EXHIBIT 10.15
FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
dated as of
November 23, 1999
among
MOHAWK INDUSTRIES, INC.,
FIRST UNION NATIONAL BANK, as Agent,
SUNTRUST BANK, ATLANTA, as Agent,
and
WACHOVIA BANK, N.A., as Agent
TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS........................................................................ 1
SECTION 1.01. Definitions............................................................... 1
SECTION 1.02. Accounting Terms and Determinations....................................... 13
SECTION 1.03. References................................................................ 14
SECTION 1.04. Use of Defined Terms...................................................... 14
SECTION 1.05. Terminology............................................................... 14
ARTICLE II
THE CREDITS........................................................................ 14
SECTION 2.01. Commitments to Lend....................................................... 14
SECTION 2.02. Method of Borrowing....................................................... 14
SECTION 2.03. Notes..................................................................... 16
SECTION 2.04. Maturity of Loans......................................................... 16
SECTION 2.05. Interest Rates............................................................ 16
SECTION 2.06. Fees...................................................................... 18
SECTION 2.07. Optional Termination or Reduction of Commitments.......................... 19
SECTION 2.08. Mandatory Reduction and Termination of Commitments........................ 19
SECTION 2.09. Optional Prepayments...................................................... 19
SECTION 2.10. Mandatory Prepayments..................................................... 20
(i)
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SECTION 2.11. General Provisions as to Payments........................................ 20
SECTION 2.12. Computation of Interest and Fees......................................... 20
SECTION 2.13. Letters of Credit........................................................ 20
SECTION 2.14. Guarantee of Reimbursement Obligations................................... 22
SECTION 2.15. Assignments of Loans under Original Credit Agreement; Effective Date..... 24
ARTICLE III
CONDITIONS TO BORROWINGS.......................................................... 25
SECTION 3.01. Conditions to Initial Borrowing.......................................... 25
SECTION 3.02. Conditions to All Borrowings............................................. 26
ARTICLE IV
REPRESENTATIONS AND WARRANTIES.................................................... 27
SECTION 4.01. Corporate Existence and Power............................................ 27
SECTION 4.02. Corporate and Governmental Authorization; No Contravention............... 27
SECTION 4.03. Binding Effect........................................................... 27
SECTION 4.04. Financial Information.................................................... 27
SECTION 4.05. No Litigation............................................................ 28
SECTION 4.06. Compliance with ERISA.................................................... 28
SECTION 4.07. Taxes.................................................................... 28
SECTION 4.08. Subsidiaries............................................................. 28
SECTION 4.09. Not an Investment Company................................................ 28
SECTION 4.10. Ownership of Property; Liens............................................. 28
(ii)
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SECTION 4.11. No Default.............................................................. 29
SECTION 4.12. Full Disclosure......................................................... 29
SECTION 4.13. Environmental Matters................................................... 29
SECTION 4.14. Capital Stock........................................................... 29
SECTION 4.15. Margin Stock............................................................ 30
SECTION 4.16. Insolvency.............................................................. 30
SECTION 4.17. Year 2000 Issues........................................................ 30
ARTICLE V
COVENANTS........................................................................ 30
SECTION 5.01. Information............................................................. 30
SECTION 5.02. Inspection of Property, Books and Records............................... 32
SECTION 5.03. Year 2000 Issues........................................................ 32
SECTION 5.04. Debt to Capitalization Ratio............................................ 33
SECTION 5.05. Debt to EBITDA Ratio.................................................... 33
SECTION 5.06. Restricted Payments..................................................... 33
SECTION 5.07. Investments............................................................. 33
SECTION 5.08. Negative Pledge......................................................... 33
SECTION 5.09. Maintenance of Existence................................................ 34
SECTION 5.10. Dissolution............................................................. 34
SECTION 5.11. Consolidations, Mergers and Sales of Assets............................. 35
(iii)
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SECTION 5.12. Use of Proceeds.......................................................... 35
SECTION 5.13. Compliance with Laws; Payment of Taxes................................... 35
SECTION 5.14. Insurance................................................................ 36
SECTION 5.15. Change in Fiscal Year.................................................... 36
SECTION 5.16. Maintenance of Property.................................................. 36
SECTION 5.17. Environmental Notices.................................................... 36
SECTION 5.18. Environmental Matters.................................................... 36
SECTION 5.19. Environmental Release.................................................... 36
SECTION 5.20. Debt of Subsidiaries..................................................... 36
ARTICLE VI
DEFAULTS.......................................................................... 37
SECTION 6.01. Events of Default........................................................ 37
ARTICLE VII
CHANGE IN CIRCUMSTANCES; COMPENSATION............................................. 39
SECTION 7.01. Basis for Determining Interest Rate Inadequate or Unfair................. 39
SECTION 7.02. Illegality............................................................... 40
SECTION 7.03. Increased Cost and Reduced Return........................................ 40
SECTION 7.04. Base Rate Loans Substituted for Euro-Dollar Loans........................ 42
SECTION 7.05. Compensation............................................................. 42
SECTION 7.06. Replacement of Banks..................................................... 43
(iv)
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ARTICLE VIII
MISCELLANEOUS..................................................................... 43
SECTION 8.01. Notices.................................................................. 43
SECTION 8.02. No Waivers............................................................... 43
SECTION 8.03. Expenses; Documentary Taxes.............................................. 44
SECTION 8.04. Indemnification.......................................................... 44
SECTION 8.05. Sharing of Setoffs....................................................... 44
SECTION 8.06. Amendments and Waivers................................................... 45
SECTION 8.07. No Margin Stock Collateral............................................... 45
SECTION 8.08. Successors and Assigns................................................... 45
SECTION 8.09. Confidentiality.......................................................... 47
SECTION 8.10. Representation by Banks.................................................. 47
SECTION 8.11. Obligations Several...................................................... 47
SECTION 8.12. Georgia Law.............................................................. 48
SECTION 8.13. Interpretation........................................................... 48
SECTION 8.14. WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION............................ 48
SECTION 8.15. Counterparts............................................................. 48
(v)
EXHIBIT A Form of Note
EXHIBIT B Form of Opinion of Counsel for the Borrower
EXHIBIT C Form of Assignment and Acceptance
EXHIBIT D Form of Notice of Borrowing
EXHIBIT E Form of Compliance Certificate
Schedule 4.05 Litigation
Schedule 4.08 Subsidiaries
(vi)
FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIFTH AMENDED AND RESTATED CREDIT AGREEMENT dated as of November
23, 1999, among MOHAWK INDUSTRIES, INC., FIRST UNION NATIONAL BANK, SUNTRUST
BANK, ATLANTA, WACHOVIA BANK, N.A., and the other Banks from time to time party
hereto. This Agreement is an amendment and restatement of that certain Fourth
Amended and Restated Credit Agreement, dated as of January 28, 1999 (as amended
and in effect immediately prior to the date hereof, the "Original Credit
Agreement"; as amended and restated hereby, the "Agreement").
The parties hereto agree that the Original Credit Agreement is hereby
amended, restated and superceded in its entirety as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The terms as defined in this Section 1.01
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shall, for all purposes of this Agreement and any amendment hereto (except as
herein otherwise expressly provided or unless the context otherwise requires),
have the meanings set forth herein:
"Adjusted London Interbank Offered Rate" has the meaning set forth in
Section 2.05(c).
"Affected Bank" has the meaning set forth in Section 7.06.
"Affiliate" means (i) any Person that directly, or indirectly through
one or more intermediaries, controls the Borrower (a "Controlling Person"), (ii)
any Person (other than the Borrower or a Subsidiary) which is controlled by or
is under common control with a Controlling Person, or (iii) any Person (other
than a Subsidiary) of which the Borrower owns, directly or indirectly, 20% or
more of the common stock or equivalent equity interests. As used herein, the
term "control" means possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.
"Agreement" means this Fifth Amended and Restated Credit Agreement,
together with all amendments and modifications hereto.
"Aladdin" means Aladdin Manufacturing Corporation, a Delaware
corporation.
"Amortization" means for any period the sum of all amortization
expenses of the Borrower and its Consolidated Subsidiaries for such period, as
determined in accordance with GAAP.
"Applicant" means each Person which, as the initial applicant or a
Person that has assumed, pursuant to a written agreement in a form reasonably
acceptable to the Required Banks, the obligations of an applicant, is liable for
the reimbursement obligations with respect to a Letter of Credit.
"Applicable Margin" has the meaning set forth in Section 2.05(a).
"Approved Investment" means an Investment in compliance with the
Investment Guidelines.
"Asset Securitization" means the sale of accounts receivable and
related assets of a Person in connection with a bona fide asset securitization
program.
"Assignee" has the meaning set forth in Section 8.08(c).
"Assignment and Acceptance" means an Assignment and Acceptance
executed in accordance with Section 8.08(c) in the form of Exhibit C.
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"Authority" has the meaning set forth in Section 7.02.
"Banks" collectively means First Union, SunTrust, Wachovia, and the
other Banks from time to time party hereto.
"Base Rate" means that interest rate as denominated and publicly
announced by Wachovia from time to time as its "prime rate". The Base Rate is
but one of several interest rate bases used by Wachovia. Each of Wachovia,
First Union and SunTrust lends at interest rates above and below the Base Rate.
"Base Rate Loan" means a Loan to be made as a Base Rate Loan pursuant
to the applicable Notice of Borrowing, Section 2.02(f), or Article VII, as
applicable.
"Borrower" means Mohawk Industries, Inc., a Delaware corporation, and
its successors and assigns.
"Borrowing" means a borrowing hereunder consisting of Loans made to
the Borrower at the same time by the Banks pursuant to Article II. A Borrowing
is a "Base Rate Borrowing" if such Loans are Base Rate Loans or a "Euro-Dollar
Borrowing" if such Loans are Euro-Dollar Loans.
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"Capital Stock" means any nonredeemable capital stock of the Borrower
or any Consolidated Subsidiary (to the extent issued to a Person other than the
Borrower), whether common or preferred.
"Catoosa Co. IRB" means that issuance of certain bonds by The
Development Authority of Catoosa County, Georgia, pursuant to the terms and
conditions set forth in that certain Indenture of Trust dated as of November 1,
1991.
"CERCLA" means the Comprehensive Environmental Response Compensation
and Liability Act, 42 U.S.C. (S) 9601 et. seq. and its implementing regulations
and amendments.
"CERCLIS" means the Comprehensive Environmental Response Compensation
and Liability Inventory System established pursuant to CERCLA.
"Change of Law" shall have the meaning set forth in Section 7.02.
"Closing Date" means November 23, 1999.
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor Federal tax code.
"Commitment" means, with respect to each Bank, the amount set forth
opposite the name of such Bank in the signature pages hereof as its Commitment,
or in the Assignment and Acceptance by which such Bank became a party hereto, as
such amount may be reduced from time to time pursuant to Sections 2.07 and 2.08.
"Compliance Certificate" has the meaning set forth in Section 5.01(c).
"Consolidated Debt" means at any date the Debt of the Borrower and its
Consolidated Subsidiaries, determined on a consolidated basis as of such date.
"Consolidated Interest Expense" for any period means interest, whether
expensed or capitalized, in respect of Debt of the Borrower or any of its
Consolidated Subsidiaries outstanding during such period.
"Consolidated Lease Expense" for any period means all rental payments,
paid or accrued during such period, of the Borrower and its Consolidated
Subsidiaries under all operating leases and rental agreements.
"Consolidated Net Income" means, for any period, the Net Income of the
Borrower and its Consolidated Subsidiaries for such period determined on a
consolidated basis, but excluding (i) extraordinary items and (ii) any equity
interests of the Borrower or any Subsidiary in the unremitted earnings of any
Person that is not a Subsidiary.
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"Consolidated Net Worth" means at any time Stockholder's Equity.
Notwithstanding the foregoing, the Banks hereby agree that the Financial
Accounting Standards Board Statement of Financial Accounting Standards No. 121
("FAS 121") relating to, among other things, the accounting for the impairment
of long-lived assets, and its effect upon the consolidated financial statements
of the Borrower as of and for the Fiscal Year ended December 31, 1996, shall be
disregarded for the purposes of determining Stockholders' Equity, provided that
any charge against income for the Fiscal Year ended December 31, 1996, resulting
from the impairment of long-lived assets not exceed $2,000,000. In addition, the
Banks agree that the effect of that certain non-recurring $4,000,000 charge,
incurred by Borrower during the fourth Fiscal Quarter of 1995 as a result of
income tax reimbursements made to certain executives of Borrower relating to
their exercise of certain stock options, shall be disregarded when determining
Stockholders' Equity.
"Consolidated Operating Profits" means, for any period, the Operating
Profits of the Borrower and its Consolidated Subsidiaries during such period.
"Consolidated Subsidiary" means at any date any Subsidiary or other
entity the accounts of which, in accordance with GAAP, would be consolidated
with those of the Borrower in its consolidated financial statements as of such
date.
"Consolidated Total Assets" means, at any time, (x) the total assets
of the Borrower and its Consolidated Subsidiaries, determined on a consolidated
basis, as set forth or reflected on the most recent consolidated balance sheet
of the Borrower and its Consolidated Subsidiaries, prepared in accordance with
GAAP, plus (y) the accounts receivable balance reported as of the last day of
the calendar month most recently ended by the Borrower or a Subsidiary with
respect to an Asset Securitization.
"Consolidated Total Capital" means, at any time, the sum of the
following as of such time (i) Consolidated Net Worth, and (ii) Consolidated
Debt.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower, are treated as a single
employer under Section 414 of the Code.
"Debt" of any Person means at any date, without duplication, all of
the following as of such date (i) all obligations of such Person for borrowed
money, (ii) all obligations of such Person evidenced by bonds, debentures, notes
or other similar instruments, (iii) all obligations of such Person to pay the
deferred purchase price of property or services, except trade accounts payable
arising in the ordinary course of business, (iv) all obligations of such Person
as lessee under capital leases, (v) all obligations of such Person to reimburse
any bank or other Person in respect of amounts payable under a banker's
acceptance, (vi) all Redeemable Preferred Stock of such Person (in the event
such Person is a corporation), (vii) all obligations of such Person to reimburse
any bank or other Person in respect of amounts paid under a letter of credit or
similar
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instrument, (viii) all Debt of others secured by a Lien on any asset of
such Person, whether or not such Debt is assumed by such Person, (ix) all Debt
of others Guaranteed by such Person, and (x) the total accounts receivable
reported as sold as of the last day of the calendar month most recently ended by
the Borrower or a Subsidiary with respect to an Asset Securitization. For all
purposes of this Agreement, the amount of a Person's Debt under a loan or lease
agreement between such Person and a governmental agency that has issued
industrial development bonds or similar instruments, the repayment of which is
secured by the payment obligations of such Person under such loan or lease
agreement, shall be equal to the aggregate principal amount of such bonds or
instruments outstanding at the time of determination less the amount of proceeds
of such bonds or instruments which at such time are on deposit with a trustee or
other fiduciary in a "construction" fund, or other similar fund which would be
available to such trustee or other fiduciary to repay the bonds or other
instruments if then due and payable.
"Debt to Capitalization Ratio" means the ratio of Consolidated Debt to
Consolidated Total Capital.
"Default" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"Default Rate" means, with respect to any Loan, on any day, the sum of
2% plus the then highest interest rate (including the Applicable Margin) which
may be applicable to any Loans hereunder, including, without limitation, under
Section 7.06, (irrespective of whether any such class of Loans are actually
outstanding hereunder).
"Depreciation" means for any period the sum of all depreciation
expenses of the Borrower and its Consolidated Subsidiaries for such period, as
determined in accordance with GAAP.
"Dividends" means for any period the sum of all dividends paid or
declared during such period in respect of any Capital Stock and Redeemable
Preferred Stock (other than dividends paid or payable in the form of additional
Capital Stock).
"Dollars" or "$" means dollars in lawful currency of the United States
of America.
"Domestic Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in Georgia are authorized by law to close.
"Environmental Authorizations" means all licenses, permits, orders,
approvals, notices, registrations or other legal prerequisites for conducting
the business of either the Borrower or any Subsidiary required by any
Environmental Requirement.
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"Environmental Authority" means any foreign, federal, state, local or
regional government that exercises any form of jurisdiction or authority under
any Environmental Requirement.
"Environmental Judgments and Orders" means all judgments, decrees or
orders arising from or in any way associated with any Environmental
Requirements, whether or not entered upon consent or written agreements with an
Environmental Authority or other entity arising from or in any way associated
with any Environmental Requirement, whether or not incorporated in a judgment,
decree or order.
"Environmental Liabilities" means any liabilities, whether pending or,
to the knowledge of the Borrower or any Subsidiary threatened, arising from and
in any way associated with any Environmental Requirements and which would have
or create a reasonable possibility of causing a Material Adverse Effect.
"Environmental Notices" means notice from any Environmental Authority
or by any other person or entity, of possible or alleged noncompliance with or
liability under any Environmental Requirement, including without limitation any
complaints, citations, demands or requests from any Environmental Authority or
from any other person or entity for correction of any, violation of any
Environmental Requirement or any investigations concerning any violation of any
Environmental Requirement.
"Environmental Proceedings" means any judicial or administrative
proceedings arising from or in any way associated with any Environmental
Requirement.
"Environmental Releases" means releases as defined in CERCLA or under
any applicable state or local environmental law or regulation.
