EXHIBIT 10.26
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CREDIT AGREEMENT
Dated as of July 31, 2002
Among
REMEDYTEMP, INC.
as the Borrower,
BANK OF AMERICA, N.A.,
as Administrative Agent, Swing Line Lender
and
L/C Issuer,
And
The Other Lenders Party Hereto
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TABLE OF CONTENTS
Section Page
ARTICLE I.DEFINITIONS AND ACCOUNTING TERMS......................................................1
1.01 Defined Terms.......................................................................1
1.02 Other Interpretive Provisions......................................................15
1.03 Accounting Terms...................................................................16
1.04 Rounding...........................................................................16
1.05 References to Agreements and Laws..................................................17
1.06 Times of Day.......................................................................17
1.07 Letter of Credit Amounts...........................................................17
ARTICLE II.THE COMMITMENTS AND CREDIT EXTENSIONS...............................................17
2.01 Committed Loans....................................................................17
2.02 Borrowings, Conversions and Continuations of Committed Loans.......................17
2.03 Letters of Credit..................................................................19
2.04 Swing Line Loans...................................................................27
2.05 Prepayments........................................................................30
2.06 Termination or Reduction of Commitments............................................30
2.07 Repayment of Loans.................................................................31
2.08 Interest...........................................................................31
2.09 Fees...............................................................................31
2.10 Computation of Interest and Fees...................................................32
2.11 Evidence of Debt...................................................................32
2.12 Payments Generally.................................................................33
2.13 Sharing of Payments................................................................34
2.14 Direct Debit.......................................................................35
ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY............................................35
3.01 Taxes..............................................................................35
3.02 Illegality.........................................................................36
3.03 Inability to Determine Rates.......................................................37
3.04 Increased Cost and Reduced Return; Capital Adequacy;
Reserves on Eurodollar Rate Loans..................................................37
3.05 Funding Losses.....................................................................38
3.06 Matters Applicable to all Requests for Compensation................................39
3.07 Survival...........................................................................39
ARTICLE IV. CONDITIONS PRECEDENT TO CREDIT EXTENSIONS.........................................39
4.01 Conditions of Initial Credit Extension.............................................39
4.02 Conditions to all Credit Extensions................................................41
ARTICLE V. REPRESENTATIONS AND WARRANTIES.....................................................41
5.01 Existence, Qualification and Power; Compliance with Laws...........................41
5.02 Authorization; No Contravention....................................................41
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5.03 Governmental Authorization; Other Consents.........................................42
5.04 Binding Effect.....................................................................42
5.05 Financial Statements; No Material Adverse Effect...................................42
5.06 Litigation.........................................................................43
5.07 No Default.........................................................................43
5.08 Ownership of Property; Liens.......................................................43
5.09 Environmental Compliance...........................................................43
5.10 Insurance..........................................................................43
5.11 Taxes..............................................................................43
5.12 ERISA Compliance...................................................................44
5.13 Subsidiaries.......................................................................44
5.14 Margin Regulations; Investment Company Act; Public
Utility Holding Company Act........................................................44
5.15 Disclosure.........................................................................45
5.16 Compliance with Laws...............................................................45
5.17 Intellectual Property; Licenses, Etc...............................................45
ARTICLE VI. AFFIRMATIVE COVENANTS..............................................................45
6.01 Financial Statements...............................................................46
6.02 Certificates; Other Information....................................................46
6.03 Notices............................................................................48
6.04 Payment of Obligations.............................................................48
6.05 Preservation of Existence, Etc.....................................................48
6.06 Maintenance of Properties..........................................................49
6.07 Maintenance of Insurance...........................................................49
6.08 Compliance with Laws...............................................................49
6.09 Books and Records..................................................................49
6.10 Inspection Rights..................................................................49
6.11 Use of Proceeds....................................................................49
6.12 Additional Guarantors..............................................................49
ARTICLE VII.NEGATIVE COVENANTS.................................................................50
7.01 Liens..............................................................................50
7.02 Investments........................................................................51
7.03 Indebtedness.......................................................................51
7.04 Fundamental Changes................................................................52
7.05 Dispositions.......................................................................52
7.06 Restricted Payments................................................................53
7.07 Change in Nature of Business.......................................................53
7.08 Transactions with Affiliates.......................................................53
7.09 Burdensome Agreements..............................................................53
7.10 Use of Proceeds....................................................................53
7.11 Financial Covenants................................................................53
ARTICLE VIII.EVENTS OF DEFAULT AND REMEDIES....................................................54
8.01 Events of Default..................................................................54
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8.02 Remedies Upon Event of Default.....................................................56
8.03 Application of Funds...............................................................57
ARTICLE IX. ADMINISTRATIVE AGENT...............................................................58
9.01 Appointment and Authorization of Administrative Agent..............................58
9.02 Delegation of Duties...............................................................58
9.03 Liability of Administrative Agent..................................................58
9.04 Reliance by Administrative Agent...................................................59
9.05 Notice of Default..................................................................59
9.06 Credit Decision; Disclosure of Information by Administrative Agent.................60
9.07 Indemnification of Administrative Agent............................................60
9.08 Administrative Agent in its Individual Capacity....................................61
9.09 Successor Administrative Agent.....................................................61
9.10 Administrative Agent May File Proofs of Claim......................................62
9.11 Guaranty Matters...................................................................62
9.12 Other Agents; Arrangers and Managers...............................................62
ARTICLE X. MISCELLANEOUS......................................................................63
10.01 Amendments, Etc....................................................................63
10.02 Notices and Other Communications; Facsimile Copies.................................64
10.03 No Waiver; Cumulative Remedies.....................................................65
10.04 Attorney Costs, Expenses and Taxes.................................................65
10.05 Indemnification by the Borrower....................................................66
10.06 Payments Set Aside.................................................................66
10.07 Successors and Assigns.............................................................67
10.08 Confidentiality....................................................................70
10.09 Set-off............................................................................71
10.10 Interest Rate Limitation...........................................................71
10.11 Counterparts.......................................................................71
10.12 Integration........................................................................71
10.13 Survival of Representations and Warranties.........................................72
10.14 Severability.......................................................................72
10.15 Tax Forms..........................................................................72
10.16 Governing Law......................................................................74
10.17 Waiver of Right to Trial by Jury...................................................74
10.18 Time of the Essence................................................................75
10.19 Entire Agreement. ................................................................75
SIGNATURES.....................................................................................76
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SCHEDULES
2.01 Commitments and Pro Rata Shares
5.05 Supplement to Interim Financial Statements
5.06 Litigation
5.09 Environmental Matters
5.13 Subsidiaries and Other Equity Investments
5.17 Intellectual Property Matters
7.01 Existing Liens
7.02 Authorized Investments
7.03 Existing Indebtedness
10.02 Administrative Agent's Office, Certain Addresses for Notices
EXHIBITS
Form of
A Committed Loan Notice
B Swing Line Loan Notice
C Note
D Compliance Certificate
E Assignment and Assumption
F Guaranty
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CREDIT AGREEMENT
This CREDIT AGREEMENT ("Agreement") is entered into as of July 31, 2002,
among REMEDYTEMP, INC., a (the "Borrower"), each lender from time to time party
hereto (collectively, the "Lenders" and individually, a "Lender"), and BANK OF
AMERICA, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer.
The Borrower has requested that the Lenders provide a revolving credit
facility, and the Lenders are willing to do so on the terms and conditions set
forth herein.
In consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:
ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS
1.01 DEFINED TERMS. As used in this Agreement, the following terms
shall have the meanings set forth below:
"Acquisition" means any transaction or series of related transactions
for the purpose of or resulting, directly or indirectly, in (i) the acquisition
by the Borrower of all or substantially all of the assets of a person or entity
or of any business or division of a person or entity, (ii) the acquisition by
the Borrower of in excess of fifty percent (50%) of the capital stock,
partnership interests, membership interests or equity of any person or entity,
or otherwise causing any entity to become a subsidiary of the borrower, or (iii)
a merger or consolidation or any other combination by the Borrower with another
person or entity (other than an entity that is a subsidiary of the Borrower)
provided in the Borrower or its subsidiary is the surviving entity.
"Acceptable Acquisition" means an Acquisition:
(i) If the total value of the consideration paid for all
Acquisitions made after the date of this Agreement will not exceed Five
Million Dollars ($5,000,000), including the proposed Acquisition:
(A) where the business being acquired is
substantially the same as the Borrower's present business;
(B) which is undertaken in accordance with all
applicable requirements of law;
(C) where prior, effective written consent or
approval of such Acquisition has been given by the board of
directors or equivalent governing body of the acquire;
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(D) a statement showing that, on a pro forma
consolidated basis immediately after the Acquisition, the
Borrower will be in full compliance this Agreement (including a
break-out of the acquiree's funded and contingent debts assumed
by the Borrower in connection with any Acquisition);
(E) within 30 days after the closing of the
Acquisition, the Borrower has delivered to the Bank a statement
of sources and uses of funds;
(ii) If the total value of the consideration for the
Acquisition paid for all Acquisitions made after the date of this
Agreement; including the proposed Acquisition, equals or exceeds Five
Million Dollars ($5,000,000):
(A) where the Borrower has complied with the
requirements of Subparagraphs (i) (A) through (i) (D) above;
(B) where the total value of the consideration paid
for all Acquisitions made after the date of this Agreement,
including the proposed Acquisition, does not exceed Ten Million
Dollars ($10,000,000);
(C) where the Borrower has delivered to the Bank at
least 15 days prior to the Acquisition:
(1) a compliance certificate showing, on a
pro forma consolidated basis for the Borrower and the
acquiree, compliance with this Agreement for the most
recently ended fiscal quarter of the Borrower and the
underlying calculations showing such compliance,
including a break-out of the acquiree's figures.
(2) financial statements of the entity to be
acquired, prepared by a certified public accountant
(excluding licensees which may be entity prepared), for
such entity's last three fiscal years and the latest
interim fiscal period, all in form and content
acceptable to the Bank;
(3) evidence that Consolidated EBITDA after
giving effect to such Acquisition is at least
$20,000,000 and cash on hand, net of outstanding Letters
of Credit, is at least $10,000,000.
For purposes hereof, "consideration" paid for an Acquisition means all
value given, including cash, stock of the Borrower, and all liabilities of the
acquiree which are to be assumed by the Borrower, including all funded debt and
contingent liabilities but excluding normal trade debt and accruals; provided,
however, that "consideration" shall exclude contractual "earn out" obligations
based on future financial performance benchmarks of the acquiree.
"Administrative Agent" means Bank of America in its capacity as
administrative agent under any of the Loan Documents, or any successor
administrative agent.
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"Administrative Agent's Office" means the Administrative Agent's address
and, as appropriate, account as set forth on Schedule 10.02, or such other
address or account as the Administrative Agent may from time to time notify the
Borrower and the Lenders.
"Administrative Questionnaire" means an Administrative Questionnaire in
a form supplied by the Administrative Agent.
"Affiliate" means, with respect to any Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified. "Control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise. "Controlling" and
"Controlled" have meanings correlative thereto.
"Agent-Related Persons" means the Administrative Agent, together with
its Affiliates (including, in the case of Bank of America in its capacity as the
Administrative Agent, the Arranger), and the officers, directors, employees,
agents and attorneys-in-fact of such Persons and Affiliates.
"Aggregate Commitments" means the Commitments of all the Lenders.
"Agreement" means this Credit Agreement.
"Applicable Rate" means the following percentages per annum, based upon
the level of Consolidated EBITDA maintained by Borrower as set forth in the most
recent Compliance Certificate received by the Administrative Agent pursuant to
Section 6.02(b):
APPLICABLE RATE
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CONSOLIDATED LETTER OF CREDIT
PRICING LEVEL EBITDA FEE EURODOLLAR RATE + BASE RATE +
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1 Equal to or more 1.125% 1.125% 0%
than $18,000,000
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2 More than 1.25% 1.25% 0%
$8,500,000, but less
than $18,000,000
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3 Equal to or less 1.375% 1.375% 0%
than $8,500,000
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Any increase or decrease in the Applicable Rate resulting from a change
in the level of Consolidated EBITDA shall become effective as of the first
Business Day of the month immediately following the date a Compliance
Certificate is delivered pursuant to Section 6.02(b); provided, however, that if
a Compliance Certificate is not delivered when due in accordance with such
Section, then Pricing Level 3 shall apply as of the first Business Day of the
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month after the date on which such Compliance Certificate was required to have
been delivered. The Applicable Rate in effect from the Closing Date through
September 30, 2002 shall be determined based upon Pricing Level 2.
"Arranger" means Banc of America Securities LLC, in its capacity as sole
lead arranger and sole book manager.
"Assignment and Assumption" means an Assignment and Assumption
substantially in the form of Exhibit E.
"Attorney Costs" means and includes all fees, expenses and disbursements
of any law firm or other external counsel and, without duplication, the
allocated cost of internal legal services and all expenses and disbursements of
internal counsel.
"Attributable Indebtedness" means, on any date, (a) in respect of any
capital lease of any Person, the capitalized amount thereof that would appear on
a balance sheet of such Person prepared as of such date in accordance with GAAP,
and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of
the remaining lease payments under the relevant lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP if
such lease were accounted for as a capital lease.
"Audited Financial Statements" means the audited consolidated balance
sheet of the Borrower and its Subsidiaries for the fiscal year ended September
30, 2001, and the related consolidated statements of income or operations,
shareholders' equity and cash flows for such fiscal year of the Borrower and its
Subsidiaries, including the notes thereto.
"Availability Period" means the period from and including the Closing
Date to the earliest of (a) the Maturity Date, (b) the date of termination of
the Aggregate Commitments pursuant to Section 2.06, and (c) the date of
termination of the commitment of each Lender to make Loans and of the obligation
of the of the L/C Issuer to make L/C Credit Extensions pursuant to Section 8.02.
"Bank of America" means Bank of America, N.A. and its successors.
"Base Rate" means for any day a fluctuating rate per annum equal to the
higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest
in effect for such day as publicly announced from time to time by Bank of
America as its "prime rate." The "prime rate" is a rate set by Bank of America
based upon various factors including Bank of America's costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate. Any change in such rate announced by Bank of America shall take effect at
the opening of business on the day specified in the public announcement of such
change.
"Base Rate Committed Loan" means a Committed Loan that is a Base Rate
Loan.
"Base Rate Loan" means a Loan that bears interest based on the Base
Rate.
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"Borrower" has the meaning specified in the introductory paragraph
hereto.
"Borrowing" means a Committed Borrowing or a Swing Line Borrowing, as
the context may require.
"Business Day" means any day other than a Saturday, Sunday or other day
on which commercial banks are authorized to close under the Laws of, or are in
fact closed in, the state where the Administrative Agent's Office is located
and, if such day relates to any Eurodollar Rate Loan, means any such day on
which dealings in Dollar deposits are conducted by and between banks in the
London interbank eurodollar market.
"Cash Collateralize" has the meaning specified in Section 2.03(g).
"Change of Control" means, with respect to any Person, an event or
series of events by which:
(a) any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any
employee benefit plan of such person or its subsidiaries, and any person or
entity acting in its capacity as trustee, agent or other fiduciary or
administrator of any such plan) becomes the "beneficial owner" (as defined in
Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a
person or group shall be deemed to have "beneficial ownership" of all securities
that such person or group has the right to acquire (such right, an "option
right"), whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of 25% or more of the equity securities of
such Person entitled to vote for members of the board of directors or equivalent
governing body of such Person on a fully-diluted basis (and taking into account
all such securities that such person or group has the right to acquire pursuant
to any option right); or
(b) during any period of 12 consecutive months, a majority of the
members of the board of directors or other equivalent governing body of such
Person cease to be composed of individuals (i) who were members of that board or
equivalent governing body on the first day of such period, (ii) whose election
or nomination to that board or equivalent governing body was approved by
individuals referred to in clause (i) above constituting at the time of such
election or nomination at least a majority of that board or equivalent governing
body or (iii) whose election or nomination to that board or other equivalent
governing body was approved by individuals referred to in clauses (i) and (ii)
above constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body (excluding, in the case of
both clause (ii) and clause (iii), any individual whose initial nomination for,
or assumption of office as, a member of that board or equivalent governing body
occurs as a result of an actual or threatened solicitation of proxies or
consents for the election or removal of one or more directors by any person or
group other than a solicitation for the election of one or more directors by or
on behalf of the board of directors).
"Closing Date" means the first date all the conditions precedent in
Section 4.01 are satisfied or waived in accordance with Section 4.01 (or, in the
case of Section 4.01(b), waived by the Person entitled to receive the applicable
payment).
"Code" means the Internal Revenue Code of 1986.
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"Commitment" means, as to each Lender, its obligation to (a) make
Committed Loans to the Borrower pursuant to Section 2.01, (b) purchase
participations in L/C Obligations, and (c) purchase participations in Swing Line
Loans, in an aggregate principal amount at any one time outstanding not to
exceed the amount set forth opposite such Lender's name on Schedule 2.01 or in
the Assignment and Assumption pursuant to which such Lender becomes a party
hereto, as applicable, as such amount may be adjusted from time to time in
accordance with this Agreement.
"Committed Borrowing" means a borrowing consisting of simultaneous
Committed Loans of the same Type and, in the case of Eurodollar Rate Loans,
having the same Interest Period made by each of the Lenders pursuant to Section
2.01.
"Committed Loan" has the meaning specified in Section 2.01.
"Committed Loan Notice" means a notice of (a) a Committed Borrowing, (b)
a conversion of Committed Loans from one Type to the other, or (c) a
continuation of Eurodollar Rate Loans, pursuant to Section 2.02(a), which, if in
writing, shall be substantially in the form of Exhibit A.
"Compliance Certificate" means a certificate substantially in the form
of Exhibit D.
"Consolidated EBITDA" means, for any period, for the Borrower and its
Subsidiaries on a consolidated basis, an amount equal to Consolidated Net Income
for such period plus (a) the following to the extent deducted in calculating
such Consolidated Net Income: (i) Consolidated Interest Charges for such period,
(ii) the provision for federal, state, local and foreign income taxes payable by
the Borrower and its Subsidiaries for such period, (iii) the amount of
depreciation and amortization expense deducted in determining such Consolidated
Net Income and (iv) other expenses of the Borrower and its Subsidiaries reducing
such Consolidated Net Income which do not represent a cash item in such period
or any future period and minus (b) all non-cash items increasing Consolidated
Net Income for such period.
"Consolidated Interest Charges" means, for any period, for the Borrower
and its Subsidiaries on a consolidated basis, the sum of (a) all interest,
premium payments, debt discount, fees, charges and related expenses of the
Borrower and its Subsidiaries in connection with borrowed money (including
capitalized interest) or in connection with the deferred purchase price of
assets, in each case to the extent treated as interest in accordance with GAAP,
and (b) the portion of rent expense of the Borrower and its Subsidiaries with
respect to such period under capital leases that is treated as interest in
accordance with GAAP.
"Consolidated Net Income" means, for any period, for the Borrower and
its Subsidiaries on a consolidated basis, the net income of the Borrower and its
Subsidiaries (excluding extraordinary gains but including extraordinary losses)
for that period.
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Control" has the meaning specified in the definition of "Affiliate."
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"Credit Extension" means each of the following: (a) a Borrowing and (b)
an L/C Credit Extension.
"Debtor Relief Laws" means the Bankruptcy Code of the United States, and
all other liquidation, conservatorship, bankruptcy, assignment for the benefit
of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States or other
applicable jurisdictions from time to time in effect and affecting the rights of
creditors generally.
"Default" means any event or condition that constitutes an Event of
Default or that, with the giving of any notice, the passage of time, or both,
would be an Event of Default.
"Default Rate" means an interest rate equal to (a) the Base Rate plus
(b) the Applicable Rate, if any, applicable to Base Rate Loans plus (c) 4% per
annum; provided, however, that with respect to a Eurodollar Rate Loan, the
Default Rate shall be an interest rate equal to the interest rate (including any
Applicable Rate) otherwise applicable to such Loan plus 4% per annum, in each
case to the fullest extent permitted by applicable Laws.
"Defaulting Lender" means any Lender that (a) has failed to fund any
portion of the Committed Loans, participations in L/C Obligations or
participations in Swing Line Loans required to be funded by it hereunder within
one Business Day of the date required to be funded by it hereunder, (b) has
otherwise failed to pay over to the Administrative Agent or any other Lender any
other amount required to be paid by it hereunder within one Business Day of the
date when due, unless the subject of a good faith dispute, or (c) has been
deemed insolvent or become the subject of a bankruptcy or insolvency proceeding.
"Disposition" or "Dispose" means the sale, transfer, license, lease or
other disposition (including any sale and leaseback transaction) of any property
by any Person, including any sale, assignment, transfer or other disposal, with
or without recourse, of any notes or accounts receivable or any rights and
claims associated therewith.
"Dollar" and "$" mean lawful money of the United States.
"Domestic Subsidiary" means any Subsidiary that is organized under the
laws of any political subdivision of the United States.
"Eligible Assignee" has the meaning specified in Section 10.07(g).
"Environmental Laws" means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including
those related to hazardous substances or wastes, air emissions and discharges to
waste or public systems.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower, any other Loan Party or any of their
respective Subsidiaries directly or indirectly
7
resulting from or based upon (a) violation of any Environmental Law, (b) the
generation, use, handling, transportation, storage, treatment or disposal of any
Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or
threatened release of any Hazardous Materials into the environment or (e) any
contract, agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with the Borrower within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension
Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension
Plan subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is
in reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Sections 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the
imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower
or any ERISA Affiliate.
"Eurodollar Rate" means for any Interest Period with respect to any
Eurodollar Rate Loan:
(a) the rate per annum equal to the rate determined by the
Administrative Agent to be the offered rate that appears on the page of the
Telerate screen (or any successor thereto) that displays an average British
Bankers Association Interest Settlement Rate for deposits in Dollars (for
delivery on the first day of such Interest Period) with a term equivalent to
such Interest Period, determined as of approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period, or
(b) if the rate referenced in the preceding clause (a) does not
appear on such page or service or such page or service shall not be available,
the rate per annum equal to the rate determined by the Administrative Agent to
be the offered rate on such other page or other service that displays an average
British Bankers Association Interest Settlement Rate for deposits in Dollars
(for delivery on the first day of such Interest Period) with a term equivalent
to such Interest Period, determined as of approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period, or
(c) if the rates referenced in the preceding clauses (a) and (b) are
not available, the rate per annum determined by the Administrative Agent as the
rate of interest at which deposits
8
in Dollars for delivery on the first day of such Interest Period in same day
funds in the approximate amount of the Eurodollar Rate Loan being made,
continued or converted by Bank of America and with a term equivalent to such
Interest Period would be offered by Bank of America's London Branch to major
banks in the London interbank eurodollar market at their request at
approximately 4:00 p.m. (London time) two Business Days prior to the first day
of such Interest Period.
"Eurodollar Rate Loan" means a Committed Loan that bears interest at a
rate based on the Eurodollar Rate.
"Event of Default" has the meaning specified in Section 8.01.
"Existing Credit Agreement" means that certain Business Loan Agreement
dated as of March 31, 1999 among the Borrower and Bank of America, N.A., as
amended from time to time.
"Existing Letters of Credit" means the following Letters of Credit
issued by the L/C Issuer for the account of the Borrower: (i) Letter of Credit
No. 304874 in the stated amount of $13,777,500, and (ii) Letter of Credit No.
3038261 in the stated amount of $17,250,000.
"Federal Funds Rate" means, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of
America on such day on such transactions as determined by the Administrative
Agent.
"Fee Letter" means the letter agreement, dated of even date herewith,
between the Borrower and the Administrative Agent.
"Fixed Charge Coverage Ratio" means, for any period, for the Borrower
and its Subsidiaries on a consolidated basis, the sum of Consolidated EBITDA,
plus collections on loans to franchisees, minus loans made to franchisees, minus
non-financed capital expenditures, minus cash taxes paid, minus dividends paid,
minus purchases of treasury stock, minus non-financed Acquisitions, minus
non-financed repurchases of franchises and licenses, divided by the sum of
scheduled mandatory principal repayments of borrowed money, plus scheduled
mandatory payments under capital leases, plus 20% of all amounts outstanding
under this Agreement (excluding Letters of Credit), plus interest expense.
"Foreign Lender" has the meaning specified in Section 10.15(a)(i).
"FRB" means the Board of Governors of the Federal Reserve System of the
United States.
9
"Funded Debt" means, for any period, for the Borrower and its
Subsidiaries on a consolidated basis, all outstanding indebtedness for borrowed
money and other interest-bearing indebtedness, including current and long-term
indebtedness.
"GAAP" means generally accepted accounting principles in the United
States set forth in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative tribunal, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
"Guarantors" means, collectively, REMX Inc., Remedy Temporary Services,
Inc. and Remedy Intelligent Staffing, Inc.
"Guaranty" means the Guaranty made by the Guarantors in favor of the
Administrative Agent on behalf of the Lenders, substantially in the form of
Exhibit F.
"Guarantee" means, as to any Person, any (a) any obligation, contingent
or otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect, (i)
to purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person. The amount of any Guarantee shall be
deemed to be an amount equal to the stated or determinable amount of the related
primary obligation, or portion thereof, in respect of which such Guarantee is
made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof as determined by the guaranteeing Person in good
faith. The term "Guarantee" as a verb has a corresponding meaning.
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas,
10
infectious or medical wastes and all other substances or wastes of any nature
regulated pursuant to any Environmental Law.
"Indebtedness" means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:
(a) all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes, loan
agreements or other similar instruments;
(b) all direct or contingent obligations of such Person arising
under letters of credit (including standby and commercial), bankers'
acceptances, bank guaranties, surety bonds and similar instruments;
(c) net obligations of such Person under any Swap Contract;
(d) all obligations of such Person to pay the deferred purchase
price of property or services (other than trade accounts payable in the ordinary
course of business);
(e) indebtedness (excluding prepaid interest thereon) secured by a
Lien on property owned or being purchased by such Person (including indebtedness
arising under conditional sales or other title retention agreements), whether or
not such indebtedness shall have been assumed by such Person or is limited in
recourse;
(f) capital leases and Synthetic Lease Obligations; and
(g) all Guarantees of such Person in respect of any of the
foregoing.
For all purposes hereof, the Indebtedness of any Person shall include
the Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person. The amount of any net obligation under any
Swap Contract on any date shall be deemed to be the Swap Termination Value
thereof as of such date. The amount of any capital lease or Synthetic Lease
Obligation as of any date shall be deemed to be the amount of Attributable
Indebtedness in respect thereof as of such date.
"Indemnified Liabilities" has the meaning set forth in Section 10.05.
"Indemnitees" has the meaning set forth in Section 10.05.
"Intangible Assets" means assets that are considered to be intangible
assets under GAAP, including customer lists, goodwill, computer software,
copyrights, trade names, trademarks, patents, franchises, licenses, unamortized
deferred charges, unamortized debt discount and capitalized research and
development costs.
"Interest Payment Date" means, (a) as to any Loan other than a Base Rate
Loan, the last day of each Interest Period applicable to such Loan and the
Maturity Date; provided, however, that if any Interest Period for a Eurodollar
Rate Loan exceeds three months, the respective dates that fall every three
months after the beginning of such Interest Period shall also be Interest
11
Payment Dates; and (b) as to any Base Rate Loan (including a Swing Line Loan),
the last Business Day of each March, June, September and December and the
Maturity Date.
"Interest Period" means, as to each Eurodollar Rate Loan, the period
commencing on the date such Eurodollar Rate Loan is disbursed or converted to or
continued as a Eurodollar Rate Loan and ending on the date one, two, three or
six months thereafter, as selected by the Borrower in its Committed Loan Notice;
provided that:
(i) any Interest Period that would otherwise end on a day that is
not a Business Day shall be extended to the next succeeding Business Day unless
such Business Day falls in another calendar month, in which case such Interest
Period shall end on the next preceding Business Day;
(ii) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall end on the last
Business Day of the calendar month at the end of such Interest Period; and
(iii) no Interest Period shall extend beyond the Maturity Date.
"Investment" means, as to any Person, any direct or indirect acquisition
or investment by such Person, whether by means of (a) the purchase or other
acquisition of capital stock or other securities of another Person, (b) a loan,
advance or capital contribution to, Guarantee or assumption of debt of, or
purchase or other acquisition of any other debt or equity participation or
interest in, another Person, including any partnership or joint venture interest
in such other Person, or (c) the purchase or other acquisition (in one
transaction or a series of transactions) of assets of another Person that
constitute a business unit. For purposes of covenant compliance, the amount of
any Investment shall be the amount actually invested, without adjustment for
subsequent increases or decreases in the value of such Investment.
"IP Rights" has the meaning set forth in Section 5.17.
"IRS" means the United States Internal Revenue Service.
"Laws" means, collectively, all international, foreign, Federal, state
and local statutes, treaties, rules, guidelines, regulations, ordinances, codes
and administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.
"L/C Advance" means, with respect to each Lender, such Lender's funding
of its participation in any L/C Borrowing in accordance with its Pro Rata Share.
"L/C Borrowing" means an extension of credit resulting from a drawing
under any Letter of Credit which has not been reimbursed on the date when made
or refinanced as a Committed Borrowing.
12
"L/C Credit Extension" means, with respect to any Letter of Credit, the
issuance thereof or extension of the expiry date thereof, or the renewal or
increase of the amount thereof.
"L/C Issuer" means Bank of America in its capacity as issuer of Letters
of Credit hereunder, or any successor issuer of Letters of Credit hereunder.
"L/C Obligations" means, as at any date of determination, the aggregate
undrawn amount of all outstanding Letters of Credit plus the aggregate of all
Unreimbursed Amounts, including all L/C Borrowings.
