EXECUTION COPY
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$225,000,000
CREDIT AGREEMENT
among
CONSOLIDATED GRAPHICS, INC.
as Borrower,
THE GUARANTORS PARTIES HERETO,
THE LENDERS PARTIES HERETO
and
FIRST UNION NATIONAL BANK,
as Administrative Agent
FIRST UNION SECURITIES, INC.,
as Sole Arranger and Book Runner
and
BANK ONE, N.A.,
as Documentation Agent,
Dated as of December 11, 2000
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS...................................................... 1
Section 1.1 DEFINED TERMS........................................... 1
Section 1.2 OTHER DEFINITIONAL PROVISIONS........................... 23
Section 1.3 ACCOUNTING TERMS........................................ 23
ARTICLE II THE LOANS; AMOUNT AND TERMS..................................... 24
Section 2.1 REVOLVING LOANS......................................... 24
Section 2.2 SWINGLINE LOAN SUBFACILITY.............................. 26
Section 2.3 LETTER OF CREDIT SUBFACILITY............................ 27
Section 2.4 TERM LOAN............................................... 31
Section 2.5 FEES.................................................... 32
Section 2.6 COMMITMENT REDUCTIONS................................... 33
Section 2.7 PREPAYMENTS............................................. 34
Section 2.8 MINIMUM PRINCIPAL AMOUNT OF TRANCHES.................... 35
Section 2.9 DEFAULT RATE AND PAYMENT DATES.......................... 35
Section 2.10 CONVERSION OPTIONS...................................... 36
Section 2.11 COMPUTATION OF INTEREST AND FEES........................ 36
Section 2.12 PRO RATA TREATMENT AND PAYMENTS......................... 37
Section 2.13 NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE AGENT........ 38
Section 2.14 INABILITY TO DETERMINE INTEREST RATE.................... 39
Section 2.15 ILLEGALITY.............................................. 40
Section 2.16 REQUIREMENTS OF LAW..................................... 41
Section 2.17 INDEMNITY............................................... 42
Section 2.18 TAXES................................................... 42
Section 2.19 INDEMNIFICATION; NATURE OF ISSUING LENDER'S DUTIES...... 45
Section 2.20 INCREASES IN THE REVOLVING COMMITTED AMOUNT............. 46
ARTICLE III REPRESENTATIONS AND WARRANTIES................................. 47
Section 3.1 FINANCIAL CONDITION..................................... 47
Section 3.2 NO CHANGE............................................... 47
Section 3.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW................ 48
Section 3.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. 48
Section 3.5 NO LEGAL BAR; NO DEFAULT................................ 48
Section 3.6 NO MATERIAL LITIGATION.................................. 49
Section 3.7 INVESTMENT COMPANY ACT.................................. 49
Section 3.8 MARGIN REGULATIONS...................................... 49
Section 3.9 ERISA................................................... 49
Section 3.10 ENVIRONMENTAL MATTERS................................... 50
Section 3.11 PURPOSE OF LOANS........................................ 51
Section 3.12 SUBSIDIARIES............................................ 51
Section 3.13 OWNERSHIP............................................... 51
Section 3.14 INDEBTEDNESS............................................ 51
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Section 3.15 TAXES................................................... 51
Section 3.16 INTELLECTUAL PROPERTY................................... 52
Section 3.17 SOLVENCY................................................ 52
Section 3.18 INVESTMENTS............................................. 52
Section 3.19 LOCATION OF COLLATERAL.................................. 52
Section 3.20 NO BURDENSOME RESTRICTIONS.............................. 53
Section 3.21 BROKERS' FEES........................................... 53
Section 3.22 LABOR MATTERS........................................... 53
Section 3.23 ACCURACY AND COMPLETENESS OF INFORMATION................ 53
Section 3.24 MATERIAL CONTRACTS...................................... 53
Section 3.25 SECURITY DOCUMENTS...................................... 54
Section 3.26 INSURANCE............................................... 54
ARTICLE IV CONDITIONS PRECEDENT............................................ 54
Section 4.1 CONDITIONS TO CLOSING DATE AND INITIAL REVOLVING
LOANS AND TERM LOANS.................................... 54
Section 4.2 CONDITIONS TO ALL EXTENSIONS OF CREDIT.................. 59
ARTICLE V AFFIRMATIVE COVENANTS............................................ 60
Section 5.1 FINANCIAL STATEMENTS.................................... 60
Section 5.2 CERTIFICATES; OTHER INFORMATION......................... 61
Section 5.3 PAYMENT OF OBLIGATIONS.................................. 64
Section 5.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE........ 64
Section 5.5 MAINTENANCE OF PROPERTY; INSURANCE...................... 64
Section 5.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS.. 65
Section 5.7 NOTICES................................................. 65
Section 5.8 ENVIRONMENTAL LAWS...................................... 66
Section 5.9 FINANCIAL COVENANTS..................................... 67
Section 5.10 ADDITIONAL GUARANTORS................................... 68
Section 5.11 COMPLIANCE WITH LAW..................................... 69
Section 5.12 PLEDGED ASSETS.......................................... 69
Section 5.13 FURTHER ASSURANCES...................................... 69
ARTICLE VI NEGATIVE COVENANTS.............................................. 70
Section 6.1 INDEBTEDNESS............................................ 70
Section 6.2 LIENS................................................... 72
Section 6.3 GUARANTY OBLIGATIONS.................................... 72
Section 6.4 EARNOUT OBLIGATIONS..................................... 72
Section 6.5 NATURE OF BUSINESS...................................... 72
Section 6.6 CONSOLIDATION, MERGER, ACQUISITIONS, SALE OR
PURCHASE OF ASSETS, ETC................................. 73
Section 6.7 ADVANCES, INVESTMENTS AND LOANS......................... 74
Section 6.8 TRANSACTIONS WITH AFFILIATES............................ 74
Section 6.9 OWNERSHIP OF SUBSIDIARIES; RESTRICTIONS................. 74
Section 6.10 FISCAL YEAR; ORGANIZATIONAL DOCUMENTS;
MATERIAL CONTRACTS...................................... 75
Section 6.11 LIMITATION ON RESTRICTED ACTIONS........................ 75
Section 6.12 RESTRICTED PAYMENTS..................................... 75
Section 6.13 PREPAYMENTS OF INDEBTEDNESS, ETC........................ 76
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Section 6.14 SALE LEASEBACKS......................................... 76
Section 6.15 NO FURTHER NEGATIVE PLEDGES............................. 76
ARTICLE VII EVENTS OF DEFAULT.............................................. 77
Section 7.1 EVENTS OF DEFAULT....................................... 77
Section 7.2 ACCELERATION; REMEDIES.................................. 79
ARTICLE VIII THE ADMINISTRATIVE AGENT...................................... 80
Section 8.1 APPOINTMENT............................................. 80
Section 8.2 DELEGATION OF DUTIES.................................... 80
Section 8.3 EXCULPATORY PROVISIONS.................................. 80
Section 8.4 RELIANCE BY ADMINISTRATIVE AGENT........................ 81
Section 8.5 NOTICE OF DEFAULT....................................... 81
Section 8.6 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS.. 81
Section 8.7 INDEMNIFICATION......................................... 82
Section 8.8 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY......... 82
Section 8.9 SUCCESSOR ADMINISTRATIVE AGENT.......................... 83
ARTICLE IX MISCELLANEOUS.................................................. 83
Section 9.1 AMENDMENTS, WAIVERS AND RELEASE OF COLLATERAL........... 83
Section 9.2 NOTICES................................................. 85
Section 9.3 NO WAIVER; CUMULATIVE REMEDIES.......................... 86
Section 9.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.............. 86
Section 9.5 PAYMENT OF EXPENSES AND TAXES........................... 86
Section 9.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS;
PURCHASING LENDERS...................................... 87
Section 9.7 ADJUSTMENTS; SET-OFF.................................... 90
Section 9.8 TABLE OF CONTENTS AND SECTION HEADINGS.................. 91
Section 9.9 COUNTERPARTS............................................ 91
Section 9.10 EFFECTIVENESS........................................... 91
Section 9.11 SEVERABILITY............................................ 91
Section 9.12 INTEGRATION............................................. 91
Section 9.13 GOVERNING LAW........................................... 92
Section 9.14 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.......... 92
Section 9.15 ARBITRATION............................................. 92
Section 9.16 CONFIDENTIALITY......................................... 94
Section 9.17 ACKNOWLEDGMENTS......................................... 94
Section 9.18 WAIVERS OF JURY TRIAL................................... 95
Section 9.19 INTEREST................................................ 95
ARTICLE X GUARANTY......................................................... 96
Section 10.1 THE GUARANTY............................................ 96
Section 10.2 BANKRUPTCY.............................................. 97
Section 10.3 NATURE OF LIABILITY..................................... 97
Section 10.4 INDEPENDENT OBLIGATION.................................. 97
Section 10.5 AUTHORIZATION........................................... 97
Section 10.6 RELIANCE................................................ 98
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Section 10.7 WAIVER.................................................. 98
Section 10.8 LIMITATION ON ENFORCEMENT............................... 99
Section 10.9 CONFIRMATION OF PAYMENT................................. 99
SCHEDULES
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Schedule 1.1(a) Account Designation Letter
Schedule 1.1(b) Liens
Schedule 2.1(a) Schedule of Lenders and Commitments
Schedule 2.1(b)(i) Form of Notice of Borrowing
Schedule 2.1(e) Form of Revolving Note
Schedule 2.2(d) Form of Swingline Note
Schedule 2.4(d) Form of Term Note
Schedule 2.10 Form of Notice of Conversion/Extension
Schedule 2.18 Section 2.18 Certificate
Schedule 2.20 Form of New Commitment Agreement
Schedule 3.3 Corporate Existence
Schedule 3.6 Litigation
Schedule 3.9 ERISA
Schedule 3.12 Subsidiaries
Schedule 3.16 Intellectual Property
Schedule 3.19(a) Location of Real Property
Schedule 3.19(b) Location of Collateral
Schedule 3.19(c) Chief Executive Offices
Schedule 3.22 Labor Matters
Schedule 3.24 Material Contracts
Schedule 4.1(b) Form of Secretary's Certificate
Schedule 4.1(c) Form of Legal Opinion
Schedule 4.1(h) Form of Solvency Certificate
Schedule 4.1(u) Form of Covenant Compliance Certificate
Schedule 5.5(b) Insurance
Schedule 5.10 Form of Joinder Agreement
Schedule 5.13 Landlord Lien Waiver Letter Locations
Schedule 6.1(b) Indebtedness
Schedule 6.4 Earnout Obligations
Schedule 9.2 Schedule of Lenders' Lending Offices
Schedule 9.6(c) Form of Commitment Transfer Supplement
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CREDIT AGREEMENT, dated as of December 11, 2000, among CONSOLIDATED
GRAPHICS, INC., a Texas corporation (the "BORROWER"), those Domestic
Subsidiaries of the Borrower listed on the signature pages hereto and as may
from time to time become a party hereto, (collectively the "GUARANTORS" and
individually, a "GUARANTOR"), the several banks and other financial institutions
as may from time to time become parties to this Agreement (collectively, the
"LENDERS" and individually, a "LENDER"), and FIRST UNION NATIONAL BANK, a
national banking association, as Administrative Agent for the Lenders hereunder
(in such capacity, the "ADMINISTRATIVE AGENT").
W I T N E S S E T H:
WHEREAS, the Borrower has requested that the Lenders make loans and other
financial accommodations to the Borrower in the amount of up to $225,000,000, as
more particularly described herein;
WHEREAS, the Lenders have agreed to make such loans and other financial
accommodations to the Borrower on the terms and conditions contained herein;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINED TERMS.
As used in this Agreement, terms defined in the preamble to this Agreement
have the meanings therein indicated, and the following terms have the following
meanings:
"ACCOUNT DESIGNATION LETTER" shall mean the Notice of Account Designation
Letter dated the Closing Date from the Borrower to the Administrative Agent
substantially in the form attached hereto as SCHEDULE 1.1(A).
"ADDITIONAL CREDIT PARTY" shall mean each Person that becomes a Guarantor
by execution of a Joinder Agreement in accordance with Section 5.10.
"ADMINISTRATIVE AGENT" shall have the meaning set forth in the first
paragraph of this Agreement and any successors in such capacity.
"AFFILIATE" shall mean as to any Person, any other Person (excluding any
Subsidiary) which, directly or indirectly, is in control of, is controlled by,
or is under common control with, such Person. For purposes of this definition, a
Person shall be deemed to be "controlled by" a Person if such Person possesses,
directly or indirectly, power either (a) to vote 10% or more of
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the securities having ordinary voting power for the election of directors of
such Person or (b) to direct or cause the direction of the management and
policies of such Person whether by contract or otherwise.
"AGREEMENT" shall mean this Credit Agreement, as amended, modified or
supplemented from time to time in accordance with its terms.
"ALTERNATE BASE RATE" shall mean, for any day, a rate per annum equal to
the greater of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. For purposes hereof:
"PRIME RATE" shall mean, at any time, the rate of interest per annum publicly
announced from time to time by First Union at its principal office in Charlotte,
North Carolina as its prime rate. Each change in the Prime Rate shall be
effective as of the opening of business on the day such change in the Prime Rate
occurs. The parties hereto acknowledge that the rate announced publicly by First
Union as its Prime Rate is an index or base rate and shall not necessarily be
its lowest or best rate charged to its customers or other banks; and "FEDERAL
FUNDS EFFECTIVE RATE" shall mean, for any day, the weighted average of the rates
on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published on the next succeeding
Business Day by the Federal Reserve Bank of New York, or, if such rate is not so
published on the next succeeding Business Day, the average of the quotations for
the day of such transactions received by the Administrative Agent from three
federal funds brokers of recognized standing selected by it. If for any reason
the Administrative Agent shall have determined (which determination shall be
conclusive in the absence of manifest error) that it is unable to ascertain the
Federal Funds Effective Rate, for any reason, including the inability or failure
of the Administrative Agent to obtain sufficient quotations in accordance with
the terms thereof, the Alternate Base Rate shall be determined without regard to
clause (b) of the first sentence of this definition, as appropriate, until the
circumstances giving rise to such inability no longer exist. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective on the opening of business on the date of such
change.
"ALTERNATE BASE RATE LOANS" shall mean Loans that bear interest at an
interest rate based on the Alternate Base Rate.
"APPLICABLE PERCENTAGE" shall mean, for any day, the rate per annum set
forth below opposite the applicable Level then in effect, it being understood
that the Applicable Percentage for (i) Revolving Loans and Term Loans which are
Alternate Base Rate Loans shall be the percentage set forth under the column
"Alternate Base Rate Margin for Revolving Loans and Term Loans", (ii) Revolving
Loans and Term Loans which are LIBOR Rate Loans shall be the percentage set
forth under the column "LIBOR Rate Margin for Revolving Loans, Term Loans and
Letter of Credit Fee", (iii) the Commitment Fee shall be the percentage set
forth under the column "Commitment Fee" and (iv) the Letter of Credit Fee shall
be the percentage set forth under the column "LIBOR Rate Margin for Revolving
Loans, Term Loans and Letter of Credit Fee":
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LIBOR Rate Margin
Alternate Base for Revolving
Rate Loans, Term Loans
Margin for and
Leverage Revolving Loans Letter of Credit Commitment
Level Ratio and Term Loans Fee Fee
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I => 3.0 to 1.0 1.00% 2.25% 0.375%
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< 3.0 to 1.0 0.75% 2.00% 0.375%
but
II => 2.5 to 1.0
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III < 2.5 to 1.0 0.50% 1.75% 0.375%
but
=> 2.0 to 1.0
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IV < 2.0 to 1.0 0.25% 1.50% 0.325%
but
=> 1.5 to 1.0
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V < 1.5 to 1.0 0.00% 1.25% 0.275%
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The Applicable Percentage shall, in each case, be determined and adjusted
quarterly on the date five (5) Business Days after the date on which the
Administrative Agent has received from the Borrower the quarterly financial
information and certifications required to be delivered to the Administrative
Agent and the Lenders in accordance with the provisions of Sections 5.1(b) and
5.2(b) (each an "INTEREST DETERMINATION DATE"). Such Applicable Percentage shall
be effective from such Interest Determination Date until the next such Interest
Determination Date. The initial Applicable Percentages on the Closing Date shall
be based on a minimum of Level II until the first Interest Determination Date
occurring after December 31, 2000. After the Closing Date, if the Borrower shall
fail to provide the quarterly financial information and certifications in
accordance with the provisions of Sections 5.1(b) and 5.2(b), the Applicable
Percentage from such Interest Determination Date shall, on the date five (5)
Business Days after the date by which the Borrower was so required to provide
such financial information and certifications to the Administrative Agent and
the Lenders, be based on Level I until such time as such information and
certifications are provided, whereupon the Level shall be determined by the then
current Leverage Ratio. For purposes hereof, the Leverage Ratio shall be
determined in accordance with Section 5.9(a).
"APPROVED BANK" shall have the meaning set forth in the definition of
"Cash Equivalents."
"ARRANGER" shall mean First Union Securities, Inc.
"ASSET DISPOSITION" shall mean the disposition of any or all of the assets
(including, without limitation, the Capital Stock of a Subsidiary or any
ownership interest in a joint venture) of any Credit Party or any Subsidiary
whether by sale, lease, transfer or otherwise. The term "Asset Disposition"
shall not include (i) Specified Sales, (ii) the sale, lease or transfer of
assets permitted by Section 6.6(a)(iii), (iv), (v) or (vi) hereof, or (iii) any
Equity Issuance.
"BANKRUPTCY CODE" shall mean the Bankruptcy Code in Title 11 of the United
States Code, as amended, modified, succeeded or replaced from time to time.
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"BORROWER" shall have the meaning set forth in the first paragraph of this
Agreement.
"BORROWING DATE" shall mean, in respect of any Loan, the date such Loan is
made.
"BUSINESS" shall have the meaning set forth in Section 3.10.
"BUSINESS DAY" shall mean a day other than a Saturday, Sunday or other day
on which commercial banks in Charlotte, North Carolina are authorized or
required by law to close; PROVIDED, HOWEVER, that when used in connection with a
rate determination, borrowing or payment in respect of a LIBOR Rate Loan, the
term "Business Day" shall also exclude any day on which banks in London, England
are not open for dealings in Dollar deposits in the London interbank market.
"CAPITAL LEASE" shall mean any lease of property, real or personal, the
obligations with respect to which are required to be capitalized on a balance
sheet of the lessee in accordance with GAAP.
"CAPITAL LEASE OBLIGATIONS" shall mean the capitalized lease obligations
relating to a Capital Lease determined in accordance with GAAP.
"CAPITAL STOCK" shall mean (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" shall mean (i) 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 ("GOVERNMENT OBLIGATIONS"), (ii)
U.S. dollar denominated (or foreign currency fully hedged) time deposits,
certificates of deposit, Eurodollar time deposits and Eurodollar certificates of
deposit of (y) any domestic commercial bank of recognized standing having
capital and surplus in excess of $250,000,000 or (z) any bank whose short-term
commercial paper rating from S&P is at least A-1 or the equivalent thereof or
from 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 364 days from
the date of acquisition, (iii) commercial paper and variable or fixed rate notes
issued by any Approved Bank (or by the parent company thereof) or any variable
rate notes issued by, or guaranteed by any domestic corporation rated A-1 (or
the equivalent thereof) or better by S&P or P-1 (or the equivalent thereof) or
better by Moody's and maturing within six months of the date of acquisition,
(iv) repurchase agreements with a bank or trust company (including a Lender) or
a recognized securities dealer having capital and surplus in excess of
$500,000,000 for direct obligations issued by or fully guaranteed by the United
States of America, (v) obligations of any state of the United States or any
political subdivision thereof for the payment of the principal and
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redemption price of and interest on which there shall have been irrevocably
deposited Government Obligations maturing as to principal and interest at times
and in amounts sufficient to provide such payment, (vi) auction preferred stock
rated in the highest short-term credit rating category by S&P or Moody's, and
(vii) investments in mutual funds whose investment criteria substantially
complies with the provisions hereof.
"CHANGE OF CONTROL" shall mean the occurrence of any of the following
events: (a) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Securities and Exchange Act of 1934, as amended) becomes after
the date hereof the "beneficial owner" (defined as aforesaid), directly or
indirectly, of more than 35% of the Voting Stock of the Borrower, or (b)
Continuing Directors, shall cease for any reason to constitute a majority of the
Board of Directors of the Borrower then in office.
"CLOSING DATE" shall mean the date of this Agreement.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
"COLLATERAL" shall mean a collective reference to the collateral which is
identified in, and at any time will be covered by, the Security Documents.
"COMMITMENT" shall mean the Revolving Commitment, the LOC Commitment, the
Swingline Commitment and the Term Loan Commitment, individually or collectively,
as appropriate.
"COMMITMENT FEE" shall have the meaning set forth in Section 2.5(a).
"COMMITMENT PERCENTAGE" shall mean the Revolving Commitment Percentage,
the LOC Commitment Percentage and/or the Term Loan Commitment Percentage, as
appropriate.
"COMMITMENT PERIOD" shall mean the period from and including the Closing
Date to but not including the Revolving Commitment Termination Date.
"COMMITMENT TRANSFER SUPPLEMENT" shall mean a Commitment Transfer
Supplement, substantially in the form of SCHEDULE 9.6(C).
"COMMONLY CONTROLLED ENTITY" shall mean an entity, whether or not
incorporated, which is under common control with the Borrower within the meaning
of Section 4001 of ERISA or is part of a group which includes the Borrower and
which is treated as a single employer under Section 414 of the Code.
"CONSOLIDATED CAPITAL EXPENDITURES" shall mean, for any period, all
capital expenditures of the Borrower and its Subsidiaries on a consolidated
basis for such period, as determined in accordance with GAAP. The term
"Consolidated Capital Expenditures" shall not include (i) capital expenditures
in respect of the reinvestment of proceeds derived from Recovery Events received
by the Borrower and its Subsidiaries to the extent that such reinvestment is
permitted under the Credit Documents or (ii) acquisitions of all or
substantially all of the assets or stock of
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businesses and/or mergers with other businesses. Furthermore, for purposes of
calculating the Fixed Charge Coverage Ratio only, "Consolidated Capital
Expenditures" shall not include capital expenditures that are financed by the
Borrower or its Subsidiaries under equipment financings permitted under Section
6.1(c).
"CONSOLIDATED CASH TAXES" means, for any period, the aggregate of all
taxes on income of the Borrower and its Subsidiaries on a consolidated basis for
such period, as determined in accordance with GAAP.
"CONSOLIDATED EBITDA" shall mean, 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 taxes and other similar taxes, (C) losses (or minus gains) on the sale or
disposition of assets outside the ordinary course of business and (D)
depreciation, amortization expense and other non-cash charges, all as determined
in accordance with GAAP.
"CONSOLIDATED INTEREST EXPENSE" shall mean, for any period, all interest
expense of the Borrower and its Subsidiaries (including, without limitation. the
interest component under Capital Leases), as determined in accordance with GAAP.
"CONSOLIDATED NET INCOME" shall mean, for any period, net income
(excluding extraordinary items) after taxes for such period of the Borrower and
its Subsidiaries on a consolidated basis, as determined in accordance with GAAP.
"CONSOLIDATED NET WORTH" shall mean, as of any date with respect to the
Borrower and its Subsidiaries on a consolidated basis, the consolidated
stockholders' equity of the Borrower and its Subsidiaries, as determined in
accordance with GAAP.
"CONTINUING DIRECTORS" shall mean either 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 Borrower (together with
any new director whose election by the Borrower's board of directors or whose
nomination for election by the Borrower's shareholders was approved by a vote of
at least (60%) sixty percent 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).
"CONTRACTUAL OBLIGATION" shall mean, as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound.
"CREDIT DOCUMENTS" shall mean this Agreement, each of the Notes, any
Joinder Agreement, the Letters of Credit, LOC Documents and the Security
Documents.
"CREDIT PARTY" shall mean any of the Borrower or the Guarantors.
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"CREDIT PARTY OBLIGATIONS" shall mean, without duplication, (i) all of the
obligations of the Credit Parties to the Lenders (including the Issuing Lender)
and the Administrative Agent, whenever arising, under this Agreement, the Notes
or any of the other Credit Documents (including, but not limited to, any
interest accruing after the occurrence of a filing of a petition of bankruptcy
under the Bankruptcy Code with respect to any Credit Party, regardless of
whether such interest is an allowed claim under the Bankruptcy Code) and (ii)
all liabilities and obligations, whenever arising, owing from the Borrower or
any of its Subsidiaries to any Lender, or any Affiliate of a Lender, arising
under any Hedging Agreement relating to the Loans.
"DEBT ISSUANCE" shall mean the issuance of any Indebtedness for borrowed
money by any Credit Party or any of its Subsidiaries (excluding, for purposes
hereof, any Equity Issuance or any Indebtedness of the Borrower and its
Subsidiaries permitted to be incurred pursuant to Section 6.1 hereof).
"DEFAULT" shall mean any of the events specified in Section 7.1, whether
or not any requirement for the giving of notice or the lapse of time, or both,
or any other condition, has been satisfied.
"DEFAULT RATE" shall have the meaning set forth in Section 2.8.
"DEFAULTING LENDER" shall mean, at any time, any Lender that, at such time
(a) has failed to make a Loan required pursuant to the term of this Credit
Agreement, including the funding of a Participation Interest in accordance with
the terms hereof, (b) has failed to pay to the Administrative Agent or any
Lender an amount owed by such Lender pursuant to the terms of this Credit
Agreement, or (c) has been deemed insolvent or has become subject to a
bankruptcy or insolvency proceeding or to a receiver, trustee or similar
official.
"DOLLARS" and "$" shall mean dollars in lawful currency of the United
States of America.
"DOMESTIC LENDING OFFICE" shall mean, initially, the office of each Lender
designated as such Lender's Domestic Lending Office shown on SCHEDULE 9.2; and
thereafter, such other office of such Lender as such Lender may from time to
time specify to the Administrative Agent and the Borrower as the office of such
Lender at which Alternate Base Rate Loans of such Lender are to be made.
"DOMESTIC SUBSIDIARY" shall mean any Subsidiary that is organized and
existing under the laws of the United States or any state or commonwealth
thereof or under the laws of the District of Columbia.
"EARNOUT OBLIGATION" shall mean a contingent obligation to make a cash
payment to a non-Affiliate Person based upon the future earnings or performance
of an acquired business.
"ENVIRONMENTAL LAWS" shall mean any and all applicable foreign, Federal,
state, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental Authority or other
Requirement of Law (including common law) regulating,
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relating to or imposing liability or standards of conduct concerning protection
of human health or the environment, as are now or may at any time be in effect
during the term of this Agreement.
"EQUITY ISSUANCE" shall mean any issuance by any Credit Party or any
Subsidiary to any Person which is not a Credit Party of (a) shares of its
Capital Stock, (b) any shares of its Capital Stock pursuant to the exercise of
options or warrants or (c) any shares of its Capital Stock pursuant to the
conversion of any debt securities to equity. The term "Equity Issuance" shall
not include any Asset Disposition or any Debt Issuance.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"EURODOLLAR RESERVE PERCENTAGE" shall mean for any day, the percentage
(expressed as a decimal and rounded upwards, if necessary, to the next higher
1/100th of 1%) which is in effect for such day as prescribed by the Federal
Reserve Board (or any successor) for determining the maximum reserve requirement
(including without limitation any basic, supplemental or emergency reserves) in
respect of Eurocurrency liabilities, as defined in Regulation D of such Board as
in effect from time to time, or any similar category of liabilities for a member
bank of the Federal Reserve System in New York City.
"EVENT OF DEFAULT" shall mean any of the events specified in Section 7.1;
PROVIDED, HOWEVER, that any requirement for the giving of notice or the lapse of
time, or both, or any other condition, has been satisfied.
"EXTENSION OF CREDIT" shall mean, as to any Lender, the making of a Loan
by such Lender or the issuance of, or participation in, a Letter of Credit by
such Lender.
"FEDERAL FUNDS EFFECTIVE RATE" shall have the meaning set forth in the
definition of "Alternate Base Rate".
"FEE LETTER" shall mean the letter agreement dated November 28, 2000
addressed to the Borrower from First Union and the Arranger, as amended,
modified or otherwise supplemented.
"FIRST UNION" shall mean First Union National Bank, a national banking
association.
"FIXED CHARGE COVERAGE RATIO" means, with respect to the Borrower and its
Subsidiaries on a consolidated basis for the twelve month period ending on the
last day of any fiscal quarter of the Borrower, the ratio of (a) Pro Forma
Consolidated EBITDA MINUS Consolidated Capital Expenditures MINUS Consolidated
Cash Taxes MINUS dividends for such period to (b) Consolidated Interest Expense
PLUS Scheduled Payments of Funded Debt.
"FOREIGN SUBSIDIARY" shall mean any Subsidiary that is not a Domestic
Subsidiary.
"FUNDED DEBT" shall mean, with respect to any Person, without duplication,
(a) all Indebtedness of such Person other than Indebtedness of the types
referred to in clause (e), (f), (g), (i) and (l) of the definition of
"Indebtedness" set forth in this Section 1.1 (provided, however, that
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letters of credit issued in support of industrial revenue bond financings shall
be excluded from the calculation of Funded Debt hereunder), (b) all Funded Debt
of others of the type referred to in clause (a) above secured by (or for which
the holder of such Funded Debt has an existing right, contingent or otherwise,
to be secured by) any Lien on, or payable out of the proceeds of production
from, Property owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed, (c) all Guaranty Obligations of such Person
with respect to Funded Debt of the type referred to in clause (a) above of
another Person and (d) Funded Debt of the type referred to in clause (a) above
of any partnership or unincorporated joint venture in which such Person is
legally obligated or has a reasonable expectation of being liable with respect
thereto.
"GAAP" shall mean generally accepted accounting principles in effect in
the United States of America applied on a consistent basis, SUBJECT, HOWEVER, in
the case of determination of compliance with the financial covenants set out in
Section 5.9 to the provisions of Section 1.3.
"GOVERNMENT ACTS" shall have the meaning set forth in Section 2.18.
"GOVERNMENT OBLIGATIONS" shall have the meaning set forth in the
definition of "Cash Equivalents."
"GOVERNMENTAL AUTHORITY" shall mean any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"GUARANTOR" shall have the meaning set forth in the first paragraph of
this Agreement.
"GUARANTY" shall mean the guaranty of the Guarantors set forth in
Article X.
"GUARANTY OBLIGATIONS" shall mean, 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, 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" shall mean, with respect to any Person, any agreement
entered into to protect such Person against fluctuations in interest rates, or
currency or raw materials values, including, without limitation, any interest
rate swap, cap or collar agreement or similar
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<PAGE>
arrangement between such Person and one or more counterparties, any foreign
currency exchange agreement, currency protection agreements, commodity purchase
or option agreements or other interest or exchange rate or commodity price
hedging agreements.
"INDEBTEDNESS" shall mean, with respect to any Person, without
duplication, (a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to Property purchased by such Person (other than customary
reservations or retentions of title under agreements with suppliers entered into
in the ordinary course of business), (d) all obligations of such Person issued
or assumed as the deferred purchase price of Property or services purchased by
such Person (other than trade debt and expenses 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
with respect to Indebtedness of another Person, (h) the principal portion of all
obligations of such Person under Capital Leases, (i) all obligations of such
Person under Hedging Agreements, (j) the maximum amount of all standby letters
of credit issued or bankers' acceptances facilities created for the account of
such Person and, without duplication, all drafts drawn thereunder (to the extent
unreimbursed), (k) all preferred Capital Stock issued by such Person and which
by the terms thereof could be (at the request of the holders thereof or
otherwise) subject to mandatory sinking fund payments, redemption or other
acceleration, (l) the principal balance outstanding under any synthetic lease,
tax retention operating lease, off-balance sheet loan or similar off-balance
sheet financing product, and (m) the Indebtedness of any partnership or
unincorporated joint venture in which such Person is a general partner or a
joint venturer.