"Environmental Requirements" means any legal requirement relating to
health, safety or the environment and applicable to any of the Borrower, any
Subsidiary, or the Properties, including but not limited to any such requirement
under CERCLA or similar state legislation and all federal, state and local laws,
ordinances, regulations, orders, writs, decrees and common law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, or any successor law. Any reference to any provision
of ERISA shall also be deemed to be a reference to any successor provision or
provisions thereof.
"Euro-Dollar Business Day" means any Domestic Business Day on which
dealings in Dollar deposits are carried out in the London interbank market.
"Euro-Dollar Loan" means a Loan to be made as a Euro-Dollar Loan
pursuant to the applicable Notice of Borrowing.
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"Euro-Dollar Reserve Percentage" has the meaning set forth in Section
2.05(c).
"Event of Default" has the meaning set forth in Section 6.01.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to the next higher 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day, provided that (i) if the day for which such rate is to be
determined 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 (ii) if such rate is not so
published for any day, the Federal Funds Rate for such day shall be the average
rate charged to Wachovia on such day on such transactions, as determined by
Wachovia.
"First Union" means First Union National Bank, a national banking
association, and its successors and, as the context requires, its permitted
assigns.
"First Union Letter of Credit" means that certain irrevocable direct-
pay letter of credit issued by First Union, on behalf of Image Industries, Inc.,
as Applicant, dated as of September 17, 1997, designated as no. S130879, for the
benefit of Reliance Trust Company, as trustee under the Summerville City IRB.
"Fiscal Quarter" means any fiscal quarter of the Borrower.
"Fiscal Year" means any fiscal year of the Borrower.
"GAAP" means generally accepted accounting principles applied on a
basis consistent with those which, in accordance with Section 1.02, are to be
used in making the calculations for purposes of determining compliance with the
terms of this Agreement.
"Galaxy" means Galaxy Carpet Mills, Inc., a Delaware corporation,
which corporation was liquidated into the Borrower as successor thereto.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to secure, purchase or pay (or advance or supply funds for the
purchase or payment of) such Debt or other obligation (whether arising by virtue
of partnership arrangements, by agreement to keep-well, to purchase assets,
goods, securities or services, to provide collateral security, to take-or-pay,
or to maintain financial statement conditions or otherwise) or (ii) entered into
for the purpose of assuring in any other manner the obligee of such Debt or
other obligation of the payment thereof or to protect such obligee against loss
in respect
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thereof (in whole or in part), provided that the term Guarantee shall not
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include endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding meaning.
"Hazardous Materials" includes, without limitation, (a) solid or
hazardous waste, as defined in the Resource Conservation and Recovery Act of
1980, 42 U.S.C. (S) 6901 et seq. and its implementing regulations and
amendments, or in any applicable state or local law or regulation, (b)
"hazardous substance", "pollutant", or "contaminant" as defined in CERCLA, or in
any applicable state or local law or regulation, (c) gasoline, or any other
petroleum product or by-product, including, crude oil or any fraction thereof
(d) toxic substances, as defined in the Toxic Substances Control Act of 1976, or
in any applicable state or local law or regulation or (e) insecticides,
fungicides, or rodenticides, as defined in the Federal Insecticide, Fungicide,
and Rodenticide Act of 1975, or in any applicable state or local law or
regulation, as each such Act, statute or regulation may be amended from time to
time.
"Interest Period" means: (1) with respect to each Euro-Dollar
Borrowing, the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the first, second, third or sixth month
thereafter, as the Borrower may elect in the applicable Notice of Borrowing;
provided that:
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(a) any Interest Period (other than an Interest Period determined
pursuant to paragraph (c) below) which would otherwise end on a day which
is not a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in
another calendar month, in which case such Interest Period shall end on the
next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the appropriate subsequent calendar month) shall,
subject to paragraph (c) below, end on the last Euro-Dollar Business Day of
the appropriate subsequent calendar month; and
(c) any Interest Period which begins before the Termination Date and
would otherwise end after the Termination Date shall end on the Termination
Date.
(2) with respect to each Base Rate Borrowing, the period commencing on the date
of such Borrowing and ending 30 days thereafter; provided that:
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(a) any Interest Period (other than an Interest Period determined
pursuant to paragraph (b) below) which would otherwise end on a day which
is not a Domestic Business Day shall be extended to the next succeeding
Domestic Business Day; and
(b) any Interest Period which begins before the Termination Date and
would otherwise end after the Termination Date shall end on the Termination
Date.
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"Investment" means any investment in any Person, whether by means of
purchase or acquisition of obligations or securities of such Person, capital
contribution to such Person, loan or advance to such Person, making of a time
deposit with such Person, Guarantee or assumption of any obligation of such
Person or otherwise.
"Investment Guidelines" means the guidelines for investment of funds
of the Borrower and the Subsidiaries as approved by the Board of Directors of
the Borrower or an authorized executive committee thereof and in effect on the
Closing Date, as modified or supplemented from time to time with the approval of
the Board of Directors of the Borrower or an authorized executive committee.
"Issuer" means either Wachovia or First Union in its capacity as
issuer of a Letter of Credit.
"LC Commitment Percentage" means, with respect to a Bank, the ratio,
expressed as a percentage, of (a) the amount of such Bank's Commitment to (b)
the aggregate amount of the Commitments of all Banks hereunder; provided,
however, that if at the time of determination the Commitments have terminated or
been reduced to zero, the "LC Commitment Percentage" of each Bank shall be the
LC Commitment Percentage of such Bank in effect immediately prior to such
termination or reduction.
"Lending Office" means, as to each Bank, its office located at its
address set forth on the signature pages hereof (or identified on the signature
pages hereof as its Lending Office) or such other office as such Bank may
hereafter designate as its Lending Office by notice to the Borrower.
"Letter of Credit Fee" means a letter of credit fee in an amount equal
to the Applicable Margin for Euro-Dollar Loans multiplied times the average
daily amount of the Letter of Credit Obligations, computed for the actual number
of days elapsed on the basis of a 360 day year.
"Letter of Credit Obligations" shall mean, at any time, the aggregate
unfunded amount of the outstanding Letters of Credit.
"Letter(s) of Credit" means (i) the Wachovia Letter of Credit, and,
(ii) the First Union Letter of Credit.
"Lien" means, with respect to any asset, any mortgage, deed to secure
debt, deed of trust, lien, pledge, charge, security interest, security title,
preferential arrangement, which has the practical effect of constituting a
security interest or encumbrance, or encumbrance or servitude of any kind in
respect of such asset to secure or assure payment of a Debt or a Guarantee,
whether by consensual agreement or by operation of statute or other law. For
the purposes of this Agreement, the Borrower or any Subsidiary shall be deemed
to own subject to a
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Lien any asset which it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, capital lease or other
title retention agreement relating to such asset.
"Loan" means a Base Rate Loan or a Euro-Dollar Loan and "Loans" means
Base Rate Loans or Euro-Dollar Loans, or either or each of them, as the context
shall require.
"Loan Documents" means this Agreement, the Notes, and any other
document evidencing, relating to or securing the Loans, and any other document
or instrument delivered in connection with this Agreement, the Notes or the
Loans, as such documents and instruments may be amended or modified from time to
time.
"London Interbank Offered Rate" has the meaning set forth in Section
2.05(c).
"Margin Stock" means "margin stock" as defined in Regulations T, U or
X.
"Material Adverse Effect" means, with respect to any event, act,
condition or occurrence of whatever nature (including any adverse determination
in any litigation, arbitration, or governmental investigation or proceeding),
whether singly or in conjunction with any other event or events, act or acts,
condition or conditions, occurrence or occurrences, whether or not related, a
material adverse change in, or a material adverse effect upon, any of (a) the
financial condition, operations, business, properties or prospects of the
Borrower and its Consolidated Subsidiaries taken as a whole, (b) the rights and
remedies of the Banks under the Loan Documents, or the ability of the Borrower
to perform its obligations under the Loan Documents to which it is a party, as
applicable, or (c) the legality, validity or enforceability of any Loan
Document.
"Material Subsidiary" means, as of the date of any determination
thereof, any Subsidiary that either: (a) owns assets having a book value equal
to or greater than 5.0% of Consolidated Total Assets, or (b) had Net Income for
any prior period of four consecutive Fiscal Quarters equal to or greater than
5.0% of Consolidated Net Income for the same four Fiscal Quarter period.
"Multiemployer Plan" shall have the meaning set forth in Section
4001(a)(3) of ERISA.
"Net Income" means, as applied to any Person for any period, the
aggregate amount of net income of such Person, after taxes, for such period, as
determined in accordance with GAAP.
"Notes" means the promissory notes of the Borrower, substantially in
the form of Exhibit A, evidencing the obligation of the Borrower to repay the
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Loans, together with all amendments, consolidations, modifications, renewals,
and supplements thereto.
10
"Notice of Borrowing" has the meaning set forth in Section 2.02.
"Operating Profits" means, as applied to any Person for any period,
the operating income of such Person for such period, as determined in accordance
with GAAP.
"Original Credit Agreement" has the meaning set forth in the preamble
to this Agreement.
"Participant" has the meaning set forth in Section 8.08(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Performance Pricing Determination Date" has the meaning set forth in
Section 2.05(a).
"Permitted Acquisition" means a non-hostile acquisition, however
structured, of all or substantially all of the assets of, or a majority of all
the issued and outstanding capital stock of, a Person in a Permitted Line or
Business.
"Permitted Line of Business" means the manufacturing, marketing and/or
distribution of commercial or home furnishings and floor coverings and other
reasonably related products and any "vertical integration" with respect thereto.
"Person" means an individual, a corporation, a partnership, an
unincorporated association, joint venture, limited liability company, a trust or
any other entity or organization, including, but not limited to, a government or
political subdivision or an agency or instrumentality thereof.
"Plan" means at any time an employee pension benefit plan which is
covered by Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code and is either (i) maintained by a member of the
Controlled Group for employees of any member of the Controlled Group or (ii)
maintained pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes contributions and to which
a member of the Controlled Group is then making or accruing an obligation to
make contributions or has within the preceding five plan years made
contributions.
"Properties" means all real property owned, leased or otherwise used
or occupied by the Borrower or any Subsidiary (including, without limitation,
the Borrower), wherever located.
"Redeemable Preferred Stock" of any Person means any preferred stock
issued by such Person which is at any time prior to the Termination Date either
(i) mandatorily redeemable
11
(by sinking fund or similar payments or otherwise) or (ii) redeemable at the
option of the holder thereof.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.
"Regulation T" means Regulation T of the Board of Governors of the
Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.
"Regulation X" means Regulation X of the Board of Governors of the
Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.
"Reimbursement Agreement" means each reimbursement agreement executed
and delivered by an Applicant with respect to a Letter of Credit, as amended
from time to time.
"Related Fund" means, with respect to any Bank, a special purpose
entity that purchases or participates in such Bank's loans and for which such
Bank is agent, advisor or manager for such special purpose entity.
"Replacement Bank" has the meaning set forth in Section 7.06.
"Required Banks" means at any time Banks having at least 70% of the
aggregate amount of the Commitments, or if the Commitments are no longer in
effect, holding at least 70% of the aggregate outstanding principal amount of
the Notes.
"Restricted Payment" means (i) any dividend or other distribution on
any shares of the Borrower's capital stock (except dividends payable solely in
shares of its capital stock) or (ii) any payment on account of the purchase,
redemption, retirement or acquisition of (a) any shares of the Borrower's
capital stock (except shares acquired upon the conversion thereof into other
shares of its capital stock) or (b) any option, warrant or other right to
acquire shares of the Borrower's capital stock.
"Stockholders' Equity" means, at any time, the stockholders' equity of
the Borrower and its Consolidated Subsidiaries, as set forth or reflected on the
most recent consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries prepared in accordance with GAAP, but excluding any Redeemable
--- ---------
Preferred Stock of the Borrower or any
12
of its Consolidated Subsidiaries. Shareholders' equity generally would include,
but not be limited to, (i) the par or stated value of all outstanding Capital
Stock, (ii) capital surplus, (iii) retained earnings, and (iv) various
deductions such as (A) purchases of treasury stock, (B) valuation allowances,
(C) receivables due from an employee stock ownership plan, (D) employee stock
ownership plan debt guarantees, and (E) foreign currency translation
adjustments.
"Subsidiary" means any corporation or other entity of which securities
or other ownership interests having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions are at the
time directly or indirectly owned by the Borrower.
"Summerville City IRB" means that issuance of certain bonds by The
Development Authority of the City of Summerville, Georgia, pursuant to the terms
and conditions set forth in that certain Trust Indenture dated as of September
1, 1997.
"SunTrust" means SunTrust Bank, Atlanta, a Georgia state banking
corporation, and its successors and, as the context requires, its permitted
assigns.
"Termination Date" means January 28, 2004.
"Third Parties" means all lessees, sublessees, licensees and other
users of the Properties, excluding those users of the Properties in the ordinary
course of the Borrower's business and on a temporary basis.
"Transferee" has the meaning set forth in Section 8.08(d).
"Unused Commitment" means at any date, with respect to any Bank, an
amount equal to its Commitment less the aggregate outstanding principal amount
of its Loans.
"Wachovia" means Wachovia Bank, N.A., a national banking association,
and its successors and, as the context requires, its permitted assigns.
"Wachovia Letter of Credit" means that certain irrevocable direct-pay
letter of credit issued by Wachovia, on behalf of Aladdin, successor by merger
to Galaxy, as Applicant, dated as of January 13, 1995, designated with I.D.
Number LC870-007339, for the benefit of NationsBank of Georgia, N.A., as trustee
under the Industrial Revenue Bond referenced therein.
"Wholly Owned Subsidiary" means any Subsidiary all of the shares of
capital stock or other ownership interests of which (except directors'
qualifying shares) are at the time directly or indirectly owned by the Borrower
or a Consolidated Subsidiary.
"Year 2000 Issues" shall mean the actual and reasonably anticipated
costs, claims, losses, and liabilities associated with the inability of certain
computer applications to handle effectively data that includes dates on and
after January 1, 2000, as such inability in respect of the
13
Borrower or any Subsidiary and in respect of their respective material
customers, suppliers and vendors affects the business, operations, and financial
condition of the Borrower or any Subsidiary.
SECTION 1.02. Accounting Terms and Determinations. Unless otherwise
-----------------------------------
specified herein, all terms of an accounting character used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP, applied on a basis consistent (except for changes
concurred in by the Borrower's independent public accountants or otherwise
required by a change in GAAP) with the most recent audited consolidated
financial statements of the Borrower delivered to the Banks unless with respect
to any such change concurred in by the Borrower's independent public accountants
or required by GAAP, in determining compliance with any of the provisions of
any of the Loan Documents: (i) the Borrower shall have objected to determining
such compliance on such basis at the time of delivery of such financial
statements, or (ii) the Required Banks shall so object in writing within 30 days
after the delivery of such financial statements, in either of which events the
Banks and the Borrower shall negotiate in good faith to resolve any existing
disagreements regarding such calculations, provided, that if such disagreements
are not resolved within 30 days after receipt of a notice of objection, such
calculations shall be made on a basis consistent with those used in the
preparation of the latest financial statements as to which such objection shall
not have been made (which, if objection is made in respect of the first
financial statements delivered under Section 5.01, shall mean the financial
statements referred to in Section 4.04).
SECTION 1.03. References. Unless otherwise indicated, references in
----------
this Agreement to "Articles", "Exhibits", "Schedules", "Sections" and other
Subdivisions are references to Articles, exhibits, schedules, sections and other
subdivisions hereof.
SECTION 1.04. Use of Defined Terms. All terms defined in this
--------------------
Agreement shall have the same defined meanings when used in any of the other
Loan Documents, unless otherwise defined therein or unless the context shall
require otherwise.
SECTION 1.05. Terminology. All personal pronouns used in this
-----------
Agreement, whether used in the masculine, feminine or neuter gender, shall
include all other genders; the singular shall include the plural, and the plural
shall include the singular. Titles of Articles and Sections in this Agreement
are for convenience only, and neither limit nor amplify the provisions of this
Agreement.
14
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Lend. (a) Each Bank severally agrees, on
-------------------
the terms and conditions set forth herein, to make Loans to the Borrower from
time to time before the Termination Date; provided, that, immediately after
-------- ----
each such Loan is made, the aggregate outstanding principal amount of Loans by
such Bank shall not exceed the amount of its Commitment. Each Base Rate
Borrowing under this Section shall be in an aggregate principal amount of
$100,000 or any larger amount (except that any such Borrowing may be in the
aggregate amount of the Unused Commitments) and shall be made from the several
Banks ratably in proportion to their respective Commitments. Each Euro-Dollar
Borrowing under this Section shall be in an aggregate principal amount of
$2,000,000 or any larger multiple of $500,000 and shall be made from the several
Banks ratably in proportion to their respective Commitments. Within the
foregoing limits, the Borrower may borrow under this Section, repay, reborrow,
and to the extent permitted by Section 2.09, prepay Loans, under this Section at
any time before the Termination Date. As of the date of this Agreement, the
outstanding Loans are due and owing in accordance with the terms hereof without
counterclaim, offset or other defense.
(b) Notwithstanding the foregoing Section 2.01(a), in no event shall
the principal amount of all Loans made by any Bank outstanding at any one time
exceed the total amount of such Bank's Commitment minus such Bank's pro rata
-----
share of the Letter of Credit Obligations (whether as issuer or participant).
