1
EXHIBIT 10.3
CREDIT AGREEMENT
Dated as of March 31, 1998
among
SIMCALA, INC.,
as Borrower,
SIMCALA HOLDINGS, INC.,
AND
CERTAIN SUBSIDIARIES OF THE PARENT
FROM TIME TO TIME PARTY HERETO,
as Guarantors,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTY HERETO
AND
NATIONSBANK, N. A.,
as Agent
2
TABLE OF CONTENTS
SECTION 1 DEFINITIONS............................................................................................ 1
1.1 Definitions...................................................................................... 1
1.2 Computation of Time Periods......................................................................23
1.3 Accounting Terms.................................................................................23
SECTION 2 CREDIT FACILITIES......................................................................................24
2.1 Loans............................................................................................24
2.2 Letter of Credit Subfacility.....................................................................26
SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES.........................................................31
3.1 Default Rate.....................................................................................31
3.2 Extension and Conversion.........................................................................31
3.3 Prepayments......................................................................................32
3.4 Termination and Reduction of Committed Amount....................................................33
3.5 Fees.............................................................................................33
3.6 Capital Adequacy.................................................................................34
3.7 Limitation on Eurodollar Loans...................................................................35
3.8 Illegality.......................................................................................35
3.9 Requirements of Law..............................................................................36
3.10 Treatment of Affected Loans......................................................................37
3.11 Taxes............................................................................................37
3.12 Compensation.....................................................................................39
3.13 Pro Rata Treatment...............................................................................40
3.14 Sharing of Payments..............................................................................41
3.15 Payments, Computations, Etc......................................................................41
3.16 Evidence of Debt.................................................................................43
SECTION 4 GUARANTY...............................................................................................44
4.1 The Guaranty.....................................................................................44
4.2 Obligations Unconditional........................................................................44
4.3 Reinstatement....................................................................................45
4.4 Certain Additional Waivers.......................................................................45
4.5 Remedies.........................................................................................46
4.6 Rights of Contribution...........................................................................46
4.7 Guarantee of Payment; Continuing Guarantee.......................................................47
SECTION 5 CONDITIONS.............................................................................................47
5.1 Closing Conditions...............................................................................47
5.2 Conditions to all Extensions of Credit...........................................................53
SECTION 6 REPRESENTATIONS AND WARRANTIES.........................................................................54
6.1 Financial Condition..............................................................................54
6.2 No Material Change...............................................................................55
6.3 Organization and Good Standing...................................................................55
6.4 Power; Authorization; Enforceable Obligations....................................................55
6.5 No Conflicts.....................................................................................56
6.6 No Default.......................................................................................56
6.7 Ownership........................................................................................57
6.8 Indebtedness.....................................................................................57
i
3
6.9 Litigation.........................................................................................57
6.10 Taxes............................................................................................57
6.11 Compliance with Law..............................................................................57
6.12 ERISA............................................................................................57
6.13 Subsidiaries.....................................................................................59
6.14 Governmental Regulations, Etc....................................................................59
6.15 Purpose of Loans and Letters of Credit...........................................................60
6.16 Environmental Matters............................................................................60
6.17 Intellectual Property............................................................................61
6.18 Solvency.........................................................................................62
6.19 Investments......................................................................................62
6.20 Location of Collateral...........................................................................62
6.21 Disclosure.......................................................................................62
6.22 No Burdensome Restrictions.......................................................................62
6.23 Brokers' Fees....................................................................................62
6.24 Labor Matters....................................................................................62
6.25 Nature of Business...............................................................................63
6.26 Representations and Warranties from Purchase Agreement...........................................63
6.27 Year 2000 Compliance.............................................................................63
SECTION 7 AFFIRMATIVE COVENANTS..................................................................................63
7.1 Information Covenants..............................................................................63
7.2 Preservation of Existence and Franchises...........................................................67
7.3 Books and Records..................................................................................67
7.4 Compliance with Law................................................................................67
7.5 Payment of Taxes and Other Indebtedness............................................................67
7.6 Insurance..........................................................................................67
7.7 Maintenance of Property............................................................................68
7.8 Performance of Obligations.........................................................................68
7.9 Use of Proceeds....................................................................................68
7.10 Audits/Inspections.................................................................................69
7.11 Financial Covenants................................................................................69
7.12 Additional Credit Parties..........................................................................70
7.13 Pledged Assets.....................................................................................70
SECTION 8 NEGATIVE COVENANTS.....................................................................................71
8.1 Indebtedness.......................................................................................71
8.2 Liens..............................................................................................73
8.3 Nature of Business.................................................................................73
8.4 Consolidation, Merger, Dissolution, etc............................................................73
8.5 Asset Dispositions.................................................................................73
8.6 Investments........................................................................................74
8.7 Restricted Payments................................................................................74
8.8 Prepayments of Indebtedness, etc...................................................................75
8.9 Transactions with Affiliates.......................................................................75
8.10 Fiscal Year........................................................................................75
8.11 Limitation on Restricted Actions...................................................................76
ii
4
8.12 Ownership of Subsidiaries; Limitations on Parent.................................................76
8.13 Sale Leasebacks..................................................................................77
8.14 Capital Expenditures.............................................................................77
8.15 No Further Negative Pledges......................................................................77
8.16 Operating Lease Obligations......................................................................77
8.17 No Foreign Subsidiaries..........................................................................77
SECTION 9EVENTS OF DEFAULT.......................................................................................78
9.1 Events of Default..................................................................................78
9.2 Acceleration; Remedies.............................................................................80
SECTION 10AGENCY PROVISIONS......................................................................................81
10.1 Appointment, Powers and Immunities...............................................................81
10.2 Reliance by Agent................................................................................82
10.3 Defaults.........................................................................................82
10.4 Rights as a Lender...............................................................................82
10.5 Indemnification..................................................................................83
10.6 Non-Reliance on Agent and Other Lenders..........................................................83
10.7 Successor Agent..................................................................................83
SECTION 11MISCELLANEOUS..........................................................................................84
11.1 Notices..........................................................................................84
11.2 Right of Set-Off; Adjustments....................................................................85
11.3 Benefit of Agreement.............................................................................85
11.4 No Waiver; Remedies Cumulative...................................................................87
11.5 Expenses; Indemnification........................................................................87
11.6 Amendments, Waivers and Consents.................................................................88
11.7 Counterparts.....................................................................................90
11.8 Headings.........................................................................................90
11.9 Survival.........................................................................................90
11.10 Governing Law; Submission to Jurisdiction; Venue.................................................90
11.11 Severability.....................................................................................91
11.12 Entirety.........................................................................................91
11.13 Binding Effect; Termination......................................................................91
11.14 Confidentiality..................................................................................92
11.15 Source of Funds..................................................................................92
11.16 Conflict.........................................................................................93
iii
5
SCHEDULES
=========
Schedule 1.1A Investments
Schedule 1.1B Liens
Schedule 2.1(a) Lenders
Schedule 5.1(c)(i) Form of Legal Opinion (General External Counsel)
Schedule 5.1(c)(ii) Form of Legal Opinion (Local Corporate Counsel)
Schedule 5.1(c)(iii) Form of Legal Opinion (Local Collateral Counsel)
Schedule 6.4 Required Consents, Authorizations, Notices
and Filings
Schedule 6.9 Litigation
Schedule 6.12 ERISA
Schedule 6.13 Subsidiaries
Schedule 6.16 Environmental Disclosures
Schedule 6.17 Intellectual Property
Schedule 6.20(a) Mortgaged Properties
Schedule 6.20(b) Collateral Locations
Schedule 6.20(c) Chief Executive Offices/Principal Places
of Business
Schedule 7.6 Insurance
Schedule 8.1 Indebtedness
EXHIBITS
========
Exhibit 1.1A Form of Pledge Agreement
Exhibit 1.1B Form of Security Agreement
Exhibit 2.1(b)(i) Form of Notice of Borrowing
Exhibit 2.1(e) Form of Note
Exhibit 3.2 Form of Notice of Extension/Conversion
Exhibit 7.1(c) Form of Officer's Compliance Certificate
Exhibit 7.12 Form of Joinder Agreement
Exhibit 11.3(b) Form of Assignment and Acceptance
iv
6
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of March 31, 1998 (as amended,
modified, restated or supplemented from time to time, the "Credit Agreement"),
is by and among SIMCALA, INC., a Delaware corporation (the "Borrower"), SIMCALA
HOLDINGS, INC., a Georgia corporation (the "Parent"), the Subsidiary Guarantors
(as defined herein), the Lenders (as defined herein) and NATIONSBANK, N. A., as
Agent for the Lenders (in such capacity, the "Agent").
W I T N E S S E T H
WHEREAS, the Borrower has requested that the Lenders provide a $15
million credit facility for the purposes hereinafter set forth; and
WHEREAS, the Lenders have agreed to make the requested credit facility
available to the Borrower on the terms and conditions hereinafter set forth;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS
-----------
1.1 DEFINITIONS.
As used in this Credit Agreement, the following terms shall have the
meanings specified below unless the context otherwise requires:
"Acquired Debt" means, with respect to any specified Person,
(i) Indebtedness of any other Person existing at the time such other
Person is merged with or into or became a Subsidiary of such specified
Person, including, without limitation, Indebtedness incurred in
connection with, or in contemplation of, such other Person merging with
or into or becoming a Subsidiary of such specified Person, and (ii)
Indebtedness secured by a Lien encumbering any asset acquired by such
specified Person.
"Acquisition" means the acquisition by the Parent of all of
the capital stock of the Borrower pursuant to the Purchase Agreement.
"Additional Credit Party" means each Person that becomes a
Subsidiary Guarantor after the Closing Date by execution of a Joinder
Agreement.
"Adjusted Base Rate" means the Base Rate plus the Applicable
Percentage.
1
7
"Adjusted Eurodollar Rate" means the Eurodollar Rate plus the
Applicable Percentage.
"Affiliate" means, with respect to any Person, any other
Person (i) directly or indirectly controlling or controlled by or under
direct or indirect common control with such Person or (ii) directly or
indirectly owning or holding five percent (5%) or more of the Capital
Stock in such Person. For purposes of this definition, "control" when
used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative
to the foregoing.
"Agency Services Address" means NationsBank, N. A.,
NC1-001-15-03, 101 North Tryon Street, Charlotte, North Carolina 28255,
Attn: Agency Services, or such other address as may be identified by
written notice from the Agent to the Borrower.
"Agent" shall have the meaning assigned to such term in the
heading hereof, together with any successors or assigns.
"Agent's Fee Letter" means that certain letter agreement,
dated as of the Closing Date, between the Agent and the Borrower, as
amended, modified, restated or supplemented from time to time.
"Agent's Fees" shall have the meaning assigned to such term in
Section 3.5(d).
"Applicable Lending Office" means, for each Lender, the office
of such Lender (or of an Affiliate of such Lender) as such Lender may
from time to time specify to the Agent and the Borrower by written
notice as the office by which its Eurodollar Loans are made and
maintained.
"Applicable Percentage" means, for purposes of calculating the
applicable interest rate for any day for any Loan, the applicable rate
of the Unused Fee for any day for purposes of Section 3.5(b), the
applicable rate of the Standby Letter of Credit Fee for any day for
purposes of Section 3.5(c)(i) or the applicable rate of the Trade
Letter of Credit Fee for any day for purposes of Section 3.5(c)(ii),
the appropriate applicable percentage corresponding to the Total
Leverage Ratio in effect as of the most recent Calculation Date:
2
8
===================================================================================================
APPLICABLE
PERCENTAGE APPLICABLE PERCENTAGE PERCENTAGE APPLICABLE
FOR PERCENTAGE FOR FOR TRADE FOR
TOTAL EURODOLLAR FOR BASE STANDBY LETTER OF COMMITMENT
PRICING LEVERAGE RATIO RATE LETTER OF CREDIT FEE FEES
LEVEL RATIO LOANS LOANS CREDIT FEE
- ---------------------------------------------------------------------------------------------------
I > 3.75 to 2.25% 1.25% 2.25% .50% .50%
1.0
- ---------------------------------------------------------------------------------------------------
II < 3.75 to 2.00% 1.00% 2.00% .50% .50%
1.0 but >
2.50 to
1.0
- ---------------------------------------------------------------------------------------------------
III < 2.50 to 1.75% .75% 1.75% .50% .375%
1.0
===================================================================================================
The Applicable Percentages shall be determined and adjusted quarterly
on the date (each a "Calculation Date") five Business Days after the
earlier of (x) the date by which the Borrower is required to provide
the officer's certificate in accordance with the provisions of Section
7.1(c) for the most recently ended fiscal quarter of the Credit Parties
or (y) the date such officer's certificate is actually delivered to the
Agent; provided, however, that (i) the initial Applicable Percentages
shall be based on Pricing Level I (as shown above) and shall remain at
Pricing Level I until the first Calculation Date subsequent to the
March 31, 1999, and, thereafter, the Pricing Level shall be determined
by the Total Leverage Ratio as of the last day of the most recently
ended fiscal quarter of the Credit Parties preceding the applicable
Calculation Date, and (ii) if the Borrower fails to provide the
officer's certificate to the Agency Services Address as required by
Section 7.1(c) for the last day of the most recently ended fiscal
quarter of the Credit Parties preceding the applicable Calculation
Date, the Applicable Percentage from such Calculation Date shall be
based on Pricing Level I until such time as an appropriate officer's
certificate is provided, whereupon the Pricing Level shall be
determined by the Total Leverage Ratio as of the last day of the most
recently ended fiscal quarter of the Credit Parties preceding such
Calculation Date. Except as provided above, each Applicable Percentage
shall be effective from one Calculation Date until the next Calculation
Date. Any adjustment in the Applicable Percentages shall be applicable
to all existing Loans and Letters of Credit as well as any new Loans
and Letters of Credit made or issued.
"Application Period", in respect of any Asset Disposition,
shall have the meaning assigned to such term in Section 8.5.
"Asset Disposition" means the disposition of any or all of the
assets (including without limitation the Capital Stock of a Subsidiary)
of any Credit Party whether by sale, lease, transfer or otherwise. The
term "Asset Disposition" (i) shall not include (a) the sale of
inventory in the ordinary course of business for fair consideration,
(b) the sale or
3
9
disposition of machinery and equipment no longer used or useful in the
conduct of such Person's business, (c) any sale of assets having a net
book value of less $100,000 or (d) any Equity Issuance and (ii) shall
include a casualty loss or condemnation to the extent that the Net Cash
Proceeds received by the affected Credit Party from the insurer or
condemning authority, as applicable, are required by the terms of
Section 7.6 to be applied to the Credit Party Obligations.
"Asset Disposition Prepayment Event" means, with respect to
any Asset Disposition other than an Excluded Asset Disposition, the
failure of the Borrower to apply (or cause to be applied) the Net Cash
Proceeds of such Asset Disposition to the purchase, acquisition or
construction of Eligible Assets during the Application Period for such
Asset Disposition.
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the
United States Code, as amended, modified, succeeded or replaced from
time to time.
"Bankruptcy Event" means, with respect to any Person, the
occurrence of any of the following with respect to such Person: (i) a
court or governmental agency having jurisdiction in the premises shall
enter a decree or order for relief in respect of such Person in an
involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of such Person or for any substantial part of its Property or
ordering the winding up or liquidation of its affairs; or (ii) there
shall be commenced against such Person an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter
in effect, or any case, proceeding or other action for the appointment
of a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of such Person or for any substantial part of its
Property or for the winding up or liquidation of its affairs, and such
involuntary case or other case, proceeding or other action shall remain
undismissed, undischarged or unbonded for a period of sixty (60)
consecutive days; or (iii) such Person shall commence a voluntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or consent to the entry of an order for relief in
an involuntary case under any such law, or consent to the appointment
or taking possession by a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of such Person or for any
substantial part of its Property or make any general assignment for the
benefit of creditors; or (iv) such Person shall be unable to, or shall
admit in writing its inability to, pay its debts generally as they
become due.
"Base Rate" means, for any day, the rate per annum equal to
the higher of (a) the Federal Funds Rate for such day plus one-half of
one percent (0.5%) and (b) the Prime Rate for such day. Any change in
the Base Rate due to a change in the Prime Rate or the Federal Funds
Rate shall be effective on the effective date of such change in the
Prime Rate or Federal Funds Rate.
4
10
"Base Rate Loan" means any Loan bearing interest at a rate
determined by reference to the Base Rate.
"Borrower" means the Person identified as such in the heading
hereof, together with any permitted successors and assigns.
"Business Day" means a day other than a Saturday, Sunday or
other day on which commercial banks in Charlotte, North Carolina or New
York, New York are authorized or required by law to close, except that,
when used in connection with a Eurodollar Loan, such day shall also be
a day on which dealings between banks are carried on in U.S. dollar
deposits in London, England.
"Calculation Date" has the meaning set forth in the definition
of "Applicable Percentage" set forth in this Section 1.1.
"Capital Lease" means, as applied to any Person, any lease of
any Property (whether real, personal or mixed) by that Person as lessee
which, in accordance with GAAP, is or should be accounted for as a
capital lease on the balance sheet of that Person.
"Capital Stock" means (i) in the case of a corporation,
capital stock, (ii) in the case of an association or business entity,
any and all shares, interests, participations, rights or other
equivalents (however designated) of capital stock, (iii) in the case of
a partnership, partnership interests (whether general or limited), (iv)
in the case of a limited liability company, membership interests and
(v) any other interest or participation that confers on a Person the
right to receive a share of the profits and losses of, or distributions
of assets of, the issuing Person.
"Cash Equivalents" means (a) securities issued or directly and
fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof (provided that the full faith and
credit of the United States of America is pledged in support thereof)
having maturities of not more than twelve months from the date of
acquisition, (b) U.S. dollar denominated time deposits and certificates
of deposit of (i) any Lender, (ii) any domestic commercial bank of
recognized standing having capital and surplus in excess of
$500,000,000 or (iii) any bank whose short-term commercial paper rating
from S&P is at least A-1 or the equivalent thereof or from Moody's is
at least P-1 or the equivalent thereof (any such bank being an
"Approved Bank"), in each case with maturities of not more than 270
days from the date of acquisition, (c) commercial paper and variable or
fixed rate notes issued by any Approved Bank (or by the parent company
thereof) or any variable rate notes issued by, or guaranteed by, any
domestic corporation rated A-1 (or the equivalent thereof) or better by
S&P or P-1 (or the equivalent thereof) or better by Moody's and
maturing within six months of the date of acquisition, (d) repurchase
agreements entered into by any Person with a bank or trust company
(including any of the Lenders) or recognized securities dealer having
capital and surplus in excess of $500,000,000 for direct obligations
issued by or fully guaranteed by the United States of America in which
such Person shall have a perfected first priority security interest
(subject
5
11
to no other Liens) and having, on the date of purchase thereof, a fair
market value of at least 100% of the amount of the repurchase
obligations and (e) Investments, classified in accordance with GAAP as
current assets, in money market investment programs registered under
the Investment Company Act of 1940, as amended, which are administered
by reputable financial institutions having capital of at least
$500,000,000 and the portfolios of which are limited to Investments of
the character described in the foregoing subdivisions (a) through (d).
"CGW" means CGW III, any Affiliates of CGW III, any limited
partners of CGW III and any Affiliates of such limited partners.
"CGW III" means CGW Southeast Partners III, L.P., a Delaware
limited partnership.
"Change of Control" means any of the following events: (a) the
failure of the Parent to own all of the Capital Stock of the Borrower,
(b) the failure of CGW to own at least 51% of the Capital Stock of the
Parent, (d) during any period of up to 24 consecutive months,
commencing after the Closing Date, individuals who at the beginning of
such 24 month period were directors of the Parent (together with any
new director whose election by the Parent's Board of Directors or whose
nomination for election by the Parent's shareholders was approved by a
vote of at least a majority of the directors then still in office who
either were directors at the beginning of such period or whose election
or nomination for election was previously so approved) cease for any
reason to constitute a majority of the directors of the Parent then in
office or (e) the occurrence of a "Change of Control" under and as
defined in either the Senior Note Agreement. As used herein,
"beneficial ownership" shall have the meaning provided in Rule 13d-3 of
the Securities and Exchange Commission under the Securities Exchange
Act of 1934.
"Closing Date" means the date hereof.
"Code" means the Internal Revenue Code of 1986, as amended,
and any successor statute thereto, as interpreted by the rules and
regulations issued thereunder, in each case as in effect from time to
time. References to sections of the Code shall be construed also to
refer to any successor sections.
"Collateral" means a collective reference to the collateral
which is identified in, and at any time will be covered by, the
Collateral Documents.
"Collateral Documents" means a collective reference to the
Security Agreement, the Pledge Agreement, the Mortgage Instruments and
such other documents executed and delivered in connection with the
attachment and perfection of the Agent's security interests and liens
arising thereunder, including without limitation, UCC financing
statements and patent and trademark filings.
6
12
"Commitment" means (i) with respect to each Lender, the
Revolving Commitment of such Lender and (ii) with respect to the
Issuing Lender, the LOC Commitment.
"Commitment Percentage" means, for any Lender, the percentage
identified as its Commitment Percentage on Schedule 2.1(a), as such
percentage may be modified in connection with any assignment made in
accordance with the provisions of Section 11.3.
"Committed Amount" shall have the meaning assigned to such
term in Section 2.1(a).
"Consolidated Capital Expenditures" means, for any period, all
capital expenditures of the Credit Parties on a consolidated basis for
such period, as determined in accordance with GAAP.
"Consolidated EBITDA" means, for any period, the sum of (i)
Consolidated Net Income for such period, plus (ii) an amount which, in
the determination of Consolidated Net Income for such period, has been
deducted for (A) Consolidated Interest Expense, (B) total federal,
state, local and foreign income, value added and similar taxes, (C)
depreciation and amortization expense and (D) extraordinary or
non-recurring losses and (E) losses on the sale or other disposition of
assets, minus (iii) an amount which, in the determination of
Consolidated Net Income for such period, has been included for (A)
extraordinary or non-recurring gains and (E) gains on the sale or other
disposition of assets, all as determined in accordance with GAAP.
"Consolidated Interest Expense" means, for any period,
interest expense (including the amortization of debt discount and
premium, the interest component under Capital Leases and the implied
interest component under Synthetic Leases) of the Credit Parties on a
consolidated basis for such period, as determined in accordance with
GAAP.
"Consolidated Net Income" means, for any period, net income
(excluding extraordinary items) after taxes for such period of the
Credit Parties on a consolidated basis, as determined in accordance
with GAAP.
"Consolidated Net Worth" means, as of any date, shareholders'
equity or net worth of the Credit Parties on a consolidated basis, as
determined in accordance with GAAP.
"Consolidated Scheduled Funded Debt Payments" means, as of the
end of each fiscal quarter of the Credit Parties, for the Credit
Parties on a consolidated basis, the sum of all scheduled payments of
principal on Funded Indebtedness (other than Funded Indebtedness
retired in connection with the Acquisition) for the applicable period
ending on such date (including the principal component of payments due
on Capital Leases during the applicable period ending on such date); it
being understood that Scheduled Funded Debt Payments shall not include
voluntary prepayments or the mandatory prepayments required pursuant to
Section 3.3.
7
13
"Consulting Agreement " means that certain Agreement for
Consulting Services dated March 31, 1998 by and between the Parent and
CGW III, as amended, modified, extended, renewed or replaced from time
to time.
"Continue", "Continuation", and "Continued" shall refer to the
continuation pursuant to Section 3.2 hereof of a Eurodollar Loan from
one Interest Period to the next Interest Period.
"Convert", "Conversion", and "Converted" shall refer to a
conversion pursuant to Section 3.2 or Sections 3.7 through 3.12,
inclusive, of a Base Rate Loan into a Eurodollar Loan.
"Credit Documents" means a collective reference to this Credit
Agreement, the Notes, the LOC Documents, each Joinder Agreement, the
Agent's Fee Letter, the Collateral Documents and all other related
agreements and documents issued or delivered hereunder or thereunder or
pursuant hereto or thereto (in each case as the same may be amended,
modified, restated, supplemented, extended, renewed or replaced from
time to time), and "Credit Document" means any one of them.
"Credit Parties" means a collective reference to the Borrower
and the Guarantors, and "Credit Party" means any one of them.
"Credit Party Obligations" means, without duplication, (i) all
of the obligations of the Credit Parties to the Lenders (including the
Issuing Lender) and the Agent, whenever arising, under this Credit
Agreement, the Notes, the Collateral Documents or any of the other
Credit Documents (including, but not limited to, any interest accruing
after the occurrence of a Bankruptcy Event with respect to any Credit
Party, regardless of whether such interest is an allowed claim under
the Bankruptcy Code) and (ii) all liabilities and obligations, whenever
arising, owing from the Borrower to any Lender, or any Affiliate of a
Lender, arising under any Hedging Agreement.
"Default" means any event, act or condition which with notice
or lapse of time, or both, would constitute an Event of Default.
"Defaulting Lender" means, at any time, any Lender that (a)
has failed to make a Loan or purchase a Participation Interest required
pursuant to the term of this Credit Agreement within one Business Day
of when due, (b) other than as set forth in (a) above, has failed to
pay to the Agent or any Lender an amount owed by such Lender pursuant
to the terms of this Credit Agreement within one Business Day of when
due, unless such amount is subject to a good faith dispute or (c) has
been deemed insolvent or has become subject to a bankruptcy or
insolvency proceeding or with respect to which (or with respect to any
of assets of which) a receiver, trustee or similar official has been
appointed.
"Dollars" and "$" means dollars in lawful currency of the
United States of America.
8
14
"Eligible Assets" means any long-term assets useful in the
same or a similar line of business as the Credit Parties were engaged
in on the Closing Date or any reasonable extensions or expansions
thereof.
"Eligible Assignee" means (i) a Lender; (ii) an Affiliate of a
Lender; and (iii) any other Person approved by the Agent and, unless an
Event of Default has occurred and is continuing at the time any
assignment is effected in accordance with Section 11.3, the Borrower
(such approval not to be unreasonably withheld or delayed by the
Borrower and such approval to be deemed given by the Borrower if no
objection is received by the assigning Lender and the Agent from the
Borrower within two Business Days after notice of such proposed
assignment has been provided by the assigning Lender to the Borrower);
provided, however, that neither the Borrower nor an Affiliate of the
Borrower shall qualify as an Eligible Assignee.
"Environmental Laws" means any and all lawful and applicable
Federal, state, local and foreign statutes, laws, regulations,
ordinances, rules, judgments, orders, decrees, permits, concessions,
grants, franchises, licenses, agreements or other governmental
restrictions relating to the environment or to emissions, discharges,
releases or threatened releases of pollutants, contaminants, chemicals,
or industrial, toxic or hazardous substances or wastes into the
environment including, without limitation, ambient air, surface water,
ground water, or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport,
or handling of pollutants, contaminants, chemicals, or industrial,
toxic or hazardous substances or wastes.
"Equity Issuance" means any issuance by any Credit Party to
any Person which is not a Credit Party of (a) shares of its Capital
Stock, (b) any shares of its Capital Stock pursuant to the exercise of
options or warrants or (c) any shares of its Capital Stock pursuant to
the conversion of any debt securities to equity.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute thereto, as interpreted by
the rules and regulations thereunder, all as the same may be in effect
from time to time. References to sections of ERISA shall be construed
also to refer to any successor sections.
"ERISA Affiliate" means an entity which is under common
control with any Credit Party within the meaning of Section 4001(a)(14)
of ERISA, or is a member of a group which includes any Credit Party and
which is treated as a single employer under Sections 414(b) or (c) of
the Code.
"ERISA Event" means (i) with respect to any Plan, the
occurrence of a Reportable Event or the substantial cessation of
operations (within the meaning of Section 4062(e) of ERISA); (ii) the
withdrawal by any Credit Party or any ERISA Affiliate from a Multiple
Employer Plan during a plan year in which it was a substantial employer
(as such term is defined in Section 4001(a)(2) of ERISA), or the
termination of a Multiple Employer Plan;
9
15
(iii) the distribution of a notice of intent to terminate or the actual
termination of a Plan pursuant to Section 4041(a)(2) or 4041A of ERISA;
(iv) the institution of proceedings to terminate or the actual
termination of a Plan by the PBGC under Section 4042 of ERISA; (v) any
event or condition which could reasonably be expected to constitute
grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan; (vi) the complete or
partial withdrawal of any Credit Party or any ERISA Affiliate from a
Multiemployer Plan; (vii) the conditions for imposition of a lien under
Section 302(f) of ERISA exist with respect to any Plan; or (vii) the
adoption of an amendment to any Plan requiring the provision of
security to such Plan pursuant to Section 307 of ERISA.
"Eurodollar Loan" means any Loan that bears interest at a rate
based upon the Eurodollar Rate.
"Eurodollar Rate" means, for any Eurodollar Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) determined by the Agent to be
equal to the quotient obtained by dividing (a) the Interbank Offered
Rate for such Eurodollar Loan for such Interest Period by (b) 1 minus
the Eurodollar Reserve Requirement for such Eurodollar Loan for such
Interest Period.
"Eurodollar Reserve Requirement" means, at any time, the
maximum rate at which reserves (including, without limitation, any
marginal, special, supplemental, or emergency reserves) are required to
be maintained under regulations issued from time to time by the Board
of Governors of the Federal Reserve System (or any successor) by member
banks of the Federal Reserve System against "Eurocurrency liabilities"
(as such term is used in Regulation D). Without limiting the effect of
the foregoing, the Eurodollar Reserve Requirement shall reflect any
other reserves required to be maintained by such member banks with
respect to (i) any category of liabilities which includes deposits by
reference to which the Adjusted Eurodollar Rate is to be determined, or
(ii) any category of extensions of credit or other assets which include
Eurodollar Loans. The Adjusted Eurodollar Rate shall be adjusted
automatically on and as of the effective date of any change in the
Eurodollar Reserve Requirement.