"INSOLVENCY" shall mean, with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of such term as used in
Section 4245 of ERISA.
"INSOLVENT" shall mean being in a condition of Insolvency.
"INTELLECTUAL PROPERTY" shall have the meaning set forth in the Security
Agreement.
"INTEREST COVERAGE RATIO" shall mean, with respect to the Borrower and its
Subsidiaries on a consolidated basis for the twelve month period ending on the
last day of any fiscal quarter of the Borrower and its Subsidiaries, the ratio
of (a) Consolidated EBITDA for such period to (b) Consolidated Interest Expense
for such period.
"INTEREST DETERMINATION DATE" shall have the meaning assigned thereto in
the definition of "Applicable Percentage".
"INTEREST PAYMENT DATE" shall mean (a) as to any Alternate Base Rate Loan
or Swingline Loan, the last day of each March, June, September and December and
on the applicable Maturity
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Date, (b) as to any LIBOR Rate Loan having an Interest Period of three months or
less, the last day of such Interest Period, and (c) as to any LIBOR Rate Loan
having an Interest Period longer than three months, each day which is three
months after the first day of such Interest Period and the last day of such
Interest Period.
"INTEREST PERIOD" shall mean, with respect to any LIBOR Rate Loan,
(i) initially, the period commencing on the Borrowing Date or
conversion date, as the case may be, with respect to such LIBOR Rate Loan
and ending one, two, three or six months thereafter, as selected by the
Borrower in the notice of borrowing or notice of conversion given with
respect thereto; and
(ii) thereafter, each period commencing on the last day of the
immediately preceding Interest Period applicable to such LIBOR Rate Loan
and ending one, two, three or six months thereafter, as selected by the
Borrower by irrevocable notice to the Administrative Agent not less than
three Business Days prior to the last day of the then current Interest
Period with respect thereto;
PROVIDED that the foregoing provisions are subject to the following:
(A) if any Interest Period pertaining to a LIBOR Rate Loan
would otherwise end on a day that is not a Business Day, such
Interest Period shall be extended to the next succeeding Business
Day unless the result of such extension would be to carry such
Interest Period into another calendar month in which event such
Interest Period shall end on the immediately preceding Business Day;
(B) any Interest Period pertaining to a LIBOR Rate Loan that
begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last
Business Day of the relevant calendar month;
(C) if the Borrower shall fail to give notice as provided
above, the Borrower shall be deemed to have selected a one (1) month
LIBOR Rate Loan to replace the affected LIBOR Rate Loan;
(D) any Interest Period in respect of any Loan that would
otherwise extend beyond the applicable Maturity Date shall end on
the Maturity Date and further, with regard to the Term Loans, no
Interest Period shall extend beyond any principal amortization
payment date unless the portion of such Term Loan consisting of
Alternate Base Rate Loans together with the portion of such Term
Loan consisting of LIBOR Rate Loans with Interest Periods expiring
prior to or concurrently with the date such principal amortization
payment date is due, is at least equal to the amount of such
principal amortization payment due on such date; and
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(E) no more than eight (8) LIBOR Rate Loans may be in effect
at any time. For purposes hereof, LIBOR Rate Loans with different
Interest Periods shall be considered as separate LIBOR Rate Loans,
even if they shall begin on the same date and have the same
duration, although borrowings, extensions and conversions may, in
accordance with the provisions hereof, be combined at the end of
existing Interest Periods to constitute a new LIBOR Rate Loan with a
single Interest Period.
"ISSUING LENDER" shall mean First Union.
"ISSUING LENDER FEES" shall have the meaning set forth in Section 2.5(c).
"JOINDER AGREEMENT" shall mean a Joinder Agreement substantially in the
form of SCHEDULE 5.10, executed and delivered by an Additional Credit Party in
accordance with the provisions of Section 5.10.
"LENDER" shall have the meaning set forth in the first paragraph of this
Agreement.
"LETTERS OF CREDIT" shall mean any letter of credit issued by the Issuing
Lender pursuant to the terms hereof, as such Letters of Credit may be amended,
modified, extended, renewed or replaced from time to time.
"LETTER OF CREDIT FEE" shall have the meaning set forth in Section 2.5(b).
"LEVERAGE RATIO" shall mean, with respect to the Borrower and its
Subsidiaries on a consolidated basis for the twelve month period ending on the
last day of any fiscal quarter, the ratio of (a) Funded Debt of the Borrower and
its Subsidiaries on a consolidated basis on the last day of such period to (b)
Pro Forma Consolidated EBITDA for such twelve month period.
"LIBOR" shall mean, for any LIBOR Rate Loan for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the
London interbank offered rate for deposits in Dollars at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period. If for any reason such
rate is not available, the term "LIBOR" shall mean, for any LIBOR Rate Loan for
any Interest Period therefor, the rate per annum (rounded upwards, if necessary,
to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London
interbank offered rate for deposits in Dollars at approximately 11:00 a.m.
(London time) two Business Days prior to the first day of such Interest Period
for a term comparable to such Interest Period; PROVIDED, HOWEVER, if more than
one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be
the arithmetic mean of all such rates (rounded upwards, if necessary, to the
nearest 1/100 of 1%). If, for any reason, neither of such rates is available,
then "LIBOR" shall mean the rate per annum at which, as determined by the
Administrative Agent, Dollars in an amount comparable to the Loans then
requested are being offered to leading banks at approximately 11:00 A.M. London
time, two (2) Business Days prior to the commencement of the applicable Interest
Period for settlement in immediately available
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funds by leading banks in the London interbank market for a period equal to the
Interest Period selected.
"LIBOR LENDING OFFICE" shall mean, initially, the office of each Lender
designated as such Lender's LIBOR Lending Office shown on SCHEDULE 9.2; and
thereafter, such other office of such Lender as such Lender may from time to
time specify to the Administrative Agent and the Borrower as the office of such
Lender at which the LIBOR Rate Loans of such Lender are to be made.
"LIBOR RATE" shall mean a rate per annum (rounded upwards, if necessary,
to the next higher 1/100th of 1%) determined by the Administrative Agent
pursuant to the following formula:
LIBOR Rate = LIBOR
------------------------
1.00 - Eurodollar Reserve Percentage
"LIBOR RATE LOAN" shall mean Loans the rate of interest applicable to
which is based on the LIBOR Rate.
"LIEN" shall mean any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement and any Capital Lease having
substantially the same economic effect as any of the foregoing).
"LOAN" shall mean a Revolving Loan, a Swingline Loan and/or the Term Loan,
as appropriate.
"LOC COMMITMENT" shall mean the commitment of the Issuing Lender to issue
Letters of Credit and with respect to each Lender, the commitment of such Lender
to purchase participation interests in the Letters of Credit up to such Lender's
LOC Committed Amount as specified in SCHEDULE 2.1(A), as such amount may be
reduced from time to time in accordance with the provisions hereof.
"LOC COMMITMENT PERCENTAGE" shall mean, for each Lender, the percentage
identified as its LOC Commitment Percentage on SCHEDULE 2.1(A), as such
percentage may be modified in connection with any assignment made in accordance
with the provisions of Section 9.6(c).
"LOC COMMITTED AMOUNT" shall mean, collectively, the aggregate amount of
all of the LOC Commitments of the Lenders to issue and participate in Letters of
Credit as referenced in Section 2.3 and, individually, the amount of each
Lender's LOC Commitment as specified in SCHEDULE 2.1(A).
"LOC DOCUMENTS" shall mean, with respect to any Letter of Credit, such
Letter of Credit, any amendments thereto, any documents delivered in connection
therewith, any application therefor, and any agreements, instruments, guarantees
or other documents (whether general in
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<PAGE>
application or applicable only to such Letter of Credit) governing or providing
for (i) the rights and obligations of the parties concerned or (ii) any
collateral security for such obligations.
"LOC OBLIGATIONS" shall mean, at any time, the sum of (i) the maximum
amount which is, or at any time thereafter may become, available to be drawn
under Letters of Credit then outstanding, assuming compliance with all
requirements for drawings referred to in such Letters of Credit PLUS (ii) the
aggregate amount of all drawings under Letters of Credit honored by the Issuing
Lender but not theretofore reimbursed.
"MANDATORY BORROWING" shall have the meaning set forth in Section
2.2(b)(ii) or Section 2.3(e), as the context may require.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on (a) the
business, assets, liabilities (actual or contingent), operations, properties,
condition (financial or otherwise) or prospects of the Borrower or its
Subsidiaries taken as a whole, (b) the ability of the Borrower and the
Guarantors taken as a whole to perform their obligations, when such obligations
are required to be performed, under this Agreement, any of the Notes or any
other Credit Document or (c) the validity or enforceability of this Agreement,
any of the Notes or any of the other Credit Documents or the rights or remedies
of the Administrative Agent or the Lenders hereunder or thereunder.
"MATERIAL CONTRACT" shall mean any contract or other arrangement, whether
written or oral, to which the Borrower or any of its Subsidiaries is a party as
to which the breach, nonperformance, cancellation or failure to renew by any
party thereto could reasonably be expected to have a Material Adverse Effect.
"MATERIALS OF ENVIRONMENTAL CONCERN" shall mean any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Law, including, without limitation, asbestos,
polychlorinated biphenyls and urea-formaldehyde insulation.
"MATURITY DATE" shall mean (i) with respect to the Term Loan, the last
scheduled quarterly payment date for the Term Loan set forth in Section 2.4(b)
and (ii) with respect to the Revolving Loan or any Swingline Loan, the Revolving
Commitment Termination Date.
"MAXIMUM RATE" means, with respect to the Lenders, the maximum nonusurious
interest rate, if any, that at any time or from time to time, may be contracted
for, taken, reserved, charged, or received on the Notes or on other
Indebtedness, as the case may be, under the laws which are presently in effect
in the United States of America and the State of Texas applicable to the Lenders
and such indebtedness or, to the extent permitted by law, under such applicable
laws of the United States of America and the State of Texas which may hereafter
be in effect and which allow a higher maximum nonusurious interest rate than
applicable laws now allow. To the extent that Chapter 303 of the Texas Finance
Code (the "Code"), is relevant to the Lenders for the purposes of determining
the Maximum Rate, the Lenders elect to determine such applicable legal rate
under the Code pursuant to the "weekly ceiling," from time to time in effect, as
referred to and defined in Chapter 303 of the Code; subject, however, to the
limitations on such applicable
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ceiling referred to and defined in Chapter 303 of the Code, and further subject
to any right the Lenders may have subsequently, under applicable law, to change
the method of determining the Maximum Rate. If no Maximum Rate is established by
applicable law, then the Maximum Rate shall be equal to eighteen percent (18%).
"MOODY'S" shall mean Moody's Investors Service, Inc. and any successors
thereto.
"MULTIEMPLOYER PLAN" shall mean a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"NET CASH PROCEEDS" shall mean the aggregate cash proceeds received by any
Credit Party or any Subsidiary in respect of any Asset Disposition, Recovery
Event or Debt Issuance, net of (a) direct costs (including, without limitation,
legal, accounting and investment banking fees, and sales commissions), (b) taxes
paid or payable as a result thereof, (c) in the case of an Asset Disposition or
Recovery Event, the amount of all payments required to be made by the Borrower
or any Subsidiary to repay Indebtedness (other than the Loans) as a result of
such Asset Disposition or Recovery Event, and (d) in the case of an Asset
Disposition or Recovery Event, the amount of any reserves established to fund
contingent liabilities that are reasonably estimated to be payable during the
two years following such Asset Disposition or Recovery Event and that are
directly attributable to such Asset Disposition or Recovery Event; it being
understood that "Net Cash Proceeds" shall include, without limitation, (i) any
cash received upon the sale or other disposition of any non-cash consideration
received by the Borrower or any Subsidiary in any Asset Disposition, Recovery
Event or Debt Issuance and (ii) an amount equal to any reserves previously taken
against contingent liabilities in connection with an Asset Disposition or
Recovery Event immediately upon those reserves being determined by the Borrower
to be in excess of such contingent liabilities.
"NOTE" or "NOTES" shall mean the Revolving Notes and/or the Swingline
Note, collectively, separately or individually, as appropriate.
"NOTICE OF BORROWING" shall mean the written notice of borrowing as
referenced and defined in Section 2.1(b)(i).
"NOTICE OF CONVERSION" shall mean the written notice of extension or
conversion as referenced and defined in Section 2.9.
"OBLIGATIONS" shall mean, collectively, Loans and LOC Obligations.
"PARTICIPANT" shall have the meaning set forth in Section 9.6(b).
"PARTICIPATION INTEREST" shall mean the purchase by a Lender of a
participation interest in Swingline Loans as provided in Section 2.2(b)(ii) or
in Letters of Credit as provided in Section 2.3.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
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<PAGE>
"PERMITTED ACQUISITION" shall have the meaning set forth in Section 6.6(c)
hereof.
"PERMITTED INVESTMENTS" shall mean:
(i) cash and Cash Equivalents;
(ii) receivables owing to the Borrower or any of its Subsidiaries or
any receivables and advances to suppliers, in each case if created,
acquired or made in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms;
(iii) investments in and loans to any Credit Parties;
(iv) loans and advances to officers, directors, employees and
Affiliates in an aggregate amount not to exceed $500,000 at any time
outstanding;
(v) investments (including debt obligations) received in connection
with the bankruptcy or reorganization of suppliers and customers and in
settlement of delinquent obligations of, and other disputes with,
customers and suppliers arising in the ordinary course of business;
(vi) investments, acquisitions or transactions permitted under
Section 6.6(b) and (c); and
(vii) additional loan advances and/or investments of a nature not
contemplated by the foregoing clauses hereof, PROVIDED that such loans,
advances and/or investments made pursuant to this clause (vii) shall not
exceed an aggregate amount of (a) $750,000 from the Closing Date until
June 30, 2001 and (b) $500,000 at all times thereafter.
As used herein, "INVESTMENT" shall mean all investments, in cash or by
delivery of property made, directly or indirectly in, to or from any Person,
whether by acquisition of shares of Capital Stock, property, assets,
indebtedness or other obligations or securities or by loan advance, capital
contribution or otherwise.
"PERMITTED LIENS" shall mean:
(i) Liens created by or otherwise existing, under or in connection
with this Agreement or the other Credit Documents in favor of the Lenders;
(ii) Liens in favor of a Lender hereunder in connection with Hedging
Agreements, but only (A) to the extent such Liens secure obligations under
Hedging Agreements with any Lender, or any Affiliate of a Lender, (B) to
the extent such Liens are on the same collateral as to which the
Administrative Agent on behalf of the Lenders also has a Lien and (C) if
such provider and the Lenders shall share PARI PASSU in the collateral
subject to such Liens;
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<PAGE>
(iii) purchase money Liens securing purchase money indebtedness (and
refinancings thereof) to the extent permitted under Section 6.1(c);
(iv) Liens for taxes, assessments, charges or other governmental
levies not yet due or as to which the period of grace (not to exceed 60
days), if any, related thereto has not expired or which are being
contested in good faith by appropriate proceedings; PROVIDED that adequate
reserves with respect thereto are maintained on the books of the Borrower
or its Subsidiaries, as the case may be, in conformity with GAAP (or, in
the case of Subsidiaries with significant operations outside of the United
States of America, generally accepted accounting principles in effect from
time to time in their respective jurisdictions of incorporation);
(v) statutory landlord Liens and carriers', warehousemen's,
mechanics', materialmen's, repairmen's or other like Liens arising in the
ordinary course of business which are not overdue for a period of more
than 60 days or which are being contested in good faith by appropriate
proceedings;
(vi) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation and deposits
securing liability to insurance carriers under insurance or self-insurance
arrangements;
(vii) deposits to secure the performance of bids, trade contracts,
(other than for borrowed money), leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business;
(viii) any extension, renewal or replacement (or successive
extensions, renewals or replacements) , in whole or in part, of any Lien
referred to in the foregoing clauses; PROVIDED that such extension,
renewal or replacement Lien shall be limited to all or a part of the
property which secured the Lien so extended, renewed or replaced (plus
improvements on such property);
(ix) Liens existing on the Closing Date and set forth on SCHEDULE
1.1(B); provided that (a) no such Lien shall at any time be extended to
cover property or assets other than the property or assets 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;
(x) Liens arising in connection with Capitalized Leases to the
extent permitted under Section 6.1(i); and
(xi) Liens securing Indebtedness permitted under Section 6.1(j).
"PERMITTED REPURCHASE BASKET" means, as of any date of determination, an
amount equal to the sum of (a) for all fiscal quarters ending after June 30,
2000, in which the Borrower's Consolidated EBITDA for each such quarter exceeds
$25,000,000, the amount by which the
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Borrower's Consolidated EBITDA for each such quarter exceeds $25,000,000 MINUS
(b) for all fiscal quarters ending after June 30, 2000, in which the Borrower's
Consolidated EBITDA for each such quarter is less than $25,000,000, the amount
by which the Borrower's Consolidated EBITDA for such quarter is less than
$25,000,000 MINUS (c) the amount of Capital Stock repurchased by the Borrower
after June 30, 2000.
"PERSON" shall mean an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
"PLAN" shall mean, at any particular time, any employee benefit plan which
is covered by Title IV of ERISA and in respect of which the Borrower or a
Commonly Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"PLEDGE AGREEMENT" shall mean the Pledge Agreement dated as of the Closing
Date given by the Credit Parties to the Administrative Agent, as the same may
from time to time be amended, supplemented or otherwise modified in accordance
with the terms hereof and thereof.
"PRIME RATE" shall have the meaning set forth in the definition of
Alternate Base Rate.
"PRO FORMA BASIS" shall mean, with respect to any Permitted Acquisition or
other transaction permitted hereunder, that such Permitted Acquisition or other
transaction shall be deemed to have occurred as of the first day of the four
fiscal-quarter period ending as of the most recent fiscal quarter end for which
financial statements have been delivered pursuant to Sections 5.1(a) or 5.1(b),
as applicable.
"PRO FORMA COMPLIANCE CERTIFICATE" shall mean a certificate of a
Responsible Officer delivered to the Administrative Agent in connection with a
Permitted Acquisition and containing reasonably detailed calculations, upon
giving effect to the applicable transaction on a Pro Forma Basis, of the
financial covenants set forth in Section 5.9 as of the closing date for such
Permitted Acquisition utilizing the financial statements most recently delivered
pursuant to Sections 5.1(a) or 5.1(b), as applicable.
"PRO FORMA CONSOLIDATED EBITDA" shall mean, for any period, as to the
Borrower and its consolidated Subsidiaries, Consolidated EBITDA of the Borrower
and its consolidated Subsidiaries plus (or minus), without duplication, the
allocable share of Consolidated EBITDA, for such period of any Person acquired
or divested during such period on a Pro Forma Basis (calculated as if such
Person had been a Subsidiary for all of such period).
"PROPERTIES" shall have the meaning set forth in Section 3.10(a).
"PROPERTY" shall mean any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"PURCHASING LENDERS" shall have the meaning set forth in Section 9.6(c).
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"RECOVERY EVENT" shall mean the receipt by the Borrower or any of its
Subsidiaries of any cash insurance proceeds or condemnation award payable by
reason of theft, loss, physical destruction or damage, taking or similar event
with respect to any of their respective property or assets.
"REGISTER" shall have the meaning set forth in Section 9.6(d).
"REMOTE SALES OFFICE" shall mean any office or other location of the
Borrower or any of its Subsidiaries (i) that is not owned by the Borrower or any
of its Subsidiaries, (ii) at which no manufacturing assets are maintained, (iii)
that has square footage of less than 800 square feet and (iv) at which assets
with a book value or fair market value of less than $50,000 in the aggregate for
all such assets at such location are maintained.
"REORGANIZATION" shall mean, with respect to any Multiemployer Plan, the
condition that such Plan is in reorganization within the meaning of such term as
used in Section 4241 of ERISA.
"REPORTABLE EVENT" shall mean any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty-day notice
period is waived under PBGC Reg. ss.4043.
"REQUIRED LENDERS" shall mean (i) Lenders holding in the aggregate more
than 50% of all Revolving Loans and LOC Obligations then outstanding at such
time PLUS the aggregate unused Revolving Commitments at such time (treating for
purposes hereof in the case of Swingline Loans and LOC Obligations, in the case
of the Swingline Lender and the Issuing Lender, only the portion of the
Swingline Loans and the LOC Obligations of the Swingline Lender and the Issuing
Lender, respectively, which is not subject to the Participation Interests of the
other Lenders and, in the case of the Lenders other than the Swingline Lender
and the Issuing Lender, the Participation Interests of such Lenders in Swingline
Loans and LOC Obligations hereunder as direct Obligations) and (ii) Lenders
holding in the aggregate more than 50% of all Term Loans then outstanding at
such time; PROVIDED, HOWEVER, (i) that if any Lender shall be a Defaulting
Lender at such time, then there shall be excluded from the determination of
Required Lenders, Obligations (including Participation Interests) owing to such
Defaulting Lender and such Defaulting Lender's Commitments, or after termination
of the Commitments, the principal balance of the Obligations owing to such
Defaulting Lender and (ii) in no event shall less than four (4) Lenders
constitute Required Lenders.
"REQUIREMENT OF LAW" shall mean, as to any Person, the Certificate of
Incorporation and By-laws or other organizational or governing documents of such
Person, and each law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
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"RESPONSIBLE OFFICER" shall mean, as to (a) the Borrower, the President,
the Chief Executive Officer, the Chief Financial Officer, the Treasurer or
Assistant Treasurer or (b) any other Credit Party, any duly authorized officer
thereof.
"RESTRICTED PAYMENT" shall mean (a) any dividend or other distribution,
direct or indirect, on account of any shares of any class of Capital Stock of
the Borrower or any of its Subsidiaries, now or hereafter outstanding, (b) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of Capital
Stock of the Borrower or any of its Subsidiaries, now or hereafter outstanding
or (c) any payment made to retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire shares of any class of
Capital Stock of the Borrower or any of its Subsidiaries, now or hereafter
outstanding.
"REVOLVING COMMITMENT" shall mean, with respect to each Lender, the
commitment of such Lender to make Revolving Loans in an aggregate principal
amount at any time outstanding up to such Lender's Revolving Committed Amount.
"REVOLVING COMMITMENT PERCENTAGE" shall mean, for each Lender, the
percentage identified as its Revolving Commitment Percentage on SCHEDULE 2.1(A),
as such percentage may be modified in connection with any assignment made in
accordance with the provisions of Section 9.6(c).
"REVOLVING COMMITTED AMOUNT" shall mean, collectively, the aggregate
amount of all Revolving Commitments as referenced in Section 2.1(a), as such
amount may be reduced or increased from time to time in accordance with the
provisions hereof.
"REVOLVING COMMITMENT TERMINATION DATE" shall mean December 11, 2005.
"REVOLVING LOANS" shall have the meaning set forth in Section 2.1.
"REVOLVING NOTE" or "REVOLVING NOTES" shall mean the promissory notes of
the Borrower in favor of each of the Lenders evidencing the Revolving Loans
provided pursuant to Section 2.1(e), individually or collectively, as
appropriate, as such promissory notes may be amended, modified, supplemented,
extended, renewed or replaced from time to time.
"S&P" shall mean Standard & Poor's Ratings Group, a division of McGraw
Hill, Inc. and any successors thereto.
"SCHEDULED PAYMENTS OF FUNDED DEBT" shall mean, on any date of
determination, with respect to the Borrower and its Subsidiaries on a
consolidated basis, the sum of all scheduled payments of principal on Funded
Debt to be made during the twelve month period then beginning (including the
principal component of payments due on Capital Leases or under any synthetic
lease, tax retention operating lease, off-balance sheet loan or similar
off-balance sheet financing product), it being understood that Scheduled
Payments of Funded Debt shall not include optional prepayments or the mandatory
prepayments required pursuant to Section 2.6.
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"SECURITY AGREEMENT" shall mean the Security Agreement dated as of the
Closing Date given by the Borrower and the other Credit Parties to the
Administrative Agent, as amended, modified or supplemented from time to time in
accordance with its terms.
"SECURITY DOCUMENTS" shall mean the Security Agreement, the Pledge
Agreement and such other documents executed and delivered in connection with the
attachment and perfection of the Administrative Agent's security interests and
liens arising thereunder, including, without limitation, UCC financing
statements and patent and trademark filings.
"SINGLE EMPLOYER PLAN" shall mean any Plan which is not a Multiemployer
Plan.
"SPECIFIED SALES" shall mean (a) the sale, transfer, lease or other
disposition of inventory, and materials in the ordinary course of business and
(b) the sale, transfer or other disposition of Permitted Investments described
in clause (i) of the definition thereof.
"STOCK REPURCHASES" shall mean the purchase by the Borrower of its Capital
Stock as permitted pursuant to Section 6.12 hereof.
"SUBORDINATED INDEBTEDNESS" shall mean any and all Indebtedness of the
Borrower or any of its Subsidiaries which is subordinated in right of payment to
the prior payment in full of the Credit Party Obligations.
"SUBSIDIARY" shall mean, as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such other
ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers of
such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Borrower.
"SWINGLINE COMMITMENT" shall mean the commitment of the Swingline Lender
to make Swingline Loans in an aggregate principal amount at any time outstanding
up to the Swingline Committed Amount, and the commitment of the Lenders to
purchase participation interests in the Swingline Loans as provided in Section
2.2(b)(ii), as such amounts may be reduced from time to time in accordance with
the provisions hereof.
"SWINGLINE COMMITTED AMOUNT" shall mean the amount of the Swingline
Lender's Swingline Commitment as specified in Section 2.2(a).
"SWINGLINE LENDER" shall mean First Union, in its capacity as such.
"SWINGLINE LOAN" or "SWINGLINE LOANS" shall have the meaning set forth in
Section 2.2(a).
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"SWINGLINE NOTE" shall mean the promissory note of the Borrower in favor
of the Swingline Lender evidencing the Swingline Loans provided pursuant to
Section 2.2(d), as such promissory note may be amended, modified, supplemented,
extended, renewed or replaced from time to time.
"TAXES" shall have the meaning set forth in Section 2.17.
"TERM LOAN" shall have the meaning set forth in Section 2.4(a).
"TERM LOAN COMMITMENT" shall mean, with respect to each Lender, the
commitment of such Lender to make its portion of the Term Loan in a principal
amount equal to such Lender's Term Loan Commitment Percentage of the Term Loan
Committed Amount (and for purposes of making determinations of Required Lenders
hereunder after the Closing Date, the principal amount outstanding on the Term
Loan).
"TERM LOAN COMMITMENT PERCENTAGE" shall mean, for any Lender, the
percentage identified as its Term Loan Commitment Percentage on SCHEDULE 2.1(A),
as such percentage may be modified in connection with any assignment made in
accordance with the provisions of Section 9.6.
"TERM LOAN COMMITTED AMOUNT" shall have the meaning set forth in Section
2.4(a).
"TERM NOTE" or "TERM NOTES" shall mean the promissory notes of the
Borrower in favor of each of the Lenders evidencing the portion of the Term Loan
provided pursuant to Section 2.4(d), individually or collectively, as
appropriate, as such promissory notes may be amended, modified, restated,
supplemented, extended, renewed or replaced from time to time.
"TRANCHE" shall mean the collective reference to LIBOR Rate Loans whose
Interest Periods begin and end on the same day. A Tranche may sometimes be
referred to as a "LIBOR Tranche".
"TRANSFER EFFECTIVE DATE" shall have the meaning set forth in each
Commitment Transfer Supplement.
"2.18 CERTIFICATE" shall have the meaning set forth in Section 2.18.
"TYPE" shall mean, as to any Loan, its nature as an Alternate Base Rate
Loan or LIBOR Rate Loan, as the case may be.
"VOTING STOCK" shall mean, 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.
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SECTION 1.2 OTHER DEFINITIONAL PROVISIONS.
(a) Unless otherwise specified therein, all terms defined in this
Agreement shall have the defined meanings when used in the Notes or other
Credit Documents or any certificate or other document made or delivered
pursuant hereto.
(b) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement
as a whole and not to any particular provision of this Agreement, and
Section, subsection, Schedule and Exhibit references are to this Agreement
unless otherwise specified.
(c) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 1.3 ACCOUNTING TERMS.
Unless otherwise specified herein, all accounting terms used herein shall
be interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP applied on a basis consistent with the most recent audited
consolidated financial statements of the Borrower delivered to the Lenders;
PROVIDED that, if the Borrower notifies the Administrative Agent that it wishes
to amend any covenant in Section 5.9 to eliminate the effect of any change in
GAAP on the operation of such covenant (or if the Administrative Agent notifies
the Borrower that the Required Lenders wish to amend Section 5.9 for such
purpose), then the Borrower's compliance with such covenant shall be determined
on the basis of GAAP in effect immediately before the relevant change in GAAP
became effective, until either such notice is withdrawn or such covenant is
amended in a manner satisfactory to the Borrower and the Required Lenders.
The Borrower shall deliver to the Administrative Agent and each Lender at
the same time as the delivery of any annual or quarterly financial statements
given in accordance with the provisions of Section 5.1, (i) a description in
reasonable detail of any material change in the application of accounting
principles employed in the preparation of such financial statements from those
applied in the most recently preceding quarterly or annual financial statements
as to which no objection shall have been made in accordance with the provisions
above and (ii) a reasonable estimate of the effect on the financial statements
on account of such changes in application.
Notwithstanding the above, the parties hereto acknowledge and agree that,
for purposes of calculations that are designated herein to be made on a "Pro
Forma Basis", (i) any Indebtedness of such Person that is acquired during such
period which is retired in connection with a Permitted Acquisition shall be
excluded from such calculations and deemed to have been retired as of the first
day of such applicable period and (ii) income statement items and other balance
sheet items (whether positive or negative) attributable to the such Person
acquired in such transaction shall be included in such calculations to the
extent relating to the period for which the Pro Forma Basis calculations are
being made, subject to adjustments mutually acceptable to the Administrative
Agent and the Borrower.
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ARTICLE II
THE LOANS; AMOUNT AND TERMS
SECTION 2.1 REVOLVING LOANS.
(a) REVOLVING COMMITMENT. During the Commitment Period, subject to
the terms and conditions hereof, each Lender severally agrees to make
revolving credit loans ("REVOLVING LOANS") to the Borrower from time to
time for the purposes hereinafter set forth; PROVIDED, HOWEVER, that (i)
with regard to each Lender individually, the sum of such Lender's share of
outstanding Revolving Loans PLUS such Lender's Revolving Commitment
Percentage of Swingline Loans PLUS such Lender's LOC Commitment Percentage
of LOC Obligations shall not exceed such Lender's Revolving Commitment
Percentage of the aggregate Revolving Committed Amount, and (ii) with
regard to the Lenders collectively, the sum of the aggregate amount of
outstanding Revolving Loans PLUS Swingline Loans PLUS LOC Obligations
shall not exceed the aggregate Revolving Committed Amount. For purposes
hereof, the aggregate amount available hereunder shall be ONE HUNDRED
SEVENTY-FIVE MILLION DOLLARS ($175,000,000) (as such aggregate maximum
amount may be reduced from time to time as provided in Section 2.6 or
increased from time to time as provided in Section 2.20, the "REVOLVING
COMMITTED AMOUNT"). Revolving Loans may consist of Alternate Base Rate
Loans or LIBOR Rate Loans, or a combination thereof, as the Borrower may
request, and may be repaid and reborrowed in accordance with the
provisions hereof. LIBOR Rate Loans shall be made by each Lender at its
LIBOR Lending Office and Alternate Base Rate Loans at its Domestic Lending
Office.
