Exhibit 10.7
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CREDIT AGREEMENT
Dated as of July 20, 2001
Among
NN, INC.,
as the Borrower,
All of its present and future Subsidiaries
that become parties hereto, as Guarantors,
the Lenders identified herein,
BANK ONE, KENTUCKY, NA,
as Co-Agent,
and
AMSOUTH BANK,
as Administrative Agent
$25,000,000 Revolving Credit Facility
$35,000,000 Term Loan Facility
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this "Agreement"), dated as of July 20, 2001, is
made and entered into on the terms and conditions hereinafter set forth, by and
among NN, INC., a Delaware corporation (the "Borrower"), all subsidiaries of the
Borrower now or hereafter becoming parties to this Agreement (collectively, the
"Guarantors" and, individually, a "Guarantor"), those several lenders who are or
become parties to this Agreement (collectively, the "Lenders" and, individually,
a "Lender"), AMSOUTH BANK, an Alabama state bank having an office and place of
business in Nashville, Tennessee ("AmSouth"), as administrative agent for the
Lenders (in such capacity, the "Administrative Agent"), and BANK ONE, KENTUCKY,
NA, as co-agent for the Lenders (in such capacity, the "Co-Agent").
THE PARTIES HERETO AGREE AS FOLLOWS:
ARTICLE 1.
DEFINITIONS, ACCOUNTING TERMS
AND PRINCIPLES OF CONSTRUCTION
1.1. Defined Terms. In addition to terms defined elsewhere herein, the
following terms, as used in this Agreement, shall have the respective meanings
set forth below (terms defined in the singular to have the same meaning when
used in the plural, and vice versa, unless otherwise expressly indicated):
"Administrative Agent" shall mean AmSouth or such successor
Administrative Agent as may be appointed by the Lenders pursuant to Section
12.10 hereof.
"Affiliate" shall mean, as to any Person, any other Person directly
or indirectly controlling (including all directors, officers and employees of
such Person), directly or indirectly controlled by or under direct or indirect
common control with such Person.
"Applicable Bankruptcy Law" shall mean, with respect to any
Guarantor, Title 11 of the United States Code, and any other laws governing
bankruptcy, suspension of payments, reorganization, arrangement, adjustment of
debts, relief of debtors, dissolution or insolvency and any other similar laws
applicable to such Guarantor.
"Applicable Base Rate Margin" shall mean the margin to be added to
the Base Rate for purposes of determining the interest rate(s) applicable to
Base Rate Loans from time to time, which shall be determined as provided in
Section 2.10.
"Applicable Commitment Fee Percentage" shall mean the percentage to
be used to calculate Commitment Fees from time to time, which shall be
determined as provided in Section 2.10.
"Applicable LIBOR Margin" shall mean the margin to be added to
LIBOR for purposes of determining the interest rate(s) applicable to LIBOR Loans
from time to time, which shall be determined as provided in Section 2.10.
"Asset Acquisition" shall mean (a) any Investment by the Borrower
or any of its Subsidiaries in any other Person pursuant to which such Person
shall become a Subsidiary of the Borrower or any of its
Subsidiaries or shall be merged with the Borrower or any of its Subsidiaries or
(b) any acquisition by the Borrower or any of its Subsidiaries of the assets of
any Person that constitute substantially all of an operating unit or business of
such Person.
"Assignment and Acceptance" shall mean an assignment and
acceptance, substantially in the form of Exhibit 13.2, between a transferor
Lender and a proposed transferee, regarding the sale, assignment, transfer or
other disposition (other than the sale of a participation) of all or any amount
of the Commitments, Revolving Loans and Term Loans of such Lender.
"Base LIBOR" shall mean the rate per annum for offered Dollar
deposits in the interbank Eurodollar market appearing on page 3750 of the
TELERATE rate reporting system at approximately 11:00 a.m., Central time, on the
Interest Rate Determination Date immediately prior to the beginning of the
Interest Period for the corresponding LIBOR Loan, for the number of months
comprised therein and in an amount equal to the amount of such LIBOR Loan to be
outstanding during such Interest Period. Without limiting the provisions of
Section 2.11.3, in the event that prior to the Term Loan Maturity Date TELERATE
quotes for Base LIBOR are discontinued or become unascertainable, the
Administrative Agent may (1) determine Base LIBOR with reference to the rate per
annum for offered Dollar deposits in the interbank Eurodollar market appearing
on the Reuters Screen LIBO Page at approximately 11:00 a.m., Central time, on
the Interest Rate Determination Date immediately prior to the beginning of the
Interest Period for the corresponding LIBOR Loan, for the number of months
comprised therein and in an amount equal to the amount of such LIBOR Loan to be
outstanding during such Interest Period (and if more than one such rate appears,
the Administrative Agent may use the arithmetic mean of such rates), or (2)
designate any other comparable resource for use in determining Base LIBOR for
purposes hereof.
"Base Rate" shall mean, for any period, the greater of (i) the
fluctuating rate of interest per annum from time to time established by AmSouth
as its "prime rate", regardless of whether published or publicly announced, or
(ii) a fluctuating rate of interest per annum equal to one-half of one
percentage point (0.5%) in excess of the Federal Funds Rate in effect from time
to time. Each change in the Base Rate shall be effective as of the opening of
business on the day such change occurs. The parties hereto acknowledge that the
rate established by AmSouth as its "prime rate" is an index or base rate and is
not necessarily the lowest rate charged to its customers or other banks. In the
event that AmSouth discontinues or abandons the practice of establishing a prime
rate, or should the same become unascertainable, the Administrative Agent shall
designate a comparable reference rate for use in determining the Base Rate for
purposes hereof.
"Base Rate Loans" shall mean Revolving Loans and Term Loans bearing
interest at rates determined by reference to the Base Rate.
"Borrowing" shall mean (1) a borrowing consisting of Revolving
Loans made to the Borrower on the same day by the Lenders ratably according to
their respective Commitments pursuant to the provisions of Section 2.2.1, (2) a
borrowing consisting of Term Loans made to the Borrower on the same day by the
Lenders ratably according to their respective Commitments pursuant to the
provisions of Section 2.2.2, and (3) a borrowing consisting of a Swing Line Loan
made to the Borrower by the Swing Line Lender pursuant to the provisions of
Section 2.2.7.
"Business Day" shall mean any day on which AmSouth's Tennessee
offices are open to conduct AmSouth's general banking business and on which the
Federal Reserve System is open to conduct the business conducted by it.
"Capital Expenditures" shall mean, as to any Person for any period,
the aggregate capital expenditures recorded by such Person and its Subsidiaries
on a consolidated basis in conformity with GAAP, including charges in respect of
Capitalized Lease Obligations exclusive of imputed interest on such Capitalized
Lease Obligations; provided, however, that for purposes of determining Capital
Expenditures for the Borrower
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and its Subsidiaries on a consolidated basis, there shall be excluded therefrom
any Capital Expenditures attributable solely to the making of Permitted
Acquisitions.
"Capitalization" shall mean, for the Borrower and its Subsidiaries
on a consolidated basis, the sum of Consolidated Funded Indebtedness plus
shareholders' equity.
"Capitalized Lease" shall mean, as to any Person, any lease of
property by such Person as lessee that would be capitalized on a balance sheet
of such Person prepared in conformity with GAAP.
"Capitalized Lease Obligations" shall mean, as to any Person, the
capitalized amount of the obligations of such Person and its Subsidiaries under
all Capitalized Leases.
"Cash Equivalents" shall mean, at any time,
(a) certificates of deposit or time deposits having a maturity not
exceeding ninety (90) days, and demand deposits, that are fully insured by
the Federal Deposit Insurance Corporation and that are maintained with
commercial banks organized and existing under, or chartered or otherwise
qualified to do business under, the laws of the United States of America
or any State thereof or the District of Columbia;
(b) Government Obligations having a maturity not exceeding ninety
(90) days;
(c) commercial paper rated at least A-1 by S&P or P-1 by Moody's,
having a maturity not exceeding ninety (90) days;
(d) certificates of deposit or time deposits maintained with (i)
the Lenders or (ii) other commercial banks having capital and undivided
surplus of at least $500 million and issuing commercial paper rated as
described in the preceding clause (c) and organized and existing under, or
chartered or otherwise qualified to do business under, the laws of the
United States of America or any State thereof or the District of Columbia,
having a maturity not exceeding ninety (90) days;
(e) repurchase agreements or investment contracts having a
maturity not exceeding ninety (90) days with a financial institution
insured by the Federal Deposit Insurance Corporation, or any broker or
dealer (as defined in the Securities Exchange Act of 1934) that is a
dealer in government bonds and that is recognized by trades with and
reports to, a Federal Reserve Bank as a primary dealer in government
securities; provided that in any case (i) collateral is pledged for the
repurchase agreement or investment contract, which collateral consists of
(A) Government Obligations or evidences of ownership of proportionate
interests in future interest and principal payments on Government
Obligations held by a bank or trust company as custodian, under which the
owner of the investment is the real party in interest and has the right to
proceed directly and individually against the obligor on such obligations,
and which underlying obligations are held in a segregated account and not
available to satisfy any claim of the custodian or any person claiming
through the custodian or to whom the custodian may be obligated or (B)
evidences of indebtedness issued by any of the following: Bank of
Cooperatives, Export-Import Bank of the United States, Farmers Home
Administration, Federal Financing Bank, Federal Home Loan Bank System,
Federal Home Loan Mortgage Corporation (including participation
certificates), Federal Housing Administration, Federal Farm Credit Banks,
Federal National Mortgage Association, Government National Mortgage
Association, Inter-American Development Bank, International Bank for
Reconstruction and Development, Small Business Administration or any other
agency or instrumentality of the United States of America created by an
act of Congress that is substantially similar to the foregoing in its
legal relationship to the United States of America, (ii) the current
market value of the collateral securing the repurchase agreement or
investment contract is at least equal to the amount of the
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repurchase agreement or investment contract and (iii) the current market
value of the collateral is determined not less frequently than monthly;
(f) investments in money market funds substantially all of whose
assets consist of securities of the types described in the foregoing
clauses (b) through (e);
(g) investments in obligations the return with respect to which is
excludable from gross income under Section 103 of the Code, having a
maturity of not more than six (6) months or providing the holder the right
to put such obligations for purchase at par upon not more than
twenty-eight (28) days' notice, and which are rated at least A-1 by S&P or
P-1 by Moody's;
(h) investments in tax free money market funds all of whose assets
consist of securities of the types described in the foregoing clause (g);
and
(i) investments, redeemable upon not more than seven (7) days'
notice, in money market preferred municipal bond funds that are rated at
least AAA by S&P or Aaa by Moody's.
"Code" shall mean the Internal Revenue Code of 1986.
"Collateral" shall mean all property and interests in property,
presently owned or hereafter acquired or presently existing or hereafter created
by the Borrower or the Guarantors, including any and all proceeds thereof, in
which a security interest has been granted in favor of the Administrative Agent
for the ratable benefit of the Lenders, whether under this Agreement or any
other Loan Document.
"Commission" shall mean the Securities and Exchange Commission or
any successor entity.
"Commitment Fees" shall have the meaning given such term in Section
2.8.3.
"Commitments" shall mean the Revolving Credit Commitments and the
Term Loan Commitments, which collectively are in the aggregate amount set forth
in Section 2.1 and in the case of each Lender are in the initial amount set
forth with such Lender's signature on this Agreement or the Assignment and
Acceptance pursuant to which such Lender became a party hereto.
"Commonly Controlled Entity" shall mean a Person that is under
common control with the Borrower within the meaning of subsection 414(b), (c),
(m), (n) or (o) of the Code.
"Consolidated Funded Indebtedness" shall mean, for the Borrower and
its Subsidiaries on a consolidated basis, all Indebtedness that constitutes (a)
indebtedness for borrowed money or for notes, debentures or other debt
securities, (b) notes payable and drafts accepted representing extensions of
credit regardless of whether the same represent obligations for borrowed money,
(c) reimbursement obligations in respect of letters of credit issued for the
account of Borrower or a Subsidiary thereof (including any such obligations in
respect of any drafts drawn thereunder), (d) liabilities for all or any part of
the deferred purchase price of property or services, (e) liabilities secured by
any Lien on any property or asset owned or held by the Borrower or any of its
Subsidiaries regardless of whether the Indebtedness secured thereby shall have
been assumed by or is a primary obligation of the Borrower or such Subsidiary,
(f) Capitalized Lease Obligations, and (g) without duplication, all Contingent
Obligations the primary obligation of which is Indebtedness of the type
described in clauses (a) through (f) above; provided, however, that Consolidated
Funded Indebtedness shall not include any unsecured current liabilities incurred
in the ordinary course of business and not represented by any note, bond,
debenture or other instrument.
"Consolidated Net Income" shall mean, for the Borrower and its
Subsidiaries on a consolidated basis for any period, the net income (or loss)
after taxes of the Borrower and its Subsidiaries on a
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consolidated basis for such period taken as a single accounting period,
determined in conformity with GAAP, subject to customary exclusions with respect
to extraordinary and nonrecurring items.
"Consolidated Net Worth" shall mean, for the Borrower and its
Subsidiaries on a consolidated basis, shareholders' equity determined in
conformity with GAAP.
"Contingent Obligations" shall mean, as to any Person, any
contingent obligation calculated in conformity with GAAP, and in any event shall
include (without duplication) all indebtedness, obligations or other liabilities
of such Person guaranteeing or in effect guaranteeing the payment or performance
of any indebtedness, obligation or other liability, whether or not contingent
(collectively, the "primary obligations"), of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including any
indebtedness, obligation or other liability of such Person, (a) to purchase any
such primary obligation or any property constituting direct or indirect security
therefor, (b) to advance or supply funds (i) for the purchase or payment of any
such primary obligation or (ii) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (c) to purchase property, securities or services primarily for
the purpose of assuring the owner of any such primary obligation of the ability
of the primary obligor to make payment of such primary obligation, or (d)
otherwise to assure or hold harmless the owner of such primary obligation
against loss with respect thereto.
"Contractual Obligations" shall mean, as to any Person, any and all
indebtedness, obligations or other liabilities of such Person, now existing or
hereafter arising, whether due or not due, absolute or contingent, liquidated or
unliquidated, direct or indirect, express or implied, individually or jointly
with others, pursuant to the provisions of any document, instrument or agreement
to which such Person is a party or by which such Person or any of its property
is or may be bound or affected or pursuant to the provisions of any security
issued by such Person.
"Credit Fees" shall mean the credit fees payable as provided in
Section 2.8.
"Current Maturities of Long-Term Debt" shall mean, as of any date
of determination, that portion of Consolidated Funded Indebtedness that is due
and payable within the twelve (12) month period immediately following the date
of determination, calculated in conformity with GAAP.
"Default" shall mean any of the events specified in Section 11.1,
regardless of whether any requirement for the giving of notice (and if
applicable, an opportunity to cure), the lapse of time or both has been
satisfied.
"Default Rate" shall mean the rate(s) per annum otherwise
applicable to Loans from time to time plus two percentage points (2.00%);
provided, however, that in no event shall any Default Rate exceed the Highest
Lawful Rate.
"Dollars" and "$" shall mean lawful money of the United States of
America.
"EBITDA" shall mean, for the Borrower and its Subsidiaries on a
consolidated basis for any period, after giving Pro Forma Effect to any Asset
Acquisition made during such period, the sum of Consolidated Net Income, plus
Interest Expense, plus any provision for taxes based on income or profits that
was deducted in computing Consolidated Net Income, plus depreciation, plus
amortization of intangible assets and other non-cash charges (including the
minority interests in the Euroball consolidated subsidiaries).
"Environmental Laws" shall mean all federal, state, regional,
county or local laws, statutes, rules, regulations or ordinances, now or
hereafter in effect, relating to the generation, recycling, use, reuse, sale,
storage, handling, transport, treatment or disposal of Hazardous Materials,
including the Comprehensive Environmental Response Compensation Liability Act of
1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42
U.S.C. ss.9601 et seq., the Resource Conservation and Recovery Act of 1976,
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as amended by the Solid and Hazardous Waste Amendments of 1984, 42 U.S.C.
(S)6901 et seq., the Toxic Substances Control Act, 15 U.S.C. (S)2601 et seq.,
the Hazardous Materials Transportation Act, 49 U.S.C. (S)1801, et seq., the
Clean Air Act, 42 U.S.C. (S)7401 et seq., the Clean Water Act of 1977, 33 U.S.C.
(S)1251 et seq., the Tennessee Hazardous Waste Management Act of 1977, Tenn.
Code Ann. (S)68-212-101 et seq., the Tennessee Hazardous Waste Management Act of
1983, Tenn. Code Ann. (S)68-212-201 et seq., and any rules, regulations and
guidance documents promulgated or published thereunder, and any state, regional,
county or local statute, law, rule, regulation or ordinance now or hereafter in
effect that relates to public health or safety, to the discharge, emission or
disposal of Hazardous Materials in or to air, water, land or groundwater, to the
withdrawal or use of groundwater, to the use, handling or disposal of asbestos,
polychlorinated biphenyls, petroleum, petroleum derivatives or by-products,
other hydrocarbons or urea formaldehyde, to the treatment, storage, disposal or
management of Hazardous Materials, to exposure to Hazardous Materials or to the
transportation, storage, disposal, management or release of gaseous or liquid
substances, and any regulation, order, injunction, judgment, declaration, notice
or demand issued thereunder.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974.
"Euroball" shall mean NN Euroball, ApS, a limited liability company
organized under the laws of Denmark.
"Event of Default" shall mean any of the events specified in Section
11.1, provided that any requirement for the giving of notice (and if applicable,
an opportunity to cure), the lapse of time or both has been satisfied.
"Existing Liens" shall mean those certain Liens in existence on the
date hereof that are described on Schedules 7.17A and 7.17 B.
"Facilities" shall mean the Revolving Credit Facility, the Term Loan
Facility and the Swing Line Facility.
"Federal Funds Rate" shall mean, for any period, a fluctuating
interest rate per annum equal, for each day during such period, to the weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published for each
day (or, if such day is not a Business Day, for the immediately preceding
Business Day) by the Federal Reserve Bank of New York.
"Financing Statement" shall mean any Uniform Commercial Code financing
statement, on Form UCC-1 or otherwise, executed pursuant to the provisions of
this Agreement or any other Loan Document.
"Fiscal Quarter" shall mean each of the accounting periods of
approximately three (3) months ending on March 31, June 30, September 30 and
December 31, respectively, of each year.
"Fiscal Year" shall mean the twelve (12) month period ending on
December 31 of each year.
"Fixed Charge Coverage Ratio" shall mean, for the Borrower and its
Subsidiaries on a consolidated basis, calculated as of any date of determination
for the most recent twelve (12) month period after giving Pro Forma Effect to
any Asset Acquisition made during such period, the ratio of (a) the sum of
EBITDA plus Rent Expense to (b) the sum of Interest Expense plus Current
Maturities of Long-Term Debt plus Rent Expense.
"Funded Indebtedness to Capitalization Ratio" shall mean, for the
Borrower and its Subsidiaries on a consolidated basis, as of any date of
determination, the ratio of Consolidated Funded Indebtedness to Capitalization.
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"Funded Indebtedness to EBITDA Ratio" shall mean, for the Borrower and
its Subsidiaries on a consolidated basis, calculated as of any date of
determination for the most recent twelve (12) month period after giving Pro
Forma Effect to any Asset Acquisition made during such period, the ratio of
Consolidated Funded Indebtedness to EBITDA.
"Funding Date" shall mean each of the respective dates on which the
funding of a Borrowing made under this Agreement occurs.
"GAAP" shall mean generally accepted accounting principles in the
United States of America in effect from time to time.
"Government Obligations" shall mean direct obligations of the United
States of America or obligations for the full and prompt payment of which the
full faith and credit of the United States of America are pledged.
"Governmental Authority" shall mean any nation, province, state or
other political subdivision thereof and any government or any natural person or
entity exercising executive, legislative, regulatory or administrative functions
of or pertaining to government.
"Guaranteed Obligations" shall mean all the Obligations of the
Borrower guaranteed by the Guarantors pursuant to Article 5.
"Guarantor" shall mean each Subsidiary of the Borrower that has become
a party to this Agreement as a Guarantor by executing this Agreement or a
Supplement to Credit Agreement in the form of Exhibit 1.1A, and has delivered to
the Administrative Agent, for the ratable benefit of the Lenders and has all
promissory notes and other instruments evidencing intercompany Indebtedness owed
to such Subsidiary by any other Subsidiary of the Borrower, endorsed to the
order of the Administrative Agent.
"Guaranty" shall mean the guaranty of the Obligations of the Borrower
set forth in Article 5.
"Hazardous Material" shall mean gasoline, motor oil, fuel oil, waste
oil, other petroleum or petroleum-based products, asbestos, polychlorinated
biphenyls, medical and infectious wastes and any chemical, material or substance
to which exposure is prohibited, limited or regulated by any federal, state,
county, local or regional authority or which, even if not so regulated, is known
to pose a hazard to health and safety, including but not limited to substances
and materials defined or designated as "hazardous substances", "hazardous
wastes", "pollutants", "contaminants", "hazardous materials" or "toxic
substances" under any Environmental Law.
"Highest Lawful Rate" shall mean, with respect to each Lender, the
maximum nonusurious interest rate, if any, that at any time or from time to time
may be contracted for, taken, reserved, charged or received on debts outstanding
hereunder or under the Notes, as the case may be, under the laws applicable to
such Lender that are presently in effect or, to the extent allowed by law, under
such applicable laws that may hereafter be in effect and that allow a higher
maximum nonusurious interest rate than applicable laws now allow.
"Indebtedness" shall mean, as to any Person, all items that in
conformity with GAAP would be shown on the balance sheet of such Person as a
liability and in any event shall include (without duplication) (a) indebtedness
for borrowed money or for notes, debentures or other debt securities, (b) notes
payable and drafts accepted representing extensions of credit whether or not
representing obligations for borrowed money, (c) reimbursement obligations in
respect of letters of credit issued for the account of such Person (including
any such obligations in respect of any drafts drawn thereunder), (d) liabilities
for all or any part of the deferred purchase price of property or services, (e)
liabilities secured by any Lien on any property or asset owned or
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held by such Person regardless of whether the indebtedness secured thereby shall
have been assumed by or is a primary liability of such Person, (f) Capitalized
Lease Obligations, and (g) Contingent Obligations.
"Interest Expense" shall mean, as to any Person for any period, the
aggregate interest expense and amortization of deferred loan costs of such
Person and its Subsidiaries on a consolidated basis for such period (calculated
without regard to any limitations on the payment thereof), imputed interest on
Capitalized Lease Obligations, commissions, discounts and other fees and charges
owed with respect to letters of credit and unused commitments and net costs
under interest rate protection agreements, all as determined in conformity with
GAAP.
"Interest Payment Date" shall mean, (a) with respect to any Base Rate
Loan or Swing Line Loan, the first day of each month, commencing on the first
day of the first month after the applicable Funding Date, and (b) with respect
to any LIBOR Loan, the last day of the Interest Period applicable to such Loan.
"Interest Period" shall mean any interest period applicable to a LIBOR
Loan as determined pursuant to Section 2.11.1.
"Interest Rate Contracts" shall mean any interest rate swap
agreements, interest rate cap agreements, interest rate collar agreements,
interest rate insurance and other agreements or arrangements designed to provide
protection against fluctuations in interest rates, in each case between the
Borrower and any Lender, and in an aggregate notional amount at any time not to
exceed an amount equal to Consolidated Funded Indebtedness at such time.
"Interest Rate Determination Date" shall mean each date for
calculating LIBOR for purposes of determining the interest rate in respect of an
Interest Period, which in each case shall be the second (2d) Business Day prior
to the first (1st) day of the corresponding Interest Period.
"Investment" shall mean the making of any loan, advance, extension of
credit or capital contribution to, or the acquisition of any stock, bonds,
notes, debentures or other obligations or securities of, or the acquisition of
any other interest in or the making of any other investment in, any Person.
"Last Four Fiscal Quarters" shall mean, as of any date of
determination, the Fiscal Quarter ending on such date or otherwise then most
recently ended plus the immediately preceding three Fiscal Quarters.
"Lending Office" shall mean with respect to any Lender or the
Administrative Agent, the office of each such Lender at the address specified on
the signature pages hereto or in the Assignment and Acceptance pursuant to which
it became a Lender, or such other office as any such Lender from time to time
may specify to the Borrower and the Administrative Agent.
"LIBOR" shall mean the rate per annum (rounded upwards, if necessary,
to the nearest whole one-eighth of 1%) equal to the product of Base LIBOR times
Statutory Reserves.
"LIBOR Loans" shall mean Revolving Loans and Term Loans bearing
interest at rates determined by reference to LIBOR.
"Lien" shall mean, as to any asset, (a) any lien, charge, claim,
mortgage, security interest, pledge, hypothecation or other encumbrance of any
kind with respect to such asset, (b) any interest of a vendor or lessor under
any conditional sale agreement, Capitalized Lease or other title retention
agreement relating to such asset, (c) any reservation, exception, encroachment,
easement, right-of-way, covenant, condition, restriction, lease or other title
exception affecting such asset, or (d) any assignment, deposit, preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including any conditional sale or other title retention
agreement, any financing lease having substantially the same
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economic effect as any of the foregoing, and the filing of any financing
statement under the Uniform Commercial Code or comparable law of any
jurisdiction).
"Loan Documents" shall mean this Agreement, the Notes, the Interest
Rate Contracts and all other documents, instruments and agreements now or
hereafter executed or delivered pursuant hereto or in connection herewith.
"Loans" shall mean Revolving Loans, Term Loans and Swing Line Loans.
"Material Adverse Effect" and "Material Adverse Change" shall mean a
material adverse effect on, or a material adverse change in, (a) the properties,
business, prospects, operations, management or financial condition of the
Borrower and the Guarantors, taken as a whole, or (b) the ability of the
Borrower, any Guarantor or any of their respective Subsidiaries to perform any
of their respective obligations under this Agreement, the Notes or the other
Loan Documents to which it is a party.
"Material Contract" shall mean each contract to which the Borrower or
any of its Subsidiaries is a party or a guarantor (or by which it is bound) that
requires payments (either to or for the benefit of, or by or on behalf of, the
Borrower or any of its Subsidiaries) in excess of $10,000,000 in any
twelve-month period (a) the cancellation, non-performance or non-renewal of
which by any party thereto would have a Material Adverse Effect, or (b) pursuant
to which the Borrower or any of its Subsidiaries may incur Indebtedness for
borrowed money or Capitalized Lease Obligations.
"Maximum Guaranty Liability" shall mean the maximum liability
hereunder of the respective Guarantors permitted by Applicable Bankruptcy Law as
provided in Section 5.2.
"Moody's" shall mean Moody's Investors Service, Inc. and its
successors.
"Multi-Employer Plan" shall mean any multiple employer plan, as
defined in Section 4001(a)(3) of ERISA, that is maintained by the Borrower, any
Guarantor, any of their respective Subsidiaries or a Commonly Controlled Entity.
"NN, Inc. Stock Incentive Plan" shall mean the NN, Inc. Stock
Incentive Plan as amended, restated or modified from time to time.
"Non-Guarantor Subsidiaries" shall mean the Subsidiaries of the
Borrower and the Guarantors listed on Schedule 7.1 and designated as such
thereon.
"Notes" shall mean the Revolving Notes, the Term Notes and the Swing
Line Note.
"Notice of Borrowing" shall mean a notice substantially in the form of
Exhibit 2.2.5 with respect to a proposed Borrowing of Revolving Loans.
"Notice of Conversion/Continuation" shall mean a notice substantially
in the form of Exhibit 2.4.2 annexed hereto with respect to a proposed
conversion or continuation, pursuant to Section 2.4, of (a) Revolving Loans or
Term Loans bearing interest at a rate determined by reference to one basis, to
(b) Revolving Loans or Term Loans bearing interest at a rate determined by
reference to an alternative basis.
"Obligations" shall mean, as to any Person, all Indebtedness,
obligations and other liabilities of such Person of any kind and description
owing to the Administrative Agent or the Lenders pursuant to the provisions of
this Agreement, the Notes and the other Loan Documents, howsoever evidenced or
acquired, whether now existing or hereafter arising, due or not due, absolute or
contingent, liquidated or unliquidated, direct or indirect, express or implied,
whether owed individually or jointly with others.
9
"Operating Lease" shall mean, as to any Person, any lease of property
(whether real, personal or mixed) by such Person as lessee that is not a
Capitalized Lease.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to subtitle A of Title IV of ERISA.