"Lender" has the meaning specified in the introductory paragraph hereto
and, as the context requires, includes the L/C Issuer and the Swing Line Lender.
"Lending Office" means, as to any Lender, the office or offices of such
Lender described as such in such Lender's Administrative Questionnaire, or such
other office or offices as a Lender may from time to time notify the Borrower
and the Administrative Agent.
"Letter of Credit" means any standby letter of credit issued hereunder
and shall include the Existing Letters of Credit.
"Letter of Credit Application" means an application and agreement for
the issuance or amendment of a Letter of Credit in the form from time to time in
use by the L/C Issuer.
"Letter of Credit Sublimit" means an amount equal to $35,000,000. The
Letter of Credit Sublimit is part of, and not in addition to, the Aggregate
Commitments.
"Leverage Ratio" means, as of any date of determination, the ratio of
(a) Net Funded Debt to (b) Consolidate EBITDA for the period of the four fiscal
quarters most recently ended for which the Borrower has delivered financial
statements.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement of any kind or
nature whatsoever (including any conditional sale or other title retention
agreement, and any financing lease having substantially the same economic effect
as any of the foregoing).
"Loan" means an extension of credit by a Lender to the Borrower under
Article II in the form of a Committed Loan or a Swing Line Loan.
"Loan Documents" means this Agreement, each Note, the Fee Letter and the
Guaranty.
"Loan Parties" means, collectively, the Borrower and each Guarantor.
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, liabilities
(actual or contingent), condition (financial or otherwise) or prospects of the
Borrower or the Borrower and its Subsidiaries taken as a whole; (b) a material
impairment of the ability of any Loan Party to perform its obligations under any
Loan Document to which it is a party; or (c) a material adverse effect upon the
13
legality, validity, binding effect or enforceability against any Loan Party of
any Loan Document to which it is a party.
"Maturity Date" means the later of (a) June 1, 2004 and (b) if maturity
is extended pursuant to Section 2.14, such extended maturity date as determined
pursuant to such Section.
"Multiemployer Plan" means any employee benefit plan of the type
described in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA
Affiliate makes or is obligated to make contributions, or during the preceding
five plan years, has made or been obligated to make contributions.
"Net Funded Debt" means, for any period, the sum of Funded Debt
(including letters of credit and bonds for workers' compensation) minus cash in
excess of $10,000,000.
"Note" means a promissory note made by the Borrower in favor of a Lender
evidencing Loans made by such Lender, substantially in the form of Exhibit C.
"Obligations" means all advances to, and debts, liabilities,
obligations, covenants and duties of, any Loan Party arising under any Loan
Document or otherwise with respect to any Loan or Letter of Credit, whether
direct or indirect (including those acquired by assumption), absolute or
contingent, due or to become due, now existing or hereafter arising and
including interest and fees that accrue after the commencement by or against any
Loan Party or any Affiliate thereof of any proceeding under any Debtor Relief
Laws naming such Person as the debtor in such proceeding, regardless of whether
such interest and fees are allowed claims in such proceeding.
"Organization Documents" means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.
"Outstanding Amount" means (i) with respect to Committed Loans and Swing
Line Loans on any date, the aggregate outstanding principal amount thereof after
giving effect to any borrowings and prepayments or repayments of Committed Loans
and Swing Line Loans, as the case may be, occurring on such date; and (ii) with
respect to any L/C Obligations on any date, the amount of such L/C Obligations
on such date after giving effect to any L/C Credit Extension occurring on such
date and any other changes in the aggregate amount of the L/C Obligations as of
such date, including as a result of any reimbursements of outstanding unpaid
drawings under any Letters of Credit or any reductions in the maximum amount
available for drawing under Letters of Credit taking effect on such date.
"Participant" has the meaning specified in Section 10.07(d).
14
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" means any "employee pension benefit plan" (as such term
is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Borrower or
any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes
or has an obligation to contribute, or in the case of a multiple employer or
other plan described in Section 4064(a) of ERISA, has made contributions at any
time during the immediately preceding five plan years.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan" means any "employee benefit plan" (as such term is defined in
Section 3(3) of ERISA) established by the Borrower or, with respect to any such
plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA
Affiliate.
"Pro Rata Share" means, with respect to each Lender at any time, a
fraction (expressed as a percentage, carried out to the ninth decimal place),
the numerator of which is the amount of the Commitment of such Lender at such
time and the denominator of which is the amount of the Aggregate Commitments at
such time; provided that if the commitment of each Lender to make Loans and the
obligation of the L/C Issuer to make L/C Credit Extensions have been terminated
pursuant to Section 8.02, then the Pro Rata Share of each Lender shall be
determined based on the Pro Rata Share of such Lender immediately prior to such
termination and after giving effect to any subsequent assignments made pursuant
to the terms hereof. The initial Pro Rata Share of each Lender is set forth
opposite the name of such Lender on Schedule 2.01 or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as applicable.
"Register" has the meaning set forth in Section 10.07(c).
"Reportable Event" means any of the events set forth in Section 4043(c)
of ERISA, other than events for which the 30 day notice period has been waived.
"Request for Credit Extension" means (a) with respect to a Borrowing,
conversion or continuation of Committed Loans, a Committed Loan Notice, (b) with
respect to an L/C Credit Extension, a Letter of Credit Application, and (c) with
respect to a Swing Line Loan, a Swing Line Loan Notice.
"Required Lenders" means, as of any date of determination, Lenders
having at least 66?2/3% of the Aggregate Commitments or, if the commitment of
each Lender to make Loans and the obligation of the L/C Issuer to make L/C
Credit Extensions have been terminated pursuant to Section 8.02, Lenders holding
in the aggregate at least 66-2/3% of the Total Outstandings (with the aggregate
amount of each Lender's risk participation and funded participation in L/C
Obligations and Swing Line Loans being deemed "held" by such Lender for purposes
of this definition); provided that the Commitment of, and the portion of the
Total Outstandings held or deemed held by, any Defaulting Lender shall be
excluded for purposes of making a determination of Required Lenders.
15
"Responsible Officer" means the chief executive officer, president,
chief financial officer, treasurer or assistant treasurer of a Loan Party. Any
document delivered hereunder that is signed by a Responsible Officer of a Loan
Party shall be conclusively presumed to have been authorized by all necessary
corporate, partnership and/or other action on the part of such Loan Party and
such Responsible Officer shall be conclusively presumed to have acted on behalf
of such Loan Party.
"Restricted Payment" means any dividend or other distribution (whether
in cash, securities or other property) with respect to any capital stock or
other equity interest of the Borrower or any Subsidiary, or any payment (whether
in cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such capital stock or other equity interest
or of any option, warrant or other right to acquire any such capital stock or
other equity interest.
"SEC" means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.
"Subsidiary" of a Person means a corporation, partnership, joint
venture, limited liability company or other business entity of which a majority
of the shares of securities or other interests having ordinary voting power for
the election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references herein to a
"Subsidiary" or to "Subsidiaries" shall refer to a Subsidiary or Subsidiaries of
the Borrower.
"Swap Contract" means (a) any and all rate swap transactions, basis
swaps, credit derivative transactions, forward rate transactions, commodity
swaps, commodity options, forward commodity contracts, equity or equity index
swaps or options, bond or bond price or bond index swaps or options or forward
bond or forward bond price or forward bond index transactions, interest rate
options, forward foreign exchange transactions, cap transactions, floor
transactions, collar transactions, currency swap transactions, cross-currency
rate swap transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a "Master Agreement"), including
any such obligations or liabilities under any Master Agreement.
"Swap Termination Value" means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for
16
any date prior to the date referenced in clause (a), the amount(s) determined as
the mark-to-market value(s) for such Swap Contracts, as determined based upon
one or more mid-market or other readily available quotations provided by any
recognized dealer in such Swap Contracts (which may include a Lender or any
Affiliate of a Lender).
"Swing Line" means the revolving credit facility made available by the
Swing Line Lender pursuant to Section 2.04.
"Swing Line Borrowing" means a borrowing of a Swing Line Loan pursuant
to Section 2.04.
"Swing Line Lender" means Bank of America in its capacity as provider of
Swing Line Loans, or any successor swing line lender hereunder.
"Swing Line Loan" has the meaning specified in Section 2.04(a).
"Swing Line Loan Notice" means a notice of a Swing Line Borrowing
pursuant to Section 2.04(b), which, if in writing, shall be substantially in the
form of Exhibit B.
"Swing Line Sublimit" means an amount equal to the lesser of (a)
$5,000,000 and (b) the Aggregate Commitments. The Swing Line Sublimit is part
of, and not in addition to, the Aggregate Commitments.
"Synthetic Lease Obligation" means the monetary obligation of a Person
under (a) a so-called synthetic, off-balance sheet or tax retention lease, or
(b) an agreement for the use or possession of property creating obligations that
do not appear on the balance sheet of such Person but which, upon the insolvency
or bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).
"Threshold Amount" means $500,000.
"Total Outstandings" means the aggregate Outstanding Amount of all Loans
and all L/C Obligations.
"Type" means, with respect to a Committed Loan, its character as a Base
Rate Loan or a Eurodollar Rate Loan.
"Unfunded Pension Liability" means the excess of a Pension Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over the current value
of that Pension Plan's assets, determined in accordance with the assumptions
used for funding the Pension Plan pursuant to Section 412 of the Code for the
applicable plan year.
"United States" and "U.S." mean the United States of America.
"Unreimbursed Amount" has the meaning set forth in Section 2.03(c)(i).
1.02 OTHER INTERPRETIVE PROVISIONS. With reference to this Agreement
and each other Loan Document, unless otherwise specified herein or in such other
Loan Document:
17
(a) The meanings of defined terms are equally applicable to
the singular and plural forms of the defined terms.
(b) (i) The words "herein," "hereto," "hereof" and
"hereunder" and words of similar import when used in any Loan Document
shall refer to such Loan Document as a whole and not to any particular
provision thereof.
(ii) Article, Section, Exhibit and Schedule
references are to the Loan Document in which such reference
appears.
(iii) The term "including" is by way of example and
not limitation.
(iv) The term "documents" includes any and all
instruments, documents, agreements, certificates, notices,
reports, financial statements and other writings, however
evidenced, whether in physical or electronic form.
(c) In the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and
including;" the words "to" and "until" each mean "to but excluding;" and
the word "through" means "to and including."
(d) Section headings herein and in the other Loan Documents
are included for convenience of reference only and shall not affect the
interpretation of this Agreement or any other Loan Document.
1.03 ACCOUNTING TERMS.
(a) All accounting terms not specifically or completely
defined herein shall be construed in conformity with, and all financial
data (including financial ratios and other financial calculations)
required to be submitted pursuant to this Agreement shall be prepared in
conformity with, GAAP applied on a consistent basis, as in effect from
time to time, applied in a manner consistent with that used in preparing
the Audited Financial Statements, except as otherwise specifically
prescribed herein.
(b) If at any time any change in GAAP would affect the
computation of any financial ratio or requirement set forth in any Loan
Document, and either the Borrower or the Required Lenders shall so
request, the Administrative Agent, the Lenders and the Borrower shall
negotiate in good faith to amend such ratio or requirement to preserve
the original intent thereof in light of such change in GAAP (subject to
the approval of the Required Lenders); provided that, until so amended,
(i) such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and (ii) the Borrower
shall provide to the Administrative Agent and the Lenders financial
statements and other documents required under this Agreement or as
reasonably requested hereunder setting forth a reconciliation between
calculations of such ratio or requirement made before and after giving
effect to such change in GAAP.
1.04 ROUNDING. Any financial ratios required to be maintained by the
Borrower pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such
18
ratio is expressed herein and rounding the result up or down to the nearest
number (with a rounding-up if there is no nearest number).
1.05 REFERENCES TO AGREEMENTS AND LAWS. Unless otherwise expressly
provided herein, (a) references to Organization Documents, agreements (including
the Loan Documents) and other contractual instruments shall be deemed to include
all subsequent amendments, restatements, extensions, supplements and other
modifications thereto, but only to the extent that such amendments,
restatements, extensions, supplements and other modifications are not prohibited
by any Loan Document; and (b) references to any Law shall include all statutory
and regulatory provisions consolidating, amending, replacing, supplementing or
interpreting such Law.
1.06 TIMES OF DAY. Unless otherwise specified, all references herein
to times of day shall be references to Pacific time (daylight or standard, as
applicable).
1.07 LETTER OF CREDIT AMOUNTS. Unless otherwise specified, all
references herein to the amount of a Letter of Credit at any time shall be
deemed to mean the maximum face amount of such Letter of Credit after giving
effect to all increases thereof contemplated by such Letter of Credit or the
Letter of Credit Application therefor, whether or not such maximum face amount
is in effect at such time.
ARTICLE II.
THE COMMITMENTS AND CREDIT EXTENSIONS
2.01 COMMITTED LOANS. Subject to the terms and conditions set forth
herein, each Lender severally agrees to make loans (each such loan, a "Committed
Loan") to the Borrower from time to time, on any Business Day during the
Availability Period, in an aggregate amount not to exceed at any time
outstanding the amount of such Lender's Commitment; provided, however, that
after giving effect to any Committed Borrowing, (i) the Total Outstandings shall
not exceed the Aggregate Commitments, and (ii) the aggregate Outstanding Amount
of the Committed Loans of any Lender, plus such Lender's Pro Rata Share of the
Outstanding Amount of all L/C Obligations, plus such Lender's Pro Rata Share of
the Outstanding Amount of all Swing Line Loans shall not exceed such Lender's
Commitment. Within the limits of each Lender's Commitment, and subject to the
other terms and conditions hereof, the Borrower may borrow under this Section
2.01, prepay under Section 2.05, and reborrow under this Section 2.01. Committed
Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided
herein.
2.02 BORROWINGS, CONVERSIONS AND CONTINUATIONS OF COMMITTED LOANS.
(a) Each Committed Borrowing, each conversion of Committed
Loans from one Type to the other, and each continuation of Eurodollar
Rate Loans shall be made upon the Borrower's irrevocable notice to the
Administrative Agent, which may be given by telephone. Each such notice
must be received by the Administrative Agent not later than 8:00 a.m.
(i) three Business Days prior to the requested date of any Borrowing of,
conversion to or continuation of Eurodollar Rate Loans or of any
conversion of Eurodollar Rate Loans to Base Rate Committed Loans, and
(ii) on the requested date of any Borrowing of Base Rate Committed
Loans. Each telephonic notice by the Borrower
19
pursuant to this Section 2.02(b) must be confirmed promptly by delivery
to the Administrative Agent of a written Committed Loan Notice,
appropriately completed and signed by a Responsible Officer of the
Borrower. Each Borrowing of, conversion to or continuation of Eurodollar
Rate Loans shall be in a principal amount of $1,000,000 or a whole
multiple of $1,000,000 in excess thereof. Except as provided in Sections
2.03(c) and 2.04(c), each Borrowing of or conversion to Base Rate
Committed Loans shall be in a principal amount of $500,000 or a whole
multiple of $100,000 in excess thereof. Each Committed Loan Notice
(whether telephonic or written) shall specify (i) whether the Borrower
is requesting a Committed Borrowing, a conversion of Committed Loans
from one Type to the other, or a continuation of Eurodollar Rate Loans,
(ii) the requested date of the Borrowing, conversion or continuation, as
the case may be (which shall be a Business Day), (iii) the principal
amount of Committed Loans to be borrowed, converted or continued, (iv)
the Type of Committed Loans to be borrowed or to which existing
Committed Loans are to be converted, and (v) if applicable, the duration
of the Interest Period with respect thereto. If the Borrower fails to
specify a Type of Committed Loan in a Committed Loan Notice or if the
Borrower fails to give a timely notice requesting a conversion or
continuation, then the applicable Committed Loans shall be made as, or
converted to, Base Rate Loans. Any such automatic conversion to Base
Rate Loans shall be effective as of the last day of the Interest Period
then in effect with respect to the applicable Eurodollar Rate Loans. If
the Borrower requests a Borrowing of, conversion to, or continuation of
Eurodollar Rate Loans in any such Committed Loan Notice, but fails to
specify an Interest Period, it will be deemed to have specified an
Interest Period of one month.
(b) Following receipt of a Committed Loan Notice, the
Administrative Agent shall promptly notify each Lender of the amount of
its Pro Rata Share of the applicable Committed Loans, and if no timely
notice of a conversion or continuation is provided by the Borrower, the
Administrative Agent shall notify each Lender of the details of any
automatic conversion to Base Rate Loans described in the preceding
subsection. In the case of a Committed Borrowing, each Lender shall make
the amount of its Committed Loan available to the Administrative Agent
in immediately available funds at the Administrative Agent's Office not
later than 1:00 p.m. on the Business Day specified in the applicable
Committed Loan Notice. Upon satisfaction of the applicable conditions
set forth in Section 4.02 (and, if such Borrowing is the initial Credit
Extension, Section 4.01), the Administrative Agent shall make all funds
so received available to the Borrower in like funds as received by the
Administrative Agent by crediting the account of the Borrower on the
books of Bank of America with the amount of such funds; provided,
however, that if, on the date the Committed Loan Notice with respect to
such Borrowing is given by the Borrower, there are L/C Borrowings
outstanding, then the proceeds of such Borrowing shall be applied,
first, to the payment in full of any such L/C Borrowings and then to the
Borrower as provided above.
(c) Except as otherwise provided herein, a Eurodollar Rate
Loan may be continued or converted only on the last day of an Interest
Period for such Eurodollar Rate
20
Loan. During the existence of a Default, no Loans may be requested as,
converted to or continued as Eurodollar Rate Loans without the consent
of the Required Lenders.
(d) The Administrative Agent shall promptly notify the
Borrower and the Lenders of the interest rate applicable to any Interest
Period for Eurodollar Rate Loans upon determination of such interest
rate. The determination of the Eurodollar Rate by the Administrative
Agent shall be conclusive in the absence of manifest error. At any time
that Base Rate Loans are outstanding, the Administrative Agent shall
notify the Borrower and the Lenders of any change in Bank of America's
prime rate used in determining the Base Rate promptly following the
public announcement of such change.
(e) After giving effect to all Committed Borrowings, all
conversions of Committed Loans from one Type to the other, and all
continuations of Committed Loans as the same Type, there shall not be
more than six Interest Periods in effect with respect to Committed
Loans.
2.03 LETTERS OF CREDIT.
(a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth
herein, (A) the L/C Issuer agrees, in reliance upon the
agreements of the other Lenders set forth in this Section 2.03,
(1) from time to time on any Business Day during the period from
the Closing Date until the Letter of Credit Expiration Date, to
issue Letters of Credit for the account of the Borrower, and to
amend Letters of Credit previously issued by it, in accordance
with subsection (b) below, and (2) to honor drafts under the
Letters of Credit; and (B) the Lenders severally agree to
participate in Letters of Credit issued for the account of the
Borrower; provided that the L/C Issuer shall not be obligated to
make any L/C Credit Extension with respect to any Letter of
Credit, and no Lender shall be obligated to participate in any
Letter of Credit if as of the date of such L/C Credit Extension,
(x) the Total Outstandings would exceed the Aggregate
Commitments, (y) the aggregate Outstanding Amount of the
Committed Loans of any Lender, plus such Lender's Pro Rata Share
of the Outstanding Amount of all L/C Obligations, plus such
Lender's Pro Rata Share of the Outstanding Amount of all Swing
Line Loans would exceed such Lender's Commitment, or (z) the
Outstanding Amount of the L/C Obligations would exceed the
Letter of Credit Sublimit. Within the foregoing limits, and
subject to the terms and conditions hereof, the Borrower's
ability to obtain Letters of Credit shall be fully revolving,
and accordingly the Borrower may, during the foregoing period,
obtain Letters of Credit to replace Letters of Credit that have
expired or that have been drawn upon and reimbursed. All
Existing Letters of Credit shall be deemed to have been issued
pursuant hereto, and from and after the Closing Date shall be
subject to and governed by the terms and conditions hereof.
(ii) The L/C Issuer shall be under no obligation to
issue any Letter of Credit if:
21
(A) any order, judgment or decree of
any Governmental Authority or arbitrator shall
by its terms purport to enjoin or restrain the
L/C Issuer from issuing such Letter of Credit,
or any Law applicable to the L/C Issuer or any
request or directive (whether or not having the
force of law) from any Governmental Authority
with jurisdiction over the L/C Issuer shall
prohibit, or request that the L/C Issuer refrain
from, the issuance of letters of credit
generally or such Letter of Credit in particular
or shall impose upon the L/C Issuer with respect
to such Letter of Credit any restriction,
reserve or capital requirement (for which the
L/C Issuer is not otherwise compensated
hereunder) not in effect on the Closing Date, or
shall impose upon the L/C Issuer any
unreimbursed loss, cost or expense which was not
applicable on the Closing Date and which the L/C
Issuer in good faith deems material to it;
(B) the expiry date of such
requested Letter of Credit would occur more than
twelve months after the date of issuance which
in no event shall be more than the twelve months
beyond the Maturity Date, unless the Required
Lenders have approved such expiry date;
provided, however, each Letter of Credit may
include a provision providing that the
expiration date may be automatically extended
each year for an additional year unless the L/C
Issuer gives written notice of non-renewal
within sixty (60) days of the expiration date:
(C) the issuance of such Letter of
Credit would violate one or more policies of the
L/C Issuer; or
(D) such Letter of Credit is in an
initial amount less than $500,000, or is to be
denominated in a currency other than Dollars.
(iii) The L/C Issuer shall be under no obligation to
amend any Letter of Credit if (A) the L/C Issuer would have no
obligation at such time to issue such Letter of Credit in its
amended form under the terms hereof, or (B) the beneficiary of
such Letter of Credit does not accept the proposed amendment to
such Letter of Credit.
(iv) If Borrower so requests in any applicable Letter
of Credit Application, the L/C Issuer may in its sole and
absolute discretion, agree to issue a Letter of Credit that has
automatic renewal provisions (each, an "Auto-Renewal Letter of
Credit"); provided that any such Auto-Renewal Letter of Credit
must permit the L/C Issuer to prevent any such renewal at least
once in each twelve-month period (commencing with the date of
issuance of such Letter of Credit) by giving prior notice to the
beneficiary thereof not later than a day (the "Nonrenewal Notice
Date") in each such twelve-month period to be agreed upon at the
time such Letter of Credit is issued. Unless otherwise directed
by the L/C Issuer, the Borrower shall not be required to make a
specific request to the L/C Issuer for any such renewal. Once an
Auto-Renewal Letter of Credit has been issued, the Lenders shall
be deemed to have authorized (but may not require) the L/C
Issuer to permit the renewal of such Letter of Credit at any
time to a date not later than the Letter of Credit Expiration
Date; provided, however, that the L/C Issuer shall not permit
any
22
such renewal if (A) the L/C Issuer would have no obligation at
such time to issue such Letter of Credit in its renewed form
under the terms hereof, or (B) it has received notice (which may
be by telephone or in writing) on or before the day that is two
Business Days before the Nonrenewal Notice Date (1) from the
Administrative Agent that the Required Lenders have elected not
to permit such renewal or (2) from the Administrative Agent, any
Lender or the Borrower that one or more of the applicable
conditions specified in Section 4.02 is not then satisfied.
Notwithstanding anything to the contrary contained herein, the
L/C Issuer shall have no obligation to permit the renewal of any
Auto-Renewal Letter of Credit at any time.
(b) Procedures for Issuance and Amendment of Letters of
Credit.
(i) Each Letter of Credit shall be issued or
amended, as the case may be, upon the request of the Borrower
delivered to the L/C Issuer (with a copy to the Administrative
Agent) in the form of a Letter of Credit Application,
appropriately completed and signed by a Responsible Officer of
the Borrower. Such Letter of Credit Application must be received
by the L/C Issuer and the Administrative Agent not later than
11:00 a.m. at least two Business Days (or such later date and
time as the L/C Issuer may agree in a particular instance in its
sole discretion) prior to the proposed issuance date or date of
amendment, as the case may be. In the case of a request for an
initial issuance of a Letter of Credit, such Letter of Credit
Application shall specify in form and detail satisfactory to the
L/C Issuer: (A) the proposed issuance date of the requested
Letter of Credit (which shall be a Business Day); (B) the amount
thereof; (C) the expiry date thereof; (D) the name and address
of the beneficiary thereof; (E) the documents to be presented by
such beneficiary in case of any drawing thereunder; (F) the full
text of any certificate to be presented by such beneficiary in
case of any drawing thereunder; and (G) such other matters as
the L/C Issuer may require. In the case of a request for an
amendment of any outstanding Letter of Credit, such Letter of
Credit Application shall specify in form and detail satisfactory
to the L/C Issuer (A) the Letter of Credit to be amended; (B)
the proposed date of amendment thereof (which shall be a
Business Day); (C) the nature of the proposed amendment; and (D)
such other matters as the L/C Issuer may require.
(ii) Promptly after receipt of any Letter of Credit
Application, the L/C Issuer will confirm with the Administrative
Agent (by telephone or in writing) that the Administrative Agent
has received a copy of such Letter of Credit Application from
the Borrower and, if not, the L/C Issuer will provide the
Administrative Agent with a copy thereof. Upon receipt by the
L/C Issuer of confirmation from the Administrative Agent that
the requested issuance or amendment is permitted in accordance
with the terms hereof, then, subject to the terms and conditions
hereof, the L/C Issuer shall, on the requested date, issue a
Letter of Credit for the account of the Borrower or enter into
the applicable amendment, as the case may be, in each case in
accordance with the L/C Issuer's usual and customary business
practices. Immediately upon the issuance of each Letter of
Credit, each Lender shall be deemed to, and hereby irrevocably
and unconditionally agrees to, purchase from the L/C Issuer a
risk participation in
23
such Letter of Credit in an amount equal to the product of such
Lender's Pro Rata Share times the amount of such Letter of
Credit.
(iii) Promptly after its delivery of any Letter of
Credit or any amendment to a Letter of Credit to an advising
bank with respect thereto or to the beneficiary thereof, the L/C
Issuer will also deliver to the Borrower and the Administrative
Agent a true and complete copy of such Letter of Credit or
amendment.
(c) Drawings and Reimbursements; Funding of Participations.
(i) Upon receipt from the beneficiary of any Letter
of Credit of any notice of a drawing under such Letter of
Credit, the L/C Issuer shall notify the Borrower and the
Administrative Agent thereof. Not later than 11:00 a.m. on the
date of any payment by the L/C Issuer under a Letter of Credit
(each such date, an "Honor Date"), the Borrower shall reimburse
the L/C Issuer through the Administrative Agent in an amount
equal to the amount of such drawing. If the Borrower fails to so
reimburse the L/C Issuer by such time, the Administrative Agent
shall promptly notify each Lender of the Honor Date, the amount
of the unreimbursed drawing (the "Unreimbursed Amount"), and the
amount of such Lender's Pro Rata Share thereof. In such event,
the Borrower shall be deemed to have requested a Committed
Borrowing of Base Rate Loans to be disbursed on the Honor Date
in an amount equal to the Unreimbursed Amount, without regard to
the minimum and multiples specified in Section 2.02 for the
principal amount of Base Rate Loans, but subject to the amount
of the unutilized portion of the Aggregate Commitments and the
conditions set forth in Section 4.02 (other than the delivery of
a Committed Loan Notice). Any notice given by the L/C Issuer or
the Administrative Agent pursuant to this Section 2.03(c)(i) may
be given by telephone if immediately confirmed in writing;
provided that the lack of such an immediate confirmation shall
not affect the conclusiveness or binding effect of such notice.
(ii) Each Lender (including the Lender acting as L/C
Issuer) shall upon any notice pursuant to Section 2.03(c)(i)
make funds available to the Administrative Agent for the account
of the L/C Issuer at the Administrative Agent's Office in an
amount equal to its Pro Rata Share of the Unreimbursed Amount
not later than 1:00 p.m. on the Business Day specified in such
notice by the Administrative Agent, whereupon, subject to the
provisions of Section 2.03(c)(iii), each Lender that so makes
funds available shall be deemed to have made a Base Rate
Committed Loan to the Borrower in such amount. The
Administrative Agent shall remit the funds so received to the
L/C Issuer.
(iii) With respect to any Unreimbursed Amount that is
not fully refinanced by a Committed Borrowing of Base Rate Loans
because the conditions set forth in Section 4.02 cannot be
satisfied or for any other reason, the Borrower shall be deemed
to have incurred from the L/C Issuer an L/C Borrowing in the
amount of the Unreimbursed Amount that is not so refinanced,
which L/C
24
Borrowing shall be due and payable on demand (together with
interest) and shall bear interest at the Default Rate. In such
event, each Lender's payment to the Administrative Agent for the
account of the L/C Issuer pursuant to Section 2.03(c)(ii) shall
be deemed payment in respect of its participation in such L/C
Borrowing and shall constitute an L/C Advance from such Lender
in satisfaction of its participation obligation under this
Section 2.03.
(iv) Until each Lender funds its Committed Loan or
L/C Advance pursuant to this Section 2.03(c) to reimburse the
L/C Issuer for any amount drawn under any Letter of Credit,
interest in respect of such Lender's Pro Rata Share of such
amount shall be solely for the account of the L/C Issuer.
(v) Each Lender's obligation to make Committed Loans
or L/C Advances to reimburse the L/C Issuer for amounts drawn
under Letters of Credit, as contemplated by this Section
2.03(c), shall be absolute and unconditional and shall not be
affected by any circumstance, including (A) any set-off,
counterclaim, recoupment, defense or other right which such
Lender may have against the L/C Issuer, the Borrower or any
other Person for any reason whatsoever; (B) the occurrence or
continuance of a Default, or (C) any other occurrence, event or
condition, whether or not similar to any of the foregoing;
provided, however, that each Lender's obligation to make
Committed Loans pursuant to this Section 2.03(c) is subject to
the conditions set forth in Section 4.02 (other than delivery by
the Borrower of a Committed Loan Notice). No such making of an
L/C Advance shall relieve or otherwise impair the obligation of
the Borrower to reimburse the L/C Issuer for the amount of any
payment made by the L/C Issuer under any Letter of Credit,
together with interest as provided herein.