SECTION 2.02. Method of Borrowing. (a) The Borrower shall give each
-------------------
Bank notice (a "Notice of Borrowing"), which shall be substantially in the form
of Exhibit D, on the same day for each Base Rate Borrowing but, in any case,
---------
prior to 12:00 P.M., and at least 3 Euro-Dollar Business Days before each Euro-
Dollar Borrowing, specifying:
(i) the date of such Borrowing, which shall be a Domestic Business Day
in the case of a Base Rate Borrowing or a Euro-Dollar Business Day in the
case of a Euro-Dollar Borrowing,
(ii) the aggregate amount of such Borrowing,
(iii) whether the Loans comprising such Borrowing are to be Base Rate
Loans or Euro-Dollar Loans, and
(iv) in the case of a Euro-Dollar Borrowing, the duration of the
Interest Period applicable thereto, subject to the provisions of the
definition of Interest Period.
(b) Upon receipt of a Notice of Borrowing by any Bank, such Notice of
Borrowing shall not thereafter be revocable.
15
(c) Not later than 4:00 P.M. (Atlanta, Georgia time) on the date of
each Borrowing, each Bank shall (except as provided in paragraph (d) of this
Section) make available its ratable share of such Borrowing, in Federal or other
funds immediately available in Atlanta, Georgia, to the Borrower at such Bank's
Lending Office.
(d) If any Bank makes a new Loan hereunder on a day on which the
Borrower is to repay all or any part of an outstanding Loan from such Bank, such
Bank shall apply the proceeds of its new Loan to make such repayment and only an
amount equal to the difference (if any) between the amount being borrowed and
the amount being repaid shall be made available by such Bank to the Borrower as
provided in paragraph (c) of this Section, or remitted by the Borrower to such
Bank as provided in Section 2.11, as the case may be.
(e) Notwithstanding anything to the contrary contained in this
Agreement, no Euro-Dollar Borrowing may be made if there shall have occurred a
Default or an Event of Default, which Default or Event of Default shall not have
been cured or waived.
(f) In the event that a Notice of Borrowing fails to specify whether
the Loans comprising such Borrowing are to be Base Rate Loans or Euro-Dollar
Loans, such Loans shall be made as Base Rate Loans. If the Borrower is
otherwise entitled under this Agreement to repay any Loans maturing at the end
of an Interest Period applicable thereto with the proceeds of a new Borrowing,
and the Borrower fails to repay such Loans using its own moneys and fails to
give a Notice of Borrowing in connection with such new Borrowing, a new
Borrowing shall be deemed to be made on the date such Loans mature in an amount
equal to the principal amount of the Loans so maturing, and the Loans comprising
such new Borrowing shall be Base Rate Loans.
(g) Notwithstanding anything to the contrary contained herein, there
shall not be more than 12 interest rates (including the Applicable Margins)
applicable to the Loans at any given time.
SECTION 2.03. Notes. (a) The Loans of each Bank shall be evidenced
-----
by a single Note made by the Borrower payable to the order of such Bank for the
account of its Lending Office in an amount equal to the original principal
amount of such Bank's Commitment.
(b) Each Bank shall record, and prior to any transfer of its Note
shall endorse on the schedule forming a part thereof appropriate notations to
evidence the date, amount and maturity of each Loan made by it, the date and
amount of each payment of principal made by the Borrower with respect thereto
and whether such Loan is a Base Rate Loan or Euro-Dollar Loan, and such schedule
shall constitute rebuttable presumptive evidence of the principal amount owing
and unpaid on such Bank's Note; provided that the failure of any Bank to make
--------
any such recordation or endorsement shall not affect the obligation of the
Borrower hereunder or under the Notes. Each Bank is hereby irrevocably
authorized by the Borrower so to endorse its Note and to attach to and make a
part of its Note a continuation of any such schedule as and when required.
16
SECTION 2.04. Maturity of Loans. Each Loan included in any Borrowing
-----------------
shall mature, and the principal amount thereof shall be due and payable, on the
last day of the Interest Period applicable to such Borrowing (subject to
subsequent refundings thereof) and all Loans shall mature and be due and payable
in full (without further refundings thereof) on the applicable Termination Date.
SECTION 2.05. Interest Rates. (a) "Applicable Margin" means at all
--------------
times:
(i) -1.0% (negative) for all Base Rate Loans outstanding at any time
in an amount less than or equal to $10,000,000.00, and -0.25% (negative)
for all Base Rate Loans outstanding at any time in an amount greater than
$10,000,000.00 (provided, however, in no event shall the amount of (x) the
Applicable Margin for any Base Rate Loan plus the Base Rate, be less than
(y) the higher of (a) the Federal Funds Rate plus one-half of one percent,
or (b) the corresponding amount of the Applicable Margin for any Euro-
Dollar Loan plus the Adjusted London Interbank Offered Rate);
(ii) for the period commencing on the Closing Date to and including
the first Performance Pricing Determination Date, for each Euro-Dollar Loan
0.275%; and
(iii) from and after the first Performance Pricing Determination
Date, for each Euro-Dollar Loan, the percentage determined on each
Performance Pricing Determination Date by reference to the table set forth
below as to such type of Loan and the Debt to Capitalization Ratio for the
quarterly or annual period ending immediately prior to such Performance
Pricing Determination Date.
Debt to
Capitalization
Ratio Applicable Margin
-------------- -----------------
(greater than or equal to) 0.50 to 1.0 0.500%
(greater than or equal to) 0.45 to 1.0 but
(less than) 0.50 to 1.0 0.375%
(greater than or equal to) 0.40 to 1.0 but
(less than) 0.45 to 1.0 0.275%
(greater than or equal to) 0.30 to 1.0 but
(less than) 0.40 to 1.0 0.250%
(less than) 0.30 to 1.0 0.200%
17
In determining interest for purposes of this Section 2.05 and fees for
purposes of Section 2.06, the Borrower and the Banks shall refer to the
Borrower's most recent consolidated quarterly and annual (as the case may be)
financial statements delivered pursuant to Section 5.01(a) or (b), as the case
may be. The "Performance Pricing Determination Date" is the date which is the
last date on which such financial statements are permitted to be delivered
pursuant to Section 5.01(a) or (b), as applicable. Any such required change in
interest and fees shall become effective on such Performance Pricing
Determination Date, and shall be in effect until the next Performance Pricing
Determination Date, provided that no fees or interest shall be decreased
--------
pursuant to this Section 2.05 or Section 2.06 if an Event of Default is in
existence on the Performance Pricing Determination Date.
(b) Each Base Rate Loan shall bear interest on the outstanding
principal amount thereof, for each day from the date such Loan is made until it
becomes due, at a rate per annum equal to the Base Rate for such day plus (or
minus) the Applicable Margin. Such interest shall be payable for each Interest
Period on the last day thereof. Any overdue principal of and, to the extent
permitted by applicable law, overdue interest on any Base Rate Loan shall bear
interest, payable on demand, for each day until paid at a rate per annum equal
to the Default Rate.
(c) Each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for the Interest Period applicable thereto, at a rate
per annum equal to the sum of the Applicable Margin plus the applicable Adjusted
London Interbank Offered Rate for such Interest Period; provided that if any
--------
Euro-Dollar Loan shall, as a result of paragraph (1)(c) of the definition of
Interest Period, have an Interest Period of less than one month, such Euro-
Dollar Loan shall bear interest during such Interest Period at the rate
applicable to Base Rate Loans during such period. Such interest shall be
payable for each Interest Period on the last day thereof and, if such Interest
Period is longer than 3 months, at intervals of 3 months after the first day
thereof. Any overdue principal of and, to the extent permitted by law, overdue
interest on any Euro-Dollar Loan shall bear interest, payable on demand, for
each day until paid at a rate per annum equal to the Default Rate.
The "Adjusted London Interbank Offered Rate" applicable to any
Interest Period means a rate per annum equal to the quotient obtained (rounded
upwards, if necessary, to the next higher 1/100th of 1%) by dividing (i) the
applicable London Interbank Offered Rate for such Interest Period by (ii) 1.00
minus the Euro-Dollar Reserve Percentage.
The "London Interbank Offered Rate" applicable to any Euro-Dollar Loan
means for the Interest Period of such Euro-Dollar Loan, the rate per annum
determined on the basis of the offered rate for deposits in Dollars of amounts
equal or comparable to the principal amount of such Euro-Dollar Loan offered for
a term comparable to such Interest Period, which rates appear on Telerate Page
3750 effective as of 11:00 A.M., London time, 2 Euro-Dollar Business Days prior
to the first day of such Interest Period, provided that (i) if more than one
such offered rate appears on Telerate Page 3750, the "London Interbank Offered
Rate" will be the arithmetic average (rounded upward, if necessary, to the next
higher 1/100th of 1%) of such offered rates;
18
(ii) if no such offered rates appear on such page, the "London Interbank Offered
Rate" for such Interest Period will be the arithmetic average (rounded upward,
if necessary, to the next higher 1/100th of 1%) of rates quoted by not less than
two major banks in New York City, selected by Wachovia, at approximately 10:00
A.M., New York City time, 2 Euro-Dollar Business Days prior to the first day of
such Interest Period, for deposits in Dollars offered to leading European banks
for a period comparable to such Interest Period in an amount comparable to the
principal amount of such Euro-Dollar Loan.
"Euro-Dollar Reserve Percentage" means, with respect to a given Bank,
for any day that percentage (expressed as a decimal) which is in effect on such
day, as prescribed by the Board of Governors of the Federal Reserve System (or
any successor) for determining the actual reserve requirement for such Bank in
respect of "Eurocurrency liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of any Bank to United
States residents). The Adjusted London Interbank Offered Rate shall be adjusted
automatically on and as of the effective date of any change in the Euro-Dollar
Reserve Percentage.
(d) Wachovia shall determine the interest rates applicable to the
Loans hereunder. Wachovia shall give prompt notice to the Borrower and the other
Banks (by telephone or facsimile transmission) of each rate of interest so
determined, and its determination thereof shall be conclusive in the absence of
manifest error.
SECTION 2.06. Fees. (a) The Borrower shall pay to each Bank, for the
----
ratable account of such Bank, a facility fee, calculated in the manner provided
in the last paragraph of Section 2.05(a)(iii), on the aggregate amount of such
Bank's Commitment (without taking into account the amount of the outstanding
Loans made by such Bank), at a rate per annum equal to: (i) for the period
commencing on the Closing Date to and including the first Performance Pricing
Determination Date, 0.20%; and (ii) from and after the first Performance
Pricing Determination Date, the percentage determined on each Performance
Pricing Determination Date by reference to the table set forth below and the
Debt to Capitalization Ratio for the quarterly or annual period ending
immediately prior to such Performance Pricing Determination Date:
Debt to
Capitalization
Ratio Facility Fee
-------------- ------------
(greater than or equal to) 0.45 to 1.0 0.25%
(greater than or equal to) 0.40 to 1.0 but
(less than) 0.45 to 1.0 0.20%
19
(less than) 0.40 to 1.0 0.15%
Such facility fees shall accrue from and including the Closing Date to (but
excluding the Termination Date) and shall be payable on each December 31, March
31, June 30, and September 30 and on the Termination Date.
(b) The Borrower shall pay to each Bank the fees payable to such Bank
as mutually agreed in writing as of the Closing Date.
SECTION 2.07. Optional Termination or Reduction of Commitments. The
------------------------------------------------
Borrower may, upon at least 3 Domestic Business Days' notice to the Banks,
terminate at any time, or proportionately reduce the Unused Commitments from
time to time by an aggregate amount of at least $10,000,000. Upon a reduction
of the Unused Commitments, each Bank's Commitments shall be permanently and
ratably reduced.
SECTION 2.08. Mandatory Reduction and Termination of Commitments. The
--------------------------------------------------
Commitments shall terminate on the Termination Date and any Loans then
outstanding (together with accrued interest thereon) shall be due and payable by
the Borrower on such date.
SECTION 2.09. Optional Prepayments. (a) The Borrower may, upon notice
--------------------
to the Banks on the same day, prepay any Base Rate Borrowing in whole at any
time, or from time to time in part in amounts aggregating at least $100,000 or
any larger amount, by paying the principal amount to be prepaid together with
accrued interest thereon to the date of prepayment.
(b) Subject to Section 7.05, the Borrower may, upon at least 2 Euro-
Dollar Business Days' notice to the Banks, prepay any Euro-Dollar Loan in whole
at any time, or from time to time in part, prior to the maturity thereof, in
amounts aggregating at least $1,000,000 or any larger multiple of $100,000, by
paying the principal amount to be prepaid together with accrued interest thereon
to the date of the prepayment.
(c) Upon any Bank's receipt of a notice of prepayment pursuant to this
Section, such notice shall not thereafter be revocable by the Borrower.
SECTION 2.10. Mandatory Prepayments. On each date on which the
---------------------
Commitments are reduced pursuant to Section 2.07 or Section 2.08, the Borrower
shall repay or prepay such principal amount of the outstanding Loans, if any
(together with interest accrued thereon), as may be necessary so that after such
payment the aggregate unpaid principal amount of the Loans does not exceed the
aggregate amount of the Commitments as then reduced.
SECTION 2.11. General Provisions as to Payments. (a) The Borrower
---------------------------------
shall make each payment of principal of, and interest on, each Bank's Loans and
of each Bank's fees hereunder, not later than 11:00 A.M. (Atlanta, Georgia time)
on the date when due, in Federal or other funds immediately available at the
place where payment is due, to such Bank at its address
20
set forth on the signature pages hereof or at such other address as such Bank
may notify the Borrower in writing from time to time.
(b) Whenever any payment of principal of, or interest on, the Base
Rate Loans or of fees shall be due on a day which is not a Domestic Business
Day, the date for payment thereof shall be extended to the next succeeding
Domestic Business Day. Whenever any payment of principal of or interest on, the
Euro-Dollar Loans shall be due on a day which is not a Euro-Dollar Business Day,
the date for payment thereof shall be extended to the next succeeding Euro-
Dollar Business Day unless such Euro-Dollar Business Day falls in another
calendar month, in which case the date for payment thereof shall be the next
preceding Euro-Dollar Business Day.
SECTION 2.12. Computation of Interest and Fees. Interest on Base Rate
--------------------------------
Loans shall be computed on the basis of a year of 360 days and paid for the
actual number of days elapsed (including the first day but excluding the last
day). Interest on Euro-Dollar Loans shall be computed on the basis of a year of
360 days and paid for the actual number of days elapsed, calculated as to each
Interest Period from and including the first day thereof to but excluding the
last day thereof. Any fees payable hereunder shall be computed on the basis of
a year of 360 days and paid for the actual number of days elapsed (including the
first day but excluding the last day).
SECTION 2.13. Letters of Credit. (a) Subject to the terms and
-----------------
conditions contained in this Agreement, with respect to the Letters of Credit,
the Borrower shall pay to the order of each Issuer the amount of the Letter of
Credit Fee payable with respect to its Letter of Credit (and such Issuer shall
pay to each other Bank such Bank's respective pro rata share thereof) (A) on the
first day of each Fiscal Quarter, (B) on the Termination Date and (C) if there
are any Letter of Credit Obligations on the Termination Date, on the first date
thereafter on which there are no Letter of Credit Obligations, in each case for
the previous period. Any payments made by the Issuers in honoring a draft or
other demand for payment presented in accordance with the terms of the Letters
of Credit shall be deemed to constitute a Borrowing of Base Rate Loans and which
shall be evidenced by the Notes. After the occurrence and during the
continuation of an Event of Default, or upon the termination of this Agreement,
to the extent of any Letter of Credit Obligations, the Issuers may, as separate
collateral security to be held by the Banks for reimbursement of amounts of the
Letter of Credit Obligations which are subsequently funded by an Issuer (and for
which the other Banks have purchased a participation therein as set forth
below), either (x) immediately advance the principal amount thereof as Loans,
and set aside the amounts so advanced as such collateral security, or (y) demand
from the Borrower cash collateral in an amount equal to 100% of such Letter of
Credit Obligations with respect to each Letter of Credit as such collateral
security. The Borrower hereby agrees that the Banks shall have a right of setoff
against and security interest in such collateral reserve. After a Letter of
Credit has been canceled and all Letter of Credit Obligations with respect to
such Letter of Credit have been satisfied, and the Issuer (or participant) has
been reimbursed all amounts funded by the Issuer with respect thereto, any
balance remaining in said collateral reserve with respect to such
21
Letter of Credit may be applied to other unpaid obligations of the Borrower
hereunder, and, if none, shall be remitted to the Borrower.
(b) Purchase of Participations. Each Bank hereby irrevocably and
---------------------------
unconditionally purchases and receives from each Issuer, without recourse or
warranty, an undivided interest and participation, equal to the amount of such
Bank's LC Commitment Percentage in each Letter of Credit issued by such Issuer.
Each Bank acknowledges receipt of a copy of each Letter of Credit.