"Event of Default" shall have the meaning as defined in
Section 9.1.
"Excluded Asset Disposition" means any Asset Disposition by
any Credit Party to any Credit Party other than the Parent if (a) the
Credit Parties shall cause to be executed and delivered such documents,
instruments and certificates as the Agent may request so as to cause
the Credit Parties to be in compliance with the terms of Section 7.13
after giving effect to such Asset Disposition and (b) after giving
effect such Asset Disposition, no Default or Event of Default exists.
"Executive Officer" of any Person means any of the chief
executive officer, chief operating officer, president, vice president,
chief financial officer or treasurer of such Person.
10
16
"Exempt Affiliate Transactions" means (a) transactions between
or among the Borrower and/or its Wholly Owned Subsidiaries, (b)
advances to officers of any Credit Party in the ordinary course of
business to provide for the payment of reasonable expenses incurred by
such persons in the performance of their responsibilities to the
relevant Credit Party or in connection with any relocation, (c) fees
and compensation paid to and indemnity provided on behalf of directors,
officers or employees of any Credit Party in the ordinary course of
business, (d) any employment agreement that is in effect on the Closing
Date and any such agreement entered into by any Credit Party after the
Closing Date in the ordinary course of business of such Credit Party,
(e) any Restricted Payment that is not prohibited by Section 8.7, (f)
payments to the General Partner or its designee of management and
consulting fees in an amount in any fiscal year not to exceed $680,000
and (g) the delegation by the General Partner of its rights and
obligations under the Consulting Agreement to the Management Company
and (h) payment on the Closing Date to the the General Partner or its
designee of an investment banking fee in an amount not to exceed
$1,350,000.
"Fees" means all fees payable pursuant to Section 3.5.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to
the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published by the Federal Reserve
Bank of New York on the Business Day next succeeding such day; provided
that (a) if such day is not a Business Day, the Federal Funds Rate for
such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and
(b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate
charged to the Agent (in its individual capacity) on such day on such
transactions as determined by the Agent.
"Foreign Subsidiary" means, with respect to any Person, any
Subsidiary of such Person which is not incorporated or organized under
the laws of any State of the United States or the District of Columbia.
"Funded Indebtedness" means, with respect to any Person,
without duplication, (a) all Indebtedness of such Person other than
Indebtedness of the types referred to in clause (e), (f), (g), (i),
(l), (k) (to the extent that the related preferred Capital Stock issued
by such Person, by the terms thereof, could not be (at the request of
the holders thereof or otherwise) subject to mandatory sinking fund
payments, redemption or other acceleration prior to the date 124 days
after the Maturity Date) and (m) of the definition of "Indebtedness"
set forth in this Section 1.1, (b) all Indebtedness of another Person
of the type referred to in clause (a) above secured by (or for which
the holder of such Funded Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on, or payable out
of the proceeds of production from, Property owned or acquired by such
Person, whether or not the obligations secured thereby have been
assumed, (c) all
11
17
Guaranty Obligations of such Person with respect to Indebtedness of the
type referred to in clause (a) above of another Person and (d)
Indebtedness of the type referred to in clause (a) above of any
partnership or unincorporated joint venture in which such Person is a
general partner or is otherwise obligated thereunder.
"GAAP" means generally accepted accounting principles in the
United States applied on a consistent basis and subject to the terms of
Section 1.3.
"General Partner" means CGW Southeast III, L.L.C., a Delaware
limited liability company and general partner of CGW III.
"Governmental Authority" means any Federal, state, local or
foreign court or governmental agency, authority, instrumentality or
regulatory body.
"Guarantors" means a collective reference to the Parent and
each of the Subsidiary Guarantors, together with their successors and
permitted assigns, and "Guarantor " means any one of them.
"Guaranty Obligations" means, with respect to any Person,
without duplication, any obligations of such Person (other than
endorsements in the ordinary course of business of negotiable
instruments for deposit or collection) guaranteeing or intended to
guarantee any Indebtedness of any other Person in any manner, whether
direct or indirect, and including without limitation any obligation,
whether or not contingent, (i) to purchase any such Indebtedness or any
Property constituting security therefor, (ii) to advance or provide
funds or other support for the payment or purchase of any such
Indebtedness or to maintain working capital, solvency or other balance
sheet condition of such other Person (including without limitation keep
well agreements, maintenance agreements, comfort letters or similar
agreements or arrangements) for the benefit of any holder of
Indebtedness of such other Person, (iii) to lease or purchase Property,
securities or services primarily for the purpose of assuring the holder
of such Indebtedness (but excluding any obligations of such Person as
lessee under any Operating Lease), or (iv) to otherwise assure or hold
harmless the holder of such Indebtedness against loss in respect
thereof. The amount of any Guaranty Obligation hereunder shall (subject
to any limitations set forth therein) be deemed to be an amount equal
to the outstanding principal amount (or maximum principal amount, if
larger) of the Indebtedness in respect of which such Guaranty
Obligation is made.
"Hedging Agreements" means any interest rate protection
agreement or foreign currency exchange agreement between any Credit
Party and any Lender, or any Affiliate of a Lender.
"IDB Authority" means the Industrial Development Board of the
City of Montgomery, Alabama.
12
18
"Indebtedness" means, with respect to any Person, without
duplication, (a) all obligations of such Person for borrowed money, (b)
all obligations of such Person evidenced by bonds, debentures, notes or
similar instruments, or upon which interest payments are customarily
made, (c) all obligations of such Person under conditional sale or
other title retention agreements relating to Property purchased by such
Person (other than customary reservations or retentions of title under
agreements with suppliers entered into in the ordinary course of
business), (d) all obligations of such Person issued or assumed as the
deferred purchase price of Property or services purchased by such
Person (other than trade debt incurred in the ordinary course of
business and due within six months of the incurrence thereof) which
would appear as liabilities on a balance sheet of such Person, (e) all
obligations of such Person under take-or-pay or similar arrangements or
under commodities agreements, (f) all Indebtedness of others secured by
(or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on, or payable out
of the proceeds of production from, Property owned or acquired by such
Person, whether or not the obligations secured thereby have been
assumed, (g) all Guaranty Obligations of such Person, (h) the principal
portion of all obligations of such Person under Capital Leases, (i) all
obligations of such Person under Hedging Agreements, (j) the maximum
amount of all standby letters of credit issued or bankers' acceptances
facilities created for the account of such Person and, without
duplication, all drafts drawn thereunder (to the extent unreimbursed),
(k) all preferred Capital Stock issued by such Person and which by the
terms thereof could be (at the request of the holders thereof or
otherwise) subject to mandatory sinking fund payments, redemption or
other acceleration prior to the date 124 days after the Maturity Date,
(l) the principal portion of all obligations of such Person under
Synthetic Leases and (m) the Indebtedness of any partnership or
unincorporated joint venture in which such Person is a general partner
or is otherwise obligated thereunder.
"Interbank Offered Rate" means, for any Eurodollar Loan for
any Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Telerate Page 3750
(or any successor page) as the London interbank offered rate for
deposits in Dollars at approximately 11:00 A.M. (London time) two
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period. If for any reason such rate is not
available, the term "Interbank Offered Rate" shall mean, for any
Eurodollar Loan for any Interest Period therefor, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing
on Reuters Screen LIBO Page as the London interbank offered rate for
deposits in Dollars at approximately 11:00 A.M. (London time) two
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period; provided, however, if more than one
rate is specified on Reuters Screen LIBO Page, the applicable rate
shall be the arithmetic mean of all such rates (rounded upwards, if
necessary, to the nearest 1/100 of 1%).
"Interest Coverage Ratio" means, with respect to the Credit
Parties on a consolidated basis for the twelve month period ending on
the last day of any fiscal quarter of the Credit Parties, the ratio of
(a) Consolidated EBITDA for such period to (b) Consolidated Interest
Expense for such period.
13
19
"Interest Payment Date" means (a) as to Base Rate Loans, the
last day of each fiscal quarter of the Borrower and the Maturity Date,
and (b) as to Eurodollar Loans, the last day of each applicable
Interest Period and the Maturity Date, and in addition where the
applicable Interest Period for a Eurodollar Loan is greater than three
months, then also the date three months from the beginning of the
Interest Period and each three months thereafter.
"Interest Period" means, as to Eurodollar Loans, a period of
one, two, three or six months' duration, as the Borrower may elect,
commencing, in each case, on the date of the borrowing (including
continuations and conversions thereof); provided, however, (a) if any
Interest Period would end on a day which is not a Business Day, such
Interest Period shall be extended to the next succeeding Business Day
(except that where the next succeeding Business Day falls in the next
succeeding calendar month, then on the next preceding Business Day),
(b) no Interest Period shall extend beyond the Maturity Date, and (c)
where an Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month in which the
Interest Period is to end, such Interest Period shall end on the last
Business Day of such calendar month.
"Investment" in any Person means (a) the acquisition (whether
for cash, property, services, assumption of Indebtedness, securities or
otherwise, but exclusive of the acquisition of inventory, supplies,
equipment and other assets used or consumed in the ordinary course of
business and capital expenditures not otherwise prohibited hereunder)
of assets, Capital Stock, bonds, notes, debentures, partnership, joint
ventures or other ownership interests or other securities of such other
Person or (b) any deposit with, or advance, loan or other extension of
credit to, such Person (other than (i) deposits made in connection with
the purchase of equipment or other assets in the ordinary course of
business and (ii) deposits of the kinds referred to in clauses (iv) and
(xi) of the definition of "Permitted Liens" set forth in this Section
1.1) or (c) any other capital contribution to or investment in such
Person, including, without limitation, any Guaranty Obligations
(including any support for a letter of credit issued on behalf of such
Person) incurred for the benefit of such Person, but excluding any
Restricted Payment to such Person; provided that an acquisition of
assets, Capital Stock by the Borrower for consideration consisting of
common Capital Stock of the Borrower shall not be deemed to be an
Investment. The term "Investment" shall not include any transaction of
the type described in clause (ii) of the definition of "Restricted
Payment" set forth in this Section 1.1.
"Issuing Lender" means NationsBank.
"Issuing Lender Fees" shall have the meaning assigned to such
term in Section 3.5(c)(ii).
"Joinder Agreement" means a Joinder Agreement substantially in
the form of Exhibit 7.12 hereto, executed and delivered by an
Additional Credit Party in accordance with the provisions of Section
7.12.
14
20
"Lender" means any of the Persons identified as a "Lender" on
the signature pages hereto, and any Person which may become a Lender by
way of assignment in accordance with the terms hereof, together with
their successors and permitted assigns.
"Letter of Credit" means any letter of credit issued by the
Issuing Lender for the account of the Borrower in accordance with the
terms of Section 2.2.
"Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, security interest, encumbrance, lien (statutory or
otherwise), preference, priority or charge of any kind (including any
agreement to give any of the foregoing, any conditional sale or other
title retention agreement, any financing or similar statement or notice
filed under the Uniform Commercial Code as adopted and in effect in the
relevant jurisdiction or other similar recording or notice statute, and
any lease in the nature thereof).
"Loans" shall have the meaning assigned to such term in
Section 2.1(a). and shall include a portion of any Loan bearing
interest at the Adjusted Base Rate or the Adjusted Eurodollar Rate.
"LOC Commitment" means the commitment of the Issuing Lender to
issue Letters of Credit in an aggregate face amount at any time
outstanding (together with the amounts of any unreimbursed drawings
thereon) of up to the Committed Amount.
"LOC Documents" means, with respect to any Letter of Credit,
such Letter of Credit, any amendments thereto, any documents delivered
in connection therewith, any application therefor, and any agreements,
instruments, guarantees or other documents (whether general in
application or applicable only to such Letter of Credit) governing or
providing for (i) the rights and obligations of the parties concerned
or at risk or (ii) any collateral security for such obligations.
"LOC Obligations" means, at any time, the sum of (i) the
maximum amount which is, or at any time thereafter may become,
available to be drawn under Letters of Credit then outstanding,
assuming compliance with all requirements for drawings referred to in
such Letters of Credit plus (ii) the aggregate amount of all drawings
under Letters of Credit honored by the Issuing Lender but not
theretofore reimbursed by the Borrower.
"Management Company" means CGW Southeast Management III,
L.L.C., a Georgia limited liability company.
"Material Adverse Effect" means a material adverse effect on
(i) the condition (financial or otherwise), operations, business,
assets, liabilities or prospects of the Credit Parties taken as a
whole, (ii) the ability of any Credit Party to perform any material
obligation under the Credit Documents to which it is a party or (iii)
the material rights and remedies of the Lenders under the Credit
Documents.
15
21
"Materials of Environmental Concern" means any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products or any hazardous or toxic substances, materials or wastes,
defined or regulated as such in or under any Environmental Laws,
including, without limitation, asbestos, polychlorinated biphenyls and
urea-formaldehyde insulation.
"Maturity Date" means March 31, 2003.
"Moody's" means Moody's Investors Service, Inc., or any
successor or assignee of the business of such company in the business
of rating securities.
"Mortgage Instruments" shall have the meaning assigned such
term in Section 5.1(e).
"Mortgage Policies" shall have the meaning assigned such term
in Section 5.1(e).
"Mortgaged Properties" shall have the meaning assigned such
term in Section 5.1(e).
"Multiemployer Plan" means a Plan which is a multiemployer
plan as defined in Sections 3(37) or 4001(a)(3) of ERISA.
"Multiple Employer Plan" means a Plan which any Credit Party
or any ERISA Affiliate and at least one employer other than the Credit
Parties or any ERISA Affiliate are contributing sponsors.
"NationsBank" means NationsBank, N. A., in its individual
capacity, and its successors.
"Net Cash Proceeds" means the aggregate cash proceeds received
by the Credit Parties in respect of any Asset Disposition or Equity
Issuance, net of (a) direct costs (including, without limitation,
legal, accounting and investment banking fees, brokerage fees and sales
commissions), (b) taxes paid or payable as a result thereof and (c) in
the case of an Asset Disposition, any Indebtedness that is secured by
the asset disposed in such transaction and which is repaid in
connection with such Asset Disposition; it being understood that "Net
Cash Proceeds" shall include, without limitation, any cash received
upon the sale or other disposition of any non-cash consideration
received by the Credit Parties in any Asset Disposition or Equity
Issuance, as applicable.
"Net Leverage Ratio" means, with respect to the Credit Parties
on a consolidated basis for the twelve month period ending on the last
day of any fiscal quarter, the ratio of (a) Funded Indebtedness of the
Credit Parties on a consolidated basis on the last day of such period
minus cash and Cash Equivalents of the Credit Parties on a consolidated
basis on the last day of such period to (b) Consolidated EBITDA for
such period.
16
22
"Non-Recourse Debt" means Indebtedness (i) as to which neither
the Borrower nor any of its Subsidiaries (a) provides credit support of
any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness), (b) is directly or indirectly liable (as a
guarantor or otherwise), or (c) constitutes the lender; and (ii) no
default with respect to which (including any rights that the holders
thereof may have to take enforcement action against a Subsidiary) would
permit (upon notice, lapse of time or both) any holder of any other
Indebtedness of the Borrower or any of its Subsidiaries to declare a
default on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its stated maturity; and (iii) as to
which the lenders have been notified in writing that they will not have
any recourse to the stock or assets of the Borrower or any of its
Subsidiaries.
"Note" or "Notes" means the promissory notes of the Borrower
in favor of each of the Lenders evidencing the Loans provided pursuant
to Section 2.1(e), individually or collectively, as appropriate, as
such promissory notes may be amended, modified, restated, supplemented,
extended, renewed or replaced from time to time.
"Notice of Borrowing" means a written notice of borrowing in
substantially the form of Exhibit 2.1(b)(i), as required by Section
2.1(b)(i).
"Notice of Extension/Conversion" means the written notice of
extension or conversion in substantially the form of Exhibit 3.2, as
required by Section 3.2.
"Operating Lease" means, as applied to any Person, any lease
(including, without limitation, leases which may be terminated by the
lessee at any time) of any Property (whether real, personal or mixed)
which is not a Capital Lease other than any such lease in which that
Person is the lessor.
"Other Taxes" shall have the meaning assigned to such term in
Section 3.11.
"Parent" means the Person identified as such in the heading
hereof, together with any permitted successors and assigns.
"Participation Interest" means a purchase by a Lender of a
participation in Letters of Credit or LOC Obligations as provided in
Section 2.2 or in any Loans as provided in Section 3.14.
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA and any
successor thereof.
"Permitted Business" means any business that manufactures
and/or sells silicon metal or microsilica, or any business that is
reasonably similar thereto or a reasonable extension, development or
expansion thereof or ancillary thereto.
17
23
"Permitted Investments" means Investments which are either (i)
cash and Cash Equivalents, (ii) accounts receivable created, acquired
or made by any Credit Party in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms,
(iii) Investments consisting of Capital Stock, obligations, securities
or other property received by any Credit Party in settlement of
accounts receivable (created in the ordinary course of business) from
bankrupt obligors, (iv) Investments existing as of the Closing Date and
set forth in Schedule 1.1A, (v) Guaranty Obligations permitted by
Section 8.1, (vi) transactions permitted by Section 8.9, (vii) advances
or loans to directors, officers, employees, agents, customers or
suppliers that do not exceed $500,000 in the aggregate at any one time
outstanding for all of the Credit Parties, (viii) Investments in any
Credit Party other than the Parent, (ix) advances, loans or other
extensions of credit described in clause (b) of the definition of
"Exempt Affiliate Transactions" set forth in this Section 1.1, (x) any
Investment paid for solely with the Capital Stock of the Parent, (xi)
any other Investment by any Credit Party made solely with proceeds of
capital contributions in the Parent or with the Net Cash Proceeds of an
Equity Issuance by the Parent and (xii) other Investments having an
aggregate fair market value (measured on the date any such Investment
is made and without giving effect to subsequent changes in value) that,
when taken together with all other Investments made pursuant to this
clause (xii) that at the time outstanding, not to exceed $5,000,000.
"Permitted Liens" means:
(i) Liens in favor of the Agent to secure the Credit Party
Obligations;
(ii) Liens (other than Liens created or imposed under ERISA)
for taxes, assessments or governmental charges or levies not yet due or
Liens for taxes being contested in good faith by appropriate
proceedings for which adequate reserves determined in accordance with
GAAP have been established (and as to which the Property subject to any
such Lien is not yet subject to foreclosure, sale or loss on account
thereof);
(iii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and suppliers and other Liens
imposed by law or pursuant to customary reservations or retentions of
title arising in the ordinary course of business, provided that such
Liens secure only amounts not yet due and payable or, if due and
payable, are unfiled and no other action has been taken to enforce the
same or are being contested in good faith by appropriate proceedings
for which adequate reserves determined in accordance with GAAP have
been established (and as to which the Property subject to any such Lien
is not yet subject to foreclosure, sale or loss on account thereof);
(iv) Liens (other than Liens created or imposed under ERISA)
incurred or deposits made by any Credit Party in the ordinary course of
business in connection with workers' compensation, unemployment
insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, bids, leases, government
contracts, performance and return-of-money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed
money);
18
24
(v) Liens in connection with attachments or judgments
(including judgment or appeal bonds) provided that the judgments
secured shall, within 30 days after the entry thereof, have been
discharged or execution thereof stayed pending appeal, or shall have
been discharged within 30 days after the expiration of any such stay;
(vi) easements, rights-of-way, restrictions (including zoning
restrictions), minor defects or irregularities in title and other
similar charges or encumbrances not, in any material respect, impairing
the use of the encumbered Property for its intended purposes;
(vii) Liens on Property securing purchase money Indebtedness
(including Capital Leases and Synthetic Leases) to the extent permitted
under Section 8.1(c), provided that any such Lien attaches to such
Property concurrently with or within 90 days after the acquisition
thereof;
(viii) leases or subleases granted to others not interfering
in any material respect with the business of any Credit Party;
(ix) any interest of title of a lessor under, and Liens
arising from UCC financing statements (or equivalent filings,
registrations or agreements in foreign jurisdictions) relating to,
leases permitted by this Credit Agreement;
(x) Liens deemed to exist in connection with Investments in
repurchase agreements permitted under Section 8.6;
(xi) normal and customary rights of setoff upon deposits of
cash in favor of banks or other depository institutions;
(xii) Liens securing Indebtedness not to exceed $1,000,000 in
an aggregate principal amount outstanding at any time; and
(xiii) Liens existing as of the Closing Date and set forth on
Schedule 1.1B; provided that (a) no such Lien shall at any time be
extended to or cover any Property other than the Property subject
thereto on the Closing Date and (b) the principal amount of the
Indebtedness secured by such Liens shall not be extended, renewed,
refunded or refinanced.
"Permitted Refinancing Indebtedness" means any Indebtedness of
the Borrower or any of its Subsidiaries issued in exchange for, or the
net proceeds of which are used to extend, refinance, renew, replace,
defease or refund other Indebtedness of the Borrower or any of its
Subsidiaries (other than intercompany Indebtedness); provided that: (i)
the principal amount (or accreted value, if applicable) of such
Permitted Refinancing Indebtedness does not exceed the principal amount
of (or accreted value, if applicable), plus accrued interest on, the
Indebtedness so extended, refinanced, renewed, replaced, defeased or
refunded (plus the amount of reasonable expenses incurred in connection
19
25
therewith); (ii) such Permitted Refinancing Indebtedness has a final
maturity date later than the final maturity date of, and has a Weighted
Average Life to Maturity equal to or greater than the Weighted Average
Life to Maturity of, the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded; (iii) if the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded is
subordinated in right of payment to the Senior Notes, such Permitted
Refinancing Indebtedness has a final maturity date later than the final
maturity date of, and is subordinated in right of payment to, the
Credit Party Obligations on terms at least as favorable to the Lenders
as those contained in the documentation governing the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded;
and (iv) such Indebtedness is incurred either by the Borrower or by the
Subsidiary who is the obligor on the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded.
"Person" means any individual, partnership, joint venture,
firm, corporation, limited liability company, association, trust or
other enterprise (whether or not incorporated) or any Governmental
Authority.
"Plan" means any employee benefit plan (as defined in Section
3(3) of ERISA) which is covered by ERISA and with respect to which any
Credit Party or any ERISA Affiliate is (or, if such plan were
terminated at such time, would under Section 4069 of ERISA be deemed to
be) an "employer" within the meaning of Section 3(5) of ERISA.
"Pledge Agreement" means the pledge agreement dated as of the
Closing Date in the form of Exhibit 1.1A to be executed in favor of the
Agent by each of the Credit Parties, as amended, modified, restated or
supplemented from time to time.
"Prime Rate" means the per annum rate of interest established
from time to time by NationsBank as its prime rate, which rate may not
be the lowest rate of interest charged by NationsBank to its customers.
"Principal Office" means the principal office of NationsBank,
presently located at Charlotte, North Carolina.
"Property" means any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
"Purchase Agreement" means (i) the Stock Purchase Agreement by
and among Simcala, Inc., a Delaware corporation, the individuals and
entities listed under the heading "Sellers" on the signature pages
thereto, as sellers, and SAC Acquisition Corp., a Georgia corporation,
as buyer, dated as of February 10, 1998, as it may be amended on or
prior to the Closing Date, and (ii) the Escrow Agreement by and among
SAC Acquisition Corp., a Georgia corporation, as buyer, the individuals
and entities listed under the heading "Sellers" on the signature pages
thereto, as sellers, and SunTrust Bank, Atlanta, a Georgia banking
corporation, dated as of March 31, 1998, as it may be amended on or
prior to the Closing Date.
20
26
"Register" shall have the meaning given such term in Section
11.3(c).
"Regulation G, T, U, or X" means Regulation G, T, U or X,
respectively, of the Board of Governors of the Federal Reserve System
as from time to time in effect and any successor to all or a portion
thereof.
"Release" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping
or disposing into the environment (including the abandonment or
discarding of barrels, containers and other closed receptacles) of any
Materials of Environmental Concern.
"Reportable Event" means any of the events set forth in
Section 4043(c) of ERISA, other than those events as to which the
notice requirement has been waived by regulation.
"Required Financial Information" means, with respect to the
applicable Calculation Date, (i) the financial statements of the Credit
Parties required to be delivered pursuant to Section 7.1(a) or (b) for
the fiscal period or quarter ending as of such Calculation Date, and
(ii) the certificate of an Executive Officer of the Borrower required
by Section 7.1(c) to be delivered with the financial statements
described in clause (i) above.
"Required Lenders" means, at any time, Lenders (which are not
at such time Defaulting Lenders (as determined by the Agent)) and
holding in the aggregate at least 51% (if, at such time, there are more
than two Lenders hereunder) or 66 2/3% (if, at such time, there are two
Lenders only) of (i) the Commitments (and Participation Interests
therein) or (ii) if the Commitments have been terminated, the
outstanding Loans and Participation Interests (including the
Participation Interests of the Issuing Lender in any Letters of
Credit).
"Requirement of Law" means, as to any Person, the certificate
of incorporation and by-laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
final, non-appealable determination of an arbitrator or a court or
other Governmental Authority, in each case applicable to or binding
upon such Person or to which any of its material property is subject.
"Restricted Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class
of Capital Stock of any Credit Party, now or hereafter outstanding,
(ii) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any
shares of any class of Capital Stock of any Credit Party, now or
hereafter outstanding, (iii) any payment made to retire, or to obtain
the surrender of, any outstanding warrants, options or other rights to
acquire shares of any class of Capital Stock of any Credit Party, now
or hereafter outstanding and (iv) any loan, advance or other
distribution to the Parent.
21
27
"Revolving Commitment" means, with respect to each Lender, the
commitment of such Lender in an aggregate principal amount at any time
outstanding of up to such Lender's Commitment Percentage of the
Committed Amount, (i) to make Loans in accordance with the provisions
of Section 2.1(a) and (ii) to purchase Participation Interests in
Letters of Credit in accordance with the provisions of Section 2.2(c).
"S&P" means Standard & Poor's Ratings Group, a division of
McGraw Hill, Inc., or any successor or assignee of the business of such
division in the business of rating securities.
"Sale and Leaseback Transaction" means any direct or indirect
arrangement with any Person or to which any such Person is a party,
providing for the leasing to any Credit Party of any Property, whether
owned by such Credit Party as of the Closing Date or later acquired,
which has been or is to be sold or transferred by such Credit Party to
such Person or to any other Person from whom funds have been, or are to
be, advanced by such Person on the security of such Property.
"Security Agreement" means the security agreement dated as of
the Closing Date in the form of Exhibit 1.1B to be executed in favor of
the Agent by each of the Credit Parties, as amended, modified, restated
or supplemented from time to time.
"Senior Note" means any one of the __% Senior Notes due 2006,
issued by the Borrower pursuant to the Senior Note Agreement, as such
Senior Notes may be amended, modified, restated or supplemented and in
effect from time to time.
"Senior Note Agreement" means the Indenture, dated as of the
Closing Date, by and between the Borrower and IBJ Schroeder Bank &
Trust Company, as trustee for the Senior Noteholders, as the same may
be amended, modified, restated or supplemented and in effect from time
to time.
"Senior Noteholder" means any one of the holders from time to
time of the Senior Notes.
"Single Employer Plan" means any Plan which is covered by
Title IV of ERISA, but which is not a Multiemployer Plan or a Multiple
Employer Plan.
"Solvent" or "Solvency" means, with respect to any Person as
of a particular date, that on such date (i) such Person is able to
realize upon its assets and pay its debts and other liabilities,
contingent obligations and other commitments as they mature in the
normal course of business, (ii) such Person does not intend to, and
does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature in their
ordinary course, (iii) such Person is not engaged in a business or a
transaction, and is not about to engage in a business or a transaction,
for which such Person's Property would constitute unreasonably small
capital after giving due consideration to the prevailing practice in
the industry in which such Person is engaged or
22
28
is to engage, (iv) the fair value of the Property of such Person is
greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person and (v) the present
fair salable value of the assets of such Person is not less than the
amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured. In computing
the amount of contingent liabilities at any time, it is intended that
such liabilities will be computed at the amount which, in light of all
the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured
liability.
"Standby Letter of Credit Fee" shall have the meaning assigned
to such term in Section 3.5(c)(i).
"Subsidiary" means, as to any Person at any time, (a) any
corporation more than 50% of whose Capital Stock of any class or
classes having by the terms thereof ordinary voting power to elect a
majority of the directors of such corporation (irrespective of whether
or not at such time, any class or classes of such corporation shall
have or might have voting power by reason of the happening of any
contingency) is at such time owned by such Person directly or
indirectly through Subsidiaries, and (b) any partnership, association,
joint venture or other entity of which such Person directly or
indirectly through Subsidiaries owns at such time more than 50% of the
Capital Stock.
"Subsidiary Guarantor" means each of the Persons identified as
a "Subsidiary Guarantor" on the signature pages hereto and each
Additional Credit Party which may hereafter execute a Joinder
Agreement, together with their successors and permitted assigns, and
"Subsidiary Guarantor" means any one of them
"Synthetic Lease" means any synthetic lease, tax retention
operating lease, off-balance sheet loan or similar off-balance sheet
financing product where such transaction is considered borrowed money
indebtedness for tax purposes but is classified as an Operating Lease.
"Taxes" shall have the meaning assigned to such term in
Section 3.11.
"Total Leverage Ratio" means, with respect to the Credit
Parties on a consolidated basis for the twelve month period ending on
the last day of any fiscal quarter, the ratio of (a) Funded
Indebtedness of the Credit Parties on a consolidated basis on the last
day of such period to (b) Consolidated EBITDA for such period.
"Trade Letter of Credit Fee" shall have the meaning assigned
to such term in Section 3.5(c)(ii).
"Unused Fee" shall have the meaning assigned to such term in
Section 3.5(b).
"Unused Fee Calculation Period" shall have the meaning
assigned to such term in Section 3.5(b).