(vi) If any Lender fails to make available to the
Administrative Agent for the account of the L/C Issuer any
amount required to be paid by such Lender pursuant to the
foregoing provisions of this Section 2.03(c) by the time
specified in Section 2.03(c)(ii), the L/C Issuer shall be
entitled to recover from such Lender (acting through the
Administrative Agent), on demand, such amount with interest
thereon for the period from the date such payment is required to
the date on which such payment is immediately available to the
L/C Issuer at a rate per annum equal to the Federal Funds Rate
from time to time in effect. A certificate of the L/C Issuer
submitted to any Lender (through the Administrative Agent) with
respect to any amounts owing under this clause (vi) shall be
conclusive absent manifest error.
(d) Repayment of Participations.
(i) At any time after the L/C Issuer has made a
payment under any Letter of Credit and has received from any
Lender such Lender's L/C Advance in respect of such payment in
accordance with Section 2.03(c), if the Administrative Agent
receives for the account of the L/C Issuer any payment in
respect of the related Unreimbursed Amount or interest thereon
(whether directly from the Borrower or otherwise, including
proceeds of Cash Collateral applied thereto by
25
the Administrative Agent), the Administrative Agent will
distribute to such Lender its Pro Rata Share thereof
(appropriately adjusted, in the case of interest payments, to
reflect the period of time during which such Lender's L/C
Advance was outstanding) in the same funds as those received by
the Administrative Agent.
(ii) If any payment received by the Administrative
Agent for the account of the L/C Issuer pursuant to Section
2.03(c)(i) is required to be returned under any of the
circumstances described in Section 10.06 (including pursuant to
any settlement entered into by the L/C Issuer in its
discretion), each Lender shall pay to the Administrative Agent
for the account of the L/C Issuer its Pro Rata Share thereof on
demand of the Administrative Agent, plus interest thereon from
the date of such demand to the date such amount is returned by
such Lender, at a rate per annum equal to the Federal Funds Rate
from time to time in effect.
(e) Obligations Absolute. The obligation of the Borrower to
reimburse the L/C Issuer for each drawing under each Letter of Credit
and to repay each L/C Borrowing shall be absolute, unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of
this Agreement under all circumstances, including the following:
(i) any lack of validity or enforceability of such
Letter of Credit, this Agreement, or any other agreement or
instrument relating thereto;
(ii) the existence of any claim, counterclaim,
set-off, defense or other right that the Borrower may have at
any time against any beneficiary or any transferee of such
Letter of Credit (or any Person for whom any such beneficiary or
any such transferee may be acting), the L/C Issuer or any other
Person, whether in connection with this Agreement, the
transactions contemplated hereby or by such Letter of Credit or
any agreement or instrument relating thereto, or any unrelated
transaction;
(iii) any draft, demand, certificate or other document
presented under such Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect; or
any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under such Letter
of Credit;
(iv) any payment by the L/C Issuer under such Letter
of Credit against presentation of a draft or certificate that
does not strictly comply with the terms of such Letter of
Credit; or any payment made by the L/C Issuer under such Letter
of Credit to any Person purporting to be a trustee in
bankruptcy, debtor-in-possession, assignee for the benefit of
creditors, liquidator, receiver or other representative of or
successor to any beneficiary or any transferee of such Letter of
Credit, including any arising in connection with any proceeding
under any Debtor Relief Law; or
26
(v) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing, including any
other circumstance that might otherwise constitute a defense
available to, or a discharge of, the Borrower.
The Borrower shall promptly examine a copy of each Letter of
Credit and each amendment thereto that is delivered to it and, in the
event of any claim of noncompliance with the Borrower's instructions or
other irregularity, the Borrower will immediately notify the L/C Issuer.
The Borrower shall be conclusively deemed to have waived any such claim
against the L/C Issuer and its correspondents unless such notice is
given as aforesaid.
(f) Role of L/C Issuer. Each Lender and the Borrower agree
that, in paying any drawing under a Letter of Credit, the L/C Issuer
shall not have any responsibility to obtain any document (other than any
sight draft, certificates and documents expressly required by the Letter
of Credit) or to ascertain or inquire as to the validity or accuracy of
any such document or the authority of the Person executing or delivering
any such document. None of the L/C Issuer, any Agent-Related Person nor
any of the respective correspondents, participants or assignees of the
L/C Issuer shall be liable to any Lender for (i) any action taken or
omitted in connection herewith at the request or with the approval of
the Lenders or the Required Lenders, as applicable; (ii) any action
taken or omitted in the absence of gross negligence or willful
misconduct; or (iii) the due execution, effectiveness, validity or
enforceability of any document or instrument related to any Letter of
Credit or Letter of Credit Application. The Borrower hereby assumes all
risks of the acts or omissions of any beneficiary or transferee with
respect to its use of any Letter of Credit; provided, however, that this
assumption is not intended to, and shall not, preclude the Borrower's
pursuing such rights and remedies as it may have against the beneficiary
or transferee at law or under any other agreement. None of the L/C
Issuer, any Agent-Related Person, nor any of the respective
correspondents, participants or assignees of the L/C Issuer, shall be
liable or responsible for any of the matters described in clauses (i)
through (v) of Section 2.03(e); provided, however, that anything in such
clauses to the contrary notwithstanding, the Borrower may have a claim
against the L/C Issuer, and the L/C Issuer may be liable to the
Borrower, to the extent, but only to the extent, of any direct, as
opposed to consequential or exemplary, damages suffered by the Borrower
which the Borrower proves were caused by the L/C Issuer's willful
misconduct or gross negligence or the L/C Issuer's willful failure to
pay under any Letter of Credit after the presentation to it by the
beneficiary of a sight draft and certificate(s) strictly complying with
the terms and conditions of a Letter of Credit. In furtherance and not
in limitation of the foregoing, the L/C Issuer may accept documents that
appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary,
and the L/C Issuer shall not be responsible for the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason.
(g) Cash Collateral. Upon the request of the Administrative
Agent, (i) if the L/C Issuer has honored any full or partial drawing
request under any Letter of Credit and such drawing has resulted in an
L/C Borrowing, or (ii) if, as of the Maturity Date, any
27
Letter of Credit may for any reason remain outstanding and partially or
wholly undrawn, the Borrower shall immediately Cash Collateralize the
then Outstanding Amount of all L/C Obligations (in an amount equal to
such Outstanding Amount determined as of the date of such L/C Borrowing
or the Letter of Credit Expiration Date, as the case may be). For
purposes hereof, "Cash Collateralize" means to pledge and deposit with
or deliver to the Administrative Agent, for the benefit of the L/C
Issuer and the Lenders, as collateral for the L/C Obligations, cash or
deposit account balances pursuant to documentation in form and substance
satisfactory to the Administrative Agent and the L/C Issuer (which
documents are hereby consented to by the Lenders). Derivatives of such
term have corresponding meanings. The Borrower hereby grants to the
Administrative Agent, for the benefit of the L/C Issuer and the Lenders,
a security interest in all such cash, deposit accounts and all balances
therein and all proceeds of the foregoing. Cash collateral shall be
maintained in blocked, non-interest bearing deposit accounts at Bank of
America.
(h) Applicability of ISP98 and UCP. Unless otherwise
expressly agreed by the L/C Issuer and the Borrower when a Letter of
Credit is issued (including any such agreement applicable to an Existing
Letter of Credit), (i) the rules of the "International Standby Practices
1998" published by the Institute of International Banking Law & Practice
(or such later version thereof as may be in effect at the time of
issuance) shall apply to each standby Letter of Credit, and (ii) the
rules of the Uniform Customs and Practice for Documentary Credits, as
most recently published by the International Chamber of Commerce (the
"ICC") at the time of issuance (including the ICC decision published by
the Commission on Banking Technique and Practice on April 6, 1998
regarding the European single currency (euro)) shall apply to each
commercial Letter of Credit.
(i) Letter of Credit Fees. The Borrower shall pay to the
Administrative Agent for the account of each Lender in accordance with
its Pro Rata Share a Letter of Credit fee for each standby Letter of
Credit equal to the Applicable Rate times the daily maximum amount
available to be drawn under such Letter of Credit (whether or not such
maximum amount is then in effect under such Letter of Credit). Such
letter of credit fees shall be computed on a quarterly basis in arrears.
Such letter of credit fees shall be due and payable on the first
Business Day after the end of each March, June, September and December,
commencing with the first such date to occur after the issuance of such
Letter of Credit, on the Letter of Credit Expiration Date and thereafter
on demand. If there is any change in the Applicable Rate during any
quarter, the daily maximum amount of each Letter of Credit shall be
computed and multiplied by the Applicable Rate separately for each
period during such quarter that such Applicable Rate was in effect.
(j) Documentary and Processing Charges Payable to L/C
Issuer. The Borrower shall pay directly to the L/C Issuer for its own
account the customary issuance, presentation, amendment and other
processing fees, and other standard costs and charges, of the L/C Issuer
relating to letters of credit as from time to time in effect. Such
customary fees and standard costs and charges are due and payable on
demand and are nonrefundable.
28
(k) Conflict with Letter of Credit Application. In the event
of any conflict between the terms hereof and the terms of any Letter of
Credit Application, the terms hereof shall control.
2.04 SWING LINE LOANS.
(a) The Swing Line. Subject to the terms and conditions set
forth herein, the Swing Line Lender agrees to make loans (each such
loan, a "Swing Line Loan") to the Borrower from time to time on any
Business Day during the Availability Period in an aggregate amount not
to exceed at any time outstanding the amount of the Swing Line Sublimit,
notwithstanding the fact that such Swing Line Loans, when aggregated
with the Pro Rata Share of the Outstanding Amount of Committed Loans and
L/C Obligations of the Lender acting as Swing Line Lender, may exceed
the amount of such Lender's Commitment; provided, however, that after
giving effect to any Swing Line Loan, (i) the Total Outstandings shall
not exceed the Aggregate Commitments, and (ii) the aggregate Outstanding
Amount of the Committed Loans of any Lender, plus such Lender's Pro Rata
Share of the Outstanding Amount of all L/C Obligations, plus such
Lender's Pro Rata Share of the Outstanding Amount of all Swing Line
Loans shall not exceed such Lender's Commitment. Within the foregoing
limits, and subject to the other terms and conditions hereof, the
Borrower may borrow under this Section 2.04, prepay under Section 2.05,
and reborrow under this Section 2.04. Each Swing Line Loan shall be a
Base Rate Loan. Immediately upon the making of a Swing Line Loan, each
Lender shall be deemed to, and hereby irrevocably and unconditionally
agrees to, purchase from the Swing Line Lender a risk participation in
such Swing Line Loan in an amount equal to the product of such Lender's
Pro Rata Share times the amount of such Swing Line Loan.
(b) Borrowing Procedures. Each Swing Line Borrowing shall be
made upon the Borrower's irrevocable notice to the Swing Line Lender and
the Administrative Agent, which may be given by telephone. Each such
notice must be received by the Swing Line Lender and the Administrative
Agent not later than 1:00 p.m. on the requested borrowing date, and
shall specify (i) the amount to be borrowed, which shall be a minimum of
$100,000, and (ii) the requested borrowing date, which shall be a
Business Day. Each such telephonic notice must be confirmed promptly by
delivery to the Swing Line Lender and the Administrative Agent of a
written Swing Line Loan Notice, appropriately completed and signed by a
Responsible Officer of the Borrower. Promptly after receipt by the Swing
Line Lender of any telephonic Swing Line Loan Notice, the Swing Line
Lender will confirm with the Administrative Agent (by telephone or in
writing) that the Administrative Agent has also received such Swing Line
Loan Notice and, if not, the Swing Line Lender will notify the
Administrative Agent (by telephone or in writing) of the contents
thereof. Unless the Swing Line Lender has received notice (by telephone
or in writing) from the Administrative Agent (including at the request
of any Lender) prior to 2:00 p.m. on the date of the proposed Swing Line
Borrowing (A) directing the Swing Line Lender not to make such Swing
Line Loan as a result of the limitations set forth in the proviso to the
first sentence of Section 2.04(a), or (B) that one or more of the
applicable conditions specified in Article IV is not then satisfied,
then, subject to the terms and conditions hereof, the Swing Line Lender
will, not later than 3:00 p.m. on the borrowing date specified in such
Swing Line Loan Notice, make the
29
amount of its Swing Line Loan available to the Borrower at its office by
crediting the account of the Borrower on the books of the Swing Line
Lender in immediately available funds.
(c) Refinancing of Swing Line Loans.
(i) The Swing Line Lender at any time in its sole
and absolute discretion may request, on behalf of the Borrower
(which hereby irrevocably authorizes the Swing Line Lender to so
request on its behalf), that each Lender make a Base Rate
Committed Loan in an amount equal to such Lender's Pro Rata
Share of the amount of Swing Line Loans then outstanding. Such
request shall be made in writing (which written request shall be
deemed to be a Committed Loan Notice for purposes hereof) and in
accordance with the requirements of Section 2.02, without regard
to the minimum and multiples specified therein for the principal
amount of Base Rate Loans, but subject to the unutilized portion
of the Aggregate Commitments and the conditions set forth in
Section 4.02. The Swing Line Lender shall furnish the Borrower
with a copy of the applicable Committed Loan Notice promptly
after delivering such notice to the Administrative Agent. Each
Lender shall make an amount equal to its Pro Rata Share of the
amount specified in such Committed Loan Notice available to the
Administrative Agent in immediately available funds for the
account of the Swing Line Lender at the Administrative Agent's
Office not later than 1:00 p.m. on the day specified in such
Committed Loan Notice, whereupon, subject to Section
2.04(c)(ii), each Lender that so makes funds available shall be
deemed to have made a Base Rate Committed Loan to the Borrower
in such amount. The Administrative Agent shall remit the funds
so received to the Swing Line Lender.
(ii) If for any reason any Swing Line Loan cannot be
refinanced by such a Committed Borrowing in accordance with
Section 2.04(c)(i), the request for Base Rate Committed Loans
submitted by the Swing Line Lender as set forth herein shall be
deemed to be a request by the Swing Line Lender that each of the
Lenders fund its risk participation in the relevant Swing Line
Loan and each Lender's payment to the Administrative Agent for
the account of the Swing Line Lender pursuant to Section
2.04(c)(i) shall be deemed payment in respect of such
participation.
(iii) If any Lender fails to make available to the
Administrative Agent for the account of the Swing Line Lender
any amount required to be paid by such Lender pursuant to the
foregoing provisions of this Section 2.04(c) by the time
specified in Section 2.04(c)(i), the Swing Line Lender shall be
entitled to recover from such Lender (acting through the
Administrative Agent), on demand, such amount with interest
thereon for the period from the date such payment is required to
the date on which such payment is immediately available to the
Swing Line Lender at a rate per annum equal to the Federal Funds
Rate from time to time in effect. A certificate of the Swing
Line Lender submitted to any Lender (through the Administrative
Agent) with respect to any amounts owing under this clause (iii)
shall be conclusive absent manifest error.
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(iv) Each Lender's obligation to make Committed Loans
or to purchase and fund risk participations in Swing Line Loans
pursuant to this Section 2.04(c) shall be absolute and
unconditional and shall not be affected by any circumstance,
including (A) any set-off, counterclaim, recoupment, defense or
other right which such Lender may have against the Swing Line
Lender, the Borrower or any other Person for any reason
whatsoever, (B) the occurrence or continuance of a Default, or
(C) any other occurrence, event or condition, whether or not
similar to any of the foregoing; provided, however, that each
Lender's obligation to make Committed Loans pursuant to this
Section 2.04(c) is subject to the conditions set forth in
Section 4.02. No such funding of risk participations shall
relieve or otherwise impair the obligation of the Borrower to
repay Swing Line Loans, together with interest as provided
herein.
(d) Repayment of Participations.
(i) At any time after any Lender has purchased and
funded a risk participation in a Swing Line Loan, if the Swing
Line Lender receives any payment on account of such Swing Line
Loan, the Swing Line Lender will distribute to such Lender its
Pro Rata Share of such payment (appropriately adjusted, in the
case of interest payments, to reflect the period of time during
which such Lender's risk participation was funded) in the same
funds as those received by the Swing Line Lender.
(ii) If any payment received by the Swing Line Lender
in respect of principal or interest on any Swing Line Loan is
required to be returned by the Swing Line Lender under any of
the circumstances described in Section 10.06 (including pursuant
to any settlement entered into by the Swing Line Lender in its
discretion), each Lender shall pay to the Swing Line Lender its
Pro Rata Share thereof on demand of the Administrative Agent,
plus interest thereon from the date of such demand to the date
such amount is returned, at a rate per annum equal to the
Federal Funds Rate. The Administrative Agent will make such
demand upon the request of the Swing Line Lender.
(e) Interest for Account of Swing Line Lender. The Swing
Line Lender shall be responsible for invoicing the Borrower for interest
on the Swing Line Loans. Until each Lender funds its Base Rate Committed
Loan or risk participation pursuant to this Section 2.04 to refinance
such Lender's Pro Rata Share of any Swing Line Loan, interest in respect
of such Pro Rata Share shall be solely for the account of the Swing Line
Lender.
(f) Payments Directly to Swing Line Lender. The Borrower
shall make all payments of principal and interest in respect of the
Swing Line Loans directly to the Swing Line Lender.
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2.05 PREPAYMENTS.
(a) The Borrower may, upon notice to the Administrative
Agent, at any time or from time to time voluntarily prepay Committed
Loans in whole or in part without premium or penalty; provided that (i)
such notice must be received by the Administrative Agent not later than
8:00 a.m. (A) three Business Days prior to any date of prepayment of
Eurodollar Rate Loans and (B) on the date of prepayment of Base Rate
Committed Loans; (ii) any prepayment of Eurodollar Rate Loans shall be
in a principal amount of $1,000,000 or a whole multiple of $1,000,000 in
excess thereof; and (iii) any prepayment of Base Rate Committed Loans
shall be in a principal amount of $500,000 or a whole multiple of
$100,000 in excess thereof or, in each case, if less, the entire
principal amount thereof then outstanding. Each such notice shall
specify the date and amount of such prepayment and the Type(s) of
Committed Loans to be prepaid. The Administrative Agent will promptly
notify each Lender of its receipt of each such notice, and of the amount
of such Lender's Pro Rata Share of such prepayment. If such notice is
given by the Borrower, the Borrower shall make such prepayment and the
payment amount specified in such notice shall be due and payable on the
date specified therein. Any prepayment of a Eurodollar Rate Loan shall
be accompanied by all accrued interest thereon, together with any
additional amounts required pursuant to Section 3.05. Each such
prepayment shall be applied to the Committed Loans of the Lenders in
accordance with their respective Pro Rata Shares.
(b) The Borrower may, upon notice to the Swing Line Lender
(with a copy to the Administrative Agent), at any time or from time to
time, voluntarily prepay Swing Line Loans in whole or in part without
premium or penalty; provided that (i) such notice must be received by
the Swing Line Lender and the Administrative Agent not later than 1:00
p.m. on the date of the prepayment, and (ii) any such prepayment shall
be in a minimum principal amount of $100,000. Each such notice shall
specify the date and amount of such prepayment. If such notice is given
by the Borrower, the Borrower shall make such prepayment and the payment
amount specified in such notice shall be due and payable on the date
specified therein.
(c) If for any reason the Total Outstandings at any time
exceed the Aggregate Commitments then in effect, the Borrower shall
immediately prepay Loans and/or Cash Collateralize the L/C Obligations
in an aggregate amount equal to such excess; provided, however, that the
Borrower shall not be required to Cash Collateralize the L/C Obligations
pursuant to this Section 2.05(c) unless after the prepayment in full of
the Committed Loans and Swing Line Loans the Total Outstandings exceed
the Aggregate Commitments then in effect.
2.06 TERMINATION OR REDUCTION OF COMMITMENTS. The Borrower may, upon
notice to the Administrative Agent, terminate the Aggregate Commitments, or from
time to time permanently reduce the Aggregate Commitments; provided that (i) any
such notice shall be received by the Administrative Agent not later than 8:00
a.m. five Business Days prior to the date of termination or reduction, (ii) any
such partial reduction shall be in an aggregate amount of $5,000,000 or any
whole multiple of $1,000,000 in excess thereof, (iii) the Borrower shall not
terminate or reduce the Aggregate Commitments if, after giving effect thereto
and to any
32
concurrent prepayments hereunder, the Total Outstandings would exceed the
Aggregate Commitments, and (iv) if, after giving effect to any reduction of the
Aggregate Commitments, the Letter of Credit Sublimit or the Swing Line Sublimit
exceeds the amount of the Aggregate Commitments, such Sublimit shall be
automatically reduced by the amount of such excess. The Administrative Agent
will promptly notify the Lenders of any such notice of termination or reduction
of the Aggregate Commitments. Any reduction of the Aggregate Commitments shall
be applied to the Commitment of each Lender according to its Pro Rata Share. All
commitment fees accrued until the effective date of any termination of the
Aggregate Commitments shall be paid on the effective date of such termination.
2.07 REPAYMENT OF LOANS.
(a) The Borrower shall repay to the Lenders on the Maturity
Date the aggregate principal amount of Committed Loans outstanding on
such date.
(b) The Borrower shall repay each Swing Line Loan on the
Maturity Date.
2.08 INTEREST.
(a) Subject to the provisions of subsection (b) below, (i)
each Eurodollar Rate Loan shall bear interest on the outstanding
principal amount thereof for each Interest Period at a rate per annum
equal to the Eurodollar Rate for such Interest Period plus the
Applicable Rate; (ii) each Base Rate Committed Loan shall bear interest
on the outstanding principal amount thereof from the applicable
borrowing date at a rate per annum equal to the Base Rate plus the
Applicable Rate; and (iii) each Swing Line Loan shall bear interest on
the outstanding principal amount thereof from the applicable borrowing
date at a rate per annum equal to the Base Rate plus the Applicable
Rate.
(b) If any amount payable by the Borrower under any Loan
Document is not paid when due (without regard to any applicable grace
periods), whether at stated maturity, by acceleration or otherwise, such
amount shall thereafter bear interest at a fluctuating interest rate per
annum at all times equal to the Default Rate to the fullest extent
permitted by applicable Laws. Furthermore, while any Event of Default
exists, the Borrower shall pay interest on the principal amount of all
outstanding Obligations hereunder at a fluctuating interest rate per
annum at all times equal to the Default Rate to the fullest extent
permitted by applicable Laws. Accrued and unpaid interest on past due
amounts (including interest on past due interest) shall be due and
payable upon demand.
(c) Interest on each Loan shall be due and payable in
arrears on each Interest Payment Date applicable thereto and at such
other times as may be specified herein. Interest hereunder shall be due
and payable in accordance with the terms hereof before and after
judgment, and before and after the commencement of any proceeding under
any Debtor Relief Law.
2.09 FEES. In addition to certain fees described in subsections (i)
and (j) of Section 2.03:
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(a) Unused Commitment Fee. The Borrower shall pay to the
Administrative Agent for the account of each Lender in accordance with
its Pro Rata Share, a commitment fee equal to 0.25% times the actual
daily amount by which the Aggregate Commitments exceed the sum of (i)
the Outstanding Amount of Committed Loans and (ii) the Outstanding
Amount of L/C Obligations. The commitment fee shall accrue at all times
during the Availability Period, including at any time during which one
or more of the conditions in Article IV is not met, and shall be due and
payable quarterly in arrears on the last Business Day of each March,
June, September and December, commencing with the first such date to
occur after the Closing Date, and on the Maturity Date.
(b) Other Fees. (i) The Borrower shall pay to the
Administrative Agent for its own account fees in the amounts and at the
times specified in the Fee Letter. Such fees shall be fully earned when
paid and shall not be refundable for any reason whatsoever; and (ii) the
Borrower shall pay to the Lenders such fees as shall have been
separately agreed upon in writing in the amounts and at the times so
specified. Such fees shall be fully earned when paid and shall not be
refundable for any reason whatsoever.
2.10 COMPUTATION OF INTEREST AND FEES. All computations of interest
for Base Rate Loans when the Base Rate is determined by Bank of America's "prime
rate" shall be made on the basis of a year of 365 or 366 days, as the case may
be, and actual days elapsed. All other computations of fees and interest shall
be made on the basis of a 360-day year and actual days elapsed (which results in
more fees or interest, as applicable, being paid than if computed on the basis
of a 365-day year). Interest shall accrue on each Loan for the day on which the
Loan is made, and shall not accrue on a Loan, or any portion thereof, for the
day on which the Loan or such portion is paid, provided that any Loan that is
repaid on the same day on which it is made shall, subject to Section 2.12(a),
bear interest for one day.
2.11 EVIDENCE OF DEBT.
(a) The Credit Extensions made by each Lender shall be
evidenced by one or more accounts or records maintained by such Lender
and by the Administrative Agent in the ordinary course of business. The
accounts or records maintained by the Administrative Agent and each
Lender shall be conclusive absent manifest error of the amount of the
Credit Extensions made by the Lenders to the Borrower and the interest
and payments thereon. Any failure to so record or any error in doing so
shall not, however, limit or otherwise affect the obligation of the
Borrower hereunder to pay any amount owing with respect to the
Obligations. In the event of any conflict between the accounts and
records maintained by any Lender and the accounts and records of the
Administrative Agent in respect of such matters, the accounts and
records of the Administrative Agent shall control in the absence of
manifest error. Upon the request of any Lender made through the
Administrative Agent, the Borrower shall execute and deliver to such
Lender (through the Administrative Agent) a Note, which shall evidence
such Lender's Loans in addition to such accounts or records. Each Lender
may attach schedules to its Note and endorse thereon the date, Type (if
applicable), amount and maturity of its Loans and payments with respect
thereto.
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(b) In addition to the accounts and records referred to in
subsection (a), each Lender and the Administrative Agent shall maintain
in accordance with its usual practice accounts or records evidencing the
purchases and sales by such Lender of participations in Letters of
Credit and Swing Line Loans. In the event of any conflict between the
accounts and records maintained by the Administrative Agent and the
accounts and records of any Lender in respect of such matters, the
accounts and records of the Administrative Agent shall control in the
absence of manifest error.
2.12 PAYMENTS GENERALLY.
(a) All payments to be made by the Borrower shall be made
without condition or deduction for any counterclaim, defense, recoupment
or setoff. Except as otherwise expressly provided herein, all payments
by the Borrower hereunder shall be made to the Administrative Agent, for
the account of the respective Lenders to which such payment is owed, at
the Administrative Agent's Office in Dollars and in immediately
available funds not later than 11:00 a.m. on the date specified herein.
The Administrative Agent will promptly distribute to each Lender its Pro
Rata Share (or other applicable share as provided herein) of such
payment in like funds as received by wire transfer to such Lender's
Lending Office. All payments received by the Administrative Agent after
2:00 p.m. shall be deemed received on the next succeeding Business Day
and any applicable interest or fee shall continue to accrue.
(b) If any payment to be made by the Borrower shall come due
on a day other than a Business Day, payment shall be made on the next
following Business Day, and such extension of time shall be reflected in
computing interest or fees, as the case may be.
(c) Unless the Borrower or any Lender has notified the
Administrative Agent, prior to the date any payment is required to be
made by it to the Administrative Agent hereunder, that the Borrower or
such Lender, as the case may be, will not make such payment, the
Administrative Agent may assume that the Borrower or such Lender, as the
case may be, has timely made such payment and may (but shall not be so
required to), in reliance thereon, make available a corresponding amount
to the Person entitled thereto. If and to the extent that such payment
was not in fact made to the Administrative Agent in immediately
available funds, then:
(i) if the Borrower failed to make such payment,
each Lender shall forthwith on demand repay to the
Administrative Agent the portion of such assumed payment that
was made available to such Lender in immediately available
funds, together with interest thereon in respect of each day
from and including the date such amount was made available by
the Administrative Agent to such Lender to the date such amount
is repaid to the Administrative Agent in immediately available
funds at the Federal Funds Rate from time to time in effect; and
(ii) if any Lender failed to make such payment, such
Lender shall forthwith on demand pay to the Administrative Agent
the amount thereof in immediately available funds, together with
interest thereon for the period from the
35
date such amount was made available by the Administrative Agent
to the Borrower to the date such amount is recovered by the
Administrative Agent (the "Compensation Period") at a rate per
annum equal to the Federal Funds Rate from time to time in
effect. If such Lender pays such amount to the Administrative
Agent, then such amount shall constitute such Lender's Committed
Loan included in the applicable Borrowing. If such Lender does
not pay such amount forthwith upon the Administrative Agent's
demand therefor, the Administrative Agent may make a demand
therefor upon the Borrower, and the Borrower shall pay such
amount to the Administrative Agent, together with interest
thereon for the Compensation Period at a rate per annum equal to
the rate of interest applicable to the applicable Borrowing.
Nothing herein shall be deemed to relieve any Lender from its
obligation to fulfill its Commitment or to prejudice any rights
which the Administrative Agent or the Borrower may have against
any Lender as a result of any default by such Lender hereunder.
A notice of the Administrative Agent to any Lender or the Borrower with respect
to any amount owing under this subsection (c) shall be conclusive, absent
manifest error.
(d) If any Lender makes available to the Administrative
Agent funds for any Loan to be made by such Lender as provided in the
foregoing provisions of this Article II, and such funds are not made
available to the Borrower by the Administrative Agent because the
conditions to the applicable Credit Extension set forth in Article IV
are not satisfied or waived in accordance with the terms hereof, the
Administrative Agent shall return such funds (in like funds as received
from such Lender) to such Lender, without interest.