(c) Sharing of Letters of Credit Payments. In the event that an
--------------------------------------
Issuer makes any payment under a Letter of Credit issued by it for which the
Borrower shall not have repaid such amount to such Issuer pursuant to this
Section, such Issuer shall promptly notify the other Banks of such failure, and
each other Bank shall promptly and unconditionally pay to such Issuer the LC
Commitment Percentage of the amount of such payment in Dollars and in same day
funds. If an Issuer so notifies the other Banks prior to 10:00 A.M. (Atlanta,
Georgia time) on any Domestic Business Day, such other Banks shall make
available to such Issuer the LC Commitment Percentage of the amount of such
payment on such Domestic Business Day in same day funds. If and to the extent
any of such other Banks shall not have so made its LC Commitment Percentage of
the amount of such payment available to such Issuer, such other Bank agrees to
pay to such Issuer forthwith on demand such amount together with interest
thereon, for each day from the date such payment was first due until the date
such amount is paid to such Issuer at the Federal Funds Rate.
(d) Sharing of Reimbursement Obligation Payments. Whenever an Issuer
---------------------------------------------
receives a payment from the Borrower or any guarantor on account of Letter of
Credit Obligations owing in respect of a Letter of Credit issued by such Issuer
including any interest thereon, as to which such Issuer has received any
payments from the other Banks pursuant to this Section, such Issuer shall
promptly pay to each other Bank its participating interest therein, in Dollars
and in the kind of funds so received, an amount equal to such other Bank's LC
Commitment Percentage thereof. Each such payment shall be made by such Issuer on
the Domestic Business Day on which the funds are paid to such Person, if
received prior to 10:00 a.m. (Atlanta, Georgia time) on such Domestic Business
Day, and otherwise on the next succeeding Domestic Business Day. Each Bank
agrees that letter of credit fees (other than the Letter of Credit Fee) payable
under an Issuer's Reimbursement Agreement are solely for the account of such
Issuer, notwithstanding any provision contained herein to the contrary.
(e) Obligations Irrevocable. The obligations of each Bank to make
------------------------
payments to an Issuer with respect to a Letter of Credit shall be irrevocable,
not subject to any qualification or exception whatsoever and shall be made in
accordance with, but not subject to, the terms and conditions of this Agreement
under all circumstances, including, without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability of this Agreement or
any of the other Loan Documents;
22
(ii) the existence of any claim, set-off, defense or other right
which the Borrower may have at any time against a beneficiary named in the
Letters of Credit or any transferee of the Letters of Credit (or any Person
for whom any such transferee may be acting), an Issuer, any Bank or any
other Person, whether in connection with this Agreement, any Letter of
Credit, the transactions contemplated herein or any unrelated transactions;
(iii) any draft, certificate or any other document presented
under a Letter of Credit proves to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Loan Documents;
(v) payment by an Issuer under a 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;
(vi) payment by an Issuer under a Letter of Credit against
presentation of any draft or certificate that does not comply with the
terms of such Letter of Credit, except payment resulting from the gross
negligence or willful misconduct of an Issuer; or
(vii) any other circumstances or happenings whatsoever, whether
or not similar to any of the foregoing, except circumstances or happenings
resulting from the gross negligence or willful misconduct of the Issuer.
(f) Amendments to Letters of Credit and Reimbursement Agreements.
------------------------------------------------------------
Neither Issuer shall agree to an amendment or modification to its Reimbursement
Agreement or Letter of Credit unless the Required Banks have granted their prior
written consent thereto, which consent shall not be unreasonably withheld or
delayed.
SECTION 2.14. Guarantee of Reimbursement Obligations. The following
--------------------------------------
provisions of this Section 2.14 shall apply solely to each Reimbursement
Agreement for which the Borrower is not the Applicant.
(a) The Borrower hereby absolutely and unconditionally, guarantees the
due and punctual payment and performance of the Letter of Credit Obligations.
Upon failure by an Applicant to pay any such amount in accordance with the terms
of its Reimbursement Agreement, the Borrower agrees that it shall forthwith on
demand pay the amount not so paid at the place and in the manner specified in
the Reimbursement Agreement.
23
(b) The obligations of the Borrower under this Section 2.14 shall be
unconditional and absolute and, without limiting the generality of the
foregoing, shall not be released, discharged or otherwise affected by: (i) any
extension, renewal, settlement, compromise, waiver or release in respect of any
obligation of an Applicant under the Reimbursement Agreement, by operation of
law or otherwise or any obligation of any other guarantor of any of the Letter
of Credit Obligations; (ii) any modification or amendment of or supplement to
the Reimbursement Agreement; (iii) any release, nonperfection or invalidity of
any direct or indirect security for any obligation of an Applicant under the
Reimbursement Agreement, or any obligations of any other guarantor of any of the
Letter of Credit Obligations; (iv) any change in the corporate existence,
structure or ownership of an Applicant or any other guarantor of any of the
Letter of Credit Obligations, or any insolvency, bankruptcy, reorganization or
other similar proceeding affecting an Applicant, or any other guarantor of the
Letter of Credit Obligations, or its assets or any resulting release or
discharge of any obligation of an Applicant, or any other guarantor of any of
the Letter of Credit Obligations; (v) the existence of any claim, setoff or
other rights which the Borrower may have at any time against an Applicant, any
other guarantor of any of the Letter of Credit Obligations, any Bank or any
other Person, whether in connection herewith or any unrelated transactions,
provided that nothing herein shall prevent the assertion of any such claim by
separate suit or compulsory counterclaim; (vi) any invalidity or
unenforceability relating to or against an Applicant, or any other guarantor of
any of the Letter of Credit Obligations, for any reason related to the
Reimbursement Agreement, or any other Guaranty, or any provision of applicable
law or regulation purporting to prohibit the payment of the Letter of Credit
Obligations by an Applicant, or any other guarantor of the Letter of Credit
Obligations; and (vii) any other act or omission to act or delay of any kind by
an Applicant, any other guarantor of the Letter of Credit Obligations, any Bank
or any other Person or any other circumstance whatsoever which might, but for
the provisions of this paragraph, constitute a legal or equitable discharge of
the Borrower's obligations hereunder, including without limitation, any failure,
omission, delay or inability on the part of any Bank to enforce, assert or
exercise any right power or remedy conferred on any Bank under the Reimbursement
Agreement or any other Loan Documents.
(c) The Borrower's obligations hereunder shall remain in full force
and effect until all Letter of Credit Obligations shall have been paid in full
and the relevant Reimbursement Agreement shall have terminated or expired. If
at any time any amount payable by an Applicant under a Reimbursement Agreement
or any other Loan Document is rescinded or must be otherwise restored or
returned upon the insolvency, bankruptcy or reorganization of an Applicant or
otherwise, the Borrower's obligations hereunder with respect to such payment
shall be reinstated as though such payment had been due but not made at such
time.
(d) The Borrower irrevocably waives any requirement that at any time
any action be taken by any Person against an Applicant, any other guarantor of
the Letter of Credit Obligations, or any other Person.
SECTION 2.15. Assignments of Loans under Original Credit Agreement;
-----------------------------------------------------
Effective Date. (a) This Agreement shall become effective on December 15, 1999
- --------------
(the "Target
24
Date"), upon compliance by the parties to this Agreement with the conditions
listed in clauses (i) and (ii) in this Section 2.15(a) below before 5:00 p.m.
Atlanta, Georgia, time on the Target Date and with the conditions set forth in
Sections 3.01 and 3.02 (the "Effective Date Conditions") (upon compliance with
the Effective Date Conditions on the Target Date, the Target Date shall be
referred to herein as the "Effective Date"):
(i) SunTrust shall have purchased from Wachovia and Wachovia shall
have assigned, as evidenced by SunTrust's Federal Funds wire transfer in an
amount equal to the Purchase Price in accordance with Wachovia's written
instructions, a 33.3333% interest in and to (terms in quotations in this
clause (i) have the meaning set forth in the Original Credit Agreement):
(A) Wachovia's rights and obligations under the Original Credit Agreement
(exclusive of accrued interest, fees and other amounts earned prior to the
Target Date); (B) the aggregate principal amount of Wachovia's total
"Commitments" equal to $225,000,000, which 33.3333% interest shall be
deemed to equal $75,000,000 (subject to reduction of the Commitments prior
to the Target Date); (C) Wachovia's outstanding "Tranche A Loans" and the
"Tranche A Note"; and (D) Wachovia's outstanding "Tranche B Loans" and the
"Tranche B Note"; and
(ii) SunTrust shall have purchased from First Union and First Union
shall have assigned, as evidenced by SunTrust's Federal Funds wire transfer
in an amount equal to the Purchase Price in accordance with First Union's
written instructions, a 33.3333% interest in and to (terms in quotations in
this clause (ii) have the meaning set forth in the Original Credit
Agreement): (A) First Union's rights and obligations under the Original
Credit Agreement (exclusive of accrued interest, fees and other amounts
earned prior to the Target Date); (B) the aggregate principal amount of
First Union's total "Commitments" equal to $225,000,000, which 33.3333%
interest shall be deemed to equal $75,000,000 (subject to reduction of the
Commitments prior to the Target Date); (C) First Union's outstanding
"Tranche A Loans" and the "Tranche A Note"; and (D) First Union's
outstanding "Tranche B Loans" and the "Tranche B Note."
(b) The parties to this Agreement agree that: (i) the interests in the
Original Credit Agreement and the "Notes" issued thereunder purchased by
SunTrust under Section 2.15(a) are evidenced by this Agreement and no other
instrument is necessary to evidence such purchased interests; (ii) the "Tranche
A Commitments" and "Tranche B Commitments" under the Original Credit Agreement
are hereby replaced in their entirety by the Commitments under this Agreement;
and (iii) the outstanding principal amount of the "Tranche A Loans" and "Tranche
B Loans" held by each Bank under the Original Credit Agreement are hereby
consolidated and shall be evidenced by the Note issued to each Bank in
accordance with the terms of this Agreement.
(c) The "Purchase Price" shall mean, with respect to each of Wachovia and
First Union, the principal amount of the outstanding "Loans" divided by three
under the Original Credit Agreement held by each of Wachovia and First Union on
the Target Date.
25
(d) SunTrust acknowledges and agrees that neither Wachovia nor First Union
(i) has made any representation or warranty or assumed any responsibility with
respect to any statements, warranties or representations made in or in
connection with the Original Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Original
Credit Agreement or any other "Loan Documents" under the Original Credit
Agreement furnished pursuant thereto, other than that (A) it is the legal and
beneficial owner of its interests being purchased by SunTrust pursuant to
Section 2.15(a), (B) such interest is free and clear of any adverse claim, and
(C) its Purchase Price equals the aggregate outstanding principal amount of all
"Loans" under the Original Credit Agreement owed by the Borrower to it as of the
Target Date; and (ii) makes any representation or warranty or assumes any
responsibility with respect to the financial condition of the Borrower or the
performance or observance by the Borrower of any of its obligations under the
Original Credit Agreement or any other instrument or document furnished pursuant
thereto.
(e) Notwithstanding anything contained in this Agreement to the contrary,
in the event that the Effective Date Conditions are not satisfied on the Target
Date, the parties to this Agreement agree that: (i) the Effective Date shall not
have occurred, (ii) this Agreement and the Notes executed and delivered in
connection with this Agreement shall be null and void, and of no force or
effect, and (iii) the Original Credit Agreement and "Notes" issued in connection
therewith shall remain in full force and effect and the Borrower will be deemed
to have ratified and reaffirmed all terms, covenants, conditions and provisions
of the Original Credit Agreement and such "Notes."
ARTICLE III
CONDITIONS TO BORROWINGS
SECTION 3.01. Conditions to Initial Borrowing. The obligations of
-------------------------------
each Bank under this Agreement are subject to the satisfaction of the conditions
set forth in Section 3.02 and receipt by the Banks of the following (in
sufficient number of counterparts (except as to the Notes) for delivery of a
counterpart to each Bank):
(a) from each of the parties hereto a duly executed counterpart of
this Agreement;
(b) a duly executed Note by the Borrower for the account of each Bank
complying with the provisions of Section 2.03;
(c) an opinion of Alston & Bird LLP, counsel for the Borrower, dated
as of the Target Date, substantially in the form of Exhibit B;
---------
26
(d) the Borrower's most recent audited consolidated financial
statements, including, without limitation, a balance sheet and income
statement and its most recent 10-K filed with the Securities and Exchange
Commission, in such form and substance satisfactory to the Banks in their
sole discretion;
(e) a certificate, dated as of the Target Date, signed by a principal
financial officer of the Borrower, to the effect that (i) no Default has
occurred and is continuing on the Target Date and (ii) the representations
and warranties of the Borrower contained in Article IV are true on and as
of the Target Date;
(f) all documents which any Bank may reasonably request relating to
the existence of the Borrower, the corporate authority for and the validity
of the Loan Documents to which the Borrower is a party, and any other
matters relevant thereto, all in form and substance satisfactory to the
Banks, including, without limitation, a certificate of incumbency of the
Borrower, signed by the Secretary or an Assistant Secretary of the
Borrower, certifying as to the names, true signatures and incumbency of the
officer or officers of the Borrower, authorized to execute and deliver the
Loan Documents, and certified copies of the following items as to the
Borrower: (i) its Certificate of Incorporation, (ii) its Bylaws, (iii) a
certificate of the Secretary of State of the State of Delaware as to the
good standing of the Borrower as a Delaware corporation, and (iv) the
action taken by its Board of Directors (or a duly authorized committee
thereof) authorizing its execution, delivery and performance of the Loan
Documents to which it is a party; and
(g) a Notice of Borrowing, if necessary.
SECTION 3.02. Conditions to All Borrowings. The obligation of each
----------------------------
Bank to make a Loan on the occasion of each Borrowing is subject to the
satisfaction of the following conditions:
(a) receipt by the Banks of a Notice of Borrowing;
(b) the fact that, immediately after such Borrowing, no Default shall
have occurred and be continuing;
(c) the fact that the representations and warranties contained in
Article IV of this Agreement shall be true on and as of the date of such
Borrowing except for changes permitted by this Agreement and except to the
extent they relate solely to an earlier date; and
(d) the fact that, immediately after such Borrowing, the sum of (x)
the aggregate outstanding principal amount of the Loans plus the Letter of
Credit Obligations of the Banks will not exceed (y) the amount of the
aggregate Commitments.
27
Each Borrowing hereunder shall be deemed to be a representation and warranty by
the Borrower on the date of such Borrowing as to the facts specified in
paragraphs (b), (c) and (d) of this Section.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 4.01. Corporate Existence and Power. The Borrower is a
-----------------------------
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation, is duly qualified to transact business
in every jurisdiction where, by the nature of its business, such qualification
is necessary and where failure to be so qualified could have or create a
reasonable possibility of causing a Material Adverse Effect, and has all
corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted.
SECTION 4.02. Corporate and Governmental Authorization; No
--------------------------------------------
Contravention. The execution, delivery and performance by the Borrower of this
- -------------
Agreement, the Notes and the other Loan Documents to which it is a party (i) are
within its corporate powers, (ii) have been duly authorized by all necessary
corporate action, (iii) require no action by or in respect of or filing with,
any governmental body, agency or official (other than routine filings with the
Securities and Exchange Commission), (iv) do not contravene, or constitute a
default under, any provision of applicable law or regulation or of the
certificate of incorporation or by-laws of the Borrower or of any agreement,
judgment, injunction, order, decree or other instrument binding upon the
Borrower or any of its Subsidiaries, and (v) do not result in the creation or
imposition of any Lien on any asset of the Borrower or any of its Subsidiaries.
SECTION 4.03. Binding Effect. This Agreement constitutes a valid and
--------------
binding agreement of the Borrower enforceable in accordance with its terms, and
the Notes and the other Loan Documents, when executed and delivered in
accordance with this Agreement, will constitute valid and binding obligations of
the Borrower (provided that the Borrower is a party to any such Loan Document)
enforceable in accordance with their respective terms, provided that the
--------
enforceability hereof and thereof is subject in each case to general principles
of equity and to bankruptcy, insolvency and similar laws affecting the
enforcement of creditors' rights generally.
SECTION 4.04. Financial Information. (a) The consolidated balance
---------------------
sheet of the Borrower and its Consolidated Subsidiaries as of December 31, 1998,
and the related consolidated statements of income, shareholders' equity and cash
flows for the Fiscal Year then ended, reported on by KPMG LLP, copies of which
have been delivered to each of the Banks, and the unaudited consolidated
financial statements of the Borrower for the interim period ended
28
September 30, 1999, copies of which have been delivered to each of the Banks,
fairly present in all material respects, in conformity with GAAP, the
consolidated financial position of the Borrower and its Consolidated
Subsidiaries as of such dates and their consolidated results of operations and
cash flows for such periods stated.
(b) Since December 31, 1998, there has been no event, act, condition
or occurrence having, or which could reasonably be expected to have a Material
Adverse Effect.
SECTION 4.05. No Litigation. Except as set forth on Schedule 4.05, as
-------------
of the date hereof, there is no action, suit or proceeding pending, or to the
knowledge of the Borrower threatened in writing, against or affecting the
Borrower or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official which could reasonably be expected to have
a Material Adverse Effect.
SECTION 4.06. Compliance with ERISA. (a) The Borrower and each member
---------------------
of the Controlled Group have fulfilled their obligations under the minimum
funding standards of ERISA and the Code with respect to each Plan and are in
compliance with the presently applicable provisions of ERISA and the Code
(except where such noncompliance could not reasonably be expected to have a
Material Adverse Effect), and have not incurred any liability to the PBGC under
Title IV of ERISA.
(b) Neither the Borrower nor any member of the Controlled Group is or
ever has been obligated to contribute to any Multiemployer Plan.