"Percentage" shall mean, as to each Lender, the percentage set forth
with such Lender's signature on this Agreement or the Assignment and Acceptance
pursuant to which such Lender became a party hereto.
"Permitted Acquisition" shall mean any Asset Acquisition by the
Borrower or any Guarantor with respect to which (a) the Borrower and the
Guarantors shall have complied with the provisions of Section 8.2.4, (b) the
Borrower or such Guarantor is the surviving entity in the transaction, (c) all
assets acquired in the transaction are held or acquired by the Borrower or such
Guarantor, (d) at the time of such Asset Acquisition and after giving Pro Forma
Effect thereto and to any other Asset Acquisition made during the then most
recent twelve (12) month period, no Default shall have occurred or be continuing
or would result therefrom, and (e) if either (i) the aggregate consideration
paid or to be paid in connection with such Asset Acquisition, inclusive of all
Indebtedness incurred or assumed, is equal to or greater than $5,000,000, or
(ii) the aggregate consideration paid or to be in connection with such Asset
Acquisition, inclusive of all Indebtedness incurred or assumed, together the
aggregate consideration paid in connection with all Asset Acquisitions occurring
during the term of the Facilities for which consent was not required, is equal
to or greater than $15,000,000, the Requisite Lenders shall have consented in
writing to such Asset Acquisition, which consent shall not be unreasonably
withheld.
"Permitted Liens" shall mean Liens permitted pursuant to the
provisions of Section 9.2.
"Person" shall mean an individual, corporation, partnership, limited
partnership, limited liability company, limited liability limited partnership,
trust, business trust, association, joint stock company, joint venture, pool,
syndicate, sole proprietorship, unincorporated organization, Governmental
Authority or other form of entity not specifically listed herein.
"Plan" shall mean an employee pension benefit plan covered by Title IV
of ERISA that is maintained by the Borrower, any Guarantor, any of their
respective Subsidiaries or a Commonly Controlled Entity, and shall include any
Single Employer Plan or any Multi-Employer Plan.
"Pledge Agreement" shall mean the Pledge and Security Agreement,
substantially in the form of Exhibit 4.1, executed by the Borrower and the
Guarantors in favor of the Administrative Agent and the Lenders.
"Pledged Notes" shall have the meaning given such term in the Pledge
Agreement.
"Pricing Tier Determination Date" shall mean the fifth (5th) Business
Day following each date on which the Borrower has delivered to the
Administrative Agent financial statements, financial reports, certificates and
other financial information complying with the requirements of Section 8.1.1 or
8.1.2 and containing information sufficient to enable a calculation of the
Funded Indebtedness to EBITDA Ratio for the purpose of determining the
Applicable Base Rate Margin, the Applicable LIBOR Margin and the Applicable
Commitment Fee Percentage pursuant to Section 2.10.
"Principal Obligor" shall mean, with respect to a specific
indebtedness or obligation, the Person creating, incurring, assuming or
suffering to exist such indebtedness or obligation without becoming liable for
same as a surety or guarantor.
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"Pro Forma Effect" shall mean, in making any calculation
hereunder to which such term is applicable, including any calculation necessary
to determine whether the Borrower is in compliance with Section 10.1.2 or 10.1.3
or whether a Default would result from any Asset Acquisition, (a) any Asset
Acquisition made during the most recent twelve (12) month period (the "Reference
Period") ending on and including the date of determination (the "Calculation
Date") shall be assumed to have occurred on the first day of the Reference
Period, (b) Consolidated Funded Indebtedness, and the application of proceeds
therefrom, incurred or to be incurred in connection with any Asset Acquisition
made or to be made during the Reference Period shall be assumed to have arisen
or occurred on the first day of the Reference Period, (c) there shall be
excluded any Interest Expense in respect of Consolidated Funded Indebtedness
outstanding during the Reference Period that was or is to be refinanced with
proceeds of Indebtedness incurred or to be incurred in connection with any Asset
Acquisition made or to be made during the Reference Period, (d) Interest Expense
in respect of Consolidated Funded Indebtedness bearing a floating rate of
interest and assumed to have been incurred on the first day of the Reference
Period shall be calculated on the basis of the average rate in effect under this
Agreement for Base Rate Loans throughout the period such Consolidated Funded
Indebtedness is assumed to be outstanding, and (e) Rent Expense shall include
actual Rent Expense incurred by any Person, operating unit or business acquired
during the Reference Period, plus Rent Expense projected for the twelve (12)
month period following the date of actual incurrence thereof in respect of any
Operating Lease entered into or to be entered into in connection with any Asset
Acquisition made during the Reference Period, which projected Rent Expense shall
be deemed to have been incurred on the first day of the Reference Period.
"Projections" means the financial projections provided by
Borrower to Administrative Agent, as the same may have been modified or
supplemented in a writing delivered to the Administrative Agent that is
expressly identified as a modification of or supplement to such financial
projections.
"Purchase Money Debt" shall mean (a) Indebtedness of the
Borrower or any of its Subsidiaries that, within thirty (30) days of the
purchase of equipment in which neither the Borrower nor any of its Subsidiaries
at any time prior to such purchase had any interest, is incurred to finance part
or all of (but not more than) the purchase price of such equipment, and that
bears interest at a rate per annum that is commercially reasonable at the time,
and (b) Indebtedness that constitutes a renewal, extension, refunding or
refinancing of, but not an increase in the principal amount of, Purchase Money
Debt that is such by virtue of clause (a), is binding only upon the obligor or
obligors under the Purchase Money Debt being renewed, extended or refunded and
bears interest at a rate per annum that is commercially reasonable at the time.
"Rent Expense" shall mean, as to any Person for any period, the
aggregate rent and lease expenses recorded by such Person and its Subsidiaries
on a consolidated basis in conformity with GAAP pursuant to any Operating Lease.
"Reportable Event" shall mean any of the events set forth under
Section 4043(b) of ERISA or the PBGC regulations thereunder.
"Requirement of Law" shall mean, as to any Person (a) the
partnership agreement, charter, certificate of incorporation, articles of
incorporation, bylaws, operating agreement or other organizational or governing
documents of such Person, (b) any federal, state or local law, treaty,
ordinance, rule or regulation, and (c) any order, decree or determination of a
court, arbitrator or other Governmental Authority; in each case applicable to or
binding upon such Person or any of its property or to which such Person or any
of its property is subject.
"Requisite Lenders" shall mean, as of any date of determination,
Lenders having at least sixty-six and two-thirds percent (66 2/3%) of the
Commitments.
"Responsible Officer" shall mean, as to any Person, either (a)
its president or chief executive officer, or (b) with respect to financial
matters, its president, chief executive officer, chief financial officer,
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chief accounting officer or any vice president designated in writing by the
chief executive officer to the Administrative Agent.
"Restricted Payments" shall mean, as to any Person for any
period:
(a) dividends, other distributions and other payments or
deliveries of property on account of the capital stock of or other
ownership interests in, or any warrants, options or other rights in
respect of any capital stock of or other ownership interests in, such
Person or its Subsidiaries, now or hereafter outstanding, that are
recorded by such Person and its Subsidiaries on a consolidated basis
(excluding any such dividends, distributions and other payments made
solely to such Person or a wholly-owned Subsidiary of such Person by
a Subsidiary of such Person),
(j) amounts paid to purchase, redeem, retire or otherwise
acquire for value any of the capital stock of or other ownership
interests in, or any warrants, options or other rights in respect of
the capital stock of or other ownership interests in, such Person or
its Subsidiaries, now or hereafter outstanding (excluding any such
amounts paid solely to such Person or a wholly-owned Subsidiary of
such Person by a Subsidiary of such Person),
(k) any assets segregated or set apart by such Person or any of
its Subsidiaries (including any money or property deposited with a
trustee or other paying agent) for a sinking or analogous fund for
the purchase, redemption or retirement or other acquisition of any
capital stock of or other ownership interests in, or any warrants,
options or other rights in respect of any capital stock of or other
ownership interests in, such Person or its Subsidiaries, now or
hereafter outstanding (excluding any assets so segregated or set
apart with respect to any stock, warrants, options or other rights
held by a wholly-owned Subsidiary of such Person),
(l) payments made or required to be made by such Person with
respect to any stock appreciation rights plan, equity incentive or
achievement plan or any similar plan and any assets segregated or set
apart for such purposes (including any money or property deposited
with a trustee or other paying agent), and
(m) any payment, purchase, redemption or acquisition of
Subordinated Indebtedness and any assets segregated or set apart for
such purposes (including any money or property deposited with a
trustee or other paying agent), excluding, however, regularly
scheduled payments of interest made according to the stated terms of
such Subordinated Indebtedness;
all as determined in conformity with GAAP.
"Revolving Commitment Period" shall mean that period commencing
on the date hereof and continuing to, but not including, the Revolving
Commitment Period Expiration Date.
"Revolving Commitment Period Expiration Date" shall mean July
25, 2003.
"Revolving Credit Commitments" shall mean, at any time, the
commitment of all the Lenders, collectively, to make Revolving Loans to the
Borrower during the Revolving Commitment Period pursuant to the provisions of
Section 2.2, and the "Revolving Credit Commitment" of any Lender at any time
shall mean an amount equal to such Lender's Percentage multiplied by the then
effective aggregate Revolving Credit Commitments. The Revolving Credit
Commitments are in the aggregate amount set forth in Section 2.1.
"Revolving Credit Facility" shall mean the revolving credit
facility provided by the Lenders pursuant to the Revolving Credit Commitments as
more particularly set forth in Section 2.2.1.
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"Revolving Loans" shall mean the revolving loans made by the
Lenders to the Borrower pursuant to the provisions of Section 2.2.1.
"Revolving Notes" shall mean the promissory notes, substantially
in the form of Exhibit 2.5A, executed by the Borrower in favor of the Lenders,
evidencing the indebtedness of the Borrower to the Lenders in connection with
the Revolving Loans.
"S&P" shall mean Standard & Poor's Corporation and its
successors.
"Security Documents" shall mean the Pledge Agreement and all
documents, instruments and agreements now or hereafter executed or delivered
pursuant thereto or in connection therewith.
"Single Employer Plan" shall mean any Plan that is not a
Multi-Employer Plan.
"Solvent" shall mean, with respect to any Person on any
particular date, that on such date (a) the fair value of the assets of such
Person (both at fair valuation and at present fair saleable value) is, on the
date of determination, greater than the total amount of liabilities, including
contingent and unliquidated liabilities, of such Person, (b) such Person is able
to pay all liabilities of such Person as they mature, and (c) such Person does
not have unreasonably small capital with which to carry on its business, after
giving due consideration to the nature of the business in which such Person is
engaged. In computing the amount of contingent or unliquidated liabilities at
any time, such liabilities will be computed at the amount that, in light of all
the facts and circumstances existing at such time, represents the amount that
can be reasonably expected to become an actual or matured liability.
"Statutory Reserves" shall mean a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves), expressed
as a decimal, established by the Federal Reserve Board and/or any other banking
authority to which any Lender or any member bank of the Federal Reserve System
is subject with respect to LIBOR, for Eurocurrency Liabilities (as defined in
Regulation D of the Federal Reserve Board). Such reserve percentages shall
include those imposed under such Regulation D. LIBOR Loans shall be deemed to
constitute Eurocurrency Liabilities and as such shall be deemed to be subject to
such reserve requirements without benefit of or credit for proration, exceptions
or offsets that may be available from time to time to the Lenders under such
Regulation D. Statutory Reserves shall be adjusted automatically on and as of
the effective date of any change in any reserve percentage.
"Subordinated Indebtedness" shall mean Indebtedness of the
Borrower and its Subsidiaries that is subordinated in right of payment to the
Obligations on terms no less favorable to the Lenders than those set forth on
Exhibit 1.1B attached hereto.
"Subsidiary" shall mean, as to any Person (a) a corporation,
limited liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock having such
power only by reason of the occurrence of a contingency) to elect a majority of
the board of directors or other managers thereof are at the time owned, or the
management of which is otherwise controlled, directly or indirectly, through one
or more intermediaries, or both, by such Person, or (b) a partnership in which
such Person is a general partner or the management of which is otherwise
controlled, directly or indirectly, through one or more intermediaries or both,
by such Person.
"Swing Line Commitment" shall mean the commitment of the Swing
Line Lender to make Swing Line Loans pursuant to Section 2.2.7.
"Swing Line Facility" shall mean the swing line credit facility
provided by the Swing Line Lender pursuant to the Swing Line Commitment as more
particularly set forth in Section 2.2.7.
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"Swing Line Lender" shall mean AmSouth and any other financial
institution that, subject to approval by the Administrative Agent and the
Borrower, agrees to become a party to this Agreement and to make Swing Line
Loans pursuant to Section 2.2.7. As used herein and in the other Loan Documents,
"Lender" shall include the Swing Line Lender except to the extent that the
context requires otherwise.
"Swing Line Loans" shall mean the loans made by the Swing Line
Lender pursuant to Section 2.2.7.
"Swing Line Note" shall mean the promissory note, in
substantially the form of Exhibit 2.5C, executed by the Borrower in favor of the
Swing Line Lender, evidencing the indebtedness of the Borrower to the Swing Line
Lender in connection with the Swing Line Loans.
"Term Loan Commitments" shall mean, at any time, the commitment
of all the Lenders, collectively, to make Term Loans to the Borrower on the date
hereof pursuant to the provisions of Section 2.2.2, and the "Term Loan
Commitment" of any Lender at any time shall mean an amount equal to such
Lender's Percentage multiplied by the then effective aggregate Term Loan
Commitments. The Term Loan Commitments are in the aggregate amount set forth in
Section 2.1.
"Term Loan Facility" shall mean the term loan facility provided
by the Lenders pursuant to the Term Loan Commitments as more particularly set
forth in Section 2.2.2.
"Term Loan Maturity Date" shall mean July 1, 2006.
"Term Loan Notes" shall mean the promissory notes, substantially
in the form of Exhibit 2.5B, executed by the Borrower in favor of the Lenders,
evidencing the indebtedness of the Borrower to the Lenders in connection with
the Term Loans.
"Term Loans" shall mean the term loans made by the Lenders to
the Borrower pursuant to Section 2.2.2.
"UCC" shall mean the Uniform Commercial Code as in effect in the
State of Tennessee or any other applicable jurisdiction, as the context may
require.
1.2. Accounting and Commercial Terms. As used in this Agreement, all
accounting terms used but not otherwise defined herein shall have the respective
meanings assigned to them in conformity with GAAP. All terms used but not
otherwise defined herein that are defined or used in Article 9 of the UCC shall
have the respective meanings assigned to them in such Article.
1.3. General Construction. As used in this Agreement, the masculine,
feminine and neuter genders and the plural and singular numbers shall be deemed
to include the others in all cases in which they would so apply. "Includes" and
"including" are not limiting, and shall be deemed to be followed by "without
limitation" regardless of whether such words or words of like import in fact
follow same. The word "or" is not intended and shall not be construed to be
exclusive.
1.4. Defined Terms; Headings. The use of defined terms in the Loan
Documents is for convenience of reference and shall not be deemed to be limiting
or to have any other substantive effect with respect to the persons or things to
which reference is made through the use of such defined terms. Article and
section headings and captions in the Loan Documents are included in such Loan
Documents for convenience of reference and shall not constitute a part of the
applicable Loan Documents for any other purpose.
1.5. References to this Agreement and Parts Thereof. As used in this
Agreement, unless otherwise specified the words "hereof," "herein" and
"hereunder" and words of similar import shall refer to this
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Agreement, including all schedules and exhibits hereto, as a whole, and not to
any particular provision of this Agreement, and the words "Article", "Section",
"Schedule" and "Exhibit" refer to articles, sections, schedules and exhibits of
or to this Agreement.
1.6. Documentary References. Any reference herein to any instrument,
document or agreement, by whatever terminology used, shall be deemed to include
any and all amendments, modifications, supplements, extensions, renewals,
substitutions and/or replacements thereof as the context may require.
1.7. Legal References. Any reference herein to any law shall be a
reference to such law as in effect from time to time and shall include any rules
and regulations promulgated or published thereunder and published
interpretations thereof.
ARTICLE 2.
LOANS
2.1. Commitments.
2.1.1. Amounts of Commitments.
(a) The aggregate amount of the Commitments shall be
$60,000,000.
(b) The aggregate amount of the Revolving Credit
Commitments shall be $25,000,000.
(c) The aggregate amount of the Term Loan Commitments shall
be $35,000,000.
2.1.2. Voluntary Reductions of Revolving Credit Commitments.
The Borrower shall have the right, at any time and from time to time, to
terminate in whole or permanently reduce in part, without premium or penalty,
the Revolving Credit Commitments in an amount up to the amount by which the
Revolving Credit Commitments exceed the aggregate amount of the then outstanding
Revolving Loans. The Borrower shall give not less than ten (10) Business Days'
prior written notice to the Administrative Agent designating the date (which
shall be a Business Day) of such termination or reduction and the amount of any
reduction. Promptly after receipt of a notice of such termination or reduction,
the Administrative Agent shall notify each Lender of the proposed termination or
reduction. Such termination or reduction of the Revolving Credit Commitments
shall be effective on the date specified in the Borrower's notice and shall
reduce the Revolving Credit Commitment of each Lender in proportion to its
Percentage of the Revolving Credit Commitments. Any such reduction of the
Revolving Credit Commitments shall be in a minimum amount of $1,000,000 and in
integral multiples of $500,000.
2.2. Loans.
2.2.1. Commitment to Make Revolving Loans. Subject to all of
the terms and conditions of this Agreement (including the conditions set forth
in Sections 6.1 and 6.2) and in reliance upon the representations and warranties
of the Borrower herein set forth, each Lender hereby severally agrees to make
Revolving Loans to the Borrower from time to time during the Revolving
Commitment Period, for the purposes identified in Section 2.7; provided,
however, that in no event shall (a) the aggregate principal amount of Revolving
Loans made by any Lender outstanding at any time exceed such Lender's Revolving
Credit Commitment, or (b) the aggregate principal amount of Revolving Loans
outstanding at any time exceed the Revolving Credit Commitments. Each Lender's
Revolving Credit Commitment shall expire on the Revolving Commitment Period
Expiration Date, and all Revolving Loans shall be paid in full no later than the
Revolving Commitment Period Expiration Date.
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2.2.2. Commitment to Make Term Loans. Subject to all of the
terms and conditions of this Agreement (including the conditions set forth in
Sections 6.1 and 6.2) in reliance upon the representations and warranties of the
Borrower herein set forth, each Lender hereby severally agrees to make Term
Loans to the Borrower on the date hereof and for the purposes identified in
Section 2.7; provided, however, in no event shall (a) the aggregate principal
amount of the Term Loans made by any Lender outstanding at any time exceed such
Lender's Term Loan Commitment, or (b) the aggregate principal amount of the Term
Loans outstanding at any time exceed the Term Loan Commitments. All Term Loans
shall be paid in full no later than the Term Loan Maturity Date.
2.2.3. Lenders' Obligations Several; Proportionate Loans. The
obligations of the Lenders to make Revolving Loans under Section 2.2.1 and Term
Loans under Section 2.2.2 shall be several and not joint and, subject to Section
2.11.4, all Revolving Loans and Term Loans under this Agreement shall be made by
the Lenders simultaneously and proportionately to their respective Percentages
of the Commitments. It is understood and agreed that the failure of any Lender
to make its Revolving Loan as part of any Borrowing under Section 2.2.1 or its
Term Loan as part of any Borrowing under Section 2.2.2 shall not relieve any
other Lender of its obligation to make its Revolving Loan as provided in Section
2.2.1 or its Term Loan under Section 2.2.2. Neither the Administrative Agent nor
any Lender shall be responsible for the failure of any other Lender to make a
Revolving Loan or Term Loan as provided herein nor shall the Commitment of any
Lender be increased as a result of the default by any other Lender in such other
Lender's obligation to make Revolving Loans or Term Loans hereunder.
2.2.4. Revolving Credit; Minimum Borrowings. Amounts borrowed
by the Borrower under the Revolving Credit Commitments may be prepaid and
reborrowed from time to time to during the Revolving Commitment Period. The
aggregate amount of Revolving Loans made on any Funding Date shall be in
integral multiples of $100,000.
2.2.5. Notice of Borrowing.
(a) Delivery of Notice. Whenever the Borrower desires to borrow
under Section 2.2.1, it shall deliver to the Administrative Agent a
Notice of Borrowing no later than 11:00 a.m. (Central time) at least
one (1) Business Day in advance of the proposed Funding Date (in the
case of Base Rate Loans) or three (3) Business Days in advance of the
proposed Funding Date (in the case of LIBOR Loans). The Notice of
Borrowing shall specify (i) the proposed Funding Date (which shall be a
Business Day), (ii) the amount of the proposed Borrowing, (iii) whether
the proposed Borrowing shall be in the form of Base Rate Loans or LIBOR
Loans, and (iv) in the case of LIBOR Loans, the requested Interest
Period. In lieu of delivering a Notice of Borrowing, the Borrower may
give the Administrative Agent telephonic notice by the required time of
notice of any proposed Borrowing under this Section 2.2.5; provided,
however, that such notice shall be promptly confirmed in writing by
delivery of a Notice of Borrowing to the Administrative Agent on or
prior to the Funding Date of the requested Revolving Loans. The
execution and delivery of each Notice of Borrowing shall be deemed a
representation and warranty by the Borrower that the requested
Revolving Loans may be made in accordance with, and will not violate
the requirements of, this Agreement, including those set forth in
Section 2.2.1.
(b) No Liability for Telephonic Notices. Neither the
Administrative Agent nor any Lender shall incur any liability to the
Borrower in acting upon any telephonic notice given pursuant to this
Section 2.2.5 that the Administrative Agent believes in good faith to
have been given by a duly authorized officer or other person authorized
to borrow on behalf of the Borrower or for otherwise acting in good
faith under this Section 2.2.5 and, upon the funding of Revolving Loans
by the Lenders in accordance with this Agreement pursuant to any
telephonic notice, the Borrower shall have effected a Borrowing of
Revolving Loans hereunder.
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(c) Notice Irrevocable. A Notice of Borrowing for LIBOR Loans
(or a telephonic notice in lieu thereof) shall be irrevocable on and
after the related Interest Rate Determination Date, and the Borrower
shall be bound to make a Borrowing in accordance therewith.
2.2.6. Disbursement of Funds. Promptly after receipt of a Notice
of Borrowing (or telephonic notice in lieu thereof), the Administrative Agent
shall notify each Lender of the proposed Borrowing in writing, or by telephone
promptly confirmed in writing. Each Lender shall make the amount of its
Revolving Loan available to the Administrative Agent, in immediately available
funds, at the Lending Office of the Administrative Agent, not later than 11:00
a.m. (Central time) on the Funding Date. The Administrative Agent shall make the
proceeds of such Revolving Loans available to the Borrower on such Funding Date
by causing an amount of immediately available funds equal to the proceeds of all
such Revolving Loans received by the Administrative Agent to be credited to the
account of the Borrower at such office of the Administrative Agent.
2.2.7. Swing Line Loans.
(a) Commitment to Make Swing Line Loans. Subject to all of the
terms and conditions of this Agreement (including the conditions set
forth in Sections 6.1 and 6.2 and the limitations set forth in Section
2.2.1), and in reliance upon the representations and warranties of the
Borrower herein set forth and the agreements of the other Lenders set
forth in subsections (c) and (d) of this Section 2.2.7, the Swing Line
Lender hereby agrees to make Swing Line Loans to the Borrower from time
to time during the Revolving Commitment Period, in an aggregate
principal amount not to exceed $2,500,000 outstanding at any time, for
the purposes identified in Section 2.7. Amounts borrowed by the
Borrower under the Swing Line Commitment may be prepaid and reborrowed
from time to time during the Revolving Commitment Period. The Swing
Line Lender's commitment to make Swing Line Loans as provided in this
subsection 2.2.7(a) shall expire on the Revolving Commitment Period
Expiration Date, and all Swing Line Loans shall be paid in full no
later than the Revolving Commitment Period Expiration Date.
(d) Funding Procedures for Swing Line Loans. Except to the
extent that funding of Swing Line Loans is being administered through
an automated cash management system mutually approved in writing by the
Borrower and the Swing Line Lender, the Borrower shall give to the
Swing Line Lender written notice (or oral notice to be confirmed
promptly in writing) of a proposed Swing Line Loan Borrowing,
specifying the amount of the requested Swing Line Loan, not later than
11:00 a.m., Central time, on the Business Day of the proposed
Borrowing. Each request for a Swing Line Loan shall be deemed a
representation and warranty by the Borrower that the requested Swing
Line Loan may be made in accordance with, and will not violate the
requirements of, this Agreement, including those set forth in
subsection 2.2.7(a). Not later than 2:00 p.m., Central time, on the
Business Day of the proposed Swing Line Loan Borrowing, the Swing Line
Lender shall make the proceeds of the requested Swing Line Loan
available to the Borrower at the office of the Swing Line Lender by
crediting an account of the Borrower maintained at such office.
(e) Repayment of Swing Line Loans With Revolving Loans.
Regardless of whether the conditions set forth in Sections 6.1 and 6.2
have been or are capable of being satisfied, on any Business Day the
Swing Line Lender may, in its sole discretion, give notice to the
Lenders that some part or all of the outstanding Swing Line Loans are
to be repaid on the next succeeding Business Day with a Borrowing of
Revolving Loans constituting Base Rate Loans made pursuant to Section
2.2.1 in the same manner and with the same force and effect as if the
Borrower had submitted a Notice of Borrowing therefor pursuant to
Section 2.2.5. Subject to and in accordance with Sections 2.2.1 and
2.2.3, each Lender shall make the amount of its Revolving Loan
available to the Administrative Agent, in immediately available funds,
at the Lending Office of the Administrative Agent, not later than 11:00
a.m. (Central time) on the applicable Funding Date. The Administrative
Agent shall make the proceeds of such Revolving Loans available to the
Swing Line Lender on such Funding Date by
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causing an amount of immediately available funds equal to the proceeds of all
such Revolving Loans received by the Administrative Agent to be credited to an
account of the Swing Line Lender at such office of the Administrative Agent, or
shall make such proceeds available to the Swing Line Lender in such other manner
as shall be satisfactory to the Administrative Agent and the Swing Line Lender.
(f) Participations in Swing Line Loans. If for any reason a requested
Borrowing of Revolving Loans pursuant to subsection 2.2.7(c) is not or cannot be
effected, the Lenders will immediately purchase from the Swing Line Lender, as
of the date such proposed Borrowing otherwise would have occurred but adjusted
for any payments received in respect of such Swing Line Loan(s) by or for the
account of the Borrower on or after such date but prior to such purchase, such
participations in the outstanding Swing Line Loans as shall be necessary to
cause the Lenders to share in such Swing Line Loan(s) proportionately in
accordance with their respective Percentages of the Revolving Credit
Commitments. Whenever, at any time after any Lender has purchased a
participating interest in a Swing Line Loan, the Swing Line Lender receives any
payment on account thereof, the Swing Line Lender will distribute to such Lender
its proportionate share of such amount (appropriately adjusted, in the case of
interest payments, to reflect the period of time during which such Lender's
participating interest was outstanding and funded); provided, however, that in
the event any such payment received by the Swing Line Lender is subsequently set
aside or is required to be refunded, returned or repaid, such Lender will repay
to the Swing Line Lender its proportionate share thereof.
(g) Failure to Pay by Lenders. If any Lender shall fail to perform its
obligation to make a Revolving Loan pursuant to subsection 2.2.7(c) or to
purchase a participation in Swing Line Loans pursuant to subsection 2.2.7(d),
the amount in default shall bear interest for each day from the day such amount
is payable until fully paid at a rate per annum equal to the Federal Funds Rate
or any other rate customarily used by banks for the correction of errors among
banks, but in no event to exceed the Highest Lawful Rate, and such obligation
may be satisfied by application by the Administrative Agent (for the account of
the Swing Line Lender) of any payment that such Lender otherwise is entitled to
receive under this Agreement. Pending repayment, each such advance shall be
secured by such Lender's participation interest, if any, in the Swing Line Loans
and any security therefor, and the Swing Line Lender shall be subrogated to such
Lender's rights hereunder in respect thereof.
