest payable hereunder with respect to Alternate Base
Rate Loans shall be calculated on the basis of a year of 365 days (or 366
days, as applicable) for the actual days elapsed. All other fees, interest
and all other amounts payable hereunder shall be calculated on the basis of
a 360 day year for the actual days elapsed. The Agent shall as soon as
practicable notify the Borrower and the Lenders of each determination of a
LIBOR Rate on the Business Day of the determination thereof. Any change in
the interest rate on a Loan resulting from a change in the Alternate Base
Rate shall become effective as of the opening of business on the day on
which such change in the Alternate Base Rate shall become effective. The
Agent shall as soon as practicable notify the Borrower and the Lenders of
the effective date and the amount of each such change.
(b) Each determination of an interest rate by the Agent pursuant
to any provision of this Agreement shall be conclusive and binding on the
Borrower and the Lenders in the absence of manifest error. The Agent shall,
at the request of the Borrower, deliver to the Borrower a statement showing
the computations used by the Agent in determining any interest rate.
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SECTION 2.12 PRO RATA TREATMENT AND PAYMENTS.
-------------------------------
Each borrowing of Revolving Loans and any reduction of the Revolving
Commitments shall be made pro rata according to the respective Commitment
--- ----
Percentages of the Lenders. Each payment under this Agreement or any Note shall
be applied, first, to any fees then due and owing by the Borrower pursuant to
Section 2.5, second, to interest then due and owing in respect of the Notes of
the Borrower and, third, to principal then due and owing hereunder and under the
Notes of the Borrower. Each payment on account of any fees pursuant to Section
2.5 shall be made pro rata in accordance with the respective amounts due and
--- ----
owing (except as to the portion of the Letter of Credit retained by the Issuing
Lender and the Issuing Lender Fees). Each payment (other than prepayments) by
the Borrower on account of principal of and interest on the Revolving Loans and
on the Term Loans shall be made pro rata according to the respective amounts due
--- ----
and owing in accordance with Section 2.7 hereof. Each optional prepayment on
account of principal of the Loans shall be applied, to such of the Loans as the
Borrower may designate (to be applied pro rata among the Lenders); provided,
--- ---- --------
that prepayments made pursuant to Section 2.15 shall be applied in accordance
with such section. Each mandatory prepayment on account of principal of the
Loans shall be applied in accordance with Section 2.7(b). All payments
(including prepayments) to be made by the Borrower on account of principal,
interest and fees shall be made without defense, set-off or counterclaim (except
as provided in Section 2.18(b)) and shall be made to the Agent for the account
of the Lenders at the Agent's office specified on Schedule 9.2 in Dollars and in
------------
immediately available funds not later than 1:00 P.M. (Charlotte, North Carolina
time) on the date when due. The Agent shall distribute such payments to the
Lenders entitled thereto promptly upon receipt in like funds as received. If
any payment hereunder (other than payments on the LIBOR Rate Loans) becomes due
and payable on a day other than a Business Day, such payment shall be extended
to the next succeeding Business Day, and, with respect to payments of principal,
interest thereon shall be payable at the then applicable rate during such
extension. If any payment on a LIBOR Rate Loan becomes due and payable on a day
other than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day unless the result of such extension would be to extend
such payment into another calendar month, in which event such payment shall be
made on the immediately preceding Business Day.
SECTION 2.13 NON-RECEIPT OF FUNDS BY THE AGENT.
---------------------------------
(a) Unless the Agent shall have been notified in writing by a
Lender prior to the date a Loan is to be made by such Lender (which notice
shall be effective upon receipt) that such Lender does not intend to make
the proceeds of such Loan available to the Agent, the Agent may assume that
such Lender has made such proceeds available to the Agent on such date, and
the Agent may in reliance upon such assumption (but shall not be required
to) make available to the Borrower a corresponding amount. If such
corresponding amount is not in fact made available to the Agent, the Agent
shall be able to recover such corresponding amount from such Lender. If such
Lender does not pay such corresponding amount forthwith upon the Agent's
demand therefor, the Agent will promptly notify the Borrower, and the
Borrower shall immediately pay such corresponding amount to the Agent. The
Agent shall also be entitled to recover from the Lender or the
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Borrower, as the case may be, interest on such corresponding amount in
respect of each day from the date such corresponding amount was made
available by the Agent to the Borrower to the date such corresponding
amount is recovered by the Agent at a per annum rate equal to (i) from the
Borrower at the applicable rate for the applicable borrowing pursuant to
the Notice of Borrowing and (ii) from a Lender at the Federal Effective
Funds Rate.
(b) Unless the Agent shall have been notified in writing by the
Borrower, prior to the date on which any payment is due from it hereunder
(which notice shall be effective upon receipt) that the Borrower does not
intend to make such payment, the Agent may assume that such Borrower has
made such payment when due, and the Agent may in reliance upon such
assumption (but shall not be required to) make available to each Lender on
such payment date an amount equal to the portion of such assumed payment to
which such Lender is entitled hereunder, and if the Borrower has not in
fact made such payment to the Agent, such Lender shall, on demand, repay to
the Agent the amount made available to such Lender. If such amount is
repaid to the Agent on a date after the date such amount was made available
to such Lender, such Lender shall pay to the Agent on demand interest on
such amount in respect of each day from the date such amount was made
available by the Agent to such Lender to the date such amount is recovered
by the Agent at a per annum rate equal to the Federal Funds Effective Rate.
(c) A certificate of the Agent submitted to the Borrower or any
Lender with respect to any amount owing under this Section 2.13 shall be
conclusive in the absence of manifest error.
SECTION 2.14 INABILITY TO DETERMINE INTEREST RATE.
------------------------------------
Notwithstanding any other provision of this Agreement, if (i) the Agent
shall reasonably determine (which determination shall be conclusive and binding
absent manifest error) that, by reason of circumstances affecting the relevant
market, reasonable and adequate means do not exist for ascertaining LIBOR for
such Interest Period, or (ii) the Required Lenders shall reasonably determine
(which determination shall be conclusive and binding absent manifest error) that
the LIBOR Rate does not adequately and fairly reflect the cost to such Lenders
of funding LIBOR Rate Loans that the Borrower has requested be outstanding as a
LIBOR Tranche during such Interest Period, the Agent shall forthwith give
telephone notice of such determination, confirmed in writing, to the Borrower,
and the Lenders at least two Business Days prior to the first day of such
Interest Period. Unless the Borrower shall have notified the Agent upon receipt
of such telephone notice that it wishes to rescind or modify its request
regarding such LIBOR Rate Loans, any Loans that were requested to be made as
LIBOR Rate Loans shall be made as Alternate Base Rate Loans and any Loans that
were requested to be converted into or continued as LIBOR Rate Loans shall be
converted into Alternate Base Rate Loans. Until any such notice has been
withdrawn by the Agent, no further Loans shall be made as, continued as, or
converted into, LIBOR Rate Loans for the Interest Periods so affected.
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SECTION 2.15 ILLEGALITY.
----------
Notwithstanding any other provision of this Agreement, if the adoption of
or any change in any Requirement of Law or in the interpretation or application
thereof by the relevant Governmental Authority to any Lender shall make it
unlawful for such Lender or its LIBOR Lending Office to make or maintain LIBOR
Rate Loans as contemplated by this Agreement or to obtain in the interbank
eurodollar market through its LIBOR Lending Office the funds with which to make
such Loans, (a) such Lender shall promptly notify the Agent and the Borrower
thereof, (b) the commitment of such Lender hereunder to make LIBOR Rate Loans or
continue LIBOR Rate Loans as such shall forthwith be suspended until the Agent
shall give notice that the condition or situation which gave rise to the
suspension shall no longer exist, and (c) such Lender's Loans then outstanding
as LIBOR Rate Loans, if any, shall be converted on the last day of the Interest
Period for such Loans or within such earlier period as required by law as
Alternate Base Rate Loans. The Borrower hereby agrees promptly to pay any
Lender, upon its demand, any additional amounts necessary to compensate such
Lender for actual and direct costs (but not including anticipated profits)
reasonably incurred by such Lender in making any repayment in accordance with
this Section including, but not limited to, any interest or fees payable by such
Lender to lenders of funds obtained by it in order to make or maintain its LIBOR
Rate Loans hereunder; provided, however, that the liability of the Borrower
-------- -------
shall be limited to costs incurred within 180 days prior to the receipt of such
notice. A certificate as to any additional amounts payable pursuant to this
Section submitted by such Lender, through the Agent, to the Borrower shall be
conclusive in the absence of manifest error. Each Lender agrees to use
reasonable efforts (including reasonable efforts to change its LIBOR Lending
Office) to avoid or to minimize any amounts which may otherwise be payable
pursuant to this Section; provided, however, that such efforts shall not cause
-------- -------
the imposition on such Lender of any additional costs or legal or regulatory
burdens deemed by such Lender in its sole discretion to be material.
SECTION 2.16 REQUIREMENTS OF LAW.
-------------------
(a) If the adoption of or any change in any Requirement of Law
or in the interpretation or application thereof or compliance by any Lender
with any request or directive (whether or not having the force of law) from
any central bank or other Governmental Authority made subsequent to the
date hereof:
(i) shall subject such Lender to any tax of any kind
whatsoever with respect to any Letter of Credit or any
application relating thereto, any LIBOR Rate Loan made by it, or
change the basis of taxation of payments to such Lender in
respect thereof (except for changes in the rate of tax on the
overall net income of such Lender);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against
assets held by, deposits or other liabilities in or for the
account of, advances, loans or other extensions of credit by, or
any other acquisition of funds by, any office of such Lender
which is not otherwise included in the determination of the LIBOR
Rate hereunder; or
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(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such
Lender of making or maintaining LIBOR Rate Loans or the Letters of Credit
or to reduce any amount receivable hereunder or under any Note, then, in
any such case, the Borrower shall promptly pay such Lender, upon its
demand, any additional amounts necessary to compensate such Lender for such
additional cost or reduced amount receivable which such Lender reasonably
deems to be material as determined by such Lender with respect to its LIBOR
Rate Loans or Letters of Credit; provided, however, that the liability of
-------- -------
the Borrower shall be limited to costs incurred within 180 days of such
demand. A certificate as to any additional amounts payable pursuant to
this Section submitted by such Lender, through the Agent, to the Borrower
shall be conclusive in the absence of manifest error. Each Lender agrees
to use reasonable efforts (including reasonable efforts to change its
Domestic Lending Office or LIBOR Lending Office, as the case may be) to
avoid or to minimize any amounts which might otherwise be payable pursuant
to this paragraph of this Section; provided, however, that such efforts
-------- -------
shall not cause the imposition on such Lender of any additional costs or
legal or regulatory burdens deemed by such Lender to be material.
(b) If any Lender shall have reasonably determined that the
adoption of or any change in any Requirement of Law regarding capital
adequacy or in the interpretation or application thereof or compliance by
such Lender or any corporation controlling such Lender with any request or
directive regarding capital adequacy (whether or not having the force of
law) from any central bank or Governmental Authority made subsequent to the
date hereof does or shall have the effect of reducing the rate of return on
such Lender's or such corporation's capital as a consequence of its
obligations hereunder to a level below that which such Lender or such
corporation could have achieved but for such adoption, change or compliance
(taking into consideration such Lender's or such corporation's policies
with respect to capital adequacy) by an amount reasonably deemed by such
Lender to be material, then from time to time, within fifteen (15) days
after demand by such Lender, the Borrower shall pay to such Lender such
additional amount as shall be certified by such Lender as being required to
compensate it for such reduction. Such a certificate as to any additional
amounts payable under this Section submitted by a Lender (which certificate
shall include a description of the basis for the computation), through the
Agent, to the Borrower shall be conclusive absent manifest error.
(c) The agreements in this Section 2.16 shall survive the
termination of this Agreement and payment of the Notes and all other
amounts payable hereunder.
SECTION 2.17 INDEMNITY.
---------
The Borrower hereby agrees to indemnify each Lender and to hold such Lender
harmless from any funding loss or expense which such Lender actually sustains or
incurs as a consequence of (a) default by the Borrower in payment of the
principal amount of or interest on any Loan by such Lender in accordance with
the terms hereof, (b) default by the Borrower in accepting a borrowing after the
Borrower has given a notice in accordance with the terms hereof, (c) default
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by the Borrower in making any prepayment after the Borrower has given a notice
in accordance with the terms hereof, and/or (d) the making by the Borrower of a
prepayment of a LIBOR Rate Loan, or the conversion thereof, on a day which is
not the last day of the Interest Period with respect thereto, in each case
including, but not limited to, any such loss or expense arising from interest or
fees payable by such Lender to lenders of funds obtained by it in order to
maintain its LIBOR Rate Loans hereunder. A certificate as to any additional
amounts payable pursuant to this Section submitted by any Lender, through the
Agent, to the Borrower (which certificate must be delivered to the Agent within
thirty days following such default, prepayment or conversion) shall be
conclusive in the absence of manifest error. The agreements in this Section
shall survive termination of this Agreement and payment of the Notes and all
other amounts payable hereunder.
SECTION 2.18 TAXES.
-----
(a) All payments made by the Borrower hereunder or under any
Note will be, except as provided in Section 2.18(b), made free and clear
of, and without deduction or withholding for, any present or future taxes,
levies, imposts, duties, fees, assessments or other charges of whatever
nature now or hereafter imposed by any Governmental Authority or by any
political subdivision or taxing authority thereof or therein with respect
to such payments (but excluding any tax imposed on or measured by the net
income or profits of a Lender or the Agent pursuant to the laws of the
jurisdiction in which it is organized or the jurisdiction in which the
principal office or applicable lending office of such Lender or the Agent
is located or any subdivision thereof or therein and also excluding
franchise taxes, doing business taxes or minimum taxes imposed on it in
such jurisdiction) and all interest, penalties or similar liabilities with
respect thereto (all such non-excluded taxes, levies, imposts, duties,
fees, assessments or other charges being referred to collectively as
"Taxes"). If any Taxes are so levied or imposed, the Borrower agrees to
-----
pay the full amount of such Taxes, and such additional amounts as may be
necessary so that every payment of all amounts due under this Agreement or
under any Note, after withholding or deduction for or on account of any
Taxes, will not be less than the amount provided for herein or in such
Note. The Borrower will furnish to the Agent as soon as practicable after
the date the payment of any Taxes is due pursuant to applicable law
certified copies (to the extent reasonably available and required by law)
of tax receipts evidencing such payment by the Borrower. The Borrower
agrees to indemnify and hold harmless each Lender, and reimburse such
Lender upon its written request, for the amount of any Taxes so levied or
imposed and paid by such Lender.
(b) Each Lender that is not a United States person (as such term
is defined in Section 7701(a)(30) of the Code) agrees to deliver to the
Borrower and the Agent on or prior to the Closing Date, or in the case of a
Lender that is an assignee or transferee of an interest under this
Agreement pursuant to Section 9.6(d) (unless the respective Lender was
already a Lender hereunder immediately prior to such assignment or
transfer), on the date of such assignment or transfer to such Lender, (i)
if the Lender is a "bank" within the meaning of Section 881(c)(3)(A) of the
Code, two accurate and complete original signed copies of Internal Revenue
Service Form 4224 or 1001 (or successor forms) certifying such Lender's
entitlement to a complete exemption from United States withholding tax with
respect to payments to be made under this Agreement and under any Note, or
(ii) if
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the Lender is not a "bank" within the meaning of Section 881(c)(3)(A) of
the Code, either Internal Revenue Service Form 1001 or 4224 as set forth in
clause (i) above, or (x) a certificate substantially in the form of
Schedule 2.18 (any such certificate, a "2.18 Certificate") and (y) two
------------- ----------------
accurate and complete original signed copies of Internal Revenue Service
Form W-8 (or successor form) certifying such Lender's entitlement to an
exemption from United States withholding tax with respect to payments of
interest to be made under this Agreement and under any Note. In addition,
each Lender agrees that it will deliver upon the Borrower's request updated
versions of the foregoing, as applicable, whenever the previous
certification has become obsolete or inaccurate in any material respect,
together with such other forms as may be required in order to confirm or
establish the entitlement of such Lender to a continued exemption from or
reduction in United States withholding tax with respect to payments under
this Agreement and any Note. Each Lender shall, promptly upon the
reasonable request of the Borrower to that effect, deliver to the Borrower
such other forms or documentation as may be required from time to time by
any applicable law, treaty, rule or regulation in order to establish such
Lender's tax status for withholding purposes. Notwithstanding anything to
the contrary contained in Section 2.18(a), but subject to the immediately
succeeding sentence, (x) each Borrower shall be entitled, to the extent it
is required to do so by law, to deduct or withhold Taxes imposed by the
United States (or any political subdivision or taxing authority thereof or
therein) from interest, fees or other amounts payable hereunder for the
account of any Lender which is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax
purposes to the extent that such Lender has not provided to the Borrower
U.S. Internal Revenue Service Forms that establish a complete exemption
from such deduction or withholding and (y) the Borrower shall not be
obligated pursuant to Section 2.18(a) hereof to gross-up payments to be
made to a Lender in respect of Taxes imposed by the United States if (I)
such Lender has not complied with the requirements of this Section 2.18(b)
or (II) the obligation to withhold existed on the date such Lender became a
party to this Agreement. Notwithstanding anything to the contrary
contained in the preceding sentence or elsewhere in this Section 2.18, the
Borrower agrees to pay additional amounts and to indemnify each Lender in
the manner set forth in Section 2.18(a) (without regard to the identity of
the jurisdiction requiring the deduction or withholding) in respect of any
amounts deducted or withheld by it as described in the immediately
preceding sentence as a result of any changes after the Closing Date in any
applicable law, treaty, governmental rule, regulation, guideline or order,
or in the interpretation thereof, relating to the deducting or withholding
of Taxes.
(c) Each Lender agrees to use reasonable efforts (including reasonable
efforts to change its Domestic Lending Office or LIBOR Lending Office, as
the case may be) to avoid or to minimize any amounts which might otherwise
be payable pursuant to this Section; provided, however, that such efforts
-------- -------
shall not cause the imposition on such Lender of any additional costs or
legal or regulatory burdens deemed by such Lender in its sole discretion to
be material.