SECTION 4.07. Taxes. There have been filed on behalf of the Borrower
-----
and its Subsidiaries all Federal, state and local income, excise, property and
other tax returns which are required to be filed by them and all taxes due
pursuant to such returns or pursuant to any assessment received by or on behalf
of the Borrower or any Subsidiary have been paid or valid and effective
extensions therefor have been obtained. The charges, accruals and reserves on
the books of the Borrower and its Subsidiaries in respect of taxes or other
governmental charges are, in the opinion of the Borrower, adequate. United
States income tax returns of the Borrower and its Subsidiaries' have been
examined and closed through the Fiscal Year ended 1994.
SECTION 4.08. Subsidiaries. Each of the Borrower's Subsidiaries is
------------
duly organized or formed, validly existing and in good standing under the laws
of the jurisdiction of its creation and organization, and has all powers (by
virtue of its creation and organization) and all material governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted. As of the date hereof, the Borrower has no Subsidiaries except for
those Subsidiaries listed on Schedule 4.08, which accurately sets forth each
such Subsidiary's complete name and jurisdiction of creation and organization.
SECTION 4.09. Not an Investment Company. The Borrower is not an
-------------------------
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
29
SECTION 4.10. Ownership of Property; Liens. Each of the Borrower and
----------------------------
its Consolidated Subsidiaries has title to its properties sufficient for the
conduct of its business, and none of such property is subject to any Lien except
as permitted in Section 5.09.
SECTION 4.11. No Default. Neither the Borrower nor any of its
----------
Consolidated Subsidiaries is in default under or with respect to any agreement,
instrument or undertaking to which it is a party or by which it or any of its
property is bound which could reasonably be expected to have or cause a Material
Adverse Effect. No Default or Event of Default has occurred and is continuing.
SECTION 4.12. Full Disclosure. All information heretofore furnished
---------------
by the Borrower to any Bank for purposes of or in connection with this Agreement
or any transaction contemplated hereby is, and all such information hereafter
furnished by the Borrower to any Bank will be, true, accurate and complete in
every material respect or based on reasonable estimates on the date as of which
such information is stated or certified. The Borrower has disclosed to the
Banks in writing any and all facts which would have or create a reasonable
possibility of causing a Material Adverse Effect.
SECTION 4.13. Environmental Matters. To the best knowledge of the
---------------------
Borrower, after due inquiry (which does not necessarily mean the performance of
a phase I environmental audit), (a) neither the Borrower nor any Subsidiary is
subject to any Environmental Liability and (b) neither the Borrower nor any
Subsidiary has been designated as a potentially responsible party under CERCLA
or under any state statute similar to CERCLA. To the best knowledge of the
Borrower, after due inquiry (which does not necessarily mean the performance of
a phase I environmental audit), none of the Properties has been identified on
any current or proposed (i) National Priorities List under 40 C.F.R. Section
300, (ii) CERCLIS list or (iii) any list arising from a state statute similar to
CERCLA.
(b) To the best knowledge of the Borrower, after due inquiry (which
does not necessarily mean the performance of a phase I environmental audit), no
Hazardous Materials have been or are being used, produced, manufactured,
processed, treated, recycled, generated, stored, disposed of, managed or
otherwise handled at, or shipped or transported to or from the Properties or are
otherwise present at, on, in or under the Properties, or, to the best of the
knowledge of the Borrower, at or from any adjacent site or facility, except for
(i) Hazardous Materials, such as cleaning solvents, combustion enhancers,
pesticides and other materials used, produced, manufactured, processed, treated,
recycled, generated, stored, disposed of, managed, or otherwise handled in the
ordinary course of business in compliance with all applicable Environmental
Requirements, and (ii) Hazardous Materials with respect to which the presence
thereof, any required remediation with respect thereto, or the expenses, fines,
penalties and other costs relating thereto could not reasonably be expected to
have a Material Adverse Effect.
(c) Except for non-compliance which could not reasonably be expected
to have a Material Adverse Effect, the Borrower, and each of its Subsidiaries is
in compliance with
30
all Environmental Requirements in connection with the operation of the
Properties and each of the Borrower's and its Subsidiary's respective
businesses.
SECTION 4.14. Capital Stock. All Capital Stock, debentures, bonds,
-------------
notes and all other securities of the Borrower and its Subsidiaries presently
issued and outstanding are validly and properly issued in accordance with all
applicable laws, including but not limited to, the "Blue Sky" laws of all
applicable states and the federal securities laws. At least a majority of the
issued shares of capital stock of each of the Borrower's other Subsidiaries, if
any, (other than Wholly Owned Subsidiaries) is owned by the Borrower free and
clear of any Lien or adverse claim.
SECTION 4.15. Margin Stock. Neither the Borrower nor any of its
------------
Subsidiaries is engaged principally, or as one of its important activities, in
the business of purchasing or carrying any Margin Stock, and no part of the
proceeds of any Loan will be used, except as permitted by Section 5.12, (a) to
purchase or carry any Margin Stock or (b) to extend credit to others for the
purpose of purchasing or carrying any Margin Stock.
SECTION 4.16. Insolvency. After giving effect to the execution and
----------
delivery of the Loan Documents and the making of the Loans under this
Agreement, the Borrower will not be "insolvent," within the meaning of such term
as used in O.C.G.A. (S) 18-2-22 or as defined in (S) 101 of Title 11 of the
United States Code, as amended from time to time, or be unable to pay its debts
generally as such debts become due, or have an unreasonably small capital to
engage in any business or transaction, whether current or contemplated.
SECTION 4.17. Year 2000 Issues. The Borrower and its Subsidiaries
----------------
(i) have initiated a comprehensive review of their computer programs to identify
the systems that could give rise to Year 2000 Issues as the same pertains to the
computer programs and systems of the Borrower and the Subsidiaries (but not
those of their third party customers, suppliers, or vendors), and are in the
process of reviewing their Year 2000 Issues exposure to third party customers,
suppliers and vendors, and evaluating the costs of modifications to program
logic control systems, (ii) have developed or are in the process of developing a
realistic and achievable program for remediating in all material respects all
currently known Year 2000 Issues on a timely basis as such Issues pertain to the
computer programs and systems of the Borrower and its Subsidiaries (but not
those of their third party customers, suppliers, or vendors), and (iii) based on
their review, consultants' reports, and all other information currently
available to them, do not reasonably anticipate that Year 2000 Issues will have
a Material Adverse Effect.
31
ARTICLE V
COVENANTS
32
The Borrower agrees that, so long as any Commitment shall remain in
effect, any Letter of Credit Obligations are outstanding or any amount payable
hereunder or under any Note remains unpaid:
SECTION 5.01. Information. The Borrower will deliver to each of the
-----------
Banks:
(a) as soon as available and in any event within 90 days after the end
of each Fiscal Year, a consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of the end of such Fiscal Year and the related
consolidated statements of earnings, stockholders' equity and cash flows
for such Fiscal Year, setting forth in each case in comparative form the
figures for the previous Fiscal Year, including the related unqualified
audit opinion issued by KPMG LLP or other independent public accountants of
nationally recognized standing, with such certification to be free of
exceptions and qualifications not acceptable to the Required Banks;
(b) as soon as available and in any event within 45 days after the end
of each Fiscal Quarter (other than the fourth Fiscal Quarter), a
consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries as of the end of such Fiscal Quarter and the related
consolidated statements of earnings and statements of cash flows for such
quarter and for the portion of the Fiscal Year ended at the end of such
quarter, setting forth in each case in comparative form the figures for the
corresponding quarter and the corresponding portion of the previous Fiscal
Year, all certified (subject to normal year-end adjustments) as to fairness
of presentation, GAAP (except for the failure to provide footnotes thereto)
and consistency by the chief financial officer or the corporate controller
of the Borrower;
(c) simultaneously with the delivery of each set of financial
statements referred to in paragraphs (a) and (b) above, a certificate,
substantially in the form of Exhibit E (a "Compliance Certificate"), of the
---------
chief financial officer, treasurer or the corporate controller of the
Borrower (i) setting forth in reasonable detail the calculations required
to establish whether the Borrower was in compliance with the requirements
of Sections 5.04, 5.05, and Section 5.08, on the date of such financial
statements and (ii) stating whether any Default exists on the date of such
certificate and, if any Default then exists, setting forth the details
thereof and the action which the Borrower is taking or proposes to take
with respect thereto;
(d) simultaneously with the delivery of each set of annual financial
statements referred to in paragraph (a) above, operations and cash flow
projections (indicating projected earnings and significant cash sources and
uses) prepared by the Borrower for the Fiscal Year following the Fiscal
Year reported on in such statements referred to in paragraph (a), in such
form and substance as is acceptable to the Required Banks, in their sole
discretion;
33
(e) within 1 Domestic Business Day after the Borrower becomes aware of
the occurrence of any Default, telephonic notice to each of the Banks of
the occurrence of a Default (which telephonic notice shall set forth the
details thereof), followed, within 10 Domestic Business Days after the date
of such telephonic notice, with a certificate of the chief financial
officer or the treasurer of the Borrower setting forth the details thereof
and the action which the Borrower is taking or proposes to take with
respect thereto;
(f) promptly upon the mailing thereof to the shareholders of the
Borrower generally, copies of all financial statements, reports and proxy
statements so mailed;
(g) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements
on Form S-8 or its equivalent) and annual, quarterly or monthly reports
which the Borrower shall have filed with the Securities and Exchange
Commission;
(h) if and when any member of the Controlled Group (i) gives or is
required to give notice to the PBGC of any "reportable event" (as defined
in Section 4043 of ERISA) with respect to any Plan which might constitute
grounds for a termination of such Plan under Title IV of ERISA, or knows
that the plan administrator of any Plan has given or is required to give
notice of any such reportable event, a copy of the notice of such
reportable event given or required to be given to the PBGC; (ii) receives
notice of complete or partial withdrawal liability under Title IV of ERISA,
a copy of such notice; or (iii) receives notice from the PBGC under Title
IV of ERISA of an intent to terminate or appoint a trustee to administer
any Plan, a copy of such notice; and
(i) from time to time such additional information regarding the
financial position or business of the Borrower and its Subsidiaries as any
Bank may reasonably request, including, without limitation, consolidating
balance sheets and statements of earnings of the Borrower and the
Borrower's Subsidiaries, in existence at such time, as at the end of any
fiscal period.
SECTION 5.02. Inspection of Property, Books and Records. The Borrower
-----------------------------------------
will (i) keep, and cause each Subsidiary to keep, proper books of record and
account in which full, true and correct entries in conformity with GAAP shall be
made of all dealings and transactions in relation to its business and
activities; and (ii) permit, and cause each Subsidiary to permit,
representatives of any Bank at such Bank's expense prior to the occurrence of a
Default and at the Borrower's expense after the occurrence of a Default to visit
and inspect any of their respective properties, to examine and make abstracts
from any of their respective books and records and to discuss their respective
affairs, finances and accounts with their respective officers, employees and
independent public accountants. The Borrower agrees to cooperate and assist in
such visits and inspections, in each case upon reasonable notice, at such
reasonable times and as often as may reasonably be desired.
34
SECTION 5.03. Year 2000 Issues. The Borrower shall take, and cause its
----------------
Subsidiaries to take, all actions reasonably necessary to assure that the Year
2000 Issues, as such Year 2000 Issues pertain to the computer programs and
systems of the Borrower and its Subsidiaries, will not have a Material Adverse
Effect. The Borrower and its Subsidiaries will use commercially reasonable
efforts to assure that their third-party customers, suppliers and vendors
develop and implement programs to remediate, in all material respects, all Year
2000 Issues reasonably anticipated by Borrower and its Subsidiaries to have a
Material Adverse Effect. Upon written request by the Banks, Borrower will
provide the Banks a written description of its program for assessing Year 2000
Issues, including updates and progress reports. The Borrower will advise the
Banks promptly of any reasonably anticipated Material Adverse Effect as a result
of Year 2000 Issues.
SECTION 5.04. Debt to Capitalization Ratio. The Debt to
----------------------------
Capitalization Ratio shall be less than 0.60 to 1.0 at the end of each Fiscal
Quarter.
SECTION 5.05. Debt to EBITDA Ratio. The ratio of the Borrower's (a)
--------------------
Consolidated Debt to (b) the sum of (i) Consolidated Net Income, (ii)
Consolidated Interest Expense, (iii) taxes on the Borrower's consolidated pre-
tax income, and (iv) Depreciation and Amortization shall not be greater than 3.5
to 1.0 at the end of each Fiscal Quarter. Clause (b) in this Section 5.05 shall
be calculated on a trailing 4 quarter basis as at the end of each such Fiscal
Quarter.
SECTION 5.06. Restricted Payments. The Borrower shall not declare or
-------------------
make any Restricted Payment unless, after giving effect thereto, no Default
shall exist.
SECTION 5.07. Investments. The Borrower will not, and will not permit
-----------
any of its Subsidiaries to, make or maintain any Investments except (a)
Investments in the Borrower or any Subsidiary, including without limitation,
advances or loans between or among the Borrower or any Subsidiary and loans and
advances to officers and employees of the Borrower or any Subsidiary in the
ordinary course of business; (b) Investments in Persons engaged in a Permitted
Line of Business (whether or not such Person is, or after giving effect to any
such Investment becomes, a Subsidiary); (c) Investments in Persons in connection
with Permitted Acquisitions; and (d) Investments in Approved Investments;
provided, however, during the existence of an Event of Default, neither the
Borrower nor any of its Subsidiaries may make any new Investments without the
prior written consent of the Required Banks.
SECTION 5.08. Negative Pledge. Neither the Borrower nor any of its
---------------
Subsidiaries will create, assume or suffer to exist any Lien on any asset now
owned or hereafter acquired by it, except:
(a) Liens existing on the date of this Agreement securing Debt
outstanding on the date of this Agreement in an aggregate principal amount
not exceeding $5,000,000;
35
(b) any Lien existing on any asset of any Person at the time such
Person becomes a Consolidated Subsidiary and not created in contemplation
of such event;
(c) any Lien on any asset securing Debt incurred or assumed for the
purpose of financing all or any part of the cost of acquiring or
constructing such asset, provided that such Lien attaches to such asset
--------
concurrently with or within 18 months after the acquisition or completion
of construction thereof;
(d) any Lien on any asset of any Person existing at the time such
Person is merged or consolidated with or into the Borrower or a
Consolidated Subsidiary and not created in contemplation of such event;
(e) any Lien existing on any asset prior to the acquisition thereof by
the Borrower or a Consolidated Subsidiary and not created in contemplation
of such acquisition;
(f) Liens securing Debt owing by any Subsidiary to the Borrower;
(g) any Lien arising out of the refinancing, extension, renewal or
refunding of any Debt secured by any Lien permitted by any of the foregoing
paragraphs of this Section, provided that (i) such Debt is not secured by
--------
any additional assets, and (ii) the amount of such Debt secured by any such
Lien is not increased;
(h) Liens incidental to the conduct of its business or the ownership
of its assets which (i) do not secure Debt and (ii) do not in the aggregate
materially detract from the value of its assets or materially impair the
use thereof in the operation of its business;
(i) any Lien on Margin Stock;
(j) Liens in connection with an Asset Securitization permitted under
Section 5.11;
(k) Liens involuntarily imposed and being contested in good faith,
subject to the Borrower or such Subsidiary having established reasonable
reserves therefor to the extent required under GAAP;
(l) Liens against the assets of Aladdin (formerly owned by Galaxy)
under the Catoosa Co. IRB solely to the extent existing as of the date
hereof; and
(m) Liens against the assets of Aladdin (formerly owned by Image
Industries, Inc.) under the Summerville City IRB solely to the extent
existing as of the date of the Image Acquisition.
36
provided that Liens permitted by the foregoing paragraphs (a) through (i) shall
- --------
at no time secure Debt in an aggregate amount exceeding the greater of (x)
$90,000,000 or (y) 15% of Consolidated Net Worth.
SECTION 5.09. Maintenance of Existence. Other than as permitted by
------------------------
Section 5.10 or 5.11, the Borrower shall, and shall cause each Subsidiary to,
maintain its corporate existence and carry on its business in a Permitted Line
of Business.
SECTION 5.10. Dissolution. Neither the Borrower nor any of its
-----------
Subsidiaries shall suffer or permit dissolution or liquidation either in whole
or in part or redeem or retire any shares of its own stock or that of any
Subsidiary, except through corporate reorganization to the extent permitted by
Section 5.11 or in connection with a Restricted Payment which is permitted
pursuant to Section 5.06.