(h) Lenders' Obligations Absolute. The obligation of each Lender to
make Revolving Loans pursuant to subsection 2.2.7(c) and to purchase
participations in Swing Line Loans pursuant to subsection 2.2.7(d) shall be
unconditional and irrevocable, shall not be subject to any qualification or
exception whatsoever, shall be made in accordance with the terms and conditions
of this Agreement under all circumstances and shall be binding in accordance
with the terms and conditions of this Agreement under all circumstances,
including the following circumstances:
(1) any lack of validity or enforceability of this Agreement, any
of the other Loan Documents or any other instrument, document or
agreement relating to the transactions that are the subject thereof;
(2) the existence of any claim, set-off, defense or other right
that the Borrower, any Guarantor or any Lender may have at any time
against the Administrative Agent, the Swing Line Lender, any other
Lender or any other Person, whether in connection with this Agreement,
the transactions contemplated herein or any related transactions;
(3) the surrender or impairment of any security for the performance
or observance of any of the terms of this Agreement;
(4) the occurrence or continuance of any Default;
18
(5) any adverse change in the condition (financial or other)
of the Borrower or any Guarantor; or
(6) any other reason.
2.3. Interest.
2.3.1. Interest Rate on Loans. Subject to Section 2.3.3, the unpaid
principal balances of the Loans shall bear interest from their respective
Funding Dates through maturity (whether by acceleration or otherwise) (including
post-petition interest in any case or proceeding under applicable bankruptcy
laws) at a rate determined by reference to the Base Rate or LIBOR. The
applicable basis for determining the rate of interest for Revolving Loans and
Term Loans shall be selected by the Borrower at the time a Notice of Borrowing
is given pursuant to Section 2.2.5 or at the time a Notice of
Conversion/Continuation is given pursuant to Section 2.4.2. If on any day any
Revolving Loan or Term Loan is outstanding with respect to which notice has not
been delivered to the Administrative Agent in accordance with the terms of this
Agreement specifying the basis for determining the rate of interest, then for
that day such Revolving Loan or Term Loan shall bear interest determined by
reference to the Base Rate. The Loans shall bear interest as follows:
(a) if a Swing Line Loan or a Base Rate Loan, then at a
fluctuating rate per annum equal to the sum of the Base Rate, as it varies
from time to time, plus the Applicable Base Rate Margin; or
(b) if a LIBOR Loan, then at a rate per annum equal to the sum of
LIBOR plus the Applicable LIBOR Margin.
2.3.2. Default Rate. Upon the occurrence and during the continuance
of an Event of Default, the unpaid principal balances of the Loans and, to the
extent permitted by applicable law, any unpaid interest accrued in respect of
the Loans shall bear interest at the Default Rate; provided, however, that in
the case of LIBOR Loans, upon the expiration of the Interest Period in effect at
the time any such increase in interest rate is effective, such LIBOR Loans shall
thereupon become Base Rate Loans and thereafter bear interest at the
corresponding Default Rate. Interest accruing pursuant to this Section 2.3.2
shall be payable upon demand.
2.3.3. Conclusive Determination. Each determination by the
Administrative Agent of an interest rate under this Agreement shall be
conclusive and binding for all purposes, absent manifest error.
2.3.4. Maximum Number of Interest Periods. No more than four (4)
Interest Periods may be in effect in respect of outstanding LIBOR Loans at any
time.
2.4. Conversion or Continuation.
2.4.1. Option to Convert or Continue. Subject to the provisions of
Section 2.11, the Borrower shall have the option (a) at any time to convert all
or any part of any outstanding Base Rate Loans in an aggregate minimum amount of
$500,000 and integral multiples of $100,000 in excess of that amount from Base
Rate Loans to LIBOR Loans, and (b) upon the expiration of any Interest Period
applicable to a specific Borrowing of LIBOR Loans, to continue all or any
portion of such Loans in an aggregate minimum amount of $500,000 and integral
multiples of $100,000 in excess of that amount as LIBOR Loans, and the
succeeding Interest Period of such continued LIBOR Loans shall commence on the
expiration date of the Interest Period previously applicable thereto.
2.4.2 Notice of Conversion/Continuation. The Borrower shall deliver
a Notice of Conversion/Continuation to the Administrative Agent no later than
11:00 a.m. (Central time) at least three (3) Business Days in advance of the
proposed conversion/continuation date. A Notice of Conversion/Continuation
19
shall specify (a) the proposed conversion/continuation date (which shall be a
Business Day), (b) the aggregate amount of Loans to be converted/continued, (c)
the nature of the proposed conversion/continuation, and (d) the requested
Interest Period. In lieu of delivering a Notice of Conversion/Continuation, the
Borrower may give the Administrative Agent telephonic notice by the required
time of any proposed conversion/continuation under this Section 2.4; provided,
however, that such notice shall be promptly confirmed in writing by a Notice of
Conversion/Continuation delivered to the Administrative Agent on or before the
proposed conversion/continuation date. The execution and delivery of each Notice
of Conversion/Continuation shall be deemed a representation and warranty by the
Borrower that the requested conversion/continuation may be made in accordance
with, and will not violate the requirements of, this Agreement, including those
set forth in Sections 2.4.1 and 2.11.1.
2.4.3. Notice to the Lenders. Promptly after receipt of a Notice
of Conversion/Continuation (or telephonic notice in lieu thereof), the
Administrative Agent shall notify each Lender of the proposed conversion or
continuation. Neither the Administrative Agent nor the Lender shall incur any
liability to the Borrower in acting upon any telephonic notice referred to above
that the Administrative Agent believes in good faith to have been given by a
duly authorized officer or other person authorized to act on behalf of the
Borrower or for otherwise acting in good faith under this Section 2.4 and, upon
conversion/continuation by the Administrative Agent in accordance with this
Agreement pursuant to any telephonic notice, the Borrower shall have effected a
conversion/continuation of Loans hereunder.
2.4.4. Notice Irrevocable. A Notice of Conversion/Continuation
shall be irrevocable on and after the related Interest Rate Determination Date,
and the Borrower shall be bound to convert or continue such Loan in accordance
therewith.
2.4.5. Automatic Conversion. In the event any LIBOR Loan is
unpaid upon the expiration of the Interest Period applicable thereto and a
Notice of Conversion/Continuation has not been given in the manner provided in
Section 2.4.2, such LIBOR Loan shall, effective as of the last day of such
Interest Period, become a Base Rate Loan.
2.5. Notes; Records of Payments. Each Revolving Loan made by a Lender
to the Borrower pursuant to this Agreement shall be evidenced by a Revolving
Note payable to the order of such Lender in an amount equal to such Lender's
Percentage of the aggregate amount of the Revolving Credit Commitments, each
Term Loan made by a Lender to the Borrower pursuant to this Agreement shall be
evidenced by a Term Note payable to the order of such Lender in an amount equal
to such Lender's Percentage of the aggregate amount of the Term Loan
Commitments, and the Swing Line Loans made by the Swing Line Lender to the
Borrower pursuant to this Agreement shall be evidenced by the Swing Line Note.
Each Lender (including the Swing Line Lender) hereby is authorized to record and
endorse the date and principal amount of each Loan made by it, and the amount of
all payments and prepayments of principal and interest made to such Lender with
respect to such Loans, on a schedule annexed to and constituting a part of the
corresponding Note(s) of such Lender, which recordation and endorsement shall
constitute prima facie evidence of such Loans made by such Lender to the
Borrower and payments made by the Borrower to such Lender, absent manifest
error; provided, however, that (a) failure by any Lender to make any such
recordation or endorsement shall not in any way limit or otherwise affect the
obligations of the Borrower or the rights and remedies of the Lenders under this
Agreement or the Notes, and (b) payments of principal and interest on the Loans
to the Lenders shall not be affected by the failure to make any such recordation
or endorsement thereof. In lieu of making recordation or endorsement, the
Lenders hereby are authorized, at their option, to record the payments or
prepayments on their respective books and records in accordance with their usual
and customary practice, which recordation shall constitute prima facie evidence
of the Loans made by the Lenders to the Borrower and the payments and
prepayments made by the Borrower to the Lenders, absent manifest error.
2.6. Administrative Agent's Right to Assume Funds Available. The
Administrative Agent may assume that each Lender has made the proceeds of its
Revolving Loans or Term Loans, as the case may be, available to the
Administrative Agent on the corresponding Funding Date in the event the
applicable
20
conditions precedent to funding the requested Revolving Loans or Term Loans, as
the case may be, set forth in Article 6 have been satisfied or waived in
accordance with Section 14.3, and the Administrative Agent, in its sole
discretion, may, but shall not be obligated to, advance all or any portion of
the amount of any requested Borrowing on such Funding Date to the Borrower prior
to receiving the proceeds of the corresponding Revolving Loans or Term Loans, as
the case may be, from the Lenders. If the Administrative Agent has advanced
proceeds of any Revolving Loan or Term Loan to the Borrower on behalf of any
Lender and such Lender fails to make available to the Administrative Agent its
Percentage share of such Loan as required by Section 2.2, the Administrative
Agent shall be entitled to recover such amount on demand from such Lender. If
such Lender does not pay such amount forthwith upon the Administrative Agent's
demand therefor, the Administrative Agent shall notify the Borrower and the
Borrower shall pay such amount to the Administrative Agent. The Administrative
Agent also shall be entitled to recover from such Lender interest at the
applicable rate for such Loan, but in no event to exceed the Highest Lawful
Rate, on such amount so advanced on behalf of such Lender for each day from the
date such amount was made available by the Administrative Agent to the Borrower
to the date such amount is recovered by the Administrative Agent. Nothing herein
shall be deemed to relieve any Lender from its obligation to fulfill such
Lender's Commitments or to prejudice any rights that the Administrative Agent or
the Borrower may have against any Lender as a result of any default by such
Lender hereunder.
2.7. Use of Proceeds. The proceeds of the Loans will be used by the
Borrower to refinance the outstanding principal amount owed by the Borrower
under that certain Amended and Restated Revolving Credit Agreement dated
February 15, 2001, by and between Borrower and AmSouth, as amended to date, for
working capital purposes and for other general corporate purposes (including,
without limitation, Permitted Acquisitions), and will not be used by the
Borrower for any purpose prohibited by the terms of this Agreement or by any
law.
2.8. Credit Fees. In consideration for the obligations of the
Administrative Agent and the Lenders set forth herein, the Borrower shall pay
the following credit fees:
2.8.1. Administrative Agent's Fees. Pursuant to one or more separate
agreements with the Administrative Agent, the Borrower shall pay to the
Administrative Agent the fees and charges specified therein for the services of
the Administrative Agent in acting as such hereunder.
2.8.2. Facility Initiation Fees. In consideration of each Lender's
agreement to participate in the Facilities as provided herein, the Borrower
agrees to pay to each Lender a fee in an amount equal to twenty one-hundredths
of one percent (0.20%) of such Lender's Percentage of the Commitments hereunder.
Such fees shall be due and payable upon the execution and delivery of this
Agreement by the Borrower. Upon payment, such fees shall be deemed to have been
fully earned and are nonrefundable.
2.8.3. Commitment Fees. The Borrower agrees to pay to the
Administrative Agent, for distribution to the Lenders in proportion to their
respective Percentages, annual commitment fees for the period commencing on the
date hereof to but excluding the Revolving Commitment Period Expiration Date
equal to the average of the daily unused portion of the Revolving Credit
Commitments (i.e., the aggregate amount of the Revolving Credit Commitments less
the aggregate amount of Revolving Loans outstanding) multiplied by the
Applicable Commitment Fee Percentage ("Commitment Fees"). Commitment Fees shall
be payable in quarter-annual installments, in arrears, on January 1, April 1,
July 1 and October 1 of each year, commencing October 1, 2001, and on the
Revolving Commitment Period Expiration Date.
2.9. Computations. To the extent permitted by applicable law, all
computations of fees and interest under this Agreement payable in respect of any
period shall be made by the Administrative Agent on the basis of a 360-day year,
in each case for the actual number of days (including the first day but
excluding the last day) occurring in the period for which such fees or interest
are payable. In computing interest on any Loan, the date of the making of such
Loan or the first day of an Interest Period, as the case may be, shall be
included and the date of payment or the expiration date of an Interest Period,
as the case may be, shall be
21
excluded; provided, however, that if a Loan is repaid on the same day on which
it is made, one day's interest shall be paid on that Loan.
2.10. Interest and Fees Margins. For purposes of interest and fee
computations hereunder involving the Applicable Base Rate Margin, the Applicable
LIBOR Margin and the Applicable Commitment Fee Percentage, such margins and
percentages shall be determined as follows:
Applicable
Applicable Applicable Commitment
LIBOR Base Rate Fee
Tier Margin Margin Percentage
---- ------ ------ ----------
1 0.75% 0.00% 0.125%
2 1.00% 0.00% 0.15%
3 1.50% 0.00% 0.20%
4 2.00% 0.00% 0.25%
Except as expressly hereinafter provided, the applicable tier at any time
shall be determined with reference to the Borrower's Funded Indebtedness to
EBITDA Ratio at such time (provided, however, for purposes of this Section 2.10,
Pro Forma Effect shall not be given with respect to any Asset Acquisitions
except Borrower's acquisition of Euroball), as follows:
Tier Funded Indebtedness to EBITDA Ratio
---- -----------------------------------
1 Equal to or less than 1.25 to 1.00
2 Greater than 1.25 to 1.00 but equal to or less than 1.75 to 1.00
3 Greater than 1.75 to 1.00 but equal to or less than 2.25 to 1.00
4 Greater than 2.25 to 1.00
From the date hereof to but not including the first Pricing Tier
Determination Date after December 31, 2001, Tier 3 shall be applicable. Any
adjustment in the margins set forth above shall take effect on the first Pricing
Tier Determination Date following the Last Four Fiscal Quarters as to which such
ratio was calculated.
2.11. Special Provisions Governing LIBOR Loans. Notwithstanding other
provisions of this Agreement, the following provisions shall govern with respect
to LIBOR Loans as to the matters covered:
2.11.1. Determination of Interest Period. By giving a Notice of
Borrowing pursuant to Section 2.2.5, the Borrower shall have the option, subject
to the other provisions of this Section 2.11.1, to specify whether the Interest
Period commencing on the date specified therein shall be a one, two or
three-month period; provided that:
(a) in the case of immediately successive Interest Periods, each
successive Interest Period shall commence on the day on which the next
preceding Interest Period expires;
(b) if any Interest Period otherwise would expire on a day that is
not a Business Day, that Interest Period shall be extended to expire on the
next succeeding Business Day; provided, however, that if any such Interest
Period would otherwise expire on a day that is not a Business Day but is a
day of the month after which no further Business Day occurs in that month,
that Interest Period shall expire on the immediately preceding Business
Day;
22
(c) any Interest Period that begins on the last Business Day of
a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall, subject to paragraph (d) below, end on the last Business Day of a
calendar month; and
(d) no Interest Period shall extend beyond the Revolving
Commitment Period Expiration Date.
2.11.2. Determination of Interest Rate. As soon as is practicable
after 11:00 a.m. (Central time) on the Interest Rate Determination Date, the
Administrative Agent shall determine (which determination shall, absent manifest
error, be final, conclusive and binding upon all parties) the interest rate that
shall apply to the LIBOR Loans for which an interest rate is then being
determined for the applicable Interest Period and shall promptly give notice
thereof (in writing or by telephone confirmed in writing) to the Borrower and to
each Lender.
2.11.3. Inability to Determine Rate. In the event the Administrative
Agent shall have determined (which determination shall be conclusive and binding
absent manifest error) that by reason of circumstances affecting the London
interbank Eurodollar market, adequate and reasonable means do not exist for
ascertaining Base LIBOR, the Administrative Agent forthwith shall give
telephonic notice of such determination, confirmed in writing, to the Borrower
and to each Lender. If such notice is given, and until such notice has been
withdrawn by the Administrative Agent, no additional LIBOR Loans shall be made.
2.11.4. Illegality; Termination of Commitment to Make LIBOR Loans.
Notwithstanding any other provisions of this Agreement, if any law, treaty, rule
or regulation or determination of a court or other governmental authority, or
any change therein or in the interpretation or application thereof, shall make
it unlawful for any Lender to make or maintain LIBOR Loans, as contemplated by
this Agreement, then, and in any such event, such Lender shall be an "Affected
Lender" and shall promptly give notice (by telephone confirmed in writing) to
the Borrower and the Administrative Agent (which notice the Administrative Agent
shall promptly transmit to each Lender in writing, or by telephone confirmed in
writing) of such determination, and the obligation of the Affected Lender to
make LIBOR Loans shall be terminated, and its obligation to maintain its LIBOR
Loans during such period shall be terminated at the earlier to occur of the
termination of the last Interest Period then in effect or when required by law.
Thereafter, and until such notice has been withdrawn by the Affected Lender, the
Affected Lender shall have no obligation to make LIBOR Loans, and any LIBOR
Loans of the Affected Lender then outstanding shall be converted into Base Rate
Loans as of the end of the corresponding Interest Period for each.
2.11.5. LIBOR Loans After Default. Unless all Lenders shall
otherwise agree, after the occurrence of and during the continuance of a
Default, the Borrower may not elect to have a Loan be made or continued as, or
converted to, a LIBOR Loan.
2.12. Expenses. The Borrower shall reimburse the Administrative Agent, on
demand, for all reasonable attorneys' and paralegals' fees and expenses of
counsel to the Administrative Agent, all fees and expenses for title, lien and
other public records searches, all filing and recordation fees and taxes, all
duplicating expenses, corporation search fees, appraisal fees and escrow agent
fees and expenses and all other customary fees and expenses incurred in
connection with (a) the negotiation, documentation and closing of the
transactions contemplated hereby, (b) the perfection of or the continued
perfection of the security interests contemplated hereby, and (c) the review and
preparation of any documentation in connection with, and the approval by the
Lenders of, any matter for which the Lenders' approval is requested or required
hereunder. The obligations described in this Section 2.12 regarding the payment
of expenses are independent of all other obligations of the Borrower hereunder,
shall survive the expiration or termination of the Commitments and shall be
payable regardless of whether the financing transactions contemplated by this
Agreement shall be consummated.
23
ARTICLE 3.
PAYMENTS, PREPAYMENTS AND COMPUTATIONS
3.1. General Provisions Relating to Repayment of Loans. The Loans shall
be repaid as provided in this Section 3.1.
3.1.1. Interest Payments. The interest accrued on each Loan shall be
payable on each Interest Payment Date applicable to such Loan, upon any
prepayment of any LIBOR Loan (to the extent accrued on the amount being prepaid)
and at maturity.
3.1.2. Scheduled Term Loan Principal Payments. Principal of the Term
Loans shall be repaid in equal, quarterly installments of $1,750,000 each, with
the first installment due and payable on October 1, 2001, and subsequent
installments due and payable on each January 1, April 1, July 1, and October 1
thereafter; provided, however, that in connection with any payment of principal
of the Term Loans consisting of LIBOR Loans, the Borrower shall pay to the
Administrative Agent, for distribution to the Lenders, the accrued interest on
such Loan required to be paid pursuant to Section 3.1.1 and any amounts required
to be paid pursuant to Section 3.3.3.
3.1.3. Prepayments.
(a) Optional Prepayments.
(1) The Borrower may prepay Swing Line Loans, in whole or in
part, at any time and from time to time. Except to the extent that
repayment of Swing Line Loans is being administered through an
automated cash management system mutually approved in writing by the
Borrower and the Swing Line Lender, the Borrower shall, prior to or
contemporaneously with making any such prepayment, give the Swing
Line Lender such notice of prepayment as is sufficient to enable the
Swing Line Lender to apply such prepayment properly to the repayment
of Swing Line Loans.
(2) The Borrower may, upon not less than one (1) Business
Day's prior written or telephonic notice confirmed in writing to the
Administrative Agent (in the case of Base Rate Loans), and upon not
less than three (3) Business Days' prior written or telephonic
notice confirmed in writing to the Administrative Agent (in the case
of LIBOR Loans) (each of which notices the Administrative Agent will
promptly transmit to each Lender in writing, or by telephone
confirmed in writing), at any time and from time to time prepay any
Borrowing of Revolving Loans or Term Loans (as the Borrower may
specify to the Administrative Agent) in whole or in part in integral
multiples of $50,000; provided, however, that LIBOR Loans may only
be prepaid in part if, after such prepayment, the unpaid portion of
such Loans shall have aggregate minimum balances of $100,000; and
provided further that in connection with any prepayment of LIBOR
Loans, the Borrower shall pay to the Administrative Agent, for
distribution to the Lenders, the accrued interest on such Loan
required to be paid pursuant to Section 3.1.1 and any amounts
required to be paid pursuant to Section 3.3.3; and provided further
that any prepayments of the Term Loans shall be applied to scheduled
Term Loan principal payments in the inverse order of their maturity.
(b) Mandatory Prepayments.
(1) The Borrower shall prepay Loans with (a) all of the net
proceeds of the sale by the Borrower or any Guarantor of any stock
or other securities (other than net proceeds not exceeding
$10,000,000 during the term of the Facilities of the sale by the
Borrower of
24
common stock issued upon the exercise of stock options pursuant to the
NN, Inc. Stock Incentive Plan and other than the sale by a Guarantor
of stock or other securities to the Borrower or another Guarantor) or
the incurrence of any Indebtedness for borrowed money other than
Indebtedness permitted hereunder; (b) all of the net proceeds of the
sale or other disposition of assets except for (i) dispositions
permitted pursuant to clauses (a), (b) and (c) of Section 9.3 and (ii)
dispositions permitted pursuant to clause (d) of Section 9.3 to the
extent such dispositions do not exceed an aggregate amount of $100,000
in any Fiscal Year; and (c) all payments received by Borrower pursuant
to (i) that certain Promissory Note date _________, 2000, in the
original principal amount of $720,000, executed by NN General, LLC, a
Delaware limited liability company ("NN General"); (ii) that certain
Promissory Note dated December 27, 2000, in the original principal
amount of $320,000, executed by NN General and payable to the order of
Borrower; and (iii) that certain Promissory Note dated March ___,
2000, in the original principal amount of $2,400,000, executed by NN
General and payable to the order of Borrower; provided, however, that
in connection with any prepayment of LIBOR Loans, the Borrower shall
pay to the Administrative Agent, for distribution to the Lenders, the
accrued interest on such Loan required to be paid pursuant to Section
3.1.1 and any amounts required to be paid pursuant to Section 3.3.3;
and provided further that any prepayments of the Term Loans shall be
applied to scheduled Term Loan principal payments in the inverse order
of their maturity; and provided, further, that this section shall not
be construed to permit the Borrower to take any action not otherwise
permitted hereunder. Any prepayment pursuant to this paragraph (1)
shall be applied first to scheduled Term Loan principal payments in
the inverse order of their maturity, and then to outstanding Revolving
Loans, in each case applied first to Base Rate Loans until the same
have been fully repaid, and then to LIBOR Loans. The amount of the
Commitments shall be reduced pro rata among the Lenders by the amount
of any prepayment made pursuant to this paragraph (1), with reductions
in the Commitments applied first to the Term Loan Commitments until
the same have been fully reduced, then to the Revolving Credit
Commitments until the same have been fully reduced, and then to the
Swing Line Commitment.
(2) The Borrower shall prepay Loans to the extent necessary so
that the aggregate principal amount of Loans outstanding at any time
does not exceed the Commitments then in effect; provided, however,
that in connection with any prepayment of LIBOR Loans, the Borrower
shall pay to the Administrative Agent, for distribution to the
Lenders, the accrued interest on such Loan required to be paid
pursuant to Section 3.1.1 and any amounts required to be paid pursuant
to Section 3.4.5. Any prepayment pursuant to this paragraph (2) shall
be applied first to Swing Line Loans until the same have been fully
repaid, then to Base Rate Loans until the same have been fully repaid,
and then to LIBOR Loans.
3.1.4. Final Maturity of Loans. In all events, (a) the entire
aggregate principal balances of, all accrued and unpaid interest on and all fees
and other sums due and payable in respect of the Revolving Loans and the Swing
Line Loans shall be due and payable in full on the Revolving Commitment Period
Expiration Date if not sooner paid, and (b) the entire aggregate principal
balances of, all accrued and unpaid interest on and all fees and other sums due
and payable in respect to the Term Loans shall be due and payable in full on the
Term Loan Maturity Date.
3.2. Payments and Computations, Etc.
3.2.1. Time and Manner of Payments. Except as otherwise expressly set
forth herein, all payments of principal, interest and fees hereunder and under
the Notes shall be in lawful currency of the United States of America, in
immediately available (same day) funds, and delivered to the Administrative
Agent at its Lending Office for its account, the account of the Lenders or the
account of the Swing Line Lender, as the case may be (or in the case of Swing
Line Loans and if so directed by the Swing Line Lender,
25
delivered directly to the Swing Line Lender), not later than 11:00 a.m. (Central
time) on the date due. As soon as is practicable thereafter, the Administrative
Agent shall cause to be distributed like funds relating to the payment of
principal or interest or fees ratably to the Lenders in accordance with their
respective Percentages (other than amounts payable pursuant to Sections 2.8.1,
3.3 and 3.4, which are to be distributed other than ratably). Funds received by
the Administrative Agent after the time specified in the first sentence of this
paragraph shall be deemed to have been paid by the Borrower on the next
succeeding Business Day.
3.2.2. Payments on Non-Business Days. Whenever any payment to be made
hereunder or under the Notes shall be stated to be due on a day that is not a
Business Day, the payment shall be made on the next succeeding Business Day and
such extension of time shall be included in the computation of the payment of
interest hereunder or under the Notes or of the fees payable hereunder, as the
case may be; provided, however, that in the event that the day on which payment
relating to a LIBOR Loan is due is not a Business Day but is a day of the month
after which no further Business Day occurs in that month, then the due date
thereof shall be the next preceding Business Day.
3.2.3. Apportionment of Payments. Aggregated principal and interest
payments shall be apportioned among all outstanding Loans to which such payments
relate, and shall be apportioned ratably among the Lenders in proportion to the
Lenders' respective Percentages of the corresponding Loans (except for payments
in respect of Swing Line Loans, which shall be apportioned and distributed
entirely to the Swing Line Lender). The Administrative Agent shall promptly
distribute to each Lender at its Lending Office its Percentage of all such
payments received by the Administrative Agent. Notwithstanding the foregoing
provisions of this Section 3.2.3, if, pursuant to the provisions of Section
2.11.4, any Notice of Borrowing is withdrawn as to any Affected Lender or if any
Affected Lender makes Base Rate Loans in lieu of its Percentage of LIBOR Loans,
the Administrative Agent shall give effect thereto in apportioning payments
received thereafter.
3.2.4. Assumption of Payments Made. Unless the Administrative Agent
shall have received notice from the Borrower prior to the date on which any
payment is due to the Administrative Agent for the benefit of the Lenders
hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each Lender on such
due date an amount equal to the amount then due such Lender. If and to the
extent the Borrower shall not have so made such payment in full to the
Administrative Agent, each Lender shall repay to the Administrative Agent
forthwith on demand such amount distributed to such Lender together with
interest thereon, for each day from the date such amount is distributed to such
Lender until the date such Lender repays such amount to the Administrative
Agent, at the Federal Funds Rate, but in no event to exceed the Highest Lawful
Rate.
3.2.5. Application of Proceeds. After the occurrence and during the
continuance of an Event of Default, unless otherwise set forth in this Agreement
or the other Loan Documents, all payments received by the Administrative Agent
from the enforcement of remedies under the Loan Documents or otherwise with
respect to the Obligations shall be applied (a) first, to the payment of any
fees, expenses, reimbursements or indemnities then due from the Borrower to the
Administrative Agent; (b) second, to the payment of any fees, expenses,
reimbursements or indemnities then due from the Borrower to the Lenders, or any
of them; (c) third, to the ratable payment of interest due from the Borrower
with respect to any of the Loans; (d) fourth, to the ratable payment of
principal of any of the Loans of the Borrower, and (e) fifth, to pay all other
Obligations. Amounts applied to the interest on or principal of Loans as
aforesaid shall be applied to the interest on or principal of outstanding Swing
Line Loans, if any, prior to application of same to Revolving Loans.