(e) The obligations of the Lenders hereunder to make
Committed Loans and to fund participations in Letters of Credit and
Swing Line Loans are several and not joint. The failure of any Lender to
make any Committed Loan or to fund any such participation on any date
required hereunder shall not relieve any other Lender of its
corresponding obligation to do so on such date, and no Lender shall be
responsible for the failure of any other Lender to so make its Committed
Loan or purchase its participation.
(f) Nothing herein shall be deemed to obligate any Lender to
obtain the funds for any Loan in any particular place or manner or to
constitute a representation by any Lender that it has obtained or will
obtain the funds for any Loan in any particular place or manner.
2.13 SHARING OF PAYMENTS. If, other than as expressly provided
elsewhere herein, any Lender shall obtain on account of the Committed Loans made
by it, or the participations in L/C Obligations or in Swing Line Loans held by
it, any payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise) in excess of its ratable share (or other share
contemplated hereunder) thereof, such Lender shall immediately (a) notify the
Administrative Agent of such fact, and (b) purchase from the other Lenders such
participations in the Committed Loans made by them and/or such subparticipations
in the participations in L/C Obligations or Swing Line Loans held by them, as
the case may be, as shall be necessary to cause such purchasing
36
Lender to share the excess payment in respect of such Committed Loans or such
participations, as the case may be, pro rata with each of them; provided,
however, that if all or any portion of such excess payment is thereafter
recovered from the purchasing Lender under any of the circumstances described in
Section 10.06 (including pursuant to any settlement entered into by the
purchasing Lender in its discretion), such purchase shall to that extent be
rescinded and each other Lender shall repay to the purchasing Lender the
purchase price paid therefor, together with an amount equal to such paying
Lender's ratable share (according to the proportion of (i) the amount of such
paying Lender's required repayment to (ii) the total amount so recovered from
the purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered, without further
interest thereon. The Borrower agrees that any Lender so purchasing a
participation from another Lender may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off, but subject
to Section 10.09) with respect to such participation as fully as if such Lender
were the direct creditor of the Borrower in the amount of such participation.
The Administrative Agent will keep records (which shall be conclusive and
binding in the absence of manifest error) of participations purchased under this
Section and will in each case notify the Lenders following any such purchases or
repayments. Each Lender that purchases a participation pursuant to this Section
shall from and after such purchase have the right to give all notices, requests,
demands, directions and other communications under this Agreement with respect
to the portion of the Obligations purchased to the same extent as though the
purchasing Lender were the original owner of the Obligations purchased.
2.14 DIRECT DEBIT. On each date when the payment of any principal,
interest or fees are due hereunder or under any Note, Borrower agrees to
maintain on deposit in an ordinary checking account maintained by the Borrower
with the Administrative Agent (as such account shall be designated by Borrower
in a written notice to the Administrative Agent from time to time, the "Borrower
Account") an amount sufficient to pay such principal, interest or fees in full.
Borrower hereby authorizes the Administrative Agent (i) to deduct automatically
all principal, interest or fees when due hereunder, or under the Notes from the
Borrower Account, and (ii) if and to the extent any payment under this Agreement
or any other Loan Document is not made when due, to deduct automatically any
such amount from any or all of the accounts of Borrower maintained with the
Administrative Agent. Administrative Agent agrees to provide timely notice to
Borrower of any automatic deduction made pursuant to Section 2.14. If there are
any insufficient funds in the Borrower Account or any other account on the date
the Administrative Agent enters any debit authorized by this Agreement, the
Administrative Agent may reverse the debit.
ARTICLE III.
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 TAXES.
(a) Any and all payments by the Borrower to or for the
account of the Administrative Agent or any Lender under any Loan
Document shall be made free and
37
clear of and without deduction for any and all present or future taxes,
duties, levies, imposts, deductions, assessments, fees, withholdings or
similar charges, and all liabilities with respect thereto, excluding, in
the case of the Administrative Agent and each Lender, taxes imposed on
or measured by its overall net income, and franchise taxes imposed on it
(in lieu of net income taxes), by the jurisdiction (or any political
subdivision thereof) under the Laws of which the Administrative Agent or
such Lender, as the case may be, is organized or maintains a lending
office (all such non-excluded taxes, duties, levies, imposts,
deductions, assessments, fees, withholdings or similar charges, and
liabilities being hereinafter referred to as "Taxes"). If the Borrower
shall be required by any Laws to deduct any Taxes from or in respect of
any sum payable under any Loan Document to the Administrative Agent or
any Lender, (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section), each of the Administrative
Agent and such Lender receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower shall make
such deductions, (iii) the Borrower shall pay the full amount deducted
to the relevant taxation authority or other authority in accordance with
applicable Laws, and (iv) within 30 days after the date of such payment,
the Borrower shall furnish to the Administrative Agent (which shall
forward the same to such Lender) the original or a certified copy of a
receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any and all
present or future stamp, court or documentary taxes and any other excise
or property taxes or charges or similar levies which arise from any
payment made under any Loan Document or from the execution, delivery,
performance, enforcement or registration of, or otherwise with respect
to, any Loan Document (hereinafter referred to as "Other Taxes").
(c) If the Borrower shall be required to deduct or pay any
Taxes or Other Taxes from or in respect of any sum payable under any
Loan Document to the Administrative Agent or any Lender, the Borrower
shall also pay to the Administrative Agent or to such Lender, as the
case may be, at the time interest is paid, such additional amount that
the Administrative Agent or such Lender specifies is necessary to
preserve the after-tax yield (after factoring in all taxes, including
taxes imposed on or measured by net income) that the Administrative
Agent or such Lender would have received if such Taxes or Other Taxes
had not been imposed.
(d) The Borrower agrees to indemnify the Administrative
Agent and each Lender for (i) the full amount of Taxes and Other Taxes
(including any Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this Section) paid by the
Administrative Agent and such Lender, (ii) amounts payable under Section
3.01(c) and (iii) any liability (including additions to tax, penalties,
interest and expenses) arising therefrom or with respect thereto, in
each case whether or not such Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority.
Payment under this subsection (d) shall be made within 30 days after the
date the Lender or the Administrative Agent makes a demand therefor.
3.02 ILLEGALITY. If any Lender determines that any Law has made it
unlawful, or that any Governmental Authority has asserted that it is unlawful,
for any Lender or its applicable
38
Lending Office to make, maintain or fund Eurodollar Rate Loans, or to determine
or charge interest rates based upon the Eurodollar Rate, then, on notice thereof
by such Lender to the Borrower through the Administrative Agent, any obligation
of such Lender to make or continue Eurodollar Rate Loans or to convert Base Rate
Committed Loans to Eurodollar Rate Loans shall be suspended until such Lender
notifies the Administrative Agent and the Borrower that the circumstances giving
rise to such determination no longer exist. Upon receipt of such notice, the
Borrower shall, upon demand from such Lender (with a copy to the Administrative
Agent), prepay or, if applicable, convert all Eurodollar Rate Loans of such
Lender to Base Rate Loans, either on the last day of the Interest Period
therefor, if such Lender may lawfully continue to maintain such Eurodollar Rate
Loans to such day, or immediately, if such Lender may not lawfully continue to
maintain such Eurodollar Rate Loans. Upon any such prepayment or conversion, the
Borrower shall also pay accrued interest on the amount so prepaid or converted.
Each Lender agrees to designate a different Lending Office if such designation
will avoid the need for such notice and will not, in the good faith judgment of
such Lender, otherwise be materially disadvantageous to such Lender.
3.03 INABILITY TO DETERMINE RATES. If the Required Lenders determine
that for any reason adequate and reasonable means do not exist for determining
the Eurodollar Rate for any requested Interest Period with respect to a proposed
Eurodollar Rate Loan, or that the Eurodollar Rate for any requested Interest
Period with respect to a proposed Eurodollar Rate Loan does not adequately and
fairly reflect the cost to such Lenders of funding such Loan, the Administrative
Agent will promptly so notify the Borrower and each Lender. Thereafter, the
obligation of the Lenders to make or maintain Eurodollar Rate Loans shall be
suspended until the Administrative Agent (upon the instruction of the Required
Lenders) revokes such notice. Upon receipt of such notice, the Borrower may
revoke any pending request for a Borrowing of, conversion to or continuation of
Eurodollar Rate Loans or, failing that, will be deemed to have converted such
request into a request for a Committed Borrowing of Base Rate Loans in the
amount specified therein.
3.04 INCREASED COST AND REDUCED RETURN; CAPITAL ADEQUACY; RESERVES ON
EURODOLLAR RATE LOANS.
(a) If any Lender determines that as a result of the
introduction of or any change in or in the interpretation of any Law, or
such Lender's compliance therewith, there shall be any increase in the
cost to such Lender of agreeing to make or making, funding or
maintaining Eurodollar Rate Loans or (as the case may be) issuing or
participating in Letters of Credit, or a reduction in the amount
received or receivable by such Lender in connection with any of the
foregoing (excluding for purposes of this subsection (a) any such
increased costs or reduction in amount resulting from (i) Taxes or Other
Taxes (as to which Section 3.01 shall govern), (ii) changes in the basis
of taxation of overall net income or overall gross income by the United
States or any foreign jurisdiction or any political subdivision of
either thereof under the Laws of which such Lender is organized or has
its Lending Office, and (iii) reserve requirements contemplated by
Section 3.04(c)), then from time to time upon demand of such Lender
(with a copy of such demand to the Administrative Agent), the Borrower
shall pay to such Lender such additional amounts as will compensate such
Lender for such increased cost or reduction.
39
(b) If any Lender determines that the introduction of any
Law regarding capital adequacy or any change therein or in the
interpretation thereof, or compliance by such Lender (or its Lending
Office) therewith, has the effect of reducing the rate of return on the
capital of such Lender or any corporation controlling such Lender as a
consequence of such Lender's obligations hereunder (taking into
consideration its policies with respect to capital adequacy and such
Lender's desired return on capital), then from time to time upon demand
of such Lender (with a copy of such demand to the Administrative Agent),
the Borrower shall pay to such Lender such additional amounts as will
compensate such Lender for such reduction.
(c) The Borrower shall pay to each Lender, as long as such
Lender shall be required to maintain reserves with respect to
liabilities or assets consisting of or including Eurocurrency funds or
deposits (currently known as "Eurocurrency liabilities"), additional
interest on the unpaid principal amount of each Eurodollar Rate Loan
equal to the actual costs of such reserves allocated to such Loan by
such Lender (as determined by such Lender in good faith, which
determination shall be conclusive), which shall be due and payable on
each date on which interest is payable on such Loan, provided the
Borrower shall have received at least 15 days' prior notice (with a copy
to the Administrative Agent) of such additional interest from such
Lender. If a Lender fails to give notice 15 days prior to the relevant
Interest Payment Date, such additional interest shall be due and payable
15 days from receipt of such notice.
3.05 FUNDING LOSSES. Upon demand of any Lender (with a copy to the
Administrative Agent) from time to time, the Borrower shall promptly compensate
such Lender for and hold such Lender harmless from any loss, cost or expense
incurred by it as a result of:
(a) any continuation, conversion, payment or prepayment of
any Loan other than a Base Rate Loan on a day other than the last day of
the Interest Period for such Loan (whether voluntary, mandatory,
automatic, by reason of acceleration, or otherwise); or
(b) any failure by the Borrower (for a reason other than the
failure of such Lender to make a Loan) to prepay, borrow, continue or
convert any Loan other than a Base Rate Loan on the date or in the
amount notified by the Borrower; or
(c) any assignment of a Eurodollar Rate Loan on a day other
than the last day of the Interest Period therefor as a result of a
request by the Borrower pursuant to Section 10.16;
including any loss of anticipated profits and any loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain such Loan or
from fees payable to terminate the deposits from which such funds were obtained.
The Borrower shall also pay any customary administrative fees charged by such
Lender in connection with the foregoing.
For purposes of calculating amounts payable by the Borrower to the Lenders under
this Section 3.05, each Lender shall be deemed to have funded each Eurodollar
Rate Loan made by it at the
40
Eurodollar Rate for such Loan by a matching deposit or other borrowing in the
London interbank eurodollar market for a comparable amount and for a comparable
period, whether or not such Eurodollar Rate Loan was in fact so funded.
3.06 MATTERS APPLICABLE TO ALL REQUESTS FOR COMPENSATION.
(a) A certificate of the Administrative Agent or any Lender
claiming compensation under this Article III and setting forth the
additional amount or amounts to be paid to it hereunder shall be
conclusive in the absence of manifest error. In determining such amount,
the Administrative Agent or such Lender may use any reasonable averaging
and attribution methods.
(b) Upon any Lender's making a claim for compensation under
Section 3.01 or 3.04, the Borrower may replace such Lender in accordance
with Section 10.16.
3.07 SURVIVAL. All of the Borrower's obligations under this Article
III shall survive termination of the Aggregate Commitments and repayment of all
other Obligations hereunder.
ARTICLE IV.
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
4.01 CONDITIONS OF INITIAL CREDIT EXTENSION. The obligation of each
Lender to make its initial Credit Extension hereunder is subject to satisfaction
of the following conditions precedent:
(a) The Administrative Agent's receipt of the following,
each of which shall be originals or facsimiles (followed promptly by
originals) unless otherwise specified, each properly executed by a
Responsible Officer of the signing Loan Party, each dated the Closing
Date (or, in the case of certificates of governmental officials, a
recent date before the Closing Date) and each in form and substance
satisfactory to the Administrative Agent and its legal counsel:
(i) executed counterparts of this Agreement and the
Guaranty, sufficient in number for distribution to the
Administrative Agent, each Lender and the Borrower;
(ii) a Note executed by the Borrower in favor of each
Lender requesting a Note;
(iii) such certificates of resolutions or other
action, incumbency certificates and/or other certificates of
Responsible Officers of each Loan Party as the Administrative
Agent may require evidencing the identity, authority and
capacity of each Responsible Officer thereof authorized to act
as a Responsible Officer in connection with this Agreement and
the other Loan Documents to which such Loan Party is a party;
41
(iv) such documents and certifications as the
Administrative Agent may reasonably require to evidence that
each Loan Party is duly organized or formed, and that each of
the Borrower and each guarantor is validly existing, in good
standing and qualified to engage in business in each
jurisdiction where its ownership, lease or operation of
properties or the conduct of its business requires such
qualification, except to the extent that failure to do so could
not reasonably be expected to have a Material Adverse Effect;
(v) a favorable opinion of in-house counsel to the
Loan Parties, addressed to the Administrative Agent and each
Lender, as to such matters concerning the Loan Parties and the
Loan Documents as the Required Lenders may reasonably request;
(vi) a certificate of a Responsible Officer of each
Loan Party either (A) attaching copies of all consents, licenses
and approvals required in connection with the execution,
delivery and performance by such Loan Party and the validity
against such Loan Party of the Loan Documents to which it is a
party, and such consents, licenses and approvals shall be in
full force and effect, or (B) stating that no such consents,
licenses or approvals are so required;
(vii) a certificate signed by a Responsible Officer of
the Borrower certifying (A) that the conditions specified in
Sections 4.02(a) and (b) have been satisfied, and (B) that there
has been no event or circumstance since the date of the Audited
Financial Statements that has had or could be reasonably
expected to have, either individually or in the aggregate, a
Material Adverse Effect; and (C) a calculation of the
Consolidated EBITDA as of the last day of the fiscal quarter of
the Borrower most recently ended prior to the Closing Date;
(viii) evidence that the Existing Credit Agreement has
been or concurrently with the Closing Date is being terminated;
and
(ix) such other assurances, certificates, documents,
consents or opinions as the Administrative Agent, the L/C
Issuer, the Swing Line Lender or the Required Lenders reasonably
may require.
(b) Any fees required to be paid on or before the Closing
Date shall have been paid.
(c) Unless waived by the Administrative Agent, the Borrower
shall have paid all Attorney Costs of the Administrative Agent to the
extent invoiced prior to or on the Closing Date, plus such additional
amounts of Attorney Costs as shall constitute its reasonable estimate of
Attorney Costs incurred or to be incurred by it through the closing
proceedings (provided that such estimate shall not thereafter preclude a
final settling of accounts between the Borrower and the Administrative
Agent).
(d) The Closing Date shall have occurred on or before July
31, 2002.
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4.02 CONDITIONS TO ALL CREDIT EXTENSIONS. The obligation of each
Lender to honor any Request for Credit Extension (other than a Committed Loan
Notice requesting only a conversion of Committed Loans to the other Type, or a
continuation of Eurodollar Rate Loans) is subject to the following conditions
precedent:
(a) The representations and warranties of the Borrower and
each other Loan Party contained in Article V or any other Loan Document,
or which are contained in any document furnished at any time under or in
connection herewith or therewith, shall be true and correct on and as of
the date of such Credit Extension, except to the extent that such
representations and warranties specifically refer to an earlier date, in
which case they shall be true and correct as of such earlier date, and
except that for purposes of this Section 4.02, the representations and
warranties contained in subsections (a) and (b) of Section 5.05 shall be
deemed to refer to the most recent statements furnished pursuant to
clauses (a) and (b), respectively, of Section 6.01.
(b) No Default shall exist, or would result from such
proposed Credit Extension.
(c) The Administrative Agent and, if applicable, the L/C
Issuer or the Swing Line Lender shall have received a Request for Credit
Extension in accordance with the requirements hereof.
Each Request for Credit Extension (other than a Committed Loan Notice
requesting only a conversion of Committed Loans to the other Type or a
continuation of Eurodollar Rate Loans) submitted by the Borrower shall be deemed
to be a representation and warranty that the conditions specified in Sections
4.02(a) and (b) have been satisfied on and as of the date of the applicable
Credit Extension.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Administrative Agent and the Lenders
that:
5.01 EXISTENCE, QUALIFICATION AND POWER; COMPLIANCE WITH LAWS. Each
Loan Party (a) is a corporation duly organized or formed, validly existing and
in good standing under the Laws of the jurisdiction of its incorporation or
organization, (b) has all requisite power and authority and all requisite
governmental licenses, authorizations, consents and approvals to (i) own its
assets and carry on its business and (ii) execute, deliver and perform its
obligations under the Loan Documents to which it is a party, (c) is duly
qualified and is licensed and in good standing under the Laws of each
jurisdiction where its ownership, lease or operation of properties or the
conduct of its business requires such qualification or license, and (d) is in
compliance with all Laws; except in each case referred to in clause (b)(i), (c)
or (d), to the extent that failure to do so could not reasonably be expected to
have a Material Adverse Effect.
5.02 AUTHORIZATION; NO CONTRAVENTION. The execution, delivery and
performance by each Loan Party of each Loan Document to which such Person is
party, have been duly authorized by all necessary corporate or other
organizational action, and do not and will not (a)
43
contravene the terms of any of such Person's Organization Documents; (b)
conflict with or result in any breach or contravention of, or the creation of
any Lien under, (i) any Contractual Obligation to which such Person is a party
or (ii) any order, injunction, writ or decree of any Governmental Authority or
any arbitral award to which such Person or its property is subject; or (c)
violate any Law.
5.03 GOVERNMENTAL AUTHORIZATION; OTHER CONSENTS. No approval,
consent, exemption, authorization, or other action by, or notice to, or filing
with, any Governmental Authority or any other Person is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, any Loan Party of this Agreement or any other Loan Document.
5.04 BINDING EFFECT. This Agreement has been, and each other Loan
Document, when delivered hereunder, will have been, duly executed and delivered
by each Loan Party that is party thereto. This Agreement constitutes, and each
other Loan Document when so delivered will constitute, a legal, valid and
binding obligation of such Loan Party, enforceable against each Loan Party that
is party thereto in accordance with its terms.
5.05 FINANCIAL STATEMENTS; NO MATERIAL ADVERSE EFFECT.
(a) The Audited Financial Statements (i) were prepared in
accordance with GAAP consistently applied throughout the period covered
thereby, except as otherwise expressly noted therein; (ii) fairly
present the financial condition of the Borrower and its Subsidiaries as
of the date thereof and their results of operations for the period
covered thereby in accordance with GAAP consistently applied throughout
the period covered thereby, except as otherwise expressly noted therein;
and (iii) show all material indebtedness and other liabilities, direct
or contingent, of the Borrower and its Subsidiaries as of the date
thereof, including liabilities for taxes, material commitments and
Indebtedness.
(b) The unaudited consolidated financial statements of the
Borrower and its Subsidiaries dated March 31, 2002, and the related
consolidated statements of income or operations, shareholders' equity
and cash flows for the fiscal quarter ended on that date (i) were
prepared in accordance with GAAP consistently applied throughout the
period covered thereby, except as otherwise expressly noted therein, and
(ii) fairly present the financial condition of the Borrower and its
Subsidiaries as of the date thereof and their results of operations for
the period covered thereby, subject, in the case of clauses (i) and
(ii), to the absence of footnotes and to normal year-end audit
adjustments. Schedule 5.05 sets forth all material indebtedness and
other liabilities, direct or contingent, of the Borrower and its
consolidated Subsidiaries as of the date of such financial statements,
including liabilities for taxes, material commitments and Indebtedness.
(c) Since the date of the Audited Financial Statements,
there has been no event or circumstance, either individually or in the
aggregate, that has had or could reasonably be expected to have a
Material Adverse Effect.
44
5.06 LITIGATION. Except as specifically disclosed in Schedule 5.06,
there are no actions, suits, proceedings, claims or disputes pending or, to the
knowledge of the Borrower after due and diligent investigation, threatened or
contemplated, at law, in equity, in arbitration or before any Governmental
Authority, by or against the Borrower or any of its Subsidiaries or against any
of their properties or revenues that (a) purport to affect or pertain to this
Agreement or any other Loan Document, or any of the transactions contemplated
hereby, or (b) either individually or in the aggregate, if determined adversely,
could reasonably be expected to have a Material Adverse Effect.
5.07 NO DEFAULT. Neither the Borrower nor any Subsidiary is in
default under or with respect to any Contractual Obligation that could, either
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. No Default has occurred and is continuing or would result from
the consummation of the transactions contemplated by this Agreement or any other
Loan Document.
5.08 OWNERSHIP OF PROPERTY; LIENS. Each of the Borrower and each
Subsidiary has good record and marketable title in fee simple to, or valid
leasehold interests in, all real property necessary or used in the ordinary
conduct of its business, except for such defects in title as could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. The property of the Borrower and its Subsidiaries is subject to
no Liens, other than Liens permitted by Section 7.01.
5.09 ENVIRONMENTAL COMPLIANCE. The Borrower and its Subsidiaries
conduct in the ordinary course of business a review of the effect of existing
Environmental Laws and claims alleging potential liability or responsibility for
violation of any Environmental Law on their respective businesses, operations
and properties, and as a result thereof the Borrower has reasonably concluded
that, except as specifically disclosed in Schedule 5.09, such Environmental Laws
and claims could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.
5.10 INSURANCE. The properties of the Borrower and its Subsidiaries
are insured with financially sound and reputable insurance companies not
Affiliates of the Borrower, in such amounts (after giving effect to any
self-insurance compatible with the following standards), with such deductibles
and covering such risks as are customarily carried by companies engaged in
similar businesses and owning similar properties in localities where the
Borrower or the applicable Subsidiary operates.
5.11 TAXES. The Borrower and its Subsidiaries have filed all Federal,
state and other material tax returns and reports required to be filed, and have
paid all Federal, state and other material taxes, assessments, fees and other
governmental charges levied or imposed upon them or their properties, income or
assets otherwise due and payable, except those which are being contested in good
faith by appropriate proceedings diligently conducted and for which adequate
reserves have been provided in accordance with GAAP. There is no proposed tax
assessment against the Borrower or any Subsidiary that would, if made, have a
Material Adverse Effect.
45
5.12 ERISA COMPLIANCE.
(a) Each Plan is in compliance in all material respects with
the applicable provisions of ERISA, the Code and other Federal or state
Laws. Each Plan that is intended to qualify under Section 401(a) of the
Code has received a favorable determination letter from the IRS or an
application for such a letter is currently being processed by the IRS
with respect thereto and, to the best knowledge of the Borrower, nothing
has occurred which would prevent, or cause the loss of, such
qualification. The Borrower and each ERISA Affiliate have made all
required contributions to each Plan subject to Section 412 of the Code,
and no application for a funding waiver or an extension of any
amortization period pursuant to Section 412 of the Code has been made
with respect to any Plan.
(b) There are no pending or, to the best knowledge of the
Borrower, threatened claims, actions or lawsuits, or action by any
Governmental Authority, with respect to any Plan that could be
reasonably be expected to have a Material Adverse Effect. There has been
no prohibited transaction or violation of the fiduciary responsibility
rules with respect to any Plan that has resulted or could reasonably be
expected to result in a Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably
expected to occur; (ii) no Pension Plan has any Unfunded Pension
Liability; (iii) neither the Borrower nor any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability under Title IV
of ERISA with respect to any Pension Plan (other than premiums due and
not delinquent under Section 4007 of ERISA); (iv) neither the Borrower
nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any liability (and no event has occurred which, with the giving of
notice under Section 4219 of ERISA, would result in such liability)
under Sections 4201 or 4243 of ERISA with respect to a Multiemployer
Plan; and (v) neither the Borrower nor any ERISA Affiliate has engaged
in a transaction that could be subject to Sections 4069 or 4212(c) of
ERISA.
5.13 SUBSIDIARIES. The Borrower has no Subsidiaries other than those
specifically disclosed in Part (a) of Schedule 5.13 and has no equity
investments in any other corporation or entity other than those specifically
disclosed in Part (b) of Schedule 5.13.
5.14 MARGIN REGULATIONS; INVESTMENT COMPANY ACT; PUBLIC UTILITY
HOLDING COMPANY ACT.
(a) The Borrower is not engaged and will not engage,
principally or as one of its important activities, in the business of
purchasing or carrying margin stock (within the meaning of Regulation U
issued by the FRB), or extending credit for the purpose of purchasing or
carrying margin stock.
(b) None of the Borrower, any Person Controlling the
Borrower, or any Subsidiary (i) is a "holding company," or a "subsidiary
company" of a "holding company," or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company," within the
meaning of the Public Utility Holding Company Act of
46
1935, or (ii) is or is required to be registered as an "investment
company" under the Investment Company Act of 1940.
5.15 DISCLOSURE. The Borrower has disclosed to the Administrative
Agent and the Lenders all agreements, instruments and corporate or other
restrictions to which it or any of its Subsidiaries is subject, and all other
matters known to it, that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect. No report, financial statement,
certificate or other information furnished (whether in writing or orally) by or
on behalf of any Loan Party to the Administrative Agent or any Lender in
connection with the transactions contemplated hereby and the negotiation of this
Agreement or delivered hereunder (as modified or supplemented by other
information so furnished) contains any material misstatement of fact or omits to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided that,
with respect to projected financial information, the Borrower represents only
that such information was prepared in good faith based upon assumptions believed
to be reasonable at the time.
5.16 COMPLIANCE WITH LAWS. Each of the Borrower and each Subsidiary
is in compliance in all material respects with the requirements of all Laws and
all orders, writs, injunctions and decrees applicable to it or to its
properties, except in such instances in which (a) such requirement of Law or
order, writ, injunction or decree is being contested in good faith by
appropriate proceedings diligently conducted or (b) the failure to comply
therewith, either individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
5.17 INTELLECTUAL PROPERTY; LICENSES, ETC. The Borrower and its
Subsidiaries own, or possess the right to use, all of the trademarks, service
marks, trade names, copyrights, patents, patent rights, franchises, licenses and
other intellectual property rights (collectively, "IP Rights") that are
reasonably necessary for the operation of their respective businesses, without
conflict with the rights of any other Person. To the best knowledge of the
Borrower, no slogan or other advertising device, product, process, method,
substance, part or other material now employed, or now contemplated to be
employed, by the Borrower or any Subsidiary infringes upon any rights held by
any other Person. Except as specifically disclosed in Schedule 5.17, no claim or
litigation regarding any of the foregoing is pending or, to the best knowledge
of the Borrower, threatened, which, either individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.
ARTICLE VI.
AFFIRMATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or other
Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, the Borrower shall, and shall (except in the case of
the covenants set forth in Sections 6.01, 6.02, 6.03 and 6.11) cause each
Subsidiary to:
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6.01 FINANCIAL STATEMENTS. Deliver to the Administrative Agent and
each Lender, in form and detail satisfactory to the Administrative Agent and the
Required Lenders:
(a) as soon as available, but in any event within 120 days
after the end of each fiscal year of the Borrower, a consolidated
balance sheet of the Borrower and its Subsidiaries as at the end of such
fiscal year, and the related consolidated statements of income or
operations, shareholders' equity and cash flows for such fiscal year,
setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail and prepared in
accordance with GAAP, audited and accompanied by a report and opinion of
an independent certified public accountant of nationally recognized
standing reasonably acceptable to the Required Lenders, which report and
opinion shall be prepared in accordance with generally accepted auditing
standards and shall not be subject to any "going concern" or like
qualification or exception or any qualification or exception as to the
scope of such audit; and
(b) as soon as available, but in any event within 45 days
after the end of each of the first three fiscal quarters of each fiscal
year of the Borrower, a consolidated balance sheet of the Borrower and
its Subsidiaries as at the end of such fiscal quarter, and the related
consolidated statements of income or operations, shareholders' equity
and cash flows for such fiscal quarter and for the portion of the
Borrower's fiscal year then ended, setting forth in each case in
comparative form the figures for the corresponding fiscal quarter of the
previous fiscal year and the corresponding portion of the previous
fiscal year, all in reasonable detail and certified by a Responsible
Officer of the Borrower as fairly presenting the financial condition,
results of operations, shareholders' equity and cash flows of the
Borrower and its Subsidiaries in accordance with GAAP, subject only to
normal year-end audit adjustments and the absence of footnotes.