SECTION 5.11. Consolidations, Mergers and Sales of Assets. The
-------------------------------------------
Borrower will not, nor will the Borrower permit any Subsidiary to, consolidate
or merge with or into, or sell, lease or otherwise transfer all or any
substantial part of its assets to, any other Person, provided that (a) the
--------
Borrower may merge with another Person if (i) such Person was organized under
the laws of the United States of America or one of its states, (ii) the Borrower
is the corporation surviving such merger and (iii) immediately after giving
effect to such merger, no Default shall have occurred and be continuing, (b)
Subsidiaries of the Borrower may merge with and into the Borrower, any other
Subsidiary, or any other Person if after giving effect thereto such other Person
would be a Subsidiary, (c) assets may be transferred from a Subsidiary to the
Borrower or another Subsidiary, (d) any Wholly-Owned Subsidiary may dissolve or
liquidate so long as the assets of such Subsidiary at the time of such
dissolution or liquidation are transferred to such Subsidiary's shareholder and
such shareholder assumes all of the liabilities of such Subsidiary at the time
of such dissolution or liquidation, (e) the Borrower and its Subsidiaries may
factor receivables, (f) the Borrower and its Subsidiaries may effect Asset
Securitizations, and (g) the foregoing limitation on the sale, lease or other
transfer of assets shall not prohibit, during any Fiscal Quarter, a transfer of
assets by the Borrower or any Subsidiary (in a single transaction or in a series
of related transactions) unless (x) the proceeds thereof are not reinvested
within 180 days thereafter in a Permitted Line of Business owned by the Borrower
or such Subsidiary or (y) the aggregate assets to be so transferred or utilized
in a business line or segment to be so discontinued, when combined with all
other assets transferred, and all other assets utilized in all other business
lines or segments discontinued, during such Fiscal Quarter and the immediately
preceding three Fiscal Quarters, constituted more than 20% of Consolidated Total
Assets at the end of the fourth Fiscal Quarter immediately preceding such Fiscal
Quarter.
SECTION 5.12. Use of Proceeds. The proceeds of the Loans shall be
---------------
used by the Borrower to provide for working capital, to finance capital
expenditures, to finance Investments permitted under Section 5.07, and for the
other general corporate purposes of the Borrower and its Subsidiaries. In no
event shall any portion of the proceeds of the Loans be used by the Borrower
(i) except for Permitted Acquisitions, in connection with any tender offer for,
or other
37
acquisition of, stock of any corporation with a view towards obtaining
control of such other corporation, (ii) directly or indirectly, for the purpose,
whether immediate, incidental or ultimate, of purchasing or carrying any Margin
Stock other than the common stock or other capital stock of the Borrower, or
(iii) for any purpose in violation of any applicable law or regulation.
SECTION 5.13. Compliance with Laws; Payment of Taxes. The Borrower
--------------------------------------
will, and will cause each of its Subsidiaries to, comply in all material
respects with applicable laws (including but not limited to ERISA), regulations
and similar requirements of governmental authorities (including but not limited
to PBGC), except where the necessity of such compliance is being contested in
good faith through appropriate proceedings or where noncompliance would not have
or create a reasonable possibility of causing a Material Adverse Effect. The
Borrower will, and will cause each of its Subsidiaries to, pay promptly when
due, giving regard for any extensions obtained, all taxes, assessments,
governmental charges, claims for labor, supplies, rent and other obligations
which, if unpaid, might become a lien against the property of either the
Borrower or any Subsidiary, except liabilities being contested in good faith and
against which, if requested by the Banks, either the Borrower or such Subsidiary
will set up reserves in accordance with GAAP.
SECTION 5.14. Insurance. The Borrower will maintain, and will cause
---------
each of its Subsidiaries to maintain (either in the name of the Borrower or in
such Subsidiary's own name), with financially sound and reputable insurance
companies, insurance on all its property in at least such amounts and against at
least such risks as are usually insured against in the same general area by
companies of established repute engaged in the same or similar business, subject
to the Borrower's right to self-insure with respect to loss or damage to
property in an amount reasonably acceptable to the Banks.
SECTION 5.15. Change in Fiscal Year. The Borrower shall give the
---------------------
Banks at least 30 day's prior written notice of any change in the determination
of its Fiscal Year.
SECTION 5.16. Maintenance of Property. Subject to the rights of the
-----------------------
Borrower or any Subsidiary to discontinue certain operations under Section 5.10
or 5.11, the Borrower shall, and shall cause each Subsidiary to, maintain all of
its properties and assets in good working order, ordinary wear and tear and
obsolescence excepted (excluding losses due to fully insured, subject to
commercially reasonable deductibles, casualties).
SECTION 5.17. Environmental Notices. The Borrower shall furnish to
---------------------
the Banks prompt written notice of all Environmental Liabilities, pending,
threatened or anticipated Environmental Proceedings, Environmental Notices,
Environmental Judgments and Orders, and Environmental Releases at, on, in, under
or in any way affecting the Properties or any adjacent property which would have
a Material Adverse Effect, and all facts, events, or conditions that could lead
to any of the foregoing.
38
SECTION 5.18. Environmental Matters. The Borrower will not, nor will
---------------------
it permit any Third Party to, use, produce, manufacture, process, treat,
recycle, generate, store, dispose of, manage at, or otherwise handle, or ship or
transport to or from the Properties any Hazardous Materials except for Hazardous
Materials such as cleaning solvents, combustion enhancers, pesticides and other
similar materials used, produced, manufactured, processed, treated, recycled,
generated, stored, disposed, managed, or otherwise handled in the ordinary
course of business in compliance with all applicable Environmental Requirements.
SECTION 5.19. Environmental Release. The Borrower agrees that upon
---------------------
the occurrence of an Environmental Release which would have a Material Adverse
Effect and which violates any Environmental Requirement it will promptly
investigate the extent of, and take appropriate action to remediate such
Environmental Release, whether or not ordered or otherwise directed to do so by
any Environmental Authority.
SECTION 5.20. Debt of Subsidiaries. The Borrower shall not permit any
--------------------
Subsidiary to incur any Debt except for (i) Debt owed by a Subsidiary to the
Borrower or another Subsidiary, (ii) Debt deemed incurred in connection with an
Asset Securitization permitted under Section 5.11; (iii) (A) Debt of
Subsidiaries arising in connection with the Summerville City IRB and the Catoosa
Co. IRB and incurrence of reimbursement obligations with respect to the Letters
of Credit and (B) other Debt of Subsidiaries arising in connection with the
issuance of bonds by governmental authorities so long as such Debt is supported
by a letter of credit issued by a financial institution for the benefit of the
Borrower and the Borrower is obligated to such financial institution under a
reimbursement agreement for the reimbursement of amounts drawn under such letter
of credit; and (iv) in addition to Debt incurred under clauses (i) through (iii)
of this Section, other Debt of Subsidiaries not exceeding in the aggregate
amount outstanding at any time 15% of Consolidated Net Worth.
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default. If one or more of the following
-----------------
events ("Events of Default") shall have occurred and be continuing:
(a) the Borrower shall fail to pay when due any principal or any
interest on any Loan or any fee or other amount payable hereunder within 5
Domestic Business Days after such principal, interest, fee or other amount
shall become due (except at maturity on the applicable Termination Date);
or
(b) the Borrower shall fail to observe or perform any covenant
contained in Sections 5.02(ii), 5.03 through 5.12, inclusive, or 5.20; or
39
(c) the Borrower shall fail to observe or perform any covenant or
agreement contained or incorporated by reference in this Agreement (other
than those covered by paragraph (a) or (b) above) and such failure shall
not have been cured within 30 days after the earlier to occur of (i)
written notice thereof has been given to the Borrower by the Banks or (ii)
the Borrower otherwise becomes aware of any such failure; or
(d) any representation, warranty, certification or statement made by
the Borrower in Article IV of this Agreement or in any certificate,
financial statement or other document delivered pursuant to this Agreement
or any of the other Loan Documents shall prove to have been incorrect or
misleading in any material respect when made (or deemed made); or
(e) the Borrower or any Subsidiary shall fail to make any payment in
respect of Debt in excess of $25,000,000 in the aggregate outstanding
(other than the Notes or pursuant to any of the other Loan Documents) when
due or within any applicable grace period; or
(f) any event or condition shall occur which results in the
acceleration of the maturity of Debt in excess of $25,000,000 in the
aggregate outstanding of the Borrower or any Subsidiary (including, without
limitation, any "put" of such Debt to the Borrower or any Subsidiary) or
enables or, with the giving of notice or lapse of time or both, would
enable, the holders of such Debt or any Person acting on such holders'
behalf to accelerate the maturity thereof (including, without limitation,
any "put" of such Debt to the Borrower or any Subsidiary); or
(g) the Borrower or any Material Subsidiary shall commence a voluntary
case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy, insolvency
or other similar law now or hereafter in effect or seeking the appointment
of a trustee, receiver, liquidator, custodian or other similar official of
it or any substantial part of its property, or shall consent to any such
relief or to the appointment of or taking possession by any such official
in an involuntary case or other proceeding commenced against it, or shall
make a general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due, or shall take any corporate
action to authorize any of the foregoing; or
(h) an involuntary case or other proceeding shall be commenced against
the Borrower or any Material Subsidiary seeking liquidation, reorganization
or other relief with respect to it or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, and such
involuntary case or other proceeding shall remain undismissed and unstayed
for a period of 60 days; or an order for relief shall be entered against
the Borrower or any Material Subsidiary under the federal bankruptcy laws
as now or hereafter in effect; or
40
(i) the Borrower or any member of the Controlled Group shall fail to
pay when due any material amount which it shall have become liable to pay
to the PBGC or to a Plan under Title IV of ERISA; or notice of intent to
terminate a Plan or Plans (other than pursuant to a standard termination)
shall be filed under Title IV of ERISA by the Borrower, any member of the
Controlled Group, any plan administrator or any combination of the
foregoing; or the PBGC shall institute proceedings under Title IV of ERISA
to terminate or to cause a trustee to be appointed to administer any such
Plan or Plans or a proceeding shall be instituted by a fiduciary of any
such Plan or Plans to enforce Section 515 or 4219(c)(5) of ERISA and such
proceeding shall not have been dismissed within 30 days thereafter; or a
condition shall exist by reason of which the PBGC would be entitled to
obtain a decree adjudicating that any such Plan or Plans must be
terminated; or
(j) one or more judgments or orders for the payment of money in an
aggregate amount in excess of $25,000,000 (exclusive of insurance coverage
if any insurer shall have acknowledged such coverage in writing) shall be
rendered against the Borrower or any Material Subsidiary and such judgment
or order shall continue unsatisfied and unstayed for a period of 30 days;
or
(k) one or more federal tax liens securing an aggregate amount in
excess of $5,000,000 shall be filed against the Borrower or any Material
Subsidiary under Section 6323 of the Code or a lien of the PBGC shall be
filed against the Borrower or any Material Subsidiary under Section 4068 of
ERISA and in either case such lien shall remain undischarged for a period
of 25 days after the date of filing; or
(l) (i) any Person or two or more Persons acting in concert shall have
acquired, after February 24, 1995, beneficial ownership (within the meaning
of Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934) of 30% or more of the outstanding shares
of the voting stock of the Borrower; or (ii) as of any date a majority of
the Board of Directors of the Borrower consists of individuals who were not
either (A) directors of the Borrower, as appropriate, as of the
corresponding date of the previous year, (B) selected or nominated to
become directors by the Board of Directors of the Borrower of which a
majority consisted of individuals described in clause (A), or (C) selected
or nominated to become directors by the Board of Directors of the Borrower
of which a majority consisted of individuals described in clause (A) and
individuals described in clause (B); or
(m) an "Event of Default" shall occur under any of the other Loan
Documents; or
(n) (i) any of the Loan Documents shall cease to be enforceable, or
(ii) the Borrower shall assert that any Loan Document shall cease to be
enforceable.
41
then, and in every such event, the Required Banks may (i) by notice to the
Borrower terminate the Commitments or and they shall thereupon terminate, and
(ii) by notice to the Borrower declare the Notes (together with accrued interest
thereon) to be, and the Notes shall thereupon become, immediately due and
payable without presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Borrower together with interest at the Default
Rate accruing on the principal amount thereof from and after the date of such
Event of Default; provided that if any Event of Default specified in paragraph
--------
(g) or (h) above occurs with respect to the Borrower, without any notice to the
Borrower or any other act by the Banks, the Commitments shall thereupon
terminate and the Notes (together with accrued interest thereon) shall become
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Borrower together with
interest thereon at the Default Rate accruing on the principal amount thereof
from and after the date of such Event of Default. Notwithstanding the
foregoing, each of the Banks shall have available to it all other remedies at
law or equity.
ARTICLE VII
CHANGE IN CIRCUMSTANCES; COMPENSATION
SECTION 7.01. Basis for Determining Interest Rate Inadequate or
-------------------------------------------------
Unfair. If on or prior to the first day of any Interest Period:
(a) any Bank determines that deposits in Dollars (in the applicable
amounts) are not being offered in the relevant market for such Interest
Period, or
(b) any Bank determines that the London Interbank Offered Rate, as the
case may be, as determined by Wachovia will not adequately and fairly
reflect the cost to such Bank of funding the relevant Euro-Dollar Loan for
such Interest Period,
such Bank shall forthwith give notice thereof to the Borrower, whereupon until
such Bank notifies the Borrower that the circumstances giving rise to such
suspension no longer exist, the obligations of such Bank to make any Euro-Dollar
Loan specified in such notice shall be suspended. Unless the Borrower notifies
such Bank at least 2 Domestic Business Days before the date of any Borrowing of
such Euro-Dollar Loan for which a Notice of Borrowing has previously been given
that it elects not to borrow on such date, such Borrowing shall instead be made
as a Base Rate Borrowing.
SECTION 7.02. Illegality. If, after the date hereof, the adoption of
----------
any applicable law, rule or regulation, or any change therein, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof (any such agency being referred to as an "Authority" and
any such event being referred to as a "Change of Law"), or compliance by any
42
Bank (or its Lending Office) with any request or directive (whether or not
having the force of law) of any Authority shall make it unlawful or impossible
for any Bank (or its Lending Office) to make, maintain or fund its Euro-Dollar
Loans, such Bank shall forthwith give notice thereof to the Borrower, whereupon
until such Bank notifies the Borrower that the circumstances giving rise to such
suspension no longer exist, the obligation of such Bank to make Euro-Dollar
Loans, shall be suspended. Before giving any notice to the Borrower pursuant to
this Section, such Bank shall designate a different Lending Office if such
designation will avoid the need for giving such notice and will not, in the
judgment of such Bank, be otherwise materially disadvantageous to such Bank.
If such Bank shall determine that it may not lawfully continue to maintain and
fund any of its outstanding Euro-Dollar Loans to maturity and shall so specify
in such notice, the Borrower shall immediately prepay in full the then
outstanding principal amount of each Euro-Dollar Loan of such Bank, together
with accrued interest thereon. Concurrently with prepaying each such Euro-
Dollar Loan, the Borrower shall borrow a Base Rate Loan in an equal principal
amount from such Bank (on which interest and principal shall be payable
contemporaneously with the related Euro-Dollar Loans of the other Banks), and
such Bank shall make such a Base Rate Loan.
SECTION 7.03. Increased Cost and Reduced Return. (a) If after the
---------------------------------
date hereof, a Change of Law or compliance by any Bank (or its Lending Office)
with any request or directive (whether or not having the force of law) of any
Authority:
(i) shall subject any Bank (or its Lending Office) to any tax, duty or
other charge with respect to its Euro-Dollar Loans, its Note or its
obligation to make Euro-Dollar Loans, or shall change the basis of taxation
of payments to any Bank (or its Lending Office) of the principal of or
interest on its Euro-Dollar Loans or any other amounts due under this
Agreement in respect of its Euro-Dollar Loans or its obligation to make
Euro-Dollar Loans (except for changes in the rate of tax on the overall net
income of such Bank or its Lending Office imposed by the jurisdiction in
which such Bank's principal executive office or Lending Office is located);
or
(ii) shall impose, modify or deem applicable any reserve, special
deposit or similar requirement (including, without limitation, any such
requirement imposed by the Board of Governors of the Federal Reserve
System, but excluding with respect to any Euro-Dollar Loan any such
requirement included in an applicable Euro-Dollar Reserve Percentage)
against assets of, deposits with or for the account of, or credit extended
by, any Bank (or its Lending Office); or
(iii) shall impose on any Bank (or its Lending Office) or on the
United States market for certificates of deposit or the London interbank
market any other condition affecting its Euro-Dollar Loans, its Note or its
obligation to make Euro-Dollar Loans;
and the result of any of the foregoing is to increase the cost to such Bank (or
its Lending Office) of making or maintaining any Euro-Dollar Rate Loan, or to
reduce the amount of any sum
43
received or receivable by such Bank (or its Lending Office) under this Agreement
or under its Note with respect thereto, by an amount deemed by such Bank to be
material, then, within 15 days after demand by such Bank, the Borrower shall pay
to such Bank such additional amount or amounts as will compensate such Bank for
such increased cost or reduction.
(b) If any Bank shall have determined that after the date hereof the
adoption of any applicable law, rule or regulation regarding capital adequacy,
or any change therein, or any change in the interpretation or administration
thereof, or compliance by any Bank (or its Lending Office) with any request or
directive regarding capital adequacy (whether or not having the force of law) of
any Authority, has or would have the effect of reducing the rate of return on
such Bank's capital as a consequence of its obligations hereunder to a level
below that which such Bank could have achieved but for such adoption, change or
compliance (taking into consideration such Bank's policies with respect to
capital adequacy) by an amount deemed by such Bank to be material, then from
time to time, within 15 days after demand by such Bank, the Borrower shall pay
to such Bank such additional amount or amounts as will compensate such Bank for
such reduction.
(c) Each Bank will promptly notify the Borrower of any event of which
it has knowledge, occurring after the date hereof, which will entitle such Bank
to compensation pursuant to this Section and will designate a different Lending
Office if such designation will avoid the need for, or reduce the amount of,
such compensation and will not, in the judgment of such Bank, be otherwise
materially disadvantageous to such Bank. A certificate of any Bank claiming
compensation under this Section 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, such Bank may use any reasonable
averaging and attribution methods.