3.3. Increased Costs, Capital Requirements and Taxes.
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3.3.1. Increased Costs. Except to the extent reimbursed pursuant to
other provisions of this Section 3.3, in the event that either (i) the
introduction of, or any change in, or in the interpretation of, any law or
regulation or (ii) compliance with any guideline or request from any central
bank or other Governmental Authority (regardless of whether having the force of
law):
(a) does or shall subject any Lender to any additional income,
preference, minimum or excise tax or to any additional tax of any kind
whatsoever with respect to this Agreement, the Notes or any of the Loans or
change the basis of taxation of payments to such Lender of principal,
commitment fees, interest or any other amount payable hereunder (except for
changes in the rate of tax on the overall gross or net income of that
Lender or its foreign branch, agency or subsidiary); or
(b) does or shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan, FDIC insurance or similar requirement
against assets held by, or deposits or other liabilities in or for the
account of, advances or loans by, or other credit extended by, or any other
acquisition of funds by, any office of such Lender (except, with respect to
LIBOR Loans, to the extent that the reserve requirements are reflected in
the definition of "LIBOR"); or
(c) does or shall impose on that Lender any other condition;
and the result of any of the foregoing is to increase the cost to that Lender of
making, renewing or maintaining the Loans or the Commitments or to reduce any
amount receivable hereunder or thereunder; then, in any such case, the Borrower
shall promptly pay to such Lender, upon demand, such additional amounts as are
sufficient to compensate such Lender for any such additional cost or reduced
amount received.
3.3.2. Capital Requirements - General. If either (i) the introduction
of, or any change in, or in the interpretation of, any law or regulation or (ii)
compliance with any guideline or request from any central bank or other
Governmental Authority (regardless of whether having the force of law), affects
or would affect in any way the amount of capital required or expected to be
maintained by any Lender or any corporation controlling such Lender with the
effect of reducing the rate of return on such capital to a level below the rate
that such Lender or such other corporation could have achieved but for such
introduction, change or compliance, and such Lender reasonably determines that
such reduction is based on the existence of such Lender's Commitments hereunder
and other commitments of this type, then upon demand by such Lender, the
Borrower shall further pay to such Lender from time to time as specified by such
Lender such additional amounts as are sufficient to compensate such Lender or
other corporation for such reduction.
3.3.3. Breakage Costs - LIBOR Loans. The Borrower shall indemnify and
hold each Lender free and harmless from all losses, liabilities and reasonable
expenses (including any loss sustained by that Lender in connection with the
re-employment of such funds), that such Lender may sustain: (a) if for any
reason (other than a default by such Lender or the Administrative Agent) a
Borrowing of LIBOR Loans does not occur on a date specified therefor in a Notice
of Borrowing or a telephonic request for borrowing or a continuation of or
conversion to LIBOR Loans does not occur on a date specified therefor in a
Notice of Conversion/Continuation or in a telephonic request for
conversion/continuation, (b) if any prepayment of any of its LIBOR Loans occurs
on a date that is not the last day of an Interest Period, (c) if any prepayment
of any of its LIBOR Loans is not made on any date specified in a notice of
prepayment given by the Borrower, or (d) as a consequence of any other default
by the Borrower to repay its LIBOR Loans when required by the terms of this
Agreement.
3.3.4. LIBOR Taxes. The Borrower shall indemnify and hold each Lender
free and harmless from, and shall pay, prior to the date on which penalties
attach thereto, all present and future income, stamp and other taxes, levies or
costs and charges whatsoever imposed, assessed, levied or collected on or in
respect of a Loan solely as a result of the interest rate being determined by
reference to LIBOR and/or the provisions of this Agreement related to LIBOR
and/or the recording, registration, notarization or other formalization of any
thereof and/or any payments of principal, interest or other amounts made on or
in respect
27
of a Loan when the interest rate is determined by reference to LIBOR (all such
taxes, levies, costs and charges being herein collectively called "LIBOR
Taxes"); provided, however, that LIBOR Taxes shall not include: taxes imposed on
or measured by the overall gross or net income of such Lender or any foreign
branch, agency or subsidiary of such Lender by the United States of America or
any political subdivision or taxing authority thereof or therein, or taxes on or
measured by the overall gross or net income of that Lender or any foreign
branch, agency or subsidiary of that Lender by any foreign country or
subdivision thereof in which that Lender, branch, agency or subsidiary is doing
business. The Borrower also shall indemnify and hold each Lender free and
harmless from, and shall pay such additional amounts equal to, increases in
taxes payable by that Lender described in the foregoing proviso that are
attributable to payments made by the Borrower described in the immediately
preceding sentence or this sentence. Promptly after the date on which payment of
any such LIBOR Tax is due pursuant to applicable law, the Borrower will, at the
request of such Lender, furnish to such Lender evidence, in form and substance
satisfactory to such Lender, that the Borrower has met its obligation under this
Section 3.3.4; and the Borrower will indemnify each Lender against, and
reimburse each Lender on demand for, any LIBOR Taxes payable by that Lender.
Such Lender shall provide the Borrower with appropriate receipts for any
payments or reimbursements made by the Borrower pursuant to this Section 3.3.4.
3.3.5. Notice of Increased Costs; Payment. Each Lender will
promptly notify the Administrative Agent (with a copy to the Borrower) of any
event of which it has knowledge, occurring after the date hereof, that entitles
such Lender to compensation, reimbursement or indemnity pursuant to this Section
3.3 or Section 3.4, and shall furnish to the Administrative Agent (with a copy
to the Borrower) a certificate of such Lender claiming compensation,
reimbursement or indemnity under this Section 3.3 or Section 3.4, setting forth
in reasonable detail the additional amount or amounts to be paid to it hereunder
if not theretofore paid by the Borrower as provided in Section 3.4 (which
certificate shall be presumed correct and binding in the absence of manifest
error). In determining such amount, such Lender may use any reasonable
averaging, attribution or allocation methods. Subject to the provisions of the
last sentence of this Section 3.3.5, within fifteen (15) days following receipt
of such notice, the Borrower shall pay to the Administrative Agent, for
distribution to such Lender the amount shown to be due and payable by such
certificate. If any Lender fails to give such notice in accordance with this
Section 3.3.5 within one hundred twenty (120) days after it first obtains
knowledge of such an event, such Lender shall not be entitled to such
compensation, reimbursement or indemnity attributable to the period beginning
one hundred twenty (120) days after it first obtains such knowledge and ending
on the date such notice is given.
3.4. Taxes.
3.4.1. Taxes Generally. Any and all payments by the Borrower or
any Guarantor hereunder or under the Notes or the other Loan Documents shall be
made free and clear of and without deduction for any and all present or future
taxes, levies, imposts, deductions, charges or withholdings, and all liabilities
with respect to such payments (including interest, additions to tax and
penalties thereon), excluding, in the case of each Lender and the Administrative
Agent, (i) taxes imposed on or measured by its net income or, in the State of
Tennessee, net assets, and franchise taxes imposed on it, by the jurisdiction of
such Lender's Lending Office or any political subdivision or taxing authority
thereof, and (ii) withholding taxes that are the subject of Sections 3.4.2
through 3.4.5. If the Borrower or any Guarantor shall be required by law to
deduct any such taxes from or in respect of any sum payable hereunder or under
any Note or any other Loan Document to any Lender or the Administrative Agent,
(a) the sum payable shall be increased as may be necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section 3.4) such Lender or the Administrative Agent (as the
case may be) shall receive an amount equal to the sum it would have received had
no such deductions been made, and (b) the Borrower shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance
with applicable law. If and to the extent that any Lender subsequently shall be
refunded or otherwise recover all or any part of any such deduction, it shall
refund to the Borrower the amount so recovered.
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3.4.2. Withholding Tax Exemption. If any Lender is a "foreign
corporation" within the meaning of the Code, such Lender shall deliver to the
Administrative Agent either: (a) if such Lender qualifies for an exemption from
or a reduction of United States withholding tax under a tax treaty, a properly
completed and executed Internal Revenue Service Form 1001 before the payment of
any interest is due in the first calendar year and in each third succeeding
calendar year during which interest may be paid under this Agreement, or (b) if
such Lender qualifies for an exemption for interest paid under this Agreement
from United States withholding tax because it effectively is connected with a
United States trade or business of such Lender, two properly completed and
executed copies of Internal Revenue Service Form 4224 before the payment of any
interest is due in the first taxable year of such Lender, and in each succeeding
taxable year of such Lender, during which interest may be paid under this
Agreement, and (c) such other form or forms as may be required or reasonably
requested by the Administrative Agent to establish or substantiate exemption
from, or reduction of, United States withholding tax under the Code or other
laws of the United States. Each such Lender agrees to notify the Administrative
Agent of any change in circumstances that would modify or render invalid any
claimed exemption or reduction.
3.4.3. Withholding Taxes. If any Lender is entitled to a reduction
in the applicable withholding tax, the Administrative Agent may withhold from
any interest payment to such Lender an amount equivalent to the applicable
withholding tax after taking into account such reduction. If the forms or other
documentation required by Section 3.4.2 are not delivered to the Administrative
Agent, then the Administrative Agent may withhold from any interest payment to
any Lender not providing such forms or other documentation, an amount equivalent
to the applicable withholding tax.
3.4.4. Indemnification. If the Internal Revenue Service or any
authority of the United States or other jurisdiction asserts a claim that the
Administrative Agent did not properly withhold tax from amounts paid to or for
the account of any Lender (because the appropriate form was not delivered or was
not properly executed, or because such Lender failed to notify the
Administrative Agent of a change in circumstances that rendered the exemption
from or reduction of withholding tax ineffective, or for any other reason) such
Lender shall indemnify the Administrative Agent fully for all amounts paid,
directly or indirectly, by the Administrative Agent as tax or otherwise,
including penalties and interest, together with all expenses incurred, including
legal expenses, allocated staff costs and any out-of-pocket expenses.
3.4.5. Subsequent Lenders. If any Lender sells, assigns, grants
participations in or otherwise transfers its rights under this Agreement, the
participant shall comply and be bound by the terms of Sections 3.4.2, 3.4.3 and
3.4.4 as though it were such Lender.
3.5. Booking of Loans. Any Lender may make, carry or transfer Loans at, to
or for the account of, any of its branch or agency offices, provided, however,
that in the event that any Lender transfers its Loans to another branch or
agency office in a transaction that does not involve the transfer by such Lender
of any of its other loans to such branch or agency office, such Lender shall not
be entitled to reimbursement for additional costs or taxes with respect to such
Loans pursuant to Section 3.3 or Section 3.4 if the Borrower would be subject to
additional liability under Section 3.3 or Section 3.4 to which it would not be
subject if such Lender's Loans were maintained at the office at which such Loans
were carried prior to such transfer.
The Borrower acknowledges and agrees that (a) each Lender's method of
funding its Loans hereunder shall be in the sole discretion of such Lender, so
long as such funding complies with all applicable requirements of this
Agreement, and (b) for purposes of any determination to be made pursuant to
Sections 2.11.4 or 3.3.5 of this Agreement, each Lender shall be presumed
conclusively to have funded its LIBOR Loans with the proceeds of Dollar deposits
obtained by such Lender in the interbank Eurodollar market.
ARTICLE 4.
SECURITY
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4.1. Initial Security. The Obligations of the Borrower shall be
secured by the Pledge Agreement.
4.2. Further Assurances. The Borrower and the Guarantors shall, and
shall cause each of their respective Subsidiaries to, at their sole cost and
expense, execute and deliver to the Administrative Agent and the Lenders all
such further documents, instruments and agreements and perform all such other
acts that reasonably may be required in the opinion of the Administrative Agent
to enable the Administrative Agent and the Lenders to exercise and enforce their
respective rights as the secured parties under the Security Documents and to
carry out the provisions or effectuate the purposes of this Agreement and the
other Loan Documents. To the extent permitted by applicable law, the Borrower
and the Guarantors hereby authorize the Administrative Agent on behalf of itself
and the Lenders to file Financing Statements and continuation statements with
respect to the security interests granted or assigned under the Security
Documents and to execute such Financing Statements and continuation statements
on behalf of the Borrower, the Guarantors and their respective Subsidiaries. The
Administrative Agent shall furnish to the Borrower and the Guarantors copies of
all such Financing Statements and continuation statements filed by the
Administrative Agent on behalf of the Lenders pursuant to this Section 4.2.
ARTICLE 5.
GUARANTY
5.1. Guaranty. Each of the Guarantors hereby unconditionally and
irrevocably, jointly and severally, guarantees to the Administrative Agent and
the Lenders the due and punctual payment and performance of all of the
Obligations (except to the extent such Guarantor is a Principal Obligor on such
Obligations), in each case as and when the same shall become due and payable,
whether at maturity, by acceleration, mandatory prepayment or otherwise,
according to their terms. In case of failure by a Principal Obligor of any
Obligation punctually to pay or perform such Obligation, each of the Guarantors
(other than a Principal Obligor on such Obligation) hereby unconditionally and
irrevocably agrees to cause such payment to be made punctually as and when the
same shall become due and payable, whether at maturity, by prepayment,
declaration or otherwise, and to cause such performance to be rendered
punctually as and when due, in the same manner as if such payment or performance
were made by such Principal Obligor. This guaranty is and shall be a guaranty of
payment and performance and not merely of collection.
5.2. Maximum Guaranty Liability.
(a) Each Guarantor's respective obligations hereunder and
under the other Loan Documents shall be in an amount equal to, but not
in excess of, the maximum liability permitted under Applicable
Bankruptcy Law (the "Maximum Guaranty Liability"). To that end, but
only to the extent such obligations otherwise would be subject to
avoidance under Applicable Bankruptcy Law if any Guarantor is deemed
not to have received valuable consideration, fair value or reasonably
equivalent value for its obligations hereunder or under the other Loan
Documents, each such Guarantor's respective obligations hereunder and
under the other Loan Documents shall be reduced to that amount which,
after giving effect thereto, would not render such Guarantor insolvent,
or leave such Guarantor with an unreasonably small capital to conduct
its business, or cause such Guarantor to have incurred debts (or to be
deemed to have intended to incur debts), beyond its ability to pay such
debts as they mature, at the time such obligations are deemed to
have been incurred under Applicable Bankruptcy Law. As used herein,
the terms "insolvent" and "unreasonably small capital" likewise shall
be determined in accordance with Applicable Bankruptcy Law. This
Section 5.2 is intended solely to preserve the rights of the Lenders
and the Administrative Agent hereunder and under the other Loan
Documents to the maximum extent permitted by Applicable Bankruptcy
Law, and neither the Guarantors nor any other Person shall have any
right or claim under this Section 5.2 that otherwise would not be
available under Applicable Bankruptcy Law.
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(b) Each Guarantor agrees that the Guaranteed Obligations at any time
and from time to time may exceed the Maximum Guaranty Liability of such
Guarantor, and may exceed the aggregate Maximum Guaranty Liability of all
Guarantors hereunder, without impairing this Guaranty or affecting the
rights and remedies of the Lenders or the Administrative Agent hereunder.
5.3. Contribution. In the event any Guarantor (a "Funding Guarantor") shall
make any payment or payments under this Guaranty or shall suffer any loss as a
result of any realization upon any of its property granted as Collateral under
any Loan Document, each other Guarantor (each, a "Contributing Guarantor") shall
contribute to such Funding Guarantor an amount equal to such Contributing
Guarantor's "Pro Rata Share" of such payment or payments made, or losses
suffered, by such Funding Guarantor. For the purposes hereof, each Contributing
Guarantor's Pro Rata Share with respect to any such payment or loss by a Funding
Guarantor shall be determined as of the date on which such payment or loss was
made by reference to the ratio of (a) such Contributing Guarantor's Maximum
Guaranty Liability as of such date (without giving effect to any right to
receive, or obligation to make, any contribution hereunder) to (b) the aggregate
Maximum Guaranty Liability of all Guarantors (including such Funding Guarantor)
as of such date (without giving effect to any right to receive, or obligation to
make, any contribution hereunder). Nothing in this Section 5.3 shall affect each
Guarantor's several liability for the entire amount of the Guaranteed
Obligations (up to such Guarantor's Maximum Guaranty Liability). Each Guarantor
covenants and agrees that its right to receive any contribution hereunder from a
Contributing Guarantor shall be subordinate and junior in right of payment to
all the Guaranteed Obligations.
5.4. Guaranty Unconditional. The obligations of each Guarantor under this
Article 5 shall be continuing, unconditional and absolute and, without limiting
the generality of the foregoing, shall not be released, discharged or otherwise
affected by:
(a) any extension, renewal, settlement, compromise, waiver or release
in respect of any Obligation of the Borrower under this Agreement or any
other Loan Document, by operation of law or otherwise;
(b) any modification or amendment or supplement to this Agreement or
any other Loan Document;
(c) any modification, amendment, waiver, release, non-perfection or
invalidity of any direct or indirect security, or of any guaranty or other
liability of any third party, for any Obligation of the Borrower under this
Agreement or any other Loan Document;
(d) any change in the existence, structure or ownership of the
Borrower or any Guarantor, or any insolvency, bankruptcy, reorganization or
other similar case or proceeding affecting the Borrower or any Guarantor or
any of their respective assets, or any resulting release or discharge of
any Obligation of the Borrower under this Agreement or any other Loan
Document;
(e) the existence of any claim, set-off or other right that any
Guarantor at any time may have against the Borrower, the Administrative
Agent, any Lender or any other Person, regardless of whether arising in
connection with this Agreement or any other Loan Document;
(f) any invalidity or unenforceability relating to or against the
Borrower for any reason of the whole or any provision of this Agreement or
any other Loan Document or any provision of Applicable Bankruptcy Law
purporting to prohibit the payment or performance by the Borrower of any
Obligation, or the payment by the Borrower of any other amount payable by
it under this Agreement or any other Loan Document; or
31
(g) any other act or omission to act or delay of any kind by the
Borrower, the Administrative Agent, any Lender or any other Person or any
other circumstance whatsoever that might but for the provisions of this
Section 5.4 constitute a legal or equitable discharge of the obligations of
any Guarantor under this Article 5.
5.5. Discharge Only Upon Payment in Full; Reinstatement in Certain
Circumstances. Each Guarantor's obligations under this Article 5 shall remain in
full force and effect so long as any Obligations are unpaid, outstanding or
unperformed or any of the Commitments are in effect. If at any time any payment
of the Obligations or any other amount payable by the Borrower under this
Agreement or the other Loan Documents is rescinded or otherwise must be restored
or returned upon the insolvency, bankruptcy or reorganization of the Borrower or
otherwise, each Guarantor's obligations under this Article 5 with respect to
such payment shall be reinstated at such time as though such payment had become
due but not been made at such time.
5.6. Waiver. Each Guarantor irrevocably waives acceptance hereof,
presentment, demand, protest, notice of any breach or default by the Borrower
and any other notice not specifically provided for herein, as well as any
requirement that at any time any action be taken by any Person against the
Borrower or any other Person or any Collateral granted as security for the
Obligations or the Guaranteed Obligations. Each Guarantor hereby specifically
waives any right to require that an action be brought against the Borrower or
any other Principal Obligor with respect to the Obligations under the provisions
of Title 47, Chapter 12, Tennessee Code Annotated, as the same may be amended
from time to time.
5.7. Waiver of Reimbursement, Subrogation, Etc. Each Guarantor hereby
waives to the fullest extent possible as against the Borrower and its assets any
and all rights, whether at law, in equity, by agreement or otherwise, to
subrogation, indemnity, reimbursement, contribution, exoneration or any other
similar claim, right, cause of action or remedy that otherwise would arise out
of such Guarantor's performance of its obligations to the Administrative Agent
or any Lender under this Article 5. The preceding waiver is intended by the
Guarantors, the Administrative Agent and the Lenders to be for the benefit of
the Borrower or any of its successors and permitted assigns as an absolute
defense to any action by any Guarantor against the Borrower or its assets that
arises out of such Guarantor's having made any payment to the Administrative
Agent or any Lender with respect to any of the Guaranteed Obligations.
5.8. Stay of Acceleration. If acceleration of the time for payment of any
amount payable by the Borrower under this Agreement is stayed upon the
insolvency, bankruptcy or reorganization of the Borrower, all such amounts
otherwise subject to acceleration under the terms of this Agreement shall
nonetheless be payable by the Guarantors hereunder forthwith on demand by the
Administrative Agent as directed by Requisite Lenders.
5.9. Subordination of Indebtedness. Any indebtedness of the Borrower for
borrowed money now or hereafter owed to any Guarantor is hereby subordinated in
right of payment to the payment by the Borrower of the Obligations, and if a
default in the payment of the Obligations shall have occurred and be continuing,
any such indebtedness of the Borrower owed to any Guarantor, if collected or
received by such Guarantor, shall be held in trust by such Guarantor for the
holders of the Obligations and be paid over to the Administrative Agent for
application in accordance with this Agreement and the other Loan Documents.
5.10. Certain Releases. Provided that no Default has occurred and is
continuing or would result therefrom:
(a) in the event that any asset sale permitted under Section 9.3(d)
consists in whole or in part of the sale of all of the capital stock of (or
other ownership interests in) a Subsidiary that is owned by the Borrower or
any other Subsidiary of the Borrower, upon the request of the Borrower the
Administrative Agent shall release the Subsidiary whose stock (or other
ownership interests) has (have) been sold from any duties and obligations
to the Lenders pursuant to this Agreement and the
32
other Loan Documents to which such Subsidiary may be a party, provided that
at the times of such request and release any Indebtedness evidenced by a
Pledged Note made by such Subsidiary has been fully satisfied; and
(b) in connection with any other asset sale permitted under Section
9.3(d), upon the request of the Borrower the Administrative Agent shall
execute and deliver any instruments reasonably required to release the
assets sold from the Liens of the Loan Documents.
ARTICLE 6.
CONDITIONS PRECEDENT
6.1. Conditions Precedent to Initial Loans. The effectiveness of this
Agreement and the obligations of the Lenders to make the Loans are all subject
to the satisfaction by the Borrower and the Guarantors, to the extent not waived
by the Lenders, of the following conditions precedent:
6.1.1. Deliveries to the Administrative Agent. The Administrative
Agent shall have received, for the ratable benefit of each Lender (and in such
number of original counterparts or copies as the Administrative Agent reasonably
may specify), each of the following, in form and substance satisfactory to the
Administrative Agent, the Lenders and their respective counsel:
(a) Agreement. Counterpart originals of this Agreement, each duly
and validly executed and delivered by or on behalf of all the appropriate
parties thereto;
(b) Notes. The Notes, each duly and validly executed and delivered
on behalf of the Borrower;
(c) Security Documents. The Pledge Agreement and other Security
Documents, each duly and validly executed and delivered by or on behalf of
all the appropriate parties thereto;
(d) Pledged Notes. The Pledged Notes, together with appropriate
instruments of assignment attached thereto, duly endorsed in blank by the
Borrower or the appropriate Guarantor, as the case may be;
(e) Organizational Documents. Copies of the charters, articles or
certificates of incorporation or other organizational documents of the
Borrower and each Guarantor, certified by the Secretary of State or other
appropriate public official in each jurisdiction of organization, all in
form and substance satisfactory to the Lenders;
(f) Bylaws. Copies of the bylaws, and all amendments thereto, of
the Borrower and each Guarantor, together with certificates of the
respective Secretaries or Assistant Secretaries of the Borrower and each
Guarantor, dated the date hereof, stating that such copy is complete and
correct;
(g) Good Standing and Authority. Certificates of the appropriate
governmental officials of each jurisdiction as the Administrative Agent
reasonably may request, dated within fifteen (15) days of the date hereof,
stating that the Borrower and each Guarantor exists, is in good standing
with respect to the payment of franchise and similar taxes and is duly
qualified to transact business therein;
(h) Incumbency. Certificates of the respective Secretaries or
Assistant Secretaries of the Borrower and each of the Guarantors, dated the
date hereof, as to the incumbency and signature of all officers of the
Borrower or such Guarantor authorized to execute or attest to this
Agreement, the Notes
33
and the other Loan Documents to which the Borrower or each such Guarantor
is a party, together with evidence of the incumbency of each such Secretary
or Assistant Secretary;
(i) Resolutions. With respect to the Borrower and each of the
Guarantors (i) copies of the resolutions authorizing, approving and
ratifying this Agreement, the Notes, the Security Documents and the other
Loan Documents and the transactions contemplated herein and therein, duly
adopted by the respective boards of directors or other managers of the
Borrower and each of the Guarantors, together with (ii) certificates of the
respective Secretaries or Assistant Secretaries of the Borrower and each of
the Guarantors, dated the date hereof, stating that each such copy is a
true and correct copy of resolutions duly adopted at a meeting, or by
action taken on written consent, of the board of directors or other
managers of the Borrower or such Guarantor and that such resolutions have
not been modified, amended, rescinded or revoked in any respect and are in
full force and effect as of the date hereof;
(j) Legal Opinions of the Borrower's and Guarantors' Counsel. The
favorable legal opinion of Messrs. Blackwell Sanders Peper Martin LLP,
counsel to the Borrower and the Guarantors, dated the date hereof, and
addressed to the Administrative Agent and the Lenders, substantially in the
form of Exhibit 6.1.1A;
(k) Officer's Certificate. A certificate of a Responsible Officer
of the Borrower and each of the Guarantors, dated the date hereof, stating
that (i) each of the representations and warranties contained in Article 7
is true and correct at and as of the date hereof with the same force and
effect as if made on such date, (ii) all obligations, covenants, agreements
and conditions contained in this Agreement to be performed or satisfied by
the Borrower or such Guarantor on or prior to the date hereof have been
performed or satisfied in all respects, (iii) since December 31, 2000,
there has been no Material Adverse Change, and (iv) no Default has occurred
and is continuing, and in addition setting forth in such detail as shall be
required by the Lenders calculations of the financial ratios and covenants
contained in this Agreement showing that as of the date hereof and after
giving effect to the transactions that are the subject hereof the Borrower
and the Guarantors are in compliance with Article 10;
(l) Solvency Certificates. (i) A solvency certificate of a
Responsible Officer of the Borrower, in substantially the form of Exhibit
6.1.1B hereto, and (ii) a solvency certificate of the Responsible Officer
of each Guarantor, in substantially the form of Exhibit 6.1.1C
(collectively, the "Solvency Certificates");
(m) Consents. Evidence that the Borrower and each Guarantor have
obtained all requisite consents and approvals required to be obtained from
any Person to permit the transactions contemplated by this Agreement, the
Notes and the other Loan Documents to be consummated in accordance with
their respective terms and conditions; and
(n) Other Matters. All other documents, instruments, agreements,
opinions, certificates, insurance policies, consents and evidences of other
legal matters, in form and substance satisfactory to the Administrative
Agent and its counsel, as the Administrative Agent reasonably may request.
6.1.2 Compliance with Laws. The Borrower, the Guarantors and their
respective Subsidiaries shall not be in violation of, and shall not have
received notice of any violation of, any applicable Requirement of Law,
including any building, zoning, occupational safety and health, fair employment,
equal opportunity, pension, environmental control, health care, certificate of
need, health care facility licensing or similar federal, state or local law,
ordinance or regulation, relating to the ownership or operation of its business
or assets, if such violation or non-compliance could have a Material Adverse
Effect, and if requested by the Administrative Agent the Borrower, the
Guarantors or their respective Subsidiaries shall have furnished to the
34
Administrative Agent and the Lenders copies of all required approvals (including
required operating licenses and permits) of any Governmental Authority.
6.1.3. No Material Adverse Change. Since December 31, 2000 no Material
Adverse Change (as determined by the Administrative Agent and the Lenders in
their sole discretion) shall have occurred.
6.1.4. No Material Misrepresentation. No material misrepresentation or
omission shall have been made by or on behalf of the Borrower or any Guarantor
to the Administrative Agent or the Lenders with respect to the Borrower's or
such Guarantor's business operations or financial or other condition.
6.1.5. Legal Proceedings. No action, suit, proceeding or investigation
shall be pending before or threatened by any court or Governmental Authority
with respect to the transactions contemplated hereby or that may have a Material
Adverse Effect (as determined by the Administrative Agent and the Lenders, in
their sole discretion).
6.1.6. Subordinated Indebtedness. If requested by the Administrative
Agent, any creditor holding Subordinated Indebtedness shall have entered into an
intercreditor and subordination agreement with the Administrative Agent in form
and substance reasonably satisfactory to the Lenders and consistent with the
definition of Subordinated Indebtedness set forth herein.
6.2. Conditions Precedent to All Loans. The obligations of each of the
Lenders to make any Loans (including Loans used to refinance or repay other
Loans) on any date (including the date hereof) are subject to the satisfaction
of the conditions set forth below in this Section 6.2. Each request for Loans
hereunder shall constitute a representation and warranty by the Borrower to the
Administrative Agent and each Lender, as of the date of the making of such
Loans, that the conditions in this Section 6.2 have been satisfied.
6.2.1. Satisfaction of Conditions Precedent to Initial Loans. The
conditions precedent set forth in Section 6.1 shall have been satisfied.