As to any information contained in materials furnished pursuant to Section
6.02[(d)], the Borrower shall not be separately required to furnish such
information under clause (a) or (b) above, but the foregoing shall not be in
derogation of the obligation of the Borrower to furnish the information and
materials described in subsections (a) and (b) above at the times specified
therein.
6.02 CERTIFICATES; OTHER INFORMATION. Deliver to the Administrative
Agent and each Lender, in form and detail satisfactory to the Administrative
Agent and the Required Lenders:
(a) concurrently with the delivery of the financial
statements referred to in Section 6.01(a), a certificate of its
independent certified public accountants certifying such financial
statements and stating that in making the examination necessary therefor
no knowledge was obtained of any Default or, if any such Default shall
exist, stating the nature and status of such event;
(b) concurrently with the delivery of the financial
statements referred to in Sections 6.01(a) and (b), a duly completed
Compliance Certificate signed by a Responsible Officer of the Borrower;
48
(c) promptly after any request by the Administrative Agent
or any Lender, copies of any detailed audit reports, management letters
or recommendations submitted to the board of directors (or the audit
committee of the board of directors) of the Borrower by independent
accountants in connection with the accounts or books of the Borrower or
any Subsidiary, or any audit of any of them;
(d) promptly after the same are available, copies of each
annual report, proxy or financial statement or other report or
communication sent to the stockholders of the Borrower, and copies of
all annual, regular, periodic and special reports and registration
statements which the Borrower may file or be required to file with the
SEC under Section 13 or 15(d) of the Securities Exchange Act of 1934,
and not otherwise required to be delivered to the Administrative Agent
pursuant hereto;
(e) within 120 days of the Borrower's fiscal year end, the
Borrower's financial projections or budget by quarter for the following
fiscal year;
(f) within 120 days of the Borrower's fiscal year-end, a
copy of the Borrower's current insurance policy evidencing re-insurance
coverage of workers' compensation claims in excess of $500,000 per
occurrence from an insurance company acceptable to the Administrative
Agent, with an A.M. Best rating of not less than "A";
(g) within 90 days of the Borrower's fiscal year end, if
requested by Administrative Agent, a company-prepared workers'
compensation report stating, on a policy year or fiscal year basis,
gross wages, claims filed, claims experience and losses as a percentage
of temporary employer payroll by policy year; and
(h) promptly, such additional information regarding the
business, financial or corporate affairs of the Borrower or any
Subsidiary, or compliance with the terms of the Loan Documents, as the
Administrative Agent or any Lender may from time to time reasonably
request.
Documents required to be delivered pursuant to Section 6.01(a) or (b) or Section
6.02(d) (to the extent any such documents are included in materials otherwise
filed with the SEC) may be delivered electronically and if so delivered, shall
be deemed to have been delivered on the date (i) on which the Borrower posts
such documents, or provides a link thereto on the Borrower's website on the
Internet at the website address listed on Schedule 10.02; or (ii) on which such
documents are posted on the Borrower's behalf on IntraLinks/IntraAgency or
another relevant website, if any, to which each Lender and the Administrative
Agent have access (whether a commercial, third-party website or whether
sponsored by the Administrative Agent); provided that: (i) the Borrower shall
deliver paper copies of such documents to the Administrative Agent or any Lender
that requests the Borrower to deliver such paper copies until a written request
to cease delivering paper copies is given by the Administrative Agent or such
Lender and (ii) the Borrower shall notify (which may be by facsimile or
electronic mail) the Administrative Agent and each Lender of the posting of any
such documents and provide to the Administrative Agent by electronic mail
electronic versions (i.e., soft copies) of such documents. Notwithstanding
anything contained herein, in every instance the Borrower shall be required to
provide paper copies of the Compliance Certificates required by Section 6.02(c)
to the Administrative Agent
49
and each of the Lenders. Except for such Compliance Certificates, the
Administrative Agent shall have no obligation to request the delivery or to
maintain copies of the documents referred to above, and in any event shall have
no responsibility to monitor compliance by the Borrower with any such request
for delivery, and each Lender shall be solely responsible for requesting
delivery to it or maintaining its copies of such documents.
6.03 NOTICES. Promptly notify the Administrative Agent and each
Lender:
(a) of the occurrence of any Default;
(b) of any matter that has resulted or could reasonably be
expected to result in a Material Adverse Effect, including (i) breach or
non-performance of, or any default under, a Contractual Obligation of
the Borrower or any Subsidiary; (ii) any dispute, litigation,
investigation, proceeding or suspension between the Borrower or any
Subsidiary and any Governmental Authority; or (iii) the commencement of,
or any material development in, any litigation or proceeding affecting
the Borrower or any Subsidiary, including pursuant to any applicable
Environmental Laws;
(c) of the occurrence of any ERISA Event; and
(d) of any material change in accounting policies or
financial reporting practices by the Borrower or any Subsidiary;
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer of the Borrower setting forth details of the occurrence
referred to therein and stating what action the Borrower has taken and proposes
to take with respect thereto. Each notice pursuant to Section 6.03(a) shall
describe with particularity any and all provisions of this Agreement and any
other Loan Document that have been breached.
6.04 PAYMENT OF OBLIGATIONS. Pay and discharge as the same shall
become due and payable, all its obligations and liabilities, including (a) all
tax liabilities, assessments and governmental charges or levies upon it or its
properties or assets, unless the same are being contested in good faith by
appropriate proceedings diligently conducted and adequate reserves in accordance
with GAAP are being maintained by the Borrower or such Subsidiary; (b) all
lawful claims which, if unpaid, would by law become a Lien upon its property;
and (c) all Indebtedness, as and when due and payable, but subject to any
subordination provisions contained in any instrument or agreement evidencing
such Indebtedness.
6.05 PRESERVATION OF EXISTENCE, ETC. (a) Preserve, renew and maintain
in full force and effect its legal existence and good standing under the Laws of
the jurisdiction of its organization except in a transaction permitted by
Section 7.04 or 7.05; (b) take all reasonable action to maintain all rights,
privileges, permits, licenses and franchises necessary or desirable in the
normal conduct of its business, except to the extent that failure to do so could
not reasonably be expected to have a Material Adverse Effect; and (c) preserve
or renew all of its registered patents, trademarks, trade names and service
marks, the non-preservation of which could reasonably be expected to have a
Material Adverse Effect.
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6.06 MAINTENANCE OF PROPERTIES. (a) Maintain, preserve and protect
all of its material properties and equipment necessary in the operation of its
business in good working order and condition, ordinary wear and tear excepted;
and (b) make all necessary repairs thereto and renewals and replacements thereof
except where the failure to do so could not reasonably be expected to have a
Material Adverse Effect.
6.07 MAINTENANCE OF INSURANCE. Maintain with financially sound and
reputable insurance companies not Affiliates of the Borrower, insurance with
respect to its properties and business against loss or damage of the kinds
customarily insured against by Persons engaged in the same or similar business,
of such types and in such amounts (after giving effect to any self-insurance
compatible with the following standards) as are customarily carried under
similar circumstances by such other Persons.
6.08 COMPLIANCE WITH LAWS. Comply in all material respects with the
requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its business or property, except in such instances in
which (a) such requirement of Law or order, write, injunction or decree is being
contested in good faith by appropriate proceedings diligently conducted; or (b)
the failure to comply therewith could not reasonably be expected to have a
Material Adverse Effect.
6.09 BOOKS AND RECORDS. Maintain proper books of record and account,
in which full, true and correct entries in conformity with GAAP consistently
applied shall be made of all financial transactions and matters involving the
assets and business of the Borrower or such Subsidiary, as the case may be.
6.10 INSPECTION RIGHTS. Permit representatives and independent
contractors of the Administrative Agent and each Lender to visit and inspect any
of its properties, to examine its corporate, financial and operating records,
and make copies thereof or abstracts therefrom, and to discuss its affairs,
finances and accounts with its directors, officers, and independent public
accountants, all at the expense of the Borrower and at such reasonable times
during normal business hours and as often as may be reasonably desired, upon
reasonable advance notice to the Borrower; provided, however, that when an Event
of Default exists the Administrative Agent or any Lender (or any of their
respective representatives or independent contractors) may do any of the
foregoing at the expense of the Borrower at any time during normal business
hours and without advance notice.
6.11 USE OF PROCEEDS. Use the proceeds of the Credit Extensions for
working capital, the buy back of existing franchises, to finance Acquisitions
and for general corporate purposes not in contravention of any Law or of any
Loan Document.
6.12 ADDITIONAL GUARANTORS. Notify the Administrative Agent at the
time that any Person becomes a Domestic Subsidiary, and promptly thereafter (and
in any event within 30 days), cause such Person to (a) become a Guarantor by
executing and delivering to the Administrative Agent a counterpart of the
Guaranty or such other document as the Administrative Agent shall deem
appropriate for such purpose, and (b) deliver to the Administrative Agent
documents of the types referred to in clauses (iii) and (iv) of Section 4.01(a)
and favorable opinions of counsel to such Person (which shall cover, among other
things,
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the legality, validity, binding effect and enforceability of the documentation
referred to in clause (a), all in form, content and scope reasonably
satisfactory to the Administrative Agent.
6.13 OUT OF DEBT PERIOD. To reduce the amount of all Loans
outstanding under this Agreement to zero for a period of at least 30 consecutive
days in each line year. "Line year" means the period between the date of this
Agreement and May 31, 2003 and each subsequent one-year period thereafter. For
purposes of this Section, "Loans" does not include undrawn amounts of
outstanding Letters of Credit.
ARTICLE VII.
NEGATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or other
Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, the Borrower shall not, nor shall it permit any
Subsidiary to, directly or indirectly:
7.01 LIENS. Create, incur, assume or suffer to exist any Lien upon
any of its property, assets or revenues, whether now owned or hereafter
acquired, other than the following:
(a) Liens pursuant to any Loan Document;
(b) Liens existing on the date hereof and listed on Schedule
7.01 and any renewals or extensions thereof, provided that the property
covered thereby is not increased and any renewal or extension of the
obligations secured or benefited thereby is permitted by Section
7.03(b);
(c) Liens for taxes not yet due or which are being contested
in good faith and by appropriate proceedings diligently conducted, if
adequate reserves with respect thereto are maintained on the books of
the applicable Person in accordance with GAAP;
(d) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 30 days or
which are being contested in good faith and by appropriate proceedings
diligently conducted, if adequate reserves with respect thereto are
maintained on the books of the applicable Person;
(e) pledges or deposits in the ordinary course of business
in connection with workers' compensation, unemployment insurance and
other social security legislation, other than any Lien imposed by ERISA;
(f) deposits to secure the performance of bids, trade
contracts and leases (other than Indebtedness), statutory obligations,
surety bonds (other than bonds related to judgments or litigation),
performance bonds and other obligations of a like nature incurred in the
ordinary course of business;
(g) easements, rights-of-way, restrictions and other similar
encumbrances affecting real property which, in the aggregate, are not
substantial in amount, and which
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do not in any case materially detract from the value of the property
subject thereto or materially interfere with the ordinary conduct of the
business of the applicable Person;
(h) Liens securing judgments for the payment of money not
constituting an Event of Default under Section 8.01(h) or securing
appeal or other surety bonds related to such judgments;
(i) Liens securing Indebtedness permitted under Section
7.03(e); provided that (i) such Liens do not at any time encumber any
property other than the property financed by such Indebtedness and (ii)
the Indebtedness secured thereby does not exceed the cost or fair market
value, whichever is lower, of the property being acquired on the date of
acquisition; and
7.02 INVESTMENTS. Make any Investments, except:
(a) Investments held by the Borrower or such Subsidiary as
permitted under Schedule 7.02;
(b) advances to officers, directors and employees of the
Borrower and Subsidiaries in an aggregate amount not to exceed $250,000
at any time outstanding, for travel, entertainment, relocation and
analogous ordinary business purposes;
(c) Investments of the Borrower in any Guarantor and
Investments of any Guarantor in the Borrower or in another Guarantor;
(d) Investments consisting of extensions of credit in the
nature of accounts receivable or notes receivable arising from the grant
of trade credit in the ordinary course of business, and Investments
received in satisfaction or partial satisfaction thereof from
financially troubled account debtors to the extent reasonably necessary
in order to prevent or limit loss;
(e) Guarantees permitted by Section 7.03; and
(f) other Investments not exceeding $1,000,000 in the
aggregate in any fiscal year of the Borrower.
7.03 INDEBTEDNESS. Create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness under the Loan Documents;
(b) Indebtedness outstanding on the date hereof and listed
on Schedule 7.03 and any refinancings, refundings, renewals or
extensions thereof; provided that the amount of such Indebtedness is not
increased at the time of such refinancing, refunding, renewal or
extension except by an amount equal to a reasonable premium or other
reasonable amount paid, and fees and expenses reasonably incurred, in
connection with such refinancing and by an amount equal to any existing
commitments unutilized thereunder;
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(c) Guarantees of the Borrower or any Guarantor in respect
of Indebtedness otherwise permitted hereunder of the Borrower or any
other Guarantor;
(d) obligations (contingent or otherwise) of the Borrower or
any Subsidiary existing or arising under any Swap Contract, provided
that (i) such obligations are (or were) entered into by such Person in
the ordinary course of business for the purpose of directly mitigating
risks associated with liabilities, commitments, investments, assets, or
property held or reasonably anticipated by such Person, or changes in
the value of securities issued by such Person, and not for purposes of
speculation or taking a "market view;" and (ii) such Swap Contract does
not contain any provision exonerating the non-defaulting party from its
obligation to make payments on outstanding transactions to the
defaulting party;
(e) Indebtedness in respect of capital leases, Synthetic
Lease Obligations and purchase money obligations for fixed or capital
assets within the limitations set forth in Section 7.01(i); provided,
however, that the aggregate amount of all such Indebtedness at any one
time outstanding shall not exceed $5,000,000; and
(f) unsecured Indebtedness in an aggregate principal amount
not to exceed $1,000,000 at any time outstanding.
7.04 FUNDAMENTAL CHANGES. Merge, dissolve, liquidate, consolidate
with or into another Person, or Dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to or in favor of any Person, except that, so long
as no Default exists or would result therefrom:
(a) any Subsidiary may merge with (i) the Borrower, provided
that the Borrower shall be the continuing or surviving Person, or (ii)
any one or more other Subsidiaries, provided that when any wholly-owned
Subsidiary is merging with another Subsidiary, the wholly-owned
Subsidiary shall be the continuing or surviving Person;
(b) any Subsidiary may Dispose of all or substantially all
of its assets (upon voluntary liquidation or otherwise) to the Borrower
or to another Subsidiary; provided that if the transferor in such a
transaction is a wholly-owned Subsidiary, then the transferee must
either be the Borrower or a wholly-owned Subsidiary.
7.05 DISPOSITIONS. Make any Disposition or enter into any agreement
to make any Disposition, except:
(a) Dispositions of obsolete or worn out property, whether
now owned or hereafter acquired, in the ordinary course of business;
(b) Dispositions of inventory in the ordinary course of
business;
(c) Dispositions of equipment or real property to the extent
that (i) such property is exchanged for credit against the purchase
price of similar replacement property or (ii) the proceeds of such
Disposition are reasonably promptly applied to the purchase price of
such replacement property;
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(d) Dispositions of property by any Subsidiary to the
Borrower or to a wholly-owned Subsidiary; provided that if the
transferor of such property is a Guarantor, the transferee thereof must
either be the Borrower or a Guarantor;
(e) Dispositions permitted by Section 7.04;
(f) Dispositions by the Borrower and its Subsidiaries not
otherwise permitted under this Section 7.05; provided that (i) at the
time of such Disposition, no Default shall exist or would result from
such Disposition and (ii) the aggregate book value of all property
Disposed of in reliance on this clause (f) in any fiscal year shall not
exceed $5,000,000.
7.06 ACQUISITIONS. Make any Acquisition; provided, however, that
Borrower may make any Acceptable Acquisition.
7.07 CHANGE IN NATURE OF BUSINESS. Engage in any material line of
business substantially different from those lines of business conducted by the
Borrower and its Subsidiaries on the date hereof or any business substantially
related or incidental thereto.
7.08 TRANSACTIONS WITH AFFILIATES. Enter into any transaction of any
kind with any Affiliate of the Borrower, whether or not in the ordinary course
of business, other than on fair and reasonable terms substantially as favorable
to the Borrower or such Subsidiary as would be obtainable by the Borrower or
such Subsidiary at the time in a comparable arm's length transaction with a
Person other than an Affiliate.
7.09 BURDENSOME AGREEMENTS. Enter into any Contractual Obligation
(other than this Agreement or any other Loan Document) that (a) limits the
ability (i) of any Subsidiary to make Restricted Payments to the Borrower or any
Guarantor or to otherwise transfer property to the Borrower or any Guarantor,
(ii) of any Subsidiary to Guarantee the Indebtedness of the Borrower or (iii) of
the Borrower or any Subsidiary to create, incur, assume or suffer to exist Liens
on property of such Person; provided, however, that this clause (iii) shall not
prohibit any negative pledge incurred or provided in favor of any holder of
Indebtedness permitted under Section 7.03(e) solely to the extent any such
negative pledge relates to the property financed by or the subject of such
Indebtedness; or (b) requires the grant of a Lien to secure an obligation of
such Person if a Lien is granted to secure another obligation of such Person.
7.10 USE OF PROCEEDS. Use the proceeds of any Credit Extension,
whether directly or indirectly, and whether immediately, incidentally or
ultimately, to purchase or carry margin stock (within the meaning of Regulation
U of the FRB) or to extend credit to others for the purpose of purchasing or
carrying margin stock or to refund indebtedness originally incurred for such
purpose.
7.11 FINANCIAL COVENANTS.
(a) Current Ratio. Permit on a consolidated basis a ratio of
current assets to current liabilities plus outstanding Letters of
Credit, as of the end of each fiscal quarter, to be less than 1.50:1.0.
55
(b) Leverage Ratio. Permit at any time the Leverage Ratio to
exceed 2.0:1.0.
(c) Fixed Charge Coverage Ratio. Permit the Fixed Charge
Coverage Ratio to be less than 1.50:1.0. This ratio will be calculated
at the end of each fiscal quarter, using the results of that quarter and
each of the three immediately preceding fiscal quarters.
(d) Consolidated EBITDA. Permit Consolidated EBITDA to be
less than $7,000,000. Compliance with this covenant shall be calculated
at the end of each fiscal quarter.
ARTICLE VIII.
EVENTS OF DEFAULT AND REMEDIES
8.01 EVENTS OF DEFAULT. Any of the following shall constitute an
Event of Default:
(a) Non-Payment. The Borrower or any other Loan Party fails
to pay (i) when and as required to be paid herein, any amount of
principal of any Loan or any L/C Obligation, or (ii) within three days
after the same becomes due, any interest on any Loan or on any L/C
Obligation, or any commitment or other fee due hereunder, or (iii)
within five days after the same becomes due, any other amount payable
hereunder or under any other Loan Document; or
(b) Specific Covenants. The Borrower fails to perform or
observe any term, covenant or agreement contained in any of Section
6.01, 6.02, 6.03, 6.05, 6.10, 6.11 or 6.12 or Article VII; or
(c) Other Defaults. Any Loan Party fails to perform or
observe any other covenant or agreement (not specified in subsection (a)
or (b) above) contained in any Loan Document on its part to be performed
or observed and such failure continues for 30 days; or
(d) Representations and Warranties. Any representation,
warranty, certification or statement of fact made or deemed made by or
on behalf of the Borrower or any other Loan Party herein, in any other
Loan Document, or in any document delivered in connection herewith or
therewith shall be incorrect or misleading when made or deemed made; or
(e) Cross-Default. (i) The Borrower or any Subsidiary (A)
fails to make any payment when due (whether by scheduled maturity,
required prepayment, acceleration, demand, or otherwise) in respect of
any Indebtedness or Guarantee (other than Indebtedness hereunder and
Indebtedness under Swap Contracts) having an aggregate principal amount
(including undrawn committed or available amounts and including amounts
owing to all creditors under any combined or syndicated credit
arrangement) of more than the Threshold Amount, or (B) fails to observe
or perform any other agreement or condition relating to any such
Indebtedness or Guarantee or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event occurs, the
effect of which default or other event is to cause, or to permit the
holder or
56
holders of such Indebtedness or the beneficiary or beneficiaries of such
Guarantee (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 be demanded or to become due or to be
repurchased, prepaid, defeased or redeemed (automatically or otherwise),
or an offer to repurchase, prepay, defease or redeem such Indebtedness
to be made, prior to its stated maturity, or such Guarantee to become
payable or cash collateral in respect thereof to be demanded; or (ii)
there occurs under any Swap Contract an Early Termination Date (as
defined in such Swap Contract) resulting from (A) any event of default
under such Swap Contract as to which the Borrower or any Subsidiary is
the Defaulting Party (as defined in such Swap Contract) or (B) any
Termination Event (as so defined) under such Swap Contract as to which
the Borrower or any Subsidiary is an Affected Party (as so defined) and,
in either event, the Swap Termination Value owed by the Borrower or such
Subsidiary as a result thereof is greater than the Threshold Amount; or
(f) Insolvency Proceedings, Etc. Any Loan Party or any of
its Subsidiaries institutes or consents to the institution of any
proceeding under any Debtor Relief Law, or makes an assignment for the
benefit of creditors; or applies for or consents to the appointment of
any receiver, trustee, custodian, conservator, liquidator, rehabilitator
or similar officer for it or for all or any material part of its
property; or any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer is appointed without the application or
consent of such Person and the appointment continues undischarged or
unstayed for 60 calendar days; or any proceeding under any Debtor Relief
Law relating to any such Person or to all or any material part of its
property is instituted without the consent of such Person and continues
undismissed or unstayed for 60 calendar days, or an order for relief is
entered in any such proceeding; or
(g) Inability to Pay Debts; Attachment. (i) The Borrower or
any Subsidiary becomes unable or admits in writing its inability or
fails generally to pay its debts as they become due, or (ii) any writ or
warrant of attachment or execution or similar process is issued or
levied against all or any material part of the property of any such
Person and is not released, vacated or fully bonded within 30 days after
its issue or levy; or
(h) Judgments. There is entered against the Borrower or any
Subsidiary (i) a final judgment or order for the payment of money in an
aggregate amount exceeding the Threshold Amount (to the extent not
covered by independent third-party insurance as to which the insurer
does not dispute coverage), or (ii) any one or more non-monetary final
judgments that have, or could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect and, in
either case, (A) enforcement proceedings are commenced by any creditor
upon such judgment or order, or (B) there is a period of [10]
consecutive days during which a stay of enforcement of such judgment, by
reason of a pending appeal or otherwise, is not in effect; or
(i) ERISA. (i) An ERISA Event occurs with respect to a
Pension Plan or Multiemployer Plan which has resulted or could
reasonably be expected to result in liability of the Borrower under
Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in
an aggregate amount in excess of the Threshold Amount, or (ii) the
57
Borrower or any ERISA Affiliate fails to pay when due, after the
expiration of any applicable grace period, any installment payment with
respect to its withdrawal liability under Section 4201 of ERISA under a
Multiemployer Plan in an aggregate amount in excess of the Threshold
Amount; or
(j) Invalidity of Loan Documents. Any Loan Document, at any
time after its execution and delivery and for any reason other than as
expressly permitted hereunder or satisfaction in full of all the
Obligations, ceases to be in full force and effect; or any Loan Party or
any other Person contests in any manner the validity or enforceability
of any Loan Document; or any Loan Party denies that it has any or
further liability or obligation under any Loan Document, or purports to
revoke, terminate or rescind any Loan Document; or
(k) Change of Control. There occurs any Change of Control
with respect to the Borrower.
8.02 REMEDIES UPON EVENT OF DEFAULT. If any Event of Default occurs
and is continuing, the Administrative Agent shall, at the request of, or may,
with the consent of, the Required Lenders, take any or all of the following
actions:
(a) declare the commitment of each Lender to make Loans and
any obligation of the L/C Issuer to make L/C Credit Extensions to be
terminated, whereupon such commitments and obligation shall be
terminated;
(b) declare the unpaid principal amount of all outstanding
Loans, all interest accrued and unpaid thereon, and all other amounts
owing or payable hereunder or under any other Loan Document to be
immediately due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby expressly waived by
the Borrower;
(c) require that the Borrower Cash Collateralize the L/C
Obligations (in an amount equal to the then Outstanding Amount thereof);
and
(d) exercise on behalf of itself and the Lenders all rights
and remedies available to it and the Lenders under the Loan Documents or
applicable law;
provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to the Borrower under the Bankruptcy Code of the
United States, the obligation of each Lender to make Loans and any obligation of
the L/C Issuer to make L/C Credit Extensions shall automatically terminate, the
unpaid principal amount of all outstanding Loans and all
58
interest and other amounts as aforesaid shall automatically become due and
payable, and the obligation of the Borrower to Cash Collateralize the L/C
Obligations as aforesaid shall automatically become effective, in each case
without further act of the Administrative Agent or any Lender.
8.03 APPLICATION OF FUNDS. After the exercise of remedies provided
for in Section 8.02 (or after the Loans have automatically become immediately
due and payable and the L/C Obligations have automatically been required to be
Cash Collateralized as set forth in the proviso to Section 8.02), any amounts
received on account of the Obligations shall be applied by the Administrative
Agent in the following order:
First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including Attorney Costs and amounts
payable under Article III) payable to the Administrative Agent in its capacity
as such;
Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal and interest) payable to the
Lenders (including Attorney Costs and amounts payable under Article III),
ratably among them in proportion to the amounts described in this clause Second
payable to them;
Third, to payment of that portion of the Obligations constituting
accrued and unpaid interest on the Loans and L/C Borrowings, ratably among the
Lenders in proportion to the respective amounts described in this clause Third
payable to them;
Fourth, to payment of that portion of the Obligations constituting
unpaid principal of the Loans and L/C Borrowings, ratably among the Lenders in
proportion to the respective amounts described in this clause Fourth held by
them;
Fifth, to the Administrative Agent for the account of the L/C Issuer, to
Cash Collateralize that portion of L/C Obligations comprised of the aggregate
undrawn amount of Letters of Credit; and
Last, the balance, if any, after all of the Obligations have been
indefeasibly paid in full, to the Borrower or as otherwise required by Law.
Subject to Section 2.03(c), amounts used to Cash Collateralize the
aggregate undrawn amount of Letters of Credit pursuant to clause Fifth above
shall be applied to satisfy drawings under such Letters of Credit as they occur.
If any amount remains on deposit as Cash Collateral after all Letters of Credit
have either been fully drawn or expired, such remaining amount shall be applied
to the other Obligations, if any, in the order set forth above.
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ARTICLE IX.
ADMINISTRATIVE AGENT
9.01 APPOINTMENT AND AUTHORIZATION OF ADMINISTRATIVE AGENT.
(a) Each Lender hereby irrevocably appoints, designates and
authorizes the Administrative Agent to take such action on its behalf
under the provisions of this Agreement and each other Loan Document and
to exercise such powers and perform such duties as are expressly
delegated to it by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary contained
elsewhere herein or in any other Loan Document, the Administrative Agent
shall not have any duties or responsibilities, except those expressly
set forth herein, nor shall the Administrative Agent have or be deemed
to have any fiduciary relationship with any Lender or participant, and
no implied covenants, functions, responsibilities, duties, obligations
or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against the Administrative Agent. Without
limiting the generality of the foregoing sentence, the use of the term
"agent" herein and in the other Loan Documents with reference to the
Administrative Agent is not intended to connote any fiduciary or other
implied (or express) obligations arising under agency doctrine of any
applicable Law. Instead, such term is used merely as a matter of market
custom, and is intended to create or reflect only an administrative
relationship between independent contracting parties.
(b) The L/C Issuer shall act on behalf of the Lenders with
respect to any Letters of Credit issued by it and the documents
associated therewith, and the L/C Issuer shall have all of the benefits
and immunities (i) provided to the Administrative Agent in this Article
IX with respect to any acts taken or omissions suffered by the L/C
Issuer in connection with Letters of Credit issued by it or proposed to
be issued by it and the applications and agreements for letters of
credit pertaining to such Letters of Credit as fully as if the term
"Administrative Agent" as used in this Article IX and in the definition
of "Agent-Related Person" included the L/C Issuer with respect to such
acts or omissions, and (ii) as additionally provided herein with respect
to the L/C Issuer.
9.02 DELEGATION OF DUTIES. The Administrative Agent may execute any
of its duties under this Agreement or any other Loan Document by or through
agents, employees or attorneys-in-fact and shall be entitled to advice of
counsel and other consultants or experts concerning all matters pertaining to
such duties. The Administrative Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects in the
absence of gross negligence or willful misconduct.
9.03 LIABILITY OF ADMINISTRATIVE AGENT. No Agent-Related Person shall
(a) be liable for any action taken or omitted to be taken by any of them under
or in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except for its own gross negligence or willful
misconduct in connection with its duties expressly set forth herein), or (b) be
responsible in any manner to any Lender or participant for any recital,
statement, representation or warranty made by any Loan Party or any officer
thereof, contained
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herein or in any other Loan Document, or in any certificate, report, statement
or other document referred to or provided for in, or received by the
Administrative Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or for any failure of
any Loan Party or any other party to any Loan Document to perform its
obligations hereunder or thereunder. No Agent-Related Person shall be under any
obligation to any Lender or participant to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the properties,
books or records of any Loan Party or any Affiliate thereof.