(d) If the Borrower pays any additional amount pursuant to this
Section 2.18 with respect to a Lender, such Lender shall use reasonable
efforts to obtain a refund of tax or credit against its tax liabilities on
account of such payment; provided that such Lender
--------
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shall have no obligation to use such reasonable efforts if it believes in
good faith, in its sole discretion, that claiming a refund or credit would
cause material adverse tax consequences to it. In the event that such
Lender receives such a refund or credit, such Lender shall pay to the
Borrower an amount that such Lender reasonably determines is equal to the
net tax benefit obtained by such Lender as a result of such payment by the
Borrower. In the event that no refund or credit is obtained with respect to
the Borrower's payments to such Lender pursuant to this Section 2.18, then
such Lender shall upon request provide a certification that such Lender has
not received a refund or credit for such payments. Nothing contained in
this Section 2.18 shall require a Lender to disclose or detail the basis of
its calculation of the amount of any tax benefit or any other amount or the
basis of its determination referred to in the proviso to the first sentence
of this Section 2.18 to the Borrower or any other party.
(e) The agreements in this Section 2.18 shall survive the
termination of this Agreement and the payment of the Notes and all other
amounts payable hereunder.
SECTION 2.19 INDEMNIFICATION; NATURE OF ISSUING LENDER'S DUTIES.
--------------------------------------------------
(a) In addition to its other obligations under Section 2.4, the
Borrower hereby agrees to protect, indemnify, pay and save each Issuing
Lender harmless from and against any and all claims, demands, liabilities,
damages, losses, costs, charges and expenses (including reasonable
attorneys' fees) that the Issuing Lender may incur or be subject to as a
consequence, direct or indirect, of (i) the issuance of any Letter of
Credit or (ii) the failure of the Issuing 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").
---------------
(b) As between the Borrower and the Issuing Lender, the Borrower
shall assume all risks of the acts, omissions or misuse of any Letter of
Credit by the beneficiary thereof. The Issuing Lender shall not be
responsible: (i) 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; (ii) 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; (iii) for failure of the beneficiary of a
Letter of Credit to comply fully with conditions required in order to draw
upon a Letter of Credit; (iv) for errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise, whether or not they be in cipher; (v) for
errors in interpretation of technical terms; (vi) 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 (vii) for
any consequences arising from causes beyond the control of the Issuing
Lender, including, without limitation, any Government Acts. None of the
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above shall affect, impair, or prevent the vesting of the Issuing Lender's
rights or powers hereunder.
(c) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted by
the Issuing Lender, under or in connection with any Letter of Credit or the
related certificates, if taken or omitted in good faith (except in the case
of gross negligence or willful misconduct), shall not put such Issuing
Lender under any resulting liability to the Borrower. It is the intention
of the parties that this Agreement shall be construed and applied to
protect and indemnify the Issuing 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 (except for the gross negligence or willful
misconduct of the Issuing Lender), including, without limitation, any and
all risks of the acts or omissions, whether rightful or wrongful, of any
Government Authority. The Issuing Lender shall not, in any way, be liable
for any failure by the Issuing 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 the Issuing Lender.
(d) Nothing in this Section 2.19 is intended to limit the
reimbursement obligation of the Borrower contained in Section 2.4(d)
hereof. The obligations of the Borrower under this Section 2.19 shall
survive the termination of this Agreement. No act or omissions of any
current or prior beneficiary of a Letter of Credit shall in any way affect
or impair the rights of the Issuing Lender to enforce any right, power or
benefit under this Agreement.
(e) Notwithstanding anything to the contrary contained in this
Section 2.19, the Borrower shall have no obligation to indemnify any
Issuing Lender in respect of any liability incurred by such Issuing Lender
arising out of the gross negligence or willful misconduct of the Issuing
Lender (including action not taken by an Issuing Lender), as determined by
a court of competent jurisdiction.
SECTION 2.20 DEFAULTING LENDERS.
------------------
(a) Generally. In addition to the rights and remedies that may
---------
be available to the Agent or the Borrower under this Agreement or
applicable law, if at any time a Lender is a Defaulting Lender such
Defaulting Lender's right to participate in the administration of the
Loans, this Agreement and the other Credit Documents, including without
limitation, any right to vote in respect of, to consent to or to direct any
action or inaction of the Agent or to be taken into account in the
calculation of the Required Lenders, shall be suspended during the pendency
of such failure or refusal. If a Lender is a Defaulting Lender because it
has failed to make timely payment to the Agent of any amount required to be
paid to the Agent hereunder (without giving effect to any notice or cure
periods), in addition to other rights and remedies which the Agent or the
Borrower may have under the immediately preceding provisions or otherwise,
the Agent shall be entitled (i) to collect interest from such Defaulting
Lender on such delinquent payment for the period from the date on which the
payment was due until the date on which the payment is made at the Federal
Funds Effective Rate, (ii) to withhold or setoff and to apply in
satisfaction of the
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defaulted payment and any related interest, any amounts otherwise payable
to such Defaulting Lender under this Agreement or any other Credit Document
until such defaulted payment and related interest has been paid in full and
such default no longer exists and (iii) to bring an action or suit against
such Defaulting Lender in a court of competent jurisdiction to recover the
defaulted amount and any related interest. Any amounts received by the
Agent in respect of a Defaulting Lender's Loans shall not be paid to such
Defaulting Lender and shall be held uninvested by the Agent and either
applied against the purchase price of such Loans under the following
subsection (b) or paid to such Defaulting Lender upon the default of such
Defaulting Lender being cured.
(b) Purchase of Defaulting Lender's Commitment. Any Lender who is not
------------------------------------------
a Defaulting Lender shall have the right, but not the obligation, in its
sole discretion, to acquire all of a Defaulting Lender's Commitment. If
more than one Lender exercises such right, each such Lender shall have the
right to acquire such proportion of such Defaulting Lender's Commitment on
a pro rata basis. Upon any such purchase, the Defaulting Lender's interest
in the Loans and its rights hereunder (but not its liability in respect
thereof or under the Credit Documents or this Agreement to the extent the
same relate to the period prior to the effective date of the purchase)
shall terminate on the date of purchase, and the Defaulting Lender shall
promptly execute all documents reasonably requested to surrender and
transfer such interest to the purchaser thereof subject to and in
accordance with the requirements set forth in Section 9.6, including an
appropriate Commitment Transfer Supplement. The purchase price for the
Commitment of a Defaulting Lender shall be equal to the amount of the
principal balance of the Loans outstanding and owed by the Borrower to the
Defaulting Lender. Prior to payment of such purchase price to a Defaulting
Lender, the Agent shall apply against such purchase price any amounts
retained by the Agent pursuant to the last sentence of the immediately
preceding subsection (a). The Defaulting Lender shall be entitled to
receive amounts owed to it by the Borrower under the Credit Documents which
accrued prior to the date of the default by the Defaulting Lender, to the
extent the same are received by the Agent from or on behalf of the
Borrower. There shall be no recourse against any Lender or the Agent for
the payment of such sums except to the extent of the receipt of payments
from any other party or in respect of the Loans.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Agreement and to make the
Extensions of Credit herein provided for, the Borrower hereby represents and
warrants to the Agent and to each Lender that:
SECTION 3.1 FINANCIAL CONDITION.
-------------------
The balance sheets and the related statements of income and of cash flows
of the Acquired Business for fiscal years 1995, 1996 and 1997 audited by Xxxxxx
Xxxxxxxx & Co. are complete and correct and present fairly the financial
condition of the Acquired Business as of such dates.
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The balance sheets and the related statements of income and of cash flows of the
Acquired Business for fiscal years 1993 and 1994 reviewed by Xxxxxx Xxxxxxxx &
Co. are complete and correct and present fairly the financial condition of the
Acquired Business as of such dates. All such financial statements, including the
related schedules and notes thereto, have been prepared in accordance with GAAP
applied consistently throughout the periods involved (except as disclosed
therein).
SECTION 3.2 NO CHANGE.
---------
Since December 31, 1997 (and after delivery of annual audited financial
statements in accordance with Section 5.1(a), from the date of the most recently
delivered annual audited financial statements) there has been no development or
event which has had or could reasonably be expected to have a Material Adverse
Effect.
SECTION 3.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW.
----------------------------------------
Each of the Borrower and its Subsidiaries (a) is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, (b) has the requisite power and authority and the legal right to
own and operate all its material property, to lease the material property it
operates as lessee and to conduct the business in which it is currently engaged,
(c) is duly qualified to conduct business 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 except to the extent that
the failure to so qualify or be in good standing could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect and (d) is in
compliance with all Requirements of Law except to the extent that the failure to
comply therewith could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect.
SECTION 3.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.
-------------------------------------------------------
Each of the Borrower and the other Credit Parties has full power and
authority and the legal right to make, deliver and perform the Credit Documents
to which it is party and has taken all necessary limited liability company or
corporate action to authorize the execution, delivery and performance by it of
the Credit Documents to which it is party. No consent or authorization of,
filing with, notice to or other act by or in respect of, any Governmental
Authority or any other Person is required in connection with the borrowings
hereunder or with the execution, delivery or performance of any Credit Document
by the Borrower or the other Credit Parties (other than those which have been
obtained) or with the validity or enforceability of any Credit Document against
the Borrower or the other Credit Parties (except such filings as are necessary
in connection with the perfection of the Liens created by such Credit Documents)
except for consents or authorizations of any Governmental Authority, the failure
of which to possess or obtain could not reasonably be expected to have a
Material Adverse Effect. Each Credit Document to which it is a party has been
duly executed and delivered on behalf of the Borrower or the other Credit
Parties, as the case may be. Each Credit Document to which it is a party
constitutes a legal, valid and binding obligation of the Borrower or the other
Credit Parties, as the case may be, enforceable against the Borrower or such
other Credit Party, as the case may be, in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy,
-52-
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).
SECTION 3.5 NO LEGAL BAR; NO DEFAULT.
------------------------
The execution, delivery and performance of the Credit Documents, the
borrowings thereunder and the use of the proceeds of the Loans will not violate
any Requirement of Law or any Material Contract of the Borrower or its
Subsidiaries (except those as to which waivers or consents have been obtained),
and will not result in, or require, the creation or imposition of any Lien on
any of its or their respective properties or revenues pursuant to any
Requirement of Law or any Material Contract other than the Liens arising under
or contemplated in connection with the Credit Documents. Neither the Borrower
nor any of its Subsidiaries is in default under or with respect to any of its
Material Contracts. No Default or Event of Default has occurred and is
continuing.
SECTION 3.6 NO MATERIAL LITIGATION.
----------------------
Except as set forth in Schedule 3.6, no litigation, investigation or
------------
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the best knowledge of the Borrower, threatened by or against the Borrower or
any of its Subsidiaries or against any of its or their respective properties or
revenues (a) with respect to the Credit Documents or any Loan or any of the
transactions contemplated hereby, or (b) which, if adversely determined, could
reasonably be expected to have a Material Adverse Effect.
SECTION 3.7 INVESTMENT COMPANY ACT.
----------------------
Neither the Borrower nor any Credit Party is an "investment company", or a
company "controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended.
SECTION 3.8 MARGIN REGULATIONS.
------------------
No part of the proceeds of any Loan hereunder will be used directly or
indirectly for any purpose which violates, or which would be inconsistent with,
the provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve System as now and from time to time hereafter in effect. The Borrower
and its Subsidiaries taken as a group do not own "margin stock" except as
identified in the financial statements referred to in Section 3.1 and the
aggregate value of all "margin stock" owned by the Borrower and its Subsidiaries
taken as a group does not exceed 25% of the value of their assets.
SECTION 3.9 ERISA.
-----
Except as set forth in Schedule 3.9, neither a Reportable Event nor an
------------
"accumulated funding deficiency" (within the meaning of Section 412 of the Code
or Section 302 of ERISA) has occurred during the five-year period prior to the
date on which this representation is made or
-53-
deemed made with respect to any Plan, and to the Borrower's knowledge, each Plan
has complied in all material respects with the applicable provisions of ERISA
and the Code, except to the extent that any such occurrence or failure to comply
would not reasonably be expected to have a Material Adverse Effect. No
termination of a Single Employer Plan has occurred resulting in any liability
that has remained underfunded, and no Lien in favor of the PBGC or a Plan has
arisen, during such five-year period which could reasonably be expected to have
a Material Adverse Effect. The present value of all accrued benefits under each
Single Employer Plan (based on those assumptions used to fund such Plans) did
not, as of the last annual valuation date prior to the date on which this
representation is made or deemed made, exceed the value of the assets of such
Plan allocable to such accrued benefits by an amount which, as determined in
accordance with GAAP, could reasonably be expected to have a Material Adverse
Effect. Neither the Borrower nor any Commonly Controlled Entity is currently
subject to any liability for a complete or partial withdrawal from a
Multiemployer Plan which could reasonably be expected to have a Material Adverse
Effect.
SECTION 3.10 ENVIRONMENTAL MATTERS.
---------------------
Except as set forth on Schedule 3.10, and with the exception of matters
-------------
that have been resolved or are not reasonably expected to give rise to a
Material Adverse Effect:
(a) To the best knowledge of the Borrower, the facilities and
properties owned, leased or operated by the Borrower or any of its
Subsidiaries (the "Properties") do not contain any Materials of
----------
Environmental Concern in amounts or concentrations which constitute a
current violation of any Environmental Law.
(b) To the best knowledge of the Borrower, the Properties and all
operations of the Borrower and/or its Subsidiaries at the Properties are in
compliance, and have in the last five years been in compliance, in all
material respects with all applicable Environmental Laws, and there is no
contamination at, under or about the Properties requiring remediation under
any Environmental Law or violation of any Environmental Law with respect to
the Properties or the business operated by the Borrower or any of its
Subsidiaries (the "Business").
--------
(c) Neither the Borrower nor any of its Subsidiaries has received any
outstanding unresolved written or actual notice of violation, alleged
violation, non-compliance, liability or potential liability regarding
environmental matters or compliance with Environmental Laws with regard to
any of the Properties or the Business, nor does the Borrower or any of its
Subsidiaries have knowledge or reason to believe that any such notice will
be received or is being threatened.
(d) To the best knowledge of the Borrower, Materials of Environmental
Concern have not been transported or disposed of from the Properties in
violation of, or in a manner or to a location which could reasonably be
expected to give rise to material liability under any Environmental Law,
nor have any Materials of Environmental Concern been generated, treated,
stored or disposed of at, on or under any of the Properties in material
violation of any applicable Environmental Law.
-54-
(e) No judicial proceeding or governmental or administrative action is
pending or, to the knowledge of the Borrower, threatened, under any
Environmental Law to which the Borrower or any Subsidiary is or will be
named as a party with respect to the Properties or the Business, nor are
there any unresolved consent decrees or other unresolved decrees, consent
orders, administrative orders or other orders, or other administrative or
judicial requirements outstanding under any Environmental Law with respect
to the Properties or the Business.
(f) To the best knowledge of the Borrower, there has been no
unresolved release or threat of release of Materials of Environmental
Concern at or from the Properties, or arising from or related to the
operations of the Borrower or any Subsidiary in connection with the
Properties or otherwise in connection with the Business, in material
violation of or in amounts or in a manner that could reasonably be expected
to give rise to material liability under Environmental Laws.
SECTION 3.11 PURPOSE OF LOANS.
----------------
The proceeds of the Loans will be used to finance the Acquisition in part,
including, without limitation, by the payment of a dividend by the Borrower to
the LLC Members on the Closing Date and the closing costs and expenses related
thereto and for general corporate purposes, including working capital and
letters of credit.
SECTION 3.12 SUBSIDIARIES.
------------
Set forth on Schedule 3.12 is a complete and accurate list of all
-------------
Subsidiaries of the Borrower as of the Closing Date. Information on the
attached Schedule includes state of incorporation; the number of shares of each
class of Capital Stock or other equity interests outstanding; the number and
percentage of outstanding shares of each class of stock; and the number and
effect, if exercised, of all outstanding options, warrants, rights of conversion
or purchase and similar rights. The outstanding Capital Stock and other equity
interests of all Subsidiaries is validly issued, fully paid and non-assessable
and is owned, free and clear of all Liens (other than those arising under or
contemplated in connection with the Credit Documents).
SECTION 3.13 OWNERSHIP.
---------
Each of the Borrower and its Subsidiaries is the owner of, and has good and
marketable title to, or a valid leasehold interest in, all of its respective
assets, except as may be permitted pursuant Section 6.13 hereof, and none of
such assets is subject to any Lien other than Permitted Liens.
SECTION 3.14 INDEBTEDNESS.
------------
Except as otherwise permitted under Section 6.1, the Borrower and its
Subsidiaries have no Indebtedness.
-55-
SECTION 3.15 TAXES.
-----
Each of the Borrower and its Subsidiaries has filed, or caused to be filed,
all tax returns (federal, state, local and foreign) required to be filed and
paid (a) all amounts of taxes shown thereon to be due (including interest and
penalties) and (b) all other taxes, fees, assessments and other governmental
charges (including mortgage recording taxes, documentary stamp taxes and
intangibles taxes) owing by it, except for such taxes (i) which are not yet
delinquent or (ii) that are being contested in good faith and by proper
proceedings, and against which adequate reserves are being maintained in
accordance with GAAP. Neither the Borrower nor any of its Subsidiaries is aware
as of the Closing Date of any proposed tax assessments against it or any of its
Subsidiaries which could reasonably be expected to have a Material Adverse
Effect.
SECTION 3.16 INTELLECTUAL PROPERTY.
---------------------
Each of the Borrower and its Subsidiaries owns, or has the legal right to
use, all trademarks, tradenames, copyrights, technology, know-how and processes
necessary for each of them to conduct its business as currently conducted and as
the Acquired Business was historically conducted by Xxxxx Corning. Set forth on
Schedule 3.16 is a list of all Intellectual Property owned by each of the
-------------
Borrower and its Subsidiaries or that the Borrower or any of its Subsidiaries
has the right to use. Except as provided on Schedule 3.16, no claim has been
-------------
asserted and is pending by any Person challenging or questioning the use of any
such Intellectual Property or the validity or effectiveness of any such
Intellectual Property, nor does the Borrower or any of its Subsidiaries know of
any such claim, and, to the knowledge of the Borrower or any of its
Subsidiaries, the use of such Intellectual Property by the Borrower or any of
its Subsidiaries does not infringe on the rights of any Person, except for such
claims and infringements that in the aggregate, could not reasonably be expected
to have a Material Adverse Effect. Schedule 3.16 may be updated from time to
-------------
time by the Borrower to include new Intellectual Property by giving written
notice thereof to the Agent.
SECTION 3.17 SOLVENCY.
--------
The fair saleable value of each Credit Party's assets, measured on a going
concern basis, exceeds all probable liabilities, including those to be incurred
pursuant to this Credit Agreement. None of the Credit Parties (a) has
unreasonably small capital in relation to the business in which it is or
proposes to be engaged or (b) has incurred, or believes that it will incur after
giving effect to the transactions contemplated by this Credit Agreement, debts
beyond its ability to pay such debts as they become due.