6.2.2. Representations and Warranties. The representations and
warranties of the Borrower and the Guarantors set forth in this Agreement, the
Notes and the other Loan Documents and in any certificate, opinion or other
statement provided at any time by or on behalf of the Borrower or any Guarantor
in connection herewith shall be true and correct on and as of the date of the
making of such Loans as if made on and as of such date, except to the extent
that a representation or warranty is made as of a specific date, in which event
such representation or warranty shall remain true and correct as of such earlier
date, and except to the extent that a representation or warranty is no longer
correct by virtue of changes permitted by the terms of this Agreement.
6.2.3. No Default. No Default shall have occurred and be continuing
on the date of the requested Borrowing or after giving effect to such Borrowing.
6.2.4. No Violations. No law or regulation shall prohibit the making
of the requested Loan and no order, judgment or decree of any court or
Governmental Authority shall, and no litigation shall be pending that in the
judgment of the Administrative Agent or Requisite Lenders would, enjoin,
prohibit or restrain any Lender from making a requested Loan.
6.2.5. Proceedings Satisfactory. All proceedings in connection with
the making of any Loan, and the other transactions contemplated by this
Agreement, the Loan Documents and all documents incidental thereto shall be
satisfactory to the Administrative Agent, and the Administrative Agent shall
have received all such information and such counterpart originals or certified
or other copies of such documents as the Administrative Agent reasonably may
request.
35
ARTICLE 7.
REPRESENTATIONS AND WARRANTIES
In order to induce the Administrative Agent and the Lenders to enter into
this Agreement, to make the Loans and to provide the other financial
accommodations provided for herein, the Borrower and each of the Guarantors
hereby make the following representations and warranties to the Administrative
Agent and each Lender:
7.1. Existence and Power. The Borrower, each of the Guarantors and each of
their respective Subsidiaries are entities of the type designated on Schedule
7.1 and are duly organized, validly existing and in good standing under the laws
of the jurisdiction indicated next to the name of such entity on Schedule 7.1.
The Borrower, each of the Guarantors and each of their respective Subsidiaries
have the power, authority and legal right to own and operate their respective
properties and assets, to lease the properties and assets they operate under
lease and to carry on their respective businesses as they are now being
conducted and intended to be conducted, and are duly qualified to transact
business in, and in good standing under the laws of, each jurisdiction in which
their ownership, lease or operation of property or the conduct of their
respective businesses requires such qualification, except to the extent that
failure to qualify to transact business will not have a Material Adverse Effect.
7.2. Authorization and Enforceability of Obligations. The Borrower, each of
the Guarantors and each of their respective Subsidiaries (a) have the power,
authority and legal right to enter into this Agreement and such of the Loan
Documents to which each is a party and to enter into and perform their
respective obligations hereunder and thereunder, and (b) have taken all
necessary action on the part of each to authorize the execution and delivery of
such documents, instruments and agreements and the performance of their
respective obligations hereunder and thereunder. This Agreement, the Notes and
the other Loan Documents have been duly executed and delivered on behalf of the
Borrower, each of the Guarantors and such of their respective Subsidiaries as
are parties to such Loan Documents, and constitute legal, valid and binding
obligations, enforceable against the Borrower, the Guarantors and their
respective Subsidiaries as are parties hereto or thereto in accordance with
their respective terms.
7.3. No Consents. Except as set forth on Schedule 7.3, all necessary
consents, approvals and authorizations of, filings with and acts by or with
respect to all Governmental Authorities and other Persons required to be
obtained, made or taken in connection with the execution, delivery, performance,
validity or enforceability of this Agreement, the Notes and the other Loan
Documents, or otherwise in connection with the transactions contemplated hereby,
have been obtained, made or taken and remain in effect.
7.4. No Conflict. Except as set forth on Schedule 7.4, the execution and
delivery of this Agreement, the Notes and the other Loan Documents, the
transactions contemplated hereby, the use of the proceeds of the Loans and the
performance by the Borrower, the Guarantors and such of their respective
Subsidiaries as are parties to the Loan Documents of their respective
obligations hereunder and thereunder (a) do not conflict with or violate any
Requirement of Law or any Contractual Obligation of the Borrower, such Guarantor
or such Subsidiary, except to the extent that any such violation or conflict
will not have a Material Adverse Effect, and (b) do not conflict with,
constitute a default or require any consent under, or result in the creation of
any Lien upon any property or assets of the Borrower, such Guarantor or such
Subsidiary pursuant to any Contractual Obligation of the Borrower, such
Guarantor or such Subsidiary (other than Liens in favor of the Administrative
Agent and the Lenders), except to the extent that any such conflict or default
or the failure to obtain any necessary consent will not have a Material Adverse
Effect.
7.5. Financial Statements; Projections; Solvency.
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(a) The consolidated balance sheet of the Borrower and its
Subsidiaries as of December 31, 2000 and the related consolidated
statements of income, shareholders' equity and cash flows for the Fiscal
Year then ended, together with the opinion of KPMG LLP with respect
thereto, and together with the unaudited consolidating balance sheet of the
Borrower and its Subsidiaries as of the end of such Fiscal Year and the
unaudited consolidating statement of income of the Borrower and its
Subsidiaries for such Fiscal Year, copies of all of which have been
furnished to the Administrative Agent, are complete and correct and fairly
present the assets, liabilities and consolidated financial position of the
Borrower and its Subsidiaries as at such date and the consolidated results
of their operations and their cash flows for the Fiscal Year then ended.
(b) The unaudited consolidated and consolidating balance sheet of the
Borrower and its Subsidiaries as of March31, 2001, together with the
related consolidated and consolidating statement of income and the related
consolidated statements of shareholders' equity and cash flows for the
period commencing at the beginning of the current Fiscal Year and ending
with the end of the Fiscal Quarter ended on such date, copies of all of
which have been furnished to the Administrative Agent, are complete and
correct and, subject to customary year-end adjustments that are not
anticipated to be material, fairly present the assets, liabilities and
consolidated financial position of the Borrower and its Subsidiaries as at
such date and the consolidated results of their operations and their cash
flows for such period.
(c) The financial statements described in the preceding paragraphs (a)
and (b), including the related schedules and notes thereto, have been
prepared in conformity with GAAP applied consistently throughout the
periods involved. Neither the Borrower nor any of its Subsidiaries has any
material Indebtedness, obligation or other unusual forward or long-term
commitment that is not fairly reflected in the foregoing financial
statements or in the notes thereto.
(d) In the opinion of the management of the Borrower, the assumptions
used in the preparation of the Projections were reasonable when made and as
of May, 2001. The Projections were prepared in good faith by executive and
financial personnel of the Borrower in light of the historical financial
performance and the financial and operating condition of the Borrower and
its Subsidiaries at the time prepared and, in the opinion of the management
of the Borrower and the Guarantors, represented, as of May, 2001, a
reasonable estimate of the future performance and financial condition of
the Borrower and its Subsidiaries for the periods included therein, subject
to the uncertainties and approximations inherent in the making of any
financial projections and without assurance that the projected performance
and financial condition actually will be achieved.
(e) After giving effect to the consummation of the transactions
contemplated by this Agreement, the making of Loans hereunder and the
incurrence by the Borrower and the Guarantors of the Obligations incurred
by each pursuant to this Agreement, each of the Borrower, the Guarantors
and their respective Subsidiaries is Solvent.
7.6. Absence of Litigation. Except as otherwise set forth in Schedule 7.6,
there are no actions, suits, proceedings or other litigation (including
proceedings by or before any arbitrator or Governmental Authority) pending or,
to the knowledge of the Borrower, threatened against or affecting the Borrower,
the Guarantors or any of their respective Subsidiaries, nor to the knowledge of
the Borrower and the Guarantors is there any basis therefor, (a) that challenge
the validity or propriety of the transactions contemplated hereby, or (b) that
reasonably can be expected to be adversely determined and, if adversely
determined, to have a Material Adverse Effect, either individually or in the
aggregate.
7.7. No Default. Neither the Borrower nor any Guarantor nor any of their
respective Subsidiaries is in default (nor has any event occurred that with
notice or lapse of time or both would constitute a default) under any
Contractual Obligation of the Borrower, any Guarantor or any of their respective
Subsidiaries, if such default or event could have a Material Adverse Effect. No
Default has occurred and is continuing.
37
7.8. Security Documents. The Security Documents create in favor of the
Administrative Agent for the ratable benefit of the Lenders valid, perfected
security interests in the Collateral subject to no Liens other than Permitted
Liens. The security interests granted in favor of the Administrative Agent as
contemplated by this Agreement and the Security Documents do not constitute a
fraudulent conveyance under the federal Bankruptcy Code or any applicable state
law.
7.9. Capital Stock. The capitalization of the Borrower, the Guarantors and
their respective Subsidiaries consists of such number of shares, authorized,
issued and outstanding, of such classes and series, with or without such par
value, as are set forth in Schedule 7.1. All such outstanding shares have been
duly authorized and validly issued and are fully paid and nonassessable. There
are no outstanding stock purchase warrants, subscriptions, options, securities,
instruments or other rights of any type or nature whatsoever that are
convertible into, exchangeable for or otherwise provide for the issuance of
capital stock of the Borrower, any Guarantor or any of their respective
Subsidiaries, except as described in Schedule 7.1.
7.10. Taxes. The Borrower, the Guarantors and their respective Subsidiaries
have filed all tax returns that were required to be filed in any jurisdiction
and have paid all taxes shown thereon to be due or otherwise due upon the
Borrower, the Guarantors, their respective Subsidiaries or their respective
properties, income or franchises, including interest, assessments, fees and
penalties, or have provided adequate reserves for the payment thereof. To the
knowledge of the Borrower and the Guarantors, no claims are threatened, pending
or being asserted with respect to, or in connection with, any return referred to
in this Section 7.10 that, if adversely determined, could have a Material
Adverse Effect.
7.11. No Burdensome Restrictions. No Contractual Obligation or Requirement
of Law relating to or otherwise affecting the Borrower, any Guarantor, any of
their respective Subsidiaries or any of the respective properties, businesses or
operations thereof has had or, insofar as the Borrower or any of the Guarantors
reasonably may foresee is likely to have, a Material Adverse Effect.
7.12. Judgments. There are no outstanding or unpaid judgments against the
Borrower, any of the Guarantors or any of their respective Subsidiaries.
7.13. Subsidiaries. Each of the Subsidiaries of the Borrower and the
Guarantors as of the date hereof is set forth in Schedule 7.1. Schedule 7.1 also
shows as of the date hereof as to each such Subsidiary the jurisdiction of its
incorporation or formation, the number of shares of each class of capital stock
outstanding, the direct owner of the outstanding shares of each such class and
the number of shares owned, and the jurisdictions in which such Subsidiary is
qualified to do business as a foreign corporation.
7.14. ERISA. No "prohibited transaction" or "accumulated funding
deficiency" (each as defined in ERISA) or Reportable Event has occurred with
respect to any Single Employer Plan, or to the knowledge of Borrower and the
Guarantors with respect to any Multi-Employer Plan. As of the most recent
actuarial valuation of any such Plan, the actuarial present value of all
benefits under each Plan (based on those assumptions used to fund the Plan) does
not exceed the fair market value of the assets of the Plan allocable to such
benefits. The Borrower, the Guarantors, their respective Subsidiaries and each
Commonly Controlled Entity are in compliance in all material respects with ERISA
and the rules and regulations promulgated thereunder.
7.15. Margin Securities. None of the Borrower, the Guarantors or any of
their respective Subsidiaries is engaged principally in, nor has as one of its
significant activities, the business of extending credit for the purpose of
purchasing or carrying "margin stock" as that term is defined in Regulation U
promulgated by the Board of Governors of the Federal Reserve System, as now in
effect. No part of the Indebtedness evidenced by the Notes, or otherwise created
in connection with this Agreement or the other Loan Documents, has been or will
be used, directly or indirectly, for the purpose of purchasing any such margin
stock. If requested by the Administrative Agent or any of the Lenders, the
Borrower shall furnish or
38
cause to be furnished to the Administrative Agent and each such Lender a
statement, in conformity with the requirements of Federal Reserve Form U-1
referred to in Regulation U, to the foregoing effect.
7.16. Investment Company Act. None of the Borrower, the Guarantors or any
of their respective Subsidiaries is an "investment company," or company
"controlled" by an investment company within the meaning of the Investment
Company Act of 1940, as now in effect.
7.17. Indebtedness and Contingent Obligations. Set forth on Schedule 7.17A
hereto is a complete and correct list of all Indebtedness (other than Contingent
Obligations, Indebtedness incurred under the Loan Documents, trade debt incurred
in the ordinary course of business and obligations under Operating Leases) of
the Borrower, each Guarantor and each of their respective Subsidiaries and the
aggregate principal amount thereof outstanding on the date hereof. Set forth on
Schedule 7.17B is a complete and correct list of all Contingent Obligations
(other than any Contingent Obligations created under the Loan Documents) of the
Borrower, each Guarantor and each of their respective Subsidiaries and the
aggregate amount thereof outstanding on the date hereof.
7.18. Business Locations and Trade Names. Set forth on Schedule 7.18A is a
complete and correct list of the locations where each of the Borrower, the
Guarantors and their respective Subsidiaries maintain their respective chief
executive offices, their principal places of business, an office, a place of
business or any material financial records. Set forth on Schedule 7.18B is a
complete and correct list of each name under or by which each of the Borrower,
the Guarantors and their respective Subsidiaries presently conducts its business
or has conducted its business during the past seven years.
7.19. Title to Assets. The Borrower, the Guarantors and their respective
Subsidiaries have good and marketable title (or good and marketable leasehold
interests with respect to leased property) to all their respective assets
(including all assets constituting a part of the Collateral and all assets
reflected in the consolidated balance sheet as of December 31, 2000), subject to
no Liens other than Permitted Liens.
7.20. Labor Matters. There are no disputes or controversies pending between
the Borrower, the Guarantors or their respective Subsidiaries and their
respective employees, the outcome of which reasonably may be expected to have a
Material Adverse Effect.
7.21. Business. There is no pending or threatened claim, action, suit,
proceeding or other litigation against or affecting the Borrower, the Guarantors
or their respective Subsidiaries contesting the right of the Borrower, the
Guarantors or their respective Subsidiaries to conduct their businesses as
presently conducted or as proposed to be conducted, and there are no other facts
or circumstances that have had or reasonably may be expected to have a Material
Adverse Effect.
7.22. Compliance with Laws. The Borrower, the Guarantors and their
respective Subsidiaries (a) have not been, are not and will not be in violation
of any applicable Requirement of Law, including any building, zoning,
occupational safety and health, fair employment, equal opportunity, pension,
environmental control, health care, certificate of need, health care facility
licensing or similar federal, state or local law, ordinance or regulation,
relating to the ownership or operation of their respective businesses or assets,
(b) have not failed to obtain any license, permit, certificate or other
governmental authorization necessary for the conduct of their businesses or the
ownership and operation of their assets, (c) have not received any notice from
any Governmental Authority, and to their knowledge no such notice is pending or
threatened, alleging that the Borrower, any Guarantor or any of their respective
Subsidiaries has violated, or has not complied with, any Requirement of Law,
condition or standard applicable with respect to any of the foregoing, and (d)
are not a party to any agreement or instrument, or subject to any judgment,
order, writ, rule, regulation, code or ordinance, except to the extent that any
violation, noncompliance, failure, agreement, judgment, etc. as described in
this Section 7.22 will not have a Material Adverse Effect.
39
7.23. Governmental Authorizations; Permits, Licenses and Accreditation;
Other Rights. The Borrower, the Guarantors and their respective Subsidiaries
have all licenses, permits, approvals, registrations, contracts, consents,
franchises, qualifications, certificates of need, accreditations and other
authorizations necessary for the lawful conduct of their respective businesses
or operations wherever now conducted and as planned to be conducted, pursuant to
all applicable statutes, laws, ordinances, rules and regulations of all
Governmental Authorities having, asserting or claiming jurisdiction over the
Borrower, the Guarantors and their respective Subsidiaries or over any part of
their respective operations. Copies of all such licenses, permits, approvals,
registrations, contracts, consents, franchises, qualifications, certificates of
need, accreditations and other authorizations shall be provided to the
Administrative Agent upon request. The Borrower, the Guarantors and their
respective Subsidiaries are not in default under any of such licenses, permits,
approvals, registrations, contracts, consents, franchises, qualifications,
certificates of need, accreditations and other authorizations, and no event has
occurred, and no condition exists, that with the giving of notice, the passage
of time or both would constitute a default thereunder or would result in the
suspension, revocation, impairment, forfeiture or non-renewal of any thereof,
except to the extent that the cumulative effect of all such defaults, events,
conditions, suspensions, revocations, impairments, forfeitures and non-renewals
will not have a Material Adverse Effect. The continuation, validity and
effectiveness of all such licenses, permits, approvals, registrations,
contracts, consents, franchises, qualifications, certificates of need,
accreditations and other authorizations will not be adversely affected by the
transactions contemplated by this Agreement. The Borrower, the Guarantors and
their respective Subsidiaries know of no reason why they will not be able to
maintain after the date hereof all licenses, permits, approvals, registrations,
contracts, consents, franchises, qualifications, certificates of need,
accreditations and other authorizations necessary or appropriate to conduct the
businesses of the Borrower, the Guarantors and their respective Subsidiaries as
now conducted and presently planned to be conducted.
7.24. No Material Adverse Change. Since December 31, 2000, no Material
Adverse Change has occurred.
7.25. Environmental Matters. Except as disclosed in Schedule 7.25, (a) none
of the Borrower, the Guarantors or any of their respective Subsidiaries, nor any
of the properties owned or leased thereby or operations thereof, nor, to the
knowledge of the Borrower and the Guarantors, any current or prior owner, lessor
or operator (other than the Borrower or any Guarantor or any of their respective
Subsidiaries) of any properties owned or leased by Borrower or any Guarantor or
any of their respective Subsidiaries, is in violation of any applicable
Environmental Law or any restrictive covenant or deed restriction relating to
environmental matters (recorded or otherwise) or subject to any existing,
pending or threatened investigation, inquiry or proceeding by any Governmental
Authority or subject to any remedial obligations under any Environmental Law,
except to the extent that the cumulative effect of all such violations,
investigations, inquiries, proceedings and remedial obligations will not have a
Material Adverse Effect; (b) all permits, licenses and approvals required of the
Borrowers, the Guarantors or any of their respective Subsidiaries with respect
to Hazardous Materials, including past or present treatment, storage, disposal
or release of any Hazardous Materials or solid waste into the environment, have
been obtained or filed; (c) all Hazardous Materials or solid waste generated by
the Borrower, any Guarantor or any of their respective Subsidiaries have in the
past been, and will continue to be, transported, treated and disposed of only by
carriers maintaining valid permits under all applicable Environmental Laws and
only at treatment, storage and disposal facilities maintaining valid permits
under applicable Environmental Laws, which carriers and facilities have been and
are, to the knowledge of the Borrower and the Guarantors, operating in
compliance with such permits; (d) the Borrower, the Guarantors and their
respective Subsidiaries have taken all reasonable steps necessary to determine,
and have determined, that no Hazardous Materials or solid wastes have been
disposed of or otherwise released by them except in compliance with
Environmental Laws; and (e) neither the Borrower nor any Guarantor nor any of
their respective Subsidiaries has a material contingent liability in connection
with any release of any Hazardous Materials or solid waste into the environment,
and in connection herewith the Borrower hereby agrees to pursue diligently the
resolution of any environmental issues disclosed in Schedule 7.25 by all
necessary and appropriate actions and shall report to the Administrative Agent
not less frequently than quarter-annually as to the status of the resolution of
such issues.
40
7.26. Material Contracts. Set forth on Schedule 7.26 hereto is a complete
and accurate list of all Material Contracts of the Borrower, each of the
Guarantors and each of their respective Subsidiaries. Other than as set forth on
Schedule 7.26, each such Material Contract is in full force and effect in
accordance with the terms thereof and there are no material defaults by the
Borrower, the Guarantors or any of their respective Subsidiaries as are parties
thereto or, to the knowledge of the Borrower and the Guarantors, by any other
party, under any such Material Contract. The Borrower has delivered to the
Administrative Agent a true and complete copy of each Material Contract required
to be listed on Schedule 7.26.
7.27. No Misstatements. Neither this Agreement nor any of the other Loan
Documents, nor any agreement, instrument or other document executed pursuant
hereto or thereto or in connection herewith or therewith, nor any certificate,
statement or other information referred to herein or therein or furnished to the
Administrative Agent or any Lender pursuant hereto or thereto or in connection
herewith or therewith, contains any misstatement of a material fact or omits to
state any material fact necessary to make the statements contained herein or
therein, in the light of the circumstances under which they were made, not
misleading on the date hereof or on the date furnished, as the case may be,
except as otherwise disclosed to the Administrative Agent and the Lenders in
writing on or prior to the date hereof. Neither the Borrower nor any Guarantor
is aware of any fact that it has not disclosed in writing to the Administrative
Agent that materially and adversely affects, or insofar as the Borrower or such
Guarantor can now foresee, could materially and adversely affect, the
properties, businesses, prospects, results of operations, management or
financial or other condition of the Borrower and its Subsidiaries, taken as a
whole, the Administrative Agent's or the Lenders' rights or the ability of the
Borrower, any Guarantor or any of their respective Subsidiaries to perform its
obligations under this Agreement and the other Loan Documents to which it is a
party.
ARTICLE 8.
AFFIRMATIVE COVENANTS
So long as any Obligations are unpaid or outstanding, any Obligation under
the Loan Documents is unperformed or any of the Commitments are in effect, the
Borrower and Guarantors shall:
8.1. Financial Statements.
8.1.1. Annual Financial Statements and Reports. Furnish to the
Administrative Agent and each Lender, as soon as available and in any event
within ninety-five (95) days after the end of each Fiscal Year of the Borrower,
a consolidated balance sheet of the Borrower and its Subsidiaries as of the end
of such Fiscal Year and the related consolidated statements of income,
shareholders' equity and cash flows of the Borrower and its Subsidiaries for
such Fiscal Year, audited and reported upon, without qualification, by KPMG LLP
or other independent public accountants acceptable to Requisite Lenders in their
sole discretion, accompanied by an unaudited consolidating balance sheet of the
Borrower and its Subsidiaries as of the end of such Fiscal Year and an unaudited
consolidating statement of income for such Fiscal Year, certified by a
Responsible Officer of the Borrower, together with (a) a written discussion and
analysis by the management of the Borrower of the financial statements furnished
in respect of such annual fiscal period, and (b) a certificate of a Responsible
Officer of the Borrower, in form satisfactory to the Administrative Agent and
the Lenders, (1) stating that no Default has occurred and is continuing or, if
in the opinion of such officer, a Default has occurred and is continuing,
stating the nature thereof and the action that the Borrower proposes to take
with respect thereto, and (2) setting forth computations demonstrating
compliance with all financial covenants contained herein as of the end of such
Fiscal Year.
8.1.2. Quarterly Financial Statements and Reports. Furnish to the
Administrative Agent and each Lender, as soon as available and in any event
within fifty (50) days after the end of each Fiscal Quarter of the Borrower
(other than the last Fiscal Quarter in any Fiscal Year) an unaudited
consolidated and
41
consolidating balance sheet of the Borrower and its Subsidiaries as of the end
of such Fiscal Quarter, the related consolidated and consolidating statement of
income of the Borrower and its Subsidiaries for the period commencing at the
beginning of the current Fiscal Year and ending with the end of such Fiscal
Quarter and the related consolidated statements of shareholders' equity and cash
flows of the Borrower and its Subsidiaries for such period, certified by a
Responsible Officer of the Borrower, together with (a) a written discussion and
analysis by the management of the Borrower of the financial statements furnished
in respect of such period, and (b) a certificate of a Responsible Officer of the
Borrower, in form satisfactory to the Administrative Agent and the Lenders, (1)
stating that no Default has occurred and is continuing or, if in the opinion of
such officer, a Default has occurred and is continuing, stating the nature
thereof and the action that the Borrower proposes to take with respect thereto,
and (2) setting forth computations demonstrating compliance with all financial
covenants contained herein as of the end of such period.
8.1.3. GAAP. Take all actions necessary to cause all such financial
statements to be complete and correct in all material respects and to be
prepared in reasonable detail and in conformity with GAAP applied consistently
throughout the periods reflected therein (except as may be approved by such
accountants or Responsible Officer, as the case may be, and disclosed therein).
8.2. Certificates and Other Information. Furnish to the Administrative
Agent and each Lender, each in form and substance acceptable to Requisite
Lenders:
8.2.1. Management Letters. Promptly after the same are received by the
Borrower, copies of management letters provided to the Borrower by its
independent certified public accountants that describe or refer to any
inadequacy, defect, problem, qualification or other lack of satisfactory
accounting controls utilized by the Borrower or any of its Subsidiaries.
8.2.2. Shareholder Materials. (a) Within two (2) Business Days after
the delivery of same to the shareholders of the Borrower, copies of all
financial statements and reports that the Borrower, any Guarantor or any of
their respective Subsidiaries sends to the shareholders of the Borrower, and (b)
concurrently with the filing thereof, copies of all reports and statements of
the Borrower, the Guarantors and their respective Subsidiaries (including proxy
and information statements, quarterly, annual and current reports and
registration statements, but excluding those pertaining only to employee benefit
plans) that it may make to, or file with, the Commission.
8.2.3. Budgets. As soon as available, and in any event not later than
ninety (90) days after the end of each Fiscal Year of the Borrower, twelve (12)
month budgeted financial statements (including balance sheets and statements of
income, shareholders' equity and cash flows and a statement of budgeted capital
expenditures, and including a reasonably detailed description of all underlying
assumptions) of the Borrower and its Subsidiaries on a consolidated basis for
the following Fiscal Year, and twelve (12) month consolidating budgeted
statements of income of the Borrower and each of its Subsidiaries for the
following Fiscal Year, all in a format reasonably acceptable to Requisite
Lenders and certified by a Responsible Officer of the Borrower as being fairly
stated in good faith. Any updates thereto shall be provided upon request of the
Administrative Agent.
8.2.4. Asset Acquisitions. Not later than thirty (30) days prior to
the consummation of any Asset Acquisition, notice of the pendency of such Asset
Acquisition, and not later than fourteen (14) Business Days prior to the
consummation of such Asset Acquisition, the following:
(a) a reasonably detailed description of the operating profile for
the assets to be acquired in such Asset Acquisition, and
(b) a reasonably detailed description of the terms and conditions
of such Asset Acquisition, including the purchase price and the manner and
structure of payment(s), accompanied by copies of the then-current drafts
of the proposed acquisition agreement(s), and
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(c) a certificate duly executed by a Responsible Officer of the
Borrower, in form satisfactory to the Administrative Agent, certifying that
no Default has occurred and is continuing or will result from such Asset
Acquisition, certifying that after giving Pro Forma Effect to such Asset
Acquisition such Responsible Officer reasonably believes that such Asset
Acquisition will not result in a violation of any of the financial
covenants contained herein during the twelve (12) month period following
such Asset Acquisition, and setting forth computations demonstrating
compliance with all financial covenants contained herein as of the end of
the Fiscal Quarter then most recently completed, after giving Pro Forma
Effect to such Asset Acquisition, and
(d) twelve-months trailing financial statements, consolidated
starting balance sheet, and a twelve-month projected financial statements
for the Asset Acquisition.
8.2.5. Acquisition Documents. Not later than thirty (30) days after
the consummation of any Asset Acquisition, copies of the executed documents
evidencing the transaction.
8.2.6. Reports to Other Persons. Promptly after the furnishing
thereof, copies of any statement or report furnished to any other holder of any
Indebtedness of the Borrower, any of the Guarantors or any of their respective
Subsidiaries pursuant to the terms of any indenture, loan or credit or similar
agreement and not otherwise required to be furnished to the Administrative Agent
or Lenders pursuant to any other clause of this Section 8.2.
8.2.7. Funded Indebtedness. Promptly upon request by the
Administrative Agent, copies of all agreements, instruments and/or documents
evidencing or otherwise related to any Consolidated Funded Indebtedness.
8.2.8. Additional Information. Promptly, such additional financial and
other information as the Administrative Agent or any Lender from time to time
reasonably may request.