(d) The provisions of this Section 7.03 shall be applicable with
respect to any Participant, Assignee or other Transferee (unless the date of any
such assignment or transfer, a condition listed under Section 7.02 or 7.03
existed with respect to any such Participant, Assignee or other Transferee), and
any calculations required by such provisions shall be made based upon the
circumstances of such Participant, Assignee or other Transferee.
SECTION 7.04. Base Rate Loans Substituted for Euro-Dollar Loans. If
-------------------------------------------------
(i) the obligation of any Bank to make or maintain Euro-Dollar Loans has been
suspended pursuant to Section 7.02 or (ii) any Bank has demanded compensation
under Section 7.03, and the Borrower shall, by at least 5 Euro-Dollar Business
Days' prior notice to such Bank have elected that the provisions of this Section
shall apply to such Bank, then, unless and until such Bank notifies the Borrower
that the circumstances giving rise to such suspension or demand for compensation
no longer apply:
(a) all Loans which would otherwise be made by such Bank as Euro-
Dollar Loans, as the case may be, shall be made instead as Base Rate Loans;
provided, that
44
interest and principal on such Loans shall be payable contemporaneously
with the related Euro-Dollar Loans of the other Bank), and
(b) after each of its Euro-Dollar Loan, has been repaid, all payments
of principal which would otherwise be applied to repay such Euro-Dollar
Loans shall be applied to repay its Base Rate Loans instead.
SECTION 7.05. Compensation. Upon the request of any Bank, the
------------
Borrower shall pay to such Bank such amount or amounts as shall compensate such
Bank for any loss, cost or expense actually incurred by such Bank and not
compensated pursuant to Section 7.03 as a result of:
(a) any payment or prepayment (pursuant to Section 2.09(b), Section
7.02 or otherwise) of a Euro-Dollar Loan on a date other than the last day of an
Interest Period for such Euro-Dollar Loan; or
(b) any failure by the Borrower to prepay a Euro-Dollar Loan on the
date for such prepayment specified in the relevant notice of prepayment
hereunder; or
(c) any failure by the Borrower to borrow a Euro-Dollar Loan on the
date for the Euro-Dollar Borrowing of which such Euro-Dollar Loan is a part
specified in the applicable Notice of Borrowing delivered pursuant to Section
2.02;
such compensation to include, without limitation, an amount equal to the excess,
if any, of (x) the amount of interest which would have accrued on the amount so
paid or prepaid or not prepaid or borrowed for the period from the date of such
payment, prepayment or failure to prepay or borrow to the last day of the then
current Interest Period for such Euro-Dollar Loan (or, in the case of a failure
to prepay or borrow, the Interest Period for such Euro-Dollar Loan which would
have commenced on the date of such failure to prepay or borrow) at the
applicable rate of interest for such Euro-Dollar Loan provided for herein over
(y) the amount of interest (as reasonably determined by such Bank) such Bank
would have paid on deposits in Dollars of comparable amounts having terms
comparable to such period placed with it by leading banks in the London
interbank market.
SECTION 7.06. Replacement of Banks. If any Bank (an "Affected Bank")
--------------------
makes demand for amounts owed under Section 7.03 (other than due to any change
in the Eurodollar Reserve Percentage), or gives notice under Section 7.01 or
7.02 that it can no longer participate in Euro-Dollar Loans, then in each case
the Borrower shall have the right, if no Default or Event of Default exists, and
subject to the terms and conditions set forth in Section 8.08(c), to designate
an Assignee (a "Replacement Bank") to purchase the Affected Bank's share of
outstanding Loans and all other obligations hereunder and to assume the Affected
Bank's obligations to the Borrower under this Agreement; provided, that, any
-------- ----
Replacement Bank must be reasonably acceptable to the Required Banks (and, in
any event, may not be an Affiliate of the Borrower).
45
Subject to the foregoing, the Affected Bank agrees to assign without recourse to
the Replacement Bank its share of outstanding Loans and its Commitment, and to
delegate to the Replacement Bank its obligations to the Borrower under this
Agreement. Upon such sale and delegation by the Affected Bank and the purchase
and assumption by the Replacement Bank, and compliance with the provisions of
Section 8.08(c), the Affected Bank shall cease to be a "Bank" hereunder and the
Replacement Bank shall become a "Bank" under this Agreement; provided, however,
-------- -------
that any Affected Bank shall continue to be entitled to the indemnification
provisions contained elsewhere herein.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Notices. All notices, requests and other communications
-------
to any party hereunder shall be in writing (including bank wire, telecopier or
similar writing) and shall be given to such party at its address or telecopier
number set forth on the signature pages hereof or such other address or
telecopier number as such party may hereafter specify for the purpose by notice
to each other party. Each such notice, request or other communication shall be
effective (i) if given by telecopier, when such telecopy is transmitted to the
telecopier number specified in this Section and the appropriate confirmation is
received, (ii) if given by mail, 72 hours after such communication is deposited
in the mails, certified or registered mail, with first class postage prepaid,
addressed as aforesaid or (iii) if given by any other means, when delivered at
the address specified in this Section; provided, that notices to the Banks under
Article II shall not be effective until received.
SECTION 8.02. No Waivers. No failure or delay by any Bank in
----------
exercising any right, power or privilege hereunder or under its Note shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by law.
SECTION 8.03. Expenses; Documentary Taxes. The Borrower shall pay (i)
---------------------------
all out-of-pocket expenses of the Banks, including reasonable fees and
disbursements actually incurred of special counsel for the Banks in connection
with the preparation of this Agreement and the other Loan Documents, any waiver
or consent hereunder or thereunder or any amendment hereof or thereof or any
Default or alleged Default hereunder or thereunder and (ii) if a Default occurs,
all out-of-pocket expenses incurred by any Bank, including reasonable fees and
disbursements of counsel, actually incurred in connection with such Default and
collection and other enforcement proceedings resulting therefrom, including out-
of-pocket expenses incurred in enforcing this Agreement and the other Loan
Documents. The Borrower shall indemnify each Bank against any transfer taxes,
documentary taxes, assessments or charges made by any Authority by reason of the
execution and delivery of this Agreement or the other Loan
46
Documents but not by reason of any participation or assignment by the Banks,
their successors or assigns.
SECTION 8.04. Indemnification. The Borrower shall indemnify the Banks
---------------
and each affiliate thereof and their respective directors, officers, employees
and agents from, and hold each of them harmless against, any and all losses,
liabilities, claims or damages to which any of them may become subject, insofar
as such losses, liabilities, claims or damages arise out of or result from any
actual or proposed use by the Borrower of the proceeds of any extension of
credit by any Bank hereunder or breach by the Borrower of this Agreement or any
other Loan Document or from any investigation, litigation or other proceeding
(including any threatened investigation or proceeding) relating to the
foregoing, and the Borrower shall reimburse each Bank, and each affiliate
thereof and their respective directors, officers, employees and agents, upon
demand for any expenses (including, without limitation, legal fees) incurred in
connection with any such investigation or proceeding; but excluding any such
losses, liabilities, claims, damages or expenses incurred by reason of the gross
negligence or wilful misconduct of the Person to be indemnified.
SECTION 8.05. Sharing of Setoffs. Each Bank agrees that if it shall,
------------------
by exercising any right of setoff or counterclaim or otherwise, receive payment
of a proportion of the aggregate amount of principal and interest owing with
respect to the Note held by it which is greater than the proportion received by
any other Bank in respect of the aggregate amount of all principal and interest
owing with respect to the Note held by such other Bank, the Bank receiving such
proportionately greater payment shall purchase such participations in the Notes
held by the other Banks owing to such other Banks, and such other adjustments
shall be made, as may be required so that all such payments of principal and
interest with respect to the Note held by the Bank owing to such other Banks
shall be shared by the Banks pro rata; provided that (i) nothing in this Section
--------
shall impair the right of any Bank to exercise any right of setoff or
counterclaim it may have and to apply the amount subject to such exercise to the
payment of indebtedness of the Borrower other than its indebtedness under the
Notes, and (ii) if all or any portion of such payment received by the purchasing
Bank is thereafter recovered from such purchasing Bank, such purchase from such
other Banks shall be rescinded and such other Bank shall repay to the purchasing
Bank the purchase price of such participation to the extent of such recovery
together with an amount equal to such other Banks' ratable share (according to
the proportion of (x) the amount of such other Banks' required repayment to (y)
the total amount so recovered from the purchasing Bank) of any interest or other
amount paid or payable by the purchasing Bank in respect of the total amount so
recovered. The Borrower agrees, to the fullest extent it may effectively do so
under applicable law, that any holder of a participation in a Note, whether or
not acquired pursuant to the foregoing arrangements, may exercise rights of
setoff or counterclaim and other rights with respect to such participation as
fully as if such holder of a participation were a direct creditor of the
Borrower in the amount of such participation.
SECTION 8.06. Amendments and Waivers. (a) Any provision of this
----------------------
Agreement, the Notes or any other Loan Documents may be amended or waived if,
but only if, such
47
amendment or waiver is in writing and is signed by the Borrower and the Required
Banks; provided that, no such amendment or waiver shall, unless signed by all
--------
Banks, (i) change the Commitments of any Bank or subject any Bank to any
additional obligation, (ii) change the principal of or decrease the rate of
interest on any Loan or decrease any fees hereunder, (iii) extend the date fixed
for any payment of principal of or interest on any Loan or any fees hereunder,
(iv) change the amount of principal, interest or fees due on any date fixed for
the payment thereof, (v) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Notes, or the number of Banks, which
shall be required for the Banks or any of them to take any action under this
Section or any other provision of this Agreement, (vi) change the manner of
application of any payments made under this Agreement or the Notes, (vii)
release or substitute all or any substantial part of the collateral (if any)
held as security for the Loans, or (viii) release any Guarantee (if any) given
to support payment of the Loans.
(b) The Borrower will not solicit, request or negotiate for or with
respect to any proposed waiver or amendment of any of the provisions of this
Agreement unless each Bank shall be informed thereof by the Borrower and shall
be afforded an opportunity of considering the same and shall be supplied by the
Borrower with sufficient information to enable it to make an informed decision
with respect thereto. Executed or true and correct copies of any waiver or
consent effected pursuant to the provisions of this Agreement shall be delivered
by the Borrower to each Bank forthwith following the date on which the same
shall have been executed and delivered by the requisite percentage of Banks.
The Borrower will not, directly or indirectly, pay or cause to be paid any
remuneration, whether by way of supplemental or additional interest, fee or
otherwise, to any Bank (in its capacity as such) as consideration for or as an
inducement to the entering into by such Bank of any waiver or amendment of any
of the terms and provisions of this Agreement unless such remuneration is
concurrently paid, on the same terms, ratably to each of the Banks.
SECTION 8.07. No Margin Stock Collateral. Each of the Banks
--------------------------
represents to the other Banks that it in good faith is not, directly or
indirectly (by negative pledge or otherwise), relying upon any Margin Stock as
collateral in the extension or maintenance of the credit provided for in this
Agreement.
SECTION 8.08. 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; provided that the Borrower may not
assign or otherwise transfer any of its rights under this Agreement.
(b) Any Bank may at any time sell to one or more Persons (each a
"Participant") participating interests in any Loan owing to such Bank, its Note,
its Commitment hereunder or any other interest of such Bank hereunder. In the
event of any such sale by a Bank of a participating interest to a Participant,
such Bank's obligations under this Agreement shall remain unchanged, such Bank
shall remain solely responsible for the performance thereof, such Bank shall
remain the holder of any such Note for all purposes under this Agreement, and
the
48
Borrower shall continue to deal solely and directly with such Bank in connection
with such Bank's rights and obligations under this Agreement. In no event shall
a Bank that sells a participation be obligated to the Participant to take or
refrain from taking any action hereunder except that such Bank may agree that it
will not (except as provided below), without the consent of the Participant,
agree to (i) extend any date fixed for the payment of principal of or interest
on the related loan or loans, (ii) the change of the amount of any principal,
interest or fees due on any date fixed for the payment thereof with respect to
the related loan or loans, (iii) the change of the principal of the related loan
or loans, (iv) any decrease in the rate at which either interest is payable
thereon or (if the Participant is entitled to any part thereof) commitment fee
is payable hereunder from the rate at which the Participant is entitled to
receive interest or commitment fee (as the case may be) in respect of such
participation, (v) the release or substitution of all or any substantial part of
the collateral (if any) held as security for the Loans, or (vi) the release of
any Guarantee (if any) given to support payment of the Loans. Unless such
Participant is a Related Fund with respect to such Bank, each Bank selling a
participating interest in any Loan, Note, Commitment or other interest under
this Agreement shall, within 10 Domestic Business Days of such sale, provide the
Borrower and the other Banks with written notification stating that such sale
has occurred and identifying the Participant and the interest purchased by such
Participant. The Borrower agrees that each Participant shall be entitled to the
benefits of Article VII with respect to its participation in Loans outstanding
from time to time.
(c) Any Bank may at any time assign to one or more banks or financial
institutions (each an "Assignee") all, or a proportionate part of all, of its
rights and obligations under this Agreement and the Notes, and such Assignee
shall assume all such rights and obligations, pursuant to an Assignment and
Acceptance in the form attached hereto as Exhibit C, executed by such Assignee
---------
and such transferor Bank; provided that (i) no interest may be sold by a Bank
pursuant to this paragraph (c) unless the Assignee shall agree to assume ratably
equivalent portions of the transferor Bank's Commitment, (ii) the amount of the
Commitment of the assigning Bank subject to such assignment (determined as of
the effective date of the assignment) shall be equal to $10,000,000 (or any
larger multiple of $1,000,000), and (iii) no interest may be sold by a Bank
pursuant to this paragraph (c) to any Assignee that is not then a Bank without
the consent of the Borrower, which shall not be unreasonably withheld or
delayed, and (iv) a Bank may not have more than 2 Assignees that are not then
Banks at any one time. Each Bank agrees to notify the other Banks of any
assignment hereunder. Upon (A) execution of the Assignment and Acceptance by
such transferor Bank, such Assignee, and the Borrower, (B) delivery of an
executed copy of the Assignment and Acceptance to the Borrower, and (C) payment
by such Assignee to such transferor Bank of an amount equal to the purchase
price agreed between such transferor Bank and such Assignee, such Assignee shall
for all purposes be a Bank party to this Agreement and shall have all the rights
and obligations of a Bank under this Agreement to the same extent as if it were
an original party hereto with a Commitment as set forth in such instrument of
assumption, and the transferor Bank shall be released from its obligations
hereunder to a corresponding extent, and no further consent or action by the
Borrower or the Banks shall be required. Upon the consummation of any transfer
to an Assignee pursuant to this
49
paragraph (c), the transferor Bank and the Borrower shall make appropriate
arrangements so that, if required, a new Note is issued to such Assignee.
(d) Subject to the provisions of Section 8.09, the Borrower authorizes
each Bank to disclose to any Participant, Assignee or other transferee (each a
"Transferee") and any prospective Transferee any and all financial information
in such Bank's possession concerning the Borrower which has been delivered to
such Bank by the Borrower pursuant to this Agreement or which has been delivered
to such Bank by the Borrower in connection with such Bank's credit evaluation
prior to entering into this Agreement.
(e) No Transferee shall be entitled to receive any greater payment
under Section 7.03 than the transferor Bank would have been entitled to receive
with respect to the rights transferred, unless such transfer is made with the
Borrower's prior written consent or by reason of the provisions of Section 7.02
or 7.03 requiring such Bank to designate a different Lending Office under
certain circumstances or at a time when the circumstances giving rise to such
greater payment did not exist.
SECTION 8.09. Confidentiality. Each Bank agrees to exercise its best
---------------
efforts to keep any information delivered or made available by the Borrower to
it which is clearly indicated to be confidential information, confidential from
any one other than persons employed or retained by such Bank who are or are
expected to become engaged in evaluating, approving, structuring or
administering the Loans; provided, however that nothing herein shall prevent any
-------- -------
Bank from disclosing such information (i) to any other Bank, (ii) upon the order
of any court or administrative agency, (iii) upon the request or demand of any
regulatory agency or authority having jurisdiction over such Bank, (iv) which
has been publicly disclosed, (v) to the extent reasonably required in connection
with any litigation to which any Bank or its respective Affiliates may be a
party, (vi) to the extent reasonably required in connection with the exercise of
any remedy hereunder, (vii) to such Bank's legal counsel and independent
auditors and (viii) to any actual or proposed Participant, Assignee or other
Transferee of all or part of its rights hereunder which has agreed in writing to
be bound by the provisions of this Section 8.09.
SECTION 8.10. Representation by Banks. Each Bank hereby represents
-----------------------
that it is a commercial lender or financial institution which makes Loans in the
ordinary course of its business and that it will make its Loans hereunder for
its own account in the ordinary course of such business; provided, however that,
-----------------
subject to Section 8.08, the disposition of the Note or Notes held by that Bank
shall at all times be within its exclusive control.
SECTION 8.11. Obligations Several. The obligations of each Bank
-------------------
hereunder are several, and no Bank shall be responsible for the obligations or
commitment of any other Bank hereunder. Nothing contained in this Agreement and
no action taken by Banks pursuant hereto shall be deemed to constitute the Banks
to be a partnership, an association, a joint venture or any other kind of
entity. The amounts payable at any time hereunder to each Bank shall be a
separate
50
and independent debt, and each Bank shall be entitled to protect and
enforce its rights arising out of this Agreement or any other Loan Document,
subject to any restrictions requiring actions to be taken upon the consent of
the Required Banks, and it shall not be necessary for any other Bank to be
joined as an additional party in any proceeding for such purpose.