"Unused Committed Amount" means, for any period, the amount by
which (a) the then applicable Committed Amount exceeds (b) the daily
average sum for such period of (i) the outstanding aggregate principal
amount of all Loans plus (ii) the outstanding aggregate principal
amount of all LOC Obligations.
"Upfront Fee" shall have the meaning assigned to such term in
Section 3.5(a).
23
29
"Voting Stock" means, with respect to any Person, Capital
Stock issued by such Person the holders of which are ordinarily, in the
absence of contingencies, entitled to vote for the election of
directors (or persons performing similar functions) of such Person,
even though the right so to vote has been suspended by the happening of
such a contingency.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i)
the sum of the products obtained by multiplying (a) the amount of each
then remaining installment, sinking fund, serial maturity or other
required payments of principal, including payment at final maturity, in
respect thereof , by (b) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making of such
payment, by (ii) the then outstanding principal amount of such
Indebtedness.
"Wholly Owned Subsidiary" of any Person means any Subsidiary
100% of whose Voting Stock is at the time owned by such Person directly
or indirectly through other Wholly Owned Subsidiaries.
1.2 COMPUTATION OF TIME PERIODS.
For purposes of computation of periods of time hereunder, the word
"from" means "from and including" and the words "to" and "until" each mean "to
but excluding."
1.3 ACCOUNTING TERMS.
Except as otherwise expressly provided herein, all accounting terms
used herein shall be interpreted, and all financial statements and certificates
and reports as to financial matters required to be delivered to the Lenders
hereunder shall be prepared, in accordance with GAAP applied on a consistent
basis. All calculations made for the purposes of determining compliance with
this Credit Agreement shall (except as otherwise expressly provided herein) be
made by application of GAAP applied on a basis consistent with the most recent
annual or quarterly financial statements delivered pursuant to Section 7.1 (or,
prior to the delivery of the first financial statements pursuant to Section 7.1,
consistent with the financial statements as at December 31, 1997); provided,
however, if (a) the Borrower shall object to determining such compliance on such
basis at the time of delivery of such financial statements due to any change in
GAAP or the rules promulgated with respect thereto or (b) the Agent or the
Required Lenders shall so object in writing within 60 days after delivery of
such financial statements, then such calculations shall be
24
30
made on a basis consistent with the most recent financial statements delivered
by the Borrower to the Lenders as to which no such objection shall have been
made.
Notwithstanding the above, the parties hereto acknowledge and agree that, for
purposes of all calculations made in determining compliance with the financial
covenants set forth in Section 7.11 (including without limitation for purposes
of the definition of "Applicable Percentage" set forth in Section 1.1), (i)(A)
income statement items (whether positive or negative) attributable to the
Property disposed of in any Asset Disposition as contemplated by Section 8.5, as
applicable, shall be excluded to the extent relating to any period occurring
prior to the date of such transaction and (B) Indebtedness which is retired in
connection with any such Asset Disposition shall be excluded and deemed to have
been retired as of the first day of the applicable period and (ii) income
statement items (whether positive or negative) attributable to any Property
acquired in any Investment transaction permitted by Section 8.6 shall be
included to the extent relating to any period applicable in such calculations
occurring after the date of such transaction (and, notwithstanding the
foregoing, during the first four fiscal quarters prior to the date of such
transaction, shall be included on a pro forma basis).
SECTION 2
CREDIT FACILITIES
2.1 LOANS.
(a) Revolving Commitment. Subject to the terms and conditions
hereof and in reliance upon the representations and warranties set
forth herein, each Lender severally agrees to make available to the
Borrower such Lender's Commitment Percentage of revolving credit loans
requested by the Borrower in Dollars ("Loans") from time to time from
the Closing Date until the Maturity Date, or such earlier date as the
Revolving Commitments shall have been terminated as provided herein for
the purposes hereinafter set forth; provided, however, that the sum of
the aggregate principal amount of outstanding Loans shall not exceed
FIFTEEN MILLION DOLLARS ($15,000,000) (as such aggregate maximum amount
may be reduced from time to time as provided in Section 3.4, the
"Committed Amount"); provided, further, (A) with regard to each Lender
individually, such Lender's outstanding Loans shall not exceed such
Lender's Commitment Percentage of the Committed Amount, and (B) the
aggregate principal amount of outstanding Loans plus LOC Obligations
outstanding shall not exceed the Committed Amount. Loans may consist of
Base Rate Loans or Eurodollar Loans, or a combination thereof, as the
Borrower may request; provided, however, that no more than 5 Eurodollar
Loans shall be outstanding hereunder at any time. For purposes hereof,
Eurodollar Loans with different Interest Periods shall be considered as
separate Eurodollar Loans, even if they begin on the same date,
although borrowings, extensions and conversions may, in accordance with
the provisions hereof, be combined at the end of existing Interest
Periods to constitute a new Eurodollar Loan with a single Interest
Period. Loans hereunder may be repaid and reborrowed in accordance with
the provisions hereof.
25
31
(b) Loan Borrowings.
(i) Notice of Borrowing. The Borrower shall request a
Loan borrowing by written notice (or telephonic notice
promptly confirmed in writing) to the Agent not later than
1:00 P.M. (Charlotte, North Carolina time) on the Business Day
prior to the date of the requested borrowing in the case of
Base Rate Loans, and on the third Business Day prior to the
date of the requested borrowing in the case of Eurodollar
Loans. Each such request for borrowing shall be irrevocable
and shall specify (A) that a Loan is requested, (B) the date
of the requested borrowing (which shall be a Business Day),
(C) the aggregate principal amount to be borrowed, and (D)
whether the borrowing shall be comprised of Base Rate Loans,
Eurodollar Loans or a combination thereof, and if Eurodollar
Loans are requested, the Interest Period(s) therefor. If the
Borrower shall fail to specify in any such Notice of Borrowing
(I) an applicable Interest Period in the case of a Eurodollar
Loan, then such notice shall be deemed to be a request for an
Interest Period of one month, or (II) the type of Loan
requested, then such notice shall be deemed to be a request
for a Base Rate Loan hereunder. The Agent shall give notice to
each affected Lender promptly upon receipt of each Notice of
Borrowing pursuant to this Section 2.1(b)(i), the contents
thereof and each such Lender's share of any borrowing to be
made pursuant thereto.
(ii) Minimum Amounts. Each Eurodollar Loan or Base
Rate Loan that is a Loan shall be in a minimum aggregate
principal amount of $100,000 and integral multiples of $50,000
in excess thereof (or the remaining amount of the Committed
Amount, if less).
(iii) Advances. Each Lender will make its Commitment
Percentage of each Loan borrowing available to the Agent for
the account of the Borrower as specified in Section 3.15(a),
or in such other manner as the Agent may specify in writing,
by 2:00 P.M. (Charlotte, North Carolina time) on the date
specified in the applicable Notice of Borrowing in Dollars and
in funds immediately available to the Agent. Such borrowing
will then be made available to the Borrower by the Agent by
crediting the account of the Borrower on the books of such
office with the aggregate of the amounts made available to the
Agent by the Lenders and in like funds as received by the
Agent.
(c) Repayment. The principal amount of all Loans shall be due
and payable in full on the Maturity Date, unless accelerated sooner
pursuant to Section 9.2.
(d) Interest. Subject to the provisions of Section 3.1,
(i) Base Rate Loans. During such periods as Loans
shall be comprised in whole or in part of Base Rate Loans,
such Base Rate Loans shall bear interest at a per annum rate
equal to the Adjusted Base Rate.
26
32
(ii) Eurodollar Loans. During such periods as Loans
shall be comprised in whole or in part of Eurodollar Loans,
such Eurodollar Loans shall bear interest at a per annum rate
equal to the Adjusted Eurodollar Rate.
Interest on Loans shall be payable in arrears on each applicable
Interest Payment Date (or at such other times as may be specified
herein).
(e) Notes. The Loans made by each Lender shall be evidenced by
a duly executed promissory note of the Borrower to such Lender in an
original principal amount equal to such Lender's Commitment Percentage
of the Committed Amount and in substantially the form of Exhibit
2.1(e).
2.2 LETTER OF CREDIT SUBFACILITY.
(a) Issuance. Subject to the terms and conditions hereof and
of the LOC Documents, if any, and any other terms and conditions which
the Issuing Lender may reasonably require and in reliance upon the
representations and warranties set forth herein, the Issuing Lender
agrees to issue, and each Lender severally agrees to participate in the
issuance by the Issuing Lender of, standby and trade Letters of Credit
in Dollars from time to time from the Closing Date until the date five
(5) Business Days prior to the Maturity Date as the Borrower may
request, in a form acceptable to the Issuing Lender; provided, however,
that (i) the LOC Obligations outstanding shall not at any time exceed
the Committed Amount and (ii) the sum of the aggregate principal amount
of outstanding Loans plus LOC Obligations outstanding shall not at any
time exceed the Committed Amount. No Letter of Credit shall (x) have an
original expiry date more than one year (or, in the case of any Letter
of Credit issued to support reimbursement obligations arising in
connection with industrial development bonds, thirteen months) from the
date of issuance or (y) as originally issued or as extended, have an
expiry date extending beyond the Maturity Date. Each Letter of Credit
shall comply with the related LOC Documents. The issuance and expiry
dates of each Letter of Credit shall be a Business Day.
(b) Notice and Reports. The request for the issuance of a
Letter of Credit shall be submitted by the Borrower to the Issuing
Lender at least three (3) Business Days prior to the requested date of
issuance. The Issuing Lender will, at least quarterly and more
frequently upon request, disseminate to each of the Lenders a detailed
report specifying the Letters of Credit which are then issued and
outstanding and any activity with respect thereto which may have
occurred since the date of the prior report, and including therein,
among other things, the beneficiary, the face amount and the expiry
date, as well as any payment or expirations which may have occurred.
(c) Participation. Each Lender, upon issuance of a Letter of
Credit, shall be deemed to have purchased without recourse a
Participation Interest from the Issuing Lender in such Letter of Credit
and the obligations arising thereunder and any collateral relating
thereto, in each case in an amount equal to its pro rata share of the
obligations
27
33
under such Letter of Credit (based on the respective Commitment
Percentages of the Lenders) and shall absolutely, unconditionally and
irrevocably assume and be obligated to pay to the Issuing Lender and
discharge when due, its pro rata share of the obligations arising under
such Letter of Credit. Without limiting the scope and nature of each
Lender's Participation Interest in any Letter of Credit, to the extent
that the Issuing Lender has not been reimbursed as required hereunder
or under any such Letter of Credit, each such Lender shall pay to the
Issuing Lender its pro rata share of such unreimbursed drawing in same
day funds on the day of notification by the Issuing Lender of an
unreimbursed drawing pursuant to the provisions of subsection (d)
below. The obligation of each Lender to so reimburse the Issuing Lender
shall be absolute and unconditional and shall not be affected by the
occurrence of a Default, an Event of Default or any other occurrence or
event. Any such reimbursement shall not relieve or otherwise impair the
obligation of the Borrower to reimburse the Issuing Lender under any
Letter of Credit, together with interest as hereinafter provided.
(d) Reimbursement. In the event of any drawing under any
Letter of Credit, the Issuing Lender will promptly notify the Borrower.
Unless the Borrower shall immediately notify the Issuing Lender that
the Borrower intends to otherwise reimburse the Issuing Lender for such
drawing, the Borrower shall be deemed to have requested that the
Lenders make a Loan in the amount of the drawing as provided in
subsection (e) below on the related Letter of Credit, the proceeds of
which will be used to satisfy the related reimbursement obligations.
The Borrower promises to reimburse the Issuing Lender on the day of
drawing under any Letter of Credit (either with the proceeds of a Loan
obtained hereunder or otherwise) in same day funds. If the Borrower
shall fail to reimburse the Issuing Lender as provided hereinabove, the
unreimbursed amount of such drawing shall bear interest at a per annum
rate equal to the Adjusted Base Rate plus 2%. The Borrower's
reimbursement obligations hereunder shall, subject to gross negligence
or willful misconduct on the part of the Issuing Lender, be absolute
and unconditional under all circumstances irrespective of any rights of
setoff, counterclaim or defense to payment the Borrower may claim or
have against the Issuing Lender, the Agent, the Lenders, the
beneficiary of the Letter of Credit drawn upon or any other Person,
including without limitation any defense based on any failure of the
Borrower or any other Credit Party to receive consideration or the
legality, validity, regularity or unenforceability of the Letter of
Credit. The Issuing Lender will promptly notify the other Lenders of
the amount of any unreimbursed drawing and each Lender shall promptly
pay to the Agent for the account of the Issuing Lender in Dollars and
in immediately available funds, the amount of such Lender's pro rata
share of such unreimbursed drawing. Such payment shall be made on the
day such notice is received by such Lender from the Issuing Lender if
such notice is received at or before 2:00 P.M. (Charlotte, North
Carolina time) otherwise such payment shall be made at or before 12:00
Noon (Charlotte, North Carolina time) on the Business Day next
succeeding the day such notice is received. If such Lender does not pay
such amount to the Issuing Lender in full upon such request, such
Lender shall, on demand, pay to the Agent for the account of the
Issuing Lender interest on the unpaid amount during the period from the
date of such drawing until such Lender pays such amount to the Issuing
Lender in full at a rate per annum equal to, if paid within two (2)
Business Days of
28
34
the date that such Lender is required to make payments of such amount
pursuant to the preceding sentence, the Federal Funds Rate and
thereafter at a rate equal to the Base Rate. Each Lender's obligation
to make such payment to the Issuing Lender, and the right of the
Issuing Lender to receive the same, shall be absolute and
unconditional, shall not be affected by any circumstance whatsoever and
without regard to the termination of this Credit Agreement or the
Commitments hereunder, the existence of a Default or Event of Default
or the acceleration of the obligations of the Borrower hereunder and
shall be made without any offset, abatement, withholding or reduction
whatsoever. Simultaneously with the making of each such payment by a
Lender to the Issuing Lender, such Lender shall, automatically and
without any further action on the part of the Issuing Lender or such
Lender, acquire a Participation Interest in an amount equal to such
payment (excluding the portion of such payment constituting interest
owing to the Issuing Lender) in the related unreimbursed drawing
portion of the LOC Obligation and in the interest thereon and in the
related LOC Documents, and shall have a claim against the Borrower with
respect thereto.
(e) Repayment with Loans. On any day on which the Borrower
shall have requested, or been deemed to have requested, a Loan advance
to reimburse a drawing under a Letter of Credit, the Agent shall give
notice to the Lenders that a Loan has been requested or deemed
requested by the Borrower to be made in connection with a drawing under
a Letter of Credit, in which case a Loan advance comprised of Base Rate
Loans (or Eurodollar Loans to the extent the Borrower has complied with
the procedures of Section 2.1(b)(i) with respect thereto) shall be
immediately made to the Borrower by all Lenders (notwithstanding any
termination of the Commitments pursuant to Section 9.2) pro rata based
on the respective Commitment Percentages of the Lenders (determined
before giving effect to any termination of the Commitments pursuant to
Section 9.2) and the proceeds thereof shall be paid directly to the
Issuing Lender for application to the respective LOC Obligations. Each
such Lender hereby irrevocably agrees to make its pro rata share of
each such Loan immediately upon any such request or deemed request in
the amount, in the manner and on the date specified in the preceding
sentence notwithstanding (i) the amount of such borrowing may not
comply with the minimum amount for advances of Loans otherwise required
hereunder, (ii) whether any conditions specified in Section 5.2 are
then satisfied, (iii) whether a Default or an Event of Default then
exists, (iv) failure for any such request or deemed request for Loan to
be made by the time otherwise required hereunder, (v) whether the date
of such borrowing is a date on which Loans are otherwise permitted to
be made hereunder or (vi) any termination of the Commitments relating
thereto immediately prior to or contemporaneously with such borrowing.
In the event that any Loan cannot for any reason be made on the date
otherwise required above (including, without limitation, as a result of
the commencement of a proceeding under the Bankruptcy Code with respect
to the Borrower or any Credit Party), then each such Lender hereby
agrees that it shall forthwith purchase (as of the date such borrowing
would otherwise have occurred, but adjusted for any payments received
from the Borrower on or after such date and prior to such purchase)
from the Issuing Lender such Participation Interests in the outstanding
LOC Obligations as shall be necessary to cause each such Lender to
share in such LOC Obligations ratably (based upon the respective
Commitment Percentages of the Lenders (determined before giving effect
to any termination of the
29
35
Commitments pursuant to Section 9.2)), provided that at the time any
purchase of Participation Interests pursuant to this sentence is
actually made, the purchasing Lender shall be required to pay to the
Issuing Lender, to the extent not paid to the Issuer by the Borrower in
accordance with the terms of subsection (d) above, interest on the
principal amount of Participation Interests purchased for each day from
and including the day upon which such borrowing would otherwise have
occurred to but excluding the date of payment for such Participation
Interests, at the rate equal to, if paid within two (2) Business Days
of the date of the Loan advance, the Federal Funds Rate, and thereafter
at a rate equal to the Base Rate.
(f) Designation of Credit Parties as Account Parties.
Notwithstanding anything to the contrary set forth in this Credit
Agreement, including without limitation Section 2.2(a), a Letter of
Credit issued hereunder may contain a statement to the effect that such
Letter of Credit is issued for the account of a Credit Party other than
the Borrower or the Parent, provided that notwithstanding such
statement, the Borrower shall be the actual account party for all
purposes of this Credit Agreement for such Letter of Credit and such
statement shall not affect the Borrower's reimbursement obligations
hereunder with respect to such Letter of Credit.
(g) Renewal, Extension. The renewal or extension of any Letter
of Credit shall, for purposes hereof, be treated in all respects the
same as the issuance of a new Letter of Credit hereunder.
(h) Uniform Customs and Practices. The Issuing Lender may have
the Letters of Credit be subject to The Uniform Customs and Practice
for Documentary Credits, as published as of the date of issue by the
International Chamber of Commerce (the "UCP"), in which case the UCP
may be incorporated therein and deemed in all respects to be a part
thereof.
(i) Indemnification; Nature of Issuing Lender's Duties.
(i) In addition to its other obligations under this
Section 2.2, the Borrower hereby agrees to pay, and protect,
indemnify and save each Lender harmless from and against, any
and all claims, demands, liabilities, damages, losses, costs,
charges and expenses (including reasonable attorneys' fees)
that such Lender may actually incur or be subject to as a
consequence, direct or indirect, of (A) the issuance of any
Letter of Credit or (B) the failure of such Lender to honor a
drawing under a Letter of Credit as a result of any act or
omission, whether rightful or wrongful, of any present or
future de jure or de facto government or Governmental
Authority (all such acts or omissions, herein called
"Government Acts").
(ii) As between the Borrower and the Lenders
(including the Issuing
30
36
Lender), the Borrower shall assume all risks of the acts,
omissions or misuse of any Letter of Credit by the beneficiary
thereof. No Lender (including the Issuing Lender) shall,
absent gross negligence or willful misconduct on the part of
such Lender, be responsible: (A) for the form, validity,
sufficiency, accuracy, genuineness or legal effect of any
document submitted by any party in connection with the
application for and issuance of any Letter of Credit, even if
it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (B) for the
validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign any Letter of
Credit or the rights or benefits thereunder or proceeds
thereof, in whole or in part, that may prove to be invalid or
ineffective for any reason; (C) for errors, omissions,
interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise,
whether or not they be in cipher; (D) for any loss or delay in
the transmission or otherwise of any document required in
order to make a drawing under a Letter of Credit or of the
proceeds thereof; and (E) for any consequences arising from
causes beyond the control of such Lender, including, without
limitation, any Government Acts. None of the above shall
affect, impair, or prevent the vesting of the Issuing Lender's
rights or powers hereunder.
(iii) In furtherance and extension and not in
limitation of the specific provisions hereinabove set forth,
any action taken or omitted by any Lender (including the
Issuing Lender), under or in connection with any Letter of
Credit or the related certificates, if taken or omitted in
good faith and absent gross negligence or willful misconduct
on the part of such Lender, shall not put such Lender under
any resulting liability to the Borrower or any other Credit
Party. It is the intention of the parties that this Credit
Agreement shall be construed and applied to protect and
indemnify each Lender (including the Issuing Lender) against
any and all risks involved in the issuance of the Letters of
Credit, all of which risks are hereby assumed by the Borrower
(on behalf of itself and each of the other Credit Parties),
including, without limitation, any and all Government Acts. No
Lender (including the Issuing Lender) shall, in any way, be
liable for any failure by such Lender or anyone else to pay
any drawing under any Letter of Credit as a result of any
Government Acts or any other cause beyond the control of such
Lender.
(iv) Nothing in this subsection (i) is intended to
limit the reimbursement obligations of the Borrower contained
in subsection (d) above. The obligations of the Borrower under
this subsection (i) shall survive the termination of this
Credit Agreement. No act or omission of any current or prior
beneficiary of a Letter of Credit shall in any way affect or
impair the rights of the Lenders (including the Issuing
Lender) to enforce any right, power or benefit under this
Credit Agreement.
(v) Notwithstanding anything to the contrary
contained in this subsection (i), the Borrower shall have no
obligation to indemnify any Lender (including the Issuing
Lender) in respect of any liability incurred by such Lender
(A) arising solely out of the gross negligence or willful
misconduct of such Lender,
31
37
as determined by a court of competent jurisdiction, or (B)
caused by such Lender's failure to pay under any Letter of
Credit after presentation to it of a request strictly
complying with the terms and conditions of such Letter of
Credit, as determined by a court of competent jurisdiction,
unless such payment is prohibited by any law, regulation,
court order or decree.
(j) Responsibility of Issuing Lender. It is expressly
understood and agreed that the obligations of the Issuing Lender
hereunder to the Lenders are only those expressly set forth in this
Credit Agreement and that the Issuing Lender shall be entitled to
assume that the conditions precedent set forth in Section 5.2 have been
satisfied unless it shall have acquired actual knowledge that any such
condition precedent has not been satisfied; provided, however, that
nothing set forth in this Section 2.2 shall be deemed to prejudice the
right of any Lender to recover from the Issuing Lender any amounts made
available by such Lender to the Issuing Lender pursuant to this Section
2.2 in the event that it is determined by a court of competent
jurisdiction that the payment with respect to a Letter of Credit
constituted gross negligence or willful misconduct on the part of the
Issuing Lender.
(k) Conflict with LOC Documents. In the event of any conflict
between this Credit Agreement and any LOC Document (including any
letter of credit application), this Credit Agreement shall control.
SECTION 3
OTHER PROVISIONS RELATING TO CREDIT FACILITIES
3.1 DEFAULT RATE.
Upon the occurrence, and during the continuance, of an Event of
Default, the principal of and, to the extent permitted by law, interest on the
Loans and any other amounts owing hereunder or under the other Credit Documents
shall bear interest, payable on demand, at a per annum rate 2% greater than the
rate which would otherwise be applicable (or if no rate is applicable, whether
in respect of interest, fees or other amounts, then the Adjusted Base Rate plus
2%).
3.2 EXTENSION AND CONVERSION.
Subject to the terms of Section 5.2, the Borrower shall have the
option, on any Business Day, to extend existing Loans into a subsequent
permissible Interest Period or to convert Loans into Loans of another interest
rate type; provided, however, that (i) except as provided in Section 3.8,
Eurodollar Loans may be converted into Base Rate Loans only on the last day of
the Interest Period applicable thereto, (ii) Eurodollar Loans may be extended,
and Base Rate Loans may be converted into Eurodollar Loans, only if no Default
or Event of Default is in existence on the date of extension or conversion,
(iii) Loans extended as, or converted into, Eurodollar Loans shall be subject to
the terms of the definition of "Interest Period" set forth in Section 1.1 and
shall be in
32
38
such minimum amounts as provided in Section 2.1(b)(ii), (iv) no more than 5
Eurodollar Loans shall be outstanding hereunder at any time (it being understood
that, for purposes hereof, Eurodollar Loans with different Interest Periods
shall be considered as separate Eurodollar Loans, even if they begin on the same
date, although borrowings, extensions and conversions may, in accordance with
the provisions hereof, be combined at the end of existing Interest Periods to
constitute a new Eurodollar Loan with a single Interest Period) and (v) any
request for extension or conversion of a Eurodollar Loan which shall fail to
specify an Interest Period shall be deemed to be a request for an Interest
Period of one month. Each such extension or conversion shall be effected by the
Borrower by giving a Notice of Extension/Conversion (or telephonic notice
promptly confirmed in writing) to the office of the Agent specified in Schedule
2.1(a), or at such other office as the Agent may designate in writing, prior to
1:00 P.M. (Charlotte, North Carolina time) on the Business Day of, in the case
of the conversion of a Eurodollar Loan into a Base Rate Loan, and on the third
Business Day prior to, in the case of the extension of a Eurodollar Loan as, or
conversion of a Base Rate Loan into, a Eurodollar Loan, the date of the proposed
extension or conversion, specifying the date of the proposed extension or
conversion, the Loans to be so extended or converted, the types of Loans into
which such Loans are to be converted and, if appropriate, the applicable
Interest Periods with respect thereto. Each request for extension or conversion
shall be irrevocable and shall constitute a representation and warranty by the
Borrower of the matters specified in subsections (b), (c), (d), (e) and (f) of
Section 5.2. In the event the Borrower fails to request extension or conversion
of any Eurodollar Loan in accordance with this Section, or any such conversion
or extension is not permitted or required by this Section, then such Eurodollar
Loan shall be automatically converted into a Base Rate Loan at the end of the
Interest Period applicable thereto. The Agent shall give each Lender notice as
promptly as practicable of any such proposed extension or conversion affecting
any Loan.
3.3 PREPAYMENTS.
(a) Voluntary Prepayments. The Borrower shall have the right
to prepay Loans in whole or in part from time to time; provided,
however, that each partial prepayment of Loans shall be in a minimum
principal amount of $100,000 and integral multiples of $50,000. Subject
to the foregoing terms, amounts prepaid under this Section 3.3(a) shall
be applied as the Borrower may elect; provided that if the Borrower
fails to specify otherwise in respect of any voluntary prepayment, then
such prepayment shall be applied first to Base Rate Loans and then to
Eurodollar Loans in direct order of Interest Period maturities. All
prepayments under this Section 3.3(a) shall be subject to Section 3.12,
but otherwise without premium or penalty, and be accompanied by
interest on the principal amount prepaid through the date of
prepayment.
(b) Mandatory Prepayments.
(i) Committed Amount. If at any time, the sum of the
aggregate principal amount of outstanding Loans plus LOC
Obligations outstanding shall exceed the Committed Amount, the
Borrower immediately shall prepay the Loans and (after all
Loans have been repaid) cash collateralize the LOC
Obligations, in an amount sufficient to eliminate such excess.
33
39
(ii) Asset Dispositions. Immediately upon the
occurrence of any Asset Disposition Prepayment Event, the
Borrower shall prepay the Loans in an aggregate amount equal
to the Net Cash Proceeds of the related Asset Disposition not
applied (or caused to be applied) by the Credit Parties during
the related Application Period to the purchase, acquisition or
construction of Eligible Assets as contemplated by the terms
of Section 8.5(e) (such prepayment to be applied as set forth
in clause (iii) below).
(iii) Application of Mandatory Prepayments. All
amounts required to be paid pursuant to this Section 3.3(b)
shall be applied as follows: (A) with respect to all amounts
prepaid pursuant to Section 3.3(b)(i), to Loans and (after all
Loans have been repaid) to a cash collateral account in
respect of LOC Obligations, (B) with respect to all amounts
prepaid pursuant to Section 3.3(b)(ii), to the Loans and
(after all Loans have been repaid) to a cash collateral
account in respect of LOC Obligations (with a corresponding
reduction in the Committed Amount). Within the parameters of
the applications set forth above, prepayments shall be applied
first to Base Rate Loans and then to Eurodollar Loans in
direct order of Interest Period maturities. All prepayments
under this Section 3.3(b) shall be subject to Section 3.12 and
be accompanied by interest on the principal amount prepaid
through the date of prepayment.
3.4 TERMINATION AND REDUCTION OF COMMITTED AMOUNT.
(a) Voluntary Reductions. The Borrower may from time to time
permanently reduce or terminate the Committed Amount in whole or in
part (in minimum aggregate amounts of $500,000 or in integral multiples
of $100,000 in excess thereof (or, if less, the full remaining amount
of the then applicable Committed Amount)) upon five Business Days'
prior written notice to the Agent; provided, however, no such
termination or reduction shall be made which would cause the aggregate
principal amount of outstanding Loans plus LOC Obligations outstanding
to exceed the Committed Amount, unless, concurrently with such
termination or reduction, the Loans are repaid to the extent necessary
to eliminate such excess. The Agent shall promptly notify each affected
Lender of receipt by the Agent of any notice from the Borrower pursuant
to this Section 3.4(a).
(b) Mandatory Reductions. On any date that the Loans are
required to be prepaid pursuant to the terms of Section 3.3(b)(iii),
the Committed Amount automatically shall be permanently reduced by the
amount of such required prepayment and/or reduction.
(c) Maturity Date. The Revolving Commitments of the Lenders
and the LOC Commitment of the Issuing Lender shall automatically
terminate on the Maturity Date.
(d) General. The Borrower shall pay to the Agent for the
account of the Lenders in accordance with the terms of Section 3.5(b),
on the date of each termination or
34
40
reduction of the Committed Amount, the Unused Fee accrued through the
date of such termination or reduction on the amount of the Committed
Amount so terminated or reduced.
3.5 FEES.
(a) Upfront Fees. The Borrower agrees to pay to the Agent for
the benefit of the Lenders in immediately available funds on or before
the Closing Date an upfront fee (the "Upfront Fee") in the amount
provided in the Agent's Fee Letter.