(b) REVOLVING LOAN BORROWINGS.
(i) NOTICE OF BORROWING. The Borrower may request a Revolving
Loan borrowing by written notice (or telephone notice promptly
confirmed in writing which confirmation may be by fax) to the
Administrative Agent not later than 12:00 noon (Charlotte, North
Carolina time) on the Business Day of the requested borrowing in the
case of Alternate Base Rate Loans, and on the third Business Day
prior to the date of the requested borrowing in the case of LIBOR
Rate Loans. Each such request for borrowing shall be irrevocable and
shall specify (A) that a Revolving Loan is requested, (B) the date
of the requested borrowing (which shall be a Business Day), (C) the
aggregate principal amount to be borrowed and (D) whether the
borrowing shall be comprised of Alternate Base Rate Loans, LIBOR
Rate Loans or a combination thereof, and if LIBOR Rate Loans are
requested, the Interest Period(s) therefor. A form of Notice of
Borrowing (a "NOTICE OF BORROWING") is attached as SCHEDULE
2.1(B)(I). If the Borrower shall fail to specify in any such Notice
of Borrowing (I) an applicable Interest Period in the case of a
LIBOR Rate Loan, then such notice shall be deemed to be a request
for an Interest Period of one month, or (II) the type of
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Revolving Loan requested, then such notice shall be deemed to be a
request for a one (1) month LIBOR Rate Loan hereunder. The
Administrative Agent shall give notice to each Lender promptly upon
receipt of each Notice of Borrowing, the contents thereof and each
such Lender's share thereof.
(ii) MINIMUM AMOUNTS. Each Revolving Loan borrowing shall be
in a minimum aggregate amount of (A) for Revolving Loans made as
LIBOR Rate Loans, $2,500,000 and integral multiples of $100,000 in
excess thereof or (B) for Revolving Loans made as Alternate Base
Rate Loans, $1,000,000 and integral multiples of $100,000 in excess
thereof (or the remaining amount of the Revolving Committed Amount,
if less).
(iii) ADVANCES. Each Lender will make its Revolving Commitment
Percentage of each Revolving Loan borrowing available to the
Administrative Agent for the account of the Borrower at the office
of the Administrative Agent specified in SCHEDULE 9.2, or at such
other office as the Administrative Agent may designate in writing,
by 12:00 noon (Charlotte, North Carolina time) on the date specified
in the applicable Notice of Borrowing in Dollars and in funds
immediately available to the Administrative Agent. Such borrowing
will then be made available to the Borrower by the Administrative
Agent by crediting the account of the Borrower on the books of such
office with the aggregate of the amounts made available to the
Administrative Agent by the Lenders and in like funds as received by
the Administrative Agent.
(c) REPAYMENT. The principal amount of all Revolving Loans shall be
due and payable in full on the Maturity Date.
(d) INTEREST. Subject to the provisions of Section 2.8, Revolving
Loans shall bear interest as follows:
(i) ALTERNATE BASE RATE LOANS. During such periods as
Revolving Loans shall be comprised of Alternate Base Rate Loans,
each such Alternate Base Rate Loan shall bear interest at a per
annum rate equal to the sum of the Alternate Base Rate PLUS the
Applicable Percentage; and
(ii) LIBOR RATE LOANS. During such periods as Revolving Loans
shall be comprised of LIBOR Rate Loans, each such LIBOR Rate Loan
shall bear interest at a per annum rate equal to the sum of the
LIBOR Rate PLUS the Applicable Percentage.
Interest on Revolving Loans shall be payable in arrears on each Interest
Payment Date.
(e) REVOLVING NOTES. Each Lender's Revolving Commitment Percentage
of the Revolving Loans shall be evidenced by a duly executed promissory
note of the Borrower to such Lender in substantially the form of SCHEDULE
2.1(E).
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SECTION 2.2 SWINGLINE LOAN SUBFACILITY.
(a) SWINGLINE COMMITMENT. During the Commitment Period, subject to
the terms and conditions hereof, the Swingline Lender, in its individual
capacity, agrees to make certain revolving credit loans to the Borrower
(each a "SWINGLINE LOAN" and, collectively, the "SWINGLINE LOANS") for the
purposes hereinafter set forth; provided, HOWEVER, (i) the aggregate
amount of Swingline Loans outstanding at any time shall not exceed FIFTEEN
MILLION DOLLARS ($15,000,000) (the "SWINGLINE COMMITTED AMOUNT"), and (ii)
the sum of the aggregate amount of outstanding Revolving Loans plus
Swingline Loans PLUS LOC Obligations shall not exceed the aggregate
Revolving Committed Amount. Swingline Loans hereunder may be repaid and
reborrowed in accordance with the provisions hereof.
(b) SWINGLINE LOAN BORROWINGS.
(i) NOTICE OF BORROWING AND DISBURSEMENT. The Swingline Lender
will make Swingline Loans available to the Borrower on any Business
Day upon request made by the Borrower not later than 12:00 Noon
(Charlotte, North Carolina time) on such Business Day. A notice of
request for Swingline Loan borrowing shall be made in the form of
SCHEDULE 2.1(B)(I) with appropriate modifications. Swingline Loan
borrowings hereunder shall be made in minimum amounts of $100,000
and in integral amounts of $50,000 in excess thereof.
(ii) REPAYMENT OF SWINGLINE LOANS. Each Swingline Loan
borrowing shall be due and payable on the Maturity Date. The
Swingline Lender may, at any time, in its sole discretion, by
written notice to the Borrower and the Administrative Agent, demand
repayment of its Swingline Loans by way of a Revolving Loan
borrowing, in which case the Borrower shall be deemed to have
requested a Revolving Loan borrowing comprised entirely of Alternate
Base Rate Loans in the amount of such Swingline Loans; PROVIDED,
HOWEVER, that, in the following circumstances, any such demand shall
also be deemed to have been given one Business Day prior to each of
(A) the Maturity Date, (B) the occurrence of any Event of Default
described in Section 7.1(e), (C) upon acceleration of the Credit
Party Obligations hereunder, whether on account of an Event of
Default described in Section 7.1(e) or any other Event of Default,
and (D) the exercise of remedies in accordance with the provisions
of Section 7.2 hereof (each such Revolving Loan borrowing made on
account of any such deemed request therefor as provided herein being
hereinafter referred to as a "MANDATORY BORROWING"). Each Lender
hereby irrevocably agrees to make such Revolving Loans promptly upon
any such request or deemed request on account of each Mandatory
Borrowing in the amount and in the manner specified in the preceding
sentence and on the same such date NOTWITHSTANDING (I) the amount of
Mandatory Borrowing may not comply with the minimum amount for
borrowings of Revolving Loans otherwise required hereunder, (II)
whether any conditions specified in Section 4.2 are then satisfied,
(III) whether a Default or an Event of Default then exists, (IV)
failure of any such request or deemed request for
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Revolving Loans to be made by the time otherwise required in Section
2.1(b)(i), (V) the date of such Mandatory Borrowing, or (VI) any
reduction in the Revolving Committed Amount or termination of the
Revolving Commitments immediately prior to such Mandatory Borrowing
or contemporaneously therewith. In the event that any Mandatory
Borrowing cannot for any reason be made on the date otherwise
required above (including, without limitation, as a result of the
commencement of a proceeding under the Bankruptcy Code with respect
to the Borrower), then each Lender hereby agrees that it shall
forthwith purchase (as of the date the Mandatory Borrowing would
otherwise have occurred, but adjusted for any payments received from
the Borrower on or after such date and prior to such purchase) from
the Swingline Lender such participations in the outstanding
Swingline Loans as shall be necessary to cause each such Lender to
share in such Swingline Loans ratably based upon its respective
Revolving Commitment Percentage (determined before giving effect to
any termination of the Commitments pursuant to Section 7.2),
PROVIDED that (x) all interest payable on the Swingline Loans shall
be for the account of the Swingline Lender until the date as of
which the respective participation is purchased, and (y) at the time
any purchase of participations pursuant to this sentence is actually
made, the purchasing Lender shall be required to pay to the
Swingline Lender interest on the principal amount of such
participation purchased for each day from and including the day upon
which the Mandatory Borrowing would otherwise have occurred to but
excluding the date of payment for such participation, at the rate
equal to, if paid within two (2) Business Days of the date of the
Mandatory Borrowing, the Federal Funds Effective Rate, and
thereafter at a rate equal to the Alternate Base Rate.
(c) INTEREST ON SWINGLINE LOANS. Subject to the provisions of
Section 2.8, Swingline Loans shall bear interest at a per annum rate equal
to the Alternate Base Rate PLUS the Applicable Margin for Revolving Loans
that are Alternate Base Rate Loans. Interest on Swingline Loans shall be
payable in arrears on each Interest Payment Date.
(d) SWINGLINE NOTE. The Swingline Loans shall be evidenced by a duly
executed promissory note of the Borrower to the Swingline Lender in the
original amount of the Swingline Committed Amount and substantially in the
form of SCHEDULE 2.2(D).
SECTION 2.3 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 consistent with customary practice
at such time, during the Commitment Period the Issuing Lender shall issue,
and the Lenders shall participate in, Letters of Credit for the account of
the Borrower from time to time upon request in a form acceptable to the
Issuing Lender; PROVIDED, HOWEVER, that (i) the aggregate amount of LOC
Obligations shall not at any time exceed TEN MILLION DOLLARS ($10,000,000)
(the "LOC COMMITTED AMOUNT"), (ii) the sum of the aggregate amount of
Revolving Loans PLUS Swingline Loans PLUS LOC Obligations shall not at any
time
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exceed the aggregate Revolving Committed Amount, (iii) all Letters of
Credit shall be denominated in U.S. Dollars and (iv) Letters of Credit
shall be issued for the purpose of supporting tax-advantaged variable rate
demand note financing and for other lawful corporate purposes and may be
issued as standby letters of credit, including in connection with workers'
compensation and other insurance programs, and trade letters of credit.
Except as otherwise expressly agreed upon by all the Lenders, no Letter of
Credit shall have an original expiry date more than twelve (12) months
from the date of issuance; PROVIDED, HOWEVER, so long as no Default or
Event of Default has occurred and is continuing and subject to the other
terms and conditions to the issuance of Letters of Credit hereunder, the
expiry dates of Letters of Credit may be extended annually or periodically
from time to time on the request of the Borrower or by operation of the
terms of the applicable Letter of Credit to a date not more than twelve
(12) months from the date of extension; provided, FURTHER, that no Letter
of Credit, as originally issued or as extended, shall have an expiry date
extending beyond the Maturity Date. Each Letter of Credit shall comply
with the related LOC Documents. The issuance and expiry date of each
Letter of Credit shall be a Business Day. Any Letters of Credit issued
hereunder shall be in a minimum original face amount of $50,000 or such
other amount as agreed by the Administrative Agent and the Borrower. First
Union shall be the Issuing Lender on all Letters of Credit issued after
the Closing Date.
(b) NOTICE AND REPORTS. The request for the issuance of a Letter of
Credit shall be submitted to the Issuing Lender at least three (3)
Business Days prior to the requested date of issuance. The Issuing Lender
will promptly upon request provide to the Administrative Agent for
dissemination to the Lenders a detailed report specifying the Letters of
Credit which are then issued and outstanding and any activity with respect
thereto which may have occurred since the date of any prior report, and
including therein, among other things, the account party, the beneficiary,
the face amount, expiry date as well as any payments or expirations which
may have occurred. The Issuing Lender will further provide to the
Administrative Agent promptly upon request copies of the Letters of
Credit. The Issuing Lender will provide to the Administrative Agent
promptly upon request a summary report of the nature and extent of LOC
Obligations then outstanding.
(c) PARTICIPATIONS. Each Lender upon issuance of a Letter of Credit
(or, in the case of each Existing Letter of Credit, on the Closing Date),
shall be deemed to have purchased without recourse a risk participation
from the Issuing Lender in such Letter of Credit and the obligations
arising thereunder and any collateral relating thereto, in each case in an
amount equal to its LOC Commitment Percentage of the obligations under
such Letter of Credit and shall absolutely, unconditionally and
irrevocably assume, as primary obligor and not as surety, and be obligated
to pay to the Issuing Lender therefor and discharge when due, its LOC
Commitment Percentage of the obligations arising under such Letter of
Credit. Without limiting the scope and nature of each Lender's
participation in any Letter of Credit, to the extent that the Issuing
Lender has not been reimbursed as required hereunder or under any LOC
Document, each such Lender shall pay to the Issuing Lender its LOC
Commitment Percentage of such unreimbursed drawing in same day funds on
the day of notification by the Issuing Lender of an unreimbursed drawing
pursuant to the provisions of subsection (d) hereof. The obligation
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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. Each Existing Letter of Credit shall be
deemed for all purposes of this Agreement and the other Credit Documents
to be a Letter of Credit.
(d) REIMBURSEMENT. In the event of any drawing under any Letter of
Credit, the Issuing Lender will promptly notify the Borrower and the
Administrative Agent. The Borrower shall reimburse the Issuing Lender on
the day of drawing under any Letter of Credit (with the proceeds of a
Swingline Loan or a Revolving Loan obtained hereunder or otherwise) in
same day funds as provided herein or in the LOC Documents. If the Borrower
shall fail to reimburse the Issuing Lender as provided herein, the
unreimbursed amount of such drawing shall bear interest at a rate equal to
the Default Rate. Unless the Borrower shall immediately notify the Issuing
Lender and the Administrative Agent of its intent to otherwise reimburse
the Issuing Lender, the Borrower shall be deemed to have requested a
Revolving Loan in the amount of the drawing as provided in subsection (e)
hereof, the proceeds of which will be used to satisfy the reimbursement
obligations. Absent the gross negligence or willful misconduct of any such
Person, the Borrower's reimbursement obligations hereunder shall be
absolute and unconditional under all circumstances irrespective of any
rights of set-off, counterclaim or defense to payment the Borrower may
claim or have against the Issuing Lender, the Administrative Agent, the
Lenders, the beneficiary of the Letter of Credit drawn upon or any other
Person, including without limitation any defense based on any failure of
the Borrower to receive consideration or the legality, validity,
regularity or unenforceability of the Letter of Credit. The Issuing Lender
will promptly notify the other Lenders of the amount of any unreimbursed
drawing and each Lender shall promptly pay to the Administrative Agent for
the account of the Issuing Lender in Dollars and in immediately available
funds, the amount of such Lender's LOC Commitment Percentage of such
unreimbursed drawing. Such payment shall be made on the day such notice is
received by such Lender from the Issuing Lender if such notice is received
at or before 2:00 P.M. (Charlotte, North Carolina time), otherwise such
payment shall be made at or before 12:00 Noon (Charlotte, North Carolina
time) on the Business Day next succeeding the day such notice is received.
If such Lender does not pay such amount to the Issuing Lender in full upon
such request, such Lender shall, on demand, pay to the Administrative
Agent for the account of the Issuing Lender interest on the unpaid amount
during the period from the date of such drawing until such Lender pays
such amount to the Issuing Lender in full at a rate per annum equal to, if
paid within two (2) Business Days of the date of drawing, the Federal
Funds Effective Rate and thereafter at a rate equal to the Alternate Base
Rate. Each Lender's obligation to make such payment to the Issuing Lender,
and the right of the Issuing Lender to receive the same, shall be absolute
and unconditional, shall not be affected by any circumstance whatsoever
and without regard to the termination of this Agreement or the Commitments
hereunder, the existence of a Default or Event of Default or the
acceleration of the Credit Party Obligations hereunder and shall be made
without any offset, abatement, withholding or reduction whatsoever.
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(e) REPAYMENT WITH REVOLVING LOANS. On any day on which the Borrower
shall have requested, or been deemed to have requested, a Revolving Loan
to reimburse a drawing under a Letter of Credit, the Administrative Agent
shall give notice to the Lenders that a Revolving Loan has been requested
or deemed requested in connection with a drawing under a Letter of Credit,
in which case a Revolving Loan borrowing comprised entirely of Alternate
Base Rate Loans (each such borrowing, a "MANDATORY BORROWING") shall be
immediately made (without giving effect to any termination of the
Commitments pursuant to Section 7.2) PRO RATA based on each Lender's
respective Revolving Commitment Percentage (determined before giving
effect to any termination of the Commitments pursuant to Section 7.2) and
in the case of both clauses (i) and (ii) the proceeds thereof shall be
paid directly to the Issuing Lender for application to the respective LOC
Obligations. Each Lender hereby irrevocably agrees to make such Revolving
Loans immediately upon any such request or deemed request on account of
each Mandatory Borrowing in the amount and in the manner specified in the
preceding sentence and on the same such date NOTWITHSTANDING (i) the
amount of Mandatory Borrowing may not comply with the minimum amount for
borrowings of Revolving Loans otherwise required hereunder, (ii) whether
any conditions specified in Section 4.2 are then satisfied, (iii) whether
a Default or an Event of Default then exists, (iv) failure for any such
request or deemed request for Revolving Loan to be made by the time
otherwise required in Section 2.1(b), (v) the date of such Mandatory
Borrowing, or (vi) any reduction in the Revolving Committed Amount after
any such Letter of Credit may have been drawn upon. In the event that any
Mandatory Borrowing cannot for any reason be made on the date otherwise
required above (including, without limitation, as a result of the
commencement of a proceeding under the Bankruptcy Code with respect to the
Borrower), then each such Lender hereby agrees that it shall forthwith
fund (as of the date the Mandatory Borrowing would otherwise have
occurred, but adjusted for any payments received from the Borrower on or
after such date and prior to such purchase) its Participation Interests in
the outstanding LOC Obligations; PROVIDED, FURTHER, that in the event any
Lender shall fail to fund its Participation Interest on the day the
Mandatory Borrowing would otherwise have occurred, then the amount of such
Lender's unfunded Participation Interest therein shall bear interest
payable to the Issuing Lender upon demand, at the rate equal to, if paid
within two (2) Business Days of such date, the Federal Funds Effective
Rate, and thereafter at a rate equal to the Alternate Base Rate.
(f) MODIFICATION, EXTENSION. The issuance of any renewal or
extension to any Letter of Credit or any supplement, modification or
amendment in the nature of a renewal or extension thereof, shall, for
purposes hereof, be treated in all respects the same as the issuance of a
new Letter of Credit hereunder.
(g) UNIFORM CUSTOMS AND PRACTICES. The Issuing Lender shall have the
Letters of Credit be subject to The Uniform Customs and Practice for
Documentary Credits, as published as of the date of issue by the
International Chamber of Commerce (the "UCP"), in which case the UCP may
be incorporated therein and deemed in all respects to be a part thereof.
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SECTION 2.4 TERM LOAN.
(a) TERM LOAN. Subject to the terms and conditions hereof and in
reliance upon the representations and warranties set forth herein, each
Lender severally agrees to make available to the Borrower on the Closing
Date such Lender's Term Loan Commitment Percentage of a term loan in
Dollars (the "TERM LOAN") in the aggregate principal amount of FIFTY
MILLION DOLLARS ($50,000,000) (the "TERM LOAN COMMITTED AMOUNT") for the
purposes hereinafter set forth. The Term Loan may consist of Alternate
Base Rate Loans or LIBOR Rate Loans, or a combination thereof, as the
Borrower may request; provided that the Term Loans made on the Closing
Date shall bear interest at the Alternate Base Rate until three (3)
Business Days after the Closing Date. The Borrower shall request the
initial Term Loan borrowing by written notice (or telephone notice
promptly confirmed in writing which confirmation may be by fax) to the
Administrative Agent not later than 11:00 A.M. (Charlotte, North Carolina
time) on the Business Day prior to the date of requested borrowing.
Amounts repaid on the Term Loan may not be reborrowed. LIBOR Rate Loans
shall be made by each Lender at its LIBOR Lending Office and Alternate
Base Rate Loans at its Domestic Lending Office.
(b) REPAYMENT OF TERM LOAN. The principal amount of the Term Loan
shall be repaid in twenty (20) consecutive fiscal quarterly installments
as follows, unless accelerated sooner pursuant to Section 7.2:
TERM LOAN
PRINCIPAL PRINCIPAL
AMORTIZATION AMORTIZATION
PAYMENT DATES PAYMENT
---------------------- ----------------
December 31, 2000 $2,500,000
---------------------- ----------------
March 31, 2001 $2,500,000
---------------------- ----------------
June 30, 2001 $2,500,000
---------------------- ----------------
September 30, 2001 $2,500,000
---------------------- ----------------
December 31, 2001 $2,500,000
---------------------- ----------------
March 31, 2002 $2,500,000
---------------------- ----------------
June 30, 2002 $2,500,000
---------------------- ----------------
September 30, 2002 $2,500,000
---------------------- ----------------
December 31, 2002 $2,500,000
---------------------- ----------------
March 31, 2003 $2,500,000
---------------------- ----------------
June 30, 2003 $2,500,000
---------------------- ----------------
September 30, 2003 $2,500,000
---------------------- ----------------
December 31, 2003 $2,500,000
---------------------- ----------------
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March 31, 2004 $2,500,000
---------------------- ----------------
June 30, 2004 $2,500,000
---------------------- ----------------
September 30, 2004 $2,500,000
---------------------- ----------------
December 31, 2004 $2,500,000
---------------------- ----------------
March 31, 2005 $2,500,000
---------------------- ----------------
June 30, 2005 $2,500,000
---------------------- ----------------
September 30, 2005 $2,500,000
---------------------- ----------------
(c) INTEREST ON THE TERM LOAN. Subject to the provisions of Section
2.10, the Term Loan shall bear interest as follows:
(i) ALTERNATE BASE RATE LOANS. During such periods as the Term
Loan shall be comprised of Alternate Base Rate Loans, each such
Alternate Base Rate Loan shall bear interest at a per annum rate
equal to the sum of the Alternate Base Rate PLUS the Applicable
Percentage; and
(ii) LIBOR RATE LOANS. During such periods as the Term Loan
shall be comprised of LIBOR Rate Loans, each such LIBOR Rate Loan
shall bear interest at a per annum rate equal to the sum of the
LIBOR Rate PLUS the Applicable Percentage.
Interest on the Term Loan shall be payable in arrears on each
Interest Payment Date.
(d) TERM NOTES. Each Lender's Term Loan Commitment Percentage of the
Term Loan outstanding as of the Closing Date shall be evidenced by a duly
executed promissory note of the Borrower to such Lender in substantially
the form of SCHEDULE 2.4(D).
SECTION 2.5 FEES.
(a) COMMITMENT FEE. In consideration of the Revolving Commitment,
the Borrower agrees to pay to the Administrative Agent for the ratable
benefit of the Lenders (other than any Defaulting Lender) a commitment fee
(the "COMMITMENT FEE") in an amount equal to the Applicable Percentage per
annum on the average daily unused amount of the aggregate Revolving
Commitments of such Lenders. For purposes of computing the Commitment Fee
hereunder, LOC Obligations shall be considered usage of the Revolving
Commitments, but Swingline Loans shall not be considered usage of the
Revolving Commitments. The Commitment Fee shall be due and payable
quarterly in arrears on the 15th day following the last day of each
calendar quarter for the prior calendar quarter.
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(b) LETTER OF CREDIT FEES. In consideration of the LOC Commitments,
the Borrower agrees to pay to the Issuing Lender a fee (the "LETTER OF
CREDIT FEE") equal to the Applicable Percentage per annum on the average
daily maximum amount available to be drawn under each Letter of Credit
from the date of issuance to the date of expiration. In addition to such
Letter of Credit Fee, the Issuing Lender may charge, and retain for its
own account without sharing by the other Lenders, an additional facing fee
of one-eighth of one percent (0.125%) per annum on the average daily
maximum amount available to be drawn under each such Letter of Credit
issued by it. The Issuing Lender shall promptly pay over to the
Administrative Agent for the ratable benefit of the Lenders (including the
Issuing Lender, but excluding any Defaulting Lender) the Letter of Credit
Fee. The Letter of Credit Fee shall be due and payable quarterly in
arrears on the 15th day following the last day of each calendar quarter
for the prior calendar quarter and on the Revolving Commitment Termination
Date.
(c) ISSUING LENDER FEES. In addition to the Letter of Credit Fees
payable pursuant to subsection (b) hereof, the Borrower shall pay to the
Issuing Lender for its own account without sharing by the other Lenders
the reasonable and customary charges from time to time of the Issuing
Lender with respect to the amendment, transfer, administration,
cancellation and conversion of, and drawings under, such Letters of Credit
(collectively, the "ISSUING LENDER FEES").
(d) ADMINISTRATIVE FEE. The Borrower agrees to pay to the
Administrative Agent the annual administrative fee as described in the Fee
Letter.
SECTION 2.6 COMMITMENT REDUCTIONS.
(a) VOLUNTARY REDUCTIONS. The Borrower shall have the right to
terminate or permanently reduce the unused portion of the Revolving
Committed Amount at any time or from time to time upon not less than five
Business Days' prior notice to the Administrative Agent (which shall
notify the Lenders thereof as soon as practicable) of each such
termination or reduction, which notice shall specify the effective date
thereof and the amount of any such reduction which shall be in a minimum
amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof
and shall be irrevocable and effective upon receipt by the Administrative
Agent, PROVIDED that no such reduction or termination shall be permitted
if after giving effect thereto, and to any prepayments of the Revolving
Loans made on the effective date thereof, the sum of the then outstanding
aggregate principal amount of the Revolving Loans PLUS Swingline Loans
PLUS LOC Obligations would exceed the Revolving Committed Amount.
(b) MANDATORY REDUCTIONS. On any date that the Revolving Loans are
required to be prepaid pursuant to the terms of Section 2.7(b) (ii), (iii)
and (iv), the Revolving Committed Amount shall be automatically
permanently reduced by the amount of such required prepayment and/or
reduction.
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(c) REVOLVING COMMITMENT TERMINATION DATE. The Revolving Commitment,
the Swingline Commitment and the LOC Commitment shall automatically
terminate on the Revolving Commitment Termination Date.
SECTION 2.7 PREPAYMENTS.
(a) OPTIONAL PREPAYMENTS. The Borrower shall have the right to
prepay Loans in whole or in part from time to time; PROVIDED, HOWEVER,
that (i) each partial prepayment of Revolving Loans and Term Loans shall
be in a minimum principal amount of $2,500,000 and integral multiples of
$100,000 in excess thereof (or the remaining unpaid amount) and (ii) each
partial prepayment of Swingline Loans shall be in a minimum principal
amount of $100,000 and integral multiples of $50,000 in excess thereof (or
the remaining unpaid amount). The Borrower shall give three Business Days'
irrevocable notice in the case of LIBOR Rate Loans and irrevocable notice
not later than 12:00 noon (Charlotte, North Carolina time) on the same
Business Day in the case of Alternate Base Rate Loans, to the
Administrative Agent (which shall notify the Lenders thereof as soon as
practicable). Subject to the foregoing terms, amounts prepaid under this
Section 2.7(a) shall be applied as the Borrower elects; provided that if
the Borrower fails to specify the application of an optional prepayment
then such prepayment shall be applied first to Revolving Loans and then
pro RATA to the remaining principal installments of the Term Loans, in all
cases first to Alternate Base Rate Loans and then to LIBOR Rate Loans in
direct order of Interest Period maturities. All prepayments under this
Section 2.7(a) shall be subject to Section 2.17, but otherwise without
premium or penalty. Interest on the principal amount prepaid shall be
payable on the next occurring Interest Payment Date that would have
occurred had such loan not been prepaid or, at the request of the
Administrative Agent, interest on the principal amount prepaid shall be
payable on any date that a prepayment is made hereunder through the date
of prepayment. Amounts prepaid on the Revolving Loans and the Swingline
Loans may be reborrowed in accordance with the terms hereof. Amount
prepaid on the Term Loans may not be reborrowed.
(b) MANDATORY PREPAYMENTS.
(i) REVOLVING COMMITTED AMOUNT. If at any time after the
Closing Date, the sum of the aggregate principal amount of
outstanding Revolving Loans PLUS Swingline Loans PLUS LOC
Obligations shall exceed the aggregate Revolving Committed Amount,
the Borrower immediately shall prepay the Revolving Loans including
any Swingline Loans) and (after all Revolving Loans have been
repaid) cash collateralize the LOC Obligations, in an amount
sufficient to eliminate such excess.
(ii) ASSET DISPOSITIONS. Promptly following any Asset
Disposition in excess of $2,000,000 for all such Asset Dispositions
occurring during the term of this Agreement which are not applied to
repair or replace damaged property or to purchase or otherwise
acquire replacement assets or property within 180 days following the
receipt by a Credit Party of such cash proceeds, the Borrowers shall
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prepay the Loans in an aggregate amount equal to 100% of the Net
Cash Proceeds derived from such Asset Disposition that were not
reinvested within such 180 days (such prepayment to be applied as
set forth in clause (v) below).
(iii) DEBT ISSUANCES. Promptly, but in any event within three
(3) Business Days, upon receipt by any Credit Party of proceeds from
any Debt Issuance, the Borrower shall prepay the Loans in an
aggregate amount equal to one hundred percent (100%) of the Net Cash
Proceeds of such Debt Issuance (such prepayment to be applied as set
forth in clause (v) below).
(iv) RECOVERY EVENT. To the extent of cash proceeds received
in connection with a Recovery Event which are in excess of
$2,000,000 in the aggregate and which are not applied in accordance
with Section 6.6(a)(ii), immediately following the 180th day
occurring after the receipt by a Credit Party of such cash proceeds,
the Borrower shall prepay the Loans in an aggregate amount equal to
one hundred percent (100%) of such Net Cash Proceeds (such
prepayment to be applied as set forth in clause (v) below).
(v) APPLICATION OF MANDATORY PREPAYMENTS. All amounts required
to be paid pursuant to this Section 2.7(b) shall be applied as
follows: (A) with respect to all amounts prepaid pursuant to Section
2.7(b)(i), to Revolving Loans (including Swingline Loans) and (after
all Revolving Loans have been repaid) to a cash collateral account
in respect of LOC Obligations and (B) with respect to all amounts
prepaid pursuant to Sections 2.7(b)(ii), 2.7(b)(iii) and 2.7(b)(iv),
(1) first pro rata to the Term Loans (ratably to the remaining
principal installments thereof) and (2) second to the Revolving
Loans (including Swingline Loans) and (after all Revolving Loans
have been repaid) to a cash collateral account in respect of LOC
Obligations. Within the parameters of the applications set forth
above, prepayments shall be applied first to Alternate Base Rate
Loans and then to LIBOR Rate Loans in direct order of Interest
Period maturities. All prepayments under this Section 2.7(b) shall
be subject to Section 2.17 and be accompanied by interest on the
principal amount prepaid through the date of prepayment.
SECTION 2.8 MINIMUM PRINCIPAL AMOUNT OF TRANCHES.
All borrowings, payments and prepayments in respect of Revolving Loans and
Term Loans (other than mandatory prepayments) shall be in such amounts and be
made pursuant to such elections so that after giving effect thereto the
aggregate principal amount thereof comprising any Tranche shall not be less than
(a) with respect to Alternate Base Rate Loans, $1,000,000 or a whole multiple of
$100,000 in excess thereof, and (ii) with respect to LIBOR Rate Loans,
$2,500,000 or a whole multiple of $100,000 in excess thereof.