9.04 RELIANCE BY ADMINISTRATIVE AGENT.
(a) The Administrative Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing, communication,
signature, resolution, representation, notice, consent, certificate,
affidavit, letter, telegram, facsimile, telex or telephone message,
electronic mail message, statement or other document or conversation
believed by it to be genuine and correct and to have been signed, sent
or made by the proper Person or Persons, and upon advice and statements
of legal counsel (including counsel to any Loan Party), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent shall be fully justified in failing or refusing to
take any action under any Loan Document unless it shall first receive
such advice or concurrence of the Required Lenders as it deems
appropriate and, if it so requests, 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 Administrative Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement
or any other Loan Document in accordance with a request or consent of
the Required Lenders (or such greater number of Lenders as may be
expressly required hereby in any instance) and such request and any
action taken or failure to act pursuant thereto shall be binding upon
all the Lenders.
(b) For purposes of determining compliance with the
conditions specified in Section 4.01, each Lender that has signed this
Agreement shall be deemed to have consented to, approved or accepted or
to be satisfied with, each document or other matter required thereunder
to be consented to or approved by or acceptable or satisfactory to a
Lender unless the Administrative Agent shall have received notice from
such Lender prior to the proposed Closing Date specifying its objection
thereto.
9.05 NOTICE OF DEFAULT. The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default, except with
respect to defaults in the payment of principal, interest and fees required to
be paid to the Administrative Agent for the account of the Lenders, unless the
Administrative Agent shall have received written notice from a Lender or the
Borrower referring to this Agreement, describing such Default and stating that
such notice is a "notice of default." The Administrative Agent will notify the
Lenders of its receipt of any such notice. The Administrative Agent shall take
such action with respect to such Default as may be directed by the Required
Lenders in accordance with Article VIII; provided, however, that unless and
until the Administrative Agent has received any such direction, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking
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such action, with respect to such Default as it shall deem advisable or in the
best interest of the Lenders.
9.06 CREDIT DECISION; DISCLOSURE OF INFORMATION BY ADMINISTRATIVE
AGENT. Each Lender acknowledges that no Agent-Related Person has made any
representation or warranty to it, and that no act by the Administrative Agent
hereafter taken, including any consent to and acceptance of any assignment or
review of the affairs of any Loan Party or any Affiliate thereof, shall be
deemed to constitute any representation or warranty by any Agent-Related Person
to any Lender as to any matter, including whether Agent-Related Persons have
disclosed material information in their possession. Each Lender represents to
the Administrative Agent that it has, independently and without reliance upon
any Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Loan Parties and their respective Subsidiaries, and all
applicable bank or other regulatory Laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement and
to extend credit to the Borrower and the other Loan Parties hereunder. Each
Lender also represents that it will, independently and without reliance upon any
Agent-Related Person 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
the other Loan Documents, and to make such investigations as it deems necessary
to inform itself as to the business, prospects, operations, property, financial
and other condition and creditworthiness of the Borrower and the other Loan
Parties. Except for notices, reports and other documents expressly required to
be furnished to the Lenders by the Administrative Agent herein, the
Administrative Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, prospects,
operations, property, financial and other condition or creditworthiness of any
of the Loan Parties or any of their respective Affiliates which may come into
the possession of any Agent-Related Person.
9.07 INDEMNIFICATION OF ADMINISTRATIVE AGENT. Whether or not the
transactions contemplated hereby are consummated, the Lenders shall indemnify
upon demand each Agent-Related Person (to the extent not reimbursed by or on
behalf of any Loan Party and without limiting the obligation of any Loan Party
to do so), pro rata, and hold harmless each Agent-Related Person from and
against any and all Indemnified Liabilities incurred by it; provided, however,
that no Lender shall be liable for the payment to any Agent-Related Person of
any portion of such Indemnified Liabilities to the extent determined in a final,
nonappealable judgment by a court of competent jurisdiction to have resulted
from such Agent-Related Person's own gross negligence or willful misconduct;
provided, however, that no action taken in accordance with the directions of the
Required Lenders shall be deemed to constitute gross negligence or willful
misconduct for purposes of this Section. Without limitation of the foregoing,
each Lender shall reimburse the Administrative Agent upon demand for its ratable
share of any costs or out-of-pocket expenses (including Attorney Costs) incurred
by the Administrative Agent in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement, any other Loan
Document, or any document contemplated by or referred to herein, to the extent
that the Administrative Agent is not reimbursed for such expenses by or on
behalf of the Borrower.
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The undertaking in this Section shall survive termination of the Aggregate
Commitments, the payment of all other Obligations and the resignation of the
Administrative Agent.
9.08 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. Bank of America
and its Affiliates may make loans to, issue letters of credit for the account
of, accept deposits from, acquire equity interests in and generally engage in
any kind of banking, trust, financial advisory, underwriting or other business
with each of the Loan Parties and their respective Affiliates as though Bank of
America were not the Administrative Agent or the L/C Issuer hereunder and
without notice to or consent of the Lenders. The Lenders acknowledge that,
pursuant to such activities, Bank of America or its Affiliates may receive
information regarding any Loan Party or its Affiliates (including information
that may be subject to confidentiality obligations in favor of such Loan Party
or such Affiliate) and acknowledge that the Administrative Agent shall be under
no obligation to provide such information to them. With respect to its Loans,
Bank of America shall have the same rights and powers under this Agreement as
any other Lender and may exercise such rights and powers as though it were not
the Administrative Agent or the L/C Issuer, and the terms "Lender" and "Lenders"
include Bank of America in its individual capacity.
9.09 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may
resign as Administrative Agent upon 30 days' notice to the Lenders; provided
that any such resignation by Bank of America shall also constitute its
resignation as L/C Issuer and Swing Line Lender. If the Administrative Agent
resigns under this Agreement, the Required Lenders shall appoint from among the
Lenders a successor administrative agent for the Lenders, which successor
administrative agent shall be consented to by the Borrower at all times other
than during the existence of an Event of Default (which consent of the Borrower
shall not be unreasonably withheld or delayed). If no successor administrative
agent is appointed prior to the effective date of the resignation of the
Administrative Agent, the Administrative Agent may appoint, after consulting
with the Lenders and the Borrower, a successor administrative agent from among
the Lenders. Upon the acceptance of its appointment as successor administrative
agent hereunder, the Person acting as such successor administrative agent shall
succeed to all the rights, powers and duties of the retiring Administrative
Agent, L/C Issuer and Swing Line Lender and the respective terms "Administrative
Agent," "L/C Issuer" and "Swing Line Lender" shall mean such successor
administrative agent, Letter of Credit issuer and swing line lender, the
retiring Administrative Agent's appointment, powers and duties as Administrative
Agent shall be terminated and the retiring L/C Issuer's and Swing Line Lender's
rights, powers and duties as such shall be terminated, without any other or
further act or deed on the part of such retiring L/C Issuer or Swing Line Lender
or any other Lender, other than the obligation of the successor L/C Issuer to
issue letters of credit in substitution for the Letters of Credit, if any,
outstanding at the time of such succession or to make other arrangements
satisfactory to the retiring L/C Issuer to effectively assume the obligations of
the retiring L/C Issuer with respect to such Letters of Credit. After any
retiring Administrative Agent's resignation hereunder as Administrative Agent,
the provisions of this Article IX and Sections 10.04 and 10.05 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement. If no successor administrative agent
has accepted appointment as Administrative Agent by the date which is 30 days
following a retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become effective
and the Lenders shall perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Required Lenders appoint a successor
agent as provided for above.
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9.10 ADMINISTRATIVE AGENT MAY FILE PROOFS OF CLAIM. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to any Loan Party, the Administrative Agent (irrespective of
whether the principal of any Loan or L/C Obligation shall then be due and
payable as herein expressed or by declaration or otherwise and irrespective of
whether the Administrative Agent shall have made any demand on the Borrower)
shall be entitled and empowered, by intervention in such proceeding or
otherwise:
(a) to file and prove a claim for the whole amount of the
principal and interest owing and unpaid in respect of the Loans, L/C
Obligations and all other Obligations that are owing and unpaid and to
file such other documents as may be necessary or advisable in order to
have the claims of the Lenders and the Administrative Agent (including
any claim for the reasonable compensation, expenses, disbursements and
advances of the Lenders and the Administrative Agent and their
respective agents and counsel and all other amounts due the Lenders and
the Administrative Agent under Sections 2.03(i) and (j), 2.09 and 10.04)
allowed in such judicial proceeding; and
(b) to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 2.09 and 10.04.
Nothing contained herein shall be deemed to authorize the Administrative Agent
to authorize or consent to or accept or adopt on behalf of any Lender any plan
of reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lender or to authorize the Administrative Agent
to vote in respect of the claim of any Lender in any such proceeding.
9.11 GUARANTY MATTERS. The Lenders irrevocably authorize the
Administrative Agent, at its option and in its discretion, to release any
Guarantor from its obligations under the Guaranty if such Person ceases to be a
Subsidiary as a result of a transaction permitted hereunder.
Upon request by the Administrative Agent at any time, the Required
Lenders will confirm in writing the Administrative Agent's authority to release
any Guarantor from its obligations under the Guaranty pursuant to this Section
9.11.
9.12 OTHER AGENTS; ARRANGERS AND MANAGERS. None of the Lenders or
other Persons identified on the facing page or signature pages of this Agreement
as a "syndication agent," "documentation agent," "co-agent," "book manager,"
"lead manager," "arranger," "lead arranger" or "co-arranger" shall have any
right, power, obligation, liability, responsibility or duty under this Agreement
other than, in the case of such Lenders, those applicable to all Lenders as
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such. Without limiting the foregoing, none of the Lenders or other Persons so
identified shall have or be deemed to have any fiduciary relationship with any
Lender. Each Lender acknowledges that it has not relied, and will not rely, on
any of the Lenders or other Persons so identified in deciding to enter into this
Agreement or in taking or not taking action hereunder.
ARTICLE X.
MISCELLANEOUS
10.1 AMENDMENTS, ETC. No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent to any departure by the
Borrower or any other Loan Party therefrom, shall be effective unless in writing
signed by the Required Lenders and the Borrower or the applicable Loan Party, as
the case may be, and acknowledged by the Administrative Agent, and each such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no such amendment,
waiver or consent shall:
(a) waive any condition set forth in Section 4.01(a) without
the written consent of each Lender;
(b) extend or increase the Commitment of any Lender (or
reinstate any Commitment terminated pursuant to Section 8.02) without
the written consent of such Lender;
(c) postpone any date fixed by this Agreement or any other
Loan Document for any payment of principal, interest, fees or other
amounts due to the Lenders (or any of them) hereunder or under any other
Loan Document without the written consent of each Lender directly
affected thereby;
(d) reduce the principal of, or the rate of interest
specified herein on, any Loan or L/C Borrowing, or (subject to clause
(iv) of the second proviso to this Section 10.01) any fees or other
amounts payable hereunder or under any other Loan Document, or change
the manner of computation of any financial ratio (including any change
in any applicable defined term) used in determining the Applicable Rate
that would result in a reduction of any interest rate on any Loan or any
fee payable hereunder without the written consent of each Lender
directly affected thereby; provided, however, that only the consent of
the Required Lenders shall be necessary (i) to amend the definition of
"Default Rate" or to waive any obligation of the Borrower to pay
interest at the Default Rate or (ii) to amend any financial covenant
hereunder (or any defined term used therein) even if the effect of such
amendment would be to reduce the rate of interest on any Loan or L/C
Borrowing or to reduce any fee payable hereunder;
(e) change Section 2.13 or Section 8.03 in a manner that
would alter the pro rata sharing of payments required thereby without
the written consent of each Lender;
(f) change any provision of this Section or the definition
of "Required Lenders" or any other provision hereof specifying the
number or percentage of Lenders required to amend, waive or otherwise
modify any rights hereunder or make any
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determination or grant any consent hereunder, without the written
consent of each Lender.
and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the L/C Issuer in addition to the Lenders required above,
affect the rights or duties of the L/C Issuer under this Agreement or any Letter
of Credit Application relating to any Letter of Credit issued or to be issued by
it; (ii) no amendment, waiver or consent shall, unless in writing and signed by
the Swing Line Lender in addition to the Lenders required above, affect the
rights or duties of the Swing Line Lender under this Agreement; (iii) no
amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent in addition to the Lenders required above, affect the
rights or duties of the Administrative Agent under this Agreement or any other
Loan Document; and (iv) the Fee Letter may be amended, or rights or privileges
thereunder waived, in a writing executed only by the parties thereto.
Notwithstanding anything to the contrary herein, no Defaulting Lender shall have
any right to approve or disapprove any amendment, waiver or consent hereunder,
except that the Commitment of such Lender may not be increased or extended
without the consent of such Lender.
10.02 NOTICES AND OTHER COMMUNICATIONS; FACSIMILE COPIES.
(a) General. Unless otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in
writing (including by facsimile transmission). All such written notices
shall be mailed, faxed or delivered to the applicable address, facsimile
number or (subject to subsection (c) below) electronic mail address, and
all notices and other communications expressly permitted hereunder to be
given by telephone shall be made to the applicable telephone number, as
follows:
(i) if to the Borrower, the Administrative Agent,
the L/C Issuer or the Swing Line Lender, to the address,
facsimile number, electronic mail address or telephone number
specified for such Person on Schedule 10.02 or to such other
address, facsimile number, electronic mail address or telephone
number as shall be designated by such party in a notice to the
other parties; and
(ii) if to any other Lender, to the address,
facsimile number, electronic mail address or telephone number
specified in its Administrative Questionnaire or to such other
address, facsimile number, electronic mail address or telephone
number as shall be designated by such party in a notice to the
Borrower, the Administrative Agent, the L/C Issuer and the Swing
Line Lender.
All such notices and other communications shall be deemed to be given or made
upon the earlier to occur of (i) actual receipt by the relevant party hereto and
(ii) (A) if delivered by hand or by courier, when signed for by or on behalf of
the relevant party hereto; (B) if delivered by mail, four Business Days after
deposit in the mails, postage prepaid; (C) if delivered by facsimile, when sent
and receipt has been confirmed by telephone; and (D) if delivered by electronic
mail (which form of delivery is subject to the provisions of subsection (c)
below), when delivered; provided, however, that notices and other communications
to the Administrative Agent, the L/C Issuer and the Swing Line Lender pursuant
to Article II shall not be effective until actually
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received by such Person. In no event shall a voicemail message be effective as a
notice, communication or confirmation hereunder.
(b) Effectiveness of Facsimile Documents and Signatures.
Loan Documents may be transmitted and/or signed by facsimile. The
effectiveness of any such documents and signatures shall, subject to
applicable Law, have the same force and effect as manually-signed
originals and shall be binding on all Loan Parties, the Administrative
Agent and the Lenders. The Administrative Agent may also require that
any such documents and signatures be confirmed by a manually-signed
original thereof; provided, however, that the failure to request or
deliver the same shall not limit the effectiveness of any facsimile
document or signature.
(c) Limited Use of Electronic Mail. Electronic mail and
Internet and intranet websites may be used only to distribute routine
communications, such as financial statements and other information as
provided in Section 6.02, and to distribute Loan Documents for execution
by the parties thereto, and may not be used for any other purpose.
(d) Reliance by Administrative Agent and Lenders. The
Administrative Agent and the Lenders shall be entitled to rely and act
upon any notices (including telephonic Committed Loan Notices and Swing
Line Loan Notices) purportedly given by or on behalf of the Borrower
even if (i) such notices were not made in a manner specified herein,
were incomplete or were not preceded or followed by any other form of
notice specified herein, or (ii) the terms thereof, as understood by the
recipient, varied from any confirmation thereof. The Borrower shall
indemnify each Agent-Related Person and each Lender from all losses,
costs, expenses and liabilities resulting from the reliance by such
Person on each notice purportedly given by or on behalf of the Borrower.
All telephonic notices to and other communications with the
Administrative Agent may be recorded by the Administrative Agent, and
each of the parties hereto hereby consents to such recording.
10.03 NO WAIVER; CUMULATIVE REMEDIES. No failure by any Lender or the
Administrative Agent to exercise, and no delay by any such Person in exercising,
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.
10.04 ATTORNEY COSTS, EXPENSES AND TAXES. The Borrower agrees (a) to
pay or reimburse the Administrative Agent for all costs and expenses incurred in
connection with the development, preparation, negotiation and execution of this
Agreement and the other Loan Documents and any amendment, waiver, consent or
other modification of the provisions hereof and thereof (whether or not the
transactions contemplated hereby or thereby are consummated), and the
consummation and administration of the transactions contemplated hereby and
thereby, including all Attorney Costs, and (b) to pay or reimburse the
Administrative Agent and each Lender for all costs and expenses incurred in
connection with the enforcement, attempted
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enforcement, or preservation of any rights or remedies under this Agreement or
the other Loan Documents (including all such costs and expenses incurred during
any "workout" or restructuring in respect of the Obligations and during any
legal proceeding, including any proceeding under any Debtor Relief Law),
including all Attorney Costs. The foregoing costs and expenses shall include all
search, filing, recording, title insurance and appraisal charges and fees and
taxes related thereto, and other out-of-pocket expenses incurred by the
Administrative Agent and the cost of independent public accountants and other
outside experts retained by the Administrative Agent or any Lender. All amounts
due under this Section 10.04 shall be payable within ten Business Days after
demand therefor. The agreements in this Section shall survive the termination of
the Aggregate Commitments and repayment of all other Obligations.
10.05 INDEMNIFICATION BY THE BORROWER. Whether or not the transactions
contemplated hereby are consummated, the Borrower shall indemnify and hold
harmless each Agent-Related Person, each Lender and their respective Affiliates,
directors, officers, employees, counsel, agents and attorneys-in-fact
(collectively the "Indemnitees") from and against any and all liabilities,
obligations, losses, damages, penalties, claims, demands, actions, judgments,
suits, costs, expenses and disbursements (including Attorney Costs) of any kind
or nature whatsoever which may at any time be imposed on, incurred by or
asserted against any such Indemnitee in any way relating to or arising out of or
in connection with (a) the execution, delivery, enforcement, performance or
administration of any Loan Document or any other agreement, letter or instrument
delivered in connection with the transactions contemplated thereby or the
consummation of the transactions contemplated thereby, (b) any Commitment, Loan
or Letter of Credit or the use or proposed use of the proceeds therefrom
(including any refusal by the L/C Issuer to honor a demand for payment under a
Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms of such Letter of Credit), any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory (including
any investigation of, preparation for, or defense of any pending or threatened
claim, investigation, litigation or proceeding) and regardless of whether any
Indemnitee is a party thereto (all the foregoing, collectively, the "Indemnified
Liabilities"); provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such liabilities, obligations, losses, damages,
penalties, claims, demands, actions, judgments, suits, costs, expenses or
disbursements are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Indemnitee. No Indemnitee shall be liable for any damages
arising from the use by others of any information or other materials obtained
through IntraLinks or other similar information transmission systems in
connection with this Agreement, nor shall any Indemnitee have any liability for
any indirect or consequential damages relating to this Agreement or any other
Loan Document or arising out of its activities in connection herewith or
therewith (whether before or after the Closing Date). All amounts due under this
Section 10.05 shall be payable within ten Business Days after demand therefor.
The agreements in this Section shall survive the resignation of the
Administrative Agent, the replacement of any Lender, the termination of the
Aggregate Commitments and the repayment, satisfaction or discharge of all the
other Obligations.
10.06 PAYMENTS SET ASIDE. To the extent that any payment by or on
behalf of the Borrower is made to the Administrative Agent or any Lender, or the
Administrative Agent or any Lender exercises its right of set-off, and such
payment or the proceeds of such set-off or any part
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thereof is subsequently invalidated, declared to be fraudulent or preferential,
set aside or required (including pursuant to any settlement entered into by the
Administrative Agent or such Lender in its discretion) to be repaid to a
trustee, receiver or any other party, in connection with any proceeding under
any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the
obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or
such set-off had not occurred, and (b) each Lender severally agrees to pay to
the Administrative Agent upon demand its applicable share of any amount so
recovered from or repaid by the Administrative Agent, plus interest thereon from
the date of such demand to the date such payment is made at a rate per annum
equal to the Federal Funds Rate from time to time in effect.
10.07 SUCCESSORS AND ASSIGNS.
(a) The provisions of this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that the Borrower may
not assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender and no Lender
may assign or otherwise transfer any of its rights or obligations
hereunder except (i) to an Eligible Assignee in accordance with the
provisions of subsection (b) of this Section, (ii) by way of
participation in accordance with the provisions of subsection (d) of
this Section, or (iii) by way of pledge or assignment of a security
interest subject to the restrictions of subsection (f) of this Section
(and any other attempted assignment or transfer by any party hereto
shall be null and void). Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the
parties hereto, their respective successors and assigns permitted
hereby, Participants to the extent provided in subsection (d) of this
Section and, to the extent expressly contemplated hereby, the
Indemnitees) any legal or equitable right, remedy or claim under or by
reason of this Agreement.
(b) Any Lender may at any time assign to one or more
Eligible Assignees all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Commitment and the
Loans (including for purposes of this subsection (b), participations in
L/C Obligations and in Swing Line Loans) at the time owing to it);
provided that (i) except in the case of an assignment of the entire
remaining amount of the assigning Lender's Commitment and the Loans at
the time owing to it or in the case of an assignment to a Lender or an
Affiliate of a Lender or an Approved Fund (as defined in subsection (g)
of this Section) with respect to a Lender, the aggregate amount of the
Commitment (which for this purpose includes Loans outstanding
thereunder) subject to each such assignment, determined as of the date
the Assignment and Assumption with respect to such assignment is
delivered to the Administrative Agent or, if "Trade Date" is specified
in the Assignment and Assumption, as of the Trade Date, shall not be
less than $5,000,000 unless each of the Administrative Agent and, so
long as no Event of Default has occurred and is continuing, the Borrower
otherwise consents (each such consent not to be unreasonably withheld or
delayed); (ii) each partial assignment shall be made as an assignment of
a proportionate part of all the assigning Lender's rights and
obligations under this Agreement with respect to the Loans or the
Commitment assigned, except that this clause (ii) shall not apply to
rights in respect of Swing Line Loans; (iii) any
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assignment of a Commitment must be approved by the Administrative Agent,
the L/C Issuer and the Swing Line Lender unless the Person that is the
proposed assignee is itself a Lender (whether or not the proposed
assignee would otherwise qualify as an Eligible Assignee); and (iv) the
parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a
processing and recordation fee of $3,500. Subject to acceptance and
recording thereof by the Administrative Agent pursuant to subsection (c)
of this Section, from and after the effective date specified in each
Assignment and Assumption, the Eligible Assignee thereunder shall be a
party to this Agreement and, to the extent of the interest assigned by
such Assignment and Assumption, have the rights and obligations of a
Lender under this Agreement, and the assigning Lender thereunder shall,
to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and,
in the case of an Assignment and Assumption covering all of the
assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be
entitled to the benefits of Sections 3.01, 3.04, 3.05, 10.04 and 10.05
with respect to facts and circumstances occurring prior to the effective
date of such assignment). Upon request, the Borrower (at its expense)
shall execute and deliver a Note to the assignee Lender. Any assignment
or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this subsection shall be treated for purposes
of this Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with subsection (d) of this
Section.
(c) The Administrative Agent, acting solely for this purpose
as an agent of the Borrower, shall maintain at the Administrative
Agent's Office a copy of each Assignment and Assumption delivered to it
and a register for the recordation of the names and addresses of the
Lenders, and the Commitments of, and principal amounts of the Loans and
L/C Obligations owing to, each Lender pursuant to the terms hereof from
time to time (the "Register"). The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent and the Lenders
may treat each Person whose name is recorded in the Register pursuant to
the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower and any Lender, at any
reasonable time and from time to time upon reasonable prior notice.
(d) Any Lender may at any time, without the consent of, or
notice to, the Borrower or the Administrative Agent, sell participations
to any Person (other than a natural person or the Borrower or any of the
Borrower's Affiliates or Subsidiaries) (each, a "Participant") in all or
a portion of such Lender's rights and/or obligations under this
Agreement (including all or a portion of its Commitment and/or the Loans
(including such Lender's participations in L/C Obligations and/or Swing
Line Loans) owing to it); provided that (i) such Lender's obligations
under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Borrower, the
Administrative Agent and the other Lenders shall continue to deal solely
and directly with such Lender in connection with such Lender's rights
and obligations under this Agreement. Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that
such
70
Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement; provided that such agreement or instrument may provide that
such Lender will not, without the consent of the Participant, agree to
any amendment, waiver or other modification described in the first
proviso to Section 10.01 that directly affects such Participant. Subject
to subsection (e) of this Section, the Borrower agrees that each
Participant shall be entitled to the benefits of Sections 3.01, 3.04 and
3.05 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to subsection (b) of this Section. To
the extent permitted by law, each Participant also shall be entitled to
the benefits of Section 10.09 as though it were a Lender, provided such
Participant agrees to be subject to Section 2.13 as though it were a
Lender.
(e) A Participant shall not be entitled to receive any
greater payment under Section 3.01 or 3.04 than the applicable Lender
would have been entitled to receive with respect to the participation
sold to such Participant, unless the sale of the participation to such
Participant is made with the Borrower's prior written consent. A
Participant that would be a Foreign Lender if it were a Lender shall not
be entitled to the benefits of Section 3.01 unless the Borrower is
notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with
Section 10.15 as though it were a Lender.
(f) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement
(including under its Note, if any) to secure obligations of such Lender,
including any pledge or assignment to secure obligations to a Federal
Reserve Bank; provided that no such pledge or assignment shall release
such Lender from any of its obligations hereunder or substitute any such
pledgee or assignee for such Lender as a party hereto.
(g) As used herein, the following terms have the following
meanings:
"Eligible Assignee" means (a) a Lender; (b) an Affiliate of a
Lender; (c) an Approved Fund; and (d) any other Person (other
than a natural person) approved by (i) the Administrative Agent,
the L/C Issuer and the Swing Line Lender, and (ii) unless an
Event of Default has occurred and is continuing, the Borrower
(each such approval not to be unreasonably withheld or delayed);
provided that notwithstanding the foregoing, "Eligible Assignee"
shall not include the Borrower or any of the Borrower's
Affiliates or Subsidiaries.
"Fund" means any Person (other than a natural person) that is
(or will be) engaged in making, purchasing, holding or otherwise
investing in commercial loans and similar extensions of credit
in the ordinary course of its business.
"Approved Fund" means any Fund that is administered or managed
by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity
or an Affiliate of an entity that administers or manages a
Lender.
71
(h) Notwithstanding anything to the contrary contained
herein, if at any time Bank of America assigns all of its Commitment and
Loans pursuant to subsection (b) above, Bank of America may, (i) upon 30
days' notice to the Borrower and the Lenders, resign as L/C Issuer
and/or (ii) upon 30 days' notice to the Borrower, resign as Swing Line
Lender. In the event of any such resignation as L/C Issuer or Swing Line
Lender, the Borrower shall be entitled to appoint from among the Lenders
a successor L/C Issuer or Swing Line Lender hereunder; provided,
however, that no failure by the Borrower to appoint any such successor
shall affect the resignation of Bank of America as L/C Issuer or Swing
Line Lender, as the case may be. If Bank of America resigns as L/C
Issuer, it shall retain all the rights and obligations of the L/C Issuer
hereunder with respect to all Letters of Credit outstanding as of the
effective date of its resignation as L/C Issuer and all L/C Obligations
with respect thereto (including the right to require the Lenders to make
Base Rate Committed Loans or fund risk participations in Unreimbursed
Amounts pursuant to Section 2.03(c)). If Bank of America resigns as
Swing Line Lender, it shall retain all the rights of the Swing Line
Lender provided for hereunder with respect to Swing Line Loans made by
it and outstanding as of the effective date of such resignation,
including the right to require the Lenders to make Base Rate Committed
Loans or fund risk participations in outstanding Swing Line Loans
pursuant to Section 2.04(c).
10.08 CONFIDENTIALITY. Each of the Administrative Agent and the
Lenders agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its and its Affiliates'
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential); (b) to the extent requested
by any regulatory authority; (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process; (d) to any other party
to this Agreement; (e) in connection with the exercise of any remedies hereunder
or any suit, action or proceeding relating to this Agreement or the enforcement
of rights hereunder; (f) subject to an agreement containing provisions
substantially the same as those of this Section, to (i) any Eligible Assignee of
or Participant in, or any prospective Eligible Assignee of or Participant in,
any of its rights or obligations under this Agreement or (ii) any direct or
indirect contractual counterparty or prospective counterparty (or such
contractual counterparty's or prospective counterparty's professional advisor)
to any credit derivative transaction relating to obligations of the Loan
Parties; (g) with the consent of the Borrower; (h) to the extent such
Information (i) becomes publicly available other than as a result of a breach of
this Section or (ii) becomes available to the Administrative Agent or any Lender
on a nonconfidential basis from a source other than the Borrower; or (i) to the
National Association of Insurance Commissioners or any other similar
organization. In addition, the Administrative Agent and the Lenders may disclose
the existence of this Agreement and information about this Agreement to market
data collectors, similar service providers to the lending industry, and service
providers to the Administrative Agent and the Lenders in connection with the
administration and management of this Agreement, the other Loan Documents, the
Commitments, and the Credit Extensions. For the purposes of this Section,
"Information" means all information received from any Loan Party relating to any
Loan Party or its business, other than any such information that is available to
the Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by any Loan Party; provided that, in the case of information received
from a Loan Party after the date hereof, such information is clearly
72
identified in writing at the time of delivery as confidential. Any Person
required to maintain the confidentiality of Information as provided in this
Section shall be considered to have complied with its obligation to do so if
such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.