(b) Unused Fee. In consideration of the Revolving Commitments
of the Lenders hereunder, the Borrower agrees to pay to the Agent for
the account of each Lender a fee (the "Unused Fee") on the Unused
Committed Amount computed at a per annum rate for each day during the
applicable Unused Fee Calculation Period (hereinafter defined) at a
rate equal to the Applicable Percentage in effect from time to time.
The Unused Fee shall commence to accrue on the Closing Date and shall
be due and payable in arrears on the last business day of each March,
June, September and December (and any date that the Committed Amount is
reduced as provided in Section 3.4(a) and the Maturity Date) for the
immediately preceding quarter (or portion thereof) (each such quarter
or portion thereof for which the Unused Fee is payable hereunder being
herein referred to as an "Unused Fee Calculation Period"), beginning
with the first of such dates to occur after the Closing Date.
(c) Letter of Credit Fees.
(i) Standby Letter of Credit Issuance Fee. In
consideration of the issuance of standby Letters of Credit
hereunder, the Borrower promises to pay to the Agent for the
account of each Lender a fee (the "Standby Letter of Credit
Fee") on such Lender's Commitment Percentage of the average
daily maximum amount available to be drawn under each such
standby Letter of Credit computed at a per annum rate for each
day from the date of issuance to the date of expiration equal
to the Applicable Percentage. The Standby Letter of Credit Fee
will be payable quarterly in arrears on the last Business Day
of each March, June, September and December for the
immediately preceding quarter (or a portion thereof).
(ii) Trade Letter of Credit Drawing Fee. In
consideration of the issuance of trade Letters of Credit
hereunder, the Borrower promises to pay to the Agent for the
account of each Lender a fee (the "Trade Letter of Credit
Fee") equal to the Applicable Percentage on such Lender's
Commitment Percentage of the amount of each drawing under any
such trade Letter of Credit. The Trade Letter of Credit Fee
will be payable on each date of drawing under a trade Letter
of Credit.
35
41
(iii) Issuing Lender Fees. In addition to the Standby
Letter of Credit Fee payable pursuant to clause (i) above and
the Trade Letter of Credit Fee payable pursuant to clause (ii)
above, the Borrower promises to pay to the Issuing Lender for
its own account without sharing by the other Lenders a letter
of credit fronting fee of one-fourth of one percent (1/4%) per
annum on the average daily maximum amount available to be
drawn under outstanding Letters of Credit payable quarterly in
arrears and such other negotiation fees agreed to by the
Borrower and the Issuing Lender from time to time and the
customary charges from time to time of the Issuing Lender with
respect to the issuance, amendment, transfer, administration,
cancellation and conversion of, and drawings under, such
Letters of Credit (collectively, the "Issuing Lender Fees").
(d) Administrative Fees. The Borrower agrees to pay to the
Agent, for its own account and NationsBanc Montgomery Securities LLC,
as applicable, the fees referred to in the Agent's Fee Letter
(collectively, the "Agent's Fees").
3.6 CAPITAL ADEQUACY.
If any Lender has reasonably determined, after the date hereof, that
the adoption or the becoming effective of, or any change in, or any change by
any Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof in the interpretation or administration
of, any applicable law, rule or regulation regarding capital adequacy, or
compliance by such Lender with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable agency, has or would have the effect of reducing the rate of
return on such Lender's capital or assets as a consequence of its commitments or
obligations hereunder to a level below that which such Lender could have
achieved but for such adoption, effectiveness, change or compliance (taking into
consideration such Lender's policies with respect to capital adequacy), then,
upon notice from such Lender to the Borrower, the Borrower shall be obligated to
pay to such Lender such additional amount or amounts as will compensate such
Lender on an after-tax basis (after taking into account applicable deductions
and credits in respect of the amount indemnified) for such reduction.
Notwithstanding the foregoing, if any Lender fails to notify the Borrower of any
event that will entitle such Lender to compensation under this Section 3.6
within 90 days after such Lender becomes aware of such event, then such Lender
shall not be entitled to any compensation from the Borrower for any reduction in
rate of return on capital arising prior to the date that is 90 days before the
date on which such Lender notifies the Borrower of such event. Each
determination by any such Lender of amounts owing under this Section shall,
absent manifest error, be conclusive and binding on the parties hereto.
3.7 LIMITATION ON EURODOLLAR LOANS.
If on or prior to the first day of any Interest Period for any
Eurodollar Loan:
(a) the Agent determines in good faith (which determination
shall be conclusive) that by reason of circumstances affecting the
relevant market, adequate and
36
42
reasonable means do not exist for ascertaining the Eurodollar Rate for
such Interest Period; or
(b) the Required Lenders determine in good faith (which
determination shall be conclusive) and notify the Agent that the
Eurodollar Rate will not adequately and fairly reflect the cost to the
Lenders of funding Eurodollar Loans for such Interest Period;
then the Agent shall give the Borrower prompt notice thereof (which notice shall
be withdrawn whenever such circumstances no longer exist), and so long as such
condition remains in effect, the Lenders shall be under no obligation to make
additional Eurodollar Loans, Continue Eurodollar Loans, or to Convert Base Rate
Loans into Eurodollar Loans and the Borrower shall, on the last day(s) of the
then current Interest Period(s) for the outstanding Eurodollar Loans, either
prepay such Eurodollar Loans or Convert such Eurodollar Loans into Base Rate
Loans in accordance with the terms of this Credit Agreement.
3.8 ILLEGALITY.
Notwithstanding any other provision of this Credit Agreement, in the
event that it becomes unlawful for any Lender or its Applicable Lending Office
to make, maintain, or fund Eurodollar Loans hereunder, then such Lender shall
promptly notify the Borrower thereof (which notice shall be withdrawn whenever
such circumstances no longer exist) and such Lender's obligation to make or
Continue Eurodollar Loans and to Convert Base Rate Loans into Eurodollar Loans
shall be suspended until such time as such Lender may again make, maintain, and
fund Eurodollar Loans (in which case the provisions of Section 3.10 shall be
applicable).
3.9 REQUIREMENTS OF LAW.
If, after the date hereof, the adoption of any applicable law, rule, or
regulation, or any change in any applicable law, rule, or regulation, or any
change in the interpretation or administration thereof by any Governmental
Authority, central bank, or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its Applicable Lending
Office) with any request or directive (whether or not having the force of law)
of any such Governmental Authority, central bank, or comparable agency:
(i) shall subject such Lender (or its Applicable
Lending Office) to any tax, duty, or other charge with respect to any
Eurodollar Loans, its Notes, or its obligation to make Eurodollar
Loans, or change the basis of taxation of any amounts payable to such
Lender (or its Applicable Lending Office) under this Credit Agreement
or its Notes in respect of any Eurodollar Loans (other than taxes
imposed on the overall net income of such Lender by the jurisdiction in
which such Lender has its principal office or such Applicable Lending
Office);
(ii) shall impose, modify, or deem applicable any
reserve, special deposit, assessment, or similar requirement (other
than the Eurodollar Reserve Requirement utilized in the determination
of the Adjusted Eurodollar Rate) relating to any
37
43
extensions of credit or other assets of, or any deposits with or other
liabilities or commitments of, such Lender (or its Applicable Lending
Office), including the Commitment of such Lender hereunder; or
(iii) shall impose on such Lender (or its Applicable
Lending Office) or on the United States market for certificates of
deposit or the London interbank market any other condition affecting
this Credit Agreement or its Notes or any of such extensions of credit
or liabilities or commitments (excluding any tax of any kind
whatsoever);
and the result of any of the foregoing is to increase the cost to such Lender
(or its Applicable Lending Office) of making, Converting into, Continuing, or
maintaining any Eurodollar Loans or to reduce any sum received or receivable by
such Lender (or its Applicable Lending Office) under this Credit Agreement or
its Notes with respect to any Eurodollar Loans, then the Borrower shall pay to
such Lender on demand such amount or amounts as will compensate such Lender on
an after-tax basis (after taking into account applicable deductions and credits
in respect of the amount indemnified) for such increased cost or reduction. If
any Lender requests compensation by the Borrower under this Section 3.9, the
Borrower may, by notice to such Lender (with a copy to the Agent), suspend the
obligation of such Lender to make or Continue Eurodollar Loans, or to Convert
Base Rate Loans into Eurodollar Loans, until the event or condition giving rise
to such request ceases to be in effect (in which case the provisions of Section
3.10 shall be applicable); provided that such suspension shall not affect the
right of such Lender to receive the compensation so requested. Each Lender shall
promptly notify the Borrower and the Agent of any event of which it has
knowledge, occurring after the date hereof, which will entitle such Lender to
compensation pursuant to this Section 3.9 and will designate a different
Applicable Lending Office if such designation will avoid the need for, or reduce
the amount of, such compensation and will not, in the judgment of such Lender,
be otherwise disadvantageous to it. Any Lender claiming compensation under this
Section 3.9 shall furnish to the Borrower and the Agent a statement setting
forth the additional amount or amounts to be paid to it hereunder which shall be
conclusive in the absence of manifest error. In determining such amount, such
Lender may use any reasonable averaging and attribution methods. Notwithstanding
the foregoing, if any Lender fails to notify the Borrower of any event that will
entitle such Lender to compensation under this Section 3.9(a) within 180 days
after such Lender becomes aware of such event, then such Lender shall not be
entitled to any compensation from the Borrower for any such amounts arising
prior to the date that is 180 days before the date on which such Lender notifies
the Borrower of such event. Such a certificate as to any additional amounts
payable pursuant to this Section 3.9(a) submitted by such Lender, through the
Agent, to the Borrower shall be conclusive and binding on the parties hereto in
the absence of manifest error.
3.10 TREATMENT OF AFFECTED LOANS.
If the obligation of any Lender to make any Eurodollar Loan or to
Continue, or to Convert Base Rate Loans into, Eurodollar Loans shall be
suspended pursuant to Section 3.8 or 3.9 hereof, such Lender's Eurodollar Loans
shall be automatically Converted into Base Rate Loans on the last day(s) of the
then current Interest Period(s) for such Eurodollar Loans (or, in the case of a
Conversion required by Section 3.8 hereof, on such earlier date as such Lender
may
38
44
specify to the Borrower with a copy to the Agent) and, unless and until such
Lender gives notice as provided below that the circumstances specified in
Section 3.8 or 3.9 hereof that gave rise to such Conversion no longer exist:
(a) to the extent that such Lender's Eurodollar Loans have
been so Converted, all payments and prepayments of principal that would
otherwise be applied to such Lender's Eurodollar Loans shall be applied
instead to its Base Rate Loans; and
(b) all Loans that would otherwise be made or Continued by
such Lender as Eurodollar Loans shall be made or Continued instead as
Base Rate Loans, and all Base Rate Loans of such Lender that would
otherwise be Converted into Eurodollar Loans shall remain as Base Rate
Loans.
If such Lender gives notice to the Borrower (with a copy to the Agent) that the
circumstances specified in Section 3.8 or 3.9 hereof that gave rise to the
Conversion of such Lender's Eurodollar Loans pursuant to this Section 3.10 no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Eurodollar Loans made by other Lenders are
outstanding, such Lender's Base Rate Loans shall be automatically Converted, on
the first day(s) of the next succeeding Interest Period(s) for such outstanding
Eurodollar Loans, to the extent necessary so that, after giving effect thereto,
all Loans held by the Lenders holding Eurodollar Loans and by such Lender are
held pro rata (as to principal amounts, interest rate basis, and Interest
Periods) in accordance with their respective Commitments.
3.11 TAXES.
(a) Any and all payments by the Borrower to or for the account
of any Lender or the Agent hereunder or under any other Credit Document
shall be made free and clear of and without deduction for any and all
present or future taxes, duties, levies, imposts, deductions, charges
or withholdings, and all liabilities with respect thereto, excluding,
in the case of each Lender and the Agent, taxes imposed on its income,
and franchise taxes imposed on it, by the jurisdiction under the laws
of which such Lender (or its Applicable Lending Office) or the Agent
(as the case may be) is organized or any political subdivision thereof
(all such non-excluded taxes, duties, levies, imposts, deductions,
charges, withholdings, and liabilities being hereinafter referred to as
"Taxes"). If the Borrower shall be required by law to deduct any Taxes
from or in respect of any sum payable under this Credit Agreement or
any other Credit Document to any Lender or the Agent, (i) the sum
payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums
payable under this Section 3.11) such Lender or the Agent receives an
amount equal to the sum it would have received had no such deductions
been made, (ii) the Borrower shall make such deductions, (iii) the
Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law, and
(iv) the Borrower shall furnish to the Agent, at its address referred
to in Section 11.1, the original or a certified copy of a receipt
evidencing payment thereof.
39
45
(b) In addition, the Borrower agrees to pay any and all
present or future stamp or documentary taxes and any other excise or
property taxes or charges or similar levies which arise from any
payment made under this Credit Agreement or any other Credit Document
or from the execution or delivery of, or otherwise with respect to,
this Credit Agreement or any other Credit Document (hereinafter
referred to as "Other Taxes").
(c) The Borrower agrees to indemnify each Lender and the Agent
for the full amount of Taxes and Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this Section 3.11) paid by such
Lender or the Agent (as the case may be) and any liability (including
penalties, interest, and expenses) arising therefrom or with respect
thereto.
(d) Each Lender organized under the laws of a jurisdiction
outside the United States, on or prior to the date of its execution and
delivery of this Credit Agreement in the case of each Lender listed on
the signature pages hereof and on or prior to the date on which it
becomes a Lender in the case of each other Lender, and from time to
time thereafter if requested in writing by the Borrower or the Agent
(but only so long as such Lender remains lawfully able to do so), shall
provide the Borrower and the Agent with (i) Internal Revenue Service
Form 1001 or 4224, as appropriate, or any successor form prescribed by
the Internal Revenue Service, certifying that such Lender is entitled
to benefits under an income tax treaty to which the United States is a
party which reduces the rate of withholding tax on payments of interest
or certifying that the income receivable pursuant to this Credit
Agreement is effectively connected with the conduct of a trade or
business in the United States, (ii) Internal Revenue Service Form W-8
or W-9, as appropriate, or any successor form prescribed by the
Internal Revenue Service, and (iii) any other form or certificate
required by any taxing authority (including any certificate required by
Sections 871(h) and 881(c) of the Internal Revenue Code), certifying
that such Lender is entitled to an exemption from or a reduced rate of
tax on payments pursuant to this Credit Agreement or any of the other
Credit Documents.
(e) For any period with respect to which a Lender has failed
to provide the Borrower and the Agent with the appropriate form
pursuant to Section 3.11(d) (unless such failure is due to a change in
treaty, law, or regulation occurring subsequent to the date on which a
form originally was required to be provided), such Lender shall not be
entitled to indemnification under Section 3.11(a) or 3.11(b) with
respect to Taxes imposed by the United States; provided, however, that
should a Lender, which is otherwise exempt from or subject to a reduced
rate of withholding tax, become subject to Taxes because of its failure
to deliver a form required hereunder, the Borrower shall take such
steps as such Lender shall reasonably request to assist such Lender to
recover such Taxes.
(f) If the Borrower is required to pay additional amounts to
or for the account of any Lender pursuant to this Section 3.11, then
such Lender will agree to use reasonable efforts to change the
jurisdiction of its Applicable Lending Office so as to eliminate or
reduce any such additional payment which may thereafter accrue if such
change, in the judgment of such Lender, is not otherwise
disadvantageous to such Lender.
40
46
(g) Within thirty (30) days after the date of any payment of
Taxes, the Borrower shall furnish to the Agent the original or a
certified copy of a receipt evidencing such payment.
(h) Without prejudice to the survival of any other agreement
of the Borrower hereunder, the agreements and obligations of the
Borrower contained in this Section 3.11 shall survive the repayment of
the Loans, LOC Obligations and other obligations under the Credit
Documents and the termination of the Commitments hereunder.
3.12 COMPENSATION.
Upon the request of any Lender, the Borrower shall pay to such Lender
such amount or amounts as shall be sufficient (in the reasonable opinion of such
Lender) to compensate it for any loss, cost, or expense (including loss of
anticipated profits) incurred by it as a result of:
(a) any payment, prepayment, or Conversion of a Eurodollar
Loan for any reason (including, without limitation, the acceleration of
the Loans pursuant to Section 9.2) on a date other than the last day of
the Interest Period for such Loan; or
(b) any failure by the Borrower for any reason (including,
without limitation, the failure of any condition precedent specified in
Section 5 to be satisfied) to borrow, Convert, Continue, or prepay a
Eurodollar Loan on the date for such borrowing, Conversion,
Continuation, or prepayment specified in the relevant notice of
borrowing, prepayment, Continuation, or Conversion under this Credit
Agreement.
With respect to Eurodollar Loans, such indemnification may include an amount
equal to the excess, if any, of (a) the amount of interest which would have
accrued on the amount so prepaid, or not so borrowed, converted or continued,
for the period from the date of such prepayment or of such failure to borrow,
convert or continue to the last day of the applicable Interest Period (or, in
the case of a failure to borrow, convert or continue, the Interest Period that
would have commenced on the date of such failure) in each case at the applicable
rate of interest for such Eurodollar Loans provided for herein (excluding,
however, the Applicable Percentage included therein, if any) over (b) the amount
of interest (as reasonably determined by such Lender) which would have accrued
to such Lender on such amount by placing such amount on deposit for a comparable
period with leading banks in the interbank Eurodollar market. The covenants of
the Borrower set forth in this Section 3.12 shall survive the repayment of the
Loans, LOC Obligations and other obligations under the Credit Documents and the
termination of the Commitments hereunder. Notwithstanding the foregoing, any
Lender shall be entitled to compensation under this Section 3.12 only for an
event occurring during the 180-day period ending on the date such Lender gives
notice of such event entitling such Lender to compensation under this Section
3.12.
41
47
3.13 PRO RATA TREATMENT.
Except to the extent otherwise provided herein:
(a) Loans. Each Loan, each payment or (subject to the terms of
Section 3.3) prepayment of principal of any Loan or reimbursement
obligations arising from drawings under Letters of Credit, each payment
of interest on the Loans or reimbursement obligations arising from
drawings under Letters of Credit, each payment of Unused Fees, each
payment of the Standby Letter of Credit Fee, each payment of the Trade
Letter of Credit Fee, each reduction of the Committed Amount and each
conversion or extension of any Loan, shall be allocated pro rata among
the Lenders in accordance with the respective principal amounts of
their outstanding Loans and Participation Interests.
(b) Advances. No Lender shall be responsible for the failure
or delay by any other Lender in its obligation to make its ratable
share of a borrowing hereunder; provided, however, that the failure of
any Lender to fulfill its obligations hereunder shall not relieve any
other Lender of its obligations hereunder. Unless the Agent shall have
been notified by any Lender prior to the date of any requested
borrowing that such Lender does not intend to make available to the
Agent its ratable share of such borrowing to be made on such date, the
Agent may assume that such Lender has made such amount available to the
Agent on the date of such borrowing, and the Agent in reliance upon
such assumption, may (in its sole discretion but without any obligation
to do so) make available to the Borrower a corresponding amount. If
such corresponding amount is not in fact made available to the Agent,
the Agent shall be able to recover such corresponding amount from such
Lender. If such Lender does not pay such corresponding amount forthwith
upon the Agent's demand therefor, the Agent will promptly notify the
Borrower, and the Borrower shall immediately pay such corresponding
amount to the Agent. The Agent shall also be entitled to recover from
the Lender or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such
corresponding amount was made available by the Agent to the Borrower to
the date such corresponding amount is recovered by the Agent at a per
annum rate equal to (i) from the Borrower at the applicable rate for
the applicable borrowing pursuant to the Notice of Borrowing and (ii)
from a Lender at the Federal Funds Rate.
3.14 SHARING OF PAYMENTS.
The Lenders agree among themselves that, in the event that any Lender
shall obtain payment in respect of any Loan, LOC Obligations or any other
obligation owing to such Lender under this Credit Agreement through the exercise
of a right of setoff, banker's lien or counterclaim, or pursuant to a secured
claim under Section 506 of Title 11 of the United States Code or other security
or interest arising from, or in lieu of, such secured claim, received by such
Lender under any applicable bankruptcy, insolvency or other similar law or
otherwise, or by any other means, in excess of its pro rata share of such
payment as provided for in this Credit Agreement, such Lender shall promptly
purchase from the other Lenders a Participation Interest in such Loans, LOC
Obligations and other obligations in such amounts, and make such other
adjustments from time to time, as shall be equitable to the end that all Lenders
share such payment in accordance with their respective ratable shares as
provided for in this Credit Agreement. The Lenders further agree among
themselves that if payment to a Lender obtained by such Lender
42
48
through the exercise of a right of setoff, banker's lien, counterclaim or other
event as aforesaid shall be rescinded or must otherwise be restored, each Lender
which shall have shared the benefit of such payment shall, by repurchase of a
Participation Interest theretofore sold, return its share of that benefit
(together with its share of any accrued interest payable with respect thereto)
to each Lender whose payment shall have been rescinded or otherwise restored.
The Borrower agrees that any Lender so purchasing such a Participation Interest
may, to the fullest extent permitted by law, exercise all rights of payment,
including setoff, banker's lien or counterclaim, with respect to such
Participation Interest as fully as if such Lender were a holder of such Loan,
LOC Obligations or other obligation in the amount of such Participation
Interest. Except as otherwise expressly provided in this Credit Agreement, if
any Lender or the Agent shall fail to remit to the Agent or any other Lender an
amount payable by such Lender or the Agent to the Agent or such other Lender
pursuant to this Credit Agreement on the date when such amount is due, such
payments shall be made together with interest thereon for each date from the
date such amount is due until the date such amount is paid to the Agent or such
other Lender at a rate per annum equal to the Federal Funds Rate. If under any
applicable bankruptcy, insolvency or other similar law, any Lender receives a
secured claim in lieu of a setoff to which this Section 3.14 applies, such
Lender shall, to the extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights of the Lenders under this
Section 3.14 to share in the benefits of any recovery on such secured claim.
3.15 PAYMENTS, COMPUTATIONS, ETC.
(a) Except as otherwise specifically provided herein, all
payments hereunder shall be made to the Agent in dollars in immediately
available funds, without setoff, deduction, counterclaim or withholding
of any kind, at the Agent's office specified in Schedule 2.1(a) not
later than 2:00 P.M. (Charlotte, North Carolina time) on the date when
due. Payments received after such time shall be deemed to have been
received on the next succeeding Business Day. The Agent may (but shall
not be obligated to) debit the amount of any such payment which is not
made by such time to any ordinary deposit account of the Borrower
maintained with the Agent (with notice to the Borrower). The Borrower
shall, at the time it makes any payment under this Credit Agreement,
specify to the Agent the Loans, LOC Obligations, Fees, interest or
other amounts payable by the Borrower hereunder to which such payment
is to be applied (and in the event that it fails so to specify, or if
such application would be inconsistent with the terms hereof, the Agent
shall distribute such payment to the Lenders in such manner as the
Agent may determine to be appropriate in respect of obligations owing
by the Borrower hereunder, subject to the terms of Section 3.13(a)).
The Agent will distribute such payments to such Lenders, if any such
payment is received prior to 12:00 Noon (Charlotte, North Carolina
time) on a Business Day in like funds as received prior to the end of
such Business Day and otherwise the Agent will distribute such payment
to such Lenders on the next succeeding Business Day. Whenever any
payment hereunder shall be stated to be due on a day which is not a
Business Day, the due date thereof shall be extended to the next
succeeding Business Day (subject to accrual of interest and Fees for
the period of such extension), except that in the case of Eurodollar
Loans, if the extension would cause the payment to be made in the next
following calendar month, then such payment shall instead be made on
43
49
the next preceding Business Day. Except as expressly provided otherwise
herein, all computations of interest and fees shall be made on the
basis of actual number of days elapsed over a year of 360 days, except
with respect to computation of interest on Base Rate Loans shall be
calculated based on a year of 365 or 366 days, as appropriate. Interest
shall accrue from and include the date of borrowing, but exclude the
date of payment.
(b) Allocation of Payments After Event of Default.
Notwithstanding any other provisions of this Credit Agreement to the
contrary, after the occurrence and during the continuance of an Event
of Default, all amounts collected or received by the Agent or any
Lender on account of the Credit Party Obligations or any other amounts
outstanding under any of the Credit Documents or in respect of the
Collateral shall be paid over or delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket costs
and expenses (including without limitation reasonable attorneys' fees)
of the Agent in connection with enforcing the rights of the Lenders
under the Credit Documents and any protective advances made by the
Agent with respect to the Collateral under or pursuant to the terms of
the Collateral Documents;
SECOND, to payment of any fees owed to the Agent;
THIRD, to the payment of all reasonable out-of-pocket costs
and expenses (including without limitation, reasonable attorneys' fees)
of each of the Lenders in connection with enforcing its rights under
the Credit Documents or otherwise with respect to the Credit Party
Obligations owing to such Lender;
FOURTH, to the payment of all of the Credit Party Obligations
consisting of accrued fees and interest;
FIFTH, to the payment of the outstanding principal amount of
the Credit Party Obligations (including the payment or cash
collateralization of the outstanding LOC Obligations);
SIXTH, to all other Credit Party Obligations and other
obligations which shall have become due and payable under the Credit
Documents or otherwise and not repaid pursuant to clauses "FIRST"
through "FIFTH" above; and
SEVENTH, to the payment of the surplus, if any, to whoever may
be lawfully entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be applied in
the numerical order provided until exhausted prior to application to
the next succeeding category; (ii) each of the Lenders shall receive an
amount equal to its pro rata share (based on the proportion that the
then outstanding Loans and LOC Obligations held by such Lender bears to
the
44
50
aggregate then outstanding Loans and LOC Obligations) of amounts
available to be applied pursuant to clauses "THIRD", "FOURTH", "FIFTH"
and "SIXTH" above; and (iii) to the extent that any amounts available
for distribution pursuant to clause "FIFTH" above are attributable to
the issued but undrawn amount of outstanding Letters of Credit, such
amounts shall be held by the Agent in a cash collateral account and
applied (A) first, to reimburse the Issuing Lender from time to time
for any drawings under such Letters of Credit and (B) then, following
the expiration of all Letters of Credit, to all other obligations of
the types described in clauses "FIFTH" and "SIXTH" above in the manner
provided in this Section 3.15(b).
3.16 EVIDENCE OF DEBT.
(a) Each Lender shall maintain an account or accounts
evidencing each Loan made by such Lender to the Borrower from time to
time, including the amounts of principal and interest payable and paid
to such Lender from time to time under this Credit Agreement. Each
Lender will make reasonable efforts to maintain the accuracy of its
account or accounts and to promptly update its account or accounts from
time to time, as necessary.
(b) The Agent shall maintain the Register pursuant to Section
11.3(c), and a subaccount for each Lender, in which Register and
subaccounts (taken together) shall be recorded (i) the amount, type and
Interest Period of each such Loan hereunder, (ii) the amount of any
principal or interest due and payable or to become due and payable to
each Lender hereunder and (iii) the amount of any sum received by the
Agent hereunder from or for the account of the Borrower and each
Lender's share thereof. The Agent will make reasonable efforts to
maintain the accuracy of the subaccounts referred to in the preceding
sentence and to promptly update such subaccounts from time to time, as
necessary.
(c) The entries made in the accounts, Register and subaccounts
maintained pursuant to subsection (b) of this Section 3.16 (and, if
consistent with the entries of the Agent, subsection (a)) shall be
prima facie evidence of the existence and amounts of the obligations of
the Borrower therein recorded; provided, however, that the failure of
any Lender or the Agent to maintain any such account, such Register or
such subaccount, as applicable, or any error therein, shall not in any
manner affect the obligation of the Borrower to repay the Loans made by
such Lender in accordance with the terms hereof.
SECTION 4
GUARANTY
4.1 THE GUARANTY.
Each of the Guarantors hereby jointly and severally guarantees to each
Lender, each Affiliate of a Lender that enters into a Hedging Agreement, and the
Agent as hereinafter provided,
45
51
as primary obligor and not as surety, the prompt payment of the Credit Party
Obligations in full when due (whether at stated maturity, as a mandatory
prepayment, by acceleration, as a mandatory cash collateralization or otherwise)
strictly in accordance with the terms thereof. The Guarantors hereby further
agree that if any of the Credit Party Obligations are not paid in full when due
(whether at stated maturity, as a mandatory prepayment, by acceleration, as a
mandatory cash collateralization or otherwise), the Guarantors will, jointly and
severally, promptly pay the same, without any demand or notice whatsoever, and
that in the case of any extension of time of payment or renewal of any of the
Credit Party Obligations, the same will be promptly paid in full when due
(whether at extended maturity, as a mandatory prepayment, by acceleration, as a
mandatory cash collateralization or otherwise) in accordance with the terms of
such extension or renewal.
Notwithstanding any provision to the contrary contained herein or in
any other of the Credit Documents or Hedging Agreements, the obligations of each
Guarantor hereunder shall be limited to an aggregate amount equal to the largest
amount that would not render its obligations hereunder subject to avoidance
under Section 548 of the Bankruptcy Code or any comparable provisions of any
applicable state law.