SECTION 2.9 DEFAULT RATE AND PAYMENT DATES.
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
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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 Alternate Base Rate PLUS the Applicable Percentage PLUS 2%) (the
"DEFAULT RATE").
SECTION 2.10 CONVERSION OPTIONS.
(a) The Borrower may elect from time to time to convert Alternate
Base Rate Loans to LIBOR Rate Loans, by giving the Administrative Agent at
least three Business Days' prior irrevocable written notice of such
election. A form of Notice of Conversion/ Extension is attached as
SCHEDULE 2.10. If the date upon which an Alternate Base Rate Loan is to be
converted to a LIBOR Rate Loan is not a Business Day, then such conversion
shall be made on the next succeeding Business Day and during the period
from such last day of an Interest Period to such succeeding Business Day
such Loan shall bear interest as if it were an Alternate Base Rate Loan.
All or any part of outstanding Alternate Base Rate Loans may be converted
as provided herein, PROVIDED that (i) no Loan may be converted into a
LIBOR Rate Loan when any Default or Event of Default has occurred and is
continuing and (ii) partial conversions shall be in an aggregate principal
amount of $2,500,000 or a whole multiple of $100,000 in excess thereof.
(b) Any LIBOR Rate Loans may be continued as such upon the
expiration of an Interest Period with respect thereto by compliance by the
Borrower with the notice provisions contained in Section 2.10(a);
PROVIDED, that no LIBOR Rate Loan may be continued as such when any
Default or Event of Default has occurred and is continuing, in which case
such Loan shall be automatically converted to an Alternate Base Rate Loan
at the end of the applicable Interest Period with respect thereto. If the
Borrower shall fail to give timely notice of an election to continue a
LIBOR Rate Loan, and the continuation of such LIBOR Rate Loans is
permitted hereunder, such LIBOR Rate Loans shall be automatically continue
as a one (1) month LIBOR Rate Loan at the end of the applicable Interest
Period with respect thereto.
SECTION 2.11 COMPUTATION OF INTEREST AND FEES.
(a) Interest payable hereunder with respect to Alternate Base Rate
Loans and Commitment Fees shall be calculated on the basis of a year of
365 days (or 366 days, as applicable) for the actual days elapsed. All
other fees, interest and all other amounts payable hereunder shall be
calculated on the basis of a 360 day year for the actual days elapsed. The
Administrative Agent shall as soon as practicable notify the Borrower and
the Lenders of each determination of a LIBOR Rate on the Business Day of
the determination thereof. Any change in the interest rate on a Loan
resulting from a change in the Alternate Base Rate shall become effective
as of the opening of business on the day on which such change in the
Alternate Base Rate shall become effective. The Administrative Agent shall
as soon as practicable notify the Borrower and the Lenders of the
effective date and the amount of each such change.
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(b) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Borrower and the Lenders in the absence of manifest error.
The Administrative Agent shall, at the request of the Borrower, deliver to
the Borrower a statement showing the computations used by the
Administrative Agent in determining any interest rate.
SECTION 2.12 PRO RATA TREATMENT AND PAYMENTS.
(a) Each borrowing of Revolving Loans and any reduction of the Revolving
Commitments shall be made PRO RATA according to the respective Commitment
Percentages of the Lenders. Each payment under this Agreement or any Note shall
be applied, first, to any fees then due and owing by the Borrower pursuant to
Section 2.5, second, to interest then due and owing in respect of the Notes of
the Borrower and, third, to principal then due and owing hereunder and under the
Notes of the Borrower. Each payment on account of any fees pursuant to Section
2.5 shall be made PRO RATA in accordance with the respective amounts due and
owing (except as to the portion of the Letter of Credit retained by the Issuing
Lender and the Issuing Lender Fees). Each payment (other than prepayments) by
the Borrower on account of principal of and interest on the Revolving Loans and
on the Term Loans shall be made PRO RATA according to the respective amounts due
and owing in accordance with Section 2.7 hereof. Each optional prepayment on
account of principal of the Loans shall be applied in accordance with Section
2.7(a). Each mandatory prepayment on account of principal of the Loans shall be
applied in accordance with Section 2.7(b). All payments (including prepayments)
to be made by the Borrower on account of principal, interest and fees shall be
made without defense, set-off or counterclaim (except as provided in Section
2.18(b)) and shall be made to the Administrative Agent for the account of the
Lenders at the Administrative Agent's office specified on SCHEDULE 9.2 in
Dollars and in immediately available funds not later than 1:00 P.M. (Charlotte,
North Carolina time) on the date when due. The Administrative Agent shall
distribute such payments to the Lenders entitled thereto promptly upon receipt
in like funds as received. If any payment hereunder (other than payments on the
LIBOR Rate Loans) becomes due and payable on a day other than a Business Day,
such payment shall be extended to the next succeeding Business Day, and, with
respect to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension. If any payment on a LIBOR Rate Loan
becomes due and payable on a day other than a Business Day, the maturity thereof
shall be extended to the next succeeding Business Day unless the result of such
extension would be to extend such payment into another calendar month, in which
event such payment shall be made on the immediately preceding Business Day.
(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 Administrative 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
Administrative Agent in connection with enforcing the rights of the
Lenders under the Credit Documents and any
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protective advances made by the Administrative 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 Administrative 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 the Borrower or
whoever else 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
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 Administrative 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 2.12(b).
SECTION 2.13 NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE AGENT.
(a) Unless the Administrative Agent shall have been notified in
writing by a Lender prior to the date a Loan is to be made by such Lender
(which notice shall be effective upon receipt) that such Lender does not
intend to make the proceeds of such Loan available to the Administrative
Agent, the Administrative Agent may assume that such Lender has made such
proceeds available to the Administrative Agent on such date, and the
Administrative Agent may in reliance upon such assumption (but shall not
be
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required to) make available to the Borrower a corresponding amount. If
such corresponding amount is not in fact made available to the
Administrative Agent, the Administrative Agent shall be able to recover
such corresponding amount from such Lender. If such Lender does not pay
such corresponding amount forthwith upon the Administrative Agent's demand
therefor, the Administrative Agent will promptly notify the Borrower, and
the Borrower shall immediately pay such corresponding amount to the
Administrative Agent. The Administrative 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 Administrative Agent to the
Borrower to the date such corresponding amount is recovered by the
Administrative 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 Effective Rate.
(b) Unless the Administrative Agent shall have been notified in
writing by the Borrower, prior to the date on which any payment is due
from it hereunder (which notice shall be effective upon receipt) that the
Borrower does not intend to make such payment, the Administrative Agent
may assume that the Borrower has made such payment when due, and the
Administrative Agent may in reliance upon such assumption (but shall not
be required to) make available to each Lender on such payment date an
amount equal to the portion of such assumed payment to which such Lender
is entitled hereunder, and if the Borrower has not in fact made such
payment to the Administrative Agent, such Lender shall, on demand, repay
to the Administrative Agent the amount made available to such Lender. If
such amount is repaid to the Administrative Agent on a date after the date
such amount was made available to such Lender, such Lender shall pay to
the Administrative Agent on demand interest on such amount in respect of
each day from the date such amount was made available by the
Administrative Agent to such Lender to the date such amount is recovered
by the Administrative Agent at a per annum rate equal to the Federal Funds
Effective Rate.
(c) A certificate of the Administrative Agent submitted to the
Borrower or any Lender with respect to any amount owing under this Section
2.13 shall be conclusive in the absence of manifest error.
SECTION 2.14 INABILITY TO DETERMINE INTEREST RATE.
Notwithstanding any other provision of this Agreement, if (i) the
Administrative Agent shall reasonably determine (which determination shall be
conclusive and binding absent manifest error) that, by reason of circumstances
affecting the relevant market, reasonable and adequate means do not exist for
ascertaining LIBOR for such Interest Period, or (ii) the Required Lenders shall
reasonably determine (which determination shall be conclusive and binding absent
manifest error) that the LIBOR Rate does not adequately and fairly reflect the
cost to such Lenders of funding LIBOR Rate Loans that the Borrower has requested
be outstanding as a LIBOR Tranche during such Interest Period, the
Administrative Agent shall forthwith give telephone notice of such
determination, confirmed in writing, to the Borrower, and the Lenders at least
two Business Days prior to the first day of such Interest Period. Unless the
Borrower shall have notified the
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Administrative Agent upon receipt of such telephone notice that it wishes to
rescind or modify its request regarding such LIBOR Rate Loans, any Loans that
were requested to be made as LIBOR Rate Loans shall be made as Alternate Base
Rate Loans and any Loans that were requested to be converted into or continued
as LIBOR Rate Loans shall remain as or be converted into Alternate Base Rate
Loans. Until any such notice has been withdrawn by the Administrative Agent, no
further Loans shall be made as, continued as, or converted into, LIBOR Rate
Loans for the Interest Periods so affected.
SECTION 2.15 ILLEGALITY.
Notwithstanding any other provision of this Agreement, if the adoption of
or any change in any Requirement of Law or in the interpretation or application
thereof by the relevant Governmental Authority to any Lender shall make it
unlawful for such Lender or its LIBOR Lending Office to make or maintain LIBOR
Rate Loans as contemplated by this Agreement, or to obtain in the interbank
eurodollar market through its LIBOR Lending Office the funds with which to make
such Loans, (a) such Lender shall promptly (and in any event within ninety (90)
days from the date the Lender knew or should have known of the facts pertaining
thereto) notify the Administrative Agent and the Borrower thereof, (b) the
commitment of such Lender hereunder to make LIBOR Rate Loans or continue LIBOR
Rate Loans as such shall forthwith be suspended until the Administrative Agent
shall give notice that the condition or situation which gave rise to the
suspension shall no longer exist, and (c) such Lender's Loans then outstanding
as LIBOR Rate Loans, if any, shall be converted on the last day of the Interest
Period for such Loans or within such earlier period as required by law as
Alternate Base Rate Loans. The Borrower hereby agrees promptly to pay any
Lender, upon its demand, any additional amounts necessary to compensate such
Lender for actual and direct costs (but not including anticipated profits or
losses sustained by virtue of the Lender's failure to give the Borrower the
aforesaid notice within the prescribed time period) reasonably incurred by such
Lender in making any repayment in accordance with this Section including, but
not limited to, any interest or fees payable by such Lender to lenders of funds
obtained by it in order to make or maintain its LIBOR Rate Loans hereunder. A
certificate as to any additional amounts payable pursuant to this Section
submitted by such Lender, through the Administrative Agent, to the Borrower
shall constitute PRIMA FACIE evidence as to the accuracy of the facts contained
therein. Each Lender agrees to use reasonable efforts (including reasonable
efforts to change its LIBOR Lending Office) to avoid or to minimize any amounts
which may otherwise be payable pursuant to this Section; PROVIDED, HOWEVER, that
such efforts shall not cause the imposition on such Lender of any additional
costs or legal or regulatory burdens deemed by such Lender in its sole
discretion to be material.
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SECTION 2.16 REQUIREMENTS OF LAW.
(a) If the adoption of or any change in any Requirement of Law or in
the interpretation or application thereof or compliance by any Lender with
any request or directive (whether or not having the force of law) from any
central bank or other Governmental Authority made subsequent to the date
hereof:
(i) shall subject such Lender to any tax of any kind
whatsoever with respect to any Letter of Credit or any application
relating thereto, any LIBOR Rate Loan made by it, or change the
basis of taxation of payments to such Lender in respect thereof
(except for changes in the rate of tax on the overall net income of
such Lender);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against
assets held by, deposits or other liabilities in or for the account
of, advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the LIBOR Rate hereunder;
or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such
Lender of making or maintaining LIBOR Rate Loans or the Letters of Credit
or to reduce any amount receivable hereunder or under any Note, then, in
any such case, the Borrower shall promptly pay upon its demand, any
additional amounts necessary to compensate such Lender for such additional
cost or reduced amount receivable which such Lender reasonably deems to be
material as determined by such Lender with respect to its LIBOR Rate Loans
or Letters of Credit; PROVIDED, HOWEVER, such Lender shall promptly (and
in any event with ninety (90) days from the date the Lender knew or should
have known of the facts pertaining thereto) notify the Borrower of the
aforesaid facts and the Borrower shall not be responsible costs or losses
sustained by virtue of the Lender's failure to give the Borrower the
aforesaid notice. A certificate as to any additional amounts payable
pursuant to this Section submitted by such Lender, through the
Administrative Agent, to the Borrower shall constitute PRIMA FACIE
evidence as to the accuracy of the facts contained therein. Each Lender
agrees to use reasonable efforts (including reasonable efforts to change
its Domestic Lending Office or LIBOR Lending Office, as the case may be)
to avoid or to minimize any amounts which might otherwise be payable
pursuant to this paragraph of this Section; PROVIDED, HOWEVER, that such
efforts shall not cause the imposition on such Lender of any additional
costs or legal or regulatory burdens deemed by such Lender to be material.
(b) If any Lender shall have reasonably determined that the adoption
of or any change in any Requirement of Law regarding capital adequacy or
in the interpretation or application thereof or compliance by such Lender
or any corporation controlling such Lender with any request or directive
regarding capital adequacy (whether or not having the force of law) from
any central bank or Governmental Authority made subsequent to
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the date hereof does or shall have the effect of reducing the rate of
return on such Lender's or such corporation's capital as a consequence of
its obligations hereunder to a level below that which such Lender or such
corporation could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's or such corporation's
policies with respect to capital adequacy) by an amount reasonably deemed
by such Lender to be material, then from time to time, within fifteen (15)
days after demand by such Lender, the Borrower shall pay to such Lender
such additional amount as shall be certified by such Lender as being
required to compensate it for such reduction; PROVIDED, HOWEVER, such
Lender shall promptly (and in any event with ninety (90) days from the
date the Lender knew or should have known of the facts pertaining thereto)
notify the Borrower of the aforesaid facts and the Borrower shall not be
responsible costs or losses sustained by virtue of the Lender's failure to
give the Borrower the aforesaid notice within the prescribed time period.
Such a certificate as to any additional amounts payable under this Section
submitted by a Lender (which certificate shall include a description of
the basis for the computation), through the Administrative Agent, to the
Borrower shall constitute PRIMA FACIE evidence as to the accuracy of the
facts contained therein.
(c) The agreements in this Section 2.16 shall survive the
termination of this Agreement and payment of the Notes and all other
amounts payable hereunder.
SECTION 2.17 INDEMNITY.
The Borrower hereby agrees to indemnify each Lender and to hold such
Lender harmless from any funding loss or expense which such Lender may sustain
or incur as a consequence of (a) default by the Borrower in payment of the
principal amount of or interest on any Loan by such Lender in accordance with
the terms hereof, (b) default by the Borrower in accepting a borrowing of Loans
after the Borrower has given a notice in accordance with the terms hereof, (c)
default by the Borrower in making any prepayment of Loans after the Borrower has
given a notice in accordance with the terms hereof, and/or (d) the making by the
Borrower of a prepayment of a Loan, or the conversion thereof, on a day which is
not the last day of the Interest Period with respect thereto, in each case
including, but not limited to, any such loss or expense arising from interest or
fees payable by such Lender to lenders of funds obtained by it in order to
maintain its Loans hereunder. A certificate as to any additional amounts payable
pursuant to this Section submitted by any Lender, through the Administrative
Agent, to the Borrower (which certificate must be delivered to the
Administrative Agent within thirty days following such default, prepayment or
conversion) shall constitute PRIMA FACIE evidence as to the accuracy of the
facts contained therein. The agreements in this Section shall survive
termination of this Agreement and payment of the Notes and all other amounts
payable hereunder.
SECTION 2.18 TAXES.
(a) All payments made by the Borrower hereunder or under any Note
will be, except as provided in Section 2.18(b), made free and clear of,
and without deduction or withholding for, any present or future taxes,
levies, imposts, duties, fees, assessments or other charges of whatever
nature now or hereafter imposed by any Governmental
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Authority or by any political subdivision or taxing authority thereof or
therein with respect to such payments (but excluding any tax imposed on or
measured by the net income or profits of a Lender pursuant to the laws of
the jurisdiction in which it is organized or the jurisdiction in which the
principal office or applicable lending office of such Lender is located or
any subdivision thereof or therein) and all interest, penalties or similar
liabilities with respect thereto (all such non-excluded taxes, levies,
imposts, duties, fees, assessments or other charges being referred to
collectively as "TAXES"). If any Taxes are so levied or imposed, the
Borrower agrees to pay the full amount of such Taxes, and such additional
amounts as may be necessary so that every payment of all amounts due under
this Agreement or under any Note, after withholding or deduction for or on
account of any Taxes, will not be less than the amount provided for herein
or in such Note. The Borrower will furnish to the Administrative Agent as
soon as practicable after the date the payment of any Taxes is due
pursuant to applicable law certified copies (to the extent reasonably
available and required by law) of tax receipts evidencing such payment by
the Borrower. The Borrower agrees to indemnify and hold harmless each
Lender, and reimburse such Lender upon its written request, for the amount
of any Taxes so levied or imposed and paid by such Lender.
(b) Each Lender that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) agrees to deliver to the
Borrower and the Administrative Agent on or prior to the Closing Date, or
in the case of a Lender that is an assignee or transferee of an interest
under this Agreement pursuant to Section 9.6(c) (unless the respective
Lender was already a Lender hereunder immediately prior to such assignment
or transfer), on the date of such assignment or transfer to such Lender,
(i) if the Lender is a "bank" within the meaning of Section 881(c)(3)(A)
of the Code, two accurate and complete original signed copies of Internal
Revenue Service Form W-8ECI or W-8BEN (or successor forms) certifying such
Lender's entitlement to a complete exemption from United States
withholding tax with respect to payments to be made under this Agreement
and under any Note, or (ii) if the Lender is not a "bank" within the
meaning of Section 881(c)(3)(A) of the Code, either Internal Revenue
Service Form W-8ECI or W-8BEN as set forth in clause (i) above, or (x) a
certificate substantially in the form of SCHEDULE 2.18 (any such
certificate, a "2.18 CERTIFICATE") and (y) two accurate and complete
original signed copies of Internal Revenue Service Form W-8ECI or W-8BEN
(or successor form) certifying such Lender's entitlement to an exemption
from United States withholding tax and backup withholding tax with respect
to payments of interest to be made under this Agreement and under any
Note. In addition, each Lender agrees that it will deliver upon the
Borrower's request updated versions of the foregoing, as applicable,
whenever the previous certification has become obsolete or inaccurate in
any material respect, together with such other forms as may be required in
order to confirm or establish the entitlement of such Lender to a
continued exemption from or reduction in United States withholding tax
with respect to payments under this Agreement and any Note.
Notwithstanding anything to the contrary contained in Section 2.18(a), but
subject to the immediately succeeding sentence, (x) the Borrower shall be
entitled, to the extent it is required to do so by law, to deduct or
withhold Taxes imposed by the United States (or any political subdivision
or taxing authority thereof or therein) from interest, fees or other
amounts payable hereunder for the account of any Lender which is not a
United States
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person (as such term is defined in Section 7701(a)(30) of the Code) for
U.S. Federal income tax purposes to the extent that such Lender has not
provided to the Borrower U.S. Internal Revenue Service Forms that
establish a complete exemption from such deduction or withholding and (y)
the Borrower shall not be obligated pursuant to Section 2.18(a) hereof to
gross-up payments to be made to a Lender in respect of Taxes imposed by
the United States if (I) such Lender has not provided to the Borrower the
Internal Revenue Service Forms required to be provided to the Borrower
pursuant to this Section 2.18(b) or (II) in the case of a payment, other
than interest, to a Lender described in clause (ii) above, to the extent
that such Forms do not establish a complete exemption from withholding of
such Taxes. Notwithstanding anything to the contrary contained in the
preceding sentence or elsewhere in this Section 2.18, the Borrower agrees
to pay additional amounts and to indemnify each Lender in the manner set
forth in Section 2.18(a) (without regard to the identity of the
jurisdiction requiring the deduction or withholding) in respect of any
amounts deducted or withheld by it as described in the immediately
preceding sentence as a result of any changes after the Closing Date, in
any applicable law, treaty, governmental rule, regulation, guideline or
order, or in the interpretation thereof, relating to the deducting or
withholding of Taxes.
(c) Each Lender agrees to use reasonable efforts (including
reasonable efforts to change its Domestic Lending Office or LIBOR Lending
Office, as the case may be) to avoid or to minimize any amounts which
might otherwise be payable pursuant to this Section; PROVIDED, HOWEVER,
that such efforts shall not cause the imposition on such Lender of any
additional costs or legal or regulatory burdens deemed by such Lender in
its sole discretion to be material.
(d) If the Borrower pays any additional amount pursuant to this
Section 2.18 with respect to a Lender, such Lender shall use reasonable
efforts to obtain a refund of tax or credit against its tax liabilities on
account of such payment; PROVIDED that such Lender shall have no
obligation to use such reasonable efforts if either (i) it is in an excess
foreign tax credit position or (ii) it believes in good faith, in its sole
discretion, that claiming a refund or credit would cause adverse tax
consequences to it. In the event that such Lender receives such a refund
or credit, such Lender shall pay to the Borrower an amount that such
Lender reasonably determines is equal to the net tax benefit obtained by
such Lender as a result of such payment by the Borrower. In the event that
no refund or credit is obtained with respect to the Borrower's payments to
such Lender pursuant to this Section 2.18, then such Lender shall upon
request provide a certification that such Lender has not received a refund
or credit for such payments. Nothing contained in this Section 2.18 shall
require a Lender to disclose or detail the basis of its calculation of the
amount of any tax benefit or any other amount or the basis of its
determination referred to in the proviso to the first sentence of this
Section 2.18 to the Borrower or any other party.
(e) The agreements in this Section 2.18 shall survive the
termination of this Agreement and the payment of the Notes and all other
amounts payable hereunder.
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SECTION 2.19 INDEMNIFICATION; NATURE OF ISSUING LENDER'S DUTIES.
(a) In addition to its other obligations under Section 2.3, the
Borrower hereby agrees to protect, indemnify, pay and save the Issuing
Lender harmless from and against any and all claims, demands, liabilities,
damages, losses, costs, charges and expenses (including reasonable
attorneys' fees) that the Issuing Lender may incur or be subject to as a
consequence, direct or indirect, of (i) the issuance of any Letter of
Credit or (ii) the failure of the Issuing Lender to honor a drawing under
a Letter of Credit as a result of any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto government or
governmental authority (all such acts or omissions, herein called
"GOVERNMENT ACTS").
(b) As between the Borrower and the Issuing Lender, the Borrower
shall assume all risks of the acts, omissions or misuse of any Letter of
Credit by the beneficiary thereof. The Issuing Lender shall not be
responsible: (i) for the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in
connection with the application for and issuance of any Letter of Credit,
even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (ii) for the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, that may prove to be
invalid or ineffective for any reason; (iii) for failure of the
beneficiary of a Letter of Credit to comply fully with conditions required
in order to draw upon a Letter of Credit; (iv) for errors, omissions,
interruptions or delays in transmission or delivery of any messages, by
mail, cable, telegraph, telex or otherwise, whether or not they be in
cipher; (v) for errors in interpretation of technical terms; (vi) for any
loss or delay in the transmission or otherwise of any document required in
order to make a drawing under a Letter of Credit or of the proceeds
thereof; and (vii) for any consequences arising from causes beyond the
control of the Issuing Lender, including, without limitation, any
Government Acts. None of the above shall affect, impair, or prevent the
vesting of the Issuing Lender's rights or powers hereunder.
(c) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted by
the Issuing Lender, under or in connection with any Letter of Credit or
the related certificates, if taken or omitted in good faith, shall not put
the Issuing Lender under any resulting liability to the Borrower. It is
the intention of the parties that this Agreement shall be construed and
applied to protect and indemnify the Issuing Lender against any and all
risks involved in the issuance of the Letters of Credit, all of which
risks are hereby assumed by the Borrower, including, without limitation,
any and all risks of the acts or omissions, whether rightful or wrongful,
of any Government Authority. The Issuing Lender shall not, in any way, be
liable for any failure by the Issuing Lender or anyone else to pay any
drawing under any Letter of Credit as a result of any Government Acts or
any other cause beyond the control of the Issuing Lender.
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(d) Nothing in this Section 2.19 is intended to limit the
reimbursement obligation of the Borrower contained in Section 2.3(d)
hereof. The obligations of the Borrower under this Section 2.19 shall
survive the termination of this Agreement. No act or omissions of any
current or prior beneficiary of a Letter of Credit shall in any way affect
or impair the rights of the Issuing Lender to enforce any right, power or
benefit under this Agreement.
(e) Notwithstanding anything to the contrary contained in this
Section 2.19, the Borrower shall have no obligation to indemnify the
Issuing Lender in respect of any liability incurred by the Issuing Lender
arising out of the gross negligence or willful misconduct of the Issuing
Lender (including action not taken by the Issuing Lender), as determined
by a court of competent jurisdiction.
SECTION 2.20 INCREASES IN THE REVOLVING COMMITTED AMOUNT.
The Borrower shall have the right upon at least five (5) Business
Days' prior written notice to the Administrative Agent to increase the
Revolving Committed Amount by up to $50,000,000, in no more than three (3)
increases at any time on or after the Closing Date, SUBJECT, HOWEVER, in
each such case, to satisfaction of the following conditions precedent:
(i) no Default or Event of Default has occurred and is
continuing on the date on which such Revolving Committed Amount
increase is to become effective;
(ii) the representations and warranties set forth in Article
II of this Credit Agreement shall be true and correct in all
material respects on and as of the date on which such Revolving
Committed Amount increase is to become effective (except to the
extent such representations and warranties expressly relate to an
earlier date);
(iii) on or before the date on which such Revolving Committed
Amount increase is to become effective, the Administrative Agent
and/or the respective new Lenders shall have received, each for its
own account, the mutually acceptable fees and expenses required by
separate agreement, if any, of the Borrower and the Administrative
Agent to be paid in connection with such increase;
(iv) such Revolving Committed Amount increase shall be an
integral multiple of $5,000,000 and shall in no event be less than
$10,000,000; and
(v) such requested Revolving Committed Amount increase shall
be effective on such date only to the extent that, on or before such
date, (A) the Administrative Agent shall have received and accepted
a corresponding amount of additional Commitment(s) pursuant to a
commitment letter(s) acceptable to the Administrative Agent from one
or more Lenders acceptable to the Administrative Agent and, with
respect to any Lender that is not at such time a Lender hereunder,
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to the Borrower, (B) each such Lender has executed an agreement in
the form of SCHEDULE 2.20 hereto (each such agreement a "NEW
COMMITMENT AGREEMENT"), pursuant to which such new Lender shall
agree to take a pro rata interest in the Revolving Commitment and
the Term Loan Commitment, accepted in writing therein by the
Administrative Agent and, with respect to any Lender that is not at
such time a Lender hereunder, by the Borrower, with respect to the
additional Commitment of such Lender, and (C) if any Revolving Loans
are outstanding at the time of any such increase, the Borrower shall
make such payments and adjustments on such Revolving Loans
(including payment of any break-funding amount owing under Section
2.17) as are necessary to give effect to the revised Revolving
Commitments and Revolving Commitment Percentages of the Lenders.
Upon the effectiveness of the Revolving Commitment increase, the
Administrative Agent shall replace SCHEDULE 2.1(A) with a new schedule to
reflect any increased Commitments of the Lenders and/or any new Lenders.
Notwithstanding anything to the contrary contained in this Section 2.20,
no Lender's Revolving Commitment shall be increased without the specific
approval and request of that Lender.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Agreement and to make the
Extensions of Credit herein provided for, the Credit Parties hereby represent
and warrant to the Administrative Agent and to each Lender that:
SECTION 3.1 FINANCIAL CONDITION.
The balance sheets and the related statements of income and of cash flows
of the Borrower for fiscal year 1998, fiscal year 1999 and fiscal year 2000
audited by Arthur Andersen LLP are complete and correct and present fairly the
financial condition of the Borrower and its Subsidiaries as of such dates.
Additionally, company-prepared projected statements of income and cash flow of
the Borrower for the trailing twelve-month period ending as of June 30, 2000 and
the projected balance sheets of the Borrower as of September 30, 2000 for the
next five years have been prepared in good faith based upon reasonable
assumptions. All such financial statements, including the related schedules and
notes thereto, have been prepared in accordance with GAAP applied consistently
throughout the periods involved (except for projections, pro forma statements,
and/or as disclosed therein).
SECTION 3.2 NO CHANGE.
Since March 31, 2000 (and after delivery of annual audited financial
statements in accordance Section 5.1(a), from the date of the most recently
delivered annual audited financial statements) there has been no development or
event which has had or could reasonably be expected to have a Material Adverse
Effect.
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SECTION 3.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW.
Except as set forth on SCHEDULE 3.3, each of the Borrower and the other
Credit Parties (a) is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (b) has the requisite
corporate power and authority to own and operate all its material property, to
lease the material property it operates as lessee and to conduct the business in
which it is currently engaged, (c) is duly qualified to conduct business and in
good standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such qualification
except to the extent that the failure to so qualify or be in good standing could
not, in the aggregate, reasonably be expected to have a Material Adverse Effect
and (d) is in compliance with all Requirements of Law except to the extent that
the failure to comply therewith could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.
SECTION 3.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.
Each of the Borrower and the other Credit Parties has full corporate power
and authority and the legal right to make, deliver and perform the Credit
Documents to which it is party and has taken all necessary corporate action to
authorize the execution, delivery and performance by it of the Credit Documents
to which it is party. No consent or authorization of, filing with, notice to or
other act by or in respect of, any Governmental Authority or any other Person is
required in connection with the borrowings hereunder or with the execution,
delivery or performance of any Credit Document by the Borrower or the other
Credit Parties (other than those which have been obtained) or with the validity
or enforceability of any Credit Document against the Borrower or the other
Credit Parties (except such filings as are necessary in connection with the
perfection of the Liens created by such Credit Documents). Each Credit Document
to which it is a party has been duly executed and delivered on behalf of the
Borrower or the other Credit Parties, as the case may be. Each Credit Document
to which it is a party constitutes a legal, valid and binding obligation of the
Borrower or the other Credit Parties, as the case may be, enforceable against
the Borrower or such other Credit Party, as the case may be, in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer, fraudulent
conveyance, or similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles (whether enforcement is sought by
proceedings in equity or at law).
SECTION 3.5 NO LEGAL BAR; NO DEFAULT.
The execution, delivery and performance of the Credit Documents, the
borrowings thereunder and the use of the proceeds of the Loans will not violate
any Requirement of Law or any Contractual Obligation of the Borrower or any
other Credit Party (except those as to which waivers or consents have been
obtained), and will not result in, or require, the creation or imposition of any
material Lien on any of its or their respective properties or revenues pursuant
to any Requirement of Law or Contractual Obligation other than the Liens arising
under or contemplated in connection with the Credit Documents. Neither the
Borrower nor any other Credit Party is in default under or with respect to any
of its Contractual Obligations in any
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respect which could reasonably be expected to have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
SECTION 3.6 NO MATERIAL LITIGATION.
Except as set forth in SCHEDULE 3.6, no litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the Borrower, threatened by or against any Credit Party or
any of its Subsidiaries or against any of its or their respective properties or
revenues (a) with respect to the Credit Documents or any Loan or any of the
transactions contemplated hereby, or (b) which could reasonably be expected to
be adversely determined, and if adversely determined, could reasonably be
expected to have a Material Adverse Effect.