8.3. Provision of Notices. Notify the Administrative Agent and each Lender
of the occurrence of any of the following events not later than five (5) days
after the Borrower or any Guarantor knows or has reason to know of such event:
8.3.1. Default. Any Default.
8.3.2. Other Default or Litigation. (a) Any default or event of
default under any Contractual Obligation of the Borrower, any Guarantor or any
of their respective Subsidiaries that if adversely determined could have a
Material Adverse Effect, (b) any litigation, investigation or proceeding that
may exist at any time between the Borrower, any Guarantor or any of their
respective Subsidiaries and any Governmental Authority (excluding, however,
audits and inquiries made in the ordinary course of business) or (c) any other
litigation that if adversely determined would have a Material Adverse Effect.
8.3.3. Reportable Events. (a) Any Reportable Event with respect to any
Plan, (b) the institution of proceedings or the taking or expected taking of any
other action by the PBGC, the Borrower, any Guarantor, any of their respective
Subsidiaries or any Commonly Controlled Entity to terminate, withdraw or
partially withdraw from any Plan, and (c) with respect to any Multi-Employer
Plan, the reorganization or insolvency of such Plan. In addition to such notice,
the Borrower and the Guarantors shall deliver or cause to be delivered to the
Administrative Agent and each Lender whichever of the following may be
applicable: (i) a certificate of a Responsible Officer of the Borrower or such
Guarantor setting forth details as to such Reportable Event and the action that
it, such Subsidiary or the Commonly Controlled Entity proposes to take with
respect thereto, together with the copy of any notice of such Reportable Event
that may be required to be filed with the PBGC, or (ii) any notice delivered by
the PBGC evidencing its intent to institute such proceedings or any notice to
the PBGC that such Plan is to be terminated, as the case may be.
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8.3.4. Environmental Matters. (a) Any event that makes any of the
representations set forth in Section 7.25 inaccurate in any respect or (b) the
receipt by the Borrower, any of the Guarantors or any of their respective
Subsidiaries of any notice, order, directive or other communication from a
Governmental Authority alleging a violation of or noncompliance with any
Environmental Laws, except to the extent that any such violation or
noncompliance could not reasonably be expected to have a Material Adverse
Effect.
8.3.5. Loss of License, Permit, Approval, Etc. The loss or, if known
by the Borrower, any Guarantor or any of their respective Subsidiaries,
threatened loss, by the Borrower, any Guarantor or any of their respective
Subsidiaries, of any license, permit, approval, registration, contract, consent,
franchise, qualification, certificate of need, accreditation or other
authorization issued by any Governmental Authority referenced in Section 7.23,
if such loss reasonably could be expected to have a Material Adverse Effect.
8.3.6. Material Contracts. (a) Any proposed material amendment, change
or modification to, or waiver of any material provision of, or any
termination of, any Material Contract and (b) any default or event of
default under any Material Contract.
8.3.7. Casualty Losses. Any casualty loss or event not insured against
in an amount in excess of $100,000.
8.4. Payment of Obligations and Performance of Covenants.
(a) Make full and timely payment of the Obligations, including the
Loans, whether now existing or hereafter arising;
(b) Duly comply with all terms, covenants and conditions contained
in each of the Loan Documents, at the times and places and in the manner
set forth therein; and
(c) Take all action necessary to maintain the security interests
provided for under this Agreement and the Security Documents as valid and
perfected Liens on the property intended to be covered thereby, subject to
no other Liens except Permitted Liens, and supply all information to the
Administrative Agent or the Lenders necessary to accomplish same.
8.5. Payment of Taxes. Pay, and cause their respective Subsidiaries to pay,
or cause to be paid before the same shall become delinquent and before penalties
have accrued thereon, all taxes, assessments and governmental charges or levies
imposed on the income, profits, franchises, property or businesses of the
Borrower, the Guarantors or their respective Subsidiaries, except to the extent
and so long as (a) the same are being contested in good faith by appropriate
proceedings and (b) adequate reserves with respect thereto in conformity with
GAAP have been provided on the books of the Borrower or any such Guarantor or
Subsidiary, as appropriate.
8.6. Conduct of Business and Maintenance of Existence. Continue, and cause
their respective Subsidiaries to continue, (a) to engage solely in the business
as the Borrower and the Guarantors are presently engaged and businesses that
enhance or support that primary business activity, and (b) except as permitted
by Sections 9.3 and 9.7, to preserve, renew and keep in full force and effect
their existence and present corporate, partnership or other organizational
structure, as the case may be.
8.7. Compliance with Law. Observe and comply with, and cause their
respective Subsidiaries to observe and comply with, all present and future
Requirements of Law relating to the conduct of their businesses or to their
properties or assets, except to the extent and so long as the nonobservance
thereof or noncompliance therewith will not have a Material Adverse Effect.
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8.8. Maintenance of Properties and Franchises. Maintain, preserve and keep
and cause their respective Subsidiaries to maintain, preserve and keep (a) all
of their buildings, tangible properties, equipment and other property and assets
used and necessary in their businesses, whether owned or leased, in good repair,
working order and condition, from time to time making all necessary and proper
repairs and replacements so that at all times the utility, efficiency and value
thereof shall not be impaired, and (b) all rights, privileges and franchises
necessary or desirable in the normal conduct of their businesses.
8.9. Insurance.
(a) Maintain and cause their respective Subsidiaries to maintain:
(1) insurance (in addition to any insurance required under the
Security Documents) on all insurable operations of and insurable
property and assets owned or leased by the Borrower, the Guarantors
or any of their respective Subsidiaries in the manner, to the extent
and against at least such risks (in any event including professional
and comprehensive general liability, workers' compensation,
employer's liability, automobile liability and physical damage,
fiduciary liability, commercial fidelity, employee benefits
liability, environmental impairment liability, all-risk property,
business interruption and crime insurance) usually maintained by
owners of similar businesses and properties in similar geographic
areas; provided that the amounts of property insurance coverages
shall not be less than the full replacement cost of all such
insurable property and assets, except for coverage limitations with
respect to flood, earthquake and windstorm perils that are acceptable
to the Administrative Agent and Requisite Lenders; and
(2) self-insurance reserves covering those risks for which the
Borrower, the Guarantors and each of their respective Subsidiaries
presently self-insure in appropriate amounts as determined from time
to time by independent insurance claims auditors acceptable to the
Administrative Agent and Requisite Lenders.
All such insurance shall be in such amounts, in such form and with such
insurance companies as are reasonably satisfactory to the Administrative
Agent and Requisite Lenders.
(b) Furnish to the Administrative Agent not less frequently than
annually and at any time upon written request, (i) full information as to
such insurance carried, including the amounts of all self-insurance
reserves of the Borrower, the Guarantors and their respective Subsidiaries,
and (ii) certificates of insurance from the insurance companies and
certified copies of such insurance policies.
8.10. Use of Proceeds. Use, and cause their respective Subsidiaries to use,
the proceeds of the Facilities for the purposes specified in Section 2.7 and for
no other purpose.
8.11. Books and Records. Keep and maintain, and cause their respective
Subsidiaries to keep and maintain, full and accurate books of record and
accounts of their operations, dealings and transactions in relation to their
business and activities, in conformity with GAAP and all Requirements of Law.
8.12. Inspection. Permit, and cause their respective Subsidiaries to
permit, any employees, agents or other representatives of the Administrative
Agent or the Lenders and any attorneys, accountants or other agents or
representatives designated by the Administrative Agent or the Lenders to (a)
have access to and visit and inspect any of the accounting systems, books of
account, financial records and properties, real, personal or mixed, of the
Borrower, the Guarantors and their respective Subsidiaries, (b) examine and make
abstracts from any such accounting systems, books and records, and (c) discuss
the affairs, finances and accounts of the Borrower, the Guarantors and their
respective Subsidiaries with their officers, employees or agents, all at such
reasonable business times as the Administrative Agent or the Lenders deem
necessary or advisable to protect their respective interests. So long as no
Default or Event of Default shall have occurred and be continuing, the
45
Administrative Agent and the Lenders shall give the Borrower, the Guarantors and
their respective Subsidiaries, as the case may be, reasonable prior notice of
any such inspection.
8.13. Compliance With Terms of Material Contracts. Comply, and cause their
respective Subsidiaries to comply, with all agreements, covenants, terms,
conditions and provisions of all Material Contracts, except to the extent and so
long as noncompliance therewith will not have a Material Adverse Effect.
8.14. Compliance With Environmental Laws, Etc.
(a) Employ, and cause their respective Subsidiaries to employ, in
connection with the use of any real property, appropriate technology
(including appropriate secondary containment measures) to maintain
compliance with applicable Environmental Laws;
(b) take, and cause their respective Subsidiaries to take, all
actions necessary to comply with all Environmental Laws, including any
actions identified as necessary in any environmental compliance reports
delivered to the Administrative Agent pursuant to the provisions of this
Agreement;
(c) obtain and maintain, and cause their respective Subsidiaries to
obtain and maintain, any and all permits required by applicable
Environmental Laws in connection with the operations of the Borrower, the
Guarantors or any of their respective Subsidiaries or any Affiliate
thereof;
(d) dispose of, and cause their respective Subsidiaries to dispose
of, any and all Hazardous Materials only at facilities and with carriers
maintaining valid permits under applicable federal, state and local
Environmental Laws; and
(e) use best efforts to obtain, and cause their respective
Subsidiaries to use their best efforts to obtain, certificates of disposal
from all contractors employed by the Borrower, the Guarantors or any of
their respective Subsidiaries in connection with the transportation or
disposal of any Hazardous Materials.
8.15. Environmental Monitoring. Establish and maintain, and cause their
respective Subsidiaries to establish and maintain, a system to assure and
monitor continued compliance with all applicable Environmental Laws,
noncompliance with which would have a Material Adverse Effect, which system
shall include annual reviews of such compliance by employees or agents of the
Borrower, the Guarantors and their respective Subsidiaries who are familiar with
the requirements of applicable Environmental Laws.
8.16. Maintenance of Licenses, Permits, Approvals, Etc. Preserve and
maintain, and cause their respective Subsidiaries to preserve and maintain, all
licenses, permits, approvals, registrations, contracts, consents, franchises,
qualifications, certificates of need, accreditations and other authorizations
required under applicable state or local laws and regulations in connection with
the ownership or operation of their businesses, except to the extent that a
failure to preserve and maintain any of same will not have a Material Adverse
Effect.
8.17. Intercompany Indebtedness; Pledged Notes.
(a) Maintain, and cause their respective Subsidiaries to maintain,
accounting systems, practices and procedures that enable the Borrower, the
Guarantors and their respective Subsidiaries to report to the
Administrative Agent at any time upon its request the aggregate unpaid
balance of any unsecured advances or loans owing to the Borrower or a
Guarantor by any such Subsidiary; and
46
(b) Cause all such advances or loans to be evidenced by Pledged Notes
delivered to the Administrative Agent pursuant to the Pledge Agreement and,
contemporaneously with the delivery to the Administrative Agent of any
Pledged Note, assign and deliver to the Administrative Agent any loan
agreement or other instrument, document or agreement further evidencing,
securing or otherwise relating to the indebtedness evidenced by such
Pledged Note.
8.18. Further Assurances. Perform, make, execute and deliver, and cause
their respective Subsidiaries to perform, make, execute and deliver, all such
additional and further acts, deeds, occurrences and instruments as the
Administrative Agent or the Lenders reasonably may require to document and
consummate the transactions contemplated hereby and to vest completely in and to
ensure the Administrative Agent and the Lenders their respective rights under
this Agreement, the Notes and the other Loan Documents.
8.19. Creation of Subsidiaries. Within ninety (90) days after creating any
Subsidiary of Borrower or any Guarantor, (a) give Notice to the Administrative
Agent of the creation of such Subsidiary, and (b) cause such Subsidiary to
become a Guarantor under the terms of this Agreement.
ARTICLE 9.
NEGATIVE COVENANTS
So long as any Obligations are unpaid or outstanding, any Obligation under
the Loan Documents is unperformed or any of the Commitments are in effect, the
Borrower and the Guarantors shall not:
9.1. Indebtedness. Create, incur, assume or suffer to exist, or permit any
of their respective Subsidiaries to create, incur, assume or suffer to exist,
any Indebtedness, except:
(a) Indebtedness of the Borrower or any of the Guarantors under or
pursuant to this Agreement and the other Loan Documents;
(b) Indebtedness existing, or arising pursuant to commitments
existing, on the date hereof, all as set forth in Schedules 7.17A and
7.17B, and any extensions, renewals, refundings or refinancings thereof on
the same terms or other terms satisfactory to Requisite Lenders; provided,
however, that neither the principal amount thereof nor the interest rate
thereon shall be increased, nor shall the date for the making of any
required payment of principal be accelerated nor the amount due on any such
date increased;
(c) Purchase Money Debt and Capitalized Lease Obligations in an
aggregate amount not to exceed $1,000,000 outstanding at any one time;
(d) Subordinated Indebtedness;
(e) Current liabilities incurred in the ordinary course of business
and not represented by any note, bond, debenture or other instrument, and
which are not past due for a period of more than thirty (30) days, or if
overdue for more than thirty (30) days, which are being contested in good
faith and by appropriate actions and for which adequate reserves in
conformity with GAAP have been established on the books of the primary
obligor with respect thereto;
(f) Contingent Obligations consisting of (i) the endorsement by the
Borrower, any Guarantor or any of their respective Subsidiaries of
negotiable instruments payable to such Person for deposit or collection in
the ordinary course of business, and (ii) guarantees executed by the
Borrower, any Guarantor or any of their respective Subsidiaries with
respect to Operating Lease obligations or Indebtedness of the Borrower and
its Subsidiaries otherwise permitted by this Agreement;
47
(g) Contingent Obligations consisting of the indemnification by the
Borrower or any of its Subsidiaries of (i) the officers, directors,
employees and agents of the Borrower or such Subsidiary, to the extent
permissible under the corporation law of the jurisdiction in which the
Borrower or such Subsidiary is organized, (ii) commercial banks, investment
bankers and other independent consultants or professional advisors pursuant
to agreements relating to the underwriting of the Borrower's or such
Subsidiary's securities or the rendering of banking or professional
services to the Borrower or such Subsidiary, (iii) landlords, licensors,
licensees and other parties pursuant to agreements entered into in the
ordinary course of business by the Borrower or such Subsidiary and (iv)
other Persons under agreements relating to Permitted Acquisitions;
(h) Indebtedness with respect to financed insurance premiums not past
due; and
(i) Indebtedness of the Borrower or a Subsidiary of the Borrower that
is owed to the Borrower or a Subsidiary of the Borrower and that is
described in clauses (d), (e) or (h) of Section 9.4.
9.2. Liens. Create, incur, assume or suffer to exist, or permit any of
their respective Subsidiaries (other than the Non-Guarantor Subsidiaries) to
create, incur, assume or suffer to exist, any Lien upon any real or personal
property, fixtures, revenues or other assets whatsoever (including the
Collateral), whether now owned or hereafter acquired, of the Borrower, the
Guarantors or any of their respective Subsidiaries (other than the Non-Guarantor
Subsidiaries), except:
(a) Liens securing the Obligations;
(b) Existing Liens;
(c) Liens for taxes not yet due or that are being contested in good
faith and by appropriate actions and for which adequate reserves in
conformity with GAAP have been established on the books of the Borrower or
such Guarantor or Subsidiary;
(d) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens arising in the ordinary course of business that are not
overdue for a period of more than thirty (30) days, or if overdue for more
than thirty (30) days, (i) which are being contested in good faith and by
appropriate proceedings, (ii) for which adequate reserves in conformity
with GAAP have been established on the books of the Borrower or such
Guarantor or Subsidiary; and (iii) with respect to which the obligations
secured thereby are not material;
(e) pledges or deposits in connection with workers' compensation
insurance, unemployment insurance and like matters;
(f) Liens securing Purchase Money Debt or Indebtedness arising under
Capitalized Leases; provided, however, that in each case any such Lien
attaches only to the specific item(s) of property or asset(s) financed with
such Purchase Money Debt or Capitalized Lease;
(g) deposits to secure the performance of bids, trade contracts (other
than for borrowed money), leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature incurred in
the ordinary course of business;
(h) easements, reservations, exceptions, rights-of-way, covenants,
conditions, restrictions and other similar encumbrances incurred in the
ordinary course of business that, in the aggregate, are not substantial in
amount, and that do not in any case materially detract from the value of
the property subject thereto or interfere with the ordinary conduct of
business by the Borrower or such Guarantor or Subsidiary;
48
(i) Liens in respect of any writ of execution, attachment,
garnishment, judgment or judicial award, if (i) the time for appeal or
petition for rehearing has not expired, an appeal or appropriate proceeding
for review is being prosecuted in good faith and a stay of execution
pending such appeal or proceeding for review has been secured, or (ii) the
underlying claim is fully covered by insurance issued by an insurer
satisfactory to the Administrative Agent, the insurer has acknowledged in
writing its responsibility to pay such claim and no action has been taken
to enforce such execution, attachment, garnishment, judgment or award;
(j) Liens of lessors under or in connection with Operating Leases;
(k) Liens securing Indebtedness permitted under clause (b) of Section
9.1, but only to the extent that such Indebtedness is currently secured as
set forth on Schedules 7.17A and 7.17B; and
(l) Other non-consensual Liens not securing Indebtedness, the
existence of which in the aggregate will not have a Material Adverse
Effect, provided that any Lien permitted by this clause (l) is permitted
only for so long as is reasonably necessary for the Borrower or the
affected Subsidiary, using its best efforts, to remove or eliminate such
Lien.
9.3. Sale or Transfer of Assets. Sell, lease, assign, transfer or otherwise
dispose of, or permit any of their respective Subsidiaries (other than the
Non-Guarantor Subsidiaries) to sell, lease, assign, transfer or otherwise
dispose of, any of their assets (including the stock of Subsidiaries) except:
(a) sales of personal property assets in the ordinary course of
business of the Borrower and its Subsidiaries;
(b) the disposition of obsolete or worn-out equipment or other
property no longer required by or useful to the Borrower or any of its
Subsidiaries in connection with the operation of their businesses, provided
that such equipment or other property is replaced with equipment or other
property having substantially equivalent utility and equal or greater
value;
(c) the sale or transfer to the Borrower or any Guarantor of any asset
owned by the Borrower or any of its Subsidiaries; and
(d) any other sale or transfer of assets not exceeding an aggregate
amount of $3,500,000 in any Fiscal Year and not exceeding an aggregate
amount of $7,000,000 over the term of the Facilities.
9.4. Investments. Make, commit to make or suffer to exist, or permit any of
their respective Subsidiaries to make, commit to make or suffer to exist, any
Investment except:
(a) Cash Equivalents;
(b) Investments existing on the date hereof and set forth in Schedule
9.4;
(c) accounts receivable representing trade credit extended in the
ordinary course of business;
(d) unsecured loans or advances by the Borrower or any Guarantor to
any Guarantor or the Borrower;
(e) unsecured loans or advances by any Subsidiary of the Borrower to
the Borrower or any Guarantor;
49
(f) Investments in Guarantors;
(g) Investments consisting of Permitted Acquisitions;
(h) additional advances to, and other Investments in, Non-Guarantor
Subsidiaries (other than Euroball) in an aggregate outstanding amount not
to exceed $3,000,000 at any time;
(i) additional Investments in Euroball made with the prior written
consent of the Requisite Lenders, which consent shall not be unreasonably
withheld;
(j) advances, in an aggregate amount not to exceed $1,000,000
outstanding at any one time, made by the Borrower and its Subsidiaries to
their respective employees for reimbursable expenses incurred or to be
incurred by such employees in the ordinary course performance of their
duties; and
(k) Investments consisting of amounts potentially due from a seller of
assets in a Permitted Acquisition that relate to customary post-closing
adjustments with respect to accounts receivable, accounts payable and
similar items typically subject to post-closing adjustments in similar
transactions.
9.5. Restricted Payments. Declare, pay or make, or permit any of their
respective Subsidiaries to declare, pay or make any Restricted Payments except
so long as no Default or Event of Default exists or would result therefrom:
(a) the Borrower may declare and deliver dividends and make
distributions payable solely in common stock of the Borrower or in
preferred stock of the Borrower that the Borrower is permitted to issue
pursuant to Section 9.6, and may distribute cash in lieu of fractional
shares otherwise distributable pursuant to this clause (a);
(b) the Borrower may purchase or otherwise acquire shares of its
capital stock; and
(c) The Borrower may declare and deliver dividends and make
distributions payable to its shareholders in any Fiscal Year in an
aggregate amount not in excess of $5,500,000.
9.6. Issuance of Stock. Issue any capital stock or permit any Subsidiary to
issue any capital stock; provided, however, that
(a) the Borrower may issue common stock and may issue preferred stock
to the extent the aggregate of all preferred stock outstanding does not
require the payment of dividends in excess of amounts permitted under
Section 9.5, and provided such preferred stock is not redeemable, payable
or subject to being required to be purchased or otherwise retired or
extinguished (i) at a fixed or determinable date, whether by operation of a
sinking fund or otherwise, (ii) at the option of any Person other than the
Borrower or (iii) upon the occurrence of a condition not solely within the
control of the Borrower, such as a redemption required to be made out of
future earnings; and
(b) any Subsidiary of the Borrower may issue capital stock to the
Borrower or any wholly-owned Subsidiary of the Borrower.
9.7. Fundamental Changes. Directly or indirectly (whether in one
transaction or a series of transactions), or permit any of their respective
Subsidiaries directly or indirectly (whether in one transaction or a series of
transactions) to:
(a) enter into any transaction of merger, consolidation or
amalgamation;
50
(b) liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution);
(c) make any Asset Acquisition other than a Permitted
Acquisition;
(d) make any material change in its present method of
conducting business; or
(e) enter into any agreement or transaction to do or permit
any of the foregoing;
provided, however, that:
(1) notwithstanding clause (a) of this Section 9.7,
the merger, consolidation or amalgamation of any Person with the
Borrower or any Guarantor as the method by which a Permitted
Acquisition is accomplished shall be permitted, provided that the
Borrower or such Guarantor is the surviving entity in the
transaction;
(2) notwithstanding clause (a) of this Section 9.7,
the merger, consolidation or amalgamation of any Subsidiary of
the Borrower with any Guarantor shall be permitted, provided that
such Guarantor is the surviving entity in the transaction;
(3) notwithstanding clause (a) of this Section 9.7,
the merger, consolidation or amalgamation of any Subsidiary of
the Borrower with the Borrower shall be permitted, provided that
the Borrower is the surviving entity in the transaction; and
(4) notwithstanding clause (b) of this Section 9.7,
the Borrower may permit the dissolution of any of its
Subsidiaries (and any such Subsidiary may suffer such
dissolution) if at the time of such dissolution such Subsidiary
has no material assets, engages in no material business and
otherwise has no material activities other than activities
related to the maintenance of its corporate existence and good
standing.
9.8. Transactions With Affiliates. Enter into, or permit any of their
respective Subsidiaries to enter into, any transaction, including any purchase,
sale, lease or exchange of property or the rendering of any service, with any
Affiliate or employee of the Borrower or any of its Subsidiaries, except
transactions that are in the ordinary course of business of the Borrower or such
Guarantor or Subsidiary and that are upon fair and reasonable terms no less
favorable to the Borrower or such Guarantor or Subsidiary than would be obtained
in a comparable arm's length transaction with a Person not an Affiliate.
9.9. Agreements Restricting the Borrower and its Subsidiaries. Enter
into or become a party to any agreement with any Person (other than this
Agreement and the Loan Documents) that in any way prohibits, restricts or limits
the ability of the Borrower, any Guarantor or any such Subsidiary to:
(a) transfer cash or other assets to the Borrower or any of
its Subsidiaries, or
(b) create, incur, assume or suffer to exist any Lien with
respect to any real or personal property, fixtures, revenues or other
assets whatsoever, whether now owned or hereafter acquired, of the
Borrower, any Guarantor or any such Subsidiary.
9.10. ERISA.
(a) terminate or permit any of their respective Subsidiaries
to terminate any Plan so as to result in any material liability to the
PBGC;
51
(b) engage or permit any of their respective Subsidiaries to
engage in any "prohibited transaction" (as defined in Section 4975 of
the Code) involving any Plan that would result in a material liability
for an excise tax or civil penalty in connection therewith;
(c) incur or suffer to exist, or permit any of their
respective Subsidiaries to incur or suffer to exist, any material
"accumulated funding deficiency" (as defined in Section 302 of ERISA),
regardless of whether waived, involving any Plan; or
(d) allow or suffer to exist, or permit any of their
respective Subsidiaries to allow or suffer to exist, any event or
condition that presents a material risk of incurring a material
liability to the PBGC by reason of the termination of any Plan.
9.11. Maintenance of Material Contracts. Without the prior written
consent of Requisite Lenders, enter into an agreement to cancel, terminate or
surrender, or enter into any material amendment of, any Material Contract,
unless the cumulative effect of all such cancellations, terminations, surrenders
and amendments will not have a Material Adverse Effect.
9.12. Adverse Transactions. Enter into or become a party to, or permit
any of their respective Subsidiaries to enter into or become a party to, any
transactions the performance of which in the future would be inconsistent with
or is reasonably likely to result in a breach of any covenant contained herein
or any other Loan Document or otherwise to result in a Default.
9.13. Subordinated Indebtedness. Modify, amend or in any way change
the terms of any Subordinated Indebtedness or any instrument, document or
agreement evidencing same or related thereto, if the effect of any such
modification, amendment or change would be to (a) modify the terms of
subordination, as they apply to the Obligations, in a manner inconsistent with
the definition of Subordinated Indebtedness set forth herein, or (b) otherwise
materially affect the rights of the Administrative Agent or the Lenders
vis-a-vis the holder(s) of such Subordinated Indebtedness.
ARTICLE 10.
FINANCIAL COVENANTS
10.1. Borrower Ratios. So long as any Obligations are unpaid or
outstanding, any Obligation under the Loan Documents is unperformed or any of
the Commitments are in effect, the Borrower and the Guarantors shall not:
10.1.1. Fixed Charge Coverage Ratio. Permit the Fixed Charge
Coverage Ratio as of the end of any Fiscal Quarter to be less than 2.10 to 1.00.
10.1.2. Funded Indebtedness to EBITDA Ratio. Permit the Funded
Indebtedness to EBITDA Ratio (a) as of the end of any Fiscal Quarter ending on
or before December 31, 2001, to be greater than 2.50 to 1.00, or (b) as of the
end of any Fiscal Quarter ending after December 31, 2001, to be greater than
2.25 to 1.00.
10.1.3. Funded Indebtedness to Capitalization Ratio. Permit the
Funded Indebtedness to Capitalization Ratio (a) as of the end of any Fiscal
Quarter ending on or before June 30, 2003 to be greater than 0.55 to 1.00, or
(b) as of the end of any Fiscal Quarter ending after June 30, 2003 but on or
before December 31, 2003 to be greater than 0.50 to 1.00, or (c) as of the end
of any Fiscal Quarter ending after December 31, 2003 to be greater than 0.45 to
1.00.
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10.1.4. Capital Expenditures. Permit Capital Expenditures made
by Borrower and the Guarantors to exceed an aggregate amount in any Fiscal Year
equal to one hundred fifty percent (150%) of Borrower and Guarantor's
depreciation during such Fiscal Year.
10.2. Guarantor Solvency. So long as any Obligations or any
Guaranteed Obligations are unpaid or outstanding, any Obligations under the Loan
Documents are unperformed or any of the Commitments are in effect, each of the
Guarantors at all times shall be Solvent.
ARTICLE 11.
EVENTS OF DEFAULT AND LENDERS' REMEDIES
11.1. Events of Default. Any one or more of the following described
events shall constitute an Event of Default hereunder, whether such occurrence
shall be voluntary or involuntary, or come about or be effected by operation of
law or otherwise:
11.1.1. Failure to Pay Loans, Etc. The Borrower shall fail to
pay when due any principal of, interest on or other amount payable in respect of
the Loans, the Credit Fees or any of the other Obligations.
11.1.2. Failure to Perform Certain Covenants. The Borrower or
any Guarantor shall fail to perform or observe any of its covenants and
agreements set forth in Sections 8.6, 8.10 and 8.12 and in Articles 9 and 10.
11.1.3. Failure to Perform Agreements Generally. The Borrower
or any Guarantor shall fail to perform or observe any of its other covenants and
agreements set forth in this Agreement (other than those described in Sections
11.1.1 and 11.1.2) or the other Loan Documents, and such failure shall continue
for more than twenty (20) days after the earlier of (a) written notice from the
Administrative Agent to the Borrower or such Guarantor, as applicable, of the
existence of such Default or (b) the date any Responsible Officer of the
Borrower or such Guarantor, as applicable, first obtains knowledge of such
failure.