4.2 OBLIGATIONS UNCONDITIONAL.
The obligations of the Guarantors under Section 4.1 are joint and
several, absolute and unconditional, irrespective of the value, genuineness,
validity, regularity or enforceability of any of the Credit Documents or Hedging
Agreements, or any other agreement or instrument referred to therein, or any
substitution, release, impairment or exchange of any other guarantee of or
security for any of the Credit Party Obligations, and, to the fullest extent
permitted by applicable law, irrespective of any other circumstance whatsoever
which might otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor, it being the intent of this Section 4.2 that the
obligations of the Guarantors hereunder shall be absolute and unconditional
under any and all circumstances. Each Guarantor agrees that such Guarantor shall
have no right of subrogation, indemnity, reimbursement or contribution against
the Borrower or any other Guarantor of the Credit Party Obligations for amounts
paid under this Section 4 until such time as the Lenders (and any Affiliates of
Lenders entering into Hedging Agreements) have been paid in full, all
Commitments under this Credit Agreement have been terminated and no Person or
Governmental Authority shall have any right to request any return or
reimbursement of funds from the Lenders in connection with monies received under
the Credit Documents or Hedging Agreements. Without limiting the generality of
the foregoing, it is agreed that, to the fullest extent permitted by law, the
occurrence of any one or more of the following shall not alter or impair the
liability of any Guarantor hereunder which shall remain absolute and
unconditional as described above:
(a) at any time or from time to time, without notice to any
Guarantor, the time for any performance of or compliance with any of
the Credit Party Obligations shall be extended, or such performance or
compliance shall be waived;
46
52
(b) any of the acts mentioned in any of the provisions of any
of the Credit Documents, any Hedging Agreement or any other agreement
or instrument referred to in the Credit Documents or Hedging Agreements
shall be done or omitted;
(c) the maturity of any of the Credit Party Obligations shall
be accelerated, or any of the Credit Party Obligations shall be
modified, supplemented or amended in any respect, or any right under
any of the Credit Documents, any Hedging Agreement or any other
agreement or instrument referred to in the Credit Documents or Hedging
Agreements shall be waived or any other guarantee of any of the Credit
Party Obligations or any security therefor shall be released, impaired
or exchanged in whole or in part or otherwise dealt with;
(d) any Lien granted to, or in favor of, the Agent or any
Lender or Lenders as security for any of the Credit Party Obligations
shall fail to attach or be perfected; or
(e) any of the Credit Party Obligations shall be determined to
be void or voidable (including, without limitation, for the benefit of
any creditor of any Guarantor) or shall be subordinated to the claims
of any Person (including, without limitation, any creditor of any
Guarantor).
With respect to its obligations hereunder, each Guarantor hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the Agent or any Lender exhaust any right,
power or remedy or proceed against any Person under any of the Credit Documents,
any Hedging Agreement or any other agreement or instrument referred to in the
Credit Documents or Hedging Agreements, or against any other Person under any
other guarantee of, or security for, any of the Credit Party Obligations.
4.3 REINSTATEMENT.
The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Credit Party Obligations is
rescinded or must be otherwise restored by any holder of any of the Credit Party
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Agent and each Lender on demand for all reasonable costs and expenses
(including, without limitation, fees and expenses of counsel) incurred by the
Agent or such Lender in connection with such rescission or restoration,
including any such costs and expenses incurred in defending against any claim
alleging that such payment constituted a preference, fraudulent transfer or
similar payment under any bankruptcy, insolvency or similar law.
4.4 CERTAIN ADDITIONAL WAIVERS.
Without limiting the generality of the provisions of this Section 4,
each Guarantor hereby specifically waives the benefits of N.C. Gen. Stat. ss.ss.
26-7 through 26-9, inclusive, to the extent applicable. Each Guarantor further
agrees that such Guarantor shall have no right of recourse to
47
53
security for the Credit Party Obligations, except through the exercise of rights
of subrogation pursuant to Section 4.2 and through the exercise of rights of
contribution pursuant to Section 4.6.
4.5 REMEDIES.
The Guarantors agree that, to the fullest extent permitted by law, as
between the Guarantors, on the one hand, and the Agent and the Lenders, on the
other hand, the Credit Party Obligations may be declared to be forthwith due and
payable as provided in Section 9.2 (and shall be deemed to have become
automatically due and payable in the circumstances provided in said Section 9.2)
for purposes of Section 4.1 notwithstanding any stay, injunction or other
prohibition preventing such declaration (or preventing the Credit Party
Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or the Credit Party
Obligations being deemed to have become automatically due and payable), the
Credit Party Obligations (whether or not due and payable by any other Person)
shall forthwith become due and payable by the Guarantors for purposes of Section
4.1. The Guarantors acknowledge and agree that their obligations hereunder are
secured in accordance with the terms of the Security Agreements and the other
Collateral Documents and that the Lenders may exercise their remedies thereunder
in accordance with the terms thereof.
4.6 RIGHTS OF CONTRIBUTION.
The Guarantors hereby agree as among themselves that, if any Guarantor
shall make an Excess Payment (as defined below), such Guarantor shall have a
right of contribution from each other Guarantor in an amount equal to such other
Guarantor's Contribution Share (as defined below) of such Excess Payment. The
payment obligations of any Guarantor under this Section 4.6 shall be subordinate
and subject in right of payment to the prior payment in full to the Agent and
the Lenders of the Guaranteed Obligations, and none of the Guarantors shall
exercise any right or remedy under this Section 4.6 against any other Guarantor
until payment and satisfaction in full of all of such Guaranteed Obligations.
For purposes of this Section 4.6, (a) "Guaranteed Obligations" shall mean any
obligations arising under the other provisions of this Section 4; (b) "Excess
Payment" shall mean the amount paid by any Guarantor in excess of its Pro Rata
Share of any Guaranteed Obligations; (c) "Pro Rata Share" shall mean, for any
Guarantor in respect of any payment of Guaranteed Obligations, the ratio
(expressed as a percentage) as of the date of such payment of Guaranteed
Obligations of (i) the amount by which the aggregate present fair salable value
of all of its assets and properties exceeds the amount of all debts and
liabilities of such Guarantor (including contingent, subordinated, unmatured,
and unliquidated liabilities, but excluding the obligations of such Guarantor
hereunder) to (ii) the amount by which the aggregate present fair salable value
of all assets and other properties of the Borrower and all of the Guarantors
exceeds the amount of all of the debts and liabilities (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of the Borrower and the Guarantors hereunder) of the Borrower and
all of the Guarantors; provided, however, that, for purposes of calculating the
Pro Rata Shares of the Guarantors in respect of any payment of Guaranteed
Obligations, any Guarantor that became a Guarantor subsequent to the date of any
such payment shall be deemed to have been a Guarantor on the date of such
payment and the financial information for such Guarantor as of the date such
Guarantor became a
48
54
Guarantor shall be utilized for such Guarantor in connection with such payment;
and (d) "Contribution Share" shall mean, for any Guarantor in respect of any
Excess Payment made by any other Guarantor, the ratio (expressed as a
percentage) as of the date of such Excess Payment of (i) the amount by which the
aggregate present fair salable value of all of its assets and properties exceeds
the amount of all debts and liabilities of such Guarantor (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of such Guarantor hereunder) to (ii) the amount by which the
aggregate present fair salable value of all assets and other properties of the
Borrower and all of the Guarantors other than the maker of such Excess Payment
exceeds the amount of all of the debts and liabilities (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of the Borrower and the Guarantors hereunder) of the Borrower and
all of the Guarantors other than the maker of such Excess Payment; provided,
however, that, for purposes of calculating the Contribution Shares of the
Guarantors in respect of any Excess Payment, any Guarantor that became a
Guarantor subsequent to the date of any such Excess Payment shall be deemed to
have been a Guarantor on the date of such Excess Payment and the financial
information for such Guarantor as of the date such Guarantor became a Guarantor
shall be utilized for such Guarantor in connection with such Excess Payment.
This Section 4.6 shall not be deemed to affect any right of subrogation,
indemnity, reimbursement or contribution that any Guarantor may have under
applicable law against the Borrower in respect of any payment of Guaranteed
Obligations. Notwithstanding the foregoing, all rights of contribution against
any Guarantor shall terminate from and after such time, if ever, that such
Guarantor shall be relieved of its obligations pursuant to Section 8.4.
4.7 GUARANTEE OF PAYMENT; CONTINUING GUARANTEE.
The guarantee in this Section 4 is a guaranty of payment and not of
collection, is a continuing guarantee, and shall apply to all Credit Party
Obligations whenever arising.
SECTION 5
CONDITIONS
5.1 CLOSING CONDITIONS.
The obligation of the Lenders to enter into this Credit Agreement and
to make the initial Loans or the Issuing Lender to issue the initial Letter of
Credit, whichever shall occur first, shall be subject to satisfaction of the
following conditions (in form and substance acceptable to the Lenders):
(a) Executed Credit Documents. Receipt by the Agent of duly
executed copies of: (i) this Credit Agreement, (ii) the Notes, (iii)
the Collateral Documents and (iv) all other Credit Documents, each in
form and substance acceptable to the Agent in its sole discretion.
49
55
(b) Corporate Documents. Receipt by the Agent of the
following:
(i) Charter Documents. Copies of the articles or
certificates of incorporation or other charter documents of
each Credit Party certified to be true and complete as of a
recent date by the appropriate Governmental Authority of the
state or other jurisdiction of its incorporation and certified
by a secretary or assistant secretary of such Credit Party to
be true and correct as of the Closing Date.
(ii) Bylaws. A copy of the bylaws of each Credit
Party certified by a secretary or assistant secretary of such
Credit Party to be true and correct as of the Closing Date.
(iii) Resolutions. Copies of resolutions of the Board
of Directors of each Credit Party approving and adopting the
Credit Documents to which it is a party, the transactions
contemplated therein and authorizing execution and delivery
thereof, certified by a secretary or assistant secretary of
such Credit Party to be true and correct and in force and
effect as of the Closing Date.
(iv) Good Standing. Copies of (A) certificates of
good standing, existence or its equivalent with respect to
each Credit Party certified as of a recent date by the
appropriate Governmental Authorities of the state or other
jurisdiction of incorporation and each other jurisdiction in
which the failure to so qualify and be in good standing could
have a Material Adverse Effect and (B) to the extent
available, a certificate indicating payment of all corporate
franchise taxes certified as of a recent date by the
appropriate governmental taxing authorities.
(v) Incumbency. An incumbency certificate of each
Credit Party certified by a secretary or assistant secretary
to be true and correct as of the Closing Date.
(c) Opinions of Counsel. The Agent shall have received, in
each case dated as of the Closing Date:
(i) a legal opinion of Alston & Bird, LLP, general
counsel for the Credit Parties, substantially in the form of
Schedule 5.1(c)(i);
(ii) a legal opinion of special local counsel for
each Credit Party not incorporated in the State of Georgia or
Delaware, substantially in the form of Schedule 5.1(c)(ii);
and
(iii) a legal opinion of special local counsel for
the Credit Parties for each State other than Georgia in which
any Collateral is located, substantially in the form of
Schedule 5.1(c)(iii);
50
56
(d) Personal Property Collateral. The Agent shall have
received:
(i) searches of Uniform Commercial Code filings in the
jurisdiction of the chief executive office of each Credit
Party and each jurisdiction where any Collateral is located or
where a filing would need to be made in order to perfect the
Agent's security interest in the Collateral, copies of the
financing statements on file in such jurisdictions and
evidence that no Liens exist other than Permitted Liens;
(ii) duly executed UCC financing statements for each
appropriate jurisdiction as is necessary, in the Agent's sole
discretion, to perfect the Agent's security interest in the
Collateral;
(iii) searches of ownership of intellectual property in
the appropriate governmental offices and such
patent/trademark/copyright filings as requested by the Agent
in order to perfect the Agent's security interest in the
Collateral;
(iv) all stock certificates evidencing the Capital Stock
pledged to the Agent pursuant to the Pledge Agreement,
together with duly executed in blank, undated stock powers
attached thereto;
(v) such patent/trademark/copyright filings as
requested by the Agent in order to perfect the Agent's
security interest in the Collateral;
(vi) all instruments and chattel paper in the possession
of any of the Credit Parties, together with allonges or
assignments as may be necessary or appropriate to perfect the
Agent's security interest in the Collateral;
(vii) duly executed consents as are necessary, in the
Agent's sole discretion, to perfect the Lenders' security
interest in the Collateral; and
(viii) in the case of any personal property Collateral
located at a premises leased by a Credit Party, such estoppel
letters, consents and waivers from the landlords on such real
property as may be required by the Agent.
(e) Real Property Collateral. The Agent shall have received,
in form and substance reasonably satisfactory to the Agent:
(i) with respect to the real property described on
Schedule 6.20(a) (the "Mortgaged Property"), a fully executed
and notarized mortgage (each, as the same may be amended,
modified, restated or supplemented from time to time, a
"Mortgage Instrument" and collectively the "Mortgage
Instruments") encumbering (A) the fee interest of the IDB
Authority (which Mortgage Instrument shall include an
assignment of all leases, rents and profits in respect of the
Mortgaged Property
51
57
and separate assignment of leases, rents and profits from the
IDB Authority to the Agent, in recordable form) and (B) the
leasehold interest of the Borrower;
(ii) a title report obtained by the Credit Parties in
respect of each of the Mortgaged Properties;
(iii) in the case of each real property leasehold
interest of any Credit Party constituting Mortgaged Property,
(a) such estoppel letters, consents and waivers from the
landlords on such real property as may be required by the
Agent, which estoppel letters shall be in the form and
substance reasonably satisfactory to the Agent and (b)
evidence that the applicable lease, a memorandum of lease with
respect thereto, or other evidence of such lease in form and
substance reasonably satisfactory to the Agent, has been or
will be recorded in all places to the extent necessary or
desirable, in the reasonable judgment of the Agent, so as to
enable the Mortgage Instrument encumbering such leasehold
interest to effectively create a valid and enforceable first
priority lien (subject to Permitted Liens) on such leasehold
interest in favor of the Agent (or such other Person as may be
required or desired under local law) for the benefit of
Lenders;
(iv) except as otherwise indicated on Schedule 6.20, the
Agent shall have received, and the title insurance company
issuing the policy referred to in Section 5.1(e)(v) (the
"Title Insurance Company") shall have received, maps or plats
of an as-built survey of the sites of the real property
covered by the Mortgage Instruments certified to the Agent and
the Title Insurance Company in a manner reasonably
satisfactory to each of the Agent and the Title Insurance
Company, dated a date reasonably satisfactory to each of the
Agent and the Title Insurance Company by an independent
professional licensed land surveyor, which maps or plats and
the surveys on which they are based shall be made in
accordance with standards that enable the Title Insurance
Company to issue the policies referred to in Section 5.1(e)(v)
below without exception for "Survey matters", except for
matters as are reasonably acceptable to the Agent;
(v) ALTA mortgagee title insurance policies issued by
Lawyers Title Insurance Corporation (the "Mortgage Policies"),
in amounts not less than the respective amounts designated in
Schedule 6.20(a) with respect to any particular Mortgaged
Property, assuring the Agent that each of the Mortgage
Instruments creates a valid and enforceable first priority
mortgage lien on the applicable Mortgaged Property, free and
clear of all defects and encumbrances except Permitted Liens,
which Mortgage Policies shall be in form and substance
reasonably satisfactory to the Agent and shall provide for
affirmative insurance and such reinsurance as the Agent may
reasonably request, all of the foregoing in form and substance
reasonably satisfactory to the Agent;
(vi) except as otherwise indicated on Schedule 6.20,
evidence, which may be in the form of a letter from an
insurance broker or a municipal engineer, as
52
58
to whether (a) any Mortgaged Property (a "Flood Hazard
Property") is in an area designated by the Federal Emergency
Management Agency as having special flood or mud slide hazards
and (b) the community in which such Flood Hazard Property is
located is participating in the National Flood Insurance
Program;
(vii) if there are any Flood Hazard Properties, a Credit
Party's written acknowledgment of receipt of written
notification from the Agent (a) as to the existence of each
such Flood Hazard Property and (b) as to whether the community
in which each such Flood Hazard Property is located is
participating in the National Flood Insurance Program;
(viii) except as otherwise indicated on Schedule 6.20, if
there are maps or plats of an as-built survey of the sites of
the Mortgaged Properties certified to the Agent and the Title
Insurance Company in a manner reasonably satisfactory to them,
dated a date satisfactory to each of the Agent and the Title
Insurance Company by an independent professional licensed land
surveyor reasonably satisfactory to each of the Agent and the
Title Insurance Company, which maps or plats and the surveys
on which they are based shall be sufficient to delete any
standard printed survey exception contained in the applicable
title policy and be made in accordance with the Minimum
Standard Detail Requirements for Land Title Surveys jointly
established and adopted by the American Land Title Association
and the American Congress on Surveying and Mapping in 1992,
and, without limiting the generality of the foregoing, there
shall be surveyed and shown on such maps, plats or surveys the
following: (A) the locations on such sites of all the
buildings, structures and other improvements and the
established building setback lines; (B) the lines of streets
abutting the sites and width thereof; (C) all access and other
easements appurtenant to the sites necessary to use the sites;
(D) all roadways, paths, driveways, easements, encroachments
and overhanging projections and similar encumbrances affecting
the site, whether recorded, apparent from a physical
inspection of the sites or otherwise known to the surveyor;
(E) any encroachments on any adjoining property by the
building structures and improvements on the sites; and (F) if
the site is described as being on a filed map, a legend
relating the survey to said map; and
(ix) evidence satisfactory to the Agent that each of the
Mortgaged Properties, and the uses of the Mortgaged
Properties, are in compliance in all material respects with
all applicable laws, regulations and ordinances.
(f) Priority of Liens. The Agent shall have received
satisfactory evidence that (i) the Agent, on behalf of the Lenders,
holds a perfected, first priority Lien on all Collateral and (ii) none
of the Collateral is subject to any other Liens other than Permitted
Liens.
(g) Evidence of Insurance. Receipt by the Agent of copies of
insurance policies or certificates of insurance of the Credit Parties
evidencing liability and casualty
53
59
insurance meeting the requirements set forth in the Credit Documents,
including, but not limited to, naming the Agent as loss payee on behalf
of the Lenders.
(h) Equity Investment. Receipt by the Agent of evidence that a
cash equity investment of at least $20 million shall have been made in
the Parent by CGW (and that immediately thereafter the Parent shall
have contributed such amount, net of reasonable expenses payable to
third parties, in the Borrower in exchange for common Capital Stock of
the Borrower) on terms that are satisfactory to the Agent.
(i) Senior Debt. (i) The Borrower shall have entered into the
Senior Note Agreement, (ii) the Borrower shall have issued the Senior
Notes, (iii) the Agent shall have received a copy, certified by an
Executive Officer of the Borrower as true and complete, of the Senior
Note Agreement as originally executed and delivered, and no amendment
or modification thereof shall have been entered into on or prior to the
Closing Date which shall not have been approved by each of the Lenders
and (iv) the Borrower shall have received gross proceeds from the sale
of Senior Notes in an aggregate principal amount of at least $75
million.
(j) Government Consent. Receipt by the Agent of evidence that
all governmental, shareholder and material third party consents
(including Hart-Scott-Rodino clearance) and approvals necessary or
desirable in connection with the Acquisition and the related financings
and other transactions contemplated hereby and expiration of all
applicable waiting periods without any action being taken by any
authority that could restrain, prevent or impose any material adverse
conditions on the Acquisition or such other transactions or that could
seek or threaten any of the foregoing, and no law or regulation shall
be applicable which in the judgment of the Agent could have such
effect.
(k) Litigation. There shall not exist (i) any order, decree,
judgment, ruling or injunction which restrains the consummation of the
Acquisition in the manner contemplated by the Purchase Agreement or
(ii) any pending or threatened action, suit, investigation or
proceeding against a Credit Party that could have a Material Adverse
Effect.
(l) Other Indebtedness. Receipt by the Agent of evidence that,
after giving effect to the Acquisition, the Credit Parties shall have
no Funded Indebtedness other than (i) the Indebtedness under the Credit
Documents, (ii) the Indebtedness arising under the Senior Note
Agreement and the Senior Notes and (iii) Indebtedness described on
Schedule 8.1.
(m) Purchase Agreement. There shall not have been any material
modification, amendment, supplement or waiver to the Purchase Agreement
without the prior written consent of the Agent, including, but not
limited to, any modification, amendment, supplement or waiver relating
to the amount or type of consideration to be paid in connection with
the Acquisition and the contents of all disclosure schedules and
exhibits, and the Acquisition shall have been consummated in accordance
with the terms of the
54
60
Purchase Agreement (without waiver of any conditions precedent to the
obligations of the buyer thereunder) and the purchase price (including
assumed indebtedness and fees and expenses) payable by the buyer
pursuant thereto shall not exceed $87 million. The Agent shall have
received a final Purchase Agreement, together with all exhibits and
schedules thereto, certified by an Executive Officer of the Borrower.
(n) Officer's Certificates. The Agent shall have received a
certificate or certificates executed by an Executive Officer of the
Borrower as of the Closing Date stating that (A) each Credit Party is
in compliance with all existing financial obligations, (B) all
governmental, shareholder and third party consents and approvals, if
any, with respect to the Credit Documents and the transactions
contemplated thereby have been obtained, (C) no action, suit,
investigation or proceeding is pending or threatened in any court or
before any arbitrator or governmental instrumentality that purports to
affect any Credit Party or any transaction contemplated by the Credit
Documents, if such action, suit, investigation or proceeding could have
a Material Adverse Effect, (D) the transactions contemplated by the
Purchase Agreement have been consummated in accordance with the terms
thereof and (E) immediately after giving effect to this Credit
Agreement, the other Credit Documents and all the transactions
contemplated therein to occur on such date, (1) each of the Credit
Parties is Solvent, (2) no Default or Event of Default exists, (3) all
representations and warranties contained herein and in the other Credit
Documents are true and correct in all material respects, and (4) the
Credit Parties are in compliance with each of the financial covenants
set forth in Section 7.11.
(o) Fees and Expenses. Payment by the Credit Parties of all
fees and expenses owed by them to the Lenders and the Agent, including,
without limitation, payment to the Agent of the fees set forth in the
Fee Letter.
(p) Other. Receipt by the Lenders of such other documents,
instruments, agreements or information as reasonably requested by any
Lender, including, but not limited to, information regarding
litigation, tax, accounting, labor, insurance, pension liabilities
(actual or contingent), real estate leases, material contracts, debt
agreements, property ownership and contingent liabilities of the Credit
Parties.
5.2 CONDITIONS TO ALL EXTENSIONS OF CREDIT.
The obligations of each Lender to make, convert or extend any Loan and
of the Issuing Lender to issue or extend any Letter of Credit (including the
initial Loans and the initial Letter of Credit) are subject to satisfaction of
the following conditions in addition to satisfaction on the Closing Date of the
conditions set forth in Section 5.1:
(a) The Borrower shall have delivered (i) in the case of any
Loan, an appropriate Notice of Borrowing or Notice of
Extension/Conversion or (ii) in the case of any Letter of Credit, the
Issuing Lender shall have received an appropriate request for issuance
in accordance with the provisions of Section 2.2(b);
55
61
(b) The representations and warranties set forth in Section 6
shall, subject to the limitations set forth therein, be true and
correct in all material respects as of such date (except for those
which expressly relate to an earlier date and except for changes in
facts or circumstances that make such representations and warranties
untrue but that, in and of themselves, do no constitute, and/or have
not resulted in the occurrence of, a Default or Event of Default);
(c) There shall not have been commenced against any Credit
Party an involuntary case under any applicable bankruptcy, insolvency
or other similar law now or hereafter in effect, or any case,
proceeding or other action for the appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of such Person or for any substantial part of its Property or
for the winding up or liquidation of its affairs, and such involuntary
case or other case, proceeding or other action shall remain
undismissed, undischarged or unbonded;
(d) No Default or Event of Default shall exist and be
continuing either prior to or after giving effect thereto;
(e) No development or event which has had or could have a
Material Adverse Effect shall have occurred since the later of (i)
December 31, 1997 and (ii) the date of the most recent audited
financial statements delivered to the Agent and the Lenders in
accordance with the terms of Section 7.1(a); and
(f) Immediately after giving effect to the making of such Loan
(and the application of the proceeds thereof) or to the issuance of
such Letter of Credit, as the case may be, the sum of the aggregate
principal amount of outstanding Loans plus LOC Obligations outstanding
shall not exceed the Committed Amount.
The delivery of each Notice of Borrowing, each Notice of Extension/Conversion
and each request for a Letter of Credit pursuant to Section 2.2(b) shall
constitute a representation and warranty by the Borrower of the correctness of
the matters specified in subsections (b), (c), (d), (e) and (f) above.
SECTION 6
REPRESENTATIONS AND WARRANTIES
The Credit Parties hereby represent to the Agent and each Lender that:
6.1 FINANCIAL CONDITION.
(a) The audited consolidated and consolidating balance sheet
of the Credit Parties as of December 31, 1997 and the audited
consolidated and consolidating statements of earnings and statements of
cash flows for the years ended December 31, 1995, December 31,
56
62
1996 and December 31, 1997, have heretofore been furnished to each
Lender. Such financial statements (including the notes thereto) (i)
have been audited by Crowe Chizek, (ii) have been prepared in
accordance with GAAP consistently, applied throughout the periods
covered thereby and (iii) present fairly (on the basis disclosed in the
footnotes to such b financial statements) the consolidated financial
condition, results of operations and cash flows of the Credit Parties
as of such date and for such periods. The unaudited interim balance
sheets of the Credit Parties as at the end of, and the related
unaudited interim statements of earnings and of cash flows for, the
2-month period ended February 28, 1998, have heretofore been furnished
to each Lender. Such interim financial statements for each such
quarterly period, (i) have been prepared in accordance with GAAP
consistently applied throughout the periods covered thereby and (ii)
present fairly (on the basis disclosed in the footnotes to such
financial statements) the consolidated and consolidating financial
condition, results of operations and cash flows of the Credit Parties
as of such date and for such periods. During the period from December
31, 1997 to and including the Closing Date, there has been no sale,
transfer or other disposition by any Credit Party of any material part
of the business or property of the Credit Parties, taken as a whole,
and no purchase or other acquisition by any of them of any business or
property (including any capital stock of any other person) material in
relation to the consolidated financial condition of the Credit Parties,
taken as a whole, in each case, which, is not reflected in the
foregoing financial statements or in the notes thereto and has not
otherwise been disclosed in writing to the Lenders on or prior to the
Closing Date.
(b) The pro forma consolidated balance sheet of the Credit
Parties as of the Closing Date giving effect to the Acquisition in
accordance with the terms of the Purchase Agreement and reflecting
estimated purchase price accounting adjustments, has heretofore been
furnished to each Lender. Such pro forma balance sheet is based upon
reasonable assumptions made known to the Lenders and upon information
not know to be incorrect or misleading in any material respect.
(c) The financial statements delivered to the Lenders pursuant
to Section 7.1(a) and (b), (i) have been prepared in accordance with
GAAP (except as may otherwise be permitted under Section 7.1(a) and
(b)) and (ii) present fairly (on the basis disclosed in the footnotes
to such financial statements) the consolidated and consolidating
financial condition, results of operations and cash flows of the Credit
Parties as of such date and for such periods.
6.2 NO MATERIAL CHANGE.
Since the later of (i) December 31, 1997 and (ii) the date of the most
recent audited financial statements delivered to the Agent and the Lenders in
accordance with the terms of Section 7.1(a), (a) there has been no development
or event relating to or affecting a Credit Party which has had or would be
reasonably likely to have a Material Adverse Effect and (b) except as otherwise
permitted under this Credit Agreement, no dividends or other distributions have
been declared, paid or made upon the Capital Stock in a Credit Party nor has any
of the Capital Stock in a Credit Party been redeemed, retired, purchased or
otherwise acquired for value.
57
63
6.3 ORGANIZATION AND GOOD STANDING.
Each of the Credit Parties (a) is duly organized, validly existing and
is in good standing under the laws of the jurisdiction of its incorporation or
organization, (b) has the corporate or other necessary power and authority, and
the legal right, to own and operate its property, to lease the property it
operates as lessee and to conduct the business in which it is currently engaged
and (c) is duly qualified as a foreign entity and in good standing under the
laws of each jurisdiction where its ownership, lease or operation of property or
the conduct of its business requires such qualification, other than, in the case
of clauses (a) and (c) of this Section 6.3, in such jurisdictions where the
failure to be so qualified and in good standing would be reasonably likely to
have a Material Adverse Effect.
6.4 POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.
Each of the Credit Parties has the corporate or other necessary power
and authority, and the legal right, to make, deliver and perform the Credit
Documents to which it is a party, and in the case of the Borrower, to obtain
extensions of credit hereunder, and has taken all necessary corporate action to
authorize the borrowings and other extensions of credit on the terms and
conditions of this Credit Agreement and to authorize the execution, delivery and
performance of the Credit Documents to which it is a party. No consent or
authorization of, filing with, notice to or other similar act by or in respect
of, any Governmental Authority or any other Person is required to be obtained or
made by or on behalf of any Credit Party in connection with the borrowings or
other extensions of credit hereunder or with the execution, delivery,
performance, validity or enforceability of the Credit Documents to which such
Credit Party is a party, except for (i) consents, authorizations, notices and
filings described in Schedule 6.4, all of which have been obtained or made or
have the status described in such Schedule 6.4 and (ii) filings to perfect the
Liens created by the Collateral Documents. This Credit Agreement has been, and
each other Credit Document to which any Credit Party is a party will be, duly
executed and delivered on behalf of the Credit Parties. This Credit Agreement
constitutes, and each other Credit Document to which any Credit Party is a party
when executed and delivered will constitute, a legal, valid and binding
obligation of such Credit Party enforceable against such party in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).
6.5 NO CONFLICTS.
Neither the execution and delivery of the Credit Documents, nor the
consummation of the transactions contemplated therein, nor performance of and
compliance with the terms and provisions thereof by such Credit Party will (a)
violate or conflict with any provision of its articles or certificate of
incorporation or bylaws or other organizational or governing documents of such
Person, (b) violate, contravene or materially conflict with any Requirement of
Law or any other law, regulation (including, without limitation, Regulation U or
Regulation X), order, writ,
58
64
judgment, injunction, decree or permit applicable to it, (c) violate, contravene
or conflict with contractual provisions of, or cause an event of default under,
any material indenture, loan agreement, mortgage, deed of trust, contract or
other agreement or instrument to which it is a party or by which it may be
bound, the violation of which could have a Material Adverse Effect, or (d)
result in or require the creation of any Lien (other than those contemplated in
or created in connection with the Credit Documents) upon or with respect to its
properties.