SECTION 3.18 INVESTMENTS.
-----------
All investments of each of the Borrower and its Subsidiaries are Permitted
Investments.
SECTION 3.19 LOCATION OF COLLATERAL.
----------------------
Set forth on Schedule 3.19(a) is a list of the Properties of the Borrower
----------------
and its Subsidiaries with street address, county and state where located. Set
forth on Schedule 3.19(b) is
----------------
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a list of all locations where any tangible personal property of the Borrower and
its Subsidiaries is located, including county and state where located. Set forth
on Schedule 3.19(c) is the chief executive office and principal place of
----------------
business of each of the Borrower and its Subsidiaries. Schedule 3.19(a), 3.19(b)
---------------- -------
and 3.19(c) may be updated from time to time by the Borrower to include new
-------
properties or locations by giving written notice thereof to the Agent.
SECTION 3.20 NO BURDENSOME RESTRICTIONS.
--------------------------
None of the Borrower or any of its Subsidiaries 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.
SECTION 3.21 BROKERS' FEES.
-------------
None of the Borrower or any of its Subsidiaries has any obligation to any
Person in respect of any finder's, broker's, investment banking or other similar
fee in connection with any of the transactions contemplated under the Credit
Documents other than the closing and other fees payable pursuant to this Credit
Agreement or payable in connection with the Acquisition.
SECTION 3.22 LABOR MATTERS.
-------------
There are no collective bargaining agreements or Multiemployer Plans
covering the employees of the Borrower or any of its Subsidiaries as of the
Closing Date, other than as set forth in Schedule 3.22 hereto, and none of the
-------------
Borrower or any of its Subsidiaries (i) has suffered any strikes, walkouts, work
stoppages or other material labor difficulty within the last five years prior to
the Closing Date, other than as set forth in Schedule 3.22 hereto or (ii) has
-------------
knowledge of any potential or pending strike, walkout or work stoppage.
SECTION 3.23 ACCURACY AND COMPLETENESS OF INFORMATION.
----------------------------------------
All factual information heretofore, contemporaneously or hereafter
furnished by or on behalf of the Borrower or any of its Subsidiaries to the
Agent or any Lender for purposes of or in connection with this Agreement or any
other Credit Document, or any transaction contemplated hereby or thereby, is or
will be true and accurate in all material respects and not incomplete by
omitting to state any material fact necessary to make such information not
misleading. There is no fact now known to the Borrower or any of its
Subsidiaries which has, or could reasonably be expected to have, a Material
Adverse Effect which fact has not been set forth herein, in the financial
statements of the Borrower and its Subsidiaries furnished to the Agent and/or
the Lenders, or in any certificate, opinion or other written statement made or
furnished by the Borrower to the Agent and/or the Lenders.
SECTION 3.24 REPRESENTATIONS AND WARRANTIES FROM ACQUISITION
-----------------------------------------------
AGREEMENTS.
----------
As of the Closing Date, each of the representations and warranties made in
the Acquisition Agreements by each of the parties thereto is true and correct in
all material respects.
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SECTION 3.25 YEAR 2000 ISSUE.
---------------
Any reprogramming and related testing required to permit the proper
functioning of the Credit Parties' computer systems in and following the year
2000 will be completed in all material respects prior to September 1, 1999 (that
is, the Credit Parties will be "Year 2000 Compliant"), and the cost to the
Credit Parties of such reprogramming and testing will not result in a Default or
Event of Default or a Material Adverse Effect. Except for such reprogramming
referred to in the preceding sentence as may be necessary, the computer and
management information systems of the Credit Parties and their Subsidiaries are
and, with ordinary course upgrading and maintenance, will continue for the term
of this Agreement to be, adequate for the conduct of its business.
SECTION 3.26 ENTIRE BUSINESS.
----------------
The assets transferred to the Borrower pursuant to the Acquisition
Documents, together with the rights and services made available to the Borrower
pursuant to the Joint Venture Contracts constitute all assets, properties and
rights necessary to conduct the Acquired Business in all material respects as
currently conducted and as historically conducted by Xxxxx Corning.
ARTICLE IV
CONDITIONS PRECEDENT
SECTION 4.1 CONDITIONS TO CLOSING DATE AND INITIAL REVOLVING LOANS AND
----------------------------------------------------------
TERM LOANS MADE IN CONNECTION WITH THE ACQUISITION.
--------------------------------------------------
This Agreement shall become effective upon, and the obligation of each
Lender to make the initial Revolving Loans and Term Loans on the Closing Date is
subject to, the satisfaction of the following conditions precedent:
(a) Execution of Agreement. The Agent shall have received (i)
----------------------
counterparts of this Agreement, executed by a duly authorized officer of
each party hereto, (ii) for the account of each Lender, Revolving Notes,
Tranche A Term Notes and Tranche B Term Notes and for the account of the
Swingline Lender, a Swingline Note and (iii) counterparts of the Security
Agreement, the Member Negative Pledge Agreement, the Member Pledge
Agreement and the Pledge Agreement, in each case conforming to the
requirements of this Agreement and executed by duly authorized officers of
the Credit Parties or other Person, as applicable.
(b) Authority Documents. The Agent shall have received the following:
-------------------
(i) Certificate of Formation/Articles of Incorporation. Copies
--------------------------------------------------
of the certificate of formation, articles of incorporation or other
charter documents, as applicable, of each Credit Party certified to be
true and complete as of a recent date by the appropriate governmental
authority of the state of its incorporation.
-58-
(ii) Resolutions. Copies of resolutions of the managing members
-----------
or the board of directors, as applicable, of each Credit Party
approving and adopting the Credit Documents, the transactions
contemplated therein and authorizing execution and delivery thereof,
certified by an officer of such Credit Party as of the Closing Date to
be true and correct and in force and effect as of such date.
(iii) Operating Agreements/Bylaws. A copy of the operating
---------------------------
agreement or bylaws, as applicable, of each Credit Party certified by
an officer of such Credit Party as of the Closing Date to be true and
correct and in force and effect as of such date.
(iv) Good Standing. Copies of (i) certificates of good standing,
-------------
existence or its equivalent with respect to the each Credit Party
certified as of a recent date by the appropriate governmental
authorities of the state of incorporation and each other state in
which the failure to so qualify and be in good standing could
reasonably be expected to have a Material Adverse Effect on the
business or operations of the Borrower and its Subsidiaries in such
state and (ii) a certificate indicating payment of all corporate
franchise taxes certified as of a recent date by the appropriate
governmental taxing authorities.
(v) Incumbency. An incumbency certificate of each Credit Party
----------
certified by a secretary or assistant secretary to be true and correct
as of the Closing Date.
(c) Legal Opinions of Counsel.
-------------------------
(i) The Agent shall have received an opinion of Xxxxxx & Bird,
LLP, counsel for the Credit Parties, dated the Closing Date and
addressed to the Agent and the Lenders, in form and substance
acceptable to the Agent.
(ii) The Agent shall have received each opinion, report and other
document required to be delivered pursuant to the Acquisition
Documents in connection with the Acquisition, with a letter from each
person delivering such opinion, report and other document authorizing
reliance thereon by the Agent and the Lenders, all in form and
substance acceptable to the Agent.
(d) Personal Property Collateral. The Agent shall have received, in
----------------------------
form and substance satisfactory to the Agent:
(i) searches of Uniform Commercial Code filings in the
jurisdiction of the chief executive office of each Credit Party and
each jurisdiction where any Collateral is located or where a filing
would need to be made in order to perfect the Agent's security
interest in the Collateral, copies of the financing statements on file
in such jurisdictions and evidence that no Liens exist other than
Permitted Liens;
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(ii) duly executed UCC financing statements for each
appropriate jurisdiction as is necessary, in the Agent's sole
discretion, to perfect the Agent's security interest in the
Collateral;
(iii) searches of ownership of Intellectual Property in the
appropriate governmental offices and such patent/trademark/copyright
filings as requested by the Agent in order to perfect the Agent's
security interest in the Collateral;
(iv) all stock certificates evidencing the Capital Stock
pledged to the Agent pursuant to the Pledge Agreement and the Member
Pledge Agreement, together with duly executed in blank undated stock
powers attached thereto (unless, with respect to the pledged Capital
Stock of any Foreign Subsidiary, such stock powers are deemed
unnecessary by the Agent in its reasonable discretion under the law of
the jurisdiction of incorporation of such Person);
(v) such patent/trademark/copyright filings as requested by
the Agent in order to perfect the Agent's security interest in the
Intellectual Property;
(vi) all instruments and chattel paper in the possession of any
of the Credit Parties, together with allonges or assignments as may be
necessary or appropriate to perfect the Agent's security interest in
the Collateral;
(vii) duly executed consents as are necessary, in the Agent's
sole discretion, to perfect the Lenders' security interest in the
Collateral; and
(viii) in the case of any personal property Collateral
located at premises leased by a Credit Party, such estoppel letters,
consents and waivers from the landlords on such real property as may
be required by the Agent.
(e) Real Property Collateral. The Agent shall have received, in form
------------------------
and substance satisfactory to the Agent:
(i) fully executed and notarized mortgages, deeds of trust or
deeds to secure debt (each, as the same may be amended, modified,
restated or supplemented from time to time, a "Mortgage Instrument"
-------------------
and collectively the "Mortgage Instruments") encumbering the fee
--------
interest and/or leasehold interest of any Credit Party in each real
property asset designated in Schedule 3.19(a) (each a "Mortgaged
---------------- ---------
Property" and collectively the "Mortgaged Properties");
--------
(ii) a title report obtained by the Credit Parties in respect of
each of the Mortgaged Properties;
(iii) in the case of each real property leasehold interest of any
Credit Party constituting Mortgaged Property, (a) such estoppel
letters, consents and waivers from the landlords on such real property
as may be required by the Agent,
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which estoppel letters shall be in the form and substance reasonably
satisfactory to the Agent and (b) evidence that the applicable lease,
a memorandum of lease with respect thereto, or other evidence of such
lease in form and substance reasonably satisfactory to the Agent, has
been or will be recorded in all places to the extent necessary or
desirable, in the reasonable judgment of the 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 Agent (or such other Person as may be required or desired under
local law) for the benefit of Lenders;
(iv) ALTA mortgagee title insurance policies issued by Chicago
Title Insurance Company (the "Mortgage Policies"), in amounts not less
-----------------
than the respective amounts designated in Schedule 3.19(a) with
---------------
respect to any particular Mortgaged Property, assuring the Agent that
each of the Mortgage Instruments creates a valid and enforceable first
priority mortgage lien on the applicable Mortgaged Property, free and
clear of all defects and encumbrances except Permitted Liens, which
Mortgage Policies shall be in form and substance reasonably
satisfactory to the Agent and shall provide for affirmative insurance
and such reinsurance as the Agent may reasonably request, all of the
foregoing in form and substance reasonably satisfactory to the Agent;
(v) evidence as to (A) whether any Mortgaged Property is in an
area designated by the Federal Emergency Management Agency as having
special flood or mud slide hazards (a "Flood Hazard Property") and (B)
---------------------
if any Mortgaged Property is a Flood Hazard Property, (1) whether the
community in which such Mortgaged Property is located is participating
in the National Flood Insurance Program, (2) the applicable Credit
Party's written acknowledgment of receipt of written notification from
the Agent (a) as to the fact that such Mortgaged Property is a Flood
Hazard Property and (b) as to whether the community in which each such
Flood Hazard Property is located is participating in the National
Flood Insurance Program and (3) copies of insurance policies or
certificates of insurance of the Borrower and its Subsidiaries
evidencing flood insurance satisfactory to the Agent and naming the
Agent as sole loss payee on behalf of the Lenders;
(vi) maps or plats of an as-built survey of the sites of the
Mortgaged Properties certified to the Agent and the Title Insurance
Company in a manner reasonably satisfactory to them, dated a date
satisfactory to each of the Agent and the Title Insurance Company by
an independent professional licensed land surveyor reasonably
satisfactory to each of the Agent and the Title Insurance Company,
which maps or plats and the surveys on which they are based shall be
sufficient to delete any standard printed survey exception contained
in the applicable title policy and be made in accordance with the
Minimum Standard Detail Requirements for Land Title Surveys jointly
established and adopted by the American Land Title Association and the
American Congress on Surveying and Mapping in 1992, and, without
limiting the generality of the foregoing, there shall be surveyed and
shown on such maps, plats or surveys the following: (A) the
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locations on such sites of all the buildings, structures and other
improvements and the established building setback lines; (B) the lines
of streets abutting the sites and width thereof; (C) all access and
other easements appurtenant to the sites necessary to use the sites;
(D) all roadways, paths, driveways, easements, encroachments and
overhanging projections and similar encumbrances affecting the site,
whether recorded, apparent from a physical inspection of the sites or
otherwise known to the surveyor; (E) any encroachments on any
adjoining property by the building structures and improvements on the
sites; and (F) if the site is described as being on a filed map, a
legend relating the survey to said map; and
(vii) evidence satisfactory to the Agent that each of the
Mortgaged Properties, and the uses of the Mortgaged Properties, are in
compliance in all material respects with all applicable laws,
regulations and ordinances including without limitation health and
environmental protection laws, erosion control ordinances, storm
drainage control laws, doing business and/or licensing laws, zoning
laws (the evidence submitted as to zoning should include the zoning
designation made for each of the Mortgaged Properties, the permitted
uses of each such Mortgaged Properties under such zoning designation
and zoning requirements as to parking, lot size, ingress, egress and
building setbacks) and laws regarding access and facilities for
disabled persons including, but not limited to, the federal
Architectural Barriers Act, the Fair Housing Amendments Act of 1988,
the Rehabilitation Act of 1973 and the Americans with Disabilities Act
of 1990.
(f) Liability and Casualty Insurance. The Agent shall have received
--------------------------------
copies of insurance policies or certificates of insurance evidencing
liability and casualty insurance meeting the requirements set forth herein
or in the Security Documents. The Agent shall be named as loss payee and
additional insured on all such insurance policies for the benefit of the
Lenders.
(g) Fees. The Agent shall have received all fees, if any, owing
----
pursuant to the Fee Letter and Section 2.5.
(h) Litigation. There shall not exist any pending litigation or
----------
investigation affecting or relating to this Agreement and the other Credit
Documents or the Acquisition that in the reasonable judgment of the Agent
could materially adversely affect this Agreement and the other Credit
Documents or the Acquisition, that has not been settled, dismissed,
vacated, discharged or terminated prior to the Closing Date.
(i) Solvency Evidence. The Agent shall have received an officer's
-----------------
certificate for each Credit Party prepared by the chief financial officer
of each such Credit Party as to the financial condition, solvency and
related matters of each such Credit Party, in each case after giving effect
to the Acquisition and the initial borrowings under the Credit Documents,
in substantially the form of Schedule 4.1(i-A) hereto.
-----------------
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(j) Account Designation Letter. The Agent shall have received the
---------------
executed Account Designation Letter in the form of Schedule 1.1(a) hereto.
(k) Acquisition Documents. The Acquisition Documents shall have been
---------------------
completed to the satisfaction of the Agent, the Acquisition shall have been
consummated substantially in accordance with the terms of the Acquisition
Documents. The Borrower shall distribute up to (but not more than)
$250,000,000 from the proceeds of the Loans to the LLC Members in
connection with the consummation of the Acquisition. The Agent shall have
received a copy, certified by an officer of the Borrower as true and
complete, of each Acquisition Agreement as originally executed and
delivered, together with all exhibits and schedules thereto.
(l) Corporate Structure. The corporate capital and ownership
-------------------
structure of the Borrower and its Subsidiaries shall be as described in
Schedule 3.12.
(m) Subordinated Debt. The Borrower shall have received gross
-----------------
proceeds from the issuance of the Subordinated Debt in an aggregate
principal amount of not less than $150,000,000. The terms and conditions
governing the Subordinated Debt shall be acceptable to the Agent and the
Agent shall have received a copy, certified by an officer of the Borrower
as true and complete, of the Subordinated Debt Documentation as originally
executed and delivered, together with all exhibits and schedules thereto.
(n) Government Consent. The Agent shall have received evidence that
------------------
all governmental, shareholder and material third party consents and
approvals necessary in connection with the Acquisition and the related
financings and other transactions contemplated hereby have been obtained
and all applicable waiting periods have expired without any action being
taken by any authority that could restrain, prevent or impose any material
adverse conditions on the Acquisition or such other transactions or that
could seek or threaten any of the foregoing.
(o) Compliance with Laws. The Acquisition and the related financings
--------------------
and other transactions contemplated hereby shall be in compliance with all
applicable laws and regulations (including all applicable securities and
banking laws, rules and regulations).
(p) Bankruptcy. There shall be no bankruptcy or insolvency
----------
proceedings with respect to Borrower or any of its Subsidiaries or the
Acquired Business or any pending injunction with respect to the
Acquisition.
(q) Financial Statements. The Administrative Agent shall have
--------------------
received copies of the financial statements referred to in Section 3.1
hereof, each in form and substance satisfactory to it.
(r) Governance of the Borrower and Related Matters. All matters
----------------------------------------------
relating to the relationship between Xxxxx Corning and GHC and between the
LLC Members, including, without limitation, matters of ownership, capital
structure and voting control, shall be satisfactory to the Administrative
Agent. The Agent shall have received a copy,
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certified by an officer of the Borrower as true and complete, of each of
the Joint Venture Contracts as originally executed and delivered, together
with all exhibits and schedules thereto, and each third-party consent
required or necessary in connection with the assignment of any of the Joint
Venture Contracts to the Borrower.
(s) Transition Services Agreement. The Borrower and Xxxxx Corning
-----------------------------
shall have entered into a transition services agreement dated as of the
date hereof providing for the orderly transition of the Acquired Business
in connection with the transfer thereof from Xxxxx Corning to the Borrower,
which shall be in form and substance satisfactory to the Agent.
(t) Waiver Letter. Xxxxx Corning shall have agreed in writing to
-------------
waive any right it may have to preclude a merger or sale of the Acquired
Business upon the occurrence of an Event of Default and the acceleration of
the Loans and termination of the Commitments pursuant to Section 7. Such
waiver letter shall be satisfactory to the Agent.
(u) Environmental Reports. The Agent shall have received satisfactory
---------------------
environmental reports, including Phase I and Phase II reports, as
applicable, of a recent date relating to the Mortgaged Properties addressed
to the Agent and the Lenders or accompanied by a satisfactory reliance
letter from the environmental consultant that prepared such reports.
(v) Projections. The Agent shall have received the seven year
-----------
financial and operational projections for the Borrower and its Subsidiaries
for the fiscal years 1998 through 2005, together with a detailed
explanation of all management assumptions contained therein, which
projections shall be in form and substance satisfactory to the Agent.