10.09 SET-OFF. In addition to any rights and remedies of the Lenders
provided by law, upon the occurrence and during the continuance of any Event of
Default, each Lender is authorized at any time and from time to time, without
prior notice to the Borrower or any other Loan Party, any such notice being
waived by the Borrower (on its own behalf and on behalf of each Loan Party) to
the fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held by,
and other indebtedness at any time owing by, such Lender to or for the credit or
the account of the respective Loan Parties against any and all Obligations owing
to such Lender hereunder or under any other Loan Document, now or hereafter
existing, irrespective of whether or not the Administrative Agent or such Lender
shall have made demand under this Agreement or any other Loan Document and
although such Obligations may be contingent or unmatured or denominated in a
currency different from that of the applicable deposit or indebtedness. Each
Lender agrees promptly to notify the Borrower and the Administrative 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.
10.10 INTEREST RATE LIMITATION. Notwithstanding anything to the
contrary contained in any Loan Document, the interest paid or agreed to be paid
under the Loan Documents shall not exceed the maximum rate of non-usurious
interest permitted by applicable Law (the "Maximum Rate"). If the Administrative
Agent or any Lender shall receive interest in an amount that exceeds the Maximum
Rate, the excess interest shall be applied to the principal of the Loans or, if
it exceeds such unpaid principal, refunded to the Borrower. In determining
whether the interest contracted for, charged, or received by the Administrative
Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent
permitted by applicable Law, (a) characterize any payment that is not principal
as an expense, fee, or premium rather than interest, (b) exclude voluntary
prepayments and the effects thereof, and (c) amortize, prorate, allocate, and
spread in equal or unequal parts the total amount of interest throughout the
contemplated term of the Obligations hereunder.
10.11 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.12 INTEGRATION. This Agreement, together with the other Loan
Documents, comprises the complete and integrated agreement of the parties on the
subject matter hereof and thereof and supersedes all prior agreements, written
or oral, on such subject matter. In the event of any conflict between the
provisions of this Agreement and those of any other Loan Document, the
provisions of this Agreement shall control; provided that the inclusion of
supplemental rights or remedies in favor of the Administrative Agent or the
Lenders in any other Loan Document
73
shall not be deemed a conflict with this Agreement. Each Loan Document was
drafted with the joint participation of the respective parties thereto and shall
be construed neither against nor in favor of any party, but rather in accordance
with the fair meaning thereof.
10.13 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default at the time of any Credit Extension, and shall continue in full
force and effect as long as any Loan or any other Obligation hereunder shall
remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.
10.14 SEVERABILITY. If any provision of this Agreement or the other
Loan Documents is held to be illegal, invalid or unenforceable, (a) the
legality, validity and enforceability of the remaining provisions of this
Agreement and the other Loan Documents shall not be affected or impaired thereby
and (b) the parties shall endeavor in good faith negotiations to replace the
illegal, invalid or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
10.15 TAX FORMS.
(a) (i) Each Lender that is not a "United States person"
within the meaning of Section 7701(a)(30) of the Code (a
"Foreign Lender") shall deliver to the Administrative Agent,
prior to receipt of any payment subject to withholding under the
Code (or upon accepting an assignment of an interest herein),
two duly signed completed copies of either IRS Form W-8BEN or
any successor thereto (relating to such Foreign Lender and
entitling it to an exemption from, or reduction of, withholding
tax on all payments to be made to such Foreign Lender by the
Borrower pursuant to this Agreement) or IRS Form W-8ECI or any
successor thereto (relating to all payments to be made to such
Foreign Lender by the Borrower pursuant to this Agreement) or
such other evidence satisfactory to the Borrower and the
Administrative Agent that such Foreign Lender is entitled to an
exemption from, or reduction of, U.S. withholding tax, including
any exemption pursuant to Section 881(c) of the Code. Thereafter
and from time to time, each such Foreign Lender shall (A)
promptly submit to the Administrative Agent such additional duly
completed and signed copies of one of such forms (or such
successor forms as shall be adopted from time to time by the
relevant United States taxing authorities) as may then be
available under then current United States laws and regulations
to avoid, or such evidence as is satisfactory to the Borrower
and the Administrative Agent of any available exemption from or
reduction of, United States withholding taxes in respect of all
payments to be made to such Foreign Lender by the Borrower
pursuant to this Agreement, (B)
74
promptly notify the Administrative Agent of any change in
circumstances which would modify or render invalid any claimed
exemption or reduction, and (C) take such steps as shall not be
materially disadvantageous to it, in the reasonable judgment of
such Lender, and as may be reasonably necessary (including the
re-designation of its Lending Office) to avoid any requirement
of applicable Laws that the Borrower make any deduction or
withholding for taxes from amounts payable to such Foreign
Lender.
(ii) Each Foreign Lender, to the extent it does not
act or ceases to act for its own account with respect to any
portion of any sums paid or payable to such Lender under any of
the Loan Documents (for example, in the case of a typical
participation by such Lender), shall deliver to the
Administrative Agent on the date when such Foreign Lender ceases
to act for its own account with respect to any portion of any
such sums paid or payable, and at such other times as may be
necessary in the determination of the Administrative Agent (in
the reasonable exercise of its discretion), (A) two duly signed
completed copies of the forms or statements required to be
provided by such Lender as set forth above, to establish the
portion of any such sums paid or payable with respect to which
such Lender acts for its own account that is not subject to U.S.
withholding tax, and (B) two duly signed completed copies of IRS
Form W-8IMY (or any successor thereto), together with any
information such Lender chooses to transmit with such form, and
any other certificate or statement of exemption required under
the Code, to establish that such Lender is not acting for its
own account with respect to a portion of any such sums payable
to such Lender.
(iii) The Borrower shall not be required to pay any
additional amount to any Foreign Lender under Section 3.01 (A)
with respect to any Taxes required to be deducted or withheld on
the basis of the information, certificates or statements of
exemption such Lender transmits with an IRS Form W-8IMY pursuant
to this Section 10.15(a) or (B) if such Lender shall have failed
to satisfy the foregoing provisions of this Section 10.15(a);
provided that if such Lender shall have satisfied the
requirement of this Section 10.15(a) on the date such Lender
became a Lender or ceased to act for its own account with
respect to any payment under any of the Loan Documents, nothing
in this Section 10.15(a) shall relieve the Borrower of its
obligation to pay any amounts pursuant to Section 3.01 in the
event that, as a result of any change in any applicable law,
treaty or governmental rule, regulation or order, or any change
in the interpretation, administration or application thereof,
such Lender is no longer properly entitled to deliver forms,
certificates or other evidence at a subsequent date establishing
the fact that such Lender or other Person for the account of
which such Lender receives any sums payable under any of the
Loan Documents is not subject to withholding or is subject to
withholding at a reduced rate.
(iv) The Administrative Agent may, without reduction,
withhold any Taxes required to be deducted and withheld from any
payment under any of the Loan Documents with respect to which
the Borrower is not required to pay additional amounts under
this Section 10.15(a).
75
(b) Upon the request of the Administrative Agent, each
Lender that is a "United States person" within the meaning of Section
7701(a)(30) of the Code shall deliver to the Administrative Agent two
duly signed completed copies of IRS Form W-9. If such Lender fails to
deliver such forms, then the Administrative Agent may withhold from any
interest payment to such Lender an amount equivalent to the applicable
back-up withholding tax imposed by the Code, without reduction.
(c) If any Governmental Authority asserts that the
Administrative Agent did not properly withhold or backup withhold, as
the case may be, any tax or other amount from payments made to or for
the account of any Lender, such Lender shall indemnify the
Administrative Agent therefor, including all penalties and interest, any
taxes imposed by any jurisdiction on the amounts payable to the
Administrative Agent under this Section, and costs and expenses
(including Attorney Costs) of the Administrative Agent. The obligation
of the Lenders under this Section shall survive the termination of the
Aggregate Commitments, repayment of all other Obligations hereunder and
the resignation of the Administrative Agent.
10.16 GOVERNING LAW.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, the LAW OF THE STATE OF CALIFORNIA APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE ADMINISTRATIVE AGENT AND
EACH LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF CAILIFORNIA
SITTING IN LOS ANGELES COUNTY OR OF THE UNITED STATES FOR THE CENTRAL DISTRICT
OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER,
THE ADMINISTRATIVE AGENT AND EACH LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF
ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE BORROWER,
THE ADMINISTRATIVE Agent AND EACH LENDER IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING 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 ACTION
OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER
DOCUMENT RELATED THERETO. THE BORROWER, THE ADMINISTRATIVE Agent AND EACH LENDER
WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE
MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE.
10.17 WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY TO THIS AGREEMENT
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM
WITH RESPECT TO ANY
76
LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW
EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR
OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A
JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A
COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
10.18 TIME OF THE ESSENCE. Time is of the essence of the Loan
Documents.
10.19 ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
[Remainder of Page Intentionally Left Bank]
77
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
REMEDYTEMP, INC.
By: /s/ Alan M. Purdy
--------------------------------
Name: Alan M. Purdy
Title: Senior VP, CFO
78
BANK OF AMERICA, N.A., as
Administrative Agent
By: /s/ Ken Puro
--------------------------------
Name: Ken Puro
Title: Vice President
79
BANK OF AMERICA, N.A., as a Lender,
L/C Issuer and Swing Line Lender
By: /s/ Cynthia K. Goodfellow
--------------------------------
Name: Cynthia K. Goodfellow
Title: Vice President
80
[OTHER LENDERS]
UNION BANK OF CALIFORNIA, N.A.
By: /s/ Stephen Dunne
--------------------------------
Name: Stephen W. Dunne
Title: Vice President
81
SCHEDULE 2.01
COMMITMENTS
AND PRO RATA SHARES
LENDER COMMITMENT PRO RATA SHARE
- -------------------------------------------------------------------------------
Bank of America, N.A. $ 25,000,000 62.5000000000%
Union Bank of California, N.A. 15,000,000 37.5000000000%
Total $ 40,000,000 100.000000000%
1
SCHEDULE 5.05
SUPPLEMENT TO INTERIM FINANCIAL STATEMENTS
Nothing in Addition
1
SCHEDULE 5.06
LITIGATION
1
SCHEDULE 5.06
1. LEGAL PROCEEDINGS
On October 16, 2001, GLF Holding Company, Inc. and Fredrick S. Pallas filed
a complaint in the Superior Court of the State of California, County of Los
Angeles, against Remedy Temp, Inc., Remedy Intelligent Staffing, Inc. (a
wholly-owned subsidiary), Remedy Temporary Services, Inc. (a wholly-owned
subsidiary), Karin Somogyi, Paul W. Mikos and Greg Palmer. The Complaint
purports to be a class action brought by the individual plaintiffs on behalf of
all of the Company's traditional and licensed franchisees. The Complaint alleges
claims for fraud and deceit, negligent misrepresentation, negligence, breach of
contract, breach of warranty, conversion, and accounting, unfair and deceptive
practices, and restitution and equitable relief. The plaintiffs claim that
Remedy wrongfully induced its franchisees into signing franchise agreements and
breached the agreements, thus causing the franchisees damage. Remedy has sought
to compel arbitration with the plaintiffs in accordance with its franchise
agreement with each of them and to deny class certification. Remedy believes it
has meritorious defenses to the allegations contained in this complaint and
intends to defend this action with vigor.
At this time, management is unable to give an estimate, within the meaning
and in accordance with standards set for the American Bar Association Statement
of Policy, as to the amount or range of potential loss, if any, which might
result to the Company if the outcome in this matter were unfavorable. Management
does not believe the Company is party to any other legal proceeding that is
likely to have a material adverse effect on the Company.
On December 10, 2001, Remedy filed a demand for arbitration before the Los
Angeles branch of the American Arbitration Association and a complaint in United
States District Court, Central District of California, for, among other things,
breach of contract, trademark infringement, misappropriation of trade secrets
and unfair competition against Stephen M. Smith, Jody A. Smith and Smith
Temporaries, Inc. doing business as CornerStone Staffing and Remedy Intelligent
Staffing. The defendants are licensed franchisees of Remedy; however, their
franchise agreement expired on December 30, 2001. Remedy believes that its case
is meritorious and will protect its interests to the fullest extent permitted by
law.
From time to time, the Company becomes a party to other litigation
incidental to its business and operations. The Company maintains insurance
coverage that management believes is reasonable and prudent for the business
risks that the Company faces.
SCHEDULE 5.09
ENVIRONMENTAL MATTERS
None
1
SCHEDULE 5.13
SUBSIDIARIES
AND OTHER EQUITY INVESTMENTS
Part (a). Subsidiaries
1. Wholly-owned Subsidiaries of RemedyTemp, Inc.
(i) REMX, Inc.
(ii) Remedy Intelligent Staffing, Inc.
(iii) Remedy Temporary Services, Inc.
(iv) Remedy Insurance Group, LTD.
2. Wholly-owned Subsidiary of Remedy Temporary Services, Inc.
(i) Remedy Temporary Services, LLC
Part (b). Other Equity Investments. - None
1
SCHEDULE 5.17
INTELLECTUAL PROPERTY MATTERS
None
1
SCHEDULE 7.01
EXISTING LIENS
1
***THIS DATA IS FOR INFORMATION PURPOSES ONLY. CERTIFICATION CAN ONLY BE
OBTAINED THROUGH THE OFFICE OF THE CALIFORNIA SECRETARY OF STATE***
CALIFORNIA SECRETARY OF STATE, UCC RECORD
DEBTOR(S): REMEDYTEMP INC [BUSINESS]
32122 CAMINO CAPISTRANO
SAN JUAN CAPISTRANO, CA
FID/SS#: 952890471
SECURED PARTIES: BA LEASING & CAPITAL CORP
FOUR EMBARCADERO CTR STE 1200
SAN FRANCISCO, CA
FILING-DATE: 11/03/1993
FILING-TIME: 08:00 AM
EXPIRATION DATE: 11/03/2003
FILING-NUMBER: 93223428
STATUS: ACTIVE
TYPE: FINANCING STATEMENT
HISTORY:
Date Time Number Type
---------- -------- ---------- ------------
10/09/1998 08:00 AM 98289C0016 CONTINUATION
CALL LEXISNEXIS DOCUMENT SOLUTIONS FOR ALL YOUR FILING NEEDS. 800.634.9738
***THIS DATA IS FOR INFORMATION PURPOSES ONLY. CERTIFICATION CAN ONLY BE
OBTAINED THROUGH THE OFFICE OF THE CALIFORNIA SECRETARY OF STATE***
CALIFORNIA SECRETARY OF STATE, UCC RECORD
DEBTOR(S): REMEDYTEMP INC [BUSINESS]
101 ENTERPRISE
ALISO VIEJO, CA 92657
SECURED PARTIES: MELLON FIRST UNITED LEASING
100 CORPORATE N
BANNOCKBURN, IL 60015
FILING-DATE: 10/16/1998
FILING-TIME: 08:00 AM
EXPIRATION DATE: 10/16/2003
FILING-NUMBER: 9829660936
STATUS: ACTIVE
TYPE: FINANCING STATEMENT
CALL LEXISNEXIS DOCUMENT SOLUTIONS FOR ALL YOUR FILING NEEDS. 800.634.9738
SCHEDULE 7.02
RemedyTemp, Inc.
Investment Policy (Revised)
September 13, 2001
Purpose
To define a policy with the Board of Directors authorization, to guide the
investment practices of RemedyTemp, Inc. (the "Company").
Investment Strategy
The excess funds of the Company will be managed in accordance with procedures
designed to safeguard those corporate assets while concurrently generating a
return at or above the market. The investment portfolio will be diversified as
required to address short-term liquidity needs.
.. All investment decisions to be made with a focus on the preservation of
capital
.. Priority of investment considerations:
1. Safety of principal
2. Liquidity of Investments
3. Highest available return, on an after-tax basis, consistent with
safety and liquidity objectives
4. Provide fiduciary control of all investments.
Approved Investment Instruments
1) U.S. Treasuries - may invest in any one of the obligations of the U.S.
Treasury listed below:
o Treasury Bill
o Treasury Note
o Treasury Bond
o Treasury Strip
2) U.S. Government Agencies - may invest in any one of the obligations of
the U.S. Government Agencies, including Repurchase agreements
collateralized by Government securities.
3) Certificates of Deposit - may invest in Certificates of Deposit at
banks or thrift institutions rated in one of the three highest
categories.
4) Banker's Acceptance - may invest in Banker's Acceptance issued by
banks rated in one of the three highest categories. Bank institution
size must be a minimum of $3 Billion in assets.
5) Commercial Paper - may invest in Commercial Paper issued by
corporations rated A1 or higher by Standard and Poor's, or P1 or
higher by Moody's Investor Services, or the equivalent by another
rating agency.
6) Money Market Funds
7) Corporate Notes rated BBB or higher by Standard and Poor's or Moody's,
or if held in a mutual fund, B or better if not more than 10% of the
funds' assets are below investment grade (BBB).
8) Eurodollar Time Deposits and Eurodollar Certificates of Deposit at
banks rated in one of the three highest categories.
9) The following tax-exempt and tax-advantaged securities are permissible
if rated MIG1, A1, P1, or AA, or higher:
o Tax-exempt commercial paper
o Variable rate demand obligations
o Fixed rate, fixed maturity municipal notes
o Money Market Preferred Stock rated
10) There will be no investments in common stock, preferred stock, or
convertible securities. In addition, securities will not be purchased
on margin.
Maturity Limitations
No individual security may have a maturity date longer than three years.
Liquidity
Liquidity shall be provided by minimum and maximum limits as follows:
o Cash available within 30 days shall not be less than $5 million
o No more than 50% of the total portfolio shall be invested in time
deposits or other investments with a lack of liquidity such as
commercial paper for which only the dealer and issuer make a market
Derivatives
Derivatives such as options, swaps, and futures will be permitted for hedging
purposes only - to protect against volatility and loss of principal and not for
profit, yield enhancement or speculation.
Diversification and Concentration Limits
No more than 20% (or $3,000,000, whichever is less) of the portfolio may be
invested with a single issue, except those considered U.S. Government. The
Company may not invest more than 75% of its portfolio through any one Investment
Institution at any given time.
Authorization
Employees authorized to open accounts with investment institutions and to
purchase investment instruments are the Chief Financial Officer, Manager of
Financial Forecasting or Controller acting within the guidelines of this policy.
The Chief Executive Officer and the Chief Financial Officer collectively are
authorized to make investment decisions outside the guidelines of this policy,
provided that such investment is presented to the Board of Directors for
approval within 10 days of making such investment.
SCHEDULE 7.03
EXISTING INDEBTEDNESS
None
1
SCHEDULE 10.02
OFFSHORE AND DOMESTIC LENDING
OFFICE, ADDRESSES FOR NOTICES
ADMINISTRATIVE AGENT'S OFFICE
Notices (other than Requests for Extensions of Credit):
Bank of America, N.A.
800 Fifth Avenue, Floor 37
Seattle, WA 98104
Mail Code: WA1-501-37-20
Attn: Ken Puro
Telephone: 206-358-0138
Facsimile: 206-358-0971
Electronic Mail: ken.puro@bankofamerica.com
Requests for Extensions of Credit:
Bank of America, N.A.
1850 Gateway Boulevard
Concord, CA 94520
Mail Code: CA4-706-05-09
Attn: Patricia Dance
Telephone: 925-675-8368
Facsimile: 888-969-3312
Electronic Mail: patricia.dance@bankofamerica.com
Payments:
BANK OF AMERICA
Dallas, TX
ABA No. 111000012
Account No.: 3750836479
Account Name: Credit Services
Reference: RemedyTemp
Letters of Credit:
Bank of America, N.A.
Trade Operations - Los Angeles #226521
333 S. Beaudry Avenue, 19th Floor
Mail Code: CA9-703-19-23
Los Angeles, CA 90017-1466
Attn: Sandra Leon, Vice President
Telephone: 213-345-5231
Facsimile: 213-345-6694
Electronic Mail: sandra.leon@bankofamerica.com
1
Other Notices as Lender:
Bank of America, N.A.
675 Anton Boulevard, 2nd Floor
Costa Mesa, CA 92626
Attn: Cynthia Goodfellow
Telephone: 714-850-6547
Facsimile: 714-850-6586
Electronic Mail: Cynthia.k.goodfellow@bankofamerica.com
UNION BANK OF CALIFONRIA, N.A.
Requests for Credit Extensions:
Union Bank of California, N.A.
1980 Saturn Street
Monterey Park, CA 91755
Attn: Shirley Davis
Telephone: 323-720-7870
Facsimile: 323-720-2224
Electronic Mail: Shirley_davis@uboc.com
Notices (other than Requests for Credit Extension):
Union Bank of California, N.A.
Orange County Commercial Banking
18300 Von Karman Avenue, Suite 310
Irvine, CA 92612
Attn: Stephen W. Dunne, Vice President
Telephone: 949-553-6846
Facsimile: 949-553-7122
Electronic Mail: Stephen.dunne@uboc.com
Payments:
Name of Lender: Union Bank of California, N.A.
ABA Number: 122-000-496
Account Number: CREDIT GL 070-196431
Account Name: Wire Transfer Clearing
Reference: RemedyTemp, Inc.
BORROWER:
RemedyTemp, Inc.
101 Enterprise
Aliso Viejo, CA 92656
Attn: Alan Purdy
Telephone: 949-425-7611
Facsimile: 949-425-7800
Electronic Mail: alanp@remedystaff.com
2
EXHIBIT A
FORM OF COMMITTED LOAN NOTICE
Date: ___________, _____
To: Bank of America, N.A., as Administrative Agent
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement, dated as of
July 31, 2002 (as amended, restated, extended, supplemented or otherwise
modified in writing from time to time, the "Agreement;" the terms defined
therein being used herein as therein defined), among RemedyTemp, Inc., a
California corporation (the "Borrower"), the Lenders from time to time party
thereto, and Bank of America, N.A., as Administrative Agent, L/C Issuer and
Swing Line Lender.
The undersigned hereby requests (select one):
[ ] A Borrowing of Committed Loans [ ] A conversion or continuation
of Loans
1. On (a Business Day).
2. In the amount of $_____________.
3. Comprised of $_____________.
[Type of Committed Loan requested]
4. For Eurodollar Rate Loans: with an Interest Period of months.
The Committed Borrowing requested herein complies with the proviso to
the first sentence of Section 2.01 of the Agreement.
REMEDYTEMP, INC.
By:
---------------------------
Name:
--------------------------
Title:
-------------------------
1
EXHIBIT B
FORM OF SWING LINE LOAN NOTICE
Date: ___________, _____
To: Bank of America, N.A., as Swing Line Lender
Bank of America, N.A., as Administrative Agent
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement, dated as of July 31,
2002 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the "Agreement;" the terms defined therein being used
herein as therein defined), among RemedyTemp, Inc., a California corporation
(the "Borrower"), the Lenders from time to time party thereto, and Bank of
America, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender.
The undersigned hereby requests a Swing Line Loan:
1. On (a Business Day).
2. In the amount of $_____________.
The Swing Line Borrowing requested herein complies with the requirements
of the provisos to the first sentence of Section 2.04(a) of the Agreement.
REMEDYTEMP, INC.
By:
---------------------------
Name:
--------------------------
Title:
-------------------------
1
EXHIBIT C
FORM OF NOTE
_________________
FOR VALUE RECEIVED, the undersigned (the "Borrower"), hereby promises to
pay to _____________________ or registered assigns (the "Lender"), in accordance
with the provisions of the Agreement (as hereinafter defined), the principal
amount of each Loan from time to time made by the Lender to the Borrower under
that certain Credit Agreement, dated as of July 31, 2002 (as amended, restated,
extended, supplemented or otherwise modified in writing from time to time, the
"Agreement;" the terms defined therein being used herein as therein defined),
among the Borrower, the Lenders from time to time party thereto, and Bank of
America, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender.
The Borrower promises to pay interest on the unpaid principal amount of
each Loan from the date of such Loan until such principal amount is paid in
full, at such interest rates and at such times as provided in the Agreement.
Except as otherwise provided in Section 2.04(f) of the Agreement with respect to
Swing Line Loans, all payments of principal and interest shall be made to the
Administrative Agent for the account of the Lender in Dollars in immediately
available funds at the Administrative Agent's Office. If any amount is not paid
in full when due hereunder, such unpaid amount shall bear interest, to be paid
upon demand, from the due date thereof until the date of actual payment (and
before as well as after judgment) computed at the per annum rate set forth in
the Agreement.
This Note is one of the Notes referred to in the Agreement, is entitled
to the benefits thereof and may be prepaid in whole or in part subject to the
terms and conditions provided therein. This Note is also entitled to the
benefits of the Guaranty. Upon the occurrence and continuation of one or more of
the Events of Default specified in the Agreement, all amounts then remaining
unpaid on this Note shall become, or may be declared to be, immediately due and
payable all as provided in the Agreement. Loans made by the Lender shall be
evidenced by one or more loan accounts or records maintained by the Lender in
the ordinary course of business. The Lender may also attach schedules to this
Note and endorse thereon the date, amount and maturity of its Loans and payments
with respect thereto.
The Borrower, for itself, its successors and assigns, hereby waives
diligence, presentment, protest and demand and notice of protest, demand,
dishonor and non-payment of this Note.
1
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF CALIFORNIA.
REMEDYTEMP, INC.
By:
---------------------------
Name:
--------------------------
Title:
-------------------------
2
LOANS AND PAYMENTS WITH RESPECT THERETO
Amount of Outstanding
End of Principal or Principal
Type of Amount of Interest Interest Paid Balance This Notation
Date Loan Made Loan Made Period This Date Date Made By
- ---------------------------------------------------------------------------------------------
- ---- --------- ---------- -------- ------------- ------------ --------
- ---- --------- ---------- -------- ------------- ------------ --------
- ---- --------- ---------- -------- ------------- ------------ --------
- ---- --------- ---------- -------- ------------- ------------ --------
- ---- --------- ---------- -------- ------------- ------------ --------
- ---- --------- ---------- -------- ------------- ------------ --------
- ---- --------- ---------- -------- ------------- ------------ --------
- ---- --------- ---------- -------- ------------- ------------ --------
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- ---- --------- ---------- -------- ------------- ------------ --------
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- ---- --------- ---------- -------- ------------- ------------ --------
- ---- --------- ---------- -------- ------------- ------------ --------
- ---- --------- ---------- -------- ------------- ------------ --------
1
EXHIBIT D
FORM OF COMPLIANCE CERTIFICATE
Financial Statement Date: _______
To: Bank of America, N.A., as Administrative Agent
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement, dated as of July 31,
2002 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the "Agreement;" the terms defined therein being used
herein as therein defined), among RemedyTemp, Inc. a (the "Borrower"), the
Lenders from time to time party thereto, and Bank of America, N.A., as
Administrative Agent, L/C Issuer and Swing Line Lender.
The undersigned Responsible Officer hereby certifies as of the date
hereof that he/she is the of the Borrower, and that, as such, he/she is
authorized to execute and deliver this Certificate to the Administrative Agent
on the behalf of the Borrower, and that:
[Use following paragraph 1 for fiscal year-end financial statements]
1. Attached hereto as Schedule 1 are the year-end audited financial
statements required by Section 6.01(a) of the Agreement for the fiscal year of
the Borrower ended as of the above date, together with the report and opinion of
an independent certified public accountant required by such section.
[Use following paragraph 1 for fiscal quarter-end financial statements]
1. Attached hereto as Schedule 1 are the unaudited financial
statements required by Section 6.01(b) of the Agreement for the fiscal quarter
of the Borrower ended as of the above date. Such financial statements fairly
present the financial condition, results of operations and cash flows of the
Borrower and its Subsidiaries in accordance with GAAP as at such date and for
such period, subject only to normal year-end audit adjustments and the absence
of footnotes.
2. The undersigned has reviewed and is familiar with the terms of
the Agreement and has made, or has caused to be made under his/her supervision,
a detailed review of the transactions and condition (financial or otherwise) of
the Borrower during the accounting period covered by the attached financial
statements.
3. A review of the activities of the Borrower during such fiscal
period has been made under the supervision of the undersigned with a view to
determining whether during such fiscal period the Borrower performed and
observed all its Obligations under the Loan Documents, and
[select one:]
[to the best knowledge of the undersigned during such fiscal period,
the Borrower performed and observed each covenant and condition of the Loan
Documents applicable to it.]
1
--or--
[the following covenants or conditions have not been performed or
observed and the following is a list of each such Default and its nature and
status:]
4. The representations and warranties of the Borrower contained in
Article V of the Agreement, or which are contained in any document furnished at
any time under or in connection with the Loan Documents, are true and correct on
and as of the date hereof, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they are true
and correct as of such earlier date, and except that for purposes of this
Compliance Certificate, the representations and warranties contained in
subsections (a) and (b) of Section 5.05 of the Agreement shall be deemed to
refer to the most recent statements furnished pursuant to clauses (a) and (b),
respectively, of Section 6.01 of the Agreement, including the statements in
connection with which this Compliance Certificate is delivered.
5. The financial covenant analyses and information set forth on
Schedule 2 attached hereto are true and accurate on and as of the date of this
Certificate.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
______________, ______.
REMEDYTEMP, INC.