6.6 NO DEFAULT.
No Credit Party is in default in any material respect under any
contract, lease, loan agreement, indenture, mortgage, security agreement or
other agreement or obligation to which it is a party or by which any of its
properties is bound which default could have a Material Adverse Effect. No
Default or Event of Default has occurred or exists except as previously
disclosed in writing to the Lenders.
6.7 OWNERSHIP.
Each Credit Party is the owner of, and has good and marketable title
to, all of its respective assets and none of such assets is subject to any Lien
other than Permitted Liens.
6.8 INDEBTEDNESS.
Except as otherwise permitted under Section 8.1, the Credit Parties
have no Indebtedness.
6.9 LITIGATION.
Except as disclosed in Schedule 6.9, there are no actions, suits or
legal, equitable, arbitration or administrative proceedings, pending or, to the
knowledge of any Credit Party, threatened against any Credit Party which would
be reasonably likely to have a Material Adverse Effect.
6.10 TAXES.
Each Credit Party has filed, or caused to be filed, all material tax
returns (federal, state, local and foreign) required to be filed and paid (a)
all amounts of taxes shown thereon to be due (including interest and penalties)
and (b) all other taxes, fees, assessments and other governmental charges
(including mortgage recording taxes, documentary stamp taxes and intangibles
taxes) owing by it, except for such taxes (i) which are not yet delinquent or
(ii) that are being contested in good faith and by proper proceedings, and
against which adequate reserves are being maintained in accordance with GAAP. No
Credit Party is aware as of the Closing Date of any proposed tax assessments
against it or any other Credit Party.
59
65
6.11 COMPLIANCE WITH LAW.
Each Credit Party has complied in all material respects with all
applicable Requirements of Law and all other laws, rules, regulations, orders
and decrees (including without limitation Environmental Laws) applicable to it,
or to its properties, unless such failure to comply would not be reasonably
likely to have a Material Adverse Effect.
6.12 ERISA.
Except as would not be reasonably likely to have a Material Adverse
Effect:
(a) During the five-year period prior to the date on which
this representation is made or deemed made: (i) no ERISA Event has
occurred, and, to the best knowledge of the Credit Parties, no event or
condition has occurred or exists as a result of which any ERISA Event
could reasonably be expected to occur, with respect to any Plan; (ii)
no "accumulated funding deficiency," as such term is defined in Section
302 of ERISA and Section 412 of the Code, whether or not waived, has
occurred with respect to any Plan; (iii) each Plan has been maintained,
operated, and funded in compliance with its own terms and in material
compliance with the provisions of ERISA, the Code, and any other
applicable federal or state laws; and (iv) no lien in favor of the PBGC
or a Plan has arisen or is reasonably likely to arise on account of any
Plan.
(b) The actuarial present value of all "benefit liabilities"
(as defined in Section 4001(a)(16) of ERISA), whether or not vested,
under each Single Employer Plan, as of the last annual valuation date
prior to the date on which this representation is made or deemed made
(determined, in each case, in accordance with Financial Accounting
Standards Board Statement 87, utilizing the actuarial assumptions used
in such Plan's most recent actuarial valuation report), did not exceed
as of such valuation date the fair market value of the assets of such
Plan.
(c) Neither any Credit Party nor any ERISA Affiliate has
incurred, or, to the best knowledge of the Credit Parties, could be
reasonably expected to incur, any withdrawal liability under ERISA to
any Multiemployer Plan or Multiple Employer Plan. Neither any Credit
Party nor any ERISA Affiliate would become subject to any withdrawal
liability under ERISA if any Credit Party or any ERISA Affiliate were
to withdraw completely from all Multiemployer Plans and Multiple
Employer Plans as of the valuation date most closely preceding the date
on which this representation is made or deemed made. Neither any Credit
Party nor any ERISA Affiliate has received any notification that any
Multiemployer Plan is in reorganization (within the meaning of Section
4241 of ERISA), is insolvent (within the meaning of Section 4245 of
ERISA), or has been terminated (within the meaning of Title IV of
ERISA), and no Multiemployer Plan is, to the best knowledge of the
Credit Parties, reasonably expected to be in reorganization, insolvent,
or terminated.
(d) No prohibited transaction (within the meaning of Section
406 of ERISA or Section 4975 of the Code) or breach of fiduciary
responsibility has occurred with respect to a Plan which has subjected
or may subject any Credit Party or any ERISA Affiliate to
60
66
any liability under Sections 406, 409, 502(i), or 502(l) of ERISA or
Section 4975 of the Code, or under any agreement or other instrument
pursuant to which any Credit Party or any ERISA Affiliate has agreed or
is required to indemnify any Person against any such liability.
(e) Neither any Credit Party nor any ERISA Affiliates has any
material liability with respect to "expected post-retirement benefit
obligations" within the meaning of the Financial Accounting Standards
Board Statement 106. Each Plan which is a welfare plan (as defined in
Section 3(1) of ERISA) to which Sections 601-609 of ERISA and Section
4980B of the Code apply has been administered in compliance in all
material respects of such sections.
(f) Neither the execution and delivery of this Credit
Agreement nor the consummation of the financing transactions
contemplated thereunder will involve any transaction which is subject
to the prohibitions of Sections 404, 406 or 407 of ERISA or in
connection with which a tax could be imposed pursuant to Section 4975
of the Code. The representation by the Credit Parties in the preceding
sentence is made in reliance upon and subject to the accuracy of the
Lenders' representation in Section 11.15 with respect to their source
of funds and is subject, in the event that the source of the funds used
by the Lenders in connection with this transaction is an insurance
company's general asset account, to the application of Prohibited
Transaction Class Exemption 95-60, 60 Fed. Reg. 35,925 (1995),
compliance with the regulations issued under Section 401(c)(1)(A) of
ERISA, or the issuance of any other prohibited transaction exemption or
similar relief, to the effect that assets in an insurance company's
general asset account do not constitute assets of an "employee benefit
plan" within the meaning of Section 3(3) of ERISA of a "plan" within
the meaning of Section 4975(e)(1) of the Code.
6.13 SUBSIDIARIES.
Set forth on Schedule 6.13 is a complete and accurate list of all
Subsidiaries of each Credit Party as of the Closing Date. Information on
Schedule 6.13 includes jurisdiction of incorporation, the number of shares of
each class of Capital Stock outstanding, the number and percentage of
outstanding shares of each class owned (directly or indirectly) by such Credit
Party; and the number and effect, if exercised, of all outstanding options,
warrants, rights of conversion or purchase and all other similar rights with
respect thereto. The outstanding Capital Stock of all such Subsidiaries is
validly issued, fully paid and non-assessable and is owned by each such Credit
Party, directly or indirectly, free and clear of all Liens (other than those
arising under or contemplated in connection with the Credit Documents). Other
than as set forth in Schedule 6.13, no Credit Party has outstanding any
securities convertible into or exchangeable for its Capital Stock nor does any
such Person have outstanding any rights to subscribe for or to purchase or any
options for the purchase of, or any agreements providing for the issuance
(contingent or otherwise) of, or any calls, commitments or claims of any
character relating to its Capital Stock. Schedule 6.13 may be updated from time
to time by the Borrower by giving written notice thereof to the Agent.
61
67
6.14 GOVERNMENTAL REGULATIONS, ETC.
(a) No part of the Letters of Credit or proceeds of the Loans
will be used, directly or indirectly, for the purpose of purchasing or
carrying any "margin stock" within the meaning of Regulation G or
Regulation U, or for the purpose of purchasing or carrying or trading
in any securities. If requested by any Lender or the Agent, the
Borrower will furnish to the Agent and each Lender a statement to the
foregoing effect in conformity with the requirements of FR Form U-1
referred to in Regulation U. No indebtedness being reduced or retired
out of the proceeds of the Loans was or will be incurred for the
purpose of purchasing or carrying any margin stock within the meaning
of Regulation U or any "margin security" within the meaning of
Regulation T. "Margin stock" within the meaning of Regulation U does
not constitute more than 25% of the value of the consolidated assets of
the Credit Parties. None of the transactions contemplated by this
Credit Agreement (including, without limitation, the direct or indirect
use of the proceeds of the Loans) will violate or result in a violation
of the Securities Act of 1933, as amended, or the Securities Exchange
Act of 1934, as amended, or regulations issued pursuant thereto, or
Regulation G, T, U or X.
(b) No Credit Party is subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act or the
Investment Company Act of 1940, each as amended. In addition, no Credit
Party is (i) an "investment company" registered or required to be
registered under the Investment Company Act of 1940, as amended, and is
not controlled by such a company, or (ii) a "holding company", or a
"subsidiary company" of a "holding company", or an "affiliate" of a
"holding company" or of a "subsidiary" of a "holding company", within
the meaning of the Public Utility Holding Company Act of 1935, as
amended.
(c) No director, executive officer or principal shareholder of
any Credit Party is a director, executive officer or principal
shareholder of any Lender. For the purposes hereof the terms
"director", "executive officer" and "principal shareholder" (when used
with reference to any Lender) have the respective meanings assigned
thereto in Regulation O issued by the Board of Governors of the Federal
Reserve System.
(d) Each Credit Party has obtained and holds in full force and
effect, all franchises, licenses, permits, certificates,
authorizations, qualifications, accreditations, easements, rights of
way and other rights, consents and approvals which are necessary for
the ownership of its respective Property and to the conduct of its
respective businesses as presently conducted, except where the failure
to hold the same would not be reasonably likely to have a Material
Adverse Effect.
(e) No Credit Party is in violation of any applicable statute,
regulation or ordinance of the United States of America, or of any
state, city, town, municipality, county or any other jurisdiction, or
of any agency thereof (including without limitation, environmental laws
and regulations), which violation could have a Material Adverse Effect.
62
68
(f) Each Credit Party is current with all material reports and
documents, if any, required to be filed with any state or federal
securities commission or similar agency and is in full compliance in
all material respects with all applicable rules and regulations of such
commissions, except where the failure to comply would not be reasonably
likely to have a Material Adverse Effect.
6.15 PURPOSE OF LOANS AND LETTERS OF CREDIT.
The proceeds of the Loans hereunder shall be used solely by the
Borrower to provide for ongoing general corporate purposes of the Borrower and
its Subsidiaries. The Letters of Credit shall be used only for or in connection
with appeal bonds, reimbursement obligations arising in connection with surety,
reclamation and industrial development bonds, reinsurance, domestic or
international trade transactions and obligations not otherwise aforementioned
relating to transactions entered into by the applicable account party in the
ordinary course of business.
6.16 ENVIRONMENTAL MATTERS.
Except as disclosed and described in Schedule 6.16 attached hereto and
except as to matters which are not reasonably likely to have a Material Adverse
Effect:
(a) Each of the facilities and properties owned, leased or
operated by the Credit Parties (the "Properties") and all operations at
the Properties are in material compliance with all applicable
Environmental Laws, and there is no material violation of any
Environmental Law with respect to the Properties or the businesses
operated by the Credit Parties (the "Businesses"), and there are no
conditions relating to the Businesses or Properties that are reasonably
likely give rise to liability under any applicable Environmental Laws.
(b) None of the Properties contains, or, to best knowledge of
the Credit Parties, has contained prior to such time as a Credit Party
first became an owner, lessee or operator thereof, any Materials of
Environmental Concern at, on or under the Properties in amounts or
concentrations that constitute or constituted a material violation of,
or could give rise to material liability under, any applicable
Environmental Law.
(c) No Credit Party has received any written notice of or from
any Governmental Authority regarding, any material violation, alleged
violation, non-compliance, liability or potential liability regarding
environmental matters or compliance with applicable Environmental Laws
with regard to any of the Properties or the Businesses, nor does any
Credit Party have knowledge or reason to believe that any such notice
will be received or is being threatened.
(d) Materials of Environmental Concern have not been
transported or disposed of from the Properties, or generated, treated,
stored or disposed of at, on or under any of the Properties or any
other location, in each case by or on behalf of any Credit Party in
63
69
violation of, or in a manner that is reasonably likely to give rise to
liability under, any applicable Environmental Law.
(e) No judicial proceeding or governmental or administrative
action is pending or, to the best knowledge of any Credit Party,
threatened, under any Environmental Law to which any Credit Party is or
will be named as a party, nor are there any consent decrees or other
decrees, consent orders, administrative orders or other orders, or
other administrative or judicial requirements outstanding under any
applicable Environmental Law with respect to the Credit Parties, the
Properties or the Businesses.
(f) There has been no release, or threat of release, of
Materials of Environmental Concern at or from the Properties, or
arising from or related to the operations (including, without
limitation, disposal) of any Credit Party in connection with the
Properties or otherwise in connection with the Businesses, in material
violation of or in amounts or in a manner that could give rise to
liability under Environmental Laws.
6.17 INTELLECTUAL PROPERTY.
Each Credit Party owns, or has the legal right to use, all trademarks,
tradenames, copyrights, technology, know-how and processes (the "Intellectual
Property") necessary for each of them to conduct its business as currently
conducted except for those the failure to own or have such legal right to use
could not have a Material Adverse Effect. Set forth on Schedule 6.17 is a list
of all Intellectual Property owned by each Credit Party or that any Credit Party
has the right to use. Except as provided on Schedule 6.17, no claim has been
asserted and is pending by any Person challenging or questioning the use of any
such Intellectual Property or the validity or effectiveness of any such
Intellectual Property, nor does any Credit Party know of any such claim, and to
the Credit Parties' knowledge the use of such Intellectual Property by any
Credit Party does not infringe on the rights of any Person, except for such
claims and infringements that, in the aggregate, could not have a Material
Adverse Effect.
6.18 SOLVENCY.
Each Credit Party is and, after consummation of the transactions
contemplated by this Credit Agreement (including without limitation the
Acquisition), will be Solvent.
6.19 INVESTMENTS.
All Investments of each Credit Party are Permitted Investments.
6.20 LOCATION OF COLLATERAL.
Set forth on Schedule 6.20(a) is a list of all Mortgaged Properties as
of the Closing Date with street address, county and state where located. Set
forth on Schedule 6.20(b) is a list of all locations as of the Closing Date
where any tangible personal property of a Credit Party is located, including
county and state where located. Set forth on Schedule 6.20(c) is a list of all
locations as
64
70
of the Closing Date where any Credit Party maintains its chief executive office
and/or principal place of business.
6.21 DISCLOSURE.
Neither this Credit Agreement nor any financial statements delivered to
the Lenders nor any other document, certificate or statement furnished to the
Lenders by or on behalf of any Credit Party in connection with the transactions
contemplated hereby contained at the time furnished any untrue statement of a
material fact or omitted at the time furnished to state a material fact
necessary in order to make the statements contained therein or herein not
misleading.
6.22 NO BURDENSOME RESTRICTIONS.
No Credit Party is a party to any agreement or instrument or subject to
any other obligation or any charter or corporate restriction or any provision of
any applicable law, rule or regulation which, individually or in the aggregate,
could have a Material Adverse Effect.
6.23 BROKERS' FEES.
No Credit Party has any obligation to any Person in respect of any
finder's, broker's, investment banking or other similar fee in connection with
any of the transactions contemplated under the Credit Documents.
6.24 LABOR MATTERS.
Except for that Basic Labor Agreement dated as of August 8, 1995, there
are no collective bargaining agreements or Multiemployer Plans covering the
employees of a Credit Party as of the Closing Date and none of the Credit
Parties has suffered any strikes, walkouts, work stoppages or other material
labor difficulty within the last five years.
6.25 NATURE OF BUSINESS.
As of the Closing Date, the Credit Parties are engaged in the business
of manufacturing and sellng silicon metals products, microsilica, silicon dross
and silicon scrap.
6.26 REPRESENTATIONS AND WARRANTIES FROM PURCHASE AGREEMENT.
As of the Closing Date, each of the representations and warranties made
in the Purchase Agreement by each of the parties thereto is true and correct in
all material respects, except for matters that, in the aggregate, could not have
a Material Adverse Effect.
6.27 YEAR 2000 COMPLIANCE.
Each of the Credit Parties has conducted a review and assessment of its
computer applications with respect to the "year 2000 problem" (that is, the risk
that computer applications
65
71
may not be able to properly perform date-sensitive functions after December 31,
1999) and, based on that review and inquiry, the Credit Parties believe that the
year 2000 problem will not result in a material adverse change in its business
condition (financial or otherwise), operations, business, assets, liabilities or
prospects of the Credit Parties taken as a whole, or on the ability of any
Credit Party to perform any material obligation under the Credit Documents to
which it is a party.
SECTION 7
AFFIRMATIVE COVENANTS
Each Credit Party hereby covenants and agrees that, so long as this
Credit Agreement is in effect or any amounts payable hereunder or under any
other Credit Document shall remain outstanding, and until all of the Commitments
hereunder shall have terminated:
7.1 INFORMATION COVENANTS.
The Borrower will furnish, or cause to be furnished, to the Agent and
each of the Lenders:
(a) Annual Financial Statements. As soon as available, and in
any event within 90 days after the close of each fiscal year of the
Credit Parties (other than the fourth fiscal quarter, in which case 90
days after the end thereof), a consolidated balance sheet and income
statement of the Credit Parties, as of the end of such fiscal year,
together with related consolidated statements of operations and
retained earnings and of cash flows for such fiscal year, setting forth
in comparative form consolidated figures for the preceding fiscal year,
all such financial information described above to be in a form
satisfying the Securities and Exchange Commission requirements for a
10-K filing or otherwise in reasonable form and detail and audited by
independent certified public accountants of recognized national
standing reasonably acceptable to the Agent and whose opinion shall be
to the effect that such financial statements have been prepared in
accordance with GAAP (except for changes with which such accountants
concur) and shall not be limited as to the scope of the audit or
qualified as to the status of the Credit Parties as a going concern.
(b) Quarterly Financial Statements. As soon as available, and
in any event within 45 days after the end of each fiscal quarter of the
Credit Parties, a consolidated balance sheet and income statement of
the Credit Parties as of the end of such fiscal quarter, together with
related consolidated statements of operations and retained earnings and
of cash flows for such fiscal quarter, in each case setting forth in
comparative form consolidated figures for the corresponding period of
the preceding fiscal year, all such financial information described
above to be in a form satisfying the Securities and Exchange Commission
requirements for a 10-Q filing or otherwise in reasonable form and
detail and reasonably acceptable to the Agent, and accompanied by a
certificate of an Executive Officer of the Borrower to the effect that
such quarterly financial statements fairly present in all material
respects the financial condition of the Credit Parties and have
66
72
been prepared in accordance with GAAP, subject to changes resulting
from audit, normal year-end audit adjustments and the absence of notes.
(c) Officer's Certificate. At the time of delivery of the
financial statements provided for in Sections 7.1(a) and 7.1(b) above,
a certificate of an Executive Officer of the Borrower substantially in
the form of Exhibit 7.1(c), (i) demonstrating compliance with the
financial covenants contained in Section 7.11 by calculation thereof as
of the end of each such fiscal period and (ii) stating that, to his
knowledge, no Default or Event of Default exists, or if any Default or
Event of Default does exist, specifying the nature and extent thereof
and what action the Credit Parties propose to take with respect
thereto.
(d) Annual Business Plan and Budgets. At least 30 days prior
to the end of each fiscal year of the Borrower, beginning with the
fiscal year ending December 31, 1998, an annual business plan and
budget of the Credit Parties containing, among other things, pro forma
financial statements for the next fiscal year.
(e) Compliance With Certain Provisions of the Credit
Agreement. Within 90 days after the end of each fiscal year of the
Borrower, a certificate containing information regarding the amount of
all Asset Dispositions that were made during the prior fiscal year.
(f) Accountant's Certificate. Within the period for delivery
of the annual financial statements provided in Section 7.1(a), a
certificate of the accountants conducting the annual audit stating that
they have reviewed this Credit Agreement and stating further whether,
in the course of their audit, they have become aware of any Default or
Event of Default and, if any such Default or Event of Default exists,
specifying the nature and extent thereof.
(g) Auditor's Reports. Promptly upon receipt thereof, a copy
of any other report or "management letter" submitted by independent
accountants to any Credit Party in connection with any annual, interim
or special audit of the books of such Person.
(h) Reports. Promptly upon transmission or receipt thereof,
(i) copies of any filings and registrations with, and reports to or
from, the Securities and Exchange Commission, or any successor agency,
and copies of all financial statements, proxy statements, notices and
reports as any Credit Party shall send to its shareholders or to a
holder of any Indebtedness owed by any Credit Party in its capacity as
such a holder and (ii) upon the request of the Agent, all reports and
written information to and from the United States Environmental
Protection Agency, or any state or local agency responsible for
environmental matters, the United States Occupational Health and Safety
Administration, or any state or local agency responsible for health and
safety matters, or any successor agencies or authorities concerning a
violation which is reasonably likely to have a Material Adverse Effect.
(i) Notices. Upon obtaining knowledge thereof, the Borrower
will give written notice to the Agent immediately of (i) the occurrence
of an event or condition
67
73
consisting of a Default or Event of Default, specifying the nature and
existence thereof and what action the Credit Parties propose to take
with respect thereto, and (ii) the occurrence of any of the following
with respect to any Credit Party (A) the pendency or commencement of
any litigation, arbitral or governmental proceeding against such Person
which if adversely determined is reasonably likely to have a Material
Adverse Effect, (B) the institution of any proceedings against such
Person with respect to, or the receipt of notice by such Person of
potential liability or responsibility for violation, or alleged
violation of any applicable federal, state or local law, rule or
regulation, including but not limited to, Environmental Laws, the
violation of which is reasonably likely to have a Material Adverse
Effect, or (C) any notice or determination concerning the imposition of
any withdrawal liability by a Multiemployer Plan against such Person or
any ERISA Affiliate, the determination that a Multiemployer Plan is, or
is expected to be, in reorganization within the meaning of Title IV of
ERISA or the termination of any Plan.
(j) ERISA. Upon obtaining knowledge thereof, the Borrower will
give written notice to the Agent promptly (and in any event within five
Business Days) of: (i) of any event or condition, including, but not
limited to, any Reportable Event, that constitutes, or might reasonably
lead to, an ERISA Event which ERISA Event would have or would be
reasonably expected to have a Material Adverse Effect; (ii) with
respect to any Multiemployer Plan, the receipt of notice as prescribed
in ERISA or otherwise of any withdrawal liability assessed against the
Borrower or any of its ERISA Affiliates, or of a determination that any
Multiemployer Plan is in reorganization or insolvent (both within the
meaning of Title IV of ERISA) which in either case would have or would
be reasonably expected to have a Material Adverse Effect; (iii) the
failure to make full payment on or before the due date (including
extensions) thereof of all amounts which any Credit Party or any ERISA
Affiliate is required to contribute to each Plan pursuant to its terms
and as required to meet the minimum funding standard set forth in ERISA
and the Code with respect thereto which would have or would be
reasonably expected to have a Material Adverse Effect; or (iv) any
event has occurred or failed to occur with respect to a Single Employer
Plan, Multiemployer Plan or Multiple Employer Plan sponsored,
maintained or contributed to by an ERISA Affiliate of any Credit Party
which would have or would be reasonably expected to have a Material
Adverse Effect; or (v) any change in the funding status of any Plan
that would have or would be reasonably expected to have a Material
Adverse Effect, together with a description of any such event or
condition or a copy of any such notice and a statement by an Executive
Officer of the Borrower briefly setting forth the details regarding
such event, condition, or notice, and the action, if any, which has
been or is being taken or is proposed to be taken by the Credit Parties
with respect thereto. Promptly upon request, the Credit Parties shall
furnish the Agent and the Lenders with such additional information
concerning any Plan as may be reasonably requested, including, but not
limited to, copies of each annual report/return (Form 5500 series), as
well as all schedules and attachments thereto required to be filed with
the Department of Labor and/or the Internal Revenue Service pursuant to
ERISA and the Code, respectively, for each "plan year" (within the
meaning of Section 3(39) of ERISA).
68
74
(k) Environmental.
(i) Upon the reasonable written request of the Agent
from time to time whenever the Agent shall have reason to
believe that the nature or extent of the presence of any
Materials of Environmental Concern shall have materially and
adversely changed since the later of (i) the Closing Date or
(ii) the most recent report delivered pursuant to this Section
7.1(k) (in any event not to be given more frequently than once
during any single calendar year), the Credit Parties will
furnish or cause to be furnished to the Agent, at the
Borrower's expense, a report of an environmental assessment of
reasonable scope, form and depth, (including, where
appropriate, invasive soil or groundwater sampling) by a
consultant reasonably acceptable to the Agent and the Borrower
as to the nature and extent of the presence of any Materials
of Environmental Concern on any Properties (as defined in
Section 6.16) and as to the compliance by any Credit Party
with Environmental Laws at such Properties; provided, however,
that the Agent shall consult with the Borrower as to the
appropriated type of assessment prior to the request of the
Agent. If the Credit Parties fail to deliver such an
environmental report within seventy-five (75) days after
receipt of such written request then the Agent may arrange for
same, and the Credit Parties hereby grant to the Agent and
their representatives access to the Properties to reasonably
undertake such an assessment (including, where appropriate,
invasive soil or groundwater sampling). The reasonable cost of
any assessment arranged for by the Agent pursuant to this
provision will be payable by the Borrower on demand and added
to the obligations secured by the Collateral Documents.
(ii) The Credit Parties will conduct and complete in
all material respects all investigations, studies, sampling,
and testing and all remedial, removal, and other actions
necessary to address all Materials of Environmental Concern
on, from or affecting any of the Properties to the extent
necessary to be in compliance with all applicable
Environmental Laws and with the validly issued orders and
directives of all Governmental Authorities with jurisdiction
over such Properties to the extent any failure is reasonably
likely to have a Material Adverse Effect.
(l) Additional Patents and Trademarks. At the time of delivery
of the financial statements and reports provided for in Section 7.1(a),
a report signed by an Executive Officer or treasurer of the Borrower
setting forth (i) a list of registration numbers for all patents,
trademarks, service marks, tradenames and copyrights awarded to any
Credit Party since the last day of the immediately preceding fiscal
year and (ii) a list of all patent applications, trademark
applications, service mark applications, trade name applications and
copyright applications submitted by any Credit Party since the last day
of the immediately preceding fiscal year and the status of each such
application, all in such form as shall be reasonably satisfactory to
the Agent.
69
75
(m) Other Information. With reasonable promptness upon any
such request, such other information regarding the business, properties
or financial condition of any Credit Party as the Agent or the Required
Lenders may reasonably request.
7.2 PRESERVATION OF EXISTENCE AND FRANCHISES.
Except as a result of or in connection with a dissolution, merger or
disposition of a Subsidiary permitted under Section 8.4 or Section 8.5, each
Credit Party will, and will cause each of its Subsidiaries to, do all things
necessary to preserve and keep in full force and effect its existence, rights,
franchises and authority.
7.3 BOOKS AND RECORDS.
Each Credit Party will, and will cause each of its Subsidiaries to,
keep complete and accurate books and records of its transactions in accordance
with good accounting practices on the basis of GAAP (including the establishment
and maintenance of appropriate reserves).
7.4 COMPLIANCE WITH LAW.
Each Credit Party will, and will cause each of its Subsidiaries to,
comply with all applicable laws, rules, regulations and orders, and all
applicable restrictions imposed by all Governmental Authorities, applicable to
it and its Property if noncompliance with any such law, rule, regulation, order
or restriction is reasonably likely to have a Material Adverse Effect.
7.5 PAYMENT OF TAXES AND OTHER INDEBTEDNESS.
Each Credit Party will, and will cause each of its Subsidiaries to, pay
and discharge (a) all taxes, assessments and governmental charges or levies
imposed upon it, or upon its income or profits, or upon any of its properties,
before they shall become delinquent, (b) all lawful claims (including claims for
labor, materials and supplies) which, if unpaid, might give rise to a Lien upon
any of its properties, and (c) except as prohibited hereunder, all of its other
Indebtedness as it shall become due; provided, however, that no Credit Party
shall be required to pay any such tax, assessment, charge, levy, claim or
Indebtedness which is being contested in good faith by appropriate proceedings
and as to which adequate reserves therefor have been established in accordance
with GAAP, unless the failure to make any such payment (i) could give rise to an
immediate right to foreclose on a Lien securing such amounts or (ii) could have
a Material Adverse Effect.
7.6 INSURANCE.
(a) Each Credit Party will, and will cause each of its
Subsidiaries to, at all times maintain in full force and effect
insurance (including worker's compensation insurance, liability
insurance, casualty insurance and business interruption insurance) in
such amounts, covering such risks and liabilities and with such
deductibles or self-insurance retentions as are in accordance with
normal industry practice (or as otherwise
7-
76
required by the Collateral Documents). The Agent shall be named as loss
payee or mortgagee, as its interest may appear, and/or additional
insured with respect to any such insurance providing coverage in
respect of any Collateral, and each provider of any such insurance
shall agree, by endorsement upon the policy or policies issued by it or
by independent instruments furnished to the Agent, that it will give
the Agent thirty (30) days prior written notice before any such policy
or policies shall be altered or canceled, and that no act or default of
any Credit Party or any other Person shall affect the rights of the
Agent or the Lenders under such policy or policies. The present
insurance coverage of the Credit Parties is outlined as to carrier,
policy number, expiration date, type and amount on Schedule 7.6, and
the Agent and the Lenders hereby acknowledge that, as of the Closing
Date, such insurance coverage is acceptable.