(w) Year 2000 Plan. The Agent shall have received the Borrower's plan
--------------
for becoming Year 2000 Compliant, which plan shall be in form and substance
satisfactory to the Agent.
(x) Additional Matters. All other documents and legal matters in
------------------
connection with the transactions contemplated by this Agreement shall be
reasonably satisfactory in form and substance to the Agent and its counsel.
SECTION 4.2 CONDITIONS TO ALL EXTENSIONS OF CREDIT.
--------------------------------------
The obligation of each Lender to make any Extension of Credit hereunder is
subject to the satisfaction of the following conditions precedent on the date of
making such Extension of Credit:
(a) Representations and Warranties. The representations and
------------------------------
warranties made by the Credit Parties herein, in the Security Documents or
which are contained in any certificate furnished at any time under or in
connection herewith shall be true and correct in all material respects on
and as of the date of such Extension of Credit as if made on and as of such
date (except for those which expressly relate to an earlier date).
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(b) No Default or Event of Default. No Default or Event of Default
------------------------------
shall have occurred and be continuing on such date or after giving effect
to the Extension of Credit to be made on such date unless such Default or
Event of Default shall have been waived in accordance with this Agreement.
(c) Compliance with Commitments. Immediately after giving effect to
---------------------------
the making of any such Extension of Credit (and the application of the
proceeds thereof), (i) the sum of the aggregate principal amount of
outstanding Revolving Loans plus Swingline Loans plus LOC Obligations shall
---- ----
not exceed the aggregate Revolving Committed Amount then in effect, (ii)
the LOC Obligations shall not exceed the LOC Committed Amount and (iii) the
Swingline Loans shall not exceed the Swingline Commitment.
(d) Additional Conditions to Revolving Loans. If such Loan is made
----------------------------------------
pursuant to Section 2.1, all conditions set forth in such Section shall
have been satisfied.
(e) Additional Conditions to Term Loans. If such Loan is made
-----------------------------------
pursuant to Section 2.2A or 2.2B, all conditions set forth in such Section
shall have been satisfied.
(f) Additional Conditions to Swingline Loan. If such Loan is made
---------------------------------------
pursuant to Section 2.3, all conditions set forth in such Section shall
have been satisfied.
(g) Additional Conditions to Letters of Credit. If such Extension of
------------------------------------------
Credit is made pursuant to Section 2.4, all conditions set fort in such
Section shall have been satisfied.
Each request for an Extension of Credit and each acceptance by the Borrower
of any such Extension of Credit shall be deemed to constitute a representation
and warranty by the Borrower as of the date of such Extension of Credit that the
applicable conditions in paragraphs (a) through (g) of this Section have been
satisfied.
ARTICLE V
AFFIRMATIVE COVENANTS
The Borrower hereby covenants and agrees that on the Closing Date, and
thereafter for so long as this Agreement is in effect and until the Commitments
have terminated, no Note remains outstanding and unpaid and the Credit Party
Obligations, together with interest, Commitment Fees and all other amounts owing
to the Agent or any Lender hereunder, are paid in full, the Borrower shall, and
shall cause each of its Subsidiaries (other than in the case of Sections 5.1,
5.2 or 5.7 hereof), to:
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SECTION 5.1 FINANCIAL STATEMENTS.
--------------------
Furnish to the Agent and each of the Lenders:
(a) Annual Financial Statements. As soon as available, but in any
---------------------------
event within ninety (90) days after the end of each fiscal year of the
Borrower a copy of the consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at the end of such fiscal year and the related
consolidated statements of income and retained earnings and of cash flows
of the Borrower and its consolidated Subsidiaries for such year, audited by
a firm of independent certified public accountants of nationally recognized
standing reasonably acceptable to the Required Lenders, setting forth in
each case in comparative form the figures for the previous year, reported
on without a "going concern" or like qualification or exception, or
qualification indicating that the scope of the audit was inadequate to
permit such independent certified public accountants to certify such
financial statements without such qualification (with respect to financial
statements for fiscal year 1998, it is understood and acknowledged that
fiscal year 1998 consists of the three months ended December 31, 1998);
(b) Quarterly Financial Statements. As soon as available and in any
------------------------------
event within forty-five (45) days after the end of each of the first three
fiscal quarters of the Borrower, a company-prepared consolidated balance
sheet of the Borrower and its consolidated Subsidiaries as at the end of
such period and related company-prepared statements of income and retained
earnings and of cash flows for the Borrower and its consolidated
Subsidiaries for such quarterly period and for the portion of the fiscal
year ending with such period, in each case setting forth in comparative
form consolidated figures for the corresponding period or periods of the
preceding fiscal year (subject to normal recurring year-end audit
adjustments); and
(c) Annual Budget Plan. As soon as available, but in any event no
------------------
later than December 15th of each fiscal year, a copy of the detailed annual
budget or plan of the Borrower for the next fiscal year, in form and detail
reasonably acceptable to the Agent and the Required Lenders, together with
a summary of the material assumptions made in the preparation of such
annual budget or plan;
all such financial statements to be complete and correct in all material
respects (subject, in the case of interim statements, to normal recurring year-
end audit adjustments) and to be prepared in reasonable detail and, in the case
of the annual and quarterly financial statements provided in accordance with
subsections (a) and (b) above, in accordance with GAAP applied consistently
throughout the periods reflected therein and further accompanied by a
description of, and an estimation of the effect on the financial statements on
account of, a change, if any, in the application of accounting principles as
provided in Section 1.3.
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SECTION 5.2 CERTIFICATES; OTHER INFORMATION.
-------------------------------
Furnish to the Agent and each of the Lenders:
(a) concurrently with the delivery of the financial statements
referred to in Section 5.1(a) above, a certificate of the independent
certified public accountants reporting on such financial statements stating
that in making the examination necessary therefor no knowledge was obtained
of any Default or Event of Default, except as specified in such
certificate;
(b) concurrently with the delivery of the financial statements
referred to in Sections 5.1(a) and 5.1(b) above, a certificate of a
Responsible Officer stating that, to the best of such Responsible Officer's
knowledge, each of the Credit Parties during such period observed or
performed in all material respects all of its covenants and other
agreements, and satisfied in all material respects every condition,
contained in this Agreement to be observed, performed or satisfied by it,
and that such Responsible Officer has obtained no knowledge of any Default
or Event of Default except as specified in such certificate and such
certificate shall include the calculations in reasonable detail required to
indicate compliance with Section 5.9;
(c) within thirty (30) days after the same are sent, copies of all
reports (other than those otherwise provided pursuant to Section 5.1 and
those which are of a promotional nature) and other financial information
which the Borrower sends to its members, and within thirty days after the
same are filed, copies of all financial statements and non-confidential
reports which the Borrower may make to, or file with, the Securities and
Exchange Commission or any successor or analogous Governmental Authority;
(d) within ninety (90) days after the end of each fiscal year of the
Borrower, a certificate containing information regarding (i) the
calculation of Excess Cash Flow and (ii) the amount of all Asset
Dispositions, Debt Issuances, and Equity Issuances that were made during
the prior fiscal year and amounts received in connection with any Recovery
Event during the prior fiscal year;
(e) promptly upon receipt thereof, a copy of any other report or
"management letter" submitted by independent accountants to the Borrower or
any of its Subsidiaries in connection with any annual, interim or special
audit of the books of such Person; and
(f) promptly, such additional financial and other information as the
Agent, on behalf of any Lender, may from time to time reasonably request.
SECTION 5.3 PAYMENT OF OBLIGATIONS.
----------------------
Pay, discharge or otherwise satisfy at or before maturity or before they
become delinquent, as the case may be, in accordance with industry practice
(subject, where applicable, to specified grace periods) all its obligations of
whatever nature and any additional costs that are imposed as a result of any
failure to so pay, discharge or otherwise satisfy such obligations, except
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(i) when the amount or validity of such obligations and costs is currently being
contested in good faith by appropriate proceedings and reserves, if applicable,
in conformity with GAAP with respect thereto have been provided on the books of
the Borrower or its Subsidiaries, as the case may be or (ii) where the failure
to pay, discharge or satisfy could not reasonably be expected to have a Material
Adverse Effect.
SECTION 5.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE.
------------------------------------------------
Continue to engage in business of the same general type historically
conducted by Xxxxx Corning with respect to the Acquired Business and as now
conducted by it on the Closing Date and preserve, renew and keep in full force
and effect its corporate existence and take all reasonable action to maintain
all rights, privileges and franchises necessary or desirable in the normal
conduct of its business; comply with all Contractual Obligations and
Requirements of Law applicable to it except to the extent that failure to comply
therewith could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
SECTION 5.5 MAINTENANCE OF PROPERTY; INSURANCE.
----------------------------------
(a) Keep all material property useful and necessary in its business
in good working order and condition (ordinary wear and tear and
obsolescence excepted);
(b) Maintain with financially sound and reputable insurance companies
insurance on all its material property (including without limitation its
material tangible Collateral) in at least such amounts and against at least
such risks as are usually insured against in the same general area by
companies engaged in the same or a similar business; and furnish to the
Agent, upon written request, full information as to the insurance carried;
provided, however, that the Borrower and its Subsidiaries may maintain self
-------- -------
insurance plans to the extent companies of similar size and in similar
businesses do so. The Agent shall be named as loss payee or mortgagee, as
its interest may appear, and/or additional insured with respect to any such
insurance providing coverage in respect of any Collateral, and each
provider of any such insurance shall agree, by endorsement upon the policy
or policies issued by it or by independent instruments furnished to the
Agent, that it will give the Agent thirty (30) days prior written notice
before any such policy or policies shall be altered or canceled, and that
no act or default of the Borrower or any of its Subsidiaries or any other
Person shall affect the rights of the Agent or the Lenders under such
policy or policies. The present insurance coverage of the Borrower and its
Subsidiaries is outlined as to carrier, policy number, expiration date,
type and amount on Schedule 5.5(b); and
---------------
(c) In case of any material loss, damage to or destruction of the
Collateral of any Credit Party or any part thereof, such Credit Party shall
promptly give written notice thereof to the Agent generally describing the
nature and extent of such damage or destruction. In case of any loss,
damage to or destruction of the Collateral of any Credit Party or any part
thereof, after the occurrence and during the continuation of an Event of
Default, such Credit Party, whether or not the insurance proceeds, if any,
received on account of such damage or destruction shall be sufficient for
that purpose, at such Credit Party's cost and expense, will at the option
of the Required Lenders, (i) promptly repair or replace the Collateral of
such Credit
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Party so lost, damaged or destroyed or (ii) immediately prepay the Loans
with the insurance proceeds received on account thereof in accordance with
Section 2.7(b)(vi).
SECTION 5.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS.
------------------------------------------------------
Keep proper books of records and account in which full, true and correct
entries in conformity with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its businesses and activities; and
permit, during regular business hours and upon reasonable notice by the Agent or
any Lender, the Agent or any Lender to visit and inspect any of its properties
and examine and make abstracts from any of its books and records (other than
materials protected by the attorney-client privilege and materials which the
Borrower may not disclose without violation of a confidentiality obligation
binding upon it) at any reasonable time and as often as may reasonably be
desired, subject to the rights of tenants in possession of all or a portion of
the Mortgaged Properties pursuant to leases or other occupancy agreements
permitted hereunder and to discuss the business, operations, properties and
financial and other condition of the Borrower and its Subsidiaries with officers
and employees of the Borrower and its Subsidiaries and with its independent
certified public accountants.
SECTION 5.7 NOTICES.
-------
Give notice in writing to the Agent (which shall promptly transmit such
notice to each Lender) of:
(a) within five Business Days after the Borrower knows or has reason
to know thereof, the occurrence of any Default or Event of Default;
(b) promptly, any default or event of default under any Contractual
Obligation of the Borrower or any of its Subsidiaries which could
reasonably be expected to have a Material Adverse Effect;
(c) promptly, any litigation, or any investigation or proceeding
known to the Borrower, affecting the Borrower or any of its Subsidiaries
which, if adversely determined, could reasonably be expected to have a
Material Adverse Effect;
(d) as soon as possible and in any event within thirty (30) days
after the Borrower knows or has reason to know thereof: (i) the occurrence
or expected occurrence of any Reportable Event with respect to any Plan, a
failure to make any required contribution to a Plan, the creation of any
Lien in favor of the PBGC (other than a Permitted Lien) or a Plan or any
withdrawal from, or the termination, Reorganization or Insolvency of, any
Multiemployer Plan or (ii) the institution of proceedings or the taking of
any other action by the PBGC or the Borrower or any Commonly Controlled
Entity or any Multiemployer Plan with respect to the withdrawal from, or
the terminating, Reorganization or Insolvency of, any Plan; and
(e) promptly, any other development or event which could reasonably
be expected to have a Material Adverse Effect.
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Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Borrower proposes to take with respect thereto. In
the case of any notice of a Default or Event of Default, the Borrower shall
specify that such notice is a Default or Event of Default notice on the face
thereof.
SECTION 5.8 ENVIRONMENTAL LAWS.
------------------
(a) Comply in all material respects with, and ensure compliance in
all material respects by all tenants and subtenants, if any, with, all
applicable Environmental Laws and obtain and comply in all material
respects with and maintain, and ensure that all tenants and subtenants
obtain and comply in all material respects with and maintain, any and all
licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws except to the extent that failure to do so
could not reasonably be expected to have a Material Adverse Effect;
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all
lawful orders and directives of all Governmental Authorities regarding
Environmental Laws except to the extent that the same are being contested
in good faith by appropriate proceedings and the pendency of such
proceedings could not reasonably be expected to have a Material Adverse
Effect; and
(c) Defend, indemnify and hold harmless the Agent and the Lenders,
and their respective employees, agents, officers and directors, from and
against any and all claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature known
or unknown, contingent or otherwise, arising out of, or in any way relating
to the material violation of, noncompliance with or liability under, any
Environmental Law applicable to the operations of the Borrower any of its
Subsidiaries or the Properties, or any orders, requirements or demands of
Governmental Authorities related thereto, including, without limitation,
reasonable attorney's and consultant's fees, investigation and laboratory
fees, response costs, court costs and litigation expenses, provided,
--------
however, that the Borrower shall be given notice and the opportunity as
-------
deemed reasonable under the circumstances to address, correct and, as
appropriate, remediate any violations of, noncompliance with or liability
under such Environmental Laws before the Agent or any Lender (i) undertakes
any action to address such violations, noncompliance or liability or (ii)
seeks indemnification for claims, demands, penalties, fines, liabilities,
settlements, damages, costs or other expenses arising therefrom or relating
thereto; provided, further, that the Borrower shall not be obligated to
-------- -------
defend, indemnify, or hold harmless the Agent or any Lender in the event
the Agent or any Lender fails to give the Borrower such opportunity as is
reasonably necessary under the circumstances to correct or, as appropriate,
remediate any of the foregoing or for claims, demands, penalties, fines,
liabilities, settlements, damages, costs or other expenses arising out of
the voluntary and unnecessary intervention, gross negligence or willful
misconduct of the Agent or any
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Lender. The agreements in this paragraph shall survive repayment of the
Notes and all other amounts payable hereunder.
SECTION 5.9 FINANCIAL COVENANTS.
-------------------
Commencing on the day immediately following the Closing Date, the Borrower
shall, and shall cause each of its Subsidiaries to, comply with the following
financial covenants:
(a) Leverage Ratio. The Leverage Ratio as of the last day of
--------------
each fiscal quarter of the Credit Parties shall be less than or equal to:
----------------------------------------------------------------------------------
Fiscal Year March 31 June 30 September 30 December 31
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
1998 5.50 to 1.0
----------------------------------------------------------------------------------
1999 5.25 to 1.0 5.25 to 1.0 5.25 to 1.0 5.25 to 1.0
----------------------------------------------------------------------------------
2000 5.00 to 1.0 5.00 to 1.0 5.00 to 1.0 5.00 to 1.0
----------------------------------------------------------------------------------
2001 4.75 to 1.0 4.75 to 1.0 4.75 to 1.0 4.75 to 1.0
----------------------------------------------------------------------------------
2002 4.50 to 1.0 4.50 to 1.0 4.50 to 1.0 4.50 to 1.0
----------------------------------------------------------------------------------
2003 4.00 to 1.0 4.00 to 1.0 4.00 to 1.0 4.00 to 1.0
----------------------------------------------------------------------------------
2004 3.75 to 1.0 3.75 to 1.0 3.75 to 1.0 3.75 to 1.0
----------------------------------------------------------------------------------
thereafter 3.50 to 1.0
----------------------------------------------------------------------------------
provided, that for purposes of calculating the Leverage Ratio for the first
--------
three (3) fiscal quarters following the Closing Date, Consolidated EBITDA
shall be determined as follows: (i) for the fiscal quarter ending December
31, 1998, Consolidated EBITDA shall be calculated from the FQ1 Financials,
the FQ2 Financials, the FQ3 Financials and the annual audited financial
statements of the Borrower delivered pursuant to Section 5.1(a)(i), (ii)
for the fiscal quarter ending March 31, 1999, Consolidated EBITDA shall
equal Consolidated EBITDA of the Borrower and its Subsidiaries for the two
(2) fiscal quarters then ending plus Consolidated EBITDA of the Acquired
----
Business as reported in the FQ2 Financials and the FQ3 Financials, and
(iii) for the fiscal quarter ending June 30, 1999, Consolidated EBITDA
shall equal Consolidated EBITDA of the Borrower and its Subsidiaries for
the three (3) fiscal quarters then ending plus Consolidated EBITDA of the
----
Acquired Business as reported in the FQ3 Financials.
(b) Consolidated Net Worth. As of the end of any fiscal
----------------------
quarter, commencing with the fiscal quarter ending December 31, 1998,
Consolidated Net Worth of the Borrower and its Subsidiaries shall be
greater than or equal to (i) Consolidated Net Worth as of September 30,
1998 less $10,000,000 plus (ii) 50% of cumulative quarterly Consolidated
Net Income (less cumulative quarterly Consolidated Cash Tax Payments)
commencing on October 1, 1998 (without deduction for any quarterly losses)
plus (iii) 75% of the Net Cash Proceeds received by the Borrower or any of
its Subsidiaries of any Equity Issuance by the Borrower or any of its
Subsidiaries subsequent to the Closing Date.