SECTION 3.7 INVESTMENT COMPANY ACT.
Neither the Borrower nor any Credit Party is an "investment company", or a
company "controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended.
SECTION 3.8 MARGIN REGULATIONS.
No part of the proceeds of any Loan hereunder will be used directly or
indirectly for any purpose which violates, or which would be inconsistent with,
the provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve System as now and from time to time hereafter in effect. The Borrower
and its Subsidiaries taken as a group do not own "margin stock" except as
identified in the financial statements referred to in Section 3.1 and the
aggregate value of all "margin stock" owned by the Borrower and its Subsidiaries
taken as a group does not exceed 25% of the value of their assets.
SECTION 3.9 ERISA.
Except as set forth in SCHEDULE 3.9, neither a Reportable Event nor an
"accumulated funding deficiency" (within the meaning of Section 412 of the Code
or Section 302 of ERISA) has occurred during the five-year period prior to the
date on which this representation is made or deemed made with respect to any
Plan, and each Plan has complied in all material respects with the applicable
provisions of ERISA and the Code, except to the extent that any such occurrence
or failure to comply would not reasonably be expected to have a Material Adverse
Effect. No termination of a Single Employer Plan has occurred resulting in any
liability that has remained underfunded, and no Lien in favor of the PBGC or a
Plan has arisen, during such five-year period which could reasonably be expected
to have a Material Adverse Effect. The present value of all accrued benefits
under each Single Employer Plan (based on those assumptions used to fund such
Plans) did not, as of the last annual valuation date prior to the date on which
this representation is made or deemed made, exceed the value of the assets of
such Plan allocable to such accrued benefits by an amount which, as determined
in accordance with GAAP, could reasonably be expected to have a Material Adverse
Effect. Neither the Borrower nor any Commonly Controlled Entity is currently
subject to any liability for a complete or partial
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withdrawal from a Multiemployer Plan which could reasonably be expected to have
a Material Adverse Effect.
SECTION 3.10 ENVIRONMENTAL MATTERS.
Except as could not reasonably be expected to have a Material Adverse
Effect:
(a) To the knowledge of the Borrower and the other Credit Parties,
the facilities and properties comprising real estate owned, leased or
operated by the Borrower and the other Credit Parties or any of their
Subsidiaries (the "PROPERTIES") do not contain any Materials of
Environmental Concern in amounts or concentrations which (i) constitute a
violation of, or (ii) could give rise to liability under, any
Environmental Law.
(b) To the knowledge of the Borrower and the other Credit Parties,
the Properties and all operations of the Borrower and the other Credit
Parties and/or their Subsidiaries at the Properties are in compliance, and
have in the last five years been in compliance, in all material respects
with all applicable Environmental Laws, and there is no contamination at,
under or about the Properties or violation of any Environmental Law with
respect to the Properties or the business operated by the Borrower and the
other Credit Parties or any of their Subsidiaries (the "BUSINESS").
(c) Neither the Borrower nor any of the other Credit Parties has
received any written or actual notice of violation, alleged violation,
non-compliance, liability or potential liability regarding environmental
matters or compliance with Environmental Laws with regard to any of the
Properties or the Business, nor does the Borrower or any of the other
Credit Parties nor any of their Subsidiaries have knowledge or reason to
believe that any such notice will be received or is being threatened.
(d) To the knowledge of the Borrower and the other Credit Parties,
Materials of Environmental Concern have not been transported or disposed
of from the Properties in violation of, or in a manner or to a location
which could give rise to liability under any Environmental Law, nor have
any Materials of Environmental Concern been generated, treated, stored or
disposed of at, on or under any of the Properties in violation of, or in a
manner that could give rise to liability under, any applicable
Environmental Law.
(e) No judicial proceeding or governmental or administrative action
is pending or, to the knowledge of the Borrower and the other Credit
Parties, threatened, under any Environmental Law to which the Borrower or
any other Credit Party or any Subsidiary is or will be named as a party
with respect to the Properties or the Business, 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 Environmental Law with respect to the Properties or the Business.
(f) To the knowledge of the Borrower and the other Credit Parties,
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 of the Borrower or any other Credit
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Party or any Subsidiary in connection with the Properties or otherwise in
connection with the Business, in violation of or in amounts or in a manner
that could give rise to liability under Environmental Laws.
SECTION 3.11 PURPOSE OF LOANS.
The proceeds of the Loans will be used (i) to repay certain existing
Indebtedness of the Borrower, (ii) to finance Permitted Acquisitions, (iii) to
finance the repurchase of Capital Stock of the Borrower as permitted under
Section 6.12 and (iv) to provide for working capital and other general corporate
purposes.
SECTION 3.12 SUBSIDIARIES.
Set forth on SCHEDULE 3.12 is a complete and accurate list of all direct
and indirect Subsidiaries of the Credit Parties as of the Closing Date.
Information on the attached Schedule includes state of incorporation; the number
of shares of each class of Capital Stock or other equity interests outstanding;
the number and percentage of outstanding shares of each class of stock; and the
number and effect, if exercised, of all outstanding options, warrants, rights of
conversion or purchase and similar rights. The outstanding Capital Stock and
other equity interests of all such Subsidiaries is validly issued, fully paid
and non-assessable and is owned, free and clear of all Liens (other than those
arising under or contemplated in connection with the Credit Documents).
SECTION 3.13 OWNERSHIP.
Each of the Credit Parties and its Subsidiaries is the owner of, and has
transferable title to, or a valid leasehold interest in, all of its respective
assets except as may be permitted pursuant to Section 6.14 hereof and none of
such assets is subject to any Lien other than Permitted Liens.
SECTION 3.14 INDEBTEDNESS.
Except as otherwise permitted under Section 6.1, the Borrower and its
Subsidiaries have no Indebtedness.
SECTION 3.15 TAXES.
Each of the Borrower and its Subsidiaries has filed, or caused to be
filed, all tax returns (federal, state, local and foreign) required to be filed
and paid (a) all amounts of taxes shown thereon to be due (including interest
and penalties) and (b) all other taxes, fees, assessments and other governmental
charges (including mortgage recording taxes, documentary stamp taxes and
intangibles taxes) owing by it, except for such taxes (i) which are not yet
delinquent or (ii) that are being contested in good faith and by proper
proceedings, and against which adequate reserves are being maintained in
accordance with GAAP. Neither the Borrower nor any of its Subsidiaries is aware
as of the Closing Date of any proposed tax assessments against it or any of its
Subsidiaries which could reasonably be expected to have a Material Adverse
Effect.
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SECTION 3.16 INTELLECTUAL PROPERTY.
Each of the Borrower and its Subsidiaries owns, or has the legal right to
use, all trademarks, trade names, copyrights, technology, know-how and processes
necessary for each of them to conduct its business as currently conducted. Set
forth on SCHEDULE 3.16 is a list of all material Intellectual Property owned by
each of the Borrower and its Subsidiaries as of the Closing Date (or as of such
later date on which the Borrower may update such schedule) or that the Borrower
or any of its Subsidiaries has the right to use other than corporate names and
assumed names. Except as provided on SCHEDULE 3.16, no claim has been asserted
and is pending by any Person challenging or questioning the use of any such
material Intellectual Property or the validity or effectiveness of any such
material Intellectual Property, nor does the Borrower or any of its Subsidiaries
know of any such claim, and, to the knowledge of the Borrower or any of its
Subsidiaries, the use of such material Intellectual Property by the Borrower or
any of its Subsidiaries does not infringe on the rights of any Person, except
for such claims and infringements that in the aggregate, could not reasonably be
expected to have a Material Adverse Effect. SCHEDULE 3.16 may be updated from
time to time by the Borrower to include new material Intellectual Property by
giving written notice thereof to the Administrative Agent.
SECTION 3.17 SOLVENCY.
The fair saleable value of the assets of the Borrower individually, and of
the Credit Parties taken as a whole, measured on a going concern basis, exceeds
all probable liabilities, including those to be incurred pursuant to this Credit
Agreement. Neither the Borrower individually, nor the Credit Parties taken as a
whole (a) has unreasonably small capital in relation to the business in which it
is or proposes to be engaged or (b) has incurred, or believes that it will incur
after giving effect to the transactions contemplated by this Credit Agreement,
debts beyond its ability to pay such debts as they become due.
SECTION 3.18 INVESTMENTS.
All Investments of each of the Borrower and its Subsidiaries are Permitted
Investments.
SECTION 3.19 LOCATION OF COLLATERAL.
Set forth on SCHEDULE 3.19(A) is a list of the real estate of the Borrower
and its Subsidiaries with street address, county and state where located as of
the Closing Date (or such later date on which the Borrower may update such
schedule). Set forth on SCHEDULE 3.19(B) is a list of all locations (other than
Remote Sales Offices) where any tangible personal property of the Borrower and
its Subsidiaries is located as of the Closing Date (or such later date on which
the Borrower may update such schedule), including county and state where
located. Set forth on SCHEDULE 3.19(C) is the chief executive office and
principal place of business of each of the Borrower and its Subsidiaries as of
the Closing Date (or such later date on which the Borrower may update such
schedule). SCHEDULE 3.19(A), 3.19(B) and 3.19(C) may be updated from time to
time by the Borrower to include new properties or locations by giving written
notice thereof to the Administrative Agent.
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SECTION 3.20 NO BURDENSOME RESTRICTIONS.
None of the Borrower or any of its Subsidiaries is a party to any
agreement or instrument or subject to any other obligation or any charter or
corporate restriction or any provision of any applicable law, rule or regulation
which, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
SECTION 3.21 BROKERS' FEES.
None of the Borrower or any of its Subsidiaries has any obligation to any
Person in respect of any finder's, broker's, investment banking or other similar
fee in connection with any of the transactions contemplated under the Credit
Documents other than the closing and other fees payable pursuant to this Credit
Agreement.
SECTION 3.22 LABOR MATTERS.
There are no collective bargaining agreements or Multiemployer Plans
covering the employees of the Borrower or any of its Subsidiaries as of the
Closing Date, other than as set forth in SCHEDULE 3.22 hereto, and none of the
Borrower or any of its Subsidiaries as of the Closing Date (i) has suffered any
strikes, walkouts, work stoppages or other material labor difficulty within the
last three years or since the date of acquisition of such Subsidiary, whichever
is later, other than as set forth in SCHEDULE 3.22 hereto or (ii) has knowledge
of any potential or pending strike, walkout or work stoppage, which could
reasonably be expected to have a Material Adverse Effect.
SECTION 3.23 ACCURACY AND COMPLETENESS OF INFORMATION.
All factual information heretofore or contemporaneously furnished by or on
behalf of any Credit Party or any of its Subsidiaries to the Administrative
Agent or any Lender for purposes of or in connection with this Agreement or any
other Credit Document, or any transaction contemplated hereby or thereby, is
true and accurate in all material respects and not incomplete by omitting to
state any material fact necessary to make such information not misleading when
taken together with all other information provided to Lender. There is no fact
now known to the Borrower, any other Credit Party or any of their Subsidiaries
which has, or could reasonably be expected to have, a Material Adverse Effect
which fact has not been set forth herein, in the financial statements of the
Borrower and its Subsidiaries furnished to the Administrative Agent and/or the
Lenders, or in any certificate, opinion or other written statement made or
furnished by any Credit Party to the Administrative Agent and/or the Lenders.
SECTION 3.24 MATERIAL CONTRACTS.
Set forth on SCHEDULE 3.24 is a list of the Material Contracts of each of
the Credit Parties. Such contracts are in full force and effect as of the
Closing Date.
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SECTION 3.25 SECURITY DOCUMENTS.
The Security Documents create valid security interests in, and Liens on,
the Collateral purported to be covered thereby, which security interests and
Liens are currently (or will be, upon the filing of appropriate financing
statements and the recordation of the applicable Mortgage Instruments in each
case in favor of First Union, as Collateral Administrative Agent for the
Lenders) perfected security interests and Liens, prior to all other Liens other
than Permitted Liens.
SECTION 3.26 INSURANCE.
As of the Closing Date, the insurance coverage of the Credit Parties is
outlined as to carrier, policy number, expiration date, type and amount on
SCHEDULE 5.5(B). The Credit Parties maintain insurance in accordance in at least
such amounts and against at least such risks as are usually insured against in
the same general area by companies engaged in the same or similar business.
ARTICLE IV
CONDITIONS PRECEDENT
SECTION 4.1 CONDITIONS TO CLOSING DATE AND INITIAL REVOLVING LOANS AND
TERM LOANS.
This Agreement shall become effective upon, and the obligation of each
Lender to make the initial Revolving Loans and Term Loans on the Closing Date is
subject to, the satisfaction of the following conditions precedent:
(a) EXECUTION OF AGREEMENT. The Administrative Agent shall have
received (i) counterparts of this Agreement executed by a duly authorized
officer of each party hereto, (ii) for the account of each Lender, a
Revolving Note and a Term Note, (iii) for the account of the Swingline
Lender, a Swingline Note and (iii) counterparts of the Security Agreement
and the Pledge Agreement, in each case conforming to the requirements of
this Agreement and executed by duly authorized officers of the Credit
Parties.
(b) AUTHORITY DOCUMENTS. Except as set forth on SCHEDULE 3.3, the
Administrative Agent shall have received the following:
(i) ARTICLES OF INCORPORATION. Copies of the articles or
certificate of incorporation of each Credit Party certified to be
true and complete as of a recent date by the appropriate
governmental authority of the state of its incorporation.
(ii) RESOLUTIONS. Copies of resolutions of the board of
directors of each Credit Party approving and adopting the Credit
Documents, the transactions
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contemplated therein and authorizing execution and delivery thereof,
certified by an officer of such Credit Party as of the Closing Date
to be true and correct and in force and effect as of such date.
(iii) BYLAWS. A copy of the bylaws of each Credit Party
certified by an officer of such Credit Party as of the Closing Date
to be true and correct and in force and effect as of such date.
(iv) GOOD STANDING. Copies of (i) certificates of good
standing, existence or its equivalent with respect to each Credit
Party certified as of a recent date by the appropriate governmental
authorities of the state of incorporation and each other state in
which the failure to so qualify and be in good standing could
reasonably be expected to have a Material Adverse Effect on the
business or operations of the Borrower and its Subsidiaries in such
state and (ii) a certificate indicating payment of all corporate
franchise taxes certified as of a recent date by the appropriate
governmental taxing authorities.
(v) INCUMBENCY. An incumbency certificate of each Credit Party
certified by a secretary or assistant secretary to be true and
correct as of the Closing Date.
(c) LEGAL OPINIONS OF COUNSEL. The Administrative Agent shall have
received an opinion of Winstead Sechrest & Minick P.C., counsel for the
Credit Parties, dated the Closing Date and addressed to the Administrative
Agent and the Lenders in the form attached hereto as SCHEDULE 4.1(C).
(d) PERSONAL PROPERTY COLLATERAL. The Administrative Agent shall
have received, in form and substance satisfactory to the Administrative
Agent:
(i) searches of Uniform Commercial Code filings in the
jurisdiction of the chief executive office of each Credit Party and
each jurisdiction where any Collateral is located or where a filing
would need to be made in order to perfect the Administrative 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 Administrative
Agent's sole discretion, to perfect the Administrative 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 Administrative Agent in order to perfect
the Administrative Agent's security interest in the Collateral
consisting of intellectual property;
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(iv) all stock certificates evidencing the Capital Stock
pledged to the Administrative Agent pursuant to the Pledge
Agreement, together with duly executed in blank undated stock powers
attached thereto (unless, with respect to the pledged Capital Stock
of any Foreign Subsidiary, such stock powers are deemed unnecessary
by the Administrative Agent in its reasonable discretion under the
law of the jurisdiction of incorporation of such Person);
(v) all instruments and chattel paper evidencing obligations
in excess of $100,000 in the aggregate in the possession of any of
the Credit Parties, together with allonges or assignments as may be
necessary or appropriate to perfect the Administrative Agent's
security interest in such Collateral;
(vi) duly executed consents as are necessary, in the
Administrative Agent's sole discretion, to perfect the Lenders'
security interest in the Collateral; and
(vii) in the case of any personal property Collateral located
at premises leased by a Credit Party, such estoppel letters,
consents and waivers from the landlords on such real property as may
be required by and in form and substance satisfactory to the
Administrative Agent.
(e) LIABILITY AND CASUALTY INSURANCE. The Administrative Agent shall
have received copies of insurance policies or certificates of insurance
evidencing liability and casualty insurance meeting the requirements set
forth herein or in the Security Documents. The Administrative Agent shall
be named as loss payee and additional insured on all such insurance
policies for the benefit of the Lenders.
(f) FEES. The Administrative Agent shall have received all fees, if
any, owing pursuant to the Fee Letter and Section 2.4.
(g) LITIGATION. There shall not exist any pending or threatened
litigation, proceeding, injunction, order, claim or investigation
affecting or relating to Borrower or any of its Subsidiaries or the
transactions contemplated by this Agreement, or the other Credit Documents
that in the reasonable judgment of the Administrative Agent could
materially adversely affect the Borrower or any of its Subsidiaries or the
transactions contemplated by this Agreement or the other Credit Documents,
that has not been settled, dismissed, vacated, discharged or terminated
prior to the Closing Date.
(h) SOLVENCY EVIDENCE. The Administrative Agent shall have received
an officer's certificate prepared by the chief accounting officer of the
Borrower as to the financial condition, solvency and related matters of
the Borrower individually, and the Credit Parties taken as a whole, in
each case after giving effect to the initial borrowings under the Credit
Documents, in substantially the form of SCHEDULE 4.1(H) hereto.
(i) ACCOUNT DESIGNATION LETTER. The Administrative Agent shall have
received the executed Account Designation Letter in the form of SCHEDULE
1.1(A) hereto.
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(j) MATERIAL CONTRACTS. The Administrative Agent shall have received
and reviewed to its satisfaction all Material Contracts of the Credit
Parties.
(k) CORPORATE STRUCTURE. The corporate, capital and ownership
structure of the Borrower and the other Credit Parties shall be as
described in SCHEDULE 3.12. The Administrative Agent shall be satisfied
with the management structure, legal structure, voting control, liquidity,
total leverage and total capitalization of the Borrower and the other
Credit Parties as of the Closing Date.
(l) GOVERNMENT CONSENT. The Administrative Agent shall have received
evidence that all governmental, shareholder and material third party
consents and approvals necessary in connection with the transactions
contemplated hereby have been obtained and all applicable waiting periods
have expired without any action being taken by any authority that could
restrain, prevent or impose any material adverse conditions on the
transactions or that could seek or threaten any of the foregoing.
(m) COMPLIANCE WITH LAWS. The transactions contemplated hereby shall
be in compliance with all applicable laws and regulations (including all
applicable securities and banking laws, rules and regulations).
(n) BANKRUPTCY. There shall be no bankruptcy or insolvency
proceedings with respect to the Borrower or any of its Subsidiaries.
(o) EXISTING LOAN AGREEMENT. The Borrower shall have repaid in full
all principal, interest and other amounts owing under the Loan Agreement
dated as of June 4, 1997 by and among the Borrower, the lenders party
thereto and Chase Bank of Texas, National Association (formerly known as
Texas Commerce Bank National Association), as agent, as such agreement may
have been amended, modified or supplemented from time to time.
(p) FINANCIAL INFORMATION. The Administrative Agent shall have
received copies of the financial information referred to in Section 3.1
hereof, each in form and substance satisfactory to the Administrative
Agent.
(q) MATERIAL ADVERSE CHANGE. Since March 31, 2000, no development or
event which has had or could reasonably be expected to have a Material
Adverse Effect shall have occurred.
(r) DUE DILIGENCE. The Administrative Agent and the Arranger shall
have completed, in form and scope satisfactory thereto, their due
diligence on the Credit Parties.
(s) ENVIRONMENTAL REPORTS. The Administrative Agent shall have
received satisfactory environmental reviews of all real property owned by
the Credit Parties.
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(t) OFFICER'S CERTIFICATES. The Administrative Agent shall have
received a certificate or certificates executed by a responsible officer
of the Borrower as of the Closing Date stating that (i) no action, suit,
investigation or proceeding is pending or, to the knowledge of any Credit
Party, 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 reasonably be expected to have a
Material Adverse Effect and (ii) immediately after giving effect to this
Credit Agreement, the other Credit Documents and all the transactions
contemplated therein to occur on such date, (A) no Default or Event of
Default exists, (B) all representations and warranties contained herein
and in the other Credit Documents are true and correct in all material
respects, and (C) the Credit Parties are in compliance with each of the
financial covenants set forth in Section 5.9.
(u) FINANCIAL COVENANT COMPLIANCE CERTIFICATE. The Administrative
Agent shall have received a certificate dated the Closing Date in
substantially the form of SCHEDULE 4.1(U) executed by a responsible
officer of the Borrower demonstrating compliance with the financial
covenants set forth in Section 5.9 for the last twelve consecutive
calendar month period ending on September 30, 2000.
(v) ENVIRONMENTAL CERTIFICATE. The Administrative Agent shall have
received a certificate executed by the Chief Executive Officer of the
Borrower as of the Closing Date stating that, to the best of his
knowledge, (a) the Properties do not contain any Materials of
Environmental Concern in amounts or concentrations which (i) constitute a
violation of, or (ii) would give rise to liability under, any
Environmental Law; (b) the Properties and all operations of the Borrower
and the other Credit Parties and/or their Subsidiaries at the Properties
are in compliance, and have in the last five years or since the date of
acquisition of such Subsidiary, whichever is later, been in compliance, in
all material respects with all applicable Environmental Laws, and there is
no contamination at, under or about the Properties or violation of any
Environmental Law with respect to the Properties or Business; (c) neither
the Borrower nor any of the other Credit Parties has received any written
notice of violation, alleged violation, non-compliance, liability or
potential liability regarding compliance with Environmental Laws with
regard to any of the Properties or the Business, nor does the Borrower or
any of the other Credit Parties nor any of their Subsidiaries have any
awareness of 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 in violation of, or in a
manner or to a location which would give rise to liability under any
Environmental Law, nor have any Materials of Environmental Concern been
generated, treated, stored or disposed of at, on or under any of the
Properties in violation of, or in a manner that would give rise to
liability under, any applicable Environmental Law; (e) no judicial
proceeding or governmental or administrative action is pending or, to the
knowledge of the Borrower and the other Credit Parties, threatened, under
any Environmental Law to which the Borrower or any other Credit Party or
any Subsidiary is or will be named as a party with respect to the
Properties or the Business, nor are there any consent decrees or other
decrees, consent orders, administrative orders or other orders, or other
binding and enforceable Requirements of Law outstanding under any
Environmental Law applicable
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to the Properties or the Business; and (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 of the Borrower
or any other Credit Party or any Subsidiary in connection with the
Properties, in violation of or in amounts or in a manner that would give
rise to liability under Environmental Laws.
(g) ADDITIONAL MATTERS. All other documents and legal matters in
connection with the transactions contemplated by this Agreement shall be
reasonably satisfactory in form and substance to the Administrative Agent
and its counsel.
SECTION 4.2 CONDITIONS TO ALL EXTENSIONS OF CREDIT.
The obligation of each Lender to make any Extension of Credit hereunder is
subject to the satisfaction of the following conditions precedent on the date of
making such Extension of Credit:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties made by the Credit Parties herein, in the Security Documents or
which are contained in any certificate furnished at any time under or in
connection herewith shall be true and correct in all material respects on
and as of the date of such Extension of Credit as if made on and as of
such date (except for those which expressly relate to an earlier date).
(b) NO DEFAULT OR EVENT OF DEFAULT. No Default or Event of Default
shall have occurred and be continuing on such date or after giving effect
to the Extension of Credit to be made on such date unless such Default or
Event of Default shall have been waived in accordance with this Agreement.
(c) COMPLIANCE WITH COMMITMENTS. Immediately after giving effect to
the making of any such Extension of Credit (and the application of the
proceeds thereof), (i) the sum of the aggregate principal amount of
outstanding Revolving Loans PLUS Swingline Loans PLUS LOC Obligations
shall not exceed the aggregate Revolving Committed Amount, (ii) the
Swingline Loans shall not exceed the Swingline Commitment and (iii) the
LOC Obligations shall not exceed the LOC Committed Amount.
(d) ADDITIONAL CONDITIONS TO REVOLVING LOANS. If such Loan is made
pursuant to Section 2.1, all conditions set forth in such Section shall
have been satisfied.
(e) ADDITIONAL CONDITIONS TO SWINGLINE LOAN. If such Loan is made
pursuant to Section 2.2, all conditions set forth in such Section shall
have been satisfied.
(f) ADDITIONAL CONDITIONS TO LETTERS OF CREDIT. If such Extension of
Credit is made pursuant to Section 2.3, all conditions set forth in such
Section shall have been satisfied.
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(g) ADDITIONAL CONDITIONS TO TERM LOANS. If such Loan is made
pursuant to Section 2.4, all conditions set forth in such Section shall
have been satisfied.
Each request for an Extension of Credit and each acceptance by the
Borrower of any such Extension of Credit shall be deemed to constitute a
representation and warranty by the Borrower as of the date of such Extension of
Credit that the applicable conditions in paragraphs (a) through (g) of this
Section have been satisfied.
ARTICLE V
AFFIRMATIVE COVENANTS
Each Credit Party hereby covenants and agrees that on the Closing Date,
and thereafter for so long as this Agreement is in effect and until the
Commitments have terminated, no Note remains outstanding and unpaid and the
Credit Party Obligations, together with interest, Commitment Fees and all other
amounts owing to the Administrative Agent or any Lender hereunder, are paid in
full, the Borrower shall, and shall cause each of its Subsidiaries (other than
in the case of Sections 5.1, 5.2 or 5.7 hereof), to:
SECTION 5.1 FINANCIAL STATEMENTS.
Furnish to the Administrative Agent and each of the Lenders:
(a) ANNUAL FINANCIAL STATEMENTS. As soon as available, but in any
event within one hundred twenty (120) days after the end of each fiscal
year, a copy of the consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at the end of such fiscal year and the
related consolidated statements of income and retained earnings and of
cash flows of the Borrower and its consolidated Subsidiaries for such
year, which consolidated statements shall be audited by a firm of
independent certified public accountants of nationally recognized standing
reasonably acceptable to the Administrative Agent, setting forth in each
case in comparative form the figures for the previous year, reported on
without a "going concern" or like qualification or exception, or
qualification indicating that the scope of the audit was inadequate to
permit such independent certified public accountants to certify such
financial statements without such qualification;
(b) QUARTERLY FINANCIAL STATEMENTS. As soon as available and in any
event within sixty (60) days after the end of each of the first three
fiscal quarters of the Borrower, a company-prepared consolidated balance
sheet of the Borrower and its consolidated Subsidiaries as at the end of
such period and related company-prepared consolidated statements of income
and retained earnings and of cash flows for the Borrower and its
consolidated Subsidiaries for such quarterly period and for the portion of
the fiscal year ending with such period, in each case setting forth in
comparative form consolidated figures for the corresponding period or
periods of the preceding fiscal year (subject to normal year-end audit
adjustments);
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(c) ANNUAL BUDGET PLAN AND FINANCIAL PROJECTIONS. As soon as
available, but in any event within forty-five (45) days after the
beginning of each fiscal year, a copy of detailed projections of the
income statements, cash flow and balance sheets of the Borrower and its
consolidated Subsidiaries for each fiscal year through the Maturity Date,
in form and detail reasonably acceptable to the Administrative Agent and
the Required Lenders, together with a summary of the material assumptions
made in the preparation of such annual budget or plan and financial
projections;
all such financial statements to be complete and correct in all material
respects (subject, in the case of interim statements, to normal recurring
year-end audit adjustments) and to be prepared in reasonable detail and, in the
case of the annual and quarterly financial statements provided in accordance
with subsections (a) and (b) above, in accordance with GAAP applied consistently
throughout the periods reflected therein and further accompanied by a
description of, and an estimation of the effect on the financial statements on
account of, a change, if any, in the application of accounting principles as
provided in Section 1.3.
SECTION 5.2 CERTIFICATES; OTHER INFORMATION.
Furnish to the Administrative Agent and each of the Lenders:
(a) concurrently with the delivery of the financial statements
referred to in Section 5.1(a) above, a certificate of the independent
certified public accountants reporting on such financial statements
stating that in making the examination necessary therefor no knowledge was
obtained of any Default or Event of Default, except as specified in such
certificate;
(b) concurrently with the delivery of the financial statements
referred to in Sections 5.1(a) and 5.1(b) above, a certificate of a
Responsible Officer stating that, to the best of such Responsible
Officer's knowledge, each of the Credit Parties during such period
observed or performed in all material respects all of its covenants and
other agreements, and satisfied in all material respects every condition,
contained in this Agreement to be observed, performed or satisfied by it,
and that such Responsible Officer has obtained no knowledge of any Default
or Event of Default except as specified in such certificate and such
certificate shall include the calculations in reasonable detail required
to indicate compliance with Sections 5.9, 6.1(c), 6.1(j) and 6.4(b);
(c) within thirty (30) days after the same are sent, copies of all
reports (other than those otherwise provided pursuant to Section 5.1 and
those which are of a promotional nature) and other financial information
which the Borrower sends to its shareholders or noteholders generally, and
within thirty days after the same are filed, copies of all financial
statements and non-confidential reports which the Borrower may make to, or
file with the Securities and Exchange Commission or any successor or
analogous Governmental Authority;
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(d) promptly upon receipt thereof, a copy of any other report or
"management letter" submitted by independent accountants to the Borrower
or any of its Subsidiaries in connection with any annual, interim or
special audit of the books of such Person; and
(e) in connection with the consummation of any Permitted
Acquisition, the Borrower shall satisfy the following requirements:
(i) the Borrower shall have delivered to the Administrative
Agent a Pro Forma Compliance Certificate dated as of the expected
closing date of the acquisition;
(ii) the Borrower shall have delivered to the Administrative
Agent on or before the closing date of the acquisition a description
of the acquisition (including, without limitation, a description of
the Person or assets to be acquired, the purchase price, the manner
of acquisition, the payment structure and any other terms and
conditions reasonably required by the Administrative Agent) and a
draft copy of the purchase agreement, merger agreement or similar
governing document (including schedules thereto to the extent such
schedules are then available and relate to the Borrower's compliance
with this Agreement, but excluding exhibits) with respect to the
acquisition;
(iii) the Borrower shall have delivered to the Administrative
Agent all documents required pursuant to Section 5.10 hereof
pursuant to the provisions thereof;
(iv) the Borrower shall have delivered to the Administrative
Agent copies of the purchase agreement, merger agreement or similar
governing document (including schedules thereto to the extent such
schedules are then available and relate to the Borrower's compliance
with this Agreement, but excluding exhibit(s) and all opinions of
counsel to the seller and/or the Person to be acquired) with respect
to the acquisition within sixty (60) days after the closing of the
acquisition; and
(v) the Borrower shall have provided to the Administrative
Agent such other documents reasonably requested by the
Administrative Agent in connection with such acquisition.