(b) In case of any loss, damage to or destruction of the
Collateral of any Credit Party or any part thereof in respect of which
a Credit Party shall receive any proceeds of such insurance in a net
amount in excess of $10,000,000, such Credit Party shall promptly give
written notice thereof to the Agent generally describing the nature and
extent of such damage or destruction. In case of any loss, damage to or
destruction of the Collateral of any Credit Party or any part thereof,
such Credit Party, at such Credit Party's cost and expense, will
promptly repair or replace the Collateral of such Credit Party so lost,
damaged or destroyed in a manner reasonably satisfactory to the Agent.
7.7 MAINTENANCE OF PROPERTY.
Each Credit Party will, and will cause each of its Subsidiaries to,
maintain and preserve its properties and equipment material to the conduct of
its business in good repair, working order and condition, normal wear and tear
and casualty and condemnation excepted, and will make, or cause to be made, in
such properties and equipment from time to time all repairs, renewals,
replacements, extensions, additions, betterments and improvements thereto as may
be needed or proper, to the extent and in the manner customary for companies in
similar businesses.
7.8 PERFORMANCE OF OBLIGATIONS.
Each Credit Party will, and will cause each of its Subsidiaries to,
perform in all material respects all of its obligations under the terms of all
material agreements, indentures, mortgages, security agreements or other debt
instruments to which it is a party or by which it is bound if the failure to so
perform would cause or be reasonably expected to cause a Material Adverse Effect
.
7.9 USE OF PROCEEDS.
The Borrower will use the proceeds of the Loans and will use the
Letters of Credit solely for the purposes set forth in Section 6.15.
71
77
7.10 AUDITS/INSPECTIONS.
Upon reasonable written notice and during normal business hours, each
Credit Party will permit representatives appointed by the Agent, including,
without limitation, independent accountants, agents, attorneys, and appraisers
to visit and inspect its property, including its books and records, its accounts
receivable and inventory, its facilities and its other business assets, and to
make photocopies or photographs thereof and to write down and record any
information such representative obtains and shall permit the Agent or its
representatives to investigate and verify the accuracy of information provided
to the Lenders and to discuss all such matters with the officers, employees and
representatives of such Person. The Agent shall notify the Lenders prior to any
visit, inspection, investigation or discussion with accountants pursuant to this
Section 7.10, and the Credit Parties agree that any Lender shall be entitled to
accompany the Agent (or its duly appointed representative(s)) in connection with
any such visit, inspection, investigation or discussion with accountants. The
Credit Parties agree that the Agent, and its representatives, may conduct an
annual audit of the Collateral, at the expense of the Borrower.
7.11 FINANCIAL COVENANTS.
(a) Interest Coverage Ratio. The Interest Coverage Ratio, as
of the last day of each fiscal quarter of the Credit Parties, shall be
greater than or equal to:
(i) for the period from June 30, 1998 to and
including December 30, 2001, 1.50 to 1.00;
(ii) for the period from December 31, 2001 and at all
times thereafter, 2.25 to 1.00.
(b) Net Leverage Ratio. The Credit Parties shall cause the Net
Leverage Ratio, as of the last day of each fiscal quarter of the Credit
Parties, to be less than or equal to:
(i) for the period from June 30, 1998 to and
including December 30, 1998, 5.50 to 1.00;
(ii) for the period from December 31, 1998 to and
including December 30, 2001, 6.00 to 1.00;
(iii) for the period from December 31, 2001 to and
including December 30, 2002, 3.50 to 1.00; and
(iv) for the period from December 31, 2002 and at
all times thereafter, 3.00 to 1.00.
(c) Consolidated Net Worth. At all times the Consolidated Net
Worth of the Borrower shall be greater than or equal to the sum of
$18,000,000, increased on a cumulative basis as of the end of each
fiscal quarter of the Credit Parties, commencing
72
78
with the fiscal quarter ending June 30, 1998 by an amount equal to 50%
of Consolidated Net Income (to the extent positive) for the fiscal
quarter then ended.
7.12 ADDITIONAL CREDIT PARTIES.
As soon as practicable and in any event within 30 days after any Person
becomes a Subsidiary of any Credit Party, the Borrower shall provide the Agent
with written notice thereof setting forth information in reasonable detail
describing all of the assets of such Person and shall (a) cause such Person to
execute a Joinder Agreement in substantially the same form as Exhibit 7.12, (b)
cause 100% of the Capital Stock of such Person to be delivered to the Agent
(together with undated stock powers signed in blank) and pledged to the Agent
pursuant to an appropriate pledge agreement(s) in substantially the form of the
Pledge Agreement and otherwise in form acceptable to the Agent and (c) cause
such Person to (i) if such Person owns or leases any real property located in
the United States of America or deemed to be material by the Agent or the
Required Lenders in its or their sole reasonable discretion, deliver to the
Agent with respect to such real property documents, instruments and other items
of the types required to be delivered pursuant to Section 5.1(e) all in form,
content and scope reasonably satisfactory to the Agent and (ii) deliver such
other documentation as the Agent may reasonably request in connection with the
foregoing, including, without limitation, appropriate UCC-1 financing
statements, real estate title insurance policies, environmental reports,
landlord's waivers, certified resolutions and other organizational and
authorizing documents of such Person, favorable opinions of counsel to such
Person (which shall cover, among other things, the legality, validity, binding
effect and enforceability of the documentation referred to above and the
perfection of the Agent's liens thereunder) and other items of the types
required to be delivered pursuant to Section 5.1(b), (c), (d) and (e), all in
form, content and scope reasonably satisfactory to the Agent.
7.13 PLEDGED ASSETS.
Each Credit Party will, and will cause each of its Subsidiaries to,
cause (i) all of its owned real and personal property located in the United
States, (ii) to the extent deemed to be material by the Agent or the Required
Lenders in its or their sole reasonable discretion, all of its other owned real
and personal property and (iii) all of its leased real property located in the
United States to be subject at all times to first priority, perfected and, in
the case of real property (whether leased or owned), title insured Liens in
favor of the Agent pursuant to the terms and conditions of the Collateral
Documents or, with respect to any such property acquired subsequent to the
Closing Date, such other additional security documents as the Agent shall
reasonably request. With respect to any real property (whether leased or owned)
located in the United States of America acquired by any direct or indirect
Subsidiary of the Borrower subsequent to the Closing Date, such Person will
cause to be delivered to the Agent with respect to such real property documents,
instruments and other items of the types required to be delivered pursuant to
Section 5.1(e) in form acceptable to the Agent. Without limiting the generality
of the above, the Credit Parties will cause 100% of the Capital Stock in the
Borrower and each of the other direct or indirect Subsidiaries of the Parent to
be subject at all times to a first priority, perfected Lien in favor of the
Agent pursuant to the terms and conditions of the Collateral Documents or such
other security documents as the Agent shall reasonably request.
73
79
If, subsequent to the Closing Date, a Credit Party shall (a) acquire
any intellectual property, securities, instruments, chattel paper or other
personal property required to be delivered to the Agent as Collateral hereunder
or under any of the Collateral Documents or (b) acquire or lease any real
property, the Borrower shall promptly (and in any event within three (3)
Business Days) after any Executive Officer of a Credit Party acquires knowledge
of same notify the Agent of same. Each Credit Party shall, and shall cause each
of its Subsidiaries to, take such action (including but not limited to the
actions set forth in Sections 5.1(d) and (e)) at its own expense as requested by
the Agent to ensure that the Agent has a first priority perfected Lien to secure
the Credit Party Obligations in (i) all owned real property and personal
property of the Credit Parties located in the United States, (ii) to the extent
deemed to be material by the Agent or the Required Lenders in its or their sole
reasonable discretion, all other owned real and personal property of the Credit
Parties and (iii) all leased real property located in the United States, subject
in each case only to Permitted Liens. Each Credit Party shall, and shall cause
each of its Subsidiaries to, adhere to the covenants regarding the location of
personal property as set forth in the Security Agreements.
SECTION 8
NEGATIVE COVENANTS
Each Credit Party hereby covenants and agrees that, so long as this
Credit Agreement is in effect or any amounts payable hereunder or under any
other Credit Document shall remain outstanding, and until all of the Commitments
hereunder shall have terminated:
8.1 INDEBTEDNESS.
The Credit Parties will not permit any Credit Party to contract,
create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness arising under this Credit Agreement and the
other Credit Documents;
(b) Indebtedness of the Borrower set forth in Schedule 8.1,
Indebtedness arising under the Senior Note Agreement and the Senior
Notes (and renewals, refinancings and extensions thereof, provided that
the principal amount of such Indebtedness as so renewed, refinanced or
extended shall not exceed in principal amount the principal balance
outstanding thereon at the time of such renewal, refinancing or
extension);
(c) purchase money Indebtedness (including Capital Leases or
Synthetic Leases) hereafter incurred by the Borrower to finance the
purchase of fixed assets provided that (i) the total of all such
Indebtedness shall not exceed
74
80
an aggregate principal amount of $5,000,000 at any one time outstanding
(including any such Indebtedness referred to in subsection (b) above);
(ii) such Indebtedness when incurred shall not exceed the purchase
price of the asset(s) financed; and (iii) no such Indebtedness shall be
refinanced for a principal amount in excess of the principal balance
outstanding thereon at the time of such refinancing;
(d) obligations of the Borrower in respect of Hedging
Agreements entered into in order to manage existing or anticipated
interest rate or exchange rate risks and not for speculative purposes;
(e) the incurrence by the Borrower or any of its Subsidiaries
of intercompany Indebtedness between or among the Borrower and any of
its Wholly Owned Subsidiaries; provided that (i) if the Borrower is the
obligor on such Indebtedness, such Indebtedness is expressly
subordinated to the prior payment in full in cash of all of the Credit
Party Obligations with respect to this Credit Agreement and (ii)(A) any
subsequent issuance or transfer of Capital Stock that results in any
such Indebtedness being held by a Person other than the Borrower or a
Subsidiary thereof and (B) any sale or other transfer of any such
Indebtedness to a Person that is not either the Borrower or a Wholly
Owned Subsidiary thereof shall be deemed, in each case, to constitute
an incurrence of such Indebtedness by the Borrower or such Subsidiary,
as the case may be, that was not permitted by this clause (e);
(f) the guarantee by the Borrower or a Subsidiary of the
Borrower of Indebtedness of the Borrower or a Subsidiary of the
Borrower that was permitted to be incurred by another provision of this
Section 8.1;
(g) Acquired Debt of a Subsidiary of the Borrower, which
Subsidiary was acquired after the Closing Date and which Acquired Debt
was in existence at the time of acquisition by the Borrower of such
Subsidiary, and not incurred in contemplation of such acquisition, if
such Acquired Debt is Non-Recourse Debt (except with respect to such
Subsidiary and its Subsidiaries) and such Acquired Debt for all such
Persons does not exceed an aggregate principal amount of $5,000,000 at
any one time outstanding;
(h) Indebtedness of the Borrower in the form of holdback notes
or deferred purchase price in connection with an in an amount not to
exceed an aggregate principal amount equal to the lesser of $5,000,000
or 20% of the purchase price paid by the Borrower and its Subsidiaries
for such acquisition;
(i) obligations in respect of performance bonds and completion
guarantees provided by the Borrower or any Subsidiary of the Borrower
in the ordinary course of business; and
(j) other Indebtedness in an aggregate principal amount (or
accreted value, as applicable) at any time outstanding, including all
Permitted Refinancing Indebtedness incurred to refund, refinance or
replace any Indebtedness incurred pursuant to this clause (j), not to
exceed an aggregate principal amount of $5,000,000 at any one time
outstanding.
75
81
8.2 LIENS.
The Credit Parties will not permit any Credit Party to contract,
create, incur, assume or permit to exist any Lien with respect to any of its
Property, whether now owned or after acquired, except for Permitted Liens.
8.3 NATURE OF BUSINESS.
The Credit Parties will not permit any Credit Party to engage in any
business other a Permitted Business.
8.4 CONSOLIDATION, MERGER, DISSOLUTION, ETC.
Except in connection with an Asset Disposition permitted by the terms
of Section 8.5, the Credit Parties will not permit any Credit Party to enter
into any transaction of merger or consolidation or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution); provided that,
notwithstanding the foregoing provisions of this Section 8.4, (a) the Borrower
may merge or consolidate with any of its Subsidiaries provided that the Borrower
shall be the continuing or surviving corporation, (b) any Credit Party other
than the Parent or the Borrower may merge or consolidate with any other Credit
Party other than the Parent or the Borrower and (c) any Wholly-Owned Subsidiary
of the Borrower may dissolve, liquidate or wind up its affairs at any time.
8.5 ASSET DISPOSITIONS.
The Credit Parties will not permit any Credit Party to make any Asset
Disposition (including, without limitation, any Sale and Leaseback Transaction)
other than Excluded Asset Dispositions unless (a) the consideration paid in
connection therewith is cash or Cash Equivalents, (b) if such transaction is a
Sale and Leaseback Transaction, such transaction is permitted by the terms of
Section 8.13, (c) such transaction does not involve the sale or other
disposition of a minority equity interest in any Credit Party, (d) the aggregate
net book value of all of the assets sold or otherwise disposed of by the Credit
Parties in all such transactions after the Closing Date shall not exceed
$10,000,000 and (e) no later than 5 days prior to such Asset Disposition, the
Agent and the Lenders shall have received a certificate of an Executive Officer
of the Borrower specifying the anticipated or actual date of such Asset
Disposition, briefly describing the assets to be sold or otherwise disposed of
and setting forth the net book value of such assets, the aggregate consideration
and the Net Cash Proceeds to be received for such assets in connection with such
Asset Disposition, and thereafter the Borrower shall, within the 6-month period
beginning 3 months prior to the consummation of such Asset Disposition (with
respect to any such Asset Disposition, the "Application Period"), apply (or
cause to be applied) an amount equal to the Net Cash Proceeds of such Asset
Disposition to (i) the purchase, acquisition or, in the case of improvements to
real property, construction of Eligible Assets or (ii) to the prepayment of the
Loans in accordance with the terms of Section 3.3(b)(iii).
76
82
Upon a sale of assets or the sale of Capital Stock of a Credit Party
permitted by this Section 8.5, the Agent shall (to the extent applicable)
deliver to the Borrower, upon the Borrower's request and at the Borrower's
expense, such documentation as is reasonably necessary to evidence the release
of the Agent's security interest, if any, in such assets or Capital Stock,
including, without limitation, amendments or terminations of UCC financing
statements, if any, the return of stock certificates, if any, and the release of
such Credit Party from all of its obligations, if any, under the Credit
Documents.
8.6 INVESTMENTS.
The Credit Parties will not permit any Credit Party to make Investments
in or to any Person, except for Permitted Investments.
8.7 RESTRICTED PAYMENTS.
The Credit Parties will not permit any Credit Party to, directly or
indirectly, declare, order, make or set apart any sum for or pay any Restricted
Payment, except (i) to make dividends payable solely in the same class of
Capital Stock of such Person, (ii) to make dividends or other distributions
payable to any Credit Party other than the Parent, (iii) as permitted by Section
8.8 or Section 8.9, (iv) payments to the Parent pursuant to a tax sharing
agreement under which the Borrower is allocated its proportionate share of the
tax liability of the affiliated group of corporations that file consolidated
federal income tax returns (or that file state or local income tax returns on a
consolidated basis), (v) to make distributions by the Borrower to enable the
Parent to make any payment which would constitute an "Exempt Affiliate
Transaction" under clause (b), (c), (d), (f) or (h) of the definition of such
term set forth in Section 1.1 and (vi) provided that no Default or Event of
Default exists either before or after giving effect thereto, (A) the repurchase,
redemption or other acquisition or retirement for value of any Capital Stock of
the Borrower or any Subsidiary of the Borrower held by any member of the
Borrower's (or any of its Subsidiaries') management pursuant to any management
equity subscription agreement or stock option agreement in effect as of the date
of this Credit Agreement or entered into after the Closing Date with members of
the management of any Person acquired after the Closing Date in connection with
the acquisition of such Person or the repurchase of Capital Stock of the
Borrower or any Subsidiary of the Borrower held by employees, former employees,
directors or former directors pursuant to the terms of agreements (including
employment agreements) approved by the Parent's Board of Directors; provided
that the aggregate price paid for all such repurchased, redeemed, acquired or
retired Capital Stock shall not exceed $500,000 in any twelve-month period, (B)
payments to the Parent in an amount not to exceed the amount of the Borrower's
federal and state income tax liability that the Borrower would owe if it were
filing a separate income tax return as a stand alone company (or, if there are
any Subsidiaries of the Borrower, the amount of the federal and state income tax
liability for which the Borrower and such Subsidiaries would be liable if the
Borrower and such subsidiaries were filing a separate consolidated (or combined)
income tax return) plus $100,000; provided, that any such payment shall not
exceed the tax liability of the Parent that is actually then due and payable,
(C) loans, advances, dividends or distributions by the Borrower or any of its
Subsidiaries to the Parent to pay for corporate, administrative and operating
expenses in the ordinary course of business, including payment of directors' and
officers'
77
83
liability insurance premiums, directors' fees, and fees, expenses and
indemnities in connection with the Transactions, in an aggregate amount not to
exceed $250,000 in any fiscal year and (D)(1) loans, advances, dividends or
distributions by the Borrower or any of its Subsidiaries to the Parent not to
exceed an amount necessary to permit the Parent to pay (I) its costs (including
all professional fees and expenses) incurred to comply with its reporting
obligations under federal or state laws or in connection with reporting or other
obligations hereunder or under the other Credit Documents, (II) its expenses
incurred in connection with any public offering of equity securities which has
been terminated by the Parent's Board of Directors, the net proceeds of which
were specifically intended to be received by or contributed or loaned to the
Borrower as evidenced by a resolution of the Parent's Board of Directors and (2)
loans or advances by the Borrower or any of its Subsidiaries to the Parent not
to exceed an amount necessary to permit the Parent to pay its interim expenses
incurred in connection with any public offering of equity securities the net
proceeds of which are specifically intended to be received by or contributed or
loaned to the Borrower, which, unless such offering shall have been terminated
by the Parent's Board of Directors shall be repaid to the Borrower promptly out
of the proceeds of such offering.
8.8 PREPAYMENTS OF INDEBTEDNESS, ETC.
The Credit Parties will not permit any Credit Party to (a) after the
issuance thereof, amend or modify (or permit the amendment or modification of)
any of the terms of any Indebtedness if such amendment or modification, taken
together with other amendments or modifications in respect of such Indebtedness
taken as a whole, would add or change any terms in a manner adverse to the
issuer of such Indebtedness, or shorten the final maturity or average life to
maturity or require any payment to be made sooner than originally scheduled or
increase the interest rate applicable thereto or change any subordination
provision thereof, or (b) if any Default or Event of Default has occurred and is
continuing or would be directly or indirectly caused as a result thereof, make
(or give any notice with respect thereto) any voluntary or optional payment or
prepayment or redemption or acquisition for value of (including without
limitation, by way of depositing money or securities with the trustee with
respect thereto before due for the purpose of paying when due), refund,
refinance or exchange of any other Indebtedness (including without limitation
any Indebtedness arising under the Senior Note Agreement and the Senior Notes).
8.9 TRANSACTIONS WITH AFFILIATES.
The Credit Parties will not permit any Credit Party to enter into or
permit to exist any transaction or series of transactions with any officer,
director, shareholder, Subsidiary or Affiliate of such Person other than (a)
Exempt Affiliate Transactions, (b) advances of working capital to any Credit
Party other than the Parent, (c) transfers of cash and assets to any Credit
Party other than the Parent, (d) transactions permitted by Section 8.4, Section
8.5, Section 8.6, Section 8.7 or Section 8.8, (e) normal compensation and
reimbursement of expenses of officers and directors and (f) except as otherwise
specifically limited in this Credit Agreement, other transactions which are
entered into in the ordinary course of such Person's business on terms and
conditions substantially as favorable to such Person as would be obtainable by
it in a comparable arms-length transaction with a Person other than an officer,
director, shareholder, Subsidiary or Affiliate.
78
84
8.10 FISCAL YEAR.
The Credit Parties will not permit any Credit Party to change its
fiscal year without the prior written consent of the Required Lenders.
8.11 LIMITATION ON RESTRICTED ACTIONS.
The Credit Parties will not permit any Credit Party to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any such Person to (a) pay
dividends or make any other distributions to any Credit Party on its Capital
Stock or with respect to any other interest or participation in, or measured by,
its profits, (b) pay any Indebtedness or other obligation owed to any Credit
Party, (c) make loans or advances to any Credit Party, (d) sell, lease or
transfer any of its properties or assets to any Credit Party, or (e) act as a
Guarantor and pledge its assets pursuant to the Credit Documents or any
renewals, refinancings, exchanges, refundings or extension thereof, except (in
respect of any of the matters referred to in clauses (a)-(d) above) for such
encumbrances or restrictions existing under or by reason of (i) this Credit
Agreement and the other Credit Documents, (ii) the Senior Note Agreement, as in
effect as of the Closing Date (and any renewals, refinancings and extensions
thereof, that do not contain any such encumbrances or restrictions that are
materially more adverse to the Credit Parties than the corresponding provisions
of the Senior Note Agreement); (iii) applicable law, (iv) any document or
instrument governing Indebtedness incurred pursuant to Section 8.1(c), (g) or
(j), provided that, in the case of any Indebtedness incurred pursuant to Section
8.1(c), any such restriction shall relate only to the asset or assets
constructed or acquired in connection therewith or (v) any Permitted Lien or any
document or instrument governing any Permitted Lien, provided that any such
restriction contained therein relates only to the asset or assets subject to
such Permitted Lien.
8.12 OWNERSHIP OF SUBSIDIARIES; LIMITATIONS ON PARENT.
Notwithstanding any other provisions of this Credit Agreement to the
contrary:
(a) Except for Permitted Investments, the Credit Parties will
not permit any Credit Party to (i) permit any Person (other than the
Borrower or any Wholly-Owned Subsidiary of the Borrower) to own any
Capital Stock of any Subsidiary of the Borrower, (ii) permit any
Subsidiary of the Borrower to issue Capital Stock (except to the
Borrower or to a Wholly-Owned Subsidiary of the Borrower), (iii)
permit, create, incur, assume or suffer to exist any Lien thereon, in
each case except (A) as a result of or in connection with a
dissolution, merger or disposition of a Subsidiary permitted under
Section 8.4 or Section 8.5 or (B) for Permitted Liens and (iv)
notwithstanding anything to the contrary contained in clause (ii)
above, permit any Subsidiary of the Borrower to issue any shares of
preferred Capital Stock.
(b) The Parent shall not (i) hold any assets other than the
Capital Stock of the Borrower, (ii) have any liabilities other than (A)
the liabilities under the Credit Documents, (B) tax liabilities in the
ordinary course of business, (C) loans, advances and other
79
85
obligations permitted under Section 8.9 and (D) corporate,
administrative and operating expenses in the ordinary course of
business and (iii) engage in any business other than (A) owning the
Capital Stock of the Borrower and activities incidental or related
thereto, (B) acting as a Guarantor hereunder and pledging its assets to
the Agent, for the benefit of the Lenders, pursuant to the Collateral
Documents to which it is a party and (C) acting as a guarantor in
respect of the Indebtedness arising under the Senior Notes.
8.13 SALE LEASEBACKS.
The Credit Parties will not permit any Credit Party to, directly or
indirectly, become or remain liable as lessee or as guarantor or other surety
with respect to any lease, whether an Operating Lease or a Capital Lease, of any
Property (whether real, personal or mixed), whether now owned or hereafter
acquired, (a) which such Credit Party has sold or transferred or is to sell or
transfer to a Person which is not a Credit Party or (b) which such Credit Party
intends to use for substantially the same purpose as any other Property which
has been sold or is to be sold or transferred by such Credit Party to another
Person which is not a Credit Party in connection with such lease.
8.14 CAPITAL EXPENDITURES.
The Credit Party will not permit Consolidated Capital Expenditures for
any fiscal year for to exceed (i) for fiscal year 1998, $12,500,000, (ii) for
fiscal year 1999, $17,500,000 plus the unused portion of permitted Consolidated
Capital Expenditures for fiscal year 1998, (iii) for fiscal year 2000,
$12,500,000 plus the unused portion of permitted Consolidated Capital
Expenditures for fiscal year 1999 (including any carry forward available in
fiscal year 1999 in respect of any unused portion of permitted Consolidated
Capital Expenditures for fiscal year 1998), (iv) for fiscal year 2001,
$5,000,000 plus the unused portion of permitted Consolidated Capital
Expenditures for fiscal year 2000 (including any carry forward available in
fiscal year 2000 in respect of any unused portion of permitted Consolidated
Capital Expenditures for fiscal years 1998 and 1999) or (iv) for any fiscal year
thereafter, $5,000,000 (without any carry forward from a prior fiscal year).
8.15 NO FURTHER NEGATIVE PLEDGES.
The Credit Parties will not permit any Credit Party to enter into,
assume or become subject to any agreement prohibiting or otherwise restricting
the creation or assumption of any Lien upon its properties or assets, whether
now owned or hereafter acquired, or requiring the grant of any security for such
obligation if security is given for some other obligation unless such agreement
expressly permits that the obligations of the Credit Parties hereunder may be
secured to the extent contemplated hereby and by the other Credit Documents.
80
86
8.16 OPERATING LEASE OBLIGATIONS.
The Credit Parties will not permit any Credit Party to enter into,
assume or permit to exist any obligations for the payment of rental under
Operating Leases which in the aggregate for all such Persons would exceed
$5,000,000 in any fiscal year.
8.17 NO FOREIGN SUBSIDIARIES.
None of the Credit Parties will create, acquire or permit to exist any
direct or indirect Foreign Subsidiary.
SECTION 9
EVENTS OF DEFAULT
9.1 EVENTS OF DEFAULT.
An Event of Default shall exist upon the occurrence of any of the
following specified events (each an "Event of Default"):
(a) Payment. Any Credit Party shall
(i) default in the payment when due of any principal
of any of the Loans or of any reimbursement obligations
arising from drawings under Letters of Credit, or
(ii) default, and such default shall continue for
three (3) or more Business Days, in the payment when due of
any interest on the Loans or on any reimbursement obligations
arising from drawings under Letters of Credit, or of any Fees
or other amounts owing hereunder, under any of the other
Credit Documents or in connection herewith or therewith; or
(b) Representations. Any representation, warranty or statement
made or deemed to be made by any Credit Party herein, in any of the
other Credit Documents, or in any statement or certificate delivered or
required to be delivered pursuant hereto or thereto shall prove untrue
in any material respect on the date as of which it was deemed to have
been made; or
(c) Covenants. Any Credit Party shall
(i) default in the due performance or observance of
any term, covenant or agreement contained in Sections 7.2,
7.9, 7.11, 7.12, 7.13 or 8.1 through 8.17, inclusive;
81
87
(ii) default in the due performance or observance of
any term, covenant or agreement contained in Sections 7.1(a),
(b) (c) or (d) and such default shall continue unremedied for
a period of at least 5 days after the earlier of an Executive
Officer of a Credit Party becoming aware of such default or
notice thereof by the Agent; or
(iii) default in the due performance or observance by
it of any term, covenant or agreement (other than those
referred to in subsections (a), (b), (c)(i) or (c)(ii) of this
Section 9.1) contained in this Credit Agreement and such
default shall continue unremedied for a period of at least 30
days after the earlier of an Executive Officer of a Credit
Party becoming aware of such default or notice thereof by the
Agent; or
(d) Other Credit Documents. (i) Any Credit Party shall default
in the due performance or observance of any term, covenant or agreement
in any of the other Credit Documents (subject to applicable grace or
cure periods, if any), or (ii) except as a result of or in connection
with a dissolution, merger or disposition of a Subsidiary permitted
under Section 8.4 or Section 8.5, any Credit Document shall fail to be
in full force and effect or to give the Agent and/or the Lenders the
Liens, rights, powers and privileges purported to be created thereby,
or any Credit Party shall so state in writing; or
(e) Guaranties. Except as the result of or in connection with
a dissolution, merger or disposition of a Subsidiary permitted under
Section 8.4 or Section 8.5, the guaranty given by any Guarantor
hereunder (including any Additional Credit Party) or any provision
thereof shall cease to be in full force and effect, or any Guarantor
(including any Additional Credit Party) hereunder or any Person acting
by or on behalf of such Guarantor shall deny or disaffirm such
Guarantor's obligations under such guaranty, or any Guarantor shall
default in the due performance or observance of any term, covenant or
agreement on its part to be performed or observed pursuant to any
guaranty; or
(f) Bankruptcy, etc. Any Bankruptcy Event shall occur with
respect to any Credit Party; or
(g) Defaults under Other Agreements.