(c) Interest Coverage Ratio. The Interest Coverage Ratio as of
-----------------------
the last day of each fiscal quarter of the Credit Parties shall be greater
than or equal to:
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--------------------------------------------------------------------------------------------------
Fiscal Year March 31 June 30 September 30 December 31
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
1998 1.75 to 1.0
--------------------------------------------------------------------------------------------------
1999 2.00 to 1.0 2.00 to 1.0 2.00 to 1.0 2.00 to 1.0
--------------------------------------------------------------------------------------------------
2000 2.15 to 1.0 2.15 to 1.0 2.15 to 1.0 2.15 to 1.0
--------------------------------------------------------------------------------------------------
2001 2.25 to 1.0 2.25 to 1.0 2.25 to 1.0 2.25 to 1.0
--------------------------------------------------------------------------------------------------
thereafter 2.50 to 1.0
--------------------------------------------------------------------------------------------------
provided, that for purposes of calculating the Interest Coverage Ratio for
--------
the first three (3) fiscal quarters following the Closing Date,
Consolidated EBITDA and Consolidated Interest Expense shall be calculated
as follows: for the fiscal quarter ending December 31, 1998, Consolidated
EBITDA and Consolidated Interest Expense shall equal Consolidated EBITDA
and Consolidated Interest Expense, respectively, for such fiscal quarter,
for the fiscal quarter ending March 31, 1999, Consolidated EBITDA and
Consolidated Interest Expense shall equal Consolidated EBITDA and
Consolidated Interest Expense, respectively, for the two (2) fiscal
quarters then ending, and for the fiscal quarter ending June 30, 1999,
Consolidated EBITDA and Consolidated Interest Expense shall equal
Consolidated EBITDA and Consolidated Interest Expense, respectively, for
the three (3) fiscal quarters then ending.
(e) Fixed Charge Coverage Ratio. The Fixed Charge Coverage Ratio
---------------------------
as of the last day of each fiscal quarter of the Credit Parties shall be
greater than or equal to 1.05 to 1.0; provided, that for purposes of
--------
calculating the Fixed Charge Coverage Ratio for the first three (3) fiscal
quarters following the Closing Date, Consolidated EBITDA and Consolidated
Fixed Charges shall be calculated as follows: for the fiscal quarter ending
December 31, 1998, Consolidated EBITDA and Consolidated Fixed Charges shall
equal Consolidated EBITDA and Consolidated Fixed Charges, respectively, for
such fiscal quarter, for the fiscal quarter ending March 31, 1999,
Consolidated EBITDA and Consolidated Fixed Charges shall equal Consolidated
EBITDA and Consolidated Fixed Charges, respectively, for the two (2) fiscal
quarters then ending, and for the fiscal quarter ending June 30, 1999,
Consolidated EBITDA and Consolidated Fixed Charges shall equal Consolidated
EBITDA and Consolidated Fixed Charges, respectively, for the three (3)
fiscal quarters then ending; and provided, further, that for such first
-------- -------
three fiscal quarters, (i) Consolidated Scheduled Funded Debt Payments as a
component of Consolidated Fixed Charges shall be calculated as follows:
for the fiscal quarter ending December 31, 1998, Consolidated Scheduled
Funded Debt Payments shall be calculated for the next succeeding fiscal
quarter, for the fiscal quarter ending March 31, 1999, Consolidated
Scheduled Funded Debt Payments shall be calculated for the next succeeding
two fiscal quarters and for the fiscal quarter ending June 30, 1999,
Consolidated Scheduled Funded Debt Payments shall be calculated for the
next succeeding three fiscal quarters and (ii) Capital Expenditures as a
component of Consolidated Fixed Charges shall be calculated as follows:
for the fiscal quarter ending December 31, 1998, Capital Expenditures shall
be calculated based on actual Capital Expenditures made (to the extent
exceeding $5,000,000) during such fiscal quarter, for the fiscal quarter
ending March 31, 1999, Capital Expenditures shall be calculated based on
actual Capital Expenditures made (to the extent exceeding $5,000,000)
during the two fiscal quarters then ending and for the fiscal
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quarter ending June 30, 1999, Capital Expenditures shall be calculated
based on actual Capital Expenditures made (to the extent exceeding
$7,500,000) during the three fiscal quarters then ending.
SECTION 5.10 ADDITIONAL GUARANTORS.
---------------------
The Credit Parties will cause each of their Domestic Subsidiaries, whether
newly formed, after acquired or otherwise existing, to promptly become a
Guarantor hereunder by way of execution of a Joinder Agreement. The guaranty
obligations of any such Additional Credit Party shall be secured by, among other
things, the Collateral of the Additional Credit Party and a pledge of 100% of
the Capital Stock or other equity interest of its Domestic Subsidiaries and 65%
of the Capital Stock or other equity interest of its Foreign Subsidiaries to the
extent that such pledge is permissible under applicable law, and a pledge by the
Borrower or other Credit Party which is the owner of the Capital Stock or other
equity interest in such Subsidiary of 100% of the Capital Stock if it is a
Domestic Subsidiary and 65% of its Capital Stock or other equity interest if it
is a Foreign Subsidiary.
SECTION 5.11 COMPLIANCE WITH LAW.
-------------------
Each Credit Party will, and will cause each of its Subsidiaries to, comply
with all laws, rules, regulations and orders, and all applicable restrictions
imposed by all Governmental Authorities, applicable to it and its Property if
noncompliance with any such law, rule, regulation, order or restriction could
reasonably be expected to have a Material Adverse Effect.
SECTION 5.12 PLEDGED ASSETS.
--------------
(a) Each Credit Party will, and will cause each of its
Subsidiaries to, cause 51% of the Capital Stock in the Borrower, 100% of
the Capital Stock in each other direct or indirect Domestic Subsidiaries of
the Borrower and 65% of the Capital Stock in each of the first-tier Foreign
Subsidiaries of the Borrower and its Domestic Subsidiaries to be subject at
all times to a first priority, perfected Lien in favor of the Agent
pursuant to the terms and conditions of the Security Documents or such
other security documents as the Agent shall reasonably request.
(b) If, subsequent to the Closing Date, a Credit Party shall (a)
acquire any Intellectual Property, securities, instruments, chattel paper
or other personal property required to be delivered to the Agent as
Collateral hereunder or under any of the Security Documents or (b) acquire
or lease any real property, the Borrower shall promptly (and in any event
within twenty (20) Business Days) after any Responsible Officer of a Credit
Party acquires knowledge of same notify the Agent of same. Each Credit
Party shall, and shall cause each of its Subsidiaries to, take such action
at its own expense as requested by the Agent (including, without
limitation, any of the actions described in Section 4.1(d) or (e) hereof)
to ensure that the Agent has a first priority perfected Lien to secure the
Credit Party Obligations in (i) all personal property of the Credit Parties
located in the United States, (ii) all real property of the Credit Parties
located in the United States and (iii) to the extent deemed to be material
by the Agent or the Required Lenders in its or their sole
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reasonable discretion, all other personal and real property of the Credit
Parties, subject in each case only to Permitted Liens. Each Credit Party
shall, and shall cause each of its Subsidiaries to, adhere to the covenants
regarding the location of personal property as set forth in the Security
Documents.
SECTION 5.13 INTEREST RATE PROTECTION AGREEMENTS.
-----------------------------------
Until such time as the Subordinated Debt referred to in clause (a) of the
definition thereof is refinanced with the Subordinated Debt referred to in
clause (b) of the definition thereof, the Borrower shall cause at least 50% of
all Indebtedness arising under this Agreement outstanding on the Closing Date to
be hedged at fixed rates pursuant to Hedging Agreements with a counterparty
reasonably acceptable to the Agent within 90 days following the Closing Date.
Thereafter, the Borrower shall cause at least 50% of all Consolidated Funded
Indebtedness to be hedged at fixed rates pursuant to Hedging Agreements with a
counterparty reasonably acceptable to the Agent; for purposes of this sentence,
the Subordinated Debt shall be deemed to be hedged to the extent it bears a
fixed rate of interest.
SECTION 5.14 YEAR 2000 COMPLIANCE.
--------------------
The Credit Parties will promptly notify the Agent in the event any Credit
Party discovers or determines that any computer application (including those of
its suppliers, vendors and customers) that is material to its or any of its
Subsidiaries' business and operations will not be Year 2000 Compliant, except to
the extent that such failure could not reasonably be expected to have a Material
Adverse Effect.
ARTICLE VI
NEGATIVE COVENANTS
On the Closing Date, and thereafter for so long as this Agreement is in
effect and until the Commitments have terminated, no Note remains outstanding
and unpaid and the Credit Party Obligations, together with interest, Commitment
Fees and all other amounts owing to the Agent or any Lender hereunder, are paid
in full:
SECTION 6.1 INDEBTEDNESS.
------------
The Borrower will not, nor will it permit any Subsidiary to, contract,
create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness arising or existing under this Agreement and
the other Credit Documents, the Subordinated Debt and the Keep-Well
Agreement;
(b) Indebtedness existing as of the Closing Date as referenced
in the financial statements referenced in Section 3.1 (and set out more
specifically in Schedule 6.1(b)) hereto and renewals, refinancings or
---------------
extensions thereof in a
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principal amount not in excess of that outstanding as of the date of such
renewal, refinancing or extension (plus any interest and fees that have
accrued on such principal amount being refinanced);
(c) Indebtedness incurred after the Closing Date consisting of
Capital Leases or Indebtedness incurred to provide all or a portion of the
purchase price or cost of construction of an asset provided that (i) such
Indebtedness when incurred shall not exceed the purchase price or cost of
construction of such asset; (ii) no such Indebtedness shall be refinanced
for a principal amount in excess of the principal balance outstanding
thereon at the time of such refinancing; and (iii) the total amount of all
such Indebtedness shall not exceed $10,000,000 at any time outstanding;
(d) Unsecured intercompany Indebtedness among the Borrower and
its Subsidiaries, provided that any such Indebtedness shall be fully
--------
subordinated to the Credit Party Obligations hereunder on terms reasonably
satisfactory to the Agent;
(e) Indebtedness and obligations owing under Hedging Agreements
relating to the Loans hereunder and other Hedging Agreements entered into
in order to manage existing or anticipated interest rate, exchange rate or
commodity price risks and not for speculative purposes;
(f) Indebtedness and obligations of Credit Parties owing under
documentary letters of credit for the purchase of goods or other
merchandise (but not under standby, direct pay or other letters of credit
except for the Letters of Credit hereunder) generally;
(g) Indebtedness of a Subsidiary of the Borrower, which
Subsidiary was acquired after the Closing Date and which Indebtedness was
in existence at the time of acquisition by the Borrower of such Subsidiary,
and not incurred in contemplation of such acquisition, so long as such
Indebtedness is non-recourse debt (except with respect to such Subsidiary
and its Subsidiaries);
(h) Indebtedness of the Borrower in the form of holdback notes
or deferred purchase price in connection with an acquisition;
(i) obligations in respect of performance bonds and completion
guarantees provided by the Borrower or any Subsidiary of the Borrower in
the ordinary course of business not to exceed $500,000 in the aggregate at
any time;
(j) local lines of credit in favor of Foreign Subsidiaries
secured by Letters of Credit in an aggregate principal amount not to exceed
$25,000,000 at any time, and when aggregated with investments described in
clause (vii) of the definition of "Permitted Investments" and Indebtedness
of the type described in clause (k) below, not exceed $30,000,000 in the
aggregate at any time;
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(k) local lines of credit in favor of Foreign Subsidiaries in an
aggregate principal amount not to exceed $5,000,000 at any time, and when
aggregated with investments described in clause (vii) of the definition of
"Permitted Investments" and Indebtedness of the type described in clause
(j) above, not exceed $30,000,000 in the aggregate at any time;
(l) Guaranty Obligations permitted by Section 6.3; and
(m) other unsecured Indebtedness of Credit Parties which
(together with Indebtedness permitted pursuant to clauses (g) and (h)
above) does not exceed $10,000,000 in the aggregate at any time
outstanding.
SECTION 6.2 LIENS.
-----
The Borrower will not, nor will it permit any Subsidiary to, contract,
create, incur, assume or permit to exist any Lien with respect to any of its
property or assets of any kind (whether real or personal, tangible or
intangible), whether now owned or hereafter acquired, except for Permitted
Liens.
SECTION 6.3 GUARANTY OBLIGATIONS.
--------------------
The Borrower will not, nor will it permit any Subsidiary to, enter into or
otherwise become or be liable in respect of any Guaranty Obligations (excluding
specifically therefrom endorsements in the ordinary course of business of
negotiable instruments for deposit or collection) other than (i) those in favor
of the Lenders in connection herewith, (ii) Guaranty Obligations by the Borrower
or its Subsidiaries of Indebtedness and other obligations referred to in and
permitted under Section 6.1 and (iii) Guaranty Obligations of other obligations
not constituting Indebtedness including real property leases and other contracts
entered into in the ordinary course of business.
SECTION 6.4 NATURE OF BUSINESS.
------------------
The Borrower will not, nor will it permit any Subsidiary to engage in any
business other than a Permitted Business.
SECTION 6.5 CONSOLIDATION, MERGER, SALE OR PURCHASE OF ASSETS, ETC.
------------------------------------------------------
The Borrower will not, nor will it permit any Subsidiary to,
(a) dissolve, liquidate or wind up its affairs, sell, transfer,
lease or otherwise dispose of its property or assets or agree to do so at a
future time except the following, without duplication, shall be expressly
permitted:
(i) Specified Sales;
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(ii) the sale, transfer, lease or other disposition of
property or assets (a) to an unrelated party not in the ordinary
course of business (other than Specified Sales), where and to the
extent that they are the result of a Recovery Event or (b) the sale,
lease, transfer or other disposition of machinery, parts and
equipment, no longer used or useful in the conduct of the business of
the Borrower or any of its Subsidiaries, as appropriate, in its
reasonable discretion;
(iii) the sale, lease or transfer of property or assets
(at fair value) between and among Credit Parties; and
(iv) transfers of Property to Foreign Subsidiaries so long
as (A) such transfers, together with investments in such Foreign
Subsidiaries permitted hereunder do not exceed $30,000,000 in the
aggregate (such transferred Property to be valued at the greater of
book value of fair market value) and (B) the Borrower shall have
provided the Agent with a list of the Property then being transferred
and the related values of such Property; and
(v) the sale, lease or transfer of property or assets
(including sale leaseback transactions not prohibited by Section 6.13)
not to exceed $10,000,000 in the aggregate in any fiscal year;
provided, that in each case (except for clause (iii) above) at least 75%
--------
of the consideration received therefor by the Borrower or any such
Subsidiary is in the form of cash or Cash Equivalents; or
(b) purchase, lease or otherwise acquire (in a single
transaction or a series of related transactions) the property or assets of
any Person (other than purchases or other acquisitions of inventory,
leases, materials, property and equipment in the ordinary course of
business and other Capital Expenditures permitted hereunder, except as
otherwise limited or prohibited herein and other than as permitted pursuant
to Section 2.7(b)(vi) and Section 6.7), or enter into any transaction of
merger or consolidation, except for (i) investments or acquisitions
permitted pursuant to Section 6.6 and 6.7, (ii) the Acquisition, and (iii)
the merger or consolidation of a Credit Party with and into another Credit
Party, provided that if the Borrower is a party thereto, the Borrower will
--------
be the surviving corporation.
SECTION 6.6 ADVANCES, INVESTMENTS AND LOANS.
-------------------------------
The Borrower will not, nor will it permit any Subsidiary to, lend money or
extend credit or make advances to any Person, or purchase or acquire any stock,
obligations or securities of, or any other interest in, or make any capital
contribution to, any Person except for Permitted Investments.
Except (a) as permitted in subsection (iv) of the definition of Permitted
Investments, (b) for the Joint Venture Contracts and (c) as permitted otherwise
to an extent not judged material by the Required Lenders in their discretion,
the Borrower will not, nor will it permit any Subsidiary
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to, enter into any transaction or series of transactions, whether or not in the
ordinary course of business, with any officer, director, shareholder or
Affiliate other than on terms and conditions substantially as favorable to the
Borrower and its Subsidiaries as would be obtainable in a comparable arm's-
length transaction with a Person other than an officer, director, shareholder or
Affiliate.
SECTION 6.7 OWNERSHIP OF SUBSIDIARIES; RESTRICTIONS.
---------------------------------------
The Borrower will not, nor will it permit any Subsidiary to, create, form
or acquire any Subsidiaries, except for Domestic Subsidiaries which are joined
as Additional Credit Parties in accordance with the terms hereof and except for
Foreign Subsidiaries, the total aggregate investments in which shall not exceed
$30,000,000 at any time so long as at least 65% of the Capital Stock of such
Foreign Subsidiaries is pledged under the Credit Documents. The Borrower will
not sell, transfer, pledge or otherwise dispose of any Capital Stock or other
equity interests in any of its Subsidiaries, nor will it permit any of its
Subsidiaries to issue, sell, transfer, pledge or otherwise dispose of any of
their Capital Stock or other equity interests, except in a transaction permitted
by Sections 6.5 or 6.6.
SECTION 6.8 FISCAL YEAR; ORGANIZATIONAL DOCUMENTS; MATERIAL CONTRACTS.
---------------------------------------------------------
The Borrower will not, nor will it permit any of its Subsidiaries to,
change its fiscal year. The Borrower will not, nor will it permit any
Subsidiary to, amend, modify or change its articles of incorporation (or
corporate charter or other similar organizational document) or bylaws (or other
similar document) in any way which could reasonably be expected to have a
Material Adverse Effect without the prior written consent of the Required
Lenders. The Borrower will not, nor will it permit any of its Subsidiaries to,
without the prior written consent of the Agent, amend, modify, waive any default
of or breach under, cancel or terminate or fail to renew or extend or permit the
amendment, modification, waiver of any default of or breach under, cancellation
or termination of any of the Material Contracts, except in the event that such
amendments, modifications, waivers, cancellations or terminations could not
reasonably be expected to have a Material Adverse Effect. The Borrower further
agrees that it will not amend, modify, waive any default of or breach under, or
prior to December 31, 2001, cancel or terminate the Keep-Well Agreement without
the prior written consent of the Agent.
SECTION 6.9 LIMITATION ON RESTRICTED ACTIONS.
--------------------------------
The Borrower will not permit any Subsidiary to, directly or indirectly,
create or otherwise cause or suffer to exist or become effective any encumbrance
or restriction on the ability of any such Subsidiary 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 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 Subordinated
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Debt, (iii) applicable law, (iv) any document or instrument governing
Indebtedness incurred pursuant to Sections 6.1(c), (g) and (h), provided that in
--------
the case of Section 6.1(c), any such restriction contained therein relates only
to the asset or assets constructed or acquired in connection therewith or (v)
any Permitted Lien or any document or instrument governing any Permitted Lien,
provided that any such restriction contained therein relates only to the asset
--------
or assets subject to such Permitted Lien.