(f) in connection with the any acquisition other than a Permitted
Acquisition, for which the consent of the Required Lenders is required,
the Borrower shall comply with the following additional requirements:
(i) the Borrower shall have delivered to the Lenders, not less
than ten (10) business days prior to the proposed closing date of
the acquisition, a description of the acquisition (including,
without limitation, a description of the Person or assets to be
acquired, the purchase price, the manner of acquisition, the payment
structure and any other terms and conditions reasonably required by
the Administrative Agent) and a draft copy of the purchase
agreement, merger
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agreement or similar governing document (including schedules thereto
to the extent such schedules are then available and relate to the
Borrower's compliance with this Agreement, but excluding exhibits)
with respect to the acquisition;
(ii) the Borrower shall have delivered to the Lenders, not
less than ten (10) business days prior to the proposed closing date
of the acquisition, all due diligence reports prepared by or on
behalf of the Borrower or the applicable Subsidiary thereof;
(iii) the Borrower shall have delivered to the Lenders, not
less than ten (10) business days prior to the proposed closing date
of the acquisition, the historical financial statements of the
Person to be acquired, if applicable, for the most recent two (2)
year period and the most recent interim financial statements of the
Person to be acquired;
(iv) the Borrower shall have delivered to the Lenders, not
less than ten (10) business days prior to the proposed closing date
of the acquisition, a projected income statement, statement of cash
flows and balance sheet (including, without limitation, a summary of
assumptions and pro forma adjustments made in connection therewith)
of the Person to be acquired, if applicable, prepared on a quarterly
basis for the ensuing three (3) year period;
(v) the Borrower shall have delivered to the Administrative
Agent, on or before the closing date of the acquisition, a Pro Forma
Compliance Certificate;
(vi) the Borrower shall have delivered to the Administrative
Agent all documents required pursuant to Section 5.10 hereof
pursuant to the provisions thereof;
(vii) the Borrower shall deliver to the Administrative Agent,
promptly after the closing date of the acquisition, copies of all
opinions of counsel to the seller and/or the Person to be acquired
which are delivered in connection with the acquisition;
(viii) the Borrower shall have delivered to the Administrative
Agent evidence of the approval of the acquisition by the board of
directors or equivalent governing body (or the shareholders) of the
seller and/or or the Person to be acquired within twenty (20) days
after the closing of the acquisition;
(ix) the Borrower shall have delivered to the Administrative
Agent a copy of the final purchase agreement, merger agreement or
similar governing document (including schedules thereto to the
extent such schedules are then available and relate to the
Borrower's compliance with this Agreement, but excluding exhibits)
with respect to the acquisition on the closing of the acquisition
within twenty (20) days after the closing of the acquisition; and
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(x) the Borrower shall have provided to the Administrative
Agent such other documents reasonably requested by the
Administrative Agent in connection with such acquisition.
(g) promptly, such additional financial and other information as the
Administrative Agent, on behalf of any Lender, may from time to time
reasonably request.
SECTION 5.3 PAYMENT OF OBLIGATIONS.
Pay, discharge or otherwise satisfy at or before maturity or before they
become delinquent, as the case may be, in accordance with industry practice
(subject, where applicable, to specified grace periods) all its material
obligations of whatever nature and any additional costs that are imposed as a
result of any failure to so pay, discharge or otherwise satisfy such
obligations, except when the amount or validity of such obligations and costs is
currently being contested in good faith by appropriate proceedings and reserves,
if applicable, in conformity with GAAP with respect thereto have been provided
on the books of the Borrower or its Subsidiaries as the case may be.
SECTION 5.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE.
Continue to engage in business of the same general type as now conducted
by it on the Closing Date and preserve, renew and keep in full force and effect
its corporate existence (except for transactions permitted by Section 6.6(b))
and take all reasonable action to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business and comply with all
Contractual Obligations and Requirements of Law applicable to it except to the
extent that failure to comply with this Section 5.4 could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.
SECTION 5.5 MAINTENANCE OF PROPERTY; INSURANCE.
(a) Keep all property useful and necessary in its business in good
working order and condition (immaterial portions of such property and
ordinary wear and tear and obsolescence excepted);
(b) Maintain with financially sound and reputable insurance
companies insurance on all its material property (including without
limitation its material tangible Collateral) in at least such amounts and
against at least such risks as are usually insured against in the same
general area by companies engaged in the same or a similar business; and
furnish to the Administrative Agent, upon written request, full
information as to the insurance carried; PROVIDED, HOWEVER, that the
Borrower and its Subsidiaries may maintain self insurance plans to the
extent companies of similar size and in similar businesses do so. The
Administrative Agent shall be named as loss payee or mortgagee, as its
interest may appear, with respect to casualty policies and/or additional
insured with respect to any liability insurance providing coverage in
respect of any Collateral, and each provider of any such insurance shall
agree, by endorsement upon the policy or policies
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issued by it or by independent instruments furnished to the Administrative
Agent, that it will give the Administrative Agent thirty (30) days prior
written notice before any such policy or policies shall be altered or
canceled, and that no act or default of the Borrower or any of its
Subsidiaries or any other Person shall affect the rights of the
Administrative Agent or the Lenders under such policy or policies. The
insurance coverage of the Borrower and its Subsidiaries as of the Closing
Date is outlined as to carrier, policy number, expiration date, type and
amount on SCHEDULE 5.5(B); and
(c) In case of any loss, damage to or destruction of a material
portion of the Collateral of any Credit Party or any part thereof, such
Credit Party shall promptly give written notice thereof to the
Administrative 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 (i) such Credit
Party, whether or not the insurance proceeds, if any, received on account
of such damage or destruction shall be sufficient for that purpose, at
such Credit Party's cost and expense, will promptly repair or replace the
Collateral of such Credit Party so lost, damaged or destroyed and (ii)
such insurance, if any, will be paid to such Credit Party to repair or
replace said Collateral or to repay the Loans in accordance with Section
2.7(b)(iv) hereof.
SECTION 5.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS.
Keep proper books of records and account in which full, true and correct
entries in compliance with all Requirements of Law shall be made of all dealings
and transactions in relation to its businesses and activities and, in the case
of Borrower, sufficient to permit reporting in accordance with GAAP; and permit,
during regular business hours and upon reasonable notice by the Administrative
Agent or any Lender, the Administrative Agent or any Lender to visit and inspect
any of its properties and examine and make abstracts from any of its books and
records (other than materials protected by the attorney-client privilege and
materials which the Borrower may not disclose without violation of a
confidentiality obligation binding upon it) at any reasonable time and as often
as may reasonably be desired, and to discuss the business, operations,
properties and financial and other condition of the Borrower and its
Subsidiaries with officers and employees of the Borrower and its Subsidiaries
and with their independent certified public accountants.
SECTION 5.7 NOTICES.
Give notice in writing to the Administrative Agent (which shall promptly
transmit such notice to each Lender) of:
(a) promptly but in any event within two (2) Business Days after the
Borrower knows or has reason to know thereof of the occurrence of any
Default or Event of Default;
(b) promptly, any default or event of default under any Contractual
Obligation of the Borrower or any of its Subsidiaries or Material
Contracts which could reasonably be expected to have a Material Adverse
Effect;
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(c) promptly, any litigation, or any investigation or proceeding
known to the Borrower, affecting the Borrower or any of its Subsidiaries
which, if adversely determined, could reasonably be expected to have a
Material Adverse Effect;
(d) as soon as possible and in any event within thirty (30) days
after the Borrower knows or has reason to know: (i) the occurrence or
expected occurrence of any Reportable Event with respect to any Plan, a
failure to make any required contribution to a Plan the creation of any
Lien in favor of the PBGC (other than a Permitted Lien) or a Plan or any
withdrawal from, or the termination, Reorganization or Insolvency of, any
Multiemployer Plan or (ii) the institution of proceedings or the taking of
any other action by the PBGC or the Borrower or any Commonly Controlled
Entity or any Multiemployer Plan with respect to the withdrawal from, or
the terminating, Reorganization or Insolvency of any Plan; and
(e) promptly, any other development or event which could reasonably
be expected to have a Material Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Borrower proposes to take with respect thereto. In
the case of any notice of a Default or Event of Default, the Borrower shall
specify that such notice is a Default or Event of Default notice on the face
thereof.
SECTION 5.8 ENVIRONMENTAL LAWS.
(a) Comply in all material respects with, and ensure compliance in
all material respects by all tenants and subtenants, if any, with, all
applicable Environmental Laws and obtain and comply in all material
respects with and maintain, and ensure that all tenants and subtenants
obtain and comply in all material respects with and maintain, any and all
licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws, except to the extent that failure to do so
could not reasonably be expected to have a Material Adverse Effect;
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all
lawful orders and directives of all Governmental Authorities regarding
Environmental Laws except to the extent that the same are being contested
in good faith by appropriate proceedings and the pendency of such
proceedings could not reasonably be expected to have a Material Adverse
Effect;
(c) Defend, indemnify and hold harmless the Administrative Agent and
the Lenders, and their respective employees, agents, officers and
directors, from and against any and all claims, demands, penalties, fines,
liabilities, settlements, damages, costs and expenses of whatever kind or
nature known or unknown, contingent or otherwise, arising out of, or in
any way relating to the violation of, noncompliance with or liability
under,
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any Environmental Law applicable to the operations of the Borrower, any of
its Subsidiaries or the Properties, or any orders, requirements or demands
of Governmental Authorities related thereto, including, without
limitation, reasonable attorney's and consultant's fees, investigation and
laboratory fees, response costs, court costs and litigation expenses,
except to the extent that any of the foregoing arise out of the gross
negligence or willful misconduct of any indemnified person. The agreements
in this paragraph shall survive repayment of the Notes and all other
amounts payable hereunder;
(d) As soon as practicable, but in any event with ten Business Days
following the Closing Date, deliver to the Administrative Agent, copies of
the executive summaries from each of the Phase I environmental assessments
completed for all of the Properties;
(e) As soon as practicable, but in any event within 20 Business Days
following the Closing Date, deliver to the Administrative Agent, a summary
prepared by Law Engineering and Environmental Services, Inc. of the Phase
I environmental assessments of all of the Properties; and
(f) Promptly provide any additional documentation and perform any
investigations, studies, sampling and testing, and all remedial, removal,
clean-up and other actions as reasonably requested by the Administrative
Agent (including, without limitation, the delivery to the Administrative
Agent of complete Phase I environmental assessments on each of the
Properties previously completed prior to the Closing Date and the
completion by an environmental consultant reasonably acceptable to the
Agent of Phase II environmental assessments on those Properties to the
extent requested by the Administrative Agent).
SECTION 5.9 FINANCIAL COVENANTS.
Commencing on the day immediately following the Closing Date, the Borrower
shall, and shall cause each other Credit Party to, comply with the following
financial covenants:
(a) LEVERAGE RATIO. The Leverage Ratio, as of the last day of each
fiscal quarter of the Borrower and its Subsidiaries occurring during the
periods indicated below, shall be less than or equal to the following:
PERIOD RATIO
------ -----
Closing Date through and including September 30, 2002 3.00 to 1.0
October 1, 2002 through and including September 30, 2003 2.75 to 1.0
October 1, 2003 through and including September 30, 2004 2.50 to l.0
October 1, 2004 and thereafter 2.25 to l.0
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(b) INTEREST COVERAGE RATIO. The Interest Coverage Ratio, as of the
last day of each fiscal quarter of the Borrower and its Subsidiaries
occurring during the periods indicated below, shall be greater than or
equal to the following:
PERIOD RATIO
------ -----
Closing Date through and including September 30, 2002 3.50 to 1.0
October 1, 2002 through and including September 30, 2003 3.75 to 1.0
October 1, 2003 and thereafter 4.00 to 1.0
(c) FIXED CHARGE COVERAGE RATIO. The Fixed Charge Coverage Ratio, as
of the last day of each fiscal quarter of the Borrower and its
Subsidiaries occurring during the periods indicated below, shall be
greater than or equal to the following:
PERIOD RATIO
------ -----
Closing Date through and including September 30, 2002 1.50 to 1.0
October 1, 2002 through and including September 30, 2003 1.40 to 1.0
October 1, 2003 and thereafter 1.50 to 1.0
(d) CONSOLIDATED NET WORTH. Consolidated Net Worth at all times
shall be greater than or equal to 85% of Consolidated Net Worth of the
Borrower and its consolidated Subsidiaries as of June 30, 2000 PLUS 50% of
Consolidated Net Income for all fiscal quarters after June 30, 2000 where
Consolidated Net Income was positive PLUS 100% of all Equity Issuances
after June 30, 2000 LESS 100% of all Stock Repurchases after June 30,
2000.
(e) CONSOLIDATED CAPITAL EXPENDITURES. As of the end of each fiscal
quarter of the Borrower beginning with the fiscal quarter ending December
31, 2000, Consolidated Capital Expenditures of the Borrower for the
immediately preceding twelve month period shall not exceed one hundred
fifty percent (150%) of the last twelve month depreciation and
amortization of the Borrower and its consolidated Subsidiaries determined
on a rolling four fiscal quarter basis.
SECTION 5.10 ADDITIONAL GUARANTORS.
The Credit Parties will cause each of their Domestic Subsidiaries, whether
newly formed, after acquired or otherwise existing, upon the creation or
acquisition thereof, to become a Guarantor hereunder by way of execution of a
Joinder Agreement. The guaranty obligations of any such Additional Credit Party
shall be secured by, among other things, the Collateral of the Additional Credit
Party and a pledge of 100% of the Capital Stock or other equity interest of its
Domestic Subsidiaries and 65% of the Capital Stock or other equity interest of
its first tier Foreign Subsidiaries, and a pledge by the Borrower or other
Credit Party which is the owner of the Capital Stock or other equity interest in
such Subsidiary of 100% of the Capital Stock if it is a Domestic Subsidiary and
65% of its Capital Stock or other equity interest if it is a first tier Foreign
Subsidiary.
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SECTION 5.11 COMPLIANCE WITH LAW.
Each Credit Party will, and will cause each of its Subsidiaries to, comply
with all laws, rules, regulations and orders, and all applicable restrictions
imposed by all Governmental Authorities, applicable to it and its Property if
noncompliance with any such law, rule, regulation, order or restriction could
reasonably be expected to have a Material Adverse Effect.
SECTION 5.12 PLEDGED ASSETS.
(a) Each Credit Party will cause 100% of the Capital Stock of each
of its direct or indirect Domestic Subsidiaries owned by such Credit Party
and its Domestic Subsidiaries and 65% of the Capital Stock in each of the
first tier Foreign Subsidiaries owned by such Credit Party and its
Domestic Subsidiaries to be subject at all times to a first priority,
perfected Lien (subject to Permitted Liens and in the case of Foreign
Subsidiaries, applicable foreign laws regarding security interest and
perfection matters) in favor of the Administrative Agent pursuant to the
terms and conditions of the Security Documents or such other security
documents as the Administrative Agent shall reasonably request.
(b) If, subsequent to the Closing Date, a Credit Party shall (a)
acquire any Intellectual Property, securities, instruments, chattel paper
or other personal property required to be pledged to the Administrative
Agent as Collateral hereunder or under any of the Security Documents or
(b) acquire or lease any real property, the Borrower shall promptly (and
in any event within ten (10) Business Days) after any Responsible Officer
of a Credit Party acquires knowledge of same notify the Administrative
Agent of same. Each Credit Party shall, and shall cause each of its
Subsidiaries to, take such action at its own expense as requested by the
Administrative Agent (including, without limitation, any of the actions
described in Section 4.1(d) or (e) hereof) to ensure that the
Administrative Agent has a first priority perfected Lien to secure the
Credit Party Obligations in (i) all personal property of the Credit
Parties located in the United States and (ii) to the extent deemed to be
material by the Administrative Agent or the Required Lenders in its or
their sole reasonable discretion, all other personal property of the
Credit Parties, subject in each case only to Permitted Liens. Each Credit
Party shall, and shall cause each of its Subsidiaries to, adhere to the
covenants regarding the location of personal property as set forth in the
Security Documents.
SECTION 5.13 FURTHER ASSURANCES.
(a) As soon as practicable, but in any event within 90 days
following the Closing Date, the Borrower shall have used its commercially
reasonable efforts to deliver to the Administrative Agent, a landlord lien
waiver letter in form and substance reasonably acceptable to the
Administrative Agent and the Borrower from each of the landlords of those
locations set forth on Schedule 5.13 attached hereto. In addition, the
Borrower shall take all actions reasonably requested by the Administrative
Agent to obtain such landlord lien waiver letters and any other documents
or certificates reasonably requested by the Administrative Agent in
connection therewith.
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(b) As soon as practicable, but in any event within 45 days
following the Closing Date, (i) each of Chas P. Young Company, a New York
corporation, Automated Graphic Imaging/Copy Center, Inc., a District of
Columbia corporation, and Automated Graphic Systems-Ohio, Inc., a Maryland
corporation, shall (x) become a Guarantor hereunder by way of execution of
a Joinder Agreement as set forth in Section 5.10 hereof and shall deliver
to the Administrative Agent all corporate authority or other
organizational documents (including a certificate of the secretary of each
such Guarantor with incumbency information attached) as the Administrative
Agent shall reasonably request or (y) shall be dissolved and the assets
therein, if any, transferred to the Borrower and (ii) the Borrower shall
or shall cause each applicable Credit Party to, deliver to the
Administrative Agent all corporate authority or other organizational
documents not otherwise delivered on the Closing Date as more specifically
set forth on SCHEDULE 3.3.
(c) As soon as practicable, but in any event within 90 days
following the Closing Date, the Credit Parties shall have terminated all
of the security interests and Liens relating thereto which are noted to be
so terminated as set forth on Schedule 1.1(b) with respect to the personal
property encumbered by such security interests and Liens.
ARTICLE VI
NEGATIVE COVENANTS
The Borrower and each other Credit Party hereby covenants and agrees that
on the Closing Date, and thereafter for so long as this Agreement is in effect
and until the Commitments have terminated, no Note remains outstanding and
unpaid and the Credit Party Obligations, together with interest, Commitment Fees
and all other amounts owing to the Administrative Agent or any Lender hereunder,
are paid in full that:
SECTION 6.1 INDEBTEDNESS.
The Credit Parties will not, nor will they permit any Subsidiary to,
contract, create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness arising or existing under this Agreement and the
other Credit Documents;
(b) Indebtedness of the Borrower and its Subsidiaries existing as of
September 30, 2000 and set out more specifically in SCHEDULE 6.1(B) hereto
and Indebtedness assumed after September 30, 2000 in connection with
acquisitions permitted under Section 6.6(c) (provided that such
Indebtedness was not incurred in connection with such acquisition and any
Liens existing in connection with such Indebtedness shall relate only to
the assets financed thereby), and renewals, refinancings or extensions
thereof in a principal amount not in excess of that outstanding as of the
date of such renewal, refinancing or extension;
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(c) Indebtedness of the Borrower and its Subsidiaries incurred after
September 30, 2000 consisting of purchase money Indebtedness incurred to
provide all or a portion of the purchase price or cost of construction of
equipment provided that (i) such Indebtedness when incurred shall not
exceed the purchase price or cost of construction of such equipment; (ii)
no such Indebtedness shall be refinanced for a principal amount in excess
of the principal balance outstanding thereon at the time of such
refinancing; and (iii) the amount of such Indebtedness incurred pursuant
to this Section 6.1(c) plus the amount of the Indebtedness of the type
described herein and set forth on SCHEDULE 6.1(B) shall not exceed the
greater of (x) $100,000,000 or (y) 100% of Pro Forma Consolidated EBITDA
of the Borrower and its consolidated Subsidiaries for the twelve month
period ending on the last day of the most recently ended fiscal quarter;
(d) Unsecured intercompany Indebtedness among the Borrower and its
Subsidiaries;
(e) Indebtedness and obligations owing under Hedging Agreements
relating to the Loans hereunder and other Hedging Agreements entered into
in order to manage existing or anticipated interest rate, exchange rate or
commodity price risks and not for speculative purposes;
(f) Indebtedness and obligations of the Credit Parties owing under
documentary letters of credit for the purchase of goods or other
merchandise (but not under standby, direct pay or other letters of credit
except for the Letters of Credit hereunder) generally;
(g) Indebtedness which may be deemed to exist pursuant to any
performance, surety, statutory, appeal or similar obligations obtained in
the ordinary course of business;
(h) Guaranty Obligations permitted by Section 6.3;
(i) Indebtedness incurred after September 30, 2000 consisting of
Capital Leases incurred to provide all or a portion of the purchase price
(or finance such purchase price within ninety (90) days of acquisition) or
cost of improvement or construction of an asset provided that (i) such
Indebtedness when incurred shall not exceed the purchase price or cost of
construction of such asset; (ii) no such Indebtedness shall be refinanced
for a principal amount in excess of the principal balance outstanding
thereon at the time of such refinancing; and (iii) the total amount of all
such Indebtedness shall not exceed $2,000,000 at any time outstanding; and
(j) Other Indebtedness of the Borrower and its Subsidiaries incurred
after September 30, 2000 which when added to the amount of Indebtedness
set forth on Schedule 6.1(b) to the extent not included in Sections 6.1(c)
or 6.1(i) hereof does not exceed $20,000,000 in the aggregate at any time
outstanding.
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SECTION 6.2 LIENS.
The Credit Parties will not, nor will they permit any Subsidiary to,
contract, create, incur, assume or permit to exist any Lien with respect to any
of its property or assets of any kind (whether real or personal, tangible or
intangible), whether now owned or hereafter acquired, except for Permitted
Liens.
SECTION 6.3 GUARANTY OBLIGATIONS.
The Credit Parties will not, nor will they permit any Subsidiary to, enter
into or otherwise become or be liable in respect of any Guaranty Obligations
(excluding specifically therefrom endorsements in the ordinary course of
business of negotiable instruments for deposit or collection) except:
(a) those in favor of the Lenders in connection with the Credit
Party Obligations;
(b) Guaranty Obligations by the Borrower or its Subsidiaries of
Indebtedness and other obligations referred to in and permitted under
Section 6.1 (except, as regards Indebtedness under subsection (b) thereof,
only if and to the extent such Indebtedness was guaranteed on the Closing
Date); and
(c) Other Guaranty Obligations which do not exceed $2,000,000 in the
aggregate at any time outstanding.
SECTION 6.4 EARNOUT OBLIGATIONS.
The Borrower will not, nor will it permit any Subsidiary to, enter into
any agreement (in connection with any Permitted Acquisition or otherwise) the
result of which, would cause the Borrower and/or any Subsidiary of the Borrower
to become obligated, or contingently obligated, for an Earnout Obligation
except:
(a) Earnout Obligations existing as of September 30, 2000, as set
forth on SCHEDULE 6.4; and
(b) Other Earnout Obligations which (i) do not exceed $35,000,000 in
the aggregate (including, without limitation, Earnout Obligations set
forth on SCHEDULE 6.4 and not expired) and (ii) do not cause the aggregate
amount of Earnout Obligations potentially due in any one fiscal year of
the Borrower to exceed $10,000,000.
SECTION 6.5 NATURE OF BUSINESS.
Except as otherwise permitted in Section 6.6, the Borrower will not, nor
will it permit any Subsidiary to, alter the character of the business of the
Borrower or its Subsidiaries in any material respect from that conducted as of
the Closing Date.
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SECTION 6.6 CONSOLIDATION, MERGER, ACQUISITIONS, SALE OR PURCHASE OF
ASSETS, ETC.
The Borrower will not, nor will it permit any Subsidiary to,
(a) dissolve, liquidate or wind up its affairs, sell, transfer,
lease (as lessor) or otherwise dispose of its property or assets or agree
to do so at a future time except the following, without duplication, shall
be expressly permitted:
(i) Specified Sales;
(ii) the sale, transfer, lease or other disposition of
property or assets to an unrelated party not in the ordinary course
of business (other than Specified Sales), where and to the extent
that they are the result of a Recovery Event, so long as and the net
proceeds therefrom are used to (A) repair or replace damaged
property or to purchase or otherwise acquire replacement assets or
property within 180 days of the receipt of such proceeds or (B)
prepay the Loans in accordance with Section 2.7(b)(iv);
(iii) the sale, lease, transfer or other disposition of
machinery, parts, equipment, land and buildings no longer used or
useful in the conduct of the business of the Borrower or any of its
Subsidiaries, as appropriate, in its reasonable discretion, so long
as and the net proceeds therefrom are used to (A) repair or replace
damaged property or to purchase or otherwise acquire replacement
assets or property, PROVIDED that such purchase or acquisition is
committed to within 180 days of receipt of the net proceeds and such
purchase or acquisition is consummated within 270 days of receipt of
such proceeds or (B) prepay the Loans in accordance with Section
2.7(b)(ii);
(iv) the sale, lease, transfer or other disposition of assets
of an acquired company or business, provided such disposition is
completed within 180 days of the initial acquisition of such assets;
(v) the sale, lease or transfer of property or assets (at fair
value) between the Borrower and any Guarantor;
(vi) the sale, lease or transfer of property or assets from a
Credit Party other than the Borrower to another Credit Party;
(vii) the sale, lease or transfer of property or assets not
otherwise permitted by clauses (i) through (vi) above, provided the
amount of such sale, lease or transfer does not exceed $5,000,000 in
the aggregate in any fiscal year; and
(viii) the voluntary dissolution, liquidation or winding-up in
connection with a merger or sale of all or substantially all of the
assets of a Subsidiary otherwise permitted hereunder;
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PROVIDED, that (a) with respect to subclause (vii) above at least 75% of
the consideration received therefor by the Borrower or any such Subsidiary
is in the form of cash or Cash Equivalents and (b) with respect to sales
of assets permitted hereunder only, the Administrative Agent shall be
entitled, without the consent of the Required Lenders, to release its
Liens relating to the particular assets sold; or
(b) enter into any transaction of merger or consolidation, except
for the merger or consolidation of a Credit Party with and into another
Credit Party, provided that if the Borrower is a party thereto, the
Borrower will be the surviving corporation; or
(c) enter into any transaction or series of transactions for the
purposes of acquiring all or a substantial portion of the assets, property
and/or Capital Stock of any Person other than, so long as no Default or
Event of Default shall have occurred and be continuing or would result
therefrom on a Pro Forma Basis, the acquisition by any Credit Party of all
or a majority of the Capital Stock or other ownership interest in (or all
or a substantial portion of the assets, property and/or operations of) any
Person PROVIDED that (i) such acquisition is of a Person in the same or a
similar line of business, (ii) aggregate consideration for such
acquisition is no more than 20% of the Consolidated Net Worth of the
Borrower and its Subsidiaries, (iii) the Borrower can demonstrate, on a
Pro Forma Basis, after giving effect to such acquisition that the Leverage
Ratio of the Borrower is at least 0.25 to 1.00 less than the then
otherwise applicable covenant level set forth in Section 5.9(a) hereof,
and (iv) the Borrower shall comply with the requirements of Section 5.2(e)
hereof.
SECTION 6.7 ADVANCES, INVESTMENTS AND LOANS.
The Borrower will not, nor will it permit any Subsidiary to, lend money or
extend credit or make advances to any Person, or purchase or acquire any stock,
obligations or securities of, or any other interest in, or make any capital
contribution to, any other Person except for Permitted Investments.
SECTION 6.8 TRANSACTIONS WITH AFFILIATES.
Except as permitted in subsection (iv) of the definition of Permitted
Investments and customary compensation arrangements entered into in the ordinary
course of business, the Borrower will not, nor will it permit any Subsidiary to,
enter into any transaction or series of transactions, whether or not in the
ordinary course of business, with any officer, director, shareholder or
Affiliate other than on terms and conditions substantially as favorable as would
be obtainable in a comparable arm's-length transaction with a Person other than
an officer, director, shareholder or Affiliate.
SECTION 6.9 OWNERSHIP OF SUBSIDIARIES; RESTRICTIONS.
The Borrower will not, nor will it permit any Subsidiary to, create, form
or acquire any Subsidiaries, except for Domestic Subsidiaries which are joined
(or those who participate in a merger in which another entity survives and the
survivor joins) as Additional Credit Parties
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within thirty (30) days in accordance with the terms hereof. The Borrower will
not sell, transfer, pledge or otherwise dispose of any Capital Stock or other
equity interests in any of it Subsidiaries, nor will it permit any of its
Subsidiaries to issue, sell, transfer, pledge or otherwise dispose of any of
their Capital Stock or other equity interests, except in a transaction permitted
by Section 6.6.
SECTION 6.10 FISCAL YEAR; ORGANIZATIONAL DOCUMENTS; MATERIAL CONTRACTS.
The Borrower will not, nor will it permit any of its Subsidiaries to,
change its fiscal year or accounting policies unless permitted by GAAP or, with
respect to a Subsidiary, to change so as to be in conformity with the fiscal
year of the Borrower. The Borrower will not, nor will it permit any Subsidiary
to, amend, modify or change its articles of incorporation (or corporate charter
or other similar organizational document) or bylaws (or other similar document)
without the prior written consent of the Required Lenders unless such amendment,
modification or change could not reasonably be expected to materially adversely
effect the interests of the Lenders hereunder. The Borrower will not, nor will
it permit any of its Subsidiaries to, without the prior written consent of the
Administrative Agent, amend, modify, waive any default of or breach under,
cancel or terminate or fail to renew or extend or permit the amendment,
modification, waiver of any default of or breach under or cancellation or
termination of any of the Material Contracts unless such amendment,
modification, waiver, cancellation, termination or failure to renew or extend
could not reasonably be expected to have a Material Adverse Effect.
SECTION 6.11 LIMITATION ON RESTRICTED ACTIONS.
The Borrower will not, nor will it permit any Subsidiary to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any such 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 Agreement
and the other Credit Documents, (ii) applicable law, (iii) any document or
instrument governing Indebtedness incurred pursuant to Sections 6.1(c); PROVIDED
that any such restriction contained therein relates only to the asset or assets
constructed or acquired in connection therewith, or (iv) any Permitted Lien or
any document or instrument governing any Permitted Lien, PROVIDED that any such
restriction contained therein relates only to the asset or assets subject to
such Permitted Lien.
SECTION 6.12 RESTRICTED PAYMENTS.
The Borrower will not, nor will it permit any Subsidiary to, directly or
indirectly, declare, order, make or set apart any sum for or pay any Restricted
Payment, except (a) to make dividends payable solely in the same class of
Capital Stock of such Person, (b) to make dividends or other distributions
payable to any Credit Party (directly or indirectly through Subsidiaries), (c)
as
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permitted by Section 6.13 and (d) so long as no Default or Event of Default
shall have occurred and be continuing, or would result therefrom, the Borrower
may repurchase shares of its Capital Stock during the term of this Agreement in
an amount not to exceed the Permitted Repurchase Basket, so long as (i) the
Borrower can demonstrate, after giving effect to such purchase (A) compliance on
a Pro Forma Basis with the financial covenants set forth in Section 5.9 hereof,
as set forth in a compliance certificate and (B) the Leverage Ratio of the
Borrower after giving effect to any such repurchase on a Pro Forma Basis shall
be at least 0.25 to 1.00 less than the otherwise applicable covenant level set
forth in Section 5.9(a). In any event, the total amount of Capital Stock
repurchased pursuant to this Section 6.12 shall not exceed $25,000,000.
SECTION 6.13 PREPAYMENTS OF INDEBTEDNESS, ETC.
The Borrower will not, nor will it permit any Subsidiary to, after the
issuance thereof, amend or modify (or permit the amendment or modification of)
any of the terms of any Subordinated Indebtedness if such amendment or
modification would add or change any terms in a manner adverse to the issuer of
such Subordinated 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.
SECTION 6.14 SALE LEASEBACKS.
The Borrower will not, nor will it permit any Subsidiary to, directly or
indirectly, become or remain liable as lessee or as guarantor or other surety
with respect to any Capital Lease or any "synthetic" lease or other off-balance
sheet financing lease, of any property (whether real, personal or mixed),
whether now owned or hereafter acquired in excess of $2,500,000 in the aggregate
on an annual basis, (a) which the Borrower or any Subsidiary has sold or
transferred or is to sell or transfer to a Person which is not the Borrower or
any Subsidiary or (b) which the Borrower or any Subsidiary intends to use for
substantially the same purpose as the property which has been sold or is to be
sold or transferred by the Borrower or any Subsidiary to another Person in
connection with such lease.