SECTION 8.12. Georgia Law. This Agreement and each Note shall be
-----------
construed in accordance with and governed by the law of the State of Georgia.
SECTION 8.13. Interpretation. No provision of this Agreement or any
--------------
of the other Loan Documents shall be construed against or interpreted to the
disadvantage of any party hereto by any court or other governmental or judicial
authority by reason of such party having or being deemed to have structured or
dictated such provision.
SECTION 8.14. WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION. TO THE
---------------------------------------------
FULLEST EXTENT PERMITTED BY LAW, THE BORROWER (A) AND EACH OF THE BANKS
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF THIS AGREEMENT, ANY OF THE OTHER LOAN DOCUMENTS, OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, (B) SUBMITS TO THE NONEXCLUSIVE
PERSONAL JURISDICTION IN THE STATE OF GEORGIA, THE COURTS THEREOF AND THE UNITED
STATES DISTRICT COURTS SITTING THEREIN, FOR THE ENFORCEMENT OF THIS AGREEMENT,
THE NOTES AND THE OTHER LOAN DOCUMENTS, (C) WAIVES ANY AND ALL PERSONAL RIGHTS
UNDER THE LAW OF ANY JURISDICTION TO OBJECT ON ANY BASIS (INCLUDING, WITHOUT
LIMITATION, INCONVENIENCE OF FORUM) TO JURISDICTION OR VENUE WITHIN THE STATE OF
GEORGIA FOR THE PURPOSE OF LITIGATION TO ENFORCE THIS AGREEMENT, THE NOTES OR
THE OTHER LOAN DOCUMENTS, AND (D) AGREE THAT SERVICE OF PROCESS MAY BE MADE UPON
IT IN THE MANNER PRESCRIBED IN SECTION 8.01 FOR THE GIVING OF NOTICE TO THE
BORROWER. NOTHING HEREIN CONTAINED, HOWEVER, SHALL PREVENT THE BANKS FROM
BRINGING ANY ACTION OR EXERCISING ANY RIGHTS AGAINST ANY SECURITY AND AGAINST
THE BORROWER PERSONALLY, AND AGAINST ANY ASSETS OF THE BORROWER WITHIN ANY OTHER
STATE OR JURISDICTION.
SECTION 8.15. Counterparts. This Agreement may be signed in any
------------
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument.
51
[signatures on the following pages]
52
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, under seal, by their respective authorized officers as of the
day and year first above written.
MOHAWK INDUSTRIES, INC. (SEAL)
By:
--------------------------------------
Title:
160 South Industrial Boulevard
Calhoun, Georgia 30703-7002
Attention: Chief Financial Officer or Treasurer
Telecopier number: 706-625-3851
Confirmation number: 706-629-7721
53
COMMITMENTS: WACHOVIA BANK, N.A. (SEAL)
- -----------
$150,000,000
By:
--------------------------------------
Title:
Lending Office
--------------
Wachovia Bank, N.A.
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attention: Lanny Nixon
Telecopier number: 404-332-5016
Confirmation number: 404-332-5920
54
FIRST UNION NATIONAL BANK (SEAL)
$150,000,000
By:
---------------------------------------
Title:
Lending Office
--------------
First Union National Bank
301 South College St., DC-5
Charlotte, North Carolina 28288-0737
Attention: David Silander
Telecopier number: 704-374-4793
Confirmation number: 704-383-5124
55
$150,000,000 SUNTRUST BANK, ATLANTA
By:
--------------------------------------
Title:
By:
--------------------------------------
Title:
Lending Office
--------------
SunTrust Bank, Atlanta
303 Peachtree Street, 3rd Floor
Atlanta, Georgia 30308
Telecopier number.: 404-575-2594
Confirmation number: 404-230-5099
Attention: Bradley J. Staples, Director
- -----------------
TOTAL COMMITMENTS:
$450,000,000
56
Exhibit A
---------
NOTE
Atlanta, Georgia
As of November 23, 1999
For value received, MOHAWK INDUSTRIES, INC., a Delaware corporation
(the "Borrower"), promises to pay to the order of , (the
----------------
"Bank"), for the account of its Lending Office, the principal sum of
-----------
MILLION DOLLARS ($ ), or such lesser amount as shall equal the unpaid
------------
principal amount of each Loan made by the Bank to the Borrower pursuant to the
Credit Agreement referred to below, on the dates and in the amounts provided in
the Credit Agreement. The Borrower promises to pay interest on the unpaid
principal amount of this Note on the dates and at the rate or rates provided for
in the Credit Agreement referred to below. Interest on any overdue principal of
and, to the extent permitted by law, overdue interest on the principal amount
hereof shall bear interest at the Default Rate, as provided for in the Credit
Agreement. All such payments of principal and interest shall be made in lawful
money of the United States in Federal or other immediately available funds at
the office of the Bank located at , or such other
----------------------
address as may be specified from time to time pursuant to the Credit Agreement.
All Loans made by the Bank, the respective maturities thereof, the
interest rates from time to time applicable thereto, and all repayments of the
principal thereof shall be recorded by the Bank and, prior to any transfer
hereof, endorsed by the Bank on the schedule attached hereto, or on a
continuation of such schedule attached to and made a part hereof; provided that
--------
the failure of the Bank to make any such recordation or endorsement shall not
affect the obligations of the Borrower hereunder or under the Credit Agreement.
This Note is one of the "Notes" referred to in the Fifth Amended and
Restated Credit Agreement of even date herewith among the Borrower, First Union
National Bank, SunTrust Bank, Atlanta, Wachovia Bank, N.A., and the other banks
from time to time party thereto (as the same may be amended and modified from
time to time, the "Credit Agreement"). Terms defined in the Credit Agreement are
used herein with the same meanings. Reference is made to the Credit Agreement
for provisions for the optional and mandatory prepayment and the repayment
hereof and the acceleration of the maturity hereof.
57
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly
executed, under seal, by its duly authorized officer as of the day and year
first above written.
MOHAWK INDUSTRIES, INC. (SEAL)
By:
--------------------------
Title:
58
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
------------------------------------------------
Date Base Rate or Amount of Amount of Maturity Date Notation
Euro-Dollar Loan Principal Made By
Loan Repaid
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
59
Exhibit B
---------
OPINION OF
COUNSEL FOR THE BORROWER
------------------------
To be dated as of the Effective Date and in the form attached hereto.
60
Exhibit C
---------
ASSIGNMENT AND ACCEPTANCE
-------------------------
Dated ____________ __,____
Reference is made to the Fifth Amended and Restated Credit Agreement
dated as of November 23, 1999 (together with all amendments and modifications
thereto, the "Credit Agreement") among Mohawk Industries, Inc., a Delaware
corporation (the "Borrower"), First Union National Bank, SunTrust Bank, Atlanta,
Wachovia Bank, N.A., and the other banks from time to time party thereto
(collectively, the "Banks"). Terms defined in the Credit Agreement are used
herein with the same meaning.
________________ (the "Assignor") and ________________________________________
(the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, a ______% interest in
and to all of the Assignor's rights and obligations under the Credit Agreement
as of the Effective Date (as defined below) (including, without limitation, a
_____% interest (which on the Effective Date hereof is $_______________) in the
aggregate principal amount of the Assignor's Commitment and a ______ interest
(which on the Effective Date hereof is $_____________) in the Loans owing to the
Assignor and a __________ interest (which on the Effective Date hereof is
$__________) in the Note held by the Assignor (which on the Effective Date
hereof is $___________________).
2. The Assignor (i) makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or any other Loan Documents furnished pursuant thereto, other than
that it is the legal and beneficial owner of the interest being assigned by it
hereunder, that such interest is free and clear of any adverse claim and that as
of the date hereof the aggregate principal amount of the Assignor's Commitments
(without giving effect to assignments thereof which have not yet become
effective) is $_________________ and the aggregate outstanding principal amount
of all Loans owing to it (without giving effect to assignments thereof which
have not yet become effective) is $_________________; (ii) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or the performance or observance by the
Borrower of any of its obligations under the Credit Agreement or any other
instrument or document furnished pursuant thereto; and (iii) requests that the
Borrower execute a new Note dated ________________, ____ in the principal amount
of $______________ payable to the order of the Assignee.
3. The Assignee (i) confirms that it has received a copy of the
Credit Agreement, together with copies of the financial statements referred to
in Section 4.04(a) thereof (or any more recent
61
financial statements of the Borrower delivered pursuant to Section 5.01(a) or
(b) thereof) 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 Acceptance; (ii) agrees that it will, independently and without
reliance upon the Assignor or any other Bank and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Agreement;
(iii) confirms that it is a bank or financial institution; (iv) agrees that it
will perform in accordance with their terms all of the obligations which by the
terms of the Credit Agreement are required to be performed by it as a Bank; (v)
specifies as its Lending Office (and address for notices) the office set forth
beneath its name on the signature pages hereof, (vi) represents and warrants
that the execution, delivery and performance of this Assignment and Acceptance
are within its corporate powers and have been duly authorized by all necessary
corporate action[, and (vii) attaches the forms prescribed by the Internal
Revenue Service of the United States certifying as to the Assignee's status for
purposes of determining exemption from United States withholding taxes with
respect to all payments to be made to the Assignee under the Credit Agreement
and the Notes or such other documents as are necessary to indicate that all such
payments are subject to such taxes at a rate reduced by an applicable tax
treaty].
4. The Effective Date for this Assignment and Acceptance shall be
_______________ (the "Effective Date").
5. From and after the Effective Date, (i) the Assignee shall be a
party to the Credit Agreement and, to the extent rights and obligations have
been transferred to it by this Assignment and Acceptance, have the rights and
obligations of a Bank thereunder and (ii) the Assignor shall, to the extent its
rights and obligations have been transferred to the Assignee by this Assignment
and Acceptance, relinquish its rights (other than under Section 7.03 of the
Credit Agreement) and be released from its obligations under the Credit
Agreement.
6. From and after the Effective Date, the Borrower shall make all
payments in respect of the interest assigned hereby to the Assignee. The
Assignor and Assignee shall make all appropriate adjustments in payments for
periods prior to such acceptance by the Borrower directly between themselves.
62
7. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of Georgia.
[NAME OF ASSIGNOR]
By:___________________________
Title:
[NAME OF ASSIGNEE]
By:___________________________
Title:
Lending Office:
[Address]
CONSENTED AND AGREED TO:
MOHAWK INDUSTRIES, INC.
By:_______________________
Title:
63
Exhibit D
---------
NOTICE OF BORROWING
-------------------
_______________, _______
[Wachovia Bank, N.A.
191 Peachtree Street, N.W.
Atlanta, Georgia 30303-1757
Attention: SouthEast Corporate Loan Unit]
[First Union National Bank
999 Peachtree Street, 9th Floor
Atlanta, Georgia 30309
Attention: Donald Dalton]
[SunTrust Bank, Atlanta
303 Peachtree Street, 3rd Floor
Atlanta, Georgia 30308
Attention: Bradley J. Staples]
Re: Fifth Amended and Restated Credit Agreement (as amended and modified
from time to time, the "Credit Agreement") dated as of November 23,
1999 by and among MOHAWK INDUSTRIES, INC., FIRST UNION NATIONAL BANK,
SUNTRUST BANK, ATLANTA, WACHOVIA BANK, N.A., and the other Banks from
time to time party thereto.
Ladies and Gentlemen:
Unless otherwise defined herein, capitalized terms used herein shall have
the meanings attributable thereto in the Credit Agreement.
This Notice of Borrowing is delivered to you pursuant to Section 2.02 of
the Credit Agreement.
The Borrower hereby requests a [Euro-Dollar Borrowing] [Base Rate
Borrowing] in the aggregate principal amount of $___________ to be made on
______________, ______, and for interest to accrue thereon at the rate
established by the Credit Agreement for [Base Rate Loans] [Euro-Dollar Loans].
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[First Union] [SunTrust] [Wachovia] is hereby requested to fund $_____________
(33.3333%) of such Borrowing. [The duration of the Interest Period with respect
thereto shall be [1 month] [2 months] [3 months] [6 months].
The Borrower hereby represents and warrants that on the date the Borrowing
requested hereunder is made (both before and after giving effect to the making
of such and after giving effect to the application, directly or indirectly, of
the proceeds thereof):
(a) no Default has occurred and is continuing; and
(b) the representations and warranties of the Borrower contained in
Article IV of the Credit Agreement are true on and as of the date hereof
except for changes permitted by the Credit Agreement and except to the
extent that such representations and warranties relate solely to an earlier
date.
The Borrower has caused this Notice of Borrowing to be executed and
delivered by its duly authorized officer this _____ day of __________, ______.
MOHAWK INDUSTRIES, INC.
By:______________________
Title:
65
Exhibit E
---------
COMPLIANCE CERTIFICATE
----------------------
Reference is made to the Fifth Amended and Restated Credit Agreement
dated as of November 23, 1999 (as modified and supplemented and in effect from
time to time, the "Credit Agreement") among Mohawk Industries, Inc., First Union
National Bank, SunTrust Bank, Atlanta, Wachovia Bank, N.A., and the other Banks
from time to time party thereto. Capitalized terms used herein shall have the
meanings ascribed thereto in the Credit Agreement.
Pursuant to Section 5.01(c) of the Credit Agreement, ________________,
the duly authorized ____________________________ of Mohawk Industries, Inc.
hereby certifies, on behalf of the Borrower, to the Banks that the information
contained in the Compliance Check List attached hereto is true, accurate and
complete as of ______________________, _____, and that no Defaults or Events of
Default exist.
By:___________________________
Title:
66
COMPLIANCE CHECK LIST
(Mohawk Industries, Inc.)
--------------------------
________________________, __________
1. Debt to Capitalization Ratio (Section 5.04)
The Debt to Capitalization Ratio shall be less than 0.60 to 1.0 at the end
of each Fiscal Quarter.
(a) Consolidated Debt $ ____
(b) Consolidated Total Capital $ ____
Actual Ratio of (a) to (b) ____
Maximum Ratio (less than) 0.60 to 1.0
Applicable Margin ____ %*
Facility Fee ____ %*
2. Debt to EBITDA Ratio (Section 5.05)
The ratio of the Borrower's (a) Consolidated Debt to (b) the sum of (i)
Consolidated Net Income, (ii) Consolidated Interest Expense, (iii) taxes on
the Borrower's consolidated pre-tax income, and (iv) Depreciation and
Amortization shall not be greater than 3.5 to 1.0 at the end of each Fiscal
Quarter. Clause (b) in this Section 5.05 shall be calculated on a trailing
4 quarter basis as at the end of each such Fiscal Quarter.
(a) Consolidated Debt $ ____
(b) Consolidated Net Income $ ____
(c) Consolidated Interest Expense $ ____
(d) Taxes on the Borrower's
consolidated pre-tax income $ ____
(e) Depreciation $ ____
- ----------------------
* Subject to verification by the Banks.
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COMPLIANCE CHECKLIST
(Mohawk Industries, Inc.)
-------------
______, 199_
(f) Amortization $ ____
(e) The sum of (b) plus (c)
plus (d) plus (e) plus (f) $ ____
Actual Ratio of (a) to (e) ____
Maximum Ratio (less than) 3.5 to 1.0
3. Negative Pledge (Section 5.08)
Liens permitted under paragraphs (a)
through (i) $ ____
Limitation -- greater of (x)
$90,000,000 or (y) 15% of
Consolidated Net Worth $ ____
4. Calculations with respect to Asset Securitizations:
(a) Accounts receivable balance reported
as of the last day of the calendar month
most recently ended in such Fiscal Quarter
by the Borrower or a Subsidiary with respect
to an Asset Securitization $ ____________
(b) Total accounts receivable reported
as sold as of the last day of the calendar
month most recently ended in such Fiscal
Quarter by the Borrower or a Subsidiary
with respect to an Asset Securitization $ ____________
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Schedule 4.08
-------------
Subsidiaries
------------
Jurisdiction Holders of Equity
Name of Subsidiary of Formation Interest
Mohawk Carpet Corporation Delaware Borrower
World Carpets, Inc. Georgia Borrower
World Commercial Carpets, Inc. Georgia World Carpets, Inc.
Mohawk Servicing, Inc. Delaware Mohawk Carpet Corporation
Mohawk Factoring, Inc. Delaware Mohawk Carpet Corporation
Aladdin Manufacturing Corporation Delaware Mohawk Carpet Corporation
Mohawk International FSC, Inc. Barbados Mohawk Carpet Corporation
Mohawk Commercial, Inc. Delaware Mohawk Carpet Corporation
Mohawk Marketing, Inc. Georgia Aladdin Manufacturing
Corporation
Newmark & James, Inc. Georgia Aladdin Manufacturing
Corporation
Horizon Europe, Inc. Georgia Aladdin Manufacturing
Corporation
Delaware Valley Wool Scouring, Inc. Pennsylvania Aladdin Manufacturing
Corporation
Mohawk Mills, Inc. Delaware Aladdin Manufacturing
Corporation
American Weavers LLC Tennessee Aladdin Manufacturing
Corporation
Mohawk Marketing, Inc.
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