SECTION 6.10 RESTRICTED PAYMENTS.
-------------------
The Borrower will not, nor will it permit any Subsidiary to, directly or
indirectly, declare, order, make or set apart any sum for or pay any Restricted
Payment, except (a) to make dividends payable solely in the same class of
Capital Stock of such Person, (b) to make dividends or other distributions
payable to any Credit Party (directly or indirectly through Subsidiaries), (c)
as permitted by Section 6.12, (d) to make distributions in cash to each LLC
Member within 75 days after the end of each taxable year of the Borrower in an
amount equal to the greater of (i) the product of (A) the sum of (x) the maximum
federal corporate income tax rate in effect during such taxable year and (y) six
percent and (B) the sum of the items of ordinary income and expense and net
capital gain allocated to such LLC Member for such taxable year (taking into
account any items specially allocated to such LLC Member resulting from
adjustments under Section 743 of the Code) and (ii) actual income taxes then
being assessed against such LLC Member on items of ordinary income and expense
and net capital gain allocated to such LLC Member so long as, in each case,
immediately both before and after giving effect to such payments no Event of
Default shall then exist and (e) to make distributions to Jefferson with respect
to the purchase price under the LLC Purchase Agreement for net asset value not
to exceed $2.5 million.
SECTION 6.11 PREPAYMENTS OF INDEBTEDNESS, ETC.
---------------------------------
The Borrower will not, nor will it permit any Subsidiary to, (a) after the
issuance thereof, amend or modify (or permit the amendment or modification of)
any of the terms of any Indebtedness (which by its terms is expressly
subordinated to the Indebtedness hereunder) if such amendment or modification
would add or change any terms in a manner adverse to the issuer of such
Indebtedness, or shorten the final maturity or average life to maturity or
require any payment to be made sooner than originally scheduled or increase the
interest rate applicable thereto or change any subordination provision thereof
or (b) make (or give any notice with respect thereto) any voluntary or optional
payment or prepayment, redemption, acquisition for value or defeasance of
(including without limitation, by way of depositing money or securities with the
trustee with respect thereto before due for the purpose of paying when due),
refund, refinance or exchange of any Subordinated Debt; provided, however, that
-------- -------
(i) the Borrower may prepay the Subordinated Debt with up to 50% of the proceeds
of any public offering of the Borrower's Capital Stock if after giving effect
thereto on a Pro Forma Basis the Leverage Ratio for the four fiscal quarters
ending on the last day of the most recent fiscal quarter end shall be less than
3.5 to 1.0 and (ii) the Borrower may refinance the Subordinated Debt (including
any interest and fees accrued thereon) on terms and conditions at least as
favorable to the Lenders as then existing so long as the refinancing
Indebtedness is subordinated to the same or greater extent as the Subordinated
Debt with an applicable interest rate not to exceed 13%, has a weighted average
life to maturity equal to or greater than the Subordinated Debt and requires no
amortization of principal prior to the
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tenth anniversary of the Closing Date; provided, however, the Borrower may
-------- -------
refinance the Bridge Notes by issuing Exchange Notes (as defined in the Senior
Subordinated Credit Agreement) in accordance with the Senior Subordinated Credit
Agreement.
SECTION 6.12 SALE LEASEBACKS.
---------------
The Borrower will not, nor will it permit any Subsidiary to, 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, personal or mixed), whether now owned or hereafter
acquired, (a) which the Borrower or any Subsidiary has sold or transferred or is
to sell or transfer to a Person which is not the Borrower or any Subsidiary or
(b) which the Borrower or any Subsidiary intends to use for substantially the
same purpose as any other property which has been sold or is to be sold or
transferred by the Borrower or any Subsidiary to another Person which is not the
Borrower or any Subsidiary in connection with such lease unless the Net Cash
Proceeds of such transactions are applied in accordance with the provisions of
Section 2.7(b)(iii).
SECTION 6.13 NO FURTHER NEGATIVE PLEDGES.
---------------------------
The Borrower will not, nor will it permit any Subsidiary to, 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, unless such agreement
permits that the obligations of the Credit Parties hereunder may be secured to
the extent contemplated by this Agreement and the other Credit Documents.
ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.1 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) The Borrower shall fail to pay any principal on any Note
when due in accordance with the terms thereof or hereof; or the Borrower
shall fail to reimburse the Issuing Lender for any LOC Obligations when due
in accordance with the terms hereof; or the Borrower shall fail to pay any
interest on any Note or any fee or other amount payable hereunder when due
in accordance with the terms thereof or hereof and such failure shall
continue unremedied for five (5) calendar days (or any Guarantor shall fail
to pay on the Guaranty in respect of any of the foregoing or in respect of
any other Guaranty Obligations thereunder); or
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(b) Any representation or warranty made or deemed made herein, in the
Security Documents or in any of the other Credit Documents or which is
contained in any certificate, document or financial or other statement
furnished at any time under or in connection with this Agreement shall
prove to have been incorrect, false or misleading in any material respect
on or as of the date made or deemed made; or
(c) (i) Any Credit Party shall fail to perform, comply with or observe
any term, covenant or agreement applicable to it contained in Section
5.7(a), Section 5.9 or Article VI hereof ; or (ii) any Credit Party shall
fail to comply with any other covenant, contained in this Credit Agreement
or the other Credit Documents or any other agreement, document or
instrument among any Credit Party, the Agent and the Lenders or executed by
any Credit Party in favor of the Agent or the Lenders (other than as
described in Sections 7.1(a) or 7.1(c)(i) above), and in the event such
breach or failure to comply is capable of cure, is not cured within thirty
(30) days of its occurrence; or
(d) The Borrower or any of its Subsidiaries shall (i) default in any
payment of principal of or interest on (A) the Subordinated Debt or (B) any
Indebtedness (other than the Notes or the Subordinated Debt) in a principal
amount outstanding of at least $5,000,000 in the aggregate for the Borrower
and any of its Subsidiaries beyond the period of grace (not to exceed 30
days), if any, provided in the instrument or agreement under which such
Indebtedness was created; or (ii) default in the observance or performance
of any other agreement or condition relating to (A) the Subordinated Debt
or (B) any Indebtedness (other than the Notes or the Subordinated Debt) in
a principal amount outstanding of at least $5,000,000 in the aggregate for
the Borrower and its Subsidiaries or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event
shall occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Indebtedness (or a
trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity; or
(e) (i) The Borrower, any of its Subsidiaries or GHC Sub shall
commence any case, proceeding or other action (A) under any existing or
future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking (x) to
have an order for relief entered with respect to it or (y) to adjudicate it
a bankrupt or insolvent or (z) reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with
respect to it or its debts, or (B) seeking appointment of a receiver,
trustee, custodian, conservator or other similar official for it or for all
or any substantial part of its assets, or the Borrower or any Subsidiary
shall make a general assignment for the benefit of its creditors; or (ii)
there shall be commenced against the Borrower or any Subsidiary any case,
proceeding or other action of a nature referred to in clause (i) above
which (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or (iii) there shall be commenced against
the Borrower or any Subsidiary any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar
process against all or any substantial part of its
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assets which results in the entry of an order for any such relief which
shall not have been vacated, discharged, or stayed or bonded pending appeal
within 60 days from the entry thereof; or (iv) the Borrower or any
Subsidiary shall take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth in
clause (i), (ii), or (iii) above; or (v) the Borrower or any Subsidiary
shall generally not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due; or
(f) One or more judgments or decrees shall be entered against the
Borrower or any of its Subsidiaries involving in the aggregate a liability
(to the extent not paid when due or covered by insurance) of $7,500,000 or
more and all such judgments or decrees shall not have been paid and
satisfied, vacated, discharged, stayed or bonded pending appeal within 30
days from the entry thereof; or
(g) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan or
any Lien in favor of the PBGC or a Plan (other than a Permitted Lien) shall
arise on the assets of the Borrower or any Commonly Controlled Entity,
(iii) a Reportable Event shall occur with respect to, or proceedings shall
commence to have a trustee appointed, or a trustee shall be appointed, to
administer or to terminate, any Single Employer Plan, which Reportable
Event or commencement of proceedings or appointment of a Trustee is, in the
reasonable opinion of the Required Lenders, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any Single
Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the
Borrower, any of its Subsidiaries or any Commonly Controlled Entity shall,
or in the reasonable opinion of the Required Lenders is likely to, incur
any liability in connection with a withdrawal from, or the Insolvency or
Reorganization of, any Multiemployer Plan or (vi) any other similar event
or condition shall occur or exist with respect to a Plan; and in each case
in clauses (i) through (vi) above, such event or condition, together with
all other such events or conditions, if any, would reasonably foreseeably
have a Material Adverse Effect; or
(h) Either (A) (i) for the five year period commencing on the Closing
Date, either (x) Glass Holdings, GHC Sub or another Subsidiary of Glass
Holdings shall fail to own 51% of the Capital Stock of the Borrower or fail
to control a majority of the Board of Directors of the Borrower or (y)
Xxxxx Corning, Jefferson or a Subsidiary of Xxxxx Corning shall fail to own
49% of the Capital Stock of the Borrower (without giving effect to the
issuance, if any, of the 5% Warrants under the Senior Subordinated Credit
Agreement for the Bridge Notes), and (ii) after the fifth anniversary of
the Closing Date either (x) Xxxxx Corning and Glass Holdings shall fail to
own (directly or indirectly), individually or jointly, at least 51% of the
Capital Stock of the Borrower or (y) the Non-Compete Agreement shall fail
to be in full force and effect or the Non-Compete Term (as defined in the
Non-Compete Agreement) shall have ended, (B) a majority of the Board of
Directors of the Borrower shall consist of individuals who are not
Continuing Directors ("Continuing Director" means, as of any date of
-------------------
determination, (i) an individual who on the date two years prior to such
determination date was a member of the Borrower's Board of Directors and
(ii) any new Director whose nomination for election by the
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Borrower's members was approved by a vote of at least 75% of the Directors
then still in office who either were Directors on the date two years prior
to such determination date or whose nomination for election was previously
so approved); or (C) a "Change of Control" within the meaning of the
Subordinated Debt Documentation shall have occurred; or
(i) The Guaranty or any provision thereof shall cease to be in full
force and effect or any Guarantor or any Person acting by or on behalf of
any Guarantor shall deny or disaffirm any Guarantor's obligations under the
Guaranty; or
(j) Any other Credit Document shall fail to be in full force and
effect or to give the Agent and/or the Lenders the security interests,
liens, rights, powers and privileges purported to be created thereby
(except as such documents may be terminated or no longer in force and
effect in accordance with the terms thereof, other than those indemnities
and provisions which by their terms shall survive); or
(k) There shall occur and be continuing any Event of Default under and
as defined in the Subordinated Debt Documentation or any of the Credit
Party Obligations for any reason shall cease to be designated as senior
indebtedness thereunder.
SECTION 7.2 ACCELERATION; REMEDIES.
----------------------
Upon the occurrence of an Event of Default, then, and in any such event,
(a) if such event is an Event of Default specified in Section 7.1(e) above,
automatically the Commitments shall immediately terminate and the Loans (with
accrued interest thereon), and all other amounts under the Credit Documents
(including without limitation the maximum amount of all contingent liabilities
under Letters of Credit) shall immediately become due and payable, and (b) if
such event is any other Event of Default, either or both of the following
actions may be taken: (i) with the written consent of the Required Lenders, the
Agent may, or upon the written request of the Required Lenders, the Agent shall,
by notice to the Borrower declare the Commitments to be terminated forthwith,
whereupon the Commitments shall immediately terminate; and (ii) with the written
consent of the Required Lenders, the Agent may, or upon the written request of
the Required Lenders, the Agent shall, by notice of default to the Borrower,
declare the Loans (with accrued interest thereon) and all other amounts owing
under this Agreement and the Notes to be due and payable forthwith and direct
the Borrower to pay to the Agent cash collateral as security for the LOC
Obligations for subsequent drawings under then outstanding Letters of Credit an
amount equal to the maximum amount of which may be drawn under Letters of Credit
then outstanding, whereupon the same shall immediately become due and payable.
Except as expressly provided above in this Section 7.2, presentment, demand,
protest and all other notices of any kind are hereby expressly waived.
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ARTICLE VIII
THE AGENT
SECTION 8.1 APPOINTMENT.
-----------
Each Lender hereby irrevocably designates and appoints First Union National
Bank as the Agent of such Lender under this Agreement, and each such Lender
irrevocably authorizes First Union National Bank, as the Agent for such Lender,
to take such action on its behalf under the provisions of this Agreement and to
exercise such powers and perform such duties as are expressly delegated to the
Agent by the terms of this Agreement, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Agent.
SECTION 8.2 DELEGATION OF DUTIES.
--------------------
The Agent may execute any of its duties under this Agreement by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care. Without limiting the foregoing, the Agent
may appoint one of its affiliates as its agent to perform the functions of the
Agent hereunder relating to the advancing of funds to the Borrower and
distribution of funds to the Lenders and to perform such other related functions
of the Agent hereunder as are reasonably incidental to such functions.
SECTION 8.3 EXCULPATORY PROVISIONS.
----------------------
Neither the Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates shall be (i) liable for any action lawfully
taken or omitted to be taken by it or such Person under or in connection with
this Agreement (except for its or such Person's own gross negligence or willful
misconduct) or (ii) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by the Borrower or any
officer thereof contained in this Agreement or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Agent under or in connection with, this Agreement or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of any of the Credit
Documents or for any failure of the Borrower to perform its obligations
hereunder or thereunder. The Agent shall not be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance by the
Borrower of any of the agreements contained in, or conditions of, this
Agreement, or to inspect the properties, books or records of the Borrower.
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SECTION 8.4 RELIANCE BY AGENT.
-----------------
The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any Note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it in good faith
to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Borrower), independent accountants and other
experts selected by the Agent. The Agent may deem and treat the payee of any
Note as the owner thereof for all purposes unless (a) a written notice of
assignment, negotiation or transfer thereof shall have been filed with the Agent
and (b) the Agent shall have received the written agreement of such assignee to
be bound hereby as fully and to the same extent as if such assignee were an
original Lender party hereto, in each case in form satisfactory to the Agent.
The Agent shall be fully justified in failing or refusing to take any action
under this Agreement unless it shall first receive such advice or concurrence of
the Required Lenders as it deems appropriate or 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 or continuing to take any such action.
The Agent shall in all cases be fully protected in acting, or in refraining from
acting, under any of the Credit Documents in accordance with a request of the
Required Lenders or all of the Lenders, as may be required under this Agreement,
and such request and any action taken or failure to act pursuant thereto shall
be binding upon all the Lenders and all future holders of the Notes.
SECTION 8.5 NOTICE OF DEFAULT.
-----------------
The Agent shall not be deemed to have knowledge or notice of the occurrence
of any Default or Event of Default hereunder unless the Agent has received
notice from a Lender or the Borrower referring to this Agreement, describing
such Default or Event of Default and stating that such notice is a "notice of
default". In the event that the Agent receives such a notice, the Agent shall
give prompt notice thereof to the Lenders. The Agent shall take such action
with respect to such Default or Event of Default as shall be reasonably directed
by the Required Lenders; provided, however, that unless and until the Agent
-------- -------
shall have received such directions, the Agent may (but shall not be obligated
to) take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable in the best interests of
the Lenders except to the extent that this Credit Agreement expressly requires
that such action be taken, or not taken, only with the consent or upon the
authorization of the Required Lenders, or all of the Lenders, as the case may
be.
SECTION 8.6 NON-RELIANCE ON AGENT AND OTHER LENDERS.
---------------------------------------
Each Lender expressly acknowledges that neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates has made
any representation or warranty to it and that no act by the Agent hereinafter
taken, including any review of the affairs of the Borrower, shall be deemed to
constitute any representation or warranty by the Agent to any Lender. Each
Lender represents to the Agent that it has, independently and without reliance
upon the Agent or any other Lender, and based on such documents and information
as it has deemed appropriate, made its own appraisal of and investigation into
the business, operations, property,
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financial and other condition and creditworthiness of the Borrower and made its
own decision to make its Loans hereunder and enter into this Agreement. Each
Lender also represents that it will, independently and without reliance upon the
Agent or any other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement,
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the Agent
hereunder, the Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or creditworthiness of
the Borrower which may come into the possession of the Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates.
SECTION 8.7 INDEMNIFICATION.
---------------
The Lenders agree to indemnify the Agent in its capacity hereunder (to the
extent not reimbursed by the Borrower and without limiting the obligation of the
Borrower to do so), ratably according to their respective Commitment Percentages
in effect on the date on which indemnification is sought under this Section,
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind whatsoever which may at any time (including, without limitation, at any
time following the payment of the Notes) be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of any Credit Document
or any documents contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby or any action taken or omitted by
the Agent under or in connection with any of the foregoing; provided, however,
-------- -------
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements to the extent resulting from the Agent's gross
negligence or willful misconduct, as determined by a court of competent
jurisdiction. The agreements in this Section 8.7 shall survive the termination
of this Agreement and payment of the Notes and all other amounts payable
hereunder.
SECTION 8.8 AGENT IN ITS INDIVIDUAL CAPACITY.
--------------------------------
The Agent and its affiliates may make loans to, accept deposits from and
generally engage in any kind of business with the Borrower as though the Agent
were not the Agent hereunder. With respect to its Loans made or renewed by it
and any Note issued to it, the Agent shall have the same rights and powers under
this Agreement as any Lender and may exercise the same as though it were not the
Agent, and the terms "Lender" and "Lenders" shall include the Agent in its
individual capacity.
SECTION 8.9 SUCCESSOR AGENT.
---------------
The Agent may resign as Agent upon 30 days' prior notice to the Borrower
and the Lenders. If the Agent shall resign as Agent under this Agreement and
the Notes, then the Required Lenders shall appoint from among the Lenders a
successor agent for the Lenders, which successor agent shall be approved by the
Borrower, whereupon such successor agent shall
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succeed to the rights, powers and duties of the Agent, and the term "Agent"
shall mean such successor agent effective upon such appointment and approval,
and the former Agent's rights, powers and duties as Agent shall be terminated,
without any other or further act or deed on the part of such former Agent or any
of the parties to this Agreement or any holders of the Notes. After any retiring
Agent's resignation as Agent, the provisions of this Section 8.9 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 AMENDMENTS, WAIVERS AND RELEASE OF COLLATERAL.