SECTION 6.15 NO FURTHER NEGATIVE PLEDGES.
The Borrower will not, nor will it permit any Subsidiary to, enter into,
assume or become subject to any agreement prohibiting or otherwise restricting
the creation or assumption of any Lien upon its properties or assets, whether
now owned or hereafter acquired, or requiring the grant of any security for such
obligation if security is given for some other obligation except (a) pursuant to
this Agreement and the other Credit Documents, (b) pursuant to applicable law,
(c) pursuant to any document or instrument governing Indebtedness incurred
pursuant to Sections 6.1(c); PROVIDED that any such restriction contained
therein relates only to the asset or assets constructed or acquired in
connection therewith, and (d) in connection with 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.
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ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.1 EVENTS OF DEFAULT.
An Event of Default shall exist upon the occurrence of any of the
following specified events (each an "EVENT OF DEFAULT"):
(a) The Borrower shall fail to pay any principal on any Note when
due in accordance with the terms thereof or hereof; or the Borrower shall
fail to reimburse the Issuing Lender for any LOC Obligations when due in
accordance with the terms hereof; or the Borrower shall fail to pay any
interest on any Note or any fee or other amount payable hereunder when due
in accordance with the terms thereof or hereof and any such failure shall
continue unremedied for three (3) Business Days (or any Guarantor shall
fail to pay on the Guaranty in respect of any of the foregoing or in
respect of any other Guaranty Obligations thereunder); or
(b) Any representation or warranty made or deemed made herein, in
the Security Documents or in any of the other Credit Documents or which is
contained in any certificate, document or financial or other statement
furnished at any time under or in connection with this Agreement shall
prove to have been incorrect, false or misleading in any material respect
on or as of the date made or deemed made; or
(c) (i) Any Credit Party shall fail to perform, comply with or
observe any term, covenant or agreement applicable to it contained in
Section 5.7(a), Section 5.9 or Article VI hereof ; or (ii) any Credit
Party shall fail to comply with any other covenant, contained in this
Credit Agreement or the other Credit Documents or any other agreement,
document or instrument among any Credit Party, the Administrative Agent
and the Lenders or executed by any Credit Party in favor of the
Administrative Agent or the Lenders (other than as described in Sections
7.1(a) or 7.1(c)(i) above), and in the event such breach or failure to
comply is capable of cure, is not cured within thirty (30) days of its
occurrence; or
(d) Any Credit Party or any of its Subsidiaries shall (i) default in
any payment of principal of or interest on any Indebtedness (other than
the Notes) in a principal amount outstanding of at least $2,500,000 for
any individual item of Indebtedness and $5,000,000 in the aggregate for
all such Indebtedness for the Borrower and its Subsidiaries beyond the
period of grace (not to exceed 10 days), if any, provided in the
instrument or agreement under which such Indebtedness was created; or (ii)
default in the observance or performance of any other agreement or
condition relating to any Indebtedness in a principal amount outstanding
of at least $2,500,000 for any individual item of Indebtedness and
$5,000,000 in the aggregate for all such Indebtedness for the Borrower and
its Subsidiaries or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or condition
exist, the effect of which default or other event or condition is to
cause, or to permit the holder or holders of
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such Indebtedness or beneficiary or beneficiaries of such Indebtedness (or
a trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity; or
(e) (i) The Borrower or any of its Subsidiaries shall commence any
case, proceeding or other action (A) under any existing or future law of
any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking (x) to have an order for
relief entered with respect to it or (y) to adjudicate it a bankrupt or
insolvent or (z) reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it
or its debts, or (B) seeking appointment of a receiver, trustee,
custodian, conservator or other similar official for it or for all or any
substantial part of its assets, or the Borrower or any of its Subsidiaries
shall make a general assignment for the benefit of its creditors; or (ii)
there shall be commenced against the Borrower or any of its Subsidiaries
any case, proceeding or other action of a nature referred to in clause (i)
above which (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or (iii) there shall be commenced
against the Borrower or any of its Subsidiaries any case, proceeding or
other action seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or any substantial part of its
assets which results in the entry of an order for any such relief which
shall not have been vacated, discharged, or stayed or bonded pending
appeal within 60 days from the entry thereof; or (iv) the Borrower or any
of its Subsidiaries shall take any action in furtherance of, or indicating
its consent to, approval of, or acquiescence in, any of the acts set forth
in clause (i), (ii), or (iii) above; or (v) the Borrower or any of its
Subsidiaries shall generally not, or shall be unable to, or shall admit in
writing its inability to, pay its debts as they become due; or
(f) One or more judgments or decrees shall be entered against the
Borrower or any of its Subsidiaries involving in the aggregate a liability
(to the extent not paid when due or covered by insurance) of $1,000,000 or
more and all such judgments or decrees shall not have been paid and
satisfied, vacated, discharged, stayed or bonded pending appeal within 10
days from the entry thereof; or
(g) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan or
any Lien in favor of the PBGC or a Plan (other than a Permitted Lien)
shall arise on the assets of the Borrower, or any of its Subsidiaries or
any
Commonly Controlled Entity, (iii) a Reportable Event shall occur with
respect to, or proceedings shall commence to have a trustee appointed, or
a trustee shall be appointed, to administer or to terminate, any Single
Employer Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is, in the reasonable opinion of the Required
Lenders, likely to result in the termination of such Plan for purposes of
Title IV of ERISA, (iv) any Single Employer Plan shall terminate for
purposes of Title IV of ERISA, (v) the Borrower, any of its Subsidiaries
or any
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Commonly Controlled Entity shall, or in the reasonable opinion of the
Required Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, any Multiemployer
Plan or (vi) any other similar event or condition shall occur or exist with
respect to a Plan; and in each case in clauses (i) through (vi) above, such
event or condition, together with all other such events or conditions, if
any, could have a Material Adverse Effect; or
(h) The Guaranty or any provision thereof shall cease to be in full
force and effect or any Guarantor or any Person acting by or on behalf of
any Guarantor shall deny or disaffirm, or fail to perform, any Guarantor's
obligations under the Guaranty;
(i) There shall occur a Change of Control; or
(j) Any other Credit Document shall fail to be in full force and
effect or to give the Administrative Agent and/or the Lenders the security
interests, liens, rights, powers and privileges purported to be created
thereby (except as such documents may be terminated by the Administrative
Agent and/or the Lenders or no longer in force and effect in accordance
with the terms thereof, other than those indemnities and provisions which
by their terms shall survive).
SECTION 7.2 ACCELERATION; REMEDIES.
Upon the occurrence of an Event of Default, then, and in any such event,
(a) if such event is an Event of Default specified in Section 7.1(e) above,
automatically the Commitments shall immediately terminate and the Loans (with
accrued interest thereon), and all other amounts under the Credit Documents
(including without limitation the maximum amount of all contingent liabilities
under Letters of Credit) shall immediately become due and payable, and (b) if
such event is any other Event of Default, either or both of the following
actions may be taken: (i) with the written consent of the Required Lenders, the
Administrative Agent may, or upon the written request of the Required Lenders,
the Administrative Agent shall, by notice to the Borrower declare the
Commitments to be terminated forthwith, whereupon the Commitments shall
immediately terminate; and (ii) the Administrative Agent may, or upon the
written request of the Required Lenders, the Administrative Agent shall, by
notice of default to the Borrower, declare the Loans (with accrued interest
thereon) and all other amounts owing under this Agreement and the Notes to be
due and payable forthwith and direct the Borrower to pay to the Administrative
Agent cash collateral as security for the LOC Obligations for subsequent
drawings under then outstanding Letters of Credit in an amount equal to the
maximum amount which may be drawn under Letters of Credit then outstanding,
whereupon the same shall immediately become due and payable.
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ARTICLE VIII
THE ADMINISTRATIVE AGENT
SECTION 8.1 APPOINTMENT.
Each Lender hereby irrevocably designates and appoints First Union
National Bank as the Administrative Agent of such Lender under this Agreement,
and each such Lender irrevocably authorizes First Union National Bank, as the
Administrative Agent for such Lender, to take such action on its behalf under
the provisions of this Agreement and to exercise such powers and perform such
duties as are expressly delegated to the Administrative Agent by the terms of
this Agreement, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere in this
Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Administrative Agent.
SECTION 8.2 DELEGATION OF DUTIES.
The Administrative Agent may execute any of its duties under this
Agreement by or through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible for the negligence or misconduct
of any agents or attorneys-in-fact selected by it with reasonable care. Without
limiting the foregoing, the Administrative Agent may appoint one of its
affiliates as its agent to perform the functions of the Administrative Agent
hereunder relating to the advancing of funds to the Borrower and distribution of
funds to the Lenders and to perform such other related functions of the
Administrative Agent hereunder as are reasonably incidental to such functions.
SECTION 8.3 EXCULPATORY PROVISIONS.
Neither the Administrative Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates shall be (i) liable for any
action lawfully taken or omitted to be taken by it or such Person under or in
connection with this Agreement (except for its or such Person's own gross
negligence or willful misconduct) or (ii) responsible in any manner to any of
the Lenders for any recitals, statements, representations or warranties made by
the Borrower or any officer thereof contained in this Agreement or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Administrative Agent under or in connection with, this
Agreement or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of any of the Credit Documents or for any failure of the Borrower
to perform its obligations hereunder or thereunder. The Administrative Agent
shall not be under any obligation to any Lender to ascertain or to inquire as to
the observance or performance by the Borrower of any of the agreements contained
in, or conditions of, this Agreement, or to inspect the properties, books or
records of the Borrower.
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SECTION 8.4 RELIANCE BY ADMINISTRATIVE AGENT.
The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any Note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it in
good faith to be genuine and correct and to have been signed, sent or made by
the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Borrower), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless (a) a written notice of assignment, negotiation
or transfer thereof shall have been filed with the Administrative Agent and (b)
the Administrative Agent shall have received the written agreement of such
assignee to be bound hereby as fully and to the same extent as if such assignee
were an original Lender party hereto, in each case in form satisfactory to the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement unless it shall
first receive such advice or concurrence of the Required Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
any of the Credit Documents in accordance with a request of the Required Lenders
or all of the Lenders, as may be required under this Agreement, and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Lenders and all future holders of the Notes.
SECTION 8.5 NOTICE OF DEFAULT.
The Administrative Agent shall not be deemed to have knowledge or notice
of the occurrence of any Default or Event of Default hereunder unless the
Administrative Agent has received notice from a Lender or the Borrower referring
to this Agreement, describing such Default or Event of Default and stating that
such notice is a "notice of default". In the event that the Administrative Agent
receives such a notice, the Administrative Agent shall give prompt notice
thereof to the Lenders. The Administrative Agent shall take such action with
respect to such Default or Event of Default as shall be reasonably directed by
the Required Lenders; PROVIDED, HOWEVER, that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders except to the extent that
this Credit Agreement expressly requires that such action be taken, or not
taken, only with the consent or upon the authorization of the Required Lenders,
or all of the Lenders, as the case may be.
SECTION 8.6 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS.
Each Lender expressly acknowledges that neither the Administrative Agent
nor any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates has made any representation or warranty to it and that no act by the
Administrative Agent hereinafter taken, including any review of the affairs of
the Borrower, shall be deemed to constitute any representation or warranty by
the Administrative Agent to any Lender. Each Lender represents to the
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Administrative Agent that it has, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Borrower and made its own decision to make
its Loans hereunder and enter into this Agreement. Each Lender also represents
that it will, independently and without reliance upon the Administrative Agent
or any other Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement,
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Borrower which may come into
the possession of the Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates.
SECTION 8.7 INDEMNIFICATION.
The Lenders agree to indemnify the Administrative Agent in its capacity
hereunder (to the extent not reimbursed by the Borrower and without limiting the
obligation of the Borrower to do so), ratably according to their respective
Commitment Percentages in effect on the date on which indemnification is sought
under this Section, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever which may at any time (including, without
limitation, at any time following the payment of the Notes) be imposed on,
incurred by or asserted against the Administrative Agent in any way relating to
or arising out of any Credit Document or any documents contemplated by or
referred to herein or therein or the transactions contemplated hereby or thereby
or any action taken or omitted by the Administrative Agent under or in
connection with any of the foregoing; PROVIDED, HOWEVER, that no Lender shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
to the extent resulting from the Administrative Agent's gross negligence or
willful misconduct, as determined by a court of competent jurisdiction. The
agreements in this Section 8.7 shall survive the termination of this Agreement
and payment of the Notes and all other amounts payable hereunder.
SECTION 8.8 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY.
The Administrative Agent and its affiliates may make loans to, accept
deposits from and generally engage in any kind of business with the Borrower as
though the Administrative Agent were not the Administrative Agent hereunder.
With respect to its Loans made or renewed by it and any Note issued to it, the
Administrative Agent shall have the same rights and powers under this Agreement
as any Lender and may exercise the same as though it were not the Administrative
Agent, and the terms "Lender" and "Lenders" shall include the Administrative
Agent in its individual capacity.
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SECTION 8.9 SUCCESSOR ADMINISTRATIVE AGENT.
The Administrative Agent may resign as Administrative Agent upon 30 days'
prior notice to the Borrower and the Lenders. If the Administrative Agent shall
resign as Administrative Agent under this Agreement and the Notes, then the
Required Lenders shall appoint from among the Lenders a successor agent for the
Lenders, which successor agent shall be approved by the Borrower, whereupon such
successor agent shall succeed to the rights, powers and duties of the
Administrative Agent, and the term "Administrative Agent" shall mean such
successor agent effective upon such appointment and approval, and the former
Administrative Agent's rights, powers and duties as Administrative Agent shall
be terminated, without any other or further act or deed on the part of such
former Administrative Agent or any of the parties to this Agreement or any
holders of the Notes. After any retiring Administrative Agent's resignation as
Administrative Agent, the provisions of this Section 8.9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 AMENDMENTS, WAIVERS AND RELEASE OF COLLATERAL.
Neither this Agreement, nor any of the Notes, nor any of the other Credit
Documents, nor any terms hereof or thereof may be amended, supplemented, waived
or modified except in accordance with the provisions of this Section nor may any
Collateral be released except as specifically provided herein or in the Security
Documents or in accordance with the provisions of this Section 9.1. The Required
Lenders may, or, with the written consent of the Required Lenders, the
Administrative Agent may, from time to time, (a) enter into with the Borrower
written amendments, supplements or modifications hereto and to the other Credit
Documents for the purpose of adding any provisions to this Agreement or the
other Credit Documents or changing in any manner the rights of the Lenders or of
the Borrower hereunder or thereunder or (b) waive, on such terms and conditions
as the Required Lenders may specify in such instrument, any of the requirements
of this Agreement or the other Credit Documents or any Default or Event of
Default and its consequences; PROVIDED, however, that no such waiver and no such
amendment, waiver, supplement, modification or release shall:
(i) reduce the amount or extend the scheduled date of maturity
of any Loan or Note or any installment thereon, or reduce the stated
rate of any interest or fee payable hereunder (other than interest
at the Default Rate) or extend the scheduled date of any payment
thereof or increase the amount or extend the expiration date of any
Lender's Commitment, in each case without the written consent of
each Lender directly affected thereby (it being understood and
agreed that changes to the financial definitions and financial
covenants herein shall only require the consent of the Required
Lenders and waivers of Events of Default, conditions precedent and
mandatory prepayments of the Loans required pursuant
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to Section 2.6(b) hereof shall not constitute increases in the
Commitment of any Lender), or
(ii) amend, modify or waive any provision of this Section 9.1
or reduce the percentage specified in the definition of Required
Lenders, without the written consent of all the Lenders, or
(iii) amend, modify or waive any provision of Article VIII
without the written consent of the then Administrative Agent, or
(iv) release a material portion of the Guarantors from their
obligations under the Guaranty without the written consent of all of
the Lenders, or
(v) release a material portion of the Collateral (except in
accordance with the terms of the relevant Security Document),
without the written consent of all of the Lenders, or
(vi) amend, modify or waive the Lender approval requirements
of any provision of the Credit Documents which at such time requires
the consent, approval or request of the Required Lenders or all
Lenders, as the case may be, without the written consent of the
Required Lenders or of all of the Lenders, as the case may be, and,
PROVIDED, FURTHER, that no amendment, waiver or consent affecting
the rights or duties of the Administrative Agent or the Issuing
Lender under any Credit Document shall in any event be effective,
unless in writing and signed by the Administrative Agent and/or the
Issuing Lender, as applicable, in addition to the Lenders required
hereinabove to take such action.
Any such waiver, any such amendment, supplement or modification and any
such release shall apply equally to each of the Lenders and shall be binding
upon the Borrower, the other Credit Parties, the Lenders, the Administrative
Agent and all future holders of the Notes. In the case of any waiver, the
Borrower, the other Credit Parties, the Lenders and the Administrative Agent
shall be restored to their former position and rights hereunder and under the
outstanding Loans and Notes and other Credit Documents, and any Default or Event
of Default waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon.
Notwithstanding any of the foregoing to the contrary, the consent of the
Borrower shall not be required for any amendment, modification or waiver of the
provisions of Article VIII (other than the provisions of Section 8.9); PROVIDED,
HOWEVER, that the Administrative Agent will provide written notice to the
Borrower of any such amendment, modification or waiver. In addition, the
Borrower and the Lenders hereby authorize the Administrative Agent to modify
this Credit Agreement by unilaterally amending or supplementing SCHEDULE 2.1(A)
from time to time in the manner requested by the Borrower, the Administrative
Agent or any Lender in order to reflect any assignments or transfers of the
Loans as provided for hereunder; PROVIDED, HOWEVER, that the Administrative
Agent shall promptly deliver a copy of any such modification to the Borrower and
each Lender.
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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.
SECTION 9.2 NOTICES.
Except as otherwise provided in Article II, all notices, requests and
demands to or upon the respective parties hereto to be effective shall be in
writing (including by telecopy), and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made (a) when delivered by
hand, (b) when transmitted via telecopy (or other facsimile device) to the
number set out herein, (c) the day following the day on which the same has been
delivered prepaid to a reputable national overnight air courier service, or (d)
the third Business Day following the day on which the same is sent by certified
or registered mail, postage prepaid, in each case, addressed as follows in the
case of the Borrower, the other Credit Parties and the Administrative Agent, and
as set forth on SCHEDULE 9.2 in the case of the Lenders, or to such other
address as may be hereafter notified by the respective parties hereto and any
future holders of the Notes:
The Borrower and the other Credit Parties:
Consolidated Graphics, Inc.
5858 Westheimer, Suite 200
Houston, Texas 77057
Attention: Chief Financial Officer
Telecopier: (713) 787-5083
Telephone: (713) 787-0977
with copies to:
Winstead, Sechrest & Minick P.C.
2400 Bank One Center
910 Travis Street
Houston, Texas 77002-5875
Attention: Benny C. Pace
Telecopier: (713) 650-2400
Telephone: (713) 650-2739
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The Administrative Agent:
First Union National Bank
One First Union Center, TW10
Charlotte, North Carolina 28288-0608
Attention: Syndication Agency Services
Telecopier: (704) 383-0288
Telephone: (704) 383-3721
with a copy to:
First Union National Bank
Charlotte Plaza, CP-6
Charlotte, North Carolina 28288-0760
Attention: Laura Smith
Telecopier: (704) 715-1117
Telephone: (704) 383-9832
SECTION 9.3 NO WAIVER; CUMULATIVE REMEDIES.
No failure to exercise and no delay in exercising, on the part of the
Administrative Agent or any Lender, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
SECTION 9.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All representations and warranties made hereunder and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the Notes and the
making of the Loans, PROVIDED that all such representations and warranties shall
terminate on the date upon which the Commitments have been terminated and all
amounts owing hereunder and under any Notes have been paid in full.
SECTION 9.5 PAYMENT OF EXPENSES AND TAXES.
The Borrower agrees (a) to pay or reimburse the Administrative Agent for
all its reasonable out-of-pocket costs and expenses incurred in connection with
the development, preparation, negotiation, printing and execution of, and any
amendment, supplement or modification to, this Agreement and the other Credit
Documents and any other documents prepared in connection herewith or therewith,
and the consummation and administration of the transactions contemplated hereby
and thereby, together with the reasonable fees and disbursements of counsel to
the Administrative Agent, (b) to pay or reimburse each Lender and the
Administrative Agent for all its costs and expenses incurred in connection with
the enforcement or preservation of any rights under this Agreement, the Notes
and any such other
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documents, including, without limitation, the reasonable fees and disbursements
of counsel to the Administrative Agent and to the Lenders (including reasonable
allocated costs of in house legal counsel), and (c) on demand, to pay,
indemnify, and hold each Lender and the Administrative Agent harmless from, any
and all recording and filing fees and any and all liabilities with respect to,
or resulting from any delay in paying, stamp, excise and other similar taxes, if
any, which may be payable or determined to be payable in connection with the
execution and delivery of, or consummation or administration of any of the
transactions contemplated by, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, the Credit Documents and any
such other documents, and (d) to pay, indemnify, and hold each Lender and the
Administrative Agent and their Affiliates and their respective officers,
directors, employees, Administrative Agents, and advisors harmless from and
against, any and all other liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of the Credit Documents and any such other
documents and the use, or proposed use, of proceeds of the Loans (all of the
foregoing, collectively, the "INDEMNIFIED LIABILITIES"); PROVIDED, HOWEVER, that
the Borrower shall not have any obligation hereunder to the Administrative Agent
or any Lender or any other indemnified person with respect to indemnified
liabilities arising from the gross negligence or willful misconduct of the
Administrative Agent or any such Lender or any other such indemnified person, as
determined by a court of competent jurisdiction. The agreements in this Section
9.5 shall survive repayment of the Loans, Notes and all other amounts payable
hereunder.
SECTION 9.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS; PURCHASING LENDERS.
(a) This Agreement shall be binding upon and inure to the benefit of
the Borrower, the Lenders, the Administrative Agent, all future holders of
the Notes and their respective successors and assigns, except that the
Borrower may not assign or transfer any of its rights or obligations under
this Agreement or the other Credit Documents without the prior written
consent of each Lender.
(b) Any Lender may, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time sell to one or
more banks or other entities ("PARTICIPANTS") participating interests in
any Loan owing to such Lender, any Note held by such Lender, any
Commitment of such Lender, or any other interest of such Lender hereunder.
In the event of any such sale by a Lender of participating interests to a
Participant, such Lender's obligations under this Agreement to the other
parties to this Agreement shall remain unchanged, such Lender shall remain
solely responsible for the performance thereof, such Lender shall remain
the holder of any such Note for all purposes under this Agreement, and the
Borrower and the Administrative Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. No Lender shall transfer or grant any
participation under which the Participant shall have rights to approve any
amendment to or waiver of this Agreement or any other Credit Document
except to the extent such amendment or waiver would (i) extend the
scheduled maturity of any Loan or Note or any installment thereon in which
such Participant is participating, or reduce the stated rate or extend the
time of payment of interest or fees thereon (except in connection with a
waiver
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of interest at the Default Rate) or reduce the principal amount thereof,
or increase the amount of the Participant's participation over the amount
thereof then in effect (it being understood that a waiver of any Default
or Event of Default, shall not constitute a change in the terms of such
participation, and that an increase in any Commitment or Loan shall be
permitted without consent of any participant if the Participant's
participation is not increased as a result thereof), (ii) release any of
the Guarantors from their obligations under the Guaranty (iii) release all
or substantially all of the Collateral (other than in accordance with the
terms of the respective Security Documents), or (iv) consent to the
assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement. In the case of any such participation,
the Participant shall not have any rights under this Agreement or any of
the other Credit Documents (the Participant's rights against such Lender
in respect of such participation to be those set forth in the agreement
executed by such Lender in favor of the Participant relating thereto) and
all amounts payable by the Borrower hereunder shall be determined as if
such Lender had not sold such participation, PROVIDED that each
Participant shall be entitled to the benefits of Sections 2.16, 2.17, 2.18
and 9.5 with respect to its participation in the Commitments and the Loans
outstanding from time to time; PROVIDED, that no Participant shall be
entitled to receive any greater amount pursuant to such Sections than the
transferor Lender would have been entitled to receive in respect of the
amount of the participation transferred by such transferor Lender to such
Participant had no such transfer occurred.
(c) Any Lender may, in the ordinary course of its business and in
accordance with applicable law, at any time, sell or assign to any Lender
or any affiliate thereof and, with the consent of the Administrative
Agent, and, so long as no Event of Default has occurred and is continuing,
the Borrower (in each case, which consent shall not be unreasonably
withheld), to one or more additional banks or financial institutions
("PURCHASING LENDERS"), all or any part of its rights and obligations
under this Agreement and the Notes in minimum amounts of $5,000,000 with
respect to its Revolving Commitment and its Revolving Loans or its Term
Loan (or, if less, the entire amount of such Lender's obligations),
pursuant to a Commitment Transfer Supplement, executed by such Purchasing
Lender and such transferor Lender (and, in the case of a sale or
assignment to a Purchasing Lender that is not then a Lender or an
affiliate thereof, the Administrative Agent and, so long as no Event of
Default has occurred and is continuing, the Borrower), and delivered to
the Administrative Agent for its acceptance and recording in the Register;
PROVIDED, HOWEVER, that any sale or assignment to an existing Lender shall
not require the consent of the Administrative Agent or the Borrower nor
shall any such sale or assignment be subject to the minimum assignment
amounts specified herein. Upon such execution, delivery, acceptance and
recording, from and after the Transfer Effective Date specified in such
Commitment Transfer Supplement, (x) the Purchasing Lender thereunder shall
be a party hereto and, to the extent provided in such Commitment Transfer
Supplement, have the rights and obligations of a Lender hereunder with a
Commitment as set forth therein, and (y) the transferor Lender thereunder
shall, to the extent provided in such Commitment Transfer Supplement, be
released from its obligations under this Agreement (and, in the case of a
Commitment Transfer Supplement covering all or the remaining portion of a
transferor Lender's rights and obligations under this Agreement, such
transferor Lender shall cease to be a party hereto).
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Such Commitment Transfer Supplement shall be deemed to amend this
Agreement to the extent, and only to the extent, necessary to reflect the
addition of such Purchasing Lender and the resulting adjustment of
Commitment Percentages arising from the purchase by such Purchasing Lender
of all or a portion of the rights and obligations of such transferor
Lender under this Agreement and the Notes. On or prior to the Transfer
Effective Date specified in such Commitment Transfer Supplement, the
Borrower, at its own expense, shall execute and deliver to the
Administrative Agent in exchange for the Notes delivered to the
Administrative Agent pursuant to such Commitment Transfer Supplement new
Notes to the order of such Purchasing Lender in an amount equal to the
Commitment assumed by it pursuant to such Commitment Transfer Supplement
and, unless the transferor Lender has not retained a Commitment hereunder,
new Notes to the order of the transferor Lender in an amount equal to the
Commitment retained by it hereunder. Such new Notes shall be dated the
Closing Date and shall otherwise be in the form of the Notes replaced
thereby. The Notes surrendered by the transferor Lender shall be returned
by the Administrative Agent to the Borrower marked "canceled".
(d) The Administrative Agent shall maintain at its address referred
to in Section 9.2 a copy of each Commitment Transfer Supplement delivered
to it and a register (the "REGISTER") for the recordation of the names and
addresses of the Lenders and the Commitment of, and principal amount of
the Loans owing to, each Lender from time to time. The entries in the
Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Administrative Agent and the Lenders may treat each Person
whose name is recorded in the Register as the owner of the Loan recorded
therein for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower or any Lender at any reasonable
time and from time to time upon reasonable prior notice.
(e) Upon its receipt of a duly executed Commitment Transfer
Supplement, together with payment to the Administrative Agent by the
transferor Lender or the Purchasing Lender, as agreed between them, of a
registration and processing fee of $3,500 for each Purchasing Lender
listed in such Commitment Transfer Supplement and the Notes subject to
such Commitment Transfer Supplement, the Administrative Agent shall (i)
accept such Commitment Transfer Supplement, (ii) record the information
contained therein in the Register and (iii) give prompt notice of such
acceptance and recordation to the Lenders and the Borrower.
(f) The Borrower authorizes each Lender to disclose to any
Participant or Purchasing Lender (each, a "TRANSFEREE") and any
prospective Transferee any and all financial information in such Lender's
possession concerning the Borrower and its Affiliates which has been
delivered to such Lender by or on behalf of the Borrower pursuant to this
Agreement or which has been delivered to such Lender by or on behalf of
the Borrower in connection with such Lender's credit evaluation of the
Borrower and their Affiliates prior to becoming a party to this Agreement,
in each case subject to Section 9.16.
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(g) At the time of each assignment pursuant to this Section 9.6 to a
Person which is not already a Lender hereunder and which is not a United
States person (as such term is defined in Section 7701(a)(30) of the Code)
for Federal income tax purposes, the respective assignee Lender shall
provide to the Borrower and the Administrative Agent the appropriate
Internal Revenue Service Forms (and, if applicable, a 2.18 Certificate)
described in Section 2.18.
(h) Nothing herein shall prohibit any Lender (and no consent of the
Administrative Agent or the Borrower shall be required) from pledging or
assigning any of its rights under this Agreement as collateral security
for its obligations, including without limitation, any right to payment of
principal and interest under any Note, to any Federal Reserve Bank in
accordance with applicable laws.
SECTION 9.7 ADJUSTMENTS; SET-OFF.
(a) Each Lender agrees that if any Lender (a "BENEFITED LENDER")
shall at any time receive any payment of all or part of its Loans, or
interest thereon, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off, pursuant to events or
proceedings of the nature referred to in Section 7.1(e), or otherwise) in
a greater proportion than any such payment to or collateral received by
any other Lender, if any, in respect of such other Lender's Loans, or
interest thereon, such benefited Lender shall purchase for cash from the
other Lenders a participating interest in such portion of each such other
Lender's Loan, or shall provide such other Lenders with the benefits of
any such collateral, or the proceeds thereof, as shall be necessary to
cause such benefited Lender to share the excess payment or benefits of
such collateral or proceeds ratably with each of the Lenders; PROVIDED,
HOWEVER, that if all or any portion of such excess payment or benefits is
thereafter recovered from such benefited Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of
such recovery, but without interest. The Borrower agrees that each Lender
so purchasing a portion of another Lender's Loans may exercise all rights
of payment (including, without limitation, rights of set-off) with respect
to such portion as fully as if such Lender were the direct holder of such
portion.
(b) In addition to any rights and remedies of the Lenders provided
by law (including, without limitation, other rights of set-off), each
Lender shall have the right, without prior notice to the Borrower, any
such notice being expressly waived by the Borrower to the extent permitted
by applicable law, upon the occurrence of any Event of Default, to setoff
and appropriate and apply any and all deposits (general or special, time
or demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held
or owing by such Lender or any branch or agency thereof to or for the
credit or the account of the Borrower, or any part thereof in such amounts
as such Lender may elect, against and on account of the obligations and
liabilities of the Borrower to such Lender hereunder and claims of every
nature and description of such Lender against the Borrower, in any
currency, arising hereunder, under the Notes or under any documents
contemplated by or referred to herein or therein,
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as such Lender may elect, whether or not such Lender has made any demand
for payment and although such obligations, liabilities and claims may be
contingent or unmatured. The aforesaid right of set-off may be exercised
by such Lender against the Borrower or against any trustee in bankruptcy,
debtor in possession, assignee for the benefit of creditors, receiver or
execution, judgment or attachment creditor of the Borrower, or against
anyone else claiming through or against the Borrower or any such trustee
in bankruptcy, debtor in possession, assignee for the benefit of
creditors, receiver, or execution, judgment or attachment creditor,
notwithstanding the fact that such right of set-off shall not have been
exercised by such Lender prior to the occurrence of any Event of Default.