11.1.4. Defaults Under Other Loan Documents. Any default or
event of default shall occur under any other Loan Document, and, if subject to a
cure right, shall fail to be cured or corrected within the applicable cure
period.
11.1.5. False Statements. Any representation or warranty of the
Borrower or any Guarantor set forth in this Agreement, the Notes or the other
Loan Documents or in any other certificate, opinion or other statement at any
time provided by or on behalf of the Borrower or any Guarantor in connection
herewith or therewith shall prove to be false or misleading in any material
respect at the time made or given.
11.1.6. Voluntary Insolvency Proceedings. The Borrower, any
Guarantor or any of their respective Subsidiaries (a) shall commence a voluntary
case or other proceeding seeking dissolution, 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 receiver, trustee, liquidator, custodian or other similar
official with respect to it or any substantial part of its property, (b) shall
consent to any such relief or to the appointment of, or the taking of possession
of any of its property by, any such official in any involuntary case or other
proceeding commenced against it, (c) shall make a general assignment for the
benefit of creditors, (d) shall take any action to authorize any of the
foregoing, or (e) shall become insolvent or fail generally to pay its debts as
they become due.
11.1.7. Involuntary Insolvency Proceedings. Any involuntary
case or other proceeding shall be commenced against the Borrower, any Guarantor
or any of their respective Subsidiaries seeking
53
dissolution, 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 receiver, trustee, liquidator,
custodian or other similar official with respect to it or any substantial part
of its property, and (a) an order for relief (or the equivalent) shall be
entered in such involuntary case or other proceeding or (b) such involuntary
case or other proceeding shall remain undismissed and unstayed for a period of
forty-five (45) days after the commencement thereof.
11.1.8. Failure to Perform Other Obligations. The Borrower, any
Guarantor or any of their respective Subsidiaries shall (a) fail to pay any
amount of any Indebtedness or interest thereon, or (b) fail to observe or
perform any term, covenant or agreement contained in any Contractual Obligation
(including Contractual Obligations evidencing, securing or relating to any
Indebtedness) executed by it, which failure (i) would cause or permit the holder
or holders or beneficiary or beneficiaries of such Indebtedness (or any agent or
trustee on their behalf) to cause such Indebtedness to become due or otherwise
payable prior to its stated maturity, so long as the aggregate principal amount
of all such Indebtedness that would then become due or payable would equal or
exceed $1,000,000, or (ii) would impair the Administrative Agent's or the
Lenders' rights or the performance of the obligations of the Borrower, any
Guarantor or any of their respective Subsidiaries under this Agreement, the
Notes or the other Loan Documents or the business or operations of the Borrower,
any Guarantor or any of their respective Subsidiaries; unless in the case of a
Contractual Obligation that is not for borrowed money, such failure of
performance is being contested by the Borrower, such Guarantor or such
Subsidiary in good faith and adequate reserves with respect thereto have been
established on the books of the Borrower, such Guarantor or such Subsidiary in
conformity with GAAP.
11.1.9. Judgments; Legal Process. One or more judgments,
decrees or orders for the payment of money shall be entered, or any judgment
lien shall be filed, or any writ of execution, attachment, garnishment or other
legal process shall be issued, against the Borrower, any Guarantor or any of
their respective Subsidiaries, or any of the property thereof, which by itself
or together with all other such legal processes is for an amount in excess of
$1,000,000, and which shall remain unvacated, unbonded or unstayed for a period
of thirty (30) days, or in any event later than five (5) days prior to the date
of any proposed sale thereunder.
11.1.10. Condemnation of Property. All or substantially all of
the property of the Borrower, any Guarantor or any of their respective
Subsidiaries shall be condemned, seized or otherwise appropriated, and the
condemnation award is materially less than the book value of such property at
the date hereof (if such property was owned by the Borrower or any of its
Subsidiaries on the date hereof) or at the time such property was acquired by
the Borrower or such Subsidiary (if such property was acquired by the Borrower
or such Subsidiary after the date hereof).
11.1.11. Suspension of Business. The Borrower, any Guarantor or
any of their respective Subsidiaries shall voluntarily suspend the transaction
of its business for more than five (5) Business Days in any Fiscal Year after
the date hereof without the prior express written consent of Requisite Lenders.
11.1.12. ERISA. (a) The Borrower or any Commonly Controlled
Entity shall engage in any "prohibited transaction" (as defined in ERISA or
Section 4975 of the Code) involving any Plan, (b) any "accumulated funding
deficiency" (as defined in ERISA), regardless of whether waived, shall exist
with respect to any Plan, (c) a Reportable Event shall occur with respect to, or
a proceeding shall commence to have a trustee appointed, or a trustee shall be
appointed, to administer or to terminate, any Single Employer Plan, which
Reportable Event or proceeding presents a material risk of termination of such
Plan for purposes of Title IV of ERISA, and, in the case of a Reportable Event,
shall continue unremedied for ten (10) days after notice of such Reportable
Event is given pursuant to Section 4043(a), (c) or (d) of ERISA and, in the case
of such proceeding, shall continue for ten (10) days after commencement thereof,
(d) any Single Employer Plan shall terminate for purposes of Title IV of ERISA,
(e) the withdrawal or partial withdrawal by the Borrower or any Commonly
Controlled Entity from any Multi-Employer Plan, or (f) the reorganization or
insolvency of a Plan or any other event or condition shall occur or exist with
respect to a Plan and in each case in clauses (a)
54
through (f) above, such event or condition together with all other such events
or conditions, if any, would have a Material Adverse Effect.
11.1.13. Validity of Loan Documents. Any of the Loan Documents
or any provision thereof, for any reason whatsoever, shall cease to be binding
on the Borrower, any Guarantor or any of their respective Subsidiaries as is a
party thereto, or the Borrower or any Guarantor shall so assert.
11.1.14. Guaranty Obligations. Any Guarantor shall default in
the performance or observance of its guarantee hereunder, or such guarantee for
any reason whatsoever shall cease to be a valid and binding obligation of any
such Guarantor, or any such Guarantor shall so assert.
11.1.15. Failure of Lien. Any Security Document, after delivery
thereof pursuant to this Agreement, for any reason shall cease to create a valid
Lien on any of the Collateral purported to be covered thereby or, after
recordation of such Security Document as provided in this Agreement, shall cease
to be a perfected and first priority Lien on such Collateral, subject only to
Permitted Liens.
11.1.16. Defaults under Material Contracts. Any default or event
of default by the Borrower or any Guarantor shall occur under any Material
Contract, and, if subject to a cure right, shall fail to be cured or corrected
within the applicable cure period.
11.1.17. Material Adverse Change. Any Material Adverse Change
shall occur.
11.1.18. Change in Control. An event or series of events shall
occur by which (a) any "person" or "group" (within the meaning of Sections 13(d)
and 14(d)(2) of the Securities Exchange Act of 1934), shall become the
"beneficial owner" (within the meaning of Rule 13d-3 and/or Rule 13d-5 under the
Securities Exchange Act of 1934, except that a Person shall be deemed to have
"beneficial ownership" of all shares that such Person has the right to acquire
without condition, other than the passage of time, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of thirty-five percent (35%) or more of the combined voting power of
all securities of the Borrower entitled to vote in the election of directors,
other than securities having such power only by reason of the happening of a
contingency (other than the passage of time), or (b) during any period of up to
twelve (12) consecutive months, individuals who at the beginning of such period
were directors of the Borrower shall cease for any reason to constitute a
majority of the Board of Directors of the Borrower.
11.2. Lenders' Remedies. Upon the occurrence of an Event of Default
or at any time thereafter, and in each and every case, unless such Event of
Default shall have been remedied or waived in writing by Requisite Lenders, any
one or all of the following actions may be taken:
(a) upon the request of Requisite Lenders, the
Administrative Agent shall, by notice to the Borrower terminate any or
all of the Commitments, whereupon such Commitments of the Lenders
thereunder immediately shall terminate; provided, however, that upon
the occurrence of any event specified in either Section 11.1.6 or
Section 11.1.7 the Commitments shall terminate automatically without
further action by the Administrative Agent or the Lenders;
(b) upon request of Requisite Lenders, the Administrative
Agent shall declare all outstanding Obligations and other amounts
owing under this Agreement, the Notes and the other Loan Documents to
be due and payable immediately, and all such Obligations and other
amounts immediately shall be due and payable, without presentment,
demand, protest or notice of any kind, all of which are hereby
expressly waived to the extent permitted by applicable law; provided,
however, that upon the occurrence of any event specified in either
Section 11.1.6 or Section 11.1.7 all such Obligations and other
amounts immediately shall be due and payable in full without
declaration or other notice;
55
(c) the Administrative Agent immediately, and without expiration of
any period of grace, may enforce payment of all Obligations of the Borrower
and the Guarantors to the Administrative Agent and the Lenders under this
Agreement, the Notes and the other Loan Documents, and the Administrative
Agent shall be entitled to all remedies available hereunder or thereunder;
and
(d) the Administrative Agent shall be entitled to exercise, for the
ratable benefit of the Lenders, all other rights, powers, privileges,
options and remedies available under or by virtue of the Loan Documents or
otherwise available at law or in equity.
ARTICLE 12.
THE ADMINISTRATIVE AGENT
12.1. Appointment. Each Lender hereby (a) irrevocably appoints AmSouth as
the Administrative Agent for such Lender and the other Lenders under this
Agreement, the Notes and the other Loan Documents, and (b) irrevocably
authorizes the Administrative Agent to take such action on its behalf under the
provisions of this Agreement, the Notes and the other Loan Documents and to
exercise such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of this Agreement, the Notes and the other
Loan Documents, together with such other powers as are reasonably incidental
thereto. The Administrative Agent shall, among other things, take such actions
as the Administrative Agent is authorized to take pursuant to this Agreement,
the Notes and the other Loan Documents. As to any matters not expressly provided
for in this Agreement, the Administrative Agent may, but shall not be required
to, exercise any discretion or take any action; however, the Administrative
Agent shall be required to act or to refrain from acting upon the written
instructions of Requisite Lenders if the Administrative Agent shall be
indemnified to its satisfaction by the Lenders against any and all liability and
expense that may be incurred by it by reason of so acting or refraining from
acting. Notwithstanding anything to the contrary herein, the Administrative
Agent shall have no duties, responsibilities or fiduciary relationships with any
Lender except those expressly set forth in this Agreement, the Notes and the
other Loan Documents, and no implied covenants, responsibilities, duties,
obligations or liabilities shall be read into this Agreement, the Notes or the
other Loan Documents or otherwise exist against the Administrative Agent.
12.2. Delegation of Duties. The Administrative Agent may exercise any of
its powers or execute any of its duties under this Agreement, the Notes and the
other Loan Documents by or through one or more agents or attorneys-in-fact and
shall be entitled to obtain, and to rely on, advice of counsel concerning all
matters pertaining to such rights and duties. The Administrative Agent may
utilize the services of such agents and attorneys-in-fact as the Administrative
Agent in its sole discretion reasonably determines, and all reasonable fees and
expenses of such agents and attorneys-in-fact shall be paid by the Borrower on
demand. The Administrative Agent shall not be responsible for the negligence or
misconduct of any agents or attorneys-in-fact selected by the Administrative
Agent in good faith.
12.3. Limitation of Liability. Neither the Administrative Agent nor its
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (a) liable for any waiver, consent or approval given or any
action taken or omitted to be taken by it or by such Person under or in
connection with this Agreement, the Notes or the other Loan Documents, if
authorized or permitted hereunder, except for its or such Person's own gross
negligence or willful misconduct, or (b) responsible for the consequences of any
oversight or error in judgment by it or such Person whatsoever, except for its
or such Person's own gross negligence or willful misconduct. The Administrative
Agent shall not be responsible for (i) the execution, validity, genuineness,
effectiveness, sufficiency, enforceability, perfection or priority of this
Agreement, the Notes or the other Loan Documents, (ii) the collectability of any
amounts owing under this Agreement, the Notes or the other Loan Documents, (iii)
the value, sufficiency, enforceability, perfection or collectability of any
Collateral, (iv) the failure by the Borrower, any Guarantor or any of their
respective Subsidiaries to
56
perform its obligations under this Agreement, the Notes or the other Loan
Documents or to observe any conditions hereof or thereof, (v) the truth,
accuracy and completeness of the recitals, statements, representations or
warranties made by the Borrower, any Guarantor or any of their respective
Subsidiaries or any officer or agent thereof contained in this Agreement, the
Notes or the other Loan Documents, or in any certificate, report, statement,
document or other writing referred to or provided for in, or received by the
Administrative Agent in connection with, this Agreement, the Notes or the other
Loan Documents believed by the Administrative Agent to be genuine and correct
and to have been signed, sent or made by the proper Person or Persons.
12.4. Reliance by the Administrative Agent. The Administrative Agent shall
not have any obligation (a) to ascertain or to inquire as to the observance or
performance of any of the conditions, covenants or agreements in this Agreement,
the Notes or the other Loan Documents or in any document, instrument or
agreement at any time constituting, or intended to constitute, Collateral, (b)
to ascertain or inquire as to whether any notice, consent, waiver or request
delivered to it shall have been duly authorized or is genuine, accurate and
complete or (c) to inspect the properties, books or records of the Borrower, any
Guarantor or any of their respective Subsidiaries. The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying (i) upon any
note, writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message, statement, order or
other document, instrument or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and (ii) upon advice and statements of legal counsel (including counsel to the
Borrower or the Guarantors), independent accountants and other experts selected
by the Administrative Agent. The Administrative Agent may deem and treat the
payee of any Note as the owner thereof for all purposes unless a written notice
of the assignment, negotiation or transfer thereof, in accordance with the
provisions of this Agreement, shall have been delivered to the Administrative
Agent identifying the name of the subsequent payee or holder thereof. The
Administrative Agent shall be entitled to fail or refuse, and shall be fully
protected in failing or refusing, to take any action required or permitted by it
under this Agreement, the Notes or the other Loan Documents unless (A) it first
shall receive such advice or concurrence of Requisite Lenders as it deems
appropriate, or (B) it first shall be indemnified to its satisfaction by the
Lenders against any and all liability and expense that may be incurred by it by
reason of taking or continuing to take any such action. In all cases the
Administrative Agent shall be fully protected in acting, or in refraining from
acting, under this Agreement, the Notes or the other Loan Documents in
accordance with a request of Requisite Lenders, and such request and any action
taken or failure to act pursuant thereto shall be binding upon all the Lenders
and all future holders of the Notes.
12.5. Notice of Default; Action by Administrative Agent. The Administrative
Agent shall not be deemed to have knowledge or notice of the occurrence of any
Default unless the Administrative Agent has received notice from a Lender, the
Borrower or any Guarantor referring to this Agreement, describing such Default
and stating that such notice is a "Notice of Default". If the Administrative
Agent receives such a notice, the Administrative Agent shall give telephonic and
written notice thereof to the Lenders as soon as is practicable. The
Administrative Agent shall take such action with respect to an Event of Default
as shall be reasonably directed by Requisite Lenders; provided, however, that
unless and until the Administrative Agent shall have received such directions,
the Administrative Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to such Event of Default as it
deems advisable in the best interests of the Lenders.
12.6. Non-Reliance on the Administrative Agent by the Other Lenders. Each
Lender expressly acknowledges that neither the Administrative Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or affiliates has
made any representations or warranties to such Lender. The Administrative Agent
shall have no obligation, responsibility or liability to any of the Lenders
regarding the creditworthiness or financial condition of the Borrower, any of
the Guarantors or any of their respective Subsidiaries or for any recitals,
statements, information, representations or warranties herein or in any
document, certificate or other writing delivered in connection herewith or for
the execution, effectiveness, genuineness, validity, enforceability, perfection,
collectability, priority or sufficiency of this Agreement or any other Loan
Document. No act by the Administrative Agent hereinafter taken, including any
review of the Borrower, the
57
Guarantors and their respective Subsidiaries, shall be deemed to constitute any
representation or warranty by the Administrative Agent to any Lender. Each
Lender represents to the Administrative Agent that, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, it has made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Borrower, the
Guarantors and their respective Subsidiaries and has made its own decision to
enter into this Agreement and to make its Loans and otherwise participate in the
transactions hereunder. Each Lender also represents that, independently and
without reliance upon the Administrative Agent or any other Lender, and based on
such documents and information as it deems appropriate at the time, it shall
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement, the Notes and the other Loan Documents
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Borrower, the Guarantors and their respective
Subsidiaries. The Administrative Agent shall not be required to make any inquiry
concerning the performance or observance of any of the terms, provisions or
conditions of this Agreement or any other Loan Document, or the financial
condition of the Borrower or the Guarantors or the existence or possible
existence of any Default. Except for notices, reports and other documents
expressly required to be furnished to the Lenders by the Administrative Agent
hereunder, the Administrative Agent shall have no obligation or liability to
provide any Lender with any credit or other information concerning the business,
operations, property, financial and other condition or creditworthiness of the
Borrower, the Guarantors or their respective Subsidiaries that may come into the
possession of the Administrative Agent or any of its respective officers,
directors, employees, agents, attorneys-in-fact or affiliates.
12.7. Indemnification. Each of the Lenders shall indemnify, defend and hold
harmless the Administrative Agent in its capacity as such (to the extent not
reimbursed by the Borrower and without limiting the obligation of the Borrower
to do so), ratably according to their respective Percentages, from and against
any and all claims, demands, lawsuits, costs, expenses, fees, liabilities,
obligations, losses, damages, actions, recoveries, judgments, suits, costs,
expenses or disbursements of any kind whatsoever, including interest, penalties
and reasonable attorneys' and paralegals' fees and costs and amounts paid in
settlement of any of the foregoing, whether direct, indirect, consequential or
incidental, that at any time (including at any time following the satisfaction
of the Obligations) may be imposed on, incurred by or asserted against the
Administrative Agent in any way relating to, resulting from or arising out of
this Agreement, the Notes or the other Loan Documents, the transactions
contemplated hereby or any action taken or omitted by the Administrative Agent
under or in connection with any of the foregoing; provided, however, that no
Lender shall be liable for the payment of any portion of such claims, demands,
lawsuits, costs, expenses, fees, liabilities, obligations, losses, damages,
actions, remedies, judgments, suits, costs, expenses or disbursements to the
extent such result arose solely from the Administrative Agent's gross negligence
or willful misconduct. The agreements in this Section 12.7 shall survive the
repayment of the Loans and the satisfaction of the other Obligations and shall
be in addition to and not in lieu of any other indemnification agreements set
forth in the Loan Documents.
12.8. Payments. If in the opinion of the Administrative Agent, the
distribution of any amount received by the Administrative Agent in such capacity
under this Agreement, the Notes or the other Loan Documents might involve it in
liability, the Administrative Agent may refrain from making the distribution
thereof until the Administrative Agent's right to make such distribution shall
have been adjudicated by a court of competent jurisdiction. If a court of
competent jurisdiction shall adjudge that any amount received from and
distributed by the Administrative Agent in such capacity as Administrative Agent
is to be repaid, each Person to whom any such distribution shall have been made
either (a) shall repay to the Administrative Agent its proportionate share of
the amount so adjudged to be repaid, or (b) shall repay the same in such manner
and to such Persons as shall be determined by such court.
12.9. Administrative Agent in Its Individual Capacity. The Administrative
Agent in its individual capacity, and its Affiliates, may make loans and other
financial accommodations to, accept deposits from and generally engage in any
kind of business with the Borrower or any of the Guarantors and their respective
58
Subsidiaries as though the Administrative Agent were not the Administrative
Agent hereunder. With respect to Loans made or renewed by it and any Notes
issued to it, the Administrative Agent in its individual capacity shall have the
same benefits, rights, powers and privileges under this Agreement, the Notes and
the other Loan Documents as any other Lender and may exercise the same as though
it were not the Administrative Agent, and the terms "Lender", "Lenders" and
"Requisite Lenders" shall include the Administrative Agent in its individual
capacity.
12.10. Successor Administrative Agent. The Administrative Agent may resign
as such upon thirty (30) days' prior written notice to the Lenders. If the
Administrative Agent shall resign as such under this Agreement, then Requisite
Lenders shall appoint from among the Lenders a successor agent for the Lenders,
which successor agent shall be reasonably acceptable to the Borrower; provided,
however, that acceptability to the Borrower shall not be required if a Default
has occurred and is continuing. Upon acceptance of its appointment as successor
agent, (a) such successor agent shall succeed to the rights, powers, privileges
and duties of the Administrative Agent, (b) the retiring Administrative Agent
shall be discharged of all its obligations and liabilities in such capacity
under this Agreement, the Notes and the other Loan Documents, (c) the term
"Administrative Agent" shall mean such successor agent effective upon its
appointment and (d) the retiring Administrative Agent's rights, powers and
duties as Administrative Agent shall be terminated, without any other or further
act or deed on the part of such retiring Administrative Agent or any of the
parties to this Agreement or any holders of the Notes. After any retiring
Administrative Agent's resignation hereunder as Administrative Agent, the
provisions of this Article 12 shall continue to inure to its benefit as to any
actions taken or omitted to be taken by it while it was Administrative Agent
under this Agreement.
ARTICLE 13.
ASSIGNMENTS AND PARTICIPATIONS
13.1. Successors and Assigns. This Agreement, the Notes and the other Loan
Documents shall be binding on and shall inure to the benefit of the Borrower,
the Guarantors, the Administrative Agent, the Lenders and their respective
successors and assigns, except as otherwise provided herein or therein. Neither
the Borrower nor the Guarantors may assign, transfer, hypothecate or otherwise
convey their respective rights, benefits, obligations or duties hereunder or
thereunder without the prior express written consent of the Lenders. Any
purported assignment, transfer, hypothecation or other conveyance by the
Borrower or the Guarantors without the prior express written consent of all the
Lenders shall be void. Neither the Administrative Agent nor any of the Lenders
may sell, assign, transfer, grant a participation in or otherwise dispose of all
or any portion of its interest in this Agreement, the Notes or the other Loan
Documents except as expressly provided herein.
13.2. Assignments.
13.2.1. Assignments. With prior notice to the Borrower, each Lender
may assign (other than the sale of a participation) up to one hundred percent
(100%) of its right, title and interest under this Agreement, the Notes and the
other Loan Documents (including all or a portion of its Commitments and the same
portion of the Loans at the time owing to it) to one or more banks or other
financial institutions; provided, however, that (a) each such assignment shall
be of a constant, and not a varying, percentage of all such Lender's right,
title and interest hereunder and thereunder, (b) such share equals no less than
$5,000,000 in the case of any one assignee, (c) any assignee shall execute and
deliver to the Administrative Agent an Assignment and Acceptance and a
non-refundable assignment fee of $3,500, and (d) a Lender may not assign any
interest without the prior approval of the Administrative Agent and, in the
absence of a Default, the Borrower, which approval shall not be unreasonably
withheld. Notwithstanding the foregoing, any Lender may assign, as collateral or
otherwise, any of its rights (including such Lender's rights to payments of
principal
59
and/or interest on the Notes) under this Agreement to any Federal Reserve Bank
without notice to or consent of the Administrative Agent or the Borrower.
13.2.2. Effect of Assignments. Upon the sale, assignment, transfer or
other disposition (other than the sale of a participation) of any of a Lender's
right, title and interest under this Agreement, the Notes and the other Loan
Documents to any assignee in accordance with this Section 13.2, then upon the
execution, delivery and acceptance of the Assignment and Acceptance, from and
after the effective date specified therein, (a) the transferor Lender no longer
shall have the rights, benefits and obligations under this Agreement, the Notes
or the other Loan Documents to the extent of the interest transferred (except
for such rights, benefits and obligations that such Lender would retain under or
with respect to this Agreement, the Notes or the other Loan Documents upon
payment in full of the Obligations), and (b) the assignee shall become a Lender,
shall succeed to the rights and benefits and assume the obligations of such
transferor Lender hereunder and thereunder to the extent of the interest
transferred.
13.2.3. Actions by the Borrower. The Borrower hereby agrees that it
shall execute and deliver, at the request of the Administrative Agent (a) one or
more substitute Notes to the order of such Lenders to evidence the portions of
the Loans retained and sold and (b) any amendment to any Loan Document to
effectuate the provisions of this Section 13.2.
13.3. Participations. Subject to the provisions of this Section 13.3, each
Lender shall have the right at any time to sell undivided participating
interests in all or any part of its Commitments and the Loans to one or more
banks or other financial institutions; provided, however, that (a) such sale or
transfer shall not relieve such Lender of any obligation or liability hereunder,
(b) such Lender shall make and receive all payments for the account of its
participants and shall retain exclusively, and shall continue to exercise
exclusively, all rights of approval and administration available hereunder with
respect to such Lender's Commitments and the Loans, even after giving effect to
the sale of any such participation (although such Lender may at its option agree
with its participants that it will not consent to any matter described in
clauses (a) through (f) of Section 14.3.4 without their concurrence), and (c)
such Lender shall make such arrangements with its participants as may be
necessary to accomplish the foregoing. No such participant shall be a Lender for
any purpose of this Agreement, other than for purposes of Section 14.13, without
the consent of the Administrative Agent.
13.4. Disclosure. In connection with any assignments, participations or
offers therefor pursuant to this Article 13, each Lender may disclose to any
assignee or participant or prospective assignee or participant such information
pertaining to the Borrower, the Guarantors or any of their respective
Subsidiaries as such Lender may deem appropriate or such assignee or participant
or prospective assignee or participant may request; provided, however, that
prior to any such disclosure such assignee or participant or prospective
assignee or participant shall agree to preserve the confidentiality of any
confidential information relating to the Borrower or its Subsidiaries received
by it on the same basis as provided in this Section 13.4.
13.5. Assignments and Participations as Units. No Lender shall assign or
sell any participation in its Commitments or the Loans, except in the form of
units consisting of pro rata interests in its Commitments and the Loans.
ARTICLE 14.
GENERAL PROVISIONS
14.1. Notices. Any notice, request, demand or other communication required
or permitted under this Agreement, the Notes or the other Loan Documents shall
be in writing and shall be deemed to be properly given (a) when received, if
personally delivered or sent by overnight courier with appropriate confirmation
of delivery, (b) two (2) Business Days after deposit in the mail, if mailed by
United States first class, certified or registered mail, postage prepaid, (c)
one (1) Business Day after deposit with a public telegraph company for
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transmittal, charges prepaid, or (d) when received, if given by telecopy, with
appropriate confirmation, each to the appropriate address set forth below or to
such other address that any such party or the Administrative Agent may designate
by written notice to other parties.
If to the Borrower:
NN, Inc.
Building 2, Suite 12
2000 Water's Edge Drive
Johnson City, Tennessee 37604
Attn: William C. Kelly
Telecopy No. 423/743-2670
with a copy to:
Blackwell Sanders Peper Martin LLP
13710 FNB Parkway, Suite 200
Omaha, Nebraska 68154
Attn: H. Dale Dixon, III
Telecopy No. 402/964-5050
If to any of the Guarantors:
c/o NN, Inc.
Building 2, Suite 12
2000 Water's Edge Drive
Johnson City, Tennessee 37604
Attn: William C. Kelly
Telecopy No. 423/743-2670
If to any of the Lenders:
Their respective addresses as set forth with their signatures
on this Agreement.
If to AmSouth as Administrative Agent:
AmSouth Bank
AmSouth Center
315 Deaderick Street
Nashville, Tennessee 37237
Attn: Corporate Finance
Telecopy No. 615/748-1501
with a copy to:
Bass, Berry & Sims PLC
2700 AmSouth Center
315 Deaderick Avenue
Nashville, Tennessee 37237
Attn: Felix R. Dowsley, III
61
Telecopy No. 615/742-6293
14.2. Entire Agreement. The execution and delivery of this Agreement and
the other Loan Documents supersede all the negotiations or stipulations
concerning the matters that preceded or accompanied the execution and delivery
hereof and thereof (other than with respect to fees payable pursuant to separate
agreements between the Borrower and the Administrative Agent). This Agreement,
the Notes and the other Loan Documents also are intended, by the parties hereto
and thereto, as a complete and exclusive statement of the terms and conditions
hereof and thereof.