---------------------------------------------
Neither this Agreement, nor any of the Notes, nor any of the other Credit
Documents, nor any terms hereof or thereof may be amended, supplemented, waived
or modified except in accordance with the provisions of this Section nor may be
released except as specifically provided herein or in the Security Documents or
in accordance with the provisions of this Section 9.1. The Required Lenders
may, or, with the written consent of the Required Lenders, the Agent may, from
time to time, (a) enter into with the Borrower written amendments, supplements
or modifications hereto and to the other Credit Documents for the purpose of
adding any provisions to this Agreement or the other Credit Documents or
changing in any manner the rights of the Lenders or of the Borrower hereunder or
thereunder or (b) waive, on such terms and conditions as the Required Lenders
may specify in such instrument, any of the requirements of this Agreement or the
other Credit Documents or any Default or Event of Default and its consequences
or (c) release collateral in accordance with the terms hereof or of any Security
Document or on such other terms and conditions as the Required Lenders may
agree; provided, however, that no such waiver and no such amendment, waiver,
-------- -------
supplement, modification or release shall:
(i) reduce the amount or extend the scheduled date of maturity
of any Loan or Note or any installment thereon, or reduce the stated
rate of any interest or fee payable hereunder (other than interest at
the Default Rate) or extend the scheduled date of any payment thereof
or increase the amount or extend the expiration date of any Lender's
Commitment, in each case without the written consent of each Lender
directly affected thereby, or
(ii) amend, modify or waive any provision of this Section 9.1 or
reduce the percentage specified in the definition of Required Lenders,
without the written consent of all the Lenders, or
(iii) amend, modify or waive any provision of Article VIII
without the written consent of the then Agent, or
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(iv) release any of the Guarantors from their obligations under
the Guaranty, without the written consent of all of the Lenders, or
(v) release all or substantially all of the collateral, without
the written consent of all of the Lenders, or
(vi) without the consent of Lenders holding in the aggregate
more than 50% of the outstanding Tranche A Term Loans and more than
50% of the outstanding Tranche B Term Loans, extend the time for or
the amount or the manner of application of proceeds of any mandatory
prepayment required by Section 2.7(b)(ii), (iii), (iv), (v) or (vi)
hereof, or
(vii) amend, modify or waive the Lender approval requirements of
any provision of the Credit Documents which at such time requires the
consent, approval or request of the Required Lenders or all Lenders,
as the case may be, without the written consent of all of the Lenders
and, provided, further, that no amendment, waiver or consent affecting
-------- -------
the rights or duties of the Agent or the Issuing Lender under any
Credit Document shall in any event be effective, unless in writing and
signed by the Agent and/or the Issuing Lender, as applicable, in
addition to the Lenders required hereinabove to take such action.
Any such waiver, any such amendment, supplement or modification and any
such release shall apply equally to each of the Lenders and shall be binding
upon the Borrower, the other Credit Parties, the Lenders, the Agent and all
future holders of the Notes. In the case of any waiver, the Borrower, the other
Credit Parties, the Lenders and the Agent shall be restored to their former
position and rights hereunder and under the outstanding Loans and Notes and
other Credit Documents, and any Default or Event of Default waived shall be
deemed to be cured and not continuing; but no such waiver shall extend to any
subsequent or other Default or Event of Default, or impair any right consequent
thereon.
Notwithstanding any of the foregoing to the contrary, the consent of the
Borrower shall not be required for any amendment, modification or waiver of the
provisions of Article VIII (other than the provisions of Section 8.9); provided,
--------
however, that the Agent will provide written notice to the Borrower of any such
-------
amendment, modification or waiver. In addition, the Borrower and the Lenders
hereby authorize the Agent to modify this Credit Agreement by unilaterally
amending or supplementing Schedule 2.1(a) from time to time in the manner
---------------
requested by the Borrower, the Agent or any Lender in order to reflect any
assignments or transfers of the Loans as provided for hereunder; provided,
--------
however, that the Agent shall promptly deliver a copy of any such modification
-------
to the Borrower and each Lender.
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.
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SECTION 9.2 NOTICES.
-------
Except as otherwise provided in Article II, all notices, requests and
demands to or upon the respective parties hereto to be effective shall be in
writing (including by telecopy), and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made (a) when delivered by
hand, (b) when transmitted via telecopy (or other facsimile device) to the
number set out herein, (c) the day following the day on which the same has been
delivered prepaid to a reputable national overnight air courier service, or (d)
the third Business Day following the day on which the same is sent by certified
or registered mail, postage prepaid, in each case, addressed as follows in the
case of the Borrower, the other Credit Parties and the Agent, and as set forth
on Schedule 9.2 in the case of the Lenders, or to such other address as may be
------------
hereafter notified by the respective parties hereto and any future holders of
the Notes:
The Borrower Advanced Glassfiber Yarns LLC
and the other 0000 Xxxxxxx Xxxx
Credit Parties: Xxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, President
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
with a copy to:
Xxxxx Corning World Headquarters
Xxx Xxxxx Xxxxxxx Xxxxxxx
Xxxxxx, Xxxx 00000
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
BGF Industries, Inc.
0000 Xxxxxx Xxxxxxx Xxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
The Agent: First Union National Bank
Xxx Xxxxx Xxxxx Xxxxxx, XX00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Syndication Agency Services
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
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with a copy to:
First Union National Bank
Xxx Xxxxx Xxxxx Xxxxxx, XX-0
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxxxx Xxxx
Senior Vice President
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
SECTION 9.3 NO WAIVER; CUMULATIVE REMEDIES.
------------------------------
No failure to exercise and no delay in exercising, on the part of the Agent
or any Lender, any right, remedy, power or privilege hereunder shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.
SECTION 9.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
------------------------------------------
All representations and warranties made hereunder and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the Notes and the
making of the Loans, provided that all such representations and warranties shall
--------
terminate on the date upon which the Commitments have been terminated and all
amounts owing hereunder and under any Notes have been paid in full.
SECTION 9.5 PAYMENT OF EXPENSES AND TAXES.
-----------------------------
The Borrower agrees (a) to pay or reimburse the Agent for all its
reasonable out-of-pocket costs and expenses incurred in connection with the
development, preparation, negotiation, printing and execution of, and any
amendment, supplement or modification to, this Agreement and the other Credit
Documents and any other documents prepared in connection herewith or therewith,
and the consummation and administration of the transactions contemplated hereby
and thereby, together with the reasonable fees and disbursements of counsel to
the Agent, (b) to pay or reimburse each Lender and the Agent for all its
reasonable costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the Notes and any such other
documents, including, without limitation, the reasonable fees and disbursements
of counsel to the Agent and to the Lenders (including reasonable allocated costs
of in-house legal counsel), and (c) on demand, to pay, indemnify, and hold each
Lender and the Agent harmless from, any and all recording and filing fees and
any and all liabilities with respect to, or resulting from any delay in paying,
stamp, excise and other similar taxes, if any, which may be payable or
determined to be payable in connection with the execution and delivery of, or
consummation or administration of any of the transactions contemplated by, or
any amendment, supplement or modification of, or any waiver or consent under or
in respect of, the Credit Documents and any such other documents, and (d) to
pay, indemnify, and hold each Lender and
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the Agent and their Affiliates harmless from and against, any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of the
Credit Documents and any such other documents and the use, or proposed use, of
proceeds of the Loans (all of the foregoing, collectively, the "indemnified
-----------
liabilities"); provided, however, that the Borrower shall not have any
----------- -------- -------
obligation hereunder to the Agent or any Lender with respect to indemnified
liabilities arising from the gross negligence or willful misconduct of the Agent
or any such Lender, as determined by a court of competent jurisdiction. The
agreements in this Section 9.5 shall survive repayment of the Loans, Notes and
all other amounts payable hereunder.
SECTION 9.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS; PURCHASING
--------------------------------------------------
LENDERS.
-------
(a) This Agreement shall be binding upon and inure to the benefit of
the Borrower, the Lenders, the Agent, all future holders of the Notes and
their respective successors and assigns, except that the Borrower may not
assign or transfer any of its rights or obligations under this Agreement or
the other Credit Documents without the prior written consent of each
Lender.
(b) Any Lender may, in the ordinary course of its lending business and
in accordance with applicable law, at any time sell to one or more banks or
other entities ("Participants") participating interests in any Loan owing
------------
to such Lender, any Note held by such Lender, any Commitment of such
Lender, or any other interest of such Lender hereunder. In the event of
any such sale by a Lender of participating interests to a Participant, such
Lender's obligations under this Agreement to the other parties to this
Agreement shall remain unchanged, such Lender shall remain solely
responsible for the performance thereof, such Lender shall remain the
holder of any such Note for all purposes under this Agreement, and the
Borrower and the Agent shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement. No Lender shall transfer or grant any participation under which
the Participant shall have rights to approve any amendment to or waiver of
this Agreement or any other Credit Document except to the extent such
amendment or waiver would (i) extend the scheduled maturity of any Loan or
Note or any installment thereon in which such Participant is participating,
or reduce the stated rate or extend the time of payment of interest or fees
thereon (except in connection with a waiver of interest at the Default
Rate) or reduce the principal amount thereof, or increase the amount of the
Participant's participation over the amount thereof then in effect (it
being understood that a waiver of any Default or Event of Default shall not
constitute a change in the terms of such participation, and that an
increase in any Commitment or Loan shall be permitted without consent of
any participant if the Participant's participation is not increased as a
result thereof), (ii) release any of the Guarantors from their obligations
under the Guaranty, (iii) release all or substantially all of the
collateral, or (iv) consent to the assignment or transfer by the Borrower
of any of its rights and obligations under this Agreement. In the case of
any such participation, the Participant shall not have any rights under
this Agreement or any of the other Credit Documents (the Participant's
rights against such Lender in respect of such participation to be those set
forth in the agreement
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executed by such Lender in favor of the Participant relating thereto) and
all amounts payable by the Borrower hereunder shall be determined as if
such Lender had not sold such participation, provided that each Participant
--------
shall be entitled to the benefits of Sections 2.16, 2.17, 2.18 and 9.5 with
respect to its participation in the Commitments and the Loans outstanding
from time to time; provided, that no Participant shall be entitled to
--------
receive any greater amount pursuant to such Sections than the transferor
Lender would have been entitled to receive in respect of the amount of the
participation transferred by such transferor Lender to such Participant had
no such transfer occurred.
(c) Any Lender may, in the ordinary course of its lending business and
in accordance with applicable law, at any time, sell or assign to any
Lender or any affiliate thereof or any fund that invests in bank loans and
is advised or managed by an investment advisor to an existing Lender and
with the consent of the Agent and, so long as no Event of Default has
occurred and is co ntinuing, the Borrower (in each case, which consent
shall not be unreasonably withheld), to one or more additional Eligible
Assignees ("Purchasing Lenders"), all or any part of its rights and
------------------
obligations under this Agreement and the Notes in minimum amounts of
$5,000,000 with respect to its Revolving Commitment, its Revolving Loans
and its Tranche A Term Loans and $2,500,000 with respect to its Tranche B
Term Loans (or, if less, the entire amount of such Lender's obligations),
pursuant to a Commitment Transfer Supplement, executed by such Purchasing
Lender and such transferor Lender (and, in the case of a Purchasing Lender
that is not then a Lender or an affiliate thereof, the Agent and, so long
as no Event of Default has occurred and is continuing, the Borrower), and
delivered to the Agent for its acceptance and recording in the Register;
provided, however, that any sale or assignment to an existing Lender or any
-------- -------
affiliate thereof shall not require the consent of the Agent or the
Borrower nor shall any such sale or assignment be subject to the minimum
assignment amounts specified herein. Upon such execution, delivery,
acceptance and recording, from and after the Transfer Effective Date
specified in such Commitment Transfer Supplement, (x) the Purchasing Lender
thereunder shall be a party hereto and, to the extent provided in such
Commitment Transfer Supplement, have the rights and obligations of a Lender
hereunder with a Commitment as set forth therein, and (y) the transferor
Lender thereunder shall, to the extent provided in such Commitment Transfer
Supplement, be released from its obligations under this Agreement (and, in
the case of a Commitment Transfer Supplement covering all or the remaining
portion of a transferor Lender's rights and obligations under this
Agreement, such transferor Lender shall cease to be a party hereto). Such
Commitment Transfer Supplement shall be deemed to amend this Agreement to
the extent, and only to the extent, necessary to reflect the addition of
such Purchasing Lender and the resulting adjustment of Commitment
Percentages arising from the purchase by such Purchasing Lender of all or a
portion of the rights and obligations of such transferor Lender under this
Agreement and the Notes. On or prior to the Transfer Effective Date
specified in such Commitment Transfer Supplement, the Borrower, at its own
expense, shall execute and deliver to the Agent in exchange for the Notes
delivered to the Agent pursuant to such Commitment Transfer Supplement new
Notes to the order of such Purchasing Lender in an amount equal to the
Commitment assumed by it pursuant to such Commitment Transfer Supplement
and, unless the transferor Lender has not retained a Commitment hereunder,
new Notes to the order of the transferor Lender in an amount
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equal to the Commitment retained by it hereunder. Such new Notes shall be
dated the Closing Date and shall otherwise be in the form of the Notes
replaced thereby. The Notes surrendered by the transferor Lender shall be
returned by the Agent to the Borrower marked "canceled".
(d) The Agent shall maintain at its address referred to in Section 9.2
a copy of each Commitment Transfer Supplement delivered to it and a
register (the "Register") for the recordation of the names and addresses of
--------
the Lenders and the Commitment of, and principal amount of the Loans owing
to, each Lender from time to time. The entries in the Register shall be
conclusive, in the absence of manifest error, and the Borrower, the Agent
and the Lenders may treat each Person whose name is recorded in the
Register as the owner of the Loan recorded therein 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.
(e) Upon its receipt of a duly executed Commitment Transfer
Supplement, together with payment to the Agent by the transferor Lender or
the Purchasing Lender, as agreed between them, of a registration and
processing fee of $3,000 for each Purchasing Lender listed in such
Commitment Transfer Supplement and the Notes subject to such Commitment
Transfer Supplement, the Agent shall (i) accept such Commitment Transfer
Supplement, (ii) record the information contained therein in the Register
and (iii) give prompt notice of such acceptance and recordation to the
Lenders and the Borrower.
(f) The Borrower authorizes each Lender to disclose to any Participant
or Purchasing Lender (each, a "Transferee") and any prospective Transferee
----------
any and all financial information in such Lender's possession concerning
the Borrower and its Affiliates which has been delivered to such Lender by
or on behalf of the Borrower pursuant to this Agreement or which has been
delivered to such Lender by or on behalf of the Borrower in connection with
such Lender's credit evaluation of the Borrower and its Affiliates prior to
becoming a party to this Agreement, in each case subject to Section 9.16.
(g) At the time of each assignment pursuant to this Section 9.6 to a
Person which is not already a Lender hereunder and which is not a United
States person (as such term is defined in Section 7701(a)(30) of the Code)
for Federal income tax purposes, the respective assignee Lender shall
provide to the Borrower and the Agent the appropriate Internal Revenue
Service Forms (and, if applicable, a 2.18 Certificate) described in Section
2.18.
(h) Nothing herein shall prohibit any Lender, without the consent of
the Agent or the Borrower, from pledging or assigning any of its rights
under this Agreement as collateral security for its obligations, including
without limitation, any right to payment of principal and interest under
any Note, to (i) any Federal Reserve Bank in accordance with applicable
laws or (ii) in the case of any Lender which has made Term Loans hereunder
and is an investment fund, to the trustee under the indenture to which such
fund is a party in support of its obligations to such trustee for the
benefit of the applicable trust
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beneficiaries; provided, however, that in either case, (A) such Lender
-------- -------
shall remain a "Lender" under this Agreement and shall continue to be bound
by all the terms and conditions set forth in this Agreement and the other
Credit Documents and (B) any assignment to such trustee shall be subject to
the provisions of Section 9.6(c).
SECTION 9.7 ADJUSTMENTS; SET-OFF.
--------------------
(a) Each Lender agrees that if any Lender (a "benefited Lender") shall
----------------
at any time receive any payment of all or part of its Loans, or interest
thereon, or receive any collateral in respect thereof (whether voluntarily
or involuntarily, by set-off, pursuant to events or proceedings of the
nature referred to in Section 7.1(e), or otherwise) in a greater proportion
than any such payment to or collateral received by any other Lender, if
any, in respect of such other Lender's Loans, or interest thereon, such
benefited Lender shall purchase for cash from the other Lenders a
participating interest in such portion of each such other Lender's Loan,
or shall provide such other Lenders with the benefits of any such
collateral, or the proceeds thereof, as shall be necessary to cause such
benefited Lender to share the excess payment or benefits of such collateral
or proceeds ratably with each of the Lenders; provided, however, that if
-------- -------
all or any portion of such excess payment or benefits is thereafter
recovered from such benefited Lender, such purchase shall be rescinded, and
the purchase price and benefits returned, to the extent of such recovery,
but without interest. The Borrower agrees that each Lender so purchasing a
portion of another Lender's Loans may exercise all rights of payment
(including, without limitation, rights of set-off) with respect to such
portion as fully as if such Lender were the direct holder of such portion.
(b) In addition to any rights and remedies of the Lenders provided by
law (including, without limitation, other rights of set-off), each Lender
shall have the right, without prior notice to the Borrower, any such notice
being expressly waived by the Borrower to the extent permitted by
applicable law, upon the occurrence and continuance of any Event of
Default, to setoff and appropriate and apply any and all deposits (general
or special, time or demand, provisional or final), in any currency, and any
other credits, indebtedness or claims, in any currency, in each case
whether direct or indirect, absolute or contingent, matured or unmatured,
at any time held or owing by such Lender or any branch or agency thereof to
or for the credit or the account of the Borrower, or any part thereof in
such amounts as such Lender may elect, against and on account of the
obligations and liabilities of the Borrower to such Lender hereunder and
claims of every nature and description of such Lender against the Borrower,
in any currency, whether arising hereunder, under the Notes or under any
documents contemplated by or referred to herein or therein, as such Lender
may elect, whether or not such Lender has made any demand for payment and
although such obligations, liabilities and claims may be contingent or
unmatured. The aforesaid right of set-off may be exercised by such Lender
against the Borrower or against any trustee in bankruptcy, debtor in
possession, assignee for the benefit of creditors, receiver or execution,
judgment or attachment creditor of the Borrower, or against anyone else
claiming through or against the Borrower or any such trustee in bankruptcy,
debtor in possession, assignee for the benefit of creditors, receiver, or
execution, judgment or attachment creditor, notwithstanding the fact that
such right of
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set-off shall not have been exercised by such Lender prior to the
occurrence of any Event of Default. Each Lender agrees promptly to notify
the Borrower and the Agent after any such set-off and application made by
such Lender; provided, however, that the failure to give such notice shall
-------- -------
not affect the validity of such set-off and application.