Each Lender agrees promptly to notify the Borrower and the Administrative
Agent after any such set-off and application made by such Lender;
PROVIDED, HOWEVER, that the failure to give such notice shall not affect
the validity of such set-off and application.
SECTION 9.8 TABLE OF CONTENTS AND SECTION HEADINGS.
The table of contents and the Section and subsection headings herein are
intended for convenience only and shall be ignored in construing this Agreement.
SECTION 9.9 COUNTERPARTS.
This Agreement may be executed by one or more of the parties to this
Agreement on any number of separate counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same instrument. A set
of the copies of this Agreement signed by all the parties shall be lodged with
the Borrower and the Administrative Agent.
SECTION 9.10 EFFECTIVENESS.
This Credit Agreement shall become effective on the date on which all of
the parties have signed a copy hereof (whether the same or different copies) and
shall have delivered the same to the Administrative Agent pursuant to SECTION
9.2 or, in the case of the Lenders, shall have given to the Administrative Agent
written, telecopied or telex notice (actually received) at such office that the
same has been signed and mailed to it.
SECTION 9.11 SEVERABILITY.
Any provision of this Agreement which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
SECTION 9.12 INTEGRATION.
This Agreement and the Notes represent the agreement of the Borrower, the
Administrative Agent and the Lenders with respect to the subject matter hereof,
and there are no
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promises, undertakings, representations or warranties by the Administrative
Agent, the Borrower or any Lender relative to the subject matter hereof not
expressly set forth or referred to herein or in the Notes.
SECTION 9.13 GOVERNING LAW.
THIS AGREEMENT AND THE NOTES AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
UNDER THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NORTH CAROLINA. WITH
RESPECT TO USURY LAWS, IF ANY, APPLICABLE TO THE LENDERS AND TO THE EXTENT
ALLOWED THEREBY, AS SUCH LAWS MAY HEREAFTER BE IN EFFECT WHICH ALLOW A HIGHER
MAXIMUM NONUSURIOUS INTEREST RATE THAN SUCH LAWS NOW ALLOW. THE PROVISIONS OF
CHAPTER 346 OF THE TEXAS FINANCE CODE (WHICH REGULATES CERTAIN REVOLVING CREDIT
LOAN ACCOUNTS AND REVOLVING TRIPARTY ACCOUNTS) SHALL NOT APPLY TO THIS AGREEMENT
OR THE NOTES.
SECTION 9.14 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
All judicial proceedings brought against the Borrower and/or any other
Credit Party with respect to this Agreement, any Note or any of the other Credit
Documents may be brought in any state or federal court of competent jurisdiction
in the courts of the State of North Carolina and by execution and delivery of
this Agreement the Borrower and the other Credit Parties accept, for itself and
in connection with its properties, generally and unconditionally, the
non-exclusive jurisdiction of the aforesaid courts and irrevocably agrees to be
bound by any final judgment rendered thereby in connection with this Agreement
from which no appeal has been taken or is available. Each of the Borrower and
the other Credit Parties irrevocably agrees that all service of process in any
such proceedings in any such court may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar form of mail),
postage prepaid, to it at its address set forth in Section 9.2 or at such other
address of which the Administrative Agent shall have been notified pursuant
thereto, such service being hereby acknowledged by the each of the Borrower and
the other Credit Parties to be effective and binding service in every respect.
Each of the Borrower, the other Credit Parties, the Administrative Agent and the
Lenders irrevocably waives any objection, including, without limitation, any
objection to the laying of venue or based on the grounds of forum non conveniens
which it may now or hereafter have to the bringing of any such action or
proceeding in any such jurisdiction. Nothing herein shall affect the right to
serve process in any other manner permitted by law or shall limit the right of
any Lender to bring proceedings against the Borrower or the other Credit Parties
in the court of any other jurisdiction.
SECTION 9.15 ARBITRATION.
(a) Notwithstanding the provisions of Section 9.14 to the contrary,
upon demand of any party hereto, whether made before or within three (3)
months after institution of any judicial proceeding, any dispute, claim or
controversy arising out of, connected with or relating to this Agreement
and other Credit Documents ("Disputes") between or among parties to this
Agreement shall be resolved by binding arbitration as
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provided herein. Institution of a judicial proceeding by a party does not
waive the right of that party to demand arbitration hereunder. Disputes
may include, without limitation, tort claims, counterclaims, disputes as
to whether a matter is subject to arbitration, claims brought as class
actions, claims arising from Credit Documents executed in the future, or
claims arising out of or connected with the transaction reflected by this
Agreement.
Arbitration shall be conducted under and governed by the Commercial
Arbitration Rules (the "ARBITRATION RULES") of the American Arbitration
Association (the "AAA") and Title 9 of the U.S. Code. All arbitration
hearings shall be conducted in Charlotte, North Carolina. A hearing shall
begin within 90 days of demand for arbitration and all hearings shall be
concluded within 120 days of demand for arbitration. These time
limitations may not be extended unless a party shows cause for extension
and then no more than a total extension of 60 days. The expedited
procedures set forth in Rule 51 ET SEQ. of the Arbitration Rules shall be
applicable to claims of less than $1,000,000. All applicable statutes of
limitation shall apply to any Dispute. A judgment upon the award may be
entered in any court having jurisdiction. Arbitrators shall be licensed
attorneys selected from the Commercial Financial Dispute Arbitration Panel
of the AAA. The parties hereto do not waive applicable Federal or state
substantive law except as provided herein. Notwithstanding the foregoing,
this arbitration provision does not apply to disputes under or related to
Hedging Agreements.
(b) Notwithstanding the preceding binding arbitration provisions,
the Administrative Agent, the Lenders, the Borrower and the other Credit
Parties agree to preserve, without diminution, certain remedies that the
Administrative Agent on behalf of the Lenders may employ or exercise
freely, independently or in connection with an arbitration proceeding or
after an arbitration action is brought. The Administrative Agent on behalf
of the Lenders shall have the right to proceed in any court of proper
jurisdiction or by self-help to exercise or prosecute the following
remedies, as applicable (i) all rights to foreclose against any real or
personal property or other security by exercising a power of sale granted
under Credit Documents or under applicable law or by judicial foreclosure
and sale, including a proceeding to confirm the sale; (ii) all rights of
self-help including peaceful occupation of real property and collection of
rents, set-off, and peaceful possession of personal property; (iii)
obtaining provisional or ancillary remedies including injunctive relief,
sequestration, garnishment, attachment, appointment of receiver and filing
an involuntary bankruptcy proceeding, and (iv) when applicable, a judgment
by confession of judgment. Preservation of these remedies does not limit
the power of an arbitrator to grant similar remedies that may be requested
by a party in a Dispute.
(c) The parties hereto agree that they shall not have a remedy of
punitive or exemplary damages against the other in any Dispute and hereby
waive any right or claim to punitive or exemplary damages they have now or
which may arise in the future in connection with any Dispute whether the
Dispute is resolved by arbitration or judicially.
(d) By execution and delivery of this Agreement, each of the parties
hereto accepts, for itself and in connection with its properties,
generally and unconditionally, the
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non-exclusive jurisdiction relating to any arbitration proceedings
conducted under the Arbitration Rules in Charlotte, North Carolina and
irrevocably agrees to be bound by any final judgment rendered thereby in
connection with this Agreement from which no appeal has been taken or is
available.
SECTION 9.16 CONFIDENTIALITY.
The Administrative Agent and each of the Lenders agrees that it will not
disclose without the prior consent of the Borrower (other than to its employees,
affiliates, auditors, counsel or other Lenders hereunder) any information with
respect to the Credit Parties and their Subsidiaries which is furnished pursuant
to this Agreement, any other Credit Document or any documents contemplated by or
referred to herein or therein and which is designated by the Borrower to the
Lenders in writing as confidential or as to which it is otherwise reasonably
clear such information is not public except that any Lender may disclose any
such information (a) as has become generally available to the public other than
by a breach of this Section 9.16, (b) as may be required or appropriate in any
report, statement or testimony submitted to any municipal, state or federal
regulatory body having or claiming to have jurisdiction over such Lender or to
the National Association of Insurance Commissioners, the Federal Reserve Board,
the Federal Deposit Insurance Corporation, the OCC or any similar regulatory
organizations (whether in the United States or elsewhere) or their successors,
(c) as may be required or appropriate in response to any summons or subpoena or
any law, order, regulation or ruling applicable to such Lender, (d) to any
prospective Participant or assignee in connection with any contemplated transfer
pursuant to Section 9.6, PROVIDED that such prospective transferee shall have
been made aware of this Section 9.16 and shall have agreed in writing to be
bound by its provisions as if it were a party to this Agreement, (e) to GOLD
SHEETS and other similar bank trade publications; such information to consist
only of deal terms and other information regarding the credit facilities
evidenced by this Credit Agreement customarily found in such publications or (f)
to a Lender's representatives, (which shall include, without limitation, any
other bank and company affiliated with a Lender or the parent of a Lender) it
being expressly understood and agreed that such representatives shall be
informed of the confidential nature of the information, shall be required by
such Lender to treat the information as confidential in accordance with the
terms and conditions hereof and such representative shall have agreed in writing
to be bound by this provision as if it were a party to this Agreement.
SECTION 9.17 ACKNOWLEDGMENTS.
The Borrower and the other Credit Parties each hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of each Credit Document;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to the Borrower or any other Credit
Party arising out of or in connection with this Agreement and the
relationship between Administrative Agent and Lenders, on one hand, and
the Borrower and the other Credit Parties, on the other hand, in
connection herewith is solely that of debtor and creditor; and
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(c) no joint venture exists among the Lenders or among the Borrower
or the other Credit Parties and the Lenders.
SECTION 9.18 WAIVERS OF JURY TRIAL.
THE BORROWER, THE OTHER CREDIT PARTIES, THE ADMINISTRATIVE AGENT AND THE
LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
SECTION 9.19 INTEREST.
It is the intention of the parties hereto to conform strictly to usury
laws applicable to the Lenders. Accordingly, if the transactions contemplated
hereby would be usurious under the applicable law (including the laws of the
United States of America and the State of or any other jurisdiction whose laws
may be mandatorily applicable notwithstanding the other provisions of this
Agreement), then, in that event, notwithstanding anything to the contrary in the
Notes, this Agreement or in any other Credit Document or agreement entered into
in connection with or as security for the Notes, it is agreed as follows: (i)
the aggregate of all consideration which constitutes interest under law
applicable to the Lenders that is contracted for, taken, reserved, charged or
received under the Notes, this Agreement or under any of the other aforesaid
Credit Documents or agreements or otherwise in connection with the Notes shall
under no circumstances exceed the maximum amount allowed by such applicable law,
and any excess shall be credited by the Lenders on the principal amount of the
Indebtedness (or, if the principal amount of the Indebtedness shall have been
paid in full, refunded by the Lenders to the Borrower); and (ii) in the event
that the maturity of the Notes is accelerated by reason of an election of the
Lenders resulting from any Event of Default under this Agreement or otherwise,
or in the event of any required or permitted prepayment, then such consideration
that constitutes interest under law applicable to the Lenders may never include
more than the maximum amount allowed by such applicable law, and excess
interest, if any, provided for in this Agreement or otherwise shall be cancelled
automatically as of the date of such acceleration or prepayment and, if
theretofore paid, shall be credited by the Lenders on the principal amount of
the Indebtedness (or, if the principal amount of the Indebtedness shall have
been paid in full, refunded by the Lenders to the Borrower). Without limiting
the foregoing, all calculations of the rate of interest taken, reserved,
contracted for, charged, received or provided for under the Note or any of the
Credit Documents which are made for the purpose of determining whether the
interest rate exceeds the Maximum Rate shall be made, to the extent allowed by
law, by amortizing, prorating, allocating and spreading in equal parts during
the period of the full stated term of the loan evidenced hereby, all interest at
any time taken, reserved, contracted for, charged, received or provided for
under the Note or any of the Credit Documents.
To the extent that Chapter 303 of the Texas Finance Code (Vernon's Texas
Civil Statutes) is relevant to the Lenders for the purpose of determining the
Maximum Rate, the Lenders hereby elect to determine the applicable rate ceiling
under such Chapter by the indicated
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(weekly) rate ceiling from time to time in effect, subject to the Lenders' right
subsequently to change such method in accordance with the applicable law.
If, at any time, the applicable rate exceeds the Maximum Rate, the rate of
interest to accrue on the Notes (or on any of them) shall be limited to the
Maximum Rate, but any subsequent reductions in the applicable rate shall not
reduce the interest to accrue on the Notes (or on any of them) below the Maximum
Rate until the total amount of interest accrued on the Notes (or any of them)
equals the amount of interest which would have accrued if a varying rate per
annum equal to the applicable rate had at all times been in effect. If at
maturity or final payment of the Notes (or any of them) the total amount of
interest paid or accrued on the Notes (or on any of them) under the foregoing
provisions is less than the total amount of interest which would have accrued if
a varying rate per annum equal to the applicable rate had at all times been in
effect, then the Borrower agrees, to the fullest extent permitted by law, to pay
to the Lender an amount equal to the difference between (a) the lesser of (i)
the amount of interest which would have accrued on the Notes (or on any of them)
if the Maximum Rate had at all times been in effect or (ii) the amount of
interest which would have accrued on the Notes (or on any of them) if a varying
rate per annum equal to the applicable rate had at all times been in effect, and
(b) the amount of interest accrued in accordance with the other provisions of
the Notes (or any of them).
ARTICLE X
GUARANTY
SECTION 10.1 THE GUARANTY.
In order to induce the Lenders to enter into this Agreement and to extend
credit hereunder and in recognition of the direct benefits to be received by the
Guarantors from the Extensions of Credit hereunder, each of the Guarantors
hereby agrees with the Administrative Agent and the Lenders as follows: the
Guarantor hereby unconditionally and irrevocably jointly and severally
guarantees as primary obligor and not merely as surety the full and prompt
payment when due, whether upon maturity, by acceleration or otherwise, of any
and all Credit Party Obligations. If any or all of the Credit Party Obligations
becomes due and payable hereunder, each Guarantor unconditionally promises to
pay such indebtedness to the Administrative Agent and the Lenders, on order, or
demand, together with any and all reasonable expenses which may be incurred by
the Administrative Agent or the Lenders in collecting any of the Credit Party
Obligations.
Notwithstanding any provision to the contrary contained herein or in any
other of the Credit Documents, to the extent the obligations of a Guarantor
shall be adjudicated to be invalid or unenforceable for any reason (including,
without limitation, because of any applicable state or federal law relating to
fraudulent conveyances or transfers) then the obligations of each such Guarantor
hereunder shall be limited to the maximum amount that is permissible under
applicable law (whether federal or state and including, without limitation, the
Bankruptcy Code).
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SECTION 10.2 BANKRUPTCY.
Additionally, each of the Guarantors unconditionally and irrevocably
guarantees jointly and severally the payment of any and all indebtedness of the
Borrower to the Lenders whether or not due or payable by the Borrower upon the
occurrence of any of the events specified in Section 7.1(e), and unconditionally
promises to pay such Credit Party Obligations to the Administrative Agent for
the account of the Lenders, or order, on demand, in lawful money of the United
States. Each of the Guarantors further agrees that to the extent that the
Borrower or a Guarantor shall make a payment or a transfer of an interest in any
property to the Administrative Agent or any Lender, which payment or transfer or
any part thereof is subsequently invalidated, declared to be fraudulent or
preferential, or otherwise is avoided, and/or required to be repaid to a
Borrower or a Guarantor, the estate of the Borrower or a Guarantor, a trustee,
receiver or any other party under any bankruptcy law, state or federal law,
common law or equitable cause, then to the extent of such avoidance or
repayment, the obligation or part thereof intended to be satisfied shall be
revived and continued in full force and effect as if said payment had not been
made.
SECTION 10.3 NATURE OF LIABILITY.
The liability of each Guarantor hereunder is exclusive and independent of
any security for or other guaranty of the indebtedness of the Borrower whether
executed by any such Guarantor, any other guarantor or by any other party, and
no Guarantor's liability hereunder shall be affected or impaired by (a) any
direction as to application of payment by the Borrower or by any other party, or
(b) any other continuing or other guaranty, undertaking or maximum liability of
a guarantor or of any other party as to the indebtedness of the Borrower, or (c)
any payment on or in reduction of any such other guaranty or undertaking, or (d)
any dissolution, termination or increase, decrease or change in personnel by the
Borrower, or (e) any payment made to the Administrative Agent or the Lenders on
the indebtedness which the Administrative Agent or such Lenders repay the
Borrower pursuant to court order in any bankruptcy, reorganization, arrangement,
moratorium or other debtor relief proceeding, and each of the Guarantors waives
any right to the deferral or modification of its obligations hereunder by reason
of any such proceeding.
SECTION 10.4 INDEPENDENT OBLIGATION.
The obligations of each Guarantor hereunder are independent of the
obligations of any other guarantor or the Borrower, and a separate action or
actions may be brought and prosecuted against each Guarantor whether or not
action is brought against any other guarantor or a Borrower and whether or not
any other Guarantor or the Borrower is joined in any such action or actions.
SECTION 10.5 AUTHORIZATION.
Each of the Guarantors authorizes the Administrative Agent and each Lender
without notice or demand (except as shall be required by applicable statute and
cannot be waived), and without affecting or impairing its liability hereunder,
from time to time to (a) renew,
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compromise, extend, increase, accelerate or otherwise change the time for
payment of, or otherwise change the terms of the indebtedness or any part
thereof in accordance with this Agreement, including any increase or decrease of
the rate of interest thereon, (b) take and hold security from any guarantor or
any other party for the payment of this Guaranty or the indebtedness and
exchange, enforce waive and release any such security, (c) apply such security
and direct the order or manner of sale thereof as the Administrative Agent and
the Lenders in their discretion may determine and (d) release or substitute any
one or more endorsers, guarantors, the Borrower or other obligors.
SECTION 10.6 RELIANCE.
It is not necessary for the Administrative Agent or the Lenders to inquire
into the capacity or powers of the Borrower or the officers, directors, partners
or agents acting or purporting to act on their behalf, and any indebtedness made
or created in reliance upon the professed exercise of such powers shall be
guaranteed hereunder.
SECTION 10.7 WAIVER.
(a) Each of the Guarantors waives any right (except as shall be
required by applicable statute and cannot be waived) to require the
Administrative Agent or any Lender to (i) proceed against the Borrower,
any other guarantor or any other party, (ii) proceed against or exhaust
any security held from the Borrower, any other guarantor or any other
party, or (iii) pursue any other remedy in the Administrative Agent's or
any Lender's power whatsoever. Each of the Guarantors waives any defense
based on or arising out of any defense of the Borrower, any other
guarantor or any other party other than payment in full of the
indebtedness, including without limitation any defense based on or arising
out of the disability of the Borrower, any other guarantor or any other
party, or the unenforceability of the indebtedness or any part thereof
from any cause, or the cessation from any cause of the liability of the
Borrower other than payment in full of the indebtedness. The
Administrative Agent or any of the Lenders may, at their election,
foreclose on any security held by the Administrative Agent or a Lender by
one or more judicial or nonjudicial sales, whether or not every aspect of
any such sale is commercially reasonable (to the extent such sale is
permitted by applicable law), or exercise any other right or remedy the
Administrative Agent and any Lender may have against the Borrower or any
other party, or any security, without affecting or impairing in any way
the liability of any Guarantor hereunder except to the extent the
indebtedness has been paid. Each of the Guarantors waives any defense
arising out of any such election by the Administrative Agent and each of
the Lenders, even though such election operates to impair or extinguish
any right of reimbursement or subrogation or other right or remedy of the
Guarantors against the Borrower or any other party or any security.
(b) Each of the Guarantors waives all presentments, demands for
performance, protests and notices, including without limitation notices of
nonperformance, notice of protest, notices of dishonor, notices of
acceptance of this Guaranty, and notices of the existence, creation or
incurring of new or additional indebtedness. Each Guarantor assumes all
responsibility for being and keeping itself informed of the Borrower's
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financial condition and assets, and of all other circumstances bearing
upon the risk of nonpayment of the indebtedness and the nature, scope and
extent of the risks which such Guarantor assumes and incurs hereunder, and
agrees that neither the Administrative Agent nor any Lender shall have any
duty to advise such Guarantor of information known to it regarding such
circumstances or risks.
(c) Each of the Guarantors hereby agrees it will not exercise any
rights of subrogation which it may at any time otherwise have as a result
of this Guaranty (whether contractual, under Section 509 of the U.S.
Bankruptcy Code, or otherwise) to the claims of the Lenders against the
Borrower or any other guarantor of the indebtedness of the Borrower owing
to the Lenders (collectively, the "OTHER PARTIES") and all contractual,
statutory or common law rights of reimbursement, contribution or indemnity
from any Other Party which it may at any time otherwise have as a result
of this Guaranty until such time as the Loans hereunder shall have been
paid and the Commitments have been terminated. Each of the Guarantors
hereby further agrees not to exercise any right to enforce any other
remedy which the Administrative Agent and the Lenders now have or may
hereafter have against any Other Party, any endorser or any other
guarantor of all or any part of the indebtedness of the Borrower and any
benefit of, and any right to participate in, any security or collateral
given to or for the benefit of the Lenders to secure payment of the
indebtedness of the Borrower until such time as the Loans hereunder shall
have been paid and the Commitments have been terminated.
SECTION 10.8 LIMITATION ON ENFORCEMENT.
The Lenders agree that this Guaranty may be enforced only by the action of
the Administrative Agent acting upon the instructions of the Required Lenders
and that no Lender shall have any right individually to seek to enforce or to
enforce this Guaranty, it being understood and agreed that such rights and
remedies may be exercised by the Administrative Agent for the benefit of the
Lenders upon the terms of this Agreement. The Lenders further agree that this
Guaranty may not be enforced against any director, officer, employee,
stockholder or other equity holder of the Guarantors.
SECTION 10.9 CONFIRMATION OF PAYMENT.
The Administrative Agent and the Lenders will, upon request after payment of the
indebtedness and obligations which are the subject of this Guaranty and
termination of the commitments relating thereto, confirm to the Borrower, the
Guarantors or any other Person that the such indebtedness and obligations have
been paid and the commitments relating thereto terminated, subject to the
provisions of Section 10.2.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by its proper and duly authorized officers as of the
day and year first above written.
BORROWER: CONSOLIDATED GRAPHICS, INC.,
-------- a Texas corporation
By: /s/ JOE R. DAVIS
Name: Joe R. Davis
Title: Chief Executive Officer
GUARANTORS:
----------
APPLE GRAPHICS, INC.,
a California corporation,
ARTS AND CRAFTS PRESS, INC.,
a California corporation,
AUSTIN PRINTING COMPANY, INC.,
a Georgia corporation,
AUTOMATED GRAPHIC SYSTEMS, INC.,
a Maryland corporation,
BRIDGETOWN PRINTING CO.,
an Oregon corporation,
BYRUM LITHOGRAPHING CO.,
an Ohio corporation,
CHAS. P. YOUNG COMPANY,
a Texas corporation,
CLEAR VISIONS, INC.,
a Texas corporation,
COLUMBIA COLOR, INC.,
a California corporation,
COPY-MOR, INC.,
an Illinois corporation,
COURIER PRINTING COMPANY,
a Tennessee corporation,
[signature pages continue]
<PAGE>
DIGITAL DIRECT, INC.,
a Pennsylvania corporation,
DIRECT COLOR, INC.,
a California corporation,
EAGLE PRESS, INC.,
a California corporation,
EMERALD CITY GRAPHICS, INC.,
a Washington corporation,
FITTJE BROS. PRINTING CO.,
a Colorado corporation,
FREDERIC PRINTING COMPANY,
a Colorado corporation,
GARNER PRINTING COMPANY,
an Iowa corporation,
GEORGES & SHAPIRO LITHOGRAPH, INC.,
a California corporation,
GEYER PRINTING COMPANY, INC.,
a Pennsylvania corporation,
GRAPHIC COMMUNICATIONS, INC.,
a California corporation,
GRAPHIC TECHNOLOGY OF MARYLAND, INC.,
a Maryland corporation,
GROVER PRINTING COMPANY,
a Texas corporation,
H & N PRINTING & GRAPHICS, INC.,
a Maryland corporation,
HERITAGE GRAPHICS, INC.,
a Texas corporation,
IMAGE SYSTEMS, INC.,
a Wisconsin corporation,
IRONWOOD LITHOGRAPHERS, INC.,
an Arizona corporation,
KEYS PRINTING COMPANY,
a South Carolina corporation,
LINCOLN PRINTING CORPORATION,
an Indiana corporation,
MARYLAND COMPOSITION.COM, INC.,
a Maryland corporation,
MAXWELL GRAPHIC ARTS, INC.,
a New Jersey corporation,
MCKAY PRESS, INC.,
a Michigan corporation,
[signature pages continue]
<PAGE>
MERCURY PRINTING COMPANY, INC.,
a Tennessee corporation,
MERCURY WEB PRINTING, INC.,
a Kansas corporation,
METROPOLITAN PRINTING SERVICES, INC.,
an Indiana corporation,
MOBILITY, INC.,
a Virginia corporation,
MOUNT VERNON PRINTING COMPANY,
a Virginia corporation,
MULTIPLE IMAGES PRINTING, INC.,
an Illinois corporation,
PARAGRAPHICS, INC.,
an Illinois corporation,
PICCARI PRESS, INC.,
a Pennsylvania corporation,
PRECISION LITHO, INC.,
a California corporation,
PRIDE PRINTERS, INC.,
a Massachusetts corporation,
PRINTING CORPORATION OF AMERICA,
a Maryland corporation,
PRINTING, INC.,
a Kansas corporation,
RUSH PRESS, INC.,
a California corporation,
STORTERCHILDS PRINTING CO., INC.,
a Florida corporation,
SUPERIOR COLOUR GRAPHICS, INC.,
a Michigan corporation,
TEWELL WARREN PRINTING COMPANY,
a Colorado corporation,
THE ETHERIDGE COMPANY,
a Michigan corporation,
THE GRAPHICS GROUP, INC.,
a Texas corporation,
THE JARVIS PRESS, INC.,
s a Texas corporation,
THE JOHN C. OTTO COMPANY, INC.,
a Massachusetts corporation,
[signature pages continue]
<PAGE>
THE PRINTERY, INC.,
a Wisconsin corporation,
THEO. DAVIS SONS, INCORPORATED,
a North Carolina corporation,
THOUSAND OAKS PRINTING AND SPECIALTIES, INC.,
a California corporation,
TUCKER PRINTERS, INC.,
a Texas corporation,
TULSA LITHO COMPANY,
an Oklahoma corporation,
TURSACK INCORPORATED,
a Pennsylvania corporation,
WALNUT CIRCLE PRESS, INC.,
a North Carolina corporation,
WEB GRAPHICS, INC.,
a Kansas corporation,
WENTWORTH CORPORATION,
a South Carolina corporation,
WESTERN LITHOGRAPH COMPANY,
a Texas corporation,
WESTLAND PRINTERS, INC.,
a Maryland corporation,
WETZEL BROTHERS, INC.,
a Wisconsin corporation,
WOODRIDGE PRESS, INC.,
a California corporation,
CONSOLIDATED GRAPHICS MANAGEMENT, INC.,
a Delaware corporation,
CONSOLIDATED GRAPHICS MANAGEMENT II, INC.,
a Delaware corporation,
CONSOLIDATED GRAPHICS MANAGEMENT III, INC.,
a Delaware corporation,
CGML GENERAL PARTNER, INC.,
a Delaware corporation,
[signature pages continue]
<PAGE>
CONSOLIDATED GRAPHICS PROPERTIES, INC.,
a Texas corporation,
CONSOLIDATED GRAPHICS PROPERTIES II, INC.,
a Texas corporation,
GULF PRINTING COMPANY,
a Texas corporation,
SUPERB PRINTING COMPANY,
a Texas corporation,
GILLILAND PRINTING, INC.
a Kansas corporation,
GRITZ-RITTER GRAPHICS, INC.,
a Colorado corporation,
HEATH PRINTERS, INC.
a Washington corporation
By: /s/ JOE R. DAVIS
Name: Joe R. Davis
Title: Chief Executive Officer
of each of the foregoing
<PAGE>
SERCO FORMS, LLC,
a Kansas limited liability company
By: /s/ JOE R. DAVIS
Joe R. Davis
Manager
CONSOLIDATED GRAPHICS MANAGEMENT, LTD.,
a Texas limited partnership,
By: CONSOLIDATED GRAPHICS, INC., a Texas
corporation, sole general partner of
Consolidated Graphics Management, Ltd.
By: /s/ JOE R. DAVIS
Joe R. Davis
Chief Executive Officer
<PAGE>
ADMINISTRATIVE AGENT FIRST UNION NATIONAL BANK,
AND LENDERS: as Administrative Agent and as a Lender
By: /s/ LAURA B. SMITH
Name: LAURA B. SMITH
Title: VICE PRESIDENT
<PAGE>
BANK ONE TEXAS, N.A.
By: /s/ STEVEN C. KRUEGER
Name: STEVEN C. KRUEGER
Title: FIRST VICE PRESIDENT
<PAGE>
WELLS FARGO BANK TEXAS, NATIONAL
ASSOCIATION
By: /s/ H. MICHAEL SULTANIK
Name: H. MICHAEL SULTANIK
Title: VICE PRESIDENT
<PAGE>
THE BANK OF TOKYO-MITSUBISHI, LTD.
By: /s/ JAY FORT
Name: JAY FORT
Title: VICE PRESIDENT
By: /s/ JOHN MEARNS
Name: JOHN MEARNS
Title: VICE PRESIDENT & MANAGER
<PAGE>
COMERICA BANK
By: /s/ T. BANCROFT MATTEI
Name: T. BANCROFT MATTEI
Title: ACCOUNT OFFICER
<PAGE>
FIRSTAR BANK, N.A.
By: /s/ GREGORY L. DRYDEN
Name: GREGORY L. DRYDEN
Title: VICE PRESIDENT
<PAGE>
GUARANTY FEDERAL BANK, FSB
By: /s/ RICHARD MENCHACA
Name: RICHARD MENCHACA
Title: VICE PRESIDENT
<PAGE>
THE MITSUBISHI TRUST AND BANKING
CORPORATION
By: /s/ TOSHIHIRO HAYASHI
Name: TOSHIHIRO HAYASHI
Title: SENIOR VICE PRESIDENT
<PAGE>
BANK HAPOALIM B.M.
By: /s/ JAMES P. SURLESS
Name: JAMES P. SURLESS
Title: VICE PRESIDENT
<PAGE>
HUA NAN COMMERCIAL BANK LTD. -
NEW YORK AGENCY
By: /s/ YUN-PENG CHANG
Name: YUN PENG CHANG
Title: SVP & GENERAL MANAGER
<PAGE>
RZB FINANCE LLC
By: /s/ DIETER BEINTREXLER
Name: DIETER BEINTREXLER
Title: PRESIDENT
By: /s/ FRANK J. YAUTZ
Name: FRANK J. YAUTZ
Title: FIRST VICE PRESIDENT