14.3. Amendments, Waivers and Consents.
14.3.1. Amendments. Except as otherwise set forth in this Agreement,
the provisions of (a) this Agreement may not be modified, amended, restated or
supplemented, except by a written instrument duly executed and delivered on
behalf of the Borrower, the Guarantors and Requisite Lenders, and (b) the Notes
and all Loan Documents other than this Agreement may not be modified, amended,
restated or supplemented, except by a written instrument duly executed and
delivered on behalf of the Borrower and any of the Guarantors, to the extent
that the Borrower or any such Guarantor is a signatory party to such Note or
such Loan Document, and on behalf of the Administrative Agent, with the written
consent of Requisite Lenders. Notwithstanding anything to the contrary herein,
the Administrative Agent and Requisite Lenders may modify, amend, restate,
supplement or waive any provision of Article 12 without the consent of the
Borrower or any Guarantor.
14.3.2. Waivers and Consents. Except as otherwise set forth in this
Agreement, any waiver of the terms and conditions of this Agreement, the Notes
or the other Loan Documents, or any waiver of any Default and its consequences
hereunder or thereunder, and any consent or approval required or permitted by
this Agreement, the Notes or the other Loan Documents to be given by the
Lenders, may be made or given with, but only with, the written consent of
Requisite Lenders on such terms and conditions as specified in the written
instrument granting such waiver, consent or approval. A waiver, to be effective,
must be in writing and signed by the party making the waiver.
14.3.3. Effect of Waivers. In the case of any waiver, the Borrower,
the Guarantors, the Lenders and the Administrative Agent shall be restored to
their former positions and rights under this Agreement, the Notes and the other
Loan Documents to the extent of such waiver, and any Default waived shall be
deemed to be cured and not continued; provided, however, that no waiver shall
constitute the waiver of any subsequent or other Default or impair any right
consequent thereon. No failure or delay on the part of the Administrative Agent
or any Lender to exercise or enforce any right or remedy under or in connection
with this Agreement, the Notes or the other Loan Documents, whether by their
respective terms, at law, in equity or otherwise, shall operate as a waiver
thereof. No single or partial exercise of any such right or remedy shall
preclude other or further exercise thereof or the exercise of any other right or
remedy.
14.3.4. Consent of All the Lenders. Without in each instance the
prior express written consent of the Administrative Agent and all the Lenders,
no such modification, amendment, restatement, supplement, waiver or consent
shall:
(a) increase the aggregate Commitments, or increase the Commitment of
any Lender without such Lender's approval;
(b) reduce the amounts or extend the dates for the payment of any
Credit Fees that are payable ratably to all of the Lenders in accordance
with their respective Percentages of the Commitments;
(c) extend the maturity of the Notes or the date of any scheduled
principal payments or mandatory prepayments hereunder or thereunder;
62
(d) reduce the rate or extend the time of payment of interest
hereunder or under the Notes;
(e) waive the payment of any principal, interest or Credit Fees
payable hereunder or under the Notes;
(f) extend the Revolving Commitment Expiration Date or the Term
Loan Maturity Date except as expressly provided for in this Agreement;
(g) consent to the assignment or transfer by the Borrower of any
of its Obligations under this Agreement, the Notes or the other Loan Documents;
(h) release a material portion of the Collateral or release any of
the guarantees hereunder, except as expressly provided herein; or
(i) amend or modify the definitions of "Percentages" or "Requisite
Lenders" contained in this Agreement.
14.3.5. Binding Effect. Any such modification, amendment, restatement,
supplement, waiver or consent shall apply equally to each of the Lenders and
shall be binding upon the Borrower, the Guarantors, the Lenders, the
Administrative Agent and all future holders of the Notes.
14.4. Independence of Covenants. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or otherwise would be within the limitations of, another covenant shall not
avoid the occurrence of a Default if such action is taken or condition exists.
14.5. Interpretation. Neither this Agreement, the Notes or the other Loan
Documents, nor any uncertainty or ambiguity herein or therein, shall be
construed or resolved against the Administrative Agent, the Lenders, the
Borrower or the Guarantors whether under any rule of construction or otherwise.
This Agreement, the Notes and the other Loan Documents have been reviewed by all
the parties hereto and thereto and shall be construed and interpreted according
to the ordinary meaning of the words used as to accomplish fairly the purposes
and intentions of all such parties.
14.6. Inconsistencies With Other Documents. In the event there is a conflict
or inconsistency between this Agreement, the Notes or the other Loan Documents,
the terms of this Agreement shall control; provided, however, that any provision
of the Security Documents that imposes additional burdens on the Borrower or any
Guarantor or further restricts the rights of the Borrower or any Guarantor or
gives the Lenders additional rights shall not be deemed to be in conflict or
inconsistent with this Agreement and shall be given full force and effect.
14.7. Severability. If any portion of this Agreement, the Notes or any of
the other Loan Documents shall be judged by a court of competent jurisdiction to
be unenforceable, the remaining portions shall be valid and enforceable to the
extent that the remaining terms thereof provide for the creation of the
Obligations and the consummation of the issuance of the Notes, the grant of
collateral security therefor, the guarantee thereof and the payment of principal
and interest in respect of the Obligations substantially on the same terms and
subject to the same conditions as set forth herein and therein.
14.8. Governing Law. This Agreement, the Notes and the other Loan Documents,
unless otherwise expressly set forth therein, shall be governed by, construed
and enforced in accordance with the laws of the State of Tennessee, without
reference to the conflicts or choice of law principles thereof, except to the
extent that the laws of a particular jurisdiction govern the creation,
perfection, priority and enforcement of liens on
63
and security interests in the Collateral. Notwithstanding the foregoing, if at
any time the laws of the United States of America permit any Lender to contract
for, take, reserve, charge or receive interest or loan charges in amounts
greater than are allowed by the laws of such state (whether such federal laws
directly so provide or refer to the law of the state where such Lender is
located), then such federal laws shall to such extent govern as to the interest
and loan charges that such Lender is allowed to contract for, take, reserve,
charge or receive under this Agreement, the Notes and the other Loan Documents.
References to laws in this section are to such laws as are now in effect, and,
with respect to usury laws, if any, applicable to any Lender and to the extent
allowed thereby, to such laws as hereafter may be in effect that allow a higher
maximum nonusurious interest rate than such laws now allow.
14.9. CONSENT TO JURISDICTION. THE BORROWER AND EACH GUARANTOR HEREBY
IRREVOCABLY CONSENT TO THE PERSONAL JURISDICTION OF THE STATE AND FEDERAL COURTS
LOCATED IN DAVIDSON COUNTY, TENNESSEE IN ANY ACTION, CLAIM OR OTHER PROCEEDING
ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, THE NOTES AND THE
OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE
PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. THE BORROWER AND EACH GUARANTOR
HEREBY IRREVOCABLY CONSENT TO THE SERVICE OF A SUMMONS AND COMPLAINT AND OTHER
PROCESS IN ANY ACTION, CLAIM OR PROCEEDING BROUGHT BY THE ADMINISTRATIVE AGENT
OR ANY LENDER IN CONNECTION WITH THIS AGREEMENT, THE NOTES OR THE OTHER LOAN
DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE
OF SUCH RIGHTS AND OBLIGATIONS, ON BEHALF OF ITSELF OR ITS PROPERTY, IN THE
MANNER SPECIFIED IN SECTION 14.1. NOTHING IN THIS SECTION 14.9 SHALL AFFECT THE
RIGHT OF THE ADMINISTRATIVE AGENT OR ANY LENDER TO SERVE LEGAL PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT OR
ANY LENDER TO BRING ANY ACTION OR PROCEEDING AGAINST THE BORROWER, ANY OF THE
GUARANTORS OR THEIR RESPECTIVE PROPERTIES IN THE COURTS OF ANY OTHER
JURISDICTIONS.
14.10. WAIVER OF JURY TRIAL. THE ADMINISTRATIVE AGENT, EACH LENDER, THE
BORROWER AND EACH GUARANTOR HEREBY IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO
A JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM, COUNTERCLAIM OR OTHER PROCEEDING
ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, THE NOTES OR THE
OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE
PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. The scope of this waiver is intended
to be all-encompassing with respect to any and all disputes that may be filed in
any court and that relate to the subject matter of this transaction, including
without limitation contract claims, tort claims, breach of duty claims and all
other common law and statutory claims. Each of the parties hereto (a)
acknowledges that this waiver is a material inducement for the parties to the
Loan Documents to enter into a business relationship, that the parties to the
Loan Documents have already relied on this waiver in entering into same and the
transactions that are the subject thereof, and that they will continue to rely
on this waiver in their related future dealings, and (b) further warrants and
represents that each has reviewed this waiver with its legal counsel and that
each knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. This waiver is irrevocable, meaning that it may
not be modified either orally or in writing, and this waiver shall apply to any
subsequent amendments, modifications, supplements, extensions, renewals and/or
replacements of this Agreement. In the event of litigation, this Agreement may
be filed as a written consent to a trial by the court.
14.11. Cumulative Remedies. All rights and remedies provided in or
contemplated by this Agreement, the Notes and the other Loan Documents are
cumulative and not exclusive of any right or remedy otherwise provide herein,
therein, at law or in equity.
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14.12. Expenses of Administration and Enforcement. The Borrower shall pay on
demand all reasonable expenses of the Administrative Agent in connection with
this Agreement, the Notes and the other Loan Documents, and the preparation of
any modifications, amendments, restatements, supplements or waivers, including
all attorneys' and paralegals' fees and expenses, all fees and expenses for
title, lien and other public records searches, filing and recordation fees and
taxes, duplicating expenses, corporation search fees, appraisal fees, escrow
agent fees and expenses, and all other customary expenses. If a Default shall
occur, all reasonable out-of-pocket expenses incurred by the Lenders and the
Administrative Agent (including administrative expenses of the Administrative
Agent and the Lenders and reasonable fees and disbursements of outside counsel)
in connection with such Default and collection and other enforcement proceedings
(including bankruptcy proceedings) resulting therefrom shall be paid by the
Borrower, regardless of whether suit is actually commenced to obtain any relief
provided hereunder. The Borrower shall indemnify, defend and hold harmless the
Administrative Agent and each of the Lenders from and against any and all
documentary or filing taxes, assessments or charges by any Governmental
Authority by reason of the execution and delivery of this Agreement, the Notes
and the other Loan Documents and the consummation of the transactions that are
the subject thereof.
14.13. Indemnification. The Borrower and each of the Guarantors, jointly and
severally, shall indemnify, defend and hold harmless the Administrative Agent
and the Lenders (to the fullest extent permitted by law) from and against any
and all claims, demands, lawsuits, costs, expenses, fees, obligations,
liabilities, losses, damages, recoveries and deficiencies, including interest,
penalties and reasonable attorneys' and paralegals' fees and costs and amounts
paid in settlement of any of the foregoing, whether direct, indirect,
consequential or incidental, that the Administrative Agent and the Lenders may
incur or suffer or that may arise out of, result from or relate to (a) this
Agreement, the Notes or the other Loan Documents or the transactions
contemplated hereby or thereby (excluding actions arising out of the
Administrative Agent's or the Lenders' own gross negligence or willful
misconduct and actions arising out of claims made by the Administrative Agent or
any Lender against any of the others), or (b) any action under this Agreement,
the Notes or the other Loan Documents or the transactions contemplated hereby or
thereby (excluding actions arising out of the Administrative Agent's or the
Lenders' own gross negligence or willful misconduct and actions arising out of
claims made by the Administrative Agent or any Lender against any of the
others). In no event shall the Administrative Agent or any Lender be liable to
the Borrower or any of the Guarantors for any matter or thing in connection with
this Agreement, the Notes or the other Loan Documents other than to account for
monies actually received by them in accordance with the terms hereof. This
Section 14.13 shall survive termination of this Agreement.
14.14. Adjustment. Except with respect to payments on account of Swing Line
Loans, if any Lender (a "benefitted Lender") at any time shall receive any
payment of all or part of its Loans or the interest thereon or receive any
collateral therefor, whether voluntarily or involuntarily, by set-off or
otherwise, in an amount proportionately greater than any corresponding payment
to or collateral received by any other Lender in respect of such other Lender's
Loans or the interest thereon, such benefitted Lender shall purchase for cash
from the other Lenders such portion of each Lender's Loans, or shall provide
such other Lenders with the benefits of any such collateral, or the proceeds
thereof, as shall be necessary to cause such benefitted Lender to share the
excess payment or benefits of such collateral or proceeds ratably with each of
the Lenders; provided, however, that if all or any portion of such excess
payment or benefits thereafter is recovered from such benefitted Lender or set
aside, such purchase shall be rescinded and the purchase price and benefit
returned to the extent of such recovery, but without interest. Each Lender so
purchasing a portion of another Lenders' Loans may exercise all rights of
payment (including rights of setoff) with respect to such portion as fully as if
such Lender were the direct holder of such portion.
14.15. Setoff. In addition to any rights and remedies of the Lenders
provided by law, the Lenders each shall have a security interest in any and all
deposits of the Borrower and the Guarantors (general or special, time or demand,
provisional or final) at any time held by any Lender or any Affiliate thereof,
which security interest shall secure the Obligations. Upon the occurrence and
during the continuance of any Event of Default, with the consent of the
Administrative Agent without prior notice to the Borrower or the Guarantors,
65
any notice being specifically waived by the Borrower and the Guarantors to the
fullest extent permitted by applicable law, each Lender may set off and apply
against any indebtedness, whether matured or unmatured, of the Borrower or any
Guarantor to the Lenders, any amount owing from any Lender or any Affiliate
thereof to the Borrower or any Guarantor at, or at any time after, the
occurrence of an Event of Default (and each Affiliate of any Lender is
irrevocably authorized to permit such setoff and application), and the aforesaid
right of setoff may be exercised by any Lender against the Borrower or the
Guarantors or against any trustee in bankruptcy, debtor in possession, assignee
for the benefit of creditors, receiver or execution, judgment, or attachment
creditor of the Borrower or any Guarantor, or against anyone else claiming
through or against the Borrower or any such Guarantor or such trustee in
bankruptcy, debtor in possession, assignee for the benefit of creditors,
receiver or execution, judgment or other attachment creditor, notwithstanding
the fact that such right of setoff shall not have been exercised by any Lender
prior to the making, filing or issuance, or service upon any Lender of, or of
notice of, any such petition, assignment for the benefit of creditors,
appointment or application for the appointment of a receiver, or issuance of
execution, subpoena, order or warrant. Each Lender promptly shall notify the
Borrower or the Guarantors and the Administrative Agent after any such setoff
and application made by any Lender; provided, however, that failure to give such
notice shall not affect the validity of such setoff and application.
14.16. Other Accommodations to the Borrower and the Guarantors; No Rights
By Virtue of Cross-Collateralization.
(a) Each Lender (including the Administrative Agent) may, without
notice to or consent by any other Lender, make or participate in loans,
extensions of credit or other financial accommodations to or for the
benefit of the Borrower and/or any of its Subsidiaries on any terms that it
deems desirable, and engage in other business transactions, in the same
manner as if this Agreement were not in existence, all without limiting,
waiving or otherwise impairing any rights of such Lender or any other
Lender under this Agreement. Without limiting the generality of the
foregoing, the Lenders acknowledge and agree that so long as a Lender acts
in good faith and the other Lenders' interests in the Obligations and the
Collateral are not impaired thereby, (i) such Lender may be preferred or
secured in any manner that it deems advisable with respect to such other
loans, extensions of credit, financial accommodations and transactions,
(ii) such Lender shall be under no obligation to collect or attempt to
collect any payments in respect of the Obligations in preference to the
collection or enforcement of any other borrowings or obligations of the
Borrower and/or its Subsidiaries to such Lender, and (iii) any amounts
collected by such Lender from the Borrower and/or its Subsidiaries that are
not expressly designated (or reasonably determinable to be intended) as
being in payment of the Obligations may be applied to any of the
obligations of such Person to such Lender in any manner deemed appropriate
by such Lender.
(b) The Lenders acknowledge and agree that the Collateral
constitutes all of the collateral security for the Obligations and that, as
among themselves, no Lender shall have any interest in (i) any property or
interests of the Borrower or any of its Subsidiaries, other than the
Collateral, that now or hereafter secures loans, extensions of credit,
other financial accommodations and other transactions (excluding the
Obligations), of the Borrower or any of its Subsidiaries with any other
Lender, whether entered into directly or acquired by such Lender, (ii) any
property of the Borrower or any of its Subsidiaries, other than the
Collateral, now or hereafter in the possession or control of any other
Lender, (iii) any deposit, not constituting Collateral, now or hereafter
held by any other Lender, or (iv) any other indebtedness now or hereafter
owing to any other Lender; any of which may be or become security for or
otherwise available for payment or performance of the Obligations by reason
of any cross-collateralization or any general description of secured
indebtedness(es) and/or obligation(s) contained in any mortgage, security
agreement or other security instrument or agreement held by any Lender, or
by reason of the right of setoff, counterclaim or otherwise.
Notwithstanding the foregoing, if any such property, deposit or
indebtedness, or any proceeds thereof, in the discretion of the Lender
holding same, is applied to the reduction of the Obligations, then all of
the Lenders shall
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e entitled to their respective Percentages of such application in the
manner provided in Sections 3.3 and 14.14.
14.17. Survival of Representations and Warranties. All representations
and warranties of the Borrower and the Guarantors set forth in this Agreement,
the Notes and the other Loan Documents and in any other certificate, opinion or
other statement provided at any time by or on behalf of the Borrower and the
Guarantors in connection herewith shall survive the execution of the delivery of
this Agreement, the Notes and the other Loan Documents, the purchase and sale of
the Notes hereunder and the payment or other satisfaction of the Obligations.
14.18. Relationship of the Parties. None of the Administrative Agent
or the Lenders shall be deemed partners or joint venturers with the Borrower or
the Guarantors or any Affiliate thereof in making this Agreement or by any
action taken hereunder. The Borrower and the Guarantors, jointly and severally,
shall indemnify, defend and hold harmless the Lenders and the Administrative
Agent from and against any and all claims, demands, lawsuits, costs, expenses,
fees, obligations, liabilities, losses, damages, recoveries and deficiencies,
including interest, penalties and reasonable attorneys' fees and costs, whether
direct, indirect, consequential or incidental, that the Lenders or the
Administrative Agent may incur or suffer or that may arise out of, result from
or relate to such a construction of the parties and their relationship. This
Section 14.18 shall survive termination of this Agreement.
14.19. Destruction of Records. Any documents, schedules, invoices or
other papers delivered to the Administrative Agent or the Lenders at their
option may be destroyed or otherwise disposed of by them six (6) months after
they are delivered to or received by them, unless the Borrower or any Guarantor
requests, in writing, the return of such documents, schedules, invoices or other
papers and makes reasonably acceptable arrangements, at the Borrower's or such
Guarantor's expense, for their return.
14.20. Execution in Counterparts; Effectiveness.
(a) This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original hereof for all purposes, but
all of which together shall constitute one and the same document. One
or more counterparts of this Agreement may be executed by one or more
of the parties hereto, and some different counterparts or copies
executed by other parties. Each counterpart hereof executed by any
party hereto shall be binding upon the party executing same even though
other parties may execute one or more different counterparts, and all
counterparts hereof so executed shall constitute but one and the same
agreement. Each party hereto, by execution of a counterpart hereof,
expressly authorizes and directs any other party hereto to detach the
signature pages (and any corresponding acknowledgment pages) thereof
from the counterpart hereof executed by the authorizing party and affix
same to another identical counterpart hereof such that upon execution
of multiple counterparts hereof by all parties hereto, there shall be
one counterpart hereof to which is attached the signature pages (and
any corresponding acknowledgment pages) containing signatures (and
acknowledgments) of all parties hereto.
(b) This Agreement shall become effective when (i) the
Administrative Agent shall have received counterparts or signature
pages executed by the Borrower, the Guarantors, the Administrative
Agent and the Lenders, or (ii) in the case of any Lender, the
Administrative Agent shall have received telecopied notice from such
Lender that it has executed a counterpart hereof or signature page
hereto and forwarded the same to the Administrative Agent by first
class, registered or certified mail as set forth in Section 14.1. A set
of the copies of this Agreement or counterparts signed by all of the
parties shall be lodged with the Borrower, on behalf of itself and the
Guarantors, and the Administrative Agent.
14.21. Interest and Loan Charges Not to Exceed Maximum Amounts
Allowed by Law. It is the intention of the Borrower and the Lenders to conform
strictly to all laws applicable to the Lenders that govern
67
or limit the interest and loan charges that may be charged in respect of the
Obligations. Anything in this Agreement, the Notes or any of the other Loan
Documents to the contrary notwithstanding, in no event whatsoever, whether by
reason of advancement of proceeds of the Loans, acceleration of the maturity of
the unpaid balance of any of the Obligations or otherwise, shall the interest
and loan charges agreed to be paid to any of the Lenders for the use of the
money advanced or to be advanced hereunder exceed the maximum amounts
collectible by such Lender pursuant to applicable law. If for any reason
whatsoever the interest or loan charges paid or contracted to be paid by the
Borrower to any of the Lenders in respect of the Obligations shall exceed the
maximum amounts collectible under the law applicable to such Lender, then, in
that event, and notwithstanding anything to the contrary in this Agreement, the
Notes or any other Loan Document: (a) the aggregate of all consideration that
constitutes interest or loan charges under the law applicable to such Lender
that is contracted for, taken, reserved, charged or received under this
Agreement, the Notes or any other Loan Document or otherwise in connection with
the Obligations under no circumstances shall exceed the maximum amounts allowed
by such applicable law, and any excess shall be credited by such Lender on the
principal amount of the Obligations (or, to the extent the principal amount
outstanding under this Agreement, the Notes and the other Loan Documents has
been or thereby would be paid in full, refunded to the Borrower); and (b) in the
event that the maturity of any or all of the Obligations is accelerated by
reason of an election of the Lenders resulting from any Default under this
Agreement or otherwise, or in the event of any required or permitted prepayment,
then such consideration that constitutes interest or loan charges under the law
applicable to any Lender may never include more than the maximum amounts allowed
by the law applicable to such Lender, and any excess interest or loan charges
provided for in this Agreement or otherwise shall be canceled automatically as
of the date of such acceleration or prepayment and, if theretofore paid, shall
be credited by such Lender on the principal amount of the Obligations (or, to
the extent the principal amount of the Obligations has been or thereby would be
paid in full, refunded by such Lender to the Borrower). All sums paid or agreed
to be paid to the Lenders for the use, forbearance or detention of sums due
hereunder shall, to the extent permitted by applicable law, be prorated,
allocated and spread throughout the full term of the Obligations until payment
in full so that the rate or amount of interest and loan charges on account of
the Obligations will not exceed any applicable legal limitation. The right to
accelerate the maturity of the Obligations does not include the right to
accelerate the maturity of any interest or loan charges not otherwise accrued on
the date of such acceleration, and the Lenders do not intend to charge or
collect any unearned interest or loan charges in the event of any such
acceleration.
14.22. Final Agreement. This written agreement represents the
final agreement between the parties and may not be contradicted by evidence of
prior, contemporaneous or subsequent oral agreements of the parties. There are
no unwritten oral agreements between the parties.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the date first written above.
[SIGNATURE PAGES FOLLOW]
68
BORROWER:
NN, INC.,
a Delaware corporation
By: /s/ David L. Dyckman
-----------------------------------------------
Name: David L. Dyckman
----------------------------------------
Title: VP & CFO
----------------------------------------
GUARANTORS:
INDUSTRIAL MOLDING GP, LLC,
a Delaware limited liability company
By: /s/ David L. Dyckman
-----------------------------------------------
Name: David L. Dyckman
----------------------------------------
Title: Manager
----------------------------------------
INDUSTRIAL MOLDING LP, LLC,
a Tennessee limited liability company
By: /s/ William C. Kelly, Jr.
------------------------------------------------
Name: William C. Kelly, Jr.
-----------------------------------------
Title: Manager
-----------------------------------------
INDUSTRIAL MOLDING GROUP, L.P.,
a Tennessee limited partnership
By: Industrial Molding GP, LLC, a Delaware limited
liability company, its general partner
By: /s/ David L. Dyckman
------------------------------------------
Name: David L. Dyckman
-----------------------------------
Title: Manager
-----------------------------------
DELTA RUBBER COMPANY,
a Connecticut corporation
By: /s/ David L. Dyckman
--------------------------------------------------
Name: David L. Dyckman
------------------------------------------
Title: VP
------------------------------------------
69
[Lender's Signature Page to $60,000.000
NN, Inc.
Credit Agreement dated July 20, 2001]
-------
AMSOUTH BANK, as a Lender and as Administrative
Agent
By: /s/ Jerry C. Greene
------------------------------------
Name: Jerry C. Greene
-----------------------------
Title: Senior Vice President
-----------------------------
Address: AmSouth Bank
AmSouth Center
315 Deaderick Street
Nashville, Tennessee 37237
Attn: Corporate Finance
Telecopy No. 615/748-1501
Initial Commitment: $20,000,000
*(subject to Section 2.1.1)
Percentage: 33.333333%
70
[Lender's Signature Page to $60,000.000
NN, Inc.
Credit Agreement dated July 20, 2001]
BANK ONE, KENTUCKY, NA, as a Lender and as
Co-Agent
By: /s/ Darrin J. McCauley
----------------------------------------
Name: Darrin J. McCauley
------------------------------
Title: Vice President
------------------------------
Address: Bank One, Kentucky, NA
416 West Jefferson Street
Louisville, Kentucky 40202
Attn: Darrin J. McCauley
Telecopy No. 502/566-8200
Initial Commitment: $15,000,000
*(subject to Section 2.1.1)
Percentage: 25.00%
71
[Lender's Signature Page to $60,000.000
NN, Inc.
Credit Agreement dated July 20, 2001]
FIRSTAR BANK, N.A., as a Lender
By: /s/ Russell S. Rogers
----------------------------------------
Name: Russell S. Rogers
--------------------------------
Title: Vice President
--------------------------------
Address: Firstar Bank, N.A.
150 Fourth Avenue, North
2/nd/ Floor
Nashville, Tennessee 37219
Attn: Russell S. Rogers
Telecopy No. 615/251-9247
Initial Commitment: $10,000,000
*(subject to Section 2.1.1)
Percentage: 16.666667%
72
[Lender's Signature Page to $60,000.000
NN, Inc.
Credit Agreement dated July 20, 2001]
SUNTRUST BANK, as a Lender
By: /s/ William E. Edwards, III
----------------------------------------
Name: William E. Edwards, III
-------------------------------
Title: Vice President
-------------------------------
Address: Suntrust Bank
207 Mockingbird Lane
Johnson City, Tennessee 37604
Attn: William E. Edwards, III
Telecopy No. 423/434-0338
Initial Commitment: $7,500,000
*(subject to Section 2.1.1)
Percentage: 12.50%
73
[Lender's Signature Page to $60,000.000
NN, Inc.
Credit Agreement dated July 20, 2001]
FIRST TENNESSEE BANK,
NATIONAL ASSOCIATION, as a Lender
By: /s/ J. Michael Blackwell
----------------------------------------
Name: J. Michael Blackwell
-------------------------------
Title: Sr. VP
-------------------------------
Address: First Tennessee Bank, National
Association
2112 North Roan Street
5/th/ Floor
Johnson City, Tennessee 37601
Attn: J. Michael Blackwell
Telecopy No. 423/461-1208
Initial Commitment: $7,500,000
*(subject to Section 2.1.1)
Percentage: 12.50%
74
SCHEDULES AND EXHIBITS
Schedules
Schedule 7.1 Borrower, Guarantors and Subsidiaries -
Capitalization and Jurisdictions of Incorporation and
Foreign Qualification
Schedule 7.3 Post-Closing Consents
Schedule 7.4 Conflicts
Schedule 7.6 Pending Litigation
Schedule 7.17A Indebtedness
Schedule 7.17B Contingent Obligations
Schedule 7.18A Business Locations
Schedule 7.18B Trade Names
Schedule 7.25 Environmental Matters
Schedule 7.26 Material Contracts and Capitalized Lease Obligations
Schedule 9.4 Existing Investments
75
Exhibits
Exhibit 1.1A Form of Supplement to Credit Agreement
Exhibit 1.1B Form of Subordination Provisions
Exhibit 2.2.5 Form of Notice of Borrowing
Exhibit 2.4.2 Form of Notice of Conversion/Continuation
Exhibit 2.5A Form of Revolving Note
Exhibit 2.5B Form of Term Note
Exhibit 2.5C Form of Swing Line Note
Exhibit 4.1 Form of Pledge Agreement
Exhibit 6.1.1A Form of Opinion of Counsel to the Borrower and the
Guarantors
Exhibit 6.1.1B Form of Solvency Certificate of Borrower
Exhibit 6.1.1C Form of Solvency Certificate of Guarantors
Exhibit 13.2 Form of Assignment and Acceptance
76