SECTION 9.8 TABLE OF CONTENTS AND SECTION HEADINGS.
--------------------------------------
The table of contents and the Section and subsection headings herein are
intended for convenience only and shall be ignored in construing this Agreement.
SECTION 9.9 COUNTERPARTS.
------------
This Agreement may be executed by one or more of the parties to this
Agreement on any number of separate counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same instrument. A set
of the copies of this Agreement signed by all the parties shall be lodged with
the Borrower and the Agent.
SECTION 9.10 EFFECTIVENESS.
-------------
This Credit Agreement shall become effective on the date on which all of
the parties have signed a copy hereof (whether the same or different copies) and
shall have delivered the same to the Agent pursuant to Section 9.2 or, in the
-----------
case of the Lenders, shall have given to the Agent written, telecopied or telex
notice (actually received) at such office that the same has been signed and
mailed to it.
SECTION 9.11 SEVERABILITY.
------------
Any provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
SECTION 9.12 INTEGRATION.
-----------
This Agreement and the Notes represent the agreement of the Borrower, the
Agent and the Lenders with respect to the subject matter hereof, and there are
no promises, undertakings, representations or warranties by the Agent, the
Borrower or any Lender relative to the subject matter hereof not expressly set
forth or referred to herein or in the Notes.
SECTION 9.13 GOVERNING LAW.
-------------
This Agreement and the Notes and the rights and obligations of the parties
under this Agreement and the Notes shall be governed by, and construed and
interpreted in accordance with, the law of the State of North Carolina.
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SECTION 9.14 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
----------------------------------------------
All judicial proceedings brought against the Borrower and/or any other
Credit Party with respect to this Agreement, any Note or any of the other Credit
Documents may be brought in any state or federal court of competent jurisdiction
in the State of North Carolina, and, by execution and delivery of this
Agreement, each of the Borrower and the other Credit Parties accepts, for itself
and in connection with its properties, generally and unconditionally, the non-
exclusive jurisdiction of the aforesaid courts and irrevocably agrees to be
bound by any final judgment rendered thereby in connection with this Agreement
from which no appeal has been taken or is available. Each of the Borrower and
the other Credit Parties irrevocably agrees that all service of process in any
such proceedings in any such court may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar form of mail),
postage prepaid, to it at its address set forth in Section 9.2 or at such other
address of which the Agent shall have been notified pursuant thereto, such
service being hereby acknowledged by the each of the Borrower and the other
Credit Parties to be effective and binding service in every respect. Each of
the Borrower, the other Credit Parties, the Agent and the Lenders irrevocably
waives any objection, including, without limitation, any objection to the laying
of venue or based on the grounds of forum non conveniens which it may now or
hereafter have to the bringing of any such action or proceeding in any such
jurisdiction. Nothing herein shall affect the right to serve process in any
other manner permitted by law or shall limit the right of any Lender to bring
proceedings against the Borrower or the other Credit Parties in the court of any
other jurisdiction.
SECTION 9.15 ARBITRATION.
-----------
(a) Notwithstanding the provisions of Section 9.14 to the contrary,
upon demand of any party hereto, whether made before or within three (3)
months after institution of any judicial proceeding, any dispute, claim or
controversy arising out of, connected with or relating to this Agreement
and other Credit Documents ("Disputes") between or among parties to this
Agreement shall be resolved by binding arbitration as provided herein.
Institution of a judicial proceeding by a party does not waive the right of
that party to demand arbitration hereunder. Disputes may include, without
limitation, tort claims, counterclaims, disputes as to whether a matter is
subject to arbitration, claims brought as class actions, claims arising
from Credit Documents executed in the future, or claims arising out of or
connected with the transaction reflected by this Agreement.
Arbitration shall be conducted under and governed by the Commercial
Arbitration Rules (the "Arbitration Rules") of the American Arbitration
Association (the "AAA") and Title 9 of the U.S. Code. All arbitration
hearings shall be conducted in Charlotte, North Carolina. A hearing shall
begin within 90 days of demand for arbitration and all hearings shall be
concluded within 120 days of demand for arbitration. These time
limitations may not be extended unless a party shows cause for extension
and then no more than a total extension of 60 days. The expedited
procedures set forth in Rule 51 et seq. of the Arbitration Rules shall be
-- ---
applicable to claims of less than $1,000,000. All applicable statutes of
limitation shall apply to any Dispute. A judgment upon the award may be
entered in any court having jurisdiction. Arbitrators shall be licensed
attorneys selected from the Commercial Financial Dispute Arbitration Panel
of the AAA. The parties hereto
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do not waive applicable Federal or state substantive law except as provided
herein. Notwithstanding the foregoing, this arbitration provision does not
apply to disputes under or related to Hedging Agreements.
(b) Notwithstanding the preceding binding arbitration provisions, the
Agent, the Lenders, the Borrower and the other Credit Parties agree to
preserve, without diminution, certain remedies that the Agent on behalf of
the Lenders may employ or exercise freely, independently or in connection
with an arbitration proceeding or after an arbitration action is brought.
The Agent on behalf of the Lenders shall have the right to proceed in any
court of proper jurisdiction or by self-help to exercise or prosecute the
following remedies, as applicable (i) all rights to foreclose against any
real or personal property or other security by exercising a power of sale
granted under Credit Documents or under applicable law or by judicial
foreclosure and sale, including a proceeding to confirm the sale; (ii) all
rights of self-help including peaceful occupation of real property and
collection of rents, set-off, and peaceful possession of personal property;
(iii) obtaining provisional or ancillary remedies including injunctive
relief, sequestration, garnishment, attachment, appointment of receiver and
filing an involuntary bankruptcy proceeding; and (iv) when applicable, a
judgment by confession of judgment. Preservation of these remedies does not
limit the power of an arbitrator to grant similar remedies that may be
requested by a party in a Dispute.
(c) The parties hereto agree that they shall not have a remedy of
punitive or exemplary damages against the other in any Dispute and hereby
waive any right or claim to punitive or exemplary damages they have now or
which may arise in the future in connection with any Dispute whether the
Dispute is resolved by arbitration or judicially.
(d) By execution and delivery of this Agreement, each of the parties
hereto accepts, for itself and in connection with its properties, generally
and unconditionally, the non-exclusive jurisdiction relating to any
arbitration proceedings conducted under the Arbitration Rules in Charlotte,
North Carolina and irrevocably agrees to be bound by any final judgment
rendered thereby in connection with this Agreement from which no appeal has
been taken or is available.
SECTION 9.16 CONFIDENTIALITY.
---------------
The Agent and each of the Lenders agrees that it will use its best efforts
not to disclose without the prior consent of the Borrower (other than to its
employees, affiliates, auditors or counsel or to another Lender) any information
with respect to the Borrower and its Subsidiaries which is furnished pursuant to
this Agreement, any other Credit Document or any documents contemplated by or
referred to herein or therein and which is designated by the Borrower to the
Lenders in writing as confidential or as to which it is otherwise reasonably
clear such information is not public, except that any Lender may disclose any
such information (a) as has become generally available to the public other than
by a breach of this Section 9.16, (b) as may be required or appropriate in any
report, statement or testimony submitted to any municipal, state or federal
regulatory body having or claiming to have jurisdiction over such Lender or to
the National Association of Insurance Commissioners or the Federal Reserve Board
or the Federal Deposit
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Insurance Corporation or the OCC or similar organizations (whether in the United
States or elsewhere) or their successors, (c) as may be required or appropriate
in response to any summons or subpoena or any law, order, regulation or ruling
applicable to such Lender, (d) to any prospective Participant or assignee in
connection with any contemplated transfer pursuant to Section 9.6, provided that
--------
such prospective transferee shall have been made aware of this Section 9.16 and
shall have agreed to be bound by its provisions as if it were a party to this
Agreement, (e) to Gold Sheets and other similar bank trade publications; such
-----------
information to consist of deal terms and other information regarding the credit
facilities evidenced by this Credit Agreement customarily found in such
publications or (f) to any Person listed on Schedule 9.2 hereof (so long as such
Person agrees to be bound by the provisions of this Section 9.16).
SECTION 9.17 ACKNOWLEDGMENTS.
---------------
The Borrower and the other Credit Parties each hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of each Credit Document;
(b) neither the Agent nor any Lender has any fiduciary relationship
with or duty to the Borrower or any other Credit Party arising out of or in
connection with this Agreement and the relationship between Agent and
Lenders, on one hand, and the Borrower and the other Credit Parties, on the
other hand, in connection herewith is solely that of debtor and creditor;
and
(c) no joint venture exists among the Lenders or among the Borrower or
the other Credit Parties and the Lenders.
SECTION 9.18 WAIVERS OF JURY TRIAL.
---------------------
THE BORROWER, THE OTHER CREDIT PARTIES, THE AGENT AND THE LENDERS HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
ARTICLE X
GUARANTY
SECTION 10.1 THE GUARANTY.
------------
In order to induce the Lenders to enter into this Agreement and to extend
credit hereunder and in recognition of the direct benefits to be received by the
Guarantors from the Extensions of Credit hereunder, each of the Guarantors
hereby agrees with the Agent and the Lenders as follows: the Guarantor hereby
unconditionally and irrevocably jointly and severally guarantees as primary
obligor and not merely as surety the full and prompt payment when due, whether
upon
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maturity, by acceleration or otherwise, of any and all indebtedness of the
Borrower to the Agent and the Lenders, including, without limitation, all
obligations of the Borrower under Hedging Agreements. If any or all of the
indebtedness of the Borrower to the Agent and the Lenders becomes due and
payable hereunder, each Guarantor unconditionally promises to pay such
indebtedness to the Agent and the Lenders, or order, on demand, together with
any and all reasonable expenses which may be incurred by the Agent or the
Lenders in collecting any of the indebtedness. The word "indebtedness" is used
in this Article X in its most comprehensive sense and includes any and all
advances, debts, obligations and liabilities of the Borrower arising in
connection with this Agreement, in each case, heretofore, now, or hereafter
made, incurred or created, whether voluntarily or involuntarily, absolute or
contingent, liquidated or unliquidated, determined or undetermined, whether or
not such indebtedness is from time to time reduced, or extinguished and
thereafter increased or incurred, whether the Borrower may be liable
individually or jointly with others, whether or not recovery upon such
indebtedness may be or hereafter become barred by any statute of limitations,
and whether or not such indebtedness may be or hereafter become otherwise
unenforceable.
Notwithstanding any provision to the contrary contained herein or in any
other of the Credit Documents, to the extent the obligations of a Guarantor
shall be adjudicated to be invalid or unenforceable for any reason (including,
without limitation, because of any applicable state or federal law relating to
fraudulent conveyances or transfers) then the obligations of each such Guarantor
hereunder shall be limited to the maximum amount that is permissible under
applicable law (whether federal or state and including, without limitation, the
Bankruptcy Code).
SECTION 10.2 BANKRUPTCY.
----------
Additionally, each of the Guarantors unconditionally and irrevocably
guarantees jointly and severally the payment of any and all indebtedness of the
Borrower to the Lenders whether or not due or payable by the Borrower upon the
occurrence of any of the events specified in Section 7.1(e), and unconditionally
promises to pay such indebtedness to the Agent for the account of the Lenders,
or order, on demand, in lawful money of the United States. Each of the
Guarantors further agrees that to the extent that the Borrower or a Guarantor
shall make a payment or a transfer of an interest in any property to the Agent
or any Lender, which payment or transfer or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, or otherwise is avoided,
and/or required to be repaid to the Borrower or a Guarantor, the estate of the
Borrower or a Guarantor, a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then to the
extent of such avoidance or repayment, the obligation or part thereof intended
to be satisfied shall be revived and continued in full force and effect as if
said payment had not been made.
SECTION 10.3 NATURE OF LIABILITY.
-------------------
The liability of each Guarantor hereunder is exclusive and independent of
any security for or other guaranty of the indebtedness of the Borrower whether
executed by any such Guarantor, any other guarantor or by any other party, and
no Guarantor's liability hereunder shall be affected or impaired by (a) any
direction as to application of payment by the Borrower or by any other party, or
(b) any other continuing or other guaranty, undertaking or maximum liability of
a
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guarantor or of any other party as to the indebtedness of the Borrower, or (c)
any payment on or in reduction of any such other guaranty or undertaking, or (d)
any dissolution, termination or increase, decrease or change in personnel by the
Borrower, or (e) any payment made to the Agent or the Lenders on the
indebtedness which the Agent or such Lenders repay the Borrower pursuant to
court order in any bankruptcy, reorganization, arrangement, moratorium or other
debtor relief proceeding, and each of the Guarantors waives any right to the
deferral or modification of its obligations hereunder by reason of any such
proceeding.
SECTION 10.4 INDEPENDENT OBLIGATION.
----------------------
The obligations of each Guarantor hereunder are independent of the
obligations of any other guarantor or the Borrower, and a separate action or
actions may be brought and prosecuted against each Guarantor whether or not
action is brought against any other guarantor or the Borrower and whether or not
any other Guarantor or the Borrower is joined in any such action or actions.
SECTION 10.5 AUTHORIZATION.
-------------
Each of the Guarantors authorizes the Agent and each Lender without notice
or demand (except as shall be required by applicable statute and cannot be
waived), and without affecting or impairing its liability hereunder, from time
to time to (a) renew, compromise, extend, increase, accelerate or otherwise
change the time for payment of, or otherwise change the terms of the
indebtedness or any part thereof in accordance with this Agreement, including
any increase or decrease of the rate of interest thereon, (b) take and hold
security from any guarantor or any other party for the payment of this Guaranty
or the indebtedness and exchange, enforce waive and release any such security,
(c) apply such security and direct the order or manner of sale thereof as the
Agent and the Lenders in their discretion may determine and (d) release or
substitute any one or more endorsers, guarantors, the Borrower or other
obligors.
SECTION 10.6 RELIANCE.
--------
It is not necessary for the Agent or the Lenders to inquire into the
capacity or powers of the Borrower or the officers, directors, partners or
agents acting or purporting to act on its behalf, and any indebtedness made or
created in reliance upon the professed exercise of such powers shall be
guaranteed hereunder.
SECTION 10.7 WAIVER.
------
(a) Each of the Guarantors waives any right (except as shall be
required by applicable statute and cannot be waived) to require the Agent
or any Lender to (i) proceed against the Borrower, any other guarantor or
any other party, (ii) proceed against or exhaust any security held from the
Borrower, any other guarantor or any other party, or (iii) pursue any other
remedy in the Agent's or any Lender's power whatsoever. Each of the
Guarantors waives any defense based on or arising out of any defense of the
Borrower, any other guarantor or any other party other than payment in full
of the indebtedness, including without limitation any defense based on or
arising out of the
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disability of the Borrower, any other guarantor or any other party, or the
unenforceability of the indebtedness or any part thereof from any cause, or
the cessation from any cause of the liability of the Borrower other than
payment in full of the indebtedness. Without limiting the generality of the
provisions of this Article X, each of the Guarantors hereby specifically
waives the benefits of N.C. Gen. Stat. (S) 26-7 through 26-9, inclusive.
The Agent or any of the Lenders may, at their election, foreclose on any
security held by the Agent or a Lender by one or more judicial or
nonjudicial sales, whether or not every aspect of any such sale is
commercially reasonable (to the extent such sale is permitted by applicable
law), or exercise any other right or remedy the Agent and any Lender may
have against the Borrower or any other party, or any security, without
affecting or impairing in any way the liability of any Guarantor hereunder
except to the extent the indebtedness has been paid. Each of the Guarantors
waives any defense arising out of any such election by the Agent and each
of the Lenders, even though such election operates to impair or extinguish
any right of reimbursement or subrogation or other right or remedy of the
Guarantors against the Borrower or any other party or any security.
(b) Each of the Guarantors waives all presentments, demands for
performance, protests and notices, including without limitation notices of
nonperformance, notice of protest, notices of dishonor, notices of
acceptance of this Guaranty, and notices of the existence, creation or
incurring of new or additional indebtedness. Each Guarantor assumes all
responsibility for being and keeping itself informed of the Borrower's
financial condition and assets, and of all other circumstances bearing upon
the risk of nonpayment of the indebtedness and the nature, scope and extent
of the risks which such Guarantor assumes and incurs hereunder, and agrees
that neither the Agent nor any Lender shall have any duty to advise such
Guarantor of information known to it regarding such circumstances or risks.
(c) Each of the Guarantors hereby agrees it will not exercise any
rights of subrogation which it may at any time otherwise have as a result
of this Guaranty (whether contractual, under Section 509 of the U.S.
Bankruptcy Code, or otherwise) to the claims of the Lenders against the
Borrower or any other guarantor of the indebtedness of the Borrower owing
to the Lenders (collectively, the "Other Parties") and all contractual,
-------------
statutory or common law rights of reimbursement, contribution or indemnity
from any Other Party which it may at any time otherwise have as a result of
this Guaranty until such time as the Loans hereunder shall have been paid
and the Commitments have been terminated. Each of the Guarantors hereby
further agrees not to exercise any right to enforce any other remedy which
the Agent and the Lenders now have or may hereafter have against any Other
Party, any endorser or any other guarantor of all or any part of the
indebtedness of the Borrower and any benefit of, and any right to
participate in, any security or collateral given to or for the benefit of
the Lenders to secure payment of the indebtedness of the Borrower until
such time as the Loans hereunder shall have been paid and the Commitments
have been terminated.
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SECTION 10.8 LIMITATION ON ENFORCEMENT.
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The Lenders agree that this Guaranty may be enforced only by the action of
the Agent acting upon the instructions of the Required Lenders and that no
Lender shall have any right individually to seek to enforce or to enforce this
Guaranty, it being understood and agreed that such rights and remedies may be
exercised by the Agent for the benefit of the Lenders upon the terms of this
Agreement. The Lenders further agree that this Guaranty may not be enforced
against any director, officer, employee, stockholder or other equity holder of
the Guarantors.
SECTION 10.9 CONFIRMATION OF PAYMENT.
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The Agent and the Lenders will, upon request after payment of the
indebtedness and obligations which are the subject of this Guaranty and
termination of the commitments relating thereto, confirm to the Borrower, the
Guarantors or any other Person that the such indebtedness and obligations have
been paid and the commitments relating thereto terminated, subject to the
provisions of Section 10.2.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in Charlotte, North Carolina by its proper and duly
authorized officers as of the day and year first above written.
BORROWER: ADVANCED GLASSFIBER YARNS LLC
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By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: President
GUARANTORS: AGY CAPITAL CORP.
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By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: President
AGENT AND LENDERS: FIRST UNION NATIONAL BANK,
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as Administrative Agent and as a Lender
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
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Title: Senior Vice President
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