(i) Any Credit Party shall default in the performance
or observance (beyond the applicable grace period with respect
thereto, if any) or any material obligation or condition of
any contract or lease material to the Credit Parties, taken as
a whole; or
(ii) With respect to any Indebtedness (other than
Indebtedness outstanding under this Credit Agreement) in
excess of $1,00,000 in the aggregate for the Credit Parties
taken as a whole, (A) any Credit Party shall (1) default in
any payment (beyond the applicable grace period with respect
thereto, if any) with respect to any such Indebtedness, or (2)
the occurrence and continuance of a
82
88
default in the observance or performance relating to such
Indebtedness or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event
or condition shall occur or condition exist, the effect of
which default or other event or condition is to cause, or
permit, the holder or holders of such Indebtedness (or trustee
or agent on behalf of such holders) to cause (determined
without regard to whether any notice or lapse of time is
required), any such Indebtedness to become due prior to its
stated maturity; or (B) any such Indebtedness shall be
declared due and payable, or required to be prepaid other than
by a regularly scheduled required prepayment, prior to the
stated maturity thereof; or
(h) Judgments. One or more judgments or decrees shall be
entered against one or more of the Credit Parties involving a liability
of $1,00,000 or more in the aggregate (to the extent not paid or fully
covered by insurance provided by a carrier who has acknowledged
coverage and has the ability to perform) and any such judgments or
decrees shall not have been vacated, discharged or stayed or bonded
pending appeal within 30 days from the entry thereof; or
(i) ERISA. Any of the following events or conditions, if such
event or condition would cause or be reasonably expected to cause a
Material Adverse Effect: (i) any "accumulated funding deficiency," as
such term is defined in Section 302 of ERISA and Section 412 of the
Code, whether or not waived, shall exist with respect to any Plan, or
any lien shall arise on the assets of any Credit Party or any ERISA
Affiliate in favor of the PBGC or a Plan; (ii) an ERISA Event shall
occur with respect to a Single Employer Plan, which is, in the
reasonable opinion of the Agent, likely to result in the termination of
such Plan for purposes of Title IV of ERISA; (iii) an ERISA Event shall
occur with respect to a Multiemployer Plan or Multiple Employer Plan,
which is, in the reasonable opinion of the Agent, likely to result in
(A) the termination of such Plan for purposes of Title IV of ERISA, or
(B) any Credit Party or any ERISA Affiliate incurring any liability in
connection with a withdrawal from, reorganization of (within the
meaning of Section 4241 of ERISA), or insolvency or (within the meaning
of Section 4245 of ERISA) such Plan; or (iv) any prohibited transaction
(within the meaning of Section 406 of ERISA or Section 4975 of the
Code) or breach of fiduciary responsibility shall occur which may
subject any Credit Party or any ERISA Affiliate to any liability under
Sections 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of the
Code, or under any agreement or other instrument pursuant to which any
Credit Party or any ERISA Affiliate has agreed or is required to
indemnify any person against any such liability; or
(j) Senior Note Agreement. There shall occur and be continuing
any Event of Default under and as defined in the Senior Note Agreement;
or
(k) Ownership. There shall occur a Change of Control.
83
89
9.2 ACCELERATION; REMEDIES.
Upon the occurrence of an Event of Default, and at any time thereafter
unless and until such Event of Default has been waived by the requisite Lenders
(pursuant to the voting requirements of Section 11.6) or cured to the
satisfaction of the requisite Lenders (pursuant to the voting procedures in
Section 11.6), the Agent shall, upon the request and direction of the Required
Lenders, by written notice to the Credit Parties take any of the following
actions:
(a) Termination of Commitments. Declare the Commitments
terminated whereupon the Commitments shall be immediately terminated.
(b) Acceleration. Declare the unpaid principal of and any
accrued interest in respect of all Loans, any reimbursement obligations
arising from drawings under Letters of Credit and any and all other
indebtedness or obligations of any and every kind owing by the Borrower
to the Agent and/or any of the Lenders hereunder to be due whereupon
the same shall be immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby
waived by the Borrower.
(c) Cash Collateral. Direct the Borrower to pay (and the
Borrower agrees that upon receipt of such notice, or upon the
occurrence of an Event of Default under Section 9.1(f), it will
immediately pay) to the Agent additional cash, to be held by the Agent,
for the benefit of the Lenders, in a cash collateral account as
additional security for the LOC Obligations in respect of subsequent
drawings under all then outstanding Letters of Credit in an amount
equal to the maximum aggregate amount which may be drawn under all
Letters of Credits then outstanding.
(d) Enforcement of Rights. Enforce any and all rights and
interests created and existing under the Credit Documents including,
without limitation, all rights and remedies existing under the
Collateral Documents, all rights and remedies against a Guarantor and
all rights of set-off.
Notwithstanding the foregoing, if an Event of Default specified in
Section 9.1(f) shall occur, then the Commitments shall automatically terminate
and all Loans, all reimbursement obligations arising from drawings under Letters
of Credit, all accrued interest in respect thereof, all accrued and unpaid Fees
and other indebtedness or obligations owing to the Agent and/or any of the
Lenders hereunder automatically shall immediately become due and payable without
the giving of any notice or other action by the Agent or the Lenders.
SECTION 10
AGENCY PROVISIONS
10.1 APPOINTMENT, POWERS AND IMMUNITIES.
Each Lender hereby irrevocably appoints and authorizes the Agent to act
as its agent under this Credit Agreement and the other Credit Documents with
such powers and discretion as
84
90
are specifically delegated to the Agent by the terms of this Credit Agreement
and the other Credit Documents, together with such other powers as are
reasonably incidental thereto. The Agent (which term as used in this sentence
and in Section 10.5 and the first sentence of Section 10.6 hereof shall include
its Affiliates and its own and its Affiliates' officers, directors, employees,
and agents): (a) shall not have any duties or responsibilities except those
expressly set forth in this Credit Agreement and shall not be a trustee or
fiduciary for any Lender; (b) shall not be responsible to the Lenders for any
recital, statement, representation, or warranty (whether written or oral) made
in or in connection with any Credit Document or any certificate or other
document referred to or provided for in, or received by any of them under, any
Credit Document, or for the value, validity, effectiveness, genuineness,
enforceability, or sufficiency of any Credit Document, or any other document
referred to or provided for therein or for any failure by any Credit Party or
any other Person to perform any of its obligations thereunder; (c) shall not be
responsible for or have any duty to ascertain, inquire into, or verify the
performance or observance of any covenants or agreements by any Credit Party or
the satisfaction of any condition or to inspect the property (including the
books and records) of any Credit Party or any of its Subsidiaries or Affiliates;
(d) shall not be required to initiate or conduct any litigation or collection
proceedings under any Credit Document; and (e) shall not be responsible for any
action taken or omitted to be taken by it under or in connection with any Credit
Document, except for its own gross negligence or willful misconduct. The Agent
may employ agents and attorneys-in-fact and shall not be responsible for the
negligence or misconduct of any such agents or attorneys-in-fact selected by it
with reasonable care.
10.2 RELIANCE BY AGENT.
The Agent shall be entitled to rely upon any certification, notice,
instrument, writing, or other communication (including, without limitation, any
thereof by telephone or telecopy) believed by it to be genuine and correct and
to have been signed, sent or made by or on behalf of the proper Person or
Persons, and upon advice and statements of legal counsel (including counsel for
any Credit Party), independent accountants, and other experts selected by the
Agent. The Agent may deem and treat the payee of any Note as the holder thereof
for all purposes hereof unless and until the Agent receives and accepts an
Assignment and Acceptance executed in accordance with Section 11.3(b) hereof. As
to any matters not expressly provided for by this Credit Agreement, the Agent
shall not be required to exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Required Lenders,
and such instructions shall be binding on all of the Lenders; provided, however,
that the Agent shall not be required to take any action that exposes the Agent
to personal liability or that is contrary to any Credit Document or applicable
law or unless it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking any such action.
10.3 DEFAULTS.
The Agent shall not be deemed to have knowledge or notice of the
occurrence of a Default or Event of Default unless the Agent has received
written notice from a Lender or the Borrower specifying such Default or Event of
Default and stating that such notice is a "Notice of
85
91
Default". In the event that the Agent receives such a notice of the occurrence
of a Default or Event of Default, the Agent shall give prompt notice thereof to
the Lenders. The Agent shall (subject to Section 10.2 hereof) take such action
with respect to such Default or Event of Default as shall reasonably be directed
by the Required Lenders, provided that, unless and until the Agent shall have
received such directions, the Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interest of the Lenders.
10.4 RIGHTS AS A LENDER.
With respect to its Commitment and the Loans made by it, NationsBank
(and any successor acting as Agent) in its capacity as a Lender hereunder shall
have the same rights and powers hereunder as any other Lender and may exercise
the same as though it were not acting as the Agent, and the term "Lender" or
"Lenders" shall, unless the context otherwise indicates, include the Agent in
its individual capacity. NationsBank (and any successor acting as Agent) and its
Affiliates may (without having to account therefor to any Lender) accept
deposits from, lend money to, make investments in, provide services to, and
generally engage in any kind of lending, trust, or other business with any
Credit Party or any of its Subsidiaries or Affiliates as if it were not acting
as Agent, and NationsBank (and any successor acting as Agent) and its Affiliates
may accept fees and other consideration from any Credit Party or any of its
Subsidiaries or Affiliates for services in connection with this Credit Agreement
or otherwise without having to account for the same to the Lenders.
10.5 INDEMNIFICATION.
The Lenders agree to indemnify the Agent (to the extent not reimbursed
under Section 11.5 hereof, but without limiting the obligations of the Borrower
under such Section) ratably in accordance with their respective Commitments, for
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses (including attorneys' fees), or disbursements
of any kind and nature whatsoever that may be imposed on, incurred by or
asserted against the Agent (including by any Lender) in any way relating to or
arising out of any Credit Document or the transactions contemplated thereby or
any action taken or omitted by the Agent under any Credit Document; provided
that no Lender shall be liable for any of the foregoing to the extent they arise
from the gross negligence or willful misconduct of the Person to be indemnified.
Without limitation of the foregoing, each Lender agrees to reimburse the Agent
promptly upon demand for its ratable share of any costs or expenses payable by
the Borrower under Section 11.5, to the extent that the Agent is not promptly
reimbursed for such costs and expenses by the Borrower. The agreements in this
Section 10.5 shall survive the repayment of the Loans, LOC Obligations and other
obligations under the Credit Documents and the termination of the Commitments
hereunder.
10.6 NON-RELIANCE ON AGENT AND OTHER LENDERS.
Each Lender agrees that it has, independently and without reliance on
the Agent or any other Lender, and based on such documents and information as it
has deemed appropriate, made
86
92
its own credit analysis of the Credit Parties and their Subsidiaries and
decision to enter into this Credit Agreement and that it will, independently and
without reliance upon the Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own analysis and decisions in taking or not taking action under the Credit
Documents. Except for notices, reports, and other documents and information
expressly required to be furnished to the Lenders by the Agent hereunder, the
Agent shall not have any duty or responsibility to provide any Lender with any
credit or other information concerning the affairs, financial condition, or
business of any Credit Party or any of its Subsidiaries or Affiliates that may
come into the possession of the Agent or any of its Affiliates.
10.7 SUCCESSOR AGENT.
The Agent may resign at any time by giving notice thereof to the
Lenders and the Borrower. Upon any such resignation, the Required Lenders shall
have the right to appoint a successor Agent. If no successor Agent shall have
been so appointed by the Required Lenders and shall have accepted such
appointment within thirty (30) days after the retiring Agent's giving of notice
of resignation, then the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent which shall be a commercial bank organized under the laws of the
United States of America having combined capital and surplus of at least
$100,000,000. Notwithstanding the terms of the two immediately preceding
sentences, unless a Default or Event of Default has occurred and is continuing,
no successor Agent shall be appointed by the Required Lenders or the Agent
without the prior consent of the Borrower (which consent shall not be
unreasonably withheld). Upon the acceptance of any appointment as Agent
hereunder by a successor, such successor shall thereupon succeed to and become
vested with all the rights, powers, discretion, privileges, and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Section 10 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Agent.
SECTION 11
MISCELLANEOUS
11.1 NOTICES.
Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (a) when
delivered, (b) when transmitted via telecopy (or other facsimile device) to the
number set out below, (c) the Business Day following the day on which the same
has been delivered prepaid to a reputable national overnight air courier
service, or (d) the third Business Day following the day on which the same is
sent by certified or registered mail, postage prepaid, in each case to the
respective parties at the address, in the case of the Borrower, Guarantors and
the Agent, set forth below, and, in the case of the Lenders, set forth on
Schedule 2.1(a), or at such other address as such party may specify by written
notice to the other parties hereto:
87
93
if to the Borrower or the Guarantors:
Simcala, Inc.
P. O Box 68
Mt. Meigs, Alabama 36057-0068
Attn: Chief Financial Officer
Telephone: (334) 215-7560
Telecopy: (334) 215-8232
with a copy to:
CGW Southeast Partners III, L. P.
Suite 210
Twelve Piedmont Center
Atlanta, Georgia 30305
Attn: Bill Davies
Telephone: (404) 816-3255
Telecopy: (404) 816-3258
if to the Agent:
NationsBank, N. A.
Independence Center, 15th Floor
NC1-001-15-04
101 North Tryon Street
Charlotte, North Carolina 28255
Attn: Agency Services/Tim Pacitto
Telephone: (704) 388-1340
Telecopy: (704) 386-0456
with a copy to:
NationsBank, N. A.
NationsBank Corporate Center, 13th Floor
NC1-007-13-06
100 N. Tryon Street
Charlotte, NC 28255
Attn: Curt Lueker
Telephone: (704) 388-7353
Telecopy: (704) 386-9607
-88-
94
11.2 RIGHT OF SET-OFF; ADJUSTMENTS.
Upon the occurrence and during the continuance of any Event of Default,
each Lender (and each of its Affiliates) is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender (or any
of its Affiliates) to or for the credit or the account of any Credit Party
against any and all of the obligations of such Person now or hereafter existing
under this Credit Agreement, under the Notes, under any other Credit Document or
otherwise, irrespective of whether such Lender shall have made any demand
hereunder or thereunder and although such obligations may be unmatured. Each
Lender agrees promptly to notify any affected Credit Party after any such
set-off and application made by such Lender; provided, however, that the failure
to give such notice shall not affect the validity of such set-off and
application. The rights of each Lender under this Section 11.2 are in addition
to other rights and remedies (including, without limitation, other rights of
set-off) that such Lender may have.
11.3 BENEFIT OF AGREEMENT.
(a) This Credit Agreement shall be binding upon and inure to
the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; provided that none of the Credit Parties
may assign or transfer any of its interests and obligations without
prior written consent of the Lenders; provided further that the rights
of each Lender to transfer, assign or grant participations in its
rights and/or obligations hereunder shall be limited as set forth in
this Section 11.3.
(b) Each Lender may assign to one or more Eligible Assignees
all or a portion of its rights and obligations under this Credit
Agreement (including, without limitation, all or a portion of its
Loans, its Notes, and its Commitment); provided, however, that
(i) each such assignment shall be to an Eligible
Assignee;
(ii) except in the case of an assignment to another
Lender or an assignment of all of a Lender's rights and
obligations under this Credit Agreement, any such partial
assignment shall be in an amount at least equal to $5,000,000
(or, if less, the remaining amount of the Commitment being
assigned by such Lender) or an integral multiple of $1,000,000
in excess thereof;
(iii) each such assignment by a Lender shall be of a
constant, and not varying, percentage of all of its rights and
obligations under this Credit Agreement and the Notes; and
(iv) the parties to such assignment shall execute and
deliver to the Agent for its acceptance an Assignment and
Acceptance in the form of Exhibit 11.3(b) hereto, together
with any Note subject to such assignment and a processing fee
of $3,500.
89
95
Upon execution, delivery, and acceptance of such Assignment and
Acceptance, the assignee thereunder shall be a party hereto and, to the
extent of such assignment, have the obligations, rights, and benefits
of a Lender hereunder and the assigning Lender shall, to the extent of
such assignment, relinquish its rights and be released from its
obligations under this Credit Agreement. Upon the consummation of any
assignment pursuant to this Section 11.3(b), the assignor, the Agent
and the Borrower shall make appropriate arrangements so that, if
required, new Notes are issued to the assignor and the assignee. If the
assignee is not incorporated under the laws of the United States of
America or a state thereof, it shall deliver to the Borrower and the
Agent certification as to exemption from deduction or withholding of
Taxes in accordance with Section 3.11.
(c) The Agent shall maintain at its address referred to in
Section 11.1 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and
addresses of the Lenders and the Commitment of, and principal amount of
the Loans owing to, each Lender from time to time (the "Register"). The
entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrower, the Agent and the
Lenders may treat each Person whose name is recorded in the Register as
a Lender hereunder for all purposes of this Credit Agreement. The
Register shall be available for inspection by the Borrower or any
Lender at any reasonable time and from time to time upon reasonable
prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed
by the parties thereto, together with any Note subject to such
assignment and payment of the processing fee, the Agent shall, if such
Assignment and Acceptance has been completed and is in substantially
the form of Exhibit 11.3(b) hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the parties thereto.
(e) Each Lender may sell participations to one or more Persons
in all or a portion of its rights, obligations or rights and
obligations under this Credit Agreement (including all or a portion of
its Commitment or its Loans); provided, however, that (i) such Lender's
obligations under this Credit Agreement shall remain unchanged, (ii)
such Lender shall remain solely responsible to the other parties hereto
for the performance of such obligations, (iii) the participant shall be
entitled to the benefit of the yield protection provisions contained in
Sections 3.7 through 3.12, inclusive, and the right of set-off
contained in Section 11.2, and (iv) the Borrower shall continue to deal
solely and directly with such Lender in connection with such Lender's
rights and obligations under this Credit Agreement, and such Lender
shall retain the sole right to enforce the obligations of the Borrower
relating to its Loans and its Notes and to approve any amendment,
modification, or waiver of any provision of this Credit Agreement
(other than amendments, modifications, or waivers decreasing the amount
of principal of or the rate at which interest is payable on such Loans
or Notes, extending any scheduled principal payment date or date fixed
for the payment of interest on such Loans or Notes, or extending its
Commitment).
90
96
(f) Notwithstanding any other provision set forth in this
Credit Agreement, any Lender may at any time assign and pledge all or
any portion of its Loans and its Notes to any Federal Reserve Bank as
collateral security pursuant to Regulation A and any Operating Circular
issued by such Federal Reserve Bank. No such assignment shall release
the assigning Lender from its obligations hereunder.
(g) Any Lender may furnish any information concerning the
Borrower or any of its Subsidiaries in the possession of such Lender
from time to time to assignees and participants (including prospective
assignees and participants), subject, however, to the provisions of
Section 11.14 hereof.
11.4 NO WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of the Agent or any Lender in
exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between the Agent or any Lender and any of the
Credit Parties shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder or under any other
Credit Document preclude any other or further exercise thereof or the exercise
of any other right, power or privilege hereunder or thereunder. The rights and
remedies provided herein are cumulative and not exclusive of any rights or
remedies which the Agent or any Lender would otherwise have. No notice to or
demand on any Credit Party in any case shall entitle the Borrower or any other
Credit Party to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Agent or the Lenders
to any other or further action in any circumstances without notice or demand.
11.5 EXPENSES; INDEMNIFICATION.
(a) The Borrower agrees to pay on demand all costs and expenses of the
Agent in connection with the syndication, preparation, execution, delivery,
administration, modification, and amendment of this Credit Agreement, the other
Credit Documents, and the other documents to be delivered hereunder, including,
without limitation, the reasonable fees and expenses of counsel for the Agent
(including the cost of internal counsel) with respect thereto and with respect
to advising the Agent as to its rights and responsibilities under the Credit
Documents. The Borrower further agrees to pay on demand all costs and expenses
of the Agent and the Lenders, if any (including, without limitation, reasonable
attorneys' fees and expenses and the cost of internal counsel), in connection
with the enforcement (whether through negotiations, legal proceedings, or
otherwise) of the Credit Documents and the other documents to be delivered
hereunder.
(b) The Borrower agrees to indemnify and hold harmless the Agent and
each Lender and each of their Affiliates and their respective officers,
directors, employees, agents, and advisors (each, an "Indemnified Party") from
and against any and all claims, damages, losses, liabilities, costs, and
expenses (including, without limitation, reasonable attorneys' fees) that may be
incurred by or asserted or awarded against any Indemnified Party, in each case
arising out of or in connection with or by reason of (including, without
limitation, in connection with any
91
97
investigation, litigation, or proceeding or preparation of defense in connection
therewith) the Credit Documents, any of the transactions contemplated herein or
the actual or proposed use of the proceeds of the Loans, except to the extent
such claim, damage, loss, liability, cost, or expense is found in a final,
non-appealable judgment by a court of competent jurisdiction to have resulted
from such Indemnified Party's gross negligence or willful misconduct. In the
case of an investigation, litigation or other proceeding to which the indemnity
in this Section 11.5 applies, such indemnity shall be effective whether or not
such investigation, litigation or proceeding is brought by the Borrower, its
directors, shareholders or creditors or an Indemnified Party or any other Person
or any Indemnified Party is otherwise a party thereto and whether or not the
transactions contemplated hereby are consummated. The Borrower agrees not to
assert any claim against the Agent, any Lender, any of their Affiliates, or any
of their respective directors, officers, employees, attorneys, agents, and
advisers, on any theory of liability, for special, indirect, consequential, or
punitive damages arising out of or otherwise relating to the Credit Documents,
any of the transactions contemplated herein or the actual or proposed use of the
proceeds of the Loans.
(c) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 11.5 shall survive the repayment of the Loans, LOC Obligations and
other obligations under the Credit Documents and the termination of the
Commitments hereunder.
11.6 AMENDMENTS, WAIVERS AND CONSENTS.
Neither this Credit Agreement nor any other Credit Document nor any of
the terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is in
writing entered into by, or approved in writing by, the Required Lenders and the
Borrower, provided, however, that:
(i) without the consent of each Lender affected thereby,
neither this Credit Agreement nor any other Credit Document may be
amended to
(a) extend the final maturity of any Loan or of any
reimbursement obligation, or any portion thereof, arising from
drawings under Letters of Credit,
(b) reduce the rate or extend the time of payment of
interest (other than as a result of waiving the applicability
of any post-default increase in interest rates) thereon or
Fees hereunder,
(c) reduce or waive the principal amount of any Loan or
of any reimbursement obligation, or any portion thereof,
arising from drawings under Letters of Credit,
(d) increase the Commitment of a Lender over the amount
thereof in effect (it being understood and agreed that a
waiver of any Default or Event of
92
98
Default or mandatory reduction in the Commitments shall not
constitute a change in the terms of any Commitment of any
Lender),
(e) except as the result of or in connection with an
Asset Disposition permitted by Section 8.5, release all or
substantially all of the Collateral,
(f) except as the result of or in connection with a
dissolution, merger or disposition of a Credit Party permitted
under Section 8.4, release the Borrower or substantially all
of the other Credit Parties from its or their obligations
under the Credit Documents,
(g) except amend, modify or waive any provision of this
Section 11.6 or Section 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12,
3.13, 3.14, 3.15, 9.1(a), 11.2, 11.3, 11.5 or 11.9,
(h) reduce any percentage specified in, or otherwise
modify, the definition of Required Lenders, or
(i) consent to the assignment or transfer by the
Borrower or all or substantially all of the other Credit
Parties of any of its or their rights and obligations under
(or in respect of) the Credit Documents except as permitted
thereby;
(ii) without the consent of the Agent, no provision of Section
10 may be amended;
(iii) without the consent of the Issuing Lender, no provision
of Section 2.2 may be amended.
Notwithstanding the fact that the consent of all the Lenders is
required in certain circumstances as set forth above, (x) each Lender
is entitled to vote as such Lender sees fit on any bankruptcy
reorganization plan that affects the Loans, and each Lender
acknowledges that the provisions of Section 1126(c) of the Bankruptcy
Code supersedes the unanimous consent provisions set forth herein and
(y) the Required Lenders may consent to allow a Credit Party to use
cash collateral in the context of a bankruptcy or insolvency
proceeding.
11.7 COUNTERPARTS.
This Credit Agreement may be executed in any number of counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall constitute one and the same instrument. It shall not be necessary in
making proof of this Credit Agreement to produce or account for more than one
such counterpart for each of the parties hereto. Delivery by facsimile by any of
the parties hereto of an executed counterpart of this Credit Agreement shall be
93
99
as effective as an original executed counterpart hereof and shall be deemed a
representation that an original executed counterpart hereof will be delivered.
11.8 HEADINGS.
The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Credit Agreement.
11.9 SURVIVAL.
All indemnities set forth herein, including, without limitation, in
Section 2.2(i), 3.11, 3.12, 10.5 or 11.5 shall survive the execution and
delivery of this Credit Agreement, the making of the Loans, the issuance of the
Letters of Credit, the repayment of the Loans, LOC Obligations and other
obligations under the Credit Documents and the termination of the Commitments
hereunder, and all representations and warranties made by the Credit Parties
herein shall survive delivery of the Notes and the making of the Loans
hereunder.
11.10 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE.
(a) THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER
SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NORTH CAROLINA. Any legal action or proceeding
with respect to this Credit Agreement or any other Credit Document may
be brought in the courts of the State of North Carolina in Mecklenburg
County, or of the United States for the Western District of North
Carolina, and, by execution and delivery of this Credit Agreement, each
of the Credit Parties hereby irrevocably accepts for itself and in
respect of its property, generally and unconditionally, the
nonexclusive jurisdiction of such courts. Each of the Credit Parties
further irrevocably consents to the service of process out of any of
the aforementioned courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage
prepaid, to it at the address set out for notices pursuant to Section
11.1, such service to become effective three (3) days after such
mailing. Nothing herein shall affect the right of the Agent or any
Lender to serve process in any other manner permitted by law or to
commence legal proceedings or to otherwise proceed against any Credit
Party in any other jurisdiction.
(b) Each of the Credit Parties hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of
any of the aforesaid actions or proceedings arising out of or in
connection with this Credit Agreement or any other Credit Document
brought in the courts referred to in subsection (a) above and hereby
further irrevocably waives and agrees not to plead or claim in any such
court that any such action or proceeding brought in any such court has
been brought in an inconvenient forum.
94
100
(c) TO THE EXTENT PERMITTED BY LAW, EACH OF THE AGENT, THE
LENDERS, THE BORROWER AND THE CREDIT PARTIES HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER
CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY.
11.11 SEVERABILITY.
If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
11.12 ENTIRETY.
This Credit Agreement together with the other Credit Documents
represent the entire agreement of the parties hereto and thereto, and supersede
all prior agreements and understandings, oral or written, if any, including any
commitment letters or correspondence relating to the Credit Documents or the
transactions contemplated herein and therein.
11.13 BINDING EFFECT; TERMINATION.
(a) This Credit Agreement shall become effective at such time
on or after the Closing Date when it shall have been executed by the
Borrower, the Guarantors and the Agent, and the Agent shall have
received copies hereof (telefaxed or otherwise) which, when taken
together, bear the signatures of each Lender, and thereafter this
Credit Agreement shall be binding upon and inure to the benefit of the
Borrower, the Guarantors, the Agent and each Lender and their
respective successors and assigns.
(b) The term of this Credit Agreement shall be until no Loans,
LOC Obligations or any other amounts payable hereunder or under any of
the other Credit Documents shall remain outstanding, no Letters of
Credit shall be outstanding, all of the Credit Party Obligations have
been irrevocably satisfied in full and all of the Commitments hereunder
shall have expired or been terminated.
11.14 CONFIDENTIALITY.
Each Lender agrees that it will use its reasonable best efforts to keep
confidential and to cause any representative designated under Section 7.10 to
keep confidential any non-public information from time to time supplied to it
under any Credit Document; provided, however, that nothing herein shall affect
the disclosure of any such information to (i) the extent such Lender in good
faith believes is required by statute, rule, regulation or judicial process,
(ii) counsel for such Lender or to its accountants, (iii) bank examiners or
auditors or comparable Persons, (iv) any affiliate of such Lender, (v) any other
Lender, or any assignee, transferee or participant, or any
95
101
potential assignee, transferee or participant, of all or any portion of any
Lender's rights under this Credit Agreement who is notified of the confidential
nature of the information and agrees to be bound by this provision or provisions
reasonably comparable hereto, or (vi) any other Person in connection with any
litigation to which any one or more of the Lenders is a party; and provided
further that no Lender shall have any obligation under this Section 11.14 to the
extent any such information becomes available on a non-confidential basis from a
source other than a Credit Party or that any information becomes publicly
available other than by a breach of this Section 11.14. Each Lender agrees it
will use all confidential information exclusively for the purpose of evaluating,
monitoring, selling, protecting or enforcing its Loans and other rights under
the Credit Documents. Without affecting any other rights of the Borrower and the
Credit Parties, each Lender acknowledges that the Borrower shall be entitled to
seek the remedies of injunction, specific performance and other equitable relief
for any breach of the provisions of this Section 11.14.
11.15 SOURCE OF FUNDS.
Each of the Lenders hereby represents and warrants to the Borrower that
at least one of the following statements is an accurate representation as to the
source of funds to be used by such Lender in connection with the financing
hereunder:
(a) no part of such funds constitutes assets allocated to any
separate account maintained by such Lender in which any employee
benefit plan (or its related trust) has any interest;
(b) to the extent that any part of such funds constitutes
assets allocated to any separate account maintained by such Lender,
such Lender has disclosed to the Borrower the name of each employee
benefit plan whose assets in such account exceed 10% of the total
assets of such account as of the date of such purchase (and, for
purposes of this subsection (b), all employee benefit plans maintained
by the same employer or employee organization are deemed to be a single
plan);
(c) to the extent that any part of such funds constitutes
assets of an insurance company's general account, such insurance
company has complied with all of the requirements of the regulations
issued under Section 401(c)(1)(A) of ERISA; or
(d) such funds constitute assets of one or more specific
benefit plans which such Lender has identified in writing to the
Borrower.
As used in this Section 11.15, the terms "employee benefit plan" and "separate
account" shall have the respective meanings assigned to such terms in Section 3
of ERISA.
96
102
11.16 CONFLICT.
To the extent that there is a conflict or inconsistency between any
provision hereof, on the one hand, and any provision of any Credit Document, on
the other hand, this Credit Agreement shall control.
[Signature Page to Follow]
103
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Credit Agreement to be duly executed and delivered as of the date first
above written.
BORROWER: SIMCALA, INC.,
- --------- a Delaware corporation
By: /s/ C. E. Boardwine
-------------------------------------
Name: C. E. Boardwine
Title: President and Chief Executive
Officer
PARENT: SIMCALA HOLDINGS, INC.,
- ------- a Georgia corporation
By: /s/ William A. Davies
-------------------------------------
Name: William A. Davies
Title: Secretary/Treasurer
104
LENDERS: NATIONSBANK, N. A.,
- -------- individually in its capacity as a
Lender and in its capacity as Agent
By: /s/ Michael D. McKay
-------------------------------------
Name: Michael D. McKay
Title: Senior Vice President
2