By:
---------------------------
Name:
--------------------------
Title:
-------------------------
2
For the Quarter/Year ended ___________________("Statement Date")
SCHEDULE 2
TO THE COMPLIANCE CERTIFICATE
($ IN 000'S)
I. SECTION 7.11(a) - CURRENT RATIO:
A. Consolidated current assets $_________
B. Consolidated current liabilities $_________
C. Aggregate amount of outstanding
Letters of Credit $_________
D. Current Ratio (Lines I.A to B plus C)
(Maximum Permitted 1.50:1.0) _________
II. SECTION 7.11 (b) - NET FUNDED DEBT TO EBITDA RATIO.
A. Funded Debt (including Letters of Credit and
bonds for worker's compensation) of Borrower
and its Subsidiaries on a consolidated basis $_________
B. Cash in excess of $10,000,000 $_________
C. Net Funded Debt (Lines II A minus B) $_________
D. Consolidated EBITDA
1. Consolidated Net Income $_________
2. Consolidated Interest Charges $_________
3. Provision for income taxes $_________
4. Depreciation expenses $_________
5. Amortization expenses $_________
6. Other expenses which do not
represent a cash item $_________
7. All non-cash items increasing
Consolidated Net Income $_________
8. Consolidated EBITDA
(Lines II.D. 1+2+3+4+5+6-7) $_________
E. Ratio of Net Funded Debt to EBITDA
(Lines 11.C to D.8)
(Maximum permitted 2.0:1.0) _________
3
III. SECTION 7.11 (c) - FIXED CHARGE COVERAGE RATIO.
A. Consolidated EBITDA (Line II.D.8) $_________
B. Collections on loans to franchisees $_________
C. Loans made to franchisees $_________
D. Non-financed capital expenditures $_________
E. Taxes paid $_________
F. Dividends paid $_________
G. Purchases of treasury stock $_________
H. Non-financed Acquisitions $_________
I. Non-financed repurchases of franchises
and licenses
J. The sum of Lines III. A+B-C-D-E-F-G-H-I $_________
K. Scheduled mandatory principal repayments
of borrowed money $_________
L. Scheduled mandatory payments under
capital leases $_________
M. 20% of all amounts outstanding under this
Agreement (excluding Letters of Credit) $_________
N. Interest expense $_________
O. The sum of Lines III. K+L+M+N $_________
P. Fixed Charge Coverage Ratio
(The ratio of Lines III. J to O) _________
(Minimum required 1.5:1.0)
IV. SECTION 7.11(d) - CONSOLIDATED EBITDA.
A. Consolidated EDITDA (Line II.D.8.) $_________
(Minimum required $7,000,000)
4
EXHIBIT E
ASSIGNMENT AND ASSUMPTION
This Assignment and Assumption (this "Assignment and Assumption") is
dated as of the Effective Date set forth below and is entered into by and
between [Insert name of Assignor] (the "Assignor") and [Insert name of Assignee]
(the "Assignee"). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (the "Credit
Agreement"), receipt of a copy of which is hereby acknowledged by the Assignee.
The Standard Terms and Conditions set forth in Annex 1 attached hereto are
hereby agreed to and incorporated herein by reference and made a part of this
Assignment and Assumption as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and
assigns to the Assignee, and the Assignee hereby irrevocably purchases and
assumes from the Assignor, subject to and in accordance with the Standard Terms
and Conditions and the Credit Agreement, as of the Effective Date inserted by
the Administrative Agent as contemplated below (i) all of the Assignor's rights
and obligations as a Lender under the Credit Agreement and any other documents
or instruments delivered pursuant thereto to the extent related to the amount
and percentage interest identified below of all of such outstanding rights and
obligations of the Assignor under the respective facilities identified below
(including, without limitation, Letters of Credit, Guarantees and Swing Line
Loans included in such facilities) and (ii) to the extent permitted to be
assigned under applicable law, all claims, suits, causes of action and any other
right of the Assignor (in its capacity as a Lender) against any Person, whether
known or unknown, arising under or in connection with the Credit Agreement, any
other documents or instruments delivered pursuant thereto or the loan
transactions governed thereby or in any way based on or related to any of the
foregoing, including, but not limited to, contract claims, tort claims,
malpractice claims, statutory claims and all other claims at law or in equity
related to the rights and obligations sold and assigned pursuant to clause (i)
above (the rights and obligations sold and assigned pursuant to clauses (i) and
(ii) above being referred to herein collectively as, the "Assigned Interest").
Such sale and assignment is without recourse to the Assignor and, except as
expressly provided in this Assignment and Assumption, without representation or
warranty by the Assignor.
1. Assignor: ______________________________
2. Assignee: ______________________________ [and is an
Affiliate/Approved Fund of [identify Lender]]
3. Borrower: RemedyTemp, Inc.
4. Administrative Agent: Bank of America, N.A., as the
administrative agent under the Credit Agreement.
5. Credit Agreement: The Credit Agreement, dated as of July 31,
2002 among RemedyTemp, Inc., the Lenders
parties thereto, and Bank of America, N.A.,
as Administrative Agent, Swing Line Lender
and L/C Issuer.
1
6. Assigned Interest:
Aggregate
Amount of Amount of Percentage
Commitment/Loans Commitment/Loans Assigned of
Facility Assigned for all Lenders Assigned* Commitment/Loans
----------------- ---------------- ---------------- ----------------
_________________ $_______________ $_______________ ________________%
_________________ $_______________ $_______________ ________________%
_________________ $_______________ $_______________ ________________%
[7. Trade Date: __________________]
Effective Date: __________________, 20__ [TO BE INSERTED BY ADMINISTRATIVE AGENT
AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]
The terms set forth in this Assignment and Assumption are hereby
agreed to:
ASSIGNOR
[NAME OF ASSIGNOR]
By:
-----------------------------
Title:
ASSIGNEE
[NAME OF ASSIGNEE]
By:
-----------------------------
Title:
- ----------
- ----------
* Amount to be adjusted by the counterparties to take into account any payments
or prepayments made between the Trade Date and the Effective Date.
2
[Consented to and] Accepted:
[NAME OF ADMINISTRATIVE AGENT], as
Administrative Agent
By:
---------------------------------
Title:
[Consented to:]
By:
---------------------------------
Title:
3
ANNEX 1 TO ASSIGNMENT AND ASSUMPTION
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1. Representations and Warranties.
1.1. Assignor. The Assignor (a) represents and warrants that (i) it
is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned
Interest is free and clear of any lien, encumbrance or other adverse claim and
(iii) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby; and (b) assumes no responsibility with respect
to (i) any statements, warranties or representations made in or in connection
with the Credit Agreement or any other Loan Document, (ii) the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
Loan Documents or any collateral thereunder, (iii) the financial condition of
the Borrower, any of its Subsidiaries or Affiliates or any other Person
obligated in respect of any Loan Document or (iv) the performance or observance
by the Borrower, any of its Subsidiaries or Affiliates or any other Person of
any of their respective obligations under any Loan Document.
1.2. Assignee. The Assignee (a) represents and warrants that (i) it
has full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) it
meets all requirements of an Eligible Assignee under the Credit Agreement
(subject to receipt of such consents as may be required under the Credit
Agreement), (iii) from and after the Effective Date, it shall be bound by the
provisions of the Credit Agreement as a Lender thereunder and, to the extent of
the Assigned Interest, shall have the obligations of a Lender thereunder, (iv)
it has received a copy of the Credit Agreement, together with copies of the most
recent financial statements delivered pursuant to Section __ thereof, as
applicable, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Assumption and to purchase the Assigned Interest on the basis of
which it has made such analysis and decision independently and without reliance
on the Administrative Agent or any other Lender, and (v) if it is a Foreign
Lender, attached hereto is any documentation required to be delivered by it
pursuant to the terms of the Credit Agreement, duly completed and executed by
the Assignee; and (b) agrees that (i) it will, independently and without
reliance on the Administrative Agent, the Assignor or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Loan Documents, and (ii) it will perform in accordance with their
terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender.
2. Payments. From and after the Effective Date, the Administrative
Agent shall make all payments in respect of the Assigned interest (including
payments of principal, interest, fees and other amounts) to the Assignee whether
such amounts have accrued prior to or on or after the Effective Date. The
Assignor and the Assignee shall make all appropriate adjustments in payments by
the Administrative Agent for periods prior to the Effective Date or with respect
to the making of this assignment directly between themselves.
1
3. General Provisions. This Assignment and Assumption shall be
binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns. This Assignment and Assumption may be
executed in any number of counterparts, which together shall constitute one
instrument. Delivery of an executed counterpart of a signature page of this
Assignment and Assumption by telecopy shall be effective as delivery of a
manually executed counterpart of this Assignment and Assumption. This Assignment
and Assumption shall be governed by, and construed in accordance with, the law
of the State of California.
2
EXHIBIT F
FORM OF GUARANTY
1
BORROWER: RemedyTemp, Inc.
GUARANTORS: REMX, Inc.,
Remedy Temporary Services, Inc.
and Remedy Intelligent Staffing, Inc.
GUARANTY
To: Bank of America, N.A., as Administrative Agent under the Loan Documents (as
defined herein)
1. The Guaranty. This Guaranty is given by the undersigned, jointly and
severally (each a "Guarantor" and collectively, the "Guarantors"), in favor of
Bank of America, N.A., as Administrative Agent ("Agent") on behalf of the
Lenders as defined in the Credit Agreement dated July 31, 2002, by and among
RemedyTemp, Inc., a California corporation ("Borrower"), each lender from time
to time party thereto, and Bank of America, N.A. as Administrative Agent, Swing
Line Lender and L/C Issuer (all as defined therein) (the "Credit Agreement")
(the Agent and each of the Lenders hereinafter collectively referred to as
"Lender"). For valuable consideration, each Guarantor hereby unconditionally
guarantees and promises to pay promptly to Lenders, or order, in lawful money of
the United States, any and all Indebtedness of Borrower to Lenders when due,
whether at stated maturity, upon acceleration or otherwise, and at all times
thereafter, subject to such limitations on each Guarantor's liability as are set
forth below. This Guaranty is cumulative and does not supersede any other
outstanding guaranties, and the liability of each Guarantor under this Guaranty
is exclusive of each Guarantor's liability under any other guaranties signed by
each Guarantor. The obligations of all Guarantors under this Guaranty shall be
joint and several.
The liability of each Guarantor under this Guaranty shall be limited to the
Indebtedness under the Loan Documents dated July 31, 2002, and shall not exceed
at any one time the sum of (a) the principal amount of the Indebtedness under
such Loan Documents plus (b) all interest, fees, indemnities (including, without
limitation, hazardous waste indemnities), and other costs and expenses relating
to or arising out of the Indebtedness under such Loan Documents.
Notwithstanding the limitations on each Guarantor's liability set forth above,
each Guarantor's liability hereunder shall not exceed at any one time the
Maximum Guaranteed Amount. "Maximum Guaranteed Amount" shall mean the largest
amount during the period commencing with such Guarantor's execution of this
Guaranty and thereafter that would not render such Guarantor's obligations
hereunder subject to avoidance under Section 548 of the Bankruptcy Code (Title
11, United States Code) or any comparable provisions of any applicable state
law.
1
2. Definitions.
(a) "Borrower" shall mean the individual or the entity named
in Paragraph 1 of this Guaranty and, if more than one, then any one or
more of them.
(b) "Guarantor" shall mean the individual or the entity
signing this Guaranty and, if more than one, then any one or more of
them.
(c) "Indebtedness" shall mean any and all debts, liabilities,
and obligations of Borrower to Lenders, now or hereafter existing,
whether voluntary or involuntary and however arising, whether direct or
indirect or acquired by Lenders by assignment, succession, or
otherwise, whether due or not due, absolute or contingent, liquidated
or unliquidated, determined or undetermined, held or to be held by
Lenders for its own account or as agent for another or others, whether
Borrower may be liable individually or jointly with others, whether
recovery upon such debts, liabilities, and obligations may be or
hereafter become barred by any statute of limitations, and whether such
debts, liabilities, and obligations may be or hereafter become
otherwise unenforceable. Indebtedness includes, without limitation, any
and all obligations of Borrower to Lenders for reasonable attorneys'
fees and all other costs and expenses incurred by Lenders in the
collection or enforcement of any debts, liabilities, and obligations of
Borrower to Lenders.
(d) "Loan Documents" shall mean the Credit Agreement between
Borrower and Lenders, promissory notes from Borrower in favor of
Lenders, and all other agreements, documents, and instruments
evidencing any of the Indebtedness, and deeds of trust, mortgages,
security agreements, and other agreements, documents, and instruments
executed by Borrower in connection with such loan agreements,
promissory notes, and other agreements, documents, and instruments
evidencing any of the Indebtedness, all as now in effect and as
hereafter amended, restated, renewed, or superseded.
3. Obligations Independent. The obligations hereunder are independent
of the obligations of Borrower or any other guarantor, and a separate action or
actions may be brought and prosecuted against each Guarantor, or any of them,
whether action is brought against Borrower or any other guarantor or whether
Borrower or any other guarantor be joined in any such action or actions. Anyone
executing this Guaranty shall be bound by its terms without regard to execution
by anyone else.
4. Rights of Lenders. Each Guarantor authorizes Lenders, without notice
or demand and without affecting its liability hereunder, from time to time to:
(a) renew, compromise, extend, accelerate, or otherwise change
the time for payment, or otherwise change the terms, of the
Indebtedness or any part thereof, including increase or decrease of the
rate of interest thereon, or otherwise change the terms of any Loan
Documents;
2
(b) receive and hold security for the payment of this Guaranty
or any Indebtedness and exchange, enforce, waive, release, fail to
perfect, sell, or otherwise dispose of any such security;
(c) apply such security and direct the order or manner of sale
thereof as Lenders in its discretion may determine;
(d) release or substitute any Guarantor or any one or more of
any endorsers or other guarantors of any of the Indebtedness; and
(e) permit the Indebtedness to exceed any Guarantor's
liability under this Guaranty, and each Guarantor agrees that any
amounts received by Lenders from any source, other than from any
Guarantor, shall be deemed to be applied first to any unguaranteed
portion of the Indebtedness.
5. Guaranty to be Absolute. Each Guarantor agrees that until the
Indebtedness has been paid in full and any commitments of Lenders or facilities
provided by Lenders with respect to the Indebtedness have been terminated, each
Guarantor shall not be released by or because of the taking, or failure to take,
any action that might in any manner or to any extent vary the risks of each
Guarantor under this Guaranty or that, but for this paragraph, might discharge
or otherwise reduce, limit, or modify such Guarantor's obligations under this
Guaranty. Each Guarantor waives and surrenders any defense to any liability
under this Guaranty based upon any such action, including but not limited to any
action of Lenders described in the immediately preceding paragraph of this
Guaranty. It is the express intent of each Guarantor that each Guarantor's
obligations under this Guaranty are and shall be absolute and unconditional.
6. Guarantor's Waivers of Certain Rights and Certain Defenses. Each
Guarantor waives:
(a) any right to require Lenders to proceed against Borrower,
proceed against or exhaust any security for the Indebtedness, or pursue
any other remedy in Lenders' power whatsoever;
(b) any defense arising by reason of any disability or other
defense of Borrower, or the cessation from any cause whatsoever of the
liability of Borrower;
(c) any defense based on any claim that any of the Guarantor's
obligations exceed or are more burdensome than those of Borrower; and
(d) the benefit of any statute of limitations affecting any
Guarantor's liability hereunder.
No provision or waiver in this Guaranty shall be construed as limiting the
generality of any other waiver contained in this Guaranty.
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7. Waiver of Subrogation. Until the Indebtedness has been paid in full and
any commitments of Lenders or facilities provided by Lenders with respect to the
Indebtedness have been terminated, even though the Indebtedness may be in excess
of any of the Guarantor's liability hereunder, each Guarantor waives any right
of subrogation, reimbursement, indemnification, and contribution (contractual,
statutory, or otherwise) including, without limitation, any claim or right of
subrogation under the Bankruptcy Code (Title 11, United States Code) or any
successor statute, arising from the existence or performance of this Guaranty,
and each Guarantor waives any right to enforce any remedy which Lenders now have
or may hereafter have against Borrower, and waives any benefit of, and any right
to participate in, any security now or hereafter held by Lenders.
8. Waiver of Notices. Each Guarantor waives all presentments, demands for
performance, notices of nonperformance, protests, notices of protest, notices of
dishonor, notices of intent to accelerate, notices of acceleration, notices of
any suit or any other action against Borrower or any other person, any other
notices to any party liable on any Loan Document (including any Guarantor),
notices of acceptance of this Guaranty, and notices of the existence, creation,
or incurring of new or additional Indebtedness to which this Guaranty applies or
any other Indebtedness of Borrower to Lenders.
9. Waivers of Other Rights and Defenses.
(a) Each Guarantor waives any rights and defenses that are or may
become available to such Guarantor by reason of Sections 2787 to 2855,
inclusive, of the California Civil Code.
(b) Each Guarantor waives all rights and defenses that such Guarantor
may have because any of the Indebtedness is secured by real property. This
means, among other things: (i) Lenders may collect from any Guarantor
without first foreclosing on any real or personal property collateral
pledged by Borrower; and (ii) if Lenders foreclose on any real property
collateral pledged by Borrower: (1) the amount of the Indebtedness may be
reduced only by the price for which that collateral is sold at the
foreclosure sale, even if the collateral is worth more than the sale price,
and (2) Lenders may collect from any Guarantor even if Lenders, by
foreclosing on the real property collateral, has destroyed any right any
Guarantor may have to collect from Borrower. This is an unconditional and
irrevocable waiver of any rights and defenses any Guarantor may have
because any of the Indebtedness is secured by real property. These rights
and defenses include, but are not limited to, any rights or defenses based
upon Section 580a, 580b, 580d, or 726 of the California Code of Civil
Procedure.
(c) Each Guarantor waives any right or defense it may have at law or
equity, including California Code of Civil Procedure Section 580a, to a
fair market value hearing or action to determine a deficiency judgment
after a foreclosure.
10. Security. To secure all of each Guarantor's obligations hereunder, each
Guarantor assigns and grants to Lenders a security interest in all moneys,
securities, and other
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property of each Guarantor now or hereafter in the possession of Lenders, all
deposit accounts of each Guarantor maintained with Lenders, and all proceeds
thereof. Upon default or breach of any of the Guarantor's obligations to
Lenders, Lenders may apply any deposit account to reduce the Indebtedness, and
may foreclose any collateral as provided in the Uniform Commercial Code and in
any security agreements between Lenders and any Guarantor.
11. Subordination. Any obligations of Borrower to each Guarantor, now or
hereafter existing, including but not limited to any obligations to each
Guarantor as subrogee of Lenders or resulting from each Guarantor's performance
under this Guaranty, are hereby subordinated to the Indebtedness. In addition to
each Guarantor's waiver of any right of subrogation as set forth in this
Guaranty with respect to any obligations of Borrower to each Guarantor as
subrogee of Lenders, each Guarantor agrees that, if Lenders so request, each
Guarantor shall not demand, take, or receive from Borrower, by setoff or in any
other manner, payment of any other obligations of Borrower to each Guarantor
until the Indebtedness has been paid in full and any commitments of Lenders or
facilities provided by Lenders with respect to the Indebtedness have been
terminated. If any payments are received by any Guarantor in violation of such
waiver or agreement, such payments shall be received by such Guarantor as
trustee for Lenders and shall be paid over to Lenders on account of the
Indebtedness, but without reducing or affecting in any manner the liability of
such Guarantor under the other provisions of this Guaranty. Any security
interest, lien, or other encumbrance that each Guarantor may now or hereafter
have on any property of Borrower is hereby subordinated to any security
interest, lien, or other encumbrance that Lenders may have on any such property.
12. Revocation of Guaranty.
(a) This Guaranty may be revoked at any time by any Guarantor in
respect to future transactions, unless there is a continuing consideration
as to such transactions which such Guarantor does not renounce. Such
revocation shall be effective upon actual receipt by Lenders, at the
address shown below or at such other address as may have been provided to
each Guarantor by Lenders, of written notice of revocation. Revocation
shall not affect any of the Guarantor's obligations or Lenders' rights with
respect to transactions committed or entered into prior to Lenders' receipt
of such notice, regardless of whether or not the Indebtedness related to
such transactions, before or after revocation, has been incurred, renewed,
compromised, extended, accelerated, or otherwise changed as to any of its
terms, including time for payment or increase or decrease of the rate of
interest thereon, and regardless of any other act or omission of Lenders
authorized hereunder. Revocation by any Guarantor shall not affect any
obligations of any other guarantor.
(b) Each Guarantor acknowledges and agrees that this Guaranty may be
revoked only in accordance with the foregoing provisions of this paragraph
and shall not be revoked simply as a result of any change in name,
location, or composition or structure of Borrower, the dissolution of
Borrower, or the termination, increase, decrease, or other change of any
personnel or owners of Borrower.
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13. Reinstatement of Guaranty. If this Guaranty is revoked, returned, or
canceled, and subsequently any payment or transfer of any interest in property
by Borrower to Lenders is rescinded or must be returned by Lenders to Borrower,
this Guaranty shall be reinstated with respect to any such payment or transfer,
regardless of any such prior revocation, return, or cancellation.
14. Stay of Acceleration. In the event that acceleration of the time for
payment of any of the Indebtedness is stayed upon the insolvency, bankruptcy, or
reorganization of Borrower or otherwise, all such Indebtedness guaranteed by
each Guarantor shall nonetheless be payable by each Guarantor immediately if
requested by Lenders.
15. No Deductions. All payments by each Guarantor hereunder shall be paid
in full, without setoff or counterclaim or any deduction or withholding
whatsoever, including, without limitation, for any and all present and future
taxes. In the event that any Guarantor or any Lender is required by law to make
any such deduction or withholding, each Guarantor agrees to pay on behalf of
Lenders such amount directly to the appropriate person or entity, or if any
Guarantor cannot legally comply with the foregoing, such Guarantor shall pay to
Lenders such additional amounts as will result in the receipt by Lenders of the
full amount payable hereunder. Each Guarantor shall promptly provide Lenders
with evidence of payment of any such amount made on Lenders' behalf.
16. Information Relating to Borrower. Each Guarantor acknowledges and
agrees that it shall have the sole responsibility for, and has adequate means
of, obtaining from Borrower such information concerning Borrower's financial
condition or business operations as each Guarantor may require, and that Lenders
have no duty, and each Guarantor is not relying on Lenders, at any time to
disclose to any Guarantor any information relating to the business operations or
financial condition of Borrower.
17. Borrower's Authorization. Where Borrower is a corporation, partnership,
or limited liability company, it is not necessary for Lenders to inquire into
the powers of Borrower or of the officers, directors, partners, members,
managers, 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, subject to any limitations on each
Guarantor's liability set forth herein.
18. Information Relating to Guarantor. Each Guarantor authorizes Lenders to
verify or check any information given by each Guarantor to Lenders, check each
Guarantor's credit references, verify employment, and obtain credit reports.
Each Guarantor acknowledges and agrees that the authorizations provided in this
paragraph apply to any individual general partner of any Guarantor and to each
Guarantor's spouse and any such general partner's spouse if any such Guarantor
or such general partner is married and lives in a community property state.
19. Change of Status. Each Guarantor shall not enter into any
consolidation, merger, or other combination unless such Guarantor is the
surviving business entity. Provided, if a Guarantor will not be the surviving
business entity, such Guarantor shall not change its legal
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structure unless and until (a) such Guarantor obtains the prior written consent
of Lenders and (b) all of such Guarantor's obligations under this Guaranty are
assumed by the new business entity.
20. Notices. All notices required under this Guaranty shall be personally
delivered or sent by first class mail, postage prepaid, or by overnight courier,
to the addresses on the signature page of this Guaranty, or sent by facsimile to
the fax numbers listed on the signature page, or to such other addresses as
Lenders and each Guarantor may specify from time to time in writing. Notices
sent by (a) first class mail shall be deemed delivered on the earlier of actual
receipt or on the fourth business day after deposit in the U.S. mail, postage
prepaid, (b) overnight courier shall be deemed delivered on the next business
day, and (c) telecopy shall be deemed delivered when transmitted.
21. Successors and Assigns. This Guaranty (a) binds each Guarantor and such
Guarantor's executors, administrators, successors, and assigns, provided that
each such Guarantor may not assign its rights or obligations under this Guaranty
without the prior written consent of Lenders, and (b) inures to the benefit of
Lenders and Lenders' indorsees, successors, and assigns. Lenders may, without
notice to any Guarantor and without affecting any Guarantor's obligations
hereunder, sell, assign, grant participations in, or otherwise transfer to any
other person, firm, or corporation the Indebtedness and this Guaranty, in whole
or in part. Each Guarantor agrees that Lenders may disclose to any assignee or
purchaser, or any prospective assignee or purchaser, of all or part of the
Indebtedness any and all information in Lenders' possession concerning each
Guarantor, this Guaranty, and any security for this Guaranty.
22. Amendments, Waivers, and Severability. No provision of this Guaranty
may be amended or waived except in writing. No failure by Lenders to exercise,
and no delay in exercising, any of its rights, remedies, or powers shall operate
as a waiver thereof, and no single or partial exercise of any such right,
remedy, or power shall preclude any other or further exercise thereof or the
exercise of any other right, remedy, or power. The unenforceability or
invalidity of any provision of this Guaranty shall not affect the enforceability
or validity of any other provision of this Guaranty.
23. Costs and Expenses. Each Guarantor agrees to pay all reasonable
attorneys' fees, including allocated costs of Lenders' in-house counsel, and all
other costs and expenses which may be incurred by Lenders (a) in the enforcement
of this Guaranty or (b) in the preservation, protection, or enforcement of any
rights of Lenders in any case commenced by or against any Guarantor or Borrower
under the Bankruptcy Code (Title 11, United States Code) or any similar or
successor statute.
24. Governing Law and Jurisdiction. This Guaranty shall be governed by and
construed under the laws of the State of California. Each Guarantor irrevocably
(a) submits to the non-exclusive jurisdiction of any federal or state court
sitting in the State of California in any action or proceeding arising out of or
relating to this Guaranty and (b) waives to the fullest extent permitted by law
any defense asserting an inconvenient forum in connection therewith. Service of
process by Lenders in connection with such action or proceeding shall be binding
on each Guarantor if sent to such Guarantor by registered or certified mail at
its address specified below.
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25. Arbitration and Waiver of Jury Trial.
------------------------------------
(a) This paragraph concerns the resolution of any controversies or
claims between each Guarantor and Lenders, whether arising in contract, tort or
by statute, including but not limited to controversies or claims that arise out
of or relate to: (i) this Guaranty (including any renewals, extensions or
modifications); or (ii) any document related to this Guaranty (collectively a
"Claim").
(b) At the request of any Guarantor or Lenders, any Claim shall be
resolved by binding arbitration in accordance with the Federal Arbitration Act
(Title 9, United States Code) (the "Act"). The Act will apply even though this
Guaranty provides that it is governed by the law of a specified state.
(c) Arbitration proceedings will be determined in accordance with the
Act, the applicable rules and procedures for the arbitration of disputes of
JAMS or any successor thereof ("JAMS"), and the terms of this paragraph. In the
event of any inconsistency, the terms of this paragraph shall control.
(d) The arbitration shall be administered by JAMS and conducted in any
U.S. state where real or tangible personal property collateral for this Guaranty
is located or if there is no such collateral, in California. All Claims shall be
determined by one arbitrator; however, if Claims exceed Five Million U.S.
Dollars ($5,000,000), upon the request of any party, the Claims shall be decided
by three arbitrators. All arbitration hearings shall commence within 90 days of
the demand for arbitration and close within 90 days of commencement, and the
award of the arbitrator(s) shall be issued within 30 days of the close of the
hearing. However, the arbitrator(s), upon a showing of good cause, may extend
the commencement of the hearing for up to an additional 60 days. The
arbitrator(s) shall provide a concise written statement of reasons for the
award. The arbitration award may be submitted to any court having jurisdiction
to be confirmed and enforced.
(e) The arbitrator(s) will have the authority to decide whether any
Claim is barred by the statute of limitations and, if so, to dismiss the
arbitration on that basis. For purposes of the application of the statute of
limitations, the service on JAMS under applicable JAMS rules of a notice of
claim is the equivalent of the filing of a lawsuit. Any dispute concerning this
arbitration provision or whether a Claim is arbitrable shall be determined by
the arbitrator(s). The arbitrator(s) shall have the power to award legal fees
pursuant to the terms of this Guaranty.
(f) This paragraph does not limit the right of any Guarantor or
Lenders to: (i) exercise self-help remedies, such as but not limited to, setoff,
(ii) initiate judicial or nonjudicial foreclosure against any real or personal
property collateral, (iii) exercise any judicial or power of sale rights, or
(iv) act in a court of law to obtain an interim remedy, such as but not limited
to, injunctive relief, writ of possession or appointment of a receiver, or
additional or supplementary remedies.
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(g) The filing of a court action is not intended to constitute a
waiver of the right of any Guarantor or Lenders, including the suing party,
thereafter to require submittal of the Claim to arbitration.
(h) By agreeing to binding arbitration, the parties irrevocably and
voluntarily waive any right they may have to a trial by jury in respect of any
Claim. Furthermore, without intending in any way to limit this agreement to
arbitrate, to the extent any Claim is not arbitrated, the parties irrevocably
and voluntarily waive any right they may have to a trial by jury in respect of
such Claim. This provision is a material inducement for the parties entering
into this Guaranty.
[Remainder of page intentionally left blank]
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Executed as of the 31st day of July, 2002.
GUARANTORS:
REMX INC.,
a California corporation
By: ____________________________________
Name: __________________________________
Title: _________________________________
REMEDY TEMPORARY SERVICES, INC.
a California corporation
By: ____________________________________
Name: __________________________________
Title: _________________________________
REMEDY INTELLIGENT STAFFING, INC.,
a California corporation
By: ____________________________________
Name: __________________________________
Title: _________________________________
Address for notices to Lenders: Address for notices for Guarantors:
Bank of America, N. A., 101 Enterprise
as Administrative Agent Aliso Viejo, CA 92656
800 Fifth Avenue, Floor 37
Mail Code: WA 1-501-37-20
Seattle, WA 98104
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